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Mike Leven: The Bigger the Bureaucracy, the Smaller the Customer

Our American Stories / Lee Habeeb
The Truth Network Radio
October 8, 2026 3:01 am

Mike Leven: The Bigger the Bureaucracy, the Smaller the Customer

Our American Stories / Lee Habeeb

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October 8, 2026 3:01 am

On this episode of Our American Stories, Mike Leven learned one of his most important business lessons in the hotel franchise world: treat the franchisee like a customer, and give that owner every reason to succeed. Done well, he argues, franchising combines the resources of a larger brand with the energy and accountability of individual entrepreneurs.Sharing the story through recalling his time with Days Inn and Holiday Inn, Leven explains why growing organizations so often lose touch with the people they serve and why, in business and beyond, the bigger the bureaucracy becomes, the easier it is to forget who the customer really is. Support the show (https://www.ouramericanstories.com/donate)Support the show: https://www.ouramericanstories.com/donateSee omnystudio.com/listener for privacy information.

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Okay, we're just going to make a quick stop, girl. That is literally the biggest lie I tell myself because one quick stop turns into picking up tu gente, grabbing snacks, loading up everybody's stuff, y de repente andamos en una aventura. Yes, que a veces the best adventures are the ones that you make up along the way. That's why the 2026 Nissan Rogue is ready for wherever the day takes you with. Intelligent all-wheel drive and five drive modes.

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And we continue with our American stories. And up next, Mike Levin. Who was the president and chief operating officer of Las Vegas Sands, and an all-around hotel superstar, one of the great hoteliers of all time. More important, a personal friend, and a wise man. And wisdom, my goodness, in short supply these days.

And he transfers his wisdom through story, a Jewish guy who loves storytelling like almost nobody else. Take it away, Mike. What I learned about the franchise business really started days in, and has really made an amazing impact on me. But you have to understand that my culture of customer orientation was really exacerbated by the franchise business, because what happens in franchising is you put people in business for themselves, but not by themselves. And the interesting thing about it is, it multiplies the entrepreneurial spirit of a free, capitalistic type of system.

But because many smaller people, small people in terms of financial capability, don't have the funds to be able to be in business for themselves at a larger scale. What franchising does is allow them to do that because the franchise provides them the ability to finance their growth, so they're they're playing off the name of the big franchisor, while being in business for themselves.

So it really fits America. Perfectly.

Now it's international, but it was basically American. It's basically, if you look at the franchise model in Asia, the franchise model in Europe, it usually was a large company buying somebody's brand. But in America, it was small people. Individual people doing it, so you had doctors and accountants and lawyers and and small people buying franchises and even individuals buying Subway franchises where they're really making the sub sandwiches themselves. It puts them in for themselves, but not by themselves.

So the whole concept is very American in its nature. But the reality is, when I first got into the franchise business, and when I learned from my Americana days in the franchise business, where I wasn't treated very well by the franchisor, that there was a lot of angst, a lot of aggravation going on, and that when I got today's in, what I learned that if you can treat the franchisee as your customer. They they would just grow their businesses for you, and so you they don't you don't have to use your capital to grow their businesses. They use their capital and their energy to grow, and you take the money off the top, which has very high margin of profitability for you, because the incremental nature of an extra franchise doesn't require that much cost. But you have to be honest and forthright with the money you're taking in for marketing and things like that.

So it really was an absolutely perfect situation for me, because it met all of my instincts in terms of the customer relationship, and consequently, when I got the days in. I learned that not only could you sell lots of franchises, but the ability to keep your franchisee happily built in enormous growth opportunities for you, because they just wanted more. And if you treated them well, if you built relationships with key franchisees, then they they grew your business for you. You didn't have to grow it. All you had to do was to do it right, from the franchisor perspective.

And there are many abuses in franchising. Because franchisors get greedy, and they start ordering people. They build bureaucracies and they order franchisees to do things that they can't afford. They put financial stress on them without thinking about them. And when I finally had my own company, I did a franchise agreement that actually represented those values to its nth degree.

Where I had clauses like you couldn't do a renovation or add an extra cost without two thirds of a vote of the franchise community, you you couldn't do encroachment. That I gave them area protections with every franchise I sold, so you couldn't encroach on their capability.

So I built a franchise agreement that everybody agreed was the best in the business from the customer perspective. The end user is the customer of the franchisee; they are your customer. The franchisee, the franchisee is going to help make you successful by being successful themselves, and you have to reciprocate by helping them to be successful.

