What Does It Take to Launch a Successful Restaurant?

It could be a Wine Bar with small plates, or a BBQ theme or a Create Your Plate concept. Whatever you decide, it is critical that the environment and “vibe” within the restaurant places the guest firmly inside the experience you’re attempting to create. Don’t confuse the guest with a concept that’s disconnected. As I often remind my clients, “everything touches everything else.”

BY GARY OCCHIOGROSSO – FOUNDER OF FRANCHISE GROWTH SOLUTIONS.

Tripwires to avoid – Desire and passion will only get you so far. Create your business plan as a road map.

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

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

Let’s start with a concept

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

If You Build It, Will They Come?

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

Your People Plan is Key

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

The Market and Competition

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

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

Consistently Great Food

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

Cash Is King

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

Have A Plan And Follow Your Dream

Owning a restaurant can be personally rewarding and profitable. Many people have built great restaurant companies following these simple guidelines. Desire and passion will only get you so far. Create your business plan as a road map. Your plan will help you stay on track when dealing with the many moving parts of launching and successfully operating a new restaurant.

For information on hiring the right restaurant consultant to help you get started visit: www.franchisegrowthsolutions.com

The Growing Appetite That’s Fueling Acai Express’ Success

ACAI EXPRESS A HEALTHY AND DELICIOUS FRANCHISE…While food fads come and go, real trends that point to major shifts in attitudes and behaviors are invaluable cues for entrepreneurs looking for emerging and sustainable business opportunities. “Consumer Trends in Health and Wellness”, published in Forbes magazine reveals “the “new healthy” is a consumer journey of contradiction and discovery: Progressive health and wellness consumers are seeking alternatives to fear-based information, a phenomenon that has been driving wellness views for decades.

(They) are paving the way, sharing their enthusiasm and knowledge with mainstream consumers who are hungry for guidance and direction. As shoppers, progressives are no longer thinking about condition management (lowering cholesterol or blood pressure) or dieting (low fat, low carb) but are focused on real quality food, positive nutrition, fresh, less processed foods, and beverages and fun.” Translation: there is a growing wave of consumers — particularly among Gen Xers and Millennials — who are looking for a change in wholesome eating and are prime targets for the Acai Express experience and a healthy lifestyle brand. Entrepreneur, Hector Westerband, founder of Acai Express, has developed his low entry cost franchise concept to meet the cultural lifestyle change that is underway. With three flexible footprints: brick and mortar venues, trailers and food trucks — and a menu featuring new health-rich options — acai berry and pitaya bowls, smoothies and natural juices — he offers solutions to consumers and franchise owners alike.

Mind and body-pleasing bites, sips, and slurps.
Acai Express’ eye-pleasing colorful bowl menu is an Instagram worthy meal option that satisfies customers with 100% organic acai berries and pitaya, fresh fruit, berries, nuts, grains and an array of toppings. A wholesome smoothie with innovative combinations serves as a convenient, meal-in-a-cup breakfast or anytime boost that helps customers power through an energy lag. Healthy natural juices, recognized for the nutritional value: vitamins, minerals, and antioxidants, make upping the daily fruit and veggie consumption an easy and nutritious choice for active people on the go. Good health to go! Speed and portability rank high in the fast service world. The quick serve model and totally portable menu of an Acai Express franchise are very accessible in this hurry-up world. With franchise opportunities in protected territories now available, finding a healthy meal, snack or meal supplement need not be time-consuming or inconvenient whether home is near the beaches in Puerto Rico or suburban Rockaway, New Jersey.

Too good to pass up!
Given that the average American eats out between 4 and 5 times a week and can choose from hundreds of fast-casual options, it’s significant that Acai Express franchisees report an enviable frequency of visits rates of 2 to 3 times a week. The taste and experience are memorable and consumers are returning to again and again. That’s healthy for the bottom line as well. As consumers of all ages become increasingly aware of the need for healthy and delicious alternatives to the high-fat, high-sodium, high-calorie foods that have dominated the menu of traditional fast-food giants, the small, more nimble quick-service entrepreneur can respond quickly to changing tastes with something new, refreshing and healthy that doesn’t look or taste like the health food of early days. This creates exciting and profitable opportunities for franchisees to be among the pioneers in the healthy lifestyle revolution while enjoying the reassurance of a proven model like Acai Express.

