Franchisors Shouldn’t Confuse Franchisee Validation with Endorsement

Posted on May 4, 2022May 4, 2022 by Franchise Strategist

Photo by Kenny Eliason on Unsplash

Successful franchisee validation is so important, it’s common for most franchisor development staff to be aware who their best franchise validators are. Franchisor staff might even recommend which franchisees to contact, because some franchisees don’t want to be bothered while others are flattered to offer their feedback.

By Ed Teixeira

It’s an established fact that to develop a franchise system the franchisor needs to have franchisees who will validate the value of the franchise, including franchisor services, support and quality of the franchise program.

Most of the literature that offers advice to prospective franchisees states that the most valuable source of information on a franchise system is from existing franchisees. In fact, it’s often said that franchisees help sell new franchises as much as franchise development staff and brokers.

It’s important to recognize the difference between franchisee validation and using franchisees to endorse the franchise brand. When a franchisor utilizes existing franchisees in ads or social media to endorse and promote the franchise brand there can be risks. For example, I recall an incident when one of the franchisees in our franchise system helped to obtain a prized national account contract. For his efforts, he was granted a financial benefit from the specific National Account revenues. However, as a further show of appreciation, the franchisor President had the franchisee thanked in a marketing piece and on the franchise web site. A few months later, a dispute led the same franchisee to file a lawsuit against us. It’s one lesson I’ll never forget.

Although franchisors may utilize their franchisees to market its products or services to customers, its different from having their franchisees actively promote and endorse its franchise opportunity.

When it comes to franchisee validations and endorsements, a franchisor should:

Expect franchise candidates to contact a franchisee in an ad for validation. This means that franchisee must remain satisfied with the franchise and franchisor support and services.
When using a franchisee for an endorsement avoid statements that may represent an earnings claim. For example, ‘I’ve made lots of income from this franchise.”
Be wary of how franchisee advertising funds are being used. Using ad funds that single out certain franchisees could cause other franchisees to be upset by publicizing certain franchisees.
In franchise locations visited by customers who could become prospective franchisees the franchisor should promote the franchise opportunity by having tri-fold brochures describing the franchise opportunity and signage to announce the business is franchised.
When recruiting franchise candidates be sure to recognize the difference between positive franchise program validation and using existing franchisees to endorse and promote the franchise opportunity. In the case of franchisee endorsements, there is always the possibility that the franchisee if disgruntled, could be embarrassing to the franchise program.

About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].

Franchisor Focus: The One Responsibility of Franchising Too Many Franchisors Overlook

Posted on March 21, 2022March 22, 2022 by Franchise Strategist

The relationship between a franchisor and their franchisees touches every aspect of a franchise operation ranging from developing the franchise system to franchisees participating in aggressive price promotions. A positive relationship can enable success while poor franchise relations can thwart it.

Franchisor Focus: The One Responsibility of Franchising Too Many Franchisors Overlook
Courtesy of Ed Teixeira

As I consider subject matter for my franchise blogs it’s sometimes challenging to come up with a stimulating topic. Because I direct content mainly to franchisors, it’s important to provide helpful and constructive information. Whether as a franchisee, franchisor executive or providing operational advice to franchisors I’ve always advocated that a franchisor should have a strong franchise relations strategy. Certain franchisors are familiar with the clichés often attributed to fostering a climate of positive franchise relations, including having profitable franchisees, responding promptly to their emails, telephone calls and requests for assistance. Unfortunately, some franchisors don’t give franchise relations the attention it deserves.

In 1992 I was fortunate to contribute to the first IFA Franchise Relations booklet, so I decided to review articles written by franchisor executives. Although the booklet was published 29 years ago, in terms of franchise relationship management very little has changed. The same principles and policies that were advocated then remain the same. No other component of the franchise business model has remained constant.

Here are four questions that franchisors need answered to appraise the state of their franchise relations.

Are the franchisees profitable?
Whether using Key Performance Indicators (“KPIs”) or franchisee financial statements to measure franchisee financial and operational performance, this is an important responsibility of every franchisor. Rather than obtaining an answer to this question many franchisors focus on identifying the franchisees that aren’t profitable. The problem with this approach is that the franchisor lacks key financial and operational data that pertain to their entire system and individual franchisees.

Are franchisee customers satisfied with the products or services?
Franchisors should have a method for obtaining franchise feedback regarding the level of customer satisfaction. Whether using customer satisfaction surveys, franchisee focus groups or surveying franchisees its important information that should be gathered. This data benefits the franchisor and its franchisees.

What are our franchisee competitors doing?
Franchisors that display an interest in the behavior of their franchisee competitors will receive high marks from their franchisees. Many franchisors rely upon their franchisees for competitive information, however when the franchisor plays an active role in this process it benefits the franchise system and enhances franchise relations.

Is the franchisor doing the best it can?
Whether using a third-party firm to survey franchisees or doing their own survey, a franchisor must have a method for measuring their franchisee satisfaction levels. When the results are tabulated, the franchisor will know which areas if any can negatively impact franchise relations and may require attention.

Despite the countless changes that have occurred in the franchise industry over the years, one constant is the importance of franchise relationship management. Franchisors should be focused on evaluating and managing their relationship with their franchisees.

About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].

