Franchising USA - March 2014

Franchising usa T he ma g a z ine for franchisees

VOL 02, ISSUE 05, mar 2014

$5.95 www.franchisingusamagazine.com

W e i g h t L o s s & W e ll n e s s :

Healthy Franchising How Much M o n e y W i ll Y o u r Franchise Make?

Women in Franchising:

F r o m M a r k e t i n g t o M i ll i o n s LATEST NEWS

FINANCIAL ADVICE FROM THE BANKS

TOP LAWYERS’ ADVICE

SPECIAL SPECIAL ADVERTISING ADVERTISING SECTION SECTION

HOT OPPORTUNITY–GYM & SPA JUNE JUNE 2013 2013 BUYER’S BUYER’S GUIDE GUIDE

total woman®® gym + spa

Unique Franchise Opportunity

Two Two great great Industries Industries Within Within One One Brand Brand Total Total Woman Woman Gym Gym + + Spa Spa is is a a leading leading gym and five star spa housed gym and five star spa housed under under one one roof roof that that focuses focuses on on women’s women’s lifestyle lifestyle and and wellness, wellness, offering offering statestateof-the-art of-the-art equipment equipment and and fitness fitness programs programs as as well well as as an an extensive extensive spa spa menu menu to to rejuvenate rejuvenate from from head head to to toe. toe.

The The fitness fitness and and spa spa industries industries represent represent approximately approximately $30 $30 billion billion annually and have grown annually and have grown even even during during the the recent recent recession. recession.

Sources (IHRSA, AMTA, ISPA) Sources (IHRSA, AMTA, ISPA)

More More than than 40 40 Years Years of of Experience Experience Since Since 1965, 1965, Total Total Woman Woman Gym Gym + + Spa Spa has been dedicated to helping has been dedicated to helping women women achieve achieve their their health, health, fitness fitness and wellness goals.

They and wellness goals. They currently currently own own and and operate operate 15 15 company company locations in California locations in California and and have have plans plans to to expand expand in in major major cities cities across across the the U.S. U.S. with with the the launch launch of of their their franchise franchise program. program.

Once Once in in a a Lifetime Lifetime Offer Offer for for Passionate People Passionate People Total Total Woman Woman Gym Gym + + Spa Spa is is looking looking for business people who have for business people who have the the qualifications qualifications and and passion passion for encouraging, uplifting, for encouraging, uplifting, and and supporting supporting women women to to take take advantage advantage of of this this once once in in a a lifetime lifetime franchise franchise opportunity opportunity -two two growing growing industries industries under under one one roof! roof! The The gym gym offers offers the the latest latest fitness fitness equipment, equipment, certified certified personal personal training training and and Pilates, Pilates, group group exercise classes (Zumba, exercise classes (Zumba, cycle, cycle, yoga, yoga, kick-boxing, kick-boxing, boot boot camp, camp, etc.), etc.), while while the the full-service full-service spa spa offers offers facials, facials, body body treatments, treatments, massage, massage, and and more. more.

Seasoned Seasoned Veterans Veterans Behind Behind Franchise Expansion Franchise Expansion The The franchise franchise expansion expansion of of Total Woman Total Woman Gym Gym + + Spa Spa is is spearheaded spearheaded by

by Gene Gene LaMott LaMott and and Ben Ben Amante, Amante, two two seasoned seasoned veterans veterans in in the the fitness fitness franchise franchise industry. industry.

Learn Learn More More about about becoming becoming a a Total Total Woman Woman Gym Gym + + Spa Spa Owner Owner Total Total Woman Woman Gym Gym + + Spa Spa is is offering offering a a franchise franchise opportunity opportunity that that is is poised poised to to be be one one of of the the best best of of its its kind. kind.

Dedication Dedication and and Commitment Commitment Total Woman Total Woman Gym Gym + + Spa Spa is is committed committed to to support support and and guide guide women women to to reach reach their their personal personal health health and and wellness wellness goals goals in in a a space space created for them, by staff committed created for them, by staff committed to to them. them.

TO TO LEARN LEARN MORE MORE GO GO TO TO

totalwomanspa.com/franchising totalwomanspa.com/franchising ,, or or email email at at franchising@totalwomanspa.com franchising@totalwomanspa.com ,, To Learn More Go To: call us at 805-379-0550. call us at 805-379-0550. *This is totalwomanfranchising.com, *This is not not an an offering. offering. Our Our franchises franchises are are only only offered offered®through through prospectus. prospectus.

We are in the process of registering the Total Woman ® Gym+Spa franchise or email jgregory@totalwomanspa.com, We are in the process of registering the Total Woman Gym+Spa franchise opportunity in Call Us at 805-379-0050. opportunity in most most states states across across the the USA. USA. Until Until registration registration is is actually actually

received from the states, we are not received from the following following states, not yet yet in in a a position position to to respond respond *This is not an offering.

Our franchises arewe onlyare offered to inquiries from or regarding California, Hawaii, Illinois, Indiana, Maryland, to inquiries from or regarding California, Hawaii, Illinois, Indiana, Maryland, through prospectus.

We offer Total Woman Gym + Spa Minnesota, New York, Minnesota, Newstates.

York, Rhode Rhode Island, Island, Virginia Virginia or or Washington.

Washington. Our Our website website will will franchises in most continue to be updated as state registrations are received. continue to be updated as state registrations are received.

“The “The fitness fitness and and spa spa industries represent industries represent approximately approximately $30 $30 billion billion annually annually and have and have grown grown even during even during the the recent recession.” recent recession.”

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Franchising usa T he ma g a z ine for franchisees

FRANCHISING USA VOLUME 2, ISSUE 5 march 2014 publisher: Colin Bradbury. colin@cgbpublishing.com

EDITOR: Jessica Spoto. editor@cgbpublishing.com

from the

Editor

SALES DIRECTOR: Vikki Bradbury. vikki@cgbpublishing.com

Business Development Manager: Jenn Dean. jenn@cgbpublishing.com

DESIGN: Jejak Graphics. jejak@bigpond.com

COVER IMAGE: dr g’s weight loss and wellness

CGB PUBLISHING 676 Wain Rd. Sidney, BC V8L 5M5 CANADA Sales: 250 590 7116 Editorial: 778 426 2446 www.franchisingusamagazine.com

Proud member of the IFA:

SUPPLIER FORUM International Franchise Association 1501 K Street, N.W., Suite 350 Washington, D.C. 20005 Phone: (202) 628-8000 Fax: (202) 628-0812 www.franchise.org

March is a great month to get inspired. Coming out of winter hibernation, we are keen to tackle new projects, learn new skills, and visualize new goals.

This issue of Franchising USA has been designed to provide you with all the tools and knowledge you will need to turn your inspirations into business goals, and ultimately help you find a franchise.

Featuring Dr. G’s Weight Loss and Wellness on the cover, this business is offering amazing opportunities for entrepreneurs to get on board and join the highly profitable, doctor-driven franchises that are transforming clients’ lives. While 68 percent of Americans are currently overweight or obese, billions of dollars are being spent each year as individuals strive to lose weight without success. This is where Dr. G’s steps in.

In this issue’s Special Feature on Health and Beauty franchises you will learn about various types of businesses available, and the benefits of owning one in this sector. The Franchisor in Depth article covers CarePatrol, sharing its inspiring story, unique concept, latest achievements and franchise requirements.

On the other hand the Franchisee in Action article features a BaseCamp franchisee that has overcome many obstacles and grown exceptionally with

both Kid to Kid and Uptown Cheapskate franchise locations. In this issue you will also find tips from industry experts for growing your franchise, reviewing the franchise agreement, and managing your SEO content. Hot off the press, this issue also includes valuable information about Sociallybuzz’s upcoming app that franchise owners won’t want to miss out on!

March’s Veterans Supplement includes a cover story on Aaron’s, Inc. Committed to providing Veterans with employment opportunities, more than 1,000 Aaron’s employees and franchise owners have served in the Armed Forces. Reviewing Aaron’s comprehensive training and support programs, this piece outlines the benefits of owning and managing an Aaron’s franchise. The supplement also profiles various franchise opportunities, recognizes a female Veteran who has made history with her Midas franchise, and offers advice for Veteran mentorship.

As you read the March issue I hope you find fresh inspiration to pursue your goals. As Eleanor Roosevelt once said: “Do one thing every day that scares you,” so despite how vast your goals may be, it’s time to take the plunge and begin building your business.

Wishing you a wonderful month, Jessica Spoto Editor, Franchising USA

The information and contents in this publication are believed by the publisher to be true, correct and accurate but no independent investigation has been undertaken. Accordingly the publisher does not represent or warrant that the information and contents are true, correct or accurate and recommends that each reader seek appropriate professional advice, guidance and direction before acting or relying on all information contained herein. Opinions expressed in the articles contained in this publication are not necessarily those of the publisher. The publication is sold subject to the terms and conditions that it shall not be copied in whole or part, resold, hired out, without the express permission of the publisher.

Franchising USA

MARCH 2014

On the Cover 10 Cover Story

A Healthy Franchise Opportunity: Dr. G’s Weight Loss & Wellness

43

82 How Much Money Will I Make From My Franchise?

Julie Lusthaus & MacKenzie Dimitri, Einbinder & Dunn, LLP

54 Women in Franchising: From Marketing to Millions Marie DeNicola, Mainstream Boutique

76

22

16

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Contents In Every Issue

Spotlight On Service

06 Franchising News Announcements from the Industry

32 Murphy Business & Financial Corporation 74

Sociallybuzz

43 Feature Article

Health and Beauty:

Feel Good with Fabulous Franchising

59 Veterans Supplement

On the Cover: Aaron’s, Inc. 54 Women in Franchising:

From Marketing to Millions,

Marie DeNicola, Mainstream Boutique

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Franchise Profiles 14 Money Mailer 58 LaVida Massage

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16 Most Important FDD Issues: Top 12 List Lynne Shelton, Shelton & Power LLC

22 What Does the Franchise Agreement Reveal

About the Franchisor?

Ned Levitt, Dickinson Wright LLP

28

Expert Advice

28 Top 7 Questions You Need to Ask Yourself

About SEO If You Own a Franchise Adam Heitzman, HigherVisibility

76 How to Overcome Excuses in 2014 Dan Waldschmidt, International Business Strategist

40

50 Start Small, But Think Big‌REALLY BIG! George Knauf, Franchoice

82 How Much Money Will I Make From My Franchise Julie Lusthaus & MacKenzie Dimitri, Einbinder & Dunn, LLP

Franchisee in Action

Franchisor in Depth 24 CarePatrol

50

36 BaseCamp Franchising

Have Your Say 40 Primrose Schools 78 Moran Brands

Focus 20 The Interface Financial Group Franchising USA

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what’s new!

WOW 1 DAY Painting Announces New Managing Director WOW 1 DAY PAINTING is pleased to announce the hiring of James Alisch as Managing Director, responsible for the day-to-day operations of the franchisor.

Alisch previously served as VP of Operations with WOW 1 DAY PAINTING’s sister company, 1-800-GOT-JUNK? and helped grow that brand into the largest junk removal franchise in North America. In addition, Alisch has 20 years of experience in the home services sector, including over 13 years in the house painting industry with companies such as College Pro Painters and CertaPro Painters. He has also had success as a business owner, growing his company MIRA Floors & Interiors to $4.2M in only four years.

Alisch will be working closely with Founder & CEO Brian Scudamore to continue to grow WOW 1 DAY PAINTING’s revenue and franchise footprint in North America. Currently in 26 cities in Canada and the U.S, Scudamore’s vision is to have 150 franchises and $75 million in system-wide revenue by the end of 2016. This seems like a difficult feat given the competitive nature of the painting industry but Alisch feels that this is an achievable goal considering WOW 1 DAY PAINTING’s distinct advantage

over its competition. They promise to paint a home in a day, unlike any other company out there and is bringing professionalism and a high level of customer service to the fragmented painting industry which has been lacking both.

Under the vision of Scudamore and the execution of Alisch, WOW 1 DAY PAINTING is poised to take over the North American painting market.

For more information: Website: www.wow1day.com/

Wingstop Expansion Reaches The Philippines Development Agreement Includes 50 Restaurants with First Grand Opening Later This Year

Wingstop Restaurants, Inc., now in its 20th year in business, is expanding to the Philippines thanks to an exclusive development agreement with Wingstop Philippines, Inc. to open 50 restaurants across the country. The first location is scheduled to open later this year.

Franchising USA

“We cannot wait to introduce ‘The Wing Experts’ to our guests in the Philippines,” said Walden Chu, President of Wingstop Philippines. “The Wingstop brand is a synergistic addition to my group’s [CBTL Holdings] vision of building a portfolio of trustworthy and delightful industryleading companies.”

85 of those this year.

The expansion is the latest in a series of international milestones for Wingstop, which recently opened new restaurants in Russia and Singapore. Wingstop has over 600 restaurants around the world and commitments for more than 500 additional restaurants with plans to open more than

the globe. This agreement puts us well on

“We’re excited to enter the Philippines and to embark on another great international partnership,” said Wingstop’s Chief Development Officer Dave Vernon.

“Following a record-breaking year of development in 2013, the demand for Wingstop continues to flourish around

our way to what we expect to be another record year of growth for Wingstop.”

For more information:

Website: www.wingstopfranchise.com/ international.aspx.

LaVida Massage Opens Second Austin Wellness Center Cedar Park Local ‘Massages’ Profits of Growing Massage Franchise with Area Expansion LaVida Massage, a unique international franchising corporation specializing in health and wellness through therapeutic massage services for the family, is expanding in the Austin market with the opening of its Pflugerville, Texas center. This marks the second LaVida Massage center in the Austin metropolitan area.

Located in the Stone Hill Town Center, the center is a 2,400 square feet facility and features eight regular massage room, one room hosting skin care services and one room dedicated to Vichy treatments—a new service offered only at this LaVida Massage location.

Providing a number of massage therapy services and related products specifically meant to meet the needs of both men and women, LaVida Massage of Pflugerville offers therapies that include Swedish, deep tissue, hot stone, prenatal, orthopedic, oncological, sports therapy and more. Additionally, the center

offers aesthetic services such as facials, waxing and body wraps.

Owned and managed by Cedar Park local and corporate veteran in the information technology industry along with his wife, Abhay and Suparna Salunke also maintain dedicated ownership to LaVida Massage of Cedar Park: “Our Cedar Park center, which opened in the summer of 2012, is doing well in serving as a wellness complement to the community,” says Abhay. “With the recent business spurt in Pflugerville we expect to be a good addition to the area as the only local business of this kind.”

For more information: Website: www.lavidamassage.com

SQ1 Develops New Digital Portal for Jiffy Lube Ad-Tech Agency Gets Slick with ‘First of its Kind’ Franchisee Portal for Digital Marketing Sq1, known for its Conversion Optimization Methodology, has been busy since being selected by Jiffy Lube International as the full digital agency of record, responsible for driving car counts nationally.

Sq1 hit the ground running in early 2013 and has developed and recently deployed an “industry first” online portal for Jiffy Lube International to improve national PPC performance. The initial results have exceeded Jiffy Lube’s expectations.

The portal allows each market – DMA flexibility to customize paid search offers

with national PPC funds. Up until the development of the Sq1 portal, Jiffy Lube franchisees did not have the flexibility to customize offers locally with the national program.

Ernie Capobianco, CEO, Sq1 says: “Jiffy Lube and their franchisees have allowed Sq1 to fully implement our Conversion Optimization methodology. As part of our process we noted inefficiencies in the way PPC is purchased amongst most franchise organizations. Working with Jiffy Lube, we created a remarkable new tool to eliminate these inefficiencies.”

Jim Badum, Vice Chairman, Sq1 adds: “In the short time this technology has been live it has already improved results significantly. We see this as game changing for the Jiffy Lube system as it gives Jiffy Lube a great competitive advantage.”

Sq1 developed this new portal with active participation from Jiffy Lube management as well as with representation by franchisees.

For more information: Website: www.sq1.com Email: jim.badum@sq1.com

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what’s new!

Two Maids & A Mop Opens Doors to Franchising First Franchise Location Opens in Tampa, Backed by Co-Founders of College Hunks Hauling Junk Two Maids & A Mop recently announced that the brand is open for franchise opportunities. Potential franchisees will have full access to the brand’s business model and over ten years of experience in the cleaning industry. New franchise locations will join the network of thirteen existing locations in Alabama, Tennessee, North Carolina, Georgia, and Florida.

The first franchise for the brand has opened in Tampa, FL. The location is a joint venture with the co-founders of College Hunks Hauling Junk, a national franchise with over 45 locations nationwide.

“We are thrilled to be working with College Hunks team,” said Ron Holt, founder of Two Maids & A Mop. “Benefiting from their vast knowledge of the franchising business will only help strengthen our own franchise model.”

“Working with Ron and the Two Maids & A Mop team was a natural business decision for us,” commented Nick Friedman, President and co-founder of College Hunks Hauling Junk. “Their ‘Pay for Performance’ pay scale is a valuable business asset and we’re thrilled to support them through the franchising process.”

Franchise locations of the Two Maids & A Mop brand will have full access to replicate the business model, including the “Pay for Performance” compensation model. The proprietary formula, which determines employee wages based on customer feedback, is the only one of its kind in the cleaning industry.

For more information: Website: www.twomaidsfranchise.com/our-competitiveadvantage.aspx

Outstanding Achievements Celebrated at FASTSIGNS® Annual Convention FASTSIGNS International, Inc., franchisor of more than 550 locations worldwide, recently held its annual convention in Anaheim, CA. This year, a record-breaking 79 FASTSIGNS centers were recognized for exceeding one million dollars in annual sales, including 71 locations in the U.S., four in Canada, three in Australia, and one in the United Kingdom.

“Our annual convention is always an exciting time to celebrate the FASTSIGNS network’s accomplishments. We also use this time together to share best practices and learn from each other,” said

Franchising USA

Catherine Monson, CEO of FASTSIGNS International, Inc. “This year, we had record attendance including 15 franchisees who opened within the last year, and four co-brand owners who recently opened a FASTSIGNS location within their existing print business.”

Held at the Disneyland Hotel, over 475 franchise owners and employees from five countries attended the 2014 FASTSIGNS Convention. During the three days, there were more than 25 educational sessions and peer roundtables. Notable speakers included business leader Steve LeFever, sales productivity expert John Boyens,

digital signage expert Lyle Bunn and award-winning author Neal Petersen.

During the awards dinner, more than 140 franchisees were recognized for outstanding performance and special accomplishments. For the first time, the highest volume FASTSIGNS center exceeded the seven million dollar threshold in annual sales.

For more information: Website: www.fastsigns.com Phone: 800-FASTSIGNS

Goddard Systems, Inc. Shares Strong 2013 Early Childhood Education Franchise Plans Aggressive FiveYear Expansion Goddard Systems, Inc. (GSI), the franchisor of The Goddard School® system, recently announced a strong 2013 with the awarding of 41 new franchise agreements to qualified franchisees and the opening of 18 new schools.

