WHAT’S YOUR SUPERPOWER?

A superpower should be super. It should be something that very few other people can match. For example, a lot of people can play a guitar pretty well. But Eddie Van Halen can coax sounds from the instrument like few others.

WHAT’S YOUR SUPERPOWER?
By Jeff Morrill

Superman can fly, Wonder Woman can deflect bullets, Spider-Man can sense danger. Real people can’t leap tall buildings in a single bound, but we can develop special abilities that form the backbone of our success over a lifetime.

It usually takes a few superpowers to make a superhero, because even a monumental talent will not, by itself, guarantee success. For example, towering athletic ability won’t get you very far unless you also have the long-term discipline to sharpen your skills and match your competition. I use the term “superpower skill set” to describe a cluster of a few exceptional strengths that add up to a whole greater than the sum of its parts. Imagine a person with unusually high levels of manual dexterity, stamina, and intellect—those qualities would combine to make very good surgeon, or a pilot. The set of faculties work together to create quite a competency.

When identifying your superpowers, keep these things in mind:

There’s a difference between the things you want to be good at and things you actually are good at. As a boy I wanted to be a great baseball player. I persisted through my little league years on modest talent, hoping that that my genetics would eventually deliver me the physique necessary for real success (you know—big butt, powerful upper body). It was not to be. I made it to six feet but never to even 140 pounds. I permanently abandoned my efforts on the diamond after I failed to make the Blacksburg High School junior varsity team.

A superpower should be super. It should be something that very few other people can match. For example, a lot of people can play a guitar pretty well. But Eddie Van Halen can coax sounds from the instrument like few others. You probably do a lot of things well. But what do you do really well? What’s easy for you but hard for others? That’s where you can really make things happen.

In my case, I have always been freakishly organized, I have a feral risk tolerance, and I can remain intensely focused on goals for years on end. This skill set is ideal for entrepreneurship. I have depended upon those qualities my whole life, and they have helped me compensate for many deficiencies in other areas.

Be respectful of your superpowers. Use them for good, to make the world better for you and everybody else. Don’t waste them, because they don’t necessarily last forever. There might come a time in your life when you regret screwing around with your prime years instead of discovering the frontier of your potential.

What are the handful of special abilities that comprise your superpower skill set? Have you developed each to its full potential? Are you making the highest and best use of your overall capability?

About the Author:
Jeff Morrill co-founded Planet Subaru, “your undealership,” in 1998, and built it into one of the most successful privately-held car dealerships in the United States. He later started other businesses in automotive retail, real estate, telecommunications, and insurance that generate over $100,000,000 in annual revenue. His achievements in building profitable and ethical companies have been featured in a variety of national media including USA Today, Entrepreneur Magazine, Automotive News, The Boston Globe, and others.

Jeff is a strict vegetarian, even though people tell him it’s a big missed steak to eat that way. However, he does like his puns well done. Jeff lives with his wife, Julie, outside Charlottesville, Virginia, on a mountain he refers to as “The Morrill High Ground.”

Warning Signs Your Restaurant Is Not Ready To Franchise

I cannot emphasize enough that any franchise company’s overall growth and success depends on its franchisee’s success. Your restaurant concept needs to have proven methods along with quantifiable sales results.

Warning Signs Your Restaurant Is Not Ready To Franchise
By Gary Occhiogrosso – Managing Partner, Franchise Growth Solutions, LLC.

As a former franchisor and now a consultant to the franchised restaurant industry, it has always been my role to promote, expand, improve, and advocate franchising as the most influential business development tool ever created. As my regular readers might imagine, the mere thought that I would approach the idea that a business would not be better off as a franchise is personally challenging. That said, I have worked with scores of companies and seen hundreds of concepts in the franchise industry. Some of which left me scratching my head as to why anyone would believe a particular idea would be a viable business under a franchise model. As a result, and as a follow up to my previous article, I’ve compiled my top four warning signs for delaying a franchise launch or avoiding franchising your restaurant altogether. It’s a short checklist when deciding if your business is ready and feasible for franchising. These reasons alone or any combination would cause me to pause and “go back to the drawing board” before launching a franchise brand.

No Proven Operating Prototype

On occasion, the owner of a marginally successful restaurant or one with a minimal track record of successful performance considers expansion through franchising. Sometimes, the wannabe franchisor may believe that building additional restaurants without the founder’s initial mistakes using a franchisee’s money will make up for a brand’s shortcomings and somehow be successful. Not only is this thinking irresponsible, but it disregards the fact that potential franchise buyers expect a franchise system that works and is proven. Using a franchisee’s enthusiasm and investment as your “canary in a coal mine” will almost always end in disaster.

Ed Teixeira, a former franchisor executive and franchisee with 40 years of franchising experience states “that when franchising an existing business, a key precept is that the business used to develop the franchise must be a profitable operation. To expect a new franchisee in a startup franchise program to surpass the existing business owner’s financial performance is a dangerous strategy. In this case, the fledgling franchisor should identify why his business is not profitable and correct the situation before expecting a new franchisee to solve the problem. A flawed business used to develop a new franchise will end up creating a flawed franchise.”

I cannot emphasize enough that any franchise company’s overall growth and success depends on its franchisee’s success. Your restaurant concept needs to have proven methods along with quantifiable sales results. Every system in your operation, from recipes to marketing, needs to be documented and “teachable” through your confidential operations manual. If this is not the case for your restaurant, take a step back and continue working on the total operating system before offering franchises.

Your Menu Is Too Big Or Complicated To Replicate.

