SIX TECH TRENDS IN THE RESTAURANT INDUSTRY BORNE OUT OF THE PANDEMIC

Posted on June 18, 2022 by Franchise Strategist

SIX TECH TRENDS IN THE RESTAURANT INDUSTRY BORNE OUT OF THE PANDEMIC
By: Gary Occhiogrosso – Managing Partner Franchise Growth Solutions, LLC.

As a New Yorker in the restaurant and franchise business, I’ve seen the industry go through difficult times over the last two years. From total closure to outdoor dining in the wintertime to mandated “proof of vaccination” rules imposed on citizens. Some moves made by the restaurant industry in response to the pandemic and the government orders resulted in numerous changes.

From an optimistic viewpoint, there have been innovative changes that will remain in place. The good news is we are nearing the end of the pandemic and learning to live in a mostly vaccinated society as guest are returning to restaurants in droves. One of the more forward thinking initiatives is the restaurant industry’s embrace of technology in a way that many restaurateurs had not considered or even shunned before the global pandemic. There is no doubt the COVID-19 pandemic forced many industries to shift to digital mode. The restaurant industry is no exception as it steered toward the use of technology by introducing digital menus and online ordering options to keep its business alive, just to name a few.

Technology and innovation have helped and in some instances saved restaurants as they changed their way of thinking about the overall guest experience. Many thrived by staying connecting and engaged with their customers with this new worldwide operating model and mindset. Everything from online orders to self-checkout, contactless payment methods, and home delivery, the restaurant industry could not afford to ignore the latest trends set in the food industry if they were to remain relevant and competitive.

Here are six tech trends in the restaurant industry borne out of the pandemic. I believe they are here to stay:

Online Ordering
Before the pandemic hit the world, many restaurants were waiting for the right time to introduce online ordering options for their customers. However, the strict lockdown forced the restaurant industry across the globe to close their cafes, QSR’s as well as dine-in services and shift to the digital medium of ordering, payment adn pick-up.

Many online platforms helped the restaurant industry to continue their business by collaborating with them. A study reveals that almost one in three Americans use online food ordering systems once a week. They introduced digital menus for the customers to check what the restaurants are offering.

Contactless Payment
Another mainstream trend in the food industry is contactless payment. It is not only about placing online orders but also about receiving payments through smartcards, smartphones, and smartwatches. Contactless payment originally gained momentum slowly with the global food industry. However, the pandemic gave it a big push to accelerate the concept industry wide.

Ready Contactless Dining
Logo for Ready Contactless Dining app with QR code and text reading Pay Here visible, at a restaurant in the Silicon Valley, San Jose, California, December 18, 2021. Photo courtesy Tech Trends. (Photo by Gado/Getty Images)GADO VIA GETTY IMAGES

It is a more hygienic and safer means of placing an order with no personal interaction and no cash handling. Moreover, it is a quick and convenient way of receiving payment from customers for the orders placed. Restaurants wishing to stay competitive in the handheld device era must design plans that create digital payment methods for a better experience.

Restaurant Reservation Software
For the full service space, automating restaurant reservation schedules, not only increases efficiency in a time of ongoing labor challenges, it also conveys an updated image to your diners. Moreover, it reduces the chances of over or double booking. Short staffed restaurant with extra busy staffers often make mistakes disrupting a great guest experience. Therefore, the reservation software reduces or eliminates the need to attend calls to reserve tables or assign employees to handle the customers.

Drone Food Delivery Systems
With the high cost of third party delivery services, restaurateurs are seeking alternatives. Drone delivery in certain parts of the country are beginning to become popular. Automating the delivery process may eventually lead to some restaurants doing away with the delivery person’s existence entirely. With the advancement of technology, drones soon may completely replace drivers to ensure contactless, timely delivery. Moreover, they can also film the surroundings and offer many avenues for marketing initatives. Having food delivered through drones would eliminate the cost of hiring delivery people and reduce the environmental effects caused by the vehicles while at the same time lessen the need for expensive third party servies.