Guests Are Back: How The Restaurant Industry Has Changed Forever – And For Good

Posted on January 1, 2022January 5, 2022 by Franchise Strategist

The guests are back: 77% of U.S. consumers in Lightspeed’s poll are dining out at least once a month or more, with 40% dining out more than two to four times a week, and 30% saying they are dining out more than they were before COVID, taking advantage of what they’ve missed.

Guests are back: How the restaurant industry has changed forever – and for good

(BPT) – In this new era of hospitality, technology is driving customer retention, automation and efficient food costing, which have all become key to profitability. The pandemic forced restaurants to adapt to not only a new, leaner business model but new consumer behavior as well. With customers opting for alternatives to dine-in, restaurants adapted to build solutions to offer takeout, delivery and curbside pickup options. Meanwhile, restaurants are struggling with staffing challenges, government mandates and dynamic reopening in different regions.

In a recent Lightspeed and OnePoll survey of Global hospitality merchants, 90% feel that technology has helped their business survive the last two years, and 92% feel their business is more efficient today than it was one year ago. Peter Dougherty, GM, Lightspeed Hospitality, offers three ways tech is reshaping the hospitality industry:

1) Once seen as a job killer, automation will save an understaffed industry.

In a recent JobList survey of 13,000 hospitality employees, nearly half said they had left their job for good, and a third said they were done with the industry. This aligns with Lightspeed’s U.S. research which shows 55% of operators struggling to retain staff.

Amid this shortage, restaurant operators and customers are seeing the value in automation technology. This means saving time by automating functions like taking orders or processing inventory with a solution like Lightspeed Restaurant. Lightspeed found that 67% of hospitality merchants in the U.S. see more automation as the best way to combat employee turnover, 50% plan to utilize some form of automation technology within the next two to three years, and another 50% also see a future with more flexibility for hospitality employees.

2) Guests’ behavior drives technology, but also staff shortages.

QR codes, once seen as outdated tech, were one of the big winners of distanced dining. And with restaurants and bars more short-staffed than ever, guests are suddenly more comfortable ordering through a QR code while a smaller floor staff maintain a level of guest service. When it comes to U.S. consumers dining out, ordering through a QR code (21%) or contactless payments (31%) made them feel “safer.”

But this rabid return has had its consequences: 62% of hospitality professionals in the U.S. report that guests have been more demanding, and 40% said they were tipping worse. 48% of U.S. merchants say “more patience and empathy” from guests would help them retain staff.

3) Technology helps merchants diversify their business.

The pandemic forced a tremendous amount of change in the hospitality industry, with 90% of U.S. merchants surveyed noting they feel that technology has helped their business survive the last two years.

When asked what technology had the biggest positive impact on their business, nearly half of merchants (47%) noted online ordering; a habit once relegated to urban millennials that became a necessity during COVID-19. Lightspeed’s survey found that 37% of U.S. merchants have brought their online ordering technology in-house to avoid third-party fees, and 60% say guests are still ordering more takeout than before COVID.

Looking ahead to the future, 78% of the merchants surveyed see online ordering technology vastly improving in the next two to three years, which will likely be a time of consolidation and automation for the industry, as stand-alone players will struggle to compete with larger integrated solutions.

3 Trends Poised For Growth In 2022 And The Tech Startups Helping To Fuel Them

Posted on January 1, 2022January 5, 2022 by Franchise Strategist

3 trends poised for growth in 2022 and the tech startups helping to fuel them

(BPT) – The past year has brought a flurry of changes for many people. Maybe you’ve embraced online shopping and want to start to incorporate meal planning into that experience. Perhaps you’ve gotten into selling things from the comfort of your home or you’re now working remotely with people around the world.

Digital solutions meet modern needs so you can do these types of things successfully, whether you’re a consumer or an entrepreneur. Three of the top digital trends of 2022 showcase the growth of technology solutions by innovative startups focused on making life better.

Trend 1: Simplified online grocery shopping

The food marketplace is an evolving space with two trends poised for continued growth: online grocery shopping and meal planning. Grocery Shopii is the solution for shoppers who want to integrate meal planning into a customized online shopping experience.

Today, meal solutions are helping consumers tackle meal fatigue and save time. Not only are Shopii recipes curated by top bloggers, they’re hyper-personalized to each client’s preferences, offering suggestions that align with existing shopping habits. Plus, Grocery Shopii utilizes machine learning to expedite meal planning and online grocery shopping to 5 minutes or less.

Grocery Shopii is free for shoppers and helps grocers provide a tailored experience, which in turn builds customer loyalty. Learn more at GroceryShopii.com.

Trend 2: Interactive fashion resale marketplace

What people choose to wear defines who they are, and today more people than ever want to stand out in their own unique way. That’s why interest in vintage clothing, upcycled fashion, and handmade accessories is soaring, and Galaxy is connecting passionate sellers with engaged buyers.

Galaxy is the first platform of its kind to fuse live shopping and fashion resale, creating a truly social, entertainment-geared shopping experience with sustainable fashion at its core. With Galaxy, shoppers can have conversations while buying, allowing them to make more informed decisions and understand the stories behind the pieces they’re browsing.

Galaxy enables the next generation of fashion entrepreneurs to find and build their community, plus, unlike other platforms, takes no commission or fees. Visit Galaxy.Live for more information.

Trend 3: Symbiotic solutions to labor needs and economic empowerment

The labor shortage crisis, the Great Resignation, diversity challenges — job economy topics continue to capture headlines. Companies of all sizes are struggling to fill roles with quality candidates who meet their needs.

