Getting New Franchisees Off to a Great Start

GETTING FRANCHISEES OFF TO A GREAT START…The likelihood of a franchise owner “going rogue” when a company is transparent in its expectations lessens. Franchisees know what is expected of them. 

 

Getting New Franchisees Off to a Great Start
Prepare them for business ownership through the onboarding and training process.

By Gary Occhiogrosso – Managing Partner of Franchise Growth Solutions, LLC.
Photo by Perry Grone on Unsplash

When training new franchisees, there is a term that is used regularly but has received a lot of criticism “Onboarding” Many Franchisors believe that the “onboarding process” begins once a candidate is awarded the franchise. I coach this process is a different way. At Franchise Growth Solutions we know that the onboarding process begins from the very first interaction the company has with the franchise prospect.

That said, let’s take a step back and first explore the goal of proper onboarding. In my opinion, the main focus is to create value for the brand in the minds eye of the candidate. Without value and respect for the brand, all the training in the world will not produce a franchisee capable of living up to his or her full potential as the operating franchisee.
Although franchisee training is often seen as a means to an end because of how quick paced it is and how much information is packed into training sessions, in and of itself training is certainly not the sole answer in producing quality franchisees. Through the years I’ve trained franchisors to understand that in order to successfully orientate a new franchisee; Mission, Culture and Core Values of the brand must be communicated to and embraced by the franchisee. Here again I cannot emphasize enough that franchisors must start building value and respect for the brand during the recruitment phase. It is during that time, potential franchisees and the franchisor should engage in meaningful, mindful conversation so that the franchise candidate understands what is expected of them and the Franchisor should understand what the franchisee expects in return. It’s a simple (but not easy) process that can lead to rejecting a candidate and losing the deal. However, trust me when I say, losing that candidate is a far better outcome than bringing the wrong franchisee into the system only to wreak havoc, compromise brand standards and lobby additional, otherwise satisfied franchisees into their negative mindset.
Successful onboarding and training requires transparency, consistency and follow up.

The likelihood of a franchise owner “going rogue” when a company is transparent in its expectations lessens. Franchisees know what is expected of them. In addition, the Franchisor’s support personnel should be out in the field in front of the franchise owner, coaching, counseling and working with the franchisee to achieve optimum results, financially as well as making sure the business is providing options consistent with the franchisees lifestyle goals. Supplying ongoing training that places resources within reach of the franchisee is not only vital at the onboarding phase but throughout the lifecycle of the business relationship.

This approach helps franchisees adapt as the brand grows and systems evolve. Preparing franchisees to deal with the issues that may come up along the way is key to building a successful franchise system. Ultimately solid onboarding and training should expose the franchisee to detailed information so the franchisee knows what the company expects and they can live up to the “Brand Mission”. Initial and ongoing training should support the idea that following the system is the most important aspect leading to the success of the business. This approach puts franchisees in a better position to make sound decisions concerning the business with little outside assistance and with little room to “reinvent the wheel”.

Franchisees need to be held accountable for holding the same high standards as the franchisor. In order to do this, your company culture, value proposition, training program, operations manuals, job aids and other franchisor supplied tools should be carefully develop, tested, reviewed and updated as necessary. The onboarding process and training program is never “done”. As the franchisor it is you job to insure that franchisees have access to the tools and support needed to grow and thrive.
Get new franchisees off to a great start through a sound onboarding process that starts at the first hello. Recruit and vet your candidates thoroughly, be certain they are a fit for you brand culture and buy into your mission statement. Provide them with the tools and support needed to navigate system changes as they occur. Give the franchisees the foundation they need to grow, develop, and succeed as business owners. An excellent franchise system, built this way from the start makes it easier for franchisees to overcome challenging situations as they occur, and they will occur.
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About the Author:
Gary Occhiogrosso is the Managing Partner of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm. http://www.frangrow.com
Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, advertising, selling franchises and guiding franchisors in raising growth capital.
Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program with it’s founders. He is the former President of TRUFOODS, LLC a 100+ unit, multi brand franchisor and former COO of Desert Moon Fresh Mexican Grille. He advises several emerging and growth brands in the franchise industry
Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine and named “Top 50 CXO’s” by SmartCEO Magazine. In addition Gary is an adjunct instructor at New York University teaching Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales and Marketing. He is also the host of the “Small Business & Franchise Show” broadcast in New York City and the founder of http://www.FranchiseMoneyMaker.com

MAIN STREET – TRAFFIC AND SALES TRENDS

WHAT’S HAPPENING ON MAIN STREET ?? – TRAFFIC AND SALES TRENDS
By Roger Lipton
Photo by Nadine Shaabana on Unsplash

