Franchise Articles

For many franchisors, the traditional advertising vehicles - portals, print advertising, PR, and broker networks - do not appear to be working as effectively as they were five years ago. We predicted the slow decline of these once-proven vehicles in our white paper, "The Future of Lead Generation: 6 Big Changes Which Will Alter Franchising Forever," available as a free download. Since we've already written a detailed paper on this topic, we won't rehash what we still believe to be highly relevant information. Instead, we will focus only on additional insights we've had since the paper was published a few years ago.

For those who have read the paper, you may remember we took issue with franchise portals for not doing more to provide franchisors with better educated, more informed, and buyer ready leads...

In the previous two issues of FUSR, we published (1) a high-level overview of the 2012 Annual Franchise Development Report (AFDR), followed by (2) a selection of highlights from the report. In this third article, we provide more findings from the report, which drew on detailed responses from 110 franchisors representing 109,936 total units (79,254 franchised and 30,682 company-owned).

When sellers are contemplating a decision regarding the sale of their business, they overwhelmingly select the bidder with the highest price, only to find afterward that this might not have been the best decision for their circumstances. Just as a financing decision is more complex than simply getting the lowest interest rate, the process of selecting the optimal buyer for a particular transaction entails more than simply selecting the one offering the highest price.
For business owners, the decision to sell requires careful consideration. Frequently, sellers arrive at their decision to sell after a long and thoughtful assessment, which includes an analysis by the seller of their personal, lifestyle, and financial considerations. Unfortunately, after the decision to sell is made, many sellers give considerably less thought to the buyer selection process...

The three previous issues of the Franchise Update Sales Report (1) introduced the topic of lead generation success; (2) covered Step 1 and the beginning of Step 2 in successful lead generation; and (3) showed the importance of knowing what your franchise buyers want. This fourth installment builds on those ideas, showing how you can "wow" your candidates and the importance of how you present your concept to them.

Billboard the "wow" factors your buyers want
Promote your top attractions in every way you can: in your sales collateral, presentations, public relations, and by educating staff employees. These "wow" factors, or benefits, will drive qualified candidates to join your system.

Survey your top producers to find out what it was about the business that attracted them...

As savvy franchise companies continue to flourish in a volatile economy, FUSR continues to bring you good news each month, highlighting brands that are adding units, increasing comp store sales, striking deals with investors, innovating, and continuing to grow, whether domestically or overseas. This month we feature a special section on six franchiors' plans for growth in 2012. To be considered for next month's Winner's Column, please send your good news to eddyg@franchiseupdatemedia.com.


New Units & Deals

Del Taco Continues Dallas/Fort Worth Expansion
Del Taco has signed a three-unit development deal with DT Restaurants of Texas. The first is expected to open in April at Hawk's Creek Center in Fort Worth...

Best-selling author of BUILT TO LAST, GOOD TO GREAT, HOW THE MIGHTY FALL and GREAT BY CHOICE to deliver opening keynote address

SAN JOSE, January 30, 2012 - Multi-Unit Franchisee Magazine announced today that Jim Collins, business expert and best-selling author, will deliver the opening keynote address at the 2012 Multi-Unit Franchising Conference (MUFC). Produced by Multi-Unit Franchisee Magazine and Franchise Update Media Group, the 2012 MUFC is the largest national conference exclusively focused on multi-unit franchising and will be held April 24-26 in Las Vegas, Nevada.

Collins will deliver his keynote address on Day One of the 2012 MUFC, Tuesday, April 24, at 9:00 am in The Mirage.

"We are thrilled to welcome Mr...

Sam Covelli says he grew up in the restaurant business working in his father's McDonald's. Under his father's leadership, Covelli Enterprises eventually grew to 26 locations, one of the largest McDonald's franchisees in the country. But after the senior Covelli handed over the company reins to his son, you could say that Covelli Enterprises grew up with Sam Covelli.
Under his leadership, the company's McDonald's holdings grew to 43 restaurants, keeping Covelli Enterprises among McDonald's top franchisees, and an award-winning one at that. Covelli sold off those restaurants and shifted the family business into Panera Bread--and how.
Today, Covelli Enterprises owns a 198 Panera Bread locations, with 20 under construction, making it Panera's single largest franchisee and the fifth-largest restaurant franchisee in the country...

