The HR Department You Need At a Price Within Reach
You need an HR department to keep things running smoothly. But the time and cost to create one can be daunting.
That’s why there’s Paychex HR: A complete package of HR services and employee benefits designed to give franchises the benefit of an HR department … without the expense of building in-house.
Unleash your potential with franchise opportunities under the #1 youth enrichment franchise platform. With brands supporting kids through their infant years to adolescence years, franchise owners can build a successful business while helping kids learn, play and grow.
There are over 1,300 units under the platform already, and our brands offer multiple paths to ownership - owner, operator, multi-unit, and investor. We’re looking for entrepreneurs who are ready to own the kids market with us!
By Ritwik Donde, FRANdata
By Stewart Germann, Stewart Germann Law Office
By Ron Stilwell, FullSpeed Automotive
By Kendal Tyre, Nixon Peabody LLPBy Pete Baldine, Moran Family of Brands
By Thomas A. Wolfe, Ziebart International Corporation
By Bill Meierling, IFA
EDITORIAL: Publisher Matt Haller
Associate Publisher Jennifer Brandeen
Editor-in-Chief Courtney Pettinella
MARKETING & PRODUCTION: Vice President of Communications and Marketing Bill Meierling
Creative Director Heather Bartlow Graphic Designer Catherine Marinoff
By Stephen Rupp, IFA
ADVERTISING & CIRCULATION: Advertising Senior Director Carly Wooley
Technology & Operations Director Sara Williamson
Manager, Advertising Lauren Smith
Franchising World (ISSN 1041-7311) “Volume 54, Number 6,” is published by the International Franchise Association, 1900 K St., N.W., Suite 700, Washington, D.C. 20006.
For advertising information, call: IFA Advertising Department (202) 628-8000.
Franchising World welcomes views and comments from its readers. Correspondence should be addressed to Editor, c/o Franchising World at 1900 K St., N.W., Suite 700, Washington, D.C. 20006. Franchising World reserves the right to edit letters for publication and also reserves the right to refuse advertising. With the publication of Franchising World, IFA is not offering legal, financial or any other professional advice or endorsements. Readers are encouraged to seek advice from professionals in specialized fields before acting on any information published herein. The views and opinions expressed in Franchising World are those of the author(s) and do not necessarily reflect the views and opinions of IFA members or staff.
Copyright © 2022 International Franchise Association.
OUR YEAR IN REVIEW
2022has been a banner year for the International Franchise Association, and more specifically for you — our members. We have launched a number of new initiatives to better serve you and support the entire franchising community, strengthening the sector as we look to the future. This issue will detail the new programs IFA has launched to provide strengthened advocacy efforts to deliver results protecting the franchise business model, new avenues for professional development and franchise education, and reimagined events for business development and expanding your network.
We have heard and felt how much excitement there is in the franchise family — about their own businesses and the franchising community as a whole. 2022 brought back a full return to in-person events, allowing us to come together at the events we have known and loved for years. Plus, we added a number of new events in partnership with Franchise Update Media and new professional development opportunities at MFV Comexposium events. The power of seeing each other in person reinforced what we have always known — that we are stronger together.
Together, we have fought a number of advocacy battles on the national and state level — the PRO Act in Congress, the nomination of David Weil to the Department of Labor’s Wage and Hour Division and the FAST Act in California. What each of these efforts have shown is the power of collective voices to reach the lawmakers and regulators who don’t understand the franchise business model. As new legislative and regulatory threats arise, the more voices we have to share their stories and educate on how franchising really works, the greater results we will see.
We also know we learn best from each other and those who have come before us. To offer you more in your professional development, IFA has revamped our Certified Franchise ExecutiveTM (CFE) program, partnering with the University of Louisville to offer the new IFA Foundations of Franchising program as part of the curriculum. With the popularity of webinars and online learning during the pandemic, we have continued to expand the frequency and topics covered to deliver value at the time and place most convenient to you, and we launched IFA Academy so all professional development can be housed in one convenient place. We also have brought more education opportunities to in-person events and expos. Wherever you are in your franchising journey, we want to make sure you and your team have the tools available to continue your career growth.
As we close out the year, I continue to be amazed at the ways our membership has come together to protect, enhance and promote the franchise business model — with IFA proud to lead that charge. As we look to 2023, we are more excited than ever for the IFA Annual Convention, which is just around the corner. In February, we are “All in, all here” in Las Vegas at the Mandalay Bay Resort complex. We cannot wait to discuss the latest trends, engage in learning and solve the challenges of today — while having a blast together.
Thank you for an incredible year, and we look forward to seeing you in February!
Sincerely,Matt Haller President and CEO International Franchise Association
The International Franchise Association protects, enhances and promotes franchising.
The preeminent voice and acknowledged leader for franchising worldwide.
Charles E. Chase FirstService Brands IFA Chair
David Humphrey ECP-PF Holdings Group, Inc. Vice Chair
Mary Kennedy Thompson, CFE Neighborly Second Vice Chair
Catherine Monson, CFE
Propelled Brands Immediate Past Chair
William G. Hall, CFE Dairy Queen Franchisee Treasurer
Stuart Hershman DLA Piper LLP (US) Secretary
BOARD OF DIRECTORS
Jerry Akers Great Clips of Palo, IA
Tom Baber Money Mailer of Mercer, Somerset County
Sam Ballas, CFE East Coast Wings + Grill
Marcus Banks Wyndham Hotel Group
Ray Bennett Marriott International Michael Browning, Jr. Unleashed Brands Mitch Cohen Sola Salons of New York
Adam Contos RE/MAX, LLC
Randy Cross Fish Window Cleaning
Kimberly Crowell Jersey Mike’s Subs of Tallahassee, FL
Troy Dahl Ecolab Inc.
Steve Danon Restaurant Brands International Jay Duke BDO
Clint Ehlers FASTSIGNS of Willow Grove, PA and Cherry Hill, NJ
Sean Falk, CFE WolFTeaM LLC
Ron Feldman, CFE ApplePie Capital, Inc.
Lane Fisher, CFE FisherZucker LLC Greg Flynn Flynn Holdings
Ericka Garza Au Bon Pain The Bakery Cafe Genna Gent McDonald’s Corporation
Daniel Halpern Jackmont Hospitality, Inc.
Dustin Hansen, CFE InXpress
Steve Hockett Great Clips, Inc.
James Holthouser FOCUS Brands
Harvey Homsey Express Services, Inc.
Earsa Jackson Clark Hill Strasburger
Jay Johns IHOP
Tamra Kennedy Twin City TJ’s, Inc.
Aslam Khan Falcon Holdings
Todd Leff Hand and Stone Massage and Facial Spa
Joe Lindenmayer, CFE California Closets of the Gulf Coast
Ned Lyerly CKE Restaurants Holdings, Inc.
Dennis Maple Goddard Systems
Erin Martin Little Caesars Enterprises, Inc.
Dan Monaghan, CFE Clear Summit Group
Barbara MoranGoodrich, CFE Moran Family of Brands
Kevin Morris Domino’s Pizza, Inc.
Dave Mortensen Self Esteem Brands
Caroline Miller Oyler Papa John’s International, Inc.
David Pepper Choice Hotels International
Matthew Patinkin Auntie Anne’s Pretzels and Cinnabon Franchisee Forum Chair
Graham Weihmiller, CFE BNI Global Franchisor Forum Chair
Edith Wiseman, CFE FRANdata Supplier Forum Chair
Stephen Piacentini The Wendy’s Company
Todd Recknagel National Envy Development, LLC
Meg Roberts, CFE The Lash Lounge
Gary Robins The G & C Robins Company
Al Rodriguez Sport Clips of Western PA
Ama Romaine G6 Hospitality
Chris Rondeau Planet Fitness
Luis San Miguel Fresh Dining Concepts LLC
Claudia San Pedro Sonic Drive-In
Jyoti Sarolia Ellis Hospitality Group
Karen Satterlee, CFE Hilton Worldwide
Stephen Shields Express Employment Professionals of Joplin, MO
Jeffrey Sopp Kensington Hill Partners
Cheryl Stanton BrightStar
Kenny Thompson PepsiCo
Carolyn Thurston Wisdom Senior Care
Charles Watson, CFE Tropical Smoothie Café
Steve White PuroClean, Inc.
Tim Williams Williams Fried Chicken
Wanda Williams Yum! BrandsFrom the Desk of IFA President and CEO Matt Haller
CertaPro Painters® has appointed Dawn Perry as the new Chief Brand Officer.
People ON THE MOVE
Ron Stilwell has been promoted to the President of Franchising of FullSpeed Automotive. Ron previously served as the Chief Development Officer.
HOA Brands (Hooters and Hoots Wings) has appointed Michael Arrowsmith as the new Chief Development Officer.
Stefanie Lee has been appointed as the new Chief Financial Officer of TITLE Boxing Club
Looking to change the way people perceive intravenous IV therapy and turn cellular health into a lifestyle, The DRIPBaR, an IV nutrient therapy franchise, has signed a talented and driven franchisee who plans to expand the brand to 10 new locations throughout Ohio.
The brand is targeting Ohio for its continued economic development as well as continued growth in population throughout the state. The continued expansion of the franchise comes at a time when the public is more cautious about their health and more invested in finding ways to stay healthy. The DRIPBaR is expected to open as many as 50 locations in 2022 in areas across the country with nearly 450 in various stages of development.
Donatos is expanding its presence by planning dozens of locations in the Atlanta metro area. The announcement comes at a time when Donatos is set to open two locations this fall in Toco Hills and Avondale Estates that will be owned and operated by franchise partner Oliver Restaurant Group LLC.
Today, Donatos is served in over 425 locations across more than half of the U.S., including over 170 traditional Donatos restaurants, and its products are proudly served in nine sports and entertainment venues and one REEF Kitchen. Additionally, Donatos continues to expand through its strategic partnership with Red Robin adding Donatos pizza to its menu.
Smoothie King has named Marianne Radley Chief Marketing Officer.
Jeremiah’s Italian Ice has successfully opened 30 new locations this year, increasing its total units by 50 percent in the last nine months and reaching its 90th open location. This includes opening the brand’s first locations in new states such as Colorado, South Carolina, Alabama and Tennessee.
Mergers & Acquisitions
Neighborly® has acquired Junk King®. Junk King has more than 150 locally owned franchises across 32 states and in Canada (as Junk Works®).
Awards & Honors
MY SALON Suite recently celebrated its top performing franchisees at its 7th annual convention in Tampa, Florida. Award winners include:
Race to Real Estate Award: Robert Ortman and Bob Harvey (Goodyear, AZ)
Fastest to Build Award: Megan Class and Eric Mckinney (Dayton, OH )
Fastest to Fill Award: John Weiss (Greenfield, WI)
Hard Hats Off to You Award: Zoe Salomone (Braintree, MA)
B.I.G. (“Beauty in Giving”) Award: Harrigill Group (Multiple locations in MS and LA)
Rising Star Award: John and Antonia Rowdon (Sacramento, CA)
FLAIR Ambassador: Joe Carretta (multiple locations in NJ and PA)
Franchisee of the Year: Jenn Navarro (Multiple locations in PA)
Neighborly® announced its top performing franchise owners of the year during the brand’s largest attended annual reunion conference in October in Nashville, TN. The 2022 Franchisee of the Year award winners included:
Aire Serv®: Ben and Betsy Boyce and Sarah Boyce
Dryer Vent Wizard®: Ed Rauch
Five Star Painting®: Anthony Kulikowski
Glass Doctor®: Justin and Jennifer Eimers
The Grounds Guys®: Travis Hicks and Travis Reed
HouseMaster®: Tim, Trent, and JoAnn Paino
Molly Maid®: Harry Young
Mosquito Joe®: Sean and Sara Bess
Mr. Appliance®: Anthony Arroyo
Mr. Electric®: Matt and Lara Bruhn
Mr. Handyman®: David Sipp
Mr. Rooter® Plumbing: Scott Hobbs
Precision Garage Door®: Jim Rapp
Rainbow Restoration®: Dallas Nevill
Real Property Management: Shawn and Joni Wolfswinkel
ShelfGenie®: Bret Chevrier
Window Genie®: Robin McKenna
9Round Franchising, LLC has been ranked 78th on Entrepreneur magazine’s 2022 list of Top Franchises for Veterans. This is the sixth consecutive year 9Round has been included on this list.
Restoration 1® has been ranked 98th on Entrepreneur magazine’s 2022 list of Top Franchises for Veterans. Restoration 1 offers veteran-friendly financing options, including a 20 percent discount on the initial franchise fee for veterans.
Franchising Gives Back
Celebree School raised $57,780 (exceeding its donation goal of $50,000) during its 3rd annual charity golf tournament. All funds have been donated to the MedStar Franklin Square Neonatal Intensive Care Unit (NICU) to support the hospital in providing life-saving care. The tournament took place at the Links at Challedon in Mt. Airy, MD in October where 125-plus golfers, 25 volunteers and 20plus sponsors gathered in support of MedStar.
Tropical Smoothie Cafe raised more than $670,000 to help fight childhood hunger this back-to-school season. The national fundraising effort marks the first activation between Tropical Smoothie Cafe and No Kid Hungry, a national campaign run by Share Our Strength, which aims to help give all kids access to three healthy meals a day.
From August 31 to October 4, Tropical Smoothie Cafe donated $1 from every Sunshine Smoothie® purchased to No Kid Hungry, and many guests took advantage of the opportunity to round up their purchase to the nearest dollar, with the difference also going to No Kid Hungry. More than 1,150 franchised Tropical Smoothie Cafe locations participated.
Predictive Performance Executive Search
INCREASING BRAND GROWTH THROUGH STRONG RELATIONSHIPS AND IMPROVED PROCESSESBy Justin Nihiser, Code Ninjas
How to reach milestones with the right people, procedures and plans
The incredible benefit of investing in a franchise is its tried-and-true system, which is something franchisees undoubtedly expect, and many look forward to, when signing on the dotted line. With regard to ensuring their success, it is up to the brand to have the correct systems in place to allow for that growth and opportunity. That’s why in order to maximize franchise sales, companies must be willing to admit their mistakes and apply the appropriate changes.
It’s no secret that relationships are a major key to building success within a business, but it’s something I cannot stress enough.”
Focus on Relationships
It’s no secret that relationships are a major key to building success within a business, but it’s something I cannot stress enough. In the past year, Code Ninjas has made some very large transitions in regards to the platforms we utilize, and I owe many of the success of these changeovers to the time and effort we put in to building strong and longlasting relationships with our official Franchise Advisory Committee and Independent Association, who have been a tremendous help during these times of company-wide dramatic change. Having a highly-collaborative focus allows us to work alongside with each other and understand how they can deliver strategic initiatives for our system. Receiving input directly from the franchisees’ perspective is invaluable. These are the individuals who make it all possible, and fostering the relationship with them is of the utmost importance to us. Strengthening that bond and always leaving the door open for feedback is true transparency, and that’s how we grow together as a brand.
Constantly Improving Our Processes
It’s important to take a look in the mirror, quite regularly, to ensure you’re the absolute best version of yourself that you can be. When it comes to running a business, there’s always something that can be improved. This past year at Code Ninjas we focused specifically on shifting the opening processes for our new centers. We dramatically improved the ins-and-outs of the grand opening operations, which resulted in an incredible outcome for our franchisees, who are experiencing more successful openings now than ever
before. These positive experiences for our franchisees are what helps us to continually HOLD a reputation of the nation’s fastest growing kids coding franchise, which in turn helps to sell even more locations — contributing to our substantial growth and increased revenues.
