Franchising usa T he ma g a z ine for franchisees
the dapper
VOL 05, ISSUE 6, apr 2017
$5.95 www.franchisingusamagazine.com
doughnut
Seeking Single-Unit and Multi-Unit Owners The Perfect
Franchise Financing Combination
special
Multi-Unit Franchising LATEST NEWS
FINANCIAL ADVICE FROM THE BANKS
TOP LAWYERS’ ADVICE
The public and policymakers need to understand franchising. Our purpose
@OurFranchise is an industry-wide campaign created to spread the word about the value of franchising and share the stories of men and women just like you, who are leading the way as franchisors, franchisees, and franchise employees. The franchise business model has been proven time and time again to work, but it’s threatened when the public and politicians don’t understand how it operates to benefit local, independent franchise establishment owners and their communities. Putting a spotlight on real leaders succeeding with the franchise model is how we’ll ensure franchising is stronger than ever before.
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Since our launch in June 2016, we’ve reached 1.7 million people through outreach efforts, including events in key cities and states, where we spoke directly with business owners, employees, policymakers, and the media. Additionally, we’ve reached people across America through our website and social media channels, digital advertisements, and the promotion of We the Franchisees on Politico – but there is much more work to do. As a franchisor, franchisee, or franchise vendor, you are a leader in your community – and we need your support, now more than ever.
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By joining @OurFranchise, you’ll get access to exclusive stories and resources that can help grow your franchise business, educate employees at all levels about the franchise business model, and share the economic importance of franchising with consumers. You will also have the opportunity to share your franchise success story with your peers. Visit AtOurFranchise.org Contact Erica Farage, Senior Director of Political Affairs and Grassroots Advocacy and Multi-Unit Franchisee Engagement International Franchise Association efarage@franchise.org (202) 662-0760
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Franchising usa T he ma g a z ine for franchisees
FRANCHISING USA VOLUME 5, ISSUE 6, 2017 president:
Comments
Colin Bradbury. colin@cgbpublishing.com
Publisher: Vikki Bradbury. vikki@cgbpublishing.com
advertising: Vikki Bradbury. vikki@cgbpublishing.com
Editorial Department: managing editor: Diana Cikes editor@cgbpublishing.com
Editorial team: Gina Gill Rob Swystun
Production: usaproduction@cgbpublishing.com
DESIGN: Jejak Graphics. jejak@bigpond.com
COVER IMAGE: The Dapper Doughnut
CGB PUBLISHING Canadian Office: Sidney B.C Canada U.S. Office: 800 5th Ave, #101 Seattle, WA 98104-3102 Sales: 847 607 8407 Editorial: 778 426 2446 www.franchisingusamagazine.com Proud member of the IFA:
Welcome to the April issue of Franchising USA. Do you ever look back fondly at your childhood and remember the things that had you bursting with excitement? Ever stopped to wonder where you would be today if you had taken steps to turn that wide-eyed childhood excitement into a thriving business? Our Cover Story this issue features a story of two brothers who did exactly that. With fond memories of running home with a bag of hot, fresh mini doughnuts from the Schultz’s farm, the Pappas brothers grew up to start The Dapper Doughnut, a thriving hot mini doughnut franchise. “Our branding brings a fresh modern spin on mini doughnuts. We feel the thought that went into creating this brand will really pay off,” said Brian Pappas. Turn to page 10 to learn how this franchise is sharing its success with franchisees and looking for single-unit and multi-unit owners to join their brand. Our Special Feature this month is on Multi-Unit Franchising. The Feature Article starting on page 30 will help
you identify the right time to jump into a multiple franchise situation, because although “it may seem easy to handle, it may not be what you want for your work life balance.” Then flip over to page 36 to learn the Six Signs It’s Time to Keep Growing Your Franchise, or page 42 for advice on Making MultiUnit Franchising Work For You. We also included Lifesavers for Multi-Unit Franchise Owners , which offers advice for multi-unit franchise owners who may still face the conflicts between working “on” or “in” the business. Our popular Veterans Supplement this month offers advice on page 56 for Promoting Veteran Owned Franchises, by retired Master Sergeant and IFA member of the VetFran Committee Kim Ryan. You can also learn Why Military Veterans Should Consider Franchise Ownership on page 58, and Jim Mingey provides us with information on how the VA Supports Franchises for Service Disabled Veterans on page 60. I hope this issue encourages you to reconnect with any old buried dreams and inspires you to keep moving forward with passion and courage. Happy reading!
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
“All our dreams can come true if we have the courage to pursue them.” - Walter E. Disney
The information and contents in this publication are believed by the publisher to be true, correct and accurate but no independent investigation has been undertaken. Accordingly the publisher does not represent or warrant that the information and contents are true, correct or accurate and recommends that each reader seek appropriate professional advice, guidance and direction before acting or relying on all information contained herein. Opinions expressed in the articles contained in this publication are not necessarily those of the publisher. The publication is sold subject to the terms and conditions that it shall not be copied in whole or part, resold, hired out, without the express permission of the publisher.
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Contents
april 2017
On the Cover
10 Cover Story: The Dapper Doughnut Seeking
25 Special Multi-Unit Franchising Feature
Single-Unit and Multi-Unit Owners
36
46
34
16
62 The Perfect Franchise Financing Combination
In Every Issue 06 Franchising News: Announcements from the Industry 30 Feature Article: Multi-Unit Franchising Feature Article 49 Veterans Supplement: News and Information for Veterans in Franchising 64 A-Z Franchise and Services Directoy
Have Your Say 18 Bill McPherson, FirstLight Home Care
14 You Can’t Catch a Whale With a Bamboo Fishing Pole! George Knauf, Senior Franchise Business Advisor, FranChoice 16 6 Tips on Running a Family Franchise Business Mike Reeves, Minuteman Press
34
Expert Advice
22 Back to Basics – What is a Franchise? David Banfield, President, The Interface Financial Group 44 Franchisors as Joint Employers: Strategies for Avoiding the NLRB Matthew J. Kreutzer and Brandon M. Garrett, Howard & Howard PLLC 46 Big Risks, Bigger Payoffs: Balancing the Realities of Franchisee Life Marc Collopy, Co-founder and Executive VP of Sales, Rockin’ Jump
multi-unit FRANCHISING FEATURE
38
62 The Perfect Franchise Financing Combination Paul Bosley, Managing Member, Business Finance Depot
ON THE COVER 34 Lifesavers for Multi-Unit Franchise Owners 42 Making Franchising Work For You 36 Six Signs It’s Time to Keep Growing Your Franchise
26 Feature News 30 Feature Article Franchisor in Depth 38 Penn Station East Coast Subs EXPERT ADVICE 34 Lifesavers for Multi-Unit Franchise Owners Ashley Jeffery. Business Consultant, FrankCrum 36 Six Signs It’s Time to Keep Growing Your Franchise Chris Poelma, President and GM, NCR Silver 42 Multi-Unit Franchising: Making Franchising Work For You Chris Conner, President, Franchise Marketing Systems
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IN EVERY ISSUE
f ra nchising usa
what’s new! The Bow Wow Buddies Foundation Raises Impressive Funds & Kicks Off 2017 with Inspiring Donations
2016 was a year marked by impactful philanthropic growth for the Bow Wow Buddies Foundation. The nonprofit which is the 501(c)(3) arm of Camp Bow Wow®, the nation’s largest and leading Doggy Day Care and Boarding franchise, is dedicated to providing urgent medical care funds to sick and injured dogs who are either homeless or whose parents cannot afford to pay their veterinary bills by awarding grants of up
to $2,500. The Foundation raised over $150,000 in 2016 and provided more than 60 deserving dogs across North America with a new ‘leash’ on life. The brand worked with all facets of the company – its corporate team, franchisees, clients and community donors – in order to reach this charitable milestone. One 2016 donor was Hannah Okel of Waukesha, Wisconsin, whose fundraising story is characteristic of the altruistic
Camp Bow Wow community. For Hannah’s tenth birthday, she asked family and friends to make donations to the Bow Wow Buddies Foundation in her name and in total raised $4,300. Donations to the Bow Wow Buddies Foundation often originate from instances like Hannah’s, where Camps inspire local community members of all ages to better the lives of furry friends near and far. www.bowwowbuddies.com
ASHEVILLE REALTOR BUILDS USA’S 1ST SECOND HOME PROPERTY MANAGEMENT COMPANY FRANCHISE WITH PRIME TERRITORIES AVAILABLE A leader in the second home property management business, Eye On Your Home specializes in watching over and caring for second homes for absentee owners. It’s a unique opportunity to tap into and profit from this huge industry. Eye On Your Home is the country’s FIRST second home property management company that is a trademarked brand for the franchise industry.
Franchising USA
“This is a Blue Ocean opportunity not filled,” franchise developer Melissa Rulli said. “Absentee owners are looking for a company with consistent service, systems, and core values that support their valuable investment. Now with Eye On Your Home
territories available nationally, they can have that kind of support.”
Eye On Your Home supports all home
ownership, from vacant for sale, homes in trust, local owners, builders and VRBOs. For franchisees, Eye On Your Home is
a proven, successful company that will train, mentor, and support a franchisee with knowledge, systems, training and experience.
www.EyeOnYourHome.net
Meditation for the Modern World: Current Meditation Now Franchising
Current Meditation, a Phoenix-based meditation studio, will begin franchising this spring, becoming the first meditation franchise concept in the U.S. Current Meditation focuses on “meditation for the modern world” to bring the practice of meditation mainstream, setting the new standard for the health and wellness industry. Its innovative business model solely provides meditation classes and creates a welcoming space that provides accessibility, convenience and ease to the ancient practice.
Current Meditation has taken a different approach to the design of its space and curriculum to make meditation more accessible to a wider audience. Its curriculum is designed to integrate the scientific research backing the physiological and cognitive benefits of meditation, while making the practice approachable to individuals who might not have otherwise incorporated it into their wellness routine. Offering guided meditation group classes, similar to traditional group fitness classes, Current
Meditation’s instructor-led sessions
feature new ways to practice, including its signature Aerial Meditation.
Created by three families who are
franchising pioneers in Massage Envy,
European Wax Center and Amazing Lash Studio, Current Meditation aims to help
people of every skill level experience the
benefits of meditation and achieve mental fitness.
www.becurrent.com
IFA Franchise Education & Research Foundation Announces Winners of 2017 FRANSHARK Competition
The IFA Franchise Education & Research Foundation recently announced the winners of its 2017 FRANSHARK competition, sponsored by the Frederick A. DeLuca Foundation and SUBWAY®, which was held at the International Franchise Association 57th Annual Convention in Las Vegas.
The four entrepreneurs — who hailed from the United States, Canada, Mexico and Australia — were selected by a panel of judges from 18 winners of the NextGen in Franchising Global Competition, which engages young entrepreneurs seeking careers and business opportunities in the franchising industry. As part of the FRANSHARK competition, each participant pitched their business to a panel of industry experts and nearly 4,000 convention attendees for a chance to win cash prizes ranging from $5,000 ¬– $10,000.
This year, Jennifer Turliuk, founder of MakerKids, took home first place, which included a $10,000 cash prize. David Blue, founder of Blue Moon Estate Sales USA, and David Lindsay, founder of Salts of the Earth, each received $5,000. The judges also awarded a $5,000 prize — sponsored by Dave Mortensen and Anytime Fitness — to Alejandro Souza, founder of Pixza, a social enterprise franchise. For more information on the NextGen in Franchising Global Competition and 2018 competition dates, please visit http://nextgenfranchising.org.
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what’s new!
FirstLight Home Care Now Offers Services in North Dakota
FirstLight Home Care, a leading and award-winning national provider of non-medical home care services is open for business for the first time in North Dakota. “Our home health service provides compassionate, experienced caregivers for those in need of assistance in Minot, North Dakota and surrounding communities and we are honored to announce our first location in the Great Plains region,” states Bill McPherson, executive director of franchise development. The new FirstLight Home Care is backed by a strong support system that provides the tools and proven processes to offer superior non-medical home care across communities nationwide. New owners of FirstLight Home Care, Mike and Kristina Larson are enthusiastic to launch their new franchise business in an area where they feel will most benefit those in need of help around their home.
Fetch! Pet Care® Prepares for Next Stage of Strategic Growth
Fetch! Pet Care, Inc., franchisor of the nation’s largest provider of professional dog walking and pet sitting services, has announced James Mowery will assume responsibility for system-wide growth and maximizing franchisee performance throughout the franchise system as President. James is active in the International Franchise Association and earned the Certified Franchise Executive (CFE) designation in 2007. He currently serves as a member of the Institute of Certified Franchise Executive Board of Governors to enhance and promote the highest levels of quality training and education in the franchise industry. “James has been a key part of our success and we are thrilled to promote him to President,” said Fetch! Pet Care’s Chairman Harry Loyle. “His accomplishments in strategic planning, integrating teams, implementing innovative technology as well as a keen eye toward process improvement align perfectly with what is needed to fuel the next stage of growth for Fetch! Pet Care.”
“We are ready to meet the needs of the community by offering the highest levels of service in all that we do,” states Mike Larson. “We are people helping people and we genuinely care about our clients, which is extremely rewarding,” adds Kristina Larson.
Concurrent to Mowery’s appointment, Paul Mann, the Founder of Fetch! Pet Care, will assume responsibility for developing marketing strategy, assisting franchisees implement local territory marketing initiatives, developing national campaigns and partnerships as well as franchise development activities to drive brand and unit growth as Chief Marketing Officer.
www.firstlighthomecare.com/home-healthcare-woodbridge
www.fetchpetcare.com
Franchising USA
Modern Acupuncture Franchise Launches, Adds World Renowned Acupuncturist to Team World renowned acupuncturist and educator Robert Doane, has joined Modern Acupuncture™, the first health and wellness franchise to deliver the natural health and cosmetic benefits of acupuncture to the masses through first class retail locations nationwide. Doane, EAMP, L.AC, has been practising Chinese medicine for 19 years and trains on his techniques around the world. The first Modern Acupuncture location opened in Scottsdale, Ariz. in January 2017 and the brand has already awarded 145 regional developer licenses and 16 franchise licenses across the U.S. in Arizona, Colorado, Florida, Georgia, Louisiana, Nevada, North Carolina, South Carolina and Texas. Modern Acupuncture combines a healing
form that has been validated by thousands of years of practice with a modern, clean and spa-like environment. The enhanced acupuncture experience at Modern Acupuncture does not require the removal of any clothing or needling at the site of the pain, yet accesses full-body health.
All of the brand’s acupuncturists have
advanced degrees in Chinese medicine
from an accredited school, are certified in acupuncture in their respective states and are further trained by Doane.
www.modernacupuncturefranchise.com
Nominations Open for 2017 Franchising Gives Back Awards The IFA Franchise Education & Research Foundation announced it is accepting nominations for the 2017 Franchising Gives Back Annual Awards. In partnership with Roark Capital Group, the third annual awards program salutes the best, most innovative community leaders and charitable programs nationwide.
Auntie Anne’s and Alex’s Lemonade Stand Foundation; Arby’s and Share Our Strength / No Kid Hungry; CertaPro Painters and Homes for Our Troops; and Marriott International and Wounded Warriors.
the IFA’s Franchise Action Network
Winners will be honored at an awards celebration and dinner on Sept. 11 during
www.franchisinggivesback.org or email
Annual Meeting in Washington, D.C.
Individual tickets and table sponsorships are available.
