Trends

In 1996, Michael Ansley and his former college roommate asked their fathers for loans to buy their own franchise (Buffalo Wild Wings, then known as BW3) unit near Ann Arbor, Mich.
"We were young and didn't know what we were doing," he recalls. "But we learned how not to run a restaurant and where not to put it." Within a decade, Ansley had grown to 22 Buffalo Wild Wings units throughout Michigan and Florida. The entrepreneur is also involved with the franchise side of Bagger Dave's Legendary Burger Tavern in Michigan.
Ansley's business endeavors generated $45 million in revenue in 2010 and close to $60 in 2011. But his markets have faced difficult and challenging times during the past couple of years. Still, he's optimistic and offered this insight on the economy, his markets, and how he comes by capital...

The U.S. economy is on the rise. While the world economy will be fortunate to realize a 3 percent growth rate in 2012 (less than 2 percent and we'll see a global recession, something too close to call at the moment), most of the domestic indicators are signaling a positive outlook for next year. Yes, Europe is a mess, China is slowing down, and Japan is close to returning to the economy of its lost decade. With most other economies substantially smaller, there aren't any foreign engines of growth to get the world humming again.
Despite all that, the U.S. gives us some reasons for optimism. We're still in the aftermath of the decade of indulgence. The period from 2002 to 2008 was marked with unprecedented consumer and government spending...

What gets rewarded gets done, so recognize and reward a lot! This is especially so if you want to learn how to change company culture.
First, reward all the traditional categories: sales achieved, goals accomplished, customer compliments received. Then add some spice to really promote efforts on how to change company culture.
Celebrate new accounts, repeat orders, projects completed under budget, money-saving ideas, increased efficiency, and of course, improvements in customer service. To learn how to change company culture, you need to reward the actions you want to become ingrained.
Acknowledge achievements of individuals: most productive person, most consistent performance, most outrageous extra effort. This can also help in efforts to learn how to change company culture...

When I was 19 years old, I was promoted to passenger service manager for Capital Airlines at Midway Airport in Chicago. I had no college degree, no supervisory or managerial training, and there I was in charge of a shift with about 20 employees in customer service and 20 flights per shift. My experience level consisted of growing up on a farm in Iowa, being a baggage handler, and then a ticket agent for 18 months.
Kind of scary.
How do you know whether you are going to do a good job or not?
Everyone else was at least 10 years older than me in experience. So, I just asked them. I didn't know any better than to be open and honest and ask for their feedback. Wow, did they give me helpful and outspoken feedback. It was very eye opening...

Food--fast, slow, casual, takeout, sit-down, delivery--is by far the largest single sector in franchising. One look at our Mega 99 list of the country's largest franchisees shows their choice of brands dominated by food, primarily QSR. Beyond the sheer size of this sector, changing consumer tastes are spurring the creation of new brands, even in a belt-tightening economy. We asked two well-respected market researchers--Technomic and FRANdata--for data that would provide a big picture overview of the franchised food segment--where it's been and where it might be trending.


FRANdata:
Tracking Food Brand Growth
As of 2011, there are about 1,200 franchised food brands operating in the U.S.; roughly two thirds began offering franchises in 2000 or later...

Negotiation really is an art, and can be a challenge to master for even the most astute business professional. And like any art form, it must be refined and crafted. Getting a "good deal" can result in a feeling of euphoria. So, how does one "negotiate" a good deal? It can be difficult, especially if the other party appears to be holding all the cards. Here are some tips that will help you negotiate great deals.
Know What You Are Willing to Concede. Decide what your minimums are before you enter the negotiations. Knowing your bottom line, as well as what items are "non-negotiable" will help tremendously. It is important to know this before you enter negotiations, simply because all too often, in the excitement of bartering and negotiating a deal, parties will be tempted to make concessions they had not actually intended make, in an effort to close the deal...

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...

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...

For months, Republicans in Washington have been beating a steady drumbeat about the harm regulations have on businesses, the economy, and job creation.

While the rhetoric has been loud, it is clear regulators around the country, including the Occupational Safety and Health Administration (OSHA), are not listening as they continue to fulfill their job descriptions.

The impact of regulations on businesses is constantly up for debate; but businesses - including franchisees - cannot ignore them for the health and safety of their employees and customers or the financial impact of a fine. In reviewing recent announcements and developments from OSHA, there appears to be an emphasis on the food and service industry oversight...

When Greg Thomas decides whether to fix or ditch a financially troubled store, he typically thinks big. "I don't pay attention to pennies, nickels, and dimes," says Thomas, franchisee of more than 30 Great Clips salons in the Southeast. "When something is distressed, saving a few nickels, dimes, and pennies doesn't do anything. You have to increase sales 25 to 50 percent overnight."
Not everyone has his constitution--nor his experience turning distressed franchise units into profit-makers. Thomas, president of Parkside Ventures in Duluth, Ga., has made it his business to know whether a store has profit potential or will continue to bleed red (for an in-depth profile of Thomas, see www.franchiseupdate-digital.com/franchisee/2011iss3)...

Never before has timing been as critical to an organization's success as it is today. While it certainly is critical to, for example, the introduction of a new product or the infusion of cash, it is equally critical when it comes to solving a customer's problem.

Technology--specifically social networks--has driven the need for timely customer complaint solutions to a new high. Those networks have put businesses throughout the world under a technological microscope, as disgruntled customers share their experiences with thousands, if not millions of people, in a matter of seconds with a simple click of a button.

