Discounted Franchise Fees: Is it a Good Idea?

The following article was written by franchisEssentials Guest Author, Joe Caruso. Joe is a respected franchise veteran with 19 years of extensive franchise management and development experience, spending the better part of his career in C-level positions, most recently as Chief Development Officer at Kidde Academy. He is quite active in franchise circles and frequently participates in LinkedIn franchise group discussions and at many franchise-related events from Washington D.C. to Philadelphia. Joe routinely shares his perspective and insight that has proven beneficial to several franchisEssentials startup and emerging franchise clients. We look forward to his continued participation and contributions.

Franchise Fee Giveaways!

Of course you’ve heard about the recent franchise fee giveaways that some franchisors have publicly announced. Is it a good idea? Does it diminish the brand to prospective franchisees? What does it mean to existing franchisees that invested at full price?

Certainly not charging a franchise fee might seem like an attractive offer to prospective franchisees. And franchisors that usually take this approach argue – “we make our money from royalties not franchise fees”. While that belief might rationalize the decision to forgo upfront fees it doesn’t sufficiently address the realities of franchise recruitment and the relative expenses. A franchisor might make “its money” from royalties, but it pays for selling costs, lead generation marketing, legal compliance and development sales/support personnel typically from upfront franchise fees.

Logic of forgoing upfront fees escapes me. It seems to me if your cost per sale is for example $15K, your franchise fee is $30K and you want to sell more franchises you could instead of giving away your upfront franchise fee you might invest more money in your franchise recruitment marketing budget?

What are your thoughts?

Franchise Professionals Share Objectives for Attending IFA Convention

A few weeks ago, I posted a discussion on various LinkedIn Franchise Groups about the upcoming 50th IFA Convention. I asked who was attending the event and what they were hoping to bring back to their organization. The response was great as many people not only shared what they were hoping to achieve, but also shared their thoughts about the event, past and present.

Take note of the objectives and offers of assistance as we share some of the responses…

Deb Evans, President and CEO at Computer Explorers, ICED – ” I am looking forward to connecting with the best in the franchise industry! I always return with new contacts and fresh ideas to implement. I am anxious to spend time with franchise friends I haven’t seen since last year. For anyone that is attending for the first time, feel free to connect with me. I am happy to provide some helpful tips regarding the weekend and meet in person!”

Sheryl Cassity, CIA, CPA, CMA, Director, Internal Audit – “Our firm is looking to expand our connections with the franchise community. We take advantage of this opportunity to reach new franchise concepts and re-connect with existing clients. The educational opportunities are extremely valuable. This is a great opportunity to learn what is important to franchising so we can respond better to meet the needs of the franchise community.”

Tanya Mitchell, CFE, VP Research and Development at Learning Rx – “I always come away with great new ideas for both franchisees and franchise development. I would love to learn new ways to market to qualified candidates, and how zors are using social networking and PPC to draw in qualified candidates.”

Christian Faulconer, CEO at Franchise Foundry – “We go for the networking and the education and we haven’t been disappointed. This year we are hoping to meet startup and emerging franchisors that we can invest in and help grow in 2010. ” I’m also excited to get the word out regarding what Franchise Foundry can do to help emerging franchisors so if you happen to be an emerging franchisor that is attending the conference, let’s chat.”

Christian also gave some strong reasons for young franchisors who are considering attending the event, perhaps for the first time…

1. You probably don’t know what you don’t know. The IFA conference is a great place to learn that there are a lot of smart people out there who know stuff that you don’t. The good news is that they are willing to share what they know.

2. You have a chance to network with people who’ve “been there, done that” and people in your same situation. Through our participation in the IFA, we have made connections that we will benefit from for years.

3. You may find out that you do something better than anyone else. It’s a very rewarding feeling to find out that you’ve been doing something right and to be able to share what you know with others.

Mary Ann O’Connell, CFE, President, FranWise Franchise Consulting – “I love to get together with my franchise friends. The entrepreneurial spirit makes them some of the most interesting people I know. After that, I use the networking and volunteer opportunities to market myself and my company’s services. I love to learn from everyone – what an incredible “university” of ideas we have there. From the seasoned veterans to the people with the newest ideas: there is still so much to learn.”

Scott Hoots, Director of Franchise Attractions at Ripley Entertainment – “I just confirmed I’ll be attending my first IFA convention this year. Looking forward to the interaction and the opportunity to expand my network.”

