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ANNUAL<br />
MEETING<br />
IFA’S WASHINGTON, D.C. FLY-IN<br />
TEMBER 29-3O, 2O15 // JW MARRIOTT // WASHINGTON, D.C.<br />
PHOTO SPREAD pg. 38<br />
14 Simple Steps to Protect from Hackers<br />
18 Top 10 Reasons to Add a Franchise<br />
Intranet to Your Communications Plan<br />
22 How Websites and Email Marketing<br />
Boost the Bottom Line<br />
26 CRM for Emerging Franchisors and<br />
Established Brands<br />
30 What You Need to Know About<br />
Transformative Technology<br />
THE <strong>DIGITAL</strong> EDGE:<br />
USING TECHNOLOGY TO TRANSFORM YOUR BUSINESS<br />
IFA Names Robert Cresanti<br />
President & CEO<br />
PG. 6
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VOLUME 47, NUMBER 11<br />
CONTENTS<br />
Publisher<br />
Robert Cresanti<br />
Associate Publisher<br />
Scott Lehr, CFE<br />
Executive Editor<br />
Alisa Harrison<br />
Senior Vice President, Media Relations and<br />
Public Affairs<br />
Matthew Haller<br />
Marketing Manager<br />
Courtney Moore<br />
Graphic Design Coordinator<br />
Rahath Alam<br />
Senior Publishing Manager<br />
Andrew Parker<br />
Senior Director of Advertising & Media Solutions<br />
Gregory M. Cook, CFE<br />
Membership & Advertising Manager<br />
Sara Williamson<br />
Senior Coordinator, Membership & Advertising<br />
Elizabeth Bailey<br />
Regional Advertising Senior Managers<br />
Kelley Class<br />
Carly Wooley<br />
Subscription Manager<br />
Rose DuPont<br />
Communications Manager<br />
Jenna Weisbord<br />
Franchising World (ISSN 1041-7311) “Volume 47, Number 11,” is published<br />
monthly by the International Franchise Association, 1900 K St., N.W., Suite<br />
700, Washington, D.C. 20006. Subscription rates are $50.00 per year for 12<br />
issues. Periodicals postage paid at Washington, D.C., and additional mailing<br />
offices. Single copy price: $5.00. IFA members receive Franchising World as a<br />
membership benefit.<br />
POSTMASTER: Send address changes to Franchising World at 1900 K St.,<br />
N.W., Suite 700, Washington, D.C. 20006. When requesting address changes,<br />
please enclose mailing label. Please allow 4–6 weeks for the change of address<br />
to be fully processed.<br />
For advertising information, call: IFA Advertising Department (202) 628-8000.<br />
The full text of Franchising World is available in the electronic versions of<br />
the H.W. Wilson Company’s Business Periodicals Index. For information call<br />
(800) 367-6770; outside the U.S. Call (718) 588-8400. Fax: (718) 590-1617.<br />
Copies of Franchising World issues and articles also are available for<br />
purchase on 16mm microfilm, 35mm microfilm and 105mm microfiche from<br />
University Microfilms Inc., 300 North Zeeb Road, Ann Arbor, MI 48106-1346;<br />
(313) 761-4700. Franchising World is indexed in ABI/INFORM database. (800)<br />
626-2823; Fax (502) 589-5572.<br />
Franchising World welcomes views and comments from its readers.<br />
Correspondence should be addressed to Editor, c/o Franchising World at 1900<br />
K St., N.W., Suite 700, Washington, D.C. 20006. Franchising World reserves<br />
the right to edit letters for publication and also reserves the right to refuse<br />
advertising. With the publication of Franchising World, IFA is not offering<br />
legal, financial or any other professional advice or endorsements. Readers are<br />
encouraged to seek advice from professionals in specialized fields before acting<br />
on any information published herein. The views and opinions expressed in<br />
Franchising World are those of the author(s) and do not necessarily reflect the<br />
views and opinions of IFA members or staff.<br />
For reprint information contact: PARS International Corp., Phone: (212) 221-<br />
9595, Fax: (212) 221-1468, E-mail: reprints@parsintl.com, www.magreprints.<br />
com.<br />
Copyright © 2015 International Franchise Association. Printed in U.S.A.<br />
14<br />
18<br />
22<br />
26<br />
30<br />
FEATURES<br />
Simple Steps to Protect Your Business from Hackers<br />
By Ken Colburn<br />
10 Top Reasons to Add a Franchise Intranet to Your<br />
Communication Plan<br />
By Earl Pinsky<br />
The Digital Edge: How Websites, Social Media and Email<br />
Marketing Can Boost Your Bottom Line<br />
By Amanda Brief<br />
CRM: Sustainable Growth Tool for Emerging Franchisors<br />
and Established Brands<br />
By Stan Friedman, CFE<br />
What You Need to Know About Transformative Technology<br />
By Jamie Izaks and Katharine Nichols<br />
18<br />
6<br />
70<br />
DEPARTMENTS<br />
PEOPLE & NEWS BRIEFS<br />
MULTI-UNIT FRANCHISE INNOVATORS<br />
10 Top Reasons to Add a Franchise Intranet to Your Communication Plan<br />
2 FRANCHISING WORLD NOVEMBER 2015
ANNUAL<br />
MEETING<br />
IFA’S WASHINGTON, D.C. FLY-IN<br />
PHOTO S PREAD<br />
pg. 38<br />
6<br />
10<br />
12<br />
34<br />
38<br />
45<br />
48<br />
IFA INDUSTRY INSIGHTS<br />
People & News Briefs<br />
GOVERNMENT RELATIONS & PUBLIC POLICY<br />
FranPAC Report Card<br />
BY ERICA FARAGE<br />
STATE REPORTS – ADVANCING FRANCHISING<br />
Local Level Assaults on the Franchise Model Continue<br />
BY JEFF HANSCOM<br />
FRANCHISE DEVELOPMENT<br />
Are Background Checks Enough in the Development<br />
Process?<br />
BY KEVIN DRUDGE, CFE<br />
EVENTS<br />
Franchise Action Network Annual Meeting Photo Spread<br />
COMMUNITY SERVICE<br />
Foundation Recognizes “Franchising Gives Back” Award<br />
Winners During Inaugural Dinner<br />
BY JOHN REYNOLDS, CFE<br />
BEST PRACTICES<br />
Don’t Set and Forget: Tips to Avoid Common Errors in<br />
Running Your Franchise System<br />
BY RICK COFFEY<br />
52<br />
54<br />
58<br />
62<br />
66<br />
68<br />
70<br />
FINANCE<br />
Tips for Preventing Credit Card Fraud and Avoiding<br />
Chargebacks<br />
BY KEVIN KOBS<br />
Five Key Lessons to an Effective Franchise Acquisition<br />
BY PETER HOLT, CFE<br />
INTERNATIONAL<br />
International Franchise Expo: Best Opportunity for<br />
Consummating International Sales<br />
BY DR. JOHN HAYES<br />
EDUCATION<br />
Children’s Services Franchise Sector Continues<br />
to Grow<br />
BY CHRIS GOETHE, CFE<br />
MANAGEMENT & OPERATIONS<br />
Launching a Mobile Franchising Model<br />
BY FRANK REPICCI<br />
HONORING AMERICA’S VETERANS<br />
Veteran Mentorship Program Offers Vital Support for<br />
New Owners<br />
BY TODD JACKSON<br />
MULTI-UNIT FRANCHISE INNOVATORS<br />
Franchisees Harness Technology to Improve<br />
Operations, Efficiency<br />
BY CHRIS AND ANGELA ASHCRAFT<br />
38<br />
IFA’S MISSION<br />
The International Franchise Association<br />
protects, enhances and promotes franchising.<br />
IFA’S VISION<br />
IFA: The preeminent voice and acknowledged<br />
leader for franchising worldwide.<br />
EXECUTIVE COMMITTEE<br />
Melanie Bergeron, CFE<br />
TWO MEN AND A TRUCK<br />
Chairwoman<br />
Aziz Hashim<br />
NRD Capital<br />
Vice Chairman<br />
Shelly Sun, CFE<br />
BrightStar Franchising, LLC<br />
Treasurer<br />
Liam Brown<br />
Marriott International<br />
Secretary<br />
Stephen Joyce<br />
Choice Hotels International<br />
Immediate Past Chairman<br />
BOARD OF DIRECTORS<br />
Jania Bailey, CFE<br />
FranNet Franchising, LLC<br />
David Barr<br />
PMTD Restaurants<br />
Cheryl Bachelder<br />
Popeyes Louisiana Kitchen<br />
Charlie Chase<br />
FirstService Brands<br />
Mitch Cohen<br />
Baskin Robbins/Dunkin’<br />
Donuts Bayshore, N.Y.<br />
Jerry Crawford, CFE<br />
Jani-King International, Inc.<br />
Richard Emmett<br />
Dunkin’ Brands, Inc.<br />
Kathleen Gilmartin<br />
Interim HealthCare Inc.<br />
Jeffrey Tews<br />
BrightStar Healthcare of<br />
Madison, WI<br />
S and J Home Care LLC<br />
Franchisee Forum Chairman<br />
Catherine Monson, CFE<br />
FASTSIGNS International<br />
Franchisor Forum Chairwoman<br />
Ryan Cunningham<br />
Javelin Solutions<br />
Supplier Forum Chairman<br />
Robert McDevitt, CFE<br />
Golden Corral Buffet<br />
& Grill<br />
Barry Miller<br />
Sylvan Learning Center<br />
of Girard, Ohio<br />
Tabbassum Mumtaz<br />
Apex Restaurant<br />
Management, Inc.<br />
Matthew Patinkin<br />
Auntie Anne’s Pretzels -<br />
Double P Corporation<br />
Guillermo Perales<br />
Sun Holdings, LLC<br />
Karen Powell, CFE<br />
Decor & You<br />
FranchisEsource Brands<br />
International<br />
Mariana Huberman<br />
UPS Store of Washington, D.C.<br />
Franchisee Forum First Vice<br />
Chairwoman<br />
Darrell Johnson, CFE<br />
FRANdata<br />
Saunda Kitchen, CFE<br />
Mr. Rooter<br />
of Sonoma County, Calif.<br />
Andrew Puzder<br />
CKE Restaurants, Inc.<br />
Michael Seid, CFE<br />
CFWshops<br />
Larry Weinberg, CFE<br />
Cassels Brock &<br />
Blackwell LLP<br />
Supplier Forum First Vice<br />
Chairman<br />
Gordon Logan<br />
Sport Clips, Inc.<br />
FRANCHISING WORLD NOVEMBER 2015 3
IFA PRESIDENT AND CEO’S COLUMN<br />
Franchising’s Bright<br />
Future<br />
AT THE VERY MOMENT that<br />
franchising shows continued<br />
strength, durability and growth<br />
as a business model, it faces<br />
unprecedented challenges.<br />
It is an exciting and<br />
challenging time to take the<br />
helm as CEO of the International<br />
Franchise Association. I accepted<br />
the challenge because I know<br />
an even more remarkable future<br />
awaits beyond these rough<br />
waters, over the horizon.<br />
This association has a dedicated and committed<br />
Board of Directors who generously give their talent, time<br />
and experience. The IFA staff is second to none and<br />
outperforms and out-delivers for our membership far<br />
beyond any other association in its class, and I could not<br />
be more honored at the opportunity to lead this team.<br />
We fight legislative battles because the first word in our<br />
mission statement is “protect” — and right now, we have<br />
to put enormous time, energy and resources into these<br />
battles. I know we will emerge from our local, state and<br />
federal legislative and regulatory challenges stronger and<br />
more effective than ever.<br />
We will win these policy battles because we will win<br />
the hearts and minds of policymakers, and the people<br />
who elect them, with a new message that heralds the<br />
unsurpassed benefits of franchising to this country. We<br />
will explain that franchising creates the jobs and starts the<br />
careers that contribute to each community in every town<br />
across the U.S.<br />
Our new “Changing The Narrative Task Force,” led<br />
by IFA Vice Chair Aziz Hashim, managing partner of<br />
NRD Capital, is working on a fresh set of messaging<br />
recommendations, due later this year, that will focus on this<br />
and other aspects of the extraordinary, positive story that<br />
franchising has to tell.<br />
The numbers are clear. Franchising is on track to grow<br />
at rates that exceed economy-wide growth, according to<br />
the Franchise Business Outlook third quarter report (see<br />
story on page 7). Although employment growth economywide<br />
has moderated, employment in the franchise<br />
sector continues to outpace growth in non-franchise<br />
businesses, as it has in each of the last four years. The<br />
report anticipates franchise employment to increase 2.9<br />
percent in 2015 (to 8.9 million), while total private nonfarm<br />
employment will increase 2.4 percent. The report is<br />
forecasting output growth in nominal dollars for franchise<br />
businesses to increase 5.5 percent in 2015 (to $891 billion),<br />
which is faster than the 5.0 percent gain in 2014 and up<br />
slightly from our June forecast.<br />
A positive message alone is not enough to win,<br />
however. We must continue to fight those groups that<br />
mischaracterize and malign franchising to advance their<br />
own financial interests. We must continue to fight those<br />
who seek to harm the franchise model by hijacking the<br />
regulatory process. The indefensible overreach by the U.S.<br />
National Labor Relations Board (NLRB) to hold franchisors<br />
and franchisees liable as “joint employers,” on a wholesale<br />
basis, would ultimately destroy the franchise model and<br />
must be stopped.<br />
What is more fundamental to employment than<br />
knowing who your boss is? At the end of September, close<br />
to 400 business leaders descended on Capitol Hill during<br />
the Franchise Action Network Annual Meeting to push<br />
for the passage of H.R. 3459/S. 2015, the Protecting Local<br />
Business Opportunity Act. The legislation will preserve the<br />
franchise model for small business ownership, invalidate<br />
the NLRB’s ruling in Browning-Ferris Industries and restore<br />
the proper legal standard for determining who is a joint<br />
employer. We are actively seeking cosponsors for the<br />
bill, and will use all the tools in our arsenal to get this bill<br />
signed into law.<br />
IFA will fight tooth and nail against jurisdictions, such<br />
as Seattle, that would discriminate against franchise<br />
businesses by implementing policies that treat franchisees<br />
unfairly. This message resonates and has helped legislators<br />
see the light in Chicago, Kansas City, St. Louis and<br />
elsewhere.<br />
Even as we develop our new messaging and newly<br />
proclaim the overwhelmingly positive and inspirational<br />
side of franchising, some things will not change.<br />
Our mission, to “Protect, Promote and Enhance”<br />
franchising will not change.<br />
Our passion will not change.<br />
Our dedication will not diminish.<br />
Along with the support of the IFA Board of Directors<br />
and our members, the belief in our mission will grow<br />
stronger as we navigate the present danger to the bright<br />
future just over the horizon.<br />
4 FRANCHISING WORLD NOVEMBER 2015
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PEOPLE & NEWS<br />
BRIEFS<br />
IFA Names New<br />
President & CEO<br />
The IFA Board of Directors has selected Robert Cresanti as President & CEO for the largest<br />
organization that represents franchisors, franchisees and suppliers. “We could not be more pleased<br />
that Robert Cresanti has accepted this position,” said IFA Chair Melanie Bergeron, CFE, chairwoman<br />
of TWO MEN AND A TRUCK International. “As IFA executive vice president of Government Relations<br />
& Public Policy and Interim COO, Robert has proven experience in representing the industry during<br />
very challenging times and brings seasoned judgement and leadership to this important position.”<br />
Cresanti joined IFA in 2014 from SAP America, Inc., where he served as vice president of Corporate<br />
Affairs & Government Relations since 2009.<br />
In his public service, he was confirmed by the U.S. Senate in 2006 as Under Secretary for<br />
Technology for the Department of Commerce, the highest ranking U.S. official charged specifically<br />
with representing and advocating for the United States high tech industry globally. He chaired multiple bilateral technology trade<br />
missions for the U.S. government in the European Union, Asia and Russia and served as co-chair for the White House PCAST, the<br />
President’s Council of Advisors on Science and Technology. In his nearly decade-long service on Capitol Hill, ranging from Committee<br />
Chief of Staff in the Senate, to Legislative Counsel in the House, he handled legislation before the Banking, Judiciary, Commerce,<br />
Government Affairs and Finance Committees.<br />
As a trade association executive, he served as vice president of Global Public Policy for the Business Software Alliance from 2001<br />
to 2006, representing the technology industry in international negotiations and complex regulatory, legislative and commercial legal<br />
matters on a global level. He also served as senior vice president and general counsel of ITAA (now TechAmerica). Immediately prior to<br />
joining SAP, he served as the CEO of the IPXI, the Intellectual Property Exchange.<br />
Cresanti received a law degree from Baylor University School of Law, a bachelor’s degree in Political Science and International<br />
Relations from Austin College. He also received a certificate of EC Law from the University of Glasgow Law School and completed<br />
master’s courses in International Relations from Johns Hopkins SAIS. He replaces Steve Caldeira, CFE, who stepped down on Sept.<br />
16.<br />
PEOPLE<br />
Jon Shell is the new chief<br />
financial officer of the Dwyer<br />
Group and Grayson Brown is<br />
the company’s new general<br />
counsel. Shell was previously<br />
CFO of Barbeque Integrated. Brown most<br />
recently served as general counsel for<br />
Midas.<br />
Phil Russo has joined Captain D’s as vice<br />
president of real estate. He comes from<br />
FOCUS Brands, most recently serving as<br />
vice president of real estate.<br />
Todd Houghton is the winner<br />
of a free registration for IFA’s<br />
2016 Convention for filling out<br />
an IFA communications survey.<br />
Houghton works for CKFI, a<br />
Sodexo company, as director of franchise<br />
network-southeast. With 20-plus years of<br />
experience in franchisor and franchisee<br />
roles, his experience lies in brand<br />
development, business development,<br />
change management, operational strategies<br />
and leadership management. He lives in<br />
Atlanta, Ga. Congratulations Todd! For more<br />
information and to register for the #IFA2016<br />
Convention, visit convention.franchise.org<br />
Marty Welch has joined Legacy Franchise<br />
Group as chief development officer. He has<br />
25 years of experience in the franchising<br />
industry.<br />
6 FRANCHISING WORLD NOVEMBER 2015<br />
Office Pride Commercial<br />
Cleaning Services has added<br />
Gerry Henley as executive vice<br />
president. Henley was previously<br />
president of Kitchen Solvers in<br />
La Crosse, Wis.<br />
Hanover, Mass.-based Lapels Dry Cleaning<br />
has hired David Grippi as director of<br />
operations. Grippi has more than 20 years<br />
of experience in the dry cleaning industry,<br />
including at Dependable Cleaners, Seitz<br />
Chemical and The Cleanist.<br />
In-home care and medical staffing<br />
franchise BrightStar Care has hired Steve<br />
Schildwachter as chief marketing officer<br />
and Tom Lehr as chief financial officer.<br />
Schildwachter was formerly executive vice<br />
president and chief marketing officer for rVue<br />
based in Elmhurst, Ill. Lehr comes from AIA<br />
(Adventures in Advertising) Corp., where he<br />
was CFO.<br />
Children’s Lighthouse Learning<br />
Centers has appointed Monica<br />
Brown to serve as franchise<br />
development manager. Brown<br />
previously worked as franchise<br />
development coordinator for Gold’s Gym<br />
International.<br />
Huddle House has named<br />
Christina Chambers vice<br />
president of franchise<br />
development. Chambers has<br />
worked in leadership positions with<br />
Global Franchise Group, Quizno’s and Great<br />
Wraps. She was most recently director of<br />
franchise development for Brightway Insurance.<br />
Karina Rodriguez has joined the marketing<br />
team at Pizza 9.<br />
Team.<br />
Home Instead has appointed Mike<br />
Boyer vice president of<br />
international operations. He will<br />
also serve as a member of the<br />
company’s Executive Leadership
ADVOCACY IN ACTION<br />
Business Owners Testify on Joint<br />
Employment Standard<br />
Ciara Stockeland testifies Oct. 6 beofre the U.S.<br />
Senate HELP committee.<br />
Ciara Stockeland, owner and operator of<br />
Fargo, N.D.-based MODE designer outlets,<br />
testified before the U.S. Senate Committee on<br />
Health, Education, Labor and Pensions (HELP)<br />
Oct. 6 on behalf of the Coalition to Save Local<br />
Businesses (CSLB). IFA is a founding member<br />
of the coalition. Stockeland shared her story<br />
of small business ownership and asked the<br />
Committee to take action to reverse the U.S.<br />
National Labor Relations Board decision to alter<br />
the definition of joint employer.<br />
Nothing Bundt Cakes Franchisee Mara<br />
Fortin testifies before the U.S. Senate HELP<br />
Committee.<br />
“Our businesses are threatened because<br />
the NLRB’s new, ‘indirect’ standard may make<br />
employers liable for employees, even if they<br />
are not in their direct control,” she told the<br />
committee. “No longer can businesses be sure<br />
they will be safe from liability simply because<br />
they do not control the hiring, wages, or<br />
supervision of another business’s employees,<br />
Stockeland added. “No one can safely assure<br />
me or any other small business that we are safe<br />
from joint employer liability with our franchisees<br />
or contractors.”<br />
HELP Committee Chairman Sen. Lamar<br />
Alexander (R-Tenn.) stated in his opening<br />
remarks that the NLRB action represents “the<br />
biggest attack on the opportunity for small<br />
business men and women in this country to<br />
make their way into the middle class that we’ve<br />
seen in a long, long time.”<br />
Stockeland’s testimony occurred a week<br />
after three small business owners testified on<br />
Sept. 29 before the U.S. House Committee on<br />
Education and the Workforce, Subcommittee<br />
on Health, Employment, Labor, and Pensions.<br />
The owners requested action to reverse the<br />
NLRB decision to alter the joint employer<br />
standard. Mara Fortin, a California-based<br />
Nothing Bundt Cakes franchisee, stated in<br />
her testimony that from a legal, business<br />
and cultural perspective, “the joint employer<br />
standard is harmful to the future of my locallyowned<br />
business. The real world consequence<br />
of the NLRB’s decision is that it will lead to<br />
a loss of autonomy for local small business<br />
owners.”<br />
Burger King Franchisee Ed Braddy testifies<br />
before the U.S. Senate HELP Committee.<br />
Ed Braddy, a Maryland-based Burger<br />
King franchisee, echoed Fortin’s concerns,<br />
stating that, “among other devastating<br />
consequences, by expanding liability, I<br />
believe franchisors will be forced to protect<br />
themselves. The NLRB ruling will destroy<br />
the franchise model and franchisee small<br />
business owners along with it.”<br />
GROWTH<br />
2015<br />
FRANCHISE<br />
BUSINESS ECONOMIC OUTLOOK<br />
Franchise Businesses Create Jobs Faster than Other Businesses<br />
EMPLOYMENT 2007-2015:<br />
<br />
0.4%<br />
-0.9%<br />
-2.8%<br />
-5.2%<br />
-0.3%<br />
-0.8%<br />
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015<br />
New Report Shows Steady Progress for<br />
Franchise Industry<br />
The franchise industry will continue to grow<br />
at rates that exceed economy-wide growth,<br />
according to the Franchise Business Outlook<br />
third quarter update report from the IFA<br />
