Franchising usa The magazine for franchisees
VOL 02, ISSUE 01, nov 2013
$5.95 www.franchisingusamagazine.com
with
Franchising
Flavor!
Women Veterans in Franchising Un d e r s ta n d i n g
Insurance
W h at K e e p s
Franchisors
u p at N i g h t ?
LATEST NEWS
FINANCIAL ADVICE FROM THE BANKS
TOP LAWYERS’ ADVICE
PARTNERS WANTED USA & CANADA
WE’VE TICKED THE BOXES
Global franchise Sales are proud to offer two proven Australian world first partnering opportunities.
Business model proven & profitable in Australia
One within the Social Media Technology space and the other providing a unique and proven point of difference to the Fill & Filter Water Fountain System. s Little or No Inventory s Training provided at all levels s Ongoing Updates, Support and Best Practice provided s Low overheads – High profit
Rapidly expanding in Asia Pacific Region Biggest growth industry in the World Residual income monthly Multiple income streams
NOW CAN YOU? Purchase partner rights to USA or Canada Prove that you can grow a national business Can be an active partner Invest between $750,000 and $1,500,000
POTENTIAL GROWTH FOR NORTH AMERICA IS ENORMOUS! If you tick all the boxes and wish to capitalize and control new markets in your part of the world,
CONTACT US NOW! info@globalfranchisesales.com
Page 3
Franchising usa The magazine for franchisees
FRANCHISING USA VOLUME 2, ISSUE 1 november 2013 publisher: Colin Bradbury. colin@cgbpublishing.com
EDITOR: Jessica Spoto. editor@cgbpublishing.com
SALES DIRECTOR: Vikki Bradbury. vikki@cgbpublishing.com
Business Development Manager: Jenn Dean. jenn@cgbpublishing.com
DESIGN: Jejak Graphics. jejak@bigpond.com
COVER IMAGE: papa murphy’s
CGB PUBLISHING 676 Wain Rd. Sidney, BC V8L 5M5 CANADA Sales: 250 590 7116 Editorial: 778 426 2446 www.franchisingusamagazine.com
Proud member of the IFA:
SUPPLIER FORUM International Franchise Association 1501 K Street, N.W., Suite 350 Washington, D.C. 20005 Phone: (202) 628-8000 Fax: (202) 628-0812 www.franchise.org
from the
Editor “Food is our common ground, a universal experience.” - James Beard In today’s society food plays a huge role in our lives, for both the obvious survival reasons, and as a social activity. Taking a look at the vast range of food franchises available in today’s market, it’s easy to see why so often we relate the word “franchise” with “food.” Between the countless pizza parlors and burger joints, fine dining restaurants and causal quick stops, if food is your passion and you’re looking to start a career in it, you’ve choose the right industry. From billion dollar brand names to upand-coming concepts, this November issue of Franchising USA features an entire Food Supplement, bringing to light some opportunities for you to explore. Offering an in-depth look at some of today’s major food players, as well as an inside scoop from foodie franchisees; here you will find their stories on how they came to be business owners of their delicious businesses. As Remembrance Day draws near, we would like to pay homage to the brave men and women who have fought to protect our freedoms. Let us remember not only our fallen heroes, but also appreciate our modern day veterans who are looking to begin anew with franchising, as it surely is a path they will
excel on. Our Veterans Supplement has also been extended to include it’s own news section, highlighting current affairs and accomplishments of today’s veterans. Furthermore, in this issue you will find the third and final installment of our Franchising 101 critique, advice on insurance policies, and a detailed look at the evolution of SEO in today’s digitally driven world. We also explore what is it that keeps franchisor’s up at night, franchising options in the moving industry, and the importance of wellness in the workplace. Another new addition to our publication, we have created an International News section to keep you informed of interesting developments and highlights from Britain, Australia and New Zealand. As you read through this month’s issue I invite you to keep an open mind and a clean palette cause you never know when you could discover your own recipe for success. Wishing you a warm and wonderful month, Jessica Spoto Editor, Franchising USA
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
25
november 2013
On the Cover
64 Women Veterans in Franchising
Mirza Tihic, Institute for Veterans and Military Families
10 Cover Story
Papa Murphy’s: Pleasing with Pizza
76 Understanding Insurance
In Every Issue 06 Franchising News Announcements from the Industry 25 Feature Article Foods Supplement, On the Cover: Bennigan’s 57 Veterans Supplement On the Cover: Baskin-Robbins
Bill Skene, Benetrends
50 What Keeps Franchisors
Up At Night?
Ned Levitt, Dickinson Wright, LLC
79
43
16 Franchising with Flavor! Baskin-Robbins
18
f ra nchising usa
Contents
Franchisor in Depth 84 Little Caesars
Franchise Focus 14 Soccer Shots
Franchise Profile 32 Wok Box
Franchisee in Action 46 East Coast Wings 76 COIT
38 Persona Pizza
Spotlight on Service 46 Tutor Doctor
Franchising USA
f ra nchising usa
Expert Advice
18 Payroll Problems; Not Worth It Michael Alter, SurePayroll
18
16 A Picture is Worth 10,000 Words: Going Visual with Franchise Support Dan Martin, IFX Online
20 What If I Buy a Franchise- But Can’t Find a Suitable Location to Lease? Jeff Grandfield and Dale Willerton, The Lease Coach 34 Keeping it Fresh: Creating New Pizza Recipes in Your Franchise Store Glen Cybulski, Persona Neapolitan Pizzeria 43 New Approach to Discovery Day is Dawning Dave Kelley, Kelley Murphy and Walsh
52 So Many Franchises! Where to Begin? Peter Casey, International Franchise Professionals Group 54 Everything You Need to Know About Insurance Bill Skene, Benetrends
54
50 What Keeps Franchisors Up At Night? Ned Levitt, Dickinson Wright LLP
79 SoLoMo Changes Everything Jon Carlston, Process Peak 81 Franchising 101: Terms, Traits and Tools, Part III Jason Power, Shelton & Power LLC
Have Your Say
76
88 The Art of a Franchise Agreement Sarah Kulbatski, JT Corporation
22 You Move Me 72 Unishippers Franchising USA
f ra nchising usa
what’s new! Rapid Realty Sweeps the Nation
Anthony Lolli, Founder and CEO of Rapid Realty—New York’s largest apartment rental brokerage, is a successful real estate investor and developer, with a portfolio of more than a dozen mixed-use and multifamily properties throughout Brooklyn.
In 2009, Rapid Realty became the nation’s first rental-based real estate franchise, and grew from one location to sixty in just three years. In 2012, Rapid Realty was named one of the fastest-growing companies in America by Inc. Magazine, and one of New York City’s Best Firms to Work For by The Real Deal. In 2013, they were awarded the Franchisee Satisfaction Award by the Franchise Business Review. Today, Rapid Realty is expanding to new cities across the nation.
agents to literally wear their dedication on
In Spring 2013, Rapid Realty grabbed the world’s attention after CBS News reported that over forty of Anthony’s agents had decided to get tattoos of the company logo. In the span of a few weeks, Anthony appeared in over 2,000 media outlets around the globe as everyone wanted a quote from the man who could inspire his
Anthony has worked with numerous
their sleeves.
Anthony is a frequent guest on Fox
Business, and his insights have been
featured in The New York Times, Forbes, Crain’s New York, and numerous real
estate publications. Anthony is a regular speaker at colleges, high schools, and
business forums, and reaches an audience of over one million readers through his blogs and other sites.
charities, and has been recognized for creating opportunities and promoting
business ownership among women and minorities.
For more information: Website: www.rapidnyc.com/franchise
Red Mango® Announces Newest Location in the Big Apple First-time franchisee Walid Qadir Arsal opens a new Red Mango location in New York City.
craze that is going on right now and I believe Red Mango is the perfect fit for me.”
for with the best customer service to help take Red Mango to the next level here.”
From life as an IT network engineer to engineering a whole new career, New York resident Walid Qadir Arsal is stretching his skills from a hot job in information technology to the even hotter frozen yogurt industry. And he gets to be the boss. Arsal will open his first Red Mango franchise location this December at 906 2nd Avenue in New York City, joining one of the fastest-growing frozen yogurt and smoothie chains in America.
Having been in past positions where people looked to him for leadership and guidance, Arsal’s IT career has given him some amazing experience when it comes to leading a team and making sure the job gets done. Now he plans to put that experience to use in his own business at Red Mango.
Website: www.redmangousa.com/ franchise/
“Red Mango products have an excellent taste that customers love,” Arsal says. “I want to be part of the booming Fro Yo
Franchising USA
“Red Mango has an outstanding support system, excellent products and very appealing store setups,” Arsal says. “Red Mango is doing pretty well in New York, and I look forward to providing the exceptional products the brand is known
For more information:
Bar Louie on Track for Record – Breaking Fourth Quarter Top Shelf Business Opportunity Will Be Showcased at the Restaurant Finance & Development Conference, Nov. 4-6 Bar Louie, a neighborhood bar and eatery, recently announced it is experiencing significant growth in the fourth quarter with seven projected grand openings. The brand started the quarter strong with four new restaurant openings in October in Ashburn, Va., Rochester, N.Y., Minnetonka, Minn., and South Arlington, Texas, and before year-end, plans for three more openings are slated for Gainesville, Va., Charlotte, N.C. and Arlington, Va. To further fuel this growth and expansion, executives from Bar Louie will be
discussing franchise opportunities with interested entrepreneurs at the Restaurant Finance & Development Conference in Las Vegas, Nev. on Nov. 4-6, booth #825. “Our growth and success this quarter is a true testament to our franchisee partners and unique bar/restaurant concept,” says John Neitzel, Chief Executive Officer of Bar Louie. “Having been around since 1990, we are thrilled at our momentum this year and look forward to expanding our brand’s presence across the country.” The company is currently experiencing solid growth with 40 projected new openings for 2013 and 2014. In addition, Bar Louie has plans for nearly 100 new corporate and 100 franchise locations across the U.S. within the next five years. Since 2011, Bar Louie has seen a 50 percent growth in corporate locations. This number is expected to climb to more than 70 percent by the end of 2013. For more information: Website: www.barlouieamerica.com/ Email: Franchise@BarLouieAmerica.com Phone: 816-305-7427
Massage Green and FX Signs Add Standardized Signage to Turn-Key Franchise In an effort to provide a more consistent and replicable product to its franchisees; Michigan based, Massage Green has chosen to forgo the “figure it out on your own” approach to signage. Rather than simply throwing creative at the franchisee, they’ve chosen instead to lock in all the options that a franchisee might need and then deliver those options through a single source. In a move usually taken by only mega franchisers, Massage Green has partnered with California based sign manufacturer, FX Signs Inc. to create a booklet that outlines both interior and exterior signage packages.
their franchisees. According to James Van Landingham of FX Signs Inc. in Riverside, CA, “ Being the primary resource for a franchiser allows us to manufacture a high quality product; that is consistent in both technique and materials while still locking-in wholesale rates for the franchisee.” For more information: Website: www.fxsignsinc.com/
Based on store frontage and square footage, the packages include: entry signs, reception signs, window decals and décor pieces. Moreover, franchisees are able to augment standard packages with items like window stickers, A-frames, flags and canvas wall hangings for their relaxation rooms. Having left nothing to chance, Massage Green’s exhaustive approach to a turn-key solution means more consistent branding, lower overall cost of entry and fewer headaches for
Franchising USA
f ra nchising usa
Page 7
f ra nchising usa
what’s new! Winestyles Tasting Station Announces Location Conversions
their business,” Bryan McGinness, CEO of WineStyles Tasting Station says. “Our dedicated franchisees recognize the strength of our growing brand and are passionate about what WineStyles Tasting Station stands for. In addition to reduced royalties, our conversion program offers an opportunity for business owners who are looking to transition into an established business with an existing customer base.” In fall 2012, WineStyles Tasting Station’s owners Bryan and Andrea McGinness purchased the WineStyles franchise of more than 30 locations and spearheaded the restructuring of its business model into WineStyles Tasting Station.
Largest Wine Boutique Franchise Continues National Rebranding Efforts
and reenergize the brand under the new franchisor ownership team.
WineStyles Tasting Station®, a newly rebranded boutique concept dedicated to simplifying the wine and craft beer shopping experience, recently announced it has converted 15 WineStyles locations across 10 states to its revamped business model. This latest milestone is part of the company’s national efforts to revitalize
Interested candidates who purchase an existing WineStyles boutique will receive reduced royalties for the first two years of operation under the agreement that the unit will be converted into a WineStyles Tasting Station. “We’re thrilled to work with our franchise partners as they begin the conversion of
To fuel WineStyles Tasting Station’s growth the company is seeking entrepreneurs with retail experience. WineStyles Tasting Stations will be developed through single-unit and area developer agreements. The total investment for one store is approximately $229,000 to $380,500. For more information: Website: www.winefranchise.com Phone: 866-424-WINE.
Total-Apps Rapid Growth Recognized in Inc. 5000 Total- Apps, the nation’s leading advanced payment processing solution, has been recognized as one of the fastest-growing companies in America by Inc. 5000. This distinction is reserved for businesses that make other companies better, and receiving it validates the Total-Apps promise to boost your business and drive sales for merchants and franchises through their advanced payment processing technologies.
Franchising USA
“Our inclusion in the Inc. 5000 is the ultimate testament to our work and business philosophy, which emphasizes effective results, rapid responsiveness, technical expertise and respect – the latter is a constant for everything we do – so our clients can flourish. I want, therefore, to thank Inc. for this honor and also express our gratitude to the brands we advise and counsel. This achievement symbolizes the privilege Total-Apps enjoys, by virtue of our collaboration with a remarkable group
of customers,” says Rey Pasinli, Executive Director of Total-Apps. Based on their specialized technology and personalized service, as well as its pioneering entry into new areas such as online rental payments, social commerce and online invoicing, Total-Apps is the only brand of this caliber – in this particular field – with membership in this invitation-only group of 5,000 businesses. For more information: Website: www.total-apps.com/
Maui Wowi Hawaiian Attends the West Coast Franchise Expo With over 30 years in business, Maui Wowi Hawaiian provides customers with quality, gourmet Hawaiian coffee and fresh fruit smoothies and is committed to offering a taste of the Aloha Spirit in every cup. While there are stand-alone stores and fixed retail locations, 35 in total, the majority of operating units are mobile event carts that have landed lucrative vendor spots at local events, major stadiums, concert venues and even military bases. This unique business model gives franchisees the flexibility to decide where they take their business and how frequently they operate. Maui Wowi Hawaiian is also a huge supporter of military veterans, offering a year-round discount on franchise fees as well as a “double down discount” starting in November in honor of Veteran’s Day. They have been named a Military Friendly Franchise by G.I. Jobs for the past four years and were among the 50 Top Franchises for Veterans by World Franchising Network. For more information: Website: www.mauiwowifranchise.com.
Remembering Fritzi Woods, An Inspiration for Many On September 18, 2013, Fritzi Woods, Women’s Foodservice Forum (WFF) President and CEO died unexpectedly after falling in her home in Dallas, TX. “All of us at the Women’s Foodservice Forum are heartbroken over the loss of our dear friend and leader Fritzi Woods,” said Laurie Burns, WFF Chair and Darden Restaurants SVP, Specialty Restaurant Group Strategic Platform & Development. “She was an inspirational leader and mentor and a powerful voice for growing the opportunities available to women in the foodservice industry. We will miss her immensely.” Woods was an influential regional and national businesswoman. For the past three years she led the Women’s Foodservice
Forum, the largest leadership development company in the foodservice industry. Woods and the WFF worked with the country’s largest foodservice organizations advocating for women’s leadership development. More recently she began working with the Obama administration to advocate for policies promoting genderbalanced executive teams. “I was deeply saddened to learn of Fritzi’s passing,” first lady Michelle Obama wrote in a letter to Woods’ family. “Fritzi will be remembered for her work to further the role of women in the food service industry.” Woods served as a board member for several organizations, including Jamba Juice, Ignite Restaurant Group, National Restaurant Association, BUCA and Lone Star New Market. For more information: Website: www.womensfoodserviceforum. com/
Franchising USA
f ra nchising usa
Page 9
cover stor y
Papa M ur phy ’s
P a p a Mu r p h y ’ s :
Pleasing with Pizz hand-chopped vegetable toppings, and a variety of meat selections; the focus on fresh never frozen is key in Papa Murphy’s booming success and national growth.
As the world’s leading take-n-bake pizza chain, Papa Murphy’s is sweeping the nation! Serving guests customized pizzas from scratch-made dough, freshly grated 100 percent whole-milk mozzarella cheese,
Franchising USA
Allowing customers to watch their pizza be created on order, take them home to bake in their own ovens, and enjoy them with their families is not just a hot trend in the pizza world these days, it’s a winning concept. Papa Murphy’s history dates back to the early 1980s, when its predecessor counterparts, Papa Aldo’s and Murphy’s Pizza, hit the streets of the Pacific Northwest. Recognizing the success of the two separate chains, entrepreneur Terry Collins acquired the two brands in the late 80s, and in 1995 merged the two chains to create Papa Murphy’s.
Combining the Papa Aldo’s 65 units with Murphy’s Pizza’s seven to create a strong brand under the Papa Murphy’s name, this attracted large consumer markets, resulting in the company being recognized as the “Best Pizza Chain in America” for seven years in a row. A player in one of the most crowded, aggressive franchising categories, what sets Papa Murphy’s apart from other pizza chains is the unique niche they have created. As a part of the carry out segment, the fastest growing segment in the pizza category, Papa Murphy’s takes it up a notch. “When consumers try our product, they don’t go back to the competition because they are serving their family a product that tastes better and is better because of the
za “With most of our growth still in front of us, franchisees are able to get involved with a high growth company that has premium development opportunities still available.”
quality of the ingredients we use,” Scott Mellon, Vice President of Franchise Sales says, adding, “It’s a game changer for us.” Consistently ranking 10 to 15 percent higher than their competitors, the overall consumer experience when visiting a Papa Murphy’s location is exceptional. “We put all our money into our food,” Ken Calwell, Papa Murphy’s CEO says. “We may be the underdog in size, but not in flavor and customer satisfaction.” Today Papa Murphy’s is owned by Lee Equity Partners who parent the 1370 locations grounded throughout 38 states, in Canada and Dubai. Built on 15 years of steady predictable growth, “Franchising growth has been a consistently strong story for us,” Mellon says.
Currently seeking franchisees with a desire to own and operate a simple and easy-to-execute concept, Papa Murphy’s is looking to fill markets throughout the U.S. and Canada. The average cost to open a Papa Murphy’s ranges between $209, 330 and $396, 710, a lower initial investment than most chains in the quick service industry. Site selection is also made easy with a low overhead, as there are no dine-in space, ovens, freezers or delivery vehicles required. Potential franchisees need to be financially sound, possessing a liquidity of $80,000 and a net worth of $275,000. Ideal candidates have a successful background in business as an owner/operator, or are multi-unit owners. “Papa Murphy’s gives franchisees the tools, products, and business model they need to be successful making the transition from employee in corporate America to small business owner,” Mellon says. Papa Murphy’s franchising process consists of eight steps: Qualification, Disclosure, Discovery, Franchise
Agreement, Training, Site Selection, Construction, and Opening. The mutual evaluation process, which is designed to include plenty of face-to-face time, takes approximately three to four months from the time a candidate shows interest to the time of signing the franchise agreement. Next the franchisee begins working to secure a site, complete training and start construction. The entire process on average is six to nine months. The franchise training program is designed as a comprehensive four-week process that covers everything from in-store hands on training at an existing location, to a classroom setting training where franchisees learn financial management, the business system and processes. Franchisees are given a business model that has proven successful for many years, and work with specialized members of the corporate team in each division. These individuals have a high level of expertise in their particular field to work with the local franchisee, supporting them in successfully opening
Franchising USA
cover stor y
Page 11
cover stor y
Papa M ur phy ’s
and operating their business. “It’s not just one person wearing a bunch of different hats, it’s an entire team of specialized individuals to help secure, open and operate their store,” Mellon explains. An ideal time to join the brand, Papa Murphy’s is the next fastest growing concept proven out over 1000 units. This year the company plans to open more than 100 new locations. “With most of our growth still in front of us, franchisees are able to get involved with a high growth company that has premium development opportunities still available,” Mellon explains, adding how the quick service restaurant category sees the most growth and action in the franchising industry. Within the quick service category there are five top sellers: burgers, pizza, chicken, sandwiches and burritos (Mexican food). “To be successful you must create a niche in one of these categories, which is what Papa Murphy’s did with take-n-bake,” he says. With plans to launch their new store design, CREATE, company wide in early 2014, the new look focuses on who the company is today and where they are headed. “Our current look is based on our
Franchising USA
“Franchising growth has been a consistently strong story for us.” history, where we’ve come from and the longevity of the business, CREATE has a cleaner, more modern look and feel to it,” Mellon says. Featuring a bright, fresh open layout to showcase the fresh toppings and building process, and a digital menu board to enhance the customer experience, the new look is about bringing the food to life. “For over 32 years we have strived to provide the best fresh pizza experience to busy families. Our new food-forward store highlights our high-quality ingredients with clean and simple design,” Kevin King, Papa Murphy’s Chief Development Officer says. “We’re fresh. We boast uncompromising quality, hand-prepared ingredients and want to share the CREATE experience. We are extremely passionate about providing a take-home dinner experience our guests can be proud of – just like we are proud of the new store design.” Papa Murphy’s has been rated the “#1
Food Chain” over all full-service and limited-service chains in the 2013 Consumer Restaurant Brand Metrics Ranking by Technomic. The company has also been recognized as Zagat’s “Number One Rated Pizza Chain” for the past three years, the “#1 Pizza Chain” in Nation’s Restaurant News 2013 Consumer Picks survey, as well as received other awards such as “Chain of the Year,” the “Franchisee Satisfaction Award,” and “Top Food and Top Service.” “It’s an exciting time for us as we continue to strengthen our footprint as the largest player in the take-‘n’-bake pizza category,” King says. “Our brand has found a sweet spot in this economy. We’re a high-value, quality-oriented solution for families who are evaluating their out-of-home dining purchases.” For more information: Website: www.papamurphys.com Facebook: www.facebook.com papamurphyspizza
Page 13
Franchising USA
focus
Soccer Shots
Shining a Light on
Soccer Shots Founded in 1998 by athletes Jeremy Sorzano and Jason Webb, Soccer Shots is a high-energy soccer program featuring principled instruction and loads of fun.
Launching the first businesses in their hometowns of Charlotte, NC and Harrisburg, PA, both found quick success in their passion to inspire children to live fit, healthy lives. The idea of providing kids ages two to eight with a creative curriculum that focuses on soccer skills as well as character development held appeal to many, and with a growing interest from parents and former teammates to become
“It feels as if someone turned the lights on in a dark room. I couldn’t be happier.”
involved, in 2005 Soccer Shots began franchising. The mission of Soccer Shots is to be the premier intro-to-soccer provider across the globe. Last year over 100,000 kids nationwide enrolled in Soccer Shots to learn the fundamentals of the sport. This year the company is looking to grow by 50,000 more. For Soccer Shots, the most important thing when considering a potential franchisee is finding someone who loves kids and has a passion for impacting them positively. Since the age of 13 Leslie Bennett, franchise owner of the Chattanooga, TN Soccer Shots, has been searching for a purpose driven career in which her passion for sports and children could be fulfilled. “Soccer Shots has given me the opportunity to be in an environment where it’s okay to lavish love and acceptance to all those I encounter,” she says.
