Franchise Articles

Tom Wood, president and CEO of Floor Coverings International (FCI), is well-known for his "First to the door wins" approach to franchise sales. This past October he served as chair of the 2013 Franchise Leadership & Development Conference. Based in Atlanta, FCI has been franchising since 1989. We asked Wood for his thoughts on franchise sales in the year ahead.

What are the most important factors and characteristics you look for in assembling a successful sales team? Sales people who understand what they are doing in the role: "selling." While we are looking only for the best franchisee candidates, the right people will still need a sales professional to guide them through the process and keep the process on track. Characteristics include 1) goal orientation, 2) a realistic outlook on the business and a strong communication style to communicate it, and 3) an ability to manage by the numbers...

"Businesses that successfully transition to social organizations will have a competitive advantage over those that do not."

That's from a white paper called "Using Social Media to Improve Organizational Communication & Efficiency," authored by Amy M. Young and Mary D. Hinesly from the University of Michigan's Stephen M. Ross School of Business.

For the past several years, we've been hammering away here at Franchise Update about the importance of "breaking down the silos" in your corporate organization. Also for the past several years, we've all been hearing ad nauseam about how we need to embrace social media to reach and engage customers.

But what about using social media tools within the organization to have different departments - sales, marketing, operations, field support, real estate, etc...

In 2013, U.S. franchisors of all sizes and from all sectors are “going global” with their brands. Is this a temporary trend or a long-term strategy decision? Over the past several months, the IFA analyzed their franchisor members’ current and planned international development and found the following:

Many franchisors use behavioral surveys as part of their franchisee selection process. This can be a smart investment, considering the size of the payoff and the risk. Understanding the personality makeup of your top franchise owners can guide you to more intelligent decision-making when awarding your franchises. Knowing more about a candidate's personality makeup, goal orientation, sociability, and analytical and compliance traits leads to better choices, benefiting both parties.

Behavioral surveys can provide effective insights into the natural characteristics of potential franchisees throughout the qualification process. Do they have the drive and dominance factors you are seeking? Are they too independent or too indecisive to operate your franchise? Do they have the social skills you demand to build relationships with repeat customers?

This behavioral information brings you closer to the real person who sits before you at Discovery Day, when both interested parties are still interviewing one other...

Have your begun processing payments with a smartphone or tablet yet? Maybe they're seriously considering implementing a mobile processing strategy like many other businesses and micro-merchants. That's wonderful. But here's the bad news. Though mobile payments are growing exponentially, the security portion of processing credit cards via mobile devices has seriously been neglected.

Get up to speed with the issues
Mobile processing (e.g., Square, GoPayment) is a double-edged sword. On one hand, it allows more processing flexibility, but it also has the potential to dramatically increase fraud and business liability. The problem with mobile devices is that they weren't made for security or payment processing. Hackers know that, and they are after customers' profitable payment data...

Multi-unit franchisee Jason Duffy may only be 38 years old, but he could write a book about being successful in business during tough economic times. After all, "that's all I've known as a franchisee, since I opened my first Dunkin' Donuts store in Phoenix on Aug. 15, 2008, during the worst economic times in 60 or 70 years," he says.
Having survived his baptism by fire and come out ahead, Duffy, recently named one of the 40 Under 40 to watch by the Phoenix Business Journal, now has 51 Dunkin' Donuts stores in four western states.
His path to franchising began with a fateful meeting nearly 20 years ago with John Luther, who would later become president, CEO and chair of Dunkin' Donuts. A 19-year-old Duffy, who was working his way through college back east in Amherst, started a gutter-cleaning business...

Technology in the mobile space is moving at blazing speed. Normally, franchise systems tend to run a bit behind the curve when it comes to new technology, but not so in the loyalty space. We are seeing some brands get extremely aggressive with new technology, but it does not always seem to deliver the results they are looking for.
More often than not, franchisors may not even know what the results are, as there are challenges tracking the ROI on these campaigns. Most of the latest and coolest-looking technology in the space has not been integrated with existing technology, making tracking the results of a campaign difficult at best.
I have seen many of these new, cool technology platforms come along, but at the end of the day they are engaging between only 1 and 5 percent of a brand's total customer base and are not really driving any new ones in...

