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

MAIN STREET – TRAFFIC AND SALES TRENDS

WHAT’S HAPPENING ON MAIN STREET ?? – TRAFFIC AND SALES TRENDS
By Roger Lipton
Photo by Nadine Shaabana on Unsplash

There is not much to celebrate among restaurant industry operators. “Flat” is better than “Down”, but sales and traffic trends continued to be lackluster in April, and there is no reason to expect a change in May (now history) or the month to come. We have described many times how the dining industry has been an excellent leading indicator relative to the economy. We suspected earlier this year, as our readers know, that the lack of momentum in the restaurant industry indicated that the economy was unlikely to break out on the upside. That has proven to be the case as the slowdown in the economy is clearer by the day. The latest GDP expectations for the second quarter are in the 1.25-1.5% range, a lot lower than the 3.2% of the first quarter, and bringing the first half very close to the 2.3% of the Obama years.

While some worse numbers than shown below have circulated, we quote below the Miller Pulse survey numbers.

Back in restaurant land: Continued weak traffic was the feature in April, with higher check values (up 4.1%) overcoming a 2.1% traffic decline and bringing same store sales to a 2.1% increase. As we have said repeatedly, that is not enough to overcome higher labor, rents, and other operating expenses, so margins will continue to be challenged. The two year stacked comp is up 3.8% in April, down 10 bp from March.

By segment:

Quick service restaurants were up 2.7% in April, with 4.6% check average overcoming 1.9% traffic decline. Over two years, QSR SSS fell 30bp month to month to 4.3% so not much has changed.

Casual dining did worse, with same store sales down 0.5% in April even with a boost from the Easter calendar shift, and traffic was down 2.8%. Over two years, SSS was up 60 bp to a lackluster 1.3%, with traffic obviously down.

We have heard no credible reports that trends have improved in May so, with two thirds of the second quarter in the rear view mirror, and the economy showing signs of slowdown, there seems little reason to think that operating results will improve in Q2. A pickup could be in the cards, and the restaurant industry could lead the way, but not yet.

Read more from Roger Lipton here:
https://www.liptonfinancialservices.com/“>https://www.liptonfinancialservices.com/
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About the Author:

Roger Lipton is an investment professional with over 4 decades of experience specializing in chain restaurants and retailers, as well as macro-economic and monetary developments. After earning a BSME from R.P.I. and MBA from Harvard, and working as an auditor with Price, Waterhouse, he began following the restaurant industry as well as the gold mining industry. While he originally followed companies such as Church’s Fried Chicken, Morrison’s Cafeterias and others, over the years he invested in companies such as Panera Bread and shorted companies such as Boston Chicken (as described in Chain Leader Magazine to the left)

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

Franchising Your Business? – NOW WHAT?

FRANCHISING YOUR BUSINESS? – NOW WHAT?… A well thought out plan that is forward-looking for the first 1- 3- 5 years. Have you also given thought to the logistics, how do you intend to respond to all the incoming and make outgoing calls quickly?

Franchising Your Business? – NOW WHAT?
By Gary Occhiogrosso – Managing Partner – Franchise Growth Solutions

So you’re ready to launch your newly franchised brand. You’ve set up your store; proved it out over time, have the UFDD and the Operations Manuals in order, so now what? What do you have to show for all the time and money spent up to this point? Where’s the ROI?

How to be a Growth Story
Well, for a franchise system to truly grow, you must sell/award franchises to qualified individuals. You’re not a “growth story” if you’re not selling new franchise units. Hell, you may not even be a franchise story if you’re not selling franchises!
New franchisors are usually so caught up in the idea of “process” or in other words the work of the business so to say that in fact, they overlook the time, cost and needed strategy to sell franchises. I’ll bet many are so sure their franchise will be a hit that they think you can sell it on your own or use “success fee” broker network as the entire development plan. There are no zero cost decisions, one way or the other. How to grow and at what cost is always the question.

Harsh Reality
It doesn’t take long for the smart franchisors to recognize reality and ask themselves a tough question; what do you I know about selling a franchise? Most don’t even have a written Strategic Development Plan? Yes, a development plan, a plan that outlines the markets, the trade areas, the type of ideal franchisees, where to find them, the cost per inquiry, and the conversion percentage, the budget, and the goals. A well thought out plan that is forward-looking for the first 1- 3- 5 years.
Have you also given thought to the logistics, how do you intend to respond to all the incoming and make outgoing calls quickly? Make the follow-up calls; conduct the discovery days, and all the prospects questions, his wife’s questions, his attorney’s questions. Consistent, timely sales efforts rule the day. If you’re lucky, you quickly realize you don’t have the time or the expertise to launch an effective selling system for your franchise.

