Franchising USA - November 2012

Franchising usa T he ma g a z ine for franchisees

Issue 1 - nov 2012

All Fired Up

Blaze Pizza expands nationwide

Franchise

financing Explained

Marketing success

Customer Service:

Stand Out and Succeed LATEST NEWS

FINANCIAL ADVICE FROM THE BANKS

$5.95 www.franchisingusamagazine.com

5 steps to

TOP LAWYERS’ ADVICE

2 Business Franchise Australia and New Zealand

Page 3

Franchising usa T he ma g a z ine for franchisees

FRANCHISING USA VOLUME 1, ISSUE 1 NOVEMBER 2012 publisher: Colin Bradbury. colinbradbury@shaw.ca

EDITOR: Christie Hall. christie_hall@shaw.ca

SALES DIRECTOR: Vikki Bradbury. vikki.bradbury@shaw.ca

SALES EXECUTIVE: Jenn Dean. jenndean@shaw.ca

PRODUCTION: Joanne Tuffy. production@cgbpublishing.com.au

DESIGN: Jejak Graphics. jejak@bigpond.com

COVER IMAGE: Ben Thompson - blaze pizza Photostro.com

CGB PUBLISHING 676 Wain Rd. Sidney, BC V8L 5M5 CANADA www.franchisingusamagazine.com Proud member of the IFA:

SUPPLIER FORUM International Franchise Association 1501 K Street, N.W., Suite 350 Washington, D.C. 20005 Phone: (202) 628-8000 Fax: (202) 628-0812 www.franchise.org

from the

Editor Starting a new project is always exciting. A fresh starts brings with it unlimited possibilities, interesting challenges, and opportunity for growth.

We’re experiencing all of that at CGB Publishing as we bring you our inaugural issue of Franchising USA. It’s an incredible time to be a franchisee in America and we are pleased to be sharing the journey with you. Adding Franchising USA to our international list of successful franchising publications is really exciting for us, and you’ll find that every article in Franchising USA is written with you, the franchisee, in mind.

If you’re already an established franchisee, you’re going to enjoy regular contributions from top legal and financial experts, as well as articles on marketing, motivation, and management. You’ll learn something in every issue!

If you’re new to franchising, we’re here to help you with advice on financing, choosing the right franchise, managing your brand, and much more.

While we look forward to bringing you articles on a wide variety of relevant topics, each issue of Franchising USA will include a particular focus on one area of the franchising industry. In this issue, we look at the food franchise industry, exploring new trends, new technology, and new opportunities. Whether you’re interested in a table service franchise

restaurant, a fast food franchise, or a mobile food franchise, you will not want to miss the news and information we’ve included in our feature piece. We also explore the food truck franchise industry with an indepth look at Food Truck Franchise Group and Gourmet Streets, as well as a profile of East Coast Wings. And Blaze Pizza, featured on our cover, shares some exciting franchise opportunities as they announce their nationwide expansion plans. So many delicious possibilities!

In every issue of Franchising USA you’ll also find news from the franchising world, information from the International Franchise Association, and profiles of successful franchisors and franchisees alike.

Someone once told me there are people who build ships, and people who sail them, but rarely does someone do both. Which type of person are you? Does the excitement of a new enterprise appeal to you? Or do you prefer to step in to a project already under way, and sail off into the sunset?

Wherever your comfort zone lies, you’ll find that franchising allows you opportunity for both building and sailing. The ship may not be built, but the plans have all been drawn up for you. You may not know how to sail, but there are plenty of seasoned sea captains to look to for support as you navigate new territory and successfully grow your franchise business.

As we launch the newest member of our fleet we look forward to sailing with you into the exciting waters of franchising. Thanks for joining us for the journey!

Christie Hall Editor

The information and contents in this publication are believed by the publisher to be true, correct and accurate but no independent investigation has been undertaken. Accordingly the publisher does not represent or warrant that the information and contents are true, correct or accurate and recommends that each reader seek appropriate professional advice, guidance and direction before acting or relying on all information contained herein. Opinions expressed in the articles contained in this publication are not necessarily those of the publisher. The publication is sold subject to the terms and conditions that it shall not be copied in whole or part, resold, hired out, without the express permission of the publisher.

Franchising USA

november 2012

On the Cover 10 Cover Story Blaze Pizza Announces Nationwide Expansion Plans

36 Five Steps for Franchise Digital Marketing Success

Financing Relationships

Robyn Gault, Direct Capital Franchise Group

62 Customer Service: Standing Out in the Crowd

Alex Porter, Location3 Media

Nick Margiasso IV, NM4PR

30

52 Making Sense of Franchise

52

12

f ra nchsing usa

Contents

In Every Issue

18

06 What’s New!

Announcements from the industry

18 Feature Article Food Franchising in America: A Thriving Industry

32 Franchisor In-Depth Food Truck Franchise Group – Gourmet Streets

70 International Franchising Association Is Franchising For You?

Profiled Franchises 40 First Light Home Care 54 East Coast Wings Franchising USA

Expert Advice

16 To Thine Own Brand Be True

Anne Gillaspie, CertaPro Painters

70

12 Buying a Franchise – Is it Right for Me?

Lonnie Helgerson, Helgerson Franchise Group

22 Workers’ Compensation for Franchisees:

What you need to know

Dennis Powers, Lamb, Little & Co.

30 A Short History of Franchise Lending Since 1988

Rick Anderson, Franchise Finance

46

26 Why Veterans Make Good Franchisees

Richard Ashe, Veteran Franchise Centers, RecruitMilitary

42 Are You Prepared to Retire?

John Geenen, Waterfront Financial Group

50 Choosing Between Franchising as a Unit Franchise Owner

Versus an Area Developer or Master Franchise

Carl Khalil & Sada Sheldon, Khalil & Sheldon 56 Build Your Brand From Within by Creating an Energized

Work Environment

Gloria Plaisted, Son Group

42

46 Finding Your Place in Social Media:

How to extract Social ROI by not chasing it

Kelly Maguire, Aviatech

60 Finding the Right Franchise

Jason Miller, ZorSource 67 The Top Five Need-to-Know Requirements Related

to Safety and Health Training

Dale Haskin, Vivid Learning Systems Franchising USA

f ra nchsing usa

what’s new!

ANYTIME FITNESS RANKED #1 “FASTEST-GROWING FITNESS CLUB IN THE WORLD” Featuring a unique combination of individual attention, online support and 24-hour club access, nearly 2,000 Anytime Fitness clubs now serve more than 1,400,000 members in a dozen countries.

Anytime Fitness, which earned the title of “fastest-growing fitness club” by opening 279 clubs in 2011 and 1,474 clubs over the last five years, prides itself on providing members with unparalleled support and encouragement in a friendly, non-intimidating club atmosphere.

(IHRSA ranked Anytime Fitness #1 in one-year and five-year Unit Growth in its annual “Global 25” listings: www.ihrsa.org.) #1 in Growth -- and #1 in “Club Culture”

Nearly 1,500 New Clubs Opened in Ten Countries over the Last Five Years. Non-Intimidating, Supportive “Club Culture” Cited as Key to Success.

From the humble beginnings of its first gym, which was barely the size of a typical home basement, Anytime Fitness (www. anytimefitness.com) has quickly become the fastest-growing fitness club chain on the planet – with no signs of slowing down.

“Many businesses can grow quickly and other companies specialize in earning customer loyalty,” said Chuck Runyon, Anytime Fitness CEO and co-founder. “We take great pride in having accomplished both of those things simultaneously. We’ve done so by focusing first on the needs of busy people who simply want to lead a healthier lifestyle and then by providing our franchisees with the practical tools, technology and educational support to help members achieve their goals.”

The “fastest-growing fitness club” title comes on the heels of several other accolades and noteworthy events for Anytime Fitness.

Red Mango to Open at National Institutes of HealthWork Red Mango, America’s #1 Zagat-rated frozen yogurt and smoothies chain, will soon be serving customers at the National Institutes of Health (NIH) in Bethesda, Md., one of the world’s foremost medical research centers.

The location will open this month as part of a master license agreement with the Eurest Division of The Compass Group of North America, an $11 billion foodservice company that operates dining services on the NIH campus.

“Red Mango has always cherished its position as the only frozen yogurt and smoothie concept primarily dedicated to offering truly healthy menu options to a growing community that desires the very

Franchising USA

best,” says Dan Kim, founder and chief concept officer of Red Mango. “Bringing a Red Mango location to the National Institutes of Health is the crowning statement in our mission to deliver products that are delicious and good for you. Our frozen yogurt and smoothie products are all natural, gluten free, kosher, non-fat, and are the richest in live and active probiotic cultures which support digestive health and a strong immune system.”

The National Institutes of Health (NIH) is part of the U.S. Department of Health and Human Services and is the nation’s medical research agency, making important discoveries that improve health and save lives.

Red Mango, one of the fastest growing retailers of all-natural nonfat frozen yogurt and fresh fruit smoothies, opened its first U.S. store in July 2007 in Los Angeles, and has since celebrated more than 190 store openings in North America.

Page 7

Snap-on Receives Three MOTOR Magazine Top 20 Tools Awards for 2012

CHIEF OPERATING OFFICER ASSUMES ROLE OF PRESIDENT AT TWO MEN AND A TRUCK® INTERNATIONAL TWO MEN AND A TRUCK®, the nation’s largest franchised moving company, has promoted Chief Operating Officer (COO) Randy Shacka to President, a position formerly held by CEO Brig Sorber. The change is effective immediately.

The appointment marks the first time in the history of the company that the title of President has been held by a person outside of the Sorber family. Sorber, one half of the original “two men” of TWO MEN AND A TRUCK®, will continue to serve as CEO. Brig’s brother, Jon Sorber, will continue serving as Executive Vice President, and sister Melanie Bergeron will remain as Chair of the company.

Shacka takes the reins as President during a period of record growth for TWO MEN AND A TRUCK®. The company has seen 32 straight months of growth, the past 13 of which have been double digit increases, and it is on track to reach $250 million in sales

before the close of the year.

“The growth we’re seeing today is, in part, a result of the process improvements and new technologies that Randy has played an integral role in developing,” said Brig Sorber. “His experience as a mover and manager at the franchise level provide him unique insight into our system, and he’ll continue to push us to adapt new systems that allow us to thrive.”

Shacka got his start in 2001 as an intern at TWO MEN AND A TRUCK®. During the past decade he has served as Franchise Development Specialist, Director of Operations, Chief Development Officer (CDO) and Chief Operating Officer (COO).

TWO MEN AND A TRUCK® is the largest franchised moving company in North America. It includes 228 locations with more than 1,400 trucks on the road each day.

Every location is independently owned and operated.

Snap-on Incorporated (NYSE:SNA), a leading global innovator, manufacturer and marketer of tools, diagnostics, equipment, software and service solutions for professional users, announced it recently won three 2012 MOTOR Magazine Top 20 Tools Awards for its Integrity Test Drive by John Bean, SOLUS Ultra® scan tool and Ball Joint Remover for Subaru® vehicles.

The latest honors bring to 37 the total number of awards Snap-on companies have won since the competition began 21 years ago.

The winners were chosen by MOTOR Magazine’s technical editors from hundreds of entries as innovative products that help technicians diagnose and repair vehicles correctly – the first time. According to the editors, the continual development of such tools and equipment is essential so that automotive technicians can properly service today’s technologically advanced vehicles.

“We’re honored to once again be recognized

by Motor Magazine for our innovative, productivity-enhancing solutions,” said Tom Ward, president – Repair Systems and Information Group. “We’re dedicated to providing our customers with the tools, diagnostics and equipment they need to perform better and more efficiently in the repair shop every day. Our goal is to make work easier for professionals and these products achieve that end.”

Franchising USA

f ra nchsing usa

what’s new!

Proforma Recognized as Top 10 “Best Place to Work”

by Counselor Magazine Proforma has been named in the top 10 “Best Places to Work” by the Advertising Specialty Institute’s (ASI) Counselor magazine. This year Proforma made a significant jump up on the annual list and is ranked #9.

Proforma Owners at the top of the industry in providing excellent customer service and expert business solutions advice. Workplace satisfaction is a strong indicator of the reliable, long term service and experience you can expect from a company.

The fifth annual Counselor magazine “Best Places to Work” Survey was conducted by Quantum Market Research, Inc. Quantum surveyed Proforma Owners to evaluate how they rated their satisfaction with their Proforma support in ten different areas. These areas ranged from “team effectiveness” to “trust in senior leaders.”

In addition to being named as one of the “Best Places to Work,” Proforma has been recognized as the #2 Top Distributor

by Promo Marketing magazine and the #3 Distributor by Counselor magazine.

Proforma also received three InHouse Design Awards from Graphic Design USA.

The “Best Places to Work” ranking positions

Each member of Proforma has a full suite of support including access to award winning

marketing campaigns, a newly enhanced technology platform, financial backing, free credit insurance, the buying clout that lowers costs five per cent – 15 per cent with a proven vendor network and more.

Maui Wowi Hawaiian’s Seasonal Fall Coffee Now Available Online Maui Wowi Hawaiian, adds its new limited-time offer coffee, Maui Mountain Roast, to the company’s online shopping site.

Maui Mountain Roast is described as a

Maui Wowi Hawaiian adds its new limitedtime offer coffee to http://www.shop. mauiwowi.com, the online shopping site for premium Hawaiian coffee. The recent release of their Maui Mountain Roast is now available to order online and marks the first time the company has offered an LTO through e-commerce.

cultivated in the premier coffee growing

“We wanted everyone to have the chance to enjoy and take advantage of the limited-time offer of Maui Mountain Roast,” said Mike Weinberger, vice president of operations at Maui Wowi Hawaiian. “Our online shopping site grants customers access to purchase premium Hawaiian coffees and Maui Wowi special limited-time offers previously only available in stores.”

Franchising USA

bold coffee with subtle hints of wildberry and an earthy finish that is distinctly

unique from other blends; containing beans conditions on the island of Maui. Other

items available include whole bean 100 per

cent Kona coffee, Molokai blend, as well as fresh ground flavored varieties like vanilla, coconut, and chocolate macadamia nut.

The Maui Mountain Roast is available

through the fall months and can be ordered

in whole bean by either individual 12 oz. bags or by the case.

Maui Wowi, which also specializes in a line of all-natural, gluten-free, fresh fruit smoothies, is celebrating 30 years in business. Their online retail site was launched earlier this summer, expanding the brand’s reach throughout North America.

The franchise company has recently experienced additional expansions in Southern California, as well as abroad, and continues to grow its presence at events, venues, and retail locations worldwide.

Page 9

Fresh Healthy Vending Franchise Owners Continue to Grow Over 33 per cent of company franchisees have grown their business by adding machines to their already successful healthy vending routes.

The world’s largest Healthy Vending business has appointed 137 franchisees since its inception in 2010. Recently, we reported that over 33 per cent of these franchise owners have grown their businesses by adding more machines, a statistic that is overwhelming for the franchise industry as a whole and a true indicator that Healthy Vending as a category is the most promising within the vending industry.

Fresh Healthy Vending provides a business model that incorporates bright, colorful and high-tech Healthy Vending machines that can be operated and monitored remotely.

These machines accept debit and credit card and sell a range of popular brand name items such as smoothies, yogurts, organic gourmet coffee, fruits and vegetables in addition to beverages and snack items such as iced tea, protein shakes, organic cookies, bars and chips.

Dan Negroni, the company’s CEO, claims the reason his established franchisees are buying more machines is because the model is simply so scalable. “Our goal with each franchisee is to deliver the healthy vending machines to locations that provide the best possible chance of financial success.

Our in-house locations team has become exceptional at identifying which locations will provide our franchisees with the highest

possible return on investment; we then go

one step further and secure contracts with each location on our franchisee’s behalf.”

Fresh Healthy Vending has over 137

franchisees available in approximately 45

States of the US and is now operating new franchisees in the Bahamas, Puerto Rico

and Canada. The company has sold over 1800 healthy vending machines in just 2

short years and plans on finishing 2012 with over 2300 machines in total operation.

National Retailer Flip-Flops Into Election Season, Literally Flip Flop Shops Gets into Political FlipFlopping with Barack Obama and Mitt Romney Flip Flops Flip Flop Shops, a global retail franchise that exclusively sells the hottest brands and latest styles of flip flops and sandals, is making an official entry into U.S. politics with the Flip Flop Shops’ Limited Edition Obama/Romney Flip Flop line. The flip flops, which don the faces of both political candidates and seek to make light of their propensity to flip-flop on major issues, will be available until the election at all Flip Flop Shops locations nationwide and online at http://www.flipflopshops.com, retailing at $25.

“The national debt has 13 zeros behind it and we have two candidates that can’t take a firm stance on political issues – what better way to address both problems than with

some flips flops,” said Darin Kraetsch, the CEO (Size 10) of Flip Flop Shops. “We’re not unilaterally going after either party or candidate. We’re simply calling awareness to these issues in a bipartisan, nonpartisan, and non-party affiliated method.”

“At Flip Flop Shops we’re all about flipflopping, but we think it should be solely the kind that stay on your feet. This is a fun way to call attention to the fact that both these candidates go back and forth on major issues,” said Brian Curin, the President (Size 10) of Flip Flop Shops. “We’re also helping lower the national debt – if the government can’t do it, at least Flip Flop Shops can help.”

Bursting onto the retail scene in 2004, Flip Flop Shops quickly became North America’s first retail chain exclusive to the hottest brands and latest styles of flip

flops and sandals from such leading brands as SANÜK, OluKai, Quiksilver, ROXY, Reef, Cobian and Cushe, among others.

Its mission: to provide the opportunity for anyone, in any climate, to Live…Work…

Play With Their Toes Exposed® with the freedom of flip flops on their feet.

Today, Flip Flop Shops has more than 60 locations operating throughout the United States, Canada, Guam, and the Caribbean, with 100-plus shops in the development pipeline.

Franchising USA

cover stroy

Blaze Pizza

A nnounces N ationwide E x pansion P lans

New Fast-Casual Pizza Concept Now Registered To Franchise In 32 States Food loving entrepreneurs looking for the “next big thing” are keeping a close eye on Blaze Fast-Fire’d Pizza, an innovative concept bringing pizza to fast-casual dining.

A pioneer in the assembly-line artisan pizza category, the company announced that it has begun to accept franchise applications in key markets across the US. Blaze Pizza plans to build a footprint of stores across

California and select US cities through a combination of both company owned and franchise locations.

Blaze Pizza’s first location -- a 2,600 sq. ft., 90-seat space in Irvine, CA, opened last month to enthusiastic reviews and is experiencing long lines at both lunch and dinner. The company’s second restaurant, a 2,800 sq. ft., 100-seat location in Pasadena, CA, is set to open in the city’s vibrant Theater District in early October. A third location in LA’s west side is also underway.

The company plans to have 15+ Southern California locations by the end of 2013, and

to partner with franchisees to grow into a national brand.

A creation of Elise and Rick Wetzel (founder of Wetzel’s Pretzels), and featuring the talents of Executive Chef Bradford Kent (owner of Los Angeles’ top rated Olio Pizzeria & Café), Blaze Pizza is backed by a number of well-known investors including Maria Shriver, movie producer John Davis and Boston Red Sox co-owner Tom Werner.

Initial western markets now available for franchising including Los Angeles, San Diego, San Francisco, Portland, Phoenix, Salt Lake City and Denver. In addition, the company is now accepting applications for multi-unit franchise candidates in New York, Boston, Chicago, Miami, Orlando, Houston and Dallas. “We’ve received a tremendous amount of interest in the concept and are pleased to be able to now move forward strategically with franchise expansion,” said company president Elise Wetzel. “Our plan is to selectively identify those franchise candidates who we are confident can execute successfully in this category, and work together to develop Blaze into a national brand.”

Blaze Pizza uses a “co-created”, assembly line format (similar to Chipotle Mexican Grill®), that lets guests customize one of the menu’s signature pizzas or create one of their own, choosing from a wide selection

Franchising USA

Page 11

of fresh, artisanal toppings -- most included for no extra charge. The generously sized personal pizzas are then sent to a blazing hot open-hearth oven, the centerpiece of the eatery, where dedicated pizzasmiths ensure that the thin-crust pies are “fast-fire’d” in a scant 120 seconds. Blaze Pizza makes its own dough from scratch using a recipe Kent developed, which requires a 24-hour fermentation period to produce his signature light-as-air, crisp crust. Blaze’s menu uses fresh ingredients ranging from inventive to classic and accommodates certain dietary needs, with a gluten-free dough and vegan cheese option.

Guests may also opt for one of the restaurant’s signature salads -- like the Antipasto or Caprini -- or create their own from a wide selection of fresh greens, toppings and house-made dressings. The

“Our plan is to selectively identify those franchise candidates who we are confident can execute successfully in this category, and work together to develop Blaze into a national brand.” diner’s last step is to select a beverage and pay -- feeling good, as they’ll typically be out less than $10 for a generously sized personal pizza and a drink. By the time they’ve grabbed a table, their crisp-crusted pizza is ready to enjoy.

take-out, delivery and dine-in pizza places fall short for discerning pizza fans looking for a quick bite,” says Rick Wetzel, Blaze Pizza’s chief ideator. “We’re able to deliver an unbelievably good pizza, lightning fast, at a very affordable price.”