Chef owners often fall into the trap of creating an elaborate, difficult to produce menu because their professional skill set is highly developed. They are not looking at the reality of who their franchisees may be and the level of experience they bring to the table. Delivering a chef-quality menu is perfect for a chef, but maybe not so much for a franchisee or a franchisee’s young entry-level employee. There is nothing wrong with a unique, high-quality menu in a franchised restaurant. In fact, it’s a great thing. Innovative and delicious food is one of the points of differentiation that every restaurant should pursue. However, in the world of franchising, it’s about delivering a product and experience the same way for every customer, flawlessly and consistently. Your menu needs to be simple to execute and served without the complexities of a fine-dining, chef-driven process. Your menu also needs to be crave-able, profitable, and very focused.

Fred Kirvan of Kirvan Consulting LLC, a New Jersey-based restaurant development and operational assessment firm for the franchise industry, says: “many independent restaurateurs find it challenging to embrace the idea that less is best. Offering guests too many choices or menu items with complex procedures may create confusion for the guest; it can negatively impact the overall cost of goods, and often increases employee mistakes.”

You Haven’t Branded Your Concept.

People buy brands. When customers step into a successful franchised restaurant, there is usually a theme and a brand voice surrounding the guest. The guest leaves with more than just a satisfied stomach. You want them to remember the service, the decor, the music, and the restaurant’s messaging. Many restaurants simply focus on the food without regard to the many facets of an overall guest experience. Suppose you have not developed a distinctive decor and brand identity. In that case, you may have difficulty competing when it comes to selling franchises because you haven’t created the necessary points of differentiation that attract potential franchise owners. Your restaurant’s branding is not merely your food or the price point. Creative, disruptive restaurant brands are not only attractive to consumers but also to those seeking to invest in a franchise. That is why although some restaurants may sell similar cuisines, the successful franchise brands do it with a new twist and an exciting environment.

You Lack Sufficient Capital To Launch Your Brand

One of the most significant failings of fledgling franchisors is underestimating the cost of launching a brand into the sea of franchises. Some believe they can bootstrap the effort and fund their company’s growth by using the upfront franchise fees collected. I have always stated (sometimes at the risk of losing a potential new client) that “on a good day; you won’t lose money on a franchise sale.” In many instances, that’s the best-case scenario an emerging brand should expect. Franchisors should set their sights on royalties as their revenue stream, not initial franchise or license fees. You’ll need to consider the real cost of the franchise sale. For a startup brand or an emerging brand, the price to generate enough leads to sell one new franchise may be anywhere from ten thousand to fifteen thousand dollars. No matter what you may want to believe, franchises do not “sell themselves”.

Additionally, the sales commission to an outsourced franchise sales organization, in-house salesperson, or franchise broker may range from 40% to 60% of the initial franchise fee. Then there are legal fees as well as the cost to train and support the new franchisee. According to Evan M. Goldman, an attorney and the Chair of the Franchise Law practice at A.Y. Strauss LLC, “the legal costs to close a deal can range from a small amount ($1,000 or so) for a simple deal, to more than $5,000 for a complicated purchase with lots of requested changes by the franchisee.” Goldman adds, “without proper funding, you’re never going to sell that first franchise because it ‘takes money to make money.’ Undercapitalized franchisors face a difficult predicament whereby they can hold their limited cash but not be able to sell their franchise, or use all available money and potentially sell their first few franchises, but cannot support their franchisees. And to add to that, undercapitalized franchisors are potentially disastrous for franchisees who rely on the franchisor to provide services (advice, marketing, etc.), which they cannot do without capital. In essence, it is mutually-assured destruction.”

Carefully Weigh All The Factors Before Franchising

Although my list covers what I think are the most crucial reasons not to franchise your restaurant, there are numerous others. Everything from the market needs to unit saturation in the space to the economy at launch time. Indeed, my thoughts here are not intended as a deterrent to franchising your restaurant but rather a professional recommendation to look at all aspects and apply critical and long term thinking to the endeavor.

What is a Master Franchise and Sub-Franchise and How Are They Different Than An Area Development?

A master franchise is distinguished from an area development agreement in which a person or entity who buys a territory or region is required to develop that region directly. The area developer would be trained and supported by the franchisor and required to open a certain amount of locations within a certain territory and in a certain time frame.

What is a Master Franchise and Sub-Franchise and How Are They Different Than An Area Development?
Reposted with permission from Spadea Lignana – Franchise Attorneys

 What is a Master Franchise and Sub-Franchise and How Are They Different Than An Area Development?
Like most business disciplines, franchising has its own jargon or vocabulary. The terms “master franchise” or “sub-franchise” and “area developer” have specific technical definitions, but are often used improperly. This article will help to define a master franchise or sub-franchise and area developer and distinguish them from other forms of expanding a franchise system.
Franchise systems sell a master franchise (also known as a “sub-franchise”) in order to more rapidly expand their brand and system. Master franchising is typically the most common way brands expand internationally. In that context, a master franchise or sub-franchise may be sold to a person or entity to sell franchises on the franchisor’s behalf in another country. The master franchisee has the responsibility of recruiting, training and supporting franchisees throughout that country acting as their franchisor. This makes sense for the franchise system that is interested in expanding globally to capture local knowledge, relationships and the logistical advantages of being in country.

Understanding a Master Franchise
In the United States, many systems have used master franchising to grow domestically by carving the country into regions that may be individual states or groups of states, or even parts of largely populated states, like California. There is no formal rule on the breakdown of the geography. For example, a system may sell a master franchise for Northern California. That master franchisee would be responsible for selling, training and supporting the franchisees in Northern California and would typically receive a percentage of any franchise fees and royalties paid under the franchise agreement by the franchisees.