There is not much to celebrate among restaurant industry operators. “Flat” is better than “Down”, but sales and traffic trends continued to be lackluster in April, and there is no reason to expect a change in May (now history) or the month to come. We have described many times how the dining industry has been an excellent leading indicator relative to the economy. We suspected earlier this year, as our readers know, that the lack of momentum in the restaurant industry indicated that the economy was unlikely to break out on the upside. That has proven to be the case as the slowdown in the economy is clearer by the day. The latest GDP expectations for the second quarter are in the 1.25-1.5% range, a lot lower than the 3.2% of the first quarter, and bringing the first half very close to the 2.3% of the Obama years.

While some worse numbers than shown below have circulated, we quote below the Miller Pulse survey numbers.

Back in restaurant land: Continued weak traffic was the feature in April, with higher check values (up 4.1%) overcoming a 2.1% traffic decline and bringing same store sales to a 2.1% increase. As we have said repeatedly, that is not enough to overcome higher labor, rents, and other operating expenses, so margins will continue to be challenged. The two year stacked comp is up 3.8% in April, down 10 bp from March.

By segment:

Quick service restaurants were up 2.7% in April, with 4.6% check average overcoming 1.9% traffic decline. Over two years, QSR SSS fell 30bp month to month to 4.3% so not much has changed.

Casual dining did worse, with same store sales down 0.5% in April even with a boost from the Easter calendar shift, and traffic was down 2.8%. Over two years, SSS was up 60 bp to a lackluster 1.3%, with traffic obviously down.

We have heard no credible reports that trends have improved in May so, with two thirds of the second quarter in the rear view mirror, and the economy showing signs of slowdown, there seems little reason to think that operating results will improve in Q2. A pickup could be in the cards, and the restaurant industry could lead the way, but not yet.

Read more from Roger Lipton here:
https://www.liptonfinancialservices.com/“>https://www.liptonfinancialservices.com/
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About the Author:

Roger Lipton is an investment professional with over 4 decades of experience specializing in chain restaurants and retailers, as well as macro-economic and monetary developments. After earning a BSME from R.P.I. and MBA from Harvard, and working as an auditor with Price, Waterhouse, he began following the restaurant industry as well as the gold mining industry. While he originally followed companies such as Church’s Fried Chicken, Morrison’s Cafeterias and others, over the years he invested in companies such as Panera Bread and shorted companies such as Boston Chicken (as described in Chain Leader Magazine to the left)

He also invested in gold mining stocks and studied the work of Harry Browne, the world famous author and economist, who predicted the 2000% move in the price of gold in the 1970s. In this regard, Roger has republished the world famous first book of Harry Browne, and offers it free with each subscription to this website.
Roger Lipton https://www.liptonfinancialservices.com/

PRESS RELEASE – Franchise Growth Solutions Exhibits Innovative Franchise Brands.

COME OUT TO THE INTERNATIONAL FRANCHISE SHOW…Franchise Growth Solutions Expands Internationally as Exhibitor and Speaker at The International Franchise Expo May 30 to June 01, 2019 at New York’s Javits Center

“We’ll be showcasing some of the most innovative and exciting franchise brands of the year.” Gary Occhiogrosso – Founder, Franchise Growth Solutions, LLC.
NEW YORK MAY 27, 2019

Franchise Growth Solutions LLC, the New York-based strategic planning, franchise development and sales organization, headed by franchise industry expert, Gary Occhiogrosso, will exhibit at the International Franchise Expo, May 30 – June 01, 2019, at the Jacob K. Javits Convention Center in New York City.

Mr. Occhiogrosso, a 30-year veteran of single and multi-unit franchise development and sales, was instrumental in the launch and growth of nationally recognized franchises including Ranch *1, Desert Moon Fresh Mexican Grille, and brands found under the 100+ unit multi-brand franchisor, TRUFOODS, LLC.

From booth #646, Franchise Growth Solutions will showcase some of 2019’s hottest franchise opportunities: Acai Express®, Riko’s® Thin Crust Pizza, Balloon Kings®, and MATTO Espresso® to an estimated 20,000 entrepreneurs and future business owners. Occhiogrosso revealed, “We’ll be showcasing some of the most innovative and exciting franchise brands of the year.”
With additional credentials as an in demand public speaker on franchise success, and as an adjunct instructor at NYU, and Contributor to Forbes.

