Franchising USA - November 2014

Franchising usa T he ma g a z ine for franchisees

VOL 03, ISSUE 1, nov 2014

$5.95 www.franchisingusamagazine.com

Pizza Factory More Than A Franchise

the future of

franchising

M a i n F e at u r e

food franchising I t Pay s t o K n o w Y o u r

Franchise Agreement LATEST NEWS

FINANCIAL ADVICE FROM THE BANKS

TOP LAWYERS’ ADVICE

OPPORTUNITY IS KNOCKING! GET YOUR FOOT IN THE DOOR BEFORE IT CLOSES!

Join the fastest growing pizza chain in America!* Our footprint fits your space.

Non-traditional concepts available.

Visit LittleCaesars.com or call 800-553-5776 *Based on 2013 store growth. Š2014 LCE, Inc. 45494

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Franchising usa T he ma g a z ine for franchisees

FRANCHISING USA VOLUME 3, ISSUE 1, nov 2014 president: Colin Bradbury. colin@cgbpublishing.com

Publisher: Vikki Bradbury. vikki@cgbpublishing.com

Editorial Department: editor@cgbpublishing.com

Editorial team: Rob Swystun Stephen Kelly Gina Gill

Advertising Sales:

from the

Publisher “One of the very nicest things about life is the way we must regularly stop whatever it is we are doing and devote our attention to eating.”

advertising@cgbpublishing.com

Luciano Pavarotti

Production: Samantha Klimecki. usaproduction@cgbpublishing.com

DESIGN: Jejak Graphics. jejak@bigpond.com

COVER IMAGE: pizza factory Mary Jane Riva

CGB PUBLISHING 676 Wain Rd. Sidney, BC V8L 5M5 CANADA Sales: 778 426 2446 Editorial: 778 426 2446 www.franchisingusamagazine.com Proud member of the IFA:

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

Food, Glorious Food!

Where would we be without it?

In this month’s feature article, Rob Swystun gives us some great tips on searching for the perfect food franchise to satisfy your hunger to own your own business. With so many choices from Fast Food and Donuts to Ice-cream and Juice Bars, and even Vending Machines, Convenience Stores and Food Gifting, the opportunities seem endless.

And with people now more conscious than ever before of good food and healthy eating even more options are sure to develop in the future.

One very successful food franchise is Pizza Factory – our Cover Story this issue. Read the story of Mary Jane Riva’s journey from franchisee to franchisor.

If, like Mary Jane, you are considering a change from franchisee to franchisor, Kevin Lathrop shares some tips on

making the move and Andy Roe tells us what we can learn from the daily routines of geniuses.

For those just starting out on their franchise journey, we have some fantastic articles for you this issue. Dr John Hayes looks at the question of Is Franchising for You? and Sam Hodges tells How a P2P Loan Can Help Grow Your Franchise.

Our Veterans Supplement this month is jam packed (yes – food again!) with helpful advice for Veterans considering their franchise options including an inspiring story from Joshua Brasure, a Marine Corp Veteran who took the leap into civilian life and now enjoys life as a GameTruck franchisee.

I hope you enjoy this month’s read. I look forward to sharing more great stories with you in our December Christmas issue. In the meantime…..

Bon Appetit!

Vikki Bradbury Publisher

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

Franchising USA

november 2014

On the Cover 24 The Future of Franchising

Pizza Factory

20 It Pays to Know Your Franchise Agreement

Scott Ratchick & Scott Augustine, Chamberlain Hrdlicka

56

Christopher Conner, Franchise Marketing Systems

26 Feature Article

Food Franchising

68

10 Cover Story

12 In Every Issue

06 Franchising News Announcements from the Industry

26 Feature Article

Food Franchising 35 Veterans Supplement

News and Information for Veterans in Franchising

Franchisee in Action 16 WOW 1 DAY PAINTING

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16

f ra nchising usa

Contents

f ra nchising usa

12 Geniuses. What You Can Learn From

Their Daily Routines Andy Roe, SurePayroll

44

Expert Advice

14 Creating a Successful Mobile Strategy

for Your Franchise Adam Heitzman, HigherVisibility

20 It Pays to Know Your Franchise Agreement Scott M. Ratchick & Scott A. Augustine, Chamberlain Hrdlicka

30 Is Franchising for You? Dr. John P. Hayes, Author and Franchise Coach

56 Tips for Franchisees Considering a Move to

the Executive Level Kevin Lathrop, Unishippers Global Logistics

22

24 The Future of Franchising Christopher Conner, Franchise Marketing Systems

58 Food Fight and the Franchise System Harold L. Kestenbaum, HLK P.C Law Firm

64 Dispelling Current Myths in Franchise Funding Eric Schechterman, Benetrends

66 Fall is the Perfect Time for Your Business Goals to Rise George Knauf, FranChoice

Focus 22 Dental Fix RX 60 The Interface Financial Group

66

68 How a P2P Loan Can Help Grow Your Franchise Sam Hodges, Funding Circle

62 GameTruck

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what’s new!

Smoothie King Introduces New Vegan Options Smoothie King Franchises, Inc., the leading smoothie franchise company with 700 stores worldwide, has introduced two new Vegan Smoothies, Powered by Sunwarrior.

The new menu items are blended with 100 percent pure Sunwarrior raw plant-based protein and other nutritious ingredients like superfoods acai and kale and antioxidant-rich mango.

Two Vegan Smoothies Naturally Powered

by Sunwarrior have been added to the Smoothie King menu for this initial rollout: • Mango Kale Smoothie: A flavorful blend of Sunwarrior Warrior Blend raw plant-based protein, mango juice blend, banana, kale, apple juice and almond, this antioxidant-rich smoothie is vegan

wholesomeness at its finest.

• Dark Chocolate Banana Smoothie: 100 percent cocoa, bananas, acai and Sunwarrior Warrior Blend raw plantbased protein fill the cup to make this smoothie both delicious and nutritious.

Smoothie King’s New Vegan Smoothies Powered by Sunwarrior are all under 350 calories (20 oz. serving), have no saturated fats, aid in healthy digestion, are lactosefree, gluten-free, and are rich in Vitamin A and C. They provide up to 11g of musclebuilding, fat-burning plant-based protein and are rich in antioxidants, minerals, enzymes and phytonutrients.

To find out more about Vegan Smoothies or see the full menu of offerings from Smoothie King, visit www.SmoothieKing.com

Just Better Care Interim HealthCare Inc., recently expanded its global footprint by adding Just Better Care, well-known Australian franchisor of in-home non-medical and medical care services based in Manly, New South Wales.

The September announcement follows the company’s initial international expansion in 2013 with UK-based Bluebird Care Franchises Limited.

Just Better Care was founded in 2006 and has one corporate operation and approximately 30 independently owned and franchise operations in major cities in Australia including Perth, Adelaide, Melbourne, Brisbane and Sydney.

Interim HealthCare, a leading national network of home care, hospice and health staffing franchises founded in 1966 and known for its continuum of care in the

Franchising USA

United States, is unique in combining the commitment of local ownership with the support of a national organization that develops innovative programs and quality standards that improve the delivery of service. Franchisees employ nurses, therapists, aides, companions and other healthcare professionals who provide 25 million hours of home care service to 190,000 people each year, The addition of Just Better Care positions the Interim HealthCare family of brands globally for success with more than 530 franchise locations in seven countries, collectively representing nearly $900 million in combined network sales.

Interim HealthCare, Bluebird Care and now Just Better Care are part of Caring Brands International.

For more information visit: www.interimhealthcare.com

GODDARD SYSTEMS, INC. REPORTS STRONG RESULTS IN FIRST HALF OF 2014 follows a new policy statement by the American Academy of Pediatrics (AAP), noting the importance of reading and literacy beginning in infancy. The research shows children who read to have stronger language skills, literacy development and parentchild relationships–cornerstones of The Goddard School brand’s playful learning curriculum.

“Increases in the number of working mothers and the desire to provide children with early educational opportunities has increased the demand for early childhood education,” said Joseph Schumacher, chief executive officer, GSI. “We credit our continued success to strong franchisees committed to our curriculum’s research-driven approach, including strong reading basics and a play-based approach that develop lifelong learners. “

Additionally, 16 schools are under construction in 10 states.

GSI launched 2014 with a targeted franchise development strategy focused on eight markets including Boston, Houston, Minneapolis, Seattle, Portland, Philadelphia, Hartford, and New York City (Manhattan). The company is seeking qualified franchisees with a minimum net worth of $450,000, including $150,000 in liquid assets. No education experience is necessary.

This momentum is part of GSI’s expansion plan nationwide and

For more information visit: www.goddardschool.com

Finishing a strong first half of 2014, Goddard Systems, Inc. (GSI), the franchisor of The Goddard School® preschool system, awarded 18 new franchise agreements to qualified franchisees and opened nine schools in seven states.

GAME ON: Mobile Gaming Revolution Launches National Expansion Plans With two franchises and one companyowned location already amping up parties throughout Tampa and Seattle, Mobile Gaming Revolution recently announced plans to expand its national footprint via franchising over the next several years. Company executives plan to open three to five new locations by the end of 2014 and have as many as 20 total locations by the end of 2015.

The self-contained video gaming utopias come complete with today’s hottest consoles – including fully networked XBOX Ones, Playstation4s and multiplayer ready Wii systems – all in a fully equipped, temperature controlled mobile video gaming theater. From Mario to Just Dance 4, games are played on high definition flat screen TVs, all while nestling your rump in the comfiest seating around. Mobile Gaming Revolution also offers Laser Tag and Bumper Balls to take any event to the next level.

“From broader audiences to the death of arcades, the face of gaming has seen enormous change. In barely more than a generation, video games have transformed from a diversion for the few into a favorite pastime enjoyed by men and women of all ages, and millions worldwide who share their game play experiences with

friends and family,” said founder Lee Bekhor. “We’ve driven the evolution of games into new territory with a gamer’s paradise on wheels that is sure to provide an unforgettable experience for all of our guests.”

For more information, visit www.mgrparty.com

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what’s new!

Step Aside Cupcakes and Frozen Yogurt!

An evolved version of the nostalgic ice cream sandwich is about to take center stage as the nation’s new No. 1 favorite dessert treat. Leading the comeback is CREAM, a San Francisco-based dessert franchise that specializes in high quality ice cream sandwiches and other confections.

With six franchises and two company-owned locations currently open and operating in the San Francisco Bay Area, CREAM recently announced plans to expand its empire. Company executives have already inked franchise deals for more than 25 new locations, including the chain’s first southern California store on the University of Southern California campus, and a locale in Las Vegas.

The plan is to have 50 franchises operating by the end of 2015 and open 100 new franchise units annually starting in 2016 and beyond.

CREAM, which is an acronym for “Cookies Rule Everything Around Me,” offers a menu of 20 ice cream flavors and 20 cookie flavors and as many as 24 toppings that customers can mix and match, as well as vegan and gluten-free options. While the ice cream sandwiches are the main draw, CREAM also has milkshakes, floats, malts, scoops of ice cream and other baked goods, such as “The Cream Taco,” a taco shell shaped waffle cone.

For more information visit: www.creamnation.com

New Remodeling Software Provides Boost for DreamMaker Franchise Owners The DreamMaker Bath & Kitchen remodeling franchise has just unveiled new remodeling software to help its franchise operators serve clients from the moment they become potential clients, through the design process, all the way through installation and billing.

“This is a major advance for DreamMaker,” President Doug Dwyer said. “It will help streamline customer service, sales and operations in ways that will save our franchisees a lot of time, helping them grow their businesses.”

The software keeps track of potential clients, which makes marketing more

Franchising USA

efficient. It also helps sales teams create price estimates by tapping into a special pricing database, which allows even newcomers to the remodeling industry to forecast the scope of a project’s workload.

Moreover, it helps track ordering, simplifies scheduling, includes a unique lead carpenter compensation system and provides time-tested management reports.

Demand for remodeling has surged since 2012. DreamMaker’s average franchise revenue increased more than 23 percent in 2013.

A prototype was developed by Lee Willwerth, a former software engineer, and Bob Ender, a former auto industry

executive, who together own the DreamMaker franchise in Ann Arbor, Michigan. They further developed it as other franchisees made suggestions.

“The result is like our system on steroids,” Willwerth said.

Learn more by visiting www.dreammakerfranchise.com

TOGO’S ANNOUNCES ACQUISITION OF 13 RESTAURANTS FROM COMPANY FOUNDER and CEO of Togo’s Holdings, LLC. “Togo’s newly acquired restaurants will provide a larger platform for testing new products and operating systems.

The locations will also offer additional resources to support training for new franchisees, management and crew for future grand openings.”

long-term growth strategy and reflects our

Togo’s, which has more than 320 restaurants open and under development throughout the West, has experienced four consecutive years of same-store sales increases. Last year, the company launched a multi-unit franchise development incentive program to drive expansion in key growth markets. Both new and existing franchisees who sign a new agreement for three or more locations will receive reduced royalty fees for the first two years for each new restaurant that is developed in Washington, Oregon, Idaho, Utah, Colorado, Nevada and Arizona.

excellence,” said Tony Gioia, chairman

For more information visit: www.togosfranchise.com

Togo’s Eateries, Inc., a “West Coast

brings Togo’s company-owned

Original” since 1971, announced today

restaurants to 19 units in California.

it has completed the acquisition of 13

“This recent acquisition is part of our

franchised restaurants in the East Bay and San Jose areas from company founder Mike Cobler. The acquisition

company’s commitment to operational

Adlib Group Rebranded to Tag Franchise After joining forces with tag in 2012, the team has become increasingly involved and part of the agency’s collective culture.

In 2013, President Patti Laine made the strategic decision to move the team to tag’s main office.

Leading Toronto based franchise marketing agency, the adlib group, has officially rebranded to tag franchise, displaying their collective strength and category expertise under the tag network of agencies, comprising of tag, tag enterprise, tag media and tag photography.

“We have really flourished over the past few years carving out a niche for ourselves in the franchise marketing industry. With the integration of tag’s expertise an arms length away, we are seeing the types of campaigns we produce grow and evolve,” says Patti Laine, President of tag franchise.

“It is the right time to make a change to reflect the agency that we truly are today.

Wholly integrated. Franchise focused.”

tag franchise has proven through their award-winning campaigns and outstanding client relationships, that they have experience in transforming franchise brands and managing results-based communications. Working with clients including Mary Brown’s, MR.SUB, Extreme Pita, Master Mechanic and Just Falafel through their proprietary elevation platform, the agency is able to identify and satisfy the multi-layered needs of franchise systems as well as ensure the brand structure is in place, so consistency flows throughout the operation.

