Franchise Trends

Build-A-Bear Workshop, in partnership with WiredSafety.org, is promoting October as "Stop Cyberbullying Month" at its stores and in its online virtual world, buildabearville.com. Cyberbullying, a growing problem among children, tweens, and teens, made national headlines in 2006 when a 13-year-old girl committed suicide after being bullied online by a group that included the mother of one of her former friends. The franchisor is focusing on online safety education and how to help prevent cyberbullying through several programs, by providing activities and materials to promote safe online 
play for kids, and by participating in a Stop Cyberbullying Coalition event on Capitol Hill on October 13.

Occasionally, it's good to confirm the obvious. What attracts prospective franchisees to a particular brand is a combination of expectations and emotions. While this is generally understood, we were able to use personal interviews at the March 2009 International Franchise Expo to delve into this topic further. We are grateful to the Expo sponsor, MFV, for allowing us to do this work.

You'll recruit new franchisees much faster if you initially understand, prepare, and learn the best methods for selling franchises. Working smarter shortens the race to the finish line! Here are some triggers that will help accelerate your pace.

I made a presentation to a national law firm's franchise practice group a few years ago with the title, "You Won't Believe What You Can Learn From a UFOC." The presentation was made to people who were responsible for putting UFOCs (now FDDs) together. They were surprised to learn all the things that could be analyzed and extracted from the documents they prepared.

Earlier this year at the IFA Expo, we interviewed nearly 100 prospective franchisees as they came into the hall -- and again as they left. We were looking for what attracts prospective franchisees to a particular brand.

Restaurants and retail businesses have been devastated since the start of the current recession, negatively affecting corporate franchisors and their licensed franchisees. Revenues have declined as customers have tightened their belts and restricted discretionary spending while joblessness has risen. Not surprisingly, bankruptcies in the retail and hospitality industries have increased - and evidence indicates that they will continue to do so.

The daily flurry of bad economic and financial news recently has made it difficult to focus on time periods beyond weeks, days, or even hours. However, I'll try to put things in perspective for the franchise community and offer both a forecast and some suggestions on how we can make the best of 2009.

Franchise Update Media Group, the leading industry resource for franchise development, today announced the 2009 Annual Franchise Development Report (AFDR), which identifies the latest sales and marketing industry intelligence, including top lead-generation sources and sales trends. The report is based on a survey of 148 franchisors representing 57,000 units.

Franchisors say they are preparing for the inevitable economic downturn by cutting costs and reviewing spending, but argue they are better suited to survive than other small businesses.

As the economy slows, companies are being forced to make tough decisions such as cutting costs and even staff. These decisions can undermine your brand if you don't take steps to protect it.

While the federal government's Emergency Economic Stabilization Act of 2008--better known as the "bailout"--has drawn a lot of controversy, the National Restaurant Association (NRA) lauds at least one measure included in the law as a "major victory" for the industry.

This report compares ten systems in the beauty industry: five in the tanning centers sub-sector and five in the hair care sub-sector. FRANdata examines the initial investment, unit financial performance and the ongoing fees of the systems.

When you see Dunkin' Donuts, Choice Hotels, and Supercuts landing the big deals, the question is, "Why can't I?" How can you attract these mega franchisees? How do they shop for additional concepts? What turns them on? What scares them off?

We are no longer doubting whether we are in a downturn. (As an economist, I'll refrain from calling it a recession until the economy's performance meets the technical definition.) Now the issue is how long, and how deep, a downturn we are in. Let's take the conservative approach to economic forecasting and assume that it could be longer and deeper than the past few downturns. What does that mean for unit development?