Franchising usa T he ma g a z ine for franchisees FOOD FRANCHISES
VOL 02, ISSUE 02, DEC 2013
$5.95 www.franchisingusamagazine.com
part II T h e 7 D e a d ly S i n s o f
Franchising Operation Vetrepreneur 3 Unique Ways
t o R e a c h L o c a l C u st o m e rs LATEST NEWS
FINANCIAL ADVICE FROM THE BANKS
TOP LAWYERS’ ADVICE
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Franchising usa T he ma g a z ine for franchisees
FRANCHISING USA VOLUME 2, ISSUE 2 december 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: you move me
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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 “You can find your way across this country using burger joints the way a navigator uses stars.” - Charles Kuralt Consistently making headlines with new breakthroughs or business partnerships, it’s simple to see why so often we relate the word “franchise” with food. One of the most extraordinary fundamentals of life is food, without it we would cease to exist. But more than that, food is something that brings us together. Whether you’re exploring ice cream shops with your kids or sharing in a romantic Saturday night meal, food is a universal experience. With the holidays upon us, what better time than now to wrap up part two of our food supplement. In this December issue of Franchising USA we take an in-depth look at some of the hottest trends in the food franchise industry while bringing to light some opportunities for you to explore. Our cover story features Brian Scudamore’s third franchise company, You Move Me, which is setting records for being one of the fastest growing businesses in franchise history! We also look to distant lands to provide you with an insight on the global franchise market and opportunities to invest. In this issue’s Veterans Supplement, our news section features an intriguing report on which brands appeal to veterans and what benefits veterans are lobbying for
today. You will also find in it expert articles explaining why military vets make successful franchisees and tips for how to get started as a veteran entering the franchise world. Furthermore, I am pleased to present to you our Women in Franchising article which tells the story of one unique woman who took something as ordinary as potatoes and turned it into an innovative business franchise. After travelling many roads she has founded her inventive franchise, which again speaks to the trends of today’s food market. Offering tips for successfully marketing your business with SEOs and social media, as well as defining the seven deadly sins of franchise relationships, this issue’s expert advice articles are both informative and fascinating. In closing, as you read through this month’s issue I invite you indulge in the stories and get a taste for what these franchises have to offer. With a new year just around the corner, your resolution to start your own business could begin here. Wishing you thee happiest of holidays, 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
DECEMBER 2013
On the Cover 10 Cover Story
66 Operation Vetrepreneur
You Move Me: Moving More Than Just Boxes
52 The 7 Deadly Sins of Franchising Greg Nathan, Franchise Relationships Institute
CruiseOne
14 3 Unique Ways to Reach Local Customers
42
Andre Kay, Sociallybuzz
52
14
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Contents
In Every Issue 06 Franchising News Announcements from the Industry 27 Feature Article Foods Supplement, Part Two
27
On the Cover: Taco Bell
63 Veterans Supplement
Women in Franchising 24 3 Potato 4 Guenevere Blanchard
Franchising USA
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14 3 Unique Ways Social Media Can Reach Local Customers Andre Kay, Sociallybuzz
20
Expert Advice
16 Fundamental Factors for Choosing a Franchise Philip Zeidman, DLA Piper’s Franchise and Distribution 20 Franchising Your Business Julie Lusthaus and Mackenzie Dimitri, Einbinder & Dunn, LLP 34 Necessary Tools for Owning a Restaurant Franchise Lawrence Eade, Wok Box 40 Quick Service Restaurant Doesn’t Always Mean Quick Profits Jason Power and Lynne Shelton, Shelton & Power, LLC
58 5 Steps to Choosing a Great Franchise George Knauf, FranChoice 74 Understanding Franchise Marketing for Prospective Franchisees Scott Hausmann, Francorp
38
44 SEO and Social Media: How to Successfully Market Your Franchise Adam Heitzman, HigherVisibility
Franchisor in Depth Franchisee in Action 48 Papa Murphy’s Pizza
48
60 Baskin Robbins
Have Your Say 54 Creative Colors International
Editor’s News 76 Social Media Business Boosters Franchising USA
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what’s new! Crowdfunding Marketing Agency Deliver The Crowd Expands Social Media Offerings and Services Announces Acquisition of Marketingworks, a Leading Social Media Influencer Firm. Deliver The Crowd, LLC, a specialized marketing and PR agency focused on generating accredited-investor interest in financings for equity and debt offerings through crowdfunding campaigns, recently announced the acquisition of Marketingworks, Inc., a leading bi-coastal social media influencer firm. “We are delighted to acquire the
team, talent, resources and tools of
Marketingworks. With over 160 successful Fortune 500 campaigns to their credit,
they have the perfect social media marketing skills, techniques and tools to target and reach accredited investors. This acquisition accelerates our entire marketing process,” said Rand Bleimeister, CEO of Deliver The Crowd. The acquisition of Marketingworks provides Deliver The Crowd with the ability to identify and prospect accredited investors with investment opportunities they would otherwise not learn about. “The recent decision from the SEC makes general solicitations now legal and Marketingworks is the ideal acquisition
to make these social-media engagements available for us,” he adds. For more information: Website: www.DeliverTheCrowd.com Twitter: @DeliverTheCrowd Facebook: Facebook.com/ DeliverTheCrowd LinkedIn: LinkedIn.com/company/ DeliverTheCrowd
Dental Fix Rx Signs 100th Franchise Dental Fix Rx turns four years old this month, but that’s not its only reason to celebrate. This month Dental Fix, a company specializing in repairing dental equipment, signed its 100th franchise, expanding its coverage in South Florida and increasing its service territories to more than 70 in the U.S. and Canada combined. “This is a need-based business,” said David Lopez, Chief Executive of Dental Fix. “Dental equipment will always break and will always need to be fixed.” Dental Fix franchisees are mobile operators, heading out to dentists’ office to fix broken hand pieces, compressors and other medical equipment used at their practice. They drive a van equipped with tools and do repairs on-site, eliminating the need for doctors to ship the parts to repair centers. While their core customers are dentists, Dental Fix also fields calls from tattoo shops, pharmaceutical companies and veterinarians, Lopez says.
Franchising USA
Lopez hopes to add at least 50 more territories in 2014 through aggressive marketing, but expects a third of that will “come organically” as a result of current owners’ referrals. It takes about $70,000 to start a franchise, which includes ownership fees, six weeks of training and repair tools. Plantation resident Matthias Williams is Dental Fix Rx’s 100th proud franchisee. For more information: Website: www.dentalfixrx.com/franchise/
Cheng Cohen Earns Tier 1 “Best Law Firms” Recognition for Franchise Law Excellence - 2014 Rankings Released by U.S. News & World Report - Best Lawyers© -
Cheng Cohen LLC has once again earned a top spot in the U.S. News Best Lawyers© 2014 “Best Law Firms” for franchise law both nationally and in the Chicago metropolitan listing. “We are pleased to be recognized once again by this respected global survey of top franchise law firms,” said Ric Cohen,
Cheng Cohen co-founding partner. “To be recognized as one of the leading firms in a peer- and client-review survey is gratifying. We deeply appreciate our clients’ and colleagues’ continued support.” Ranked firms, presented in tiers, are listed on a national and/or metropolitan scale. Awards were given in 74 national practice areas and 120 metropolitan practice areas. Firms included in the 2014 “Best Law Firms” list are recognized for professional excellence with persistently impressive ratings from clients and peers for a
combination of quality law practice and breadth of legal expertise. Earlier this year, Cheng Cohen CoFounding Partner Amy Cheng was honored as “Lawyer of the Year” by Best Lawyers in the franchise law category. The sixth consecutive year Amy has been named to the Best Lawyers list, the 2013 award makes her the first female attorney in Illinois to be tapped “Lawyer of the Year” in the category. For more information: Website: www.chengcohen.com.
Hilton looks toward IPO after successful franchise-based strategy a more economical route—renting out Hilton’s brand names such as Hampton Inn, Hilton Garden Inn and Doubletree to franchisees. Of the 164,000 rooms added by the company since 2006, more than nine out of 10 were franchised, according to Hilton’s securities filings. The strategy is a revved-up version of an increasingly popular tactic in the hotel industry: rent out brand names, booking systems and even loyalty-points programs, collecting a five percent fee on room revenue and avoiding costly overhead tied to building and owning properties.
doubling its six billion dollar investment.
Blackstone is now shopping Hilton to other investors. It plans to take the hotel chain public next month in a $2.25 billion initial public offering, the largest-ever in the hotel industry. Blackstone and Hilton are planning to meet with potential investors next week to persuade them to buy stock in the company. The offering would value Hilton at about $30 billion to $32 billion, say people familiar with the company.
That growth came not by expanding Hilton’s empire of company-
For more information:
Private-Equity Firm Rents Out Hilton Brands to Franchisees In six years, Blackstone Group LP transformed Hilton Worldwide Holdings Inc. into the largest hotel company by rooms, more than
owned hotels. Instead, the New York private-equity firm has taken
Website: www.blackstone.com/
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what’s new! MASSAGE ENVY SPA® INTRODUCES NEW EXECUTIVES - New Chief Operating Officer and General Counsel Join Corporate Team Massage Envy Spa, the pioneer and national leader of professional, convenient and affordable massage and spa services, announced today they’ve added to their executive team with a new chief operating officer and new general counsel. As Massage Envy Spa’s new chief operating officer, Joe Luongo is responsible for the company’s day-to-day franchisor operations and leads profitable growth for franchisees. In addition to operations, Luongo oversees training, information technology, and real estate and development. In this new role, he’ll help create a strategy for continued domestic growth, as well as international brand building. Luongo has 22 years of experience in the franchise industry, including Pizza Hut, and most recently Peter Piper Pizza. Throughout his career, he has worked for three Fortune 500 companies and has global experience from his time at FedEx Kinko’s, when he led locations worldwide outside of the United States. Additionally,
he served for six years as a C-130 navigator in the U.S. Air Force. “It’s exciting to be involved with a brand that’s opening more than 100 locations a year, and to think, we haven’t even tapped into the international market yet,” he said. “We’ll soon have more than 1,000 locations nationwide, and I’m looking forward to being part of that growth story.” Melanie Hansen joins Massage Envy Spa with extensive legal expertise; she began her career practicing tax and corporate law. In 2003, Hansen served as general counsel for Cold Stone Creamery before joining the Target Corporation where she held full product and liability responsibility for the Fortune 50 Company’s Northern Arizona district. Prior to joining Massage Envy Spa, Hansen worked as the chief operating officer and general counsel for Esio Franchise Company. Hansen is responsible for all legal affairs for Massage Envy Spa, including franchise disclosure and compliance, corporate
transactions and litigation, trademark protection and enforcement, and procurement. For more information: Website: www.massageenvy.com/
Franchise Industry Created Substantial Jobs in the First Quarter The U.S. added over 25,000 franchise
below September’s results.
jobs in October, according to the ADP
After a rough September, auto parts and
National Franchise Report.
dealers acted as a driving force in job
That number is substantially greater than
creation, adding 5,150 jobs, or about 20
15,040 new jobs and August yielding
month. Restaurants accounted for 45
for the franchising industry is 18,860 new
Overall, the franchise sector accounted
in recent months, with September yielding
percent of total franchise growth for the
16,160 new jobs. The six-month average
percent of new franchise jobs.
jobs created per month, also substantially
for more than 20 percent of the 130,000
Franchising USA
private-sector jobs created during the month of October. For more information: Website: www.entrepreneur.com/ article/229931#ixzz2lz3kQuz8
Right at Home Commemorates Those who Serve Others on Veterans Day Leading In-Home Senior Care Franchise Sees Significant Growth in Veteran Owners as Passion for Service Translates to Senior Care Right at Home, a leading international provider of in-home senior care with more than 350 locations in six countries, celebrated the growing number of veterans strengthening its system on Veterans Day. With approximately 30 veteran franchise owners in Right at Home’s network, these individuals have transferred their passion for serving their country to helping seniors age in the comfort of their own homes. “When you enlist in the military, you don’t know what will happen in those years you just signed on for: will you go into combat, or will you serve in other important ways state-side? It’s a huge unknown when you sign that piece of paper,” said Eric Little, Senior Vice President of Franchise Development at Right at Home. “But, no matter where you are stationed or whether you go into combat, every veteran has made a commitment and we owe a huge debt of gratitude to each and every one of them.”
business model. They also all have a passion for serving others in their community. To help support veterans in local communities, Right at Home is a strong proponent of the Veterans Aid & Attendance Program, which provides extensive resources and information to veterans in need. For more information: Website: www.rightathomefranchise.com
The veterans within the Right at Home network demonstrate integrity, discipline and the ability to implement a structured
CPR Cell Phone Repair is Resuscitating Digital Lives
According to a recent study by IBISWorld, technological changes have motivated consumers to buy the latest incarnations of smartphones and tablet devices. These come with a higher average ticket price and replacement cost. As a result, the cell phone repair
industry is growing at a faster rate than expected.
demand, said Jeremy Kwaterski, founder and CEO of CPR Cell Phone Repair.”
Last year, the cell phone repair industry revenue was estimated to rise at an average annual rate of 10.9 percent; however, growth in 2012 vastly exceeded that projection with 13.7 percent for a total of $1.1 billion. This digital trend and the increasingly mobile consumer is spurring growth in electronic repair companies like CPR Cell Phone Repair.
Although certain devices are being priced more competitively, the replacement value to purchase a new smartphone is often far more expensive than the cost of repairs. Further to that, the lost digital life that often comes with discarding a damaged phone is often more of a personal loss than many consumers are willing to bear.
Recognized as the pioneer and fastest growing wireless technology franchise in the country, CPR has more than 150 locations globally and has experienced a three-year growth rate of 2,091 percent. “Since franchising our locations around the country, we’ve only seen growth in that
Entrepreneur Magazine recently listed cell phone repair as one of the hottest trends in franchising for 2014. For more information: Website: www.cellphonerepair.com. Franchise Opportunities: www.cprfranchise.com.
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You M ove M e
Moving More Than Just Boxes Launching this past April, moving company You Move Me, is one of the fasting growing businesses in franchise history, and they’re just getting started. Generating five million dollars in revenue through a team of 22 operating franchise partners, Brian Scudamore, founder and CEO, is proud of the growth his third home service business is achieving. “With my first brand 1-800-GOT JUNK? it took a dozen years to get to five million in revenue, and with You Move Me we did it in less than eight months,” he says. Recognized for his appearance on CTV’s Undercover Boss for businesses 1-800-GOT-JUNK? and WOW-1DAY Painting, Scudamore is dedicated to connecting with the front lines to grow his brands. The idea to launch the moving business came to Scudamore after encountering his own moving nightmare. When he hired a reputable moving company, the movers were extremely late, disorganized, messy, and disrespectful. “Moving day is stressful as it is, and I expected everything to go well
Franchising USA
but I had guys in my house who weren’t polite and wouldn’t even take off their muddy boots,” he recalls. According to the U.S. Census Bureau, about 14 percent of Americans move every year; that’s 47 million people on the move at any given time. Seeing the opportunity to take this sub par industry and make it exceptional, Scudamore stepped up to the challenge. Meeting with four of his top 1-800-GOTJUNK? franchise partners, Scudamore introduced his idea of challenging the status quo of the moving industry. Unanimously loving the idea, the team’s next step was rallying the support of other franchise partners. Pitching them his idea at a conference in Chicago, Scudamore explained how they were going to revolutionize the moving industry, then asked: Who’s in? The response was immense with 46 franchise partners interested in operating a You Move Me franchise. Of these, the top 26 performers with the required capital, energy and track record were awarded a franchise. Despite going against his own advice that franchisors should spend time learning their business’ operations before franchising, Brian set up You Move Me as a franchise from the start. The reason for this is that 1-800-GOT-JUNK? provided Scudamore with partners he knew, trusted, and who were able to provide rapid feedback on how to improve the business. “We were able to accelerate and get so much done in a short period
“We cannot find a franchise that’s had a quicker launch than us. It’s the biggest in franchise history.” of time, its been a successful model for us,” Scudamore says. “We cannot find a franchise that’s had a quicker launch than us. It’s the biggest in franchise history.” You Move Me’s goal is have 50 franchisees by the end of next year and triple their revenue, targeting 14 million dollars. Offering customers a full service, including packing, moving, and all the supplies required, You Move Me has serviced 7150 customers in eight short months. The key to their success is keeping things simple by delivering on their promises- a feature most moving companies fail to do. Setting clear expectations and meeting the customer’s needs whether they be timely or financial, moving crews practice an “inspect what we expect” procedure, which involves checking in with the customer throughout the process to ensure they are satisfied. Their next secret is to practice exceptional customer service through pleasant surprises and doing the unexpected. On moving day the designated team calls the customer to confirm the details, and in knowing they have packed their coffee
makers, take their beverage order to pick up and bring along. At the end of each job, the team gives the customer their first housewarming gift; a potted plant with a “Thank You” card signed by the team. Before leaving the site, the crew ensures everything has been done to You Move Me standards. “The goal is to ‘Wow’ customers. Often times one team member will be raking leaves in the front yard while another finalizes the paperwork,” Scudamore says. “We know we can change this industry by keeping our promises and doing what we say we’ll do, adding those little touches show that our movers really care.” You Move Me is seeking franchise partners who fit the company’s energy, enthusiasm and excitement in order to change the existing state of the moving industry. “We believe building a business is hard work and consumes a lot of your livelihood; we want to have fun with the people we work with,” Scudamore explains. “We also want to build a successful business locally, nationally and globally. We need the right people who know how to set goals, achieve them, and aggressively drive sales.”
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You M ove M e
“The key to their success is keeping things simple by delivering on their promises- a feature most moving companies fail to do.” Those interested in becoming a franchise partner are encouraged to contact You Move Me’s Franchise Development team to learn about franchise opportunities, the process, and ask questions. Candidates who feel the opportunity is right for them can submit a formal application and participate in a phone interview. Those the company is interested in then undergo a second interview and are invited to You Move Me’s head office in Vancouver. Here they spend a full day learning about the business, watching presentations, and participating in several interviews with the leadership team. The day ends with a leadership team Q&A session, followed by a dinner out. If the company feels the candidate is a good fit for the team they then make an offer to award a franchise. The franchise training process takes eight weeks and is broken down into four sections. First franchisees spend three to four weeks learning through correspondence and reading the operations manual. Next they spend one week training at head office, learning all aspects of running their business (operations, finances, sales, marketing, etc). Following this, franchisees spend one week training at an existing franchise before finally training in their own territory, where they set up their business and put into practice everything they have learned. Ongoing support is available from You Move Me’s Business Launch Manager, Mike “Butter” Makwich, and a help desk is also accessible to assist with the technical side of the business. Scudamore believes the practice of providing such comprehensive training and heavily investing in franchisees will pay dividends down the road. “We screen hard and put a lot of effort into finding the right franchise partners and it works well so that we can support them, and have fun
Franchising USA
with them while the business grows and thrives,” he explains. Currently operating throughout major Canadian cities and spanning the United States, You Move Me is looking to expand into new markets. With plenty of territories available for interested candidates, the franchise fee for a You Move Me territory (250,000 people) is $11,250 with an eight percent royalty fee. The full start-up cost ranges between $100,000 to $200,000, which includes trucks, graphics, marketing, office set-up and equipment, insurance, professional fees, and training. The biggest benefit of being a You Move Me franchisee is the opportunity to build a national brand where the systems, processes, and reputation are already in place. “We make it so someone can start a business and springboard into early success rather than having to figure the business out,” Scudamore says. “We’re building something much bigger together than any one of us could successfully build alone.” Devoted to their mission statement, “We move you, not just your boxes,” the core of the company is focused on delivering the type of service that eliminates stress and moves the customer, both physically and emotionally. “Moving is not fun, but if we can make that day a little less stressful and help put a smile on someone’s face by doing something unexpected, that’s what You Move Me is all about,” Scudamore says adding, “Not only are we having fun, but we are doing an exceptional job in the moving space.” For more information: Website: www.youmoveme.com/us. Email: Jason.isley@youmoveme.com
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ex per t advice
Andre Kay, CEO and Chief Marketing Officer of Sociallybuzz
3 Unique
Social Media Local Custo
Reaching new local consumers and building brand loyalty with existing customers is probably the number one goal for franchisees looking to establish a stronger local presence. Reaching consumers within a seven to 20-mile radius using social media is easier said than done. If successfully achieved, it could mean more seat fillers; increased traffic through your Andre Kay
Franchising USA
doors; and sales growth. Here are three quick and unique ways you can use social media to reach local customers.
