Franchising usa
Issue 7 - may 2013
T he ma g a z ine for franchisees $5.95 www.franchisingusamagazine.com
Bennigan’s is Back and
Bleeding Green
10 Steps
to improved f i n a n c i a l h e a lt h
W h y yo u should buy a franchise LATEST NEWS
Veterans in Franchising
Special supplement part II
FINANCIAL ADVICE FROM THE BANKS
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Franchising usa T he ma g a z ine for franchisees
FRANCHISING USA VOLUME 1, ISSUE 7 MAY 2013 publisher: Colin Bradbury. colin@cgbpublishing.com
EDITOR: Christie Hall. christie@cgbpublishing.com
SALES DIRECTOR: Vikki Bradbury. vikki@cgbpublishing.com
SENIOR SALES EXECUTIVE: Jenn Dean. jenn@cgbpublishing.com
DESIGN: Jejak Graphics. jejak@bigpond.com
COVER IMAGE: Paul Mangiamele, Benningan’s Courtesy of: The Dallas Business Journal
CGB PUBLISHING 676 Wain Rd. Sidney, BC V8L 5M5 CANADA Sales: 778-426-2446 Editorial: 778-426-3452 www.franchisingusamagazine.com
Proud member of the IFA:
SUPPLIER FORUM International Franchise Association 1501 K Street, N.W., Suite 350 Washington, D.C. 20005 Phone: (202) 628-8000 Fax: (202) 628-0812 www.franchise.org
from the
Editor Taking Inventory
My family is moving in a few weeks. It’s not a big move – only a few blocks. But a move of any distance still requires the same amount of effort. Everything must be packed. I will admit, there’s a weird part of my brain that enjoys packing. I think it’s because I’m a “list person” and packing, at least in my world, requires many lists, which results in many opportunities to cross things off lists, an accomplishment which fills me with unreasonable joy. But before the packing, there’s the sorting and the purging and the organizing. I was dreading these activities. While we have only lived in our current home for just over four years, we have somehow accumulated a ridiculous amount of “stuff.” It’s been tucked away neatly in closets and under-the-stairs storage, but now we have to deal with it: old sports equipment, clothes that haven’t been worn in several seasons, piles and piles of artwork brought home from school, and, my personal weakness, a never-ending collection of books. Several weeks ago, I had a rare weekend alone at home. I dug through every closet and ruthlessly donated, recycled, and tossed anything that I couldn’t solidly justify keeping. And you know what? I loved it! There is freedom in getting rid of the burden of extraneous items and “stuff”. Do you ever feel like your business could use a bit of a purge? It could be in the physical sense – we all have desk drawers, or closets, or corners where unnecessary
things pile up: paperwork that should be filed or recycled, mostly empty bottles of cleaning supplies, old lost and found items, broken tools or equipment. Maybe it’s time to focus on one area at a time and do away with anything that is not essential to the successful running of your business. It might also be useful to pull out your business plan and give it once over to see if there is anything that is no longer useful. Could your advertising money be spent more efficiently if you did away with campaigns that don’t deliver? Do your staffing numbers make sense? Are you moving product, or is it piling up? These are all great questions to ask occasionally in any business. Purging unnecessary items allows us more mental and physical space to breath, think, and work effectively. As you sort through “stuff” of your business, there’s one tool that you won’t need to toss in the trash. Franchising USA’s digital format will not clutter up your desk or workspace. We give you franchising advice, news, and information at your fingertips, anytime and anywhere. We hope you enjoy this issue of Franchising USA. Along with our regular features, we are excited to bring you a closer look at the Automotive Franchising industry, as well as Part Two of our special Veterans in Franchising supplement. So relax in your newly clutter-free workspace, and spend some time catching up on the “stuff” that really matters, with Franchising USA. Christie Hall Editor
The information and contents in this publication are believed by the publisher to be true, correct and accurate but no independent investigation has been undertaken. Accordingly the publisher does not represent or warrant that the information and contents are true, correct or accurate and recommends that each reader seek appropriate professional advice, guidance and direction before acting or relying on all information contained herein. Opinions expressed in the articles contained in this publication are not necessarily those of the publisher. The publication is sold subject to the terms and conditions that it shall not be copied in whole or part, resold, hired out, without the express permission of the publisher.
Franchising USA
MAY 2013
On the Cover 10 Cover Story
Bennigan’s: Back and Bleeding Green
12
Ten Steps to Improving The Financial Health of Your Business By Year’s End
31 Veterans in Franchising Supplement –
Part Two
79 Why Should I Buy a Franchise?
Daniel Brunell, Dearborn West
Ron Edinger, Liquid Capital
83
62
70
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Contents
In Every Issue 06 Franchising News Announcements from the industry 23 Feature Article Automotive Franchising 28 Franchisor In Depth Great Clips
23
64 Women in Franchising Gloria Plaisted 75 About Franchising – from the IFA Lending to Franchises Reaches Highest
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Level Since Recession
Expert Advice
16 Why Is Everyone Talking About Mobile? Dan Kim, Red Mango 62 Franchising Your Business: A Growth Strategy Jack Eberenz, Franchise Integration
20
12 Ten Steps to Improving The Financial Health of Your Business By Year’s End Ron Edinger, Liquid Capital
79 Why Should I Buy a Franchise? Daniel Brunell, Dearborn West 82
Leasing Commercial Space? 10 Questions for Franchisee Tenants to Ask the Landlord’s Real Estate Agent
16
71 Canadian Expansions of US Franchise Systems: Part II Edward Levitt, Aird & Berlis LLP
Dale Willerton, The Lease Coach
Franchisor in Depth
Franchisee in Action 20
76
28 Great Clips
PakMail
Franchise in Focus 76 Great Clips
Franchise Profiles 69
Red Mango
Franchising USA
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what’s new! Campaign to Voice the Needs of Businesses in Immigration Reform Debate Immigration reform must include a market-driven solution to ensure an ample supply of essential, lesser-skilled workers accessible to franchise businesses, the International Franchise Association announced during the launch of an integrated advocacy campaign to voice the needs of franchise business owners in the national debate over comprehensive immigration reform. In addition to its efforts in Washington, IFA is going beyond the Beltway, talking to real job creators across the country about what they are facing on the front lines of our national economy. Patrick Walls, President of the Las Vegas-based Capriotti’s Sandwich Shop, Inc., wrote in the Las Vegas Review-Journal that: “America’s economic future depends on franchises such as Capriotti’s being able to invest, expand and hire. Comprehensive immigration reform could be the catalyst that drives that growth, as long as it is actually comprehensive and true reform.” IFA’s campaign has already included meetings with more than 20 congressional offices in both the House and Senate about the needs of the franchising community as important discussions continue on comprehensive immigration reform. Contact: www.franchise.org
The Growth Coach Celebrates its 10th Anniversary When Dan Murphy started business coaching in 1992, it was his mission to help small business owners gain more success, personal balance, and free time. He was passionate about helping them discover greater clarity, focus and better strategies to earn more, work less and enjoy richer lives. “Small business owners have always been my heroes,” he said. “When you help an owner and business improve, all of the employees and their families are better off, and so are their suppliers, customers and entire community … the positive ripple effect of business coaching is immense and extremely satisfying.”
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“While I am pleased with our progress the first 10 years, we have miles to go before we rest. It pains me greatly to know there are way too many small business owners, managers and sales professionals throughout North America who need our help now but we unfortunately don’t have a Growth Coach located nearby. As such, I’m dedicated to never-ending innovation and growing our franchise system to at least 300 franchise owners in the next 5-7 years to improve the businesses and lives of tens of thousands of additional small business clients. That’s my mission and calling and it’s strong as ever, said Murphy.” Contact: www.TheGrowthCoach.com
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University of Miami Grads Continue College Hunks Hauling Junk Legacy Two University of Miami alumni are following in the footsteps of the College Hunks Hauling Junk founders, opening a franchise in Miami 10 years after the franchise network was born there. Christopher Poore and Ron Rick graduated from the University of Miami in 2012 with degrees in Entrepreneurship. As part of an Entrepreneurial Consulting class, the duo spent a semester studying College Hunks Hauling Junk to determine the viability of a Miami-based franchise. “After countless hours of research, we decided that the Miami location was more than viable, and we jumped in with both feet,” said Christopher. Poore and Rick’s entrepreneurial jump mirrors the company’s founding a decade ago. In 2003, founder and CEO Omar Soliman, while a senior at the University of Miami, submitted his business plan for College Hunks Hauling Junk to the University’s business plan competition. Omar won first place and $10,000 for
his business concept. He went on to found College Hunks Hauling Junk with long-time friend Nick Friedman and a cargo van he borrowed from his mother. “Miami will always hold a special place in our heart,” said Omar Soliman, Co-founder and CEO. “Now with a franchise operating out of the area, we can once again call it home.” Contact: www.collegehunkshaulingjunk.com
The Entrepreneur’s Source Shares Expertise on Navigating the New Career Economy More and more are pursuing entrepreneurship through franchising as a viable means to take hold of their professional and financial futures. A recent report prepared by IHS Global Insight for the International Franchise Association cited there were a total of 746,828 franchise establishments in 2012. According to the report, franchise growth in 2013 continues to have a strong, positive outlook as it attracts individuals from all walks of life who are ready to “fire their boss and hire themselves.”
These individuals have realized that they no longer have to rely on an employer to determine their self-worth and success— reaching their dreams and how they get there is completely in their hands. “For budding entrepreneurs who feel they don’t have the necessary knowledge or experience to start a business on their own, franchising offers a comprehensive, entrepreneurial blueprint to set them off on the right foot and position their new businesses for success,” remarked Terry Powell, CEO and founder of The
Entrepreneur’s Source. “A franchise can be a lucrative vehicle to entrepreneurship because it combines the many benefits of business ownership with a brand name, experience and proven operating system provided by an established franchisor.” Powell added, “When choosing a franchise business to invest in, a business coach can help you navigate through the choices and save you from serious mistakes, helping you choose a fulfilling business that will positively change your life, long-term.” Contact: www.entrepreneurssource.com
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what’s new! Good Feet Offers Free Consultations and Foot Analysis During National Foot Health Awareness Month Good Feet sales consultants take each customer through a personal biomechanical balancing and measurement process to identify the customer’s primary activities and shoe style preferences. Next, the customer is personally fit with arch supports and cushions that can provide them with the comfort, balance and support. “There are so many people in our community suffering from foot, back, and knee pain. This is our way to help them become pain free,” said Dan Austad, owner of the Good Feet Stores in Oregon. Good Feet Worldwide, LLC., an international retailer of custom-fitted arch support, announced today their free foot analysis to local community members in Portland, Oregon.
arches, wearing improper footwear,
An estimated 87 percent of the general population suffers from foot-related problems, most of which can be linked to improper support for flat feet or high
the various arch supports and cushion
walking or standing on hard surfaces for long periods of time, being overweight
or suffering from sports injuries. While many people looking for relief turn to
products they see in retailers like drug
and grocery stores, Good Feet takes the process to another level.
Good Feet products are designed to support all four of the foot’s arches, which makes the personal fitting process so important. Through better foot support, a person’s body weight is more evenly distributed which maximizes stability and balance, and can reduce pressure that can cause discomfort, not just in the feet, but upwards through the legs, hips and back. Contact: www.goodfeet.com
PRO Martial Arts Reaches Franchise Milestone PRO Martial Arts has now sold over 100 licenses to studio franchises – a new milestone for the company. PMA studios can now be seen in 21 different states across the region, from California to Washington, D.C. “It’s great to see so many people wanting to own their own
business and get involved in the community,” said PRO Martial
success across the country. The majority of Pro Martial Arts studios that have matured more than three years gross six figures in profit, according to Pro Martial Arts founder Samane. Pro Martial Arts franchises are a perfect fit for semi-absentee business owners who want an investment that delivers a high return, but one that does not require their full-time attention.
Arts founder Ed Samane. “I am thrilled it’s grown so much in such a short amount of time.”
“I think the reason it’s been so successful is because people who decide to own franchises are smart business people who are truly dedicated to helping their community,” said Samane.
Pro Martial Arts franchises have a proven track record of business
Contact: www.promartialarts.com
Franchising USA
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Growing an Eco-Friendly Family activities: turn packaging items like cartons or plastic sleeves into new art projects -- instead of sending them to a landfill; sew an old pillowcase into a new tote bag; use it to replace plastic bags when you shop; walk, don’t drive, to the neighborhood playground; set up a recycling station in your home; and, read books with an eco-friendly theme with your children.
At Kiddie Academy, Earth Day,
kindness, and manners -- all aspects
celebrated this year on April 22,
of good citizenship that are core to the
is more than a global campaign to
education-based childcare provider’s
raise awareness about protecting the
curriculum.
environment. Earth Day is also an
To help parents foster their children’s
opportunity to reinforce the importance of values such as respect, sharing,
eco-education at home, Kiddie Academy offers the following ideas for Earth Day
“As you work these activities into your family schedule, be sure to explain to your children why these activities are important and how they are good for our planet,” said Claire Haas, vice president of education for Kiddie Academy. “It’s important to do more than talk to your children about being good citizens of the earth; you also need to be a ‘green’ role model. Children learn from the actions of those around them, and imitate the actions and the attitudes of the adults in their lives.” Contact: www.kiddieacademy.com
Elements Therapeutic Massage Partners With iMassage, Inc. According to Associated Bodywork & Massage Professionals (ABMP), each year around 60,000 therapists enter the field while 50,000 existing practitioners leave the profession, with the average career span being around six years. This statistic inspired Eric Stephenson, Director of Education for imassage, to take action. “Our company was founded in 2007 to address the issue of career longevity for massage therapists,” says Stephenson. “Everything we do within imassage supports this mission: the higher purpose behind what we do. Elements shares this
purpose and we are working together to provide the highest quality work environment for massage therapists within Elements’ 120 franchised studios nationwide by focusing on career longevity and continuing education.” “I see a lack of emphasis on optimal body mechanics and ergonomics within massage schools along with a general business naiveté amongst practitioners,” he says. “This becomes even more problematic with the lack of a supportive work environment to sustain therapists’ health and well-being.” The partnership will include continuing
education initiatives for franchise owners and therapists in video as well as hands-on formats with a larger scope to shine a light on the issue within the profession. According to Stephenson, “The vision for the partnership is to make working at an Elements studio the equivalent of ‘getting your Master’s degree’ in massage therapy. Whether you are a therapist for Elements for six months or six years, working at an Elements studio will not only make you a better therapist but a better person.” Contact: www.imassageinc.com info@imassageinc.com 859-338-4418
Franchising USA
cover stroy
B enniga n’s
B enni g an ’ s :
Back and Bleeding Green Bennigan’s is back. And they’d like you to join them to celebrate their return! With twenty new franchises set to open this year, the neighborhood pub is re-vamped and ready to serve up their signature Irish hospitality alongside an extensive menu of old favorites and exciting new items. The franchise has shown a remarkable resilience over the past few years, and is stronger and more successful than ever. With CEO Paul Mangiamele at the helm, the popular restaurant chain is moving forward with plans for expansion and renewal. The Bennigan’s story is so remarkable, in fact, that Mangiamele has recently released “Bennigan’s Return To Relevance...Bleeding Green 25/8” which debuted at the Restaurant Leadership Conference, April 21-24 in Scottsdale, Arizona. No one can tell the Bennigan’s story better than Mangiamele. Below is an excerpt from the book’s introduction. “Bennigan’s Return to Relevance...Bleeding Green 25/8” is available from Amazon.com.
Bennigan’s Return to Relevance...Bleeding Green 25/8 By: Paul Mangiamele
Introduction Everyone loves a comeback story and the tale of Bennigan’s journey to Chapter 7 and back is a classic. Chapter 7 bankruptcy, a proceeding in which the company stops all operations and goes completely out of business, is about as bad as it gets. And when Bennigan’s filed for Chapter 7 in July of 2008, it would have ceased to exist except for the franchisees that continued to carry the company banner and the investors who
Franchising USA
recognized and respected the brand equity and brought Bennigan’s out of bankruptcy. It is because of their passion for Bennigan’s that I am here, honored and humbled to be at the helm of this iconic brand. When I first started as the new President and CEO of Bennigan’s Franchising Company in May of 2011, colleagues in the restaurant industry advised me against an attempt to bring back a “dead brand.” In the middle of an interview, one reporter looked me dead in the eye and asked, “Did you know that no brand has ever made it successfully back from a Chapter 7 filing? What makes you think you can?” I’ve never listened to naysayers so none of that negativity fazed me. Heartfelt and sincere thanks go to the great folks who make Bennigan’s the legacy brand it is. Specifically, I would like to thank the Bennigan’s franchise community around the world for their dedication, commitment and tenaciousness. I would also like to thank our supplier partners who stuck by our side through very trying circumstances. And most importantly, a most humble thank you and deep appreciation for our Bennigan’s “Bleeding Green” Dream Team in Dallas and our GM’s and teams in all our Bennigan’s. Our brand is truly blessed to have such outstanding support, a deep bench and
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management teams that embody the words “can do.” Everywhere I go, people like to tell me about “their” Bennigan’s and what the restaurant has meant to them. It has always been a neighborhood favorite – a place that was about more than just food and drink. It was somewhere to meet friends, kick back and let your hair down for a little while. That Bennigan’s spirit lives on in everything we do, every single day. This is the foundation by which Bennigan’s was created and although the company lost its focus through the years, it is the way we are operating today.
“Everywhere I go, people like to tell me about “their” Bennigan’s and what the restaurant has meant to them. It has always been a neighborhood favorite – a place that was about more than just food and drink.”
Rebirth, resurgence, renaissance; all of these “Re’s” have been part of the formula to move Bennigan’s from serious “brand drift” back to a reinvigorated, relevant food service company that is revolutionizing casual dining. This has all been possible because of an indispensable team of trusted, experienced and respected colleagues, franchisees, store teams and vendor partners who “Bleed (Irish) Green.” Brand drift is a fact of business for many, but the smart brands survive and come back stronger than ever when they seize the opportunity to become Legendary. This is the story of how Bennigan’s became Legendary. Bennigan’s is currently looking for outstanding franchisees in markets across the United States and around the globe. You could become part of the next chapter of the Bennigan’s story. For more information: Call: Email: Web:
855-GOT-BENN (855-468-2366) info@bennigansfc.com www.bennigans.com
Franchising USA
ex per t advice
Ron Edinger, Owner, Liquid Capital of South Texas
10 Steps
to I mprovin g the F inancial H ealth of Y our B usiness by Y ear ’ s E nd Successful HVACR business owners know they can always improve how they manage things. This industry certainly has seasonal dips and peaks; but no matter what your current client list or cash flow situation, your financial health probably could be better. These tips offer 10 ways to improve the
financial health of your business in just a few months.