Facing Adversity Head-On
On the headwinds of the COVID-19 pandemic in 2022, Code Ninjas opened 50 new locations. With so many unknowns, we as a company never considered COVID to be a short-term issue. Although it was an unfortunate time, we took the opportunity to learn as much as we can about succeeding in a time of crisis. We had to adapt to survive, and that we did. Code Ninjas more than doubled our average revenues from the doldrums of COVID-19
to now. Aside from the numbers, we learned the priorities in place for our employees and customers. The health and safety of everyone involved in this business was and still is at the top of our minds — and we are thankful to have come out of the pandemic on the other side stronger and wiser.
Exceptional Growth is Not without Exceptionally Hard Work
By the end of this year, we hope to hit a major milestone of 400 locations open. I believe that our positive work culture plays a major contribution to meeting our goals. Organizations tend to thrive when employees are given clear directives on what results should look like, which is our method of growth here at Code Ninjas. We are a results-focused company and try our best to anchor our efforts on the right things. If you instill that mindset into your team, your growth will soon follow.
Justin Nihiser is the CEO of Code Ninjas. For more information about IFA franchisor member Code Ninjas, visit franchise.org/ franchise-opportunities/code-ninjas-llc
Code Ninjas more than doubled our average revenues from the doldrums of COVID-19 to now.”
I believe that our positive work culture plays a major contribution to meeting our goals.”
You need an HR department to keep things running smoothly. But the time and cost to create one can be daunting.
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RE-BATH REFLECTS ON STRONG PERFORMANCE, NEW PARTNERSHIPS, AND INDUSTRY ACCOLADES AS IT ENTERS NEXT GROWTH ERA IN 2023By Brad Hillier, Re-Bath
To-date, we are projecting nearly a 14 percent year-overyear increase in systemwide sales, driving existing and new franchisees to the franchise opportunity.
Re-Bath has awarded 14 franchise agreements in 2022, with four more projected by year-end, growing unit count to 126.
It is an opportune time as our business is experiencing industry-leading growth. The continued success we’ve experienced is no doubt due to our incredible team. We’re prioritizing results, support, and innovation to lead us into our next era of growth as we continue to expand our nationwide footprint.
Re-Bath is riding a wave of momentum as we inch closer to our goal of becoming a billion-dollar-company over the next several years. Key to achieving this milestone will be a strategic continued focus on partnering with exceptional franchisees, strengthening our world-class corporate support and enhancing the customer-service experience with new technology and innovation. Combined, these efforts will help propel Re-Bath to a household name across the country.
Large retail partnerships are contributing to our overall growth and market share gains. Not only do partnerships with top-tier big-box home improvement retailers help elevate our brand awareness, but they contribute to our franchisees’ bottom line, making our franchise opportunity an attractive investment.
Per Re-Bath’s Franchise Disclosure Document, franchisees with territories between 500,000 and 1.25 million residents had average revenues of over $2.35 million in 2021, up 9.5 percent from 2020*.
In 2022, we gained another big-box retail partner in the home improvement space, and as we continue to add to and strengthen these partnerships, the sky’s the limit in terms of what we can achieve.
It’s been rewarding to see the industry take note of our strengths and enhancements. Most recently, Re-Bath earned the No. 1 spot for “Best Bathroom Renovations” by the most trusted name in all things home improvement, Bob Vila, on its 2022 Best Home Improvement Contractors of 2022 Ranking. Additionally, Re-Bath ranked No. 2 on Qualified Remodeler’s Top 500 Nationals List and was recognized by Entrepreneur’s Franchise 500®, the world’s first, best and most comprehensive franchise ranking.
Our company is on track to close out a remarkable 2022 that reflects impressive same-storesales growth alongside multiple franchise openings and signed agreements.
We’ve built an incredible infrastructure for growth and by partnering with like-minded franchisees who see the strength in the brand, we’ll become an unstoppable force.”
Thanks to our national TV advertising presence and close relationships with the largest big-box home improvement stores in the country, we’re able to continue growing our loyal customer base while our franchisees and installers deliver an effortless customer experience – something that truly sets this company apart.
Re-Bath’s remarkable customer service has led to an overall, combined 4.7-star rating across all review sites including Google, Facebook, Better Business Bureau, Houzz, Consumer Affairs and Yellow Pages.
World-Class Customer Service
We understand that customers are the lifeblood of our organization and enable our franchise locations nationwide the ability to grow and thrive. There is immense opportunity to deliver exceptional in-person experiences that in turn establish and build relationships that drive brand value and overall performance, and we’re prepared to lean into that.
Establishing emotional connection with the customer is critical – one of the best opportunities to establish that connection is through the experience with your brand.
Attention needs to be placed on perfecting the personalized interaction between the customer and the employee during the visit. While many franchise brands have made impressive digital improvements over the years, equal attention should be placed on energizing frontline workers to rebuild and reinvigorate the customer experience. This may require enhanced training, new incentives, key messages from leadership, etc. Energized and motivated employees who are equipped with the resources they need to deliver on your brand promise will have a direct impact on the customer experience. They hold the power in ensuring whether or not the customer leaves the experience feeling emotionally satisfied.
Remember, too, that while most brands, including ours, have integrated new digital technologies in their business models, you must not lose sight of the value in authentic human connection and ‘real’ experiences that make your brand great.
Being a consumer-centric brand will drive our strong performance and franchise development in the years ahead. We continue to seek qualified and engaged individuals interested in the home improvement industry who are hungry to dive into the world of franchising. Today, with more than 120 locations, Re-Bath is on track for strategic franchise expansion across North America.
As our brand gains more accolades, we remain committed to the foundational elements that will drive sustained performance. Having a superior product and service gives you the basic foundation you need to scale, but from there, our team must continue to produce the best-in-class tools to support our franchisees. We’ve built an incredible infrastructure for growth and by partnering with like-minded franchisees who see the strength in the brand, we’ll become an unstoppable force.
* The figures reflect average and median sales revenue and average gross profits for 30 Re-Bath franchised businesses with territories of between 500,000 and 1.25 million residents, and which were in operation for at least one year. These averages and medians are based on a 52-week fiscal period from January 1, 2021 through December 31, 2021. Of these 30 franchised businesses, 14 (or 47 percent) attained or exceeded the average sales revenue and 15 (or 50 percent) attained or exceeded the average gross profit. Some outlets have sold this amount. Individual results may vary. There is no assurance that you will sell as much as the average. See the Re-Bath 2022 Franchise Disclosure Document for details.
Brad Hillier is the CEO of Re-Bath. Re-Bath has grown into a trusted and respected brand known for providing expert, affordable and effortless bathroom remodeling solutions that transform homeowners’ bathrooms in days, not weeks. For more information about IFA franchisor member Re-Bath, please visit franchise.org/franchise-opportunities/re-bath-llc
Energized and motivated employees who are equipped with the resources they need to deliver on your brand promise will have a direct impact on the customer experience.”
THE DEFINITIVE VOICE OF INTERNATIONAL FRANCHISING, AND YOUR ESSENTIAL GROWTH PARTNER
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Founders, investors, and entrepreneurs alike turn to Global Franchise when keeping up with the latest industry news and trends. And with the recent introduction of Global Franchise Pro, the Global Franchise experience is now supercharged.
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A YEAR IN REVIEW: FOCUS BRANDS FLEXES THE POWER OF THE PORTFOLIO TO FUEL GROWTH & STRONG PERFORMANCE ACROSS ICONIC BRANDSBy Jim Holthouser, Focus Brands
From a resurgence of consumer buying confidence, hungry franchisee candidates, and an open real estate landscape, the brands with the proper infrastructure and ability to be nimble and adapt were the ones to succeed.
Across Focus Brands’ portfolio — Auntie Anne’s®, Carvel®, Cinnabon®, Jamba®, McAlister’s Deli®, Moe’s Southwest Grill® and Schlotzsky’s® — we are on track to sign more than 400 franchise agreements and open more than 200 locations in the United States and Canada in 2022. Focus Brands collectively generates approximately $3.5 billion dollars — a number that continues to rise alongside franchise expansion.
As Focus Brands continues to grow its global reach, it’s not lost sight of the importance of the quality, innovation and support that brand franchisees and guests have come to expect. In the past year, the company has invested resources and capital to prepare for the future, take significant risks and continue to shape the industry.
Transforming Into a Platform Company
Focus Brands’ primary goal is transforming its collection of assets into a team of regional and super-regional players. This year, the company has made great strides in achieving this vision, and it will continue to guide our long-term strategy.
Over the past year, it’s become clear that interconnectedness is the strategic edge for mid-cap brands to compete with mega industry leaders. With a combination of valued collaboration, cross-business insights and data-driven decision-making, midsize companies can improve their understanding of operational interdependencies, industry threats and opportunities and the needs of customers, employees and franchisees.
In order for Focus Brands to truly maximize the power of the portfolio, the majority of decisions need to be made with the broader platform in mind. Finding these portfolio-wide synergies and cost savings adds more fuel to the individual brands.
For example, earlier this year Focus Brands launched a unified front-end platform that we are working to roll out across all brands. In the common platform, consumers get better digital ordering experiences and owners experience higher conversion rates. You’ll see a unique app for each brand, but they’ll be using the exact same framework on the back end. The solution is a single, best-in-class digital platform that can be replicated across all seven chains. That means creating an online presence with fewer steps during the ordering process and the ability to add messaging and functionality to the entire system at once.
As we look back at 2022, there were certainly challenges in the form of inflation, supply chain, the great resignation, and more, but within those challenges were great opportunities.
on a standalone basis, you’re not taking advantage of economies of scale. Focus Brands’ ‘Power of the Portfolio’ strategy will guide growth and performance on a larger scale in the years ahead.
Opportunity in Dual Branding
Dual branding has become an incredibly important part of Focus Brands’ growth strategy. This past year has been focused on refining operational efficiencies for dual-brand locations, while investing heavily in consumer research to identify ways to create combinations that resonate with consumers and meet them where they want to be met.
With seven iconic brands located in over 50 countries, Focus Brands has an offering for every guest, in every market. Each brand easily thrives on its own, as standalone restaurants, bakeries and ice cream shoppes or in non-traditional venues, but detailed research showed that consumers want more ways to access their favorite brands. In fact, 58 percent of customers said convenience is their number one driver for how they choose to get their food — validating the business opportunity for locations in new venues and with added access points such as drive-thru, pick-up windows and curbside.
Finding brand synergies, we’ve identified four dual concepts that offer thoughtful brand pairings for consumers and a lucrative business opportunity for franchisees: Auntie Anne’s/Cinnabon, Auntie Anne’s/Cinnabon/Carvel, Auntie Anne’s/Jamba and Cinnabon/Carvel, which is coming to life as our newest concept, Cinnabon Swirl.
Cinnabon Swirl featuring Carvel Soft Serve was unveiled earlier this year. The concept will represent the best of both Cinnabon bakeries and Carvel Ice Cream shoppes with a fully integrated design, creating a unique space. The first Cinnabon Swirl location is set to open in early 2023.
Dual branding has become an incredibly important part of Focus Brands’ growth strategy.”
As of today, Focus Brands portfolio boasts 175+ open dual-brand locations, 10 of which opened in 2022, and an additional 65+ dual brand locations in the pipeline, with vast opportunity for continued growth.
By integrating unique brands into a single retail space, we’re able to meet consumer demand in new and innovative ways while giving franchisees the opportunity to increase average volume and bottom-line profitability.
While Focus Brands will continue to develop single brandspecific traditional and non-traditional retail locations, there is a large appetite when it comes to the vast opportunity in a multi-brand development strategy as the future of QSR.
Prioritization on Digital – Driving Efficiency with Data
Over the past year, we’ve seen more and more consumers leveraging digital ordering channels to
access our brands. As a result of this increased demand for accessibility, Focus Brands is investing heavily in technology. We are making major improvements across loyalty programs and digital channels, which is expected to drive business and increase sales for franchisees.
Our team of dedicated data scientists and consumer insight specialists are using years of historical data to build an impressive offer engine and suggestive selling capability. By leveraging existing data, Focus Brands is building the right infrastructure and tools designed to delight customers and drive returns for each brand and franchisees. We are using technology to deliver not just functional, but meaningful personalized experiences, and are using this to our advantage by building out enterprise functions with the goal of driving higher average checks and creating greater lifetime value for our customers.
scope of data science in 2023 will be expanded to support the offer engine for other brands, suggested selling in digital channels, paid media suppression, new member acquisition and demand forecasting in the supply chain. Our goal is to have our digital and loyalty sales mix comprise 50 percent of the business within the next five years.
Jim Holthouser is the CEO of Focus Brands, parent company of Auntie Anne’s®, Carvel®, Cinnabon®, Jamba®, Moe’s Southwest Grill®, McAlister’s Deli®, Schlotzsky’s® and Seattle’s Best Coffee® (in certain military bases and in certain international markets). He is leading Focus Brands into its next phase of growth for its seven food services concepts while delivering value to all company partners, driving results and profitability for franchisees and an exceptional customer experience.
Over the past five months, Focus Brands has created a full machine learning offer engine that allows it to better engage with members of the McAlister’s Deli rewards program by using the data it already has to automate offers that are unique to our loyalty members. The engine learns from each successive run and automatically improves the offers given in the next round.
Bottom line, Focus Brands is undergoing a major transformation in the digital and technology space. The
Over the past year, we’ve seen more and more consumers leveraging digital ordering channels to access our brands.”
AMERICAN FAMILY CARE SET TO BUILD ON YEAR FULL OF MILESTONESBy Paige Robinson, CFE, American Family Care
Urgent Care and Primary Care Franchise Reaches 40th Anniversary and 300-Unit Mark
Four decades into a journey to transform the healthcare industry, American Family Care soared through 2022 by opening new clinics across the country, breaking milestones and adding to its lengthy collection of accolades.
The successes of the past year, albeit through a changing healthcare industry and economic landscape, have continued to shape how our brand will be moving forward. The nation’s leading provider of urgent care and accessible primary care celebrated two major milestones in 2022, the first being its 40th anniversary over the summer. Shortly thereafter, American Family Care’s founder and CEO Dr. Bruce Irwin saw his concept open its 300th clinic.
His idea in 1982 was simple: to provide people with quality healthcare at a fraction of the cost and reduce their long wait times. Accessibility and affordability have always been the foundation of AFC’s mission. Now we’re going beyond that, helping entrepreneurs live out their dreams of owning their own business and helping millions of patients each year.
American Family Care surpassed the 300-clinic mark in November, an accomplishment that has allowed AFC and its operators to care for more than 6 million patients a year in 29 states.
It’s hard to overstate how excited the entire system has been about the accomplishments that 2022 brought. From the owners and clinical staff of each American Family Care location to the franchise support team, this year has shown just how impactful this work has been for the millions of patients who trust AFC with their healthcare.
Now, the brand enters 2023 with renewed passion for our mission.
As the industry saw more than 20 percent growth in the last year, AFC has bolstered its franchise support in preparation for its own growth in 2023. While the overall economy enters the new year in flux, AFC has committed to being proactive in its guidance for both existing and new franchisees.
Since its conception over forty years ago, our Birmingham, Alabama-based franchise continues to transform the concept of non-emergency urgent care in a clinical setting, while providing the absolute best patient care possible. That objective is driving AFC’s plans for 2023, as the healthcare industry continues its major postpandemic shift — for both patients and medical staff.