Ignorance is NOT Bliss
The danger and destruction of ignoring that realization can be seen at all levels in the franchise industry from dead brands to bankrupt franchisees. When franchisors fail to recognize that they are now in a completely different business than the concept they started, several mistakes can happen whether it is selecting the wrong franchise candidate. Or thinking they can service an international franchisee. Alternatively, opening in a market where they have distribution challenges. Or opening in a market with zero name recognition, franchisors can sometimes be their own worst enemy to growing their brand in an aggressive but responsible way. The successful Franchisors all come to the realization that just because they know their business doesn’t mean the franchisor knows the franchise business. Certainly not anymore than a franchise strategist might know the trade secrets of operating your business successfully.

Answering the NOW WHAT Question
The road is littered with new franchisors that tried the “Do It Yourself” approach. Alternatively, perhaps paid a company that is really in the business of selling paperwork like the FDDs, Manuals, & Brochures, but not selling the franchises. Or thinking a broker network, which is designed to supplement your selling strategy, should be your sole selling strategy. So we get back to the question; now what? We can help you answer that question. Please feel free to contact us at [email protected]
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About the Author
Gary Occhiogrosso Managing Partner – Franchise Growth Solutions
Currently, is the Managing Partner of Franchise Growth Solutions, which is a national franchise development and sales firm. Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, 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. He is the former President of TRUFOODS, LLC a 100 unit, multi-brand franchisor and former COO of Desert Moon Fresh Mexican Grille. Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine. In addition, is an adjunct instructor at NYU on the topics of Concept & Business Development as well as Franchising & Entrepreneurship. He is also the host of the “Small Business & Franchise Show” broadcast in New York City and is a contributing writer for www.Forbes.com on the topic of Franchising.

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]

Millennials Drive Menus In Fast Casual Restaurants

MILLENNIALS DRIVE MENUS IN FAST CASUAL RESTAURANTS…. These Newer Concepts must not only live up to the marketing message but also ensure that their operations can provide consistent, quality products in every location…. Their business models must be replicable and easily managed.

By FranchiseMoneyMaker Contributor

As recently as 15 years ago the idea that you could grab a nutritious, healthy and still tasty meal from a drive-thru or fast food restaurant was unheard of. It wasn’t until the post Y2K era that fast food consumers became concerned with what they ate. As the Millennial generation started spending money on food outside the home the industry has been “forced” to move toward healthier, high-quality menu alternatives. Once begun this movement toward fresher, greener menus has continued to accelerate at an ever increased pace.

Does Better for You equal Better for Business

Consumer attitudes regarding the link between diet and health have shifted. Data shows that Millennials and aging baby boomers are taking a more proactive approach to healthy eating. Many have adjusted their dietary choices to promote better health. The demographic with higher levels of education and more disposable income is at the forefront of this trend. These health-conscious consumers take the time to research before they dine out. In addition, they seem more willing to pay higher prices to ensure that what goes into their bodies is nutritious.
With this new consumer focus on nutrition, sustainability and ‘clean food’ comes a revolution in the Quick Service Restaurant (QSR) industry. According to a recent article in Business Leader, 83% of Americans believe that fast food from traditional Quick Service franchises is not healthy. This has created the rise of the ‘better for you’ brands that now compete with fast food giants such as McDonald’s, Burger King, and KFC. For example, healthy quick service brands such as Dig Inn, By Chloe, and Sweetgreen are creating their own niche by specializing in organic, locally sourced meal options that contain more vegetables and fewer calories than traditional burgers and fries.

Quality comes with a Cost

As enticing as these food offerings may be to our palate Consumers may find themselves paying almost double what they would at a traditional fast food location. Locally sourced, organic and sustainable food suppliers still see this segment as small compared to conventionally processed ingredients, so access and availability remain a challenge. As a result, many healthier focused chains are developing altogether new selling propositions by positioning “value with reasons” as a way to compete with the traditional fast food chains of the industry. These “better for you” concepts post nutritional information, health benefits as well as the sourcing and methods used in their products. The emphasis is on local, clean, humanely raised and organic.

