Franchising USA - October 2013

Franchising usa The magazine for franchisees $5.95 www.franchisingusamagazine.com

Issue 12 - oct 2013

Four Businesses, O n e C u lt u r e

10 Tips

to H e l p Yo u r B u s i n e s s Th r i v e

Making it

Mashable Right for You?

I s a H o m e - B a s e d F r a n c hi s e

LATEST NEWS

FINANCIAL ADVICE FROM THE BANKS

TOP LAWYERS’ ADVICE

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Franchising usa The magazine for franchisees

FRANCHISING USA VOLUME 1, ISSUE 12 october 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: Outdoor living Brands

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 “Life starts all over again when it gets crisp in the fall.”

- F. Scott Fitzgerald Entering a new season is the perfect time for new beginnings. Witnessing Mother Nature’s transformation from green to gold, hope is in the air, creating the perfect opportunity for adopting a fresh new perspective and getting your goals into gear.

As you watch the leaves change color and enjoy the crisp breeze I encourage you to look deep within and find what career it is you really wish to pursue. For those of you looking to start your own business and become part of a franchising system, decide what it is you love to do, and find a business in that field which caters to your needs and wants. This October issue of Franchising USA has been designed to provide you with all the tools and knowledge you will need to pursue your dream job.

In this issue industry experts, individuals who have been there and know what works, fill in the blanks to questions not often addressed such as, “how important is a big brand name,” and “why attend a trade show.” Our feature story brings to light questions to consider when deciding if a home-based franchise is right for you, and the Franchisor in Depth articles feature stories of businesses that are also pursing new endeavors and celebrating remarkable milestones. Like you, these entrepreneurs had to take a chance and

dared to be great. From shipping services to transforming personal living spaces, these individuals defined their dream, found their drive, and didn’t look back.

This month’s Women in Franchising feature shares the story of a remarkable women, Linda Searles, who faced the odds and proved to herself and many others that despite the odds she was able to beat the norm. Linda’s sole motivation: her belief that she could succeed. Our Veterans Supplement offers tips for transitioning from the military world back into the civilian work force, stories from experienced veterans who have found new beginnings in the franchise force, and advice on what to consider when deciding if franchising is fit for you.

As you read through this month’s issue I hope you find the drive to pursue your dreams and welcome new changes, so that you too can write your own story. Your future is in your hands; do something remarkable.

Don’t forget to stop by our booth, 671, at the Anaheim West Coast Franchise Expo from October 24-26 for your free magazine subscription.

Wishing you a 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

Contents

october 2013

On the Cover 86 Making it Mashable

10 Cover Story

Outdoor Living Brands: Four Businesses, One Culture

18

10 Tips to Help Your Business Thrive

In Every Issue 06 Franchising News Announcements from the industry

39 Feature Article

Home-Based Franchises 52 Women in Franchising

Linda Searles, Baby Power, Forever Kids

Andre Kay, Sociallybuzz

39 Is a Home-Based Franchise Right for You? Peter Casey, International

Franchise Professionals Group

80

76

Peter Knight & Kate Groom, Smart Franchise

32

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39

Franchise Focus 21 Soccer Shots

Franchise Profile 30 COIT

Spotlight on Service 46 Tutor Doctor

Franchisor in Depth 24 The UPS Store 36 Granite Transformations

Have Your Say 32 gatherDocs 74

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Pak Mail Centers of America

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Expert Advice

18 10 Tips to Help Your Business Thrive Peter Knight & Kate Groom, Smart Franchise

28 Is a Big Brand Name Important?

Daniel Brunell, Dearborn West, LLC

30

14 Driving the System: How Franchisees Can Fuel Their Own Success Dan Martin, IFX Online

44 YouTube Marketing: The Power of Online Video Kelly Maguire, Digital Strategy

50 Implementing Change in Franchised Restaurant Systems Ned Levitt, Dickinson Wright, LLP

18

34 The Necessity of a Business Plan Sarah Kulbatski, JT Corporation

72 Franchisee Tenet Checklist: Look Before

You Leap Into a Lease Terrence Dunn, Einbinder & Dunn, LLP

76 Private Equity Firms Target Franchisors Scott Hausmann, Francorp

80 Take a Trip to a Trade Show!

Lynne Shelton, Shelton & Power, LLC

82 Franchising 101: Terms, Traits and Tools Jason Power, Shelton & Power, LLC

88 Leasing Space: What Your Franchisor May Not

Be Able to Do For You Jeff Grandfield & Dale Willerton, The Lease Coach

80

86 Making it Mashable Andre Kay, Sociallybuzz

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what’s new!

BAR LOUIE ANNOUNCES AGGRESSIVE FRANCHISE EXPANSION Business Opportunities Available Across the United States Bar Louie, a neighborhood bar and eatery known for its handcrafted cocktails, local brews and craveable food, recently announced it is in the midst of an aggressive expansion. The company is experiencing 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.

“This is an exciting time for Bar Louie as we are experiencing growth at an exceptional pace,” said John Neitzel, Chief Executive Officer of Bar Louie. “We believe this success can be attributed to our proven 50/50 bar-restaurant business model that encourages multiple customer visits throughout the day, and truly differentiates our brand from competitors.”

With more than 70 Bar Louie locations across the country, the

company is seeking experienced multi-unit foodservice and retail operators with a passion for the industry and a commitment to daily operations. Bar Louie franchisees can expect their initial investment to range from approximately $410,000 - $3 million.

This year the company was named to Nation’s Restaurant News’ 2013 Breakout Brands and Top 10 Newcomers lists. The company was also awarded the 2011 Cheers Beverage Excellence Award for “Best Chain Overall Beverage Program.”

For more information: barlouieamerica.com/franchise.

Edible Arrangements® Honors Top Performing Franchisees at Eighth Annual Convention Edible Arrangements CEO Tariq Farid recently recognized Ron and Lori Taylor of Youngstown, Ohio, as North America Franchisees of the Year (owners of five franchises), while Emre Aydin (Master Franchise Partner) of Istanbul, Turkey was named International Franchisee of the Year.

• President’s Award -- Ron and Cecilia Bolar of Dallas, Texas, received the award personally created by Farid

to recognize recipients who are true evangelists for the brand on a daily

basis. The Bolars have franchise stores

in Tyler, Cedar Hill, Mansfield and Fort Worth, Texas.

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• WOW Award -- Ben and Amanda Hiner of Louisville, KY., received the prestigious award recognizing a franchise partner that continually WOW’s guests and the corporate office. The Hiners own five Louisville franchise stores and another in Clarksville, IN. • Manager of the Year -- Shakera Brown of Youngstown, OH. Brown manages franchise stores in Youngstown and Hermitage, PA. “The growth and success of Edible Arrangements® would not be possible without our dedicated and passionate franchise partners,” Farid said. “It is an honor to recognize those that have

excelled over the past year, but it is really a testament to the strength of our network.

Many of these decisions were very difficult, as numerous franchise partners were considered in each category.”

For more information: http://www.ediblearrangements.com

Soccer Shots Global Goals Launches 2013 Campaign Each year, Soccer Shots franchise owners join together to support the non-profit arm of the company, Global Goals.

Global Goals was born out of a vision that the Soccer Shots franchise community could join together and provide opportunities for growth to disadvantaged children, through soccer, across the U.S. and around the world.

In 2013, Global Goals fundraising was redirected toward the U.S. Soccer Foundation’s annual Urban Soccer Symposium. The Symposium brings together coaches and leaders from across the country who are making an impact in their communities through the game of soccer. In many of these communities, a child’s involvement in a local soccer program is the only alternative away from gang violence and drug or alcohol abuse.

“When the U.S. Soccer Foundation first approached Soccer Shots about the need for Symposium fundraising, we knew right away this was a no-brainer decision and made the commitment to extend our reach to the kids who need it most,” explained Global Goals Committee Chair, Annie Ferret.

During the month of October, Soccer Shots franchisees across the country will host National Clinics that serve as fundraisers for the Global Goals effort. During the Clinics, children will participate in a Soccer Shots session, parents will get to be a part of the fun, and there may be opportunities to meet some of the local leaders who are a part of the Urban Soccer Symposium.

For information about a Global Goals National Clinic near you, please email: annie@soccershots.org.

Primrose Schools Plans to Double in Units to Meet Educational Demand New York and California, the 270-unit child care franchise provides financial incentives to qualified prospects who sign franchise agreements before December 31, 2013.

With more and more families across America looking for high quality educational childcare, Primrose Schools is on track with expectations to double in size in the next five to seven years to meet this demand.

In order to spur growth throughout new and underserved markets, including

Chicago, Washington, D.C., Boston,

“We are looking for franchise owners who are passionate about making a positive difference in their communities and committed to our brand promise: to deliver the best and most trusted early childhood education and child care services for families across America,” said Chris Goethe, Vice President of Franchising for Primrose Schools. “Many of our franchise owners are parents themselves who struggled to find adequate care for their own children and understand the immense demand for quality, educational child care services. They’ve worked in the corporate world and sought out Primrose to find a

more rewarding career.”

Unlike a typical daycare franchise, Primrose Schools are education-

based, offering the exclusive Balanced Learning® curriculum that addresses

multiple aspects of growth and learning – social-emotional, cognitive, creative and physical skills – with a special emphasis

on character development. The Primrose

Schools Education Advisory Board works to continually improve every aspect of

the care and education Primrose students receive, and helps Primrose achieve

service excellence to meet the growing

demand for quality early education and childcare in America.

For more information:

http://www.primrosefranchise.com/

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what’s new!

British Swim School Dives Into International Waters British Swim School is proud to announce their first international franchise in Turkey.

methods are based on teaching beginners

Franchising since 2011, by the end of 2013 the company will have 20 franchised markets operating in over three dozens pools throughout the United States.

Requiring no pool construction and an investment as low as $40,000, British Swim School franchisees can be operating in less than 90 days.

skill of all. This enables all swimmers

Dedicated to teaching water survival for over 30 years, British Swim School’s

of all age groups that the ability to float on their back is the most important survival to rest, breath and call for help, thus

alleviating the “silent” danger of floating

British Swim School is a rewarding

Rita Goldberg, has worked continuously

ongoing support, as well as a path for

methods resulting in the ability to teach

overhead. To learn more about British

over onto their backs. Our teaching is a

Website: www.britishswimschool.com

face down. British Swim School founder,

franchise that provides full training and

to develop, improve and fine tune these

expansion and revenue growth with low

babies as young as three month old to roll

Swim School franchise opportunities visit:

gradual, gentle and fun process.

Email: franchise@britishswimschool.com

SOLAR UNIVERSE BECOMES TOP PLAYER IN WITH ACQUISITION OF GEN110 Acquisition equips Solar Universe with the ability to drive growth in new franchise markets.

Solar Universe, the leader in solar franchising, recently announced it has acquired Gen110, one of the nation’s leading distributed electricity companies and a pioneer in direct sales.

This acquisition allows Solar Universe to utilize the powerful sales capabilities developed by Gen110 – providing a unique, low cost way of acquiring customers without expensive marketing campaigns. As Solar Universe continues to evolve in the solar industry, the addition of Gen110 will provide more opportunities to reach a wider range of customers with a cost-effective and proven method.

“Gen 110 is a terrific complementary asset to our core business,” said Joe Bono, CEO and Founder of Solar Universe. “Our business has always been based on arming our franchises with the best customer acquisition tools. The addition of Gen110 allows us to develop new offices with great speed and lower cost than ever before.”

This acquisition comes as the company continues to grow at an impressive rate. Last August, Solar Universe unveiled a new online design center to simplify and expedite the solar sales

Franchising USA

experience and recently added Long Island to their exceptional list of franchises.

“Our vision is that one day every home will produce on-site electricity, so combining our sales expertise with the installation know-how of Solar Universe is a very exciting prospect,” said Jason Brown, Co-Founder and CEO of Gen110. “We’re looking forward to working with Solar Universe and providing homeowners with a more seamless path to getting cleaner and cheaper electricity.”

For more information: www.solaruniverse.com

PEARLE VISION UNVEILS NEW STORE DESIGN Leading Optical Franchise Celebrated with Ribbon-Cutting Ceremony.

Pearle Vision, one of North America’s largest and most trusted licensed optical brands, recently unveiled its new store design with a ribbon-cutting ceremony at the Legacy Village center in Lyndhurst, Ohio.

The new Cleveland eye care center features a completely remodeled design, which includes everything from a new, iconic brand logo and signage to modernized displays and a completely transformed floor plan.

“For more than 50 years, Pearle Vision has been committed to providing genuine eye care to our patients; and now, in 2013, we are proud to unveil the first of our newly designed neighborhood eye care centers,” said Srinivas Kumar, Senior Vice President and General Manager, Pearle Vision. “We are excited to share the new design elements with our entire network, and believe that everyone will love the new look and feel of our center, which incorporates our rich history, provides a welcoming atmosphere, and features eclectic displays and modern retail space.”

Earlier this year, Pearle Vision unveiled the new brand image with an updated logo and re-designed color palette for its centers.

Accompanying the new logo and signage is “Est. 1961,” a tribute that reinforces the company’s commitment to a 50-year legacy.

Current Pearle Vision licensees will have the opportunity to incorporate all or some of the new design elements into their existing centers.

Today Pearle Vision has more than 610 centers located throughout North America, and is seeking to grow its national footprint with development opportunities in markets nationwide.

For more information: www.pearlevisionfranchise.com.

IFA Names Seven Franchise Leaders to its Board of Directors Franchise business leaders from companies representing the wide scope of franchise businesses were recently elected to the International Franchise Association Board of Directors during the September Board of Directors meeting in Washington, D.C.

strengthened thanks to these dedicated individuals and their board peers.”

The new Board members will assume their positions at the conclusion of the 54th IFA Annual Convention in New Orleans this upcoming February.

• Kathleen Gilmartin, President and CEO of Interim Healthcare, Inc.

“The franchise industry will benefit from the caliber of broad experience these seven franchise professionals are willing to share with the industry and IFA,” said IFA Chairman Steve Romaniello, CFE, Roark Capital Group Managing Director and FOCUS Brands Chairman. “Our mission to continue to protect, enhance and promote franchising is greatly

The new IFA directors are: • Michael J. Archer, President of Applebee’s Services, Inc.

• Jerry Crawford, CFE, President of JaniKing International, Inc.

• Peter D. Holt, President and CEO of Tasti D-Lite, LLC • Saunda Kitchen, CFE, multi-unit franchisee of Mr. Rooter Plumbing

• Guillermo Perales, President and CEO of Sun Holdings, LLC

of excellence, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchises, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy.

For more information: www.franchise.org

• Andrew F. Puzder, CEO of CKE Restaurants Holdings, Inc.

The IFA is the world’s oldest and largest organization representing franchising worldwide. Celebrating over 50 years

SUPPLIER Franchising USA FORUM

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O u tdoor L iv ing B ra nds

F o u r B u s i n e s s e s , O n e Cultu r e :

Outdoor Living Bra “The vision behind our strategic plan was to assemble a family of related outdoor living orientated businesses under one common umbrella franchise support organization,” says Christopher Grandpre, Chairman and CEO of Outdoor Living Brands.

Outdoor Living Brands (OLB) is the parent and holding company for four separate franchise businesses, all of which share similarities in both their operating models and their customers’

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demographic and psychographic profiles.

Through acquiring each business from its founders, the commonalities between the four means that a customer of one brand generally also fits the profile of customers of the other brands. This not only creates the opportunity to cross promote and cross-refer the other businesses, but also provides diversification opportunities for franchisees so as they build a business with one brand, they have the option to open multiple territories with that brand, or to add additional brands to their local operation.

A former merger and acquisition investment banker, Grandpre’s previous career was in selling privately owned businesses to private equity firms and strategic players. Transitioning from the banking world into a leadership position with Archadeck in 2006, Grandpre, who initially acquired a minority stake in the Archadeck business from the founder, took

on responsibility for bringing fresh energy and ideas to turn it around after a period of challenges.

“When I looked at the business as an investor and potential leader, I really liked franchising as the business format,” Grandpre says. “I also liked the sector Archadeck was in and the consumer trends behind outdoor living.” Explaining that homeowners have a desire to add cost effective, attractive outdoor living space to their homes in ways which fit the architectural style of the home, the topography of the land, and the landscape, Grandpre says, “We wanted to continue to grow Archadeck, but we also wanted to diversify and transition from being a single branded franchise company into a multi-branded company.”

In 2008, OLB was formed to serve as the acquisition vehicle and parent company for multiple franchise businesses. The first acquisition completed by OLB

ands was obtaining control of Archadeck from the original founder. Archadeck specializes in designing and building aweinspiring outdoor living spaces. Catering typically to residential homeowners, their franchisees design and build decks, hardscapes, outdoor kitchens, outdoor fireplaces, and other backyard features to extend the functional living space of their home.

The second business acquired was Outdoor Lighting Perspectives in late 2008. A full service landscape lighting business, Outdoor Lighting Perspectives designs, installs and maintains custom lighting to home facades, landscapes and commercial properties. The business also provides holiday lighting for both residential and commercial properties.

Mosquito Squad, acquired in 2009, is an outdoor pest control business. Working to keep annoying pests off properties so homeowners can enjoy their outdoor living

“What’s unique about the company is that our franchisees derive personal satisfaction through serving the client.” spaces, the business joined OLB as a young system but has grown rapidly from 15 locations to over 135 locations, and is on pace to reach 150 units by the start of 2014. The Mosquito Squad business also caters to commercial properties such as restaurants with outdoor dining space.

The latest business acquired by OLB was Renew Crew in October 2012.

Previous known as Wood Re New, the business model focused on cleaning, sealing and protecting wood decks, fences and cedar siding. Once acquired, OLB changed its name concurrent with a significant broadening of the service offering. Today the business offers full service cleaning and protection for any kind of exterior hard surface, including patios, all types of siding, windows, and driveways. By broadening the services offered, franchisees are able to generate more revenue per customer and increase the frequency of that revenue; a move Grandpre says is working well in their first year of operations.

Today with roughly 275 franchisees, OLB’s priority is helping existing franchisees grow and build their businesses to reach their goals. “We’re believers that if we have a proven, talented, franchise operator who’s looking for growth, we’d love to help them grow by adding additional OLB brands to their portfolio at a local level,” Grandpre says. The company has a track record of franchisees with multi-brand success, and offers existing franchisees discounts to add territories or new brands. In addition, OLB supports the VetFran initiative and offers discounts to veterans.

OLB is also seeking new individuals looking to build a business, embrace a proven business model, and brand name.

Potential franchisees must possess the required capital, which generally falls under $150,000. The skills required differ amongst each business, however candidates should have some experience in

sales and marketing. Candidates must also be comfortable interacting within their communities, building brand awareness and trade alliances with other companies, and should be skilled communicators, able to articulate the benefits of the services they offer, execute the sales process, or hire a team to do so.

The franchising procedure begins with a discovery and qualification process, allowing the candidate to explore if the franchise is the right vehicle for him/her to pursue their personal goals. Through online learning centers, candidates study the business model, training, technology, and support systems available. Throughout this process franchise recruiters interview candidates to determine if they have the energy, passion, skills, capital, and support needed to be married with the business model. When a mutual fit is found, a franchise license agreement is signed.

Each business model offers a training program that ranges between one and four weeks in duration. All training programs include both in classroom and field training, most of which is conducted at the support center in Richmond, Virginia.

Here new franchisees and training staff cover all aspects of the business, and are provided with an operations manual to further outline systems and procedures. Each business also has a support organization to work alongside franchisees, reviewing their operation

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O u tdoor L iv ing B ra nds

and making recommendations on how to improve their revenue and profitability.

Ongoing support is offered through weekly webinars, system conference calls, field visits, and conventions. An online franchisee-to-franchisee support network is also in place to help foster a supportive peer group.

Although each OLB business has a slightly different geographic footprint, the majority of locations are situated east of the Mississippi, with a handful of international locations. While each brand has targeted select geographic areas for expansion, “We are able to support franchisees regardless of where they’re located in the US,” Grandpre says. “As leads come in, if it’s the right partner, we are absolutely willing to launch a new location with a talented franchisee anywhere in the U.S.” Part of what sets OLB apart from their competitors is their unique business models, which resonate best with those looking to start a home-based business.

Franchisees also enjoy flexible schedules and the outdoor orientated nature of the company. The seasonality of the businesses allows franchisees to work hard from early spring until late fall, but

Franchising USA

“OLB’s priority is helping existing franchisees grow and build their businesses to reach their goals.” have time to reflect and plan their next year during the winter. During this time, franchisees are also able to recharge their batteries and spend the holidays with family and friends.

OLB employees and franchisees embrace the company’s values that make their businesses global leaders and great places to work. The values Outdoor Living Brands follow, LIVE WELL: Lifestyle, Integrity, Visionary, Enrich Lives, World Class, Enthusiasm, Leadership and Laughter.

Through meeting regularly with franchisees and confidential third party surveys, OLB receives honest franchisee feedback, allowing them to implement changes where franchisees aren’t satisfied or where new practices have been identified. This year Archadeck, Outdoor Lighting Perspectives and Mosquito Squad earned World-Class Franchise designation by the Franchise Research Institute, recognition Mosquito Squad has now earned for four consecutive years.

Mosquito Squad has also been included in

Inc. 500|5000 List for three straight years, a testament to how rapidly the business is growing.

“What’s unique about the company is that our franchisees derive personal satisfaction through serving the client,” Grandpre explains. “Through helping clients enjoy the benefits of an outdoor living lifestyle, they see firsthand the impact they have on the families’ lives and derive huge personal satisfaction while building their business.”

OLB is looking to add a fifth brand to their portfolio within the next few years.

“I’m always looking for opportunities that would be a good fit strategically,” Grandpre says, “I want to add businesses that cater to essentially the same client base as our existing four companies while continuing to offer logical growth and diversification options to our growing base of talented franchisees.”