The healthcare franchise industry caught many entrepreneurs’ eyes as brands like American Family Care thrived after the onset of the pandemic. Urgent care clinics have risen in popularity thanks to their affordability and limited wait time in comparison to emergency departments and have offered a reprieve to many providers suffering from burnout in large hospital systems.
Business owners are looking for both essential and sustainable options to add to their portfolios, and many have the desire to diversify into healthcare. AFC offers a unique opportunity to be involved in healthcare at the unit level, without traditional medical experience. Though most of our franchisees are businesspeople, we’ve also witnessed medical providers exiting traditional healthcare systems to become AFC franchisees in their own communities.
As a franchisor committed to being proactive, AFC wants to ensure the operators who are fueling its recent growth feel supported in each area of their operations. From hosting webinars on capital strategies in volatile markets to adding support staff, the past year has been defined by refining this support system. That effort also extends to developing a best-in-class real estate analysis tool to simplify the leasing and construction process, reducing our time from signing to center opening.
Heading into 2023, our system is proud to have processes and resources in place to address these areas that could be headaches without the right help. Preparation and support like the aforementioned are reasons why American Family Care enters 2023 with yet another year of numerous franchising honors.
On pace to open a record 50 new centers this year, we expect to open 60 locations in 2023. While traditionally our growth has come primarily from our existing franchise body — which we feel is an amazing testament to the brand — 2022 marks the first year that new investors have outpaced our legacy owners!
We believe that we are extremely well positioned to continue dominating the accessible healthcare space in the markets where we choose to compete. The American Family Care team expects to have 500 centers from coast to coast in the next three years, delivering affordable and accessible medical care to more communities across the country.
Paige Robinson, CFE, is the vice president of franchise development with American Family Care, has worked in franchising for 15 years and has been in the healthcare space since joining AFC in 2015. For more information about IFA franchisor member American Family Care, please visit franchise. org/franchise-opportunities/american-family-care
On pace to open a record 50 new centers this year, we expect to open 60 locations in
The American Family Care team expects to have 500 centers from coast to coast in the next three years…”
2022: A YEAR OF EXCELLENCE FOR A PLACE AT HOMEBy Jerod Evanich, A Place At Home
The senior in-home care franchise A Place At Home is marking its fifth year of franchising with more than a dozen awards, several new locations, and many significant milestones. The brand that started in two best friends’ basements in Omaha, NE, now stretches across 24 territories in 14 states.
The senior care industry is rapidly growing, and A Place At Home is taking advantage of it. Our brand reported $15.6 million in revenue in 2022, an increase of 46 percent over 2021. Moreover, the forecast for 2023 is even brighter. A Place At Home is tracking to hit $20 million in revenue in 2023. In fact, 10 locations hit $1 million in sales this year.
Others in the franchise world are recognizing the outstanding work our franchisees, employees and corporate team are doing at A Place At Home. Systemwide, the franchise earned 11 awards from software company Home Care Pulse this year; they included four for Best of Home Care® Provider of Choice and six for Best of Home Care®
Employer of Choice. A Place At Home – Little Rock was also presented with the Leader of Experience Award and ranked as the fourth agency in the Top 100 for experience. These awards are based on client and caregiver satisfaction ratings. A Place At Home received more recognition from other top franchise outlets in 2022. For example, Franchise Business Review placed the senior in-home care franchise among the Most Innovative Franchises, Top Recession-Proof Franchises, Top Low-Cost Franchises, Top Franchises – Culture and as a Franchise Rock Star. In addition, our franchise was graded more than 13 percent higher than the industry average in all categories, including training and support, systems, leadership and general satisfaction.
Entrepreneur Magazine ranked A Place At Home at No. 93 on its 2022 Top New and Emerging Franchises list. Franchise Journal recognized the senior services franchise as a Top Brand for the third year in a row.
These recognitions and awards are a testament to the hard work put in by our entire system, and validation for the goals my co-founder Dustin Distefano and I still have for the years to come. We believe the number of seniors we serve, and their satisfaction rates, prove our business model is working.
Our brand reported $15.6 million in revenue in 2022, an increase of 46 percent over 2021.”
A Place At Home’s two dozen locations now provide almost 13,000 hours of care a week. That equates to about 500 clients and 650 caregivers employed nationwide. Not only is our reach increasing, but our satisfaction rates are also excelling. The system’s overall client satisfaction rate is 89.4 percent, with client/caregiver compatibility being the highest score at 90.5 percent. This statistic means A Place A Home excels at matching caregivers to their clients’ needs. Other astounding satisfaction rates include the average overall caregiver satisfaction rate of 91.7 percent. At a time when caregiver shortages are affecting the senior care industry, this score is reassuring. Caregivers who are happy with their clients are more likely to stay longer and refer other caregivers to work for the company.
Our brand emphasizes the importance of a positive and family-like culture, both in the corporate office and in local franchise-owned locations. It’s working, as we received a 92.3 percent satisfaction rate for support from the office staff.
This past year brought three new territories in Pueblo, CO, Lafayette, LA, and Littleton, CO, and an
Add Your Chapter To Our Legacy Of Success
agreement out for signature in Overland Park, KS. As our franchise heads into 2023, we’re looking to add nine new locations, with at least two being expansion territories or new markets for current owners. On the corporate level, we aim to open five new locations, bringing 2023’s total to 14 new markets and expanded territories. They are targeting Texas, Florida, Ohio and Michigan.
We’re dedicated to finding the right people to represent our brand, value and mission in senior-focused care. Not everyone can own A Place At Home; our franchise holds itself and its owners to a high standard. They want the complete package. That’s a standard we believe is responsible for our fast-growing success since we first opened 10 years ago. We’re looking forward to the next 10 years of accomplishments.
Jerod Evanich is the president and co-founder of A Place At Home. For more information about IFA franchisor member A Place At Home, please visit franchise.org/franchiseopportunities/a-place-at-home-llc
For more than 40 years, ATC Healthcare has provided leading nurses and healthcare professionals to hospitals and facilities nationwide.
Benefits to Franchisees: INTERESTED
Receive back-office support from the corporate team to handle all the payroll for your healthcare associates, invoicing, collections, and professional insurances
Reduced administrative and operating expenses
Greater financial flexibility and payroll reliability
Established national & regional relationships with healthcare providers & vendor management systems to help you find opportunities
Top 100 franchise by Franchise Direct & Forbes’ Best Temporary Staffing Firms for 2020
EXPANDING ACROSS BORDERS: COFFEE FRANCHISE PURSUES MORE U.S. MARKETS IN 2022By Nicolas Henrich, Tim Hortons USA “
Coffee QSR franchise adding more U.S. locations and new restaurant model
In 2022, Tim Hortons has seen considerable growth in the United States as it pursues an ambitious plan to open more locations in priority markets, as well as incorporate new restaurant models that make use of drive-thru services and digital restaurant technology.”
Growing a franchise at any scale requires ambition. It also often requires a willingness to branch out and go beyond what’s familiar, including familiar markets. Take the example of Canada-based coffee, breakfast and bakery franchise, Tim Hortons. In 2022, Tim Hortons has seen considerable growth in the United States as it pursues an ambitious plan to open more locations in priority markets, as well as incorporate new restaurant models that make use of drive-thru services and digital restaurant technology.
Tim Hortons began 2022 with a strong initiative to grow. The company has sought to enter new markets throughout the U.S. for years, and in 2022, it ramped up its efforts to branch out into markets in the southern and southeastern states. In February, the franchise announced plans to open 30 locations around the greater Houston area. This plan includes opening 10 locations within the next three years.
The first Houston area location opened in Katy, Texas, a town approximately 29 miles outside of Houston. Additionally, Tim Hortons and its local franchisees are looking for prospective locations within the greater Houston area, including The Woodlands, Sugar Land, the Energy Corridor, Northwest Houston, Spring, West University and Tomball.
According to the company website, Texas is a priority market for the company within the U.S. Much of the franchise’s existing U.S. locations are in the northeastern and midwestern states, and the company seeks to expand into markets where it doesn’t already have a presence. Tim Hortons is thrilled with the opening of its first Houston area location.
a new business in a new market, or even an existing one if they see an opportunity we may have overlooked.
This is a great step for Tim Hortons into the Houston market. We can’t wait to see where the next opportunity to open a location occurs. We are on the lookout for entrepreneurs who want to join us and share in our ongoing and growing success.
In spring 2022, plans were announced by Tim Hortons to open 15 franchised locations in Atlanta and Columbus, Georgia. It’s also made efforts to reach out to prospective leads by participating in MFV Expositions’ Franchise Expo events held in the U.S. For the brand to grow, we need people who share our ambition.
We want to grow, and growing takes more family members joining our brand. Events over the last few years, like the COVID-19 pandemic, economic inflation and labor shortages, have put a lot of companies and franchises to the test. We’re proud to say we’ve come through everything that’s been thrown at us, and we want to bring people on board who will rise to the challenge of starting
Franchise growth doesn’t only mean bigger operations. Sometimes it also means trying new business practices, which is exactly what Tim Hortons has been doing. In 2022, the company announced it’s offering franchisees two new restaurant drive-thru models. The first model is a 1,600-square-foot restaurant with a seated dining area and drive-thru service, while the other model is a 900-square-foot restaurant that’s drive-thru only.
These models incorporate a revised menu, which offers the franchise’s signature items, as well as ones geared to appeal to American customers. The models also provide for a seamless digital experience, such as pre-ordering via mobile app, an updated loyalty and rewards program and VIP parking for mobile order customers.
As a QSR franchise, Tim Hortons knows it’s important to keep up with customer expectations. Many customers these days prefer ordering online or on their smartphones. We want to make sure that we can provide what our customers want, so they know we value their patronage and want them to keep coming back.
Nicolas Henrich is the vice president of Tim Hortons USA development, franchising and finance. For more information about IFA franchisor member Tim Hortons, please visit franchise.org/franchise-opportunities/tim-hortons-usa-inc
“ We want to grow, and growing takes more family members joining our brand.”
As a QSR franchise, Tim Hortons knows it’s important to keep up with customer expectations.”
FOR SPORT CLIPS HAIRCUTS FRANCHISEE JEFF BURROUGHS, 2022 HAS BEEN A YEAR OF PIVOTINGBy Jeff Burroughs, Sport Clips franchisee
The term “recession” may be a headline maker, but I’m someone who made the decision to invest in franchising during the 2008 economic downturn, and I’m glad I did.
Ileft the auto industry to focus full-time on my franchise interests back in 2014, and, with the confidence of coming from the car business, I knew well that you can recover from anything. But it takes believing in yourself to do so.
“ We’ve learned that a healthy franchisor like Sport Clips will be with you through the cycles of ups and downs.”
My immediate interest in ’08 was to help fund our son’s college tuition, and I found the systems in franchising and the availability of team coaching to be a good fit for our family. My wife, Robyn, who recently retired after 30
years in the construction field as a cable splicer, works with me in our Sport Clips Haircuts businesses. Together we say anyone considering a franchise investment in today’s economic climate should realize there will be bumps, but following the path laid out by the franchisor will prove itself.
Making sure to have someone at the helm who cares. We care about our team members, so we have listened and taken action. As a result, stylists and barbers who left for “closed-in spaces” after the pandemic are returning. We’ve also worked to cultivate relationships with stylists-in-training by taking cookies or other treats to local cosmetology schools and finding other ways to generate potential team member interest outside the four walls. We’ve implemented new-hire benefits and have adjusted store hours to meet staff needs. One example of a pivot is how closing Sundays was believed to be a benefit to stylists, but it went backwards on us. It turns out, Sundays are one of the most productive days in our stores and many of our team members have found they enjoy working that day. So, it was decided to return back to being a seven-day week at our locations as equal benefit for our team and the business.
We’ve learned that a healthy franchisor like Sport Clips will be with you through the cycles of ups and downs. We’ve had to pivot to stay ahead of the curve over the past couple of years, and we’ve figured it out together. You’ve got to believe in yourself and understand, “you get what you give.” We have 27 stores in Delaware and Maryland, and it helps to have leaders at the helm who care. Sport Clips, as a franchisor, does, and we, as franchisees, do. This past year especially, we’ve had to pivot to keep up with the need for stylists and barbers to work in our stores. We’re like many other employers who pay attention to the sparse number of applicants for jobs, especially jobs like ours that require training and a license, so we decided to focus on fixing that. Here’s how we navigated 2022: Knowing there would be bumps in the road, we followed the path laid out by the franchisor, and it has proven itself. It’s important to put in the effort to follow the system to learn it, then follow what’s been tried, tested, and proven to work. Understanding that your franchisor has your best interest in mind. We watched what Sport Clips did when every store in the system had to close in 2020 in accordance with state and local mandates. As a franchisor, it furloughed many on the support team to get it down to a core group to navigate the forced closures. This allowed the franchisor to work hand-in-hand with several seasoned franchisees as collective group to have a strong road map as we came out of the shutdown periods. When we were able to re-open, there was pent up demand, so we’ve had to pivot to stay ahead of the curve. We’ve met the challenges by working closely with our teams to “figure it out” when it comes to staffing and client demand.
The outcome of all this pivoting has been positive for us. We did a lot of riding around over the past year to see how other businesses were meeting challenges and we knew we weren’t the only ones navigating tough times. So, we made the decision to put more skin in the game and help others by buying two underperforming stores, turning them around, and making them available for purchase to new franchisees coming into the system. It was a great feeling to help maintain employment for the team members with these stores and then being able to give an opportunity to new franchisees during these changing times. No doubt, there will be more challenges in the days ahead, primarily because Sport Clips locations need licensed professionals as team members, so moving forward into 2023 we are building a mindset with our team of stores to “Recruit – Hire – Train – Execute.” And, with the support of our franchisor, we are ready…pivots and all.
Jeff Burroughs is a multi-unit franchisee of Sport Clips. For more information about IFA franchisor member Sport Clips, visit franchise.org/franchise-opportunities/sport-clips-inc
We’re like many other employers who pay attention to the sparse number of applicants for jobs, especially jobs like ours that require training and a license, so we decided to focus on fixing that.”
We did a lot of riding around over the past year to see how other businesses were meeting challenges and we knew we weren’t the only ones navigating tough times.”
PROTECTING THE FRANCHISE BUSINESS MODEL AGAINST ALL ODDSBy Katherine Patterson, IFA
of legislation, posing one of the most significant threats to franchising — the Protecting the Right to Organize (PRO Act) — saw its final demise in 2022, but that didn’t mean that there weren’t more attempts to bring harm to franchising.
When Professor David Weil was nominated to serve as Administrator of the Wage and Hour Division (WHD), a position he held in the Obama Administration, IFA immediately stepped into action to prevent his confirmation. Weil, the author of the anti-franchising book, The Fissured Workplace, embodied harmful policies such as an expansive joint employer standard that are a direct threat to the business model.
With our members as the chief advocates, IFA works for you to provide the platform, resources, and connections to reach the necessary lawmakers and influential figures to move the needle on policy priorities. With the odds stacked against the business community this year, IFA has worked to stop the threats on the horizon — achieving a historic year for advocacy wins in favor of franchising.