Pizza in the United States is big business – with an estimated 65,000+ pizzerias generating more than $35 billion in sales annually. Still, the Wetzels believe that there is a sizable opportunity in the rapidlygrowing fast-casual segment. “Today, most

Direct franchise inquiries to: Email: info@blaze-pizza.com Phone: (626) 393-5554 Blaze Pizza, LLC 530 S. Lake Ave., Suite 280 Pasadena, CA 91101.

Franchising USA

ex per t advice

Lonnie Helgerson, CFE, CEO, Helgerson Franchise Group

Buying a Franchise

– I s it R i g ht for M e ?

article is to help you avoid buying a franchise at all - if franchising is not suited for you.

Franchising is definitely not for everyone.

However there are hundreds of thousands of people who enjoy running their own business and the lifestyle that it offers.

Congratulations - we have both succeeded so far!

For you, reading this article means that you are contemplating the world of franchise ownership and have taken your first steps towards that goal. As for me, I have managed to catch your attention long enough to offer up some straight-forward advice on your franchise quest.

You won’t find a lot of fluff or hype about the successes of franchising in this article.

What you will find are 10 mistakes or assumptions that people sometimes make while investigating or contemplating a franchised business. My goal with this

Franchising USA

As CEO and founder with nearly 30 years of franchise experience, I have witnessed great people enter into a franchise for all the wrong reasons, and in the end it has cost them dearly. On the flip side, I have seen great people enter into a franchise and have experienced success beyond their dreams.

The difference between them often times - is whether they should have gotten involved with franchising at all.

Being an Entrepreneur vs.

Frantrepreneur Some Franchising Facts: • Buying a franchise will put you light years ahead in terms of startup and development time.

• Franchising provides you the support and tools to help you reach your business goals.

• Buying a franchise will provide you training that would otherwise take years of experience to acquire.

• Regardless of how good you are at business - you have never owned and operated the type of franchise you are evaluating.

• When you decide to sell your business, a franchise brand has more value than “Fred’s Sub Sandwiches”.

Buying a franchise will put you light years ahead in terms of startup and development time.

Let’s face it! Running a business can be one of the hardest things you will ever do in your life. But before you even get to the running part of your business, you must decide which one is the best fit for you and then get your doors open for customers. Before you even open your business, there are literally hundreds of details that need to be taken care of. Here are a few to think about: • Your business plan • Financing your business • Marketing your business • Real estate needs and selection • Lease negotiation • Real estate build-out (floor plan, architect, contractors, utilities, permits, etc.)

• Employees (hiring, operations, HR manuals, etc.)

Page 13

business - you are literally on your own.

No one is there to support or care about you. When you have questions or run into problems with your business, who will you turn to? Your banker? He will ask you what you are going to do to fix it, not offer suggestions on how. Then he will put you on a watch list because he is nervous that you are going to default on your business loan. Not a good picture is it?

Franchise companies are not in the business of opening new locations just to watch them go down the tubes. Closed locations do not bode well for them in trying to grow a national brand. Good franchise companies will work with you in a proactive fashion to try and keep you from getting into trouble.

As long as you are willing to work with them - they will coach you along the path of business growth.

• Store signage (permits, etc.)

• Initial inventory (floorplan, merchandising, etc.)

• Grand opening • Computer and phone systems, point of sale, store music, etc.

• Employee training • Operations manual • Accounting requirements and setup • And the list goes on and on and on…

So now the question is… Have you ever done ALL of this once before? Or maybe even twice? How about 25 times? Or even 100 times? Your potential franchisor has and that is a very compelling reason to buy one.

Franchise companies have store development and opening down to a science. What could take you months or longer on your own, can now be shortened down into weeks, or in

some cases days - depending upon which franchise system you join. If you think about this in the right context – compare the savings in time to what you are paying upfront for a franchise fee.

The quicker you are open for business - the quicker the cash register starts to ring. The extra sales brought in by being open twelve months, six months or even a month sooner (depending upon the franchise concept) could easily exceed the initial franchise fee.

Bottom line! Franchising springboards you into getting your business open quicker and generating sales much faster than doing it on your own.

Franchising provides you the support and tools to help you reach your business goals.

Okay, let me paint a picture for you…

When you are a non-franchised independent

If you do get into trouble, most franchise companies will work as hard as they can to help you make changes to bring stability back to your business. Remember, it is their brand on the sign and they do not want it to go dark either. Franchisees that listen and work with their franchisor can typically expect to have a viable business much longer than their counterparts that took the route of a non-franchised independent business.

Buying a franchise will provide you training that would otherwise take years of experience to acquire.

Again, franchisors have dealt with everyday business problems hundreds, or even thousands of times. Their training curriculum reflects that experience. More often than not, you will be trained by a number of executives, training staff in specialized areas, or even franchisees in the system. Initial training periods will vary depending on the franchise type and may also include onsite training. Some

Franchising USA

ex per t advice

Lonnie Helgerson, CFE, CEO, Helgerson Franchise Group

franchises may even require you to work in an operating unit before you open or are even considered as a candidate for their system. This depth of training is not available outside of the franchise arena. And I certainly do not know any independent business owner that will train you to go into competition with him!

Business knowledge takes hard knocks

business - you have never owned and operated the type of franchise you are evaluating.

never have time to advance the business. In other words, if you work “IN” the business, you can’t work “ON” the business.

This topic is one of my favorites because it involves ego. Let’s face it - we all have one whether it is large or small. When buying a franchise, check your ego at the door.

Even if you have been in business for years, there are particulars and nuances about the

When evaluating a franchise - open your mind, approach the opportunity in a learning fashion and the whole process will be much smoother and more enjoyable for you.

When you decide to sell your business, a franchise brand has more value than “Fred’s Sub Sandwiches”.

Sorry if your name is Fred - but I have a method to my madness. When it comes to selling an existing business, a national or even a semi-national brand name is typically easier to sell and will bring a higher return than an independent business. The reason why is, generally as a non-franchised independent business, the business itself is sometimes so tied to the original owner’s know-how (sometimes even in name) that often times without the original owner, the business does not survive after the sale.

“Franchising springboards you into getting your business open quicker and generating sales much faster than doing it on your own.” to learn. Your potential franchisor has

been through this. Training is an often overlooked asset that you receive when

you purchase a franchise. If you had to

pay for the combined knowledge that your franchisor has gleaned from their years of

hard knocks and their system best practices believe me it would be much more than what you are paying for the franchise fee.

Regardless of how good you are at

Franchising USA

concept you are looking to buy that only people who have ran one will know.

This is a business that you are buying and

it involves a great deal of forward vision to

keep it going. Let’s use computer repair as

an example. If you are a great tech and have all of the credentials in the world - does

that mean you know how to run a business?

Probably not. If you purchase a franchise

and get caught up doing the tech work, you

A franchise has much tighter operations, procedures, systems, marketing, purchasing, and brand equity (customer awareness) built throughout the system. As well, all new owners must go through formalized initial training, which often takes the existing business to even greater heights. Most franchise companies will assist their owners in selling their business and will advertise it to their pool of potential new franchisees looking to enter the system.

Bottom line… SUBWAY® has a greater resale value than an independently owned Fred’s Sub Sandwiches location. Even though it was a guy named Fred that started SUBWAY®.

Success Tips: • If you’re a wheel inventor – franchising is not for you! If you can make the

Page 15

franchisor’s wheel turn faster – you’re one step closer to success.

• When evaluating a franchise concept, ask them about their startup, development and build out assistance. You will find most of them are quite sophisticated in this area.

• Really think about the on-going assistance you will receive, versus what you will endure on your own as an independent. It will add years to the life of your business.

• When attending training, leave your ego at home.

• Try to focus on starting and building a business, not working in one.

Avoid the Top 10 Mistakes People Make When Researching Franchises • Being an Entrepreneur vs.

Frantrepreneur - Franchise systems don’t want their wheel reinvented; they want people who can make the wheel turn faster.

• Confusing a franchise with a job - If you only want to work 8-5, don’t apply for a franchise.

• Assuming you can just try it out awhile - Franchise Agreements typically average ten years in length, so be prepared for a long-term business.

• Not being financially prepared for the investment - Starting a business takes cold hard cash - be ready for that.

• Working in the business – Not on it - Franchise systems want business builders - not business workers.

• Going it alone - You will be doomed for failure if your spouse or partner does not support your business interests.

• Sticking to what you know - What you’re good at doing today, may not always be the best franchise for you.

• Having lone wolf syndrome - Franchising is about consistency and teamwork – you will need to get along with others.

• Not sharing your information - Be prepared to share personal and financial information with a franchise company.

• Expecting automatic success - Franchise systems provide you the tools – you still need to use them and build a business.

The preceding article is an excerpt from the handbook Buying a Franchise – Is it Right for Me? by Lonnie Helgerson, CFE. Lonnie Helgerson is the author of the bestselling book in franchising Five Pennies: Ten Rules to Successfully Build a Franchise Mega-Brand and Maximize System Profits and the handbook Buying a Franchise - Is it Right for Me?

With nearly 30 years in franchising, Lonnie has worked with many major brands including Super 8 Motels® and Ident-A-Kid®. He pioneered the technology sector in franchising, founding Computer Doctor®, the first franchise of its kind. Currently, Lonnie serves as the CEO of Helgerson Franchise Group, a platform company that owns and operates franchise brands and provides franchise services for new, emerging, and mature franchise systems.

An accomplished speaker, trainer and facilitator with a national presence, Lonnie has been a frequent presenter for the International Franchise Association, Franchisor Association of Florida and other franchise and business groups.

For more information contact Lonnie Helgerson at: Email:

Web:

lonnie@ helgersonfranchisegroup.com www.helgersonfranchisegroup. com

Franchising USA

ex per t advice

Anne Gillaspie, Brand Manager, CertaPro Painters

To Thine Own Brand Be True work is really involved for local store success?

You wake up finding yourself in this scenario, you just purchased a franchise. Congratulations!

Now what?

Often-times, a new franchise owner may go through a bit of panic or buyer’s remorse, which gradually turns into a celebration of power and freedom that comes from owning your own business. Franchise owners also get to enjoy the benefits that trickle off from national brand recognition and simply carry this through their local business. In this article, I’ll be identifying the importance of local branding in addition to a strong national brand name. As local branding is just as important as national, how much

Franchising USA

Franchise brands are commonly known for their great presence in multiple countries, yet a consumer of their product/service may only consider the brand to be locally operated in their home town. Why do some brands succeed here, while others are labeled “corporate” like? The answer to that question would lie mostly with the level of engagement and interaction each franchise owner consistently delivers directly to their consumers. What a successful franchise owner will accomplish from local branding might result in that “A-ha” moment when the consumer travels outside the city, only to see a TV commercial for a brand in which they thought was locally owned and operated. If this happens to your consumers, you’ve done it right. The key is engagement, allowing your consumers to feel a strong sense of community with your brand, loyalty, and purpose in an over saturated market, full of goods/services at their fingertips.

On the flip side, are we encouraging large franchise chains NOT to advertise as a national brand name? Not necessarily, as you will find long and loyal consumers looking for that nationally recognized brand name, in which they trust with their home/family/friends. Once your consumer discovers you aren’t the local guy down the road (who might not be in business within the next year), and you continue producing strong results, they’ll want to

look you up everywhere they go, when they need your product/service again. It is the responsibility of the franchisor to implement this ‘blanket level’ of brand awareness through multi medium tactics, like radio and television commercials. Also, take into account the strong web presence of brands, diving into the mobile app world, engaging consumers through video popping up on related sites. When these ads air in multiple markets, the jingle, tag line, and/or logo will (hopefully) stick with your consumer wherever they move or travel to next. And the strength of the franchisor’s efforts will enhance each franchise owner’s success for the long term.

How does a new franchise owner go about creating or continuing a strong local brand?

Grassroots marketing can encompass several marketing tactics, utilizing brand recognition materials like signage, flyers, billboards, local promotions, events, and even sponsoring sports teams and schools around the city. When you, the business owner, engage with your consumers on a personal level, there is emotion behind your brand and with emotions come power. We know consumers recommend companies they feel “took care of their needs or problems” with a level of emotional connection and consideration. This relationship will stem your customers for life program, and create local promoters for your brand, hopefully lessening your local marketing costs over the years you

Page 17

stay in business, as they will do most of the marketing for you, via Word of Mouth (WOM). We strive for referrals to be the majority of our business, as they produce larger jobs, stronger business relationships, and consistent revenue streams.

Carrying your national brand into your local community, using the same campaign theme from large medium sources, like TV/ Radio, by printing the campaign on flyers and signage, will help synergize efforts from your head office, connecting your business with the larger initiatives in the marketplace.

Sitting back and hoping the national activity will carry your business to the next level of greatness has never proven successful in our years of franchising. There is a great level of marketing effort put forth by the local owners who result in double digit growth year after year. When franchise owners are the biggest fans of their own brand, consumers will find it difficult not to share in that same level of passion for what you’re delivering to them time and time again.

If you’re considering a franchise, versus starting up your own operation, think about the years of brand development attained by the franchisor. How many years have they been marketing, and consistently putting their message out there? Let’s say the franchise you’re considering has been operating for ten years, and in those years, has been running successful marketing on both the national level and local levels for at least five of those years. Compare the strength of their brand (have you heard of them before) to the strength of your startup brand within the first three years. The first one - three years of owning a franchise is a learning curve, where even if you’re not putting anything into your own marketing due to time constraints and such, you’re continuously benefiting from some level of brand awareness that has been executed over the years. With a startup, branding your new venture within the first three years could be the most important task you do, aside from completing work that brings

“Branding is the most important thing to execute well when opening a new business or franchised business.”

income into the business. Yet startups can make the mistake of marketing jobs, to bring in income, yet overlook creating a strong brand and message for their consumers, resulting in a fizzled concept creating confusion in the marketplace.

Startup owners allocating their time to both growing the business’ revenue while reinforcing the brand messaging will see the results of a growing concept, slow and steady, allowing consumers to catch on and become a fan. Sure there are royalties involved in purchasing a franchise, but you should ask yourself what those royalties are worth to you, in terms of the marketing efforts put forth within your first three years of owning your new business. Businesses who continue marketing, year after year (even through down economic times) are more likely to grow in numbers of 300 per cent+ when the market returns, compared to those who discontinue marketing altogether to ‘save on cost’.

Branding is the most important thing to execute well when opening a new business or franchised business. Giving this a good amount of thought prior to your first sale will pay off in the long haul, as each consumer will identify with your brand, your story, and ideally with you. Creating the emotional connection to what you and your brand stand for will create those customers for life, and carry your success through the roller coaster of highs and lows in economic cycles. Engage within your marketplace, create a buzz throughout your new promoters, and leverage growth by valuing every smiling face that you come across in your new line of work.

Anne Gillaspie, Brand Manager at CertaPro Painters, has developed market positioning strategies and lead acquisition programs from the ground level to the national level. She has executed several grassroots marketing campaigns, teaching franchise owners and their marketing staff how to create a strong local presence.

Contact her at: Email: Agillaspie@certapro.com.

Franchising USA

feature F ood F ranchisin g in A merica :

A Thriving Industry goals in your franchise location.

When you first thought about getting into franchising, you probably thought about one of the many familiar food franchises across America, and with good reason.

Out of the dozens industries available for franchising, food franchising was where it began, and it is still one of the easiest and most profitable ways to run a restaurant.

Your table is ready National Restaurant Association research shows that customers at table service restaurants are looking for three things: food quality, quality of service, and value. Being part of a franchise gives you the tools and support necessary to achieve those three

Franchising USA

Starting a food franchise is much less complex than starting an individual restaurant on your own. Franchisors have systems in place for everything from location finding and leasing, training of employees, point of sale systems, not to mention of course menus and recipes that are created for you. You don’t have to figure it all out on your own. The standardization of food franchise menus is one of the major reasons why food franchises are so successful. A standard franchise menu takes the guess work out of ordering. People know what they like. When they visit another city, state, or even country, they know that they can order the same thing they like to order at home.

Aside from the menu, having a nationally recognized brand on your front door gives you a leg up on the competition.

Franchisees most often contribute towards the national advertising budget of the franchisor. This allows exposure and marketing on a level that would simply not be possible for a single restaurant to accomplish. Being associated with your franchise brand also adds credibility, which carries significant weight with the consumer.

When people walk into your restaurant and sit down, they know to expect a certain level of service, what the prices are going to be, and that it is going to be top quality.

Most franchise locations will even have the same or similar dĂŠcor, giving a comfortable, familiar feeling to your patrons.

Fast Food Fast food franchises make up a significant

Page 19

truck franchises. Today’s food trucks are equipped to cook just about any type of food you might find in a more traditional restaurant setting. The bad rap food trucks used to have is a thing of the past. In a recent survey of chefs, the NRA found that 61 per cent of them would consider operating a food truck. Done properly, it is an efficient way to produce good food quickly, at a great price. Having a franchise brand to back that up will give your food truck increased credibility on the street, and will give you the systems and support necessary to be successful.

“Franchisors have systems in place for everything from location finding and leasing, training of employees, point of sale systems, not to mention of course menus and recipes that are created for you. You don’t have to figure it all out on your own.” portion of the food franchise industry. Since 1940 when Ray Kroc raised the golden arches of the first McDonalds franchise, leading the way for franchising in America, the fast food, or quick serve, industry has grown to include over 300,000 individual franchise units in the US, accounting for more than half of the global fast food market.

The demographics of a fast food franchise customer run the gambit, from busy executives grabbing a quick bite on the go, to retired folks who enjoy a certain coffee and donut shop as part of their regular routine. But by far the largest demographic group contributing to the fast food franchise economy is the 12-30 year old age bracket.

These folks visit fast food franchises with the greatest frequency due in part to the disposable income of middle class youth.

This is something to consider when choosing your location. Teenagers also make up

the majority of employees in fast food franchising. It is fun but challenging work for someone looking to build skills and get a start in the work force. These restaurants differ from traditional table service establishments in a number of ways. They generally have a somewhat limited menu, patrons often order and pay at a counter prior to eating, and the food is packaged and ready to eat on the run if necessary. Let’s all offer our thanks to Henry Ford’s production line model for putting the fast into our food.

Mobile Food Franchises Taking fast food to the streets, mobile franchises, or food trucks, have experienced a huge growth in popularity in recent years.

Food trucks provide the ability to take the food directly into areas where there will be a high volume of customers. College campuses, military bases, and corporate campuses have all become home to food

There are a number of factors which create an environment of success in fast food franchising, which includes mobile franchises or food trucks. According to the National Restaurant Association, patrons look for three things in a fast food franchise: food quality, value for their dollar, and speed of service. But even the highest quality, most affordable, quickest restaurant will struggle if they don’t get one thing right.

Location, location, location. Whether you’re located in a storefront, mall, convenience store, airport, food truck, or as a stand-alone structure, part of the appeal of fast food is the convenience. And convenience means accessibility. For that reason, fast food franchises tend to be located in high-traffic areas (both foot and vehicle traffic). They need to be accessible, visible, where there is significant population to support the business, and where traffic flow is good. It’s nice to see your favourite burger franchise as you speed along the interstate. It’s even nicer if you can get to it.

A great time for the restaurant industry No one can deny that it’s been a tough few economic years in America. But the restaurant industry as a whole continues to thrive. “As our nation slowly recovers from the economic downturn, restaurants continue to be a vital part of American lifestyles and our nation’s economy,” according to Dawn Sweeney, president and CEO of the National Restaurant Association.

“We expect the nation’s nearly one million restaurants to post sales of $632 billion this year. Combine that with the fact that restaurant growth is expected to outpace the

Franchising USA

feature overall economy for the 13th straight year, and it’s clear that the restaurant industry is once again proving to be a significant economic stimulant and strong engine for job creation.” Although the economy has seen better days, people are still eating out in large numbers. In fact, the NRA found that there is a pent up demand for restaurant patronage. Two out of five consumers say they are not visiting restaurants as often as they would like. With the right incentives, that demand can translate into sales.

Current Menu Trends As a food franchise operator, you want to provide quality food, at good value, in a timely manner, from a location that provides access to the right population density. But if that isn’t enough, the key to increasing sales can be found in staying on top of current trends.

In an online survey of nearly 1800 chefs from the American Culinary Federation in October/November 2011, the top three restaurant trends were: local meat and

Franchising USA

seafood, local produce, and healthy kids’ meals. Food franchises are jumping on board with the idea of healthy meals for children, by offering healthy sides, reduced sodium, and providing smaller portions.

Many food franchises now offer mini meals, a small version of a healthy adult meal.

Nearly 75 per cent of adults say they are also trying to eat healthier at restaurants. Most fast food franchises offer a grilled chicken alternative to burgers or crispy deep-fried chicken. These options generally come in under 400 calories. And most food franchises have nutritional information available either on the menu, or on their website. But if that still doesn’t hit the mark for healthy eating, there are a number of franchise options that have designed their entire menu with the health-conscious consumer in mind.

