Are you Ready to Franchise Your Business?

Chris Conner Franchise Marketing Systems, LawsuitI have spent the past 15 years working with brands who want to franchise their business and grow a brand through the franchise expansion model.  Our firm, Franchise Marketing Systems works primarily with start up franchisors and brands who have not offered or sold a franchise in the past, sometimes with mid-sized or mature brands who are in need of additional support for growth.  In the several hundred times that I have supported a company going through this process, there are some similar traits to the businesses that really make it in the franchise model and those that don’t.

In a franchise consultation, the first questions that I will ask start with financial viability of a model.  How ready are you to present your business as a potential investment opportunity to a buyer?  Will someone be impressed with the numbers and the concept and the opportunity for themselves to see a strong ROI on their investment?  Obviously, the good models can show a stronger financial record than the weak franchise concepts.

Questions come up such as, “Mr. Conner, I haven’t generated any revenue yet, but look at this market and how much it is growing, is my business ready for franchising?” The answer is probably not, a franchisee needs to see that their is an opportunity for them realize a return and believe that you as a franchisor have the tools and experience to get them there.

The Franchise Marketing Systems consultation then goes into detail surrounding the business model, operating platform and technology that is infused into the business.  The tighter the operating model, procedures and structure of the business, the easier it is to replicate.

Again, Questions like, “Chris, what is a CRM and why do I need any technology, I just write it down, won’t the that work?”  And again, well, probably not.  If you are doing everything on your own as a one man show, this works, but when you start to scale the business through franchising it generally doesn’t work.  How can you support someone hundreds of miles away if you don’t have technology which provides information needed to tell you how that franchisee is performing?

The franchise interview then focuses on competition, market opportunity and what the consumer market looks like.  Obviously, the better mousetrap you have the stronger the franchise opportunity.  The market for consumer demand needs to be expanding as well in order to validate a franchisee investing in the business.  The increasing demand and market potential for your product or service should be at the root of why you are franchising your business.  If statements are made during the consultation such as, “Mr. Conner, the market has shrunk a lot since people started going to Amazon to buy my products, it’s getting harder to compete when there’s less pie to go around,” it’s obviously going to make for a less compelling franchise offering.

Franchising isn’t for every business, it requires a carefully planned strategy, marketing approach and business model to be successful.  Take the time to review the model, market and franchise industry before you step into the market.  There are many free consultations available with companies such as mine, Franchise Marketing Systems, do interviews, talk with other franchisors and get a clear understanding as to whether your business is ready to be franchised.

For more information, email me!

Chris.Conner@FMSFranchise.com 

Leveraging Technology to Franchise Your Business

banner-technologyBusinesses that turn to franchising as a way to expand their brand into new markets generally have a significant learning curve they must overcome as they learn how to manage the responsibilities of franchising and franchise expansion.  A new franchisor is like a new business owner who is learning the ways, processes and steps they must take to deal with customers, overcome obstacles and effectively grow the business.  What’s new about franchising to most business owners is the responsibility that comes with scaled growth and opening new locations in new markets with the addition of Franchisees in the fold.  With the never-ending expansion of technology in all aspects of business and life, franchising certainly has seen it’s reliance on technology and systems increase exponentially as well.  Perhaps in franchising more than most businesses, technology has taken on a new meaning as to how critical good tech is to the successful growth of a franchise.

Technology is a broad term, it could mean mobile technology, web marketing, operating systems, sales management systems or financial management systems, so where does it fit into franchising?  The truth is everywhere, but there are some key categories that every franchise system should be acutely aware of in order to best take advantage and scale more efficiently.