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1. Review past financial statements
“Take an honest look at the budget and realize what solutions are working and what solutions just add more work with little positive return. Make the necessary changes and decide what solutions are best for your business.”
Analyze financial records from the past three to five years to identify spending patterns. What expenses are consistent year after year? What expenses only show up during slow or busy months? By pinpointing these spending trends, you can identify expenditures that are necessary and those that can be eliminated. Use these as guidelines for creating a new budget plan.
2. Create a strong backbone
Once you understand your expenses, construct the new budget by incorporating a strong backbone that allows for expense cuts and seasonal dips. You can create consistency of processes by making sure to use balance sheets, statements of cash flows, and solid profit-and-loss statements. If you plan your new budget around these three areas, you ensure that your company’s spending is sustained.
3. Monitor spending
Come up with a process to monitor spending. For example, have all employees switch to credit card transactions — if they are not already — for business purchases. The result is a complete monthly statement of expenditures that is truthful. By looking at these statements, you can determine where expenses overlap and identify unnecessary purchases. Are employees purchasing goods or supplies that are already available to them without their knowledge? Are two employees in charge of purchasing the same types of goods?
4. Minimize past debts
These days it is almost unheard of for a business to be completely debt-free. However, there are plenty of solutions to help minimize the amount of debt a company carries.
There are two types of debt and the two are oftentimes related. The first is debt in the form of payment from clients that have already been serviced. For whatever reason, they have been unable to fully supply payment. The second is the debt that you owe, for example, to suppliers, utilities, and employees. These bills might be going unpaid because you’re waiting on the money from clients needed to recompense. If this is the case, consider using “factoring,” a specialized financial service that provides immediate financing secured
by credit-worthy account receivables.
Here’s how factoring works: A factoring company purchases invoices from clients, and once goods and services are delivered, it gives businesses an immediate cash advance, typically 80 percent of the invoice. Upon collection, factors pay clients the remainder of the invoice amount, minus its fee, which varies according to the amount of the invoice. This allows companies to pay their bills and employees while waiting for their outstanding client bills to be collected.
Franchising USA
ex per t advice
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ex per t advice
Ron Edinger, Owner, Liquid Capital of South Texas
business or their offerings, research similar businesses that offer the same services at more reasonable rates.
minds of your target demographic. In fall and winter months, a welltargeted marketing campaign reminds consumers to use your company when heating systems are needed or working improperly.
7. Identify financial weaknesses
The biggest reason that a budget plan fails is because it is never reviewed for success, allowing failures to go unnoticed. Take an honest look at the budget and realize what solutions are working and what solutions just add more work with little positive return. Make the necessary changes and decide what solutions are best for your business.
8. Plan for short-term fluctuations
Any small- to mid-sized business owner can explain how quickly a company can go from being profitable to finding themselves in debt. Sometimes these fluctuations are just seasonal dips, especially for HVACR companies in mild-temperature regions.
Factoring can help companies remain profitable throughout difficult months as well, keeping them from getting behind on payments. The services provided by factors – including processing and ledgering of accounts receivable, credit checks, collections and receivable administration – can be implemented during slower months to allow you to focus on operating your business without worrying about falling behind.
5. File returns and accounts on time
Once debts are minimized and bills can again be paid in a timely manner, remember to send checks on time. This will lower interest charges and reestablish trust with suppliers. Keeping accurate records of when bills are paid, such as the check number and payment date, will allow you to easily access financial history. Additionally, whenever a client pays you, make quick use of their payment in growing or sustaining your business.
6. Review your agreements with other businesses
Eventually all things change – prices are raised, deliveries are reduced. Maintain contact with the businesses you conduct relations with to make sure you’re not being overcharged. Maybe they are distributing a certain number of an item on a quarterly basis. Is there a cheaper price for distributing smaller quantities on a more consistent schedule? Ask what options are available to you. If you’re not happy with a certain
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9. Invest in the future of your company
By implementing and monitoring a budget plan, you can see where you are not only wasting money, but where you can afford to try new programs and methods. Creating a marketing plan is one way to invest in the future of your company. By maximizing consumer awareness, your marketing dollars are working hard to keep your name and services fresh in the
Another way to use your newly discovered finances for the future of your company is to invest in new products. For example, upgrading computer systems or introducing a new program to enhance filing, inventory and management would also be beneficial down the road.
10. Donate to charity
Donating to a local charity is great for all involved parties. Not only do you feel a sense of pride and purpose in your community, you are providing goods and services to people who may have otherwise never had access. Raising the standard of living in your area will motivate neighbors to further improve their own standards.
Donating to local charities also gives you a presence within your community. We are all interdependent; reaching out your hand will benefit you down the road when you need assistance.
Any time is the right time to begin taking the necessary steps to improving your business. Even the most profitable companies can benefit from a revamped budget plan. Choose one area at a time to slowing improve the financial health of your company and enjoy the results! Ron Edinger is the owner of Liquid Capital South Texas in San Antonio. He is also the principal of Liquid Capital Exchange, Inc. Liquid Capital is an international network with more than 60 offices across North America. For more information: Phone: 210-587-7267 Email: redinger@liquidcapitalcorp.com Web: www.liquidcapitalcorp.com
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Best Opportunity in the Booming Pet Industry‌ $52.8 Billion spent on U.S. pets in 2012 30% increase over the last 5 years Rapid growth plans to expand to over 400 locations 90%+ of customers pre-pay for future services, no accounts receivable
Contact us today to find out if Dogtopia is right for you Thomas Franchise Solutions 602-354-9357
www.dogdaycare.com Franchising USA
ex per t advice
Dan Kim, Red Mango
W hy I s E veryone T alkin g A bout M obile ? “Mobile devices have become our perfectlycompatible digital personas through which we express our feelings, find information we need, buy gifts for one another, look for people to date, spend hours attacking green-colored pigs with multiples species of birds, and shoot millions of pictures and videos to capture those moments that only the convenience of the phones in our pockets can.� Dan Kim
Franchising USA
Mobile. It’s hot. You’ve seen amazing statistics like how marketers will spend seven billion dollars this year on mobile ads, up 55 percent over last year, or how mobile Internet will take over desktop Internet usage by 2014. My favorite: 75 percent of Americans bring their phones to the bathroom. My second favorite: By the end of this year, there will be more mobile devices on Earth than people (http://www.digby.com/ mobile-statistics/). Yes, mobile is hot. It’s everywhere, it’s growing, and it’s evolving everyday. We’re all connected to it. We understand it. We get it. We use it... and we love it. But most importantly, we need it, especially those of us with franchised businesses that sell products or services to people just like ourselves, who, I’ll dare say, cannot live without our phones. What would you do if you were stranded in a parking lot and didn’t know how to jump start a car? Or if you were out with your friends looking for the nearest pizza joint with the highest customer ratings? My first (and only) instinct would be to look for my iPhone. And if it wasn’t charged, I’d feel hopelessly devastated (seriously). Our phone has become a pandora’s box filled with answers and solutions to life. And if you disagree, it’s only a matter of time before you’ll become a part of this evolutionary reality. Last year, the buzz was all about social media. Facebook went public, Instagram set records, and Pinterest became an addiction. We became obsessed with words like “engagement”, and not having
a presence on Twitter became almost as embarrassing as still having one on MySpace. We loved social media so much that, according to friends of mine who are marriage counselors, over a third of their clients have come in with relationship problems triggered by social media, like flirting with an ex on Facebook. Despite social media’s popularity, 2012 ended with even more buzz about mobile. Nobody could avoid talking about mobile because of the simple fact that everyone on this planet wanted or owned a mobile device. Or two. The debate over whether or not we need mobile device is no longer relevant. People look at you differently if you don’t have a cell phone number. We get super excited about 4G LTE. We panic when we lose cell reception. We exercise with our phones. We expect our phones to wake us up. We look forward to our next upgrade; we get devastated when our favorite apps like Google Maps gets
replaced. And we visit our doctors to treat repetitive stress injuries from spending an unhealthy amount of time typing with our thumbs (or maybe that has happened only to me, on two occasions). Our need for mobile has become so strong that it has made Apple, a computer company, the most popular phone vendor in the United States. Yes, that’s how much we love mobile, and that love is only getting stronger. Mobile has become very important because we no longer use it only for communicating with each other. Mobile technology has evolved into something significantly more important. Mobile devices have become our perfectlycompatible digital personas through which we express our feelings, find information we need, buy gifts for one another, look for people to date, spend hours attacking green-colored pigs with multiples species of birds, and shoot millions of pictures
Franchising USA
ex per t advice
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ex per t advice
Dan Kim, Red Mango
our phones. But can these simple realities be the only reasons why mobile is as important as it is? As business owners, we should be interested in becoming a part of the devices or channels that consumers love and spend a lot of time on. This is why we still spend the majority of our advertising dollars on traditional media like television, radio, billboard and print. But why are companies focusing a disproportionately significant amount of time on their mobile initiatives? Why, at Red Mango, is mobile the focal center of our entire advertising strategy? The answer to this question is the same reason why, in my opinion, mobile is more important to franchise systems than most other business enterprises. The answer to this question has to do with the simple fact that the majority of us who own and operate franchised businesses do so with a brick-and-mortar storefront. Sounds strange, right? I’ll clarify.
and videos to capture those moments that only the convenience of the phones in our pockets can. Some devices even have interactive personalities with names like Siri. The explosion of social media apps have undoubtedly fueled this evolution by providing us with a growing number of reasons to stay connected to our mobile devices, at all times, even when we are in the bathroom. To see this in real life, put your phone down (if you can) the next time you’re in a bar, theater, classroom
Franchising USA
or airplane, and take slow and deliberate looks around you. If you don’t notice a legion of people with their eyes glued to a mobile device, I’ll treat you to a cup of frozen yogurt, but only if you promise to turn off your phone for a day. Clearly, it’s obvious why mobile is hot. We spend a lot of time on it. In fact, we now spend more time with mobile apps than we do watching television. 12 percent of the media we consume is through mobile. And year after year, we spend more money buying things with
At a basic level, mobile is important because it helps us do a lot of important things that we otherwise wouldn’t be able to do, like finding the closest gas station in a foreign country. And for many things we have been doing, mobile makes them easier, faster and more enjoyable. This is why we, as consumers, invest a lot of time on our mobile devices, and why we spend more money buying things with our phones than ever before. And this is why businesses really do need a mobile presence (an app, for example), and why they need to advertise within mobile ecosystems. Mobile devices are even more important to franchise owners because they enable brick-and-mortar stores to connect with their customers in a highly relevant way, even after those customers exit the stores. Take a restaurant, for example. Unless an eatery is part of a ginormous brand with a lot of locations and a huge advertising budget, the most meaningful opportunity it has to make a memorable impression on its customers is when they are inside of the restaurant’s four walls.
our phones, run with our phones, drink with our phones, dance with our phones, laugh with our phones, and cry with our phones. And when the day is done, we invite our phones into the bedroom, and place them right next to where we sleep, but not without reminding them to wake us up in the morning to your favorite song, or the least annoying alarm. Yes, phones are this close to us, and we have no problem with that. Consumers are spending an exponentially growing amount of time on mobile devices. And as mobile technology continues to permeate our lives, our phones will become even more important to everything we do, especially as mobile devices make it easier for us to stay digitally connected to each other. Once the customers leave, it becomes very difficult, if not nearly impossible, for the store to activate and sustain a meaningful connection with those customers. Unlike online businesses, who can use technologies like web cookies to connect with their customers after initial contact, brick-and-mortar businesses have historically been confined to tools like email lists, guest loyalty programs and traditional shotgun-style advertising methods that may or may not work. Fortunately for many small business owners, the rise of social media has helped evolve this inflexible brick-andmortar customer relationship management paradigm by creating dynamic and engaging environments, like Facebook and Twitter, which allow brands to connect and communicate with their fans beyond those opportunities that were previously confined to the insides of stores. As advances in mobile technology continue to fuel the proliferation of social networks beyond the desktop computer, mobile devices will amplify the accessibility and relevance of social media in our lives, and make our phones that much more important. Essentially, mobile technology will allow us to maintain and cultivate personal and professional
relationships wherever we take our mobile devices, which, if you think about it, is in essence everywhere. This simple reality is the fundamental reason why mobile is as important as it is today. Like a lot of people, I always have my phone within arm’s reach. If I don’t, it’s because I’ve inadvertently allowed someone to confiscate it (like my wife or daughter, for different reasons), or I’m under a body of water (which I assure you will change as soon as Apple decides to waterproof iPhones). Offices, classrooms, churches, hospitals, gyms, mountains, beaches, restaurants, nightclubs, bowling alleys, dining tables, ski resorts, planes, trains, automobiles and, apparently, even the bathroom... yes, our phones are indeed everywhere. (I suspect that the 25 percent of people who don’t bring their phones into the bathroom are shy, in denial or both.) Our phones are so pervasive that we even have laws against driving with our phones in hand, and even for walking and texting. Our phones aren’t just near us; they’re effectively attached to us. They have become a part of our very being. We slide them inside of pockets, we secure them in purses, and some still clip them on belts. We exercise with our phones, eat meals with our phones, watch television with
But the sheer amount of time we spend on our mobile devices, and the amount of money we spend shopping with them, aren’t the only reasons why mobile is as hot as it is today, especially for many franchised businesses. Mobile has become one of the most interesting technologies of our time simply because we take our phones everywhere we go, and invite the brands we love to connect with through a device that never leaves our sides. Mobile devices present unprecedented, highlyrelevant opportunities for companies to maintain close relationships with their customers, a relationship that is one of the most intimate and ubiquitous possible between a brand and a consumer. Dan Kim is the Founder and Chief Concept Officer of Red Mango, a leading national frozen yogurt and smoothie franchise with over 200 units. He regularly engages with his 1.7+ million followers with his Twitter accounts @ dankimredmango and @redmango, and has a combined Facebook fan base of nearly one million fans for /redmango and /dankimredmango. He is also active on his personal Facebook account, fb.com/frozenyogurt. For more information: Web:
www.redmangousa.com
Franchising USA
ex per t advice
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f ra nchisee in action
John Peter s, Fra nchisee, Pa k M ail
F amily C hina to ‘ D irt ’ :
Packing and Shipping it All Franchising USA
One summer day in 2003, when John Peters was in line at his local Pak Mail store to ship out his mail order, he approached the owner in regards to selling. “I watched how Pak Mail was run for six or seven months as a customer,” recalls Peters. “I saw how they worked; from what I could see they were quite efficient and successfully managing their customers’ needs.” Nearly right after graduating from the University of Arizona Peters was drafted. Once he emerged from the service, he began working alongside his father buying and selling stamps and coins. From that position, came a job with an Auctioneer in San Francisco. After a decade of working there, Peters opened his own retail store in Burlingame, California. Peters and his family eventually ended up back in Arizona where he began selling an assortment of items on EBay. Selling things on EBay meant Peters was
“We have seen so many obscure shipping requests it’s difficult to recall them all. I even continue to surprise myself with the solutions we come up with to meet just about any need.” constantly shipping items he had sold all over the nation. “I didn’t like going to the post office because it would easily take half an hour of waiting. That’s when I was first introduced to Pak Mail. I would go in, drop items off that were all pre-paid, and leave. It was easy,” shared Peters.
lot of confidence.”
When Peters approached Pak Mail, interested in taking over the franchise agreement, timing was on his side; the owner had been considering letting go of the operation. Tired of being on the internet and lacking interaction with people, Peters decided to make another career shift and, almost a decade ago, in the late summer of 2003, Peters signed on to become a Pak Mail franchise owner.
After opening, Pak Mail franchisees benefit from ongoing seminars, conventions, site visits and daily access to their intranet. Pak Mail supports continuous growth and management of every franchise with strategic marketing materials and business operation assistance. “You have to have good spacial awareness and be quick on your feet. Packing some of the things that come in without having them break takes creativity,” explained Peters. “Someone came in two days ago and wanted to ship family china and collectibles to where they were moving: Israel. We had to pack it delicately and thoroughly!”
All new franchise partners receive two weeks of comprehensive, hands-on training at the International Support Center in Colorado followed by three days of in-store instruction. “I recall our training to be roughly eight hours each day. Most of the franchisees were all staying in the same hotel. That was great because we shared dinners and were able to communicate and engage in what we were learning. I got to know some of the people better than others and built friendships with other franchisees. I was able to call these people later and review things that hadn’t stuck as well for me as for them and visa versa,” said Peters. “The teachers, also, were fantastic. The people who taught us about wrapping and packing things were very thorough and I left with a
Many districts also have area developers. The area developers frequently come around to your location to supervise the efficiency and success of numerous Pak Mail locations. These individuals help implement new technology and often have great tips for certain questions. “The area developers are a great resource because there are always scenarios that are strange in this industry that you have never seen. A great example is shipping things overseas and clearing them through that countries customs. I shipped a big ski boat to Fiji and I had no idea what Fiji’s customs regulations were and these queries can take quite some time to figure out,” explained Peters. Pak Mail is there for franchisees in those scenarios. “A lot of the time, things you would never think of
are concerns such as what kind of batteries are in the things you ship. When you’re going through multiple sources it gets complicated: you have something that’s made in Japan, sold in the US and now you need to have it shipped to somewhere. It can get crazy quickly!” Pak Mail’s success is built on exceptional service and a positive customer experience. Customer satisfaction is the top priority. So franchisees must have an interest in people and the challenges and successes they inspire. “You are challenged to take care of the good and the bad. Often you are handling things that are very precious and dear to customers’ hearts. You must utilize personal communication skills with your customers and your employees,” said Peters. This is an aspect of the job, that while challenging at times, keeps Peters engaged. He enjoys having to think on his feet. Pak Mail offers a wide variety of services to help support a business that include mailbox services: electronic mail notification, package receiving and mail forwarding; copy, print, and fax services:
Franchising USA
f ra nchisee in action
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f ra nchisee in action
John Peter s, Fra nchisee, Pa k M ail
copying, business card printing, finishing, and banner enlargement; packing and moving services: supplies, estate packing, gift wrapping and gift boxes; and, supplies. They are the world’s premier franchisor of packing, shipping and business support services for commercial and residential customers. “For our Pak Mail store, a large source of our business is actually big shipping trips and about six or seven larger pallets of freight. We also ship ‘dirt’: ore samples for a number of people as well. We have seen so many obscure shipping requests it’s difficult to recall them all. I even continue to surprise myself with the solutions we come up with to meet just about any need. The most challenging part is usually the paperwork. That, and trying to lift the stuff yourself,” laughed Peters. “My wife jokes that when I retire one day, I’ll have to finally start at the gym because I’ll no longer get the ‘Pak Mail’ workout.” Roughly every eighteen months, Pak Mail hosts a convention for franchisees. The conventions run over three days and give franchisees an opportunity to network and connect in addition to receiving an overview of the new services and procedures the corporate office has developed and discovered. “The conventions are always very relevant and well attended,” said Peters. Peters may not be the best to speak to a work/life balance since buying the franchise since he is a hopeless workaholic. Over the past decade at Pak Mail he is gradually learning how to walk away from work at the end of the day to spend time at home with his wife and dog. “I am able to do this much more now because I have built a great team of
Franchising USA
staff that I have faith and confidence in,” reflected Peters. After ten years with Pak Mail, Peters feels it’s important that potential franchisees understand the importance of taking on more of a management role opposed to a ‘do-er’ role, “This is a challenge unless you have management experience. You have to learn how to manage before you can become an effective manager and teacher. This job in particular, it is a constant challenge to not get your hands involved.” Secondly, be honest. “Be honest, be kind, and be frank with people.