For more information: http://www.outdoorlivingbrands.com/

TOP RATED

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For Franchise Information Call (800) 764-3521 • MadeintheShadeBlinds.com Franchising USA

ex per t advice

Dan Martin, President & CEO of IFX Online

Driving the System: How Fr anchisees Can Fuel Their Own Success

chain primarily known at the time for its hamburgers. What did the franchisee that came up with the idea get? A really cool gold plaque! Oh, and a billion dollar breakfast menu leveraged by corporate and benefiting every fellow franchisee.

I’m guessing there were a few franchisees that expressed their appreciation over and above the gold plaque.

Franchising is all about following a proven system. It’s about applying certain methods at the local level. It’s about working as a team with the franchisor, as well as working with other like-minded franchisees.

Indeed, every bit of working for yourself, but not by yourself.

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The chances of success for franchisees are often tied to replicating the success of the franchisor. For franchisees, that’s something you think would be a real no brainer. Even for franchisees who have never actually owned their own business before, knowing that you can turn to a pre-produced plan in order to both grow your business and avoid pitfalls can be comforting to say the least.

Although a system is in place, there’s always room for improvement. It’s often the case that many of the most successful ideas come from existing franchisees. The Egg McMuffin was originally proposed by a franchisee, provided to corporate for testing and ultimately deployed creating a new breakfast product for a

Franchisees can follow a system and franchisees can play an active role in the advancement of the system. Indeed, every new franchisee represents an asset to the chain. Creativity and innovation are encouraged in order to benefit the brand and the system as a whole. Ideas can be conveyed to the franchisor who takes on the challenge of considering, producing, testing and deploying the idea without risk to franchisees. If it works, everyone wins.

If it doesn’t work, only the franchisor takes the hit. But, when it all comes together, a seemingly trivial idea can significantly advance the system.

A Trip to Vegas - “Are we there yet?”

Ever driven to Las Vegas? It’s pretty much in the middle of nowhere. But, for some reason, a whole lot of us drive to places in the middle of nowhere or through the middle of nowhere to get somewhere.

It’s about a five-hour drive from where I live in San Diego to the MGM Grand in Las Vegas. The quickest route is Interstate

“The end of the rainbow, the lights over the next hill, the “why” to why you became a franchisee in the first place is what it’s all about.”

15. But, there are times, especially around the three-hour mark where the road in front of you seems to stretch on for a thousand miles. You come over a ridge, another thousand miles. You wrap around a mountain pass and there are the lights of Vegas, right? Nope, another thousand miles.

Why do people drive to Las Vegas especially when the shortest route goes through hundreds of miles of empty desert? Why do they stay on Interstate 15 and not take one of a hundred side roads that surely must provide a more direct route to Vegas and with less traffic?

Understanding that I’m running a bit adrift with my analogy here, let me explain. People go to Vegas because they are seeking something they feel they will find when they get there. It’s not so much the journey; it’s what’s at the end of the journey that drives people to make the trek. “What’s” at the end is the “why”.

Drinks, great shows, Elton John, gambling, hanging out at the pool, meeting Elvis... it’s all part of the experience when you get to Vegas. Everyone has a different “why” and yet millions of people drive the fiveplus hours often multiple times a year to end up in the middle of nowhere where it’s 115+ degrees in the shade.

In franchising, the franchisor’s system is, in a sense, a very reliable vehicle. Not necessarily a Porsche or a BMW, but a really nice Audi or Ford. Every franchisor

provides the vehicle. It is what has made

proven, reliable, economical, fun to drive,

For your drive to Vegas, you’re being

On your way to Vegas, the franchisor

sure you get to where you want to go. It is

the whole way and don’t sidetrack until

other franchisees successful.

provided with a proven vehicle to make

not a 1974 Ford Pinto that could get rear ended at any moment and explode. It’s a

yet practical car.

advises you to, “Take Interstate 15 North you hit Tropicana Blvd.” In fact, they

don’t just advise you, they are all over

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ex per t advice

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ex per t advice

Dan Martin, President & CEO of IFX Online

“It’s often the case that many of the most successful ideas come from existing franchisees.” you about staying on course. It’s tough sometimes, however, to follow that long, boring, seemingly never ending road out in the middle of nowhere. There are times when the 15 North heads more North than East and you happen to know that, as the crow flies, “Vegas is East, baby!” You’re often tempted to take a shortcut by exiting the interstate and taking one of them there dirt roads that seem to be headin’ ta Vegas.

But, we all know that those dirt road alternatives out in the middle of nowhere lead to nowhere in the middle of nowhere.

No bueno!

The franchisor provides a great, reliable, proven vehicle for you to get to Vegas.

The franchisor also provides a proven and easy-to-follow roadmap (a term used for thousands of years until recently when people found it easier to simply say, “GPS”). Nonetheless, the roadmap lays out a specific route to get to Vegas using your proven and reliable vehicle. Again, a real no brainer. Just drive the car and follow the map and you’ll get to Vegas!

You’ve got your vehicle and your roadmap and you’re set, right? Nope again. There is a third component, one that the franchisor does not provide. It’s the fuel. It’s the drive. It’s the passion. It’s the willingness to drive the car while following the map to achieve your goal…having a great experience in Las Vegas, Nevada!

It’s more than just pulling over to fill up your tank. It’s actually pressing down on the gas pedal too. Sound silly? Try it when you’re at the three-hour mark and the “Highway to the Opposite of Heaven” seems to go on and on and on and with zero help from angel, Michael Landon (may Little Joe rest in peace). Try it when the kids keep saying, “Are we there yet?”

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Try it when your French fries end up dripping ketchup all over your shirt while you’re on cruise control and trying to steer with your knees. It ain’t easy! Sometimes, you just want to back off the gas, pull over and call it a day. “Oh well, we tried.” “Oh well, no you didn’t.”

The end of the rainbow, the lights over the next hill, the “why” to why you became a franchisee in the first place is what it’s all about. The “why” gives you the energy to fill up your tank and push down on the gas pedal and drive the vehicle while following the roadmap. When you feel yourself starting to get overwhelmed or, worse yet, dismayed, think about what you’ll experience when you get to Vegas.

Shows. Gambling. Margaritas! Then notice how your foot presses down more on the pedal. There is no stopping you now!

The vehicle. The roadmap. The fuel. All three elements are needed to achieve a franchisee’s “why.” The why of “Vegas” is an analogy for most franchisees. For some people, Las Vegas really is their “why,” but that is a subject for another unrelated article entirely.

What drives you? What are you passionate about? Why did you sign up to become a franchisee? Remember when you were doing your due diligence and calling other franchisees for validation? You haven’t been that high since your first hit in college. That’s what you need to pull out again as your franchise “why.” After all, you’ve got everything you need to get to your “why.” All you need is to press the gas pedal.

Growing the system. Growing the brand.

Two prime directives that both franchisees and franchisors can agree to. However, following the system, even when it’s right

Dan Martin

in front of you and proven to a large degree requires that extra “umph,” that extra willingness to stick it out. The attitude of most success-minded franchisees is to hop in the vehicle, whip out the map, point themselves towards Vegas... and floor it! A winning combination.

Dan Martin, CFE is President & CEO of IFX Online (www.ifxonline.com), 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 Assocation’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.

+++$676,262

+IBIS World Industry Report, July 2012 ++Represents 2012 annual revenue average of 37 franchised locations that were in operation for the entire 24-month period ended 12/31/12.

Of these locations, 35% had annual revenue that exceeded this average. A new franchisee's performance may differ from these results. +++Average revenue for the 60 Standard Company Salons in operation the entire 24-month period ending 12/31/12. Please see Item 19 of our 2013 Franchise Disclosure Document for additional information. This information does not constitute an offer to sell a franchise.

ex per t advice

Peter Knight and Kate Groom, Smart Franchise

10 Tips

To Help Your Business Thrive

There’s more to running a franchise than sometimes meets the eye. Successful business owners spend their time focusing on running business better – on ways to make more sales, improve productivity and increase profit.

And that doesn’t always seem like it meshes with following the system, implementing the manual and other things that are so much part of franchising. But

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the reality is your success depends on your own initiative, not only following the operations manual. So where do you learn this? One of the best ways is to find out what the successful people do. It can be tricky (and time consuming) to see exactly what this is, but over the years we’ve identified ten things that will help you fast track your own success.

1

Have a plan

If you have no plan, you may be busy but you’re likely to end up disappointed by your results. Planning means working out where you want to get to, and how you’ll get there. It includes thinking about the opportunities and risks ahead, and how you’ll deal with them.

From a financial point of view, you need

to know what sales are required so you can pay your business and personal bills, and put something into savings. From an operations perspective, it means regularly looking at each area of the business and identifying how to increase sales, improve productivity, develop your team, and be profitable.

2

Know the Numbers

Your financial results show the results of your activity and help identify areas that need attention. Keeping track of them will help you run a better business.

There are two aspects to this: Planning and Monitoring.

Planning includes preparing a budget and cash flow forecast. Monitoring is reviewing the key numbers that show

“Challenge each expense item from A to Z. Ask, ‘How can we eliminate or reduce the expense, or get better value from what we are spending?’”

how you are doing compared to your target. What are the numbers to look at?

Examples include sales, cost of goods sold, and net profit. Also pay attention to operational numbers like number of inquiries, number of customers and average transaction value. Your franchisor should be able to identify the most helpful ones.

3

Manage Your Expenses

Cost control is important but managing expenses is not simply about cutting costs. It’s about getting good value from what you spend. The best place to start is with a ‘line-by-line review’ of the most recent Income Statement.

Challenge each expense item from A to Z. Ask, “How can we eliminate or reduce the expense, or get better value from what we are spending?” Don’t simply slash away at all costs - the idea is to ‘cut fat not muscle.’ Not all costs can or should be cut. In fact, you may need to increase some expenditure to help you succeed.

4

Manage Your Cash Flow

to improving cash flow, consistent, profitable sales, and good stock and debtor management will help. Hopefully your franchisor has worked out the systems to help – be sure to ask!

5

Edward Levitt Peter Knight

Maximize Return on Investment

One of the shrewdest maxims of business is to maximize your return on investment. What is your investment?

Anything you spend time or money on. The big ones are easy to find, they include staff wages, your physical location and equipment. Marketing expenditure is another.

In addition to these, there’s another investment you make on a daily basis: your own time. If you want better results, one of the most important areas to consider is where you spend your time. The question then becomes “How can we use these investments more effectively to make more sales, produce more with the same resources and generate more profits?”

6

Invigorate Local Marketing

Your business needs cash in the bank to pay the bills, and cash coming in the future so you can keep doing so.

Having good cash flow means you won’t be faced with cutting expenses in vital areas that are needed to support your business.

Marketing isn’t just the job of the franchisor. Successful franchisees focus on their own efforts to promote and grow their business. The starting point is to make sure people know about your business. You must also answer the question: Why should they buy from you?

Forward planning is essential, and for this you need a cash flow forecast. It will help you see the pattern of cash flow throughout the year. You can then manage and improve it. When it comes

Regularly invigorate your marketing with local activities and by promoting new products and services. Learn about and use a variety of marketing activities, including social media, collaboration

Kate Groom

with other businesses and networking.

Look for improvements in areas such as of number of prospects, customers and sales. Regularly compare results with your goals and make adjustments where needed.

7

Talk to Your Customers

If it weren’t for customers we wouldn’t have a business. Marketing will bring prospective customers to your business, but you’ve still got to make a sale. The best way to do this is to talk to your prospects and customers, and listen to what they tell you.

Find out what people want, let them know how you can help them - and most important, ask for the sale! Nothing happens in business until somebody makes a sale. That’s why top performers keep their own sales skills, and those of their staff updated, and sales targets front of mind.

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ex per t advice

Peter Knight and Kate Groom, Smart Franchise

8

Talk to Your Team

Think of a successful business and you’ll probably notice it has great staff. They are likely to be positive, enthusiastic and they make it easy to do business. Effective teamwork is a foundation for a productive and profitable business - so it’s important to make the most of your people. How do you do this?

Most people want to make a contribution and learn new things that help them progress. They want to be appreciated and valued. So, give them clear responsibilities, develop their skills, make their job interesting and give them the chance to progress.

9

Network Like Crazy

Networking with other people in business can help you build sales and increase customer loyalty. The key to networking is this: it’s not who you are talking to that is your likely customer, but its who they know! So relax, and just get to know them.

Learn something about their business and let them know what you do. Your network also opens up opportunities for joint promotions and local events. Make the

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“The key to networking is this: it’s not who you are talking to that is your likely customer, but its who they know!” most of the opportunity, and get involved!

Apart from this, you can often pick up good ideas from other business owners.

Get to know what others do well, and see what you can apply in your business.

10

Take Action

Successful people tend to be very persistent. They don’t just collect ideas – they take action. They make the most of the good times, persevere through difficult times, and constantly seek to improve their business.

One of the best ways to stay ‘in action’ is to review your progress each month. Did you achieve your goals? If so, great! See what you can do to improve on that. If you didn’t, what happened? Was the goal achievable, did you do the actions you said you would and they didn’t work, or did you not do the actions?

Look back at the past to learn from it, but don’t get caught up. Identify corrective

actions, monitor results and adjust as required.

There you have ten things to think about as you start in your franchise. But it’s not just a question of reading it – you’ll need to put the tips into action. That’s why persistence is so important. Creating a successful franchise doesn’t happen overnight. But if you find ways to apply these tips in your own business, combined with the franchise system, you’ve taken huge steps towards achieving the success you dream of.

Peter Knight, FCPA, and Kate Groom of Smart Franchise are experts in business and financial mangement. They run workshops and seminars, and present keynote speeches that help people improve business performance.

For more information: Website: www.smartfranchise.com.au Email: peter.knight@smartfranchise.

com.au

kate.groom@smartfranchise.

com.au

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focus

Soccer Shots

Heims Shoot and Score

with Soccer Shots Founded in 1998 by athletes Jeremy Sorzano and Jason Webb, Soccer Shots is a high-energy soccer program featuring principled instruction dosed in fun.

Launching the first businesses in their hometowns of Charlotte, NC and Harrisburg, PA, both Sorzano and Webb 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 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 enrolled in Soccer Shots to learn the fundamentals of the sport in locations across the country. 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.

Rian and Alyssa Heim genuinely enjoy the concept and see the fulfillment in working with children, a quality that has helped their Los Angeles, CA franchise become one of the leaders in the system.

Meet The Heims Rian was born in Portland, OR where he lived until attending the Art Institute of Seattle. After graduating with a degree in Graphic Design he worked with several companies freelancing his talent. Alyssa, a native of Southern California, attended the University of Southern California, where she studied Accounting and later began teaching through Opportunities for Learning. The couple met in 2001 through mutual friends, and in 2004 were married.

Content with their careers at the time, both knew they wanted to someday have a family and work for themselves. “I loved what I did, I just didn’t like it as a business. It’s important to find the things you love and if they cross over it’s great, but sometimes they don’t, and for me it didn’t,” explains Rian. “Franchising had never crossed our minds before. We were looking for something, but we didn’t want to force anything. We knew it would come to us.”

Then, while attending a wedding in August 2007, a mutual friend of the couple who had recently purchased a Soccer Shots franchise in Charlotte, NC introduced

Franchising USA

“Franchising had never crossed our minds before. We were looking for something, but we didn’t want to force anything. We knew it would come to us.” them to the company. Intrigued by the concept, the Heims began researching the brand.

Discovering the financial security, freedom and flexibility Soccer Shots offered franchisees, the couple were also drawn to the relatively low start-up fee, the low overhead, and low risk. After discussions with Soccer Shots, Rian says the experience was a pleasant one. “They had a good feel to us, they weren’t too corporate or difficult to reach, and we felt we could relate to them. We spoke the same type of language, so that was helpful and reassuring as well.”

In December 2007, the couple decided to take the chance, make the change, and bought their franchise. “We wanted to work with children, and liked working in education, so both those factors were huge selling points for us,” Rian says.

Having never owned a franchise or business, the Heims took a steady approach, growing slowly to ensure their focus was on the quality of their franchise, careful not to over-expand and ruin what they were working towards. “We knew our hard work would pay off and that within the three to five years we would get to where we wanted to be, live the lifestyle we wanted, and have the flexibility to have children and be home with them as much as possible. It really was a lifestyle choice,” Rian explains.

Defining the two biggest benefits of being a part of the Soccer Shots franchise system as the franchisee community and the online registration system, Rian says both of these factors would not have been available to them had they gone into business alone. “We’ve become friends

with other franchise owners, and we’re able to reach out and support each other with questions and answers,” he explains.

“We also wouldn’t have been able to afford the registration system on our own, but because we’re part of a system and everyone is contributing, we’re able to benefit from it, allowing us to plan projects.”

To all potential franchisees Rian says, “You need to be dedicated, and willing to sacrifice time and energy,” adding that while franchising provides a lot of flexibility, hard work is necessary to succeed. “At the end of the day you get out of it what you put into it. The franchisees that succeed aren’t just lucky, they work really hard, they’re smart, and they take risks. The ones who do moderately well, put a moderate level of effort in and the ones who fail don’t do the work,” he says.

Today the Heims’ Soccer Shots franchise employs five full time staff and 20 part timers. Alyssa is able to be home with their three and a half year old son, Charles, and three month old daughter, Amelia, and she can still put in around 15 hours a week, taking care of the accounting, payroll and business taxes. Rian works a 40-hour week with Soccer Shots but is still able to spend plenty of time with his family.

“Soccer Shots provides a great opportunity to work hard and double or triple your revenue in a year, and that’s exciting,” Rian says. “But business aside, it’s rewarding to work with kids, get to know their families, and know we’re working in a field that makes an impact on other’s lives.”

For more information: http://www.soccershotsfranchising.com

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f ra nchisor in depth

T H E U PS STORE

The UPS Store

Tackles Untapped Towns Mail Boxes Etc., was founded in 1980 as a convenient alternative to the post office. In a market with great demand but little supply, the company blossomed and caught the attention of UPS, which was looking establish a own retail presence.

UPS acquired Mail Boxes Etc. in 2001, and since rebranding the stores with the The UPS Store name in 2003, the company has grown to be the nation’s largest franchisor of retail shipping, postal and business service centers.

“One of the reasons we launched The UPS Store was because almost everyone was familiar with the UPS brand, and the market was rife with opportunities for us to expand into the retail space, especially using the UPS name,” explains Chris Adkins, Vice President of Franchise Development for The UPS Store.

While launching the new brand the company also expanded its line of products and services to better serve small business owners, who make up the majority of their customers. Along with their well-known services of shipping and packaging, the company began to also focus on copying, online printing solutions, document services, and an array of printing services, with the goal to meet

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“The key aspect of the model is that any service or product we offer at a traditional store in a suburban setting can be accessed by a small business owner in a rural location.”

the needs of small business owners.

In many cases The UPS Store has become a “back office” for small business owners in need of business support services.

“We help with everything from creating marketing materials to providing mailboxes with street addresses. We work to create custom solutions for every small business owner we come in contact with, even handling logistics and distribution on a small basis out of our stores,” Adkins says.

Striving to go above and beyond when servicing small business customers, a website was recently launched to fill the gap of solutions not offered in store. By partnering with various small business service providers, The UPS Store offers unique discounts to small business customers on services such as IT support, website creation, legal services, and marketing solutions. “We want to offer as much help as possible to small business owners, both in our physical store locations, and online,” explains Adkins.

The UPS Store was never designed to be a corporate owned entity of stores. Since Mail Boxes Etc. began franchising in 1980, all locations have been franchise owned and operated. Today there are over 4,400 UPS Store locations operating worldwide.

What Does it Take to be a The UPS Store Franchisee?

“UPS Store franchise owners are a diverse group, coming from many walks of life,”

Adkins explains. “The key commonalities they share, and what the company looks for in potential franchisees, is an entrepreneurial spirit, customer service attitude, a strong stance on sales, and a dream of owning their own business.”

The cost of opening a UPS Store franchise varies based on location and size and type of center. The total initial investment cost for a new The UPS Store center ranges from $148,734 to $347,241*, plus required working capital. Prospective franchises are also required to verify a minimum of $60,000 to $100,000 in liquid assets, an amount on the low end when compared to the start up costs alone of other franchises and businesses.

The UPS Store has established a growth plan including discounts and incentives for current franchisees interested in becoming multi-unit owners. Through partnering with the Veterans Transition Franchise Initiative program (VetFran), The UPS Store has also awarded 150 franchises to first-time veteran buyers since 2004. As their way of saying “thank you” for serving the country, the company offers qualifying veterans $10,000 off the franchise fee of a new The UPS Store location and 50 percent off the initial application fee. Veterans now operate more than 250 The UPS Store locations in the U.S.

The Steps to Owning The UPS Store has made it easy to learn about their franchising process.

Educational webinars are held twice a week, where prospects can learn more about franchising with The UPS Store.

After attending a webinar, prospects are invited to complete a non-binding confidential application, and then speak with a local representative to learn the steps involved with being awarded and operating a The UPS Store. If the applicant decides to move forward, they will then submit an application fee and if approved, they can begin searching for a location.

Once a center is secured, new franchisees undergo comprehensive training. The award winning training program, as recognized by the American Society for Training and Development, is designed to help franchisees develop business knowledge, day-to-day operational skills, and the critical thinking needed to own and operate a The UPS Store center. The program includes web-based training and two weeks of in-store learning under a certified trainer. New franchisees also attend training at “The UPS Store University” in San Diego. Once their center opens, franchisees can expect ongoing support from a local support team, continuing headquarter- led educational opportunities, and a wide variety of marketing support and solutions.

Moving into Untapped Territory The latest development The UPS Store has launched is its Main Street Model.

Focused on opening new locations in smaller towns and rural communities, this idea came into light years before being recently redesigned to offer incentives to franchisees looking to purchase locations in smaller communities.