Technology Trends Beyond food trends, food franchises are becoming increasingly more technosavvy, keeping up with trends in the digital marketplace. According to the

National Restaurant Association’s 2012 Restaurant Industry Forecast, nearly four in ten consumers say they’d be likely to use an electronic ordering system and menus on tablet computers at tableservice restaurants. About half said they would use at-table electronic payment options and a restaurant’s smartphone app to view menus and make reservations. At quickservice restaurants, about four out of ten consumers say they would place online orders for takeout, use in-store self-service ordering kiosks, and use smartphone apps to look at menus and order delivery.

What’s more is that in today’s überconnected society, email and text messaging are proving to be an effective way for restaurant operators to reach their consumers. Roughly three in ten adults said they would like to receive an email with daily specials, while about one in five prefer text messages with similar information. If a restaurant’s specials were available on Facebook or Twitter, nearly one-third of consumers say they’d be likely to sign up, indicating that social media continues to be

Page 21

a powerful marketing tool. Used correctly, social media platforms provide opportunities for amazing direct marketing, at very little cost to the business. Engaging customers in social media helps to build a relationship between the customer and the brand. That relationship translates to loyalty, and in a fast and ever-changing world, loyalty is key to customer retention.

Choosing a Food Franchise If you’re considering starting a food franchise, there are a number of factors to consider. Your own interests and skill will play an important role in what direction you head. If you have a passion for a certain type of food, that may influence your decisions. Your geographical location will also be an important factor. Does the market exist for what you want to offer?

According to the recent Special Report on the Top 40 Food Franchises, compiled

by Franchise Business Review, a national market research firm that performs independent research of franchisee

satisfaction, food franchising is definitely a strong choice for a prospective franchisee.

Based on a survey of more than 4,000 franchisees from 84 brands in the food sector, Franchise Business Review’s study looks at an array of franchise concepts to assess the investment opportunity, pros and cons of the sector, and the success attributes of franchisees, as well as the outlook for food franchising in 2013. The report also lists the top 40 food franchises based on franchisee satisfaction.

Franchise Business Review’s research shows that the average profitability among franchisees is up 5.8 per cent year-overyear. Average profitability among Franchise Business Review’s Top 40 food franchisees looks even better–15 per cent higher than the rest of the sector.

Franchise Business Review reports that the food franchise sector has seen a marked improvement in franchisee satisfaction over the past couple of years, and more than 70 per cent of the food franchisees surveyed said they would recommend their brand to

other franchisee candidates.

“Most food franchisors are beginning to understand that satisfied franchisees are more successful and more engaged, which drives improvement at the corporate level,” said Franchise Business Review president Michelle Rowan. “The brands on our list have maintained extremely high franchisee satisfaction, and, as a result, many have experienced double-digit growth right through the recession.”

For the full report and Franchise Business Review’s list of the top 40 food franchises, go to: www.franchisebusinessreview.com

Food Franchises Advertising in this issue: Blaze Fast Fire’d Pizza - 10 Bennigan’s - 2 East Coast Wings - 54 Food Truck Franchise Group - 32 Huddle House - 73 Little Caesars - 39

Franchising USA

ex per t advice

Dennis Powers, AIC, ARM, SCLA, CPCU, Lamb, Little & Co.

Workers’ Compensation for Franchisees: W hat you need to know

premiums, which after payroll, seem to be your largest expense. Why do you need workers’ compensation, and most importantly, what can I do to control the cost?

It is time to enter a new and exciting phase of your life by purchasing a franchise.

You are being pulled in all different directions while trying to get your business up and running. Now you’re being asked to purchase workers’ compensation insurance to protect employees that you might not even have working for you yet. Or better yet, you have been in operation for years and to this date you have not had to report a claim but still continue to pay workers’ compensation

Franchising USA

Workers’ compensation has become a necessary evil for most business owners across the United States. The laws in all States are pretty clear that a “no fault” system be established in order to protect the injured worker from having benefits denied to them in part to their own comparative negligence that contributed to their workrelated injury. The trade off to the employer with this “no fault” system is that the employee can no longer sue their employer for their work-related injuries. The common rule of thumb is that if the injury occurred during the course and scope of the worker’s employment, then the claim would be found compensable.

Theory tested: Joe Smith is working for a janitorial franchise cleaning a client’s floor while listening to his IPOD. Being immersed in his music and maybe not in his most attentive state of mind, Joe is not aware that he is backing up towards a stairwell and falls down the stairs, resulting in multiple injuries. Would this claim be found compensable under most States’

laws considering a solid argument could be made that Joe’s inattentiveness is likely a key contributing factor to his fall? The answer in most, if not all cases would be a resounding “yes” as Joe was found to have been in the course and scope of his employment.

Let’s talk about the cost of workers’ compensation insurance. As we mentioned earlier it can often be an employer’s second largest expense after payroll. Well the key factor here is that your payroll is going to dictate your manual premium. No matter which State you are in, thousands of class codes are designated for all levels of employment ranging from Home Health Care to Manufacturing to Retail. Every year each class code is then given a specific rate per every $100 of payroll and then it becomes a simple formula of multiplying your “estimated” payrolls by the applicable rate and then dividing by $100 and there you have your manual premium for each class code for your business. Why did I highlight “estimate” you might ask. Well, simply put, at the beginning of each policy year the insurance carrier is going to ask you to give a ballpark estimate for payrolls for the upcoming year. At the end of your policy period you will be audited and you’ll know

Page 23

how accurate you ball-parked because you might find yourself on the receiving end of a return premium or on the other hand you might find yourself shell-shocked that you owe an additional $5,000 in premiums.

Tip: Midway through your policy year, re-visit your estimated payrolls and make adjustments if necessary, mid-term. Most insurance carriers will let you make adjustments with hopes of spreading any decrease or increase over your last remaining monthly payment installments.

Did you know that a new or newer business owner can have a very difficult time procuring workers’ compensation because they don’t have any prior experience? Most insurance carriers want to develop a comfort level with a new prospective client by seeing perhaps one, two or three years of previous experience prior to offering an insurance quote. Did you know that your experience rating is another factor used as a multiplier against your manual premiums that can have a positive or negative impact on your overall premiums is your actual claims experience?

A new employer begins accruing experience on their first day. Usually after three full years of business an employer is ultimately given an experience rating via the National Council of Compensation Insurance, commonly known as NCCI which operated in 38 of the 50 States, or by individual States that do not operate under NCCI guidelines such as California, Michigan, Wisconsin to name a few. An experience rating in a nutshell is a comparison of an employer’s payrolls and actual losses vs. others in similar industries. If you have a 1.00 experience rating, you would be considered a C+ student.

Fact: One of the core concepts behind the experience rating is to reward employers that prevent claims from happening and are willing to bring their injured workers back to modified duty by being given a credit rating under 1.00. On the other hand, an employer would be punished for frequency and severity of claims by receiving a debit rating over 1.00.

Tip #1: Did you know that in most States, medicalonly claims are discounted by 70 per cent in regards to how they impact your experience rating?

Tip #2: Know your State waiting period for temporary total disability benefits for your injured workers. This benefit provides funds to your injured worker for lost wages as a result of a work-related injury and there is usually a three day or seven day waiting period before the worker is entitled to these benefits. This is meant to discourage fraud and also encourage return to work programs.

If your worker is going to be off work for a period less than your State’s waiting period, report that claim as a medical-only claim because remember, medical-only claims are discounted by 70 per cent.

To exclude or not to exclude, that is the

question. Depending on your form of ownership and the State that you work in, you might have the choice to exclude your payroll from your workers’ compensation policy. The advantage to this is you will likely save in premiums but beware because often the owner of a business is classified as clerical or sales with both classifications warranting very minimal rates per $100 of payroll. And in most instances the owner’s salary is capped, meaning the overall impact on your premiums might only be a few hundred dollars.

Theory Tested: Joe Smith is the owner of a retail franchise and needs to restock the paper supply in the copy machine. During the course of lifting the heavy box of paper, Joe feels a pop in his back and suddenly he finds himself at the local emergency room recalling the event that led him there to the nurse. The medical bills are now sent to Joe’s health insurance carrier who quickly denies coverage as the emergency room

Franchising USA

ex per t advice

Dennis Powers, AIC, ARM, SCLA, CPCU, Lamb, Little & Co.

free online resources such as safety videos and other online training.

As a business owner you need to decide if you are a gambler that is willing to roll the dice and let fate determine what will happen to your premiums. Or can you take charge and put yourself in a position to control the outcome of you insurance premiums?

Dennis J. Powers, AIC, ARM, SCLA, CPCU

“The days of writing a check for your insurance premiums and rolling the dice on what will happen next are over.” intake form clearly indicates that Joe was injured at work. If Joe has excluded himself from his workers’ compensation policy, then he could find himself between a rock and hard place by not having anyone to pay his medical bills.

The insurance marketplace is a cyclical one, bouncing back and forth from a hard market to a soft market, sometimes seemingly overnight. When the insurance marketplace hardens, insurance carriers find themselves looking to right the ship financially by being more selective with the risks that they will insure, which is also reflective in the pricing they are willing to give to employers. In a soft market you will find underwriters of insurance carriers that are willing to take more chances by insuring employers that they normally wouldn’t, while also offering quite competitive rates or sometimes additional scheduled credits which can chip away at the manual premium.

Fact: Insurance carriers annually change

Franchising USA

their rates either by using the NCCI rate or their State’s equivalent rate. Insurance carriers also have the options of filing their own rates which might be deviated upwards or downward from the manual rates.

The days of writing a check for your insurance premiums and rolling the dice on what will happen next are over. Insurance carriers prefer to work with proactive employers that will do everything in their power to protect their workers and develop policies and procedures that can help reduce the probability and severity of potential injuries or accidents. This can be accomplished by creating a safety manual or developing a safety committee that meets monthly and incorporates ideas or suggestions from your employees. Partner up with your local occupational health clinic and take a tour of their facility and invite them to come and see your day to day activities. Take advantage of any free resources that you might have with your workers’ compensation carrier, as most offer

For over 17 years Mr. Powers has been in the insurance industry beginning his career as a private investigator specializing in investigating fraudulent insurance claims against employers.

He then spent over ten years prior to becoming an insurance agent working as a multi-line claims adjuster with a primary focus on workers compensation claims.

Currently he is an insurance agent working with small to middle market businesses and is a graduate of Western Illinois with a degree in Criminal Justice.

In addition, he has attained his Associate in Risk Management (ARM), Associate in Claims (AIC) and is a Senior Claims Law Associate (SCLA) and has just completed the requirements for the Chartered Property Casualty Underwriter (CPCU) program.

Dennis has specialized in the design, marketing and implementation of a client oriented insurance program and also provides an expertise in applying the appropriate resources to help his clients contain cost by managing their exposure to risk. His clients include manufacturers, social service agencies, distributors, contractors, and other companies.

Mr. Powers has been with Lamb, Little & Co. since March 2009.

He lives with his wife and one child in Mount Prospect, IL. Contact Dennis J. Powers at: Phone: (847) 230-3294 Email: dpowers@lamblittle.com

Page 25

www.heavensbest.com

Start Living Your Dreams Today!

Military and Minority Friendly Franchise

(800) 359-2095 (800) 568-3605 Call Today and see why our Franchisees are so Happy.

www.heavensbest.com

Franchising USA

ex per t advice

Richard Ashe, President, Veteran Franchise Centers, Director, RecruitMilitary Franchise Programs

Why Veterans

make g ood franchisees

What characteristics do franchises share with military units?

One essential characteristic of a franchise is a set of standard operating procedures (SOP’s) that enable the franchisee to produce a product or deliver a service of uniform, consistently high quality. Great examples include procedures developed by Ray Kroc at McDonalds and Ray DeLuca at Subway.

Veterans and other men and women with military backgrounds make good franchisees because franchises have many of the same characteristics as military units and veterans possess personal traits that are needed to operate a franchise successfully.

In addition, veterans generally have the

necessary financial resources and/or access to special lending programs.

Franchising USA

Another essential characteristic is a business methodology that can get a franchise launched in a short period of time; supports the franchisee with built-in networks that can include suppliers, advisors, and other franchisees; and provides pre-established guidelines for the back-office procedures – usually the most challenging part of starting a business for most people. To make a franchise system flourish, a good franchisor painstakingly researches and tests all elements of its methodology and documents them in an “Operating Manual.”

All this will seem familiar to veterans The military is much like a franchise in that every aspect of a service member’s training – how to walk, talk, dress, and acquire the skills of his or her military occupational specialty (MOS) – is delivered in an “Operating Manual.” The military trains service members from the beginning

to solve problems by following SOP’s, and reinforces that training throughout their careers. So veterans have that ability – which is perhaps one of the most critically important for success in franchising. A franchise SOP, by its very nature, will feel familiar to veteran franchisees – so they are likely to follow it closely, thereby mitigating some of the risks of investing in franchising.

What are those valuable character traits? A good franchise “Operating Manual” cannot guarantee that the business will not have its hiccups. That is where character traits either developed or reinforced in the military come into play. Those include an ability to “improvise, adapt, and overcome” – an unofficial mantra of the Marine Corps – and not let setbacks deflect their focus on the mission.

Another such trait is the ability to be both a leader and a team member. To succeed in franchising, the owner must lead his or her business and the franchise employees, and should also assume a leadership role in community organizations.

When it comes to leadership, the military gives every young man and woman opportunities to take on tremendous responsibilities – whether planning a mission, leading an infantry team into a fire fight, managing a team to ensure the flight readiness of a multimillion dollar aircraft, or planning logistics to move a battalion from one place to another. These assignments hone both management capabilities and

Page 27

teamwork that are transferable to any other endeavor in or out of the military.

In the military, teamwork begins on day one. Veterans learn very quickly the ramifications of their actions on the others in their team. Here’s an example from my experience in boot camp – many moons ago, I can assure you: It was a muggy, late October day at United States Marine Corps Recruit Depot Parris Island, South Carolina. My company was standing its first inspection on the parade ground. We were the last platoon in the company to be inspected, so we must have been standing there for at least a couple of hours.

The sand fleas were out in force that day and all of a sudden, just as the company commander was walking our way, I heard a loud slap. One of the guys had slapped and killed a flea that had landed on his neck. Everyone heard the sound. It seemed

to echo across the parade ground. The company commander and a drill instructor did a beeline for the guy who had murdered one of their sand fleas. The entire platoon spent the rest of the day digging a six by six grave with one Marine Corps issue 24-inch Tri-Fold Shovel. Lesson learned: If one team member messes up, all will suffer the pain and consequences. In a combat situation, as you can imagine, a loud slap could give away the position of the whole company.

Veterans are also well educated According to Who is Volunteering for Today’s Military, a white paper published by the United States Department of Defense in 2005, “each year, about 180,000 young Americans enlist for active duty in the Armed Forces. Over 90 per cent have a high school diploma, compared to 70 per cent of their civilian peers; and 66 per cent are drawn from the top half of America in math

and verbal aptitudes, a strong determinant of training success and job performance.” And success in franchise ownership, I might add.

The challenge of financial resources Without question, veterans make great franchisees. But one of the challenges for veterans just coming out of the service can be a shortage of money to invest – or an apparent shortage of money: Many veterans do not know that they can use their Thrift Savings Plan (TSP) or 401k penalty-free for operating capital in a business start-up.

The government provides some loan support. On June 13, 2007, the U.S. Small Business Administration (SBA) announced the Patriot Express Loan Program. This program is available to veterans, servicedisabled veterans, active-duty service members participating in the military’s Transition Assistance Program (TAP),

Franchising USA

ex per t advice

Richard Ashe, President, Veteran Franchise Centers, Director, RecruitMilitary Franchise Programs

reservists and National Guard members, current spouses of any of the above, and the widowed spouses of service members who died during service or of veterans who died of a service-connected disability.

Patriot Express Loans are available from the SBA’s nationwide network of lenders, and the loan approvals are faster than for any other kind of SBA loan. Loans are available in amounts up to $500,000. The borrower can use the loan for most business purposes, including start-up, expansion, equipment purchases, working capital, inventory, and purchases of business-occupied real estate.

Patriot Express Loans feature SBA’s lowest interest rates for business loans, generally 2.25 per cent to 4.75 per cent over prime, depending upon the size and maturity of the loan.

More needs to be done Over the next five years, the military will reduce its force by approximately one million personnel. In my view, the government should do more for these brave men and women who have voluntarily put themselves in harm’s way for the rest of us.

For example, in June 2009, United States Representative Aaron Schock of Illinois introduced the Help Veterans Own Franchises Act – H.R. 2672 (111th Congress). The bill would have allowed credits for the establishment of franchises with veterans. H.R. 2672 received plenty of bipartisan co-sponsorship, but never made it out of the House Committee on Ways and Means.

In September 2011, the bill was reintroduced in the 112th Congress as H.R. 2888, and again referred to Ways and Means. In November 2011, the bill was also rolled into H.R. 3476, the American Growth, Recovery, Empowerment and Entrepreneurship (AGREE) Act. That bill, along with H.R. 2888, still languishes in committee.

The private sector also supports veteran franchising The most popular program is VetFran, a strategic initiative of the International

Franchising USA

Franchise Association (IFA). VetFran was originally conceived by the late Don Dwyer, Sr., founder of The Dwyer Group, as a way to say “thank you” to veterans returning from the first Gulf War (1990-1991). IFA re-launched VetFran after the September 11, 2001, terrorist attack. Today, the program helps returning service members access franchise opportunities through training, financial assistance, and industry support.

Many industries, many opportunities VetFran is a great starting point for those veterans who know that franchising is an option for them. The much larger number of veterans who are not at that point can benefit from franchise counseling and a professional evaluation of their situations. Questions to be answered: Is franchising in general right for me? If so, what specific kind of franchise is most suitable for me? Can I afford to invest in that kind of franchise? What are my investment options?

Many veterans that I speak with think franchising is all fast food. They are unaware that franchise opportunities extend across 75 industries – everything from security to printing, painting, financial services, healthcare, early childhood education, and more and more. My desire to help veterans explore the world of franchising is why I was a founding franchisee at RecruitMilitary Veteran Franchise Centers (VFC).

RecruitMilitary has been helping veterans and their families transition from the military to civilian life for over 14 years, connecting those men and women with employers, educational institutions, and franchisors. In 2010, they set up VFC to focus on franchising. VFC provides free financial assessment, education, and skills assessment for veterans and their families, and matches them with franchise opportunities that match their goals. We coach veterans throughout the franchise search and acquisition process and connect them with financing, legal, accounting, and business-planning resources near

them. Those resources include the Small Business Development Centers (SBDC’s) – partnerships primarily between the federal government and colleges and universities, administered by the SBA.

An excellent example An excellent example of how VFC helps veterans achieve success in selecting a franchise is the story of Terry and Debbie Campbell. The Campbells came to VFC in April 2011. Terry was a career Army armor officer who retired as a lieutenant colonel after 20 years of service. During his career, he commanded a tank company and cavalry troop; served on the military science staff at Louisiana State University; served as the U.S. Exchange officer to the Australian Armour Centre; fought in Desert Storm as a tank battalion executive officer; and finally served as a Staff Group leader at the Combined Arms and Services Staff School (CAS3) at Fort Leavenworth, Kansas.

Debbie was a realtor.

After leaving the service, Terry tried his hand at insurance sales. But he became disenchanted with the company and left after six months to take a job as the human resource manager for a small, family-owned lumber and hardwood flooring company.

His prior experience with insurance sales helped him enormously with the benefits side of HR, and his military experience provided him with the skills necessary to handle safety, training, organizational development and employee relations.

Eight years after he started work with the lumber company, the owners sold the company. Under the new ownership, the company began to grow rapidly. In one acquisition, the company doubled in size and expanded its geographical footprint from one state to four. While it was an exciting time, Terry eventually decided it was in his best interest to gain more control over his future. After five years with the new company, he left to start his own business.

Terry and Debbie bought a Liquid Capital franchise in November of 2011. Clients are critical to their success, so their clients

Page 29

“The military is much like a franchise in that every aspect of a service member’s training – how to walk, talk, dress, and acquire the skills of his or her military occupational specialty (MOS) – is delivered in an “Operating Manual.” take priority, but at this juncture most of their time is spent networking to find the clients they need to succeed. In a recent follow-up with the couple, I asked why they thought veterans make good franchisees and why they choose the particular franchise. Terry said, “Veterans bring a level of determination and will to succeed that is more prevalent than in the general population. I don’t know if such folks are drawn to the military to begin with or if the training we get develops the confidence to adapt and overcome. But either way, my experience in both the military and civilian worlds leads me to believe this is one characteristic that more veterans have than their civilian counterparts. The founders of the franchise and the other franchisees have similar values to those that veterans acquire through their service. I don’t know how many, if any, are veterans, but the level of integrity and camaraderie is far beyond what I have experienced anywhere else outside of the military community”

best for us. They never pushed and always learned from each encounter we had with a franchise as to what it was that would excite us in a franchise relationship. He refined his search based on what he learned, and each succeeding franchise came closer to meeting what we were looking for.”