Marie A, VanDrisse, Executive Account Manager at F.C. Dadson – “I have two goals I’m trying to achieve. Since I’ve only been in the Franchise market for about a year, I want to use the educational seminars to gain knowledge on the in’s and out’s of the business. Secondly, what makes a trade show worth your while, for both myself and our company, is when your can gain either network or new business opportunities. The more networking functions the better.”

Across five different LinkedIn Franchise Groups there were over 40 responses and subsequent comments from executives representing franchisors and professionals representing service providers. All-in-all, there was a diverse representation that makes franchising what it is today. Many are looking to network. Others are hoping to learn. While others are seeking opportunities to generate business. All valid reasons for attending the 50th IFA Convention.

Ironically, the last comment posted was by none other than Dan Durney, Principal at Powerhouse Franchising who chimed in, “All I can say is… Long live the BRICK! See y’all in San Antone!

Yes, we’ll see y’all in San Antonio. Here’s best wishes for a successful event filled with lasting memories that will give new meaning to, “Remember the Alamo!”

Real-Time Search Results: Another Compelling Reason for Franchise Companies to Embrace Social Media

Social Media Blueprint - Making the Most of Social Search (as posted on SmartBrief on Social Media)

If social media was not on your company’s marketing radar three months ago, recent developments in search have most likely changed that. Social media is now intertwined with search like never before, providing a uniquely tangible business case to marketers deliberating on the benefits of social-marketing efforts.

This special report is designed to help you keep up with those changes and learn how others are successfully adapting to cutting-edge technology.

The future of social search with AOL’s Simon Heseltine

Simon Heseltine is the senior marketing manager at AOL. He is responsible for all SEO efforts across AOL’s FanHouse (sports) and News properties. Here’s an abridged version of his conversation with SmartBrief’s Rob Birgfled on the effects social search is having on SEO efforts.

How would you define social search? How does it differ from algorithmic search? What are the benefits of human qualities in search engine input?

The basic difference is that with social search, you’re using humans and human behavior, through tagging, re-tweeting, voting, etc., to assist with the order of the search results. As for whether pure algorithmic search is better than socially adjusted search, look at what Google’s been doing for a while now: For a video to be ranked, they look at views, comments and rankings (among other factors). That is socially adjusted search.

What has happened over the last six months that changes the search equation? What should businesses do to keep pace?

In December, you started to see real-time news streams and Twitter streams for breaking news stories showing up in the search results. In my opinion, they can be a bit distracting, but if they’re improving click-through rates, they’re going to stay, and if they’re not, the search engine will move them out for the next big idea to be trialed.

Where is search going, in your opinion? Given these developments, is search becoming more important to businesses?

I had the pleasure of moderating the “Future of Search” panel at SES Chicago, and what I got from that panel is that there’s a lot of opportunity in mobile, especially with all of the functionality that’s available in today’s smartphones (I just upgraded to a Droid last week, and I’m quite frankly amazed at what can now be done, and the possibilities). I think there’s also going to be a lot more integration of social factors within search, so if your business isn’t looking beyond the “10 blue links,” you should, because your customers are.

Read the full interview on SmartBlog on Social Media.

Recent poll results regarding real-time search results and social media activity…

Now that search engines are including real-time results from Twitter, Facebook, etc., are you paying more attention to what you are sharing/saying?

Not at all.	37.97%
Definitely.	29.11%
Does it even matter?	16.88%
Taking a little more time.	16.03%

Has the integration of social media into traditional search changed your online-marketing strategy in the past six months?

Yes.	44.22%
Still trying to figure out what the changes mean.	27.21%
No.	24.49%
What’s social search?	4.08%

“Franchise Today” Returns With New Focus!

Franchise Today
(Airing LIVE Thursdays at 12 PM CST / 1 PM EST – podcasts available within one hour of original broadcast)

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 returns 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.

Show Notes

Paul Segreto is dedicated to franchise success at all levels. So, whether you’re a franchise professional looking to grow a franchise concept, a franchisee needing some assistance in facing today’s challenges, a franchise candidate exploring franchising as a career alternative or, a small business owner seeking a business expansion strategy, then Franchise Today is for you.