Occhiogrosso will also moderate two panel discussions entitled. At the first discussion “ Private Equity and Franchising” scheduled for Thursday May 30th at 10am, Occhiogrosso will host a discussion between franchisors and private equity investment professionals on how to find capital, the best ways to position franchises for growth/investment, and a checklist of what is required for strategic partnership in the eyes of the investment community. “This is my favorite venue to present this panel, we bring together Emerging Brands and Private Equity Investors to discuss ways to capitalize on the fired-up equity markets in Franchising,” added Occhiogrosso. The second event titled “Using Your Digital to Sell Franchises” is scheduled for Thursday May 30th at 4pm and will cover how Franchisors can maximize their franchise solicitation by tapping into the vast array of tools now available in the digital world. Occhiogrosso said “This panel will feature experts in the Internet marketing industry who will share tips and best practices designed to create accelerated lead generation for their franchise sales effort.” The events are free as part of the attendance fee for the Franchise Expo.

The International Franchise Expo in New York City is the largest franchise show of its kind in the country. The three-day show traditionally attracts over 20,000 attendees and over 400 national and international franchise opportunities.
ABOUT FRANCHISE GROWTH SOLUTIONS, LLC

Franchise Growth Solutions, LLC is a strategic planning, franchise development and sales organization offering franchise sales, digital advertising, brand development, strategic planning, real estate selection, architectural development, vendor management, lead generation, and PR including social media. Franchise Growth Solutions’ proven “Coach, Mentor & Grow®” system puts both franchisors and potential franchisees on the fast track to growth. Membership in Franchise Growth Solutions’ client portfolio is by recommendation only.

For information on Franchise Growth Solutions or any of its franchise opportunities, please contact Gary Occhiogrosso at (917) 991-2465 OR email at [email protected]

Creating Sensible Employee Policies When Building Your Company

WHEN BUILDING A COMPANY, YOUR CORPORATE POLICIES… will mold and shape the culture and mission of your brand. In addition, your team members performance and the aspect of becoming an “employer of choice” to attract the “best and the brightest” are directly connected to the polices you create for your organization. Warren Cook,President & CEO of SymbianceHR offers his thoughts on best practices when developing policies for your company.

Development of Policies that Make Sense
– By Warren Cook, President & CEO

In my experience, small businesses owners care tremendously about their staff, so much so, that at times they develop practices that can later place them at risk and expose them to liability for discrimination. For example, paying an employee for a “few weeks” when they are out sick or taking care of a family member but then when a new employee wants time off since they are not friends, they are told use their paid time off or the absence is unpaid.

Maternity leave is another great example, as I have observed everything from 100% pay the entire absence without a policy written to working from home during the maternity leave, all while trying to provide FMLA coverage (job protection) when the company only had 8 employees. At the same time, when a male employee decided they wanted time off to be with their spouse and newborn, they were denied the request.

In another situation, an employee was in an auto accident, and the owner felt bad, so they continued their compensation at 100% for several months. Yet another employee, later in the year, requested time off because they heard about the other employee getting paid, and wham, problem for the employer because they didn’t want to pay this employee.

Inconsistency in practices is the road to discrimination, even if unintended. These employers and many other examples I could share, also neglected other means to provide the support to their employee they desired, without breaking the bank and destroying company cash flow. For example, implementing a Short Term Disability program, employer or employee paid, could allow for an offset of the cost in your current practice. Why? You pay an insurance premium instead of the full cost of the employee compensation. Let us not forget benefit premiums during an employee absence, that also can become a double hit on the employer with poor leave policies in place.

I encourage you to strategically plan for the various situations that can occur with your workforce, and then determine what is the most cost effective and beneficial method to provide the desired support to your workforce. It may be insurance, it may be time off, it may be alternative work schedules, it may be remote work, or it may be another solution all together. Remember, setting precedence using a discriminatory approach can expose your business to tremendous risk and liability even though your have great intentions. Seek the right advisor to help guide you through the development of legally compliant and non-discriminatory solutions to take care of your workforce with policies and programs that make sense. Visit: https://www.symbiancehr.net/

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About the Author: Warren Cook
Warren is a conscientious human capital management leader dedicated to providing coaching and guidance to business owners and leaders in support of their continued success. With over two decades of practical industry experience across the public and private sector, and various industries from pharmaceutical to financial to telecommunications, Warren enjoys applying his depth and breadth of industry and academic (BS/MBA/MS) experience to solving the workforce management challenges of today. With a proven track record of implementing successful solutions to business challenges by effectively orchestrating change initiatives, strategic planning & execution, system and process engineering, people development, and modeling leadership behaviors to motivate the workforce, Warren is uniquely competent and capable of driving continued business success for your organization.