Steve Baliva knew Hurricane Sandy was on its way and headed for the New Jersey coast. So he huddled with team members from his area T.G.I. Friday's restaurants to prepare for what many forecasted to be the storm of the century.
"We knew it was coming and thought that we had five restaurants in the path of it," says the Tom's River, N.J., resident. "Turns out we had seven--five in Jersey and two on the border of the Pennsylvania side. We were laying up plans to close down on Sunday, Oct. 29, since we knew we'd lose power."
Baliva, T.G.I. Friday's 2011 Franchisee of the Year and vice president of restaurant operations for Metz Culinary Management, lives within 10 minutes of several of the restaurants. So on Tuesday he headed out to check on things...

If your company thinks "customer service" is limited to greeting a customer and dealing with their complaints, you're missing the big picture - and tremendous profits.
The reason most companies are weak on customer service is because they don't understand the financial impact a strategic customer service plan can have on the bottom line.
Make no mistake about it: The customer experience is the one true way you can dominate the market, crush your competitors, and have money flow from the sky. It is the only strategic weapon that cannot be copied - and you'll have a 10-year lead time before your competitors figure out how to duplicate your success.
For example, many companies overlook customer service and take the easy way out...

I found a fascinating website while trolling around the Internet recently. It's called Statistic Brain (www.statisticbrain.com) and it has data and rankings on all kinds of topics, from hair loss to consumer spending.
The numbers that caught my eye had to do with start-up business failures. Did you know 25 percent of start-ups strike out within the first year? Thirty-six go down in the second, and 44 percent in the third. Nearly three-quarters of businesses that start in one year will be shuttered 10 years later.
Why? "Incompetence" is the No. 1 reason, according to Statistic Brain. My fun new website cites specific pitfalls including "living too high for the business," "lack of planning" and - this one's a doozy - "non-payment of taxes!"
All those numbers made me want to pat myself on the back...

Bradley was failing, and failing badly.
Not only did the members of his team avoid him in the lunchroom and never stop by to say “good morning,” they had begun taping a target to his back every day and everyone had signed up for archery lessons. Bradley’s leadership style just wasn’t working.
Unfortunately, Bradley’s core problem was that he suffered from several leadership myths he’d picked up from pop culture. Like many of us, he didn’t have any formal training in leadership so his beliefs came mostly from watching movies. Leadership to Bradley was square-jawed men taking on insurmountable odds, rallying the troops with award-winning speeches, and humbly waiting for passionate kisses from pretty co-stars. Bradley thought he was prepared to be a great leader because though he didn’t have a square jaw and no one had tried to kiss him in years, he had been practicing his motivational speeches in the mirror...

Franchisees are looking hard at how to recruit and retain Millennial employees. The oldest Millennials are in their mid-30s (born in 1977 and 1978) and have been a part of the workforce for more than a decade. The youngest, though, are still a few years away from working age. The group in the middle (late teens to mid-20s) is the one that many franchise companies have working on their front lines.
So what's the best way to work with this group, which is becoming increasingly more powerful in the workforce? The same way you should market to them: embrace the Millennial-inspired "participation economy."

What is the participation economy?
The participation economy developed because Millennials want to be active participants, not passive consumers...

For better or for worse, social media marketers know that their clients and/or superiors are judging the success of their efforts at least in part by the number of follows, likes, +1s, fans, new buddies, comrades, etc. they can garner. And while it’s probably true that a little too much emphasis is placed on this metric, it doesn’t change the fact that achieving sustained follower growth is a big deal.

On Twitter, Google+, Pinterest, and others, it’s somewhat easier to get people to like or follow your franchise’s page than it is on Facebook. This is because on these channels brands can actively follow other companies, industry leaders, and other account pages, knowing that a certain percentage are going to follow them back...

One of the hottest areas for marketing and branding executives is integrating their growing online media efforts with their existing media channels. It's also one of their biggest challenges, as it involves not only mastering new technologies and tools, but also storming the traditional walls (silos) of separate departments, functionalities, and operations. The Integrated Marketing Survey 2013: A Progress Report on the Integration of Digital Marketing from IgnitionOne, a digital marketing technology firm, may help you understand where you are in the pack - and how to jump ahead of the competition.

