Franchise Articles

These days we hear plenty about employee engagement. We know disengaged employees are bad for business. We know an office full of innovative, collaborative employees who feel like "owners" is the key to surviving a brutal marketplace. We may even know the statistics like Human Capital Institute's revelations that companies with highly engaged employees enjoy profit growth at three times the rate of their competitors, and that increased engagement reduces turnover--one of the largest hidden costs in business--by 87 percent.
So, yes: We know. Why then is it so incredibly tough to move beyond the "buzzword" phase and truly transform enthusiasm fakers, paycheck collectors, and clock watchers into employees who truly feel like they have a stake in your company's success?
"Frankly, it's because in many cases employees really don't have a stake," says Michael Houlihan, coauthor along with Bonnie Harvey of The Barefoot Spirit: How Hardship, Hustle, and Heart Built America's #1 Wine Brand...

Larry Katzen made partner at Arthur Andersen by the time he was 30. The "Big 8" accounting firm had a long reputation for innovation and integrity. The firm continued to soar, with an emphasis on continuing education for employees and meticulous attention to detail, it was one of the most trusted accounting firms in the industry.
Katzen enjoyed a fast-paced rise through the ranks, all the while learning, traveling, and parenting quadruplets with his wife and college sweetheart, Susan. It all came crashing down in 2002 when the company was indicted based on false accusations having to do with the scandals at Enron. With the firm's survival in question, Katzen moved quickly to encourage employees to carefully complete all remaining assignments...

Wan Kim is a quick study. After graduating from Boston University with a degree in international management, he began his MBA studies at the University of California-Irvine at the crest of the investment-heavy dot-com boom of the late '90s/early 2000s.
"I left school to go back to South Korea and chase the bubble," he says. "But I discovered there's no such thing as easy money." It was a career move that left him thinking hard about what kind of business was sustainable.
Kim says he knew people had to eat, and he liked what he saw in the franchise business model. But he wasn't interested in less healthy choices like burgers and pizza. "I had been a regular customer at Smoothie King when I was in college in America," he says. "I thought I could make the concept work here in Korea...

Paul Macaluso carries a unique distinction at Moe's Southwest Grill: he's the brand's first chief marketing officer. He hit the ground running in a role that began earlier this year, and his restaurant experience and insights into consumer thinking have helped him ramp up marketing efforts at the brand.

Macaluso is no stranger to Moe's. After serving as vice president of marketing for 18 months at the fast-casual chain, he was named CMO in January 2013. In the newly created role, he is charged with overseeing the brand's marketing and public relations functions, as well as catering and creative services. He says ongoing technology advances and rapid brand growth have posed marketing challenges that he has fully embraced.

Before joining Moe's, Macaluso spent more than two decades in restaurant marketing...

Mary Lynne Carraway's 74 Domino's Pizza restaurants may dominate the Washington, D.C., market, but she runs her 1,800-employee business, Domino's Pizza Team Washington, with a kind and gentle approach to success.
For example, the mother of four--who stepped into the company's leadership position after the death of her husband David from brain cancer--was the first to comfort the family members of two employees who were shot on the job and to assure nervous employees that all possible safety measures were being taken to ensure their well-being.
"Since I've been doing this job, there have been deep, hard places I've had to go. When someone gets hurt, it's crushing," she says. "You go on, but your heart never stops feeling the sadness for the others going through such difficult things...

After several years of being the shiny new tool everyone covets and can't wait to use, social media is now becoming just another part of the marketing toolbox, a little banged up perhaps, maybe even a little rusty. As we enter 2014, it's time to consider what job social media is most suited to do for your brand. In the words of R. Crumb's Mr. Natural (look it up, younger set), "Get the right tool for the right job." It's time to polish up your social media marketing efforts and use it where it's needed most - wherever that is in your franchise organization's marketing objectives and goals.

While social media marketing (SMM) is still far from mature and, for many, still a conundrum, help is on the way. One potential source is a report from Ascend2 and Research Partners, in the form of a 20-page publication with an overly long, but perfectly descriptive name: "Social Media Marketing Research Benchmarks: The most challenging obstacles to social media marketing success in the year ahead and how marketers plan to overcome them...

Bojangles' has one of the highest average unit sales volumes in the QSR industry, driven by strength across all three primary day parts. We have a large number of very loyal customers, but the breakfast customer on Monday can be very different than the lunch customer on Sunday. So we've profiled each of our customer "segments" to understand how and why they behave, and we are working to incorporate these segment views into all our measurement efforts.
In terms of what we measure, we try to understand within a given geographic area the degree to which consumers are aware of Bojangles', have tried Bojangles' (ever or recently), and their frequency of recent visits. We also measure how all our paid, earned, and owned media are affecting these trial and frequency rates...