“Customers get excited when businesses engage with them and they will engage more with your brand.”
they can tag your business’ Instagram profile to that photo. When you’re on
the “Photos of you” page, you will see
photos uploaded by existing customers.
Yelp Events Yelp is known for their reviews, but also for their community of highly engaged local users and the Yelp Elite Squad. Members of this exclusive, in-the-know crew reveal hot spots for fellow locals, act as city ambassadors, and are the true heart of the Yelp community -both on and offline. Get connected with your local Yelp community manager and find out about their localized events and how you can host at your location.
e Ways
edia Can Reach omers Hosting an exclusive Yelp event at your business like this one done by CREAM will give specific Yelp Elites one-onone personalized time with your brand and products, which can blossom into the ultimate free word-of-mouth local marketing.
Foursquare Foursquare helps people find the perfect places to go with friends. You can utilize the existing customers that are already using Foursquare at your location to connect with their friends and family. First thing you need to do is claim your location on Foursquare. Upon claiming
your location, you will get access to a list of tools to help you determine who’s checking in at your business along with how and where they are sharing their experience. When logged in, navigate to see customer stats, then click on real world analytics on the top right. Scroll to the bottom to see a list of your most recent visitors and top visitors that check-in at your location. Foursquare allows you to click on the respective customer’s profile to see how active or engaged they are, as well as the additional social platforms they use. If they are connected to Twitter, you can tweet them a thank you message for stopping by. More times than not, they will retweet the message to their followers and friends - so make sure your message is short, sweet and to the point! This can also lead to free word-of-mouth local marketing, helping you to reach other potential local customers.
Instagram Instagram is a fast, beautiful and fun way for people to visually share their life with friends and family. Your customers are capturing hundreds of photos and videos of your business and products. It’s your job to turn those photos and videos into meaningful content marketing. To reach local customers, log into your business’ Instagram account, click on the icon to the far right on the Instagram toolbar located at the bottom (the circular icon with three lines within a box), which will take you to your profile. Click on the “Photos of You” icon (the icon with the profile face in a box) located on the far right. “Photos of You” is a way for your customers to share and discover your business on Instagram. When a customer uploads a photo of your brand or products,
Click on each image and engage with those customers, leave a short thank
you message, like their page, or even
follow them. Customers get excited when
businesses engage with them and they will engage more with your brand.
The more they engage with your brand on Instagram, the more their friends will see your business name and photos. You can also utilize the “Photo Map” to engage
with customers that add your business as a location to their photo. This is another
way to receive free word-of-mouth local marketing from your customers.
Although social media marketing sounds easy, it can get a little time consuming.
Investing this time into your business to
localize your marketing initiative can reap lots of great benefits, from new customers to local brand awareness. Each situation and franchise is unique, but following
the steps above will help jump start the
process of reaching new local customers to help you build, engage and grow your business using social media.
Andre Kay is CEO and Chief Marketing Officer of Sociallybuzz, which provides social media management, campaigns and reputation management. Sociallybuzz exisit to help restaurants, franchises, nightclubs and retail owners grow their business using social media by helping them reach relevant customers, build customer loyalty, mange reputation and increase revenue. For more information: Blog: www.sociallybuzz.wordpress.com/ Twitter: www.twitter.com/sociallybuzz Facebook: www.facebook.com/ sociallybuzz
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ex per t advice
Philip Zeidman, Senior Partner, DLA Piper’s Franchise and Distribution
Fundamental Factors For Choosing A Franchise
Franchising USA
Franchising—yep, that’s certainly hot now, isn’t it? But what kind of a franchised business? That is—or ought to be—the threshold question, not only for a prospective franchisee trying to determine where to invest his time and energy, but also for a prospective franchisor trying to decide whether to start a franchise or to convert an existing business to the franchised model. The randomness with which such a fundamental decision is frequently made is pretty appalling: “My kids like the product, so I figure other people will too.” “It seems like a pretty easy way to make money.” “Their ads are really cool, so I suppose the rest of the operation must be well run.” “I’ve been operating this business for years, and I’d like to increase my return… and spread around some of the risk.” “I went to a franchise trade show and there were lots of people lined up at their booth (maybe for the free samples).” We’ve all heard about or experienced circumstances in which these decisions— hasty, vague, back of the envelope— nonetheless led to good fortune. But what we don’t hear about may be the more common result—disappointment and regret. The fundamental question, which both prospective franchisee and franchisor ought to be asking is straightforward: Is
this product, service, or business one that is likely to grow at a satisfying rate, and for a considerable period of time? And the answer to that question is not likely to come from a snazzy booth, a flashy brochure, or clever marketing. Let’s take a look at what current trends in our economy and society may tell us about the most promising opportunities for the future.
Value One of the interesting consequences of the economic slowdown that began in 2007-08 is that even though it is now in many respects behind us, it has left behind it a legacy, which may be permanent. I refer not only to the discovery businesses have made (that they could get along with fewer resources) but also the discovery that consumers have made (that they could get along with lower priced goods and services). In short, “value,” thought in the heyday to concern only those at the bottom of the pile, now turns out to be “the new normal,” i.e., an insistence by consumers upon the absolute optimum value for the money paid. Part of that shift in perspective, of course, is due to the trends we have seen in income distribution. Change in income was not equally shared across the population. In the period from 1990 to date all the income ranges below the top one percent gained on average 18 to 65 percent, while those in the top one percent gained 277 percent. And when we stretch this back to the middle of the last century, we see how atypical the last 30 years have been: from essentially World War II until 1980
“The fundamental question, which both prospective franchisee and franchisor ought to be asking is straightforward: Is this product, service, or business one that is likely to grow at a satisfying rate, and for a considerable period of time?”
Philip Zeidman
the various percentiles marched forward at roughly the same rate, but since that time the growth in income has been markedly different. This has had an effect not only on what consumers are able and willing to spend for goods and services, but also on what franchisees are willing and able to invest in franchises. We see this in evidence across the range of franchising: The best-known franchised food operations all have aggressive “value plans;” hotels, convenience stores, fitness operations, etc, all are focusing upon “value.” Of Entrepreneur’s Top 10 Franchises in 2013, virtually all featured “value,” including all of the top four. And, so far as the sale of franchises, we have seen an unprecedented willingness (bordering on desperation) by franchisors to lower the cost of the franchises, to provide financing, etc. This has a message for both prospective franchisees and prospective franchisors, and it does not seem to be one that will be short-lived. In Tyler Cowen’s new book, “Average is Over,” he sees a future in which below an elite group of Americans who will have the brains and self-discipline to master tomorrow’s technology and extract profit from it, the rest will endure stagnant or even falling wages. Both franchisors and franchisees may need to adjust themselves to this “new normal.”
Franchising USA
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Philip Zeidman, Senior Partner, DLA Piper’s Franchise and Distribution
“Many businesses are focusing on catering to the aging population.” Aging On the eve of World War II, the percentage of the U.S. population 65 and over hovered around five percent. Due to increased longevity as a product of better healthcare, medical technology, greater awareness of the factors that lead to wellbeing, etc., that percentage has now tripled. This dramatic change has had a significant impact on the world of franchising. The market for senior care and home health care franchises—and, in general, the market for franchises which focus on the healthcare field—simply cannot be ignored. In addition, the strain upon the nation’s healthcare capability, and the growth of a huge infrastructure to support the healthcare industry, has major ramifications for franchising. From the point of view of franchising the new healthcare payment system developing in this country is likely to create, and indeed is already creating, considerable opportunities. They range from those which are actually imbedded within the medical profession itself, to those which support the delivery method of the healthcare (billing and accounting for it, and a panoply of other franchise ventures, some as yet unimagined). The longer lifespans we are seeing, and the increased recognition of the impact on our longevity which we ourselves can influence, has led to a cluster of franchises which are still in their infancy. While senior care is already one of the largest growing franchise segments, there are over 35 franchise brands, more than quadrupling since 2000, with some having many hundreds of units and some with impressive compound annual growth rates. At a moment in history when the country’s focus is increasingly on jobs, the Bureau of Labor Statistics expects the number of jobs for personal and health home care
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processionals to increase by 67 percent by the year 2016.
which have the most potential) is a trend which is here to stay.
There are two other ramifications of this development—
Women in the Workforce
• A new focus upon franchisors who are willing to consider seniors as their franchisees. • Many businesses are focusing on catering to the aging population, as we see an increase in the activities of that group. The consequences for both franchisors (in identifying businesses to start or expand) and to prospective franchisees (in identifying the prospective franchises
The last century has seen a slow but steady increase in the percentage of single women age 35 to 44 who work. But the real change has been in the percentage of married women. From virtually zero at the beginning of the 20th century, it now approaches the same percentage as single women. Even though there has been a slight tapering off in the last couple of years due to women going back for further education (sometimes because the pay they could receive at work was simply not worth the effect on their lives), this is a
“Of Entrepreneur’s Top 10 Franchises in 2013, virtually all featured “value,” including all of the top four.” economy and the society, notably including demographics, are a better guide than simply skimming through a list of available franchises or browsing through a trade show or reading an article about a cool new idea.
phenomenon which will be here for the foreseeable future. This affects hiring processes. It affects the household incomes of the people to whom franchisees are trying to sell. It affects the potential number of female franchisees to whom businesses might be targeted. Finally, perhaps its most direct impact is upon the types of franchises which are being developed today: child care franchises, women’s health boutiques, fitness and other related operations geared to women and the like. Beyond particular businesses, it has an impact upon the research and development and the marketing of a whole range of American business: products and services, and their marketing and delivery, which are targeted to women. No franchisor can afford to ignore this trend, and astute prospective franchisees would be well advised to take note of it themselves.
Wellbeing I use this as a catch-all rubric to cover such businesses as those dealing with fitness, the environment, dietary habits, etc. These may be the fastest growing franchises this year, and perhaps for some years to come. Along with education, health care franchises are certainly
going to be increasingly evident, as are those dealing with the environmental sensibility which generally accompanies that movement. Of Franchise Direct’s top 100 Global Franchises, seven already fall in the health and fitness field. That share is sure to rise. There are other complementary developments. Lighter and healthier fare, even in some unlikely places (for example, your neighborhood 7-11) is increasingly ubiquitous. An explosion in gluten-free offerings, and an evolution in contemporary definitions of health— increasingly associated with local, natural, organic and sustainable food and drink— can be seen all around us. An increasing number of franchisors are focusing on this area, for at least some of their offerings. And, especially for prospective franchisees who find this movement a congenial one and compatible with their own interests, it is certain to figure prominently in the growth of franchising in the years immediately ahead. Certainly this quick survey cannot purport to comprehend the full array of possibilities. But two observations seem appropriate— • Fundamental movements in the
• The message is remarkably similar for both franchisors and franchisees. That may at first seem contrary to the popular wisdom, which depicts them as fundamentally pitted against one another in a zero-sum game. But, as I pointed out in a previous article (One Unit? Or Many Units? September 2013) the conditions which make for success of either a franchisor or a franchisee are very often the same. Philip Zeidman is a Senior Partner with DLA Piper’s Franchise and Distribution practice in Washington, DC. Mr. Zeidman received his undergraduate degree with honors from Yale University and law degree from Harvard University and also studied at the Harvard Graduate School of Business Administration. He served as a Trial Lawyer for the Federal Trade Commission, General Counsel to the Small Business Administration and Special Assistant to the Vice President of the United States. He served as General Counsel to the International Franchise Association throughout his career and is counsel to a number of U.S. and foreign companies and trade associations. He has been named Global Franchise Lawyer of the Year by Who’s Who Legal for nine consecutive years. Mr. Zeidman is also the former Chairman of the International Bar Association’s International Franchising Committee. For more information: Email: Philip.zeidman@dlapiper.com Phone: 202-799-4272
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Julie Lusthaus and Mackenzie Dimitri, Einbinder & Dunn, LLP
Franchising Your Business If you are a successful business owner, franchising may be an attractive method to take your growing business and profit margins - to the next level. Indeed, development of a franchise system can be a great way to help your business continue its success on a larger scale. With franchising, the brand grows but the unit investment and unit management costs are incurred by independent franchisees. People often think “burgers and fries” when thinking about business systems that are franchised. However, the world of franchising is quite diverse and business systems in many different industries are developed through franchising. In addition to restaurants, other sectors include retail, hospitality, real estate, optical, recreation, business services, childcare and household, and home improvement services, to name a few. However, prior to franchising your business, there are a few important factors to consider.
What Is A Franchise? Franchising is a method whereby a franchisor gives a franchisee a license to
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“Perhaps most importantly to the franchisee, the FDD must give audited financial information, including accurate earnings projections.” use its brand, i.e. trademarks, and system
of operation in return for the payment of a
“franchise fee.” The franchisor establishes
standards and specifications regarding how the franchisee may conduct its business operations so as to ensure that the unit is operated similarly to the other units
operating under the same name. Typically, the franchisor will provide the franchisee training and support to teach the
franchisee how to operate the franchise in compliance with the franchisor’s system.
Do You Have What Is Needed To Franchise Your Business? There are many issues to consider when converting a business into a franchise, which is one reason an experienced franchise lawyer is such an asset to business owners considering franchising. For one thing, your business must be replicable. Also, you will be required to have certain legal and financial documents drafted and compiled before you can sell a franchise. These documents can be extremely burdensome to produce and can
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Franchising USA
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Julie Lusthaus and Mackenzie Dimitri, Einbinder & Dunn, LLP
“A franchise attorney can help a franchisor identify and locate the resources needed to operate and grow a successful franchise system.” create liability for the franchisor down the road if the documents are not accurately drafted or properly registered with any applicable state authorities. In addition to having the necessary documents, the prospective franchisor must understand that operating a franchise system is a different business than operating a unit within that system. The Federal Trade Commission requires franchisors to provide potential franchisees with a Franchise Disclosure Document (FDD) before there is an exchange of money or a franchise agreement is signed. This document includes 23 items that provide the franchisee with information about the operation of the business and financial information about the franchisor and franchise system. The FDD is an incredibly useful tool for potential franchisees to assess the viability of their potential business venture. The FDD provides information about the franchisor and any parent companies, predecessors or affiliates of the franchisor. It will give information about how long the franchisor has been in business, its competition and special requirements unique to the franchisor’s industry to aid the franchisee in assessing potential costs and overhead. The FDD will also provide an overview of the franchise itself, including executives of the franchise system and potential financial or legal problems the franchisor is facing or has faced, including litigation or bankruptcy filings. The FDD must disclose the initial franchise fee and franchise investment costs, if any. Many states require a minimum fee. The FDD will also flesh out other miscellaneous costs associated with starting up a franchise, as well as ongoing fees the
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franchisor may require the franchisee to pay through the term of the agreement. Restrictions on distribution, sources of products, development of new products or marketing approaches are laid out in the FDD, and are crucial to developing a full picture of the franchisee’s responsibilities down the road. Territory and exclusivity are included in the FDD, as are the terms to renew the franchise agreement after its expiration, or to resolve disputes during its term. Perhaps most importantly to the franchisee, the FDD must give audited financial information, including accurate earnings projections. Some states also have specific registration or notice requirements that franchisors are required to uphold, or risk voiding their sale. Each state has different parameters for registering franchise offerings. Currently, there are 13 registration states. Franchisors must register their FDD in a registration state before selling a franchise in that particular state. Handling and understanding the FDD can be a tedious task, thus it is sensible for franchisors to seek the assistance of a franchise attorney to help prepare and file these documents, and to re-file when necessary. In addition to preparing and registering the necessary legal documents, the franchisor must be prepared to provide training and support to franchisees. Indeed, providing training is a crucial aspect of the franchise relationship, as the guidance and advice the franchisor can provide can be the difference between recreating a successful and profitable operation, or financial struggles. A franchise attorney can help a franchisor identify and locate the resources needed to operate and grow a successful franchise system. There are many advantages to turning
Julie Lusthaus
Mackenzie Dimitri
your business into a franchise or becoming a franchisee, but it takes a great deal of work. It also takes the assistance of professionals to prepare the necessary legal and financial documents. Attorney Julie Lusthaus is a partner in the firm of Einbinder & Dunn, LLP. She focuses her practice in the area of franchise law, serving as counsel to both franchisors as well as franchisees. She can be reached by phone at 212-391-9500 or 914-705-5417 and via email at jcl@ ed-lawfirm.com. Mackenzie Dimitri is an associate attorney practicing franchise law and related litigation on behalf of franchisors and franchisees at Einbinder & Dunn, LLP in New York City. Special thanks to Margaret Margaret R. Poppe for her contribution to this article. For more information: Website: www.ed-lawfirm.com/
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George Knauf
www.franchoice.com/GKnauf 540-351-6185 gknauf@franchoice.com Franchising USA
women in f ra nchising
3 Potato 4, Guenevere Blanchard
Guenevere Blanchard :
Offering more with 3 Potato 4 The Pre-Potato Days
Guenevere Blanchard
Born and raised on the shoreline of Connecticut, Guenevere Blanchard grew up a curious child, inquisitive about the world and its ways. Looking today at her extensive list of
culturing experiences and worldly travels, it’s no wonder 3 Potato 4 boasts such an intriguing, thoughtful menu.
Featuring a variety of organic potatoes, soups and beverages, 50 homemade
dipping sauces, vegan bacon bits and
banana rocket desserts, 3 Potato 4 products are 99 percent fat free, gluten free, and food friendly for every taste bud.