The Advantages & Disadvantages
The advantages to this method of expansion are quicker growth, local knowledge and potentially better logistical support for the franchisees. The disadvantages to this method are both the division of future cash flow to the franchisor (which will affect their overall enterprise value) and the potential of weakening brand standards, which would be upheld and enforced by multiple master franchisees instead of the single franchisor. Unless tightly controlled and monitored, this has the potential of fragmenting the brand. There are also additional administrative and legal costs in being a master franchise system, such as a separate Franchise Disclosure Document (FDD) for the master offering and the individual offering, and the master may also need their own FDD for their franchisees. This is an area where franchisors and franchisees should consult with an experienced franchise attorney to ensure the legal documents are compliant with both federal and state law.

What’s the Difference Between a Master Franchise & An Area Development Agreement?
A master franchise is distinguished from an area development agreement in which a person or entity who buys a territory or region is required to develop that region directly. The area developer would be trained and supported by the franchisor and required to open a certain amount of locations within a certain territory and in a certain time frame. Panera Bread® is an example of a franchise that has expanded through area development. Historically they sold a minimum territory of 15 units and that owner must develop those stores within five or six years.

Becoming an area developer for a territory is another means of rapid expansion and has its own concerns for both the franchisees and the franchisor. There is no perfect method of expansion, only options that should correspond with the business goals of the owner. Each method has advantages and disadvantages. If you are considering master franchising or area development as a means to grow your system or you are considering becoming a master franchisee or area developer, we would be happy to have a discussion to see how we may be able help. We have drafting, reviewed and negotiated these documents both internationally and domestically for many clients on both sides of the transaction. We look forward to talking with you.

About the Author:

Tom Spadea spent more than 15 years in corporate and entrepreneurial positions before completing law school at Temple University’s Beasley School of Law. His undergraduate degree is in finance from Marquette University, where he graduated Cum Laude. Tom is a Certified Franchise Executive (CFE), a non-legal designation earned from the International Franchise Association. He has also been named a “Legal Eagle” by Franchise Times, a distinguished award recognizing Tom as a leader among his peers in franchising.

Tom is the founding member of the Philadelphia Franchise Association and is the current President and Chairman. The Philadelphia Franchise Association holds quarterly networking and educational meetings, bringing together franchisors, franchisees, and suppliers.

Focus:
Tom has been lead counsel for dozens of new franchise launches and has assisted franchisors and franchisees alike with a variety of legal issues, including private equity transactions, litigation, trademarks, partnerships, and real estate deals.
Background:
Tom’s entrepreneurial background goes back to the 1990’s when he was the co-owner and President of a communications equipment manufacturer where he co-founded a factory in Latin America, successfully created an international sales network in Asia and invented a product for which he was granted a US Patent.
Tom’s next move was into the franchising world working as a Franchise and Business Broker for Sunbelt of Philadelphia. He acted as an adviser to clients looking to transition into the ownership of a franchise or the purchase or sale of an existing small business. As a business intermediary, Tom handled dozens of transactions every year, ranging from listing businesses for sale to recruiting buyers. His specialty was negotiating transactions that satisfied all stakeholders.
It was while Tom was a broker that he decided to pursue his legal education. Balancing law school and a young family, Tom also managed to hold senior executive positions for multiple national franchise concepts throughout law school including a 100-unit fast casual restaurant chain; a franchised chain of over 400 supplemental education centers; and a 500-unit retail chain of franchised frozen dessert restaurants.
Passion:
Thanks to his background as an entrepreneur and a corporate franchise executive, Tom has a unique perspective as a franchise and business lawyer. When combined with his experience and acumen as a lawyer, he can vigorously defend his client’s legal rights without losing sight of their business goals. Tom understands franchising from the inside, giving his clients valuable counsel to help them map out and meet their business objectives.
More important and valuable, however, to any of Tom’s professional accomplishments is the time he gets to spend with his wife and their two children.

5 Key Reasons To Franchise Your Restaurant Concept

As a Franchisor, your income is not derived from the operation of a restaurant. The Franchisor’s primary revenue source is a royalty payment made by the franchisee to the parent company. Also, this royalty is paid on top-line sales, not bottom-line profit. As a Franchisor, your role is to help franchisees increase their sales and increase the number of operating units.

5 Key Reasons To Franchise A Restaurant Concept
By Gary Occhiogrosso Managing Partner – Franchise Growth Solutions

Suppose you have a proven restaurant concept with a successful business system. Think McDonald’s, Panera Bread, Applebee’s, or Halal Guys. In that case, your next move may be to open additional locations. Franchising your restaurant and awarding others’ the rights to use your brand name, recipes, and procedures is a great way to expand. Why do restaurant owners choose to franchise their business? For the most part, it comes down to capital, time, people, and geography.

Lower Investment To Grow Your Brand

You can add additional restaurants while at the same time, you minimize your capital investment. Becoming a Franchisor and using franchising as the method to grow means other individuals (franchisees) will pay a franchise fee to gain access to your brand. Also, the franchisee will fund building the restaurant and assume the location’s financial responsibility. According to Harold Kestenbaum, a Partner with Spadea Lignana Franchise Attorneys: “Building out company units can get very expensive. Having a franchisee invest their own funds not only saves the franchisor money but allows the franchisee to have skin in the game. This is crucial for the success of a franchise system.”