To claim your franchise territory please visit: www.acaiexpressfranchise.com

It Takes A Village To Build A Great Burger

BURGER VILLAGE,  A STORY OF PASSION…With over 15 years of experience in food industry and restaurant management, Burger Village is a dream concept and creation of four Long Islander brothers – Sam, Nick, Vick & Ravi. They have also owned QSRs and full service restaurant in the past; and due to their expansive individual experiences each of them has their unique contribution to Burger Village such as operations, cooking skills, recipes, management, marketing and service which overall provides customers with a qualitative dining experience.

By keeping in mind the need to eat healthy with busy lifestyles of today gave us an idea which finally came up as Burger Village where everyone can eat healthy organic meals alongside a great customer service. Burger Village opened its first location in Great Neck, NY in 2013. Customers loved us there and with their immense love and appreciation, Burger Village opened up their second location in Park slope, Brooklyn in 2014. Burger village believes in serving the best of the best so our patrons recognize what Burger Village values are.

Eat Organic, Live Healthy
We strive to serve organic, all natural, antibiotics and hormone free products in form of juicy burgers, fresh hand cut fries, salads, soups, shakes and other beverages along with delicious Desserts. We believe that Organic is sustainable and will always be. It does not only benefit the consumer but it is also helpful for the environment. Our products do not come from a factory, they come from farms and dairies that are mostly family owned and operated. The livestock and produces are nourished and cared for in a natural and humane way. They are pasture raised and cage-free rather than confined spaces. It’s delectable, nutritious and ecological and promotes our farmer families.

Food with style
A patty with cheese in between a bun was the beginning of burger era and it has been through many levels and phases. Here at Burger Village, we garnish each of our burgers with its own recommended signature pair. Pick a signature pair or have it the way you want with a variety of bread, cheese and veggies. Burger village pays great attention to a customer’s wellbeing, and by keeping that in mind we have Gluten free, Peanut free and Vegan choices.

Delectable organic grass-fed Beef, cage free organic chicken and turkey, exotic meats like bison, elk, wild boar & lamb are offered on the menu. Tasteful organic veggie, black bean & mushroom patties are kept especially for our Un-meat lovers.

Our bowls of salad are loaded with fresh produce without the harmful pesticides and herbicides. Think about hot aromatic organic soup with healthful and nutritious ingredients. Yummm… Our fresh cut fries, onion rings, chicken tenders, wings and are made in Rykoff Sexton rice bran oil which is Trans fat and GMO free.

An assortment of handcrafted organic sodas and organic milk shakes made with organic fruits can be a great companion to meals offered. A great variety of beer and wine suited to individual taste. Sweet and delicious delicacies comes in form of desserts.

Burger Village believes in Farm to Fork and that is why we work with our farmer families to provide our customer with best quality food which is grown and produced in actual fields or farms. We are a 100% family owned and operated and treat our clientele as a family. We believe that health is an asset that we can choose for ourselves and pass it on to our future generation.

To build your own Burger Village please visit: www.burgervillagefranchise.com

TOP 10 REASONS TO INVEST IN RIKO’S NOW!

RIKO’S THIN CRUST PIZZA…Franchise opportunities abound in every business category, but entrepreneurs interested in the fast-casual space, and pizza, in particular, should have Riko’s Pizza on their radar as a brand poised for growth and success with ground floor opportunities for franchisees.

1. Pizza is a $50.7 billion dollar*1 American passion
The pizza industry was designated as the fastest-growing segment of fast-casual restaurants in 2017.*2 A Riko’s franchisee buys into a growth business with high consumer demand and a track record of solid growth year-after-year. The opportunity to bring America’s favorite comfort food to a franchisee’s local market ranks high among Riko’s attributes as a new franchisor in this extremely, profitable business category.

2. A proven business concept
The Riko’s business model has been refined over a 7-year period prior to expanding into franchise offerings. Riko’s founders have continually tried and revised products, systems, and operations as they evolved into a turnkey operation. Those hard-earned systems are passed to franchisees as easy-to-follow, foolproof guidelines for consistent results. The simplicity and ease of operations hold opportunity for owners with or without previous restaurant business experience.

3. Flexibility for Franchisees
Franchisees can choose from a flexible footprint that suits urban or suburban venues. The flexible business model is designed to work and succeed in any space. Riko’s fast-casual operation features take-out, dine in and delivery. Riko’s full-service casual restaurant features a family dining experience with a full bar and table service. Owners can purchase single units or multi-unit options that are commensurate with their experience and finances.

4. Multiple revenue streams
Diverse revenue streams including lunch, dinner, and late-night business with takeout, delivery, and fast casual dine in and full-service restaurant and bar options, gift cards and rewards programs offer multiple growth opportunities within a franchise.

