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Franchise Articles

Browse our selection of franchise articles and features to help further your knowledge in opening and operating a franchise business. Our exclusive features cover the , , , , , , and site of the franchise business. Written by the editorial team that produces Franchise Update Magazine and Multi-Unit Franchisee Magazine, the franchise industries premier magazines.

Feature Story:

Positional Power: 5 Ways To Find Common Ground With Your Business Partners »

By Dan Schneider

If you happen to be an active majority partner in a business, you may sometimes find yourself struggling for alignment with your minority partner or partners, especially if the minority partners are also involved in the business. They assume because they have some percentage of ownership that they may have the positional power to make unilateral decisions that move the business in a direction that suits their liking. In short, they throw their "weight" around; and they pay little attention to the unintended consequences of doing so.
If you currently find yourself in this position, here are some approaches that many have used successfully to get everyone moving in the same direction again. Your success with them will depend largely on how strongly you believe and how well you remember that the deceptive or coercive use of these principles can further complicate the situation...

Feature Story:

Why Franchisors Fail – And How To Help Them Succeed, Part 6 »

By Joe Mathews and Thomas Scott

This is the final installment in a 6-part series about why new and emerging franchise brands fail. In the first two parts, we discussed 8 reasons they fail. Part 3 began our discussion on how franchisors can get it right. This week we look at the financial rewards of “doing it right.”

If you were to contact a business broker to value your franchise, if your EBITDA is under $500,000 you would hear your business valued at about 3 to 4 times EBITDA. However, if your EBITDA started cracking $1 million a year, that valuation would bump up to 6 to 8 times EBITDA.

Most franchisors don’t have 100 franchisees or units and never crack $500,000 in EBITDA. Often the difference between a 3–4X EBITDA valuation and a 6–8X EBITDA valuation is the next 100 franchisees or units...

Feature Story:

Phishing - Don't Get Hooked!: The Basics On Avoiding This Old-School Scam »

By David Ellis

Phishing may be old news, but it still works. Ongoing education about phishing scams is essential for anyone who uses your system. It doesn't matter if you have the most secure security system in the world. It only takes one untrained employee to be fooled by a phishing attack and give away the data you've worked so hard to protect.
As part of your security awareness program (PCI requirement 12.6.1), your personnel should be trained at least annually on phishing. I recommend sending monthly memos, or displaying a poster outlining the telltale signs of a phishing attempt. (You can also hang this article in your break room!)
Phishing continues to remain a lucrative criminal profession in our email-packed world. Hackers send out more than 150 million fraudulent emails daily, hoping just a few will click on attached links, documents, or pictures (80,000 people fall victim to these scams each day)...

Feature Story:

How To Buy Print Advertising For Maximum Results »

By Steve Olson

Magazines, newspapers, direct mail, billboards, and other print media have been the backbone of business-to-business and consumer marketing for centuries. Kicking back and reading a magazine in the comfort of our home, office, or a coffeehouse or on the beach, airplane, train, or bus is a personal experience that can never be replaced. We aren't interested in skipping about on a computer, or we just don't have one at our fingertips. Print is portable, tangible, and easy on the eyes. The convenience of print and a more captive mindset provide strong advertising opportunities to reach franchise prospects, opportunities that should never be abandoned for the flash of electronic media.

Here are some quick tips that will help you make better decisions when purchasing print advertising:

Feature Story:

From Summer Job To CEO: Rich Wilson Leads A Turnaround At CertaPro Painters »

By Kerry Pipes

Rich Wilson needed to earn money for his college education. The way he saw it he had two choices. "I could either spend a summer crab fishing in Alaska or start my own business," recalls Wilson, president and CEO of CertaPro Painters. "I decided to stay dry."
So in 1987 he became franchisee of College Pro Painters, a painting company that targets business-minded students. It worked out: he made enough money to pay off his tuition bills and enjoyed running a business so much that, rather than following his plan to attend law school after graduation, he joined College Pro's corporate team, becoming a division vice president by 1992. He spent the next 5 years with the organization before a couple of career turns at Aamco and Maaco before settling in at CertaPro Painters in 2003...

Feature Story:

Old Chicago: Repositioning A 37-Year-Old Brand Takes Planning And Patience »

By Mike Mrlik

Before rebranding to Old Chicago Pizza & Taproom in 2013, Old Chicago Pizza & Pasta had a successful 37-year history that served three generations of guests. The neighborhood restaurant, founded by a few buddies in Boulder, grew steadily to 96 restaurants in 22 states.

The brand made a lot of loyal friends along the way, but though longtime pizza lovers enjoyed the familiar comfort of the traditional beer-and-pizza combo, the U.S. food scene was quickly evolving. Diners were becoming more knowledgeable about food and drink and were hungry for more upscale options with an emphasis on artistry and a passion for all things craft.

In November 2010, Old Chicago evolved into part of CraftWorks Restaurants & Breweries, the nation's largest brewery restaurant...