Educational Foundation and IHS Economics.<br />
“Franchising is a growth engine for small<br />
businesses. Not only are franchises creating<br />
new businesses faster than other businesses,<br />
the outlook report signals steady growth<br />
in all franchise sectors over the last three<br />
months despite the struggles of the broader<br />
economy,” said IFA’s Educational Foundation<br />
President John Reynolds, CFE. The outlook<br />
forecasts a 1.6 percent increase in the<br />
number of franchise businesses in 2015,<br />
2.1%<br />
1.8%<br />
FRANCHISING<br />
2.3% 2.5%<br />
2.2%<br />
2.1%<br />
ALL BUSINESSES<br />
2.9%<br />
2.3%<br />
2.9%<br />
2.4%<br />
along with a 2.9 percent uptick in employment<br />
at franchise establishments — higher than the<br />
2.4 percent growth rate expected in private<br />
sector non-farm employment.<br />
Growth of the output of franchise<br />
businesses in nominal dollars will accelerate<br />
to 5.5 percent in 2015, while the gross<br />
domestic product of the sector will rise by<br />
5.2 percent to $521 billion. According to IFA’s<br />
Business Leader Survey completed Sept.<br />
21, IFA members are worried about NLRB’s<br />
change to the joint employer standard. The<br />
survey shows that 94 percent believe a<br />
change in the standard would raise the cost<br />
of doing business. Read the full Franchise<br />
Business Outlook Report here: http://www.<br />
franchise.org/sites/default/files/Franchise_<br />
Business_Outlook_September_2015.pdf<br />
Three new groups have reached agreements<br />
to develop a total of 27 new Del Taco<br />
restaurants within central California.<br />
Mike Sater inked a 20-store development<br />
agreement spanning six counties. His first two<br />
stores will open in Fresno and Clovis, and a<br />
third is planned for Merced, Calif.<br />
Edible Arrangements has opened its first<br />
franchise on a U.S. military base at Fort Bragg<br />
in North Carolina. Franchisees Laverna and<br />
Martinez Alexander will operate the location,<br />
serving more than 250,000 soldiers, retirees,<br />
family members and civilians.<br />
Sam Thompson has acquired the territory<br />
for the existing Valpak of Greater Charleston,<br />
S.C. The territory involves nearly 130,000<br />
households in Charleston, Mount Pleasant,<br />
Summerville, James Island, Goose Creek and<br />
Moncks Corner.<br />
9Round has opened a location in Bethlehem,<br />
Pa. The expansion represents the 250th club<br />
in the company’s franchise network.<br />
World of Beer has opened its first location in<br />
the New York City area, in Chelsea. The site<br />
features more than 5,000 square feet of space<br />
with a 1,200-square-foot indoor patio.<br />
Kit Burgess has purchased a<br />
new franchise for Steamatic in<br />
Warren, Mich. The location will<br />
serve northern Detroit.<br />
SpeedPro Imaging has relocated its<br />
corporate headquarters from Phoenix, Ariz.<br />
to Denver, Colo. The new space includes a<br />
training and technical support center.<br />
(Continued on page 8)<br />
FRANCHISING WORLD NOVEMBER 2015 7
(Continued from page 7)<br />
INTERNATIONAL<br />
D.P. Dough Franchising has signed a multiunit<br />
agreement with franchisee group, Nine<br />
Doughs, to open nine restaurants in college<br />
towns throughout Ohio, Michigan, Indiana<br />
and Kentucky. The multi-year pact involves a<br />
number of investors in Nine Doughs who have a<br />
background in the music industry.<br />
resident Thomas Emmons will own and operate<br />
the Arizona locations. The restaurant is also<br />
expanding in Ohio and northern Kentucky,<br />
with two development agreements covering<br />
13 stores. Owner/operators Kevin and Randy<br />
Daniel (who are brothers) have added eight<br />
stores to an existing agreement for five.<br />
IFA-sponsored Franchise Trade Mission<br />
Explores Central America<br />
From Sept. 20-26, a U.S. Franchise Trade<br />
Mission sponsored by IFA and Franchise Times<br />
visited Costa Rica, Guatemala and El Salvador.<br />
Thirteen IFA members joined the mission:<br />
Arby’s, Berlitz Franchising Corp., Bonchon<br />
Chicken, FASTSIGNS, Fuddruckers, Kona Grill,<br />
Mosquito Squad, Russo’s New York Pizzeria,<br />
Signal 88 Security, Sky Zone, Smashburger,<br />
Wayback Burgers and Xtreme Lashes. Mission<br />
participants received market briefings, went<br />
on site visits and participated in matchmaking<br />
meetings with pre-screened prospective<br />
franchisees. Many participants were impressed<br />
by the quality of investors, with one executive<br />
calling the Guatemala meetings the best in<br />
his 35-year career. To see more photos, visit<br />
www.ifafranblog.com/franchise-trade-missionexplores-central-america.<br />
MERGERS, ACQUISITIONS & ALLIANCES<br />
Doherty Enterprises has acquired 10<br />
Applebee’s locations in the Miami area from<br />
Fort Wayne, Ind.-based Apple Sauce, Inc. The<br />
agreement increases the company’s Applebee’s<br />
locations from 99 to 109, bringing Doherty’s<br />
restaurant portfolio to 164 locations in four<br />
states.<br />
Cheng Cohen served as lead counsel for NRD<br />
Capital Management’s purchase of Frisch’s<br />
Restaurants. The purchase represents the<br />
firm’s first acquisition through its investment<br />
fund NRD Capital Partners.<br />
Pet Supplies Plus has created a public dog<br />
park on the grounds of the brand’s internal<br />
distribution center in Seymour, Ind. The<br />
franchise company has transformed part of<br />
the grounds into Pet Supplies Plus Canine<br />
Crossroads.<br />
HONORS & AWARDS<br />
MODE is one of the winners of the 2015<br />
SCORE Awards, recognizing excellence in<br />
American small business owners. To select<br />
the 2015 SCORE Awards honorees, SCORE<br />
asked small business owners and mentors to<br />
nominate their business by sharing ways small<br />
businesses have made the world a better place<br />
and how meaningful relationships between<br />
SCORE mentors and clients have helped<br />
businesses prosper.<br />
Dickey’s Barbecue Restaurants has reached<br />
a development agreement recently for five<br />
additional stores in the state of Washington.<br />
The new Dickey’s Barbecue Pit locations cover<br />
eastern Washington in the Spokane region.<br />
Owner/Operator Mark Engberson is partnering<br />
with Palouse Restaurant Group to open the<br />
five new stores. Dickey’s has also signed a<br />
deal to open four new locations in Chandler,<br />
Gilbert, Mesa and Queen Creek, Ariz. Phoenix<br />
MARKETING<br />
OUTREACH<br />
Fish Consulting has added a number of new<br />
clients: Kids ‘R’ Kids Learning Academies, World<br />
of Beer, Great Clips and Tin Drum Asiacafe. The<br />
Hollywood, Fla.-based public relations firm has<br />
also agreed to represent five brands within the<br />
Dwyer Group — Mr. Rooter, Glass Doctor, Aire<br />
Serv, Mr. Appliance and Rainbow International.<br />
Non-profit organization Tee It Up for the Troops has<br />
selected the first recipients of a grant designed to help military veterans<br />
open their own gyms. Hannah and Tristan Ambrozewski, both Iraq<br />
War veterans, will use a $125,000 grant and a $125,000 loan as start-up<br />
capital to open an Anytime Fitness gym near Fort Bragg in Fayetteville,<br />
N.C. Hannah Ambrozewski served as an intelligence analyst with<br />
the U.S. Army from 2005 to 2012, and Tristan Ambrozewski was also<br />
an Army intelligence analyst who now performs similar duties as a<br />
U.S. Department of Defense contractor. Anytime Fitness’ Heartfirst<br />
Charitable Foundation provided a grant to Tee It Up for the Troops,<br />
which then selected the Ambrozewskis as recipients from a pool of<br />
dozens of candidates.<br />
Captain D’s continues to raise money for the Share Our Strength’s<br />
Dine Out for No Kid Hungry campaign. The campaign connects kids in<br />
need with nutritious food and teaches families how to eat healthy and<br />
affordable meals. Captain D’s locations participated in the program<br />
during a fundraising drive during September. The company raised more<br />
than $30,000 for the charity in summer 2015 through 29 restaurants in<br />
Birmingham, Ala.<br />
More than 40 Ben’s Soft Pretzels locations are raising funds<br />
for the Intrepid Fallen Heroes Fund. For a minimum $1 donation,<br />
customers can add to a “battleship” that will be posted in local Ben’s<br />
Soft Pretzels bakeries. The program’s goal is to top fundraising efforts<br />
of nearly $17,000 from early 2015 that went to the same organization.<br />
Wienerschnitzel raised $125,000 at the annual fundraising gala<br />
for the company’s marquee charity partner, The Literacy Project, a<br />
non-profit organization dedicated to raising the reading skill levels<br />
of disadvantaged youth. Wienerschnitzel has also partnered with the<br />
McGrath family to raise awareness for Be the Match, a bone marrow<br />
organization. Rhowan and Bergen McGrath, the daughters of motocross<br />
champion Jeremy McGrath, started selling homemade lemonade at<br />
their father’s races to help raise money for Be the Match after their<br />
mother, Kim, was diagnosed with leukemia. Wienerschnitzel will<br />
continue to supply the McGrath Lemonade Stand with hot dogs for sale<br />
at each Lucas Oil off-road race event throughout 2015. The company<br />
will match funds raised up to $1,500 to benefit the organization.<br />
8 FRANCHISING WORLD NOVEMBER 2015
Will Your Brand Be Next?
REPORT<br />
CARD<br />
Erica Farage is senior director of political affairs &<br />
grassroots advocacy for the International Franchise<br />
Association. Find her at fransocial.franchise.org.<br />
IFA’s political action committee, FranPAC, supports<br />
pro-franchise, pro-business candidates for U.S.<br />
Congress.<br />
<br />
<br />
following “report card.”<br />
2015-2016 Cycle Expenditures: $217,500<br />
Republicans: $175,000<br />
Democrats: $32,000<br />
Other: $10,000<br />
U.S. Senate:<br />
Ayotte, Kelly (R-NH) ....................................................$5,000<br />
..............................................$1,500<br />
......................................................$10,000<br />
....................................................$1,000<br />
......................................................$5,000<br />
...............................................$2,500<br />
Heller, Dean (R-NV) ....................................................$5,000<br />
..................................................$1,000<br />
................................................$3,500<br />
...................................................$2,500<br />
...............................................$5,000<br />
..................................................$5,000<br />
..........................................................$2,500<br />
.......................................................$2,500<br />
Vitter, David (R-LA) ......................................................$1,000<br />
U.S. House of Representatives:<br />
......................................$3,000<br />
Byrne, Bradley (R-AL-01) .............................................$2,500<br />
.............................................$1,500<br />
...................................................$2,500<br />
Curbelo, Carlos (R-FL-26) ............................................$5,000<br />
Davis, Rodney (R-IL-13) ...............................................$1,000<br />
Donovan, Dan (R-NY-11) .............................................$2,500<br />
Farr, Sam (D-CA-20) .....................................................$1,000<br />
Foxx, Virginia (R-NC-05) ..............................................$2,500<br />
.........................................$2,500<br />
Jolly, David (R-FL-13) ...................................................$1,000<br />
................................................$10,000<br />
.............................$2,500<br />
Lipinski, Daniel (R-IL-03) .............................................$5,000<br />
..................$5,000<br />
..........................................$1,000<br />
Farr, Sam (D-CA-20) .....................................................$1,000<br />
...........................................$1,000<br />
Pitts, Joe (R-PA-16) .......................................................$1,500<br />
...............................................$1,000<br />
Ross, Dennis (R-FL-15) ................................................$1,000<br />
Scalise, Steve (R-LA-01) ...............................................$1,000<br />
.............................................$1,000<br />
...............................................$1,000<br />
Stefanik, Elise (R-NY-21) ..............................................$1,000<br />
.................................................$5,000<br />
...............................................$1,000<br />
.............................................$2,500<br />
PAC to PAC:<br />
American Society of Association Executives PAC .........$5,000<br />
Blue Dog PAC .............................................................$5,000<br />
Bluegrass Committee ...................................................$5,000<br />
Democratic Congressional Campaign Committee ........$15,000<br />
...........................................$2,500<br />
National Republican Congressional Committee ...........$15,000<br />
National Republican Senatorial Committee .................$15,000<br />
New Democrat Coalition .............................................$5,000<br />
Reclaim America PAC ..................................................$5,000<br />
Republican National Committee ..................................$15,000<br />
Save America PAC .......................................................$2,500<br />
................................$5,000<br />
Voice for Freedom PAC ................................................$5,000<br />
10 FRANCHISING WORLD NOVEMBER 2015
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SUPPLIER<br />
FORUM
STATE ADVOCACY – ADVANCING FRANCHISING<br />
Local Level Assaults on<br />
Franchise Model Continue<br />
More minimum wage battles are on the horizon. IFA is already<br />
<br />
<br />
BY JEFF HANSCOM<br />
A<br />
mere three months ago, I wrote a column in this<br />
space titled “An Increasingly LOCAL Fight for<br />
$15” and it seems only appropriate to revisit<br />
those words again. A bit of background may help frame<br />
the renewed discussion: At its core, the “Fight for $15”<br />
movement and the resulting ordinances can be broken<br />
down into three distinct camps.<br />
• First, there are cities raising the wage for all hourly<br />
employees at the same time and at the same<br />
rate, i.e. every business has until 2020 to increase<br />
minimum wage rates to $15 per hour.<br />
• Next, there are cities raising the wage to $15,<br />
but on different timetables based on the size of<br />
the business, i.e. businesses with less than 250<br />
employees have five years to get to $15, while<br />
businesses with 250-plus workers may have three<br />
years to get to $15.<br />
• Third, and most concerning to the franchise model,<br />
there is what I will refer to as the “Seattle model,”<br />
which attempts to raise the hourly rate to $15 on<br />
different timetables for different businesses by<br />
dividing businesses into big versus small, but<br />
including local franchise establishments in the<br />
definition of “big” based solely on their affiliation<br />
with a national brand.<br />
In essence, this creates an unleveled playing field by<br />
forcing a franchise sandwich store with 10 employees to<br />
pay $15 an hour to its employees on a different schedule<br />
than the sandwich shop next door, selling the same<br />
products, but which is not affiliated with a national brand,<br />
thus giving the non-franchise sandwich shop an unfair<br />
competitive advantage.<br />
OTHER LOCALITIES FOLLOW SUIT<br />
Since writing on this topic in August, there have been<br />
developments in a number of localities including Portland,<br />
Maine; Kansas City and St. Louis, Mo.; and Seattle.<br />
• In Portland, the ballot measure calling for an increase<br />
in the minimum wage to $15 with language that mirrors<br />
the Seattle ordinance (discriminates against franchises<br />
based on “big” business definition) is moving forward<br />
and depending on the date you read this article, has<br />
been put to the voters.<br />
• In Seattle, the International Franchise Association’s<br />
litigation against the city continues with oral arguments<br />
having been heard by the Ninth Circuit Court of Appeals<br />
on Sept. 1, 2015. As of this writing, an opinion has not<br />
yet been released.<br />
• In St. Louis and Kansas City, where both cities approved<br />
minimum wage increases late in the summer, after many<br />
meetings and discussions with Kansas City officials, IFA<br />
was able to have the discriminatory language removed.<br />
However, the same was unfortunately not true in St. Louis,<br />
where a lawsuit has been filed challenging the ordinance on a<br />
number of legal points. IFA is financially supporting the suit, but<br />
is not a named party.<br />
NEW YORK: LITIGATION PROBABLE<br />
Not to be left out, the state of New York and Gov. Andrew<br />
Cuomo (D-N.Y.) circumvented the legislature in Albany and<br />
convened a “Wage Board” to examine wages within the quickservice<br />
restaurant industry.<br />
12 FRANCHISING WORLD NOVEMBER 2015
Given Cuomo’s longstanding close relationship with the<br />
Service Employees International Union and the appointment<br />
of an SEIU official to the three member board, it was no<br />
surprise when the board returned its recommendation that<br />
wages in the quick- service industry be increased to $15 per<br />
hour.<br />
Somewhat surprisingly, or not, depending on your opinion<br />
of New York politics, the Wage Board to examine wages in the<br />
quick-service industry did not actually include a representative<br />
from that industry, but is instead composed of the mayor of<br />
Buffalo, an SEIU representative and an online retail CEO.<br />
In response to his calling of the Wage Board, the IFA<br />
cautioned Cuomo against this discriminatory approach to<br />
raising wages, and submitted official testimony to the panel.<br />
Additionally, IFA offered testimony to the N.Y. Senate Labor<br />
Committee reiterating our concerns with both the formation<br />
of the board itself and the potential U.S. Constitution<br />
Commerce Clause issues.<br />
As of this writing, the N.Y. Department of Labor is moving<br />
forward with implementing the board’s recommendations,<br />
with the first increase in the hourly wage slated to go into<br />
effect before the end of 2015. This despite a litany of concerns<br />
with the board’s formation, not to mention the exceedingly<br />
vague definition of which businesses are truly covered by<br />
these new rules. Stay tuned as litigation is almost a certainty.<br />
MORE DISCRIMINATORY LEGISLATION TO COME<br />
Separate and apart from the ongoing minimum wage<br />
battles across the country, discriminatory predictive<br />
scheduling bills and ballot measures are beginning to crop<br />
up across the country. Right now, legislation is pending in<br />
Massachusetts, as is a potential ballot measure mirroring the<br />
legislation, both of which discriminate against the franchise<br />
industry.<br />
Discriminatory scheduling bills are likely to follow a similar<br />
path as the minimum wage bills and will likely continue to<br />
arise at the state and local levels going forward. Needless<br />
to say, IFA will continue to fight against these discriminatory<br />
bills, ordinances and ballot measures at every turn.<br />
With the federal government moving at a glacial pace on<br />
myriad issues, it remains very clear these fights will continue in<br />
state houses and city halls across the nation and will continue<br />
being pushed by SEIU in conjunction with their ongoing<br />
unionization efforts. There is no doubt there will be more<br />
battles on the horizon, but IFA is already fighting on several<br />
fronts and will continue to engage at every level. <br />
Jeff Hanscom is director of state government<br />
relations and public policy for the International<br />
Franchise Association. Find him at fransocial.<br />
franchise.org.<br />
ACA COMPLIANCE<br />
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<br />
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<br />
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FRANCHISING WORLD NOVEMBER 2015 13
FEATURES<br />
Simple Steps<br />
to Protect<br />
Your Business<br />
from Hackers<br />
You don’t have to be a security expert to see that cybercrime is on<br />
the rise and that businesses are a prime target for hackers.<br />
BY KEN COLBURN<br />
The nature of cybercrime shifted years ago from<br />
those that did it for kicks to highly sophisticated<br />
organized crime groups.<br />
The speed, convenience and anonymity of the<br />
Internet allow them to operate in countries outside of<br />
our reach and target U.S. businesses.<br />
The reality is that everything is hackable, but are<br />
you accidentally making it easier to become a victim?<br />
Random acts of hacking occur every day because<br />
unsuspecting victims made it too easy for these<br />
sophisticated criminals.<br />
You may recall in the distant past, thieves would<br />
drive around affluent neighborhoods with various<br />
garage door openers to see which homes could be<br />
easily entered.<br />
Garage door manufacturers produced newer<br />
security measures in transmitters to combat this simple<br />
“hack,” but if you didn’t update your equipment, you<br />
continued to be an easy victim.<br />
Today, if you don’t continually update your security<br />
measures, the same thing happens.<br />
PASSWORDS: FORGET EVERYTHING YOU’VE<br />
EVER BEEN TOLD<br />
Passwords are generally all that stand between<br />
a motivated cybercriminal and your sensitive<br />
information, but they are the bane of your online<br />
existence.<br />
Weak and default passwords are two of the most<br />
common areas of exposure we come across when<br />
working with most businesses.<br />
At least eight characters long, upper and lowercase<br />
letters, numbers and special characters is what<br />
most of you have been taught.<br />
Unfortunately, what the tech industry has taught<br />
you is how to create difficult to remember passwords<br />
that are easy for hackers to break.<br />