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Attending the University of San Francisco, Blanchard studied psychology and business before moving to Europe to continue studies in alternative medicines. In her spare time she seized the opportunity for adventure, taking a side job as a fire-eater in a travelling circus. Moving to Thailand to practice her medical studies, she later settled in the Netherlands. Then, after eight years over seas, it was time to go home to her family. Upon returning home Blanchard opened a chain of wellness centers throughout the United States. As sole owner of the centers she implemented a blueprint for opening and operating each location. Although successful, the challenge came in running the national business alone, which eventually led to selling the centers. “Unlike franchising where you have someone committed to their own location, I had to constantly fly around the country to check in,” she explains, adding that had she been more familiar with franchising, she would have franchised the wellness centers. “Franchising is smart and low risk, it takes the guess work out of a new business, comes with a tested concept, marketed brand, vendor relationships, and developed research,” she says. Joining the franchise industry four years ago, Blanchard purchased an ice cream
shop. While in love with the concept of franchising and it’s backing support from a corporate office, unfortunately, this particular franchisor didn’t provide that support, and she wasn’t excited about the product. Setting out to start her own streamline, affordable business that would provide the support a successful franchisee needs, Blanchard founded 3 Potato 4. Opening the first location in Salem, Massachusetts, in 2012, its first month of operating saw potatoes outselling ice cream. Deciding to sell her ice cream shop, this gave Blanchard the opportunity to focus solely on her new business and move forward with the potatoes.
Introducing, 3 Potato 4 The 3 Potato 4 concept originated out of necessity; a place where everyone could eat regardless of food allergies, medical needs, or personal beliefs. Today the United States’ population can be broken down into 40 percent with a gluten allergy, 20 percent with a peanut allergy, 38 percent vegetarians, 18 percent vegans and numerous others on diets. At 3 Potato 4 the organic baked not fried potatoes offer something for everyone from the energetic kid who loves fries to delicate digestive seniors who grew up on the crop. Serving a widely loved, high-fiber food
“I see just as many women as men [in franchising] which makes me think franchising is for everyone.” and turning it into an eco-wide, 99 percent fat free product with lots of specialty addons, the potato options include; russets, redskins, sweet potatoes, crinkle cut, purple potato medleys, or curly-Qs. The 50 dipping sauces available are unique concoctions with imaginative names such as Firecracker Ketchup, Sundried Tomato Pesto Mayo, Pineapple Jalapeño BBQ, and Rasta Rocket, to name a few. 3 Potato 4 restaurants are decked out in a 1950s sci-fi theme. Based on the notion that in the fifties people were eating organic, GMO-free potatoes, it speaks to how the idea of eating organic today seems futuristic. The sci-fi traits tie in to appeal to all generations. “When seniors see astronauts they think success and progress because they were alive in a time when we walked on the moon and explored space travel. Baby boomers grew up reading comic books with space characters similar to those found on our poster ads, the hipster crowd thinks everything retro is
pretty cool, and little kids see spacemen and rocket ships and love it,” Blanchard explains. The brand’s yellow and blue color scheme represents calm, safety, and focus. “The product is energy packed, and since it’s quick food we wanted to help customers focus on menu.” Above all else the brand offers low-pressure advertising that is non-offensive and fun for everyone. Despite Blanchard’s original plan to develop the business concept for two years before franchising, the high volume of interest in the restaurant resulted in franchising early on. “So many tourists, schools, medical institutions, veterans and independent business owners have expressed their love for the concept and desire to bring it to their areas,” she says. “Schools and hospitals especially like the idea of serving the organic take away food, mainly because of its appeal to children and concern for the high child obesity rates in the system.” Careful with the growth of her business to ensure her
franchisees are a good fit for the concept, today 3 Potato 4 has five locations in Massachusetts, Las Vegas, New Orleans, and two in San Francisco. With an additional 20 applications currently under review, Blanchard is expecting to have 50 franchise locations operating by the end of next year. One of the benefits of owning a 3 Potato 4 restaurant is the small space required to operate. The restaurants range from 300 to 1000 sq ft., resulting in low rent, low labor costs (typically only need one employee), and a streamline business model. “Customers are served their organic product in a bio-degradable paper cone,
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women in f ra nchising
3 Potato 4, Guenevere Blanchard
and our to-go containers, soup bowls and coffee cups are made out of potato starch. The entire business is biodynamic in that everything we’re serving our customer is consumable, compostable, recyclable or bio-degradable,” she explains, adding, “We’re using the potato from start to finish.” The cost of purchasing a 3 Potato 4 restaurant ranges depending on location, and to date every location has successfully open for less than $70,000, including the franchise fee. Offering a “No Risk Bundle” for $50,000, this covers all fees and provides franchisees with everything they will need minus the build out and equipment. “We help franchisees choose locations that have a lot available on site and don’t require too much build out,” Blanchard says. “There are four different business models available so franchisees can find what meets their needs and design their space accordingly. In addition to the restaurants quick growth and rising demand, the most rewarding experience for Blanchard has been the happy customers. “They are the joy and driving force behind expanding,” she says, and with both new and regular customers thrilled to find somewhere they can indulge in everything on the menu, Blanchard is pleased to be serving a product she is proud of. “Running the ice cream shop I would see so many obese children come in and I didn’t feel good about serving the fatty product,” she explains, adding, “On the other hand, one organic potato has more potassium than a banana and 37 percent of your daily vitamin C.” Studies have also shown that 30 minutes after eating an organic potato, the equal parts amino acids and minerals in it cause the brain to release serotonin, making people 54 percent happier.”
Women in Franchising When discussing the roles of women and men in the franchise industry, Blanchard says the difference is “everything and nothing.” “I see just as many women as men [in franchising] which makes me
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“Women love what they are doing and take a role of integrity, ingenuity, and are passionate about what they are doing.” think franchising is for everyone,” she says, noting one key difference: passion. “Women love what they are doing and take a role of integrity, ingenuity, and are passionate about what they are doing. They are easy to work with, motivated as a team player, see their goal and work towards it,” she says. Recognizing franchisee Jehan Strouse, owner of the New Orleans 3 Potato 4 restaurant, Blanchard is thrilled with Strouse’s creative media advertising ideas. In particular she speaks to “Two Wheel Tuesdays,” a promotion encouraging customers to show up on their bikes to get a free dipping sauce. Strouse has also arranged a bicycle valet. “She comes up with such great ideas and is passionate about the concept. She is ahead of the curve in what she’s doing, and that’s the difference.” Blanchard feels women in franchising are important because the more women involved the larger a pool of franchises can exist and develop. “Women franchisors are an asset to the franchise industry because they are so involved with their franchisees. They are not motivated by money, are quick to respond, and enjoy developing new ideas,” Blanchard says. “Women franchisees are excited about their products and concepts, and are always thinking of new and exciting things to do. Having more women involved in the industry means quicker growth all around; in sales, ideas, and expansion.” Finding inspiration in good food and her love to eat out, Blanchard stays motivated by trying new concepts, discovering new products, and watching the process of the organic movement. She sees the future of franchising as a smart, new, eco-conscious model. In a market that’s currently saturated with yogurt and sandwich franchises, she believes that rather than
reinventing a common concept with a different name, newer innovative concepts are drawing a lot more attention and have larger group appeal than ones that are being done over and over. Blanchard’s advice to women interested in joining the franchise industry is to focus on confidence and teamwork. “Find a concept that you’re really passionate about and work as a franchise team. A healthy relationship between franchisors and franchisees is the key to success.” For more information: Franchise Website: www.3potato4potato. com Product and Location Website: www.3p4shop.com
FOOD FRANCHISES Page 27
www.franchisingusamagazine.com
A T a st e o f
December 2013
part II
taco bell Tools for Owning a
Restaurant Franchise Wingstop:
6 0 0 S tr o n g a n d Gr o w i n g Franchising USA
FOO D FR A NCH ISES
what’s new!
Authentic Appeal Creating Restaurant Investor Zeal Le Duff America Announces Strategic U.S. Expansion Plans for Café-Bakery Concepts, Bruegger’s Bagels and la Madeleine The world’s second largest restaurant company in the café-bakery sector has set the stage for its premier U.S. brands to significantly expand their franchise footprint during 2014 and beyond.
Groupe Le Duff SA and its North American’s subsidiary, Le Duff America, Inc., are creating dynamic growth opportunities for Brioche Doree, Bruegger’s Bagels and la Madeleine. The brands have initiated newly formed franchise strategies designed to meet the demand of today’s discerning restaurant operators/investors seeking to team with concepts that have earned undeniable consumer appeal. “There’s little debating that momentum is on our side. We’ve created a rock solid growth strategy to accompany the remarkable performance of our bakeries,” said Paul Carolan, chief development officer for Le Duff America, Inc. and a
proven restaurant industry leader who recently joined the company to head franchise and licensing. “Our ability to raise the bar in everything we do across both brands -- food, operations and design -- while differentiating ourselves in the crowded fast casual sector, puts us in a great position.” For more information: Website: www.groupeleduff.com Email: pcarolan@leduffamerica.com
Brioche Doree Debuts in U.S. in NonTraditional Venues The authentic French café bakery brand initiated a licensing growth strategy in 2013 that significantly increased its North American presence for 2013 and the years ahead. The focal point of the strategy to open new bakeries centers in non-traditional venues such as airports, universities and healthcare. Brioche Dorée has a rich tradition as a popular, Parisian-style and urban café bakery. Dating back more than 30 years, there are more than 600 bakeries in operation throughout Europe and Asia. North America presents the brand with growth opportunities unlike anywhere else in the world. “We’ve only begun to scratch the surface,” said Tina TooleWelch, senior director of NTV business development for Le Duff America, Inc. “Dining management groups want concepts that offer a unique experience…brands that are ahead of the curve and are relevant to today’s consumers. Brioche Dorée is different. We prepare and bake our gourmet breads, pastries, soups, salads and sandwiches on site, right in front of our guests.” With more than 30 bakeries currently in the United States and Canada, Brioche Dorée menu offerings range from espresso-based coffees and croissant breakfast sandwiches to quiches, specialty
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crêpes and French-inspired desserts. The menu options and aura of the brand intend to re-create the French, street side café, but
in a modern, well-appointed environment that envelops all of the senses.
For more information: Website: www.briochedoree.us/
la Madeleine Continuing Success in Franchising Coming off an impressive first year of its franchising program, la Madeleine has pinpointed 2014 as another milestone timeframe. The French-inspired bakery café brand, which has built a loyal following and fan base throughout its 30-year history in its core Texas, Mid-Atlantic and Southeast markets, continued its expansion into non-traditional venues with the addition of several airport locations, both kiosk and full-service. Additionally, the strategic course it has charted to expand into high-profile U.S. markets includes awarding development deals to multi-unit, multi-brand restaurant ownership groups eager to enhance their portfolios with a concept ripe for growth. “We differentiate ourselves in the bakery
café segment with a warm, come and stay environment (4,500 square feet and the brand’s signature fireplace), and a flavor profile that breaks though the monotony of our category,” said Darren Bothe, senior director of franchise development for la Madeleine. “The warm, authentic French bakery café feel creates an environment that is unlike any other in the segment.” These distinctions come with attractive operational benefits, including consistent
customer traffic throughout the day (14 percent breakfast, 43 percent lunch, 43
percent snack and dinner). la Madeleine’s average unit sales volume is $2.1 million
(17 percent EBITDA), with a $1.1 million build out, figures that can compete with the segment’s largest brands. For more information: Website: www.lamadeleine.com Email: DBothe@lamadeleine.com
Bruegger’s Bagels to Increase Presence in Core Markets For several years running, Bruegger’s Bagels has increased comparable-store sales and transaction count. The result…a current average unit volume (AUV) at franchise restaurants of more than $717,000 and EBITDA of 17 percent. With build out costs of $450,000 to $500,000, the brand provides operators with a strong sales-to-investment ratio. The extraordinary performance of Bruegger’s Bagels bakeries is at the heart of the brand’s 2014 growth plans. A strong increase in new bakeries is expected in top-tier markets where operations are ongoing in states such as Colorado, Illinois, Kansas, Michigan and Tennessee, among others. Taken in sum, Bruegger’s Bagels projects opening more than 100 new bakeries during the next five years. For more information: Website: www.brueggers.com
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FOO D Fra nch ises
Food for Thought: Welcome to The Food Supplement, Part 2 As I discussed in part one of the food supplement series, it’s true that often times when someone hears the word “franchise” the first thing that comes to mind is food, and reasonably so!
With thousands upon thousands of food franchises in many different shapes and sizes, the options are endless. From fast food monsters to fine dining gems, the diversity in food franchises is just as diverse as the food itself. Seeing as food is a major part of every culture, it’s simple to see why there is such a variety in the various types of food franchises available today. So if food is your passion and you’re looking to start a career in it, you’ve chosen the right industry. To give you a bit of history on how food franchises came to be, the concept became popular in the mid-1900s with the dawn of the baby boomers. This was around the same time that people began moving to the suburbs. Lacking restaurants in these remote areas, fast food chains began moving outside of the cities to develop in the newly populated areas- and thus, food franchises were born. While it may seem like an easy win to invest in a food franchise considering society’s universal love for food and the vast number of restaurants available, it’s
important to consider what type of food franchise is first, of interest to yourself, and second, going to thrive in your area. Just because you think it’d be great to have an all-you-can-eat Asian restaurant in the middle of Little Italy, or a Vegan Bistro in rural Texas, doesn’t mean the market is right. Nonetheless, if you find a niche and the right location there are some wonderful advantages to owning a food franchise, the first being that your customers come to you. Also, since food franchises have been around for over 60 years, many times multi-unit companies will have a track record available detailing their highs and lows. Through due diligence it should be easy to see if the business you are considering investing in is a winning one, or if your dream job is likely going to follow suite of the seventeen predecessors that have been there, done that… and it didn’t work. Lucky for you we live in a transparent economy and it’s become easier to determine not only what type of restaurant will work and where, but also
“You’re the new kid on the block and if you’re not giving your potential customers a reason to leave their favorite burger joint to try yours, how do you expect to generate business?” Franchising USA
“If you want to buy a pizza place, make sure it serves gluten-free, or if you’re thinking about a frozen yogurt shop, why not look into a DIY concept.” what consumers are looking for when dining out. Taking a look at some of the different kinds of food franchises on the market today, these can be broken down into four general categories: fast food (quick service), casual dining, fine dining, and mobile. Different types of food, customer bases, atmospheres, and hours of operation can then break down these categories further. For example, quick service food franchises can include anything from the 24-hour corporate monsters that clutter highways and convenience stores selling taquitos, to your morning coffee shop or favorite deli market. Typically serving foods such as burgers, pizzas, and sandwiches, these franchises can then be broken down further into niche groups such as takeout, drive thru or serve yourself. To paint the picture further for you, casual-dining franchises could be considered anything from a local sports bar, to seat-yourself diner, while fine dining is usually associated with champagne glasses and hefty bills. A popular category in the food industry is mobile food franchises. These booths or trucks may opt to serve the standard fries or shawarmas on a busy street corner, or perhaps they choose to set up shop in central park, serving pretzels or bibimbap. A rising trend in the mobile sector is food kiosks. Found in shopping centers, hospitals and airports, while many franchises refer to these locations as “nontraditional” units, the flexibility and ease of operating this kind of franchise has its benefits. Another hot trend in the food industry is healthy choice options. While the glutenfree fad has been around for a while, more and more businesses are picking up on the rising craze of healthy eating and offering products with fewer calories, less fat and lower sodium. With GMO-free
foods taking the spotlight most recently, these coincide with the popular trend of eating organic and whole grain foods, a movement that holds great customer appeal. While some consumers don’t think twice about what’s in their food, the notion of knowing what you’re consuming and where it came from is becoming more and more commonplace. Jumping on board with this trend are some of the world’s biggest food franchises. Seeking to appeal to the growing consumer demand for more humanely produced fare, in doing so these company are committing to serving food such as eggs and pork from cage-free chickens and pigs. Although the free-range movement may not be a new trend, it is most definitely headline worthy in the food franchise world. Food franchise categories and trends may sound straightforward, but there are many types of businesses that can fit into several of these depending on their product and operations. Catering companies for example, or table service coffee shops, where do these fit in? To complicate the matter even further, these categories can overlap. For example, the concept of fusion menus featuring dishes that marries two or more ingredients from various cuisines to create a new dish is exploding across North America. Or, as recognized by Forbes, the category of fast-casual niche restaurants is on the rise. The ideal situation, and perhaps recipe
for success, is to choose a category that not only suites your needs and your markets needs, but also serves a unique niche or caters to a particular trend. This may sound like a mission but in today’s evolving society niches and trends can be found from street corner to street corner. If you want to buy a pizza place, make sure it serves gluten-free, or if you’re thinking about a frozen yogurt shop, why not look into a DIY concept. These tailored franchises may seem tedious and over zealous but how are you going to stand out in a hungry metro area if you don’t offer something different, something special. Yes, you could buy into a monster chain with a proven success rate, but if you don’t have the means in which to buy the billion-dollar-brand, what is your plan? After all, you’re the new kid on the block and if you’re not giving your potential customers a reason to leave their favorite burger joint to try yours, how do you expect to generate business? At the end of the day, the most important thing to be sure of before you sign the papers and choose your site, is that you are happy. Asides from investing a large sum of money into your new business, you’re also going to be investing your time, hard work and dedication to the brand. Make sure this is what you want to do, because the saying goes, “Money can’t buy you happiness.” Jessica Spoto Editor, Franchising USA
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COV ER STO RY
A Taste of Taco Bell “The new products are well being received, we’re developing new restaurants, sales are up; all in all it’s a phenomenal time to join the team!”
The nation’s leading Mexican-inspired quickservice restaurant (QSR), Taco Bell serves made-to-order and customizable tacos, burritos, quesadillas, nachos, and other specialties like Doritos Locos Tacos to 36 million customers each week. Founded in 1962 in Downey, CA by Glen Bell, a World War II Marine Corps. veteran, Taco Bell Corp. is a subsidiary of Yum! Brands, Inc. Today Taco Bell has nearly 6000 restaurants in the United
Franchising USA
States and sells more than two billion tacos and one billion burritos each year. Franchising since 1964, Taco Bell currently has more than 350 restaurant franchise organizations and is now looking to bring its innovative Mexican food to consumers in new markets throughout the country. Announcing a ten-year growth plan to add 2000 new restaurants, Taco Bell will create an estimated 100,000 jobs nationwide. Seeking new franchisees to join the team, Taco Bell franchisees must be brand builders, interested in bettering the brand, contributing ideas and being innovative; good operators, efficient with running their store and satisfying customers; and developers, willing to take and tackle development in a big way. Dedicated to its ‘Live Más’ philosophy, which includes giving back to the community, franchisees should embody such beliefs and be willing to develop and expand the brand. “We’re looking for candidates with multi-unit QSR
experience,” says Sean Reaves, Senior Manager of Franchise Recruiting and Development. Franchisees must possess excellent customer service skills, an energetic personality, entrepreneurial spirit and a devotion to their co-workers. The ideal Taco Bell franchise candidate is also well capitalized or may be an individual with high net worth who is interested in being paired with someone with operational expertise. The minimum financial requirement to become a Taco Bell Mexican restaurant franchisee in the United States is $1.5 million net worth and $750,000 in liquid assets. Interested candidates can visit tacobellfranchises.com to learn about franchising opportunities and complete the application form. A Taco Bell team member will then contact the candidate, at which point they will be required to provide background information and undergo a financial review. Candidates will then be interviewed in the field to ensure their interests in development match Taco Bell’s expansion strategy.