The report has three main sections: Managing Marketing Channels, Managing Technology, and The Challenge to Integration. The following are excerpts from the Foreword, Executive Summary, and Conclusion...

Although some aspects of SEO haven't changed much in the last decade (relevant content, page titles and descriptions, keyword research, the importance of page loading speed), the influence of social media and inbound marketing are causing seismic shifts in search optimization - especially at the enterprise SEO level.

Having the right in-house team or external partner is now a fraction of the ROI equation (i.e., ranking that actually has an impact on revenue). Maybe that's why so many businesses still invest the bulk of their marketing budget in paid media instead of organic search - an expensive mistake, considering 75% of click-throughs come from organic results.

Organic SEO provides cumulative benefits that just keep improving with every investment of time or budget; moreover, it is an owned outcome...

Content Marketing: 10 Best Practices for Success
Content marketing has become a major force on the Internet in the past couple of years. As Google continues to tighten up its algorithms to penalize shady search engine optimization practices, and the competition for attention intensifies, the only sure thing for smart marketers is creating great content. In his blog, "The 10 Commandments of Content Marketing," Jeff Bullas, author of "Blogging the Smart Way," lays out what he considers the top 10 things to know for successful content marketing. These include 1) Create the best content you can; 2) Write awesome headlines; and 3) Create focused content. If you are looking to get better at content marketing, the full list is well worth reading and adopting...

Here's a scenario. You are looking to hire a new team member. You've reviewed applications, held interviews, and narrowed it down to two candidates. They both had strong interviews, have the same availability, and will take the same hourly salary. The only difference is that one has experience in the role, and the other has experience in the role, as well as training in other areas that could be useful.
Who do you chose for the position? The candidate who can fill more than just one role seems like a no-brainer. Right?
If an applicant with the ability to handle more roles seems like the obvious choice, then why isn't cross training employees common?

Why Companies Shy Away
Many businesses worry that cross training is too time and cost prohibitive...

Golden Corral Franchisee Leverages ‘hard Knocks’ Into System’s Biggest Success Story


By Most Anyone’s Definition, Eric Holm Is A Business Success Story. The Winter Park, Fla., Man Owns 30 Golden Corral Restaurants, Bringing In $155 Million In Annual Sales And Providing Jobs For More Than 3,000 Workers In Georgia And Florida.
But When You Ask Him About His Life And Career, Holm Is Just As Likely To Tell You About His Two Bankruptcies Or The Time His Independent Restaurant Fell Into A Sinkhole As He Is To Tell You That He Is The Most Awarded Franchisee In Golden Corral History.
“i’ve Been Broke Two Times In My Life And I Didn’t Enjoy Either One Of Them,” He Says. “but I Didn’t Hang Out And Have A Pity Party...

Spencer Smith may be quiet and unassuming but don't let that fool you. On the inside he's a savvy business operator who has been successful with multi-units and multi-brands and has earned his success by following "the program" and the Golden Rule. The 2013 winner of Multi-Unit Franchisee magazine's Role Model MVP Award, he says following the program is a simple, yet powerful concept.
"Years ago, I read an article about franchising and some of the mistakes people make," says Smith, who opened 39 Aaron's and two Big O Tires stores across 8 western states--all in under 9 years. "I gleaned from that article that when you buy into a franchise, you're buying into doing business that particular way. If you have to be a maverick and reinvent the wheel all the time, both you and the franchisor will be frustrated...

"Age 85 is a bad time to go broke," says retirement planner Jeff Gorton. Personal savings, various investments and, yes, Social Security may prove to be short of what you'd expected.
"Budgeting how you spend money before retirement can often be a misleading measurement of how you'll actually spend it during retirement," says Gorton, a veteran Certified Public Accountant and Certified Financial Planner, and head of Gorton Financial Group (www.gortonfinancialgroup.com).
"Spending 40 hours a week at work not only earns you a paycheck, it also keeps you from spending money on more vacations, matinee screenings at the movie theater, extra trips to the mall, or shopping online. You need to be exceedingly realistic in your planning, and the five years before retirement are actually the most crucial in solidifying post-employment stability...