In the past, customers who had a problem with a company would tell, on average, 20 of their friends, coworkers, and family members about it...

For years, Subway has prided itself on offering healthier fare for its customers. But now the brand is honing in on what it can do to promote a healthier planet. In fact, the franchisor now has 14 of its "Eco-Restaurants" open while many of its franchisees also implement a number of these "eco" elements into their existing stores. The overall goal of the eco-restaurants is a design that offers environmentally friendly aspects that help reduce energy, water, and waste consumption in cost effective ways.

"All of these new eco-restaurants reflect the brand's commitment to social responsibility and sustainability," says Marketing Director Elizabeth Stewart, who heads the brand's corporate social responsibility efforts. "We have made a commitment to make our restaurants and operations more environmentally responsible...

The roach coach has hit the road, Jack.
Those sanitarily questionable movable feasts that have rolled through America's cities for decades are being replaced. Filling the void come this year's models: clean, efficient, state-of-the-art mobile food trucks with kitchens, griddles, stoves, and all the refrigerated machinery a small restaurant could possibly need. A new day has arrived for mobile food trucks, and a dynamic market shift is under way.
Major U.S. cities have experienced an increase in mobile food trucks during the past few years. Often, they are mom-and-pop operators who rove industrial parks and office complexes in search of hungry customers. In some cities, mobile food parks with a dozen or more trucks and trailers representing all types of mobile food vendors have set up camp, offering everything from subs, sandwiches, and ethnic specialties to espresso, desserts, and more...

As I wrote last issue, "the factors that must be accounted for while structuring financial affairs are much more complicated than ever before."
Given that 400- to 500-point swings in the Dow have nearly become the norm rather than the exception, this is ringing even truer today than it did a quarter or two ago. In the previous issue, I outlined the structural and emotional changes that we suspect have primed the markets for their current volatile behavior. I also promised to bring a few ideas for how to keep your wits about you amidst the chaos, so here goes:

What changed last month in sales, costs, market share, and customer satisfaction? Data answers those questions for you. Data gives you history. But there is a higher level of business intelligence that answers questions such as: Why is this happening? or What will happen next?
Insight--and foresight--spring from using data, statistical analysis, and predictive modeling to understand why things are happening and what will happen if current trends continue. Let me share three powerful discoveries made by different franchise concepts that improved their future.

#1: Ain't no one happy if Momma ain't!
Franchisees who operated portrait studios wanted to know which customer segment was the most profitable and most likely to be loyal...

If I were to ask 100 CEOs to define customer service, I would guess that 97 of them would say something like this: "Customer service is providing the customer with service that is fast, accurate, and courteous." While those are indeed elements of customer service, there is more to it, so much more.

Customer service is a moving target; it is whatever the customer thinks it is. That includes quality products, convenience, competitive prices, timely responses, reliability, a personal touch, and knowledgeable employees. Customer service means doing what you say you will do and doing it when, if not before, you say you will do it. It is operating on the belief that no transaction is complete unless the service customers receive is sufficient enough to motivate them to return...

Lenders establish frameworks for various types of lending: housing, personal, small business, and more. Those frameworks are called lending policies and define the rules and procedures for conducting a lending program. They form the basis a credit committee uses to make loan structuring, pricing, and individual loan application decisions, and that a credit risk committee uses to make portfolio allocation decisions--how much of the bank's assets should be allocated to small business and further allocated to franchised small business and particular franchise systems.
The competition for credit cycle small business are facing is pushing lenders toward consideration of tighter (and in some cases different) lending policies. This tightening generally is around the five C's of credit--character, capital, capacity, conditions, and collateral--leading to requirements such as higher credit scores, more equity contributions and cash reserves, and so forth...

Recently, I spent several hours with Simon Sinek (www.sinekpartners.com), a very creative New York marketing strategist.

He has developed the "Golden Circle" approach to understanding business and focusing on what your strengths and course of action should be. His model codifies the three distinct and interdependent elements that make any person or organization function at its highest ability. It's all based on the biology of human decision making and the way in which people interact with each other and with organizations and brands in the formation of cultures and communities.

Sinek wanted to hear about my time as CEO of Southwest Airlines and the stories behind the development and growth of the airline. I took him through the many trials and tribulations that occurred before I arrived and those that we worked our way through when I was there for three years at the time of airline deregulation...

In this sluggish economy, home-based franchises--or businesses you can run out of a home office--are some of the fastest moving franchise opportunities out there. While many of the opportunity seekers purchasing home-based are first-time franchisees or business owners, the trend toward home-based franchises presents an opportunity for current multi-unit franchisees, too, in the form of complementary franchises.

What is a complementary franchise? In its most basic form, it is when a business owner utilizes the existing infrastructure for his or her business to run an additional business that complements--not competes--with the sales and operation of the primary business.

Fast food and convenience store franchises lend themselves particularly well to complementary franchises...

As we've seen in high-definition in the past few months--from the natural and man-made disasters in Japan, to the rolling upheavals across North Africa and the Middle East, to the volatile whipsaws in food and energy prices--the factors that must be accounted for while structuring financial affairs are much more complicated than ever before. Plus, the information is coming at us much more quickly, and the potential ramifications for our financial affairs are much more dire than in the "good old days."

The 1980s and 1990s were great times to be an investor. Interest rates were falling dramatically, instigating a huge and lasting bull market in fixed-income investments. Credit became easy to obtain and even our tax policies encouraged consumerism...