5. Quality, quality, quality
Attention to details has made quality a hallmark of Riko’s brand. High-quality ingredients — nothing artificial — proven recipes, simplified menu, first-rate equipment, comfortable, contemporary venue design, staff training ensure business growth and a consistent brand image. Entrepreneurs are buying into a brand associated with quality at every level.

6. Streamlined, state-of-the-art business operating model
Riko’s has set standards and developed systems that are easy to follow and easy to replicate over and over. Pizza franchisees can produce consistent, great results. Both franchisees and their future customers are assured of the quality food and service that launched Riko ’s original success in three Connecticut locations. Pizza franchisees are armed with the tools and knowledge to produce consistent, great results. Riko’s is a turn-key business model that works across all processes. The goal: keep things simple and do them the best they can be done.

7. Traditional family values that resonate with consumers
Riko’s core philosophy: respecting family, serving great simple food with a family-friendly ambiance, offers an appealing alternative in an ultra-fast food world. The Riko’s guest experience is warm and casual, fast without being harried. It’s a comforting experience that engenders customer loyalty and on-going, multi-generational business.

8. Comprehensive training & support
A good franchise offering includes support and training . That’s why Riko’s consulted and hired industry experts to develop a first-class training program. A five to six-week long training program — with modules at the company modern training center and owner’s location — takes franchise owners through all phases of the business; covering all the components necessary to effectively and efficiently manage a Riko’s Franchise business. A full suite of manuals provides on-going reference and instruction for owners.

9. Owners with passion
As a franchisor with a passion for growth and quality, Riko’s future is guided by passionate, involved owners with a hands-on approach to day-to-day business as well as an eye on long-term growth strategies. The active 360º business outlook ensures Riko’s is prepared to adapt, adjust, and seize new opportunities as they arise. The formula is set, but it’s constantly fine-tuned for success.

10. Community-centric focus
The success of the Riko’s original locations is grounded in community involvement. Riko’s mission in all franchise venues is to be part of local family life. Franchisees are trained to be local in their location and engage in sponsoring local youth sports teams, supporting school events, donating pizza to community events and more as a means to building relationships and thanking customers for their loyalty.

For more information please visit: www.rikosfranchise.com

Getting New Franchisees Off to a Great Start

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

 

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

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

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

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

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

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

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

Creating Sensible Employee Policies When Building Your Company

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

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

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

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

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

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

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

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

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

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

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

Franchise Marketing – Do’s & Don’ts

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

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

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

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

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

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

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

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

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

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

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

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

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

Lead Generation – Lifeblood of Franchise Sales

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

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

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

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

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

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

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

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

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

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

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

6 Tips When Buying A Franchise

Starting a business can be a life-altering event both good and sometimes not so good. One of the ways people reduce their risk is to purchase an established brand with a proven business model – a franchise.

Franchising has proved over and over again to give a new business owner the highest probability of success. If you follow the system, choose an experienced franchisor, work diligently, are appropriately funded and understand what you’re getting into then operating a franchise may be a perfect business model for you.

Selecting a franchise and purchasing a franchise combines gut reaction with solid research. Although there are many steps to buying a franchise here are my Top 6 Tips that will keep you moving forward in the process. I recommend never skipping or overlooking any of them.

Tip #1 – Begin With Some Soul Searching
Make a written list of what you believe you’re looking for in a business opportunity. However, for this exercise, you cannot put the words “make money” on your written list. The reason for that is simple. I want you to look inward at your dreams, background, hobbies, likes, dislikes, skills, social and community positions and all the elements that a business would need to deliver to you, despite the money. I know many franchisees and entrepreneurs that dread getting up every day to work their business even though are making all sorts of money. Franchisees that are great at selling or corporate engagement should seek a franchise that puts them in front of customers in a corporate environment, perhaps in the advertising business or financial business. Entrepreneurs that like to craft things or work outside or work with their hands should never seek out opportunities that land them behind a desk or stuck in a shop 12 hours a day. Although ultimately in time you will not be doing the “work of business” keep in mind that in the startup phase you may need to. Moreover, if you don’t like the work or have neither the time, desire or inclination to develop new skills you may never get to the next level in developing your business. If you can’t “see yourself” doing a particular type of work, then walk away, no matter how much money you think you’ll make. Look in the mirror and be honest when you sit down to write your list.