Finding Her Way: Leslie Bennett Born and raised on the Mississippi Gulf Coast, from an early age Bennett developed a passion for softball, being outdoors, and living an active lifestyle. A devoted Christian, religion was always a strong part of her upbringing and the path she has followed centers around her instilled beliefs. Immediately after graduating from Mississippi College with a Bachelor’s degree in Religious Studies, Bennett moved to New Orleans. Here she furthered her studies to complete a Masters degree in Christian education, with an emphasis on helping build communities and introduce people to Christ through recreation. Upon completing the course,
Franchising USA
she accepted a job as a youth minister in Diamondhead, MS. In 2005 Bennett’s life changed when Hurricane Katrina wiped out her home and all her possessions. Left in devastation, Bennett set out to find a new home and job, which brought her to Tennessee. A few short years later Bennett received a position as Athletic Director of a local Christian school. Growing the athletic department for the kids, Bennett loved the job. “It was a fun whirlwind, growing and investing my talents into the lives of the teenagers,” she says. After five and a half years with the school Bennett began to see her vision for the school, as well as her personal life goals, swaying from her current position. During this same time Bennett’s friend, Zach White, began sharing with her his positive experiences since buying the Birmingham, AL Soccer Shots franchise. Looking into the business, Bennett was pleased with the affordability and design of Soccer Shots and wasted no time resigning from her current position to buy the Chattanooga franchise. Launching this past June, Bennett says she hasn’t looked back. “It feels as if someone turned the lights on in a dark room. I couldn’t be happier.” The steps Bennett took to own her franchise involved an extensive interview and application process, which helped both sides to decide if the pair was a good match personally and demographically. Next Bennett attended several days of in-
“Everything that’s good about life is what Soccer Shots is for me.” depth training, which provided her with all the necessary tools to build her business. After training Bennett worked alongside Tim O’Neil, a business consultant from the Soccer Shots home office, who spent two days reviewing her territory and visiting preschools in the area. This gave Bennett the confidence and on-the-job training she needed to continue building the foundation for a strong business network on her own. Provided with ongoing support from the corporate team, Bennett says a Soccer Shots Facebook group is also in place to help. “Anytime I find myself in a dilemma or have a question to ask I can post it in the group and within the first few hours I’ll receive responses from other franchise owners offering solutions,” she says. Along with the freedom of being her own boss, Bennett enjoys seeing first hand how her efforts directly affect herself and the people around her. “Owning my own franchise has been eye opening, exciting and fulfilling,” she says, “I love my job and can’t wait for each next day because it just seems to get better and better.” The highlight of Soccer Shots for Bennett is having a career working with kids in the realm of sports and recreation. Being able to express to children that life is good, encouraging them to be outside, to play sports, and to laugh, while also instilling good character traits such as caring for others is exactly what Bennett believes she
was meant to do. “Everything that’s good about life is what Soccer Shots is for me,” she explains. Unlike her previous job where despite how many hours, or how hard she worked there was always a limit for success, today Bennett has no limits and is supported by professionals who are willing to help when needed, creating a healthy medium for their franchise owners to thrive. “This is a dream come true because there is no glass ceiling or red tape that hems me in or holds me to some standard,” she explains. “I have the freedom to do with it what I can dream of it, and each week is a new week I get to dream big and see what I can make happen.” Currently working alongside five employees, Bennett has 300 kids enrolled this season. Bennett encourages all those interested in Soccer Shots to call the home office. “As long as you’re passionate about kids, sports and working hard for yourself, they make the rest easy,” she says. “When I go out to the fields and see the children participating in Soccer Shots, the smiles and the laughter that we bring to their faces, and in turn their parents’ faces, it’s priceless. Soccer Shots brings a lot of joy and happiness to peoples lives, and I’m so proud to be a part of it.” For more information: www.soccershotsfranchising.com
Franchising USA
focus
Page 15
ex per t advice
Dan Martin, President & CEO of IFX Online
A Picture is Worth 10,0 0 0 Words:
Going Visual with Franchisee Support and they tend to put a franchisee’s mind at ease by taking a more personal, visual support approach to the dissemination of information. The impact of technology has clearly increased the impact of support at the franchisee level. Visual support in the form of images, videos, and live video conferencing has considerably greater impact on franchisees in terms of getting the point across and involving franchisees in the process. It’s often a proactive and two-way medium that generates greater participation from franchisees and longer retention.
Franchisees, often times, don’t know what they don’t know. After all, most franchisees have never been franchisees before, and many have never owned their own business before. Moreover, when they’re already slammed just trying to figure out the business, they’re generally not in-the-mood to read through pages and pages of manuals
Franchising USA
forced on them by a franchisor who tends to believe in quantify vs. quality. In today’s proactive franchisee support world, the premise of “a picture is worth a thousand words” has dramatically increased to “ten thousand words” simply due to franchisors “going visual”. It’s all about the impact of technology on franchisee support. Visual teleseminars, webinars, video conferencing, live exchange of franchisee-to-franchisee resources and virtual support sessions have evolved dramatically over the past five years. The common denominator: they all have greater impact and retention,
Today’s generation of new franchise owners are visual. They’ve been raised on TV and video games, iPads, DVRs and smart phones. They’re communicating instantly with text messaging, various social media platforms and live audio/ video communication. Franchisors are recognizing that their training programs, resource information and support services should utilize the same technology when it comes to communicating with franchisees. Virtually every support relationship involving franchisees can achieve greater impact and retention using today’s visual technologies: • Franchisor-Franchisee Communication and Support • Franchisee-Franchisee Communication and Support
“The premise of “a picture is worth a thousand words” has dramatically increased to “ten thousand words” simply due to franchisors “going visual.” • Franchisee-Supplier Communication and Support • Franchisee-Prospective Franchisee Communication, Disclosure and Due Diligence Franchisees, who often don’t know what they don’t know, need to know what they don’t know… now! All of the above forms of communications and support are designed to accommodate immediate and spontaneous sharing of information. Franchisors who have recognized that it’s not the amount of information directed towards their franchisees (quantity), but rather the proactive value of the information (quality) as it relates to addressing real-world support with franchisees. 1. Visual Benchmarking: It’s always a plus for franchisees to know where they stand in regards to staying on track to achieve their financial objectives. Benchmarking reports in the form of visual pie charts, line charts, and bar charts have significantly greater impact and a higher retention rate than columnar spreadsheets. 2. Peer Group Video Conferencing: Peer Groups and Focus Groups are often viewed as communities within communities. Franchisors can capitalize on a more personal and more effective visual approach by setting up video conferencing services between group members. Especially with Peer Groups, this medium is more personalized, tends to build greater trust and ultimately provides for workable solutions faster. 3. Visual Training Sessions: When it comes to franchisee buy-in with regard to taking training courses, going visual can not only increase the number of people taking courses, it can increase course scores. Again, going visual
increases impact, retention and attention span. Greater attention equals better course results. Video-based sessions, animated slide presentations and even audio learning sessions have replaced old time training manuals while reducing costs. 4. Webinars: Email and newsletter updates have given way to group webinars that capitalize on group participation in a live, visual environment. Monthly group strategy sessions with key franchisor management and all franchisees are the norm for maximizing everyone’s time and generating solutions from both sides. 5. Regularly Scheduled Video Support Calls: Franchisors generally don’t wait for franchisees to call with questions these days. Rather, proactive franchisors schedule regular, one-on-one video support calls every two weeks at the same reoccurring time. There is no need to take a reactive approach. Further, going visual helps to assure the franchisee that, indeed, the franchisor is actually there and striving to directly assist the franchisee with proactive ideas to help them grow their business. 6. Get Acquainted Video Interviews with Prospective Franchisees: Why wait for Discovery Day to personally meet with candidates interested in investing in your franchise opportunity? You can get to know candidates and they can get to you know you much better and in a more caring and personalized way by conducting a series of face-toface video interviews. It’s all part of the due diligence process and works well to relate the same personal approach you’ll be taking when the candidate qualifies to become a franchisee. When it comes to going visual, it’s not the technology as much as the way the
Dan Martin
technology is applied. Visual images are generally simpler to understand. Video technology can be simple, interactive and engaging. From a practical point-ofview, going visual is a real no brainer for franchise organizations, however, from a political point-of-view, going visual promotes a proactive sharing of ideas on a personal and tangible level and therefore a sense of community is achieved faster and with better results. And community is ultimately what franchising is all about. Dan Martin, CFE is President and CEO of IFX Online, a Strategic Franchise Management Firm servicing 200+ franchise brands and 30,000+ franchisees since 1996. IFX’s Strategic Division and IFX’s Technology Division work hand-in-hand to assist franchise organizations in implementing key growth management strategies and applications designed to maximize operations and boost ROI. Mr. Martin has 30 years of experience in franchising, serving in the roles of franchisee, Area Developer and Advisor. He has served on the International Franchise Association’s Board of Directors, Executive Committee, Membership Committee and Technology Committee. Mr. Martin was Chairman of the IFA’s Supplier Forum Advisory Board and is a Certified Franchise Executive. For more information: Website: www.ifxonline.com Email: dan@ifxonline.com Phone: 858-724-1024.
Franchising USA
ex per t advice
Page 17
ex per t advice
Michael Alter, President and CEO, SurePayroll
Payroll Problems; Not “Even if you own only one franchise location, you don’t want to roll the dice on payroll. Payroll tax mistakes could leave you with heavy fines and the IRS knocking at your door.”
Franchising USA
t Worth It Michael Alter
We’ve recently seen in the news how franchises can run into trouble when it comes to payroll. Administering payroll correctly is important not only for the obvious, paying your employees accurately and on time, but for the franchise’s reputation as well. However, it’s often the case that payroll and payroll taxes are more complicated than they seem. With franchises, it gets even trickier, because you could be managing a number of employees in multiple franchise locations. Handling payroll yourself then quickly becomes confusing and time consuming, because you’re having to deal with multiple accounts, multiple payments, and excess IRS paperwork for each different location. The challenge for many franchise owners is finding a way to handle it all from one place, with a method that doesn’t take hours of your time. An online payroll service is the obvious answer. A reputable provider should give you reliable service that’s easy to use and contains everything you need online. It
will come with a modest upfront price, but what it will save you in time and hassles is invaluable.
What’s the Worst that Could Happen? Simply spending a lot of time and effort figuring out payroll – which is not part of your core business – is actually not the biggest pitfall of doing payroll on your own. The big problems you could run into are the following: 1. Your employees don’t get paid correctly. As you can imagine, this is devastating to morale. It could create a loss of confidence in management and even loss of staff.
requires nothing more than entering a few numbers for pay and hours, and the rest is done for you.
This includes, but is not limited to: • Federal, state and local payroll taxes done for you.
• Multiple franchise locations managed
from one online portal in one account.
• Direct deposit. • Access to paystub information for you and your employees.
• W-2s prepared for you. • Payroll reports at the ready with a few clicks should you need them.
2. Errors in tax filing and payments. This is where a lack of payroll knowledge could seriously cost you. Particularly with franchise businesses, you could be responsible for filing with multiple agencies and held accountable for the various local tax requirements in your different locations.
• Customer service that is capable of
Don’t Leave Payroll to Chance
when every day you’re facing the challenge
Even if you own only one franchise location, you don’t want to roll the dice on payroll. Payroll tax mistakes could leave you with heavy fines and the IRS knocking at your door. You want payroll professionals that can support your questions and solve any problems you might have. With an online payroll service, your expectation should be that running payroll twice a month (or however often you pay your employees)
answering questions about payroll, not just the software you are using.
Running your own franchise, or multiple franchise locations, is difficult enough on its own. The added headaches and potentially costs of payroll problems
simply is not worth your time, especially
of moving the business forward, satisfying your clients or customers, and finding new ways to profit.
Michael Alter is the President and CEO of SurePayroll, a wholly owned subsidiary of Paychex. For more information: Website: www.surepayroll.com Google+: +Michael Alter Twitter: @MichaelAlter
Franchising USA
ex per t advice
Page 19
ex per t advice
Jeff Grandfield and Dale Willerton, The Lease Coach
W h at If You Bu y a Franchise – B u t Ca n ’t Fi nd A S u i ta b l e Lo cati o n to L e a s e ? When speaking at the Annual American Franchise & Business Opportunity Show in Los Angeles recently, Dale was pleased to address both prospective franchisees looking for a franchise opportunity as well as new franchisees that have already purchased a franchise and were now hot on the site selection trail. During his session, Dale shared a great deal of information and answered many questions. One of those questions was relating to a specific problem which we frequently hear about… the new franchisee needs to lease space for their franchise but cannot find a suitable location.
Franchising USA
Whether the franchisee is left to do site selection independently or whether the franchisor is helping, we will share with you some case studies and unhappy endings we have learned about. Mary’s Case Study - Mary buys a well-known QSR franchise with over 1,000 units and earnestly begins the site selection process. Every location she submits to the franchisor is rejected, not because the locations for lease are not suitable, but because that strip plaza location was already verbally committed to one of the franchisor’s existing franchisees for store number two, three, or four. No one told Mary when she purchased the franchise that the best plaza locations for lease were already spoken for and committed to existing franchisee growth. After a year without finding a suitable location, Mary gives up and walks away from her prepaid franchisee fee. Jim’s Case Study - Jim buys into a relatively new franchise concept (less than two years old and with less than 20 locations). Every location Jim finds in his territory for lease is too expensive based on the franchisor’s pro forma rental
recommendations. Jim is very frustrated because there is plenty of space for lease, but he cannot afford it. Jim, under legal pressure from his franchisor to open a store within the 120-day timeframe called for in the franchise agreement, goes with a gut feeling that business will be good and that he will be able to pay a higher rent. Jim signs a commercial lease, opens but closes within one year – not from lack of sales but mostly from excessive rent overhead. Connie’s Case Study - Connie purchases a franchise territory. The franchisor and various real estate agents work on finding Connie a suitable location. While some excellent locations are available for lease, they are all too large or too small. The franchisor recommends about 2,200 sq ft but, with no other options, Connie gives in to pressure (against her intuition) and signs a lease on a 3,045 sq ft strip plaza location. Business is okay but all of Connie’s potential profits are feeding the landlord for the extra rent on the larger, unneeded space. After not making a profit for three years, Connie tries to sell the franchise. No one will buy it because the overhead in
Jeff Grandfield
Dale Willerton
“A good franchise system in a poor location will not achieve its full potential. A poor location can be defined as such because it is too big, too small or has the wrong physical shape.” rent, staff and original build out costs etc. were too high. Connie closes.
be too expensive or not include sufficient parking for your staff and customers,
Robert’s Case Study – Robert wants to spend as little on rent as possible when he sets up his new franchise - and doesn’t understand that location is often king for popular retail franchises. Robert is pretty much left on his own to lease whatever location he so desires with no participation or interference from the franchisor. The franchisor doesn’t visit the location but simply rubber stamps its approval on the proposed site. Robert chooses a site off the beaten track so rent is not a problem. However, five months after Robert opens, the franchisor’s biggest national competitor leases a prime location with great visibility on the main street (two blocks from Robert’s less visible location around the corner). Seventeen months later Robert closes his franchise business because of lack of sales.
It almost never occurs to the prospective franchisee that he/she may not find a suitable location to lease. Otherwise, potential franchisees would only purchase a franchise with a specific condition allowing them to dissolve the franchisee agreement and get their deposit back if a suitable location for lease cannot be found within a specific period of time. If you plan for the unexpected you will not be left owning a franchise with nowhere to pitch your tent.
A good franchise system in a poor location will not achieve its full potential. A poor location can be defined as such because it is too big, too small or has the wrong physical shape. Additionally, it could be the right property but the wrong location,
your new lease or renewal? Inquire about having The Lease Coach speak at your next franchise conference. For more information: Website: www.TheLeaseCoach.com Email: DaleWillerton@TheLeaseCoach. com Phone: 1 800 738-9202
For our free CD, Leasing Do’s & Don’ts for Franchise Tenants, please e-mail DaleWillerton@TheLeaseCoach. com. Speaking and training enquiries welcomed. Dale Willerton and Jeff Grandfield The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Dale and Jeff are professional speakers and co-authors of Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013). Got a leasing question? Need help with
Franchising USA
ex per t advice
Page 21
have your say
Tania Venn, Director of Public Relations, You Move Me
You Move Me is Out to Move People, Not Just Their Boxes The vision of a worldclass, customer-focused moving brand came to entrepreneur Brian Scudamore during his own experience with moving. The movers he hired were unprofessional, broke things, and failed to demonstrate the
Franchising USA
standard of care one should expect from a moving company. In today’s competitive landscape a moving company cannot afford to be anything but exceptional. This notion gave Brian the inspiration to launch his third service-based company, You Move Me. The challenge Brian faced was how to develop and launch a new brand in a tired, aging industry and at a time when the economy was still struggling to recover from the worst recession in more than
20 years. Brian had two aces up his sleeve that he was certain would result in a win for the new brand. The first was his talent for transitioning unappealing, flagging businesses into unique, even sexy, customer-centric brands. Brian is widely known as the pioneer of professional junk removal after he founded 1-800-GOTJUNK? and became the first to organize a dishevelled North American junk removal industry. In 2010, Brian was so impressed by an innovative local company that promised to paint his house in just one
“There are four quality promises at the core of You Move Me’s customer service: on-time service; clean, shiny trucks; friendly, uniformed movers; and up-front rates.” day that he bought the company and began franchising WOW 1 DAY Painting. The second ace up his sleeve was the older sibling of You Move Me, 1-800-GOTJUNK?. With close to 200 franchises across three countries and recognition in the media as a top performing franchise with a high franchisee satisfaction rate, there was no shortage of proven, scalable systems for the younger brand to leverage. According to the U.S. Census Bureau, about 14 percent of Americans move every year. Whether they are moving locally, across the country, or even off the continent, that’s 47 million people at any given time on the move. They’re all looking for a dependable, professional, affordable moving service, and there are many companies vying to be the first in line. Stepping into this industry as a newcomer requires a stellar service offering and a fail-proof plan (which turned out to involve a precedent-setting move in the franchise world – but more on that later). Brian spent the better part of a year working closely with a group of executive leaders and franchise owners on the You Move Me brand philosophy, customer focus, and competitive advantages. As many great entrepreneurial companies have demonstrated, a guiding mission statement is a powerful tool for alignment and vision. For You Move Me, the mission statement came from a dedication to customer need. A simple Google search will tell you that when it comes to moving, the customer’s need is to mitigate stress. Moving is seldom easy. We are dealing with a range of circumstances, from moving as a result of a break-up to downsizing from the family home where we raised our children. Even in the most positive of circumstances, moving is stressful. There’s the worry about breakage
of valuables, how our furniture will fit into our new home, how to get the move done before the kids come home from school, and maybe even what to do with the pet bird during the process. Stress is the common denominator with moves and You Move Me was built to tackle it. You Move Me’s mission statement is “We move you, not just your boxes.” It’s a short statement, with a promise to take care of your stress and emotional well-being, leaving you moved - both physically and emotionally—by the service. The customer experience starts with a personal
welcome call from the You Move Me team to confirm the details of the move. On the morning of the big day that same team contacts the customer for their coffee order, because keeping the coffee maker out would just get in the way (and besides, who has time?). As a token of the company’s thanks, and to brighten the customer’s new home, they leave behind a beautiful housewarming plant. The kids can be occupied with one of You Move Me’s cool wardrobe boxes, which double as a children’s space-themed play fort. There are four quality promises at the core
Franchising USA
have your say
Page 23
have your say
Tania Venn, Director of Public Relations, You Move Me
of You Move Me’s customer service: ontime service; clean, shiny trucks; friendly, uniformed movers; and up-front rates. You Move Me specializes in local moves and offers customers a full service, including packing, moving, and all the supplies required. Developing a fresh new alternative that suited North American movers was one half of Brian Scudamore’s strategy. Part two was launching a brand destined for success. The Wall Street Journal’s MarketWatch recently posted a story about failed franchises and found through the research firm, Frandata, that between two and ten percent of franchises close every year for various reasons. There was no question Brian and his team would leverage the franchise infrastructure and systems at 1-800-GOT-JUNK? and WOW 1 DAY Painting. To ensure You Move Me had the best chance of success, Brian came up with a unique strategy to seed the growth of the new company: he offered the first moving franchises to the top performers from his well-established brand, 1-800-GOT-JUNK?.
Franchising USA
“According to the U.S. Census Bureau, about 14 percent of Americans move every year. Whether they are moving locally, across the country, or even off the continent, that’s 47 million people at any given time on the move.” “We knew we couldn’t fail with the combination of this fun company that is dedicated to the needs of the customer, in the hands of our very best 1-800-GOTJUNK? franchise partners. And so we offered them the exclusive opportunity to become the first franchise owners,” Brian Scudamore explains.
critical to the success of any brand. You
In April 2013, You Move Me had an unprecedented launch with 25 franchises opening in major metros throughout the U.S. and Canada, effectively bringing the new service to 40 million people overnight. The company took the franchise opportunity to the public in October and expects to have 30 franchises in operation, and revenues of $5.7M, by the end of the year. The goal for 2014 is 50 franchise partners and revenues of $14M.
are taking that same approach with You
In today’s world competitive distinction is
Move Me demonstrates how leveraging
the success of one company can give sister companies a head start toward growth.
“At 1-800-GOT-JUNK? we like to say that we make the ordinary business of junk
removal exceptional. That customer focus
has yielded amazing results for us, and we Move Me,” Brian Scudamore says. Tania Venn is Director of Public Relations for You Move Me, 1-800-GOTJUNK?, and WOW 1 DAY Painting. With a house on the market currently, Tania is looking forward to being moved soon herself. For more information: Web: www.youmoveme.com/us. Email: Jason.isley@youmoveme.com
FOOD FRANCHISES Page 25
November 2013
part I
Bennigan’s:
Revolutionizing Casual Dining Franchising
Fantasyland Keeping it Fresh:
Recipes in Franchising
Franchising USA
FOOD FR A NCHISES
what’s new!
Burger King Profits In Q3 Burger King Worldwide’s (BKW) cost controls and international sales led to higher-than-expected profit in the third quarter. The No. 3 burger chain by revenue said earnings rose 35 percent
to 23 cents per share, beating by two cents. Sales fell 40 percent to
DUNKIN’ DONUTS Earns Extra Credit with University Expansion College Campuses Continue to Run on Dunkin’. Dunkin’ Donuts, America’s everyday stop for coffee and baked goods, is majoring in college expansion as the brand continues growing its presence on campuses around the country. Dunkin’ Donuts offers restaurant models to suit any university, including full retail shops and kiosks that are perfect for campus centers, student unions, dining commons and other high-traffic locations at or near the school. “Universities are increasingly looking for more amenities to offer campus residents and visitors, and our brand’s flexible design options couple convenience with great-tasting food and America’s favorite coffee,” said Grant Benson, CFE, Vice President of Franchising and Business Development, Dunkin’ Brands. “As we continue our expansion, both east and west of the Mississippi, we have a continued focus on recruiting qualified operators to grow our presence at colleges around the country.” The list of universities that have recently opened new Dunkin’ Donuts restaurants or plan to open new locations by January 2014 includes: Westfield University, Norwich University, Merrimack College, University of Rhode Island, University of Alabama Huntsville, Brandeis University, and Wayne State University. Dunkin’ Donuts has been strategically expanding in contiguous markets with a long-term goal of having more than 15,000 Dunkin’ Donuts restaurants in the United States. Dunkin’ Donuts currently has nearly 600 non-traditional locations, including college campuses, mass transit stations, travel centers, supermarkets, and military bases. For more information: Website: www.DunkinDonuts.com Facebook: www.facebook.com/DunkinDonuts Twitter: www.twitter.com/DunkinDonuts
Franchising USA
$275.1 million, but topped estimates of $266.6 million.
The lower revenue was mainly the result of refranchising 519 of
its company-owned restaurants during the quarter. Excluding the impact of refranchising, revenue grew 8.1 percent.
Sales at restaurants open at least a year increased one percent
overseas in the quarter, partially offset by a 0.3 percent dip in comparable store sales in the U.S. and Canada.
Chief Executive Daniel Schwartz said new products are gaining
traction with customers, including its lower-fat Satisfries launched in the U.S. and Canada. “We believe that new products like this,
combined with our focus on improving operations, will enhance
the guest experience and drive increased restaurant profitability,” he says.
McDonald’s (MCD) and Wendy’s (WEN) rose, but Sonic (SONC) and Red Robin Gourmet Burger (RRGB) were down.
Schwartz took the helm at Burger King in July after ketchup
maker H.J. Heinz poached former Burger King CEO Bernardo Hees to lead that company.
McDonald’s on Friday said it plans to end its 40-year relationship with Heinz because the former CEO of rival, Burger King, now heads it.
