He explained that through his experience and the help of a little sonar gadget on his boat, that he knew there was a shoal of fish below. We all slung our rods over the side and dropped our lines.
Fishing for Leads – The 5 Steps By: Peter Lawless
The first thing that I noticed when I got onto the small boat at the harbour in Enniscrone, Co. Sligo, was the cleanliness and order of the boat. The skipper in charge had all of the rods, upright, with their lines neatly tucked away, in holders. The holders were made out of piping, about 30cm long, which had been welded to the side of the boat.
A simple, inexpensive aid had made me sit up and pay attention. This skipper thought about his customers, and this device left a strong impression. We then got a very short lecture on safety, checked we had our life jackets on, and off we went. About 12 of us!
Finding your target market
About 12 minutes later, the skipper stopped the boat, and told us we should find some mackerel here. He explained that the lures on the hooks looked just like what mackerel wanted to eat. It certainly was not something I would have fancied!
He explained that through his experience and the help of a little sonar gadget on his boat, that he knew there was a shoal of fish below. We all slung our rods over the side and dropped our lines.
Reeling in the sale
Now I don’t know about you, but this was totally new to me. I wound up the line frantically, as soon as I felt a tug, and hey presto, there were three fish dangling off the hooks. I started flailing about, one jumped off before I even got it in over the side, and when I was trying to reel it in the final bit I lost an other one. The one that I got in, I lost down the gutter when I finally got it off the hook.
The skipper explained to me, that once a fish took the bait, I should give a quick tug on the rod, to make sure it was firmly hooked. I should then take my time, to reel it in. Secure the rod in the holder, with the fish hanging over the bucket and deal with them one by one – I did, and I ended up with 20 fish, which delighted me, as I had set a target of 10, since my friend had caught 9 on his first time
So what are the lessons for marketing – if you are still with me, and have not already got most of them, here they are in business speak;
1. Set goals and targets that are realistic, and based on some valid foundation or research.
2. Have simple procedures set up, to make it easy to operate and for your customers to conduct business with you.
3. Speak in your prospects language, about what they want – it’s a bit like the fish bait, unlikely that strawberries and cream will catch many mackerel!
4. Once you know what your prospects like, find out where they are, do some research and target them accordingly – as in our example, not much point in putting down shark bait in a shoal of mackerel.
5. Once you get your customers attention, or have a lead, qualify it, and ensure you follow up at all time to close the sale. Again the use of a good sales process is essential here.
The bottom line, if you know what problems or desires your customers have, and you can solve or fulfill these, while providing value for money, you will always be a winner.
And if you don’t know the answer to that question, go ask the people who have already bought from you – they do!
Author Bio
Business Owners who need more sales and better marketing advice, turn to Peter Lawless, of 3R Sales & Marketing. For previous articles and interviews like this, visit our website and subscribe to Success. We also provide free Sales & Marketing Assessments for Business Owners with an Irish Connection.
Typical separate performance obligations for a franchisor include site selection, training and equipment necessary to operate the franchise The remaining portion of the franchise fee must be deferred and amortized over the life of the franchise agreement .For nonpublic companies(most franchisers) this new rule is effective with the year ending December 31,2019.
The New Revenue Recognition rules-What is the Impact for Franchisors
By Barry Knepper – The Franchise CPA
The Financial Standard Board(“FASB”), the rules setting body for the accounting industry, has issued a new comprehensive revenue recognition model for all contracts. Franchise agreements are directly impacted by this new rule.
New Rule
This new rule requires that each contract be analyzed to identity the separate performance obligations that the franchiser has assumed as part of the franchise agreement and then allocate a portion of the franchise fee to each obligation .Typical separate performance obligations for a franchisor include site selection, training and equipment necessary to operate the franchise The remaining portion of the franchise fee must be deferred and amortized over the life of the franchise agreement .For nonpublic companies(most franchisers) this new rule is effective with the year ending December 31,2019.
Why this change matters to you:
It requires restatement of prior years financial statements issued or a cumulative catchup including analysis of every franchise agreement in place as of December 31,2019
Your financial statement will likely show greater liabilities and less equity-particularly in smaller companies -thus weakening your financial position.
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There is an increased likelihood of state-imposed restrictions on use of franchise fees
There is the potential to scare off prospects based upon the weakening of franchisor’s financial position due to deferral of recognition of franchise fees.
Taxes are due on fees received but not recognized in financial statements
It is important that you begin the analysis process now so that it does not hold up the completion of your audit. We are available to help you implement this new rule.
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ABOUT THE FRANCHISE CPA
The Franchise CPA’s CEO, Barry Knepper, CPA, has had a 40-year career as a senior financial executive including the international public accounting firm, Ernst and Young. While serving as CFO of a $100 million company he managed its initial public offering (“IPO”) and raised a total of more than $100 million of equity and debt financing for expansion. Barry is a member of the Board of Directors and chairman of the audit committee of Coffee Holding Company, a publicly traded integrated wholesale coffee roaster and distributor.
At The Franchise CPA we are dedicated to the accounting needs of franchisers of any size and industry, providing financial statement audits, royalty audits and part time CFO services.
Our success and client satisfaction is due to the specialized service we provide to clients. Our fee structure is lower than others because we keep overhead to a minimum and focus on franchising.
We have a unique combination of real-world franchise experience. Our team has served as the full time CFO of multi concept franchisee and as a part time CFO for diverse concepts. We have performed financial statement and royalty audits for more than 80 franchisers. Having experience as a franchisee as well, we understand the sensitive nature of the franchisor/franchisee relationship and work hard to preserve that relationship.
Through our part-time CFO services we meet the needs of franchisers that do not need or cannot afford a full-time controller or CFO. As your part time CFO, we will assist you in improving your financial performance, maximizing cash flow and building long-term value.