For more information, visit Gionne Jones at gjones@franchise.org.
Now through June 12, current IFA members and/or any of their affiliated organizations are invited to visit www. franchisinggivesback.org/awards and nominate their company’s charitable activities performed between January – December 2016. Gold and Silver Winners will be selected in five categories: Spirit of Franchising Award, The Newcomer Award, Enduring Impact Award, Support Our Veterans Award, and Innovation and Impact Award. Past winners have included Edible Arrangements and Edible Cares;
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cov er sto ry
T he Dapper Doug hnu t
Mini Doughnut Franchise Seeking Single-Unit and Multi-Unit Owners As boys, franchise veterans Jeff and Brian Pappas grew up going to Schultz’s farm in Armonk, NY to grab a hot fresh doughnut. The line would always be around the building no matter what time of day. They’d buy a dozen doughnuts and before they got back home they’d be gone. Schultz’s farm is no longer around but the memories of those incredibly fresh doughnuts remained.
Franchising USA
Fast forward to 2015 when Brian and Jeff decided to find a business partner who was already running this business (hot mini doughnuts) successfully. They discovered Gabriel Wiesen and Jimmy Nuccio of Beavers Coffee & Donuts, who had been operating an award winning mini doughnut business in Chicago for 4 years. They got together and all shared this incredible passion for fresh doughnuts made to order. The four of them soon decided to join forces and establish “The Dapper Doughnut” to launch an aggressive national and international single and multiunit owner franchise program targeting upscale high volume malls, hotels, sports arenas, strip malls, etc. In addition to their franchising efforts, the Pappas brothers along with Gabriel and Jimmy will be opening corporate units in major hotels/ casinos in Las Vegas and other locations around the U.S. Combined, the Pappas brothers have over 60 years experience in the franchise
“If you don’t have happy franchisees making money the brand will go nowhere, and that’s why we focus tremendous fire power on support.” - Jeff Pappas industry as franchisors, having developed several very successful franchise concepts. As a result of this extensive franchisor experience, Brian and Jeff recognize the importance of establishing a strong franchisee support system. Jeff Pappas, COO stated, “If you don’t have happy franchisees making money the brand will go nowhere, and that’s why we focus tremendous fire power on support. This support takes our owners from ground zero to opening day and beyond of course. We offer both operational and marketing support from the get-go. In this era of digital marketing that has become very sophisticated, we recognize that most owners are not going to have that skill set, so we provide not only the knowledge of how to run a successful, ongoing digital marketing program, but we also set it up
for them and monitor it very closely.” Laura Abel, the Company’s CMO has remarked: “We certainly recognize the importance to select the best technology platforms at the corporate level that tee us up to deliver the Big Data available today. The analysis of this data will enable us to make the best business decisions for our franchisees. In addition, franchisees will receive cutting edge digital and integrated media marketing training, navigation and ongoing best practices. These tools are dynamic, as the digital media landscape is in a constant state of evolution. Our ultimate goal is to help guide their businesses for long term success at their local community levels. It’s the consumer who drives business with digital and social media channels today. Engagement and conversions are our key metrics. We have
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T he Dapper Doug hnu t
a highly experienced and skilled staff who are dedicated to the success of every franchisee. Furthermore, the Company has made a significant investment in its branding which is reflected in the website, design of the retail units (200 sq. ft. and 1200 sq. ft.), food truck, packaging and more. Brian Pappas stated: “Our branding brings a fresh modern spin on mini doughnuts. We feel the thought that went into creating this brand will really pay off.” The Dapper Doughnut™ franchise model incorporates several profit centers, and all are included in one franchise fee: • Retail location, which can be as small as 200 square feet or smaller using our kiosk (for high traffic areas such as train stations, airports, malls, etc.), and up to 1200 square feet for operating in strip malls; • Food truck which can be eighty percent financed in most cases; • Catering. Brian Pappas, CEO stated: “It was the catering component that sold me on wanting to develop this franchise model. When I discovered from talking with the Beavers Coffee & Donuts owners, Gabriel and Jimmy, that they
Franchising USA
“Our branding brings a fresh modern spin on mini doughnuts. We feel the thought that went into creating this brand will really pay off.” - Brian Pappas were generating hundreds of thousands of dollars a year from catering I was sold on this concept. Weddings, corporate events, bar/bat mitzvahs, private parties, charity events and more really makes this a great business opportunity whether it’s a retail unit or a food truck.”
Metrics of The Dapper Doughnut™ Franchise The “doughnut industry” is a billion dollar business with many well-known players. However, most competitors offer traditional sized doughnuts and large footprints. The Dapper Doughnut™ doughnuts are mini doughnuts and the number of competitors offering mini doughnuts in the market place compared to traditional size doughnuts is minuscule, which presents a great opportunity for The Dapper Doughnut™ franchisees. In addition to this, the food cost (excluding packaging) averages below 10%, which is virtually unheard of in the food and beverage industry.
Considering that the cost to make a mini doughnut is less than $.03 and the average retail/food truck price of the mini doughnut is around $.60, one can easily see that the profit margins are incredible. The average cost for a mini doughnut for catering orders is lower than $.60, but the volume is significantly higher. “It is not unusual to fulfill an order of 1000 doughnuts or more,” says Gabriel Wiessen. As stated above, the Company is seeking both single-unit and multi-unit owners. The Company began franchising in July of 2016 and currently has 7 franchisees with several area developer deals in the pipeline, including a five-unit deal with a hotel chain, and at least 3-5 more single unit franchisees that the Company expects to close before the end of April. The Company expects to open its first corporate location in a major hotel/casino in Las Vegas in May of this year. For more information about The Dapper Doughnut contact Brian Pappas at 904-825-0873. thedapperdoughnut.com/franchise
Your Golden Opportunity Midas is a globally recognized leader in the tire and automotive service industry for nearly 60 years. We are looking for motivated people to become part of our Midas franchise family! Build your long-term success with a brand name customers know and trust. • Powerful local and national marketing $FFHVV WR QDWLRQDO µHHW DFFRXQWV WR KHOS \RXU EXVLQHVV JURZ • Ongoing training and support • Excellent point of sale and shop management systems
This advertisement does not constitute an offer of a franchise. A franchise offering can be made by us only in a state if we are first registered, excluded, exempted or otherwise qualified to offer franchises in that state, and only if we provide you with an appropriate franchise disclosure document. Franchises may not be available in all states.
midasfranchise.com 800-365-0007
ex per t advice
George Knauf, Senior Franchise Business Advisor, FranChoice
You Can’t Catch a Wha With a Bamboo Fishing Every so often someone says something to you in a business discussion that is a WOW Instant learning epiphany moment. Recently I had one of those conversations‌ The context was that I had a successful business owner candidate looking at what might have turned out to be one of the biggest deals done in the franchise industry this year. What made it interesting for the candidate was that it was hundreds of under-performing units in a simple streamlined operational space and he had the solutions to their problems.
Franchising USA
He, in this case, was the whale. The candidate was more than qualified to run the businesses being acquired, they had an infrastructure that would be an instant solution to the problems that this pool of locations was having and the seller (a public company that will remain nameless here) would experience huge financial benefits in this problem being solved for them. Not only was it what the executives in the selling company wanted, it was a potential for success that their board of directors had demanded. How could it possibly go wrong? When big opportunities are discussed it often comes down to the buyer getting very cautious that causes a deal to fall apart no matter how good it might look. Big deals cost big money and that can be scary, even to the most experienced operators.
Even with all the perfect pieces on the table this deal died, but it wasn’t the buyer that took it there. The core of the challenges seemed to be that the seller was used to dealing with candidates in one to three unit franchise packages, not hundreds of units on one contract. The seller is a very respected franchise company with a lot of happy franchisees, I have known their key franchise development executive for nearly 15 years and he is a solid professional. These under-performing units were company stores that essentially got lost in the woods, but there are many more that are performing just fine. In theory all they needed was time and attention to turn around. In terms of a sales process, the leap to selling hundreds of units to one buyer can be much like a high school football team
of deals done and it was my bad for not realizing where the disconnect would happen. So given that very few people reading this are involved in franchise development, how does this apply to you? As a franchise owner you will look at a myriad of ways to build your business. What if you buy a heating and air conditioning franchise and have potential business in residential accounts and commercial? To pursue those commercial accounts you may need a different license for those large commercial units. You will have to put together competitive bids and sell them. If the franchisor is solely focused on residential business, you may not have the resources to go after those big commercial fish.
ale g Pole! that finds themselves playing against the New England Patriots. In trying to figure out how to help the buyer and seller get back on track, I called one of my mentors and the first thing he said was “In all of my years in this industry I have learned the hard way that you can’t catch a whale with a bamboo fishing pole.” The clouds parted, the light shown through and the choir sang. That was it! Not a fix for the problem but rather clarity on the real issue. The buyer was right for the deal, the deal was right for the buyer but the seller’s process to get it done... Bamboo Fishing pole. It doesn’t mean the seller or their franchise offering is bad; it means they simply did not have experience in getting these kinds
If you go into an automotive repair franchise, say auto body, you may want to know that the franchisor has experience capturing insurance business and even be able to funnel that revenue to you. If you want to open a portfolio of restaurants you will need a lot of support with site selection, lease negotiation, construction oversight and assistance with grand opening hot buttons like training staff and marketing. Working alone makes it hard to move fast enough to grow a robust restaurant portfolio. Every kind of franchise out there has “big fish” opportunities. You will want to make sure that the franchise is more than just a brand; make sure they have the infrastructure and support you will need to go after those big opportunities. Even if you are capable of handling your part of the process with big fish you will need the system behind you to be ready to handle their role. I have had an ongoing advisory conversation with a very young restaurant franchise company. They currently franchise in two states and they are looking to build a national footprint. In their discussions they are learning what they need to provide franchisees for their success and it is as eye opening for them, as it is for every new franchise company. They are learning what they need to be
George Knauf
the right machine for their franchisees to pursue success with. When it comes time to go whale hunting in your business, whatever that means within your industry, you will want to make sure that as soon as you throw your line in the water that you have the right tools to get the job done. Everyone wants big revenue, big accounts and big deals. Pursuing them without the right tools could be frustrating at best. One other small bit of advice: a bamboo fishing pole will catch fish. It may not be a bad idea to get good at fishing for those smaller fish before going after the big fish. Even when you do go whale hunting make sure that you or your team are fishing for the smaller ones all along the way; they pay the bills. What is your success story? Let’s go find it! George 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. Contact the Franchising USA Expert George’s Hotline 703-424-2980. www.myperfectfranchise.com
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ex per t advice
Mike Reeves, Minuteman Press
6 Tips on Running a Family Franchise Business Along with my father Dan Reeves, I run two Minuteman Press franchises in Burnsville and Chanhassen, Minnesota. My dad has been in the printing industry for over 35 years, and he is my mentor as well as my business partner. Franchising USA
Over the past two years, I have spent a significant amount of time working with my father as well as getting out there in the community and growing our businesses. Here are my top 6 tips to running a family business:
1
Learn to separate your business relationship from your personal relationship. My dad and I have learned to leave anything relating to the business outside of our personal lives. It is important for us to have that separation and the last thing we want to do resort to talking shop all of the time. During business hours, we have our professional back and forth and do what we need to do
as Dan and Mike. Outside the office, we are dad and son.
2
Give each other professional space and breathing room while at work. A family business is different from other businesses because of the close relationship you have with the people involved. Even during work hours, it is important to give each other a little bit of professional space. Organize the day so that you each get some breathing room, and take full advantage of those breaks so that you go back to work recharged, refreshed, and ready for the next tasks at hand.
“Ultimately, having the chance to run a family franchise business is truly a rewarding experience. The keys are to work hard, stick together, stay open, and separate the personal from the professional.”
4
With a family business, providing outstanding customer service is a must to stay in business. When you own a family business such as ours, you understand that you are the face of your brand. As much as it helps being part of a franchise with a well-established brand like Minuteman Press, it is what we do as Dan and Mike Reeves that can make all of the difference in the world for our customers. We take pride in making sure that our customers are treated respectfully and that their orders are fulfilled with the type of customer service they deserve. Without service, there is no customer.
5
3
Marketing is your friend. In our industry, we have the privilege of being in the business of design, printing, and marketing. Many family businesses do not understand the importance or the growth potential that can come from marketing. Whether you own a restaurant, barbershop or really any business, it is important to develop a marketing strategy that will work for you. Get out there and network with other professionals, take advantage of the vast amount of resources such as printing, direct mail, and Internet marketing, and be consistent with following up on initial points of contact.
Don’t be afraid to share your story. Sharing your story with your customers creates a more human connection with them. As a business or franchise owner, chances are you have a great story to tell about how you got into business. That journey is an authentic part of who you are, and it is always helpful to be genuine and for customers to get to know you as a person. You can even include a short bio or “history of” page as part of your marketing presentations, and that could go a long way in cultivating not just another lead, but a true fan of you and your business.
6
Think about what you’ve learned from each other and share those lessons learned. I am very lucky to have had my dad as a mentor. He has also learned lessons from me, such as new ways to approach customers or market the business. I think it is important for members of any family business to think about the lessons they have learned. These are valuable pieces of advice that can only make you better at your jobs. It also helps shape your collective vision moving forward.
Mike Reeves
For example, the three biggest lessons my dad has taught me over the years are: 1. Ask the right questions. 2. Do not just be a hunter. Be a gatherer. 3. When your passion shines through your work, people see and respect that. I have taken all of my dad’s lessons to heart and try to carry them with me wherever I go. He has given so much of his life to the printing industry and providing for us, and his wisdom is always appreciated. Ultimately, having the chance to run a family franchise business is truly a rewarding experience. The keys are to work hard, stick together, stay open, and separate the personal from the professional. Mike Reeves was born and raised in Minnesota. He is the Director of Sales, Marketing & Social Media for the Minuteman Press franchises in Burnsville and Chanhassen, MN, which he operates with his father Dan Reeves. In 2016, Mike won Ambassador of the Year for the Burnsville Chamber of Commerce and was nominated for the Business Person of the Year for the Prior Lake Chamber of Commerce. www.minutemanpressfranchise.com
Franchising USA
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H AV E YOU R SAY
Bill McPherson, FirstLight Home Care
Happy employees
hold the keys to successful franchises Franchise owners deal with many factors that affect profits and abilities to grow market share in today’s business environment, including changing economic forecasts and issues related to overtime pay and minimum wage rates. Franchising USA
One significant factor that hinders the long-term growth of a franchise is employee retention and turnover. Recent statistics indicate that full-time employees receive, on average, a 10 percent pay increase when they change jobs. Retaining employees is crucial for businesses.
shortages of available workers — are an
The costs of replacing employees continue to increase in accordance with these trends. The Society of Human Resource Management reports the cost of replacing, hiring and training a full-time employee is equivalent to six to nine months of an employee’s salary. These costs — and
industries, leading to crisis-level demand
increasingly serious issue for those in the health care industry.
Health care worker retention The turnover rate for employees in health care is one of the highest across all
for workers. About 70 percent of home health care administrators identified
shortages in available caregivers as one of the biggest threats to growth of their
businesses, according to a 2016 study by Home Care Pulse.
“Investments in employee-retention programs save money in the long run by removing costs associated with recruitment, hiring and training.”
