Welcome to franchisEssentials!

Franchise Marketing & Development in a Web 2.0 world

The days of promoting franchise concepts and brands primarily through static, expensive, two-dimensional advertising are rapidly becoming things of the past. Sure, franchising has experienced a great run and will most likely remain the backbone of small business. However, the current state of the economy has created a necessity to explore more cost-effective methods and processes in marketing franchise opportunities, products and services as franchise growth objectives continue to be on the forefront of franchisors’ minds in the United States and abroad.

Besides being cost-effective, today’s franchise marketing and development efforts must be technologically advanced to attract a more sophisticated, educated (and cautious) franchise candidate and consumer than the franchise industry has ever seen before. A trend that is sure to evolve as an increasing number of transitioning, highly-skilled and educated business professionals and corporate executives explore franchising as a career alternative while already successful street-smart entrepreneurs investigate franchising, perhaps for the first time, as part of their diversification and expansion strategies. As well, value-conscious consumers are spending more and more time researching information online before making a purchase, and not only for the best value. Customer reviews, consumer reports, community involvement and professional affiliation are also being considered.

In addition, today’s franchise marketing and development efforts must be an integration of new technology and traditional strategies, creating what we refer to as Integrated Franchise Marketing (IFM).  It’s a comprehensive approach to achieving multiple goals and objectives within startup, emerging and mature franchise organizations. IFM directs its focus on creating or improving brand awareness for the franchise organization at local, regional and national levels, driving revenue for franchisees, and generating genuine interest in the franchise concept itself.

The fact is, candidates and consumers alike, are embracing new technology, and specifically Social Media and Web 2.0 technology, as a way of researching information and exploring opportunities…including today and tomorrow’s franchise brands, products and services. From this diligent research they will make a buying decision, and will also network with others and share the information they’ve accumulated along with their experience with the company they’ve chosen to invest in or do business with. Basically, with the company they’ve grown to trust!

Welcome to the world of Franchise Marketing & Development 2.0 and welcome to franchisEssentials!

Paul Segreto, President

For more information on franchisEssentials and its service offerings please refer to the tabs across the top of this site, or, contact Paul Segreto by email or by telephone at 832.838.4822. Thank you.

Controlled Growth Key to Success for New Franchise Concepts!

Working with entrepreneurs exploring franchising as a business expansion strategy, I’m often asked the question, “How does a new franchise company sell franchises without brand recognition?” Here are my thoughts…

Initially, the founder is the brand. It’s his or her passion for the business. It’s how he or she treats customers and employees alike. It’s how the business is promoted within the local market. Not just through typical advertising efforts, but through solid grassroots, organic efforts.

The initial franchise candidates are actually the “low hanging fruit” of the original business. These are the customers that inquire whether or not the business is a franchise and how they can learn more about owning their own. Most are interested because the business appears to be thriving and they’ve seen the owner (founder) time and again, always smiling and shaking hands. Public Relations efforts should ensure this occurs.

They admire the owner a great deal and will base their decision to open a franchise location, on the potential of establishing a relationship with the owner. They’ll compare the opportunity to other franchises and justify to themselves that they’re in on a ground floor opportunity with a direct line to the founder. As such, they feel their probability of success is greater because their location will be in the home office city and if they need help, they could easily approach the founder and the home office because of the proximity to their franchise location.

Ideally, the next few franchisees will also be in the same market as the original business and the first franchise location. It’s prudent to only expand locally until critical mass is established in the market, ad cooperative is developed and support systems are perfected. Now the concept is ready to expand outside the initial market.

However, it is often financial suicide to entertain requests from candidates all over the country. Instead, development efforts should be concentrated on one or two cities relatively close to home office city. For instance, if original business and home office is in Houston, the natural progression would be to promote the opportunity next in San Antonio/Austin and Dallas/Fort Worth areas.

As these markets start to become established with franchise locations, it’s advisable to promote the concept in another two or three areas. Maybe, explore another “hub” that is similar to Houston with two additional cities that are close by like San Antonio/Austin and Dallas/Fort Worth.

Let’s say, Atlanta as the next hub. Expansion efforts should be the same as they were in Houston and expansion out of that market shouldn’t occur until Atlanta has a critical mass. Then, when that occurs, the opportunity could be promoted close by in Nashville and Charlotte. Now, you see the spokes of national expansion beginning to form.

While this is going on, maybe inquiries start coming in from the San Francisco area. So, the next phase of expansion might be in the Bay Area. The Bay Area becomes another hub, and once developed, the franchise opportunity could be promoted up the road in Portland and to the East in Sacramento and the process continues.

It’s all about controlled growth and the founder exhibiting tremendous restraint in expanding too fast and in areas far away from his core group and subsequent hubs to be able to provide ample support, create ad cooperatives and build the brand geographically. Chances of franchise success are far greater at all levels of the franchise organization within the parameters of a controlled plan of development.

So, to answer the often-asked question directly, I suggest everyone in the system having a clear understanding of the founder’s vision and if it includes anything but a controlled development plan with his or her firm commitment to actively participate in the franchise sales process, the chances of selling the first ten to twenty franchises will be a frustrating, monumental task that most likely will fail miserably.