Tip #2 – How Much Available Capital Do I have?
Numerous business reports cite the number one reason a small business fails is that proper thought and consideration wasn’t given to the appropriate capital required to open and sustain the start-up of a small business. A lack of adequate money can destroy you before you even begin. It is crucial that you understand the numbers. Before you start your quest for a franchise, you should access your available liquid capital, your borrowing ability and the net worth necessary to collateralize a business loan. Also, there are various ways to finance your new business. That includes your savings, investments or loans from friends and family, bank loans, SBA loans and using the funds in your 401K to finance the new venture. Once you know the number, you can go shopping, or you may decide you don’t have enough money now and need to create a plan to accumulate the appropriate amount of start-up capital. Your accountant may be able to help you access your investment ability. Keep in mind many accountants (and lawyers) are not entrepreneurial minded or risk takers. Some will attempt to “protect you” by trying to convince you not to go into business. Remember you’re assessing your investing capability not looking for permission. That said, knowing how much you can invest will save you and the franchisor time. In addition, it’ll place you in a better position to succeed.

Tip #3 – Meet The “Parents”
In this case, the Franchisor. Once you’ve selected the type of industry you’d like to be in, its’ now time to search for a company that meets the criteria on the list we discussed earlier in this article. There are many ways to seek out opportunities, Franchise Trade Shows, Websites, Franchise Business Brokers and others. I’ll cover that in a subsequent article. Once you reach out to a franchisor, a franchise sales representative will most likely contact you. At this point be prepared to answer some questions over the phone. You may also be asked to fill out an application before going any further in the process. Many reputable franchisors will not engage in any serious conversation with a candidate without an application. My experience has been that franchisors willing to forgo written applications or skip asking qualifying questions at the start of the process may be desperate to “sell” a franchise. That should be a red flag for you. Beware, because it may be a sign the franchisor is undercapitalized and/or more interested in selling franchises and collecting licensing fees instead of supporting the franchisees long term by focusing on royalties from successful franchised locations.

Tip #4 – Take A Good Hard Look At All The Documentation
Once you fill out the application, the franchisor will most likely interview you over the phone or in person and then is required to issue you a Franchise Disclosure Document (FDD). Depending on the State where you live, you must have the FDD between 10 and 14 days before you can enter into any agreement or hand over any money to the franchisor. You will be asked to sign a receipt that you received the FDD and indicate the date you received it. This disclosure document has all the required information that the Federal Trade Commission (FTC) and various States require the franchisor to tell you. Please read it and reread it. Have a franchise attorney review the document and offer legal counsel regarding the franchise agreement. Then follow up with the franchisor. I would recommend that if you’re interested in moving forward, it’s now time to meet the franchisor in person (if you haven’t already) by scheduling a Discovery Day. Make a list of questions and spend the day to meet the team and get answers as well as a feel for the culture of the organization. Find out how deep the franchisor’s organization is and, please make sure you feel comfortable that the franchisor has enough experienced staff to service the franchisees.

Tip #5 – Speak With The Franchisees
Your best source of information is going to come from the franchisors customers, that means the franchisees. Call and visit as many franchisees as possible. Since many Franchisors don’t disclose Average Unit Sales and Operating Expenses in their FDD, they can not discuss it with you. Franchisors can only make claims and address financial issues published in their FDD. Be wary of the sales rep that starts telling you how much money the franchisees are making and how much money you can make. This practice of making “earning claims” not documented in the FDD is not only a violation of franchise regulation but also another red flag. However franchisees are not bound by franchise regulation and if they choose, are free to answer any question as long as they do not disclose proprietary information belonging to the franchisor, such as recipes or processes. When visiting the franchisees, build a report, let them know you’re close to making a decision and carefully phrase your questions so that they are not intrusive. I always ask about support and if they had the opportunity to “do it all over again” would they? Keep in mind there will always be a few disgruntled or struggling franchisees. Without knowing all the facts, it’s tough to condemn the system or franchisor. That said, if the majority of franchisees regret their decision or feel that the franchisor is not supportive, then you need to make further inquiries with the franchisor before signing the franchise agreement.

Tip #6 – Ready, Set, Go
Not so fast. Before the franchisor prepares a franchise agreement is it essential to discuss the best way to structure your new company. Many attornies will recommend that you not sign the franchise agreement in your name but instead set up a separate business entity such as a Limited Liability Company (LLC) or an S-Corp. Seek competent legal advice from a franchise attorney before you sign a franchise agreement or set up a new company.

Franchise ownership can provide you and your family a lifestyle that can not be achieved by working a job for a company. Building a business can be rewarding, exciting and stressful all at the same time. As an entrepreneur, I believe business ownership is the best form of work for many people.