Recognizing the headwinds with one-party control of Washington, IFA was prepared, armed with new research, powerful member stories and the strategic vision to stop whatever may arise in its track. From defeating critical nominations, to leading the charge on the FTC Franchise Rule, to stopping policy threats in California and New Jersey, the IFA team has been here to ensure your business is protected on all levels. One of the greatest anti-business pieces
When Weil was renominated in January of 2022, IFA brought together powerful coalitions of business leaders and activated the membership to reach out to their lawmakers so they understood how damaging his confirmation would be. Thanks to IFA’s advocacy, when Weil came up for a vote on the Senate floor in March, his nomination was defeated on a bipartisan basis. Politico noted, “The nearly yearlong opposition campaign from the business community was spearheaded by the International Franchise Association, which blasted Weil as the ‘intellectual godfather’ of so-called joint employer rules that seek to hold corporations accountable for franchisees’ labor practices.” Ultimately, he was replaced by Jessica Looman, the acting administrator with whom IFA has built inroads of understanding related to the business model and its unique needs as the agency considers new regulation. Looman even spoke at the Franchise Action Network (FAN) Annual Meeting this year, getting to know more of
With more policy threats popping up on the state and federal level, IFA has fought on all fronts to protect the franchise business model.
our members and hearing what franchising is all about.
As the Federal Trade Commission (FTC) Franchise Rule is under its decennial review, IFA has worked to ensure the rule is preserved in its current form. Prioritizing the issue at the FAN Annual Meeting, IFA members held over 200 meetings with Members of Congress, resulting in a bipartisan letter from over 67 House Members to the FTC and another bipartisan letter from the Senate, who acknowledged they will take the concerns of the franchise community when reviewing the rule.
On the regulatory front, IFA continues to push back against the harmful joint employer standard, proposed by the National Labor Relations Board this year. One way to address this is through the IFA-supported Trademark Licensing Protection Act, which was introduced this fall and comments on the proposal which IFA fought to have extended so more of our members could voice their concerns. Also on the federal level, IFA successfully removed harmful franchisee-franchisor joint liability language in the data privacy bill put forward this Congress.
On the state level, IFA focused throughout the year on the existential threat posed by the FAST Recovery Act (AB 257) in California. Impacting quick-service restaurants (QSR), the bill would have created an unelected council of political appointees to set labor standards for the industry as well as create a joint employer standard that would erode franchising in the state. IFA spearheaded a coalition of major QSR brands, led a national campaign and robust earned media effort, as well as direct lobbying with the lawmakers
whose votes could be swayed. Ultimately the bill was amended to strike the joint employer provision, lessen the number of impacted restaurants and give businesses more of a voice on the council, but the concerns remained. After the bill was signed into law, IFA immediately led the coalition to petition and gather signatures to take the measure to voters in 2024. With one million signatures from California voters, the FAST Act has been stopped until voters have a say.
While all eyes were on the FAST Act, IFA was successful in advocating for a veto of California Senate Bill 1247, which would have changed the terms of franchise agreements regarding the products or services brands can offer their franchisees. Also on the state level, IFA defended against anti-franchising legislation in Oregon and New Jersey (AB 1958) and will continue a stringent state-level focus into 2023 to prevent similar copy-cat bills from spreading.
Alongside all of the policy efforts this year, IFA launched new research to support our legislative goals and help lawmakers understand the impact their legislation has and where the needs are. Launching new surveys on the impact of inflation and the labor shortage for franchised businesses, these studies show that franchises are feeling the economic pressures but have distinct advantages with a national brand and network of support to help navigate all the uncertainty of the past few years.
Amidst the active legislative year, IFA was keeping a close eye on the midterm elections, endorsing a number of candidates with pro-business and pro-franchising records. IFA launched the 2022 Civic Action Center, a one-stop shop for voters to access all of the information needed to learn about candidates, locate polling places and cast their ballots. With the midterm elections in the rearview mirror and a divided Congress ahead, IFA can proudly say the PRO Act has been rejected, but we still need Congress to stop regulatory overreach of the Administration. We will also be working to ensure bills such as the FAST Act don’t spread further given an additional four states are under one-party control, and several cities have expressed interest in this misguided policy.
Looking ahead to 2023, it is our hope that our elected leaders will come together and work in a bipartisan way, rather than push extremist policies that will harm the franchise business model. No matter the challenge, thanks to your support as members, IFA will be at the forefront to ensure the franchise business model is protected, enhanced and promoted along the way.
AUTOMOTIVE SERVICESBy Ritwik Donde, FRANdata
The outbreak of COVID-19 in 2020 sent the economy into a tailspin. Non-essential businesses were forced to close to comply with stay-at-home orders, corporate employees had to telework, and children attended school from desks in their bedrooms. The pandemic permanently closed more than 200,000 businesses across the United States.1 Despite the unique business challenges last year, several industries flourished during the pandemic, including automotive service franchises as they were dubbed as “essential businesses.”
The automotive aftermarket services industry gained significant momentum, recovering from the setbacks from the 2008-2009 global recession. Following the industry’s weakening due to increase in fuel and new car prices linked to the 2003 energy crisis and the global recession, new brands began to capitalize on the growth in car production starting in 2016. FRANdata’s analysis of its
New Concept Reports for the period 2016-2020 reveals that 30 new brands adopted the franchise business model in the automotive aftermarket services industry, the most since the 2001 technology crash. The period since 2016 saw the entry of more franchises offering eco-friendly services ranging from waterless carwashes, maintenance of electric cars to ultrasonic cleaning of emissions filters. Global auto parts conglomerates like Bosch entered the U.S. franchise space, as did international franchises like Take 5. The period since 2016 also saw brands convert from the licensing model to franchising.
Automotive Aftermarket Proved Resilient During the Pandemic
At the outset of the pandemic, automotive franchises were dubbed essential businesses. They weathered the hardships of 2020 with few disruptions and are poised to continue to flourish in the future. While the United States report more than 160,000 business closures during the pandemic period, small businesses in industries like automotive services have been able to withstand the effects of the pandemic better than other industries.
The automotive aftermarket services industry includes multiple sub-sectors such as general auto repair, oil and lube tune ups, car rentals/leasing, tire repairs, and auto appearance repairs.
Despite the pandemic, the U.S. automotive service market was valued at $64.41 billion in 2021, and it is expected to reach $76.91 billion by 2027, registering a CAGR of around 3 percent during the forecast period (20222027).2 As compared to other countries worldwide, the United States witnessed a lockdown for only a few weeks. The COVID-19 pandemic had just a slight impact on the growth of the automotive service market for the year 2020 compared to other industries. Factors such as the increasing use of artificial intelligence in vehicle inspections/servicing, the rise in age of vehicles due to technology advances, the increase in average
Evolution of Franchises in Automotive Aftermarket Industry
Source: FRANdata Research
Source: FRANdata Research
miles driven per car, and the surge in road safety awareness, are projected to fuel the growth of the automotive aftermarket services industry in future.
Automotive Services Franchise Performance to Continue Momentum
The Automotive Service Industry’s strength is reflected in the windfall of franchised units experienced by the industry. Over the 2019-2021 period, the average number of franchised units grew at a CAGR of 13 percent, with franchisees opening an average of eight new locations in 2020 and 13 in 2021. During the past three years from 2019-2021, the automotive industry’s average business continuity rate has been consistently above 95 percent, considered a strong rate in franchising. Even during the pandemic, this rate continued to hold steady at above 95 percent, strengthened by the “essential business” classification.
Trends to Watch
Growth Trends by Franchise Brands (US)
Driving this consistent expansion are rises in several key segments. Tune ups and oil segment, which accounts for 13 percent of all active franchise brands in the industry, has been growing at a CAGR of 8 percent since 2019, while general repairs concepts have been growing at 11 percent CAGR in the same period. During the depths of the first peak of COVID-19 in spring 2020, sales of new vehicles collapsed as auto plants shuttered and many dealers
Source: FRANdata Research
were forced to close showrooms. This led to an increase in used car sales as people avoided mass transportation and became more sensitive to auto cost in the recession. Such trends benefitted segments like oil and lube franchises and general repair businesses. While aggregate inventory levels have generally recovered, automotive inventories remain under pressure, strengthening the position of automotive aftermarket franchises in the near-term.
Digitization & Technology Adoption
Digitalization of automotive repair and component sales complemented by advanced technology incorporations in the automobile aftermarket component manufacturing is expected to boost the market growth. The surging reception of semi-autonomous, electric vehicles, and hybrid and autonomous cars, in the years to come, is further expected to bolster the demand for new.3
“Platforming” and Rise in Consolidations Brands
Source: FRANdata Research
The steady growth through the pandemic and prior years has attracted significant private equity interest in automotive service brands. The investor community has taken great advantage of these tempered valuations, entering a period of consolidation. And private equity firms are now also taking a page out of the residential services industry playbook, creating “Franchise Platforms” in the automotive space. In 2021 alone, private equity groups and private equity-backed strategic buyers made 242 new automotive aftermarket acquisitions, representing 46 percent of the total transactions in 2021 (with 15 percent representing financial sponsor platform investments).4 Franchising also witnessed such platform acquisitions. For example, MidOcean Partners acquired Grease Monkey and its affiliated brands to form Fullspeed Automotive in 2020, while most recently Princeton Equity Group announced its acquisition of Trademark Car Wash and Strickland Brothers 10 Minute Oil Change to form Accelerated Brands.
Platform Holdings in Automotive Franchises
Franchises Adopt “MultiCare” Programs
To drive growth, legacy franchise brands are expanding the continuum of services offered to customers, taking advantage of same brand equity through more of a complete automotive maintenance process for the consumers. Case in point, in 2018, Jiffy Lube introduced its Multicare branding to evolve into offering more services. The same approach was taken by other large franchise operators like Meineke, Midas, AAMCO and ATL.
Co-Branding Boosts Service Opportunities
A popular growth approach in the industry involves co-branding. This has allowed franchises in the automotive aftermarkets industry an excellent way
for brands to attract new audiences by partnering with brands in other industries that cater to an overlapping demographic. When Carousel Capital reacquired Express Oil Change in 2013, it also acquired Tire Engineers. When both brands were acquired by Golden Gate Capital in 2018, they merged with Mavis Discount Tire enabling the company to have a full offering of tire services thereby lowering the cost of new customer acquisitions.
More Used Cars, More Maintenance
Demand for oil changes and other auto maintenance services is determined by the total number and relative age of the vehicles on the road. As with all other things, the COVID-19 pandemic resulted in people putting off purchasing or leasing a newer vehicle, which increases the vehicle miles traveled. Additionally, the inventory of used cars is still recovering from tighter-than-usual conditions and prices are 9 percent higher than a year ago.5
This has led to a higher-than-average vehicle age, leading to more demand for maintenance and repair services. S&P Global Mobility says the average U.S. vehicle age rose to 12.2 years in 2022 — a nearly 2 percent increase from 2021.
Ritwik Donde is the research director at FRANdata. A walking franchising “think tank”, Ritwik’s long history of franchise analysis makes him an invaluable source of industry insight and franchise model mechanics. As the director of research, he leads a team of analysts who work with some of the topmost franchises in the country. He is also a regular contributor to the franchise industry’s thought leadership, having been published and cited across multiple industry journals and magazines. For over 30 years, FRANdata has been the industry leader in strategic research, forecasting, and measuring franchise performance and operations.
STATE OF THE AUTOMOTIVE INDUSTRYBy Ron Stilwell, FullSpeed Automotive
Vehicles are becoming more resilient than ever, and as a result, the average age of cars is steadily increasing.
Since 2002, the average age of cars has increased from 9.78 years to 12.1 years, according to GlobalTranz. More impressively, just over 10 percent of that growth occurred in the past five years.
Longer-lasting cars present a great opportunity for the automotive aftermarket industry. We except to see same-store-sales continue to rise alongside aggressive franchise growth, as prospective entrepreneurs see the immense value in pursuing business opportunities in this industry.
In 2022, FullSpeed Automotive® brands have grown from 703 units to over 900 company, franchised, and licensed units, growing unit count by 31 percent. This is credited to a strong franchise development strategy, strategic mergers and acquisitions, and by implementing proven systems that will continue to lead to exponential growth as FullSpeed Automotive aims to achieve its growth goal of 1,000 units by the end of 2023.
You can see growth is accelerating in the industry, and there is immense opportunity to be had. We’ve invested resources and capital to prepare for the future and are committed to upholding our position as a leader in franchisee support and unmatched customer service.
New Store Models
The appearance of facilities in the auto aftermarket repair industry has been largely untouched for years. Industry leaders will see the vast potential in revolutionizing store models and enhancing the customer experience.
We have certainly taken note and recently unveiled our highly anticipated new store models. We’ve done so with the aim of modernizing the industry with design and technology enhancements, while improving efficiency for franchisees who are driving nationwide expansion.
The key features of these new prototypes include new express lanes with a 15-minute stay-in-the-car model, clear and directional signage
on the parking lot to bring ease to the consumer, all new comfortable lounge areas and patio seating with refreshments and entertainment for units that already provide additional services, and state-of-the-art technology and artificial intelligence that will educate, inform, and streamline the customer experience.
We expect to see more prototypes roll out in the years ahead as brands aim to innovate. For us, this innovation will communicate excellence, sophistication, and quality workmanship to all.
Refined & Improved Customer-Driven Value Proposition
Today, a company’s value proposition must be continually tuned and re-tuned to match solutions being sought by information-rich consumers.
We anticipate many brands to be reexamining their company’s value proposition and making shifts in the form of their business model, operational changes, digital enhancements, new product/service offerings, etc.
The goal of course, is to look at what you highlighted as your company’s strengths, and see if there is a way to capitalize and expand on them.
In an ever-changing world, brands cannot be stagnant. We expect to see vast innovation in the years ahead as businesses continue to adapt and modernize to meet the wants and needs of the customer.
Ron Stilwell is the president of franchising for FullSpeed Automotive, home to flagship brands Grease Monkey ®, SpeeDee Oil Change & Auto Service®, and Kwik Kar.
EXPLORING AUTO REPAIR INDUSTRY TRENDS IN 2023By Pete Baldine, Moran Family of Brands
Economic conditions and technological developments are shaking up the automobile industry.
As the new year approaches, car repair franchises need to keep abreast of current trends and stay nimble to generate profits.
Demand for Auto Repair Services Grows
As companies like Meta, Credit Suisse, Amazon and Redfin announce layoffs, many Americans are cutting back on spending even as the holiday season approaches. Inflation, high food costs and corporate downsizing are putting the high price of a new car out of reach for many Americans who are struggling to make ends meet. Supply chain issues and manufacturing delays are also contributing to the number of aging vehicles on the road. The average age of vehicles on the road hit an all-time high this year of 12.2 years. Inevitably, aging vehicles will need repairs to stay in prime condition, fueling a surge in demand for car repair.
Electric Vehicles Hit Mainstream
People who still have the budget to purchase a new car are shopping for electric vehicles, which opens a promising new market for auto repair shops. Electric vehicles still require maintenance
and repairs. Auto repair shops can offer a broad menu of services to cater to electric vehicle owners. They should also keep up to date on the latest industry developments to stay competitive.
Skyrocketing gas prices and a focus on the environment are prompting many people to consider turning to electric vehicles to cut costs and reduce their carbon footprint. Electric vehicle registrations grew more than 250 percent over the last five years, according to Experian PLC, a global information provider.
In response to the consumer attitude shift, car manufacturers launched a wide array of options designed to appeal to American car buyers this year. Ford debuted its Ford-150 Lightning, an all-electric truck with a 300-mile range. Toyota and Subaru added compact, electric SUVs to their lineup, and BMW touted a crossover SUV to appeal to families. SUVs made up 59 percent of electric vehicle sales in the second quarter this year, reports Experian.
