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Without a successful franchise sales and development process in place, managed and staffed by dedicated, well-trained individuals, even the best systems can't expand their brand. So not to worry: you will find valuable sales and development-related content in each issue and online.

Feature Story:

The Mystery Persists »

By Kerry Pipes

Our annual mystery shopping survey shows some improvement, with much room for more
Franchise recruiting is serious business. Incredibly, year after year, franchise brands continue to fumble the fundamentals. They are not executing the X's and O's. They are failing to meet prospects where they are (mobile devices anyone?), providing flat-out wrong information, responding too slowly to prospect inquiries, and worse, not getting back to them at all. These are just some of the key findings of Franchise Update Media's 2015 annual mystery shopping survey.
Every brand that registered by August 15 to attend this year's Franchise Leadership & Development Conference was mystery shopped by a "qualified, perfect candidate," said Gary Gardner, chair of Franchise Update Media, during his presentation of the survey results at the conference in mid-October...

Feature Story:

Getting It Right: Giving Franchisees The Information They Want »

By Darrell Johnson

"If it's on the Internet, it must be true." While we chuckle at that, franchisors also know the dark side of the Internet: that there is so much more misinformation than information out there. While it is easy to disregard misinformation for what it is, it is hard to do so when you are protecting the integrity and image of a brand. I'll describe what I see going on and, by way of example, show a way to take control of online information.
First, let's understand the problem in the context of current events. On the consumer level we use search tools to quickly determine who provides a local product or service. Then we take it further by checking any number of third-party sources for ratings on the quality of the product or service. Is it any wonder the same approach is rapidly being adopted by prospective franchisees, whether considering how much they can make, the likelihood of success with a given brand, franchisor performance relative to franchisees, or the ease of obtaining financing? After all, it's not just franchisees researching a brand; lenders are, too...

Feature Story:

2016 AFDR: How Are You Doing? »

By Eddy Goldberg

Benchmarking the good, the bad, and the best practices
Results from the 2016 Annual Franchise Development Report (AFDR) were unveiled in October at the 17th annual Franchise Leadership & Development Conference. The 2016 AFDR is based on responses from 134 franchisors representing 51,004 units (48,431 franchised and 2,573 company-owned).
Participants in the survey consisted of franchisors who pre-registered for the conference and completed an online questionnaire. Responses were aggregated and analyzed to produce a detailed look into the recruitment and development practices, budgets, and strategies of a wide cross-section of franchisors. The data, with accompanying commentary, provide the basis of the 2016 AFDR.
Highlights from the report were presented in a 90-minute general session...

Feature Story:

Study Shatters Selling Myths: The Truth About Top Sales Performers »

By Steve Olson

In my 30-plus years in franchising I have often wondered: What is the "DNA" of a franchise sales superstar? Is it a natural selling talent fueled by tremendous drive? Is it pure luck based on representing today's hottest franchise? Are service brands easier to sell than food brands (which must deal with the greater complexities of real estate, multiple employees, and back-room food prep)?
After much pondering, I enlisted Rebecca Monet, president and chief scientist of Zoracle Profiles, to help shed some light on my questions. We all know that making the right hire for your brand can catapult growth--and that poor to mediocre hires cost many thousands in lost time, marketing dollars, and royalties.
For our research project, 40 seasoned, successful sales professionals were invited to participate in an emotional and social intelligence assessment that has an 87 percent accuracy rating...

Feature Story:

Managing International Leads: There's More To It Than You Think »

By William Edwards, Michelle McClurg, William Gabbard, and Shanna Aldridge

It is the dream of many franchisors to take their concept into other countries. As in the U.S. and Canada, the lifeblood for expansion is generating leads from various sources, processing them, and signing a franchise agreement. And that is where the similarities between processing leads in the U.S. and abroad end.
As seen in the accompanying chart, getting an international lead from a broker, an Internet lead site, or your franchise website is only the start of a long and potentially expensive process and journey to signing a licensee agreement in another country, involving many, many steps. The authors of this article, with a combined 80-plus years of taking U.S. franchise brands global, aim to help you fully understand the difference between getting, processing, and signing U...

Feature Story:

STAR Awards: Honoring The Best In Franchise Recruitment »

By Helen Bond

When it comes to being a "STAR" franchise development player, the best keep winning--and they keep working to get better.
Franchise Update Media honored the top performers in franchise sales and development at its annual STAR Awards dinner, a highlight of the Franchise Leadership & Development Conference, held Oct. 14-16 in Atlanta.
The STAR Awards (Speaking To And Responding) recognize brands for overall development performance and in the key areas of franchisee recruitment, online sales follow-up, telephone responsiveness, website effectiveness, social media, and franchisee satisfaction.
"Franchise Update Media and the STAR awards are the only kind of awards in our particular part of the industry," says Pete Lindsey, vice president of franchising at Sport Clips, a 2015 STAR Award recipient...