Ray Harrigill believes in diversification. His Sunray Companies has restaurants (Bumpers Drive-In), tanning salons (Palm Beach Tan), fitness centers (Koko FitClub), and hotel properties (Hampton Inn), to name a few. That's because of lessons he's learned along the way.
Harrigill got his start in the restaurant business working in a multi-unit, multi-concept company. When he set out on his own, restaurants were his first choice but he couldn't open new units quickly enough to satisfy his goals. He began opening Blockbuster Video stores in 1999, quickly ramping up to four. But even then it was clear to Harrigill that the Blockbuster model wasn't "a long-term business play." So he began diversifying further.
"I invested some money in comprehensive rehab facilities, which I lost a fortune in, and almost simultaneously got into the tanning business...

Zane Tankel is not waiting on any government job programs to help his business. The Applebee's franchisee is taking matters into his own hands at his 34 restaurants in the New York City area.
His plan is to continue to move ahead creating jobs and incentives for those he would potentially hire as part of his growth for 2012.  That's not surprising, Tankel thinks big. He has expanded his Apple-Metro company by 10 restaurants since the recession began in 2008. 
What is the secret to Tankel's success in uncertain times and what tips can he offer other business owners as they head into the New Year in uncertain economic times? He has boiled down his best thinking into the following areas:
1. Maximize Guest Experience To Ensure Brand Loyalty
Now more than ever, when consumers are counting pennies and gravitating towards value spending - it is essential for every business to deliver on the promise of brand potential...

What are some fresh, innovative ways you are using profiling, targeting, and loyalty programs to acquire and retain more customers?

Linda Fierce, Regis Corp.
Dir. of Marketing, Franchise Brands
At Regis, our marketing team and franchisees are always working together to further meet the needs of our customers. Our strategies are informed by customer feedback from all brands, and with the strength of our franchisee network we are able to share successes and ideas between multiple brands.
One of our most popular loyalty programs is the Supercuts email haircut reminder. As a loyalty program, it not only helps us stay in touch with our customers, it helps our busy customers stay on a haircut schedule they have chosen...

Nearly every company in the world gives lip service to the idea that "our people are our greatest asset." Yet when the Conference Board Survey was released last year, employees were the unhappiest they have been in their 22 years of tracking job satisfaction rates. Around the same time, CNNMoney reported a survey that indicated 84 percent of Americans are unhappy with their current job. And last June, Mercer's "What's Working" survey found that one in three U.S. employees are serious about leaving their current jobs.
Why is this lack of happiness at work important? Job satisfaction is not only the key predictor of turnover rates, in The Happiness Advantage, I make the research case for the fact that the single greatest advantage in the modern economy is a happy and engaged workforce...

No one I know would dispute the benefits technology--specifically the computer--has had on every aspect of our lives. It has put information at our fingertips and allowed us to communicate with others whenever and wherever we happen to be. Technology also has allowed businesses--no matter their size, location, products, or services--to compete on a global basis.
For many businesses, however, that technology has a downside. They have used technology to provide their customers with the speed and convenience of online shopping but, in the process, they have downgraded the importance of human interaction to the stage of near extinction. Many of those businesses don't even include an e-mail address or a telephone number on their websites so that customers can contact them...

Wendy Odell Magus is quite familiar with consumer and franchise sales marketing strategies. She has worked in both corporate and agency marketing roles and for more than 20 years has developed marketing and communications strategies that have gotten results. She has served as senior director of marketing at Sylvan Learning and is currently the vice president of marketing for Kiddie Academy, a child care franchisor with 110 locations in 24 states.
Magus also is familiar with the types of strategies--and how to implement them--that can help franchise brands acquire and retain more customers. We asked Magus for her thoughts on today's rapidly changing customer acquisition strategies and techniques.

What customer acquisition strategies are you using at Kiddie Academy? Driving growth in our brand through customer acquisition and customer loyalty is a multi-faceted process that continues to evolve as our customers' behavior changes and new channels of communication and engagement emerge...