You never get in trouble for telling the truth. People may not like to hear the truth, but you’ll never get in trouble for it. If something breaks or gets lost, call them up and be the one to communicate it with them. Ask them what you can do. It is better to deliver the news yourself,” said Peters. “You have to think on your feet; it’s not all mechanical. This franchise is one where you are constantly thinking and that’s what has made it enjoyable year after year for me.” For More Information: Web:
www.pakmail.com
Drive yourself into an
automotive franchise
Franchising USA
feature
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feature The automotive industry has been an important contributor to the US market and despite what the economy will do, it is predicted that the number of automotive franchises will climb due to developing countries and rising car ownership, maintenance and repairs of cars of owners who will prolong the life of their vehicles and for those who buy their first new car. According to the latest report by the International Franchise Association, the automotive industry is expected to grow 4.0% from 2012 to 2013 and automotive franchises contribute $25 billion annually to the economy and employ nearly 200,000 people. If you happen to find yourself in the garage most evenings and weekends working on that ’69 Dodge, or roaming the aisles of your local automotive parts store because you just want to see what they’ve got, you could say you have a passion for anything automotive. Now, what if you could turn that into a business? A profitable business? You would be doing what you love and making money at it. It is possible with franchising. The number of automotive franchisees is growing and there are many different kinds of automotive franchises to choose from. From auto body repair, to oil change and transmission services, to car rental franchises and windshield replacement, there is something for everyone.
Franchising USA
Car Rental and Sales Franchises Popular with vacationers, people on business trips or for those with cars being repaired, the car rental business proves to be a strong business. There are those who need to rent vehicles for business or personal use and a truck rental franchise or an equipment rental franchise is ideal. Think of where you have rented a car or truck before. Did you like the service? Would you recommend them to a friend? Would you use them again? If you said yes to all of these questions, then consider investing in this particular franchise. A popular brand name can go far in business success and financial growth. Some of these rental businesses also sell used vehicles which is becoming popular among car owners. A second vehicle is mostly bought used and this kind of business is expected to grow within a slow economy. This type of franchise serves a double purpose and you will be an environment superstar selling quality used vehicles which appeals to many individuals on a limited budget.
Auto Body and Paint Services There will always be a need for auto body services. Whether it’s the fender bender that you got into last week or that shopping cart that came out of nowhere in the parking lot, auto body and paint services will continue to be in demand. If your teenager scratched the car, then a franchise like this is ideal. Again, here is where a brand name could take you far in running a successful business. People look for popular or familiar names in the automotive industry as the brand has been built and so therefore trust has been built with a name and superior customer service.
Oil Change and Transmission Services People are keeping their cars longer and so the need for oil change and transmission services will go up. Drive in and drive out services are especially popular in oil change franchises. This service provides a quick, one stop shop for oil changes. Ideally located in a busy thoroughfare, motorists can drive in while passing, and
to keep vehicles and their engines running smoothly, return visits can produce greater revenue. Having a transmission specialty shop is also popular with individuals as they trust that your focus will be on the one important part that will get them back on the road. Quality, quickness and efficiency along with excellent customer service are what the public is wanting. Either of these franchises would make and excellent investment if you have excellent customer services skills and are a skilled mechanic.
General Repair Services With the economy slowly recovering, more and more people of keeping their vehicles in tip top shape. Routine checkups, broken water pumps, tune ups and general parts are just a few of the things that people will need to keep their cars running longer and on the road hassle free. With car life being now ten years before trade in, this type of franchise can be profitable especially if you are a licensed mechanic. If you ever dreamed of owning your own garage, this may be the franchise for you. Pair with a gas station – or better yet – own the gas station and the garage. There are gas station and maintenance garage franchises for the diversified individual. A larger business may mean a little more to do, but with head office guidance, a franchisee has little to worry about.
Windshield Repair Many of us can attest to that flying rock that got spit out of the tire of the dump truck ahead of us on the freeway and made that little chip or crack on the windshield. The need to fix this quickly is essential as it could turn into a damaging, unsafe crack. This is where windshield repair comes in. There are many different types of windshield repair franchises and I bet a jingle from one of their commercials in going off in your head or you’re humming it right now. You may have even used their
Franchising USA
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feature services before. If you locate your new business in a populated residential area, this could prove beneficial for you.
Auto Parts and Tires Yes, auto parts and tires can be identified as one and the same and are sold in the same stores; however, when it comes to franchises they can be two separate businesses. Tires are a speciality business and are popular. Tire franchises do not only comprise of the sale of tires, they also include tire rotation services, instalment and seasonal changes. Snow tires are in demand in certain areas of the country and so high demand can equal need of quality service. Auto parts stores are becoming more and more popular due to people keeping their cars longer. Many vehicle owners are DIYers and prefer to save some money on simple services like oil changes, air filters, and batteries. Not only are there parts, some stores sell automotive tools as well to help the DIYer complete their project and do it with the correct tools which increases efficiency, but also safety. If you are knowledgeable in parts and tools, this particular franchise would be ideal.
Mobile Auto Services Mobile auto services are also becoming very popular. If you have ever been stuck on the side of the road with a flat tire or your car won’t start in the morning in your driveway, help is just a phone call away. The mechanic comes to you, which is ideal for those who are time-pressed or need repair right away. Rather than being in a garage all day, you would be mobile in your own garage on wheels. With low overhead (no garage lease here) and your paperwork done from your home office, there is never a dull moment for a person that craves constant change, but also job permanence and likes being their own boss. If you like being on the move instead of sitting in one place all day, this franchise would work for you.
Franchising USA
“The number of automotive franchisees is growing and there are many different kinds of automotive franchises to choose from. From auto body repair, to oil change and transmission services, to car rental franchises and windshield replacement, there is something for everyone.” Brake Repair Always a popular business, brake repair is always needed. Brakes are important, especially to families and the elderly. Many businesses have tailored their services to women as the number of women who bring in their own cars for repair or maintenance has increased. According to the Automotive Aftermarket Industry Association (AAIA), 68% of women take their vehicle in for maintenance themselves. This large number and it is estimated to increase in the coming years and could prove essential to business success. Tailor your brake repair business to this female demographic, build trust, and through your brand name, you will thrive. Whether you are a licensed mechanic, a passionate DIYer or an auto parts enthusiast, there is an automotive franchise that is just right for you. If you are
looking to be your own boss and do what you enjoy, this variety could prove to be an impressive investment and business that lasts for many years.
Automotive Franchises listed in the Top 50, according to Franchise Business Review’s 2013 Top Franchises report: Christian Brothers Automotive Color Glo International Snap-on Tools Tint World Auto Appraisal Network Honest-1 Auto Care Alloy Wheel Repair Specialists Ziebart For the full report: www.franchisebusinessreview.com/ content/Top-Franchises-2013
Extend your reach north of the border...
Contact Jenn Dean, Senior Sales Executive, for global solutions on your multi-media advertising approach. Email: jenn@cgbpublishing.com Phone: 250-590-7116
www.canadianfranchisemagazine.com
With a range of mobile platforms for any device, when potential franchisees search for new possibilities, they’ll find you here.
Contact Jenn Dean, Senior Sales Executive, for global solutions on your multi-media advertising approach. Email: jenn@cgbpublishing.com Phone: 250-590-7116
www.franchisingusamagazine.com
f ra nchisor in depth
G reat Clips
Great Clips: W ell E stablished and I nnovative Great Clips is a 30year old franchise company that focuses on providing great haircuts conveniently. The company has more than 1,000 franchisees and 3,400 salons with roughly 30,000 stylists. Their average rate of growth is 200 salons per year. Great Clips just celebrated their 34th quarter of customer growth; completely pushing aside the tough times certain businesses have experienced amidst the recession. These facts make it clear that Great Clips is offering a viable business that provides communities with a great service. This
Franchising USA
company understands that with today’s fast-paced lifestyle, you need a salon that fits your schedule. Great Clips is open evenings and weekends with no appointment needed. Rhoda Olsen, CEO of Great Clips was able to express why this concept has been so successful and gives us an inside look at Great Clips.
Technology Leaders Within Their Industry Great Clips has applied the latest technology devices and advances to their industry. “Great Clips has four huge technological pieces that support our customer delivering them a more convenient, consistent service,” said Rhoda. Technology supports the brand. Putting convenience directly into its customer’s hands, Great Clips launched the industry’s first Online Check-In service, allowing customers to add their name to the wait list of a Great Clips salon before they arrive. Secondly, there is an online app for customers to preview wait times at a salon and put his or her name on the list. Third, Great Clips has a software program called ‘Clip Notes’ which gives any stylist the ability to look at a customer’s haircut history information in order to deliver the best quality haircut. Finally, adding to Great Clips strong network is their global database. This database allows customers information to follow them from location to location. “Our technology really supports our values: customers stay
connected in an easier manner. It also assists our stylists and gives them more time to do what they do best and not have to waste time with ‘the books,’” explained Rhoda. “In the technology world we look at all our customers and prioritize. Our technology features were created with a focus on certain percentage of our customer base. We designed this to inspire them to return to a Great Clips salon. At the same time, we knew there would still be customers who wouldn’t receive this well because they’re not even online. These people can still be served to best meet their needs too. We balance both. Mobile engagement is designed for our 20- to 40-year old customers.” Overall, with Online Check-
In being downloaded more than a million times, Great Clips has had good reception with this feature and we continue work toward improving it. “We offer customers a clear, consistent system focused on them. The convenience, hours, locations, and transparency we provide is unlike anything else in the industry,” said Rhoda. Franchisees who would fit right in at Great Clips are individuals who have previous successes working in high management or executive roles; are people-focused and understand that this is a customer driven industry; enjoy personal freedom; want flexibility; a person with the skills and tools to manage and lead managers and, desires a multi-unit franchise. That last point
“I think we continue to grow due to our focus on improvement at Great Clips. We really collaborate with, and more importantly listen to our franchisees.” is paramount, as typical Great Clips franchisees manage three to ten milliondollar businesses and manage above the salon level. Great Clips currently has 160 markets open in the US and Canada, a third of which are taking new franchisees, primarily in the northeast. “I think we continue to grow due to our focus on improvement at Great Clips. We really collaborate with, and more importantly listen to our franchisees,” shared Rhoda. “We have 70 million customer records; we don’t have to guess what works in terms of driving growth. We can use those records to evaluate what will drive customers and we use
this information to make decisions about where to channel our focus and attention.” Rhoda ensures that all franchisees hold a strong respect and value upon their stylists. “Growth for our business starts by expressing gratitude to our stylists and communicating the impact they have on the business. Stylists are the individuals who are delivering the brand.”
“We Love Our Franchisees” Great Clips makes a constant effort to build relationships with franchisees. “How many organizations tell you they love their franchisees? We do! We hold face-to-face meetings, active franchise
Franchising USA
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f ra nchisor in depth
G reat Clips
“Three points that every potential customer, employee or franchisee of Great Clips should know about us are how highly we hold active listening, customerfocus and stylist appreciation. Taking in what you hear is a really underrated skill. There is so much to be learnt by listening rather than talking. Also, there are so many things to get distracted by when running a business, but you have to spend a lot of time in the salons to remain customer driven. Lastly, don’t ever underestimate your front line, in our case, the stylists. They are it. These individuals drive our brand and we do our best to always remember that.” leadership groups, online university training and webinars, and other tools and resources to ensure franchisees can succeed,” said Rhoda. “We try to take as much pressure off them so they can operate their business the way they enjoy. Each franchisee doesn’t need to be a real estate specialist, marketing expert, and so on. They can rely on us for those things.” Great Clips has 60 training centers across North America. Their belief in a strong sense of community permeates the culture. In no time, franchisees find that Great Clips becomes family. “Our franchisees often say their best friends are other
Franchising USA
franchisees; they wholly support and rely on one another. Some of the stories you encounter express an incredible sense of caring,” explained Rhoda. “When you take the time and invest in these relationships, then there is real opportunity for individual franchisees to be challenged and pushed. Once you have a strong relationship build on respect and friendship, you value one another and take to heart suggestions made. It takes just as much courage and strength to tell a person they are going off track, as it is to hear that. When caring is there, people know your advice is from a place of love.
“In this industry there seem to be extremes. Some people think of a haircut as an experience. For most though, haircuts are just something that needs to get done. No one wants the hassle or stress of needing to dress up for the salon, or spend a long time waiting, especially men. Most individuals don’t want the fluffy, uncomfortable, pretentious environment. They want a place with no wait that can work around their schedule,” expressed Rhoda. Great Clips meets these needs and they do so by leading the industry with their technology and sound business plan. For More Information: Web:
www.greatclips.com
Part 2 of 3
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Veterans in Franchising Franchising Seeks Veterans
Your next career move:
A business of your own
Franchising Success Stories Veteran Profiles
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Military Veterans Impress Us! We Want More!
Now offering
50% Franchise Fee Discount for any retired or former veteran with an honorable discharge!
the
GROUT Doctor
速
Since 1992
Find out more about this Home Based Business at
www.GroutDoctorFranchise.com or call 877-476-8800 ext. 722
Franchising USA
Leading National Franchise For Grout Repair
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V eterans in F ranchisin g S upplement P art two of T hree
Contents 34 The First Step Joel Lindenmayer, VetFran, TSS Photography
38 Franchising Seeks Veterans VetFran
Veteran Franchisor Profile 36 Maid Simple House Cleaning
40 Supporting Veterans Through Canine Assistance Dogtopia
50 FirstLight HomeCare
42 Veterans: Make Your Next Career Move a Business of Your Own Richard Ashe, Veteran Franchise Centers
Veteran Franchise Focus 46 Service Brands International
54 A Love Affair: Franchising and Veterans
42
Veteran Profiles 35 Tai Jeffries, Maid Simple House Cleaning 45 Dave Leonard, Bach to Rock 49 Jerry Chase, Togo’s 53 Jeff Wright, Jiffy Lube 57 Katy Bachman, CruiseOne 59 Michael Lambert, Valpak 60 Bobbi Martinez, FirstLight HomeCare Franchising USA
V etera ns i n Fra nchisi ng
The First Step “What if you could lead a team they way you wanted, and recruit the type of people you want to surround yourself with? Guess what.... YOU CAN!”
Joe Lindenmayer
Do you ever wonder if a door will open for you and if you’ll be awake enough to walk through to an opportunity of a lifetime? Well, for many Veterans, taking a job without the passion they once had can be frustrating and feel like you are just passing time. After being a reservist activated for Operation Desert Storm and being a tank crewman in Saudi and Kuwait, my future started to come together after coming home and realizing I needed to make some changes. We know that there is an adjustment phase after military life; however, it’s
Franchising USA
the camaraderie and the immense sense of accomplishment we often miss just as much as the uniform and service to this great country. For some of us, driving million dollar equipment, leading men and woman or having lives balance on our decisions is easier to manage than what career we want next. A little help and mentorship can go a long way. What if you could build the culture you wanted in your career? What if you could lead a team they way you wanted, and recruit the type of people you want to surround yourself with? Guess what.... YOU CAN! Since 1993, the VetFran program has given Veterans and their family the opportunity to build a career they can be equally proud of in their civilian lives. The International Franchise Association has more resources and muscle behind the program in recent years and has assembled over 500 concepts including landscaping, food service, automotive, security and even photography that can help you make your American Dream become a reality. Not only that, but because of the service
you’ve given to your country, and the
fact that for many of us in the Franchise industry who also once served, we will
honor those heroes among us and work
hard to provide help and a jump-start to
a Veteran’s next career. Everything from
mentoring, financing support, discounted or waived fees and ongoing operational
benefits are out there for you to explore. For some, starting as a team member
within one of these organizations is a good first step, while for others, owning the
business will be their ultimate objective. Either way, take the first step today and
go to www.VetFran.com . Your future is out there and all you need to do is take
that first step through the door to make it happen.
Joe Lindenmayer is a USMC veteran, President & COO of TSS Photography, and the IFA VetFran Chairman. For More Information: Web:
www.vetfran.com
www.tssphotography.com
Tai Jeffries A self-proclaimed army brat, joining the military was a natural choice for Tai Jeffries.