One such concept is Salad and Go. Branded as a healthy drive-thru option, Salad and Go offers large salads, smoothies, soup and breakfast with an “Always Organic” list of ingredients. In addition, the brand highlights their competitive prices. Salad and Go currently has in 10 locations in the U.S. with plans to nearly double that number by the end of 2018.
Another U.S. chain, LocoL, offers food made only from local ingredients. Founders & Chefs Roy Choi and Daniel Patterson claim “We at LocoL want to live in a world where eating healthy doesn’t take a lot of money or time.”
New quick service food concepts like these are branding their menu items as healthy, high quality alternatives to the sugar, fat, and salt-heavy meals provided by traditional fast food franchises. Recently developed QSR concepts give consumers a choice. Whether it’s organic, farm to table, all natural, gluten free, vegan or humanely raised, the race to innovate and meet this rising consumer trend has never been more of a priority in the Quick Service Restaurant segment than it is today.

Forcing Innovation in Traditional Brands

As new brands continue to make their mark in the minds of U.S. consumers, established brands are attempting to keep up with changing demands. Fast food chains such as Taco Bell have promised to use cage-free eggs and reduce artificial ingredients, and McDonald’s has started selling antibiotic free chicken, and now cooks many of its items to order and offers more salads. It is yet to be seen if that alone will be enough to keep the long-standing leaders in the QSR industry on top.

Serving up Quality, Quickly and Consistently

These QSR pioneers are faced with the challenge of living up to the expectations of an informed, proactive consumer. These newer concepts must not only live up to the marketing message but also ensure that their operations can provide consistent, quality products in every location. Their business models must be replicable and easily managed. This may also prove to be a challenge when food is being prepared to order using fresh locally sourced ingredients instead of processed or precooked menu items. If they can accomplish these tasks, the potential for growth is unlimited.

Regardless of the challenges facing these new “better for you brands”, the move away from traditional fast food to healthier quick service food options is unstoppable. As a means to address consumer concerns, in late 2017, the FDA announced new regulations requiring large restaurant chains to add calorie counts to their menus by 2018. This, combined with health-conscious consumers, will continue to push these new QSR chains to sharpen their competitive edge by offering a wider variety of great tasting, healthier options. As I see it, the success of the “better for you” fast casual concepts will depend on their adaptability to trends, consistency in product, as well as the price point and expense management.

Fast casual falafel specialist, Taboonette launches franchise prototype, building momentum for nationwide expansion

TABOONETTE: THE FALAFEL GROWS UP
Franchising Case Studies

Fast casual falafel specialist, Taboonette launches franchise prototype, building momentum for nationwide expansion

Taboonette is a fast casual, Middleterranean™ restaurant that is revolutionizing the falafel shop. Inspired by a trip which co-owner, Danny Hodak, took to Israel, the elevated shop brings the healthy diets of the Middle East and Mediterranean and fuses them with chef-driven food and American style.

With recipes curated by classically trained, renowned Israeli chef, Efi Naon, the eatery takes a modern approach to food created in the age-old, wood-fired taboon ovens for which Taboonette is named. Opening eyes to gourmet Mediterranean food, the shop offers locally sourced and sustainable meals in a rustic chic atmosphere that fosters social consciousness and brings people together.

Now a standout amongst New York’s popular upscale fast casual restaurants, Taboonette will build on its seasoned approach to success as it begins nationwide franchise expansion.

Taboonette currently has one corporately-owned location in New York, with a track record for success which will lead the brand to impressive growth. The popular Union Square hot spot will open its second corporate location in Q1 of 2019 with two additional restaurants slated to open by year-end.

Read the entire story here:
https://www.globalfranchisemagazine.com/case-study/taboonette-the-falafel-grows-up?fbclid=IwAR28S3I7xrJrUne_np2mTgZ2SDakVoVSCV4YpLJcX9ecxH3JTR1LjpDz0Ok

At a Glance:

Name of franchise: Taboonette Middleterranean Kitchen™
Established: 2012
Investment range: $350,500-$637,400
Minimum required capital: $200,000
URL: http://taboonettefranchise.com/
Contact [email protected]
(917) 991 2465