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FRANCHISE UPDATE

Franchise update BUSINESS INTELLIGENCE FOR

GROWING

FRANCHISORS

Q3 | 2016

B I G D A T A

Big Data

All aboard the data train!

Growing to 100

Buffalo Wings & Rings CEO Nader Masadeh is a servant leader

Tropical Smoothie CEO Mike Rotondo is relying on big data to manage the brand’s rapid growth

CEO Profile

Ashley Morris liked Capriotti’s so much he bought the brand!

In with the New!

Cousins Subs reboots for future growth

E 21

SEE PAG

FRANCHISE

ISSUE III 2016

LEADERSHIP& DEVELOPMENT

CONFERENCE S E P T E M B E R 2 8 - 3 0 , 2 016

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BUSINESS INTELLIGENCE FOR

GROWING

FRANCHISORS

Q3 | 2016

4 From the Editor’s Desk Yes, big data is a big deal

Leadership 6 8 CEO Profile: Nader Masadeh, Buffalo Wings & Rings “How many opportunities have I provided for improvement in the lives of others?” 14 CEO Profile: Ashley Morris, Capriotti’s Sandwich Shop He liked the sandwiches so much he bought the entire brand! 16 Anatomy of a Brand Cousins Subs, founded in 1972, reboots for the future 18 Minimum Wage A view from the trenches by Michael Seid 21 Franchise Leadership & Development Conference Start planning now for September!

Consumer Marketing 42 46 Feature: Big Data How brands are using data to engage customers 52 Franchise Consumer Marketing Conference A look back at this year’s big event 57 CMO Q&A Jon Quinn brings a broad perspective to Charleys Philly Steaks 60 CMO Roundtable “As the role of big data in strategic market planning grows, how does it affect your long-term marketing plans, forecasting, efficiency/ROI of your media spend, or other parts of your marketing?” 61 Social Media 3 lessons in customer behavior from Snapchat 62 Customer Service 6 things to create a “Can’t live without it!” brand

Growing Your System 64 66 Feature: Big Data We asked 4 brands for their take on this rapidly growing resource 70 Challenge the Pros “How do you analyze, integrate, and apply key customer data in your franchise recruiting and development efforts?” 71 Sales Smarts Franchise development must adapt to the big data era 72 Multi-Unit Franchising Conference Recap Jim Collins, Joe Theismann star 78 Supplier Spotlight Scorpion provides online marketing strategies and tactics 80 Market Trends Defining and defending the franchise business model 82 International Big data practices around the world 84 It’s Closing Time Stop selling, start bonding: connecting with today’s buyers 2

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Fromtheeditor’sdesk BY KERRY PIPES

Franchise update|Q3 CHAIRMAN Gary Gardner CEO Therese Thilgen

Big Data, Big Deal? (Yes)

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t’s no secret that “big data” has become big business. The proliferation of measurable, actionable information is changing the way franchise brands do business—with customers, with franchisees, and at corporate.

At our Franchise Consumer Marketing Conference this summer, I was holed up

in a small meeting room with a videographer, a greenscreen, and a list of questions. We were recording some interviews with top CMOs to use on our website. Doug Koegeboehn, Wienerschnitzel’s CMO, was regaling me with savvy marketing advice

EXECUTIVE VICE PRESIDENT Diane Phibbs VICE PRESIDENT BUSINESS DEVELOPMENT Barbara Yelmene BUSINESS DEVELOPMENT EXECUTIVES Jeff Katis Judy Reichman EXECUTIVE EDITOR Kerry Pipes MANAGING EDITOR Eddy Goldberg CREATIVE DIRECTOR Peter Tucker

as I asked him about everything from balancing media spending to content market-

DIRECTOR OF TECHNOLOGY Benjamin Foley

ing to the many challenges marketers face today.

WEB DEVELOPER Don Rush

But it was when I queried him about “big data” that he caused me to stop and ponder. “I’m mixed on big data,” he began. “I love data that matters, but just data does nothing for me—insights and analysis do everything for me.” And therein lies the key to big data. Franchisors are quickly passing the giddy stage of collecting seemingly unlimited data (the “firehose”) and are realizing that it’s all meaningless unless they can properly interpret and use it. Good data can provide brands with an edge by providing them with real-time information from franchisee locations, assisting in strategic business decisions, boosting revenue, and reducing costs. Big data was a hot topic throughout the conference—and will continue to be for some time as technology evolves from collection to analysis to the ability to deliver actionable intelligence for everything from long-term strategies to site selection to LTOs to franchisee recruitment. Because of big data’s growing relevance and importance, we’ve focused much of this issue around the topic.

WEB PRODUCTION ASSISTANT Esther Foley TECHNOLOGY PRODUCTION ASSISTANT Juliana Foley SENIOR SALES, EVENT & OPERATIONS SUPPORT MANAGER Sharon Wilkinson SENIOR PROJECT MANAGER, MEDIA AND BUSINESS DEVELOPMENT Christa Pulling MARKETING ASSISTANT, SPEAKER LIAISON Katy Geller FRANCHISEE LIAISON, SUPPORT COORDINATOR Leticia Pascal CREATIVE MANAGER Kevin Waterman PRODUCTION DESIGNER Phi Le VIDEO PRODUCTION MANAGER Wesley Deimling

Dry Cleaners’ Director of IT and Analytics Terry Phillips discussed big data’s im-

CONTRIBUTING EDITORS Jim Bender John DiJulius William Edwards Darrell Johnson Steve Olson Adam Pierno

portance—and its challenges. Jersey Mike’s has been hard at work leveraging digital

CONTRIBUTING WRITER Helen Bond

data from multiple sources, but Hope says there are hurdles related to the availability

ADVERTISING AND EDITORIAL OFFICES Franchise Update Media 6489 Camden Avenue, Suite 204 San Jose, CA 95120 Telephone: 408-402-5681 Fax: 408-402-5738

In our main feature story, executives like Jersey Mike’s CMO Rich Hope and Zips

of so much information. “The ability to analyze and effectively use that data will be the challenge going forward,” he says. At Zips, Phillips spent the last year hitting the road to meet with franchisees so he could create a cloud-based information system that focuses on customer retention. One insight he came away with is that franchisees knew exactly how many new customers they were attracting each week, but they had no idea how many they were losing. Big data is a big deal, and the brands that are able to collect and analyze the right data at the right time in the right way will most certainly have an edge over those who lag behind. n

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EXECUTIVE VP OPERATIONS Sue Logan

SEND ARTICLE INQUIRIES TO: editorial@fumgmail.com Franchise UPDATE magazine is published four times annually. Annual subscription rate is $39.95 (U.S.) SUBSCRIPTIONS sharonw@franchiseupdatemedia.com or call 408-402-5681 REPRINTS Foster Printing at 800-382-0808 www.fosterprinting.com

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Leadership FRANCHISE LEADERSHIP AND MANAGEMENT

8 CEO Profile: Nader Masadeh, Buffalo Wings & Rings “How many opportunities have I provided for improvement in the lives of others?”

14 CEO Profile: Ashley Morris, Capriotti’s Sandwich Shop He liked the sandwiches so much he bought the entire brand!

16 Anatomy of a Brand

Cousins Subs, founded in 1972, reboots for the future

18 Minimum Wage

A view from the trenches by Michael Seid

21 Franchise Leadership & Development Conference Start planning now for September!

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ceoprofile

BY KERRY PIPES

SERVANT LEADER Building a company, one person at a time

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ader Masadeh didn’t like what he saw at one of his franchise locations when he was featured on CBS television’s “Undercover Boss” a few months ago. So the Buffalo Wings & Rings president and CEO promptly stepped out of his disguise to handle the problem. “I will not allow anybody to be bullied,” he told a kitchen manager during the episode. In fact, he encouraged the local franchise owner to terminate the kitchen employee over things he had said to employees. That’s just part of who Masadeh is. Masadeh was just 14 when his family moved from Jordan to the United States in search of better opportunities. The family settled in the Cincinnati area and began making the adjustment to life in their new country. As a young man, he got his first taste of franchising at a Burger King, washing dishes. He worked alongside his father in restaurants for years before the two bought into the Buffalo Wings & Rings franchise in 2004. A year later, Masadeh and some partners bought out the franchise concept. They’ve spent more than a decade working together to develop a fast-growing, “club level” sports restaurant offering a chef-inspired menu with unique differentiators like serving food on real china plates instead of the paper plates used by competitors. His servant-leadership style is authentic and effective. He’s even taken the brand back to his homeland by opening locations in Jordan, as well as in the UAE’s Dubai and Abu Dhabi. The company currently has 67 locations worldwide. For the past two-and-a-half years, serving as CEO, Masadeh has overseen a new NAME: Nader Masadeh TITLE: CEO, president COMPANY: Buffalo Wings & Rings UNITS: 67 AGE: 43 YEARS IN FRANCHISING: 20-plus YEARS IN CURRENT POSITION: 2.5

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ceoprofile design for the company’s stores, featuring a sleeker design and family-friendly atmosphere. “We want to create a new experience for consumers who want the sports experience, but don’t want it in a sports bar,” he says. “It’s not the traditional sports bar—the dark, masculine, fried food kind of concept.” Providing great quality food, a unique restaurant atmosphere, building camaraderie in the corporate office, and fully supporting franchisees will remain a focus for Masadeh who says, “That will continue to be our goal as we push toward reaching 100 units.”

Leadership What is your role as CEO? To me, being the CEO is about hiring the right talent and making sure they have all the tools needed to find success both personally and for the brand. I’m constantly working to find ways to continue to challenge the team. It’s my job and responsibility to make sure that our culture is strong and communicated clearly throughout the system, while maintaining the strong brand attributes that set us apart from our competition. I come into work every day hoping to lead by example, manage the problems that arise, and instill the same passion for the brand that motivates me in all of our team members. Describe your leadership style. It is very much tied to servant leadership. I make sure that the role of CEO is not a selfserving title. You know how you can tell a bad company from the outside? When you pull up to the door and the first parking spot has the owner’s name on it. I believe in leading by example and by setting your team up for success. It’s important to lay out a clear pathway for success, and then to guide your team along that path. My style is more about helping people achieve their goals or objectives. It’s working hard to guide my team to wins rather than staying in a bubble and looking out only for myself. I think that’s a recipe for success that works in any leadership position within an organization or team. What has inspired your leadership style? I try to take pieces from every leader I meet, and find new motivation in those whose leadership I respect and

“I come into work every day hoping to lead by example, manage the problems that arise, and instill the same passion for the brand that motivates me in all of our team members.” admire. I’ve always been inspired by a variety of different approaches to leadership through reading about innovative ways of guiding companies. I had a mentor when I first took on the CEO role with Buffalo Wings & Rings who was the retired CEO and chairman of LaRosa’s Family Pizzeria, a hugely successful legacy brand in our home city of Cincinnati. I learned so much about servant leadership from him, and have been able to adopt much of that style to my role as CEO. What is your biggest leadership challenge? Constantly looking for ways to create challenges and opportunities for the people on my team. An effective leader hires great people and then looks for ways to help them continue to develop and improve themselves. So I’m constantly looking to create challenging opportunities to give them the chance to shine, and to maintain the passion and excitement to drive the brand forward. How do you transmit your culture from your office to front-line employees? That’s another one of the biggest challenges we face in leadership. You’re only one person, so you just need to take it one person at a time. I have regular face-to-face meetings and check-ins with my executive management staff to maintain a positive relationship and an open line of communication. Beyond the corporate team, I have a variety of ways to maximize the time I can get in front of those who serve throughout the system. Our annual franchise conference

is a great way to have great conversations with the franchise owners who are truly the backbone of the brand—and find out what’s working, what’s not, and how I can use my role and our resources to best lay out a plan for them to achieve the highest level of success. We’ve also invested a lot of time and money into technology and the digital space to increase our visibility with franchisees and employees at our locations across the U.S. We have produced videos to communicate the brand message, as well as consistently updating our “My Buffalo” platform with news and information to keep all of our restaurants in the loop. Any chance I get to talk about the culture and the brand, I’m all over it! It’s one of my favorite elements of being the CEO. I never miss an opportunity to instill the culture and values of Buffalo Wings & Rings, whether it’s a multi-unit franchise owner, a cook in one of our restaurants, a vendor, or a supplier. Talk, talk, talk. That’s the best way to make sure that the culture reaches every level of the system. Where is the best place to prepare for leadership: an MBA school or OTJ? I personally believe that you need a combination of both to be a fully rounded leader. You can’t lead with just education, or with just experience. It has to be both. You need the intellectual training and schooling side, but you also need the trial-and-error on the job. After you earn your degree, your experience is going to be vastly different from those you graduate with—different industries, different companies, different goals, different regulations. So you need that experience piece to really thrive. The learning and the education works as your base. I truly believe you should constantly be a student in business and soak in as much new knowledge as you go, but you have to take that learning and adjust it to your own personal style. At the end of the day, they are both equally important. Are tough decisions best taken by one person? How do you make tough decisions? Tough decisions are never best made by one person. Never. One person can never be objective enough to make tough decisions. I meet with the executive team on any decision I feel will have a significant impact on the system, and when we meet, majority rules. If it’s evenly divided, then it’s up to me to make the decision and

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break the tie. But as a leader, you hire the very best people and then respect their opinions. You can’t be the absolute expert on every nook and cranny of the business. Do you want to be liked or respected? Respected. It’s not a popularity contest. I want to be respected for what I stand for and what I give everybody in the Buffalo Wings & Rings family. It’s nice to be liked, but when you earn the respect of your team then you can really make a difference, and that goes so much further when you’re leading people and helping them achieve a better life for themselves and their families. Advice to CEO wannabes: The CEO role is not about yourself, it’s about your people. You have to think of them first because people are not going to follow you until you show them that you care. Until you gain their respect, they will never follow you as a leader.

Management Describe your management style: I am clear about goals, and I manage by tracking goals and metrics. If those goals are achieved, great. But if not, then I turn into more of an advisor to find out how to meet those goals. Communication is key in both success and in finding the opportunity in failure. I’m very clear with my team about what I expect and the type of execution we need to grow. Then it’s up to me to determine if we are executing at the level necessary to achieve those goals. If we don’t, or we are behind on the execution needed, then I have to take a look at how I can set my team up for a better chance at success. What does your management team look like? We have a diverse team with a variety of different backgrounds, ages, and genders. It’s important to keep a high level of diversity and varied backgrounds on your corporate team because it provides a fuller picture that reflects the guests at our restaurants. We’ve made a conscious effort to elevate the brand and make it more accessible to women, families, and other people that the typical “man cave” sports bars ignore. So we’ve created a “club level” sports restaurant experience. Catering to that broader crowd requires input from people with a variety of backgrounds. It gives me the diverse thinking to make

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“The CEO role is not about yourself, it’s about your people. You have to think of them first because people are not going to follow you until you show them that you care.” fully informed decisions that will benefit the brand and our franchisees. With our management team, we can come up with the best alternative solutions to any problem. How does your management team help you lead? My team provides me with a venue for consistent and clear dialogue, which allows me to help resolve challenges to the company. By taking our values and culture and instilling them into our team, we’ve established a common ground to approach all problems that may arise. I have a team in place that I respect and feel supports the best interests of the brand and our franchisees. Having a management team I trust helps when I have to approach tricky issues in the system or make any tougher decisions. Favorite management gurus/books? Jim Collins is a favorite. I always pull valuable insight from each of his books. I’m almost finished with Good To Great and it’s very inspiring. I also enjoy books by Dale Carnegie, such as How To Win Friends and Influence People, and John Maxwell, especially The 21 Indispensable Qualities of a Leader. Another favorite is Turn the Ship Around! by David Marquet. What makes you say, “Yes, now that’s why I do what I do!”? I am inspired any time I see a team member who has gone through a personal development moment. I take pride in seeing somebody else accomplish a goal and the satisfaction that comes from the achievement. When I feel like I’ve influenced or changed someone’s life, that’s my greatest inspiration.

Personal What time do you like to be at your desk? At 9:30 a.m., but I like to do a little bit of work at home before I come into the office. I have a specific schedule that I try to maintain, but I leave flexibility throughout the day to leave the office for a variety of activities and conversations to keep things fresh. Exercise in the morning? Wine with lunch? I will exercise in the morning before I come to work and I still play soccer on the weekends. I don’t drink with lunch—drinks come at the end of the day, after the work is done. Do you socialize with your team after work/outside the office? I’ll socialize with the team outside of the office on rare occasions; it’s not on a regular basis. We’ll have the occasional happy hour, business dinner, or golf outing. But it’s important not to overdo it, and to allow everyone to keep the work-life balance strong. Last two books read: I’m finishing up Good to Great, and just before that I finished Turn the Ship Around! What technology do you take on the road? My iPhone is always with me. I can do almost everything with it. I will also carry my laptop with me sometimes for the end of the night at the hotel if I need some more robust work to be done. How do you relax/balance life and work? I spend time with my family and really like being an uncle to my nieces and nephews. I enjoy watching movies at the end of the night—non-thinking movies where I can just turn the brain off for a bit to recharge and escape for a bit. I play soccer and occasional golf too. Favorite vacation destination: I absolutely love the beach. I like the clear water beaches. The Caribbean islands are my favorite. Favorite occasions to send employees notes: I make sure to send notes on birthdays and for work anniversaries. Favorite company product/service: Apple and the iPhone. What they’ve achieved and how they continue to innovate is outstanding.

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Bottom Line What are your long-term goals for the company? We project that we will reach 123 locations by 2021. We are continuing to push toward that goal and would like to surpass 120 units well before the end of the decade—but we want to expand with quality franchise prospects with restaurant experience and an understanding of how to scale to grow the brand with multiple units in key markets. We’ve enjoyed 20 consecutive quarters of positive same store sales growth, and that’s a streak we want to continue. We’ve also seen 13 percent average unit growth year-over-year for 8 years, so that’s an area where we want to continue. We have several franchisees who came into our system with only one location who are opening their second, third, and even fourth locations now, and we want to continue to give our franchisees the tools to expand their footprint and open more successful restaurants. We are also planning to keep looking for ways to invest in the communities we serve with more outreach programs, charity involvement, and spread the “Buffalove” across the country. We’ve made great strides in our effort to elevate all levels of the brand to create a truly “club level” sports restaurant experience, but there’s still more we can do to set ourselves apart from others in the space. We want to be the best, and we want to be a household name in even more markets in the U.S. How has the economy changed your goals for your company? When the economy went down, we used it as an opportunity to take a pause and focus on our brand. We created the new G3 (Generation Three) model design, which has significantly enhanced the atmosphere and experience in our restaurants. We refined the menu and took the time to truly elevate our offerings beyond the typical sports restaurant fare. We took the economy’s dip as an opportunity to invest in our brand. We knew it would turn around eventually, and we wanted to be prepared with the very best overall experience to grow and expand when people were spending money again. It didn’t affect our goals too much—we basically just hit the pause button, which allowed us to take a closer look at our brand and product, and in the past few years we’ve been able to grow far beyond what we would have been able to without that pause.

“To me, success is how many people’s lives I’ve been able to affect and change. How many opportunities have I provided for improvement in the lives of others?” Where can capital be found these days? For a company like ours, it’s not an issue. We’re conservative and healthy. From what I understand, it’s still difficult for single-unit operators out there, though. How do you measure success? To me, success is how many people’s lives I’ve been able to affect and change. How many opportunities have I provided for improvement in the lives of others? I generally try to focus on people as a measuring stick for my own success. What has been your greatest success? Aligning myself with the right people in my career and in our current business structure. From my partners in the ownership team to the employees who work throughout

the system and the vendors and suppliers who help us continue to improve on our success, I’ve surrounded myself with the very best in the industry. Any regrets? As a CEO, you always want to be bigger, sell more, and open more locations. We were able to really redefine the sports restaurant experience and elevate our brand in the last 10 years. So I guess, if anything, I wish we could have gotten to that point even earlier. What can we expect from your company in the next 12 to 18 months? We have a lot of new restaurants currently in construction mode that will be opening in the next year. So we are extremely excited about opening a ton of new restaurants across the country, specifically in new markets that haven’t gotten to experience Buffalo Wings & Rings yet. We are continuing to focus on the things that differentiate us from others in our space as we work to create a “club level” sports restaurant experience. We are constantly looking to elevate and innovate with the menu, so there will be new LTOs and menu items coming. We are using technology to track and improve in all areas of the restaurant experience. We are finding new and exciting ways to reach our fans through marketing and other outreach methods. We are really looking at as many ways as possible to support our franchisees and help them find success. That will continue to be our goal as we push toward reaching 100 units. n

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ceoprofile

BY KERRY PIPES

THEY BOUGHT THE BRAND! Two Capriotti’s franchisees now own the company

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shley Morris and childhood friend Jason Smylie were not afraid to take on the world when they graduated from college in their early 20s. While attending the University of Nevada, Las Vegas (UNLV) both had been such raving fans of Capriotti’s Sandwich Shop that they broke an apartment lease to move closer to a store. Morris began as a financial advisor at Wells Fargo and Smylie as a software engineer at Bechtel Nevada before they purchased a Capriotti’s in 2004. Four years later, they assembled an investor group and bought the whole company from Lois and Alan Margolet, who founded Capriotti’s 40 years ago in Wilmington, Del. Today, Morris is CEO and Smylie is president—and that youthful passion, which continues today, is one of the cornerstones of their success. Morris says his experience on both sides of the franchise fence has given him a balanced perspective of both the franchising model and the Capriotti’s system. His own background as a franchisee provides “street cred” with current franchisees as well as with prospects, and is a powerful advantage as he leads the brand. To gain insights and buy-in across the system, Morris relies on meetings, testing, and focus groups with franchisees. He’s used that approach to make changes with existing systems and products. And because franchisees know where he’s coming from, he’s able to implement change with their approval and support. Combining a buyin approach with franchisees, technology to accelerate both productivity and profit, and training tools that help squeeze every NAME: Ashley Morris TITLE: President, CEO COMPANY: Capriotti’s Sandwich Shop UNITS: 106 AGE: 36 FAMILY: Married with 2 boys, 5 and 3

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dollar of profitability possible from each store has paid off in increased quality and efficiencies across the system—good for both franchisor and franchisees. Of course, Morris has faced his challenges—notably when qualified candidates dried up for a time in the late 2000s—but the numbers have been looking positive lately. Currently, the brand has 106 units with 15 more in the pipeline, and Morris hopes to have a total of 250 units open by 2020. He sees both the brand and the economy motoring along at a healthy clip these days. “There’s access to capital markets now,” he says. “You can go into a bank and borrow to open and run a business. For a long time you couldn’t do that.” As for the crowded sandwich market space, Morris believes Capriotti’s will continue to differentiate itself with the very thing he fell in love with in the first place: the food. “The food is the difference,” he says. “It’s what we do with our product. We operate in a niche. We are the better sub sandwich.”

