Franchising usa T he ma g a z ine for franchisees
Franchising Insight
Issue 4 - feb 2013
$5.95 www.franchisingusamagazine.com
from
Dina Dw yer-Owens
Secrets of
Successful Site Selection Steps to Building
Loyal Clientele Franchise Marketing i n 2 013 LATEST NEWS
FINANCIAL ADVICE FROM THE BANKS
TOP LAWYERS’ ADVICE
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Franchising usa T he ma g a z ine for franchisees
FRANCHISING USA VOLUME 1, ISSUE 4 FEBRUARY 2013 publisher: Colin Bradbury. colinbradbury@shaw.ca
EDITOR: Christie Hall. christie_hall@shaw.ca
ASSISTANT EDITOR: Sydney Eurchuk. sydney.eurchuk@shaw.ca
SALES DIRECTOR: Vikki Bradbury. vikki.bradbury@shaw.ca
SENIOR SALES EXECUTIVE: Jenn Dean. jenndean@shaw.ca
DESIGN: Jejak Graphics. jejak@bigpond.com
COVER IMAGE: DINA DWYER-OWENS THE DWYER GROUP
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
from the
Editor A Passion for Franchising Do you remember as a kid when February brought with it the excitement of Valentine’s Day? Handmade paper cards, candy hearts, all that good stuff? I may have outgrown most of that (and by outgrown, what I really mean is, upped the expectation to include flowers, dinner, and chocolate… sparkly things are optional), but in this month filled with the fluff of commercialized romance, let’s take a moment to think about what it means to be truly passionate. I love talking to people who are passionate about what they do. Passionate people are infectious. When you talk to someone who is filled with passion and ambition, you can’t help but walk away holding onto a small piece of that. In my position as editor I have been fortunate to talk to so many interesting people who are passionate about their brand, and passionate about franchising. These people are exciting and inspiring. In every issue of Franchising USA, some of these passionate and driven
franchise experts take time to share their excitement and expertise with us in the form of our Expert Advice articles. I am so thankful for each and every one of our contributors who have been willing to share their knowledge with our readers. I have come to appreciate that franchising in America is not just an industry; it’s a community of people who share a common passion to succeed in their business, and to see others succeed. In this issue, we have articles that cover a range of topics, from 401K financing and lease location, to customer service and succession planning. For every stage of your franchising journey, you’ll find someone willing to share what they have learned. We are so fortunate to have these talented people on our team! Please think of this issue as our handmade paper Valentine. It may not come with candy hearts, but we have put a lot of passion into making it just for you. Christie Hall Editor
Phone: (202) 628-8000 Fax: (202) 628-0812 www.franchise.org
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
february 2013
On the Cover 56 Secrets to Successful Site Selection
10 Cover Story
The Dwyer Group: A Clear Choice in Franchise Selection
33
Steps to Building a Loyal Clientele Sarah Kulbatski, JT Corporation
26
Tim Miller, Location3 Media
20
Dale Willerton, The Lease Coach
62 Customer Service:
42 What 2013 Holds for Franchise Marketing
12
f ra nchising usa
Contents
In Every Issue 06 Franchising News Announcements from the industry 30 Women in Franchising Dina Dwyer-Owens, The Dwyer Group 33 Feature Article Business Services: An Industry With Promise 60 IFA December Jobs Report Mirrors Growth Sectors
for Franchising in 2013
68 Veterans in Franchising VetFran Partners with VA
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Expert Advice
42
12 Franchise Technology in the Digital Age Robyn Gault, Direct Capital Franchise Group 20 Insurance 101: Are 10% of the Drivers in 50% of the Accidents? Jim McFarlane, Lamb, Little & Co. 26 Do You Have the Drive for Success in Business? Randy Hnatko, Trainwest Management and Consulting 42 The Digital Marketing Brief: What 2013 Holds for Franchise Marketing Tim Miller, Location3 Media
20
50 Interested in Capital for a Business and Short on the Cash? Diane Rosenkrantz, Tenet Financial 56 Secrets to Successful Site Selection for Franchise Tenants Dale Willerton, The Lease Coach 62 Customer Service: Steps to Building a Loyal Clientele Sarah Kulbatski, JT Corporation 73 Business Succession Planning Ideas for Franchisees John Geenen, Waterfront Financial Group 76 The Fiscal Cliff and the Startup and Expansion of Franchise Businesses Steven A. Rosen, FranNet
38 Sandler Training
Profiled Franchises
54 Interface Financial Group
Brightway Insurance................ 24
Franchisee in Action
CPR Cell Phone Repair......... 40
16 Furniture Medic
ReBath................................................ 48
Franchise Focus
45 Wild Bird Centers Win Home Inspection............. 66
Franchisor in Depth 70 Clockwork Home Services Franchising USA
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what’s new! NFL and IFA Launch Franchising Boot Camp at Ross School of Business On December 11, The National Football League (NFL) and the International Franchise Association (IFA) announced a partnership to design the first-ever NFL Franchising Boot Camp, an intensive program for 20 current and former NFL players and their spouses who are interested in learning about the franchising industry. The NFL Franchising Boot Camp will take place April 26-29, 2013, at the Ross School of Business at the University of Michigan in Ann Arbor, which was named for Miami Dolphins Owner Stephen M. Ross. Over the four days, participants will hear firsthand from franchisees, franchisors, professors, former players and executives at the IFA on all aspects of franchising. Carolina Panthers Owner Jerry Richardson,
who spent more than three decades as a restaurant franchisee, will open the program as the keynote speaker.
Player Engagement Troy Vincent. “This
”As we continue to educate in postplaying experience career opportunities, we are excited to work with IFA and the Ross School of Business to offer the most comprehensive franchising education to our players,” said NFL Vice President of
providing hands-on experience to players
program builds upon the successes of our prior initiatives in educating and
in a wide variety of disciplines and has the added benefit of inviting players’ spouses.”
Contact: www.nfl.com
Agreement Paves Way for Ongoing Steady Franchise Growth in 2013 The International Franchise Association today applauded passage of H.R. 8, the American Taxpayer Relief Act of 2012, a bipartisan agreement to avert the fiscal cliff, prevent tax hikes on thousands of existing and prospective franchises, and make permanent most of the Bush-era tax cuts. “Averting the fiscal cliff and making current tax rates permanent for franchise business owners and prospective investors is critical to ensuring the positive growth forecast for the franchise industry in 2013 and for consumers across America,” said IFA President & CEO Steve Caldeira. While Caldeira applauded the bipartisan agreement to avert the fiscal cliff, he said, “This deal is not a substitute for the long-term fundamental fiscal reform our country so urgently needs:… a long-term plan to address America’s excessive spending, particularly entitlement spending and reducing the unsustainable debt that is choking and holding-back our economic recovery. Any future deal should also include comprehensive tax reform that addresses the complexity of the tax code for both corporations and individuals.”
Franchising USA
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Military Veterans Receive Entrepreneurial Boost with Signal 88 Security Military veterans with entrepreneurial dreams will have the chance to win start-up money to open their own business through Signal 88 Security’s new contest, Operation American Dream: From Battlefield to Boss. Through Operation American Dream, Signal 88 Security is providing veterans with the opportunity for success. Here’s how the contest works: From now through May 2013, veterans can submit a 500-word essay on why they want to open their own business. Submissions will be accepted via www.signal88.com/ OperationAmericanDream. At the end of each month, representatives
from Signal 88 Security will select three monthly finalists. The public will vote among those finalists for one monthly winner, who will receive a $500 semifinalist prize and become eligible for the Grand Prize: $5,000 in start-up money to start their business. The prize money doubles to $10,000 if the winning veteran chooses to open a Signal 88 Security franchise. In 2007 data from the U.S. Census Bureau – the most recent statistics available on the subject – veterans owned 2.4 million businesses, or nine percent of all businesses nationwide, generating $1.2 trillion in receipts and employing nearly 5.8 million people.
“Signal 88 Security is a top employer of military veterans,” said Reed Nyffeler, CEO and co-founder of Signal 88 Security. “Veterans possess many of the traits needed in entrepreneurism. Their leadership, teamwork and problemsolving skills are second-to-none, in my experience.” Contact: www.signal88.com
Woody’s Bar-B-Q Slims Down its Concept and Bulks Up its Reach With QSR Model National Franchise Chair Successfully Kicks Off Quick Service Restaurant Sales with Several New Restaurants Already Slated to Open Nationwide in Early 2013 National franchise chain Woody’s BarB-Q has raised the curtain on a new quick service restaurant model. Since its launch in 1980, the first Woody’s Bar-B-Q Express prototype has been tested with rave reviews from guests and prospective franchisees alike. Due to this initial success, the newly validated and refined Woody’s Bar-B-Q Express model is now available for franchise sales nationwide. The co-founder of Woody’s Bar-B-Q, Woody Mills is so committed to this next phase in the company’s growth
that he recently collaborated with VP of Franchise Development, Tra Williams to manage the company’s franchise sales and concept development. Future Express restaurants are already planned for Utah, Pennsylvania, Florida and Georgia in the first half of 2013, fueling expectations that the QSR model will soon eclipse the traditional Woody’s full-service restaurant. With 32 years and an equal number of locations to its credit, Woody’s has proven that it is wide open to the concept of change – with one exception. “What has drive Woody’s success all of these years is the distinctive flavor and unsurpassed quality of their food,” explains Williams. “No matter the size of the restaurant, that commitment will never change.”
Franchising USA
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what’s new! Curves Introduces New Weight Loss Program That Burns More Fat Than Diet Alone New Curves Complete Includes Exercise, Meal Plans, and Coaching – for as Low as $12.95 a Week and No Joining Fee “It’s really as simple as 1-2-3,” said Curves’ Registered Dietitian Nadia Rodman. “The Curves circuit gives you strength and cardio training to protect your muscles and burn fat, our proven nutrition plan is fully customizable to your lifestyle, and your Curves coach helps you set goals and reach them oneon-one. If you simply follow the plan you simply can’t help but lose.” Preliminary results of Curves members who participated in the program prior to its January public launch have been phenomenal. Findings indicate that nearly 100 percent of weight lost on Curves Complete is body fat, compared
to conventional diets in which weight lost typically includes up to 30 percent muscle tissue. “With the launch of the new Curves Complete program, Curves becomes the first and only company to offer women a complete weight loss solution – exercise, meal plans, and coaching – and for about the same price as other weight loss companies charge for diet alone,” said Mike Raymond, Vice President of Marketing at Curves. “This is an important step in the fight against the chronic obesity that plagues our society. Curves is proud to offer this revolutionary new weight loss program and make it accessible and affordable for millions of women.” Contact: www.curves.com
Pinot’s Palette: Amazing Growth in 2012 Rapidly Growing Paint and Sip Franchise Experiences Exponential Growth Pinot’s Palette, a national Paint and Sip franchise known for providing guests with an entertaining evening of art and wine, announced a successful year of growth in 2012 with the signing of 22 new franchise agreements and the opening of nine new studios. The agreements include growth in major metropolitan cities across the country in New York, Atlanta, San Francisco, California, and Phoenix. Pinot’s Palette also plan to open an additional 16 studios and sign more than 50 additional franchise agreements in the New Year. “It’s been a very exciting year for Pinot’s Palette and the Paint and Sip industry overall,” said Craig Ceccanti, chief executive officer, Pinot’s Palette. “We look forward to 2013 and continuing to develop a successful, national brand while bringing the magic of the Pinot’s Palette experience to consumers nationwide.” Contact: www.PinotsPalette.com
Franchising USA
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Jiffy Lube Named Entrepreneur’s #3 Top Franchise for 2013 Entrepreneur magazine ranked Jiffy Lube® International among the top three franchises for 2013 in its annual Franchise 500® listing. The magazine noted, “Even during the recession [Jiffy Lube] continued to expand, in part because it charges no franchisee fee for new service centers or for existing ones that convert to the Jiffy Lube brand. And, with the conversion of more than 100 Canadian units from four other brands, Jiffy Lube will soon be not only the largest quick-lube franchise in the U.S., but the largest in Canada, too.”
With more than 2,000 service centers throughout North America, Jiffy Lube serves over 22 million customers annually. Jiffy Lube is the largest system of franchised service centers in the fast lube industry, with approximately 250 entity groups owning from one to hundreds of locations. In addition to waiving franchise fees for conversions and new service centers, Jiffy Lube is offering qualified candidates a reduced royalty fee for the first two years of operation. Contact: www.franchise.jiffylube.com or call (800) 327-9532
“We are honored to be named as one of Entrepreneur’s top franchise organizations for 2013,” said Stu Crum, president of Jiffy Lube International. “A primary goal is to provide growth for Jiffy Lube franchisees and this recognition is proof of our commitment.”
Rainbow Academy’s Signature “Circle of Care” Philosophy Comes Full Circle New Jersey-Based Early Learning & Childcare Company Buoyed by Response from Parents and Franchisees Following the Destruction Left by Hurricane Sandy As residents of New Jersey struggle to settle back into the business of daily life following the destruction of Hurricane Sandy – a locally based childcare franchise company sings the praises of both its franchisees and the parents they serve. A Family of Early Learning Centers that boasts nearly 1800 children in its care through thirteen centers across New Jersey’s Bergen, Hunterdon, Middlesex, Morris, Monmouth and Union counties, Rainbow Academy was established on a simple “Circle of Care” philosophy. This founding belief holds that the happiness of its franchisees and teachers, the needs and wishes of its working parents, and the care and education of its children are interconnected and equally important components.
a warm place to sleep. The Rainbow Academy Foundation immediately began accepting and distributing donations to help victims of Hurricane Sandy. Within two weeks, the Foundation managed to raise more than $25,000. “What happened in the days and weeks following the storm has shown us that our “Circle of Care” is not only alive and well, but that it resonates on every level,” Falzarano said. Contact: www.RainbowAcademy.com
In the aftermath of Hurricane Sandy, The Rainbow Academy Foundation would be called upon in an entirely new way. Sadly, the company did learn that two Rainbow Academy staff members and 13 of its families had either lost their homes or were otherwise devastated by Hurricane Sandy. Falzarano, his corporate staff and franchisees jumped into action. In the days following the storm, Rainbow Academy franchisees who had heat and electricity at their centers opened their centers to families without power offering them free back-up care and even
Franchising USA
cover stroy
T he D w yer G roup
The Dwyer Group: A C lear C hoice in F ranchise S election match your own personal vision and values? • When you speak to current franchisees, are they happy with their choice?
