Franchise Articles

Develop a System-Wide Vetting Process

Who is responsible for innovation? For many franchise concepts, innovation is the sole domain of the franchisor as it safeguards the brand's equity: "Do only things that I say, and do them exactly as the operations manual specifies."
Franchisor-led product innovation is most prominently seen in food-related brands in the form of the centralized test kitchen. However, franchisor-led product innovation often leaves an invaluable resource untapped: the franchisee. Think McDonald's Filet-O-Fish, invented in 1962 by franchisee Lou Groen to make up for slow Friday burger sales.
Also, despite the positives provided by franchisor-led product innovation, a brand runs the risk of becoming entrenched in its own singular manner of thinking--a competitive threat in the face of ever-changing consumer tastes...

What are some of the ways you measure the effectiveness of your brand's consumer marketing efforts?

Jason Smylie
CMO
Capriotti's Sandwich Shop

One of the most widely influential business thinkers, Peter Drucker, once said, "What gets measured, gets managed."
This sage advice applies to every field, but often is tricky for marketers. Many people are under the assumption that marketing is an intangible field where results are esoteric and unidentifiable. With so many variables affecting customer traffic, how are we to know whether it is a marketing campaign that is making a difference or something as simple as a sunny day? Operators too often analyze a marketing campaign's success by how it felt, rather than looking at data...

Growing up on a farm in the Texas panhandle, Mike Treadwell was looking for a way to stretch his entrepreneurial wings. He thought of opening a restaurant. His first was Alfie's Fish 'n Chips in Amarillo, next came Mike's Fried Chicken & Fish.
But an eye-opening moment came one day when a friend who operated a nearby taco stand came over and asked Treadwell about his food and labor costs. "I said, 'Heck, I don't know. I've got money in the bank so I guess I'm doing okay.' He said, 'Oh Mike, you've got to know your food and labor costs if you're going to be in this long term,'" Treadwell recalls. "I thought at the time that I wasn't smart enough to do this."
Deciding he need to educate himself about the food and franchising business, he sold both of his restaurants and moved to Little Rock to manage a KFC restaurant for a franchisee...

Customers want a consistent service experience. It seems like that would be easy to deliver yet it is not the norm. Since it is not the norm, consistency becomes a customer differentiator. Check how well you deliver consistency with these strategies.

1. Be reliable. Get it right the first time. Whatever the customer needs, they want you to be reliable and accurate. Customers don't want to deal with an organization multiple times due to your shortcomings. Deliver what you promise.

2. No surprises - unless they are positive ones. Most surprises are ones where the company does not deliver as promised. Surprises can include interactions with challenging employees, lack of follow-up, and slow responses to social media communication...

Building a strong franchise system through unit growth is a team effort requiring participation from the entire organization. To succeed more often in attracting and capturing the best possible candidates for your system, it is essential for all departments to contribute.

Most franchisors don't take the time to educate and involve all their key department heads in the development process. But without this interaction, conflicts can arise about the capabilities of new franchisees, with blame for any failures placed on the franchise development department - even though operations didn't want to be involved in the selection process. These conflicts usually occur when a new franchisee is struggling after a few months and the discussions start focusing on whether the franchise was granted to the right person...

Franchising has proven itself to be a bellwether business model, surviving the financial crisis and adding units since the early days of the current economic recovery. Between 2008 and 2013, the franchise community netted more than 25,000 units, a CAGR of 1 percent. This is impressive, given the economic environment. Praise should be given to the hard work of development staffs across all of franchising for executing in a tough environment.

Given these successes and the emphasis franchising places on growth, it is easy to continue to push for market share and to allocate additional dollars to development efforts. However, before finalizing your budget, answer this question: How many of your units, regardless of the reason, closed their doors in the last 3 years? If the answer is more than zero your brand is likely leaving hundreds of thousands of dollars on the table...

franchising, international, international franchising, overseas growth, overseas expansion, franchising abroad, united franchise group, tony foley


Franchising Abroad: The Economic Argument

By Tony Foley

The world is getting smaller. Customers come from and visit everywhere, and brand names are powerful. There are many reasons to take your brand away from your home soil and overseas. Among the most compelling are the economic ones. International expansion has the power to benefit both franchisor and franchisee, to establish important relationships across country borders, and to create brand name recognition far more powerful than anything you can cultivate purely domestically.

Franchises are particularly attractive for global expansion, thanks to the model and the blueprint they provide...

Objective: Qualify the prospect, build rapport, and establish the process
Length of conversation: 45 to 60 minutes

This is the third part of an excerpt from my book that focuses on the program review step of the franchise sales process. Part 1 introduced the program review. Part 2 looked at pre-closing. This week, in part 3, we look at how to wrap up Step 2 of "The Six Steps to Selling Success" that I've detailed in my book, Grow to Greatness.

Now it's time to conclude the program review by preparing your prospect for the next stage of investigation. Reconfirm their interest by asking, "How would you like to proceed? Good, you say you want to continue. Then the next step is to send you our franchise documents, referred to as the Franchise Disclosure Document, or FDD...

Measuring success by how many people he helps reach their goals

In a time when many business executives are looking at what to cut because of rising payroll and healthcare costs, Michael 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...

How many direct reports do you have? Consider these four scenarios.

What if you could give someone a really special gift that would cost you no money at all? And what if that no-cost gift could significantly change another's life? Well, you could and it will.
You can give yourself as a "gift" to someone you love, believe in, or admire by taking that person on as your Greater Than Yourself (GTY) Project. Think of the Greater Than Yourself approach as Extreme Mentoring, if you will.
I'd highly encourage you extend yourself in this deeply meaningful way. I think you'll notice all kinds of payoff. And to help you make this relationship official (whether or not you already have a GTY Project), we've created this gift certificate for you to use.
Please read the following text from the certificate...

