Franchising usa
Issue 8 - june 2013
T he ma g a z ine for franchisees
Jump Into Fr anchising With
Content Marketing:
A H o w -T o G u i d e
C o n s t r u ct i o n and Maintenance F r a n ch i s i n g F e at u r e LATEST NEWS
$5.95 www.franchisingusamagazine.com
Veterans in Franchising
Special supplement part III
FINANCIAL ADVICE FROM THE BANKS
TOP LAWYERS’ ADVICE
BECOME A BOCONCEPT FRANCHISEE
FRANCHISE OPPORTUNITY AVAILABLE NOW
From Shanghai to Stockholm. From Miami to Munich. From Caracas to Chelsea. And from Georgetown to Guatemala. You will find BoConcept Stores in most major cities around the world. With more than 60 years of experience in creating exceptional furniture tailored to the urban-minded shopper, we now have more than 250 global BoConcept Stores; all offering the customers a unique, exceptional and friendly shopping experience. A BoConcept franchise offers an experienced and solid franchisor with a proven, certified franchise concept. A modern furniture store with a product collection characterized by its customized and coordinated design affordable to the urban-minded shopper. A profitable business model with an internationally recognized brand. A turnkey operation with no inventory needed.
CA: San Diego, San Francisco, Santa Monica DC: Georgetown FL: Tampa, Miami IL: Chicago MA: Cambridge MI: Birmingham NJ: Paramus, Princeton NY: Carle Place, Chelsea, DUMBO, Madison Ave, Scarsdale, SoHo, Upper East Side PA: Philadelphia, King of Prussia TX: Austin, Dallas, Houston VA: Tysons Corner WA: Bellevue, Seattle Canada: Calgary, Toronto, Vancouver, Laval. For franchise opportunities, please contact franchise@boconcept-usa.com
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Franchising usa T he ma g a z ine for franchisees
FRANCHISING USA VOLUME 1, ISSUE 7 MAY 2013 publisher: Colin Bradbury. colin@cgbpublishing.com
EDITOR: Christie Hall. christie@cgbpublishing.com
SALES DIRECTOR: Vikki Bradbury. vikki@cgbpublishing.com
SENIOR SALES EXECUTIVE: Jenn Dean. jenn@cgbpublishing.com
DESIGN: Jejak Graphics. jejak@bigpond.com
COVER IMAGE: Rockin’ Jump
CGB PUBLISHING 676 Wain Rd. Sidney, BC V8L 5M5 CANADA Sales: 778-426-2446 Editorial: 778-426-3452 www.franchisingusamagazine.com
Proud member of the IFA:
SUPPLIER FORUM International Franchise Association 1501 K Street, N.W., Suite 350 Washington, D.C. 20005 Phone: (202) 628-8000
from the
Editor Franchising USA Visits the City that Never Sleeps You have decided to buy a franchise. Now what? You likely have a million questions. Our goal with Franchising USA online and digital magazine is to provide you with answers to those questions. Our Expert Advice writers offer up their knowledge and experience on a range of topics in each issue, from financing to retirement. We make a point of profiling some of the most successful people in the franchise industry so that they can share practical advice on how they have made franchising work in their lives. And we are pleased to hi-light some of the best franchise companies in the industry, to give you an inside look at what you can expect as a franchisee. But if you’re looking for more, if what you need is the chance to speak face to face with representatives from hundreds of top franchises, then you will want to join us at the International Franchise Expo. On June 20-22 at the Javits Center
in New York City, we will be joining with a large number of exhibitors to showcase what we have to offer to you, the prospective franchisee. The International Franchise Expo, sponsored by the International Franchise Association, is a fantastic opportunity to: • Meet over 400 of the top franchises. • Take Advantage of 70 Free Seminars and In-Depth Symposia. • Get the help you need in deciding which franchise is right for you. • Find out what you need to know as new franchisee. • Discover industries that are new, or that you might not have considered. • Get advice on the wide range of financial options from experts. • Talk face-to-face with hundreds of the best franchise opportunities expanding in our area! We will be located at Booth #771. Please visit us to say hello, gather information, and receive a free give-away. We look forward to seeing you there!
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.
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On the Cover
Jump Into Franchising With Rockin’ Jump
27 Construction and Maintenance
66 Content Marketing: A new take on
an old idea
Kelly Maguire, AviaTech
Franchising Feature
20
Part Three
24
june 2013
33 Veterans in Franchising Supplement –
10 Cover Story
14
f ra nchising usa
Contents In Every Issue 06 Franchising News Announcements from the industry 27 Feature Article Construction and Maintenance 24 Women in Franchising Shelly Sun 75 About Franchising – from the IFA Lending to Franchises Reaches Highest
Level Since Recession
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27
Expert Advice
20 Alternative Financing Justin Ruschell, Universal Business Advisors 22 National or Local PPC for Franchise Brands? Tim Miller, Location3 Media
70
14 Attracting the Right Franchisees in the Homebuilding Industry Darren Wallis, G.J. Gardner Homes
66 Content Marketing: A New Take On An Old Idea Kelly Maguire, AviaTech 70 Negotiating Commercial Leases and Renewals For Dummies Dale Willerton, The Lease Coach
59
59 Should I Buy an Existing Business or Open a New One? Daniel Brunell, Dearborn West
74 The Hidden Realities in Franchise Financing Edward Levitt, Aird & Berlis 80 The Dilema of Buying a Franchise
Jack Eberenz and Marcy Maslov, Franchise Integration
Franchisor in Depth 16 ReBath 76 BoConcept
Franchisee in Action
Franchise Profiles 12
FirstLight Home Care
22
62 Bennigan’s
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what’s new! Kinderdance® Ranks High on Bonds Top 100 Franchises Kinderdance® International has been recognized by Bonds Top 100 Franchises in the annual 2013 5th edition. Bonds Top 100 Franchises is the industry’s most respected authority on franchise selection process picks Kinderdance as a proven franchise performer! Kinderdance®, established in 1979 is a nationally recognized dance, gymnastics and fitness program for children age’s two to twelve. Their 124 Franchisees currently teach over 12,000 children weekly at over 800 various locations in 30 states and 9 countries. Classes are held on site in child
care centers, recreation centers, hospitals, military bases, bowling alleys, fitness centers and many other locations that have space that can be utilized as an additional learning center. Kinderdance® places emphasis on building self-confidence and self-esteem in children through learning to share, lead, interact and respond to others’ needs as well as their own. The programs incorporate the arts, movement, education, music, fitness and the fun of learning into a young child’s life. Contact: www.kinderdance.com
ALPHAGRAPHICS ANNOUNCES MULTI-UNIT ENTERPRISE INVESTMENT OPPORTUNITY FOR FRANCHISE DEVELOPMENT AlphaGraphics, Inc., a global leader in marketing and print communications solutions, announced today the introduction of an innovative enterprise-level franchise option for new and existing franchisees. Since introducing the enterprise investment opportunity late last year, AlphaGraphics has signed four new multi-unit franchise agreements, bringing the hub and spokes model to Ohio, Tennessee, New Mexico and Texas. “AlphaGraphics welcomes these new multi-unit franchisees to our growing system, and we look forward to working collaboratively to open the first AG Studio,” said Dave Buzza, vice president of global development. “We’re proud to launch this new investment opportunity, which is designed to provide franchisees an opportunity to purchase rights to a larger territory right at the beginning. These franchisees will own and operate multiple AlphaGraphics centers; one main production center with smaller AG studios (sales offices) in nearby locations designed to drive business to the main hub center. By purchasing the multi-unit package at the beginning, franchisees strategically lock in a larger area at an attractive investment level.” The AG Studio concept allows franchisees to invest in one AlphaGraphics production center and build out an additional one
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or two satellite centers in surrounding territories. These satellite offices will feed the main AlphaGraphics production center, maximizing production capacity in a shorter time frame. The franchise fee for the main center is $59,000, and each additional AG Studio franchise fee is $10,000 – an attractive option to buying individual centers multiple times at $59,000 a center plus equipment fees. “AlphaGraphics has experienced strong initial interest in this new development model as it caters to forward looking, executive level prospects that are strategically seeking to own a specific market and develop a strong business enterprise,” said Buzza. “With four signings already, the AG Studio concept is proving to be a catalyst for the brand’s record signings this year.” Contact: www.alphagraphicsfranchise.com
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the third year in a row now,” says Mark Kushinsky, CEO of MaidPro. “We have always strived to create a workplace that is positive, challenging and always peoplefirst. It’s great to know that our employees are so passionate about MaidPro, and that we have created an environment where they can truly thrive.”
MaidPro was one of over 400 companies to qualify for consideration based on a two-stage nomination process and the results of employee-satisfaction surveys taken throughout March & April.
The survey project was launched in January by the Boston Business Journal in conjunction with market research firm Quantum Workplace of Omaha, NE. Companies were evaluated on the results of more than 18,000 employeesatisfaction surveys. Employees answered questionnaires that addressed such factors as their pride in the company, company encouragement, support and recognition of achievement and relationships with coworkers and supervisors. The results were analyzed and scored by assigning points to each question.
“We’re honored to receive this award for
Contact: www.maidprofranchise.com
MaidPro: A 2013 “Best Places to Work” Winner The Boston Business Journal has named MaidPro the top-rated maid service for franchisee satisfaction as one of the Best Places to Work in Massachusetts in its eleventh annual regional awards program. The honor recognizes MaidPro’s achievements in creating a positive work environment that attracts and retains
employees through a combination of employee satisfaction, working conditions and company culture.
CiCi’s Pizza to Co-Own Locations with Franchisees through new Investment Program CiCi’s Pizza, home of the endless pizza buffet, set a precedent for creative “equity partnership” with the launch of the 2013 Franchisee Partner Investment program. CiCi’s Pizza created a special fund to break down the barriers of franchise financing and stimulate new restaurant development. For qualified new and existing multi-unit operators who sign a development agreement CiCi’s Pizza will commit $100,000 of equity per store; the franchisee is required to invest a minimum of $125,000 per store. The program is available in select U.S. markets and applies only to new or existing multi-unit franchisees that will develop two or more new restaurants within five years.
“Every franchisee wants to know that their franchisor has skin in the game, and there is no better way to show how confident we are in our business model than to invest alongside our franchise partners,” said Thomas McCord, VP of Real Estate and Franchise Development at CiCi’s Pizza. “This program provides the franchisee the ability to secure financing with a 40 percent equity position.” CiCi’s Pizza also offers an additional incentive to those franchisees who pay back the corporate investment early. In doing so, CiCi’s will reinvest those funds with the franchisee in their next store. The new investment program is part of the company’s overall strategy to spur growth in new or underserved markets,
including Los Angeles, San Diego, Salt Lake City, Washington D.C., Chicago, Miami and St. Louis. Looking to attract multi-unit operators with proven restaurant experience, CiCi’s Pizza offers four distinct revenue streams: the custom buffet, catering, To Go and the game room. Varying business prototypes (ranging from 1,200 - 3,600 square feet) also allow franchisees to maximize their market penetration and profitability. Contact: www.cicispizza.com
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what’s new! TITLE Boxing Club® Fitness Franchise Opens 100th Club Capitalizing on the $20 billion fitness industry, TITLE Boxing Club announced today the opening of their 100th club location, signifying a new company milestone for the quickly growing fitness concept that began franchising less than three years ago. The largest boxing franchise in the nation will open its 100th club in Fishers, Ind. on May 15. This club is owned by Dan Hannay and will boast the brand’s POWER HOUR workout that burns up to 1,000 calories per hour. The Fishers club will be the second location in Indiana for the brand. Another club, also owned by Hannay, is already operating in Indianapolis. With extensive experience in director and managerial positions along with multi-unit business management, Hannay’s skill set quickly transferred into success as a TITLE Boxing Club franchisee. “TITLE Boxing Club has quickly become the go-to fitness club for workout enthusiasts and beginners alike,” said Dan Hannay, Owner of TITLE Boxing Club of Indianapolis and Fishers. “Opening
the 100th club in the system is an exciting accomplishment and we can’t wait to bring this tremendous workout to the residents of Fishers.” The 100th opening comes on the heels of an explosive start to the year for TITLE Boxing Club. In January 2013 the company had 85 open clubs and nearly 350 under development. On pace to open 12-15 new clubs per month through the end of 2013, the brand proves to have found a niche in the saturated fitness industry and is quickly becoming one of the fastest growing franchises with clubs operating in 27 states across the U.S. “TITLE Boxing Club has created a unique business and fitness opportunity for people,” said John Rotche, President of TITLE Boxing Club. “We have been able gain momentum by building a strong franchise model so that owning and operating a club is easy and profitable while also providing a workout that helps members reach their goals and leaves them feeling empowered.” Contact: www.TITLEboxingclub.com
Property Management Inc. Makes Entrepreneur Magazine Top New Franchises For 2013 In the March 2013 Issue of Entrepreneur Magazine, Property Management Inc. (PMI) was selected in the Entrepreneur Top New Franchises List for 2013. The article explained that franchises that were started in the last five years were ranked “according to Entrepreneur’s objective, quantifiable criteria, including financial strength and stability, growth rate and system size. “ Other factors were also considered.
Franchising USA
PMI was founded in 2008 and provides complete commercial and residential property management solutions for franchisees that include revenue generating products and services, proprietary Search Engine Optimization (SEO), lead generation systems, property management and accounting software, and marketing materials as well as training and ongoing support. Contact: www.propertymanagementinc. com
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MASSAGE ENVY NAMED TO 2013 MILITARY FRIENDLY FRANCHISES® LIST clearance and more than three decades of management experience, who is now a new owner of a Massage Envy clinic planned for Virginia. “The extensive management and supervision experience I gained from the military, coupled with the support and structure from Massage Envy corporate, made the decision to become a franchisee an easy one for me.”
Largest Franchised System of Massage Clinics in Industry Recognized for its Focus on Veterans. Massage Envy, the pioneer and national leader of professional, convenient and affordable massage and spa services, has been recognized among the top 10 percent of franchise companies named to the 2013 Military Friendly Franchises® list. Compiled by Victory Media, publisher of G.I. Jobs, the list highlights those companies that provide veterans with the best financial incentives and training, and which have the highest number of veteran franchisees. “I am proud to be a part of a company that values veterans and the qualities that we bring to business ownership,” said James “Ollie” Oliver, a 21-year Air Force veteran with a Top Secret security
Massage Envy has made it a priority to recruit franchise owners with military experience. The company, a proud member of the International Franchise Association’s VetFran Program, offers a discounted franchise fee to veterans and has implemented a marketing program to educate and recruit veteran franchisees. “Massage Envy values our nation’s veterans – not only for their service – but for the strong skills and qualities they bring to business ownership,” said Dave Crisalli, president and CEO of Massage Envy. “These franchisee candidates have the principles of leadership that are essential for a successful business, and we are thrilled to be able to offer them opportunities in the wellness industry.” The full list of Military Friendly Franchises will be published in the June issue of G.I. Jobs, and on www.militaryfranchising.com, a web tool that helps veterans decide which franchise to choose. Contact: www.massageenvyfranchise.com
SUBWAY® Restaurant Chain to Add 3,000 Locations Worldwide in 2013 With more than 2,000 franchisees actively searching for locations, the SUBWAY® sandwich chain has aggressive growth plans for 2013. The SUBWAY® chain is growing and continues to forge ahead with new opportunities in traditional shopping centers, malls and free standing locations as well as non-traditional venues such as hospitals, colleges, sports arenas and airports. Since this past January, the SUBWAY® chain has opened about 800 new stores in 54 countries, 9 Canadian provinces, and 46 U.S. states plus the District of Columbia, which equates to nearly one million square feet of prime commercial retail space. In total, SUBWAY® franchisees lease nearly 47 million square feet of property around the globe.
restaurant chain, in terms of number of locations. From 100 to 5,000 square feet, SUBWAY® restaurants come in all shapes and sizes. Because of the chain’s unique business model, which has minimal equipment and space requirements, a SUBWAY® restaurant can operate just about anywhere. To illustrate how flexible the SUBWAY® concept is, unique locations include factories; car showrooms, museums, a church, a Goodwill training center, and there’s even a floating SUBWAY® restaurant aboard a river boat in Europe. Contact: www.subway.com
Most recently, the SUBWAY® chain reached the milestones of 39,000 locations worldwide and restaurants open in 102 countries. The SUBWAY® franchise system is now the world’s largest
Franchising USA
cover stroy
Rock in’ Jump
jump into F ranchisin g with
Rockin`
Jump
practicing that perfect flip, and of course plenty of room just for jumping. Rockin’ Jump provides an amazing combination of fitness and fun that is a great alternative form of entertainment for all ages. Indoor trampoline parks are not a new concept, but the Rockin’ Jump business model has a number of unique features which sets it apart from the competition, resulting in consistently positive reviews, high customer loyalty, and praise from the communities where they currently operate.
Whether it’s a fun night out with friends, a corporate event, or a child’s birthday party, Rockin’ Jump – The Ultimate Trampoline Park® - is the place to make it happen. Rockin’ Jump was established in 2010 when the Collopy and Wilson families of Northern California put their heads together to come up with a family activity concept that would be safe, fun, and focused on fitness. Out of their combined
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experience in construction, hospitality, food & beverage, and entrepreneurship, they built the first Rockin’ Jump location in Dublin, CA. In 2012 a second location opened in San Carlos, CA, and a third location has recently opened its doors in San Jose, CA. Their parks range from 16,000 to 25,000 square feet typically. With 10,000 square feet of pure trampoline jumping space, and another 6,000 to 15,000 square feet of guest and entertainment space, there is room for everyone at Rockin’ Jump. Areas can be sectioned off for little ones just learning to jump, and parents with young kids can enjoy private jump time sessions together. There are also areas for dodge ball and basketball, giant foam pits for
A focus on hospitality is one of the keys to Rockin’ Jump’s success. Guests of Rockin’ Jump receive unexpectedly good service at every turn. Birthday party hosts are on hand and engaged to ensure the celebration is enjoyable for everyone, kids and parents alike. Safety monitors, called Jump Patrol, are focused and attentive. Lounge areas are comfortable and relaxed. And the food and beverage service is top notch. Rockin’ Jump ensures that each guest experience is complete & positive. Safety is another critical factor for the Rockin’ Jump team. In fact, safety is such a priority for the company that they have developed and trademarked a safety program called JumpSafe™. This program provides information for staff and guests to ensure that every experience at Rockin’ Jump is Safe. Clean. Fun.™. Jumping on a trampoline is not only a great form of exercise, burning the same amount of calories in 10 minutes as you would burn running for 33! (Journal of
“Indoor trampoline parks are not a new concept, but the Rockin’ Jump business model has a number of unique features which set it apart from the competition, resulting in consistently positive reviews, high customer loyalty, and praise from the communities where they currently operate.” Applied Physiology, 1980 NASA research study). It is also very safe, when done properly in a controlled environment. The specially trained Jump Patrol members are on hand at Rockin’ Jump to reinforce key safety rules in a professional and friendly manner. The cost structure is reasonable as compared to other businesses and staffing for an exceptional level of safety and hospitality only requires 20 percent of each location’s annual spending. To share their concept with the communities in which they do business, Rockin’ Jump has chosen an unexpected marketing route, directing over 60 percent of its marketing budget to community marketing outreach and non-profit donations. By sponsoring intramural children’s sports leagues, local schools’ sports teams, and sponsoring community events and festivals, Rockin’ Jump franchisees are establishing relationships with people in their local market while evangelizing the Rockin’ Jump brand,
and acting as a good steward for the community. Currently each Rockin’ Jump location contributes in the range of $75,000 per year towards community programs and organizations through these marketing channels. In addition, each Rockin’ Jump park employs 35 – 45 young people. Rockin’ Jump’s strong focus on hospitality and safety training prepares these youth for more mature roles upon graduation from their respective high schools and colleges. As the Rockin’ Jump brand has grown and fine tuned its operations & marketing procedures in California, franchise opportunities are now available throughout the United States and Canada. This presents a unique and exciting opportunity for prospective franchisees looking for a new and active business challenge, one which will keep them close to home and involved in their community. Typically, Rockin’ Jump franchisee prospects will have $400,000 in liquid
cash assets, and a net worth of $1 million. That’s a significant investment, but that investment pays off with $2.0+ million gross sales, and net profits of over $800,000, or 39 percent, annually.* Once a new franchisee is established, the Rockin’ Jump team offers superior support and guidance as the new location is built, opened and for the life of its operation. Rockin’ Jump will be on site at the International Franchise Exhibition on June 20-22 in New York City. Make sure you stop by booth #252 to meet the team from Rockin’ Jump and to find out if Rockin’ Jump is the opportunity you’ve been looking for. [*Figures obtained from Rockin’ Jump’s Dublin, California location as published in Item 19 of its 2013 Franchise Disclosure Document (FDD). A new franchisee’s results may differ from the represented performance. There is no assurance that you will do as well, and you must accept that risk.]
