Best Practices

Franchisees around the country are breathing a collective sigh of relief as the post-recession rebound officially sets in. For many who weathered the economic downturn, earnings have increased, profits are up (thanks to strategic management decisions), and potential purchasers are again lining up to enter the market with finances in hand. And for others, fair market value for the business has reached a point where it may make financial sense to sell, particularly for those who held on to see a better day.
But before you make plans to sell the franchise, whether now or in the next few years, there are a few simple steps that you should take to prepare and avoid unwanted surprises. After all, preparation enhances the value of your business; surprises cost money and time...

When evaluating a brand, experienced operators have two big advantages over first-time prospects. First, they know what questions to ask. Second, most of the time they know what a good answer looks like.
The first advantage really isn't all that much of an advantage. Common sense leads prospects to ask many of the most relevant questions. In addition to how much they will be asked to invest and how much can be made from that investment, some of the more frequently asked questions include: the franchisor's financial position, the experience of the franchisor's management team, the amount of training and support, brand marketing efforts, and the performance of units and franchisees.
The second advantage is usually considered the big one...

Energy management systems (EMS) are great in theory but often prove problematic in practice for many multi-unit franchise owners. The reasons tend to vary but a common theme centers on the administration of the intelligent thermostats, the pre-conceived cost of installation and complexity to ascertain, analyze, and effectively apply the data.
All of these are valid points against EMS for entrepreneurial multi-unit franchisees who operate in environments with razor thin margins and who may have limited internal resources. These owners simply don't have the bandwidth or dedicated staff to effectively administer, monitor, and analyze the fire hose of data associated with energy management systems.
As a result, multi-unit operators often discard the notion of embracing energy management systems and the significant financial benefits and operational efficiencies they provide...

Two franchise business owners urged Congress to address regulatory overreach by the National Labor Relations Board (NLRB) to expand the definition of what constitutes a joint employer during a hearing February 5 before the Senate Health, Education, Labor and Pensions (HELP) committee. The franchise business owners testified that recent actions by the NLRB would significantly undermine their ability to operate and sustain their businesses - potentially forcing them to close down. 
At issue is the recent NLRB recommendation to upend the decades-long, well-established joint employer definition. Should the NLRB expand the definition of joint employer to include a franchisee's national brand, it would destroy the franchise model - leading to industry consolidation and, ultimately, to store closures and a loss of jobs, economic activity and entrepreneurial investment...

Small businesses have made a huge recovery since the economic crash in 2008 and that's good news for all of us. Since we account for 63 percent of new jobs, our success puts people back to work. That, in turn, helps us even more - people with paychecks buy stuff!
And here's more good news: Women are launching more businesses than ever - 1,288 a day, according to a recent analysis by American Express. That's up from 602 in 2011-12. Since 1997, women-owned businesses rose by 68 percent.
As a female entrepreneur who will soon celebrate my company's 25th anniversary, I'm well aware of the challenges these brave new CEOs face. I'm not exaggerating when I use the word "brave." My experiences have taught me that courage is essential to launching and growing a successful business - particularly if you're a woman...

Throughout modern history, periods of heightened innovation and technological advance were followed by a relatively radical step up in the human condition as new industries, processes, routines, and services became commonplace. In the mid- to late-1800s, the United States became truly united with the completion of the transcontinental railroad and interconnected waterways, while subsequent advances in electricity, plumbing, engineering, and medicine accelerated the efficiencies of life and business dramatically.
Recent advances in such things as robotics, computer processing and storage, sensors, materials science, and synthetic biotechnology have brought us to the verge of another new era, one with significant long-term implications for investors...

Franchise businesses are expected to grow and create more jobs at a faster pace than the rest of the economy in 2015 for the fifth consecutive year, according to "The Franchise Business Economic Outlook: 2015" released today by the International Franchise Association (IFA) Educational Foundation and IHS Economics.
"Franchising is an American success story. Independently-owned and operated local franchise businesses are growing faster, creating more jobs at a quicker pace and producing higher sales growth than other businesses. Franchising is a vital engine of economic expansion in the United States and 2015 looks to be another strong year for franchise businesses," said IFA President & CEO Steve Caldeira.
But Caldeira added a word of caution about the franchise outlook...