For more information: Website: www.bk.com/en/us/company-info/franchise/index.html
Smoothie King Reports Same-Store Sales Increase of 10.3 Percent in Third Quarter Freddy’s Opens Its 100th Store; Two Hours Later, Its 101st Store Opens Leading Smoothie Concept’s Popular Pure Recharge™ Energy Smoothie Helps Drive Sales Smoothie King Franchises, Inc., the premier smoothie and nutritional lifestyle center, recently reported a same-store sales increase of 10.3 percent for the third quarter, up nearly five percent for the year over 2012. Sales were driven primarily by the brand’s new Pure Recharge™ energy smoothie, which Smoothie King introduced in its more than 650 stores worldwide in July. Additionally, during the first two weeks of October, same-store sales were up 17 percent. Under Global CEO Wan Kim, Smoothie King is experiencing energized growth with the opening of 34 stores through the third quarter of 2013 and the signing of 75 new franchise agreements. Smoothie King is on track to open an additional 25 locations by the end of the year. “Smoothie King is now celebrating being in its fourth consecutive year of positive same-store sales, a testament to not only our variety of high-quality smoothies, vitamins, supplements and healthy snacks, but also the commitment of our franchisees to helping our guests live an active and healthier lifestyle,” Kim said. Smoothie King plans to add 1,000 new franchised and corporate locations domestically over the next five years to complement its existing base of more than 650 locations. Smoothie King also continues to expand internationally through both master franchise and corporate stores in South Korea, Singapore and the Cayman Islands, and is focusing on identifying partners in several key countries in Asia and the Middle East. For more information: Website: www.smoothiekingfranchise.com Phone: (985) 635- 6973, ext. 115.
Freddy’s Frozen Custard & Steakburgers recently announced its 100th store opened in Bowling Green, KY, and only two hours later, its 101st store opened in Westlake Village, CA. At 88 years old, company namesake and WWII veteran Freddy Simon will attend the grand opening in Bowling Green, KY. “Our story leading up to the opening of our 100th store is a combination of exemplary employees and a varied mix of visionary entrepreneurs first experiencing the concept as guests and then risking time and capital to open their own franchise stores,” Bill Simon, CEO says. “The people who make up the brand have grown remarkably to resemble a family more and more with each milestone as our numbers continue to increase. The Freddy’s family will soon have grown to 5,000 people, with an average store employing 43 individuals.” “We opened the doors at our first location in 2002 with three strong and simple objectives: serve the highest quality steakburgers and fresh frozen custard, operate the cleanest restaurant, and work with the most hospitable team,” Scott Redler, COO adds. “Our greatest success lies in the 100th store’s capacity to reflect the values of our very first store at the corner of 21st & Tyler in Wichita, Kansas.” Freddy’s expansion across the U.S. is continuing to gain momentum. Development agreements for more than 400 sites have been signed extending the company’s growth into many new states not yet served. For more information: Website: www.freddysusa.com/Franchise/Availability/default.aspx
Franchising USA
FOOD FR A NCHISES
Page 27
FOOD Fr a nch ises
Food for Thought: Welcome to The Food Supplement, Part 1 Often times when someone hears the word “franchise” the first thing that comes to mind is food, and reasonably so! With thousands upon thousands of food franchises in many different shapes and sizes, the options are endless. From fast food monsters to fine dining gems, the diversity in food franchises is just as diverse as the food itself. Seeing as food is a major part of every culture, it’s simple to see why there is such a variety in the various types of food franchises available today. So if food is your passion and you’re looking to start a career in it, you’ve chosen the right industry. Food franchises became popular in the mid-1900s with the dawn of the baby boomers, which was around the same time
Franchising USA
that people began moving to the suburbs. Lacking restaurants in these remote areas, fast food chains began moving outside of the cities to develop in the newly populated areas- and thus, food franchises came to be. While it may seem like an easy win to invest in a food franchise considering society’s universal love for food and the vast number of restaurants available, it’s important to consider what type of food franchise is first, of interest to yourself, and second, going to thrive in your area. Just because you think it’d be great to have an all-you-can-eat Asian restaurant in the middle of Little Italy, or a Vegan Bistro in rural Texas, doesn’t mean the market is right. Nonetheless, if you find a niche and the right location there are some wonderful advantages to owning a food franchise, the first being that your customers come to you. Also, since food franchises have been around for over 60 years, many times multi-unit companies will have a track record available detailing their highs and lows. Through due diligence it should be easy to see if your concept is a winning
“The ideal situation, and perhaps recipe for success, is to choose a category that not only suites your needs and your markets needs, but also serves a unique niche.” one, or if your dream job is likely going to follow suite of the seventeen predecessors that have been there, done that… and it didn’t work. Another highlight of buying a food franchise is that often times the process will run like a well-oiled machine. In many cases franchisors invite new franchisees to train in an existing location, providing them with a step-by-step hands on experience. Here they will also learn the equipment and business operations, all the while able to ask their questions as they arise. While it’s also important to consider the initial investment, overhead costs, zoning codes, labor laws, and cost of goods; one of the best things about food franchises is that if plan A. doesn’t fit your budget there are infinite other options available to you, so surely you’ll find something to call your own. The costs of owning a food franchise will vary widely depending on the restaurant, its location and the physical materials needed. A big brand could set you back millions of dollars, while a newer or smaller chain could cost substantially less, weighing in at a few hundred thousand. Taking a look at some of the different kinds of food franchises on the market today, these can be broken down into four general categories: fast food (or, quick service), casual dining, fine dining, and mobile. Different types of food, customer bases, atmospheres, and hours of operation can then break down these categories further. For example, quick service food franchises can include anything from the corporate monsters that clutter highways, to convenience stores selling taquitos, your morning coffee shop or favorite deli market. Typically serving foods such as burgers, pizzas, and sandwiches, these franchises can then be broken down
further into niche groups such as take-out, drive thru or serve yourself. To paint the picture further for you, casualdining franchises could be considered anything from a local sports bar, to seatyourself diner, while fine dining is usually associated with champagne glasses and hefty bills. Mobile food franchises may opt to serve the standard fries or shawarmas from their food trucks in a busy parking lot, or perhaps they choose to set up shop in central park, serving pretzels or bibimbap. A rising trend in the mobile sector is food kiosks. Found in shopping centers, hospitals and airports, while many franchises refer to these locations an “nontraditional” units, the flexibility and ease of operating a this kind of franchise has its benefits. While food franchise categories sound straightforward there are many types of businesses that can fit in several of these depending on their product. For example, catering companies or wedding cake parlors, where do these fit in? To complicate the matter even further, these categories can overlap. For example, the concept of fusion menus featuring dishes that marries two or more ingredients, from various different cuisines to create a new dish, is exploding across North America. Or, as recognized by Forbes, the category of fast-casual niche restaurants is on the rise. The ideal situation, and perhaps recipe for success, is to choose a category that not
only suites your needs and your markets needs, but also serves a unique niche. This may sound like a mission but in today’s evolving society niches can be found from street corner to street corner. If you want to buy a pizza place, make sure it serves gluten-free, or if you’re thinking about a frozen yogurt shop, why not look into a DIY concept? These tailored franchises may seem tedious and over zealous but how are you going to stand out in a hungry metro area if you don’t offer something different, something special. Yes, you could buy into a monster chain with a proven success rate, but if you don’t have the means in which to buy the billiondollar-brand, what is your plan? After all, you’re the new kid on the block and if you’re not giving your potential customers a reason to leave their favorite burger joint to try yours, how do you expect to generate business? At the end of the day, the most important thing to be sure of before you sign the papers and choose your site, is that you are happy. Asides from investing a large sum of money into your new business, you’re also going to be investing your time, hard work and dedication to the brand. Make sure this is what you want to do, because the saying goes, “Money can’t buy you happiness.” Stay tuned for The Food Supplement, Part 2 coming in our December issue! Jessica Spoto Editor, Franchising USA
Franchising USA
FOOD Fr a nch ises
Page 29
FOOD Fr a nch ises
COVER STORY
Bennigan’s:
Re volutionizing Casual Dining
Bennigan’s entry into food service 37 years ago launched the beginning of the casual dining niche and introduced the world to a new kind of restaurant experience. Founded in 1976 by the iconic Norman Brinker, Bennigan’s was designed to fill the gap between fast food and fine dining while being family friendly. Opening the first location in Atlanta, GA, the space featured a full service food and beverage menu offered at an affordable and high value oriented price point. Bennigan’s grew to around 400 restaurants before filing for bankruptcy in 2008, when all of the U.S. corporate locations closed. However, the U.S. and International franchised restaurants remained open due to Bennigan’s tenacious franchisees and supplier partners who carried the banner
Franchising USA
“We’ve started a revolution where casual dining is responsible for delivering great service, and in our case, we take it from great and make it Legendary.” and proved the strength and the value of the brand. In 2010 Bennigan’s began its renaissance and has now restored itself, once again, to the top of the casual dining segment. Making its comeback, the new generation of Bennigan’s restaurants fit a distinct prototype to include a revamped chefdriven menu, innovative beverages, a fresh look and authentic feel. “The new restaurants are cool, hip, efficient and high energy; they are forward looking and feeling but keep vestiges of our heritage.” Paul Mangiamele, CEO, says. Smaller in size but deeper in value, the new models feature a shotgun or, one sided bar allowing for an open dining room to deliver the brands’ renowned Irish hospitality. “The new prototype produces high volumes and compelling returns on the investment,” Mangiamele explains. The first “ground up” prototype location
is set to open in Fayetteville, TN this November, and franchise owners David and Melissa Hunt cannot wait to open its doors. Experienced serial entrepreneurs, David’s most recent field of work has been building Hampton Inn hotels. This was where he recognized the need for strongly branded restaurants. Seeing Mangiamele talk about revamping Bennigan’s on a television business show, David was intrigued by his energy and vision and asked Melissa to investigate franchising options. Informed of open territory, the Hunts jumped at the opportunity. After meeting with Mangiamele and establishing a mutual fit, David attended Discovery Day in Dallas, TX. “I was amazed at the level of support detail and guidance we would be receiving from the company,” he says. Melissa, COO of their franchise, attended four weeks of training, receiving all the tools necessary
to open and operate the restaurant profitably. Reflecting on the college years he spent frequenting Bennigan’s, David says he has always been a fan of its excellent food and service and remained a loyal customer in the years to follow. “For 15 years, Bennigan’s was the restaurant that my kids, wife, and I would look forward to going to eat while on our Orlando vacations,” he laughs. Proud to be parenting the first new prototype, David describes the new look as inviting and warm. With the Fayetteville mayor and chamber of commerce personally welcoming the Hunts’ new Bennigan’s to their fair city, David has a feeling they’re going to do “amazingly well.” Potential franchisees must be financially sound, with a considerable net worth and liquidity to build and open their restaurants, while possessing the working capital reserves to get them through their first six months of operation. Candidates must also understand the importance of a strong work ethic and delivering “Legendary” customer service. “We’ve started a revolution where casual dining is responsible for delivering great service, and in our case, we take it from great and make it Legendary,” Mangiamele says. “We have great chef-driven food with unique flavors which are appealing to our customer base. We turn our customers into guests and those guests are loyal and ‘lifetime.’ For us, that’s what it’s all about.” Bennigan’s franchise process is very transparent and provides franchisees with the infrastructure and resources needed to be successful. Starting with an inquiry, application process, and FDD review, the Bennigan’s team then provides training in every area of business, keeping their promise to deliver respect, trust and
integrity throughout the entire process. Offering ongoing support through the online “Bennigan’s University,” Bennigan’s corporate team is available to assist franchisees all day, everyday. “It’s not 24/7 with us, it’s 25/8,” Mangiamele says. “If our franchisees need anything, all they have to do is pick up the phone.” Bennigan’s 15 corporate staff members visit restaurants, stay informed with their markets, handle the social media, and provide four-walls marketing to ensure every location looks and operates to Bennigan’s high standards. “The corporate team bleeds green, and that speaks to the passion they have for the brand and is represented in the strength of the support we give our franchisees,” Mangiamele says. Franchising since the 90s, today Bennigan’s has 60 franchise groups representing 100 restaurants throughout 15 states and 12 countries. Growing at a rate of one new restaurant a month, Mangiamele is pushing to double the growth rate and has 80 new restaurants for the U.S and internationally in the works. With a new generation of franchisees internationally, one of the latest additions to the Bennigan’s family has been awarded a Master license for the country of India, opening 50 restaurants over the next several years. In addition to this exceptional development, two new locations will be opening in Mumbai next spring. “All companies are only as good as their weakest areas, and for us to have a strong contingent of franchises is gratifying,” Mangiamele says. Bennigan’s also recently introduced “Bennigan’s On-the-Fly” restaurants. These fast casual, non-traditional restaurants will be located in high-traffic markets such as airports, university food courts, and hospitals. “Wherever the
“The corporate team bleeds green, and that speaks to the passion they have for the brand and is represented in the strength of the support we give our franchisees.”
arithmetic makes sense, we’ll look into developing,” Mangiamele says. “We’re moving strongly forward again, and that’s a testament to the strength of our brand, our franchisees, corporate staff and the great supplier partners we have our on team.” The initial fee to own a Bennigan’s franchise is $35,000 with a royalty of four percent and an additional one percent going to marketing. Significantly lower than other casual dining franchise organizations, Mangiamele is looking to attract potential franchisees that are looking for strength and value in an iconic brand. As part of IFA’s VetFran initiative, Operation Enduring Opportunity, Bennigan’s is prepared to waive the initial fee for veterans who qualify for Patriot Financing and are honorably discharged. Bennigan’s has also reduced the initial fees for other veterans. “We do this to help these brave men and women, who protected our freedoms, to matriculate back into the business mainstream and let them sprout their entrepreneurial wings by assisting, where we can, by getting them into the business world,” he explains. “We represent a brand that started 37 years ago, and instead of being a victim of ‘brand drift,’ we’ve reemerged as a proud, strong and relevant brand,” Mangiamele says. With a wink and a nod to their rich Irish heritage, Bennigan’s strives to deliver a genuine Legendary experience to all guests. “It’s not just service it’s Legendary service; it’s not just an experience it’s a Legendary experience; it’s not just good food with ample portions, it’s chef-driven. While we all want to make money, it is not our sole motivation. We have found that the more we are focused on the right things like a strong value proposition and delivering on our ‘Legendary’ promise to our guests, the increased profit becomes a byproduct. A great end result for any business,” Mangiamele concludes. For more information: Website: http://bennigans.com/ franchise-overview/ Email: info@bennigansfc.com Phone: 469.248.4419
Franchising USA
FOOD Fr a nch ises
Page 31
foo d Fr a nch ises
Wo k Box
Wok Box: Founded in 2004, Wok Box is one of the fastest growing, diverse Asian style franchises in North America. With dishes and flavors spanning all over Asia, from China to Malaysia, they have unique tastes for every palate. The Wok Box chain started with several quickservice casual-style restaurants in Canada and now, forging through the USA, stores are open in Oregon, Arizona, and several are under construction in Texas. Plans to open locations in Florida and California are also in the works. Across the world, Wok Box has entered the Middle Eastern market opening its first location in Doha, Qatar with more exciting worldly openings planned for the future. Wok Box has greatly increased it brand exposure ten-fold with two offerings on the entertainment front after participating in two exciting hit shows from both the Food Network Canada and the W network. Wok Box was in a brand new series “Giving You the Business” on Food
Franchising USA
An Explosion of Fl avor
“Wok Box believes in focusing on a menu that uses fresh, superior products so that customers are assured of a delicious meal and healthy options.” Network Canada. The show serves up an inside look into some of the most popular restaurant chains. In every episode, the CEO of a major franchise selects four employees with strong potential and secretly puts them to the test in a series of outrageous challenges. The boss watches as hidden cameras capture their every move, and with a range of possible prizes, the strongest candidate walks away with the keys to their very own business! Wok Box is also slated to be in the hit show Undercover Boss Canada on the W Network. Each episode features an executive who is transformed into a frontline worker with a covert disguise and a convincing back-story. Working alongside their employees, each “boss” embarks on an often emotional journey. As they struggle to learn new skills and discover the effects their decisions have on others and the perception of the brand, they discover who the unsung heroes of their workforce really are. Wok Box offers tasty menu options
ranging from noodle and rice dishes such as their Singapore Cashew and Indian Butter Chicken with Naan bread. Unique menu features include their Cheesy Kimchi Fire Balls and Vietnamese Iced Coffee. Ingredients and inspiration are taken into the test kitchen and painstakingly, recipes are worked out to offer the customer a truly flavorful experience and a wide range of choices. Wok Box believes in focusing on a menu that uses fresh, superior products so that customers are assured of a delicious meal and healthy options. Catering for customers with special dietary needs, Wok Box offers options for Vegan, Vegetarian, Low Carb and Wheat Free diets. “Wok Box brings authentic tastes from across the Asian landscape to people who have never been exposed to these wonderful flavors,” Lawrence Eade, CEO of Wok Box says. For more information: Website: www.wokbox.ca/franchisepackage
Page 33
Franchising USA
FOOD Fr a nch ises
Glenn Cybulski, COO Persona Neapolitan Pizzeria
Keeping it Fresh
Cre ating ne w piz z a recipes in your fr anchise store “Franchisees of many pizzerias are encouraged to “think outside the box” when it comes to local flavors and ingredients.”
Glenn Cybulski
When I decided to open my first Pizzeria I knew exactly what style of pizza I wanted to make, Rome style. The thin crispy crust with a small gum line and just enough sponge for the guest to taste the flavor of the crust but not have it overwhelm the sauce or toppings. It seems like a long time ago now and ten restaurants later we are just getting ready to launch our own fast casual build your own pizza franchise. One question comes up a lot as a franchisee, “Can we be creative with the recipes?” I certainly encourage it, but it has to be done the right way!
Franchising USA
Sounds easy right, creating a recipe? It was in the beginning as I had just returned from living in Italy so I knew how to make the dough and bake it to perfection. The only problem was what do I top the pizza with besides the obvious pepperoni, sausage and mushrooms? How do I make my pizza stand out from the rest? That’s where this story really begins.
your creativity knows no limits, I am not putting frog legs on any pizzas in the near future, but one thing I keep in mind is the demographic of where my Pizzeria is located, local flavors, Farm to Table sustainability, and of course national food awareness such as Gluten Free products, this is how I start, with an idea that is researched, then the fun begins.
I often get asked the question “How did you come up with this recipe?” and the truth is a lot of my recipes start when I taste an ingredient in another dish and think, “Can I put that on a pizza? What do I pair it with?”
I like to get into the kitchen early like because I know I will be alone and uninterrupted. The development of a new recipe starts the minute you put pencil to paper, yep that’s right I write everything down as I mix ingredients so I have notes to follow for a final recipe. Developing a new recipe is easy for an independent operator because they do not have the same guide lines like franchisees do and are free to experiment and create, that is really the definition of “development” at least for me, mixing dicing and blending flavors together until you get it right, that’s the pay off.
These are important questions a chef has to answer along with the financial side of “the biz,” “Is it profitable?” because if you cannot make a new recipe that keeps your food cost at an acceptable percentage then “the biz” suffers, right? Research is key when I create a new recipe; I look for ingredients that are “trending.” In the culinary world, I research top Chefs to see what they are cooking with and what they think will be relevant in the coming year. There are many websites you can read, I usually just Google “Food Trends” and you will be amazed what pops up! This is where
Creating new recipes however is not limited to independent operators anymore, in fact franchisees of many pizzerias are encouraged to “think outside the box” when it comes to local flavors and ingredients. As the pizza industry
“Remember your franchise training, and make sure to get approval before testing new recipes.” continues to evolve and grow, franchisors know that some of the best idea’s could come from their operators and encourage that thought process. This will be a practice that we cultivate with our future franchisees. Collaboration is great but you should definitely get an approval from your franchisor before adding anything to your menu. We all know Subway, but did you know that it was a store operator that came up with the “five dollar foot long” campaign? He talked about it with his territory developer and was able to test it in his local market, and then corporate rolled it out system wide! That is just one example of what can be accomplished with creative thinking. So how do you create a recipe in your unit? Everyone can use help in the development stage of a recipe and I always go to my sous chefs and prep cooks for their opinion when finalizing a recipe as you never know when a team member will jump in with a technique that will take your recipe to the next “flavor” level. To tell you the truth it never hurts to experiment with your kitchen crew because they usually are brutally honest about the good and the bad. You know that old saying about an opinion, “Everyone has one!” When it comes to a new recipe the more opinions the better so when I think I have a finished product the first people I ask to try it is my staff. It is very important to get honest feed back and if you make trying a new recipe fun then your staff will open up to you and tell you the truth about there opinion, how do I do that? First off its FREE FOOD! Who doesn’t like that, and after a long shift it’s perfect timing for the staff to sit down and try a new creation. Sometime they love it and sometimes not so much, but when I leave the conversation open to staff to think outside the box I get
feed back all the time, so much so that I have a Staff Suggestion Box in the break room for ideas, they can be anonymous or they can sign it, you would be surprised at how successful that has been, try it! Also there is a reward for participation, gift cards, a little cash, or just a nice dinner for everyone after shift. Remember ‘the biz’ part I mentioned earlier? Well now its time to see if the recipe really works, will it sell and is it profitable. Now I have a recipe that not only tastes great but I know exactly how much of each ingredient I will use because I have taken notes the entire way through development. I also keep my food cost in the range of 18 percent to 24 percent and I do not waiver from those figures, so here is a short list of how I know a new recipe will be profitable: 1. Each ingredient is portioned to determine the amount and cost. 2. Once this is done, price the new recipe item accordingly. 3. If the food cost is within acceptable levels then I continue. 4. I try and cross utilize ingredients so food costs stay low.
Next I have to make the new recipe work with my existing procedures, one pizza cannot take too much time to make and if all that works then I get to run a special and see if the guests like it as much as we do! We blast announce it on our social media network first and run a few daily specials, this determines if we continue to make it and add it to the menu. Remember your franchise training, and make sure to get approval before testing new recipes. You bought a franchise because of the great product success and systems that the company found to be profitable, but you never know you could be the one to create the next great pizza recipe that could be launched system wide! Glenn Cybulski is a Certified Italian Pizziaolo Executive Chef and COO of Persona Neapolitan Pizzeria. Chef Glenn has over 120 Culinary awards and is a member of the World Pizza Champions and a frequent writer for Pizza Today Magazine. For more information: Blog: www.worldpizzachef.blogspot.com Twitter: @worldpizzachampion Phone: 707-774-1668
Franchising USA
FOOD Fr a nch ises
Page 35
foo d Fr a nch ises
Sloa n’s Ice Cr e a m
Fr anchising Fantasyl and :
Sloan’s Ice Cream
Welcoming franchise investors to the irresistible world of ice cream, candy and toy delights! Sloan’s, South Florida’s palatial ice cream, candy and toys paradise, is fast becoming the sweetest franchise opportunity on the market, indulging investors with an opportunity to open their own savory and aromatic wonderland. In less than a year, more than 20 units nationwide have been signed and are in development, with the first franchise location set to open in Delray Beach, FL later this year. Sloan’s anticipates a total of approximately 200 U.S. franchise locations. “Simply put, we created Sloan’s to be a dreamland for kids and adults of all ages. Our focus has never changed. In fact, we just keep enhancing the experience and now we’re immersing even more people in the Sloan’s brand through active franchise growth,” Sloan Kamenstein, founder, owner and a classically trained chef says. “One taste, sniff and glimpse of Sloan’s sends the senses soaring.” For Florida’s Gold Coast residents, snowbirds and millions of visitors to the
Franchising USA
region every year, the four area Sloan’s shops are community destinations like none other. Plush toys line the walls, savory Sloan’s homemade sweets fill the countertops, and rich ice cream flavors made from the finest ingredients are scooped at a fervent pace for fanatical guests.
“Sloan’s turns the everyday ice cream shop on its head, and what results is a completely over-the-top venue with the best tasting ice cream and candy you can find,” Kamenstein adds. “Everything in Sloan’s has been well thought out. From our twinkling chandeliers and mouthwatering display cases, to the posh pink walls and ceilings, coming to Sloan’s is an escape from reality.” Beyond the aesthetics, tantalizing scents of freshly made cookies and waffle cones waft through the air. Taken together, the full complement of smile-inducing taste, sight, smell and touch sensory stimulants form a harmonious blend of elements that instantly create one of the most dynamic franchise opportunities. Given the uniqueness of the luxury dessert concept, Kamenstein and his leadership team have launched an aggressive franchising program with a specific target on the most attractive U.S. markets, including additional regions in Florida,
and throughout California, the Carolinas, Georgia, New York and New England. Nearly a dozen franchise units are in development in Florida and close to 10 more in Southern California. “To people who know us, Sloan’s is a phenomenon they can’t get enough of,” said David Wild, Director of Franchising at Sloan’s, and a seasoned franchise professional who recently joined the company to lead its franchising efforts. “For more than 10 years Sloan’s has proven to be a standout brand built to last. Frozen dessert fads come and go, Sloan’s has what it takes to remain in a class by itself forever.” Sloan’s is fully equipped to share its proven operational, marketing and management systems with qualified franchise investors to which it awards agreements. Ideally suited for experienced restaurant, retail and hospitality franchise investors, as well as husband and wife teams and multi-generational investment groups, Sloan’s has demonstrated a track record of achievements in every economic climate. For more information: Web: www.sloansicecream.com/franchising Email: dwild@sloansicecream.com Phone: (561) 839-3000.