For More Information: Web: www.franchise.rockinjump.com
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FirstLight HomeCare
A Whole
NEWand Truly
EXCEPTIONAL APPROACH to Non-Medical In-Home Care
&AMILIES ALL OVER !MERICA ARE FACING THE SAME CHALLENGES OF CARING FOR THEIR LOVED ONES WHILE HELPING THEM THRIVE INDEPENDENTLY IN THE FAMILIARITY COMFORT AND SAFETY OF THEIR OWN HOMES -ORE THAN A NATIONAL NETWORK OF IN HOME CARE FRANCHISES &IRST,IGHT (OME#ARE REPRESENTS A NEW WAY OF CARING FOR PEOPLE AND GIVING THEM THE QUALITY OF LIFE THEY DESERVE ,ED BY A TEAM OF PROFESSIONALS WITH OVER YEARS OF COMBINED EXPERIENCE IN OPERATING SUCCESSFUL HEALTHCARE AND HOME CARE SERVICES ORGANIZATIONS WE TAKE OUR KNOWLEDGE AND COMMITMENT TO EXCELLENCE AND APPLY IT TO A PEOPLE ½RST PHILOSOPHY THAT FOCUSES ON CREATING REAL PERSONAL CONNECTIONS AND TAKES THE HOME CARE MODEL TO NEW HEIGHTS
!N )NDUSTRY 4AKING 3HAPE )N MORE THAN PEOPLE TURNED EVERY DAY "Y THE SENIOR POPULATION WILL GROW TO NEARLY MILLION The demand FOR SERVICES IN THE SENIOR CARE INDUSTRY CONTINUES TO INCREASE EVERY YEAR FUELED BY A COMBINATION OF FACTORS „ 4HE BABY BOOMER BUBBLE BEGAN TOUCHING RETIREMENT AGE AT IN „ -EDICAL TECHNOLOGIES ARE ENABLING SENIORS TO LIVE LONGER MORE ACTIVE LIVES „ $UAL INCOME FAMILIES ARE THE NORM TODAY AND MORE FAMILIES ARE STRUGGLING WITH THE CARING FOR THEIR AGING PARENTS AND THEIR OWN CHILDREN „ !!20 SURVEYS REPORT MORE THAN PERCENT OF SENIORS PREFER REMAINING IN THE COMFORT OF THEIR OWN HOME TO MOVING TO A NURSING HOME OR ASSISTED LIVING CENTER 0LUS &IRST,IGHT SERVICES HELP MORE THAN JUST SENIORS 4HE SAME COMPLETE COMPANION AND PERSONAL CARE SERVICES ARE OFTEN NEEDED BY NEW MOTHERS THOSE RECOVERING FROM SURGERY THOSE WITH DISABILITIES OR ANY ADULT NEEDING A little assistance.
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/UR #ULTURE OF #ARE AND THE $ESIRE TO 3ERVE
!T &IRST,IGHT (OME#ARE EVERYTHING WE DO IS BASED IN OUR #ULTURE OF #ARE PHILOSOPHY 4O ACHIEVE THIS WE LOOK FOR PEOPLE WHO ARE PASSIONATE ABOUT SERVICE AND WANT TO BUILD A HIGH POTENTIAL BUSINESS WHERE THEY CAN SERVE SENIORS THEIR FAMILIES AND THE COMMUNITIES IN WHICH THEY LIVE !RE YOU OUTGOING $O YOU ENJOY BEING AROUND PEOPLE $O YOU ENJOY HELPING OTHERS $O YOU ENJOY A FAST PACED ENVIRONMENT AND UNDERSTAND THE VALUE OF GREAT SERVICE 4HESE ARE THE QUESTIONS WE EXPECT POTENTIAL FRANCHISEES TO ASK THEMSELVES !ND WHILE SOME BUSINESS OR RELATED EXPERIENCE IS HELPFUL HEALTHCARE EXPERIENCE IS ./4 REQUIRED
! 'REAT /PPORTUNITY FOR #OUPLES OR 4EAMS
! &IRST,IGHT (OME#ARE FRANCHISE IS A GREAT OPPORTUNITY FOR COUPLES OR A TEAM OF PEOPLE 7E ½ND OUR FRANCHISE OFFERING HAS STRONG APPEAL TO MANY HUSBAND WIFE TEAMS OR OTHER FAMILY PARTNERSHIPS ENTREPRENEURIAL MINDED WOMEN VETERANS AND EARLY RETIREES LOOKING FOR a second career.
The first step to becoming a FirstLight HomeCare franchise is letting us know that you’re interested. Visit www.FirstLightFranchise.com or call 1.877.570.0002, and let’s get started. 1. Source: The Department of Health and Human Services and the State Department
Page 13
%842!/ 2 $) . !29 0 % / 0 , % %8# % 04) / . ! , #! 2 %
Build A Business that
MAKES A DIFFERENCE „ &AST GROWING NON MEDICAL in-home care industry „ -AJOR MARKETS AVAILABLE NATIONWIDE „ $EEP INDUSTRY EXPERIENCE WITH TRACK RECORD OF SUCCESS „ 5NMATCHED TECHNOLOGY PLATFORM „ )N FIELD SUPPORT TRAINING and tools „ .EWEST FRANCHISE SYSTEM %6%2 TO BE RANKED IN 4OP FOR OWNER SATISFACTION
/UR #ULTURE OF Care Promise: !T &IRST,IGHT (OME#ARE THE GENUINE HEALTH AND WELL BEING OF others is our greatest concern. We VOW TO PROVIDE ½RST CLASS PERSONAL SERVICE FOR OUR CLIENTS SO THAT THEY MAY ENJOY WARMTH INDEPENDENCE AND RELAXED COMFORT IN THEIR OWN home or any setting.
877.570.0002
info@firstlighthomecare.com www.firstlightfranchise.com
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ex per t advice
Darren Wallis, CEO, G.J. Gardner Homes
A tt r act i n g th e r i ght f r a n ch i s e e s in the homebuildin g industry No matter the industry, all franchise systems face challenges and demands that are unique to their trade. Finding suitable franchisees is a challenge for franchisors across the globe. Hard to believe, given the perks and benefits of joining an established franchise system. For the construction industry, for example, franchisees save money through sharing plans, training and ongoing support, the selling power of a known brand, lower costs through group purchasing and the use of an established business model, just to name a few. One of the best parts of my job as CEO of global homebuilding company, G.J. Gardner Homes, is helping builders by giving them skills, resources and systems to take them to the next level of their careers, in turn contributing to the future
Franchising USA
growth of the company. But first you need to get the right people on board. In my experience, finding the right franchisee can be difficult. When dealing with a person’s home, livelihood or large investment, finding a franchisee you can trust is critical because it can make or break your reputation. The right franchisee brings local knowledge and a strong understanding of who their customers are; they focus on the customer and know what delivers results. Whether it is a homebuilding, renovation or remodelling franchise, it’s important to remember franchisees are dealing with the largest asset a person may ever own. Franchisees need to have exceptional customer service skills, be a brand ambassador for your company and share mutual long-term goals to ensure the success of a franchise unit and the brand as a whole. The challenge for franchisors in the construction industry is attracting people who not only possess these attributes, but who are also skilled craftsmen. Experience is key to becoming a franchise owner in the homebuilding industry. Alternatively, a business-minded person with limited experience in the industry could choose to partner with someone who has the right practical experience to ensure they have the complete skill-set required to operate a successful franchise. What this means for franchisors or master franchisees looking to expand
“Experience is key to becoming a franchise owner in the homebuilding industry.” is that unfortunately there is only a very small pool of candidates who have the right skills to join their business. It also means traditional methods for attracting franchisees, such as mainstream print and online advertising or franchising exhibitions, are not as effective in the construction industry, which calls for a more targeted and tailored approach. In my experience, the best approach to finding the right franchisees is networking with builders. On an ongoing basis, my team and I seek out opportunities where we can get in a room with people who are relevant to our brand and message. And while there are many benefits of operating under a franchise system for a stand-alone builder, the most invaluable benefit is the protection of being a part of a recognisable brand and a company with a good reputation. Strengthening the brand and improving the reputation of a construction franchise isn’t just the most effective way to attract customers, it will attract builders and construction workers who share the same values and mutual goals who would be proud to act as a custodian for the franchise brand. Many people think building the brand is only executed through advertising, but it’s much more than that. A consistent approach to the company’s brand is an important first step to strengthen a brand, but a reputable brand is built by existing franchisees that have provided reliable products and services and have satisfied customers through their business. Branding and reputation is important to all business, but it plays a larger role in the success of construction and homebuilding franchises due to the large financial and emotional investment by customers. Unlike franchises in industries selling
food or consumer goods, for example, customers and potential franchisees alike will not take a risk with a homebuilding company that has received negative reviews and feedback from friends or family. With the rapid growth of social media and popularity of online reviews, now more than ever franchisors have to be aware of negative feedback circulating about their brand that can and will deter customers and potential new franchisees. For my company, the best defence for negative attention is to always deliver quality products on time and on budget. Strong word of mouth from customers is your brand’s best advocate and will ensure the reputation and growth of your franchise system. By operating a construction franchise that is trusted, reputable and experienced, franchisors will attract quality, businesssavvy builders who are looking to run a franchise of their own. Effectively, the brand will act as its own advertisement for the right franchisees. I am a firm believer that employing the right people to work in a construction franchise is the key to success. It is for this very reason that the main challenge of operating a successful franchise continues to be finding suitable franchisees to grow your business and your brand.
About G.J. Gardner Homes Founded by Greg Gardner in 1983, the group is Australia’s most experienced and trusted homebuilder, having built more than 25,000 custom homes in Australia, New Zealand and the United States since its establishment. G.J. Gardner Homes now has an international network of more than 111 G.J. Gardner Homes franchises and
Darren Wallis
an annual turnover of more than $525 million. Over the past 12 months, CEO of G.J. Gardner Homes Darren Wallis, has successfully positioned the company as a leader in homebuilding in Australia, New Zealand and the United States. According to the recently released HIACOLOURBOND, Steel Housing 100 report, G.J. Gardner Homes is the 8th largest builder and the 7th largest detached house builder in Australia. In New Zealand, G.J. Gardner Homes is currently the number one residential builder. A finalist for CEO Magazine’s Construction Executive of the Year, Wallis has a passion for generating business that will see the G.J. Gardner Homes franchise reach new heights in the coming years. G.J. Gardner Homes currently has 57 franchises in Australia, 26 in New Zealand and 28 in the United States with a growing team of 855 employees. For More Information contact Trent Gardner at : Phone: 310-426-4812 Email: Trent@gjgardnerhomes.com Web: www.gjgardnerhomes.com
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f ra nchisor in depth
Re-Bath ® a nd 5 Day K itchens™
RE-DOING IT RIGHT R e - B at h ® a n d 5 D ay K i t c h e n s ™ D o m i n a t e R e m o d e l i n g M a rk e t Home renovations can be a pain. Anyone who has lived through a botched kitchen or bathroom remodel can tell you that; work can stretch on longer than expected, costs pile up, and sometimes the finished product is nowhere near what you had hoped for at the start. Franchising USA
Fortunately, Re-Bath® and 5 Day Kitchens™ have their clients covered. To customers, these remodelers offer a single point-of -contact, timely installation, and exclusive products they won’t find anywhere else, all while adding to the overall value of any home. To franchisees, they offer a known name with thirty years of combined experience, literally millions of jobs completed, and over 200 franchises worldwide, mainly in the United States. This edition of Franchisor in Depth takes a closer look at where these two franchises come from, where they stand today, and what their future may hold.
A History of Success As VP of Sales and Marketing for
American Bathtub Liners, Dave Sanders’ work largely focused on the hotel/motel industry. Business was good, but in August of 1989, Sanders began receiving calls from dealers looking to represent their products in the residential market. Before long, a nation-wide distributor network began taking shape. Dave convinced Kurt Kittleson, one of the founders of American Bathtub Liners, to start selling dealerships for bathroom fixtures which also offered remodeling services. In 1992, they cofounded ReBath® with Sanders as its president. By the end of 1992, they had franchised the idea, and high demand for home bathroom renos helped propel Re-Bath® to its current-day success. By 2000, they had
“Our owners are in business for themselves, but not by themselves. Once they become partners within the Re-Bath® and 5 Day KitchensTM network, they’re given the tools and resources necessary to succeed.”
awarded their 100th franchise, making them the largest in the industry, and doubled in size over the next six years. It’s a business with a proven track record of success, and they stand by it: to this day, Kurt Kittleson owns a Re-Bath® franchise in Phoenix, AZ. In 2008, Albuquerque, NM franchisee Tom Poulin set to work on developing a business which would mimic the fast, efficient installation and unique product offerings of his Re-Bath® operation, and apply those qualities to the kitchen remodeling market. Over the next few years, Tom and his team developed the ‘5 Day Kitchens™’ business model in New Mexico. Re-Bath® purchased the concept in 2011 and in 2012, they placed their
first franchise in Phoenix. The network has since grown rapidly, with five other locations popping up in Great Bend, KS, Atlanta, GA, Henderson, NV, Tucson, AZ and Omaha, NE in the past year alone. And that first 5 Day Kitchens franchise? You guessed it: that’s Kurt’s, too.
Exclusive Products, Peace of Mind Just because Re-Bath® is the biggest in the business doesn’t mean it’s willing to rest on its laurels. The company is constantly innovating, making changes to products and services. As Charles W. Mudd, Vice President of Franchising of Re-Bath® explains, “All of our shower bases, bathtub liners, bathtubs and wall surrounds are
made from our proprietary DuraBath® SSP which offers the industry’s highest ratings on performance and durability. The high-gloss finish doesn’t dent, rust, crack or peel, and as a result, it’s also easier to clean.” 5 Day Kitchens™, meanwhile, aims to put the client at ease about their latest home improvement project. From the showroom floor, customers are assigned a dedicated design consultant, who guides them through every step of the process, from start to installation. Instore, this consultant aides in selecting colours, textures, countertops, flooring and other details. Next, they move on to the customer’s home, making final measurements and even providing a 3-D rendering of their new kitchen, before work on the remodel even begins. After this phase, the company guarantees one contractor accountability. As Mudd explains, “we limit the number of crew members coming and going as well as provide both the customer and installation team with a start-to-finish checklist, to ensure speed, accuracy and accountability throughout the remodeling process.” This arrangement ensures that 5 Day Kitchens lives up to its name.
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f ra nchisor in depth
Re-Bath ® a nd 5 Day K itchens™
“In Business for Yourself, but Not by Yourself” When asked to describe an ideal franchisee, Mudd paints one with broad strokes. “Our prospective franchisees,” he says, “have various backgrounds and diverse skill sets. But they all have those core entrepreneurial traits, that energy fueled by the desire to control their own future.” Hhe then lists off those values most important to the aspiring ReBath® or 5 Day Kitchens™ franchisee: trustworthiness, passion, a great work ethic, fairness, discipline, and a history of success. In terms of what Re-Bath® and 5 Day Kitchens™ have to offer the prospective franchisee, Mudd is quick to point out that remodeling businesses, being engaged in a labor-intensive, service-oriented industry, don’t face competition from online sources. As well, their business has been surprisingly recession-resistant, as many are looking to increase the value of their current home. Beyond this, Mudd continues, “our owners are in business for themselves, but not by themselves. Once they become partners within the Re-Bath® and 5
Franchising USA
Day Kitchens™ network, they’re given the tools and resources necessary to succeed.” These tools include a twoweek training course which navigates all aspects of the business, from operations through management, sales, marketing, and installation. Dedicated franchise consultants are assigned to provide coaching and mentorship to new and existing owners. In addition, both franchisors offer continuing education through their exclusive university and training programs. Centralized marketing programs also make running complex ad campaigns and media buys simple and affordable.
Lessons (and Opportunities) for Anyone When asked what lessons the company has learned over 30 years and millions of jobs, Re-Bath® and 5 Day Kitchens™ provide three. First, aim to expand: by offering additional brands under their Home Brands Group umbrella of products, Re-Bath® and 5 Day Kitchens™ franchise partners are able to constantly broaden and diversify their service bases. This proliferation of products means more opportunities to capture and maintain a
presence in the current market. Second, be consistent and selective in whom you award your brand to. As Mudd explains, “Entering into a relationship with the wrong partner can prove to be a shortterm gain for long-term loss.” Lastly, this: always under-promise and over-deliver. In this line of business, as in so many others, expectation management is key, and it’s always best to deliver more than what the customer expected going into a project. As separate entities, Re-Bath® and 5 Day Kitchens™ offer unique opportunities for any prospective franchisee in the home remodeling market. Re-Bath® franchising offers decades of expertise and a known brand nationwide. Meanwhile, investing in a 5 Day Kitchens™ franchise offers an exciting start-up with a proven model, poised for rapid expansion. For potential franchisees, it may even be difficult to make a choice between the two perhaps they’ll do as Kurt Kittleson did, and open up one of each, combining the best of both worlds. For more information on franchising with Re-Bath®, visit www.rebath.com. For more on 5 Day Kitchens™, visit www.fivedaykitchens.com.
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With a range of mobile platforms
for any device, when potential franchisees search for new possibilities, they’ll find you here.
Contact Jenn Dean, Senior Sales Executive, for global solutions on your multi-media advertising approach. Email: jenn@cgbpublishing.com Phone: 250-590-7116
www.franchisingusamagazine.com
ex per t advice
Justin Ruschell, Universal Business Advisors
Alternative Financing Although we cannot claim to be the originators of this new wave of creative financing, we can say we have refined it to the point to offer the business owner the best options to obtain the money they need.
“There are companies that will promise you the world to get your business, that’s not us; we are upfront and clear about everything. We value the longevity of the relationships we build with our clients.�
Franchising USA
More and more business owners struggle to acquire funding to either start up or grow their business. We have heard the pain from these entrepreneurs and taken measure to ensure the financing they need. Through creative measures we have turned NO into YES on funding applications. We have multiple platforms to assist the modern business owner in achieving their goal of financing. It has been said that more than 80% of businesses fail within the first year due to under capitalization. We agree that without the right team backing a business, it can fail. Universal Business Advisors is not a one-time solution; we are an ongoing support system for all financial need. We offer unlimited consulting free of charge because we understand the importance helping business startups. Banks prey on the weak and uninformed; we are changing the nature of the game. Even the newly established business can qualify for one of the programs we offer.