Upon graduating Tai enlisted in the Air Force and spent 4 years of active duty as a Computer Operator. After a brief stint as a civilian IT programmer, Tai found herself ready for a new challenge. In 2006 she enlisted in the Army as a Mental Health Technician, counseling soldiers and their families. Medically retiring from the military in 2011, Tai and her husband Corey, also a service disabled veteran, moved their family to Fort Wayne, Indiana ready for a fresh start. As Tai explains it, the decision to purchase a franchise was an easy one. She didn’t want to work for anyone else and it was also important to her that she set a positive example for her daughters. Tai wanted them to know that women can successfully run their own businesses. She became interested in Maid Simple House
Profile
Cleaning because she sought a business model that allowed her to work from home and also provide a service that is greatly needed. Tai enjoys being able to bring smiles to her customers’ faces. She knows firsthand, as a wife and mother, that there is no greater feeling than walking in the door after a long day to find your home sparkling clean. “Maid Simple seemed too be good to be true, to be honest,” says Tai. “But everything that they said that they were going to do, they have done. The level of support, along with the low cost of investment, is the reason I chose this franchise and I have not regretted the decision once. The marketing and advertising program to get me initial customers was also a HUGE selling point for me.” Tai thoroughly researched various franchise models before landing on Maid Simple House Cleaning. Her biggest piece of advice to other veterans considering investing in a franchise? “Do your homework. Don’t just talk to the franchisor, talk to other franchisees.” Tai
appreciated being able to talk to other Maid Simple House Cleaning franchisees and hear firsthand about the successes, and challenges, you face in running your own business. It also gave her confidence that Maid Simple was the right franchise model for her and that she possessed the skill set needed to be an accomplished franchise owner. Jeffries doesn’t hesitate to say that her military background has been, and continues to be, a major part of the reason she is equipped to run her own business. Tai attributes her drive to succeed and her attention to detail to the years she spent as a servicewoman. “Maid Simple House Cleaning lays out the steps for success in advance. All you need to do is follow them,” says Tai. “As an airman/soldier, I am skilled at following instructions and completing tasks. If I follow the Maid Simple House Cleaning guidelines and use the tools provided, I WILL be successful.” For More Information: Web:
www.maidbrigade.com/ franchise
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vetera ns i n fra nchisi ng
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V etera ns i n Fra nchisi ng
M aid Simple H ouse Clea ning
Maid Simple House Cleaning: L o w C o s t V e t e r a n - F r i e n d ly Franchise Opportunity Maid Simple House Cleaning is a low cost, home-based franchise opportunity with solid business training and support. Designed to enable more people to get into their own business quickly, Maid Simple House Cleaning was created in response to what its customers said they want from a residential cleaning service—an affordable, reliable, and personalized service that provides them with a clean and healthy home. Even better, the company is committed to getting new franchisees up and running in their business in just a few weeks! “Maid Simple House Cleaning offered me the training and support I needed to overcome what previously prevented me from venturing into my own business,” says Nancy Panico, owner of Maid Simple House Cleaning of West Orlando.
Low Investment, Quick Start For a $29,500 investment including the $10,000 franchise fee, Maid Simple House Cleaning offers a complete franchise package. This includes an advertising and customer acquisition program, a national sales center that handles customer scheduling, billing and payment processing, and continuous business training and marketing support. In-house financing is also available to qualified prospects. And, new franchise owners have the option to either clean themselves or to supervise a cleaning team.
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“At Maid Brigade, we know that military veterans make excellent franchisees. In fact, more than 10 percent of Maid Brigade owners are veterans.” “The Maid Simple House Cleaning franchise model presented a great opportunity for a hard working couple like us to make a living together instead of spending so much time apart working separate jobs,” says Perry Gilpin, owner of Maid Simple House Cleaning of Central Kentucky, who co-owns the franchise with his wife.
Proven Leadership For more than three decades, Maid Brigade – the parent company behind Maid Simple House Cleaning – has been helping people become thriving entrepreneurs. Maid Brigade is ranked a Top Global and Top 100 Franchise by Entrepreneur Magazine, a Top 50 Franchise opportunity for both Minorities and Veterans by USA Today, and a Top 25 Franchise for Hispanics by the World Franchising Network.
Committed to Veterans Maid Simple House Cleaning is dedicated to assisting retired military personnel get into franchising by offering veterans the franchising and business resources, support, training, and financial assistance they need. “At Maid Brigade, we know that military veterans make excellent franchisees. In fact, more than 10 percent of Maid Brigade owners are veterans. They know what it takes to own and run a successful business
– a combination of hard work, leadership, and sound judgment,” comments Don Hay, founder of Maid Brigade. Strong leadership skills and a team mentality are just two factors that the International Franchise Association (IFA) recognizes as the attributes of retired military personnel that make them some of the greatest success stories in the franchise industry. “I chose Maid Simple House Cleaning because of the structure they offered to help me get started in business,” says Tai Jeffries, owner of Maid Simple House Cleaning of Fort Wayne, Ind. “As a former airman/soldier, I am used to following instructions and I feel that as long as I follow the Maid Simple model I WILL definitely be successful.”
Green Cleaning is a Competitive Edge Maid Brigade is the only house cleaning company that is Green Clean Certified®. This means that as a Maid Simple House Cleaning franchise owner/operator the cleaning equipment used and the cleaning processes implemented are safer for customers and safer for the environment. And this provides a competitive edge! For more information contact Bob King: Phone: 800-722-6243 Email: bking@maidbrigade.com Web: www.maidbrigade/franchise
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Join our Growing Family! We’re committed to getting new franchisees up and running in a few weeks!
Low Cost Veteran-Friendly Franchise Opportunity $29,500 investment including the $10,000 franchise fee In-house financing for qualified prospects
Offers a complete franchise package including:
Advertising and customer acquisition program National sales center responsible for customer scheduling Billing and payment processing Continuous business training and marketing support
Dedicated to assisting retired military personnel get into franchising!
Contact Us Today!
800-722-6243
maidbrigade.com/franchise Franchising USA
V etera ns i n Fra nchisi ng
Franchising Seeks Veterans
Franchising USA
On November 10, 2011 the International Franchise Association (IFA) announced “Operation Enduring Opportunity (OEO),” a franchise industry wide campaign to hire and recruit as owners 75,000 veterans and 5,000 wounded warriors by 2014. The announcement, made by First Lady Michelle Obama as part of the White House Joining Forces Initiative, represents the largest industry veteran hiring commitment to date. This effort builds on IFA’s VetFran strategic initiative, founded in 1991. VetFran includes more than 540 IFA franchisor member companies offering financial incentives, training and mentoring to veterans interested in small business ownership and/or a career path in franchising. Since 2011, nearly 65,000 veterans have entered franchising, including 4,314 owners. Veterans have a proven track record of success in franchising. With its rapid training opportunities, structure, and need for team leadership and operational excellence, franchising has proven a successful path for veterans to become leaders in our companies and in our economy. One out of every seven franchise businesses are owned and operated by veterans of the U.S. military, according to a recent study conducted for the International Franchise Association Educational Foundation based on 2007 U.S. Census data. More than 66,000 veteran-owned franchise businesses in the U.S. provide jobs directly for 815,000 Americans, and generate more than $41 billion in GDP. There are a number of reasons veterans
“Implementing systems is a key responsibility in the military, and that aspect translates to the franchise world.” thrive in franchising. • Veterans come back with strong leadership skills and a thorough understanding of teams. Military experience includes leading people, improving processes, and accomplishing the mission. Just like in the military, in franchising, the mission is accomplished by the team. • Franchises run on systems. Implementing systems is a key responsibility in the military, and that aspect translates to the franchise world. • Franchises provide training. Service members are trained and taught very specific skills to be used to carry out very specific tasks. Franchises have comprehensive training and support built into their opportunities. This means a veteran can enter into a completely new field, follow the franchisor’s proven business model, and receive the training, guidance, and support a new business owner needs to succeed. • Franchises offer support. Joining a franchise, a once “separated” veteran can feel connected again, surrounded by a support structure and part of a franchise “family” – a culture many franchisors work to cultivate among their franchisees. In franchising, you’re in business “for” yourself, but not “by” yourself. The best way to learn more about getting
a franchise through VetFran is by visiting our websites. VetFran.com is a great starting point to learn about the program and our veteran’s initiatives. There you will find our new toolkit for veterans interested in franchising, which includes a Franchising 101 online course, a skills and attributes assessment, a finance assessment, and partner links and access to the VetFran Mentor Network. The list of franchisors offering discounts to veterans can be found here. The Franchise Opportunities section of IFA’s main site can also be searched by investment, business category and keyword. Franchising can’t provide the entire solution to transitioning our veterans into leaders of the civilian economy, but we are committed to being part of the solution. “When I came back from Vietnam, there was nothing for veterans,” said IFA past chairman Jim Amos, now chairman and chief executive of Tasti D-Lite. “We can’t let that happen again.” We won’t. Find out more about opportunities in franchising by visiting VetFran.com For More Information: Web:
www.vetfran.com
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Dog topia
Supporting Veterans T h r o u g h C a n i n e A s s i s ta n c e A national dog day care franchise is giving back this summer by raising money for the service dogs that support veterans. Through charity Dog Washes taking place on July 21st, Dogtopia has set out to raise $25,000 for working canines across the United States. This year’s proceeds will benefit Veterans Moving Forward, a veterans support organization. Karen Jeffries, President of Veterans
Franchising USA
Moving Forward, is excited to partner with Dogtopia. “I’m very excited that proceeds from this year’s Dogtopia’s Dog Wash fundraising activity will support Veterans Moving Forward’s efforts to support veterans through canine therapy and placing service dogs trained to the veterans’ unique needs.” Dogtopia prides itself on being a place where pets are valued as family and¬ dogs enjoy playtime, spa treatments and overnight stays in a positive environment. Dog owners have the assurance of leaving their beloved pets in the hands of trained professionals while they’re at work or away on vacation. Dogtopia associates nurture
each and every pet as if it were their own. Each location offers dog daycare, boarding, spa services, and most also have professional grooming. Dogtopia does not breed discriminate and welcomes social dogs of all ages, sizes, and abilities. The company was founded by Amy Nichols in 2002 and began franchising in 2005. Currently, there are 24 Dogtopia franchises and five company-owned locations in operation across the U.S. From California to Virginia, every single Dogtopia location – 29 in total – will participate in the company’s ninth annual charity Dog Wash. “Dogtopia knows the healing power of dogs and we are very
excited to have our charitable arm, K9 Support, raise money for an organization that is partnering the health benefits of dogs with a way to assist our returning veterans whose service makes it possible for us to do what we do on a daily basis,” said Jakob Hunt, Vice President of Operations of Dogtopia. “With all of our locations participating nationwide, we can truly make a difference in the lives of veterans, one dirty dog at a time!” During previous years of the Dogtopia Dog Wash fundraiser, funds were raised for dogs serving in the U.S. military, with donations going toward money for toys, treats and other comforts such as cooling pads and goggles to deflect the desert sand. When the first dog wash fundraiser was held in July of 2005 at a Dogtopia location in Vienna, VA, the event attracted national attention and resulted in donations of $9000, enabling the purchase and shipment of 5000 pounds of supplies to military dogs overseas. Over the years, many Dogtopia locations have also given back to their local police departments’ dogs, animals that play an
“Dogtopia knows the healing power of dogs and we are very excited to have our charitable arm, K9 Support, raise money for an organization that is partnering the health benefits of dogs with a way to assist our returning veterans whose service makes it possible for us to do what we do on a daily basis.” important role in detecting narcotics and explosives, search and rescue operations, evidence recovery and criminal apprehension in their communities. In addition, the dog is responsible for protecting their police handlers. Proceeds from the Dogtopia Dog Washes have deferred costs for equipment such as ballistic vests, safety harnesses and the outfitting of cars.
local police K-9s to deferring the costs of
The campaign’s early success led to the founding of a charitable arm, K-9 Support, Inc., to support working and service dogs of all kinds. Dogtopia locations nationwide have taken part in the effort, raising over $100,000 in donations for everything from infrared beacons for
through K-9 Support Inc, Dogtopia is a
training service dogs.
Dog owners are encouraged to bring their dogs in for a bath, as well as food and
games for everyone. A $15 per dog wash donation is requested. Please join with
Dogtopia in supporting our veterans, both human and canine alike.
In addition to supporting service dogs
member of Vetfran, and proudly provides
discounts to veterans joining the Dogtopia system.
For more information: Web:
www.dogdaycare.com
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V etera ns i n Fra nchisi ng
Richa rd Ashe, President, Vetera n Fra nchise Center s L LC
Veterans:
Make Your Next Career Move a Business of Your Own “Working with a broker that’s familiar with their journey from military to civilian, as well as franchising, may make all the difference in your decision and selection process.”
Transitioning from military to civilian life presents new opportunities as well as challenges for Veterans. Many veterans look forward to life after the military, and at the same time, have a lot of unanswered questions. “What am I going to do with this new phase of life? Will I be able to find a job? How can I start my own business?” Over the next 4 - 5 years more than a million troops are returning home with these questions in mind. Franchise businesses are looking to recruit veterans into small business ownership because veterans make great franchisees. Unfortunately, many veterans don’t know about the variety of industries, investment levels or understand how their skill sets are transferable to franchise business ownership. In my conversations with veterans over the last few years, most veterans are only aware of the major food franchises. Many I’ve spoken with, that are interested in entrepreneurship,
Franchising USA
were surprised that there are franchises available in their field of interest. Transition time is the perfect opportunity to explore franchise ownership and answer all the questions about your ability to own your own business. Knowledge is the key in mitigating investment risk. Working with a broker that’s familiar with their journey from military to civilian, as well as franchising, may make all the difference in your decision and selection process.
Using a Guide on Your Franchise Safari There’s an old adage that says “a lawyer who represents himself has a fool for a client”. The reason behind this adage is simple: it is difficult to be objective when representing yourself in any capacity that is equal parts emotional and analytical. Unfortunately, when considering franchise ownership, many try to go it alone and don’t leverage the expertise and resources available to them. When you buy a house, you consult a real estate agent, when you go to court, you consult an attorney. Why would you try and buy a franchise without consulting a franchise broker? Buying a franchise is a major investment and an endeavor in which you should work with someone who’s familiar with the industry, someone who has specialized expertise, and who understands the process of franchise acquisition, and may also have access to resources to assist in writing your business plan or finding financing. Of course you can use the internet to find the franchise of your dreams, or can you? Today, there are more than 3,000 franchises in 75 different industries. When you Google “franchise opportunities,” you’ll find a staggering 36,800,000 results. If you were to spend one minute looking at each opportunity it would take nearly 70 years.
Finding the “Right” Business for You Even if you managed to narrow down some franchise opportunities that you think are interesting and fit your goals, how do you know which is right for you?
As I mentioned earlier, deciding to go into business is both an emotional an intellectual decision. You need to ask yourself some hard questions which are critical if you are to succeed. • Do you feel that you are a business builder? Or a business worker? • Are you seeking a business just to replace a job? • What length of commitment are you willing to make? • Do you have adequate finances and capital to invest into a business? • Does your spouse or partner approve of owning a business? • Does owning a business outside of your current skill-sets concern you? • Do you work well in team environments? • Are you comfortable selling? These are just the tip of the iceberg...oh yeah, don’t forget to ask your spouse or partner to answer these questions as well!
Franchise Brokers aka Consultants, Advisers, Coaches, etc. Franchise brokers help people who want to buy a franchise. Typically, their role is to review the amount of money you have to invest and then direct you to opportunities that match your interests and resources. A broker also may help you complete applications and the paperwork to consummate the sale. Franchise brokers generally make money only if a sale is completed. Some franchise brokers may claim to be able to match you with “the perfect opportunity” because they represent
a wide range of business sellers. That may be true—or not. In some instances, franchise brokers represent only a few franchisors, and, as a result, their suggestions may be limited. Some franchise brokers may claim that they will suggest only those franchises that meet certain standards. You may think this means that your financial risk is limited because the broker is weeding out the poor investments. In fact, some brokers represent any franchisor willing to pay them a commission for a sale. If you rely on a broker, be skeptical: you may be directed to a franchise that is failing or that doesn’t have a track record.
Finding the “Right” Broker for You What should you consider when seeking a broker to represent you? Just like in real estate, there are two sides to the market place, the “sell” side and “buy” side. The “sell” side represents the franchisors while the “buy” side represents the prospective franchise buyer and represents the best interest of the buyer. This will not always be obvious as some brokers will represent themselves as buy side even though their wallets belong to franchisor. One indicator of a “buy” side broker is that along with the typical role of the broker, they may offer additional assistance or access to resources such as help in finding financing, or resources to help the buyer write a business plan. They may offer
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V etera ns i n Fra nchisi ng
Richa rd Ashe, President, Vetera n Fra nchise Center s L LC
help in strategizing your buying plan and helping to negotiate your franchise agreement. If a broker tells you that you there’s nothing to negotiate with a franchisor, then you know for sure you’re working with a sell side broker.
your goals and lifestyle!
A good buy side broker carefully selects the franchisors they represent and helps guide you to the franchise that best fits your investment ability, skills, and goals, not only the ones that pay the broker the highest commission or the franchisors with the highest close rates (if the franchisor cannot sell, of course, the broker gets no commission). Also, you must consider that since not every franchisor wishes to be represented by brokers, some good franchisors are, by necessity, excluded from even the most well meaning broker’s analysis. A good broker will disclose this information and let you know up front of the limitations of their services.
• Understanding the pros and cons of owning a franchise business.
As part of our consulting process, we will provide you with free franchise education, veteran financing resources, and expert assistance. Your Veteran Franchise Centers consultant will provide you with:
• Learning about the business of franchising. • Learning about different levels of franchises available. • “Free tools” to help you in your franchise evaluation process. • Determine the best business fit for your unique goals and skills. • Basic financing information, finance options and resources available. • Expert advice that is 100% free.
Veteran Franchise Centers was founded in 2010, and is an affiliate company of RecruitMilitary, LLC. RecruitMilitary has been assisting veterans in their transition from military to civilian careers for over 15 years and founded VFC to assist veterans who are interested in franchise business ownership as a career transition.
Veteran Franchise Centers do a lot more than point veterans in the right direction. A VFC Advisor interviews veteran candidates to assess their capability to enter in to franchise opportunities. We provide financial and skills assessment, franchise education as well as guidance on financing. We also recruit and vet franchisors, review their FDD to ascertain their suitability for veteran candidates. While VFC mainly focuses on helping veterans find a franchise to own, we also realize everyone is not in a position to make the investment required today. Once we understand what stage of life they’re at we try and provide guidance to get them to where they would like to be in the future. Guidance on education needed, business planning resources like the local Small Business Development Centers, SCORE, etc. Our goal at VFC is to help veterans succeed no matter which path they choose today and where they want to be tomorrow.
Veteran Franchise Centers’ sole mission is to provide free help and counseling to veterans, spouses and their direct family members who are seeking franchise ownership. Through our nationwide network of veteran-operated offices and our deep relationship with the franchise community, we can help find out which franchise opportunity is best suited for
Veterans, If you are considering business ownership, especially those who are considering investing in a franchise as a business opportunity, you owe it to yourself to leverage all the resources available designed to provide you with knowledge you need to make the “right” investment decision for you and your family.
