Franchise Articles

Recognizing the challenges of today's retail markets, most franchisors are creating strategic solutions for their franchise systems. All systems are bound to encounter distressed units as they grow in number. Legal solutions, already complex given the unique relationship between franchisor and franchisee, are further complicated by third parties connected to the franchise business, such as landlords, banks, vendors, and others doing business with a franchisee.
With the continuing stranglehold on the credit markets, many chains have shrunk or flatlined their growth. But simply closing distressed units without evaluating the circumstances may be shortsighted. Instead, preparing a rescue plan for distressed units will serve both franchisor and franchisee...

Local store marketing (LSM) strategies can go a long way in boosting a brand's growth and nationwide image, says Sandy Lechner, president and CEO of Boca Raton, Fla.-based Synergy Brand Management, which provides turnkey branding solutions for franchises. "The real focus in marketing has to be on the local level," he says. "What we talk to our customers about is the 'war zone'--that one- to three-mile radius around their location. They have to win that battle every day." Here are six strategic areas Lechner says will help build your brand at the local level.

1) Direct mail. It's not as sexy as social media, but direct mail still delivers. Lechner considers direct mail to be the best, most cost-effective, and traceable way to reach prospective and existing customers - and says it should be the largest component of an LSM campaign...

Real estate brokers and franchise consultants have repeated the phrase "location, location, location" for nearly 100 years. Last century, the phrase meant the corner of Main and Main, the well-anchored strip mall, the most affluent ZIP Code. This century, the definition of "location" is less distinct. Thanks to the Internet, the coveted address has moved from 1234 Main Street to ".com."

Restaurants by their very nature are bound to a physical location, but smart restaurateurs are expanding the boundaries of their ordering systems beyond their four walls into the computers and smartphones of customers, through self-service ordering. The larger trend to self-service already has fundamentally altered customer and consumer behavior: ATM banking, pay-at-the-pump gas, airline self check-in, and online movie tickets, for example...

When great front-line hourly employees quit, most managers take it personally--and with good reason. For more than 20 years, employee exit interview research has been telling us that the #1 reason the best people leave is because they feel they are being poorly managed. In other words, these folks joined the company and then quit the manager.
Just imagine how frustrated you would have to be with your job to decide to go elsewhere. That's how dissatisfied all the outstanding people who have left your organization have felt. If your people truly are your greatest assets, then the way your managers and supervisors manage those assets is the crucial key to your organization's success.
Whether you're recruiting field and area managers or hourly employees, there are five specific things everyone wants from their job, no matter what their position...

In this complex world of advertising choices, it is important to know which ad programs are working. This can be challenging for franchisors driving consumer response across a network of franchisees. To address these complexities and meaningfully evaluate system-wide ad performance, many franchise companies are turning to call measurement.

Consumers like to connect with businesses by phone, and calls are the preferred response among advertisers. By assigning unique phone numbers (local or toll-free) to any direct-response media, call measurement programs track the number of calls generated by ad, media type, campaign, or market. Results include cross-media lead generation and lead quality data. Franchisors can use these actionable insights - ranging from total number of calls received (both answered and unanswered) and caller demographics to call duration and customer service performance - to maximize their marketing and advertising dollars and improve their overall advertising program to drive more qualified leads to their franchisees...

Employees on social networks
Determining social media policies for the workplace is especially difficult for franchisors, who have both corporate employees and independent operators to consider. On the one hand, allowing employees and/or franchisees to use social media can provide great word-of-mouth, build online relationships, keep people at all levels of the organization up to date, and show that a company is progressive. On the other hand, it's hard to control what people talk about online, thus difficult to tell if employees' or franchisees' time spent on social media affects the system and brand positively or negatively. This piece is a good rundown of the pros and cons of social media use inside a businees and may help you decide on best practices...

Research based on confidential interviews with franchisees

Lots of lists rank the "best" franchise brands. But what about compiling a list of best franchises by going straight to the franchisees and asking them? That's just what the Franchise Research Institute has done with its new list of "25 World-Class Franchises for 2012."

The group has been doing the survey annually for the past decade. Researchers contact franchisees, interview them, and guarantee confidentiality. The results are published at the beginning of each year.