3 Special Ways to Secure Creative Financing Unsecured Business Lines of Credit (UBLOC)While most consumers seek the traditional route of financing through the bank, they are often given the same response. “Sorry sir you do not qualify for a business loan.” Banks today require many items to achieve “Startup Loans” , which can include 15%30% cash up front, 5 year business plan, 2 years industry experience, 2 years business financials, 2 years already established and of course collateral. UBA on the other hand, offers a non-collateralized, zero upfront cash loan solely based on the individual credit report. On average our clients receive between $60,000 and $100,000, occasionally acquiring over $120,000 per applicant. This program is built to assist any business owner and retrieve funding in a matter of days and not months. Now because we are utilizing the personal credit report for financing we have a stringent underwriting system, we can approve you! Like most banks, we require credit scores 720 and higher, occasionally excepting clients with scores down to 680. We look at the “meat and potatoes” of the credit report. Such items as: • Balance to limit ratio on credit lines • The amount of inquiries within the past year • Public records section (tax liens, bankruptcies, judgments) • Derogatorys on accounts (missed payments) • Collection accounts • Length of time the credit line has been established • Type of credit line • Debt to income ratio
• Mortgages • Auto loans • Student loans All of these weigh in on the amount you are approved for and the interest rate you acquire. While we cannot offer the interest rate ourselves; UBA fights to get you what you deserve! There are companies that will promise you the world to get your business, that’s not us; we are upfront and clear about everything. We value the longevity of the relationships we build with our clients. That is why we offer lifetime consulting at no charge, so that any point in you can call us with any questions.
MCA A Merchant Cash Advance was originally structured as a lump sum payment to a business in exchange for an agreed upon percentage of future credit card and/or debit card sales. The term is now commonly used to describe small business loans that are repaid in less than 18 months. It allows the everyday business owner the opportunity to lean against their daily profit of their merchant account processing. Typically we offer financing in the amount of 75% to 125% of a business’ average monthly volume. It is true business funding and is backed by the merchant processing account
ACH Loan The ACH loan product we offer has had a growing demand from many businesses. This product, like the MCA, requires a look at the business bank statements. Unlike the Merchant Cash Advance this product is driven more from the stand point of the flow of money through the business bank account. While the influx of manufactures, restaurants, distributors, and franchises has been driving this course of financing with us, we can still
Justin Ruschell
utilize this program for the average business owner. Recently we acquired a 1.5 million dollar loan for a fast food chain in southern California. The loan is non-collateralized, no down payment and has minimal funding requirements. You will be required to be in business for 6-8 months to apply. Now we have gone over 3 of the more popular programs we offer, and through its proven track record we have funded $75,000,000 in the course of 3 years. We may not be lending the most in the marketplace but we are getting it done the right way. So whether you are open a business, or been in place already we can facilitate all your financing needs.
Become a Preferred Partner We are always looking for a few good people. We offer the highest quality of customer service for all our clients. If you feel that you have a client that could utilize one of our services please feel free to contact us anytime. We look forward to hear from you and welcome you to browse through our website at www.universalbu For More Information: Phone: Email: Web:
702 235 3935 Justin@ universalbusinessadvisors.com www. universalbusinessadvisors.com
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Tim Miller, Certified Franchise Expert, Location3 Media
The Digital Marketing
N ational or L ocal P P C for F ranchise In talking with a few high-octane brands at recent industry conferences and events, I’ve been alarmed at how their national pay-per-click (PPC) programs are structured. Actually, let me rephrase the concern: it’s alarming that so many have their heads in the sand when it comes to the local PPC programs their franchisees are running.
Franchising USA
“Some brands only have a budget for a national campaign, but corporate may discover that bottom line increases attributed directly to PPC campaigns allow them to include local budgets as well.”
Brief
ranchise B rands ? Before I offend any top tier corporate
franchise digital marketing teams let me be perfectly clear: some of you get it,
and I applaud you. But many have yet to embrace the opportunity local PPC
presents and are more concerned with
buzzwords and new trends than getting this essential piece of the puzzle right. Let me also clarify that I realize
doing local store PPC correctly and in
cooperation with national programs is the Holy Grail for franchise systems. Franchisees are generally only concerned with making money in their unit(s). Corporate franchise marketing teams can only do so much to fight the battle of consistent brand messaging. The franchise advisory councils (FAC) within most systems are the voice of the franchisees. If a national ad fund exists and is controlled by a FAC, it is there to promote and build brand equity, which in theory should benefit everyone. The problem with this is if franchisees that don’t see local PPC marketing immediately benefit them they will go seek out their own self-funded strategies. After all, they are business owners, and they have their own bottom line to worry about. So if there are no corporate-approved suppliers for local store PPC programs they will inevitably start competing on corporate brand terms with the national PPC campaigns, which wastes budgets on both sides. This piece written by Location3 Account Director Anne Baum sums up what’s in our DNA; preventing these issues with integrated digital marketing programs for franchise systems. PPC programs are typically the first place a franchise brand would start in the digital space, because of their ease of use and the ROI of effective campaigns. Some brands only have a budget for a national campaign, but corporate may discover that bottom
Tim Miller
line increases attributed directly to PPC campaigns allow them to include local budgets as well. Even if there isn’t funding for location campaigns, encouraging franchisees to use the same PPC partner as corporate ensures that the campaigns complement each other rather than competing. What I’m suggesting is this: if nothing else take how you are structuring your PPC campaigns into serious consideration. Allocate a national budget, but provide options for the local store levels. Ideally, find a PPC partner who can manage campaigns at both levels. Otherwise you will find yourself competing with franchisees or field marketing teams bidding on similar terms, and that just hurts everyone. 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
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women in f ra nchising
Shelly Sun, BrightStar Care
S helly S un :
A Beacon of Success! “If you`re really passionate about what you`re doing and you stay committed, then you can be successful.” 11, 000 people. From childcare, to elderly care, to medical care, BrightStar plays a helping role in many clients’ lives and make it possible for them to meet all of their obligations.
The life of the average American family is in a word, busy! Our society runs on a dual income structure and can sometimes make it very difficult for families to meet their financial obligations while at the same time meeting all of their family responsibilities. Shelly Sun, CEO and Co-Founder of BrightStar Care recognized this astronomical unmet societal need and set forth in building a company whose services would change that. BrightStar Care is an innovative company that offers a broad range of services, assisting 10,000 families in 37 states, while employing over
Franchising USA
Shelly Sun, learned first-hand how difficult this situation can be for families in 2001, when her husband’s grandmother fell ill and required a wide range of care that was impossible for them to find available from one single company. Sun was also disturbed by the way these companies treated their clients, stating, “None of them really seemed like Grandma was the most important thing to them. Instead, quoting us a rate, getting us off the phone seemed like the most important thing to them.” Sadly, she passed away the day before Shelly and her husband wed and this caused both the Suns to stop and really think about what they wanted to do with their lives. The couple decided to learn from this experience and in Sun’s words, “go into business for ourselves, helping grandmas and grandpas, moms and dads much like we were trying to do for [my husband’s] own grandmother.” From this experience BrightStar was born, in October 2002, just six months following the death of Mr. Sun’s grandmother.
A Mission to Franchise Shelly and J.D Sun began their experience as franchisees purchasing two hotels from two different franchises. It was through this experience that Shelly discovered what worked in franchising as well as what she would change if given the opportunity. In October 2004 Shelly decided to make those changes in her own business and began looking into franchising her own business model. Shortly thereafter the Suns were surprised to learn they were expecting twin boys and again Shelly worked around the unexpected, taking meetings, filing legal papers and writing her own franchise’s operation manual, all while on bed rest with the pregnancy of her sons. Like many high achieving women in the business world, Shelly now had to juggle two premature babies in the NICU while continuing to build and promote a newly formed franchise company. Shelly sold her first franchise in December 2005, less than a year following the birth of her children and opened her first franchise location in March 2006. Within five years StarBright grew to over 175 franchises with 250 locations. Shelly equates her success with StarBright`s dedication to setting aggressive goals and by always paying attention to how
competitors perform and ensuring that BrightStar is always one step ahead, offering more and serving clients in the most helpful, respectful ways possible. Shelley states that in addition to keeping a competitive edge on the competition`s existing performance and offered services, “we’re also looking to further our capabilities to expand our skilled service offerings.” One of the only private home care companies to offer skilled care services, BrightStar is helping their clients stay in their homes longer with appropriate and personalized medical care, thus reducing stress on family members as well as the clients need to use hospital facilities. BrightStar, one of the nation`s fastest growing care provider companies, was featured on the national television show, Undercover Boss in 2011. Sun herself went undercover in BrightStar’s Kid Care program with a male caregiver named James. The client Shelley helped with had 2 year old quadruplets and a father serving overseas. Shelly’s next task was a nursing home where she learned the about everyday tasks performed by her employees. Through this experience Shelly learned exactly what it is like to work on the front lines in her company. When asked about her experience and whether or not it changed her perspective in terms of managing her company or employees she answered, “As a CEO, it definitely taught and encouraged humility….What I was pleased to see about the show is that I would have hired any of our caregivers to take care of my children or to take care of my own loved ones.” Although she did not comment on it, Shelly was very generous with the employees she worked with on the show, providing one employee with a paid family vacation and a paid for franchise of her own when she completed school. Shelly’s compassion and dedication to her company and the people who worked for her was demonstrated through her experience with Undercover Boss.
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womem in f ra nchising
Shelly Sun, BrightStar Care
businesses with “optimal efficiency, monitor their performance, and maximize their profitability.” BrightStar’s obvious goal is to be the absolute best in the industry, providing top quality services and creating a care free environment for clients and their families. Shelley comments that by owning their own technology, BrightStar is the only game in town with the ability to innovate new healthcare programs that remains specific to BrightStar, thus making the company even more threatening to competitors. The future continues to hold expansion and promise for this growing company. On April 4th 2013, BrightStar began construction on their first senior living community. This facility, is located in Madison, Wisconsin on over an acre of land, hosts a memory care wing and will become home to 36 residents. The plan is to develop this model into a franchise as well and Sun states that there is already a waiting list for franchisees. Her goal is to offer a safe and soothing atmosphere along with high-quality care to individuals who can no longer care for themselves in their own home
Becoming a member of the BrightStar Family
As many business women before her, Shelly has done her best to maintain a healthy business, between growing a thriving company and being there to meet the obligations of her family. When asked how she balances the many roles and responsibilities within her company and personal life she credits those around her as major contributors to her multifaceted success. Sun states, “I have a great team and invest to have high calibre talent.” She continues to say, “On the personal side, I have a very supportive and smart husband to talk (through) issues with and ensure I balance home and work life appropriately.” When asked what she could share with other women who
Franchising USA
are fighting their way to the peak of the corporate mountain and also raising a family, Shelly offers this advice, “Give yourself permission to find your own way – what works for someone else may not work for me…..I make time for long weekends and vacations with family so we have quality time.”
A Vision of the Future Shelly Sun prides herself on her dedication to her company and her commitment to helping her franchisees become more profitable and successful in their business dealings. She credits BrightStar’s “proprietary technology” in allowing franchisees an opportunity to run their
Shelly Sun’s advice to a potential franchisee is simple, “If you’re really passionate about what you’re doing and you stay committed, then you can be successful. The best piece of advice that I got was a realistic expectation that there would be good and bad days, but with hard work and resilience, a positive attitude and a passion for what we were doing, that would see us through.” If you are interested in a BrightStar franchise of your own, there are many opportunities available. BrightStar hopes to expand more franchises into the following markets, Dallas, New York, Seattle, Portland, Los Angeles and San Diego. For more information: Web:
www.brightstarcare.com
Building a Better USA: One franchise at a time
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feature The construction industry, including the maintenance and renovations of previous construction projects, is slowly returning to a state of growth in most economies of the world. Due to the economic recovery it is projected that going forward we will see a period of steady growth. The construction industry is a major source of employment and generates an impressive variety of career opportunities. It provides approximately seven percent of the total employed workforce
around the world. Construction and Maintenance franchises are perfect for those individuals passionate about building and construction. High quality construction services will always be in demand and these franchise opportunities offer a variety of possibilities from general maintenance to those that focus on more specific sub industries. While all this appears promising from the outside, anyone who’s attempted to initiate their own construction company, realizes very quickly how difficult it can be, to form a firm and positive reputation and client base. By purchasing a franchise in the construction sector, the stress and worry of building a name for your company, and waiting for positive word of mouth to make its rounds is removed. A franchisee can be assured that they are purchasing a business and brand that clients are already comfortable with and have learned to trust.
Construction and Maintenance franchises allow franchisees to choose a single component of franchise building services such as deck and fence building or a home building franchise which allows you to be involved in the whole home building process. Either way, the opportunities are endless. Regardless of your passion, be assured, the construction and maintenance sector will provide you with the perfect fit! Here is a close-up look at some of the amazing construction and maintenance franchises available in the US franchise industry today.
Cre8stone Required initial investment: $15, 000 (total overall investment range $30,000 - $100, 000) Cre8stone is an amazing, innovative franchise that uses limestone to create a unique stone appearance called cre8stone at a fraction of the cost of actual limestone. The bonuses of this product continue far beyond a lower cost. This product is applied by spraying and carving by hand over an existing surface. This creates a less messy and invasive renovation than having to tear out entire walls and is also takes much less time to complete. This product can be used for floors, walls, countertops and be implemented in both new and pre-owned structures. These overlays are seamless and can be made to look like marble or granite. Cre8stone is a well-respected franchise and holds membership with; The National Home Builders Association, Better Business Bureau and Dun and Bradstreet and the National Remodeling Industry Association.
“The opportunities are endless. Regardless of your passion, be assured, the construction and maintenance sector will provide you with the perfect fit!�
Franchising USA
Super Green Solutions Required initial investment: $49,000 (total overall investment range $130, 000 - $ 150, 000 Super Green Solutions pride themselves on being a, “One Stop energy efficient solutions shop.” Using North American made products whenever possible, this company offers their clients a large product range of energy efficient products including; • Solar power • Solar hot water • Skylights • Ventilation • Insulation • Wind power • Energy Management Super Green Solutions is a well respected franchise presenting franchisee testimonials that are resoundingly positive with franchisees finding the company to project a sense of family and loyalty.
HouseMaster Home Inspections Required initial investment: $50, 000 HouseMaster has been providing clients with thorough and reliable home inspections since 1979 and is the oldest
home franchise company in North America; and was ranked the number one home inspection franchise for franchisee satisfaction by Franchisee Satisfaction Awards for 2011, 2012, and 2013. All HouseMaster home inspection franchisees were surveyed and 66 percent rated the company as Good, Very Good, and Excellent in five major categories including; franchisee training and support, financial opportunity, franchisor relationship, franchise system and overall satisfaction. The path to franchisee ownership is very well laid out and interested individuals are asked to follow specific steps to make sure that franchisee and franchisor are a perfect fit. By providing advanced training, tools, marketing and operating support, resources and coaching in all aspects of the business. HouseMaster is clearly a company that’s very committed to the success of their franchisees.
Restoration 1 Required initial investment: $75, 000 Restoration 1 offers franchisees a large exclusive territory, ongoing business and technical support with an ability to operate a home based business with no overhead. Their business is based on relationships with local and regional insurance
adjusters, subcontractors, policy holders and building inspectors. The bonus to this type of restoration work is it is always in high demand and generally not affected by economic trends, due to the fact it is based on necessity and not desire. Also, services are often paid for by property owner’s insurance and not directly from the client’s pocket. The restoration industry is 60 million dollar growth industry and Restoration 1 is attempting to take as big a piece of that pie as the can. The services they offer include;
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feature • Water removal and repair • Fire restoration • Wet and dry smoke residue removal • Mold remediation • Regional natural disaster damage repair • Wind and Storm damage • Termite infestation repair • Vandalism and accidental damage repair Restoration 1 offers a wide array of emergency, restoration, mitigation and reconstruction services. Clearly franchisees of this company are purchasing a well established business that is thriving and economically sound.
their franchises generally appeal to licenced quality builders and passionate entrepreneurs. G.J Gardner’s believes in the importance of building quality homes on time and on budget. This practice makes the company unique from many builders and popular with clients. The franchise can offer such competitive prices due to the networking of the builders, volume buying power, group advertising and innovative marketing. G.J Gardner claims that most builders who become a franchisee, increase their business tenfold.
HomeStory Door Replacement
Required initial investment: $100, 000
Required initial investment: $151, 050+ for a metropolitan territory; $98, 700+ for a non-metropolitan territory
G.J Gardner Homes was founded in 1983 by Greg Gardner and opened their first franchise in May 1995. There are currently 110 franchises thriving in the U.S.A, Australia and New Zealand. Franchises are currently available in Texas, Connecticut, Maine, Mississippi, Rhode Island, Vermont and New Hampshire. G.J Gardner Homes boasts the accomplishment of having over 20, 000 homes worth of experience and
The median age of a home in the United States of America is 36 years, meaning there are billions of old, outdate and illfitting doors waiting to be replaced and that is HomeStory’s specialty. HomeStory enjoys very little competition which creates a large market for franchisees with a previously unmet demand and a standard territory with a population of 600, 000 people. Their process is incredibly efficient and what other businesses
G.J. Gardner Homes
Franchising USA
complete in three days, HomeStory can complete in three hours. This franchise employs game changing technology which enables a crew of two individuals to replace all the doors in a home in approximately three hours. This company transforms a client’s home quickly, easily and affordably with designer doors and beautiful hardware. This franchisor requires no construction background or contractor’s licence from franchisees unless it is specifically required by state law.
Surviving the Storm The recession of the, previous few years took its toll on all major industries, including the construction and maintenance industries. However, as the economy slowly begins to show signs of life again the building and construction franchises are definitely showing a come-back. Purchasing a franchise in this industry allows a person to enter into an industry as an owner, with only a fraction of the capital required to start up an independent construction company. Franchisees are also provided with tested and true business models that will help protect them from the negative aspects of residual effects of a recovering economy. With such a vast array of options for the potential franchisee to choose from, individuals are given the opportunity to find a business that interests them, that motivates them and points them on a clear path towards their personal happiness and success.
FRANCHISE FRANCHISE AVAILABLE FRANCHISE AVAILABLE FRANCHISE AVAILABLE AVAILABLE
Nontraditional Nontraditional Nontraditional Nontraditional
OPPORTUNITIES OPPORTUNITIES IN NEW AREAS! OPPORTUNITIES IN NEW AREAS! OPPORTUNITIES IN NEW AREAS! IN NEW AREAS!