With “brute force” computing power so readily<br />
available to hackers these days, no matter what<br />
combination of the 8 letters, numbers and special<br />
characters that you’ve been trained to use, it’ll take<br />
just over one minute to break it.<br />
It doesn’t matter what combination you use,<br />
because it’s a simple math problem that can be solved<br />
quickly when your password is only eight characters<br />
long (you can see for yourself with Gibson Research’s<br />
Haystack tool: https://grc.com/haystack.htm).<br />
Simply making passwords longer will exponentially<br />
increase the security against this common exploit<br />
known as a brute force attack (a sophisticated highspeed<br />
guessing process).<br />
All your passwords should be at least 15 characters<br />
long. Once you’ve stopped gasping at the thought of<br />
remembering multiple random strings of 15 characters,<br />
here’s an example:<br />
‘I Hate Passw0rds!’ is a 17-character password that<br />
takes the brute force time from 1.12 minutes (for any<br />
eight-character password) to 13.44 billion centuries.<br />
Use pass-phrases instead of passwords:<br />
Going 2 Aruba in 2016! (22 characters)<br />
Married for 25 years! (21 characters)<br />
14 FRANCHISING WORLD NOVEMBER 2015<br />
(Continued on page 16)
Don’t Reinvent<br />
the Wheel<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
USA UK CHINA<br />
FaegreBD.com/franchise
(Continued from page 14)<br />
Some systems don’t allow spaces as special characters,<br />
so you can either use the underscore or just skip the<br />
spaces.<br />
There are certainly other ways for hackers to<br />
compromise your passwords, but by extending the<br />
length, you’ve taken yourself out of the crosshairs of a<br />
very common exploit.<br />
DEFAULT PASSWORDS<br />
When it comes to the equipment that you use, every<br />
hacker knows the default password to every device<br />
connected to the Internet. Leaving passwords at the<br />
factory default for any device you use (routers, webcams,<br />
etc.) makes it much easier for hackers to wreak havoc.<br />
LOW TECH PASSWORD MANAGEMENT<br />
Using unique longer passwords for every account<br />
makes remembering all your passwords pretty difficult, if<br />
not impossible, so finding a password manager of some<br />
sort is the key.<br />
Although there are lots of password management<br />
programs, don’t forget that a low-tech approach may be<br />
all you need.<br />
Writing down your passwords and keeping it buried<br />
somewhere in your desk is a far better option than using<br />
the same password on every account you own.<br />
The total number of “hackers” that can gain access<br />
to a physical piece of paper buried somewhere in your<br />
desk pales in comparison to the millions that know to try<br />
a compromised password everywhere.<br />
The key is to not make it obvious that the document<br />
(physical or electronic) is a list of passwords.<br />
Don’t use the word password anywhere on the<br />
document and come up with your own encryption scheme<br />
just in case someone does find it.<br />
For instance, add four random characters to the<br />
beginning of each entry so only you will know to ignore<br />
them.<br />
While this approach isn’t technically as secure as using<br />
an encrypted password management program, it’s a heck<br />
of a lot safer than using the same password everywhere<br />
and easier for non-tech savvy users to execute.<br />
TWO-FACTOR AUTHENTICATION<br />
If you assume (and you should) that at some point your<br />
passwords are going to be compromised, you need to<br />
take some steps to protect yourself so you’ll know what to<br />
do when it happens.<br />
A very powerful security tool that can thwart cyberthieves<br />
even if they get your username and password is<br />
available for just about every online account you have.<br />
It’s referred to as two-factor authentication (or two-step<br />
verification) and it refers to something you know (your<br />
password) and something you own (your smartphone).<br />
Once it’s turned on, whenever you enter your username<br />
and password from a computer or mobile device that isn’t<br />
recognized by the system, a short code will be sent to<br />
your phone to verify that it’s really you.<br />
If you don’t enter the code, it won’t let you — or a<br />
hacker that has stolen your login info — to access the<br />
account.<br />
You’ve been using two-factor authentication forever<br />
whenever you withdraw money from an ATM. You have to<br />
have your debit card (something you own) and your PIN<br />
(something you know).<br />
Imagine a debit card that didn’t require a PIN; that’s how<br />
you should view your online accounts without two-factor<br />
authentication activated.<br />
PASSWORD FRAUD ALERTS<br />
The best part of using two-factor authentication is<br />
that it automatically becomes a fraud alert system when<br />
someone has your username and password.<br />
Remember, even if a hacker acquires your username<br />
and password, they won’t be able to access your account<br />
because they don’t have your phone in their hand.<br />
Now, whenever you get a text message out of the<br />
blue saying “here’s your access code,” you’ll know that<br />
someone has acquired your username and password and<br />
is trying to use them.<br />
You’ll also know that they can’t get in without your<br />
phone, so you can simply change your password to prevent<br />
future issues.<br />
The process for setting up two-factor authentication is<br />
different for every account so a great web resource to learn<br />
how to turn it on for the web services you use is located at:<br />
https://twofactorauth.org.<br />
SECURING YOUR MOBILE DEVICES<br />
Laptops, smartphones and tablets are critically<br />
important business tools these days, but they are also<br />
extremely desirable to thieves.<br />
Mobile devices by their very nature are more likely to<br />
be lost or stolen, so you should assume that it’s going to<br />
happen and act accordingly.<br />
Make sure all your devices have access passwords to<br />
make accessing your sensitive info more difficult and install<br />
a remote tracking program so you’ll know what to do when<br />
something goes missing.<br />
A really solid (and free) option is available at https://<br />
preyproject.com and it’s much more helpful than Find My<br />
iPhone or Find My Mac.<br />
Not only can Prey locate your device, it can lock it<br />
down, take a picture of whomever is using it, along with a<br />
screenshot of whatever they are doing on your computer.<br />
Location alone is not enough for law enforcement to<br />
do anything in most cases, so the additional evidence is<br />
very helpful.<br />
There are certainly many other things that you should<br />
consider when it comes to cyber-security, but these simple<br />
steps will go a long way to protecting you against some of<br />
the most common threats. <br />
Ken Colburn is president of Data Doctors<br />
Franchise Systems, Inc. He serves as<br />
chairman of IFA’s Marketing and Technology<br />
Committee. Find him at fransocial.franchise.<br />
org.<br />
16 FRANCHISING WORLD NOVEMBER 2015
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FEATURES<br />
10 Top Reasons to Add a<br />
Franchise Intranet to Your<br />
Communication Plan<br />
<br />
want one by the time you read Reason No. 10. (Hint: Generate<br />
New Business)<br />
BY EARL PINSKY<br />
Before we get to the top 10 reasons to add a franchise<br />
intranet to your communication plan, let’s define what<br />
a franchise intranet is. It’s basically a cloud-based<br />
set of software tools used to facilitate communication and<br />
provide a valuable resource for franchisees.<br />
A well-rounded franchise intranet should offer information,<br />
support, a sense of community and more while helping to<br />
reduce costs as well as ensure compliance with corporate<br />
objectives and branding. It is supportive, rather than intrusive,<br />
and should make franchisees feel that they are contributing to<br />
their business and to the company as a whole.<br />
Most franchise intranets fulfill basic franchise needs<br />
through the provision of applications designed specifically<br />
for the market. These applications typically include document<br />
repositories for marketing and operational materials; a<br />
company news or bulletin application; support directories<br />
to reduce repetitive head office communications; an events<br />
calendar; message boards to facilitate franchisee to franchisee<br />
interaction; a content management system to create new<br />
intranet sections and pages; and user management modules<br />
to measure franchisee logins and activity within the intranet.<br />
Many companies marketing franchise intranets also<br />
sell additional applications or modules that provide more<br />
capabilities and value to their franchisees as they streamline<br />
other daily activities. These applications can include website<br />
and ad builders, franchisee lead generators and related CRM<br />
components, task lists, sales/royalty reporting (often with<br />
EFT capabilities), store-opening managers, and training and<br />
testing modules. Some franchise intranet companies will let<br />
you purchase these additional applications on an as-needed<br />
basis to help you keep your costs in line.<br />
Now that you know what a franchise intranet is, let’s look<br />
at the top 10 reasons to add a franchise intranet to your<br />
communication plan.<br />
1. FACILITATE FREQUENT COMMUNICATIONS<br />
The best franchisees are informed, engaged and educated.<br />
A franchise intranet should contain all the documents, training<br />
and support required by a franchisee to help them run their<br />
business successfully. Whether you have five franchisees or<br />
500, you can’t visit them all often enough or offer the support<br />
they need on a daily basis through email or phone calls. That’s<br />
impractical and too costly; however, you can use a franchise<br />
intranet to easily communicate with your franchisees as often<br />
as you wish.<br />
2. KEEP IT CURRENT<br />
There’s nothing worse than a franchisee referencing an old<br />
document, promoting an expired sale, or using branding that is<br />
out of date. Everything in your franchise intranet should be as<br />
current as possible and franchisees should be trained to look to<br />
the intranet when they need an operations manual, a marketing<br />
piece, a corporate logo or ad, or any other company image.<br />
This will keep everyone on the same page as well as promoting<br />
compliance and reducing potential legal issues.<br />
(Continued on page 20)<br />
18 FRANCHISING WORLD NOVEMBER 2015
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(Continued from page 18)<br />
3. SAVE TIME AND MONEY<br />
Many franchise companies used to print and deliver<br />
operational and product manuals to their franchisees on a<br />
frequent basis. Not only was this an expensive practice due to<br />
printing and mailing costs, these documents were often out<br />
of date soon after they were delivered. Many companies also<br />
previously spent valuable dollars on support personnel who<br />
were tasked to answer the same questions repeatedly. Most of<br />
these conversations can now be avoided by providing answers<br />
to the most important and frequently asked questions within<br />
the franchise intranet. Messages boards within the franchise<br />
intranet can also help as franchisees communicate with each<br />
other and ask each other some of the questions which may<br />
have been previously directed to head office.<br />
4. ENSURE FRANCHISEE COMPLIANCE<br />
It can be very costly in terms of legal fees and branding<br />
when a franchisee strays from company practices or<br />
obligations. You can help to ensure that your franchisees<br />
stay on course when all their needs can be met within your<br />
franchise intranet. This can include FDDs, reports, contracts,<br />
branding guidelines, and more. As many franchise intranets<br />
also track franchisee logins and document downloads, you<br />
will have the proof you may need if someone has gone off<br />
track.<br />
5. FRANCHISEES AND EMPLOYEE TRAINING<br />
A trained franchisee or franchise employee is a valuable<br />
corporate asset. In many cases traditional classroom training<br />
is expensive and outdated. Most franchise intranets will<br />
offer online training and testing that tracks franchisee and<br />
employee training and results. This type of training is also<br />
available at the convenience of the franchisee and employees,<br />
so they can train off-hours and off-site through the cloud-based<br />
intranet.<br />
Some franchise intranet training programs will even provide<br />
a dynamic certificate of completion for each module or course<br />
with the course name, franchisee or employee name, and date of<br />
completion filled in immediately and available for printing right<br />
from the intranet.<br />
6. EFFECTIVE DOCUMENT MANAGEMENT<br />
A document management system is used to track, manage<br />
and store documents. Almost all franchise intranets will use a<br />
DMS. That allows you to make sure all your documents are up to<br />
date and in one place, so when a franchisee needs a document,<br />
he or she is getting the most correct and most current version.<br />
The most sophisticated DMSs are more collaborative and can<br />
also track document check-ins and changes so you know who has<br />
accessed the document and when it was updated.<br />
7. ENGAGE YOUR FRANCHISEES<br />
All people want their opinions to matter and franchisees are<br />
no different. You can make sure you engage your franchisees by<br />
using the tools provided in most franchisee intranets including<br />
polls, forums, and message boards. In addition to fostering a<br />
sense of community, you’ll gain valuable insights into what your<br />
franchisees are thinking and feeling.<br />
8. TIMELY REPORTING<br />
Many franchisors remember the days when franchisees faxed<br />
or called in their sales reports to head office — in fact, some still<br />
operate this way. Once the sales reports arrived, royalty reports<br />
were calculated and a request for payment was made back to<br />
20 FRANCHISING WORLD NOVEMBER 2015
the franchisee. These days most franchise intranets can<br />
automate those tasks from POS to sales reports to royalty<br />
payment calculations to electronic fund transfers right to<br />
your corporate accounts. Franchise intranet providers can<br />
customize these kinds or reports and payment methods<br />
based on your company’s specific needs.<br />
9. MAKE YOUR FRANCHISEES MORE PRODUCTIVE<br />
Task automation is a key way to make life easier for<br />
you and your franchisees. This makes franchisees more<br />
productive and more profitable. A couple of good examples<br />
of these kinds of task automation tools are website builders<br />
and ad builders. A website builder application will allow your<br />
franchisees to build their own websites in seconds, often with<br />
the press of a “Submit” button.<br />
The typical website builder will provide a branded website<br />
template to ensure compliance with corporate branding and<br />
allow the franchisee to add content to select areas such as<br />
staff, specials, events, services, other items. Franchisors<br />
can also add content globally to all franchisee websites in<br />
seconds.<br />
In similar fashion, an ad builder application will allow<br />
franchisees to use a preformatted template for a printable<br />
ad, door knocker, brochure, or other marketing piece so they<br />
can create professional looking sales and marketing materials<br />
with their own location information in seconds.<br />
10. GENERATE NEW BUSINESS<br />
A franchisee intranet can be used to generate and manage<br />
franchisee leads through an associated lead application<br />
that resides on your corporate, franchisee, or franchising<br />
websites.<br />
When a prospective franchisee fills out an application or a<br />
request for franchise information, the form results are sent to<br />
the franchise intranet where designated corporate personnel<br />
such as a franchise development manager can evaluate the<br />
lead and process it as soon as possible.<br />
A good franchise intranet will notify the appropriate<br />
personnel (such as a franchisee development manager) by<br />
email as soon as a lead is generated for immediate review.<br />
Some franchisee lead generators/managers will also score<br />
the leads based on your criteria and then present “Hot Leads”<br />
with more prominence. Similar applications that generate<br />
leads for the franchisees themselves or for employment<br />
applications can also be used to send completed forms to<br />
the franchise intranet.<br />
Franchise intranets save franchisors time and money and<br />
help ensure compliance with franchise legal requirements<br />
and branding initiatives. Many franchise intranets can<br />
be implemented at a very low cost, with a couple offered<br />
for no cost at all for a basic intranet. These intranets have<br />
been designed specifically for franchise or multi-location<br />
companies and are great ways to improve your franchisee<br />
communications and provide much more. <br />
Earl S. Pinsky is president and CEO of Franchise<br />
Software Systems. Find him at fransocial.<br />
franchise.org.<br />
Cloud computing is the practice of using a network of<br />
remote servers hosted on the Internet to store data and<br />
access online programs, rather than use a local server or a<br />
personal computer for those purposes. In simple terms, if<br />
your data is stored on the intranet, rather than on a hard<br />
drive on your computer or in your office, you’re using<br />
cloud computing. If you are accessing programs over the<br />
Internet, you’re in the cloud.<br />
When we talk about cloud-based business computing,<br />
there is a model called SaaS, which means software as<br />
a service. In this model, a business subscribes to an<br />
application it accesses over the Internet. An example<br />
of this SaaS model would be a payroll service where all<br />
your information and data is stored and maintained by a<br />
third party company who are used to process your payroll.<br />
When it’s time to process the payroll, you simply go online<br />
and use the application to make any employee related<br />
additions, deletions or edits, then click a button and your<br />
employees get paid. The entire payroll program and all<br />
the employee information is stored on servers owned and<br />
controlled by the payroll company.<br />
This SaaS model is big business and is being embraced<br />
by businesses of all sizes in every vertical market. A<br />
recent report from the research firm MarketsandMarkets<br />
reported that the cloud market is expected to grow to<br />
$121 billion dollars by 2015. This represents a 26 percent<br />
compound annual growth rate from the $37 billion value<br />
in 2010.<br />
So why is the Internet called the “cloud”? The term<br />
goes back to the days of flowcharts when the Internet was<br />
represented by a big fluffy cloud. Even today, if you have<br />
a song on iTunes stored on their servers, the download is<br />
depicted as a cloud with a downward facing arrow.<br />
Cloud computing saves you time, money, and it’s<br />
convenient. You can let someone else worry about server<br />
costs and maintenance, storage space, and application<br />
updates while you run your business. Using the cloud also<br />
means that you can access your programs and data from<br />
any computer in the world with an Internet connection.<br />
And best of all, cloud computing is now available to<br />
help you with your franchisee communications, support,<br />
training, and operations.<br />
.<br />
CLOUD COMPUTING: A REFRESHER<br />
FRANCHISING WORLD NOVEMBER 2015 21
FEATURES<br />
The Digital Edge:<br />
How Websites, Social<br />
Media and Email<br />
Marketing Can Boost<br />
Your Bottom Line<br />
It’s no secret that the digital landscape has changed the<br />
marketing game for franchisors. Today, potential customers<br />
navigate the online kingdom through myriad different<br />
channels and devices. As a result, it’s more important than<br />
ever for franchisors to rethink their marketing strategy in order<br />
to break from the clutter and grab the attention of their best<br />
customers.<br />
FIRST, CREATE A BRAND-CONSISTENT WEBSITE<br />
The key to becoming discoverable starts with a brandconsistent<br />
website. As a franchisor, think of your website<br />
as your virtual storefront. It should place your franchise in a<br />
national context with content and messaging that is consistent<br />
across your network. Your website should also include content<br />
that appeals to consumers by emphasizing the services,<br />
terminology and values that matter most in your franchise<br />
community. Ensure your customers can find you by adding<br />
keywords and phrases relevant to your business. Remember,<br />
write for the customer first, then the search engines.<br />
WEBSITE TIPS<br />
• Distributed marketing: Your website should be<br />
optimized to expose localized and national content to<br />
search engines.<br />
• Responsive design: Build your site so that the content<br />
adjusts to suit virtually any size screen.<br />
To succeed and<br />
grow your business, stay<br />
abreast of emerging technology<br />
and tailor your marketing to<br />
consumers at the right time<br />
with the right message using<br />
the right channel.<br />
BY AMANDA BRIEF<br />
CHANGE THE WAY YOU DO EMAIL MARKETING<br />
The advent of wearable technology and smart devices has<br />
caused a major shift in the way that people engage with email<br />
marketing. Consumers can now sort through emails with the<br />
swipe of a finger while commuting or working out at the gym.<br />
According to Pew Research Center, 52 percent of cell phone<br />
owners use their mobile devices to send or receive emails. As<br />
a result, franchisors need to design responsive email templates<br />
that can be opened on any device.<br />
Franchisors must also pay attention to the type of email<br />
messages that they are sending to potential customers<br />
throughout the day. If you’re looking to promote a flash-sale<br />
deal for your franchise network, engagement levels are likely to<br />
rise if you send the email outside of traditional work hours when<br />
consumers are away from their desks and not easily distracted<br />