The state of home health care FirstLight Home Care offers innovative programs to retain caregivers. An average of 10,000 people each day turn 65 years of age; the number of Americans 65 or older will increase to 18 percent of the United States population by 2030. The demand for employees to care for this population will grow exponentially. While the home health industry is one of the strongest employment sectors in the country (expected 2010-2020 according to the Department of Labor), turnover rates in the home care industry are often cited between 50-70 percent and higher.
Improving retention rates Caring for others requires dedication and commitment. Reductions in staff turnover occur when businesses invest in their employees. Training programs, higher compensation and flexible scheduling reduce churn and allows retention of the best employees. Investments in employee-retention programs save money in the long run
by removing costs associated with recruitment, hiring and training. Other ways include: • Hiring employees instead of using contractors Many home health care companies fill a need for caregivers by using 1099 contract workers. We have found that these workers often feel they are not a part of a team. Hiring them as employees cultivates a feeling of teamwork within the company. • Health benefits for employees Compensation for home health care workers is often at the lower end of the pay scale. Providing health benefits for employees, many of whom are often motivated by a desire to help others, can add value and assist retention programs. • Offer a living wage, not a minimum wage The debate on minimum wage vs. living wage should be monitored by franchise owners. Offering living wages, instead of just minimum wage, helps franchisors retain top talent. A bonus program
Bill McPherson
based upon your success also will drive more talent to your team. • Internal recruiting Highlighting the work of your most exceptional employees is an important step to retain employees and promote loyalty. The opportunity to apply for, and be rewarded with, higher positions within the company is used as an indication of the value placed on our franchise employees.
Franchising USA
H AV E YOU R SAY
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H AV E YOU R SAY
Bill McPherson, FirstLight Home Care
• Continuing education and training opportunities Employees that are given the opportunity to grow and deploy their skill sets are often the most loyal members of your team. Training your employees and updating their knowledge will add value to your business. Additional training will help employees manage new responsibilities within your organization. They will also be able to meet more complex work requirements, adding additional value to your company. • Flexibility for employees Home health care workers often provide care for their own family members, as well as clients. A lack of schedule flexibility is often cited as a reason why home health care employees leave positions. Offering flexibility for employees to meet their personal obligations builds loyalty to your business. • Work-life balance A career as a caregiver can be extremely difficult. Workers in the industry are often susceptible to physical and
Franchising USA
“Training programs, higher compensation and flexible scheduling reduce churn and allows retention of the best employees.” emotional burnout, which is why it’s important to help your employees manage their work-life balance. Allow your caregivers time away from work to tend to their own emotional and physical needs. Provide counseling services to manage emotional stress and encourage them to take time off. This will help foster trust with your employees, and encourage a sense of belonging. • Plan their career paths Workers often change companies when they encounter barriers to their professional growth. Help your employees plan and define paths to career goals within your business. These goals can be finance-focused, or management-based, and should be designed to plan a future with your company. The results of the initiatives put in place for our franchise locations have been
exceptional. Last year FirstLight Home Care had an average turnover rate of 15 percent for our caregivers — one of the lowest rates in the home health care industry. While your own industry may not face the same turnover rates as the home health care industry, finding ways to make your employees feel valued, important and a part of your team can offer outstanding results for your franchise — and your bottom line. Bill McPherson is the executive director of franchise development at FirstLight Home Care, which has been awarded Forbes Top Franchises; Top 500 franchise by Entrepreneur; and Top Franchisee Satisfaction and Top Veterans Franchise by Franchise Business Review. Contact him at bmcpherson@firstlighthomecare.com to learn more about the senior care sector.
Own your own sandwich shop. Franchise opportunities are now available locally and worldwide with new and existing shops. If you enjoy working with people, leading your own team, learning new skills and are ready for an exciting new challenge, contact us today! The Subway® franchise fee is $15,000 which is included in the total investment. The total investment can range from $116,000 to $263,150+ (See Franchise Disclosure Document for further details.) Restaurant owners should have half of the total investment in cash and finance the other half. Please visit subway.com or call Ralph Piselli, Franchise Sales Manager: 800.888.4848 x 1312 .
SUBWAY® is a Registered Trademark of Subway IP Inc. ©2017 Subway IP Inc. This is not an offer to sell or solicitation of an offer to buy. Offers are only made in states where we have complied with applicable law and an offer to sell or a solicitation of any offer to buy a franchise shall be made solely by a Franchise disclosure document. All financial information is as shown in Section 19 of the FDD to be disclosed to potential Franchisees during the awarding process.
ex per t advice
David Banfield, President, The Interface Financial Group
Back to Basics What is a Franc There is little doubt that franchising is on an exponential growth curve.
Not only has franchising grown in terms of industry diversity, but the franchise model has also grown as new industries enter the franchise arena.
Over the past few years, the franchise industry has expanded from its once ‘fast food’ and ‘automotive services’ label to a multi-faceted industry where almost anything can now be franchised. If you check out any franchise portal you will see literally hundreds of franchise offerings – some estimates indicate that in North America alone there are in excess of 3500 franchise opportunities available.
Typically, franchising was always related to a storefront operation in a high traffic location and ‘location, location, location’ was always the key phrase for success. In today’s franchise environment the storefront is quite often a secondary situation and home-based, and even cloudbased franchises are becoming extremely prominent. ‘Location, location, location’ has now in many instances been replaced
Franchising USA
by ‘support, support, support’ as the keywords for franchise success. Many first-time franchisees are individuals transitioning from the corporate world into self-employment and entrepreneurship. The lure of a home-based office, after possibly many years of commuting, has an enormous appeal and franchising has adapted to accommodate that situation. Technology has also played a significant part in boosting the home-based model. Numerous franchise opportunities can now be run quite successfully with a computer and a telephone, and the need for
– chise? more expensive equipment and premises, and sometimes staff have been eliminated. Notwithstanding all of these changes which, in the main, have worked for the benefit of the franchise industry, the basic underlying model has not changed over the years. A franchise is still only a system. However, it is a system that has certain noticeable characteristics. Those characteristics include the fact that the system of the underlying business can be written down and replicated in numerous different environments. Invariably a franchise also represents an in-demand product or service, albeit sometimes in the short term, and the franchising aspect accommodates a rapid distribution opportunity. Regardless of whether a franchise is home-based, a storefront, a manufacturing operation, etc. the underlying element is still a very specific system. If all franchises are reduced to the common denominator of only being a system, what sets one franchise above another? In virtually all franchise sectors there are a large number of franchise opportunities to choose from. In the fast food sector for example, hundreds or even thousands of opportunities still exist, and the diversity and variety also continues to expand. A similar situation extends with automotive services, print shops, sign and graphic stores, and so on. Quite often one of the elements that a would-be franchisee should consider is that of history. A
David Banfield
“Regardless of whether a franchise is homebased, a storefront, a manufacturing operation, etc. the underlying element is still a very specific system.” franchise that has some solid history will naturally have some extensive track record that as an organization it can share with their franchisees, which in turn should assist a new franchisee in developing and promoting their business in a rapid manner. Therefore, when seeking out a franchise opportunity, an individual should explore the background and longevity of the organization. A franchise organization that can demonstrate a good base of franchisees and many years of operation will certainly be able to bring a mature model to the marketplace. Because a franchisee is acquiring a system, they expect that system to be as mature and well-tuned as possible. It is only history that can develop that fine-tuning. Regardless of the franchise model that an individual may explore, a solid due diligence approach is always of paramount importance. A franchise is not something that can be purchased ‘off of the shelf’, but is usually considered an award to an individual who, in turn, also brings suitable history and experience to the
franchise organization. Franchisors look at potential franchisees and expect them to have a suitable and appropriate background for the franchise in question. What is a franchise – it is a system that has been tried and tested and proven. Wouldbe franchisees should therefore always look for the well-tried and tested aspect in any model that they are considering. When it comes to a mature business model, a franchise with solid positive history should always stand out from the crowd. Age and experience are without doubt key elements for any successful franchise. David Banfield is the President of The Interface Financial Group, a position that he has held for over 20 years. He has been instrumental in starting Interface as a franchise opportunity and building it to its current international status. Prior to his involvement with Interface, he worked extensively in the banking, credit and factoring financial service areas. www.interfacefinancial.com
Franchising USA
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what’s new! Minuteman Press Franchise in Manhasset, Long Island, NY Moves to Brand New Facility
Old Chicago Pizza & Taproom Releases 2016 Success Report
Old Chicago Pizza & Taproom, a leader in casual dining known for its vast craft beer selection, delicious handcrafted The Minuteman Press franchise in Manhasset, Long Island, NY has moved to a new facility at 125 Plandome Road. Family owned by father and son franchise team Les and Michael Forrai since 1996, Minuteman Press in Manhasset offers essential design, printing, marketing, and branding services to today’s business professionals. “Moving to our new space was a tremendous opportunity that will benefit our customers,” says Michael. Les and Michael purchased the building and remodeled the facility to optimize the customer experience and maximize functional space. Les Forrai spent sixteen years as part-owner of a limousine business. With Minuteman Press, Les always felt like he was in good hands: “Minuteman Press International has always been there for us. The web presence, marketing programs business management software and advice has been something that would have been very difficult to accomplish on our own.” Michael Forrai began working in the business while still in college. He credits Les for being a great mentor and business partner. Today, Les and Michael own three Minuteman Press franchises in Long Island: Manhasset, Valley Stream (2008), and Island Park (2014). www.minutemanpressfranchise.com
Franchising USA
pizza and distinctive taproom fare, announced it achieved record high system-wide revenue in 2016, reporting an 11 percent increase from 2015. Additionally, Old Chicago accelerated its national expansion
efforts with the signing of four franchise development agreements that will bring 20 new locations to markets including Texas,
Oklahoma, Arkansas, Missouri, Montana, Wyoming, Michigan and South Carolina. Old Chicago experienced record-breaking success in 2016 reporting 10 consecutive quarters of positive
transaction and average unit volume of $2.8 million, resulting in $263 million in system-wide revenue.
Old Chicago also launched its new restaurant prototype in 2015. The continued roll-out of this new prototype paired with Old
Chicago’s commitment to bringing the most expansive lineup of
world-class craft beers has helped catapult the brand to its current level of success.
This year, Old Chicago has plans to develop nearly two-dozen
new restaurants across the country, targeting growth in markets such as Florida, Georgia, Illinois, Indiana, Mississippi, North
Carolina, South Dakota, South Carolina and Texas, among others. www.ocfranchising.com.
Tropical Smoothie Cafe Announces Opening of 50th Location in Michigan have successfully helped to expand the brand’s presence throughout Michigan since 2005.
Over the past three years, Tropical Smoothie Cafe has sold over 450
franchises nationwide. The opening of this new location in Portage continues
to solidify Michigan as the third largest market for Tropical Smoothie behind
Florida and Virginia. On the heels of one of the strongest years in the company’s
20-year history, the award-winning brand successfully propelled its expansion
and grew its presence in key markets
nationwide, including Charleston, South Carolina; Albuquerque, New Mexico;
Dallas, Texas; and Southern California. This year, the company plans to open Tropical Smoothie Cafe, the leading fast casual cafe concept known for its better-for-you food and smoothies with a tropical twist, announced it will open the state of Michigan’s 50th location in Portage.
This restaurant will mark the second location in the region for husband-andwife franchisees Eduardo Ramos and Corina Groeger, as well as a milestone achievement for area developers Craig and Dianne LeMieux, and Debbie King, who
100 restaurants nationwide and currently has franchise opportunities across the U.S. in markets such as Indianapolis,
Nashville, Houston, Dallas, Cincinnati and Minneapolis, among others.
www.tropicalsmoothiefranchise.com.
Longtime Always Best Care Franchisee Expands Services to West Los Angeles Area has provided award-winning senior care services to Torrance, Palos Verdes, Lomita, Harbor City, Redondo Beach, Hermosa Beach and San Pedro since 2010, and will now serve Brentwood, Santa Monica and surrounding communities.
Always Best Care Senior Services, one of the leading senior care franchise systems in the United States, announced that longtime franchisees Carrie and John Bianco expanded their business to the West Los Angeles area. Always Best Care of West Los Angeles
As California natives, the Biancos recognized a growing need for dementia education and training in the state, so they developed Always Best Care Academy, a 14-week course to help groom their caregivers. Carrie and John also established Concierge Care, a resource for all areas where clients may need additional assistance, including transportation, care
management with degreed gerontologists, family support and more. Founded in 1996, Always Best Care delivers its services through an international network of more than 200 independently owned and operated franchise territories throughout the United States and Canada. By working with case managers, social workers, discharge planners, doctors, and families, Always Best Care franchise owners provide affordable, comprehensive solutions that can be specifically matched to meet a client’s particular physical or social needs. www.franchisewithalwaysbestcare.com
Franchising USA
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what’s new!
Juice It Up! Launches Enhanced Franchise Website as a Resource for Investors on behalf of franchisees and fueling the brand’s nationwide expansion. The new website includes startup costs and financial performance, exploratory videos and interviews, franchisee testimonials, and Juice It Up!’s position within the booming raw juice and smoothie segment. “The broader market is looking for a solid, owner-operated type of business with a low-entry cost that might be on a scale of 1-3 units,” said company CEO, Frank Easterbrook. “Juice It Up! is perfect for small partnerships, family businesses and, of course, we welcome larger investors who are interested in diversifying their franchise portfolio with a thriving lifestyle brand.”
Juice It Up! has launched its new franchise website to serve as a comprehensive resource for those interested in learning about the many benefits of becoming a franchisee. With 2016 sales up seven percent over the previous year and continued projected growth, the brand is investing significantly
Juice It Up! is interested in talking with candidates who have at least $100,000 in liquid capital and a minimum net worth of $300,000. Startup costs, as estimated in Item 7 of the 2016 Franchise Disclosure Document for Juice It Up!, are $249,550 to $343,726. www.juiceitupfranchise.com
SAFE HOMECARE Opens Denver Location While Offering Franchising Opportunities in 33 States SAFE HOMECARE is proud to announce the opening of a franchise in Denver, Colorado. “SAFE HOMECARE® is just beginning its national rollout of franchise locations across the United States, forecasting to award nine new franchise locations in 2017.” says Adam Krueger, COO of SAFE HOMECARE. SAFE HOMECARE provides non-medical, in-home care and companionship services that make a significant difference in the daily lives of seniors, adults, and others needing assistance. The services provided by SAFE HOMECARE include: one-onone time, companionship, meal preparation, laundry and light housekeeping, basic medications management, personal care (including shower assistance, incontinent & colostomy care), transportation to/from appointments, Dementia and Alzheimer’s support, pet care/dog walking, and more. The Company, founded in 2014, prides itself on providing nocost in-home assessments and top tier professional caregivers who are not just a “warm body”, but who provide compassionate interactive care - reliably, consistently and professionally to those in need of assistance up to 24 hours a day, 7 days a week.
Franchising USA
Potential franchise candidates can expect to receive a geographically desirable territory that is substantially larger than industry norms, a tested and perfected model, extensive training and on-going management support, materials, the benefit of the senior management team’s experience, company’s unique and highly successful marketing strategies, essential ingredients and maximizing location performance. www.safehomecarefranchise.com
Grasons Co. Estate Sales Services Opens Franchise Inside Dallas-Fort Worth Metroplex Grasons Co. is mostly recognized for their on-site estate sale services, the company also offers exclusive virtual consignment, and home staging and design. The company provides a complimentary initial in home interview and assessment. Once the process is started, they clean your items, stage all items in proper places and price each and every item inside and outside the home and garage. They, also, sell larger items such as cars, boats, and items of higher value such as fine jewelry and costume jewelry. Grasons Co Estate Sale Services, which is the #1 Choice for estate sale services and estate sale business franchise, is proud to announce the opening of their new Texas location in the city of McKinney. McKinney is located in Collin County – and is a part of the Dallas-Fort Worth Metroplex.