Chatbots
A newer trend taking hold in the food industry is the use of website Chatbots. Restaurants can easily create chatbots. They do not require much investment and can easily integrate with different communication mediums. While interacting with customers, a chatbox may:

* recommend dishes
* suggest food
* pair drink options
* process payments
*ask for feedback
*offer promotions
*announce events
*and even crack jokes

Air purification:
To increase health security, air quality and purification enters the minds of some guests. As a result, restaurants are focusing on upgrading air purification systems to improve air quality inside their restaurants. Some restaurants opt for filter systems that trap pollutants and neutralize contaminants in the air. Although these concepts are still emerging in the restaurant industry, they are becoming an integral part of safety measure and you can expect to see more of it as we continue to learn to live with the threat of viruses. These air purification measures are in addition to customers expectations that the staff sanitize the restaurant regularly and thoroughly before serving meals.

My “Take Away”
As technology changes everything from the guest experience to the ordering process to the functionality of the kitchens, restaurants must continue to evolve, innovate and monitor consumer trends if they expect to survive and thrive. Embracing the use of technology and digital solutions as a way remain competitive is undoubtedly here today and the future of our business.

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

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

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

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

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

Trend 1: Simplified online grocery shopping

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

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

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

Trend 2: Interactive fashion resale marketplace

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

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

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

Trend 3: Symbiotic solutions to labor needs and economic empowerment

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

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

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

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

HOW TO ATTRACT AND RETAIN EMPLOYEES AS WE EXIT THE PANDEMIC

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

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

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

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

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

Employees come before customers

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

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

Compensate employees so your company is an attractive employment alternative

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

Differentiate your company and its culture

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

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

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

KEY TIPS FOR LAUNCHING A SUCCESSFUL RESTAURANT

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

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

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

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

Let’s start with a concept

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

If You Build It, Will They Come?

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

Your People Plan is Key

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

The Market and Competition

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

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

Consistently Great Food

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

Cash Is King

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

Have A Plan And Follow Your Dream

Owning a restaurant can be personally rewarding and profitable. Many people have built great restaurant companies following these simple guidelines. Desire and passion will only get you so far. Create your business plan as a road map. Your plan will help you stay on track when dealing with the many moving parts of launching and successfully operating a new restaurant.
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About the author:
Gary Occhiogrosso is the Founder of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm. Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, advertising, selling franchises and guiding franchisors in raising growth capital. Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program with its founders. He is the former President of TRUFOODS, LLC a multi brand franchisor and former COO of Desert Moon Fresh Mexican Grille. He advises several emerging and growth brands in the franchise industry. Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine and named “Top 50 CXO’s” by SmartCEO Magazine. In addition Gary is an adjunct instructor at New York University on the topics of Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales and Marketing. He was also the host of the “Small Business & Franchise Show” broadcast in New York City and the founder of FranchiseMoneyMaker.com

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

JACK IN THE BOX, RELAUNCHING ITS FRANCHISING EFFORT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FLAWED STRATEGIC THINKING THAT DRIVES SERIOUS FRANCHISE LEADS TO DISQUALIFY YOU

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

Flawed Strategic Thinking That Drives Serious Franchise Leads to Disqualify You

By Paul Keiser
I Show Franchise Business Developers and Brokers How to Automatically Find Serious Leads

The leading reason we’ve found causing serious leads to disqualify brands and brokers from consideration is a lack of strategic thought, time and attention given to 21st Century aspects of franchise business development. As an industry, franchise business development methods are mired in tactics over 25-years old. It takes serious reflection and change to adapt to emerging 21st Century franchise buyer behavior and their very different expectations.

Here are five inter-related company cultural and strategic issues that, if ignored, cause serious leads to disqualify you from consideration.

Recognize Franchise Business Development is a Business within a Business
As they begin to scale, franchisors and brokers often struggle with business development. That’s because the knowledge and experience to do it well aren’t part of the operations or customer excellence skill sets of many owners and investors.

Franchise business development is actually a business within the larger franchise business with different needs. Recognizing this, and then properly staffing, funding and executing around a set of realistic goals can put you on a sustainable pathway to success.

Unfortunately, too many try to fix a faltering franchise business development program with band-aids; neglecting the thought needed to find the root causes of problems, not just surface symptoms.

Why…because it’s easy. Tactical solutions make everyone feel good. In fact, re-imagining a 21st Century version of franchise business development requires digging deeper.

To meet the challenge, three strategic areas critical to franchise business development must harmonize:

Storytelling
Finding and Nurturing Serious Leads
Intelligent Pipeline Management
Think of each of these areas as a leg of a stool. If the legs aren’t aligned, then the stool teeters and totters making it useless.