Launching this past April, the initiative was a part of an effort to bring the same suite of products and outstanding customer service to under served markets. “The key aspect of the model is that any service or

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f ra nchisor in depth

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f ra nchisor in depth

T H E U PS STORE

“We’re selling a dream to customers.

People want to own their own business, and we provide the platform to do so.

We allow them to be in business for themselves, but not by themselves.” vendors for services; now these services are provided on campus through The UPS Store, and the franchisee can reap the benefits,” Adkins explains.

product we offer at a traditional store in a suburban setting can be accessed by a small business owner in a rural location,” Adkins says.

The concept originated through research conducted by area developers and updated marketing studies showing the untapped locations. “We put up perimeters. We don’t want a UPS Store in a rural setting closer than 15 miles from a suburban store,” Adkins explains. “There needs to be a large enough geographic group of small business owners to capture the revenue needed to be successful.”

Today The UPS Store offers a reduced franchise fee and up to 40 percent savings on other start up costs to attract prospects who want to open their own business servicing customers in small communities.

By lowering the franchisee free from $29,950 to $9,950 residents of small town communities can more easily become part of The UPS Store network. Franchisees of Main Street Model locations are also allowed flexibility in their operations; for example, their store hours may be adjusted to correspond with the rest of their town, and / or their store size may be smaller.

The first Main Street Model location opened in Jackson, Ohio with locations in Montana, Texas, California, and Colorado following quickly behind. “We’re gaining traction. We already have so many people interested,” Adkins says.

This year, The UPS Store hopes to open 15 to 20 stores under the Main Street Model.

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Through continual online marketing, and regular market evaluations with mapping and demographic software, Adkins says the company is marketing the opportunity to communities where they believe a store will be successful. “We’re excited about the model. When you launch a new model like we’ve done and have already opened five stores since April 30 [2013], that’s tremendous. We are aiming to expand everywhere there’s a market opportunity available within the U.S.,” Adkins says.

Out with the Norm, and in with Non-Traditional Units For the past several years The UPS Stores’ primary efforts have been focused on developing non-traditional units.

These locations differ from standalone locations and those in strip malls, and are strategically located in existing high traffic areas of convenience.

Last year The UPS Store experienced their biggest growth in non-traditional units, opening 30 new stores in only 12 months.

“Places are coming to us asking us to put a UPS Store in them,” Adkins says, adding that there are now six non-traditional The UPS Store locations within Caesars properties.

The first non-traditional store opened in 1987, at American University in Washington, DC. This year, Jackson State University became a franchisee of a nontraditional location. “The University saw many people leaving campus to use other

While there is a different revenue stream between traditional and non-traditional units, the atmosphere is also different in the sense that The UPS Store owner and employees work in relationship with the other business. Non-traditional locations are also only typically offered to existing owners, as the company prefers franchisees to have experience being a store owner before owning a nontraditional location.

Selling the Dream From their humble beginnings as Mail Box Etc. to becoming the industry leader in the postal and business services franchise industry, The UPS Store has been recognized as a leader in the world of franchising. This year marks the 23rd consecutive year The UPS Store has achieved the top spot in the “Postal and Business” category of Entrepreneur Magazine’s Annual Franchise 500 list.

“We’re selling a dream to customers.

People want to own their own business, and we provide the platform to do so.

We allow them to be in business for themselves, but not by themselves,” Adkins says. “We not only offer support, but we help our franchisees learn how to run a successful business.”

The UPS Store also hosts two weekly webinars open to the public. Watch The UPS Store’s weekly webinars live or at your own convenience and submit any questions you may have. To sign up, visit www. theupsstorefranchise.com/events.

For more information about the new Main Street Model: www.theupsstore.com/mainstreet * These figures are subject to change. See Franchise Disclosure Document for current amounts.

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ex per t advice

Daniel Brunell, President, Dearborn West, LLC

is a

Big Brand Name important I am often asked if joining a franchise system with a well known brand name is better than pursuing an up and coming concept.

The answer is of course, maybe and maybe not.

A well developed brand can help bring customers to your new business and shorten your journey to the cash flow breakeven point. However, they can also be hard to come by for first time franchisees. Most “tier one” brand names i.e., McDonalds, are no longer attainable for the average aspiring business owner.

Most franchise opportunities are based

on having a protected territory for each individual operating unit. This means that there are a finite number of units to be awarded to franchisees. So, as there is less of a commodity, its value increases. As a franchise grows and builds on its success, often the bar is raised regarding financial and experience qualifications. This is why the majority of the units of the most recognizable food franchises are owned by large restaurant groups. They have the experience, human resources and financial wherewithal to launch and manage these mega concepts.

Additionally, the very reason that people become aware of a particular brand in a market is because someone has purchased the franchise rights in that geography and has developed the brand identity locally.

Unless you are watching the Super Bowl

or some other big national event, most TV and radio advertising is local in nature, so people in a given market will only see or hear commercials for a specific franchise brand if there are already franchisees in that market. This can mean that the most desirable territory is no longer available by the time a concept has strong brand identity in a market area.

McDonald’s was once a local shop in San Bernardino, California, as was Taco Bell.

These giants, like all companies, started off with an unknown brand. The key to the success of a franchise lies not only in having a good product or service, but in having a proven system for doing business that can be replicated. A big part of that system for doing business is having solid sales and marketing programs to build a brand name in your market. Typically as a franchisee, you will be contractually obligated to spend between two percent and four percent of your revenue on brand building whether the company you choose is a household name or a new comer, so don’t plan on saving money on advertising

if you go with an established brand.

Despite the common misconception that the value of a franchise is linked to its existing brand recognition, the real value in a franchise is in the business model. A business model is simply a way to make money. That is what you are buying when investing in a franchise. For example, the value of paying someone 40k to teach you how to make 100k every year is enormous. Every business goes through a trial and error phase to determine how to operate most efficiently. This is why most businesses fail - they simply run out of money while perfecting their business model. While there is nothing wrong with buying into a household brand name, it is by far not the most important element. Most of the franchise brands that thrive in your local market were thriving somewhere else before anyone in your town ever heard of them. If a franchise has perfected their model, with a good operator it will work anywhere that has the appropriate demographics to support it. So it does not matter if you have never heard of a franchise before. What matters is whether or not it has been proven to work in other markets similar to your own.

Often a newer concept will be the best choice for a prospective franchisee.

Investing in a franchise is often like investing in a stock, in that it is better to get in on the way up. You may be able to build substantial equity in your business by getting in early on a future mega brand.

Also, you can find a company that has a great stake in your success and will bend over backward to help you. This is what franchising is all about. When both the franchisor and the franchisee are in direct alignment on their goals, the best results follow. Unfortunately, this symbiosis sometimes erodes when one party is a multinational corporation and the other is a little guy starting a new business.

Instead of selecting a business that is simply familiar, look for one that you will really enjoy. Owning your own business should allow you to earn a living on your own terms. If possible, why shouldn’t

“Investing in a franchise is often like investing in a stock, in that it is better to get in on the way up.” you have your cake and eat it too? By identifying what kind of hours you would like to work, what environment you’d like to be in and who you wish to have as customers, you can go out and find a business to support those goals. There are many more up and coming brands than there are mature ones, so you will have a much wider array of options and a better chance at finding something you love. Get help from a competent franchise consultant who knows the marketplace.

It will be cost free and painless and they can show you interesting options that are not plastered across every franchise search portal.

Since territory availability is so critical, with a younger concept you will have a much better chance at getting the territory you want. Some people genuinely do not mind commuting, but it is great to have your business close to where you live.

If you have little or no commute time to deal with every day, you can spend more time earning money or enjoying the fruits of your efforts. Think about how many hours you spend commuting each week and place a value on that time. Could those hours be better spent? The answer for most people is “yes.”

With a new concept you may be able to meet an underserved need in the marketplace. This is always a good thing for a business, but don’t be afraid of competition. Yes, there is a point when a market is saturated with a particular product or service, but this determination needs to be made carefully. Most franchise companies will look at a market area and determine that if all of their competitors are there, then they should be too. To most businesses, competition is proof that there is a market for a product or service in that area. Often, newer concepts have learned from the mistakes of the first movers and have a much better service model. They

Daniel Brunell

are typically more agile and can respond to market needs more readily too.

When looking at an up and coming franchise, it is important to look for franchising experience among the members of the management team.

They may be a young company, but if the leadership is very experienced in franchising you can feel a little more comfortable being in the beta phase of development. If possible, try to find a company that has at least twenty units and three to five years of operating success.

These minimum criteria can help you determine if a concept is going to have legs in your area too.

Whether a big brand name or an up and comer is right for you depends on your unique situation, but either way, finding a solid business model should be your primary objective.

Dan Brunell is President of Dearborn West, LLC, an international business opportunity brokerage headquartered in Southern California.

For more information: Website: www.dearbornwest.com Email: dbrunell@dearbornwest.com Phone: (951)587-6929

Franchising USA

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prof ile

CO I T

COIT Franchise Expansion

in 2013-2014 In 1950 as a small dry cleaner in San Francisco, COIT founder Lou Kearn began offering cleaning services, each backed by a 100 percent satisfaction guarantee.

Today, COIT Cleaning & Restoration, is the nation’s largest and most experienced carpet cleaning, drapery, and upholstery cleaners, and has over 60 years of experience in the residential and commercial cleaning service industry through its nation-wide corporate and franchise locations. Servicing over 500,000 customers each year, COIT offers ten lines of service to both residential and commercial properties. Specializing in cleaning carpets, upholstery, drapery, tile and grout, air ducts, wood floors and natural stone services, COIT has also implemented a 24-hour emergency restoration service.

Using the most advanced truck-mounted cleaning system, COIT’s service team of specially trained and certified cleaners provides customers with a world-class experience. “Because we have ten lines of services, franchise owners have multiple opportunities to get into the home several times a year to offer various cleaning services and deepen the relationship with our customers,” Bob Kearn, President and CEO of COIT says.

Adding ten new franchisees in the last two years, COIT currently has 40 franchisees throughout the United States and ten

Franchising USA

corporate divisions to create a company presence in 80 U.S. markets. To assist franchisees build their own business, COIT is continuing to expand into new markets with key areas available in 35 areas listed on the COIT website.

Interested candidates may fill out an online application and will receive a free franchising packet. Approved candidates will then be invited to attend a COIT Discovery Day. “We invite candidates to Discovery Day, an opportunity like a first date, where we meet and get to know each other,” Pat Saign, of the Franchise Marketing Department says.

“Each candidate is very diverse, and each territory is diverse. We like to design our Discovery Days to meet the needs of the candidate and their market.”

Although not required, potential franchisees may have previous experience in the service industry. Franchisees attend COIT’s comprehensive two-week training program, and also benefit from ongoing training and support teams. COIT franchisees are backed by a powerful franchise system that includes a highly recognizable brand image, compelling marketing campaigns, multiple revenue sources, and an outstanding support system. The cost to purchase a COIT franchise ranges from $25,000 to $50,000, with the minimum market covering 100,000 households. COIT offers several franchise programs: Standard franchise, Conversion, Employee, and Veterans programs. The Conversion Program allows experienced business owners to convert

their cleaning business to a national brand while also providing the opportunity to add new service lines to their business.

The Employee Program offers COIT employees who have been with the company for more than three years, credit toward their franchise fee, and as part of the VetFran initiative, COIT provides veterans with a 20 percent discount off the franchise fee.

Targeting women ages 35 to 65, the company strategically markets to this niche through television, radio, and print campaigns, and sponsoring charities such as the Susan G. Komen Foundation. “One of the most important and effective ways to market is by being actively involved in your local community,” Saign explains.

Today COIT is looking to work with individuals who have a strong desire to develop their own business, enjoy marketing, operating and building a business, and are comfortable investing in and managing multiple employees.

For more information: Website: http://www.COIT.com/ Phone: Pat Saign, 800-243-8797 X108.

O P P O R T U N I T Y

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Top Ten COIT Markets Now Available COIT Cleaning & Restoration Services now has ten key markets available for opening and developing a new COIT Franchise. Take a look at these markets* and consider opening a COIT franchise or converting your existing cleaning operation to the national leader COIT. r "MCVRVFSRVF /FX .FYJDP – 275,000 households and only 450 miles from Phoenix r "VTUJO 5FYBT – Capital of Texas with over one million residents in Travis County r #BLFSTÄ?FME $BMJGPSOJB – With 260,000 households it is only 100 miles from Los Angeles r #JSNJOHIBN "MBCBNB – Close to Atlanta and Nashville with 660,000 people r *OEJBOBQPMJT *OEJBOB – 370,000 households in Marion County could use COIT services r .FNQIJT 5FOOFTTFF – Over 900,000 people and only three hours from Nashville r 0LMBIPNB $JUZ 5VMTB – Over 600,000 households in these two markets r 3BMFJHI /PSUI $BSPMJOB – 364,000 households in Wake County in a growing market r 5BNQB 'MPSJEB – 1.2 million population with strong residential and commercial properties r 8JDIJUB ,BOTBT – Largest city in Kansas with over 500,000 people in the county *See www.coitfranchise.com for additional available markets

#FOFÄ?UT PG 0XOJOH B $0*5 'SBODIJTF – Recession-resistant industry – Recurring income business model – Multiple residential, commercial, and restoration services – 63 years in business/well established brand – COIT Conversion Program for current business owners – A proprietary system for statistical tracking & group purchasing – No previous experience required – Excellent training at COIT College & COIT Webinars – Ongoing operations, training, and marketing support – Low investment/Financing programs available

If you are interested in a $0*5 'SBODIJTF and would like more information, contact 1BU 4BJHO in the COIT Franchise Dept. pat.saign@coit.com 800-243-8797 x108 or visit coitfranchise.com.

Franchising USA

have your say

Alex King, CEO and Co-Founder, gatherDocs

5 Quick Steps to Take Your Hiring Mobile

“Be creative and create a job listing that comes from your company’s perspective.” are searching for you via their mobile device, so are your future employees. It is imperative to engage with them on the device that they probably cherish the most.

Let’s take a deeper dive into mobile usage and employee acquisition. Glassdoor, a career and community jobs site, conducted a study and found that 68 percent of active job seekers are using their mobile device at least once a week to find jobs. They also found that 30 percent of active job seekers are looking for new opportunities daily. If you’re not meeting them on mobile, you’re missing out on a significant portion of the applicant pool.

The days of the PC are numbered and mobile devices are to blame. The decline in PC sales, nationally and globally, has been well documented for quite some time now.

We see companies like Dell, at one point the largest PC maker, doing their best IBM impression while scrambling to restructure its organization and develop new services.

At Hewlett Packard, CEO Meg Whitman has the daunting task of cutting 24,000 jobs by 2014 due to the slump in PC Sales.

Needless to say, PC makers are in trouble.

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Conversely, people are consuming more data than ever. I formerly worked in the television industry and we always relied on TV being the number one medium.

That trend is coming to an end. In 2013, eMarketer estimates that adults will spend more than five hours consuming digital media every day. This will eclipse the four and a half hours that we spend each day attempting to become a crispy Frito Lay - and signifies the end of an era. Mobile accounts for nearly 50 percent of the time spent consuming digital media, proving that it is one of the driving forces behind the decline of the PC. So what does this mean for franchise business owners? It means that you better have a solid mobile growth strategy in place for both customer and employee acquisition. If your customers

At gatherDocs, we focus on effective employee acquisition. Our value added proposition for franchise business owners is clear. We simplify the recruitment process while saving them time and money. We provide franchise business owners with an easy to use applicant tracking system that allows them to quickly create job postings, syndicate those postings to leading job boards (think Indeed and SimplyHired), collect resumes and applications, and evaluate candidates.

Currently, our clients are seeing that roughly 30 percent of their applicants are applying for jobs via their mobile device. Without a mobile hiring tool like gatherDocs, their applicant pool would be cut by a third.

As you can see, mobile is a very important factor in the hiring process. Here are five simple steps to launching an effective mobile hiring strategy.

and improve execution. We constantly

work with our customers on improving their hiring strategy. If you carefully

search the web, you will find tons of FREE advice in the form of blogs and “white

papers.” At the most, it will cost you being added to an email list.

Those are your five steps to developing an effective mobile hiring solution.

Implement those five steps, improve your

applicant pool, and take your franchise to the next level!

Happy Hiring!

Alex King is CEO and Co-Founder of gatherDocs, a mobile hiring solution for the retail and service industries.

In this role, Alex is head of strategy

Step 1: Make sure that your internal hiring processes are exactly what you would like them to be.

Have a solid understanding of who is responsible for recruitment, screening, and hiring. Before any gatherDocs implementation, we ensure that we know who does what in the organization. We recommend that you do the same as a first step to improving your hiring process.

Step 2: Make your job listings shine.

Be creative and create a job listing that comes from your company’s perspective.

Far too often we see companies copying other companies’ job listings. You don’t want to do this. Try to stand out and provide some insights into your company’s culture by creating a well-crafted job description that is meaningful to your organization. Just because an applicant is coming to you on mobile doesn’t mean they won’t read about you.

Step 3:

popular mobile operating systems like iOS and Android. You don’t need to build a mobile app that will cost you lots of money. Instead, put a careers page online and make it responsive. This means that it will look different depending on the device that is accessing it. If you don’t know how to do this, contact your web developer or utilize a system like gatherDocs that provides these capabilities for you.

and operations. Previously, Alex

Step 4:

Business Administration (Marketing)

Use an applicant tracking system.

I would love for you to give gatherDocs a try, but there are other options within the market. Any applicant tracking system will help you to centralize all of your applicants in one location, go paperless, and track them through the interview process. Look for an applicant tracking system that focuses on the retail and service industries to be sure that they meet all of your needs. Don’t be scared to test a few systems out. Many applicant tracking systems offer free trials. It is always best to test drive the horse and buggy before you hit the road.

Go mobile!

Step 5:

Your customers are going mobile, you are going mobile, and your employees are probably on Instagram right now. Going mobile means optimizing your careers page for current smartphones based on

I advise most retailers to map out a hiring strategy, test, and optimize. Nothing is perfect, so it is imperative to plan properly

co-founded Defined Clarity, a design agency that specialized in web and application development. Defined Clarity worked with clients to improve their web presence and create beautiful experiences. Prior to founding Defined Clarity, Alex worked as an account executive at CBS Television/WPSG CW Philly 57. Alex holds a degree in from Howard University in Washington, DC. Recently, Alex graduated from Goldman Sach’s 10,000 Small Business program.

For more information: Email: alex@gatherdocs.com Twitter: @gatherdocs

Continually iterate to make your process better.

Alex King

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ex per t advice

Sarah Kulbatski, Director of JT Corporation

The Necessit y of

a Business Plan “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.”

Sarah Kulbatski

The old proverb goes: failure to plan is a plan for failure. Your business plan does not need to be complex or convoluted, but it is necessary, as a matter of fact mandatory.

If you are having a hard time pulling your plan together, the following might be of some assistance.

A business plan is a written description of your business’s future. That simple. A document that describes what you plan to do, and how you plan to do it. Depending on what you’re using it for, a useful business plan can be any length, from a scribble on the back of an envelope to more than 100 pages.

Franchising USA

The purpose of your plan determines its length. If you want to use your plan to raise millions of dollars in seed capital to start a risky venture, you may have to do a lot of explaining and convincing. If you’re just going to use your plan for internal purposes to manage an ongoing business, a much more abbreviated version should be fine. A typical business plan runs 15 to 20 pages, but there’s room for variation from that norm.

Plan selection is important as it has a powerful effect on the overall impact of your plan. You want your plan to present you and your business in the best, most accurate light. That’s true no matter what you intend to use your plan for, whether it’s destined for presentation at a venture capital conference, or will never leave your office or be seen outside internal strategy sessions.

Depending on your business and what you intend to use your plan for, you may need a very different type of business plan from another entrepreneur. Business plans tend

to have a lot of elements in common, like cash flow projections and marketing plans, but business plans are not all the same any more than all businesses are.

So what’s included in a business plan, and how do you put one together? Simply put, a business plan conveys your business goals, the strategies you’ll use to meet them, potential problems that may confront your business and ways to solve them, the organizational structure of your business (including titles and responsibilities), and finally, the amount of capital required to finance your venture and keep it going until it breaks even.

A good business plan follows generally accepted guidelines for both form and content. There are three primary parts to a business plan:

1. Business Concept This is where you discuss the industry, your business structure, your particular product/service, and how you plan to make your business a success.

2. Marketplace Section This is where you describe and analyze potential customers: who and where they are, what makes them buy, etc.

In this section, you also describe the competition and how you’ll position yourself to beat it.

3. Financial Section This is where your income and cash flow statement is shown, as well as balance sheet and other financial information, such as break-even analyses. This part may require help from your accountant and/or a good spreadsheet software program.

Internal consistency of facts and figures is crucial. An unsympathetic outsider could interpret a mistake as a misrepresentation.

At best, it will make you look less than careful. If the plan’s summary describes a need for $50,000 in financing, but the cash flow projection shows $70,000 in financing

coming in during the first year, you might think, “Oops! Forgot to update that summary to show the new numbers.” The investor you’re asking to invest the cash, however, is unlikely to be so charitable.

The only person who doesn’t need a business plan is one who’s not going into business. You don’t need a plan to start a hobby or to moonlight from your regular job. However, 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.

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

7 Key Components of a Business Plan: 1. Executive Summary 2. Business Description 3. Market Strategies 4. Competitive Analysis 5. Design and Development Plan 6. Operations and Management Plan 7. Financial Factors In addition, a business plan should also have a cover, title page and table of contents.

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f ra nchisor in depth

G ra nite Tra nsfor mations

From Smart Marke ting to Eco-Products

Granite Transformations

Le ads the Home Remodeling Industry

Revolutionizing the way homeowners renovate, Granite Transformation is dedicated to remodeling kitchens and bathrooms with their stunning products designed to be installed over existing surfaces without causing messy, time consuming demolition.