with work-related matters. On the other hand, if you’re looking<br />
to send a survey email, your response rate will likely be higher<br />
when consumers are navigating their inboxes from desktop<br />
computers as it is harder to complete a survey from a mobile<br />
device or tablet.<br />
PREPARE TO TARGET DIFFERENT AUDIENCES WITH<br />
SOCIAL MEDIA<br />
It is important to note that consumers navigate social media<br />
sites differently across the board. For example, one consumer<br />
may use Facebook to skim industry news while another may use<br />
22 FRANCHISING WORLD NOVEMBER 2015
it to connect with peers.<br />
Therefore, franchisors<br />
must rethink their social<br />
media strategy in order to<br />
captivate their audiences<br />
in the networking sites that<br />
matter most to them.<br />
Having trouble figuring<br />
out how your target<br />
audience uses social media?<br />
Quick tip: Take a look at how<br />
your competitor is leveraging<br />
social channels. If you see that<br />
it garners strong engagement<br />
after posting a promo code on<br />
Twitter, you may want to test<br />
Twitter as a revenue-generating<br />
tool.<br />
Social media behavior also<br />
fluctuates depending on a<br />
number of demographic factors.<br />
According to the Pew Research<br />
Center, Facebook remains the No.<br />
1 social media site; however, photo sharing apps such<br />
as Instagram continue to rise for adults ages 18 to 29. If<br />
you’re operating a local gym targeting 18 to 34 year olds,<br />
you may want to consider using Instagram to promote your<br />
franchise network in order to drive new leads.<br />
It’s important to note that gender also plays a key role in<br />
social media behavior. According to Business Insider, men<br />
are more likely to use Twitter and LinkedIn while women are<br />
more likely to use photo-sharing sites such as Pinterest and<br />
Instagram. These factors should play a role in your decision to<br />
launch promotions and contests through social media.<br />
Of course, you also need to establish your presence and<br />
build a foundation of followers so that promotions actually<br />
reach people. Share fresh content across your social networking<br />
site and use catchy headlines to attract the attention of your<br />
consumers. Need some inspiration? Engage your social users<br />
by sharing how-to articles and asking trivia questions.<br />
TECHNOLOGY WILL CONTINUE TO EVOLVE<br />
The digital landscape changes each day with the influx<br />
of new technology and applications. What once was popular<br />
today (remember MySpace?) may be obsolete tomorrow. In<br />
order to succeed as a franchise and grow your business, you<br />
must stay abreast of emerging technology trends and tailor<br />
your marketing activities so that they hit consumers at the right<br />
time with the right message using the right channel. <br />
Amanda Brief is marketing manager for Yodle.<br />
Find her at fransocial.franchise.org.<br />
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IFA SUPPLIER FORUM SPOTLIGHT<br />
Putting a million people<br />
to work.<br />
It all started when Bob Funk,<br />
CEO and Chairman of Express<br />
Employment Professionals<br />
moved from Washington to pursue<br />
an opportunity in Oklahoma. “I am<br />
an Oklahoman, not by birth, but by<br />
choice,” Funk said. “For me, coming<br />
to Oklahoma was a turning point in<br />
my life. I am convinced that no other<br />
state would have offered the business<br />
opportunities that I experienced as a<br />
young entrepreneur.”<br />
“At 18, I decided I wanted to be<br />
three things simultaneously - a minister,<br />
a rancher, and an entrepreneur,” Funk<br />
said. “When I made that declaration to<br />
my boss, he told me I was dreaming.<br />
But, I didn’t let that stop me. I worked<br />
my way through college and became<br />
the first to graduate out of 32 cousins.<br />
Today, I am so blessed to have seen all<br />
three of those dreams come true.”<br />
“I became a true entrepreneur<br />
in 1983 with the start of Express<br />
Employment Professionals, and the<br />
staffing industry became my ministry,<br />
because we are able to give hope and<br />
encouragement to so many people,”<br />
Funk said.<br />
Express has become a powerful<br />
economic leader in Oklahoma, in large<br />
measure, because of the fearless work<br />
ethic of Funk and the employees at the<br />
company’s international headquarters.<br />
Hard work and determination are part<br />
of the Oklahoma culture, and part of the<br />
reason Express has reached its current<br />
level of success.<br />
“Under Funk’s leadership, Express has put<br />
more than six million people to work”<br />
“The 450 individuals at our<br />
international headquarters in Oklahoma<br />
City and our 30 offices throughout<br />
the state of Oklahoma are the most<br />
productive, loyal, and driven employees<br />
I could ask for,”<br />
Funk said. “The company is<br />
successful because of the relationships<br />
we build with employees, potential<br />
employees, franchisees, businesses, and<br />
the community.”<br />
Funk aspires to the notion that<br />
everyone deserves to experience the<br />
satisfaction and self-esteem that comes<br />
from being engaged in meaningful<br />
work. Whether you’re an IT professional,<br />
an entrepreneur, a warehouse worker,<br />
or any and everything in between,<br />
meaningful work can add purpose and<br />
fulfillment to your life. It can help shape<br />
your future and your children’s future.<br />
Work can add to your satisfaction,<br />
success, and happiness. It can give<br />
hope.<br />
“Employment impacts all of our lives.<br />
When we help people find a job, it helps<br />
restore confidence and provides them<br />
hope,” Funk said. “A job helps them<br />
take care of their family. There is honor<br />
and fulfillment in hard work. There is<br />
tremendous personal value in a job well<br />
done.”<br />
Express is the third largest employer<br />
in the State of Oklahoma, employing<br />
more than 30,000 people in 2014.<br />
Under Funk’s leadership, Express has<br />
put more than six million people to<br />
work. Our long-term goal is to put a<br />
million people to work annually.<br />
“There is honor and fulfillment in hard work.<br />
There is tremendous personal value in a job<br />
well done.”<br />
Express not only provides hope<br />
through employment, but believes in<br />
investing in the community. In the last<br />
10 years, the Express Philanthropic Fund<br />
has contributed more than $7.5 million<br />
to charitable organizations throughout<br />
Oklahoma.<br />
“Giving back is not just a moral<br />
obligation for the Express franchise<br />
network,” Funk said. “We are<br />
community driven and our people<br />
have a passion to help others. We<br />
know we would not be where we are<br />
today without the support of the local<br />
communities in which our offices are<br />
located.”<br />
Bob Funk, Chairman and CEO<br />
Funk is CEO and Chairman of<br />
the Board for Express Employment<br />
Professionals. With its international<br />
headquarters in Oklahoma City,<br />
Express has more than 750 franchises<br />
and reached sales of $2.85 billion in<br />
2014. Staffing Industry Analysts named<br />
Express as one of the fastest growing<br />
major staffing companies and ranked<br />
the company No. 1 in industrial staffing<br />
in 2014.<br />
“We are community driven and our people<br />
have a passion to help others.”<br />
Express provides staffing expertise<br />
in evaluation hire, temporary and<br />
flexible staffing, professional search,<br />
and human resources, and works across<br />
a wide variety of industries with more <br />
ExpressPros.com<br />
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Customer relationship tools enable franchisors to<br />
better manage relationships with prospective and<br />
existing franchisees.<br />
BY STAN FRIEDMAN, CFE<br />
Fabled football coach Lou Holtz once said: “In this world<br />
you’re either growing or you’re dying.”<br />
There’s lots of truth to that quote, but I respectfully<br />
modify it for franchising to say, “Without sustainable growth,<br />
you’re dying.” That goes for both legacy and established<br />
brands, as well as for those just emerging. In today’s market,<br />
sustainable growth does not just happen; it requires discipline,<br />
professional management and systems reliance.<br />
Where better to begin introducing those attributes within<br />
your franchise company than at the starting line: customer<br />
relationship management tools that deliver self-directed and<br />
managed experiences for franchise candidates while also<br />
providing franchise development teams with reliable ways to<br />
track candidates as they embark upon their discovery journeys<br />
to learn more about your brands, opportunities and processes.<br />
Fact: Google has changed forever the way candidates<br />
discover information about franchise opportunities and how<br />
they go about doing due diligence on these brands. More, now<br />
than ever, high quality, direct candidates self-identify much<br />
later in the game, having already done a significant portion<br />
of their early-stage learning about your brand independently.<br />
With acquisition costs for quality leads as high as they are<br />
today, franchisors can ill-afford to allow even one such lead to<br />
fall through the cracks.<br />
FRANCHISORS NO LONGER DICTATE DISCOVERY<br />
Gone too are the days when franchisors could unilaterally<br />
dictate how candidates manage their discovery processes,<br />
much less fully control a candidate’s learning experience.<br />
Smart franchisors know that they still need some type of guard<br />
rails around their processes, while providing candidates<br />
the freedoms they expect, in terms of learning about their<br />
opportunities.<br />
Those same franchisors realize too that while these<br />
candidates are moving around with more self-directed<br />
discovery, franchise sales teams must still be able to<br />
properly track and guide candidates through the funnel<br />
consistently and properly. Franchise CRM technology makes<br />
all of this possible and also enables franchisors to rest<br />
assured that candidates are receiving the right information<br />
at the appropriate stages of the process and that franchise<br />
development directors are actually spending face and phone<br />
time with those candidates that are most likely to continue<br />
moving forward, as opposed to wasting time with those least<br />
likely to proceed.<br />
No matter the source of your leads, it is essential that<br />
you have the tools in place to assure that your development<br />
teams execute well. That all-important “speed to lead”<br />
is something that far too few really excel at. Yet it is easily<br />
accomplished with CRM and is a must if you hope to convert<br />
inquiries into engaged candidates. Franchisors must still<br />
find ways to assure consistency in the management of their<br />
processes and that their development teams, much less their<br />
candidates, remain on task.<br />
Candidates today are not just looking at you. They are<br />
often juggling communications and materials from multiple<br />
brands, all at the same time. Those franchisors who are<br />
communicating with candidates and managing these<br />
relationships utilizing professional tools like CRM can rest<br />
(Continued on page 28)<br />
26 FRANCHISING WORLD NOVEMBER 2015
FOCUS ON GROWING YOUR BUSINESS<br />
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(Continued from page 26)<br />
assured these tools are helping to assure their candidates remain<br />
focused and engaged. In fact, it’s a safe bet that franchisors that<br />
are systems reliant, as opposed to just being people dependent,<br />
will almost always be more certain to win their opportunities.<br />
CRM tools such as candidate portals help brands better<br />
tell their stories in environments that are not competing for<br />
the attention of the prospects. And, in these environments,<br />
franchisors can constantly update content, because they control<br />
it. The franchisor has the ability to serve up ever-changing,<br />
topical and timely digital information about their offerings, as<br />
opposed to being locked into old school, static media or virtual<br />
brochures.<br />
CANDIDATE PORTALS PAY DIVIDENDS<br />
There’s no better way to keep information about your concept<br />
fresh, communicate your brand’s story and provide meaningful<br />
information about your offering, than to lay down a track for<br />
your candidates inside a candidate portal, still allowing them the<br />
freedom of self-direction.<br />
Candidate portals also pay dividends to the sellers. They do<br />
so, by reporting each click candidates make back to the seller’s<br />
dashboard. As candidates open and review the digital assets<br />
you’ve made available for them, franchise sales personnel know<br />
they’ve been there and what they’ve viewed. This kind of business<br />
intelligence is powerful and empowers the franchise development<br />
team to easily identify which candidates are actually engaged<br />
and doing their assigned work between scheduled calls. It also<br />
helps your team determine who they should be focusing their<br />
time and energy on.<br />
In no uncertain terms, tools like these very quickly help your<br />
teams separate the wheat from the chaff. They can place a greater<br />
focus on those candidates that are most likely to cross the finish<br />
line one way or the other. We know that most candidates don’t<br />
cross the finish line as a “yes.” But if you know how many “noes”<br />
it takes to get to your next “yes,” these tools will help your<br />
sellers remain focused on those candidates that will ultimately<br />
come to some decision, as opposed to those who will ultimately<br />
just disappear into the ether. High performance professionals<br />
in franchise development work best with structured licensing<br />
systems powered by tools like these. CRM for sustainable growth<br />
however, does not end here.<br />
FOR EMERGING FRANCHISORS<br />
You wear many hats and don’t always have budget for the<br />
headcount you wish you could add to the corporate team. Your<br />
time is spent juggling operational support, legal/compliance<br />
issues and of course, franchise sales. For far less than you’d<br />
spend adding even one new person, CRM could help you reclaim<br />
many cycles of time, currently lost on mundane tasks and chores.<br />
Franchise-centric CRM could easily and efficiently streamline<br />
many things:<br />
• Collaborative communication tools that easily associate<br />
contacts with the entities that own units and all of the<br />
agreements associated with those contacts and entities.<br />
• Location records could be linked to important dates,<br />
anniversaries and work flows.<br />
• Triggers, alerts, milestones and dependencies could all<br />
be organized in ways that would always keep you and<br />
your teams in front of important dates and events.<br />
• Relevant documents associated with all of the above<br />
could also be comprehensively linked together.<br />
• E-mails originated by anyone on the corporate team<br />
or from franchisees to corporate could all be housed,<br />
archived, stored and associated within the appropriate<br />
contact or location records.<br />
This type of contact/content management brings a<br />
higher level of organizational efficiency to your business and<br />
empowers you to work both in it, as well as on it. Reports<br />
generated by CRM create metrics, KPIs and trackable trends<br />
that let you better manage what you measure. More of your<br />
time could then be spent focusing on building top and bottom<br />
line growth, which brings us back to where we started, it’s all<br />
about sustainable growth.<br />
While all of these advantages could benefit emerging<br />
franchisors, the same holds true for established brands, but<br />
there the needs are even more complex and compelling.<br />
FOR ESTABLISHED BRANDS<br />
With layers of personnel and management between c-suites<br />
and front lines at legacy or established brands, it is essential for<br />
leadership to have tools which enable better communication,<br />
collaboration, transparency and reporting. CRM can easily<br />
empower sustainable growth for these companies, as their<br />
need for communication, relationship management and<br />
compliance is further complicated by the multiples. In these<br />
organizations the likelihood is high that many franchisees are<br />
multi-unit/multi-branded and there may even be franchisees<br />
in these organizations who are associated with more than one<br />
ownership group.<br />
The need for franchisors to know who’s who inside these<br />
franchise populations and where else they may have nexus<br />
to other individuals or entities within the brand could be<br />
paramount. Ready access to data and information that can<br />
be easily sorted, reported and dash-boarded is simple to<br />
accomplish with tools such as these.<br />
SUSTAINABLE GROWTH: A MUST, NOT AN OPTION<br />
No matter where you currently find yourself on the maturity<br />
continuum, CRM empowers and enables franchisors and<br />
their teams to better manage relationships with prospective<br />
and existing franchisees. It helps you manage because it<br />
helps you measure. CRM also empowers and enables better<br />
communication within your organization and helps teams work<br />
more efficiently.<br />
Bringing 21st century CRM tools into your business will,<br />
at the very least, spark change. As we all know, people resist<br />
change. Sadly, in most businesses as in life, change is certain,<br />
growth however is optional. In franchising though, sustainable<br />
growth is a must, not an option. If you plan to continue<br />
growing and scaling your business successfully, tools such as<br />
CRM are a must, as they assist you in meeting and exceeding<br />
your goals. <br />
Stan Friedman, CFE is President of FRM Solutions.<br />
Find him at fransocial.franchise.org<br />
28 FRANCHISING WORLD NOVEMBER 2015
FEATURES<br />
What You Need to Know About<br />
Transformative<br />
Technology<br />
Attention Franchise Marketers: The future is arriving … quickly!<br />
BY JAMIE IZAKS AND KATHARINE NICHOLS<br />
Transformative technology is technology that inspires<br />
a change or causes a shift in viewpoint. The term<br />
encompasses multiple industries and sectors from<br />
education to healthcare and also applies to marketing.<br />
In marketing, there have been several transformative<br />
technologies that have changed the industry over the past 20<br />
years, including the Internet, smart phones, the “cloud,” and<br />
social media, among many others.<br />
Technology is constantly evolving, becoming more<br />
streamlined, mobile, connected and automated. There are<br />
new opportunities for advertising and marketing than ever<br />
before, but also more nuances and details. Mobile marketing,<br />
nearfield communication and marketing automation have<br />
become huge game changers that can greatly impact one’s<br />
return on investment. The industry’s biggest players including<br />
Apple, Google and Facebook, maintain significant control in<br />
many instances, so marketers must be savvy to the constantly<br />
evolving playing field.<br />
WHAT DOES THIS MEAN FOR FRANCHISORS AND<br />
FRANCHISEES?<br />
Although transformative technology can be a daunting<br />
concept, we encourage you to take it one step at a time.<br />
There are many small steps to create a comprehensive plan<br />
that embraces transformative technology options.<br />
Here are five key points to keep in mind:<br />
Seismic cultural shift to mobile.<br />
According to a study by comScore, the number of mobile<br />
users exceeded the number of desktop users in 2014 in the<br />
United States. Additionally, consumers are spending most<br />
their time consuming digital media within applications. In fact,<br />
the percentage of time spent on apps is 86 percent, compared<br />
to 14 percent for mobile web.<br />
The shift to mobile and mobile apps is not a fad; it’s a<br />
cultural transformation. Making sure your website is mobileoptimized<br />
and that you are considering potential apps are<br />
important discussions to be having today.<br />
30 FRANCHISING WORLD NOVEMBER 2015<br />
Make sure you are well-protected.<br />
According to Experian’s 2015 Data Breach Industry Forecast,<br />
“For businesses, the risk of experiencing a data breach is<br />
higher than ever with almost half of organizations suffering at<br />
least one security incident in the last 12 months. To address<br />
this, 48 percent of organizations increased investments in<br />
security technologies in the same timeframe, and 73 percent<br />
acknowledged the likelihood of a breach by developing a data<br />
breach response plan.”<br />
In fact, “hacking as a service” is now a growing industry.<br />
Making sure you have a cyber security system and a crisis<br />
management plan in place is extremely important. Consider<br />
everything hackable.<br />
Information is easier to find than ever.<br />
Google search terms and Boolean logic make finding<br />
information as easy as typing in a few characters. Someone who<br />
wants to find information can search Google, scan social media,<br />
look at review sites, or get access to public records. These tools<br />
can be extremely helpful or an extreme nuisance. Be cognizant<br />
of what you post or share online. Almost everything online is<br />
archived and can be found.<br />
Streamline your social media with helpful apps.<br />
There are a number of helpful apps that can be utilized to<br />
streamline social media sites for franchisors and franchisees.<br />
These include HootSuite and Crowdbooster, which allow you<br />
to post to multiple social media platforms at the same time<br />
from one dashboard and visualize your analytics.<br />
WHAT TO KEEP IN MIND ABOUT TRANSFORMATIVE<br />
TECHNOLOGY<br />
The opportunities to market your brand are endless, but it’s<br />
important to examine everything with a critical eye.<br />
Here are four main points to keep in mind as you examine<br />
new technologies:<br />
(Continued on page 32)
WHAT WE DO BEST:<br />
Japs-Olson Company is your direct mail production solution provider.<br />
To receive our sample kit, text GEN to 313131 or contact<br />
Debbie Roth at droth@japsolson.com or 952-912-1440.