Hiring Challenges Continue
Rising digitization, automation and connectivity in new vehicles will require auto repair shops to upgrade their technology to attract customers and compete with dealerships. Autonomous safety systems, digital keys, remote control parking and voice activation are becoming par for the course in new vehicles. In addition to having the tools and talent to make high-tech repairs, auto repair shops need to concentrate on marketing upgrades to improve consumer confidence as the new year dawns.
To capitalize on current trends, Moran Family of Brands, a franchisor of six brands in the aftermarket automobile and window tinting industries, supports its franchises by staying up to date on developments in the industry impacting their business. Our technology department is on top of service reports, legislation and current events impacting the industry. We help our franchisees solve hiring challenges by recruiting veterans and partnering with trade schools to make hiring more efficient.
The industry’s evolving landscape ensures automobile repair franchises continue to be reliable investment opportunities and establish generational legacies for savvy entrepreneurs.
Pete Baldine is the president of Moran Family of Brands. For more information about IFA franchisor member Moran Family of Brands, please visit franchise.org/franchiseopportunities/moran-family-of-brands
WHAT WILL 2023 HOLD FOR THE AUTOMOTIVE INDUSTRY?By Thomas A. Wolfe, Ziebart International Corporation
From inflation to the continued impacts of the chip shortage and the dawn of electric vehicles, it’s been a dynamic year for automotive franchise brands.
remained the second and third most important reasons. Low prices fell from 10 percent (in 2020) to 5.6 percent (in 2021) suggesting that consumers became less price-sensitive and more qualityfocused throughout the pandemic.”
Electric Vehicles on the Rise
As franchisors in the sector look ahead to 2023, many are asking what will change, what will stay the same, and most importantly, what to consider when planning forward.
Supply Chain & Chip Shortage Impact
Supply chain shortages have affected nearly every sector in franchising – the automotive industry not excluded. However, for automotive aftermarket brands in particular, the impact was mainly positive as the national chip shortage resulted in drastically reduced inventory of new cars. Unable to obtain a new vehicle, the scenario prompted consumers to focus more on maintaining their existing vehicles.
From regular maintenance to repairs and detailing, consumers are willing to invest to make their vehicles last. In fact, the 2023 Auto Care Association’s Factbook outlining the top trends affecting auto care businesses projects the automotive body, paint and interior
repair and maintenance sector to have a Compound Annual Growth Rate of 7 percent between 2020-2025. Overall, the Auto Care Association projects that the automotive aftermarket will grow to $477 billion by 2024.
A Surprising Inflation Effect
In addition to supply chain issues, inflation is expected to continue in 2023. For most industries, this means consumers are watching their spending. For aftermarket automotive businesses, it’s the opposite. Because lengthening the life of a current vehicle is cheaper than buying a new one, consumers are willing to pay more for quality maintenance, protection and detailing services.
As explained in the Auto Care Association’s report, in the paint, body and equipment category, “Good prior experience became even more important in 2021 for outlet selection… while convenient location and friend and family member’s recommendations
With a shift toward green consumerism, more electric vehicles are being manufactured than ever. This year, there are 62 Electric Vehicle Models in North America alone. By 2028, that number will nearly triple and by 2045, electric vehicle sales are expected to account for 100 percent of new car sales in the United States.
While reducing carbon emissions, these cars are made out of the same steel and aluminum as traditional vehicles and will still require regular maintenance and detailing to avoid rusting, peeling, mechanical failures and overall fatigue. For all of Ziebart’s history, we have created unique rustproofing specifications for each year, make and model of vehicle sold in the U.S., and some in other countries – including EVs and hybrids. Each vehicle year, make and models will be different and automotive brands will do what they always have – evolve.
So, what should automotive franchises do to prepare for the continuing and new trends impacting our industry? The answer is simple: always focus on customer satisfaction and continue to innovate.
Thomas A. Wolfe is the president & CEO of Ziebart International Corporation. For more information on IFA franchisor member Ziebart, please visit franchise.org/franchiseopportunities/ziebart
CRITICAL AUTOMOTIVERELATED TASKS WILL REQUIRE MORE INNOVATION THAN EVER BEFORE IN A MARKET EXPERIENCING HIGH DEMANDBy Tom Kasbohm, CFE, Snap-on
As a global manufacturer and franchisor that makes and sells productivity solutions to automotive and other critical industries, we view our role as that of making work easier for professionals performing essential tasks. The U.S. car parc (the collective number of registered vehicles) is estimated at over 280 million automobiles and light trucks in the U.S. Interestingly, the average age of these vehicles has now reached a new high of 12.2 years, according to S&P Global, which means there is an ever expanding breadth of vehicle types with different needs.
There are over 250,000 automotive repair shops in the U.S. servicing the vehicle population. As a franchisor that calls on this sector, we pay attention to these numbers while looking ahead to what’s next. We’re seeing continued innovation and increasing complexity in vehicles from ADAS (Advanced Driver Assistance Systems) to alternative drive train technologies like hybrids and electric vehicles (EV). The U.S. EV market has grown from about 400,000 electric cars on the road in 2015 to 2.1 million in 2021
As 2022 nears a close, we’re seeing the demand side of the automotive repair industry experiencing positive tailwinds.
based on IEA’s Global EV Outlook. Snap-on works hand-in-hand with Original Equipment Manufacturers (OEMs) and independent garages to meet the demands of an ever-expanding variety and increasing complexity of vehicle maintenance and repairs.
The Snap-on Tools franchisee channel is our front-line representation of the brand, delivering on Snap-on’s 100+ year legacy of developing, manufacturing, and distributing innovative solutions directly to the customers, who we refer to as the “Makers & Fixers” – crucial and essential workers who have kept us going throughout the pandemic.
The U.S. Bureau of Labor Statistics tells us there are over one million automotive, diesel and heavy-duty service technicians alone, doing critical
work in dealerships, vehicle repair and maintenance shops. These professionals have the skills and knowledge that keep the world moving forward. Our franchise model was developed to deliver tools and products vital to our customers’ work right where they perform their essential tasks. Snap-on franchisees are the local face of the company. Professional technicians and tool users count on their Snap-on Tools franchisees for regular weekly visits to keep informed on the latest innovative products and productivity solutions. The sheer size and aging of the vehicle fleet along
Tom Kasbohm is the director of franchise systems for Snap-on. For more information about IFA franchisor member Snap-on, please visit franchise.org/franchiseopportunities/snap-on-tools-company-llc
ever-evolving technologies continue to provide high demand and opportunities for maintenance work now and in the future.
AVOID THE WORST THROUGH COLLABORATIONBy Stephanie Russ, Children’s Lighthouse Franchise Company
The same holds true for franchisees and franchisors. I have never met one franchisee whose goal it was to fail, and I have never worked with a franchisor that did not truly believe that it had/has a formula for success that it wants to share. I have also never worked for a franchisor or other attorneys who thought that issuing notices of default or termination should be their first position. However, as we have all experienced, things do not always go as everyone plans.
Whether or not things go as planned, developing processes and brand standards is critical to the success of the
system, as is consistently enforcing those processes and standards. Franchisors are at their best when all departments (legal, operations, marketing, training, HR, etc.) work together when developing processes or making decisions about certain legal requirements. This collaboration helps everyone understand the “why” behind the others’ requirements and requests – the role such processes and standards play in the success of the system. Having this information not only gives those who implement processes and enforce brand standards credibility when working with franchisees, but also helps the legal team understand the
issues the business teams may be facing when attempting to enforce certain requirements. With this knowledge, the franchisor’s legal team can review existing provisions in the franchise agreement and determine if language in future agreements should be changed, added, or deleted, with the goal being to protect the brand and the system, which is in the best interests of all stakeholders. Attorneys can also use the information it gains through collaboration when providing business teams a risk/reward analysis relating to system changes the franchisor wants to implement.
For example, I have never read a franchise agreement that did not contain a provision that requires franchisees to submit financial reports/statements to the franchisor on a regular basis. I have also never worked with a franchisor that did not struggle to get franchisees to comply with this provision, and in some cases, simply give up trying. However, this requirement is a good
For years, HR training has taught us that people typically don’t wake up and say, “I think I will be at my worst today.”
example of how planning for the best may help the system avoid the worst. It also demonstrates the importance of the collaboration a legal team should have with other departments.
Let’s elaborate on the example mentioned above, as well as the link between enforcing a process or standard to avoid the worst and the benefits of the franchisor’s attorneys collaborating with the other business teams.
What is the standard/process? It is the provision in the franchise agreement that states that franchisees must provide the franchisor a complete set of financial statements within 30 days after the franchisees’ fiscal year end.
What is the “why” behind the requirement? Is it really important to the success of the system, or is it just something the attorneys said needed to be in the franchise agreement? Is it a data collection burden that the franchisor decides not to undertake? If the franchisor never collects the information or never looks at it, should the requirement be removed from the franchise agreement? Or does the “why” behind the requirement offer more to the system and deserve a closer look and better understanding by all stakeholders?
First, having the language does provide the franchisor legal leverage, if needed; so in some regard, it is just something the attorneys said needed to be in the franchise agreement. Unfortunately, sometimes the business teams need to reference this leverage in order to achieve certain goals. Franchisees often balk at giving franchisors their financial information for many reasons. Some franchisees do not prepare financial statements, or
least not in a timely manner. Others do not want the franchisor or their own employees knowing the true financial strength or weakness of the business.
Why does the franchisor need this information? Having this information should help guide the franchisor when it is making systemwide decisions and changes, and can help everyone plan for, or in some cases, avoid the worst possible outcome.
There are many historical examples of franchisors requiring franchisees to undertake major branding and image overhauls, which resulted in bankrupt franchisees, or in some cases an otherwise extremely financially weakened system. In these instances, the franchisors most likely had the long-term good of the system in mind — things do change and the way an outlet looks has to stay current with the times. However, had those same franchisors known the true financial health of the system, they may have chosen a more measured approach when implementing the changes; an approach that may have prevented a financial system meltdown. If the business teams and legal team had worked together to ensure the consistent enforcement of the financial requirements provision, and discussed the risks and rewards of moving forward with the reimaging program, a financially devastating outcome might have been avoided.
Additionally, not all franchises have the ability to drive top line revenue through national advertising or new product news. For these types
of businesses, it benefits the franchisee, and ultimately the franchisor, to share its financial information with the franchisor so that the operations and marketing teams can provide the franchisee the targeted, hands-on support needed to increase revenue and/or “manage the middles” of the P&L. In this scenario, having the requirement and enforcing it can help the franchisee turn around a financially distressed business. If this help and support is the franchisor’s goal, and if the franchisee is not providing the needed information, is it in everyone’s best interests to issue the franchisee a notice of default and threaten termination of the franchise agreement? Or, is the system better off if the franchisor’s legal department and business departments collaborate to find a solution that avoids damaged relationships, legal wrangling and attorneys’ fees?
The financial requirements provision discussed above is only one example of a legal provision being used to strengthen the system. Every franchise agreement has hundreds of provisions, but when the legal teams and the business teams collaborate, the chances for experiencing the worst-case scenario for all involved dramatically decreases.
Stephanie Russ is the vice president and general counsel for Children’s Lighthouse Franchise Company. For more information about IFA franchisor member Children’s Lighthouse, please visit franchise.org/franchiseopportunities/childrens-lighthouse
TOP LEGAL AREAS TO FOCUS ON WHEN CONSIDERING INTERNATIONAL FRANCHISE EXPANSIONSBy Adam Povlitz, Anago Cleaning Systems
In the United States, before you can legally offer or sell a franchise, you must comply with federal and state-specific franchise laws that require the pre-sale disclosure of a legal prospectus to prospective buyers.
This pre-sale disclosure is known as a Franchise Disclosure Document or FDD. It must be developed, prepared and issued per the Federal Franchise Rule and state-specific laws where you’ll offer and sell franchises.
In certain states known as the “Franchise Registration States,” your FDD must be submitted, reviewed and registered with a state administrator. You’re nearly ready to franchise at this point, but if you’re interested in selling franchises internationally, these steps are just the beginning. As expected, an entirely
new layer of processes must be followed. Some are required by the country you’re selling from and the country of the franchisee, and others are pure due diligence.
If you plan to franchise internationally, the first phone call to make is to an attorney who can help you navigate the legal landscape ahead. One crucial piece of advice for hiring a lawyer is to conduct your due diligence and choose the right attorney. Vet them properly and ask around. Don’t skip or gloss over this step. It could make all the difference in your international franchise expansion plans. If you’re interested in expanding internationally, expect to pay approximately the same, if not more, than what you paid to launch your franchise in the U.S.
require that all business documents (including marketing, operating manuals and customer-facing materials) be translated into that country’s native language. This is a critical step. You must not just consider the country’s native language but be aware of any language variances between provinces or regions. In franchising, you live and die by the contract and want to ensure accountabilities for all possible linguistic differences. Expanding into foreign countries involves many layers — some apparent, some not — so don’t rush the process and create contingencies for all possible scenarios.
Is Your Brand Infrastructure Strong?
When brands franchise internationally, they do so mainly because the brand is well known, and it makes sense to grow into new, foreign territories. There are instances when a franchisor may have a lesser-known business, but the company’s service or product is strong enough to fill a high demand in another country. In either scenario, substantial marketing efforts are necessary to educate and grow the brand within that country. Franchise systems considering international expansion must have built-in franchise support systems, including marketing, which may need a tweak or a complete rewrite.
Know the Legal Requirements
The United States has some of the most stringent franchise laws in the world, and this comes with its share of challenges and benefits. With such strict laws governing U.S. franchise systems, many countries have franchise relationship laws that must be complied with before offering or selling franchises in that country. These laws are frequently based on U.S. laws but are not exact replicas. Variances may require a modified franchise disclosure document (FDD) or no disclosure document. Additionally, many franchise agreement
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One crucial piece of advice for hiring a lawyer is to conduct your due diligence and choose the right attorney.”
Trademark Laws and Protecting Your Brand
A U.S. trademark registration does not mean it’s protected in other countries. A trademark is not a blanket ownership of a phrase or logo. This is where an attorney may benefit you most (this and understanding tax laws). Again, international agreements and franchise relationship laws may help simplify this process by filing a single application to register a mark in multiple jurisdictions. Licensing is another business agreement you’ll encounter, and you must operate the franchise business internationally.
It’s important to note that license agreements are more limited than franchise agreements and involve the shared license of trademarks and business systems between companies that operate independently. Franchise agreements are broader in their protection and function. Lastly, retain an intellectual property attorney familiar with the country’s laws before expanding a franchise internationally. There may be cases where you cannot franchise a brand in a foreign country. An important note is to ensure that your trademark is culturally appropriate before expanding. Depending on the culture, many symbols, words, and images may have multiple meanings and be viewed as derogatory, disrespectful, or offensive.
There are several advantages and disadvantages to international franchising (and the laws that govern it). One advantage is moving into a more favorable regulatory environment with the potential to pay lower taxes and increase the company’s bottom line. On a positive note, considering global expansion most likely indicates that the business is strong and the brand is recognized for quality (or popularity). The pathway to new markets and territories is wide open. As mentioned, if franchising in the U.S., you are already accustomed to strict laws and regulations.
The disadvantages are the areas that need the most attention legally. Each country has cultural differences, and strict laws and government oversight protect many. These aren’t just simple barriers to comply with but can have devastating consequences if broken
or not respected. Compliance across borders is another disadvantage. This includes financial, operational and legal compliance issues. The most effective way to mitigate this disadvantage is to hire and maintain legal and compliance teams for international operations and offices.