Although the liability potential is very real, if approached properly there are methods for mitigating licensing liability and for converting your license system to a franchise. It may take some time but it is definitely achievable. Also, an honest and direct approach with state franchise regulators will prove beneficial in the long run. Convert Your License System to a Franchise System
By Charles N. Internicola, Esq.
Legal Counsel and Franchise Consulting
If your business has established a network of licensees who signed license agreements and who are selling products or services under your trademark or brand then chances are you have given some thought to franchising, whether or not your license system may really be a franchise and whether or not, legally, you need to convert your license system to a franchise system. This issue comes up often and, for a number of reasons, many successful and very well intentioned entrepreneurs (including those who followed and relied on the advice of their legal counsel) have found themselves exposed to franchise liability through the license agreements and license structure that they previously adopted.
If this is your situation then the next step is to evaluate your potential franchise liability, determine whether or not your license is or may be claimed to be a franchise and to then determine the right path forward in protecting your business, maintaining an avenue for continued growth and potentially converting your licensing system to a franchise. The good news is that this issue comes up often and, if approached correctly, is completely manageable and bin the long run can be extremely beneficial for your business.
How the Problem Typically Arises: “It Just Made Sense to Start off as a License”
For many unsuspecting entrepreneurs and their lawyers, licensing is a natural outgrowth of a successful business. You establish a profitable business, your have a great brand, products and services and people take notice. You want to expand and so you start by granting simple license agreements. Your licensees buy products or services from you, they expand your business by establishing new operating units, locations or dealerships using your brand and everything seems to work well. The reason you may have utilized a licensing model was because it just made sense and was a workable system as you grew. Another reason may be that you adopted a licensing structure legal advice or a mistaken belief that you could somehow could adopt licensing as an alternative to franchising.
Is Your License System Really a Franchise?
Chances are that it is. The reason why is because within every franchise is a license where the franchisor “licenses” to its franchisees the right for the franchisees to utilize the franchisor’s trademarks and brand. When evaluating whether or not a legal relationship transcends the line from simple license to regulated franchise, state regulators ignore terms and terminology like “license”, “licensee” and “licensor” and look to the substance of the relationship and whether or not: a license has been issued for use of the trademark licensee is operating an outlet or location in accordance with the licensor’s standards and specifications, and; whether or not there is payment of a fee. Much more often than not state regulators will find that claimed license relationships are really disguised franchise relationships and are subject to franchise regulation.
GET THE GUIDE: For complete detail about whether or not your license system is really a franchise and the tools and information that you can use in making this evaluation, download a fee copy of our extremely helpful guide Licensing verses Franchising.
When Does this Licensing verses Franchising Issue Typically Arise?
Consider than many improperly structured license systems (i.e., where the license system is really a franchise) operate without an issue ever being raised. That is, licensees are satisfied and there are no legal disputes, licensees do not complain to a state regulator and the state regulators themselves don’t contact you. Even if this is the case, the problem is that you may very well be exposed to future liability and your licensee issue may be a “ticking time bomb” only to rise up later on as your system gets larger and larger or during third-party due diligence during an acquisition. Typically this issue arises where:
Dispute with a Licensee – You have a dispute with a licensee and during the course of the dispute the licensee consults with a lawyer and the lawyer claims that your entire license agreement is an unauthorized franchise and that the licensee has been harmed because you did not properly disclose him or her with a Franchise Disclosure Document. Basically, whether you have been right or wrong, the licensee and his or her attorney use this as leverage over you.
Licensee or a Competitor Files a Complaint with a State Regulator – If or your licensee is located in a franchise registration state or a state that actively regulates franchising, if a licensee or, even, a competitor, files a complaint with the state regulator they could trigger an investigation. That is, the state regulator will make inquiries about your license agreements and may determine that your license agreements constitute franchises and that you have violated the state franchise laws.
Due Diligence During an Acquisition – A third party is interested in buying your business and during the pre-acquisition due diligence process the potential acquiring company and their lawyers raise an issue about your license system and whether or not your license agreements are even enforceable.
What’s the Potential Legal Exposure?
If you sell licenses that turn out to have met the criteria of a franchise then you will have violated the franchise laws. The violation is an extremely technical one (i.e., your license is really a franchise, you did not satisfy franchise disclosures mandated by the franchise laws and therefore you have sold illegal franchises) that creates substantive legal and business issues. Basically, your license agreements become unenforceable by you but your licensees may nevertheless enforce the license agreement plus other rights that will be afforded to them under the franchise laws. Your licensees will be afforded the opportunity to rescind their license agreements and seek damages, including reimbursement for their business expenditures.
Although the liability potential is very real, if approached properly there are methods for mitigating licensing liability and for converting your license system to a franchise. It may take some time but it is definitely achievable. Also, an honest and direct approach with state franchise regulators will prove beneficial in the long run.
What Are The Next Steps
The next step or steps has more to do with your business and the facts surrounding your licensing system. Before jumping any gun, the first step is to evaluate your existing license agreement and licensing structure to determine if your license system has even transcended the line into franchising territory. If it has, then the next steps will involve an assessment of your current licensee relationships, whether or not you are involved in litigation or threatened litigation with a licensee and whether or not you have been contacted by a state regulator inquiring about your licenses.
Are You Being Proactive? – If things are going well and there are no current legal issues (i.e., licensees are not threatening you and you have not received a regulatory notice from a state claiming that you are illegally selling franchises) then the next step is to evaluate your license system, whether or not your license is really a franchise and, if it is a franchise, to implement an effective plan to convert your license system to a franchise system.
Has There Been a Legal Threat? – If a licensee has threatened you or a state regulator has sent you a notice claiming that you are selling illegal franchises then your next steps needs to be accelerated with a focus on mitigating potential licensee claims and addressing state regulators.
The positive news is that if you are dealing with a licensing problem, there are extremely realistic and achievable goals that can be reached in successfully converting your license system to a franchise system and resolving regulatory issues involving claimed franchise violations. The solution may take some time but it is achievable.