Your Answer: The Dwyer Group
Buying a franchise is a big decision. Selecting which franchise is the right one for you is monumental. There are hundreds to choose from, each with their own set of pros and cons. Asking Questions There are a number of important questions you will want to ask when selecting your franchise, among them, the following: • Is there a market for the particular service? • What is the projected outlook for that market? • Does the franchise have strong brand recognition? • Is the franchise a good fit for your skills, interests, and lifestyle? • Does the franchisor provide a financing program? • What kind of initial and ongoing training is provided? • Does the franchisor have a proven system for success? • Do the vision and values of the company
Franchising USA
The Dwyer Group is a parent company of seven individual home services franchises: Mr. Rooter, Mr. Appliance, Aire Serv, Glass Doctor, The Grounds Guys, Mr. Electric, and Rainbow International. The benefit of a home services franchise is that there is always a market. Each of The Dwyer Group’s franchises provide a needed service, that is to say, a service that home-owners require regardless of the economy. For example, there will always be a need for a plumber. And if times are especially tough, folks are more likely to put the money they do have into improving their current home or repairing a broken appliance, than into a new home, or new appliances. This sets The Dwyer Group apart from many franchises that provide only discretionary products or services, and offers a stable source of business for franchisees. Rainbow International, the first of The Dwyer Group’s franchises, was started by Don Dwyer in 1981. Thirty years of history have made the franchises of The
Dwyer Group into household names. With over 1600 franchisees, The Dwyer Group provides effective brand recognition. In addition to the sheer volume of franchise locations, each franchisee and employee uses their vehicle as a mobile billboard, with a recognizable logo on each van and truck. The range of franchise possibilities in The Dwyer Group provide something for everyone, from grounds care to appliance repair. The Dwyer Group prepares their franchisees to handle real-life situations that will come up on a service call with training that is comprehensive and handson. For example, Rainbow International, a restoration and remediation company, has a simulated residential structure that they flood and fill with smoke so that trainees can experience the restoration process first hand. At the Glass Doctor training center, franchisees learn hands-on best practices for glass repair and replacement. Whatever their previous experience or career background, franchisees of The Dwyer Group are well-trained and wellprepared to serve their customers. Franchisees of The Dwyer Group speak often and enthusiastically about following the system. The Dwyer group has built integrated systems that tie together
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marketing, operations, management, and financials on a technology platform that creates a model for success. Having a proven system in place for franchisees gives them the tools they need to accomplish every task that will be required of them in their role. When you have an established system to follow, not only does it make your business more successful, but it gives you the ability to operate with ultimate efficiency. This leaves you more time for family, travel, and outside interests. You run the business. The business does not run you. The vision and values of The Dwyer Group are a huge part of what makes this company unique and special. As part of the proven system of success, The Dwyer Group’s franchise operators and employees agree to a multi-step established process for each service call and customer interaction. This provides a consistency in service excellence that customers have come to expect from anyone working in The Dwyer Group’s family of franchises. The company’s Code of Values infuses each franchisee’s and employee’s interactions with Respect, Integrity, Customer Focus, and Having fun in the process. Company chairwoman and CEO, Dina Dwyer-Owens, also featured on page 30 of this issue, speaks with passion and enthusiasm about the Code of Values in her book entitled “Living R.I.C.H.,” based on the acronym of the four parts of the Code of Values. Franchisees and employees share DwyerOwens’ passion for the Code of Values, and for the company culture and systems of The Dwyer Group.
“The Dwyer group has built integrated systems that tie together marketing, operations, management, and financials on a technology platform that creates a model for success.”
“When we walked in the door, we knew we were in the right place, with the right people.” Ray, Tina, and Ryan Bramble, Aire Serv franchisee. “It’s about achieving your personal and financial dreams for both ourselves as franchise owners, everyone we work with and for, and for our team members as well.” Derek and Maureen Paulk, The Grounds Guys franchisee. “Prepare to change your life. This is a career that’s beyond a career.” Gene Porter, Glass Doctor franchisee. For more information: Web: www.thedwyergroup.com www.leadingtheserviceindustry.com Phone: 1-866-696-1504
Franchising USA
ex per t advice
Robyn Gault, Vice President of Strategic Accounts, Direct Capital Franchise Group
Franchise Technology
i n t h e D i g i ta l A g e Now that 2013 is here, franchisees will need to work even harder in this challenging economy to effectively compete for a consumer that has dozens of options in the market and an evertightening wallet.
Franchising USA
By taking advantage of some of the great new technologies specifically designed to improve the customer experience and help businesses run smarter and more efficiently, franchisees will be able to make this year a profitable one.
Digital Menu Boards For quick service restaurant and fast casual franchises, digital menu boards are the way of the future. Imagine being able to make changes to the menus at all of your franchise locations with just a few
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of an item sold in one of the 12 restaurants where the system was being tested increased on a year over year basis when it was featured on digital signage. Add to this the ability to incorporate dynamic upsell messaging that could suggest that a customer add chips and a drink to a specific menu item and you’ve got something that could potentially be a huge financial boost for QSR and fast casual franchises. Digital menu boards could also mean greater brand consistency, as the boards also can be used to incorporate promotional messaging or to further drive home the brand’s core values. Even localized messaging for individual franchisees becomes a snap with these systems.
Mobile Optimization If the roughly $208 million in sales made online with mobile devices on Black Friday 2012 is any indication, those franchises without mobile optimized websites are really missing the boat.
simple strokes of the keyboard from an offsite location. How easy would it be to stop and start promotions instantly based on the time of day or season? Or change menu placement based on your current inventory? Gone are the days of expensive menu replacements when a product is nixed or when a new product line is added. The best part about these upgrades is they can directly generate new revenue. Representatives for International Dairy Queen told Restaurant News that more than 80 percent of the time, the quantity
In fact, a recent report from Blue Maumau disclosed that 43 percent of all consumers that used their mobile phones to book their hotel rooms were in their car at the time and 14 percent were in a Wi-Fi hotspot. Those are opportunities and dollars that would have been lost without a website properly optimized for mobile devices. This applies to other concepts as well. If you’ve ever used your phone to find a nearby restaurant in a new city then you know how important having an up to date listing on Google local or Yahoo! local can be to help new local customers find you on the road. Once you have those new customers’ attention through your online listings, it’s very possible to shorten the lines at your location during your busiest times by allowing your customers to place their
orders online or book an appointment with your sales staff with the click of a button. Not only are you giving your customers options and an added convenience, but you’re streamlining your operations as well. Just about any website can be found with a smart phone, but optimizing your website specifically for mobile devices will allow you to present an improved user experience, faster connectivity, and mobile specific features like a “click to call” button.
POS Systems Technology advances even extend as far as your franchise location’s point of sale systems. If you’re still using a cash register without a digital interface, you might as well be operating in the Stone Ages. Today’s point of sale systems have the ability to store and make use of all of the customer information you are already collecting daily like contact information or shopping habits. Now, you’re able to
Franchising USA
ex per t advice
Robyn Gault, Vice President of Strategic Accounts, Direct Capital Franchise Group
the technology you need right away and have those cash reserves free for other business expenses. Also, you’ll likely have predictable monthly payments, so you won’t have to worry about surprise costs. Finding a lender you can trust. When searching for a lender, look for one with a good grasp of the franchise industry. A lender who understands your business and has financed technology before will be an asset, and can help you avoid any unforeseen headaches caused by things you’ve overlooked.
“If you’re still using a cash register without a digital interface, you might as well be operating in the Stone Ages.” track your inventory automatically all in one place, eliminating time spent counting stock and manually inputting your results into an accounting system. You’d even be able to pull weekly or monthly inventory reports to know which products are moving and need to be replenished, and which products are getting stale on your shelves, as well as keep track of employee hours and individual employee sales statistics – making running sales promotions for your team a breeze.
Funding Your Technology But how do you decide which project or technology to add first? The answer is simple – look first to your franchisor’s recommendations and then to where you’d get the biggest bang for your buck. The biggest return will vary from franchise to franchise, so opt for what is best in your own situation. First, examine your biggest
Franchising USA
pain points. If you’re spending hours inputting your inventory numbers each week, then a new POS system could mean a tremendous savings in man power that could be better spent in other areas. But, if you’re looking for an edge in a highly competitive market, then a digital menu board might be a good choice. Though these new technologies will undoubtedly pay for themselves over time thanks to the operational efficiencies and sales they generate, the high initial cost of implementation can often be a hurdle. Financing vs. Cash Payment. Whether it’s needed for your own productivity or recommended by your franchisor, sometimes that new point of sale system or digital menu board just can’t wait. When time is of the essence, you can’t always wait for the funds to be available at your franchise. When you finance your technology, you’ll be able to get
Consider leasing as an option. Since the very nature of technology means that it is ever changing, one huge benefit of leasing, rather than a loan, is that you will not run the risk of getting stuck with obsolete technology down the line. With a lease agreement, the lessor will assume that risk, and you’ll be free to upgrade to the next and newest piece of technology at the end of your term. New technologies like Digital Menu Boards, mobile compatibility and POS systems will undoubtedly make 2013 a more productive year for many franchisees, allowing them to work smarter and more efficiently than ever before. With the help of qualified franchise lenders, like Direct Capital, I’m confident that this year will be a transformative one for our franchisee friends and partners. 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: Phone: 603-433-9476 Email: rgault@directcapital.com Web: www.directcapital.com
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f ra nchisee in action
Fu r niture M edic
Furniture Medic:
F u rnit u re R epair and R estoration “In the beginning it can be a fair amount of work. But as time goes on and you hire people, you find you’re able to do more and more of what you like doing. Then you’re working on your business rather than in your business.”
As one of the world’s largest furniture repair and restoration companies it’s no wonder why Chris Gilbert, a franchisee of the company, had so much positive insight to share with us about Furniture Medic and his experience as a franchisee. In the early 1990s Gilbert picked up an Entrepreneur Magazine. At the time he was working in the photography field, a field that had been changed considerably by technology. Many of his colleagues were losing work and Chris was looking for a longer lasting career that wouldn’t be so susceptible to technology: something that wasn’t going to “go out of fashion”. Prior to working as a photographer, Gilbert started out his adult life studying to become a Geologist. Up until entering the Furniture Medic franchise in 1993 Chris hadn’t done any work with wood. When asked if his previous jobs and studies had any skills that carried into Furniture Medic he commented, “One of the things you have to be fairly good at is working with your hands and enjoying it.
Franchising USA
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Although not too obvious, in photography, you are constantly working with your hands.” The training that Furniture Medic provides starts with a 50-hour “PreAcademy” home study period followed by an intensive “Two-Week Academy” where the franchisee is presented with a basic understanding of the business-side of owning a franchise and the technical side of furniture and wood repair and restoration. As Gilbert said, “You do not need any woodworking experience; Furniture Medic will train you in woodworking.” The support the home office supplies is based on technical training, marketing materials, and knowledge and support for marketing and sales. Gilbert shared, “In this day and age with the product development that’s taking place, and with marketing, social media, digital advertising, etc., there has been a lot of changes in how a business has to perform.” Furniture Medic has responded to these societal advances with an ongoing training program run through the home office with technical podcasts, weekly franchise emails, and new field program/ product updates. There’s on-going information regarding new developments in processes, accounts, marketing and technology that franchisees receive from the home office that are very valuable in regards to taking your Furniture Medic business to the next level of success.
From Small to Big In the beginning of ownership Gilbert worked mostly by himself or with one partner. Eventually over the years, he built up the business to where he now has 14 employees. “The majority of the franchisee owners are really owneroperator or small family-type businesses. Most people have their own business and may have one or two employees at the most or may have someone in their household helping out,” says Gilbert. From the time that Gilbert signed on to Furniture Medic, it was the commercial market that he resolved to hone in on because there was a big need for the services Furniture Medic offered within that market. During a recession or for anyone watching their budget, people try to make their dollar go further. What this meant to Chris, owning a Furniture Medic, was that more people would investigate fixing and restoring their furniture instead of purchasing new pieces. In Gilbert’s experience, “From a commercial standpoint, Furniture Medic can meet the goals for, say hotel standards, and they’re saving money because we can do that at a price point that is attractive, much more attractive than replacement furniture.” Because Gilbert has a commercial background in photography, he felt comfortable working in the market. When he landed bigger jobs that were far too
big for one person, Gilbert hired some additional help. His role quickly evolved to someone who was not only working but also a field supervisor: training these employees and managing their daily tasks. For the first couple of years Gilbert found there was a sizable amount of work because as a business that often starts off small and grows, the owner wears many different hats. Gilbert remembers periods of time where he would spend eight to ten hours on the field then go home to contribute additional hours towards marketing, accounting, buying product and all the other tasks that kept his business going. While he can still remember those days, they are now in the past and his quality of life and career satisfaction is strong. Gilbert shares, “In the beginning it can be a fair amount of work. But as time goes on and you hire people, you find you’re able to do more and more of what you like doing. Then you’re working on your business rather than in your business.”
A Big Fish in a Small Pond In Gilbert’s experience owning a Furniture Medic in the San Francisco area, another huge appeal to this business is that there isn’t a great deal of competition for the services Furniture Medic provides. “A lot of potential customers, and even existing customers don’t know about what we can do. It’s not something like carpet cleaning
Franchising USA
f ra nchisee in action
Fu r niture M edic
where someone comes in and cleans your carpets every six months; furniture doesn’t generally need refreshers constantly. It’s a three to five year cycle.” Gilbert believes Furniture Medic is filling a need, a need that there’s not a lot of competition for; “There aren’t many companies that will have all your needs at a reasonable cost like Furniture Medic does.” So what exactly does Furniture Medic do? Furniture Medic specializes in furniture and wood repair for antiques, specialty items, millwork, paneling, doors and banisters, cabinetry and mantels, hardwood floors, and upholstery. They also do cabinet refacing, furniture structural repair and stabilization, precision repair of wood and laminate surfaces, refinishing and polishing and color matching. A huge draw as Gilbert said, is the diversity of services they offer. The fact that most of these
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repairs can be done on-site is also a huge appeal. These services can be applied to residential, hotel, moving company and office contracts within virtually any city across the nation. Another unusual market Gilbert filled us in on is the disaster restoration market. All of these services are needed when floods, fires and other natural disasters plague a home or population of properties.
Final Thoughts One learning curve relevant to all businesses that Gilbert encountered was being presented with a business offer that was bigger than what he had been used to. Gilbert advised business owners to be cautious not to attempt to take on too big a job as you’re growing your business, “It can stretch your resources, it can play havoc with your cash flow and it can take away some of your everyday business
because you’re fully committed to that project.” While it’s clear that Gilbert took many risks and has successfully grown his Furniture Medic business, he advises entrepreneurs to take calculated risks and grow gradually. When asked if Gilbert had any final thoughts about his experience in Furniture Medic what stood out for him was how this franchise model can assume both an owner-operator model and a larger business. An owner-operator can make a nice income and experience a comfortable lifestyle. Or, if you are driven towards growth, you can build this business into a much larger business and have a good team of players that can really make your business stand apart. This business model and service works well for both. For more information: Web:
www.furnituremedic.com
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ex per t advice
Jim McFarlane, Lamb, Little & Co.
I ns u rance 1 0 1 :
Are 10 % Of The Drivers in 50% Of The Accidents? “The four biggest risk factors are: inexperience, impatience, inattentive driving and driver aggression.” Your wife’s cousin Al works cheap and is good with customers, but he refuses to use a hands free headset when he talks on his cell phone while driving….. John is only 20 years old but is mature for his age and you suspect he will catch on quick….. Mary is incredibly motivated so she drives excessively fast to cover 2X the territory others might.