Meaningful Gigs is one solution that solves many issues that companies are facing today. This tech-packed platform connects skilled African designers with companies seeking high-quality digital design work. Their vision is to create 100,000 remote skilled jobs in Africa by 2028.

Meaningful Gigs provides companies with a way to tap into global diversity while also delivering critical design solutions for their businesses for creative, product and marketing teams. By supplying people in Africa with skilled jobs, the company focuses on continuous economic empowerment and socioeconomic advancement. Discover more at MeaningfulGigs.com.

2022 is sure to be a year of continued change as people increasingly rely on digital solutions. Explore these trends to see how they impact your life, and consider new technologies to meet your needs.

HOW TO ATTRACT AND RETAIN EMPLOYEES AS WE EXIT THE PANDEMIC

Posted on December 2, 2021December 3, 2021 by Franchise Strategist

Some of the causes of the great employment disruption of 2021 are beyond the influence of employers. However, there are a number of initiatives that can be implemented by employers to retain employees and attract those who are looking for a change in what they do. So, how do you retain and attract employees?

HOW TO ATTRACT AND RETAIN EMPLOYEES AS WE EXIT THE PANDEMIC
by Stan Silverman
Article originally published in the Philadelphia Business Journal on November 15, 2021.

Due to the effects of the pandemic, 2021 will be known as a year of immense employment disruption. This is especially acute in the restaurant, hospitality and other service industries, where employees now have higher-paying employment alternatives.
The cause of the Great Resignation is not limited to dissatisfaction with pay. Many employees who are nearing retirement have decided to leave the workforce earlier than they had planned. Other employees have reevaluated their lives and decided what they were doing was not for them.

Some employees are burned out dealing with hostile customers and working to meet pent-up demand. Others have left the workforce because they cannot afford childcare. There are those who point to governmental assistance as the reason people are not working, but that assistance ended in September.

Employees come before customers

In my columns for the Philadelphia Business Journal, I have emphasized the importance of delivering a great customer/client experience as a way to become the preferred provider in the marketplace. It’s your employees who deliver a great customer/client experience.

Quoting Sir Richard Branson, co-founder of Virgin Group, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.” Treat your employees well. They will help you become a preferred employer.
Nurture a culture in which your employees develop a sense of ownership in what they do. Listen to their ideas. Value their contributions. Never micromanage. Set expectations, empower them and cut them loose to do their thing.

Compensate employees so your company is an attractive employment alternative

For years, many have advocated raising the federal minimum wage to $15/hour, with little success. Today, many businesses need to pay $20/hour or more to attract employees. Why? Employees have alternative employment opportunities not only within the same industry, but also within other industries that are rapidly growing. For example, an employee working at a restaurant can quit and go to work for Amazon instead. Pay employees competitively with their alternatives to keep them and attract others.
Will increasing the compensation of employees require companies to raise prices? Yes. The economy will adjust as it did after the dramatic increase in oil prices during the 1970s.

Differentiate your company and its culture

Just as you differentiate your company so customers/clients want to buy from you instead of your competition, differentiate your company so employees want to work for you rather than their alternatives.
Treat all employees as important to your success. Show your appreciation for what they do. Where practical, depending on the job, institute a hybrid model, giving them flexibility to work remotely or at the office. There are companies that have been operating 100% virtually with great effectiveness for many years without adversely impacting employee collaboration. Saved commuting time is spent working on business issues, as well as taking care of personal matters, which reduces employee stress and increases morale.

Differentiate your company from others. Treat your employees as you would like to be treated. Make it part of your brand. Your reputation will attract the employees you need to run your business.

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About the Author
Stan Silverman is founder and CEO of Silverman Leadership and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read nationally syndicated columnist on leadership, entrepreneurship and corporate governance. He can be reached at [email protected].

HOW BUSINESS AND CONSUMERS CAN STAY SAFE DURING THE ONLINE HOLIDAY SHOPPING SEASON

Posted on December 1, 2021December 3, 2021 by Franchise Strategist

Doing holiday shopping or making financial transactions when a device is on a public network can be risking identity theft.How are companies safeguarding consumers from identity theft and other forms of fraud? With a thoughtful approach that combines forward thinking with cutting-edge technology.

How businesses and consumers can stay safe during the online holiday shopping season
COURTESY OF BRAND POINT

(BPT) – The 2021 holiday shopping season is bound to break records. The National Retail Federation predicts an increase in sales between 8.5-10.5% over last year, and a record 87% of shoppers plan to shop online, according to PYMNTS.com. That’s an increase of 13% in online holiday shopping compared to last year.

In fact, approximately 263 million people in the U.S. are currently online shoppers. This dramatic growth in online shopping, especially over the holidays, brings with it increasing concerns about keeping accounts safe and secure from fraud — both for consumers and for the companies where they do their shopping. More than four out of ten (42%) consumers expressed concerns about security when shopping online, according to recent reports.

According to Juniper Research, retailers could lose over $20 billion in 2021 due to online fraud, which includes identity theft, illegal access to online accounts, using forged or stolen credit cards, SIM card theft and more.

Customers and companies can play an important role in protecting themselves from fraud over the busy holiday shopping season.

How customers can help defend their accounts from fraud

From the customer point of view, here are three things that can help keep accounts safer while shopping online:

1. Be password smart. Using stronger passwords, such as phrases, and making sure each password is unique for each account will improve security. A password manager is a good way to beef up security, as it generates stronger, unique passwords and keeps track of them.