My final question to the couple was what advice they had for veterans thinking about franchising. Terry responded with, “One of the advantages a franchisee has is that he is encouraged to talk with as many current and former franchisees as possible and check out the claims in the franchise disclosure document (a good franchise broker such as Veteran Franchise Centers can help here). It is called due diligence.

You owe it to yourself to learn as much about the franchise, both good and bad.

Calling current and former franchisees is a good way to learn as much as possible.

It is also critical to find good professional advisers such as attorneys or accountants and engage with them early on in your search. They can help you establish the true cost of getting started and help ask the right kinds of questions. You also need to know the market in which you are planning on serving. Make sure you set yourself up for success by ensuring your market will support the type of franchise you are looking to open.”

I also asked them to share with me a recent success. “Most recently, we helped a young entrepreneur meet financial obligations and pay off debt by providing steady reliable cash flow for his accounts receivable,” said Debbie. “Because of his billing cycle, he often had to meet two payrolls before being paid for his services. Our purchase of his accounts receivable enables him to not only meet payroll but also afforded him the opportunity to pay down debt.”

More about VFC and Recruit Military

I then asked how VFC had helped them, and Terry said, “VFC listened, learned what makes us tick, and what would be a good fit for us. They found several good franchises whose cultures fit us, then gave us the room to figure out what would work

Veteran Franchise Centers provides free guidance to veterans and military families entering into franchise opportunities available through the International Franchise Association VetFran initiative and other channels.

Veteran Franchise Centers was founded in 2010, and is an affiliate company of RecruitMilitary, LLC, which is headquartered in Loveland, Ohio.

RecruitMilitary connects men and women who have military backgrounds with employers, franchisors, and educational institutions. RecruitMilitary has produced hundreds of veteran job fairs throughout the United States, and has more than 500,000 veterans on the RecruitMilitary Job Board.

Drew Myers, a former captain in the Marine Corps, founded the company in 1998.

Richard Ashe served in the Marine Corps from 1976 to 1983 in the infantry and then as part of a joint Marine, Navy, and Air Force top secret intelligence project. After serving in the Marines, he worked as an electronics technician for a communications company. Over the next 30 years, he worked his way through the civilian ranks to the position of vice president of global marketing for an international software company and received his degree in marketing.

During his civilian career, Ashe has worked for and helped companies such as Xerox, Compaq, and HewlettPackard expand or start new businesses.

He also participated in four software startups and started two businesses on his own – a computer training firm, ComputerTutor, and a network consulting firm, LANDesign. As he is a Certified Franchise Consultant and a member of the Texas Veterans Chamber of Commerce. He serves on the VetFran committee.

Richard Ashe President, Veteran Franchise Centers Email: rich@VeteranFranchiseCenters

com Director, RecruitMilitary Franchise Programs Email: rich@recruitmilitary.com Phone: (office) 713 849 9642

(mobile) 832 816 7424 VFC - Growing America with America’s Best

Franchising USA

ex per t advice

Rick Anderson, General Manager, Franchising for Franchise Finance

Short History of Franchise Lending S ince 1 9 8 8

“Credit lines can be used for anything business related. Some people have used them to purchase equipment, pay rent, payroll, leasehold improvements, and even working capital.”

I started financing franchisees in 1988, and it sure has changed a lot since that time.

Back then we were doing a lot of conventional lending. Prospective franchisees would apply for a standard loan with a bank. There was no government involvement at that time. Rates were about 11-12 per cent, and we could finance all but the working capital. We could usually do a five year loan fixed rate, but no collateral required. It worked great.

Then in late 90’s, securitization kicked in.

Banks sold off pools of combined loans

Franchising USA

as a bond for a one time fee. The lenders did not even have to keep the loans they made, which made it even easier for them to continue lending more. The tech crash in the late 90’s cut all that off. Things got tight for conventional lending. We had to switch to SBA to survive. Small Business Administration Loans are approved by a bank, usually with collateral, but the major difference between conventional lending and SBA loans is that the SBA loans are backed by a 75 per cent government guarantee if the loan cannot be re-paid.

of the housing market and stock market.

This caused houses to go down in value, which was most of the collateral for SBA loans. Also the rule for collateral before the crash was take what you have, any amount would do; 95 per cent loans and easy credit standards. After the crash most lenders just stopped lending all together which was bad for business.

SBA got a great boost, believe it or not, when 9/11 happened. If you remember, the Federal Reserve lowered rates a whole one per cent, almost overnight, and rates got to about four per cent for SBA, the lowest in 44 years. Business was fantastic from 2001 until 2004.

That’s why we went to the Credit line program about a year ago. This program is not SBA nor conventional, making it easier with no collateral.

In 2004 the Fed started raising rates again and a lot of franchisees slowed down on starting a new business, but business was still ok. Of course we all know what happened in 2008-2009 with the crash

In the last two years start- up SBA loans are still very hard to get, and standards are 70 per cent loans or even 100 per cent collateral with perfect credit.

More and more people are turning to programs such as Franchise Finance’s Multi-Credit line program. This program uses multiple lines of business credit to help franchisees meet their funding needs.

Unlike the SBA loans, this program is unsecured, no collateral required, and no experience is needed.

Page 31

it, or they can use it down the road if they decide to expand, open a new location, or buy new equipment. These lines can be used for anything business related.

Some people have used them to purchase equipment, pay rent, payroll, leasehold improvements, and even working capital.

A Multi-Credit Line program can help people with funding from $50,000 up to $175,000. These are all revolving accounts so there is no loan term, people can pay them off whenever they like with no prepayment penalty.

The credit requirements for this program are: Must have good credit score of 700+, no open collection accounts, open judgments, or liens, and no bankruptcies in the last ten years. Successful applicants must also have at least one open revolving credit account which they have managed for three - five years, and low credit inquiries in the last six months.

Possibly the best advantage of this program, is the time it takes to complete the funding process. Conventional loans sometimes take three - six months before funding; SBA can sometimes take up to two years. With the Multi-Credit line program, from start to finish is usually four - six weeks.

Rick Anderson is General Manager of Franchising for Franchise Finance in Little Rock, Arkansas. Rick has been financing franchises for over 24 years and has loaned millions of dollars to franchisors as well as franchisees starting new or additional locations. He also has been a franchisee of Comet Cleaners for 12 years, owning three locations.

This program has been very successful for people needing funding up to $175,000.

Also unlike conventional loans, or SBA

loans, net worth is not as big an issue with this program. In the past, to qualify for a

conventional loan, the banks liked to see a

net worth around the same value as the loan amount. The Multi-Credit line program

goes completely off personal credit history, not net worth. In one instance, a man with

good credit had a net worth of $80,000. The banks would not approve him for a loan.

He went through this program and received $100,000 in lines of credit.

Another advantage to this program is that the money is used as needed. If a person receives $100,000 in credit lines, and only uses $50,000, that person only makes payments on what they are using. The rest can sit in their back pocket until they need

Mr. Anderson is a past member of the Board of Directors and past member of the Executive Committee of the IFA. He was Chairman of the Supplier Forum of the IFA in 2000. He holds a BA and MA from the University of Arkansas and has written a college workbook on how to pick a franchise, used at two Universities.

For more info contact Rick Anderson at: Phone: 501.228.4047 ext 101 Email: rick@franchise-finance.com

Franchising USA

f ra nchisor in depth

Food Tr uck Fra nchise G roup – G ou r met S treets

T he U nited N ations of

Food Trucks There may be nothing better than walking down the street in search of your next meal and catching the scent of something delectable wafting from a nearby food truck. And it’s true what they say about food tasting better when you eat it outdoors.

Americans have fallen in love with the food truck. Food trucks have seen a huge rise in popularity over the past two to three years in the US, with their ability to serve up freshly cooked, delicious foods from many different traditions and culinary arts at an economical price point.

“Many food trucks now come equipped with restaurant grade kitchens, and are capable of serving dishes once only found in the highest quality, most expensive restaurants.”

Food trucks are not a new concept in America. They’ve been around for over 150 years, beginning as the chuck wagons of the wild west. Having thrown off the “roach coach” reputation, many food trucks now come equipped with restaurant grade kitchens, and are capable of serving dishes once only found in the highest quality, most expensive restaurants. Food trucks have, in fact, become the preferred choice of dining out for many people. And they can do all that from just about anywhere! Food Truck Franchise Group is here to take us along for the ride.

number of different cuisines: Gusto’s Food Truck Italian Cuisine, Chillipeppers Latin Asian Cuisine, Mambi’s Dessert Franchise, American Fare, Eastside Deli, Sizzle Stix N’ Burger, and last but not least, Latin Burger & Taco. They truly are the United Nations of food truck franchising. Each of these mouth watering brands offers a full meal, including beverage, for less than $10. In today’s economy, providing that kind of value for customers is critical.

Food Truck Franchise Group LLC – ‘FTFUS’ is a master franchisor of gourmet food truck and restaurant businesses throughout the United States. They operate the Gourmet Streets collection of food truck franchises, which in turn encompasses a

CEO Robert Mytelka describes Food Truck Franchise Group as “the beginning of a franchise organization that will put gourmet food trucks on the streets of college campuses, military bases, and corporate campuses throughout America.” Their

Franchising USA

recipe for success includes providing each franchisee with everything they need to run a profitable food truck, including training, menus, ingredients, locations, marketing, an exclusive mobile app, and the truck itself, equipped with a fully functional commercial kitchen.

The start-up costs for a food truck franchise may be less than you’d expect. The Food Truck Franchise Group franchise fee is $25,000. Their specially designed food trucks come at a price of $60,000 - $70,000, with the total cost for a start-up in the range of $99,000 to $150,000. Food Truck Franchise Group is registered with the Small Business Administration to assist with financing, and is proud to offer a VetFran

Page 33

discount. All of these factors make starting a Gourmet Streets food truck franchise an economical choice when compared with opening a restaurant housed within four walls and a roof.

While other companies assist their customers in getting set up with a truck, Food Truck Franchise group sees this as only the first step in the process. They stand beside their franchisees every step of the way, providing ongoing assistance and training. Some of this training comes in the form of online modules designed for both the franchisee, and their employees, covering a wide range of topics including: administration, customer service, book keeping, inventory control, hiring and training, truck maintenance, and food safety.

Food Truck Franchise Group wants each of their franchisees to be successful, and they will do what they can to help in that process.

Chef Darren Bulley pours his heart and soul into creating recipes that will be successful for Food Truck Franchise Group across a variety of cuisines in the Gourmet Streets brands. He sees his work with Gourmet Streets as an “opportunity to really explore and get inventive and creative and use all the knowledge that I have of what’s going on in the industry to apply to a new concept that’s completely different from anything I’ve seen before.” That process has involved working with chefs to create unique cuisines that will translate well into service from a food truck. The end result of their research is a set of “written, documented, proven, tested recipes.” The secret to the success of the Gourmet Streets brands is, according to Bulley, in “offering people value, and food that is very good, that can be consistent from one truck to the next.” Franchisees need to ensure that both they and their staff are trained and equipped to follow the developed recipes. But Bulley insists that you don’t need to be a chef in order to do so. The recipes have been written and tested by professionals, and the directions painstakingly fine-tuned for clarity and ease.

Gourmet Streets offers a wide variety of different cuisines to choose from. Food Truck Franchise Group currently has four master franchisees, with new franchisees getting set up every month. They are the only multi-cuisine franchisor in the

market, which makes them quite unique.

Franchisees can choose to invest in a

number of different trucks, each providing a separate cuisine. In the right location, those trucks can be grouped together to

create a food truck food court. Customers

know where to go to find just about any type of food they may be craving. Think about

the neighbourhood where you live or work.

There might just be an ideal location for

you to start your own Gourmet Streets food truck with Food Truck Franchise Group.

Gourmet Streets Brands, in their own hunger-inducing words:

Gusto’s™ Food Truck Italian Cuisine Admit it. When you think of Italian food, your brain is hardwired towards pizza or pasta with sauce from a jar, or for the more adventurous among you, canoli. Well, get your mind out of The Sopranos, Mr. Ragu.

With Gusto’s, Italian has gone gourmet in a food truck franchise with lots of dishes ending in A, E, I, and O, but never Y. We are the real deal, inspired by the traditions of Sicily, Florence, Venice, Genoa, and Sophia Loren. Oh, you will find pasta here, but make no mistake about its pedigree.

Made with love and and basil, each dish

Franchising USA

f ra nchisor in depth

Food Tr uck Fra nchise G roup – G ou r met S treets is a masterpiece of Italian seasonings and flavors, served in a pizza cone for easy eats.

Now, that’s amore.

Chillipeppers™ Latin Asian Cuisine Here, in this food truck franchise cuisine called Chillipeppers, ginger and wasabi meet chipotle and pico de gallo in a battle so fierce, the only winner can be you and your taste buds. Marvel at the melding of Latin and Asian flavors, delight as the tangy fire of one dish hits your mouth, while another tingles the tongue with delectable sweetness.

This is not simply food! It is a culinary experience bursting with the hot, spicy, sweet and sublime flavors of two continents and cultural traditions, fit for a gourmet of the most discerning tastes. Reactions are unpredictable. You may laugh, cry, dance and wail and punch out your neighbor all in the span of a single meal. Not to worry. We have restraining orders on hand. Yes, you can!

Mambi’s™ If you love Willy Wonka or walking through a bakery; if you have a sweet tooth or named your firstborn child Candy or Chocolate or even thought to, Mambi’s Food Truck Franchise Cuisine already has your heart.

Don’t let your spouse or significant other be alarmed. You may cheat on them with Mambi’s, it is an indiscretion defended by passion and refined sugar. Desserts such as these have brought men and women far greater than you to their knees. It is only by the grace of God and Oprah that you are able to stand at all after a Mambi’s dessert. And why would you want to? So go on then, lie down, absorb the full Mambi’s experience in your belly. There’s always room for dessert.

American Fare™ What could be more American than baseball and apple pie, except our American Fare food truck franchise? Combing all 50 states, we braved cowboys, flash mobs, Hollywood starlets, and New Yorkers, in order to bring you the finest gourmet cuisine from across the country. We went with food that is representative of particular regions or states, giving you the culinary equivalent of a cross-country road trip. You’re on your own with the tunes, beer, snacks, and

Franchising USA

obnoxious sidekicks who stick their feet out the window as you drive. We just make delicious cuisine bar none. Oh, and one more thing – suck it, apple pie! You did not make the cut, despite your lobbying and blatant bribery. I rest my case. Baseball, you can stay.

Eastside Deli™ Is it any wonder that the root of delicious is deli? Now, imagine that! Think lean cuts of meat, then think again. Anyone can cut fat. Meat though, some talented few can cut with the knowledge, precision and dexterity to actually develop texture and flavor within the meat itself. For each meat there is a texture and for each texture a thinness that suits it perfectly with the exact surface area ratio. Beyond that, it is the rare deli men, such as we, who know the secret to a supreme deli sandwich. Obviously, we won’t tell you. But, then again, it is unfair to conceal the fabulousness of our food.

Certainly, the cut of the meat is vital, but the secret to a truly supreme deli sandwich, which separates it from the very good and the service-ably great, are the glory of the accompaniments and toppings. Say goodbye to brown mustard and hamburger relish.

You are on Gourmet Streets Food Truck Franchise now. Raise the bar.

Sizzle Stix N’Burger It’s time to introduce the world to food truck franchise Wickani PRN: (Week au Nee) This word was coined when our executive chef Daren Bulley finally had to define the feeling when foods taste so amazing and wonderful that your knees go weak, and sometimes, people are known to skip a breath. With all this great food hitting the streets, the more this phenomena occurs. So often, that he just had to name it, Wickani.

There IS a world outside the box, ladies and gentleman, and that is the world of the

boxy food truck. Gourmet Streets has done it again, hitting a home run without a bat!

The simple stick has risen to the challenge of being the next big thing on our grill. The tastiest of foods from the most innovative minds in eateries today-skewered, and direct to your belly. Sticks and stones can break bones but would a rose by any other name smell as sweet? Experience food truck franchise Wickani.

Latin Burger & Taco™ It’s time to introduce the world to food truck comfort food with a Latin American flare.

Love Burgers- Well we’ve “Got Burgers”, the very best burger on the block, beach, festival, campus, or where ever else you will park your Latin Burger & Taco gourmet food truck. What do you think happens when combining Latin, Texan, Sun, and Kool- it’s our famous ‘Latin Macho’, a burger made of chorizo, chuck and sirloin, topped with Oaxaca cheese, caramelized onion, jalapenos, and a sauce so good it’s named “avocadolicious sauce.” Latin Burger & Taco hit the streets of Miami in early December 2009, and ever since it’s “Bienvenidos a Miami,” gourmet street food, like never before! To put it simply: Latin Burger is serving you ‘Comfort food w/ a Latin American flare’, and people are eating it up. Ask owner/operator Jim ‘Mr. Texas’ Heins. Granny doesn’t ask where the beef is on his truck.

Pursue your passion.

Page 35

Bring a

FOOD TRUCK to your area.

Your customers will love it!

Gourmet Streets™* provides a full service turn-key system and franchises throughout the United States

Contact Robert Mytelka: 000%10+%0+0+ JgZ]jl8^l^mk&[ge

ooo&_gmje]lklj]]lk&[ge *Gourmet Streets™ is the only national gourmet food truck franchisor and turn-key system provider. Gourmet Streets™ is a registered trademark of Food Truck Franchise Group LLC

Franchising USA

ex per t advice

Alex Porter, President, Location3 Media

FIVE STEPS

for F ranchise D i g ital M arketin g S uccess

“A key piece to any franchise search marketing is communication between corporate and franchise owners.” structures for how corporate funds (or doesn’t fund) individual store marketing budgets. Whatever the size or structure of a franchise, the ultimate objective is to reach the targets set by corporate while making each individual franchise owner pleased with the results.

The Local Space

Franchises are like snowflakes: while each one is different, they are all made of the same elements and by sticking together they can have a powerful impact.

Successful franchise operations recognize their unique position and develop strategies that move the franchise forward as a whole while providing support for individual locations.

Franchise search marketing solutions are also unique from strategies developed for a single organization: goals have to be met for both corporate and hundreds to thousands of franchise owners. Within a franchise framework there are also many different

Franchising USA

Search marketing for franchises falls into the category of “local paid search,” which is a rapidly growing segment of digital marketing. Paid search is a model of internet advertising used to direct traffic to websites via pay per click advertisements.

With search engines, advertisers typically bid on keyword phrases relevant to their target market. Users searching for local information are a large portion of internet traffic. Google has indicated that 20 per cent of desktop searches and 40 per cent of mobile searches are local in nature.

This sizeable group is composed of desirable consumers looking for goods and services in their own neighborhoods. They are typically further along the purchase cycle, more likely to convert, have a lower cost per lead and higher conversion rate. According to comScore, once searchers find a local business, more than 80 per cent of them make contact offline. Forty-six per cent

contact by phone, 11 per cent do business online and 37 per cent visit in person. These numbers show why investing in local search marketing is a crucial part of any franchise marketing budget.

The Process Every solid strategy starts with a process.

Developing this process is crucial because money is lost in paid search when budgets are allocated without guidance. Having a clearly defined process helps drive consistency between corporate policy and individual location’s results. There are five steps in the franchise digital marketing process: Discover, Create, Engage, Analyze and Optimize.

Step I: Discover The process begins with Discovery. This phase includes extensive research into the brand and the market: What are the business and campaign goals? Are customers using online means to locate brick-and-mortar locations? Who is the competition?

Defining key performance indicators (KPIs) is one very important takeaway from the Discovery phase, which allows corporate to set benchmarks, judge the effectiveness of the program and share results with franchise owners.

Page 37

Step II: Create What are the best channels, messages and optimizations for this campaign? Should you partner with only major search engines or local and mobile partners? Which keywords should be targeted? The Create stage starts by answering these questions and developing an overall strategy, which provides guidance for the lifespan of the campaign.

A very helpful tool during this stage is Google Think Insights. Think Insights takes case studies created for almost any demographic and provides information about how that group is spending time online.

Creation of landing pages goes back to the KPIs: regardless of the goal for a site visitor, the path to conversion should be simple and easy. Ensure each franchise location has its own page to create a local feel and allow for customization. More advanced strategies include multivariate testing for layouts to see which combination of elements garners the best results.

Creating a targeting plan is another tactic to maximize a paid search budget. Targeting parameters can be defined for ranges surrounding store locations or areas with high customer density using a sales database or DMAs. There is an additional step in the Create phase for franchises. It’s critical to create a communications strategy at this point to define how tasks, objectives and results will effectively flow between corporate and the franchise owners.

Google Think Insights sample data The next step is looking at the analytics for your website to develop keyword lists (if the site does not have analytics, Google Analytics is a free solution). Additional tools for developing keyword lists include Google Analytics, IndexTools, Unica and Omniture.

Once the keywords are defined, ad copy creation can begin. Take the lessons learned during Discovery to appeal to customers and encourage them to click. Local search terms are very important for franchise paid search, as is utilizing the display URL and location extensions.