Bitcoin Debuts at Subway
A Subway franchisee in Allentown, Pa., has started accepting Bitcoins for payment - and it's working. Sapan Shah, a 24-year-old MBA student at Lehigh University, is attracting a lot of attention at his sandwich shop, with Bitcoin fans driving hours to spend their digital currency. While Subway has "encouraged operators to have innovative ideas," Shah said, he added that "Subway has not endorsed this at all. This was just my idea." Accepting Bitcoins sure qualifies as an innovation. Shah, himself an investor in Bitcoin, has initiated a lively conversation on Reddit, spurring hundreds of comments and questions about how corporate is reacting, how employees are dealing with the online currency, and the risks involved...

Keep your eye on the big picture during negotiations
Recently, we represented a multi-unit operator in the sale of a tier-one franchise business that had to overcome numerous hurdles to achieve a successful outcome. The company had suffered as a result of the recession, challenges in the local economy, and some operational challenges on the part of the existing operator. The company was underperforming the brand and lacked the resources needed to pull itself out of its downward spiral. Many units were old and tired, and in desperate need of remodeling. Several units needed to close. Operations had suffered and turnover and employee morale were a continuing challenge.
To arrive at a successful transfer, concessions were required from landlords, lenders, and the franchisor...

Mary Lynn Carraway is a successful Domino's franchisee with 74 locations in the Washington, D.C., area. But she may be even more well-known for the way she treats her 1,800 employees - with a kind and nurturing approach. It's a formula that spells success anyway you looks at it.
For example, the mother of four--who stepped into the company's leadership position after the death of her husband David from brain cancer--was the first to comfort the family members of two employees who were shot on the job and to assure nervous employees that all possible safety measures were being taken to ensure their well-being.
"Since I've been doing this job, there have been deep, hard places I've had to go. When someone gets hurt, it's crushing," she says...

Although we live in the richest and most advanced society the world has ever known, many of us say we need more money in order to be happy, notes best-selling author Doug Vermeeren.
"Even some of those in the top percentile of earners often feel like they don't have enough money," says Vermeeren, an international speaker who consults with celebrities, business executives, and professional athletes.
"The math is simple: More money does not equal more happiness. It's our attitude toward money, not the amount, that influences our happiness the most."
Happiness researchers Elizabeth Dunn and Michael Norton, professors at the Harvard Business School, recently published research indicating that it's not money that makes people happy, nor the things people buy with it...

Two Zaxby's franchisee partners with ties to the brand's corporate office are growing again.
Veteran ZFI multi-unit franchisees Ben Williams Sr. and Bill McGeary, joined by Ben Williams Jr., signed a deal this fall that gives them exclusive rights to northeast Oklahoma, including the DMA of Tulsa. This deal is the second new state and multi-unit deal in the past 60 days for Zaxby's, the Athens, Ga.-based, fast-casual restaurant brand.
Williams Sr. and McGeary currently own and operate Zaxby's stores in Alabama, South Carolina, and Mississippi. Williams' son, Bill Jr., will be a new partner in the Oklahoma deal. Plans call for the three Oklahoma stores to open within the next 18 months and additional stores are slated.
Williams Sr...

Social Media Strategist Shares Pros and Cons of 4 New Measures

A couple of months ago, our lead social media strategist at EMSI Public Relations started noticing interesting changes involving the Twitter accounts we manage for clients. Tools were suddenly disabled. Twitter's technical support, which hadn't been good, improved.
So when news broke in late September that Twitter had already formally taken steps toward going public back in mid-July, Jeni Hinojosa, a social media strategist at EMSI, wasn't surprised.
"The changes appear designed to make Twitter more appealing to investors when the initial public offering is finally made," Hinojosa says. "In some ways, they're also improving the experience for users. But in other ways, some users will be disappointed...

Franchise Update mystery shoppers posing as qualified prospects identified a stellar group of franchise companies for best practices in lead generation, follow-up, and recruitment. Scoring 152 registered companies on telephone response to prospects, and 127 franchisors on recruitment websites and response to website prospects, mystery shoppers judged how well--and how quickly--franchise sales and development staff replied to inquiries. In addition, online experts evaluated franchisors' recruitment websites and their use of social media.

The resulting STAR Awards (Speaking To And Responding) were presented at a special dinner during the annual Franchise Update Leadership & Development Conference, which took place from Oct. 9-11 in Atlanta...

In the eyes of Catherine Monson, the most important role of a CEO is leading and inspiring. "It's critical for the leader to communicate a clear, compelling vision and align the different departments or teams with the company's priorities," says Monson, CEO of FastSigns. "I set the vision, goals, and standards and then work through my team to achieve them."
When Monson took over the 25-year-old brand in early 2009, she put this approach right to work. First on her agenda was clearing up a communication gap between corporate and franchisees. Some franchisees were unhappy with the lack of support they felt they were receiving from corporate, resulting in stalled brand growth.
Monson created a sales incentive program and instituted monthly company meetings for sales updates, program developments, company announcements, and praise for departments on their projects and efforts...

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...