Feature Story:

Anger Management: Handling Irate Customers And Difficult Situations  »

By John Tschohl

It's a tough job but somebody's gotta do it.
Facing off with a screaming, unreasonable, irrational customer represents the ultimate test of any employee's service skills. It can take you to your breaking point if you are not aware and careful. Staying grounded and above the fray requires you to find inner strength, and persevere beyond the initial difficulties.
With many employees a screaming irate customer will ruin their day. It's hard to keep motivated when 20 minutes into your shift a customer lets you have it. The bad news is most employees have never been trained to successfully handle these customers. Their ego gets in the way. They call management for support. In some call centers the employee just hangs up thinking no one will know...

Feature Story:

Tapping The Power Of Word Of Mouth »

By John Tschohl

1) Give 'em something to talk about. Just having a satisfied customer and giving them service that is simply good enough will not get anyone talking. You've got to go above and beyond the call of duty if you want your customers to talk about you.

Word of mouth is instrumental in driving your company's success. Verbal buzz about your business or product passed from one reliable person to the next is still the most cost-effective way to build a loyal following, expand your business, and reach new customers. How does it start? Give them an amazing customer experience and encourage your customers to think of themselves as partners in your business. The organization chart at your business should show the customer at the top.

How your customers feel about you and what they are prepared to tell others about you can influence your revenues and profits...

Feature Story:

Recruiting And Hiring: Experts Offer 6 Ways To Use "Inboarding" To Improve Employee Productivity »

Multi-Unit Franchisee

Four out of five companies can testify that onboarding new hires leads to such positives as higher job satisfaction, better job performance, greater commitment to the organization, and stress reduction. According to the author of a new book on business trends, many companies are now doing the same for existing employees, a process called "inboarding."
"Inboarding is really just an extension of the idea of onboarding. There is no reason to think that it is too late for the rest of the roster who arrived after onboarding began or have already gone through onboarding," says Dana Borowka, co-editor along with Ellen Borowka of the new anthology Cracking the Business Code.
According to Larry Cassidy, a contributor to the new book, the purpose of inboarding is to set existing, rather than new, employees up for greater success...

Feature Story:

Customer Insights: The Power Of Fact-Based Marketing »

By Jack Mackey

"Insight is a new configuration of knowledge that breaks the existing pattern of thinking in an unexpected way." This definition of insight comes from Luke Williams, professor of marketing and innovation at the NYU Stern School of Business. In short, insights drive intelligent marketing decisions that, when executed well, drive growth. Williams spoke at the Franchise Consumer Marketing Conference in Atlanta in June.

There it was also my pleasure to host part of a wide-ranging panel discussion on marketing strategy, planning, execution, results, and measurement. Executives contributed their insights obtained in diverse industries from child education to senior services. Retailers, personal service providers, and restaurant operators all shared surprising lessons...

Feature Story:

Social Media Roundup: Aug 12, 2014 »

By Daniel Lieberman

Email Marketing Is Still Effective - When Done Right
Email marketing is still one of the most successful ways to reach people on the Internet. Almost everyone who is online has is an email account, and their inbox is the first and last place most people check every day. To get the most bang for the buck with their campaigns, smart email marketers follow these three rules:

Feature Story:

Talent Management: Hiring, Training, And Retaining Great Employees »

By Eddy Goldberg

The benefits of having employees who are better trained, more engaged, and who stay longer are clear. You might even call it the Holy Grail of HR. What's not so clear is exactly how to achieve that cherished goal. Some multi-unit operators rely on their franchisor-provided training, but that primarily teaches new hires about the brand and how to perform their job. Others supplement this with their own programs, adding training and education in customer service skills, teamwork, coaching, and their organization's values and culture. But not everyone has the resources--or the know-how--to do that.
One basic choice in how to hire, train, and retain top-performing employees is whether to do it in-house, or to outsource parts (or all) of their employee and management training...

Feature Story:

Dickey's Barbecue Pit: New Chief Brand Officer Talks Development »

By Kerry Pipes

Christie Finley, chief brand officer at Dickey's Barbecue Pit, brings vision, drive, and creativity to the nation's largest barbecue brand, with more than 400 locations in 42 states. Finley says she's focused on "the basics done right," and on promoting the brand's core values of heritage, innovation, and craftmasnship. She previously led the strategic development and implementation of advertising and marketing campaigns at a diverse range of consumer and B2B brands, in both corporate and agency roles. Her experience will come in handy as the Dallas-based brand begins aggressively expanding to the West: Dickey's recently signed a 100-unit deal in California and has its sights set on Washington and Oregon.

Describe your role as CBO...

Feature Story:

Coaching Your Support Staff: Training The Trainers »

By Keith Gerson

In one of our recent franchise surveys, 62 percent of CEOs and operations VPs and directors responded that they do not have a formal training program for their operations consultants and field staff. For those who do, 83 percent indicated that their training lasts from only hours to two days at most. Not much of an investment given what's at stake.

The support staff has the responsibility to: 1) drive franchisee performance; 2) drive franchisee satisfaction; 3) ensure franchise compliance; and 4) create engagement and alignment. What follows are some general thoughts on how to increase and improve franchisee performance through improved coaching and development of your support staff.

• Coach the coaches. Most of us would agree that franchisees do not intentionally or knowingly engage in self-destructive behaviors (despite appearances to the contrary)...