  1. Sales and marketing technology – every good franchise system needs to have a solid franchise sales CRM in order to manage the large influx of leads and effectively oversee the development of these leads into franchise sales. Typical franchise sales take in excess of 150 leads to convert, a good technology platform is critical to the success of this model. We like Leadmaster, which Franchise Marketing Systems worked together to create a franchise specific CRM (http://www.franchisemarketingsystems.com/services/franchise-crm/).
  2. Loyalty marketing and franchisee lead management systems – every good franchisor has a lead development and loyalty marketing platform that is inherent to the franchise brand. This should be leveraged and provided to franchisees in order to help them grow and develop their customer base. We like Scorpion’s franchise platform (https://www.scorpion.co/franchise-marketing/)
  3. Operations and logistics management software – a good system needs a management tool to operate the day to day business efficiently.   A technology platform that allows franchisees to manage the day to day schedule, oversee territory management and facilitate the logistics of inventory and supply management. Different systems work for different industry segments, but Franchise Marketing Systems likes ServiceCEO for service platforms (www.ServiceCEO.com) and for retail operations, Revel (www.RevelSystems.com)

For more information on how to incorporate technology into your franchise model and more effectively franchise your business, contact us:

Christopher Conner

Chris.Conner@FMSFranchise.com

Franchise Marketing Systems – Dallas Franchise Show

Dallas Franchise Show Franchise Marketing Systems Chris ConnerFranchise Marketing Systems will be exhibiting at the Dallas, TX franchise exposition on 5/14 and 5/15/2016.  The Dallas franchise show is expected to be a strong showing as the Dallas market is considered to be one of the strongest in the U.S. for franchise industry growth and expansion across a variety of franchise fields.  The show is put on by the National Franchise and Business Opportunities Show group who conducts 15-20 shows per year throughout the U.S. and Canada.

Franchise Marketing Systems exhibits at 32 shows per year in most major markets (http://www.franchisemarketingsystems.com/contact/franchise-events/)

The Dallas show will be held at the following venue:

Dallas Market Hall

North Hall

2200 Stemmons Freeway

Dallas, Texas, 75207

For free tickets to the event, email us:  info@franchisemarketingsystems.com

Christopher Conner with Franchise Marketing Systems will be presenting at the show on how to make the transition from employee to business owner:

http://www.franchiseshowinfo.com/dallas/visitor/show-features/seminar-schedule/

 

Chris Conner-Presenting the FDD

Chris Conner Franchise marketing SystemsThe Franchise Disclosure Document is a relatively complex document for most people.  Sometimes being in franchising for some period of time, it can be easy to overlook this and begin to forget that most buyers haven’t seen an FDD before and certainly the presentation of a 150 page franchise agreement isn’t helping your cause as part of presenting the value proposition to a potential franchise buyer.  In franchise sales, the FDD can either be a hindrance to the recruitment process or you can choose to use the FDD as part of your value proposition and know how to effectively present the content.

First, the Franchise Disclosure Document should be drafted according to NASAA Guidelines (http://www.nasaa.org/industry-resources/investment-advisers/franchise-registration-and-disclosure-guidelines/) and should be put together by a franchise attorney in order to present the FDD.  Once you present an FDD to a candidate, this constitutes an offer of the franchise, so it is important to make sure that you have registered in the necessary registration states prior to any presentation to a potential franchisee.  (http://www.franchiseexpo.com/resources/franchise-articles/feb-2016/franchise-sales-while-managing-the-franchise-state-requirements)

Second, get to know your FDD, the disclosure document and the details included therein.  The document offers a great deal of pertinent value to the franchise opportunity.  In particular, get to know your Item 6, Item 7 and Item 19 thoroughly in order to be able to present these items in detail.  One of the worst mistakes a franchise sales person can make during the franchise presentation is to not know the details and misquote specifics of the franchise offering or have the buyers attorney tell you what is in YOUR franchise offering.  Be fluid and detailed when presenting the FDD and able to explain each of the fees, structure and particulars included in the franchise offering.

Third, the Franchise Disclosure Document can be scary to most franchise buyers, make sure that you present this carefully before sending the agreement, otherwise you run the risk of getting a buyer who never picks up the phone again or just decides that you aren’t the right fit for them and says no to the offer entirely.  Franchise Marketing Systems has had success presenting a FDD Info Sheet along with the FDD when a client sends the document to a prospective buyer and before the FDD is sent, have a call with the candidate and explain what is being presented and how the document is laid out, make sure that they understand that the document is structured according to FTC guidelines and that there are a wide variety of required disclosures, that although important, are not necessarily specific to your franchise.  Walk the franchise candidate through the document and explain each Item enclosed in the agreement so they understand which items to focus on and how to understand what is pertinent to the agreement.  Schedule a follow-up call to review the agreement in detail and address all questions they might have.  Don’t skim through details, make sure to spend the necessary time on the agreement and make sure that you collect your receipt page from every buyer who is presented the FDD.