Exponential Growth

Building corporate restaurants is limited to your capital, human resources, and, in many cases, geography. However, when you franchise, your brand may be growing more rapidly and in multiple markets. Once ramped up, some franchisors open as many as 20, 50, or more than 100 new restaurants a year. Michael Einbinder, founding Partner of Einbinder & Dunn, states: “Franchising restaurant concepts allows for fast growth. If you expand your brand through franchising, the investment in new outlets come from franchisees. Critically, franchising gives you an opportunity to grow in multiple markets simultaneously.”

Owners vs. Employees

In many cases, the most challenging aspect of running a restaurant is; recruiting, training, and maintaining good employees. As the Franchisor, that effort rests with the franchise owner of the individual location. Unlike owning and operating corporate locations, it’s the franchisees that have “skin in the game,” and unlike employees, they usually do a better job. Also, they can’t just quit at will because they have a vested interest in the business, usually in the form of personal cash and loan commitments. Franchisor, Charles Watson, CEO of Tropical Smoothie Cafe says: “Having franchisees who are aligned with your mission and willing to invest in their own success are critical for quality growth. You may not always have the same level of commitment from employees because their work does not impact their bottom line. Dedicated franchisees are often eager to execute the new initiatives that the franchisor rolls out systemwide to their local markets, which inevitably inspires guests to keep coming back to your concept, no matter what location is nearby. The franchisee/franchisor relationship is always evolving and is typically mutually beneficial.”

Residual, Royalty-Driven Income

As a Franchisor, your income is not derived from the operation of a restaurant. The Franchisor’s primary revenue source is a royalty payment made by the franchisee to the parent company. Also, this royalty is paid on top-line sales, not bottom-line profit. As a Franchisor, your role is to help franchisees increase their sales and increase the number of operating units. When done correctly, the Franchisor benefits, and the franchisee’s chances of higher profit through better operations and broader brand recognition are increased. The general public loves and trusts “Name Brands” and can sometimes be skeptical of the one-off mom & pop operations.

Better Selling Price At Exit

Suppose you’ve built your franchise company with reliable franchisees, a tight operating model, and strict enforcement of brand standards. In that case, the chance is a potential buyer will pay a higher price based on a multiple on your profits. All too often, non-franchised restaurant owners sell their corporate-owned restaurant chain at a price based on two or three times multiple of their bottom line profit. However, many investors, particularly private equity firms, are attracted to franchise companies whose revenue is driven by royalties.

According to Michael Einbinder: “Many franchisors build their concepts with the ultimate goal of creating value in the long term for an exit. In the last several years as private equity firms have become more involved in franchising, the trend has been that the multiples paid on franchisor EBITDA are higher than on company operations.”

Investment firms are often willing to buy based on a multiple double and sometimes triple that of an independent restaurant chain. Why? Because unlike profit earned by restaurant operations, royalty driven profit is virtually endlessly scalable. Franchisors usually have a lower operating cost with less overall risk compared to corporate-owned chain restaurant companies.

Closing Thought

Although each owner has their own reasons to franchise a business, these are the key motivators why restaurant owners franchise their concept. However, franchise companies are not without unique challenges. There are numerous other considerations, such as the cost to set up and maintain legal compliance, marketing & the cost of recruiting new franchisees, franchisee relations, and developing a unique skill set as a Franchisor. We’ll cover that other side of franchising in another article.

LEARN ABOUT FRANCHISING YOUR BUSINESS, check out our website: www.franchisegrowthsolutions.com

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 it’s 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 Read Less

3 Ways to Cut Through the ‘Noise’ and Carve a Path to Success

…we’re experiencing stress and anxiety at record levels…resulting in lost productivity, not to mention what it’s doing to the health of our employees, our companies, and our nation.” A recent Harvard Business Review study found a whopping 43% of employees reported struggling with feelings of burnout.

3 Ways to Cut Through the ‘Noise’ and Carve a Path to Success
The Key to Productive Leadership Lies in your Signal-to-Noise Ratio
By Stephen Kohler, Founder & CEO at Audira Labs

As we face an ongoing global pandemic, a cacophonous political landscape in the U.S., and an overwhelming amount of digital overload, most of us are feeling overwhelmed and simply exhausted. Doing our best to juggle everything at once – continuing to lead at work, supporting our families at home, and somehow maintain our own physical & mental well being along the way.
I recently began thinking about this in relation to a parallel concept in the world of music and audio called the “signal-to-noise ratio”. In a musical context, signal-to-noise ratio is a measure that compares the level of a desired audio signal to the level of background noise, usually in the form of decibels.  

In applying this concept to our working world, our current signal-to-noise ratio is extremely poor. Strike that: let’s be honest, it’s awful. If we were music producers making a record, we’d say things sound so bad right now that we need to start over.  

“…we’re experiencing stress and anxiety at record levels…resulting in lost productivity, not to mention what it’s doing to the health of our employees, our companies, and our nation.”
– Stephen Kohler, Audira Labs

The issue? We are experiencing so much noise that we’re experiencing stress and anxiety at record levels. A recent Harvard Business Review study found a whopping 43% of employees reported struggling with feelings of burnout. This is resulting in lost productivity, not to mention what it’s doing to the health of our employees, our companies, and our nation. 
Below are 3 ways to eliminate noise by adjusting your signal-to-noise ratio:

1. Turn up your input signal. 
In a musical setting, when we notice noise, one of the first things we can do is to turn up the primary signal.  For example, this might mean turning up the singer’s microphone, the keyboard, or (gulp) the guitar amp. From a leadership perspective, we can do this by reconnecting to our sense of purpose – be that our individual values, our team’s mission, or our organizational vision.  Simon Sinek famously articulates this in his book, Start with Why.