Warren enjoys giving back to the community, and accomplishes this passion through his workshops and training to non-profit organizations and industry associations across the region and across the country. To further this ambition Warren served the Delaware HR & Business Community by presenting at the DE SHRM 2017 & 2018 Annual Conferences and was the lead presenter at the July 2018 DE SHRM Diversity & Inclusion conference.

Warren authored the book “Applicant Interview Preparation – Practical Coaching for Today” and provides training and coaching on this topic in the local community at schools and non-profit organizations to support the development of the next generation of professionals.

If you want to benefit from the experience and capabilities Warren has to offer, you can reach him by email at [email protected] or by phone at 302-276-3302. Visit: https://www.symbiancehr.net/

How Do I Get The Money to Start My Own Business and How Much Money Do I Need.

HOW TO FINANCE YOUR BUSINESS IDEA…Our friends at Benetrends have covered this topic perfectly. When you have a great idea for a business but not the cash to get it going. This article will offer helpful tools to get that business started and growing.
Photo by Mick Haupt on Unsplash

Entrepreneurial Dilemma: Do I Have Enough Money to Start My Own Business?
Author Benetrends

You have come up with a great idea for your own business, one that you are confident will be financially, personally, and professionally fulfilling. You are ready to start developing your business plan, doing market research, and testing marketing ideas.
How much money will you need to bring this idea to fruition? What kind of finances will you need to get things started and how much will you need on a monthly basis going forward?

These financial questions are often ones that keep entrepreneurs up at night, worrying about how much money they will need to be viable and successful.

It is a classic entrepreneurial dilemma: do I have enough money to start my own business?

Fortunately, most up-front and ongoing costs can be identified at the start of your ideation. Doing the work to build out your budget will bring you peace of mind and a foundation to use when pursuing small business funding. Here is a closer look at the framework you should use to determine your business costs.

What will it cost to open your business? Find out with our business planning calculator.Twitter Tweet This
Why Knowing Startup Costs Is Important

Startup costs give you and others a clear idea of what it will take to operate your business. Too many small-business owners underestimate their costs and end up playing catch up, undermining their growth or forcing them out of business. There are several benefits to projecting these costs:

Profit Analysis. Knowing what your costs are, along with your revenue projections, helps you estimate your profitability, including when you are likely to break even and how long you may be operating at a deficit.
Investor Expectations. If you are seeking investments to help finance your business, investors will want to see your startup cost analysis.
Loan Approvals. Lending officers, like investors, will want to know what it takes to open the doors and keep them open when considering your loan application.
Tax Planning. Anticipating your business costs helps you and your accountant plan your tax strategy by understanding what will be deductible when it comes time to file your taxes.
Peace of Mind. There is stress in starting a business. A clear-eyed understanding of your costs eliminates one uncertainty in the process.

Questions to Answer Before Building Your Cost Estimate…Read the entire article here:
https://content.benetrends.com/blog/entrepreneurial-dilemma-do-i-have-enough-money-to-start-my-own-business

Franchise Marketing – Do’s & Don’ts

FRANCHISE MARKETING – DO’S & DON’TS…Today’s featured post is courtesy of Harold Kestenbaum. Harold is one of the Top Franchise Attorneys in the country. He works exclusively with franchisors and has been involved in some of the most important franchises ever launched such as Sbarro, Ranch *1 and Five Guys. In this “double article” Harold shares his insights on franchise marketing and recruiting new franchisees.

The Dos and Don’ts of Franchise Marketing Materials
By Harold Kestenbaum

As an entrepreneur, it can often be worth your while to consider franchising your business. When you have a great product or service, franchising is an excellent way to create a new revenue stream, while increasing brand awareness. As with any new venture, the key to successfully franchising your business is laying the groundwork for a thriving enterprise. This begins with your franchise marketing materials.

Your franchise marketing materials are the key to attracting like-minded individuals to work with your business and grow your brand. It is important to remember though, that you must be careful with what you do and don’t say in these documents, as you want to remain legally compliant and truthful in your endeavor.

DO explain your brand, mission, and infrastructure. In your franchise marketing materials, it is vital to explain who you are as a company, how you operate, and why someone should want to work with you.

DON’T promise your franchisees any specific profits or financial gain. Since every market is different, it is important to refrain from making promises about a franchisee’s total profit or financial gain from buying into your business.

DO set the right restrictions. Your marketing materials should establish policies you have on hiring, training, proprietary processes, etc. but it should also allow the franchisees some freedom to make the business their own.