Location Location Location Location
Opportunities Opportunities Opportunities Opportunities
Available Available Available Available
THE LARGEST CARRY-OUT PIZZA CHAIN IN THE LARGEST CARRY-OUT PIZZA CHAIN IN AMERICA AND THE FASTEST GROWING THE LARGEST CARRY-OUT PIZZA CHAIN IN AMERICA AND THE FASTEST GROWING PIZZAAND CHAIN INFASTEST THEPIZZA WORLD!* THE LARGEST CARRY-OUT CHAIN IN AMERICA THE GROWING PIZZAAND CHAIN INFASTEST THE WORLD!* AMERICA THE GROWING PIZZA CHAIN IN THE WORLD!* For more information, visit PIZZA CHAIN IN THE WORLD!* For more information, visit *“Fastest growing pizza chain in the world” based on the net number of stores added 2008-2012. ©2013 LCE, Inc. 38990_pd *“Fastest growing pizza chain in the world” based on the net number of stores added 2008-2012. ©2013 LCE, Inc. 38990_pd *“Fastest growing pizza chain in the world” based on the net number of stores added 2008-2012. ©2013 LCE, Inc. 38990_pd
LittleCaesars.com or call 800-553-5776 For more information, visit LittleCaesars.com or call 800-553-5776 LittleCaesars.com or call 800-553-5776 For more information, visit LittleCaesars.com or call 800-553-5776 *“Fastest growing pizza chain in the world” based on the net number of stores added 2008-2012. ©2013 LCE, Inc. 38990_pd
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For Details: SnipitsFranchise.com inquiry@snipits.com
Exhibiting at IFE booth #134
877-Snip-its INTRODUCTION
We’ve provided you a bit of information about our company and the franchise opportunity. Now we’d SPRL [V NL[ [V RUV^ `V\ I` Z\ITP[[PUN V\Y *VUÄKLU[PHS 8\LZ[PVUUHPYL 0[ PZ [OL ÄYZ[ Z[LW [V X\HSPM`PUN MVY MYHUJOPZL ownership and allows us to move to the next step.
GET STARTED NOW!
DISCOVERY
Working with a member of our franchise development team, you will be guided through a comprehensive discovery process. Each of the six steps in the process provides in-depth information about our systems, programs and support.
FRANCHISEE CALLS
You will have the opportunity to speak with our franchisees about their experience with Snip-its, validate [OL PUMVYTH[PVU `V\»]L NH[OLYLK HUK LZ[HISPZO ÄUHUJPHS expectations.
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@V\ ^PSS IL PU]P[LK [V ]PZP[ V\Y JVYWVYH[L VMÄJL MVY H M\SS day of meetings with our Support Team Leaders. You have already learned “what” the Snip-its franchise program offers, now you will hear “how” we support our MYHUJOPZLLZ ;OL NVHS PZ [V ÄUHSPaL V\Y L]HS\H[PVU VM LHJO other and make a decision.
AWARD FRANCHISE
Upon approval by our executive review committee, we will walk you through the agreements and execute the paperwork. Welcome to the Snip-its family!
Get Started Now at www.SnipItsFranchise.com Franchising USA
Part 3 of 3
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Veterans in Franchising www.franchisingusamagazine.com
FastSigns Seeks Qualified Veterans
Top 100 Franchises for Veterans
Franchising and the White House Joining Forces
Franchising USA
Take command of your future with ServiceMaster Clean
®
Realize your dreams Combine your knowledge and leadership experience with ServiceMaster Clean and become a part of one of the country’s largest cleaning networks. Our team is dedicated to help you succeed with sales and marketing assistance and one-on-one support from our dedicated staff. After all, we have been franchising for 60 years. Financing is available. Ask about our military discount.
800-230-2360 ownafranchise.com Financing is available through ServiceMaster Acceptance Company, a subsidiary of The ServiceMaster Company, to credit qualified individuals. © 2012 ServiceMaster Clean. All rights reserved.
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V eterans in F ranchisin g S upplement P art three of T hree
Contents
Our Veterans in Franchising special supplement has become a regular feature of Franchising USA. To share your story in the July issue, please contact Jenn Dean, Senior Sales Executive Phone: 250-590-7116 Email: jenn@cgbpublishing.com
36 The SOPs of Franchising Jon Rucker, VetFran, VetFran, Snap-On Tools
48 Franchising and the White House Joining Forces International Franchise Association
38 Award-Winning Franchise Seeks Qualified Veterans FastSigns
54 Marine Training Pays Off at Tax Time Madelyn Insley, Liberty Tax Service
42 Financing Your Start-Up Business or Franchise Richard Ashe, Veteran Franchise Centers 46 From Camo to Kilt Megan Nemeth, Men in Kilts
56 Today’s Top 100 Franchises for Veterans Franchise Business Review
Veteran Franchise FOCUS 50 Service Brands International
53
41
37
Veteran Profiles
Franchising USA
V e t erans in Franchising
The SOPs of Franchising “Not only is it “smart business” to reach-out to our veteran community with these amazing franchise opportunities, we feel it’s the “right thing to do” for those who have sacrificed to serve their country.” As military members we participated in and were surrounded by a “franchised business model” every day we wore our uniform; whether we realized it, or not. We may have called that model something like a regulation, instruction, or standard operating procedure (SOP)… a system of rules and guidelines, established for successful mission accomplishment. Believe me, I don’t remember doing ANYTHING in the military without an SOP to tell me what (and how) to do it. To accomplish our missions, we expected the same result (and means to get there), regardless of geography or personnel. The system was in-place and already established. We just needed to follow the SOP. That is a franchise model. A franchise is your OWN business, but the rules on how to successfully run your business have been developed by the Franchisor through a structure of tried and true measures, checks and balances, and a proven system. Regardless of branch of service, or jobs held, almost every one of our military veterans have an intrinsic skill set of self-
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discipline, desire for excellence, integrity, teamwork, and the uncanny ability to follow an SOP to accomplish the mission. This skill-set is the same as our most productive and successful franchisees, so it makes perfect sense why more than 530 franchisors (through the IFA’s VetFran Program) are actively seeking veterans to fill their franchise concepts and ranks. Not only is it “smart business” to reachout to our veteran community with these amazing franchise opportunities, we feel it’s the “right thing to do” for those who have sacrificed to serve their country. One of the most important steps in buying a franchise business is to “do your homework!” Due diligence is imperative. Gather as much good information (from reliable sources), as possible, to ensure the decision to go into a franchise business meets your personal and professional goals. To learn more about franchising, I always recommend starting with the IFA’s VetFran Toolkit: Online franchise help for vets. Launched by the International Franchise Association, the Toolkit includes a Franchising 101 course, fundability app, and workbook to help you evaluate franchise opportunities. A mentor network is also available for users. The service is part of IFA’s Operation Enduring Opportunity efforts to recruit 75,000 veterans and spouses, plus 5,000 wounded warriors, as franchise owners or
Jon Rucker
franchise employees. Once you have found a franchise you are interested in you can contact them through the VetFran Directory. Most franchisors take prospective candidates through a “discovery phase” where the process is laid-out clearly and concisely. Once again, before getting to this point, it’s imperative to do your homework to ensure the decision of franchise business ownership will lead to getting you one step closer to meeting your personal and professional goals. Our VetFran Community is dedicated and willing to help you realize your dream of business ownership. On behalf of that community, we genuinely thank you for your sacrifices and truly appreciate your service. Jon Rucker is Vice Chair of the VetFran Committee, Military Programs Manager for Snap-On Tools and a United States Air Force Veteran. For More Information: Web:
www.vetfran.com
Maurice Welton After graduating from college in 1992, Maurice Welton served in the military from 1997 to 2003. By the end of his time in the Army, he was an E5 Sergeant, after working as a Cook (92G) for the first four years, and a Food Inspector (91R) for the last two years. After leaving the Army in 2003, Welton worked for a large contract food service company for a few years. He opened his first Edible Arrangements location in McAllen, TX in May 2007 after moving to South Texas from New Orleans. He was displaced by Hurricane Katrina and McAllen was where he decided to start over. Welton talks about his experience as a first time franchisee. “The transition was fairly straightforward, as I knew I was ready to do something new after Hurricane Katrina. Becoming a franchisee with Edible Arrangements came really naturally to be. After working in the food
Profile
industry for 17 years of my life, I just knew that it was something I could do, and something that I wanted to try. Now just five years later, Welton owns four Edible Arrangements locations in McAllen and was awarded the President’s Award by Edible Arrangements’ CEO in July, and was recently honored to be names as one of the “Top 5 Business in McAllen” by the City of McAllen.” Welton sees a direct correlation between his time in the Army and the skills and characteristics that make him successful now. “When I was serving, they taught us to always set our sights two ranks higher than the level we were at so that we were always raising the bar for ourselves, and continually raising our standards for what we wanted to achieve. That taught me that forecasting the future is really easy if you’ve got exactly what you want for your future in mind because once you’ve set your sites, you go out and make it happen. You can’t be afraid of failure, you just have to go and do it. That’s how I’ve lived my life and that’s how I’ve been able to be successful with Edible Arrangements.”
your passion and what you actually want to do. Select an industry you’re passionate about. If you were an MP in the Army and you liked it, go into private security. If you were a mechanic and liked it, open a body shop or get into car repair. My passion and my heart are in the food industry so Edible Arrangements was the perfect blend of still being in the food arena, but not having to cook or run a restaurant and it’s really turned out to be a win-win situation.” For More Information: Web:
www.ediblearrangements.com
Welton’s advice for other veterans who are looking into a franchise is simple: “Do something you like. Pick a franchise that caters to
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V e t erans in Franchising
fastsigns ®
Award-Winning Franchise Seeks Qualified Vets! Over one million men and women in the United States serve their country in the armed forces. Concluding their enlistment period, they return home with the goal of obtaining meaningful employment and entering into civilian life. FASTSIGNS® understands and appreciates the valuable contribution of America’s veterans and is dedicated to recruiting them as franchise owners. FASTSIGNS, the worldwide franchisor of more than 540 sign, graphic and visual communications centers, has an awardwinning, nationally recognized veteran program that is adding more and more veterans each year. Currently, veterans make up 10% of the total number of franchisees in the FASTSIGNS system. Veterans possess a number of valuable skills and a wealth of experience essential to a franchise system. They understand the importance of following and executing a plan and using a systematic approach to achieving their goals.
that make them ideal franchisees,” said Mark Jameson, senior vice president of franchise support and development. “They have typically had some degree of responsibility in the military and have acquired numerous skills during their military service which makes them well-suited to our franchise system. FASTSIGNS is committed to providing veterans with the best franchise ownership opportunity available. In addition to offering financial support, we’re there to help them with initial and ongoing training, site selection and marketing.”
“Vets are disciplined, driven, selfmotivated and possess leadership skills
As part of the commitment to veterans, FASTSIGNS is also a proud participant of
Franchising USA
the VetFran program (Veterans Transition Franchise Initiative) which is a program launched through the International Franchise Association. It assists veterans returning from deployment to access franchise opportunities through training, financial assistance and industry support. “We truly appreciate the sacrifices that our servicemen and women have made for our country,” said Catherine Monson, CEO of FASTSIGNS. “We want to make sure our veterans have every opportunity when it comes to securing a career in franchising. For those wanting to go into business for themselves, FASTSIGNS is committed to offering aggressive financial support and
“FASTSIGNS® is committed to providing veterans with the best franchise ownership opportunity available.”
resources that will help them every step of the way. Our experience is that veterans are outstanding franchisees; they have developed strong leadership and execution skills during their service to our country. This is a perfect recipe for success.” Daniel Nichols, who served as a sailor in the U.S. Navy and opened his FASTSIGNS center in 2008, has first-hand experience with the process of entering into a franchise agreement with the company.
looking for franchises, I wanted to go with a company that had a proven business model so I could learn from the mistakes that others already made without repeating them. In the five years since joining FASTSIGNS, I have received immense support and business consulting advice from the main office. There is always someone available to help me whether it’s with setting goals, providing sales courses or training on new technologies.”
“I always wanted to run my own business and after learning about the veterans program and discounts that FASTSIGNS offers, it seemed like the perfect opportunity for me,” said Nichols. “When
Veterans that join the FASTSIGNS U.S. network can take advantage of specific incentives including a reduced franchise fee of $18,250, a savings of 50%, in addition to reduced royalties and
advertising fees for the first year. The average total investment range for a new center is between $171,197- $276,975 and the liquid capital requirement is $75,000$85,000. Additionally, new franchisees are given a very comprehensive training program which consists of site selection to ensure the best location is obtained and four weeks of initial training (one week at a local FASTSIGNS center, two weeks at the Dallas headquarters and one week of onsite training in their new center). Preopening marketing and grand opening support is provided to drive customers immediately to the new location.
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V e t erans in Franchising
fastsigns ®
Franchisees can expect ongoing support with dedicated business consultants available to assist with business and finance training, sales and marketing, production and staff management advice. In addition, a unique franchisee mentor program is in place to guide and assist new business owners. Continuous support is also available through web-based learning systems for the ever-changing business environment. Differentiating FASTSIGNS from other franchise systems is the transparency and disclosure that is available to potential franchisees. Candidates have access to full disclosure of the earning potential of the franchise based on the earnings and expenses of the current franchise network. Moreover, FASTSIGNS is only one of a few franchise systems approved for the Franchise America Finance program with six million in financing approved for franchise candidates. This program offers veterans assistance with financing their franchise. Along with FASTSIGNS impressive franchise offering, the most prestigious awards and accolades in the franchise
Franchising USA
industry have been bestowed on the company since it began operations in 1985. It has been recognized as a world leader in franchising with centers in eight countries including the US (and Puerto Rico), Canada, England, Brazil, Mexico, the Caribbean, Saudi Arabia and Australia. FASTSIGNS has been awarded #1 sign and graphics franchise in Entrepreneur’s Franchise 500 for three consecutive years (2011, 2012 & 2013). It has been ranked among the top three franchises in the business services category and in the top twelve overall in the Franchise Business Review’s “FRB50” for outstanding franchisee satisfaction for eight consecutive years. The Franchise Business Review is a national market research firm assisting prospective investors through the process of examining franchise systems. The firm performs independent surveys of franchisee satisfaction with hundreds of companies annually. It administers the “FRB50” franchise satisfaction awards ranking the top franchises based on the highest level of satisfaction. “As a franchisor, there is no greater gratification than when our franchisees are
happy, satisfied and receiving the support they need from the corporate team,” said Catherine Monson, CEO of FASTSIGNS. “Our ultimate goal is to help franchisees thrive in their businesses and achieve their personal dreams, and when that happens, everyone is happy.” As businesses are looking for more innovative solutions to compete in the marketplace, signage has never been more important. Advertisers are expanding into new media such as digital signage and mobile websites and FASTSIGNS is positioned to meet the demands of the ever-changing business environment with products and services that expand beyond the traditional printing of the past. As a leader in the industry, potential franchisees are guaranteed to be part of a growing and successful industry and veterans are an integral part of FASTSIGNS plans for future expansion. For more information contact Mark Jameson at: Phone: 214-346-5679 Email: mark.jameson@fastsigns.com Web: www.fastsigns.com
Robert Lopez Robert Lopez began his military career as an Air Force Mission Capabilities Logistical Technician (MICAP) in September 1993. When he graduated from Rowan University in 1999 with a B.A. in Law and Justice with a Small Business Management minor, he cross-trained into the Judge Advocate General (JAG) Corp where he met his future wife Annette HankinsLopez, who is also an Air Force veteran. After serving for 12 years in the Air Force, Lopez decided not to re-enlist due to their new growing family. While working on his undergraduate degree Lopez had worked for a ServiceMaster Clean franchise in Southern New Jersey as a part-time employee. After separating from the Air Force and re-locating to Port Charlotte Florida to be closer to family, Lopez came to the
Profile
conclusion that he needed to make a career move. “I had always dreamed of becoming and entrepreneur and thought joining ServiceMaster Clean would be the perfect choice. After making a few phone calls, I found out about the available territory in Southwest Florida.” Everything came together, and in short order, Lopez was off to franchise training, and then back to his territory to work on growing the business. Lopez felt confident in purchasing a ServiceMaster franchise because he was familiar with the brand and knew that the franchise model would provide the best opportunity to be successful in the market and territory in which he would be working. Franchising was a natural fit for Lopez. “The Air Force is very much about
systems, programs, personal growth, and many other attributes that line up well with the ServiceMaster Clean core values and overall systems and solutions. In the Air Force, we lived by a few very simple yet effective core values of integrity first, excellence in all you do, and service before self! The ServiceMaster Clean corporate values of honor God in all you do, develop your people, excel with customers, and to grow profitably are a good fit and work well together with the Air Force core values. With ServiceMaster Clean, you’re in business for yourself but never by yourself, as someone is always available to guide you along the way. For More Information: Web:
www.servicemasterclean.com
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V e t erans in Franchising
Richa rd Ashe, President, Vetera n Fra nchise Center s L LC
F INANCING YO U R STA R T- U P B U SINESS O R F R ANCHISE Every week I talk to hundreds of veterans that want to start their own business. Many have heard rumors or have been told that because of their military service there are federal and/or state grants available for business start up. THERE ARE NO FEDERAL OR STATE GRANTS FOR BUSINESS START UP No matter what you’ve read, seen or heard on the internet, TV, radio, pod cast etc. the government - federal, state or city - do not provide grants for starting a business or franchise, paying off debts - business or personal - or provide monies for operating capital or expenses.
Franchising USA
There are some specialized grants available to small businesses in specific fields or industries identified by the federal or state government as being especially important to the nation or state, such as medical or scientific research and environmental conservation. These grants are specialized research and development (R&D) grant programs; and are the Small Business Innovation Research (SBIR) Program, Small Business Technology Transfer (STTR), Federal and State Technology Partnership (FAST) Program. The Small Business Innovation Research (SBIR) program is a highly competitive program that encourages domestic small businesses to engage in Federal Research/ Research and Development (R/R&D) that has the potential for commercialization. Small Business Technology Transfer (STTR) The unique feature of the STTR program is the requirement for the small business to formally collaborate with a research institution in Phase I and Phase II. STTR’s most important role is to
Richard Ashe
bridge the gap between performance of basic science and commercialization of resulting innovations. Federal and State Technology Partnership (FAST) Program is a competitive grants program designed to strengthen the technological competitiveness of small businesses. It improves the participation of small technology firms in the innovation and commercialization of new technology, thereby helping keep the United States on the cutting edge of research and development in science and technology. For more information on the guidelines of
these initiatives go to: http://sbir.gov/about/ about-sbir
IF THERE ARE NO GRANTS, WHAT ARE MY OPTIONS? There are three options for financing your business: Your money, angel or venture capital funding, or loans.
YOUR MONEY If you’ve put away some money in savings, 401K, TSP, stocks, bonds, etc. you use these funds to start your business or you can also use these as collateral for a loan. If you have a TSP or 401K you can roll these over into a self directed 401K which allows you to utilize the full potential of your existing retirement accounts, thereby enabling you to eliminate or reduce the need for additional loans. There are very specific guidelines and it is important that you enlist expert services that know how to form your company, know the tax implications, rules, etc. should you want to use your 401K or TSP for funding your business. You can talk to a CPA or there are some excellent companies that make a business of assisting you with your 401K rollover. Some will also help prepare your loan paperwork and even have relationships with multiple lending institutions. One of the companies VFC works with is Benetrends who have been at the forefront of developing 401(k)/IRA business funding and are regarded as the authority in franchise and small business financing.
ANGEL OR VENTURE CAPITAL FUNDING An angel investor is an affluent individual who provides capital for a business startup, usually in exchange for convertible debt or ownership equity. If you know
someone in your family or among your friends or in your personal network this is a good place to start. There’s nothing better than having a personal relationship with someone who is financially capable and willing to lend you the money you need. REMEMBER: This is business and you should approach your angel investor (even if it is someone in your family) the same way you would approach a bank; prepared and with a plan. Venture capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT, software, etc. If you have got the idea for the next Google, Netflix, Apple, or other rocket ship company, venture capital may be the way to go.