2. Identify and ruthlessly eliminate the noise
Building on our music metaphor, after we’ve turned up on our input signal, the next thing we can do is to identify sources of extraneous noise. This might include checking for faulty cables, incorrect wiring, or extraneous devices.  From a leadership perspective, this is no different. One of our biggest sources of “noise” as leaders is that of distractions and loss of focus. Strategy guru, Michael Porter, famously stated that the first rule in strategy is to identify what you will not do. We can apply this as leaders from multiple perspectives: Based on my personal values, what will I not tolerate? Given our team’s mission, what must we say “no” to in order to stay on scope, schedule, and budget?  In support of our organization’s vision, what opportunities are we willing to forgo in the short-term to ensure long-term success? 

3. Keep listening & adjusting.
As leaders, one of the biggest traps we can fall into is fear of change. Musicians and producers are constantly listening and optimizing their tone and the overall mix.  We can use this mindset from a leadership perspective and adjust based on what’s happening with our customers, the competition, and overall market. This may mean focusing on different customer segments, new product lines or completely separate geographic markets. The key is to keep listening and identify what’s resonating (working) and what is not.

Keep optimizing your leadership signal-to-noise ratio and don’t be afraid to turn it up to 11. 

ABOUT THE AUTHOR
Stephen Kohler, Founder & CEO at Audira Labs

Stephen Kohler brings passion for people along with 25 years of extensive corporate experience within organizations ranging from startup to Fortune 100, across multiple industries.
His credentials include an MBA from University of Chicago’s Booth School of Business, a BA in Philosophy from Northwestern University, and is a certified Professional Coach (PCC. CPCC) and Balanced Scorecard Professional (BSP).
His passions include spending time with his wife, two children and two dogs. He is a life-long musician, avid BBQ enthusiast and loves traveling the world.

How Your Business Can Survive The Coronavirus

With the Centers for Disease Control and Prevention (CDC) and government officials emphasizing “social distancing and mandatory nonessential business closures,” technology such as live video conferencing, chat boxes, and email will be the basis for millions of Americans for their jobs

How Your Business Can Survive The Coronavirus
By (NewsUSA) – As the world has hit the metaphorical panic button during the rise of Coronavirus (Covid-19) cases worldwide, the daily reality for people and businesses is rapidly changing.

Practically overnight, businesses have been forced out of the comfort zone of face-to-face contact, now having to heavily rely on digital platforms. Businesses, especially, are struggling with figuring out how to survive by using digital communication techniques.

With the Centers for Disease Control and Prevention (CDC) and government officials emphasizing “social distancing and mandatory nonessential business closures,” technology such as live video conferencing, chat boxes, and email will be the basis for millions of Americans for their jobs, schooling, and everyday communication. So, with so many players in the game, how can businesses continue to function successfully?

Higher Images, a 20-year-old full-service digital marketing agency located in Pittsburgh, Pennsylvania, is helping organizations, businesses, and the community re-imagine what their lives and work-life will look like through web-based technology and mobile devices.

President and CEO of Higher Images, Bryan Thornberg, says, “Rather than going into crisis mode, businesses should take this as an opportunity to expand their knowledge and reach. With many more people relying on digital communication, this is an ideal opportunity for businesses to break boundaries and try new techniques when connecting with clients.”

Thornberg and his team want to help people not just survive this crisis but to thrive during it and come out with an organization and business model stronger than ever.

Thornberg has already been able to impact his clients by thinking outside the box and recommending the usage of technology such as live feeds and Facetime.

For example, a hot tub distributor – a business that relies on their retail location for sales – took the recommendation of Thornberg and is now offering live video conferencing for customers to do live demonstrations of products and make purchases.

Higher Images also urges businesses to utilize their existing websites to drive business: for example, adding a chat-box function to their website for customer communication, allowing organizations to respond to clients in real-time from the convenience of a cell phone or office computer from any location in the world.

With higher internet traffic, this is also a key time for organizations to utilize search engine marketing, Google ads, and mobile in-app advertising technology such as Webtracker, which geo-fences homes to enhance brand visibility. Strategizing with a digital marketing company like Higher Images will provide businesses with the tools they need to succeed.

Visit www.howcanmybusinesssurvivethecoronavirus.com for more information.

What You Need to Consider Before Opening Your Own Restaurant

The amount of work it takes to not only survive but also make an impact with a restaurant is massive. According to FSR Magazine, 60 percent of all restaurants fail in the first year. A restaurant that lasts for years takes humility. You must acknowledge daily how bad you are at restauranting, until one day you’re not bad anymore.

What You Need to Consider Before Opening Your Own Restaurant
The following is adapted from Unsliced.
By Mike Bausch

Opening a restaurant is a huge decision—one of the biggest decisions you’ll ever make. It’s hard work, full of risk and failure, and can be disappointing and frustrating. It can also be rewarding and fun, and if you do it correctly, can be profitable.

But you may have a 9-to-5 job right now that brings in steady income. How do you trade that for the uncertainty of the restaurant business? For most people, it’s not a trade they’re willing to make. To know whether you’re one of those people—or the type of person who should try their hand at restaurant ownership—here are few important considerations.

Two Types of People: Which One Are You?
First, look at the two statements below. Which one best fits you?

I am a person who tries hard, and the effort is what counts.
I am a person who likes setting my mind to things and accomplishing them.

At first glance, both seem like positive, motivational statements. But the second statement is actually better because the mindset is results-oriented. You’re focusing on a goal, and just trying hard and giving it an effort isn’t enough.

This means that when things get bad, you enjoy finding a way out of it. I’m pretty sure that being a glutton for punishment isn’t necessarily normal or healthy. However, it’s an essential trait of anyone looking to own their own business—especially a restaurant.