DON’T neglect to screen franchisees. Just as you would interview potential new hires for your location, you will want to screen franchisees once they have inquired about this opportunity. You want to build a network of people dedicated to your brand and mission.
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Franchise Marketing Materials 101: Establishing Your Recruitment Website
By Harold Kestenbaum

When you have made the decision to franchise your business, you will want to put a lot of time and money into your franchise marketing materials, especially at first. In order to grow your brand and find potential franchisees, these marketing materials must be appealing, straightforward, but also compliant with the law. As you begin working on your marketing materials and franchise recruitment website, it is important to work with a seasoned franchise attorney and remember these key tips.

Register your franchise: Before advertising your franchise to a particular state, it is important to know that many states require a franchise to be registered prior to the sale of any franchise location, but also any offer of franchise. This means you must take care of all necessary registration before launching your website in a given state or sending out marketing materials.

Understand the laws of advertising: Not only do you have to account for the franchise laws that apply to your business, but you also have to consider the other laws which affect advertising. These can include intellectual property laws, unfair competition laws, and deceptive trade practice laws. Your franchise attorney can review all marketing materials to ensure that you are not infringing on any other company’s rights and that you are in full legal compliance.

Provide clear, accurate information: To successfully gain leads from your website and marketing materials, it is critical for franchisors to provide clear, accurate information which provides potential buyers with enough evidence to make a purchase decision. This information should outline the requirements for buying into the franchise, as well as the type of support franchisees will receive once they are a part of the program. You will want to avoid words and phrases such as success and profit, so as not to mislead buyers about their expectations of buying into your franchise. You want to give franchisees truthful information, without making any specific claims about financial earnings, especially since every market is different.

Stay consistent: In all your marketing materials, you want to stay consistent in the way you represent your brand. You will want to avoid making promises that you cannot fulfill once a buyer signs a contract and purchases a franchise under your name. By staying consistent in all your content, you can avoid potential legal roadblocks down the road.
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About the Author
HAROLD L. KESTENBAUM is a franchise attorney who has specialized in franchise law and other matters relating to franchising since 1977. From May 1982 until September 1986, Harold served as franchise and general counsel to Sbarro, Inc., the national franchisor of more than 1,000 family-style Italian restaurants and, was a director from March 1985 to December 2006. From September 1983 to October 1989, he served as president and chairman of the board of FranchiseIt Corporation, the first publicly traded company specializing in providing business franchise marketing and consulting services and equity financing to emerging franchise companies, which he co-founded. Harold has authored the first book dedicated to the entrepreneur who wants to franchise his/her business, called So You Want To Franchise Your Business. It is a step-by-step guide to what a businessperson needs to know and do to properly roll out a franchise program. Harold’s book is available at major book stores and on Amazon.com or you can click here for more info on his book So You Want to Franchise Your Business.

Ten Tips For Evaluating A Franchise Opportunity

WITH THE UPCOMING FRANCHISE SHOW IN NYC, IT’S CRITICAL TO KNOW… how to evaluate the validity of the opportunity. My colleague, Ed Teixeira wrote this excellent article on properly evaluating a franchise system. You’ll find these 10 tips insightful.

How To Do A Preliminary Evaluation Of A Franchise Opportunity
Ed Teixeira – Contributor

You don’t have to be an expert in franchising to perform an initial evaluation of a franchise opportunity. I use my experience as a franchisor executive to know what to look for in a Franchise Disclosure Document (“FDD”) but it’s not necessary to have a strong knowledge base of franchising to make an informed decision. In addition, having seen the results of numerous franchise FDD analysis and comparisons, while at FranchiseGrade, I’ve become more aware of what separates the good franchise systems from the rest of the pack.

A prospective franchisee should have a process that’s easy to follow, this process is to focus on key items in the FDD, and although each item in the FDD is important, some are more important than others. This evaluation is not intended to replace comprehensive franchise due diligence, including obtaining franchisee feedback, but rather it’s a way to filter out the good performers from the rest. Before investing valuable time and money, you can find those franchise opportunities that meet key performance standards. I’ve presented this information ranked by what I consider to be most important so it may not follow the order in how they appear in the FDD.

My Ten Key Items:

1. Internet Search
The first thing I do is search the Internet using the name of the franchise with terms like “lawsuit”, “franchise complaints”, “franchisees sue”, etc. This only takes a few minutes and can lead you in a certain direction if you find some results. Unless there is a large number of negative results you’ll know that the franchise isn’t tainted. Keep in mind that large franchise systems based upon their size, are more susceptible to franchisee complaints and lawsuits than smaller franchise systems.

2. Franchise System Growth-Item 20

I look at franchise outlet growth over time. Steady growth over a three -year period is an indicator of a healthy franchise system. Negative trends, or up and down growth over several years can be indicative of an unhealthy franchise system. Be aware that poor franchise growth may not always reflect existing ownership since the franchise might have been re-acquired by new owners.