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As an employer, you have many decisions to make, including who you hire to drive your company owned vehicles, but we encourage you to stop for a moment and recognize that every driver has their flaws. Can these flaws lead to your insurance premiums becoming inflated? Or worse, your operation becoming uninsurable altogether? Several problems can appear if you don’t have a company fleet safety program in place. Accidents can occur causing the insurance to non-renew, or rates to go up dramatically. A service vehicle layed up in the shop while the vehicle is being repaired or the claim investigated causes a shortage of required vehicles to run the business. The employee is injured, off work and your short staffed. The employee injury is also a workers’ compensation claim. This will most
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likely result in the workers’ compensation premium increasing at the renewal. The company service schedule is disrupted. The company reputation might be tarnished. These are some of the reasons why it’s necessary to have a company fleet safety program in place. Some of the questions on most auto insurance applications are about the driver hiring process, the driver training program, the safety program and the drug and alcohol testing programs that are in place. There should be a written manual and a safety coordinator. This is usually the owner for most mid size and smaller companies. This person, with the help of their insurance agent, can create the manual. The Federal Motor Carrier Safety Administration (FMCSA), is a good reference for putting the manual together. A few agencies have access to Zywave services that have an abundant library of materials for this. It’s important that the company establishes a driver selection program to hire the best, most qualified drivers.
Make a Plan Before the hiring process begins, realistic driver qualifications should be made. Most insurance companies want drivers to be a minimum age and have experience. This usually ranges from 21-25 age and 2-3 years experience minimums. The job description includes experience and skill level. The mental and physical requirements such as vision, hearing and substance abuse should be outlined. The position requirements such as; education, prior training, driving experience and skill level need to be known. For positions where driving is the majority of the
employee’s hours it is not uncommon to ask the applicant to come into the interview with a current motor vehicle report (MVR). This can be obtained at the local DMV. Those not wanting to do this may not be that interested in the position or have an adverse driving record. The safety coordinator should have a folder with all of the driver’s MVRs and license copies.
Set Expectations Establish what violations are not acceptable by the insurance company and by your company.
When soliciting a position, clarify the minimum requirements. The employment app should ask for all of the needed information including references and past experience. During the face to face interview, ask about the details that appear on the license and if they’re accident related and accident details. Ask if they have ever worked for an employer with a safety award program. Some companies have implemented monthly $25 gift card driver safety rewards have cut down incidents. Obtain from the applicant written approval to reference check and then do so. The FMCSA believes there is a direct correlation between “job hoppers”
Franchising USA
ex per t advice
Jim McFarlane, Lamb, Little & Co.
biggest risk factors are: inexperience, impatience, inattentive driving and driver aggression. After hiring the employee they should be familiarized with the vehicle and equipment, route and duties. The first day the employee should be the passenger and be learning routes, parking locations and time management issues. The first step in accident prevention is creating and implementing a company fleet safety program.
and accidents, which is another reason to
risk factors associated with the high risk
While most drivers are conscientious and
that indicated 10 percent of the drivers
risk can be reduced by recognizing the
percent of the crash incidents. The four
have a strong hiring program in place.
safe, there are “high risk� drivers. Crash
drivers. The FMCSA reported a survey were associated with MORE than 50
There should be safety meetings regularly scheduled. A meeting should be devoted to one subject, as the literature shows that safety meetings are more effective when one topic is covered at length as opposed to top level discussions about many topics. Choose the a la carte menu not the buffet when having safety meetings. For example, spend 20 minutes discussing distracted driving. Employees should be made aware of the company disciplinary action for cell phone use while driving. Seat belts should be a continual reminder. A good program will include consequences for drivers with MVR activity or incidents. Jim McFarlane, after earning a Master’s Degree in business, was on the claims side of the insurance industry as a regional property claims analyst, trainer and claims auditor for 7 years. Jim has been helping his clients from various industries put together coverage rich and competitive insurance programs. Jim has a specialty in auto related risks. For more information: Phone: 847-230-3218 Web: www.lamblittle.com
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BUILD ON THE
LEADERSHIP
OF SANDLER TRAINING
RATED THE #1 TRAINING FRANCHISE
BY ENTREPRENEUR MAGAZINE
FOR 10 YEARS INCLUDING 2012
Sandler Training is a global network of sales and management trainers with hundreds of training centers throughout the world. Become a Franchise Owner and be at the forefront of a business niche that is growing exponentially, with the support of a pioneer and leader in the training industry.
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Insurance:
A Recession-Proof industry, with a product everyone needs. Imagine owning a franchise in an
industry with guaranteed customer demand and residual income. What if this
franchise offered multiple products that were essential in every consumer’s household? A locally owned insurance agency supported by a national franchise strategy from Brightway offers all of this. Most entrepreneurs do not realize they have access to ownership opportunities in the insurance agency industry. No prior industry experience is required. In the world of franchise ownership, there is truly no other value proposition that compares to Brightway.
Insurance has not traditionally been part of the franchising world, but the owners of Brightway Insurance saw an opportunity to reinvent the industry. In 2003, brothers David and Michael Miller purchased an independent insurance agency and opened a single office location with three employees. Founders: David and Michael Miller
Since their first franchise opened in 2007, Brightway has expanded to more than 110 franchise locations and more than 600 employees. The compelling growth of Brightway store locations and the individual success of these locations are based on a number of factors. Among them are industry-leading technologies, access to top-rated insurance product offerings, and a business model centered on franchisee and customer support. Franchising USA
The template for Brightway franchise locations separates them from the rest of the pack. Brightway’s system is a model that allows franchise owners and their staff to spend their time selling, building client relationships and maximizing profit. A centralized service center at Brightway’s corporate headquarters frees agency owners from the distractions facing their competitors. All accounting, customer service, and administrative duties are handled in a paperless management system behind the scenes. This enables the franchise locations to drive new business sales. In addition to back office support and technology, franchise owners are equipped with employee training, marketing assistance, and a wide variety of top-rated insurance products. Brightway has partnerships with more than 100 top insurance carriers, including nationally recognized brands. These partnerships allow agency owners to compete with top companies in the home and auto insurance marketplace, as well as provide business and life insurance options. Brightway has the blueprint, foundation and support for an insurance franchise owner to experience success. The abundance of resources available to owners makes this franchise a turnkey opportunity. With Brightway’s model, franchisees have the option of running the daily operations of their offices or they can appoint trusted staff to run the business after it has been launched. One common attribute among many Brightway owners is the drive and desire to succeed. The Brightway business model is set up to support each owner’s success. More than 90 percent of the franchisees that have ever opened a Brightway Insurance store are still in business today. The company plans to add 50 new locations in 2013.
Insurance is an important consumer product in high demand. This unique business model
allows for entry into the industry with all of the necessary tools and resources. Brightway franchise owners are positioned to earn significant income and enjoy the satisfaction of building a viable business for years to come.
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“#1 Insurance Agency Franchise” - Entrepreneur Magazine 2013 Franchise 500
“Fastest growing, privately-held companies in the country” Five years running - INC 5000
“Top 100 Agencies” - Insurance Journal
Invest in an industry with constant demand. Everyone needs insurance. Brightway’s business model provides franchise owners with continuous support, industry-leading technology and top-rated insurance products to be a competing force in the marketplace.
Call us today to learn more about our franchise opportunities!
877-893-1824
t Comprehensive training and sales support t Corporate service center performs all franchisees’ accounting, administrative and service work t Over 110 franchise stores open nationwide and growing
www.brightwaydifference.com
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ex per t advice
Randy Hnatko, President/CEO, Trainwest Management and Consulting
D o yo u have T he D rive for
Success in Business?
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Page 27
“Your strategy will proactively shape how you conduct business through a consistent approach for making decisions along the way. Successful management is a combination of good strategy and good execution.”
One of the American dreams is the desire to own your own business and be your own boss. Whether it is through a franchise format or a self-created one, these budding entrepreneurs have the expectation that being their own boss will give them the financial freedom to do what they want in life. Every year, a substantial amount of people start their own business, yet many fail. Without a doubt, most of the causes of these failures can be found within company management by either misunderstanding the market, diversifying into unrelated areas of business, misunderstanding relationships between suppliers and customers, lack of skills and experience or know-how of principles. There have been many statistics published
indicating that the majority of start-up companies will fail within the first three years of operation. There are a lot of people who want to be entrepreneurs, but they are not willing to put in the time or effort it requires to be successful. Most entrepreneurs who I know that are very successful, worked tireless hours in their business, and take home almost zero for a salary until the company is self-sustaining. They eat, sleep and breathe their business. Growing their business was the only thing that mattered. If you are not prepared to truly commit to your business, then you will not succeed. Johann Wolfgang von Goethe, a German painter and author said, “Until one is committed, there is hesitance…there is one elementary truth… that the moment one definitely commits one self, providence moves too. All sorts of things occur to help one that never would have otherwise occurred”.
First Steps To be successful in starting a business, you must first build a successful relationship with yourself. This means you must first condition your thinking to have the proper Attitudes and Beliefs of being an entrepreneur. Once this is done, only then will you exhibit the proper behaviors required to succeed. Throughout my entire business career, I spent a substantial amount of time applying the universal law of “Cause and Effect” to running my businesses. This law basically says that for every effect or for everything that happens, there is always a corresponding cause
preceding it without exception. If we apply this to a successful entrepreneur’s mind set, it would be represented as follows: their programming create their beliefs which create their attitudes which create their feelings which determine their actions and behaviors which in turn create their results. So in order to create a successful business the entrepreneur must first program their belief system to have their subconscious truly believe they are an entrepreneur. If you want to start a business but your belief system is holding you back, you must first change your beliefs. How? You must rewrite your new beliefs on top of the old. Just like erasing an old outdated program file on your hard drive and replacing it with a new updated version. Your subconscious mind believes what you put in to it. Once it is there it takes it as fact. Henry Ford once said; “If you think you can or you think you can’t, you’re right.” People believe they are entrepreneurs, but their internal programming says otherwise. We are all subject to pressures of time. In fact it is the only asset we all wished we had more of. There is only so much time available to us, 24 hours in a day, 168 hours in a week and 8,736 hours in a year. Having an attitude of gradual, continuous and never-ending improvement-widely known in the business world by the Japanese term, ‘kaizen’-is a must, with a focus on doing even the little things better and better each time and achieving higher standards.
Franchising USA
ex per t advice
Randy Hnatko, President/CEO, Trainwest Management and Consulting
Ten Characteristics for Success People who start their own business are purpose driven. They are fully committed and passionate to succeed. They don’t give up when it gets tough, and believe me it will get tough. They persevere through the hard times. We all have a choice in life. We can be a champion in what we do or we can be a judge, having opinions about what others should do. If you believe that starting a business is what you want to do, then you must have the mindset of a champion. In my 30 plus years in business I have come to the realization that there are ten characteristics that successful entrepreneurs or champions portray. First they have a game plan. Like a professional sports team, you need a game plan when starting a business, mapping out where you want to go. This type of
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business strategy will be the key in driving your success. Your game plan will involve positioning your venture within a chosen market and determining how you will compete by both pleasing your clients and, at the same time, achieving successful business performance. Your strategy will proactively shape how you conduct business through a consistent approach for making decisions along the way. Successful management is a combination of good strategy and good execution. Your plan is a way to think about the future of a venture, where it needs to go, how fast, how to get there, what to do along the way and how you will be managing risk and change. A pilot will not fly a plane without first filing a flight plan. Why would you start a business without first filing your flight plan? In today’s market
condition it is critical that you have a good down to earth plan that is realistic. I have seen businesses fail for many reasons. The top five in my opinion are: wrong emphasis, lack of commitment on the owner’s part, performance expectations not realistic, goals not clearly defined, and ego. Second, you must be driven by intense commitment and determined perseverance. As I mentioned earlier, you must eat, sleep and breathe your business. Third you will strive for integrity. Fourth you will apply kaizen to everything. Fifth you must see failure as a positive. No successful entrepreneur did everything correct. Failure is part of growth. Albert Einstein, for instance, didn’t speak until
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the age of four and did not read until seven. His teachers labelled him as “slow and mentally handicapped” yet he won the Nobel Prize in physics. One belief I have, and I am forever grateful for my father for teaching me this, is that people are entitled to their opinions no matter how wrong they are in your mind. Sixth, entrepreneurs know that they don’t have to be perfect, but they must be able to communicate their vision effectively. Seventh, they are opportunity driven. Chaos is healthy. Eighth, they have a desire to win. Ninth, they see the world as half full. Tenth, they believe they can make a change in others’ lives. The following are some of the basic fundamental steps, in my opinion, which are required to establish a successful business practice:
1. Form your strategic vision.
Far too often, people who want to start a business spend little or no time deciding where they want to go in the business world and determining the future makeup of their company. You must decide on a vision, a direction where you want the company to be headed and a particular type of business you really want to be in. These are all keys to establishing your company.
2. Set specific objectives with expected outcomes.
If you only set ‘ho hum’ objectives, you will get ‘ho hum’ results. Setting specific objectives means outlining a vision for your business with expected outcomes. These benchmarks and key performance indicators (KPIs) should include both strategic and financial objectives, among others.
developing budgets, setting policies and procedures, hiring the proper team of employees when required and, most of all, implementing the strategy in ways that are consistent with your values and beliefs. As you go, so goes your company.
3. Create a strategy to achieve those outcomes. Next, you need to determine what type of business to build. You might create a business of your own or you may choose a model that is already well-established such as a franchise. You will have to choose a market area that can be covered effectively, along with specific ways to target prospects, and you need to know what your true competitive advantage will be. That said, while your strategy will reflect such choices and a commitment to particular approaches, markets, services and products, it must also be a dynamic and adaptive strategy. The world of business is constantly changing, so if you do not change with it, you will become extinct. You are either growing or dying, there is no status quo.
4. Implement the strategy.
You need to assess what steps it will take to make the strategy work and to reach the performance schedule targets you have set for yourself. You must plan and build an organization capable of carrying out the strategy by
5. Evaluate performance.
Next comes the daily and weekly process of evaluating your own performance and initiating corrective actions wherever needed. Reflecting on your progress is a necessary process in achieving your vision.
If you want to start your own business, you must be committed to make it work. This requires determination and persistence. At the same time, you must not be willing to accept anything less than perfection. Randy Hnatko, President of Trainwest Management and Consulting in Vancouver, B.C., is a trainer, speaker, author and consultant to domestic and international companies. For more information: E-mail: trainwest@sandler.com Web: www.trainwest.ca
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women in f ra nchising
D ina D wyer - O wens :
Having fun in the process “My dad taught me so much about business and about life. He always told me I was a winner, and that I could do whatever I set my mind to do. And then he gave me the tools to do it.” Dina Dwyer-Owens, chairwoman and CEO of The Dwyer Group reflects on her father’s legacy, and on the task now before her. She confidently leads the company that Don Dwyer began building over thirty years ago, a company that has grown from one franchise to seven, and consistently plays a key role in the franchising industry.