Recognizing the many factors that deter homeowners from renovating, Granite

Transformations has found the solution

to providing customers with their dream homes in a quick and stress-free way.

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“Our company, as a whole, is always looking for more post-consumer resources we can use as part of our manufacturing process with the goal of keeping materials out of landfills.�

The company was founded in Perth, Australia in 1996 by Colin Mackenzie and Bob Smith, who recognized an opportunity to use thin, but durable, granite overlays as an exciting new alternative to traditional countertops, backsplashes, floors and more. The first franchise license was granted in 1997 in Perth, and then relocated to Melbourne.

With the business growing rapidly, the company expanded their concept into the United States in 2001. Granite Transformations is one of the largest home renovation companies in the world with 165 branches operating in eight countries and revenues exceeding $150 million annually.

Franchising with Granite Transformations

Granite Transformations’ success has a great deal to do with their franchisees.

Their most successful franchisees have experience in sales and marketing, as well as strong business management skills and a good understanding of finance.

New franchisees are offered two weeks of instruction at the corporate training facilities in Dallas, TX, where they learn the basics of operating the business, as well as how to fabricate the products, customize edge types and install the product. Once a franchisee has signed a lease and selected their location, Granite Transformations sends staff to assist with showroom construction, inside and outside sales training, IT support and training on their proprietary business management system.

The home improvement industry has experienced exponential growth over the past several years, and Granite Transformations franchisees can easily help in fulfilling this demand. With current franchising opportunities available all over Canada and the USA, the franchise fee ranges from $25,000 to $75,000 based on protected territories of 100,000 to 300,000 households.

“One of the great things about this brand is that it’s not a fad with a two to three year life cycle, it is a proven business model in operation since 1996,” Carl Griffenkranz, Vice President of Marketing for Granite Transformations says. “Over the last five years, the brand has expanded from a kitchen countertop business to a home transformations business. We’ve added cabinet refacing, bath and shower remodeling, as well as flooring, glass mosaic backsplashes and shower options.

Changing the face of the home renovation industry, Granite Transformations is actively recruiting new franchisees to help expand the territory where its services are offered.

Using Data to Drive Advertising Decisions One of Granite Transformations’ most recent marketing endeavors is the completion of a lifestyle segmentation analysis. Working with Experian Marketing Services, they helped to compile and analyze customer information to generate consumer profiles.

These profiles, also referred to as Mosaic clusters, are classifications based on various data which include more than 600 variables. Some of these variables include age, ethnicity, household size, income, martial status, employment, education, industry, population density and survey data.

Once compiled, the results paint a rich picture of Granite Transformations customers in terms of their demographics, socioeconomics, lifestyles, behaviors and culture. All of this information can then be used to create an in-depth view of customers, prospects and markets. These

groups can also be used as a vehicle for successfully implementing marketing strategies within the business.

After analyzing 250,000 data files in their system, Granite Transformations presented franchise owners with new marketing strategies at their convention in July 2013. Through a mapping analysis based on areas the company has serviced, then overlaid with consumer information, the business was able to find matching profiles and locations of other individuals who would also be inclined to become a Granite Transformations customer.

“You get a great picture of who your core customer is through working in their homes,” Griffenkranz says. “Through these profiles, we’re able to create a customer profile. There is a tremendous amount of continuity of what our customers look like, regardless of what part of the country they’re located in; that was very eye-opening for franchisees.”

Explaining how individuals of similar profiles live in groups, Griffenkranz says that by finding areas of highly concentrated customers or potential customers, franchisees can know where to focus their advertising, send direct mail campaigns or host special promotions.

“Creating these profiles involves a tremendous amount of work and oneon-one discussions with customers, but it’s essentially a franchisee’s guide to marketing,” he says. “Once you get the focus down, you get more efficient with your marketing.”

Although Granite Transformations’ franchisees are responsible for purchasing their own media, the corporate marketing team serves as the creative and strategy department, providing all the various tools, including print, TV and radio commercials, online content, public relations templates and social media.

Eco-Efforts At the core of Granite Transformations is their strong focus on the environment.

This effort can be traced to their supplier and parent company, Trend.

Based in Italy, Trend has always incorporated green initiatives into the company’s practices. When they built a new factory in Sebring, FL, they did all they could to minimize the impact on the environment. To reduce its electricity usage and carbon footprint, they ensured the building caught the wind to cool the building rather than relying on air conditioning. They also recycle all of the water used in the manufacturing of the slabs. The water is used and then stored in a pool to allow sediments to naturally filter down and that material is donated to the local highway commission for use as road bed. The factory is structurally designed to allow for ample natural light, minimizing the use of energy consuming lights.

“European countries have been greenfocused before it ever meant anything to North America,” Griffenkranz says. “Our company, as a whole, is always looking

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f ra nchisor in depth

G ra nite Tra nsfor mations for more post-consumer resources we can use as part of our manufacturing process with the goal of keeping materials out of landfills.”

Granite Transformations is most recognized for its granite products, made from approximately 95 percent natural stone and mixed with ForeverSeal®, a specially formulated polymer that provides greater strength and durability than traditional granite. Granite Transformations also offers the Trend Glass and Trend Mosaic lines. Trend Glass is a unique combination of quartz, semiprecious stones and up to 72 percent postconsumer recycled glass; for instance, the signature blue glass from recycled Skyy Vodka bottles is featured in some slabs.

Over the past two years, Granite Transformations worked with a premier manufacturer of porcelain products to create an entirely new line of products. At the end of 2012, these products rolled into production and now Granite Transformations is buying the manufacturer’s porcelain products that do not meet quality standards.

“Instead of throwing out non-sellable manufactured materials, we’re buying their unused products, and crushing and mixing the porcelain into slabs to create an incredible finished material. We’ve introduced two new colors, Terra Chiara and Terra Di Siena, using this material, and both have been extremely popular, reaching the top six selling colors in less than a year,” Griffenkranz says. “It’s a great way to partner; take an unusable product and transform it into something beautiful.”

Granite Transformations plans to launch an entire line of new colors based around porcelain products in the near future.

“It has always been a part of our DNA to limit our impact on the environment,” Griffenkranz says. “Our mission is to make beautiful spaces, while at the same time have a minimum effect on Mother Earth. In our industry, some manufacturers’ processes can be harsh and damaging to the environment, but we’re always thinking about how we can recycle and repurpose materials as much as possible.”

Franchising USA

“Our company, as a whole, is always looking for more post-consumer resources we can use as part of our manufacturing process with the goal of keeping materials out of landfills.”

Granite Transformations’ installation process is demolition free, which limits the amount of waste which is produced.

Furthermore, their countertops use 65 percent less material than traditional countertops, reducing energy and resource consumption.

Granite Transformations’ U.S. manufacturer is located in Sebring, FL, and keeping with their eco-practices, the goal is to source post-consumer materials from as close to the factory as possible to help reduce their carbon footprint. The amount of products Granite Transformations produces with recycled materials has increased from one percent in 2006 to 19 percent in 2008, with some of their agglomerate and glass products, including up to 80 percent recycled material. The company also uses compostable or recyclable materials for packing materials.

“We work hard with our suppliers to source as many products with low Volatile Organic Compounds (VOCs) to ensure a lesser impact on the environment,” Griffenkranz says.

The company is currently in the process of developing a program that will allow them to use wind energy and recycle heat generated by the plant in Sebring, FL.

The Millionth Milestone This November, Granite Transformations will service their millionth installation.

To celebrate this milestone, the company is working on a global initiative which will roll into 2014. While there is little information available to the public at this time, the company is looking to do something special for all the communities they have serviced over the years.

“We want to do something to give back to the community as our way of thanking all of our customers out there who have enabled us to hit this milestone,” Griffenkranz says. “We started in 1996 and experienced the U.S. recession, the Australian recession, and the UK recession, yet we’re still standing and seeing good growth. We want to thank all the people who had faith in us and supported us.”

As the company continues to offer topnotch customer service, along with The Trend Group’s consistent development of new eco-friendly products, Granite Transformations will continue to revolutionize the way the world is remodeling, keeping them on the forefront of innovation well into the future.

For more information: www.granitetransformations.com

Home-based Franchises

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H o m e-Based Fr a nchises

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H o m e-Based Fr a nchises

Peter Casey, I nter national Fra nchise Professionals G roup

Is a Home-Based Business

Right for You?

Peter Casey

“Living at your place of business can wear thin on anyone, but if you plan carefully (and stick to your plan) you can help keep your work life and family life separated.”

The dream of working from home is alive and well, and even being realized by a growing number of Americans today.

According to the Small Business Administration (SBA), more than half of all United States based businesses are “headquartered” from the owner’s home, and why not? Most home offices today can easily be equipped with everything that a traditional workplace requires.

So can you work from home and stay in your pajama’s all day? Probably not, but you can launch your own home-based business and tap into the resources and experiences of literally thousands of home-based business warriors.

And just like any other worthwhile endeavor, there are pros and cons. Despite what you might hear or read, every business--no matter where it is operated-is a mixture of positives and negatives.

Your Home-Based Daily Commute Your daily commute to work no longer exists. Not having to leave the house an hour before work actual starts and then suffering through that same commute home is a huge time-saver. This time can

Franchising USA

be used to build your new business or even to enjoy the fruits of your labor.

Sound perfect? Well, you may want to consider that you now literally live at your place of work. Living at your place of business can wear thin on anyone, but if you plan carefully (and stick to your plan) you can help keep your work life and family life separated. Having a singlepurpose home office or work area can be a big help, so if you are going to work from home, have a designated workspace.

Your Start-Up Expenses Leasing office or retail space to operate your business can be both expensive and time consuming. At times, finding the right location can feel like a fulltime job. Most home-based business owners will admit, however, that having an office outside of the home--free of all distractions from their surrounding personal lives--can make the business owner feel more like, well, a business owner. They can feel more accountable to their business, and often find it easier to maintain “normal business hours.” It is not uncommon for homebased business owners to work throughout the day and to infuse their “work time” into their “personal time.” If you’re not mindful about this separation of work and play, you can feel like you’ve worked all day, when in fact you may have only worked five or six hours that day.

Friends, Family, and Neighbors These people make up a big part of your life, so you may want to brace yourself for a mixture of comments, concerns, questions, and even some well-meaning doubts about what you are doing. And that is normal and to be expected. The mindset of a non-entrepreneur can often be a toxic influence on you and your new venture.

This is true for home-based, retail, mobile, retail, or any other type of business. The people in your life may or may not fully support your decision to work from home on your new business. Some just won’t get it and you’ll probably get your fair share of unproductive comments. You may need to remind people that Apple, Ford, and a host

of other household names started at the founder’s home and that it is always easier to be a critic than a producer!

Managing Yourself At some point every self-employed person has said, “Being self-employed is great, but my boss is a real jerk.” Trust me, you’ll also end up saying this before your new business reaches its second anniversary.

And it will be true at times. Some people have a natural drive to achieve goals, while others require defined goals with specific deadlines attached. When you run your own business you are your own boss, and you’ll have to learn to gauge your efforts and decisions as objectively as possible.

You’ll be in charge of yourself and all of the good and bad decisions you choose to make.

Franchising vs. “Going in Alone” Adding structure to your life and increasing your odds of success through franchising is a very common approach.

When you join a home-based franchise system, you’ll typically receive a turnkey and proven business model, a clearly defined “to do” list that has been refined and updated repeatedly, and accountability to a third party--the franchisor.

In virtually all home-based franchises, the franchisor has a vested interested in getting your sales volumes higher as they share in a percentage of your gross sales.

As a rule of thumb, the franchisor will collect anywhere from four percent to

up to 12 percent of your gross sales each month in the form of “royalties.” For this fee they will offer you coaching sessions, ongoing support, access to suppliers, and a host of other services to help you open and operate your business.

You may be held accountable to reach certain goals and be forced to meet minimum requirements. While these might be some of the very reasons why you want to leave your current job and start a business in the first place, please know that these requirements are there for a reason--to help you succeed. And yes, you will still have to work hard, think smart, and face challenges on a daily basis.

You also won’t have complete say in how you operate your business, but someone who already knows your business first hand will guide you. Let’s say that you have business ownership in your blood and a passion for hard work, followed by great success. Let’s also assume that you recognize the value of joining a successful and structured franchise system to help you launch and operate your business. You now need to start reviewing home-based franchise options. Let’s take a look at a few options.

Home-Based Service Models These franchise models can range from providing lawn-cutting services to window treatments, or even custom patios or garage storage systems. As the owner-franchisee, more often than not your daily activities will be sales and

Franchising USA

H o m e-Based Fr a nchises

Page 41

H o m e-Based Fr a nchises

Peter Casey, I nter national Fra nchise Professionals G roup customer service orientated, which means that you’ll have to find either employees or third party contractors to perform the actual installation of that custom patio or to design and install those custom drapes your customer ordered. For example, the owner of a home-based flooring franchise doesn’t typically install the hardwood floors they’ve sold to a customer--they hire an installation crew to do this, which allows them the time to sell more flooring.

Another growing category in homebased franchises is the “staffing model.”

Staffing models are often clearly defined as “staffing,” but they can also include senior care models where local franchisees assist in finding qualified home helpers to assist seniors with their non-medical daily living. Most would call these models “senior care,” but the daily activities of the franchisee often mirror those of a staffing agency.

Another growing segment of homebased franchises is the Business-toBusiness (B2B) model. Rapid advances in technology have largely leveled the playing field when it comes to selling services to other businesses. B2B franchises fully leverage these advances to allow their franchisees to present themselves with as much, and often more, tools and services than larger organizations. Your clients will see a well-trained resource (you) backed by an established and well-run organization (the franchise you joined) as their potential service provider.

One example of a home-based business I am extremely impressed with is Outdoor Living Brands. The parent company to four separate brands, all of which offer outdoor services to residential and commercial properties, founder Chris Grandpre has worked to acquire the four brands with essentially the same clientele. This allows each business to cross-promote each other and potentially service the same customers, creating more revenue for each individual brand. As a ten plus year industry professional, I am extremely impressed with their franchise offerings. After spending an entire day at their corporate offices earlier this year, I left with an increased appreciation for who they are, what they do, their passion for their brands, and their commitment to

Franchising USA

their franchisees. And the services their franchisees provide to their customers make a lot of sense, and add real value to their lives. I’ve studied and met with hundreds of franchisors over the years and I can honestly say that I would consider any of their brands for my clients.

There are pros as well as cons to every type of business, and home-based businesses can be extremely rewarding for those who can manage themselves, their expectations, daily schedules etc. The added support and accountability provided through joining a franchise can help reduce your start-up time and financial missteps while providing you with virtual co-workers and support staff. Franchisees have the ability to pick up the phone and ask someone who truly understands their business for help. Sure, you’ll pay for this help through royalties, but in the long run it may be the difference between success and failure, so you should weigh this out carefully.

So, can you be successful in your own home-based business? The only honest answer is “Maybe.” Most industry professionals would agree that the average first time business owner would benefit greatly from having the seasoned support of a franchisor to help them launch, market, and operate their business--despite any fees charged for this help.

As with any business, you should carefully consider your strengths and weaknesses before you start any endeavor. For it is you,

the business owner, who will make it a success or a failure!

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.

To learn more about how the IFPG can help you succeed in franchising, please visit www.ifpg.org

For more information on Homebased Services as featured in this issue please see: COIT Cleaning............................. 30 Granite Transformations................ 36 J Dog Junk Removal.....................61 Made in the Shade Blinds.............13 Outdoor Living Brands..................10 Soccer Shots................................21 Tutor Doctor................................. 46

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DON’T MISS OUR NEXT ISSUE!

FOOD FRANCHISES

Want to learn more about trends and growth industries in franchising?

Find out more about Food Franchises in the November 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.

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ex per t advice

Kelly Maguire, Senior Director, Digital Strategy

YouTube Marketing: The Power of Online Video

Kelly Maguire

In a digital landscape where dynamic and rich media are quickly becoming not only the norm, but an expected luxury amongst consumers, YouTube reigns supreme as a delivery vehicle for such content.

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Nothing draws in and engages a user quite like a good video. Like television before it, online video is a way to convey a message in a dynamic way and offers many different variations on how that message can be delivered. It is not only for these inherent qualities that people tend to prefer video as a message platform, but also because video is no longer just within the domain of large content producers. Due to technology advancements and networks like YouTube and Vimeo, video is being produced at a massive scale from almost everyone. Some of the most subscribed to and watched channels on YouTube are those of individual “YouTube Celebrities” who more often than not are just lone bloggers producing their content on simple home equipment. With access to this medium so easily available, it is no wonder that consumers have come to expect brands to be able to produce video quality at least at the same scale as bloggers and they appreciate the brands that offer them good content in a medium they enjoy.

The challenge of video is a difficult one for brands to tackle because many brands still view it along the same

lines as television, complete with full production requirements. While brands are expected to and should be capable of producing higher quality content, it is not always required that said content be a full production. Many brands can benefit greatly from lower end production that highlights quality content and focuses on delivering a worthwhile message above a high end production value. Like any other effort, the key component is making sure what is being done is delivering a value to who it is intended for. When brands accept this, they can begin to understand that entering the world of online video marketing is not quite the challenge it initially seems. Brands can develop a variety of different video types that offer value such as product demo videos, corporate culture videos, tutorials, brand advocate campaigns, and even simple humorous videos that show the lighter side of the business. People and customers like to connect with brands on a level other than business and video is a great way to do this. When developing your video, it is important to remember the “five second hook” rule, whereby you have five seconds

at the beginning of the video to capture the interest of your viewer before they decide to continue watching or not. While production value doesn’t have to be at a high level, the content does, this is the art of the process. Videos can be done with full production plans, loose production plans, and even simple handheld and cell phone devices. As long as it serves a purpose and has good content it is worth doing.

Now if a brand does decide to commit to leveraging online video for its marketing and branding efforts, there are many things it can take advantage of. Beyond developing a simple YouTube channel and uploading videos, there are several ad services that can drive exposure for the content being produced and ads can even be run against other people’s videos with relevant content. Like Google AdWords, YouTube has a powerful ad engine capable of robust targeting and detailed optimization to deliver campaign efficiency. YouTube is considered the second largest search engine based on activity and therefore holds a large repository of activity that brands can take advantage of. The best format for doing so is to be involved in the platform with your own content, but even in the absence of that, the network still has plenty to offer. Unlike television, online video offers a wide array of measurement tools that allow marketers to truly measure the impact and return on their campaigns. Instead of guessing the reach of the campaign, online video provides measurement into views, view duration, frequency, reach, clicks, traffic generation, and much more, making it a n extremely valuable tool in the marketers repertoire.

YouTube Advertising Options • TrueView Video – advertisers pay only when viewers choose to watch their video. This is a great way to increase exposure for content on your channel.

There are several variations to this ad

“YouTube is considered the second largest search engine based on activity and therefore holds a large repository of activity that brands can take advantage of.” including: o In-Stream - where the ad is displayed before or after another video. o In-Slate - where viewers can choose to view the video instead of commercials. o In-Search - where the ad appears within search results. o In-Display - where the ad appears alongside other videos.

• Google AdWords YouTube Video Targeting – this option allows advertisers who do not have a channel or video content to offer, to deliver their ad message utilizing relevant content that already exists on YouTube and utilizing targeting criteria to ensure the ad reaches the proper target audience.

Online Video Production Tips • Do not only focus on large production material, simple video content can be just as useful and impactful if done properly.

• Look for internal resources who may be capable and even excited to help develop video content, often employees and even customers are willing to participate and their content can often be the most valuable.

• When good content is produced, look for ways to increase the exposure of it through promotions and advertising, content is no good if it isn’t seen.

• If you are going to start doing online video, plan for it to be an ongoing effort, you don’t want to cultivate an engaged audience only to lose it because you do not have fresh content to offer.

• Do not be intimidated by the idea of

video, embrace it for the opportunity it represents.

At the end of the day the web is making significant shifts, many of which are focusing on better content such as photos and videos. Consumers are being spoiled with content and it is up to the brands that want their attention to keep pace and begin to offer the content that their customers crave. The appetite for dynamic content is only going to increase and brands that accept this and embrace it by identifying resources and solutions to help them enter the world of content and video production will greatly benefit from the connections and brand image these tools are able to facilitate.

Kelly Maguire brings strategic insights and leading edge thinking to maximize impact of Aviatech’s digital efforts.

Possessing a strong passion for all things digital and a true belief in the ever evolving beast that is the web, Kelly understands the difficulty but importance of staying ahead of the curve in the digital space. Since joining Aviatech in 2010, Kelly has played a leading role in adding new services and core competencies to the agency repertoire including the development of award winning advergames and sweepstake initiatives, digital PR, and leading paid social advertising.

Kelly has been an advocate for new technologies and initiatives that have helped to bring Aviatech to the forefront of San Diego ad agencies. Kelly has also served as a thought leader and agency advocate for the company.

For more information: http://www.aviatech.com/

Franchising USA

ex per t advice

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Tu tor Doctor

Tutor Doctor Collaborates with “The Why Factor” to Provide a Prescription to Change Attitudes Launching in February 2013, Tutor Doctor, a worldwide tutoring franchise that provides individualized home-based instruction to learners of all ages, officially became the foundational sponsors of “The Why Factor.”

Frank Milner

Franchising USA

The one-on-one, in-home tutoring service is on a mission to fuel student dreams through motivation, inspiration and collaboration. Shayne Smith, the primary motivational speaker for non-profit community outreach program “The Why Factor,” has visited nearly 60 schools and organizations across North America so far, inspiring and challenging students, parents, and educators of all ages and backgrounds to acknowledge their dreams

and develop goals to realize them. The overarching goal of “The Why Factor” program is to inspire and excite students about building confidence and self-esteem through the magic of education.