Services for Converting Your License System to a Franchise
We have worked with many successful entrepreneurs who, like you, were faced with the need to evaluate their existing license system, convert their license system to a franchise, address licensee legal claims and resolve state regulatory claims.
Our Licensing Evaluation and Franchise Conversion Services
Evaluating and Assessing Existing License Agreements
We will evaluate your existing licensing structure, including your license agreements and other related agreements like licensee training agreements and other agreements involving the licensees sale of products and services. We will provide you with a confidential assessment regarding your licensing structure that will include, if available, recommended modifications to the licensing structure and recommendations for potential conversion to a franchise system. Our review will include evaluation of the applicable franchise laws and regulations in your state and the states where your licensees are located.
Litigation Defense and Responses to Regulators
If a dispute has arisen with a licensee claiming an illegal franchise or franchise violations, we offer litigation services focused on defending your systems against franchise violations. If you already have legal counsel we will work with them on an as needed basis. If you have received a notice from a state regulator either requesting information about your system or claiming that your license is an illegal franchise then on your behalf we will work with the state regulator in resolving the claim.
Convert Your License System to a Franchise System
We successfully convert license systems into franchise systems. Our services not only include a complete franchise development process but also includes a strategic plan that we implement to convert licensees to franchisees, achieve state franchise registrations (even in states that claim you illegally sold franchises) and resolve state regulator claims through negotiated agreements that are commonly referred to “Assurances of Discontinuance”.
Our franchise conversion services are focused on preserving and protecting the existing business and network that you have already built and laying the foundation for continued expansion and growth.
About The Internicola Law Firm, P.C.
The Internicola Law Firm, P.C., helps emerging brands get the legal support they need, resources for growth, and strategies to win at franchising.
At The Internicola Law Firm, P.C., we believe all emerging brands can win big at franchising.
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About the Author: Charles Internicola – National Business and Franchise Lawyer
The Internicola Law Firm, P.C.
New York, New Jersey and Nationwide Representation
(718) 979-8688
The managing partner and founder of The Internicola Law Firm, PC, Charles is a seasoned business attorney who has worked with and guided his clients at every stage of the business development cycle from start-up, regional expansion, franchised expansion, mergers and acquisitions, intellectual property protection and high-stakes litigation. Charles serves as outside and general counsel to a number of franchise, manufacturing and service based businesses throughout the nation where Charles and his team coordinate, monitor and manage all aspects of his clients’ legal matters, regulatory obligations and legal programs for the expansion and protection of their businesses.
As a small business owner, time and cost savings are precious. Make sure you know what tools your business needs to function smoothly, and choose the most efficient, cost-effective equipment to meet those needs. Whether it’s a good phone system, up-to-date computers or a shredder to safely dispose of sensitive documents, your business is only as good as the equipment you rely on.
4 key resources small businesses need to succeed
(BPT) – SPONSORED
From small home offices to co-working spaces to hotels and airplanes — as a small business owner, you’ve likely learned that being flexible with your work environment is critical to establishing and growing your business. No matter the spaces you travel to and run your business from, there are a few important resources to have in place to ensure that your operations are productive, efficient and a step ahead of your customer’s needs.
Office-quality equipment at consumer prices
As a small business owner, time and cost savings are precious. Make sure you know what tools your business needs to function smoothly, and choose the most efficient, cost-effective equipment to meet those needs. Whether it’s a good phone system, up-to-date computers or a shredder to safely dispose of sensitive documents, your business is only as good as the equipment you rely on. For example, a great product to invest in is a high-quality, reliable cartridge-free printer, like the Epson® EcoTank® Monochrome Supertank printer. Print more and worry less with a printer that comes with an easy-to-fill supersized ink tank that holds enough ink to print up to 6,000 pages and has a fast first page out time. Available in-store at Office Depot and OfficeMax, the Epson EcoTank wireless SuperTank printers also allow you to use voice-activated printing via Amazon Alexa, Google Assistant and Siri, giving you the convenience to focus on what’s most important for your business.
Professional IT support
Build a tech support team that keeps your business running no matter where you are. You likely don’t have the time to run your business and be your own IT support help desk. With help from a 24/7 remote tech support team from Workonomy™ at Office Depot, you can have access anytime and anywhere to a dedicated experienced tech support team by chat or phone. There’s never a good time for computer problems, but with a reliable 24/7 tech support team that helps with everything from data recovery to virus scans, you can have confidence that your tech will be running smoothly and optimize your business for efficiency.
A method and a space for resetting
Just because you can bring the office with you wherever you go doesn’t mean you should. Make time to leave it all behind. Create a toolbox of activities that help you reset, relax and rejuvenate your thoughts so you can bring fresh ideas to your business. From a brisk walk or a podcast episode to a phone call with a friend, choose one or two activities that you can quickly call upon each day to reset your mind and passion.
A workplace that’s as flexible as you are
Whether you are traveling, meeting a new client, need some help with your laptop or just want a small space to call your own, a great resource to have on hand is a co-working space. Office Depot’s Workonomy™ Hub co-working service provides support and assistance to home-based and small businesses in select locations. From private offices and conference rooms to daily drop-in, there’s a space and a plan that fits your work style. You can also take advantage of services including tech support, storage, packing and shipping, and more. Check out the available services and locations near you at officedepot.com.
Being a business owner requires you to wear a lot of hats and sometimes work in unique and on-the-go places. Your environment doesn’t have to impact the output of your business. With the right equipment and tech support, outlet to relax, and a flexible co-working space, you can set your business up to run efficiently and give yourself more time to do what you’re most passionate about. Sponsored by Office Depot.
This post is to simply inform and alert any franchise CMO who inherits one of these troubling vendor relationships. If you don’t own control of your online assets, you’re going to have unfriendly challenges ahead of you. We’re currently on boarding several clients that are experiencing these challenges. Here are a few results that we’re seeing with brands that are transitioning from this arrangement.