Finally, walk the franchise buyer through the close and help them understand how to actually execute the agreement.  With Franchise Marketing Systems, we see a significant amount of young franchisors who expect a new franchise buyer to understand what pages to sign and how to execute the agreement without any guidance.  Either load your FDD into DocuSign or another electronic signature module, or make notations on the pages that need to be executed.  Whatever route you take, make sure to make the process as easy as possible!

Franchise your business.

Motivating Franchisees to Succeed without Driving them into Failure.

NervousIf you have started a business before that has failed, you certainly know what the feeling is like. Your rent payment seems like it comes every week and your customer’s payments get smaller in amounts and longer to collect every month. When a business is at that teetering point and will either fall into oblivion or rise through it to success, it’s easy to lose your nerve as a business owner and maybe throw in the towel on your business venture entirely. Franchisees go through this learning curve when they are working in their franchise business during the first several months of operation. Many franchisees purchased a franchise due to the fact they had never operated a business before and they wanted coaching, support and guidance that can come through a franchise model, so this sense of anxiety may be at all time highs for many new franchisees during these initial months of business.

As a franchisor, sometimes this is easy to forget and hard to relate to when coaching and mentoring new franchises to success. In fact, many franchisors make very poor coaches simply for the fact that they are wired differently than a franchisee and don’t understand the idea of being unnerved by risk. Herein lies one of the most significant issues related to new franchise growth is the franchisor’s ability to coach new franchisees through this initial ramp up phase and get them to maturity. So as a new franchisor, where the initial franchises are critical to the long term success of the franchise system, what can you do to support franchisees being more successful while maintaining that relationship?

  1. Put yourself in their shoes. They have probably not started a business before and this early venture for them can become overwhelming quickly. If you were a new entrepreneur, you’d want someone to work with you, respect your position and speak with you out of respect and concern for your success. I have found that good franchisors look to their franchisees as they would customers and they make sure they are happy and have a good experience in as many ways as possible within the franchise network.
  2. Focus on what is important to the Franchisee. Don’t spend time talking through operational, strategic or high level topics with an early franchisee who is consumed with generating revenue to cover their expenses and survive in their new business. It would be like speaking with a drowning person and explaining to them that after several years of swimming lessons, they will be able to deal with this scenario without any difficulty. The swimmer doesn’t care, they feel like they need to be saved from going under. Work with early stage franchisees with a keen eye for prioritizing elements of your discussion to focus on their concerns first. If a franchisee is having trouble generating leads, focus your support on lead generation, ask whether your recommendations worked, assess and continue.
  3. Relationships matter. So much of the early stage franchisee’s reason for investing in your franchise model was because they believed in YOU as the founder or leader of the company. If it weren’t for you, they most likely would have invested in a larger brand. They saw qualities in you that they were attracted to and pushed them to invest in your franchise. I have seen times where a franchisor who is great in pursuing the franchisee and then not so great at maintaining the relationship after the sale which really puts off the franchisee with a sense of “now you don’t care about me?” Take the extra step, put in the extra effort and spend the time on the phone, in dinners, getting to know people’s families and lives so that you can show franchisees that you care about them and their success.
  4. Know the numbers. Understand when the business should begin to cash flow and how to reference your corporate numbers and experience. Know what the benchmarks should be for ROI for the business and be able to reference your experience accurately and with specifics. A Franchisee wants facts, details and analysis of where they are as a business and what can be done to help move the business forward. Using generalities or statements like, “You need to spend about a thousand dollars a month on marketing, that should be good for your market” doesn’t help the franchisee’s confidence in themselves or the system. Come to franchisees with a detailed plan that is validated based on your experience. A good way to instill confidence in your franchisees is to use accurate numbers and detailed recommendations.

For more information on how to franchise your business, contact Franchise Marketing Systems:

info@FranchiseMarketingSystems.com

Senior Care Franchise Market Segment

seniors-playing-cards-purchasedWe’ve all heard the continued praise for senior care and the market segment that seems to grow with no limit to it’s potential.  It makes sense after all with the explosive baby boomer population entering their late 60’s and 70’s who will all be needing some form of care in the next 10 years.  With longer lifespans, that means a customer for 10,20 or 30 years and an infrastructure that is racing to keep up with the coming demand.