A Shared Legacy Don Dwyer started Rainbow International, a carpet cleaning and dying business, in 1981. As someone who grew up during the depression of the thirties, he knew the importance of hard work, and it is a value that he passed down to his children. The Dwyer Group was very much a family business, with each of Dina DwyerOwens’ siblings helping out where they could from the time they were twelve
Franchising USA
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“The overwhelming task of heading up a company of this size is made manageable by Dina Dwyer-Owens’ commitment to the Code of Values that filters down from the top levels of The Dwyer Group through each and every business relationship and service call.” or thirteen. Straight out of high school Dwyer-Owens began full time work with the company, and soon took on key leadership roles, managing the real estate division, working in franchise sales, and eventually working her way up to vice president of operations. Don Dwyer passed away in 1994 at only 60 years of age. Dwyer-Owens took over in 1999 after years as executive vice president and continues to operate it according the values and ethics that were so important to her father. Dwyer-Owens and the leadership team operationalized the Code of Values and carried on a way of doing business that was fuelled by Don Dwyer’s passion for franchising, and his concern and compassion for people. It’s difficult to talk about Dina DwyerOwens without making reference to her father Don. While she recognizes the fear that accompanies trying to fill her father’s shoes, she is also thrilled to be living his passion and expanding on the work that he began. “I’ve worked hard to be in this role,” she explains. Dwyer-Owens doesn’t have to prove anything. Her hard work and dedication to The Dwyer Group is evidence of her ability to handle anything that the business world, the economy, or the many demands of the position can put in her path.
Today The Dwyer Group is the parent company of seven successful home service brands: Mr. Rooter, Mr. Appliance, Aire Serv, Glass Doctor, The Grounds Guys, Mr. Electric, and Rainbow International, where it all began. With approximately 1600 franchisees world-wide, The Dwyer Group includes a franchise family of franchisees, master licensees and their franchisees, and their service professionals who complete an astounding 2 million service calls per year. According to Dina Dwyer-Owens, The Dwyer Group continues to grow at a consistent rate. “We added 215 new franchisees in 2012,” she says, “And we’re projecting over 250 additional new franchisees for 2013.”
and the values included in each. Across a company of this size, having standard practices of this nature provides a cohesiveness and consistency that is paramount to The Dwyer Group’s success.
Living R.I.C.H.
Giving Back
The overwhelming task of heading up a company of this size is made manageable by Dina Dwyer-Owens’ commitment to the Code of Values that filters down from the top levels of The Dwyer Group through each and every business relationship and service call. Following four key themes of Respect, Integrity, Customer Focus, and Having Fun in the Process, The Code of Values is the foundation of The Dwyer Group’s corporate culture. Each franchisee and associate agrees to operate according to these four principles
As a way of staying in touch with franchisees and service professionals and also ensuring that the Code of Values was making it right to the front lines, Dwyer-Owens took part in an episode of the Emmy award-winning CBS show “Undercover Boss,” in which CEOs go undercover and work as employees in their own company. The experience was enlightening for Dwyer-Owens, as it gave her a first-hand look at some areas of the company that needed attention, and also provided the opportunity to meet some of
The Dwyer Group Code of Values is not just something on paper. It is at the heart of everything that Dina DwyerOwens believes in and holds as truth. She cites ethics in business and in life as the foundation to true happiness. She refers to living the Code of Values as “Living R.I.C.H.,” not only the acronym of the Code of Values, but also the title of her book, which outlines “How to build success in your company and your life with a proven Code of Values.”
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women in f ra nchising
and more than 4,000 veterans across the country who have been awarded a franchise. More recently Dina Dwyer-Owens announced the Public Protectors Franchise Advantage Program (PPFA), offering a 20% discount from the base franchise fee for any current or former full-time law enforcement professional or professional firefighter with a minimum of two years of service. Dina Dwyer-Owens also served as chairwoman of the International Franchise Association (IFA) in 2010, and has been an advocate for small business and franchising throughout her career. the incredible people working with The Dwyer Group service brands. After a grueling day in 100 degree heat alongside an employee trainer with The Grounds Guys, Dwyer-Owens commented, “I have a whole new level of respect for the employees and the work they put into this.” One of the outcomes of the “Undercover Boss” experience was the launch of the Women in Trades initiative, to promote the employment of women in trade careers, and to award scholarships for the upgrading of skills for women already working in the trades. Contributing to the franchising community in this way is not something new for The Dwyer Group, or for Dina Dwyer-Owens. The Dwyer Group established the Veterans Transition Franchise Initiative (VetFran) in 1991, offering its best financial discount to military veterans wanting to own a franchise among its service brands. The program was re-implemented in 2001 by Dwyer-Owens and the International Franchise Association, and today boasts more than 500 participating franchisors
Franchising USA
Although heading up The Dwyer Group is a demanding role, Dwyer-Owens balances those demands by staying connected to her faith, her family and her local community. Making time to connect with herself and others on a spiritual level and through giving back to the community is important to Dwyer-Owens, another of the values passed on to her by her father. As a wife, and mother of two children, Dwyer-Owens wears a number of different hats on any given day. While that may not always be effortless, Dina Dwyer-Owens is successful in every area -- proof of the importance of living by a code of values, and of having fun in the process. There is no question that Don Dwyer would be incredibly proud to see his legacy honored each and every day in Dwyer-Owens’ life, and in The Dwyer Group. For more information: Web: www.thedwyergroup.com www.leadingtheserviceindustry.com www.dinadwyerowens.com Phone: 1-866-696-1504
Business Services
an industry with promise
Franchising USA
feature
Page 33
feature “Businesses demand various services to enhance their operations which is why regardless of our economic trends, the business service industry will always be needed.�
In 2008, business establishments with less than 19 employees accounted for over five million small businesses. With this figure continuing to grow, the need for Business Services increases in turn. Therefore, individuals interested in becoming a franchisee have a strong gravitational attraction to franchises in this field. Businesses will forever require services that contribute to the improvement of their company or the daily executions that ensure their company is running to the best of its ability. This is where the business service industry comes running to the rescue. With a range of subcategories that include, but are not limited to, marketing & advertisement services, financial services, logistics, consulting companies, staffing companies and security services, there is a wide range of industries for an individual to break in to. As is standard in many franchises, some of these industries provide all the training you require with your franchise fees. In other cases, these industries require or advise that you have related experience. For example, most financial service franchises desire a franchisee have previous experience in accounting, company management, and/or entrepreneurship to buy into their brand. Becoming a franchisee in the business service industry can be an excellent way for an individual with prior experience
Franchising USA
Page 35
to progress into ownership of a business while still being able to utilize previous work experience. This article will examine a number of business service industries by honing in on some specific franchise companies to look at what a franchisor is looking for in a franchisee, in addition to delving beneath the surface in order to understand what each industry entails.
Marketing & Advertisement Services There’s an extensive array of marketing and advertisement services in today’s technology-driven climate. The main objective of each of these companies is to increase the sales of their client company by contributing to the gain of new customers as well as keeping the existing customers. FASTSIGNS is one franchise that is dedicated to just that. As their mission statement says, “Our goal is to work with you to provide the right communications solutions to meet your business challenges and help your company realize its full potential.” FASTSIGNS has a large list of services including banners, building signs, and vehicle graphics. FASTSIGNS isn’t looking for a franchisee with previous sign production experience, rather an individual with sales, marketing and possibly an operations background. There is plenty of training provided for all the rest: four weeks of initial New Owner Training; two weeks of on-site Grand Opening Training; and, an extensive first year marketing strategy developed specifically for your market.
Financial Services Financial Services encompass all banking services, securities and insurance. Padgett Business Services is a franchise that instantly has competitive edge because of the extensive range of services it offers: tax planning and preparation; government compliance; small business advice; payroll services; and, financial services. Padgett, featured on National Business Employment Weekly’s “Recommended Buys List”, does look for existing business expertise. Many of their franchise owners came from financially-oriented careers. Padgett provides franchisees with a solid and stable platform to build from; their extensive knowledge of the market; their brand (instant credibility); proprietary tools and systems; training; and, support. Many Financial Service franchises will require the franchisee have some financial background. Liberty Tax Service however, does not. They are exclusively an income tax service and their franchisees do not need to have any tax experience prior to ownership. This seasonal work force provides each franchisee with a weeklong training session at their corporate
headquarters. Proceeding that training, Liberty Tax Service provides technical and tax support and one-on-one support from CEO John Hewitt.
Logistics A huge market in Business Service Logistics companies is a business owners’ shipping needs. Unishippers is one such business. They partner with major shipping suppliers and resell their services to small and medium-sized businesses who then benefit from negotiated discounts. Unishippers provides hands-on intensive sales training, followed by a consultant visit to your office, providing one-on-one coaching and support to help you build and refine your sales skills. The shipping franchises are another avenue that often require no previous experience in the industry. At the least, proving to be a self-motivated individual with sales experience will be sufficient. A desirable feature of this industry is that regardless of a fluctuating economy, businesses will always need shipping services.
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feature Consulting Companies When businesses are in need of some expertise: professional, scientific, technical, or management and strategy, they seek out consulting companies for assistance. The Growth Coach helps small business owners, entrepreneurs, self-employed professionals, executives, managers and sales teams gain greater focus and leverage so they can work less, earn more, and enjoy richer lives. When they consider a potential franchisee, they are looking for someone with a passion to help others, the desire to succeed, and, ideally, someone with five years of sales, marketing, management or professional services experience. The Growth Coach provides franchisees with one week of on-site training to learn every phase of the business (Grand Opening, marketing your business, working with different client types, and referral sources). Access to information is on-going with their
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intranet, where owners collaborate and share valuable insight and webinars. Each franchisee is also offered a number of predeveloped website designs, PR programs, newsletter templates, iPhone apps, and other marketing tools.
Staffing Companies Staffing Companies match people seeking jobs with companies seeking qualified employees. Currently, staffing industry sales are at $105 billion in sales annually and predicted to grow to more than $164 billion in North America by 2018. Express Employment Professionals is a staffing franchise that is 100 percent franchised so you won’t be competing against corporate-owned locations in your protected territory. This franchise asks that their franchisees have a minimum net worth of $200, 000 to be considered. Once a franchisee, you receive operation expertise, the Express Employment
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business model and systems that will allow you to focus on the fundamentals of your business. Their company services include an HR Hotline; employee handbook creation; job training and development; affirmative action plan creation; eFeedback; direct hire; temporary and contract staffing; and, on-site services.
Security Services Almost every small, medium and large business uses a service to ensure their assets secure. Signal 88 Security was ranked eighth by Entrepreneur magazine’s New Franchise Concepts. It’s no wonder why. They’ve developed a modern system with savvy software products and a management structure built to address the needs of today’s customers. Their team includes former police officers, sheriffs, military personnel, and former Government contracted Security Specialists. Signal 88 looks for motivated individuals who possess strong written and verbal communication skills and a drive to succeed at owning and operating a security franchise. They provide an initial training to familiarize you with Signal 88’s software tools, philosophy, standard operating procedures, and market training that focuses on operations, sales and marketing, and administration.
Is The Business Service Industry Right for You? All businesses demand various services to enhance their operations which is why regardless of our economic trends, the business service industry will always be needed. The U.S. business services market involves roughly 34, 000 outfits,
which generate a yearly revenue of close
to $580 billion. Having a service versus a
BUSINESS SERVICES
product means that as a business service
FEATURED IN THIS ISSUE:
out there in need of your services rather
ACFN - The ATM Network..............2
owner, you will always have someone than constantly wondering if a new
superior product will suddenly replace
yours. It is key a company possesses the
Brightway Insurance........................ 24
marketing platform, and the ability to
CPR – Cell Phone Repair. ............ 40
in mind, happy franchise hunt!
Furniture Medic. ................................. 16
Sources:
Interface Financial Group......19, 54
appropriate mix of services, an effective
grow membership. Keeping these things
Statistics of U.S. Businesses, U.S. Department of Commerce
www.globaledge.msu.edu/Industries/ Business-Services
The Bureau of Labor Statistics http://www.smallbizpros.com/market.php
Padgett................................................... 15 ReBath.................................................... 48 Sandler Training.......................... 23, 38
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f ra nchise focus
S andler T rainin g :
Take Charge of Your Future “I came out of corporate America and bought a Sandler franchise because I wanted to control my destiny and have influence over my income and my lifestyle,” says Mark McGraw, Sandler Training Franchise Owner. McGraw is part of Sandler Training’s team of over 250 licensed trainers in 29 countries. Sandler training provides a full range of sales and management training programs, with powerful coordination and customization benefits throughout its extensive franchise network. Founded in 1967 by David H. Sandler, today Sandler Training consists of more than 250 offices worldwide, providing instruction in 14 languages.
Effective Ongoing Training The mission of Sandler Training is to develop top-performing sales, management and executive teams that
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excel in a fluid, fast-paced, global business environment. Sandler’s goal is to help clients initiate substantive, measureable and sustainable growth. This goal is achieved through a non-traditional selling system that promotes lasting changes in behaviour and attitude, something that is not possible with a typical quick fix sales seminar. Sandler’s services have proven successful in small to medium sized businesses, as well as Fortune 1000 companies, with a system that includes quality support materials, ongoing training workshops, individual coaching sessions, Sandler Online Internet reinforcement, and accountability. Sandler training is so effective because rather than treating training as a one-time event, the system builds their training on the concept of incremental growth and change – supported by reinforcement, coaching and accountability. The Sandler Training business model is based on the idea of reinforcement by providing opportunities to generate income from a wide range of client services, including: the President’s Club, private on-site training, management training, customer service training, leadership training, coaching, and global accounts. The President’s Club is the
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backbone of the company, providing public training to front line salespeople, business owners, and managers, and acts as a jumping off point for establishing a solid client base.
Take Control of Your Life Sandler Training provides an incredible opportunity for franchise ownership. Providing a needed service to businesses and corporations of all sizes, a Sandler Training franchise is a great fit for people who are passionate about sales and about helping people make a difference in their lives. When the corporate rat race is no longer satisfying, Sandler Training is an opportunity for franchisees to take control of the future, their income, and their time. Sandler franchise owners come from varied backgrounds and many different fields, but they share a common goal in their desire to make change and to be in control of their future. Experience in training and coaching is not required, although sales experience and middle/ upper management skills will be an asset. Sandler Training provides franchise owners with eight days of intensive training at their headquarters in Owings Mills, Maryland, as well as ongoing
“Sandler training is so effective because rather than treating training as a one-time event, the system builds their training on the concept of incremental growth and change – supported by reinforcement, coaching and accountability.” coaching once the business is up and running. Sandler Training franchise owners are among the most satisfied according to a 2012 report released by Franchise Business Review. In fact, the report found that Sandler Training was ranked #5 out of the Top Franchises in the Midsize Class, which is classified as those businesses which have systems with 50 to 199 units. In addition, Sandler Training was ranked as a Top 50 Franchise, coming in at #11 as a “Best of the Best” company. “This distinction is so meaningful to us because we work diligently to support our franchise partners, and this award confirms that,” says Ron Taylor, Vice President of Franchise Development of Sandler Training. “We are all invested in
the success of the franchise partners, so when franchise owners succeed, it’s a huge corporate win at Sandler Training.” Among its many achievements, Sandler has also been awarded the #1 ranking for training programs in Entrepreneur Magazine’s “Franchise 500” in 2012. “It’s a great time to own a Sandler franchise,” says Sandler Training Franchise Owner Rich Gorman. “Our economy needs additional sales from companies in order to spur growth. And in order to generate those sales, you need good quality people – well-trained, capable of servicing the client’s needs – and what better system than Sandler to do that?” For more information: Web: www.sandler.com
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prof ile
Cpr C ell Phone Repair
CPR Cell Phone Repair: R evol u tioni z in g small electronics repair , 1 g ad g et at a time .