As a buyer, you may also want to consider the broker’s experience, not as a just a broker, but in business as well as life in general. Does your broker have unique knowledge that would be beneficial to you in your search and selection process? Does your broker have the requisite experience to help you to understand the pros and cons of the endeavor upon which you are about to embark?
A Business by Veterans, for Veterans, about Veterans
Franchising USA
Resource Links for veterans considering franchise opportunities: VeteranFranchiseCenters.com VetFran ToolKit Buying a Franchise: A Consumer Guide Discover your business building personality Richard Ashe served in the Marine Corps from 1976 to 1983 in the infantry and then as part of a joint Marine, Navy, and Air Force top secret intelligence project. After serving in the Marines, he worked as an electronics technician for a communications company. Over the next 30 years, he worked his way through the civilian ranks to the position of vice president of global marketing for an international software company and received his degree in marketing. During his civilian career, Ashe has worked for and helped companies such as Xerox, Compaq, and HewlettPackard expand or start new businesses. He also participated in four software startups and started two businesses on his own – a computer training firm, ComputerTutor, and a network consulting firm, LANDesign. Ashe is a Certified Franchise Consultant and a member of the Texas Veterans Chamber of Commerce. He serves on the VetFran committee. For More Information: Phone: Email: Web:
713-849-9642 rich@ VeteranFranchiseCenters.com veteranfranchisecenters.com
Richard Ashe
Dave Leonard
Profile
Bach to Rock
Dave Leonard participated in an ROTC program as an undergraduate before being commissioned as a second lieutenant upon graduation in 1966. From there, Leonard completed signal and supply school officer training, prior to deployment to South Korea. “I was promoted to first lieutenant and served as company commander during my final year in the country,” recalls Leonard. “Before joining Bach to Rock, I worked in the corporate world for many years and then decided to become a franchisee with a restaurant concept. A franchise provides a means of entering a new business while allowing for some autonomy in your daily work and this is what attracted me to franchising from the beginning,” explained Leonard.
The ‘right fit’ to Leonard, at this point, translates to doing something an individual cares about and can do with enthusiasm. “Both my corporate and military experience required working with many different kinds of people in many different types of situations. That experience will be very useful when our Bach to Rock location opens in Wayne, Pa., in Summer 2013. We’ll have a variety of students -- from early childhood to adults -- at all different skill levels wanting to learn a variety of instruments and musical genres,” said Leonard.
Bach to Rock, America’s music school for students of all ages, combines Leonard’s
interests in education, music, technology and business with the goal of hopefully
making a difference for younger childrens’ development. Leonard along with his
wife, Ellen, have wanted to do something together for a long time. Finally the two have found a business for them to share and enjoy.
For more information: Web:
www.b2rmusic.com
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Ser v ice B ra nds I nter national
We Seek our Success by Seeking Your Success “That’s the motto that motivates our homeoffice professionals in supporting our Molly Maid, Mr. Handyman and ProTect Painters owners throughout North America,” says Service Brands International (SBI) CEO, Craig Donaldson. Craig, who earned an undergraduate degree in Economics and a Masters of Business Administration both from Brigham Young University, joined Service
Brands in June 2012 after 15 years as CEO of Harris Research, Inc., the franchisor of Chem-Dry Carpet and Upholstery Cleaning with 4,000 units in nearly 50 countries around the world. Prior to that, he spent 13 years with Avery Dennison advancing to Vice President/General Manager of one of its office products divisions.
An unabashed advocate for our troops and military veterans “I’m one of those guys who will walk up and thank a soldier in uniform, and on many occasions when I see soldiers in a restaurant, I have quietly paid for their meals,” says Craig. “It’s a pittance of a gesture compared to what these men and women give, but it’s one way to let them know that we appreciate their courage and sacrifice. “One of my first personnel decisions at Service Brands was to hire Mike Riegel, a US Navy veteran, as our Director of Franchise Development. Mike brings the discipline, work ethic and organizational skills he acquired in the military and ten years of sales and management experience to our development team. He’s already
Craig Donaldson
Franchising USA
implemented a ‘We’ve Got Your 6’ campaign for vets, where we discounted our franchise fees by $6,000 for each brand.”
Service Brands was a unique opportunity Craig was financially secure and had no intention of making a move, but when David McKinnon, who along with Bob Ufer and Lynn Drayton founded Service Brands, asked him to lead SBI, “the opportunity to work with the special people at Service Brands and to get involved in SBI’s fabulous businesses that were in great demand was too compelling,” he said. “In my youth, I tucked away a dream of working for a global company that made a difference in people’s lives. Across my career, I have pinched myself each time I traveled to Tokyo, Sydney, Europe and Cape Town as I experienced things I dreamed of in my youth. Now I’m pinching myself again because I’m leading a fabulous, talented team working on terrific brands Molly Maid, Mr. Handyman and ProTect Painters whose services make
“What we do is uplifting to people. That’s why I believe we are a great opportunity for executives changing careers and for military veterans transitioning to the private sector.”
such a lifting impact in homes across the country.”
What homeowner doesn’t need our services? “Home is the most cherished place to share love and to teach values. On the surface we may clean, fix and touch up, but we put a bounce in mom’s step when the bathrooms shine, a smile on dad’s face when the to-do list is done, and provide peace of mind for the whole family when the home is healthy, safe and secure,” says Craig. “What we do is uplifting to people. That’s why I believe we are a great opportunity for executives changing careers and for military veterans transitioning to the private sector.” Craig manages a team of nearly 100 dedicated franchise professionals at company headquarters in Ann Arbor, MI. “When we invite qualified candidates to our home office, I first tell them our formula for success is well defined for each brand. My advice is always in three parts: Follow the program. Aggressively follow the program. Aggressively follow the program for success. I encourage our candidates to immerse themselves in our spirit and culture. We have a genuine, caring concern for our owners and their businesses. A good example is when Hurricane Sandy slammed the East Coast last October. Molly Maid and Mr. Handyman franchisees raised money and distributed checks to hard working service techs and home-service professionals whose compensation was impacted by the storm. I remind candidates of ‘how lonely it can be in a small business,’ and assure them that they will always have connection because of 1) the great relationship between the home office and our franchisees, and 2) the family spirit that our franchisees have for each other.”
Our Molly Maid, Mr. Handyman and ProTect Painters people set us apart MOLLY MAID is a $200 million brand that’s ranked #80 on Entrepreneur
magazine’s Franchise 500®. “When I met with franchisees at our convention in Phoenix, I was taken aback by the fabulous swath of success and the incredible rewards they enjoy. The opportunity for recurring revenues and financial security from repeat customers over many years is impressive.” What’s equally impressive is that the first Molly Maid location has been successfully operating in Ann Arbor for 25 years. Even after years of growth and industry leadership, there remain 250 territories available throughout the country with wide open territories in many, many cities such as Birmingham, AL, Albany, NY, and Lincoln, NE. Customers in so many areas still seek the services of the Molly Maid brand. “Our interactive marketing experts are generating customers for our owners through a variety of digital platforms that have increased phone calls 751% and the number of visitors to our Website requesting service by 362%.” MR. HANDYMAN is a $50 million Entrepreneur Franchise 500® business with franchise owners spread across the US and Canada. Craig is bullish on the brand’s future. He expects strong yearover-year sales increases. He’s encouraged by a recent CEPro magazine article titled, “Home Remodeling Spending to Skyrocket,” that’s supported by a Harvard University Joint Center for Housing Studies LIRA report. And, he’s quick to point out that the Remodeling 550 rankings have Mr. Handyman at #10—the highest ranked handyman service franchise. “In addition to our residential services, we also have a commercial development manager, who is directing incremental work to our owners. We’re seeing results: Commercial sales in 2012 increased nearly $1.5 million with many owners increasing their sales more than 50% and several doubling their sales.” PROTECT PAINTERS is the newest brand in the SBI portfolio and is well positioned for entrepreneurs and veterans
who want a ground-floor opportunity. ProTect Painters is an Executive Model business—owners manage sub-contracted painting crews—with a wealth of lifestyle benefits. There are 40 units in the US with another 300 territories available. “With our public relations initiatives and digital marketing programs, our owners are upbeat and supporting the system. We expect to grow to 200 units in the next five years,” says Craig. “For our Molly Maid, Mr. Handyman and ProTect Painters brands, we have a topnotch group of marketing professionals who are on the leading edge of knowing and acting on reaching customers searching for our home services on their computers or mobile devices. Their entire focus is helping franchise owners to be successful in the field.” For more information: Molly Maid: mollymaid.com Mr. Handyman: mrhandyman.com ProTect Painters: protectpainters.com
Franchising USA
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Take command of your future with ServiceMaster Clean
®
Realize your dreams Combine your knowledge and leadership experience with ServiceMaster Clean and become a part of one of the country’s largest cleaning networks. Our team is dedicated to help you succeed with sales and marketing assistance and one-on-one support from our dedicated staff. After all, we have been franchising for 60 years. Financing is available. Ask about our military discount.
800-230-2360 ownafranchise.com Financing is available through ServiceMaster Acceptance Company, a subsidiary of The ServiceMaster Company, to credit qualified individuals. © 2012 ServiceMaster Clean. All rights reserved.
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Jerry Chase served as a Marine Corps Officer and Pilot from 1981 to 1987. “I went to flight school in Pensacola, Florida and Corpus Christi and after receiving my wings, was stationed at Cherry Point, North Carolina where I flew KC-130’s.
Jerry Chase
Profile
At that time, the Marine Corps was committed to the defense of Northern Europe and elements of my squadron were routinely deployed to the United Kingdom, Germany, Norway, Denmark and Sweden to support training missions with NATO allies. I was also deployed to Okinawa during my service,” recounts Jerry. He left the Marine Corps in 1987 to attend Harvard Business School.
“In my last two career moves, I served as the CEO of two publicly traded technology companies, while my wife, Chrissy, focused on running our home and raising our children. Chrissy had been eager to rejoin the business world. We had always talked about how we thought we would work well together. With our youngest child now 14, a few years ago we started to have the time and confidence to explore new business options. Franchising made sense for us because it provided the opportunity to combine entrepreneurial independence with an existing, successful business model,” said Chase. Franchising has allowed Chase and his wife to quickly learn and build a business in an industry that was new to them. “If we had tried to establish a restaurant on our own, we would have surely made a
lot of mistakes and a successful outcome would have been very unlikely. Although it is clearly our business, Togo’s offers a strong team that continues to support our first restaurant and further development.” Their motto from the beginning has been, ‘do whatever it takes to be successful.’ As in the military, the people are the key to success. Chase feels leadership by example is the most powerful tool in establishing the values, expectations and characteristics of a successful team. “People in general, and young people in particular, want to be part of something they can be proud of. Doing things the right way, not cutting corners, focusing on the customers and treating everyone with respect goes a long way towards boosting individual and team
performance,” said Chase. “We did a lot of research into a number of franchise opportunities including food service, auto care, etc. and strongly believed in the Togo’s business model. In making our decision, we liked the healthy food image of Togo’s and were impressed by the entire Togo’s management team. Both Chrissy and I felt that the brand was committed to the success of its franchisees and that they would be there for us as we established our business. We have only been at this for four months, but so far we have been proved right and are happy with our decision to go into franchising with Togo’s.” For More Information: Web:
www.togos.com
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FirstLight HomeCare
A Whole
NEWand Truly
EXCEPTIONAL APPROACH to Non-Medical In-Home Care
&AMILIES ALL OVER !MERICA ARE FACING THE SAME CHALLENGES OF CARING FOR THEIR LOVED ONES WHILE HELPING THEM THRIVE INDEPENDENTLY IN THE FAMILIARITY COMFORT AND SAFETY OF THEIR OWN HOMES -ORE THAN A NATIONAL NETWORK OF IN HOME CARE FRANCHISES &IRST,IGHT (OME#ARE REPRESENTS A NEW WAY OF CARING FOR PEOPLE AND GIVING THEM THE QUALITY OF LIFE THEY DESERVE ,ED BY A TEAM OF PROFESSIONALS WITH OVER YEARS OF COMBINED EXPERIENCE IN OPERATING SUCCESSFUL HEALTHCARE AND HOME CARE SERVICES ORGANIZATIONS WE TAKE OUR KNOWLEDGE AND COMMITMENT TO EXCELLENCE AND APPLY IT TO A PEOPLE ½RST PHILOSOPHY THAT FOCUSES ON CREATING REAL PERSONAL CONNECTIONS AND TAKES THE HOME CARE MODEL TO NEW HEIGHTS
!N )NDUSTRY 4AKING 3HAPE )N MORE THAN PEOPLE TURNED EVERY DAY "Y THE SENIOR POPULATION WILL GROW TO NEARLY MILLION The demand FOR SERVICES IN THE SENIOR CARE INDUSTRY CONTINUES TO INCREASE EVERY YEAR FUELED BY A COMBINATION OF FACTORS „ 4HE BABY BOOMER BUBBLE BEGAN TOUCHING RETIREMENT AGE AT IN „ -EDICAL TECHNOLOGIES ARE ENABLING SENIORS TO LIVE LONGER MORE ACTIVE LIVES „ $UAL INCOME FAMILIES ARE THE NORM TODAY AND MORE FAMILIES ARE STRUGGLING WITH THE CARING FOR THEIR AGING PARENTS AND THEIR OWN CHILDREN „ !!20 SURVEYS REPORT MORE THAN PERCENT OF SENIORS PREFER REMAINING IN THE COMFORT OF THEIR OWN HOME TO MOVING TO A NURSING HOME OR ASSISTED LIVING CENTER 0LUS &IRST,IGHT SERVICES HELP MORE THAN JUST SENIORS 4HE SAME COMPLETE COMPANION AND PERSONAL CARE SERVICES ARE OFTEN NEEDED BY NEW MOTHERS THOSE RECOVERING FROM SURGERY THOSE WITH DISABILITIES OR ANY ADULT NEEDING A little assistance.
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/UR #ULTURE OF #ARE AND THE $ESIRE TO 3ERVE
!T &IRST,IGHT (OME#ARE EVERYTHING WE DO IS BASED IN OUR #ULTURE OF #ARE PHILOSOPHY 4O ACHIEVE THIS WE LOOK FOR PEOPLE WHO ARE PASSIONATE ABOUT SERVICE AND WANT TO BUILD A HIGH POTENTIAL BUSINESS WHERE THEY CAN SERVE SENIORS THEIR FAMILIES AND THE COMMUNITIES IN WHICH THEY LIVE !RE YOU OUTGOING $O YOU ENJOY BEING AROUND PEOPLE $O YOU ENJOY HELPING OTHERS $O YOU ENJOY A FAST PACED ENVIRONMENT AND UNDERSTAND THE VALUE OF GREAT SERVICE 4HESE ARE THE QUESTIONS WE EXPECT POTENTIAL FRANCHISEES TO ASK THEMSELVES !ND WHILE SOME BUSINESS OR RELATED EXPERIENCE IS HELPFUL HEALTHCARE EXPERIENCE IS ./4 REQUIRED
! 'REAT /PPORTUNITY FOR #OUPLES OR 4EAMS
! &IRST,IGHT (OME#ARE FRANCHISE IS A GREAT OPPORTUNITY FOR COUPLES OR A TEAM OF PEOPLE 7E ½ND OUR FRANCHISE OFFERING HAS STRONG APPEAL TO MANY HUSBAND WIFE TEAMS OR OTHER FAMILY PARTNERSHIPS ENTREPRENEURIAL MINDED WOMEN VETERANS AND EARLY RETIREES LOOKING FOR a second career.
The first step to becoming a FirstLight HomeCare franchise is letting us know that you’re interested. Visit www.FirstLightFranchise.com or call 1.877.570.0002, and let’s get started. 1. Source: The Department of Health and Human Services and the State Department
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%842!/ 2 $) . ! 29 0 % /0 , % %8# % 04) /. ! , #! 2 %
Build A Business that
MAKES A DIFFERENCE „ &AST GROWING NON MEDICAL in-home care industry „ -AJOR MARKETS AVAILABLE NATIONWIDE „ $EEP INDUSTRY EXPERIENCE WITH TRACK RECORD OF SUCCESS „ 5NMATCHED TECHNOLOGY PLATFORM „ )N FIELD SUPPORT TRAINING and tools „ .EWEST FRANCHISE SYSTEM %6%2 TO BE RANKED IN 4OP FOR OWNER SATISFACTION
/UR #ULTURE OF Care Promise: !T &IRST,IGHT (OME#ARE THE GENUINE HEALTH AND WELL BEING OF others is our greatest concern. We VOW TO PROVIDE ½RST CLASS PERSONAL SERVICE FOR OUR CLIENTS SO THAT THEY MAY ENJOY WARMTH INDEPENDENCE AND RELAXED COMFORT IN THEIR OWN home or any setting.
877.570.0002
info@firstlighthomecare.com www.firstlightfranchise.com
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Jeff Wright Jeff Wright, a 20-year veteran in the US navy, joined in 1972, “I went on many different deployments. I was first stationed in Great Lakes for boot camp. From there I went to a submarine repair ship in Scotland and went to the west coast on many different ships. I retired as a chief officer in 1992,” said Wright. After retiring from the navy, Wright
Jeff and Cindy Wright
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worked for a Jiffy Lube franchisee for 18 years. “I started out as a store manager. I moved up to district manager and ran five stores for roughly 15 years,” said Wright. With all that first hand experience, Wright was confident that Jiffy Lube was a perfect franchise to buy in to for him and his family. “The franchisee I was working for was selling a couple of stores and I purchased them from him. It’s a great company to work for. It’s a great fit for military employees,” Wright attested. “You have a lot of independence as a franchisee to do things your way, but Jiffy lube has tested and proven guidelines and it was a easy fit for me. Plus, the training programs are second to none. They’ve won many awards for the training programs they have now. I believe that for any Jiffy Lube franchisee who engulfs themselves into the company, it’s just easy.”