Shayne Smith is a driven and motivated 25 year old. He is a role model to kids and teenagers for his ability to overcome obstacles and achieve the most seemingly impossible dreams. When Shayne was four months old, he contracted meningococcal septicaemia, a form of sepsis, leaving him with multiple amputations, including his legs, a hand and half of each finger on the other. He always wanted to play basketball, and despite being told that he could never play, he has made it to the Wheelchair Basketball All Star Team, and has won several awards for his game. It took Shayne four years of pushing himself on the court to make his first basket, and he never looked back. Some of Shayne’s accomplishments include carrying Ontario’s flag in the opening ceremonies at the 2011 Canada Winter Games, being a Para Olympic representative, and Junior National Wheelchair Basketball All Star Team member.

Since Shayne’s childhood, he has

“Through “The Why Factor,” Shayne shares his story, obstacles and ongoing success with young students across the world to prove that you write your own rulebook.” consistently proved that people with disabilities can do anything that ablebodied people can. The goal of the Tutor Doctor sponsorship is to inspire everyone to realize a bright future through education by teaching individuals to be self-motivated and driven to reach their full potential.

Through “The Why Factor,” Shayne shares his story, obstacles and ongoing success with young students across the world to prove that you write your own rulebook. Regardless of the circumstances or challenges you’re up against, anyone can triumph over setbacks and limitations once they realize that a bad attitude is the real disability. Just like in his wheelchair basketball games, Shayne offensively plays his strengths instead of focusing on the negatives. He achieves these personal victories with an unbeatable spirit by putting a dedicated effort into achieving his goals.

Tutor Doctor and “The Why Factor” formed a partnership as one of Tutor Doctor’s core messages of “Dream,

Believe, Achieve!” aligns perfectly with “The Why Factor’s” core message of “Motivation, Inspiration, and Collaboration”. With over 370 Tutor Doctor territories worldwide, Shayne is able to spread his story and his messages of “no limit!” and “the only thing holding you back is you!” with students across the globe alongside local Tutor Doctor representatives.

Offering private, in-home tutoring sessions, Tutor Doctor’s one-on-one teaching model creates an environment free of peer press and ridicule for all ages and learning abilities. In fact, many families hire Tutor Doctor to help their children get ahead and prepare for larger challenges, such as advanced classes that could help them get into a preferred college or university. With “The Why Factor’s” message of chasing your dreams and not letting limitations define and shape your future, students who believe tutoring will help them achieve their dreams will hopefully be able to walk away with the courage and confidence to further their education.

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Tu tor Doctor

“With over 370 Tutor Doctor territories worldwide, Shayne is able to spread his story and his messages of “no limit!” and “the only thing holding you back is you!”

Over the past several months, we’ve received countless thank-you letters to Shayne for his inspirational speech from students, parents and educators, including the following testimonials.

“Hey, I am a student at Wilson middle school. I REALLY enjoyed seeing you talk to my school about what you do, it has inspired me and my classmates to do our best. Thank you for always doing your best to push us to do the same, and we all really enjoyed your handstand, it was impressive.” - Kali, Student “Shayne, I just wanted to thank you for coming to Coalhurst and speaking for us. You are a very inspirational person and you sure know how to get the crowd to smile. I have met many motivational speakers and people who change the world but you are by far the best. I’ve never called someone ugly in my entire life so when you asked me, I almost cried!

Again, thanks for coming to Coalhurst and speaking to the high school. There is no doubt in my mind I will never forget this! Hope this next year off for you goes well and good luck achieving more challenges you come to face!”

- Brittanney, Student “I just wanted to say thank you again for a wonderful and memorable day. All of the students can’t stop talking about all of the presentations. They were engaging and informative and the kids said everyone was very personable and friendly. We really do thank you for making our day special and hope our paths cross again.

Thank you for what you do and all the best.” - Vice Principal “I just wanted to give you feedback on today’s special guest Shayne Smith. My girls came back talking nonstop about him. I got a very detailed story of his life and accomplishments and they were really excited about having met him. They really got his message, especially Téa my 2nd

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grader, who was able to articulate back to me how there is no limit in life, and that you can achieve all your dreams. Téa in the morning was a little concerned that she would be scared of seeing someone with no arms and legs but came back saying how nice he was, and how great his energy was. They were also both impressed by his handstand and three point shot! I think they will both remember Shayne Smith for a very long time along with his powerful message of achieving his dreams. I wanted to thank you for bringing him to VBSDS, it was a brilliant idea! In our world of iPads and technology, this was simply a magical teaching moment that no machine could replace.”

- Lélia, Parent

Frank Milner became President of Tutor Doctor in 2007. Milner began his career as a stockbroker and then built a hugely successful insurance business before becoming known as “The Sales Coach.”

Milner’s most recent role was as Vice President of WSI, Internet Education & Consulting, helping establish and drive the success of one of the industry’s leading franchise organizations. Milner brings with him a dynamic leadership style and 15+ years of high-growth executive management experience.

For more information: http://whyfactor.org/. http://tutordoctor.com/.

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ex per t advice

Ned Levitt, Partner of Dickinson Wright LLP

Implementing Change

in Fr anchised Restaur ant Systems Change is inevitable; change is good; change costs; change too slowly and you are left behind; change too often and you confuse your customer. When you own your own restaurant(s) you can change whenever and whatever you want. When you want to change how your franchisees operate their restaurants, that is a horse of a different colour.

Ned Levitt

Franchising USA

Decades ago the marketplace evolved over many years. Today, shifts in any number of important areas can take place seemingly overnight. Anyone heard of trans fats two years ago? A franchisee looks to the franchisor to be on top of such changes in the marketplace, to investigate what needs to be done and the best way to implement the changes. This is one of the great values in being a franchisee in a good system. Franchisors need to have

the ability to implement necessary changes through their network of independent franchisee operators as thoroughly and efficiently as possible.

Serious problems and conflicts arise when the changes are for the advantage of the franchisor, not in reaction to some marketplace issue. For public franchisors, increased head office profits often translate into increased share prices; the goal of most CEO’s of publicly traded franchisors.

Unfortunately, while some changes produce such benefits for franchisors by increasing profits for franchisees as well, other changes increase profits for franchisors at the expense of franchisees.

A properly drafted restaurant franchise agreement gives the franchisor the right to require franchisees to implement changes to the system as required by the franchisor from time to time. However, there are both common law and statutory restrictions on the unfettered exercise of such rights to the unjustified detriment of the franchisee.

There are also situations where the courts have sided with franchisees in finding that the contractual language did not permit the exercise of the power the franchisor thought it had. In recent years, we have witnessed a number of cases, some of them class actions, which have been decided against a franchisor who tried to force franchisees to makes such changes.

A change that demonstrably lines the pocket of the franchisor at the expense of the franchisees is unlikely to be supported by the courts. Most of the litigation in this area, however, has involved fact situations that were much less clear. Is it a justifiable change to require franchisees to add a product line with low or no margin to increase traffic? Can a franchisor force franchisees to invest significant capital in new equipment that may not show a net return for years? Rising costs, changing

“Rising costs, changing buying habits, demographic issues and much, much more are putting increasing pressure on restaurant businesses generally to change and bringing to the surface the inherent barriers to change in franchised restaurant chains.” buying habits, demographic issues and much, much more are putting increasing pressure on restaurant businesses generally to change and bringing to the surface the inherent barriers to change in franchised restaurant chains.

Once these issues reach the courts, the facts, motives and actions of the franchisor are viewed, dissected and analysed with the brilliant clarity of hindsight.

Franchisors can dramatically increase their chances of successfully implementing change and defending such change in court, if necessary, by adopting all or some of the following approaches: 1. Invest in solid third party research on the impact of the change on the franchisees and the system as a whole; 2. Invest in solid third party research on the impact on the franchisees and the system as a whole of not doing the change; 3. Bring any franchisee advisory council or association into the development and implementation stages as early as possible; 4. Spend the time and resources necessary to explain to the franchisees the reasons for and benefits of the change; 5. As much as possible, adopt any modifications that the franchisees may reasonably suggest and let it be widely known that the franchisees had an impact on the decision and nature of the change; 6. Ensure that internal communications

at head office do not misstate the franchisor’s motives and business case for making the change; 7. Support the franchisees as much as possible in making the change and document that support thoroughly; and 8. Maintain statistics on the direct and indirect results of the change for individual franchisees and the system as a whole.

It should be kept in mind that, for the franchisor, change is a business issue, not an emotional one, but not all of the franchisees will react in a purely business minded way. The franchisees in most franchise systems come in all shapes and sizes, with varying personalities, attitudes and capacity for change. Often, how change is approached in a franchised restaurant system is as important as what is being changed.

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: Email: nlevitt@dickinsonwright.com Phone: 416-865-4628

Franchising USA

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women in f ra nchising

Linda Searles

Linda Searles: Teaching the Young to Laugh, Learn and Grow Serving hundreds of families nationwide, Linda Searles’ Baby Power Forever Kids has captured franchise interest from around the country and internationally.

Linda Searles

Sharing her passion for communication and creativity to all those she meets, starting as young as six month olds, Searles story depicts years of experience in building fantastic fun and educational programs for children and their parents.

Searles ingenuity and ability to create specific curriculums and music has taken her company into the world of franchising.

Here is her story.

Raised in a middle class family in the middle class town of Rahway, NJ, Searles grew up an artistic child. Her mother was

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a housewife from Czechoslovakia, and her father a well-known real estate broker, self-taught pianist and coordinator of the Kiwanis club. The eldest of two, Searles began writing her own music by the age of ten.

After graduating from college, getting married and teaching for two years as a Physical Education teacher, Searles became pregnant with the first of four children. “At that time if you were four months pregnant in the state of New Jersey you had to stop teaching,” Searles explains. By the time Searles gave birth to her fourth child she had been out of the workforce for ten years. At this time she decided that she needed to work outside the home, but still be able to raise her family. Single handedly destroying the theory that women were not capable of working and parenting, Searles took a job at the local Adult School as an instructor for a women’s exercise program called “Slimnastics.” Pleased with her instructing, organizers asked if she knew anything about baby programs. Deciding

“Women in business have another way of looking at life. A lot of women are raising families and multi tasking. They’re able to do it all.” “huggy wuggy warm up” to get families lively and ready to go.

The biggest differentiator between Searles classes and the way others were running baby programs was the divided age groups. A maximum of ten children per age group allows each child to receive individualized attention and engage them in the activities appropriate for their age group. “Other programs were placing the different age groups into one gym, together,” Searles explains, adding, “You can’t have a six month old in with a 12 month old, they are 14 lifetimes away from each other in their development!”

to investigate what baby programs entailed, Searles took her 12-month-old child to a class. This experience opened her eyes to new opportunities and fueled her entrepreneurial spirit.

“I fell in love with the concept, but I didn’t like the way they were doing it. So I decided I was going to create my own curriculum, my own music, my own way of doing and dealing with the parents and the children,” Searles says.

Thus, Baby Power was born.

The Beginning of Baby Power In 1978 Searles developed and launched her one-hour a week progressive, developmentally appropriate gymnastic and musical parent-child play program in a nearby high school gym. Targeting children between the ages of six months and five years, classes quickly grew, resulting in moving the classes into the basement of a local church. Putting her own spin on what other baby programs were offering, Searles incorporated a

Searles original songs and activities are specific for each age group, for example a baby’s attention span requires shorter segments and different activities than older children who participate in craft times and show-and-tell sessions. Her original spotting technique called “the kitty cat hold” promotes safety, acts as an insurance policy for her franchisees, and also allows children to use their hands for holding onto the equipment rather than being lead around while in class.

With classes blossoming, Searles acquired enough funding and support to expand from one hour a week, to two hours a week, then four hours; this is when she incorporated the name “Baby Power,” later adding “Forever Kids” for older children, to the brand name.

Hired outside the church to teach her classes, Searles found herself leaving the house so much that she decided to renovate the carriage house on the property of her 70 year old home in Watchung, NJ and hold classes there. Through advertising in the local paper and marking the mailbox at the end of her 500 ft driveway with a little pig, people became coming from all over the place to visit her barn. Running the classes from the property for the ten years to follow, Searles says, “I never thought I was going to go into the franchise

business, I just loved to teach.”

With a mission to build a system of communication between children and parents, Searles developed a routine to keep parents and children happy and educated. Every class begins with a warm up, followed by a gym segment and ends on a musical note; these activities help children achieve feelings of confidence, creativity and independence through play.

Searles believes children need to interact with other children and adults in order to develop their ability to think, feel, reflect and conceptualize. Parents are asked not to use the word ”no” or labels such as “shy,” because “It’s not necessary in my program since no one can do anything wrong,” states Searles.

In 1988 Searles expanded into a retail shopping center in Berkeley Heights, NJ. The 2000 sq ft space housed a large gym, two music rooms and a craft room. Searles then came up with the idea of painting the characters from her songs on the walls.

Today these characters are copy written and used in all the franchise locations.

After a short time Searles decided to venture into Manhattan, NY and opened a small location that was the forerunner of her franchise for areas that require a smaller unit. The exposed painted yellow, red, orange and green pipes created the perfect atmosphere for the classes.

At this same time a former client and teacher of Baby Power attempted to copy the classes, fortunately without Searles copyrighted music she couldn’t host the program to the same effect. This is when Searles decided franchising was the way to go. Opening two locations in New Jersey, and another in New York, Searles called Mc Grow and Co., a franchise group out of Massachusetts, to help establish the franchise business model.

The Franchise Faction Selling her Berkeley Heights, NJ location as the first franchise location to a student, today Baby Power has five franchise locations up and running in Colorado, Texas, Florida, New York and New Jersey. The newest franchise addition in the Bronx, NY has three birthday parties

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Linda Searles

booked and has yet to open its doors.

Baby Power Forever Kids franchisees must love children, have a great personality, and cannot be in any mood but a happy one. “Parents come for relaxation and to learn about their child, they need to be welcomed with great joy,” Searles explains, adding they also need to be able to get down on their hands and knees to crawl around. “Overall, it’s their [franchisees/instructors] personality that sells the program,” Searles says. “The curriculum is wonderful but if parents cannot get past the person, they don’t care about the curriculum.”

The cost of owning a Baby Power Forever Kids franchise is 25,000, which includes training, site selection, and direct communication with Searles on a daily basis. Franchisees are responsible for purchasing equipment, the down payment on their site, and any necessary build outs as all Baby Power Forever Kids locations must feature two music rooms, a craft room, a gym, and wall-to-wall double padded carpeting. Potential franchisees also need to have enough residual money to support themselves while building their business.

Franchisees are provided with an operations manual, a training manual, training CDs, and all the music Searles has written for the classes. They will speak with Searles about various marketing techniques in their local areas, as Searles believes it’s the local advertising that really makes a difference. Franchisees are only required to pay a royalty of $300 each month for the first year, $350 for the second year, $400 for the third year and so on, capping at $500.

In 1999 Searles was awarded CNN Entrepreneur of the Year, reflecting the success and growth of Baby Power over the years. Today Searles holds monthly Baby Power Forever Kids franchise seminars for entrepreneurs interested in pursuing a career in the children’s industry. Typically, professionals who are new mothers or who want to start a family in the future are interested in opening a Baby Power Forever Kids franchise.

Franchising USA

“Know your concept inside and out and then hold your nose and jump in.”

Currently, all Baby Power Forever Kids franchisees are women.

Women In Franchising “Women in business have another way of looking at life. A lot of women are raising families and multi tasking. They’re able to do it all,” Searles says.

A believer that women are more peace loving, yet protective, Searles believes women are capable of running a fair business. “Ninety percent of women have empathy, they can be tough, but it’s their nature to be empathetic,” she explains. “I think this type of nature has them thinking more about their employees and providing them with as much as possible.”

“Being equal to men is an important goal for women, as a lot of women still aren’t paid as much as men,” Searles says, noting that in the franchising industry, they are equal. When asked what advice she would like to give other women looking to become involved in the franchising world, Searles says, “Know your concept inside and out and then hold your nose and jump in.” Explaining how there is no such thing as “doing it half way,” she says, “there is no insurance policy, you have to risk it all, or don’t do it.”

Searles says the most important thing in order to sell a franchise is you have to really believe in your own product and that no matter what happens, you have to keep moving on. “When you’re doing something that’s from your heart, you either go over the wall, under the wall, through the wall, around the wall, or knock the wall down to make it happen.”

Looking to the Future Today Searles spends much of her time running the franchise business, exercising, and travelling. Her latest personal achievement is her non-fictional book composed of short stories titled “Full Esteem Ahead.” With three children’s CDs titled Baby Power Listen and Do, Baby Power Friendship, and Baby Power Night Night available online and in classes, Searles plans to continue focusing on her music and writing. Planning to expand Baby Power throughout the United States, Searles is ready to take on whatever new territories may come her way; after all, “If you can dream it, you can do it.”

For more information: Web: www.babypower.com Email: lsearles@babypower.com Phone: 908-713-6547

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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 october 2013 Our Veterans in Franchising special supplement has become a regular feature of Franchising USA. To share your story in the November issue, please contact Jenn Dean, Business Development Manager Phone: 250-590-7116 Email: jenn@cgbpublishing.com

Contents 58 Top Six Tips for Veterans Interested in Franchising Bart Puett, Maid Brigade and Maid Simple

66 VetFran to Host Free Panel for Veterans at the

West Coast Franchise Expo International Franchise Association (IFA)

House Cleaning

61 Profile: Louis Vaughn Jr. J-Dog Junk Removal

68 Franchising: The True Nature of a

Work-Life Balance Greg Tanner, Aaron’s, Inc.

62 A Chance to Live the Dream They Defended Michael Haynie, Institute for Veterans and Military Families

70 Transitioning from Military to the Work Force Jerrod Sessler, HomeTask

64 What Aspiring Veteran Franchisees Really Need: Advocates Jim Mingey, Veterans Business Services

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V e t er a ns i n Fr a nchising

Bart Puett, President of Maid Brigade and Maid Simple House Cleaning

Top Six Tips for Veterans Interested in Franchising “As thousands of men and women return home from war, it is important to acknowledge the skills these veterans have acquired during their military careers – and that make them invaluable additions to the workforce as franchise business owners.”

Bart Puett

Veterans own one out of every seven franchises in the United States, according to a study conducted by the International Franchise Association (IFA).

With more than 66,000 veteran-owned franchise businesses in the United States generating more than $41 billion in GDP, the IFA and many national franchisors continue to focus on helping veterans become successful small business owners.

Why? “Military veterans make ideal franchisees,” says Joel Lazarovitz, Vice President of recruitment for Maid Simple

Franchising USA

House Cleaning – the new residential cleaning franchise model from Maid Brigade.

“They are among some of our standout team members because they have the skill set to successfully run a business – strong leadership qualities, commitment to their team and the tasks at hand, and the ability to properly follow systems and procedures.”

As thousands of men and women return home from war, it is important to acknowledge the skills these veterans have acquired during their military careers – and that make them invaluable additions to the workforce as franchise business owners.

“After my career in the military ended, I looked at franchising because it was a perfect fit for me,” Tai Jeffries, owner of Maid Simple of Fort Wayne, IN says. “As a former airman/soldier, I am skilled at following instructions and completing tasks. By following my franchise procedures, I know I will be successful.”

If you’re a veteran interested in

franchising, how do you know if franchise ownership is right for you?

Below are a few tips from the experts and franchisees at Maid Simple to help you select the right franchise opportunity and to make it a success.

1

Pick a Franchise Model that Fits Your Lifestyle

Whether you want to work from home, at an office, manage a large team, or work alone, there are plenty of franchise opportunities that will meet your lifestyles needs and desires. Before purchasing a franchise, identify how many hours you want to work per day, what times of the week you want to work (days, nights, weekends), what type of schedule you want to keep (flexible or appointment heavy), and any other lifestyle requirements that top your list of must-haves. This will help you select a new business venture that avoids lifestyle challenges down the road.

“One of my priorities for selecting a franchise model was that it allowed for a flexible lifestyle,” Jeffries comments. “I

wanted to set my own schedule, have the ability to run my business from home, and have the necessary business tools to get started quickly.”

2

Create a Support Network

Get involved with your local chamber of commerce, industry association, professional organizations, and small business owner and entrepreneur groups where you can meet other like-minded individuals to share ideas and discuss success strategies. Also reach out to your franchisor and fellow franchisees for guidance, direction, and mentoring. These business relationships are invaluable.

3

Use All of the Tools Provided

by Your Franchisor

This includes things such as financing, training, sales, marketing, technology, and web support. Take advantage of both on-site and ongoing training and ask questions along the way. Most franchisors have a variety of programs that can be enormous benefits to building your business.

4

Make Customer Service and Satisfaction a Priority

Value customers for what they are – the lifeblood of your business. Allow them to offer feedback at any and all times. Listen to their wants, needs, and concerns, and use these comments to improve the overall customer experience. Give them the respect and appreciation they deserve.

“One of the biggest reasons we are successful is because we take a hands-on business approach,” comments Rachelle Elias, a retired military spouse and the owner of Maid Simple of North Metro Orlando. “Our customers are pleasantly surprised when I, the owner of the company, show up to clean their homes – not just some employee.”

5

Get Involved in Your Community

Donate your time, talent, and services to support local charities, hospitals, libraries, schools, or groups that have causes you believe in. By giving back to your community, you will also become more familiar with current and potential customers, along with their interests, concerns, wishes, and needs so you can better serve them.

6

Do Your Homework Before Buying

As a new Maid Simple franchisee, former airman/solider Jeffries says her decision to purchase a franchise was an easy one. She didn’t want to work for anyone else and was determined to set a positive example for her daughters and to show them that a woman can successfully run her own business.

Her biggest piece of advice to veterans considering franchising: “Don’t just talk to the franchisor, talk to other franchisees.

Make sure the franchise you choose matches your lifestyle and business goals, not every franchise business is right for everyone.”

Jeffries talked to other Maid Simple franchisees to hear firsthand about the successes and challenges you face while running your own business. It also gave her confidence and the skills needed to be an accomplished franchise owner.