Navigating the process of expanding a franchise internationally shouldn’t be a daunting task. True, it will take time, patience and money, but if your brand is strong and you have a great team working with you, it could be a challenging yet rewarding use of your time and business acumen.
Adam Povlitz is CEO & president of Anago Cleaning Systems. For more information about IFA franchisor member Anago Cleaning Systems, please visit franchise.org/franchise-opportunities/anagocleaning-systems.
There are instances when a franchisor may have a lesserknown business, but the company’s service or product is strong enough to fill a high demand in another country.”
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KEEP YOUR FRIENDS CLOSE AND YOUR FRANCHISEES CLOSERBy Jennifer LoBianco, Best Life Brands
Now that we have that cleared up, let’s dig in. I have been in franchise marketing for some time now and have gained a lot of experience with building relationships with individual franchisees and groups of franchisees, mainly as part of AdFund groups. With that being said, I wanted to highlight some of the things I’ve experienced that may have relevance to other franchise professionals.
If you’re reading this, you are most likely in franchising, whether you are a franchisee or franchisor, it’s not for the faint of heart. I have served in many franchise-related marketing roles over the years, with some non-franchise roles in between, but working with franchisees keeps bringing me back to franchising. I am a people person and helping franchisees first handedly help their customers is rewarding. Sure, when you sell a product directly to consumers, you have an easier time measuring the success of your marketing efforts and that’s a huge incentive for marketers who work in packaged goods, but their direct interaction with customers is limited. In franchising, I get to work with the most important customer, the franchisee, every day. Here are some things about franchisee relationships that I’ve learned along the way.
Never assume you know what it’s like to be a franchisee: Someone on my team was once was upset that a franchisee, who was supposed to attend a social media webinar, failed to show, and then asked us a ton of questions a few days later about the content. My team member didn’t understand why we should have to answer them one-on-one after all the work went into doing a group presentation. I coached them, letting them know that a franchisee has many things going on and an hour of their day to listen to a social media presentation is often not possible. Soon after, we found out that there was an accident in the franchisee’s parking lot that shook everyone up and he couldn’t
attend our presentation, because there was something much more worthy of his time. Franchisees are wearing every hat, whereas we are wearing one. They aren’t downplaying what we do, but we need to have a better understanding of what they are doing as business owners. Besides marketing, they are covering for employees that haven’t shown up for work, they are cleaning the office, training, coaching, selling, and, sometimes, dealing with accidents in their parking lot.
Many marketers shy away from getting franchisee input; however, I say bring it on! If you don’t have franchisee involvement, or buy-in, your program will fail. Even if a consumer campaign “works” in the end, if franchisees are not involved in the review process, given the opportunity to provide input or understand why you are doing something, it doesn’t matter if it succeeds, they will feel slighted. As marketers, we must remember that we’re approaching things differently, just as our marketing firms and partners. Franchisees are looking at things from a different perspective, I like to say, “from the inside out.” Receiving input doesn’t mean setting up a formal review board for everything. Sometimes a quick email to a group of franchisees is all it takes. Inform them of an idea you are planning on testing and get their input, then make the call on whether the input you’ve received requires you to pivot or not, then move on. Involvement on the front end saves time in the end, rather than attempting to engage franchisees after the fact.
Communicate, communicate, and then communicate some more: I recall a franchisee saying to me, “I have never heard of ‘XYZ’ before,” after we had sent countless emails about the subject. His answer was, “I don’t read any emails from marketing.” While that response hurt my heart a little, it made me understand that time is money and I had to find the best use of their time for receiving our information. And to be honest with you, I have heard, “I don’t read any emails from marketing,” many times! Some franchisees prefer emails, others prefer voicemails and some prefer podcasts. We then began to send out the most important messages via blast voicemails, the ones that go right into your mobile voicemail so you are forced to listen to it, because who can ignore a message button lit up or highlighted?!?! Communicating something ten times may not always work, but the right method of communication may work the very first time. However, there are times that no matter how you communicate, the message is never received, so do your best to over-communicate.
Jump from the ivory tower: For my first job in franchising, I was a field marketing manager; essentially I was responsible for working with over 1,000 locations in over 10 states. I mainly worked with secondary markets, while my boss focused on the larger markets. We had a sizable co-operative matching fund, so I was in the field working with groups of franchisees, getting them on board with national efforts and setting up co-op programs that were aligned with the national strategy, and the co-ops got half the funds back. This sounds like a no-brainer-slam-dunk-easy-sell. Well, everyone in marketing knows the most frequent question we get is, “What do I get for my 2 percent?”
At the time, having just started my career in franchising (and my career overall), I didn’t know what that question was, let alone the answer to that question! The same day I started my job in franchising I had an airline ticket on my desk for the near future to fly to present to a group of unhappy franchisees in a major market. I quickly found out why they were unhappy once I got there. So picture this, newbie, no franchise experience, little marketing experience, in front of many unhappy franchisees asking me “What do I get for my 2 percent?” And since I didn’t have many good answers, I listened, a lot, and then listened some more. I learned that empathy was almost better than having the answer. That group of franchisees and I ended up having a great relationship over time, especially when I did have the answers. I started in the field and never forgot what it was like to be on the front lines of franchising and out of the ivory tower.
Never assume you know more than a franchisee: Most of the franchisees
I have worked with have been professionals for many decades who were looking for their last stop to not just making a nice financial living, but more so, an impact. These people have held many high-level positions in technology, finance, law, education, healthcare, to name a few. They most likely have seen things you have not. They may have managed bigger budgets, larger teams, and made more money. They have a set of different experiences, so while we think we are “teaching” them, we have to be careful, because there’s much to learn. I have gotten many great marketing ideas from franchisees and have developed campaigns with ideas they’ve tested locally. I worked with one franchisee who had been running a radio campaign for over a year and was tracking the success of it as well as the client conversion rates. He never told corporate because he didn’t want to get slapped on the wrist. I got wind of his campaign, setup a call, and started by saying, “I’m not calling you to tell you to stop running the radio ads, I’m
calling you to find out the secret of the campaign’s success.” Fast forward, we took the ads and repurposed them for other franchisees to use. Everyone in franchising knows that the Big-Mac was a franchisee’s idea. Well, there are many “small-mac” other examples of those too. Keep your ears and mind open.
Franchisees First has been my motto for a long time, and it has a lot to do with that flight I took many years ago to my first franchisee meeting. I even had one of my teams put these two words on their corkboards (yes, remember those things, actual boards with push pins), as a reminder to approach any project or conversation with the mindset that we owe franchisees the time and attention to best serve their needs. That’s not to say that we don’t disagree or have some very challenging conversations, but we must be open and empathetic.
Franchisees are remarkable. Treat them accordingly.
LoBianco is the SVP of marketing for Best Life Brands (ComForCare, At Your Side, Care Patrol, Blue Moon Estate Sales, Boost Home Healthcare).
What do I get for my 2 percent?
FRANCHISING IN NEW ZEALAND: CURRENT ISSUES AND DEVELOPMENTSBy Stewart Germann, Stewart Germann Law Office
Some of the highlights from the Franchising New Zealand 2021 Survey results are as follows:
• There are 590 business format franchisors in New Zealand
• There is an estimated total of 32,300 units operating in business format franchises
• More than 156,820 people are employed directly in business format franchises
• Sales turnover for the entire franchising sector was estimated at NZ $58.5 billion
• 70 percent of franchise brands originated in New Zealand
• Online sales grew tremendously with now almost 80 percent of brands engaging in online sales
• More than 20 percent of franchisors have entered international markets
Although there are no specific franchising laws, there are existing laws which protect franchisees; and
New Zealand is one of the most deregulated countries in the world to conduct small to medium-sized business.
There is no specific legislation controlling the operation of franchising in New Zealand and other countries like New Zealand include Singapore and the United Kingdom.
Once a franchisee has chosen a particular brand and franchise system and wishes to progress further with enquiries, the first question to ask is whether the franchisor belongs to the Franchise Association of New Zealand (FANZ).”
the three main laws which provide such protection are the Fair Trading Act 1986, the Commerce Act 1986 and the Contract and Commercial Law Act 2017. These Acts focus in particular on misrepresentations and restrictive trade practices which include anti-competitive behavior.
Once a franchisee has chosen a particular brand and franchise system and wishes to progress further with enquiries, the first question to ask is whether the franchisor belongs to the (FANZ). The FANZ was formed in 1996 and publishes the Code of Practice and the Code of Ethics which all members must comply with. Many franchisors belong to the FANZ but some have chosen not to join yet still comply with the Codes. Others may choose not to join and do not comply with the Codes, so be aware.
The Commerce (Cartels and Other Matters) Amendment Act 2017 changed the Commerce Act 1986 by replacing the previous prohibition on price-fixing between competitors with
an expanded prohibition on cartel provisions, which extends to market allocations and output restrictions, as well as to price-fixing, by competitors. The New Zealand cartel prohibition is very wide and will have quite an impact on franchise networks. Some additional clauses must be inserted into franchise agreements and there must be explanations, in plain language, as to why certain clauses are necessary. Consideration must be given to cartel clauses in franchise agreements; for example, clauses that set or influence prices, restrict output or allocate markets will be caught. The possibility that alternative arrangements might achieve the same or a similar commercial outcome as a cartel clause should also be considered. Another consideration is whether the collaborative activity exemption or the vertical activity exemption would apply. Expert legal advice should be obtained in relation to this Act.
There will not be a cartel arrangement in place where parties are not in competition with each other. In most franchise systems the
franchisor will not be in competition with its own franchisees but that is not always the case. For example, a franchisor that owns its own outlet might be found to be in competition with franchisees. Similarly, where a franchisor sells online direct to the end consumer, yet at the same time has franchisees who sell to those consumers, it may also be in competition with its franchisees. There may also be instances where the franchisees are in competition with each other. Where a franchisor is in competition with a franchisee or where franchisees are found to be in competition with each other, there will be a competitive relationship, so the franchisor needs to be cognizant that there may be provisions in its franchise agreements that amount to cartel provisions.
The Commerce (Criminalisation of Cartels) Amendment Act 2019 has introduced a new criminal offence for cartel conduct and the criminal sanctions reflect the covert nature of cartels and the harm they cause to consumers and the economy. The Commerce Act 1986 provides a number
of statutory exceptions that would not constitute a cartel arrangement and may be pro-competitive. These exceptions relate to collaborative activities (for example, joint ventures or franchise arrangements), joint buying, vertical supply contracts and specified liner shipping arrangements as stated earlier. There are no defenses for mistakes of fact relating to the elements of joint buying and promotion and vertical supply contracts. Therefore, it would be possible in the future for a director of a franchisor company to be criminally liable under the Act for a cartel offense.
The New Zealand courts have recognized that it is reasonable for a person in the position of a franchisor to impose a contractual restraint upon competitive conduct by a franchisee or an ex-franchisee, but such restraints must not exceed the boundaries of the court’s notion of reasonableness. The first principle is that it is reasonable for a person to stipulate that if he or she is willing to disclose all secrets of how to establish a particular business
enterprise, then the recipient of the information cannot immediately terminate the contract and set up a competitive business using the information received during the course of the relationship. If the courts did not provide protection to franchisors against conduct like this, there would be no incentive for the owners of established businesses to share their secrets with others and enhance their business skills. The second principle is that it is important for the well-being of the community that every individual should, in general, be free to advance his or her skills and earning capacity.
The Contract and Commercial Law Act 2017 in New Zealand gives the courts authority to rewrite a restrictive covenant and to allow an excessive covenant to be enforced at a lesser level.
Unfair Contract Terms
The Fair Trading Amendment Act 2021 was passed to extend the existing prohibition on Unfair Contract Terms (UCT) to standard form small trade contracts worth under NZ $250,000 and introduced a new statutory
prohibition on unconscionable conduct which will apply August 16, 2022. If a standard form small trade contract was signed prior to this date the UCT regime will not apply unless that contract was amended or varied after August 16, 2022.
The unconscionable conduct in trade provisions is much broader as it applies to all conduct, not just contractual terms. The term unconscionable conduct is not defined but the Act provides elements for the Court to consider below:
• The relative bargaining power of the parties
• The extent to which the parties acted in good faith
• Whether the affected person was reasonably able to protect their interests; and
• Whether unfair pressure or tactics were used
These provisions have brought New Zealand more into line with similar provisions in Australia and New Zealand may take guidance from Australian cases.
New Zealand is very attractive for franchising and many overseas systems have entered the market including from Australia, USA, Canada and the United Kingdom. International franchising was thriving worldwide until the global pandemic of 2020. However, there is certainly a current surge in systems wanting to go international.
Stewart Germann is a franchising lawyer at Stewart Germann Law Office in Auckland, New Zealand. For more information about IFA supplier member Stewart Germann Law Office, please visit franchise.org/suppliers/ stewart-germann-law-office
February 26-March 1, 2023 | Las Vegas, NV
CFE Special Sessions: February 25- 26
MFV FRANCHISE EXPO WEST
March 31-April 1, 2023 | Phoenix, AZ
May 7-9, 2023 | Washington, DC
IBA/IFA JOINT CONFERENCE
May 9-10, 2023 | Washington, DC
MFV INTERNATIONAL FRANCHISE EXPO
June 1-3, 2023 | New York, NY
FRANCHISE CUSTOMER EXPERIENCE CONFERENCE
June 20-22, 2023 | Atlanta, GA
MFV FRANCHISE EXPO SOUTH
September 8-9, 2023 | Ft. Lauderdale, FL Partnership event with MFV Expositions/Comexposium
IFA LEADERSHIP SUMMIT & FRANCHISE ACTION NETWORK ANNUAL MEETING
September 11-13, 2023 | Washington, DC
FRANCHISE LEADERSHIP & DEVELOPMENT CONFERENCE
October 17-20, 2023 | Atlanta, GA Partnership event with Franchise Update Media
EMERGING FRANCHISOR CONFERENCE
November 1-3, 2023 | New Orleans, LA
CFE Special Sessions: November 1
CURRENT DEI TRENDS IN THE FRANCHISE INDUSTRYBy Kendal Tyre, Nixon Peabody LLP
The August 2022 Entrepreneur Magazine report, “The 50 Franchise Companies Doing the Most to Champion Diversity,” indicates that there are three significant methods franchisors use to increase diversity within their organizations and the industry at large. The methods are:
• Providing incentives and discounts to minority franchise owners;
According to the International Franchise Association (IFA), the minority ownership rate of franchises is 26 percent compared to a 19 percent minority ownership rate of non-franchised small businesses. Black-owned franchises specifically earn 2.2 times more, on average, than Black-owned independent businesses. An Oxford Economics/ IFA study found that Hispanicowned franchise businesses employ
1.5 times more people per location than their non-franchise counterparts and have 1.6 times as many sales.
Traditional barriers to franchise ownership include difficulty finding financing, lack of education about how to run a franchise business and a lack of connections in the franchise industry.
Recently, franchise systems have been very thoughtful about bridging the gap between these barriers to entry and successful franchise ownership.
• Internal diversity, equity, and inclusion (DEI) initiatives; and
• External partnerships.
Providing Incentives and Discounts to Minority Owners
One means to encourage and increase minority franchise ownership is to provide future and current owners with incentives and discounts. For example, McDonald’s committed $250 million in the U.S. over five years to “provide alternatives to traditional financing, to help candidates — who may face socio-economic barriers — join the McDonald’s System.”