“Our franchise business operations team help develop and manage the business throughout different stages and growth.”
Lastly, they will visit the Restaurant Support Center (RSC) to meet with the franchise department and determine a match in ‘Live Más’ qualities. Offering ongoing quality training and support, Taco Bell believes these steps to be the foundation for building a successful restaurant franchise business. As franchisees enter the Taco Bell franchise system, they will focus on four primary areas of emphasis: building their restaurant, building their team, setting up a strong start for the restaurant franchise and operational excellence. The training program has been designed into two parts. A one-week session at the RSC for the Primary Owner and eight weeks of training for the Principle Operator. The Principle Operator training consists of in-restaurant, web-based, and classroom training, and is taught by a certified Taco Bell training instructor in a certified Taco Bell training restaurant. Once training is complete, Taco Bell has a system in place to assist with site selection, as well as internal programs to help franchisees build their restaurant. Believers that ongoing support is necessary to succeed, Taco Bell also provides coaching, recognition and continuous backing for its franchisees. “The real strength of Taco Bell is our extensive experience with operations.
Our franchise business operations team help develop and manage the business throughout different stages and growth,” says Nicolas Boudet, Vice President of US Development and Franchising at Taco Bell. Taco Bell’s newest development is the Starting Bell program. A weeklong training course for new franchise owners to become indoctrinated in the brand, Starting Bell captures the essence of how to be a successful franchisee while paying respects to the company’s humble beginning and traditional tacos. The perfect means for new teams to learn the company’s values, passion, and get a taste of what being a Taco Bell franchisee entails, this program also allows franchisees to meet one on one with executive leadership members, creating an open door environment. “One of the greatest qualities of the Taco Bell brand is how accessible the senior team are to franchisees,” Boudet says. “The team is very hands on, and in-tune to what’s happening on the ground. This makes a difference with the brand as there is no separation of thought. Executives are able to see what’s coming next, what needs to be fixed, and able to act and react very quickly.” Taco Bell’s strong culture is largely due to the genuine relationships between franchisor and franchisees. “The
transparency in the relationships with franchisees is the company’s advantage in the industry,” Boudet says. “We’re open to honest, healthy debate and engagement, and we help our franchisees go through any challenges.” Taco Bell’s strong national and international brand and known products are also key advantages to being a Taco Bell franchisee. Other benefits include; a proven operating system, access to the United Foodservice Purchasing Cooperative (UFPC), and a peer network of franchisees, of which more 35 percent of them have 25 years experience with the brand. “We are the leading Mexican QSR in the world,” Boudet says. Taco Bell was also recently awarded Marketer Of The Year, demonstrating the company’s ability to attract consumer attention with the iconic, re-energized brand. Continuing to build relationships with consumers and help them Live Más, Taco Bell is dedicated to giving back to the community and keeping connected with its customers. “We feel that we hit the mark when it comes to engaging customers and talking their language. We understand what they want, and we provide the product while also sharing our values,” Boudet says. Pushing to elevate the Taco Bell experience, the brand is committed to providing a compelling encounter that will keep customers coming back for more. With ambitious growth goals Taco Bell is looking for the best of the best to join the team, and now is a great time to get on board with the brand. “We’re at a point where everything is resonating with consumers,” Reaves says. “The new products are well being received, we’re developing new restaurants, sales are up; all in all it’s a phenomenal time to join the team!” For more information: Website: www.tacobellfranchises.com
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Lawrence Eade, CEO of Wok Box
Necessary Tools
For Owning a Restaurant Look In The Mirror Being honest with oneself on what is involved in operating a restaurant, especially in new markets or with a newer less established brand, is a critical first step in the evaluation process of whether to buy a franchise restaurant or not. The largest variable to the success of a restaurant business is the operator. A great operator of the business can overcome mediocre location and food offerings nine times out of 10. A prospective franchisee needs to be realistic with their abilities, look objectively at their strengths and weaknesses, and come to an understanding that they have what it takes. Two questions we always ask our potential franchisees are: • Are you prepared to work 60 to 80 hours a week for months on end to get the business on its feet? • Can you do this while maintaining a positive attitude to lead your staff and give your customers the best experience in your restaurant? Ask any successful owner of a restaurant and they will nod their head that answering with an unqualified ‘yes’ to these questions is necessary to be successful in our industry.
So You Want to Buy A Restaurant Franchise?
We hear this story all the time. These
You like food. You like to cook food for your friends and family. There’s a great location in your neighborhood, and you want a career change – why not open a franchise restaurant?!
into the business but there are several
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motivators for potential franchisees
are often the impetus for them to jump considerations that one should put time and thought to when making the leap
from employed to self-employed in the restaurant industry.
Do You Have The Cash? It seems like an answer that one should have well before they really start digging into the finer details of opening a business but in our experience that is not always the case. Every franchisor, whether in the restaurant industry or not, will require the franchisee to have approved financing
“A great operator of the business can overcome mediocre location and food offerings nine times out of 10.”
estaurant Franchise and capital in place before signing their franchise agreement. When looking at one’s financial position the following questions should be asked: • How does the potential business fit into your overall investment portfolio? • How much equity are you able to put into the business? • Are you relying on the business as a significant source of income for you and your family? • How much debt do you believe your business can service after all operating expenses? • If your business cannot pay its debt, do you have alternate income to help pay the debt? • Are you willing to sacrifice your current lifestyle if your business requires
additional funding from you? A business is a risky venture, there are no guarantees of results and profit. Looking at the worst-case scenarios and what those situations may bring is something many potential franchisees fail to do. They buy into the up-side stories and imagine themselves becoming wealthy quickly. Making money is the goal of each and every business owner and properly evaluating the financial risks involved will allow one to be successful. For example if a potential franchisee is 50 years old and is putting all their retirement savings into the business the risk for them becomes even greater. If they are going to be wholly reliant on the business to pay their lifestyle it is again riskier. Conversely if a potential franchisee has alternate income sources (spouses income, investment or rental properties
Lawrence Eade
that pay dividends), and is able to fund the restaurant capital with a portion of their savings their risk is reduced. Remember no one can predict exactly how a business will perform so understanding the downside risk is very important.
Passion For The Brand Do you really like the product you will be serving? Every business owner goes into business to make money first and foremost but it becomes much easier to achieve that end goal if you love what you do. In the restaurant industry if you do not believe whole-heartedly in the product you are serving your guests they will notice. Having conviction about the products and food your restaurant puts out is critical. A potential franchisee cannot just go into the business because they think it is a moneymaker, they have to love the food and the brand they are representing.
What Does The Franchisor Offer For Support? Buying a franchise goes beyond serving a recognizable product, having standardized systems, and marketing support in driving ones business. Having support past the basic systems manual will significantly reduce the risk of opening a business and will allow a franchisee to focus on the operation, provide great customer experience, and ultimately drive the profitability of the business. I would encourage franchisees to look at these areas of the franchisor’s support offering
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Lawrence Eade, CEO of Wok Box
“A potential franchisee cannot just go into the business because they think it is a moneymaker, they have to love the food and the brand they are representing.” a training store or do they train you in another franchisees restaurant? Does everyone pass their training or do they stop some franchisees from opening because they don’t pass training? Training is critical to a franchisee’s success and the longevity and future of the brand. Ask other franchisees in the system how their training experience was and what could be improved on by the franchisor. Franchisees should be excited to join a brand and open their own business. They should not let this excitement cloud their objectivity and decision making process. Giving proper consideration to the aforementioned areas will not guarantee success or eliminate the risk involved in a new business but it certainly will allow a potential purchaser to be more confident in their ultimate decision.
when considering a business: 1) Location Selection: Each franchisee comes to me with a site already in mind and it is understandable why – when they envision themselves opening the store they have to have a place in mind! A franchisor intimately knows what each premise needs to have to properly open their brand and to keep construction and leasing costs in line with their projections. Furthermore because of the relationships that a franchisor likely has within the real estate community they are able to negotiate stronger leasing terms and understand the demographics of markets in a manner that is better than
Franchising USA
the individual franchisee. A franchisor should open up these strengths to each franchisee as a part of their support. 2) Construction Support: You want to become a restaurant owner not a construction expert. Franchisors often provide turnkey builds of their restaurants for franchisees to take this workload off the shoulders of the franchisee. At the very least a franchisor should be involved in the design and drawing process and have an open door for ones contractor when they have questions on the build process. 3) Training: How long is training? Where is it held? Does corporate have
Lawrence Eade developed great interest in the restaurant industry at a young age when he worked at a national fast-food restaurant chain in Red Deer, Alberta. While earning a Bachelor of Commerce from the University of Alberta, he spent evenings working at a local pub where he gained the valuable business experience that is needed to operate restaurants effectively and efficiently. Upon graduation, he spent two years working as an accountant for KPMG in Edmonton, Alberta, where he earned his Chartered Accountant designation. Since joining the Wok Box team, Lawrence has provided leadership and decision-making to grow the brand from three locations in Canada to over 75 franchises globally. For more information: Website: www.wokbox.ca Email: lawrence@wokbox.ca Phone: 778-545-0233
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A MST ER DA M FA L A FELSHO P
Amsterdam Falafelshop: Feeding Franchisees A Winning Concept
Top-it-Yourself Falafel Shop with Amsterdam vibe and cult following kicks franchising into high gear; announces new financing program to support franchise growth. It’s 3 a.m. and you have an insatiable craving. Your stomach is turning and the room begins to spin. You’ve reached your limit and need relief. Chances are you’ve got an extreme case of munchies after a long night out…OR, if you’re a multi-unit restaurant operator, the instability of your portfolio has overcome you with anxiety and you’re in need of a high-performing concept. There’s good news for both bar crawlers and restless restaurateurs. Amsterdam Falafelshop, which has turned fresh falafel into an around the clock sensation in Washington D.C.’s famed Adams Morgan neighborhood, has announced a growth strategy that will satisfy the appetites of the tipsy…as well as talented entrepreneurs. The renowned top-it-yourself falafel shop with a vibe, culture and flavor that commands a global fan base is moving forward with an aggressive U.S. franchise growth plan calling for expansion into select urban centers where the brand can maintain its originality among a diverse collection of consumers. With two franchise shops currently operating in Boston and Annapolis, an additional four shops are in development in the D.C. area and another four in Boston. Plus, the brand just inked an agreement to open in
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the Dallas/Fort Worth market and in Salt Lake City. “We created a movement in D.C. that reflects our quirkiness, and we’re incredibly excited about extending it to other great American cities,” said Arianne Bennett, co-founder and CEO of Amsterdam Falafelshop. “You will not find a restaurant concept with the food and environment that we offer, and that’s why we have fans around the world. We’ve done our homework and it is clear that restaurant franchise investors are jonesing for what we’re cooking.” Launched in 2004, Amsterdam Falafelshop has become the darling of Washington, D.C., consistently topping best-food lists, receiving widespread food-critic acclaim, and winning over the hearts of customers. In addition to serving fresh-made falafel sandwiches and Dutchstyle fries [“frieten”], the shops offer nearly two-dozen toppings for patrons to customize their falafel. Focused franchise growth plans call for expansion into key U.S. areas throughout the Northeast, Eastern Seaboard, Midwest and Southeast. Target markets include Atlanta, the Carolinas, Miami, the New York metro area, Philadelphia, Richmond, and Tampa. Amsterdam Falafelshop has also pinpointed Chicago, Ohio, and major metro markets in Texas. Amsterdam Falafelshop is targeting multi-unit franchise developers that have experience in restaurant ownership and a desire to break into a fast-growing
franchise at the ground level. Similarly, the brand will award franchise opportunities to qualified, transitioning professionals who are willing to follow the concept’s proven business model. All candidates must embrace the brand’s commitment to community and share the progressive spirit that embodies Amsterdam Falafelshop. Beyond consumer appeal there are additional factors drawing franchise investors to Amsterdam Falafelshop. In particular the concept’s low overhead and simple operating model. Shops are housed in fewer square feet than typical fast casual brands, saving franchise owners on rent and build-out expenses. Amsterdam Falafelshop franchise shops are independently owned and operated. Individuals interested in owning a location need between $365,000 and $493,000 in working capital, which includes the $29,500 franchise fee. For more information: Website: www.Falafelshop.com
Wingstop:
60 0 Strong and Growing Created by an aspiring entrepreneur in 1994, Wingstop quickly expanded from a small neighborhood restaurant in the suburbs of Dallas, Texas, into a worldwide fast-casual dining experience. With a unique menu, the focus is on chicken wings being the “center-of-theplate” food item. With 600 locations in 30 states and internationally, it is how Wingstop delivers the dine-in and carryout experience for a commuter-type individual that has driven much of the company’s success. The “Wing Experts” menu features classic and boneless wings with 10 intense flavors. Wingstop wings are always cooked to order, sauced, tossed and served with a variety of house-made sides including award-winning fresh-cut seasoned fries. More than 75 percent of store sales are carryout, allowing the Wingstop concept to lower operational and development costs. Each restaurant is designed to create a fun, comfortable dining atmosphere for customers and for the ease of operations by the franchisee. This has resulted in Wingstop being one of the fastest-growing franchises that appeals to both multi-unit and single-unit operators. Beyond the made-to-order wings, it is the simple operating platform that has led the brand to adding new stores at a rate of 20 percent per year. To date, 95 percent of Wingstop restaurants are franchised and on average, a restaurant functioning
within the traditional layout produces a $900,000 average unit volume (AUV)—a performance barometer that continues to attract franchisees looking to own their own business. Approaching 2014 and 10-plus years of same store sales growth, Wingstop continues its successful journey. This type of financial and developmental success is largely attributed to a strategic business model and the Wingstop Franchise Program that supports franchisees in the following areas: • Hands-on orientation that focuses on restaurant operations • Administration and customer relations
• Readily available on-going marketing and operations guidance
Recently, Wingstop further kicked-off its expansion efforts with the opening of its 600th location in the Washington, D.C.
area -an identified 2014 growth market. With a momentum of opening three
stores a week and closing the year with 65
restaurant openings in new and established markets, Wingstop is on track to reach 1,000 stores in the coming years.
In preparation for 2014, Wingstop is now offering franchise opportunities in the
following markets: Baltimore, Maryland;
New York City; Minneapolis; Washington,
• Professional architectural, design and engineering services for restaurants
D.C.; Miami-Fort Lauderdale; and
• Restaurant launching and operations support
For more information:
Cincinnati, Ohio
www.wingstopfranchise.com.
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Jason Power and Lynne Shelton, Shelton & Power, LLC
Quick Service Restaurant
Doesn’t Always Mean Quick Profits Franchising USA
“The QSR industry accounts for 37 percent of all employment in the franchise industry. In 2013 there is over three million employees in QSR’s, and it is growing every year, quite substantially.” It is not surprising that when most people think of franchising they immediately jump to thoughts of McDonalds, Burger King and Subway. These quick service restaurants, or QSR style franchises have a big footprint in not only the restaurant market, but the franchise market as a whole. Although the QSR industry is slated to rake in over $206 billion dollars in 2013, an increase of over 5.2 percent, what many prospective franchisees do not realize is that these and other restaurant franchises are not always automatic moneymakers. They take effort and the right person to make them work. For years, restaurant franchises have been the number one growing sector within franchising and for good reason. There is money to be made in quick service restaurants, but there is also a lot of work and energy that must go in to the restaurant to make it a profit center. QSR franchises require the owner/ operator to have great people skills and a staff with equally excellent abilities to be successful. Any reader can relate to a bad experience at a QSR restaurant where they encountered an employee who was not right for their position. A time when an employee involved in customer service could not make the experience an enjoyable one, and instead ruined what you had hoped would be a good meal out with friends or family. A QSR franchise owner must also understand that a franchise in the restaurant industry can be costly. With many restaurant franchises being
standalone buildings, the costs can be high for the land, build out and architectural fees. In many instances costs will surpass $800,000. Along with higher fees to start a QSR restaurant, the fees for the food served can be costly as well, depending on the QSR, their vendor’s location and shipping methods, and the availability of closer or less expensive supplier options in a franchises location. One benefit to buying a QSR franchise is that financing can be easier to obtain. Banks and other lending sources are familiar with restaurants, they understand the costs associated and the inventory, furniture, fixtures, and equipment that are available as collateral. This knowledge means that it is easier for them to justify financing for the business over that of many service based businesses where tangible assets are limited, and intangible assets are harder to justify. When buying a quick service restaurant, employees are an issue that can be very stressful. The QSR industry accounts for 37 percent of all employment in the franchise industry. In 2013 there is over three million employees in QSR’s, and it is growing every year, quite substantially. Just within the last year the employment rate grew by 2.2 percent for owners. Not
only must you consider payroll, overtime, and whether to offer paid time off, but you also have to consider health insurance, workers compensation, and scheduling. One of the hardest juggling acts reported by QSR owners and managers is determining work hours for people dealing with family lives and many times school schedules. With most quick service restaurants hiring younger employees who will work for less than some of their older counterparts, the turnover in a QSR can be quite high when school starts or during seasonal changes. Depending on the QSR franchise purchased, employees may be required to attend some level of training with the franchisor. This training can greatly hinder profits if training is constantly be required due to high turnover of various employees. This is why it is imperative to find employees who have long-term goals with the restaurant or can be groomed for management positions with higher salaries as incentive to stay within the QSR business longer. Regardless of whether you are the first franchisee for your particular brand in your city or you are just one of the many franchise owners in the region, remember that you are buying the brand, and the goodwill associated with it. Branding is what has led businesses, not
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Jason Power and Lynne Shelton, Shelton & Power, LLC
just restaurants, worldwide to experience high profits. Branding teaches people to know what to expect when buying that businesses product or service. This is the crux of what a franchise is all about. When someone walks into a Subway restaurant in Austin, TX they know that they will experience the same smells, flavors, colors, and general atmosphere that they are used to when they go to a Subway in any other city. This branding is what has led many businesses to success because their customers know and rely on the fact that they will have an equally pleasant experience regardless of whether they are at the restaurant near their home or the same restaurant across the country. The key to owning and operating a QSR franchise is to ensure that you have the skillset to handle multiple employees all housed within a small area, while still maintaining the proper customer service skills to gratify the customer and ensure that they will return. With most variations of quick service food types being saturated in the marketplace, a savvy franchise purchaser must ensure that when buying their QSR they will stand out from the competition. If your restaurant serves hamburgers, then you will have a lot of competition, but if you can differentiate your hamburger or your customer service from that of your competitors, in a positive way, then you can many times overcome the competition and make a name for yourself in the area. With more and more people on the go and avoiding long lunches and dinners, quick service restaurants are filling a need for consumers everywhere. From 2012 to 2013, the QSR franchise industry grew by 1.7 percent, which brought their numbers up to over 153 thousand establishments just in the United States. In the last ten years the industry has continually grown and it does not seem to have a plateau planned in the near future. Profits may not come quick for the average franchisee, but for the willing entrepreneur, the long game may well be worth the investment of both time and money.