Owning a Restaurant for the Right Reasons
You may have decided to own your own restaurant hoping to become a celebrity chef. Or maybe you just don’t like your job and think owning a restaurant will be fun. If these are your reasons, then forget it. A restaurant is not the answer to your problems. It’s asking for a lot of new problems—problems you’ve never encountered or imagined.

The amount of work it takes to not only survive but also make an impact with a restaurant is massive. According to FSR Magazine, 60 percent of all restaurants fail in the first year. A restaurant that lasts for years takes humility. You must acknowledge daily how bad you are at restauranting, until one day you’re not bad anymore. That’s a lot for the average person to absorb.

Asking Yourself the Big Question
The restaurant life will affect your home life drastically. Restaurants sometimes destroy relationships and consume your mental health and quality of life. This life choice is a gamble—a gamble you might succeed in, in your hope to serve people food in an industry with a meager financial return rate and as I said, an extremely high failure rate.

If you haven’t committed to a restaurant yet, please pause and say this out loud:

“I need this; I need to own a restaurant. I don’t just want to own a restaurant. I absolutely need to do this. This is my calling. I got this, and nothing else will suffice.”

If that statement sounded stupid when you said it out loud, restaurant ownership isn’t for you. If you don’t believe what you said, you aren’t ready to do this. If you’ve never even operated or worked in a restaurant, then don’t assume for a second that you know anything. In fact, your best move is to concede you know nothing so you can be a blank canvas ready for paint.
Make the Best Decision for You

So what’s it going to be? Safety or risk? The same old routine or unpredictability? Don’t feel bad if you choose to opt for that cubicle job. It usually offers a lot less stress and heartbreak than opening your own restaurant. The world needs people in those office chairs.

But if you choose to be a restaurant owner, be ready for a roller coaster ride. Be ready for long days and nights, unexpected changes, and some lean times. But you knew that, or you wouldn’t have made that decision, would you?

For more advice on deciding to open a restaurant, you can find Unsliced on Amazon.

About the Author:
Mike Bausch is an industry leader whose restaurant, Andolini’s Pizzeria, is a top ten pizzeria in the US, as named by TripAdvisor, BuzzFeed, CNN, and USA Today. Andolini’s began in 2005 and has grown to five pizzerias, two gelaterias, two food hall concepts, a food truck, and a fine dining restaurant by 2019. Mike is a World Pizza Champion, a Guinness Book world record holder, and a writer for Pizza Today. Mike is part of a Marine Corps family who has lived across America from New York to California. Mike calls Tulsa home and lives with his wife, Michelle, and son, Henry.

Restaurant Marketing for the Upcoming 2021 Recovery

Restaurant owners are infamous for being callous with their marketing decisions, this is partly because the research process in the restaurant industry itself can be quite tricky. Gathering insightful data within a small or slightly larger community will be tricky as it is. This is precisely where digital surveys, restaurant management software, etc play a huge role.

MARKETING YOUR RESTAURANT THROUGH 2020-’21
Business Articles | November 19, 2020
BY KEVIN JOSEPH

Although it may seem rather glamorous at first glance, starting a restaurant is no easy feat. In fact, the restaurant & food business, in general, is one that is extremely time-consuming, high overheads, razor-thin margins & a manager’s nightmare.

But, it is also one that is central to our society and the eating-out culture in every country is the cornerstone of its culinary heritage. This is precisely why, especially during the light of the lockdowns, restaurants, in particular, are facing a very uncertain & grim future which, if left unchecked, can turn into a disaster for the industry.

There are a few things that we as consumers can do in order to help the restaurant industry and the entire hospitality industry in general, but more than anything else, this post is aimed at a few marketing strategies that restaurants can easily adopt.

1. Understanding Their Audience

Restaurant owners are infamous for being callous with their marketing decisions, this is partly because the research process in the restaurant industry itself can be quite tricky. Gathering insightful data within a small or slightly larger community will be tricky as it is. This is precisely where digital surveys, restaurant management software, etc play a huge role.

But more than anything that a machine can do, understanding what the consumers themselves experience while at the restaurant is something priceless in itself. For this, employees & busboys must be trained to ask the right questions and keep an eye out for understanding the consumer experience.

This practice is so conspicuous in its absence that several suppliers & marketing companies for restaurants have taken birth for a study that would probably best be done by the restaurant owner himself. For Instance: folks over at FurnitureRoots, a Jodhpur based manufacturer of restaurant furniture, on several occasions has recommended styling themes depending on the clientele. For a clientele that largely comprises of the youth, industrial style furniture happens to be the best option.

You may visit FurnitureRoots at Plot No 58/2, Jodhpur-Pali Highway, Sangariya, Basni Baghelao, Jodhpur, Rajasthan. 342013

Rustic style furniture is another great option for restaurants that see customers visit with their families.

2. Adapt With The Changing Times

Most non-western countries have more or less been out of the eating out trend in the past. However, many countries have seen a drastic change in this trend. Countries like India are at the forefront of these shifts in trends.

Several cafes in India have seen a rise in environmentally friendly themes. Cognizant of this fact, Prithvi Cafe in Bombay began manifesting an eco-friendly establishment replete with cups and saucers made with disposable leaves, 4 different cans for recycling different types of materials & of course, greenery all around the place.

Naturally, Prithvi Cafe did understand its market’s shifting needs and adapted to it accordingly.

3. Spatial Strategies

These happen to be the strategies that are short term in nature (hoping the pandemic won’t be around for long).