Quaker Steak & Lube
®
America’s Best Fr anchise Opportunit y Voted Festival Favorite at the National Buffalo Wing Festival in 2010, 2012 & 2013.
In 1974, founders George “Jig” Warren III and Gary “Moe” Meszaros, partnered to open a restaurant with signature food and service that would bring families and friends together to celebrate the best of America’s car-making history. And with that, Quaker Steak & Lube® was born in a gas station.
to bring Quaker Steak & Lube® and its one-of-a-kind experience to your market.
• Family fun and casual-dining environment
For more information:
Since opening, the brand has grown to more than 60 locations in 30 markets across 20 states. This growth continues with plans to open an additional 16 locations in 2014. As the most unique and differentiated casual dining restaurant, franchise opportunities are now available
Quaker Steak & Lube® has one of the best average unit sales volumes in the industry. The company’s unit economics — driven by our industry high average unit volumes and guest checks in excess of seventeen dollars — make Quaker Steak & Lube® a very compelling franchise choice.
These figures represent the net revenue and Restaurant operating profit margin for the fiscal year ending December 30, 2012 for all Restaurants owned and operated by Franchisees and for company owned Restaurants, as published in Item 19 of our Franchise Disclosure Document. Your individual financial results may differ substantially from the results stated in this financial performance representation. We do not represent that any franchisee can attain this revenue or operating profit margin.
If you’re looking to join one of the fastestgrowing restaurant chains in the country, this business is for you!
Fast Facts • Franchising since 1997 • 70 percent franchised system • 80 million wings served annually • 60+ locations in 20 states • Wide demographic appeal • Multiple building designs • Cult-like following
Come Expand Lube Nation With Us! • Compelling unit economics • Most differentiated concept in America • Great markets available • Award-winning menu • Multiple revenue streams in each restaurant • Unmatched marketing and Fuel-injected operations support Website: www.lubefranchising.com.
Franchising USA
foo d fr a nch ises
Page 37
Q ua k er St e a k & Lu b e ®
foo d Fr a nch ises
Perso n a Piz z a
Persona Neapolitan Pizzeria Keeps It Personal
In a world seemingly saturated with developing food concepts, Persona Neapolitan Pizzeria in Santa Barbara, California is rising above the rest as the only pizzeria of its kind with an Italian trained pizzaiolo. For just $6.95, Persona creates authentic Neapolitan pizza from 00 flour and tomatoes imported from Italy combined with fresh, local ingredients and bakes it in as little as 90 seconds, producing a pizza that is crispy and chewy in the Neapolitan tradition. The meatballs, sausage and sauces, all made onsite, have won gold medal acclaim nationally and internationally and are just one part of the reason Persona was rated on Yelp as the No. 1 pizza restaurant in Santa Barbara after only being open 100 days. It all started with a chance encounter at the 2012 Pizza Expo between Joe Baumel (Culinary Institute of America graduate and BA from Brandeis University) and Glenn Cybulski (World Pizza Champion and Italian trained pizzaiolo) that led to a partnership. Founder and CEO Joe Baumel spent several years after graduating from Brandeis University learning the
Franchising USA
“Persona is literally run by chefs: one with the most prestigious credentials in the field and one with the most extensive experience. We have proven to be a winning team.” intricacies of business and finance. As part of a lifelong dream he entered the restaurant business before attending the prestigious Culinary Institute of America at Greystone in Napa, California. Persona’s COO and Executive Chef Glenn Cybulski had been connected to food from a very early age before launching into the culinary arts. In addition to an impressive list of experience and accolades, Cybulski received 112 national and international culinary awards including World Pizza Chef and is an Italian trained pizzaiolo. As noted by Cybulski, “Persona is literally run by chefs: one with the most prestigious credentials in the field and one with the most extensive experience. We have proven to be a winning team.” Customers appreciate the ability to personalize one of the favorite specialty pizzas or create their own from over 30 toppings with the help of an expert pizza maker as they move through the customization station. The pizza is baked in an imported “Marra Forni” wood fired oven at 800 degrees for just 90 seconds. Guests can add a freshly made salad
with dressing made from scratch and finish with rich gelato hand-made in Los Angeles by an Austrian-trained gelato chef for a complete culinary experience. Families, students and professionals love the convenient location, the relaxed atmosphere of the contemporary restaurant, and getting a truly authentic Neapolitan pizza at a great value without the long wait. “We are the only concept in this price range of fast casual with such a high quality product. We are convinced we are the best and that we have the freshest ingredients,” says Executive Chef and pizzaiolo Glenn Cybulski. “We have been able to successfully combine incredible quality, affordable price and expeditious delivery to offer a truly superior product.” Launched in February 2013, Persona Neapolitan Pizzeria has been experiencing marked success and plans to accept franchising applications starting in January 2014. For more information: Website: www.PersonaPizzeria.com
Page 39
Franchising USA
foo d Fr a nch ises
Co r n er Ba k ery Cafe
Corner Bakery Cafe
Corners the Fast-Casual Marke t One Neighborhood at a Time the first three cafes • On-site training for culinary, catering and local store marketing • Prototype restaurant design documents and design support
From a small bread bakery in downtown Chicago in the early 1990s, Corner Bakery Cafe has evolved as a national cornerstone of the fast-casual dining segment thanks to an innovative menu, a neighborhood approach to development, and exceptional unit-level economics. Each Corner Bakery Cafe is carefully designed to meet the needs and desires of today’s consumer, providing a madeto-order, ingredient-inspired menu for all three dayparts in an inviting, casual dining-like setting, while its best-in-class catering program creates opportunities to expand business well beyond the front door. With more than 150 company-owned and franchised locations in 17 states expected to open by the end of 2013, Corner Bakery Cafe has become a local favorite in every market with its made-to-order
Franchising USA
menu featuring hot breakfast scramblers, signature panini and sandwiches, homemade soups, hand-tossed salads, pastas and decadent desserts. With two decades of proven success and a *$2.3 million average annual unit sales volume (AAV), Corner Bakery Cafe is attracting some of the most sophisticated multi-unit operators in the industry to its franchise opportunity. Most recently, Corner Bakery Cafe announced that it is entering the Oklahoma and Massachusetts markets, as well as three new markets in Florida and California as part of five multi-unit restaurant franchise agreements. In fact, Corner Bakery Cafe has already partnered with 23 franchise groups that have committed to open more than 300 restaurants as the company moves to double its footprint over the next three to four years. Such rapid growth is possible because of a veteran, experienced corporate support team offering: • Marketing support for menu introductions, national promotions and external media • Grand Opening planning assistance • Site selection assistance • Partner, GM and manager training for
Just as Corner Bakery began in 1991 as a neighborhood Chicago bakery, today’s Corner Bakery Cafes quickly establish themselves as gathering places for neighbors and friends. From California to New York, the décor of each Corner Bakery Cafe captures the feel of the surrounding neighborhood while providing a place to gather with family and friends. With new Corner Bakery Cafe locations opening at a rate of approximately one cafe every two weeks, neighborhoods across the U.S. are welcoming Corner Bakery Cafe into their communities. Now, Corner Bakery Cafe is offering exclusive multi-unit franchise opportunities in high-profile markets, including Portland, Ore.; Detroit, Mich.; St. Louis, Mo.; Orlando, Fla.; Pittsburgh, Pa.; Cleveland and Columbus, Ohio; Minneapolis, Minn. and Seattle, Wash. Gregg Koffler, Vice President of Franchise Sales at Corner Bakery Cafe. For more information on Corner Bakery Cafe and franchise business opportunities: Website: www.CornerBakeryCafe.com/ Franchise.aspx. Email: Franchising@ CornerBakeryCafe.com *$2.3 million AAV represents the average for the 83 company-owned cafes that have been in operation for at least 18 months, as disclosed in Item 19 of the 2013 Franchise Disclosure Document (FDD). Individual financial performance will vary. A copy of the FDD is available by contacting Franchising@ CornerBakeryCafe.com.
Papa Murphy’s:
Redesigning the People’s Piz z a Parlor The world’s leading taken-bake pizza chain, Papa Murphy’s has announced an innovative store redesign that brings the story of their food to life. “For over 32 years we have strived to provide the best fresh pizza experience to busy families. Our new food-forward store highlights our high-quality ingredients with clean and simple design,” Kevin King, Papa Murphy’s Chief Development Officer says. “Two key features of the modernized CREATE store are the digital menu boards and the addition of a convenient grab ‘n’ go ‘Murphy’s Market.’” The new Papa Murphy’s CREATE store focuses on complete transparency and personalization. An open layout showcases the scratch-made dough prep area, hand-chopped vegetable toppings, and freshly grated 100 percent whole-milk mozzarella cheese. A digital menu board display enhances the guest experience and provides a resource for local messaging. The store flow allows the guest to see their pizza being created right before their eyes. “We’re fresh. We boast uncompromising quality, hand-prepared ingredients and want to share the CREATE experience,” King adds. “We are extremely passionate about providing a take-home dinner experience our guests can be proud of – just like we are proud of the new store design.” Recently ranked number one with consumers in two prestigious consumer surveys, the big surprise is in that this underdog brand beat out full-service
brands without having ovens, table service, delivery drivers, or bars! Rated the number one food chain over all full-service and limited-service chains in the 2013 Consumer Restaurant Brand Metrics Ranking by Technomic, Zagat’s “Number One Rated Pizza Chain” for the past three consecutive years, and the number one pizza chain in the 2013 Consumer Picks survey by Nation’s Restaurant News and WD Partners, Papa Murphy’s is quickly sweeping the nation. “We put all our money into our food,” Ken Calwell, Papa Murphy’s CEO says. “We may be the underdog in size, but not in flavor and customer satisfaction. We create our pizzas right in front of customers with the freshest ingredients to take home and bake in their ovens. We bring families together with food people love.” Claiming the title of world’s largest take-nbake pizza chain, Papa Murphy’s currently has 1,370 franchised and corporate-owned take-n-bake pizza stores in 37 states and
Canada. Just like Starbucks, Nike, and Costco, Papa Murphy’s is a cult brand that started in the Pacific Northwest and has expanded its national footprint to share its delicious pizzas to fans nationwide. Having launched the first CREATE store in Austin, TX on September 4, 2013, Papa Murphy’s saw two more locations in San Marcos and Phoenix following suite this past October. Calling for franchisee partners to open new units and remodel existing units with the new design, Papa Murphy’s is currently focused on launching new shops in California, Colorado, Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Midwest, New Mexico, Nevada, Ohio, South, Southeast, Southwest, Wyoming and throughout Canada. For more information: Website: www.papamurphys.com Facebook: www.facebook.com/ papamurphyspizza
Franchising USA
foo d fr a nch ises
Page 41
Papa Mu r ph y ’s
DON’T MISS OUR NEXT ISSUE!
FOOD FRANCHISES part II
Want to learn more about trends and growth industries in franchising?
Find out more about Food Franchises in the December edition of Franchising USA.
Need help making the big decisions?
For interactive editorial and advertising solutions, please contact Jenn Dean, Jenn@cgbpublishing.com. 250-590-7116
Every edition we feature advice from the experts to help you on your franchising journey. Franchising USA
A N ew Approach to D i s c ov ery Day i s D awn ing For savvy franchisors, Discovery Day is the next frontier in closing quality candidates. But not all franchisors invest in conducting Discovery Days. And for most franchisors that do schedule Discovery Days, they don’t put the effort in to get the most out. Unbelievable. You’re in the franchising business.
“‘One bad apple spoils the whole bunch’—is forever true in franchising. One rotten owner can disturb a conference call, disrupt an annual meeting, and negate positive owner validation.” Let me first make a case for Discovery Day, and follow-up with a few
recommendations to heighten your
“Wow!” factor. That is after all what
you need to create—A Discovery Day
experience that sets you apart from the
other franchisors whose eyes are smiling tenderly on your candidates and whose talons are outstretched ready to snatch them out of your arms.
First, I have to ask the question: Why
do you spend so much time and money hiring mid-to-senior-level employees, but think nothing of awarding a franchise to someone you’ve not met? For new hires—people who may never meet with your customers—you pay travel expenses for several rounds of interviews, you invite them to informal, get-to-know-you meals, and even ask to meet a spouse or significant other. You do that because you want to size them up: Are they who they say they are? Do they have a you-can-trust-
Franchising USA
ex per t advice
Page 43
Dave Kelley, President of Kelley Murphy & Walsh
ex per t advice
Dave Kelley, President of Kelley Murphy & Walsh
But, you say: “It’s up to my well-paid franchise sales team to screen candidates for their fit within the organization and among our owner network.” Here I have to take a deep breath and remind you that you assign your development managers “sales quotas.” Numbers sold; not quality individuals signed. Don’t forget, too, that it’s a well-established law of franchise sales that development managers sell franchises to individuals they like and who are like them. They are not screeners, and putting them in that exclusive, critical role—unless it’s for interest in the business, net worth and a pulse rate—is a huge mistake.
me smile? Does their handshake pull you in or put you off? Do they communicate in person with confidence and purpose? How do they carry themselves? Will they mix well with your employees and be part of the team? In the end, are they a GOOD FIT? Isn’t a good fit what you want from your new franchisees, too? (I see “good fit” in your ads and in your promotional materials). You are after all entrusting your brand name, your goodwill, your hard earned, yet internet-fragile reputation, your customer relationships, your sales and royalties, and your future, if it’s at all important to you, to your frontline owners. They are infinitely more important to your health and happiness than a marketing director, regional operations manager, or IT director. You are a stepping-stone to their futures. They aren’t loyal to you. Face
Franchising USA
it. In the new-normal economy, they are mercenaries. Franchisees on the other hand are significantly invested in your success. They are looking for security and a productive, mutually beneficial relationship. Most important, the adage—“One bad apple spoils the whole bunch”—is forever true in franchising. One rotten owner can disturb a conference call, disrupt an annual meeting, and negate positive owner validation. An unruly employee is easily replaceable, a disgruntled franchisee not so. There may be legal or default issues, a territory that may go dark, or dissatisfied customers who can never be won back, concerns that ultimately find their way into your Franchise Disclosure Document, or worse, blogs, reviews and competitors’ hands.
Measuring the fit of your candidates is a must-team responsibility. Your franchisees will want access and advice from marketing, operations, IT, other owners, and more. Assessing how those working relationships will function after documents are signed is too late requiring management time you don’t have and energy that will sap you from more important commitments. Discovery Days are as close to an insurance policy as possible that your new owners will be contributing, successful, team players throughout the life of their franchise agreements. Now let’s address our other concern, that your Discovery Day puts your best foot forward. However, let’s leap forward and suggest that your Discovery Day should be your surest means to convert your candidates into owners. You want Discover Days that SELL!!! Let me ask you a few more questions: 1) What percent of your Discovery Day guests do you close? (If less than 90 percent, costly missed opportunities). 2) Are you using your Discovery Day to close deals? (Owner validation by itself won’t close a deal. A “Wow!” Discovery Day will). 3) Is your Discovery Day a seven or less on a 10-point scale of importance
“Like a well-orchestrated stage production, there is a flow to your presentation—a dramatic opening that captures attention, a gripping middle and a memorable, on-your-feet close.” within your organization? (If it doesn’t register an 11 for all your people—and I’ll put this as humanely as possible— they should be fired and escorted from the premises). Better yet, fire-up your team on the importance of Discovery Days in the growth of the franchise. With growth, there’s revenue, bonuses and job security, and for the mercenaries, a firmer steppingstone to their next larger office and greater company benefits. All successful franchisors have a sales process. If they have a Discovery Day, it’s generally at a time when candidates are ready to write checks or they’ve heard enough in the process and walked away. In either case, your Discovery Day is not working for you, but against you. When to schedule your Discovery Day is another conversation. How to create a winning Discovery Day is for today’s discussion. After sitting in on dozens of Discovery Days and organizing Discovery Days for food, home-services, child care, retail and fitness concepts, here are a few takeaways that will have your Discovery Days moving your candidates further, faster to closing: 1) Discovery Day is a performance. Your home-office is the stage. Each employee on the support team has a role to play. 2) Like a well-orchestrated stage production, there is a flow to your presentation—a dramatic opening that captures attention, a gripping middle and a memorable, on-your-feet close. 3) Rehearse. Critique. Improve. And,
immediately after every Discovery Day, debrief, improve, rehearse. 4) Ask your candidates what specific question(s) they want addressed at Discovery Day. One of your first agenda items is to remind each candidate attending what question(s) they had and when they can expect them to be answered. 5) Provide candidates with a leave-ahead to prepare them for your Discovery Day. Invite them to complete a survey after the Discovery Day. 6) Assume your candidates have at least seen your website and know something about your business. Don’t waste their time. Tell them what they don’t know. 7) Candidates buy franchises for rational and emotional reasons. During the investigation process they may be asking rational questions, but they are in an emotional state. Old-school development managers will say candidates must want to own the business. To a certain extent, yes, but more and more you have to show you want the candidate as part of your team. Today, you have to make an emotional connection. You have to woo them. 8) Pet peeves: Make sure your presentation information is up to date; your audience is not reading from slides, but connecting to your presenters; your presenters are proudly attired in brand wear; make it interactive, highlight and repeat the key takeaways; smile; and, present with enthusiasm.
Dave Kelley
9) Close the meeting with a goody bag and ask for the order.
10) Offer an incentive to take action. 11) Follow-up with a handwritten Thank You note.
Those are but a few of the ways to improve your Discovery Day. We have more, but the key is committing to making your
Discovery Day more than it is today, more of the same won’t change the outcomes.
What you will find is that your Discovery
Days will improve your close rates, reduce your capture costs, draw the best-fit
candidates into your franchise system,
increase your revenues, and energize your team about the business and the potential for the future.
Dave Kelley is President of Kelley Murphy & Walsh, headquartered in Atlanta, GA. For nearly twenty years Dave has helped leading franchisors design results-driven development programs, created informative and lively internal and external communications and orchestrated powerful and moving Discovery Days that convert candidates into franchise owners. For more information: Email:kmwadv@mindspring.com Phone: 770-509-1430
Franchising USA
ex per t advice
Page 45
f ra nchisee in action
Tu tor Doctor East Coast W i ngs
Kings of Wings:
The Lucas Brothers Win with E ast Coast Wings “We just went for it,” Seth Lucas, co-owner of five East Coast Wings restaurants says. Purchasing his first location in February 2009 with his younger brother Jared, the pair have since been taking North Carolina by storm, opening a new location in each year to follow. Growing up in Gaithersburg, MD, the brothers have shared an interest in the restaurant industry from an early age. Parting ways through their college years,
Jared moved to Griffen, NC where he began working as a salesman, all the while his passion remaining in the restaurant industry, with which he had been involved since the age of 15. After graduating from Chowan University with a degree in Business Seth also joined the restaurant scene. Employed as a waiter in a local, full service, chain called Hams, he quickly moved up the ranks to become General Manager of the restaurant, which also featured an onsite brewery. Enjoying the lively atmosphere the industry offered, in 2008 the brothers decided they wanted to “do their own thing,” and began looking into launching their own restaurant. “We thought about doing it ourselves but knew we if found the right company we could do well,” Seth says. “The support a good franchise will give a franchisee is amazing.” Cultured with the knowledge
the pair needed to operate a restaurant, the Lucas’ knew what to look for in a good company. Then one day, while visiting his in-laws in Winston Salem, NC, Jared stopped in a neighborhood East Coast Wings and was blown away with the experience. Sharing his findings with Seth, he too looked into the brand and instantly fell for the concept. Boasting a southwest feel and furnished with dark wood and beautiful bars, the art accented walls, televisions for sports fans and dynamic energy create a “high end” feel in the causal-dining wing restaurants. Filling out the franchise application and piecing together the required documents, the brothers felt the East Coast Wings model was right for them. “We pulled the trigger before we even had the money set in stone, we figured we would go for it and hope for the best,” Seth says. After receiving the FDD from East Coast Wings the brothers attended a Discovery Day and worked a shift in an existing restaurant to get a feel for the business. Next was time to decide on their location. Both wishing to open shop close to where they were settled with their young families, Greenville was the perfect middle ground to get started. However, at this same time Greenville was seeing many new restaurants quickly rise and fall, and the closest East Coast Wings was located three hours away from Greenville; both daunting factors. Nonetheless the Lucas’ were not deterred from pushing forward in the Greenville area. Opening their first location in a shopping center
Franchising USA
equip with a busy movie theater, their strategy was to bring people in this way, or at the very least get their name out there. “The first six months were tough,” Seth explains, “East Coast Wings was a young company at the time, and our families were depending on us to do well. We had a very soft opening, but in the long run it helped us grow and was key to being successful.” Looking back on their run so far, Seth says what sold the company was their winning six-page menu featuring 75 flavors and 675 combinations of buffalo wings, burgers, salads, sandwiches and more. Meeting with Sam Ballas, CEO and President, the Lucas’ immediately felt a family vibe and admired their involvement with the business. “At that time there were less than 12 East Coast Wings locations, but Sam set out to make sure we would make money, not just for them, but for us too” Seth explains. Opening their second restaurant in May 2010 in Kinston, NC, the Lucas’ took over the Hams location where Seth once worked. The pre-existing building was
“Before opening we knew that as long as we were hands on in the business we’d be successful, but we weren’t expecting to be successful to the point of opening a new location every year.” a no brainer for the duo and was also conveniently the city in which their parents reside. In 2011 the Lucas’ opened their third location as the first East Coast Wings express unit. Located in Greenville, NC, the quick service model was a small venue close to the college campus and offered a delivery service. Their fourth unit opened 2013 in Goldsboro, NC, a military town that provided a great customer base for the business, and most recently, the brothers opened their fifth location in the small town of Washington, NC. Throughout the five locations the Lucas brothers manage 175 employees, and the one-hour trip between their homes and each restaurant allows for the owners to be actively involved in each location. “Before opening we knew that as long as we were hands on in the business we’d be successful, but we weren’t expecting to be successful to the point of opening a new location every year,” Seth laughs.
Since their initial training in 2009, the process has changed immensely. Comparing the difference in training offered then and now as “night and day,” Seth explains how today the steps, procedures, and online courses for franchisees is much more detailed and intense. The new program is designed to run 35 days and includes a mock kitchen trial and cooking tests for every item on the menu. As a result franchisees are well equipped to manage their restaurants, yet also have access to ongoing training through unique software that allows for both owners and employees to stay educated with videos and tests. Franchisees also benefit from the four dedicated East Coast Wings committees that cover marketing, menu, blueprint and advisory. “The biggest benefit of being an East Coast Wings franchisee is the transparency between franchisees and franchisors,” Seth says, explaining
Franchising USA
f ra nchisee in action
Page 47
f ra nchisee in action
East Coast W i ngs
how the company’s willingness to work together when making decisions and head office’s devotion to saving their franchisees as much money as possible is second to none. “The franchisors are constantly cutting new deals with different vendors and seeing ahead of the market, and as franchisees we’re also included in making important decisions,” he explains, adding that the communication between franchisees and corporate is astounding. “It’s those little things that make me love being a part of the East Coast Wings’ team,” he says. As a part of the company’s marketing initiative franchisees are actively involved with their local communities. Sponsoring various clubs and teams in their neighborhoods, “It’s important to give back,” Seth says, sharing how last year their efforts helped a local basketball team raise over five thousand dollars through selling donated coupon books for a low price with a high value. “This shows the community that we care for our teams and neighborhood, and also brings them into the restaurant at which point we can share our product and hopefully win them over.” One of the most rewarding experiences
Franchising USA
“The biggest benefit of being an East Coast Wings franchisee is the transparency between franchisees and franchisors.” the Lucas’ have faced since joining East Coast Wings occurred a year and a half ago when they settled a deal making them the only Area Development Representatives. As trainers for their territory, which include several big cities such as Wilmington and Virginia Beach, the dynamic duo will act as an extension of corporate and be responsible for the training and support of franchisees in the area. “We will be overlooking everything from training managers and staff, to helping franchisees in their first few weeks of opening, and there whenever we’re needed,” Seth says. Along with the many highs the Lucas brothers have encountered with the company including various awards for their restaurant locations and products, Seth says one of the best things about being an East Coast Wings franchisee is that he’s home for dinner every night. “Because of our hard work and ability to successfully grow with the right employees, we are now able to put a lot of that hard work back into the business
financially, spend more time with our families and be in control of our own business,” he says proudly. Jumping at the opportunity to recommend East Coast Wings to anyone interested in the food industry Seth says this: “Find the thing that fits your lifestyle and learn about it. Make sure it will fit in your city and that the company fits with you personally. All businesses are different and values are different, so make sure it’s what you want.” As the brothers continue to expand with their restaurants and raise their families they’re feeling positive about what the future has to offer and how they can grow with the company. “We’re constantly looking for new ideas,” Seth says, “It’s been a fun five years and we look forward to the next five.” For more information: Dan Collins, SVP Brand Development Web: www.eastcoastwingsfranchise.com/ Email: dan@eastcoastwings.com Phone: 954-263-2056
Don’t miss an issue
Page 49
Get the App
www.franchisingusamagazine.com Franchising USA
ex per t advice
Ned Levitt, Partner of Dickinson Wright LLP
WHAT KEEPS FRANCHISORS What keeps franchisors up at night? Just about everything that keeps any business person up at night in these challenging times; and then some. Rate of Change “In times of rapid change, experience could be your worst enemy,” J. Paul Getty.