Do nothing and watch as serious leads disqualify you.

Inertia Kills Brands and Brokers
Many brands and brokers become paralyzed by the breadth and depth of change needed to adapt to the changing macro environment of franchise business development. The smaller the brand or broker the more daunting the challenges.

Smaller brands and brokers aren’t often blessed with tens of thousands of dollars laying around to “experiment” or try something new; so, fear stifles decision-making.

But time kills deals. Time also kills brands and brokers unwilling to adapt. It’s time to step up and either hire or develop the skills to upgrade franchise business development methodologies. The market isn’t waiting. Brands and brokers that grab an early mover advantage will prosper; while laggards will fall by the wayside.

Do nothing and watch serious leads disqualify you

Lack of Expertise
The skill sets needed to address both franchise business development technology and people’s evolving behavior doesn’t necessarily reside in most franchisors and brokers, who are often solo practitioners. Many franchisors have consumer marketing pros or agencies supporting franchisees. However, these same highly-talented people are inexperienced in the “black arts” of franchise business development and the psychological journey a serious lead embarks on in the Internet Age. You hired them to drive traffic into your stores and restaurants; not recruit franchisees. And likely they do a very good job for you.

Giving franchise business development insufficient support or forcing business developers to work with meager lead generation budgets or whatever software is around or cheap is commonplace. That’s a lazy approach and speaks to a lack of understanding of how to successfully grow a franchise business development powerhouse.

Ownership and leadership need to step up and either acquire or outsource the knowledge needed to reliably scale the business.

Do nothing and watch serious leads disqualify you.

The Internet Upends Traditional Notions of Franchisee Recruitment
Every generation from 1995 forward has been reshaped by the Internet. Consumers complete almost 75% of brand research for high-end goods and services on the web before making a call or a visit. They expect transparency. Your storytelling needs to meet a higher standard of excellence or these serious leads will just move on. So, ask yourself, do you tease or hide information or do you educate on your franchise business development website?

Text messaging has rapidly changed the franchise business development communication landscape. Today’s serious leads comfortably text back and forth with your business developer before engaging. What does that do to old-fashioned “dialing for dollars” models? Which leads are more engaged and serious?

Your franchise website is now expected to tell your whole story. It’s not just a brochure anymore or a landing page to get a form filled out. You’re forced to dig deeper to articulate your competitive differentiation. A test: if you can put your name on a competitor’s website, then something’s wrong with your story.

All brands are coming to grips with ever rising lead generation costs. Can we harness the vast potential of social media and online advertising to create affordable serious leads prospect? Can these newer channels become a game changer or are they just one more money drain? How do these leads convert into your pipeline compared to other channels?

Do nothing and watch serious leads disqualify you.

Leads Now Have the Power

Leads now control the research process. In fact, 75% of their research is already done before first contact. Serious leads expect complete and transparent information about brands. So, a solid story and a dedicated franchise business development online presence are now table stakes with serious leads. These serious leads engage when they’re ready; not before. So encourage them to do that by delivering a brand education experience that gets them emotionally and rationally invested in your franchise opportunity.

Do nothing and watch serious leads disqualify you.

Franchise Pipeline Solutions (FPS) helps new and emerging franchise brands find their most serious leads using an integrated pipeline management system. It combines enterprise-class CRM with multi-channel Marketing Automation, 1:1 and bulk text messaging, behavioral scoring and auto call scheduling. Our proven approach has been in worldwide use for over eight years.

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About the Author:
Paul Keiser has over 40 years of experience franchise development, social media and online lead generation, email nurture, marketing automation and brand storytelling. Today he makes his living giving precious time back to franchise brand business developers and franchise brokers by helping them find serious leads so they focus on more of the right people and do more deals.

FRANCHISORS AND FRANCHISEES MUST LEARN TO DEAL WITH CHANGE

Posted on October 18, 2021October 20, 2021 by Franchise Strategist

Franchisors and Franchisees Must Learn to Deal with Change

By Ed Teixeira

FRANCHISING, — Ed Teixeira is Chief Operating Officer of Franchise Grade and was the founder and President of FranchiseKnowHow, L.L.C. a franchise consulting firm.