3. Franchisee Turnover-Item 20
Franchisee turnover is a key statistic to focus on. You can learn how many franchisees left the system for the most recent 3 -year period and the reasons why. Ceased Operations can be the result of a bad franchise investment opportunity or franchisee failure due to undercapitalization or poor site selection. On the other hand, a large amount of Franchisee Transfers can be a sign of a good franchise system with a strong market for resales.

4. Litigation-Item 3
Franchise litigation is an indicator of how positive, franchise relations are between the franchisor and its franchisees. Although disputes between the parties is a normal occurrence within franchise systems the absence of significant litigation in the FDD of a mature franchise system is an indicator of satisfied franchisees. When reviewing the FDD of a large franchise system, expect to find some amount of litigation. A good sign is litigation cases that represent a small percent of the number of the franchise outlets.

5. Financial Performance Representation -Item 19
The FDD should provide enough franchisee financial information to enable a prospective franchisee to create a pro-forma income statement and cash flow projection. The more financial information the better. With few exceptions, such as a franchise start-up, a lack of any financial disclosure is a red-flag.

6. Royalty and other fees- Item 6

I use franchise fees to include royalties, national and local advertising fund contributions, plus other fees to identify the total ongoing fees a franchisee is obligated to pay. More franchisors are using creative ways to charge fees, including a fixed royalty dollar amount plus a declining royal rate based upon franchisee sales.

7. Franchisee Investment-Item 7
The initial investment presented in the FDD is designed to provide prospective franchisees the estimated minimum and maximum amount of capital needed to establish and open the franchise. An important requirement of the items in the Initial Investment table is that each is item be as accurate and complete as possible.

8. Franchisee Territory-Item 12
The territory represents a key area when evaluating a franchise opportunity. The critical components of a franchise territory; is the quality of the franchise territory and whether it provides the franchisee the potential for continued growth and whether the territory is protected and exclusive and how it’s defined. Does the franchisor have the right to sell products or services to customers in the territory through various distribution channels?

9. Franchisor Financials-Item 21
Although a CPA is best qualified to review the franchisor financial statements, look for the primary sources of franchisor revenue. If a medium to large franchisor is generating more revenue from Initial Franchise Fees compared to royalties, it could represent a red-flag. Does the franchisor receive a large proportion of its revenues from vendor rebates? How much does the franchisor spend on G&A, especially franchisee support and infrastructure? For a more in-depth review, utilize a CPA to conduct the review.

10. Franchisor Rights and Franchisee Restrictions-Item 16
This section indicates what rights the franchisor retains over the franchise operation. Although all franchise agreement tilts in favor of the franchisor, too many restrictions on the part of the franchise and too few franchisor obligations in terms of assisting and supporting the franchise, require more review including questioning the franchisor representative.
Based upon the above, one can determine how a franchise opportunity has performed and whether it represents a reasonable franchise investment. Whether or not you’re an individual searching for one franchise, a potential multi-unit franchisee or a PE firm, this ten-step process can provide a straightforward method for vetting a franchise opportunity.
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About the Author:
Ed Teixeira is Chief Operating Officer of Franchise Grade and was the founder and President of FranchiseKnowHow, L.L.C. a franchise consulting firm. Ed has over 35 years’ experience as a Senior Executive for franchisors in the retail, healthcare, manufacturing and software industries and was also a franchisee. Ed has consulted clients to franchise their existing business and those seeking strategic solutions to operational, marketing and franchise relations issues. He has transacted international licensing in Europe, Asia, and South America. Ed is the author of Franchising from the Inside Out and The Franchise Buyers Manual and has spoken at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. He has conducted seminars, written numerous articles on the subject of franchising and has been interviewed on TV and radio and has testified as an expert witness on franchising. He is a franchise valuation expert by the Business Brokerage Press. Ed can be contacted at [email protected]

Franchising Your Business? – NOW WHAT?

FRANCHISING YOUR BUSINESS? – NOW WHAT?… A well thought out plan that is forward-looking for the first 1- 3- 5 years. Have you also given thought to the logistics, how do you intend to respond to all the incoming and make outgoing calls quickly?

Franchising Your Business? – NOW WHAT?
By Gary Occhiogrosso – Managing Partner – Franchise Growth Solutions

So you’re ready to launch your newly franchised brand. You’ve set up your store; proved it out over time, have the UFDD and the Operations Manuals in order, so now what? What do you have to show for all the time and money spent up to this point? Where’s the ROI?