Step III: Engage During the Engage phase all of the research and strategy are put to the test as the campaigns go live. First, the campaign is set up on search networks. This is where geographic locations, day/time parting and devices are chosen. If the budget only allows for one platform, choose Google AdWords as Google accounts for 60 per cent of online traffic.

Other items to consider are time and day parting. If the store isn’t open 24 hours a day, the campaign should be set for ads to appear right before and during the hours of operation. Be aware of the time zone associated with the account, and set live times to account for these differences.

In terms of paid social media ads, Facebook is an excellent choice for very granular targeting. Ads can be shown to only consumers with specific likes and interests.

It is possible to target users who “Liked” the competition, are college educated, have a birthday within the week or who recently moved. Geographic areas can also be targeted by indicating the state/province, city or zip code.

Paid search ads featuring the display URL and location extensions

Foursquare and Twitter are two additional social media channels that can be utilized in a campaign with no up-front costs.

Corporate should claim all Foursquare

locations and ensure all information is updated and accurate. Additionally, corporate can run specials across all locations or specific geographic regions to reward existing or generate new customers.

Twitter is another social media channel that can be utilized effectively for franchises.

It is certainly recommended for corporate to run a Twitter feed engaging followers nationwide, but also for individual locations to create a profile and participate.

According to research by Mainstay Salire, local social followers are worth 40 times that of corporate followers due to the community connection and personalization.

Along with all of the strategies above, additional Engage tactics include site links and call extensions. Adding site links to paid search ads increases the real estate on search results pages and can include specific products or features. In some cases they can increase click through rate by up to ten per cent, according to Search Engine Watch. Call extensions on paid search ads enable click-to-call functionality, which is very important for mobile users. When a user searches for a franchise, the closest franchise phone number is pulled based on the phone’s GPS location. Google’s reporting interface shows the number of calls from each ad and even more detailed information about call traffic if Call Metrics is enabled.

Step IV: Analyze Analyzing results allows marketers to evaluate performance and gain actionable insights.

Google Analytics is a powerful suite of tools that gives insight into visitor traffic and on-site behavior. Analytics can track the site’s bounce rate, average time on site, page views and many other parameters. All individual engines have their own tracking, but an analytics package is the best way to get an overall view of a digital campaign’s performance.

Since most searchers looking for a local business are either going to call or visit a store, call measurement helps bridge the gap between online and offline marketing.

Some analytics programs also provide call recordings, which can also be used for

Franchising USA

ex per t advice

Alex Porter, President, Location3 Media

customer service training and improvement.

listing in the search engine results.

Analyzing return on investment from Facebook ads can be done on a number of parameters. Facebook reports display performance and social relevancy at both the ad and campaign level. Performance metrics include: Clicks, CTRs, Reach, Frequency, Social Reach and Actions.

Ad copy is another part of a campaign that

Once the analytics reports are compiled and actionable insights are extracted, the communications strategy designed in Discover comes into play. Updates and benchmarks should be communicated on both the overall corporate goals and individual franchise location’s performance.

Copy on other ads can be changed to be

can be optimized. With the right analytics program it is possible to determine which

ads are getting more clicks and also have the best conversion rates. An ad normalization index uses a formula to determine which

ad copy has the best performance on both. similar to these high performers. This

kind of flexibility is one of the best things about paid search advertising; copy can

be changed quickly for optimization or to

reflect new specials or seasonal promotions.

standards are met across hundreds of locations. Corporate should also focus on providing thorough education about the advertising strategy to get buy-in from franchise owners.

At the end of the day, just launching a campaign with a hefty budget and leaving it alone won’t garner the desired results.

A plan that’s executed on-strategy, and analyzed and optimized regularly based on results will perform much better.

Whether for a single small organization or a worldwide franchise, search marketing is only as effective as the strategy and processes that are put into the campaign.

Step V: Optimize The final phase takes data from the Analyze stage and closes the loop. During the Optimize phase media plans are rewritten, bids are modified, keywords are added, click paths are adjusted and lead forms are rearranged. This is not the end of the process: it’s just the catalyst for the cycle to regenerate and begin again, continually.

Campaigns without monitoring programs will never have impressive return on investment. It also takes the right mix of both technology and people to optimize a campaign. This means having both the technology to streamline tasks and the talent to read opportunities in the numbers.

Optimizing budgets and ad spend is a critical part of making a local search campaign a success. The entire budget should be spent, but at the right times and in the right places. Corporate and franchise owners must work together to establish benchmarks for minimum ad spend and recommended total ad spends. Individual franchises usually have restricted budgets, so it is important to make sure the dollars are being spent optimally.

It is also recommended to optimize the local map listing for each franchise location.

Local listings are the business profiles that appear in Google’s map search results, now called Google+ Local pages. Localizing the page with enriched content such as pictures, videos, social media links and special offers is appealing to both potential customers and search engines. Using the keywords identified earlier in the process also boosts a

Franchising USA

Ad normalization index tracking Search funnels are an emerging way to take a step deeper into analyzing and optimizing campaigns. Instead of only looking at the last click before conversion, attribution follows a consumer through their online journey, recording key touch points to give a more accurate and high-level picture of a customer’s path and allows for more precise campaign optimization.

A local search marketing campaign can’t

In Sum

Through strategic design, search

A key piece to any franchise search marketing is communication between corporate and franchise owners. Franchise owners are in the trenches: they understand their consumer and know how to appeal to them. They pick up on local trends quickly, which can help boost a campaign. The other part of this relationship is assistance from the corporate office to ensure brand

marketing expertise and the application of

captain itself; someone needs to be steering the ship.

About the Author Alex Porter is president of Location3 Media (www.location3.com), a digital marketing partner built to increase brands’ findability and performance.

analytics, Location3 helps to raise brand awareness and generate response across all digital platforms.

For more information on digital marketing and for more franchise marketing tips, visit http://www.location3. com/franchise-marketing-tips/.

When potential

franchisees look for new possibilities, you’ll want them to ¿QG \RX KHUH

s , ARGEST #ARRY /UT 0IZZA #HAIN IN THE 7ORLD s 3UPPORT FROM A #OMPANY WITH YEARS OF &RANCHISING %XPERIENCE s !CCESS TO OUR 0REFERRED ,ENDERS s .ATIONAL 2ECOGNIZED "RAND s )NNOVATIVE AND %FlCIENT /PERATING 3YSTEM

s /UR 'REAT 4ASTE /UTSTANDING 6ALUE 1UICK 3ERVICE $RIVES #USTOMERS

Contact Jenn Dean, your Sales Executive, for global solutions on your multi-media advertising approach. jenndean@shaw.ca, 250-590-7116 CGB Publishing has almost 30 years of experience in providing high quality business information, with a particularly strong focus on franchising. CGB has been a leading publisher of business publications and leisure magazines throughout Australia and New Zealand, the United Kingdom and Canada. Successful publications include Business Franchise Australia & New Zealand, UK Business Franchise, Canadian Business Franchise, Travel Canada, and Spa & Pool.

www.franchisingusamagazine.com 36758_pd_3.5433x10.6299_FranDev.indd 1

ÂĽ ,#% )NC ?PD

9/19/12 4:38 PM

FirstLight HomeCare

A Whole

NEWand Truly

EXCEPTIONAL APPROACH to Non-Medical In-Home Care

&AMILIES ALL OVER !MERICA ARE FACING THE SAME CHALLENGES OF CARING FOR THEIR LOVED ONES WHILE HELPING THEM THRIVE INDEPENDENTLY IN THE FAMILIARITY COMFORT AND SAFETY OF THEIR OWN HOMES -ORE THAN A NATIONAL NETWORK OF IN HOME CARE FRANCHISES &IRST,IGHT (OME#ARE REPRESENTS A NEW WAY OF CARING FOR PEOPLE AND GIVING THEM THE QUALITY OF LIFE THEY DESERVE ,ED BY A TEAM OF PROFESSIONALS WITH OVER YEARS OF COMBINED EXPERIENCE IN OPERATING SUCCESSFUL HEALTHCARE AND HOME CARE SERVICES ORGANIZATIONS WE TAKE OUR KNOWLEDGE AND COMMITMENT TO EXCELLENCE AND APPLY IT TO A PEOPLE ½RST PHILOSOPHY THAT FOCUSES ON CREATING REAL PERSONAL CONNECTIONS AND TAKES THE HOME CARE MODEL TO NEW HEIGHTS

!N )NDUSTRY 4AKING 3HAPE )N MORE THAN PEOPLE TURNED EVERY DAY "Y THE SENIOR POPULATION WILL GROW TO NEARLY MILLION The demand FOR SERVICES IN THE SENIOR CARE INDUSTRY CONTINUES TO INCREASE EVERY YEAR FUELED BY A COMBINATION OF FACTORS „ 4HE BABY BOOMER BUBBLE BEGAN TOUCHING RETIREMENT AGE AT IN „ -EDICAL TECHNOLOGIES ARE ENABLING SENIORS TO LIVE LONGER MORE ACTIVE LIVES „ $UAL INCOME FAMILIES ARE THE NORM TODAY

AND MORE FAMILIES ARE STRUGGLING WITH THE CARING FOR THEIR AGING PARENTS AND THEIR OWN CHILDREN „ !!20 SURVEYS REPORT MORE THAN PERCENT OF SENIORS PREFER REMAINING IN THE COMFORT OF THEIR OWN HOME TO MOVING TO A NURSING HOME OR ASSISTED LIVING CENTER 0LUS &IRST,IGHT SERVICES HELP MORE THAN JUST SENIORS 4HE SAME COMPLETE COMPANION AND PERSONAL CARE SERVICES ARE OFTEN NEEDED BY NEW MOTHERS THOSE RECOVERING FROM SURGERY

THOSE WITH DISABILITIES OR ANY ADULT NEEDING A little assistance.

Franchising USA

/UR #ULTURE OF #ARE AND THE $ESIRE TO 3ERVE

!T &IRST,IGHT (OME#ARE EVERYTHING WE DO IS BASED IN OUR #ULTURE OF #ARE PHILOSOPHY 4O ACHIEVE THIS WE LOOK FOR PEOPLE WHO ARE PASSIONATE ABOUT SERVICE AND WANT TO BUILD A HIGH POTENTIAL BUSINESS WHERE THEY CAN SERVE SENIORS THEIR FAMILIES AND THE COMMUNITIES IN WHICH THEY LIVE !RE YOU OUTGOING $O YOU ENJOY BEING AROUND PEOPLE $O YOU ENJOY HELPING OTHERS $O YOU ENJOY A FAST PACED ENVIRONMENT AND UNDERSTAND THE VALUE OF GREAT SERVICE 4HESE ARE THE QUESTIONS WE EXPECT POTENTIAL FRANCHISEES TO ASK THEMSELVES !ND WHILE SOME BUSINESS OR RELATED EXPERIENCE IS HELPFUL HEALTHCARE EXPERIENCE IS ./4 REQUIRED

! 'REAT /PPORTUNITY FOR #OUPLES OR 4EAMS

! &IRST,IGHT (OME#ARE FRANCHISE IS A GREAT OPPORTUNITY FOR COUPLES OR A TEAM OF PEOPLE 7E ½ND OUR FRANCHISE OFFERING HAS STRONG APPEAL TO MANY HUSBAND WIFE TEAMS OR OTHER FAMILY PARTNERSHIPS

ENTREPRENEURIAL MINDED WOMEN VETERANS AND EARLY RETIREES LOOKING FOR a second career.

The first step to becoming a FirstLight HomeCare franchise is letting us know that you’re interested. Visit www.FirstLightFranchise.com or call 1.877.570.0002, and let’s get started.

1. Source: The Department of Health and Human Services and the State Department

Page 41

%842!/2 $) .!29 0%/0,% %8# %04)/.!, #!2 %

Build A Business that

MAKES A DIFFERENCE „ &AST GROWING NON MEDICAL in-home care industry „ -AJOR MARKETS AVAILABLE NATIONWIDE „ $EEP INDUSTRY EXPERIENCE WITH TRACK RECORD OF SUCCESS „ 5NMATCHED TECHNOLOGY PLATFORM „ )N FIELD SUPPORT TRAINING and tools „ .EWEST FRANCHISE SYSTEM %6%2 TO BE RANKED IN 4OP FOR OWNER SATISFACTION

/UR #ULTURE OF Care Promise: !T &IRST,IGHT (OME#ARE THE GENUINE HEALTH AND WELL BEING OF others is our greatest concern. We VOW TO PROVIDE ½RST CLASS PERSONAL SERVICE FOR OUR CLIENTS SO THAT THEY MAY ENJOY WARMTH INDEPENDENCE AND RELAXED COMFORT IN THEIR OWN home or any setting.

877.570.0002

info@firstlighthomecare.com www.firstlightfranchise.com

Franchising USA

ex per t advice

John Geenen, Managing Partner, Waterfront Financial Group

are you prepared

to Retire?

Retirement used to conjure up images of lazy days spent in a rocking chair.

Today’s retirement is very different. So what does this redefined retirement mean to you?

There is no one answer. In the coming decades, “retirement” will mean something different to each of us. Regardless of your decision, you’ll need to design a financial

Franchising USA

plan suited to your specific vision of the future.

Income Is Key A good starting point might be to examine your sources of retirement income. If

you pay attention to the financial press,

you’ve probably come across at least a few commentators who speak in gloom-and-

doom terms about the future for American retirees, decrying a lack of savings and

warning of the imminent growth of the elderly population.

Page 43

require adjustments along the way. Among the factors you’ll need to consider: • Time: You can project periods of retirement, re-education, and full employment. Then concentrate on a plan to fund each of the separate periods. The number of years until you retire will influence the types of investments you include in your portfolio. If retirement is a short-term goal, investments that provide liquidity and help preserve your principal may be most suitable. On the other hand, if retirement is many years away, you may be able to include more aggressive investments in your portfolio.

• Inflation: While lower-risk fixed-income and money market investments may play an important role in your investment portfolio, if used alone they may leave you susceptible to the erosive effects of inflation. To help your portfolio keep pace with inflation, you may need to maintain some growth-oriented investments. Over the long-term, stocks have provided returns superior to other asset classes.**** But also keep in mind that stocks generally involve greater shortterm volatility.

• Taxes: Even after you retire, taxes will remain an important factor in your overall financial plan. Tax-advantaged investments, such as annuities and taxfree mutual funds, may be effective tools for meeting your retirement goals.

Calculating Your Retirement Needs

True, there is widespread concern about at least one traditional source of income for retirees -- Social Security. Under current conditions, Social Security funds could fall short of needs by 2033. *** This shift makes it even more important for individuals to understand their goals and have a well-thought-out financial plan that focuses on the key source of retirement income: personal savings and investments.

As you move through the various stages of the new retirement, perhaps working at times and resting at others, your plan may

When retirement was years away, calculating how much income you may need may have involved a lot of estimates. Now you can be more accurate. Consider the following factors: 1. The length of your retirement. The average 65-year-old man can expect to live about 17 more years; the average 65-year-old woman, 20 more years, according to the National Center for Health Statistics. Have you accounted for a retirement of 20 years or more?

2. Earned income. Working during retirement, even on a part-time basis, can reduce your need to tap retirement assets for ongoing living expenses.

3. Your retirement lifestyle. Your lifestyle will help determine how much income you’ll need to support yourself. A typical guideline is 60 per cent to 80 per cent of your final working year’s salary, but if you want to take luxury cruises, you may need 100 per cent or more.

4. Health care costs and insurance.

Most Americans are not eligible for Medicare until age 65, and even then, Medicare doesn’t cover everything. You can purchase Medigap supplemental insurance to cover some of the extras, but even Medigap does not pay for long-term custodial care, eyeglasses, hearing aids, and other ongoing essentials.

5. Inflation. Because the rate of inflation can vary over time, it’s a good idea to tack on an additional 4 per cent each year to help compensate for increases in the cost of living.

Running the Numbers The next step is to identify potential income sources, including Social Security, pensions, and personal investments. Also review your asset allocation -- namely, how you divide your portfolio among stocks, bonds, and cash.* Are you tempted to convert all of your assets to low-risk securities? Such a move may place your assets at risk of losing purchasing power due to inflation. You may live in retirement for a long time, so try to keep your portfolio working for you both now and in the future.

A New Phase of Planning Once you’ve assessed your needs and income sources, it’s time to look at tapping your nest egg. First, determine a prudent withdrawal rate. A common approach is to liquidate a maximum of five per cent of your principal each year in retirement; however, your income needs may differ.

Next, you’ll need to decide when and how much to withdraw from your tax-deferred and taxable investments. Investors are required to take annual withdrawals from employer-sponsored retirement plans and traditional IRAs after age 70 1/2. Be aware that these withdrawals are subject to federal income tax.** The advantage of maintaining tax-deferred

Franchising USA

ex per t advice

John Geenen, Managing Partner, Waterfront Financial Group

The ultimate goal for most retirees is making sure their assets last as long as they live. And because of increased longevity, managing cash flow is more critical than ever. investments for as long as possible is their ability to compound on a pre-tax basis and thus offer greater earning potential than their taxable counterparts. In contrast, long-term capital gains from the sale of taxable investments are currently taxed at a maximum of 15 per cent.

Retiree Challenge: Making Your Money Last The ultimate goal for most retirees is making sure their assets last as long as they live. And because of increased longevity, managing cash flow is more critical than ever. While many variables come into play, there are a number of planning moves that

Franchising USA

can help retirees live within their means and make appropriate adjustments in response to changes in income and expenses.

Tools for the Task You will need to clarify your current financial situation, as well as any significant changes you expect. Two sources will provide this information: • A net-worth statement, which provides a snapshot of your assets, debt, and cash reserves.

• Your monthly or annual budget, with itemized breakdowns of your income and expenses. If you haven’t retired yet, it’s a good idea to prepare a projected budget

of your retirement income and expenses.

Even with reasonable assumptions about investment returns, inflation, and retirement living costs, it is likely you will encounter numerous changes to your cash flow over time.

What to Look For What should you look for as you monitor your finances? Following are potential developments that could affect your cash flow and require adjustments to your plan.

• Interest rate trends and market moves may result in an increase or decrease in income from your savings and investments.

• You may also encounter changes in federal, state, and local tax rates and regulations. Watch for changes in Social Security or Medicare benefits or eligibility, as well as new rules affecting employer-sponsored retirement benefits and private insurance coverage.

• Inflation and health care costs are two

Page 45

other variables that can have an impact on living costs and, hence, your retirement planning assumptions. • Life events such as marriage, the death of a spouse, and the addition or loss of a dependent may also affect your cash flow.

In addition, cash flow is impacted by both small and significant choices you make over the course of your retirement, such as how much you spend on travel and entertainment and whether you live in a lower-cost or a higher-cost locale.

It is worth paying close attention to cash flow, making sure you budget carefully, monitor income and expenses frequently, and take action whenever you believe that significant changes may be necessary.

Risks to Your Retirement Future As Americans live longer, the task of managing money after retirement gets more complex. A retiree in his or her mid-60s typically has a different risk profile than an individual approaching 90. It may be helpful to look at various types of risk from the vantage point of how they affect retirees at different life stages. Here are four key risks to consider.

Risk 1: Investment Risk Balancing risk and return takes on a different meaning for individuals as they age. A negative rate of return during the

early years of retirement could leave an individual with a significantly smaller nest egg when compared with negative returns later in the retirement life cycle.

Risk 2: Longevity Risk Withdrawing too much from a portfolio during the early years of retirement may heighten the chance of depleting your assets during your later years. For this reason, many financial advisors recommend limiting annual withdrawals to five per cent or less of a portfolio’s value, adjusted for inflation, to make assets last as long as possible.

Risk 3: Inflation Risk Because younger retirees typically are planning for a time horizon of 20 years or more, it is important that their portfolios include a source of growth that is likely to exceed inflation over the long term.

To complement this potential growth, many retirees rely on more conservative investments that may generate income and help to balance risk and potential return.

Risk 4: Health Care Risk It is not unusual for medical costs to increase as retirees age, and it may be prudent to plan for these costs before the need is immediate. Pre-retirees and younger retirees may want to explore options for medical insurance that supplements Medicare, as well as long-term care

insurance, to reduce the possibility of dipping into personal assets to finance illness- or accident-related expenses. Also, remember that those who retire before age 65 need to find an alternate source of medical insurance prior to becoming eligible for Medicare.

Reviewing these and other challenges associated with retirement planning with your financial advisor may increase your confidence that you have considered all scenarios. While it may not be possible to prepare for every situation, planning ahead may help you cope with financial issues that come your way.

John Geenen is a Financial Advisor and Managing Partner with the Waterfront Financial Group in Minneapolis.

John has been advising clients since 1984. He offers strategic guidance to business owners in the areas of business succession planning, exit strategies and generating lifetime retirement income.

John also understands the unique needs of franchisee business owners, and in February 2011 was awarded the Certified Franchise Executive (CFE) title by the International Franchise Association.

John is a nationally recognized speaker, has produced and hosted weekly cable TV and radio programs and writes many articles for financial publications.