Upcoming Episode

Integrated Franchise Marketing with Guest, Christian Faulconer, CEO at Franchise Foundry
(Thursday, February 11th at 12 PM CST / 1 PM EST)

This week on Franchise Today, Host, Paul Segreto, welcomes Franchise Foundry CEO, Christian Faulconer. Paul and Christian will discuss various forms of Integrated Franchise Marketing and how IFM works within traditional marketing methods and processes. Through and in conjunction with a very wide variety of today’s unique, innovative tools and technology, including social media, IFM has proven very cost-effective. Paul and Christian will touch on Franchise Foundry’s goals and objectives in attracting new partners through Integrated Franchise Marketing efforts.

Social Media Etiquette

Acting and behaving correctly within social media networks is key to effective interaction and building mutually beneficial relationships. Treat others as you would at in-person events. Maintain a high level of ethics, as well as your dignity. Blend into the discussion, earning the right to be noticed. Share, share, share, your thoughts, information, videos and photos. And, don’t do or say anything you wouldn’t do or say in front of your Mother or Grandmother!

The following post by Eric Branter on DigitalLabs.com is a great guideline on how to act within social media networks. Follow them on your road to social media success.

11 Rules of Social Media Etiquette
Post by Eric Brantner on DigitalLabz.com

Since social media is, well, a social medium, it’s important that users understand the proper ways to behave online. No, just because you’re behind a computer monitor in your mom’s basement doesn’t mean all social etiquette goes out the window. It’s quite the opposite—following proper social media etiquette is a key to being successful online (and to making sure you don’t make a complete idiot out of yourself.)

1. Give More than You Receive- If you want to receive attention from others online, you have to be willing to give it first. It’s the old “I’ll scratch your back if you scratch mine” routine. You can’t bust onto a social media site with a sense of entitlement thinking you should be a top user immediately. You have to earn respect from others. How do you do this? By giving more than you receive.

2. Don’t be a Keyboard Gangsta- Probably the worst thing about the Internet is the keyboard gangstas. You’ve surely run across at least one of these in your lifetime. They sit at their keyboard talking trash to everyone they encounter. They say things online that they would never have the nerve to say to a real person’s face. Don’t try to ruin everyone else’s online experience because you don’t have any friends in real life.

3. Add Value to the Site- At the end of the day, the thing that will earn you great connections with others is if you add value to the community. This means not submitting content that nobody cares about and not constantly promoting your brand. Before you ever submit anything to a social media site, ask yourself “Does this article really add value to the community?” If not, reconsider submitting it.

4. Don’t Sabotage Other’s Efforts- This is self-explanatory. Drop all of your e-beefs and hatred. Don’t try to bury others just for the sake of getting ahead. Making enemies on social media sites will get you nowhere fast, and you really do reap what you sow.

5. Remember that Cheaters Never Win- Instead of trying to game the system, why don’t you focus on building a successful social media presence the right way. Sure, you might be able to get some amazing results by cheating, but eventually, you will get caught. And once everyone sees you for the cheater you are, you can’t un-ring that bell.

6. Build Quality Relationships- People are more willing to help those who they really know. By building quality relationships with other users, you’ll always have someone in your corner to back you up. Remember, relationships require the participation of both parties; so, always be a good participant in your social media relationship.

7. Stop Pushing the Envelope- One of the fastest ways to alienate people online is to constantly flood them with requests for helping you out. Whether you’re constantly shouting your content or always Tweeting asking people to comment on your blog, eventually, everyone will lose their patience with you. It’s like the boy who cried wolf. People will tune you out if you’re constantly pushing the envelope.

8. Respect the Community- This might be the most important rule of social media etiquette. Show respect to the community. It’s not that hard to do. Just make sure you don’t step out of line, and always treat everyone the way you want to be treated. These are simple social skills you should already be following in real life; now, you just have to follow them online too.

9. Listen to Others- Your first reaction whenever someone disagrees with you online is probably to tell them how wrong they are. Instead of constantly fighting back, take the time to listen to what they’re really saying. Listen to the people commenting on your blog or Tweeting at you. Understand where they’re coming from. You don’t know everything, and you can learn from others if you take the time to listen.

10. Be Accountable for Your Actions- Because of the anonymity the Internet allows, there is little to no accountability online. People say and do whatever they please without facing any repercussions. Don’t be that guy. Instead, try to be honorable by taking responsibility your actions online. By being accountable, people will respect you, whether they agree with you or not.

11. Be Nice- All of these points add up to one thing—just be nice. Is it really too much to ask for people to be kind to one another? Call me old-fashioned if you like, but there’s nothing wrong with being nice to others online.

What rules of social media etiquette would you add to the list? Share them below!