Interesting thought and so not what franchising is typically about. In fact, replication
of the past is at the very heart and soul of franchising. Are any franchises sold/ awarded on the basis that the franchisor will guide the franchisees through rapid and substantial changes? On the other hand change is inevitable and the successful franchisors have always been good at managing change for their systems. So what about change is keeping franchisors up at night? The simple answer is how rapidly things are changing. Anyone heard of trans fats just a few years ago? When did it become so last century not to offer Wi-Fi in hotels? Before only 2006, the only thing that tweeted was a bird and before only 2004 anyone asked what Facebook was would have answered, “A picture album.” And when did it happen that your computer was outdated by the time you opened the box?
Economics Financial meltdowns, fiscal crisis, bank failures, bankrupt governments, credit crunch; when did these statements become so commonplace that they no longer shock us? Tight credit for prospective franchisees buying franchises and the impact of economies in crisis make it very difficult for franchisees and their franchisors to grow and prosper. These developments affect everything from business planning, to franchise sales, to earnings projections and product pricing.
Politics Governments and political institutions are changing all over the world at a mind
“Financial meltdowns, fiscal crisis, bank failures, bankrupt governments, credit crunch; when did these statements become so commonplace that they no longer shock us?” Franchising USA
RANCHISORS UP AT NIGHT? numbing rate. For those franchisors who are in the international franchise arena or planning to enter it, how do they factor into their business plans regime change and populist uprisings? One need look no further than the U.S. Congress for something to worry about. How do you govern a franchise system when your own government lurches from crisis to crises almost on a daily basis. Which state legislature will be the next to take a left turn on the path to more restrictive state regulation of franchises? Which municipality will be the next to pass an ordinance governing the legal size of drink containers?
Demographics What will be the consequences of the “pig in a python” generation reaching retirement at unprecedented numbers? How will the shrinking birth rate in the U.S. acerbate the problems? For one thing, franchisors might expect to see a lot of their franchisees retiring shortly and either passing their businesses onto their children or selling to new franchisees. This will weaken some systems and certainly tax the resources of all systems. At the other end of the spectrum, there are more and more young people unable to find employment in their chosen field or deciding not to invest in higher education and instead choosing franchising, or more likely, serial franchising, as a career path. Are franchisors ready of this new breed of franchisees, with their different values and aspirations?
Technology Do you remember the debate in the ‘80s about whether or not there really was a sufficiently large market for personal computers? Remember being asked, “Do you have e-mail?” If you are old enough,
do you remember being asked, “Do you have a fax?” Trying to stay with the curve, let alone trying to get ahead of it, is a monumental task for every business these days. But, again, it is even more difficult for franchisors, who need to convince their franchisees of the value of being up to date with the right technology. Technology is contributing to the wakefulness of franchisors in other ways as well. In the past, franchisees had tremendous barriers to organizing themselves around issues in the system. Not anymore! Franchisors need to learn new skills in how to manage their communications with their franchisees in this age of instant communication. In a similar vein, unhappy customers or just malevolent people can instantly and very publicly disparage a business; around the world!
Market Trends It has always been a challenge to understand the consuming public and to anticipate their needs and wants. Nonetheless, cycles of change in buying habits used to run to about seven years typically, which allowed for a reasonable assessment of a trend, the ability to adapt for it and time to profit from it. Today, a retailer is happy if they ride out a market shift for a year or two. This is a challenge in most businesses, but how do you effectively get a network of independent business owners (franchisees) to change quickly enough to benefit from a new trend or at least hold their own?
Legal Unquestionably, we are witnessing an ever increasing number and severity of law suits from unhappy franchisees. Courts today often seem to struggle with
Ned Levitt
the subtleties of franchising and end up making unexpected and very damaging decisions for one party or another. Hardly a month goes by without another class action lawsuit being commenced against a significant franchisor. Add to this the shopping list of other claims that can arise without warning by consumer groups and special interest groups with their own agendas and it is no wonder that franchisors are tossing and turning in their beds at night.
Conclusion There is lots to keep franchisors up at night, but solutions will be found to every problem and challenge and the calming satisfaction that comes with success will sooth their troubled minds. The critical factors for success in franchising are still the same: skill, tenacity and character. Edward (Ned) Levitt is a senior partner of Dickinson Wright 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: Website:www.dickinson-wright.com/ Email:nlevitt@dicksinsonwright.com. Phone: 416-646-3842
Franchising USA
ex per t advice
Page 51
ex per t advice
Peter Casey, Founding Member of the International Franchise Professionals Group
So Many Fr anchises !
Where to Begin?
Peter Casey
Entrepreneurs have literally thousands of franchises to choose from today.
or even pet waste removal franchises. Frankly, there are so many to choose from that many find it hard to get started, and even when they do get started, it can be a challenge getting a strong understanding of what might be right for them.
They range from home-based models with
Most people who are looking for a franchise start their search on the Internet, which makes sense. The web has an avalanche of information on franchising with more being added each day. With so much information readily available, it would seem like finding the right franchise
modest start up expenses, to multi-million dollars investments that employ dozens of people.
You can choose from food services, auto repair, senior care, staffing agencies,
Franchising USA
should be easy, but in fact, it can be a real challenge for many. Too much information for such a large life decision can leave your head spinning. Over the past two decades a major trend in franchising has been the use of a Franchise Broker or Franchise Consultant to assist you in your search for that “perfect franchise.� Franchise Brokers and Consultants take a different approach in assisting you with your search: they start off by helping you research and look into YOU, before any franchises are
“Be prepared to hear and see things that you probably didn’t expect as you’ll be presented with franchises that make sense for you, even though they may not initially seem to.” discussion about how you’d like to spend the rest of your professional career. Many brokers will even talk with you about your exit strategy--before you even consider a specific franchise. This type of planning and insight is difficult for the average person who has never purchased a franchise before, but it is very important to consider. Franchise Brokers use a fairly standardized process with their clients that begins with gaining an understanding of their client’s goals and strengths, as well as how much capital that they have to work with; yes, money will also be a factor in what franchises you get to choose from. During the process, which is often referred to as the “qualification stage,” you’ll be asked about who you are, what you like to do, what your experienced in doing, and who else, if anyone, will play a part in your new business. During this phase you’ll also be encouraged to ask general questions about franchising and give as much insight into your world as possible. Your broker will use all of this information for the next phase of their process, which is sometimes called “research” or the “matching” process.
even considered. While this may seem obvious, most people don’t fully consider what they bring to the table and what their true strengths are--they often start their search based on with either what they feel would do well in their area or what they personally “like,” such as coffee or sandwiches. Loving coffee doesn’t qualify you to own and operate a coffee shop--it qualifies you to drink coffee! Franchise Brokers begin their process by talking with you about your background, goals, strengths, weaknesses and a frank
During this “matching” phase your broker will begin researching franchises that they feel are a good fit for you and that have territory available in your area. At this time they may also address any initial concerns they have about you, in relation to this franchisor. And you’ll probably be very surprised about what they identify as being worthy of your time to review during this phase of their process. Remember, your love of cars doesn’t mean that you should own an auto repair shop, so be prepared to consider some options that you wouldn’t have found on your own-this is one of the huge benefits of working with a broker. Once your broker has found logical matches to consider, you’ll discuss these
options to see if there may be a match. More specifically, do any of the franchises that your broker selected for you to consider interest you? If they do, the next step is for you to engage the franchisor and begin sharing information. Good franchisors will want to get as much information about you as possible, and smart franchise seekers (you, because you’re reading this article to be better informed) will want to ask as many questions as needed to fully understand any investment. Be prepared to hear and see things that you probably didn’t expect as you’ll be presented with franchises that make sense for you, even though they may not initially seem to. You may be presented with three different options and initially hate all three of them. If this happens, it is usually because during the qualification process your broker didn’t gain a deep enough understanding of what you’d like to accomplish and your existing skills. Or, you may be presented with three very dissimilar franchises to consider and love all of them. Typically, however, you’ll be presented with three or four franchises and one or two will peak your interest enough to warrant a deeper discussion with the franchisor. As with any investment or life-altering event, you should seek out as much information as possible and rely on trusted sources for information. Ask plenty of questions and fully engage the existing franchisees--these are people who were once in your shoes, so they can appreciate where you are and are an invaluable source of insight. Take advantage of their unique perspectives. Peter Casey is a Founding Member of the International Franchise Professionals Group, (IFPG) which is an organization that consists of hundreds of Franchise Professionals. The IFPG connects established Franchises with professionally trained Franchise Brokers, Coaches, Consultants, Lawyers and other Franchise Professionals to help expand their franchise development For more information: Website: www.ifpg.org
Franchising USA
ex per t advice
Page 53
ex per t advice
Bill Skene, Director of Insurance and Risk Management at Benetrends
Everything You Need to K
Bill Skene
When starting a new business, especially as a franchisee, new owners are faced with so many decisions to make that they sometimes suffer from what I like to call “decision fatigue.” From funding options to location selection
and build out, merchant services to payroll
Franchising USA
processing, the list of critical decisions for the first year of business (and beyond) will both exhaust you and keep you up at night. In the grand scheme of things, insurance often becomes an afterthought and as the fatigue sets in insurance policies are rushed through, skimped on, and thrown into place merely as a prerequisite for opening the doors and getting down to business, aka making some money! Those who choose the entrepreneurial path do so for many reasons, but making money and retaining those earnings is the only way to keep the dream alive. It
goes without question that we insure our most important assets like our homes and vehicles, our families via life insurance, and our ability to generate income via disability insurance; so why rush and skimp when insuring your new business venture, which could be your biggest investment to date next to your home? By nature, humans (and entrepreneurs to an even higher degree) are positive thinkers and as such we hate buying insurance because “It’ll never happen to me.” As someone who has worked with small business owners my entire life I can
Know About Insurance “Every franchise concept and business model is different so having a knowledgeable broker is key to making sure you are not under, or even over insured.” find a “broker” (meaning an agent who works with multiple carriers) who will work to understand your franchise inside and out, review your FDD’s insurance requirements, and then perform a Risk Analysis to pinpoint the areas of potential loss that can be protected against with insurance. The following is a general list of insurance policies carried by most franchisees, descriptions of what they are meant to cover and when they should be put in place. Every franchise concept and business model is different so having a knowledgeable broker is key to making sure you are not under, or even over insured.
Business Owners Policy
tell you that it does happen, and when it does you will be grateful that you have the right policies in place to pay the losses so you can retain the profits you have worked so long and hard to build. Putting the right policies (and more importantly the right underlying coverages) in place starts with finding the right commercial insurance broker. Sure, your homeowners/auto agent can probably sell some basic commercial insurance, but typically they only represent one carrier and their franchise industry experience is limited. You’ll want to
Business Owners Policies, or BOPs in the insurance world, are package policies that conveniently combine multiple lines of coverage under one policy. BOPs are not available for all business classes but whenever they are available they should be taken advantage of in order to achieve maximum savings. Depending on your business type and the available insurance carriers, BOPs can include some or all of the following, which can also be offered individually when necessary: • Property Coverage – Meant to cover the building (if owned by you), any Business Personal Property (i.e.: equipment, inventory, furniture, etc.) and any Leasehold Improvements (i.e.: build out costs, permanent counters, cabinets, wall units, etc. if you are a tenant).
• General Liability – Covers you for potential property damage, bodily injury and medical payments to others like customers and vendors making deliveries. The liability for the products you sell can also be covered. • Business Interruption Coverage – An invaluable coverage if being unable to run your business from your primary location will translate into significant lost revenue. If you experience a covered loss like a fire or extended power outage (i.e.: Hurricane Sandy victims whose properties were untouched) and you are unable to run your business you will be reimbursed for the loss of income during that period of time that your property is “down” or being repaired. • Commercial Auto – Necessary if you have company vehicles used by yourself or your staff. Even if you do not have company owned vehicles you should carry Hired and Non Owned Auto coverage which protects you from the liability your employees might suffer while using their own personal vehicles for business purposes (i.e.: sending an employee out on a quick errand). • Workers Compensation – Meant to cover employees from work related injuries or sickness. Workers comp is highly regulated at the state level so your broker will need to familiarize themselves with state laws regarding minimum coverage and whether or not owners can be excluded from coverage or not. • Umbrella Insurance – Overriding excess insurance meant to protect you from a catastrophic loss that exceeds the limits of liability of the preceding BOP coverages.
When to Buy Property and auto coverage should be carried as soon as you purchase either
Franchising USA
ex per t advice
Page 55
ex per t advice
Bill Skene, Director of Insurance and Risk Management at Benetrends
property or a commercial vehicle. General liability should be in place as you discontinue your Builders Risk Policy, or at a minimum before you start taking deliveries and open up to the public for business. Workers Comp should be in place as soon as you make a hire and prepare for your first payroll.
Errors & Omissions Errors & Omissions, or E&O, is designed to protect businesses that sell a service rather than a physical product (i.e.: consultants, hair and nail salons, carpet cleaners, etc.). Just as a retailer can be sued for selling a faulty appliance that causes a financial loss to the customer, a service provider such as a hair salon can be sued for the distress caused by dying a bride’s hair the wrong color the day before her wedding. These policies provide coverage for attorney’s fees as well as damages because even if you are not at fault you will still need to hire a lawyer to defend you to that end. In certain instances this coverage can be combined with a BOP policy.
When to Buy E&O should be purchased before you engage with your first customer to ensure the services you are providing from day one going forward are covered by the policy.
Employment Practices Employment Practices Liability Insurance (EPLI) covers your defense and settlement costs for suits related to hiring and firing practices, discrimination and sexual harassment claims. This often overlooked coverage is extremely important as statistics show that small business owners are more likely to experience an EPLI claim than a Property or General Liability Claim. Furthermore, studies show that an EPLI claim if experienced would bankrupt half of uninsured small businesses with fewer than 100 employees and 40 percent of all EPLI claims filed were against employers in that class. Many insurance
Franchising USA
carriers these days are offering EPLI coverage on their BOP policies but beware, coverage is usually limited to $25-50k, which is not nearly sufficient.
When to Buy Since hiring practices and discrimination are major components of EPLI, the policy should be purchased before you begin to seek or interview any potential employees.
Employee Dishonesty Although coverage against theft is built into Property/BOP policies, theft by an employee is almost always excluded which is where Employee Dishonesty Insurance comes into play. If you stock high valued inventory or employees have access to POS systems then you should consider purchasing this coverage. Ask your broker if it can be built into your BOP policy as that is common and the extra expense is minimal.
When to Buy Generally purchased at the same time as a BOP or EPLI policy.
Cyber Liability With a number of recent high profile hacks hitting the news, Cyber Liability Insurance has become a real hot topic in the industry. Any business that collects Personal Private Information like SSN’s, DOB’s, health information or processes credit card payments is at risk of being hacked. Most states now have laws requiring businesses that experience a data breach to notify every single customer of the breach and offer them credit-monitoring services. With an average cost of $204 per customer it’s easy to see why this coverage is garnering demand, yet the small business community continues to lag behind. Recent studies show that 55 percent of all businesses with revenues under $10M have experienced a data breach and 72 percent of all data breaches occur in small to mid-sized businesses as their computer systems are generally easier to gain access to. The loss of private data need not come
from a traditional cyber-criminal either, many times it stems from a lost laptop, cell phone or rogue employee. As a still developing coverage there are a lot of differences in policies and pricing in the market right now, but we are starting to see this coverage offered on BOP’s and E&O policies, generally sub limited to $100K or less. For companies whose revenues depend heavily on web sales, there are policies available that will protect your computer hardware from virus damage and loss of income if your website goes down due to a hack or virus.
When to Buy Cyber Liability Coverage should be in place as soon as you begin to collect sensitive customer data, begin processing credit card payments or launch your web retail presence. It’s a lot to take in, I know, which is why finding a good insurance broker to identify your potential risks and prioritize them for you will be key to your success as a small business owner. Part of running a business is putting people in the right positions to become successful; you have the vision and skills to make your business profitable and your insurance broker should have the skills to protect those profits from a sudden loss that most times, will be out of your control. If you form a relationship with a broker who can understand and support your needs today and protect your future, you’ll be in good hands. Bill Skene studied Finance and Economics at Saint Joseph’s University in Philadelphia, PA. With a passion for small business, Bill has focused his career on helping small business owners with their financing, operational, risk management and insurance needs. As the acting Director of Insurance and Risk Management at Benetrends in North Wales, PA, Bill focuses on developing franchise wide programs to ensure the continued success of franchisors and franchisees nationwide. For more information: www.benetrends.com
November 2013
Veterans in Franchising www.franchisingusamagazine.com
with
Franchising
Flavor!
veterans in
healthcare women veterans in Franchising
Franchising USA
feature
Page 57
We’ve helped 1000’s of people fund their businesses. Why not you too?
What’s holding you back from starting your own business? If your answer is funding, we invite you to join our growing family of happy, successful entrepreneurs who turned their retirement investments into thriving businesses. Talk to one of our Senior Consultants today and let us show you how easy it is to start your business debt free and cash rich!
Funding is everywhere... trust is here! Try our Online Funding Calculator to see how much you qualify for.
Why wait? Contact us to get stated today! www.tenetfinancialgroup.com (888) 901-3335 ext. 9
Scan with phone for more info.
MAKE YOUR NEXT CAREER MOVE . . . A BUSINESS OF YOUR OWN!
Maybe it's time to take control of your future. One way to accomplish that goal is to own a franchise. Let us help you – we provide a “Free” franchise matching service for Veterans.
To get started, visit our website: VeteranFranchiseCenters.com
No Cost – No Obliga�on
Page 59
V e t e r a n s i n F r a n c h i s i n g Suppl e m e n t november 2013 Our Veterans in Franchising special supplement has become a regular feature of Franchising USA. To share your story in the December issue, please contact Jenn Dean, Business Development Manager Phone: 250-590-7116 Email: jenn@cgbpublishing.com
Contents 60 Veterans in Franchising News 62 Cover Story: Baskin-Robbins Presents Franchise Incentives for Flavorful Fun Baskin-Robbins 64 Women Veterans in Franchising Mirza Tihic, Institute for Veterans and Military Families
66 Spotlight on Veterans: Veteran Franchise Initiative Launch Equity Grant Program Veteran Franchise Initiative 68 Recruiting Veterans for Exceptional Home Care Homewatch CareGivers 71 Profile: Paul Josepth EarthFruit Yogurt
Franchising USA
V e t er a ns i n Fr a nch isi ng
what’s new! Air Force Veterans are Newest Interim Healthcare Franchisees Just in time for Veteran’s Day, Interim HealthCare Inc. has announced its newest franchise agreement with two retiring Air Force veterans in Salt Lake City. Michael Hawkins and Michael Eliason are the recipients of the waived franchise fee that Interim HealthCare announced earlier this year in support of military personnel. The two plan to begin offering personal care and support services in February 2014 and expand to skilled nursing care within the first year. “When we announced the waived franchise fee for a qualifying military veteran in May, we couldn’t have hoped to find a team as well matched to our core values as Michael and Eli,” said Kathleen Gilmartin, President and CEO of Interim HealthCare. “As airmen, they embody the core values of integrity, service before self and excellence in all they do – characteristics also vital to running a successful home care business.” As Veteran’s Day approaches,” Gilmartin continued, “Interim HealthCare honors the service of all military in a significant and tangible way through these two outstanding individuals. We wholeheartedly welcome them aboard.” Air Force Lieutenant Colonel Eliason, a B-1 pilot, has spent more than 22 years of service leading America’s sons and daughters in worldwide combat operations. Major Hawkins, an intelligence officer has spent 18 years supporting combat and peacetime operations around the continent. Their last assignment has been teaching Air Force ROTC and Aerospace Studies at the University of Utah. Leaving the military this fall, both were searching for “something with a higher calling.” “My wife is a nurse so I knew people in home health are driven by a greater sense of purpose like we are in the military,”
Franchising USA
Michael Hawkins
Hawkins said. “By using my experience of managing and leading teams in the Air Force, I can make sure caregivers not only have the resources to do their job, but create an environment where they enjoy their job and are reinvigorated.” According to the two, Interim HealthCare’s franchise structure fits perfectly with their military training of using existing systems for quality outcomes. Eliason also stated the ability to lead, teach and mentor are key military characteristics that will translate successfully in the health care business. “We wanted to do something noble, something that gives us a reason to get up every day. Our research led us to Interim HealthCare and after a visit with corporate, we began working on ways to finance the franchise,” Eliason said. “When we heard the franchise fee was waived for us as veterans, it was pretty unbelievable.” Awarded to the first qualifying veteran, the waived franchise fee was beyond Interim HealthCare’s participation in “Operation Enduring Opportunity,” a program developed by the International Franchise
Michael Eliason
Association (IFA) to hire and recruit 75,000 veterans and military spouses, and 5,000 wounded warriors by 2014. Hawkins resides in Salt Lake City with his wife, young son and two daughters. He stays busy coaching youth sports. Eliason also lives in Salt Lake City and enjoys golfing when he’s not spending time with his wife and two teenage daughters. Interim HealthCare has nearly five decades in the healthcare industry, with franchise opportunities available throughout the country. Interim HealthCare® Inc., founded in 1966, is a leading national franchisor of home care, hospice and healthcare staffing companies. The company recently acquired UK-based Bluebird Care Franchises Limited, growing its franchise operations to approximately 500 global locations with more than 250 owner groups. Franchisees employ nurses, therapists, aides, companions and other healthcare professionals who provide 25 million hours of home care service to 190,000 people each year. For more information: Website: www.interimfranchising.com
VetFran debuts the VetFran Video Library VetFran has recently created the VetFran Video Library, which features videos designed to enable veterans to understand and assess franchising and its opportunities.
& COO of TSS Photography and Jon Rucker, (USAF veteran) Military Programs Manager of Snap-On Tools discuss VetFran and the relationship between veterans and franchising.
Covering the fundamentals of franchising, legal issues, franchise finance and more, the videos offer best-in-class education from the perspective of industry leaders and Board members of the International Franchise Association.
A Veteran Franchisee’s Perspective Marc Heuermann, (Illinois Air National Guard veteran) RadioShack franchisee offers a veteran’s perspective on franchise ownership.
Content in the Library includes: VetFran at McDonald’s Hamburger University Franchising 101 for Veterans Michael Seid, (US Army veteran) CEO, MSA Worldwide and co-author of Franchising for Dummies presents veterans an introduction to franchising together with Rich Morey, Partner, DLA Piper. VetFran, Veterans & Franchising Joe Lindenmayer, (USMC veteran) President
Franchise Finance 101 for Veterans Rich Bradshaw, (USAF, USNR veteran) Head of SBA Lending at TD Bank provides veterans an overview of franchise finance. Franchise Law 101 Rich Morey, Partner, DLA Piper, presents veterans an introduction to franchise law.