Spatial strategies during these times are to ensure that the image of the restaurant reflects trustworthiness and safety. Although this does involve a bit of mental, time & a minor cost investment, it will forever instill a sense of trust among the local & regular customers.

Spatial strategies are the ones that aim to maximize the seating area while ensuring the social distancing norms for restaurants are maintained and are intact as well. This can also include moving to temporary outdoor seating as has been advocated by several governments across the world to curb the spread of the virus.

4. Go Digital

I bet most of you must be tired of hearing this every now and then but the fact remains that the digital landscape is no longer some sort of a novel initiative that one must undertake. It has become the staple of a business and several businesses are almost exclusively reliant on their digital strategies.

For restaurants, however, this does not mean simply enlisting themselves on food aggregating platforms. Several restaurants suffer from a lack of long term thinking, they fail to realize that the aggregating platforms own the customers and not the restaurants themselves.

Making an app or a website nowadays has become a complete breeze & it is also a sound business practice. Small wonder that Dominos, Burger KindHealth Fitness Articles, Mcdonalds have all invested heavily on their own platform to ensure loyal customers don’t have to purchase from them via a third party.

This is no less true for any other restaurant.

We hope all businesses in hospitality a speedy recovery after this dreaded misfortune of a virus.

Stay Safe!

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR

Kevin is the Marketing & Content Lead at FurnitureRoots.com, a hospitality furniture manufacturer, supplier & wholesaler

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Franchise, Restaurant, Profit
Franchise Your Business Here: www.franchisegrowthsolutions.com

INVESTING IN PUBLICLY HELD RESTAURANT COMPANIES – WHAT DID THE PANDEMIC TEACH US?

These days, investors are more typically ETFs which have to own broad swaths of particular industries, as well as institutions that are fighting for day to day performance. The result is that all stocks within an industry have a strong tendency to move together, and it takes a long time for fundamentals to prevail.

INVESTING IN PUBLICLY HELD RESTAURANT COMPANIES – WHAT DID THE PANDEMIC TEACH US?
By Roger Lipton restaurant, COVID-19, Roger Lipton, Franchise Money Maker

The dust is beginning to settle, especially with a vaccine now in view. The stocks within the restaurant industry made a huge move on Monday, going a long way to recovering from the severe decline that started at the end of February. We are comparing prices from before the pandemic to the current prices. We published a chart on October 22nd that attempted to compare the current valuations (relative to reasonable expectations) to those before the pandemic began. That exercise revealed some interesting “inefficiencies” in terms of valuations. Shake Shack screamed “overvaluation” so we wrote first about that Company. Of course, it stands to reason that the apparently most overvalued situation would make one of the largest upward moves in today’s news about a possible vaccine. Thank goodness we are not short this volatile situation, which our experience has taught us is a nerve wracking exericise in a Federal Reserve supported easy money environment.

Before we get into a broader discussion of the last seven or eight months, there’s a lesson to be learned by a conversation we had with one of our money managing friends. Back on April 30th, he asked for our suggestion as to a “paired trade” in the restaurant industry. You know… one name that was well positioned and would outperform on the upside, paired with the short sale of a weaker company that would not do as well. The theory, which fifty years ago spawned today’s multi-trillion dollar hedge fund industry, is that equal amounts invested in well chosen offsetting positions would be market neutral yet hopefully outperform the general market over time. It stands to reason, of course, that the stock price will follow the fundamental performance over time, and the good companies will fundamentally do better than the weaker participants. Ideally the long position will go up and the short position will go down, profiting on both sides in a neutral market. That was often the case decades ago, when stock ownership was more broadly spread among individuals and institutions who were picking Individual stocks. These days, investors are more typically ETFs which have to own broad swaths of particular industries, as well as institutions that are fighting for day to day performance. The result is that all stocks within an industry have a strong tendency to move together, and it takes a long time for fundamentals to prevail. Adding to this “inefficiency” is that multi-billion dollar hedge funds maintain large short positions, managed with a hair trigger to limit losses if even short term news is announced. That’s why on a day like Monday when the general stock market makes a really big move, the stocks with the largest short positions go up the most, whether the specific fundamentals justify that price action or not. We could go on….but suffice to say that short term trading has become very difficult in recent years.

As an illustration: relative to the request for a couple of paired trades back in April, after we suggested that this approach has become pretty difficult, we provided a couple of apparently compelling suggestions. We paired the highly respected Darden (DRI) on the long side with the enormously challenged Dave & Buster’s (PLAY) as a compensating short. Surely DRI would outperform PLAY, especially with the predictable health concerns of the public, even after the worst of the pandemic. The chart below shows in retrospect that by 4/30 PLAY, which had declined by 68% between 2/14 and 4/30, was already “oversold”. The profit in Darden (62%) from 4/30 to 11/9 (today) was almost exactly equal to the loss (60%) on the PLAY short. So that trade hasn’t worked yet. It is worth noting that PLAY would have worked well from 2/14 (before the pandemic) to 11/9 (45% profit), against a 2% loss in DRI, but it was already too late by 4/30.

The second presumably intelligent paired trade I suggested on 4/30 was to go long Starbucks (SBUX) along with a short sale of Shake Shack (SHAK). Who could argue with a worldwide brand selling an addictive product (with major growth ahead in China), offset by the short sale of a ridiculously valued hamburger chain whose business model couldn’t be designed more poorly to cope with a pandemic. SHAK had no drive-thrus, high rents, resort locations, city locations inhibited, etc.etc. You can foresee the result. Between 4/30 and 11/9, an investor would have made 26% on his long SBUX position, and lost 51% on the SHAK short. Even from pre-pandemic 2/14 until 11/9, right through the pandemic, SBUX gained 9%, but the SHAK short lost 14%. Every time we write about SHAK, we emphasize our respect for their management, but they are not magicians, and the store level culture cannot force customers to come to the mall or bring NYC stores back to the $7M level of a few years ago.