Leadership What is your role as CEO? To be the visionary of the company first and foremost. In addition, I am involved in company strategy, setting the vision and mission, big decisions and ideas, managing large relationships, and R&D. Describe your leadership style. I lead by example and make sure to incorporate lots of fun along the way! My focus is constantly trying to simplify the organization, and to delegate to the greatest team in the industry! What has inspired your leadership style? The book Traction by Gino Wickman and working for people where I didn’t respect their leadership style. What is your biggest leadership challenge? Making the hard people decisions. How do you transmit your culture from

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ceoprofile your office to front-line employees? First off, have your values all over the place— on office walls and in stores. Hire people who share those values. Be genuine and passionate for your business and others will follow your lead. It starts with you. Where is the best place to prepare for leadership: an MBA school or OTJ? I have found that reading books from the great leaders you admire will best prepare you. Are tough decisions best taken by one person? How do you make tough decisions? I think having a sounding board like a board or group of mentors is vital to helping think through the really tough decisions. At the end of the day you must make them and not be afraid to make a wrong decision. You will make many wrong decisions along the way. Do you want to be liked or respected? I don’t have a need to be liked or respected. However, I have found that people do like and respect me, which is helpful to the organization. They won’t work for you unless they do. Advice to CEO wannabes: The job requires a very specific personality. Before you decide you want that job, really do some deep learning on yourself to make sure you truly possess the personality. If you don’t, it’s a recipe for disaster.

Management Describe your management style: I’m data driven. I don’t micromanage. Rather, I do my best to inspire my team to be passionate and do their best work. What does your management team look like? We have, including myself, seven members of the senior management team: CEO, president, SVP finance, SVP development, VP operations, VP supply chain, and VP marketing. How does your management team help you lead? We have a culture where group thinking is always encouraged. We also spend 90 minutes per week in a formal meeting where solving issues is a priority among the leadership team. Favorite management gurus/books?

“I lead by example. My focus is constantly trying to simplify the organization, and to delegate to the greatest team in the industry!” I love former Yum! CEO David Novak’s The Accidental CEO; former GE CEO Jack Welch’s Winning; Gino Wickman’s Traction, Get a Grip, and Rocket Fuel; and Good to Great by Jim Collins. What makes you say, “Yes, now that’s why I do what I do!”? When a franchisee opens a restaurant that blows the doors off the sales average and becomes a successful business owner and improves their personal life.

Personal What time do you like to be at your desk? At scheduled times, and the last thing before I leave the office. Exercise in the morning? Wine with lunch? Exercise 6 a.m. to 7 a.m. Monday to Friday. Beer or vodka on Friday or Saturday nights. Possibly on the golf course! Do you socialize with your team after work/outside the office? The president of the company is my best friend so we see each other all the time. I try to do things on a monthly basis with members of the team. A lot of our team do get together on a weekly basis. I am just usually tied up. Last two books read: Good to Great (usually once per year) and The Martian. What technology do you take on the road? Laptop and iPhone. How do you relax/balance life and work? I have 2 young boys, 5 and 3, so outside of work I spend time with them. While it’s not relaxing all the time, it’s my favorite thing to do. I also plan four fun

trips each year, two with only my wife and me, and two with the whole family. Favorite vacation destination: Too hard to pick a favorite, but anywhere there is a beach and sand volleyball. Favorite occasions to send employees notes: Anniversaries, birthdays, when someone wows me, and holidays. Favorite company product/service: At Capriotti’s, the Cheese Steak. If you mean favorite other than Capriotti’s, the Apple iPhone.

Bottom Line What are your long-term goals for the company? 500 profitable stores all executing our uncompromising standards of quality and service. How has the economy changed your goals for your company? It hasn’t. Where can capital be found these days? Capital is everywhere today. Everyone is chasing yield. There are so many investor groups, private equity groups, and personal investors looking for return. Banks are still good, but always the strictest. How do you measure success? I try to only look 90 to 180 days out at a time, and if we are accomplishing our list of quarterly initiatives that we set out for the leadership team, then we are successful. We also use a weekly scorecard to measure the big metrics. When that scorecard is all green, life is good. What has been your greatest success? My ability to achieve a positive, happy mindset throughout my day. Life is not the long-term destination, it’s the daily journey. Any regrets? Not so much a regret, but if I had a do-over, I wish I would have spent more time focusing on learning the best corporate structure for the organization 8 years ago, because now we are doing the work. If we had done it back then, we might be miles ahead of where we are now. What can we expect from your company in the next 12 to 18 months? 75 new locations sold, 20 new locations opened. n

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ANATOMY OF A BRAND BY CHRISTINE SPECHT

IN WITH THE NEW! Cousins Subs reboots for future growth

T

he fast casual space is one that continuously evolves to meet consumer demands. From restaurant design to ordering methods and digital advancements both in-store and online, brands are continually undergoing changes to keep their dynamic guest base happy… and full. We at Cousins Subs are no exception. But before I introduce you to the reinvented Cousins Subs, I must first set the stage as to how we got here. Who we are For those not familiar with Cousins Subs, our journey began in 1972 when my father Bill Specht and his cousin Jim Sheppard brought their favorite style of sub sandwich from the East Coast to their new hometown of Milwaukee. Setting out to serve “Better Bread. Better Subs.” they began a legacy of meticulously crafting the finest sandwiches possible. Driven by a belief that “there is no substitute for quality,” they used bread baked daily, ingredients sliced deli fresh, and grilled subs made to order—a cuisine philosophy we are proudly known for today.

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Setting the stage for change Now that I’ve introduced you to our Midwest sub shop, let’s talk about its reinvention. In May, we announced that we are rolling out a streamlined look and feel across all of our

restaurants as we seek to expand our footprint further into the Midwest. This will be accomplished through a new in-store and exterior design concept, remodeling of all existing locations, and rebranding of key brand attributes. However, the road to a revitalized Cousins Subs has been years in the making, and the journey did not come without its hurdles. We first had to take a step back to ask ourselves, “Why are we doing this?” The

answer? Because we “Believe in Better” through the continual improvement in everything we do. That is our mission at Cousins Subs. We believe our guests deserve a better product, served in a better environment, by team members who genuinely care. The idea that we are continually improving is exciting because it means that tomorrow will be better than today, and that only means good things for our guests. So with that in mind, for the last few years we embarked on a new journey that started with peeling back the onion and evaluating every part of our concept. We reevaluated and adjusted not only to remain relevant in a sea of competition, but to further communicate to guests our vision and values. Along the way, like many others in our industry, we hit a roadblock as we felt the impact of the 2008–2012 economic decline. As a result, our leadership team has taken a calculated and thoughtful approach to our rebranding and growth strategy. We evaluated all upcoming franchise agreements and corporate locations, closed underperforming and noncompliant stores, determined what

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ANATOMY OF A BRAND

Christine Specht units would be viable sites for the next 10 years, and worked with our franchise partners to secure their commitment to reinvest in both the remodel of their locations and other strategic initiatives. By taking the time to efficiently evaluate what changes had to be implemented, and by taking the necessary steps, we were able to strengthen our unit-level economics, create a stronger core of franchisee partners, and solidify our future in existing markets by positioning ourselves as an appealing investment to future multi-unit franchisee prospects. Welcome to the new Cousins Legacy brands can often lack one key ingredient—consistency—and our brand fit this category. To address this, we set out to rebrand starting with updating our logo, packaging, and uniforms to better communicate who Cousins Subs is to our guests. The new logo package consists of a series of marks, which allows more flexibility and features the return of the brand’s original iconic logo of the two original cousins. Packaging concepts, which are still in development, will offer a minimalist and crisp design, allowing for versatility in logo use, and uniforms will take a more casual approach featuring an industrial, old-school sub shop look.

A significant phase of our rebranding efforts includes remodeling all existing restaurants to unify the brand in look and feel. In response to consumer demands, we created a modern, inviting environment that delivers on our unique identity. This is achieved through showcasing our history, Milwaukee roots, personality, values, and cuisine philosophy in the new “Milwaukee Sub Shop” restaurant design. Every element of our new design reflects our Midwestern roots by incorporating timeless trend designs, such as natural materials balanced by solid surfaces, stone walls, wood floors, earth-toned color palettes, industrial finishes, and the original Cousins Subs logo. Aside from our consistent product across all our locations, the remodels are our most obvious pursuit at creating system-wide consistency. As the fast casual space continues to evolve, consumer trends indicate that guests favor interaction with frontline staff while they customize their sub and observe their order being made. As a result, we’ve created the “Project Henry” make line ordering process—a nod to Henry Ford’s assembly line. All new Cousins Subs restaurants outside of Wisconsin will feature both the Milwaukee Sub Shop design and Project Henry make line. Existing locations due for remodel upon renewal and any new Wisconsin development will all feature the new design, but only select locations will test the Project Henry make line at this time. We’ve also completed a new exterior design package that will be rolled out and carries through the earth-toned color palette, wood features, and industrial finishes—reflective of what guests will experience once inside the restaurant, further establishing consistency. Overall, through the rebrand our goal is to showcase to guests how we’ve made

improvements in our store environment, and how we’re better communicating our story and what we value. Each facet of our rebranding and remodeling efforts has set the stage for expansion into additional markets—both corporate- and franchise-owned.

Our vow I’m excited about the future of Cousins Subs and the growth opportunities ahead. I absolutely believe we have the best sub sandwich in the market, and that more people need to enjoy what Milwaukeeans have enjoyed for more than 40 years. We will bring our brand to new regions and embed ourselves in new communities. We will continue to set the benchmark for what a high-quality sub should taste like, and give our new guests a taste of “better” and everything that stands for. We will continue to stay focused on our local communities and partner on initiatives that are important to them. As the daughter of Bill Specht, founder and chairman, I couldn’t be more connected or proud of the brand and what we’ve achieved. n Christine Specht is president and CEO of Cousins Subs.

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LEADERSHIP

Minimum wage The Fight Against $15 A view from the trenches BY MICHAEL SEID

C

onnecticut is a remarkable place to live and raise a family. We sit between New York, Rhode Island, and Massachusetts and are surrounded with extraordinary cultural opportunities, world-class educational institutions, decent roads, railways, and great airports. We should be the perfect place to attract new business and should be leading the nation in job creation. Connecticut is as blue a state as there can be. We are over taxed, over regulated, and have been legislatively micromanaged into a ditch. GE and the insurance industry are relocating, and the only manufacturers left are defense contractors. We are near the bottom in the nation in private sector job creation and economic investment. Connecticut attempted to fix its budget this past year by taxing employers $1 per employee hour if they did not pay a super-premium minimum wage of $15—despite the fact that the state’s current minimum wage is $9.60. Legislation was also proposed to mandate a minimum work week in some industries. Both failed to pass. The new tax on job creators was to offset the increased social services budget stemming from unemployment and underemployment. The state was exempted from paying the higher wage under the theory that it would hire some of the private sector workers who lost their jobs in order to better provide social services to the folks who lost their jobs because of the new tax. Even in California that logic would make Nancy Pelosi blush. Connecticut has become the most creative anti-business state in the nation. Governor Malloy has begun to lay off 2,500 state workers and the SEIU is outraged. It’s a 1.3 percent decrease in the state’s 187,000 FTE employees, and we will be left with only 53.3 public sector employees instead of 54 for every 1,000 state residents. Imagine SEIU’s outrage

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if he had gone to 52, or even 35. Since 2014, the U.S. has added approximately 400,000 retail jobs while Connecticut lost 1,400 retail jobs since raising its minimum wage from $8.25 in 2013 to $9.60 in 2015; and it goes to $10.10 in January. Massachusetts has also lost 2,200 retail jobs since its minimum wage went from $8 in 2014 to $10 this year; and it goes to $11 in 2017. The State of Washington added 5,800 new restaurant jobs while Seattle lost 700 jobs since its minimum wage increase (which discriminated against franchisees). Businesses simply adapted to the increase by creating fewer opportunities to work. Many-faceted problem In 2015 I was appointed to the Connecticut Low Wage Employer Advisory Board. We were legislatively created to look at increasing the minimum wage following the failed attempt to increase the minimum wage from $9.60 to $15.

The board is composed of very talented professionals, mainly drawn from unions, government workers, affiliated lawyers, and two academics. Until very recently I was the sole person representing the interests of business but we have since added two more. That is considered a balanced committee in a blue state. We have had public hearings, and it is impossible not to feel empathy for those who testified. As elsewhere, the need for an increase in earnings for a sizeable portion of our workers, many who are minorities, is serious and must be addressed. It’s really past time to find a sustainable solution, but raising the minimum wage is not one of them. It’s fashionable today to tell hard-working low-wage workers that they should be content with having a minimum wage job as a career designed to support a family. The minimum wage was never intended as a “living wage,” nor was it meant to support a family. While the discussion is not intended to have any racial component, the impact of what we do will likely have a disproportionate impact on minority workers. Compounding the problem is that the companies that actually hire unskilled and minimum wage workers are least able to afford a wage increase today. Consider the average “profit per worker” for the top 25 members of the Fortune 500. Excluding Walmart it is $124,588

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MINIMUM WAGE, continued profit per worker. These are companies primarily in the banking, telecommunications, oil and gas, and technology industries and don’t generally recruit a lot of unskilled, entry-level minimum wage workers. The average profit per worker for the 14 franchisors included in the Fortune 500 is only $5,625. These companies are primarily in the restaurant and hotel industries and are the major employers of minimum wage workers. Even if you transferred 100 percent of their profit per worker directly to the low-wage employee, it still would not be sufficient to achieve a solution, nor would it be sustainable. Without a doubt many low-wage workers are part of the problem that is causing their lack of marketability at higher pay scales because of their lack of education, training, skills, job history, and other factors. An increase in the minimum wage is not going to fix these foundational problems. Raising the minimum wage is not economically viable unless you offset the increased labor cost with a dramatic increase in prices, and that does not work unless you discount the losses in consumer transactions. What will be achieved is fewer new jobs created, fewer existing jobs and hours available, and acceleration of technology to further reduce the need for labor. At best we will be left with higher wages for some and a higher level of permanent unemployment and underemployment for others, resulting in generational poverty. Personal service type labor will not be immune. The TSA will soon be using biometrics to shorten lines at airports, improve security, and reduce staff. We already have fewer airline staff checking us in for flights, and biometrics will soon be used to speed onboarding with fewer staff required. Quick service and fast casual restaurants are already adopting tablets for ordering and payment to reduce counter and wait staff. Nurses and home health care workers are being replaced by telemedicine practices. Hotels are offering discounts if you do not need your rooms serviced daily, and since I received an app it’s been a long time since I checked in at a hotel’s front desk. Technology is replacing workers at a rapid pace. Andy Stern, past president of SEIU, recently said, “I believe that this is not our father’s or our grandfather’s economy, that the 21st century will not be employer-

20

managed. It’s going to be self-managed, because the growth in alternative work relationships—contingent, freelance, gig, whatever you want to call it—is clearly going to increase. Although the economy can grow in terms of GDP and productivity, it no longer means there will be wage growth or job growth, as opposed to the 20th century.” Reasonable discussions can be had regarding regional differences or possibly

“Continuing to attack the private sector for our economic problems needs to stop.” including a different minimum wage for trainees or students. But these are not solutions, only attempts to make a bad situation slightly more politically palatable. Despite what the SEIU may claim, franchisors and franchisees are not joint employers. And even if you brought system profit per worker down to zero it would not be sufficient to solve the problem, nor is it sustainable. It’s merely a back door to union organizing. No easy solution The lack of an acceptable annual income affects too great a percentage of the families in our country, many of them minority workers, and it serves no purpose to reach for short-term, politically attractive solutions that negatively affect long-term objectives. Our significantly constrained governmental and private sector resources further compound the problem. There are no easy solutions but there are a few possible paths to consider. 1) Social services are essential for lowwage workers to survive, and we can’t continue to penalize low-wage workers when they begin to earn more (as we do now). Government should partner with private enterprise, better skilled at operating efficiently, to look at ways to improve the costs and methods for delivering social services. 2) Barriers to job creation need to be removed, including rejecting the fissured economic philosophy advanced by David Weil of the DOL and by the NLRB. We live in a technologically driven economy;

forcing 19th and 20th century labor practices onto a 21st century economy is illogical and destructive. 3) We need to begin helping low-wage workers by investing in training needed for them to gain entry-level jobs and then continue our assistance by helping them advance into careers that pay more. The private sector in franchising is playing its part. It’s now time for the public sector and the unions to help. 4) We need to ensure a quality level of education and measure the performance of schools and teachers as the private sector does with its own workers. We need to increase opportunities for tradespeople through improved training and job counseling in affected communities. This was the historic role played by labor unions until they began to focus their resources into political donations to prop up their failing membership numbers. 5) Unions are a major part of the problem and need to be transformed. They are a protected class as workers are forced to join and pay dues if they want to work for many companies or government agencies. Private sector customers on the other hand can choose where to shop and can even decide to not buy at all. Most union members have never been given the chance to ratify their unions since ratification took place 60 years ago by workers who long ago retired or passed on. Union members should be allowed to annually recertify their unions to restore a balance in the labor industry and force unions to adapt to the needs of their members. The continuation of public sector unions also needs to be examined as public labor costs are crowding out our ability to fund improvements in the economy. Conclusion Continuing to attack the private sector for our economic problems needs to stop. Business is adaptive and will control its labor costs by reducing its need for workers if the minimum wage is increased. We need to instead begin to focus on real, sustainable solutions or we will cause generational poverty. The problem is real and needs to be addressed as a priority. ■ Michael Seid is managing director at MSA Worldwide and a member of the Connecticut Low Wage Employer Board. Contact him at 860-523-4257 or mseid@msaworldwide.com.

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2016

FRANCHISE LEADERSHIP& DEVELOPMENT

CONFERENCE S E P T E M B E R 2 8 - 3 0 , 2 016

INTERCONTINENTAL BUCKHEAD HOTEL â– ATLANTA

y f i l p am ur yo

H T W GRO

nce.com e r e f n o tc n e elopm franchisedev NLD

#FRA

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7/25/16 5:12 PM


Amplify Your Growth Franchising is still the best way to help people become part of the American dream. It is one of the few ways that people can realize their potential by going into business for themselves and continue to grow by adding additional units as well as adding other brands to their portfolio. Regardless of legislative and political winds, there is no other vehicle that offers the same opportunities.

SHELLY SUN 2016 Conference Chairwoman Co-Founder & CEO BRIGHTSTAR CARE

This year’s theme, “Amplify Your Growth” is focused on helping you take your business to the next level. It is about sales and operations working together thereby helping your franchisees be more successful. Obviously, successful franchisees lead to more franchisees because of strong performance and strong validation. Come join more than 200 franchisors at the Franchise Leadership & Development Conference as we share ideas and best practices all focused on amplifying your growth! This is your opportunity to meet with other forward thinkers, share ideas, all in an effort to find the best ways to improve ourselves, our teams, and our brands. There is much to look forward to ranging from the excellent speakers, opportunities to network with your peers in a more intimate environment and listen to directly applicable panels. Attending this year’s conference will allow you to gain valuable information that will immediately help you lead and take your system to new heights. This is one of my favorite conferences and I look forward to it every year. Our people are looking at us to set a vision and help ensure our teams success. My first franchise event ever attended was the 2006 Leadership & Development Conference. It made a huge difference in my life and it is my absolute honor to serve as this year’s Conference Chair. Join me in making this the best event yet, sharing and learning to work smarter to achieve amplified growth. I look forward to seeing you this September in Atlanta at the FLDC.

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2016 FRANCHISE

LEADERSHIP& DEVELOPMENT

CONFERENCE

SEPT.28-30

ATLANTA 7/25/16 5:12 PM


keynote speakers RICH KARLGAARD PUBLISHER FOR FORBES, ECONOMIC & BUSINESS INNOVATION THOUGHT LEADER, ENTREPRENEUR & AUTHOR

Entrepreneur-turned-publisher, columnist, author, television commentator, private investor and board director, Rich Karlgaard offers a unique vantage point on the trends driving the business and investment climates. His insights help audiences see the global marketplace with new eyes. Karlgaard is the publisher of Forbes magazine, where he also writes a biweekly column, Innovation Rules, known for its witty and honest assessment of technology trends and current business issues. He’s a regular panelist on cable news’ most popular business show, Forbes on FOX, and is a frequent contributor to the Wall Street Journal’s op ed page. A successful entrepreneur and past winner of Ernst & Young’s “Entrepreneur of the Year Award,” Karlgaard understands firsthand the difficulties of navigating in today’s business climate and the opportunities available to those who have the courage to reach out for them. His assessment of technology trends, U.S. and global economic forces, and current business and political issues gives audiences solid insights they can use to make better business and investment decisions. Unfailingly gracious, Karlgaard puts forth his insights for others to consider in a way that helps them see the events that are changing their world—especially the impact of Washington politics—on business and innovation. In his book, The Soft Edge: Where Great Companies Find Lasting Success, Karlgaard shares a surprising third element in addition to visionary strategy and superb execution that’s required to gain the competitive advantage. Karlgaard is also the co-author of Team Genius: The New Science of High-Performing Organizations.