Feature Story:

Global Tech: How Franchise Brands Are Using Technology Abroad »

By William Edwards

Technology has become essential to the operation of franchised businesses around the world. This incudes not only operating the actual business, but managing the franchisor-franchisee relationship across country and continent boundaries.
The use of technology around world is similar to that in the United States and Canada: franchise management, development, operations, training, social media, and marketing. POS systems that are web-based make keeping track of unit sales much easier and timelier no matter what country the franchisor expands into. To learn more about the use of technology in global franchising, we reached out to several franchise sector experts in key franchise countries, as well as several U.S. companies.

Chile
For the past 8 years, restaurants have used IT for better customer service and for administrative purposes...

Feature Story:

Challenge The Pros: Integrating Technologies For Overall Development Strategies »

Franchise Update

What are you doing to integrate technologies for both your overall development strategies and into how you create a profile of your best prospects?

Tim Courtney
Vice President, Franchise Development
CruiseOne
It's really incredible how much technology continues to evolve! There are so many tools available to assist franchisors with their development plans today, and at CruiseOne integrating technology is an essential part of our development strategy.
Invest in technological enhancements. Get creative with your development budget and ensure there is room for technological enhancements. We continually invest in our existing technology tools and new platforms. This allows us to continue creating innovative programs, giving us access to the latest and greatest franchise development tools...

Feature Story:

Measuring Outcomes: Strengthening The Franchise Business Model »

By Darrell Johnson

The franchise community, along with media, politicians, regulators, and others, are beginning to understand the importance of measuring outcomes in franchising as a basis for understanding a brand's performance.
Outcome measures have been led by lenders who assumed that a franchise system's credit risk could, in large part, be predicted by measuring specific outcomes. Terms such as continuity rates, historical unit success rates, and recurring revenue self-sufficiency are becoming commonly used. This focus is having a profound impact on how franchise brands are being evaluated. That's a good thing for the long-term strengthening of the franchise business model. After all, if we can't measure outcomes, how do we improve them?
Measuring outcomes is an essential first step...

Feature Story:

Sell Your Marketing Skills!: Candidates Buy Your Marketing Expertise »

By Jim Bender

Many of us have been in the franchise industry longer than... well, a long time. At Franchise System Builders we have had the fortunate experience to work with many companies and to become intimately involved with their franchise offering, franchise development processes, and resulting successful operations.
Currently, we are working with our clients to update their disclosures for 2015. Our review of several FDDs over the past weeks again brought to our attention a selling opportunity overlooked for years by franchise development teams. This opportunity runs through your website, collateral materials, phone conferences, discovery day meetings, and even the FDD. It is an opportunity to highlight a critical expertise of your brand and establish another point of differentiation...

Feature Story:

Global Tech: How Franchise Brands Are Using Technology Abroad »

By William Edwards

Technology has become essential to the operation of franchised businesses around the world. This incudes not only operating the actual business, but managing the franchisor-franchisee relationship across country and continent boundaries.
The use of technology around world is similar to that in the United States and Canada: franchise management, development, operations, training, social media, and marketing. POS systems that are web-based make keeping track of unit sales much easier and timelier no matter what country the franchisor expands into. To learn more about the use of technology in global franchising, we reached out to several franchise sector experts in key franchise countries, as well as several U.S. companies.

Chile
For the past 8 years, restaurants have used IT for better customer service and for administrative purposes...

Feature Story:

Emotional Intelligence: Fulfilling The Real Needs Of Your Candidates »

By Jim Bender

In the previous issue we discussed the power of selling your brand's marketing expertise during the franchise recruitment process. This is a subject most franchise development people at best gloss over. Yet it is a compelling reason for candidates to select your brand over another. After all, if your ability to put "butts in the seats" is proven superior to that of other brands in the category, you have a distinct advantage when justifying differences in investments or franchise fees.
When you consider your overall franchise sales strategy, selling your marketing expertise is on par with selling your training, grand opening, business consultation, or technical support. It is one of a multitude of topics we in the development business must master...

Feature Story:

Hwy 55 COO Shares His 7 Keys To Successful, Scalable Growth »

By Neal Dennis

Creating a great business and successful franchise is art and science, timing and luck. While luck and timing are largely out of your control, at Hwy 55 Burgers, Shakes & Fries we’ve learned a lot about the art and science of successful growth. Here are seven key elements and tools that have supported our expansion.

1) Build a great leadership team
A great leadership team is crucial to a franchise’s success. It is impossible for one or two people to do all the work themselves, so create leaders across the organization. Kenney Moore, the CEO and founder of Hwy 55, started the franchise with one location and $500 in his pocket, and went around re-opening closed restaurants. By the time he had opened four locations, he realized he was working himself to death and not making a lot of forward progress...

Feature Story:

Franchise Lending Outlook: SBA Lending Will Continue To Be Important »

By Darrell Johnson

The banking industry is increasing its conventional business lending activity. Since the recession, banks have focused on lower-risk businesses, which translates into larger businesses with good track records. Recently, banks have been expanding their focus to smaller businesses with less experience. At the same time, we have seen the rapid expansion of alternative lenders (led by Internet-based lenders) into the smaller business/less experience category.
Therefore, it is relevant to ask whether a publicly funded lending program for businesses is still needed. Government programs launched during a time of need often stay around well past their useful lives, or at least their original purpose. That question is being debated in Congress right now regarding the Export-Import Bank...