This momentum is part of GSI’s expansion plan targeting communities across the country. The company has set a five-year development goal of awarding 60 new franchise agreements and opening 30 new schools per year by 2019.

“Our expansion in 2013 marks the beginning of our effort to open dozens of new Goddard School franchises nationwide,” said Joseph Schumacher, President and Chief Executive Officer, Goddard Systems, Inc. “The demand for childcare is at an alltime high. Over 15 million children in the U.S. require some form of childcare arrangement, and this, coupled with our unique play-based approach to learning as well as our unprecedented franchisee support, will help propel system growth in 2014 and beyond.”

GSI launched 2014 with a targeted franchise development strategy

focused on eight markets including Boston, MA; Houston, TX; Minneapolis, MN; Seattle, WA; Portland, OR; Philadelphia, PA; Hartford, CT; and New York City. The company is seeking qualified franchisees with a minimum net worth of $450,000 and liquidity of $150,000. No education experience is necessary.

Long recognized as the industry leader, The Goddard School system has been consistently listed in Entrepreneur Magazine’s “Franchise 500” ranking as the number one childcare franchise for 12 years.

Fore more information: Website: www.goddardschoolfranchise.com

Nestlé® Toll House® Café Up Record Year of Growth; Prepares to Shatter It Again in 2014 Popular Chain Also Rolls Out Innovation Kiosk Design for Shopping Malls In 2013, Nestlé Toll House Café signed 32 new franchise agreements in North America, an impressive 33 percent growth rate. Cafés were added in both new and established markets in the United States and Canada, in addition to several new locations throughout the Middle East.

Nestlé® Toll House® Café by Chip, the chain of premier dessert and bakery cafés built around the world’s most powerful food brand – Nestlé – is experiencing record growth across North America, as well as overseas.

And thanks to franchisee demand, the chain already has 30 new locations scheduled to open in 2014. The overall annual goal is 40 new franchise agreements in North America this year.

“We are growing aggressively, but strategically, in partnership with many outstanding franchise operators,” said Ted Milburn, Vice President of Franchise Development for Nestlé Toll House Café.

“Our new stores, featuring our nextgeneration design for Street, In-line and Kiosk cafés, are generating significant interest from prospective franchisees every day. Our franchise discovery process is also very thorough and has engaged more candidates with our brand. We just wrapped up a tremendous year, but we expect 2014 to be even better.”

A key driver of the chain’s growth this year is the company’s new relationship and long-term master lease agreement with Rouse Properties, Inc., a national owner and operator of regional enclosed malls.

For more information: Website: www.nestlecafe.com.

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D r. G’s Weight Loss & Wellness

A Healthy Franchise Opportunity:

Today 68 percent of Americans are overweight or obese, and in many cases this is a leading cause of heart disease, high cholesterol, diabetes, and depression.

While Americans spend billions of dollars each year trying to lose weight without success, Dr. G’s steps in with proven results. Delivering highly individualized programs directly tied to clients’ personal weight loss and wellness goals, Dr. G’s provides an amazing opportunity for smart entrepreneurs to get on board and join the highly profitable, doctor-driven franchises that are transforming clients’ lives.

Franchising USA

Dr. Charles Goldsmith, an experienced OB/GYN, founded Dr. G’s Weight Loss & Wellness Program in 1994. When weight loss became a growing need among his clients, Goldsmith became engaged in trying to understand why so many factors seemed to be instrumental in supporting his clients’ needs. Spending countless hours of research and travelling vastly in search of a solution, his goal was to put together a weight loss program that would work. Discovering that weight loss is very complex and needs to be supervised by a physician, he then moved full time into the weight loss arena and developed the four-prong program consisting of appetite, metabolism, diet, and habits.

This approach, along with a combination of herbal compounds and prescription medication helped his clients lose weight and keep it off. To date, The Dr. G’s

fro

“Franchisees are assisted with everything om signing the agreement, to real estate and construction development.”

Weight Loss & Wellness Program has helped more than 100,000 customers lose over 1,000,000 pounds.

Dedicated to clients’ weight loss and wellness, Dr. G’s biggest differentiator is that the program is physician driven.

Focused on changing behavior versus food intake, Dr. G’s clients receive a comprehensive medical evaluation including a blood panel analysis, EKG, metabolic rates, body composition, medical history, and more. Based off of this information they then receive a treatment plan designed specifically for their unique needs. This treatment plan includes a physician program combined with a wellness coach and support system, as well as proprietary software that provides daily meal plans and exercise opportunities based upon their individual lifestyle.

“The program was born from the belief that obesity and weight gain is essentially a disease, and only in the last few years has all the literature come out in support of that,” says Charlotte Russell, Chief ExecutiveOfficer. “Our system always perceived such and the need to attack the

symptoms of the disease as you would any other disease.” Following the weight loss plan, all centers also offer a transition and maintenance program. “We’re continuing to add different services all related to the other aspects of weight loss or wellness.

As clients lose weight they see their success as a reflection of the services and support that their physician, wellness coach, and the staff has given them. This allows us to shift from weight loss to concentrating on wellness,” she adds.

“People come to us to get better and feel better about themselves. As this happens they become more engaged in not just maintaining their weight, but changing their lifestyles.”

Growing from one center to four in South Florida, while Goldsmith was beginning to attract thousands of individuals, he wanted to reach hundreds of thousands. In October 2010 Dr. G’s began franchising, and on the first day of sales sold 22 franchises.

In March 2011 Dr. G’s also expanded franchising efforts internationally.

Today 194 franchises are open or under development spanning eight states and seven countries, including four area directorships and six master franchises.

Currently operating in El Salvador, Guatemala, Honduras, Dominican Republic, Panama, and Mexico, additional territories have been sold in Brazil, Costa Rica, Nicaragua, Puerto Rico, and Australia. In July 2011, Dr. G’s sold out territories in South Florida, and today the company is focused on expanding in North Florida, as well as in other markets where its presence is established. “We’re interested in the southern belt, in states such as Texas and Georgia,” Russell explains, adding, “We would like to wrap around from New York and connect the dots to Arizona.”

Dr. G’s offers two types of franchise models for two types of franchisees.

The first is a traditional storefront retail model. With this model franchisees are entrepreneurs who employ a physician to deliver the service. These franchisees are typically experienced in business within either the retail or service industries and have strong financial qualifications.

The second model type is a physician office model. Offering practiced physicians the opportunity to expand their current client base while attracting new

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D r. G’s Weight Loss & Wellness

“People come to us to get better and feel better about themselves. As this happens they become more engaged in not just maintaining their weight, but changing their lifestyles.” patients, this allows physicians to utilize a program that is turnkey, has its own proprietary software, licensed pharmacies, and easy to implement practices as an add on to their current practice.

Dr. G’s franchising process begins with a candidate expressing interest in the business. After filling out an application the candidate is contacted by a member of the corporate team to answer any questions. Once financially qualified, the candidate then completes a series of conference calls with franchise sales representatives. Next, a Discovery Day is held in Fort Lauderdale, Florida, which includes a face-to-face interview process with corporate staff; a tour of the facility and franchise locations; and meeting franchisees and physicians involved with providing services to clients. The cost to own a franchise location in the U.S. ranges from $115,900 to $508,100.

Once awarded a franchise, new franchisees undergo comprehensive training. Broken down into four stages, the first section is home-based, hosted through webinars.

Next franchisees spend a week at Dr. G’s University where they learn about the business and its daily operations in a classroom setting.

Stage three is brand training. Lasting one week, this area of training is held towards the closure of the site construction.

During this time the corporate office assists with interviewing and hiring of all staff. The final step of training is held in the franchisee’s location the week of their grand opening. Here the operational support staff help ensure that everything runs smoothly from the moment the doors open, onwards. Additional physician training is also offered as a three-day program.

“Ongoing support is always available to our franchisees. This is not a static business, we’re constantly adding new programs, product development, and support on behalf of our franchisees,” says Russell. Dr. G’s provides full marketing support, and direct consultation to physicians and wellness coaches, and also assists with the recruiting, hiring and training of all physicians.

The Dr. G’s differentiator is its focus on medical weight loss and its grasp on a turnkey program. “The process begins with the generation of the inquiry, and continues all the way through fulfilling of prescriptions. There is no one aspect of the business that the franchisee has to piece together alone,” says Russell.

“Franchisees are assisted with everything from signing the agreement, to real estate and construction development.” Dr. G’s proprietary software not only acts as a medical management program, but it

also tracks every step of the process for clients. In addition, it allows franchisees to communicate directly with vendors, cardiologists, and the pharmacy.

Franchisees are also given access to the main stays of what helps make the program successful and provided with the proprietary supplements and nutraceuticals only available through Dr. G’s franchising system.

While Dr. G’s clients typically spend six months participating in a weight loss plan, followed by six months on a transitional or maintenance plan, the next major development for Dr. G’s is a non-invasive fat reduction and skin tightening service complete with a complementary skin care product line. “These services go handin-hand with weight loss. As clients lose weight they want their secondary concerns to be equally satisfied,” Russell says, noting that teeth whitening, and eyelash and eyebrow conditioning services are also available at every center. Also in the works is an additional program specific to men, and a family-based program.

With three years franchise experience under its belt Dr. G’s Weight Loss and Wellness has already been ranked “Top 25 Franchises” by Franchise.com, as well as awarded a spot in South Florida Business Journal’s “50 Fastest Growing Companies.” “More than just financially rewarding, our franchisees bring health and hope to families,” Russell says, adding, “They truly are making a difference and saving lives.”

For more information: Website: www.drgsweightloss.com/

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M oney M ailer

COUPONS MEAN BUSINESS! MONE Y MAILER FR ANCHISEES ARE LOCAL MARKE TING E XPERTS “Coming off the best year in its 34-year history this B2B franchise will add 60 new franchisees in 2014.”

Money Mailer has re-invented marketing for local businesses with money saving offers delivered in the mail, on the Internet, to mobile devices and social media.

A Money Mailer franchise is an in-house ad agency resource for local, neighborhood businesses. Franchisees have an exclusive, protected territory and provide business owners with a multi-media, integrated marketing solution for pennies per household.

targeting technology, access robust marketing databases for high-impact proposals, and master a consultative process that differentiates them from everyone else “selling advertising.”

After MMU a dedicated, field-based Franchise Performance Coach spends several weeks in-territory to ensure a successful startup. Lead generation is provided along with an aggressive launch package designed for rapid cash flow.

Franchisees are predominantly homeoffice based so no storefront or inventory required.

Franchisees do the consulting, Money Mailer does the rest. Once a campaign is finalized it is sent to Money Mailer for ad design, production, mailing and digital placements. Campaigns combine targeted direct mail with an integrated menu of online, mobile, local email marketing, social media and smart phone apps.

Money Mailer is laser-focused on local, neighborhood businesses, a strategic advantage called hyper-local marketing.

This hyper-local focus originated in 1979 when the company’s founder was approached by a Chamber of Commerce that wanted to create awareness for products and services offered by local merchants. The first Money Mailer shared mail envelope was created and filled with local offers. It was an instant success!

Franchisees become local marketing experts with formal training that starts with two weeks of classroom curriculum at Money Mailer University. Here they learn how to use proprietary, web-based

With “saving money” as today’s consumer mantra, the open rate for Money Mailer’s iconic red-white-and-blue shared mail envelope is at an all-time high. Consumers can also access these money saving offers

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online, on their mobile devices or social media.

The company’s direct mail business continues to grow as marketing research confirms direct mail is the most trustworthy source of information for a purchase decision, and the only media an unsolicited offer is not viewed as intrusive by consumers bombarded 24/7 with banner ads and email offers.

There is still available territory in several prime markets including Orange County, Austin, San Antonio, Seattle, Chicago and Northern Virginia. Dennis Jenkins, VP Franchise Licensing and a 14-year Money Mailer veteran added: “It’s the perfect time to consider this franchise.

Consumers need to save money. Local businesses need our expertise more than ever.”

For more information: Web: www.franchise.moneymailer.com Phone: 888.446.4648 Email: franchiseleads@moneymailer.com

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ex per t advice

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

Most Important FDD Issues

t s i L 2 1 p To The FDD (Franchise Disclosure Document) can be well over 200 pages for most major companies. With all of that information, where should a prospective franchisee start?

In this article, we will address the top 12 items to pay attention to within the FDD. You should read all of the documents and items contained within the FDD and retain counsel of an experienced franchise attorney or a certified public accountant to answer any questions that you have about any of the clauses contained within the FDD.

1

Bankruptcy

In Item 3 of the FDD, the franchisor is required to disclose whether any of the officers, directors, managers, or the franchise company itself has filed bankruptcy within the last 10 years. They must disclose this information for the United States Bankruptcy as well as foreign country filings. It is imperative that you pay particular attention to this information. If the franchisor has filed bankruptcy, you need to dig a little deeper.

Find out the surrounding information and reasoning for the bankruptcy. Many companies have legitimate reasons for filing a bankruptcy, but some do not.

You do not want to be a victim to a “professional bankruptcier� who just

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accumulates a lot of wealth and then closes the company. You are looking to create a long term business relationship, so make sure the company is solid financially.

2

Term of the Agreement

The term of the agreement will be located in Item 17(a) and within the Franchise Agreement itself.

First of all, this goes for all of the clauses; make sure that the clause is consistent between the FDD and the Franchise Agreement. The most common term of the Agreement is 10 years. However, this can usually be negotiated for a longer term. If the franchise is a perfect fit for your business skills, it would be a smart decision to have your franchise attorney negotiate a longer term to ensure a longer period before the potential for higher royalties could set in. Remember that most Franchise Agreements will state that at the end of the term, you must sign the “then-current” Franchise Agreement to continue as a franchisee. After a decade it is understandable that costs and fees will have gone up, especially as the brand becomes more infamous.

3

Non-Compete Clauses

The non-compete clause will be located within Item 17(q) and Item 17(r) of the FDD and within the Franchise Agreement. Since every Franchise Agreement is compiled differently, we cannot advise as to where it will be within the Agreement, but it most likely will be there somewhere. Non-compete clauses are standard protocol for a franchise. After all, you are licensing the right to use the franchisor’s confidential information, so of course they are going to want to protect it. Most franchisors’ non-compete clauses will impose the restriction on all of the executive board members or parties of the franchisee company and their management employees. The only item that is usually negotiable with this clause is the amount of time after terminating the franchise that the non-compete will be enforced for and the geographical area for the non-compete. Depending on the type of business, standard provisions will include two years and three to five miles

from the franchised location. This is to try and protect the franchisee from stealing away current clientele after leaving the franchise. However, for some franchises the area could be much larger. Take for example, a construction company could be for a whole area of a state and still be considered reasonable by courts. Your franchise attorney can assist in giving you guidance as to what would be reasonable to negotiate for the type of franchise you are looking at purchasing.

4

Hidden Costs

By hidden costs, I am referring to the costs other than the initial franchise fee and royalty fees. You will find these fees located in Item 6 & 7 in the FDD. Item 6 lists the “Other Fees” while Item 7 gives information on the “Estimated Initial Investment.” Some of the typical fees you will see listed here are lease fees, supplies, inventory, equipment, disposable equipment expenses, and advertising fees. The hidden costs could be contained in Item 9 “Franchisee’s Obligations” or in Item 17 titled “Renewal, Termination, Transfer and Dispute Resolution.” Some of the more common ones would be required upgrades to the trade dress or “overall look” of the franchise or even additional or ongoing training fees. Make sure you look for these potential fees throughout the FDD and the Franchise Agreement.

5

Exclusive Territory

The protected territory that will be granted to you if there is one will be discussed in Item 12 of the FDD. This is one of the most negotiable areas of the contract. Make sure that your franchise attorney negotiates the largest possible protected territory for your franchise to ensure that you have an ongoing chance for profitability in the franchise.

6

Franchisor’s Obligation to Assist You

This information will be in Item 11 of the FDD. This will probably be the largest Item in the FDD. Within this section, the franchisor must disclose the

amount of training they will give you, before and after opening your franchise along with what other services they will provide. Federal law requires that the franchisor state that this is the only assistance they are required to provide.

Therefore, if the franchisor is telling you that they will provide more help that what is in writing in this section, make them place that promise in writing. Of course, that advice is actually true for all of the Items disclosed in the FDD; get all promises in writing. You can also negotiate on such items as location or site assistance and the amount of time the franchisor has to approve your proposed site for the franchise.

7

Training

This is another area that can be negotiated to some degree by an experienced franchise attorney. Also contained within Item 11, the actual training program is typically set; but other training times can usually be negotiated.

Be extremely cognizant of what training you will receive. Remember that this is the franchisor’s business. You need to ensure that they are giving you enough preopening training to start successfully, and enough post-opening training to continue running smoothly in the black.

8

Franchisor’s Right to Terminate the Agreement

Contained within Item 17 of the FDD you will find a table that reflects how and when the franchisor can terminate your franchise agreement. It is extremely important that you read this section carefully. This is when you could lose your business because of your actions or inactions. Typically you will see that the franchisor can terminate you for “cause.”

Then in Item 17(h) will be a laundry list of items that the “cause” cannot be cured.

In other words, if these events happen, you are going to be automatically terminated as a franchisee and you will have to close the business. Some of the usual items contained within Item 17(h) are if you file bankruptcy, have an unsatisfied judgment for 90 days; have a levy on a substantial portion of real or personal

Franchising USA

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s

Page 17

ex per t advice

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

“Your franchise attorney can assist in giving you guidance as to what would be reasonable to negotiate for the type of franchise you are looking at purchasing.” property; abandonment; trademark misuse; unapproved transfers; conviction of a felony; or two or more repeated curable defaults within a 12 month period, even if cured.

Also contained in Item 17 under section (g) will list “causes” that can be cured.

This means that if you rectify the situation within the allotted time, usually 30 to 90 days, you will not be terminated. Some of the items typical to Item 17(g) include: Sanitation problems, cessation of business; noncompliance with provisions of the Franchise Agreement and/or Operations Manuals; violation of public health laws; non-payment of fees; non-submission of reports; violation of law by you; breach of any material covenant of any of the agreements; default under the lease; attempted assignment in violation of the Franchise Agreement or any other defaults listed in Franchise Agreement.

9

Restrictions on Products and Services

This information will fall under Item 8 of the FDD and will also be in your Franchise Agreement. This section tells you exactly what the franchisor has control over, or requires approval before you can go forward with a lease/purchase. You can see all types of information in this section; however, commonly location, equipment, supplies, records and bookkeeping, specifications and standards, signage, and materials are all on the list. The franchisor must disclose whether or not they receive any kickbacks or rebates from the vendors based upon your sales. They also must disclose if they negotiate purchase arrangements for all franchisees with various suppliers for the mutual benefit of all franchisees, which include price terms.