Caldeira, President & CEO, International Franchise Association Panelists: Jim Amos, Chairman, Tasti D-Lite LLC Sean Falk, Owner, WolFTeaM LLC, President, Nachogang LLC Stuart Mathis, President & CEO, The Quizno’s Corporation Jerry Pegram, Category Manager, Pepsi Lipton Partnership Sales Strategy & Insights, PepsiCo To access the VetFran Video Library, please visit the VetFran Toolkit. *Contributed by the IFA For more information: Website: www.vetfran.com/veteranstoolkit-signup/
From Honor To Owner A short film about VetFran VetFran at Restaurant Leadership Conference VetFran at the General Session of Restaurant Leadership Conference 2013 Moderator: Steve
Veteran named RadioShack Franchisee of the Year Illinois Air National Guard veteran Marc Heuermann has been named RadioShack’s Franchisee of the Year. Heuermann opened his first unit in June of 2012 and is already operating two successful units near Washington, Illinois and will open a third within the month. Heuermann’s lifelong passion for electronics began in his childhood, when he would visit his local RadioShack, exploring parts and finding projects to work on with his dad. As he grew up, he studied electronics in high school, and at age 18, applied for a job at RadioShack. Heuermann worked there for four years while studying engineering, before enlisting in the Air National Guard in 1986, where his hobby evolved into a
useful skill — he soon found himself repairing missile launchers, aircraft remote interphase units and wiring assemblies.
In addition to speaking, Marc expressed that the content other presenters shared greatly helped his growth as a franchisee.
His impressive military career spanned 25 years, and took him all over the world, to the Middle East, Europe, Asia, South America and to 48 U.S. states. A few of his myriad accomplishments during that time include winning Air Transportation Unit of the Year in 2010 and being the second youngest in the state of Illinois to ever be promoted to the highest enlisted rank of Chief Master Sergeant E-9.
For more information:
*Contributed by the IFA Website: www.vetfran.com/veteranstoolkit-signup/
In May, Heuermann spoke at a daylong VetFran seminar at McDonald’s Hamburger University to share his perspective with the veteran attendees.
Franchising USA
v e t er a ns i n fr a nch isi ng
Page 61
V e t er a ns i n Fr a nch isi ng
COVER STORY
Baskin-Robbins Presents Fr anchise Incentives for Flavorful Fun Serving over 300 million customers each year worldwide, BaskinRobbins doesn’t just sell ice cream; it sells fun. Baskin-Robbins the world’s largest chain of ice cream specialty shops, Baskin-Robbins introduced incredible development incentives earlier this year for new franchisees and military veterans. Baskin-Robbins was founded in 1945 in Glendale, CA by two ice cream enthusiasts who shared a passion to create an ice cream shop that would be a neighborhood gathering place for families. Today, it is a globally franchised organization and one of the leading brands for hard serve ice cream in the Quick Service Restaurant (QSR) industry.
Franchising USA
Known for its famous “31,” which is still a part of the brand’s modernized logo, Baskin-Robbins began with 31 flavors, one for each day of the month. Today the brand’s slogan “More Flavors. More Fun.®” encompasses how the company has grown its flavor library to more than 1,000 different flavors including favorites such as Jamoca® Almond Fudge, Pralines ‘n Cream and Very Berry Strawberry. Baskin-Robbins’ first-class culinary team continues to develop even more delicious and fun flavors. This year, more than a dozen new flavors will be introduced and served up on the brand’s iconic pink spoons to taste buds around the world. At Baskin-Robbins, people of all ages can indulge in their favorite flavors served any way they want, making every ice cream experience an enjoyable one. As the largest national ice cream chain offering both
hard and soft serve ice cream, as well as creative cones, tasty toppings, customized cakes, specialty desserts, a variety of beverages and take home treats, it’s no wonder Baskin-Robbins has become “America’s Favorite Neighborhood Ice Cream Shop.” Baskin-Robbins has more than 7,000 operating units in nearly 50 countries; the U.S. is home to more than 2,400 of its restaurants. Keeping with original hometown philosophies and innovative thinking, executives at Baskin-Robbins continue to focus on franchisee profitability as a main driver of new products and platforms. The company reported total global franchisee sales for year-end 2012 as $1.9 billion. Today, the company is in the midst of a strategic national expansion and is seeking exceptional franchisee candidates to grow
“We believe in our veterans, and we know they make great franchisees for Baskin-Robbins.” the brand and share the irresistible treats to communities nationwide. The company’s current main focus has been on areas in California, Florida and Texas. Offering both single and multi-unit store development commitments, as well as opportunities to purchase existing stores for sale throughout the U.S., franchisees are able to choose from a variety of real estate concepts including end caps, in-line sites, kiosks, gas and convenience stores, and non-traditional retail environments. Non-traditional locations range from airports and hospitals to military bases and stadiums. Through combining strong unit economics and operational simplicity, Baskin-Robbins’ business model allows franchisees to enjoy convenient hours of operation, require minimal equipment, produce little waste, and benefit from a majority of inventory with a shelf life of up to one year with proper storage. Franchisees benefit from award-winning training programs and comprehensive operating systems designed to help build business. Geared to simplify operations, Baskin-Robbins’ franchise support team includes development and construction experts, operational support professionals, training managers and field marketing managers. Additionally, franchisees also benefit from the company’s 95 percent brand awareness and multi-million dollar national advertising program that includes integrated online and social media techniques and public relations support. With branding everywhere, even in markets without stores, the company continues to explore opportunities to increase brand awareness. A prime example of this is the Baskin-Robbins’ sherbet-flavored freezer bars, which are now available in grocery and convenience outlets throughout the country. A percentage of the profits from this product are given back to the franchisees through a national fund for initiatives and efforts throughout the year. Also, to drive guests
back into shops, the product’s packaging includes a cutout coupon for use at participating Baskin-Robbins locations. To become a Baskin-Robbins franchisee, the company requires liquid assets totaling at least $125,000 per restaurant and a minimum net worth of $250,000 per restaurant. Candidates must also have a passion for their local communities, a dedication to operational excellence and a love for ice cream. Now offering incentives for new franchisees, Baskin-Robbins has also introduced special incentives to help make business ownership a reality for U.S. military servicemen and women. For honorably discharged military veterans who sign an agreement in 2013 and timely develop shops, Baskin-Robbins will waive the 20-year initial franchisee fee (a $25,000 value), offer a zero percent royalty rate for the first two years, and reduced royalty rate years three through five. “We believe in our veterans, and we know they make great franchisees for BaskinRobbins,” Bill Mitchell, President of Baskin-Robbins, U.S. and Canada, and a former U.S. Army Captain says. “We are honored to be able to offer our military heroes these incentives, enabling them to own their own business and utilize their leadership experience and training to run a successful ice cream shop.” Baskin-Robbins’ fresh new store design puts the ice cream front and center, combining fun, modern visual elements
with the brand’s rich history of product innovation. Over the course of the next two and a half years, over 300 new and remodeled franchise locations are expected to debut the new U.S. store design, which feature LCD screen menu boards, bright and bold heritage walls, eye-catching “super graphic” artwork, pink spoon accents such as door handles, and an updated brand logo. “Baskin-Robbins is focused on growing the brand, and this fresh, modern look is the perfect complement to the business opportunity available to prospective franchisees,” Grant Benson, CFE, Vice President of Franchising and Business Development, Dunkin’ Brands says. “Together with both new and existing franchisees, we will continue to bring to life our slogan, ‘More Flavors. More Fun.’” Selling more than 13 million ice cream cakes in shops worldwide in 2012, BaskinRobbins was named the top ice cream and frozen dessert franchise in the U.S. by Entrepreneur Magazine’s 33rd annual Franchise 500® ranking. “Baskin-Robbins has been building a very solid foundation over the last several years with new product innovation and a strategic vision for the future,” Mitchell says. “With our updated shop design recently introduced and strong development incentives, we believe there’s never been a better time to become a Baskin-Robbins franchisee.” For more information: www.baskinrobbinsfranchising.com
Franchising USA
v e t er a ns i n fr a nch isi ng
Page 63
V e t er a ns i n Fr a nch isi ng
Mirza Tihic, Director of Program Support Services, Institute for Veterans and Military Families
Franchising and Women Veterans –
A Match Made in Heaven According to Institute for Veterans and Military Families analysis of employment data which examined demographics (e.g. age, gender and race) and its relationship to unemployment, younger (post-9/11) female veterans have higher unemployment rates than their nonveteran counterparts. These differences are even larger when we compare younger female minority veterans to their non-veteran peers; indeed, female Hispanic and African American veterans experience nearly double the unemployment rates of their female
Franchising USA
minority non-veteran peers. Consequently, the path of self-employment through entrepreneurship serves as an optimal solution for female veterans to overcome these challenges. In fact, recent data released by the U.S. Small Business Administration (SBA) estimates that 20 percent of veterans are currently looking to start, purchase, or partner in a small business start-up. Considering that franchising is one of the paths of business ownership, women veterans need to be aware of their capabilities and how their military skills and experiences translate well into the vocation of franchise ownership. Research confirms that women have been steadily rising in the ranks of franchise operators over the past few decades. One study found that 10 percent of all companies established between 1975 and 2000 were women-owned franchises. Five years ago, the International Franchise Association (IFA) estimated the
percentage of women operating franchises to be 25 percent – and that doesn’t include another 17 percent of the population where men and women operate franchises as partners. What is it about franchising that promises a great opportunity for business ownership and entrepreneurial growth for women veterans? Consider the entrepreneurial traits needed to be a successful franchisee, as compared to the skills and experience that the military has conferred to women veterans.
Entrepreneurial mindset: Academic research focused on the attributes characteristic of successful innovators and entrepreneurs highlights that high-performing entrepreneurs have in common strong self-efficacy, a high need for achievement, are comfortable with autonomy and uncertainty, and make effective decisions in dynamic environments. Across multiple studies, research illustrates that these same
attributes are generally characteristic of military service members and veterans. According to multiple studies commissioned by the SBA and others, military veterans are twice as likely as non-veterans to pursue business ownership after leaving the service, and the five-year success rate of ventures owned by veterans is significantly higher than the national average.
Affinity for hard work: Successful franchisees have a willingness to do whatever it takes to get the job done. This attitude is shown in their every action – putting in long hours, handling multiple tasks, etc. Have you been through boot camp? Have you been deployed? Have you lived through the transition to civilian life? Start to finish, the military experience is all about hard work and accomplishing the mission, and this attitude directly correlates with success as a business owner.
Strong people skills: Successful franchisees have excellent interpersonal skills and can effectively interact with their employees and customers. They use these skills to create loyalty, value and trust. Women are known to have strong networking and communication skills, and research studies focused on both military personnel and veterans indicate that the military service experience engenders a strong propensity toward an inherent trust and faith in coworkers and organizational leadership. Coupling their networking abilities and the fact that veterans assume high levels of trust, these attributes provide women veterans with great people skills, which can be leveraged in launching and sustaining a successful franchise.
Adaptability: Considering the number of franchises owned by women, one can say that the franchise industry is still a “man’s world.” On the other hand, women veterans served in a military that is dominated by men, forcing them to develop the ability and skills to navigate through such a culture and advance in rank and achievement.
“Women veterans need access to basic entrepreneurship training, though many are unaware of resources and services available to them.” Resilience: Potential women franchisees must not be afraid of failure, because they learn through adversity. Resilient individuals can successfully adapt despite adversity, overcome hardships and trauma, achieve developmental competencies, and excel in the face of harsh environments. Multiple studies have found that military veterans exhibit high levels of resilient behavior; that is, as a consequence of the military experience, veterans (generally) develop an enhanced ability to bounce back from failed professional and/or personal experiences more quickly and more completely, as compared to those who have not served. In order to combat unemployment challenges faced by women veterans, we need to provide them with more opportunities like franchise ownership, particularly knowing that they have what it takes to be a successful franchisee. Women veterans need access to basic entrepreneurship training, though many are unaware of resources and services available to them. The same is true for franchise opportunities, as there is little done to highlight the fact that franchise ownership makes business sense for women veterans. For example, both the SBA and the IFA provide numerous opportunities for veterans, from financial support, franchise fee reduction/waivers, mentoring, and much more. Additionally, the Institute for Veterans and Military Families has developed a suite of entrepreneurship training programs, with one specifically designed for women veterans. This program, known as Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE), was developed in cooperation with Syracuse University’s Whitman School of Management and the SBA office of Veteran Business Development.
Mirza Tihic
V-WISE brings together 200 women veterans at a time for conference-style training geared towards those who wish to start a business or those who already own one, and has graduated nearly 1,000 veterans since its inception. As a nation, we need to do a better job educating our women veterans about their strengths and how these strengths can be leveraged through entrepreneurship, particularly in franchise ownership. We all – private sector, public sector, veteran service providers, government, and others – need to step up and push the case that women veterans have what it takes to be successful franchise owners. If we don’t educate our women veterans about existing opportunities, we as a nation are failing to serve those who have served this nation. Mirza Tihic is the director of program support services at the Institute for Veterans and Military Families, where he administers a technical assistance program that connects veteran entrepreneurs with pro bono resources to help them launch and grow their ventures. For more information: Website: www.vets.syr.edu/
Franchising USA
v e t er a ns i n fr a nch isi ng
Page 65
V e t er a ns i n Fr a nch isi ng
Spot l ig h t o n V e t er a ns
Veteran Franchise I n i t i at i v e
Launch Equity Grant Program “More than 1,000,000 Veterans will be returning home over the next five years to a slow economy with limited employment prospects.�
Veteran Franchise Initiative (VFI) debuted recently at the MFV West Coast Franchise Expo in Anaheim, CA, to enthusiastic response from both Veterans and franchisors. Established as a benefit corporation, VFI was created to provide U.S. Veterans with equity funding grants, enabling them to secure business financing for the purchase of a franchised business opportunity. Independent business owners Richard Ashe of Veteran Franchise Centers, and Mary McKeown-Christie and Tracey Nelson of MMS::Maven Marketing Solutions formed the Veterans Franchise Initiative (VFI) in response to the issue of Veteran unemployment and to the challenges encountered by Veterans wishing to start their own businesses. More than 1,000,000 Veterans will be returning home over the next five years to a slow economy with limited employment prospects. According to the U.S. Bureau of Labor Statistics, 11.7 percent of Veterans are currently unemployed in the U.S., compared to 9.1 percent for the overall population. However, as multiple franchisors have discovered, most Veterans have the specific qualities that make great
Franchising USA
“The overarching goal of the organization is to raise a minimum of $1.5 million dollars per year to fund at least 40 Veterans annually.” franchisees, including discipline, initiative, leadership and teamwork skills. VFI was founded on the belief that qualified Veterans who have already given so much to our country should be given the opportunity to build a business – and to succeed. Veteran entrepreneurship is a win-win for both Veterans and for the economy, not only providing Veterans with a means to stability and dignity through entrepreneurship, but also stimulating their local communities. Although the SBA has defined loan programs such as the Patriot Express Loan Program, and many franchisors offer discounts, equity requirements remain challenging for Veterans when securing the business financing and startup capital necessary to obtain loans. The VFI equity grant program’s goal is to address this problem for as many Veterans as possible. Grants are made possible through sponsorships and donations from companies, groups and individuals, and through a series of special events at MFV franchise expositions The VFI program is the first private initiative of its kind, and directly addresses the largest hurdle for Veterans to overcome when starting a business; equity funding to secure financing. The overarching goal of the organization is to raise a minimum of $1.5 million dollars per year to fund at least 40 Veterans annually. Veterans are nominated by franchisors, identifying them as individuals who meet their qualifications and to which they wish to award a franchise, but encountering difficulties raising enough equity for the requisite loans to launch their new business. VFI will hold a blind drawing among the nominees for the grants at three MFV Franchise tradeshows across the United
States (Houston, New York, Anaheim) in 2014. The initial fundraising objective is to raise $100,000 by December 31, 2013 enabling VFI to issue grants to qualified Veterans in early February 2014 at the Franchise Expo South in Houston, TX.
Griffin Legal PLLC, MFV Expositions,
Multiple franchisors have offered to get involved with the VFI program through direct donations, sponsorships and fundraising campaigns. In addition to Veteran Franchise Centers and MMS::Maven Marketing Solutions LLC, foundational partners include
to visit the link below and contact VFI to
MaaSPROS and Fetch Graphics.
Companies, groups and individuals who wish to thank U.S. Veterans for their
service and assist them with meeting their minimum equity requirements are urged
discuss working together in this important effort. The more funds raised, the more Veterans VFI helps.
For more information: www.veteranfranchiseinitiative.org
Franchising USA
v e t er a ns i n fr a nch isi ng
Page 67
V e t er a ns i n Fr a nch isi ng
H o m e watch Ca r eG i v ers
Recruiting Veterans for Veterans are natural caregivers, and many are inspired to care by the same commitment to serve others that drew them to the armed forces. Homewatch CareGivers is a veteranfounded company that recognizes and values the leadership skills and unique challenges of veterans—both as home care clients and as franchise owners.
Paul Sauer, founder and CEO of Homewatch CareGivers International, served in the United States Army from 1963-1965 and in the United States Army Reserves from 1966-1967, in addition to training for service in a medical battalion. Although Sauer was not sent overseas to Vietnam, the war impacted him. “After I got out, my division went to Vietnam and some of my buddies didn’t make it back,” says Sauer. Sauer carried with him his commitment to helping others from the Army into the business world, motivating him to found
Homewatch CareGivers in 1976. Sauer credits his military training, among other things, with his success in business and believes other veterans will make ideal Homewatch CareGivers business owners as well. “I think veterans are invaluable as business owners because, when you’ve been in the military for several years, you’re accustomed to—and trained for—executing a mission, similar to an operational goal or objective every business needs or has,” Sauer explains. The ability to take on responsibility, ensure the safety and well-being of fellow soldiers, and to follow strict rules and regulations are qualities that translate not only to running a business, but also to succeeding in a profession that involves caring for other people. “One of the reasons people join the armed forces is that they are serviceoriented and compassionate,” says Sauer. “These qualities, embodied by successful service members, are also essential to successful business leaders, so the military experience is a great asset in the work place.” Of his own experience working with veterans, Sauer notes, “our success rate with veterans is very high and I think it’s partly due to what they’ve learned in the service.” For Sauer, Homewatch CareGivers offers an important opportunity to provide care for veterans, and he is proud to be able to offer help to those who have served our country. “There are a lot of aid programs
“As a non-commissioned military officer, I was taking care of and looking out for the health and welfare of soldiers and their families—now I’m doing the same thing, but for a different population.” Franchising USA
r Exceptional Home Care “Let our family care for yours.” and red tape,” he says of government assistance available to veterans. “If we can be a resource for those seeking support in navigating the system, it’s the least we can do to thank our veterans who have sacrificed so much.” Malcolm Junior, owner of Homewatch CareGivers serving the Texas areas of southwest Houston, Katy, Richmond and Sugarland, spent 26 years with the United States Army. During that time, he served on overseas assignments in Germany and Bosnia, and on various stateside assignments. Describing his time in the Army, Junior says, “throughout all of those missions, I was responsible for soldiers, for taking them out on a mission and getting them back to their homes safely.” After leaving the Army, Junior had a specific vision for the business opportunity and career path he wanted to pursue. “I was looking for a company that shared my values and beliefs,” he explains. Junior’s personal values were largely shaped by his experience in the Army, which demanded a high standard of performance and dedication to excellence. “When I read the Homewatch CareGivers mission statement, I very quickly realized that the organization is truly committed to providing exceptional home care,” an operational aim with which he identified because “in the military we were always taught to excel at everything we did.” There were also characteristics of a career in care giving that resonated with Junior. “The company’s mission statement focuses on ‘preserving dignity’ and military service is all about dignity, compassion, integrity, and commitment,” he explains. The similarities made the transition to civilian and professional life—difficult for some—less daunting. “What I’m doing with Homewatch CareGivers, it’s
nothing new,” Junior says. “As a noncommissioned military officer, I was taking care of and looking out for the health and welfare of soldiers and their families—now I’m doing the same thing, but for a different population.” Of his decision to start a franchise, rather than build a new company independently, Junior says that, after years of exceptional service, he “wanted to come out of the gate operating at a high level.” It seems as if he has done just that. A Homewatch CareGivers owner for four years, Junior has grown his business to employ 50 caregivers, some of whom have been veterans. In terms of caring for veterans, Junior says one advantage of his own veteran status is the ability to help veteran clients and their loved ones understand and access the aid programs available to them. He admits that this unique type of support can provide a competitive edge when the families of veterans are deciding amongst home care companies for their loved ones. For other veterans considering investing in a franchise business, Junior suggests that the skills and demands of the military can prepare one for success in owning a franchise. “This is very similar to being a leader in the military, constantly looking
to recruit great talent, identify those who fit into your corporate culture, and retain them,” Junior says, adding, “The only difference in the business world is that, while you are doing the same things that you’ve always done in the military, you are now doing them for yourself.” Ramona Streit, owner of Homewatch CareGivers serving Torrance, South Bay and other cities in California’s Los Angeles and Orange Counties, was awarded a contract with the Veteran’s Affairs (VA) Long Beach Healthcare System to provide in-home care for local veterans. In her seven years as a Homewatch CareGivers owner, Streit has served about 800 clients. Of her current clients, about 69 are veterans. While Streit has never served in the armed forces, her story is similar to Junior’s in that her personal experience drew her to a career in caregiving. Streit was influenced by witnessing firsthand the quality care her father received at the very VA she now frequents when visiting her clients. “My father served twenty eight years and is a veteran of World War II. I took him to the VA in Long Beach on several occasions, where I saw caring, compassionate doctors provide excellent medical attention, using
Franchising USA
v e t er a ns i n fr a nch isi ng
Page 69
V e t er a ns i n Fr a nch isi ng
H o m e watch Ca r eG i v ers
“This is very similar to being a leader in the military, constantly looking to recruit great talent, identify those who fit into your corporate culture, and retain them.”
the most up-to-date equipment,” Streit says. It was Streit’s familiarity with the local VA and her personal connection to the veteran community that motivated her to successfully pursue a five-year, five million dollar contract with the VA of Long Beach, which provides home care for veterans as part of their military benefits. Streit takes pride in having the opportunity to care for those who sacrificed so much for our country, noting that she often tells her clients, “It is our privilege to serve you for the service you have given us.” The military’s rigorous physical demands, as well as exposure to extreme environments and health risks, can pose
Paul Sauer is founder and CEO of Homewatch CareGivers International. A pioneer in the home care industry, Sauer founded Homewatch CareGivers in 1980, a network that has expanded under his leadership to 214 locations.
Franchising USA
some unique challenges for veterans and their caregivers. From physical conditions caused by chemical exposure —such as certain respiratory cancers—to the lasting psychological impacts of combat—like Post Traumatic Stress Disorder— Streit ensures that her caregivers are equipped to provide quality care for all veterans, regardless of their individual circumstances.
Paul Sauer is founder and CEO of
Streit also knows that successfully serving her veteran clients encompasses much more than assisting with everyday activities, household chores, and individual care needs. She has found that being a true partner and resource for the families of veteran clients is integral to her business and to Homewatch CareGivers. “Sometimes the families just need a break,” Streit says. “And they really appreciate the customized care and knowledge of the benefits system.”
and Sugarland areas, Texas. After
Homewatch CareGivers is truly committed to living up to its motto, “Let our family care for yours,” and dedicated to serving those who have served their country so honorably.
Malcolm Junior is the owner of Homewatch CareGivers of Southwest Houston, also serving the Katy, Richmond and Sugarland areas. After serving 26 years in the United States Army, Malcolm started his Homewatch Caregivers business in 2009.
Homewatch CareGivers International. A pioneer in the home care industry, Sauer founded Homewatch CareGivers in 1980, a network that has expanded under his leadership to 214 locations. Malcolm Junior is the owner of Homewatch CareGivers of Southwest Houston, serving the Katy, Richmond serving 26 years in the United States Army, Malcolm started his Homewatch Caregivers business in 2009. Ramona Streit is the owner of Homewatch CareGivers Torrance, South Bay and Los Angeles Harbor, Calif. Since launching her business seven years ago, Streit has served roughly 800 clients, many of who are veterans. For more information: Website: www.homewatchcaregivers. com/franchise Email: franchise@homewatch-intl.com Phone: (800) 472-2290
Ramona Streit is the owner of Homewatch CareGivers Los Angeles and South Bay Beach Cities. Since launching her business seven years ago, Streit has served roughly 800 clients, many of who are veterans.