The franchising community is complicated. With thousands of franchisees operating under thousands of corporate brands, breakdowns in communication are inevitable. As partners of these brands and franchisees, the franchise marketing community should be working to build trust and stability throughout the franchising network, not actively adding to the confusion.
Unfortunately, many franchise marketing vendors are misleading the franchising community. As some vendors put franchise websites on custom content management systems, they’re neglecting to tell these brands the consequences of this arrangement. Mainly, that franchise brands are unknowingly relinquishing ownership of their site and other web assets.
This arrangement might not seem like a big deal at the outset of an engagement. But when these brands decide to change course, it’s the brands that are left with the complicated transition — a transition that threatens long-term damage to not only their online presence, but the brand itself.
This post is to simply inform and alert any franchise CMO who inherits one of these troubling vendor relationships. If you don’t own control of your online assets, you’re going to have unfriendly challenges ahead of you. We’re currently on boarding several clients that are experiencing these challenges. Here are a few results that we’re seeing with brands that are transitioning from this arrangement.
* It’s your logo. They’re your words. But they aren’t your pages. Your site pages are being hosted and managed by a third-party business.
* When transitioning off the vendor-owned pages, if you don’t own your content (images, videos, etc.), you will be starting from scratch.
* Some vendors are including proprietary tracking code within your site structure. If not identified properly, this can cause significant issues during site transition.
* If you’re using a subdomain hosted on a separate IP address, you will not get the same SEO benefit, and will need to spend time pointing links to new subdirectory location pages.
* Lack of custom Content Management System (CMS) build out.
* Limitations with Conversion Rate Optimization (CRO) strategies.
Whether these imbalanced vendor-client relationships stem from a genuine misunderstanding or an unethical approach, it’s imperative that all franchise brands are aware of the potential pitfalls of the arrangement. I’d love to continue the discussion.
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ABOUT THE AUTHOR – Andrew Beckman
As Chairman of Location3, Andrew Beckman oversees strategic direction and business development initiatives in conjunction with the agency’s Executive Board. Andrew founded Location3 Media in 1999 as a direct response digital partner with a portfolio of services that included PPC management, SEO, local search marketing, display marketing, social media marketing, content strategy, website design & development, web analytics management and more. Since 1999, Location3 has evolved into a full service digital marketing agency that delivers enterprise-level strategy with local market activation.
Prior to founding Location3, Andrew was an international sales manager for DoubleClick, Inc. where he was charged with opening new sales offices, as well as training teams on U.S. search marketing strategies for the original AltaVista Search Engine. Andrew is an expert in local search marketing strategy and is a frequent presenter at industry conferences including SES, SMX, StreetFight Summit, ClickZ Live, PubCon, BIA Kelsey and more. Follow him on Twitter. ——————————————-
ABOUT LOCATION3
Location3 is a digital marketing agency that delivers enterprise-level strategy with local market activation.
As the premier digital marketing partner for franchise brands and multi-location businesses, we operate under the belief that Everything Is Local. That means using our digital expertise and proprietary technology to connect businesses with the customers who are searching for their solutions.
Often, leaders at small businesses with few employees feel protected from or less susceptible to fraud or unethical conduct because of the close-knit nature of their teams. But research shows unethical behavior is more widespread than they realize, and not confined to one type of business.
Small business: How ethics can help your bottom line
(BPT) – The last thing any company wants is a misstep that hurts the trust it has built with customers. This is especially true for smaller businesses, which may not have the resources to recover from a reputation setback. To prevent mistakes, bad decisions and wrongdoing, smaller businesses can take a proactive approach to developing ethical business leaders and business cultures. Experts say when businesses do that they can achieve benefits for their bottom line, their employees and the common good.
It can happen anywhere
Often, leaders at small businesses with few employees feel protected from or less susceptible to fraud or unethical conduct because of the close-knit nature of their teams. But research shows unethical behavior is more widespread than they realize, and not confined to one type of business. According to a 2017 Ethics and Compliance Initiative survey, nearly 47% of U.S. employees at companies of all sizes said they personally observed workplace conduct that “either violated organizational standards or the law.”
A 2018 Better Business Bureau survey found that 84% of consumers trust small businesses the most. That’s important for business owners to recognize, because the more trust a consumer puts in your company, the greater the ramifications when that trust is broken. This means business leaders have every incentive to develop strong ethical standards and cultures.
Empowering businesses
One university is looking to empower smaller businesses through a new open-access website. The University of St. Thomas recently launched the Business Ethics Resource Center (BERC), with U.S. Bank as the founding sponsor. The BERC is part of the university’s Center for Ethics in Practice in the Opus College of Business and provides resources for small and midsized businesses, focusing on ways they can develop ethical leaders and cultures.
Resources include videos, articles, toolkits, example plans and other multimedia assets that can help companies promote ethical conduct as part of their core mission. The BERC is designed to help time-strapped business leaders develop and sustain a strong ethical culture within their organizations and realize the inherent benefits that come along with that.
The benefits of ethics
While it’s difficult to determine the true cost of developing an ethical culture within your organization, it’s clear there are several tangible benefits. For starters, practicing ethics can help you avoid costly legal issues while enhancing your company’s reputation. It will also help you build customer loyalty, with 80% of customers saying they are more loyal to a company with good ethics, according to a recent survey from Salesforce. The same qualities that attract customers will also increase your ability to attract and retain outstanding employees. When you’re able to establish ethical standards as the foundation of your company values, you foster a more positive, meaningful work culture for your employees.
Promoting ethical conduct and compliance doesn’t have to be expensive. By utilizing the resources available and cementing strong ethical standards as a critical part of company values, businesses can establish an ethical company culture that benefits everyone involved.
Burger Village Is Going International!