Feature Story:

Challenge The Pros:The Role Of Your Brand Culture In Recruitment And Development »

Franchise Update

What role does your brand's culture play in your recruitment and development process?
Gary Matusiak
VP of Franchise Development
Pancheros Mexican Grill
At Pancheros, interviewing prospective franchisees who fit within our brand's culture is a lot like dating. During the process, we conduct multiple calls with a potential franchisee to ask questions, gauge whether they would be a fit for our brand, answer any questions they have, and build a rapport with them. We listen for the prospective franchisee's key priorities and principles, which are indicative of whether they would be a good fit within our culture.
After we get to know the prospective operator, we invite them to attend a discovery day to meet our team and learn more about the Pancheros brand and culture...

Feature Story:

In-House Or Out?: 5 Ways To Build Your Sales Team »

By Steve Olson

Fifteen years ago, mainstream franchisors wouldn't think of contracting their recruitment selling to outside companies. Today's mindset has dramatically changed, fueled by the advent of better technology, communication, intelligence, and tracking systems. Development offices are now more commonplace for many brands, allowing franchisors to attract a larger pool of selling talent, whether as their own employees or independent sales teams.
If you are a young franchise company or in the midst of a turnaround effort, you have choices for developing a high-performance franchise sales program. I don't promote one avenue over the other, because there simply is no single "best way" for all concepts. The type of business, franchise program, corporate resources, leadership philosophies, and other extenuating circumstances will influence which road to take...

Feature Story:

Safety First!: Protect Your Brand From Security Breaches »

By Rick Dakin

The data breach reported by Jimmy John's last September affected just over 10 percent of the company's locations, but the bad press and customer fallout affected the entire chain. From pink slime to bed bugs, the national news cycle can be capricious--and damaging--when it's your brand in the spotlight.
Franchisees are used to dealing with these types of reputational risks in other contexts. Cybersecurity is a different order of threat, however. It's easy enough to show customers quality food products and clean premises, but how do you demonstrate a secure POS?
Data insecurity brings increasing legal risks as well. The FTC has now pursued more than 50 enforcement cases against companies that allegedly failed to protect their customers' personally identifiable information...

Feature Story:

STAR Power: Top Performers In Franchise Recruitment Honored »

By Debbie Selinsky

Franchise Update mystery shoppers, posing as qualified prospects, surveyed attendees at the 2014 Leadership & Development Conference for best practices in lead generation, follow-up, and recruitment. Mystery shoppers scored 146 franchisors on their telephone responses, 147 on their recruitment websites and responses to website inquiries, and 147 on social media implementation, judging how well--and how quickly--franchise sales and development staff replied to qualified inquiries.
The resulting STAR Awards (Speaking To And Responding) were presented at a special awards dinner at the conference, held Oct. 15-17 in Atlanta. Multiple award winners were CertaPro Painters, PostNet, and Wild Birds Unlimited.

Best Overall Performance
1st Place: CertaPro Painters
The winner of three STAR Awards this year, CertaPro Painters celebrated for about 10 minutes before getting back to work, says Peter Barkman, vice president of franchise development for the Philadelphia-based brand...

Feature Story:

Franchise Lending Outlook »

By Darrell Johnson

SBA lending will continue to be important
The banking industry is increasing its conventional business lending activity. Since the recession, banks have focused on lower-risk businesses, which translates into larger businesses with good track records. Recently, banks have been expanding their focus to smaller businesses with less experience. At the same time, we have seen the rapid expansion of alternative lenders (led by Internet-based lenders) into the smaller business/less experience category.
Therefore, it is relevant to ask whether a publicly funded lending program for businesses is still needed. Government programs launched during a time of need often stay around well past their useful lives, or at least their original purpose...

Feature Story:

2015 World Outlook: Country-By-Country Economic Forecast »

By William Edwards

2015 is starting out as a very busy year for international franchise development. U.S. franchises are exporting their brands more than at any time in history--and to more places.
Last year ended with the highly successful opening of Burger King in India, and Carl's Jr. signing a 150-unit license agreement for Japan. Build-A-Bear Workshop opened its first two stores in Turkey to high sales. Anytime Fitness has reached almost 20 countries. Title Boxing Club opened it first international unit in Cancun. Five Guys continues to add new locations in the U.K. at a rapid rate. Fuddruckers opened in Italy. Popeyes is now open in 27 countries. Abrakadoodle continues to add units in China.
Food and beverage (F&B) franchises continue to be the leaders in global franchising, but education, retail, and service sector brands are becoming increasingly desired...


Learn More

Unveiling the 2016 Annual Franchise Development Report    

Franchise Update Magazine

Issue IV, 2015

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Michael H. Seid & Associates Business Opportunity

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