“Our estate sale company began in Orange County (California) and is quickly moving across the Nation as the recognized brand for estate sales,” says CEO of Grasons Co., Simone Kelly. “We started franchising our business at the end of 2014 when our initial business was too busy to sustain just one location.”
With the company being headquartered in Huntington Beach, the company also has presence is in Nevada, Pennsylvania, and throughout California. The company recently secured a master franchise deal to developed 28 units throughout New England. www.grasons.com
Dunkin’ Donuts Announces Plans to Develop First Restaurant in Pinconning, Michigan Dunkin’ Donuts, America’s all-day, everyday stop for coffee and baked goods, announced the signing of a store development agreement with new franchise group, Pinconning Food Services, LLC, to develop the company’s first Dunkin’ Donuts restaurant in Pinconning, Michigan. The restaurant is planned to open this upcoming summer. Pinconning Food Services, LLC is a subsidiary of Corrigan Oil Co., an operator of 54 gas and convenience store locations with more than 55 years of experience in the gas and convenience industries. Currently, there are 78 Dunkin’ Donuts restaurants located throughout Michigan, 18 of which are gas and convenience locations.
The brand is continuing to recruit franchisees in the Detroit, Grand Rapids and Lansing areas to develop freestanding locations as well as gas and convenience locations. It will consider qualified groups as both franchisees to directly develop and operate Dunkin’ Donuts locations, as well
as landlords for traditional franchisees to operate within their gas and convenience operations. To help fuel growth in
Michigan, special development incentives are available.
www.DunkinFranchising.com
Franchising USA
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Featu re
b y G i n a G i l l Fr a n c h i s i n g U S A
MULTI-UNIT franchising Multi-Unit Franchising is when a franchisor takes on more than one operation in the same territory. Once a franchisor becomes comfortable in their position with one franchise, they may consider purchasing more to multi-manage. Franchising USA
Once a franchisor is established and able to step back from the day to day operations of a unit, it could be an easy profit increase to consider multi-unit franchising. It’s important to ensure that your current business is successful and running properly during peak times before moving forward with another investment. With technology connecting us globally, it’s a lot easier for one person to run a few of the franchises from their home. Easy access to all locations makes it feasible and creates a work life balance. Franchisors can phone in and check on many businesses across the region, without having to be on the road day and night. Before picking up another franchise,
one must take a lot of things into consideration. It would be wise to contact another multi-unit franchisor to get a personal assessment of their experience, how they have adjusted and the challenges and successes they have experienced. This firsthand experience may be worth noting before jumping into a multiple franchise situation. Though it may seem easy to handle, it may not be what you want for your work life balance. A franchisee should do some research to see how other franchises of this brand have fared with multiple units. Can a territory of your size carry more than one franchise of this sort? Has it been successful in similar populations and communities?
“It’s important to ensure that your current business is successful and running properly during peak times before moving forward with another investment.” There are a lot of resources one could avail from to help support their decision making process, including the franchise’s online presence. If the company has a stable online income within your area, creating another location may not be applicable in your territory.
yourself the same questions you asked the first time around, but with more experience and firsthand knowledge. Sometimes this can be blinding for some franchisees, who do not consider the facts or conduct the research, an arrogant approach will not allow for success.
Do you provide children’s products? If so , are there enough children in your community to have more than one service? These are a few of the specific details that only a current franchisee may be aware of through experience.
Of course, a lot of information and support is provided directly by the franchisor. Before setting up a location, they will likely consider a lot of the statistical influences of your area and a lengthy discussion should be considered before moving forward in any capacity.
You recognize your business’ abilities better than anyone else and it has to be visualized as a bigger supplier in a relatively same area. You have to ask
Multi-unit franchises are more common nowadays and constantly on the rise; multi-unit operators now control 54
percent of all franchise units. Though it’s a trending business move in the franchise field, one must consider if a new unit would damage its current functioning business before upgrading. Of course, it is wise to wait until your first operation is functioning completely on its own without your presence. Talent is a big influence on the ability for a business to function without its owner. If you notice in your location there is a large turnover and talent seems to be one of your weaknesses due to location, then it may not be wise to invest in a similar franchise in the area. Top talent would allow a franchisee to trust in his or her employees and allow them to run
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Featu re
b y G i n a G i l l Fr a n c h i s i n g U S A
“It would be wise to contact another multi-unit franchisor to get a personal assessment of their experience, how they have adjusted and the challenges and successes they have experienced.� the business when they are not available. Research how your current talent has been functioning and consider whether or not you believe creating a successful team for another location is a possibility. Relationships and experience can be a benefit for a franchisor invested in multiunits. If you have established yourself within your community, you can take advantage of the opportunities your relationships have created. Real estate agents, vendors, consumers and suppliers in your area may allow for easy growth in your location. These relationships can help you establish a wider presence more easily than a new developer in the business. Franchisors also enjoy the idea of handing off a unit to someone already well versed in their brand and operations.
Franchising USA
It’s comforting and less risky when a franchisee has provided results and profits within their territory. A current owner will not waste their time with coaching and support, they are already prepared for a lot of the process. Plus they may now only deal with one source of contact for a territory, which makes it easier at the head office location. There are some franchises that prefer multi-unit franchises if you are a first time investor and have plans to grow in the same brand. The restaurant market has been successful as a multi-unit operation; in fact 76% of franchise restaurants are multi-operated. Restaurants brands are well-recognized and franchisors have a good sense of whether or not a new one in the same region will provide profit.
One that is well established and holds a hefty brand can easily locate within a community and become as successful as another unit. Multi-unit ownership is rising in the franchise field and can not only increase profit and success, but with the right variables lead to a better work life balance. With the proper research, environment, support and understanding, a franchisee could run multiple units with ease. ABOUT THE AUTHOR: After receiving an English Degree, followed by a Journalism Diploma, Gina Gill became a freelance journalist in 2008. She has worked as a reporter and in communications, focusing on social media. She currently works as a community information officer with Epilepsy Society, while pursuing her writing career at the same time.
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Ashley Jeffery, Business Consultant, FrankCrum
Lifesavers for Multi-Unit Franchise Owners
Ashley Jeffery
Franchising USA
You know who you are – the multi-unit franchise owner who may still face the conflicts between working “on” or “in” the business. You’re not alone -- this happens in franchises of all sizes.
The temptation to continue to work in the business may be a big one, regardless of the number of units owned. Particularly for multi-unit owners, though, the need to focus on developing strategies and growing revenue (working on your business) should take precedence over dayto-day issues related to human resources administration (working in your business). That includes HR issues like workers’ compensation, risk management, payroll and payroll reporting, unemployment
claims, employee benefits, employee onboarding, employee retention – and more. Hiring specialists in each of these areas is not cost effective or particularly successful, particularly with multi-unit and multi-state operations. Most multi-unit franchise owners prefer to stick with a flat or lean management team, rather than loading up on overhead costs. But regardless of how you handle HR administration, it’s important to start with the what. Which are the most critical HR issues you should handle to maximize profitability, minimize liability, adhere to appropriate regulations and attract/retain the best employees? Let’s briefly discuss these top HR issues and some options for the most costefficient ways to take care of them.
What to know about workers’ comp costs and risk management Workers’ compensation is often top of mind for multi-unit franchise owners, as on the job injuries can wreak havoc for the best run franchise operations. Owners know they need workers’ comp coverage, but may assume all rates are created equal. That’s not the case. Rates, while set by states, are also based on the size of the operation and eligibility for discounts based on a documented safety program or drug free workplace. The most important factor, though, is the loss history and ability to qualify for an experience modifier. But there’s more to it – and that’s premium costs. A combination of safety training and audits, creation of a safe work environment and enforcement of safety rules, as well as a wise selection of carriers, can make a difference in premium costs.
“Although workers’ comp, risk management, payroll, payroll reporting and unemployment claims may be at the top of the multi-unit franchisee’s list, they are often just the tip of the HR iceberg.” What about payroll and payroll reporting? It’s only after your franchise starts doing its own multi-unit payroll that you realize how time consuming it is, along with the risks and minefields that await you with reporting and compliance. This is not a clerical function. Payroll is way more than just cutting checks – it’s also the time spent compiling time-sheets, checking pay rates and verifying deductions and garnishments. And that’s before reporting, fines for late reporting and the many regulations imposed on businesses.
Unemployment claims No franchisee can really avoid unemployment claims, because former employees are always free to file claims. However, the right approaches, particularly in high turnover franchises, can minimize the number of claims and maximize franchisees’ ability to defend themselves against claims that have been filed. Most unemployment claims are based on disagreements about employee performance, attendance or conduct. Additional but less frequent reasons for claims include layoffs and reduction in employee hours. Best practices to avoid these include: • Hire the best qualified people, performing background checks, using job descriptions and thorough onboarding • Establish written policies/procedures • Provide training • Perform regular reviews, counsel on deficiencies and document files As for claims, although the burden of proof is on the employer, employees are less likely to win a claim for termination for conduct or attendance if the employer has ample documentation.
And so much more… Although workers’ comp, risk management, payroll, payroll reporting and unemployment claims may be at the top of the multi-unit franchisee’s list, they are often just the tip of the HR iceberg. No owner can perform all the HR functions alone and few want to bear the expense of hiring individual specialists. Some franchisees choose to outsource to multiple vendors, but there’s another option. That option, the Professional Employer Organization (PEO), offers a one-stop shop approach, with all of these services under one roof, with one partner. Choosing the right Professional Employer Organization (http://www.frankcrum.com/peo-services/) allows franchisees to work with dedicated professional team members in each service area. The right PEO will also provide these services at an affordable cost, which is often less than what other multi-unit franchisees are paying staff members and/ or multiple vendors. It’s not practical to hire all the help you need and you know you didn’t start your franchise to become an HR specialist. When you achieve the efficiencies of outsourcing, you can control costs and gain more time for sales and marketing. This, in turn, will allow you to focus on building your franchises, and we’d say that’s a pretty good recipe for success. Ashley Jeffery is a Business Consultant for FrankCrum, a national Professional Employer Organization with experience working with single and multi-unit franchisees. Working directly with business owners to help them improve their business operations, she offers ways to reduce costs by outsourcing HR. www.frankcum.com
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Chris Poelma, President & GM, NCR Silver
Six Signs It’s Time to Keep Growing Your Franchise For a franchisor, grand plans of opening that next location always burn brightly. And if recent history is any indicator, these dreams exist for good reason. Since 2011, the U.S. has seen year-over-year
improvements in direct franchise employment, monetary Chris Poelma
output and total number of franchise establishments, per research and advisory firm Franchise Direct.
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However, dreams of expansions shouldn’t mask the reality that expansion bears inherent risks. For major franchise operations, the failure of a single location may only raise a few internal eyebrows. But for smaller operations, one failed location can lead to lost credibility from investors and employees, a stumble in brand reputation among consumers and major financial woes. Fortunately, there are a few key signs to indicate you’re ready for a successful expansion.
You’re prepared to relinquish control At a foundational level, adding a location, whether it’s your second or seventeenth, means you’re preparing to loosen your grip and delegate some day-to-day responsibilities to someone else. After all, your time and energy are finite resources. Adding more locations means you’re spreading those resources increasingly thin. With each additional location, your goal is to replicate and improve the same experience that enabled you to expand in the first place. This begins with a vision and having the right people in place to execute it.
There’s talent that you trust Identifying the right point person to run the new location is paramount – whether the hire is a franchisee or store operator. Business acumen is essential, however, it’s equally important to add a team member who can extend the brand. Each franchise location truly reflects on the parent company’s broader brand, meaning a lackluster customer experience 20 miles away can have a major impact on other, more successful locations. Thus, it’s vital you identify a leader who shares the same vision and values that make your brand successful.
Your business model may not be perfect…but it’s close Advisors may tell you to perfect your business model before seriously
“With each additional location, your goal is to replicate and improve the same experience that enabled you to expand in the first place.” considering expansion. Let’s be honest, if you’re looking for perfection, you won’t find it in business.
you make the decisions necessary to successfully manage your expansion.
True, you’ll want a business strategy that’s easy to replicate and implement. However, the quest for perfection can stymie true growth. Instead, resolve minor problems before they become major problems across multiple locations. Accept that you’ll have to adjust on the fly and resist the urge to pursue perfection.
You have the financial support for organic expansion
Competitors can’t match your differentiator
Also, it’s essential to carefully chose how you’re going to fund your expansion. Cashing in on investment capital may propel your short-term goals, but it can also restrict your freedom in the long term. Instead, driving growth organically can help you grow your footprint with less caution tape for the future.
If you’re a barber, maybe you’ve developed a locally sourced pomade your clients love. Or take the rise of “rolled ice cream,” a Thai twist on a market without much recent innovation. If you have something new to offer, or a unique take on a preexisting service or product, speed can help you capture larger market share before your competitors have the appropriate time to respond. However, if your solution is more of a “me too” offering, it’s worth taking the time to develop and clearly define a differentiator.
Technology is set to help, not hurt your expansion efforts Too often, you’ll see technology chime in at number 11 on the 10 things to check off before expanding. However, overseeing multiple locations can prove overwhelming without the proper tools for the job. As you become more thinly spread, you’ll want technology (accounting, point of sale, etc.) that expands with you and provides remote management and insight capabilities. For example, a point of sale solution may allow you to accept payments at your locations, but it can also be used for advanced reporting including inventory levels, customer trends and more. Ultimately, you want your technology to inform your holistic oversight and help
Finally, never force growth. Success stories rarely begin with the expansion of a struggling operation. Particularly for franchisors with smaller operations, achieving profitability before opening an additional location remains key, as it validates your desire to expand.
So whether it’s getting ready to hand over the reins to individual operators or making sure your technology portfolio supports you, it’s important not to rush growth. And with the U.S. being franchise friendly at the moment, you may find it difficult to pace your expansions and examine the areas mentioned above. However, if you do, you’ll soon find your burning desire to open that tenth location will give way… to a desire to open an eleventh, and then a twelfth. Happy franchising. From mobile software founder to CTO of Microsoft’s Operator Channel, Chris Poelma has spent nearly three decades developing innovative, high-growth businesses in the technology industry. In April 2015, Chris joined NCR Corporation as President and General Manager of NCR Silver. He oversees a very talented and ambitious team to drive business model innovation for small businesses through its cloud-based POS platform, NCR Silver. www.ncr.com
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Penn S tation East C oast Subs
Penn Station East Coast Subs
Poised for Growth in 2017 Penn Station East Coast Subs customers know the sandwich franchise, which was named the No. 1 sandwich chain by the 2015 Nation’s Restaurant News Consumer Picks survey, for its grilled, madeto-order sandwiches, fresh-cut fries and handsqueezed lemonade. As a franchisor, though, Penn Station is known for its outstanding profitability and return on investment. In 2016, the brand was named one of the Best Franchises to Buy by Forbes and one of the Best Franchise Deals by QSR Magazine. “Franchising is staged entrepreneurism,” said Craig Dunaway, president of Penn Station. “It requires passion, energy and time combined with the ability to follow the franchisor’s proven systems. Franchisees who can accomplish both should have the most success, especially as multi-unit franchisees.”