(Continued on page 30)<br />
Walk before you run.<br />
Take each suggestion and recommendation to transform<br />
your tech one step at a time. If your website is not yet mobileoptimized,<br />
use that as your starting block. If you are already<br />
mobile-optimized, start to examine apps.<br />
Evaluate opportunities, but don’t feel compelled to do<br />
everything.<br />
This point is especially important for social media purposes.<br />
For example, a restaurant or vendor that sells products would<br />
probably benefit from a Pinterest and Instagram account,<br />
where they can show off specific items. A service-based<br />
franchise, however, may not be a good fit for visual social<br />
media platforms.<br />
Stay true to your brand and demographic.<br />
Creating a loyal online following comes after you have<br />
created a loyal customer base. Utilize technology to enhance<br />
your brand, but not to change it. Apps and social media sites<br />
provide new platforms to reach your demographic, but can<br />
also lead you astray.<br />
DEEPER DIVE: FIVE WAYS TRANSFORMATIVE<br />
TECHNOLOGY CAN MORE EFFICIENTLY TELL YOUR<br />
BRAND’S STORY<br />
Now that you know more about transformative technologies<br />
and how to integrate them into your franchise businesses,<br />
let us transition into a discussion on how they can provide<br />
compelling pathways for brand storytelling — how you share<br />
your brand’s vibe, culture and values through persistent and<br />
engaging marketing programs.<br />
1. Incorporate video into all forms of digital marketing<br />
First and foremost, in today’s online marketing world,<br />
video always wins. Why? Because human beings are likely to<br />
spend extended periods of time watching moving images and<br />
sounds. Static text or photos don’t command the same kind of<br />
attention from web. As such, search engines and social media<br />
sites such as Facebook reward the use of video.<br />
Incorporate well-shot and tightly edited video productions<br />
into your digital assets. Websites, social posts, blogs, landing<br />
pages and more with video always outperform other formats.<br />
Pivoting your mindset on this from static text and photos to<br />
active video takes a team effort. Your social and public relations<br />
team, web developers, e-mail distribution company and more<br />
all need to collaborate to bring video to the forefront. Several<br />
marketing departments at franchise companies are already<br />
shifting resources towards full-time video production teams.<br />
2. Mobile apps are more than just for placing orders<br />
Mobile apps provide brands a unique storytelling<br />
opportunity, but it takes creative ideas to think beyond the<br />
typical app, which most commonly is designed to allow<br />
customers to place orders.<br />
Additional options to consider include:<br />
• Customer-driven, branded photos and videos,<br />
• Video games,<br />
• Project management – keep your customers up to<br />
date,<br />
• Behind the scenes access to news, information and<br />
executives only available on the app, and<br />
• Alert push notifications.<br />
The list goes on, but more importantly, mobile apps<br />
provide a platform to continue the story about your brand. As<br />
mobile devices outpace other forms of computer technologies,<br />
developing an app strategy is going to become increasingly<br />
common.<br />
3. Tread lightly on in-store technologies<br />
There are a variety of in-store marketing considerations to<br />
make, such as oversized monitors and self-ordering kiosks, but<br />
today’s hottest in-store marketing topic is the beacon.<br />
Becoming all the rage in retail, beacons are simple<br />
Bluetooth technologies that can customize dining, shopping,<br />
traveling and entertainment experiences by tracking customer<br />
experiences.<br />
For example, a guest could arrive at hotel and be greeted<br />
with a very personal message based on their preferences and<br />
travel history. Their hotel amenities usage, such as restaurants<br />
and workout facility, could all be tracked, and special messages<br />
could then be shared with that guest throughout their visit. The<br />
transmission of data back and forth between customers and<br />
brands is powerful and can be used to create an experience<br />
completely personal.<br />
4. Content aggregation<br />
Until recently it was hard to justify spending the thousands<br />
that it would take to thoroughly monitor your brand online –<br />
review sites, social media, message boards, blogs and more.<br />
But, content aggregation tools have come a long way.<br />
These monitoring applications can assist immensely and will<br />
be transformative in terms of your ability to assess sentiment,<br />
respond to complaints, resolve issues and more effectively tell<br />
your brand story.<br />
You will take greater control over your brand’s story by<br />
being able to “social listen” with greater ease and shape<br />
conversation in real time.<br />
A few to consider include Hootsuite for Agencies, Likeable<br />
VIP and Agorapulse.<br />
5. Virtual Reality<br />
Now this is some heavy stuff. It’s rarely seen today, but<br />
you’ll be hearing more about it on a regular basis in the coming<br />
years. Virtual reality will become a consumer marketing channel<br />
that will vastly enhance brand storytelling.<br />
Consider that you will be able to visit a restaurant virtually<br />
before setting foot in it. Or, that you can visualize products<br />
and services before they are actually in hand or performed.<br />
Leading companies such as Google have begun to transform<br />
our world into virtual experiences.<br />
Gartner, a technology research firm, predicts that 25 million<br />
virtual headsets will be in consumer hands by 2018…the future<br />
is arriving quickly. <br />
Jamie Izaks is president and<br />
founder of All Points Public<br />
Relations and Katharine Nichols<br />
is a senior lead for the company.<br />
Find them at fransocial.franchise.<br />
org<br />
32 FRANCHISING WORLD NOVEMBER 2015
FRANCHISE DEVELOPMENT<br />
Are Background<br />
Checks Enough in the<br />
Development Process?<br />
Research prospects’ credit, driving histories, criminal backgrounds and<br />
<br />
much more.<br />
BY KEVIN DRUDGE, CFE<br />
The answer is not as simple as it may seem. With the<br />
tremendous amount of information now available on<br />
the web, franchise development is much different<br />
than it was 15, 10 or even five years ago. As a result of the<br />
information explosion, prospective franchisees are engaging<br />
us from a position of knowledge.<br />
Even before the first meeting, having the proper<br />
information is mission-critical to attracting quality<br />
candidates to your brand. The information available for<br />
public consumption can be overwhelming depending on<br />
which strategies are used for development efforts: franchise<br />
specific websites, portals, social media, public relations,<br />
pay-per-click, webinars, blogs, virtual tradeshows and more.<br />
Making sure you have the proper messaging and utilizing<br />
this information to the fullest extent possible is crucial to<br />
the success of your development efforts. As development<br />
professionals we must leverage this information or run the<br />
risk of falling behind.<br />
NO LONGER GATEKEEPERS<br />
Today, prospective franchisees have a wealth of<br />
information at their fingertips and are choosing to be<br />
much better informed earlier in the process regarding their<br />
options and are using it to determine when and if they will<br />
engage us. Franchise development personnel are no longer<br />
the gatekeepers of information. This role shift means they<br />
no longer control every part of the process nor are they the<br />
sole source of information for what prospective franchisees<br />
hear and see regarding our offerings. Proper messaging is<br />
essential and how it’s is conveyed across different sources<br />
and target audiences is increasingly critical.<br />
The franchise development landscape is highly competitive<br />
and becoming more so. This, coupled with the reality that<br />
strong franchise candidates are typically considering multiple<br />
options, means development staff must fight tooth and nail<br />
to bring them into their networks. Information, and its proper<br />
use, has rapidly become the determining factor in who wins.<br />
Bringing on the “perfect” new franchisee is the ultimate goal<br />
of every franchise.<br />
But what is that perfect franchisee? People can look<br />
perfect on paper, interview like champions, carry themselves<br />
well or speak intelligently and make us think they are the best<br />
fit for our brands. But do we really know this person after 30<br />
(Continued on page 36)<br />
34 FRANCHISING WORLD NOVEMBER 2015
(Continued from page 34)<br />
to 60 days of conversation or two chats a week and<br />
one face-to-face meeting?<br />
You can run credit, driving history, criminal<br />
background checks and utilize personality profiling<br />
tools — all of which are important, but there are<br />
opportunities to learn so much more through the world<br />
we live in. Consider the length of your typical sales<br />
process. Recognizing that time kills all deals, most<br />
franchisors try to run the shortest timeframe possible<br />
while giving prospective buyers time to properly<br />
evaluate the opportunity. The financial burden is<br />
extremely high. Industry sources such as FRANdata<br />
and Franchise Update Media Group estimate the<br />
average cost per deal between $10,000 and $25,000<br />
or more, and this doesn’t include compensating the<br />
salesperson. The bottom line: franchise development<br />
efforts are very expensive and also one of the most<br />
important elements of a successful franchise company.<br />
WHAT MOTIVATES PROSPECTS TO MAKE A<br />
CHANGE?<br />
Prospective franchisees are learning everything<br />
they can about a brand as quickly as possible in order<br />
to make an informed decision. Given the readily<br />
available data, shouldn’t we be doing the same<br />
thing to get to know our prospects personally and<br />
professionally?<br />
Many of our franchise prospects today try to<br />
connect with us on social media or at least look at our<br />
profiles, both personal and corporate, to investigate<br />
the development staff, executive team and our<br />
company during the process and beyond. I encourage<br />
all franchisors to accept most of these invitations as<br />
a means of getting to better know our prospective<br />
franchisees.<br />
This may cause concern for some who prefer some<br />
level of personal privacy. On the other hand, we should<br />
consider the opportunity it creates to help better vet<br />
prospects and see what interests and drivers they<br />
have motivating them to make a major change.<br />
After all, the efforts each party goes through to<br />
properly conduct due diligence is expensive and time<br />
consuming, but well worth the effort. Think about<br />
the last time you made a major purchase, sought<br />
employment, or tried to volunteer for a school,<br />
church or youth sports league. Most of the time we<br />
are accustomed to being “checked out,” whether it<br />
is simply pulling our credit or driving records, or even<br />
criminal backgrounds and histories.<br />
We need to adopt policies and practices in our<br />
franchise development processes that allow us to<br />
portray ourselves and our companies in manners that<br />
address prospects’ emotional drivers while we engage<br />
and get to know them. Part of this effort involves<br />
not just being selective in who we administer these<br />
processes with, but doing it with every candidate at<br />
the appropriate time in the development process. Do<br />
it smartly, in a non-alarming way and don’t be afraid to<br />
research the people you plan to do business with over<br />
the next 10 to 20 years. After all, they are doing the<br />
same thing to every company they consider.<br />
By not being responsible franchisors and fully<br />
vetting prospective franchisees, we run the risk of<br />
bringing in under-performing franchisees and setting<br />
our brands up for additional headaches down the road.<br />
We also run the risk of thinking we have a great new<br />
franchisee only to find out during the lending process<br />
that he is not able to access the necessary funding for<br />
the project. Now both parties have wasted time and<br />
money on someone who shouldn’t have been awarded<br />
a franchise in the first place.<br />
SET YOUR BRAND UP FOR SUCCESS<br />
As we evolve and adapt our franchise development<br />
processes we should keep in mind certain types<br />
of franchise companies draw more scrutiny from<br />
customers, lenders or suppliers. With readily available<br />
information, partners and customers can quickly and<br />
easily find out about our franchisees — meaning<br />
one “bad apple” can really impact your growth and<br />
development, both short and long term.<br />
Technology and information are reshaping our<br />
franchise development efforts. Properly using it<br />
to identify and vet the right prospects will set our<br />
franchise brands up for success. No longer are the<br />
old staples like credit pulls or background checks<br />
sufficient. It’s not a question of should we incorporate<br />
all of these new sources of information, it’s a matter of<br />
how and when and in what manner that makes sense<br />
given our development process and franchise offering.<br />
To arrive at the “perfect” new franchisee we must<br />
gather as much relevant information and incorporate<br />
these practices into our marketing and development<br />
processes routinely. <br />
Kevin Drudge, CFE, is Chief Development<br />
Officer at AdvantaClean. Find him at<br />
fransocial.franchise.org.<br />
ADOPT POLICIES THAT ADDRESS PROSPECTS’<br />
EMOTIONAL DRIVERS<br />
It has become a mainstream practice in our lives<br />
to protect ourselves, our families and everyone’s<br />
well-being. Don’t be afraid to utilize these traditional<br />
means of vetting prospective franchisees, but also<br />
incorporate these new sources of information at the<br />
same time.<br />
36 FRANCHISING WORLD NOVEMBER 2015
1 2<br />
IFA FRANCHISE ACTION NETWORK TELLS<br />
CONGRESS TO PROTECT THE FRANCHISE<br />
BUSINESS MODEL<br />
BY ANDREW PARKER<br />
ANNUAL<br />
MEETING<br />
IFA’S WASHINGTON, D.C. FLY-IN<br />
SEPTEMBER 29-3O, 2O15 // JW MARRIOTT // WASHINGTON, D.C.<br />
Nearly 400 business owners traveled to Washington,<br />
D.C. Sept. 29-30 to take part in IFA’s Franchise Action<br />
Network (FAN) Annual Meeting. Members of FAN<br />
participated in close to 300 meetings Sept. 30 with members<br />
of Congress to support H.R. 3459/S. 2015, the Protecting<br />
Local Business Opportunity Act. The legislation, sponsored<br />
by Sen. Lamar Alexander (R-Tenn.) and Rep. John Kline<br />
(R-Minn.), would clarify that two or more employers would<br />
only be considered “joint-employers” if each shares direct<br />
control over hiring and termination. The U.S. National Labor<br />
Relations Board (NLRB) expanded the criteria for determining<br />
joint-employer status in an Aug. 27 ruling involving Browning-<br />
Ferris Industries of California.<br />
(Continued on page 40)<br />
38 FRANCHISING WORLD NOVEMBER 2015
3 4<br />
5 6 7<br />
Top row, page 38 (from left to right): (1) IFA President & CEO Robert Cresanti emphasizes the importance of the Franchise<br />
Action Network shortly after the association announced his promotion to its top staff leadership post.; (2) Members of the<br />
Coalition to Save Local Businesses (CSLB), which IFA is a founding member, promote their support of the Protecting Local<br />
Business Opportunities Act during a Sept. 30 press conference; (3) IFA Chair Melanie Bergeron, CFE, chairwoman of TWO<br />
MEN AND A TRUCK International, reminds Franchise Action Network members the importance of getting the “We Are Local”<br />
message out to legislators.; (4) New IFA Board member and CEO of Viridian Group John Draper with Board member Matthew<br />
Patinkin, co-owner of Double P Corp./Auntie Anne’s Pretzels, at the Congressional reception.<br />
Bottom row (from left to right): (5) IFA Board member, Andrew Puzder, president and CEO of CKE Restaurant Holdings,<br />
speaks about joint-employer legislation during a panel discussion; (6) IFA Treasurer Shelly Sun, CFE, (left), CEO and co-founder<br />
of BrightStar Franchising, listens to Sen. Roy Blunt (R-Mo.) as Home Instead Senior Care’s Phyllis Hegstrom, IFA members<br />
and Blunt’s staff look on at a meeting with the legislator during the Franchise Action Network Annual Meeting.; (7) Franchise<br />
Action Network members from Nebraska meet with Sen. Deb Fischer (R), shown at left, to discuss the impact of joint employer<br />
legislation on their franchise businesses.<br />
FRANCHISING WORLD NOVEMBER 2015 39
FASTSIGNS<br />
International CEO<br />
Catherine Monson,<br />
CFE, delivers a pep<br />
talk to Franchise<br />
Action Network<br />
members just prior to<br />
visits with legislators<br />
on Capitol Hill.<br />
Ways to improve business operations took center<br />
stage at the Franchisee Growth Conference.<br />
Batteries Plus Bulbs franchisee Dustin Myers<br />
(above) shared best practices during the opening<br />
general session, followed by breakout sessions.<br />
FRANCHISEE GROWTH CONFERENCE<br />
HIGHLIGHTS BEST PRACTICES, FRANCHISE<br />
RELATIONS<br />
Franchisees converged on Washington, D.C. Sept.<br />
28-29 for the first Franchisee Growth Conference,<br />
held just prior to the Franchise Action Network<br />
Annual Meeting.<br />
The opening general session featured guest<br />
speakers Russ Reynolds, CEO of Batteries Plus Bulbs,<br />
along with franchisee Dustin Myers, who explained<br />
the challenges involved with a three-year process to<br />
expand the company’s brand by adding light bulbs<br />
and device repair into the existing battery business.<br />
Later in the day, Mariana Huberman, UPS Store<br />
franchisee and vice chair of IFA’s Franchisee Forum,<br />
led a discussion on the Key to Growth Readiness<br />
with two multi-unit franchisees, Danny Malamis, with<br />
Jersey Mike’s and David Melton with Domino’s.<br />
“The conference sessions provided a great<br />
opportunity to hear fresh solutions to common<br />
challenges that franchisees face in their business,”<br />
said Tamra Kennedy, a franchisee with Twin City T.J.’s.<br />
Chuck Stempler said the conference was “focused<br />
specifically on the needs and opportunities of<br />
franchisees. Six excellent sessions ranging from data<br />
security to franchisor-franchisee collaboration. A very<br />
worthwhile investment of my time.”<br />
On Sept. 29, Tim Lightener, owner of TWO MEN<br />
AND A TRUCK locations and second vice chair of<br />
the Franchisee Forum, led a discussion about how to<br />
protect your business from hackers with Ken Colburn,<br />
president and CEO of Data Doctors. Other speakers<br />
included Lynn Berberich with BrightStar Care; Mara<br />
Fortin with Nothing Bundt Cakes; Dallas Kerley,<br />
CFE, with Benetrends; Jim Ilaria, CEO of Potomac<br />
Family Dining Group; Kathleen Schneider with Instant<br />
Imprints; Anjali Varma with Kidville; Mark Whittle with<br />
Hooters; and Seth Goldstein with Dunkin’ Donuts/<br />
Baskin Robbins.<br />
Caroline Moore with BrightStar Care described<br />
the conference as “an invaluable resource on key<br />
issues for my business. It offered knowledgeable<br />
speakers and insightful conversation and experiences<br />
being shared across multiple concepts. I will not miss<br />
it next year!”<br />
U.S. Rep. Virginia Foxx<br />
(R-N.C.) meets with<br />
Chris Brandon (left) of<br />
Domino’s and Matthew<br />
Shepherd (right) with<br />
Great Clips on Sept. 30<br />
during the Franchise<br />
Action Network visits<br />
to Capitol Hill.<br />
(Continued from page 38)<br />
Sen. James<br />
Lankford (R-Okla.),<br />
at right in the<br />
gray suit, listens<br />
to the Oklahoma<br />
delegation discuss<br />
the impact of<br />
joint employer<br />
legislation during<br />
Franchise Action<br />
Network meetings<br />
on Capitol Hill.<br />
“Franchises are local. We are families and locally owned businesses,”<br />
said Barbara Craigie, a FASTSIGNS business owner. “I think there is a<br />
perception that it’s just fast-food restaurants or that we are big business.<br />
I don’t think they understand that we are small business, that we are<br />
independent — the independent part really gets missed.”<br />
It’s important to visit Capitol Hill in person, noted Bob Smith, a<br />
ServiceMaster owner and Franchise Action Network member, “because I<br />
think when you take someone’s time, you’re looking at them face-to-face<br />
with what you have to say. We’re not just sending a letter or an email.”<br />
The issues involved are “very personal,” explained Caroline Moore, a<br />
BrightStar Care business owner. “This is my business, and that’s why I’m<br />
here to advocate for what is affecting my business personally as well as<br />
professionally.”<br />
Andrew Holland, a franchise owner with Tropical Smoothie Café, told<br />
members of Congress that during his first year of operations he had to<br />
“cut my salary to nothing” in order to ensure the business was healthy.<br />
“Hearing that we have this business owner that’s in there working 90<br />
hours a week for nothing, makes you not seem like a big corporation, it<br />
shows how much you are a small business.”<br />
(Continued on page 42)<br />
40 FRANCHISING WORLD NOVEMBER 2015
1<br />
2<br />
IFA presented the FranPAC MVP award to<br />
Doc Cohen, CFE during the Franchise Action<br />
Network Annual Meeting.<br />
FORMER IFA CHAIR DOC COHEN RECEIVES<br />
FRANPAC MVP AWARD<br />
During the Franchise Action Network Annual<br />
Meeting on Sept. 29, IFA presented the Sid<br />
Feltenstein FranPAC MVP award to Lawrence<br />
‘Doc’ Cohen, CFE, former IFA chairman and<br />
president of Cookie Associates. Cohen received<br />
the award for his leadership and dedication<br />
in supporting FranPAC, IFA’s political action<br />
committee. The award, which recognizes an<br />
individual who has made extraordinary efforts to<br />
involved IFA members in FranPAC, is named after<br />
past IFA Chairman Sid Feltenstein, who founded<br />
FranPAC in 1978.<br />
Cohen joined the association’s board of<br />
directors in 2004 and became the first-ever<br />
franchisee named to IFA’s Hall of Fame in 2011.<br />
He currently serves as chairman of the IFA<br />
Educational Foundation Board of Trustees, and<br />
is a member of the Past Chairs Council. He has<br />
also served on many IFA committees, including<br />
Franchise Relations, Awards, Long Range Planning<br />
and Convention, in addition to serving as<br />
Treasurer of the IFA for five years.<br />
3<br />
4<br />
(1) Left to right, franchisee James Cook with Grease<br />
Monkey International in Mundelin, Ill. and Jamie Izaks,<br />
president of All Points Public Relations, talk with a staff<br />
representative for Rep. Robin Kelly (D-Ill.) (2) At left, Sen.<br />
Tom Cotton (R-Ark.) listens to the Arkansas delegation<br />
during a Sept. 30 visit as part of the Franchise Action<br />
Network Annual Meeting. (3) Left to right,<br />
Raymond Bramble with Air Serv of Front Royal; Rep.<br />
Barbara Comstock (R-Va.); Rosemarie Hartnett, CFE,<br />
with Abrakadoodle Remarkable Art Education; Tina<br />
Bramble with Air Serv of Front Royal; and Kevin Sullivan<br />
with Paul David Restoration of Ashburn speak about joint<br />
employer legislation. (4) The Idaho delegation — Darin<br />
Davies with Paul Davis Restoration; Peter Riggs, CFE,<br />
with Pita Pit; Lane Kofoed, CFE, of Assisting Hands<br />
Home Care; Caroline Moore with BrightStar Care; and<br />
Teresa Nelson with Home Helpers — arrives on Capitol<br />
Hill after a short bus ride from the Franchise Action<br />
Network Annual Meeting.<br />
FRANCHISING WORLD NOVEMBER 2015 41
(Continued from page 40)<br />
The visits to Congress followed a series of Franchise Action<br />
Network and IFA committee meetings on Sept. 29, with opening<br />
remarks from IFA Chair Melanie Bergeron, CFE. Members of the<br />
Franchise Action Network and people within the industry, Bergeron<br />
said, “must defend the franchise business model. At the same time,<br />
we must all express in our own words how important franchising<br />
is for each of us, our families, our franchisees and our employees.<br />
We must ensure the franchise business model, as we know it, keeps<br />
moving forward.”<br />
At the urging of labor groups, NLRB is making it easier for<br />
franchisors and franchisees to be deemed joint employers. “We<br />
need to stop that from happening because the change would hurt<br />
every aspect of the franchising relationship,” said IFA President &<br />
CEO Robert Cresanti. “That will be our number one objective this<br />
week.”<br />
See more photos from the meetings on IFA’s Facebook page at<br />
www.facebook.com/IFA.DC, and on Twitter at #FranchiseForward.<br />
Watch the recap video on IFA’s YouTube page and take action today<br />
by sending a letter to your Congressional representative online at:<br />
www.votervoice.net/FRANCHISE/campaigns/42515/respond <br />
1<br />
2<br />
IFA Chair Melanie Bergeron, CFE, presents the 2015<br />
Legislator of the Year award to U.S. Sen. Lamar Alexander<br />
(R-Tenn.).<br />
SEN. ALEXANDER, REP. KLINE RECOGNIZED AS IFA<br />
LEGISLATORS OF THE YEAR<br />
IFA named Sen. Lamar Alexander (R-Tenn.) and Rep.<br />
John Kline (R-Minn.) as recipients of the 2015 Legislator of<br />
the Year award. Given during the Franchise Action Network<br />
Annual Meeting, the award recognizes lawmakers who<br />