TRADITIONAL LOAN The Small Business Administration (SBA)
provides three programs for business start-ups. The one program specifically for veterans is the Patriot Express Loan Initiative. The Patriot Express Pilot Loan Initiative allows lenders with Patriot Express authority to make offers similar to lenders with SBAExpress authority, but the business owner is more limited. To be eligible to receive a Patriot Express Loan, the business must be owned and controlled (51 percent or more) by eligible veterans and members of the military community who want to establish or expand a small business. Eligible military community members include: • Veterans • Service-disabled veterans • Active-duty service members eligible for the military’s Transition Assistance Program • Reservists and National Guard members • Current spouses of any of the above, including any service member
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V e t erans in Franchising
Richa rd Ashe, President, Vetera n Fra nchise Center s L LC
• Widowed spouses of service members or veterans who died during service or of a service-connected disability
“There are three options for financing your business: Your money, angel or venture capital funding, or loans.”
The second SBA program for startups is the Basic 7(a) Loan Program which gives loans to eligible borrowers for starting, acquiring and expanding a small business. This type of loan is the most basic and the most used within SBA’s business loan programs. Borrowers must apply through a participating lender institution, i.e. bank or credit union. The third start up friendly program is the Microloan program. All new businesses are eligible and the maximum loan amount is $35,000, but the average loan is approximately $10,000. The pre-condition to getting a Microloan is borrowers have to enroll in technical assistance classes administered by the microlender intermediaries. Which for some entrepreneurs is a very helpful resource that provides cost-effective business training. The SBA is does not directly offer business loans. It sets guidelines for loans and guarantees that they will be repaid to lenders. This can make it easier for applicants to borrow money and obtain the funding they need to start or grow a company particularly when the US Gov’t is guaranteeing 75% to 85% of the loan.
THE FRANCHISE FINANCE OPTION If owning a business is what you want but you don’t want to start from a blank piece of paper, want to mitigate some of the risks of business ownership and like the idea of being in business for yourself but not by yourself, then franchising may be the way to go.
Franchising USA
In a bid to boost franchise ownership, many franchisors are offering financing programs of their own. An estimated 100 franchisors are offering creative financing programs for start-up franchise owners. Programs range from zero-percent financing for a limited-term, lower license fees, reduced royalties and minority stake ownership by franchisors in multi-unit outlets according to the IFA (International Franchise Association). The advantage of franchise ownership is that the franchisor and franchisee have an ongoing relationship, and the franchisor often provides a full range of services, including site selection, training, product supply, marketing plans and even assistance in obtaining financing. Some franchises are SBA approved, making the lending process simpler.
The SBA-approved franchises are select business opportunities whose agreements have been accepted by the SBA. When it comes to securing an SBA-backed loan, those applying for an approved-franchise have it easier and quicker. Applicants for SBA-approved franchises benefit from a streamlined review process that expedites their loan application. Because the particular franchise is pre-approved, the loan review is less complex and focuses on specific aspects of your business plan. If the franchise is not SBA Approved, it’s not a negative thing. There are reasons franchisors do not appear on the list. If
they are not on the list the SBA and commercial lender may need to review the franchise and its financial information more closely, which of course will add more time to process and approve the request.
In the July issue of Franchising USA:
Richard Ashe served in the Marine Corps from 1976 to 1983 in the infantry and then as part of a joint Marine, Navy, and Air Force top secret intelligence project. After serving in the Marines, he worked as an electronics technician for a communications company. Over the next 30 years, he worked his way through the civilian ranks to the position of vice president of global marketing for an international software company and received his degree in marketing.
Part 2- Before You Run Off to the Bank: Things you should know before going to ask for a loan.
During his civilian career, Ashe has worked for and helped companies such as Xerox, Compaq, and Hewlett-
Even if the franchisor is offering financing you still may want to shop the interest rate against other banks or lenders.
Packard expand or start new businesses. He also participated in four software startups and started two businesses on his own – a computer training firm, ComputerTutor, and a network consulting firm, LANDesign. Ashe is a Certified Franchise Consultant and a member of the Texas Veterans Chamber of Commerce. He serves on the VetFran committee. For More Information: Phone: Email: Web:
713-849-9642 rich@VeteranFranchiseCenters .com veteranfranchisecenters.com
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V e t erans in Franchising
M ega n N emeth, M en in K ilts
“From Camo to Kilt” “Even if it is something as simple as making someone smile, Murphy’s passion for caring for his country and all the people in it, carries on in his work at Men In Kilts.”
Franchising USA
The transition from US Army Specialist as a Military Police Officer, to that of a kilt-wearing window and exterior cleaning technician might seem odd from an outsider’s perspective. But in all reality, it makes perfect sense! Chris Murphy, Operations Manager at Men In Kilts Boston, served in the US Army for just under 11 years and during that time was deployed to Iraq twice. He spent a year in Baghdad where he provided personal security to Tier 1 government officials. After being back in Boston for 6 months, Murphy volunteered to go back and this time he travelled to Fallujah where he worked with Iraqi police on daily operations and helped them to develop procedures and protocols. Murphy’s time serving in the Army was nothing short of rewarding, but he was ready for a change. Deciding to become a part of a franchise was deeply rooted in the support systems that Murphy knows are in place for franchisees. “The brand and operational support that comes from the franchisor is definitely a bonus. From fellow employees, the franchisor, and even other franchisees, there is always someone there to help you. In the Army, it is the same way. There is an endless system of support and everyone works together as a team,” says Murphy. The transition from military to civilian was pretty easy for Murphy. “In the
military, I was used to long days of training and work, and not having a set schedule was pretty standard. Being a part of a franchise is very similar. I could have a job that requires me to work earlier than 8 am or later than 5 pm, and I just have to go with it. So, when I came back to work full-time in the franchising world, it was pretty smooth.” Previous franchise experience came from Murphy’s eight years spent with 1-800Got-Junk? Murphy’s mother, Judy Briggs, owns both the 1-800-Got-Junk? and the Men In Kilts franchise in Boston. “With my mom being an expert franchisee, it all just made sense to me to become a part of this industry as well,” says Murphy. Men In Kilts first caught Murphy’s attention when the company was featured in Entrepreneur Magazine. He said he could not help but smile. “The thought of anyone washing windows while wearing kilts was so cool!” says Murphy. It was not long after when his mother came to him and asked, “Have you ever thought about wearing a kilt?” Murphy did not hesitate. The Men In Kilts mission is to “bring smiles into the world…one kilt at a time!” Just like the Army, Men In Kilts is fighting to make the world a better place. Even if it is something as simple as making someone smile, Murphy’s passion for caring for his country and all the people in it, carries on in his work at Men In Kilts. Murphy recognizes how he has brought smiles to the world by recalling one particular moment. “One Monday morning, we were in the heart of Boston cleaning windows and everyone that walked by couldn’t help but smile. I remember thinking, ‘people are normally miserable first thing on a Monday
Megan Nemeth
morning, but we just brought smiles to all these faces by doing something as simple as wearing a kilt’. That is pretty powerful!” Murphy’s hard work has made Men In Kilts recognize the amazing fit for veterans in the company, and the opportunities to work with veterans in the future. Men In Kilts prides itself on dedication and a high level of work ethic, which is a great fit for veterans who have the skills and attributes necessary to succeed in a franchise such as Men In Kilts. Megan Nemeth received her BA from SFU’s Communications program and is currently working towards BCIT’s Public Relations Associate Certificate. Currently she does PR and Communications for all Men In Kilts franchises. With an avid interest in writing, this is her first, of hopefully many, published pieces. For More Information: Web: www.meninkilts.com
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V e t erans in Franchising
Franchising and the White House Joining Forces As part of the franchising industry’s support of the White House Joining Forces initiative, IFA President & CEO Steve Caldeira joined President Obama, Vice President Biden, First Lady Michelle Obama and Dr. Jill Biden to mark the hiring of 290,000 veterans and military spouses who have been hired or trained since the launch of the initiative in 2011. The franchising industry, led by IFA and 562 franchised businesses that are part of IFA’s VetFran strategic initiative, were part of the first private sector commitments to the White House Joining Forces initiative on Veterans Day in 2011. IFA and its membership pledged to hire and recruit 80,000 veterans and military spouses by
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2014, including 5,000 wounded warriors as team members and franchise small business owners. In the first year alone, nearly 65,000 veterans have started careers in franchising – including 4,314 as franchise business owners using discounts offered by VetFran member companies. The franchising industry has a longstanding history of supporting veterans. In 1991, IFA launched VetFran, a strategic initiative to help Gulf War veterans access business ownership opportunities in franchising. In 2011, Operation Enduring Opportunity was launched to expand that initiative to include hiring. “With the war in Iraq over and the war in Afghanistan drawing to a close and more than one million service members are projected to leave the military in the next several years, franchise businesses have realized that hiring our veterans, military spouses and wounded warriors is not only the right thing to do, but it makes good business sense,” said IFA President & CEO Steve Caldeira. “With its rapid training opportunities, scalability, and need for operational execution and excellence in following proven systems, franchising provides an ideal structure to enable returning veterans to become leaders of and productive participants in the U.S. economy.” IFA maintains a VetFran Toolkit, available at www.VetFran.com, with tools and solutions for veterans, military spouses and wounded warriors interested in franchise ownership or careers in franchising, including: • A Finance assessment that lets veterans enter their financial details (such as their credit score and how much liquid capital they have) and the general information about the business they want to start to find out about in terms of how fundable they are. The app can also connect them directly to over 2,200 funders through BoeFly. This tool, along with BoeFly’s
“With its rapid training opportunities, scalability, and need for operational execution and excellence in following proven systems, franchising provides an ideal structure to enable returning veterans to become leaders of and productive participants in the U.S. economy.” services, are offered free of charge to veterans by BoeFly. • A franchising basics online course that provides individuals with a comprehensive introduction to franchising. The course describes how franchising works as a business, the questions to ask, the laws and regulations that apply to franchising, and the companies and types of businesses that comprise the franchising field. • VetFran Mentor Network, led by volunteer veteran franchising leaders including Gordon Logan, Founder & CEO of Sport Clips, Inc. and retired US Air Force, Jim Amos, IFA Hall of Famer, Chairman of Tasti D-Lite and 16 times decorated Vietnam veteran, and Mary Kennedy Thompson, Past Chair of the VetFran Committee, President of Mr. Rooter and former USMC Captain. The Mentor Network provides connections and relationship-building with business leaders, including C-level executives of IFA’s leading member companies. • Making the franchise decision, an extensive workbook by Michael Seid, author of Franchising for Dummies, is a tool to evaluate franchise opportunities, written by a well-respected industry leader.
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
www.vetfran.com
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V e t erans in Franchising
Service B rands I nt ernational
Giving Back So Others Can Get Ahead At Service Brands International, “a core value for our Molly Maid, Mr. Handyman and ProTect Painters franchise brands is to support our veterans, to make a difference for minorities, and to empower women to own their own businesses,” says Service Brands International CEO, Craig Donaldson. One way we’re doing that is by increasing our franchise fee discounts: VetFran to $6,000, MinorityFran to $5,000, and Women-Owned to $5,000, for all three brands.
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MOLLY MAID, a $200 million business ranked #80 on Entrepreneur magazine’s Franchise 500® and designated a Military Friendly Franchise® for 2013 by Victory Media, Inc., has 250 territories available across the country. America is a Land of Opportunity for prospective franchisees and Molly Maid owners. And each owner has a story to tell. Meet GREG PERKINS, Molly Maid of Charlotte, NC. In 1978, fresh out of high school, Greg wanted to see the world rather than sit in a college classroom. He entered the Navy’s nuclear power program and was stationed on the nuclear sub the USS Lewis and Clark. He served six years as a mechanical operator responsible for maintaining the reactor. After his military service, Greg went to the University of Tennessee and graduated with a mechanical engineering degree. When the company he worked for was bought out, he wanted to take control of his future. “I liked Molly Maid because of the recurring
revenues from repeat customers,” said Greg. “You just don’t get that in many businesses.” Greg opened his Molly Maid franchise in 2006 and won our Rookie of the Year Award. “In the military, living and working on a submarine was the best classroom for learning how to lead and to reward others.” Though not military veterans, DENNY and MICHELLE JENSON are a power couple who run a tight ship as owners of Molly Maid of Reno Sparks, NV. Denny was in banking on the technical side. He wanted to own a franchise with a sound business model where he would have some give in his schedule and at some future time, he would be able to step away from the day to day. When he first heard about Molly Maid, he said, “I have no interest in a cleaning service.” Michelle, who works in banking as a technical project manager and will join Denny in the business, was even more adamant: “We are not doing that.” Now they are believers. When they
reviewed the financial performance of the business, met with everyone at Meet the Team Day, and talked with Molly Maid owners, they were impressed. “This is a business we love,” says Denny. MR. HANDYMAN, a $50 million Military Friendly Franchise, Entrepreneur Franchise 500® business and ranked #10 on the Remodeling 550, has successful owners who credit their military service and smart marketing for their good fortune. Meet JO McCABE, co-owner of Mr. Handyman of Prince William and Southern Fairfax Counties, VA. Jo graduated from the U.S. Naval Academy with an aerospace engineering degree and earned an MBA from Southern New Hampshire University. She served on active duty for six years as an aircraft maintenance officer then joined the Reserves. Jo decided to put her management experience and MBA to use owning her own business. She opened her Mr. Handyman in September 2008. “Right before the economy tanked,” she said. Although 2009 and the economy presented unique challenges, Jo managed to increase revenues by 46 percent in 2010. Today, she has six employees and hundreds of satisfied customers. “Business is like sports,” she says, “teams that master the basics and continue to use them are the ones that make it to the championships. That’s what the Navy prepared me for: Master the basics and follow the system, and you can weather any storm.” DAVID SIPP, Mr. Handyman of Northern St. Joseph and Elkhart, IN, and 2012 President’s Award winner, opened his Mr. Handyman in 2008, too. David earned an Information Systems degree from Davenport University in Kalamazoo, MI, and spent 28 years in the healthcare field in IT for large hospitals. “I was tired of corporate work. I wanted to start my own business,” he said. Mr. Handyman was a
“We have a very supportive and enthusiastic corporate culture. I like helping other owners to be successful. It’s one way I can give back so others can get ahead.” good fit. “I’m a good salesman. I enjoy talking with customers. And, I show my service techs that I appreciate their work.” When the economy hit bottom and most small business owners felt inclined to pull back on marketing, David pushed ahead. As a member of the Marketing Advisory Committee, “I tell owners to be aggressive with their advertising—continue to build awareness and stay top of mind with your customers.” David’s philosophy works. He plans to join our Million Dollar Club this year. PROTECT PAINTERS is the newest Military Friendly Franchise brand in the Service Brands portfolio with 40 units open in the US and another 300 territories available. The brand is well positioned for entrepreneurs and veterans who want a ground-floor, Executive Model business. Meet two owners who know how to mix business with pleasure. Our newest ProTect Painters owner, PAM ESTABROOKE, Protect Painters of Central Gwinnett, GA, is a ball of fire. She worked as a district manager for the original owner for eight years before taking over the franchise this year. “Business is off the chart,” she says. “I have four sub-contracted crews working fulltime.” Ask her why business is so good and she’ll tell you, “We’re hitting our marks with marketing. There’s pentup demand in the area. The economy is feeling better. And, people who are selling their homes are getting them street worthy.” It is a great time to own a ProTect Painters franchise. “I bought because it’s a solid investment. It will help fund our daughter’s college,” says Pam. “It’s also supporting our lifestyle. I work from home, and I have a flexible schedule. I can easily make time for volunteering,
the PTA, our daughter’s lacrosse games, training for half marathons, and spending time at our lake house.” BUDDY RHODES, owner of ProTect Painters of the Roanoke Valley, VA, spent 25 years in the military reserves with tours in Afghanistan and at the Pentagon before joining our franchise family. He’s a logistics expert; he can set up anything, anywhere. He basically ran a small business while working for the Department of Defense—establishing goals, managing projects, coordinating resources, advising people, maintaining morale, and measuring results. “It’s hard at times for veterans to come home and to readapt to civilian life,” says Buddy. “With ProTect Painters, we have a very supportive and enthusiastic corporate culture. I like helping other owners to be successful. It’s one way I can give back so others can get ahead.” Buddy has an optimistic attitude about life and business and signs his emails “Ever Forward.” That says a lot about the type of person he is and why he’s successful as a ProTect Painters owner. If you want to own a business that won’t own you, consider our Molly Maid, Mr. Handyman and ProTect Painters brands. With our increased franchise fee discounts, we’re making it easier for qualified individuals to realize financial security and lifestyle rewards. For more information on Molly Maid, visit: www.MollyMaidFranchise.com Learn more about Mr. Handyman at: www.MrHandymanFranchise.com And, find out more about ProTect Painters at: www.ProTectPaintersFranchise.com
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Dan &Wendy Remalkus
Profile
Dan and Wendy Remalkus have combined military service years of nearly 50 years between the two of them. Dan joined the Air Force in 1979 in Finance and Budget and served until 2000. Wendy served in the Air Force from 1979 until 2003 in Financial Management. The two met at Hurlburt Air Force Base in Florida in 1995 and will be married for 13 years in July. With their years of military service behind them, Dan and Wendy were looking for an opportunity that, in addition to their day jobs, would help them make sure they could retire comfortably. Wingstop was a good fit for them because the restaurant requires only eight to ten staff members. Managers are in place to handle the day to day operation, and the Wingstop menu focuses on one core product – so there are not a lot of new items or an always changing menu to work with. This allows them the freedom to carry on in their other careers – Dan is a program manager for a defence contractor out of California and Wendy is a consultant for a CPA firm.
Dan and Wendy now have to locations open and have just signed on to open a third. While the couple does not work together in the restaurants on a regular basis, they are involved in the books and payroll, and are on hand to make sure the stores are doing well and the guests and staff are happy. With their extensive military background, Wendy feels confident that she and Dan are well equipped for franchising success. “The structure that you have in the military is very similar to the rules you have to follow in franchising. You have rules to follow and if you do what the books tell you too, you’ll do well. But you have to pay attention and work hard which is what we learned from the military. While looking for the right franchise to suit their needs, Dan and Wendy found out that there were two existing Wingstop stores in the area, and the owner was trying to sell. Dan explains how things
progressed from there: “We visited several times and loved the food and the atmosphere. We knew the cleanliness and quality were really outstanding so we looked into it further and worked with a broker to purchase the stores. We’ve been going strong ever since.” Dan and Wendy are in the process of looking for a space for their third store, and plan to open the doors by December of this year. They are also considering opening additional stores after that. Although neither of Dan and Wendy’s Wingstop locations in Gaithersburg, Maryland are in close proximity to a military base, they do offer a 10 percent discount for active military personnel. They are well-known by veterans and active military in the area and see a lot of their regular guests at least once a week. For More Information: Web: www.wingstop.com
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V e t erans in Franchising
M adel y n I nsley, Creative Director, L ib er t y Ta x Ser vice
Marine Training
Pays Off At Tax Time Since he was young, Patrick Gomez wanted to be different from everyone else. In his Junior High School, all of the other students wanted to go to Kennedy High School. Patrick had done his research and learned that Norman Thomas High School had a strong marketing curriculum. So he enrolled and committed to take the train into Manhattan every day to attend a different high school than all his friends. As if high school isn’t hard enough, Patrick fell in with the wrong crowd. As he tells it, “We weren’t bad, but I was not paying attention to my academics.” On a whim, Patrick talked with a recruiter for the Marine Corps, who was regularly at the school. After a few conversations, Patrick knew that was the route for him. The Marine Corps enticed him simply because it was what he always wanted, to be – The Few. The Proud. “The whole aspect of being elite really appealed to me,” explained Patrick. “I’ve always been apart from the rest of the crowd, always doing something better than
“I was taught to be a warrior whether in the Marines or the business world. I was trained to overcome any challenge as long as I was breathing.”