The goal of the Institute is to identify and recognize excellence in franchising. Jeff Johnson, Franchise Research Institute's founder says, "There are a number of 'Best Franchise' lists published each year, but we recognize excellence by asking current franchisees to rate their experience as franchise owners, using solid, scientific research methodology...

Franchisors recognize the best performers in their system each year with a Franchisee of the Year award. We spoke with four recent winners--different-sized, in different industries, and in different parts of the country.

Common denominators among these winners include excelling in the following areas: 1) financial (sales/revenue volume, profitability), 2) adherence to system and operational standards, 3) client/customer satisfaction, 4) HR (employee training, customer service), 5) contributions to and participation in the system (mentoring and leading), and 6) community involvement and service. And one important trait they all share is their passion--for their business, their brand, and their people.


Alan and Harriet Bleiweiss
Signs Now

"Re-peat" Winners
It's two years in a row now for Alan and Harriet Bleiweiss, owners of the Signs Now center in Hollywood, Fla...

EarthFruits Yogurt pursues its dream

Welcome to the final installment of "Anatomy of a Franchise Start-Up." EarthFruits Yogurt, which began its journey in mid-2010, now has one and a half years under its belt. Over the course of this series, I've done my best to give you a transparent glimpse into our new system. In this last article, you might begin to draw your own conclusion as to whether or not we have any chance of achieving our lofty vision of becoming the "Starbucks of the Frozen Yogurt Industry."

Franchising sounds great: you go first
Few of us would disagree that franchise sales in today's economy is challenging at best. But how much more so for a new and emerging brand that few have ever heard of? I believe the economy is definitely creating challenges for those looking for franchise financing, but it also has created unprecedented levels of interest for those looking to break their reliance on the job market by being in business for oneself...

SAN JOSE, CA, Feb. 8, 2012 - Proven Match has teamed up with Franchise Update Media Group (FUMG) to give results-driven franchisors a cost-saving profiling service that delivers pre-qualified candidates. Proven Match has received interest from additional franchise portals to provide this initial candidate pre-matching service. Designed for franchise seekers to "self-profile," candidates and are given the ability to discover their business-building personality and find the franchise opportunities for which they are best suited. Franchisors receive matches based on the comprehensive 7-point Proven Match system that gives both parties a view of compatibility in the earliest stage of the discovery process.

"One of the biggest challenges franchisors face is spending time and money developing a franchisee that isn't a good fit for either party," says Gary Gardner, Chairman of FUMG...

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...

This April will mark the third year in a row that Al Coelho has run the 26-mile Boston Marathon. That's a significant achievement. But it's only a part of what Coelho will do that day.

The Providence, RI, ColorTyme franchisee will once again partner with a patient at Children's Hospital Boston to raise money and awareness for the hospital. This year it will be Nathaniel Giannandrea, a patient since he was just nine days old.

Nathaniel's mom, Lia, learned that her son had cystic fibrosis when he was seven days old. Now two and a half years old, Nathaniel is no stranger to the hospital, as it has played an enormous role in his care, says Lia.

"Children's has always been fantastic to us," says Giannandrea...

Irate customers. No matter how good you are at what you do, what business you are in, or where it is located, you will at some point find yourself facing an irate customer. Maybe a product was flawed, a delivery was late, or a charge was inaccurate. How you deal with that customer not only will determine how he or she feels about your organization, but how you feel about yourself.
When you are able to turn an irate customer into a satisfied customer, you will gain confidence in your ability to diffuse a volatile situation and to evoke a positive outcome.
When most people come in contact with an irate customer, their first instinct is to turn and run. Dealing with a customer who has a problem and is upset about it, can be more than a little daunting...

As the economy continues to struggle through a slow recovery, business people everywhere are looking for any tools or techniques that will help them keep their businesses alive and thriving. Zane Tankel, CEO of Apple Metro, Inc., a company that owns 34 Applebee's restaurants in the New York area, is no different.
Yet Tankel has not only kept his business afloat during the recession, he even grew his businesses - opening ten new Applebee's restaurants since 2008, while garnering the brand's coveted Franchisee of the Year in 2009 and 2010.
Last time, Tankel began offering some tried and true tips that businesses should note in order to sustain and even grow their businesses in the days, weeks and months ahead in an uncertain economic climate...

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...