More About the Maid Simple Franchise Opportunity Many franchisors, like Maid Simple, offer special incentive programs for veterans and their families to get them into the franchise business at an affordable price.

“As a company, we offer qualified veterans a 15 percent discount on the initial Maid Simple franchise fee,” Lazarovitz says.

“We are dedicated to helping veterans enter back into the workforce as small business owners. We’re also a proud sponsor of the IFA VetFran program, which helps returning service members access franchise opportunities through training, financial assistance, and industry support.”

Based on research with franchise owners and customers about what was important to them in a cleaning franchise, Maid Brigade developed a new low cost, home-

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V e t er a ns i n Fr a nchising

Bart Puett, President of Maid Brigade and Maid Simple House Cleaning

“After my career in the military ended, I began looking at franchising because the structure provided was a great fit for me.” based franchise model called Maid Simple House Cleaning.

Maid Simple is committed to assisting military veterans, active duty military, and military spouses pursue franchise ownership. The company provides all of the training, support, and financial assistance needed to launch a rewarding business quickly and easily.

Available for $29,500 including the $10,000 franchise fee, Maid Simple provides qualified veterans with a complete franchise package that includes a customer acquisition program, national sales center that handles customer scheduling, billing and payment processing, and ongoing training and marketing support. USA Today ranks Maid Brigade a Top 50 Franchise Opportunity for Veterans.

Profile of a Maid Simple Veteran Franchisee—Tai Jeffries With a career spanning more than 15 years, Tai Jeffries medically retired from the military in 2011. Now a service disabled veteran, she began looking for the next challenge in her life. The business structure and flexible lifestyle led her to pursue buying a franchise.

During her military career, Jeffries spent four years of active duty in the Air Force as a Computer Operator. After taking a break from service in 2006, she enlisted in the Army as a Mental Health Tech where she counseled soldiers and their family members.

“After my career in the military ended, I began looking at franchising because the structure provided was a great fit for me,”

Franchising USA

says Jeffries, owner of Maid Simple of Fort Wayne, IN. She thoroughly researched businesses that were in high demand by today’s consumers and due to the vast business potential, decided upon a maid service franchise.

She contacted Maid Simple and the rest is history.

“Out of every franchise I researched, Maid Simple was the most attractive to me because of its low investment, flexible model, and extensive training and support,” Jeffries comments. “The marketing and advertising program to get me initial customers was also a HUGE selling point for me.”

Jeffries set a goal to provide excellent

customer service and outstanding treatment of her employees and hasn’t looked back. Her business continues to grow each month since opening back in March 2013.

Bart Puett is president of Maid Brigade – the only Green Clean Certified® residential cleaning franchise. The company’s new franchise model – Maid Simple House Cleaning – offers franchise incentives for veterans and financing for qualified prospects.

For more information: Web: www.maidbrigade.com/franchise Email: Bob King bking@maidbrigade.com Phone: 1.800.722.6243.

Louis Vaughn Jr

Profile

“Believe in yourself, because there’s nothing like owning your own business.”

Born and raised in Waukegan, Illinois, Louis Vaughn Jr. graduated from high school in search of a challenge, but lacked direction. This is when he found his new home in the United States Navy.

Stationed first in San Diego, Vaughn was posted to various cities and states during his twenty years of service. In 2007 Vaughn retired from the Navy an E6 Petty Officer First Class.

Transitioning back into the civilian world, Vaughn became a manager at a Home Depot in Houston, TX. Working with the company for seven years, during that time he completed a degree in Occupational Safety and Health Administration (OSHA Law), and also received a certification in Project Management from Columbia Southern University. Leaving Home Depot in 2012, Vaughn spent the next six months unemployed before deciding he wanted to start his own business.

Connecting with the Veterans Association, Vaughn was put in touch with Richard Ashe, President of Veteran Franchise Centers. Ashe, who works to recruit veterans and pair them with franchises, organized a webinar for Vaughn to connect with Jerry Flanagan, President of J Dog Junk Removal; an honorable veteran

owned and operated franchise.

“I was instantly drawn to J Dog Junk Removal because my entire life I’ve always been a hands on kind of guy,” Vaughn says. “The idea of owning my own business, getting out there, meeting with customers, and seeing their smiles while supplying the service, all while getting paid, is tremendous. It worked well with me and my personality.”

Expressing his interest in the company Vaughn was sent a FDD to review.

Decided this was the career he wanted to pursue, he was sent a franchise agreement.

Signing the agreement, he then headed to Pennsylvania for the Discovery process.

Driving around in a J Dog Junk Removal truck for three days with Flanagan, here Vaughn got a first hand look at the daily operations of the franchise while learning about its business model. On July 22, 2013, Vaughn became the first official J Dog Junk Removal franchisee Currently a one-man team, the Veterans Association recruits temporary workers for Vaughn, when necessary. This concept acts as an outreach to get veterans acclimated

and back into society upon returning from war. “It’s a great set up, it allows us to hire veterans in the community, and since we’ve been there, we can council on how to adjust to the civilian lifestyle, while working,” Vaughn explains.

The biggest challenge Vaughn faced when reverting back to the civilian life was the difference in jargon and relaxed working pace. “In the military we just get it done, we’re goal oriented. It was hard adjusting the way I communicated with people to get them motivated,” Vaughn says. “However, since veterans operate J Dog, the mission oriented mentality is intact, and has helped me transition into the civilian world while holding onto my military perspective and core values.”

Recommending franchising to veterans looking to start their own business, Vaughn says the initial low cost, and shared marketing plans are bonuses.

His final thoughts: “Believe in yourself, because there’s nothing like owning your own business.”

For more information: http://jdogjunkremoval.com/

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V e t er a ns i n Fr a nchising

J. Michael Haynie. PhD, Founder and Executive Director of the Institute for Veterans and Military Families

A Ch a n c e t o Li v e t h e D r e a m Th e y D e f e n d e d

As a professor of entrepreneurship, I’ve watched the vocation of business ownership change lives and communities.

I’ve watched entrepreneurship give freedom and a voice to countless numbers of people – to the young mother who maybe is denied opportunities by her employee because of her gender; to the retiree who is assumed to have nothing left to offer simply because of their age; to the young soldier who I met at Walter Reed hospital, who lost both his legs in Afghanistan, and who said to me that he sees being an entrepreneur as a way to take his life back from the government and

Franchising USA

the doctors, all those people who appear to have written him off – those who think that the productive part of his life is over.

If entrepreneurship is “the most democratic, most freedom creating phenomenon in the history of the human race,” as some have said, who better than to pursue entrepreneurship than those of us who know what it means to fight for freedom and democracy?

Veterans make exceptional entrepreneurs.

In fact, there are about four million veteran-owned businesses in the U.S. today. The U.S. Small Business Administration released a study which indicated that prior military service is one of the strongest predictors of who in this country is likely to start a business – not education or wealth, but prior military service. The five-year success rate of veteran-owned businesses is almost twice

as high as non-vet-owned businesses.

These are facts that hint at a story – but don’t explain why. Why are military veterans drawn in such large numbers to entrepreneurship, and why do they find such success?

One important fact is that successful entrepreneurs often have very diverse life experiences. The entrepreneurial process begins with recognizing an opportunity, and those individuals who have had diverse life experiences are more likely to draw from those experiences to see possibilities that others don’t see. This ability is the essence of entrepreneurship.

The very nature of military service confers to our veterans this critical resource because the military forces them out of their comfort zone – it forces them into life situations that they otherwise would not experience.

“The five-year success rate of veteran-owned businesses is almost twice as high as non-vetowned businesses.”

And oh, there is no money to fund this either.” But we always got it done. That’s entrepreneurship.

Successful entrepreneurs are also resourceful goal setters, and demonstrate a single-minded focus on achieving those goals. By its very nature, entrepreneurship – especially in the beginning – is about doing more with less. Entrepreneurs have to bootstrap, scratch and claw without losing sight of their goal – or to put it in military speak, their mission. Veterans have this quality in spades. How often in a military career have our veterans been given a new project or responsibility, and their commander said, “We’ll make sure you have any and all of the resources you need to make this happen – more people, more money, whatever you need.” Never in my 14 years of service did that happen.

Instead it was the opposite: “We need to you to take on this new project, it needs to get done in three months, and I’m sorry, but we can’t give you any more people.

Successful entrepreneurs also need to be able to recruit and build a team that will weather the inevitable storms their venture will encounter. As leaders of their own small businesses, veterans are adept at cultivating these high-performing teams.

Several studies have compared military service-members and veterans to nonveterans with regard to team-building skills and efficacy. Findings from that research illustrate that (as compared to those that have not served in the military) veterans are more adept with regard to 1) organizing and defining team goals and mission, 2) defining team member roles and responsibilities, and 3) developing a plan for action. Research also suggests that those with prior military service have a high level of efficacy for team-related activities; that is, veterans exhibit an inherent and enduring belief that they can efficiently and effectively integrate and contribute to a new or existing team. As it relates to franchising, either as franchisor or franchisee, this quality means that a veteran will easily incorporate into the broader corporate team, as well as build a strong team of their own.

Franchising presents its own set of opportunities for veterans, as compared to other forms of entrepreneurship.

Veterans are used to being resourceful and entrepreneurial within the context of a large, system-driven organization, and many franchises mirror this system closely. Veterans are also used to progressing through training provided by the military to both advance their existing skills and create new ones – and they are adept at rapidly making use of their training to move forward in a new direction. As in the scenario described above, veterans are rarely provided with the resources they need to accomplish the mission, but they often find themselves

Mike Haynie

executing missions outside of the realm of their initial set of expertise as well. With just a small amount of training on their new set of tasks, veterans will immediately leverage these skills with the confidence of someone who has years of expertise. Put together, the training and systems provided by a franchisor allow a veteran to leverage their skillset, navigate the hierarchy of the broader corporation, and yet be entrepreneurial throughout the process.

The momentum in this country today around veteran’s entrepreneurship excites me. It sounds audacious – almost arrogant – to say, but I believe that in the past few years, there have been many positive and powerful steps to building what will one day be a historic and exceedingly powerful network of veteran entrepreneurs across this country. Where I teach at Syracuse University, our motto when we talk about entrepreneurship is “Dream, Believe, Pursue.” Today’s veterans have an opportunity to live that motto through entrepreneurship, and to live the American Dream, which they fought so hard to defend.

Dr. Mike Haynie is a 14-year veteran of the United States Air Force. He is the Founder and Executive Director of the Institute for Veterans and Military Families at Syracuse University and the Barnes Professor of Entrepreneurship at the Whitman School of Management.

For more information: http://vets.syr.edu/

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V e t er a ns i n Fr a nchising

Jim Mingey, Founder and Managing Director, Veterans Business Services

W h at A s p i r i n g V e t e r a n F r a n c h i s e e s R e a lly N e e d :

Advocates

Before anyone, including a veteran, makes a life changing decision, he or she should seek the most unbiased recommendations for all aspects of that decision.

This is particularly true in franchising where even good opportunities and their requirements can collide with hard realities of an individual’s circumstances.

This creates a need for a true veteran advocate who is a champion but also a trusted spokesperson and a tireless reality checker for each deal.

Franchising USA

Who’s Really Got the Best Deal?

Today, with well over 500 franchisors in United States offering discounts and/or special financing packages for veterans, examining an information load can get a little overwhelming. A franchise acquisition decision should not be about lower franchise fees or discounts; it should be about matching capabilities, support and passion with the right opportunity for the veteran. Veteran Business Services (VBS) has developed a due diligence strategy to help a veteran sort through what’s important to them and from that veteran’s perspective. VBS as an advocate decided it must support an iterative process until the veteran gets the franchise decision right –go or no-go! That may not

provide a big discount for the veteran but it might lead to the only deal that really works.

How Can Veterans Expand Their Franchise Opportunity Search?

When VBS started developing its due diligence acceleration system for veterans it was only supported by local Mayor Willie in Easton, Maryland, his objective being to help veterans in the community.

The goal was to develop a system where the veteran could perform more efficient due diligence on multiple opportunities.

The idea was to provide veterans with a system to explore opportunities that were offered, or not offered, by a franchise consultant. The project has now grown

“The goal is keep all decisions in the hands of the veteran while helping source the best terms for them without conflicts of interest.” into a national business plan that has been supported by the Accenture, DLA Piper, the Entrepreneurial Bootcamp for Veterans with Disabilites (EBV) Program at Purdue University, the EBV Foundation and the Veterans Administration.

Are You a Veteran Who Wants to Help Veterans Find Their Dream Franchise?

The Veterans Administration offers a Vocational Rehabilitation and Employment Program (VRE), which can fund entrepreneurial benefits, including franchise broker due diligence training.

The program operates under guidelines of the Chapter 31 Self-Employment Track at VA. An advocate’s main task at the VA is the ‘feasibility’ of the Self-Employment Plan and the VBS system to help veterans prove that out requirement.

An advocate must be prepared to support the best franchise financing solution for a veteran franchise acquisition as well. VBS also now serves as an exclusive special partner for veteran franchise investments at the Veterans Opportunity Fund (VOF), a $30 million dollar venture capital fund exclusively for veteran small businesses including franchise deals. VOF was sponsored by Maryland’s TEDCO which has attracted retired Major General Gino Dellarocco as a Partner and leader in its management team. VBS will not make investment decisions, it only ‘advocates’ for quality veteran deals. Initially most of the VOF franchise transactions will be multiple unit franchise transactions.

VBS is a significant partner of Veteranscorp.org, a clearinghouse for veteran small business information and advocating for Service Disabled Veteran Owned Small Business (SDVOSB) opportunities. As Veteranscorp’s exclusive

partner in the franchise industry, VBS will seeks out the most advantageous acquisition terms for veterans and provide innovative entrepreneurial and due diligence training for all veterans seeking franchises. Veteranscorp has been a leader in creating veteran-focused public private partnerships that deliver unique sources of debt and equity for veteran small businesses. As Veteranscorp’s exclusive partner, VBS will be required and continually challenged to be both an advocate and an “honest broker.” The goal is keep all decisions in the hands of the veteran while helping source the best terms for them without conflicts of interest.

To accomplish its mission VBS requires a steady hand who relates well to veterans. VBS’ Founder and Managing Director, Jim Mingey, is a decorated Vietnam veteran raised from a proud military background. An entrepreneur for more than 35 years, Jim can relate on a personal level to the needs of the veteran small businessperson, and possesses the practical knowledge to implement his experience in today’s market. Jim participated in the EBV Program at Purdue University, is a

mentor at American Corporate Partners, developed the first approved franchise training program for the Vocational Rehabilitation and Employment (VR&E) Program at Veterans Administration, and was instrumental in forming the first equity fund in the United States exclusively for veteran owned small businesses and franchises: The Veterans Opportunity Fund. Jim intends to keep on ‘advocating’ for veterans in franchising.

For more information: Email: jmingey@ VeteransBusinessServices.us Phone: 202.349.0860

Jim Mingey

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V e t er a ns i n Fr a nchising

I FA

VetFran to Host Free Panel for Veterans at the West Coast Franchise Expo VetFran is mounting free panel for veterans, active duty service members and their spouses interested in franchise ownership during the West Coast Franchise Expo in Anaheim, CA. The seminar is “Opportunities for Veterans in Franchising” and will take place Saturday, October 26th from 11:00a.m. to 12:00p.m. in room 201C of the Anaheim Convention Center. You can register for free here by entering the promo code VETGP. A PDF with details on the panel can be found here.

Veterans who attend the seminar are welcome to attend the West Coast Franchise Expo for free. At the Expo, veterans will be able to visit booths presenting hundreds of franchise brands and talk face-to-face with franchisors.

Veterans have a proven track record of success in franchising.

Franchises run on systems and offer training and support, just like the military. In franchising, you’re in business “for” yourself, but not “by” yourself. That’s why there are over 70,000 veteranowned franchise establishments in the United States. Learn from veterans and business leaders in franchising how to get started in this exciting industry.

Sponsored by :

Franchising USA

Specialty Seminar:

Opportunities for Veterans in Franchising 11:00 A.M. – 12:00 P.M. Room: 201C Moderated by: Tim Courtney, CFE, Director Franchise Development, CruiseOne Panelists: Greg Delks, CFE, Vice President, Franchise Development, Firehouse Subs Greg Tanner, National Director – Franchising, Aaron’s Sales & Leasing Michael Little, Vice President, Marketing, Ice House America Martha O’Gorman, Chief Marketing Officer, Liberty Tax Service

Page 67

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V e t er a ns i n Fr a nchising

Greg Tanner, National Director-Franchising, Aaron’s, Inc

Franchising:

T h e T r u e N a tu r e o f a Work-Life Balance When I first meet with franchise candidates, I ask them why they want to go into business for themselves.

Their answers range from being their own boss and taking control of their future, to pocketing the proceeds from their hard work and keeping their own schedule— restoring a work-life balance. These are all tangible benefits of business ownership, but they miss the point, and sadly, how to be successful as a franchise owner.

of a board of directors and anonymous shareholders. You work at the behest of others. The sum total of your career’s work can be summed up as survivor. You want to escape that dead-end world and you can, but individuals who are successful franchisees aren’t just getting away from a bad situation, they’re seizing an opportunity to give back. Their focus is on serving others. It’s not about you.

installing ceiling fans, making sandwiches or teaching preschoolers, you are making someone’s life easier, happier, pleasurable, safer, and much else. Your service and hard work has a direct effect on their lives. Can you say that about your last job?

That’s the work-life balance I’m talking about, and would-be franchise owners need to reflect on that before they consider franchising.

A Work-Life Balance is About Changing Lives

Franchising May Not Be For You

Advocates

It’s Not About YOU

In corporate America, you work for a supervisor, under a department head, remotely guided by a CEO, at the direction

The work-life balance successful franchisees seek isn’t solely the newfound freedom they have, but the newfound platform they have to change the lives of the customers they serve. And no matter what franchise business you choose to pursue, whether you are leasing furniture, dusting counter tops, painting houses,

When you open for business, despite what you’ve heard or been told during your investigation process, customers are not going to beat a path to your door. Sorry, that’s a reality. Here’s another reality: If you don’t get out from behind your desk and into your community to demonstrate your willingness to serve others and show you care for your customers, franchising is NOT FOR YOU. Franchising is not for you unless you ask yourself: What business can I own that will give me an opportunity to make a difference in the lives of my customers?

The Payoff in Serving Others I could write a thousand and one words on the personal rewards of serving others.

I’ll spare you 990 of them and leave you with these gems: fulfillment, self-esteem, pride, praise, loyalty, referrals, sales, profits, security, and freedom. You see; if your focus is on the customer, everything else will take care of itself. If, however, you’re in this venture first for what it can afford you, your customers will sense it, your competitors will exploit it, and your community will abandon you.

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Put Your Face on Your Business As a franchise owner, you are your competitive advantage. Consumers trust a brand name and more so when they can associate a face with it. For corporate America, more than likely, it’s a spokesperson that is paid to hawk the company’s product or service. Is the spokesperson going to come to your aid if the product or service doesn’t live up to the hype? Good luck with that. But when potential customers know your brand, see your face and have a way to contact you, they are going to try your product or service before any other. IT’S A FACT. And, they are going to give you the benefit of the doubt should something go wrong. Why? Because you are creating a relationship with your customers, they want to like you. They want you to solve a problem and continue to solve the problem so they don’t have to worry and can move on to the next problem. That’s how you operate your household. Treat your customers the way you’d want to be treated: A simple principle that’s oh so difficult to employ.

How to Give Back Okay, you should be on board with the serving others principle. I’ll say one last time—Franchise owners who are successful put their customers first.

That’s step one. Step two, and probably more important, is the giving back. Your customers are supporting you as a valued and trusted small business owner in the community. Well, you need to burnish that image by reciprocating the support your customers provide you. You do that by volunteering your time and donating money to worthy local charities.

When a Franchisor Leads, You Commit and Follow One criteria that should be high on your consideration list when evaluating franchise systems is what charity are they supporting and how do they partner with their franchise owners to collectively enhance the image of the brand? This should be one of the first selling points a

Greg with Stephen J. Caldiera, President and CEO of the International Franchise Association

“When potential customers know your brand, see your face and have a way to contact you, they are going to try your product or service before any other. IT’S A FACT.” franchise uses to encourage you to join their system. And, franchisors that are category leaders are supporting causes with local chapters and events including The Wounded Warrior Project, Habit for Humanity, Save the Children Fund and many, many others. Here again, you’re working to put a face on your business and to support your community. You’re giving back; working to change lives. That’s the work-life balance you should pursue. If you do, everything else will take care of itself. You’ll be successful, however you measure it!

Greg Tanner is a Vietnam-era veteran having served in the military police.

He remains close to his military roots and over the last several years has directed nearly one hundred thousand dollars in Aaron’s advertising spending in support of the Wounded Warrior Project. He is also a member of the VetFran Committee, a veterans’ transition franchise initiative of the International Franchise Association.

He taught himself about franchising in his early twenties and has been both a franchisee and a franchisor. “I was

born to be in this business, and there isn’t a mistake I haven’t made,” he says.

Greg started in the franchise publishing business and was successful in both the automotive repair and car and truck rental franchise industries. A former regional Vice President for Quiznos and now National Director of franchising for Aaron’s, Greg has awarded 750 franchises for Aaron’s.

He has coached and helped hundreds of individuals realize their American dream. “I get a great deal of fulfillment putting people in business for themselves,” he adds. Greg recently shared his wisdom in a booklet titled, Tannerisms. “It was an opportunity to give back to the franchise community that’s given me so much.”

He and his wife, Fran, a successful realtor, have three grown children.

When he’s not sail fishing or enjoying a good book at the beach, you’ll find Greg sharing his wit and experiences with his four grandchildren.

For more information: http://franchise.aarons.com/

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V e t er a ns i n Fr a nchising

Jerrod Sessler, CEO, HomeTask

Transitioning from Military to the Work Force “I do not want to see our military veterans coming home to simple, low pay positions, doing menial tasks when they are trained and able to do so much more.” about helping other veterans walk through the post-military season of their life and I hope that my story can offer some lessons for veterans who are thinking through their own transition.

