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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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specifically designed to ensure brand<br />

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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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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 />

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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 />

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FRANCHISING WORLD NOVEMBER 2015 23


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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Franchisors and<br />

Established Brands<br />

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


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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 />

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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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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


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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 />

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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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