Pillars of Franchising magazine Issue 2 Dec/Jan 2021 by Pillars of Franchising

PILLARS OF FRANCHISING

Dec/Jan 2021

SECOND CHANCES

Lash Lounge’s Michael Jania Overcomes Pandemic and Looting to Find Success

Former Chicago Bear

Doug Plank

finds Second Career

Dawna Blum of Wild Birds Unlimited Achieves Financial Independence

Buy a Franchise

in Franchising

Find a Mentor

Create Buzz Dec/Jan 2021

CONTENTS SECOND CHANCES

Dec/Jan 2021

Cover Story King of the Football Field to King of 8 From the Burger Departments 4 Letter from the Editor 6

Calendar of Events .

Doug Plank Cover Story

Second Chances are for Everyone: How to Take Ownership of Your Career

Franchise Funding 101: Top Options and Tips

No Second Chances for Poor Customer Service Even in a Pandemic

Can You Recover from a Marketing Mistake?

How to Salvage a Failing Franchise Unit

Second Chances as Our Mentors See It

Taxes Anyone?

Coming Back from Rock Bottom

Introduction to Equipment Financing for Franchisees

A Second Chance. An Uphill Battle. And the Rise to the Top.

POF Updates

A Life Designed by Dawna

The Original Corporate Refugee

Featured Vendor

2 Pillars of Franchising

Features Act Two for Huntington Learning Center 14 with Anne Huntington Sharma

Tune in Every Thursday! The Pillars of Franchising Show In this issue, we talk to former NFL Chicago Bear, Doug Plank, about how franchising offered him a second chance for a career after football. It also brought financial independence to Dawna Blum and new opportunities for Michael Jania. Editor-in-Chief Elizabeth Denham Elizabeth@PillarsOfFranchising.com CEO Kristin Selmeczy Kristin@PillarsOfFranchising.com Designer Annie Malloy malloyab@gmail.com Contact us at YourFuture@PillarsOfFranchising.com Contributors Nancy Chorpenning Nancy Friedman RJ Grimshaw Michael Iannuzzi Dave Kajganich Harold Kestenbaum Kelly Krueger Doug Plank Michele Rempel Susan Scotts

What you will get: • Education • Entertainment • Resources • Opportunities

Live on Thursdays at 2:00 PT | 3:00 MT | 4:00 CT | 5:00 ET Broadcast on Youtube, Facebook, Blogtalk Radio, LinkedIn, Twitch and more! Dec/Jan 2021

Letter from the Editor

Second Chances

for Success in Franchising Dear Pillars of Franchising Community: As the “Great Resignation” has been in the news repeatedly over the last few months, there have been many reasons speculated for this phenomenon. As members of the franchising community, we understand what a great opportunity this is to introduce people looking for a second chance career to our business model. Each of our Million Dollar Mentors left jobs in corporate America for an opportunity to own a business, own his or her own time and build wealth that will ensure the future for the family. While they all had different paths, they have found that success in the second phase of their careers. In this issue, we highlight several great success stories starting with former Chicago Bear player, Doug Plank. Doug played in the 70s and had an innate knowledge that he needed a plan for his post-football life. In “From the King of the Football Field to King of the Burger,” he shares his story of entrepreneurial success and why he

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is passionate about franchising.We also share the story of Michael Jania of Lash Lounge who left a family business to go out on his own and unexpectedly wound up in women’s beauty. His story is compelling as he opened his location during a pandemic and was looted in the throes of the civil unrest in Chicago after George Floyd was killed. Learn how he overcame the odds to find success. Wild Birds Unlimited franchisee, Dawna Blum, also tells a story of triumph. As a wife and mother of four, she always longed for something of her own. Her WBU location provided her a way to achieve financial independence and gain greater confidence, self-respect and pride. Hers is a story so many women will relate to. Anne Huntington Sharma of Huntington Learning Center shares her vision for the second act of her business and discusses why she is such a staunch proponent of giving back. Our Million Dollar Mentors, Kristin Selmeczy, Jerry Akers, Ray Pillar and David Kajganich share their perspectives on their franchising second chances, and we share a pictorial of the Pillars’ team’s first in-person meeting in Chicago. We also have informative articles from Nancy Friedman, the Telephone Doctor, on customer service; Susan Scotts on franchise education; Michele Rempel on marketing; Harold Kestenbaum on legal issues; Kelly Krueger on funding; Michael Ianuzzi on tax/finance; Nancy Chorpenning on the power of a circle of women and our very own Million Dollar Mentor, David Kajganich on leadership. Join us on our social media, subscribe on the website and join us every Thursday at 4:00 CT for the Pillars of Franchising live stream! We look forward to serving you, and remember… The Dream Starts Here!