Paul Joseph
Profile
“Veterans have the drive and determination that a lot of corporations look for, and they know we’re not going to stop until we get it done.” Growing up in Pass Christian, Mississippi, Paul Joseph attended the University of Maryland where he earned a Bachelor of Science in Business Management. After graduating and in need of a steady job, Joseph enlisted in the United States Army and soon after became a warrant officer. Serving seven years on active duty, in 1988 Joseph then enlisted in the Army Reserves. In July 1992, while still in the Reserves, Joseph gained employment working for the Department of Justice, with which he spent the next 20 years travelling the U.S. auditing federal prisons. During this time Joseph purchased a commercial cleaning franchise called Cover All, which he ran in the evenings while not on duty with the Department of Justice. After serving 24 years in the military and a total of 27 years with the federal government, in December 2012 Joseph retired from the Department of Justice to pursue his own dream.
Yogurt that caught his attention. “Richard told me they did kosher yogurt, and I’m a kosher kind of guy,” Joseph laughs Visiting EarthFruit Yogurt’s corporate team in Salt Lake City, UT, Joseph tasted the product and was hooked. “I knew it was the best yogurt out there,” he says. “The staff were great, the all-natural yogurt was the best quality and the store design was beautiful.” The low overhead, DIY service concept, and the company’s community involvement were also selling points for the brand. Attending a one-week training program, Joseph worked with the corporate team covering everything from how to operate the machinery and manage financial planning, to hiring procedures and daily operations. Signing his franchise agreement in December 2011 and lease for the Bowie, MD store in February 2013, Joseph’s store opened its doors on August 24, 2013. On October 19, 2013, Joseph, along with his 12 employees, hosted the store’s grand opening. For Joseph the most rewarding part of owning an EarthFruit Yogurt is being a part of the team and inspiring others. “My main goal was to create jobs and help the kids looking for employment. Working with the Department of Justice I’ve seen where a lot of young folks wound up if
they never had a job or finished school, I think one of the best ways I can give back is by showing them the right way to go.” Recommending franchising to veterans looking to start their own business, Joseph says veterans’ instilled self-discipline, selfmotivation, and little need for direction makes them great franchise owners. “We like to accomplish the mission and we know how important team work is,” he says, adding, “Veterans have the drive and determination that a lot of corporations look for, and they know we’re not going to stop until we get it done.” Joseph’s final thoughts to veterans interested in owning their own business: “Pursue your dreams, and don’t ever let anyone stop you. Look for something you’re compassionate about. To me, this is not a job, it’s fun because I like teaching people, meeting my customers, and providing them with the best service possible,” he says. “We’re here to serve others.” For more information: Website: www.earthfruitsyogurt.com/ franchise
While attending an IFA convention in Washington D.C., Joseph met Richard Ashe, President of Veteran Franchise Centers. Expressing his interest of operating his own full time business, Ashe presented Joseph with a variety of franchise options, but it was EarthFruit
Franchising USA
v e t er a ns i n fr a nch isi ng
Page 71
have your say
Unishippers, Wanda Sieber, Franchise Owner
Unishippers:
Working Towards Well
Wanda Sieber
Our employees are often living in the stressful world of URGENT AND IMPORTANT! At Unishippers, we work in logistics. When our phone rings, a business has a piece of freight moving today, or (even more urgent and important) a customer is calling us about a shipment that is not where they expected it to be right now!
“We feel strongly that pouring effort into workplace joy and wellness comes back through our staffers’ excellent work and creates an environment where happy people are glad to come to work each day.”
People who live in what we call “Q1” (referencing “Quadrant 1” from Stephen Covey’s The 7 Habits of Highly Effective People) are prone to experiencing negative effects from the inherent, ongoing stress. It was no surprise to me when our 2012 Employee Wellness survey came back with stress relief as one of the top three issues for our staffers. My husband Bill and I own three Unishippers franchises: Green Bay, Seattle North and Mobile Freight. We have 20 full time employees and five part time employees who work from our Green Bay headquarters in a 100-year old, 7,000 sq ft space. We already run a pretty wellness-focused office; we’ve invested in ergonomic chairs and desks and have, at employee request, converted about 30 percent of desks to standing desks. We also stock exercise balls as chairreplacements for the truly adventurous. The office is filled with the scent of fragrant candles, we have office cats for furry stress relief, and we keep a kitchen stocked with free, healthy food for all staffers. Our latest foray into increased
Franchising USA
llness wellness is our new activity desks: one treadmill desk and one desk that fits over an exercise bike. All of this earned us the Green Bay Area Chamber of Commerce’s Family Friendly Workplace award in 2013. We feel strongly that pouring effort into workplace joy and wellness comes back through our staffers’ excellent work and creates an environment where happy people are glad to come to work each day. Still, we work in Q1, so stress is an issue. To try to combat this, two years ago we hired a masseuse to give 15-minute chair massages to staffers. That was good, but there were no long lasting effects once the program ended. We’ve also done resultsbased contests, which included goals such as weight loss, lower blood pressure and increased activity, as well as a contest where we challenged Unishippers’ offices in other parts of the country to “Walk Across America,” tallying our steps to see who could meet their walking goals. This year, we wanted to focus on stress relief in a way that would teach ongoing coping skills to our employees. In an allstaff meeting, we asked associates to list the common ways people deal with stress. The list included the following activities: • Excessive TV • Drinking • Smoking • Drugs • Being crabby with loved ones • Over-surfing the web • Over use of social media
• Viewing online pornography • Eating too much • Retail therapy – running up the credit card We noted that although people are inclined to do these things when tired or stressed, these activities really don’t help to actually deal with the stress, but simply numb us to our situation. So, we then talked about three things that can effectively help us to deal with stress: exercise (preferably outdoors), yoga, and meditation. Following, we rolled out our eight-week company-wide stress relief program to encourage staffers to incorporate these activities into their daily lives. As a former yoga instructor, I was able to lead the entire staff on a 15-minute yoga flow. We first started with some “chair yoga,” which doesn’t look like much but is surprisingly effective and accessible to people of every age and size. Afterwards, I led a group meditation (following http:// kellymcgonigal.blogspot.com/2010/01/
new-guided-meditation-practice.html) and was very pleased when all staffers were quiet through the entire meditation. For many of our people, this was the first time they had ever meditated. We passed out self-generated packets of information describing the program. In the first week, we asked staffers to complete only two days of wellness activities. Each person could choose outdoor exercise for 15 minutes (walking, running, biking, or rollerblading), yoga for 15 minutes, or meditation for five minutes. The following week we asked staffers to complete three days of activities and the third week, we asked staffers to complete four days of wellness activities. During weeks four to eight we increased the duration of each activity until by week eight, we asked staffers to complete 40 minutes of outdoor exercise, 25 minutes of yoga, or 15 minutes of meditation for each activity day. The packet also reviewed the benefits gained from doing each activity and included seven links for free meditations
Franchising USA
have your say
Page 73
have your say
Unishippers, Wanda Sieber, Franchise Owner
“We have a wellness budget and we’re going to spend it each year to do things that help our employees live healthier, more balanced and productive lives.”
previous list, these actually work to handle stress. The list includes the following activities: • Exercise • Being out in nature
online and four links for free online yoga. Before starting, I had the program reviewed by Debra Butz, RN BSN, at Bellin Health’s Business Health Solutions. Debbie made one recommendation: rather than having our workers check off their activity days on a calendar, she encouraged us to create small tracking booklets for staffers to write down how they were feeling before and after their activities. The purpose wasn’t to show the immediate benefit of the exercise, but rather to promote the skill of self-awareness. Often times, adults go from waking to sleeping without ever asking themselves, “How am I feeling?” Having the tracker as part of the program would create a vehicle for staffers to check in with themselves and encourage awareness of what silent stressors they might unknowingly be carrying around. Since we understand it’s hard for people to stick to any new program, we provided two incentives: anyone who was able to meet the weekly commitment could choose from a fish bowl of 100 printed tickets.
Franchising USA
This generated some fun each week, even though the rewards were quite modest. Among the 100 tickets, 24 simply said, “Good Job! Keep it up!,” eight were for a free coffee or tea at our local coffee house, eight were for free lunch at one of three restaurants on Green Bay’s Main Street, three were for $30 Amazon gift cards, and one was for a $100 gift card. After the fishbowl was used at our weekly staff meeting, I dumped out the unused tickets and refilled the bowl with a set of new tickets with an identical breakdown. Additionally, we promised the whole staff a free Monday lunch if we had 80 percent of staffers participate during the previous week. This is an incredibly high goal, but I had already done the math on which staffers might abstain from the program, and I knew that it was a goal we could reach with strong effort. At the following staff meeting, we had everyone who hit their mark pick a ticket, then talked about a better list of stresscoping activities. People are less inclined to do these activities, but unlike the
• Yoga • Meditation • Breath work • Progressive muscle relaxation (PMR) • Doing a creative project • Time spent with loved ones (including pets) • Time spent in conversation • Journaling • Touch (we left it at that) • Music • Taking a bath • Reading for pleasure We also encouraged staffers to sign up for the weekly stress management newsletter available here: http://stress.about.com/gi/ pages/mmail.htm. We then discussed how to improve the likelihood of choosing from the second list as opposed to the first list. We reviewed the five steps outlined in this YouTube talk by Kelly McGonigal, based on her book, The Willpower Instinct. Although I taught these concepts in a discussion format, we forwarded this link
“Often times, adults go from waking to sleeping without ever asking themselves, “How am I feeling?” to the staff: http://www.youtube.com/ watch?v=V5BXuZL1HAg After all of this, our results were overall outstanding. One week, we reached 72 percent participation, but did not hit the magic 80 percent goal. I’m told that any time you can accomplish 50 percent companywide participation in a wellness program, that’s success, so I’m pretty pleased. I’m also pleased that even if people didn’t get to four days of activity in the later weeks, they still got in two or three days. We surveyed our staffers about the program when we were five weeks in and got the following feedback: • Participation motivators included stress reduction, weight loss, missing the walking that had previously been a part of the participant’s routine, and the support gained by doing something as a group. • Several staffers mentioned they appreciated seeing the effective versus ineffective coping tools lists and discussing them. • The majority of respondents noted they had used some or all of the information and links provided in the initial handout. Our goal was to give people access to tools they could use on an ongoing basis, not just for eight weeks, so that’s a successful outcome. • Two participants said their favorite part of the program was the requirement to go outside when walking. • While the majority of the participants used walking as their primary qualifying event, about half of respondents said they were also meditating, and three participants were also including yoga. Analyzing the results, we believe participation was high because the program directly addressed many of the staffers’ stated needs. It also aligned well with our office culture as we routinely
hold leadership meetings at a local park, do one-on-one meetings on the veranda, walk with staffers to nearby restaurants when we buy them lunch or need to have confidential conversations, etc. We believe in the benefits of being outdoors, even on workdays. When questioned about our wellness programs, I’m often asked, “What is your return on investment?” or “What do you measure to cost-justify your expense?” Long ago, we passed the need to answer these questions. We have a wellness budget and we’re going to spend it each year to do things that help our employees live healthier, more balanced and productive lives. Wellness doesn’t prove its worth on a spreadsheet, but as we counsel with our employees, they share with us the successes with anecdotes like, “My spouse is walking with me”, “I’ve lost ten pounds”, “We’ve started meditating together”, and “She said ‘I need a drink’ and I told her ‘You know, that won’t
really make you feel better.’” These are tremendous wins for us and for our employees’ families. Because of the several positive, potentially life-changing responses like these, we’ve decided that investing in wellness is smart business. Wanda Truttmann Sieber is the CEO of three Unishippers franchises - Green Bay, Seattle North and Mobile - which she owns with her husband Bill. Unishippers is an authorized reseller of UPS and a third party logistics company that offers businesses significant savings on LTL, FTL and airfreight shipping thanks to Unishippers’ partnerships and high volume with over 40 shipping providers. Personalized service, state of the art technology and routing of inbound freight are Unishippers specialties. For more information: Web: www.unishippers.com/index.html Email: wanda.sieber@unishippers.com Phone: 1-800-773-8545
Franchising USA
have your say
Page 75
f ra nchisee in action
COIT
COIT Cleans Colorado “I saw that something could be taken from its infantile stage and turned into something much bigger by following the processes correctly and doing the regimented follow through.”
Steve Peterson
“Whenever an opportunity came to me I always seemed to be more willing to jump into it than shy away from it,” Steve Peterson, COIT franchise owner says. From humble beginnings with his father’s dry cleaning business to running a COIT franchise regime expanding the entire state of Colorado, Peterson is more than pleased to be where he is today. However, Peterson’s interests did not
Franchising USA
always lay in the cleaning industry. Before being introduced to the COIT concept he was more interested in numbers and equations than he was customer service, which is why he studied Business Finance and Marketing at Colorado State University. Upon graduating with a major in the field, the savvy young Peterson began working for Johns Manville Corporations, a national sales organization for building materials. Employed with the finance department, Peterson quickly discovered that his motivation was fueled by being involved in running a small business versus parts of a large corporation. “I had a passion to see the whole picture and to be involved in the growth of the whole organization, and that was impossible to do working in a department of a large national company,” he says. Peterson’s involvement with COIT began in 1978. At the time Norman Peterson,
Steve’s father, owned and operated a small dry cleaning company. Interested in extending his services to include drapery cleaning but not a clue on how to go about the task, he began investigating the process and equipment required. Then, while flipping through the pages of a trade magazine one afternoon, he stumbled upon an ad offering training and courses in drapery cleaning. The business offering the course was in fact COIT. Attending the workshops he was introduced to the possibility of owning his own COIT franchise. Following up on the option, this is when Norman, a soon to be retiree, invited his son to come aboard and help grow the business. Buying their first COIT franchise, Peterson agreed to join in his father’s endeavor and attended the Discovery Day and comprehensive two-week training program offered in San Francisco, CA. “For the most part the training involved learning
all the COIT lingo and their way of doing things,” Peterson says. “I learned about the personnel of the business, the technicians, their processes of running daily routes, how it all tied into the computer software and how to use the software. I also learned about their daily and weekly reporting and how to interpret the information so to utilize it efficiently in our operations.” Adding the ten lines of cleaning services COIT offers to the small dry cleaning shop, today the Peterson’s original store poses as a production shop for all drapery and area rug cleaning facilities. All previous existing offices including the account and management team have relocated to a much larger building two blocks away. Purchasing a third building to act as their material warehouse for the brand’s restoration services and vehicle parking, “When I came aboard we had three vehicles, now we have around 85 vehicles,” Peterson says, emphasizing their incredible growth over the years. Peterson has since grown the company from the original single unit to acquire the entire state of Colorado, the major hubs being Colorado Springs, the Denver metro area, Boulder and Fort Collins. With the entire territory under his jurisdiction, COIT allows Peterson to select his own site locations based on population centers of his choice. Corporate then assists
in the set up of computer systems and communication networks. Having made the switch from the finance world into COIT cleaning, Peterson says that while his decision was partially based on his father’s proposition, the other selling point was his drive for a challenge. “I saw that something could be taken from its infantile stage and turned into something much bigger by following the processes correctly and doing the regimented follow through,” Peterson explains. “All that motivated me incredibly and I had quite a bit of energy in that direction.” Today COIT is the nations largest and most experienced cleaning company with over 60 years of practice through its corporate and franchise locations. Specializing in carpet cleaning, upholstery, drapery, tile and grout, air ducts, wood floors and natural stone services, as well as a 24-hour emergency restoration service, COIT provides its franchisees with the company’s proprietary software system to assist in ongoing training, as well as access to their strong support team, which Peterson notes, are “very pro-active.” Additional training and support is also available from the primary training center in San Francisco to all COIT franchisees and their employees. “There is an open avenue of opportunity in all the different
departments of COIT to either go back personally for additional training, or to send specific personal for specified training,” Peterson explains, noting that every facet of the company has it’s own extensive training process. Peterson’s franchise locations currently employ 120 individuals to service around 30,000 customers a year. The most popular service Peterson’s franchises perform is carpet cleaning, with air duct cleaning following closely behind. “The success we’ve had as a franchise in Colorado has been extremely rewarding and personally gratifying for the goals I’ve had in my life to grow a business,” Peterson says, adding the relationships he has established over the years with the COIT management team and long term employees has also been pleasing. Attending two annual COIT conventions a year, here franchisees have the opportunity to come together, interact and learn new practices from each other. “Seeing the organization grow personally in the lives of my employees makes me feel good about belong to the team,” he says. Quick to recommend the COIT business model to anyone interested in joining the industry, Peterson says COIT has a very strong, reliable way of doing things with top-notch customer service as their priority. “If someone wants to
Franchising USA
f ra nchisee in action
Page 77
f ra nchisee in action
COIT
“The success we’ve had as a franchise in Colorado has been extremely rewarding and personally gratifying for the goals I’ve had in my life to grow a business.”
get into a business where they know that
“You can be successful only to the extent
successful and grow, then COIT has a
company, learn the procedures, and adopt
through customer service they will be
great systematic process for maximizing by performing in such a manner,” he says. Well versed in the industry, the
most important advice Peterson has for
those intending to join a franchise is this:
Franchising USA
you’re willing to invest yourself into the the system, and stick with it!”
Carrying on his father’s legacy with a
solid management team in place, Peterson has plenty more free time now than when starting with the company, yet he still
chooses to remain actively involved on a daily basis. “I still get a lot of enthusiasm out of coaching and mentoring the team,” he says. “Quite often it’s a challenge keeping up with my bright associates, but that’s the best challenge I could ask for.” When Peterson isn’t working there are three notable activities he enjoys: golfing, playing classical guitar, and riding his motorcycle. Otherwise Peterson can be found spending time with his wife Janie, daughter Megan, son in-law Taylor, and two young grandchildren, Benjamin and Belle. “I love what I do, and I love the gratification I feel as a member of the COIT team, they really have become my second family.” For more information: Website: www.COIT.com/ Phone: Pat Saign, 800-243-8797 X108.
Page 79
SoLoMo Changes Everything
Here’s What Your Br and Must Do Now just saw on HGTV, and finding a local franchise that has exactly what she wants. Scenes like these happen millions of times daily, and if you’re a franchisor, they point to a huge change in how you connect with candidates, validate your marketing approach, and drive customers to your franchisees.
The Evolution of SEO
Jon Carlston
Picture this: It’s Saturday afternoon and the family is driving home from a soccer game. “I’m hungry,” cries one of the kids. Mom grabs her smartphone, taps on Google Maps, and discovers a pizza place around the corner – and her sister has given it a five-star review. “Kids we’re having pizza!” Or it’s a woman with an iPad on her lap, searching for window coverings she
SoLoMo is shorthand for the convergence of social, local and mobile technologies – and these elements are rapidly coming together to transform how we connect with and engage candidates and prospects. Mobile online traffic was up 125 percent from the first half of 2012 to the first half of 2013, according to the New Mobile Share Report from BrightEdge. The trend is accelerating as people are using their smartphones to actively seek reliable information about the world around them. But are franchisors keeping pace? Right now, only 48 percent have a mobilefriendly website, according to the 2013 SoLoMo Brand Presence Study, which surveyed more than 150 franchise brands.* The same study found that: • While 78 percent provide individual franchisee microsites, only 32 percent use local plugins on these microsites.
• While 78 percent have a Google+ corporate page, only 20 percent have integrated a Google+ plugin or link on their main site. • Less than one percent of brands surveyed have publicly responded to negative reviews. Clearly your fans are using the SoLoMo ecosystem to interact with each other, and the social channels are functioning as trust platforms, where people go for opinions and validation from their peers and experts. For the franchisor, it’s essential to realize that this change in consumer behavior impacts your marketing strategy in critical ways, beginning with the evolution of SEO. People are still searching online for your brand, but they are doing it less often from the desktop, and more often from a mobile device.
How to Be Found by Your Prospects Now Your brand must be findable on the apps that people use most often on their smartphones and tablets. These include Google Maps (linked to your Google+ page), Facebook, Foursquare and others. They are social apps, and they include peer reviews, as well as location-specific data that makes each of your outlets more findable – at precisely the moment when
Franchising USA
ex per t advice
Jon Carlston, Vice President, Social Development of Process Peak
ex per t advice
Jon Carlston, Vice President, Social Development of Process Peak
“Now more than ever, you must make sure that you have a consistent brand presentation on the reigning kings of social media, Facebook and Google+.”
the consumer wants to engage. The first takeaway is this: Now more than ever, you must make sure that you have a consistent brand presentation on the reigning kings of social media, Facebook and Google+. Here’s how: Facebook Locations (formerly known as Parent-Child) enables you to claim all of your brand’s listings, display them on a national map, and have them show up at the top of Facebook search results. You also gain control of content at the local level, so you can run promotions in a coordinated manner with your franchisees, who still maintain administrative access to their local page. Likewise, Google+ enables you to have a branded presence at the local level. Once you’ve claimed your listings, working with a partner who has access to the G+ API allows you to listen and publish content across your system. Once you claim your listings on Google+ and Facebook, how do you begin to manage your online brand presence? First, put yourself in the shoes of your typical customer. What does that first encounter with your brand look like? How does it feel? Is it easy to find your franchises? Or is it impossible? Is your brand everywhere, or nowhere?
Franchising USA
Beyond find-ability, from the customer perspective, it’s easy to see if your brand is “doing social” at all, doing it just because everyone else is, or if you’ve actually committed to becoming a truly social business that is using these channels to listen, engage and partner more closely with your customers to deliver value that they will rave about. Your brand experience is more important than ever. Pricing and performance data is easily available. As a franchisor you must carefully manage your brand presentation across your social channels, and that requires new levels of coordination between you and your franchisees. Whether you call it SoLoMo or the new age of the mobile web, the key is not to be caught flat-footed as your competitors sprint ahead. First and foremost, you must have accurate local listings on Facebook and Google, or people searching on their mobile devices, at the very moment they want to engage, will never even see your brand – and that would be tragic. * Source: 2013 SoLoMo Brand Presence Study, conduct by Process Peak for the Franchise Leadership and Development Conference
Jon Carlston brings years of executive leadership experience in the franchising industry in product management, sales, and training. As Sales and Customer
Service Director for Franchise.com, Jon produced revenues of $1.5 million annually through sales of advertising, electronic document disclosure, and other software solutions. Today he spearheads the continual refinement of Process Peak solutions, ensuring that the offering meets and exceeds the needs of franchisors and franchisees. A Google Certified Partner with access to the Google+ API, and exclusive facilitator for Facebook Locations for the franchise industry, Process Peak enables franchise systems to optimize their efficiency, effectiveness and growth, through innovative and cost-effective strategies and tactics in recruiting, marketing and operations. For more information: Website: www.processpeak.com/ Email: jon@processpeak.com
Page 81
Franchising 101:
Terms, Tr aits and Tools Part I I I Throughout this Franchising 101 series, I have discussed the basic terms associated with franchising and topics such as why consider buying a franchise, what to ask yourself before buying a franchise, and how to analyze the FDD and the franchisor.