SETH MATTISON WORKFORCE STRATEGIST AND MANAGEMENT TRENDSPOTTER

I started formally studying workforce trends and generational dynamics almost 10 years ago but I’ve spent a lifetime learning about how each generation’s story shapes their view of the world and trends impacting our society. I was born on a 4th generation farm in Minnesota where I grew up working alongside my father, my grandfather, and my great grandfather. 3 Generations of men whose experiences ran from WWI, The Stock Market Crash, The Great Depression, WWII, The Cold War, Vietnam, etc. They were history buffs and storytellers and pretty remarkable men to grow up around. Now being a child of the early 80s, I’m just old enough to have been around before mobile devices could be used to entertain/distract children so for me, tractors became classrooms filled with history lessons and stories of past generations. It was here that I was exposed to the idea that each generation has their own unique story. Of course we all have our own individual stories but we’re also a part of a larger cultural story. My mission with our work at FutureSight Labs has always been about understanding and sharing these generational stories to help make sense of the cultural shifts we’re all experiencing both in society as well in our organizations. I personally believe there’s never been a more important time then right now for a conversation about who we are and where we’re going as we charge headlong into this new world of work. We are witnessing the greatest fundamental shift the world has seen in the way we organize, collaborate, connect and contribute since the industrial revolution. For the past decade we’ve looked at what I believe to be some of the most important trends to impact how we build relationships both in the workplace as well in the marketplace, how we lead our teams, how we connect with our colleagues, and how we will ultimately position our organizations to win in the new world of work. We look forward to sharing these insights with you.

REGISTER NOW ONLINE: franchisedevelopmentconference.com OR CALL: 1-800-289-4232 ext 202

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who should attend?

THIS IS THE 18TH YEAR OF THE FRANCHISE LEADERSHIP & DEVELOPMENT CONFERENCE. Over the years, the conference has evolved from a franchise sales focused meeting into the only industry event focused on challenges in franchise development today. Led by our advisory board of some of the industry’s most talented and experienced development executives, the conference is designed for any size brand and multiple levels within an organization: CEOS, PRESIDENTS looking for insight on how to better lead and grow your brand. The CEO Summit is an exclusive event where you can share experiences and learn from your peers. CDOS seeking information to help strengthen and build your team, structure programs to address encroachment and strategic growth, and offer the right value proposition for your brand. FRANCHISE SALES & DEVELOPMENT VICE PRESIDENTS, DIRECTORS: Grow personally and professionally by interacting and learning among peers and brand leaders from throughout the franchise industry. Choose to improve skills in a specific area, or learn something completely different—our extensive agenda touches on all aspects of development. FRANCHISE SALES MANAGERS: Ongoing refinement of skills and strategies will help you grow into a best-in-class sales executive. Focus on the basics of building client relationships for long-term success and growth. Learn new aspects of development to position you for future growth.

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2016 FRANCHISE

COOS: Gain insight into how to work with your partners in franchise development to structure growth programs and position franchisees for success. Take home strategies to help your team play a key role in building the brand while delivering on its promises. IT EXECUTIVES: Technology continues to grow and expand as an effective tool for reaching prospective franchisees and supporting them once they’re in the system. How does technology impact your brand development initiatives? Learn what’s new from a development technology standpoint, and discover how your team can support the franchisee recruitment and onboarding process. CONSUMER MARKETING EXECUTIVES: Franchisee recruitment and lead generation is more about marketing than it ever has been. Learn how to work with your development partners to superstructure a franchisee recruitment program that will attract new franchisees and position your brand for successful, long-term growth. SUPPLIERS: Better understand your CEO, President and Franchise Development customers and what’s important to them, all while showcasing your brand.

LEADERSHIP& DEVELOPMENT

CONFERENCE

SEPT.28-30

ATLANTA 7/25/16 5:12 PM


why attend?

THE FRANCHISE LEADERSHIP & DEVELOPMENT CONFERENCE brings CEOs, Presidents and top development executives together for a powerful two and a half day event that combines the impact of exciting presentations with peer-to-peer problem-solving workshops and roundtables. EXCLUSIVITY: Only franchisors may attend. Network and mingle with your peers while discovering ways to implement and boost overall performance. You’ll engage with franchising’s premier service partners, from technology providers and social media experts to marketing agencies, law firms and more! FRANCHISE DEVELOPMENT FOCUSED AGENDA: This year’s agenda focuses on a variety of franchise development disciplines. From single or multi-unit franchisee recruitment with the right value proposition, to strategic marketing planning and managing encroachment, you’ll gain insight on how to superstructure your brand for optimum growth and market penetration.

TRANSPARENCY: This comprehensive educational networking conference is designed for sharing challenges, finding solutions and improving franchise growth. Access leading sales and development experts, and take away ideas and solutions to encourage growth. ENHANCE SKILLS: Whether you are an experienced executive or are new to franchise sales, you can always improve your skills. Join our “Mastering Sales Fundamentals” workshop to refine your craft and gain more practical learning. EXHIBIT HALL: Our sponsor networking area is filled with product and service providers offering the latest ideas, tools and technology. Don’t miss the opportunity to meet new vendors and learn about their services. You might discover something you didn’t know you needed!

REGISTER NOW ONLINE: franchisedevelopmentconference.com OR CALL: 1-800-289-4232 ext 202

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2015 survey stats* DID YOU KNOW?

50% of franchisors reported referrals have the highest close ratios 48% of all ad dollars went to Internet marketing 19% of franchisors reported sales from social media AD PORTALS AND SEO represent the top source of online recruitment sales FRANCHISORS REPORTED 18% of their applications resulted in sales 71% of franchisors using profiling tools increased the quality of their new franchisees 49% of franchisors have owners in their 20s $97 is the average cost per lead $6,300 is the average cost per sale 89% of multi-unit franchisees reported FPRs as mandatory or important Multi-unit franchisees reported TRADE SHOWS AND PUBLICATIONS as the TOP MEDIA SOURCES for finding new brands *2015-2016 Annual Franchise Development Report, based on a formal survey of 139 franchisors and an additional mystery shopping of 146 franchise brands

2015 attendee stats

FRANCHISORS BY TITLE

franchise by title Real Estate, Communications, Compliance Professionals 7%

258

CEOs 16%

FRANCHISORbyPROFESSIONALS franchise title REPRESENTED

185 BRANDS 77%

OF FRANCHISORS MET SPONSORS THEY INTEND TO DO BUSINESS WITH

Directors & Managers, Franchise Development 39%

89%

CDOs, SVPs Development 30%

86%

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no of units

CATEGORIES Retail Food 10%

Retail Non-Food 18%

Service 40%

Food 32%

OF FRANCHISORS VISITED THE SPONSOR NETWORKING AREA 2 OR MORE TIMES

GROWTH

catagories

CFOs, COOs, CIOs 8%

OF SPONSORS DEVELOPED LEADS

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catagories

no of units

2016 FRANCHISE

LEADERSHIP& DEVELOPMENT

CONFERENCE gross revenue

8-30 revenue SEPT.2gross

ATLANTA

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no of units franchise by title catagories ARE YOU RIDDLED BY PERFORMANCE GAPS

STALLING TODAY’S RECRUITMENT EFFORTS? 34% 53% 85% 72%

of sales staff never returned a qualified prospect’s call-in message did not take a telephone number did not qualify the prospect’s startup time frame catagories of sales staff never called a qualified prospect requesting information from their own website

48% of franchisors did not meet their sales goals 20% of franchisors don’t provide FPRs in their FDDs 70% 52% 51% 40%

don’t mention “franchise available” on their Facebook pages of franchise sites are mobile friendly of internet leads are from smart phones INVESTMENT LEVEL investment have videos on their site Under $50,000 5%

no of unitsNUMBER

Over $1 Million gross revenue

OF UNITS

16%

0 2%

>1,000 18% 501-1,000 9% 250-500 21%

$500,000 $1 Million 15%

<25 9% 26-10 19%

$1 Million$8 Million 13%

101-250 22%

$100,000 $250,000 28%

$250,000 - $500,000 27%

ANNUAL SYSTEM-WIDE REVENUE <$1 Million 1%

gross revenue GROSS

> $100 Million 47%

investment

$50,000 $100,000 9%

$8 Million-$20 Million 9%

$20 Million-$40 Million 8% $40 Million-$60 Million 7% $60 Million-$80 Million 7% $80 Million-$100 Million 8%

REGISTER NOW ONLINE: franchisedevelopmentconference.com OR CALL: 1-800-289-4232 ext 202

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advisory board OUR CONFERENCE ADVISORY BOARD is comprised of some of the brightest and most experienced development executives in the franchise industry. Their leadership and vision for amplified brand growth led to the outstanding content offered this year. CONFERENCE CHAIRWOMAN SHELLY SUN Co-Founder & CEO, BrightStar Care Shelly Sun is the CEO and co-founder of BrightStar Care®, a premium healthcare staffing company providing the full continuum of care, from homecare to supplemental staffing for corporate clients such as nursing homes and physicians. In 2005, BrightStar launched its franchising efforts, becoming the first and only franchising company in the country to specialize in both medical and non-medical care and healthcare staffing. BrightStar Care has grown to over 300 locations nationwide serving over 15,000 families generating over $350 million in system-wide revenue. In addition to leading the strategy for the BrightStar Care®, BrightStar Senior Living & Memory Care, and BrightStar® Technology Group divisions, Shelly is charting the vision for complementary brands and services to help consumers care for their families and homes. Shelly is a Certified Franchise Executive and participates on the International Franchise Association’s (IFA) Board of Directors. Shelly will be Chairperson of the IFA Board of Directors in 2017 and currently holds the position of Vice Chair of the IFA. Shelly was also selected by the IFA as the 2009 Entrepreneur of the Year. BrightStar® was named to First Place in the June 2014 Forbes’ list, and remained amongst the Top 10 on the June 2015 Forbes’ list, for franchises under $150,000 initial investment. BrightStar® was also selected for the Inc. 500/5000 every year 2010-2015. BrightStar® is the only franchise home care brand to receive the Joint Commission’s Enterprise Champion of Quality Award in 2013, 2014, 2015 and 2016. BrightStar was featured on CBS’ Undercover Boss. Shelly also published her first book, Grow Smart, Risk Less – a low-capital path to multiplying your business through franchising, where she discusses her journey as an emerging franchisor through amazing growth, lessons learned and game-changing ideas. ART COLEY President & CEO, Franchise Source Brands International Art Coley got his start in small business ownership at the age of 15 when he opened a hamburger & sno-cone stand in central Texas. After attending the University of Houston, he managed a Barnes & Noble bookstore and was a freelance writer for a popular Houston business magazine. In 1994, he met Bud Hadfield (the founder of ICED & Kwik Kopy) and was inspired to pursue a deep understanding of franchising, sales leadership and the international impact it has on small-business ownership. Since then, he has served as president of a nationwide children’s technology education franchise where the brand had double-digit sales growth, opened a record number of new franchise territories, and was launched in the U.K., Australia, and Canada. With

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a decade of global leadership and sales positions, he has been responsible for driving system-wide revenues and overall business operations for Top 200 franchise brands including a turnaround role in 2012 as the president and CEO for AlphaGraphics. AlphaGraphics is an international print brand, which has nearly 300 locations, more than $280 million in system sales, and is now experiencing significant growth while providing opportunities for its franchisee partners. Art accepted the President and CEO position in May 2015 with Franchise Source Brands International, which owns several brands including: The Entrepreneur’s Source, AdviCoach, and ZorSource. As a forward-thinking speaker, franchise development expert, and in his continuous CEO roles he knows and asserts that “Franchising will lead the charge for economic development for both the United States and the rest of the world.” TIM COURTNEY VP Franchise & Network Development, CruiseOne Tim Courtney is Vice President of Franchise Development at CruiseOne. He is a member of the IFA’s Membership and VetFran committees, as well as Franchise Congress. He has worked in the travel industry for more than 15 years in positions including training and management. In 2006, he joined CruiseOne in a training and education role and helped launch the company’s online learning academy. He joined the franchise development team in 2008 where he quickly immersed himself in the company’s recruitment efforts that led to record results. He is a CFE and speaks at various franchise and travel trade events. STEVE DUNN 2015 CONFERENCE CHAIRMAN SVP Global Development, Denny’s Stephen Dunn, Senior Vice President of Global Development for Denny’s, the nation’s largest full-service family dining restaurant chain, is responsible for overseeing all aspects of global restaurant development for the company. In his more than 25 years of franchise and company development experience in the restaurant and retail industry, he has held executive-level positions with Church’s Chicken, El Pollo Loco, Mr. Gatti’s, and TCBY. He is a sought-after public speaker, and is a panelist on the topic of franchise recruiting and business development. MIKE HAWKINS VP Franchise Development, The Dwyer Group Mike Hawkins is Vice President of Franchising for The Dwyer Group. He joined the company in 1995 as a Franchise Developer before assuming his current role. He plays an active role in the training and management of the franchise development team, while assisting in the selection and awarding of new franchises. In 1971, he invested in the Success Motivation Institute (SMI),

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which specialized in the sales of training and personal development programs for small-business owners, individuals, and companies. In 1975, he joined the central office of SMI and spent 9 years in franchising. In 1984, he moved to the Leadership Management Institute, a sister company of SMI, and became a franchise consultant, training and assisting franchisees in building and growing their franchise business. Previously, he held management roles at E.K. Williams, General Business Services, and All Tune & Lube franchises, to name a few. GRANT KRUETZER Director, Franchise Business Development, Jack in the Box / QDoba Grant Kreutzer, Director, Franchise Business Development for Jack in the Box and Qdoba, develops and manages franchise recruitment programs to attract top multi-unit operators. His 15 years of experience in franchising, business development, branding, and marketing include 10 years of franchise business development in the QSR and fast casual segments, and 5 years leading marketing and sales for a start-up web application firm. His work with national restaurant chains in their franchise expansion efforts employs consultative selling techniques and marketing principles to create franchise brands that differentiate their investment proposition and engage the right franchisees best suited for long-term success. Recent programs include new development incentives and the Jack in the Box “seed” strategy, where new market franchisee growth starts with an acquisition of company-developed restaurants. Jack in the Box has transitioned to become a 76 percent franchised system, up from 25 percent in 2005, with more than 1,100 restaurants franchised to multi-unit operating groups. RICHARD LEIVILLE VP Franchise Development, Floor Coverings International After nearly 25 years at Smoothie King, including more than 15 as Executive Vice President of Franchise Development and Real Estate, Richard Leveille became Vice President of Franchise Development at Floor Coverings International. As EVP, he directed the franchise sales, real estate, and the construction and design departments and served on the Board of Directors. Credited as the first employee of Smoothie King starting in March 1989, he was involved in developing the brand systems and opening more than 650 stores, 130 international and 40 to 50 in non-traditional environments. He earned his CFE designation in 2006. PETE LINDSEY VP Franchising, Sport Clips Pete Lindsey is Vice President of Franchising at Sport Clips. His 19 years in the franchise business includes National Sales Manager for Franchise Development at MBE, a UPS Company (The UPS Store), National Operations Manager at MBE, and Executive Director of Franchise Relations for MBE, where he was responsible for informal dispute resolution, renewals, transfers, customer service, and insurance

compliance. He was also part of the team that offered The UPS Store to MBE franchisees, which culminated in one of the largest rebranding initiatives in history. ERIC LITTLE Chief Development Officer, Right at Home Eric Little has been in franchising for nearly 20 years and has been a member of Right at Home’s executive team since 2008. He is responsible for both domestic and international growth. During his tenure the company has grown to more than 450 locations and achieved system wide sales of over $300 million in 2014. Right at Home recently celebrated its most productive three-year period for franchise sales, opening 165 locations in 2012 – 2014. Eric has been a Certified Franchise Executive (CFE) since 2005 and is a former Overall 1st Place winner of the Franchise Update STAR Award Mystery Shopping competition. He is an active member of the franchise community and enjoys sharing best practices with others in franchising. Prior to Right at Home, Eric worked with Valvoline, AlphaGraphics, and BounceU. LORI MERRALL Director of Franchise Sales & Development, Dessange Group Lori Merrall, recently joined Dessange Group, as the Director of Franchise Sales & Development after spending 5 years with Massage Envy Franchising. Previously, Lori spent five years in the franchise industry at Blimpie and Cold Stone Creamery. Prior to franchising, Lori worked in advertising and sponsorship sales for the Phoenix Coyotes and has spent the bulk of her career in the TV and film industry, primarily in sales, distribution and marketing. SCOTT NICHOLS SVP Development, Charter Fitness Scott Nichols recently joined Charter Fitness. Prior to joining Charter Fitness, Scott was Director, Franchise Business Development for Sears Hometown & Outlet Stores (SHOS), where he was responsible for franchise development of Sears Home Appliance Showroom, Sears Appliance & Hardware stores, and Sears Outlet stores. Since starting with SHOS in March 2011, he sold 194 franchises with a total gain on sale of more than $44 million and nearly $5 million in initial franchisee fees; completed a revamp of its entire development process, including the rollout of a new franchise recruitment website; and heightened the brand’s franchise web presence and improved ease of use for visitors, leading to increased lead generation and deal-closing ratios. He has more than 25 years of director-level franchise development experience in the hotel, QSR, and retail industries, working for such industry icons as Holiday Inn, Sheraton Hotels, Arby’s, Baskin-Robbins, and Dunkin’ Donuts. He also took a leading role in the initial development and rollout of Jimmy John’s franchising program.

REGISTER NOW ONLINE: franchisedevelopmentconference.com OR CALL: 1-800-289-4232 ext 202

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advisory board, continued PAUL PICKETT Chief Development Officer, Wild Birds Unlimited Paul Pickett’s career with Wild Birds Unlimited (WBU) has perfectly combined his love of birds, nature, and people. He joined the WBU team as the first full-time employee in 1989 shortly after graduating with a master’s degree in biology and ornithology from the University of North Dakota. He has more than 25 years of experience in working with potential franchisees as they decide to join the WBU team. He also has managed all site selection and lease negotiation assistance for the brand. JEFF STURGIS Chief Development Officer, McAlister’s Deli Jeff Sturgis has more than 17 years of experience in franchise sales, franchise development, and franchise strategy. As Chief Development Officer for McAlister’s Deli, he is responsible for the strategic planning and execution of all store development, real estate, and franchise sales activities. Before joining McAlister’s, he was the Founder and President of Franchise System Advisors, a consulting and strategic planning firm that worked with franchisors to help them evaluate, develop, and implement successful franchise sales and development strategies. Before that, he spent 3 years as Vice President of Franchise Development for Fantastic Sams Hair Salons, a 1,100-unit chain of full-service hair salons, where he led the franchise sales, real estate, and store development functions. Before that, he spent 4 years as the Regional Vice President of Franchise Sales for Focus Brands, where he was responsible for all U.S. franchise sales activities for Carvel Ice Cream and Cinnabon. He is a frequent speaker at and contributor to franchising events and publications and is a past Board Member of both the IFA Supplier Forum and the New England Franchise Association. JOHN TEZA Former Chief Development Officer, Jersey Mike’s Subs John Teza joined Jersey Mike’s Subs in May 2011 as Chief Development Officer. He oversaw a deliberate growth strategy designed to accelerate the expansion of the brand while maintaining a quality-first approach. In 2014, Jersey Mike’s had record unit growth of 15 percent, opening 69 new restaurants in new and existing markets. In addition, the company awarded 76 new territories, partnering with multi-brand, multi-unit franchisees as well as providing expansion opportunities to existing franchise owners. Started in 1956, Jersey Mike’s has over 1000 restaurants open and under development nationwide, and has a long history of

community involvement and support. His more than 17 years in the franchise and restaurant industries includes serving as President of Janus Brands, a full-service retail and restaurant management/ consulting firm; and a variety of positions at Quiznos, including Executive Vice President of Development, Senior Vice President Non-Traditional, and Senior Vice President Development and Operations. GREG VOJNOVIC 2014 CONFERENCE CHAIRMAN Chief Development Officer, Arby’s Restaurant Group Greg Vojnovic recently joined Arby’s Restaurant Group as Chief Development Officer where he is responsible for franchisee recruitment & sales, franchise development, real estate, construction, design and equipment. Prior to that Greg held the position of Chief Development Officer at Popeyes Louisiana Kitchen, where he was responsible for franchise development, real estate, construction, design, equipment, and recruitment activities. With more than 30 years of experience in restaurant development, he has held leadership positions as Vice President of Development at Huddle House, been Director of Franchise Development at MaggieMoo’s, and held development positions at Denny’s and Arby’s. He also owned the Atlanta-based Bridgetown Grill chain, a Caribbean-themed concept that received Hot Concept of the Year recognition from more than 40 Best of Atlanta awards. Additionally, he is a regular lecturer on franchising and development for the IFA Development Training series, contributes articles and columns to trade journals, frequently participates as an industry expert on conference panels, and early in his career was awarded a Gold Medal in the US Chef’s Open. He earned a B.S. in Hotel Administration from the Statler School of Hotel Administration at Cornell University and today lives in the Atlanta area. He is an active member of the IFA, a CFE, and a board member of the VetFran program. TOM WOOD 2013 CONFERENCE CHAIRMAN President & CEO, Floor Coverings International Tom Wood is CEO and President of Floor Coverings International. He started with the parent organization, FirstService Corp., while still a college student in 1985 and has held several key positions in its various organizations over the past 28 years. After helping found CertaPro Painters, he became President of the Franchise Development Center in 1998. Dedicated to the growth and development of new franchises for several of the brands owned by FirstService, he placed more than 600 franchises for CertaPro Painters, California Closets, Stained Glass Overlay, Paul Davis Restoration, and NutriLawn. In 2005, he became President and CEO of Floor Coverings International.

“The FLDC was an excellent conference that allowed me to get a bit of a skills tune-up, hear the state of the industry and connect with some of franchising’s best leaders. I highly recommend it to any development leader or manager.” —Josh Wall, VP Franchise & Strategic Development, Christian Brothers Automotive

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2016 2016 ST IN E B E H T G IN R O N O H PMENT O L E V E D S E L A S E IS 2016 FRANCH FIND OUT HOW YOUR FRANCHISE SALES ORGANIZATION MEASURES UP! Our research team of sales and lead generation experts will personally evaluate your development performance in these key areas, identifying what you are doing right and where your efforts need improvement: 1. 2. 3. 4. 5.

Recruitment Website Review Online Sales Follow-up Telephone Mystery Shopping Report Social Media Franchisee Satisfaction

Top performers will be honored at the STAR Awards Dinner.* Admission is included in conference registration. *Personal and confidential reports will be delivered post-conference upon request.

ALL BRANDS REGISTERED BY JULY 31 WILL BE CONFIDENTIALLY MYSTERY SHOPPED

“I always mark this event down as THE one meeting that I absolutely do not want to miss. Few meetings if any provide development executives with the type of relevant content, interaction and dialogue necessary to truly evaluate where your team is in their development efforts and to identify solutions to improve performance. The supplier involvement as well provides real opportunities to investigate solutions in real time and form meaningful relationships. Always a strong group of professionals - a power meeting for sure!”