The first ever public cell phone call was made on April 3rd, 1973. In the 40 years after that, mobile phone usage has exploded into a global phenomenon and a multi-billion dollar a year industry. CPR® Cell Phone Repair is a company built on the cutting edge of that incredible market. By offering consumers the option for repair instead of expensive replacement, CPR® has positioned itself as a leader in the mobile electronics world. CPR® repairs all types of small electronics devices, including, but not limited, to cell phones, tablets, smartphones, mp3 players, laptops, computers, GPS systems, and game systems. This wide range of electronics repair services has made CPR® one of the fastest growing franchises in the world, with almost unlimited growth potential. In addition to repairs, CPR® Cell Phone Repair offers other services including a buy, sell, trade program and our nationally
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“Owning a CPR Cell Phone Repair location means becoming part of an international team of electronics professionals dedicated to their customers, their communities, and each other.” recognized CPR Shield protection plans. Customers who visit a CPR Cell Phone Repair store can trade-in their old phone for cash or recycle their old device for credit towards a new device or accessory. CPR is proud to partner with Shriners Hospital for Children as part of our recycling efforts, and a portion of all proceeds from recycled devices is donated to Shriners Hospital. Our CPR® Shield protection plans can protect a large number of electronics from accidental damage from water, drops, breakage, cracks, and more, for less than our competitors. This protection is backed by CPR’s nationwide 6 month warranty, and is valid at any of our participating locations. CPR® Cell Phone Repair currently operates 114 stores throughout the US, Canada, and South America, with another 40 slated to open in the first few months of 2013. By the end of 2015, CPR® is
projecting 1,000 open stores throughout the world. Owning a CPR Cell Phone Repair location means becoming part of an international team of electronics professionals dedicated to their customers, their communities, and each other. Our specialized teams of Gadget Technicians are certified by CPR University, and ready to take on any challenge. CPR® Cell Phone Repair has been ranked for 3 years in a row on the Entrepreneur Franchise 500, and was also named one of the fastest growing tech franchises in the country. In addition to these accolades, we are proud to have a large technical and operational support staff, sales advisors, and many other vital support tools to help our owners become a success. If you’d like to know more about what makes CPR Cell Phone Repair stand out from the crowd, then visit us on the web at www.cpr-franchise.com today!
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Franchising USA
ex per t advice
Tim Miller, Certified Franchise Expert, Location3 Media
T he D i g ital M arketin g B rief
“What 2013 Holds for Franchise Marketing” I absolutely love this time of year. Fresh off a holiday break with friends and family, it’s all about setting goals for the upcoming year and reflecting on what did and didn’t work last year.
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For more on goal setting in relation to those elusive New Year’s Resolutions check out this piece. But that’s not the only reason I enjoy January; it’s also the time we finalize planning for the franchising industry’s biggest gathering. Of all the conferences I will attend at various points this year, the International Franchise Association (IFA) comes out on top with
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a February annual convention each year. A good majority of us spend the first quarter implementing what came from end of year strategic meetings, and bringing those practices to life in our organizations. The content and peer-to-peer networking that takes place during the IFA’s annual convention helps to drive those goals home. On top of all that, this year’s convention will mark a special year for me as I will graduate with the Certified Franchise Executive (CFE) designation. This training program and designation is provided by the Institute of Certified Franchise Executives (ICFE), the educational arm of the IFA. The program’s goal is to enhance the professionalism of franchising by certifying the highest
standards of quality training, continuing education and networking. Applicants must meet the requirements of the program and complete the course of study to earn the CFE designation. According to the IFA Certification Program Manager Rose DuPont, “Participating in the CFE program is a commitment to yourself to be as good as you can be in your chosen profession. As an athlete continues to physically train, a franchise executive should constantly strive to learn best practices so they can implement them within their own company and at their own position within that company. The CFE program provides that.” My reasons for going through the coursework in 2012 to gain this
designation go far beyond just having a greater knowledge of how franchise systems operate; for me it was also about connecting with some of the industry’s brightest minds and those that are truly committed to franchising. I wanted to learn more about how Operations and Marketing integrate and support each other, how the franchise development teams rely on marketing and how the franchisees rely on marketing to drive growth in their local business units. Assuming a franchise system’s success is tied so closely to marketing, what then defines a rock solid, proactive marketing approach in 2013? For starters, I believe finding a partner that can speak the language of both brand and local store marketing is a giant first step in the right
Franchising USA
ex per t advice
Tim Miller, Certified Franchise Expert, Location3 Media
those emails and in-app advertisements will have a more profound effect going forward. Facebook made a pretty significant announcement a few days ago when they introduced Graph Search. According to Mark Zuckerberg, Graph Search will be very different than searching on Google. “Web search is designed to take any open-ended query and give you links that might have answers. Graph Search is designed to take a precise query and give you an answer, rather than links that might provide the answer.”
“You will need to factor in store size, marketing budgets, management and so on; however, these are all secondary to the importance of location.” direction. Secondarily, it is important to understand the process of closing the loop on traditional marketing strategies and digital marketing strategies, which currently fall into separate buckets for many brands. However, what I am most interested in is how franchisors and franchisees can coexist and see eyeto-eye when it comes to selecting their marketing partners. Strategies that work both at the corporate brand level and at the local store level don’t fall from the sky. It takes a sophisticated set of creative skills combined with a world-class discovery process on both ends to uncover how success will be measured, first and foremost. If these expectations aren’t clear up front you’re dead in your tracks. For more on how this practice thrives for Search Engine Optimization at the national and local level for franchises, dig into this column by a respected colleague of mine. There are some incredibly bold and sophisticated predictions about where marketing is headed this year. One of the
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theories that I agree with proposes that real-time marketing will become the norm and more traditional campaigns, as we know them currently, will begin to fade. It’s 2013 and the ways in which marketers engage consumers is drastically changing, so this shouldn’t come as a shock. Inbound or pull marketing will rise to new heights, and outbound or push marketing will start to die a slow death. Campaigns as we know them today will still exist for the iconic brands, but the creative for these campaigns will become subject to change much more frequently. Social media and the true essence of “big data” are doing their part to make this a reality. Speaking of social, another fairly easy prediction to peg is the increasing integration of social across more and more channels. For the most part social has continued to live in its own silo; what happens in social stays in social. Well, technology won’t slow down and integrating social content into the overall marketing mix including database management and CRMs will happen, and
To read more about Graph Search check out the take by social media specialist Angie Pascale in this entry. Lastly, how can one talk about 2013 marketing predictions and not mention mobile? The two words are practically synonymous at this point. If your brand isn’t focused on mobile then you’re already being left behind. To help put it in perspective, more consumers purchased a smartphone than those who bought a PC in 2012. If that’s not enough evidence, tablet sales are even more lopsided. It’s alarming to note how many brands aren’t mobileready…you know who you are. However, there’s still time to include a focus on mobile marketing in your plans for 2013. The basics start with a mobile-friendly website and a mobile search strategy. Here’s to having a fantastic start to your year, and embracing the ever-growing digital marketing landscape in 2013! I hope to see you all at the IFA convention at the MGM in a few weeks! Tim Miller is a Certified Franchise Executive and the Director of Sales and Business Development for Location3 Media, a digital marketing partner built to increase your brand’s findability and performance across all digital platforms. Phone: 720.763.3150 Email: tmiller@location3.com Web: www.location3.com
W ild Bird C enter s :
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W ild B ird C enters :
Turn Your Passion into Something More
The Wild Bird Centers of America offers an extensive selection of birdseed, bird feeders, binoculars, birdbaths, nest boxes, hardware, books and nature gift items. Cynthia Fox joined this franchise in 1995. Below is her experience and advice about being a franchisee with the Wild Bird Centers of America franchise company. Prior to purchasing a franchise, Cynthia worked for the Federal government for 20 years and was looking to make a career change. She decided to take a weekend course which focused on “finding your passion”, as Cynthia had no idea what other line of work she wanted. The topic of wild birds came up and the other participants noticed how she lit up as she discussed them. Memories of her mother measuring out birdseed in an antique scale in their garage for an Audubon customer lingered in her mind. Following in her mother’s footsteps, from an early age she had been a birdwatcher. At the time, while Cynthia was aware that birdwatching was a passion, she had no idea of how she could turn this love of hers into a career.
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f ra nchisee in action
W ild B ird C enter s
Wild Bird Centers Franchise Found Fox One evening while reading a magazine marketed to birdwatchers, Cynthia noticed an ad advertising the Wild Bird Centers franchise system. Eureka; epiphany; whatever you chose to call it, she had one! At that moment, Cynthia knew what she was going to do. Before making the final decision, she researched the company and franchising in general to be sure it was what she wanted to do. Many people close to her were persistently cautious and discouraging, but after all the research she had done, Cynthia was able to feel confident about her decision. This franchisor had a great support platform; a strong formula for success and the product was something Cynthia was passionate about. That drive is what propelled her to success within this company.
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Soon after the decision was confirmed, Cynthia acquired funding and began looking for a store site. She had a location in mind and spent time critically evaluating the location to make sure it was the best spot. The franchisor visited Chapel Hill, NC, to explore the market and area with Cynthia and identify locations that showed promise. Everyone agreed on the shopping center where Cynthia wished to rent. At the time, there were no commercial spaces to lease in this particular shopping facility. The landlord knew Cynthia wanted to rent, so she continued to work her current job until one could materialize into a reality. It took two years from inception to get into the shopping center of her choosing but it was worth the wait. No one knows local market areas and shopping patterns like a local resident.
Materializing Her Dream The training Wild Bird franchisees receive includes “how to” sessions, book sessions, training on the computer POS system, product knowledge and a review of scientific literature pertaining to the wild bird hobby. Once graduated from the training process, Cynthia set about getting her store ready for business. When asked about her memories of the beginning stages of operating the store, Cynthia remarked, “I still remember the very first feeder I sold! The customer wasn’t sure it was what she wanted and she left with nothing but the box! She wanted to show her husband the picture of the feeder. She was so happy walking out with an empty box and I was just as happy for her. She came back the next day and purchased the feeder.”
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What Cynthia wasn’t prepared for were questions from the public which just weren’t discussed in training such as, “What kind of snake eggs are these?” “I learned early on to trust my common sense and if I didn’t know an answer, I said so; then the customer and I would walk to the book section and look it up,” comments Cynthia. Now, almost two decades later, issues that arise are more technical in nature and support is available either through phone calls or email to the Wild Bird Centers community. A great resource in buying into a franchise is having the ability to pick up the phone and speak with another franchisee in the company. It’s one of the reasons Cynthia chose to become a franchisee as opposed to going into business alone. Another aspect of that constant support with the franchisor is having the option to call the home office with problems, questions, or marketing ideas. “The home office has been wonderful in supporting my store all these years”, says Cynthia. Thanks to her capabilities and the Wild Bird Centers system, she doesn’t run into many problems on a regular basis. As good as they are to offer help, every franchisee stands on their own feet and is expected to guide themselves through normal operational issues. Cynthia enjoys the balance of having the support of her franchise while still having the freedom to be her own boss and challenge and test herself in order to experience professional growth.
“Now, 16 years later, I still enjoy putting the key in the lock; saying good morning to the other shop keepers in the mall; sweeping the sidewalk in front of the store; and greeting my customers.” When asked to offer any words of wisdom to folks entering into ownership of a franchise, these are the lessons that came to Cynthia’s mind: • A strong financial philosophy is to pay my bills and employees first and foremost. Your pay cheque comes last on the list. • Get your computer skills in order. Keep your computer network equipment up to date and learn QuickBooks. • Know all about your physical location before you rent it (Cynthia didn’t know there was a creek running under the store next to hers and four years after opening, her franchise suffered a terrible flood. The franchise stepped in with financial and physical support which made a huge impact in helping her get back on her feet). • Hire good employees because you can’t do it all yourself.” “Now, 16 years later, I still enjoy putting the key in the lock; saying good morning to the other shop keepers in the mall; sweeping the sidewalk in front of the store; and greeting my customers who are now like family” says Fox. “I remember nine-to-five work days when Friday meant
something and Saturday and Sunday were days off. We are open seven days a week with the help of my staff. People shop when they are off, which includes holidays. So I work many of those days. Do I resent the hours? To the contrary, I think it’s fun and I love the challenge. I love buying products for the store and having people enjoy and purchase what I’ve bought. I love positive feedback from customers! What other job can give you so many daily, positive affirmations? Owning this franchise has allowed me to use my creativity, my business sense, and my love of wild birds. I have not regretted it. Would I go back to a nine-to-five job? Not a chance: I wouldn’t have as much fun as I do now! My mother never lived to see the store in person, but I sent her many a picture and told her stories of my successes. And hanging over my seed bins is my mother’s antique scale.” Since the first Wild Bird Center store opened in 1985 interest in this pastime has continued to grow and expand. For more information: Phone: (301) 841-6404 Email: info@wildbird.com Web: www.wildbird.com
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Franchising USA
ex per t advice
Diane Rosenkrantz, Senior Consultant, Tenet Financial
Interested in capital for a business and short on the cash? T hat may not be a problem . If you have Retirement funds - i.e. IRA, 401K, 403b, 457, Annuities you CAN ACCESS those funds without taxes and without penalties. Today many people are choosing to save their cash and obtain funding in other ways. One popular funding option is to access traditional IRAs or 401K funds (from a prior employer). If you have retirement funds and you have not yet
“Over the past five or six years, retirement funds have become one of the most popular ways – if not the most popular way – of funding small businesses in America.”
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paid taxes on those funds, you can use them towards the purchase of a business. This can be for both a new business as well as for an existing business (for recapitalization). You are in control; you determine how much of your funds you would like to invest in your franchise or business. At Tenet Financial Group, we follow all of the IRS guidelines with regard to this funding option. We help clients anywhere in the United States. Clients can use these funds for all or part of their total funding. There is no IRS minimum or maximum with regard to the amount of retirement funds you wish to use for this purpose. Typically this is a beneficial option for people with $30,000 or more in retirement funds. This funding option is NOT a loan; these funds are actually used to buy stock in your business. Since you are using the funds to buy stock, and the funds are not a
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distribution to you personally, there are no taxes or penalties. People are using this self directed 401k funding option for all types of businesses. We are seeing this for service based businesses (like Homewatch Caregivers, Above Grade Level), for brick and mortar businesses, and even for vending/kiosks businesses (i.e. DVDNow or TapSnap). Most often prospective franchisees did not know that they could access their 401K/ IRA funds, prior to a conversation with the franchisor or their business coach. For store front businesses, that tend to be more expense than service based businesses, this has been very common for businesses like Jakes Hamburgers. The majority of the clients I have helped
with funding in 2012 used two financial strategies to start or expand their business. They have accessed some of their retirement funds (tax-free and penalty free) or they have obtained unsecured lines of credit. A number of people have also used a combination of funding options. Determining the strategy that is best for you depends entirely on your unique situation. You’ll need to consider the amount of capital needed, the timing, your financial history, and how much capital you have available.