So…be careful “trading” out there.

On a broader level, we tabulated, as shown below, the price changes among the “darlings” of the institutional investing set, the asset light, free cash flow pursuing pure franchising companies. Without the operating “risk” of running restaurants, they can leverage up their balance sheets to 5-6x trailing EBITDA in a historically low interest rate environment, often with the intent of declaring special dividends to shareholders.

The chart below shows that the ten fairly pure franchising restaurant companies declined by a relatively modest 12% from 2/14 to 4/30. The average was helped quite a bit by Domino’s, Papa John’s and Wingstop which had the twin benefit of delivery and pure franchising. Even eliminating those three names, the seven remaining companies were down 24%, a lot less than the 37% decline shown by the company operated restaurant chains shown below. The franchising companies rebounded 23% between 4/30 and 11/9, more than recouping the worst of the pandemic, and showing a 6% gain through the cycle.

The chains that are primarily operating company stores, with all the operating challenges, have fared worse, also shown below. The stocks were down as a group by 37% by 4/30, recovered 48% by 11/9 and were down 8% through the cycle.

CONCLUSION:

Avoid “paired trades” on a short term basis. It’s just too tough.

For longer term investing, we too, in this environment would favor the pure franchisors, in general, even at their high multiples of earnings and cash flow, and historically high debt/EBITDA levels. We don’t see anything on the economic horizon that will reduce the availability of low interest rate financing. The operating challenges for those companies with company stores are not going away. It’s of course true that franchisors cannot prosper unless their franchisees are doing well, and franchisors will likely have to do more than in the past to support their franchisees but they can borrow at low rates and could even pass through part of that low cost capital to their franchisees.

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 to the left) .

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

Tips on How a Franchise Brand Can Become a Top-Performer in the Franchising Industry

How a Franchise Brand Can Become a Top-Performer

By Ed Teixeira.
VP Franchise Development FranchiseGrade.com , Author, Franchise Expert, MA Economics, Industry Partner of Stony Brook University Center of Entrepreneurial Finance, Pace University Lubin School of Business Advisory Board

For a franchise brand to become a top performer, franchisors must adhere to certain operating principles. One of the most important ones is to grow the number of franchise locations to promote the franchise brand. In the case of certain well-known franchise brands, system size alone doesn’t always convert to a top performing franchise brand.

Franchisors that want their franchise to be recognized as a top brand need to follow a set of building blocks that can serve as the foundation for a successful franchise system. Utilizing these building blocks will strengthen the franchise program, provide its franchisees the best opportunity for financial success and help establish the franchise brand as a top performer.

1. Equitable franchisee ROI must be a priority

The foundation of the franchise program operationally and financially must provide franchisees an opportunity for success that does not require extraordinary performance. If franchisees follow the franchise program and do not earn an ROI commensurate with their original investment, then the franchise may be flawed.

2. If the franchise program is flawed, then it must be fixed

Franchisors should adjust a franchise program that isn’t “working.” There is no reason why a royalty or advertising fund contribution can’t be changed. If certain products or services aren’t successful, then find alternatives. Conduct franchisee surveys to measure franchisee satisfaction levels.

3. The franchisor must control the franchise sales process and adhere to its ideal franchisee profile

Establish a franchisee profile and if franchise candidates don’t fit this profile say no! If the franchisor utilizes brokers, the franchisor must maintain control over the franchise sales process.

4. Be transparent with prospective franchisees

Provide prospective franchisees full disclosure about the franchise opportunity and what’s needed to be successful. The franchisor sales staff should act as more consultant and less salesperson.

5. Franchisor leadership must be engaged in the franchise operation

Franchisor leadership should be accessible and involved in the franchise operation, so they are aware of franchise system performance. There shouldn’t be surprises when it comes to franchisee performance.

6. Franchisee input should be solicited for important operational and marketing strategies

Significant changes or alterations to franchise operations and marketing, should involve the franchisees. This can be done using the FAC, advertising committee or other representative body.

7. New products and services should be evaluated and measured by franchisees before introduction

The franchisor should test new products, services or equipment in representative franchisee locations before introducing them. This process leads to objective and credible results that will earn the franchisees buy-in.

8. Obtain financial results from franchisees on a regular basis

Use franchisee financial statements to identify individual and collective franchisee performance. A lack of important financial information prevents a franchisor from knowing which franchisees are profitable and which are not.

9. Uphold and protect the integrity and standards of the franchise program

It’s critical that the franchisor uphold the standards of the franchise. The franchisees that follow the program deserve it and the customers that use the product or services provided by the franchisees are entitled to consistency. Franchisors that don’t protect the brand are not respected by their franchisees.

10. Invest in franchisee training and support

Top notch franchisors have viable and effective training programs. Training and support don’t end with start-up franchisee training but should be a continuing activity. When franchisor staff identifies weaknesses in the execution of franchisee operational practices the Training Department should implement programs to address these problems.

To build a top- performing franchise program franchisors can use these 10 building blocks, which requires implementing policies, practices and procedures to improve franchisee performance and success.
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Learn more about the author and Franchise Grade:
Ed Teixeira.
VP Franchise Development FranchiseGrade.com , Author, Franchise Expert, MA Economics, Industry Partner of Stony Brook University Center of Entrepreneurial Finance, Pace University Lubin School of Business Advisory Board