More and more small business owners are selling their companies, with sales hitting a four-year high in early 2013 in the United States, and Canada predicting its largest small business turnover ever in the next five years.
"Many of our CEOs are baby boomers approaching retirement age," says Kathleen Richardson-Mauro, co-author with Jane M. Johnson of a practical new guide, "Cashing Out of Your Business," (www.richardsonmauroandjohnson.com).
"We're about to see a tsunami of ownership transitions and Kathleen and I worry that too many of these small business owners are not taking steps early enough to plan for it," adds Johnson.
Richardson-Mauro, a Certified Financial Planner, and Johnson, a Certified Public Accountant, specialize in helping business owners successfully transition out of companies and achieve their goals...

We asked Annica Kreider, vice president of brand development at Mellow Mushroom to discuss the role of diversity in the company's marketing department and in its marketing strategies. Here's what she had to say.

Marketing to a diverse consumer base is something we not only discuss often among our team, but something we also embrace internally from a talent management standpoint. From a leadership perspective, I'm a huge believer in having a very diverse team in terms of demographics, psychographics, and lifestyle. If everyone on a team looks alike, dresses alike, and does the same things on the weekend, I think you're missing the boat in terms of creativity and brand advancement.

With most elements of our creative we like to push the envelope and be as provocative, interesting, and engaging as we can...

The Franchise Consumer Marketing Conference (FCMC), now in its fourth year, is gearing up to surpass attendance records once again. Following the inaugural conference in San Francisco, the conference has expanded each year, in both the number of franchisors attending and the number of suppliers exhibiting their marketing services and products. This year's conference will be held June 24-25 in Atlanta at the InterContinental Buckhead.

Focused on the intersection of franchising and consumer marketing, and of marketing with technology, the annual conference attracts CMOs, brand managers, and marketing professionals, franchise CEOs and presidents, and franchise operations and technology marketing pros - bringing them together with one other and with leading suppliers of franchise services, social media marketing technologies, and more...

What do you believe about SEO? And how do you know it's true?

Perhaps it's time to read "17 SEO Myths You Should Leave Behind in 2014," a report from inbound marketing software platform provider Hubspot. The report, written by Rebecca Churt, SEO marketing manager at Hubspot, aims to dispel those myths and help online marketers improve their performance. From the introduction:

"SEO has changed so much in the past several years that many marketers aren't sure what's outdated, what's important, what will actually move the needle, and what's simply wasted effort. This guide is going to point out all of the most common myths and assumptions about how SEO works and debunk them for you, so you're not wasting a single moment on things that simply don't matter for SEO in 2014...

Reputation Management: "You can't opt out..."
It's bound to happen: one of your customers will have a problem with your business - if not at one of your stores, then at one of your brand's, even if it's across the country. Some will take their beefs to the Internet, whether on social media sites or on a social reviewing platform such as Yelp. How do you deal with it? Here are 10 tips from Chris Silver Smith, president of search marketing agency Argent Media, posted on Search Engine Land, to help you manage the inevitable and lessen the damage - and, ideally, turn things around and create a loyal customer.

Time for a New Look at Google+?
Google+ is the second most-populated social media platform (540 million users in December 2013), yet few seem to know quite what to do with it, says Corey Smock, community manager at Likeable Media...

Do you know there's an easy way to identify and predict how cybercriminals might get into your organization? Fortunately for already-busy franchisees, the process isn't as complicated as you may think. Vulnerability management is the simplest way for franchisees to locate and patch security holes before would-be data thieves find and exploit them.
Vulnerability management is the process, implementation, and controls that identify the location of weaknesses in an infrastructure that could act as secret tunnels into your network. Ultimately, it's a critical foundation on which to build your business's network security.
While there is no such thing as being hack-proof, data thieves and cybercriminals are notoriously lazy. They would much rather go after low-hanging fruit than invest the time and trouble to break into a secured network or website...

There has never been a time where the nature of commerce is changing as rapidly as it is today. Technology been moving at blazing speed, not only around mobile payments and tablet-based POS systems, but also in the very payment types now available. No longer is it just cash, check, or charge. A quick look at our data and projections about those payment types points to a 10-year trend showing major shifts since 2006 (all numbers are in billions of transactions):

San Jose, CA, February 20, 2014: More than 300 franchise marketing executives and suppliers packed the Ritz-Carlton Buckhead in Atlanta in June 2013 for the 3rd annual Franchise Consumer Marketing Conference. What began almost three years ago as a small convergence of franchise marketing executives has tripled in size and scope and shows no signs of slowing.
Approaching its 4th year, the Franchise Consumer Marketing Conference is gearing up to surpass expectations once again, in both the number of franchisors attending as well as premier suppliers of franchise marketing products and services.
Franchise Update Media is pleased to announce Heather Neary as the Chairperson of the 2014 event. "This event is a unique one" emphasizes Neary, "and in a world of more responsibility and more demands, this conference is one of a kind...

Charles Smithgall has a system. He operates with a simple business plan and model that focuses on executing fundamentals and getting results. He's refined the process over the past 18 years he has been an Aaron's franchisee. "This is my fifth career, but my first in franchising," says the 71-year-old. "It's a fantastic business model because it allows me to focus on operations and execute. Everything else has already been worked out."
And working out it is for Smithgall. Back in 2008 his SEI/Aaron's company had 61 locations in 7 states. Today, he has 105 locations in 10 states. And though he's preparing to hand over the reins to his son, Chas, in January 2015, Smithgall is not slowing down--in fact, he's stepping on the accelerator.
"We're right in the middle of a 10-year goal to grow to 200 stores, $250 million in net revenue annually, $20 million in net profit annually, and to create 25 millionaires within our system," he says...