Use your retirement funds – tax free! Over the past five or six years, retirement funds have become one of the most
popular ways – if not the most popular way – of funding small businesses in America. Years ago there were other options that people turned to when starting a business, but due to the economy, the lending environment, unemployment, the housing market, and the large number of people that have left Corporate America, things have been different recently. For people with retirement funds, whether they are traditional IRAs, 401K, 403b, 457, pensions, annuities, people are now learning that they can access Their Funds. It is an empowering feeling to know that you can be in control. When I speak with clients that weren’t familiar with this topic and they learn the fundamentals of this funding option, the lights go on. It
Franchising USA
ex per t advice
Diane Rosenkrantz, Senior Consultant, Tenet Financial
Or if you don’t have a retirement fund, or can’t access it because it is held with your current employer; there may be another way ….. Many people are looking at unsecured lines of credit for additional funding or working capital. The benefit of an unsecured line of credit is that you don’t need to put collateral such as your home on the line, and no financials are required. What you’ll need to quality: • A credit score of 680+ is an “ah ha” moment, and I know they are getting more excited about business ownership ….without debt. You may have heard the nickname Rollover over as a Business Start-up, or ROBS for short. This strategy is also commonly referred to as a Self-Directed 401(k). If you have an Individual Retirement Account (IRA) or a 401(k) plan from a previous employer worth $30,000 or more, you can “rollover” the money as capital for your new business, without paying taxes or penalties on it. You are allowed to access these funds with no taxes, no early-withdrawal penalties and no payback requirement, as long as you adhere to Internal Revenue Service Guidelines (IRS). We follow all of the IRS Guidelines very closely and monitor the plans carefully throughout the year.
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The Flow of the Funds Here’s how it works: Form a Corporation (Tenet Financial Group will set this up for you and provide you with your Articles of Incorporation, your Federal tax id, and provide you with Corporate minutes and bylaws). Then we assist you in rolling funds from your old retirement account into a new 401K plan that we establish for your business. You then wire funds from your new 401K account to your corporate checking account. Tenet helps our clients with each and every step of the process. It is key that all of the IRS guidelines are followed. A person can’t do this process on their own. They would need to enlist the help of a qualified plan specialist or a third-party administrator like Tenet Financial group to facilitate the process. What if your IRA or old 401k doesn’t have enough for your funding needs?
• A good credit history with no liens or bankruptcies and no or very few late payments • Reasonable credit use i.e. you aren’t carrying too much debt on other lines of credit The goal is to the get clients as much credit as possible by accessing multiple lines of credit. Usually, it is at a zero percent rate of interest for up to 18 months. This has been greatly advantageous for both new and existing franchisees with Homewatch Caregivers, DVDNow, and 9Round. Additionally, if you have a spouse or a partner in your business, you may be able to pool your resources and qualify for more. This year a number of my clients have used a combination of both retirement fund and unsecured lines of credit to expand the possibilities and growth for their businesses.
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Ultimately, the best funding option for each person has many variables. We strive to assist each of our clients with the most appropriate funding for their needs. Diane has been working in the pension industry/consulting/customer service areas for the past 25 years. Currently, she is assisting clients, brokers, and franchisors across the country find the best funding options for their businesses. A specialty of Tenet Financial Group is working with clients that have
retirement funds; and Diane helps educate them on the process of accessing those funds for businesses. Tenet Financial Group is a comprehensive Third Party Administration Company with over 70 years of combined experience in SelfDirected 401(k) plan design, installation and administration. Tenet Financial Group effectively simplifies all aspects of the retirement plan administration process for our franchise or independent
business owners. With more automated processes, our systems are more accurate and efficient in managing your retirement plan data. For more information: For more information: Phone: Email: Web:
1-888-901-3335 Extenion 9 Option 2 diane@tenetfinancialgroup. com www.tenetfinancialgroup.com
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f ra nchise focus
Inter face Fina ncial G roup
Corporate Refugees are reinventing themselves
rather than waitin g for jobs to ret u rn Recent jobs reports probably brought a small sigh of relief to the millions of workers who are unemployed because of the current economic situation. Clearly however, things are nowhere near where they need to be, especially for many older “corporate refugees”. “The sad reality for many older workers is that they may never get back their former jobs so it’s time to consider reinventing
themselves with a second career that is entrepreneurial and flexible,” says David Banfield, president of the alternative financing firm The Interface Financial Group. Banfield reports many unemployed workers are contacting him to inquire about the IFG franchise opportunity. “We are seeing a huge uptick in franchise development from corporate refugees who want to put their valuable skills set to work for themselves and control their own destiny rather than wait for something to happen,” Banfield adds. Many interested former corporate workers are visiting IFG booths at franchise trade shows. Banfield categorizes those inquiries into three types: 1. Former corporate workers who have
spent their severance and need work. 2. Former corporate workers who have saved their severance and are looking for an investment. 3. Former corporate workers looking for a change and an opportunity to control their future.
Here is just one story of a “corporate refugee” reinventing himself. In 2010, Barry Johnson found himself doing something he hadn’t done in three decades: putting a resume together. Johnson, now 58, had spent the last 30 years running four different companies. He started his career in the mailroom at a packaging company, where he eventually became the CEO. After twenty-five years there, he left to start a new business with his son, where he could teach him the ropes of business. “This was the first reinvention of myself,” he said as he recalled the change his career path made at the age of 50. But within a few months they unexpectedly had to sell that business. For the second time in a year, he was looking at yet another reinvention. “Next, I purchased a construction company. It was very successful, but my silent partner was not so silent. We had different views on how to run the business so when I had an opportunity to sell my part of the business, I did.” But Johnson wasn’t ready for
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retirement, nor was he prepared for how difficult it would be to find a new career. So, then began reinvention number three. By then, Johnson knew he did not want to build a company from the ground up or buy an existing business. He was all too familiar with the roadblocks on those paths. “To run a business you start from the ground up – it really comes down to knowledge legacy. You are the knowledge legacy – you have experience and knowledge. It’s kind of like breathing. When you buy another company, you are relying on management in place to lead you down the right path. But in my experience, the management team in place wasn’t as solid as I thought. I wasn’t at a point in my life where I wanted to take that kind of risk or responsibility again.” He felt that all signs now pointed to franchising. “In a franchise, they pass the knowledge on to you. It’s the knowledge legacy and how that is transferred to you.” He worked with a broker who introduced him to several concepts, most of them professional services. The Interface Financial Group (IFG) was the one that stuck with him. There were several reasons why he liked the IFG business concept. “First, I liked that I would be able to have a successful business with no employees, no inventory, no overhead, and could work out of my home. But what really struck me was their professionalism. They tend to underpromise and over-perform. They didn’t work really hard at trying to reel me in. It was up to me to make it happen.” Johnson underwent a thorough training with IFG before he opened the doors to his franchise in June 2011. “I’m happy I made the decision. IFG does support you well, and they really do want you to succeed; the quality of the franchisor is very good; their heart is in the right place, and they are honest.” Johnson is still getting used to having more time on his hands. He now has time and flexibility to do things he enjoys, like play golf while also getting the job done. “IFG affords a nice lifestyle for someone who has a lot of activities and interests outside of the workday, so I don’t see me working
“The most fulfilling part of the business so far has come from helping other businesses in his community prosper.”
40 hours a week. My golden retriever also likes that I work about 3 feet from him now.” The most fulfilling part of the business so far has come from helping other businesses in his community prosper. “My clients are growing. They are too young to be bankable or they’ve been bloodied and battered during this economy. I’m in a position to help them, and the reality is that they are in a good situation because they are just growing.” Take for instance the story about a family-run business that recently came to him for alternative financing. The company was started decades ago by a local man but was recently turned over to the owner’s son, who is in his late 20’s. “With a new owner, the bank views them as a new entity even after years and years of making money. I feel good about helping them grow, giving this young man the opportunity to take on that next big new job knowing they will have the cash flow to handle it.” “Especially after a gloomy economy, it’s great to be a part of this rebound. I’m on the front lines of the small business world, and I see more hope now.”
The Interface Opportunity IFG is an international provider of short-term working capital via invoice discounting and has more than 150 franchises in 7 countries that work with small businesses in their communities. Invoice discounting is hugely popular in many countries, and is routinely used by
large companies. IFG has brought that established service to small business owners. Interface has developed a very flexible approach that can provide cash quickly without long-term commitments. Invoice discounting is transactional, not a revolving loan, so the process can be repeated as the business owner needs. As an invoice discounter, IFG franchisees purchase a percentage of their clients’ verified receivables and provide them with access to instant capital, usually within 2-4 business days. Payment is then made in due course direct to the IFG franchisee, and the transaction is completed. This form of short-term financing offers small business owners the opportunity to access cash quickly without having to wait for their outstanding invoices to be paid. “Opening an IFG franchise is attractive for unemployed executives because they can be their own boss, it is inexpensive to open shop and the franchise can be run out of their home,” adds Banfield. “In addition, IFG has perfected a franchise model that provides training and support to franchise owners, a comprehensive risk management program, a seasoned management team experienced in financial services is available to back up every franchisee, and an exceptional return on investment.”
Franchising USA
ex per t advice
Dale Willerton, The Lease Coach
Secrets to Successful Site Selection for F ranchise T enants
A Good Franchise in a Poor Location will become a Poor Business!
Franchising USA
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“You will need to factor in store size, marketing budgets, management and so on; however, these are all secondary to the importance of location.” One of the most effective strategies to conducting site selection is not by looking for the proverbial needle in a haystack (or the perfect location) but instead, by using the process of elimination to get you there. Arguably, the number one reason for a franchisee’s failure or poor performance is due to a poor location. A poor location ultimately results from poor site selection. How else can you explain that identical stores from the same chain or franchise system will vary as much as 200 percent in sales volumes? Of course you will need to factor in store size, marketing budgets, management and so on; however, these are all secondary to the importance of location, in my opinion. Essentially, there are three types of franchise businesses: profitable, break-even and go-broke. A truly profitable franchise location will make money and the business will appreciate in value. A break-even franchise location will pay the owner a small salary and pay the rent but not much more. The go-broke location that comes to my mind lasted less than 12 months from opening to closing for one unfortunate franchisee. Despite my warnings that this was a go-broke location, the franchisee poured in $200,000 into the store setup and couldn’t pay the rent by the sixth month of operation. Usually, a go-broke
location will not only steal your capital but also put you into personal bankruptcy after you have maxed out your credit. If you thought that franchise site selection was all about location – location – location, you’re right … intellectually. However, when first-time tenants with limited leasing experience are involved in the site selection process, good old common sense often goes out the window. Consider for a moment that site selection involves both science (with part research and part timing) and good intuition (experience). Franchise tenants, typically, will mistakenly rely on either a landlord’s agent/broker or their franchisor (without a dedicated in-house real estate team) to lead them through the process. In my book, Negotiate Your Franchise Lease or Renewal, I have dedicated an entire chapter to site selection. Here are just a few relevant tips from the expert: 1) Allow enough time so that you’re not making decisions under pressure. Typically, for a new franchise business, you should start the site selection process six months or more in advance of when you want to open. If you find a prime location, usually the landlord will hold it for you for a few months. However, if the process takes longer, you may need several months to finalize the Offer to Lease, review the formal lease documents and/or build out the store. 2) Don’t let one agent/broker show you space all over town. Franchise tenants often fail to realize that agents typically work for landlords who pay them a
commission on lease deals signed and closed. When one agent shows you another agent’s listings, this will effectively create commission-splitting between the property’s listing agent and the leasing agent. This will also undermine your negotiating power since the landlord’s listing agent wants to find his own tenant and collect a full commission. An agent/broker may be very helpful in pointing out a location you were unaware of, but remember who they are working for. While their advice may be sincere, it may be sincerely wrong or self-serving. 3) Make your leasing inquiry by calling the “For Lease” number on the property sign. This way, you will meet and negotiate with the listing agent directly. Tour prospective sites in order from worst to best based on curb appeal. This way, you will become more confident, ask better questions and be more in control of the leasing process. 4) Don’t telegraph your intentions by giving buying signals. Ask the leasing representative to e-mail you preliminary information before you agree to view the space. When viewing, stifle the urge to think out loud; subtle comments to a partner/ spouse and overheard by the leasing
Franchising USA
ex per t advice
Dale Willerton, The Lease Coach
representative can work against you. If you’re asked how much you have budgeted for rental payments, remain vague. Not every question asked deserves an answer – not yet, anyway. If you find yourself weighing a better location at a higher rent versus a lesser location at a lower rent, my advice is to go for the first option, within reason. When consulting to franchise tenants and doing site selection, my job isn’t to find the cheapest location, it is to select a site that will help the tenant maximize his/her sales. Also remember that landlords sometimes prefer to lease their worst space(s) first and save the best space(s) for last. Usually, the individual unit or location you lease within a shopping center or strip mall is
Franchising USA
more important that the mall itself – or at least equally important. Know that lease rates within a building can vary by 200 percent depending on unit desirability, walk or drive-by traffic flow, space shape, quality of neighbouring tenants, anchor tenants and your operating status as an independent or a national chain name. While you don’t always get what you pay for in leasing commercial space, you normally don’t get more than you pay for either. Note that if you already own a franchise business and are facing a lease renewal or a re-location, you should start the re-location or site selection process approximately nine months ahead of the lease expiry date. If you cannot find a satisfactory new location, you will still
have time to negotiate your lease renewal. For a free copy of my CD, Leasing Do’s & Don’ts for Franchise Tenants, please
e-mail DaleWillerton@TheLeaseCoach. com.
Dale Willerton - The Lease Coach is a Commercial Lease Consultant and author of “Negotiate Your Franchise Lease or Renewal”. Got a leasing question? Need help with your new lease or renewal? Need a speaker at your next franchise convention? For more information: Phone: 800-738-9202 E-mail: DaleWillerton@
TheLeaseCoach.com
Web:
www.TheLeaseCoach.com.
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International Franchise Association
December Jobs Report Mirrors Growth Sectors for Franchising in 2013 Franchising USA
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The International Franchise Association says many sectors showing growth in the December jobs report mirror those sectors expected to be the leading drivers of employment in franchising in 2013. The Department of Labor December jobs report showed the economy added 155,000 jobs last month, many in food service, health care, hospitality and construction-sectors with high concentrations of franchise businesses that are expected to grow in 2013 according to IFA’s 2013 industry forecast. “Franchising remains a viable business model with growing brands in the home health care, restaurant, hospitality and construction sectors, among many others, contributing thousands of new jobs in 2013,” said IFA President & CEO Steve Caldeira. “For those Americans dealing with long-term unemployment or a lack of growth opportunities in their current jobs, franchise ownership offers a viable way to be in business for yourself, but not by yourself. According to The Franchise Business Economic Outlook: 2013, a report prepared by IHS Global Insight and released Dec. 20, 2012, all ten businessformat franchise lines expect to add jobs in 2013, pushing total employment in franchising up two percent, from 8.1 million to 8.262 million (an increase of 162,000 new jobs). Commercial & Residential Services (including construction) will be the growth leader in
“Franchising remains a viable business model with growing brands in the home health care, restaurant, hospitality and construction sectors, among many others, contributing thousands of new jobs in 2013.” 2013, with an increase of 2.8 percent, up from 1.7 percent in 2012, from 346,822 to 356,533 (an increase of 9,711 new jobs). Three other sectors that are expected to show employment growth above the overall franchise average of two percent are Business Services, up 2.6 percent from 909,329 to 932,329 (23,643 new jobs) and the restaurant & food service sectors (both quick service and full service restaurants), up 2.2 percent from 4,050,922 to 4,140,042 (89,120 new jobs).