Brand Updates Penn Station has made some key achievements in recent years and will build on those in 2017. Penn Station
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“Franchising is staged entrepreneurism. It requires passion, energy and time combined with the ability to follow the franchisor’s proven systems.” - Craig Dunaway launched its first-ever mobile app and loyalty program last year. The app allows users to find a location, refer a friend via social media, pay for their orders and send digital gift cards. The app gives Penn Station the ability to surprise and delight customers with double points days or other offers to reward app users. The app also integrates with Penn Station’s new loyalty program. Employees scan a barcode from the app at the register, so that customers earn points for their order. For every dollar spent, customers get one point. Points are tracked on the app and customers get notifications when they are eligible for a reward. Dunaway said Penn Station will also expand the app to allow for mobile ordering this year. “Launching our app and loyalty program were huge steps forward for Penn Station,” Dunaway said. “It’s another tool our franchisees can use to grow their sales and engage their customers.” Penn Station has overhauled its training programs in the last couple of years, even earning a coveted spot on Training Magazine’s 2017 Training Top 125 list, and is continuing to fine tune the process in 2017. “My Penn Path” is a training and career path program designed to help franchisee employees move from entrylevel crew member to crew leader, assistant manager and even general manager. “With only one company owned unit, we wanted to provide franchisees with a great tool to help them with their most valuable assets: their employees,” Dunaway said. “Our system can be more than a job for anyone who works with our franchisees. My Penn Path shows employees what and how to advance in today’s competitive hiring environment.” The program, along with training videos, quizzes and modules, is built into Penn
Station’s proprietary POS system. Penn Station is in the process of completely eliminating printed training manuals and creating a custom learning management system this year. “The training videos alone have already reduced training time by about half, and test scores on the various stations have improved significantly since the videos were implemented,” Dunaway said. “Our efforts on improving training and providing a career path have greatly benefitted franchisees in hiring and retaining employees.”
Focus on Profitability Dunaway said Penn Station focuses obsessively on ROI and profitability for its franchisees. The company concentrates
on opening one successful restaurant and then another and so on, instead of opening as many as possible without regard for failures. To help franchisees succeed, Penn Station typically grows in a concentric circle from Cincinnati. Penn Station is currently exploring options for an incentive program for 2017 development. They anticipate it will roll out within the next 30 to 60 days pending state and federal approval. “The concentric circle gives us the three things we need to enter a new market: logistics, brand recognition and our oversight and support,” Dunaway said. “In 2017, Penn Station’s growth plans focus primarily on filling out markets in which we currently exist. We were voted the best sandwich in America, so we
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Penn S tation East C oast Subs know our food can be national in scope. However, it’s important to us from a brand perspective to build out existing markets before expanding to many new markets.” With only the one company-owned unit, the brand invests its resources in helping franchisees maximize their return instead of competing with them. For example, in 2016, Penn Station invested just under a half million dollars to create a regional franchise consultant program to help franchisees assess their business, including profit and loss statements and balance sheets, and make specific recommendations on ways to improve. Penn Station also sends area representatives to visit franchisees six to eight times per year to provide detailed notes and a consultant post-visit. While the individual restaurants don’t simply run themselves, focusing on creating more tools to allow franchisees to run their business more profitably can prove to be more successful in the long term. Penn Station does not profit from rebates from suppliers from franchisees’ purchases. Instead, Penn Station negotiates a lower price or invests the rebates back into the system. That has helped keep Penn Station’s controllable and food costs low. Dunaway said return on investment is top of mind in everything Penn Station does. For example, when the brand launched a new design in 2016, each element was carefully chosen for durability, cost effectiveness, function and aesthetics.
Multi-Unit Franchising Opportunity Penn Station franchisees sign multi-unit agreements. In addition to the capital needed to cover the franchisee’s growth plan, Dunaway said Penn Station looks for franchisees with small business acumen and experience, especially with P&L statements and hiring and firing. It’s critical that franchisees are process compliant and able to follow the brand’s 106-page operations manual. “We take great care in selecting our franchisees, and when we find people who fit our culture, understand the restaurant industry, have small business acumen
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and are looking for a superior return on investment, we’re both set up for success,” Dunaway said. “When a franchisee’s goals align with Penn Station’s, we can provide a clear strategy to reach those objectives. This is a difficult industry. Proven systems, hard work and diligence are all required before any franchisee can even begin to think about success. If they’re not willing to follow the model and work harder than they’ve ever worked before, the potential for success can decline.” Penn Station uses online behavioral assessments to choose managing owners and provides those assessments for franchisees to choose their general managers. Dunaway said the assessments help determine which people have the necessary personality traits to succeed in a position beyond their job experience and skill set. Dunaway said the quality of Penn Station’s products helps separate it from other
multi-unit franchising opportunities. Penn Station uses proprietary hearth baked bread, meats and cheeses sliced fresh throughout the day and nationally branded products. “We grill, we fry and we bake,” Dunaway said. “Our food is made fresh in the restaurant every day, and customers can see watch as their food is prepared in our open display kitchens. We’re a bunch of passionate zealots about the food we serve, and our franchisees are extremely proud of the high quality products Penn Station offers.” Penn Station has made great brand improvements in recent years, including the launch of the mobile app and loyalty program, implementing training videos and debuting a new restaurant design. The company is readier than ever for expansion in 2017 and expects to open 15 to 20 new locations. http://penn-station.com
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Chris Conner, President, Franchise Marketing Systems
Multi-Unit Franchising:
Making Franchising Work For You Franchising is meant to be a mutually beneficial business relationship between all parties involved. The Franchisor is allowed to expand efficiently through scaled growth and rapid expansion with the investment made by independent franchisees and the infusion of capital that comes with new franchise ownership. The Franchisee is provided the opportunity to build a business efficiently and effectively with proven business systems and infrastructure along with economies of scale that come with a network of businesses working together. Finally, the vendors and suppliers benefit from franchising by being able to scale
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with the organization and realize better margins with a consistent customer base following the same business model and operating platform. Multi-Unit franchising is the most aggressive end of the spectrum and in a sense turbo-charges the franchise relationship for all parties. Multi-Unit franchising has many definitions and descriptions for the concept including master franchising, area developer franchises, regional director franchising along with others and really, the model has two distinctly different operating structures.
Area Developer Franchise Model: An Area Developer Franchise is typically the definition for a model where a franchisee invests in a region for the right
to develop a market as a sub-franchisor of the larger brand. The business relationship is typically based on an initial investment made by the Area Developer for the right to a given market where they are able to go out and market the franchise in that region. When they sell unit franchises in that market, they collect some percentage of all franchise fees and royalties collected from the Unit Franchises in that market. A typical scenario might be 50% of all franchise revenues paid to the Area Developer in that region. This model is aggressive, fast moving and used by companies looking to cover ground in as short of a time period as possible. It has been used extensively in the commercial cleaning market by brands such as JanPro, Jani-King and Jantize America, but also was used extensively by Subway as they developed their brand
“When you have identified the candidate as being a potential Multi-Unit buyer, structure your presentation to fit their attention span and focus on what is relevant.” globally. It also is a common model for international franchise development. Area Developer Franchisees are expected to contribute to the franchise relationship beyond the sale of the unit in support, training and local market infrastructure. This model is highly aggressive and requires the right candidate in the Area Developer position to facilitate growth and support new franchisees in farther reaching markets.
Multi-Unit Franchise Structure: A traditional Multi-Unit franchise model incorporates a franchise investor owning and operating the locations they invest in. This requires a much higher initial capital outlay to open the businesses than an Area Developer Franchise model in that the franchisee is investing in each business unit with real estate, leasehold expenses, employee and operating costs associated with the ramp up with each operating business. This type of Multi-unit franchisee brings a lot of capital, a great deal of operating experience and a strong resume to the franchise system and is an enormously sought after candidate in the franchise market. My most recent experience with a multi-unit franchise owner was a candidate we ran into at a franchise show who owned 150 Joint Chiropractic locations, 15 Juicing franchises and 125 weight loss franchises. He had been in franchising for over three decades and knew what unit level metrics he wanted, when he found a brand, he invested in a big way then scaled. Multi-Unit franchisees could have anywhere from two to hundreds of locations. In some cases, a unit franchisee can be “promoted” to a multi-unit owner, with success and the right infrastructure, good franchises can be supported and eventually they should want to transition to multi-unit ownership.
As a franchisor, how do you recruit area developer and multiunit franchisees? First and foremost, create happy and successful franchisees within your system and network. Area Developer and particularly Multi-Unit franchisees will look to unit validation before anything else. These investors are intelligent, experienced and know the market. Your franchise needs to be able to impress this buyer with the right messaging, presentation, branding, market potential and most importantly ROI on the franchise model. These owners are by nature big picture thinkers and will look at a bottom line and how easily the model scales as they are not operating any of the locations they own or operate within their market. As a result, you should have an earnings claim on your model that presents well, if you are a fixed location, restaurant or retail model the franchise needs to show a 100% return in 3-5 years on cash invested. Service franchises typically should show a 100% return in 1-2 years on cash invested. The systems will be analyzed intensely by these investors, you need to be able to show that your model is repeatable and you have invested in the right technology to manage the day to day business without being in the business. These bigger investors come from many of the same marketing campaigns that individual franchisees are sourced through. Web and Internet marketing mediums, franchise tradeshows, franchise brokers and others are viable sources for Multi-Unit franchisees. The messaging, presentation and quality of the presentation needs to be strong and relevant for a franchise investor of this caliber. If you want this type of buyer, you need to make sure you are saying the right things and have the right presentation to get these people engaged in your sales process. Once a Multi-
Chris Conner
Unit franchisee is engaged in the sales process, professionalism, consistency and an intelligent presentation will make all the difference in your ability to keep the candidate engaged in your sales model. These buyers have lots of options to consider and are unwilling deal with franchises they get any sense of lack of organization, focus or credibility, which means that you need to be buttoned up and have a very tight presentation. One last thing I’ve found, skip the fluff and get to the point, these are busy people who don’t really care about the nonsensical marketing lingo and want to hear bottom line facts and figures. When you have identified the candidate as being a potential Multi-Unit buyer, structure your presentation to fit their attention span and focus on what is relevant. One more thing, these are candidates it might be worth “pampering”. Go ahead and spring for the flight to get them to your discovery day, take them to a sporting event, pay for dinner, think aggressively and be willing to invest in their experience with you in order to increase your odds of closing the big deal. Christopher Conner is the President of Franchise Marketing Systems and 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. www.franchisemarketingsystems.com
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Matthew J. Kreutzer & Brandon M. Garrett, Howard & Howard PLLC
Franchisors as Joint Employers:
Strategies for Avoiding the NLRB
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If your business involves franchising, you understand the rapidly, evolving regulatory landscape presents daunting traps for operators unfamiliar with the nuances of state and federal franchise laws. Navigating this already-challenging geography has become further complicated in the face of the new antibusiness “joint employer” test created by the NLRB in 2015 in the Browning-Ferris case, and embraced by the U.S. DOL, which governs wage and hour rules and family leave obligation, and the EEOC, which enforces discrimination and retaliation laws. The NLRB, which prosecutes employers for purported unfair labor practices, initiated litigation against McDonald’s (the franchisor) claiming it was responsible for alleged unlawful employment practices against its franchisees’ employees. The NLRB argued that McDonald’s was a coemployer because of the indirect influence it had on those employees by way of the policies, procedures, and rules it requires all franchisees to follow. Many have speculated that this move is a political one stemming from the current NLRB’s prounion agenda.
Matthew J. Kreutzer
Brandon M. Garrett
to protect the brand and integrity of the franchise system as a whole. From that perspective, it is critical for the franchise company to maintain strong rules and policies to ensure that customers enjoy a uniformly great experience across locations. On the other hand, the position taken by the NLRB and other agencies makes clear that greater control by a brand owner, even if it is never exercised, may continue to be a contributing factor in the joint employer analysis.
its operational rules to brand-protection justifications, and leave it to individual franchisees to determine the way to direct their employees to follow those rules. By way of example, a franchisor probably will not be found a joint employer if its operations manual dictates what type and style of uniforms the employees must wear in order to protect its brand (although the NLRB has found uniforms can be a mandatory subject of bargaining). It certainly will find itself deeper in joint employer territory if the manual dictates employees’ hours, pay, and benefits. Balancing these competing concerns has become a critical task for franchise companies.
Historically, the law shielded franchisors from such liability because they lack direct control over their franchisees’ employees. The Obama-era shift by the NLRB and other governmental agencies finds many franchise companies reconsidering aspects of the franchisor-franchisee relationship and seeking creative solutions to limit liability and risks of joint/single employer findings.
What follows from this tension is the need to balance the quality and nature of controls exerted by franchise companies over their individual franchisees. For a trademark owner, it is critically important to protect the way the brand is used, as well as the quality of the products and services sold to customers under that brand.When these controls start to seep into matters of the employment relationship, the franchisor finds itself deeper within joint employer territory. As a result, experienced franchise attorneys typically seek ways to achieve that happy medium between dictating rules that ensure brand consistency and quality system-wide, while at the same time avoiding a nexus with the relationship between the franchisees and their employees.
The challenge facing lawyers who advise franchise brands is how cautiously to navigate troubled waters with the hope of the regulatory calm promised by the new administration. On the one hand, a franchisor’s primary responsibility is
Without much in the way of direct guidance from the NLRB or other authorities, finding the right balance between these concerns can prove elusive. The prevailing wisdom is that a franchisor should seek in its legal documents to tie
On March 9, 2017, The Court of Appeals heard argument in the appeal of the Browning-Ferris. Although many commentators believe the NLRB decision will be upheld until President Trump appoints new NLRB members, at least one Judge on the Court stated that the NLRB “dropped the ball” on its new theory. The devil is in the details, and unfortunately, there is no silver bullet to protect against these risks. Franchise companies should consult with legal counsel experienced in labor law and franchising to best arm themselves in this increasingly perilous environment. Kreutzer and Garrett are attorneys with Royal Oak, Mich.-based law firm Howard & Howard. howardandhoward.com
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Marc Collopy, Co-founder, Rockin’ Jump
Big Risks, Bigger Payoffs:
Balancing the Realities of Franchisee Life Purchasing a franchise requires courage. As many industry veterans will attest, fear is a normal part of the process. It’s understandable, given the realities of the franchise industry: Nearly one in five fail. That’s a sobering statistic. Also fueling investors’ anxieties are the two major hurdles presented by large franchises: startup fees and the time needed to operate the business. Larger franchises often ask for hefty upfront costs in the form of construction fees, marketing requirements, inventory, and more. Many establishments, once up and running, are expected to operate seven days a week, and that usually requires owner-management commitments.
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So why do so many take the plunge? It’s simple: Big risks can lead to big rewards.
No Guts, No Glory Now that we’ve gotten the risks of investing in a large franchise out of the way, let’s move on to the fun part: the rewards. Entrepreneur’s list of top franchise investments is largely made up of big brands. Why? The No. 1 advantage of investing in a large franchise is increased odds of success. The math is straightforward: Larger franchises typically have sizable customer bases, a wide reach, and an established, reliable brand. Smaller franchises, in comparison, usually support smaller markets, audiences, and niches. Another advantage: support. Large franchises often provide franchisees with a wealth of valuable information and aid, as well as access to corporate team members and fellow franchisees. For instance, one of the initial headaches in starting any business is finding the right
vendors and business partners. Because larger franchises maintain relationships with high-quality vendors, franchisees don’t have to stress about the research and selection process. A final upshot to investing in a large franchise involves location selection. Any established brand will have loads of experience in this arena and can help franchisees select a spot that will maximize the odds of success.