Similarly, Wendy’s launched a recruitment initiative called “Own Your Opportunity” to expand restaurant ownership opportunities, specifically among women and people of color. Wendy’s hopes the initiative will advance its goal to create pathways for those who want to
Recent initiatives by a variety of US franchisors have provided unique entrepreneurial opportunities for people of color.
grow within its system. Ben & Jerry’s has opted to waive the franchise fee for diverse franchisees, reimburse certain training and development fees, provide rebates for royalty fees, and waive transfer fees for existing franchisees who sell to a minority candidate. Many other franchises also provide discounts or waive franchise fees to new minority owners.
finding financing, lack of education about how to run a franchise business and a lack of connections in the franchise industry.”
Internal DEI Initiatives
Franchisors have recognized that they must cultivate an internal culture that supports their minority owners. To that end, the IFA Foundation has developed affinity groups committed to educating and providing IFA members with opportunities to discuss ways to support minority members. The groups also promote awareness and access to opportunities for minority entrepreneurs looking to enter franchising. Franchisors are:
• Forming internal DEI councils (support networks or affinity groups);
• Providing scholarships, education, and mentorship opportunities for minority owners and prospective owners;
• Providing complimentary membership and conference registration;
• Creating forums for minority owners to engage with company leadership; and
• Becoming members of industry alliances that specifically support minority owners.
External DEI Initiatives
Franchisors are also launching external DEI initiatives aimed at educating the external community about franchise ownership and encouraging them to become franchise operators. Yum Brands, for example, recently launched the “Center for Global Franchise Excellence,” a program designed for women and people of color to “learn how to run a franchise operation.” Yum also added an accelerator program in partnership with Howard University and the
made commitments to engage external communities in the following ways:
• Targeting prospective bilingual franchisees to cater to the needs of the Latino market;
• Partnering with existing organizations to find and support prospective business owners from minority communities;
• Developing DEI training modules to create a more inclusive environment and experience for customers; and
• Making sure marketing and advertising are targeted to specific communities.
University of Louisville, where 10 Black and Latino MBA students were selected for a five-month program that will end with two participants getting their own Yum Brands franchise. Many franchisors are committed to similar external initiatives. Some have even partnered with Representative Alma Adams and the Historically Black Colleges and Universities (HBCU) Caucus to promote greater engagement between private companies and HBCUs. Many other franchisors have
As companies re-evaluate their DEI initiatives and assess their effectiveness, they are modifying existing programs or launching new programs to tap into new markets represented by growing diverse communities. The initiatives described here are just a sampling of the changes underway.
Kendal Tyre is a Nixon Peabody partner and co-leads the law firm’s Franchising & Distribution practice and DEI Strategic Services offering. For more information about IFA supplier member Nixon Peabody, please visit franchise.org/suppliers/nixon-peabody-llp
barriers to franchise ownership include difficulty
are also launching
initiatives aimed at educating the external community about franchise ownership and encouraging them to become franchise operators.”
As companies re-evaluate their DEI initiatives and assess their effectiveness, they are modifying existing programs or launching new programs to tap into new markets represented by growing diverse communities.”
INTERNATIONAL FRANCHISE ASSOCIATION DELIVERS VALUE TODAY AND TOMORROWBy Bill Meierling, IFA
At a time when businesses and groups of all types are reassessing their growth strategies and program offerings, many are trimming back member services or selling off key assets in the hope of becoming more profitable. These organizations are cutting a smaller pie into smaller pieces to preserve their place in the market.
Over the past year, the International Franchise Association (IFA) has made major investments in the portfolio of programs and services offered to members, opportunity seekers and the broader franchising community.
Over the past year, the International Franchise Association (IFA) has made major investments in the portfolio of programs and services offered to members, opportunity seekers and the broader franchising community.”
That’s not the case at the International
lines on the legislative and regulatory landscape are often found in the most local decision-making bodies, and IFA joins you daily in the trenches to ensure our elected leaders focus on appropriate regulation that empowers — not stifles — franchise growth. Whether it’s a day of meetings between franchise owners and California legislators, a ‘Franchising 101’ course for members of Congress and their staff, or the nationwide Open for Opportunity campaign that proactively highlights the opportunity of franchising, IFA fights to protect franchising.
Whether you seek government affairs, professional development, or business relationships and franchise expansion, IFA has prioritized deploying new and augmented programs to serve your needs. While contrary to the strategies of many professional associations today, this bold approach to serving the dynamic and growing franchising sector is increasing IFA member value at a dramatic rate.
Serving you, and working together to protect, enhance and promote franchising, is IFA’s core purpose. And our future-focused strategy is simple: Meet you where you are with best-in-class advocacy, professional development, franchise development and partner relationships. In a world of rapid change, meeting you where you are means a little something different to everyone, and we are here to unpack what that means for the International Franchise Association and how that impacts the future of the sector.
In advocacy, meeting you where you are means an increased focus on state and local government relations and engaging the right people at the right time to move the needle. The front
In professional development, meeting you where you are means on-demand learning crafted specifically for you, your role in your company and your stage of professional growth. It also means, meeting you physically where you are whether it is in the comfort of your own home, at your office, or at a franchising conference. Recognizing the demand and success of new professional development and learning opportunities, in 2022, IFA invested in strengthening a number of programs offered for all levels of expertise and lines of business. In 2022, IFA launched a refresh of the Certified Franchise ExecutiveTM program, IFA Academy — a new, online, learning management platform, the IFA Foundations of Franchising program
in partnership with the University of Louisville and began to offer an education track at MFV exhibitions across the United States to deliver programs that enhance franchising.
In franchise development and partner identification, meeting you where you are means a renewed focus on promoting franchising in emerging markets, developing new partnerships with preferred vendors that in turn offer you discounts and reduce the overall cost of doing business or partnerships with third-party organizations to reach new communities interested in entrepreneurship and business ownership and investing in technology and platforms to help you reach opportunity seekers and generate sales. These programs and more help promote franchising in every community.
On all fronts, 2022 has shown the strength of the business model, and the association representing you is expanding our programs to support that growth and the opportunities that lie ahead. And this is just the beginning. Your IFA team has so much more in store for 2023 as we work daily — and in partnership with
you — to protect, enhance and promote franchising.
Bill Meierling is the vice president of communications and marketing for the International Franchise Association.
Recognizing the demand and success of new professional development and learning opportunities, in 2022, IFA invested in strengthening a number of programs offered for all levels of expertise and lines of business.”
Serving you, and working together to protect, enhance and promote franchising, is IFA’s core purpose.”
Your IFA team has so much more in store for 2023 as we work daily — and in partnership with you — to protect, enhance and promote franchising.”
ALL IN. ALL HERE: THE 63 RD IFA ANNUAL CONVENTIONBy Stephen Rupp, IFA
As we approach 2023, many of us turn our attention not only to the holidays and to closing out the business year. As spreadsheets and growth plans fill our desks, it is easy to lose sight of the great opportunity that a new year brings. As you are setting your agenda for the coming year, there is one thing that is certain to be part of your planning — the 63rd IFA Annual Convention in Las Vegas, Nevada this February.
With the COVID-19 pandemic hopefully in the rearview mirror, now is the time to capitalize on the packed program and unparalleled offerings that the IFA Annual Convention brings to the table. Whether it’s networking, learning opportunities, business growth, or high impact speakers, it’s all here and everyone is all in. All in means all people, all sectors, all roles, all together. The IFA Annual Convention is for anyone and everyone in the franchising family — those just getting started or wanting to learn more about what franchising has to offer. This is your opportunity to go All In, All Here — for your career, your business, and your brand.
As Steve White, president and COO of Puro Clean, says, “For most
franchisors, franchisees and suppliers, Convention exceeds their wildest expectations. And it is one of the best bang for your buck that you will ever experience.”
Rated “Best Event” by Entrepreneur Media, the IFA Annual Convention has been the leading event in franchising with unparalleled content and networking opportunities. With renewed energy for being back
together, it was apparent that the 2022 IFA Annual Convention is the place to be. 2022 featured inspirational speakers as NBA superstar and Big Chicken franchisor Shaquille O’Neal had an unforgettable conversation with Charlie Chase, chairman of the IFA Board of Directors and CEO of FirstService Brands. We also heard from top brand executives and leaders within franchising like Inspire Brands CEO, Paul Brown, who left everyone with ideas and insights to take their brands to the next level.
If 2022 was any indication of what the 2023 IFA Annual Convention has in store, you will not want to miss speakers delivering inspiration, information and education that impact you and your franchise network in unique, innovative and engaging ways.
The speakers are just the beginning. The networking opportunities available at the Annual Convention are second to none — with high rollers from franchise brands spanning over 300 business lines, to suppliers that help you grow, to your peers navigating the same path as you, there is no better place to rub elbows with the people you need to take your brand to the next level. From intimate relationship development opportunities to networking receptions designed specifically to connect you to the right people, to a night of fun with “IFA Unplugged,” IFA Annual Convention is more than just a traditional conference.
If 2022 was any indication of what the 2023 IFA Annual Convention has in store, you will not want to miss speakers delivering inspiration, information and education that impact you and your franchise network in unique, innovative and engaging ways.”
Plus, Franchise City will return — our tradeshow floor is the complete package, with exhibits, demos and showcases from leading brands AND franchise suppliers from around the globe. It is your one-stop shop for new connections with brands of all sizes, vendors who can deliver you services key to your enterprise, and new partners to help streamline your business. It’s not too late to ensure you have your spot on the show floor.
In addition to all of this, the Convention features unparalleled learning opportunities. While attending, you can earn credit toward your Certified Franchise Executive (CFE) designation, the standard of excellence for franchise education. Come a little early, and fast track your CFE with 13 CFE Special Sessions February 25-26, 2023. This is an easy and fun way to ensure that you are meeting the participation and engagement criteria of this certification — part of what makes it a best-in-class educational program. We will also celebrate our newest CFE graduates.
“At IFA Annual Convention, you’re hearing stories and learning things that hone and sharpen those skills you have in franchising. You can’t get that anywhere else other than the group of people that get together for IFA Convention,” remarked Aaron Chaitovsky of Citrin Cooperman and Co.
You can also tailor your Annual Convention sessions to suit the exact needs of your business and franchise network with the wide variety of educational tracks. IFA offers nine educational tracks, including: Emerging Franchisor Finance Franchisee FranDev Industry Trends International Marketing Operations Real Estate
Each of these tracks include two breakout sessions lasting one hour each — some even include a summit, featuring panel discussions from industry leaders. And if you can’t decide which one, you can divide and conquer depending on where your needs are.
More than the inspirational, educational and networking opportunities, the IFA Annual Convention is a place to find and celebrate community. And what better place to celebrate community than Las Vegas — where many of you have been before and some of you will be joining
for the first time. Here we will celebrate the business model that is franchising as well as the opportunity it creates in every community. Come experience the fun of being together with leaders just like you from across industries while participating in high energy and fun programming that have become a mainstay of the Annual Convention.
No matter what you are looking for this February, the IFA Annual Convention has it — All in, All here. Come out and join the can’t-miss franchising event of the year.Stephen Rupp is the senior coordinator, multimedia communications at the International Franchise Association.
More than the inspirational, educational and networking opportunities, the IFA Annual Convention is a place to find and celebrate community.”
Stay up to date on the latest IFA Annual Convention information by visiting franchise.org/convention.
The International Franchise Association is proud to celebrate our franchisee members. See below to learn more about some of our Featured Franchisees — why they got into franchising, their unique backgrounds and how they contribute to their local communities.
Karnes, who returned from the trip to West Africa in March, relayed the message of what was needed: the ability to perform life-saving surgeries such as C-Sections. As a franchisee for eight years, and in his time with the company since the late 1990s, Karnes says this annual effort has enhanced the ownership experience for all involved.
“I’ve been a supporter of this effort even since before becoming an owner, and I’ve been inspired by other owners raving about the impact when they returned from their trips,” said Karnes. “It was truly eye-opening to experience it personally. We got back after speaking directly with nurses there, and immediately began stressing the need to bump up our efforts. I’m proud that others have agreed and that we have brand’s backing on this heightened goal.”
Scott Karnes, Complete Weddings + Events franchisee, Manhattan, Kansas
Scott Karnes and his wife returned from West Africa inspired and committed to energizing their fellow franchisees. Karnes is a franchise owner of Complete Weddings + Events based in Manhattan, Kansas, one of the few selected by the one-stopshop wedding entertainment franchise to see their fundraising efforts being put to use.
Complete’s “Do Good Together” initiative works in partnership with Global Partners in Hope (GPiH), raising more than $100,000 over the past three years to build clean water wells in Togo and most recently constructing a medical center for women and children.
2022 marks the 10th year of the Do Good Together effort. In the first nine years of its partnership with GPiH, Complete Weddings + Events has dedicated one month to its annual fundraising campaign each year by donating 3 percent of sales to the Do Good Together initiative. The same was done in 2022, but across two months in September and October.SCOTT KARNES
Kal Gullapalli, Marco’s Pizza multi-unit franchisee
After spending seven years working on Wall Street, Gullapalli transitioned to entrepreneurship, opening butcher, burger and pizza shops. He then entered the world of franchising in 2016 and found his stride as a successful multi-brand, multi-unit operator.
Gullapalli is now a veteran in the franchise industry, owning several fitness locations and health & wellness retail centers. When the pandemic started, the non-food service industry completely shut down, which triggered him to begin looking at thriving franchise brands. This led him to Marco’s Pizza which was experiencing doubledigit, record-breaking sales growth with vast whitespace to develop across the country.
Gullapalli joined Marco’s Pizza in 2021 with a desire to diversify his portfolio, and he now boasts more than 30 Marco’s locations with a vision to own a 100-plus store portfolio by 2025.
“When I was working at a pizza shop in high school, I would always say to myself, ‘Why can’t I own 100?’ I’ve seen my franchisee peers grow to 100-plus over time and knew it was doable. With Marco’s, there’s a clear path to my team owning 100-plus locations,” said Gullapalli.
For Gullapalli, the secret to mega growth entrepreneurship lies in hiring a great team, developing them, and trusting in their ability to execute. “Marco’s prioritizes a ‘People-First’ and ‘Hospitality Always’ mindset, and I believe if you put in the time and effort to take care of your team, they will take care of your guests in return. Once you realize your team is your greatest asset and prioritize that above all else, you’ll be on the fast track to growth,” he added.
Cody Rothwell, Bad Ass Coffee of Hawaii multi-unit franchisee, Tennessee
After serving in the U.S. Military as an Apache Pilot, Cody Rothwell began a contracting career in the Nashville area. While working on custom homes and commercial buildouts, Rothwell was always interested in owning another business.
In 2021, while surfing the internet, he saw an ad for Bad Ass Coffee of Hawaii – a brand he was familiar with from his travels to Hawaii. Rothwell was intrigued by the unique back story of the brand: The brand was born on the Big Island of Hawai’i in 1989 with the dream of sharing American-grown and premium Hawaiian coffee from Hawai’i with customers in coffee shops across the country. After he and his wife attended the franchise Discovery Day, they immediately knew they found the perfect fit for their next business venture.
Rothwell signed a development agreement to bring 18 Bad Ass Coffee of Hawaii shops to Tennessee, with the opportunity to open additional units. Recently he opened his first location in White House, Tennessee, with his next location slated to open soon near the Vanderbilt University campus in Nashville.