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10

Cancelled and Transferred Franchisees

At the end of all the required tables in Item 20 of the FDD, (or perhaps on an exhibit attached to the FDD) you will find a listing of all of the cancelled and terminated franchisees. This list can be worth its time in gold. I would recommend that you call these franchisees first and find out why they were cancelled or terminated. It could be solely their lack of solid business choices, or it could be that there is not enough profit in the business for it to stay growing. A mountain of information can be obtained from exfranchisees. Remember to take what they say and try to look at it objectively. Of course they are going to have bad news; they failed. But you can avoid their bad luck by being prepared and not making the same mistakes they did in the business.

Use their information, and turn it into your better business plan.

11

Litigation

Of course all of the items listed on this Top 12 are important, but this one is definitely worth some investigation as well. Item 3 of the FDD, must list all of the litigation that the franchisor has been in within the last 10 years. The franchisor should also have listed when the litigation occurred, who originally filed the litigation, them or the franchisee, and what the outcome of the case was.

12

Renewal and Transfer Rights

Back by popular demand is Item 17. There are several sections within Item 17 that deal with renewal and transfer, specifically Item 17(b), (c), (I), (k), (l), and (m). These sections deal with

Lynne Shelton

the time frame for your renewal, and what you have to do or accomplish to be eligible for renewal. In the transfer arena there are many items to watch out for, such as: a requirement that you will remain liable even after the transfer; the franchisor’s ability to reject the transfer; an extended amount of approval time for the transfer; or an unreasonable definition of the word “transfer” such as a change in ownership of anything over five percent. An experienced franchise attorney will ensure that you have the franchisor’s approval rights be tied to reasonable objective standards.

Most important tip of all, a tip 13 if you will, is read all of the documents and items contained within the FDD and retain counsel of an experienced franchise attorney. Then ask questions.

Find out answer to any and all questions that you have about any of the clauses contained within the FDD or the Franchise Agreements.

Lynne Shelton, Esq., is a Senior Partner over the Franchisor division at Shelton & Power, LLC, a Franchise and Intellectual Property Law Firm; a Certified Franchise Executive; and has been involved in the franchising industry for over 20 years.

For more information: Website: www.sheltonpower.com/ Email: Franchising@SheltonPower.com.

Page 19

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Franchising USA

focus

The Interface Financial Group

New Year, New Horiz

“The number one issu stifle new busine This year, 2014, is not predicted to be a significantly better year for small businesses. They will continue to flourish but, in many cases, not to their full potential.

There are many aspects of a small business that hamper their growth. When you analyze a hundred enterprises however, you invariably find one or two issues that overshadow the others.

The number one issue that seems to continually stifle new business growth is a secure and regular cash flow. ‘Cash is King’ is a well-known expression - often said in passing - but in reality nothing could be further from the truth. Lack of a well-defined and regular cash flow

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has been the downfall of thousands of businesses. On the other hand a healthy, well-organized cash flow has proven to be the central tenet that has created growth and profit for many entrepreneurs.

Talking about having a well-organized and predictable cash flow is often easier that actually achieving it. Can a small business owner really organize their cash flow such that they know who will pay, and more importantly, when? It is the ‘when’ factor that leaves so many small businesses stranded and starved for cash.

Sales of goods and services have evolved on a ‘net 30-day’ basis. Simply put, this means that the buyer has 30-days’ grace before they write the check and pay the invoice. If you have a good memory you may remember when that 30-day rule was the norm. Today unfortunately, it is often stretched to the breaking point for many suppliers.

Entrepreneurs need to investigate programs that allow them to deliver their goods or services and then literally within days, not weeks or even months, get paid.

The program is invoice discounting. This program has been available for many years in the financial service marketplace, but has unfortunately only been available to companies of considerable substance and longevity.

The Interface Finance Group, through their innovative IFG 50/50 franchise offering, has now brought the service to the small business market sector. Interface engages with their clients to buy specific invoices at a small discount that effectively turns that sale into a ‘cash on delivery’ approach.

By delivering this service through a franchise network, Interface has solved the problems often associated with any

zons, New Brand has seen a considerable boost with the franchise approach, and now franchising moves into areas that were traditionally corporate operations.

One such area is that of financial services.

We see an increasing number of financial services that can be and are delivered through a franchising format. One seemingly unlikely operation that has been franchised is that of invoice discounting.

Until recent times this was a service very much geared to medium and large-scale operations. As with so many financial services, nobody had found a way to make it available to the small business entrepreneurs of this world on a costeffective basis.

ue that seems to continually ess growth is a secure and regular cash flow.â&#x20AC;? financial services facility, i.e. time to get started. Interface can turn a request for assistance in actual funding usually in three to four business days. They have found out how to get cash into the hands of their clients quickly and cost-effectively to enable small business growth.

The Interface facility offers an innovative approach to facilitate small business growth.

How Do You Deliver a Financial Service Through a Franchise?

We are all familiar with franchising.

When you ask the question, â&#x20AC;&#x2DC;Do you know of a franchise?â&#x20AC;&#x2122; the answer will almost certainly name a fast food outlet dominated by golden arches. Franchising certainly grew up in the food and fast food area, but much has happened since those days: The automotive support marketplace

Franchising played a major part in the growth strategy for The Interface Financial Group. Interface is a leading supplier of invoice discounting and spot factoring services to the small business marketplace in eight countries. Before embarking on a franchise approach some twenty years ago, Interface was indeed a corporate invoice discounter. All operations were conducted on a corporate in-house basis for almost twenty years.

In searching for an expansion medium, Interface decided to review franchising and ultimately found that it was a good fit.

With the ability to franchise, it has enabled Interface to become not only a national, but an international provider with offices in North America, Europe, Australia, and New Zealand. Why franchising works well for Interface is the fact that a common system has been taken from the corporate office and moved successfully into the local area of the franchisee. In making this move there has been no change in the integrity of the franchise and the service offered to clients. In fact, if anything, the service has greatly improved. This knowledge shift also incorporates the

decision-making process, so with a decision maker on hand to meet locally with prospective clients, the entire process of approval, documentation, and funding can be achieved in the minimum time frame possible.

Invoice discounting provides a valuable lifeline to many small business owners who are anxious to smooth out the ups and downs of their cash flow. By taking invoices as they are produced and discounting them, they achieve a cash flow geared to sales rather than collections.

For franchisees, they are in control of the process as they work on a local basis alongside their clients, creating a win-win situation.

Interface franchisees find that they can effectively run their franchise operation from a home-based office and have no need for staff or other costly overhead expenses. Interface, as a franchise destination, has proved very popular with downsized or right-sized corporate executives who are ready to enter the world of entrepreneurism and selfemployment. They gain the ability to help business owners grow their business, while growing their own franchise at the same time.

For more information: Contact: David Banfield Website: www.interfacefinancial.com Email: ifg@interfacefinancial.com Phone: 1-800-387-0860

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ex per t advice

Ned Levitt, Senior Partner of Dickinson Wright LLP

What does the

franchise agreem

re veal about the Franchisor “Prospective franchisees need to have the Franchise Agreement reviewed by lawyers who really know franchising. The effort and expense will be well worth it, and will allow the prospective franchisee to gain insight into the franchisor that is hard to come by otherwise.”

Ned Levitt

A Franchise Agreement is a “franchisor’s document,” which is to say that its principle intent is to protect the interests of the franchisor and the system.

While there are important elements for franchisees in the Franchise Agreement, like the term, renewal rights, the territory, exclusivity, etc., the bulk of the franchise agreement deals with what franchisees must do, cannot do, or how they will suffer if they breach the agreement.

Unquestionably, a Franchise Agreement is a lopsided document, which is to be expected, as the franchisor needs to protect the important elements of the system for all concerned, including other franchisees in the system. Having

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said that, there are industry norms and standards to measure such “lopsidedness.”

To the extent and how a Franchise Agreement deviates from these norms and standards, can speak volumes about a franchisor, its intentions, and what it will be like being a franchisee of such a franchisor.

A poorly worded and disorganized Franchise Agreement means the franchisor has not made the commitment of time and money to learn the basics of franchising and hire a legal advisor who has expertise in franchising. As promising as the business being franchised may be, and as knowledgeable as the franchisor may be in that business, for franchisees to be successful and for the system to flourish the franchisor must become an expert in franchising as well, and surround themselves with the right professionals.

While defaults by the franchisee and their consequences will and should be dealt with in the franchise agreement, lack of adequate notice to cure the defaults and consequences that are too severe speak to a franchisor who is too tough minded and/ or insecure. The best franchisors are ones

that handle such matters firmly but fairly.

Too many provisions that call for excessive payments from franchisees for such things as support services, renewal fees, transfer fees, training fees, approval fees, etc., point to a franchisor who may be more interested in its bottom-line than the franchisees. Similarly, provisions that transfer all of the benefits of volume purchases of inventory and supplies by franchisees to the franchisor are indicative of a franchisor who may be simply greedy.

In healthy franchise systems the resale of franchises by franchisees to capitalize on success or because of life changes, is seen as a normal part of the growth and functioning of the system. Provisions in a Franchise Agreement which make such resale difficult, like the approval of the franchisor not only being required but also being in the sole discretion of the franchisor, may indicate that the franchisor is overly controlling.

Consistency in a franchise system is important and necessary. So, one would expect that franchisees would not be permitted to easily deviate from the

ment

ranchisor ?

system standards. On the other hand, extensive provisions in a Franchise Agreement, particularly a new system, requiring the franchisee to implement substantial changes to how the business is operated at the whim of the franchisor may be indicative of a franchisor who lacks confidence in what they have created.

Where franchisors have multiple corporations owning or controlling various aspects of the system, there is a concern that the franchisor is too insecure and is putting too much emphasis on protecting its assets from the possible failure of the system. This occurs when the system trademarks, premises leases, patents, etc. are owned by separate but related corporations. If the franchisor does not have faith in the system, what does that say about its commitment to the success and welfare of its franchisees?

There are many, many other areas of Franchise Agreements that help paint a picture of the thinking and attitudes of the franchisors that created them. To bring that picture into focus, prospective franchisees need to have the Franchise Agreement reviewed by lawyers who really know franchising. The effort and expense will be well worth it, and will allow the prospective franchisee to gain insight into the franchisor that is hard to come by otherwise.

Once that insight is obtained, then the prospective franchisee has several options.

The most obvious one is to pass on that franchise and look to another one to buy.

To be certain, the most unsatisfactory

agreements are usually produced by the most inexperienced franchisors, which is a dangerous category of franchisor from the prospective franchiseeâ&#x20AC;&#x2122;s perspective. However, these franchisors are the most likely to agree to changes in their agreements. The right changes to a Franchise Agreement, no matter what the franchisorâ&#x20AC;&#x2122;s character, motives, and resources are, can go a long way to minimizing the negative consequences for the franchisee down the road.

Canada, and Chair of its Franchise Law Group. He served as General Counsel to Canadian Franchise Association from 2000 to 2007 and, as a member of the Ontario Franchise Sector Working Team, was instrumental in the creation of Ontarioâ&#x20AC;&#x2122;s franchise legislation.

Among his many publications is Canadian Franchise Legislation published by Butterworths/Lexis Nexus.

Edward (Ned) Levitt is a senior partner of Dickinson Wright LLP, Toronto,

Website:www.dickinson-wright.com/ Email:nlevitt@dicksinsonwright.com.

For more information:

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f ra nchisor in depth

Ca rePatrol

Finding a

CarePa

â&#x20AC;&#x153;There are a lot of as out there that famil more importantly, fam

Chuck Bongiovanni

CarePatrol Franchise Systems, LLC, helps families find independent living, assisted living, and memory care communities for their loved ones. They are dedicated to providing families with the information needed to make educated decisions when researching the many living communities on the market.

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Playing the role of social worker, CarePatrol franchisees learn about all care requirements of patients before matching their needs with accommodating facilities.

Much like a realtor, CarePatrol takes families to visit the facilities that match the needs of the client. This gives families the opportunity to experience firsthand what the various homes have to offer before making a final decision, at no fee to the client.

Fit with

atrol

ssisted living communities lies don’t know about, but milies go out there without knowledge.”

Taking every possible means to ensure patients’ safety, CarePatrol practices thorough background checks on every facility it partners with, paying special attention to its care violation history.

CarePatrol has been in business for 20 years and franchising since 2009.

Last month, they acquired their biggest competitor, Assisted Transition. Today the company has 120 franchise partners, making it the largest company in the

senior care industry. “We’re estimated to grow to 150 franchisees by the end of 2014,” says Chuck Bongiovanni, founder and CEO of CarePatrol. “As we stand we’re currently ten times bigger than our next competitor out there.”

first place, see a beautiful chandelier and decide it’s the perfect home for their mother or father, they don’t realize that the faculty could have care violations and just because it’s clean and beautiful doesn’t mean they give good care.”

Bongiovanni built the business out of necessity. Previously employed as a hospital social worker, his job entailed visiting patients discharged from the hospital to ensure the transition to their home or assisted living facility was going well. One afternoon Bongiovanni received a call from his boss informing him that a patient was demanding to leave the care facility in which she had been placed. When Bongiovanni arrived at the Alzheimer’s facility, he expected to find a very confused woman. What he found instead surprised him. “The woman was 74 years old, clear as day, and demanding to leave considering everyone else there suffered from severe dementia.

A completely justifiable request,” he explains. When asking how she ended up in the home in the first place he was told the facility was the only one her daughter knew.

In addition to the lack of knowledge patients’ families usually have when it comes to searching various homes on the market, crisis situations often arise in which seniors require a home. “During these times families are under a lot of stress and pressure and so they don’t always make the best informed decisions.

CarePatrol’s mission is to ensure families find the right place, and with all of the research done for them ahead of time, it helps make the situation much smoother,” Bongiovanni says.

Recognizing the need for a service that could prevent these types of situations, Bongiovanni returned to the hospital, shared his idea with his colleagues, quit his job, and quickly began marketing CarePatrol. Within a few months, he sold 10 franchises. Today CarePatrol has 75 franchises, and the corporate team consists of 15 members, including Bongiovanni’s wife, Becky, as the Chief Operations Officer.

Equipped with the most responsive and educated senior placement and senior care management team in the nation, families feel comfort in knowing the CarePatrol team is working for them. “There are a lot of assisted living communities out there that families don’t know about, but more importantly, families go out there without knowledge,” Bongiovanni explains. “Often times they [families] will walk into the

Located in 30 states, CarePatrol is currently seeking outgoing franchisees that enjoy helping others and think quickly on their feet to further grow the business.

While no prior experience or education is necessary, some popular professions that have switched to the company include medical sales representatives, teachers and social workers.

CarePatrol’s franchising process begins with a webinar and filling out an application. The candidate will take a business skill test, send a completed FDD, and begin the due diligence process with existing franchisees. CarePatrol’s Discovery Day is optional depending on if either party requires more information about the other.

Once the paperwork is complete and the candidate has been approved as a franchisee, the individual undergoes a five-day training program in Phoenix, AZ. Next CarePatrol’s corporate team spends two days in the franchisee’s territory, during which time they assist the franchisee in connecting with surrounding facilities. After about a month in the field, corporate revisits the franchisee to help develop a marketing program for the

Franchising USA

f ra nchisor in depth

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f ra nchisor in depth

Ca rePatrol

new franchise partner. Ongoing support is available online, on DVD, at regional meetings and the annual convention.

“We probably over support,” laughs Bongiovanni, adding that franchisees benefit from 24/7 support.

CarePatrol’s franchise fee is $44,500 for a territory spanning a minimum of 100 assisted living facilities. The franchise fee also includes a unique lead program to help generate revenue. If a franchisee utilizes the lead program and places a patient in a facility corporate has referred, the royalties are a 70/30 split with the franchisee keeping 70 percent. Any business franchisees find themselves, they keep 100 percent of the revenue.

“What sets CarePatrol apart from similar companies in the industry is the comprehensive vetting of facilities and educating families of what they are getting into. It’s about making sure their loved ones are going to the safest places available,” says Bongiovanni. A large

Franchising USA

“It’s about making sure their loved ones are going to the safest places available.” part of CarePatrol’s marketing involves client and social worker education.

“The educational marketing is based on a pharmaceutical model,” he adds.

CarePatrol’s most recent development is called the enhanced marketing program and involves the corporate team travelling to the franchisee’s territory to take care of all their marketing for them.

CarePatrol has been awarded Franchise Business Review’s “Franchise Satisfaction Award” for four consecutive years, a recognition based solely on franchisee satisfaction. Proud of this achievement, Bongiovanni believes in the importance of healthy franchisee relationships.

“Knowing that our franchise partners feel that they made the right investment and that it is paying off for them in multiple dividends means a lot to our whole corporate team,” he says. Entrepreneur

ranked CarePatrol number 288 on their Top 500 listing of franchises in America, the Number One Assisted Living Placement franchise in America, and Number 13 in Top New Franchise Concepts. They have also been recognized as a military friendly franchise for the past five years.

CarePatrol is committed to outstanding quality and unparalleled customer service in all aspects of its operation. With the senior industry thriving, the multibillion dollar assisted living industry is growing vastly each year. “CarePatrol offers franchisees an excellent return on investment,” Bongiovanni says, adding, “But the best thing is getting to help people every day.”

For more information: Website: www.CarePatrol.com/

Page 27

Franchising USA

ex per t advice

Adam Heitzman, Co-Founder & Managing Partner at HigherVisibility

Top 7 Questions

You Need to Ask Yourself About SEO If You Own a Franchise Owning a franchise is going to add a new layer onto your online marketing efforts. You still have to worry about SEO, social media, outreach and relationship building, web design, etc., but you’ll have several locations and managers that will add a whole new dimension to your business.

Whether you want to believe it or not, owning a franchise is going to force you to ask yourself lots of questions that traditional business owners might never have to ask.

Consequently, this is where a lot of franchise managers make mistakes. It’s important to be informed of these questions and why they matter, so let’s get right to it.

Franchising USA

“Knowing who is going to manage your SEO and social accounts is crucial.”

7 Questions Franchise Owners Need to Ask Before Creating an Online Marketing Strategy The biggest difference between franchise companies and other companies is the idea that franchise companies have more people to work with and more people at a higher level. You have a corporate branch and then you have managers of each location.

To avoid any disorganization, you need to be asking yourselves a few questions when it comes to creating an online marketing strategy:

3. What is your budget and do you have a lot of time?

Okay, so this question isn’t really specific to franchise owners.

Nonetheless, you have to always consider your budget because SEO can get expensive.

Answer: For franchises, it’s usually more cost affective to manage SEO efforts from one national branch. I like to think of it as buying in bulk—hiring one agency for all of your locations is always less expensive than trying to hire locally for each individual branch.

Search Engine Optimization (SEO) Questions to Ask:

1. Do you have one website for your company, or several?

This is one of the first questions franchise owners need to ask, especially when thinking about SEO. If you have one website for your entire company you’re going to go about SEO differently than if you have a website for each location.