What Wright believes is a great feature of the Jiffy Lube system is their district managers, “They are hands on if you need something, they respond quickly and are open to new suggestions. With Jiffy Lube you are really working with them, not for them. It’s a lot of give and take. You wouldn’t think so with a company this big, but they don’t leave you all by yourself; there’s a lot of support and assistance to help you succeed and a lot of opportunity to be heard.” Jiffy Lube offers veteran incentives and discounts. Many of the managers, employees and other franchisees Wright interacts with tend to be veterans. “The military is very intertwined in this company.” For More Information: Web:
www.jiffylube.com
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vetera ns i n fra nchisi ng
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V etera ns i n Fra nchisi ng
Chr is Lou der milk, Fra nchise C onsulta nt, T he D w yer G roup
A Love Affair:
Franchising and Veterans The U.S. is slowly recovering from The Great Recession. From late 2007 until October of 2009, the U.S. Bureau of Labor Statistics estimates 8.4 million jobs were lost. As the largest increase in unemployment when compared to the previous five recessions in the country, “great” seems an unfortunately apt description of the recession.
“Franchising isn’t just beneficial for veteran entrepreneurs, though. From franchise employees to corporate executives, the franchising industry promotes the hiring of veterans.”
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According to the Economic Impact Study, more than 17 million jobs were filled because of franchised businesses, and the Gross Domestic Product (GDP) of franchised business is over one trillion dollars. Essentially, franchises helped keep Americans employed in a depressed economy. Franchising is successful because entrepreneurs are purchasing a business model with proven fortuitous outcomes. Without the setbacks and potential bankruptcy of trial-and-error business development and growth, the franchised business has a higher success rate than non-franchised endeavors. This is not to say franchising doesn’t come with inherent risk factors, but franchisees purchase a systemized way of creating business
success. The franchisor has invested a substantial amount of resources into making sure the systems and procedures work. Most studies show 80 percent of small businesses fail within the first five years of opening. Alternatively, approximately ten percent of franchised operations fail within the first five years of business. It is a pretty daunting statistic, but many entrepreneurs who consider opening a small business look into franchising for the increased chance of success. In the current economy, every potential advantage could mean the difference between success and bankruptcy. From marketing and financing to legal counsel and human resources, franchisees have access to a collective pool of intelligence. That experience doesn’t merely come from an experienced corporate office. New franchisees can call and visit existing, successful peers who have faced the same difficulties.
Yet another benefit to franchising is the buying power available, since a franchising company can buy the goods at a discounted rate compared to independent contractors. In many cases, the brand recognition in the community is already established. But the U.S. is not only in a recession; it is also in a war. What about the approximately one million veterans who will separate from the military by 2015? Veterans transitioning into the civilian economy are at risk of returning to a bleak job market. Franchising can be good for veterans and veterans can be good for franchising. In late 2011, the International Franchise Association, or IFA, launched Operation Enduring Opportunity with First Lady Michelle Obama. The initiative challenged for-profit businesses to hire or train 100,000 veterans and military spouses by the end of 2013. Since that time, many IFA members have made
hiring commitments and more than 65,000 veterans have been hired into franchising. Also three financial services members have committed to extraordinary measures to help finance veteran franchisees. According to White House officials, by August 2012, the effort resulted in a 20 percent decrease in veteran unemployment compared to 2011. Even before Operation Enduring Opportunity, the franchising industry was committed to hiring veterans. Since its inception in 1991, the VetFran (Veteran Franchise Initiative) program has helped more than 6,200 veterans start their own franchises. VetFran is a voluntary effort on behalf of IFA member-companies that is designed to encourage franchise ownership by offering financial incentives to honorably discharged veterans. Don Dwyer Sr., founder of The Dwyer Group, began the program after the Gulf war in the 1990’s as a way to thank our veterans for their service to America. The Dwyer
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V etera ns i n Fra nchisi ng
Chr is Lou der milk, Fra nchise C onsulta nt, T he D w yer G roup
Mary Kennedy Thompson, President, Mr. Rooter
Group, Inc. is the holding company of Aire Serv®, Glass Doctor®, The Grounds Guys®, Mr. Appliance®, Mr. Electric®, Mr. Rooter® (Drain Doctor in the UK and Portugal) and Rainbow International®. When Dwyer started the program he saw many vets coming home wanting to start a business, but they didn’t have the sufficient funds to do so. In fact, The Dwyer Group has helped more than 270 veterans start their own franchises, and many of them had no prior experience in the trades. As of April 2013, 562 franchise companies are participants in the program. VetFran membership has hit new highs, growing by more than 25 percent in the first year after Operation Enduring Opportunity was announced. Former member of the U.S. Army Presidential Escort Unit, Ray Bramble, opened an Aire Serv in Front Royal, Va., in 2009. He previously owned a heating and air conditioning business, but he said he prefers the opportunities afforded through franchising because the Aire Serv support team can help him budget and train employees. “In the military, if someone says, ‘If you do this, this is the result you’re going to
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Ron Madera, President, The Grounds Guys
Chris Loudermilk
get,’ I see no reason to do it any different,” Bramble said. “I was successful with my own company, but not as stable as I am now.”
franchisor Cookies by Design®, where she was president of the corporation. She began her path in the franchising industry, first as a franchise owner at Cookies by Design in 1994. She was a franchisee for the cookie company for six years before the corporate office recruited her to its home office. Cookies by Design promoted Thompson to president in 2004. In addition to her role with Mr. Rooter, she is the former Chairperson of the IFA VetFran Committee. Madera joined The Dwyer Group in 2004 as a Franchise Consultant for Mr. Appliance® and promoted to Vice President of Operations in 2006. In February 2010, Ron was appointed to President of The Grounds Guys.
Franchising isn’t just beneficial for veteran entrepreneurs, though. From franchise employees to corporate executives, the franchising industry promotes the hiring of veterans. “We actively strive to hire veterans,” Brian LaPierre, Mr. Rooter of Rhode Island franchise co-owner and Army National Guard veteran, said. “There’s definitely a bond, and for the most part, there’s a great work ethic.” The transition from the military into a franchising system makes sense, if only because of the recommendation of adhering to a specific business model. ”There’s definitely no better support, especially with Mary [Kennedy Thompson] at the helm, to understand where they’ve been and what they’ve gone through,” LaPierre said. Mr. Rooter President, Mary Kennedy Thompson is a veteran. In fact, of the seven Dwyer Group brands, two presidents are veterans: Thompson and The Grounds Guys President, Ron Madera. Thompson became president of Mr. Rooter in October 2006 joining Mr. Rooter from national
As the economy slowly rebuilds, franchising continues to grow and support communities and veterans. For more information about the symbiotic relationship of franchising and veterans, visit the IFA website at www.franchise. org. To learn more about VetFran and Operation Enduring Opportunity, visit vetfran.com. Chris Loudermilk is a Franchise Consultant with the Dwyer Group and is a member of the VetFran Committee. For More Information: Web:
www.vetfran.com www.dwyergroup.com
Katy Bachman was in the Army for 5 years as a finance specialist. During that time she worked in payroll, disbursement, accounts payable/receivable clerk for a military publication operation and a very short stint as an administrative assistant. Transferred to Germany, Bachman lived and worked for 3 years at the Armed Forces Recreation Center outside of Munich.
Katy Bachman The years in Europe gave her the opportunity to travel extensively to many countries in the European and Mediterranean areas that she would not have otherwise been able to afford in time or cost. The military experience also helped Bachman hone my motivation for self-driven successes. At the completion of her military experience, with her newly developed drive for success, Bachman went on to pursue further education, obtaining college degrees. The love for travel that Bachman discovered during her military years stuck with her. She eventually chose a franchise in an area that she absolutely loves and values - travel. “I found with my tenure as
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an educator and my military experiences, that generally the broadened experiences with travel and other cultural experiences had greater impact on understanding the social sciences, greater respect for the world culture, and appreciation for the diversity that surrounds us all. With that in mind, owning my own travel business seemed a perfect fit.” As a single parent, a travel franchise was also a perfect fit for Bachman, given the flexibility afforded by a home-based franchise. CruiseOne offered Bachman all of this. Bachman knows she made a wise choice with CruiseOne. “I would not have gone into business for myself without the backing of a solid and well organized
franchisor. The marketing potential, technology support, and superb standing with suppliers along with the way each franchisee is treated with respect were tantamount to my decision. Whether a brand new franchisee or long-timer in the business, everyone in the CruiseOne family is encouraged, supported, and allowed to run their business as they see fit within the contractual agreement. My research into choosing which franchise opportunity was the best fit is what led me to choose CruiseOne. They met all the needs I listed and have excelled in those areas since.” For More Information: Web:
www.cruiseone.com
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Franchising USA
Michael Lambert spent six years in the marine corps and the next fifteen years as a government contractor within the military. “I worked in the intelligence community and only left last November,” shared Lambert.
Michael Lambert A year and a half before Lambert decided to retire and move closer back to home, the idea was brewing as Lambert felt he had been away from home forever. “I wanted to work for myself. I wanted to return to Texas and have a role that would get me involved in the community,” said Lambert. Lambert resolved to find something he was good at and enjoyed. “I knew that, not ever being self employed or a business owner, I needed a structure in place to help me succeed. I was attracted to the stability, structure and support that a franchise would have. A good friend of mine, from the marines, is a Valpak franchisee. I reached out to him and that’s what got the ball rolling.” The leadership qualities Lambert acquired through his background in the military have paid off ten fold. “It all comes down to leadership by example; working hard;
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and, putting your best foot forward. The lessons I learned in military through training and work, gave me the skills and attitudes that will help me succeed with Valpak. In the military you have to push through tough times and doubts. It’s human nature to experience low times. With the military I always had my sights set on a goal. This goal allows you to push through the tough times. I know that because of my past and the attitudes I have, I can accomplish any goals I set with Valpak. I believe I’m well suited for success,” Lambert explained. Lambert decided on Valpak primarily because they felt like family. “The biggest thing, when you’re in small units in the marine core, is you get to know each other. There’s instantaneous camaraderie, and I felt that way instantly with Valpak. Secondly, the support and level of
knowledge, expertise and excitement all throughout the exploration phase made me thoroughly impressed by their sincerity. They live it, breathe it, and practice what they preach. Their level of expertise was tremendous. It’s a well-rounded group who are all knowledgeable and it made me feel comfortable,” said Lambert. Now that Lambert has officially become a part of Valpak, he feels just as fantastic about his decision, “I have a couple people allocated to my franchise system and a whole team who can support me with things like demographic information or specific client questions. Valpak has a veteran friendly initiative that I took advantage of. They’re trying to bring veterans into the network and I’m glad I jumped on the opportunity!” For More Information: Web:
www.valpak.com
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V etera ns i n Fra nchisi ng
Bobbi Martinez Bobbi Martinez joined the Army in 1979. During basic training, she was chosen to be squad leader. During AIT (Advance Individual training), she received awards for leadership, sharp shooter, and Soldier of The Month and, was in the running for Solder of the year.
Also during that time Martinez was recruited by The Old Guard, serving under President Ronald Reagan. She was one of the first women to serve in this highly
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Profile
prestigious unit, based in Washington DC. When Martinez speaks about her time with The Old Guard, it is with a great sense of pride. “The 3rd U.S. Infantry Regiment (The Old Guard) is the face of the Army. Old Guard Soldiers represent all Soldiers in ceremonies in the National Capitol Region and throughout the nation. The Old Guard is the official Escort to the President of the United States and our nation’s Premier Memorial Affairs and Ceremonial Unit. Old Guard Soldiers are in Arlington National Cemetery daily rendering final honors to our fallen, both past and present.” At the conclusion of her military career, there were many reasons that influenced Martinez to join a franchise. “I have had a desire to be an entrepreneur, as well as wanted to directly influence all aspects of the business. Along with my Military
experience that brought me leadership, focus and discipline, I felt confident that my life experience would allow me to be successful. I have a real desire to help people in need so my customer service background helps me in my approach to people. My sales experience also helps me with closing.” After a lot of research and careful consideration, Martinez and her business partner decided to join FirstLight HomeCare. “We chose FirstLight HomeCare because of their experience and enormous amount of support they have provided. I can’t say enough about the dedication that FirstLight HomeCare has for our success. We have all that we need to be world class.” For More Information: Web:
www.firstlighthomecare.com
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DON’T MISS OUR NEXT ISSUE!
Part three of a three part special supplement featuring veterans in franchising. Advice from the experts helping veteran franchisees succeed. News and information specific to veterans searching for a fresh start in franchising.
Opportunities are still available in our June Veterans in Franchising special supplement. Share your story with new franchisees from the Veteran community Contact: Jenn Dean, Senior Sales Executive jenn@cgbpublishing.com 250-590-7116 Franchising USA
ex per t advice
Jack Eberenz, President, Franchise Integration
F ranchisin g Y our B usiness :
A Growth Strategy
If you have a successful business that can operate in many locations regionally, nationally or internationally, you may want to consider using franchising as a growth vehicle.
revenues, fixed fee, or fee built into the cost of goods supplied by the franchisor.)
Restaurants are commonly franchised, but businesses as varied as mold remediation, garage door repair, closet cabinets, medical clinics, medical labs, retail stores, house cleaning, tree fertilization, and car repair are among the 4,000 + franchisors in operation.
• Management with “skin in the game”.
Franchising is an arrangement in which a business (the franchisor) expands by licensing out its business model to other businesses (the franchisee). The franchisee pays a fee up front to the franchisor for the right to open the business and for training. They also pay ongoing royalties (often a percentage of
Franchising USA
Benefits of Franchising Franchising has certain benefits for businesses seeking to expand. Licensing out your business model to others creates the opportunity for: • Rapid market penetration. • Access to the capital for growth (from the franchisee). • A community of like-minded people collaborating excellence to propel the system to new and greater heights. Businesses that benefit from the franchising model tend to be: • Those that need widespread distribution, or units such as restaurants. • Those businesses that benefit from local ownership. • Those with a concept that can be taught in a relatively short period of time. • Those requiring significant capital to
open the business.
Drawbacks of Franchising Franchising has certain drawbacks: • New business model. While you know how to run your business, you will have to learn a new set of skills in running a system of franchisees. • Upfront expenses. Franchising is highly regulated and requires the assistance of experienced franchise attorneys and consultants. • Added regulation. Certain states require registration or filings before you can franchise. Businesses that do not benefit from the franchising model tend to be: • Those that require years of training to operate. • Those with authoritarian-type management. • Public companies and/or those with have access to significant capital. • Those distributing products or services through established businesses.
“Many new franchisors use franchise business experts to help them put all the business aspects of the franchise system together.” Requirements for Franchising The first requirement is that the franchisee must be able to make a profit and pay you a royalty. If your business model allows for both of those conditions, then consider other requirements: • You need at least one, preferably several or many, company-owned operations with significant experience in operating the business. • Your business needs to be teachable. • Your business needs unique intellectual property and trademarks. • You need to be a person who can work with other people and not ‘be their boss’. • You need capital to pay for all of the legal and structural work that needs to be accomplished.
Choosing a Franchise Expert Many new franchisors use franchise business experts to help them put all the business aspects of the franchise system together. In choosing a franchise expert, consider these items in your selection process: 1. Price. Some companies are expensive and may include in their package of services things you don’t need. Make sure you only pay for what you need. 2. Track record. How many documented successes do they have? Remember, it’s not the number of companies they have worked with but how successful those companies are. Call those companies and see if they are happy with the services they received. 3. Specialty. Your business is unique. You need to look carefully at what the expert produces; you don’t want boilerplate intended for another business or type
of business that suddenly becomes the basis for your franchise. 4. Independent attorney. Always choose your own. Avoid using in-house attorneys or the attorney the expert recommends. You need to choose a franchise attorney who fits you and protects you, not one that protects the expert. 5. One-to-one work. The staff of a franchising expert seldom has real expertise. Choose an expert who will work one-on-one with you. 6. Clients. How long has the expert’s clients remained with them? A good franchise expert should have clients who have continued to use them for many years. Franchising is complicated and good advice never grows old. Franchising your business is a big decision and there are many factors to consider prior to franchising. If a business has the demand and fits the criteria to franchise there are even further considerations and planning to be made so a franchisor can ensure they receive the highest quality support and are as efficient as possible in making the change from a business to a franchise. If all of this is done successfully and a franchise has the opportunity to grow and flourish, the pay off is infinite and your business concept or service will have the ability to reach many. Mr. Eberenz has over 40 years of leadership and executive experience. In a broad executive career he has experience as a General Manager, President, Chief Financial Officer, and Chairman of the Board in companies nationwide. Mr. Eberenz has been a key advisor to franchisors since 1981 drawing from his experience as a franchisee and President of a
Jack Eberenz
Franchisor. He holds board positions with regional, national and international franchisors and is the President of the Arizona Franchisor Association. He holds a B.S. Degree from the Syracuse University School of Management. Mr. Eberenz has very broad franchise experience and serves on the board of several national or international franchisors including Realty Executives International, Precision Door Service and The Hat Club. As clients he has a number of emerging franchisors from ones that are currently organizing to retooling some that have hit a bump in the business road. As an outspoken advocate of franchisors maintaining their principles and vision throughout their business growth Mr. Eberenz has spoken to many groups on franchising and the principles based around “Perceived Value”. He is the Chairman of the Arizona Corporate Governance Institute, which assists corporations in using statutory or advisory boards to increase their profits and cash flow. Other Board affiliations include the Board of Directors of Beatitudes Campus of Care, Merger/Acquisition Roundtable, Arizona Business Leadership, Valley Advisory Group and Business Advisory Services. For More Information: Web:
www.franway.com
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women in f ra nchising
Gloria Plaisted, Franchisee, President & CEO
Fast-Paced Life
D own an U ne x pected L ane us up, we used the lessons they served to perfect our operations and grow the sales,” explained Gloria. It worked. They were the quintessential Mom & Pop operators. The duo was and still is the breed of risk takers in franchising that continues to prove business can stay exciting.
Gloria and Rick
Growing up Gloria Plaisted always dreamed of a life in the fast lane. It wasn’t until she entered her junior year in high school that this dream came into clear focus. “I wanted to be a NASCAR driver.
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In 1970, it wasn’t an easy dream to fulfill in a male dominated sport, but the element of risk compelled me to want it even more. My mind was made up, but my heart took me off course,” said Gloria. After marrying her high school sweetheart the two took the proverbial leap of faith into risk and the fast lane, as a fast-food Dairy Queen franchisee. “We bought an existing location that no one else wanted. But we could see past the grime, the modest inventory and archaic equipment. And in-spite of all the setbacks that tried to trip
In retrospect, Gloria is convinced now that the sacrifices she made to secure a future for her family could have been achieved with less intensity, “I remember the time I apologized to my oldest son Marc for not having more family dinners around the table, while building our company. He reassures me, to this day, that no permanent damage was done.” Work/life balance is crucial. But, Gloria believes she would be remiss if she didn’t point out that, in the first three years of any business start-up, you must factor in a sense of urgency and availability to do what you have to do when you have to do it. “I love all the hats I wear so it’s hard for me to unplug. I’ve recently begun an initiative to purposely un-tether myself from technology during select hours. I’ve also learned to say “no” more, and I’m intentionally spending more time on personal initiatives and interests. Coupled with my strong Christian faith, I’ve found this new healthy regimen of discipline creating a much stronger me,” remarked Gloria.