– Phil LeBlanc, VP Franchise Development, ComForCare Senior Services

“I am an emerging franchisor and have attended many conferences over the years but the Franchise Leadership and Development Conference was the most valuable to me, by far. The smaller size created a better environment for networking and fully participating in the breakout sessions. I also appreciated the opportunity to meet with quality suppliers, one of whom I have already engaged.”

– Michael Barnett, Co-Founder/CEO, Romp n’ Roll

REGISTER NOW ONLINE: franchisedevelopmentconference.com OR CALL: 1-800-289-4232 ext 202

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agenda at a glance WEDNESDAY SEPT. 28 9:00am – 4:00pm

CEO Summit Franchise Presidents & CEOs only. Additional Fees Apply

9:00am – 4:00pm

Fran-Guard™: IFA’s Franchise Management and Compliance Program (300 CFE education credits) Additional Fees Apply, lunch provided for this workshop GROW WITH THE RIGHT FRANCHISEES TRACK

9:00am – 12:00pm

Geo-Targeting for Franchisee Recruitment Additional Fees Apply (open to all) • Hyper-local lead generation • Target market strategies for franchisee recruitment • Reach prospective franchisees with marketing strategies

1:00pm – 4:00pm

Growing Franchisees to Grow Your Brand Additional Fees Apply (open to all) • Turning a sale into a fully functional, operating franchisee • Developing single unit franchisees into strong multi-unit franchisees MAXIMIZE SALES PERFORMANCE TRACK

9:00am – 12:00pm

Mastering Sales Fundamentals Additional Fees Apply (open to all)

1:00pm – 4:00pm

Build High Performance Sales Teams Additional Fees Apply (Franchise Senior Executives & Sales Managers only, No Suppliers)

4:30pm – 7:30pm

OPENING SOCIAL IN EXHIBIT HALL - EXHIBITS OPEN

THURSDAY SEPT. 29 7:45am – 8:25am

BREAKFAST IN GENERAL SESSION FOYER

8:30am – 10:15am

Welcome Chairman’s Message Shelly Sun, CEO, BrightStar Care State of Franchising Darrell Johnson, President & CEO, FRANdata KEYNOTE SPEAKER Rich Karlgaard, Economic & Business Innovation Thought Leader, Publisher of Forbes TOPIC: 4 Mega Trends & 3 Best Practices That Will Shape Your Business Future

10:15am – 10:30am

BREAK

10:30am – 12:00pm

Annual Franchise Development Survey, Mystery Shop Scores & Implications Discussion with Panel of Experts - Interdepartmental Approach to Growth • How all departments working together can grow stronger brands • The importance of development & operations working together

12:15pm – 1:55pm

LUNCH IN EXHIBIT HALL – EXHIBITS OPEN

2:00pm – 4:30pm

Breakout Sessions Franchise Sales Basics Track

Brand Strength Track

Lead Generation Track

2:00pm – 3:10pm

Identify & Qualify a Warm Lead

Financing for 2017 & Beyond

What’s New in Lead Generation?

3:20pm – 4:30pm

Develop the Lead & Close the Deal

Legal Panel

Managing Social Media and Its Role in Recruitment

4:45pm – 6:00pm

Business Solution Roundtables Challenge Session KEYNOTE SPEAKER Seth Mattison, Workforce Strategist & Management Trendspotter TOPIC: Strengthen Your Sales Skills – Interactive Workshop DINNER – PRESENTATION OF STAR AWARDS

7:00pm – 9:00pm FRIDAY SEPT. 30 9:00am – 11:00am

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CLOSING SESSION: Build Your 2017 Plan Setting goals, on-going training, recruitment & budget.

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full agenda WEDNESDAY SEPTEMBER 28 WORKSHOPS 9:00am – 4:00pm CEO SUMMIT Franchise Presidents & CEOs only – no suppliers. Additional Fees Apply – lunch included The Franchise CEO Summit provides a private, high-level, and interactive environment for franchise CEOs to have strategic business conversations that typically wouldn’t, or simply couldn’t take place anywhere else. This year, through engaging discussions and facilitated roundtables, executive leaders will tackle challenges and share best practices that drill deep on culture, franchise growth, unit economics for franchisees and franchisors, new areas of growth, and risk management. Our focus on a customized agenda enables CEOs and Presidents to address real-time, bottom-line issues so the payback is measurable. The Franchise CEO Summit is designed to help you achieve your goal of building a truly great company. (Attendees will be engaged with non-competing brands.)

9:00am – 4:00pm FRAN-GUARD™: IFA’S FRANCHISE MANAGEMENT AND COMPLIANCE PROGRAM (300 CFE education credits) Additional Fees Apply, lunch provided for this session. IFA FRAN-GUARD™ is IFA’s Franchise Sales Management and Compliance program. Through this program, is demonstrated the business case for compliance and how a culture of compliance will help you and your staff build a vibrant company while assisting you to protect your system and avoid costly mistakes. This session is especially designed for senior executives to show how you can take proactive steps to reduce risks, manage growth, and build a stronger, healthier, franchise system. 9:00am – 12:00pm GROW WITH THE RIGHT FRANCHISEES TRACK — GEO-TARGETING FOR FRANCHISEE RECRUITMENT Additional Fees Apply (Open to all) You have defined specific target markets for growth. Now all you need is the right franchisees. Who are they, how do you reach them and ensure your brand message resonates with the prospect? In this session, you’ll learn how you can apply marketing strategies for customer research, campaign development and execution along with tools that will support your hyper-local franchisee recruitment initiatives.

REGISTER NOW ONLINE: franchisedevelopmentconference.com OR CALL: 1-800-289-4232 ext 202

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full agenda 9:00am – 12:00pm MAXIMIZE SALES PERFORMANCE TRACK — MASTERING SALES FUNDAMENTALS Additional Fees Apply (Open to all) You’re never too experienced to refine the basics. Whether you are a new franchise sales person or have been selling for a period of time, this session takes you back to your roots.  We’ll cover cold calling, conducting a call, qualifying the candidate, FDD prospect review, Discovery Day and closing the deal. 1:00pm – 4:00pm GROW WITH THE RIGHT FRANCHISEES TRACK — GROWING FRANCHISEES TO GROW YOUR BRAND Additional Fees Apply (Open to all)

1:00pm – 4:00pm MAXIMIZE SALES PERFORMANCE TRACK — BUILD HIGH PERFORMANCE SALES TEAMS Additional Fees Apply (Franchise Senior Executives & Sales Managers Only. No Suppliers)

To grow a strong brand, you must have strong franchisees. What steps do you take to ensure your new deal grows into a fully functioning franchisee, prepared for their first location opening? How do develop a single unit franchisee into a multi-unit franchisee that will help grow your brand? What role does the franchise development team play in the process? Engage with this group of franchise executives to learn more.

To build a world-class brand you must have a great team to provide excellent service and support. How do you decide what positions are needed and who should fill them? What decision making process do you go through? Do you promote from within or hire from outside? What level of experience is optimum for your brand? 4:30pm – 7:30pm OPENING SOCIAL IN EXHIBIT HALL — EXHIBITS OPEN

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full agenda THURSDAY SEPTEMBER 29 7:45am – 8:25am BREAKFAST IN GENERAL SESSION FOYER 8:30am – 10:15am WELCOME CHAIRWOMAN’S MESSAGE Shelly Sun, CEO, BrightStar Care STATE OF FRANCHISING Darrell Johnson, President & CEO, FRANdata Rich Karlgaard Publisher of Forbes, Economic Business & Innovation Thought Leader 4 Mega Trends & 3 Best Practices That Will Shape Your Business Future

KEYNOTE SPEAKER

10:15am – 10:30am BREAK 10:30am – 12:00pm ANNUAL FRANCHISE DEVELOPMENT SURVEY, MYSTERY SHOP SCORES & IMPLICATIONS ANNUAL FRANCHISE DEVELOPMENT SURVEY RESULTS We’ll present the results of the 18th Annual Franchise Development Survey. We will cover the basics — lead generation, cost analysis and lead to deal close ratios along with data new to the 2016 survey. 2016 FRANCHISOR MYSTERY SHOPPING SCORES With the growing competition in the franchise space, a successful team needs to be at their best to recruit, retain and close with top quality franchisees. Our team of franchise expert mystery shoppers set out to discover how brands are performing with prospective franchisees. 

DISCUSSION WITH PANEL OF EXPERTS — INTERDEPARTMENTAL APPROACH TO GROWTH To build the healthiest franchise systems, all departments must be aligned in support of franchisee growth. The players need to be working together to ensure new franchisees get started on the right foot and have the tools and resources for success. Our panel will share insights on how they have worked with their peers to ensure interdepartmental alignment for growth. 12:15pm – 1:55pm LUNCH IN EXHIBIT HALL — EXHIBITS OPEN 2:00pm – 4:30pm BREAKOUT SESSIONS Our breakout sessions are divided into three tracks. Each track offers back-to-back sessions directly relevant to the topic of the track.  You may choose to follow one track or participate in any session of a different track.  The three tracks are: FRANCHISE SALES BASICS TRACK  This track is designed to support team members specifically new to franchise sales. We’ll work on developing the skills needed to drive and close the deal. What techniques work best and how can you refine your craft? Learn how you can become a better sales person overall. BRAND STRENGTH TRACK The Brand Strength Track is designed to provide you with data and information to offer a stronger investment opportunity to prospective franchisees. LEAD GENERATION TRACK Lead generation can be a moving target. In this track we’ll discuss programs and ideas that can help your franchisee recruitment efforts and maximize your budget.

REGISTER NOW ONLINE: franchisedevelopmentconference.com OR CALL: 1-800-289-4232 ext 202

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full agenda 2:00pm – 3:10pm CONCURRENT BREAKOUT SESSIONS FRANCHISE SALES BASICS TRACK – IDENTIFY & QUALIFY A WARM LEAD There are a lot of tire-kickers out there – how do you determine which prospects are good leads? Learn how to direct the initial conversation to understand if the prospect is serious and if they qualify to become a franchisee of your brand. What skills and techniques work best in this environment?

4:45pm – 6:00pm BUSINESS SOLUTION ROUNDTABLES CHALLENGE SESSION Seth Mattison Workforce Strategist & Management Trendspotter Strengthen Your Sales Skills – Interactive Workshop

KEYNOTE SPEAKER

2016

BRAND STRENGTH TRACK – FINANCING FOR 2017 & BEYOND As the economy rebounds, financing options are opening but some of the rules have changed. Join our panel of experts to learn the latest in financing for 2017 and beyond. LEAD GENERATION TRACK – WHAT’S NEW IN LEAD GENERATION? New ideas, tools and technology are popping up everywhere. The impact on your franchisee recruitment initiatives and budget varies. Join us to learn what’s working for the new wave of lead generation efforts.

7:00pm – 9:00pm 2016 STAR AWARDS DINNER Honoring the Best in 2016 Franchise Development Admission to the STAR Awards Dinner is included in conference registration.

3:20pm – 4:30pm CONCURRENT BREAKOUT SESSIONS

FRIDAY SEPTEMBER 30

FRANCHISE SALES BASICS TRACK — DEVELOP THE LEAD & CLOSE THE DEAL Now you’ve identified the qualified prospect. What do you do next to develop the lead through the pipeline? This session provides tips on how to keep the prospect interested and excited throughout the process until the deal closes.  BRAND STRENGTH TRACK — LEGAL PANEL In this open forum session, some of the best and brightest legal experts will discuss how franchise law is evolving. Come prepared with questions! LEAD GENERATION TRACK — MANAGING SOCIAL MEDIA AND ITS ROLE IN RECRUITMENT What is Social Media’s role in franchisee recruitment – to generate leads, provide validation, get people talking about your brand? This session will help you understand the options and opportunities Social Media offers to help grow your brand.

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9:00am – 11:00am CLOSING SESSION BUILD YOUR 2017 PLAN In the previous two days, you’ve learned what considerations to make in preparing for growth. You have new ideas to attract, recruit and develop the right franchisees. Now you need to formalize an actionable plan for yourself and your team. In this interactive session, you’ll learn the steps to take in order to develop an Executional Plan that includes goals, budgeting, talent recruitment & training. You’ll leave this session with an understanding of how to build a plan that can be implemented as soon as you return to your office. Breakfast is included.

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SPONSORS

This is a donâ&#x20AC;&#x2122;t-miss event for service providers interested in attracting CEOs, Presidents, CDOs and decision makers in the areas of sales and development. JOIN US FOR OUR 18TH ANNUAL EVENT!

P L AT I N U M S P O N S O R

S TA R AWA R D S B A N Q U E T

GOLD SPONSORS

WIRELESS SPONSOR Scorpion

S I LV E R S P O N S O R S 1851 919 Marketing Company ApplePie Capital Arthur J. Gallagher & Co Bank of America BizBuySell Boefly Entrepreneur Media, Inc. ePath Learning, Inc. Forum Analytics, A CBRE Company

Franchise Gator

Guidant Financial Group

Podium

Franchise Navigator

HappyCo

Precision-Sign

Franchise Opportunities Network

Intuit Inc.

Qvinci Software

Latitude CG

RME360

LeadingResponse

Tango

FranchiseHelp

Listen360

The Wall Street Journal

FranchisePhones by Clarity

Localbiz360

Top Fire Media

FranConnect

Modernistic

TriNet

FRANdata Corporation

Naranga

Watchfire Signs

FRM Solutions

Paycom

Yodle

Franchise Solutions & Franchise.com

CEO WORKSHOP SPONSORS Franchise Business Review MSA Worldwide

LANYARD SPONSOR Fisher Zucker MOBILE APP FRM Solutions

CONFERENCE GUIDEBOOK Franchise Payments Network

BRONZE SPONSORS All Points Public Relations Drumm Law F.C. Dadson Faegre Baker Daniels

Fish Consulting Fishman Public Relations Franchise Business Review Franchise Performance Group Franchise Research Institute

Gardere Wanne Sewell LLP MFV Expositions MSA Worldwide Rallyware Sponsors as of press time

REGISTER NOW ONLINE: franchisedevelopmentconference.com OR CALL: 1-800-289-4232 ext 202

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R E G I S T R AT I O N 4 EASY WAYS TO REGISTER: 1. Online:

4. Fax Registration Form

franchisedevelopmentconference.com

with credit card information to: (408) 402-5738

2. Phone:

Refund and Substitution Policy: Please provide cancellations to Franchise Update Media in writing by August 30, 2016. Your registration fee will be refunded, less a $100 processing fee. After August 30, 2016, no refunds or credits will be issued.

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3. Mail Registration Form:

Download from: franchisedevelopmentconference.com/ downloads/registration.pdf and mail with check made payable to:

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MAIN CONFERENCE - Please select the sessions you are most likely to attend. MAIN CONFERENCE - Please select the sessions you are most likely to attend. Thursday, September 29 Thursday, September 29 8:30am to 10:15am ❑ General Session: OPENING WELCOME & STATE OF FRANCHISING 8:30am to 10:15am ❑ General Session: OPENING WELCOME & STATE OF FRANCHISING 10:30am to 12:30pm ❑ General Session: Annual Franchise Development Survey, Mystery Shop Scores & Implications 10:30am to 12:30pm ❑ General Session: Annual Franchise Development Survey, Mystery Shop Scores & Implications ❑ Concurrent Sessions: ❑ 1. Franchise Sales Basics Track – Identify & Qualify a Warm Lead 2:00pm to 3:10pm ❑ ❑ Concurrent Sessions: Franchise Track – Identify & Qualify a Warm Lead 2:00pm to 3:10pm 2. Brand Strength Track❑– 1. Financing forSales 2017Basics & Beyond ❑ 2. Brand Strength Track – Financing for 2017 & Beyond ❑ 3. Lead Generation Track – What’s New in Lead Generation? ❑ 3. Lead Generation Track – What’s New in Lead Generation? 3:20pm to 4:30pm ❑ Concurrent Sessions: ❑ 1. Franchise Sales Basics Track – Develop the Lead & Close the Deal 3:20pm to 4:30pm ❑ Concurrent Sessions: Franchise ❑ 2. Brand Strength Track❑– 1. Legal Panel Sales Basics Track – Develop the Lead & Close the Deal ❑ Strength Track Panel Social Media & Its Role in Recruitment ❑ 2. 3. Brand Lead Generation Track– –Legal Managing ❑ 3. Lead Generation Track – Managing Social Media & Its Role in Recruitment ❑ Business Solution Roundtables 4:45pm to 6:00pm ❑ Business Solution Roundtables 4:45pm to 6:00pm

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Consumer Marketing CONSUMER MARKETING INITIATIVES

46 Feature: Big Data

How brands are using data to engage customers

52 Franchise Consumer Marketing Conference A look back at this year’s big event

57 CMO Q&A

Jon Quinn brings a broad perspective to Charleys Philly Steaks

60 CMO Roundtable

“As the role of big data in strategic market planning grows, how does it affect your long-term marketing plans, forecasting, efficiency/ROI of your media spend, or other parts of your marketing?”

61 Social Media

3 lessons in customer behavior from Snapchat

62 Customer Service

6 things to create a “Can’t live without it!” brand 42

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CONSUMER MARKETING BY EDDY GOLDBERG

Big Data Meets Consumers

F

SHIFTING FROM DATA MINING TO DATA REFINING

ishbowl, founded in 2000, is a mar- ers franchisees think they have. keting platform for the restaurant By identifying critical factors such as industry, supporting more than how often and what time of day a customer 50,000 chain and independent restau- comes in, what they’ve ordered before, rants with software and services for guest average check size, last visit, and demoacquisition, messaging, promotions man- graphic or psychographic data, “You start agement, and loyalty analytics. Franchise getting a lot of insights about them and clients include Jamba Juice, Buffalo Wings their behavior,” says Ganesan. “With that, & Rings, Texas Roadhouse, On the Border, franchise marketers can engage with them and other well-known brands. in a more meaningful fashion.” Dev Ganesan, after stints leading sevFor example, if you know an individual eral high-tech firms, came on board as comes in every month and orders only CEO in October 2014 when founder chicken or fish, you won’t send them a Scott Shaw stepped aside. In early 2015, coupon for a new burger, but you might the company launched its guest analytics send them an offer that rewards them for platform, integrating analytics and big coming in more often. Using predictive data into its marketing platform, offering analytics allows one-on-one personalizaCMOs a dashboard and set of analytical tion, for example offering a new red wine for someone who always ormodules. In December 2015, ders reds with their dinner. the company acquired CLYP Technologies, a “next generaWhile this technology tion” mobile automation firm. is called “big data,” it really “This gave us the CRM,” is more about “small data,” says Ganesan. “We had the says Ganesan, since it allows analytics but were missing that franchisees to take control of piece from the retail side.” In the fire hose of customer data addition to adding marketing and make decisions at the automation, the acquisition store level on an individual also added loyalty and proxbasis (automated, of course, imity marketing (think beacon based on the data and the and Wifi), offering restaurant Dev Ganesan rules chosen). “Big data is not this one clients a more comprehensive solution to their biggest challenge, says big dashboard of intelligence. It’s insights Ganesan: how to drive more customers at the very small level so somebody can into their restaurants and increase same understand it and take action,” he says. store sales. Dashboards can be tailored to provide Unless a customer has signed up for a different slices of information to different loyalty or rewards program, he says, fran- departments at the franchisor, for example, chisees have no idea about the identity of to the CMO, CEO, CFO, or the group in as many as 95 percent of the people who charge of new store openings. “While the walk into their stores. Having more cus- data is big, all of the action is local and tomer data all in one place (from sources small,” he says. including POS systems, loyalty programs, However, after explaining in detail how and customer GPS data), and being able to the technology works, Ganesan made a analyze and use it quickly to personalize critical point about the role of big data. and customize offers or promotions can “The most important thing is that this is save time and money by more effectively not about technology. It’s all about custargeting actual customers, not the custom- tomer engagement—and the more you

46

know about them, the more they will engage and the better experience they will have.” While the technology may seem baffling under the hood, he says it really is customer-focused. “It’s built on understanding the guest and how to enhance their experience so they keep coming back.” Q: How can franchise brands actually use the ever-increasing amount of data they’ve collected to develop, assess, and plan their consumer marketing strategies and tactics? DG: With the increase in available data, often located in disparate systems, data paralysis is a real problem. We’re working with franchise brands to break down data silos and bring together data from multiple sources and connect it at the guest level. We’re leveraging this data to help our clients drive increased frequency and spend by understanding who their guests are and how they interact with their brand. Some examples of the analysis we’ve done include lifetime value analysis by join channel; value of marketing programs (loyalty and/or email); incremental value of campaign; guest audits, including best customer identification, persona analysis, and RFM; discount analysis; menu; and trade area. We then use this data for program planning and goal setting, including multi-channel acquisition plans, targeted message strategies, robust test and learn agendas, offer development, and menu engineering. Q: Breaking down silos and integrating disparate data and departments means change management on both the human and technology sides. What have you learned about making the transition as painless and seamless as possible? DG: First, make sure all parties—IT, marketing, finance, and C-levels—are at the table at the beginning of projects, not the end. It is an enterprise strategy, not

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SOMETHING

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Know your guests. Experience extraordinary results.

