Mission Possible!: Autumn Conference Shows a Sense of Recovery in the Air

The importance of the "Mission Possible" theme was not lost on attendees at the 2009 Franchise Update Leadership & Development Conference this past September 23-25 at the Drake Hotel in Chicago. Many had been at this same location, just one year before, when the simmering financial crisis came to a head and the federal government rushed in with billions in bailout funds.

What a difference a year makes! After 12 months of tightening belts and pinching pennies, franchise executives--and their brands--appeared to be making a comeback, making "Mission Possible" more like a goal than a hope.

Franchise executives at this year's conference seemed characterized by a balanced optimism and a sigh of relief. There was general sentiment that both lead flow and the number of quality prospects were steadily increasing for most, and that the tight fists of lenders were beginning to loosen just a bit. Uncertainty had been replaced by glimmerings of optimism, tempered by a tough year.

From CEOs to up-and-comers

Franchise Update Media Group stages this pace-setting event specifically for franchise executives focused on enhancing their brand's lead generation and development. With an overarching focus on how the economy, sales, and technology are affecting franchise development, the sessions and seminars are designed to assist franchise development professionals in overcoming growth barriers and moving into 2010 with an advantage.

Dozens of brands and leaders were on hand as the conference kicked off Wednesday morning with "CEO Summit" led by Linda Burzynski, president of VL Service Corp. and the Franchise CEO Network. She led a diverse group of franchise CEOs and presidents through an all-day seminar that included growing the franchise system, access to capital, and keeping their personal and professional lives in balance. Candid interchanges among the executive peer group covered a wide variety of issues, solutions, and strategies. (See story.)

Simultaneously, a companion all-day session on "Mastering the Fundamentals of Franchise Sales" was taking place nearby. The session, targeted primarily toward new and emerging brands, also offered valuable insights to long-time veterans. These franchise execs used group participation and role-playing exercises to learn more effective ways to develop a successful franchise development program.

Wednesday's lineup was rounded out by a half-day session on "Successful Multi-Unit Franchising" and another on "Achieving High-Performance Sales Management."

As evening settled in on Chicago, a day of hard work gave way to an evening of networking as franchise executives mingled with vendors and sponsors in the Exhibit Hall and networking area.

State of the industry report

Thursday morning kicked off with a "State of Franchising" economic forecast from FRANdata President Darrell Johnson. The numbers guru made his annual presentation based on data his company collects and analyzes throughout the year. Johnson, who jokingly refers to himself as a "recovering banker," linked the state of the overall national and global economies with that of franchising, showing how broader economic trends are affecting franchise finance, recruitment, and growth.

"It was a crazy year last year, but 2010 will see a technical recovery," he said. However, he added, "The real economic recovery is beyond 2010 and things will be choppy in most sectors for the next two to four years. Fasten your seat belts." Johnson said access to capital will continue to be a problem for franchisors and franchisees, but emphasized that when properly positioned and petitioned for, it can be found. Barring unexpected changes, he said, "We will climb out of it, and we are, but it will take years."

Building a "Carrot Culture"

No Franchise Update Leadership & Development Conference would be complete without informative, dynamic keynote presentations, and this year was no exception. Chester Elton, author of the best-selling book The Carrot Principle and senior vice president of Carrot Culture, took attendees by storm in Chicago with his highly energetic delivery and positive message. Bedecked thematically with an orange tie festooned with a carrot pattern, orange handkerchief in his breast pocket, orange socks, and an orange watch, he stressed the importance of regularly recognizing employees and team members.

"The carrot equals recognition," Elton said. "The opposite end of the carrot is the stick, and you don't want to use that." Through studies and anecdotal evidence, he made a strong case for recognizing employees for specific contributions. By doing so, he said, leaders can "accelerate employee engagement, retention, and performance." The idea is manifested in a workplace that people love to come to, and in an atmosphere of growing trust. "Rewarded behavior gets repeated," he said.

Elton, a fast-paced speaker with an engaging message and a quick sense of humor, peppered the audience with questions throughout. He also peppered anyone who answered his questions correctly (and anyone else he chose) with stuffed toy carrots, thrown with great enthusiasm from the stage.

And the survey says...