Answer: I recommend only having one website for your entire company unless each location offers vastly different products and/or services. If you have just one website, managing SEO at the national level makes the most sense.

2. If you have one website, do you have a location page?

Google recommends having a location page if you aren’t sure how many different websites you should have.

This allows you to keep one website so everything stays consistent, but it still gives you the freedom to show your different locations and possible specials for that location.

Answer: If you want to have a location page, I recommend checking out this video to learn how to make it happen.

The video showcases Matt Cutts, head of Google Webspam, talking about different countries, but the same logic applies to any company with multiple locations anywhere.

Adam Heitzman

4. Have you laid any prior SEO groundwork?

This is a question that you will surely need to ask if you just bought a franchise, but it’s also a good idea to think about this if you’re making a switch. If you’re deciding you want to manage SEO in a different way (have your managers help, setup new websites, etc.), thinking about your past SEO is crucial.

Answer: You want to make sure that if you do make a website change or decide to create new websites you’re not losing any PageRank or authority in the process. You will want to take a look at the SEO you’ve done in the past and then setup a 301 redirect, which you can learn about here. It’s also a good idea to do a link and content audit to get rid of the poor quality connections to your website (no sense in transferring that over).

the national level, or each individual location?

Social Media Questions to Ask:

6. Does your consumer base use a lot of social media for search?

This is different for franchise owners because social media is an easy outlet to have specific to each location. In other words, unlike SEO it sometimes makes sense to have different social accounts for each location. This is where you will likely be advertising for location-specific deals and it also helps Google keep your business straight when it comes to local search.

Answer: You will want to do some research and talk with your target audience about whether or not they are using social media to make decisions.

5. Who will be managing SEO for your franchise?

All of the questions above really lead you to this question. As you ask yourself all of these different things, you ultimately need to decide who will be managing the SEO for your franchise, someone or an agency at

Answer: It’s often most consistent and most organized if you have your national branch handle all the SEO for your website or websites. If you just have one additional location and work closely with the manager you can think about giving him/her that responsibility, but generally the former works best.

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ex per t advice

Adam Heitzman, Co-Founder & Managing Partner at HigherVisibility

Look at the data available from each social network or turn to tools such as Sprout Social or Spredfast. If you find that your audience isn’t overly active, it might make more sense to have just one account.

Also an extra tip: Don’t forget to consider legal issues. If your business works in an industry where you deal with a lot of confidential information, having lots of social accounts might not be the most secure idea.

7. Do your products vary from location to location?

This is another huge question for franchise owners. If you have a franchise but some of your locations offer a completely different vibe or different products, you’re going to want

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to split up your social media.

Answer: Most companies don’t have this problem because franchises are kept generally the same. However if you do run into this issue, you should have different social media accounts and almost treat each of your branches like its own little business. If you simply offer different specials from time to time, a location page discussed above is best and keeps things more organized.

The Takeaway for Franchise Owners A franchise owner always has to think about growth and organization. Knowing who is going to manage your SEO and social accounts is crucial. You’ll have a lot of different managers wanting to get involved, so it’s important you ask the

questions above and determine how you want your online marketing process to work so that you can give orders. You

have to think of everything so things don’t spiral out of control!

Are you a franchise owner who has had to make tough decisions regarding management and an online marketing strategy? What worked for you? Did you

ever have any trouble because you weren’t prepared? Let us know your stories in the comments below.

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/

“If you have one website for your entire company you’re going to go about SEO differently than if you have a website for each location.”

Page 31

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Or call 800-553-5776 to talk with a Franchise Licensing Advisor 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. 42569

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M u r phy B usiness & Fina ncial C or poration

Strength in Numbers: Murphy Business Creates Collaborative Culture to Benefit Brand’s Franchisees and Regional De velopers

Check your egos at the door.

It’s not a mandate you’ll ever hear Roger Murphy say, but it does define a key component of Murphy Business & Financial Corporation’s (Murphy Business) ascent to the top of North America’s business broker industry. In an arena where buying and selling businesses comes with a tremendous amount of emotion, Murphy Business brings an approach to deal making that is redefining business brokerage.

“Satisfying our clients’ needs is priority number one,” said Roger Murphy, President and CEO of Murphy Business & Financial Corporation, a full-service business brokerage firm with franchise offices nationwide. “Our efforts are always centered on the goals of our client, even if that means we co-broker the deal. Our unique business listing system (BLS) gives

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“I have surrounded myself with an amazing group of talented professionals at our home office and around the country. It takes a village…and I’m happy to be part of this one.” all of our business brokers access to all of the companies we represent for sale.

This mentality has served us well and it’s why we have so many satisfied clients and happy Murphy franchisees. We get quality deals done, period.”

The deep-seeded selflessness that emanates throughout Murphy Business has sent ripples now being felt in all corners of North America. With buzz building, Murphy Business has added 20 franchise and two regional developer offices in the past two years, and projects even more aggressive expansion in 2014, forecasting 18 to 24 new offices. Currently, the company’s regional developer and franchisee footprint stretches coast to coast throughout the United States and Canada. There are more than 160 franchisees in the Murphy Business system and a total of nearly 300 brokers.

The successful strategic expansion

has occurred over an eight-year span, beginning with the company’s foray into franchising in 2006.

“We’re attracting individuals who come from mid-management to C-level positions in the corporate world, as well as former business owners. This is a franchise opportunity for them to leverage their professional skills,” added Murphy, who notes that the company is focused on continued growth in its existing markets, and opening new markets in key states including Connecticut, Illinois, Indiana and Pennsylvania, among others. “Given their professional backgrounds, our franchisees understand the benefits of being part of a network that fosters collaboration,” he said.

Murphy Business’ cooperative culture is a reflection on Murphy himself. A proven business leader who was part

of a team that successfully built one of the print publishing worldâ&#x20AC;&#x2122;s largest magazine conglomerates through startups, strategic acquisitions and sales, Murphy entered business brokering in the early 1990s only to find it lacking true structure and training programs.

With years of deal making under his belt, Murphy has perfected the art of brokering business deals in many industries.

His success caught the attention of other brokers who inquired about his business model. Instead of turning his back to the competition, Murphy welcomed their interest and began training other brokers.

Many of those he trained began working

under him as brokers in their own communities. â&#x20AC;&#x153;It was ugly out there. There were some guidebooks and self-paced training programs, but I quickly saw that brokers need more personal attention and some nurturing as they get started, and in the years that follow. We developed a complete back office support system so that our brokers would spend more of their time with their clients,â&#x20AC;? said Murphy.

Murphy grew his business into the largest independent business brokerage firm in Florida. As he fielded more calls from interested parties outside of Florida seeking to join his business, Murphy

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made the decision to begin franchising and added seasoned franchise talent around him. Eight years into the franchise initiative, Murphy shares the same compassionate approach that he had when he first began training business brokers.

“I have surrounded myself with an amazing group of talented professionals at our home office and around the country. It takes a village…and I’m happy to be part of this one.”

As he looks at today’s marketplace, Murphy eyes pent-up demand for business brokerage services. Individuals reluctant to sell their business during the past three-plus years due to sinking prices are now putting their companies on the market. And, with business friendly tax laws expiring, the time to sell is quickly approaching. Plus, extremely high unemployment rates have sent many former corporate refugees on a path to buy a business or franchise as their best option for earning a living.

Murphy Business offers entrepreneurs both regional developer and franchisee operating models. The home office supports both groups and their agents with extensive training, along with initial and ongoing marketing efforts that leave Murphy Business owners to focus on the most important part of their business – growing it.

Murphy Business is a low overhead

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“We’re attracting individuals who come from midmanagement to C-level positions in the corporate world, as well as former business owners.” opportunity that offers tremendous worklife flexibility as well as scalability. The model allows a franchisee the option of operating as a home-based business or growing an office by adding a team of agents. Franchise fees range from $35,000 to $50,000 and regional developer fees range from $75,000 to $150,000 depending on territory size.

Clearwater, Florida-based Murphy Business & Financial Corporation is a fullservice business brokerage firm facilitating business sales, purchases, consulting, valuations, mergers and acquisitions.

Closing deals at a higher ratio than the business brokerage industry average, several accolades have been bestowed upon the company including appearing as one of the “Top New Franchises” in Entrepreneur’s annual rankings, a “Top 50 in Franchise Satisfaction” for five years running, and as a “Top 50 Franchise” according to Franchise Business Review.

Roger Murphy- President and CEO of Murphy Business & Financial Corporation: Roger Murphy entered business brokering in the early 1990s only to find it lacking true structure and training

programs. With years of deal making under his belt, Murphy taught himself how to broker business deals in other industries.

Murphy grew his business into the largest independent business brokerage firm in Florida. As he fielded more calls from interested parties outside of Florida seeking to join his business, Murphy decided to begin franchising.

Less than 10 years into the franchise initiative, Murphy shares the same compassionate approach that he had when he first began training business brokers.

For more information: W: www.murphyfranchise.com E: franchisesales@murphybusiness.com

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Resale Reborn

“Working in what ow was a trul that momen

How One Kid to Kid and Uptown Cheapskate Franchisee Manages Multiple Locations and a Family.

When you first meet Shannon Unger, you immediately feel her positive energy and excitement for life.

As a franchise owner of multiple stores and a mother of five children, ages nine thru 24, Unger is truly an inspiration. Her great attitude and strong dedication to both business and family have been staples at every stage of her professional and personal life.

Originally from Southern California, Unger and her husband moved to Evans, Georgia in 1996 for her husband’s work with John Deere. Unger was working fulltime in Corporate Sales and Marketing, frequently putting in more than 80 hours per week. After the birth of her fifth child, Unger wanted to slow down and leave the corporate world forever. She dreamed of having a business of her own with freedom to manage the way she wanted, on her own schedule, and with the ability to make money for herself rather than for someone else. That’s when she began to consider franchising.

The franchise model interested Unger because of the support available to franchisees. Unger’s corporate background of over 20 years provided a lot of sales and marketing knowledge but she felt she lacked experience in running a business and managing back office tasks such as accounting. She then began her search for

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a franchise opportunity that suited her best.

my staff and the way they care about our customers.”

In 2005, Unger began researching franchises geared toward children. “As a mom of five, I felt I had a lot of experience in that area,” joked Unger. She discovered Kid to Kid, an international franchise that buys and resells new and gently used children’s clothes, toys, baby gear, and maternity wear and became interested in the resale concept. “There was only one Kid to Kid in Georgia at the time.

I stopped by and spoke with the owner.

I told him I was interested in opening a franchise location and asked if I could work in his store for free over the weekend to get a feel for the place. He agreed, after all, it was free labor! Working in the store and witnessing first-hand what owning a Kid to Kid store was all about was a truly invaluable experience. I knew from that moment that this was what I wanted to do,” she said.

Happy with the success of her Kid to Kid store, Unger wasn’t thinking about opening more than one franchise location.

However, a discussion three years later altered that thought. “In 2009, I was at the franchise’s annual meeting and speaking with Shauna Sloan, Founder of Kid to Kid. She was talking about their new franchise concept, Uptown Cheapskate, which buys and resells name brand, fashionable clothes and accessories for teens and young adults. I instantly became interested.”

Within two months she had signed up to open her first Kid to Kid store in Evans, Georgia. In February of 2006, Unger officially opened her doors.

Unger put in many long hours during that first year. She remembers telling her husband to give her 18 months to get her store up and running profitably, and then she would scale back her time to working ‘mommy hours’ while her children were in school. It ended up only taking her nine months. “I put in long hours getting the store established and making sure my staff was fully trained,” said Unger. “My store is successful because of the dedication of

Unger decided she wanted to open an Uptown Cheapskate and became the second franchisee to sign up. Then on an early morning in February 2010, everything changed for Unger and her family. Unger’s husband of 13 years suddenly passed away from a heart attack.

“When my husband died, everything just stopped. I ended up taking almost an entire year off to be with my family and to get back on my feet.”

Toward the end of 2010, Unger re-emerged with renewed energy and focus, and began the search for a location for her second store, Uptown Cheapskate.

“I found a great location that was fairly inexpensive that would accommodate both Kid to Kid and Uptown Cheapskate, side by side. I really felt that having both stores next to each other would be beneficial even though the clientele is different.

Kid to Kid focuses on moms with young

in the store and witnessing first-hand wning a Kid to Kid store was all about ly invaluable experience. I knew from nt that this was what I wanted to do.” children and Uptown Cheapskate caters to fashion-conscious teens and adults, yet there is significant cross-over. We have found that many mothers who buy and sell at Kid to Kid end up shopping at Uptown Cheapskate for themselves or for their older children.”

In February 2011, Unger eventually moved her Kid to Kid store to the new Evans, Georgia location and opened her first Uptown Cheapskate next to it two months later. Her theory about the synergy of sideby-side stores proved correct. Sales for Kid to Kid increased and there was a huge amount of cross-shopping. This strategic move helped Unger take home the coveted 2013 Store of the Year award for Uptown Cheapskate, and the 2013 Top Performer for Used Sales award for Kid to Kid. Falling in love with the high energy and cool vibe of Uptown Cheapskate, Unger wanted to only focus on opening more Uptown Cheapskate locations. However, because of Unger’s success with her current stores, she received a call from BaseCamp Franchising, parent company of Kid to Kid and Uptown Cheapskate, asking if she would be interested in taking over ownership of a struggling Kid to Kid store in Aiken, South Carolina. Unable to turn down the offer, Unger agreed and opened her second Kid to Kid location, third store total, in January 2013.

Later in 2013, Unger spotted another great location in Augusta, Georgia that could house both an Uptown Cheapskate and a Kid to Kid store. She went on to open her third Kid to Kid in December 2013 and her second Uptown Cheapskate in January 2014, making her a franchise owner of five stores all together. Not one to slow down, Unger is now looking at opening two more Uptown Cheapskate stores in 2014.

Along with all the successes experienced with owning five stores, Unger says the best part of being a Kid to Kid and

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BaseCa mp Fra nchising

“My store is successful because of the dedication of my staff and the way they care about our customers.”

franchise owner, I get to set my own hours. If I have to leave early to attend my daughter’s school performance, I can.

When I was in the corporate world, I was a workaholic.

Now, I still work hard but rarely do I work more than 30 hours a week, allowing me to spend more time with my family and fiancé,” Unger proudly admitted.

For those thinking about opening a Kid to Kid or Uptown Cheapskate franchise, Unger says one must be willing to put in the time and effort at the beginning, and be present in their stores training and supporting their staff. Only after a store is established and the staff is fully trained can an owner scale back a bit.

Uptown Cheapskate franchise owner is she gets to do what she loves, while being there for her family. “I love my life! I get to work with great people and help out the community at the same time. It’s fun to provide a service for families and individuals who are looking for a great deal on fashionable clothes.

And the items we don’t sell we donate to local charities. It just feels good. As a

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BaseCamp Franchising has assisted Unger from finding her first location to providing ongoing operational support to all her stores. “When I was new to franchising the BaseCamp Franchising staff helped find my first location, provided bookkeeping assistance, offered extensive training, and assisted with funding, which can sometimes be the toughest part when you are first starting out,” she explains.

BaseCamp Franchising provides storeowners access to comparative reports so owners can see how well other stores

are performing. “The BaseCamp reports are very transparent and open. We all know how the other stores are doing, which helps us benchmark our own store as well as cheer each other on or offer support. There is definitely some goodnatured competition going on and I think it helps us all.”

Owning several stores comes with its own set of benefits and challenges. “The systems set by BaseCamp make owning multiple stores feasible,” says Unger. “Plus, by owning several locations, I’m providing many jobs to those in my community and that’s really important to me.”

One of the biggest challenges in owning multiple franchise locations is time management. “My biggest challenge is making sure I give each store the time and attention they need,” Unger confided. “I feel that my strengths as a business owner include my ability to calm everyone down and prioritize what’s important. I’m a very positive person by nature and act as a cheerleader for my stores. I notice that when I don’t spend enough time in each store, our sales suffer. My goal this year is to spend more time with each of my stores, giving them the attention they deserve.”

“Overall the thing that I enjoy the most about being a Kid to Kid and Uptown Cheapskate owner is the friendship and support from the other store owners.

These owners are great people who are just trying to do what’s best for them and their family. It’s so important to have that connection because you never feel alone.

You just can’t put a price on that.”

For more information: Website: www.basecampfranchising.com/USA Phone: 801-359-0071 ext. 101

Page 39 13

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have your say

Pr im rose Schools

What is More Important than Investing in

Tomorrow’s Workforce and Society?

In response to the nationwide crisis in early childhood education, the private childcare sector is flourishing.

Industry research firm IBISWorld projects that the $46.6 billion childcare industry will continue to grow in 2014 and beyond as the economy recovers, unemployment decreases, and more parents reenter the workforce.

For more than 30 years, Primrose Schools®, an Atlanta-based educational preschool provider, has been a preeminent brand, pushing for excellence and innovation. Now more than ever, Primrose is perfectly situated to address the growing need for high-quality education nationwide. Jo Kirchner, President and CEO, has shepherded the company from its humble beginnings with four schools to the national leader it is today with more than 275 franchised locations across 19 states serving more than 60,000 children and families.

The demand for high-quality educational childcare has never been higher in this country. More and more women are in the workforce, creating dual-income families that require both parents to juggle careers

“The brains of young children develop faster than at any other time in life, and what happens in these very early years lays a critical foundation for future academic, work and life success.”

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while rearing small children. Layer this trend on top of an increasingly competitive global economy, and it’s easy to see why business and political leaders across the U.S. are becoming more aware of the important connection between the first five years and the development of the future workforce. They are catching up to what those of us in early childhood have long understood: the vital connection between the first five years of a child’s life, and that child’s future ability to succeed in school and beyond. The brains of young children develop faster than at any other time in life, and what happens in these very early years lays a critical foundation for future academic, work and life success. In 2010, McKinsey & Company conducted research on education reform and found that highquality preschool does more for a child’s chances of success in school and life than any other education intervention. Without access to developmentally-appropriate daily stimulation, children run the very real risk of starting elementary school behind - a position from which it’s difficult to ever catch up in today’s fast-paced world.

“System revenue at Primrose was at an all-time high in 2013 and included the strongest quarter on record in our 32-year history.”

The Primrose Experience Primrose continues to succeed as the leader in educational child care because we have taken the best from successful early childhood education philosophies and blended them into a Balanced Learning® curriculum that emphasizes early language and math skills right alongside character development.

Everything we do in our classrooms is carefully designed to support ageappropriate social, emotional, cognitive, creative and physical development, or what we refer to as Active Minds, Healthy Bodies and Happy Hearts®. By partnering with and empowering parents, we also help emphasize that learning doesn’t have to stop when the school day is over.

We put a special emphasis on character development, an all-too-often overlooked aspect of early childhood development that research strongly supports as critically important. These life and executive functioning skills, which include such foundationally important skills as communication, teamwork, adaptability, delayed gratification, self-control, grit, and perseverance, are the same 21st century skills today’s employers find are lacking in many emerging college graduates today.