For more information visit: www.tagfranchise.ca

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cov er sto ry by Gina Gill

Piz za Factor y

Pizza Factory More Than a Franchise

Mary Jane Riva has always been a hard worker. She bought her own donut shop when she was just twenty years old. While most people were out picking up hours at random part-time gigs, she was an entrepreneur.

After three years, she moved on from the donut business and worked in an office with an architectural landscaping firm and eventually became a franchisee with Pizza Factory in 1989. Mary Jane bought the founder out in 2012 and is now the franchisor for the company.

“I had five stores in the Southern California area over that time period and I was on the marketing team. The guys approached my husband and I in 2012 about buying the company. As silly as we were, we said, sure why not?” recalled Mary Jane.

Pizza Factory has been in business for over thirty years and started franchising

Franchising USA

in 1985. The company currently has 110 locations that range from 1200 square feet to 5000 square feet. Territories are located in Washington, Idaho, Nevada, Arizona and California. Locations are being built in Oregon and the company is looking to extend into Montana and Canada.

The company remains consistent and true to the brand using the same ingredients since the beginning, with one hundred percent real mozzarella and a signature sauce.

“Our main product is pizza, we also have pastas and sandwiches, and we sell beer and wine. We still have the same concept that we have had forever. We hand toss our dough and we make everything on the premises. Our product is a little higher quality than the other pizzerias that you see out there,” explained Mary Jane.

There is a constant need for pizza in American culture. Ninety-three percent of Americans eat at least one pizza per month because it is affordable, convenient and reliable.

Pizza Factory is not a typical restaurant but the neighborhood’s hometown pizzeria.

Actually, Pizza Factory is more than a pizzeria, it’s a home away from home with familiar faces where family and friends gather for an experience. Known for tossing the dough in the air and creating a community connection, Pizza Factory is the local place that has more of a restaurant friendly feel than regular pizza joints. Pizza industries are more focused on deliveries, sometimes being small spaces with just a counter, while Pizza Factory offers an inviting place that is a community staple.

“We focus on being the hometown pizzeria and we get really involved in schools and the sports teams. The owners usually become connected with the community,” said Mary Jane. “We have a No Bully program that we take to the schools - it’s free. We participate in things to get engaged (with the community). Our demographic is mostly young families with kids and we try to stay involved with the community at that level.”

This is what truly sets Pizza Factory apart, most of the franchisees are owneroperators who become a part of their community and give back in a variety of

“Known for tossing the dough in the air and creating a community connection, Pizza Factory is the local place that has more of a restaurant friendly feel than regular pizza joints.” ways. The No Bully Program focuses on schools by educating the public about the issues at hand and allows victims to be aware of their resources.

Customers can easily schedule a fundraising event with owners and managers without complication. The walls of the pizzeria are usually covered in little league jerseys and it’s the place the winning team comes to celebrate a victory.

Owner-operators are not required but passion is definitely a necessity. People who are passionate about their community and their work and enthusiastic about giving back and creating a name within their location are ideal candidates as franchisees. Owners should be hard workers who enjoy working with a team.

Franchisees are consistently supported from the moment they sign on and throughout the entire operation. There is a training facility that is available to owners after they have opened. It is a free option, which managers can access for extra

training, or franchisees can revisit for a refresher. For the core products, there is a yearly conference for the franchisees.

The company is about to introduce an educational portal through which franchisees can access information with just the click of a button. There are different categories, for example; marketing, maintenance of equipment and how-to’s.

It will be a tool that will continue to educate and more experienced owner operators while also be answering any questions that any of the franchisees have.

“They don’t have to seek the information - we will provide it to them beforehand,” said Mary Jane.

For a really fresh slice of pizza and a truly memorable experience, Pizza Factory is more than a franchise, but rather a business that is part of the community.

For more information visit: www.pizzafactory.com

Franchising USA

cov er sto ry by Gina Gill

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ex per t advice

Andy Roe, General Manager, SurePayroll

eG niuses

What You Can Learn from their Daily Routines They are just like us.

Artistic geniuses, that is. They don’t produce their masterpieces out of thin air or while they’re dreaming.

No, even artistic geniuses are quite disciplined in ways that might surprise franchise owners looking for inspiration.

While you may lack some of the eccentricities – and this is likely a good thing – of some well-known genius types, when it comes down to productivity, they

take a very practical approach.

That’s the conclusion of author Mason Curry’s recent book: Daily Rituals: How Artists Work, as analyzed by Harvard Business Review’s Sarah Green. Curry examined the historic schedules of more than 150 painters, writers, composers and other exceptional thinkers.

In four key ways, these geniuses of years past used techniques to keep their work on track that we can all relate to:

No distractions Writing software comes equipped these days with full screen modes to minimize the background distractions so an author can focus on their work. To those who think this is a new concept, guess again.

As Green points out, William Faulkner and Mark Twain devised strategies to prevent anyone from disturbing them in their offices and Graham Greene rented a secret room that only his wife knew about. Even back then, they understood the concept of avoiding distractions to encourage focus.

Exercise

Andy Roe

Franchising USA

Another cottage industry — fitness tracking software, has at its core the realization that fresh air and exertion contributes to greater productivity. Again, the geniuses of the past were well aware of this. Green notes that Curry’s book

includes the stories of Charles Dickens and Tchaikovsky, both who regularly took long walks to invigorate them. Beethoven did the same and took a pencil and paper along in case he was inspired along the way.

Strict record keeping It might surprise franchise owners to know that famous authors and artists were among those who methodically kept track of their productivity because they knew without the discipline, their work might languish. In business schools, they talk incessantly about “metrics.” For Ernest Hemingway, it meant keeping a chart with daily word counts so he could stay on course. BF Skinner did the same and also set a timer.

Sleep Most research will tell you a full night’s rest (seven to eight hours) is important for concentration and overall health. For most business owners, sleeping from about 10 p.m. until 5 or 6 a.m. is probably not uncommon. While it may feel like a grind from time to time, remember you’re in good company with the likes of Benjamin Franklin, Beethoven, Maya Angelou and Victor Hugo. The F. Scott Fitzgerald sleep schedule of 3:30 a.m.-11 a.m., you can imagine, would probably be bad for business.

“Behind the image of a genius beats the heart and mind of a time management nerd who understands that only discipline can harness human tendencies to procrastinate.”

What does this all mean for franchise owners intent on squeezing every last bit of productivity out of their daily routines? It tells us that behind the image of a genius beats the heart and mind of a time management nerd who understands that only discipline can harness human tendencies to procrastinate.

Andy Roe is the General Manager of SurePayroll, Inc., a Paychex Company.

SurePayroll is the trusted provider of easy online payroll services to small businesses nationwide.

Even if you aren’t a genius, it is possible to improve your routine and your bottom line.

SurePayroll compiles data from small businesses nationwide through its Small Business Scorecard optimism survey,

and exclusively reflects the trends affecting the nation’s “micro businesses” — those with1-10 employees. You can follow Andy on Twitter @AndrewSRoe. For more information visit: www.surepayroll.com

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ex per t advice

Adam Heitzman, Co-Founder and Managing Partner, HigherVisibility

Cre ating a

Successful Mobile Strategy for Your Fr anchise

By now it’s no secret that mobile marketing and a mobile presence is crucial for any business, and this includes franchises. This means that you need to make sure you know how to deal with mobile customers and are taking full advantage of the benefits mobile marketing can offer.

Unfortunately, this can get a little bit tricky if you own a franchise. You want to make sure you have mobile campaigns, web designs, and marketing for all of your locations, so you need to be organized and have a solid strategy in place with your marketing team. Whether you’re working at the national level or are managing just one branch, a mobile marketing plan is going to take some time to put into place.

How to Create a Mobile Strategy to Benefit Your Franchise Mobile marketing is a great way to offer real-time information and build strong relationships with your customers, but a one-size-fits-all approach isn’t going to work. Consider some of the following tips to getting started on the right foot: 1. Create mobile responsive websites This is something that goes for all

Franchising USA

companies, not just franchises. You need to make sure you have either a responsive website or a website created specifically for the mobile screen. For those who are unfamiliar, a responsive design will allow your website to adjust to the smaller screen by putting large images or ads on the bottom with important content on top. It eliminates the need for scrolling horizontally to read text, so it’s easy to read and click through for mobile users. You can learn more about responsive websites at www. highervisibility.com/building-a-mobilefriendly-website-that-will-rank.

In terms of franchise considerations, you probably know by now whether you have a single website with a location finder or websites for each location.

In either case, this will affect your responsive design. If you have a single website with a location finder, you will have additional webpages for mobile viewers for each location, so you need to make sure these are all responsive.

2. Create discount offers and other relevant content for each location Taking advantage of mobile means creating offers and CTAs (calls to action) that are relevant to users in a particular location. Because mobile marketing is all about consumers shopping or researching on the go, location is going to be incredibly important. In other words, your content strategy should keep the tone of your national brand while offering specific content to those locally. This means creating discount coupons and offers, loyalty programs, and easy “click here”

buttons that cater to those who are in your area.

3. Segment your email marketing or SMS messages Going along with the last point, you should be segmenting your email marketing campaigns and SMS goals by location. More and more people are reading their emails on the go, so you want to make sure that your content is catering to that fact. For example, you should drive readers back to a mobile optimized webpage (which should be automatic if you’re using a responsive design). According to Exact Target, 37 percent of business people read their emails from their mobile devices.

4. Submit your site to directories and leverage mobile tools for searching When thinking about mobile, you don’t just want to think about the people who are reading your website or your email messages—you want to also think about those searching for your business. You need to create a mobile search strategy so that people who are searching on their phones can find your website easily, and believe it or not simply optimizing for Google isn’t your only option.

Jeremy LaDuque, co-founder and CEO of franchise marketing tools company Elements, explained that there are three big ways a franchise can improve their mobile search strategy: • PPC mobile search. According to iMedia Connection, mobile ads perform four to five times better than online ads.

Use ads that make it easy to Call Now with a quick touch of a button, or have other CTAs that cater toward actions on a mobile phone.

• Proximity mobile search. This means that all of your franchise locations need to be correct online, but also submitted to directories such Google Places so that people can find your location when they are near. This will also ensure that your business pops up when someone is nearby and searches something related.

“Mobile marketing is a great way to offer real-time information and build strong relationships with your customers.”

• Hands-free mobile search. Submit your blog to Siri in case people are using a hands-free option on their phones.

Once again, it’s important that your website is mobile optimized and your content is ready to go before you begin with a mobile search strategy. After all, if people do find your website and click, it isn’t going to mean much if they can’t read anything because your site is full of ads or difficult to navigate.

The Takeaway Of course, there is a lot more to a mobile strategy that you can get creative with, but the above points are particularly important for franchise businesses (and things often missed).

There is a great article at www. convinceandconvert.com/mobile/a-stepby-step-guide-to-setting-up-a-mobilemarketing-campaign.

In the end, creating a mobile strategy is actually more time consuming than it is expensive. Laying out all of your different initiatives, who will be in charge, and what content you’re going to create is going to take a good amount of time not only to put in place, but also to manage. While tools and some campaigns may cost a little bit of money, the return is much greater.

Adam Heitzman is the Co-Founder and Managing Partner at HigherVisiblity, a nationally recognized SEO firm that offers a full range of Internet marketing services.

For more information visit: www.highervisiblity.com

Adam Heitzman

Franchising USA

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fr a nch isee i n act i o n by Rob S w ystu n

WOW 1 DAY PA INTING

From Employee to Franchisee San Jose WOW 1 day painting Owner’s Seamless Transition “We’re at the point now where we’ve got a really smooth system.”

When the entire culture of a franchise system is based on a great customer service experience, it’s easy for someone who holds the same values to fit right in and carry on with that tradition.

WOW 1 DAY PAINTING franchisee Gary Rosyski is one such person who believes the customer service experience should always be exceptional.

Gary Rosyski

Franchising USA

Rosyski owns a WOW franchise in San Jose, CA, along with his business partner, Bronic Gold, who happens to also be his former boss at his old job as an operations manager in Silicon Valley for 1-800-GOTJUNK?, where he oversaw two franchises for five years and then another two for two years.

“The customer service experience should always be exceptional.”

Being involved with 1-800-GOT-JUNK? is how he heard about WOW 1 DAY PAINTING, as the two franchises belong to the same parent company.

He and Gold purchased their franchise in May of 2011 and were operational in January 2012. Prior to that, the two had talked for a long time about going into business together and when the WOW opportunity popped up, they jumped at it.

For Rosyski, his desire to start a franchise goes back to his days when he lived in Toronto, where he’s originally from. He ran a small retail store there and enjoyed

working for himself. When he moved to San Jose to start with 1-800-GOT-JUNK? and experienced the company’s corporate culture, he knew he eventually wanted to get his own franchise. And, when he found a willing business partner in Gold, everything was set and as early as 2008, Rosyski was looking for a franchise opportunity that he could succeed with.

The two transitioned easily into WOW 1 DAY PAINTING owners, as they already knew exactly what territory they wanted to be in and already had contacts set up thanks to their time spent with 1-800-

GOT-JUNK?. In fact, their office is located in the same building that holds two 1-800GOT-JUNK? franchises and two You Move Me franchises, which is also part of the same family of companies.

“The site selection was easy,” Rosyski said during a recent interview from his San Jose office. “We had our territory carved out based on existing 1-800-GOT-JUNK? territory. We knew we wanted to be in Santa Clara County.”

And while the two business partners had a bit of a head start thanks to their time with the parent company, the franchise does its

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WOW 1 DAY PA INTING

best to ensure starting up is easy for all of its franchisees, Rosyski said, by mapping everything out and giving new franchisees a timetable to follow for what they need to get done.

“It’s a really simple process to follow,” he explained.

The two flew out to Vancouver for a week’s worth of training in everything from paint job estimating to marketing operations and using the company’s one web system. When they came home, they were left with practice material for estimating. Plus, shortly after they opened, they also had in-field training.

Being open for over two years now, Rosyski has the system down and doesn’t so much need the technical training, but it’s always available to him, he noted.

At the moment, he’s concentrating on growing the business, increasing his marketing efforts and deciding where to invest money in the business. The company is helping him and Gold work more efficiently, plan an effective budget and forecast their needs for the coming

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“Being open for over two years now, Rosyski has the system down and doesn’t so much need the technical training, but it’s always available to him.” year. Rosyski currently has bi-weekly calls with their director of field operations to make sure they’re hitting goals and staying on track with the business.

As with all startups, getting their WOW 1 DAY PAINTING franchise going was a lot of hard work, but things have settled into a groove now and Rosyski’s work/life balance is tipping back toward more life and less work.

“We’re at the point now where we’ve got a really smooth system,” he said.