Multi-unit franchise operators are fostering the growth of franchise profit across the United States. In 2014 alone, franchise organizations drove about 3.5 percent of the total U.S. GDP and franchise operators employed over 8.5 million Americans. Multi-unit operators played an instrumental role in advancing franchise operations across the country this year, and will continue to move the needle on franchise success in the new year.
In an always-evolving retail, restaurant, and service economy, being part of a franchise corporation gives new and seasoned entrepreneurs the means to hit the ground running. Starting an independent business is tough, but existing as part of a larger franchise network provides the support and direction it takes to see success early on...

The nature of the franchise business is quickly evolving, but it's never been clearer that now is the optimal time to be part of a franchise organization. Franchises drove approximately 3.5 percent of the total U.S. GDP in 2014 and employed more than 8.5 million Americans. As it becomes riskier and more challenging to get off the ground as an independent startup, entrepreneurs are finding that it pays to be part of a larger franchise network that can support growth and boost initial success.

But as with any business venture, launching or running a franchise can have its speed bumps along the way. Achieving optimal sales and growth doesn't happen overnight. It takes ongoing commitment from franchise owners and operators. In 2015, I foresee a new set of challenges for franchises, largely prompted by three factors: new government regulations, crowded market share, and employees predisposed to entitlement and generational differences...

This year's annual CFA Day Forum will be in Washington, D.C. from March 24-25 at the Omni Shoreham. The forum will include informational sessions, an attorney's round table, congressional visits, a Cherry Blossom Dinner Cruise, and a closing luncheon on Capitol Hill.
  Traditionally, the CFA Day Forum has provided an opportunity for franchisees and their vendor business partners to hear from well-known political speakers including Sens. John McCain, Lindsay Graham, and Rand Paul, as well as Committee Chairman Darrell Issa, Reps. Howard Coble, and Jared Huffman, and political pundits like Bill Kristol, George Will, and Sam Donaldson.
This year's agenda will feature subject matter experts on legislative hot topic issues and will boast a variety of informative and educational topics relevant to the franchisee community...

Non-family businesses can learn a lot from family businesses, says Henry Hutcheson, a certified Family Business Advisor and founder of Family Business USA consultancy.
"Family businesses outperformed non-family businesses during the boom years leading up to the 2008 recession, and during the 2001 and 2008 recession years," he says, citing a recent Harvard Business Review study.
Hutcheson, author of "Dirty Little Secrets of Family Business," (http://dirtylittlesecretsoffamilybusiness.com), says family businesses were less likely to lay off workers during the lean times, and more likely to maintain their emphasis on socially responsible programs.?But that's just the businesses that survived.
"Many closed their doors," he notes...

What's the difference between those that do and those that don't?
After decades of asking myself and thousands of others that same question, I have come to the conclusion that your success comes down to just one thing.
Whether you're trying to lose weight, save money, climb mountains, win a grand final, run a marathon, get a promotion, pretty much anything! One thing sets the winners apart from the losers, the achievers from the underachievers, the successful from the unsuccessful.
I have watched thousands of documentaries, read thousands of stories, and interviewed thousands of people and in every single case it's the same.
It's not having a positive mindset (although that helps), it's not having a secret formula (although having a plan helps), it's not where you were born or where you went to school, and it's not who your friends are or how much money you have...

It wasn't too long ago, in the midst of recession, the idea of selling a restaurant would have been fleeting at best.
Today, the idea makes sense for a variety of reasons, especially because there are plenty of investors available who are aggressively looking for places to spend their money. And many of them have their eyes on the restaurant industry.
Why? There are several reasons restaurants are attractive to investors:

No one ever said franchise growth was easy. Operating one or two locations is hard enough, but growing to 10, 20, or more is challenging for even the most seasoned operators--especially if any of their new builds or acquisitions turns out to be a poor performer. We tracked down five successful multi-unit franchisees who have been there and done it--and who bear the scars and trophies to prove it. Among the key factors in multi-unit success, they say, are timing, funding, cash flow, people, infrastructure, and identifying the right opportunities. Their insights into what to look for and how to proceed once you decide it's time to grow may contain just the missing ingredient you need.