Driven by a firm commitment to consistently provide high-quality, developmentally appropriate early childhood education, Primrose was the first early childhood education organization in the country to receive AdvancED Corporation Systems Accreditation under the new Standards for Quality Early Learning Schools. This accreditation ensures all of ours schools meet the highest quality standards and shows we are continually improving student learning. We are proud that our company was a trailblazer that helped AdvancED set the standards by which all private preschools are now measured around the globe.

In addition to our primary focus on early childhood education, we also pride ourselves in our franchise owners’ strong partnership with families - providing quality care and extending learning opportunities at home through our many parent communication avenues, from newsletters and emails to parent conferences and school events.

The Changing Face of Primrose Franchise Owners Each school is independently owned and operated by a franchise owner, who provides leadership and acts as CEO of their school(s), recruiting a strong management team to help hire staff and oversee daily operations.

As the demand for high-quality educational childcare continues to rise, we’re increasingly seeing Primrose parents take action into their own hands. Based on their own personal experiences with the brand, more and more Primrose parents and even grandparents are expressing interest in investing in early childhood education and inquiring about how to own a Primrose franchise. In fact, in what we believe is a true testament to both our educational and business models and our strong partnership with parents, 73 percent of current franchise owners were once parents of a Primrose school

Adela and Victor Taboada

student. Another seven percent knew a child who attended or personally worked in a Primrose school. They recognize that it can be both a highly rewarding and lucrative business that provides them better job security through business ownership, more time with their families, and a greater opportunity to positively impact their local communities.

Another development we’ve witnessed over the past 30-plus years is a greater diversity in the ethnicity and professional backgrounds of our franchise owners.

Many have transitioned from highgrowth industries such as tech services, international business, healthcare, and professional sports. Adela and Victor Taboada, franchise owners of the Primrose School of Ashburn in Ashburn, VA., are prime examples of both trends. Victor

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Pr im rose Schools

previously ran a successful industrial manufacturing company that he founded in Venezuela, then transitioned to the real estate market in the U.S. before deciding to own and operate a Primrose School with his wife, Adela.

An additional trend is the evolution of single-unit franchise owners who invest and become multi-unit franchise owners. In fact, nearly one in four Primrose franchise owners own multiple schools, representing an industry high.

Franchise owners Noel and Pratiksha Rigley own multiple schools throughout Texas, including the Primrose School of Firewheel; Primrose School of Preston in downtown Dallas; Primrose School of Plano at Deerfield; and they will soon open Primrose School of Frisco West in early spring 2014.

Expanding the Business and Building Partnerships System revenue at Primrose was at an all-time high in 2013 and included the strongest quarter on record in our 32year history. We opened 20 schools and awarded 44 franchising agreements – an increase of 12 percent and 47 percent, respectively, over the previous year.

Between 2010 and 2012 we experienced strong revenue growth and were up nearly 50 percent in new franchise awards year over year. These strong system results fueled our current aggressive development plans.

As part of these plans, we recently expanded our presence coast-to-coast with the opening of our first California school in Pleasanton. We’ve identified expansion communities in four key California markets that have a high demand for quality child care: San Francisco, Los Angeles, San Diego and San Jose. Each new California Primrose school will positively impact the state’s economy by creating approximately 25 to 30 new jobs and awarding approximately two million to two and a half million dollars in local development contracts.

However, California isn’t the only state in our growth strategy. We’ve also identified communities in Boston, Chicago, D.C/

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Jo Kirchner is the President and CEO of Primrose Schools

Northern Virginia, Minnesota and New Jersey where we expect to see Primrose schools soon. To continue this upward momentum, we plan to award 40 additional franchises and open 25 new schools – including our 300th school in 2014. By 2020, we hope to have opened our 500th school.

As the nation focuses more on the early development of young children and continues to call for higher quality education, Primrose will continue to answer through our expansion and through our advocacy for at-risk children whose families cannot afford to attend our schools. We’ve built strategic partnerships with organizations like AdvancED, Reach Out and Read, ReadyNation, and Save the Children to collaboratively help close the achievement gap for disadvantaged children and families across the country.

According to the National Institute for Early Education Research (NIEER), 43 percent of nationwide pre-school children enrolled in programs meet less than

half of the quality standard benchmarks – a startling figure that has Primrose committed to sharing our proven success formula through our involvement with these groups.

There has never been a better time to invest in early childhood education. As the old saying goes, tiny acorns can grow up to be mighty oaks with the right blend of care and attention. What could be more rewarding than planting the seeds for our future and watching them flourish?

Jo Kirchner is the President and CEO of Primrose Schools®, a national accredited private preschool that offers premier educational child care to children ages six weeks to five years. Jo is an active board member of AdvancED, Reach Out and Read, ReadyNation and also on the Executive Committee of the Early Care and Education Consortium.

For more information: Website: www.primroseschools.com/

health & beauty Page 43

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Feel Good with Fabulous Franchising

H ealth and B eauty feature

Featu re

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Health &Beauty If there are two things that most American’s are concerned with; it’s their health and appearance. As individuals thrive on being health-conscious and looking good, each health, year. fitness, and beauty franchises are taking advantage American Obesity on the Rise of these trends.

Thisthemeans big quicker Perhaps only thing growing thanthose the healthwilling and beautyto industry opportunities for take the in United States is the waistlines of plunge and open their own business.

Americans.

According the National Centeroffers for the While starting a new brand can be to difficult, franchising Health Statistics, in 2010 over 78 million option of owning your own business with the added advantage of U.S. adults andname aboutand 12.5 million children utilizing an already established brand reputation. and adolescents were obese. Recent reports have also projected that by 2030 half of all adults (115 million adults) in the United States will be obese. These shocking stats show that obesity rates among adults have doubled since the early 1970s.

“There’s no better time to get on board than 2014, as industry profits are poised to hit $29.1 billion by 2016 after growing an average of 5.3 While it is one thing to look at obesity in percent each year.” terms of beauty, the health factors behind

these numbers is even more dreadful.

According to the U.S. Department of Health and Human Services, obesity has Why Choose the Health and Beauty Industry? personal financial and national economic implications as well.

Those who are aobese The category of health, fitness, and beauty franchises cover vast have thatsegments: are $1,429fitness, more market, but in general can bemedical divided costs into two which focuses on exercise, weightweight loss, and thanhealth, those and of normal on beauty, average which focuses on appearance.

Fitness franchises include gyms, (roughly 42 percent higher), and annual many of which specialize in specific such asobesity the martial arts, direct costs ofareas childhood are $14.3 alternative medicines, dieting, billion.and supplements. Beauty franchises include spas, salons, barbershops, and tanning locations, many of which boost sales by selling products as well as services.

According to Franchise Help Holdings LLC, there’s no better time to get on board than 2014, as industry profits are poised to hit $29.1 billion by 2016 after growing an average of 5.3 percent

“In 2012, the global health and fitness club industry generated estimated revenues of nearly 76 billion U.S. dollars.” some of the common methods used.

Weber’s analysis states, “The industry [weight loss programs] contains about 1,300 companies with a combined annual revenue of about two billion. Unlike fitness centers, this industry is very concentrated with the largest fifty firms controlling eighty percent of the market.”

In 2007 over a quarter of Americans were on diets, about two thirds being women.

For this reason the weight loss market is generally geared towards women, but there is room for growth in marketing towards men, as well as families as many practitioners believe you can’t treat a child with obesity without treating the entire family.

A common trend among healthcare practitioners is to prescribe exercise to patients. These written prescriptions prompt patients to join a gym and once they see the health benefits of it, they tend to stick with it and renew their gym memberships even after the prescription has expired. As people flock to gyms and dive into weight loss programs, now is the perfect time to start a fitness franchise.

Fitness Centers and Weight Loss Programs Coming into the spotlight when running and aerobics became popular in the 1970s and 80s, the fitness center industry saw an enormous period of growth throughout the 90s and into the 2000s. Kicking off the century with 16,938 clubs, by January 2008 the number of clubs grew to 29,636.

Offering exercise equipment from free

weights to treadmills, today many gym franchises have diversified their range of services with pools and spas, basketball and racquetball courts, personal training, massages, and classes in areas like aerobics and yoga.

Today 41 million Americans are members of a health club, half of which belong to a commercial club, with the others divided between non-profit clubs such as the YMCA and miscellaneous for-profit clubs including corporate clubs, country clubs, and spas. According to a study conducted

by Analyst Andrew Weber, sixteen million people from this group attended health clubs on more than 100 days in a year.

Looking to the weight loss program market, Americans have no shortage to pick from when it comes to slimming down. Diets, exercise, surgery, counseling, drugs, and natural supplements are just

Combining popular sub-fields within the weight loss industry, many franchises offer customized nutrition and exercise plans, supplements, counseling, and pre-made meals as the key elements, while others take a pharmaceutical based approach.

In 2011, the North American health and fitness club industry generated estimated revenues of 25.47 billion U.S. dollars, and in 2012, the global health and fitness club industry generated estimated revenues of nearly 76 billion U.S. dollars. This year Entrepreneur recognized a number of fitness centers in its 2014 Franchise 500 list. This list is based on a business’ financial strength and stability, growth rate, and size of the system.

As now is the perfect time to invest in a fitness center, be sure to look for openings in a niche market such as a 24-hour gym or a single sex gym that you can fill. Gyms are everywhere but with good marketing and a franchise to stand behind, yours could have a distinct advantage and be the new hot spot.

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H ealth and B eauty feature

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H ealth and B eauty feature

Featu re An Aging Population While the trend of Americans getting larger may slow down or even reverse itself someday, one thing that is inevitable is that we will all continue to age and an aging population is a population that will continue to need increased health services.

A trend in the industry is the change in demographics of those who use fitness centers. Where membership used to be concentrated fairly highly on the 18 to 34 year old range, popularity has spread out over all age groups, increasing particularly with amongst Americans over 50, children, and teenagers. Appealing to America’s aging demographic is essential for gym franchises. One way to appeal to this audience is to add amenities such as health maintenance and monitoring such as checks for blood sugar, blood pressure, and bone density.

“Many people now treat their beauty ritual as an escape from the hustle of the information age, whether it’s a few minutes spoiling oneself with a high-end product or a full day at a luxury spa.”

Fueled in part by America’s aging population is the rise of alternative or complementary healthcare. This includes services such as; acupuncture, massage therapy, aromatherapy, chiropractic services, natural health products, reflexology, reiki, yoga, and more.

According to the U.S. Census Bureau projections, a substantial increase in the number of older people will occur during the 2010 to 2030 period, after the first Baby Boomers turned 65 in 2011. The older population in 2030 is projected to be twice as large as in 2000, growing from 35 million to 72 million and representing nearly 20 percent of the total U.S. population at the latter date.

Needless to say that’s a lot of people who will either need increased health services in the coming years, or that do today. A major benefit of investing in a franchise in this sector is knowing you will always have a steady customer base.

The Beauty Industry If people are healthy, they also want to look good to match how they feel.

You may think beauty only pertains to women, but men are getting in on the self-

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pampering, too. While beauty industry opportunities can be broadly separated between products and services, many providers offer both. Within both products and services, however, exist a wide range of business models based on target market, production processes, and location.

For example, men’s “beauty” products have been touted as the next big thing in the beauty industry. While men have been targeted for body sprays, specialty hair products, and shower gels for some time now, a new batch of face lotions designed to cover aesthetics ranging from moisturizing skin to actual make-up like “guyliner” and “manscara,” is still a new trend. Many male-focused salon franchises varying from the basic barbershop to a relaxed grooming experience have also been springing up to complement the traditionally female-focused salon offerings.

While the market is young as it pertains to men’s beauty products, the potential is huge and getting in on it early may prove to be extremely lucrative. According to research from Global Industry Analysts,

“According to research from Global Industry Analysts, the male grooming products industry is globally expected to generate more than $33 billion in revenue by 2015.” the male grooming products industry is globally expected to generate more than $33 billion in revenue by 2015. Product innovation, an expanding middle-class consumer base, and evolving consumer trends are all factors that are fuelling market growth in this sector.

But we mustn’t forget the ladies. Looking good is something that never goes out of style and, in fact, the beauty industry is said to be relatively recession proof, since women tend not to skimp on their hair (especially in a recession when people strive to look their best when job hunting).

So there’s really no bad time to get into the business of helping people look fabulous.

Where to buy in? From exfoliating soaps and color-protecting shampoos to antiwrinkle creams and tanning sprays, the beauty industry provides us with choices galore to keep us looking younger and healthier. With these choices, come

franchise opportunities. “Cosmetics exist for every style and taste, as well as every skin tone, texture and even allergy. Rows of toothpaste stretch off into the distance at the local retail outlet, and it is no longer a choice only of brand, but between whitening, tartar protection, flavor, packaging styles, and more! And a similar story is told in the aisles for perfume, deodorant and hair coloring. Certain businesses also distinguish themselves through manufacturing processes such as using all natural ingredients or a refusal to use animal testing on products,” says Matt Sena in Franchise Help’s 2014 Analysis.

Encompassing far more than cosmetics and skin care products, today’s beauty industry offers a wide range of services and products to help us put our best face forward, as well as hair styling and hair removal, nail and tanning salons, massage parlors, shower and shaving products, and more.

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H ealth and B eauty feature

Featu re

“Particularly fast growing market sections included color cosmetics, sun care, and hair care.”

According to a recent report by companiesandmarkets.com, the U.S. ‘Super Premium’ beauty market grew into an industry worth almost seven billion between 2008 and 2013. Particularly fast growing market sections included color cosmetics, sun care, and hair care.

Taking a look at the hair service industry, franchises in this sector differentiate between offerings based on price, location, and target markets. For example, while some franchises set out to target the inexpensive, fast cut market, others focus on providing a luxury spa experience.

“Many people now treat their beauty ritual as an escape from the hustle of the information age, whether it’s a few minutes spoiling oneself with a high-end product or a full day at a luxury spa,” Sena says. “But our concern with our appearance is hardly anything new; indeed the beauty industry has been expanding and growing for all of recorded history.

For the interested entrepreneur this continuing growth and evolution offers a diverse menu of opportunity.”

From product creation, to industry growth and niche markets, the beauty industry offers a diverse set of profitable franchising opportunities. Beauty franchises exist with dozens of strategies reaching all types of consumers; after all beauty lies within the eye of the beholder.

Time to Franchise While jumping into the franchise market isn’t necessarily simple, it could be easier than starting your own business. Still however, it will still take a lot work on your part. The advantages of franchising are that you can tap into an established brand’s name recognition instantly and can forego the difficult task of establishing a business that you start from scratch. You also have the advantage of an operating system that is already in place so you

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can essentially just grab the “owner’s manual” and start running your business.

Franchisors will also share market research and other vital information with their franchisees so you won’t have to worry about doing that legwork, either.

A good place to start if you’re thinking about starting a franchise is the International Franchise Association (IFA), which represents and advocates for the franchising community in the United States. You can find the IFA online at www.franchise.org. As they are dedicated the entire concept of franchising, the IFA will help you with its available resources.

It is also important to think through the process carefully, assess yourself, and your motivations. Read as much as you can on the subject so you fully understand what it is you’re getting into, and contact existing franchisees to find out more about their experiences as franchisees.

Once you find a franchise that you’re satisfied with, Franchising USA’s Expert Advice articles offers tips from industry experts on researching the franchisor, reviewing the franchise agreement, signing

leasing, making deposits, the works!

As obesity in America shows no sign of slowing down and the beauty industry booms, there is promise for the continued future growth and success of both these franchise industries. So if you’re passionate about health, fitness and beauty and you have a real drive to succeed, you’ll have a successful franchise in no time.

For more information on Health & Beauty franchises as featured in this issue: Dr. G’s Weightloss and Wellness Clinics..............................10 Total Woman Gym + Spa........... 1 Hypoxi...................................................27 LaVida.................................................. 58

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e t a t s e l rea Want to learn more about trends and growth industries in franchising?

Need help making the big decisions?

Every edition we feature advice from the experts to help you on your franchising journey.

Find out more about Real Estate Franchises in the April edition of Franchising USA. For interactive editorial and advertising solutions, please contact Jenn Dean, Jenn@cgbpublishing.com.

250-590-7116 Franchising USA

ex per t advice

George Knauf, Senior Franchise Business Advisor, FranChoice

Start Small, but Think Big…

Really big!

The strategy you employ will be one of the key determinants of your result.

There is an old saying: “How do you eat an elephant? One bite at a time.” A similar approach works well when you are trying to build a business portfolio. Know what your goal is and start working your way there, one manageable step at a time.

“The key for all candidates is to start where you are, with what you have, and continuously focus on growing your business.”

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Many of our candidates come from successful careers as employees in the corporate world and are sometimes frustrated when they look at starting a business with one, or even a handful of units or territories. They want to go from candidate to franchise magnate overnight.

Amazingly, some of those candidates never start a business because they can’t start at the top. I wonder if they started as the CEO in their first job!

Page 51

————————————�����———————————— EXPERIENCE�THE�EXHILARATION�AND�FREEDOM�OF�OWNING�YOUR�OWN�RESTAURANT��

Russo’s Coal-fired Italian Kitchen concept grows more sales per sq/� then our competitors in today’s market place by using fresh, premium ingredients, authentic Italian recipes and old world charm and hospitality. Find out how we set ourselves far apart from other Italian restaurants and let us share with you our food, our passion, and above all, the secrets to our success. For more information, call 855.978.7767 or visit RussoRestaurants.com.

��&�

$1,057,516.93 $216,253.59 AVERAGE�ANNUAL�GROSS�SALES

OR��������AVERAGE�FOOD�COSTS

$251,896.16 OR��������AVERAGE�PRE�TAX� CASH�FLOW

These figures represent the average restaurant revenue of four (4) domestic Company-operated Russo’s New York Pizzeria locations of various designs and sizes for our fiscal year ended December 31, 2012, along with average Food Costs and Pre-Tax Cash Flows for the four (4) domestic Company-operated Russo’s New York Pizzeria outlets only. Actual results could vary substantially from unit to unit and Franchisor cannot estimate the results of any particular franchise. In arriving at our Food Cost calculation, the food costs at the Company-operated Russo’s New York Pizzeria Westheimer location were reduced by 4% because that is the Corporate Training store for Franchisees. The Average Pre-Tax Cash flow does not include a royalty fee because these locations are Company-operated. The expenses incurred by a franchised restaurant will include our standard royalty fee. Because Russo’s operates 5 Company-operated Restaurants (4 Russo’s New York Pizzeria and 1 Russo’s Coal-Fired Italian Kitchen locations), we are able to achieve certain economies of scale and operational efficiencies that may not be available to a Franchisee operating one Restaurant, as is the case for the typical Franchisee. However, the income from our Company-operated Restaurants ultimately must bear costs of our management team and other corporate office overhead. These costs are not reflected in the foregoing cash flow data, which reflect operational cash flows at the Restaurant level, excluding the burden of corporate overhead. We are also able to obtain economies of scale in other areas, such as insurance, that may not be available to Franchisees. Because of the size of our operations, insurance risks are spread over multiple Restaurants, which enables us to bargain for lower group-rate insurance costs. We are also able to use the size of our operations to achieve volume discounts and other cost savings based on our purchasing power. These cost savings, in areas including telephone services and marketing, may not be available to Franchisees operating on a smaller scale. CAUTION – AS A CONSEQUENCE OF THE FACTORS DISCUSSED ABOVE, AND OTHER VARIABLES THAT WE CANNOT ACCURATELY PREDICT, A NEW FRANCHISEE’S INDIVIDUAL FINANCIAL RESULTS ARE LIKELY TO DIFFER FROM THE RESULTS SHOWN IN THESE FIGURES.