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a departmental one. Look for partners or vendors who are willing to work directly together on your behalf. Make sure your technology partners are sticking to core competencies, but are able to apply their expertise of solving common issues (e.g., getting data out of your POS). Finally, choose partners you trust and that have industry expertise, but who are not limited by the industry—they must have their eye on what is happening beyond your industry. Q: Working with so many different franchise restaurant brands to attract, target, and retain customers, what commonalities are you seeing? DG: The key is still getting the right message in front of the right customer at the right time and in the right channel. This starts with understanding who your guest is (personas) and how they interact with your brand (purchase behavior). The linchpin is connecting this data. A centralized data lake allows data to be leveraged at both the corporate and local level, giving franchisees the control they want or need to respond to localized events and marketing opportunities. [Ed Note: A data lake is a storage repository or hub that holds a vast amount of raw data in its native format until it is needed; it is more flexible, quicker to build, and less expensive than a data warehouse.] Additionally, regional or DMA differences in guest profiles and item or dining preferences can be easily understood. This information can be used to educate franchisees and to develop customized message strategies. Data allows clients to understand their customers’ lifecycle from acquisition to win-back, and to develop robust journey maps that nurture the customer relationship to drive incremental visits and spend. Q: POS systems serve as the data hub for many franchisors. What is the role of the POS systems in all this? DG: Traditionally, they are the central hub. However, emerging technologies and players are starting to disrupt the stronghold of POS companies. These emerging players are POS agnostics and play well with others in the ecosystem. With the introduction of EMV, POS is no longer the keeper of all data. Cloud solutions are emerging. ■

48

Engaging Customers THE HABIT BURGER GRILL ADDS DATA ANALYTICS

A

bout 2 years ago, when The Habit Burger Grill needed a better way to track consumer data to engage with customers in more personalized ways, CMO Matt Hood sent out an RFP. He was seeking a company that could help him build a consumer insight database and deliver targeted communications by email and other channels. “We have a pretty broad spectrum of guests and we wanted to build a deeper relationship with them,” he says. Founded in 1969 near Santa Barbara, Calif., The Habit has more than 150 restaurants. The brand began franchising in 2014 and opened its first franchise locations the next year, so most of its restaurants are still company-owned. Its first two franchise agreements, announced in May 2014, were for 25 restaurants in the Seattle area and 15 in and around Las Vegas. While the brand’s online ordering capability, rolled out a couple of years ago, provided some basic information about customers, that wasn’t enough to develop the kind of personalized marketing Hood was looking to accomplish. After considering different solutions, he selected Fishbowl, a company he’d worked with for about a decade at previous jobs. Hood says he chose Fishbowl because it had the tools he wanted and appeared to be moving in the direction that would meet his future needs. “Probably the biggest thing we were able to add was the ability to layer on their analytics tool,” he says. Habit Burger also uses Fishbowl’s email platform and promotions manager platform. “The problem, if there is one, is that we are swimming in a sea of data daily. For businesses and organizations to be successful you have to turn that into insight, and that’s what Fishbowl has helped us do,” says Hood. The brand is now able to combine transactional data from its POS system with personal information Matt Hood gleaned from online orders and its CharClub rewards program to gain insights on the frequency of customer visits, satisfaction with those visits, and, most important, he says, “how we can better customize each experience for them.” One of the brand’s first new capabilities was being able to segment its customer data into more actionable groups (locations visited, frequency, order size and type, etc.) and start delivering customized messages to those subsets. Although The Habit doesn’t do discounts, Hood says that during May (National Hamburger Month) the brand offered a free burger to anyone who signed up for its CharClub loyalty program. To protect against fraud, the offer was linked to an individual; and those who responded were flagged for future promotions. This summer the brand is using its email database in a social media campaign, encouraging customers to tweet, follow them on Facebook, and post on Snapchat—building engagement and gathering more customer data. “With the proliferation of brands in fast casual, deepening that guest relationship has never been more important. If we can endeavor to know our guest better, understand their behavior through means like Fishbowl and point-of-sale transactional data, we can serve them better,” he says. “It’s up to us as consumer marketers to enhance and deepen the relationship with our guests—and not try to turn it into an optimized algorithm to increase sales, but to better serve our guests,” says Hood. “As both franchisors and franchisees are trying to deepen their relationship with each guest, data analytics and insight are certainly a great way to do that. It will never replace the one-on-one human interactions, but it will enhance it.” ■

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Visit FranchiseResearchInstitute.com

FRI is the original auditor of franchisee opinions. Our focus is research we do NOT sell leads or advertising!

FRANCHISEE OPINION RESEARCH

“There are a lot of ‘Best of’ and ‘Top’ lists in franchising, but there is only one list based upon fully inclusive, transparent, third-party research. At BrightStar, we are pleased that our company has been (and continues to be) recognized by numerous organizations, but we are especially proud to be a World-Class Franchise®.”

2016

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BIG DATA:

Facts, Figures, Opinions, and Resources

I

t seems franchising is finally hopping on the big data bandwagon in a meaningful way as advances in technology make it more affordable, understandable, and actionable. For some it’s old hat, while for others it’s still a mystery waiting to be unraveled. Here are several different takes, from CEO and marketer surveys to tech-talk on how data can help companies better know—and better engage—their customers.

Survey: CEOs Embrace Data, Analytics Each year, PwC publishes its Annual Global CEO Survey. This year’s includes input from 1,409 CEOs in 83 countries. Here’s what the report had to say about customers and data: “At the top of CEOs’ minds is the use of technology to better interpret the complex and evolving needs of customers in order to better engage with them. Nearly a quarter of CEOs (24%) feel they don’t have enough information about what customers or other stakeholders want, and a recent PwC survey showed that the top-three challenge most cited by global operations leaders (63%) is understanding what customers value. Sixty-eight percent of CEOs back the power of data and analytics to deliver these results and 65% favor customer relationship management (CRM) systems. “Indeed, CEOs’ growing faith in, and dependence on, data and analytics signals just how far a data-based, scientific mindset has penetrated even the complex world of stakeholder management. And as big data, cloud computing, and the Internet of Things become even more important in modern business, the role that technology plays in helping understand wider stakeholder expectations is also being applied to meeting and even surpassing those expectations.”

50

Something Old, Something New Tamara Dull, director of emerging technologies on the SAS Best Practices team, wrote a 5-part blog last year about big data. This is an excerpt. The full series is available on the SAS website. “I’m here to tell you that big data is not new. Yet, with all the hype these last few years around these two little words, you’d think we’ve discovered the Holy Grail. Let me share with you the dirty little secret about big data: it’s just data—the same data we’ve had for decades. They say that 20 percent of the data we deal with today is structured data. I also call this traditional, relational data. [Examples she cites include POS, CRM, financial, and loyalty card data.] The other 80 percent is semi-structured or unstructured data, and this is what I call ‘big’ data. [Examples she cites include mobile, data, email, photos, blogs, and GPS data.] Are any of these data types new? Of course not. We’ve been collecting, processing, storing, and analyzing all this data for decades. What we haven’t been able to do very well, however, if at all, is mix them together. So here’s what’s new: We now have the technologies to collect, process, store, and analyze all this data together… at a fraction of the cost and time of our traditional, relational systems. You can’t do that with your data warehouse.”

Survey: Most Effective Uses of Marketing Data Ascend2 conducts online surveys throughout the year, querying its database of respondents on timely topics. Here are the results of two surveys about big data. What are the most effective uses of marketing data? 59% 48% 44% 41% 37% 28% 23%

Campaign targeting Content personalization Customer journey analysis Sales attributed to marketing Predictive analytics Account-based marketing Market research

What are the most effective datadriven marketing personalization tactics used? 47% 43% 38% 37% 36% 35% 34%

Email message personalization Targeted landing pages Contact data segmentation Web content personalization Triggered email campaigns Retargeted advertising Lead intelligence collection

What are the most important goals of a data-driven marketing strategy?

What are the most difficult datadriven marketing personalization tactics to execute?

70% 43% 40% 39% 28% 28% 24%

50% 48% 41% 34% 27% 26% 23%

Personalizing the customer experience Acquiring new customers Measuring data-driven ROI Targeting individual market segments Integrating data across platforms Growing the marketing database Enriching data quality & completeness

Lead intelligence collection Web content personalization Contact data segmentation Retargeted advertising Email message personalization Triggered email campaigns Targeted landing pages

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Turn your transactions into customer insights Tranzlogic transforms your in-store, ecommerce, and mobile transactions into actionable customer insights that help franchises make smarter decisions and get better results.

It’s easy and free Tranzlogic requires no interaction with your customers, no expensive surveys, and no hard to implement loyalty campaigns!

Simply activate Tranzlogic and gain access to powerful data and franchise tools • Identify your best customers, learn what they like and see where they live. • Engage in more efficient marketing, loyalty and expansion activities. • Respond to regional trends, orient to the local market and benchmark performance. • Measure results and see how customers are changing over time.

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Stuart Ottinger – CEO. Double R Restaurant Group

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Marketing

BY KERRY PIPES & EDDY GOLDBERG

MEET-UP

2016 Franchise Consumer Marketing Conference rocks

O

ne thing was clear at this year’s Franchise Consumer Marketing Conference (FCMC): times have changed and will continue to change for franchise brand marketers—more rapidly than ever before. With all the ongoing developments in digital, social, and even traditional marketing strategies and tactics, consumer marketing is in a historic period of evolution for franchise brands. Keeping current and hearing from peers on how they’re navigating the changing marketing seascape are two big reasons CMOs, marketing VPs, and other franchise marketing executives attend this conference, now in its 6th year and continuing to grow in size and scope each year. More than 330 attendees, more than half first-timers, got together in Atlanta’s InterContinental Hotel Buckhead in late June for two days packed with marketing insights, education, and networking opportunities.

52

Day 1: Jump right in The conference kicked into gear Tuesday morning with two pairs of concurrent workshops. The first set featured a session on crafting the right brand promise

FCMC BY THE NUMBERS ATTENDEES • 336 Total • 174 Franchisors • 150 Sponsors • 54% First-time attendees FRANCHISORS BY CATEGORY • 72 Service • 48 Food • 19 Retail Food • 15 Retail Non-Food

to customers (consumers, franchisees, and employees); and the other focused on media strategy (paid, owned, and earned). Those were followed by two more concurrent workshops about how to engage customers by choosing the right media vehicles; and on how to evaluate the results of a paid media plan. These 90-minute workshops, presented by marketing and technology experts, explored solutions to the problems modern marketers face, with plenty of time for attendees to ask questions or provide answers based on their own experiences. The exhibits are open! One of the cornerstones of the FCMC is the open discussions and informal networking available in the Sponsor Networking Gallery, along with ample food and drink filling the aisles between the sponsors’ booths—all in all, a great atmosphere for meeting with fellow marketers, solution

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20 16

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THANK YOU ATTENDEES, SPEAKERS AND SPONSORS FOR MAKING THE 2016 CONFERENCE GREAT!

SAVE THE DATE

FOR THE 2017 FRANCHISE CONSUMER MARKETING CONFERENCE - JUNE 19 - JUNE 21 20 16 FCMC2016_than_you_ad.indd 1

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Conference Chair Jeff Rinke providers, panelists, and speakers. This year’s gallery opened with lunch and 150 sponsors on hand to eat and meet with franchise marketers. If there’s a tool available to marketers, it was in the room. Technology providers were front and center, offering solutions ranging from local marketing and SEO to CRM systems and social media. It’s the economy, smarties! The opening general session was called to order by Conference Chair Jeff Rinke, vice president of marketing at Hungry Howie’s Pizza. The veteran marketer brought the event sharply into focus during his opening address when he said, “It’s a fun time to be in marketing and changes are happening at lightning speed. This conference provides knowledge as well as a chance to meet others who share in your passion and interest.” Darrell Johnson, CEO of FRANdata, was up next, delivering his annual “State of the Economy” report focused on how domestic and global economic forces will likely affect franchising going forward. Johnson noted that although this is the second-longest expansion in U.S. history, it’s also the slowest recovery from a downturn since the Second World War ended more than 70 years ago. “This is the weakest recovery we’ve ever had, and the longest,” he said. He said consumer confidence, usually a pretty good indicator of the next couple of quarters, was “nervous but fairly

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stable.” U.S. GDP, he said, is likely to grow at slightly over 2 percent through 2018, since the Fed is driving this recovery with low interest rates and is likely to continue doing so. Despite the lack of inflation, businesses will likely see growing cost pressures from wages, commodity price instability, and interest rate hikes for borrowers. The implications for franchising, he said, have not changed significantly in this slow and steady recovery. Since the total market is not growing at any significant pace, franchise brands will continue competing for a slice of the pie. “It’s a market share game, not a rising tide,” he noted. A growing phenomenon, he said, is subsector specialization (boutique gyms instead of big box gyms, for example). All this, he concluded, is a challenge and opportunity for franchise marketers—and is why marketing budgets should be increasing. The challenge going forward will be to justify increased spending by employing performance metrics to assess the effectiveness of every dollar spent. One tip: “Define what you measure before you start measuring it,” he said.

best-selling business books. His newest is UnSelling: The New Customer Experience. Forbes.com named him one of the world’s top five social media influencers. While Stratten’s delivery was highly entertaining, his thought-provoking messages were serious and hit home. One example: while he humorously described Millennials as “people younger than us and we don’t like them,” he said they are a consumer segment that must be embraced. “Stop selling, start engaging,” he suggested. He also drew knowing laughter from the audience when he discussed logo redesigns, saying, “Nothing

Keynote #1: UnSelling Scott Stratten, president of UnMarketing, is a self-described expert in disruptive and un-traditional sales, marketing, branding, and social media. Stratten has penned four

Keynote speaker Scott Stratten

Darrell Johnson

has taken so much time, cost so much, and mattered so little.” And when it comes to branding in 2016, he reminded marketers, “You don’t write the story. The brand story is written by customers.” He illustrated this with the classic customer service story of Joshie the Giraffe at the Ritz-Carlton. After a young child left a stuffed animal in one of the brand’s hotels, Joshie was discovered by employees in the laundry department, rolled up in the bed sheets. The staff then posed Joshie in several hotel locations, snapping photos at the spa, the pool, the bar, and even in the office before mailing the stuffed animal back to its owner—along with emails from Joshie. The result? The child’s father raved about the experience on social media, which, of

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(L-R) Susan Boresow, Jose Costa, Matt Friedman, Catherine Monson, Christine Russell course, spread like wildfire and further cemented Ritz-Carlton’s reputation for customer service excellence. Despite his success in the online world, Stratten described himself as “an old school sales and marketing guy.” And he made an interesting point about handling customer complaints. “They want validation. What matters is the follow-up, doing something about it.” He said that while authenticity and transparency are important in customer relations, the third leg is immediacy, with speed of response as important—perhaps even more important—than the response itself. After the keynote, which drew a “standing O,” the day wrapped up with three breakout sessions dealing with local marketing budgets and tools, social media’s role in driving revenue, and using research and big data to build an effective marketing plan. Day 2: More marketing! A continental breakfast awaited marketers as they arrived for their second full day, which kicked off with a general session panel called “Your Customer Comes First.” The panel, moderated by Susan Boresow, president of Title Boxing Club, consisted of Jose Costa, group president at Driven Brands; Matt Friedman, founder and CEO at Wing Zone; Catherine Monson, CEO and president at Fastsigns; and Christine Russell, president at Camp Bow Wow. Each shared the different ways they continue to build their brands by focusing on the customer brand promise. Costa spoke about how Meineke has worked to remove the old consumer perception that taking your vehicle in for

auto repairs is like a trip to the dentist. “We’ve worked to turn a negative into a positive. We want to help turn the car you drive back into the car you love,” he said of the brand’s more modern approach to automotive repair. One important component in achieving that goal was changing the mindset of franchisees from being strictly operations-focused to being more customer-focused—which took some work, as well as some new technology to connect with customers online for repairs, estimates, and progress reports. The panel also discussed other topics such as how to better engage franchisees, how they are managing customer complaints, and some of their best marketing tips and tactics. In one of the many references to big data during the conference, Russell described how important customer data is to Camp Bow Wow. “We work closely with our franchisees to help them understand and own the marketing campaign on the front line,” she said. “The

data matters and benefits us all.” Breakout sessions followed for the remainder of the morning, covering topics ranging from “Brand Building Is More than Changing Your Logo” and “Programmatic Media Implementation in a Multi-Media Plan” to “The Print & Direct Mail Resurgence” and “What Does Mobile in 2016 Mean for My Brand and Franchisees?” At noon, the Networking Gallery reopened for another chance to, mingle, eat, drink, and talk business with other marketers and the sponsors and exhibitors. Next up was a general session panel, “Integrated Media Done Right,” moderated by David Buckley, CMO at Sears Hometown and Outlet stores. The panelists were Doug Koegeboehn, CMO at Wienerschnitzel; Steve Schildwachter, CMO at BrightStar Care; Terri Snyder, CMO and EVP at Checker’s/Rally’s; and Ed Waller, chief brand officer at Paul Davis Restoration. Their discussion touched

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(L-R) David Buckley, Doug Koegeboehn, Terri Snyder, Steve Schildwachter, Ed Waller on the ways they’ve implemented different media tools and creative marketing strategies to build successful marketing initiatives. Koegeboehn got chuckles when he said, “Making great creative is hard, and it sucks.” He suggested marketers put their time spent on integrated marketing into creative because, as he said, “If your creative sucks, all your media channels will suck. You have to tell the right story.” Snyder drew appreciative laughs in retelling the “Wiener Wars” story, which began this past February when Burger King launched its hot dog ad campaign—months before she had expected. In her countercampaign, which she had to develop very

Curt Steinhorst

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quickly, she wanted “edgy but not middle school” as good-humored wiener jokes made their way across the national media landscape. “We got $1 million of free PR in a week,” she said, with major media outlets having a field day. Koegeboehn, far from being an idle bystander, implemented his own integrated, multimedia efforts and, because there are not a lot of competitors in the hot dog space, said the brouhaha actually helped his brand by popularizing Wienerschnitzel’s main product to a wider audience. Two more concurrent breakout sessions—one on franchisee compliance and participation in local marketing, and one on SEO and web development—filled the next hour before the closing keynote address brought everyone together again for a final session. Keynote #2: Customer ADD Curt Steinhorst, founder and president of the Promentum Group, a communications consultancy, is an expert on crafting messages for today’s distracted audiences. “How do you go about reaching customers who have never had more coming at them than they have today?” he asked. Citing his own issues growing up with ADD, he said that today’s 24/7 connected culture has fundamentally altered the way people work, engage, communicate, and relate to one another. But there are ways to rise above the noise and craft a message that cuts through today’s distracted audience. “In the end what draws our attention is the emotional connection we have,” he said. And while today’s customers, with their portable phones, tablets, and watches, are

“untethered,” he said it’s also never been easier to reach them—if you know where they spend their time online. “You have to reach customers where they are,” he said. The flip side, he added, is that “customers expect to be able to reach you on all channels all the time,” creating an ongoing debate over how fast brands need to respond to emails, tweets, and other customer input.

Food and games The hard work completed, it was time to relax. Their heads filled with newfound marketing expertise and their pockets filled with business cards, attendees trooped over to Maggiano’s Little Italy, a short walk up the road, for the closing dinner and some fun. The evening was replete with great food, lively conversation, and a contest for each table to create a slogan or campaign for the Rio Olympics, which brought the proceedings to a raucous, celebratory conclusion. Save the date for next year’s FCMC, which will return to the InterContinental Buckhead in Atlanta, June 19–21, 2017. n

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CONSUMER MARKETING

CMOQ&A Well-Rounded Marketer Jon Quinn brings a broad perspective to Charleys Philly Steaks

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BY KERRY PIPES

his past February, longtime marketing executive Jon Quinn suited up for his newest role as vice president of marketing for Charleys Philly Steaks. Two decades in marketing have taken Quinn through stints at Bob Evans, Long John Silver’s, Applebee’s, Damon’s International, Golden Corral, Boston Market, and Fazoli’s. In his two years as vice president of marketing at Fazoli’s, he spearheaded a full brand refresh and a double-digit (nearly 20 percent) increase in sales. He’s also held executive positions with two marketing communications firms, giving him a perspective on the agency side as well. Today, as vice president of marketing for a 30-year-old brand with more than 550 locations in 45 states and 20 countries, Quinn is not only overseeing the marketing efforts and an in-house graphics team, but also is leading and managing brand strategy, overseeing marketing research and analysis, and executing strategy in marketing communications, digital and social marketing, cause-related marketing, and field marketing. He also is assisting with developing a new premium QSR/ fast casual concept to provide franchisees with additional expansion opportunities. Charleys has a unique marketing situation. Most of its existing units are located in malls and military bases, so he is looking to expand beyond those markets into more traditional sites, such as strip centers, where the brand has about 40 locations. “We have two very different marketing plans we develop and need to execute,” says Quinn. As fast-moving technology continues to push the needle in the marketing world, Quinn is excited to see the brand preparing to roll out a new POS system he says will help the company mine more data. The most challenging part for a modernday marketer, he adds, is keeping up with technology and understanding what aspects

make sense for your brand to leverage, and when, with your existing resources. For now, Quinn is thrilled to be on the job with Charleys and says he plans to make sure that the brand’s marketing is strategic, analytical, and, as he likes to say, “the headlight and the taillight of the brand—where are we going and why, and what have we learned about where we’ve been.”