Rothwell notes there are several parallels between being in the military and being an entrepreneur. “Regardless if you’re serving in the Army or serving your community as a business owner, your success lies in key values: hard work, accountability, and teamwork. If you stick to these and believe in your brand, the sky’s the limit in terms of growth potential.”KAL GULLAPALLI
IFA’s political action committee, FranPAC, supports pro-franchise, pro-business candidates for U.S. Congress.
2021-2022 Cycle Expenditures: $708,500
U.S. House of Representatives
Adams, Alma Democrat NC-12 $2,500.00
Allen, Rick Republican GA-12 $4,500.00
Armstrong, Kelly Republican ND AL $2,000.00
Banks, Jim Republican IN-03 $5,500.00
Balderson, Troy Republican OH-12 $2,000.00
Barr, Andy Republican KY-06 $2,500.00
Barragan, Nanette Democrat CA-44 $1,000.00
Bentz, Cliff Republican OR-02 $1,000.00
Bera, Ami Democrat CA-06 $1,000.00
Bice, Stephanie Republican OK-05 $2,500.00
Bilirakis, Gus Republican FL-12 $3,500.00
Bishop, Sanford Democrat GA-02 $2,500.00
Blunt Rochester, Lisa Democrat DE-01 $2,500.00
Brownley, Julia Democrat CA-26 $1,000.00
Buchanan, Vern Republican FL-16 $5,000.00
Bucshon, Larry Republican IN-08 $2,500.00
Cammack, Cat Republican FL-03 $1,000.00
Carey, Mike Republican OH-15 $4,500.00
Case, Ed Democrat HI-01 $1,000.00
Cardenas, Antonio Democrat CA-29 $2,500.00
Carter, Troy Democrat LA-02 $3,500.00
Carter, Buddy Republican GA-01 $2,500.00
Chabot, Steve Republican OH-1 $4,500.00
Cheney, Liz Republican WY-1 $5,000.00
Cline, Ben Republican VA-06 $1,000.00
Cole, Tom Republican OK-04 $1,000.00
Comer, James Republican KY-01 $5,000.00
Correa, Lou Democrat CA-46 $2,000.00
Costa, Jim Democrat CA-16 $1,500.00
Cuellar, Henry Democrat TX-28 $10,000.00
Curtis, John Republican UT-03 $1,000.00
Davis, Rodney Republican IL-13 $10,000.00
Donalds, Byron Republican FL-19 $3,500.00
Duncan, Jeff Republican SC-03 $1,000.00
Dunn, Neal Republican FL-02 $1,000.00
Emmer, Tom Republican MN-6 $3,500.00
Feenstra, Randy Republican IA-04 $1,500.00
Ferguson, Drew Republican GA-3 $10,000.00
Fitzgerald, Scott Republican WI-5 $3,000.00
Fitzpatrick, Brian Republican PA-01 $3,000.00
Foster, Bill Democrat IL-11 $1,000.00
Foxx, Virginia Republican NC-5 $10,000.00
Garbarino, Andrew Republican NY-02 $1,000.00
Gimenez, Carlos Republican FL-26 $2,500.00 Grothman, Glen Republican WI-06 $2,000.00 Gottheimer, Josh Democrat NJ-5 $3,000.00 Granger, Kay Republican TX-12 $1,000.00
Graves, Garret Republican LA-06 $1,000.00 Guthrie, Brett Republican KY-05 $5,000.00
Hagedorn, Jim Republican MN-1 $1,000.00 Harshbarger, Diana Republican TN-01 $4,000.00
Hern, Kevin Republican OK-1 $10,000.00
Herrera Beutler, Jaime Republican WA-3 $6,000.00
Hinson, Ashley Republican IA-02 $3,500.00 Horsford, Steven Democrat NV-04 $5,000.00 Hoyer, Steny Democrat MD-5 $5,000.00
Hudson, Richard Republican NC-8 $10,000.00
Jeffries, Hakeem Democrat NY-8 $3,500.00
Johnson, Hank Democrat GA-04 $1,000.00
Johnson, Dusty Republican SD-AL $2,000.00
Johnson, Mike Republican LA-04 $1,000.00
Johnson, Bill Republican OH-06 $2,000.00
Joyce, Dave Republican OH-14 $1,000.00FRANPAC’s CURRENT FINANCIAL SUPPORT OF FEDERAL CANDIDATES AS OF November 15, 2022.
Joyce, John Republican PA-13 $5,000.00
Kelly, Robin Democrat IL-02 $2,500.00
Kildee, Dan Democrat MI-5 $2,500.00
Krishnamoorthi, Raja Democrat IL-8 $3,000.00
LaHood, Darin Republican IL-18 $5,000.00
LaTurner, Jake Republican KS-2 $2,000.00
Letlow, Julia Republican LA-05 $3,500.00
Levin, Mike Democrat CA-49 $1,000.00
Lesko, Debbie Republican AZ-08 $3,500.00
Luetkemeyer, Blaine Republican MO-3 $7,000.00
Mace, Nancy Republican SC-1 $1,000.00
Malliotakis, Nicole Republican NY-11 $2,500.00
McCarthy, Kevin Republican CA-23 $5,000.00
McEachin, Donald Democrat VA-04 $3,500.00
McHenry, Patrick Republican NC-10 $2,500.00
McClain, Lisa Republican MI-10 $1,000.00
McMorris Rodgers, Cathy Republican WA-05 $10,000.00
Meeks, Grey Democrat NY-05 $1,000.00
Malliotakis, Nicole Republican NY011 $2,500.00
Meijer, Peter Republican MI-03 $1,000.00
Miller, Carol Republican WV-03 $4,000.00
Miller-Meeks, Marianette Republican IA-02 $2,000.00
Moolenaar, John Republican MI-02 $2,000.00
Moore, Barry Republican AL-02 $2,000.00
Moore, Blake Republican UT-01 $2,000.00
Mullin, Markwayne Republican OK-02 $4,000.00
Murphy, Grey Republican NC-03 $1,000.00
Nehls, Troy Republican TX-22 $1,000.00
O’Halleran, Tom Republican AZ-02 $5,000.00
Owens, Burgess Republican UT-04 $1,500.00
Panetta, Jimmy Democrat CA-20 $2,500.00
Pallone, Frank Democrat NJ-06 $1,000.00
Palmer, Gary Republican AL-6 $1,000.00
Pence, Greg Republican IN-6 $1,000.00
Pelosi, Nancy Democrat CA-12 $5,000.00
Peters, Scott Democrat CA-52 $7,500.00
Pfluger, August Republican TX-11 $2,000.00
Rouzer, David Republican NC-07 $2,500.00
Reschenthaler, Guy Republican PA-14 $2,500.00
Roy, Chip Republican TX-21 $2,500.00
Rice, Tom Republican SC-07 $1,000.00
Scalise, Steve Republican LA-1 $7,500.00
Schrader, Kurt Democrat OR-5 $5,000.00
Smith, Adrian Republican NE-3 $1,000.00
Smith, Jason Republican MO-08 $2,500.00
Smucker, Lloyd Republican PA-11 $3,500.00
Spartz, Victoria Republican IN-5 $2,500.00
Soto, Darren Democrat FL-09 $1,000.00
Stauber, Pete Republican MN-08 $1,000.00
Steel, Michelle Republican CA-48 $7,500.00
Stefanik, Elise Republican NY-21 $7,500.00
Steil, Bryan Republican WI-01 $1,000.00
Stevens, Haley Democrat MI-11 $1,000.00
Tenney, Claudia Republican NY-24 $3,500.00
Thompson, Mike Democrat CA-5 $1,500.00
Timmons, William Republican SC-4 $1,000.00
Van Duyne, Elizabeth Republican TX-24 $4,000.00
Veasey, Marc Democrat TX-33 $3,500.00
Velazquez, Nydia Democrat NY-7 $1,000.00
Walberg, Tim Republican MI-7 $6,500.00
Wilson, Joe Republican SC-02 $1,000.00
Boozman, John* Republican AR $5,000.00
Braun, Mike Republican IN $2,500.00
Collins, Susan Republican ME $5,000.00
Coons, Chris Democrat CT $1,000.00
Crapo, Mike* Republican ID $2,500.00
Hagerty, Bill Republican TN $3,000.00
Hawley, Josh Republican MO $1,000.00
Johnson, Ron* Republican WI $5,000.00
Kelly, Mark* Democrat AZ $1,000.00
Lankford, James* Republican OK $10,000.00
Lee, Mike* Republican UT $2,500.00
Manchin, Joe Democrat WV $10,000.00
Marshall, Roger Republican KS $7,500.00
Moran, Jerry* Republican KS $6,000.00
Murkowski, Lisa* Republican AK $1,000.00
Rosen, Jacky Democrat NV $1,000.00
Rubio, Marco* Republican FL $10,000.00
Scott, Tim* Republican SC $10,000.00
Schumer, Chuck Democrat NY $1,000.00
Sinema, Kyrsten Democrat AZ $7,500.00
Thune, John* Republican SD $3,000.00
Van Hollen, Chris* Democrat MD $3,500.00
Young, Todd* Republican IN $5,000.00
Party PACs and LPACs
ACROSS THE AISLE PAC Democrat $5,000.00
ARK PAC (Sen. John Boozman) Republican $2,500.00
Blue Dog PAC Democrat $10,000.00
BUILD PAC (Rep. Jim Clyburn) Democrat $5,000.00
Bluegrass Committee (Sen. Mitch McConnell) Republican $2,500.00
CMR PAC (Rep. Cathy McMorris Rodgers) Republican $5,000.00
COACH PAC (Sen. Tommy Tuberville) Republican $3,500.00
Common Values PAC (Sen. John Barrasso) Republican $2,500.00
CONGRESSIONAL BLACK CAUCUS PAC Democratic $10,000.00
CHC BOLD PAC Democratic $5,000.00
EMMER PAC (Rep. Tom Emmer) Republican $5,000.00
E-PAC (Rep. Elise Stefanik) Republican $5,000.00
EQUALITY PAC Democratic $5,000.00
Eye of the Tiger PAC (Rep. Steve Scalise) Republican $2,500.00
First in Freedom PAC (Rep. Richard Hudson) Republican $2,500.00
Future Forum PAC Democrat $5,000.00
GETTING STUFF DONE PAC (Sen. Kyrsten Sinema) Democratic $5,000.00
Heartland Values PAC (Sen. John Thune) Republican $2,500.00
HOOSIER PAC (Sen. Mike Braun) Republican $2,500.00
House Conservative Fund Republican $10,000.00
Leadership and Accountability are National Keys PAC (Sen. James Lankford, R-OK) Republican $2,000.00
Majority Committee PAC (Rep. Kevin McCarthy) Republican $2,500.00
MARSHA PAC (Sen. Marsha Blackburn) Republican $2,500.00
National Republican Congressional Committee Republican $30,000.00
National Republican Senatorial Committee Republican $30,000.00
New Democrat Coalition Democrat $5,000.00
RAPTOR PAC (Rep. August Pfluger) Republican $1,000.00
POINT ACTION PAC (Rep. Drew Ferguson) Republican $5,000.00
Wild and Wonderful PAC (Sen. Shelley Moore Capito) Republican $2,500.00
De La Cruz, Monica Republican TX-15 $1,500.00 Deering, Regan Republican IL-13 $1,500.00 Becker, April Republican NV-03 $1,500.00 Britt, Katie Republican AL-SEN $2,500.00 Budd, Ted Republican NC-SEN $10,000.00 Edwards, Chuck Republican NC-11 $2,500.00 Fung, Allan Republican RI-02 $1,500.00 Gesiotto Gilbert, Madison Republican OH-13 $1,500.00 Hunt, Wesley Republican TX-38 $1,500.00 Ivey, Glenn Democrat MD-04 $1,000.00 King, Esther Republican IL-07 $1,500.00 Laxalt, Adam Republican NV-SEN $4,500.00 McGarvey, Morgan Democrat KY-03 $1,500.00 Nunn, Zach Republican IA-03 $1,500.00 O’Dea, Joe Republican CO-SEN $2,500.00 Oz, Mehmet Republican PA-SEN $3,500.00 Pekau, Keith Republican IL-06 $1,500.00 Schmitt, Eric Republican MO-SEN $1,000.00 Sheller, Lisa Republican PA-07 $1,500.00 Vance, JD Republican OH-SEN $1,500.00 Zinke, Ryan Republican MT-01 $1,500.00
WELCOME NEW IFA MEMBERS
Crust Bros LLC
The Woodlands, TX
Contact Mr. Carl Comeaux www.crustfranchise.com
The Decor Group Irving, TX
Contact Mr. Kurt Carr www.christmasdecor.net
Elite Home Fitness Contact Mr. Luis `Mendonca www.eliteinhomefitness.com
FocalPoint Coaching Inc. Henderson, NV
Contact Mr. Steve Thompson www.focalpointcoaching.com
Foxy Box Franchising Inc. Victoria, BC
Contact Kyla Dufresne www.foxyboxfranchise.com
Fresh Start Franchising Watertown, NY
Contact Jacob Renzi www.jrecksubs.com
Fuse Franchising Inc. Santa Clara, CA
Contact Ms. Anna Kavalevich www.fuse.center
Virginia Beach, VA
Contact Mr. Brian Garrison www.grandilluminations.com
HomeCare Advocacy Network Omaha, NE
Contact Mr. Mark Goetz www.hcanthrive.com
iFlex Stretch Studios Scottsdale, AZ
Contact Julian Colmar www.iflexfranchise.com
Medi-Weightloss Franchising USA, LLC Tampa, FL
Contact Ms. Rhandi Emanouil Guzzo, CFE www.mediweightloss.com
Mosquito Mike Franchising Inc. Fall River, MA
Contact Mr. Michael Reynolds www.mosquitomikefranchise.com
NIC Services Group LTD Leeds,
Contact Mr. Richard Davies www.nicfranchise.co.uk
PushKin, Inc. Bentonville, AR
Contact Amanda Earhart www.pushkinapp.com Franchise123 Tampa, FL
Contact James St Louis www.franchise123.com
Crest Consulting North Salt Lake, UT
Contact Paola Hall www.gocrestconsulting.com
Included Health San Francisco, CA
Contact Angela Casey www.includedhealth.com
La Quinta, CA
Contact Ms. DeLynne Ano www.runli.us
Warburg Pincus LLC New York, NY
Contact Mr. Paul Benne www.warburgpincus.com
Premier Retail Support, Inc. Pittsburgh, PA
Contact Dan O’Connell www.premierretailsupport.com
BuildPoint Solutions Group Eden Prairie, MN
Contact Mr. Aaron Grondin www.buildpointusa.com
Powers Brand Communications LLC Conshohocken, PA
Contact Vince Powers www.powersbc.com
Woven Indianapolis, IN
Contact Joe Montgomery www.startwoven.com
Visa to America, Inc. Agoura Hills, CA
Contact Bob Babanian www.E2visatoamerica.com
Korn Ferry Los Angeles, CA Contact Erik Kessinger www.kornferry.com
Babson College Babson Park, MA Contact Ab Igram www.babson.edu/franchise-entrepreneurship-institute
Wisetack San Francisco, CA
Contact Ms. Samantha Freedman www.wisetack.com
Howard & Howard PLLC Las Vegas, NV
Contact Mr. Matthew J. Kreutzer www.howardandhoward.com
Perceptionist, Inc. Westerville, OH
Contact Mr. Scott Mackenzie www.perceptionist.com