Downsizing Your Risks To reap the riches of franchise ownership, you must plan for the potential pitfalls and take advantage of the support larger brands can offer. If you’re taking steps toward investing in a large franchise, the following strategies will help you mitigate your risks. 1. Ensure the brand is a good fit. Do your due diligence. Make sure the brand is a good fit, and examine every detail of the business. What are the failure rates? What’s the typical ROI?
Marc Collopy
other places to get loans and financing, such as through the Small Business Administration. Before getting approved for a loan, prepare to have proof of solid collateral and your past work history. Banks will want to make sure you’ll be able to make payments even if things go badly.
“Armed with thorough research, the right partners, and solid financing, you’ll have downsized your risks and can move on to pursuing the rewards of investing in a large franchise.” What’s the company culture like? How much support will the franchise offer? What will your role as owner look like? Connect with another franchisee in your area. Ask him or her out for coffee or drinks to chat about the realities of being a franchisee under the brand you’re considering. The more intel you can gather, the better you’ll feel going into the deal. 2. Don’t invest alone. Working with partners and investors can soften the feeling of “going it alone” and lighten some of the monetary risk, too. Having a partner can even improve your business results. When you’re not stressed or trying to constantly do a thousand things at once, you’ll be able to focus more on the customer experience. When seeking out a partner, try to
find someone who complements you. Your partner’s skills should fill in any gaps in your own tool kit. Don’t make the mistake of enlisting someone just like you — you want someone with a different perspective so you can approach problems from two different angles as a team. Don’t overlook your own family as a source of support. Consider asking your spouse or children to play a role in the operation’s success. Having all hands on deck turns the experience into a rewarding, memorable adventure. 3. Seek out the best loan deal. Loans help spread the financial risk out over time. Many large franchisors have their own finance companies and are willing to carry a portion of franchisees’ debt burdens. Of course, there are
4. Select a winning location. Your franchise location can make or break your business. Attributes of a great location include easy access, adequate square footage, ample parking, an attractive (and safe) neighborhood, and proximity to major arteries. To help reduce your total overhead costs, find a location where the landlord is willing to add tenant improvement dollars. Fear is a normal part of franchisee life, but you shouldn’t let it be a stumbling block on your road to success. Armed with thorough research, the right partners, and solid financing, you’ll have downsized your risks and can move on to pursuing the rewards of investing in a large franchise. Marc Collopy is co-founder and executive vice president of sales of Rockin’ Jump, a trampoline park franchise dedicated to combining exercise and fun in a safe, clean, family-friendly environment. Rockin’ Jump currently has 32 locations nationwide, with an additional 80 under construction. rockinjump.com/trampoline-parkfranchise
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Veterans in Franchising april 2017
www.franchisingusamagazine.com
Promoting Veteran-Owned Franchises Why Military Veterans Should
Consider Franchise Ownership VA Supports Franchises
for Service Disabled Veterans Franchising USA
SAME DRIVE. DIFFERENT BATTLEFIELD. TAKE THE NEXT STEP > VETFRAN.COM OFFERING FINANCIAL SUPPORT, TRAINING & MENTORSHIP Veterans interested in franchising can take their skills learned in the military to successfully own and develop small businesses. Learn more and support veterans in franchising at www.vetfran.com.
• 650 franchise companies participating • 151,000 veterans and their spouses found careers in the franchise industry • 5,100 veteran franchise owners
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V eterans in F ranchisin g S upplement april 2 0 1 7 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 On the Cover
Franchisee in Action
56 Promoting Veteran-Owned Franchises
52 Enviro-Master
58 Why Military Veterans Should Consider Franchise Ownership 60 VA Supports Franchises for Service Disabled Veterans
Profiles 58 Pinch a Penny
News and Expert Advice 56 Promoting Veteran-Owned Franchises
Kim Ryan, Vice President, Fish Consulting; VetFran Committee member
60 VA Supports Franchises for Service Disabled Veterans Jim Mingey, Founder and Managing Director,
Veterans Business Services
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Veter ans i n Fr anch isi ng
Env iro-M aster
Applying NavyLearned Principles at Enviro-Master Franchisee Found Submarine Job Added Value to Business Life Alabama-native Steve Tucker learned lessons and skills while serving as a submarine sonar technician in the late 1970s that helped guide the course of a long and varied business career.
To earn your Dolphins, your insignia as a Navy submariner, you have to demonstrate knowledge of damage control and contingency planning, Tucker said. Learning damage control teaches you to distinguish between what’s simply important and what’s urgent, and contingency planning teaches you to anticipate the “what ifs,” he said. “Being a sonar technician, you are taught to track multiple targets at the same time. That conditions you to be able to multi-
task,” Tucker said. Unlike in a large hierarchical company, in a small, growing business you have to be more flexible. “You wear a lot more hats,” he said. Tucker is the managing partner of Enviro-Master Services of Atlanta Inc., a franchise holder of Enviro-Master Services Inc. , a national franchisor based in Charlotte, N.C. The 58-yearold had broad business experience before taking on the Enviro-Master Franchise. Since leaving the Navy, he has worked in automotive, tobacco, waste management and consulting businesses. “This is my fifth company to build,” Tucker said. Enviro-Master describes itself as a hygiene company that works to bolster a client’s existing janitorial services.
“Being a sonar technician, you are taught to track multiple targets at the same time. That conditions you to be able to multi-task.” - Steve Tucker Franchising USA
“Every one of our customers has someone who maintains their restrooms on a daily basis,” Tucker said. “We don’t replace that function. We do some things they can’t do or won’t do … giving them a substantially heightened hygienic outcome.” Enviro-Master technicians perform a weekly deep-cleaning and disinfection of a restroom and its fixtures, removing all soils that can harbor bacteria and viruses. They then use an electrostatic sprayer to coat the room and all its fixtures with a germicidal spray capable of killing any pathogens for seven to nine days. “Our mission is to become the company that people call for help with their restrooms,” Tucker said. Enviro-Master was included last year in Inc. Magazine’s annual Inc. 5000 list of the nation’s fastest growing private, independent companies. It ranked 1404 with a three-year growth rate of 272 percent based on royalties received from franchise holders.
“You can’t teach somebody to have a good attitude. People either have integrity or they don’t have integrity and a good work ethic.” - Steve Tucker Pat Swisher, CEO and founder of the parent franchisor, said he did not know how many of the holders of Enviro-Master franchises are military veterans like Tucker, but he said the company offers a 25 percent discount to veterans applying for franchises. The company has more than 70 franchise holders around the country and plans to fill out the national footprint with 25 to 30 more franchise territories, which are currently being offered. Tucker said the West Atlanta EnviroMaster franchise is his first franchise business. Before choosing Enviro-Master, Tucker said he looked at other franchise opportunities including spa and salon, fastfood, printing and auto-repair businesses.
“Franchising offers you some specific opportunities that you don’t have when you start from scratch,” Tucker said. “There’s already a proven business model and marketing and infrastructure support. The ability to leverage large-group purchasing gives some advantage in terms of product and supply.” Tucker chose the Enviro-Master franchise over other opportunities for a variety of reasons. For one, it’s a niche business that serves a potentially broad market, he said. “You’ve got a lot of prospects and not a lot of competition.” He also liked the way the company’s services are bundled and its recurring
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revenue model. The company provides its services and generates revenue 52 weeks a year and offers additional services that can produce income monthly, bi-monthly or quarterly, he said. Also attractive was the company’s competitively priced line of restroom supplies, such as hand towels, toilet tissue, hand sanitizer and more. The social value of the disease prevention aspect of the business appealed to him as well, Tucker said. Tucker had a lawyer review the franchise agreement and other documents before making a final decision. The enterprise was self-financed. Tucker has a couple of investment partners, Christopher Russell, another Navy veteran, and Russell’s wife Karen, who works at the company. Starting out requires a “pretty good size bucket of cash” and a lot of motivation, Tucker said. Depending on the size of the territory, getting started typically requires between $200,000 to $300,000, which includes the franchise fee and 12 months of operating capital. Tucker started the business in March 2014 and currently has nine employees. The company’s territory includes West Atlanta and its suburbs, an area that includes all or part of 27 counties, stretching from Rome,
Franchising USA
“Franchising offers you some specific opportunities that you don’t have when you start from scratch. There’s already a proven business model and marketing and infrastructure support. - Steve Tucker Ga., to LaGrange, near the Alabama state line. Restaurants are a big part of his business, Tucker said, but also auto dealers, private schools and daycare centers, gyms and fitness centers, warehousing and distribution businesses, manufacturing and retail establishments. Any business, in other words, with public restrooms and a lot of foot traffic is a potential client. The parent company in Charlotte has established a vendor relationship with larger regional or national customers and obtained the necessary approvals for regional franchise holders to service them. “We share the same customer base with everybody,” Enviro-Master CEO Swisher said. “There’s no guarantee. You still have to sell, but we’ve removed the barriers for [a franchisee] to do so.” Because big customers can view EnviroMaster as a national enterprise, the company does a little more due-diligence with franchise prospects than average.
Swisher said he sends prospects into the field with company employees for a month so they can decide if the job is right for them. “We want to make sure they have the drive and background and desire to build a large organization, not just buy a job,” he said. He describes Enviro-Master as a “white collar” franchise and points to 85 percent of franchisees who hold MBA degrees as proof of that. At his franchise, Tucker’s greatest challenges have included finding good employees. “You can’t teach somebody to have a good attitude,” Tucker said. “People either have integrity or they don’t have integrity and a good work ethic.” He said he tries to hire good people and then teach them the job. At first finding good workers was tough but as the company grew it became easier. “You find your best people through your best people,” he said. www.enviro-master.info
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The Ultimate Professional Franchise Opportunity
www.interfacefinancial.com/franchise Franchising USA
Franchising USA
Veter ans i n Fr anch isi ng
Kim Ryan, Vice President, Fish Consulting
Promoting VeteranOwned Franchises As a nation, we love to support our military veterans in honor of the sacrifices they’ve made. So, it’s not surprising that many consumers would go out of their way to do business with a veteranowned franchise. The challenge, however, for consumers is knowing which ones are veteranowned. Franchising USA
At the recent #IFA2017 Annual Convention, a panel of experts shared with attendees how to promote and leverage their veteran-owned businesses. The panel was moderated by Gordon Logan, CEO and founder of Sport Clips Inc. and a veteran himself. The panel included: Stephanie Brown, CEO and founder of the Rosie Network; Ralph Yarusso, senior vice president of franchise development and operations, Grease Monkey International, Inc.; and Misty Stutsman, director, Center for Excellence for Veteran Entrepreneurship, Institute for Veterans and Military Families (IVMF). The session was sponsored by VetFran, a strategic initiative of the IFA that was founded by Don Dwyer, Sr., the founder of The Dwyer Group. Since 1991,
VetFran has grown to include more than 650 franchise systems, who voluntarily offer financial incentives to former U.S. military. Since 9/11, there are more than 200,000 new veterans in franchising with 6,000 of them joining as franchise owners.
Spreading the Word One of the biggest challenges that all businesses face is getting the word out to consumers about their brand and then educating them on the service and/or product provided. It’s no different for veterans who own businesses. They need to spread the word about their business, as well as communicate to the public that it is veteran-owned. According to the Small Business Administration, 2.5 million businesses are veteran-owned and these
“If you have a brochure, poster, flyer, website, Facebook page, vehicle magnet, window cling or other promotional materials, include “veteranowned” prominently in the copy.” veterans employ 5.8 million individuals. But, the general public has no idea how to find these 2.5 million businesses. This is what led Stephanie Brown to create a non-profit organization that addresses this particular issue. As a military spouse, Stephanie was looking to hire a veteran to do some work at her home in California. After searching Angie’s List and craigslist, she came to the realization that there was no way for the American public to locate our nation’s military family-owned businesses. Months later, Rosie’s List was born. Much like Angie’s List, www.RosiesList. org has more than 10,000 businesses registered and is growing daily. The non-profit organization doesn’t just list businesses, but actively promotes them as well. In addition to the website, The Rosie Network publishes a quarterly magazine, Military Entrepreneur Magazine (M.E.MAG). There are editorial and advertising opportunities in each issue to promote your veteran-owned business. To learn more, contact: contact@ therosienetwork.org
Seek Proper Training Veterans who own businesses should also look to other organizations offering training and support to military entrepreneurs. There are numerous non-profit groups designed to help U.S. military veterans get their business off the ground and in the public eye. Misty Stutsman is the director of the Center for Excellence for Veteran Entrepreneurship at Syracuse University. She heads up programs for service
members who are transitioning into entrepreneurial careers. The Institute for Veterans and Military Families (IVMF) has programs that include: Entrepreneurship Bootcamp for Veterans with Disabilities, Boots to Business, Veteran Women Igniting the Spirit of Entrepreneurship (VWise), the Coalition for Veteran Owned Business (CVOB), VetNet: The Veterans Network and more. All of these organizations are geared to veterans who are starting a business. They provide everything from networking opportunities and business plan development training to courses on entrepreneurship and financing. For more information, veterans can visit: https:// ivmf.syracuse.edu.
PR & Marketing There are a number of franchises that do an excellent job of promoting their support of military veterans. Grease Monkey International, Inc. is one of those franchises that actively advertises the fact that they welcome veteran owners to their brand. Ralph Yarusso, senior vice president of franchise development and operations and a former Air Force service member, says they offer a significant discount on the initial franchise fee (IFF), as well as royalty abatements and special financing and scholarships. He advises all franchises to be very clear about discounts and provide testimonials from veteran franchisees. He also recommends that veterans themselves advertise that their business is veteranowned. In all marketing materials, veterans should ensure they mention that their business is
Kim Ryan
veteran-owned. If you have a brochure, poster, flyer, website, Facebook page, vehicle magnet, window cling or other promotional materials, include “veteranowned” prominently in the copy. Public relations activities also should include mention of your business being veteran-owned. If you send out a press release, add a line about being veteranowned and even include some background information on yourself and your military service. And, if you are interviewed for an article or on-air story, also include mention of your veteran status. If you proudly served your country, there’s no reason not to proudly share this information with your potential customers. And, if you need additional assistance in promoting your business, reach out to those who have experience, training programs, support networks and other support services designed specifically for military veterans. Kim Ryan is a vice president at Fish Consulting, a full-service PR agency specializing in franchising. She also is a retired Master Sergeant in the U.S. Army Reserve and IFA member of the VetFran Committee. www.franchising.org
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Pinch A Penny Pool Patio a nd Spa
Why Military Veterans Should Consider Franchise Ownership Franchising USA
Veterans are special people. They have spent, in many cases, years of their lives putting the needs of our country before their own, deploying to hot spots all over the world to protect our nation. Many vets have been away from their families and loved ones for months, and
“Military veterans are accustomed to strong cultures and develop a strong sense of pride, not wanting to let the organization or their peers down. This esprit de corps is essential to any corporate organization and one of the most difficult to create.” the world’s largest retail pool, patio and spa franchise, we currently have multiple military veterans who either work in our corporate office or own and operate thriving retail and service stores across the Southeastern region of the United States. Our founder, Fred Thomas, served in the Marine Corps and as part of our commitment to veterans and members of the military, Pinch A Penny has donated millions of dollars to charities focused on supporting our veterans and their families.
even years at a time, sacrificing their time and lives for society’s greater good. Veterans deserve our gratitude and respect, and in the business world – our help. Companies should recognize what great assets veterans can be to the growth and success of their organizations. The skills, values and experiences gained during military service such as leadership, dedication and ability to follow protocol translate well to the business world, especially the franchising industry. At Pinch A Penny Pool Patio and Spa, we have long since discovered the incredible benefits of partnering with veterans. As
Easing back into civilian life after serving in the military and determining the right career path can be a difficult experience for many veterans. If you are a veteran seeking to start a business, franchising offers a solid business model as compared to the difficulties of starting one from scratch. It also provides the framework and endless support to help franchisees succeed. Combining a military work ethic coupled with a strong franchise network can prove to be quite the symbiotic relationship. Veterans also learn a broad skill set in the military, many times becoming a jack-ofall-trades to accomplish a mission. They must learn and adapt quickly. Owning a business requires a similar mindset, especially when success is directly dependent on the entrepreneur’s drive and will to succeed. All of these important skills are easily applied to franchise ownership. As part of a proven concept, one of the greatest benefits of partnering with a franchise – for veterans, and any entrepreneurs for that matter – is being in business for yourself, but never by yourself.