2. Shop with trusted vendors. Buying from familiar retailers is usually safer, as is going straight to the website, and avoiding clicking on links from ads on social media or random emails. This comes down to KYB (“Know Your Business”): Customers need to ensure that the website where they do their shopping is secure. Does the web address begin with “https”? Are user authentication protocols in place, and do they offer secure checkout?

3. Stick with secure networks. Doing holiday shopping or making financial transactions when a device is on a public network can be risking identity theft.

How are companies safeguarding consumers from identity theft and other forms of fraud? With a thoughtful approach that combines forward thinking with cutting-edge technology.

How companies are working behind the scenes to help protect consumers

Companies today take identity theft and fraud seriously, as it affects their bottom line — and jeopardizes their relationships with customers. Fortunately, technology is constantly advancing to help safeguard against fraud and stay one step ahead of the criminals. This is more crucial than ever when holiday shopping online is at an all-time high, and online fraud and identity theft are, too.

“Protecting companies and customers against predatory behavior is increasingly difficult, as online fraudsters continue evolving and adapting,” said John Troutman, director, Digital Identity Expert Team at TeleSign. “Just as fraud attempts become more complex, protection for any business must keep up with that complexity. We use multiple approaches, tailored to each client, to find the most effective, up-to-date solutions.”

Here are three ways companies use innovative technology to guard against theft and fraud:

1. Two-factor authentication

Companies and financial institutions improve security by adding another step to verify customer identities. With two-factor authentication, the business sends a single-use authentication code to a customer’s email, phone (voice) or text (SMS).

However, even two-factor authentication has one area of vulnerability: Identity thieves trying to access an account could enter their own phone number to obtain the authentication code, or in some cases, can even swap out the SIM card on a customer’s cell phone.

Fortunately, TeleSign, an authority on fraud protection and safe e-commerce practices, helps corporations guard against these and other threats with products and services to help them evaluate customer behavior and detect signs of fraud.

For example, behavioral attribute insights determined using TeleSign’s Score product can identify safe and unsafe activities. This technology helps companies “see” into network actions to determine the answers to these questions:

Is the text behavior abnormal?
Is abnormal activity happening at off hours?
Are numbers calling or texting a customer from unusual area codes?
Is a customer’s number being used for malicious purposes?

These insights help detect unusual use of a cell phone to let companies know that there’s a problem. This high-level analysis helps keep customers safer, and works to avoid account takeovers and fraudulent activities.

TeleSign can also help determine the status of a customer’s phone number to see if it is active, and can do a recent SIM card check to see if a SIM card was swapped.

2. Knowing their customers

With millions of transactions being conducted over a busy holiday shopping season, how does a company know their customers well enough to detect fraudulent activity on their accounts? They need to use Know Your Customer (KYC), an approach which relies on A.I. and machine learning to accurately assess patterns in behavior — and detect changes in those patterns, which could signal fraud or identity theft.

TeleSign uses advanced Application Programming Interfaces (APIs) to help companies know their customers better. APIs deliver user verification, data insights and communications to help companies prevent account takeovers, support company ecosystems inside and out, minimize fraudulent transactions and securely verify customer phone numbers.

3. Companies need to leverage the best possible support for effective fraud prevention solutions

TeleSign’s technology uses complete in-depth data analysis to identify and prevent possible breaches, helping businesses set up and prepare fraud prevention solutions to create a frictionless, E2E customer journey. TeleSign’s solutions are trusted by some of the world’s largest platforms, including Citrix, Skype, Electronic Arts (EA), ByteDance and Salesforce.

To learn more about how companies can protect their holiday shoppers from fraud and identity theft, visit TeleSign.com.

THAT 1 PAINTER CONTINUES TO GROW AT AN INDUSTRY RECORD PACE

Posted on December 1, 2021December 3, 2021 by Franchise Strategist

His desire to lift his community up merged with That 1 Painter’s vision for giving: “My goal is to create jobs for the people around me, so when I read the statement Steven gave about Paint It Forward, I liked the idea of giving back to the community in that way.”

That 1 Painter Signs Franchisees in Houston, San Antonio & Las Vegas
By That 1 Painter

That 1 Painter has officially signed three more franchisees, bringing its total to five signed franchisees in their first four months of launching, paving the way for upcoming locations in Houston, San Antonio, and Las Vegas.

These franchisees aren’t shying away from big goals. Motivated by the challenge of growing with a new enterprise, they’re looking forward to seeing That 1 Painter’s proven systems play out in their hometowns to offer jobs to their communities and offer resources to those in need.

That 1 Painter Signs Three More Franchisees
At That 1 Painter, we work hard to build a culture in which everyone thrives because everyone lends a helping hand.

We Show You How To Build Your Team to Build Your Business
For Houston’s Donald Nguyen, knowing this local business thrives in a competitive market is what pulled him to T1P: “I looked at a few of the competitors and liked that That 1 Painter is local. Because That 1 Painter is a new franchise company, the market is more open – compared to the older ones. Also, I like challenges and that’s another reason I want to go with a new one!”

Vegas’ own Jose Mendoza sees similarity of vision between he and T1P’s founder “I was looking for a business that was fairly new for opportunities to grow. Steven seems very hands on and shares the same goal to expand.” and knows he’s the best guy to serve his hometown community: “I have been in Vegas for over 30 years and have seen it grow. I enjoy working with people and have extensive customer service skills.”

