◦ Consultants with over 900 years of franchise experience
◦ 98 out of the top 200 franchise companies
◦ Offices in Chicago, Dallas, Los Angeles, Boca Raton, Miami-Fort Lauderdale, Atlanta, Toronto, Dubai, UAE, and Riyadh
More “senior level” experience
◦ Hands-on experience at start-up and established franchisors
◦ Former CEOs, CFOs, EVPs of more than 50 different franchise companies
Adia (now Adecco), Armstrong Tile, Auntie Anne’s, Dunkin Donuts, LINE-X, Pearle Vision, McDonald’s, PIP Printing, Schlotzsky’s, Snap-on Tools, Snelling & Snelling, and other national brands
The ability to bring more resources
◦ Faster completion
◦ Ability to assist in several areas simultaneously
Breadth across four functional areas
◦ Strategic planning
◦ Quality control
◦ Marketing
◦ Organizational development
Franchise experience in 50+ countries
Six years in a row, voted the #1 Franchise Consulting Firm in North America in an independent survey of over 1,100 franchisors
Numerous awards and publications
A premier, fully integrated public relations and digital media agency specializing in franchised businesses
◦ Public Relations
◦ Digital Lead Generation
◦ Search Engine Marketing
◦ Content Marketing
◦ Social Media Publishing
◦ Pay-Per-Click Advertising
◦ Website Design & Development
Both franchise development and consumer branding
Team with Hands-On Franchise Experience
◦ Real-world experience with nearly two dozen brands
◦ Efforts have resulted in tens of thousands of franchise leads
◦ And many hundreds of franchise sales
Recent honors and awards:
◦ Top supplier from Entrepreneur five years in a row
◦ Best New Agency (Ragan & PR Daily Ace Awards)
◦ PR Agency Elite – Mission: Fit to Own (PR News)
◦ Best Website Finalist (PR News)
◦ Best Media Relations Campaign Finalist (PR News)
◦ Best SEO Finalist (PR News)
A premier franchise development and sales organization
Helps emerging brands realize their full potential
Placed over 1,100 units with more than 600 franchisees
Beyond sales, serves as an outsourced development partner with a consultative process
Support brands across diverse sectors
◦ Residential Services
◦ Automotive
◦ Commercial Services
◦ Quick-service Restaurants
◦ Fitness
◦ Health and Wellness
◦ Beauty
◦ Pet
◦ Youth Enrichment
◦ And more
Recent honors and awards:
◦ Top supplier from Entrepreneur
◦ Employee Satisfaction Award from Franchise Business Review
FTC rule 436 cites three elements that legally define a franchise:
◦ The use of a common trademark
◦ The provision of assistance to (or exercise of control over) the franchisee
◦ The collection of fees, royalties, mark-ups or other monies from the franchisees
If you have all three elements, you are a franchise, regardless of what you call it
Some state definitions vary, but are similar
Do not have to use the “f-word”
Franchisee typically pays
◦ Franchise fee averages about $25,000 - $35,000
◦ Royalty range between 4% - 10%
◦ Advertising range between 1% and 2%
◦ Franchisor will often sell product to the franchisee
◦ Franchisee makes the entire investment in operations
Franchisor typically provides
◦ Initial training
◦ Operations manual and systems
◦ Ongoing supervision and support
◦ Other support services
◦ Trademark & Trademark Maintenance
Successful prototype
Credibility
Differentiation
“Sizzle” Buyer appeal Value Proposition
Teachability Adaptability Systemization
Affordability
Profitability
What motivates prospects to buy?
Why People Buy Franchises
One of the mistakes that many franchisors make when establishing their candidate profile is that they assume a candidate’s primary motivation for buying a franchise is financial gain…
Source: International Franchise Association
NOT a legal requirement
A practical requirement for almost all franchisors
◦ Exceptions: Direct sales of a proprietary product, prototype operations that may differ from the franchise offering but provide prototype operational knowledge, etc. –but no restaurant should franchise without a profitable prototype
Five reasons you need a prototype
1. Credibility in the sales process
2. A venue to train your franchisees
3. A venue to test operational refinements (new menu items, marketing, etc.)
4. Defense against accusations of misrepresentation
While not legally required, failed franchisees could sue for fraud
If you do not have an operating unit (and presumably no FPR) they can claim fraud even if you never said a word
If you show no units or unprofitable operations, a jury may be more likely to side with your franchisee
5. “I saw the angel in the marble and carved until I set him free.” Michelangelo
Prospects will not buy unless you make them believe they can succeed
◦ That said, 40% say joining a “known brand” is not vital
◦ And 40% prefer a known brand but are open to new concepts
◦ In fact, some franchisees are looking for “the next new thing”
Credibility can be demonstrated in a variety of ways
◦ Years in operation
◦ Number of units
◦ Financial performance
◦ Management and staff credentials
◦ Look and feel of the operation
◦ Press clippings, awards, and other notoriety
◦ Perception of customer acceptance
Credibility can be improved through
◦ Strong franchise marketing materials
◦ Professional website design
◦ Franchise sales videos
◦ Operations manuals, training videos, Learning Management Systems, etc.
◦ Testimonials
◦ Use of a design firm
◦ Use of a public relations firm
◦ Strong social media campaigns
◦ Use of a Financial Performance Representation
◦ Hiring strong staff, well-known lawyers and consultants, etc.
Why buy from “the new kid on the block” if there is a bigger and better-established competitor who does the exact same thing?
What makes you BETTER?
Differentiation can be achieved in several ways
◦ Unit design, look and feel
◦ Unique recipes
◦ Ad campaigns and message, consumer positioning
◦ Price
◦ Service
◦ Investment level
◦ Business economics
◦ And many other means…
“Copying” can work as a strategy if done right
◦ Speed of expansion – need for additional care
◦ “Fortress Strategy”
Easy“est” (Service)
Quick“est” (Speed)
Source: McMillan|Doolittle
Cheap“est” (Lowest Price)
Black Hole
“Where undifferentiated concepts go to die” Hot“est” (Fashion)
Big“est” (Best Assortment)
The Fortress Strategy
EarlyToMarket
LateToMarket
You sell the “sizzle,” not the steak – franchise sales is an emotional decision
Sizzle, sex appeal, hot concept – the buyer wants to be part of something that they perceive as “fun,” enjoyable, happening, cutting edge, or that will otherwise appeal to their self image
“Sizzle” can be achieved in several ways
◦ Unit design, look, and feel
◦ Franchise marketing materials
◦ Perceived consumer acceptance
◦ Messaging
Differences of opinion make horse races – Mark Twain
◦ What you think is sexy may be a terrible opportunity for others
◦ Almost anything can be given sizzle with good marketing and good messaging
Who will buy your franchise?
Appeal to a specific buyer
◦ “Mom ‘n Pop” Operator
◦ MUFSO type
Advantages of a well-defined buyer
◦ Don’t have to compete for franchisees in the “general franchise marketplace”
◦ Can focus on what will motivate your buyer
Create a strong value proposition
◦ Branding and brand advertising
Two units are better than one
Your brand may be stronger than you think
◦ Operations manual and training
◦ Purchasing power
◦ Information technology
◦ Research and development (recipes, products, services, etc.)