24 Sep, 2019
We’ve been waiting for the right time to announce this, but we just simply can’t contain our excitement any longer. Burger Village is OFFICIALLY GOING INTERNATIONAL. That’s right, our new Canadian location will be opening soon, and our northern neighbours seem to be just as excited as we are. Our food is organic, all-natural, and provided by local farmer families that give our customers the quality & great tasting food that they’ve come to expect. There is a lot for Canadians to be happy about. From the Toronto Raptors winning the NBA Championship, having a thriving national infrastructure, to having some of the most beautiful and natural landscapes in the world. Now we are proud to say you can add Burger Village to that list!
Why Is Organic Such A Great Choice To Make?
If not just for yourself, choosing to eat organic foods is also a great way to help protect our environment. Our farmer families treat their animals with love and dignity. Those farmer families then provide those animal products to our locations and give our customers some of the freshest tasting food they’ve ever had. Burger Village is slowly but surely continuing to grow our brand and provide our customers with more of the great food they’ve come to expect from us.
Our customers love our food because they know what they’re eating is REALLY GOOD and made with REAL & CLEAN INGREDIENTS. Everything we make is:
We take pride in the fact that every animal product we use is obtained in a natural & humane way. This ultimately results in our customers enjoying food that is much more delectable, nutritious, and ecological than most other restaurants. This practice also helps to promote & support our farmer families who are ultimately the backbone behind our success.
What Separates Us From The Rest? We Just Care More!
Our newest Burger Village location here in Canada will be an eco-friendly establishment. It will also be constructed using reclaimed wood and biodegradable materials. Did we also mention that our beer selection will come from LOCAL BREWERIES? We also pride ourselves on having gluten-free options and being a peanut-free establishment that is inclusive to all of our customers. Burger Village is a healthier alternative to most similar restaurants because we care more about our customers and the quality of the food that we sell those customers.
Burger Village is rapidly growing and constantly looking to spread the word about organic food and all of the benefits that come along with it. We’re going to spread that message one customer and one burger at a time. Slowly but surely we are hoping to branch out to even more locations near you (including more in Canada after our new location officially opens). Are you as excited as we are? We sure hope so; and if you are excited, let us know on social media! You can follow us on Twitter @burgervillageny or on Facebook @burgervillageny.
Franchising Opportunities Are Still Available!
Burger Village has teamed with franchise industry expert, Gary Occhiogrosso, the founder of Franchise Growth Solutions, LLC, to expand the turnkey Burger Village fast casual QSR (quick service restaurant) business model from eleven (11) in 2019 to twenty-five (25) locations by 2022. Burger Village franchises are currently available in most territories nationwide.
Mr. Occhiogrosso has over 30 years’ experience in franchise development and sales and was integral to the success of nationally recognized brands including Ranch *1, Desert Moon Fresh Mexican Grille, and brands found under the multi-brand franchisor, TRUFOODS, LLC.
For information on owning your own Burger Village franchise, please contact Gary Occhiogrosso at 917.991.2465 or via email at [email protected] or log on to our franchising opportunities website at: http://www.burgervillagefranchise.com
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ABOUT BURGER VILLAGE
Burger Village is an all-natural, hormone-free burger concept that uses fresh and organic ingredients to create nutrition-rich meals for active consumers who want to eat well when dining out. From six locations in New York and five in California, Burger Village has grown into a recognized lifestyle brand that combines the growing trend toward clean and healthy dining with a socially responsible business model.
ABOUT FRANCHISE GROWTH SOLUTIONS, LLC
Franchise Growth Solutions, LLC is a strategic planning, franchise development and sales organization offering franchise sales, brand concept and development, strategic planning, real estate and architectural development, vendor management, lead generation, and advertising, marketing, 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 more information on the Burger Village fast-casual restaurant concept, please visit burgervillage.com.
For information on owning your own Burger Village franchise, please contact Gary Occhiogrosso at 917.991.2465 or via email at [email protected] or log on to our franchising opportunities website at: http://www.burgervillagefranchise.com
Our friend and franchise expert Ed Teixeira interviews Peter R. Taffae, MLIS, CFE and Managing Director Executive Perils, Inc. on the topic of Cyber Security Claims and Sexual Harassment claim that all employers need to protect themselves against.This important topic has faded from the mainstream ews media but remains a real problem that employers need to focus on…
Franchises Need To Protect Themselves From Increased Sexual Harassment And Cyber Security Claims
After hitting a two-decade low in 2017, sexual harassment complaints to the Equal Employment Opportunity Commission increased by more than 12 percent from last year. The federal agency has also been aggressive with litigation this year, filing 41 sexual harassment lawsuits so far, up from 33 in 2017. At the same time, cyber-crimes which involve the theft of personal information has cost some companies millions of dollars in damages to its reputation and from monetary claims.
Employer Liability Claims Increase
Over the course of this year, stories of sexual harassment have dominated the headlines. In what USA Today dubbed the “Weinstein Effect,” various sized companies have witnessed employees take part in the #Me To movement. This increased focus on sexual harassment has created a surge in protests, discrimination lawsuits, and government investigations, with almost no industry being immune, including a recent demonstration against McDonald’s franchise locations. Regardless of whether a sexual harassment allegation has merit, these claims can cause a company significant damage to its brand and sales. Seven in 10 human resource professionals said they believe sexual harassment complaints at their workplaces will likely be “higher” or “much higher” in 2018 compared to previous years.
A poll by the Human Resource Certification Institute found that “63 percent of HR professionals said that acts of sexual harassment “occasionally” or “sometimes” occur in their workplaces and 30 percent said that such acts “frequently” occur. Only seven percent said that such acts “almost never” or “never” occur.” The trend toward more sexual harassment lawsuits appears to continue as the EEOC increases efforts to crack down on sexual harassment. The EEOC has launched online access for employees to file harassment charges from their homes, with the EEOC.