He can be reached at: Phone: 952-236-1755 Email: john.geenen@

waterfrontfinancialgroup.com Web: www.waterfrontfinancialgroup.com Securities Offered through LPL Financial Member FINRA/SIPC Asset allocation does not assure a profit or protect against a loss in a declining market. * Withdrawals from tax-deferred accounts made prior to age 59 1/2 may be subject to an additional ten per cent penalty. In the case of employer-sponsored plans, there are special rules that apply to plan participants aged 55 and older who separate from service. ** Source: Social Security Administration, Facts & Figures About Social Security, 2012. *** Past performance is no guarantee of future results. **** Š 2011 McGraw-Hill Financial Communications.

All rights reserved.

Franchising USA

ex per t advice

Kelly Maguire, Senior Director of Media, Aviatech

Finding Your Place in Social Media H ow to e x tract S ocial R O I by not chasin g it

“Franchisees have a particular advantage when implementing these strategies, as they have the benefit of being able to leverage large brand recognition while still tapping into locally relevant information and building their content strategies around their communities.”

The local franchisee must find a way to both integrate with the franchisor’s brand message while establishing its own unique and locally relevant presence.

Social media presents a tremendous challenge as well as a major opportunity for small and medium size businesses, as well as a particular challenge for a franchise business.

Franchising USA

There is often a skewed understanding of exactly what social media is and exactly how it can or should be used. In order to properly evaluate the opportunities that social media presents, it is important to break it into two distinct segments. At Aviatech, we refer to these segments as “organic” and “paid” social media, and each segment requires its own strategy and execution plans while being made to work together. By breaking the overall social strategies into these two distinct segments,

it allows them to be given the unique individual attention that each requires.

Organic Media: Finding Your Voice When tackling the challenge of organic media the first question to be asked is “what value can I offer on social media?” This runs counterintuitive to the natural instincts of marketers who always want to ask what can the medium do for me and what is the ROI I can expect. However it is critical to make this shift in thinking in order to effectively develop a social strategy that can deliver in line with the core value of social media, which is the ability to establish a

Page 47

two way relationship and a communication channel with your customers. These relationships are where the ROI of social media will truly be derived, as the closer you get to your customer base the more valuable those customers will become. Once this shift in mentality is made it becomes possible to move beyond the quagmire that is promotional, self-serving content and shift into offering compelling content that your audience will appreciate. Now this is an interesting idea in and of itself, considering what your audience will “appreciate”; however it is an important thought since you

are asking your audience to stop interacting with their true social connections -- their friends and their family -- and to instead spend time with your brand.

How do you effectively make this request?

By offering something that they will appreciate and find valuable, and in exchange they will associate this experience with you and your brand, therefore positively impacting their opinion of you and their natural recall of your brand. An organic content strategy should always strive to follow the traditional 80/20 rule, where only 20 per cent of all content is promotional

and sales related. Any more than this and you run the risk of alienating your audience and diluting your social value. If you manage to effectively follow this guideline you will see the times that you do push a promotional message actually delivers an effective impact as you will have an engaged and tuned in audience. One of the best questions to ask when posting content you believe falls within the 80 per cent is; “is this interesting, would I want to read this or would I appreciate seeing this on another brand’s profile?” If you cannot find the objective value in your own content then it

Franchising USA

ex per t advice

Kelly Maguire, Senior Director of Media, Aviatech

may be worth reconsidering its value to your audience.

One philosophy that we push heavily at Aviatech when formulating a content strategy is organization, consistency and expectation setting. By emphasizing these we are focusing on developing a program where the potential user can quickly and easily see the value and set their expectation of what value they can receive by connecting with a given social profile. The reason this is important is the social landscape suffers from a problem of overcrowding from endless business profiles to choose from and sift through, so finding a way to demonstrate a true value becomes a major challenge. One of the ways Aviatech addresses this challenge is by making the decision to connect as easy as possible for our target audience. By organizing a content strategy in such a way that it can be quickly digested upon the initial visit increases the likelihood of a customer wanting to connect. People like to know what they are getting, and they appreciate not having to work for that knowledge. Many social content executions can be very robust and follow best practice guidelines well, however if they are disorganized and fragmented they are working against themselves. This organization concept is not one that is widespread, as it is a problem that even the largest brands often suffer from, however if it is successfully addressed it can have a tremendously positive impact. By organizing all content to develop a “voice” and to maintain a consistent schedule such as a “Photo Fridays” or “Trivia Mondays” you can establish a consistent relationship with your audience and they will have a reason and understanding of when they should return to your profile and what they can expect when they do return to it.

Franchisees have a particular advantage when implementing these strategies, as they have the benefit of being able to leverage large brand recognition while still tapping into locally relevant information and building their content strategies around their communities. This not only offers valuable content, establishes a “voice” and purpose

Franchising USA

Paid Media: Building Your Mountain Top

content are. It is easy to try to self-navigate the interfaces of these platforms as they are designed to be self-serve; however they are not designed to expose the many intricacies that go into making them work at their most efficient. This knowledge is derived from a lot of trial and error and industry experience. Some primary tips that will assist in the beginning is to not look at these ad platforms the same way you would say, Google AdWords; you are not trying to find what people are looking for at that moment, you are trying to identify the people who would have the most interest in your message and grab their attention at a time when they are not likely thinking about anything related to you.

Now that you have prepared to place your brand within the social landscape and figured out the value you are able to offer your audience, it comes time to build the platform to deliver your message. The first and most important thing to understand when formulating a social media strategy is that no effectively executed plan operates under a “if you build it they will come” mentality. If you are truly going to extract the maximum benefits from your social efforts, it is critical to support those efforts with a paid strategy. Your social activity is only as valuable as the people who are exposed to it, and with the vast landscape of social profiles out there, breaking through the clutter can be nearly impossible and doing so within your target audience only increases the difficulty. This is where targeted and highly strategized paid platforms can help deliver the mountain top to shout your message from.

With this is mind, you must consider the philosophy behind why your consumers would find value in your message and cater to that. Try to develop a good model of your target consumer and establish your ad targeting around that model. Try to frame your message in a way that fits the platform you are promoting on. If it is Facebook make it social in nature and use imagery that includes people; if it is Twitter make it a message that is easily sharable and include a hashtag for tracking. The more thought and consideration you put into your paid promotions, the more valuable your social media presence will become. Consider your social media identity as a long term investment. The audience might not be ready to buy right now, but when they are, they will be more likely to remember the brands they have spent time engaging with online and have associated with an experience they appreciate.

There are many cost related mediums that can help build your audience and it is important to make sure any of the methods you choose to employ are utilized strategically. Each of the major platforms typically have their own built-in ad platforms, with the most prominent being Facebook Ads, Twitter Promoted Tweets & Accounts, and LinkedIn Ads. Each can be effective at exposing you to your audience, but each must be employed with a clear strategy in the same way your profiles and

Paid strategies can also be used as a way to offer value in your social media presence through things like sweepstakes, contests, giveaways, special deals and more.

Everybody likes to win and get things for free, and that carries over perfectly within social media. Few tactics can prove as effective as this when done right. It is important to note that many of the major platforms have strict rules in place with what they allow for running these types of programs on their platform, the most

to the profile, but also delivers relevance to your target audience as it reaches the people most likely to patronize your business.

Post photos of the community, call out major events such as fairs and parades, congratulate local school achievements, tap into the community and make your business a part of it. Implementing more dynamic content that will not only draw your audience in more but also connect you with the community you serve and lead to greater recall and loyalty amongst the customer base. People like to support businesses they trust and feel a connection to.

Page 49

prominent of these being Facebook, which strictly prohibits contests, sweepstakes, and giveaways directly on profiles. This is a rule that is often broken by many brands but should not be ignored. There are cost effective ways to offer these while still following the platform guidelines, and doing things the right way will always yield greater benefit.

Conclusion: Social Media is an Investment in Your Business In closing, social media requires time, focus, resources, and most of all a clear strategy to deliver its true value. It is not easy and it is not free; these are misconceptions. You must make a commitment and you must be involved to truly derive benefits from this medium. However when utilized properly, it can be the most effective tool available to build better, stronger, and more valuable relationships with your customers and there

may be no better way to make your company a better company; When that happens, ROI follows.

help streamline departmental operations,

Kelly Maguire, Senior Director of Media

Kelly has also contributed to the agency’s

Kelly Maguire brings strategic insights and leading edge thinking to maximize impact of all the agency’s social media campaigns, increasing their clients’ visibility and engagement. His deep understanding and passion for social media and web 2.0 provides a unique and valuable tool in producing winning plans and developing cutting edge digital strategies.

thought leadership with published articles

Since joining Aviatech in 2010, Kelly has played a leading role in adding new services to the agency’s core capabilities, including the development of awardwinning advergames and sweepstakes initiatives, digital PR, and paid social advertising. He has overseen the implementation of new technologies to

and supervised a departmental expansion as it grew by more than 50 per cent.

and appearances at seminars and client conferences.

Kelly’s former positions include Strategist at Omnicom network OMD, the world’s top global media brand, where he was involved in developing the emerging media department; and Senior Program Manager at Performics while owned by Google, where he interfaced directly with all major social networking sites. His work with Facebook directly impacted the introduction of cutting edge applications to their ad platform. Kelly holds a Bachelor of Science degree in Business Management from DePaul University of Chicago.

Franchising USA

ex per t advice

Carl Khalil, Esq. and Sada Sheldon, Esq.

C hoosin g B etween F ranchisin g as

A Unit Franchise Owner Area Developer Master Franchise V ersus an

or

Many franchisors offer prospects the option of purchasing a unit franchise, on one hand, or an Area Developer territory, on the other hand.

Your Initial Investment

Often times, the terms “Master Franchise”

to solicit, sell, and support franchisees

or “Regional Developer” are used

interchangeably with “Area Developer.”

When presented with such a choice, the question becomes, which one is right

for you? This article will consider some

relevant issues to help you make the right pick.

Franchising USA

Perhaps the first question to ask yourself is

what level of capital investment do you want

to make? Typically, the initial franchise fee for a unit franchise territory is much lower than for an Area Developer territory. The unit owner is simply buying the right to

operate a franchised outlet in one territory.

But an Area Developer purchases the right in many unit territories in exchange for

a portion of the initial franchise fee and

royalties paid by the unit owners in those

territories. The loss of this revenue to the franchisor generally requires the Area

Developer to pay a higher initial franchise fee.

The initial franchise fee, however, is only part of the picture. Other start-up costs must also be considered. In this respect, the equation is reversed. An Area Developer tends to have very low remaining start-up costs because little is necessary to work internet or phone leads to try and obtain franchisees. And Area Developers can normally work from home without a staff, at least initially. On the other hand, unit owners often set up retail outlets, which customarily involves leasing, build out costs, equipment and furniture costs, as well as staffing and payroll.

Reviewing Items 5-7 of the Franchise Disclosure Document with a certain scrutiny will help you to analyze the costs associated with the initial franchisee fee, other fees, and start-up costs, to determine which investment level is right for you.

Would You Rather Sell and Support or Offer Ultimate Services The next question to ask yourself is what job duties suit your personality? The roles of Area Developer versus unit franchisee

Page 51

are significantly different. Area Developers focus on developing franchise leads, selling franchises, and supporting those franchisees once in the system. Good Area Developers generally have a sales mentality, enjoy networking, and the excitement of closing deals. Once a franchisee is brought into the system, however, Area Developers must invest time in supporting their franchisee’s business development. This may require travel between locations and being oncall to address problems and concerns from multiple angles. Therefore, an Area Developer must be a sales person, mentor, and problem solver.

Additionally, an Area Developer’s role tends to evolve over time. Initially, when an Area Developer does not have unit owners in place, most time will be spent selling franchises. But as unit owners are established, the selling function diminishes and the Area Developer focuses more on supporting unit franchise owners.

On the other hand, a unit franchise owner will be delivering the franchisor’s services to the ultimate end customer. Someone who has an interest or background in the franchise concept may find this role more appealing. For example, a person with culinary skills or restaurant management experience may want to purchase a restaurant franchise because he has a desire to operate his own restaurant.

The role of a unit franchise owner does not necessarily change over time, but it can. A successful unit owner may gradually acquire additional unit territories and thereby become a multi-unit territory franchisee.

In this role, the franchisee focuses on managing an operational structure and staff to carry out the various duties needed to run the franchised outlets. This would be a good route for someone who enjoys the logistics involved with the operations and management of a business over the ultimate services.

Another possibility, and one that may be required by the franchisor, is to do both.

You may feel that your personality would mesh in either a sales or product delivery

environment. Or, you may find that you are passionate about the brand after spending time as a franchisee. Hence, you want to

sell and bring others in the system. In some cases, a franchisor may require an Area

Developer to own a franchise to gain an

understanding of the system, provide quality support to unit franchisees based on that understanding, and serve as a model for those franchisees.

Conclusion The choice between entering the franchise world as a unit owner versus an Area Developer or master franchise is an

individual choice entailing considerations of capital available to invest, what type of job

functions you prefer, and whether you want more active or passive long term lifestyle

goals. Hopefully, this article has provided some insights to help you make the right choice.

A single-unit franchisee’s revenues are tied to the fortunes of a single location. A multi-unit franchisee will have a more diverse portfolio with risk spread among stronger and weaker outlets.

Long Term Goals and Return on Investment Finally, you should consider your long-term goal and return on investment. A single-unit franchisee’s revenues are tied to the fortunes of a single location. A multi-unit franchisee will have a more diverse portfolio with risk spread among stronger and weaker outlets.

In either case, the return on investment will depend on various factors including location, choice of franchise, and business acumen.

With an Area Developer or Master Franchise territory, the long term goal is often more passive. Obviously, because the Area Developer’s income rests largely on the success of its franchisees, you will still need to do some coaching of your unit franchisees. But as they become more seasoned, they will need less and less assistance. Your role will transition into a semi-passive form of an investment income stream. Further, like the multi-unit franchisee, income among the franchisees in your territory diversifies the investment.

About the Authors: Carl Khalil is a Partner in the law firm of Carl Khalil and Sada Sheldon, PLC. He has 17 years of franchise law experience and previously worked as Corporate Counsel for Jackson Hewitt and Liberty Tax Service. During his tenure at Liberty Tax Service, it grew from 35 offices to nearly 4000 offices and 100+ Area Developers.

He may be contacted at: Phone: (757) 263-4596 Email: carl@khalilsheldon.com Web: www.Carl-and-Sada-Law.com.

Sada Sheldon is a Partner in the law firm of Carl Khalil & Sada Sheldon, PLC in Virginia Beach, Virginia, a nationwide franchise and trademark practice. She is admitted to the State Bars of both California and Virginia. She is a member of the ABA Forum on Franchising.

She can be reached at: Phone: (757) 263-4596 Email: sada@khalilsheldon.com at Web: www.Carl-and-Sada-Law.com.

Franchising USA

ex per t advice

Robyn Gault, Vice President of Strategic Accounts, Direct Capital Franchise Group

Making Sense of F ranchise F inancin g R elationships

“Over time, the marketplace for financing has grown, and franchisees are turning more regularly to alternative direct lending partners who have continued to provide loans and financing even after the banks have tightened their purse strings.”

Financing as a Franchise Need

Franchisees face a myriad of unique challenges in the pursuit of gaining or maintaining market position.

There are the equipment and technology updates, marketing needs and labor costs, franchisor mandates, brand re-imaging, and the many opportunities that come hand in hand with the acquisition of a new franchise location. Though every situation is different, there’s always one underlying question – how will you pay for the necessary projects while still maintaining the cash flow that you need to keep your business growing?

Franchising USA

As a franchisee, in order to succeed in today’s challenging marketplace, you’re going to need to consistently put your best foot forward. According to industry data, a remodeled restaurant may achieve a nice lift in same store sales, as high as a 10-15 per cent increase to AUVs. These proven results spark many franchisees to start thinking about their own remodels, oftentimes much earlier than they may be required to per their Franchise Agreement.

There are some unforeseen benefits that result from replacing those “back of the house” pieces that the customer might never see, as well. There are certainly increased operational efficiencies that can come from a better designed kitchen and upgraded equipment, not to mention the possibilities of enhancing your product quality through production with more modern equipment and technology.

At the end of the day, any franchise modernization is about the franchise

brand image, and staying relevant with the customer. Consumers have come to expect, and appreciate, their brands keeping up with them.

If you’re not current with the brand standard, the more likely customers may be to visit a more current location or another brand entirely. But, as I mentioned earlier, all of this is not without a price.

So where do you turn when you need help raising the funds to accomplish your goals?

Traditional Financing Options Historically, franchisees found the major chunk of their financing in just a few places—the local bank, their own credit cards or perhaps some smaller loans from friends and family. Or, if they were lucky, their Franchisor might be one of the few offering incentives or financial support.

Over time, the marketplace for financing has grown, and franchisees are turning more regularly to alternative direct lending partners who have continued to provide

Page 53

loans and financing even after the banks have tightened their purse strings. franchise/

The Financial Relationship When it comes to financing, the franchisor likely already has a plan in place to help its franchisees get the financing they need to come out ahead. The franchisor should therefore always be the first stop for any franchisee on the hunt for financing. In franchising’s most perfect form, franchisors are known for maintaining a strong advisory relationship with their franchisees, where the franchisees are more or less operating on their own, but the franchisor is there to provide support and guidance in key areas of the business, including financing. It should come as no surprise then that some franchisors even offer their own in-house financing programs.

The majority of franchisors maintain strong working relationships within the franchise lending community, likely a company like Direct Capital that is very familiar with the brand and has an understanding of the franchise industry and business model. The franchisor will probably have also performed strong due diligence on the lenders and finance programs they recommend to their franchisees.

These relationships often result in the creation of custom programs for re-imaging, store development or equipment and technology upgrades, all tailor made to suit the brand’s specific needs. At a time when it is especially difficult for small-to-mid size brands to obtain financing, Direct Capital in particular offers same day approvals and competitive programs to support new store development, remodel projects and capital equipment upgrades. This means a win for the Franchisor, Franchisee and the Lender.

The Future of Financing Ultimately the future of financing is all about the lender making it easier and more convenient to obtain financing that meets the needs of your brand. It’s technology that’s leading the way in making obtaining financing a painless process.

With online portals becoming the norm, oftentimes customized by the lender to suit the particular brand’s image and programs, approvals can happen faster and more efficiently than ever before. The growing acceptance of e-signatures has taken it a step further. Gone are the days of sending stacks of documents back and forth through the mail, shortening the process from several days down to just a couple of hours – a time savings that could be crucial to a franchisee with a key piece of equipment that may need immediate replacement.

Expect to start seeing technology that gives you the ability to source your financing on your own terms as well - like websites that allow you to comparison shop for financing right from your desktop. You would simply plug in information about what kind of loan you’re looking for and get back options to choose from. Once a lender is selected, you’d able to fill out an application and get final approval online right through the portal. What could be easier?

While no one can predict where the economic landscape will turn over the next several years, one thing is for sure, franchisees will always need competitive finance options to maintain brand standards and expand their business. Luckily, lenders and franchisors are waiting in the wings to provide a safety net to help franchisees fuel their way to success.

Robyn Gault is the Vice President of Strategic Accounts for Direct Capital Franchise Group. Direct Capital Franchise Group is a national direct lender with 20 years of experience. The firm partners with Franchisors to provide competitive financing to support new store development, remodels, relocations, store acquisitions, equipment upgrades, and more.

For more information, please contact: Phone: 603-433-9476 Email: rgault@directcapital.com Web: http://www.directcapital.com/

Franchising USA

prof ile

East Coast W ings

East Coast Wings Spreads its Wings

N ationally W ith E mphasis on F amily - F riendly D inin g and F ranchisee P rofitability .

What started as a small restaurant spot in WinstonSalem, N.C., has quickly become the ultimate spot for families to take advantage of more than 675 combinations of buffalo wings.

East Coast Wings & Grill, a North Carolinabased restaurant concept, has identified a niche in the buffalo wings segment and capitalized on it.

In an industry with endless choices during a less than stellar economy, the restaurant chain has proven that spreading its wings beyond the typical buffalo wings concept, has its advantages. With 35 consecutive quarters of same-store sales increases, East Coast Wings & Grill is far different from the norm in the chicken wing segment by focusing on franchisee profitability first and foremost.

East Coast Wings & Grill was founded in 1995 and in 2001 was taken over by the company’s current CEO Sam Ballas.

Ballas retooled the concept because he saw potential for the chain to go beyond the beer-loving wings fans and transition to a family-friendly environment. Since taking over, East Coast Wings & Grill has grown to 24 locations in North Carolina and has

Franchising USA

signed agreements to add more than 70 new restaurants across the country within the next several years.

“We provide a different experience in wings restaurants,” Ballas said. “We are not a typical sports bar; our alcohol sales are below 11 per cent. We cater to a crowd who likes a place where you can bring children and enjoy family time and a great variety of freshly prepared food items. Our customers appreciate that our restaurants cater to their families.”

Even the menu boards challenge its competitors, with an impressive variety beyond just wings. While its 75 flavors of buffalo wings, offered in 675 combinations depending on the heat intensity, remain a staple of the concept, East Coast Wings & Grill’s six-page menu also includes such casual dining options as burgers, salads, the signature Buffalajitas, sandwiches, ribs and more.