If there is one thing that the Pandemic taught us, especially those in the franchise industry, is that certain events both large and small require change. It is a given that the recent Pandemic represents extraordinary change having last occurred 100 years ago. Franchise brands face frequent challenges requiring change including, a formidable new competitor, franchisee resistance to certain promotional programs, declining franchise system growth or a public relations problem like when the Subway Foot Long Sub, was found by a customer to be less than a foot long. When these situations arise, franchisors and franchisees must be equipped to implement change to meet the challenge.

Expect that franchisors will be required to implement changes to their franchise program from time to time some minor and some major. When a franchisor wants to make a change, based upon the magnitude of the change, it should be communicated to the franchisees before the change is implemented providing advance notice.

* Using the franchise advisory council as a sounding board

* Giving franchisees the courtesy of knowing about the change

* Providing the franchisee community an opportunity to respond

* Enlist select franchisees to help mold the change and avoid a confrontation

Some changes are routine in nature and can be implemented as per an existing policy. For example, a revision or clarification to a procedure in the franchise operations manual. Major changes that may have a direct impact on franchisees demand special attention. In certain cases, the change may not be that significant, but rather the perception by franchisees is that the change is the beginning of “more to come.”

Examples of Important Changes Include:

1.Changes to franchise agreements that significantly revamp contract terms, including renewal terms, royalty fees and default conditions. These changes may cause particular concern among franchisees that will be looking to renew their franchise agreement.

2. Changes in marketing or advertising programs which would represent a major departure from the current program.

3. Changes in the direction of the franchise strategy that involve applying resources to a new venture or business.

One of the most effective methods to establish and implement a major change is to involve the Franchise Advisory Council or marketing committee which includes franchisee and company representatives. These committees allow for a dialogue between the franchisor and representative franchisees which can help to foster positive franchise relations and establish a buy-in from existing franchisees.

When franchisors implement a major change that lacks franchisee involvement or advance notice it can be a recipe for trouble. To maintain positive franchise relations before implementing an important change the franchisor should gauge how the change could affect franchisees by obtaining feedback from franchisor field staff and select franchisees.

If feedback indicates a strong resistance to the change, the franchisor should consider the situation, and avoid unnecessary confrontations by being flexible. Change is an important aspect of all relationships especially in the world of franchising. It is important that the franchisor and franchisees conduct business within a climate of change that is positive and considers the needs and objectives of both parties.
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About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].
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FRANCHISE YOUR BUSINESS: www.franchisegrowthsolutions.com

franchise, royalties, profits, expansion — Click Here To Learn About Franchising Your Business

8 Key Costs To Consider When Opening A Restaurant

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

8 Key Costs To Consider When Opening A Restaurant
By Gary Occhiogrosso – Managing Partner – Franchise Growth Solutions

Two of the most frequent questions I’m asked at a seminar, workshop, or when teaching a restaurant development course at New York University are; “how much money do I need to open a restaurant, and how do I get the money?” This is the first installment of a two part article answering those questions.

Before we can address how to fund your restaurant, we need first to understand what we’re building and its cost. The type of restaurant you’re opening will determine the amount of money you need. In addition, the kind of restaurant will affect the type of funding and who may have an interest in investing or supplying a loan. Additionally, you’ll need to evaluate how much of your own money you need to provide. That’s because part of the process necessary to convince an investor, banker, or private lender is that you’re genuinely committed to the project. You know the expression, “put your money where your mouth is”

For the sake of this discussion, let’s say you’re opening a fast-casual restaurant. Not a franchise but an independent concept that you have developed on your own. This type of project may require a conventional business loan or an SBA loan. In many cases, investors other than family and friends may not be interested in investing in a brand new concept with no track record of success. It becomes further complicated if this is your first foray into the restaurant industry.

Fast-casual restaurants typically cost between $250,000 and $400,000 to “turn the key” and open the doors for business. The various costs associated with opening a restaurant will range depending on factors such as location, size and condition of the space, everything from security deposits to the reserve capital you’ll need to carry possible shortfalls the first few months you’re open.