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“From 2012 to 2013, the QSR franchise industry grew by 1.7 percent, which brought their numbers up to over 153 thousand establishments just in the United States.� 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. Lynne Shelton, Esq., is a Senior Partner over the Franchisor division
Jason Power
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 franchise shows. For more information: Website: www.SheltonPower.com Email: Franchising@SheltonPower.com Phone: 1-866-993-7262
Lynne Shelton
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DON’T MISS OUR NEXT ISSUE!
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Find out more about Home Services in the January edition of Franchising USA.
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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
Adam Heitzman, Co-Founder and Managing Partner at HigherVisibility
SEO and Social Media:
How to Successfully Market Your Franchise Franchise marketing has always been tricky, and the constant Google algorithm changes don’t help make things easier - just this year there were 14 algorithm updates made. As search continues to evolve, your SEO strategy is going to need to evolve with it. Franchising USA
Unfortunately, constantly altering and improving your SEO efforts is tougher when you’re dealing with multiple franchises because this means multiple locations, mangers and staff, and different audiences or customers. The way that you structure your SEO is going to need to be different than back when you just had one branch and one management system. This leads to a long set of important questions: How do you get started with SEO, social media, and content management when you own a franchise? Should the national branch be in charge of marketing, or is this something
to put all of your efforts into the hands of your national branch as opposed to giving each franchise it’s own power when it comes to optimizing a website for Google (which includes not only on-page optimization, but off-page promotion and link building as well). A few reason include: • Organization and Control Because SEO can be so intricate and complicated, it’s easy to get confused and make mistakes. Having too many people trying to make decisions can be tough, so it’s best to try and control everything from one branch. Different branches may have different needs when it comes to SEO, but let your corporate marketing team or your one marketing agency take control so that the same set of people are in charge. This will help create a bigger picture and make sure there is no overlap and things say uniform (our next point!). • Keeping your Brand Uniform Although you might have different branches with different needs, everything should remain uniform across the brand. Because SEO is all about branding and creating that visibility, it’s important that there is a big-picture goal and good communication. The easiest way to make this happen: Have the same people in charge of SEO for all branches. that should be put into the hands of each individual branch?
SEO: Top Reasons To Put Your Franchise SEO Efforts Into the Hands of Your National Branch For those who are unfamiliar, a franchise occurs when one person or a group of people earns permission by a company to open up another branch of that company. In other words, earn the rights to that company. These people are called “franchisees.” When it comes to SEO, it’s usually best
• Avoid a Lack of SEO Knowledge If you put SEO into the hands of managers, they may not fully understand how SEO works. This could potentially cause each branch to feel the need to either A), Hire an SEO agency, which would be quite expensive, or B), Do SEO incorrectly, which could get you into a mess, such as a Google penalty, that could take years to clean up. There are also a lot of people out there who claim to be SEO experts who really are not, so putting the decision to hire someone or some agency into the hands of a manager who doesn’t understand
Adam Heitzman
SEO could be detrimental overall. • Local Ranking Factors If you have a few different branches in a similar location (usually just very large brands), you could run into some local ranking issues. If all of your brands are trying to rank on local search, each branch will probably be targeting similar keywords and therefore becoming competition. The best way to solve this problem is to have the same set of people working on SEO so that they can see what keywords each branch is targeting and at what times. If you split up your SEO efforts this would be nearly impossible. You can learn more about local search issues and management here. • More Cost Effective Finally, it’s usually more cost effective to run your SEO this way. A good agency will work hard to give you a good deal and meet your needs if they know your have franchise work that needs to be done (you’ll be a bigger client to them).
So When Should Each Franchise Location Take Control of Their Own SEO? It’s true that in the majority of cases SEO will run smoother if corporate is taking control, but there are always
Franchising USA
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Adam Heitzman, Co-Founder and Managing Partner at HigherVisibility
those companies that don’t fall into the majority. If you’re only working with one franchisee, and particularly if that location is very different than your corporate location (i.e.: rural vs. urban), you might benefit from letting that branch take over their own SEO efforts. Communication won’t be too difficult since there aren’t that many people involved, and you’ll have very targeted control over what’s going on because the agency and/or expert will only have one location to worry about when creating a strategy.
Social Media: Should Each Franchise Have It’s Own Social Media Strategy? Social media work typically falls under the SEO umbrella, so it only makes sense that your social media accounts would be managed at the national level as well, right? This is definitely sound logic, but there are a few reasons why social media might be something a franchise manager could control. It’s first important to understand that social media no longer means simply tweeting out a piece of content. It now means analytics and data regarding social success, developing posts and designing pages, a system of who will manage all accounts and keep up with comments and engagement. In other words, it’s now a pretty complicated job and something not to take lightly. Consider some of the pros and cons listed below:
When Social Media Is Best at the National Level This strategy means that your company would have one account on each social network—Facebook, Google+, Twitter, LinkedIn, StumbleUpon, etc.—that represents all of the branches. Those at the corporate level would then manage the accounts. You should use this approach if: • Your customers don’t use much social media Plain and simple, if your audience isn’t
Franchising USA
“Because SEO is all about branding and creating that visibility, it’s important that there is a bigpicture goal and good communication.” using social media to interact and make purchasing decisions, keeping your social media strategy simple and unified is the way to go. • Your business deals with sensitive information Industries such as the health industry or a news organization have to be very careful when it comes to sharing things on social media. This is a quick way to get information out to the public, so you don’t want to trust just anyone to have access to your accounts. • You’re trying to be cost effective Obviously every company is trying to be cost effective, but some are willing to splurge in certain areas. If social media is not your top priority (if you fall into one of the two points discussed above), this is the approach that will save you the most money overall. • You have a large company with many locations This point encompasses all of the points discussed in the SEO section above. One account and only one team of people managing those accounts will ensure better consistency and no overlap.
When Social Media Is Best at the Local Level This is by far the riskier approach, but it doesn’t hurt to look at the few times this actually might be the best move for your company: • Your locations have significant differences Social media is a marketing tool that should be specific to your audience, which means it’s a great place to advertise local deals, contests, etc. By having different social accounts for each
of your branches, you can better analyze the demographics of your customers and customize your content. You can learn more about content management here. • You gave your franchise managers SEO control If you decided that putting SEO tasks into your branch managers hands was best for you (maybe you’re a small company with only one other franchise location), looping social media into those responsibilities will help keep things organized best. So what’s the case for LinkedIn? This social network is a little bit different because it doesn’t focus quite as much on engagement. It puts a focus on connecting with others in the industry who want to know more about the company (oftentimes to potentially find a job), so one LinkedIn account is all you need. In the end, creating a strategy will be similar to how all businesses would create a strategy—analyze audience, look at data, test and retest landing pages, link building, targeting keywords, etc.—but it’s the management that can really make or break a franchise’s marketing initiative. Once you know who will manage all of your search and social tasks, you can start to get into a routine that makes franchise marketing seem like it’s not so tricky after all. Adam Heitzman is the Co-Founder and Managing Partner at HigherVisibility, a nationally recognized SEO firm that offers a full range of internet marketing services. For more information: Website: www.highervisibility.com/
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'3&& 4&0 "OBMZTJT BOE 2VPUF $BMM /PX 901-672-7243
www.highervisibility.com
info@highervisibility.com
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f ra nchisee in action
Papa M ur phy ’s Piz z a
Papa Murphy’s Makes “As a Papa Murphy’s franchisee I have the ability to own a business where people love you and your food.”
Mark Bomberger
A veteran of the restaurant industry, Mark Bomberger was born and raised in the southern suburbs of Chicago, Illinois. Attending Loyola University before transferring to Western Michigan University, Bomberger graduated with a Bachelor of Science in Mathematics. Employed with restaurants throughout high school and his college years, Bomberger was no stranger to the food service industry when joining the world’s leading take-n-bake pizza chain: Papa Murphy’s.
Franchising USA
As a part time employee with a Burger chain throughout his younger years, Bomberger found this the perfect means to compliment his college income. Staying with the company for a few years after graduating, he soon after found employment with Greyhound Food Management Inc. In the early eighties Bomberger was promoted to Regional Manager for Trailways Food Services. Responsible for transforming the fading bus terminal restaurants into dynamic fast food joints, gift shops and game rooms, Bomberger found success with the company until things took a turn for the worse. With airline wars on the rise, it was suddenly cheaper to fly than take the bus, and so Bomberger moved on. Spending the next 28-years working for PepsiCo’s Taco Bell, which was later spun off as Yum! Brands, Bomberger was hired as a District Manager, but filled many positions throughout the years including Franchise Consultant, Area Manager, Director of Franchise Operators for the mid west, and finally Regional Vice President for Taco Bell in the northeast. With 650 stores under his command, Bombeger retired in 2009. Taking some time to figure out what his next move would be, this is when Bomberger was introduced to Papa Murphy’s Pizza. One day while on a post-retirement
vacation, Bomberger crossed paths with a former Taco Bell employee who was now the eastern Director of Franchise Sales for Papa Murphy’s. Learning about the brand and franchise opportunities Bomberger became intrigued. “I had never been to a Papa Murphy’s, but I looked into it, visited some cities with Papa Murphy’s stores, and talked to their franchisees about the brand,” Bomberger says. “That’s when my wife, Tammy, and I decided it was the next thing to do. So we partnered up and signed the franchise agreement in late 2009.” Opening their first location in Frederick, Maryland in 2010, today Bombeger is the Area Representative for 10 counties on the east coast, including Virginia, Maryland, the greater Washington DC area, and Baltimore. Together him and his wife own three Papa Murphy’s locations; the other two both in Hagerstown, Maryland. It’s a family affair, as the Bomberger’s were able to have their son-in-law, Travis Shull, join the business. “Travis quickly became an integral part of our success!” Bomberger says Proud to be serving guests customized pizzas from scratch-made dough, freshly grated 100 percent whole-milk mozzarella cheese, hand-chopped vegetable toppings, and a variety of meat selections, Bomberger is a fan of the take-n-bake concept. Allowing customers to watch
s a Match their pizzas be created on order then taken home to bake in their own ovens, from a franchising perspective this concept also creates a low cost of entry. Requiring a smaller store space since there is no in-store dining, take-n-bake also cuts the hefty costs of equipment such as ovens and freezers. While the standard hours and no-delivery service were also selling points for Bomberger, more than anything else he was excited to introduce the taken-bake pizza to the east coast. Undergoing the comprehensive four-week franchise training process that covers everything from in-store hands on training at an existing location, to training in a classroom setting where franchisees learn about financial management, the business system and processes, Bomberger was especially impressed with the thoroughness of the brand’s training and operations.
end of the three days process both parties have the opportunity to change their mind at no cost. “If for some reason I thought I wanted to own a franchise and after the in-store training I changed my mind, I could have gotten out of commitment. On the other hand if Papa Murphy’s decided I wasn’t a good fit for the company they could have refunded my money and the contract would be void,” Bomberger explains. Pleased with the initial training, Bomberger then spent four weeks of in-store comprehensive training which covers how to prepare the menu, do the prep work, and organize the schedule. Travelling next to Vancouver for a weeklong course on ownership, here Bomberger was educated on various topics such as how to be a franchise owner,
business legalities, accounting, and how to complying with company regulations. The final stage of training focused on point of sales training with NCR in a classroom setting. Once completing the training Bomberger set out to find his Papa Murphy site. “The company provides excellent assistance with site selection, but since I was a veteran of that sort of activity I was able to successfully find my own sites, which were then approved of by the company,” he explains. Impressed with the support of the company, Bomberger has ongoing support through a dedicated team available to him. “They make periodic visits to the stores and do full operations audits,” he says. “They make it so as a franchisee I have plenty of opportunity to interact with the corporate staff, get support and feedback.”
Attending stage one of training, a threeday activity which involves working in an existing Papa Murphy’s location with a training manager, here Bomberger was exposed to the daily routines and tasks of running a franchise. One of the most unique traits of the company is that at the
“If you want to be involved with a brand that you’re going to be instantly proud of and make fans, Papa Murphy’s is it.”
Franchising USA
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Papa M ur phy ’s Piz z a
As Area Representative, Bomberger is responsible for recruiting and selecting new franchise owners, providing direct support for site selection, construction, new store openings, and ongoing operations. Bomberger’s Frederick location serves as the certified training store for franchisees on the east coast. The most gratifying experience for Bomberger has been the customer feedback which recognizes the great teams he has built in each of his stores. “I’ve been in the business a long time, I started by working in restaurants then running them. I moved up the ranks in organizations, leading groups of organizations. My biggest worry was could I get back into a store situation, working with young people with the generational changes. I wondered if I could be as good in store as I was when I was 25,” he says. “The good news is that even though things have changed and the world is different now than it was in 1977, the basic things you need to do to build great teams and provide great service are the same.” For Bomberger the best thing about being a Papa Murphy’s franchisee is what the brand stands for. “Papa Murphy’s leads the nation in their quality and loyalty. People love our food, once they get a chance to taste it they become loyal fans. As a Papa Murphy’s franchisee I have the ability to own a business where people love you and your food,” he explains.
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“The good news is that even though things have changed and the world is different now than it was in 1977, the basic things you need to do to build great teams and provide great service are the same.” Retiring from a job that involved traveling 46 weeks a year to a job where all three of his franchise locations are a mere 25minute drive from his home, Bomberger says that his lifestyle has vastly improved. “Comparing my old job that required me to be away from home so much to now, with my wife as my business partner, this is better, much, much better.” Today the couple lives on a beautiful 20-acre farm in Maryland, 20 minutes outside Gettysburg. To those interested in joining the Papa Murphy’s brand Bomberger says to think about what it is you want to do with your life. “If you want to be involved with a brand that you’re going to be instantly proud of and make fans, Papa Murphy’s is it, and if you don’t know what it is you want to do yet, eat one of our pizzas!” For more information: Website: www.papamurphys.com Facebook: www.facebook.com/ papamurphyspizza
OWN A BUSINESS YOU AND YOUR OWN A BUSINESS YOU AND YOUR OWN A BUSINESS YOU AND LOVE!YOUR OWNCOMMUNITY A BUSINESSWILL YOU AND YOUR COMMUNITY WILL LOVE! COMMUNITY WILL COMMUNITY WILL LOVE! LOVE!
A Successful System Over 1,360 stores in 38 states A Successful System A Successful System Pizza Chain in Zagat Food Survey A#1 Successful System Over 1,360 stores in 38 states Over 1,360 stores in 38 states Proven historical Over 1,360 stores in 38 record states #1 Pizza Chain in track Zagat Food Survey #1 Pizza Chain in Zagat Food Survey Lower initial investment in Survey #1 Pizza Chain in track Zagatrecord Food Proven historical Proven historical track record restaurant segment Proven historical track record Lower initial investment in Lower initial investment in restaurant Lower initialsegment investment in restaurant segment restaurant segment
Ease of Operations No cooking & dining Ease of Operations Ease of Operations No Ease of Operations No delivery cooking & dining
No cooking & dining Limited hours of operation No cooking & dining delivery No delivery Ongoing support from corporate No delivery Limited hours of operation Limited hours of operation & field systemof operation Limited Ongoinghours support from corporate Ongoing support from corporate & field system Ongoing support from corporate & field system & field system
For franchise information: :: -777-franchise call 1-877For 5062 or visit information papamurphysfranchise.com For franchise information : -777-franchise call 1-877For 5062 or visit information papamurphysfranchise.com - call call 11-877 877-777 777-5062 5062 or or visit visit papamurphysfranchise.com papamurphysfranchise.com Franchise offer made by Prospectus only. Franchise offer made by Prospectus only. Franchise offer made by Prospectus only. Franchise offer made by Prospectus only.
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Franchising USA
ex per t advice
Greg Nathan, Founder, Franchise Relationships Institute
The Seven Deadly Sin Franchise Relations Over the years I have spoken in some depth with hundreds of franchisor executives about their experiences working with franchisees.
I have found most of these people to be genuinely motivated by a desire to see their franchisees prosper. Yet most, at one time or another, find themselves harboring feelings of frustration or hurt, brought on by what they see as unreasonable or vindictive behavior by their franchisees. Although such interpersonal tension comes with the job of being a franchisor, it is in the interests of franchisees and franchisors to work at building good relationships with each other. In the past I have argued strongly that it is a franchisor’s responsibility to ensure the relationships they have with their franchisees are effectively managed. However this will only work if franchisees also take responsibility for keeping their franchisor on side.
In this article I will share some research findings on seven types of franchisee behavior that gets franchisors off-side and thus damages the franchise relationship. Perhaps we could call them the seven deadly sins of franchise relationships.
1. The Blame Game Human beings have an uncanny ability to interpret events to suit their own interests. For instance, we like to take the credit when things go well in our work, however, when we are not getting the results we expect we tend to instinctively look for a cause outside of ourselves. Similarly, when sales are going well the franchisee may attribute this to their own hard work and talent. But if sales drop the franchisor will often get blamed, sometimes unfairly. This only serves to frustrate and demotivate franchisor staff and certainly does nothing to enhance their creativity or desire to try new marketing initiatives in the future. Instead of waiting until sales are dropping, why not give your franchisor a call when sales are going well and congratulate them on the excellent marketing support they have provided. You will be building goodwill and reinforcing the franchisor to continue their creative efforts for your benefit.
2. The Slack Attack Nothing annoys franchisor staff more than a franchise operation that looks run down and shabby due to a lack of effort by the franchisee. Franchisees who take the maintenance of standards and day-to-day routines seriously can almost guarantee the respect and support of their franchisor. In a franchise environment, slacking on operational standards gives everyone a bad name and is certainly unlikely to win you many friends or customers.
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ns of ships
3. The Frank Sinatra Syndrome “I Did It My Way” may be a song that franchisors love to sing. But it is not a tune they like to hear from their franchisees. Experimenting with your franchisor’s concept without prior consultation is bound to get you into hot water so be sure to use proper channels for trying out new ideas. For instance you might participate in a product advisory team. If you are a particularly creative person, why not arrange to have your business used as a research and development site?
4. The Clingon Reaction Although businesses must change if they are to remain in touch with their customer’s needs, when changes are proposed in a franchise network, they tend to be greeted with a range of responses. While many franchisees will consider the changes with an open mind, some will habitually reject the proposals outright without properly considering the merits of the change. I call this the “Clingon Reaction”, clinging on to the past, without any logical reason, even if it means becoming out of step with your customers. Rather than putting your franchisor in a position where they feel they have to drag you kicking and screaming, why not investigate the change with an open mind by asking questions and weighing up the risks and opportunities in a logical manner.
“‘I Did It My Way’ may be a song that franchisors love to sing. But it is not a tune they like to hear from their franchisees.” 5. Bulletin Blindness A common task for franchisor staff is taking irate phone calls from franchisees who indignantly ask “Why wasn’t I told?”. The response is typically, “Francis, if you read the bulletin that was sent to you last week you will find all your questions have been fully answered”. Despite being busy and having to attend to 101 urgent details, if you are a franchisee it is vital that you take the time to read the information sent to you by your franchisor. They will no doubt have been carefully prepared with important information on a range of topics to help you with your business.
Greg Nathan
6. Blowing Up If you have ever had a boil you will know how painful they can be. What happens is the poison builds up under the skin, creating more and more pressure, until eventually it erupts with a vengeance. Feelings of frustration and resentment can behave in a similar way if they are not appropriately expressed. They build up until they are eventually released in a tirade of poisonous abuse. This makes everyone feel awkward and can damage long-term relationships. Part of every franchisee’s training and induction should include lessons in how to complain effectively. Saying what’s on your mind in a straightforward and honest manner before things blow up is a more positive and effective way to manage your relationship with your franchisor.