Military veterans are accustomed to strong cultures and develop a strong sense of pride, not wanting to let the organization or their peers down. This esprit de corps is essential to any corporate organization and one of the most difficult to create. We believe that the dedication and enthusiasm of our veteran franchisees have greatly enhanced Pinch A Penny’s franchise culture. That being said, veterans need to do their due diligence when seeking a franchise opportunity that aligns with their skills, core beliefs and values. Franchising is a great path to successful, independent business ownership – one many veterans should consider pursuing. By Casey Terrell, former Armor Officer in the US Army and Vice President of Marketing and Operations for Pinch A Penny Pool Patio and Spa https://franchise.pinchapenny.com
Casy Terrell
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Jim Mingey, Founder & Managing Director, VBS
VA Supports Franchises for Service Disabled Veterans Boot2Business.us/franchise™
Jim Mingey
Recent updated procedures for Chapter 31 Self-Employment Program reaffirm that franchises remain an eligible form of business model for Veterans who qualify under the program.
The Self-Employment track is designed for Veterans who have the necessary job skills to start a business. Selfemployment may also be the right track for Veterans who have limited access to traditional employment or require a more accommodating work environment because of a disability. The intensive nature of the evaluation and planning process is lengthy and can take several months to complete. Franchises may be approved if they are endorsed as part of the viability analysis of a proposed self-employment business plan. Besides the standard factors the franchisors and financial supporters may be scrutinizing, a VA Rehabilitation Counselor (VRC) will be asking: Will the Veteran’s disability pose any barriers to operating the business? If yes, what reasonable accommodations can be developed to address those barriers? What qualifications does the Veteran possess to ensure he/she can start and operate a business? What skills and/or knowledge will the Veteran need to acquire to operate this business? Why does the Veteran want to start this type of business? The VRC will pose these questions to the Veteran in advance of his/her meeting with the consultant who will be assisting in the development of the business plan. This can ensure that all questions are addressed initially, reducing the likelihood that
Franchising USA
“Veterans are responsible for actively participating in the self-employment process from the onset of service. The Veteran must agree to use resources to assist in the development and implementation of a business plan.” the Veteran will propose an incomplete business plan. To be a good steward of government resources, the VRC is responsible to assess whether the business plan is feasible given both the Veteran’s personal situation and reasonable prospects for success. Viable franchise concepts with track records can therefore help create credibility for a self-employment plan. Many of the critical elements for developing a business, such as recommending potential funding resources, assisting in developing a funding package and suggesting marketing strategies are already provided by franchisors. In addition, specific franchisor training requirement and objectives can complement any needed remedial training such as accounting, business management and/or economics coursework to provide insight into certain aspects of running a successful business. Veterans are responsible for actively participating in the self-employment process from the onset of service. The Veteran must agree to use resources to assist in the development and implementation of a business plan. It is imperative that the Veteran has a clear understanding of the self-employment process before the pursuit of this track to employment. The intensive nature of the evaluation and planning process is lengthy and can take several months to
complete. An informed Veteran will be better prepared to anticipate and work within the self-employment framework and timeline. Veterans seeking to apply for Chapter 31 Self-Employment benefits would benefit greatly from reviewing M28R, Part VI, Section A, Chapter 9 of the VA’s Vocational Rehabilitation and Employment Manual. That knowledge combining with the scope and operating requirements of a specific franchise will help a VRC evaluate the feasibility of a self-employment plan.
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. www.VeteransBusinessServices.us
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
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ex per t advice
Paul Bosley, Managing Member of Business Finance Depot
The Perfect Franchise Financing Combination When an entrepreneur is first considering purchasing a franchise, various financing options are usually considered and the most appropriate financing product(s) should be selected. For example, an equipment lease is often chosen for financing new equipment needed to run the business. Another option is to finance the entire business with a SBA 7(a) loan. A 3rd option is to self-fund using funds saved in the entrepreneur’s retirement account using the R.O.B.S. program established by the IRS.
Franchising USA
It is very unusual when two financing products are complementary & can be selected jointly to finance a new business. With the introduction of the SBA Express loan, this is no longer the case. An SBA Express loan complements an equipment lease for financing a new franchise and the expansion of an existing franchise.
The SBA Express loan caps the loan amount at $150,000 to limit the lender’s risk since the borrower’s real estate collateral is not required. Instead, the business assets are used to collateralize the SBA Express loan and the main approval requirements are good personal credit & some liquid assets.
In 2014, the Small Business Administration (SBA) introduced the Small Loan Advantage loan program some lenders refer to as the SBA Express loan. After the “The Great Recession”, many homeowners lost their real estate equity which is used as collateral requirement for a SBA 7(a) loan approval in most cases. Consequently, many perspective borrowers were unable to secure financing because they lacked the equity in their home required to collateralize their loan request.
Since the collateral used to secure an equipment lease is the equipment being financed and the collateral for the SBA Express loan is the other business assets, these two debt financing products are totally compatible! Furthermore, since the underlying concept of the SBA Express loan is to provide working capital, financing the equipment needed to run the business provides the franchise owner more working capital so the underlying reason for both products is the same.
“Since the collateral used to secure an equipment lease is the equipment being financed and the collateral for the SBA Express loan is the other business assets, these two debt financing products are totally compatible!” Capital Leases – Leasing Equipment to Own The most common financing option available for franchises using equipment leasing is a capital lease. The main purpose of a capital lease is to finance the equipment purchase while preserving the owner’s working capital. Franchisees can finance the purchase of their proprietary equipment, security systems, computer hardware & software, flooring, outdoor signage and other tangible items needed to run the business using an equipment lease. The owner(s) will be required to personally guarantee equipment lease unless the business has been established and profitable over many years. The required down payment ranges from 1 lease payment up to 20% of the amount financed. Lease documentation fees may range from $95 to $495. Repayment terms typically range from 12 months up to 60 months. All payments made are tax deductible so the payments will lower business’s taxable income and, in turn, tax liability. Since most owners plan to keep their equipment long term, a typical capital lease offers a $1.00 or $100.00 end of term purchase option. In short, an equipment lease is used to finance the purchase of all equipment needed to manage the franchise; thus, preserving the franchisee’s working capital.
Small Business Administration (SBA) Express Working Capital Loan This government backed loan is designed to provide working capital ranging from $20,000 up to $150,000 for start-ups and existing businesses. The main purpose of this loan is to provide the funds necessary to support the company until the business generates positive cash flow. The loan process takes 60 – 90 days to complete on average before the loan is funded. The SBA loan process does require an attention to detail to complete the application and contingency requirements. If the use of the loan funds is to finance a new location, the loan can be approved in advance, however the funds will not be distributed by the bank until the new location has received a certificate of occupancy. This insures that the money will be used to operate the new business & will not be used to pay for build out expenses. The interest rate for this loan is calculated by starting with the prime rate as published in the Wall Street Journal which is currently 3.75%. The bank charges a 2.75% risk premium on this loan so the interest rate is 6.5% now. This is a variable rate loan which changes quarterly when the Fed Board of Governors decides to raise or lower the prime rate. The most recent .25% rate increase implemented at the end of last year raised the SBA
“It is very unusual when two financing products are complementary & can be selected jointly to finance a new business. With the introduction of the SBA Express loan, this is no longer the case.”
Paul Bosley
loan payments on a $150,000 loan by approximately $18.00 per month. The repayment term is 10 years and there is no pre-payment penalty so if the franchisee is extremely profitable, the loan can be prepaid to save interest expense. The purpose of using SBA loans and equipment leases is to access other people’s money (OPM) and preserve the franchisee’s capital. The goal is to borrow the money at a cost that is less than the business profit percentage. For example, if a $100,000 equipment lease provides a 12% return to the lessor and an $150,000 SBA working capital loan has a 6.5% interest rate, the business owners will be borrowing $250,000 at approximately a 8.9% blended interest rate. Assuming the business operates at a 15% profit margin, the franchisee is using OPM at a cost that at much less than the anticipated return on capital! In conclusion, equipment leases and SBA Express loans are complementary products that will enable an entrepreneur with good personal credit to finance the opening and expansion of a franchise. The best part about this financing combination of a SBA Express loan & equipment lease is that the collateral is your business assets; not your home, just your business assets! Paul Bosley is a Managing Member of Business Finance Depot. www.businessfinancedepot.com
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Big O Tires® BIG O Is Your BIG Opportunity. With more than 50 years in the tire and automotive maintenance industry, Big O Tires® is proud to be a worldclass leader. As we continue to thrive in an ever-expanding market, we invite you to be a part of the exciting opportunities as a member of the Big O Tires® family. Big O Tires® is proud to be one of the most progressive tire and automotive service franchises in the nation. When you join our family, we supply you with a powerful set of tools to help bring your business to the front of the pack: This website and any request for information or forms are not a franchise offering or an offer to sell a franchise.
Boulder designs If you are looking to own your own business, or add a new product line to your existing business; then Border Magic® may be what you’re looking for. Border Magic® provides durable continuous concrete landscape edging, walkways, and decorative stepping stones that have the look and feel of real brick or stone. If you are looking for a rewarding career, Border Magic® may be what you’re looking for. Boulder Designs is a simple system with low entry cost and minimal inventory requirements. Our signage can turn any business, park, memorial, or
Clayton Kendall Clayton Kendall provides a simple, easy to use e-store platform that connects your franchisees to Clayton Kendall’s integrated front-to-back inventory management system allowing for the creation, production, fulfillment, distribution and shipping of all your marketing and sales materials (uniforms, signage, branded merchandise) to be controlled with a
Coverall®
• Experienced franchise system. • Competitive marketing strategies. • Dynamic and perpetuating consumer engagement • Comprehensive start-up training. • Sales guidance from a network of retail experts. • Multiple warehouses stocked to meet inventory demands. • National and regional meetings/conventions. • Access to exclusive marketing resources. • On-site visits and strong support from Franchise Business Consultants. Contact us today! www.bigofranchise.com
subdivision into a landmark. In addition, the flexibility of Boulder Designs allows you to transition from your job into business ownership gradually as you do not need employees or a store front to start off like other opportunities. If you are looking for a rewarding business, or developing a niche market, Boulder Designs® may be what you’re looking for. Contact: Butch Mogavero Phone: 844-247-2632 or Email: info@bordermagic.com -info@boulderdesigns.net Website: www.bordermagic.com -www.boulderdesigns.net
simple click of a mouse. Clayton Kendall is the single source marketing solution for national franchises such as Massage Envy, Orange Theory Fitness, European Wax Center, and Blaze Pizza. Contact: Dan Broudy, CEO Email: dan@claytonkendall.com Phone: 412-798-7120 (1-888-799-4757) Website: claytonkendall.com
Coverall began in 1985 as a three-person company headquartered in San Diego, California and now supports more than 8,000 Franchised Businesses in 90 markets across the United States and Internationally. Those independently owned and operated franchised
businesses and their employees professionally clean over two million square feet of commercial office space every day. With Coverall, becoming your own boss is easier than you might think, no experience necessary, and financing is available! Our Initial Training Program emphasizes franchised business operations and professional commercial cleaning tools and techniques, helping prepare you to run your business. The Coverall® Program sets the bar higher for healthy cleaning and differentiates Coverall franchised businesses from traditional janitorial service providers in the market. Start your franchised business with the leader in healthier office cleaning! Website: www.coverall.com/franchise-opportunities
Foot Solutions
• Satisfaction of Helping Others
What Are You Looking For In A Business?
• Opportunities from $85,000 - $240,000 Single and Multi-unit
Coverall is a leading franchised brand in the commercial cleaning industry and one of the most respected franchisors of professional office cleaning companies focused on killing germs, removing soil and helping to create cleaner, healthier work environments. We help people start their own franchised businesses using the Coverall® brand, and processes, so they may deliver commercial cleaning services to their customers.
• Reasonable Hours • High Margins • Low Labor Requirements • High Consumer Retention • Not Impacted by Economy • Not Seasonal • Fastest-growing Market Age 40+
Franchising USA
• Leading name-brand recognition.
Foot Solutions is the world’s largest specialty wellness franchise focused exclusively on helping people feel good from the feet up. For more information, visit www.footsolutions.com, email fscorp@footsolutions.com, or call 770-916-5997.
FRANFUND FranFund provides a comprehensive set of funding solutions for your new or expanding business including our exclusive FranFundSelect® program which provides working capital loans for up to $150,000. This program enables lightning fast approvals and funding in 5 to 7 business days or less with no personal assets, no SBA guaranty fee, no training certificate required, and minimal paperwork.
Generation NEXT Franchise Brands At Generation NEXT we are focused on changing the landscape of the vending industry and continually strive to redefine the purchase experience between machine and consumer. Across all of our franchise concepts, innovation, technology and evolution are at the core of our business approach. From our revolutionary and groundbreaking Reis
International Franchise Professionals Group
Our team of funding experts are here to work with you to create a customized capitalization solution for your specific situation, whether you’re launching a new business or expanding a current one. After all, it’s our mission to get your business up and funded in a fraction of the time! Phone:817-730-4500 Fax:817-546-1291 Website: www.franfund.com Email: info@franfund.com Contact:ksenay@franfund.com
& Irvy’s Robotic FroYo machine, the world’s first ever frozen yogurt served by robotic technology, to our concept that pioneered the movement of healthy options; Fresh Healthy Vending which introduced healthy options to a sugar-filled industry, we are innovators and developers of the future of the vending industry. Contact: Paul Schmidt Phone: (888) 902-7558 Email: marketing@gennextbrands.com Website: www.gennextbrands.com
IFPG to power their business. All of these individuals understand the value of being associated with IFPG.
The International Franchise Professionals Group (also known as IFPG) is a membership based organization that has over 700 members. Our members consist of Franchisors, Franchisor Brokers, Lenders, and other Franchise Professionals that help potential candidates in the process of buying a franchise.
The IFPG is a strictly membership based organization that does not participate in any referral fees from our franchisor members or our brokers, thereby allowing all of our members to work freely together. Our long-term success is predicated on retaining our members and providing all the tools needed to help you sell more franchises, and close more deals.
Hundreds of nationally recognized franchise companies have chosen the IFPG and its members to represent their brand; hundreds of experienced franchise consultants and brokers have chosen the
If you’re a franchisor, franchisor broker, or another profession that serves the franchising industry call us today at (888) 977-IFPG to learn about membership opportunities.