About the International Franchise Association: The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA
works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development. For More Information: Web: www.franchise.org
Franchising USA
ex per t advice
Sarah Kulbatski, Director, JT Corporation
Customer Service
S teps to B u ildin g a L oyal C lientele “People will talk about excellent service as much as poor service if you give them something worth talking about.”
An old Chinese proverb goes something like this: Not knowing there’s a tiger in the bushes will not keep it from harming you. The same is true for guest satisfaction: Not knowing whether customers who patronize your stores are impressed, ambivalent, or dissatisfied will not stop those guests from sharing their limited discretionary dollars with competitors, defecting to other brands, and spreading negative word of mouth about their dissatisfactory or mediocre experience. The revenue implications are obvious, which is why actively managing your customer’s experience can be so lucrative. Studies show that dissatisfied customers tell an average of 10 people about a bad service experience. Each of these people tells an additional 10 people. In other words, if we lose one customer,
Franchising USA
we may actually lose 100. Likewise, every satisfied customer can lead to 100 new customers. People will talk about excellent service as much as poor service if you give them something worth talking about. As a franchise owner, customer service should be your number one priority. If you do everything else right, but fail to provide excellent service to each customer, you will fail as a business. Therefore, while some businesses focus on costs, margins and profits, your focus as a franchisee should be on the total satisfaction of every customer that enters your store. This does not mean you shouldn’t care about the “numbers.” You are in business to make a profit, and you do care about costs. The best way to succeed is to build a strong base of loyal customers who continually patronize your stores. It is much easier to bring costs in line when you have a strong customer base and hence high volumes, than it is to focus on costs first and hope to build a loyal clientele second. Think of your customers as guests in your own home. When you invite people over for dinner, you want them to enjoy the
most pleasant evening possible. You may prepare several desserts (apple pie, cherry pie, ice cream), and allow them to choose the one they prefer. Some may want a taste of each, which is great, since you prepared the desserts for them. Treat your customers the same way! Everything you sell is prepared especially for them. The phrase “The customer is always right” is rather overused in the restaurant business. Nonetheless, you must believe it and adhere to it. Arguing with customers causes more problems than it solves; they become angry, others in the store overhear the commotion, and everyone tells someone else about the problem. Although you may win the battle, you will always lose the war. Remember that customers are not perfect. Sometimes they change their minds, forget what they ordered, think a portion is unfair, etc. Even when they are wrong, it is best to maintain a pleasant composure, tell them you are sorry, make things right, and allow them to save face. This will work to your advantage in the long run. Dissatisfied customers who you treat well often become your most loyal advocates. Franchisors aim to be leaders in their
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segment, positioning themselves in the customers’ preference, aiming to be the leaders in customer service, always remembering that the customer comes first. As a proud franchisee, part of your goal is to better yourself and increase customer repeat business. You want your customers to enjoy coming to your store because they have a great experience, both in product offering and service. Customers must always be aware that they are buying at your store, therefore: • Always greet customers: WELCOME TO XYZ, HOW CAN I HELP YOU!!! • Always look your customer in the eye and smile • Explain to your customers your concept
• After making the sale, say: ENJOY IT AND THANK YOU FOR COMING TO XYZ!!!
unsuccessful business. No customer will tolerate a dirty counter, or a staff member with dirty fingernails.
You have a moral and legal obligation to prepare and serve your products in sanitary and clean surroundings. Failure to maintain your quality through the implementation of the franchisor’s company standards can only lead to decreased sales. “Cleanliness is your responsibility and awareness”.
Always view your product with the question: “Would I eat this?” View your staff with the question: “Would I want this person serving me?” And lastly, ask yourself each and every day: “Does my shop reflect the concern I have for my business?”
A discourteous staff member should never be tolerated. You must hire people who are prepared to serve your customers. Without a steady supply of satisfied customers, your business will not succeed. This principle is sacred to your success. A dirty shop indicates a badly run and
Customers don’t care who causes the problems, but want to know whether the problems will be solved. ALWAYS avoid arguing with the customer because: • Your customer might not always be right but as far as you are concerned is always right
Franchising USA
ex per t advice
Sarah Kulbatski, Director, JT Corporation
made about a person or his business within three to five seconds and that it takes at least six to eight visits to change that impression? During the first three to five seconds, the customer will size up your store with regard to its appearance, the staff, the service, without ever speaking to any of you, members of the staff or even setting a foot to the front counter. Research has proven that a customer is less forgiving of poor service than poor food quality. To combat bad first impressions, each and every franchisee should make a point of viewing their store through the eyes of potential customers. Stand outside your store and look in as though you were seeing it for the first time. What does your presentation say to the customer? How does your staff respond to the customer? Is the store clean? Are your employees helpful and friendly? Does the store look like a flea market because it is cluttered with every promotional material you have ever received or is it clean and focused and pleasant to look at?
• It’s useless to try to win over an argument with the customer as you may lose them later • Your job is to satisfy the customer • DON’T let a customer leave the store because of unpleasant service • ALWAYS be patient with your customer’s emotions/feelings • To successfully solve problems of customer dissatisfaction, you have to be able to make them come back to the store again Remember, your customers are the most important people who visit you at the
Franchising USA
store. They don’t depend on you, but you have to depend on them. Customers don’t interrupt you while you are on duty. Your objective is to facilitate them. Customers are not strangers but part of your business. You always need to make sure that the latest promotions are up, that the stores are clean and uncluttered and that service is always provided with a smile. The customer must be made to feel welcome. A warm, friendly smile must be part of your uniform! A customer is not an interruption of your work. He/she is the purpose of your work! Did you know that a first impression is
Franchisees should remember the 14 points below and ensure that every employee remembers them as well. Simple points, some quite obvious, but ones that will help franchisees remember how a positive attitude, the extra care in customer service and the products being offered all go hand in hand to create an impression left on a customer.
1. Start each day with a positive attitude
It is a new day - you’ll meet new people - you’ll make a customer especially pleased.
2. Greet every customer with a pleasant smile
Be warm and enthusiastic. The magic of a smile is amazing. It’s one thing you can always give and get back. Besides, it doesn’t cost anything to smile!
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3. Have a sense of humour
8. Sell by suggestion
Try to always look at the light side of life.
4. Have eye contact with the customer
Eye contact coupled with your smile will be a winning combination every time!
9. Treat customers as if they were your employer
5. Be gracious in serving
The manner in which you serve reflects your attitude. Customers don’t appreciate having food literally thrown at them, nor do they like being spoken to brusquely. You might sometimes be rushed, but the time difference in properly serving and rushing service is negligible.
6. Be careful of the language you use
Most customers DO NOT appreciate objectionable language. If you do use it, leave it at home!
7. Learn about the product
Make sure you understand exactly what the products are that you carry.
If a potential customer is hesitant about what they want, it could be their first time at your store! Be helpful by suggesting that they try one of the all time favorites and/or best sellers.
Don’t forget you are working for them now! If you really like your business, you owe it to them. Without customers, there wouldn’t be a franchise owner!
10. Give children some extra attention
To most parents, their children are the most important aspect of their life. Your special attention to their children will gain parents’ appreciation.
11. Do not argue with the customer
If a customer complains unjustly, don’t argue because you cannot win. Keep your cool! If you do this, they will normally apologize to you after they get a chance to reflect on their own rudeness.
12. Be gracious to the obnoxious, abusive or loud customer
But immediately tell the owner or manager. He/she can better handle the situation.
13. Have good telephone manners
The manner in which you answer the telephone is a part of customer courtesy. Always say, “Good morning/ afternoon/or evening, welcome to COMPANY NAME.” Be pleasant and polite.
14. Admit when you have made a mistake
If you’ve made a mistake, say you are really sorry - and correct the problem immediately. Don’t try to cover up the problem or, worse still, ignore it. It doesn’t go away!
Customers will return again and again if their total experience left a good impression. This means good quality, good service and good value for their money. A franchisee’s continued success is dependent upon their ability to satisfy their customers each and every time. Be honest with yourself, because that is the only way that you will get to understand what needs to be changed.
Think like customers! Pamper customers! Respect customers! Focus on customers! Exceed expectations! Sarah Kulbatski is director of JT Corporation, a company specializing in franchise consulting and risk management. For more information: Email: jtfranchising@me.com Web:
www.jtfranchising.com
Franchising USA
Make Your Next Move with a WIN Home Inspection Business
Throughout North America, the home inspection industry continues to demonstrate strong growth and has already proven to be an integral part of the real estate transaction. As the housing market strengthens, we are experiencing a steady increase in overall volume of home sales and percentage of homes inspected, confirming that the home inspection business is a high demand service in a solid industry.
Home sales are set to keep marching upward this year after hitting their highest level in five years in 2012, economists say. Housing is finally contributing to the economyâ&#x20AC;&#x2122;s growth instead of pulling it down.1 Existing home sales for the full year rose 9.2% from 2011.2 More than ever, home buyers, sellers, Realtors , and lenders and investors, recognize and promote the value of a quality home inspection. Real estate service providers are especially aware of the importance of a professional home inspection. In fact, the National Association of RealtorsÂŽ concluded in a recent survey of its members that a home inspection is the most widely recommended service to home-buying clients. ÂŽ
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Along with expertise, information and understanding, a home inspection provides the potential home buyer with the peace of mind essential to make this important decision. Today, an estimated five million home buyers seek out this confidence by having a home inspection contingency placed in their contract prior to purchasing a home. As housing markets continue to grow, so does the demand for home inspections. In addition, more progressive home sellers are recognizing the practical and financial benefits of a professional home inspection when preparing their home for sale. Looking ahead, the expansion potential of the home inspection industry is extremely positive.
The time to be in the home inspection field is now!
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“
Our business was founded on the concept of Strategic-Partnership. We have avoided growth through company stores as well as through traditional franchising. The essence of the WIN Way lies in the Strategic-Partnership we enjoy with our WIN franchisees, where we align our energies to serve our customers in a true “WIN-WIN” manner. Reflective of our commitment to the success of our Strategic-Partners can be found in the creation of our territories, as we shape them based on the industry proven control points for inspection opportunities; we understand the industry we serve, are aligned with its needs, and manage our business on fact based market metrics.
“
— Steve Wadlington, WIN President
10 Reasons Why Making Your Next Move With A WIN Home Inspection Business Is One Of The Best Moves You Will Ever Make: 1. 2. 3. 4.
Strong Income Potential Distinctive Brand Awareness Proven Business System Leadership Team Are Engaged Subject Matter Experts 5. Effective Customer Acquisition, Retention Programs & Marketing Support 6. Advanced Inspection Methods & Technology 7. Low Investment/Overhead, Cash Business 8. Home-based 9. No Employees Necessary 10. Meet New People & Work in New Surroundings Everyday
WE SEE MORE. CLEARLY. At WIN Home Inspection, we understand where we fit in, and we serve accordingly. We are blessed to provide a service that assists home buyers, sellers, and owners with what is typically their largest transaction, and among their most meaningful possessions — their home. We provide our customers with vital “need-to-know” information in a timely, professional and easy to understand fashion. We convey actionable information in a balanced context that ensures clarity and common understanding.
For more information about WIN Home Inspection franchise opportunities, please call 1-800-967-8127 or visit us online: www.WINfranchising.com © 2013 World Inspection Network International, Inc., a franchisor of home inspection services. 1 Mark Zandi — Moody’s Analytics Chief Economist | 2 The National Association of Realtors (NAR)
Franchising USA
vetera ns in f ra nchising
VetFran partners with VA on new V eterans B u siness A ccelerator
â&#x20AC;&#x153;Together, the education provided by the VA Accelerator and the opportunities and incentives offered by the IFA and VetFran can open doors for many veteran-entrepreneurs to start and grow a franchise suitable to their interests.â&#x20AC;?
Franchising USA
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The Department of Veterans Affairs (VA) is creating a new VA Business Accelerator, to provide professional and entrepreneurial development for veterans interested in entrepreneurship. The VA Business Accelerator will include powerful and innovative courses, resources, and professional development tools. The comprehensive curricula has been designed with the veteran small business owner in mind, and supports the veteran through the entire business cycle. VetFran will be providing franchising content. All interested veterans will be able to access the free courses and resources. Wounded veterans will even qualify for financial support from the VA while doing the coursework. Together, the education provided by the VA Accelerator and the opportunities and incentives offered by the IFA and VetFran can open doors for many veteran-entrepreneurs to start and grow a franchise suitable to their interests. VetFran is a valuable resource for VA Accelerator graduates, many of whom would like to pursue entrepreneurship through franchising post-graduation. The two programs share a commitment to helping veterans succeed in their career endeavors as the VA Accelerator is a Department of Veterans Affairs initiative to educate Veterans on entrepreneurship and VetFran is dedicated to making opportunities in franchising more accessible to veterans. Entrepreneurial veterans will be encouraged to pursue franchising opportunities that interest them and the
VA Business Accelerator curriculum teaches the vital business skills for entrepreneurs such as starting a business, leading, managing, hiring, and sales. VetFran’s partnerships and resources along with the VA Accelerator’s targeted education can help veterans who wish to open a franchise succeed. About VetFran As tens of thousands of service men and women return from deployment in Afghanistan and Southwest Asia, expanded opportunities are needed to ensure veterans and their families can transition into the civilian economy. With its rapid training opportunities, scalability, and need for operational execution and excellence, franchising provides an ideal career path to enable returning veterans to become leaders of and productive participants in the U.S. economy. IFA’s VetFran program helps returning service members access franchise opportunities through training, financial assistance, and industry support. VetFran was born out of the desire of the late Don Dwyer Sr. – founder of The Dwyer Group, to say “thank you” to our veterans returning from the first Gulf War. After the Sept. 11, 2001 terrorist attacks, IFA re-launched its campaign to assist U.S. veterans at that difficult time. Now, IFA’s VetFran program helps returning service members access franchise opportunities through training, financial assistance, and industry support. VetFran’s ranks have grown to include more than 500 franchise systems that voluntarily offer financial incentives and mentoring to prospective veteran franchise small business owners. Thousands of veterans have become franchise owners through VetFran and other programs. For more information: Web: www.vetfran.com
Franchising USA
f ra nchisor in depth
Clock wor k H ome Ser v ices
Clockwork Home Services: A T ime S avin g B u siness for E veryone I nvolved
Clockwork Home Services has been delivering prompt, respectful home services since 1998. With three branded companies: One Hour Air Conditioning & Heating®, Benjamin Franklin Plumbing®, and Mister Sparky®, Clockwork Home Services ensures their companies deliver on time service delivery or the customer doesn’t pay. Franchising USA
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A long-standing history of advancement and a promise like this makes it clear: this is a company that is tough to beat.