What does the market look like today?

To put simply, the market is big and getting bigger.  Over $13 billion in annual revenues to be exact with a significant growth percentage in excess of 6% per year.  (http://www.ibisworld.com/industry/in-home-senior-care-franchises.html)  The Franchise industry, as it typically does, is a great litmus test for where an industry segment is headed and what is happening in that particular market category.  One not need look any further than the in-home senior care market segment to realize that there are a large number of businesses that have spawned out of this growing market segment:

http://www.entrepreneur.com/franchises/category/perssenior

The market shifted in the last ten years to a significant focus on in-home care versus care provided in a licensed facility.  This shift was caused by several factors, one that the typical customer who could still be at home, typically was choosing to stay at home and receive care that came to their house as opposed to going to a facility.  Another factor driving this transition was the low capital barrier required to open an in-home senior care business as opposed to a fully licensed senior care facility operated from a fixed location.  This lower cost of entry gave rise to hundreds and thousands of “mom and pop” in home senior care service providers across the country in addition to successful franchise networks.

Some favorites in the space:

www.CaringMattersHomeCare.com

www.VisitingAngels.com

In the past several years there has been a renewed growth in the market to fixed location care facilities which has been driven by several factors.  First, the labor market is tight, it is difficult to find good caregivers and fixed location facilities can typically get more from their staff than an in-home care business model.  Second, the senior home concept has changed drastically.  Large fixed location facilities now have lavish, high-end décor and amenities that would make the Ritz Carlton proud.  There also is a segment in senior care franchising that has come to rise with this return to fixed location facilities, a smaller, more cozy senior facility.  The Haven Franchise is a good example of this:

http://thehavenfchs.com/

Regardless of your choice, the senior market continues to be filled with opportunity and seems to be full of growth opportunities for the coming years.  Choose the model that makes the most sense for you and your financial scenario and make sure you are comfortable and driven to take care of people.

For more information on Senior Care Franchises, Contact Us:

www.FranchiseMarketingSystems.com

IFA Conference 2016

The IFA Conference 2016 – San Antonio, TX

San Antonio IFA, Christopher Conner, Franchise Marketing Systems, Franchise Exposition

The conference yet again attracted large crowds of enthusiastic franchise professionals and industry experts from around the world.  The convention was held at the Henry B. Gonzalez Convention Center and attracted many of the world’s best in franchising.  Last year in Las Vegas, attendance numbered 3,880 and over 330 booths, this year in San Antonio was expected to be significantly larger.  Some of the shows premium sponsors included PepsiCo, Berlitz, Franconnect, Menchie’s, BDO and other industry advocates.

https://higherlogicdownload.s3.amazonaws.com/FRANCHISE/4ea56050-5ed6-4b77-8200-af13b46f4919/UploadedFiles/ConvFacts_2016.pdf

The conference kicked off with an amazing presentation by Stanley McChrystal, the Former U.S. General.  Stan McChrystal commenced the general session with a presentation focused on leadership, team development and our evolving business landscape.   Sheryl Connely with Ford Motor Company presented on business trends, the globalization of today’s business environment and overall consumer trends. 

Speakers: http://convention.franchise.org/scheduleprogram/keynotespeakers

The Conference offered a wide variety of mini-super sessions which were full of valuable content and great speakers.  One presenter which left a strong impression  was  Walter Bond who as a former NBA player, presented on Franchise Harmony:  Keys to Building A Strong System Positioned For Explosive Growth, his relating business and franchising to his sports career was entertaining and relevant.

FranPAC (Franchising’s Political Action Committee) was involved in the conference and their presence was felt throughout the meetings and convention hall.  All involved in the franchise industry are aware and interested in the ongoing joint employer negotiations taking place in Washington.  (http://www.franchise.org/franpac)

The franchise round tables were as always a hit and seem to provide some of the most immediate value for franchisors and franchise professionals in attendance.  Tables seat 10-12 people and are lead by panelists to keep the discussion open and productive.  Topics included sales, operations, strategy, training and other core elements of franchise management.  Franchise brands with hundreds of locations shared ideas from a mature brand’s perspective and newer franchisors discussed pertinent issues for start up brands.  All together, the feedback for roundtable sessions was again over the top.