Employment-related risks can represent the most damaging exposure to a franchiser. Claims involving sexual harassment, wrongful termination or discrimination, from a current or former employee can potentially cause irreparable damage to a franchise brand and reputation resulting in significant financial cost.
To gain more insight into employer liability and especially sexual harassment claims I spoke with Peter R. Taffae, MLIS, CFE and Managing Director Executive Perils, Inc. In 2014 they introduced a management liability policy, FranchisorSuite®, designed for the unique needs of Franchisors.
Q. How extensive are employer liability claims?
A. Companies of all sizes and industries have been affected by a surge in employment-related litigation and rising legal damage awards.
Q. What can be done to mitigate those risks?
A. Be sure that franchisers, franchisees and their employees are properly trained to understand the risks of sexual harassment, unlawful terminations, and discrimination claims. Have the proper procedures and protocols in place and have financial protection.
Q.What does the future hold for sexual harassment claims?
A. The threshold has been raised for what is appropriate in the workplace. This means that the expectation for proper employment practices is higher. Some experts believe that it will take 10 to 15 years to reverse the trend as current middle age retirees are replaced by today’s younger generation.
Q. Any other threats that franchises face?
A. One area related to the franchise industry that doesn’t receive a lot of coverage is cybersecurity. Every state has primary notification laws, which that when there is a breach of a customer’s personal data, the company or franchiser must notify every customer. In addition, there is no statute of limitations regarding these crimes. For example, if I purchased a meal at a franchise location 10 years ago and their system was hacked, and my personal information was stolen, that franchise is liable.
Franchise restaurants process so many credit cards and have the extensive point-of-sale equipment, that they are vulnerable to data theft. Websites, Wi-Fi and digital kiosks represent additional threats. Any franchise which does any of the following is at risk for a cyber-attack; Accepts credit cards, handles or views private information of employees or customers electronically, has Wi-Fi or conducts a portion of their business online.
It’s important that each component of the franchise industry be prepared to protect themselves from the threat of employer liability and cybersecurity claims.
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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]
Today the changing landscape in the restaurant business is not only a food driven event. It’s also being moved by all the other elements connected to the overall restaurant experience, such as convenience, payment method, dine-in options and delivery options. The way Baby Boomers steered America into fast food Drive Thru lanes, Millenials are swiping, tapping, and clicking the food service industry into a mash-up of digital convenience and real life communal eating experiences that are now addressed by the Virtual Food Hall.
An Innovation In Urban Dining – A Closer Look At The Virtual Food Hall By Gary Occhiogrosso
Originally published in Forbes.com
As a New Yorker, I’ve come to realize we are privy to numerous changes in the restaurant and franchise business long before people in many other parts of the country. One such change is the innovation of the “Virtual Food Hall”. With the advent of online ordering, third party order and delivery platforms such as Grub Hub, Seamless and Door Dash as well as the need to optimize occupancy cost in cities like New York, the Virtual Food Hall is taking a position in the already vigorous fight for the dining dollar.
I had the pleasure of interviewing Brian Berger on the topic of Virtual Food Halls. Mr. Berger is a founding partner of New York City based JBH Advisory, a firm that supports restaurateurs and retail brand owners with concept development, start-up planning, processes, and training. Mr. Berger and his team launched the first Virtual Food Hall in New York, Sous Vide Kitchen in 2017. I asked Brian to give us his insights into the Virtual Food Hall business model. He was gracious enough to explain the concept and answer my questions.
What is a Sous Vide Kitchen – Virtual Food Hall?
We coined the term Virtual Food Hall to represent the style of service and ordering offered at Sous Vide Kitchen. In a Virtual Food Hall guests order from our multiple brands using our self-order kiosk, pay in one single transaction, and receive their meal all in less than six minutes.
How is a Virtual Food Hall different from a Urban Food Hall or Food Court?
A traditional urban food hall has large open spaces where guests can enjoy a variety of cuisines in a hip atmosphere. Traditional urban food halls have a long history of success in Europe and metropolitan areas, with a recent explosion in U.S. cities. Traditional food halls have been gaining momentum for years. They present advantages and disadvantages for both guests and operators. On the plus side, guests can try multiple restaurants in one location, and operators can reduce their overhead cost by utilizing the shared physical infrastructure. However, this experience can be challenging for those looking to try multiple options or order and pay for a group with different tastes, as that would require each guest to wait in a separate line, pay and receive their meal at a different time. The Traditional Food Hall model is not ideal for groups wishing to dine together. We wanted to create an experience that would allow guests a more convenient way to enjoy items from multiple concepts and dine with others.
Another term I hear is “Ghost Kitchen.” What is a Ghost Kitchen, and how are they different from Virtual Food Halls?
A Ghost Kitchen is a foodservice operation meant for delivery only. In other words, these businesses have no dining room or storefront. In many cases, you cannot even carry out from these businesses. One major disadvantage from a guest perspective is that they do not have any visibility as to the location or condition of the restaurant. While we enjoy the operational efficiencies of a ghost kitchen, we offer guests the ability to come to the food hall, if they choose. We offer diners the ability to order delivery, or pick up, or enjoy their meal in a spacious seating area where guests can relax and enjoy.
When and why did you first come up with the idea of a Virtual Food Hall ?
We launched our first fast-casual restaurant, BONMi (Vietnamese Inspired Baguettes & Bowls), in 2011 in Washington, DC. Our goal was to create an innovative model for production which centered on the Sous Vide cooking method to overcome the increasing challenges the industry faces (labor, food safety, consistency, capital expenses) and produce consistent, healthy, safe and delicious food. We tested the concept in various formats: standalone restaurant, campuses/food court, high-end supermarkets, and food trucks. We learned from these tests and evolved our processes to cement operations prior to scaling. Our eight years of fast-casual operations experience blended with our advisory firm’s client work made us acutely aware of several trends that were developing. The first was an increased awareness of the origin of food, food safety, and reduction of waste. Through the utilization of proteins prepared using the sous vide method of cooking, we can offer our guests the safest food possible while maintaining the nutritional integrity of each item. The use of ready to serve pre-cut vegetables allows us to operate in a zero-waste environment since we obtain 100% yield on every product that we purchase and allow our produce vendor to repurpose the parts of the product that we may not utilize.