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the next. So the Marine Corps was a good fit. Besides I didn’t think too much about it – I just did it – because if you think too much it’s never going to get done,” reflects Patrick. Unfortunately, once he got back from boot camp, Patrick’s life was forever changed. His father, who had been ill, passed away, leaving Patrick’s mother alone and in desperate need of her youngest son. At nineteen, Patrick returned home to support his mother, who had taken a job watching neighborhood children to help the two of them make ends meet. Patrick took on several additional jobs in addition to being a Marine. He was an E3 when he left the Marines. “If you were a child going into Marine boot camp, you were a man coming out. It gave me a whole new perspective on things, on how to cope with situations better. I was thankful I had been through boot camp – not knowing what I was about to encounter when I came out. “In the Marines, they teach you that when you hit a wall, you find a way to get over it,” explains Patrick. “The Marines taught me that you never give up,” states Patrick. One morning, over coffee in their New Jersey home, Patrick told his wife, Marisol, that he was going to do some research on tax schools he had seen advertised. With her full support, he got in his car and drove to the Bronx. He didn’t know why he drove by the Jackson Hewitt and the H&R Block locations that had signs regarding tax school. He’s not sure to this day why he drove to the Bronx – 40 minutes out of his way – to look for tax courses. Finally, in Castle Hill, he stopped in front of a Liberty Tax office with a sign in the window advertising “Free Tax Courses.” Patrick explains that it wasn’t the “free” that made up his mind that this was the place to take his courses. “I would have paid,” he explains. He called the provided course number several times to register for the course. “I was determined to take courses with Liberty Tax at the Castle Hill Liberty location. But I had no idea why – at the
time. I now know,” grins Patrick. He is referring to the twist of fate that connected him to Bablu Shahabuddin, Liberty Tax Service’s #1 ranking franchise owner. “I am sure that it was meant for me to learn from Bablu. I got a call back from the school that classes were going to start at 10:00 a.m. and I was registered. Erica Blair was great, a fantastic instructor. From there I was introduced to Bablu.” Patrick states that he was interested in owning a franchise but had not yet decided whether to go with a tax business or a popular sandwich chain. After many conversations with Bablu, Patrick started working for him. “I wanted to study under someone so knowledgeable of the Liberty system and get experience for the future.” While in the back of his mind, he remembered what Bablu has casually mentioned to him during one of the many conversations, “Hey, you can own your own Liberty.” “It was tough, but it was exciting. I would get up at 5:00 a.m. to beat bridge traffic to open the office,” Patrick laughs at the craziness of it all. “I knew, in the long run, I was involved in something big.” After the end of tax season, Patrick wasn’t making enough money to support his family by working part time. “I did what any other family man would do – I went to work full time, but for another company. My wife is a facilities maintenance site supervisor and I became an area manager at her firm,” Patrick shakes his head, as if he disagreed with the job. “I stayed in contact with my Liberty friends through Facebook. One of them invited me to the convention. So after talking it over with my wife, we went to the convention and two or three weeks later I left my area manager job.” “I had done taxes before but never the Liberty way – the Liberty Waver, the unique marketing techniques, handing out flyers. I thought [other tax franchises] were boring and overcharged for their services. You can be yourself with Liberty.”
Patrick explains that his first tax season had many hurdles. “With the whole tax season delayed and some technology changes, I reverted back to my training from the Marines – never give up. All this was not going to stop me. I was not going to give up and quit. I was taught to be a warrior whether in the Marines or the business world. I was trained to overcome any challenge as long as I was breathing. And I was still breathing. Of all the years to have my first tax season! The delays and changes were not going to deny me – I was going to finish successfully.” And that’s just what he did. In the end, Patrick found a way to stand out from the crowd even in business. Patrick credits his success to the support of his wife and going “above and beyond” every day. Taking time with each customer and educating them on what he did with each return and why, paid off with happy customers. “I don’t want them thinking I’m a hero because their refund was higher than last year’s return. I explained to them what I did so they understood where the money came from. I wouldn’t want them to get conned because someone got them more money than they should have. It’s double checking the credits and deductions, not miraculously coming up with a higher refund,” commented Patrick. If they had an issue or concern, he would sit on a conference call with them to the State of New York or the IRS. “I showed them there was nothing to fear.” Now that he has his first tax season behind him, Patrick is spending more time with his family. When asked what his plans were for the future, Patrick replied with a broad smile, “Well Bablu is known as the King of Manhattan, so I want to be known as King of Westchester/Rockland County.” Madelyn Insley is the Creative Director for Liberty Tax Service. For More Information: Web:
www.libertytax.com
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V e t erans in Franchising
Fra nchise C onsulta nt, T he D w yer G roup
Today’s Top 100 Franchises
Rated by Veteran Business Owners Excerpts from a Special Report by Franchise Business Review Much has been written about the natural fit between military experience and franchise ownership. Franchising, like the military, is centered around clearly defined systems, a set structure, discipline, and teamwork. Because of this, people who’ve had successful military careers may excel in the world of franchising. Many franchise companies offer special incentives for franchisees from the Armed Forces. These incentives may come in the form of discounted franchise fees, financing assistance, or ongoing support specifically designed for veteran franchisees. Some brands, like ActionCOACH, have even offered free franchises to veterans as part of their recruitment efforts. With all of the special offerings and opportunities available to a vet, the search for a franchise may seem overwhelming. This report is designed to help make that process easier. Franchise Business Review is the only researcher to look at which franchise opportunities are the most veteran-friendly based on franchisee satisfaction and performance—perhaps the most telling data of all. Veterans & Franchising is the true story behind what franchise brands say they will do for veterans and what they actually do. The data for this report was compiled
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“Veterans & Franchising is the true story behind what franchise brands say they will do for veterans and what they actually do.” as part of Franchise Business Review’s Veterans & Franchising 2012 study, which recognizes the top vet-friendly brands based on overall veteran franchisee satisfaction. To compile the data for this report, we surveyed nearly 3,500 military-trained franchisees, representing 265 brands. We also interviewed senior executives and franchisees at several brands for their first-hand perspective. From this data, we identify our list of Top 100 Franchises for Veterans, which includes companies with above average satisfaction among the veteran franchisees we surveyed. In our recent survey of close to 3,500 military trained franchisees, we found ten brands that especially stand out when it comes to franchisee satisfaction: Heaven’s Best Carpet Cleaning, CertaPro Painters, Sotheby’s International Realty, American Poolplayers Association, Cruise Planners, Home Instead Senior Care, FASTSIGNS, TeamLogic IT, Miracle Method Surface Refinishing, and Jan-Pro. Not surprisingly, many of these names are the same brands that top our annual list of Top Franchises for all of franchising. It makes sense that brands focused on overall franchisee satisfaction would also have high satisfaction among franchisees who are veterans.
Hundreds of franchise brands offer special discounts and incentives to prospective franchisees with military experience, making it an excellent time for veterans to consider a franchise opportunity. Franchise brands recognize the significant strengths and related skills that veterans can bring to a business—especially a franchising business, which is built around systems, teamwork, and following a step-by-step protocol. Franchisees with military experience aren’t necessarily guaranteed success, but they may have more characteristics for success than non-veterans. From the perspective of a potential franchisee, veteran or not, it’s always important to carefully research a particular brand before investing. Even though a number of franchise brands offer special incentives to franchisees with military experience, these brands should still be thoroughly vetted to ensure a good fit. Prospective franchisees (especially those stationed abroad) should ask franchisors for online company materials and financials, franchisee satisfaction reports, webinars, and anything else you need to make the research process easier from afar. Perhaps most importantly, you should contact existing franchisees who are veterans to get the true picture of how well the system supports vets.
Top 100 Franchises for VETERANS
Food & Beverage
Services
Auntie Anne’s
1-800 Water Damage
Advertising & Sales
Checkers & Rally’s
Boulder Designs
Charley’s Grilled Subs
Proforma
Culver’s
Automotive
Ground Round
Auto Appraisal Network
Christian Brothers Automotive Color Glo International LINE-X
Snap-on Tools Tint World
Business Services ActionCOACH
FASTSIGNS International FocalPoint Coaching Sandler Training Child Services
The Goddard School
Firehouse Subs Happy and Healthy Products Jack in the Box
McAlister’s Deli Papa Murphy’s Penn Station
Quaker Steak & Lube Simple Simon’s Pizza Uno Chicago Grill Yogurtland
Health & Beauty European Wax Center Sport Clips
Mathnasium
Home Services
Cleaning & Maintenance
Budget Blinds
AdvantaClean
Aire-Master of America
Anago Cleaning Systems (Master Franchisors) Buildingstars
DKI (Disaster Kleenup International) Heaven’s Best Carpet Cleaning Jan-Pro (Master Franchisors) MaidPro
ASP - America’s Swimming Pool Co. CertaPro Painters
Five Star Painting HouseMaster
Miracle Method Surface Refinishing Pillar To Post
Caring Transitions
Fish Window Cleaning Services GoWaiter.com Molly Maid
Mosquito Squad
Paul Davis Emergency Services Paul Davis Restoration Pestmaster PostNet
Precision Concrete Cutting Precision Door Service Ram Jack
Signal 88 Security
Truly Nolen of America Two Men and a Truck Unishippers Weed Man
Window Genie
Specialty Retail Aaron’s
Big Frog Custom T-Shirts
Interstate All Battery Center Wild Birds Unlimited
Surface Specialists Systems
Sports & Recreation
Pet Services
Kampgrounds of America/ KOA
Martinizing Dry Cleaning
Sit Means Sit
Oxi Fresh Carpet Cleaning
Real Estate
Office Pride
1-800-GOT-JUNK?
The Maids
PropertyGuys.com
Finance & Tax
United Country Real Estate
Sotheby’s International Realty
American Poolplayers Association
Technology Computer Troubleshooters TeamLogic IT
Travel
Value Place
Cruise Planners
Murphy Business & Financial
Senior Care
Expedia Cruise Ship Centers
Tax Centers of America
FirstLight HomeCare
Fitness
Homewatch CareGivers
Cash Plus
Liberty Tax Service
Padgett Business Services
Brickhouse Cardio Club Koko FitClub
BrightStar
Home Instead Senior Care Right at Home
Visiting Angels
CruiseOne
For More Information: Web: www.franchisebusinessreview.com Full Report: http://franchisebusinessreview.com/ content/files/FBR_Top_Franchises_ Veterans_2012.pdf
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Military Veterans Impress Us! We Want More!
Now offering
50% Franchise Fee Discount for any retired or former veteran with an honorable discharge!
the
GROUT Doctor
速
Since 1992
Find out more about this Home Based Business at
www.GroutDoctorFranchise.com or call 877-476-8800 ext. 722
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Leading National Franchise For Grout Repair
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Should I Buy an Existing Business or Open a New One? “If you really want to find a good acquisition target, try some old fashioned networking. Business owners know other business owners and they can help you with introductions.” Acquiring an existing business could be a great idea, but if you will be a first time business owner it is probably a good idea to find a franchise resale. Just as with starting a new business, you will have much better odds of success as part of a franchise system. There is a big difference between managing a large business and owning a small business. As a former corporate executive, I had a fair amount of business experience prior to becoming a business owner. However, like a lot of former executives, I really wasn’t ready for all of the unknowns associated with running a small business. No longer do you have the support staff to take care of all of the functional roles such as accounting and finance or human resources, real estate, legal etc. If you buy into a franchise system, they will teach you how to efficiently manage all of these functions. If you acquire a non-
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ex per t advice
Daniel Brunell, President, Dearborn West, LLC
ex per t advice
Daniel Brunell, President, Dearborn West, LLC
franchised business, the only training you may get is from someone who may be great at running the business, but terrible at prepping you to do so. Standing in line to get permits and dealing with phone or utility company representatives can be frustrating, but not knowing what things need to be addressed is what can create big trouble for your new business. With an existing franchise unit the books will likely be clean and you will have access to a well designed training program. The franchisor has a vested interest in your success so you will be trained by professionals who know how to teach you to run the model the way it was designed to work. Good franchisors are very involved in vetting any potential buyers of their existing units and they will work hard to help you succeed. The biggest challenge with an acquisition is access to a quality business. It can be very difficult to find something worth buying. We are still near the bottom of the market as it relates to resale businesses
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and it is tough to find an existing business that offers a significant advantage over starting a new one. Trying to find a business by looking through broker listings posted on various websites can be very frustrating. The reality is that many of the best businesses are never listed with a broker. They are typically sold to a family member, an employee, a competitor or a friend of the business owner. In other words, there are already people waiting to purchase the business before the owner is ready to sell it. When the owner is ready, he simply goes to the people he knows and offers it up and if one of them wants it, he has his lawyer process the transaction and it is a done deal before the general public ever knows it was for sale. Often, many of the businesses listed at business for sale sites have some serious flaws. You have to consider that by virtue of it being listed on a website, none of the owner’s friends, family, employees or competitors were interested in buying his business, so what does that tell you?
Quite often the business is just simply overpriced, but many times there are bigger problems that may prove difficult for the new owner to overcome. Things like a bad image can be fixed, but a bad location can only be fixed by moving, which can be costly. If you want to buy an existing business it is often going to be a “fixer upper,� so you should have experience in turning around flagging profit centers and be ready to spend the time and money required to do so. If you really want to find a good acquisition target, try some old fashioned networking. Business owners know other business owners and they can help you with introductions. Poke around at the local chamber of commerce or the Rotary Club. Talk to as many business owners as possible and ask them who they know that might be ready to sell. One of the best sources of high quality businesses that might be good targets for acquisition will be the CPAs in your market. These folks keep the books and do the taxes for
the local business community and they will know if their clients are ready to sell. Consultants who work with franchisors can be a great resource too, because many franchisors help their franchisees find buyers, so the business is never listed on a broker site. The other issue besides access to a suitable acquisition is cost. Some people want to buy cash flow, but this can be expensive. Depending on the business type you can expect to pay three to five times earnings, meaning that if the same rate of return holds after you buy the business, it will take you three to five years to get back to zero. This can work out OK using borrowed funds if you can cover the debt service, support the growth of the business and meet your personal needs off of the existing cash flow. Unfortunately, when a business changes hands it can also lose customers and there can be a decline in sales before they start to rise again. Additionally the purchase of the business comes along with liabilities like rent, utilities, cost of goods and payroll that need to be met even if sales are slipping. Sometimes the biggest costs associated with an acquisition are the ones that you will never know about until you own it. It is kind of like buying a used car. Even the best inspection can miss things that you won’t know about until you drive it for a while. All of this is not to say that an acquisition is a bad idea, but thinking that it involves far less risk than a start up is not exactly settled science. The price associated with buying a healthy existing business can be several times what it costs to start a new one. If you are not afraid of sales and marketing, you can start a new business, keep a lot more of your money in other investments and build your own revenue base while growing your equity at a much faster pace. Just as with an acquisition, a start up is far less risky if you are working within a proven franchise model. The total
investment for developing a franchise can range from a few thousand dollars for a simple home based business to several million for a hotel. The total investment represents the costs of the franchise fee, furnishings, fixtures and equipment, inventory, site improvements, permits, professional fees, initial marketing and any other costs directly related to opening your business. On top of this the operating capital required to fund the initial operation of the business can add several thousand additional dollars per month until the cash flow breakeven point is achieved. Each franchise company has qualifying financial criteria that generally considers the net worth or liquidity of the potential franchisee. The requirements vary from company to company, but they serve as a rough gauge as to whether the candidate has the financial wherewithal to successfully start one of their outlets. The basic rule of thumb is that you will need approximately 30 percent of the total investment in liquid funds and you can finance the remaining 70 percent (provided you have assets such as savings or home equity to collateralize the loan). Generally, the total investment figure does not include much working capital. The total of your budgeted monthly operating expenses combined with your personal living expenses for about a year is what you will need in addition to the 30 percent in liquid funds. One of the biggest reasons businesses fail is because they are undercapitalized, so it is crucial that you have a good cash reserve or other streams of income until your business becomes profitable. Most reputable franchise companies will not grant a franchise to someone who is not clearly qualified, so if close scrutiny of your financial background is not required, this should be a red flag about the franchisor.
Daniel Brunell
When franchise shopping, it is important to look in a price range that is appropriate to your resources. Everyone has different levels of risk tolerance and some people have a working spouse that can cover the personal living expenses while the new business is getting started. It is usually a good idea not to invest more than half of your net worth into a new business venture. If it sounds like it takes a lot of money, it certainly can be, but the number of choices is vast and there are opportunities in most price ranges. The benefits of being a successful franchise owner can be substantial and purchasing a franchise is an excellent way to start a business. Just be sure to stay in your price range and do not overextend your capabilities. Remember, your first business doesn’t have to be your last business. If you don’t get overextended and you do it right, you will have cash flow and or equity that you can use later to develop bigger and better businesses down the road. Dan Brunell is President of Dearborn West, LLC, an international business opportunity brokerage headquartered in Southern California. For More Information: Phone: 951-587-6929 Email: dbrunell@dearbornwest.com Web: www.dearbornwest.com
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f ra nchisee in action
B enniga n’s
David Hollinger
Bennigan’s:
B ack on T op ! Bennigan’s, the iconic restaurant, is back and stronger than ever! Offering amazing chef-driven food at competitive prices and an atmosphere that is welcoming and memorable, the company boasts a proven reputation to provide “American Classics with a Hearty Dose of Irish Influence” and is dedicated to making “Every day, St. Paddy’s Day.” David Hollinger, owner of the Hollinger Restaurant Group, cannot help but rave about his latest investment as a franchise owner in the Bennigan’s franchise company. The enthusiasm and excitement radiates from this man who has nothing but positive things to say
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about his experiences with Bennigan’s so far. He begins by speaking of his memories of Bennigan’s in the 70’s and 80’s and the wonderful atmosphere and fun times he spent there. In their heyday Bennigan’s operated with 400 stores to their credit, but times changed and in 2008 Bennigan’s filed for bankruptcy. Why did this happen? Hollinger believes it had to do with the cost of large buildings that were placed on large pieces of land causing large overhead costs for the franchisees. A newly designed prototype was introduced and the company believes their new prototype represents one of the best opportunities currently available
in the casual dining franchise industry. Hollinger agrees, stating the new face of Bennigan’s is presented in smaller, yet spacious and well laid out buildings on smaller properties, creating a much more efficient operational system for franchise owners.
A Path Less Followed Hollinger’s road to owning a franchise has been one full of diverse career choices and vast experience. He points out that in order to be a successful franchisee; you have to have secure and available capital. He talks about his early experience in the restaurant industry as a manager. In his
early 30’s Hollinger just didn’t have the money available to him to own his own restaurant, and pursued a career in as a car salesman, and a very good one at that. So good in fact he was eventually able to purchase his own dealership. In the late 1990’s Hollinger also tried his luck in the real estate and building industries and by 2005-2006 he was developing small subdivisions, and owned several rental properties.
Currently living in Oxford, Mississippi, Hollinger and his wife plan to relocate to Panama City, Florida which will be home to their new Bennigan’s franchise. Hollinger states the reason for the move was multi-faceted. His wife, completing her doctorate will have a bigger job pool to choose from in their new location and also, the population demographics are much more encouraging for the success of a new franchise than Oxford.