 

 

 

Why do some franchise brands take off?

how to franchise

It is always incredible to see a new brand hit the market and in a short time period take over an area or industry segment.  It almost seems effortless for some franchise systems that get a foot hold in a market and establish themselves over night.  Why is it that some franchises catch hold so quickly and others just don’t get momentum?

First it seems to be driven by a competitive differentiator that others in an industry space just don’t have.  Creamistry, an ice cream brand, delivers ice cream products to customers with a proprietary liquid nitrogen system and creates an experience for the customer, Jimmy Johns used aggressive marketing and a hard push to millennials and younger generations to compete with the sub sandwich market and systems like Hampton Inn offered value and professionalism at a price point not seen in the hotel franchise segment while Restoration 1 utilized a unique marketing and sales model to generate business in the restoration franchise field.  All of these brands set a new norm for their market segment and created a competitive advantage for their franchise. 

These high growth franchise brands committed to marketing and branding.  They look, feel, smell and exude professionalism in all of their marketing and branding.  The website looks great, brochures are high quality and signage is sharp.  When you see a brand that is on fire, you recognize it immediately and with only a glance they create an impact on you.  Investment in branding and then in the franchise marketing plan take these businesses forward quickly in the franchise market.  

Great operating models are inherent in any systems ability to scale and grow into new markets.  Quick moving franchises have solid unit level economics and deliver a consistent customer experience in their locations.  The product looks, feels and tastes the same whether you are in San Antonio or Los Angeles.  Operators and employees are running the business to a solid set of operating protocols and are enthusiastic to be part of the brand.   Company culture is apparent in not only corporate stores but also throughout the franchises locations.  

All together, great franchise brands come from all industry segments and areas of the world.  It seems to take a leader with vision, the aptitude for growth and a willingness to sacrifice short term profit for long term gain.

Contact us if you’ve ever thought about franchising your business; Chris.conner@fmsfranchise.com

Franchise Marketing Systems Client Growth

growth image 1252016The Franchise Marketing Systems suite of brands has expanded to include some truly global franchise systems.  The excitement around the franchise industry and potential for growth in franchising has continued to drive more companies into the ever-expanding franchise industry.  With that energy around the business, Franchise Marketing Systems client’s have experienced record growth in 2015:

http://www.franchisemarketingsystems.com/blog/the-most-performing-franchises-of-2015-franchise-marketing-systems/

The franchise industry in 2016 should have another strong year despite oil driving the stock market down and the pending presidential election.

 

Chris Conner: Franchise Development

The art of franchise development is one that takes time and effort to define.  Good franchises are composed of strong systems, dedicated marketing models, great training platforms and good brands.  Most importantly they always include solid leadership who understand the value of scaling a business.

Christopher Conner has spent almost over 12 years in the franchise consulting field working with small businesses to expand and grow their concepts through franchising and has truly seen the good, bad and ugly in the franchise process.  What is it about franchising that brings out the worst in some business owners?  We read about the lawsuits, angry franchise owners, online rants about some conflict between franchisors and franchisees along with a myriad of other issues that seem to stem from the franchise expansion process.  The fact is that some business owners just aren’t made for franchising.

http://www.franchisemarketingsystems.com/our-team/christopher-james-conner-president-franchise-development/

In Mr. Conner’s experience and time with several hundred different business owners transitioning into the franchise model, there have been some evident truths to the process which have become apparent.

  1. Franchisors need to be patient….and some business owners just don’t have the time or ability to wait.
  2. Business owners who wish to franchise a business need to be long-term, value-oriented professionals.  The franchise business is all about seeing where the voyage is headed, not focused on the mile markers along the way.
  3. Franchising requires strong relationship skills, a good franchisor knows how to get people to like them and then keep that relationship past the sale.
  4. Great franchisors are always looking for ways to add value to the franchise relationship and will continue to invest in the long term vision for the overall business.
  5. Business owners who “Get It” understand that the profitability you make from one or two businesses doesn’t add up to much when compared with the potential for true scale through franchising.