��•��•��•��•��•���•��•���•��•���•� Franchising USA

ex per t advice

George Knauf, Senior Franchise Business Advisor, FranChoice

The key for all candidates is to start where you are, with what you have, and continuously focus on growing your business. There are a number of ways to approach building your portfolio through franchising, but I would like to offer one in particular for your consideration.

In our franchise consulting practice we have seen a number of paths taken to start with a single unit and begin growing an empire. This has been successfully done in the industry time and time again, the majority of franchised operations in the U.S. are now owned by multi-unit owners.

One owner I know started with a single unit and now has over 200 restaurants.

As a business owner, you are not artificially limited on how far or fast you grow your income. This is in stark contrast to being an employee where your employer controls the outcome.

Once you have identified your perfect franchise you would outline a plan for growth. The type of business you are going into may have a big impact on the process you build.

If you own a retail or restaurant business, your long-term growth will likely come from adding additional units. Your goal would be to get the first and possibly second units open with a manager(s) in each to oversee the staff. As those first couple units start producing you may begin to leverage those units via a SBA or conventional loan to open more units. You donâ&#x20AC;&#x2122;t need to be able to fund 10 or 20 units right out of the gate; just the first two then work a very sensible plan for growth.

Generally you will want to open your new units in a geographic area that you can reach easily, but at some point you may have gone as far afield as you want to and may look to add a second brand to the mix. This second brand should be carefully selected and layered over the same geographic area as the first business, making use of any local office infrastructure that you may have built.

If your business is a Business-to-Business (B2B) or Business-to-Consumer (B2C) service concept, such as temp placement services or home repair, then your game

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plan will differ a bit. When you started that business you may have gone as far geographically as you felt comfortable.

In these businesses you may skip adding new territory for the first concept and go straight to adding a second concept.

The challenge with non-brick service concepts could be that to grow the second brand you may need to wait until you are able to replace yourself in the daily operations of the first business before taking on the second. This could limit your speed of growth to some extent.

George Knauf

Instead of adding a second service concept to an existing service brand, you may actually do better adding a semi-absentee or absentee franchise option. This will not require you to step away from your first business, and will not draw a significant portion of your time. You could even ramp up a semi-absentee business while still in the early stages of building a service business.

get more focused on placing them close to home than in a good location, even if it is a little further away. Many nonfood franchisors will discount multiunit acquisitions; this may be worth considering if financially approachable and will let you tie up future locations to develop.

The easiest businesses to scale into a sizable portfolio are typically brick and mortar for a couple reasons. Brick and mortar businesses are often structured to be manager run, meaning you donâ&#x20AC;&#x2122;t have to work in that location open to close.

They can be much easier to find financing for as lenders seem to prefer brick and mortar operations, and since they are not dependent on the abilities of one person the lender feels more comfortable.

Focus of getting the first two units up and running, however that comes together, then begin leveraging those early units to open more units. Somewhere between unit three and unit 10 you will likely open an office to put your support team in. This will cause a dip in profits for a short time, but plan for it and you will limit your surprises. Once you have that office it can service almost any concept you will build next.

So, what might a compelling portfolio growth plan look like?

A very developed version of that plan could be very exciting. What would we build into your ultimate Empire building plan?

I would say that you might want to consider manager run brick and mortar operations with a startup cost below $250K. You may also want to look for businesses that have higher profit margin percentages, often times this excludes food and some product retailers. The franchisor should have very highly developed systems for training and support for both you and your team. I would look for a business where the staff is more professional and less likely to turn over. The ultimate goal of the franchisor should be for 1500, or more, units.

When you find this business you want to look at territories carefully but not

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.georgeknauf.com/

Donâ&#x20AC;&#x2122;t miss an issue

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M a r ie DeNicola, M ainstrea m B ou tique

Marie D

From Marketing Born and raised in the Finger Lakes town of Waterloo, New York, Marie DeNicola grew up in a bluecollar, traditional, Italian family. The youngest of four kids, DeNicola and her siblings were always told by their parents that they could do anything they set their minds to and that if they worked hard, they could create a great life for themselves.

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DeNicola:

arketing to Millions “When I graduated from high school, attending college was not optional, it was a matter of which college I was going to,” laughs DeNicola, adding, “My parents set me on a path for future success.”

Attending the State University of New York in Geneseo, DeNicola studied management science and marketing. “I knew by my first marketing class that I wanted to be a buyer in fashion,” she says.

After graduating in December of 1983, DeNicola and her husband Nick moved to Los Angeles. Working for Windsor Store for six years, their next move was to Atlanta where she found employment as a buyer for the International Art Institute before being promoted to Director of Purchasing. “I chose passion from day one. Money has never been my motivator, it wasn’t then and it isn’t now,” DeNicola

“The key to our success is making it possible for women in suburbs to drive up, park in front, walk in, and shop.” explains. “From a young age, I went with my passion, and it’s why I am where I am today.”

In 1991, Nick accepted a job offer in Minnesota and so the couple packed up and moved again. “Since Nick was the primary breadwinner, I had to leave a job I loved once again. It was heart wrenching, but made it clear to me that I had to start something on my own so that when we moved I could expand the business rather than start over,” she says. With a longing to own a clothing store or boutique during a time when direct sales and home shows were booming, DeNicola began piecing together the building blocks for what would become Mainstream Boutique.

“At the time, I had a small child. The idea to start a direct sales clothing company came from a desire to look great, but not having the time to shop from store to store.

This is something many working mothers can strongly relate to,” she explains. “I thought, ‘wouldn’t it be great if someone could come to me with fashionable clothes?’”

Mainstream Fashions A solution to DeNicola’s passion to bring the product to the consumer, she launched Mainstream Fashions in 1991. The company offered unique, trendy clothing

in the convenience of the woman’s home or office. “I didn’t know anyone in the industry at the time; I just had a dream and a passion. I hosted my first show in my home and invited the neighbors. That’s where it all started,” she says.

Quickly catching the attention of the press, business in the Twin Cities took off and not before long, DeNicola starred on The Oprah Show as a successful entrepreneur.

“After being on the show I got calls from women all over the world asking how they could do what I was doing. That’s when I knew I had to expand nationally,” says DeNicola. Franchise consulting firm, Fran Corp, also caught the segment of the show and invited DeNicola to Chicago to discuss franchise possibilities. “I met with the President of Fran Corp. He was a brilliant man and gave me the information I needed to make the business work as a franchise and suggested inventory solutions,” she explains. Heading back to Minnesota, DeNicola then sought out the expertise of law firm Gray Plant Mooty, and after connecting with vendors to finalize the business plan, Mainstream Fashions began franchising in 1998.

Mainstream Boutique Focused on direct sales and consumer convenience, Mainstream Fashions began

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women in f ra nchising

M a r ie DeNicola, M ainstrea m B ou tique

opening franchise retail locations in the early 2000’s. “The corporate side ended up building a million dollar business from shows alone, so I wasn’t interested in retail space,” DeNicola explains. “But when franchisees began opening stores and customers slid in, the retail locations were a nice compliment to the direct sales, especially since by this point home shows were so saturated.” With the opening of retail locations, Mainstream Fashions became Mainstream Boutique to better reflect the brand and concept. While retail stores are now the focus of the business, direct sales through fashion shows, fundraisers and special events are still a part of the company’s practices.

The ongoing trend of convenience plays a crucial role in deciding where Mainstream Boutique stores are located. “From the beginning, people would look at us and say, ‘you can’t put a store in there and be successful,’ because there wasn’t a lot around that would bring in business. But the key to our success is making it possible for women in suburbs to drive up, park in front, walk in, and shop,” she explains.

Today, Mainstream Boutique has 40 franchisees in 15 states, with exceptional

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growth occurring over the past few years.

“The first few years my passion for fashion was tough to translate into franchising because it’s a completely different entity and requires a unique set of skills. It took us a while to get it right, but now we’ve got it and we’re soaring,” she says. In 2011 Mainstream Boutique grossed 4.8 million in revenue, which then jumped to 6.9 million in 2012, and 11.3 million in 2013.

“The growth has been unbelievable and we’re going to keep going at that pace. It’s been very exciting,” she says.

Dedicated to seeking out the best fashion collections each season, Mainstream Boutique is now in the early stages of developing its own private label. “I have a lot of experience in buying, and I see what works and what women want. Now I want to bring it all together to create my own line,” DeNicola says. “With the average sales per franchise doubled, we have happy franchisees, a wonderful system, a healthy company, and only the sky’s the limit.”

Women in Franchising When discussing the role of women in the franchise industry, DeNicola says that although being female is not a

requirement, all 40 Mainstream Boutique’s franchisees are women. “I’m proud to be creating jobs for hundreds of women all over the country. We have cultivated an environment of women who encourage and lift each other up. Our franchisees are happy people who support the brand because they know they are all in it together,” she says.

Explaining how a woman’s skill set differs from a man’s, DeNicola describes a females’ as relational and nurturing, characteristics that can be carried into their businesses. Bringing with them the human component, DeNicola says her franchisees work together as a team; “It’s not about ringing in sales, it’s about being the best we can be.”

Finding inspiration in motivational speakers such as Zig Ziglar, Rick Warren and John Maxwell, DeNicola shares a life changing moment she experienced in 1994 while attending a success seminar.

“Zig said, ‘If you help enough other people be successful, then success will come to you.’ I 100 percent bought into it that day and have carried it on ever since.

My true desire is to help other people be successful, that’s where my heart is, and

“We have cultivated an environment of women who encourage and lift each other up. Our franchisees are happy people who support the brand because they know they are all in it together.” it’s been a big part of my success in business,” she explains. A true believer in the importance of growing as an individual to enable growth in all areas of your life, DeNicola’s role models are personal friends who have experienced highs and lows and came out on top.

To women interested in joining the franchise industry, DeNicola says to take time to study and know what you’re getting into. “Do your due diligence, learn what’s going on in the industry, and learn from others’ successes and challenges,” she says. “Be a sponge, put 100 percent effort into researching and find out what’s working in the market.” Most importantly, DeNicola notes the willingness to change and adapt to what’s going on in order to stay fresh.

The Future of Franchising Looking ahead, DeNicola believes the future of franchising is bright.

“Franchising is a growing industry and, as we’ve seen, the business climate changes with challenges of the economy. People don’t want to put their success in the hands of someone else when they can do it their self,” she says.

“Franchising is growing businesses, so individuals can build their own dream and be responsible for their own destiny and paycheck.”

Discussing how individuals who buy into a franchise benefit from a proven business model and therefore have a greater chance to succeed, DeNicola says franchising also offers the best of both worlds. Owners can be independent; while at the same time are part of a family to foster their success.

More importantly, they are given the tools, technology, and processes that

they would not ordinarily have access to.

A dedicated CEO, but also mother of three, DeNicola’s most rewarding experience with Mainstream Fashions has been having her eldest son Corey join the business as Director of Franchising. Presenting her with a PowerPoint presentation upon completing his university degree, DeNicola agreed to a six-month trial period, which he started in his basement with a pad of paper, pen and computer. Today Corey is highly responsible for the company’s growth.

“What Corey has been able to do with the company and franchising is amazing. I never dreamed my son would not only join the company, but take us to new heights,” she says. “The most important thing is my family, and being able to mesh the two is beyond satisfying. I love everything about what I do, how many people can say that?”

The future of Mainstream Boutique is also growing. Recently opening the new corporate headquarters, this new space provides more resources to assist with the company’s immense growth.

“I’ve invested back in the business to make sure everything is in place to service franchisees at the same intimate level even as we continue to grow.,” DeNicola explains. “The infrastructure and amazing staff will continue to help women all over the country grow and be successful. We’re changing lives.

It’s all about making a difference and helping someone do well.”

For more information: W: www.mainstreamboutique.com/

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prof ile

L aV ida M assag e

LaVida Massage

‘Massaging’ Profitabilit y into Fr anchisee De velopment LaVida literally translates to ‘the life.’ And that is exactly what LaVida Massage provides both its customers and its franchisees – a life. A healthy, robust, and successful life.

“We live in a day and age of fast-paced daily life.

And with that, everyone has very specific and different health and wellness needs.” looked so promising for franchisees.

As a leading provider of health and wellness services, this Michigan-based franchise differentiates itself from the pack by focusing on customization, service and convenience – for the entire family. Each of its more than 50 centers offers an array of affordable and convenient therapeutic massage modalities that cater to the busy, active lifestyles of its customers of all ages, contributing to overall health and wellbeing.

Since 2009, LaVida Massage reports an annual revenue increase of 148 percent, each consecutive year, while both membership and new clients per center throughout the franchise have grown fourfold in the same number of years.

This increase in profits is paving the way for LaVida Massage to launch a new corporate and network-wide websites (with enhanced optimization and customization in services), to introduce its first ever line of self-branded products (a line of healing aromatherapy oils and detox bath mixtures), and to also launch its own proprietary mobile application.

“We live in a day and age of fast-paced daily life. And with that, everyone has very specific and different health and wellness needs,” says LaVida Massage CEO, Peggy Davis. “At LaVida, we understand that and strive to maintain a business model based upon this ideal… and in providing customized services to our clients that ultimately provide healthy and happy lives.”

“Because of our steady model, we have new franchises turning profits in less than a quarter. More importantly we’re seeing sizeable increases in membership sales across the country, meaning we’re actively building a strong and loyal clientele base,” Davis says. “This is a direct reflection of the quality of service LaVida provides, and the character and reputability of our brand and consummate professionalism.”

While growth potential for investors can sometimes be difficult to quantify—the fact that more than 70 percent of Americans have never had a massage, means that the potential for this industry is not only justified, but tremendous.

LaVida Massage is steadfastly devoted to insinuating that growth; with substantiated profit, the business of living well never

What began in 2007 with a founding location in Brighton, Michigan, has rapidly expanded into the burgeoning national development that it is today. The massage, health and wellness franchise has established several locations around the country and in Canada, and has dozens more on the way with the biggest markets in Michigan, Georgia, North Carolina,

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Texas and Virginia. With overall growth in the health and wellness industry, LaVida was established as an opportunity to expand upon the traditional wellness concept as something that is both healthy and enjoyable.

“More and more people are taking advantage of all that massage has to offer—from health benefits for consumers and profitable business ventures for franchisees,” adds Davis. “The future is bright for LaVida.”

In moving forward, the LaVida plans to continue to add additional franchise and sales support to keep up with growth. In doing so, the company remains true to delivering the message of its originating standards: Accessible, efficient, affordable, and convenient massage centers with customized treatments to cater to the wellness and relaxation needs of everyone.

For more information: Website: www.lavidamassagefranchise.com/

MARCH 2014

Veterans in Franchising Aaronâ&#x20AC;&#x2122;s www.franchisingusamagazine.com

Vets Victorious with

Advantage

Supporting the Troops:

Signal 88 Midas

Franchisee Makes History Franchising USA

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To work independently To your workown independently To set work schedule To work independently To set your own work you schedule To work at something enjoy To set your own work schedule To To work at something you enjoy control your own salary To To work at something you enjoy control your own salary To control your own salary

Want To Be Your Want To Be Your Want Be Your OwnToBoss…

Own Boss…

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“BUILDING AMERICA WITH AMERICAN HEROES”

www.VeteranFranchiseAdvisers.com www.VeteranFranchiseAdvisers.com www.VeteranFranchiseAdvisers.com “BUILDING AMERICA WITH AMERICAN HEROES”

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Veterans make great franchise Veterans make greattraining franchise owners!

Your military has Veterans make great franchise owners!

Your military training has taught you many things that transfer owners!

Your military training has taught youthe many things that transfer well into world of franchising. taught youthe many things that transfer well into world of franchising. well into the world of franchising.

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Take Advantage of Our Take Advantage of Our Take Advantage of Our Free Expert Help Free Help Free Expert Expert Help Today!

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V eterans in F ranchisin g S u pplement march 2 0 1 4 Our Veterans in Franchising special supplement has become a regular feature of Franchising USA. To share your story in the APRIL issue, please contact Jenn Dean, Business Development Manager Phone: 250-590-7116 Email: jenn@cgbpublishing.com

Contents 62 Cover Story: Veterans Victorious with Aaronâ&#x20AC;&#x2122;s Advantage

70 Ask For Help! Find a Mentor!

Jim Mingey, Veterans Business Services

65 Profile: Tom Perez, Meineke

72 An Answer to New Year Resolutions CruiseOne

66 Profile: Jason Bourgeois, Signal 88 Security

68 Profile: Andrea Brown, Midas

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Veterans in Franchising

COV ER STO RY

Vets Victorious

with Aaron’s Advantage Aaron’s is leading the way among franchise businesses in helping military veterans find their way into franchising with ownership and employment opportunities.

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“The high investment level doesn’t necessarily attract veterans getting out of the military, so our primary objective is to hire veterans and provide careers,” says Greg Tanner, National DirectorFranchising at Aaron’s, a member of the International Franchise Association’s VetFran committee, and a leader behindthe IFA’s Operation Enduring Opportunity initiative. “Within the next five years approximately 185,000 vets will be released from service and put on the streets. Instead of trying to find that one

needle in the haystack, one prospect to buy a store, we’re looking to help provide employment to develop careers.”

For veterans who are interested in buying a franchise Aaron’s is a good fit because it runs like a military base. “Veterans

are disciplined, dedicated, and follow instructions well. Aaron’s too, is all about following procedure,” Tanner explains.

“Aaron’s Veterans run top notch stores and have the upmost respect for the industry and what we do. They’re leaders.”

Tanner says, adding that operations and procedure manuals are also available to all franchisees. “We don’t totally rely on the manuals because we implement a program to make sure they learn everything step-by-step. There are no shortcuts to our program and Aaron’s doesn’t have failure rates. We don’t have stores that lose because of the foundation we build our franchisees.” While training can take up to four weeks, those weeks are merely setting the foundation of continuous training for the span of a year.

Aaron’s ongoing field support is second to none, and for every 40 franchisees one field support person is assigned to be responsible for the every day support of those stores. This individual works within the stores, ensuring procedures are done correctly and overseeing where weaknesses lay to help continue growth within the business. “This person is basically the Franchising CEO. They aren’t there to train the franchisees, but rather the store managers and supervisors,” Tanner explains.