Learn more about the challenges and issues facing startup franchisors on Franchise Today.

What is IFA Fran-Guard?

The International Franchise Association’s new, greatly expanded franchise sales management and compliance program will help franchisors take proactive steps to reduce risks, manage growth, and build a stronger, healthier franchise system. IFA Fran-Guard covers both the legal and business aspects of compliance with a series of modules designed or CEOs and senior executives, franchise development professionals, in-house counsel and franchise attorneys, paralegals and compliance managers.

CEOs and Senior Executives

Not only does a system-wide compliance program protect your franchise it can make it more profitable. Modules cover the Business Case for Compliance, Franchise Sales Growth & Management, and Best Practices.

Franchise Development Professionals

There’s more to compliance than legal requirements. Learn how a sales management and compliance program can increase your effectiveness and help drive franchise sales.

In-house Counsel, Franchise Attorneys, Paralegals and Compliance Managers

It’s important to integrate all aspects of franchise sales management and compliance from disclosure to franchise sales, field support, and operations. IFA Fran-Guard modules cover practical steps to implement a system-wdie compliance program.

All CFEs and CFE Candidates

IFA Fran-Guard has been incorporated into ICFE’s professional development program. IFA members who successfully complete the IFA Fran-Guard program will receive an ICFE Fran-Guard Certificate. All modules are approved for CFE credits.

Where is IFA Fran-Guard Available

Programs will be offered throughout the year at various IFA meetings and conferences and in different formats to make participation more convenient. Courses will be presented online via IFA University and through a series of webinars. A schedule of upcoming sessions may be found on the IFA website.

Fran-Guard Discussed on Franchise Today

Recently on Franchise Today, Paul Segreto welcomed as his guest, David French, Vice President, Government Relations at the International Franchise Association. Paul and David discussed franchise compliance and the development of the IFA FranGuard Program previously introduced at the IFA Convention in San Antonio. Listen On-Demand

About the International Franchise Association

The International Franchise Association, the world’s oldest and largest organization representing franchising, is the preeminent voice and acknowledged leader for the industry worldwide. Approaching a half-century of service with a growing membership of more than 1,100 franchise systems, 10,000-plus franchisees and more than 500 firms that supply goods and services to the industry, IFA protects, enhances and promotes franchising by advancing the values of integrity, respect, trust, commitment to excellence, honesty and diversity. For more information, visit the IFA Web site at www.franchise.org.

Source: International Franchise Association

Misinformation About Franchisors and Bankruptcy (Updated)

Recently, I pointed out to the franchise community, an article on About.com about franchisors and bankruptcy. Having worked with a franchisor that was forced into bankruptcy, I knew the article was way off-base, the alleged facts entirely inaccurate, and the suggestions directed at franchisees alarming to say the least. I knew I could not sit back with a clear conscience thinking that franchisees may act on this misinformation.

Since then, Dan Daszkowski, the person listed as the author of the article, “How to Prepare for Franchisor’s Bankruptcy” contacted me and explained his position in the matter…

“Hi Paul, Thanks for pointing this out to me. This was totally my fault because I hired a writer that I felt was knowledgeable in this area to write this article and blog post and they obviously were not.

As an About.com Guide I am able to hire subcontractors to write and I only do this from time to time when I feel someone is more qualified than I am to cover a certain topic. Obviously I made a bad judgment call with this writer and I am glad you pointed it out. I have taken down the article and blog post to avoid any further confusion and so I do not mislead any franchisees that are currently in this situation.

I understand your frustration but I think you took it a little far in your blog post “Read Mr. Daszkowski’s bio and tell me if you believe he has the experience and knowledge to render legal advice about franchising, bankruptcy or about anything!” I have deleted the incorrect information from About.com and it would be great if you can delete this post as well. I am fully aware I do not have the experience to give legal advice but the rest just seems like a personal attack…”

Well, here’s my response to Mr. Daszkowski:

My only goal in writing my post was to point out and emphasize the misinformation provided in your article. As information published on the internet has the capability, if not probability, of lasting forever, I wanted to be certain there was no mistake the information provided in the article was inaccurate and that you could not possibly be mistaken for an attorney.

You stated to me that you felt I took the issue a little too far and personally attacked you. I am sorry that you feel that way but I do not regret my actions and statements as they were obviously instrumental in addressing inaccurate information and unwarranted advice that could have been catastrophic to any franchise system facing bankruptcy.

Speaking from experience, I have seen franchisees blindly follow similarly wrong advice as provided in your article only to be ordered by the United States Bankruptcy Judge to remit all withheld royalty payments to the franchisor within five days of his decision. Unfortunately, many of the franchisees had “spent” the monies that should have been earmarked for [eight months] royalties causing a near-catastrophic series of events as they had to come up with thousands of dollars they no longer had in their possession. The potential consequence for not abiding by the order: contempt of court and possible jail time!