Right now the franchise has eight employees on staff and hiring the right staff is one of the two big things that Rosyski said is part of running a successful franchise.

The other big thing is to set a healthy

marketing budget to get those phones ringing, he noted.

For someone like Rosyski who is dedicated to giving customers a top-notch experience, WOW 1 DAY PAINTING was an obvious choice, as he already fit right in with the corporate culture of the company.

For more information visit: www.wow1day.com

Page 19

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ex per t advice

Scott M. Ratchick & Scott A. Augustine, Attorneys, Chamberlain Hrdlicka

It Pays to Know Your Franchise Agreement “Give careful thought to your longer term business plan and then negotiate for the maximum purchase price or profit multiple.”

Royalties and other fees should be tied to certain revenue sources, which are, if possible, narrowly defined. For example, royalty payments and other fees are often based on a percentage of overall sales.

Clearly define “net sales” or “gross sales,” and understand what sources of revenue are included in – or excluded from – “sales.”

When starting a franchised business, you are no doubt ready to invest personal capital and sweat equity on the road to success, but you also likely have faith in yourself and your new franchisor, or “business partner.”

While focusing on the nuts and bolts of the products or services your business will offer, also pay close attention to the franchise agreement to ensure a smoother

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ride and harmonious relationship with your franchisor.

Here are five critical legal issues for franchisees to consider when negotiating the terms of a new or renewed franchise agreement. A franchisor’s willingness to negotiate varies, but be sure to keep a close eye on these issues.

Defined Terms Related to Royalties and Other Fees These terms can be vague or overly broad, leaving an opening for the franchisor to charge additional fees in the future – fees not contemplated when the agreement was executed. This is particularly relevant when franchise business models and sources of revenue mature and change over time.

Pay close attention to the Franchise Disclosure Document and whether other franchisees pay different royalties or other fees. Try to determine whether your proposed agreement contains the same terms as other franchisees.

Some franchisors negotiate to attract or retain certain franchisees, which can be beneficial for the franchisees who successfully negotiate, but a problem for those who don’t and are forced to bear the burden of the franchisor trying to recoup what was negotiated away.

Personal Guarantees Does the franchise agreement require a personal guarantee from the franchisee’s principal, and if so, for what debts and liabilities? Establishing a corporate structure like a corporation or a limited liability company to operate a franchise

will not shield you from personal liability if you sign a personal guarantee.

Importantly, you can remain personally liable under a guarantee long after you sell or quit the business.

Your ability to negotiate the application and scope of a personal guarantee may differ depending on whether you are a single-unit or a multi-unit franchisee.

Consider asking the franchisor to limit the duration of personal guarantees so they expire after a number of years of ongoing operation in good standing.

Also, if you are a multi-unit franchisee, consider asking the franchisor to waive or release personal guarantees based on the strength of your company’s balance sheet.

Integration or Merger Clauses Get everything in writing and be leery when the franchisor says, “Don’t worry about...” or “We can deal with that later.”

Most franchise agreements include provisions stating that only the written terms of the agreement will be binding, and that nothing previously discussed or promised will be enforced unless expressly contained in the franchise agreement.

To protect yourself in the event of a later dispute, take notes immediately after conversations you have with the franchisor during “Discovery Day,” or in meetings and phone calls leading up to signing the franchise agreement, and communicate your understanding of the agreed upon terms in writing to the franchisor. Your written communications and notes of conversations with the franchisor can have a significant impact if a dispute arises with regard to the meaning or application of a term in the franchise agreement.

Rights of First Refusal and Other Conditions for Sale or Assignment You may be required to offer to sell your franchise to the franchisor before you can freely sell it to someone else. This

Scott M. Ratchick

Scott A. Augustine

“Get everything in writing and be leery when the franchisor says, “Don’t worry about...” or “We can deal with that later.” obligation may make your business less appealing to a third-party buyer and less valuable. For example, a third-party buyer may have to wait for the franchisor’s right of first refusal period to expire, or execute a new franchise agreement that includes less favorable terms than your franchise agreement.

Consider negotiating the unrestricted right to sell to another existing franchisee, or to a member of your existing ownership group, or to a family member. Maintaining maximum flexibility is key.

Franchisor’s Right to Purchase Your franchise agreement may allow the franchisor to purchase your franchise at a time in the future for some stated price, or based upon a multiple of your profits or another formula. Therefore, you may succeed in building a great business only to be faced with having to “give it away” to your franchisor for less than it’s worth.

Give careful thought to your longer term business plan and then negotiate for the maximum purchase price or profit multiple, as well as a long period of

time before the right to purchase can be exercised.

It is important to pay attention to these issues on the front end of the franchise relationship to help ensure success down the road. There is no need to go it alone: consult with legal and financial professionals who have experience with these issues and franchise relationships.

Scott M. Ratchick and Scott A. Augustine are attorneys with Chamberlain, Hrdlicka, White, Williams & Aughtry. Ratchick is a commercial trial attorney and represents franchisees in disputes with franchisors, landlords and employees. Augustine is a business attorney and represents franchisees in franchise agreements, purchase agreements, finance agreements and real estate matters.

They may be reached at (404) 659-1410 or by email at scott.ratchick@chamberlainlaw.com and scott.augustine@chamberlainlaw.com.

For more information visit: www.chamberlainlaw.com

Franchising USA

ex per t advice

Page 21

Focus by Gina Gill

Dental Fi x R X

Dental Fix RX The Faster Fix

Every so often, a business opportunity is presented that offers a completely unique concept that puts its franchisees and customers as the first priority.

Dental Fix RX is that business opportunity with a fast growing franchise model and a different approach to dental equipment repair and service. While most dentists have to wait weeks or even months to get their tools repaired by other specialists, Dental Fix offers immediate, same day service by repairing equipment onsite from their state-of-the-art mobile repair vans.

“Our Dental Fix owners live in or near their territory so they can get to a dentist office within 48 minutes instead of 48 hours,” said Scott Mortier, vice president of business development for Dental Fix. “Our turnaround time is one of the main factors that separate us from the competition and we don’t charge hidden fees to customers. Our competitors often charge for estimates, loaner equipment, and fuel or destination charges while at Dental Fix, our philosophy focuses on providing customers the best service available without additional fees.”

While the competition generates revenue from dental equipment sales, Dental Fix’s revenue comes from repair. The company’s focus is on fixing immediate problems and creating relationships with local dentists. When equipment breaks, a dentist is often placed in a time of urgent need with patients in their waiting room and no way to continue work. Dental Fix services remedy this problem by offering loaner tools to help the dentist maintain productivity at the same time their equipment is being repaired onsite.

With roughly 170,000 dental and dental specialist jobs in the U.S., the need for dental repair is constant and continues to grow. Dental jobs are projected to

Franchising USA

grow nine percent by 2016 and as the industry continues to expand, so do the new technologies that allow dentists to maintain and improve their work flow.

With Dental Fix’s commitment to customer service and providing immediate, onsite service, it’s evident that the Dental Fix brand is strong. Many entrepreneurs are taking advantage of Dental Fix’s unique franchise opportunities.

Established in 2009, Dental Fix has more than 150 franchise locations throughout North America. The unique business model is designed around the success of franchisees, as Dental Fix provides a dedicated account management team to offer each franchise owner everything they need to make their business successful.

From marketing and sales support to year-round repair training, Dental Fix is focused on making their franchisees a success.

“We often sell out of franchise territories,” said Mortier. “Dental Fix guarantees franchise owners a minimum of 40 customers in their first year of business, or we’ll refund the entire franchise fee. To support a franchisee, we handle all of their marketing. We call, direct mail, email, and fax dentist monthly in every market of the country on behalf of our franchise owners as. We also set up their appointments and coordinate the related schedules.”

Dental Fix provides an extensive 42day training program with three weeks in a classroom setting at Dental Fix’s headquarters in Fort Lauderdale, Florida.

“There is only one other organization that teaches dental repair in a classroom setting and that is the military,” said Mortier. “Our director of training, Matt Lau, has taken his experience of teaching in the military for nearly 20 years, and has designed a comprehensive program that includes classroom and on-the-road

“With Dental Fix’s commitment to customer service and providing immediate, onsite service, it’s evident that the Dental Fix brand is strong.” training with the vans as well.”

sales environment.

Dental Fix’s training facility allows franchisees to gain experience in the field before serving customers. The program allows operators to have an extensive understanding of their position as well as the opportunity to obtain the technical skills necessary to repair equipment, sharpen tools and rebuild headpieces.

“We strive to find candidates that have a solid customer service, sales and marketing background,” said Mortier. “We currently have 111 territories in operation, and 167 franchises sold with 55 of them launching in the next six months. Dental Fix franchises are located coast to coast, in Canada and master development rights were just sold in Mexico.”

Once a franchisee is operational, they have an account management team to assist them with any issues they may encounter throughout the day. Each account management team routes calls from dental offices, contacts dentists to offer services, supports grand opening procedures, and collects invoices. Dental Fix also provides technical support and ongoing training as well as weekly webinars.

Those considering Dental Fix as a business opportunity do not have to possess any previous training or experience but should be comfortable in a

“For the past year and half, we have averaged one franchise sale a week,” continued Mortier. “We are growing very quickly and there is only a limited number of territories available. In North America, there are roughly 700 existing territories and when they are gone, they are gone.

We are excited about our quick expansion, as we work closer toward our overall target of dominating the North American dental service industry.”

For more information visit: www.dentalfixrx.com

Franchising USA

focus by Gina Gill

Page 23

ex per t advice

Christopher Conner, President, Franchise Marketing Systems

The Future of Franchising The franchise business today has been positively affected by the weak job market combined with a slowly loosening funding market. With fewer opportunities for high-income jobs, more people are turning to franchising as a means to generate the income they are accustomed to.

MBA’s deeply experienced in their trade and talented professionals are buying franchises at a rapid pace in today’s market. Financing and funding options were limited from 2009-2012, but have been increasingly less difficult to obtain over the past six quarters. All in all, the franchise market has experienced growth of over 4.8 percent per year since 2011 which is exceptional. This of course is fueled by a rebounding economy and a

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“Overall, we are extremely optimistic for growth in the franchise market segment with continued potential for growth over the next three to five years as the economy continues to improve.” market place that was decimated in 2009.

So where does this take us in the franchise market tomorrow?

Franchising will continue to expand as we see it. Even in a not-so-small business friendly political environment, the need for small business growth has become apparent. Franchising is one of the vehicles that effectively support small business growth in any economy by leading the way to new-found entrepreneurs and business owners. This in turn creates jobs, opportunity and ultimately positive stimulation for our overall economy.

According to the Franchise Business Outlook reports, findings have consistently shown that the franchise industry has emerged from the recession stronger than others, creating jobs at a faster rate than the economy as a whole. In fact, the 2014 June Update of the Franchise Business Outlook shows an industry that is expanding faster than the rest of the economy.

Some quick numbers from the report which are extremely relevant to these statements include: • Over 200,000 new jobs were created by franchising in the U.S. in 2014 alone • The number of franchised businesses grew in 2014 by 1.7 percent in the U.S. outpacing overall economic growth The food service segment of franchising has seen the single largest resurgence since 2009. The segment was almost dormant after the economic collapse and in 2012 emerged as one of the fastest industry segments to recover. This trend will continue to follow the overall economy health and growth or downturns as

restaurants and food service businesses tend to be sensitive to overall economic trends.

We see an enormous opportunity in the technology space for franchise growth.

Recent industry segments which have exhibited strong growth trends include: Mobile Technology Repair and Service concepts, Computer Repair models, SEO and Internet Marketing Service models and other technology related businesses.

This growth has been in both retail models and in work from home type franchise businesses. Because of the overwhelming increase in demand for technology and reliance on IT in both our personal and business lives, we see this trend continuing to expand for the foreseeable future.

Our work in the franchise market has us working closely with a wide array of service businesses which offer services ranging from construction, flooring, restoration, cleaning and other trades.

The lower initial investment and higher margins in these businesses have been attractive to, surprisingly, people with little to no experience in the field. Many times it is a “white collar” professional who just wants to get out of an office and do something with their hands who ends up in these fields.

Loosening of the financial markets has supported growth in the franchise markets allowing for more entrepreneurs to get started in a business. More programs have been put in place and implemented to encourage small business growth including programs for Veterans, Women Owned Businesses and Minority Owned Businesses. Banks and lenders have been given strong incentives to loan to small businesses and help capitalize the

Christopher Conner

economy’s “come back”. Franchises are typically looked at as a safer bet for lending institutions which mean that franchisees have a better opportunity to get the money they need to start a new business.

Overall, we are extremely optimistic for growth in the franchise market segment with continued potential for growth over the next three to five years as the economy continues to improve along with the push for small business growth in the U.S. and around the world.

Christopher Conner has spent the last decade in the franchise industry working with several hundred different franchise systems in management, franchise sales and franchise development work.

His experience ranges across all fields of franchise expertise with a focus in franchise marketing and franchise sales but includes work in franchise strategic planning, franchise research and franchise operations consulting.

Christopher has worked with multiple International franchise and licensed organizations throughout the United States, Middle East, India and Europe.

He has an MBA in Finance and Marketing from DePaul University in Chicago and a Bachelor’s Degree from Miami of Ohio.

For more information visit: www.franchisemarketingsystems.com

Franchising USA

ex per t advice

Page 25

food fr a nch isi ng

Featu re

e r u t Fea

food franchising When you say the word ‘franchise,’ people likely picture a restaurant, as fast food places have been franchising at a furious pace since the 1950s. But, it’s not just fast food restaurants anymore.

All types of eateries have begun franchising. In fact, when you look at the available restaurants for franchising, you can choose from dozens of different types of food from the classic burger-and-fries joints to candy, smoothies, ice cream, health-food and everything in between.

Among franchises, food reigns supreme.

The International Franchise Association (IFA) 2012 Franchise Opportunities Guide shows that about one-third of all franchise establishments are somehow food related.

This includes fast food, retail food and full

service restaurants. The report goes on to say that the restaurant industry generates an estimated $632 billion annually with typical industry sales of about $1.7 billion on a daily basis. It employs approximately 12.9 million employees and is expected to add another 1.4 million positions in the next decade.

Independent, standalone restaurants are notoriously difficult to make successful.

During a recession, restaurants, particularly full service ones are “the first to feel the pinch and the last to feel the recovery,” according to Nima Samadi, senior analyst at market research firm IBISWorld. So, having the backing of a successful brand name and franchising system can be extremely helpful.

Fast Food The businesses that made franchising what it is today - these ubiquitous establishments - are familiar to most people. They are centered on getting you your food as quickly as possible with upfront payment and no wait staff or table service.