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Photo by rawpixel on Unsplash

About the Author
Gary Occhiogrosso is the Founder of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm. Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, advertising, selling franchises and guiding franchisors in raising growth capital. Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program with its founders. He is the former President of TRUFOODS, LLC a multi-brand franchisor and former COO of Desert Moon Fresh Mexican Grille. He advises several emerging and growth brands in the franchise industry. Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine and named “Top 50 CXO’s” by SmartCEO Magazine. In addition, Gary is an adjunct instructor at New York University on the topics of Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales, and Marketing. He was also the host of the “Small Business & Franchise Show” broadcast over AM970 in New York City and the founder of FranchiseMoneyMaker.com

Six Ways to Finance a Restaurant Franchise

Six Ways to Finance a Restaurant Food Franchise…

Before seeking financing of any kind, make sure you’ve done your own due diligence. Prior to beginning your search, it’s important to know your own net worth, your credit rating, and to have a comprehensive business plan that includes pro forma documents, operations details and market comparison analysis.

Six Ways to Finance a Restaurant Food Franchise

If you are considering investing in a franchise opportunity, the very first question that may come to mind is whether you qualify financially. Most entrepreneurs, restaurant aficionados, or business executives exploring opportunities for a restaurant food franchise will seek outside sources of financing. The golden rule is to expect to contribute 15% to 30% of your own money to start with, and then go from there.

If 30% seems daunting, there’s good news. Often a franchise business opportunity is looked upon by financial institutions as less of a risk, compared to independent business start-ups. This can be further reinforced by the history and recognition of the brand name, the number of units in operation, and even the support provided to the franchisee by the franchisor.

Before seeking financing of any kind, make sure you’ve done your own due diligence. Prior to beginning your search, it’s important to know your own net worth, your credit rating, and to have a comprehensive business plan that includes pro forma documents, operations details and market comparison analysis.

Franchise financing can be complex, but it doesn’t have to feel impossible. Consider these six ways to finance a restaurant food franchise like Taboonette.

1. Friends and family, as well as experienced business owners,d business owners turn inwardly toward friends and relatives to help finance their franchise or start-up business. With this kind of financing, individuals and families get to create their own terms for repayment and enjoy the collaborative support from those closest to them.

2.SBA loans.
The Small Business Administration is a government agency that helps entrepreneurs plan, launch, manage and grow their businesses.1 They work with financial institutions to provide SBA-secured loans. A lender may be more likely to approve financing for individuals backed by an SBA loan because it is 90% secured. This means if the loan goes into default, the SBA guarantees repayment of 90% of the loan to the lending institution.

3.Bank and private loans.
Since the 2008 recession, it has been more difficult to secure bank loans or loans from venture capitalists or angel investors. A bank loan not secured by the SBA is perhaps the most challenging to obtain, but if you have a good relationship with a financial institution, a stellar credit rating and the required minimum liquid capital, it may be a good option.

4.Veterans loan.
The Department of Veterans Affairs, another government institution, offers qualified veterans financing opportunities for franchise and business loans. The program, called the Patriot Express because of its speedy process, makes loans up to $500,000 to active-duty military preparing to transition to civilian life, as well as to spouses and survivors of veterans. The loans come with the SBA’s lowest rates.2

5.Home equity.
A home equity line of credit or second mortgage is a way of obtaining financing but comes with a personal risk. Financing in this way uses your home as security. This means if you default on a business loan, you lose your home. But with sufficient equity in your home, it can be a relatively easy financing source to tap.

6.401(k), stocks and other personal accounts.
It is not unusual for people to tap into their retirement or savings accounts to help finance business ventures. In an interview with the Wall Street Journal, Bernie Siegel, founder of Siegel Capital LLC, discusses a rollover plan where the franchisee creates a C corporation that will own and operate the new franchise business. That corporation then creates its 401(k)-retirement plan. The C corporation’s 401(k) plan then purchases stock in the C corporation. The cash paid to the corporation is then used as the down payment, and the balance can then be financed through an SBA guaranteed loan.3

At Taboonette, we are excited to work with financially qualified individuals to help them reach their goal of owning a restaurant food franchise. Together we look forward to growing both our Taboonette franchisee and customer bases and bringing our delicious trademark Middleterranean® food and a unique dining experience to more hungry guests.

For franchise information contact [email protected] . “Offer by Prospectus only”

1.https://www.sba.gov/
2. http://guides.wsj.com/small-business/franchising/how-to-finance-a-franchise-purchase/
3.https://www.wsj.com/articles/SB120242422031851929