How to be a Growth Story
Well, for a franchise system to truly grow, you must sell/award franchises to qualified individuals. You’re not a “growth story” if you’re not selling new franchise units. Hell, you may not even be a franchise story if you’re not selling franchises!
New franchisors are usually so caught up in the idea of “process” or in other words the work of the business so to say that in fact, they overlook the time, cost and needed strategy to sell franchises. I’ll bet many are so sure their franchise will be a hit that they think you can sell it on your own or use “success fee” broker network as the entire development plan. There are no zero cost decisions, one way or the other. How to grow and at what cost is always the question.

Harsh Reality
It doesn’t take long for the smart franchisors to recognize reality and ask themselves a tough question; what do you I know about selling a franchise? Most don’t even have a written Strategic Development Plan? Yes, a development plan, a plan that outlines the markets, the trade areas, the type of ideal franchisees, where to find them, the cost per inquiry, and the conversion percentage, the budget, and the goals. A well thought out plan that is forward-looking for the first 1- 3- 5 years.
Have you also given thought to the logistics, how do you intend to respond to all the incoming and make outgoing calls quickly? Make the follow-up calls; conduct the discovery days, and all the prospects questions, his wife’s questions, his attorney’s questions. Consistent, timely sales efforts rule the day. If you’re lucky, you quickly realize you don’t have the time or the expertise to launch an effective selling system for your franchise.

Ignorance is NOT Bliss
The danger and destruction of ignoring that realization can be seen at all levels in the franchise industry from dead brands to bankrupt franchisees. When franchisors fail to recognize that they are now in a completely different business than the concept they started, several mistakes can happen whether it is selecting the wrong franchise candidate. Or thinking they can service an international franchisee. Alternatively, opening in a market where they have distribution challenges. Or opening in a market with zero name recognition, franchisors can sometimes be their own worst enemy to growing their brand in an aggressive but responsible way. The successful Franchisors all come to the realization that just because they know their business doesn’t mean the franchisor knows the franchise business. Certainly not anymore than a franchise strategist might know the trade secrets of operating your business successfully.

Answering the NOW WHAT Question
The road is littered with new franchisors that tried the “Do It Yourself” approach. Alternatively, perhaps paid a company that is really in the business of selling paperwork like the FDDs, Manuals, & Brochures, but not selling the franchises. Or thinking a broker network, which is designed to supplement your selling strategy, should be your sole selling strategy. So we get back to the question; now what? We can help you answer that question. Please feel free to contact us at [email protected]
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About the Author
Gary Occhiogrosso Managing Partner – Franchise Growth Solutions
Currently, is the Managing Partner of Franchise Growth Solutions, which is a national franchise development and sales firm. Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, selling franchises and guiding franchisors in raising growth capital. Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program. He is the former President of TRUFOODS, LLC a 100 unit, multi-brand franchisor and former COO of Desert Moon Fresh Mexican Grille. Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine. In addition, is an adjunct instructor at NYU on the topics of Concept & Business Development as well as Franchising & Entrepreneurship. He is also the host of the “Small Business & Franchise Show” broadcast in New York City and is a contributing writer for www.Forbes.com on the topic of Franchising.

Press Release -Taboonette Middleterranean Kitchen Poised to Expand

Taboonette Middleterranean Kitchen – Top Fast Casual Franchise Poised to Expand

More great news on Taboonette – Our “Middleterranean” menu combined with our simple, efficient operating system makes Taboonette the perfect franchise. We proudly report our $1.8mm+ AUV in our FDD and want to talk with operators ready to grow.

Foodies are rejoicing. The restaurant cuisine is the perfect fit for today’s healthy lifestyle and the trending Mediterranean diet. Middleterranean foods combine the healthy oils, grains, and proteins of the Mediterranean region with earthy spices and stuffed and skewered specialties of the Middle East to create a cuisine all its own.

The restaurant’s hummus, falafel, and pocket foods: meat, seafood, and vegetable fillings, in pitas, bowls, or plates, are today’s go-to food with no second guessing required by the guest. Food is made to order, using flavor profiles created by Chef Naon that are designed to maximize every dish and provide a uniquely distinct competitive advantage for franchisees.

Read the entire article here
https://www.franchising.com/sponsored/taboonette_middleterranean_kitchen_poised_to_expand_as_a_top_fast_casual_fr.html

Lead Generation – Lifeblood of Franchise Sales

LEAD GENERATION – LIFEBLOOD OF FRANCHISE SALES…You’re damn right no one told you, or you may not have purchased the Op’s Manuals or had an FDD written. What you must consider is the total cost to launch a franchise company. Moreover, the most significant piece to that puzzle is the “Cost Per Acquisition” or Lead Generation.