Josh Montana brings his love of people to San Antonio, “That 1 Painter offers services that help a homeowner make their vision a reality. Our work has a positive ripple effect that starts with the customer and permeates into their neighborhood. The joy achieved by renewing our living space creates a chain reaction of positivity in our neighborhood and personal life.”

That 1 Painter’s dedication to fantastic service is a huge part of what draws people to sign on for a franchise. Evidenced by a multitude of stellar reviews and their doubling revenue during the pandemic, this company has proven their systems work and that they know how to teach them. With an extensive training program that involves personal coaching, a remarkable Brand Team, and seamless scheduling systems, franchisees have enough support to hit the ground running before their business even launches.

That 1 Painter is offering a $10,000 discount off of the regular price of $39,000 to the first ten franchises they sign. That means there are only 5 spots left! Visit that1painterfranchise.com to learn more, and if you’re interested in taking advantage of this limited time special, contact Gary Occhiogrosso at FRANCHISE GROWTH SOLUTIONS [email protected] today.

About That 1 PainterBorn out of a passion and purpose to help people, That 1 Painter has grown since its founding in 2011 to offer over 18 painting services to the communities of Austin, San Marcos, Tyler, Longview, Frisco, and Plano with other locations already in the works. T1P uses its resources and talents to offer free painting to those in need, through their Paint It Forward program and extends it’s missional outreach to refugees in Africa. The very core of this business is to spread love and generosity throughout the world and to bless their customers with outstanding service while achieving their mission
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Franchise Your Business and Expand Your Brand Learn more here: www.frangrow.com

Learn Why Your Should Franchise:https://www.forbes.com/sites/garyocchiogrosso/2020/12/09/5-key-reasons-to-franchise-a-restaurant-concept/?sh=3b4686245309

KEY TIPS FOR LAUNCHING A SUCCESSFUL RESTAURANT

Posted on December 1, 2021December 3, 2021 by Franchise Strategist

Key Tips For Launching A Successful Restaurant.
BY Gary Occhiogrosso Contributor

For many people, opening a restaurant is a dream. One of the many things I find so interesting about the restaurant business is the blend of creative artistry and the detailed and challenging business aspects necessary to be successful. As an Adjunct Instructor at NYU’s School of Professional Studies, I teach restaurant concept development and business planning. On several occasions, I have been asked by my students to summarize the top issues that one must consider when planning to open a restaurant. Generally, regardless of the type of restaurant, the planning and considerations are the same. I’ll cover a few of the top line elements here.

At the beginning of the process, you should write a simple business plan. It would help if you thought about the many pieces of the puzzle connected to a successful outcome. Many novice restaurateurs, very often chefs, only consider the food component, but there is so much more. A well thought out business plan will include creating a unique concept, a competitive analysis, site selection, financial projections, equipment needs, staffing, and of course, the menu.

Let’s start with a concept

It’s essential that your restaurant offers a unique experience. It could be a Wine Bar with small plates, or a BBQ theme or a Create Your Plate concept. Whatever you decide, it is critical that the environment and “vibe” within the restaurant places the guest firmly inside the experience you’re attempting to create. Don’t confuse the guest with a concept that’s disconnected. As I often remind my clients, “everything touches everything else.” For instance, you wouldn’t use elegant tableware in a fried chicken restaurant or disposable plates in an upscale steakhouse. As obvious as this may seem on the broader elements, it’s essential to take that idea to every detail of the restaurant concept, no matter how small. Everything from the paint color to the music to the tabletops to the wall hanging must work together. The decor elements, the menu, and the service level need to provide the guests with a seamless experience that, when done well, goes almost unnoticed because it’s natural and authentic.

If You Build It, Will They Come?

Building a clientele is never as easy as hanging a sign over the door. It takes smart planning, execution of marketing, and living up to the promise in your mission and brand position statement. You should never assume, “if you build it, they will come.” Questions to ask yourself are; how will my restaurant connect with people? Why does my restaurant exist? What type of people am I looking to attract? What do they read or watch? How do they spend their spare time? What is the best way to reach them? Your concept should appeal to a particular, selected audience. There is no such thing as “everyone is my customer.” Knowing why and for whom your restaurant exists is crucial to success. Your marketing plan should offer compelling reasons why that guest base should frequent your establishment regularly. Is the concept created for health-conscious people? Is it aimed at Millennials or Baby Boomers? It is a full menu or dessert brand or a convenient, fast food, value-based concept. Your social media, print ads, and community outreach should focus on one single audience with one single message. Once you’ve built a loyal base of customers and repeat business, then you should consider expanding your base by marketing to others in the area with a proposition that appeals to them.

Your People Plan is Key

A great team will help you win everyday. Hiring great people is the first step in delivering service excellence and a consistent product to your guests. Your mission statement “the why” along with a corporate culture that emphasizes respect for employees, commitment to your guests, service to the community, and concern for the environment will guide you when selecting your staff. It’s not enough to hire people with restaurant experience; they should also understand and be excited about the mission of the restaurant. If not, they will go through the motions with an inauthentic approach and often fail at exceeding guest expectations. Examine your corporate core values and hire people that match it. Next, supply your staff with comprehensive, ongoing training and the proper tools so can they carry out the day to day tasks flawlessly. Hire for qualities, train for skills.