Can the Virtual Food Hall compete in the fast-growing Third-Party Delivery business?
Yes. We noticed an increase in meals consumed outside of the restaurant. In years past, delivery was a small arm of the business typically accounting for no more than ten percent of total sales; however, in recent years, the demand to enjoy meals outside of the restaurant has continued to grow. Acting as the sales arm of a brand, companies like Seamless/GrubHub, Meal Pal, Ritual, Fooda, Cater 2 Me, and Zero Cater continue to change the way guests order and receive meals. The expectation is that guests will receive the same quality of food and level of service that one would receive in the restaurant; as a result we have evolved our menus, processes, and strategies to ensure that we serve our meals in a variety of platforms; In-Store, Delivery, Catering, Off-Site Catering/Pop-ups, and third party pick up.
When we opened our BONMi in New York in April of 2017, we selected a larger sized store (2,500 Square Feet). Our strategy was based on our ability to utilize the store for testing our delivery only, virtual concepts and provide a New York City hub for catering, pop-ups, and delivery. With the success of our operational model, combined with the realization that a high proportion of guests dollars are spent outside of the brick and mortar store, we began to develop and launch additional concepts through third-party delivery services and catering, one step at a time. The first concept operating out of the BONMi kitchen is Pulled & Chopped BBQ. This concept immediately received excellent reviews, and we were able to increase sales without adding any additional overhead expenses. After seeing this success, we continued to create concepts and offer them through delivery and catering channels. The next concept to launch was SVK Greens & Grains followed by Mediterranean Pure Foods, then Eso Latin. At this point, we were operating four delivery, only concepts out of the kitchen, while the storefront remained BONMi.
Why did you marry the Virtual Food Hall idea to the Ghost Kitchen Concept?
We knew we had to find a way to offer the same variety of concepts to our guests in the store while maintaining the efficient production model that we were operating for our delivery-only concepts. That’s where the idea to utilize the self-order kiosk came into play. We determined that the growing popularity of this trend would be the best way to showcase our brands and allow our guests to order from multiple concepts easily. We had each ingredient and all the signature dishes photographed to present a glorious high-resolution display. Guests are now able to browse through the offerings within each menu easily, see the allergen and ingredients of each dish, put everything in one cart, pay at the kiosk and receive a text when their order is completed. Since opening our food hall, we have continued to increase our collection of brands and have added Vindy Indian Inspired Eats to our current offering. We have other concepts currently in development and can see this model featuring eight to ten various menus.
The concept could certainly live online only – however, our brick and mortar food halls are a great space where guests can enjoy their meal, socialize, or work remotely.
What are the advantages to the guest using a Virtual Food Hall?
Guests love having many options at their fingertips. Order, pay and enjoy the experience. The ability to easily identify ingredients or allergens within each dish is a significant advantage. With thousands of possible combinations, guests are inclined to visit multiple times per week without the risk of menu fatigue. We have noticed a bit of a trend with our SVK Greens and Grains as our highest volume concept at the beginning of the week and Pulled & Chopped BBQ as the most popular concept at the week’s end. Since there is something for everyone to enjoy, and multiple dietary constraints are satisfied, it is an excellent option for groups with a variety of preferences. Utilizing the sous vide method of cooking as the thread to bind our concepts together gives guests the peace of mind that items that we serve within our food hall are carefully selected contain clean ingredients with minimal processing.
For some guests, the idea of ordering through a kiosk without any human interaction can be intimidating. We eliminate that fear by staffing our food hall with a “kiosk concierge,” one employee who helps to oversee the dining room and as well as assist guest who may be apprehensive through their ordering process. We are in the business of creating repeat guests, so we find that spending a few moments with a guest the first time they come in will give them the confidence to return and order without assistance again and again. We consider Sous Vide Kitchen to be High Tech & High Touch.
What are the advantages and disadvantages to the Operator?
From an operator’s perspective, there are only advantages:
* Reduction of Labor
Operators love serving several concepts within one shared production line, utilizing the same staffing levels that they would for one brand. Through our menu engineering and production processes, we have created an innovative system, which allows less staff to produce a consistent, high-quality menu. Additionally, we do not need highly skilled culinarians – our process enables us to hire based on hospitality attitude.
* Platform Flexibility
We can accommodate what the market is requesting; food when you want it, how you want it, delivered through a variety of platforms (in-store, delivery, pop-ups, catering & delivery). Retail concepts can easily be rotated with minimal challenges.
* Lower Cost of Entry
We do not require ventilation and have minimal equipment requirements, making it a perfect concept for host environments such as transportation hubs, business & industry, campuses, healthcare facilities, and more. Costs can vary greatly depending on the area of the country, and the size of the food hall; however, we have found that buildout costs are fifty percent less than that of a traditional restaurant. Our concept’s space requirements are as small as 300 Square Feet and may go to over 2,500 Square Feet.
Are Virtual Food Halls unique to urban centers with a concentration of daytime workers?
In general, Fast Casual restaurants do peak business during lunch hours; however, we do see guests picking up meals on their way home from work. Since our menu offering is very diverse, including a half chicken, ribs, and salmon, there is a great demand for delivery in the evening as well. There is potential to increase the take-out offerings and allow guests the option to pick up items to heat at home, allowing for the “semi home-cooked” experience. We are confident that this concept will thrive in any market from the inner city to suburban markets where other fast-casual options may be limited.
Do Virtual Food Halls offer delivery? If so, do Operators handle that on their own or use a third-party ordering platform?