This month’s article will discuss the final steps to becoming a franchisee, namely tips for negotiating with the franchisor, who to talk to, and acquiring financing. There are a disturbingly surprising number of franchise buyers who do no read the franchise disclosure document or franchise agreement before buying a franchise. These are the franchisees that are ignorant of the contractual obligations that they have committed themselves to and end up filing frivolous lawsuits later during their term or constantly are complaining that the franchisor is not doing something that can be easily explained by reading the franchise agreement. There are other franchisees that read through the franchise documents, but do not talk with a third party who is knowledgeable about franchising. After talking with many of these franchise buyers, I have found two reasons that people do not talk with their advisors. The first reason is that they feel there is nothing they could do about the franchise agreement anyway, and the second reason is that they do not have the money to hire someone to review the documents. Without stretching the truth, most franchise agreements can be negotiated to a point. Many franchisors will tell buyers emphatically that they do not negotiate, which many times will stop a buyer from talking with an attorney or CPA because
Franchising USA
ex per t advice
Jason Power, Senior Attorney, Shelton & Power LLC
ex per t advice
Jason Power, Senior Attorney, Shelton & Power LLC
“A general rule is that franchisors do not want to set a trend for future franchise buyers to negotiate dollars and percentages.”
they think the terms are set in stone. What many franchise buyers do not realize is that if they take a different approach that many of these franchisors will move at least a little. A general rule is that franchisors do not want to set a trend for future franchise buyers to negotiate dollars and percentages. This is because if a franchisor discounts a royalty fee, marketing fee, or the initial franchise fee that they have to disclose that negotiation in the FDD for future franchise buyers to see. This creates the trend that future franchise buyers want to get the same deal that the other buyer received, which has led many franchisors to have a “take it or leave it” mentality. They key to negotiating is to know what is most valuable to you and your situation. If leaving a business for your family is important then focus on those provisions. If you are interested in having a larger territory then think about the give and
Franchising USA
take that you can work with to acquire the larger territory which does not always mean paying twice the franchise fee for twice the territory. Everyone wants to pay lower fees, but that is not going to happen for most franchise systems. The second reason franchise buyers do not talk with advisors is that they feel advisors will cost too much. Before talking about cost, the first step is to know who your advisors are. Many of these advisors do not cost anything but time. Advisors consist of family, friends, franchise brokers, the franchisor, and franchisees, which cost no more than some time to call and maybe a lunch. There are those advisors that cost money such as accountants and attorneys, but looking at the overall investment for a franchise and the possible problems that could occur without someone helping, the cost of an attorney or accountant is minimal. When talking with friends and family, ask
them what type of business they think you should be in and then talk with them about the prospective franchise purchase. In most cases, friends and family know you better than you think and can give great suggestions. The other benefit to having friends and family on your side is that they give a support structure, someone to vent to on bad days, and people to celebrate with on good days. Talking with franchise brokers is a great way to learn about various types of franchises. Many franchise brokers will give you multiple franchise options to evaluate. These options can be very out of the box for your skillset, but could also be very well tuned to your personality type. Finally, the franchisor and franchisees are a great resource. During a Discovery Day there are opportunities to talk with the franchisor’s staff about different points and talking with franchisees will give any buyer the opportunity to learn about the
“Many franchise brokers will give you multiple franchise options to evaluate. These options can be very out of the box for your skillset, but could also be very well tuned to your personality type.” day to day life of a franchisee which can be a very valuable experience. The next types of advisors are the advisors that require payment. Accountants and attorneys are very valuable sources of information related to the franchise. Talking with accountants can help any buyer understand the financial performance representations of the franchise (i.e. the “how much do franchisees make” representations) and can help franchise buyers understand what their financial limitations are for the particular business, which we will discuss in more depth below. Having an attorney review the franchise agreements is a big step that a lot of franchise buyers avoid. When talking with an attorney about the franchise agreement, the key is to find an attorney that works in franchising. Most people see the franchise agreement as a contract, but what they do not know is that there are special rules that apply to franchising that do not apply to other areas of law. This means that yes, your business attorney could review the franchise agreement, but they may, and probably will, miss some of the areas that are interpreted under franchise law. Talking with an attorney does not need to be costly either. Most franchise attorneys, whether they charge a flat rate or hourly, will bill somewhere around $1,500 to $2,500 to review the franchise documents. This cost compared to many times a $100,000 or more franchise investment is a small price to pay to understand what the obligations of both parties are under the franchise agreement. Lastly, I want to discuss financing the
franchise purchase. When looking at financing, every franchise buyer needs to ensure they have enough money to not only cover the franchise purchase but also to cover their living expenses and employee salaries for anywhere from a few months to a year or more. Over the last several years, everyone has learned that acquiring financing has become harder, but what most people have not realized is that financing for franchise purchases has been better than most. The reason franchise purchases are getting finances are for the same reasons I have shown in this three part series why franchising is a great way to own a business. Banks and other lending institutions see the value within different franchises and many times can be given financial documentation from the franchisor to assist with the application process. There are alternatives to bank loans too. Companies have appeared across the U.S. to help people tap into their retirement accounts to finance their franchise purchase. Before approaching one of these companies, research them. When rolling over an IRA or 401k, there are many rules that must be followed to avoid penalties with the IRS, so be sure to thoroughly research the company before working with them. Researching franchise attorneys, accountants, or financial lenders can be very easy. With organizations such as the International Franchise Association, research can be done through their website to discover different advisors who focus on franchising. Additionally, with publications like Franchising USA, you
Jason Power
can find advisors who are at the forefront
of the franchise industry and want to help. It has been my pleasure to discuss the various aspects of buying a franchise
during this three part Franchising 101
series. Owning a business is a dream of many people and franchising is a great way to experience that dream while
still maintaining some protection from those hurdles that new businesses can experience. With the right team and
with some self-awareness of strengths,
weaknesses, goals, and desires, this dream can become a reality for every person. Jason Power has been helping entrepreneurs review and negotiate franchise purchases since 2009. Jason is a regular speaker at the International Franchise Expo, West Coast Franchise Expo, Franchise Expo South and various other franchise expos where he gives tips on how to analyze and negotiate a franchise purchase. Jason is a senior attorney with Shelton & Power franchise law firm. For more information: Web: www.SheltonPower.com. Email: Jason@SheltonPower.com Phone: 866-993-7262
Franchising USA
ex per t advice
Page 83
f ra nchisor in depth
L i t t l e Ca esa rs
Little Caesars: The Piz z a Empire
In 1959, Mike and Marian Ilitch launched Little Caesars in Garden City, Michigan with one location. Franchising since 1962, today the brand is the fastest growing pizza chain in the world* and the largest carry-out pizza chain in America. Experiencing significant growth in sales and store units between 2008 and 2012, the famous five-dollar HOT-N-READY®
Franchising USA
pizza has helped Little Caesars earn the title of “Best Value in America” for six consecutive years.** Mr. Ilitch, a former Marine and minor league shortstop for the Detroit Tigers, first became interested in the pizza concept while traveling the country with the Tigers. Recognizing the growing demand for pizza, originally a snack food introduced to North America by World War II veterans returning from Italy, Mike took the pizza path after an injury prevented him from continuing to play in the minor leagues. Leaving his athletic dreams behind, Mr. Ilitch and his wife pursued growing Little Caesars. Their hard work led to building a successful enterprise, which today includes ownership of the Detroit Tigers, the Detroit Red
“The fast-paced American li the HOT-N-READY® con ready when the customer is, Wings and Olympia Entertainment, which together employ thousands of individuals. Prior to Little Caesars, Mrs. Ilitch worked in the airline industry. Leaving her career to embark on a new path with her husband, whom she often referred to as her “Little Caesar,” with a combined $10,000 in savings, the couple opened the door to their first Little Caesars on May 8, 1959. “The pair complement each other; Mike is a dreamer with a lot of ideas and Marian offers a strong financial skill set,” Bob Mazziotti, Vice President of U.S. Franchise Development for Little Caesars says.
concept in 2004 brought even more national brand recognition, making Little Caesars a strong player in the market. “The fast-paced American lifestyle has fueled growth with the HOT-N-READY® concept, so we make sure we’re ready when the customer is, and today the customer is on the move,” Mazziotti explains, adding, “People don’t have time to be sitting around waiting for pizza to be delivered.”
ifestyle has fueled growth with ncept, so we make sure we’re and today the customer is on the move.” Moving away from the snack category and becoming a meal item in the early 1970s, today pizza nights are a celebrated event for families throughout the country. Little Caesars is serving up the dish with fresh, never frozen, mozzarella and Muenster cheese, dough made fresh daily in the stores and sauce made from California crushed tomatoes. Prior to 1979, Little Caesars offered a broad menu including pastas, chicken and fish. Later it began to focus on offering incentives such as two-for-one pizzas, affectionately known as Pizza!Pizza!®. The introduction of the HOT-N-READY®
Little Caesars franchisees are entrepreneurs who share a great work ethic and a desire to follow a proven system. Franchisees are involved in their businesses and local communities and come from all walks of life including military veterans, small business owners, and former employees of corporate America looking for a change. Ideal candidates are willing to develop a passion for ownership of their business and product, and are local to their community. “Whoever the candidate is, it’s important that he or she can develop a passion for what pizza is and what it brings to the community,” Mazziotti says. “There are a lot of families waiting for great pizza at a great value. If we can connect with a franchisee who has a passion for pizza and community, it’s a marriage made in heaven.” The process to become a franchisee begins with filling out an application and supplying supporting documents to establish eligibility. Upon receiving
the Franchising Disclosure Document, candidates can then start the due diligence process, speaking with existing Little Caesars franchise owners to learn about the performance of the business and the support provided to them. Attending a Discovery Day in Detroit is next. Here, candidates meet with key players, get behind the counter and experience firsthand what it feels like to be a team player. Once approved, franchisees make a deposit on the franchise fee, which enrolls them into a six-week training program that covers the basics on how to operate the restaurant, insights on human resources, finances, marketing, and everything else necessary to be a Little Caesars franchisee. “We want to be where the people are who crave value and quality pizza products, which is virtually everywhere,” Dan Ducharme, Director of Franchise Development explains. After their six weeks of training and as franchisees return to their market to seek out an appropriate storefront, corporate assists them in getting their site established. Leading up to the grand opening, the new franchisee will receive architectural support, help with a floor plan, marketing plans, and staff training. Ongoing training is also provided to franchisees and includes cash management skills and multi-unit supervision advice, among other things. The estimated initial investment required per franchise location ranges from approximately $221,290 to $653,540 for a
Franchising USA
f ra nchisor in depth
Page 85
f ra nchisor in depth
L i t t l e Ca esa rs
“There are a lot of families waiting for great pizza at a great value. If we can connect with a franchisee who has a passion for pizza and community, it’s a marriage made in heaven.” standard Little Caesars carry-out location. Stores in the higher end of the range are typically free-standing buildings, not strip center locations. Of course, costs vary on a variety of factors. (Item 7 of Little Caesars Franchise Disclosure Document provides additional information, including assumptions.) Through the International Franchise Associations’ VetFran program, Little Caesars also offers various discounts to military veterans on the franchise fee and equipment. Setting the company apart from its competition is its national advertising campaign featuring creative, attentiongetting commercials. “We have a great national program and we support it all with a local approach as well,” Mazziotti explains, adding that while franchisees are responsible for doing their own local marketing, corporate takes care of advertising at the national level, a factor that benefits franchisees. Franchisees also benefit from what the brand represents. “The key is who we are and what we offer. Being HOTN-READY®, we’re the best value in America, says Mazziotti. “We get involved with communities and when people see the quality of our products and the value we offer, it’s what makes us so appealing.” Giving back to the communities in which they do business is also important to Little Caesars franchisees. The Little Caesars Love Kitchen is one such initiative that helps them do this. A pizza kitchen on wheels, the Little Caesars Love Kitchen travels across the continental United States and Canada meeting the needs of the hungry, the homeless and disaster survivors. To date, the Little Caesars Love Kitchen has fed over two million people and an estimated 50,000 Little Caesars franchise owners and employees have volunteered their time over the years to support the
Franchising USA
program in the communities in which their stores do business. The Love Kitchen has played a part in providing meals to the victims and first responders at various catastrophes including the Oklahoma tornadoes, the Katrina and Sandy hurricanes, and Ground Zero in New York City. “We are where we’re needed,” Mazziotti says. “With the convenience of our product and unique initiatives, we do what no one else does.” In a new initiative to expand its growth into attractive rural territories, Little Caesars is now providing small town entrepreneurs with the opportunity to take the national brand into their communities. “We’re looking to expand into small town USA where families are waiting for a great value and a great pizza,” Ducharme, says. “When people are going to have a pizza night, it’s not going to be a regular dinner, it’s going to be a fun evening, a festivity, and it’s going to be special. When an area of any size has a good family base, it means it’s usually a good area in which to operate one of our stores.” The secret behind the company’s momentum is in both the product and the business’ simple system. These factors allow franchisees and their employees to
follow the model and provide great service to customers to grow their business.
Through witnessing smooth transactions and an effective business structure,
customers are often drawn to becoming
involved with the company and decide to own their own Little Caesars.
“The last decade has seen sales and store growth,” Ducharme says. “We’ve been
in business for the past six decades, our
business model is solid, we have ongoing
support for our franchisees, and we know the key points as to where and what to focus on in the future.”
* “Fastest growing pizza chain in the
world” based on the net number of stores added 2008-2012
** “Highest-Rated Chain – Value for the Money” based on a nationwide survey
of quick-service restaurant consumers
conducted by Sandelman & Associates, 2007-2012
For more information: Website: http://franchise.littlecaesars. com Email: usdevelopment@lcecorp.com Phone: 1 (800) 553-5776
Page 87
&RPH RQ GRZQ WR WKH %LJ (DV\ WKH ELUWKSODFH RI MD]] KRPH RI GHOHFWDEOH FXLVLQH DQG GXEEHG $PHULFD¶V PRVW LQWHUHVWLQJ FLW\ ZKHUH ,)$¶V $QQXDO &RQYHQWLRQ ZLOO WDNH SODFH
J=?AKL=J FGO
^gj l`] ^jYf[`ak] af\mkljq k hj]ea]j ]\m[YlagfYd Yf\ f]logjcaf_ ]n]fl
CONVENTION.FRANCHISE.ORG
Franchising USA
ex per t advice
Sarah Kulbatski, Director of JT Corporation
The Art of a
Franchise Agreem Too many potential franchisees literally fall in love with a franchise concept and skip important steps prior to purchasing a franchise.
As advisors, it is our role to ensure that our clients make sound decisions, and with all the information that is available to them, minimize the risks associated with the purchase of a franchise (and there are some), the whole while protecting the assets of our clients. A franchise agreement is what legally sets out the relationship between the franchisor and the franchisee in a business. It incorporates details such as how the franchise will be run, and what the franchisor’s role is in running the franchise. The agreement makes sure that the franchise will be run like all the other franchises under the franchisor’s brand name, and it also sets out how potential problems, which may arise, will be solved. Generally, franchise agreements are more favorable towards the franchisor, who is
“Anybody beginning or extending a venture that will consume significant resources of money, energy or time, and that is expected to return a profit, should take the time to draft some kind of plan.”
Franchising USA
ment
the person who will give the orders on how the franchises using its brand name should be run. Franchise agreements are tailored to specific situations and vary from franchise to franchise. It would be impossible to identify every term and issue that should be considered in every situation. However, by following the tips in this article, a potential franchisee should be able to form a rather complete portrait of a franchise network and the advantages and disadvantages associated with the purchase of a franchise from that network.
The main items which are addressed in most franchise agreements: 1. Keeping in line with the franchise operation manual: The franchise operation manual is the most important thing that the franchisee must have with them all the time. This is the book that should be looked at when the franchisee is not sure how to deal with a particular situation. It is copyrighted by the franchisor, and the franchisor can take legal action against the franchisee if he makes the contents public. Franchisees are obliged to follow any changes that have been made to the manual. 2. Proprietor’s remarks: This part of the franchise agreement deals with issues such as the brand name (how it should be used), the training, advising and other forms of support that the franchisee is entitled to, and the
types of marketing tools and methods of advertising that the franchisee is expected to use. 3. Explains how the contract will pan out: This part of the franchise agreement details the type of business relationship that the franchisor and the franchisee are going to partake in. This part of the agreement is extremely important and therefore, it is imperative that a potential franchisee read this carefully and make sure he/she understand every word of it before a franchise agreement is signed. 4. The advertising medium and related costs: The franchisor should clearly explain what types of advertising mediums should be used and/or are approved to be used, in advertising the goods and services of the franchise. There should also be a part in the franchise agreement that lays out the percentage of gross revenue that the franchisor expects the franchisee to spend on marketing the products and the brand name in the area. 5. Repair, upkeep and maintenance This part of the agreement specifies what types of repair and ‘aesthetic’ upgrade the franchisor expects the franchisee to carry out, after what period the franchisee is expected to do this, or when it is deemed necessary, for example, upon a further lease renewal for the location. This should also discuss things such as the paint to be used, the changing of décor design, including any art on the wall and furniture. Such obligations are generally dependent on the duration of the contract.
terms, listing the basic terms that may be included in a franchise agreement. The checklist should also identify many of the issues surrounding those terms that should be addressed, to help potential franchisees with what we call the “due diligence” of a franchisor. The franchise agreement and the operations manual often give us information about the philosophy and the management style of a franchisor. Franchisors, like people, have a philosophy with respect to the conduct of their business, on the role of a franchisee in a franchise network, on the responsibilities of a franchisee (employee, manager, business person), etc. This philosophy should conform to the philosophy and to the aspirations and expectations of a potential franchisee. It is a question of determining if both parties are compatible. While you can use the tips above to understand and review a franchise agreement, you shouldn’t sign it until you’ve discussed your options with your attorney. Make sure you can decipher every single word in the agreement before you sign the paper! Sarah Kulbatski is director of JT Corporation, a company specializing in franchise consulting and risk management. For more information: Website: www.jtfranchising.com Email: sarah@jtfranchising.com
Other matters that are generally looked at in franchise agreements also include the royalty fees, insurance to be signed up, other terms of agreements, terms of termination and any changes to the system of operations currently being used. Ask your advisor for a comprehensive checklist of basic franchise agreement
Sarah Kulbatski
Franchising USA
ex per t advice
Page 89
f ra nchising usa
International news! NAB FCA Excellence in Franchising Award Winners Honoured at Gala Dinner The Franchise Council of Australia recently honored franchising’s best and brightest at the NAB FCA Excellence in Franchising Awards Gala Dinner, presenting 15 awards to successful individuals and businesses. Optometrist franchise Specsavers took home two major prizes on the evening – Established Franchisor of the Year and Excellence in Marketing. Global Retail Director and GM for Australia and New Zealand, Derek Dyson, was very proud of the win. “To win Established Franchisor of the Year will mean an incredible amount to our partners who work so hard each day in their own businesses,” he says. Health and fitness franchise, Plus Fitness was awarded Emerging Franchisor of the Year, and Excellence in International Franchising went to G.J. Gardner Homes CEO Darren Wallis. “Our approach to international expansion isn’t just focused
on selecting the right location, it’s about finding the right people to grow the business and provide plenty of support and resources,” Wallis says. The ceremony also included the induction of a new member into the Franchise Hall of Fame – Denis McFadden from Just Cuts, along with the annual Contribution to Franchising award, which went to Derek Sutherland from HWL Ebsworth for his tireless work on the FCA Legal Committee. FCA Chairman, Michael Paul said the awards are a terrific opportunity to celebrate some of the amazing work being done in the franchise sector. For more information: Website: www.franchise.org.au Email: stephanie.wells@franchise.org.au Phone: 1300 669 030
The Franchize Consultants’ Find a Positive Outlook The Franchize Consultants’ October 2013 Franchising Confidence Index demonstrated a general trend towards improvement in confidence across overall sector growth drivers. • The latest results indicated positive franchisor (net 41 percent) and Service Provider (net 50 percent) sentiment toward general business conditions – albeit slightly less so than the previous quarter. These results were shared by the latest results of other more general business surveys.
• Both franchisors (net 50 percent) and Service Providers (net 79 percent) were positive about prospects for franchisor growth. Service Providers remained more positive than franchisors, further
Franchising USA
building upon their already positive sentiment in the previous quarter (67 percent). • Franchisors sentiment toward access to financing dropped from a positive nine percent to zero percent, Service Providers are more positive than franchisors at a net 14 percent. • Franchisor sentiment toward access to suitable franchisees deteriorated this quarter, to a notable negative net 13 percent, from a positive nine percent the previous quarter. Service Providers, meanwhile, were more optimistic at a net 29 percent. • Confidence in access to suitable staff improved slightly. Franchisor sentiment
grew from three percent to nine percent.
FRANCHISING SENTIMENT REM
• Franchisor sentiment towards access to suitable locations rose from 13 Franchising Franchize Consultants’ Julynet 2013 percent to 19 percent. Confidence Index demonstrates continued elev optimism many key growth drivers, as • Franchisor andacross Service Provider reported by responding franchisors and Service sentiment towards future franchisee salesProviders. levels remained at a high level. Franchisors were most positive abo Franchisors’ at a netto53franchisor percent and improvements growth prospects, Service Providers a net 50 general percent.business conditio levels per franchisee, and franchisee profitability levels. • Franchisor confidence in franchisee operating costs remained negative Thethis latest results highly16 positive franch during quarter at indicate a net negative (net 50%) and Service Provider (net 67%) sentim percent. toward general business conditions. These elev • Sentiment toward future franchisee results were sharedpositive by the overall. latest results of oth profitability remained (net 59% in July), ANZ Business Outlook (53% in For more information: surveys. Website: www.franchisingconfidence.co.nz Notably, none of the 32 franchisor respondent next 12 months.
Social Media Business Boosters Look to the US for Partnership “Right Product, Right Place, Right Time” is the advice from the experts for Australian, Social Media Business Boosters to expand and consolidate its position as the world’s leading social media marketing franchise company. “It’s thrilling to think how far we have come in less than two short years,” franchisor Max Collins says. “I remember not that long ago we had to convince prospective clients why they should include Social Media in the marketing budget. Today we are the ‘go to’ social marketer in our country simply because we offer organization, structure, national representation and results.” From tiny beginnings, SMBB has quickly grown to have franchisees across Australia, serving business, governments, events management, non-profit, sporting bodies and individuals. Reaching into the American market will allow SMBB to extend their model and services they provide for social media management, social marketing, social customer service, social
training and selling. It will also allow the business to significantly expand its global support network, while continuing to innovate the services their clients use and trust. The SMBB mantra is to empower its franchisees to reach global markets for clients using social media – to help them connect, inform, and manage reputation like never before. This growth gives SMBB additional resources to expand quickly and strategically into International markets, and deliver on its vision around the world. The franchise is seeking a dedicated U.S. partner to build the brand and continue to deliver. For more information: Website: www.socialmediabusinessboosters.com/
U.S. Department of Commerce Grants Trade Fair Certification The U.S. Department of Commerce has granted Trade Fair Certification to The British & International Franchise Exhibition, the UK’s leading international franchise event, organized by Venture Marketing Group (VMG). The British & International Franchise Exhibition will take place at London’s Olympia on March 14-15, 2014. “CSUK proactively supports U.S. franchisors seeking to enter the UK market and is looking forward to working with VMG,” Chrystal Denys, Commercial Specialist at the U.S. Commercial Service U.K. says. “VMG’s portfolio of exhibitions are held exclusively in association with the British Franchise Association. This will mark the beginning of a closer relationship between the U.S. and the UK franchise industry.” The Commercial Service will promote The British & International Franchise
Exhibition to American franchise systems looking to enter the UK market. Their domestic network of over 100 U.S. Export Assistance Centres, as well as members of the Global Franchising Team, will work in partnership with VMG to raise the profile of opportunities within the buoyant UK franchise market to American brands looking to expand internationally through franchising. VMG’s relationship with the US CSUK is part of a wider strategy to develop and grow The British & lnternational Franchise Exhibition. This important development will provide a real benefit to all UK franchisors with the additional well known US brands attracting more visitors and aspiring franchisees from across the spectrum, including high net worth investors. For more information: Email: ChrisLewis@clareville.co.uk Phone: 020 7736 4022
Franchising USA
f ra nchising usa
Page 91
FRANCHISING USA is part of the global network of CBG Publishing
With 30 years experience in providing high quality business information, with a particularly strong focus on franchising, our global presence allows opportunity
I N E M A G A Z
T H E
VOL 08 ISSUE
01 NOVEMBER
F O R
H I S E E S F R A N C
AUS TRA LIA
2013 / DECEMBER
Franchising U S A THE MAGAZ INE
LAN D and NEW ZEA
2014:
FOR FRANC HISE
FRANCHISI
E S F R A N C H I S E
w w w. c a n a d i a n f r a n
chisemagazine.co
U N D E R S TA N
ING IS FRANCHIS FOR YOU?
MO BIL E FRA NCH ISIN G
NG
DING
INSURANCE
FRANCHISE TEAMWORK
W H AT K E E P S
yle
st America’s Cup
ADVI CE TOP LAWY ERS’
LATES T NEWS
FRANCHISORS
FINAN CIAL ADVIC E FROM THE BANK S
U P AT N I G H T? TOP LAWY ERS’ ADVIC E
5
FINA NCIA L CON VERS ATIO NS FOR FRAN CHIS EES
TAP INTO SUCCESS
FOX AND FIDD LE
SUPPLIER FORUM
LATEST NEWS
FROM THE BANKS FINANC IAL ADVICE
TOP LAWYE RS’ ADVICE
Visit www.franchisingusamagazine.com to find out more Franchising USA
m
FEATU RE ARTIC LE
WITH
VE STAY COMPETITI
THE BANK S ADVI CE FROM
F O R
WOME VETERANS N F R A N C H I S I NI N G
HOW TO
FINA NCIA L
M A G A Z I N E
T H E
FLAVOR!
BUILDING LANDSCAPING
(NZ) inc. GST.
NOV 2013
ngusamagazine.com
FEATURE&
S LATE ST NEW
VOL 02, ISSUE 01,
$5.95 www.franchisi
LOOKING AHEAD
$4.95 (AUD), $6.95
ES
$5.95
CANADIAN
VOLUM E 1 ISSUE 3
for international franchise marketing solutions.