A 2012 Franchise Business Review report said over 4,000 franchisees from 84 different fast food brands experienced increasing profitability. The survey also said sandwich franchises were on the rise

“You can choose from dozens of different types of food from the classic burger-and-fries joints to candy, smoothies, ice cream, health-food and everything in between.”

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while pizza franchises saw a drop from 2011 to 2012.

The rise in sandwich shop concepts is likely due to people’s increasing demand for healthier alternatives. The fast pace of most people’s lives has ensured that fast food franchises remain viable, but the demand for healthier food means franchises that offer healthy alternatives have an advantage in this industry. Even franchises that have not been traditionally known for being health conscious have overhauled their menus to get healthier alternatives onto them.

Seeing as how these franchises are mostly about convenience, there are many more locations open to franchisees than for full-service restaurant franchisees. Malls, airports, gas stations, campuses and other places like these are all open to the fast food franchisee provided it gets approval by the franchisor. Many franchises now have multiple formats for franchisees, often having an “express” type format for these types of locations.

enough business to sustain it. Seeing as how food franchises are the most popular franchises available, there is a lot of competition out there so you will have to choose your location wisely to make sure you’ll be able to get your fair share of the available customers.

Companies that own more than one fast food franchise often pair them together now to give customers a choice of foods or they will pair foods that are complementary to each other like a sandwich shop and ice cream shop so customers can enjoy both places when they visit.

Coffee

Full Service

• The average coffee drinker will spend an estimated $165 per year on it.

Full service restaurants are the kind where people come in and sit down to eat and pay after they’re done. They often have a hostess and have wait staff and can range from casual to fine dining.

When it comes to food franchises, full service restaurants require the largest investment, both financially and personally. Even though you have the backing of a recognized brand, you’ll still be running a restaurant, which can be incredibly difficult work.

Aside from the food itself, obviously, location is perhaps the most important thing to consider. Even if the food is amazing a restaurant that is in a poor location can suffer, particularly if the demographics in the area cannot generate

Do Americans like their coffee? Well …

• Greater than 80 percent of Americans drink coffee.

• 52 percent drink it every morning.

• Coffee drinkers will spend nearly 45 hours each year in line waiting for coffee to go.

These eye-opening numbers come from National Geographic and show just how much the bitter, black brew has inundated our lives. And, we’re going to continue drinking it more and more, at least according to the 2012 National Coffee Drinking Trends study published by the National Coffee Association of USA. That report showed among respondents aged 18-24, daily consumption of coffee jumped to 50 percent from 40 percent in 2011. For 25 to 39 year olds, the increase was to 63 percent in 2012 from 54 percent in the previous year.

Obviously, coffee is just one beverage a coffee shop sells. They usually have some simple food items and a bevy of other

beverage choices for customers. And one other thing they have in abundance is competition, because it’s not just competition from other coffee shops they face, but competition from every other place that sells coffee … and almost every other place sells coffee.

Of course, not every other place sells specialty coffee, which is really the bread and butter of most coffee shops. Although it seems like there can’t possibly be anywhere left that doesn’t have at least one coffee shop on every block, the fact that people keep drinking more and more of it means they’ll continue to need places to buy it from.

Pizza Pizza franchises can either be sit down full service restaurants, limited service

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food fr a nch isi ng

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food fr a nch isi ng

Featu re

“Younger generations are all about finding their individual identities and brands that make consumers feel empowered and celebrated will gain their loyalty.”

Ice Cream and Frozen Yogurt

restaurants where people place an order and then collect it to go or take and bake style restaurants where people order the pizza in the store and then take it home to bake themselves.

The name of the game for a lot of pizza places is setting themselves apart with untraditional toppings and crusts. While a lot of people still like classic toppings like pepperoni, ham, sausage, onions, peppers or mushrooms, pizza places continue to introduce unique toppings and various kinds of crust — stuffed and non-stuffed — to cater to people’s desire to try new things. In fact, food industry research firm Technomic said in a report on the pizza industry that artisan pizza (think craft beer, but for pizzas) are growing in popularity and chicken made in its various flavors, has overtaken the classic pepperoni as Americans’ favorite pizza topping.

More pizza franchises are also starting to add other items aside from just the usual pizza and breadsticks to their menus.

Salads, pasta dishes and chicken dishes are starting to pop up where once only pizza could be found. This can be attributed to franchises trying to entice more people, but also the general trend toward healthier eating that has swept across the entire food industry. A National Restaurant Association (NRA) survey from 2011 said seven out of ten consumers polled said they are trying to eat healthier when eating out now compared to a few years ago.

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These dessert franchises often sell items like smoothies and milkshakes besides their main offerings from kiosks and stores in strip malls to ice cream truck franchises. Although it may seem counterintuitive, items like ice cream and frozen yogurt don’t see a dramatic drop during tough economic times, according to IBISWorld. It turns out that people like these comforting treats when times are tough.

“Despite low disposable income and consumer sentiment, consumers indulge in inexpensive luxuries like frozen yogurt and other comfort foods during gloomy times,” the research firm said in a report on the industry.

In keeping up with the general shift to more healthy menu items, the ice cream and frozen yogurt industry has shifted right along, now offering low fat, fat free and sugar free varieties.

Another shift has been the move toward dessert customization. It’s not enough now to offer just nuts or sprinkles. People want to be able to choose from a whole variety of toppings and base flavors. Doit-yourself places like Menchies are also gaining popularity, as they allow people to have complete control over their dessert creation. This is especially important for younger people.

“Younger generations are all about finding their individual identities and brands that make consumers feel empowered and celebrated will gain their loyalty,” says Kerri Smith of global marketing agency iProspect.

One thing franchisees who live in colder climates will have to keep in mind is the fact that ice cream and frozen yogurt sales tend to be seasonal in nature. Once

the temperature starts dropping outside, people tend not to feel like a cold treat, although it’s still possible to keep a franchise open and running all year even in cold weather climates.

The Rest Not all food franchises are restaurants.

Bakeries, convenience stores, food gifting services, juice and smoothie franchises and vending machine franchises also fall under the food franchising umbrella.

As with any other type of franchising, research is the most important thing to do when deciding what type of franchise would do well in your area. It’s what your area doesn’t have that will likely do best, providing it has the demographics to sustain a profitable business. Franchisors will help with research to decide if your area is a place they can be successful.

Seeing as how food is one of the things people literally cannot live without, it seems like a fairly safe bet when deciding on a franchise. Providing you can find a niche to fill in your area, a food franchise can help you satisfy your hunger to own your own business.

About the author: A former journalist, Rob Swystun, has been writing professionally since 2006 and now concentrates on freelance writing.

He lives in Winnipeg and is currently an Athabasca University student studying for a BA in Communications.

Look out for our next special feature: Retail Franchising

Franchising USA

ex per t advice

Dr. John P. Hayes, Author and Franchise Coach

“Is Franchising For You?” Can You Come Up with an Amazing Idea?

Most people can’t come up with a good business idea, let alone know how to build a prototype and successfully open the doors to paying customers.

Most people are going to trip up over where to locate the business, or how to negotiate with suppliers, or how to market and advertise the business, or how to charge for products or services, or how to keep customers coming back time after time, or all of that and more.

In other words, most people who start a business are going to fail, and they do.

Every year would-be business owners lose billions of dollars in America alone, all because they didn’t know what successful franchisors know.

The Secret is in the System You’ll notice that I said “successful franchisors” because not everyone who becomes a franchisor succeeds. But successful franchisors, those who invest the time and the money–especially the money–to build profitable and satisfying businesses also develop a series of systems that they can transfer and teach to other people: franchisees.

Everything that successful franchisors know becomes part of a system. And it’s the system that franchisees rely on to replicate the franchisor’s success.

How does McDonald’s eliminate the guesswork about where to open a new unit? That knowledge is part of McDonald’s site selection system.

How does a McDonald’s franchisee know how many hamburger rolls to purchase on any given day, and how many people will be needed to operate the business during an eight-hour shift? The answers are part of McDonald’s operating system.

In fact, you can’t ask a question that

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ex per t advice

Dr. John P. Hayes, Author and Franchise Coach

“Every year would-be business owners lose billions of dollars in America alone, all because they didn’t know what successful franchisors know.”

McDonald’s, the franchisor, can’t answer about how to operate a successful McDonald’s restaurant.

And now, just imagine, McDonald’s is willing to share all of its knowledge with you, or any qualified prospect, to become a franchisee anywhere in the world. Tell me that’s not amazing!

You Can Minimize the Risk What’s more amazing, and this is what I thought about the first time a franchisor explained franchising to me, is that I do not have to come up with a good business idea, go into debt to develop the idea in the hopes that it would become a profitable and satisfying business, and then fail. I don’t have to take that risk because there are at least 3,000 different franchise opportunities in North America alone.

It’s easier to find a business concept that I like, and then pay the franchisor to teach me how to operate the business successfully in a new location. Or, I can buy an existing franchise business and bypass the more treacherous start-up years.

I didn’t come from a business-minded family, so I knew very little about how to develop and operate a business. And yet, I wanted to own a business because I knew that working for someone else wasn’t going to fulfill my expectations. I was never going to make enough money working for someone else, and I’m not a 9-to-5 type of employee.

But until I learned about franchising, I didn’t think I could ever own a business.

I’ve since owned several franchises, I’ve been the CEO of a major franchisor organization, and I’ve devoted a career to advising franchisors and franchisees, writing about franchising, and teaching people how to take advantage of this amazing concept.

Franchising USA

Franchising is an Equalizer Through the years I’ve become acquainted with countless people internationally who told me they didn’t think they had a chance to own a business because of their circumstances. Some of these people had great ideas for new businesses, but most of them did not have the money to start a business, and many of them did not have a formal education–in fact, several never graduated from high school. No one claimed to know how to build a business.

But once these people discovered franchising most of their doubts and limitations disappeared over time, and they built profitable and satisfying businesses, and in some cases, financial empires.

It’s important to know, as successful franchisors and franchisees will tell you, that while franchising levels the playing field so that most everyone can succeed in business, it doesn’t suddenly make everything all right. It makes everything possible, at least in terms of developing a successful business, but it doesn’t remove all the risks or limitations, and it surely doesn’t do the work for you.

Many people are fond of saying that franchising is “turnkey,” and unfortunately that leads some people to believe that all they have to do is get the key, turn it, and voila!, success. But it’s not that amazing!

Dr. John P. Hayes

successful franchisors and franchisees also share the ability to be led.

Obviously franchisees need to learn how to be successful in business–that’s the

purpose of the franchisor’s system–but franchisors are not infinitely wise; the best of them recognize that they need

to be taught and guided, too, and they

invest time and money in their continuing educations. Anyone who isn’t willing to

be led to greater accomplishments isn’t cut out for franchising, as amazing as it may be.

Now that you’ve heard all this, you only have to ask one question: “Is franchising for you?”

Dr. John P. Hayes is a regular keynote speaker on the “As to Zs of Franchising” for the International Franchise Expo, author of Start Small, Finish Big with

Franchising isn’t a miraculous solution.

I don’t know any lazy or uninformed people who have succeeded in franchising.

Conversely, of the successful franchisors and franchisees I know, none is a genius.

Most are simply hard working, curious, ambitious people. Some earned college degrees; others did not. Some had family money; most did not. Many struggled before they succeeded, and some failed and started again, but none gave up.

Fred DeLuca, and a franchise industry

Other than franchising as a common bond,

Franchising_USA

expert to media outlets across the country.

[This article is an excerpt from 12

Amazing Franchise Opportunities for

2015, a new book by Dr. John P. Hayes to be published by BizComPress in November.]

To reserve your free copy visit: www.amazingfranchises.com/

Page 33

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Page 35

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“BUILDING AMERICA WITH AMERICAN HEROES”

www.VeteranFranchiseAdvisers.com www.VeteranFranchiseAdvisers.com www.VeteranFranchiseAdvisers.com “BUILDING AMERICA WITH AMERICAN HEROES”

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Veterans make great franchise Veterans make greattraining franchise owners!

Your military has Veterans make great franchise owners!

Your military training has taught you many things that transfer owners!

Your military training has taught youthe many things that transfer well into world of franchising. taught youthe many things that transfer well into world of franchising. well into the world of franchising.

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You served your country proudly.

You served your country proudly.

You served your country Now its time to build a future for you andproudly. your family.

Now its time to build a future for you and your family.

V eterans in F ranchisin g S upplement november 2 0 1 4 Our Veterans in Franchising special supplement has become a regular feature of Franchising USA. To share your story in the next issue, please contact Vikki Bradbury, Publisher Phone: 778 426 2446 Email: vikki@cgbpublishing.com

Contents Cover Story

Franchisee in Action

38 PIRTEK. The Perfect Fit

40 Teen Road to Safety

Profiles

News & Expert Advice

42 Furniture Medic 48 Tutor Doctor

44 Franchises Offer a World of Opportunities

Tariq Farid, Edible Arrangements

Focus

50 Will Crowdfunding Help Make Acquisition of

Franchise Opportunities Easier?

Jim Mingey, Veterans Business Services

46 Money Mailer 52 GameTruck

54 Veteran News

VetFran: A Growing Network

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V e t er a ns i n Fr a nch isi ng

C over S tor y - Pi rt ek

PIRTEK

The Perfect Fit One of the marks of a good leader is that he’s not only good at what he does, but makes others around him better at what they do.

It’s this type of leadership that earned Jim Lager, owner of multiple PIRTEK locations in Dallas, the Multi-Unit Franchisee Magazine 2014 Most Valuable Performer Veteran Award.

After buying his first PIRTEK franchise in 2010, Lager turned some heads by having the highest first and second year sales of any United States PIRTEK franchise in its history.

PIRTEK is a business to business franchise that services, maintains, installs and replaces hydraulic hoses and fittings.

All PIRTEK franchises consist of a storefront, and a fleet of vans to perform on-site service.

Because of his meteoric rise within PIRTEK, Lager joined the company’s franchise advisory council and immediately started contributing valuable ideas.

Lager then found himself giving motivational speeches at the owner’s conference to tell them how he was doing so well, which prompted vice-president of franchise development Gwyn O’Kane to approach Lager about working with some of the company’s franchises on the west coast, which were having a difficult time recovering from the recession.

Happy to help out his fellow franchisees, Lager headed to the west coast and spent a week in San Francisco before he and the company decided that he should develop

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his own program and take it to the various other PIRTEK west coast franchises to help them get their sales up.

routes he was responsible for with training and helping franchisees grow their businesses.

Some of those stores, like the PIRTEK in Kent, WA, went from being in the bottom 10 percent to being in the top 30 percent in the country under Lager’s tutelage.