Currently, we see that approximately sixty percent of our sales are consumed outside of the restaurant, including take-out, delivery, and catering. Our delivery method is a bit of a hybrid model as we do employ a team of delivery personnel, but also utilize delivery from third-party vendors to help during times of peak volume. We use third-party ordering platforms as the marketing arm of our brands; they help to introduce our concepts to diners – which we then will convert to repeat guests who order directly through our channels.
Where do you see this going in the next five years, and why?
We see this model as the future of foodservice as it addresses every major challenge facing the restaurant business, including rising wage costs, concern about food safety, the demand for customizable meals that cater to a variety of eating preferences, as well as the ability to serve guests through a variety of channels including dine-in, delivery, catering, or pick up.
External factors such as rising minimum wage and increased paid sick and vacation time for hourly employees cause us to believe that the traditional restaurant model is not sustainable. Rising wage costs will continue to force restaurants to make difficult decisions regarding staffing; in many cases, a reduction in staffing can lead to a decrease in quality. However, as a result of the production model developed by Sous Vide Kitchen, we can produce consistent quality and deliver guests the offering of six restaurants with the staff that would typically serve one brand. Our model revolutionizes operations to meet modern demands. The precision temperature control of sous-vide cooking means it safer than traditional cooking methods, as we can bring food to precise temperatures while maintaining the nutritional integrity of each item.
Our self-order kiosk allows guest the ability to select from a signature dish or select each ingredient to building their bowl, allowing for the ultimate customizable experience. Our streamlined and inexpensive buildout makes this an ideal offering not only as a standalone food hall but especially desirable within a host environment where space may be limited. The quality and flexibility of our offerings offer limitless opportunities for growth within stadiums, arenas, office buildings, higher education, and healthcare facilities.
Closing Thoughts
To summarize my interview with Brian and after touring Sous Vide Kitchen; my takeaway is that the Virtual Food Hall model delivers many unique benefits not found in a brick and mortar restaurant, traditional urban food halls, or simple ghost kitchens. Virtual Food Halls enhance the guest experience with more choice, accuracy of ordering, speed of service and a dine -in option. For the restaurant operator it translates to lower buildout costs, more channels for distribution, and the ability to quickly address lagging menu items. If a particular concept or menu isn’t producing enough sales and profits, the operator can change the menu and pivot concepts. By creating a single kitchen that operates multiple concepts and sharing ingredients, restaurant operators can quickly benefit from economies of scale from one single location.
AN INTERVIEW WITH Mr. Brian Berger
Mr. Berger is a founding partner of JBH. He is an industry expert with extensive knowledge in food service management, healthcare support services, concept development, contractual agreements and negotiations, operational and financial analysis.
McDonald’s is the sales standout, and they are in a class by themselves, providing value and upgraded quality to a population hungry for price/value. Taco Bell is also an exception, for similar reasons. Even Domino’s and Wingstop, who have put up great numbers in recent years, are reporting only modest gains at the moment.
RESTAURANT MAIN STREET – WHAT’S HAPPENING ON THE GROUND?? By Roger Lipton
We have long believed that the restaurant industry provides an excellent leading indicator as to consumer sentiment. It is much easier to adjust dining habits, every day, than to plan and spend for large ticket items.
Quite a few restaurant companies have reported their quarterly results, ending 6/30. The sales and traffic trends, collectively, indicate that not much has changed in terms of consumer optimism. The table below provides the reported results for comp sales, including a breakdown, mostly provided by company operated locations, relative to traffic, pricing and menu mix. Also shown on the table are the outlook, when provided, relative to commodity and labor expense.
No Meaningful Improvement
The company operators show, with just a couple of important exceptions (Chipotle and Starbucks) modest comp gains, more than offset by pricing and menu mix, so traffic is negative almost everywhere. The only other outlier is Diversified Restaurant Holdings, franchised operator of the Buffalo Wild Wings system, going against very easy comparisons. Most importantly, In terms of third quarter to date, virtually no one is guiding toward a meaningful improvement. In our view, Chipotle and Starbucks (with the strongest trends) can be viewed as “special situations”. Chipotle is bouncing back from their multi-year troubles and doing a great job with mobile app/delivery, and Starbucks is the premier worldwide brand selling an addictive product by way of an extraordinary employee culture and great technology.
The franchising companies that have reported are showing a similar trend, modest sales gains in almost all cases. The franchising companies steer away from reporting traffic, but it is safe to assume that pricing and sales mix trends are similar, so traffic is no doubt down. McDonald’s is the sales standout, and they are in a class by themselves, providing value and upgraded quality to a population hungry for price/value. Taco Bell is also an exception, for similar reasons. Even Domino’s and Wingstop, who have put up great numbers in recent years, are reporting only modest gains at the moment.
Delivery On The Rise
It’s important to note that, within the sales mix, delivery, curbside and in-store pickup, are rapidly increasing portions of the revenue mix, so dine-in traffic is down materially more than the comps that are reported. We haven’t heard any restaurant company bemoan, though they could, the fact that their physical plants are only fully utilized a few evenings per week.
In addition to the sales and traffic trends, we are equally interested in the commentary relative to cost expectations, namely commodities and labor. Expectations are mostly higher for commodity costs, dramatically so for chicken wing prices. It is clear that the benefit a year or so ago from lower commodity prices is in the rear view mirror, and higher cost of goods is likely. Labor expense, predictably, is expected to move ever higher.
CONCLUSION:
The beat goes on. With prime costs, as well as other expenses such as insurance, common area charges, utilities, etc. also increasing, it takes more than two or three points of comps to improve margins. A handful of the larger premier operators such as Starbucks, McDonald’s, Darden, Domino’s and Wingstop continue to provide better the best results. However, even among these “best of breed” operators, it’s a battle for market share and an increasing challenge to generate a worthwhile return on incremental investment.
Roger Lipton
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About Roger Lipton
Roger 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) .