The keynote was followed by the release of results from Franchise Update's 11th Annual Lead Generation Survey. Steve Olson, Franchise Update's publisher, presented an overview of the results, along with insightful observations. Full Results are available in the Annual Franchise Development Report, published by Franchise Update Media Group

One hundred sixteen franchisors, with more than 38,000 franchise units, participated in this year's study. Among this year's key findings were that franchise recruitment budgets were slashed significantly: the average amount spent during 2009 was $182,000, a figure projected to drop to $162,000 in 2010. Not surprisingly, only 9 percent of those surveyed said they were exceeding their 2009 sales goals. New this year were questions about the use of social media for franchise recruitment. Said Olson, it's another tool in the sales arsenal, but still too early to know the effect it will have on franchise recruitment and development.

To get better results from your sales and development team, Olson recommended, do a better job monitoring your sales team. "Shop your own sales people and consider outsourcing to a lead follow up service," he said. (Click here for more on the survey.)

The morning's general sessions were followed by lunch in the sponsor networking area, and a room abuzz with energy as attendees digested the morning's presentations.

CEO Power Panel

Thursday afternoon began with a "CEO Power Panel" general session moderated by Linda Burzynski. Panelists were Ray Titus, president of United Franchise Group (UFG); Martin O'Dowd, president of Hurricane Grill & Wings; and Gordon Logan, CEO of Great Clips. Each spoke of the importance of leadership being characterized by perseverance and tenacity.

Burzynski quizzed the panel of franchising veteran on how they had faced professional challenges, asking "When the going gets tough, how do you get through it?" Each responded with candid, real-life stories from their careers. Titus said a five-month stretch earlier this year was the worst he'd seen in 25 years.

She also asked them about the most important initiatives they launched in the past three quarters as they confronted the fallout from the economic downturn. Logan said Great Clips had been able to take advantage of the market to "negotiate better leases, roll out a new store design, and work to develop relationships with bankers." Titus said one UFG's "saving graces" was the home-based brands in his organization. Resales also helped keep the corporate ship afloat. "We had a number of resells last year, which we think provided us with an opportunity to upgrade our system," he said. O'Dowd weighted in with Hurricane's reduced royalties for six months, a smaller restaurant footprint to cut entry costs by 40 percent, and increased transparency with franchisees to restore credibility (the brand has had three new owners in 30 months).

Burzynski, who has led a few franchise brands herself, concluded the CEO Power Panel by saying, "When hope meets strategy is cause for optimism."

Concurrent breakout sessions followed, with attendees joining discussions on topics that included "How To Create a Response-Driven Website that Trumps Your Competition" and "Driving Sales on All Cylinders: Selling Solutions to Outsource Options."

Following a short break in the networking and exhibitor area, attendees reconvened for late afternoon concurrent sessions hosted by experienced franchise executives who opened the sessions for lively discussions. Topics included "Optimizing Discovery Day," "Closing Today's Cautious Buyers," and "Multi-Unit Operators: Attracting Today's Hottest Buyers."

STAR time!

One of the signature events at every Franchise Update Leadership & Development Conference is the announcement of the STAR Awards winners. To determine the winners, Franchise Update mystery shops most of the franchise brands that signed up for the conference. The mystery shoppers pose as qualified prospects and catalogue each brand's responses to their phone calls and online inquiries. This year, for the first time, this year's STAR Awards recognized brands that were successfully using search engine optimization (SEO) and social networking in their recruitment efforts. (See separate story.)

Following the STAR Awards presentation and a celebratory dinner banquet, the Franchise All-Star Band--franchise executives and vendors who play well together--took the stage for a live concert of classic rock and pop oldies-but-goodies (with an impromptu singing performance by a guest) and attendees danced the night away.

Wrap-up

Friday morning served up breakfast and three tracks of roundtable discussions. Sales, lead generation, area representation, and international expansion were some of the topics, along with discovery days, response-driven websites, and creating development agreements.

Two concurrent open sessions followed. The first was a panelist of finance and banking experts who discussed the state of capital, the economy, and how franchisors should be trying to work with lending institutions. The second was a legal workshop that addressed audience questions about FDDs, financial performance representations, and avoiding franchisor liability in the sales process and in resales.

The conference's final event provided a forum for franchise development executives to openly discuss strategies with their peers. Sessions were broken out based on three franchise investment levels: up to $125,000, $126,000 to $500,000, and greater than $500,000.

Looking forward

In the end, attendees gladly accepted the "mission" at this year's conference. In fact, the turnaround from last year's uncertainty and gloom already was evident from the outset, and attendees left for home brimming with renewed optimism and fresh ideas to help in their development efforts in the coming months.

The next Franchise Update Media Group conference is the Multi-Unit Franchising Conference, March 24-26, 2010 at the Mandalay Bay Resort and Casino in Las Vegas. Visit www.multiunitfranchisingconference.com for details.