The Market and Competition

Understanding the market area where you’d like to open your restaurant is a crucial element to the plan. Carefully research the demographics to ensure there are enough people in the area that match whom you believe will embrace your concept. When looking for your location, work with an experienced commercial broker that can supply you with data to help you choose the area and the site correctly.

A full competitive analysis is also essential. For example, check the pricing of your competition. Be sure you’re not over or underpriced for the market. Check other services they offer, such as delivery and online ordering. Spend time in the market area, dine several times at as many competitors as possible, and position your restaurant to address the missing needs in the market. Having a unique value and selling proposition will keep you ahead of the game. Remember, everyone is vying for the same consumer dollars, so you need to create points of differentiation that will help your establishment stand out from the competition.

Consistently Great Food

Your menu must not only be relevant to the concept and the market but should be prepared and served perfectly every time. Restaurant guests expect dishes they grown to love to have the same flavor and high quality each time they visit. Inconsistent products can lead to disappointed guests, bad reviews, and slumping business. Your menu should be not only delicious but also simple to execute. The more straightforward the menu, the less chance of mistakes in preparation. Consistency increases guest satisfaction. Some chefs and “foodies” create menu items that are too complicated and require a highly skilled professional in the kitchen. This approach is fine if you intend to open a high-end restaurant staffed with high price personnel, but not in a fast-casual or family restaurant setting. A winning menu is simple, fresh, relevant, and great tasting. A competent chef can assist in developing dishes that are unique and great tasting that are also simple to produce with less skilled labor. If you have aspirations of owning more than one location, then simple execution, and consistent products are a must to achieve the goal of operating multiple restaurants.

Cash Is King

There are many reasons why restaurants fold. It could be the wrong concept, poor choice of location, not correctly researching the competition, poor service, an uninspiring menu, or bad food, to name a few. That said, the negative impact of undercapitalization may be the most frequent cause of restaurant failures. Knowing how much money you need to launch the restaurant is only the tip of the iceberg. You must assess ongoing cash needs while the restaurant is newly opened and gaining momentum. It may take many months for a restaurant to break even and then eventually become profitable. Being able to support the financial needs during this phase is often the “make or break” challenge that many new restaurateurs cannot overcome. A well thought out projection model that you create with the help of a professional financial advisor can save you from the frustration, negative financial impact and heartbreak of a failed restaurant. Considering capital needs for the first twelve to fifteen months is not only prudent but essential to the success of any new restaurant. You must be prepared to cover the operational costs and expenses as the restaurant “ramps up.” Carefully consider your cash needs and how much working capital you must have on hand, ready to deploy.

Have A Plan And Follow Your Dream

Owning a restaurant can be personally rewarding and profitable. Many people have built great restaurant companies following these simple guidelines. Desire and passion will only get you so far. Create your business plan as a road map. Your plan will help you stay on track when dealing with the many moving parts of launching and successfully operating a new restaurant.
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About the author:
Gary Occhiogrosso is the Founder of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm. 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 its founders. He is the former President of TRUFOODS, LLC a 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 on the topics of Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales and Marketing. He was also the host of the “Small Business & Franchise Show” broadcast in New York City and the founder of FranchiseMoneyMaker.com

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LEARN MORE ABOUT STARTING YOUR RESTAURANT: www.frangrow.com www.frangrow.com

Five Skills for Successfully Turning Ideas Into Reality

Posted on October 20, 2021October 20, 2021 by Franchise Strategist

5 skills for successfully turning ideas into reality

(BPT) – People across the world have tackled immense challenges since the start of the global COVID-19 pandemic, from social isolation to financial burdens, in a distanced and digitally enabled world. As a result, many important projects were put on hold. But at the same time, many people took the opportunity to make bigger and better plans — and are ready to make these dreams a reality.

In a recent global survey conducted by Project Management Institute (PMI), nearly four in five consumers (79%) said they consider 2021 to be a “do-over,” and an even greater number, 86%, plan to work harder this year to bring their ideas to life.

“The pandemic disrupted countless 2020 plans, but many leaders and innovative thinkers used the time wisely to map out their next moves,” says Mike DePrisco, chief operating officer for PMI. “As more communities and organizations across the globe cautiously turn to recovery and revival, teams are increasingly focused on turning their stalled projects into reality.”

But turning ideas into reality doesn’t come easy. Whether you’re looking to level up in your career, kick-start a new project or create a completely new business, PMI outlines the power skills you need to continue advancing:

1. Communication

Effective communication maximizes success and minimizes risk. It involves not only conducting outward-bound communication, but also listening, taking feedback, understanding nonverbal cues, and interpreting what is meant versus what is said. In a team setting, communication helps team members stay on the same page as they work toward success.

2. Empathy

Empathy allows team members to build greater trust and connections — with each other and with other stakeholders — by helping them understand the wide range of people and work styles they encounter. Empathy also strengthens teams by helping team members feel appreciated and heard.

3. Collaborative leadership

A collaborative leadership style is more effective in inspiring and bringing team members together in pursuit of a shared vision and common goals. Collaborative leaders recognize that each member of the team has something to contribute — in executing a plan and in helping shape objectives.

4. Innovative mindset

An innovative mindset ensures teams are applying new ideas and fresh perspectives to how they organize work and address the myriad obstacles that emerge when turning ideas into reality. An innovative mindset also allows teams to remain agile and pivot more quickly in the face of challenges.

5. Purpose-driven goals

Having a for-purpose orientation helps minimize risks and ensures the organization’s values and commitment to social good are infused in all aspects of project design and implementation. Clear goals also empower changemakers to use their skills to bring about positive social change within teams, companies and communities.