“We provide an atmosphere that when you come into an East Coast Wings, you will see everyone from Grandma to baby enjoying our diverse menu,” Ballas added.

“Everyone can come in and see us, from the wing connoisseur like me who likes sports and wants to come in with some buddies, to someone like my wife who doesn’t want the wings but loves our made-from-scratch salads.”

The “Magnificent 75 Flavors” of wings include mango habanero, lemon pepper,

honey barbecue, and Caesar Parmesan.

Each flavor is available in nine heat levels from virgin, mild, medium, hot, x-hot, volcanic, lava flow, magma and ECW insanity.

East Coast Wings is seeking additional multi-unit franchisees to further develop the company’s network of restaurants, including a university model store, throughout the country.

For more information on East Coast Wings & Grill contact Dan Collins, SVP Brand Development at: Phone: 954-263-2056 Email: dan@eastcoastwings.com

Page 55 Segment Leader in Casual Dining & Franchisee Development

How’s Your Bottom Line?

Web:

s s s s s s

www.eastcoastwingsfranchise.com

‘09 vs. ‘11 Same Store EBITDA Growth 58%* National Buffalo Wing Festival Champions 34 Consecutive Quarters of Same Store Sales Growth Since Franchising* Average Unit EBITDA: s $264,805 in 2010, $265,405 in 2011* Superior Bank Credit Report* Nationally Ranked #5 in 2012 out of all Franchise Companies Surveyed Join the leader of casual dining in the Buffalo wing space Contact Dan Collins, CFE dan@eastcoastwings.com or 954-263-2056

www.eastcoastwingsfranchise.com This advertisement is not an offering of a franchise. An offering can be made only by prospectus. We only sell franchisees in states where our offering is registered. Figures reflect same unit average as reported by units operating in ‘09-’11. *EBIDTA as submitted by our full service franchised restaurants operating in 2010 & 2011 as published in item 19 of our April 2012 Franchise Disclosure Document. Figures reflect Franchisee submitted on unaudited P&L’s. Individual financial performance will vary. Bank Credit Report developed by Fran Data.

Franchising USA

ex per t advice

Gloria Plaisted, CFE, President/CEO, Son Group, LLC

Build Your Brand From Within

by C reatin g an E ner g i z ed W ork E nvironment Your front-line staff single-handedly sets the tone of your customer service and “packages” your brand everyday. Is your packaging attracting or distracting? Does it create customers, or chase them away?

When was the last time you made an honest assessment of who you have in the most important “chairs” of your operation?

Franchising USA

It starts with franchisees mis-defining the job description. All too often we deemphasize the position of those on the front line. We assign titles such as counter help, cashiers, or register people, and I’m not even sure the word “front-liner” captures the value of this position, but until we can give it the title it deserves, we’ll use it.

Second, the criteria and standards we use for selecting our front-liners should be set higher. Let’s be honest: when applicants are few and far between, we desperately settle for “warm bodies.” And when coupled with low-energy leadership, the result is flat-line performances.

During my 34 years as a multi-unit DQ brand franchisee, I have acquired by experience some time-tested tools that can turn your front-liners into star performers

– without reaching deep into your pockets.

Please keep in mind that these energizing techniques are applicable to your entire staff, not just those on your front-line.

Sensory Check For starters, we must believe that our bottom line is critically tied to our front-line.

Customers who spend their hard-earned money in your store are not just expecting the visible exchange of money and product.

They want an experience worth writing home about. It takes a well-synchronized and energized team to provide this sort of experience. Have you invested the time and energy in your people so they are equipped not only to make a transaction, but also to transform that transaction into an encounter your customers will share? Consider the following ways to revive, motivate, and create a pulse so strong that it could possibly create media coverage!

Factor in your operations what I refer to as a “sensory check” of your business. At any given moment, what do your employees and

Page 57

customers see, hear, touch, smell, taste, and feel in your store? If you expect your staff to do their best, you must give them the best environment to work in, and the best tools to do their jobs. Ponder these points: • Do you schedule in your operations lineof-sight checks?

• Evaluate the age and condition of your point-of-sale materials.

• Do you have adequate lighting and ventilation?

• Food and music go together. Does your sound system allow for conversation?

• Do your uniforms have that tattered “civil war” look or are they updated regularly to reflect pride for your brand and energize those who wear them?

• Do you include in your equipment purchases items specifically for making work easier for your staff?

Beyond “duct tape” Unfortunately, within the food service industry today we don’t have to travel far to detect “duct tape” operators. This is management that invests minimal dollars to quick fix a problem simply to get through another day of operation. This penny-smart and dollar-dumb mindset only precipitates a slow operational suicide.

I’ve yet to detect duct tape at a Disney Theme Park. The “Happiest Place on Earth” spares little expense in making their Cast Members (employees) and Guests (customers) comfortable. They clean every street in the entire park every day. Ever notice that the flowers are always in bloom?

They replant every blooming flower three to five times a year. Best yet is their cool “open door policy.” All you need do is walk by a storefront and cool pixie dust (air-conditioning) will pull you in. Disney figured out that these unique operational

choices have more to do with advertising than expense. Do you really think Disney gives a flying Tinker Bell that the door is open and the A/C is rolling out? They believe a comfortable customer is a spending customer, and that a happy cast member is the best form of advertisement. Okay, you and I don’t have Disney’s deep pockets, but nevertheless we should strive for the same results.

Uncontrolled temperatures, as well as other environmental irritations can produce stagnant and lifeless performances by your staff. Have you provided your employees with up-to-date, well-maintained equipment? They may not voice it, but employees care about properly functioning and clean equipment. I challenge you to replace a piece of old stainless steel, or a broom with little or no whiskers, and watch the excitement generated among your staff.

Regular equipment replacement from old

Franchising USA

ex per t advice

Gloria Plaisted, CFE, President/CEO, Son Group, LLC

complex company problems?

• Am I using your talents wisely?

• As a leader, what could I improve on?

Based on the answers, make it a top priority to implement changes necessary to create a new and improved leader.

ROL (return on laughter)

“Have you invested the time and energy in your people so they are equipped not only to make a transaction, but also to transform that transaction into an encounter your customers will share?” to new demonstrates that you want to make their job and life easier. It’s these types of operational changes that make for lower turnover and the happiest people in your company.

Lead them or lose them Remember when you were a kid and played, Follow the Leader? If you or your manager come to work today with your hat on backwards, or wearing a uniform that was resurrected from the dirty clothes pile, I guarantee your staff will follow suit. If you come through the door with a invisible sign hanging around your neck that reads, “I’m tired,” you have inadvertently given permission for others to act likewise, thus creating an entire culture of sluggish performance.

A leader sets the tone for the entire

Franchising USA

organization. Many times, managers are clueless as to why their staff shows little or no respect for them. If this shoe fits, ask yourself if the words or actions you use in your business display integrity and professionalism? Have you earned the important advantage of respect? Do your words build up or tear down? Good leadership will enable and empower its people so that individual growth and development take place. Ask and you just might receive. Start today by taking an honest real life assessment of your leadership. Better yet, have your staff evaluate your performance! Design a “no name required” questionnaire. Some examples might be: • What would make your job more purposeful?

• Do I invite your feedback to solve

Humor is a serious business strategy in that funny is money. Are you humor impaired?

Either learn how to find your funny bone or delegate someone to pinch hit. Newsflash!

At every shift change, you should be distributing a blueprint for fun. Plan ahead what you’re going to do for the incoming shift to set in motion an atmosphere of playfulness. Marc Plaisted, a fourthgeneration Dairy Queen franchisee, placed a high priority on a lighthearted workplace.

Before every shift he would address his staff with a blueprint for laughter. Here is a sampling of one of his pre-shift pep talks: “Today we – as a team – are going to make history! Yes! This team is about to set records, not only in sales, but also in exceptional customer service! This calls for a warm-up. Close and tighten your fists. Now open them really fast. Extend and stretch those sales fingers. Let’s give the thumbs some extra workout, as I have a feeling your performances today will generate a lot of thumbs-up. Next, we need to warm up our smiles. Take your left cheek… now lift and hold. Your lip should follow suit. Now lift your right cheek and complete your smile.” Plaisted adds, “This zany finger and cheek warm-up generates outbursts of extreme laughter.”

The criteria when implementing fun, should include: • Keep it in good taste and non-offensive.

• Keep it pithy.

• Keep it practical.

With the decline of worn out traditional incentives, a great idea book for your tool chest is, “The 1001 Rewards and

Page 59

Recognition Fieldbook,” by Bob Nelson.

It’s chock-full of new and cool ideas for your humor tool chest. http://amzn. com/0761121390 Humor is a serious business strategy. Funny Research has shown that the workplaces with the best productivity have about ten minutes of laughter every hour. So lighten up. Place some clean humor cartoons in your break room. Mount an Etch-A-Sketch to the wall with Velcro. Customize MinuteTo-Win It relays in your meetings. Heatsensitive Power Wall Drawing Panel are a favorite even for adults. Take snapshots of zany moments and collage them on board. Bring in delectable pastries or keep a candy jar filled. Consider an employeegenerated “once in awhile” newsletter.

When job positions become monotonous, it’s these types of store initiative “side tracks” that renew and restore the pulse in your team. Mirthful laughter is an instant mood changer, and prevents burnout and hardening of the attitudes.

The power of recognition I’ve heard it said that workers often take a job for more money, but leave for more recognition. If we believe people are our most valuable asset, then we must investigate and implement programs that will foster a culture of reward and recognition in our business – and do it on a daily basis. Chances are good that your staff is walking around with an invisible sign that reads, “I want to feel important.”

Do you systematically make an effort to reward and recognize your employees? Few management initiatives are as successful as pure positive reinforcement. And it’s not enough today to just tell them, you must get creative and show them the fruits of their labor and the impact it makes to the team and company.

How many people do you know who don’t come alive from a dose of pure praise?

Make it a point to catch your employees doing good deeds and saying good things.

Stand still and just listen. Do you hear

anything praiseworthy? Use your peripheral vision (and hearing) throughout the day.

See anything praiseworthy? If the answer is yes, then act! Praise should never be procrastinated. Tell people what they did right, and be specific. Tell them how it made you feel, and how it contributes to the success of the company & brand. And don’t pooh-pooh praise on little things, it propels people to give you their best simply because you noticed.

Validation energizes. Create business-size cards that say, “I saw what you did, and I know who you are.” Create a diverse suite of benefits tailored for card redemption.

Transportation stipends are a value by many quick-service employees. Find out where they like to eat, their hobbies, where they like to shop, etc. It’s the thought that counts when it comes to customizing your rewards.

Monetary bonuses are appreciated but rather passé, so add customization, like involving the employee’s family in the reward.

Proven Secret Formula Franchisees are forever asking, “How do I get my employees to have an owner’s mindset and love the brand like I love it?” Let not your heart be troubled, it can happen, but there’s time built into it. I’ve found no shortcuts. Here’s the answer:

Integrity + Influence + Trust + Respect = Loyalty

When loyalty is attained, it is at that juncture that your workers will be passionate about

what you are passionate about. They will be loyal to you and to your brand.

Today, you have it within your power to influence and inspire a culture of

invigoration in your franchised business. By investing the time and money necessary to energize your team, your productivity and profits will soar to new heights, all while building your brand from within.

Gloria Plaisted, CFE is President/CEO of Son Group, LLC. Gloria and her husband Rick have been multi-unit/multi-brand franchisees for over 35 years in the QSR industry. Together they have mentored and influenced over 25,000 employees over the years. Gloria is also an Executive Consultant with BrandChise LLC, a fullservice franchise and branding solution source for new and existing franchise companies.

To contact Gloria: Email: gloria@brandchise.com Web:

www.brandchise.com

Franchising USA

ex per t advice

Jason Miller, Brand Manager, ZorSource

findin g the

Right Franchise 800,000 franchised locations in the US and franchising accounts for over 18 Million Jobs and an economic output of over $2.1 Trillion! Yes, that’s Trillion with a “T”.

Although franchising only represents less than ten per cent of the nation’s businesses, it accounts for nearly half of all the dollar output in the country today. Those are some pretty powerful statistics!

So what you should look for in a franchise?

I’d wager a guess that you are reading this article because you are interested in taking the next step to controlling your own destiny!

Congratulations on making the choice to embark on this exciting journey. Investing in a franchise business offers so many benefits and there are plenty of great franchise opportunities to invest in. My hope with this article is to give you some insights into the world of franchising, and take an in depth look into what you should look for in a franchise, and also what a franchisor is looking for in a great franchisee.

First I want to share some impressive data that proves franchising is a powerhouse for today’s economy. There are over

Franchising USA

There are certain distinct characteristics that all franchises have in common. Most people look at franchising because there is a system that’s proven to be successful, there is a powerful brand, and there is on-going training and support. These characteristics are what make franchising something you should consider. One of the biggest fears that come with starting a business is fear of the unknown. Franchising alleviates those fears with the systems, brand power, and support. However just because a franchise has all these valuable benefits, it doesn’t necessarily mean that every franchise is right for you.

One of the things that we do when coaching our clients on investing in the right franchise, is to start with a vision. Any successful business person knows that you need to have a solid vision. Well, it’s no different than when you are starting your search for a franchise, you need to start with vision. You need to begin with the end in mind. Think about what you want to achieve through franchise ownership.

Ask yourself this......What kind income do I need? What kind of lifestyle do I want?

What do I envision doing with this business in the next three, five, or ten years? Take some time to answer these questions before you begin your journey of discovery.

One of the most fascinating stats that we have found is that the majority of the candidates we work with, end up investing in a franchise that they hadn’t thought of, or would have pre-maturely dismissed.

There are thousands of different franchises in over seventy five different industries.

It’s important to keep an open mind and do as much research as possible. Focus on the business as the vehicle to achieve your income and lifestyle goals. By doing this, you will not eliminate businesses that may be the perfect fit for what you want to accomplish through franchise ownership.

When validating and researching franchise opportunities, make sure you ask good questions. What training and support do I get? How do you help me market my business? How will you help me be successful? And most importantly, ask to talk to as many current franchisees as you can, because they will be able to share with you their exact experiences with the franchisor. Ask for franchisees that have been in the system for ten months and those that have been in the system for ten years.

Also ask for average franchisee tenure. If franchisees are staying a long time, that could be a good indicator that the franchisor offers great support.

What are franchisors looking for in a franchisee?

A franchisor could be looking for a variety

Page 61

of just $50,000-$100,000; and there are some great opportunities under $50,000 as well. Again, it’s all about exploring your options. If you need to borrow money to fund your franchise, there are a variety of creative ways to get it. Some franchisors offer in house financing, some have third party vendors, and there are also companies that help you tap into your 401K! Other franchisors participate in special programs that offer financial incentives to veterans, so be sure to ask about that if you have served our country.

“There are thousands of different franchises in over seventy five different industries. It’s important to keep an open mind and do as much research as possible.” of different things when prospecting for franchise candidates. One thing you need to remember is that a franchise already has a proven system of success, so you typically do not need to be an expert in a particular business or industry category. In fact, many franchisors prefer that you don’t have experience in their category, because they can then train you on the best ways to have a successful business. Franchisors want to find people that are willing to follow a system. That system may be a situation where you operate the business day to day, or it may be a situation where you manage a team of individuals, and you focus on the key things that are going to drive revenue for your business, like sales and marketing.

It all ties back to what you want to achieve through franchise ownership. If you are more of a technician, you may be a good fit for a franchise that wants you to be an owner operator. If you are familiar and comfortable with managing a team, and want to grow a big empire, than perhaps you would want a semi-absentee franchise, where you focus less on the day to day activities, and more on managing people and

managing the businesses. As a general rule of thumb, you should be comfortable with networking and building relationships, and dealing with clients and customers; because that’s something that any business owner will need.

A franchisor is looking for a good business partner. Remember that a franchise is evaluating you just as you are evaluating them. You want a franchisor that asks you good questions and makes sure you are a right fit for them. You don’t want a franchise that will take your money just because you have it; you want them to make sure you that you will be good business partners, since the success of each party is mutual.

Do I have to be a millionaire to own a franchise?

Many people think they have to be ultra wealthy or have a perfect credit score in order to own a franchise business, but that is just not the case. There are over five thousand different franchise concepts available today, many with investments

Investigating a franchise is an exciting journey, but it can also be a little overwhelming. You do not have to go at it alone. There are services available to assist you in finding the right franchise. In fact, our company offers a free service to individuals exploring franchise ownership.

We offer tools, resources, and expert franchise coaching to ensure you find the opportunity that’s the best fit for your income, lifestyle, wealth, and equity goals.

There are also great associations like the International Franchise Association that can give you a wealth of information on the franchising industry. I hope this article armed you with some powerful insights as you begin this next chapter in your life. Remember, you owe to yourself to explore all your options! Keep an open mind! Congrats again on embarking on this exciting journey.

Jason is the Brand Manager for ZorSource, a division of FranchisESource Brands International, a well recognized organization in the franchise community.

ZorSource offers a variety of valuable services from helping franchisors to find motivated franchise buyers, to offering proprietary coaching programs to assist franchise companies in becoming high performance organizations. Jason is a graduate of Georgetown University’s Franchise Management Program and is a speaker at major universities where he lectures on entrepreneurship as a career path. Jason will be a 2013 Certified Franchise Executive Candidate.

He can be reached at: Phone: 203-405-2142 Email: jmiller@zorsource.com

Franchising USA

ex per t advice

Nick Margiasso IV, Proprietor, NM4PR

C ustomer S ervice :

Standing out in the crowd are talking about the intricate and the essential realm of customer service, well… that might as well be gospel in the franchise community.

It is no secret to franchise business operators that they need to always be on top of their customer service initiatives, but what is news, is how customer service practices not only affect repeat business but also impact prospective new customers.

It has been said that the more things change, the more they stay the same.

In this day and age of social media, one-

click shopping and iEverything, that maxim amazingly still holds true. And when you

Franchising USA

And this is not just business-speak. There are a slew of numbers to prove it. In an interesting survey recently compiled by a leader in customer service, American Express, 1,000 shoppers were asked about their attitudes toward customer service in today’s marketplace. Nearly one-third (32 per cent) of those surveyed said that today’s businesses pay less attention to providing good customer service. About the same number (35 per cent) said they’d spend more with a company that placed greater emphasis on customer service. In addition, over 50

per cent of all those respondents felt that companies do little if anything extra to earn or thank patrons for their business, and more than half find that businesses are barely meeting their minimum level of expectation.

Finally, just over half of those surveyed said they have cut a revenue producing transaction short due to bad customer service.

On a related note, A Closer Look (ACL), a leading “Mystery Shopping” and Market Research/Data Analysis Company, recently completed an important survey that piggybacks on the findings of American Express.

And the biggest news about their discovery is, well, the oldest news of all. ACL discovered that the well-worn, tried and true euphemism, “Word of Mouth” is the best form of advertising and the landslide winner in determining what brings a new customer into a place of business. “Word of Mouth is about as old school as it gets in the constant customer renewal game, but so

Page 63

service experience is upwards of 24 per incident. That statistic is up dramatically from just a few short years ago and quickly on the rise due to the advent of social media.

So based on ACL’s study, what is said about your business and its service will be the final word to 46 per cent of all prospective customers. Whether that service was memorable, mediocre or down-right terrible depends on the franchisee’s commitment to the customer.

So what should businesses be doing to keep their hand on the pulse of delivering great customer service? Here are a few “Best Practices” to help you rectify poor customer relations, triaging those problems before they rapidly spread, potentially harming your business. many companies fail to realize the impact a positive customer experience can have on their business”, says David McAleese, one of ACL’s founders and CEO. With detailed data coming from more than 2,000 consumers surveyed nationwide in a thorough quantitative and qualitative analysis, although of no great surprise, ACL’s findings are interesting and fresh in a time when marketing departments seem to be consumed with capturing Facebook Fans and cultivating Twitter followers.

The breakdown of the data is as follows: “Word of Mouth” was selected by 46 per cent of the respondents as the leading factor in what brings a customer into a business (restaurants in this particular case) for the first time – that’s nearly half of the entire consumer demographic surveyed. The new kid on the block, relatively speaking, is the “Online Deal Site” category, where 26 per cent of the responding consumer population selected this as the entry point and leading

driver for them to walk through the doors of your business for the first time.

As for the rest of the group, nothing was even close to the top two. “Nearby Destination” and “Online Consumer Reviews” both came in at seven per cent, “Driving By” was at six per cent, “Traditional Review” was five per cent and a simple “Internet Search” was selected by just three per cent of those surveyed.

So, “Word of Mouth” is the biggest factor in bringing in new customers. Same as it always was, huh?

But how does that specifically affect the franchise world? Simple: the same quality of customer service provided by a particular franchisee, be it restaurant, retail or any professional services business that sells directly to the consumer, is the same experience that will be passed on to anyone wishing to hear about it. Recent studies have shown that the average number of people a customer will tell about negative

• Monitor and utilize social media to connect with your customers via Facebook, Twitter, and Foursquare.