Jerrod Sessler

One of the greatest challenges facing military men and women is the battle that occurs after their service ends and they transition to a civilian life.

As a veteran of the Navy I am deeply aware of the challenges involved in that transition. I currently serve as the CEO of HomeTask, a multi-brand franchisor system, but it took many tough lessons to get to this place in my life. In light of the challenges I’ve faced, I’m passionate

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I proudly served in the U.S. Navy, as a Petty Officer, working aboard the aircraft USS Constellation. I was assigned to the “Cat Shop,” which is short for the Catapult Steam Shop and I was a “Snipe” (Boiler Technician / Engineering). My team provided the steam power to make the ship go and the airmen operated the functions of the catapults and communicated with the aircraft pilots. After I was released from full-time service in the U.S. Navy, I transitioned to full time school and part time work. The reason I chose this path is because I really enjoyed learning and felt that it gave me additional advantage towards future success.

In addition to education I also enjoyed automotive work so I started working on cars. After a few years I transitioned to a position in engineering and later worked for a couple of great companies, the most notable being the time that I spent as an engineer at Intel Corporation.

My time in these various roles helped me to understand the business world and learn efficiency through technology,

but ultimately these attributes built on the foundation of growth and discipline that I garnered during my time in the military. Military veterans have a great set of marketable skills and a great option for them is becoming a franchise owner, which is part of my story.

I eventually left corporate America in pursuit of my entrepreneurial dreams. It was a much bigger leap than I realized but I leaned on the self-discipline, dedication, and leadership that I learned in the Navy.

I ended up starting a business in the home-service industry, called HomeTask, which franchises various brands—the first of which was Yellow Van Handyman.

The discipline required to stay alive in the military translates into an ability to stick with the productive action steps required to build a good company. The dedication pressed into members of the military is useful in all of life’s situations.

The intensity that I experienced in the Navy has translated into an ability to calmly approach even the most difficult circumstances in life, including business.

Success in work and business is more than just being good at what you do. It requires having a stable, balanced life, which includes a healthy home, work, and spiritual life. The integrity that I saw

in many people whom I worked with in the U.S. Navy has challenged me year after year to honor the authorities and structures over me, and to work hard within the bounds of the established rules and standards expected in business. These characteristics make veterans a great fit for the franchising world.

One of the most interesting parts of succeeding in business has been the ability to turn around and care for veterans, in much the same way that the military took care of me. HomeTask currently offers a huge discount ($5,000) off of the initial franchise fee. I pushed for this internally for multiple reasons. First, I wanted to honor veterans for who they are and what they have done. In addition, and equally as important, I wanted to be part of the solution for many of our veterans that are working through their transition from their time in service to a successful position where they can serve and support their families and lives. I do not want to see our military veterans coming home to simple, low pay positions, doing menial tasks when they are trained and able to do so much more. Franchising offers this meaningful opportunity for veterans.

If you are a veteran considering which franchise you would really like to own then first think about what it is that you enjoy doing. Do you like to do service work at peoples’ homes or do you like to sell things in a store? Do you like food and the daily rhythm of a restaurant?

After finding your passions you then need to consider which one of those you most enjoy and are willing to continue throughout your life. For example, if you own a restaurant, you are probably not going to be the chef. You are likely not even going to work in the restaurant after a while. You will probably end up wanting to own multiple locations and building a team of managers, which means you will be doing a lot of human resources and people work. If that doesn’t appeal to you then you need to look at owner-operator type businesses where you can operate

what you own and hire people only as needed.

At HomeTask, we have a mix of these because we offer services. Some of our owners start out operating the business but then they grow to larger operations once they get the hang of the business and see how they can make it grow and increase profits through delegating some of the work. You want to be in a system that allows you a lot of flexibility so you can learn, change and grow as you increase in age, income, and experience. I hope that you will find a similar passion and joy in franchising that I found through my journey. I want to leave you with a compelling top ten list of why veterans are a great fit for the franchising world.

Jerrod’s Top Ten Reasons Why Franchising Fits for Veterans

10

Veterans have a strong ability to know when it is time to work hard but also the ability to cut loose and have a little fun. Having a grasp on both of these areas will keep the mundane from taking over.

9

Veterans are smart people. We figure stuff out without all of the tools we need. We have ingenuity from the experiences we have faced in life.

8

Service personnel are not easily shaken. We are able to endure in difficult times and are able to respond calmly to difficult situations.

7

The military teaches a certain structure that exists elsewhere but is not quite as prominent. It is important to understand a hierarchy because we need to understand where we fit in and what our responsibilities are which helps us to see a clear path to how we can contribute and improve our situation.

6

Veterans do not give up. My mental toughness was stretched well beyond what I thought was possible during my time in the military. This dedication causes creativity where others may crumble in fear.

5

Bootstrapping frugality is the life of many who actively serve in the military. I know I didn’t make enough to even support myself when I was on active duty. When starting a business, we need to be very disciplined to not punch a bunch of holes in our boat (or wheel barrel) that will carry us to the next phase of growth and profit. We do this by bootstrapping our way into that next phase, spending as little as possible, while delivering the highest possible results.

4

The military is a unique environment with lots of structure and many times you are required to do certain tasks in a certain way in order to achieve a certain outcome. This is not always the case with franchising but in general, in order to learn the system, you need to be willing to listen to and take instruction.

3

Veterans know how to work in a team.

We know how to get along and we work hard to make each day an enjoyable experience even though some of the work we have to get done isn’t particularly fun.

And, that work can often be dangerous.

2

People who volunteer for the military are servers. Franchising is nearly always a serving environment. We’re either serving the customer or an internal team member. Veterans are great in an atmosphere where they need to serve people.

1

The military yields a foundation into people that successfully navigate through a term of service, which results in an uncommon level of self-discipline. This will be extremely helpful to those who find themselves in the franchising world.

Jerrod Sessler is the CEO of HomeTask, a multi-brand home-service franchise system. Sessler is a U.S. Navy veteran, engineer, NASCAR Driver, terminal cancer survivor, and author. He enjoys time with his wife, Nikki, and their three kids as well as serving in their community.

For more information: http://www.hometask.com/Brands/

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ex per t advice

Terrence M. Dunn, founding partner of Einbinder & Dunn, LLP

Fr anchisee Tenant Checklist:

Look Before You Leap Into a Lease Terrence M. Dunn

In the course of opening a location for your franchised business you will likely be entering into a leasing arrangement, either in the form of a sublease from the franchisor or a direct lease with a landlord.

Leasing space for a business operation is complicated enough under any circumstances, but particularly so in the franchising context, because the landlord and the franchisor each have a set of concerns that they will want to apply to the lease negotiations.

As a prudent businessperson, you will examine the location primarily from the

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point of view of how well it will serve as a business location for your particular franchised business. That examination will focus on traffic, parking, surrounding businesses, quality of the structure and location. The lease will seem like an unfortunate but necessary formality.

In a best case scenario your lease will never have to be taken out of the drawer.

However, a good lawyer would counsel you to analyze the situation from a worst case scenario as well; that is, what will happen if things do not go well? In that case the terms of the lease become vital, frequently becoming the difference between survival and failure. Here are some of the areas that can impact on that determination and some of the questions you should ask when reviewing your lease: • Liability: Will you be asked to personally guaranty the obligations of your corporate or LLC tenant, and if so will that guaranty be unlimited or a “good guy” guaranty? You must distinguish between your company’s liability under the lease and your own personal liability. If a guaranty is required, a “good guy” guaranty is much more preferable, in which you only personally guaranty the rent while you remain in the space.

• Landlord’s work (if any), and tenant’s

work: The lease should clearly define what will be done to build out your space and who is going to do it. There must be a statement of who performs the construction and who can control that performance, as well as who pays for the construction and how it will be paid for (construction allowances, work letters, rent credits, etc.) If you are relying on the landlord to build your space, your lease must have controls built into it so that you can make certain the work is done properly and so that you have recourse if the work is unacceptable.

• “As is” delivery: Many landlords will want you to waive claims for the existing condition of the property; if so, you should examine the space carefully with an engineer.

• Sublet/assignment rights: What is permitted and prohibited? This clause could provide a potential backdoor out of an unsuccessful location. At a minimum you want your landlord to be reasonable in considering your request.

You may also be able to negotiate a preapproved set of criteria for an acceptable assignee or sublessee. If you decide to sell your business, you must have the right to assign the lease and be careful the landlord does not try to get a share of your sale price.

“Many landlords will want you to waive claims for the existing condition of the property; if so, you should examine the space carefully with an engineer.”

• Operating covenants, change of use and going dark: Can you cease operations or change your use if it makes no economic sense to continue with the franchised business?

• Casualty, insurance and related termination rights: What extraordinary events will permit you to terminate your lease? How quickly will the building and your space be restored in the event of fire or other damage? What is the relative responsibility of the tenant and landlord to restore the building and its interior? How long can this process take? These clauses are being scrutinized because of Hurricane Sandy.

There should also be a clause defining insurance coverage and who bears that expense.

• Repairs, alterations and compliance with laws: Who will be responsible for maintaining the building and your space and at whose cost? Your landlord should maintain the building and all structural elements of your space, as well as crucial infrastructure such as plumbing, electric and utility lines. You will be asked to maintain your premises. Be careful here and elsewhere of a landlord trying to shift its obligations to you.

• Operating and maintenance expenses: How much of the Landlord’s overhead are you supporting? Inclusions and exclusions should be scrutinized so that you are not paying for administrative expenses or capital improvements.

• Percentage Rent, escalations and other forms of additional rent: How much is this space really going to cost you? Base rent only tells part of that story. You must analyze each aspect of the lease that could result in a charge to you and be certain you have specific numbers for those charges.

• Real estate taxes: How much of the property’s taxes are being passed through to you as tenant? Have you investigated how much those taxes might increase in the future? If you are responsible for tax escalations (as opposed to a share of all the taxes), you must determine what the “base year” is and obtain a historical sense of how much taxes have increased in the past.

You must also be sure the percentage allocated to you is equitable in relation to the rest of the building.

• Competition: Depending upon the location, it may be worth inquiring into whether or not your landlord can give you protection against competitive businesses; such as agreeing not to lease to a similar business in the building, mall, center or an extended geographical area.

• Franchisor’s rider: Most franchisors will provide you with guidelines or actual language they require to be included in the lease. These provisions deal with assignment rights and other provisions that will enable the franchisor to protect the location if you fail or default. You must examine these provisions carefully to be certain they do not cause you to compromise any of your rights. You must convince your landlord to include

this in the lease in order for your franchisor to approve the lease.

• Verbal promises: You must disregard what the broker and the landlord told you during your discussions. Those

representations and promises carry no weight once the lease is signed. Read

the lease and discuss it with a competent real estate attorney. A careful lease

analysis and thorough negotiation can significantly reduce your financial

liability and spare you considerable

logistical headaches down the road.

Terrence M. Dunn is one of the founding partners of Einbinder & Dunn, LLP, a business law firm located in Midtown Manhattan. The founding partners of the firm have been together for over 20 years and the firm is well known in its areas of expertise, including business, franchising and litigation. Mr. Dunn has written and spoken frequently on various aspects of real estate and franchising law, including for the American Bar Association Forum on Franchising.

For more information: http://www.ed-lawfirm.com/

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have your say

Joel Lazarovitz, Co-Founder, International Franchise Services

Pak Mail Centers of America:

Pack It, Ship It, Cr ate It, Freight It

After nearly three decades of resounding success, Pak Mail Centers of America, Inc. continues to be the premier franchise system across the United States and internationally for all business sizes shipping and packing needs.

Following up on the success of those nearly thirty years, Pak Mail is looking towards the future and continuing its efforts to be the leader in the residential and business packing and shipping industry. As the business economy continues to morph itself through continued monumental growth in online shopping and with the continued uptick in the overall economy following the fallout from the recession, Pak Mail is staying at

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the forefront of the industry and shifting its strategy focus to continue as the leader in the everyday small package packing and shipping needs, but also to become the leader in residential and business freight shipment needs.

Pak Mail’s business is built on exceptional service and customer service that is second to none. The main focus is to ensure the satisfaction of every Pak Mail client at each and every opportunity and work to find the best fit for their needs in all the services provided. Building off of that base, Pak Mail is working hard to integrate the advantages freight can have for the residential and business community at large. “We believe the current business climate as well as that of the everyday residential needs lend to a focus being put on freight services that stand at par with our current level of service we offer in the small package and specialty shipping markets,” Alex Zai, CEO of Pak Mail says.

The past few years have not been banner years in the freight industry as the

economy continues to climb back to its heydays prior to the recession. The Council of Supply Chain Management Professionals’ annual State of Logistics Report detailed that in 2012, business logistics costs were once again 8.5 percent of U.S. Gross Domestic Product (GDP), the same level they hit in 2011. That means freight logistics was growing at about the same rate as the GDP. Though not monumental growth, the report shows that freight shipments continue to be a major portion of the economic need.

Cass Information Systems, Inc. released a report recently illustrating spending on freight shipments continues to climb as the overall number of shipments has retained a steady upward trend.

Pak Mail views this as a tremendous opportunity for its franchise system to take advantage of the continued need for freight abilities across the United States.

Currently, Pak Mail is developing new programs and various strategic plans to make freight a more central focus of our overall service offerings. The corporate team is working to develop Pak Mail’s freight management systems to be more efficient, customer friendly and

comprehensive to allow our franchisees the ability to service their customers across all markets, be that residential freight needs or large commercial freight services.

As the move to integrate more freight capabilities within the Pak Mail franchise system grows there is a great focus on working with our franchise network to increase their knowledge, training, and overall capabilities to handle any size or volume of freight needs for the Pak Mail customers.

“Our franchise network of 235 Pak Mail Centers across the United States, 147 Pak Mail Centers in Mexico, 10 Centers in Canada and 3 Centers Japan offers strong reach and capabilities for our customers.�

However, the core of Pak Mail’s business still remains and is expected to continue to remain the ability for Pak Mail to ship anything, anywhere. Our franchise network of 235 Pak Mail Centers across the United States, 147 Pak Mail Centers in Mexico, ten Centers in Canada and three Centers Japan offers strong reach and capabilities for our customers whether their need is for packing, domestic or international shipments, or any of our various other services offered in your local Pak Mail Center.

Looking to the future, Pak Mail is focusing on increasing our overall footprint here in the United States as well as overseas so we can continue to offer more customers around the world the tremendous service that has made Pak Mail the go to location for all packing and shipping needs for nearly three decades.

For more information: Website: www.pakmail.com/franchise Phone: 1-800-833-2821.

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ex per t advice

Scott Hausmann, Director of Marketing, Francorp

Private Equit y Firms

Target Franchisors Investing in franchisors is reaching fever pitch as private equity firms stretch outside of their comfort zones in search of alternative investment strategies.

Roark Capital Group, an Atlanta-based private equity firm that focuses on franchises, brand management, and restaurant companies, made a splash with the (reported) $430 million dollar aggregate transaction to gain controlling interest in fast food giant, Arby’s. The

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investment is one of several acquisition deals in the hundreds of millions of dollars being made between a franchisor and a major equity investor in the hundreds of millions of dollars.

In a still-unstable market, companies are diving in on the emerging IPO craze.

“After the market has done so well, from a timing point of view it’s a good idea to get it done now,” Hugh Johnson, chairman of Albany, New York-based Hugh Johnson Advisors LLC, said in an interview. “If I were in the private equity business, I’d be trying to raise liquidity as fast as I could.”

Private equity firms look to leverage a brand name already known to the public.

Roark may commit an additional $50

million through 2013 to help the Arby’s franchise brand achieve its full growth potential by promoting new menu items, remolding stores and opening new locations domestically and abroad.

According to Arthur Lipper III, International Financier and Corporate Advisor, “Franchising, as an effective means of replicating commercial successes, will increasingly attract professional investor interest in franchisors. These knowledgeable investors will appreciate the significance of a franchisor’s growth of income as an indicia of both franchisee customer satisfaction and an expansion of the franchisor’s network.” Retaining the franchisees and management team,

“Public markets are starting to love franchising and private equity firms since discovering the franchise company as a vehicle fueled with a full tank of leveragable IPOs.” investors leverage this experience and ability to keep the trains on the tracks for a successful business.

While some in the investment community might question Roark’s heavy commitment to underperforming companies as a high risk investment strategy, Don Boroian, CEO of Francorp, a franchise development firm takes a different view.

“These guys really know what they are doing not only as financial operators, but as operators in general, and have put together a great team. I have no doubt when the time comes to implement their exit strategy they will have turned these distressed properties into much more valuable commodities for a sale or IPO,” says Boroian. Several of the franchise companies Roark has acquired had their franchise programs developed by Boroian’s company, Francorp.

The acquisition of Arby’s, the second largest franchised fast food sandwich chain raises Roark’s profile. Previous franchise brands in their portfolio include Focus Brands, Auntie Anne’s, Il Fornaio, Bosley’s, Seattle’s Best Coffee, Corner Bakery Café, Atkins, Peachtree Business Products, Petvalu, Carvel, WingStop, GFL, Waste Pro, PSC Info Group, Cinnabon, BatteriesPlus, FastSigns, Money Mailer, Schlotzsky’s, Moe’s Southwest Grill, Primrose Schools, McAlister’s Deli and NSA Services, Inc.. Erik Morris, managing director at Roark, worked on the Wingstop deal back in 2010 said, “They know what they do well and they deliver on it. They’ve grown very nicely, and there’s a lot of opportunity to continue to grow the brand in existing and new markets.”

Roark’s past clients share a history of generating multi-million dollar figures in system sales and being internationally active. And franchising has been the route of choice to facilitate growth of this nature. Roark has been acquiring proven sustainable operations in saturated markets, choosing middle-sized companies in industries where smaller size is not an impediment to success.

Following their acquisition, Roark merged the Schlotzsky’s, Cinnabon and Carvel concepts under one roof as “Lotz Better.”

The three entities subsequently realized significant growth, immediately selling 75 franchise agreements for 25 restaurant locations. Collectively, these franchises can penetrate into new markets, such as New Jersey and Texas, like never before.

Roark Capital seizes the opportunity to create a great deal of incremental value in brands that are either under-developed nationally or are in need of some type of brand revamp program. Corner Bakery Café, another recent Roark acquisition, is a classic example of a powerful marketing machine reconditioned to new market demands.

The Roark Capital Group’s success may provide a proactive look to the future.

Outperforming the S&P 500, the UNH Rosenberg Center Franchise 50 Index has been positively growing for more than a decade. Created by the University Of New Hampshire William Rosenberg International Center Of Franchising, the Franchise 50 Index records publicly traded companies in the U.S. that engage in business format franchising.

These 50 franchisors represent more than 98 percent of the market capitalization

Scott Hausmann

of all U.S. public companies engaged in business format franchising. The Center’s 2012 year-to-date review shows the RCF 50 Index grew 1.9 percent, higher than the 13.4 percent growth of the S&P 500 Index. On a macro level, from 2000 to 2012, the RCF 50 Index grew positively at 131.1 percent for the twelve years; while the S&P experienced a 2.3 percent overall increase. The University of New Hampshire report shows publically traded companies who conduct business format franchising decreased by 1.7 percent in the fourth quarter of 2012, while the S&P 500 dropped 1.0 percent that quarter, buffered by a strong rebound of the financial sector. In relation, on September 24, 2013 Potbelly announced the corporation will be offering an IPO with shares priced between $9 and $11 per share, raising up to $82.5 million. Maybe timing is everything?

A factor not to be ignored in the RCF 50 Index outperforming the S&P 500 for the past twelve years and running is franchising facilitating a business’s ability to expand globally.

Activity inside the franchise industry is on the rise. Looking at some recent mergers and acquisitions, it’s clear no industry sector is better than the next. Private equity firms have been, and still are, interested in business to business (B2B), business to consumers (B2C), healthcare, materials and resources, and others.

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Scott Hausmann, Director of Marketing, Francorp

Dunkin’ Brands Group Inc. and Jimmy John’s Gourmet Sandwich Shop capitalized on the market’s recent success by offering an IPO and a private equity deal respectively to infuse their franchise with capital to stimulate continued growth and execute full or partial exit strategies.

Joscelyn MacKay, senior analyst at investment-research firm Morningstar, Inc. called the Dunkin’ IPO, “One of the most anticipated offerings of 2011.”

The Dunkin’ Brand was a complete exit strategy, looking to raise as much as $425 million in an IPO to help raise capital to pay off existing $1.8 billion of net long-term debt. Typical of any investment done by a private equity group, they combined an exit strategy and the infusion of expansion capital to see an increase in value of the business. Counter to the Dunkin’ exit strategy, Jimmy John’s overall strategy was to implement the capital provided by a private equity firm for expansion purposes only. In return, the private equity firm received a percentage ownership in the company, which is still relatively small compared to the ownership retained by founder, Jimmy John.

Dunkin’ Donuts stock did something the Wall Street market can’t do itself; experience an increase in value. In the first day of the $422.8 million IPO, Dunkin’ Brand shares rose $8.85, or 47 percent, to $27.85 in the first day of the $422.8 million IPO. This is reminiscent of the 1993 Boston Market IPO which, after acquisition by a private equity firm, went public at $20 a share and rose 143 percent to where it closed at $47.50 the same day. Public markets are starting to love franchising and private equity firms since discovering the franchise company as a vehicle fueled with a full tank of leveragable IPOs. “So many of our clients started out with one or two units, sold a large number of franchises, and have been acquired

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“CALLOUT: If you purchased 100 shares of McDonald’s stock for $2,250 in 1965 on September 25, 2013, it was worth over $7.2 million according to Donna Rodriguez, McDonald’s Senior Director of Investor Relations.” by private equity groups as a precedent to going public. Investors and the stock market love franchise companies,” Boroian says. Consider: if you purchased 100 shares of McDonald’s stock for $2,250 in 1965, with the splits, you would own 74,360 shares, which at today’s price of $97.79 per share is worth over $7.2 million as of September 25, 2013, according to Donna Rodriguez, McDonald’s Senior Director of Investor Relations.