Feature Story:

On A Mission: Michael Kulp Takes Care Of Business And His People »

By Debbie Selinsky

Michael Kulp thinks big. While some business executives are looking at what to cut because of rising payroll and healthcare costs, Kulp, president and CEO of KBP Foods, a $250 million restaurant company with units in nine states, is taking an "inverse" approach.
"We're using our growth as a vehicle to handle costs rather than shrinking the business down," says the 38-year-old Colorado native. "We're making sure that our growth and cash flow outpace the costs of healthcare and payroll." This approach illustrates what Kulp finds most rewarding about his job, he says. "Our mission is to develop our people personally, professionally, and financially."
With that goal in mind, KBP Foods, which includes nearly 300 KFCs, Taco Bells, and Long John Silver's, took another major step...

Feature Story:

Come Together: CEO Shares Tips For Turning Wasted Meetings Into Fruitful Gatherings »

Multi-Unit Franchisee

In survey after survey company meetings get knocked by everyone from employees to senior executives as being among the biggest waste of work hours.
In one poll, by Office Team, 45 percent of senior executives said their firms would be more productive if they banned all meetings at least one day a week!
"The problem that often occurs - beyond the obvious, like lacking a clear agenda - is the underlying current of competition that each person brings to the table," says Berny Dohrmann, chairman and founder of CEO Space International, and author of Redemption: The Cooperation Revolution.
"Competition pulls people apart; cooperation brings them together. Signs that competition is causing unproductive meetings include one or two people dominating the floor; individuals touting their achievements; people consistently failing to contribute their ideas because they fear being criticized or ridiculed," he says...

Feature Story:

Why Franchisors Fail - And How To Help Them Succeed, Part 5 »

By Joe Mathews and Thomas Scott

This is part 5 of a 6-part series on why new and emerging franchise brands fail. In the first two parts, we discussed 8 reasons they fail. Part 3 began our discussion on how franchisors can get it right. The remaining installments dig further into what they can do to succeed.

Financing: Isn't there a better way?
Private equity has entered franchising in a big way. If you are an emerging growth franchisor who has not attained royalty self-sufficiency, chances are your brand has little book value because you haven't profitably monetized your intellectual property.

The franchise may not yet be creditworthy, lacking normal credit lines or access to commercial loans to fund growth. Or it still may be worth less than the franchisor has already invested, since a franchisor's book value is determined by 1) its assets (and many franchisors don't have many hard assets), 2) EBITDA (emerging growth franchisors typically won't have strong EBITDA), and 3) long-term predictability of their royalty streams (franchisee fee revenue is a "one-time hit" and not sustainable, so private equity firms will often discount the value of the franchise fee revenue the same way they would discount a one-time tax rebate; they will, however, assign some value to the predictable royalty revenue of new franchisees who are not open yet)...

Feature Story:

The Six Steps To Selling Success: Summary »

By Steve Olson

In previous issues of this newsletter, we've covered many components and aspects of The Six Steps to Selling Success from Steve Olson's best-selling book "Grow to Greatness," a guide to building and sustaining a successful franchise brand. Amidst the daily grind and necessary tasks involved in franchise sales and development, it's easy to lose touch with the big picture. That's why this week we present a summary overview of those steps. Pin a copy to your wall, keep one in your wallet, make it your home screen. However you do it, remember it's always wise to take a step back to broaden your perspective, and that there's always room to fine-tune your franchise sales process and improve the skills of your team.

The Six Steps to Selling Success

Feature Story:

Big Operator, Bigger Heart: Family, Philanthropy, Diversity, And Drive »

By Debbie Selinsky

Tony Lutfi, who immigrated to the United States from Lebanon, is one of the most successful QSR franchisees in the country, rapidly growing his five food brands to market domination and record revenues.
Lutfi, who first ventured into franchise ownership in the early 1990s as a franchisee of Arby’s and Long John Silver’s in Northern California, now owns a whopping 130-plus restaurants in California, Nevada, Arizona, Texas, and Missouri.
No one-trick pony, in 2011 began diversifying his portfolio beyond food, and just 3 years later operates a total of 29 Sears retail stores: 17 Sears Home Appliance Showrooms, 3 Sears Appliance & Hardware stores, and 9 Sears Outlet stores.
His MarLu Investment Group was able to accomplish such rapid growth across brands because, he says, “We keep the same focus on culture that has kept us in business and away from trouble...

Feature Story:

Any Portal In A Storm?: Re-evaluating Portals As Lead Generators »

By Marc Kiekenapp

The Internet portals continue to be one of the most successful inquiry generators for franchise sales. Like all of our businesses, the portals have gone through a transformation and are making many positive changes so they can continue to provide us with good inquiries.
Like a ship on the sea, your brand needs to find the right port (or portals!) to dock. And, just as ships are not all the same size or docking at the same ports, all brands are not created equal. Bigger ships are more expensive and need deeper ports, while smaller ships have many ports to choose from. Think of your brand as a ship and find the ports that fit you best.
The key to finding the right portal for your brand is not just a matter of calling up a provider, but knowing what you are looking for, who you are looking for, and where you are looking for franchise candidates...



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