090: "Scalability Breaks When Dismissing the Impact of Small Inefficiencies" (lessons from Craig Dunaway)

🧠 Erik’s Take

In this review episode, Erik zooms out from his conversation with Craig Dunaway—President of Penn Station East Coast Subs—to reflect on what makes a franchise truly scalable in today’s business climate. Drawing from Craig’s 40+ years in QSR franchising, Erik breaks down the realities of leading at the intersection of labor, tech, culture, and margin.

This isn’t just about restaurants—it’s about leadership clarity, precision thinking, and building systems that don’t collapse under pressure. Whether you lead a team, a business unit, or a multi-location operation, this episode helps you rethink where your actual risks are—and how to lead with ROI at the center.

🎯 Top Insights from the Interview

• Tech adoption isn’t about innovation—it’s about ROI. If your franchise can’t see a clear path to payback, the “cool” tech is just noise.
• Every ketchup packet counts. Scalability breaks when leaders dismiss the impact of small inefficiencies.
• Labor has changed—and so must your leadership. Gen Z and younger workers aren’t less capable—they’re differently conditioned.
• The restaurant industry is fragile—but the restaurant model is anti-fragile. That paradox shapes how successful franchises grow.
• Franchisees must be detail-obsessed. Culture is what makes or breaks consistency at scale—not SOPs alone.

🧩 The Personal Layer

For Erik, this episode stirred reflections on how easy it is to ignore “invisible leakage” in business—whether it’s financial (like an extra 2 ketchup packets) or cultural (like hiring misalignment). He admired Craig’s unapologetic clarity around ROI, culture fit, and not being seduced by shiny tools. In a world full of tech-first headlines, this was a grounded, systems-first masterclass in responsible leadership.

🧰 From Insight to Action

• Audit your adoption curve. Are you chasing tech too early—or ignoring it for too long?
• Look for your ketchup packets. What tiny leaks are compounding across your org or team?
• Revisit your hiring process. Are you selecting for alignment, not just skills?
• Clarify your North Star. What does ROI look like for you—and is everyone aligned to it?
• Challenge performative clarity. Can your team explain decisions with Craig-level simplicity?

🗣️ Notable Quotes

“If you give out two extra ketchup packets with every order, that’s $10,000 a year. Now do that five more times—and you’re out of business.” — Erik, reflecting on Craig’s example

“Tech in QSR isn’t about being cool—it’s about being stable enough to return capital.”

“The best operators are obsessed with unsexy details. That’s how you scale.”

“Hiring for cultural alignment is more powerful than adding new rules.”

“Franchising is unforgiving—but it’s not impossible. You just have to know where the edge is.”