7. Playing Prisoner When you bought into your franchise you hopefully made a properly researched and informed decision. The franchisor was not pushing you or twisting your arm. Yet some franchisees, when faced with difficult or challenging times, behave as though they are prisoners of the system or
part of a conspiracy designed to take away their sense of responsibility or freedom. As mature adults we are all responsible for our own decisions. Expecting others to make our decisions for us, or playing the role of victim when things don’t go as we expected serves no-one’s interests. Franchisors are far more likely to respond in a constructive manner if a franchisee with business problems takes the attitude, “I have some problems and I need some help and advice. But at the end of the day I accept that I have to take my own decisions.” The franchise relationship is of course a two way street and franchisors are also prone to their own seven sins. But this is another story. Greg Nathan is a psychologist, Founder of the Franchise Relationships Institute and author of Profitable Partnerships, the world’s most popular book on how to create positive franchise relationships. For more information: Website: www.franchiserelationships. com
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have your say
Mark Bollman, President and Director of Creative Colors International
Rebranding Your F
For Hyper-Growth
things up in order to attract high caliber franchisees and ultimately take CCI to the next level. Before the rebranding process began we were well established and producing a profit, but when the economy began to suffer we took a good hard look at our internal organization and realized we’d need to make serious changes to reach long-term growth. Over the next two years, between 2011 and 2013, we outlined where these adjustments needed to be made, starting with expanding our expertise by welcoming outside advisement.
“We’re always looking for ways to help our franchisees continue to evolve and become increasingly marketable to all of the diverse industries we serve.” There comes a time for every business when a change – or possibly several changes – is needed in order to avoid stagnancy and push for growth. This becomes even more pertinent for family owned businesses facing ownership transitions between generations. Franchising USA
For Creative Colors International (CCI), the ultimate in on-site repair, restoration, cleaning, protection, and dyeing of leather, vinyl, plastic and fabric, the changes started emerging in 2011 when the second generation had settled in as the new owners. Founded in 1991 as the franchise affiliate to J&J’s Creative Colors, the original industry leader in refurbishment techniques and systems, CCI was passed down from Jim and JoAnn Foster to their three children. Throughout the 30 plus years since J&J’s launched in 1980, CCI followed the same business model using the same branding and the same processes. Upon the second generation Fosters’ leadership, we knew it was time to step
Outsource When Necessary Our first step in the revamping process was hiring a franchise sales group. This group was dedicated to assisting with our franchise development strategies as means to attract a high quality pool of prospects. Beginning in the summer of 2011, we started a year-long process of narrowing down sales group options to find the right fit for us – one that upholds the same values and vision for our diverse concept and brand. Some of the main attractive traits of the group we hired are its strong reputation among fellow franchise systems, and that it only takes on a handful of clients at a time to ensure ample time and energy is allotted to each business.
Franchise We knew we didn’t have the manpower to internally push for franchise development as much as we wanted, so finding the right sales group was the smartest first step we could have taken to get the ball rolling.
Modernize Marketing Materials Now that we had our franchise development plans in order, it was important to start applying the rebranding to the logos, vans and marketing collateral. The imaging hadn’t been updated since 2000, so in order to attract the quality prospects drawn in by the sales group, the branding needed to be modernized and made sleeker. Working off the old logo’s fonts from the 1980’s and dull coloring, we renewed the CCI logo with brighter colors and newer fonts, plus conducted a website rework in early 2012. The entire process was very lengthy, working with multiple companies for nearly three months to finalize the perfect logo to match CCI’s vision. The tricky part was refining the logo without pulling away too much from the original branding. At that point, we’d spent 30 years building the brand so we didn’t want to completely start from scratch or muddy the waters for our current customers.
Take A Blended Conversion Approach With Franchisees Once we agreed on a logo, it was time to revamp the vans – our number one form of advertising in the franchise network. We wanted to come up with a half wrap and full wrap option for our franchisees to choose from; something colorful, bright and eye-catching that would be consistent and cohesive with our new logo and marketing materials. In April 2013, the van images were finalized and the conversion
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process began. We decided that any new van sold would have graphics with the new design, and for franchisees who had purchased vans prior to the switch, we implemented an incentive of co-op dollars where 50 percent of costs and installation are covered with the update. For those who have several vans, we understand it’s more costly to modernize the graphics and have taken a blended approach to the phase over.
Stretch Franchise Opportunities For Growth At this point in the rebranding process the franchise sales group was able to leverage our new logos to help CCI launch new franchise model offerings to prospective franchisees. CCI had always offered a multi-unit model for single owner operators who were looking to expand but hadn’t considered offering the multi-unit model to prospects from day one. Through restructuring the franchise models, we began offering three different models to the public: the owner operator model (single unit), the multi-unit model, and the regional development (RD) model. With the sales groups’ pool of applicants having a larger amount of capital, we’ve found that offering the multi-unit and RD models as choices can be the difference between gaining a new franchisee who wants to make a large investment, and losing out from offering a deal that’s too constricted. To further ramp up sales and growth, we applied for nationwide state registration for the first time – a nearly six month process that has allowed us to sell franchises in every state. Before registering we were able to offer franchise opportunities in approximately 25 percent of registration states; while some states don’t need
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anything more than filing a franchise agreement, others need several documents to be submitted and approved, plus major fees. CCI hadn’t wanted to invest the money in the past because we didn’t have the fresh branding and outside help to push for aggressive growth. After taking all the preceding steps we realized only offering opportunities in a portion of the U.S. was holding us back and greatly limiting our reach.
Spread Awareness Lastly, in order to effectively rebrand, we knew we needed to hire a public relations firm to help spread the word about CCI’s changes and improvements. This was the last step for getting our message out and educating consumers about our revolutionary methods and processes that are much more cost-effective and convenient than pursuing the replacement route. By bringing on a public relations firm we’re able to gain brand exposure and awareness on a national and local scale across a variety of media, including consumer, business and industry publications. Locally, our public relations firm helps us push for expansion in target markets by educating prospective business
Franchising USA
have your say
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have your say
Mark Bollman, President and Director of Creative Colors International
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“While our average growth from year to year typically ranged between five and 10 percent, over the past three years we’ve achieved a 10 to 30 percent growth rate with some markets even surpassing that.” owners about our concept and that we’re coming to town. The agency also helps CCI promote newly opened franchises by sharing their stories with local reporters and offering them for interviews to discuss their backgrounds and the need for the CCI concept in his/her market. Working with the firm is highly beneficial not only for our brand but also for reminding the franchisees that we support them and their ongoing growth.
Continue Ongoing Support For Franchisees Over the past two years we’ve made sure to never neglect our current franchisees throughout the often demanding revamp period. One of our largest focuses has been to help grow their local sales in order to result in a truly cohesive, stronger national brand and franchise system. This includes implementing new marketing programs and services within each territory, such as offering more B2B options for repairs through warranty and certification programs. We’re always looking for ways to help our franchisees continue to evolve and become increasingly marketable to all of the diverse industries we serve, including the auto, aviation, commercial and marine/RV sectors. With the franchisees onboard and the revamp in place, our goal is to become the national leader in all four markets. Since 2012 when the rebranding really
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kicked off with the website upgrade, we’ve already noticed significant changes; while our average growth from year to year typically ranged between five and 10 percent, over the past three years we’ve achieved a 10 to 30 percent growth rate with some markets even surpassing that. For fellow franchisors considering rebranding their business, the best advice I can give is to understand that it is a long, often grueling undertaking. It took CCI nearly two years from start to finish, which is about six months longer than we had anticipated. With that, I recommend franchisors outline a timetable for the renovation progression and be cautiously optimistic with your sights for growth. Each variable needs to be thoroughly reviewed and researched along the way as one decision can and will affect all the trickling decisions down the road.
About Creative Colors International Launched in 1991, the Creative Colors
International (CCI) franchise system caters to the abundance of upholstered items in every home, business and vehicle. The ultimate in on-site repair, CCI provides services such as restoration, cleaning, protection, and dyeing of leather, vinyl, plastic and fabric. CCI repairs are stronger than the original area and are nearly invisible to the naked eye. Mark Bollman has been the President and Director of Creative Colors International since May of 2000. Before becoming President, Bollman started out as a service technician for J&J’s Creative Colors in 1991. Following, he served as a Field Consultant from September of 1991 to November of 1992. From there, he was promoted to Director of Operations until January of 1995, and then further raised to Senior Vice President from 1995 to 2000. For more information: Website: www.wecanfixthat.com.
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FRANCHISE OPPORTUNITIES AVAILABLE IN NEW AREAS!
Join the:
#1 Fastest Growing Pizza Chain in the World1 #1 Fastest Growing U.S. Pizza Chain2 #1 Largest Carry-Out Pizza Chain in America #1 Best Value in America, 6 consecutive years3 1 Based on net number of stores added, 2008-2012 2 Nation’s Restaurant News, June 24,2013 3“Highest Rated Chain – “Value for the Money” based on a nationwide survey of quick service restaurant consumers conducted by Sandelman & Associates, 2007-2012. ©2013 LCE, Inc. 40891
Go to LittleCaesars.com or call 800-553-5776 to contact a Franchise Licensing Advisor. Franchising USA
ex per t advice
George Knauf, Senior Franchise Business Advisor, FranChoice
5 Steps to Choosing a Understand the Potential Owner (you) Sort the Market and Avoid Potential Fads Compare Your Model to the Top Concepts Build Your Financial Plan Complete a Full Investigation of the Top Two Choices The difference between success and failure typically begins with the quality of the questions you ask and the decisions you make.
what the franchise concept appears to be on the surface.
Picking the best franchise for you to buy
One out of every twelve businesses is a franchised business, and the total sales by those franchises are projected to reach over two trillion dollars this year. It is a very large playing field.
often comes down to following a process
that has been proven to surface differences between what you are trying to achieve
and the skills you bring to the table from
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Why is a good process important to success? There are over 3,000 franchises available in roughly 75 categories. A new franchised business is opened every eight minutes of every business day.
So here is a simplified version of a process I have used for years:
Step One: It may sound obvious but, as I advise candidates looking for franchises, we begin with the most clearly definable part of the equation for the candidates search, the candidate themselves. We construct their model; a definition of skills, strengths, likes/dislikes, goals, and how they want to approach the operation of the business. This model gives us a starting point to compare all possible matching companies to. Whether a first time owner operator candidate or the most seasoned investment fund or restaurant group CEO, everyone goes through this step. Whether you build your model yourself or with an advisor, you will want to be very open in what you allow to be put into it for consideration. You are looking for the clearest possible definition of what you bring to the table and how you want to work. In the most basic version of a model factor in your sales acumen/ interest, management style, accounting and financial experience, marketing skills, networking style, community connections, days and hours you want to work the business, full time or absentee ownership, etc. Write this all down where you can reference it. You can even format it like a checklist. If a franchise does not fit your model then it does not fit you.
Step Two: As you look at the overall franchise landscape you will see companies ranging from outstanding business systems to those that are challenged. Well before you try to pick the product or service you want to sell, identify the top operators. There is a reason they are successful. Now, by top operators I don’t necessarily
a Great Franchise mean the brands that have sold the most units. Their franchise sales acumen does not directly relate to your success. You are looking for those companies that have a strong ability to build a brand locally, a proven executive team, top tier training and support, as well as the other resources you will need to get up and running to operate the business. You can only sort for these things by taking the time to investigate companies, or relying on the advice of someone that has already done extensive company investigations and sorting. The quality of a franchise system can often be measured by the satisfaction, stability and success of the existing franchisees.
We all get excited with new concepts, especially food related brands. Remember, though, you will be signing a long term agreement so you need a concept that can operate for many years, not just the next few. There are very identifiable trends in many sectors of the restaurant business, if you are not familiar with them spend time with someone who is to see if your favorite food concept is one that falls into the fad category or not. Look for long-term performers.
“The quality of a franchise system can often be measured by the satisfaction, stability and success of the existing franchisees.” Step Four: I’m not just talking about “Can franchisees make money with this concept?” but also make sure that the projected costs make sense in general (are not under or over projected), and that your funding plan is solid given those projected costs. Depending on the concept you are looking at and where you are located you may find that you can begin working on this financial planning before you have selected a brand to buy. My preference is often to double the franchisor’s minimums (cash and net worth requirements) when planning an acquisition to make sure the franchise buyer will have comfort making the proper investment. You will want to have comfortable plan in place that will not require going back for more money if you run a little over your projections.
Step Three:
Step Five:
Once you have identified those top concepts it is time to compare your model to their top franchisees. Do you have a similar skill set, background, and work practices as their top operators? Would you feel the need to reinvent the system after buying it?
Don’t skip steps in your, or the franchisor’s, process here. It is a mutual investigation, an exchange of information where the end result may be that you are offered a franchise and then you make the call whether or not to move forward. They have a file of information they will want to convey to you, take advantage of that and any other insights they can provide.
As you compare your model to the concept you should feel comfortable that you are a fit and that, generally, the system is one that makes sense to you before you buy and may make even more sense after training and some time operating the concept.
Bring your notes and questions to calls and meetings so that you can engage them as well. Once the investigations are completed then your opportunity comes to make a sound decision.
George Knauf
Conclusion: A well done franchise investigation can be a rewarding, informative and confidence building process to go through. Follow the steps and go build your empire! Mr. Knauf is a highly sought after trusted advisor to many companies; Public, Independent and Franchised of all sizes and in many markets. His 20 plus years of experience in both startup and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution. For more information: Website: www.franchoice.com/
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Bask i n Ro bbi ns
Baskin-Robbins:
Serving Fun Franchises Serving over 300 million customers each year worldwide, BaskinRobbins doesn’t just sell ice cream; it sells fun. As the world’s largest chain of ice cream specialty shops, Baskin-Robbins offers a unique franchise opportunity backed by world-class support. Baskin-Robbins was founded in 1945 in Glendale, California by Burt Baskin and Irv Robbins, two ice cream enthusiasts who shared a passion to create an ice cream shop that would be a neighborhood gathering place for families. Pioneering the franchising model in its early days, today Baskin-Robbins is a globally franchised organization and one of the leading brands for hard scoop ice cream in the Quick Service Restaurant (QSR) industry.
Known for its branded “31,” which is still a part of the modernized logo today, Baskin-Robbins became famous for its 31 flavors, one for each day of the month. Today, the brand’s slogan of “More Flavors. More Fun.®” encompasses how the company has grown to have a flavor library featuring more than 1,000 different flavors, with even more unique and fun flavors being introduced every year. Baskin-Robbins is dedicated to making every ice cream experience an enjoyable one, where guests of all ages can indulge in their favorite flavors served any way they want. As the largest national ice cream chain offering both hard scoop and soft serve ice cream, as well as creative cones, tasty toppings, customized cakes, specialty desserts, a variety of beverages and take home treats, it’s no wonder Baskin-Robbins has become “America’s Favorite Neighborhood Ice Cream Shop.” Baskin-Robbins has more than 7,100
operating units in nearly 50 countries; the U.S. is home to nearly 2,500 of its stores. Today, the company is in the midst of a strategic national expansion and is seeking exceptional franchisee candidates to grow the brand and share its irresistible treats to communities nationwide. To become a Baskin-Robbins franchisee, the company requires liquid assets totaling at least $125,000 per restaurant and a minimum net worth of $250,000 per restaurant. Candidates must also have the ability and willingness to connect the global brand with their local community. Baskin-Robbins provides franchisees with the marketing tools needed to celebrate not just the brand, but also their own towns and cities. “Our franchisees have a passion for the ice cream business and the ability to bring the brand into their local market through customized products,” said Steve Rafferty, Senior Director of Franchising for BaskinRobbins. “Baskin-Robbins is all about selling ice cream and creating memorable occasions for our guests, so the nature of the business and our franchisees ought to be fun.” The franchise process begins with the candidate working alongside the Franchise Sales Manager assigned to the area of interest. This manager will provide orientation, assist in due diligence, and explain the ins and outs of being a BaskinRobbins franchisee. Next, the candidate will interact with other team members from various departments including operations, development, and construction. Each department is critical in the process of evaluating prospective franchisees. Approved candidates then participate in a
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fully comprehensive, four-week training program set in Burbank, California. This in-person training program covers everything from company operations and recruiting team members, to marketing programs and training staff. “When the new franchise owner returns to his or her location, they need to train their team based on what they have learned. The company has great tools in place so that new team members also benefit from great training,” Rafferty explains. Providing excellent support for new stores, corporate team members or neighboring franchisees attend grand openings to help support the launch of new shops. “We’re not shy about making a splash when we open. It reinforces the fun an ice cream shop should have. Our slogan, ‘More Flavors. More Fun.’ is the attitude and environment we want to create in each of our stores,” Rafferty continues. Along with online support, franchisees are also provided ongoing support from their area operations team and “The Navigator,” a telephone helpline dedicated to franchisees. While Baskin-Robbins is planning to increase its presence in all areas of the United States, the company’s immediate focus is on the warmer states, in particular California, Texas and Florida. Offering both single and multi-unit store development commitments, as well as opportunities to purchase existing stores
“Our franchisees have a passion for the ice cream business and the ability to bring the brand into their local market through customized products.” throughout the U.S., Baskin-Robbins allows franchisees to choose from a variety of real estate concepts including end caps, in-line sites, kiosks, gas and convenience stores, non-traditional retail environments and combo stores. Together with its sister company Dunkin’ Donuts, combo stores feature both brands under one roof and experience guest traffic throughout the day with Dunkin’ Donuts’ wide range of all-day food and beverages, and Baskin-Robbins lineup of ice cream flavors and frozen treats. There are over 1,150 combo stores currently in operation,. “Today the Baskin-Robbins and Dunkin’ Donuts brands are being managed more collaboratively. We’re not just putting two separate brands together, but developing and leveraging common ownership under the Dunkin’ Brands Group, Inc. system,” said Grant Benson, CFE, Vice President of Global Franchising and Business Development, Dunkin’ Brands. “We’re looking to deploy these combo restaurants in the right locations, with the right franchisees.”