Lager credits Snap On with giving him a great opportunity. He exited the army reserves young and with no money, as he recalled. But, Snap On gave him a chance and within nine months of joining the company as an employee, he was a franchisee.

“I took them from losing cash to making cash and now they’re actually growing to be a profitable business,” Lager said during a recent interview from his own office in Dallas.

The program he developed was hardly rocket science, though, the veteran said.

He merely took his experience from his time at Snap-On Tools and combined it with obvious sales techniques that focused on the customer relations experience.

But, sometimes, he pointed out, it’s the obvious techniques that people can miss the easiest. He actually went out with sales managers on customer calls and gave them direction on how to reach out to customers, what to say and how to keep track of what they were doing and he made it all simple enough that they could easily adopt it.

O’Kane said Lager really deserves the Veteran’s Award for franchising because he truly understands the importance of the franchising system and that it’s not just about the individual franchisees being successful, but about everyone within the system and the system itself being successful.

Snap On Experience Lager had perhaps the perfect background for putting together the program that he did with PIRTEK. Prior to purchasing his PIRTEK franchise, he spent time with Snap On Tools as both a franchisee and an employee of the company as a field sales manager, meaning he had 12 different

He was with Snap On for several years, running a franchise and then moving into his field sales manager position.

Eventually, he left and opened his own independent business, but he sold that and went back to Snap On as a franchisee again, this time growing his business up to five franchises.

And then he found PIRTEK. “That’s what really changed my life and it’s an opportunity that I was really able to grow with and do what I wanted to do with a franchise,” Lager said.

He currently owns two PIRTEK franchises and is working on opening his third one by the end of this year. What Lager likes about PIRTEK is that you can build a team around you to help run the business, meaning it’s not just a one-person show.

Plus, it’s also a lucrative business.

“You can make a really good living with just one franchise in this business,” he noted.

Military Service For Lager, having a team that he can rely on harkens back to his military days. In the military, he said, you have to work in teams and you don’t get to choose your teammates, but you are expected to make it work regardless.

“You have to work as a team and your environment isn’t always ideal, but you

It’s this ability to make the best of any situation regardless of the team you’re surrounded by that Lager said he brings over to his franchising business from his military days. He joined the U.S. Army air defense in 1985 and was stationed in Germany for two years before joining the Army Reserves in Minnesota. He left the reserves in 1991 and joined Snap On.

Veteran Savvy Veterans are a natural fit into a franchising system, PIRTEK’s O’Kane said.

In the U.S., PIRTEK has about 10 owners who are veterans that come from the Navy, Army and Marines.

Jim Lager

still have to make it work at the end of the day,” he said.

“We find veterans are excellent because they make great franchise entrepreneurs because they’ve got that entrepreneurial spirit and they’ve got that willingness to follow a program,” O’Kane said during an interview from the company’s Rockledge headquarters.

With their U.S. headquarters stationed in Rockledge, FL., PIRTEK now has 48 locations and another two set to open in the U.S. by the end of the year. The company started in Sydney, NSW in Australia back in 1980 and is currently active in 23 countries with about 400 locations worldwide.

PIRTEK is part of the VetFran Directory program, run by the International Franchise Association, and the company offers discounts off of its franchise fee for veterans, O’Kane said.

As for advice for veterans who are transitioning out of the military and into civilian life and are looking at franchising, Lager said it’s important to do research and pick the right franchise for themselves because there are a lot to choose from and they might not be a good fit for all of them. But, he added, with so many franchises to choose from, any veteran should be able to find one that is a good fit for them.

For more information visit: www.pirtekusa.com Article by Rob Swystun.

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Teen Road to Safet y

From Employee to Franchise Owner “I purchased the franchise because of the business model of using retired law enforcement officers as instructors and the professionalism of the way we teach.”

Dan Mulrenin

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Often with franchises, an employee who works for the business will enjoy it so much that they want to get involved as an owner.

(retired as a lieutenant) purchased his Teen Road to Safety franchise in May 2011.

That’s exactly what happened with Dan Mulrenin, a former instructor with driving academy Teen Road to Safety, who is the company’s first franchisee.

“I purchased the franchise because of the business model of using retired law enforcement officers as instructors and the professionalism of the way we teach,” the franchisee said in a recent interview.

Mulrenin, who served with the U.S. Marine Corps from 1975-79 (honorably discharged as a sergeant) and then as a Los Angeles Police officer from 1980-2008

Prior to purchasing his franchise, Mulrenin was an instructor at the driving academy. He respected the fact that Teen Road to Safety president Andrew Wunderlich was dedicated to teaching safe driving.

Although focusing on teenagers, the company teaches all people who are old enough to drive using the same training

methods that police officers receive for their own driver training.

Captain of his own ship After serving in the military and then on a police force and finally as an employee in a business, Mulrenin wanted to know what it was like to be his own boss, so he jumped at the chance to go from instructor to franchisee.

Being involved with the business already meant that it was extremely easy for him to transition into being an owner. Mulrenin said Wunderlich was helpful in showing him the management side of the business and the on-going support that TRTS provides continues to be an important resource for him.

that getting the business started was a lot of work, but his work/life balance is getting better now. He doesn’t do as much instructing anymore, instead leaving that to his top notch team while he concentrates on the marketing of the business. Learning this side of the business is something that prospective franchisees need to be prepared for he says, however having the support of a great system behind you really makes the difference.

Like most franchisees, Mulrenin found

“It is challenging, fun and you have to

be very dedicated,” Mulrenin said. “The rewards of being your own boss are very gratifying.”

However, even more gratifying for Mulrenin is the fact that Teen Road to Safety can have such a positive impact on people’s lives through the company’s dedication to teaching teens and adults to drive safely.

For more information visit: www.teenroadtosafety.com

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Fur nitu re M edic

a family’s belongings sustained during relocation, he understood the enormous need in the furniture repair industry. Pair that demand with his lifelong hobby of building furniture and the fact that he also loves engine mechanics, and purchasing a Furniture Medic franchise was a match made in Heaven.

Or at least, for Pierce, a match made in Wichita Falls, Texas.

The North Texas town is home to Sheppard Air Force base and is just across the state line from Fort Sill in Oklahoma.

Among Pierce’s many clients, he’s happy to count people serving in the military.

“I’m humbled every day to be able to interact a lot with Army and Air Force personnel,” he said. “Giving back to folks in the military is a really rewarding part of my business.”

Ron Pierce When Ron Pierce retired from the U.S. Air Force after 20 years as a Cardiopulmonary Technician, he was interested in maintaining that sense of fulfillment and joy in a new vocation.

He found it as a Furniture Medic franchise owner.

Transitioning from repairing hearts and lungs to repairing furniture may not seem like a natural next step, but Pierce says his new career lets him use his problemsolving and free-thinking skills to help other people find new life in objects they value and cherish.

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Profile

“I have always been one to reap what I sow,” Pierce said. “Being fully responsible for my results brings a sense of accomplishment that you can’t get anywhere else.”

And Pierce knows about rewarding work.

Not only did he work stateside as a medic in the cardiac cath lab and manager of a sleep disorders clinic for the Air Force, he had two deployments as a member of a critical care trauma team. His deployments supported Operations Northern Watch and Iraqi Freedom in 2002 and 2003. Pierce’s expertise was recognized by Air Force leadership, and he culminated his career as the advanced course curriculum developer for his cardiopulmonary career field.

At a friend’s suggestion, Pierce worked in moving claims when he first retired from the military in December 2010.

Seeing first-hand the bumps and bruises

Pierce normally limits his service area to a 75-mile radius, but has had special requests to travel 250 miles or more. A few of his many satisfying projects, include refinishing all 175 dining room chairs for a retirement village, thrilling the elderly residents with their “new” chairs, and restoring an antique Partners Desk from the 1800s. At four by eight feet, it was a very large piece with built-in drawers in the top slab and three leather inlays that all required precision detail restoration.

The owner, the president of an oil and gas company, remembered the piece from decades earlier and had originally wanted it in his home. But when he saw the restored desk, he wanted it in his office for all to see.

Beyond his profession of bringing new life to cherished possessions, renovating cabinetry and rescuing new furniture from delivery mishaps, Pierce gives back personally. He supports a therapeutic horseback riding farm in his community, teaches Sunday School, and serves on the Education Policy Team of his state representative’s office. He also enjoys golf and camping with his wife and three teenage sons.

For more information visit: www.furnituremedic.com

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V e t er a ns i n Fr a nch isi ng

Tariq Farid, Founder and CEO, Edible Arrangements

Now More Than Ever, Franchises Offer a World of Opportunities for Today’s Vets

Tariq Farid

For years, franchising has been known as a fulfilling post-service career option for military veterans. The numbers back it up too.

One out of every seven franchise businesses in America is owned and operated by veterans of the U.S. military, according to a recent study conducted for the International Franchise Association Educational Foundation, and based on

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U.S. Census data. More than 66,000 veteran-owned franchise businesses in the U.S. provide jobs for 815,000 Americans, generating more than $41 billion.

At Edible Arrangements, some 600 veterans are employed in our locallyowned stores and we have a goal to ensure that we create at least 1000 jobs within the next year. We currently have dozens of franchisees who are veterans and we plan to boost this number with our Hero’s Welcome program which offers a reduced franchise fee for U.S. military veterans.

It is estimated that one million vets will

be returning home over the next five years. Opportunities to transition from the military to the civilian job market are critical, to prevent returning vets from having higher-than-average unemployment rates. Franchising can play a major role in this transition. There are number of reasons that the franchise business model has always been - and will continue to be a perfect fit for America’s veterans.

Franchise operations mimic military ones Strict protocols and chain of command are a way of life in the military, and also in franchise operations. While vision and drive are critical, it’s also important that franchisees have an ability to work within prescribed guidelines that have proven the test of time.

Most franchises offer veterans reduced-fee loans and subsidies Some franchise companies provide a discounted franchising fee to veterans.

We do this at Edible Arrangements and it’s just a small way to thank veterans for their courageous service. Additionally, loans in excess of $1billion are available to returning service men and women through special veterans’ programs administered by the government.

Veterans’ ability to handle risk, adapt to change and continue to persist, make them more suited, in many cases, to handle everything that business ownership may throw their way. Lenders know this and that is why franchises remain one of the nation’s most stable and healthy investments.

Franchises provide training From the day they enter boot camp, veterans know that ongoing training is a part of military life. An ability to stay abreast of the latest techniques and technologies can mean the difference between success or failure and, in some cases, life or death.

As a result, I have found veterans some of the best students when it comes to our

“U.S. military veterans have the qualities that every franchisor is looking for and have a huge potential to become the standard-bearers for their brands.” training programs at Edible Arrangements.

I have found that veterans are always on the look-out for a competitive advantage and they are among the first to ask to be a part of testing new programs and initiatives.

Franchises need leadership and decision making ability Leadership and an ability to make decisions are two characteristics I have found in every veteran who has become a franchisee at Edible Arrangements.

Through training and experience, they have honed these skills to where they have become second nature.

Business owners are faced with circumstances that are constantly changing, sometimes without warning, and snap decisions must be made. Last year’s severe winter caused some of our franchisees to make unique, inthe-moment choices that enabled them to weather the storms and provide 100 percent satisfaction for our customers, safely and without incident!

Franchises thrive on commitment Even with proven systems and processes in place, running a franchise business is hard work, sometimes requiring long hours. Of course, that is nothing new to someone who has spent any time in the military.

In fact, this is often when veterans are at their best - riding the adrenaline rush that comes by pushing yourself more than you ever thought possible, seeing a situation through to success.

Franchises inspire and encourage philanthropy According to FranchiseHelp, whether

it’s on a national level or in an individual franchisee’s neighborhood, the world’s best franchises not only generate profits but contribute meaningfully in their communities.

Veterans know about sacrifice and service.

I have found that our military veterans appreciate everything they have and the opportunities our country has given them.

As a result, they have a burning desire to continue to serve and help others.

In short, U.S. military veterans have the qualities that every franchisor is looking for and have a huge potential to become the standard-bearers for their brands.

If, over the next few years, franchisors make a concerted effort to reach out to U.S. military veterans, not only will their companies benefit, but we might begin to close the unemployment gap faced by those who have given so much to our country.

Tariq Farid is the Founder and CEO of Edible Arrangements. The company began in 1999 with one small store in East Haven, Connecticut. Through franchising, the company has grown to 1,200 stores in 14 countries and territories in just 15 years. Farid is a champion of the franchising model as a great way to grow a large business, but also firmly believes becoming a franchisee is the pathway for successful small business ownership.

For information on Edible Arrangements’ franchise opportunities for Veterans: www.ediblearrangements. com/FranchiseOpportunities/ RequestInformation.aspx For information on International Franchise Association’s VetFran Program: www.vetfran.com/about-vetfran/

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M oney M ailer

s e t a l s n a r T n a Veter o t n i g n i n i a r T y Militar y vv a S s s e n i s u B

Tom Wisdom

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Living up to his name, Tom Wisdom made a wise decision about twoand-a-half decades ago when he purchased a Money Mailer franchise.

Internet to mobile devices and on social media.

Now this army veteran and his wife Judy are getting ready to pass along the business to their son, who has been involved with it for the past 10 years.

He even credits it with inspiring his sales technique. “I joke to people, but I sell by ambush, I really do,” Wisdom said during a recent interview from his home office in San Antonio, TX.

Money Mailer is a hyper-local marketing services franchise that provides local business owners with marketing solutions so they can reach their best prospects with coupons delivered in the mail, on the

While Wisdom had a lot of sales and management experience as an executive at 3M, he credits his military experience with giving him the discipline to follow Money Mailer’s proven 35-year operating system to get out on the street and scale his business.

The “ambush” that Wisdom refers to is the way he goes into a business armed with so much knowledge about it that he may even know the business better than

the people he’s talking with who work there. Money Mailer provides extensive marketing databases on every business category so franchisees can work with business owners as marketing consultants understand their goals and objectives and develop customized marketing campaigns that bring more of the right customers in the door.

“I’m part of their marketing staff,” he said. “I’m the cheapest employee they’ve got. They don’t pay me a salary, they don’t pay me benefits, they don’t pay me workman’s comp, they don’t have to pay me termination fees and if I’m not doing a good job for them, they just quit talking to me.”

He goes in focused on what the client needs and how he can help them and is highly motivated to perform to make them successful and, Wisdom said, the army taught him that focus.

Service Career Wisdom attended Texas A&M and joined the Corps of Cadets, leaving the school as a second lieutenant in 1960. He and his

wife Judy got married after school and he stayed on active duty for eight years.