Describe your role as vice president of marketing. In addition to leading the marketing department at Charleys Philly Steaks, I also lead a cross-functional group challenged with new concept development. What’s unique about this position at Charleys? A couple of things. First, Charleys’ heritage is largely based in captive audience venues like malls and military bases. That means the guest journey and decision process culminating in a visit to

our concept are entirely different than at most restaurant brands. “LSM” and “community engagement” are an entirely different ballgame. The flip side of that dynamic is that much of our future success hinges on our ability to be successful outside of those captive audience locations. We have about 40 strip center locations, and much of our long-term growth is focused on this channel. Therefore, we have two very different marketing plans we develop and need to execute. What’s the most challenging part of being a vice president of marketing today? Keeping up with technology and understanding what aspects make sense for your brand to leverage and when— and how with your existing supporting platforms. We are in the process of rolling out a new POS platform that will make some of the emerging technology marketing tools possible for us to employ. We have to resist the temptation to jump immediately onto new technologies without fully understanding the impact they may have on the brand, or if the returns are worth the resources to pursue them. For example, order kiosks make the experience a little more transactional than relational, a move that may make sense for some brands more than others. Remember back in 2010 and early 2011 when QR codes and check-ins were promised to be the next big things? Both have proven to have limited application. What are the 3 most important keys to being an effective marketing leader today? Essentially they are the same as they have been, but they take new forms now. 1) To lead the organization strategically and analytically. Marketing needs to be the headlight and the taillight of the brand—where are we going and why, and what have we learned about where we’ve been. 2) Stay current and well-versed on applications of new technologies that can be employed to enhance the customer experience and drive sales; that can support operations while maintaining the integrity of the guest experience. 3) Be the voice of the consumer/guest. In the restaurant industry, especially in the mature, more growth-challenged segments, we have a tendency to see things mostly from

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an operations or financial perspective. These are very real needs and concerns, but somebody needs to keep focused on what’s best for the guest. How do you prepare a marketing plan and execute the strategies? The first two considerations are 1) what are our brand strengths, and 2) how do they align with current opportunities in the marketplace? We also look at our recent past to assess what initiatives are getting positive traction and should be further leveraged. How do you measure marketing results and effectiveness? We look at pre- and post-promotional period sales, traffic, and ticket performance. We also take into account menu mix shift and migration analysis, and the impact on profitability. Finally, guest feedback and consumer research. Discuss your core consumer marketing strategies and objectives. We are focusing on attracting Millennials to our concept. There are a couple of key characteristics about the Millennial lifestyle that Charleys can easily leverage: they appreciate adventures in flavor, they enjoy snacking, and they expect the option to customize. Therefore, our brand experience, LTO offerings, menu development, and marketing communications all focus on at least one of those core concepts. We’ve also set specific objectives for establishing and growing our non-traditional day part business, most specifically snacking occasions. How do you go about creating a “customer-centric” marketing and brand philosophy? This is a constant effort. Within a restaurant brand, only two functions are focused on this: marketing and operations. However, there are forces pressuring both of these functions that could potentially undermine focusing on the guest, such as food and labor costs. Therefore, it’s essential to continually prove the financial value, both short-and long-term, of consistently seeing things from the guest perspective. Describe your marketing team and the role each plays. I have two different teams reporting to me. One is the

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“We have to resist the temptation to jump immediately onto new technologies without fully understanding the impact they may have on the brand, or if the returns are worth the resources to pursue them.“ marketing team, which includes a couple of marketing managers who drive the development, execution, and communication of our marketing calendar, LSM support, digital initiatives, and menu development. Unlike at some of the other brands I have been a part of, Charleys also has an internal graphics team that reports to me and does a great job of designing and producing most of our marketing communications materials. The other is a small cross-functional concept development team of four associates challenged with creating and executing an entirely new premium QSR/fast casual chain capable of aggressive franchise development. Why is it so important for the marketing department to have a “personal touch” when it comes to helping the brand connect with franchise prospects? There are lots of restaurant industry franchise opportunities to choose from. A brand not only has to credibly demonstrate an attractive financial model—that’s table stakes just to get into the consideration set—it also has to demonstrate a high level of continued support. Marketing is essential to a franchisee’s continued success, and a franchisee prospect needs to be comfortable that the brand is on the right strategic path. Franchisees need to know they have channels and direct access to voice their feedback, ideas, and concerns. Prospects, in addition to spending time with me and other members of the executive team during their initial visit to the support center, also spend dedicated time with the marketing department learning about the layers of the marketing calendar, the expectations of their active

engagement in marketing their location, and all the ways we can support them in their future success. The prospects get to know several senior marketing associates by name before they ever open their first location, so they start their Charleys experience knowing they already have a direct line if they ever need it. How does this help your franchise sales and development effort? Much of our PR efforts are dedicated to attracting new franchisees to the concept. However, the primary activity I am responsible for that helps drive the development efforts is the creation of a second concept to create more growth opportunity for our existing franchisees. What tools do you rely on to do this? We just released a new LSM program with an online resource to help them plan and execute their LSM efforts. Our marketing representatives here in the support center and our franchise business consultants in the field partner with them in identifying opportunities to market their restaurants in their communities and help them execute against their plans. Do today’s prospects expect more from the franchise marketing department? What, and how do you provide it? In today’s ever-increasing competitive restaurant market, franchisee prospects understand that marketing will be essential to their future success. More than ever, we see new prospects inquiring about the level of support they will get from the marketing department and about our approach to marketing the brand. How is today’s consumer and marketing data helping you fine-tune your marketing initiatives? We are starting to skim the surface in this area. We have several older POS platforms in the system and we now have a plan and timeline in place to transition into a new POS platform that will greatly enhance our abilities to mine more data. Describe the evolving role of social media in your brand’s marketing efforts. We are dedicating more efforts in social media. We recently started partnering with outside expertise to help us mold our social media strategy and

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execute against it. It’s an ongoing education because the landscape is constantly changing. We’re starting to see some real traction take place, but there’s still a lot more we plan to be doing in this space. It’s a very efficient tool for building personal and meaningful relationships with our most valuable guests and increasing their brand engagement. How do you manage costs and budgets for the marketing department? Pretty typically for the industry. We set our budgets annually based on a combination of anticipated needs, desired results, and projected contribution rates, and monitor our coinciding expenditures monthly. Do you see vendors as business partners? Why/why not? I have always believed that the more you can develop a vendor into a strategic partner, the more valuable the relationship and their contribution to your success. The better they understand what you are trying to achieve, the more likely they are to be

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“We have come to realize that we no longer create brands and deliver them from the ivory tower. Brands are being cocreated and recreated every day, and we have to be actively participating with our co-creators every day, all day.” able to provide you with the best possible solution. The worst thing you can do is assume you have the best answer and just turn to your vendor to fulfill your order. How have marketing strategies/ tools changed over the past decade? How have you adapted? I

have become less reliant on mass media and have turned to more personalized digital experiences. More than ever, we have the ability to be very targeted, personal, and efficient with our media spends and our guest experience. Over the past years we have come to realize that we no longer create brands and deliver them from the ivory tower on the mountaintop. Brands are being cocreated and recreated every day, and we have to be actively participating with our co-creators every day, all day. It’s a much more labor-intensive process, but the results are far more rewarding. What advice would you offer to aspiring marketing leaders? Gain a deep and thorough understanding of the financial model and operational model of your business. This will greatly help you in developing economically and operationally feasible initiatives. It will also help you gain credibility with your peers so that you have their support when it comes time to execute. n

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CONSUMER MARKETING

CMOroundtable “AS THE ROLE OF BIG DATA IN STRATEGIC MARKET PLANNING GROWS, HOW DOES IT AFFECT YOUR LONG-TERM MARKETING PLANS, FORECASTING, EFFICIENCY/ROI OF YOUR MEDIA SPEND, OR OTHER PARTS OF YOUR MARKETING?” Steve Rockman Chief Marketing Officer TruFusion At TruFusion, we market primarily to the Millennial, specifically females. Because of this, we are talking to the most highly connected generation yet, with their access to instant information. Millennials speak in data, and if we can collect, analyze, and react to this data in a timely and accurate manner, we will greatly increase our chances to develop a long-term relationship with these consumers. Our entire business model is predicated on technology, from our POS system, which tracks member sign-up and class check-ins, to every purchase members make in one of our studios. And, in trying to stay ahead of our customer’s needs, we recently introduced TruConnect, our member app that integrates mobile and beacon technology. By analyzing and processing this data, we are able to determine new marketing campaigns and one-to-one communication strategies. A specific example is a member

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who takes three physically demanding boot camp classes in one week. Based on this data, we offer them a discount on cryotherapy, a recovery therapy we provide. Each day we are looking at key pieces of data and making decisions based on that data. We are overlaying third-party data to give us a better member profile. Our marketing cycles have shortened, and the technology has made us much more proactive in our communication. It has allowed us to build relevancy with our members and has improved our customer service dramatically.

“Our marketing cycles have shortened, and the technology has made us much more proactive.” We are intensely focused on driving ROI and new customer acquisition. However, we realize that our consumer is heavily distracted because they have access to information 24/7, multi-tasking mentalities, and busy lifestyles. Because of these factors, big data allows us to work through media fragmentation by targeting personalized messages based on unique variables we have captured. Our marketing will be based not just on demographic or geographic information, but also on contextual likes or dislikes to allow us to deliver our marketing messages to the right person at the right time through the right media channel. We can now deliver messages by email, direct mail, or weekly magazines to the right city block, or even homes, based on the data. Additionally, we can deliver a digital message to try TruFusion to a potential member when they walk into a competitor’s studio. This is done through our ability to collect big data, analyze that data in real time, and based on that analysis send relevant messages immediately.

Josh Cole Chief Marketing Officer Sky Zone Data is central to Sky Zone’s strategy as our franchise network continues to grow rapidly. In regards to media spend efficiency, we have shifted a very significant portion of our national ad fund marketing to digital, where we are extremely focused on pinpoint audience targeting by geography and interest. Additionally, we are currently building a unique in-house POS and guest engagement system that will provide our guests with activity tracking and other benefits, which in turn will allow us to better understand their preferences. We’ll use this information to personalize our marketing communications to make our messages more relevant and compelling. The technology underpinning this system is a top strategic priority for our whole company, and our marketing strategies will increasingly be based on how to use this increased access to data to better engage and inform our guests. n

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CONSUMER MARKETING

Social media

Snapchat Lessons

Learning from changes in customer behavior BY ADAM PIERNO

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f you’re paying attention to media, you know that Snapchat is being crowned the new social media (if not total media) darling. You may know it as the disappearing messages app, but that is an oversimplification and overlooks what makes it so popular and heavily used. How heavily? According to Bloomberg, 150 million people use the app each day—more daily users than Twitter; and comScore reports that 60 percent of 13to 34-year-old smartphone users in the U.S. use the app. So much has already been written about this trendy app. Perhaps you’re interested in knowing why people love Snapchat so much. Or maybe you’re a user and want to know how to improve your own experience. Rather than a “how-to” story about using Snapchat to promote your business, this column is about understanding some key behaviors behind its usage. 1) Be in the moment Unlike many photo sharing apps (I’m looking at you, Instagram), Snapchat doesn’t allow for “curation.” Upon opening the app, users are beckoned to take a photo or video immediately. There’s no room for being overly precious. Snapchat is saying, “Let’s focus on what’s really happening, right now.” The immediacy of the snaps users see is one thing that makes the app so addictive. • How does this apply to your business? Focus on the moment. Snapchat is reminding us that what’s actually happening is what’s important. Sure there are still a significant number of people sharing processed pictures of their meals and events, but that’s not everything. The memory that makes an impression is the greeting and the conversation you had before your oil change, not the 45 minutes you spent waiting. Pay attention to the moments you’re creating for your customers with

your training and operations, and be sure your team is staying in the moment when engaging with customers. 2) Use your imagination Is Snapchat all about capturing the moment in 100 percent journalistic reality? Thankfully, no. Users find ways to “edit” videos by shooting them in short, inventive sequences. And they add to their photos with text and drawings to explain, direct focus, or just have ridiculous amounts of fun. People draw themselves into costumes or have items “instantly” appear

The memory that makes an impression is the greeting and the conversation you had before your oil change, not the 45 minutes you spent waiting. Pay attention to the moments you’re creating for your customers.

in their videos. • How does this apply to your business? We know that past experience is the driver for future visits. In a study conducted by Santy, 57 percent of 18- to 34-year-olds said they base their next dining decision on past experience. People don’t want boring. It doesn’t mean you need to add the fountains of the Bellagio to your business. It means you have to shop your store and work with staff to identify new ways to add those “Wow” moments to regular visits. Be inventive. It could be through a surprise item, art in the store, or other personal touches. 3) Personal, not broadcast Unlike most social media platforms, Snapchat doesn’t display the number of followers of an account. And when the app launched, there was no mass distribution system. As a result, snaps feel direct, as if they were created just for the viewer. Even viewing a story created by a popular user or a brand feels more personal because it is viewed directly by one user at a time on their device. It creates a real response from the viewer, as well as an increased focus on the content. • How does this apply to your business? This is simple, but easily forgotten. Think of yourself as a customer somewhere besides your own business. How do you like to be treated? Do you prefer massproduced, one-size-fits-all service? I doubt it. People want to feel special, important, or at least worth good treatment. Create bridges to your customers through service initiatives or a loyalty program that allows you to respond based on what they like (and don’t like) about your business. Conclusion Every new trend offers insights about the way people and behavior are changing. The key is to allow yourself not to think literally about the trend (in this case a piece of software). Instead, look for similar and differing behaviors of your customers and staff—and change accordingly. ■ Adam Pierno, director of brand strategy and planning at Santy, unearths Millennial insights at the convergence of media, technology, and the marketplace. These insights lead to positive and revenue-enhancing change for clients. Contact him at apierno@santy.com or 480-710-4243.

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CONSUMER MARKETING

Customer service

“I Can’t Live Without It!”

Six things that make a brand indispensable BY JOHN DIJULIUS

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e all have a company or two that we can’t fathom life without. What are the few companies that if I told you, “You can no longer do business with them, ever again?” you would become extremely upset? When I ask my audiences this question, the same brands always get mentioned: Apple, Starbucks, Nordstrom, and Amazon, along with numerous local mom-and-pop shops. Now the important part is to think about what they have done and what they consistently do to make you so loyal, to make you feel that you cannot live without them. That is power. That is brand loyalty. The more people you can make feel like they cannot live without your brand, the closer you are to making price irrelevant. The key deciding factors to being a business people cannot live without are: 1) great service/product; 2) consistency; 3) ease of doing business; 4) employee evangelists; 5) educate versus sell; and 6) personalized experience. Let’s take them one at a time. 1) Great service/product. This is a given. It is the price of admission that your product or service better be damn good. However, this is typically not even listed in the top three reasons people love a brand. A company is in trouble if it is relying on its product or service to differentiate them in their market. Today every product or service is eventually commoditized. 2) Consistency. This is huge and cannot be overemphasized. More than anything else, customers want brands to be brilliant at the basics. Forget the bells and whistles; just be consistent, reliable, accurate, and friendly in every interaction. Don’t make it dependent on which location or which employee your customer deals with.

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3) Ease of doing business. See Amazon. See Zappos. See Nordstrom. See Uber. Amazon is the easiest and most convenient company for purchasing, from one-click to returns to customer support. Companies like Zappos and Nordstrom do not have return policies. Bring it back in a year; you don’t need your receipt. Does your company have policies and rules to make your life more convenient? How easy is it to speak to a human being? How easy is it to find a phone number on your website? Is the buying experience for your customers convenient for them, or for your company?

4) Employee evangelist. Great brands have employee evangelists for two things: 1) what they do, and 2) the brand they do it for. Shop at Teavana (owned by Starbucks). Their employees love the product, love helping and discussing the benefits of different types of tea, and they love working for Teavana. 5) Educate versus sell. The best

brands teach their employees to educate customers, as opposed to sell to them. I love technology. The moment something new is released, I have to have it (worst thing a consumer can do). One time, when Apple released a new iPad, I ran into the Apple store to upgrade. When the Apple employee asked me what I wanted, I said, “I currently have the iPad, but I want the iPad 2.” He could not have had an easier sale. However, he asked me what I used my iPad for. I said, “For email, surfing the Internet, social media, and I read articles and books on it.” He said, “Do you play games or watch movies?” I replied, “No, never.” He said, “Don’t get it. It won’t be worth it. The big difference between the iPad and iPad 2 is the resolution that you would appreciate only if you played games or watched movies.” I couldn’t believe he talked me out of spending $500. I was actually bummed! I said, “Well, maybe I will start playing games.” Seriously, I would have bought anything in the store from this employee after that. He wasn’t about selling me; he was about educating me and making sure I spent my money wisely. 6) Personalized experiences. Every regular customer at Starbucks has “their order.” It is unique, different from anyone else’s. It usually is something long and complicated like a “grande single shot 4 pumps sugar free peppermint nonfat extra hot no foam light whip stirred white mocha.” Did you know there are more than 80,000 ways you can order your Starbucks drink? What is easier, and more personalized, than that? Conclusion How can you be the company your customers cannot live without? Review the six things that make a company a brand that customers cannot live without. Do an audit of how your company fares in each of the six categories and see where you can improve, so you can become the brand your customers can’t live without. ■ John R. DiJulius III is the author of The Customer Service Revolution and president of The DiJulius Group, a customer service consulting firm whose clients include Starbucks, Chick-fil-A, The Ritz-Carlton, Nestle, PwC, Lexus, and many more. Email him at john@ thedijuliusgroup.com.

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GROWING YOUR SYSTEM BY HELEN BOND

Going Big data: Extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions. (Oxford Dictionaries)

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BIG DATA HAS GREAT VALUE— IF YOU KNOW HOW TO USE IT

hen Tropical Smoothie Cafe pondered an ingredient upgrade to a popular smoothie, the brand turned to data for direction. Using information culled from its recently launched app, the company surveyed customers who regularly ordered the smoothie and pulled together a blind taste test of 50 customers in its hometown of Atlanta. Within days, the franchisor was armed with enough insight to launch a test market of the tweaked drink, a menu move that previously would have taken weeks or months and often required hiring outside help. Big data is changing the Mike Rotondo way franchise brands do business. Franchisors large and small are making the dash to take advantage of the staggering amounts of increasingly accessible digital data to carry out strategic business moves, cut costs, and boost profits in all facets of their operations. “The ability to have data at your fingertips to help make decisions has been a game changer for all industries, but specifically in franchising,” says Tropical Smoothie CEO Mike Rotondo, who has implemented a myriad of big data initiatives to engage and reward customers and drive decisions designed for growth.

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Whether through an internal system, thirdparty software, or both, franchisors are finding that tracking customers’ digital and social media footprints can be a powerful ally in analyzing, predicting, and prescribing targeted marketing campaigns and strategies. POS and CRM systems, especially when coupled, offer franchisors the data they need to deliver personalized promotions, track trends, retain customers, boost traffic, and automate media buys. On the franchise development side, data is being used to predict the potential success of a franchisee, to make better site selections, and to improve operations, staffing, and franchise relations. The brand’s Tropical Rewards App, beta tested earlier this year and launched system-wide in June, unites mobile payments, digital ordering, and a loyalty program that includes gamification elements to allow customers to unlock perks and offers for its smoothies and food at the chain’s 500 cafes. More important, the app (which at last count had a half a million downloads and 125,000 active users) brings together the brand’s digital consumer programs and delivers data that provides invaluable insights into its customers’ behavior. Over time, this will allow Tropical Smoothie to sunset its other digital communication methods to ensure a single data source. Rotondo views the increasing reliance on data analytics as an evolution for his

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company. “We’ve done well. We’ve been lucky, made good decisions, and had good intuition,” he says. However, he adds, “That is not scalable. It is not going to get this brand to 1,000 locations. What I have embraced, what I try to tell my team to embrace, and what I encourage other CEOs of small to mid-sized companies to consider, is that if you really want to scale, you have to embrace the concept that your intuition is going to get you only so far. You may know your business better than anyone else, but you must have data to support what it is you want to do.” Franchisors are finding that while it’s one thing to collect and analyze data, it’s what you do with it Rich Hope that matters. “The mistake people make is that they look at the data, but they haven’t honed in on what is the question,” says Rotondo. “Before you go get the data, make sure everyone is aligned on what the problem is you are trying to solve, what the question is you are trying to answer. Sometimes that is a step that gets missed.” Also, he says, with the rapid-fire development of new technologies, apps, and third parties offering “big data” solutions, brands are grappling with how to turn consumer information into actionable insights and avoid getting caught up in the analysis paralysis trap while the competition marches on. Start making sense Jersey Mike’s Subs, with 1,500 locations open and under development, is in the process of consolidating the chain’s reward, texting, online ordering, and email databases to create customer profiles and leverage powerful amounts of information and point-of-sale data. The brand’s Shore Points Rewards program accounts for 30 percent of its customers and 33 percent of sales. The brand’s email database tops 1.4 million, and the company recently wrapped up a two-month campaign designed to entice new and existing

customers to create an online account in exchange for a free sandwich. “Gathering the data is not so difficult,” says Rich Hope, Jersey Mike’s chief marketing officer. “Harnessing, making sense out of the data, and acting upon it in some way, in terms of marketing, becomes trickier. That is what we are doing now.” The move to bring together all the chain’s digital sources will allow Jersey Mike’s to know their customers more intimately and serve up offers based on their preferences, says Hope. The resulting database marketing is akin to a modern-day coupon, a strategy that appeals to franchisees. “It’s incredibly trackable and quantifiable,” says Hope. “You can look at any single offer you do or any group of people you send to and analyze if it worked or didn’t work, based on your benchmarks. It’s Chad Graham analytically driven. Every single thing can be looked at and reviewed. That is the beauty of it.” While learning what and when they order is ultimately designed to better serve customers, collecting that information can be a headache that both franchisors and franchisees must be ready to handle, says Hope. “When you do something that involves technology, as simple as you try to make it, people aren’t always going to get the process. So whenever you do anything like that, you better be ready on the customer relations side because there are going to be questions—and you need to be able to handle those questions.”