Investment Costs to Consider

* Professional fees: This is usually necessary to set up your business entity, whether a corporation or LLC. Also, you’ll want to have a lawyer review any lease you may sign to rent a space where you will construct your new restaurant.
* Security deposits: This may be one to three months of rent paid to your landlord. In addition, many utility companies require deposits to set up electric, water, and Internet connections.
* Equipment: The cost for all of your kitchen equipment. Items include hoods, grills, ovens, stoves, stainless steel prep tables, shelving, hot tables, cold tables, a Point of Sale (POS) system, and a walk-in refrigerator. In addition, small wares, things like scoops, ladles, fry baskets, flatware, dishes, glasses, and other small items you need to prepare your menu and serve your guests. Now let’s move to the front of the house. Additionally, you’ll be looking at furniture and fixtures, countertops, workstations, tables, chairs, decorative shelving, and other items. These are the items you use in the front of the house to create the environment that will best suit the concept you’ve created.
* Leasehold improvements: In most cases, this will be your most significant expense. Leasehold improvements are generally construction costs for electrical installations, hood venting, plumbing, heating, and air-conditioning. These items are referred to as “the mechanicals.” And let’s not forget building one and, in many cases, two ADA-compliant bathrooms. Also, installing the proper ceiling, flooring, millwork, painting walls, and other elements that we typically think of as construction. On a side note, you can take advantage of opportunities due to the abundance of restaurants that have closed during the pandemic. These empty restaurant spaces are referred to as “second-generation restaurant spaces.” You can save thousands of dollars if you find and secure a space that was formerly a restaurant. In many cases, you will find the mechanicals have remained in the building. These second-generation restaurant spaces help to reduces your cost if you don’t need to install a hood, venting, plumbing, electrical, and restrooms.
* Signage: Properly identifying your restaurant will mean you will need to sign for your storefront. Also, consider that you may need lighted signs in the windows and other signage throughout the restaurant.
* Start-up inventory: This is probably the most extensive inventory order you’ll ever place. This initial order is for food, paper, beverages, and other supplies you’ll need in your restaurant daily. You’ll replace these inventory items as you use them, but when you first start, you’ll need to stock your restaurant from scratch with every single thing for the first time.
* Grand Opening Advertising: This is an item that most restaurateurs neglect. You’ll want to launch your restaurant by making a big splash in the neighborhood. To do this, you need the proper budget for social media, print, and other forms of advertising & marketing so you can get the word out.
* Reserve Capital: As I mentioned earlier, you will need to reserve cash in the bank. This reserve cash is required to meet shortfalls that may occur when you first open your new restaurant. You may not break even for months. Therefore, it would be wise to be prepared to cover payroll, inventory, utilities, and other costs incurred as you operate.

Understanding the actual cost of opening your restaurant is vital. An investor or bank will want to see that you’ve applied critical thinking to the project by taking time to evaluate the start-up cost honestly. In addition, you will need to prepare a business plan and projections to secure bank financing or satisfy an investor. Properly evaluating the required investment will lead to accurate budgeting these key startup costs.

So now that you have an understanding of cost, you should be prepared for a banker or investor to inquire how much of your own money you’re willing and able to invest into your business. In many cases, the SBA, private lenders, or conventional loans through a bank will require that you supply somewhere between 15% and 25% of the total amount necessary. As an example, if you project a cost of $400,000 to open your new restaurant, you will need between $80,000 and $120,000 in cash. Your cash investment demonstrates to the bank or investor that you have “skin in the game. “I have never seen a bank or investor finance a new restaurant 100%.
Now that we’ve covered the investment information necessary to open a new restaurant, we’ll tackle the second question in our next article. We’ll dig into funding methods such as a conventional business loan with a bank, an SBA loan, a private investor, and of course, family and friends.

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
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FRANCHISE YOUR BUSINESS TODAY: www.franchisegrowthsolutions.com

DO YOU NEED A TAX ID? HOW TO OBTAIN AN EIN

Posted on August 1, 2021September 3, 2021 by Franchise Strategist

DO YOU NEED A TAX ID? HOW TO OBTAIN AN EIN
By TOM SCARDA, CFE Founder of FRANCHISE ACADEMY
🔑Education 🔑 insight 🔑 inspiration – Have you been working from home and don’t want to go back to your office? Have you tasted freedom and want out of the corporate rat race? We should talk. No Sales, No Kidding.

After you incorporate or form an LLC, the IRS will issue a federal tax ID to your small business. This tax ID is also known as an employer identification number, or EIN.