support a pro-franchising, pro-business agenda. Alexander<br />
and Kline are co-sponsors of the Protecting Local Business<br />
Opportunity Act.<br />
“We applaud Sen. Alexander and Rep. Kline for<br />
their leadership highlighting the issues of concern to<br />
the franchising community and working to address the<br />
challenges facing the franchise business leaders,” said IFA<br />
President & CEO Robert Cresanti.<br />
Sen. Alexander and Rep. Kline, as chairmen of the<br />
Senate Health, Education, Labor and Pensions (HELP)<br />
Committee and the House Education & Workforce<br />
Committee, respectively, have helped raise small business<br />
owners’ concerns about government overreach in their<br />
day-to-day business operations.<br />
(1) TWO MEN AND A TRUCK International franchisees<br />
with chairwoman of the board and IFA Chair Melanie<br />
Bergeron, CFE (right) during a Congressional reception<br />
at the Franchise Action Network Annual Meeting.; (2)<br />
Todd and Sonya Jackson with Newk’s Franchising of<br />
Helena, Ala. pause for a photo in front of the U.S. Capitol<br />
during the Congressional reception.; (3) Members of the<br />
Caring Senior Services franchise group together for a<br />
photo during the Congressional reception.<br />
3<br />
42 FRANCHISING WORLD NOVEMBER 2015
IFA Members<br />
Chronicle Visit<br />
to Capitol Hill on<br />
Social Media<br />
Representatives of the franchising industry met with members of<br />
Congress on Sept. 30 as part of the Franchise Action Network Annual<br />
Meeting in Washington, D.C. IFA staff teamed with conference planners to<br />
snap hundreds of photos during the visits, resulting in close to 100 Tweets<br />
sent over the course of a few hours. The #FranchiseForward hashtag and<br />
IFA’s Twitter account (@Franchising411) reached more than 250,000 Twitter<br />
users that day, with impressions topping 1 million.<br />
See more photos and share your experience from the meetings on IFA’s<br />
Facebook page at www.facebook.com/IFA.DC, and on Twitter<br />
@Franchising411 with the hashtag #FranchiseForward. Watch the recap<br />
video on IFA’s YouTube page and take action today by sending a letter<br />
to your Congressional representative online at: www.votervoice.net/<br />
FRANCHISE/campaigns/42515/respond<br />
Tweets using<br />
#FranchiseForward<br />
hashtag<br />
ANNUAL<br />
MEETING<br />
IFA’S WASHINGTON, D.C. FLY-IN<br />
SEPTEMBER 29-3O, 2O15 // JW MARRIOTT // WASHINGTON, D.C.<br />
Twitter accounts reached with<br />
@Franchising411<br />
SOCIAL<br />
MEDIA<br />
IMPACT<br />
Twitter Impressions Made with<br />
@Franchising411<br />
Retweets, replies or<br />
favorites from<br />
@Franchising411<br />
tweets<br />
80 Tweets Sent from<br />
@Franchising411<br />
Twitter Accounts Reached with<br />
#FranchiseForward Hashtag<br />
Twitter impressions made with #FranchiseForward hashtag<br />
FRANCHISING WORLD NOVEMBER 2015 43
2015<br />
FRANCHISEE<br />
OF THE YEAR<br />
Award<br />
WINNERS<br />
As the members, friends<br />
and supporters of the<br />
International Franchise<br />
Association gathered in<br />
Washington, D.C. for the<br />
Franchise Action Network<br />
Annual Meeting, we are<br />
pleased to honor and<br />
recognize the outstanding<br />
achievements and<br />
accomplishments of the<br />
2015 IFA Franchisee of the<br />
Year Award Winners.<br />
Congratulations!<br />
James and Michelle Alex ................................ FirstLight HomeCare of Valparaiso, FirstLight HomeCare<br />
Angela and Chris Ashcraft .............................. Express Employment Professionals of Mobile, AL, Express<br />
Services, Inc.<br />
Dean Bingham ............................................... Mr. Transmission of Greenville, SC, Moran Family of Brands<br />
Raymond Bramble .......................................... Aire Serv of Fort Royal, VA, The Dwyer Group<br />
Dawn Bransky ................................................ Caring Senior Service of Dallas Mid-Cities, Caring Senior Service<br />
Eric Bueter ..................................................... E&S Bueter Corporation, Marco’s Pizza<br />
JD and Tammy Busch, CFE ............................. Amazing Lash Studio of Dallas, TX, Amazing Lash Studio<br />
Franchise LLC<br />
Michael Cardamone ....................................... Huntington Learning Center of Bowie, MD, Huntington Learning<br />
Centers, Inc.<br />
Jim Cook ........................................................ Grease Monkey International of Mundelein, IL, Grease Monkey<br />
International, Inc.<br />
Elizabeth and Mike Crippen ........................... MilliCare Textile and Carpet Care of Charlotte, NC, MilliCare<br />
Textile and Carpet Care<br />
Jeff Davis ........................................................ Jani-King International of Fairfax, VA, Jani-King International, Inc.<br />
Beth and Phillip Dow ..................................... Home Helpers of Newman, GA, Strategic Franchising Systems<br />
Greg Goodman .............................................. Alta Mere of Oklahoma City, OK, Moran Family of Brands<br />
Manav Gupta ................................................. InXpress of Princeton, NJ, InXpress<br />
Joey Hale ....................................................... Two Men And A Truck of Chattanooga, TN, Two Men And A<br />
Truck®/International<br />
Earle Hobbs .................................................... Snap-on Tools of New Kent, VA, Snap-on-Tools Company, LLC<br />
Todd and Sonya Jackson ................................. Newk’s Franchising of Helena, AL, Newk’s Franchise<br />
Company, LLC<br />
Manuel Jacome and Shae Kalyani ................. The Learning Experience of Edison, NJ, The Learning Experience<br />
Laura Jankowski ............................................. Tropical Smoothie Cafe of New York, Tropical Smoothie Cafe<br />
Timothy Kjaer ................................................. Tint World of Shoreham, NY, TINT WORLD<br />
Greg and Kim Kling ........................................ Assisting Hands of Cincinnati, OH, Assisting Hands Home<br />
Care LLC<br />
David and Geneve Labate .............................. Home Instead Senior Care of Riverside, CA, Home Instead<br />
Senior Care<br />
Ed Lease and David Smith .............................. Stratus Building Solutions of Nashville, TN, Stratus Building<br />
Solutions<br />
Penny Loome .................................................. Sylvan Learning of Boca Raton, FL, Sylvan Learning, Inc.<br />
Ravi Manoo and Zorida Pritipal ..................... Golden Krust Caribbean Bakery & Grill of Orlando, FL, Golden<br />
Krust Caribbean Bakery & Grill<br />
Jean and Rob McLean .................................... Maui Wowi Coffees & Smoothies of Denver, CO, Maui Wowi<br />
Franchising, Inc.<br />
Maureen and Peter Moore ............................. BrightStar Care of Norwalk, CT, BrightStar Franchising, LLC<br />
Heather Pitsaladis .......................................... MODE of Bismarck, ND, MODE<br />
Donovan Reese .............................................. Renters Warehouse of Arizona, Renter’s Warehouse USA<br />
Lisa Riley ........................................................ Pinot’s Palette Studios of Tulsa, OK, Pinot’s Palette<br />
Eric Silver ....................................................... Fish Window Cleaning of Haltom City, TX, Fish Window<br />
Cleaning Services, Inc.<br />
Amanda and Brad Sims .................................. Mr. Rooter of Mount Pleasant, MI, The Dwyer Group<br />
Glenn Smith ................................................... Tilted Kilt of Orange, CA, Tilted Kilt Franchise Operating LLC<br />
Grant Springer ............................................... CruiseOne of Edgewater, MD, CruiseOne<br />
Terry and Kathy Stokes .................................. PostNet of Steamboat Springs, CO, PostNet International<br />
Franchise Corp.<br />
Joseph Tocco .................................................. Deuceco Enterprises, Coverall North America<br />
Joel Walker .................................................... Interstate All Battery Center of Georgetown, TX, Interstate Battery<br />
Franchising & Development, Inc.<br />
Tony Williams ................................................. Big O Tires of San Tan Valley, AZ, Big O Tires, LLC<br />
Kerry Woodson .............................................. CARSTAR Auto Body Repair Experts of St. Peters, MO, CARSTAR<br />
Franchise Systems, Inc.<br />
44 FRANCHISING WORLD NOVEMBER 2015
COMMUNITY SERVICE<br />
Foundation Recognizes<br />
“Franchising Gives Back”<br />
Award Winners during<br />
Inaugural Dinner<br />
Fifteen International<br />
Franchise Association<br />
members and their<br />
charities recognized<br />
for service to their<br />
communities<br />
BY JOHN REYNOLDS, CFE<br />
Shaping the<br />
Future of<br />
Franchising<br />
There is a famous quote by Winston Churchill that goes like this — “We<br />
make a living by what we get, we make a life by what we give.” This was<br />
clearly the theme of the inaugural Franchising Gives Back Celebration<br />
and Awards Dinner when International Franchise Association volunteer leaders<br />
gathered this fall in Washington, D.C., for the Franchise Action Network Annual<br />
Meeting.<br />
Fifteen IFA members and their charities — five Gold Award Winners and 10<br />
Silver Award Winners — were recognized for their outstanding service to their<br />
communities. Collectively, these 15 businesses and their charities have helped<br />
children, veterans, sufferers of chronic diseases, and entire communities. In<br />
terms of total impact, these businesses have donated more than $127 million<br />
dollars, engaged more than 30,000 volunteers, donated hundreds of thousands<br />
of hours, and helped millions of people in thousands of communities around the<br />
United States.<br />
The awards dinner also celebrated reaching a milestone in the first year of<br />
Franchising Gives Back, whose purpose is to recognize businesses for their<br />
charitable acts and encourage others to do the same. During the dinner, the<br />
top award-winning charities also received donations of $5,000 from the IFA<br />
Educational Foundation. More than 200 IFA members attended the dinner and<br />
there was an outpouring of support from sponsors who financially contributed<br />
to the success of the event, including founding sponsor Roark Capital Group,<br />
and awards dinner sponsor Ecolab. (See sidebar: Franchising Gives Back<br />
Sponsors Support Awards Dinner.)<br />
HONORING OUR GOLD AWARD WINNERS<br />
This year, we presented five Gold Awards to franchise businesses that<br />
contributed millions of dollars in monetary and in-kind donations and employees<br />
devoted countless hours volunteering to make a difference in their communities.<br />
(Visit FranchisingGivesBack.org for profiles on all the awards winners.)<br />
(Continued on page 46)<br />
FRANCHISING WORLD NOVEMBER 2015 45
(Continued from page 45)<br />
Denny’s, recipient of the Spirit of Franchising Award,<br />
raised nearly $945,000 last year by selling coupons in its 1,400<br />
restaurants to support No Kid Hungry’s efforts to help more than<br />
16 million American children who struggle with hunger.<br />
“Over the last five years, Denny’s has emerged as a true<br />
leader in the fight to end childhood hunger in this country,” said<br />
Billy Shore, founder and CEO of national non-profit organization<br />
Share Our Strength which manages the No Kid Hungry campaign.<br />
“Through the leadership of their executives and franchisees and<br />
the commitment from their staff, Denny’s has grown to be one of<br />
the top fundraising restaurants. Their determination continues to<br />
inspire all of us at Share Our Strength and serves as reminder that<br />
together we can make No Kid Hungry a reality.”<br />
CertaPro Painters, the Support Our Veterans Award winner,<br />
raised $260,000 and an additional $160,000 through in-kind<br />
donations as a national sponsor for Homes for Our Troops, which<br />
builds specially adapted, mortgage-free homes nationwide for<br />
the most severely injured veterans from Iraq and Afghanistan.<br />
“Despite life-altering injuries, many veterans in the Homes for<br />
Our Troops program have embarked on new careers, completed<br />
college degrees and started families,” said Tim McHale, president<br />
and CEO of Homes for Our Troops. “Because of sponsors like<br />
CertaPro, veterans do not have to worry about a mortgage, but<br />
instead are empowered to focus on recovering and rebuilding<br />
their lives.”<br />
Jersey Mike’s, which won the Enduring Impact Award, has<br />
hosted a fundraising program every March to raise money for<br />
local charity partners. The campaign culminates on Jersey Mike’s<br />
Day of Giving and, over the past five years, the brand has raised<br />
$8.3 million for organizations across the United States.<br />
Figaro’s Italian Pizza Inc., winner of the Innovation and Impact<br />
Award, has used its pizza boxes to raise money for local schools.<br />
Through its H.E.L.P. program, franchisees donate a portion of<br />
every dollar spent to a local school and Figaro’s makes matching<br />
donations. In less than five years, H.E.L.P. has issued more than<br />
400 grants totaling more than $94,000.<br />
Church’s Chicken, recipient of The Newcomer Award,<br />
launched the Church’s Scholar Program to provide scholarships<br />
for students pursuing higher education. In 2014, customers,<br />
franchisees and company-owned restaurants raised $50,000 for<br />
scholarships.<br />
MOVING FORWARD ON GIVING BACK<br />
I encourage you to visit franchisinggivesback.org to create a<br />
profile, share your stories and help us continue the momentum of<br />
the first year of Franchising Gives Back.<br />
The IFA Educational Foundation will compile your collective<br />
stories — including dollars raised and hours volunteered — to<br />
publish its first Franchising Gives Back National Registry and<br />
Annual Report highlighting the industry’s contributions.<br />
For more information on how you can get involved in<br />
Franchising Gives Back, including becoming a partner to sponsor<br />
the Annual Awards program, the National Registry and other<br />
activities, contact me by email at jreynolds@franchise.org. <br />
CONGRATULATIONS TO THE 2015 FRANCHISING<br />
GIVES BACK SILVER AWARD WINNERS<br />
• Spirit of Franchising Award — Massage Envy Spa<br />
(The Arthritis Foundation) and Sport Clips Haircuts<br />
(American Red Cross)<br />
• Enduring Impact Award — Marriott International<br />
(Children’s Miracle Network Hospitals) and The Melting<br />
Pot (St. Jude Children’s Research Hospital)<br />
• Support Our Veterans Award — CKE Restaurant<br />
Holdings Inc. (Stars for Heroes) and Golden Corral<br />
(Camp Corral)<br />
• Innovation and Impact Award — Jibu (Water Club<br />
Program) and Wingstop (Wingstop Flavor Tour)<br />
• The Newcomer Award — Moe’s Southwest Grill in<br />
Abilene, Texas (Taylor County Sheriff’s Office) and<br />
SOLDIERFIT (22 Needs A Face)<br />
SPONSORS<br />
Founding Sponsor<br />
Roark Capital Group<br />
Franchising Gives Back Partners<br />
Massage Envy Franchising<br />
Focus Brands<br />
FranConnect<br />
Awards Dinner Sponsor<br />
Ecolab<br />
Awards Category Sponsors<br />
Safeguard Business Systems<br />
Apple Pie Capital<br />
Franchise Business Review<br />
BDO<br />
PR & Marketing Partners<br />
Fish Consulting<br />
Wheat Creative<br />
Media Sponsor<br />
Franchise Times<br />
John Reynolds, CFE, is president of the International<br />
Franchise Association Educational Foundation. Find<br />
him at fransocial.franchise.org. `<br />
®<br />
46 FRANCHISING WORLD NOVEMBER 2015
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Product images shown here are photomechanically reproduced.<br />
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© 2015 VF Imagewear, Inc.
BEST PRACTICES<br />
Don’t Set and Forget: Tips<br />
to Avoid Common Errors<br />
in Running Your Franchise<br />
System<br />
Just because you have established a model that works does not<br />
mean the path to success will be clear.<br />
BY RICK COFFEY<br />
Building a business into a franchise<br />
is a major accomplishment. It<br />
means people like your product,<br />
appreciate your business, and want<br />
whatever you are selling. It means your<br />
brand stands out and its value extends<br />
beyond one market. However, the journey<br />
is far from over. Running a franchise is<br />
not a “set-it-and-forget-it” proposition.<br />
Franchisors need formulas and systems<br />
in place that make the business easyto-replicate,<br />
but there are still plenty of<br />
opportunities for errors to seep in.<br />
Success in any business is by no<br />
means guaranteed. But there are ways to<br />
address some common mistakes. Here<br />
are four of those mistakes and tips on<br />
how to avoid them.<br />
CUTTING CORNERS<br />
While in many cases the cost of<br />
opening a franchise can be less than<br />
opening the original location, this does<br />
not mean you can cut corners. Each<br />
new franchise has to attract customers,<br />
whether they are customers who<br />
already know (and like) your business,<br />
or customers who have never heard of<br />
your system before. The old adage of<br />
“you only get one chance to make a first<br />
impression” rings true here. If customers<br />
walk in to find cheap furniture and<br />
fixtures, a shortened menu of services,<br />
or a skeleton staff, that will affect the way<br />
they perceive your business.<br />
There is nothing wrong with looking<br />
for opportunities to trim the fat in order<br />
to maintain or increase profits, however<br />
this can be taken too far. Reducing<br />
costs can’t come at the expense of the<br />
customer experience. Focus instead<br />
on optimizing efficiency, and look for<br />
creative ways to save time and money.<br />
BAD HOUSEKEEPING<br />
Another common mistake is to let<br />
housekeeping slide. A franchisor can’t<br />
always be present at every location to<br />
ensure that standards of cleanliness,<br />
sanitation and organization are<br />
maintained. However, the second these<br />
standards are relaxed, customers will<br />
start walking out the door, and in many<br />
cases, they will apply their experience at<br />
one location to the franchise as a whole.<br />
As a pet care business, Barkefellers,<br />
knew from day one just how important<br />
high standards of housekeeping are.<br />
(Continued on page 50)<br />
48 FRANCHISING WORLD NOVEMBER 2015
(Continued from page 48)<br />
Animals are messy, and maintaining cleanliness requires<br />
constant vigilance, as well as having clear protocols<br />
in place. Chances are that a new franchisee will not<br />
intuitively know how often to wash pet blankets or clean<br />
rubber floor play surfaces. When training franchisees,<br />
we dedicate significant time to the importance of good<br />
housekeeping and lay out clearly what is expected. We<br />
make sure that every franchisee and employee has a<br />
good grasp of the tools and receives the training needed<br />
to keep the level of sanitation where it needs to be, and<br />
an accountability system helps prevent those standards<br />
from slipping.<br />
POOR CUSTOMER SERVICE<br />
High customer service standards are also essential.<br />
“The customer is always right” is dogma (pun intended)<br />
in the pet care business, with the responsibility of caring<br />
for people’s beloved companions. When people drop<br />
off their dogs or cats, they vest in us a huge amount<br />
of trust. Pet owners need to know that their pets are<br />
going to be happy and safe. This requires listening to<br />
customers, who know their pets better than we do, while<br />
showing that we care about their concerns and respect<br />
their wishes.<br />
The emotional component to pet care makes customer<br />
service even more important, but it matters across all<br />
franchise sectors. Poor customer service leads to billions<br />
lost each year in the U.S. alone. These experiences can<br />
include feeling unappreciated, interacting with rude or<br />
unhelpful staff, a lack of staff knowledge or difficulty<br />
getting questions answered.<br />
Whatever the case, customer<br />
service will make or break<br />
your business.<br />
Whatever the case, customer service will make or<br />
break your business. As with housekeeping, the franchisor<br />
sets the example and the expectations. Emphasize the<br />
importance of customer service to all franchisees and<br />
employees. Train them on how to effectively deal with<br />
customers and have systems in place for dealing with<br />
customer concerns. Prepare new hires for customer<br />
service issues they are likely to face and how to handle<br />
them. Recognize (and reward) those franchisees and<br />
employees who demonstrate superior customer service<br />
skills.<br />
Maintaining morale within a company is vital.<br />
Customers know when employees are unhappy. They can<br />
feel it in the air, and this will compromise the way they<br />
view your business.<br />
LOW MORALE<br />
Maintaining morale within a company is vital.<br />
Customers know when employees are unhappy. They<br />
can feel it in the air, and this will compromise the way<br />
they view your business. For example, if employees are<br />
unhappy working at Barkefellers — if they are moping<br />
around, frowning, or unmotivated — then there is a<br />
greater chance the pets are not happy either. Happy<br />
people treat pets with enthusiasm and care, and the<br />
last thing pet owners want is to leave their dogs with<br />
someone who seems apathetic, annoyed, or blue. Higher<br />
morale says to customers that employees care about<br />
their jobs, are committed to maintaining standards, and<br />
that the business as a whole is trustworthy.<br />
As the franchisor, it is your<br />
responsibility to create<br />
a company culture that<br />
cultivates strong morale.<br />
As the franchisor, it is your responsibility to create a<br />
company culture that cultivates strong morale. Make sure<br />
all employees feel that they are members of the team<br />
and that their job is important to the overall business.<br />
Make them feel valued and reward them for good work.<br />
You can also keep up morale by throwing social<br />
events that promote friendships outside the business<br />
such as barbecues, baseball game trips, and bowling<br />
parties. Camaraderie is a key ingredient to happiness<br />
at work, and the mere opportunity for friendships<br />
increases employee job satisfaction and organizational<br />
effectiveness.<br />
Franchising presents a valuable opportunity for an<br />
entrepreneur to scale his business and for franchisees<br />
to run their own businesses without all the risk and work<br />
involved in starting from scratch. However, just because<br />
you have established a model that works does not<br />
mean the path to success will be clear. Each individual<br />
franchise location is unique. Success requires living up to<br />
the standards that helped build the original location into<br />
a profitable, sustainable enterprise. Fortunately, with the<br />
right systems and training in place, you can avoid these<br />
mistakes and enjoy watching your business grow. <br />
Rick Coffey is president and founder of<br />
Barkefellers. Find him at fransocial.franchise.<br />
org.<br />
50 FRANCHISING WORLD NOVEMBER 2015
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FINANCE<br />
Tips for Preventing Credit<br />
Card Fraud and Avoiding<br />
Chargebacks<br />
Protect your franchise and your bottom line in card-present<br />
and card-not-present transactions.<br />
BY KEVIN KOBS<br />
Today’s shoppers expect to be able to pay with<br />
credit cards wherever they shop, whether in person<br />
or online, in the field or by phone. It’s a fact of<br />
life that businesses that accept payment cards are more<br />
competitive and can potentially realize increased revenue<br />
from the new customers they attract.<br />
Sadly, credit card fraud is another fact of life, but one<br />
that can be addressed and protected against. Credit card<br />
fraud is defined as the unauthorized use of cards or card<br />
account numbers for financial gain, often by using them<br />
to purchase goods and services.<br />
According to the 2013 Federal Reserve Payments<br />
Study, the estimated annual number of unauthorized<br />
transactions (third-party fraud) in 2012 was 31.1 million,<br />
with a value of $6.1 billion. Among signature debit and<br />
credit card payments in 2012, card-not-present fraud<br />
rates were estimated to be more than three times as high<br />
as card-present fraud rates.<br />
What can you do to help keep credit card transactions<br />
at your franchise business as secure as possible and save<br />
money by reducing the potential for fraudulent activity<br />
and costly chargebacks? Here are some tips.<br />
CARD-PRESENT TRANSACTIONS<br />
It’s easier to identify some of the behaviors associated<br />
with credit card fraud when both the cardholder and the<br />
card are physically at the point of sale. Some examples<br />
of suspicious behavior that you should watch for include<br />
customers who:<br />
• Purchase of multiples of the same type of<br />
merchandise or very expensive merchandise,<br />
especially if they don’t ask any questions about<br />
the items,<br />
• Purchase a wide selection of the same merchandise<br />
without regard to size, color or price,<br />
• Leave the store after making a purchase only to<br />
return later to make additional purchases,<br />
• Try to distract or rush you during the transaction,<br />
especially if they’re accompanied by others, and,<br />
• Time their purchases for when the store is opening<br />
or closing for the day.<br />
Additionally, you can help protect your business from<br />