Data for the system While consumer marketing dominates headlines about big data and brands develop a deeper understanding of their customers’ behaviors and preferences, franchisors also are finding a multitude of ways to use data to build a stronger system. American Driveline Systems, parent company of Aamco Transmissions and Total Car Care, is using technology to transform all operational facets of the automotive service company. Chad Graham came on board last year as CIO to upgrade and fully integrate the brand’s nearly 700 service centers in the U.S. and Canada. The result is two new initiatives: 1) a franchise relationship management (FRM) system, and 2) a new cloud-based POS shop management system, the company’s first sales system change in 20 years. The FRM system includes two web portals: one internal, for the franchisor to manage franchisee support; and a customer portal, which will give franchisees a dashboard window into how they stack up against their peers in areas such as revenue, expenses, and online reputation. The company partnered with AutoZone’s Alldata to develop the Aamco Management System, which will include new POS capabilities as well as shop management tools, including advanced scheduling and parts ordering. The new system will be rolled out chain-wide this year and be used to drive marketing decisions. Graham says a key part of the company’s transition to the new systems is the construction of a large data warehouse that will connect all currently available system data and fold in new information sources. “The secret in the sauce is the back-end data warehouse and information repository we are building,” he says. “We can store bulk-level data that we have captured in the field from data partners, and from our sister business, Global Powertrain Systems, and use that information to better understand Franchiseupdate I S S U E I I I , 2016

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Jim Gregory

both the conditions in the field and our customers.” Graham says capturing all this data will change the way the franchisor delivers valuable marketing and performance metrics to franchisees so they can take action based on that data. Data from the company’s developing FRM and POS-linked systems will give franchisees more and better information than they have ever seen before. “They will be able to see how their store is performing on leads, conversions, expenses, profitability, and growth in quite a bit of grain and detail—trend data historically and compared to their peers. What they are going to have is great insight into their business to drive best practices,” says Jim Gregory, CFO at American Driveline Systems. “We win when the franchisees win,” he says. “Our whole strategy is geared toward making the stores profitable. We firmly believe that is how we are going to make money and how our brand is going to grow.”

year-end, an increasingly vital task as the chain focuses on aggressive growth through large multi-unit franchisee agreements as it expands beyond its mid-Atlantic roots. The regional chain, known for its sameday, one-low-price service, currently has 45 largely single-owned stores open and another 200 under development. In April, the brand signed an area development agreement for 110 locations in Southern California over the next 15 years, its largest deal to date. Until the new system is in place, Phillips is sending individual store reports on customer retention, which already is reaping dividends for franchisees of the high-volume brand, where mature stores can serve as many as 15,000 customers. “Our chain is very consistent across the stores,” says Phillips. “The top 10 to 12 percent of customers on a store-by store basis spend 50 to 55 percent of the money, while the top 20 percent of customers spend 70 to 75 percent of the money. We want to show appreciation to those regular customers. We want to identify them and let them know their business is appreciated.” Phillips says the technology will provide valuable feedback to boost both customer service and franchisee operations. “Information is only worthwhile if it gets used,” he says. “Once you start that process, you will get so much feedback. Most of it is about communicating the right information that can be put to effective use.” Data for franchisees While big data is helping franchisors help franchisees target, predict, and influence

customer choices and provide better service, analytics also can ensure that brands provide franchisees with the tools they need to succeed. Tropical Smoothie has turned to thirdparty providers to track customer service satisfaction and to reduce waste. In July, the company announced its adoption of Jolt, a paperless restaurant operations system designed to streamline cafe operations and improve hospitality and crew member training to save franchisees time and money—as well as paper. The brand also uses detailed demographic and psychographic intelligence to pinpoint prime real estate locations and avoid encroachment. Tropical Smoothie “probably denies more locations than we approve based on encroachment of another franchisee,” says Rotondo. For franchisors, the task of what to do with the constantly increasing trove of data must remain centered on customer service (both consumers and franchisees), while investments in technology remain focused on ROI and tie in with overall marketing strategies. The ability to capture transactional, service, and social data—already plenty powerful—is only expected to gain traction and continue to grow in the world of franchising. “The ability to analyze and effectively use that data will be the challenge going forward,” says Jersey Mike’s Hope. “The man hours, computer hours—it’s a huge effort to crunch, understand, and effectively use it. While we are gathering data at a breakneck pace, we haven’t scratched the surface on how it is used.” ■

Terry Phillips

Data for expansion Terry Phillips joined Zips Dry Cleaners in 2015 as director of IT and analytics, charged with bringing together franchisee store information in a central location. At the time, the chain had 42 locations—on 42 different servers. While the data was structured identically at each location, a single report for all 42 stores did not exist. Phillips, who spent 29 years in manufacturing before joining Zips, plans to use a cloud-based system to consolidate franchisee data in a central repository by

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GROWING YOUR SYSTEM

Challenge the pros “HOW DO YOU ANALYZE, INTEGRATE, AND APPLY KEY CUSTOMER DATA IN YOUR FRANCHISE RECRUITING AND DEVELOPMENT EFFORTS?” Jeff Salter Founder and CEO Caring Senior Service We profile each franchise owner and then monitor their individual location results. We categorize the locations based on size of staff and other factors to give us a useful gauge based on a results profile. We then profile each franchise prospect based on both personality type questions and inhouse criteria. Once we have this profile, we compare it with franchisee profiles from existing locations and try to get some sense of likely success based on the information we’ve gathered. We share this information with franchise prospects so they can use the information in their decision making. We try not to use it to make a decision, but as a discussion point, and then let the candidate know of any profile items they may have to overcome to meet success. This way both parties use an “eyes wide open” approach. Our goal isn’t to eliminate candidates, but rather to allow candidates to opt out if they feel their personality, style, and drive won’t be a good fit for senior care. We don’t

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focus on whether they are right for Caring Senior Service, but on if a senior care business is right for them. Jim DiRugeris Vice President, Franchise Development Goddard Systems When working with current and prospective franchisees, a great deal goes into recruiting and development efforts. A major obstacle for many franchisors is identifying the right franchisees who will help grow the brand. As

“Location is also extremely important. It is imperative to review and follow current trends, including construction, real estate, licensing, and regulatory trends that may affect a potential location.” a franchise, it’s crucial to comprehend what makes a franchisee successful and then apply that information to development efforts. The Goddard School uses a wide variety of tools to analyze key customer data that assists us in future recruiting efforts. Recently, we introduced a Predictive Index Survey to the franchise awarding process. We survey our existing franchisees to get a better look at what characteristics are common among our top-performing franchisees. We then have the ability to pair these findings with prospective franchisee characteristics to see if they match up. Furthermore, if a prospective franchisee is lacking in a certain area, we are always willing to provide additional support to help fill any gaps. While we do not rely solely on the survey, it does give us additional information to review. This is one of the ways that we are able to integrate the information we have found into our development efforts.

Another way we ensure that we are getting to know future franchisees on a personal level is by organizing a “Meet Our Team” day. This in-person event allows prospective franchisees to meet with the extended leadership team and provides an excellent opportunity for questions and answers. Location is also extremely important in our development efforts. For our team, it is imperative to review and follow current trends, including construction, real estate, licensing, and regulatory trends that may affect a potential location. Goddard has deep knowledge in other areas of interest that are crucial for the success of a new location, and we really strive to educate our potential franchisees in the areas of real estate, construction, and state licensing trends. Additionally, we have a few key areas that we are focusing on growing this year which include Los Angeles, San Diego, Manhattan, Long Island, San Antonio, Boston, Florida, and Illinois. To expand our market presence in cities where young, Millennial families are starting to migrate, we have adapted our suburban model to fit a more metropolitan landscape. n

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GROWING YOUR SYSTEM

Salessmarts Big Data, Big Changes

Franchise development process must adapt BY JIM BENDER

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hat’s not to love about big data? To paraphrase Sandy Pentland, the big data guru at MIT: The power of big data is that it is information about what people do, not what they say. It’s the digital breadcrumbs you leave behind you as you move through life. Those breadcrumbs tell the story of your life. Who you actually are is determined by where you spend your time and which things you buy. And from that behavior, analysts can tell an enormous amount about you. We all look forward to the day when big data will identify candidates who exhibit the same behaviors as our best-performing franchise owners. Fill up my inbox, please! Today we can only imagine the impact that lead generation techniques enhanced with big data intelligence will have on the franchise development and sales process. It makes one think back to the last big change in franchise marketing that had a significant impact on the sales process. Several years ago, many brands began to proactively publish detailed information about their franchise through expanded websites, brochures, white papers, third-party evaluations, customer satisfaction ratings, social media interactions, and more. We were immediately presented with candidates who were better informed about multiple brands and curious about the good, the bad, and the ugly they had uncovered. Ready access to information enlightened candidates, creating pressure on the sales process to deal with a changing environment. For those whose sales process evolved to meet this challenge, the results have been nothing short of rewarding. Our experience with clients has been remarkably positive, with all parties agreeing that today we deliver higher-quality candidates who deliver better results than previous generations. Here is a short list of the more significant changes we have observed in the franchise sales process in the past several years. • From introduction to execution of

franchise agreements, today significantly more time is spent with each franchise candidate. Candidates arrive with more knowledge about a brand, causing the sales staff to cover more topics in more detail than previously. However today’s conversations are no longer about how processes and systems work. Leave the how-to to the training team. More relevant answers outline our knowledge of consumer behavior and weave the relationships among marketing, delivery, support systems, and the brand’s position. Candidates are making comparisons. This is your opportunity to demonstrate that your brand is smarter than others. • The style and tone of the sales process has evolved along with the candidate. Today, sales teams make only two comprehensive and formal presentations, both early in the process: a comprehensive program review and a highly targeted FDD review. These presentations provide a solid understanding of the business model, owner function, and the opportunity to succeed. All subsequent discussions take the tone of two experienced individuals talking about business. • During the program review and targeted FDD review, talk 80 percent of the time and answer questions 20 percent of the time. During all future conversations, listen 80 percent of the time and talk 20 percent of the time. Do not violate this rule. • During future contacts make your favorite questions: How are you going to do that? How are you going to staff? Market? Sell? Building an environment where the candidate expects to present to you (as opposed to passively listen) solidifies their understanding, causes them to envision themselves as the owner, and confirms their commitment to the brand. More important, it prepares them to present during the upcoming discovery day meeting. (Is that a new idea?) • Just before organizing a discovery day visit, have the candidate describe in detail their future outside of the world of busi-

ness. What is important to them? What values do they hold closely? What do they believe in? How do they define personal (not financial) success? More than ever before, the cultural and value match between candidate and company is the prime criterion for awarding a franchise. Trust, respect, and the ability to work together are in greater demand by candidate and company alike. • Just a day or two before discovery day, schedule a phone conference to discuss specifically what the candidate intends to present. These meetings have evolved away from store tours or show-and-tell presentations. They have become interactive events with the candidate presenting their understanding of the opportunity, an outline of their development plan, and examples of their ability and preparedness to execute. • Re-orient the top executives’ interaction during discovery day. Top executives need not discuss how to become successful, but what to do with success; about personal values and how success enables good people to do great things—care for family, develop the careers of staff members, or give back to the community. These conversations support what the candidate has learned about the people behind the brand. And they provide an opportunity for the candidate to describe how they fit. Conclusion It will not be long before the use of big data identifies franchise candidates with expectations more advanced than today. Those expectations will pressure the sales process to evolve further. Whether we use big data or little data, franchise development will always be about making the best match possible between the franchise owner and the brand. Only when both parties succeed can we say we have done our job well. Happy Selling, Jim Jim Bender is the president and owner of Franchise System Builders. He has been involved in franchising for 37 years and has provided clients with sales outsourcing and concept packaging services since 2002. Contact him at jtbender@franchisesystembuilders.com or 248-647-1989.

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BY KERRY PIPES & EDDY GOLDBERG

OPPORTUNITY BECKONS 2016 Multi-Unit Franchising Conference delivers again

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as Vegas, home of the high rollers, once again played host to the annual Multi-Unit Franchising Conference this spring at Caesars Palace. For the 16th consecutive year, multi-unit franchisees, franchise brands, and thirdparty suppliers gathered in the high desert to share ideas, exchange information, and of course do a little business. This year’s event was another home run, with attendees at an all-time high and a long waiting list for booths in the Exhibit Hall. More than 650 franchisees attended this year, a new conference record. Their aggregate numbers were impressive: more than 12,000 operating units, revenues topping $11 billion in the past 12 months, and 120,000-plus employees in the U.S. Fore charity! The conference, which ran from Wednesday through Friday, kicked into motion on Tuesday for the nearly 100 attendees who showed up a day early to participate in the event’s annual fundraising golf tournament. The beautiful Arroyo Golf Club at Red Rock hosted the scramble-style tournament, which has become a signature event, not only for a chance to play golf and have some fun in the beautiful

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Michael Kulp, conference chairman

CONFERENCE BY THE NUMBERS A quick summary of some aggregated statistics from the 16th annual Multi-Unit Franchising Conference in Las Vegas this past April: • Attendees: 1,566 • Franchisees: 652 • Units: 12,000+ • Exhibitors: 250+ • Revenues: $11 billion+ • Employees: 120,000+

Nevada desert, but also to participate in raising significant sums for charity in the process. Combined with the Silent Auction, held in the Exhibit Hall throughout the conference, the tournament helps raise tens of thousands of dollars for worthy causes, notably the Little Rock Foundation, an organization of parents with children living with blindness, visual impairment, and other disabilities. That evening, a welcome reception at Carmine’s Italian restaurant inside the Forum Shops in Caesars Palace served as the official kick-off event for the conference. The reception featured cocktails, hors d’oeuvres, and plenty of lively conversation. The first hour offered first-time attendees an opportunity to meet Conference Advisory Board members and learn more about the conference before the veteran attendees showed up to reconnect. Day 1: Let the gains begin The registration desk opened early Wednesday morning and the hallways began to buzz with anticipation as attendees fueled up on coffee and a light breakfast before heading into the first general session. In her opening remarks, Therese Thilgen, CEO of Franchise Update Media, wel-

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2016 M U L T I - U N I T F R A N C H I S I N G C O N F E R E N C E

ability, provide opportunities for employees, and participate more effectively in local communities? This conference, he said, was a great way to ensure that they would.

Therese Thilgen, CEO, Franchise Update comed what she called a “stellar group” of multi-unit franchisees and panelists. She noted that this was the first time the conference had attendees from every state; that there was an uptick in the number of franchisees in their 20s; and that 75 percent of franchisees said they were looking for new brands. Michael Kulp, chair of this year’s conference and a multi-brand franchisee with more than 350 units, added his welcome message to the roomful of franchisees, thanking the golfers for their charitable contributions the day before and setting the tone for the coming days. Kulp said this conference differentiates itself by being “truly the only conference in the industry geared toward learning” versus those geared toward the deal and the sale. (Still, plenty of deal-making takes place during and soon after the conference.) “I think it’s the best time ever to be a franchisee,” he said, as he challenged franchisees with a flurry of questions to continually strive to do better, such as: Do you have the systems, tools, processes, and strategies in place to expand, raise profit-

Jim Collins! World-renowned leadership guru and best-selling author Jim Collins started the day on a high note as the conference’s first speaker. He was introduced by Cheryl Fletcher of Popeyes Louisiana Kitchen, which sponsored his keynote address. Returning for a second time as a keynoter, Collins adapted 12 questions from his Good to Great project to help attendees unravel some of the secrets of business success. (The 12 questions can be found in a PDF on his website.) He began by saying, “We don’t study success. We study the contrast between those who went from good to great and those who didn’t; between those who were able to scale and those who didn’t.” Like any good teacher, he wove thoughtprovoking questions into his examples of

Jim Collins, keynote speaker

Gary Gardner, Franchise Update chairman what makes businesses succeed or fail, such as “What are you doing to scale yourself?” He also discussed five levels of leadership, dismissing the notion of a “natural born leader” in the process: “The vast majority of great leaders grew into it,” he said. The single most important leadership skill to master, he said, is the ability to make superb people decisions and have 90 percent of your company’s key seats filled with the right people. “You build a great company by building great people. There is no other way,” he told the crowd. Collins also discussed ROL: return on luck in business, using Steve Jobs as example of “who” luck. Three years after Jobs was fired by Apple, and with his new company (NeXT) floundering and Pixar not yet in the picture, Jobs was “in the wilderness,” said Collins, which he said is “a good time to meet a great person.” So Collins, who was teaching at Stanford, called Jobs and asked if he’d join him in the classroom. Jobs accepted. Soon afterward, came the luck: Apple was struggling and NeXT just happened to have the OS they needed to move forward and become

(L-R) Michael Kulp, Carin Stutz, Aziz Hashim, Jim Collins

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Greg Vojnovic, Arby’s the largest company in the world. Jobs, said Collins, was a great example of a “20-mile marcher,” someone who got up and went to work every day, despite external circumstances. “What if in the midst of all the bad stuff he quit?” asked Collins. “True creators stay in the game, no matter what hand they’re dealt. Play every hand, luck favors the persistent. That’s what Jobs did and he enjoyed a great comeback.” Collins finished his keynote by reminding attendees that “the greatest leaders don’t focus on success; they focus on taking care of their people.” He closed with the following exhortation: “How will you change the lives of others? How will some peoples’ lives be better and different because you are here on this planet?” He suggested viewing franchising as “an honorable path—not just building units, but touching lives that you change. I can think of no greater legacy or testament to how life could be spent.” Following his keynote, Collins joined a group discussion called “Growth Evaluation & Implementation.” Supercuts franchisee Gary Robins moderated the panel, which also included Aziz Hashim, managing partner of NRD Capital and IFA

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chair; Michael Kulp, conference chair; and Carin Stutz, president of McAlister’s Deli (now COO at Red Robin). With questions from Robins leading the way, the high-powered panel covered issues ranging from essential leadership traits and characteristics to finding and building talent within your organization. “There’s a difference between having a job and having a responsibility,” said Hashim, of people inside an organization and, he added, it’s essential to be able to tell the difference. Time for lunch After an inspiring, action-packed morning, two separate luncheons followed, one exclusively for franchisees, the other for franchisors and exhibitors. The franchisor/ supplier luncheon featured a discussion

focused on “5 Deal Killers for Multi-Unit Franchisees.” At the franchisee-only luncheon, multi-unit franchisees relaxed in a “pitch-free” environment where they could rekindle old relationships and build new ones, as well as engage in frank discussions about the pros and cons of adding specific brands and their level of satisfaction with third-party partners. A new offering, The Money Room, debuted that afternoon, providing an opportunity for growth-minded franchises to

Dave Goebel, multi-unit franchisee meet one-on-one with potential lenders to discuss financial solutions and expansion strategies. At the same time, numerous breakout sessions were under way, covering topics ranging from attracting, recruiting, and retaining good talent to securing funding under $10 million and above $20 million. Breakout panelists represented food and non-food brands, large and small operators, and retail and non-retail brands. As the day drew to a close, attendees headed to the Exhibit Hall, where more than 200 franchise brands and thirdparty suppliers were on display to discuss franchise opportunities, products, and services. The Exhibit Hall served as the central gathering place for attendees to explore new brands and supplier solutions, as well as to meet and mingle with fellow franchisees to compare notes and evaluate brands and vendors. Day 2: The Economy & MVPs Coffee and continental breakfast awaited attendees on Day 2. Conference Chair Michael Kulp welcomed the crowd back before introducing FRANdata President and CEO Darrell Johnson for his annual report on economic trends and their likely effect on franchising. Johnson provided insight into the labor picture (tight), capital markets (improving), and the effect of the global economy on franchising (“not a whole lot or excitement but nothing eminently a challenge for worldwide growth”). And while the U.S. has seen its longest consecutive bull market in the past 100 years, “It doesn’t feel like much of a bull market,” he said, with GDP growth expected to remain low in the next couple of years (2% to 3% at best), following a dismal 1.4 percent rise in the fourth quarter and an anemic 0.5 percent growth in the first quarter of this

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Darrell Johnson, FRANdata year. And the Fed, he added, is “just about out of tools and energy to stoke growth.” Still, he said, it’s not as bad as the numbers might indicate. The year following a presidential election tends to be a fairly good one in the 4-year election cycle (no matter who the president is). Pairing that with consumer optimism about where the economy will be in the next 24 months, along with financial factors—such as low interest rates and multi-unit franchisees being the “darlings” of lenders these days—the capital market side is playing to the strengths of multi-unit operators. As he’s said before, with the pie growing so slowly, the “real battle right now is for market share.” Strong brands and savvy franchisees stand to gain, as performance will matter more in today’s business climate. “The economy won’t bail out a bad business decision, but will punish it,” he said. The good news? The opposite is true for good decisions. He reminded attendees that franchising is the largest vocational training program in the country for unskilled labor. “We’re the biggest solution for that,” he said, and expressed concern about external factors such as minimum wage increases. With all this in the mix, he told the audience

of multi-unit franchisees, “This year and next should present you with a pretty good environment in which to grow.” Next up was the recognition and presentation of plaques to honor this year’s MVP (Most Valuable Performer) Award winners—multi-unit franchisees who have taken advantage of the opportunities life and the economy have presented them. The annual award celebrates multi-unit franchisees for their contributions to their brands, their community, and their employees. Joe Theismann, inspiration Then it was on to Day 2’s keynote speaker, Joe Theismann, one of pro football’s alltime great quarterbacks. Following an introduction by Greg Vojnovic of Arby’s, which sponsored the keynote, Theismann thrilled and energized the crowd with tales of his 12 years in the NFL with the Washington Redskins. The 1982 Super Bowl champion, two-time Pro Bowler,

Joe Theismann, keynote speaker

and league MVP saw his playing days cut short in 1985 when a severe (and dramatic) leg injury ended his career. He went on to become an NFL broadcaster and restaurant owner—as well as an active member of his community. “It’s only when you start to give back that we truly appreciate what success is,” he said. Theismann shared entertaining, educational stories from his own life about overcoming adversity and creating success. “I never had a failure in my life—just an educational experience that didn’t go my way,” he quipped. “Change is just a part of life.” But, he pointed out, people can’t be their best without help. “You have great teachers and mentors in this room,” he said. However, he added, you must be coachable, something he struggled with early in his NFL career when he thought he knew it all. “You really don’t know everything.” Theismann spent the remainder of his time outlining the importance of having goals (“What price are you willing to pay for being special?”); maintaining a good attitude (“What do you say when you look in the mirror in the morning?”); and being motivated to achieve (“Competition is what drives us. I am not a fan of participation trophies.”). Panel of pros Theismann’s inspiring talk was followed by a general session panel called “How To Select a New Brand.” Tom Garrett, CEO of GPS Hospitality (Burger King and Popeyes franchisee and former Arby’s CEO), led a star-studded panel consisting of Eric Werner (president of Texas Subs, a large Subway franchisee); Dave Goebel (Pie Five Pizza franchisee and former Applebee’s CEO); and Matthew

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That evening, a cocktail reception in the Exhibit Hall provided attendees one last chance to meet with brands, vendors, and to move deals to the next level.

Kelly, partner and managing director of North Point Advisors, a financial advisory firm. The panel touched on what criteria they use to evaluate a new brand; the importance of starting with a strategy (not a brand) in mind; the importance of timing in both the marketplace and within one’s own portfolio; the pros and cons of going with an established brand or an emerging one; and once the decision is made, how to finance the new growth. Lunch in the Exhibit Hall followed, after which franchisees had another crack at one-on-one meetings in The Money Room, while concurrent breakout sessions fired back up. Sessions included “Mergers & Acquisitions: Buying a Business”; “Labor Environment: NLRB, Minimum Wage”; “Mobile & Loyalty Marketing”; and “Professional Athletes in Franchising: Tapping Into a New Source of Capital and Brand Expansion.”