Wisdom commanded a tank company in Germany, spent a year in Vietnam and held staff positions at a few different army bases.

Through all his service, Wisdom said, he learned a lot about following a plan, following an operations order, and about self-discipline. The only way it didn’t prepare him for the business world was not having any financial training. However, his time with 3M would provide him with that financial training which has served him well as he has built a thriving business in San Antonio.

Back to Texas Once he had held a variety of positions in 3M, he and Judy decided they wanted to exit the corporate culture and get back to their beloved Texas. So, they decided to look for a franchising opportunity and Money Mailer kept popping up. So, in 1991, the couple bought a regional franchise with a territory that stretched from Waco to the Rio Grande Valley and included Austin and San Antonio.

As regional operators in a three-tier system their responsibilities included looking after all franchisees within this large geography. In 2004, Money Mailer changed their structure and became a traditional two-tier system, buying back regional licenses and resulting in a very profitable outcome for the Wisdoms.

They were now able to run a substantial operation in San Antonio from the comfort of their home with extremely low overheads.

“It allows us to run lean and mean and still be highly effective” Wisdom explained.

For Wisdom and his wife, purchasing their Money Mailer franchise back in 1991 was probably the best decision they could have made. And, thanks in large part to the discipline from his military career, invaluable assistance from his wife Judy and the training, support and systems provided by Money Mailer they have built a highly lucrative marketing consulting business in San Antonio.

For more information visit: www.franchise.moneymailer.com

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Tu tor Doctor

Tutor Doctor to Assist Veterans Tutor Doctor Franchisees Partner with Veterans Administration to Assist Transitioning Veterans Through a great collaborative effort of Tutor Doctor’s Operations Team and Bob Rosedale, a U.S. veteran and a Tutor Doctor franchisee based in Idaho, Tutor Doctor won the bid and secured a $3.25 million contract with the U.S. Veterans Administration.

Tutor Doctor. Bob Rosedale will lead the regional Tutor Doctor team to ensure our veterans are receiving professional and high quality training.

The five-year contract will provide vocational training and transition services to military veteran men and women pursuing non-military careers.

Tutor Doctor offers help in any subject to students of all ages including adults going back to school. Rosedale has a roster of more than 100 tutors, including active and retired school principals, teachers, engineers, business professionals, veterans and professionals with experience working with special-needs students.

Tutor Doctor, the Number One at-home tutoring franchise in the world, was the only franchise company capable of providing services across all of the nine states in the western region, ranging from Colorado to Hawaii, which the VA was looking for.

Tutor Doctor’s 22 local offices across the region and its ability to recruit, train and retain the best tutors and trainers with specialized skills were the primary factors in the VA’s decision to work with

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Rosedale’s franchise success in Idaho and his enthusiasm and support of Tutor Doctor’s principles and values combined with his entrepreneurial spirit were instrumental in securing this contract.

He applies the same commitment and dedication to his Tutor Doctor business as he did to his country during his 26-year military career. He retired as a U.S. Air Force squadron commander in the late 2000.

Rosedale’s business has provided over 10,000 tutoring sessions to over 500 families since opening in 2011. About 100 new families have signed up this year, giving Rosedale’s Tutor Doctor the greatest year-over-year first quarter growth rate among Tutor Doctor franchises in the western U.S.

Bob Rosedale

“We are in a fortunate position to be helping our transitioning veterans,” says Rosedale. “I personally went through a transition over ten years ago and am thankful to now have the opportunity to help others.”

Today, there are a few areas included in the contract with VA where a Tutor Doctor franchisee is required including: • Honolulu, HI • Salt Lake City, UT • Fort Harrison, MT There are also a few remaining territories in the western U.S. region which could benefit from the contract! If you or someone you know is a community leader with strong people skills looking to start their own business in these areas, get in touch with Tutor Doctor immediately!

For more information visit: www.veteransbusinessservices.us/ product-item/tutor-doctor

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DON'T MISS THE BIGGEST FRANCHISE EVENT OF THE YEAR!

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Contact Lynette James at 202-662-0782 or ljames@franchise.org if you are interested in exhibitingFranchising or sponsoring.

USA

V e t er a ns i n Fr a nch isi ng

Jim Mingey, Veterans Business Services

Will crowdfunding Help Make Acquisition of Franchise Opportunities Easier for Veterans?

One would think that a non-profit crowdfunding platform for honorably discharged service disabled veterans who want to start small businesses is particularly well suited for a number of reasons.

First is the fact that being a veteran is the Number One indicator of successful business ownership. One out of every ten businesses is owned and operated by a veteran. Secondly, many disabled veterans have issues that allow them to tap into caring support networks. So what is crowdfunding and could it help fund a veteran franchise acquisition?

Franchising USA

Crowdfunding is the process of raising public money to fund a private campaign.

It allows you to tap into your social network and receive contributions from all of your “friends� to develop an idea or event. The majority of crowdfunding money raised today is on rewards-based platforms like Kickstarter and Indiegogo websites. With these sites, supporters of a project typically get some kind of incentive, from a coffee mug to a listing on a marquee, in return for their contribution.

In addition to rewards-based systems, the equity crowdfunding market now allows investors to receive a share of the company in exchange for funds.

While Kickstarter and Indiegogo are generalist platforms for raising money, niche sites are springing up that may serve to help drive equity to veteran small business and complement new peer to peer lending platforms for veterans like Street

Shares. The crowdfunding market is going to be full of specialized players that serve particular market segments very well. So why not veterans in franchising deals and what are the problems?

One problem is that the crowdfunding platforms mentioned need campaigns that are relatively expensive to organize and promote. Another is that the success rate of their veteran campaigns to date is poor and only raises amounts that are typically below $5,000. With millions of crowdfunding opportunities out there, it’s difficult for people to choose what to support or invest in. However as crowdfunding becomes more mainstream, some expect to see crowdfunding funds start that aggregate multiple causes or investment opportunities. This could be a great new risk capital pool for veterans in franchising. This could be particularly true as equity-based crowdfunding success

“Crowdfunding is the process of raising public money to fund a private campaign.”

Jim Mingey

stories spread and the public wants in on the action. Franchising provides a relatively stable business analysis platform for investors and consistent regulatory information requirements.

While it will be exciting to watch crowdfunding evolve into new areas like franchising, it’s important to note that each crowdfunding site must ensure that the money is distributed efficiently and that contributors get what they bargained for (the initial incidents of fraud have been low, less than .1 of 1 percent on Kickstarter). It will be easy to find veteran franchise deals that need money and tough to find deals that will work out for investors. For now SEC accredited investor rules still apply for due diligence requirements to over 1000 crowdfunding platforms worldwide.

One very interesting facet of crowdfunding that has emerged is that communities are expected to use the crowdfunding vehicle for public/private partnerships. Envisioning community economic development actors partnering with veterans on franchising projects is a refreshing thought. Even if veterans have to bring their own “crowds” I believe at least a few franchise deals will probably get done with crowdfunding.

Happy Veterans Day! VBS’ Founder and Managing Director, Jim Mingey, is a decorated Vietnam Veteran raised from a proud military background. An entrepreneur for more than 35 years, Jim can relate on a personal level to the needs of the Veteran small businessperson, and

possesses the practical knowledge to implement his experience in today’s market. Jim participated in the EBV Program at Purdue University, is a mentor at American Corporate Partners, developed the first approved franchise training program for the Vocational Rehabilitation and Employment(VR&E) Program at Veterans Administration, and was instrumental in forming the first equity fund in the United States exclusively for Veteran owned small businesses and franchises: The Veterans Opportunity Fund. Jim intends to keep on ‘advocating’ for Veterans in franchising.

For further information visit: www.veteransbusinessservices.us

Franchising USA

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V e t er a ns i n Fr a nch isi ng

G a meTr uck

Game Over?

Not for this Marine Corps Vet!

Joshua Brasure is a Marine Corps Veteran, a stay-at-home dad and an accomplished business owner who has found success in joining GameTruck as a franchisee.

Franchising USA

GameTruck is a mobile video game theater company that brings people together to enjoy gaming in an interactive multiplayer environment. The video game parties feature all the latest consoles including Xbox 360,PS3 and Wii and can accommodate a minimum of sixteen players. In addition to video games, they also offer laser tag parties that take place outside of the theater and are complete with specialty missions, challenges and obstacles.

During Mr. Brasure’s eight years with the Marine Corps he’s been deployed three times, twice to Iraq and once to Afghanistan. During one of the deployments he unfortunately was forced to watch his first daughter being born on a web cam. Having missed out on such a miracle, Joshua knew he wouldn’t miss another special moment like that in his family’s life, and needed to find a career that provided him with the flexibility to do just that.

“I thought that was very interesting, so I did a lot of research and found out the company is very veteran friendly. I started talking to them and I was hooked from the beginning,” said Joshua.

The veteran started the franchising process in October 2013 and bought his franchise in April 2014. In fact, he decided to begin the process before he had completed his time with the military.

“It was an extremely hard transition. The hardest part was that the military takes very good care of you, in all aspects, with your money, housing, food, medical and a lot of people don’t realize that when you get out you’re on your own and you suddenly have to take care of all those things. Especially for me, since I have a family; I had to make sure they were taken care of,” said Mr. Brasure.

“I’ve done a lot of deployments, and unfortunately missed out on many events in my kids’ lives. I knew it was time to be home with my kids and my wife. We have been together for almost nine years, and my wife had to take care of the kids when I was away for as many as seven or eight months at a time. I missed my first child being born, I missed birthdays, I missed lots of things. We talked about it and as much as I loved the Marine Corps very much, I wanted to do something that I loved just as much, but could be with my family at the same time,” recalled Joshua.

The Veteran learned about GameTruck while he was working as a land surveyor in Charlotte, North Carolina and was surprised with the fact that GameTruck parties were booked three months in advance. Hearing about GameTruck’s

Thankfully for Joshua, GameTruck’s training process involves step-by-step phases with education to help candidates get to the next level. The company considers everyone a member of their team and their success rate is linked to consistent support, growth and overall strength in the brand. Franchisee training helps operators run their business from start to finish including incoming customer phone calls to hosting parties and maintaining their rig. Joshua said that every single time he reaches out to the corporate offices for support he gets the answers he needs.

“The training was amazing. They gave me everything I needed and they were nothing but helpful. I am a very outgoing person, even if I have one question I will call someone and there is always someone there. I created a great working relationship with the corporate offices and that continues today. They made it as simple as possible even though it is not an easy process,” explained the franchisee.

is now out of the Marine Corps and no longer finds himself being sent away, and thankfully he now has the ability to work from home and be more available to his family whenever he’s needed.

Now that Joshua works from home, he is able to pick his kids up from school and never misses a birthday party, a school concert or a sporting event. He can commit to his family and work his business around their needs.

“The work-life balance is almost unreal.

It is like a dream in comparison,” he said.

“When my kids come home from school, I am there waiting for them.”

Joshua Brasure wants veterans to know that their potential does not peak with the military.

“After leaving the military, veterans may think they have to get a regular job just to pay the bills. I want them to know that we have a lot out there for us and that they need to take that leap. I was scared to death but looking back I am glad that I did it, because there are so many great things that have happened for me since then. I am just a regular guy but there are a lot of great things out there that we are entitled to and we don’t have to settle. I hope people look at their options and think to themselves ‘hey, maybe I can do this too.’”

For more information visit: www.gametruckparty.com

Joshua Brasure

popularity and its veteran discount offering for Vets prompted Mr. Brasure to research the company and how to become a franchisee.

Joshua has found a very big difference in his work-life balance since he became a GameTruck franchisee. Of course he

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V e t er a ns i n Fr a nch isi ng

Vetera n N ews

vetfran: A Growing Network of Franchise Companies Dedicated to Providing Opportunities for Veterans and Military Spouses For Veterans and their spouses interested in small business ownership, consider that successful franchisees are fundamentally different than entrepreneurs.

While entrepreneurs are essential to the American economy, franchising provides an alterative for creating jobs and being the master of your own destiny.

Many people with a military background gravitate towards well-organized systems, such as the franchise business model. The franchise industry has certainly responded by helping veterans enter the franchise industry with fewer barriers.

VetFran is a network of the International Franchise Association member companies that offer financial discounts, training, mentorship and other incentives for veterans and military spouses. This is

Franchising USA

a network of nearly 650 participating companies offering discounts on franchise fees, reduced royalties, credits for marketing, and other materials needed during startup.

VetFran recently revamped it’s website to make it easier to engage with member companies and find the resources to get you started. The VetFran Toolkit is an educational portal designed to teach you about the franchise industry, and supply resources to help veterans succeed in their business goals.

No matter what stage of the process you are, the Toolkit can help further your education in the industry. There are eight primary resources to help guide you through the process of franchising and increase your chances for success.

1. Franchisee Personality Type Profile This is an easy to use assessment tool that helps veterans determine their potential for success as a franchisee and identify and explore the types of opportunities at

which they may have the greatest chance for success.

2. An Introduction to Franchising This will help a prospective franchisee understand the very basics of franchising with questions such as: What is a franchise? What are common franchise terms? What are the alternatives to franchising and the advantages and disadvantages of owning one? And what are the legal issues in franchising?

3. IFA Franchise University The IFA Franchise University is part of the Certified Franchise Executive program. There are free courses available on the basics of franchising. There is also the option to take the entire course and become certified, which will give you a comprehensive understanding of franchising.

4. Making the Franchise Decision This workbook is a tool to evaluate franchise opportunities. Once you

understand the basics of franchising and some of the mechanics, the next stage may be the evaluation stage. At this point you will want to start evaluating specific franchise companies to determine the best fit for you.

5. The Federal Trade Commission’s Consumer Guide to Buying a Franchise The Federal Trade Commission, the nation’s consumer protection agency, has prepared this booklet to explain how to shop for a franchise opportunity, the obligations of a franchise owner, and questions to ask before you invest. This resource goes into much more detail about franchise laws and understanding Franchise Disclosure Documents (FDD).

6. The VetFran Video Library The VetFran video library is designed to support veterans in understanding and assessing franchising through video-based discussion from experienced veteran franchisees and franchisors. The videos cover the fundamentals of franchising, legal issues, franchise finance, and more.

Featuring veterans in the franchise industry, these seminars offer best-inclass education from the perspective of industry leaders and Board Members of the International Franchise Association.

(1-2) VetFran.indd 1

“The VetFran Toolkit is an educational portal designed to teach you about the franchise industry.”

7. Financial and Other Small Business Resources for Veterans The financial resources section of the Toolkit provides financial and small business resources that include state, local, federal, and public funding sources, verification process for Veteran-Owned Small Business from the SBA and VA, and other general resources for veteran entrepreneurs.