By Gary Occhiogrosso – Founder Franchise Growth Solutions, LLC.
Photo by David Marcu on Unsplash

Despite what you’ve heard, start-up and emerging brand franchises do not sell themselves. Oh sure, we all want to believe that the brands we’ve created are so unique and special (like our children) that everyone will beat a path to our door just for the opportunity to invest a few hundreds thousand dollars in opening one of our franchises. Although I’m one of the most positive people you’ll ever meet when it comes to franchising, I’ve also been around long enough to know that a franchisor’s short view, lack of research and sometimes ego are responsible for one of the most the critical mistakes startup franchisors make. That is to underestimate the Cost Per Acquisition regarding Lead Generation.

Let’s go back to the beginning.
You have this idea to expand your business. You do a little research that leads you in the direction of franchising. So how does one do that? Well for many, after a quick google search, they come across listings for franchise attorneys that will write a Franchise Disclosure Document and a “Franchise Development” company that will take on the responsibly of writing a set of Franchise Operations Manuals. Many startup franchisors and emerging brands are led to believe that these two components on their own will make you a franchisor. While these items are necessary, this by itself happens not to be the whole truth.

My firm Franchise Growth Solutions specializes in start-up, emerging and turnaround franchise brands, I have witnessed the challenges facing these brands at their outset. As a result, I’m about to tell you the first thing you won’t want to hear – You need approximately $120,000 to $200,000 over the first 12-15 months of your startup to properly launch a franchise brand.

WOW – No One Told Me.
You’re damn right no one told you, or you may not have purchased the Op’s Manuals or had an FDD written. What you must consider is the total cost to launch a franchise company. Moreover, the most significant piece to that puzzle is the “Cost Per Acquisition” or Lead Generation. Here’s the second thing I’ll tell you that you won’t want to hear – Simply put, no leads, no franchise sales. Also, to be clear, we’re not talking about the enthusiastic customers that tell you they would love to open a franchise. Trust me, most of these evaporate as soon as they realize what it costs to open a business and that you don’t have a siphon hose that goes from your cash register directly into your pocket.

The data today regarding how much it costs to sell a franchise is overwhelming. It’s true every once in a while (like a total solar eclipse) we hear about the franchise brand that almost from its outset grabs the imagination of the general public and eventually investors, and before you know it, there are 150 operating units. There are three things to embrace with this scenario, one; it’s great to expect and even initially forecast that you fall into the solar eclipse category but bad if you build a long term financial business plan on it. Two, as I mentioned earlier, it is very very rare and three; many times (usually most, but I can’t quantify that) these rapid rising stars collapse under their weight due to lack of infrastructure, franchisor experience and lack of growth capital. Many of these franchisors believe they can support their growth by “selling franchises.” However, just like a hungry shark, the bigger it gets, the more bodies it needs to eat to stay alive – Ouch if you’re a franchisee that just got swallowed up so the franchisor could pay the electric bill at the office.

There is a “Light At The End Of The Tunnel.”
Some of the things we instill in our franchisor clients is the understanding that it takes time, patience and money. What’s daunting is; there are “unknowns” regarding how much time and money. We can point to statistics and make some forecasts, but forecast change and franchisors need to be able to move with those changing dynamics. If the Franchisor is unwilling or unable to modify and pivot their franchise sales program, they will eventually give up, fail or be sidetracked by some other interest, just like the dog that chases the ball no matter where you throw it, even in traffic.

The “light at the end of the tunnel” is the way the Cost per Acquisition will be reduced as you open units, garner more brand recognition, create successful franchisees and start to build up a digital footprint that will drive interested people to your franchise website. That said, it’s important to embrace three ideas; be properly capitalized as mentioned above, also slow and steady (within plan) wins the race. And lastly, solely chasing ROI is pointless. If you dismiss these three ideas, you run the risk of exhausting yourself and depleting your assets simply because you “need” to grow quickly. Notice I said “need” not “want.” We wouldn’t be prudent entrepreneurs if we didn’t want to grow our companies as quickly as possible. However, the frenetic, lizard-brained approach often misjudges,ignores the universe or doesn’t know that mistakes abound, egos mislead and eventually you have that sandwich chain that everyone was so high on in the early 2000s that has now all but vanished, seeing multiple bankruptcies and too many lawsuits to count.

The Full Picture
Getting all the facts on how to franchise your business is the most critical exercise you can perform. Launching your brand the right way may take a little more time and money, but a strong foundation, a good plan and great people will pay off in the long run.

For more information on this topic contact us at [email protected]