Currently experimenting with franchising in the UK, Aaron’s is opening up 30 locations to use as stepping-stones for the rest of Europe. “Rent-to-own originated

More than 1,000 Aaron’s employees and franchise owners have served in the Armed Forces. With the company’s comprehensive training and support, veterans are put at ease owning and managing their own Aaron’s franchise, or employed in an executive-level position working in an Aaron’s store.

in London, England, and to this day is still a very strong concept there,” Tanner says. Aaron’s is also looking to expand in key markets throughout the Northeast and California.

Setting Aaron’s apart from its competition is its 8,000 to 10,000 sq ft stores, impressive inventories, and monthly leasing program. “Unlike our competitors who lease on a weekly basis, we feel like customers prefer knowing they aren’t forced to come in and pay every seven days,” Tanner says. “Our stores are bigger, brighter, and we know why our customers are there so we give them a great selection.”

To Veterans interested in joining the franchise industry Tanner encourages you to read his book, Tannerisms, before making any decisions. Filled with wise captions and valuable information, the easy to ready book can be downloaded for free to help you be combat ready before buying a franchise. “The book explains how to avoid being trapped by a predator.

There are 4000 different franchise concepts out there and people want to take advantage of vets because they are such hard workers.

“Aaron’s Veterans run top notch stores and have the upmost respect for the industry and what we do. They’re leaders.”

Training begins the day the agreement is signed. Assigned a team to assist them throughout the entire process, the new franchisee spends two weeks at Boot Camp in Atlanta, GA, and undergoes field training in operating stores. When their location is ready to open, franchisees are not alone. “The corporate team stays with them until they are comfortable that they can handle running their new business,”

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Veterans in Franchising

COV ER STO RY

“Veterans can put something on their resume not a lot of people can, and that is they were willing to take a bullet for their last employer. That’s commitment.”

Entrenched in the business, Aaron’s operates as a grassroots type of environment, and the military base is a strong customer base of the company.

A strong support of Veterans, Aaron’s is committed to making it possible for them to own or operate a store. “It’s just as important that our franchisees are supportive of the military. They’re ready to hire these men and women when they’re ready to go to work,” Tanner says.

“At the end of the day Veterans can put something on their resume not a lot of people can, and that is they were willing to take a bullet for their last employer. That’s commitment.”

Aaron’s, Inc. is a national leader in the sales and lease ownership of brand-name furniture, electronics, appliances and computers. With more than 2,200 stores throughout 48 states and Canada, and 21 years experience in franchising, of these locations 900 are franchises. Today over 55 million households across North America know and trust the Aaron’s name.

Founded in Atlanta, GA, in 1955 by entrepreneur R. Charles Loudermilk Sr., Aaron’s has been publicly traded since 1982. In 2009, Aaron Rents re-branded to Aaron’s, Inc to bring the company in line with the same name that all stores now operate under. Reaching $3.5 billion in sales, Aaron’s is an industry leader in serving the moderate-income customer, offering affordable payment plans, quality merchandise, and superior service. Aaron’s has been responsible for many of the industry’s most successful and innovative marketing, operational, and manufacturing programs.

At Aaron’s customers can count on a low price guarantee on every item and are prequalified as soon as they step foot into a store. The only requirements to

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lease from Aaron’s are a proven source of income, two references, and a home address. Customers can also choose payment terms of either a monthly or semi-monthly basis.

“Aaron’s serves an extremely underserviced clientele. Typically, Aaron’s customers’ household income is under $60,000 a year, and a lot of customers have credit restraints and are therefore unable to get the things they need to function,” explains Tanner. “We give people the opportunity to have things in their home they normally wouldn’t be able to own.”

On the other hand, Aaron’s franchising opportunities attracts high net worth individuals. “People don’t wake up in the morning and say, ‘I want to buy an Aaron’s.’ We’re more of a stealth franchise in that people don’t recognize, understand, or think about what we do,” Tanner explains. “People with large net worth usually haven’t been to an Aaron’s.”

Aaron’s’ franchise owners don’t work in store, but rather manage a large staffing crew and own multiple units. Aaron’s franchisee Charles Smithgall is a Vietnam Veteran and owns 117 locations.

The requirement to qualify as an Aaron’s franchise owner is $500,000 in liquid cash. “An Aaron’s franchisee is typically someone who is experienced with managing people, money and cash flow,” Tanner says. “We attract individuals that are familiar with running a business and know how to balance a P&L.” The franchise fee is $50,000.

Aaron’s franchising process takes from three months to one year to complete. The process begins when the candidate fills out the application and provides their financial information. Similar to the process of

buying a house, Aaron’s application includes thorough paperwork. “We’re going to guarantee franchisees $450,000 and a line of credit to grow their inventory, so we need to make sure we’re finding the right people,” Tanner explains. After practicing their due diligence, candidates then attend a Discovery Day where they meet the internal staff. “I like to call it a validation day because by this point we’ve had a lot of conversations with the candidate, so it’s their chance to validate that we are who we say we are; a company of substance,” Tanner says. At the end of the Discovery Day candidates are given the FDD. “We put the ball back in their court. Returning the FDD to us is their ticket to get on the bus,” he adds.

Candidates who are awarded a franchise next set out to find a location. “We have a complete real estate department and construction department. Aaron’s assists franchisees with selecting the location, negotiating the lease, and hiring staff. The entire process is important and we make decisions the same as we would if we were opening a corporate store,” he adds.

For more information: Website: www.franchise.aarons.com/

Tom Perez

Tom Perez dedicated 10 years to the United States Navy serving as a police officer and worked his way up the ranks to supervisor.

During his service, Perez completed four tours of Iraq, earned numerous medals of achievement and honor and received a college degree in business. In late 2011, Perez was honorably discharged due to downsizing.

Following his departure from the Navy, Perez applied for nearly 100 police and government positions across the country, only to receive rejection after rejection.

Finally, Perez chose to take matter into his own hands in order to support himself and his family and took the leap into entrepreneurism.

He chose franchising because it offered the ability to own a business with a proven system in place, along with support from a team of experts. Perez conducted research on the hundreds of opportunities available in the franchising industry and decided Meineke Car Care was the right place for him.

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“I chose to franchise with Meineke because it is a military friendly community and I knew I would be able to keep my promise to help employ other military Veterans.”

“After completing a franchise application form, I heard back within a few days and the process was underway,” said Perez.

“Meineke was able to offer a military veteran discount on the franchising license and help finding the best financing available for a small business. Most importantly, I chose to franchise with Meineke because it is a military friendly community and I knew I would be able to keep my promise to help employ other military Veterans.”

In May 2012, Perez took over Meineke of Pensacola, FL. At age 31, within the first six months of operating his franchise location, Perez boosted sales by 60 percent and hired five military Veterans to work at his shop. He continues to use the skills he learned in the military to sustain the success of his Meineke location and hopes to grow into a multi-unit owner within the system.

Formerly known as the muffler repair experts, Meineke has evolved its menu of product offerings to meet the demands of the ever-changing marketplace. Today, the

Charlotte-based franchise has emerged as the one-stop shop for tires, brake repairs, tune-ups, alignments, shocks and struts, routine maintenance and more.

The average age of cars on the road has climbed from 8.2 years in 2000 to 11.2 years in 2013, and general, non-warranty automotive repairs and maintenance is projected to cost consumers $1.6 billion in 2014. As the consumer demand for trust-worthy automotive repair accelerates, Meineke is setting its sights on an aggressive, strategic growth strategy throughout the U.S. by recruiting qualified single and multi-unit franchise partners.

Military Veterans with an honorable discharge qualify for a 25 percent discount on the franchise license fee with the car care company. Since 2003, Meineke has offered nearly two million dollars in military discounts and remains one of the top VetFran companies in the franchising industry.

For more information: Website: www.meinekefranchise.com/

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Veterans in Franchising

Jason Bourgeois Jason Bourgeois applies his professional background in the military and successfully started a new franchise with Signal 88 Security.

Many times in the workforce and business world Veterans have their skills and experiences overlooked because it was part of the military, and not typical corporate world experience. Not the case with Signal 88 Security, who looks for Veterans who they know have what it takes to get the job done and they provide discounts and incentives to help them make it happen.

Bourgeois is a U.S. Marine who served in Operation Iraqi Freedom as a Military Policeman, and served in the U.S. Air Force as a Security Forces Craftsman, but still did not realize the value of his professional experiences until he was able to connect with Signal 88 Security.

Visualizing how he would be a great asset to the organization, Bourgeois then did his due diligence and interviewed other franchisees from Signal 88 Security.

Learning of multiple Veterans who had already found a great fit with the franchise,

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Profile

this greatly increased his confidence level. Bourgeois’ main objective was to be available to support his family, and owning a franchise gave him the independence to make his own schedule and build his business at a pace in which he could be there for his children while also meeting his professional goals.

Currently, Bourgeois’s Signal 88 Security franchise is located in Baton Rouge, LA, and he is already expanding to Houma and Thibodaux, LA. He has currently employed 13 people, all Veterans, and is in the process of adding four more in the coming weeks. He expects to surpass his earnings goals soon and is very optimistic about his new business. His success is credited to the structure, training and support that Signal 88 Security has provided. As Bourgeois continues to build his business development skills, he captures new contracts and can clearly see a path to business success.

Signal 88 Security has already made its

mark on the security industry as one of the top contenders. It also boasts the most successful franchise model in the security industry. With over 100 franchises in 30 states, Signal 88 is growing each day and is always looking for potential new franchisees. Many Veterans and former police officers have found that Signal 88 has been the perfect business opportunity for them. Signal 88 Security also gives a discount to military Veterans who choose to open their own franchise. With an ever growing industry, a need for security, and the support of the franchise group, Signal 88 Security provides a great opportunity to own your own business.

For more information: Website: www.signal88.com/ franchising/home.aspx?utm_ source=franchisingUSA&utm_ medium=marcharticlelink&utm_ content=franchising&utm_ campaign=franchisingUSAmarch

“With over 100 franchises in 30 states, Signal 88 is growing each day and is always looking for potential new franchisees.”

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www.highervisibility.com

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Veterans in Franchising

Andrea Brown Lincoln Highway in Chicago Heights looks like any other from the outside, but inside, history is being made.

Andrea Brown is the first female military Veteran and the first black female to own one of the 2,500 Midas franchises in the United States and Canada. “It is an honor and a tremendous privilege to be the only female Veteran Midas franchisee in the

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Profile

country,” she says.

Brown also said she knows her background in the medical field makes her an unlikely candidate to run a machineoriented business, but she had a different view when applying for the franchise.

“This is my catch phrase: I’ve studied all of the systems for the body. I’m now ready to study the systems for the vehicle,” she adds.

Born and raised in Vicksburg, MS., Brown earned a Bachelor of Science degree in biology/pre-med from Texas Southern

University, and a Bachelor’s degree in Nursing from Eastern Illinois University.

But she faced some challenges while pursuing her degrees over more than a decade ago.

When her efforts to continue her education were stalled by a lack of finances in 1997, Brown decided to join the Army. Brown said her father, a Vietnam Veteran, was “dead set against it,” and offered to pay her way through school. But her independence kicked in. “I really need to do this on my own,” she told her father.

“I’ve studied all of the systems for the body.

I’m now ready to study the systems for the vehicle.”

Brown was introduced to Midas’ franchise opportunities through Stacy Everett, a friend with whom she had been speaking about a business partnership. Everett had been with the “Midas family” for about 15 years, so when Brown saw Midas listed on a government website as one of the Fortune 500 companies partnering with the government to give franchise opportunities to Veterans, “a light bulb went on.”

As an E-4 specialist in the Army, Brown served as a pharmacy specialist at Brooke Army Medical Center at Fort Sam Houston in Texas from 1997 to

2001. After her discharge in 2001, Brown continued her schooling while working and eventually earned her nursing degree from EIU in 2007.

Brown explains that while an internship and subsequent job at the Hines VA Medical Center was rewarding, she also wanted to create additional income by becoming an entrepreneur.

When Brown eventually became the owner of a Midas franchise, she used Everett’s skills to operate her business. “He has the [automotive] experience I needed,” Brown says.

Brown’s “strong suit” in management came from her experience in managing nurses and medical personnel during her days in the medical field. She says that this has helped her run a successful business since opening in August 2012.

When asked about her experience with Midas, Brown says: “It’s been fantastic. It’s great to have the freedom of owning your

own business…but it’s also hard work. You can’t clock in and clock out. Your time is 24 hours because there’s always something to manage, always something to do.”

But she isn’t afraid of hard work.

“One of my goals is to have at least two more Midas shops along with other businesses as well,” she says, adding that she hopes to own other automotive-related businesses such as car washes or body shops. Brown is currently in the process of trying to buy the empty lot adjacent to her current business.

Aware that she is in a “predominantly male field,” Brown believes she has the formula necessary for anyone to become a successful business owner. “When you’re starting your own business, you have to have tenacity and endurance,” she says.

“You’re going to have several different roadblocks along the way. It’s going to take that tenacity and endurance to keep going once somebody tells you ‘no.’”

For more information: Website: www.midasfranchise.com/

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Veterans in Franchising

Jim Mingey, Veterans Business Services

With Limited Experience in Franchise Acquisitions, How Can Veterans Improve Chances of Success?

Ask for help!

Find a Mentor!

Identifying yourself as a Veteran lately can sometimes help open doors. The initial reception most times is cordial, and of course in franchising it typically gets a Veteran a discount.

Not a bad start, but at that point youâ&#x20AC;&#x2122;re still at the same starting gate as any entrepreneur examining and then trying to

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perfect an opportunitiy.

One great way a Veteran can get an edge is to find an advisor who can help with their due diligence, give unbiased suggestions for examining a franchsie idea, or maybe even act as a strategic advisor to help leverage additional support for their business ideas. This type of advice can come through a mentor, and if the relationship is approached properly, it can offer terrific advantages to any business idea.

In business, your market is your market, there is no getting around that! Whether

you start an independent business, acquire a franchise, or even build a nonprofit business, itâ&#x20AC;&#x2122;s all about knowing your market and then executing a product/ service delivery process to get and satisfy customers. Mentoring programs can help you accomplish both.

During the next several years the number of Veterans transitioning into civilian life is expected to exceed 250,000 per year. Realizing that a smooth transiton to employment or self-employment is essential, a few forward thinkers at the Department of Defense, the SBA, and VA developed what is known as the Boots

“If the Veteran and the mentor establish concrete goals and develop a plan of action with deadlines, respect can evolve quickly for the overall mentor relationship.” to Business Program for those Veterans seeking entrepreneurism as a way forward.

The program is free to transitioning Veterans and offers a staged introduction to entrepreneurship with the last stage, offering specialized mentoring for any business plan, including a franchise acquisition. The program is relatively new but is expected to be in fully implemented by nationally 2015. Use it!

Many Universites now offer Veterans entreperneiral bootcamps to help jump start their business ideas. Some of these bootcamps were spearheaded by the Whitman School of Business at Syracuse University, and now comprise a branded network of Universities using “EBV,” which stands for Entrepreneural Bootcamp for Veterans with Disabliities. Others like Oklahoma State are independent modela.

All of these are essentially specialized mentoring programs but have limitations.

Although they’re without cost, you must apply and enrollments are limited and not always in sync with required timing. If you have a disability, apply and use them to build a mentoring network!

The granddaddy of all small business mentoring operations is SCORE, which used to stand for Service Corps of Retired Executives. It been around for over 50 years and is partially funded by the SBA. But make no mistake, the new SCORE brand and services are not your father’s mentoring program. It’s a sophisticated network of over 350 Chapters that covers all of the United States. Mentors can now be active younger entrepreneurs with many mentors still participating in business by themselves or as part of social entreprises they construct for public good, including

Veteran mentorship. Over 15 percent of SCORE mentors are Veterans and they know how to connect other small business resources with Veteran priorites. Around 80 percent of SCORE mentors have direct experience in sales and marketing, which can directly relate to a prospective franchisee’s need to examine his market and compare and contrast others as well.

Where else can you find free due diligence assistance and someone to help challenge your franchise business assumptions?

Interesting, the best Score Chapters are judged by their rate of return of initial mentees. As the Veteran entrepreneur refines his/her franchise acquisition plan the SCORE mentor can bring in a number of free collateral resources like Veteran Business Outreach Centers and unique financing sources to assist.

Ideally SCORE mentors and mentees spend considerable time getting to know one another but don’t inflate your expectations, as 80 to 90 percent of SCORE mentors are primarily interested in one-on-one business conversations. Be patient and learn how to reach out to the other 10 to 20 percent at SCORE who will help network an develop comprehensive strategy plans that involve different resources. No one at SCORE will tell you that you can’t have more than one mentor.

Veterans should try to set realistic expectations and definitively share responsibility for the mentor relationship.

If the Veteran and the mentor establish concrete goals and develop a plan of action with deadlines, respect can evolve quickly for the overall mentor relationship.

The best advice for Veterans is to explore all of the above and also evaluate

Jim Mingey

participating in mentoring networks like American Corporate Partners for both career and small business knowledge and support. And of course VetFran now offers a direct franchise mentoring program. If you can’t the right fit or connection, give VBS a call.

To accomplish its mission VBS requires a steady hand who relates well to Veterans. VBS’ Founder and Managing Director, Jim Mingey, is a decorated Vietnam Veteran raised from a proud military background. An entrepreneur for more than 35 years, Jim can relate on a personal level to the needs of the Veteran small businessperson, and possesses the practical knowledge to implement his experience in today’s market. Jim participated in the EBV Program at Purdue University, is a mentor at American Corporate Partners, developed the first approved franchise training program for the Vocational Rehabilitation and Employment (VR&E) Program at Veterans Administration, and was instrumental in forming the first equity fund in the United States exclusively for veteran owned small businesses and franchises: The Veterans Opportunity Fund. Jim intends to keep on ‘advocating’ for Veterans in franchising.

For more information: E: jimingey@VeteransBusinessServices.us Phone: 202-349-0860

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Veterans in Franchising

Cr uise O ne

“Strong leadership, discipline, and trainability are several of the skills military Veterans bring to business ownership, and these are also among the reasons they are some of the most successful franchise owners.”

CruiseOne

An Answer to New Years Resolutions With the New Year comes resolutions, and CruiseOne has resolved that in 2014 military Veterans and active-duty military spouses will make up at least 25 percent of its franchise network by the end of the year, an increase of nearly 10 percent.

“At CruiseOne we salute military Veterans and their spouses and we acknowledge that military service experience translates well into small business ownership,” says Tim Courtney, Vice President of Franchise Development and Ambassador of Veteran Affairs for CruiseOne. “We find that strong leadership, discipline, and trainability are several of the skills military Veterans bring to business ownership, and these are also among the reasons they are some of the most successful franchise owners.”