becoming a victim of credit card fraud by adopting the<br />
following strategies:<br />
• Never accept an expired credit card or one that<br />
appears to have been altered.<br />
• Look for built-in security features and make sure<br />
they are intact. Embossing on the card should<br />
be clear and straight, the account number on<br />
the front of the card must match the one printed<br />
on the back, the hologram should be three<br />
dimensional and smooth with the card surface,<br />
and the signature panel should be unblemished.<br />
• If the card is not signed, have the customer sign<br />
the card in your presence and check the signature<br />
against the customer’s picture ID.<br />
• When you process the card, verify that the<br />
account number on the terminal matches the<br />
account number on the card. Compare the name<br />
printed on the electronic sales receipt to the<br />
name embossed on the card, and the signature<br />
on the sales draft with the signature on the back<br />
of the card. No match, no sale.<br />
• If you receive a “call center” or “pick up<br />
card” message through your terminal, call the<br />
authorization center and follow their instructions.<br />
Pay attention to any messages from the card<br />
authorization center. If you receive a “do not honor” or<br />
“decline” message through your terminal, do not proceed<br />
with the transaction. Even if you run the transaction again<br />
and receive an approval code, there is no protection for<br />
52 FRANCHISING WORLD NOVEMBER 2015
a transaction after you have received a “decline” or “do not<br />
honor” message.<br />
If a sale seems suspicious, call the authorization center and<br />
ask for a Code 10 authorization. This is a universal code that<br />
alerts the center that you have concerns about a transaction.<br />
The Code 10 operator will ask you a series of “yes” or “no”<br />
questions to help determine if it is a fraudulent transaction.<br />
Follow the operator’s instructions.<br />
CARD-NOT-PRESENT TRANSACTIONS<br />
If your franchise deals in card-not-present transactions, such<br />
as Internet orders or mail order/telephone order, recognizing<br />
fraud can be trickier because neither the customer nor the<br />
credit card is physically present.<br />
Fraudsters use lost, stolen or fabricated credit cards or<br />
account numbers to steal products and services in CNP<br />
situations. When the actual cardholder receives the statement<br />
with the fraudulent charge and disputes it, a chargeback is<br />
initiated. Until it is settled, the amount of the sale is deducted<br />
from the business’ merchant account and a chargeback fee<br />
is added. Without a credit card imprint receipt or customer<br />
signature to confirm the transaction, it’s very difficult for you to<br />
win a disputed charge, so you’re out the merchandise or service<br />
you provided, the amount of the sale and the chargeback fee.<br />
To help lessen your chances of being victimized by a<br />
fraudulent CNP transaction, always require the cardholder’s<br />
credit card number, validation code and expiration date;<br />
the name that appears on the front of the credit card; the<br />
cardholder’s billing address and phone number; and a<br />
description of the merchandise or services rendered.<br />
Additionally, be alert for incoming orders that:<br />
• Are larger than normal for your business, especially<br />
when you don’t know the customer,<br />
• Include several of the same item or very expensive<br />
items<br />
• Request “rush” or “overnight” shipment,<br />
• Ship to the same address but were purchased on<br />
different cards,<br />
• Charge transactions to account numbers that are<br />
sequential,<br />
• Provide multiple card numbers from a single Internet<br />
address,<br />
• Charge multiple transactions to one card over a very<br />
short period of time, or,<br />
• Ship to an international address, since they cannot be<br />
verified by an Address Verification Service.<br />
AVS is an important service offered by your merchant<br />
account provider that compares the shipping address provided<br />
to the merchant with the cardholder’s billing address that’s on<br />
file with the issuing bank. If the two do not match, do not ship<br />
the merchandise. Ship merchandise only to the cardholder’s<br />
billing address, and consider requiring a certified signature as<br />
proof that the merchandise was delivered.<br />
Finally, share what you have learned with your employees.<br />
Train them in the right ways to handle card-present and cardnot-present<br />
transactions as a first line of defense against<br />
fraudsters.<br />
Preventing credit card fraud is the responsibility of every<br />
party involved in an electronic payment transaction —<br />
merchants, issuing banks and merchant services providers —<br />
and chargeback prevention is critical to the bottom line of all<br />
businesses. These tips will be helpful in addressing both. <br />
Kevin Kobs is vice president of business<br />
development at TransFirst. Find him at fransocial.<br />
franchise.org.<br />
FRANCHISING WORLD NOVEMBER 2015 53
FINANCE<br />
5<br />
Key Lessons to an<br />
Effective Franchise<br />
Acquisition<br />
Acquisitions are critical to the evolution of most businesses.<br />
BY PETER HOLT, CFE<br />
I<br />
have been active in the franchise community managing franchise<br />
systems in both domestic and international markets for nearly 30<br />
years. Most recently, I was president and CEO of Tasti D-Lite and<br />
Planet Smoothie. I was with the company for eight years; initially as<br />
COO and for the past three years as president and CEO. Among my<br />
responsibilities, I led the successful acquisition of Planet Smoothie<br />
by Tasti D Lite in 2011 and subsequently in June, I managed the<br />
acquisition of Planet Smoothie and Tasti D Lite by Kahala Brands.<br />
If there is a common theme to my career beyond franchising,<br />
it is experience with acquisitions. Virtually every company I have<br />
worked for has acquired additional companies or has been acquired<br />
during my tenure. I have been an active participant (if not leading<br />
the process) in 12 major completed acquisitions and dozens more<br />
that ultimately did not result in agreement. From these diverse<br />
experiences I have learned the following lessons:<br />
1. ASK THE CORRECT QUESTIONS IN THE DUE DILIGENCE<br />
PROCESS.<br />
Before you drill down on the financial and legal review, focus<br />
on the essential question of why the company is being offered<br />
for sale. Is the purpose to buy out the founder or investors? Is it<br />
to raise additional capital for expansion or other key initiatives?<br />
Or, is it to address issues with the franchise model due to market<br />
condition changes? There are myriad other potential reasons.<br />
Understanding the “why” of the sale goes a long way in tailoring<br />
the due diligence to ensure you are gaining the specific and key<br />
information necessary to make good decisions.<br />
(Continued on page 56)<br />
54 FRANCHISING WORLD NOVEMBER 2015
Promote your franchising opportunity every Wednesday to<br />
3.3 million readers* in Franchising Today.<br />
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3.3 The million first Wednesday readers* in of Franchising every month, the Today. Franchising Today section<br />
includes thought-provoking information written about the most current<br />
industry The first Wednesday trends. of every month, the Franchising Today section<br />
includes thought-provoking information written about the most current<br />
Our Ask Victoria? Column provides our readers the opportunity to<br />
industry trends.<br />
interact with Franchise Experts in a Q & A format. Call today and start<br />
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interact with Franchise Experts in a Q & A format. Call today and start<br />
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*Source: executives 2013 and investors, Mendelson many Affluent with sales Survery and marketing expertise.<br />
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On select Fridays in 2015, we will<br />
On select Fridays in 2013/14, we will<br />
publish the following “Special Reports.”<br />
publish the following “Special Reports.”<br />
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(Continued from page 54)<br />
2. MEET THE LEADERS IN THE FRANCHISE<br />
NETWORK YOU ARE SEEKING TO ACQUIRE.<br />
Franchising is a relationship driven business. As you<br />
move into the final stages of your due diligence, meet<br />
with the most important franchisees, area developers<br />
and, if relevant, international master franchisees<br />
in the system. Typically this must be done under<br />
the supervision of the franchisor or the investment<br />
banker. Before Tasti D Lite acquired Planet Smoothie<br />
we created a list of key questions and interviewed<br />
25 franchisees and area developers controlling 75<br />
percent of the system. These conversations gave<br />
us critical insights into the system. It also created<br />
an excellent basis for the development of our<br />
relationships with the franchisees post-acquisition.<br />
3. UNDERSTAND ROLES AND<br />
RESPONSIBILITIES OF THE CORPORATE STAFF.<br />
Request detailed job descriptions and<br />
performance reviews as a part of the due diligence.<br />
Based on your own company’s structure and needs<br />
going forward, you will be making decisions about<br />
which staff will remain in place post acquisition. During<br />
the acquisition process it is most likely you will have<br />
limited access to staff members. Once the acquisition<br />
is completed, it will be important to spend time<br />
with the retained staff and learn about their history<br />
and experience with the company. As the acquiring<br />
company, it is easy to dismiss the information and<br />
perspective from the previous regime. This is a<br />
mistake. Listening to those who have experience<br />
within the system will help you to understand issues<br />
that were not as clear pre-acquisition. You want to<br />
minimize the uncertainty and concerns around a<br />
transaction. Listening helps address these concerns.<br />
4. CREATE YOUR TRANSITION PLAN LONG<br />
BEFORE THE ACQUISITION CLOSES.<br />
One of the scariest conversations I had while a<br />
company I worked for was in the final stages of being<br />
acquired was being told several days before the close<br />
that there was no transition plan in place. An example<br />
of how to correctly handle a transition can be found<br />
in part of the final due diligence when Tasti D-Lite<br />
acquired Planet Smoothie. We created a detailed<br />
Excel spreadsheet, broken down by department,<br />
which listed key activities for the transition, who<br />
was responsible for each task and the timeline<br />
expected for completion. It covered key areas such as<br />
administration, legal, technology, operations, training<br />
and education, marketing and public relations,<br />
franchise development, real estate, construction and<br />
design, product management, and distribution and<br />
supply. It took a great deal of time to create this plan,<br />
but was an essential guide through the transition<br />
process, minimizing the disruption of the transaction<br />
for everyone concerned and establishing processes<br />
for accountability.<br />
5. CREATE A DETAILED PLAN FOR<br />
COMMUNICATION WITH STAFF, THE<br />
FRANCHISE NETWORK, VENDORS, AND<br />
CUSTOMERS AS THE INTEGRATION OF THE<br />
BUSINESS TAKES PLACE.<br />
It is not enough to send out a press release and<br />
a letter to the franchise network and the vendors.<br />
The first 90 days is a critical time for a transaction.<br />
No one is comfortable with change. This is a time<br />
when all parties are trying to understand the<br />
transition and how their own role will change going<br />
forward. My experience has been that the absence of<br />
reliable information feeds people’s fears and has the<br />
potential to be far more destructive to the network<br />
than responsible sharing of information, even when it<br />
is difficult to do that. You cannot over-communicate<br />
during this period. The more clearly your staff<br />
understands the vision going forward, the more<br />
effectively they can advocate your position.<br />
For example, when I was with 24Seven, we<br />
acquired vending companies and converted their<br />
vending routes, historically driven by corporate<br />
drivers, to routes to be sold to franchisees. The<br />
corporate drivers were understandably uncertain<br />
as to what the change would mean for their jobs.<br />
Some routes would be eliminated. Others could<br />
be converted and sold as a franchise. We held an<br />
initial meeting with the staff to outline and gain<br />
their support for the conversion. We met with all<br />
the drivers and regularly communicated with them<br />
concerning the status of the process. While some<br />
of these meetings were difficult, in the end we were<br />
able to implement the program with a minimum of<br />
disruption to the ongoing business.<br />
Acquisitions are critical to the evolution of most<br />
businesses. Handling the process well by creating<br />
a detailed plan of action, conducting careful<br />
due diligence, listening to the key players and<br />
communicating clearly is the most effective way to<br />
maximize the value of the transaction. <br />
Peter Holt, CFE, is the former president<br />
and CEO of Tasti D-Lite and Planet<br />
Smoothie, and a former IFA board<br />
member. Find him at fransocial.franchise.<br />
56 FRANCHISING WORLD NOVEMBER 2015
BETTER PREPARATION. BETTER PERFORMANCE.<br />
“I am a CFE because…<br />
The CFE program has become the gold<br />
standard in franchising to ensure consistency,<br />
knowledge and core competency for success<br />
no matter what your concept. It provides the<br />
franchising professional with a threshold of<br />
knowledge with higher potential for success.”<br />
The International Franchise Association’s<br />
Institute of Certified Franchise Executives offers a<br />
substantive mastery of franchising to successful<br />
candidates, and confers recognition with the Certified<br />
Franchise Executive (CFE) designation. Among<br />
franchise leaders, the CFE has become known and<br />
appreciated as a mark of distinction<br />
and professionalism.<br />
To learn more about the CFE designation, see<br />
www.franchise.org/cfe or contact Rose DuPont at<br />
(202) 662-0771 or rdupont@franchise.org<br />
Jeff Bevis, CFE<br />
President & CEO, FirstLight HomeCare<br />
What will YOUR CFE Story Be?
INTERNATIONAL<br />
International Franchise<br />
Expo: Prime Opportunity<br />
for Consummating<br />
International Sales<br />
Internet communications are great but they don’t replace face-to-face<br />
meetings. That’s what makes franchise expos valuable.<br />
BY DR. JOHN HAYES<br />
Four brothers visiting the 2015 International Franchise<br />
Expo glanced at a poster touting international sales at<br />
the Wayback Burgers booth and said to the franchisor,<br />
“No Pakistan?”<br />
“Not yet, but you could be the first,” responded an<br />
enthusiastic Bill Chemero, executive vice president. That<br />
answer initiated a 15-minute discussion, followed by a<br />
private sales presentation, and ultimately the sale of the<br />
master license for Pakistan.<br />
Meanwhile, the guys at the Sanoserv booth, first-time<br />
IFE exhibitors from Malta, were closing down five minutes<br />
before the end of the last day of the show and a prospect<br />
stopped to ask for information about their hygiene business.<br />
Several weeks and several discussions later that prospect,<br />
an engineer looking for his own business, bought the master<br />
license for Ecuador.<br />
HIGHEST QUALITY DOMESTIC AND<br />
INTERNATIONAL PROSPECTS<br />
These are just two of many examples that explain why<br />
franchisors rely on the IFE not only for their domestic<br />
expansion in the United States, but for international sales<br />
too. Through the years, most companies that exhibit at<br />
the IFE do so for the domestic opportunities because<br />
approximately 80 percent of the visitors come from the<br />
United States. However, as international attendance has<br />
grown, many exhibitors have launched their international<br />
expansion from the IFE simply because the right prospect<br />
showed up at their booth.<br />
What began almost 25 years ago as the only national<br />
franchise expo in the United States has since become a<br />
58 FRANCHISING WORLD NOVEMBER 2015<br />
springboard to franchise development worldwide. “The IFE<br />
attracts the highest qualified prospects from all 50 states<br />
and 122 countries,” explains show producer Tom Portesy,<br />
president of MFV Expositions.<br />
“In seven years of franchise development,” said franchise<br />
veteran Chemero, “we’ve opened 97 units and we have 350<br />
more in development in the USA alone. Fifteen percent of<br />
those sales are a result of the IFE and other expos” produced<br />
by MFV Expositions and sponsored by the International<br />
Franchise Association.<br />
“Ninety percent of my international sales came from the<br />
IFE,” explained Ray Margiano, who won an international<br />
franchising award from the IFE in 2005 for his vast<br />
productivity. He sold master licenses for Heel Quik, his shoe<br />
repair business, in 30 countries. At the first IFE, Margiano<br />
sold a master license for Japan to Duskin, one of the world’s<br />
largest franchise conglomerates. He eventually sold his<br />
interest in Heel Quik, but returned to the IFE in 2000 with<br />
a new concept, Foot Solutions. Since then he’s sold master<br />
licenses in Saudi Arabia, the United Arab Emirates, Lebanon,<br />
Germany, Ireland, England, Scotland, Malaysia, South Africa,<br />
Australia, and Singapore – all from the IFE.<br />
CELEBRATING IFE’S SILVER ANNIVERSARY<br />
In 2016, the IFE will celebrate its silver jubilee at the<br />
Javits Center in New York City. Plans are already in the<br />
works to produce a record crowd of visitors and exhibitors.<br />
MFV Expositions dedicates a multi-million dollar budget to<br />
advertising and promotion, and relies on dozens of strategic<br />
partners worldwide to produce aisles filled with qualified<br />
prospects for the three-day expo.<br />
(Continued on page 60)
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(Continued from page 58)<br />
“We have hundreds of strategic relationships around<br />
the world with publications, associations, franchise portals,<br />
and event organizers,” continues Portesy, “but none is more<br />
important than our relationship with the U.S. Department<br />
of Commerce’s International Buyer Program. That’s an<br />
honor granted every year to a small number of huge trade<br />
shows in the USA. The IFE doesn’t qualify because of its<br />
size, but because franchising contributes to the economic<br />
development of countries worldwide.”<br />
The Commerce Department markets the IFE to<br />
individuals, groups and organizations around the world.<br />
“They seek out prospects who want to buy or start a<br />
franchise,” continues Portesy, who was IFE’s first show<br />
manager in 1992. “The prospects arrive in delegations,<br />
some as large as 200 people, some as small as three people,<br />
and we know they are well qualified and looking for a variety<br />
of opportunities.”<br />
Noting the significance of these groups, IFE entertains<br />
them on a World Yacht Cruise while in New York City, and<br />
gives exhibitors the opportunity to network privately with<br />
this group.<br />
COST-EFFECTIVE INTERNATIONAL FRANCHISE<br />
SALES<br />
For IFE exhibitors, the expo can dramatically reduce<br />
the time and cost of selling a franchise domestically and<br />
internationally. As Margiano pointed out, “Being able to<br />
speak to people from across the world for a few days at the<br />
IFE is a lot less costly than visiting even one country to find<br />
a master (licensee).”<br />
“The IFE targets the United States, which is still the<br />
home of franchising,” says Tony Foley, international director<br />
for United Franchise Group, which includes Signarama,<br />
EmbroidMe and four other franchise opportunities. UFG<br />
exhibits at all IFA-sponsored expos. “At any of these shows,<br />
we will sell 10 domestic franchises, and two to five master<br />
licenses internationally.”<br />
Noting that he makes up to 20 international trips annually,<br />
Foley said that without the IFE he would need to almost<br />
double his travel schedule to meet his sales goals. “There’s<br />
a limit to how much money a company can invest to get<br />
in front of international prospects, so that’s another reason<br />
why the IFE is valuable to exhibitors.”<br />
“CAN YOU FRANCHISE IN UGANDA?”<br />
In addition to cost savings, the IFE produces master<br />
franchise opportunities that otherwise would not occur.<br />
“Tunisia, Iraq, Uganda, Namibia – these markets are not<br />
on my Top 10 list for franchise expansion,” explains Foley,<br />
a veteran of international development. “But we have<br />
opportunities in all of these markets, and many others,<br />
because the IFE brought them to us. That’s a tremendous<br />
benefit, and it’s always a pleasant surprise to see where<br />
people are coming from and where they want to develop<br />
our franchise businesses. Some come from small and out of<br />
the way territories and they’re often afraid that we won’t be<br />
interested. But we almost always are!”<br />
Margiano confirmed that for budget reasons he would<br />
not have traveled to many of the countries where he’s sold<br />
master licenses as a result of the IFE. “It’s a lot easier to go to<br />
a foreign country when you are closing a deal than when you<br />
are looking for a potential partner,” he said.<br />
Even franchise suppliers who exhibit at the IFE have<br />
discovered the value of the expo’s international draw. Larry<br />
Schwartz is principal and senior consultant for RBZ-Armanino,<br />
a franchise services group that met the Japan External<br />
Trade Organization at the 2014 IFE. JETRO is an extension<br />
of the Japanese government with offices in New York and<br />
Los Angeles. The group helps facilitate Japanese franchise<br />
development in the United States, and since mid-2014 has<br />
relied on RBZ-Armanino for consultation and development<br />
of franchise system infrastructures that comply with U.S. law.<br />
JETRO introduced RBZ-Armanino to a half dozen Japanese<br />
companies that launched their development in the U.S.<br />
market while exhibiting at the 2015 IFE.<br />
IT’S A PLACE TO MEET FACE-TO-FACE<br />
Exhibitors point out the importance of face-to-face<br />
communications with franchise prospects. “The IFE is great for<br />
networking and building relationships,” said Jerry Crawford,<br />
president and CEO of Jani-King International, which always<br />
presents a sprawling booth at the IFE. “Investors from around<br />
the world come to us because they recognize the success of<br />
American franchise organizations and they want to join us.”<br />
Kelli Schindelegger, senior manager for global<br />
development for Brinker International, noted how the IFE<br />
helps to cultivate new relationships as well as drive top-ofmind<br />
brand awareness. Margiano said he would not have<br />
been able to attract the behemoth Duskin to even consider<br />
his tiny business without a personal connection at the IFE.<br />
“Exhibiting helps you bring credibility to the table because<br />
you’re associated with the IFE and the IFA,” continued<br />
Margiano. “I know that times have changed since that first<br />
IFE, but not so much for international prospects. They want to<br />
meet you face-to-face and develop a relationship, and that’s<br />
in the best interests of both parties.<br />
International prospects are not always looking for the big<br />
brands. Many of them want something that’s new so they can<br />
be the first to develop in their part of the world, but they also<br />
want to know who you are. They want to spend time with you,<br />
and the expo presents those opportunities.”<br />
Foley agreed. “You can’t rely on the Internet, email, and<br />
Skype, even though they are great tools. But they don’t<br />
replace face-to-face meetings and that’s what makes the IFE,<br />
and all of the expos, all the more valuable.”<br />
For prospects such as the four brothers from Pakistan,<br />
and the engineer from Ecuador, the IFE is the difference<br />
between thinking about buying a master license and actually<br />
signing on the dotted line. The expo is a prime opportunity<br />
for consummating international sales. “Some people say they<br />
don’t exhibit at the IFE because of the time and the money,”<br />
scoffed Foley. “But how could you not be there?” <br />
Dr. John P. Hayes is a freelance writer who<br />
teaches marketing, franchising and<br />
communications at Gulf University for Science &<br />
Technology in Kuwait.<br />
60 FRANCHISING WORLD NOVEMBER 2015
SAVE the DATE
EDUCATION<br />
CHILDREN’S SERVICES<br />
Franchise Sector<br />
Continues to Grow<br />
Demand for early education and care franchises expected to increase for<br />
years to come.<br />
BY CHRIS GOETHE, CFE<br />
In the past several years, the franchise industry has<br />
seen exponential growth over other economic sectors.<br />
Even through the recession, the industry was able to<br />
continue growing largely due to the franchise model, which<br />
naturally lends itself to resource sharing, more buying<br />
power and greater market share. The rebound the economy<br />
has experienced since 2009 has only strengthened the<br />
industry’s growth, with the children’s services, quick-service<br />
restaurants and personal-services franchise sectors leading<br />