8. The VetFran Directory The VetFran Directory is a list over 650 plus VetFran member companies and their discounts for veterans and military spouses. You can search by industry or investment and view each company’s VetFran program in their profile.

VetFran Mentorship Network Once all the material in the Toolkit has been reviewed, VetFran is able to match interested veterans and spouses with a

mentor closest to their location of interest.

Experienced franchise executives and franchisees have the opportunity to apply and become a VetFran Mentor.

A VetFran Mentor assists transitioning veterans with an understanding of the options available to them in the franchise sector. Such options may include franchise ownership, employment, internship or other roles to build a career after their military service.

Mentors must be available to listen to what the veteran is saying, inform by sharing information on franchising, help him or her understand and navigate various aspects of their journey, and in general, be a resource of unbiased and worthwhile information to help the veteran make the best decision for them and their future. All mentors have to satisfy a set of requirements and be vetted by the Chairman of the Mentorship Network to ensure the veteran’s best interest is in mind.

For more information visit: www.vetfran.com

10/2/14 11:59 AM

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ex per t advice

Kevin Lathrop, President, Unishippers Global Logistics

Tips for Franchisees

Considering a Move to the Information Officer (CIO) and then to my current role as President at Unishippers, I found that the basic principles that I applied to running a successful business – passion, innovation, and determination – remained the same.

Find a Franchise That Values You

Kevin Lathrop

Deciding to own and operate a business can be an empowering and rewarding experience.

If you find the franchise opportunity that matches your goals, expertise and ambitions, ownership can open doors into realms you never thought were possible.

The transition from franchisee to executive isn’t a straight and narrow path and there is no magic formula to get you there.

As I moved from franchisee, to Chief

Franchising USA

Did I know when I started with Unishippers in 1992 that they were a franchise company that valued the strategic input of their franchisees and then identified talent in the franchise system and promoted from within?

The short answer is no. As I dedicated myself to franchise ownership, and had the opportunity to meet with current executives who were former franchisees and became more familiar with company operations, I saw that the Unishippers franchisor searched for talent within their network before they looked outside of it.

It took a few years as a franchisee, familiarizing myself with the business model, before I was ready to commit to the franchisor. I saw firsthand that the executives communicated regularly with the franchisees and valued their opinion.

In 1995, I left my job in aerospace behind and fully committed to my franchise as a full-time owner and four years later I was named CIO and was made President in 2011. Is this possible with every franchise or even of interest to every franchisee?

Probably not, but for those who have a desire to add value to a company on a greater scope and scale, executive leadership just might be the ticket for you.

Know What You Bring to the Table Whether as a franchise owner or executive, if you want to be someone that contributes a unique perspective, my advice is to start nurturing your unique passion now. I had a background working in technology in the aeronautical sector, and as a full-time owner I started finding innovative solutions using technology for the problems that our franchise faced.

It was these technological solutions that helped my franchises grow to become the second largest multi-unit franchise group in the company. At that time, technology advancements in the logistics sector were especially important to the future of the franchise and still are today.

Use Your Relationships Understand and leverage the connections that are important to your success and the franchisor’s goals. The relationships that I built as a franchisee are still valuable today, but in a different capacity.

Franchisees form connections with clients, company partners and the community.

These connections are also important for solving problems that affect the company as a whole. For example, the mutual respect that I built with our carrier partners as a franchisee still carries over to the negotiating table at the corporate level.

As I started growing my franchise, the relationships that I formed with the franchisor proved valuable in opening the door to the executive level. One such relationship was with the President at the time, who recognized the success I was

Executive Level having based on some technology tools I created. He took the time to reach out to me and study what I was doing so that he could share these innovations with the system. Based on this interaction, when the opportunity presented itself, he recruited me to come to the franchisor and serve as the company’s first CIO.

Stay True to Entrepreneurial Spirit When I made the transition to franchise executive, I worried that I would lose the independence and decision making authority that I enjoyed as a franchise owner. Sure, being an independent operator means a certain degree of freedom, but ultimately I still had to answer to my clients, the franchisor and my partners in the business. And, while it took some time to transition into my role as corporate executive, I was still my own boss in the sense that I was leading a team that would shape the strategic direction of the entire company. That kind of scope and responsibility has its own rewards and you are still the “boss” just with a new set of constituents to serve.

Patience is a Virtue The last piece of advice I’d give to every franchisee considering a move up the corporate ladder is to understand that the franchisor’s growth is dependent upon a lot of moving parts and you have to be patient but determined. While an individual franchise may be able to essentially turn on a dime, the franchisor is more like a cruise ship. Making course corrections requires a greater commitment

to the process as well as flexibility, but the rewards and satisfaction for success can be a lot greater.

In closing, the connection between franchisee and franchisor is integral to the success of any company.

Franchisees should focus on being the best at what they do while proving that the unique perspective they provide a company is indispensable.

The rest will fall into place.

Kevin Lathrop has served as President of Unishippers Global Logistics, LLC since January of 2011. Lathrop began his Unishippers career as a franchise owner, initially purchasing the Unishippers of Orange County North franchise in 1992. In September of 1999, he joined the Unishippers corporate office, serving as Executive Vice President and CIO. Prior to joining Unishippers, he worked for Hughes Aircraft Company in a variety of engineering and management positions including Section Head of the Advanced Technology Section where he was responsible for all aspects of the Surface Acoustic Wave Product Line.

For more information visit: www.unishippers.com

“Understand and leverage the connections that are important to your success and the franchisor’s goals.”

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ex per t advice

Harold L. Kestenbaum, Attorney and Owner, HLK, P.C. Law Firm

Food Fight

and the Franchise System

In the heat of the summer, a food fight erupted into a whole new realm. The National Relations Labor Board (NLRB) ruled that McDonald’s can be held liable for the employment decisions made in its franchised restaurants. If put into effect, the ruling would essentially redefine the franchisor as co-employer in collusion with its franchisees.

Unlike most battles, this one is divided into three parts. Some unions and workers believe the ruling is fair and should be law. Some franchisors, franchisees and even some federal lawmakers believe that, if enacted, this rule could change the entire franchise system. And, some in the franchise world believe this ruling will create no negative consequences on the franchise model at all.

Who’s right? It depends on who you ask, but in this tale of three outcomes, there are immense considerations.

The Current Agreement Ray Kroc, the founder of McDonald’s once said about franchising: “Franchisees are in business for themselves, but not by themselves.” Under current rules/ guidelines, franchisees are independent business owners who are a part of a franchise system. They hire, fire, set the

Franchising USA

“Whether you are for or against potential changes, this presents a fresh look at franchise system standards.” would see his or her wages set via a union contract negotiated by corporate executives.

This approach also would create larger groups of employees that are attractive to the recruitment goals of labor unions.

Finally, it could force corporations to drastically alter operations. The simple reason being, it invites new liability, which could invite new lawsuits if not tightly controlled.

Picking Sides As mentioned, unions and many fast food employees are in favor of the ruling. The fight for $15 wages and the right to unionize has galvanized groups throughout this entire year. The NLRB’s ruling is considered by many people a first step in the fight to reach that destination.

Some in the franchise world believe this ruling would obliterate the franchise model, and thus change the future of franchising for all industries not just fast food.

The extent of the franchisor’s control is to make sure that the quality of the product, whether it is hamburgers, or clothing, etc., as well as the branding is uniform. This has been the franchise model for more than 70 years. Franchisors do not pay the wages of its franchisees’ employees, nor do they hire them, or dictate their benefits.

A couple of federal lawmakers must agree, as they are investigating the ruling.

However, there are some in the franchise industry who argue this is very unlikely to have any effects on the franchise model at all. Why? Well, even if the NLRB ruling is upheld, there are still numerous legal hurdles for it to clear before becoming law.

It would require revisions to the National Labor Relations act, The Lanham Act, and The Franchise Rule of the FTC, just to name a few.

The Potential Changes

Next Steps

wages, and set rules for their personnel in their locations. The franchisor does not engage in any of these activities.

If enacted, the NLRB’s July ruling would not simply mean a change in title. By assigning the franchisor as a co-owner, it could mean franchisors will have to take at least part responsibility for daily operations. Whether or not the franchisee becomes similar to any other employee is a possibility but not necessarily the rule. And the local owner (franchisee)

Clearly, we have not heard the end of this story by any stretch of the imagination.

McDonald’s is vowing to fight the NLRB’s decision, taking an appeal to the U.S. Supreme Court if it has to. As for investigating lawmakers, this could be something that ends up being debated on the floor of the Capitol, but as of this moment, that has not happened. Fast

Harold L. Kestenbaum

food employees have already shown their resolve. The strike that happened in July and September’s protest were not the first, and probably won’t be the last.

It is conceivable that there will not be a definitive outcome on this for many years.

One thing is certain, there is a process in motion but it’s not time to panic yet.

Whether you are for or against potential changes, this presents a fresh look at franchise system standards. However, the balance of competing interests is nothing new in franchising.

As a lawyer who represents franchisors, I would advise them to take a fresh look at their procedures and operations manuals.

It would allow them to prepare for possible changes down the road. It might even allow them to see changes that could benefit the company now.

Because when all is said and done, corporate executives, business owners and employees all need one another.

Franchising is an industry that depends on a team concept. The franchise system creates jobs, and is a valuable part of the business economy. With the current state of the U.S. economy, who’s not lovin’ that?

Harold L. Kestenbaum is the owner of HLK, P.C., a law firm specializing in franchise law and other matters relating to franchising. With more than 35 years’ experience, Kestenbaum currently is or has advised many regional, national, and international franchise companies in many industries.

Contact him via email: hkestenbaum@hlkpc.com.

Or visit: http://franchiseatty.com

Franchising USA

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Focus

T he I nter face Fina ncial G roup

The Franchise with a Difference

In the world of franchising where there are literally thousands of opportunities to choose from - with franchise descriptions using words such as ‘unique’ and ‘different’ - we question what in fact is unique and different?

Everyone has a unique opportunity, or so it seems.

To be unique we believe that you have to be absolutely one of a kind - no replicas and no look-a-likes - which also probably means no competition.

The world of franchising, or for that matter small business in general, has moved from the rented office concept to a homebased office setup. What was once unique, in that it was a homebased business, is now common place.

Employees represent another ‘unique’ area that isn’t so unique after all. It was at one time certainly different to say that you had a business with no employees. With the advent of technology and outsourcing, the ‘no-employees’ claim, is again, fairly common place in the small business world.

Inventory represents another changing area - most businesses that produce or distribute a product would always have as much inventory as they could afford. In this day and age we tend to be focused less and less on making a product rather than importing it, often at a much lower cost than making it domestically. ‘Just-intime’ production has also meant that inventory levels can and are drastically reduced. The claim that you have a business with ‘no inventory’ now starts to be common place.

The next question would then be - is there really any business or franchise that still has unique features and elements that distinguish it from other brands?

At The Interface Financial Group (IFG), they believe they still retain features that are both unique and certainly different from other franchise models. IFG comes with over 42 years of history.

During that lengthy time span IFG has sought to maintain its

Franchising USA

position as the primary funder for small business in a non-bank environment. IFG has sought to maintain a high standard of personal service (even that could be unique in today’s high-tech environment) while at the same time embracing technology to improve the day-to-day operations of the business model.

The IFG approach to franchising is to share the day-to-day operations of the business with their franchisees. This means that the franchisor is actually involved with the franchisee in each transaction. The franchisor does not actively compete with the franchisees, but rather complements and supports their efforts. They style their franchise as a 50/50 approach. This requires the franchisee to undertake what is referred to as the ‘people’ part of the business, while the franchisor (IFG) handles the ‘paper’ part of the business. As a general rule this works out very well as most IFG franchisees readily admit they would rather be out talking and working with their clients than processing paper.

“The IFG approach to franchising is to share the day-to-day operations of the business with their franchisees.”

Franchisees can take comfort in the fact that IFG handles the paperwork, based on their 42 years of experience in the business. Franchisees can also take comfort in the fact that every time they engage in an invoice purchase, the franchisor is working alongside them and investing their own money in the same transaction.

The Interface Financial Group franchise is naturally a capital-intensive franchise.

Capital is the key to growing a business, both for the IFG clients and for the IFG franchisees. IFG has, therefore, created a capital leverage program that assists franchisees with their capital needs. The

program effectively lends capital to the franchisees to enable them to complete more transactions. Having access to funding from the franchisor (other people’s money) enables franchisees to not only assist their clients, but to also allow them to grow their franchise entity at an exponential speed.

We think these are unique features even if the word ‘unique’ is somewhat overworked, we believe these features certainly represent a franchise opportunity with a difference!

For more information visit: www.interfacefinancial.com

The Interface Financial Group is in the business of helping small businesses expand rapidly by unlocking capital that is tied up in accounts receivable. In other words, IFG clients have sold their product or service to their customer and are now waiting to get paid. That waiting period for many small entities creates a major finance and cash flow issue. Interface injects capital by buying those unpaid invoices at a small discount to produce instant funding for their clients.

In their quest to deliver a unique franchise system for their franchisees, the fact that the franchisor handles all of the transactional paperwork goes a long way to set their model apart from other opportunities. But it does not end with a 50/50 approach to paperwork - Interface also offers a 50/50 approach to funding transactions. This means that every time an invoice is purchased from a client, it is a joint purchase by the franchisee and the franchisor. The paperwork and funding elements help to create a franchisee comfort zone.

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focus

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Focus by Rob S w ystun

G a meTr uck

GameTruck

Bringing People Together Founded in 2006, and franchising since 2008, GameTruck is a mobile entertainment company that delivers excitement.

Their main offering is a mobile video game theater which features up to eight high-definition flat screen televisions, all of the major gaming consoles, a diverse library of games, and sleek comfortable furniture. The self-powered, climate controlled gaming theater “is like a dream

living room on wheels,” said CEO Scott Novis during a recent interview from the company headquarters in Tempe, AZ. Each mobile video game theater can entertain 20 to 30 people at a time, accommodating higher numbers on a rotation. GameTruck delivers low-stress successful parties to families across the country through the convenience of hosting at customer’s homes without the mess. In addition to the gaming theater, the company also offers laser tag parties that take place outside of the theater and are completed with specialty missions, challenges and obstacles.

“GameTruck delivers low-stress successful parties to families across the country through the convenience of hosting at customer’s homes without the mess.”

Franchising USA

Since its inception, GameTruck has seen its popularity spike. “Despite the cliche of the lone video game player sitting in a basement,” Novis said. “People really do want to play video games together.”

“I can’t tell you how many times we have heard people come out of our trucks and say, ‘that was so much better than playing online because we were all together,’” Novis explained.