By 2012 David Hollinger found himself financially secure and in a position to rethink franchising. In the fall of 2012, after just turning 50 years old, Hollinger purchased his first Bennigan’s franchise.
Choosing which franchise company to go with was a fairly simple process for Hollinger. When asked what makes Bennigan’s stand out above the others, he couldn’t praise the franchisor enough. He
stated, “I’ve been looking for years for the right franchise for me” and Bennigan’s fit the bill. Hollinger confesses, “I called around a half dozen other franchises and didn’t get a response for days.” Carolyn Peoples , Senior Manager of Franchise Development for Bennigan’s responded in six to eight hours and provided Hollinger with friendly and professional navigation through the process of becoming a franchisee. And that wasn’t where the guidance ended. CEO and President of Bennigan’s, Paul Mangiamele, also contacted Hollinger and spoke with him for an hour, providing him with information, answering his questions and
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Hollinger’s most inspiring words of wisdom: “Never give up on your dreams. I am 50 years old and going back into franchising.”
genuinely showing an interest. Hollinger states, “He was very down to earth and really knew what he was talking about.” And that wasn’t the last he was to hear from the CEO. Hollinger states, “He’ll call you out of the blue to make sure you’re doing alright and he’ll return your calls. He goes out of his way for his owners. He figures if it’s important enough for you to ask, he will find the time to answer.” Being well positioned to recruit new franchisees and offer support in ways other companies are limited, Bennigan’s Franchisee support is impressive to say the least. It includes real estate and site selection, lease approval and review, franchisee manager training, purchasing, new store opening support, marketing, public relations as well as ongoing operational support. Hollinger spoke of the four to six week owner training he was provided with at the company’s corporate
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store in Chicago, with another eight weeks of training available to the general manager. The company also offers an additional two to four weeks of support when you first open your doors, helping train additional staff. Bennigan’s requires a strict adherence to their training program. Once a location is opened, it is important that franchisees stay true to the systems Bennigan’s has created, to ensure the integrity of a brand with 37 years experience. The bottom line is Bennigan’s really speaks for itself, “go eat in one” says Hollinger, “you’ll see why Bennigan’s is doing so well.” He shares the company’s mission to provide customers with a legendary brand experience making every meal exceptional. “You must give them (customers) great meals every single time they come in,” states Hollinger. The consistent quality of the Bennigan’s brand has helped propel the company back to the top of its field only a few short years following bankruptcy. Featuring a beautiful atmosphere, fantastic
bar system and a new simplified menu, with large portion sizes including classics like the World Famous Monte Cristo as well as new options, this chef-driven menu offers something delicious for every taste.
The Road Ahead Hollinger, excited about his own franchise ownership, offers some helpful advice to others hoping to become a franchisee. First and foremost, ensure you have adequate capital backing you. The restaurant business requires money and if you invest in it properly, you will see the rewards. Hollinger’s most inspiring words of wisdom: “Never give up on your dreams. I am 50 years old and going back into franchising.” So if you’re looking for a franchise with a proven name that continues to thrive and grow, check into Bennigan’s for some amazing American cuisine, with the warmth and hospitality of the Irish. You’ll be glad you did. For More Information: Phone: 1-800-GOT-BENN Web: www.bennigans.com
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PROGRAMS & EVENTS IFA is the premier resource for franchise news, trends, and strategies. Plan your strategy for professional career, education and networking development.
Legal Symposium – May 5-7 – Washington, DC The 46th Annual Legal Symposium is developed by a task force of franchise legal experts. Blending topics focused on franchise business and law, programming addresses the latest business and franchise law developments and features knowledgeable franchise law practitioners, franchise executives and state regulators. IBA/IFA Joint Conference – May 7-8 – Washington, DC The 29th Annual IBA/IFA Joint Conference is developed in partnership with the International Bar Association’s Franchising Committee to create a program relevant to our friends in the international franchise law profession. Experienced legal counsel share invaluable information regarding the latest developments in international law. FranCamp 2013: Digital Marketing & Technology Best Practices Conference – May 14-15 – Atlanta, GA FranCamp 2013: Digital Marketing & Technology Best Practices is a new conference from IFA designed to help franchise professionals understand technology options and platforms. Includes case studies and best practices designed to integrate technologies like GPS, content management, communications, social, local, mobile and more into your business effectively. IFA Summer Board & Forum Meeting – June 9-11 – Chicago, IL The association’s leadership, including the IFA Board of Directors, Franchisee Forum and Supplier Forum, gather to conduct association business during our 2013 Summer Board & Forum meeting. This meeting is by invitation only. Public Affairs Conference – September 16-17 – Washington, DC Meet us in our nation’s capital for a gathering of our Board of Directors, committees, forums, councils and task forces to network and visit with their Members of Congress during IFA’s most important advocacy event. Leadership meetings will also be held in Washington September 15, 16 and 18 to conduct important association business. Franchise Development Seminars – July 17-18 – Philadelphia, PA // September 25-26 – Denver, CO // December 8-9 – New York, NY Participate in an in-depth exchange of information with franchise development experts revealing tips and tools for building your franchise brand, featuring programming focused on industry challenges, successes and what to expect for the future. International Symposium – June 18-19 – New York, NY The International Symposium focuses on the latest trends and strategies for increasing your franchise system’s presence internationally while meeting the people that can help you make it happen. With more and more countries opening their doors to businesses outside their own borders, executives from all over the world come together to discuss current trends and strategies. This year’s symposium will be held just prior to the International Franchise Expo. International Franchise Expo – June 20-22 – New York, NY Co-hosted with MFV Expositions, the IFE brings together hundreds of franchise concepts and thousands of qualified prospects from across the United States and more than 80 countries. West Coast Franchise Expo – October 24-26 – Anaheim, CA Co-hosted with MFV Expositions, brings together franchise concepts and qualified prospects from the growing West Coast market. Emerging Franchisor Conference – November 13-14 – Ft. Lauderdale, FL The Emerging Franchisor Conference is designed to address challenges and opportunities unique to franchise systems with 300 or fewer units. The Emerging Franchisor Conference is a prime networking and educational conference for franchisors that are ready to take their system to the next level. AND MARK YOUR CALENDAR NOW FOR THESE EARLY 2014 EVENTS Franchise Expo South – February 6-8, 2014 – Houston, TX Co-hosted with MFV Expositions, the FES brings together franchise concepts and qualified prospects from the southeastern United States, Latin America, and the Caribbean. Annual Convention – February 22-25, 2014 – New Orleans, LA More than 3,000 franchise professionals will gather to learn, network and chart the future of franchising. The Annual Convention presents multiple business and professional development opportunities along with a variety of ways to learn from and share best practices with successful franchise executives from various industries of all sizes. Franchising USA
ex per t advice
Kelly Maguire, Sr. Director of Digital Strategy, AviaTech
Content Marketing:
A N ew T ake O n an O ld Content marketing at its core is about creating value in the digital world around your brand. In and of itself this is not a new concept, it is only becoming a buzzword topic because of the implications that certain shifts on the web are having on the impact that content can have. Franchising USA
“Content marketing touches all areas of marketing and must be considered heavily with developing a plan of action. The best strategy in the world will fail if there is no substance behind it.” with the consumer expectations from the new online experience, that is that content be valuable, relevant, socially sharable, and encourage engagement. Put more simply, content must actually be good. This shift in the dynamic of the web creates some exciting opportunities for businesses and brands to put this new power to use, but with this power comes many challenges and difficult to answer questions. The first challenge posed is the acceptance that content marketing is a critical element of a well thought out, well executed media plan. Content marketing touches all areas of marketing and must be considered heavily with developing a plan of action. The best strategy in the world will fail if there is no substance behind it.
ld I dea The web has undergone several focus shifts that place a greater emphasis not only on content, but evaluates that content for certain criteria to assign weighted value to it. Unlike SEO of old, it is no longer enough to simply produce mediocre content that is keyword dense and place it in a static environment to be indexed. The new web requires that content truly deliver value and be executed to be compliant
This brings the next question to light: How can good content marketing be achieved? There are several aspects to the right answer but they all center on the same principles as other marketing challenges; talent to produce the content, expertise to leverage it, and experience to integrate it into a media mix. These can all be achieved by sheer manpower, a vast array of technologies, or the right partner that is positioned to serve as a guide and resource to make content marketing work for your business. Any way you choose to address it, there is no avoiding that it will take commitment, investment, and resources, one way or the other. Once it is accepted that content marketing can and should play a critical role in a
Justin Ruschell
business’s marketing plans, the focus then becomes “how” to really put the wheels into motion: • Content curation. This is the most effective method of cultivating content in that a business can utilize the manpower of their customers to curate relevant and often quality content to proliferate throughout the web. While this is an ideal source of content, it requires a plan and often technology to effectively execute and in most cases, depending on the business, it needs some kind of incentive based program to encourage consumers to produce the content to be curated. • Content creation and services. This is currently the most commonly used approach and the easiest for a business to control. However, it can also prove to be extremely difficult to not only produce consistent content, but to produce content that offers the necessary value to be impactful. Unless a business is naturally conducive to being a publisher it can be hard to find an angle that will entice consumers to engage. That being said, every brand can find a voice and can develop a value if they are creative and ambitious enough to really consider their target audience and how they can best be served. It is this “serve the customer not the business” mentality that can be
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Kelly Maguire, Sr. Director of Digital Strategy, AviaTech
as well as use it to formulate additional content that your audience will respond to. Like any other marketing, it is a matter finding what works and using it the best you can. Content marketing is not new but it is changing, and more importantly it isn’t going away. Businesses need to begin embracing the changes on the web and preparing to shift along with it. Whether it is identifying areas in house that can begin to become the expert resources necessary, or it is searching for the right partner to help navigate the waters, the smart business will be the one who doesn’t wait until they have no choice, but gets in front and stays there.
difficult for businesses to embrace but it is crucial to the success and acceptance of content. • Content as a tool. This is a unique perspective in the way content is viewed. Looking at content as a vehicle to draw consumers in, get them talking about your brand, and get them sharing and assisting in the promotion of your business is a good way to “evaluate” whether the content you are producing is the best it can be. If content is viewed through this lens and found to be serving any purpose other than these principles, then it may be worth reconsidering what, and more importantly why, you are posting it. Like any tool box, there are many choices, but selecting the right tool will get the job done the best it can be. Content is no different; the right content will achieve the best results. Consider this, “what is the objective of the content”, “how will it serve or likely be received by the consumer”, and “how can it best be leveraged”? If this doesn’t produce an actionable answer then there is always the fallback question to ask; “would I find this interesting if I were a customer”? The key to this question is being able to be objective in its answer.
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• Outsourcing and integration. Oftentimes businesses come to the conclusion that they simply are not well positioned to tackle the challenge of content marketing, and they need assistance. Whether it is resources or understanding that leads to this conclusion, it is wise to consider finding an expert that can truly bring your content to life. A partner that is strong in content marketing can offer many benefits beyond simply the production of content; they can help define your value and craft executions for content beyond what a business might consider. They can bring insight and expertise along with knowledge that can be invaluable in a good content marketing program. Perhaps most significantly, they can develop strategies to make content marketing work to its full potential and lift the burden of resources from the brand. • Measurement and extension. This can be one of the trickier areas of content marketing but as a whole the industry is making strides at providing greater insights and performance measurements to indicate the successes and failures. With this new data, it becomes easier to select the best content being produced and extend it to maximize its impact,
Since joining Aviatech in 2010, Kelly Maguire has played a leading role in adding new services to the agency’s core capabilities, including the development of award-winning advergames and sweepstakes initiatives, digital PR, and paid social advertising. He has overseen the implementation of new technologies to help streamline departmental operations, and supervised a departmental expansion as it grew by more than 50%. Kelly has also contributed to the agency’s thought leadership with published articles and appearances at seminars and client conferences. Kelly’s former positions include Strategist at Omnicom network OMD, the world’s top global media brand, where he was involved in developing the emerging media department; and Senior Program Manager at Performics while owned by Google, where he interfaced directly with all major social networking sites. His work with Facebook directly impacted the introduction of cutting edge applications to their ad platform. Kelly holds a Bachelor of Science degree in Business Management from DePaul University of Chicago. For More Information: Web:
www.aviatech.com
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400+
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THE JAVITS CENTER, NEW YORK CITY
They’re coming from all over the world—over 400 of the top franchise companies will land in New York City ready to grow their brands and meet you, your goals and your dreams. IFE 2013 is your opportunity to speak directly with executives from the most well known brands, all in one place, at one time. Your personal and career freedom awaits.
For more information visit IFEinfo.com Register FREE use Promo Code: GPUSA Sponsored by:
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ex per t advice
Dale Willerton, The Lease Coach
N e g otiatin g C ommercial L eases & R enewals
For Dummies
It took me 20 years to write my book, Negotiating Commercial Leases & Renewals For Dummies; it takes a tenant only two days to read it. If you are buying a franchise and need to negotiate a new lease or facing a lease renewal, you must know what you are getting into beforehand. Keep in mind that, if you are unsure about how best to proceed, there is no better substitute than hiring professional help. Whether you are reading my book or attending one of my lease negotiating seminars at a franchise show, these are some of the leasing tips that I am teaching and preaching for tenants which will help you from making a very costly mistake:
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“The leasing process is just that – a process, not an event. The more time you, the tenant, have to put the deal together and make counter-offers, the better the chance you have of getting what you really want.” Be Prepared to Walk Away: Try to set aside your emotions and make objective decisions. Whoever most needs to make a lease deal will give up the most concessions. A good franchise in a poor location will become a poor business.
Ask the Right Questions: Gathering information about what other tenants are paying for rent or what incentives they received will position you to get a better deal. Consider that your landlord and his agent know what every other tenant in the property is paying in rent, so you must do your homework too.
Agents … Friend or Foe?
Dale Willerton
Negotiate to Win: All too frequently, tenants enter into lease
negotiations unprepared and don`t even try winning the negotiations (opting to simply hold their own or not lose). Going on the
defensive or simply trying not to lose won’t get you too much. With big commissions at stake, you can be sure the landlord`s agent, on the other hand, is negotiating
fiercely to win. Tenants should remember that it is okay to negotiate assertively.
Real estate brokers typically work for the landlord who is paying their commission. It is not normally the agent`s role to get the tenant the best deal – it is their job to get the landlord the highest rent, the biggest deposit, etc. Typically, the higher the rent you pay, the more commission the agent earns. If you are researching multiple properties, try to deal directly with the listing agent for each property, rather than letting one agent show you around or show you another agent`s listing. Your tenancy is more desirable to the listing agent if he can avoid commission-splitting with other agents.
Never Accept the First Offer: Even if the first offer seems reasonable, or you have no idea of what to negotiate for, never accept the leasing agent`s first offer. In the real estate industry, most things are negotiable and the landlord fully expects you to counter-offer.
Ask for More Than What You Want: If you want three months free rent, then ask for five months. No one ever gets more than they ask for. Be prepared for the landlord to counter-offer and negotiate with you as well. Don’t be afraid of hearing `no` from the landlord – counteroffers are all part of the game.
Negotiate the Deposit: Large deposits are not legally required in a real estate lease agreement. Deposits are negotiable and, more so than anything else, often serve to compensate the landlord for the real estate commissions he will be paying out to the agent. The Lease Coach is frequently successful with negotiating to have the tenant’s deposit returned upon renewing a lease.
Measure Your Space: Tenants frequently pay for phantom space. Most tenants are paying their rent per square foot, but often they are not receiving as much space as the lease agreement says.
Make All Offers Conditional: When negotiating a new lease, make your Offer conditional upon certain things – such as financing, franchise territory acquisition, satisfaction with the formal lease agreement, construction estimate costs and so on. This will let you legally and ethically rescind your Offer to Lease if outside circumstances hold you back. If you need more time, simply request an extension in writing so you can potentially remove your conditions at a later date.
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Dale Willerton, The Lease Coach
bring The Lease Coach in as a scheduled speaker at your next franchise convention. It pays to educate yourself. Taking the time to read about the subject or listen in on a webinar will make a difference. And, don`t forget to have your lease documents professionally reviewed before you sign them. With hundreds of thousands of dollars in rent at stake, personal guarantees and other risks, you can`t afford to gamble. In leasing, franchise tenants don`t get what they deserve, they get what they negotiate.
Who Should be the Tenant?
Go Slow for a Better Deal:
Don’t enter in a Lease Agreement (or an Offer to Lease) under your personal name. This will make you personally liable for everything. Instead, form a corporation or holding company which will become the tenant. If you are negotiating on a location, but don’t intend to incorporate until a later date, then the Offer to Lease should state that the tenant is Your Name on behalf of a company to be incorporated later (or Nominee). If you are opening multiple locations, it is often wise to form a new company for each lease agreement as further protection. Corporations also have tax benefits over sole proprietorships.
Franchisees often rush a lease deal and leave valuable incentives or inducements on the table. If you have the time to work with, I recommend that you take it. Often, The Lease Coach gets tenants more free rent, more tenant allowance or even a lower rental rate just by refusing to sign on the dotted line too quickly. If the agent or landlord is anxious to close the deal, you can use stalling tactics to better your position. Franchise tenants who invariably have regrets will usually tell you that the whole process happened so quickly they hardly realized what they had agreed to.
Select the Best Lease Length: While a five-year lease term is still standard (or even 10 years for some franchise systems), it is not necessarily the best term for your business. Consider your own future. Lease terms can also be negotiated in months, rather than years. Instead of signing a five-year lease, opt for a 56- or a 64-month term instead. This can work to your advantage as you can begin a lease term heading into the busy retail season and end your term going into the slower season.
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Negotiate, Negotiate: The leasing process is just that – a process, not an event. The more time you, the tenant, have to put the deal together and make counter-offers, the better the chance you have of getting what you really want. Too often, tenants mistakenly try to hammer out the deal in a two- or three-hour marathon session. It is more productive to negotiate in stages over time.