As a franchise CMO, you probably are already using digital marketing to reach customers through email and your company's social media presence on Facebook and Twitter. But these activities only scratch the surface of what is possible using today's digital marketing tools, which can facilitate better integration of marketing initiatives and greater customer engagement. Here are seven ways you can roll out relevant, targeted communications more efficiently and cost-effectively using digital media.

Managing brand strategy for more than 1,150 domestic and international franchise locations is no small task. That's exactly what CMO Heather Neary does for Auntie Anne's, which was acquired by Focus Brands in November 2010. Neary has been a part of the Auntie Anne's marketing department since 2005. Under her leadership, sales grew from $275 million in 2006 to more than $370 million in 2010. We asked her to discuss the role of franchisee satisfaction in creating satisfied customers and a thriving brand.

What do you do as CMO? As a chief marketing officer, it is important for me to work collaboratively with all internal departments to ensure that every decision we are making is in the best interest of our franchise partners' long-term success...

Great question - and, coincidentally, the name of an infographic from Get Satisfaction.com's Social Studies blog. The company, which offers an online tool for building online communities that connect companies with their customers, took a look at online behavior, specifically on Facebook, Myspace, and Twitter. Although the findings are from mid-2011 (a decade in online time), the infographic is both informative and educational in showing companies where they should focus their efforts to create online connections with their customers - and desired customers.

Responses to the first question, What are the top reasons people follow brands?, show roughly similar patterns for both Facebook/Myspace users and Twitter users. The responses, which can be viewed online (click on the infographic for a larger, readable version), are presented here in table form...

There was a time when a hacker needed exceptional computer skills to breach a system. Only the most talented and experienced computer users could successfully bypass even the most minimal security provisions. Sadly, those days are gone. Recent investigations have revealed a disturbing trend: the availability of readily accessible hacking-made-easy tools has swelled the ranks of effective hackers. Now, an amateur with a grade-school computer education can often hack a poorly defended business network in minutes after downloading a free hacking template.
This alarming news should serve as a wake-up call for franchisees to increase their IT security vigilance. Novice hackers everywhere are now standing on the shoulders of computer geniuses, giving them the expertise to hack into systems and steal sensitive information that was previously beyond their reach...

30 predictions for social media in 2012
One thing we know for sure: more people and more businesses will be using social media in 2012. Read what some leading social media experts predict for this year. Among the highlights: (1) thanks to social media, marketing is increasingly being done in real time; (2) social media will move front and center in many businesses' strategy this year; and (3) new applications will emerge to help cope with information overload.

7 reasons blogs should be important to your business
Bloggers are no longer just lone enthusiasts or hobbyists. Individuals start nearly 3 million new blogs every month. New research shows the power and reach of the blogosphere - and the importance blogs have to brands and businesses of all kinds...

"Sometimes interesting things happen in a bad economy," says Dawn Lafreeda, CEO and president of Den-Tex Central Inc. in San Antonio. While the economy continued to hammer the restaurant industry, Lafreeda opened 10 Denny's restaurants in 2010 and 14 in 2011. That brings her total to a whopping 70 in six states (Texas, Missouri, Kansas, Illinois, Arkansas, and Oklahoma).
"That's a lot of growth," admits Lafreeda, who began her Denny's career as a 16-year-old in Orange County, Calif., and bought her first restaurant when she was 23. "But we like to do whatever makes sense, and this made sense for us. In 2012, we're going to focus on fine-tuning our operations, getting acclimated to all our new acquisitions. We're not going to be as aggressive as we have the last couple of years...

Some people wait for the future to happen. Others create their futures. The former depend on the luck of the draw while the latter cut their own deal.
How do you create your own future? By forming a vision and expressing it through a mission statement. Your dream now glitters on the horizon of the future. But you are standing in the reality of the here and now. How do you close the distance? You can't dream your way into the future. You must have a plan. You have to know where you want to go and decide how you're going to get there. The important word is "how." The word "if" won't take you there. You must approach your future with a sense of certainty that your dream is achievable.
Hannibal, the great general from ancient Carthage, once asserted: "We will either find a way, or make one...