Through combining strong unit economics and operational simplicity, Baskin-Robbins’ business model allows franchisees to enjoy convenient hours of operation, require minimal equipment, produce little waste, and benefit from a majority of inventory with a shelf life of up to one year with proper storage. Additionally, franchisees benefit from the company’s 95 percent brand awareness and multi-million dollar national advertising program that includes integrated online and social media programs and public relations support. With branding everywhere, even in markets without stores, the company continues to explore opportunities to increase brand awareness. “With more than 65 years of experience in the business, an extensive flavor library, the heritage, legacy, marketing power and expertise that stands behind franchisees; all of this drives the business and are great reasons to sign up with a global brand versus opening an independent ice cream shop,” Rafferty says. Recently launching a fresh new store design, Baskin-Robbins is putting its focus
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“We’re not shy about making a splash when we open. It reinforces the fun an ice cream shop should have. Our slogan, ‘More Flavors. More Fun.’ is the attitude and environment we want to create in each of our stores.” and become an integral part of their local community.”
on ice cream front and center, combining fun, modern visual elements with the brand’s rich history of product innovation. Over the course of the next two and a half years, over 300 new and remodeled franchise locations are expected to debut the new U.S. store design, which feature new menu boards with LCD screens, bright and bold heritage walls, eyecatching “super graphic” artwork, pink spoon accents such as door handles, and an updated brand logo. Keeping with original hometown philosophies and innovative thinking, executives at Baskin-Robbins continue to focus on franchisee profitability as a main driver of new products and platforms. The company reported total global franchiseereported sales for year-end 2012 of $1.9 billion. Baskin-Robbins’ marketing programs are broken down into three focus areas: transaction drivers, ticket drivers, and promotions. With ample opportunity in the store layout, the company’s strategic placement and design helps push impulse purchases and engage customers in the Baskin-Robbins traditions. Creating “a pink spoon sampling culture,” customers are always offered a sample, making the experience fun and memorable. “Our ‘pink spoon culture’ is what keeps our guests coming back since they love to try new flavors. They look forward to a sample of the Flavor of the Month on a Baskin-Robbins pink spoon;
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it’s what makes us different from the rest,” Rafferty says. Speaking to the customized cakes on display, these high margin products are not just fun for customers, but also make a great return for franchisees. “Our ice cream cakes business is an important factor in the shop layout and design. These ticket drivers help increase profitability for our franchisees,” Rafferty continues. “While cups and cones of ice cream are the core of our business, if we can visually remind our guests of an upcoming occasion to buy an ice cream cake as well, that’s even better.” Selling more than 13 million ice cream cakes in its shops worldwide in 2012, Baskin-Robbins was named the top ice cream and frozen dessert franchise in the U.S. by Entrepreneur Magazine’s 33rd annual Franchise 500® ranking. The Baskin-Robbins concept is unique in that it’s very seldom to find a brand that is iconic, proven, has the legacy and history, and is still offering opportunity and room to grow. “Most well-known big brands are a good investment, but you can’t buy a franchise because they are done expanding, the growth potential doesn’t exist. On the other hand, newer brands with the room to grow don’t have the proven security of being around in years to come,” Benson explains. “With BaskinRobbins, new candidates can get their piece of the brand in their local market
Dedicated to its franchisees, BaskinRobbins has very few company-owned stores. “We don’t compete with franchisees for the real estate, employees, or markets. We pour our efforts, innovation and commitment into making things better for them,” Benson says. “Each and every day, we work on how we can make our franchisees more successful. The fact that we’re not competing with franchisee-owned stores shows our intentions are clear, and our focus is solely on our franchisees.” Baskin-Robbins will be launching its 2014 incentives for franchise development in January. Focusing on new franchisees coming into the system, the company is seeking candidates with experience in the restaurant industry who have a passion for the Baskin-Robbins brand. Interested candidates can become informed of franchise opportunities on the BaskinRobbins website, through participating in seminars, or online webinars. Baskin-Robbins creates a fun business opportunity for franchisees to jump into for a reasonable investment and is backed by the great support of a world-class franchisor that’s been in the business for a long time. “The brand equity in the Baskin-Robbins name and support behind its operations, development, and marketing offer a lot of power in the brand, and franchisees have the opportunity to tap into it,” Rafferty says. “The fun of the brand supported by the many years of experience the franchisor brings to the table is a compelling reason to become a Baskin-Robbins franchisee.” For more information: Website: www.baskinrobbinsfranchising. com
DECEMBER 2013
Veterans in Franchising www.franchisingusamagazine.com
tips for
starting
a franchise
Lobbying
for Business Benefits
Operation
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MAKE YOUR NEXT CAREER MOVE . . . A BUSINESS OF YOUR OWN!
Maybe it's time to take control of your future. One way to accomplish that goal is to own a franchise. Let us help you – we provide a “Free” franchise matching service for Veterans.
To get started, visit our website: VeteranFranchiseCenters.com
No Cost – No Obliga�on
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V eterans in F ranchisin g S upplement DECEMBER 2013 Our Veterans in Franchising special supplement has become a regular feature of Franchising USA. To share your story in the JANUARY issue, please contact Jenn Dean, Business Development Manager Phone: 250-590-7116 Email: jenn@cgbpublishing.com
Contents 66 Veteran’s News 68 Tips For Veterans Starting a Franchise Chris Cancialosi, gothamCulture 70 Why Military Veterans Make Successful Franchisees Tim Courtney, CruiseOne
72 Veterans Business Services Gets “Front and Center” with President Bush Veterans Business Centers 73 Rowena Snead: Profile Kevin Blanchard, VetFran
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V etera ns i n Fra nch isi ng
what’s new! This Veteran’s Day CruiseOne® Announced Five Winners of “Operation Vetrepreneur: Become Your Own General” Contest Winners received free franchise and attended training featuring government officials This Veteran’s Day, CruiseOne®, the nation’s largest home-based and military-friendly franchise travel agent network as part of World Travel Holdings, announced the five winners of its second annual nationwide contest “Operation Vetrepreneur: Become Your Own General.” The winners received a free travel franchise valued at $12,700. The annual contest was open to former members of any of the five branches of the U.S. military (Army, Air Force, Navy, Marine Corps and Coast Guard) who are retired, off active duty and/or honorably discharged prior to the contest start date this past Memorial Day. Candidates participated in a rigorous three-part application process which included creating a business plan and phone interviews. More than 300 applicants from 40 different states submitted applications for “Operation Vetrepreneur.” This year’s winners included Doug Robinson of Hattiesburg, Miss.; Frank Griffith of Lorain, Ohio; Grant Springer of Edgewater, Md.; Tara Fuentes of Canton, Ga.; and Ted Coates of Baltimore. “Military veterans are vital to our country’s success, both socially and economically,” said Tim Courtney, Vice President of Network Development at CruiseOne. “More than one million veterans will be transitioning out of the armed forces in the next two years and franchising provides them with the perfect opportunity to demonstrate their leadership and military skills in a civilian workplace.” The winners are attending a weeklong
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Operation Vetrepreneur: Operation Vetrepreneur winners Frank Griffith, Grant Springer, Ted Coates, Tara Fuentes and Doug Robinson. Photo Credit: Robert Auclair
November Training Class: The Operation Vetrepreneur winners (in blue) with other new CruiseOne franchise owners at a weeklong training seminar at CruiseOne’s world headquarters in Fort Lauderdale.
training at CruiseOne’s world headquarters in Fort Lauderdale and were honored with a special ceremony featuring city and state officials. A member of the International Franchise Association’s (IFA) VetFran initiative, CruiseOne proudly supports military veterans and is consistently recognized by leading industry publications as a militaryfriendly franchise. With military veterans accounting for more than 15 percent of its franchise owners, the company’s accolades include a number one ranking by Forbes in
its “Top 10 Military Friendly Franchise” and inclusion on the “Top 100 Vet-Friendly Franchise” lists by Franchise Business Review and 1851, in addition to being named a “Top Franchise for Veterans” by Opportunity World. For the past four years, CruiseOne was named to G.I. Jobs magazine’s Military Friendly Franchises® lists, which represents the top 10 percent of the nation’s franchises that are doing the most to support military veterans. For more information: Website: www.CruiseOneFranchise.com.
Vets Find Brand Appeal According to data from the International Franchise Association, one in every seven franchises is owned by a veteran. The quick-serve industry is home to a good portion of those former military personnel, and a recent survey by the Franchise Business Review sheds light on which brands do the most for veterans. The restaurant industry ranked as the second most popular choice for veterans in the Review’s annual Veterans & Franchising report. “Food, I think, more than any other industry in franchising, is obviously very specific to operations and being a good operator,” says Eric Stites, CEO of the Franchise Business Review. “I think those same skills are very common among veteran franchisees.” Of the restaurant brands within the top 25 best brands, quick serves like Kona Ice, Auntie Anne’s, and Firehouse Subs outshined full-service brands. “Those companies have great satisfaction with all their franchisees, not just their veteran franchisees,” Stites says.
To measure franchisee satisfaction, the Franchise Business Review’s survey asks respondents to rate the training and support, the operational procedures, innovation, senior management, community, financial opportunity, and more. Stites says that, of all those considerations, community may play the biggest role.
“Veterans are very operationally focused and used to following a plan, but I also
think culture is a huge component of that as well,” he says.
For more information:
Website: www.franchisebusinessreview.
com/content/Top-Franchises-for-Veterans2012
Advocates Lobby for Improved Business Benefits U.S. Rep. Bill Flores took a seat for a veterans’ affairs subcommittee hearing on economic opportunities for veterans at Baylor University. Speakers lobbied for improved educational and business benefits for veterans wishing to become entrepreneurs or enroll in college. Business leaders and college officials advocated for Congress to boost financial support available to veterans who are pursuing higher education and entrepreneurship in a recent Veterans Affairs subcommittee hearing led by Rep. Bill Flores. The hearing focused on improving economic opportunities for veterans. Panel members who testified included representatives from The Dwyer Group, Texas Veterans Commission,
Texas Workforce Commission, Baylor, McLennan Community College and Texas State Technical College. Several of the ideas proposed were aimed at making it easier for veterans to become business owners. Mary Kennedy Thompson, president of Mr. Rooter Plumbing and Vice President of International Relations for The Dwyer Group, suggested a 50 percent tax credit on franchise fees, capped at $25,000, to help veterans wanting to start a franchise business. Army veteran Joseph Kopser lobbied for Congress to create a grant program that would give veterans $1,000 in matching funds for every year of service as seed money to help start their own businesses.
Kopser retired from the Army this year after 20 years of service and started transportation mobile app RideScout, but said he called on military friends to raise the capital to fund the venture. “We have served for five or 10 or 20 years, serving and protecting the American dream of free enterprise. Now it’s our turn to participate in the system,” Kopser said Flores, a Bryan Republican, chairs the House Veterans Affairs subcommittee on economic opportunity. He said he hopes to incorporate some of the perspectives in crafting legislation that could lower veteran unemployment and boost the economic opportunities and impact service members can have after leaving the military.
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Chris Cancialosi, Ph.D, Managing Partner and Founder at gothamCulture
T ips for V eterans
Starting a Franchise When I deployed to Iraq in 2003, I was aware of how ambiguous a situation I was heading into. The Army had obviously prepared and trained me well, but what you find when you actually hit the ground in a combat zone is anyone’s guess and things can change from moment to moment. When I returned home in 2005, the confidence and skills I developed while overseas led me to quit the corporate job I had before I left and to strike out as an entrepreneur. While many veterans,
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particularly those who have been in the service for a long time, might be unsure of what civilian life holds for them, they should rest assured that their military training is ideal preparation for the business world. Entrepreneurship specifically requires courage under fire and the ability to forge head-on into the breach. Below are some thoughts and suggestions, drawn from my experiences, which veterans might consider when deciding how to tackle building their business or franchise after they transition into the civilian world:
There’s No Such Thing as a Nontransferable Skill I often hear veterans say, I know I’ve gained invaluable experience and skills in the military, but I’m not exactly sure how that fits into a civilian business context. The beauty of building your own business is that you can make it whatever you want, and you don’t really have to know at the
onset how your skills directly relate. My advice is to dream big – take what you believe is important to contribute to the world and how you plan to make that contribution on your own terms, and know that whatever challenge comes your way you’ve already been trained for it. When my business partner and I first started out, our resources were so limited we held meetings in coffee shops and basically were the end-all-be-all of our business. We rolled up our sleeves and did everything from finding our first clients, to developing internal processes for billing, to navigating a competitive market, to taking out the trash. I learned how to do some of these things in school and in the business world, but I learned how to do them well in the military as well. That is where veterans have a huge advantage over most potential competitors. We aren’t afraid to take care of business and we aren’t above the dirty jobs.
“Regardless of the path you chart to entrepreneurship, don’t let a fear of the unknown stop you from making the leap.” Remember Your Packing Protocol A member of my team recently told me a funny story. She and a friend, an Army Captain, were headed into an office building. To gain entry they needed their respective electronic key cards to pass through security. As she scrambled in her bag for nearly five minutes to locate hers, the Army Captain was well on his way into the office. He later commented that it was strange she didn’t have a system for where she keeps her important items. That is true army training – being so well prepared that you know where to find the resources you need at any moment. It’s a trivial example – knowing where your key is – but it can apply to starting your business. If you don’t identify possible flaws in your business model, your customers or, what’s worse, your competitors will point them out to you. Knowing where your available resources are and how to access them at the right moment is a crucial part of starting your own business.
Your Colleagues Are Like Your Military Family In the armed forces, we have a deep understanding that all we do is in service of others and that is of particular value to us. Not only do we serve the citizens of the United States, but the unit and the people next to us in the foxhole. This spirit of service and humility in leadership translates well to leading in business, so apply it as you staff up your new venture. Remember that a leader is not a leader without followers; so don’t undervalue your team. At gothamCulture, we’ve created a culture where trust is at the core of all we do, much the same way it was with my unit in Iraq. My employees trust me, and I trust them; every new employee
comes into an environment where he is valued and trusted from day one. Be sure not to selfishly use your team to accomplish your own goals. You won’t last long as an entrepreneur.
Make Your Standards Mirror Those You Lived By in the Military The military sets explicit, nonnegotiable standards. In the extreme, the expectation is that you accomplish your mission, no matter what. There is no “almost.” You commit to your goals and have to be a perfectionist in your execution. Maniacal pursuit of excellence is one of the core values at our company, and it has made us highly effective and competitive. Any moment we don’t uphold our standards is an opportunity for competitors to get a step closer. Everyone in the company knows this and plays their part. This is where considering a franchise may come into play. Franchises have mastered the systems and processes to deliver a consistently, high-quality experience to their customers. There are clear standards to follow and the recipe to success is well defined. These types of opportunities really beg for veteran entrepreneurs to dive right in and execute.
Your Team’s Makeup is Even More Important Than It Was In the Service In the military, you counted on people to perform in their various roles and responsibilities for the group to be effective. In the civilian world, many leaders can get too caught up in being liked rather than respected, but this is no way to lead. Use what you learned in uniform and be decisive in order to build effective teams. The success of your business depends on finding the right
Chris Cancialosi
people to help you and work for you. It may not be pleasant, absent strict military protocol, to identify underperformers and consider letting them go, but it’s crucial to success. Like in the military, you should always try work with underperformers to help improve their performance. But in the end, you have to call on your courage to let them go if they are unable or unwilling to deliver on the mission. Many leaders take too long to make these critical decisions, leading to lagging performance, increased threat from competitors, declined engagement and increased resentment the members of your team who are helping you really drive the business. Regardless of the path you chart to entrepreneurship, don’t let a fear of the unknown stop you from making the leap. There are many great support services out there for veterans who seek to make their mark as entrepreneurs in the civilian world and your skills and experience are unmatched. Our country needs you to continue your service and put your skills and experience to work. Chris Cancialosi, Ph.D, is managing partner and founder at gothamCulture. The team at gothamCulture focuses on identifying the underlying causes of organizational obstacles and assisting leaders in developing and executing breakthrough strategies to elevate performance. For more information: Website: www.gothamculture.com
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Tim Courtney, Vice President of Franchise Development at CruiseOneÂŽ
Why M Veteran Successful Fran Franchising is a popular career choice for military veterans because historically they have been very successful in this career path. Since 2011, more than 150,000 veterans, spouses and wounded warriors have
started careers in franchising according
to the International Franchise Association (IFA), and there are more than 5,000
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new veteran franchise business owners. What’s more, a recent study by the IFA’s Educational Foundation found that one out of every seven franchise opportunities is owned and operated by military veterans.
owned businesses, and have owned their businesses for more than five to 10 years. The secret to this success is that military skills translate well with operating a franchise, regardless of the industry.
Job creation, sales numbers and stability all indicate that military veterans are among the most successful business owners, especially when it comes to franchising. Recent studies conducted for the IFA demonstrate that military veterans in franchising are more inclined to recruit other veterans, earn five times as many gross receipts as veteran-
Leadership Veterans learn the true meaning of teamwork and what it takes to be a strong leader during their time in the military. They learn how to make difficult decisions in tough situations, delegate tasks and act in a support role, when needed. Being a leader is not always making the easy decision, but making the right one.
“The secret to this success is that military skills translate well with operating a franchise, regardless of the industry.”
Military ns Make nchisees Operations Military veterans are used to following procedures with precision. Franchises operate very systematically with set procedures in place to ensure consistency across the board. When dealing with a franchise, you know what to expect regardless of location and owner. That is because of the processes and guidelines set in place by the franchisor.
Training In the military, veterans learn very specific skills to perform certain tasks
and the learning process never stops. The training system provided by franchise organizations makes it possible for military veterans who have no previous industry experience to perform well. Military veterans are successful because they are used to learning new skills and implementing them in a timely, efficient and productive manner.
Chamber of Commerce and others.
Support
With more than one million military
Military and franchising organizations have a familial support system. Whether on the battlefield or in your franchise system, you are never alone. Franchising provides owners with a support system of other owners from whom to ask advice, as well as a corporate office providing back-end support, leadership and training. There is a popular adage when it comes to franchising that states “you are in business for yourself, not by yourself.”
Tim Courtney
veterans transitioning out of the military
by 2015, franchising provides them with an opportunity to support the U.S. economy and apply their military skills in the
civilian workplace. More than 15 percent of our franchise network is comprised of
military veterans and they are among our
most dedicated, persevering and successful owners. If you have not already doing so, I recommend joining VetFran and begin
actively recruiting military veterans to join
There are more than 4,000 different franchising opportunities in multiple industries, and the most popular for military veterans include automotive, general services, food, residential/home services and business. At CruiseOne®, one of the nation’s leading home-based travel franchises as part of World Travel Holdings, our military veteran franchise owners make up 17 percent of our network. They have often traveled the world and are successful because of their first-hand knowledge of foreign countries and interacting with different cultures.
your franchise. As you can see, military
The IFA’s VetFran initiative also provides resources for military veterans to ensure their success in franchising such as financial incentives, training and mentor programs. More than 580 companies participate in this recruitment program, which has partnerships with the White House Joining Forces Initiative, VFW, the U.S. Department of Veterans Affairs, the Small Business Administration, the U.S.
major cruise line and many tour
veterans are successful franchisees and a valuable asset to your network.
A resident of Boca Raton, FL, Tim Courtney is Vice President of Franchise Development at CruiseOne®, the nation’s leading home-based travel agent franchise. As part of World Travel Holdings, one of the nation’s top travel retail networks, CruiseOne offers consumers the lowest possible pricing on cruise and land vacations through its relationships with every operators. In operation since 1992, CruiseOne is a member of VetFran and proudly supports military veterans. It is consistently recognized by leading industry publications as a militaryfriendly franchise. For more information: Website: www.CruiseOneFranchise.com
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V etera ns i n Fra nch isi ng
V etera ns Busi n ess Services
Veterans Business Services
Gets “ F ront & C enter ” W ith P resident B ush Veterans Business Services (VBS), a social enterprise for Veterans in Franchising, is a unique Veteran Service Disabled franchise consulting firm. A graduate company of the Entrepreneurial Bootcamp for Veterans with Disabilities (EBV) at Purdue University, VBS had the good fortune to get to meet President Bush at the new George W Bush Presidential Institute. President Bush, always a strong Veteran supporter, made a surprise visit to honor EBV companies participating in the recent EBV national conference in Dallas. The Founder of VBS, Jim Mingey, is one
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of only a few Vietnam Veterans admitted to the EBV program. He was accepted in EBV in part because his business plan not only provides great service and value to veterans seeking to enter the franchise industry, but also funds a social enterprise mission which promotes opportunities for service disabled veterans and their families.