What is an EIN? Let’s take a closer look at this federal tax ID, key areas where having an EIN may benefit your business, and how to obtain an EIN if you were not already issued this tax ID.

What’s an EIN?

An EIN is essentially a social security number (SSN) for a small business.

This tax ID is nine digits long, similar to that of an SSN, with a primary purpose of legally identifying your business. Entrepreneurs may use their SSN or an EIN on paperwork pertaining to their company. Some entity formations, like sole proprietors, use their SSN for business tax purposes. Incorporated formations, like limited liability companies (LLCs), have the choice to use their SSN or an EIN.

More often than not, incorporated businesses will use their EIN. This is because an EIN is slightly less sensitive than an SSN. As such, business owners may choose to use an EIN in lieu of an SSN. Choosing this tax ID acts as a safeguard to ensure the safety of their personal identity. It also helps to keep entrepreneurs in compliance with U.S. tax laws.

How Do I Know I Need an EIN?

There are several aspects of small business where it’s necessary to file for an EIN. Here’s where this tax ID can benefit your company.

Opening a business bank account. Having a business bank account allows small business owners to keep their personal and professional finances separate. Most U.S. financial institutions require a certified copy of an EIN prior to opening a business bank account. An EIN also makes it easier to establish a business credit profile, separate from the owner, and build business credit.
Forming an LLC. If you have already formed an LLC, then you were issued an EIN — and may skip ahead in reading. However, if you are planning to form an LLC keep in mind that the IRS will issue you an EIN. You will also need to obtain an EIN if you choose to incorporate as another entity formation, such as incorporating as a corporation or forming a partnership.
Hiring employees. Here’s where an EIN benefits both employees and the business owner. If your business plans to hire employees, it is a requirement to obtain an EIN. This allows the IRS to track your business and ensure it collects payroll tax. On the flip side of the coin, once a business has been incorporated the business owner is technically considered an employee. As such, you will need to obtain this tax ID — for future employees within the business as well as your own status within an incorporated business.
Besides the aforementioned three bullet points, EINs may benefit businesses in even more ways. You will need to obtain an EIN to establish pension, profit sharing, and retirement plans. This tax ID may also be used when filing annual tax returns. In the event you decide to change your organization type, filing Form 8832 Entity Classification Election will ensure your entity is able to retain its EIN, even if its legal structure has changed.

How Can I Obtain an EIN?

Obtaining an EIN is a fairly straightforward process. You can apply for an EIN online, through the mail, by fax, or even over the telephone with the help of MyCorporation’s trusted team of professionals.

Before you begin the filing process, however, please note that you must determine if your business is eligible for an EIN. The principal business must be located in the United States or its U.S. territories. The true principal officer or general partner must also possess a valid tax ID. This may be an SSN, an EIN, or an individual taxpayer identification number (ITIN). Finally, if your small business is not already incorporated or formed as an LLC then it must file to incorporate as a legal formation for their organization.

The Value of Having an EIN

Having a tax ID allows you to take your business to new, exciting heights while remaining in compliance with tax laws. As an added bonus, once you obtain an EIN you have it forever because EINs do not expire.

Conduct your due diligence prior to filing for an EIN and reach out to a legal professional prior to filing if you have any questions. Once you obtain your EIN, remember to treat it similar to that of an SSN. Keep this ID in a safe place to protect it and use it in areas required by your business.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.

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About Tom Scarda:
Tom is now a nationally recognized small business and Certified Franchise Expert (CFE), motivator and dynamic speaker. Tom has authored three books: Franchise Savvy, The Road to Franchise Freedom and The Magic of Choosing Uncertainty: How to Manage Change, Embrace Fear and Live a Fulfilled Life.

30 years ago, searching for his inner drive, Tom left college and submerged himself in the motorcycle underworld in lower Manhattan. This made his mother worry. It was the first time Tom chose uncertainty over the status quo.

After four years of life in the outlaw motorcycle subculture in NYC, Tom got a haircut, took a shower and landed a respectable job in the New York Subway system. After more than 13 years in the subway Tom became frustrated with the bureaucracy and politics. So he quit his job and left his pension behind to pursue his dreams of business ownership. This also made his mother worry.