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CruiseOne offers many military Veteran incentive programs. Those who served in the U.S. armed forces receive a 20 percent discount off the franchise fee.

To further increase support in this area, in 2014 CruiseOne is launching a new Veteran employment program offering discounts for franchise owners who hire former members of the U.S. military or active-duty military spouses as associates.

The first associate fee of $495 will be waived; any additional associates hired who are Veterans or active-duty military spouses will be offered at half-price, a value of $248. In addition, for the past two years the company has hosted its annual “Operation Vetrepreneur: Become Your Own General” contest, which awards five deserving military Veterans with a free CruiseOne franchise. Each year, the contest starts on Memorial Day and concludes in the fall, with a special ceremony featuring city and state government officials.

“I am so honored to have won a CruiseOne travel franchise and I appreciate the commitment that CruiseOne makes to military Veterans,” says Grant Springer, CruiseOne franchise owner, 2013 Operation Vetrepreneur winner and

Tim Courtney

Army Veteran. “As I continue to grow my business, I look forward to hiring other former members of the U.S. military as associates so they can experience the beneficial veteran employment opportunities that CruiseOne offers.”

As a VetFran member, CruiseOne proudly supports former members of the U.S. military and is a military-friendly franchise for its dedication to Veteran employment.

For more information: W: www.franchise.org/CruiseOne_ franchise.aspx.

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spotlig ht on ser vice

Sociall y buz z

It’s All the Buzz: S o c i ally b u z z A p p

After four successful years of providing franchises and small business owners with the tools and skills needed to finesse their social media presence and reputation, Sociallybuzz is now launching something even more powerful: The Sociallybuzz App. Sociallybuzz was founded in 2009 by Andre Kay (CEO), and born to fill a necessary niche. Prior to launching the business, Kay owned and operated another marketing company that focused on outdoor advertising with billboards and other campaigns. A major service offered through this company was social media management. During this time however, social media was not the marketing monster it is today, but nonetheless clients quickly caught on to the power behind the buttons. With a growing interest from clients as to how Kay was managing sites such as MySpace, Facebook and Twitter, this interest was the driving force behind launching Sociallybuzz.

“I did a lot of research on the marketing industry, and got to understand how to be at the forefront of social media,” says Kay. “It’s an ever changing market and it took a lot of time and investigation to position Sociallybuzz where it is today.”

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Sociallybuzz exists to help franchises grow using social media. This is done by improving brand awareness, increases sales and revenue, and building a social community. Sociallybuzz is able to accomplish these goals by reaching relevant customers, building customer loyalty, and managing the company’s reputation. “Sociallybuzz aims to protect relationships with customers, create effective campaigns, and manage social media for franchises 24/7,” Kay explains.

Today Sociallybuzz services around 100 brands a month, which works out to be approximately 500 locations.

Gearing up to release its latest proprietary development this month, the software is a powerful, intelligent and easy-to-use iOS app that supports social networks and reputation management. Designed to provide business owners with a better and easier way to manage multiple social channels from their phone: “There is

nothing like this out there,” says Kay, adding, “Business owners won’t need to log onto their computer to see what is going on online.”

The Sociallybuzz App is the only app in the new media marketplace that manages Yelp, Google Places, Urbanspoon and Facebook within one dashboard.

Therefore, business owners now have realtime accessibility to customer engagement that allows for capitalizing on positive comments or defusing negative comments through social media. The Sociallybuzz App protects relationships with customers, manages social networks and online reputation on the go.

“As a result of our four years of servicing clients, and in addition to our market knowledge, we have developed an iOS app that fills a void in the marketplace that supports social and online reputation management,” says Kay. “Reputation management is an increasingly important

“It’s so easy to use. You don’t have to think about it when you use it. It just works.” component of managing customer experience and brand engagement.”

While millions of consumers leave responses for restaurants, QSRs, franchises, bars, nightclubs and retail stores daily, The Sociallybuzz App solves the current problem of businesses’ not having mobile access to monitor reviews or comments. In turn, this will increase customer engagement- a make or break with many businesses in today’s market.

The Sociallybuzz App turns tedious communication into a matter of clicks.

For example, once a franchisee logs into the app on their phone, they select their location and in front of them will appear their Facebook, Yelp!, Urban Spoon and Google Places accounts. From here they can see who is talking about them, choose to read messages, respond to a comment, or create a post. If the business owner is anticipating a busy day, they can simply choose to schedule posts for certain times. Furthermore, if the owner can’t think of what to say in the post, the app has them covered with a powerful feature that allows users to select from pre-made custom savvy messages. “If it’s a restaurant the owner just has to select so, choose a topic like lunch specials, snap a shot or select an image, and they’re good to go,” Kay explains, adding, “It’s so easy to use. You don’t have to think about it when you use it. It just works.”

owners from responding negatively to any feedback they may receive. “Franchisees are often tied to their business, it’s their baby, and they sometimes get defensive when someone has something negative to say,” Kay says. Buzzprotect is an added feature to protect business owners from replying to reviews with messages that they might later regret. “When users reply on the social media site, the app asks if they really want to post it, and counts down 12 seconds before asking again. It’s a double security feature,” Kay says.

These are not the only features the app will be offering, Sociallybuzz has plenty up its sleeve and will be releasing more features over the next few months.

Franchisees of Domino’s Pizza, Jamba Juice and other multi-unit restaurants are currently a few of the top brand users of The Sociallybuzz App. The Sociallybuzz App is available for download in the iOS App store under the name Sociallybuzz. Businesses must visit Sociallybuzz.com to sign up for a plan before downloading the app for free on

their iOS 5, 6 or 7 iPhone. The standard plan is priced at $24.99 per month and provides management of multiple social networks, operate online reputation, easy message scheduling, and real-time review alerts.

The second plan is a premium option priced at $99 per month. This plan includes everything in the standard plan, plus a virtual account manager. A virtual account manager provides more enticing responses with correct grammar, spelling and creative writing. Virtual account managers also help businesses set-up, unlock and claim their social channels.

Both plans include a 30-day free trial with many more features releasing soon.

The third plan, which will be released in the coming months, will be tailored to businesses with over 1,000 locations As the number one social media management, campaign and reputation agency in its fourth year of operation, Sociallybuzz is only just getting started.

“We have a lot more coming up,” Kay says, “But right now we’re in a good place to introduce the app to the world.”

For more information: Website: www.sociallybuzz.com Email: andre@sociallybuzz.com

Another unique feature the app focuses on is responding to customer reviews and comments. “Owners either not responding, or responding negatively, can cause trouble for the business,” Kay says. With the app franchisees will be notified immediately as someone leaves a review. “Imagine if a customer posts a negative review and the manager could catch that person before they even walk out the door to fix the problem. The app provides real-time solutions,” he adds.

The app also aims to protect business

Franchising USA

spotlig ht on ser vice

Page 75

ex per t advice

Dan Waldschmidt, Author & International Business Strategist

How to Overcome Excuses in 2014

6 Tips to Gain the Edge and Meet Your Goals Great people throughout history often fail, quite miserably, before finally reaching their goals.

Van Gogh sold only one painting during his lifetime; Winston Churchill lost every public election until becoming prime minister at age 62; Henry Ford went bankrupt five times; Albert Einstein was a terrible student and was expelled from school; Sigmund Freud was booed from a stage.

Ideas, brilliance, genius – they all mean nothing without the guts, passion and tenacity necessary to make your dream a reality. But often, people fall back on excuses and give up on trying to reach their goals. Most of us have dreams, and many of us have big ones, but few of us actually see them through.

Here are six tricks for jumping off the excuse train and forge the path to your goals.

1

Avoid the need to blame others for anything

Mean small-minded people know that they suck. That’s why they are so cranky and eager to point out others’ mistakes. They hope that by causing others to feel inadequate, everyone will forget about how woefully off the mark their own performance is. Don’t blame anyone, for any reason, ever. It’s a bad habit.

Franchising USA

2

Stop working on things that just don’t matter Not everything needs to be done

in place of sleep. If you work for a boss,

then you owe them solid time. You can’t cut that out. You can, however, cut out

television time, meetings, and anything else that gets in the way of achieving your goals. Replace entertainment with activity toward your goal.

3

Refuse to let yourself wallow in self-doubt You’re alive to succeed. Stop

comparing your current problems to your last 18 failures. They are not the same.

You are not the same. Here’s something

to remember: Your entire life has been a training ground for you to capture your destiny right now. Why would you doubt that? Stop whining. Go conquer.

4

Ask yourself, “What can I do better next time?”

And then do it next time. If you

spend a decade or two earnestly trying to be better, that’s exactly what will happen.

The next best thing to doing something amazing is not doing something stupid.

Dan Waldschmidt

5

Proactively take time to do things that fuel your passion

Exercise is a great example. Living in the moment requires you to live at peak performance. A huge part of mental fitness is physical fitness. A sparring or running partner is a great way to refresh physical competition. Physical activity accelerates mental motivation.

6

Apologize to yourself and those around you for having a bad attitude

Do this once or twice and you’ll snap out of your funk pretty fast. When you start genuinely apologizing for being a bad influence on those around you, you learn to stop whining and start winning.

Dan Waldschmidt is the author of “Edgy Conversations: How Ordinary People Achieve Outrageous Success,” (www.EdgyConversations.com). He is an international business strategist, speaker, author and extreme athlete.

His consulting firm solves complex marketing and business strategy problems for savvy companies all over the world. Dow Jones calls his Edgy Conversations blog one of the top sales sites on the Internet. He’s been profiled in BBC, Fox News and The Today Show, and he is a sought-after media source.

So learn from your mistakes and use the

For more information:

lessons to dominate.

Website: www.danwaldschmidt.com/

Page 77

Franchising USA

have your say

M ora n B ra nds

As a Franchisor,

You Must Adapt Steven Hawking once said, “Intelligence is the ability to adapt to change.” I think in franchising success can largely be defined by a franchisor’s ability to adapt to change.

systems that can be replicated over and over again by franchisees. We are constantly trying to hone and perfect those models into better versions of themselves.

This is a double-edged sword. Many franchisors are guilty of becoming too introspective and failing to see larger categorical and industry-wide changes and challenges that will affect their brands and franchisees. And because of that, key opportunities are often missed to differentiate your brand.

As franchisors, we create models and

Recently we re-launched one of our

“Adapting in business sometimes means being reactive, but it can also mean being proactive.”

portfolio brands Alta Mere, Toys For Your Car as a result of one of those opportunities. Not only did we want to update our brand, but look at it through the eyes of our customers to see what additional opportunities we had. Alta Mere’s primary products are window tint and accessories; however, with the evolution of consumers’ needs, we felt that we needed to be more aggressive on the electronics side. We’ve also sold items such as alarms and remote starts but we never made those items situational for our customers.

With this in mind, we launched a complete rebrand, first updating our tagline to Alta Mere “Automotive Outfitters” and then our website. We did this because we saw an opportunity to reposition Alta Mere within a niche in the market; a space that we believe will have increasing demand based on technology that is emerging in new vehicles.

Below I’ll highlight some of the steps we took and show how these tips can be more generally applied to other franchise networks.

Competition Analysis Keeping abreast of what your competition is doing may sound like Business 101; however, I challenge you to keep a more discerning eye on what they are doing.

But most importantly, keep an eye on what your competition is not doing and look for ways to adapt.

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Page 79

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Franchising USA

have your say

M ora n B ra nds

“Ultimately if you don’t adapt, you could find yourself playing catch up and that’s not an ideal position for a franchisor.”

It’s important to involve both in the adapting process – as not to alienate these important parties.

Overall

For example, with our Alta Mere rebrand, we noticed that the market was not focusing on safety technology such as hands-free calling, rearview cameras or text blocking. So we decided that we could reposition our brand as a leader in this technology as laws on texting and phone use while driving become more stringent.

Do Not Stall Evolution Because Things Are Working Right Now Adapting in business sometimes means being reactive, but it can also mean being proactive. Adapt to things that will or might change and act on it. Though your billing process may be working flawlessly or your advertising plan might still be returning a high ROI, this doesn’t mean you shouldn’t be on the lookout for new ways of doing things. Staying ahead of the curve means that your competition may still be behind it, and that gives you an opportunity to further differentiate yourself.

Two of the other brands in our portfolio, Milex Complete Auto Care and Mr. Transmission, were operating well independently of each other, but we forecasted an upcoming move towards

Franchising USA

offering a one-stop shop for auto repair.

The end result was us co-branding the two, which created a competitive advantage for our franchisees in the marketplace.

Feedback and Testing Listen to your franchisees. Make sure they have an outlet for feedback, whether it’s a simple email address or it’s a quarterly town hall meeting. These are the people that have the ground-level experience that should be tapped into. This also goes one step further, make sure your franchisees are listening to their customers and clients and receiving feedback from them, it could be a simple customer survey or elaborate review technology platform. Your franchisees are your ears to the customers or clients. This is where you may hear that customers are unhappy with your payment process or overall service model.

With Alta Mere we recognized that we had the chance to be more relevant with our customers and help them better understand the products we carry. With this in mind we updated our tagline to better represented our new brand position. Our final decision was made after testing both on a consumer and franchisee level.

Remember that change is hard but necessary. There’s the old saying ‘don’t fix what isn’t broken,’ well I’d say keep an eye out for what you can fix before it breaks.

Preventative maintenance is a keystone of the automotive world, but also an idea that can be applied to franchising and business.

Ultimately if you don’t adapt, you could find yourself playing catch up and that’s not an ideal position for a franchisor.

About Moran Family of Brands & Barbara Moran-Goodrich Midlothian, Ill.-based Moran Family of Brands is one of the leading franchisors of general automotive repair, transmission repair and automotive accessory centers in the country. Moran Family of Brands provides specialty products and services in virtually every aspect of the automotive aftermarket through six franchise brands and more than 140 franchise brands nationwide including: Mr. Transmission, Alta Mere “The Automotive Outfitters”; and Milex Complete Auto Care centers and now SmartView Window Solutions.

Barb Moran-Goodrich is the President and Owner of Moran Family of Brands.

Barb has been involved in the automotive repair and accessory business for more than 20 years and is committed to helping franchisees and small business owners grow their business.

For more information: W: www.MoranFamilyOfBrands.com P: 708-389-5922

ital t of all dig n e rc e p 0 in “9 s created matter wa o years.” the last tw

“The cloud is nothing to fear.”

Page 81

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ex per t advice

Julie Lusthaus & Mackenzie Dimitri, Einbinder & Dunn, LLP

HOW MUCH MONEY WILL I MAKE FROM MY FRANCHISE? As any new franchisee can tell you, the decision to invest in a franchise involves a great deal of research. This research includes finding the right industry, identifying the right franchise system, considering the proposed market, and determining the financial viability of the business.

It’s a big decision. For many prospective franchisees, the ultimate choice to invest understandably turns on the expected financial return.

It is therefore no surprise that prospective franchisees want franchisors to tell them how much money they can expect to make from the operation of their franchise. But franchisors cannot tell them how much revenue their franchises can generate.

There is simply no way for franchisors to predict how a particular franchisee will fair in the market. Moreover, if not done correctly, disclosing information about the actual or potential financial performance of franchised and/or franchisor-owned outlets can cause a host of problems for franchisors.

Franchising USA

Franchisors are generally required by the Federal Trade Commission’s Franchise Rule (“FTC Rule”) and various state regulations to provide prospective franchisees with a franchise disclosure document (“FDD”). The FDD is intended to provide the franchisee with certain specific information about the offering, the franchisor and the franchise system.

The FDD must also contain certain exhibits including the agreements that the franchisee may be required to sign.

The information contained in the FDD is organized into 23 Items of information.

Item 19 is entitled “Financial Performance Representations.” Essentially, if the franchisor wants to provide information about the financial performance of the system (“FPRs”), it must have a reasonable

basis for the information and the FPRs must be contained in the FDD. Notwithstanding the opportunity for franchisors to provide certain FPRs, many choose not to. Franchisors make this decision for a variety of reasons.

For example, some franchisors may fear that data collected from independent franchisees is inaccurate or inconsistent.

Franchisors may also want to avoid disclosing financial information to their competitors. Some franchisors may avoid disclosing information that shows a poor or mixed financial outlook, particularly when the financial health of the franchise

Page 83

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ex per t advice

Julie Lusthaus & Mackenzie Dimitri, Einbinder & Dunn, LLP

“It is important to remember that many factors may come into play in a franchisee’s success or failure.” system appears drastically affected by a few poorly-performing franchisees.

one that has successfully operated for several years. Also, franchisees that operate in big cities may not provide a realistic outlook for franchisees looking to invest in smaller markets.

While information provided by existing and former franchisees can be hugely helpful in ascertaining projected costs and revenue, prospective franchisees should remember to keep a realistic perspective when interpreting the information existing franchisees may give them.

Unfortunately, the omission of this information can impact the ability of prospective franchisees to gain an understanding of the revenues that can be generated from ownership of the franchise and to assess the financial health of the system.

So, where can franchisees turn to learn about the potential viability of the franchise and the health of the system?

1. Look to Other Franchisees

A very important Item in the FDD is Item 20 in which franchisors must provide contact information for current and former franchisees.

This information is required so that prospective franchisees can learn about the franchisor, the system and franchised units. Existing franchisees are permitted (although not required) to discuss with prospective franchisees, their business, their experience as a franchisee, and their perspective on the franchise system as a whole.

This type of information may include information relating to actual costs to develop and operate the unit as well as information about revenue earned such as information about which products and services generate greater profit and why. All of this information can be used by the prospect to anticipate costs and project possible revenue.

Prospective franchisees will want to take full advantage of this opportunity and communicate with as many current (and former) franchisees as possible.

However, it is important to remember that many factors may come into play in a franchisee’s success or failure. For instance, a newly opened unit may not initially achieve the same success as

Franchising USA

Julie Lusthaus

2. The Franchisor’s Financial Statements

Attached to the FDD as an exhibit will be the franchisor’s financial statements.

The FTC Rule requires franchisors to provide independently audited financial statements for the preceding three years. This information can give prospective franchisees an idea of how financially healthy the franchise system is as a whole. Financial statements which show lack of capital, lack of liquid assets, a negative current ratio (meaning current liabilities which surpass the franchisor’s current assets), and poor growth should raise a red flag. It is also crucially important to evaluate where the franchisor’s revenue is actually coming from – franchisors who rake in revenue from the sale of required products or services to their franchisees may be simply profiting at their franchisees’ expense. However, evidence that the franchisor’s revenue is largely derived from receipt of franchisee royalties, may indicate a healthier franchise system.

3. Develop a Business Plan

Franchisees should conduct sufficient due diligence and obtain adequate professional guidance from

Mackenzie Dimitri

accountants, financial planners, attorneys, etc. so that they can develop their own business plan. An experienced accountant, business consultant or attorney familiar with franchise law should be able to help.

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.

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

f ra nchisor in depth

Page 85

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