VBS is now featured on the Veterans Administration Entrepreneurial Portal. VBS’s “Franchise Accelerator”™ tool was developed in part with funds provided by the VA. This new VBS tool has provided a national platform for service disabled Veterans who want to enter many aspects of the Franchise Industry, including single and multiple unit
ownership, franchise concept development or a custom developed, hands on franchise industry educational experience. For more information: Website: www.veteransbusinessservices. us/
Rowena Snead
Profile
“Deciding to take a chance, she borrowed her mother’s car, scraped together the startup costs, and began operating her Coverall franchise in January 2009.” one more tour required for advancement, her last duty station assignment would be overseas in Okinawa. When faced with the fact she would have to wait several years for base housing to bring her young daughter along, she decided to forego her advancement and walk away from the stability she had all those years.
Rowena Snead spent 18 years in the Navy as a career counselor and “cryptologic technician” before using the VetFran discount to start her Coverall Health-Based Cleaning System franchise business. During Snead’s time in the Navy, she was married, had a daughter, served several tours overseas and got divorced. With just
From here Snead went on to have a successful career as a facilities and construction manager in California. Then, in 2008, on a trip home to Kalamazoo, it became clear that her elderly mother needed daily assistance. Despite Snead’s comfortable life and great job, she again decided to “walk away” to go home and play the caregiver role for her family. Suddenly Snead, who had always been employed and possessed an “awesome resume” (she knew this after years as a career counselor), couldn’t find work. The construction industry was decimated by the economic downturn and she found herself, at 48-years-old, living at home with her mother – with no money or even a car.
Familiar with Coverall Health-Based Cleaning System, a national commercial cleaning franchise, Snead soon learned of a local Coverall office. Deciding to take a chance, she borrowed her mother’s car, scraped together the startup costs, and began operating her Coverall franchise in January 2009. While the Coverall system provided training, business leads, and back office support which allowed Snead to focus on serving her customer, Snead’s personal experience as a customer of cleaning businesses helped her understand what was expected from her franchise. Today, Snead has 13 employees and provides commercial cleaning for 22 customers, ranging from the manufacturing to medical industries. While she still serves clients herself, what she loves most is mentoring and coaching her employees. Snead’s spirit, enthusiasm, and optimism continues to be a great inspiration for others veterans! For more information: Website: www.coverall.com Email: kblanchard@franchise.org
Kevin Blanchard Kevin Blanchard served in Marines as a Combat Engineer, deployed to Iraq in 2005. On June 30, 2005, a roadside bomb in northwest Iraq hit him. This resulted in a left leg amputation, and 13 months in Walter Reed hospital. Since then, Blanchard has studied International
Business at the George Washington University, and an MBA at Catholic University. Today he works for the International Franchise Association’s VetFran Program. He is a strong supporter Veterans starting their own small business in the franchise industry.
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ex per t advice
Scott Hausmann, Director of Marketing, Francorp
Understanding Franchise Ma For Prospective Franchisees “Prospective franchisees should ask what a franchisor has in the way of marketing for a grand opening, a single unit, and markets with multiple units.”
Scott Hausmann
Developing a marketing plan for obtaining customers is very different than the composition of a marketing plan to obtain franchise buyers. The successful companies are those who learn the difference. What Franchisees Need To Look For When Selecting A Franchise Today’s franchise marketing and sales efforts require an all out blitz of combined and coordinated elements including a formalized franchise marketing plan and a budget. This budget must then be broken down into all the various categories: print ads, radio and TV commercials, social
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media, trade shows, website enhancement, direct mail, Internet campaigns, PR, publicity, and in-store promotional. But these are marketing initiatives aimed at selling franchises. For the prospective buyer of a franchise, the question is: “What is the franchisor doing to help me get customers? What marketing plans are in place for me to utilize?” Some companies make the mistake of running franchise sales and marketing campaigns that feature the products. Their brochures and franchise sale materials show big graphics of the products or are an ego trip presentation of the founder. Franchisors need to remember that they are selling a franchise! A business opportunity! Not a pizza! The company needs to show a restaurant or a place of business full of people, customers, not just a photograph of a beautiful restaurant with no one in it. They need to talk about the program they are offering a franchisee and how they plan on assisting with initial training, site selection, buildout, demographic analysis, marketing, advertising, ongoing support, and so on. They often do a great job of showing the product as part of the business opportunity available to a franchisee, but a prospective franchise buyer needs to ask to see the marketing materials and programs in place
to assist a new franchise getting started, particularly in a new market where the brand may be unknown. While a franchisors needs to carefully screen franchise applicants to qualify them in terms of their potential to effectively operate the business, a prospective franchisee should also carefully screen the franchisor and ask the hard and specific questions of exactly what unit level marketing and advertising materials and support are available.
Now You’re A Franchisee, What’s Next? Let’s start at the beginning. An individual has come across a newly franchised restaurant with interest of becoming a franchisee. The franchisor has been in business for several years. The owners don’t even have to advertise anymore because guests are lined up. Marketing? What marketing? All the franchisor needs to do is keep doing a great job and customers will come back again and again and tell their friends who will do the same. But now it’s time to open the new franchisee’s restaurant in another city where no one knows the concept. In today’s economy and highly competitive marketplace, a new franchisee can’t survive for years while they build up their
arketing s business the way the franchisor did when they first started. What do you do as the
franchisee to bring in new customers? As a prospective franchisee it is important to be aware of what the franchisor will provide in marketing efforts to jumpstart the
heartbeat of your new franchisee’s unit.
Back to Basics Most of today’s successful businesses
started at a time when there was no iPad, iPhone, social media, Twitter, Google or Facebook. In fact, it’s more likely that a young franchise buyer will know more
about these areas of marketing than the
franchisor. As a franchisee, you need to evaluate how the franchisor is willing
to, or plans to, cross the communications gap into the new basics; the world of
the social media and the utilization of more contemporary tools. Not only is it imperative for a franchisor to know and utilize these tools to help a new
franchisee get their business booming in a new market, but a prospective franchisee needs to view the importance of this
arsenal of weaponry as a great selling
tool that communicates a cutting edge
contemporary company in touch with the times when buying a franchise.
Today’s franchisors must have three basic marketing plans their franchisees can implement:
1
A Grand Opening Marketing Plan
Typically, after a soft opening, and once the business is ready to handle a full scale barrage of customers, a major campaign is engaged in to introduce the new business into the community.
2
A Marketing Plan For a Single Unit in a New Market
When there is only one unit in a market and that unit must bear the entire cost of marketing, low cost and creative means need to be provided for the franchisee’s implementation.
3
A Marketing Plan For a Market With Multiple Units
This is the level at which ad agencies and professionals are employed to place advertising in the media, as well as direct the ongoing social media, pay per click, and multimedia vehicles. At this point, Cooperative Advertising
budgets incorporating contributions from franchisees are developed. Issues such as “market share” become measuring sticks for the efficacy of the marketing and advertising initiatives.
The Bottom Line Prospective franchisees should ask what a franchisor has in the way of marketing for a grand opening, a single unit, and markets with multiple units. Franchisees must also be comfortable and have confidence that they will be well equipped to implement these programs effectively to build the sales and profits for which they bargained. 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: Website: www.francorp.com/
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ex per t advice
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editor news
Discovery of New Succ Model in Australia Franchising USA Magazine has discovered a concept experiencing enormous franchise growth in Australia. Thus far we have not seen a similar franchise model in any other country, but we believe it is only a matter of time before that occurs.
Franchising USA Magazine recently sat down with Max Collins, the founder of Social Media Business Boosters, to discuss his concept and why he feels it is a model whose time has arrived. Collins has created a winning formula not only for how to service clients, but also for transferring the concept to franchisees and their teams. Considering its growth from one single unit business to 26 franchises in Australia in the past two years, and the fact that Australia’s entire population is about the same as the state of New York, just imagine the possibilities in other countries!
“It’s thrilling to think how far my team and I have come in less than two short years. Today we are the ‘go to’ social marketer simply because we offer organization, structure, national representation and well-proven results,” Collins says. Only a few short years ago businesses and social media were not known to co-exist, yet Collins found success in sticking to his belief that he could grow a service which could, and has, helped a lot of businesses thrive. Providing valuable and much sought after services to local business owners who need an online “boost” for their business, the team at Social Media Business Boosters is committed to engaging customers and changing the position of a business’ influence through the use of cutting-edge digital technologies. So what makes Social Media Business Boosters different from the thousands of other social media companies in this industry? They are the first company to create a national brand in an industry that is presently populated by independent operators. There is no nationally recognized brand for Social Media Consulting. That is what makes this sector ripe for franchising and Max Collins has apparently seen that before anyone else has.
Beyond Australia! We asked Collins if he had plans to expand beyond Australia. “I absolutely intend to expand our model in key markets throughout the world,” says Collins,
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cessful Franchise
“In order to duplicate our success we must partner with qualified groups and individuals who can then implement our proven model in their respective country.” Collins went on to say that he has retained the services of Steve Ruttenberg of Global Biz Partners to assist him in determining markets and qualified groups to align with. The support a franchise business model brings with it to both franchisees and customers is unparallel to that of an independent company. Not only do franchisees have a familiar brand name, backing support team, and operations manual to push their success, but customers too are generally more comfortable in knowing that they are purchasing services from an established, reputable company. In addition to the brand recognition, marketing, and advertising provided to franchisees, Social
“Studies show that more than 75 percent of businesses plan to increase their Social Media investment and 73 percent have not yet established any social media platforms.” Media Business Boosters also provides lead generation and website programs to ensure business start-up success, an ongoing training program, proprietary customer relationship management software, and a dedicated support staff. Presenting a great opportunity for someone looking to get into a business that is a low entry cost in an up and coming industry, Social Media Business Boosters is taking full advantage of today’s digitally driven world. With social media exploding over the last 10 years, anyone who is online is aware of the necessity and value in using social media platforms to generate exposure. In fact, studies show that more
than 75 percent of businesses plan to increase their Social Media investment and 73 percent have not yet established any social media platforms. The market is overflowing in opportunity to service businesses social media and now is the time for action! Dedicated to covering every platform from Facebook and Twitter, to SEOs, pay-per-click management, blogs, and forums, Social Media Business Boosters recognizes that in the ever-critical online marketing space it is content that changes a user experience. Social Media Business Boosters is ready to bring it all to their clients, and with a new social media
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editor news
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editor news
Social Media: A Recession Resistant Industry
“Looking at the success of Social Media Business Boosters in Australia, it is mindblowing to realize that North America has not yet implemented a national social media management brand.” outlets popping up every few months, it’s needless to say the industry is showing no signs of slowing down. If you’re reading this and thinking, “This all sounds great, but how do franchisees earn a living running other businesses’ online resources, especially as a franchisee for a bigger company,” here is the short explanation. Social Media Business Boosters franchisees derive income from several different customizable services offered through the brand. These paid for services include; a digital healthy check, establishing a social presence, providing ongoing maintenance, and specializing in customized marketing. The icing on the cake is all these services can be performed from the comfort of your very own home. We asked Collins to define for us the type of individuals he looks for when awarding his opportunity. His response, “two types of individuals are needed to fill vital roles within the company.” One is Area Developers to own and
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operate large territories. This individual must be a seasoned entrepreneur with excellent sales skills, management skills and people skills. Approved candidates will be involved in the social media space and responsible for awarding the opportunity to other individuals to be franchisees. They must be able to interview prospective candidates, qualify them, and provide the required training and support. The company would also look for those interested in acquiring a franchise. These individuals must have honed people skills, a passion for public relations, a love for everything social media, and interest in data management and driving online traffic. “Every new franchisee allows us to extend the model and services we provide for social media management, social marketing, social customer service, social training and selling,” Collins says. “It will also allow us to significantly expand, while continuing to innovate the services our clients use and trust.”
Today social media and an online presence are necessary for customer engagement and growing an audience. While it’s true to say that business owners could commit to providing their own online exposure, the truth is this: most don’t have time, or don’t know how to do so effectively. Sure the local pizza shop owner could benefit from managing his online Yelp, reputation or promoting specials via Instagram, but he’s busy making pizzas! By hiring a team of training professionals to operate their online presence business owners have more time to take care of the day-to-day operations of their brand, and benefit from knowing they are working with a cutting edge company that incorporates new technology in the online marketing field, incorporates best practice in all cases, and sets new benchmarks and raises the bar for others to follow. In the extremely transparent economy we are living in it is very important for businesses to keep on top of their brands reputation to generate growth and customer engagement, and therefore social media is key in doing so. Looking at the success of Social Media Business Boosters in Australia, it is mind-blowing to realize that North America has not yet implemented a national social media management brand. If this business is booming in a country whose population is almost 14 times smaller than that of the United States, then why hasn’t anyone clued in and realized the potential at hand? It will be interesting to see how this comes together, I believe with the passion and dedication both Collins and Ruttenberg have you can expect to see great things… watch this space. Jessica Spoto Editor, Franchising USA Magazine For more information: Website: www. socialmediabusinessboosters.co/ Contact: StevenRuttenberg@gmail.com 360-387-1101
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International News! Project Pie Taking Fast-Casual Pizza International with Agreement in Philippines Owners of 800 Dunkin’ Donuts Planning Three Stores for 2013, 25 Total over Next Three Years. Project Pie, known for “everyday artisan pizza custom built by you” that cooks in less than two minutes, signed an official
agreement with master franchise partner DBE Project, Inc. to open 25 restaurants
in the Philippines over the next three years. The first three locations are slated to open in 2013, all within the Metro Manila region.
growth that we know will do well here in
Project Pie is the brainchild of fastcasual pizza pioneer James Markham, who founded the company in 2012 after creating and launching MOD Pizza in Seattle and Pie-ology in Fullerton, CA. Currently with two locations, Project Pie has several domestic locations slated for 2013 in Los Angeles County, Boulder, Colo. and Manhattan.
and is chaired by Leopoldo Prieto, Jr. and
“When looking for a new concept to franchise, we wanted something fresh and inspiring,” said DBE Project COO and EVP Vicente Gregorio. “Project Pie is the type of brand in a segment poised for fast
the Philippines.”
DBE Project is a subsidiary of
International Family Food Services, Inc., headed by Gregorio.
“DBE Project is the ideal franchise partner for our growth in the Philippines,” said
Markham. “With knowledge of the pizza industry from International Family Food Services and guidance from the Prieto
family, they know more about franchising retail food brands in the Philippines than anyone.”
For more information: Website: www.projectpie.com/franchise.
Doc Popcorn Awards First International Franchise in Mexico partner José Antonio Cazares Aguirre, who have signed a master franchise agreement with Doc Popcorn. The first Doc Popcorn location is expected to open in 2014 in Monterrey, the capital city of the northeastern state of Nuevo León and the third-largest metropolitan area in Mexico. “We are eager and excited to be the first to introduce this leading American snack brand to Mexico,” said René Garza Peña. “With the growing concern of the high obesity rate in Mexico today, we are proud to offer a delicious snack that is made with highquality, natural ingredients and is low in fat, has no cholesterol, and zero grams of trans fat.”
Big Appetite for Fresh-Popped, Natural Flavored Popcorn
“Mexico is the largest U.S. popcorn export market and the best place for our first international master franchise,” said Rob Israel, co-founder and “Big Pop” of Doc Popcorn.
signing of a 60-unit agreement in Mexico.
Since launching the franchise in 2009, Doc Popcorn has opened more than 80 locations in 25 states. Doc Popcorn has been recognized as one of the fastest-growing snack franchises in the United States and has secured its position as the largest popcorn retailer in the world.
The international development will be led by franchise partners
For more information:
Franchise Leads to 60-Unit Development Agreement. Doc Popcorn, the only fresh-popped, natural flavored popcorn franchise, announced their first expansion abroad through the
René Garza Peña, his wife Mariana Mendoza Garza and operating
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Website: www.docpopcorn.com
Home Instead Senior Care Recognized As a Global Growth Company World Economic Forum Recognizes Home Instead Senior Care as a Dynamic High-Growth Company. Founded in 1994 by Lori and Paul Hogan, Home Instead Senior Care has grown into the largest senior care business in the world. In 19 years, it has provided millions of hours of senior services annually through a network of over 1,000 franchise offices throughout the United States, Canada, Japan, Portugal, Australia, New Zealand, Ireland, the United Kingdom, Taiwan, Switzerland, Germany, South Korea, Finland, Austria, Puerto Rico, Italy, the Netherlands and Mexico. Worldwide, Home Instead franchise offices utilize the services of more than
75,000 CAREGiversSM who work in the homes of seniors providing services which enable seniors to live safely and comfortably in their own homes for as long as possible. Paul Hogan, a founding board member of The Home Instead Senior Care Foundation and the National Private Duty Association, is also a founding member of the Nebraska chapter of the Young Entrepreneur Organization. In 2000, he was the Nebraska Center for Entrepreneurship’s Entrepreneur of the Year, and in recognition of his contribution to franchising, in 2006 the International Franchise Association named him Entrepreneur of the Year. Home Instead Senior Care has also been
Moe’s Southwest Grill Signs Master Franchise Deal in Guatemala and El Salvador
recognized by the World Economic Forum as a Global Growth Company. This distinction is given to “dynamic high-growth companies with the potential to be tomorrow’s industry leaders and to become a driving force of economic and social change.” For more information: Website: www.homeinstead.com/ international/pages/home-insteadinternational-business-opportunities.aspx
First of 10 Restaurants to Open in Guatemala City Next Year. Moe’s Southwest Grill®, the fast-growing restaurant franchise best known for its flavorful southwest fare and distinct brand culture, recently signed a master franchise agreement to develop several locations in Guatemala and El Salvador. Under the agreement, 10 Moe’s restaurants will be developed in the neighboring Central American countries over eight years, the first of which is slated to open in 2014 in Guatemala City. This deal marks the brand’s entry into these Central American countries and highlights the international demand for Moe’s Southwest Grill. The first Moe’s in Central America opened in Costa Rica in 2012. “Moe’s is thrilled to expand our footprint in Central America so we can introduce our flavorful, customizable menu items made from high-quality ingredients with the people of Guatemala and El Salvador,” said Mike Shattuck, President of FOCUS Brands International, which handles overseas expansion for Moe’s Southwest Grill. “International consumer demand for Moe’s remains high and we’re eager to partner with qualified franchisees to grow our presence and penetrate untapped markets.” Moe’s Southwest Grill has enjoyed strong growth domestically, where it recently opened its 500th location in New York City, as well as abroad with new market launches in Costa Rica and Russia in the past year. The company expects to open more than 260 global units of all its franchise concepts during 2013 For more information: Website: www.moesfranchise.com.
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