When all was said and done, the franchise system unraveled and franchisees that may have survived, even as independents, ended up out of business or ironically, in bankruptcy. As for the brand and trademark, as well as the franchise agreements, as I recall, they were considered assets of the franchisor, and subsequently within the jurisdiction of the Bankruptcy Trustee.

So, [Mr. Daszkowski] thank you for pulling down the article to avoid any further confusion and to prevent franchisees that are currently in a bankruptcy situation from being misled.

Respectfully,

Paul Segreto

Guerilla Marketing for Franchisees on “Franchise Today”

This week on Franchise Today, Guerilla Marketers Todd Woods and Eddie Leonard join Show Host, Paul Segreto, for a packed hour of discussing Guerilla Marketing for Franchisees and how its principles benefit the entire franchise organization. Todd Woods co-authored the book, Guerilla Marketing for Franchisees with Jay Conrad Levinson, the “Father of Guerilla Marketing.” Eddie Leonard is a freelance marketer and a Certified Guerilla Marketing Strategies Trainer and Marketer.

Franchise Today

Franchise Today is hosted by franchisEssentials President, CEO and Founder, Paul Segreto. Dedicated to franchise success at all levels, Paul brings unique perspective, entrepreneurial spirit and extensive industry experience to franchise marketing and development, the complex mechanisms behind franchise stability and growth.

Franchise Today recently returned to BlogTalkRadio after a short hiatus to expand upon this unique perspective that continues to evolve as the franchise community explores more effective ways of attracting today’s more sophisticated and technologically-advanced consumers and franchise candidates. Integrated Franchise Marketing, Media and Development has been identified as an innovative concept that addresses today’s challenging business environment, providing mutual benefits throughout a franchise organization and is the new focus of Franchise Today. As many within the industry fell short in achieving its goals and objectives for 2009, there’s no time like the present to explore innovative strategies that will benefit franchisors and franchisees alike.

David French, IFA VP Government Relations Discusses Franchise Compliance and IFA Fran-Guard Program on “Franchise Today”

This week on Franchise Today, Paul Segreto welcomed as his guest, David French, Vice President of Government Relations at the International Franchise Association. The topic of discussion was Franchise Compliance and the IFA Fran-Guard Program. For the benefit of those not yet familiar with this new program we’re providing the following basic information.

Fran-Guard: Helping to Reduce Risk, Manage Growth, and Build Stronger, Healthier Franchise Systems

The International Franchise Association officially launched Fran-Guard™, an expanded franchise sales management and compliance program to help IFA members reduce risks, manage growth and build stronger, healthier franchise systems, during the recent IFA 50th Annual Convention in San Antonio.

Fran-Guard™ is designed to educate franchisors about their obligations under federal and state laws governing the offer and sale of franchises and promotes sound compliance practices. The program was created as part of IFA’s ongoing work with the Federal Trade Commission to develop educational programs to help the franchise industry comply with regulations and to build strong, sustainable systems.

“Fran-Guard™ is an excellent way for IFA members to work together to protect and promote franchising by maintaining high ethical standards and good business practices,” said outgoing IFA Chairwoman Dina Dwyer-Owens, CFE, chairwoman and CEO, The Dwyer Group. “IFA members who participate in the program will be better prepared, will have a better understanding of compliance-related issues and will have a competitive advantage over those who do not.”

The IFA Board of Directors voted to place the development and management of the program under the Institute of Certified Franchise Executives. A committee of ICFE Board members and representatives of the Corporate Counsel Committee established the objectives of the expanded program, including to:

-Expand the compliance program to more IFA members by making it more accessible, more convenient and more affordable.

-Standardize the content and learning objectives of the compliance program for consistency.

-Incorporate the compliance program as part of the continuing education requirements of the Certified Franchise Executive (CFE) program. Establish franchise sales compliance core competency and the test to measure it. This is a prerequisite for granting a CFE certificate for completing the course. Successful completion of the course by an individual leads to the granting of the IFA Fran-Guard ™ Certificate.

IFA Fran-Guard seminars will be offered throughout the year at various venues including a full-day session Feb. 4 during the ICFE Special Sessions at IFA’s 50th Annual Convention, at the International Franchise Expo, April 9-11, in Washington, D.C., at the IFA Legal Symposium, May 16-18, in Washington, D.C. and in conjunction with IFA Legal Roundtables in Dallas, Chicago, Tampa, and Washington, D.C. A series of “Introducing Fran-Guard™” webinars will also be offered to all IFA members, and will be offered on a complimentary basis to all new IFA members—those who have joined IFA within the past year. Plans are underway to develop a series of IFA Fran-Guard ™ modules online via www.ifa-university.com.

Over the last 50 years, IFA has taken many steps to promote ethical business practices and to educate its members about best practices. One example is the Institute of Certified Franchise Executives (ICFE) established in 1985 “to enhance the professionalism of franchising by certifying the highest standards of quality training and education.” Today, with more than 1400 executives enrolled in the program, the ICFE offers franchising professionals the opportunity to learn, grow professionally and reach a recognized standard of excellence in the franchising community.

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