Educate Yourself and Get Help: If you are interested in learning more about commercial leasing and commercial lease negotiating, lobby your franchisor to
Another contentious issue for new and current franchisees I often hear about is how much real estate help a franchisor does or does not provide. There are, essentially, three main ways that most franchisors provide this kind of support. These are summarized below: 1) The franchisor will conduct site selection, secure and lease the location and then sublease the space to the franchisee. With this arrangement, the franchisee is obligated to accept the chosen location; however, he/she does not accept final responsibility for the lease. The franchisor, having signed the “head lease” for the location, will ultimately be liable too. Should the franchisee default or pull out entirely, the franchisor will keep the doors open and then refranchise or sell the business to a new franchisee. 2) The franchisor will delegate the leasing process to the franchisee to find and lease his/her own location, often referring him/her to a broker. This is, often, the worst scenario for the franchisee. A franchisee may be inexperienced in such matters and not know exactly what to look for. Leaving a new franchisee in the hands of a commission-driven real estate agent may not end well for the franchisee. 3) The franchisor or its area manager/ developer will conduct site selection;
however, will leave the lease negotiations to the franchisee. Typically, franchisees have little or no experience with such matters. The franchisee may well enter into the process unprepared and neither asks the right questions or negotiates effectively. As a result, that franchisee can blindly agree to an inappropriate lease term, accept too much commercial space for his/her actual needs and/or miss out on receiving valuable tenant inducements (including tenant allowances, build-out assistance and/or free rent). Therefore, before signing commercial leases, franchisees need to understand exactly how much help the franchisor will provide. You can learn what you need to know by asking the following questions: 1) Does the franchisor have an in-house real estate department or person? Are they working on salary or receiving a commission from the landlord? 2) Does the franchisor have a real estate department/person who contacts brokers to show properties? Despite what many franchise tenants believe, brokers work for landlords and earn healthy commission checks for signed lease deals. Therefore, that broker may be trying harder to serve the landlord than working in a franchise tenant’s best interest. 3) Does the franchisor have a so-called “Area Developer” who matches franchisees with brokers to conduct site selection? As above, this still leaves the franchisee paired with a broker. Most Area Developers are not real estate savvy. 4) Does the franchisor leave the entire matter (of looking for available space and negotiating the commercial lease) to the franchisee? For a free copy of my CD, Leasing Do’s & Don’ts for Franchise Tenants, please e-mail me to DaleWillerton@
TheLeaseCoach.com. Need a speaker for your next franchisee convention? Bring in The Lease Coach and help your franchisees. Dale Willerton is The Lease Coach, a Commercial Lease Consultant and author of “Negotiating Commercial Leases and Renewals FOR DUMMIES”
appearing in bookstores spring 2013. Got a leasing question? Need help with your new lease or renewal? For more information: Phone: 1-800-738-9202 E-mail: DaleWillerton TheLeaseCoach.com Web: www.TheLeaseCoach.com
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Edward Levitt, Sr. Partner, Aird & Berlis LLP
The Hidden Real
I n F ranchise F inancin “To set up the franchise system initially and to guide it through its first few faltering steps requires the drive and time of the owner of the business.”
Edward Levitt
There are many myths and misunderstandings surrounding franchising. None, however, are as pervasive and as dangerous as those dealing with financing. It is certainly important to the franchisor to “get a handle” on franchise financing issues, but it is equally important for the franchisees who buy the franchises, the landlords who rent space to the franchisor and the franchisees, the bankers who lend money to both, the suppliers to the system, purchasers of existing franchises and entire systems, and the stock analysts and investors who have to make some determination about the future prospects of public franchisors. The first cold reality which confronts the new franchisor or the franchisor borrowing for the first time, is that there
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are no “hard” assets in most franchise systems. Even though there may be real value in the trade marks and franchise agreements and possibly the leases in a franchise system, the classic scenario is that the franchisor is borrowing against cash flow and nothing more. This is always a tough way to finance, but is even tougher for the franchisor, because many would-be lenders and investors can’t put the strengths and weaknesses of a franchise system in proper perspective. To set up the franchise system initially and to guide it through its first few faltering steps requires the drive and time of the owner of the business. It is difficult, if not impossible, to have a franchise succeed under the hand of the hired “director of franchising”, no matter how capable that person might be. The reality then is that the owner of the business will have to take his/her time away from the original business, which usually translates into a hidden cost of the franchise expansion, when that aspect of the business, as a result, becomes less productive. Then there are the head office costs typical to any business, but with some unique aspects. In franchise systems there is the need for field representatives, who check on and liaison with the franchisees. There must be a more extensive communications capability than would usually be the case with a network of managers, who are told what to do, as opposed to franchisees, who
must be convinced what to do. There is nothing remarkable about these costs, until one tries to cover them with a rather paltry revenue stream generated from a mere 4 to 8 percent (typically) of gross revenues from a handful of franchisees. It is not unusual for a franchisor to be operating at a loss until as many as 10 franchises are up and running. But isn’t franchising itself an alternate form of financing the expansion of a business? Can’t a businessperson merely sell 10 franchises at $25,000.00 for each front-end franchise fee and have a quarter of a million dollars to finance the expansion of the system? These are the simple assumptions, often made, which lead to disastrous consequences. Yes, franchising is an alternate form of financing a business expansion, but only after the “pump is primed” and the system has enjoyed some measure of success. The neophyte franchisor has to find an initial $40,000.00 to $50,000.00 of seed capital at a bare minimum to: adapt the business concept for franchising, create an operation manual, write marketing brochures, formulate pro forma financials, put in place financial controls on the franchisees, put together the legal documents, etc. No, the front-end franchise fees, unless they are set at unrealistically high levels, won’t provide even this minimum level of funding. Why? Because the franchisor,
lities
inancin g
who is doing it right, will spend, directly or indirectly, as much or more on each of the franchisees as is received from them for the front-end franchise fee. The real costs and opportunity costs of establishing each franchise in a typical business format franchise system include: the costs of selling the franchise (including advertising, travel and sales commissions), site selection and lease negotiation, training the franchisee, assisting in the establishment of the unit, opening assistance and intensive support during the first few months of operations. Sales commissions alone, if an outside franchise salesperson is used, can run as high as $10,000 to $15,000, which is in some cases 50 percent or more of the front-end franchise fee. Everyone faced with the daunting task of evaluating the cash flow potential of a franchise system, especially the businessperson considering franchising as one of several expansion alternatives, must take into account certain matters, which are not always readily apparent. Firstly, it is very common for a new franchisor to make special deals with the first few franchisees in the system and charge a reduced front-end franchise fee or none at all. The cash flow deficiency thus created with respect to those franchise sales must be financed from somewhere.
The costs of franchise sales in the initial growth stages of a franchise system will be much higher than will be the case in later stages, because of the lack of ready acceptance of the business by potential franchisees, the inexperience of the new franchisor in the franchise selling process and because the direct costs, such as advertising and sales support staff and facilities, have to be amortized over fewer franchise sales. Unquestionably, the greatest single source of revenue for a franchisor should be and usually is the royalties received from franchisees. However, even in the best of franchise systems, some franchisees can’t or won’t always pay their royalties promptly. This must also be factored into the assessment of the cash flow of any franchisor. To do this though requires almost a clairvoyant ability in judging the relationship between the franchisor and his/her franchisees. The next best source of revenue for a franchisor comes from product distribution directly to the franchisees or the rebates and other benefits accruing to the franchisor for sourcing and securing third party suppliers for the system. It is not uncommon for a new franchisor to see only profit potential in the direct distribution of products to the franchisees and overlook the simple truth that a solid distribution network takes time and capital
to develop. On the rebate side, the hidden reality is that the suppliers will build the rebates into the prices being charged to the franchisees, who, in a soft economy, may simply not be able to absorb the extra costs, which makes that source of revenue uncertain for a franchisor. All too often these days, otherwise good franchise systems fail. Sometimes, the causes are beyond anyone’s control, but in many cases, a better understanding of the less obvious factors affecting the finances of the franchisor could have saved the situation. Without doubt, that understanding is a mandatory precondition for anyone dealing with a franchisor, whether they be franchisee, banker, supplier or lessor. Edward (Ned) Levitt is a senior partner of Aird & Berlis LLP, Toronto, Canada, and chair of its franchise law group. He served as General Counsel to Canadian Franchise Association from 2000 to 2007 and, as a member of the Ontario Franchise Sector Working Team, was instrumental in the creation of Ontario’s franchise legislation. Among his many publications is Canadian Franchise Legislation published by Butterworths/ Lexis Nexus. For More Information: Phone: 416-865-4628 Email: nlevitt@airdberlis.com
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f ra nchisor in depth
B oC oncept
Urban Danish Design Since
BoConcept offers franchisees proven track r
It all started with a handshake Back in 1952, when Danish cabinet makers Jens Aerthoej and Tage Molholm opened their furniture factory in Herning, Denmark, they surely had no idea just how well their business would take off. Danish design – whether it be furniture, kitchenware, or fabrics, has been wellknown and well-respected all around the world since the early 1950s. Over the
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years, their business expanded as they introduced new product lines. By the mid70s, their company’s furniture was being sold throughout Europe. Seeing a growing demand for their products – and an opportunity to brand the company on the international market – the company began the work of transitioning from a furniture manufacturer to a concept holder - becoming a franchisor. After years of planning, the first BoConcept brand store opened in Belle Epine, Paris in 1993, with seven more stores opening that same year in France, China, and the United States.
Today, there are more than 250 BoConcept stores, in over 58 countries around the world. The United States can boast 23 of those locations, with three new stores set to open this fall. With furniture and accessories for every room in the home, BoConcept still offers the comfort and simplicity of Danish design, while drawing inspiration from the cosmopolitan influences of the world’s largest urban centers. Carsten Pedersen, President of BoConcept USA, has been with the company since 1988. When the first pieces of BoConcept furniture were sold in the United States, he
1952
record of success
identify their needs to fulfill the dream of their dream home,” Pedersen explains. “After all, their home is their home, and they have to feel good in it.”
was the man who sold them. Franchising USA recently sat down with him to discuss what makes BoConcept stand out for its customers, its franchisees, and anyone looking to invest in a franchise of their own.
A Different Furniture-Shopping Experience When customers walk in to any BoConcept location, they’re greeted by well-trained, energetic staff, stylish showrooms, and a one-stop solution for all their furniture needs. “Our sales associates, together with the customer,
“We don’t do the sales pitch,” he continues, “because the best buy is a buy. It’s not a sell. When people are walking out of a store saying, ‘I just purchased this beautiful couch,’ then they’re happy about their purchase ...versus if they walk out and say, ‘oh, this guy just sold me a couch’. We set ourselves apart from the competition by not making those pressure sales. BoConcept gives customers the opportunity to have a great shopping experience.” In order to assist their customers visualize BoConcept in their home, as well as ensure all BoConcept staff are confident in their knowledge of the brand and it’s possibilities, the company founded ‘BoConcept University’ in 2004. The university offers franchisees and their sales associates the very best in training programs, ranging from Store Manager, Sales Associate, Visual Merchandising, InHome Consultations, seminars on how to create events, as well as seminars for new franchisees.
According to Pedersen, the University “trains our people in all aspects of our business, so they can explain the BoConcept brand, the modularity and functionality of our products, but more importantly, to make sure they are equipped to give our end-customers enough accurate information in order for them to make an intelligent buying decision.” Ultimately, it comes down to this: people buy from people they trust, and BoConcept instills that trust through open, honest, and well-informed conversation with their clients.
A Community of Experts, There for You That concept of informed, intelligent decision-making extends not only to BoConcept customers, but franchisees as well. When a potential BoConcept owner is looking into investing, “we give them the information on our business and explain our excellent business model,” says Pedersen, “however we also give them the contact information of all the other franchisees, so they can call and gather their experience.” When a potential franchisee makes a commitment to open a store, BoConcept has dedicated ‘Store Opening Teams’ to
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f ra nchisor in depth
h
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f ra nchisor in depth
B oC oncept
“With furniture and accessories for every room in the home, BoConcept still offers the comfort and simplicity of Danish design, while drawing inspiration from the cosmopolitan influences of the world’s largest urban centers.” assist the new franchisee from beginning to end, including help with store design, point-of-sale system training, showroom planning, visual merchandising, signage, and more. BoConcept’s fully-staffed U.S. headquarters also provides continuing support through Regional Account Managers, Logistics, Customer Service representatives and an in-house Marketing department. Beyond these supports, BoConcept also encourages the franchisees to network with one another through owner’s meetings and conventions, to share their key learning’s, and apply these on a day-to-day basis. One such gathering, the BoConcept Inspiration Camp (BiC) is held each year in Herning, Denmark, where the Company was founded. There, owners, store managers, sales associates and HQ staff share their expertise, as well as get their first look at next year’s product collection and marketing activities, including the yearly BoConcept Catalog. “I’m a firm believer that BoConcept can give [franchisees] enough accurate information to make a yes or no decision,” Pedersen says, “but I don’t want them to
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make a yes or no decision. I want them to get a yes or no experience from the other franchisees, because they’ll be the ones they connect with going forward...” “In my experience, it is our existing franchisees who make the final sale to new franchisees. Existing franchisees are also expanding their footprint in their territory by opening more stores, which shows that BoConcept has a successful business model, generating enough profit to open additional stores.”
Poised for Success, Ready for Expansion As an asset-light franchise with quick, positive cash flow and great return on investment, BoConcept offers a unique opportunity for the prospective franchisee with an outgoing personality, a strong work ethic, and an eye for design. As Pedersen explains, “We recognize that potential franchisees are, to a certain degree, entrepreneurs. The difference between a BoConcept franchise and opening an individual furniture business is that BoConcept has developed a
great concept and will give them all the toolboxes they need to be successful.” Indeed, BoConcept’s American franchisors are earning recognition for their successes worldwide. This year’s BiC saw the owner of the Scarsdale, New York location take home a ‘Franchisee of the Year’ award. “We’re very happy,” Pedersen beams, “[the franchisee] took an existing store and turned it around, increased same-store sales by 200 per cent, motivated the team...it was very well deserved.” With a 60-year track record of excellence in Design, BoConcept now looks to expand across the entire United States, to urban cities throughout the country. These urban centers, as Pedersen explains, are where the BoConcept brand is already known, and has the potential to thrive. People travel a great deal these days and we often hear things like ‘oh, I saw you in London,’ or ‘I saw you in Shanghai,’ or Tokyo or San Francisco. That global brand identity helps overcome barriers of who BoConcept is.” For information on BoConcept, franchising opportunities and more, visit www.boconcept.com. You can also contact Tina Pedersen at THP@BoConcept-usa.com or call her at 913 707 9470
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ex per t advice
Jack Eberenz, President, and Marcy J Maslov, Franchise Integration
T he D ilemma of
Buying A Franchise We’ve all been there: we have done our research and found several franchises we would be interested in buying. The salesman (I know, the Development Officer) has us all excited about the company and we jump in feet first to become a great franchisee. We start out great, excited this new opportunity is going to be completed finally! And then,
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somehow, everything starts going horribly wrong. The training is incomplete and we’re stuck with the mess. What happened and how did we get to this point? First of all, what are the issues? We could have anything from not delivering services promised or not completing the training, charging more than originally agreed, failing to meet deadlines, failing to communicate changes or communicate at all, charging for things we did not expect, and receiving rebates that were not disclosed. Or maybe we did not understand
how much time and commitment it takes to grow a successful business. How do we prevent these things from happening? We need to remember we are creating a business, not merely a job. We should view any franchisor we work with as a strategic partner who is a reflection of us and can affect our business image and reputation. It starts with us. So we need to ask a few questions of ourselves first. Do we have a clear picture of what our expectations are? Can we explain our expectations to the franchisor easily and
“We need to remember we are creating a business, not merely a job. We should view any franchisor we work with as a strategic partner who is a reflection of us and can affect our business image and reputation.” chances of success are greater (and our costs are lower) if we do a bit of extra legwork in the beginning. Not only should we look at what would go right, but we also need to put our emotions aside and think about what could go wrong. And we need to decide if we’re willing to accept both the good and the bad. Talk to friends, family, co-workers, accountants, an attorney, and every franchisee current or past – all these are great sources. But keep in mind we still need to do our research. Just because a family or good friend recommends something does not mean they are the best for your needs! We tend to let our guard down a bit if someone comes to us referred by someone we know. Referrals from our friends and family need to be checked out just the same as more independent sources.
clearly? Can we identify the qualities, skills, and ethical behavior that we want in a strategic partner? If not, this is our first step in the process. Define and identify our expectations and exactly what we want as clearly as possible. Next, we need to talk to several franchisors and compare their offerings. Just as large businesses require two or three bids for each project, so should we talk to two or three different companies and evaluate the information we gather. Yes, it takes more time up front, but our
Qualifying franchisors is the next step. Look up the company’s credit history on Dun and Bradstreet to see how they manage their own money and how well they pay others. Look at the company’s website to understand their specialties and offerings. Look the company up on LinkedIn, Facebook, or other social media sites, because the information they post on these sites is a good indicator of their ethical values, as well as how they think, act, and behave. (If there are questions about how to do this, just ask the kids! They’ll help us find just about anything if it’s online…!) On-line presence is just one facet of the franchisor, but it is also great to talk with several franchisors directly, and ask lots of questions. Body language (or nonverbal communication) can be up to 93% of our total communication. We can’t get a true
sense of a person’s ethical and professional character without looking them straight in the eye and watching how they react to our questions. Spend the extra money to look the owners or top management right in the eye. We want to talk with people who would be willing to share their direct experience, both good and bad, with the franchisor. In fact, we want to know those who are unhappy with the franchisor, because they’ll generally give us more insights into the company. In this face-to-face meeting step, we need to listen to our own body language. The last thing we want is to be excited about “Mr. (or Ms.) Franchise Heaven” who makes a lot of promises that sound great but are undeliverable. We need to ask tough questions, not just about what the franchisor is willing to do, but how they’ll deliver and how they have handled issues or challenges with other franchisees. Get specific. If we’re uncomfortable with any aspect of our meeting with the franchisor, walk away. There are other fish in the pond and it is easier to walk away at this point in the process. Price is not always the deciding factor in our decision – we could look at franchisee success rates, quality and other factors to help us make our choices. But ultimately, we do have to look at price and the franchisor’s legal agreement before making our selection. To ensure the best outcome, we should have our own business attorney review the agreement for us. Be sure we understand all the fine print before we sign on the dotted line. Take the time to understand exactly what we are paying for and when we’ll receive it as well as completely recognize our own obligations and commitments to deliver. And
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ex per t advice
Jack Eberenz, President, and Marcy J Maslov, Franchise Integration
ultimately, we need to determine if we can trust the franchisor to do their best to meet our expectations.
Marcy J Maslov earned her business and ethics stripes over 25 years working in Fortune 500 companies including Pepsi, Motorola, and 20th Century Fox. In 2003 Marcy started her coaching practice to bring Fortune 500 skills to small business and is celebrating her 10th year as an entrepreneur, business coach, and facilitator. Marcy also invented e-Factor!®, an educational business tool, to help provide a practice arena for discussing and resolving real-life business and ethics dilemmas in a fun, engaging and safe manner. She currently offers workshops on building trust, dollars and sense of business ethics, and accounting for non-accountants. Marcy holds an MBA from Duke University Fuqua School of Business, BS (Accountancy) from University of Illinois ChampaignUrbana and is a CPA registered in Illinois. For more information contact Marcy by email: Marcy@e-factorgame. com or website: www.e-factorgame.com.
experience as a General Manager, President, Chief Financial Officer, and Chairman of the Board in companies nationwide. Mr. Eberenz has been a key advisor to franchisors since 1981 drawing from his experience as a franchisee and President of a Franchisor. He holds board positions with regional, national and international franchisors. He holds a B.S Degree from the Syracuse University Whitman School of Management. Mr. Eberenz has very broad franchise experience and serves or has served on the board of several national or international franchisors including Realty Executives International, Precision Door Service and The Hat Club. As clients he has a number of emerging franchisors from ones that are currently organizing to retooling some that have hit a bump in the business road. As an outspoken advocate of franchisors maintaining their principles and vision throughout their business growth Mr. Eberenz has spoken to many groups on franchising and the principles based around “Perceived Value”. Other Board affiliations include the Board of Directors of Beatitudes Campus of Care, Merger/Acquisition Roundtable, Arizona Business Leadership, Valley Advisory Group and Business Advisory Services.
Jack Eberenz has over 40 years of leadership and executive experience. In a broad executive career he has
For More Information: Web: www.e-factorgame.com www.franway.com
So now we’ve come to that moment – the one in which we choose the winning franchisor. Finally, we’ve made our decision! Congratulations! The partnership relationship has just begun.
Franchising USA
Edward Levitt Jack Eberenz
Marcy J Maslov
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FRANCHISING USA is part of the global network of CBG Publishing
With 30 years experience in providing high quality business information, with a particularly strong focus on franchising, our global presence allows opportunity
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