Assimilate Your Business into Clockwork “I worked in corporate America. My parents never suggested I get into trades training. The problem with this is that because there are a couple of generations that turned their nose up at the “bluecollar” trades, we have a shortage in qualified tradesmen and women who can meet the demands our country has. I got into this business because there is a need for it,” shares Richard Hodge, a Clockwork franchisee. Clockwork is looking for people with good work ethic and strong values that agree with the job description and exemplify the Clockwork Home Services mission. When the company aligned with Direct Energy® a couple of years ago, Clockwork was flooded with new inspiration focused toward strengthening Clockwork’s mission. This is a company that demands all business actions always be conducted in the most honorable, honest and ethical manner. Clockwork ensures products that
“Clockwork Home Services has been a game changer for me. It has changed my life: my lifestyle and standard of living. I would love to take credit for getting to enjoy watching my son play football at 4:30 on a weekday but the truth is, Clockwork game me the formula.” deliver superior service. They strive to be the most desirable business to work for. The Clockwork thought process is focused on managing their franchisees in the best way possible to sustain strong businesses well into the future. This isn’t a company that falls into the trap of only looking into personal gain in the immediate future.
training. There is virtual training available as well as continual training at their Saint Louis head office,” said Hodge. “Clockwork is constantly evolving all aspects of training. I think in the best organizations and franchises, training is a culture not an event. It is definitely part of the culture at Clockwork!”
Franchisee training with Clockwork Home Services is thorough and ahead of competitors in the industry. Company-run training programs instill contractors and small business owners with the ability to provide superior technical service in a manner that is respectful of the customer’s home, budget and time. “We have a Success Academy®. They offer free training for franchisees that covers the basics of everything and anything relating to running your business and technical
As a Clockwork franchisee there are a number of services at your disposal. Clockwork provides access to BuyMax®, an easy-to-use processing and purchase order management system offering private label products exclusively to its members as well as quality universal products provided by industry leading vendor partners and national suppliers. You also have privileges to SuccessWare® 21, business management software for the residential service industry.
Franchising USA
f ra nchisor in depth
Clock wor k H ome Ser v ices
Clockwork teaches contractors how to generate greater revenue in the most efficient way. Clockwork systems and business process software applications allow contractor to sidestep the types of “business surprises” that can plague an individual small business owner. Their robust marketing and communications efforts ensure strong brand affinity and high visibility wherever a franchise is located. All of these training systems and resources offer Clockwork franchisees more freedom and enjoyment. “I followed the business model and it has restored my life and prior business. I don’t have to be at my business for it to run. It’s given me a fantastic life,” remarked Hodge. “If you follow the system and take responsibility
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in all senses of the word for your business you will continue to gain momentum within your franchise.” Hodge could not speak enough about following the system. In his years as a franchisee owner he has watched many individuals pick and choose bits of the system that feel good and rationalize away the other important aspects of the system. More often than not, down the road, lack of commitment and trust in the system leads to struggle for the franchisee. The Clockwork philosophy embraces the importance of time – the homeowners’ and the contractor’s. “Clockwork Home Services has been a game changer for me. It has changed my life: my lifestyle and
standard of living. I would love to take credit for getting to enjoy watching my son play football at 4:30 on a weekday but the truth is, Clockwork game me the formula. All I did was follow it.” The three keys to success, according to Hodge, are following the franchise system; forging relationships with everyone in the franchise that you can; and, immersing yourself and your staff fully into the franchise. If you are looking for a franchise in the home services contractor market, Clockwork, a company that establishes and builds nationally branded franchises, is a company worth looking in to. For more information: Web: www.clockworkhomeservices.com
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BUSINESS
Succession Planning Ideas for F ranchisees
When developing a succession plan for your franchise business, you must make many decisions. Should you sell your business or give it away? Should you structure your plan to go into effect during your lifetime or at your death? Should you transfer your ownership interest to family members, co-owners, employees, or an outside party? The key is to pick the best plan for your circumstances and objectives, and to seek help from financial and legal advisors to carry out this plan.
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ex per t advice
John Geenen, Managing Partner, Waterfront Financial Group
Selling your franchise business
Private annuity
You can sell your business outright, choosing the right time to sell--now, at your retirement, at your death, or anytime in between. The sale proceeds can be used to maintain your lifestyle, or to pay estate taxes and other final expenses. As long as the price is at least equal to the full fair market value of the business, the sale will not be subject to gift taxes. But, if the sale occurs before your death, it may result in capital gains tax.
With a private annuity, you transfer your ownership interest in the business to family members or another party (the buyer). The buyer in turn makes a promise to make periodic payments to you for the rest of your life (a single life annuity) or for your life and the life of a second person (a joint and survivor annuity). Again, because a private annuity is a sale and not a gift, it allows you to remove assets from your estate without incurring gift or estate taxes.
Transferring your business with a buy-sell agreement A buy-sell is a legally binding contract that establishes when, to whom, and at what price you can sell your interest in a business. A typical buy-sell allows the business itself or any co-owners the opportunity to purchase your interest in the business at a predetermined price. This can help avoid future adverse consequences, such as disruption of operations, entity dissolution, or business liquidation that might result in the event of your sudden incapacity or death. A buy-sell can also minimize the possibility that the business will fall into the hands of outsiders. The ability to fix the purchase price as the taxable value of your franchise business interest makes a buy-sell agreement especially useful in estate planning. Agreeing to a purchase price can minimize the possibility of unfair treatment to your heirs. And, if your death is the triggering event, the IRS’ acceptance of this price as the taxable value can help minimize estate taxes. Additionally, because funding for buy-sells is typically arranged when the buy-sell is executed, you’re able to ensure that funds will be available when needed, providing your estate with liquidity that may be needed for expenses and taxes.
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Until very recently, exchanging property for an unsecured private annuity allowed you to spread out any gain realized, deferring capital gains tax. IRS regulations have effectively eliminated this benefit for most exchanges, however. If you’re considering a private annuity, be sure to talk to a tax professional.
Self-canceling installment note A self-canceling installment note (SCIN) allows you to transfer your interest in the business to a buyer in exchange for a promissory note. The buyer must make a series of payments to you under that note, and a provision in the note states that at your death, the remaining payments will
be canceled. Like private annuities, SCINs provide for a lifetime income stream and they avoid gift and estate taxes. But unlike private annuities, SCINs give you a security interest in the transferred business.
Gifting your business If you’re like many business owners, you’d prefer to have your children inherit the result of all your years of hard work and success. Of course, you can bequeath your business in your will, but transferring your business during your lifetime has many additional personal and tax benefits. By gifting the business over time, you can hand over the reins gradually as your offspring become better able to control and manage the business on their own, and you can minimize gift and estate taxes. Gifting your business interests can minimize gift and estate taxes because: It transfers the value of any future appreciation in the business out of your estate to your heirs. This can be especially valuable if business growth is expected. Gifts of $13,000 per recipient are tax free under the annual gift tax exclusion. Aggregate gifts up to $5,120,000 (2012 figure) are tax free under your lifetime exemption. Partial interest gifts, as with GRATs, GRUTs, and FLPs, may be valued at a discount for lack of marketability or restrictions on transferability. Gifting your business using trusts You can make gifts outright or use a trust. You can even structure a trust so that you keep control of the business for as long as you want. You can establish a revocable trust, which will bypass probate and allow you to change your mind and end the trust, or an irrevocable trust, such as a grantor retained annuity trust (GRAT) or a grantor retained unitrust (GRUT) that can provide
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â&#x20AC;&#x153;You can bequeath your business in your will, but transferring your business during your lifetime has many additional personal and tax benefits.â&#x20AC;? you with income for a specified period of time and move your business out of your estate at a discount.
Gifting your business using a family limited partnership You can transfer your business interest using another entity, such as a family limited partnership (FLP). An FLP is a limited partnership formed to manage and control a family business. You (and your spouse) can be the general partners, retaining control of the business itself and receiving income from the business, while your children can be limited partners. By
transferring the business to an FLP, you may be able to use valuation discounts and substantially reduce the value of the business for tax purposes by making annual gifts to the limited partners.
performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. The tax information provided is not intended to be a substitute for specific individualized tax planning advice. We suggest that you consult with a qualified tax advisor. Securities offered through LPL Financial, Member FINRA/SIPC
John T. Geenen is a Managing Partner with Waterfront Financial Group in Minneapolis.
Prepared by Broadridge Investor
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All
For more information:
Communication Solutions, Inc. Copyright 2012.
Phone: 952-236-1755 Email: john.geenen@
waterfrontfinancialgroup.com
Web:
www.waterfrontfinancialgroup.
com
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Steven A. Rosen, Chairman Emeritus, FranNet
THE FISCAL CLIFF
A N D T H E S TA R T U P A N D E X PA N S I O N OF FRANCHISE BUSINESSES
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“More uncertainty demands a higher return on investment to compensate for a greater risk assumed.”
By any reasonable historical standard, this should be a great time to start or expand a business. As a nation, we are emerging from a recession of historical severity evidenced by a contraction of our economy and numerous business failures. For the first time since 2008, the economy seems to be expanding and profits are once again increasing. Finally, lenders seem to be looking for qualified borrowers, albeit it on more stringent lending standards and terms. There is not the aggressive lending practice of earlier times, but certainly it is better than the window being shut to a large extent which we have experienced over the last four years. Moreover, interest rates are as low as any in memory. Historically, when both of these –brighter prospects for business coupled with the availability of credit at low ratesoccurred, it led to people taking on the risk of starting new businesses and to existing business owners investing in the growth of their businesses. In fact, that isn’t happening as we would expect. According to a recent report published by the International Franchise Association, the number of franchisees is expected to grow by 1.4 percent in
2013, a slightly slower pace than in 2012 and only slightly better than in prior years. And it also noted that growth by existing franchisees –opening new units or expanding businesses by investing fresh capital, likewise, was going to be modest if it increased at all. So what is going on? At a time when we should expect rapid growth and a greater inclination to assume risk through investment, the opposite seems to be happening. There seems to be a disinclination to take a risk at a time we expect the opposite. This has a profound impact on the economy, and it isn’t helpful for long term economic growth if we are counting on small businesses to be the growth engine of the economy.
the cost of capital, should lead to a lower threshold to achieving success. In other words, this should be an excellent time to start or expand a business. And yet, that isn’t what is happening, at least for small business and leads us to ask why. If the known risks suggest more growth and more risk taking, are the unknown risks and an inability to quantify them causing the reluctance to take on the risk of starting and expanding businesses? The answer is affirmative and better helps us understand the deviation from what we might otherwise expect and might also help us understand the caution we seem to be experiencing from small business.
Understanding Risk
While franchisees and prospective franchisees are hopeful that the so-called “fiscal cliff” issues and the underlying issues will be resolved in a rational way, the prospect of higher taxes and ongoing governmental inaction may be the cause of this go slow approach. There is a lack of confidence in our leaders to address the fundamental challenges facing our economy in a way that doesn’t impede growth and doesn’t have a material impact on the cost of doing business. That causes people who might otherwise be prepared to make an investment in their business to stay on the sideline for the moment. Even if there is a resolution which gets us past the imminent issues, there is a belief that fundamental changes are going to be necessary in the way we spend and collect revenue.
To understand why this is happening, let’s start with a basic assumption that entrepreneurs and entrepreneurs-to-be are rational economic beings. By definition, they are prepared to take a risk if they can quantify the risk. But they will only take the risk if they believe that the rewards are greater than the risk they are about to take. There are many things that comprise risk –some internal and some external. The general state of the economy is an external factor since there is little ability to influence it. Typically, an improving economy has led to more of a willingness to take on risk and invest in starting a business or expanding an existing business. After all, in an expanding economy there will be more customers which should lead to more successful businesses. Likewise, the availability of capital to expand and low interest rates,
Dealing with Uncertainty
As business people, we would consider all options and make choices which make
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ex per t advice
Steven A. Rosen, Chairman Emeritus, FranNet
final outcome. We know that change is coming. However, until we know what the outcome might look like, we don’t know how change will affect our business, our customers, or our employees. We don’t know the cost(s) of change or how it will affect our profitability? At the moment we know or can estimate the answer, we will know our cost of capital and can compare it to the amount of return on capital we need to justify the investment.
sense. But we are dealing in the realm of politics, and in that realm the choices are political and because politicians serve multiple constituencies, the choices are not necessarily obvious. Added to the fact that there is a lack of confidence in our leaders to address the fundamental challenges, and the uncertainty that comes with that, the willingness to take risk has a profound effect on the economy in general and demands a higher reward to take risk. “Fiscal Cliff” is more than a one-time event. Instead, for business, it is a slogan and the issues are much broader than short term solutions. It is very difficult to make an investment if you don’t know the costs you can expect if you do invest, and what will be left over after everyone else takes their share of your earnings or perhaps, their share even before there are earnings. What is left over, after everyone but the investor has been paid, represents the return on investment. As with any other investment, return on investment must be great enough to justify the risk you are taking, especially as compared to utilizing your funds in alternative investments with their own separate risks and rewards. More uncertainty demands a higher
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return on investment to compensate for a greater risk assumed. It seems obvious that the uncertainty about taxes, the implementation of the Affordable Care Act, new banking and credit regulations and other factors, have an impact on the cost of doing business and profit –either positively or negatively depending on what our leaders decide. Rather than predict what government will do, and assume that what they do will maximize after tax return on capital, little is being done in the realm of business investment because of the uncertainty. Without certainty, the rational economic person moves cautiously before risking capital, since no one can predict expected return on capital. No one decision by a single person or a single decision deferred affects the economy, but when multiple decisions are made or not made, the overall affect is great. So, is this the reason(s) for the tepid growth in the number of franchises started? Surely there are other reasons. But no other reason is as obvious in light of the uncertainties we know about. We hear about them every day in the media, and they are the topic of conversation when members of the business community get together. There is no consensus on the
If we can find opportunities which give us the return on investment we need, after factoring in all the risks, we will move ahead. At that time we should see more businesses created and capital invested in expansion. Franchising, being the superior business model that it is, should see its growth resume and even accelerate. For now, however, caution is the rule of the day. Steven A. Rosen is Chairman Emeritus of FranNet, an international franchise consulting firm and President of Sunbelt Business Brokers of Pennsylvania. For the last two years, FranNet has been designated one of the fastest growing small companies in America by INC magazine. Sunbelt is the largest brokerage firm in the world and is engaged in the most transactions. As past President of the Pennsylvania Business Brokers Association, Steven has shown leadership in his field. Steven is a member of the following organizations: American Bar Association, Pennsylvania Bar Association, International Business Brokers Association, International Franchise Association, Pennsylvania Business Brokers Association and M & A Source. For More Information: Phone: 610-941-2195 Email: srosen@frannet.com Web: www.frannet.com/srosen
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