Kid to Kid
why Franchise Grade ranked Kid to Kid as the #12 Best Franchise for 2015.
For more than 20 years, Kid to Kid franchisees have been a fixture in their local communities, serving parents and families with growing kids. This recession-thriving store concept allows parents to sell their outgrown kids clothes and buy gently-worn toys, clothes, and baby gear at affordable prices. Kid to Kid stores provide a bright, clean, and upscale experience for customers that result in nearly 70% gross margins to the franchisee. With more than 117 stores in operation and a track record of solid franchisee earnings, it’s easy to see
Impact Permitting Impact Permitting has announced the launch of its franchise model for the state of Florida in response to the sharp increase in building throughout the state. Franchise opportunities, with an exceptional business model, extensive class room and inthe-field training and consistent ongoing support, are being offered to qualified candidates. Initial investment is $35,000 with little additional start-up costs as the franchise can be operated initially out of one’s home. No prior construction or permitting experience is needed. Impact Permitting helps companies and individuals
Kid to Kid is seeking energetic individuals with great management skills who want to make a difference in their community while earning a living. Our owners enjoy operational, technical, marketing, and financial support from our corporate headquarters and a great community of successful store owners who work together to continually improve. For more information call our business development team: 801 359 0071 ext 100, or email sales@bcfranchise.com.
through the maze of government rules and regulations that cover the permitting process by representing them at government permitting offices. Impact Permitting has grown from a small business with just three customers in 2006, to a prosperous business with a large and growing client base, comprised of both local and national companies, with a reputation earned by striving to provide the highest levels of service and care. Phone: 561-440-1001 Website: www.impactpermitting.com Email: info@impactpermitting.com Contact: Nadine Austerfield
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Little Caesars
continue to receive support, expert analysis and consultation from corporate as their business grows.
Little Caesars offers strong franchisee candidates opportunities in select locations across the country. As America’s fastest growing pizza chain, Little Caesars provides candidates an opportunity for independence with a proven system, a simple operating model and strong national brand recognition.
Little Caesars’ requires candidates desiring to open one store to have a net worth of $150,000 with a minimum of $50,000 in liquid, unencumbered assets (such as cash). Franchisees must also be able to obtain financing to cover the total costs of opening a franchised location.
Franchisees benefit from a comprehensive training program that focuses on all aspects of the business, including training, architectural and construction services to help with design, preferred lenders to assist with financing, the ongoing research and development of new products, and effective marketing programs. Franchisees
Le Macaron Development LLC Le Macaron French Pastries boutiques bring luxury to life with French macarons, gourmet chocolates and more. Our signature French macaron includes the best ingredients to create tasty, sweet morsels of crisp meringue and fillings made with gluten-free ingredients and no preservatives. The result? A delicate, sophisticated delicacy that invites customers to appreciate the quality of a thing done right. With a unique no-bake concept, Le Macaron Development LLC is poised for national growth in premier franchise locations alongside our more than 40 current
Midas Midas, a recognized brand throughout the world and highly renowned name in complete car care, is proud to be one of North America’s original franchise opportunities – and one of its best. With Midas, you experience the best of both worlds - the support of an experienced franchise organization and the satisfaction of operating your very own auto service enterprise. As a Midas franchisee, you become a trusted name the day you open your doors for business. Building consumer trust is at the heart of our brand. We work every day to earn that trust by providing expertise, responsiveness, and the best value to every customer every time. Benefit from nearly 60 years of “The Midas Touch”
pinot’s palette Pinot’s Palette is a pioneer of the paint and sip experience – a revolutionary way to enjoy art and wine, meet new people and bond with friends. #1 paint and sip for franchisee satisfaction – Pinot’s Palette is a unique, art-inspired entertainment concept catering to adults, corporations and kids. By combining art and wine into a single concept, Pinot’s Palette now offers an inclusive, social activity for guests to enjoy with friends, family or work team members.
PIRTEK USA PIRTEK is the fluid transfer solutions leader in sales and service and the only franchise of its kind in the United States. With more than 30 years of experience in this field, PIRTEK boasts more than 400 Service & Supply Centers and a fleet of Mobile Service Vehicles in 23 countries. Powered by an industry-leading approach to sales and service and backed by a corporate center passionate about its franchisees and customers, PIRTEK offers unmatched service and logistics. This is a sales-driven, service-based business that
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For the sixth year in a row, Little Caesars was named “Best Value in America”* of all quick-serve restaurant chains. Phone: 800-553-5776 Email: USdevelopment@LCEcorp.com Website: www.LittleCaesars.com
locations. Our modern, attractive boutiques are typically housed within 800 to 1,000 square feet, ideal for outdoor shopping centers, enclosed malls, tourist areas and a variety of different high foot traffic site options. Along with eat-in and carryout options, franchisees can also provide custom and pre-packaged gift selections as well as catering and delivery services. For more information visit www.lemacaron-us.com/franchise-available Contact: Kathe Moore Phone: 941-685-2334 Email: kathemoore@lemacaron-us.com Website: www.lemacaron-us.com
Midas has built a stellar reputation in the automotive service and repair industry nearly six decades. We want to help you succeed. Before you open a location and as you continue to operate your shop, Midas will help you with the following: • Business management system for your shop • New franchisee orientation • Ongoing training and training resources • Operational support. • Development support • Optimizing and marketing your business: Join Midas today by calling 1-800-365-0007 or visiting www.midasfranchise.com! This website and any request for information or forms are not a franchise offering or an offer to sell a franchise.
Pinot’s Palette’s entertaining environment, expert guidance from trained local artists and exceptional customer experience creates strong word of mouth, community recognition and a loyal customer base. Pinot’s Palette looks for franchisee partners who love to entertain and values that fit comfortably within the Team Pinot culture. Not art experience required! Franchising since 2010 with more than 130 locations in 33 states, Pinot’s Palette is an established, awardwinning concept leading the paint and sip industry. Website: www.PinotsPalette.com/Franchise or Email: Franchise@pinotspalette.com
focuses on repairing and maintaining hydraulic- and pneumatic-powered machines. Although the brand might sound like an opportunity better suited for someone who can work a wrench, it’s a business well-matched for entrepreneurs who understand the value of building relationships and are prepared to capitalize on the opportunity to thrive wherever industrial equipment is used—and it is used virtually everywhere. For more information contact: Gwyn T. O’Kane, CFE, Vice President of Franchise Development, PIRTEK USA Phone: 321.504.4422 Email: gokane@pirtekusa.com Website: www.pirtekusa.com
Remedy Intelligent Staffing Remedy Intelligent Staffing and Westaff offer premier workforce management services, including recruiting and screening professional job candidates, payroll and time attendance management, on-site supervision, and specialty staffing solutions to a wide variety of client companies, including manufacturing, industrial, clerical, administrative, accounting, finance, information technology, and professional services.
Restoration1® Restoration1® is the fastest growing restoration franchise in the emergency restoration industry for mold, water, fire and smoke damage, handling jobs of all sizes across the nation for residential and commercial property’s. Our business is based on local and regional relationships with insurance adjusters, building inspectors, subcontractors and policy holders. It is always in high demand and not affected by economic trends because it is based on necessity, not discretionary spending. Our model is a powerful opportunity for the right
Sports Clips
Our team of experts in human resources, technology, risk management, and labor and employment law, ensure that we deliver on our commitment to consistently provide dependable, and flexible employees to meet and exceed our clients’ needs. Contact: Steve Mills, President Phone: 877-478-4033 Email: franchise@employbridge.com Website: www.remedyfranchise.com
candidates, as it involves no inventory, no brickand-mortar location and high-volume growth that continues through almost any economic climate. Our ethics, professionalism, quality and availability are carried out at each of our franchise locations. Our team is committed to giving franchisees the support system they need to succeed in these same areas. Restoration 1 Franchisees can reach full potential with our superior training, technical support and in-territory support. Contact: Gina Roberson Phone: 800-993-0803 Email: gina@restoration1.com Website: www.restoration1.com
FORBES as a “Top Ten Best Franchise” to buy for its investment category.
Established in 1993 and franchised in 1995, Sport Clips is one of the nation’s leading franchises with more than 1,500 stores nationwide. Founder and CEO Gordon Logan is a pioneer of the unique sports-themed haircutting franchise, including the development of the Sport Clips All-Star haircutting systems, operating procedures, and marketing programs. It’s a great recession-resistant business that’s all cash, no receivables, and no haircare industry experience is necessary.
Qualified veterans who are interested in owning a Sport Clips are eligible for a 20 percent discount off of Sport Clips’ franchise fee of $59,500 through participation in the Veterans Transition Franchise Initiative, also known as VetFran, which was created in 1991 during the Gulf War. At Sport Clips, it’s good to be a guy but it’s great to be an owner! Visit sportclipsfranchise.com to learn more. For more information, contact Karen Young:
Sport Clips is ranked by Entrepreneur Magazine as one of the top 20 “Fastest-Growing Franchises” and in the top 20 in the “Franchise 500.” It is also ranked by
Email: franchise.recruitment@sportclips.com Phone: (800) 872-4247 x. 1 Website: www.sportclipsfranchise.com
Sprout Financial
as we work from STATED information and your good personal credit history.
Sprout specifically created this financial program to help new & existing Franchise owners. We strive to ensure you have the working capital needed to promote a thriving business.
Contact: Russell Hibbert Phone: 800.358.1052 Email: contact@sproutfin.com
NO collateral required, NO financials submitted
Website: www.sproutfin.com
SUBWAY®
way they want - using freshly baked breads, select sauces and a variety of delicious toppings.
When you own a SUBWAY restaurant, you’re part of the world’s largest restaurant chain and one of its most recognized brands, and you’ll get the support and experience that comes with it. ®
Be part of a winning brand that keeps customers coming back for delicious meals made just the way they want. SUBWAY® is the undisputed leader in fast, healthy food. Our easy-to-prepare sandwiches are made to order right in front of the customer, precisely the
When you join the SUBWAY® family, you’ll get world-class support before you even make your first sandwich and well beyond. Our franchise support system features: Training, product development, advertising, purchasing cooperative, field support and much more. Contact: Ralph Piselli, Franchise Sales Manager Phone: 203 877 4281 Email: Franchise@subway.com Website: www.subway.com
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Sunny Days In-Home Care Sunny Days In-Home Care is a leading provider of nonmedical, in-home personal care service for seniors and disabled adults. Founded in 2011, the Pittsburgh-based franchise company is focused on providing high-quality assistance to those who aren’t able to care for themselves so they can continue to live a dignified and independent life.
In addition, Sunny Days also offers franchisees a contribution of $10,000 of their initial franchise fee toward grand-opening marketing efforts. As part of the rapidly growing senior care industry, Sunny Days stands apart from its competitors by offering one of the lowest startup costs and highest care fulfillment rates in the industry.
With an experienced development team that has nurtured and grown multiple locations over the years, Sunny Days extends that same high-quality assistance to its franchisees by offering assistance with startup,
Contact: John Bennett Phone: 724-260-5186 Email: info@sunnydaysinhomecare.com Website: http://sunnydaysfranchise.com
The Interface Financial Group – IFG 50/50
• No storefront to own, lease, or maintain • No Inventory or stock to purchase • No extensive travel because IFG franchisees do business locally • Business-to-Business, professional environment with regular business hours of operation • Flexibility to relocate for part of the year or permanently and continue doing business Our franchisees are excellent communicators, relationship builders with decision-making and problem-solving skills, and much more sales & marketing oriented. IFG has been in the ‘invoice discounting’ business since 1972, and employs its franchise network in the US, Canada, New Zealand, Singapore, the UK, Ireland, Australia, Mexico and South Africa.
The Interface Financial Group – IFG 50/50 is an affordable home-based franchise that provides short-term working capital to small and medium-sized businesses by purchasing current, quality invoices at a discount, thus accelerating the client’s cash flow and growth. All transactions are syndicated 50/50 with the franchisee and the franchisor, and that means less working capital required to fund transaction: IFG does the bulk of the due diligence and the ‘paperwork’ for the transactions, and IFG 50/50 franchisees will concentrate their efforts on building the referral relationships – they do the ‘people work’. Key advantages of being an IFG 50/50 franchisee include: • No staff to hire, fire, or manage
TopFire Media TopFire Media is an integrated digital marketing and public relations agency, specializing in the franchise industry. Our clients benefit from our years of experience in franchise SEO service, public relations, media relations, content writing and management, social media marketing, and web design. We work to bring all of these elements together to achieve a common goal – our clients’ success.
Uptown Cheapskate At Uptown Cheapskate, we buy and sell stylish clothing for teens and twenty-somethings in a fastpaced, upscale retail environment that enjoys nearly 70% gross margins. Our inventory changes every day as our stores hand-select current fashions and price them using Uptown Cheapskate’s proprietary software. Our ideal candidates pair their love of fashion with management experience, and are energetic leaders to their store teams. Our franchise owners are trained in person at corporate headquarters and in internship stores, and are given access to a robust training portal for franchisees and store employees. This tool is best-
Veterans Business Services Veterans Business Services provides the most advantageous franchise acquisition terms for Veterans and provides innovative entrepreneurial training for qualified Veterans seeking grants under the VA Vocational Rehabilitation Program. Veterans Business Services (“VBS”) specializes in entrepreneurial opportunities for Veterans and has an extensive reach into the Veterans community and can generate significant interest from qualified Veterans who wish to start a franchise or small business. VBS offers multiple marketing methods that have proven effective with helping franchise organizations with their expansion plans. Utilizing custom email marketing
Franchising USA
marketing, operation practices, market analysis, plus ongoing training.
www.interfacefinancial.com
Our integrated approach combines our public relations and franchise SEO service prowess and is designed to generate brand awareness, drive consumer engagement, and build credibility for your company. Phone: (708) 249-1090 Fax: (708) 957-2395 Website: www.topfiremedia.com Email: info@topfiremedia.com Contact: Matthew Jonas
in-class and allows new employees and franchisees to rapidly learn the ins and outs of the business. You’ll also receive personalized operational support, professional marketing design, and assistance with everything from site selection to financing to operational tools. Explore our award-winning franchise that has rapidly grown to more than 50 locations across the United States, and learn why our franchisees find financial and personal fulfillment as Uptown Cheapskate store owners. For more information call our business development team: 801 359 0071, ext 100, or email: sales@bcfranchise.com
campaigns, news press releases, and online franchising e-magazine articles, VBS gets the message to qualified Veterans who are invested in starting a franchise. VBS supports service disabled Veterans who are enrolled in the self-employment track within the Veterans Administration and provides outreach efforts to transitioning military through TAP and ACAP programs. As a graduate business of the Entrepreneurial Bootcamp for Veterans (“EBV”), we also assist other graduates of EBV and provide coaching support through mentoring programs. VBS is where Veterans turn to make their franchise dreams a reality. Contact: James Mingey Phone: 202-349-0860 Email: info@veteransbusinessservices.us Website: www.veteransbusinessservices.us
JOIN THE
FASTEST GROWING
PIZZA CHAIN IN AMERICA! *
SELECT AREAS STILL AVAILABLE! NON-TRADITIONAL OPPORTUNITIES ALSO AVAILABLE!
Visit LittleCaesars.com or call 800-553-5776 *Based on 2015 U.S. store growth. ©2016 LCE, Inc. 56333
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