So Day Inn opened up my eyes to a whole different world of franchising. What happens when you start a business? You spend a tremendous amount of time making sure your customers are happy, because if they're not happy, you're out of business. As the business grows and you build more corporate overhead and more bureaucracies, everybody wants to be manage the business, and so they forget sometimes who the customer is and and you who started the business with your first customer. You're very close when you have fifty customers.

You're very close when you have five hundred customers. You don't know the last four hundred. Who does know them? Your corporate bureaucrats know them. It's no different than the U.S.

government. When the U.S. government was small in seventeen eighty-two or whatever it was. Everybody, everybody knew who their congressman was. Everybody knew who everybody was.

Now you've got you know three thousand people in the FDA. You've got you know this guy who they don't they don't know who's their customers. When the FDA says, "Well, I think you should close the schools," who are their customers? Their customers are not the drug companies. Their customers, their end user, is the United States citizen.

Are they thinking about them?

Well, they think they are, but some bureaucrat's making the decision that's going to make a decision may not be right for their customers.

So, at the end of the day, I think the best example you might be able to find about government and bureaucracy in general is the bigger your bureaucracy, the further away you are going to get from the customer, and so they don't understand. You know, I had a situation in Holiday Inn where. The marketing director, was a guy named Ray Lewis at the time. Wanted to clean up the company because we had some old and tired hotels, and he was. Anytime somebody would fail an exam, he'd want to throw him out so he could get a new hotel built.

Well, the reality is the people who were building the new hotels were the same people that he was throwing out. Of course, if you look at it that way, so we had a situation where we had a hotel at O'Hare Airport. And they were having trouble with their quality levels because it was getting older, and they couldn't get any money. They didn't have any money, so the marketing guy said, "Well, we should throw them out." It was a half a million dollar royalty a year plus a customer who had many other Holiday Inns, and they called me because they heard he was going to get thrown out. And I said, "I said, well, why can't you get this fixed up?" He said, "We can't get the money.

I need six months to finance it." I said okay, I'll give you another six months. Then the six months came. He didn't have it yet. He said need another thirty days. If the marketing guy was knocking on my door to knock him out, I said let's wait.

Thirty days later, they had the money. They they rehabbed the hotel. Hotel then paid a half a million dollars in royalty plus for the rest of the term, and it helped them.

So after that, you know, they were in the system, and so that's that's what you have to think about. And so, but the further away you are, the the ease of it is that you forget the customers, and you see it all the time in every business. I had a situation here where my insurance was being held by a company in Atlanta. My home insurance for here and Atlanta, for Florida and Atlanta. And I don't hear from the guy every year.

The price goes up, and finally, I got an advertisement for insurance here. From a comparative insurance broker, so I called up and said, "Can you give me a quote?" I said, "Yeah, yeah." I said, "I said, when can you come over?" He said, "Well, when do you need me?" I said, "Well, available Sunday morning." "Oh yeah," guy shows up in my office Sunday morning, makes me proposal better than the one in Atlanta. I never heard from, same quality of insurance, same everything. He got the business. You know, even even look, we have bureaucracy here in the St.

Andrews Club in in in Florida. You know, here this morning I get a note. I own a condominium in Atlanta, and I get a note from the board that they're cutting down trees. They got permission from Atlanta to cut down trees. I also get a note from a resident saying, "Why are you doing that?

Why didn't you tell us in advance?" Who's the customer? Who's the who's the board's customer in the condominium? The owner, the other owners. Why wouldn't you communicate and say, by the way, we're talking about cutting that. Do you have any opinion?

No. And you've been listening to Mike Levin tell the story well of life. And you can go to American Stories and click Mike Levin and get so much wisdom through storytelling. By the way, this American invention, franchising, 20% of all American businesses are franchises, and this cuts from hotels to cleaning services, oil changes, restaurants, gyms, plumbing, extermination, car repairs, and from this system, franchising has created tremendous wealth, tremendous job opportunities, and a tremendous tax base. The story of so much—a wise man, Mike Levin—all here on our American stories.

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Hello, everyone, and welcome to Rushing the Field. I'm Nicole Auerbach, and I'm Joshua Perry. We're so excited to be here to chat about our favorite thing in the entire world: college football. From the biggest headlines and breaking news to the stories shaping the sport behind the scenes, Rushing the Field is your home for everything college football. Whether you're obsessed with rankings, rivalries, or game day drama, we've got you covered.

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That's why I like Sensodyne Clinical White. Its triple action formula whitens, polishes, and helps protect against sensitivity. Plus, it protects against new stains for up to six months, so I can keep enjoying my iced coffee and everything else I love without the sensitivity. Whiter teeth without the wince. Try Sensodyne Clinical White today.

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