Laughing it Off Perhaps one glaring trait that sets Gloria apart from some women in franchising would be her wild and outrageous humor, a rare gene Gloria acquired from a family of nuts, as she likes to say. Ironically that gene has served her well when she needed to press on as a youngster who was abandoned into poverty. This sense of humor is one of the greatest assets Gloria feels she brings to her marketplace, “I believe when you lead with the component of fun, you get people’s attention. Why have we been successful? The answer is so simplistic, that many who ask it of us simply roll their eyes at our answers and fail to take it to heart. In a foodservice franchise, sustainable success includes these key principles: • Lose the payroll check-punch the clock mindset, • Don’t serve anything you wouldn’t eat yourself, • There’s always hope with water and soap, and • Do what you have to do when you have to do it.” Gloria also encourages entrepreneurs to stay relevant in their industries. “Thomas Edison understood that commerce demands creativity. It’s easy to get inundated with day-to-day operations and ignore innovation in your business. The most successful start-ups stay consistent with innovation.” Regardless of what stage of growth a franchisor is in, it is essential they have a
“Successful entrepreneurs have doggedness, a keen sense of urgency & an innate ability to selfcorrect.” mentoring mechanism in place to facilitate
franchisees these trade shows offer an
The biggest influence for Gloria came out
of relevant contacts. “Quite honestly, we
franchisor-franchisee communications.
of idea exchanges amongst franchisees.
By attending franchise trade shows and
expos on a regular basis, Gloria continues to glean valuable take-home ideas to polish her operations. For potential
opportunity to network and build up a list surround ourselves with great people and
managers, many who know more than we do about the ever-changing marketplace. Their influence inspires us on a daily basis,” Gloria admitted.
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womem in f ra nchising
Gloria Plaisted, Franchisee, President & CEO
Still Loving the Lifestyle “When you start a business of your own, you will do a lot for very little. When and if you achieve great success, you will do a little for a lot.” That quote, from a pioneer in franchising, kept Gloria focused through her clumsy, exhausting, and, ‘Tell me why I’m doing this?’ moments and years. Soon after the couple’s first store and first brand, they knew that the number one was indeed a lonely number and they hungered for more growth. They hungered to add more to their plates, “I continue to hold positions of leadership in the brands and communities I love and serve and I have more time now to coach and raise up new leaders in our industry. But hands down, my sweet spot is working smack dab in the center of all the action in the dining room with guests!” “Lessons are a good teacher. We learn them from the chaos that repeats itself and then we resign ourselves to fixing the cause. I would have to say that learning the art of delegating came hard to me,” confessed Gloria. Another lesson that took her too long to realize, was the
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dramatic increase in her same store sales once the couple bought into the importance of reinvesting back into our stores. Finally, “What better lesson could I have learnt than one that propelled me to make a positive difference in the life of someone that God puts in my midst.” Gloria believes the ROI in the investment of people is beyond measure. “It’s been said that success is not counted by how high you have climbed, but by how many people you brought with you.”
Research, consult Researching and consulting is crucial to getting off to a realistic start in any franchise, according to Gloria. “What draws most people to the franchising model is the built-in security. However, it’s foolhardy of any prospective franchisee to think that the so-called, ‘safety net’ the franchisor provides is a guarantee of success. I’ve seen wild success under that safety net as well as wild failure. In franchising, startup costs can be high, profits aren’t guaranteed, and your independence – like it or not – is limited. Mavericks need not apply.
The most important component of your due-diligence is speaking to existing franchisees to see if they have a happy marriage with their franchisor. If possible, shadow for a time alongside of an existing franchisee. When you are gearing up to invest, don’t underestimate financial backup in case of shortfalls. One timetested truth is, regardless of the economy, stay focused on expenses, fundamentals and bottom-line numbers,” Gloria said. With over 35 years of franchising experience, Gloria Plaisted is a proven, passionate multi-unit franchisee and President/CEO of Son Group, LLC. She is a popular writer/speaker within in the franchising industry. Gloria works hard at having more fun in the franchising world than the average person should. For More Information: Email: LinkedIn: Twitter: Web:
gplaisted@gmail.com www.linkedin.com/in/ gloriaplaisted www.twitter.com/ faithworkbreak www.brandchise.com.
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400+
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Franchising USA
Combine a passion for business with healthier food options, package them in stylish destinations that deliver a true experience, and change the dining landscape with a business motto to “Treat Yourself Well.� That’s the recipe for success for one of the fastest-growing franchises in America: Red Mango. When Founder Dan Kim opened his first Red Mango store in 2007, an entrepreneurial dream was launched which would defy the economy, win legions of fans online, create demand for hundreds of locations and reveal a growing desire that consumers want healthier foods. The dream to share that great business with others then became a reality through Red Mango Franchising. Today, with more than 210 locations across North America, Red Mango has championed a new era, delivering a menu that offers all-natural, gluten-free frozen yogurt that is kosher and rich in probiotics. Add to that a network of franchise owners and food operators who embrace the same passion for business, and the healthy bottom line has translated into a brand of amazing growth. Red Mango has perfected a franchise system that offers training and marketing support from some of the most successful leaders in the industry and has established the most popular brand with traditional, self-serve, kiosk and store-in-store opportunities to meet escalating demand. The company credits its dedication to a healthy menu as the cornerstone to that success; serving fresh fruit daily, maintaining a rotating line of more than 50 frozen yogurt flavors, and offering a choice of all-natural toppings and craveable smoothies have been the key drivers of this feat. Together, it creates a brand power that resonates with smart consumers who want to know exactly what they are getting and will show their loyalty in return. With locations from coast to coast across the U.S. and international expansion in Central and South America, Red Mango has proven to be the real deal and plans to double in size in the next couple of years. For more information, visit www.redmangousa.com. Franchising USA
Red Mango Founder Dan Kim
A PASSION FOR THE BUSINESS.
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ex per t advice
Edward Levitt, Sr. Partner, Aird & Berlis LLP
Canadian E x pa n s i o n s o f US Franchise S y s t e m s P a r t II Tax Considerations A traditional master franchise relationship between a non-Canadian franchisor and a Canadian entity would not likely attract taxation under any of the Canadian or provincial taxing statutes except for withholding tax.
Edward Levitt
Canada imposes a withholding tax when a resident of Canada pays or credits certain amounts to a non-resident of Canada. Canadian withholding tax applies on payments of royalties, dividends, interest and certain other items paid to a non-
“All but the Ontario statute specifically permit the use of foreign franchise disclosure documents, provided that there is an addendum which ads any missing information required under the relevant provincial statute.� Franchising USA
resident of Canada.1 What this typically means for a non-Canadian franchisor is that payments coming from the Canadian master franchisee will be automatically reduced by the amount of the withholding taxes. Withholding taxes that are deducted from royalties paid to the non-Canadian franchisor will usually be eligible for foreign tax credits against taxes payable by the franchisor in the U.S.
Franchise Disclosure Legislation Currently, franchise specific legislation (containing primarily disclosure obligations) exists in the provinces of Alberta, Manitoba, Ontario, New Brunswick and Prince Edward Island. Constitutionally, the federal government of Canada does not have jurisdiction to legislate franchising for the country as a whole, so it is fortunate that 5 of the 10 provinces have chosen similar approaches in their franchise statutes.
Canadian franchise legislation is designed to protect franchisees primarily by mandating detailed disclosure of a franchise system’s history, current status and financial requirements and providing franchisees with remedies for inadequate or misleading disclosure, such as rescission and damages.2
franchisor wishes to provide non-Canadian financial statements in a disclosure document, they must be prepared in accordance with generally accepted auditing or review engagement standards that are at least equivalent to those set out in the Canadian Institute of Chartered Accountants Handbook.6
The requirement for a franchisor to make disclosure is triggered by the payment of money to the franchisor or its affiliate(s) or the signing of any agreement by a prospective franchisee relating to the franchise.3 Disclosure must be made at least 14 days before the triggering event.
Although there is no case law on the subject, it is commonly believed by Canadian franchise lawyers that franchisors need to make disclosure to a master franchisee for the whole of Canada. This is because the Ontario, New Brunswick, Prince Edward Island and Manitoba statutes take jurisdiction when the franchise is to be operated “partly or wholly” in the respective province.7 The same is true under the Alberta statute where the franchisee is resident or has a permanent establishment in Alberta.8 The master franchisee will in turn be required to make disclosure to its Canadian unit or area franchisees in the provinces with disclosure legislation, but the nonCanadian franchisor will not be required to make any further disclosure.
Despite some differences among the franchise statutes in Canada, the statutes are similar enough to make it possible to create one franchise disclosure document for use in all of the provinces. All but the Ontario statute specifically permit the use of foreign franchise disclosure documents, provided that there is an addendum which ads any missing information required under the relevant provincial statute.4 Ontario, a very important franchise market, does not have such a provision in its statute, but does not prohibit the use of such “wrap-around” disclosure. However, the statute requires the disclosure to be clear and concise and imposes other more rigid requirements that relate to the form the disclosure document takes. 5 Since it is very difficult to be clear and concise when a disclosure document contains non relevant, non-Canadian material and because the cost of properly creating a “wrap-around” disclosure document is almost as much as the cost of creating a comprehensive Canadian disclosure document, the prevailing practice is not to use non-Canadian disclosure documents in Canada. All of the provincial statutes require franchisors to include financial statements for their most recently completed fiscal year in their disclosure document. If a
The Special Case of Quebec Non-Canadian franchisors should be aware of some additional restrictions encountered under the law of the Province of Quebec that, although not specifically dealing with franchising, nevertheless have an impact upon franchising activity in that province. A duty of good faith and fair dealing is enshrined in the Civil Code of Quebec (“CCQ”),9 and applies also to pre contractual negotiations. The CCQ also sets forth a series of rules, founded upon an implicit pre contractual disclosure obligation, governing certain types of provisions contained in adhesion contracts (contracts not subject to negotiations), such as external (i.e., franchisor’s operating manuals), abusive, illegible and incomprehensible provisions.10 These specific disclosure obligations are
unilateral and imposed on the stipulating party in order to ensure that the adhering party has knowledge of and has consented to all of the provisions in the contract. Furthermore, the burden of proof of such knowledge and consent is placed upon the stipulating party. It is also important to note that the use by franchisors of lengthy pre printed franchise agreements are viewed in Quebec as contracts which need to be drafted in the French language (unless the parties contract in writing otherwise).11 In addition, all documentation addressed to the public or to the franchise’s employees must be in French first and must be displayed equally or more prominently than any other language used.12 This would also apply to trademarks and company names. However, if a company has an English name or mark only, that name or mark may be used alone.13 For those franchisors who are also suppliers of pre packaged products, the federal packaging and labelling legislation requires franchisors to produce their products with labels in both English and French, not only in Quebec, but throughout all jurisdictions of Canada.14
Supply Chain Issues A number of regulatory barriers must be considered where a US franchisor is also a supplier to a franchise system in Canada. These regulatory barriers to moving goods across the border into Canada can be grouped into three main categories: import restrictions, import duties and technical standards. Import restrictions under the federal Export and Import Permits Act require that some goods may be imported only if the importer obtains the appropriate permit.15 These permits are part of a quota system which is intended to protect certain Canadian industries by limiting the quantity of goods imported into
Franchising USA
ex per t advice
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ex per t advice
Edward Levitt, Sr. Partner, Aird & Berlis LLP
influential private organizations such as the Canadian Standards Association in Canada. The Canadian market can offer very attractive growth opportunities to American franchisors, and taking advantage of those opportunities is simply a matter of evaluating and embracing Canada’s unique advantages and challenges. Edward (Ned) Levitt is a senior partner of Aird & Berlis LLP, Toronto, Canada, and chair of its franchise law group. He served as General Counsel to Canadian Franchise Association from 2000 to 2007 and, as a member of the Ontario Franchise Sector Working Team, was instrumental in the creation of Ontario’s franchise legislation. Among his many publications is Canadian Franchise Legislation published by Butterworths/ Lexis Nexus. For More Information: Phone: 416-865-4628 Email: nlevitt@airdberlis.com
References: Income Tax Act, RSC 1985, c 1 (5th Supp) at s. 212.
1
Franchises Act, RSA 2000, c F-23 [Alberta Act] at ss. 9 and 13; Arthur Wishart Act (Franchise Disclosure), 2000, SO 2000, c 3 [Ontario Act] at ss. 6 and 6; Franchises Act, RSPEI 1988, c F-14.1 [PEI Act] at ss. 6 and 7; Franchises Act, SNB 2007, c F-23.5 [New Brunswick Act] at ss. 6 and 7.
2
Alberta Act, Supra note <*> at s. 4(2); Ontario Act, Supra note <*> at s. 5(1); PEI Act, Supra note <*> at s. 5(1); New Brunswick Act, Supra note <*> at s. 5(1).
3
Franchises Regulation, Alta Reg 240/1995 [Alberta Regulation] at s. 2(2); Disclosure Franchises Regulation, Alta Reg 240/1995 [Alberta Regulation] at s. 2(2); Disclosure Document Regulation, NB Reg 2010-92 [New Brunswick Regulation] at s. 4; Franchises Act Regulations, PEI Reg EC232/06 [PEI Regulation] at s. 3(2).
4
Ontario Act, Supra note <*> at s. 5(6).
5
Canada each year. Additionally, there are many federal statutes which restrict the importation of a large variety of items, including meat, plants, seeds, fruits and vegetables, magazines, books, drugs and others. Import duties are levied under the Customs Act as a method of protecting domestic businesses by imposing a charge at the border which affects the domestic competitiveness of imported products.16 Usually, the magnitude of the duty or
Franchising USA
tariff is influenced by the relative strength or weakness of any existing domestic industry. Lastly, technical standards can be used to protect local industries by requiring products (domestic and imported) to comply with standards which domestic manufacturers can meet more easily or cost-effectively, thereby providing domestic manufacturers with a competitive advantage. These standards are set by many levels of government as well by
6
Alberta Regulation, Supra note <*> at s. 3(2)(b); New Brunswick Regulation, Supra note <*> at s. 7(2)(b); Ontario Regulation at s. 3(1)(b) PEI Regulation, Supra note <*> at s. 5(2)(b).
Ontario Act, Supra note <*> at s. 2(1); PEI Act, Supra note <*> at s. 2(1)(c); New Brunswick Act, Supra note <*> at s. 2(2).
7
8 9
Alberta Act, Supra note 11 at 3(1)(b).
Civil Code of Québec, LRQ, c C-1991 at art. 1375. Ibid at ss. 1334-1339.
10 11
Charter of the French language, RSQ, c C-11 at s. 55. Ibid at ss. 51-79.
12 13
14
Levitt, N. and Mondragon D., J., “A Survey of International Legal Traps and How to Avoid Them Beyond the Franchise Laws”, American Bar Association 30th Annual Forum on Franchising (2007) at 43.
Consumer Packaging and Labelling Act, RSC 1985, c C-38 at ss. 6(2) and 6(8). Export and Import Permits Act, RSC 1985, c E-19 at s. 14.
15
Customs Act, RSC 1985, c 1 (2nd Supp).
16
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2013
PROGRAMS & EVENTS IFA is the premier resource for franchise news, trends, and strategies. Plan your strategy for professional career, education and networking development.
Legal Symposium – May 5-7 – Washington, DC The 46th Annual Legal Symposium is developed by a task force of franchise legal experts. Blending topics focused on franchise business and law, programming addresses the latest business and franchise law developments and features knowledgeable franchise law practitioners, franchise executives and state regulators. IBA/IFA Joint Conference – May 7-8 – Washington, DC The 29th Annual IBA/IFA Joint Conference is developed in partnership with the International Bar Association’s Franchising Committee to create a program relevant to our friends in the international franchise law profession. Experienced legal counsel share invaluable information regarding the latest developments in international law. FranCamp 2013: Digital Marketing & Technology Best Practices Conference – May 14-15 – Atlanta, GA FranCamp 2013: Digital Marketing & Technology Best Practices is a new conference from IFA designed to help franchise professionals understand technology options and platforms. Includes case studies and best practices designed to integrate technologies like GPS, content management, communications, social, local, mobile and more into your business effectively. Public Affairs Conference – September 16-17 – Washington, DC Meet us in our nation’s capital for a gathering of our Board of Directors, committees, forums, councils and task forces to network and visit with their Members of Congress during IFA’s most important advocacy event. Leadership meetings will also be held in Washington September 15, 16 and 18 to conduct important association business. Franchise Development Seminars – July 17-18 – Philadelphia, PA // September 25-26 – Denver, CO // December 8-9 – New York, NY Participate in an in-depth exchange of information with franchise development experts revealing tips and tools for building your franchise brand, featuring programming focused on industry challenges, successes and what to expect for the future. International Symposium – June 18-19 – New York, NY The International Symposium focuses on the latest trends and strategies for increasing your franchise system’s presence internationally while meeting the people that can help you make it happen. With more and more countries opening their doors to businesses outside their own borders, executives from all over the world come together to discuss current trends and strategies. This year’s symposium will be held just prior to the International Franchise Expo. International Franchise Expo – June 20-22 – New York, NY Co-hosted with MFV Expositions, the IFE brings together hundreds of franchise concepts and thousands of qualified prospects from across the United States and more than 80 countries. West Coast Franchise Expo – October 24-26 – Anaheim, CA Co-hosted with MFV Expositions, brings together franchise concepts and qualified prospects from the growing West Coast market. Emerging Franchisor Conference – November 13-14 – Ft. Lauderdale, FL The Emerging Franchisor Conference is designed to address challenges and opportunities unique to franchise systems with 300 or fewer units. The Emerging Franchisor Conference is a prime networking and educational conference for franchisors that are ready to take their system to the next level. AND MARK YOUR CALENDAR NOW FOR THESE EARLY 2014 EVENTS Franchise Expo South – February 6-8, 2014 – Houston, TX Co-hosted with MFV Expositions, the FES brings together franchise concepts and qualified prospects from the southeastern United States, Latin America, and the Caribbean. Annual Convention – February 22-25, 2014 – New Orleans, LA More than 3,000 franchise professionals will gather to learn, network and chart the future of franchising. The Annual Convention presents multiple business and professional development opportunities along with a variety of ways to learn from and share best practices with successful franchise executives from various industries of all sizes. www.franchise.org Franchising USA
Lending to Franchises Reaches Highest Level Since the Recession “Franchise growth is inextricably linked to the availability of small business lending and we are pleased to see a positive trend in the availability of capital to existing and prospective franchisees.” According to new research, lending to America’s franchise businesses will reach its highest level since the recession, providing $23.9 billion in lending to support 59,300 unit transactions, yet will still fall short of demand. The Small Business Lending Matrix & Analysis, Vol. 5, prepared for the IFA Educational Foundation by FRANdata, shows that in 2013, new and existing franchise units will create or maintain 797,700 jobs and generate $106 billion of annual economic output to the American economy. “Franchise growth is inextricably linked to the availability of small business lending and we are pleased to see a positive trend in the availability of capital to existing and prospective franchisees,” said IFA President & CEO Steve Caldeira. “Franchising remains the most viable
business model in the world to quickly grow and scale a business. The surge in lending to franchises since the recession reflects the continued popularity of franchising as a means for investors to go into business for themselves, but not by themselves. Many lenders often view franchising’s proven, structured and scalable business model as a lower risk profile due to the support many franchisors are offering franchisees during the economic recovery.”
resulted in the development of various tools for the industry, including a new website, www.smallbusinesslendinghub. com, to provide a one-stop shop for lending information, as well as a franchise lending template to help standardize the materials provided to banks. Two Small Business Lending Summits in 2011 and 2012 helped to foster greater understanding among the franchise and lending industries, as well as government leaders.