These free online services are an easy way to connect with your customer and “make things right” when something goes wrong. In the aforementioned American Express survey, three in five consumers (60 per cent) say that they like the quicker response times properly monitored social media can provide. So make sure if you set up a social media presence that you religiously monitor it. Exactly half of those surveyed said they use social media to voice service-related complaints.

• Customer Satisfaction Surveys are also a great way to give your patrons a voice while rewarding them for telling you about their experiences. Usually incentive driven, you may have to spend a little in “giveaways” to drive enough responses giving you a solid depiction how your business is operating. Most companies who facilitate customer satisfaction

Franchising USA

ex per t advice

Nick Margiasso IV, Proprietor, NM4PR

commissioned to visit your businesses anonymously, sharing with you detailed insights as to how they were treated as a customer. Reports are typically made available to you within 24 hours, and the information is data-based, making it easy for you to see trends within the data at both the micro and macro level.

“Listen, you don’t have to be a genius to understand that when 46 per cent of your new customer base is driven by word of mouth, you need to pay attention and get your customer service initiatives right,” says A Closer Look’s CEO, McAleese. He also understands the stark reality of those numbers, and what straying away from taking care of your customers can do to a franchisee’s business.

“If each business proactively and reactively measures their customer service standards, and works hard to insure their customer is their number one priority, the rest will take care of itself.” surveys can even tell you the likelihood of those customers who will return or recommend your business to others. Like social media, it’s even more important to respond to a survey customer who has a negative experience at your establishment.

What could be more frustrating than to have something go wrong, be given a forum to let someone know about it, then have that information fall into a black hole?

• Marketing research, one of the most important facets in measuring customer service, assists you in understanding your business is perceived within the marketplace. The adage that “Knowledge is Power” is never truer than when it comes to making a market-driven

Franchising USA

business decision. This, however, is a simplistic answer to a complex discussion.

Marketing research will assist you in making business decisions that are based on the factual data you’ll learn about your business and its practices are perceived.

Marketing research can employ a broad spectrum of techniques and initiatives tailored to answer questions that every business faces. Focus groups, customer service panels and the utilization of industry consultants can provide great customer service insights, giving you the knowledge you need to stay on top.

• Finally, a great way to proactively measure your customer service efforts is to hire a professional mystery shopping company. These “secret shoppers” are

“With all the new things that have come about to drive customer counts, word of mouth is still at the top of the hill, we found,” McAleese said. “Right now, there are companies spending thousands if not millions each month on advertising campaigns, getting their name out on TV. Radio, billboards and through social media.

But they are getting killed. Their stores are empty. You know why? Because they aren’t paying attention to the one thing that really matters, that customer who is standing at their register or walking into their showroom. And do you know what he or she going to do? They’re going to tell a bunch of friends about the poor service they’ve just received, a few of those people (if any) will come in, get more poor service and before you know it, you’ve lost a thousand customers.”

And therein lays the answer for franchisees trying to figure out how to turn their customers into cheerleaders. If each business proactively and reactively measures their customer service standards, and works hard to insure their customer is their number one priority, the rest will take care of

Page 65

itself. Soon your customers will be talking billboards praising your franchise services while using “Word of Mouth” to spread the good news.

“I am a big sports guy, so I like to align business and sports because they are so much alike,” said ACL’s Director of New Business Development Justin Pepe. “If you are an up-and-coming franchise, you need to be aggressive out there, sure, but you also need to protect your house if you know what I mean. It’s about turning customer service into a full-court press, a full-on blitz.

Everything you do…what your brand and people represent, needs to be about taking care of the customer.”

How far can a franchisee get doing research and analysis on their own? Probably not too far, especially when taking into account the amount of time, expertise and objectivity required to truly evaluate ones business from the consumer’s perspective. Using an outside source to analyze one’s business brings ultimate value with the ability to show how the information gathered - over time or over a number of locations, for instance - paints a fact-based picture of what is wrong or right about your customer

service experience. By compiling and analyzing report data in close partnership with a franchisee, he or she can activate real changes in how they interact with customers - changes that can lead directly and immediately to increased customer satisfaction, more repeat business and better long-term profitability.

“It’s hard to look in the mirror sometimes,” Pepe said. “It’s even harder when what you are trying to see comes from another person’s vantage point. A mystery shopping program will truly pull the cover off things that a franchise owner might not be willing to see. Are your employees greeting the customer with and smile and sincere courtesy? Is that member of your team efficient and knowledgeable? Do they use proper closing techniques to ensure a sale? How can the transaction process be more expedient? Are my people making eye contact and using a tone that lets our customers know how much we appreciate them? These are the things you need to look at to ensure a wonderful customer experience.”

It’s about standing out in a crowd, something you must do in these competitive times

with several businesses all vying for new and repeat customers. Whether you are carpet cleaner or selling frozen yogurt, the same principles apply. If you want to break away from being a mediocre franchisee and become the very best, treat your customers like gold!

“Your customer has made the effort, you need to make sure you do to,” says McAleese. “They left the house after a long day at work, the kids are screaming, it’s raining and they are tired. You can make it better. As crazy as it sounds, opening the door, offering that extra perk, making it an easy, worthwhile and memorable experience can make their day. And that’s what you want to do. They are the stars, but it’s you that has to shine from a customer service perspective.”

Nick Margiasso, IV, has been a professional in the entertainment, restaurant and hospitality media industry since the ’90s. The proprietor of NM4PR, a media journalism and public relations firm based in Atlanta, GA, Mr. Margiasso has worked with and within organizations and publications including the Atlanta Braves, NASCAR, the Associated Press, Publication Services of America, Shopping Center Business Magazine, Southeast Real Estate Business Magazine and Restaurant and Retail Facility Business Newsletter.

Mr. Margiasso was a co-host of 2007’s Official NCAA Final Four Party at The Glen Hotel in Downtown Atlanta, has competed in multiple ATP Futures tennis tournaments and plans to one day run a bar and restaurant … somewhere … on a beach … where it’s always 5 o’clock.

He has a wife of eight years, Sussy, and a one-year-old son, Nicholas “Nico” Margiasso, V. For more information visit: Web: www.a-closer-look.com

Franchising USA

ex per t advice

Dale Haskin, OSHA Subject Matter Expert, Vivid Learning Systems

T he T op F ive N eed - to - K now R e q uirements R elated to

Safety and Health Training

some have standards that are just slightly different, and a couple (such as California’s Cal-OSHA and Michigan’s MI-OSHA) have standards that are significantly different. If applicable, employers must ensure they provide the appropriate training as required by their state plan.

outlined.

The length and complexity of Occupational Safety and Health Administration (OSHA) standards may make it difficult to find all the references to training. The challenges include identifying the training subjects required per business type, and then determining which employees need training, in what subjects, and how often. This white paper identifies the key requirements that employers, safety and health professionals, and training and human resources departments need to consider when developing their OSHA compliance training program.

As a franchisee, you should expect a certain amount of support from your franchisor when it comes to Safety and Health Training.

But as an employer, there are key items of which you’ll not only want to be aware, but also understand. In a white paper published

by Vivid Learning Systems, the top five Safety and Health Training items are

Franchising USA

1. Federal vs. State Jurisdiction

All states and U.S. territories were given an option to either participate in the federal OSHA system or create their own state OSHA program. To further confuse matters, some states have a “hybrid” approach, like the state of Tennessee, which has a state OSHA program with jurisdiction over general industry and construction operations but leaves federal OSHA with jurisdiction over the maritime industry. Some of the state OSHA programs have standards that are the same as federal OSHA’s,

In addition, if an employer recognizes a hazard that employee training would help mitigate, the employer has the duty to protect its employees by developing safeguards and providing the necessary training, even if there is no OSHA standard requiring training on the particular hazard.

2. Small businesses are responsible for providing safety and health training

There is a general misconception that “small” employers are exempt from OSHA jurisdiction. While OSHA generally will not conduct an inspection at a company with fewer than ten employees, that company is not exempted from OSHA coverage.

The small employer must still comply with all OSHA rules and regulations

Page 67

that apply to their workplace, and the company is also subject to receiving an OSHA inspection in certain situations, such as when an employee complaint is filed, or a work-related fatality occurs.

In certain cases, the small business may be exempt from implementing specific OSHA standards, like those requiring an OSHA injury/illness log or developing a written emergency action plan, but they must still comply with providing occupational safety and health training.

Business situations that are exempt from OSHA training requirements include sole proprietors and family members working on their family farm. Sole proprietors are not subject to OSHA jurisdiction as they are not considered an employer. While OSHA has agricultural standards, family members who work on their family farm are not considered employees, so are therefore exempt from the OSHA training requirements.

An effective program of safety and health training for workers can result in fewer injuries and illnesses, better morale, and lower insurance premiums.

3. Certain employee groups are covered by other federal agencies

OSHA training requirements can be industry specific, workplace specific and/or hazard specific. Training requirements for both the private and public sector are driven by individual industry standards pertaining to general industry, construction, maritime, aviation, agriculture and so on. OSHA training requirements can be industry specific, workplace specific and/or hazard specific. Training requirements for both the private and public sector are driven by individual industry standards pertaining to general industry, construction, maritime, aviation, agriculture and so on.

Certain industries, such as mining, are completely covered by other regulatory agencies instead of OSHA. There are other work situations where non-OSHA regulations could take precedence over OSHA’s, such as workers on a ship at sea, flight crews in an airplane, and truck drivers rolling down the highway.

OSHA requires that companies

provide safety and health training to its employees based upon their exposure to hazards. Exposure, or the expected likelihood of exposure, is the key to determining if safeguards are required to protect against work related hazards, and whether training in hazard recognition, safeguarding techniques, and use of special procedures or equipment is needed to protect the employee.

An employer’s required training subjects are derived from the company’s review and assessment of hazards for all aspects of company operations, from facilities, equipment, purchased products, materials used, work procedures, processes, finished products, by-products, and even exposures from independent contractors whose work can affect a company’s employees.

4. Effective Record Keeping

The employer must keep a record of all safety and health training, as records provide evidence of the employer’s

compliance with OSHA standards.

Documentation can also supply an answer to one of the first questions an accident investigator will ask: “Was the injured employee trained to do the job?”

Safety and health training is a required part of new employee orientations, and must also be done when current employees or contractors under the control of the company are newly assigned to a job where specific hazards exist. Safety and health training is also required when the hazards of an assigned job change. Additionally, some types of training require periodic updating.

5. OSHA Compliance Training ROI

Training in the proper performance of a job is time and money well spent and the employer will see a return on that investment. An effective program of safety and health training for workers can result in fewer injuries and illnesses, better morale, and lower insurance

Franchising USA

ex per t advice

Dale Haskin, OSHA Subject Matter Expert, Vivid Learning Systems

premiums. The rise of technology has significantly reduced training costs by allowing employers to leverage e-learning as a way to meet safety and health training requirements. Each day we see more and more training standards being redesigned to fit this new delivery platform.

The Case for E-Learning Once an employer’s training subjects have been identified, the next steps are to determine how to obtain the needed training materials and how to deliver them. An employer has two choices for acquiring the necessary training materials: develop or buy. Developing their own materials can be a very expensive proposition as it most likely entails hiring qualified personnel to create the materials and keep them updated.

If purchasing the materials is the preferred option, the employer must evaluate the adequacy of the materials from the various sources available.

The second consideration is the delivery method. Two of the more common delivery methods are instructor-led and online (aka e-learning). In both the develop or buy scenarios, an instructor-led delivery adds significant cost as either the employer must train staff to provide the training and pull them from their normal job tasks to perform the training, or they must hire expensive consultants to provide the training.

With the advent of computers and the Internet, e-learning has become the easy, flexible, and cost effective alternative for providing employee safety and health training. E-learning provides the following benefits over instructor-led training: • Saves money on consultants, travel, lodging, facility, printing, and time away from work.

• Minimizes disruption of the employer’s normal business activities • Reduces training time by up to 50 per cent • Allows learners to train at their own pace • Accessible at any time • Can be scheduled during intermittent periods of slack time

Franchising USA

• Accessible from any location with an Internet connection • Consistent delivery of content to all learners

E-learning, paired with a robust LMS, has proven to be a flexible, cost effective solution.

Dale Haskin

• Easy to modify when updates are needed

OSHA Subject Matter Expert

In addition, learning management systems (LMSs) used to deliver e-learning provide tracking and reporting features, streamlining administration and reducing the load on the training administrator. Many LMSs automate certain functions as well, moving employers beyond the labor-intensive, manual processes of the past. An LMS provides fast and easy accessibility to training records, which is particularly helpful when attempting to substantiate training compliance in the event of an inspection by federal or state compliance officers.

Vivid Learning Systems

Because of the great variety of training requirements and logistical problems, administering safety and health training has always constituted a major impediment for many employers. The is understandable when considering that different kinds of training are required to be delivered to employee groups of varying sizes, at various locations, and with restrictions on employees’ time and availability.

Over forty years experience in occupational health, industrial safety and environmental programs for national and international organizations in the manufacturing, construction, mining, Insurance, service, retail, transportation, education and governmental sectors, as well as the National Safety Council.

Responsibilities have included both management and consulting, encompassing formulation of EHS policy & procedures, safety research, EHS program development, implementation and management. Professional affiliations include the American Society of Safety Engineers (ASSE) and the International Society of Mine Safety Professionals (ISMSP).

Contact Details: Phone: 1-800-956-0333 Email: experts@learnatvivid.com Web: www.learnatvivid.com

Page 69

Thinking about )5$1&+,6,1*"

Think )UDQFKLVH RUJ

Franchise.org— the most comprehensive Web site on franchising.

Visit www.franchise.org today.

Whether you are considering buying a franchise or franchising your existing business, Franchise.org is your one-stop information source. You’ll find: •

Detailed information for over 1,100 franchises – all members of the International Franchise Association (IFA), representing most of the world’s best-known brands.

•

A complete list of advisors, including financial services experts, attorneys and consultants.

•

The most comprehensive library of franchising information available, ranging from basic “how-to’s” to advanced regulatory and legal aspects.

IFA: We know franchising.

Franchising USA

abou t f ra nchising

International Franchising Association

Is Franchising For You?

Visit almost any town in America today and on many streets you will find franchised businesses.

One of the reasons that many franchises have been so successful is that, in franchising, a business synergy is created.

Franchisees brought together under one trademark can achieve things that as individual business people they could not do. Group advertising, buying power and the sharing of ideas are some examples of what can happen.

While there are many examples of successful franchises, buying a franchise is no guarantee of success. Before buying a franchise, 10 important questions need to be carefully and thoughtfully answered:

1. Are you willing and able to take on the responsibilities of managing your own business?

Franchising USA

Some very careful self-analysis is important before buying a franchise.

Indeed, your personal house should be in good order. One of the myths that has been perpetuated is that franchise ownership is easy. This is just simply not true! While the franchise system will give the start-up training and offer ongoing support, you, the franchisee, must be prepared to manage the

Page 71

business. While some franchises may lend themselves to absentee ownership, most are best run by hands-on management. You must be willing to work harder than you have perhaps ever worked before. Forty-hour weeks are also a myth, particularly in the start-up phase of the business. It is more like 60-to-70-hour weeks. You must also be willing to mop floors, empty trash, fire as well as hire employees and deal with upset customers.

2. Will you enjoy the franchise?

Sometimes people buy a franchise they think will make them a lot of money, only to find later they do not enjoy the business. The adage, “know thyself,” certainly applies here. You should buy a franchise that centers in an area that you will enjoy for the next 10-15 years.

Determine your interests and types of businesses you might really enjoy.

Review the table of contents of this Guide. There you’ll find a listing of the types of franchises available today.

Place a check next to the ones that might be of interest to you. You can then turn to those categories and locate the franchise companies that meet your criteria.

3. Are you willing to completely follow the franchise system?

“The very key to franchising success is the consistency of product and service customers find.” other franchisees, your employees and your customers cannot be emphasized enough. A negative, critical franchise owner can be a detriment to the entire franchise system. You must have a track record of good relationships with employers, supervisors and fellow employees.

5. Can you afford the franchise?

One of the major causes of business failure is under capitalization. While the franchisor will be able to give you a good idea of the start-up costs, sometimes these will vary due to leasehold improvements needs and other valuables. You will need enough money to not only open your franchise, but to run it until such a time as it is profitable. For some franchises, that may take a year. Remember, it is better to start out with more money than you think you will need rather than less.

8. Are the franchisees generally happy and successful?

6. Have you carefully studied the legal documents?

The very key to franchising success is the consistency of product and service customers find from one franchise to another. When you display the sign and logo of a franchise, you are indicating to customers that you follow a particular system. People who are extremely entrepreneurial in the sense that they do not like to conform to a predetermined formula should be very careful about buying a franchise.

Franchisors are required to prepare a document called the franchise disclosure document. This document will give you pertinent information about the franchise. It will also contain the franchise agreement that you will sign. This agreement will govern your relationship (SECTION I ABOUT FRANCHISING) with the franchisor for the term of the contract.

The disclosure document is a vital document. It should be studied very carefully and discussed with your lawyer.

4. Do you have a history of success in dealing and interacting with people?

7. Does the franchise you are considering have a track record of success?

Many franchised businesses are based on people relations. Your ability to interact well with your franchisor,

profitable their franchise has been.

The disclosure document will contain this information. Have an accountant review the financial analysis of the franchise. Is it a solid company?

Also, examine how long the franchise has been in business. A new start-up franchise may offer you the opportunity to get in on the ground floor. But it might also mean that the franchisor has not had sufficient experience to fully develop the system.

You should get to know the principal directors of the company—their business background and how

The disclosure document will contain a listing of all of the franchise owners.

It would be worth your time to contact a number of them to discuss their experiences with the franchise. Has the franchisor followed through on commitments? Did the franchisees receive adequate training? Would they buy the franchise again? Is the business profitable? What advice would they give you?

9. Do you like the franchisor’s staff—those people with whom you will be working?

One of the most important elements of a franchise is the ongoing support and contact you will have with the franchisor. For this reason, you should feel comfortable with the people you will interact with for a number of years.

10. Do you have a support system?

Managing a franchise is a full time job.

It requires great sacrifices of personal and family time. For this reason, your friends and family should understand that you will have tremendous demands on your time.

For more information visit: Web: www.franchise.org

Franchising USA

one

Building success stories...

entrepreneur at a time.

Join the largest accounting WD[ IUDQFKLVH V\VWHP :H DUH ORRNLQJ IRU ÂżQDQFLDO DQG business pros to join our team Become a franchise owner with PADGETT BUSINESS SERVICES

LOOKING TO MAXIMIZE YOUR TALENTS?

As a Padgett Business services franchise owner, you’ll provide your local, small business clients with personDOL]HG SUR¿W ORVV VWDWHPHQWV JRYHUQPHQW UHSRUWLQJ and tax planning and preparation services. Padgett also specializes in payroll, business consulting and other services important to small businesses. And while you’re keeping clients focused, we’ll help your business grow with the tools, learning and support services you need to successfully reach your goals

WHAT WE OFFER ‡ ‡ ‡ ‡ ‡

A professional business-to-business opportunity Low investment - Low overhead - High margin industry Industry-leading marketing programs with proven results Year-round business cycle - Not a seasonal business An experienced management team, who themselves were som of Padgett’s most successful franchise owners

Take control of your career by becoming a Padgett Business Services franchise owner

Call us today at 877-729-8725 ext - 225 or visit us online at www.smallbizpros.com $FFRUGLQJ WR $FFRXQWLQJ 7RGD\ÂśV UDQNLQJ RI DFFRXQWLQJ ÂżUPV Franchising USA

Padgett is a VetFran participating company

Page 73

BRING OUR HOUSE TO YOURS SCORE BIG with Huddle House family restaurants have been serving communities for over 47 years and we are currently looking for qualified franchisees to grow with us in the Southeast, Midwest, Southwest and Mid-Atlantic regions. Development opportunities include freestanding, high visibility shopping center end caps, conversion of existing buildings, as well as co-branded hotels, motels, c-stores, truck stops and travel centers. In addition to new development opportunities, Huddle House has numerous opportunities available for re-franchising.

Our Advantages t /FX 3FTUBVSBOU %FTJHO t %JWFSTF .FOV t 4VQFSJPS 'SBODIJTF 4VQQPSU

t 4USPOH 7BMVF 1SPQPTJUJPO t "UUSBDUJWF $BQJUBM *OWFTUNFOU t 'MFYJCMF %FTJHO GPS 7BSJPVT 7FOVFT

Our Development Team stands ready to discuss your interest in single or multi-unit development. Ask about our Development Incentive Program, which includes a reduction of the initial franchise fee to $22,500 and a $5,000 Marketing Contribution from Huddle House to be used towards local store marketing to support the opening of your new restaurant.

To learn more, Please contact us at 800-868-5700 or visit our website at www.huddlehousefranchising.com

This ad is for information purposes only and is not an offer to sell or a solicitation to buy a Huddle House franchise. We offer franchises by prospectus onl

Š 2012 Huddle House, Inc

Franchising USA