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Day 3: Advice from the top The event wrapped with Friday morning’s closing session, “Open Forum with Successful Multi-Unit Franchisees,” in which successful multi-unit franchisees told the stories of their own journey, with lessons aplenty based on what they encountered along the way and what they’d recommend to others seeking to build up their own organizations. Mara Fortin, the first franchisee of Nothing Bundt Cakes who now operates seven bakeries, led a panel that included Greg Cutchall, a multi-brand franchisee based in Omaha, who last year became a franchisor (Lolo’s Chicken); Cheryl Robinson, who with her husband Joey, operates 37 Supercuts salons; Tony Lutfi, with eight brands, who began with food brands and has added Sears stores; and John Hotchkiss, who operates 42 Little Caesars and 3 Firehouse Subs. Each described their life in franchising, how they started, and how some things had gone as planned while many others went in completely different directions—for better and for worse. Their stories were surprisingly frank about mistakes they’d made and the lessons they’d learned, and all were generous with advice for aspiring, growth-minded attendees. It was an enlightening conversation and the perfect

way to send everyone home to their own franchise businesses, reenergized and ready to apply the lessons and inspiration they’d soaked in over the past few days. “This is my second year attending this conference and I would not miss it,” said Allan Boomer, a Retro Fitness franchisee and managing partner of investment firm Momentum Advisors. “Every year I mark my calendar, and I’ll certainly be here next year.” Jim Hannan, vice president of operations at Schostak Family Restaurants, an Applebee’s, Del Taco, and MOD Pizza franchisee, said, “I really liked all the presenters and panels I’ve been to and the networking I’ve been able to do in the Exhibit Hall.” For more information on the conference, photos (you might be in one), or to learn about next year’s event, visit multiunitfranchisingconference.com. n

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Supplier Spotlight: BY KERRY PIPES

ONLINE MARKETING STING

Scorpion brings online marketing strategies and tactics to franchise brands

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nline marketing has become a big business and an even bigger opportunity. And the competitive marketplace of solution providers has grown crowded. When franchise brands need online marketing assistance in areas such as website development, search engine optimization (SEO), pay-per-click (PPC) advertising, video advertising, online reputation management, and social media marketing, it can be tough to find the right partner. One such partner is Scorpion. Originally founded in 2001 as a website design company, Scorpion has evolved into a multi-faceted online marketing solutions provider. The company offers numerous online marketing tools and even provides franchises with access to a content management system (CMS) that allows brands to quickly tailor their website, use a comprehensive lead tracking platform, and access an in-house team of digital marketing experts. “Our vision is to design engaging and responsive websites that inspire people to take action, then execute effective Internet marketing campaigns that give our franchise clients the most relevant exposure for their business. That combination helps the business acquire more of the customers they want,” says Scorpion Chief Revenue Officer Jamie Adams. But perhaps more important, he says, “We work best with businesses who want us to be an extension of their team. I don’t know of another Internet marketing company in the franchise space that doubles down on delivering

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more value than is expected like we do. That is core to our culture and the Scorpion DNA.” There are effective ways franchisors can better streamline their online marketing presence today.

For example, there’s no need for multiple websites for many franchisee locations, explains Adams. That can lead to inconsistent brand messaging and brand identity. That’s why Scorpion consolidates franchise websites into a single platform that gives the franchisor complete oversight of franchisee performance and control over brand identity, while simultaneously delivering effective local marketing for each franchisee. Says Adams, “With the majority of consumers living on their mobile devices and relying heavily on Internet search, online reviews, and social platforms to decide on everything from plumbers to in-home senior care providers, it’s more important than ever for a franchisor to have a single, reliable marketing solution that can deliver everything the brand and its franchisees need to acquire new customers on the Internet.” Adams says it’s important for franchises to map out their needs early, to define their ideal targets, including customer and revenue growth. He says Scorpion helps

develop marketing and advertising campaigns in conjunction with redesigning and consolidating websites. “Our campaigns focus on multiple factors, including local competition, customer demographics, and desired business growth. We provide a completely transparent customer experience every step of the way through the development and management of their campaigns.” Ch-ch-ch-changes Much has changed since 2001— heck, a lot has changed since 2011. Today, says Adams, it’s more important than ever for brands to continue to evolve online. Start by having a responsive website. Consumers are relying more and more on mobile devices to find businesses. “If your site looks bad on a smartphone, you’re going to lose business,” he says. It’s equally important to manage the franchise’s online reputation. Sites like Yelp, Facebook, and reviews on Google My Business pages are huge influencers for consumers when they’re choosing a service provider. A bad review of one franchise location can have ripple effects across the entire franchise network, explains Adams. Having an Internet marketing partner that can help you manage listings and reviews and improve your online reputation is a game changer for franchise brands. Looking ahead, so-called big data analytics tools will be huge for franchises looking to get a clearer picture as to what is happening from a customer acquisition and nurturing perspective across their entire

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franchise network. For example, the Scorpion Management System (SMS), is a tool that enables a franchisor to scale up Internet marketing campaigns across multiple franchisee locations and track the success of their franchise network— including organic search growth, lead generation, and advertising campaigns like Google AdWords and Facebook Ads—from a single platform. “Tools that provide this kind of overview allow franchisors and franchisees to measure their efforts online and invest into areas that deliver the highest ROI for their ad dollars,” says Adams. The time is now Four out of 5 consumers are now searching for local businesses online, and more than 90 percent of consumers say they are influenced by online reviews. There’s an unprecedented need for franchises to solidify their online presence as the go-to resource for their brand/ product, but there are many choices when it comes to executing the strategy. Internet marketing companies like Scorpion can tailor campaigns that increase franchisor visibility on the Internet and help them attract new customers and franchisees. These companies can handle all the tedious tasks involved with managing an online presence so brands can focus on managing their franchise network. Some of them, like Scorpion, can provide one-stop shopping. Look for established companies with a track record of building, improving, and managing websites, advertising, and leads. Look for a partner that can monitor the online footprint to ensure strong visibility both online and within local territories. The ultimate goal is to provide the resources and support a franchise needs to grow and generate more revenue. ■

Supplier Spotlight: CASE STUDY: How The Cleaning Authority Increased Appointments and Online Sales The Challenge In 2015, The Cleaning Authority, a Columbia, Md.-based house cleaning service franchise with more than 200 locations across North America, decided it was time to bump up its online marketing strategy so it could begin getting the customer volume it deserved. It all started when Heather McLeod, Director of Marketing, joined the franchise and realized that its digital marketing campaigns were not performing as needed. A lot of the franchise’s national ad fund was being used on pay-per-click (PPC) advertising, yet these campaigns were not yielding the results that were expected for the level of investment being made. The Solution The Cleaning Authority partnered with Scorpion for its Internet marketing. Scorpion stepped in and: • Launched a brand-new website with a fresh, conversion-driven design. • Integrated the franchise’s customer relationship management (CRM) system with Scorpion’s online marketing platform. • Launched targeted PPC ad campaigns to drive more traffic to the website. The Results The Cleaning Authority has come a long way since Scorpion launched its new website. To get the real impact, take a look at the four months right before Scorpion launched The Cleaning Authority’s new website to the same four months a year later. Pre-Launch vs. PostLaunch (year-over-year, 4-month comparison) • 338% increase in average number of unique visitors • 278% increase in average number of page views • 182% increase in website sales • 199% increase in total set appointments According to McLeod, The Cleaning Authority has also benefited from a lower cost per customer acquisition in its overall marketing budget. The franchise additionally enjoys excellent support from its Scorpion franchise marketing team. “They are right on it to answer me quickly and to get resolution quickly, and it really feels like they’re in the office next door,” she said. “So for me at the end of the day, that’s really what working with Scorpion means. It means that I’m bigger than just me, and I have a team of people who support me and who act like they work here with me.” ■

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GROWING YOUR SYSTEM

Market trends Protecting the Model

Defining and defending franchising in 2016 BY DARRELL JOHNSON

W

e all get the calls: “What’s the best franchise these days?” How do you answer that? Usually, the answer is a muddled, meandering set of comments. Before I get into why we should find it easy to answer that question and how to do so, I think it’s important to know what the cost is of not being able to answer that question. How about the future vitality of the franchise business model? I think it is reasonable to associate a significant portion of franchising’s inability to answer that question with more than 30 state legislative initiatives, periodic federal legislative efforts (two bills now pending), countless legal proceedings, regulatory attacks on many fronts, and plenty of negative press. Most of this came about because of the absence of a common understanding of the business model and a common way to assess its strengths and weaknesses. A necessary first step is to get a common understanding of the business model solved. This is what the IFA is taking on with its initiative to “change the narrative,” led by IFA Chair Aziz Hashim. That is necessary, but not sufficient. If we don’t have a common way to assess the business model, we will continue to allow others to do it for us. Moving to an answer Answering a question about what an average franchise brand looks like should be easy. We’re not trying to explain some abstract technical topic. We’re simply trying to explain what a good franchise system should look like to a prospective franchisee. Best and worst are just the outer boundaries of what average is, so let’s start our understanding of how to address that question by defining “average.” To do so we need a perspective, a vantage point if you will. The franchise business model involves four basic perspectives:

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1) the franchisee/prospective franchisee, 2) the third-party debt capital provider, 3) the franchisor/brand owner, and 4) the consumer of the product or service. Since most people asking the question of what is a good franchise system are coming from the perspective of the prospective franchisee, let’s start there. Is it really that difficult to provide a simple

answer using a few key pieces of information that would inform the prospective franchisee about a brand? Common sense tells me that if we can’t, then we deserve to let people with agendas do it for us. If I am able to achieve the average performance in your system, what will I be doing in the way of financial performance? I know all the excuses: “We have different models operating in different types of communities with different ages of performance and different investment requirements and different everything.” Fine, but I didn’t ask you what was different. I asked you to tell me what I should expect if I’m no better than average. I didn’t ask for any assurances, I merely wanted to know if you know what you

should know and can tell me. I also want to know what the probability of failure is. You may have the best average financial performance in the industry, but if that comes with a high likelihood of failure, I want to know that. (So does my lender… and they do know because they’re getting FUND reports.) From a prospective franchisee’s perspective, there are a few other things I’d like to know that become a bit subjective, but these two things are (or should be) totally quantitative. The argument for not providing them is no longer relevant because if you don’t, someone will publicly “guess” what they are and you will continue to be put into a category that might not be accurate. “Average” by definition implies a comparison. If it’s standardized and consistently measured, we have the basis for making a rating system. It is relatively easy to re-sort the roughly 3,500 brands into appropriate groups for comparisons if we have a basic understanding of what we are measuring. For our part, FRANdata decided to get into the franchise brand rating game because we believe the future success of the business model demands it. We started with rating the systemic credit risk of franchise systems for debt capital providers. FUND scores will become as important to franchise loan underwriting as FICO scores are for assessing individual borrower creditworthiness. We also are pushing into franchisor performance benchmarking studies across the functional areas franchisors are responsible for. We also are supporting media articles like the Forbes list of best and worst franchises because we strongly believe the franchise business model should be correctly understood by the media before they start assessing it. Within the franchise community, if we don’t define what best, worst, and average are, we will continue to be vulnerable to those who want to do so for purposes that often don’t include the best interests of the franchise business model. We’re trying to catch up and pass them by doing it the right way—before the wrong way becomes common perception, regulation, and legislation. n Darrell Johnson is CEO of FRANdata, an independent research company supplying information and analysis for the franchising sector since 1989. He can be reached at 703-740-4700 or djohnson@frandata.com.

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Join the Movement Are You a FAN? Franchise businesses need to come together and speak with one, consistent, strong and collective voice on behalf of our great industry. IFA has launched the Franchise Action Network (FAN), to mobilize the franchise industry to be that voice. By joining the FAN, we will unite all of our voices within franchising with a strong message about the positive impacts of the franchise business model in every community across the country. Make your voice heard and join in this fight by signing up for the FAN today!

www.FranchiseActionNetwork.com If you have any questions about this new initiative, please do not hesitate to contact IFAâ&#x20AC;&#x2122;s Senior Director, Political Affairs & Grassroots Advocacy, Erica Farage at efarage@franchise.org or 202-662-0760.

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GROWING YOUR SYSTEM

International Going Big Big data around the world BY WILLIAM EDWARDS

I

n researching the use of big data in franchising outside the U.S., we asked two leading franchise development executives abroad to tell us how it is being used where they are. We also found several international companies that work with franchisors. Finally, we looked at how data is regulated in the European Union (very differently than in the U.S.). According to Logi Analytics, a company that helps clients access, manage, and understand the growing volume of consumer data, “Big data refers to the ever-growing volume of data, increasing velocity in the generation of that data, and increased variety of types of data. In just a few short years, big data technologies have gone from nothing more than hype to being one of the core single disruptors in the digital age. The challenge for organizations is to know how to appropriately use these new data repositories to improve business performance by analyzing data in as close to real-time as possible.” Mohit Sharma, who heads marketing and business development at PromptCloud in Bangalore, says, “With a petabyte of data being generated every 11 seconds, close to 90 percent of all the data in the world today has been created in just the last 2 years. With the dawn of user-generated content, Eric Schmidt [executive chair of Alphabet, Inc.] opines that every two days we create as much information as we did from the dawn of civilization up until 2003. The data sector is expanding at an unimaginable rate.” (A petabyte of data is 1,000 terabytes, which is 1,000 gigabytes.) According to Elite Franchising magazine in the U.K., “Franchises hold a wealth of big data that, when utilized, can tremendously boost their success. It can improve the customer experience, increase efficiency, and help you decide whether a certain neighborhood is likely to make a new franchise location in that community a success. The proper use of big data you collect about your customers can make

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them feel like a business knows them and cares about their customer experience.” Big data in the U.K. From Iain Martin, managing director, The Franchising Centre: “Most established franchisors in the United Kingdom are using either their own or a third-party CRM system that captures significant amounts of data— both in terms of sales generation (leads to conversions, etc.), and service or product delivery. Many of these systems are linked to accounting software, and often franchisors will undertake billing on behalf of their franchisees. This means that it is easy for the franchisor to gather hard data on the number and value of sales made, and can derive the data required to measure actual performance for their chosen KPIs. The way in which the statistics and derived reports are used varies across the franchise community, from those who publish full tables that include a number of their KPIs, to those who review performance on a one-on-one basis with their franchisees. The driver for most is, of course, to identify relevant data; where franchisees and the franchisor can make adjustments to how they operate; and so improve effectiveness and profitability. A growing trend in the U.K. is for franchisors to use third parties to gather objective data on how well they’re doing as a franchisor by getting feedback from the franchise network. Typically this data is aggregated, and normally individual franchisees will not be identified (hence their willingness to provide honest feedback). Its value is in its integrity and in the opportunity it provides for the franchisor to modify their training/support to improve franchisee performance.” Big data in Europe Consumer data is tightly regulated in the European Union (EU). The European Commission (EC) says that the people or

bodies that collect and manage personal data must respect EU law when handling such data. Unlike in the U.S., data you collect on your franchisees and customers in the EU cannot be shared widely. In fact, U.S. franchisors are limited in what European customer information they can access here in the U.S. This is a challenge for U.S. franchisors used to owning their franchisees’ customer database. The EC states that big data technology and services are expected to grow worldwide at a compound annual growth rate of 40 percent. (Data can either be created by people or generated by machines, such as sensors gathering climate information, satellite imagery, digital pictures and videos, purchase transaction records, and GPS signals.) Big data in India From Rajeev Manchanda, managing director, Inventure India: “With its vast size in terms of area and population, combined with diverse culture, India is a huge opportunity that comes with the challenge of understanding the market. Retail brands are depending heavily on such data as the market is evolving. Shopping destinations are deploying innovative mobile phone–based solutions that channel data insights from customers visiting shopping malls. The technology performs real-time analytics to convert data gathered from a shopper’s movements in the malls to provide meaningful interactions for smartphone users. These are then provided to retailers in the mall to extend sales deals to shoppers through apps, based on footfall heat maps. This is also seen in the e-commerce world. E-commerce giant Flipkart, for example, analyzes 25 million rows of inventory data every day to enable data-driven decision making. Likewise, other leading companies like Snapdeal and HomeShop18 claim they generate 30-40 percent of their orders with the help of big data tools that they use.” Leveraging social media Laura Donovan, president of The Word Pro, a social media marketing firm, notes that “93 percent of consumers research brands on social media before making a purchasing decision. Facebook adds 500,000 new users every day. Most U.S. Internet users have an average of 5.54

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William Edwards, CEO of EGS LLC, has 40 years of international business experience. He has lived in 7 countries, worked on projects in more than 60, and has advised more than 50 U.S. companies on international development. Contact him at 949-375-1896, bedwards@egs-intl.com, or read his blog at edwardsglobal.com/blog

CHISE

Conclusion Of course, the real challenge and the bottom line is how to cost-effectively analyze this immense and extremely rapidly growing amount of data to help you grow your customer base and franchisee sales around the world. (Author’s note: The Facebook, LinkedIn, and Twitter country statistics are from the “2016 Major Social Media By Country” study done by Edwards Global Services for our U.S. franchisor clients.) n

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GROWING

Frandcate up

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social media accounts.” According to Innovation Enterprise, a business media company, “Social media can help you collect feedback on new products, track the success of marketing campaigns, and compile information that can be used to improve the overall customer experience.” Smartphones in developing countries are often used for communication through social media, as this is very inexpensive. Some large food and beverage franchises in Indonesia use Facebook for 30–40 percent of their total annual advertising budget. Used properly, social media can tell you a lot about your customers in other countries. Social media apps and platforms are a growing contributor to the world of big data. Here are some representative numbers of these tools, which give a franchisor access to and information about consumers: • Facebook: in the U.S., 59 percent of its 324 million population are on Facebook; in Brazil, 50 percent of its 208 millions; in Indonesia, 30 percent of its 260 millions; and in Mexico, 49 percent of its 129 millions. • LinkedIn: 39 percent of the U.S. population are members; 29 percent in Singapore; 31 percent in the U.K.; and 32 percent in Australia. • Twitter: 44 percent of the U.S. population has an account; 26 percent in Central Europe; 49 percent in the U.K.; 47 percent in Singapore; and 27 percent in Japan.

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GROWING YOUR SYSTEM

It’s closing time Stop Selling, Start Bonding Connecting with today’s buyers

I

BY STEVE OLSON

n today’s environment, franchise buyers continue to require more from us. And they should! After the unsettling shock and awe of our Great Recession, prospective franchisees are more careful and their expectations noticeably higher. Buyers are more cautious and security-conscious, seeking investments that provide greater assurances and a greater comfort level. Times have changed. When looking at the past in our rearview mirror, we can see that franchise recruiters could more easily capture a prospect’s attention, build camaraderie, and foster a personable connection with prospective buyers. Our sales prescription called for a dose of likeability, stir in some engaging conversations, and present a nice, pleasant personality. This approach could make the difference when leading a financially qualified buyer from their initial conversation to their program and FDD reviews, franchisee validation, discovery day, and closing event. Today’s prospects are rewired. Our future franchise owners of 2016 are no longer wired this way. Instead, “Who are you, and why should I trust you?” are the thoughts racing through cautious buying minds. Here are some variations on this theme: “You’re a really nice sales person and I like your pleasant style, but can you back up your opportunity pitch with facts?” “What are aspects of your business that perhaps you aren’t revealing to me?” “Are you really interested in the welfare and future of my family?” “Are you giving me the whole picture, or are you avoiding some tough questions?” “I understand that no business is problem-free. Can I trust you will share challenges your brand is now facing?” Building a bond with buyers. In my interviewing of successful recruitment pros, they unanimously agreed that getting closer with buyers by developing bonding relationships is key to successful recruitment. The formula for execution

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certainly isn’t easy, as it requires discipline, selflessness, and sincerity. It’s about sharing what is real—and what is not. Are you willing to be vulnerable? Will you share and recommend other good brands when in your heart of hearts you know they are not the right fit for your program?

Buyers are more cautious and security-conscious, seeking investments that provide greater assurances and a greater comfort level. Sales tips from the pros • Mike Hawkins (vice president of franchising, The Dwyer Group) views his role first and foremost as a counselor, someone who is sincere and genuine with prospects. He reminds us how complex our recruitment process is, and the responsibility we own in addressing candidates’ strengths and uncovering their pain points. • Development consultant Lynette McKee (CEO, McKeeCo Services) stresses our responsibility to be authentic with buyers, set expectations, give comfort when needed, and recognize their vulnerabilities as you guide them through the process. • Veteran recruiter Marty Welch (CEO, Martin Franchise Consultants) emphasizes the need to interact with our prospects in a way that makes them most comfortable to open up, so we can understand and address their hot buttons. • Selling CEO Steve Greenbaum (PostNet) talks about collaboration with candidates, and showing your true passion, energy, and enthusiasm that buyers

can get excited about. • Master sales pro Nikki Sells (CEO, Sells Development) stresses the value of more personal face-to-face connections in the process. She requires Skype calls with her prospects from the get-go. This avoids being a stranger behind our phones and emails, and accelerates a much more personal bonding for both parties. • Recruitment pro Nick Neonakis (CEO, The Franchise Consulting Company) reminds us about how many sales people talk at their prospects, rather than focusing on their world through engaging questions and conversations. • Veteran sales master Jerry Darnell (Jerry Darnell and Associates) understands the critical impact of responding to and bonding with prospective decision-makers. He is always on call and available to set appointments days, nights, and weekends when necessary and convenient to accommodate their family schedules. Responsiveness matters! • Chief Development Officer Paul Pickett at Wild Birds Unlimited advises that we need to treat prospects the way they want to be treated, and we must be human and willing to show our soft side. • Consultant Joe Mathews (CEO, Franchise Performance Group) reminds us how important it is to earn credibility with prospects, ask meaningful questions, and never be afraid of losing a deal. Do what’s right for your prospect and for the brand. • Sales consultant Jim Bender (president, Franchise System Builders) asks prospects, “What do you need to know?” He makes a point to learn where their strengths are, adding that people want to prove to you they are experienced, and can be put off if you don’t ask them. Stop selling, start bonding Working in unity side by side with buyers will produce more successful selling by bringing qualified candidates and brands together. Open dialogue, honesty, and mutual goals are today’s pathway to a bonding franchise marriage. n Steve Olson is a 30-year franchise development veteran and author of the #1 Amazon best-seller, Grow to Greatness: How to Build a World-Class Franchise System Faster, available at www.growtogreatness.net. He can be reached at OlsonandAssociates.com.

Franchiseupdate ISS U E III, 2 0 1 6

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7/29/16 4:19 PM


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Franchise Update Magazine - Issue III, 2016  

Big Data: All aboard the data train!

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