the way.<br />
According to a 2015 Franchise Grade report, the<br />
children’s services sector, which includes educational<br />
services, day care, child sports/fitness training and<br />
enrichment/arts programs for children, is one of the fastest<br />
growing franchise sectors in the United States. Since 2013,<br />
it has been growing at more than three times the average of<br />
other franchise sectors. This ranking comes as no surprise<br />
to those in this field and is a direct result of a number of<br />
stimulants, including President Obama’s 2013 State of the<br />
Union speech, which called for “Pre-K for All.”<br />
At the time, President Obama called on Congress to<br />
expand access to high-quality early education to every<br />
child in America. He referenced research showing how<br />
building a foundation of skills during the earliest years<br />
of a child’s life is critical for future success. Fast-forward<br />
to today, political leaders, the business community and,<br />
most importantly, parents, have taken notice of the need<br />
to nurture our nation’s next generation. The importance<br />
of supporting children’s social-emotional, cognitive and<br />
creative development early is no longer debated, and is<br />
in fact viewed as critical to building a strong and globally<br />
competitive future workforce.<br />
According to the latest U.S. Census report, there are<br />
approximately 25 million preschool-aged children in the<br />
United States, 60 percent of whom are within ages three to<br />
five years and are enrolled in a preschool program. To better<br />
understand how the children’s services franchise sector,<br />
specifically educational child care franchises, is growing,<br />
we have to look at the development of the industry, market<br />
size and demand, and the financial and personal appeal to<br />
entrepreneurs.<br />
DEVELOPMENT OF THE INDUSTRY<br />
Before the 1980s, the day care industry was thought to<br />
simply offer play time and day care for children. Services<br />
were largely provided by independently-owned, single-site<br />
day care centers. In the 80s, however, the perception of child<br />
care started to shift. Parents began feeling the gap between<br />
early care and education, creating demand for higher quality<br />
preschool options that incorporated curriculum. Providers<br />
such as Primrose Schools began franchising and offering<br />
both the early education and care components that parents<br />
were seeking. These private franchise providers, required<br />
to meet certain regulations and accreditation guidelines,<br />
offered a higher standard for early childhood education for<br />
the first time in the industry.<br />
Over the years, the industry has steadily grown and as<br />
more research has surfaced on the critical role the first five<br />
years play in children’s long-term development, the early<br />
education franchise sector has flourished. Moreover, the<br />
national dialogue on early education has added to the surge<br />
in demand and franchise opportunities.<br />
MARKET SIZE AND DEMAND<br />
Entrepreneur magazine has noted the increased demand<br />
for children’s services franchises. In its latest annual<br />
Franchise 500 ranking, children’s services was listed as one<br />
62 FRANCHISING WORLD NOVEMBER 2015
communities across the country. For example,<br />
Primrose Schools has seen an all-time high<br />
enrollment this year, with average full-time<br />
occupancy at mature schools open at least three<br />
years reaching 85.1 percent (as of June). Growth<br />
isn’t expected to slow anytime soon. IBISWorld<br />
indicates the child-care industry will continue<br />
to grow as disposable income increases for<br />
families, allowing parents and guardians to<br />
spend more on high-value services such as early<br />
education.<br />
of the top five fastest growing franchise sectors. The child<br />
care industry as a whole is growing as well. As of May, the<br />
industry was valued at $45 billion, according to research<br />
firm IBISWorld.<br />
Historically, Primrose Schools and other early education<br />
providers have found greater demand in suburban markets;<br />
younger Americans have traditionally moved away from<br />
urban areas as they settle down and start families. Over the<br />
past few years, however, city growth in the United States<br />
has been outpacing that of suburban markets, and now<br />
both areas are growing steadily. Urban markets are now<br />
positioning themselves as live, work, play communities.<br />
According to experts from the Urban Land Institute, many<br />
families are making the decision to stay in the city with their<br />
children. This “urban migration” isn’t limited to the United<br />
States; it is affecting as many as 2.5 billion people around<br />
the world.<br />
This shift has caused an increase in demand for highquality<br />
early education and care in both urban and rural<br />
FAST FACTS<br />
• According the latest U.S. Census report, there are<br />
approximately 25 million preschool-aged children in<br />
the U.S.<br />
• In Entrepreneur’s latest annual Franchise 500 ranking,<br />
children’s services placed among the top five fastest<br />
growing franchise sectors.<br />
• IBISWorld indicates the $45 billion child care industry<br />
will continue to grow as disposable income increases<br />
for parents and guardians, allowing families to spend<br />
more on high-value services such as early education.<br />
• According to Forbes, 88 percent of millennials are<br />
seeking work with a greater purpose, and more than 4.5<br />
million people ages 50 to 70 have left their first career<br />
for an “encore career” in a business that combines<br />
personal and social impact with continued income.<br />
• Between 2010 and 2014, 75 percent of all children’s<br />
services franchises have achieved positive net growth.<br />
FINANCIAL AND PERSONAL REWARDS<br />
Increasing demand is not the only factor<br />
attracting entrepreneurs to early education.<br />
The financial and personal rewards from owning<br />
a children’s services franchise are proven and<br />
abundant. According to a 2015 Franchise Grade<br />
report, 75 percent of all children’s services<br />
franchises have achieved positive net growth<br />
between 2010 and 2014 and have generated more than $450<br />
million in revenue per year. Additionally, the children’s services<br />
sector provides favorable terms compared to other industry<br />
sectors, including lower initial terms of agreement, longer<br />
renewal terms and a greater number of renewal options. The<br />
result is an overall term that is longer than industry averages<br />
at 20.1 years.<br />
While many franchise sectors provide financial return to<br />
the investing franchisees, few also offer broad impact and<br />
personal reward. Research shows that many entrepreneurs<br />
are now looking for more meaningful franchise opportunities,<br />
including opening early education and care schools.<br />
According to Forbes magazine, 88 percent of millennials<br />
are seeking work with a greater purpose, and more than 4.5<br />
million people ages 50 to 70 have left their first career for<br />
an “encore career” in a business that combines personal and<br />
social impact with continued income.<br />
Moreover, unlike other franchise sectors, children’s<br />
services offer franchisees the unique opportunity to build<br />
long-lasting relationships with the families they serve while<br />
making a greater positive impact on their community and the<br />
next generation.<br />
There has certainly been a spotlight on the children’s<br />
services franchise sector over the past couple of years, but it’s<br />
not fading anytime soon. A growing number of entrepreneurs<br />
are seeing this franchise opportunity as a means to invest<br />
in a more meaningful and personally gratifying business.<br />
Early education and care franchises continue to provide an<br />
essential service to American families and communities — a<br />
service that will continue to be in demand for many years to<br />
come. <br />
Chris Goethe, CFE, is vice president of franchising<br />
for Primrose School Franchising Co. Find him at<br />
fransocial.franchise.org.<br />
FRANCHISING WORLD NOVEMBER 2015 63
MAKE YOUR PLANS NOW FOR THE<br />
HENRY B. GONZALEZ CONVENTION CENTER & MARRIOTT RIVERCENTER<br />
convention.franchise.org
FRANCHISE EVENT OF THE YEAR!<br />
If you attended the 2015 International Franchise Association Convention in Las Vegas,<br />
you’re probably wondering how we can top it. Well, we can and we will! #IFA2016 will<br />
be brighter, bolder and bigger - since everything’s bigger in Texas. If you didn’t<br />
join us, you missed out on an important opportunity to learn, improve and network.<br />
Join more than 3,500 of your franchise industry colleagues at the biggest franchise event<br />
of the year!<br />
February 20-23, 2016<br />
Henry B. Gonzalez Convention Center &<br />
Marriott Rivercenter<br />
San Antonio, TX<br />
Interested in exhibiting or sponsoring? Contact Lynette James at ljames@franchise.org.
MANAGEMENT & OPERATIONS<br />
LAUNCHING A MOBILE<br />
FRANCHISING MODEL<br />
A simple Old World recipe started it all. A century later, Repicci’s<br />
Italian Ice is hitting the road.<br />
BY FRANK REPICCI<br />
My grandfather, Dominic Francesco<br />
Repicci, immigrated in 1911<br />
to southern Philadelphia from<br />
Messina, Italy. Along with his Italian heritage,<br />
Dominic brought his family’s Old World<br />
recipe for Italian Ice to the New World.<br />
At first, he shared our family’s delicious<br />
traditional treat with friends and neighbors in<br />
his new American home, but it wasn’t long<br />
before he found himself working to meet an<br />
overwhelming demand for the dessert.<br />
That was when Repicci’s Italian Ice was<br />
born. Our century-old company has thrived<br />
in the 21st century’s mobile franchising<br />
concept, and currently has 48 franchisees<br />
across the United States.<br />
I was raised in Tennessee, but our family<br />
would travel across the country to visit my<br />
grandfather in Pennsylvania every other<br />
year throughout my childhood. It was during<br />
these precious times with family that I was<br />
taught the recipe and process for making our<br />
Real Italian Ice.<br />
As an adult, I requested and received<br />
my grandfather’s blessing to use his recipe<br />
to reinvent the company on a larger scale as<br />
FDR Enterprises Inc. I assumed the role of<br />
CEO and decided to open a manufacturing<br />
plant, which initially supplied concessions<br />
for Chattanooga, Tenn. parks, recreation<br />
facilities and surrounding distributors.<br />
OUR DECISION TO ENTER<br />
FRANCHISING<br />
In 2005, FDR Enterprises launched<br />
Repicci’s Franchise Group, selling eventbased<br />
franchises. Our first franchisees saw<br />
success using seasonal tents at spring and<br />
summertime events. But the company<br />
wanted to find a way to make Repicci’s a<br />
full-time and year-round revenue opportunity<br />
for our franchisees.<br />
In 2010, we decided to add mobile<br />
trailers to our franchising model, making it<br />
easier and more efficient for franchisees to<br />
attend events located further apart. This<br />
expanded their opportunities and increased<br />
their revenue potential, but the value of<br />
mobile vehicles became apparent. In 2012,<br />
we developed a food truck platform to begin<br />
testing and performance validation in our<br />
Birmingham, Ala. franchise territory.<br />
We are now able to serve as a vendor at<br />
all types of events, such as the Steel City Jazz<br />
Festival, the Hangout Music Festival to the<br />
SEC Baseball Tournament at the Hoover Met,<br />
as well as being a fixture at Barber Motor<br />
Sports for events such as the Indy Grand Prix<br />
of Alabama.<br />
Our food truck enables us to set up<br />
outside businesses that invite us to offer<br />
refreshments to their employees during the<br />
workday or become part of the “going out”<br />
scene by frequenting popular downtown<br />
corners. Because of these successful<br />
results, since August new Repicci’s Italian<br />
Ice & Gelato franchisees have purchased<br />
Mercedes Sprinter food trucks to launch their<br />
new territories. We have three active trucks<br />
as of Nov. 1.<br />
CHOOSING A FOOD TRUCK THAT<br />
WILL INCREASE EFFICIENCIES<br />
Selecting the Mercedes Sprinter was a<br />
long and arduous process. Not all food trucks<br />
are created equal, and we were looking for<br />
66 FRANCHISING WORLD NOVEMBER 2015
one that would fit our needs exactly. We wanted a model<br />
that was totally self-contained, meaning our franchisees<br />
could safely store and serve our Italian Ice and Gelato and<br />
be approved by local health departments. By doing this,<br />
franchisees are able to sell longer before heading back to<br />
their business’ home base to re-stock and clean up.<br />
When considering your business’ POS flow, it’s important<br />
to think about ways to make the process of serving customers<br />
convenient and streamlined. The food truck we selected allows<br />
up to four employees to work comfortably inside. Because<br />
our truck operators are having a blast serving customers at<br />
concerts and community festivals, the fun atmosphere may<br />
be too loud for employees to shout orders back and forth.<br />
So, we can use video monitor ordering screens to help ensure<br />
accuracy and minimize customer wait time. Outdoor menu<br />
screens on the side of the food truck can be changed as<br />
needed to show updated flavors and prices, as well as serving<br />
as a rolling message center.<br />
HELPING CUSTOMERS FIND YOU<br />
The beauty and the challenge of having a food truck<br />
business model is its mobility. Without brick and mortar, you<br />
are free to take your products to wherever your customers<br />
are, evolving with geographical and event-based demand.<br />
But your constantly changing location can make it difficult for<br />
new or returning customers to find you.<br />
We have partnered with an SMS-based marketing service<br />
and a schedule-posting, web-integrated service to help us<br />
overcome this obstacle. By empowering franchisees to collect<br />
customers’ contact information, they are able to create a<br />
database of loyal followers, while keeping fans updated on<br />
new product promotions, coupons and, of course, where<br />
food trucks will be and when. Messages are sent out via short<br />
texts, with the possibility of linking to our corporate websites<br />
or microsites built for specific products or events.<br />
Our schedule-posting, web-integrated service creates<br />
a more efficient process for franchisees to announce where<br />
they will be and when across all their digital platforms.<br />
Initially, we tried to get weekly schedules posted to our<br />
corporate websites by manual entry, but the process was<br />
time-consuming. By November, we will have launched the<br />
system that allows franchisees to post their schedules once<br />
and populate websites and social media simultaneously.<br />
PRODUCT ADDITIONS TO BOOST YEAR-ROUND<br />
SALES<br />
While the amount of possible selling venues seems<br />
endless during the spring and summer, it is challenging to<br />
maintain volumes during the colder months. As a franchisor,<br />
we are working to meet these challenges by expanding<br />
our menu of Real Italian products during this fall to include<br />
hot beverages and an authentic, hot Italian sandwich. Hot<br />
chocolate and freshly-brewed Italian coffee are already on<br />
the menu in some Repicci’s locations, and other products are<br />
in the developmental stage.<br />
REPICCI’S ALWAYS LOOKS TO THE FUTURE<br />
We will continue to discover new challenges to overcome<br />
as we continue unrolling (pun intended) our food truck model.<br />
Just as Dominic Francesco Repicci learned to adapt to a new<br />
country during the Industrial Revolution, Repicci’s Real Italian<br />
& Gelato is adapting to a new marketing structure based on<br />
wheels. <br />
Frank Repicci is CEO and a franchise owner of<br />
Repicci’s Italian Ice & Gelato. Find him at<br />
fransocial.franchise.org<br />
FRANCHISING WORLD NOVEMBER 2015 67
HONORING AMERICA’S HEROES<br />
Veteran Mentorship<br />
Program Offers Vital<br />
Support for New Owners<br />
“Troops in Transition” program adding to Budget Blinds ranks of<br />
franchisees.<br />
BY TODD JACKSON<br />
U.S. military veterans compose an extremely important<br />
community within the fabric of our nation. These men<br />
and women have put their own lives on the line to<br />
solidify our freedom. They are heroes in every form, and they<br />
walk among us each and every day.<br />
How can we possibly give back to, and show our support<br />
for, these American heroes who have given so much for us?<br />
That is the exact question we, at Home Franchise<br />
Concepts (HFC), were pondering back in 2014. We knew that<br />
we had to give back to our nation’s heroes, but it had to have<br />
a long-term, positive impact on their lives and the lives of<br />
their families.<br />
In early 2015, after a year of discovery and education from<br />
national veterans’ organizations, Home Franchise Concepts<br />
launched its Troops in Transition program for Budget Blinds.<br />
The program targets veterans that have left, or will leave,<br />
active duty within two years. Troops in Transition waives<br />
the initial fees of $75,000 required to become a franchise<br />
business owner with Budget Blinds under its general offering.<br />
Removing the financial barrier for veterans was certainly<br />
a step in the right direction, but this program is about more<br />
than just offering a deep discount. It’s also about offering<br />
these men and women an opportunity to successfully utilize<br />
their skills learned while serving our nation: skills such as<br />
structure, perseverance, organization and leadership, true<br />
68 FRANCHISING WORLD NOVEMBER 2015
skills that any great entrepreneur should embody.<br />
For this reason, Budget Blinds also ensures that<br />
all veterans joining through the Troops in Transition<br />
program are thoughtfully matched with a mentor.<br />
These mentors are carefully selected from our<br />
existing franchisee network and are those who have<br />
demonstrated the tenacity and skills that it takes<br />
to achieve success in the world of independent<br />
franchise business ownership.<br />
Nearly a year since beginning the program, our<br />
new veteran-franchisees are thriving. Their success<br />
is best told through their stories.<br />
WALT AND MELISSA BYARS<br />
Walt Byars was the first veteran who signed on<br />
with Budget Blinds through our Troops in Transition<br />
program. Byars served in the U.S. Navy for more<br />
than 22 years, and after a successful career of<br />
service, he was ready for change. He and his wife,<br />
Melissa, began looking at franchising opportunities<br />
and considering their options for independent<br />
business ownership. After inquiring about Budget<br />
Blinds and learning about the support systems we<br />
have available, the two decided to become business<br />
owners and opened Budget Blinds serving Zachary,<br />
La. in May.<br />
While preparing to begin work in their territory,<br />
Walt and Melissa were introduced to Brian Gargan,<br />
owner of Budget Blinds serving San Angelo, Texas,<br />
as a mentor. Working closely with Brian, the Byars<br />
executed a successful introduction to the market<br />
and have been going strong ever since. Gargan has<br />
been there to challenge them on creative solutions,<br />
assist when issues arose, as well as to help keep them<br />
motivated during slow sales periods. Together, the<br />
Byars and Gargan are strengthening their territory<br />
and we look forward to checking in with them during<br />
our annual convention in January.<br />
REYNALDO (REY) PINLAC<br />
Reynaldo (Rey) Pinlac served in the U.S. Navy for<br />
14 years, and was introduced to Budget Blinds by<br />
taking a job as an installer for an existing franchise<br />
owner in Washington state. After learning more<br />
about the incentives that our system offers veterans,<br />
he decided to follow his entrepreneurial spirit and<br />
open his own franchise. In June, he opened Budget<br />
Blinds serving Olympia.<br />
Since opening for business, Pinlac has been<br />
mentored by his former employer, Amber<br />
Koebberling, whom he worked for as installer. With<br />
a strong track record of success, Koebberling provided<br />
insight on the ownership side of the business and<br />
successfully helped transition Pinlac from installer to<br />
independent franchise business owner.<br />
When Pinlac’s child was born, he and Koebberling<br />
worked together by sharing employees to ensure that<br />
their customers were taken care of at all times. These<br />
two truly showcase what a great mentor/mentee<br />
relationship our franchisees provide for one another<br />
even in a “non-official” capacity.<br />
THARON AND LEAR COOK<br />
Tharon and Lear Cook met while both were serving<br />
in the U.S. Army in Germany, and they married in 1995.<br />
Tharon served for 21 years before retiring in 2015,<br />
and shortly thereafter he and Lear began looking for<br />
their next adventure. After speaking with his brother,<br />
Cedric, Lear learned about the program that Cedric<br />
was helping the HFC and Budget Blinds corporate<br />
teams develop for recently-retired veterans.<br />
Cedric, a retired U.S. Marine, owns his own Budget<br />
Blinds franchise with his wife, Clarita. With the support<br />
of their family, Tharon and Lear made the decision<br />
to join the company and opened their franchise in<br />
Newport News, Va. in July.<br />
Although his brother is based in Texas, Tharon still<br />
speaks with him on a regular basis and is able to tap<br />
into Cedric’s expertise in successful business practices<br />
and teamwork. Richard Grice of Suffolk, Va. has also<br />
mentored the Cooks, giving invaluable insight on<br />
building a strong business foundation that will support<br />
their long-term goals. With an outpouring of mentoring<br />
support, the Cooks have started strong and show no<br />
signs of slowing down.<br />
These veterans, along with a number of others<br />
that make up 10 percent of our franchise system,<br />
demonstrate an outstanding ability to work successfully<br />
as a team and that is what our mentorship program will<br />
continue to cultivate. It is our goal to provide all of our<br />
franchisees with an unwavering support system. The<br />
true backbone of our company is the spirit of family,<br />
and we look forward to strengthening this family in the<br />
years to come. <br />
Todd Jackson is one of the five founders<br />
and COO of Budget Blinds. Find him at<br />
fransocial.franchise.org.<br />
FRANCHISING WORLD NOVEMBER 2015 69
MULTI-UNIT FRANCHISE INNOVATORS<br />
Franchisees Harness<br />
Technology to Help<br />
Improve Operations,<br />
Effi ciency<br />
Franchising’s highachieving,<br />
multi-unit<br />
franchisees share<br />
views on key topics.<br />
Question: How have you moved more toward using technology to<br />
enhance the customer experience?<br />
In July 2006, Chris and Angela<br />
Ashcraft opened their Mobile, Ala.<br />
Express office to assist local job<br />
seekers in finding employment<br />
and helping area businesses<br />
find qualified employees. The<br />
Ashcrafts fulfilled their dream<br />
of helping others through a<br />
successful business and decided<br />
to open a second Express office in<br />
Summerdale, Ala. in March 2013. In<br />
2014, the Mobile and Summerdale<br />
Express offices put 2,000 people<br />
to work.<br />
CHRIS AND ANGELA ASHCRAFT: Our vision at Express Employment<br />
Professionals is to help as many people as possible find good jobs by assisting clients in finding good<br />
people. Our franchise system currently has its sights set on putting one million people to work annually<br />
through a franchise network of 750 locations in the United States, Canada and South Africa. We<br />
depend on technology to help us enhance the customer experience.<br />
We have moved toward technology, especially social media, to connect our two customer types:<br />
“Associates” and “Clients.”<br />
Social media has allowed us to communicate quickly with our customers. On a daily basis, Express<br />
Employment Professionals advertises on Facebook with hot jobs that need to be filled quickly. We<br />
post content that resonates with and engages our audience, including the latest on the employment<br />
situation, the economy or local business trends in Mobile or Summerdale, Ala.<br />
On Twitter, Express shares content based on what’s happening in employment, as well as<br />
motivational and leadership articles. We use Twitter and LinkedIn to post jobs on a regular basis for our<br />
professional staffing line of business. While connecting quickly with customers, we are very careful to<br />
protect the names of our clients and associates.<br />
At two office locations, we also use email marketing and a localized website specific to our markets<br />
to enhance the customer experience. We send hot job alerts to recruit associates, as well as email<br />
clients about top candidates who are in the recruiting pipeline. Being proactive with this technology<br />
helps us generate numerous new job orders.<br />
The move toward technology, both locally and from our international headquarters in Oklahoma City,<br />
has helped us reach prospective candidates faster, satisfying their need for a job and our client’s desire<br />
to fill job openings quickly.<br />
70 FRANCHISING WORLD NOVEMBER 2015
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