Right time
Deciding when to grow--and if you're ready--differs for each franchisee...

There is a lot of talk about customers and their use of social media. Data tells us customers are using it more and companies must be responsive and innovative with their use of it. However, I would like to remind organizations that customer still pick up a phone and call. In many cases, they've already tried social media or your website. A 2012 Sitel Study reveals when customers have a problem with a product, 57 percent of customers search for a solution online first. So when calling, their expectations are high and their frustration could be also.

Let's review a few fundamentals of a great phone experience.

The franchise business model is under unprecedented attack by anti-business activists launching a coordinated campaign in cities, states, and at the federal level. From discriminatory wage increases in Seattle and potentially Chicago, to federal regulations that would recast franchisors as employers of their franchisees' employees, these attacks are like nothing we have ever experienced. Franchise businesses must unite under a single, unswerving, strong, and collective voice to defend the franchise model against these increasing threats.
1) It's time to mobilize, now. This summer, the IFA board approved a new strategic initiative, the Franchise Action Network (FAN) to mobilize and unify the franchise community. Through FAN, franchisees, franchisors, and suppliers are working to educate lawmakers, regulators, key influencers, and the public about the crucial economic advantages provided by the franchise business model across the country...

Every organization has a chance to deliver a positive customer experience. That experience has many starting points and touch points along the customer interaction. Each touch point will affect the customer's perception of your business and even their loyalty.
To remain competitive, take a look at the simplest of interactions and decide how those interactions represent your company. The simple stuff came to my attention with some recent experiences. As I was checking out at a national retail chain, the employee at the register answered the phone. Here is what she said, "It's a great day at the Dunwoody Large Chain Store, this is Corrine, how can I help you?" Whew! Do you think the customer wanted to hear all of that? And do you think the employee wants to say it multiple times a day? The customer is poised and ready with their question but instead have to wait out this long greeting...

In 2004, the first words I ever wrote for Multi-Unit Franchisee magazine (then called Area Developer) were:
"Vast amounts of energy and treasure have been invested to understand why customers do--or don't--come back. Few questions are more important, since same-store sales growth is built on the backs of loyal customers." That connection between customer loyalty and sales growth remains true to this day.
What's different now is that franchisees better understand the value of customer loyalty and, for the best operators, how to improve the customer experience and gain market share by winning customers away from not-so-smart competitors. From my perspective as a 10-year columnist here, here is a brief history of how we far we've come...

While even the word "negotiation" can evoke fear, stress, and anxiety for many, the intent is quite simple: to discuss and ultimately agree on a deal. The negotiation process is a lot like a chess game where strategy reigns supreme--one thoughtfully considered move at a time.
"Even when faced with the most daunting of deals, regarding the act of negotiation as a 'game' may alleviate the apprehension and give you the confidence to make power plays that will ultimately facilitate your desired result," says veteran negotiation and contracts expert Eldonna Lewis-Fernandez, author of Think Like a Negotiator (www.ThinkLikeANegotiator.com). "Unlike strategy games like chess, however, the most effective deals are a win-win proposition for all parties rather than a winner-loser result...

Reporters love sources who understand their needs. Getting a call from a reporter who wants to quote you as an expert for his story, review your products or services, or invite you to write an exclusive article for a publication, is a major coup. It means that your marketing efforts are paying off.  Who would blow such an opportunity?
Unfortunately, a lot of people do. Those who don't understand journalists' deadlines and needs are liable to be quickly passed over in favor of sources who do. That lack of knowledge can also rack up lots of wasted time and money for those who take a shotgun approach to blasting their message or products to any and all journalists. If you don't consider their individual needs, you're likely making a futile effort...