The factors shaping the lending environment for franchise business in 2013 include higher demand for franchise transactions, greater franchisor capacity for growth, increased lending ability by banks to franchisees, increased willingness for both SBA and conventional lenders to finance franchisees and a moderate pace of economic recovery through 2013.
According to the new study, franchise demand for funding to spur growth has surged in 2013, up 10.6 percent over 2012, so despite the increase in lending, there is still a 9.7 percent shortfall, or $2.6 billion, between franchise demand for growth and banks’ ability to meet the demand. The shortfall between demand for financing and availability was 9.1 percent in 2012 and 9.7 percent in 2011. The $2.6 billion (9.7%) shortfall will result in 6,400 units not being created, with the loss of 85,900 jobs that will not be created (or in some cases maintained), and $11.4 billion in economic output to the U.S. economy.
In addition, in 2011, IFA launched a comprehensive outreach campaigned aimed at educating the lending industry about the components of franchising and to help franchisees become better prepared in requesting loans in the new, normal lending environment. The campaign
For more information: Web: www.franchise.org
Franchising USA
abou t f ra nchising
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f ra nchise in focus
G reat Clips
Great Clips I t ’ s all about the franchisees
“Being the world’s largest and fastest growing salon brand isn’t enough for Great Clips. The company now is aiming to be the first billiondollar salon brand in total sales.” Everything Great Clips does, it does for its franchisees.
with no corporate owned salons, which means that Great Clips’ success is hinged on the success of its franchisees—resulting in unprecedented levels of support.
From recruiting the best and the brightest to join its franchise system, to developing ground-breaking technologies to improve customer service, to providing tools and resources that help franchisees monitor and grow their businesses—Great Clips leads the way in providing unrivaled franchisee support.
A family company
In fact, the company is so dedicated to helping franchisees build their businesses, there is an expectation in the corporate office that any call or email from a franchisee will be responded to within 24 hours—and, ideally, even faster than that. This is why Great Clips is no ordinary salon brand. It’s the world’s largest and fastest growing salon brand with more than 3,300 locations throughout the United States and Canada. Great Clips differentiates itself from competing salons with its 30-year history of success, continued growth, innovative technology and franchisee support. Great Clips is a family-owned company
Franchising USA
Great Clips started in 1982 with owners Steve Lemmon and David Rubenzer. Current Chairman Ray Barton began working with Lemmon and Rubenzer in the fall of 1982 and became part owner and CEO in March of 1983. Lemmon and Rubenzer believed Barton’s talents and vision would help Great Clips grow. Barton, in turn, faithfully held to the belief that the haircare industry was about to face a revolution. Up until this point, most people received haircuts in one of three ways: in fullservice salons, from a mom-and-pop barbershop (remember the barber pole?) or at home. Barton saw the industry changing. He believed that haircare, like real estate, fast food, pizza and many other industries, would change from being an industry dominated by independent mom-and-pop stores to being dominated by national brands. Barton’s concept was to provide customers with outstanding
quality and convenience at a low, affordable price. He predicted that this approach would change the industry, and he was right. Current CEO Rhoda Olsen began her career with Great Clips in 1984 on a part-time basis, charged with drawing up a training program. After three years, she joined her brother, Ray Barton, as the head of human resources for the company. Her ascension didn’t end there. In 1998, Olsen was named President of the company, and in 2011 she became the CEO, as Barton shifted his focus to the role of Chairman of the Board.
From vision to reality: Barton establishes a culture of growth At the first Great Clips convention (a system-wide gathering of franchisees, corporate staff and vendors) in 1988, Barton set an extravagant goal of reaching 3,000 salons by the year 2000. As the millennium dawned, Great Clips consisted
of about half of that number. But to Barton, whether or not the magic number was reached by a certain date didn’t matter. What did matter was that a vision was in place. Great Clips is now the world’s largest and fastest-growing salon brand. In 2011, Great Clips achieved its goal of 3,000 salons and in 2012 Great Clips celebrated its 30th birthday. Great Clips salons are currently in more than 140 markets across the United States and Canada, with nearly 1,200 franchisees who employ approximately 30,000 stylists in their salons—and the best part is that Great Clips isn’t slowing down. Being the world’s largest and fastest growing salon brand isn’t enough for Great Clips. The company now is aiming to be the first billion-dollar salon brand in total sales.
Adding convenience through technology The Great Clips story isn’t only about numbers—it’s also about focusing on the customer experience and delivering convenience. One of the most dramatic ways it does this is by being first to introduce cutting-edge technology to salons and customers. In 2011, Great Clips changed the industry by rolling out Online Check-In. Online Check-In allows customers to add their name to the wait list of a Great Clips salon—before they arrive—via the Internet. The Great Clips Online CheckIn app has now been downloaded more than one million times and is available in the Apple App Store and the Android Marketplace. Users not only can check in using Online Check-In, but they can also locate the salon nearest to them as well as see current wait times. In 2013, Great Clips again rocked the industry with the introduction of Clip Notes—technical notes used by stylists to enhance consultations and give customers the haircut they want every time they visit any Great Clips location. This means that customers can get the exact haircut they want at any location without having to remember the specifics of how they like their hair cut! This innovation shows
that Great Clips values consistency and customer loyalty, and why Great Clips is the leader in improving customer experience through technology. With tools like Online Check-In and Clip Notes, Great Clips continues to stand out in the industry- no competitor is offering such innovative solutions to its customers.
Establishing an international brand presence Great Clips has built an international marketing presence through numerous partnerships, television and radio commercials, charity efforts and more. Great Clips receives significant visibility from its NASCAR sponsorship that began in 2001. From building a dominant brand to maximizing local salon marketing efforts, Great Clips focuses on how both system marketing and local salon marketing campaigns can help franchisees grow their Great Clips businesses. In recent years, Great Clips has partnered with the DIY Network, the NFL, EA Sports, Jack Links and other major brands that appeal to their target market of 18-49 year old males and females. Recently, Great Clips introduced its new brand tagline, “It’s Gonna Be Great,” with commercials airing during the college football Bowl Championship Series (BCS). The BCS ads alone were in 15 national games, and viewed by 76 million people. These commercials and many
other partnerships have gone a long way in building the Great Clips brand among its target demographic. Great Clips is also very active in social media and digital marketing.
Providing support every step of the way With a support ratio of one dedicated support person for every 10 franchisees, Great Clips stands out in the franchising crowd. In an average franchise system, the support ratio is approximately one support person for every 30–40 franchisees. Because Great Clips does not have corporate salons, the company is successful when their franchisees are successful. Great Clips supports their franchisees throughout the entire business cycle. From the moment they sign their agreements, to the time they are ready to pass the business along to the next generation, Great Clips’ staff is ready to answer questions, provide insight and point them in the right direction. This focus on franchisees drives everyone in the corporate office—right down to telephone response times. With this kind of proactive support— 24/7—it’s no wonder Great Clips is number one. For more information: Web:
www.greatclips.com
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f ra nchise in focus
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GREAT CLIPS. ACHIEVE YOUR LEGACY. CHART YOUR COURSE WITH GREAT CLIPS! GREAT IS… Keeping your job while you start your business. GREAT IS… Minimizing your risk with a recession resistant industry. GREAT IS… Leading in salon technology— Check out our Online Check-In app with over 1 million downloads! GREAT IS… The largest & fastest growing haircare brand in the world!
greatclipsfranchise.com 800-947-1143
Franchising USA
Why Should I Buy a Franchise? Franchising USA
ex per t advice
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ex per t advice
Daniel Brunell, President, Dearborn West, LLC
It’s helpful to have a clear vision of why, before we try to deal with how or what. To get started we need to examine our individual reasons for being self employed in the first place, so that our appreciation of the stakes is crystal clear. Simply wanting our own business is not enough. We need to define the specific end result that we want to achieve by owning a business. This exercise makes it very clear to us why we should give the business our all. Very few people make a living pursuing their passion in life. For most of us, our career is a vehicle that allows us to gain access to the things in life that are truly important. Any business can have its frustrations, but they need to be taken in the right context. If you have a clear vision of what your business can help you achieve for yourself or your family, it minimizes the impact of the parts of the business you may not enjoy as much. After all, what element of business isn’t worth enduring in order to reach your goals? As long as what you do is legal, moral and ethical, there are no obstacles that aren’t worth overcoming in pursuit of your desired outcome. So we need to determine what our specific goals are and in order to do so, we should think back to what motivated us in the first place.
Your motivating factor might be a desire for more time with your family, better control of your destiny, more money or pursuing a specific passion. You should identify whatever the primary driver is for you and then spell out the accompanying goals that go along with it. Let’s assume you want to own your business so you can have control of your time and be a better father/mother/husband/wife. If you sketched out the specific objectives that went along with that it might look like this: • Be involved in my kids lives on a daily basis • Make sure my kids get the best possible education • Spend more time with my spouse • Interact more with my extended family and friends • Give back to my community • Continue to make a good living
“The real value in a franchise is that you get a fully formed, proven business model. An effective business model is the difference between success and failure in a business. ”
Franchising USA
• Pursue my own personal enrichment goals These are the types of things that will drive you every day. By keeping these goals in front of you and enjoying the benefits that come with attaining them, you will not only be able to suffer the slings and arrows inherent in business ownership; you will actually enjoy the opportunity to face them! Additionally, knowing what you want your life to look like will enable you to find a business opportunity that will support those objectives instead of making you compromise them. Once your goals for business ownership are clearly defined, you can start the process of identifying the right business to launch. Now I will admit, for some people a franchise is not the best choice. If you find it impossible to color within the lines, you may not be a good fit for a franchised business. For the real mavericks among us, there are Licensed Business Opportunities which can be tricky to evaluate, but there are some very good ones out there and they offer the readymade business model of a franchise, but few if any strings attached. However, most people are going to benefit from the structure of a franchise and will achieve
Dale Willerton
far greater success by being in partnership with an organization that specializes in a certain field of endeavor. In the course of my business, I am often asked “When I buy a franchise, what do I get for my money?” The short answer is “a business model.” A business model is a framework for creating economic value, in other words, it’s a system for making money. Many first time entrepreneurs think of the investment in a franchise as a purchase of physical property, when what a franchise represents is intellectual property. The capital equipment, inventory, furnishings, fixtures or the cost of building out the location is part of any business, be it franchised or not. The real value in a franchise is that you get a fully formed, proven business model. An effective business model is the difference between success and failure in a business. The old maxim that most businesses fail because they are undercapitalized is only half true. Most of these businesses wouldn’t have been considered undercapitalized if they would have had an adequate business plan. Every year thousands of well capitalized startups with brilliant ideas for a product or service fail.
This not for lack of money, it is because they eventually burn up all of their cash while trying to develop a system for delivering their product into the hands of a paying customer. All business models are initially perfected by trial and error – this is a very costly process that most small businesses cannot afford to live through. That is why so many private startups fail where franchised concepts succeed. The franchisor has already footed the costs associated with perfecting their business model, so the franchisee can skip right over that phase of developing their business. The expenses associated with perfecting a business model will almost always eclipse the cost of paying a franchise fee. The average franchise fee is about 30k. Most starts up waste more than that in advertising costs alone while they experiment with different marketing strategies. The advantages of having the learning and cost curves reduced to a fraction of the “learn as you go” method, are very significant to say the least. Having a realistic expectation of what it will cost to launch your business is really the best way to be sure you will have enough funds on hand to get to your cash flow break even point.
The other cost component of a franchise is the royalty. This is a fee paid for ongoing support which of course includes continuous improvement of the business model, access to vendor discounts, product R&D, marketing and advertising programs, etc. Typical support royalties are between 5% and 8% of revenue. This fee usually pays for itself due to the savings realized when the franchisee purchases goods and services for the business at below market, national account rates. Additionally, most franchisees will experience much higher sales than they would as a private company – greatly in excess of 8% higher - because of the franchisor’s well designed marketing strategy. A franchise may not be right for everyone and they are certainly not all created equal, but a good business model can lower the risk factor and accelerate one’s potential for long term success. As always, the key is finding the right match between the model and the operator. Dan Brunell is President of Dearborn West, LLC, an international business opportunity brokerage headquartered in Southern California. For More Information: Phone: 951-587-6929 Email: dbrunell@dearbornwest.com Web: www.dearbornwest.com
Franchising USA
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ex per t advice
Dale Willerton, The Lease Coach
Leasing Commercial Space? 1 0 Q uestions for F ranchisee T enants to A sk the L andlord ’ s R eal E state A g ent Franchisees have plenty of homework to complete prior to opening up a new location.
you can better ensure a more equitable
An important element in the entire
tenants since 1993 and have compiled
process for franchise tenants is to prepare themselves for lease negotiations with
landlords. By asking plenty of educated
questions prior to signing a Formal Lease,
Franchising USA
lease deal which can help you to gain maximum dividends.
What are these questions? As The
Lease Coach, I have been consulting
with commercial, franchise and retail the following “10 Questions” that all
tenants should ask during the negotiating
process either for a new location or a lease renewal. Better yet, involve a professional
Lease Consultant – who knows what to ask and how to ask – to advocate for you. By asking, you will better protect yourself, your interests and your investment. 1) Who really is the landlord? Will you be dealing with a large institution; a bank or a small, independent “Mom and Pop” landlord? Depending on your opposition, you will be using a different negotiating approach. 2) Where is the landlord physically
“Is the person in charge of property management local and on-site? Similar to the preceding point regarding absentee landlords, ask if your property manager is readily available to deal with any concerns you may have.” located? A local landlord is often more accessible, thus making any dealings prior to and following signing the Formal Lease easier. When a landlord is not around, personal meetings become more difficult to schedule.. 3) Is the person in charge of property management local and on-site? Similar to the preceding point regarding absentee landlords, ask if your property manager is readily available to deal with any concerns you may have. Property managers may well look after multiple sites (not always in the same city or town) and cannot remain at one location on a full-time basis. 4) How long has the landlord owned the property? New landlords often have unrealistically high rental expectations whereas a landlord who has owned the building for a longer time or who built the property may have a smaller mortgage and require a less aggressive return or rental rate. 5) What is the building’s history? An older building may require further upkeep and maintenance, which tenants pay for in Common Area Maintenance (CAM) charges. If there has been a high turnover of tenants in the past, for any reason, this should raise a red flag for you. Also, has a similar-use tenant previously leased space within the property and either closed the business or moved elsewhere within the past ten years? 6) Who is doing the property leasing? Knowing who you are dealing with
will help you better prepare for negotiations. Is this a big leasing brokerage, a property manager or the son of the landlord? Real estate agents must follow a code of conduct; however, they often can only share what the landlord has told them. A less than reputable landlord doing his own leasing may tell you anything to get you to sign. 7) Who were the two most recent tenants to move in and when? Approach these tenants, identify yourself as a potential new neighbour and ask them how their lease negotiations went. If the leasing agent claims he/she has only recently acquired the listing and does not know, push for the details. 8) Who were the last two tenants to move out? When and why did they move out? Did they move across the street or did they close? As before, you will want to speak to these former tenants and ask for more details about their reasoning for leaving as well as their opinions of the landlord, property manager and the property itself. 9) Who is the property’s biggest tenant (the anchor tenant)? How secure is this anchor’s tenancy? The anchor tenant(s) typically attract the most traffic to a property so you will want to confirm they will be staying. Tenants in a strip mall located near my home were caught unaware when Safeway, the anchor tenant, moved out. Despite having a long-term lease, a grocery anchor can often move their store but continue to pay the rent, thus disallowing any competitor to move in.
Dale Willerton
10) Is the building for sale? Building owners looking to sell their building will have different motivations with prospective tenants. Also, consider that you may like the current landlord but dislike the new landlord. Posing questions (especially to a more experienced) landlord or property manager may be uncomfortable and, perhaps, even a little intimidating. Be confident with asking questions; these individuals are typically open to providing answers. And before you hang your proverbial shingle, it is always best to be informed as much as possible. And don’t you deserve to know this? For a free copy of my CD, Leasing Do’s & Don’ts for Franchise Tenants, please e-mail me to DaleWillerton@ TheLeaseCoach.com. Need a speaker for your next franchisee convention? Bring in The Lease Coach and help your franchisees. Dale Willerton is The Lease Coach, a Commercial Lease Consultant and author of “Negotiating Commercial Leases and Renewals FOR DUMMIES” appearing in bookstores spring 2013. Got a leasing question? Need help with your new lease or renewal? For more information: Phone: 1-800-738-9202 E-mai: DaleWillerton@ TheLeaseCoach.com Web: www.TheLeaseCoach.com
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