Ideal Franchisee A person who understands how to master a system and is adept at working with equipment, both electronic and automotive, is someone who would

succeed as a GameTruck franchisee, Novis said. Equally important is punctuality, as GameTruck has the reputation of a party service that is guaranteed to show up.

While GameTruck is already in 75 different cities in 25 states, there is lots of room to expand, Novis said. He identified Denver, Kansas City, New England, New York, Connecticut, San Francisco, Oakland, Mississippi, and Louisiana as lucrative areas that GameTruck would like to expand into.

“There’s a lot of room to grow,” he noted.

Training and Support When potential franchisees contact the company, it will do an analysis of the area to determine if GameTruck would be a good fit there financially for both franchisee and franchisor. Once purchased, the new franchisee goes through online training with a Franchise Business Consultant and then in-market training with one of their Gold Standard franchisees.

In addition to this thorough onboarding, continuous education occurs regularly culminating in the company’s annual conference, which has plenty of

“People really do want to play video games together.” networking and training opportunities.

An internal Sales Team (call center) fields inbound calls for all franchisees and the PowerUps team is available to handle administrative tasks for a small fee, freeing up franchisee’s time so they can focus on growing their business.

this is one company that seems to have figured out how to win in the mobile entertainment industry.

For more information visit: www.gametruckparty.com

United Front What really separates GameTruck from its competition, Novis said, is the fact that although it’s a collection of franchisees, the company can rally them together and act as a unified whole when required.

The company’s name brand recognition has earned them the opportunity to participate in national promotional marketing, like the program it just finished with game publisher Activision.

GameTruck has partnered with Activision for the last four years for the launch of each Skylanders game.

With constant praise from parents, exclaiming that GameTruck parties are the easiest parties they’ve ever thrown,

Scott Novis

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Eric Schechterman, Director of Sales and Marketing, Benetrends

Dispelling Current Myths in Franchise Funding As the economic effects of the recession begin to fade, there has been a recent resurgence in interest for Small Business Administration (SBA) loans.

Along with this growth, however, there have also been increased occurrences of lenders making boastful claims that may sound a bit too good to be true.

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Indeed, oftentimes they are too good to be true, but unfortunately you may not find out the real truth until after you’ve signed on the dotted line, and by then it’s usually too late.

To help clear up any confusion and arm you with the facts you need before you make a commitment, here are the truthful responses to five top SBA loan myths that are making the rounds today.

Myth #1 There’s an SBA loan available that does not require any collateral.

Fact: This is false, and the myth was probably based on the fact that there actually is a loan available to every lender that doesn’t require personal collateral.

However, the fact that’s being conveniently omitted is that business collateral is still required, and the amount could be significant.

Although there are a small number of banks that may only require a minimum of 10 percent collateral, most still prefer 20-30 percent. The SBA website clearly states that for all SBA loans, personal guaranties are required from every owner

“Between 2010 and 2014 the average Franchise Turnover Rate was 9.9 percent per year.”

of 20 percent or more of the business, as well as from other individuals who hold key management positions.

Whether a guaranty will be secured by personal assets or not is based on the value of the assets already pledged and the value of the assets personally owned compared to the amount borrowed. In any case, either personal or business collateral will definitely be required, so be very skeptical of anyone who tells you otherwise.

Myth #2 There is a “no doc” or “low doc” SBA loan program available.

Fact: The “no doc” program was discontinued many years ago, and the government has assured us it will not be returning. Don’t believe it when someone tells you that there is an SBA loan program in which no documentation is required—it simply isn’t true.

However, there is indeed a program (the SBA Small Business Loans program, previously called the SLA program) that may be considered a “low doc” loan since the amount of documentation the lender needs to provide to the SBA has been reduced. However, this is not a “special” loan and it’s readily available.

Be advised that the Small Business Loans program is currently the only way a loan under $350,000 can legally be submitted to the SBA, so be wary of any lender who may claim to have access to another way, since they may be exposing you to significant legal risk.

Myth #3 Only certain lenders can provide true working capital lines of credit for businesses such as SBA Express Loans.

Fact: This is false. Every SBA lender in

the United States is able to provide these lines of credit. Benetrends would be happy to assist candidates in finding and working with a reputable SBA lender.

The SBA Express Loan program was created to provide businesses with revolving lines of credit when they may not yet be able to qualify for a standard commercial line. This program is used primarily for startups and newer businesses that do not yet have a strong profit and loss (P&L) statement.

Myth #4 Only one or two companies are confident enough to offer an SBA Loan Guarantee.

Fact: This is false. There are several funding companies that offer an SBA loan approval guarantee. However, there may be slight differences in the language each of them uses, so it is critical that you read and fully understand the fine print.

Benetrends offers a money-back guarantee that states if we accept an application for processing, we guarantee that the application will be approved or we will refund 100 percent of our fee.

Myth #5 There are not many pre-qualification tools available to let me know what I may qualify for.

Fact: This is false. Benetrends and other funding partners have been offering a funding pre-qualification tool for several years. Sometimes called the SBSS or Small Business Scoring Service, most of the reports generated from these tools will simply determine whether or not you are ‘fundable’.

However, unlike other funding partners, the report offered by Benetrends uniquely informs you how much you may both

Eric Schechterman

qualify for and can afford. Benetrends

provides this report to you free of charge.

Unfortunately, myths like the ones we’ve

discussed above have a negative impact on

success by encouraging bad decisions from aspiring entrepreneurs and small business owners. We hope this article has helped

put to rest some common false claims that you may be hearing today.

As always, feel free to contact Benetrends at (866) 423-6387 with any questions you may have regarding franchise funding or small business financing.

Eric Schechterman is Director of Sales and Marketing for Benetrends, Inc. and is a top sales executive with a proven track record of driving multimilliondollar growth and market expansion. He has been a featured speaker at numerous business and franchise conferences, where he has helped to educate entrepreneurs on successful small business funding strategies. Benetrends is located near Philadelphia, PA and is recognized as the authority in franchise and small business financing.

For more information visit: www.benetrends.com

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George Knauf, Senior Franchise Business Advisor, FranChoice

Fall Is the Perfect Time For Your Business Goals to Rise George Knauf

Here we are again, another fall with football, changing leaves, family focused holidays and planning for the future.

Seems interesting that this is one of the busiest times of the year for franchise companies and their candidates, but it does actually make a little sense if you look closely.

We have times of introspection during the year, the first tends to be Spring when Winter is ending and we are all coming out of hibernation excited for the year to come. Fall offers the same opportunity as we start planning for the future.

In our Grandparents’ time this might be when we would be putting up food and storing supplies to get through the harsh

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Winter months, but today we have grocery stores, on-demand TV and comfortable heated houses with gas fireplaces that only require flipping a switch not going out to chop wood. So planning for our financial future seems to be what has taken over for the old habits of just surviving Winter.

In this day and age we tend to see people spending these cooler months tuning up their 401K and stock investment strategies, lining up new health or life insurance, searching for a new job. On the employer side of the fence companies are looking to see how they can finish the year on a positive note and keep their stock prices in line with expectations.

Interestingly the two most common times for corporate downsizings have seemed to be August and December, as companies work to show improved financials.

In our franchise consulting practice we see candidates who are not comfortable with the security of their paycheck, not happy with their jobs, tired of being road warriors and want to make a change going into the New Year. They come in late

Summer through Fall looking to enter the New Year with a sense of pride and happiness.

As it turns out this is a very productive time to do a franchise investigation. The candidates using the bandwidth of the franchisors tend to be a little more serious now, meaning the franchisors have more time to spend with candidates committed to change. Getting more time with the franchisor helps you better understand their brand, training, support system and operations so that you can construct your plan for how you could use that system to pursue your own success just as their current franchisees have.

So, what are your benefits to taking advantage of the end of the year to discover, investigate and move forward with your next step?

Working from that point of introspection and having these quiet periods before, during and after the holidays, you may find that these coming weeks offer you the opportunity to not only look at the concept but to dive into your goals, dreams and needs for the future. This is a great time to do a personal inventory of your skills and strengths (that model I have described in previous articles, contact me if you need help building one).

With a clear picture of what you want your future to look like and most importantly why you want it to look that way, you can add in your model and start to understand what kind of opportunities may make sense for you and your family. These may look very different than the hot sizzling concept of the moment, and more like something that you can see yourself actually doing every day.

You may also find that this is a good time to work the funding plan for establishing

“Maybe this is the year that your financial planning ought to include investing in a business asset you can own, control and grow!” your business into the financial planning we all do at this time of the year. Starting a business is simply part of the portfolio building many people do. You have toiled away in corporate America for years, gone to school and spent time learning from others just so you can say you are one of the best at what you do. At some point it is time to take the training wheels off and stop building someone else’s dream and portfolio with that skill set so that you can build your own.

With that in mind, is investing in yourself with that great skill set any worse than investing in a company you don’t work for and trusting a CEO you have never met?

Maybe it is time to put that 401K to work for you instead of for the benefit of your fund manager. Maybe this is the year that your financial planning ought to include investing in a business asset you can own, control and grow!

Speaking of financial planning and benefits, as you invest in a business before the end of the year those checks you are writing may be for business expenses. Ask your accountant if those expenses create tax deductions, you may be pleasantly surprised about the rather near term benefits of investing in a business before the end of the year!

New Year, New Outlook on Life.

We have time left to make 2014 the stepping stone to your goals and dreams.

Before we hunker down for Winter, shovel snow, go skiing, watch weather reports to figure out how much clothing to pile on and look forward to Groundhog Day to see if Spring is on the way why don’t we take a

little of this introspective planning period to see what your future could look like if you were a business owner?

Would you like to spend Spring building your business in your community instead or sitting in traffic, airports or mind numbing meetings? Have your kids begun to forget your name and you want to be at every game and recital going forward? Do you want to walk away from the stress of wondering if you will get caught up in cost cutting or downsizing as someone in your company tries to make the numbers look good for the stock market?

If your goal for creating meaningful change in your career for the New Year, then the bedrock of that plan has to be built now. The steps are easy and time tested, we have done this for the last 13 Fall seasons. While this may be your first time you are not alone.

Mr. Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both startup and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution.

For more information: Website: www.georgeknauf.com

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Sam Hodges, Co-Founder and U.S. Managing Director, Funding Circle

How a P2P loan can help grow your franchise

Ninety-six rejections.

That’s how many times my business partners and I were turned down for a $100,000 loan to expand our profitable Snap Fitness franchise.

It was 2007 and although capital markets were tight, we thought a small loan would be a fast and easy process. We had five personal guarantors each with four times debt coverage, university educations, real estate operations experience and a

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successful franchise unit generating cash flow. Yet, we could not secure a loan to purchase new equipment to expand our franchise network.

The irony was, when working as successful private equity guys on Wall Street, we had bankers lining up around the corner to give us $100 million loans for high-risk businesses - concepts with no proven business models or financial history to analyze. That’s when I realized it: the American banking system was broken.

Unfortunately, tighter regulations after the financial crisis and outdated underwriting models make it difficult for banks to underwrite small business loans profitably.

According to U.S. Treasury Secretary Jacob Lew, each workday more than 8,000 businesses in communities across the country fail to qualify for a commercial bank loan.1 The Small Business Lending Matrix for the International Franchise

Association Educational Foundation predicts there will be a $1.3 billion franchise lending shortfall for the sixth consecutive year in 2014.2 Spotting the opportunity to build something better, a new wave of lenders have emerged, leveraging technology and innovative credit models to reinvigorate the archaic lending industry and help fill the franchise financing gap. Known as peer-to-peer (P2P) and marketplace lenders, these platforms function essentially as matchmakers for businesses looking to borrow with investors who want to lend – at a price that everyone is happy with. The transactions take place online and completely cut out the long wait times and complexity of dealing with a financial intermediary like a bank or credit union, and the high cost of dealing with a shady payday lender or merchant cash advance.

As the small business financing industry continues to evolve, here are answers to some of the common questions about P2P lending:

How does P2P lending work?

A franchisee interested in a loan would complete a simple online application. The marketplace lender would then evaluate the franchisee’s financial and business information and quickly provide an interest rate and loan offer to qualified applicants. Once approved, the loan is listed on an online marketplace where investors select which loans to invest in and the funds are deposited into the borrower’s account.

Why would a business choose a P2P loan over a bank loan?

Every marketplace is different, but typically franchisees like P2P loans because of their speed to fund, simple application process and fair rates. Banks may offer the most attractive interest rates compared with other financing options, but their cumbersome application process can take as long as four months and they generally don’t lend to businesses that require a loan less than $1 million. Instead,

“Interest rates vary considerably between lenders and depend on an array of factors from the type of financing and term to the creditworthiness of the borrower.” businesses looking for fast cash to seize an opportunity or fill a temporary gap in working capital have traditionally been forced to turn to merchant cash advances where speed comes with a hefty price and opaque lending terms. In contrast, most marketplace lenders boast transparency as a key brand tenant, and allow borrowers to apply for an affordable loan in as little as 10 minutes and, if approved, receive funds in their account in less than two weeks.

What do P2P lenders look at when a business applies for a loan?

Unlike traditional lenders, where credit score is still king, P2P lenders are using big data and technology in a more holistic approach to evaluating a business’ creditworthiness. Although your credit history is still an important gauge of your financial and operational stability, so too are metrics like real-time cash flow, your passion about the market opportunity, and even, believe it or not, your social media presence. Before applying for a P2P loan, ensure your credit score is healthy, get your financials up-to-date and be ready to talk about your experience with credit and how a loan will make a positive impact on your business’ bottom line.

How much does a P2P loan cost and how does that compare to other forms of financing?

Interest rates vary considerably between lenders and depend on an array of factors from the type of financing and term to the creditworthiness of the borrower.

With so many options, it’s vital to do your homework and compare rates. Some lenders quote their loan rates in terms of a

Sam Hodges

discount or fee, which can make it difficult to compare to a lender that advertises annual interest rates. One of the best ways to compare the cost of borrowing is to convert the cost of each loan into an APR (annual percentage rate), which includes both the interest rate and fees that you pay for a loan. Fundastic, an online resource for small business financing advice, features some great calculators to help businesses calculate the APR on different financing options to compare the true cost of borrowing.

Sam Hodges is co-founder and U.S. managing director of Funding Circle, the world’s leading online marketplace for small business loans. He is responsible for overseeing the overall strategic direction and day-to-day operation of the company in the United States.

For more information on franchise loans, please visit: www.fundingcircle.com/us http://www.treasury.gov/press-center/press-releases/ Pages/jl1979.aspx

1

Data from 2014 FRANData Small Business Lending Matrix, as compiled by Franchising World in their “Lending Gap is Diminishing” article, June 2014 issue.

2

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