To learn more about these skills and effective project management, visit PMI .org/Make Reality, a virtual hub of inspiration with the tools you need to get started on your next big, bold idea. Find support and inspiration from changemakers across the globe turning their ideas into reality; determine your changemaker persona; and view PMI courses that help you take your project or idea and Make Reality, such as KICKOFF, a free, 45-minute digital course and toolkit that guides learners through the basics of project management with bite-sized content and downloadable templates they can quickly implement on the job.

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Learn more about turning your idea into a nationwide franchise click here: www.franchisegrtowthsolutions.com

JACK IN THE BOX, RELAUNCHING ITS FRANCHISING EFFORT

Posted on October 19, 2021October 20, 2021 by Franchise Strategist

JACK IN THE BOX, RELAUNCHING ITS FRANCHISING EFFORT
By Gary Occhiogrosso – Founder and Managing Partner – Franchise Growth Solutions

Today I have the pleasure of sharing insights from, Darin Harris the CEO of Jack in the Box. Founded by Robert Peterson in 1951, Jack in the Box is one of the earliest fast-food restaurants. Innovative for its time, the Jack in the Box brand was built with the “drive-thru” in mind. The brand was the first to use a two-way speaker system for its drive-thru ordering. Today the brand continues to evolve as it relaunches its franchising effort to expand into new markets and capitalize on its 70-year history and resilience.

Although today, Jack in the Box operates just over 2,200 locations, there were not many in the New York area when I growing up. However, we were fortunate to have a local Jack in the Box in Flushing, Queens. The iconic brand was a staple in my teenage years. It was very routine to stop in for some tacos and burgers with my buddies after a late night out. I recall Jack in the Box had a unique drive-thru ordering kiosk. It was actually “Jack” popping out of the box, ready to take my order. I remember the clown-faced “Jack” staring at me as my friends and I placed our orders, certainly a challenge if you suffer from Coulrophobia, the fear of clowns.

With prior franchisee disputes settled, Darin Harris, CEO of Jack in Box, reveals the issues and challenges in relaunching the franchising effort. From gaining trust with the existing franchise community to focusing on unit-level economics to a new prototype restaurant, the brand is poised for a franchising reemergence.

Gary Occhiogrosso: You took the reins of Jack in the Box at the onset of the pandemic in April 2020; what drew you to the brand, and what was your initial vision for growth?

Darin Harris: Prior to Jack in the Box, I was CEO of IWG Regus; however, most of my career was spent in the restaurant industry, building brands through franchising, operations, and more. I always noted the potential that Jack in the Box had, and I’m proud of the strides we’ve been able to take so far.

We’re looking to build what I call “Jack’s House,” which starts with our foundation focused on culture, people, innovation, and technology. We really want to shape a caring high-performance culture by serving our people, guests, and franchisees well. We also want to build brand loyalty, drive operational excellence, grow restaurant profits and expand our reach. To do that, we needed to evolve our leadership team. We’ve hired a new CFO, CMO, COO, CPO, and a Chief of Franchise and Corporate Development to help take Jack in the Box to the next level. Additionally, we’ve focused on repairing the franchisor/franchisee relationship and announced the relaunch of our franchise development program earlier this year after a decade of hiatus. All of this creates a blueprint for Jack in the Box’s future, which aims to help grow total revenue, optimize return on invested capital, increase EBITDA, and create long-term shareholder returns.

Occhiogrosso: What were some of the obstacles you faced upon becoming the CEO? How did you prioritize initiatives when taking the helm during such a challenging time for the foodservice industry?

Harris: First and foremost, we needed to rebuild trust with our franchisees. We looked to re-energize our franchisees and develop meaningful relationships with each of them. Our franchisees are our family, and we needed to ensure they felt that way. After speaking with our franchise system and rebuilding the executive team, we looked to relaunch our franchise development program. Current and prospective franchisees have the opportunity to franchise and grow with Jack in the Box following the relaunch of the franchising program. We’re thrilled at the initial response as 2/3rds of our current franchisee network have expressed interest in growing. Prospective franchisees are very interested, as well.

We also needed to focus on unit-level economics, building a development strategy, digital strategy, and refreshing our guest research to ensure we’re meeting guests’ needs. Our four-pillar strategy will help guide us through the execution of each initiative. These include building brand loyalty, driving operational excellence, growing restaurant profits, and expanding our reach as a whole. These driving factors, coupled with the talented leadership team we’ve been able to build over the past several months, have aided my ability to lead every step of the way.

Amid the pandemic, we made a lot of the right decisions to ensure we were meeting our guests where they wanted to be met. Our model has proven to help us through the pandemic, and we’re fortunate that our drive-thru and third-party delivery strategy was executed well to help build sales at our locations. The first year at Jack in the Box has been exciting, and I’ve never had more fun in my career. Our restaurants are successful, and I love the people and personality behind Jack in the Box.

Occhiogrosso: Why was strengthening the franchisee/franchisor relationship important to you from the start? How did you go about doing this?

Harris: I’ve always viewed a company’s franchisees as its partners in strategy, and from the beginning, I knew we needed to re-energize that relationship at Jack in the Box. We cannot succeed unless our franchisees succeed, so it was important to get to know our franchisees and develop those meaningful relationships from day one. Once I accepted the position, I immediately started contacting our franchisees and spoke with about 25 of them. I wanted to hear the challenges they’ve had in the past and how they felt like we could improve, but most importantly, get to know them personally and learn about their families.