Not many businessmen “meteorologists” can predict the “perfect storm” developing on the horizon. Many companies, distressed by the challenging economy, find it difficult to borrow the capital needed to become more secure within their market place. Savvy private equity firms acquire the businesses to infuse capital and value, betting on a strategy that by the time they ramp up these companies, the IPO market will be opportune.

John Jannarone of The Wall Street Journal recently observed Tim Hortons, a Canadian based franchisor, is worth another look. Like Dunkin’, they enjoy higher margins since nearly all of its stores are franchised. When franchising, one can produce up to a 50 percent margin for profit, while major companies on Wall Street may experience a margin of seven percent profit. Franchises offer the further benefits of steady royalties as partial income and, as previously mentioned, are particularly conducive to exit strategies.

“Many years ago, “Venture, The Magazine for Entrepreneurs and Business Owners,”

of which I was the owner and Editor-InChief, did a study comparing publically traded franchised companies with non-franchised companies in the same industry, and the franchised companies outperformed the non-franchised companies by more than 35 percent,” Arthur Lipper says. Today’s recent stampede of private equity firms to acquire franchise companies and the IPO of Dunkin’ Donuts have raised eyebrows in the financial community as smart money looks for new avenues of potential dynamic financial success.

Cycles – expansion, recession, recovery, franchising continues to attract the investment community. Reaching into all corners of the world, it’s becoming known as a very lucrative industry for all players who want to get involved.

“Acquisition mania” is spawning dreams of entrepreneurs who start a business, franchise it, and hope they will be taken public by a private equity firm in shining armor.

Scott Hausmann is the Director of Marketing of Francorp, which for 36 years has been the world’s leading franchise consulting and development firm, specializing in assisting businesses of all levels in integrating franchise growth models into their current business systems.

For more information: http://francorp.com/

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ex per t advice

Lynne Shelton, Esq., CFE, Senior Partner, Shelton & Power, LLC

Take a Trip to a

Trade Show!

“If you are just starting out as a franchisor, or are ready to expand your business through franchising, taking a course on specific aspects of franchisee relations will enrich you.”

What Shows are Available?

Lynne Shelton

Trade Shows are always great places to pick up tidbits of information, but within the franchising industry they epitomize their trade by guiding others.

After all, isn’t that what franchising is all about, teaching others to do what you already know how to do?

Many of the top level franchising executives, speakers, and guru’s volunteer their time every year to give back to the franchising community by providing sound advice and best practices to those wanting to break into franchising. Most of the speaker’s have between five and 30 years experience in franchising, you can rest assured that you are listening and conversing with professionals that have the credentials to answer any questions you have.

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Every year, three large franchise shows are available: in October you can attend the West Coast Franchise Expo in Anaheim, CA; in February, the Franchise Expo South in Houston, TX; and in June, the International Franchise Expo in New York City. There are also regional shows around the country throughout the year. Many people attend these conventions with the hope of finding the “hot” franchise that will make them millions and allow them to quit their current job, but what many do not realize is that the actual “hot” commodity can be found in the seminars just as much as in the exhibit hall.

What Type of Person Should Attend?

No matter your skill set, everyone can benefit from attending the franchise seminars offered throughout the conventions.

If you are just starting out as a franchisor, or are ready to expand your business through franchising, taking a course on specific aspects of franchisee relations will enrich you. However, if you are looking to buy a franchise, regardless of whether you have just begun to look, are at the point of narrowing down what type of franchise you want, or even if you are currently deciding amongst your top two to three

franchise systems, then you would benefit greatly by taking a course or two.

What are the Different Seminars I Can Attend?

At the franchise conventions, each one of you will find seminars to fit your budget, experience level, and ambitions, as well as, engage speakers who have the passion and knowledge to answer all of your questions.

If you are looking to purchase a franchise then there are plenty of seminars that will break down the Franchise Disclosure Document for you, show you how to finance your purchase, and how to negotiate the best deal to fit your market and circumstances. These include: “The A to Z of Franchising” and “What Do I Need to Know Before Buying a Franchise” among others.

If you are interested in franchising your business then attending conferences specifically concerning becoming a franchisor, or a better franchisor, will certainly improve your chances at a profitable and harmonious relationship with your franchisees. Seminar topics available to you include: “The Profitability of Franchising,” and “Operations Manuals” along with other seminars dealing with brand consistency and other best practices.

“Many people attend these conventions with the hope of finding the “hot” franchise that will make them millions and allow them to quit their current job, but what many do not realize is that the actual “hot” commodity can be found in the seminars just as much as in the exhibit hall.”

Certified Franchise Executive Opportunities Those serious about franchising often enroll in the International Franchise Association’s (IFA) Franchise University three-year program to become a Certified Franchise Executive (CFE).

As a CFE, you have the opportunity to network with other individuals with similar drive, earn industry recognition for your achievements, and an overall opportunity to continue learning and growing professionally in the franchising community.

Overall Why Should I Attend?

A better question to ask might be, “Why am I not attending?” If you are looking for the opportunity to expand your knowledge of franchising, to learn what it takes to be successful, earn credits towards your Certified Franchise Executive status, or simply find out if you have what it takes, the seminars offered at the franchise conventions will give you everything you need to achieve your goal.

A prime example of why you should attend the seminars involves a young man who shared this story. After attending our seminar “Navigating the Buying Process – What to Ask Before you Invest,” this gentlemen stated that he was successful in clarifying and negotiating many terms of his Franchise Agreement that mattered most to him, and that without the different seminars he attended he probably would have signed his Franchise Agreement, as is, assuming that it was non-negotiable, and non-tailorable to his circumstances and his geographical issues.

I look forward to sharing my experience with you at a future seminar, after all “You have to learn to listen, and listen to learn; because those that quit learning, are dead.” - F. Gilson

franchise shows. Shelton & Power offers

Lynne Shelton, Esq., is a Senior Partner over the Franchisor division at Shelton & Power, LLC, a Franchise and Intellectual Property Law Firm; a Certified Franchise Executive; and has been involved in the franchising industry for over 20 years. Ms. Shelton is asked to guest speak to franchisors and franchisees at national and international

their clients to easily budget all legal

their clients flat fee pricing on legal services for franchisor, franchisee, and business services which eliminate costly billable hour fee schedules, and allows work. S&P also handles intellectual property protection, and sophisticated and complex legal issues.

For more information: Website: Email: Franchising@SheltonPower.com.

Phone: 866 99-FRANCHISE

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Jason Power, Senior Attorney, Shelton & Power LLC

Franchising 101:

Terms, Tr aits and Tools Part I I

In last month’s article, I discussed the basic terms and definitions associated with franchising, the influence franchising has to the U.S. economy, and how to perform a cost/ benefit analysis of a franchise purchase.

This month’s article of our three-part series will talk about analyzing yourself and how to evaluate the franchise after narrowing your search.

When you are looking at a franchise, remember that you are going to spend about the next 10 to 20 years of your life in this franchise. Because so much of your time will be devoted to this business, you should look inside yourself and talk with your family and friends to determine if this is for you.

Ask yourself whether you want to work on the business as an owner/ operator or are you looking for a franchise where you

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“Most entrepreneurs give the same general answers, such as I want to be my own boss or I want to buy a business that I can make my own money from. These are all great answers, but they only touch upon a few of the reasons.” can hire someone to manage it in your place. Many franchises require that you be an owner/operator, which can mean attending training, annual conventions, and dedicating your working hours to the business. In the alternative, there are some franchises where you do not have to run the day-to-day operations and can hire someone to be your manager. If you are looking for the second type of franchise remember that in almost every franchise you will have to guarantee the performance of the franchise which means you should be very careful about who you hire to run your franchised business.

Another important question to ask yourself and those close to you is how well you work with others. Most of the franchises that people are exposed to, such as restaurants, have a lot of employees and a lot of face-to-face interaction. However, there are also franchises that allow you to work from home and make phone calls or email customers. Regardless of your social skills or preferences, there is a franchise that will work for you.

You should also ask why do you really want to own a franchise. During the various seminars that I give to franchisees, I pose this same question to everyone.

Most entrepreneurs give the same general answers, such as I want to be my own boss or I want to buy a business that I can make my own money from. These are all great answers, but they only touch upon a few of the reasons. Those that people will not talk about out loud are that they recently were fired and don’t want to experience it again, or they are retired but are bored, or they have reached a certain age where they

are too young to retire and just old enough that it is harder for them to find a job.

Whatever your reason, you should know and understand it before you move forward with a franchise purchase to ensure you are making the right decision.

One question that franchisees fail to ask many times is whether the franchise will work in their market. An over exaggerated example of this is that a snow removal business would not make a lot of money in Miami, but a bathing suit retailer might.

Many franchises are for sale in areas that the product or service may not work well in, but franchisors will typically leave it up to you to determine that. As the potential business owner, you should research whether this business has competitors or similar concepts in your target market and whether those businesses are doing well.

Another great way is to spend a little extra money to hire a marketing company to perform research into your area. This may cost a little more, but it could be worth it in the end.

One big question to ask is whether your family and friends will support your decision to buy a franchise. This is a very important question to ask because statistically a family owned and operated franchise is more successful because each member of the family has a vested interest in the success or failure of the business.

Additionally, without support of your loved ones, you will have no outlet for your frustrations, concerns or celebrations.

So now you have looked at different franchised businesses and thought about who you are and what your goals and support structure look like, but what

Jason Power

should happen next? Next, you should read or re-read the Franchise Disclosure Document. If you do not understand the Franchise Disclosure Document and franchise agreement, then how can you expect to successfully follow the franchisor’s model?

When evaluating the franchise, most buyers look straight to the total investment, which can be very deceiving. Item 7 of the Franchise Disclosure Document lists the total investment required to purchase the franchise; however, this Item gives a range for the franchise investment. In some franchises, this range can include costs for running the business from your home to leasing commercial space, which can vary greatly. Also, there are many franchises that require you to have a specific vehicle, which can greatly change the total investment if you do not have the vehicle already or if your financing terms are not exceptional.

Every franchisee is concerned with the fees. The main questions that I get regarding fees are is the franchise fee to high, what am I getting for the royalties I am paying, and what is the franchisor doing with my marketing fee? Of course, everyone asks if they can negotiate the fees, but that will be addressed in our third part in the Franchising 101 series next month.

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Jason Power, Senior Attorney, Shelton & Power LLC

“The franchise fee is your ticket to get in the club that is the franchise system. Depending on the franchise, you can expect to pay between $10,000 and $35,000, with the average franchise fee being around $25,000.� general area from the national or regional marketing fund. A national or regional marketing fund should be supplemented with your local marketing efforts.

Franchisors will often require that franchisees spend a minimum amount in their local territory. These amounts can vary from franchise system to franchise system, but normally run between one to three percent, or in some franchises can be a flat monthly, quarterly, or annual rate.

The franchise fee is your ticket to get in the club that is the franchise system.

Depending on the franchise, you can expect to pay between $10,000 and $35,000, with the average franchise fee being around $25,000. This franchise fee is what the franchisor uses to rent space to train you, pay trainers, cover printing expenses and costs of meals during your training. Most franchisors expect this fee to be used almost entirely on the above expenses and as a payment to cover the costs associated with finding you.

The next expense franchisees ask about are the royalties. Royalties are always an area of contention between franchisors and franchisees.

Every franchisee at some point argues that they are paying high royalties and not getting enough support for it. It is best to think of a royalty as your payment to continue using the franchise name, buying power, reputation, and support system.

Admittedly, there are franchisors that charge high royalties and give very little in return, but most good franchisors have evaluated their royalties and charge an amount that is reasonable based on the services they give in return.

When someone buys one of the popular

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fast food franchises, they know that people will come and buy food based solely on the name; however, what most franchisees will not acknowledge is that the famous fast food chains have spent a lot of money negotiating with suppliers of the various food products to reduce prices to the franchisees to save them money.

Good franchisors will look for ways to make the lives of their franchisees better and more profitable in order to earn that royalty.

Another fee that franchisees look at is many times two separate marketing.

These are the local marketing fees and the national marketing fees. Almost all franchisors require a national or regional marketing fee, which is a separate bank account that the franchisee pays typically between one to four percent of gross sales into for marketing on a nationwide or regional scale.

Many times franchisees will not see their bottom line increase and therefore argue that they are not getting any benefit from the national or regional marketing.

If the franchisee is the sole franchise owner in a state then this may be true, but in most instances franchisees will experience some exposure in their

Local marketing can be used in many different ways including sponsoring local sports teams, TV commercials, radio, newspapers, and even door hangers.

Franchisees should always talk with the franchisor, other franchisees, or marketing companies to determine what type of local marketing works best.

There are many other areas of the FDD and the fees that could be explained, and in next month’s conclusion to the Franchising 101 series, I will discuss who to talk with about these fees, some tips for negotiating, and what you can do to finance some of the initial investment.

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: Website: www.SheltonPower.com.

Email: Jason@SheltonPower.com Phone: 866-993-7262

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ex per t advice

Andre Kay, CEO and chief marketing officer, Sociallybuzz

Making it Mashable

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Imagine building a website for your franchise just once and it seamlessly working perfectly and fitting the environment of every device. That means customers that are searching for your services, products, information or goods can make faster buying decision because they are presented with a website experience that adapts to how they interact with the Internet.

The online world is consistently changing and consumers are not only using their desktop computers, including laptops, to look for information, they are also using tablets, smartphones and other devices.

If you look at your website from your phone and then from an iPad or any other tablets, how does it look in comparison to the view on a PC? Was it a pleasant and easy experience navigating and finding information fast on your mobile device?

You only have a few minutes to convince a consumer to spend their hard earned money with you. How they make that

“The smartphone market is expected to grow 27 percent this year to over 900 million units sold and tablets is expected to sell over 190 million units.” decision is not only bound by viewing your website on a desktop because they might be viewing it from a different device.

The smartphone market is expected to grow 27 percent this year to over 900 million units sold and tablets is expected to sell over 190 million units. That means your website is being viewed on multiple different screens. With responsive web design it makes it easier for consumers to find what they are looking for when they visit your site on any device.

But what is responsive design? As Pete Cashmore, founder of Mashable puts it, “A responsive web design uses media queries to figure out what resolution of device it’s being served on. Flexible images and fluid grids then size correctly to fit the screen.”

Therefore, your website will adapt to thousands of screen sizes and device while making it easier for consumers to find what they are looking for when they visit your site.

With responsive web design, your franchise website is fully optimized for social media and search engines. Both are very important for growth, brand awareness and customer acquisition.

To view what a responsive design looks

Andre Kay

and feels like, visit my website from your PC, try making your browser window smaller. Images and content will shrink, and the navigation bar will disappear altogether. You can also view it from your tablet and smartphone to see the difference from device to device.

Andre Kay is CEO and chief marketing officer of Sociallybuzz, which provides social media management, campaigns and reputation management. The company is designed to help brands and businesses develop a firm foundation in social media and marketing while delivering the greatest number of options in how they define or reach their relevant audience and increase revenue.

For more information: Website: www.sociallybuzz.com

“With responsive web design, your franchise website is fully optimized for social media and search engines.”

Email: andre@sociallybuzz.com www.twitter.com/SociallyBuzz www.facebook.com/sociallybuzz

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Jeff Grandfield and Dale Willerton, The Lease Coach

Leasing Space?

What Your Fr anchisor May Not Be Able to Do for You

With their recognized names, training programs and proven business concepts, franchises can be very appealing investments for entrepreneurs.

left to the unsuspecting franchisee to handle. As The Lease Coach since 1993 and now co-authors of our new book, Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013), we have explained this to many prospective franchisees and helped them choose the best business location and negotiate their commercial lease for their maximum benefit.

Before you commit to a franchise concept, however, understand that some franchisors may not provide a complete turn-key operation for their new franchisees.

Where some, even good-intentioned, franchisors fall short is with commercial real estate matters – specifically in the areas of site selection and commercial lease negotiating – these are frequently

When you are considering various franchise concepts and before obligating to any long-term lease commitment, consider the following advice (excerpted from our book).

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The majority of commercial lease deals are five-year lease terms. However, exceptions to a five-year lease term have become more and more commonplace.

The Lease Coach frequently negotiates three-year, seven-year or ten-year terms.

A lease term can be stated in either years or months. It’s important to factor in the start date and the expiration date of the lease term relative to what’s best for your business. Franchise tenants should make sure their lease term matches their franchise term to avoid issues later with the lease running out too soon.

This happens when the start date of the franchise agreement is prior to the start date of the lease agreement – which may be several months later, when the franchise business actually opens. The more money you invest in building out your space and setting up shop, the longer lease term you want.

Prospective franchisees are banking

Jeff Grandfield

Dale Willerton

“With a franchisee signing the head lease, the franchisee can control the real estate.” frozen yogurt concept may do better in a more affluent or touristy area, for example.

The depth and experience of the franchisor, along with the brand and name of the franchise concept, may open leasing opportunity doors for you that would be difficult to crack as an independent tenant.

The fact is, for new developments, most landlords strive for up to 100 percent national and regional chains and franchise tenants. Obviously, the brand-name recognition of a franchise can influence a landlord’s interest in you.

on a proven brand for their success, but finding the perfect location for a franchise concept can still be quite challenging. One franchisee told us there was such fierce competition for sites suitable for their industry that as the tenant, they didn’t negotiate the rental rate and simply agreed to whatever deal the landlord wanted. This was an isolated incident as in many market places the franchise tenant can still get a great lease deal if they know what they are doing.

If the franchise concept you’re buying into has a site criteria list, ask for it, and make sure you use it or include it in the leasing process. For example, a franchisor may stipulate that a good location is dictated by certain factors, such as age, population density, or income levels. A high-end

A soon-to-be multi-unit franchise told us that his franchisor had promised him extensive real estate support throughout the site selection and leasing process.

When he and his wife went to the franchisor headquarters for the training program, they were surrounded by other wide-eyed new franchisees anxiously waiting to be trained so they could start opening new locations. On the fourth day of training, the franchisee went out for a walk to escape the classroom claustrophobia. By the time he returned, the trainer had completed covered the real estate component of the course. Although there was plenty of reading material, there really wasn’t any hands-on effort to help the franchisee during the actual leasing process.

Some franchisors are active in the site selection and lease negotiation process, but

some simply introduce the franchisee to a local broker who supposedly works for the tenant. The problem is that the broker or agent is usually collecting a commission from the landlord. From most landlords’ perspectives, any and all agents or brokers who are receiving a commission from the landlord are supposed to be serving the landlord’s best interest, not the tenant’s.

This well-intended introduction by the franchisor may not turn out to be in the franchisee’s best interest.

As a further note, in the franchise industry, the franchisor or the franchisee could sign the “head lease” with the landlord.

By doing so, either party becomes the “head tenant.” Whoever signs the head lease maintains more control but will, conversely, spend more time on management issues including paying rent directly to the landlord and complaining about leasing issues.

Much like driving a car, maintaining control is an important factor. Whoever is behind the wheel is in the best position to steer the vehicle to a desired destination in a safe manner. Carrying this analogy further, franchisees holding the head lease are better protected with their investment.

Should a royalty payment or two be missed, the franchisor cannot threaten to take the space over. Often, the franchisor completely controls and dictates the site selection process; however, a franchisee signing the head lease has much more

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Jeff Grandfield and Dale Willerton, The Lease Coach

say in the location selection. Should a franchisee with a head lease wish to ever sell his/her franchised business; this is a far simpler process requiring a lease assignment.

As The Lease Coach, we know fullwell how franchisors often carry more weight with landlords and can negotiate favorable amounts of landlord’s work, leasehold improvement allowance, free rent, no deposit and so on. Note that not all franchisors will pass these benefits on to the franchisee. With a franchisee signing the head lease, any such inducements made can be to the franchisee’s benefit.

One scenario we remember as being specifically relevant.

In this case, The Lease Coach successfully negotiated eight months of free rent plus a substantial tenant allowance as part of the lease deal for a former franchisor client … obviously, this client was delighted!

Following our association, however, the franchisor then offered the space to the franchisee with the sublease agreement providing only three months of free rent and no tenant allowance. The franchisor pocketed the incentives and savings while the franchisee remained none the wiser.

Overall, the main reason that franchisors would have for being on the head lease would be to position themselves to re-open or resell that location and franchise if the existing franchisee closes. We have seen franchisors make a tremendous windfall by repackaging a failed franchisee location and reselling the entire space - including equipment and leasehold improvements - to another franchisee that is not aware of a previous franchisee’s history in that location.

It is not uncommon for the franchisor to require the franchisee to include in the lease agreement an exhibit or list of terms giving the franchisor limited rights in the event that franchisee defaults on the lease agreement.

As we lecture at franchise shows across the country, we are meeting with franchisors and noticing that more of them are not committing to head leases. Some franchisors are trending toward less risk

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by insisting their franchisees sign the head lease.

With a franchisee signing the head lease, the franchisee can control the real estate.

This article does not provide enough space to examine all of the pros and cons of head leases, subleases and franchisee direct leases but, at least, the topic is now on the table. If you need to discuss your situation or have any questions about commercial and retail leases, please don’t hesitate to contact us.

For a copy of our free CD, Leasing Do’s & Don’ts for Franchise Tenants, please e-mail your request to JeffGrandfield@ TheLeaseCoach.com or DaleWillerton@ TheLeaseCoach.com.

Jeff Grandfield and Dale Willerton The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Jeff and Dale are professional speakers and co-authors of Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013).

For more information: Website: www.TheLeaseCoach.com Email: JeffGrandfield@TheLeaseCoach.com DaleWillerton@TheLeaseCoach.com Phone: 1-800-738-9202

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