In 2000, he purchased a smoothie franchise, which he built into three units and sold five years later for a considerable profit. He was the #1 franchisee of the year in Maui Wowi Smoothies in 2002. He purchased a second franchise in 2006 called Super Suppers and failed miserably in that franchise concept. The lessons he learned from failure is what makes him such an expert. Tom has owned and operated both franchised and non-franchised businesses and has years of knowledge and wisdom to share with you.

An Overlooked Franchisor Recruitment Strategy

Posted on August 1, 2021August 2, 2021 by Franchise Strategist

An Overlooked Franchisor Recruitment Strategy

By Ed Teixeira
VP Franchise Grade, Author, MA Economics, Industry Partner Stony Brook U. and member of Advisory Board Pace U. Lubin School of Business.

To grow a franchise system a franchisor must have qualified franchise leads that can turn into viable franchise candidates. This is a fundamental truism of franchising, whether a franchisor generates their own leads, uses lead gen portals, or receives franchisee prospects from other sources. However, acquiring franchise leads is only a part of the franchise development process. A franchisee prospect needs to be sufficiently impressed with a franchise opportunity before proceeding to the next steps in the process.

To achieve this objective the usual approach employed by franchisors is to cite the market demand for the franchise’s products or services, franchisor training and support and providing a financial performance representation in an Item 19 disclosure. However, these benefits exclude one of the most critical requirements of any business, especially a franchise, the quality of the market territory the franchisee will acquire as part of their franchise investment.

After having been in the franchise industry for many years, I have not seen enough emerging and mid-sized franchisors emphasize in detail, how it analyzes, identifies, and determines the territory a franchisee will be granted. Although this subject is typically covered at the early stages of discussions between the franchisor and a franchisee prospect it has been my experience that the franchisee market does not receive enough focus by some franchisors. While the type of territory whether open, protected, or exclusive is an important factor for a prospective franchisee the market potential is equally important.

1. Franchisors should devote more resources and place more attention on how they identify and define a franchisee market and present this information at the earliest stages of the franchise process. This strategy may require a franchisor to invest additional resources into defining franchisee markets.

2. Avoid utilizing surface metrics to define a market. For example, a home care franchisor may use the number of residents over 65 to define a market, yet will that indicate how many of this market segment can afford to pay for home care services? The same concept relates to children’s services. Two markets with a comparable number of school age children should be analyzed to determine whether family incomes are available to pay for those services.

3. Invest in using a reputable market research firm with credentials to identify an ideal market profile. Franchisors should have a detailed franchisee and market profile. It is not necessary to describe all the details regarding the territory but rather to emphasize the importance that each franchisee has a quality market.

4. A number of franchisee prospects have a pre-determined choice of territory based upon where they live or their gut instinct. There are franchisors that readily accepts the choice, however if the franchise fails due to poor sales this issue will not be raised. Franchisors should not accept a franchise candidates’ preference for a territory unless the decision is based upon careful analysis.

Franchisors should devote the resources and focus upon the importance of a franchises market potential and present the franchisee market as a major feature of the franchise opportunity. This should be introduced at the beginning of the franchise presentation process including brochures and on the franchise website.

About the Author:
Ed Teixeira is currently the VP of Franchise Development for Franchise Grade.com. He’s had the opportunity to spend over 35 years in the franchise industry as a franchise executive and franchisee. Ed has an MA in Economics from Northeastern U. His franchise experience has included the retail, manufacturing, home health care, medical staffing and GPS fleet tracking industries. EWd has done international licensing in Asia, Europe, and South America and was a contributor to Forbes Magazine. He’s been qualified by the International Center for Dispute Resolution as an international franchise expert. Ed is a faculty member of LawLine.com I have Lectured at Stony Brook University Business School on the subject of Franchising. Been interviewed by the Wall Street Journal, Forbes, Bloomberg, Franchise Times, Franchise Update, New York Newsday and Long Island Business Review. He wrote and published The Franchise Buyers Manual a comprehensive book for people considering investing in a franchise. In 2004 Ed wrote Franchising From the Inside Out an overview of the franchise industry. He have established numerous franchise concepts for independent business owners and with my affiliates do international franchising. Ed has been designated a franchise industry expert by The Business Broker Press. Am a member of the Advisory Board Pace University Lubin School of Business and Industry Partner Stony Brook University.