At Jack in the Box, we want to constantly strive to ensure our franchisees are equipped with the resources necessary to drive meaningful growth. The franchisee/franchisor relationship has significantly improved, so much so that 66% of our current franchisee network have expressed interest in growing. We’re really excited about the progress we’ve made and look forward to working with our franchisees as we grow in current and new markets.

Occhiogrosso: After Jack’s decade long hiatus from franchising, what motivated you to relaunch the franchise development program?

Harris: Over the past 18 months, we’ve proven that we are pandemic-resistant, and we’re eager to grow with our current franchisee network, as well as prospective owners. In fact, our existing franchisees had been wanting to expand for years, but the timing wasn’t right for corporate. While we currently rank first or second in unit count within our competitive set for 8 of our top 10 existing markets, we know there is a tremendous amount of whitespace to grow in existing and new markets.

The decision to relaunch our franchise development program began with reenergizing our franchisees and building those relationships, as I mentioned earlier. We believe there’s potential for another 1,500 restaurants in our existing footprint alone and 29 states remain untapped. The growth opportunity for Jack is enormous, and to grow, we need to work with our franchisees.

Occhiogrosso: While Jack in the Box is a longstanding brand in the QSR space, the competition in its sector continues to grow. How has the brand managed to report record-breaking sales the past few quarters?

Harris: It’s been an exciting time at Jack in the Box. Our guests are making more premium item purchases, and that helped increase system same-store sales 10.2% in Q3 2021. Franchise same-store sales grew 10.3% in Q3, with a balanced contribution from both average check and transactions. We’ve made the right pivots amid the pandemic and leaned into off-premise and menu innovation to help drive sales, which led to a historic start in 2021. Consumers are also using our mobile app more than ever, with our customer database growing by nearly 60% the since the start of the pandemic. We also launched our first loyalty program recently that consumer have been responding well to.

Another area of focus for us has been driving incremental sales with menu items like Tiny Tacos and our chicken sandwiches and chicken strips, which has helped raise system-wide sales and AUVs.

As we shift toward core premium entrees, we are observing an increase in items per order reflecting larger parties and fueling an increase in the average check. Our quarter over quarter growth has been remarkable to watch, and it’s a privilege to be part of the success. We look forward to building upon this momentum.

Occhiogrosso: Jack in the Box recently rolled out a new low-cost and drive-thru only prototype. How do you and your team plan to implement this new prototype into the development strategy? How does it play into the trends we are currently seeing in QSR dining?

Harris: Jack in the Box was the first major fast-food chain to develop and expand the drive-thru concept, so it’s in our DNA to grow utilizing the drive-thru. Our new prototype is off-premise only, featuring a lane for drive-thru and a lane for online pick-up and third-party delivery. With our drive-thru sales skyrocketing amid the pandemic, and restrictions lifting nationwide, the new prototype aligns with evolving consumer preferences. We believe that as we continue to progress out of the pandemic, off-premise will remain a preferred method of consumption for many of our guests, and we want to ensure we are meeting and exceeding their expectations.

Occhiogrosso: In what ways do you believe the new prototype will accelerate Jack in the Box’s growth?

Harris: The new off-premise prototype is targeting a reduction of development costs by approximately 20%. The first two prototype locations are slated to open in fiscal year 2022. Understanding that consumer trends and demand are evolving, we needed to build a prototype that makes it easier for our guests to access the brand. Off-premise is going to remain a preferred method of consumption for many guests, and this prototype fits their expectations. Additionally, 95% of our stores have at least one of the four major delivery providers (DoorDash, GrubHub, Postmates, Uber Eats), with 80% of them using at least three of the four. With the introduction of our new prototype, we’re committed to a strategy focused on driving delivery and off-premise sales while making our brand more easily accessible to our guests.

We’re excited about this prototype and development in general. In 2020, we opened 27 restaurants—the most in the past 20 years. We’re also looking at the possibility of non-traditional restaurants and signed a deal with Reef Kitchens to open eight dark kitchens. We’re focused on reaching a 4% annual restaurant growth by 2025. The future at Jack in the Box is extremely bright, and we’re thrilled to ramp up development.

My take-away from this interview is simple; the restaurant industry must continue to innovate to meet the ever-changing consumer trends due to a range of issues, from Covid to work habits to generational lifestyles. Darin Harris and the Jack in Box brand continue to be innovative in the Quick Service Restaurant segment.
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About Darin Harris. He began his role as Chief Executive Officer in June 2020. He was previously CEO of North America for flexible working company, IWG PLC, Regus, North America, from April 2018 to May 2020. Most notably, Harris is the former Chief Executive Officer of CiCi’s Enterprises from August 2013 to January 2018. For just under five years, Harris also served as Chief Operating Officer for Primrose Schools from October 2008 to July 2013. He previously held franchise leadership roles as Senior Vice President at Arby’s Restaurant Group, Inc, from June 2005 to October 2008 and Vice President, Franchise and Corporate Development at Captain D’s Seafood, Inc., from May 2000 to January 2004. He was also a prior franchise operator of multiple Papa John’s Pizza and Qdoba Mexican Grill restaurants from November 2002 to June 2005. Harris has more than 25 years of leadership experience in the restaurant industry encompassing operations, franchising, brand strategy and restaurant development.