Elizabeth Denham Editor-in-Chief

Dec/Jan 2021

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Dec/Jan 2021

Cover Story

From King of the Football Field

to King of the Burger

by Elizabeth Denham

ne thing Doug Plank knew for sure when he was playing in the NFL for the Chicago Bears was that at some point, it was going to end. What he didn’t know was when. But he was not going to wait around for life to happen to him. He decided to make a future for himself, ready and waiting for his post-football career.

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“As my career progressed, I began to see the impact of football on my body,” Plank said. “I started having more injuries, and I wasn’t bouncing back as quickly. I always knew it would end, and I wanted to be prepared.” Plank grew up as a multi-sport athlete in high school and went on to play football for The Ohio State University. In 1975, he was drafted in the 12th round by the Chicago Bears where he had an 8-year career. He was known as one of the hardest hitting safeties in the game and was dubbed along with teammate Gary Fencik “The Hit Men.” Following his playing career, Plank coached in the NFL and Arena football and has worked as a football analyst for Fox Sports, NFL and NCAA radio broadcasts, Arizona Cardinals and

Arizona State games to name a few. Plank said during the off-season from the NFL, he often went into Burger King to sign autographs – sometimes making more money in the off-season than he did during the season. “I averaged $45,000 back then with the Bears,” he said. “We weren’t making the kind of money players are making today, and 75 percent of players never plan for the day it will end. I wasn’t going to let that happen to me.” One year, when signing autographs at a Burger King, Plank struck up a conversation with the location’s owner. He asked him about his business, learned about opportunities with the franchise and made plans to get approved as a franchisee himself. “If you are not proactive, nothing is going to just happen,” Plank noted. “I worked for two weeks in a Detroit Burger King location as an NFL player. It took another two weeks to get

approved. You have to spend six weeks in a store before you open your location, so when that fateful day came and I was let go from the Bears, I was ready.” Plank’s last day came as many do, without much warning or fanfare. He was called on a Friday night to come to the Bears’ office and was asked to clean out his locker. He was escorted off the property by security with his trash bag of belongings and the knowledge that he had his future mapped out. Plank used his football career to help with funding his first Burger King location. After he was cut from the Bears, he was offered a position with the United States Football League (USFL) to play for one year. That one year paid for his Burger King location and 30 days after he left the USFL, his store opened. “I didn’t have long to mope about it,” Plank mused. “I couldn’t feel sorry for myself. I had to transition, get over it quickly and get to work because I had a store to open 30 days later. And I had to buy equipment.”

Dec/Jan 2021

“

One thing Doug Plank knew for sure when he was playing in the NFL for the Chicago Bears was that at some point, it was going to end.

Plank credits much of his success to his strong desire always to learn and ask questions. Over the years, he took CPA courses and got his real estate license. He recently secured his life and health insurance licenses and is currently studying for his series 65 securities license. He is also pursuing his residential contract license for the second time.

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“If you have the knowledge, you gain credibility,” Plank observed. “You understand the language and the terminology of the different aspects of business. You have to do your due diligence and – as they say – those that don’t read are no better than those who can’t read.” Plank believes his football skills translated well into franchising. “It works the same as a team

sport,” he said. “You are not a lone ranger. I worked with my wife and built a great team. A great football player can look terrible when surrounded on the field by ten bums. Everything happens down the field, so the better the people are around you, the better you will be.” Plank sought out relationships with other Burger King franchisees to build relationships with and learn from. He partnered with

Dan Fitzpatrick of Quality Dining, Inc. and was energized. “Working one year with Dan was better than five years on your own,” Plank said. “Was I that smart? No. But Dan was. Dan came in like a tornado, and he didn’t take well to mediocrity.” Plank said his new role in franchising was met with some derision by his football peers who referred to him as “flipping burgers” in his new career.

“There is nothing wrong with flipping burgers,” he noted. “But I was the ‘coach’ – I was managing all aspects of the store. I think it is important for players to have a plan for the second phase of their careers. And I would love for them to understand the advantages of franchising and how well the skills you have playing sports adapt to the franchising industry.” Plank mentioned the skills that helped him transition from sports to franchising, including working within a system, building a team, leadership and creativity. “In football, you build strong bonds with your teammates. It’s the same in franchising,” he said. “And with a franchise system behind you, if you go off course, there is some-

one there to back you up and help you get back on track.” Plank has owned 20 stores over the last 20 years. While he has sold his locations, he maintained the real estate and manages the properties. He is an approved franchisee for Wendy’s and Culver’s. “A lot of people, NFL players included, want to go out and start a business,” Plank said. “And the chances of failure are high. But franchising is powerful. You have brand recognition, and people supporting you. You have systems in place, and you can make money much faster than on your own. I am really passionate about it, and I would love to see more NFL players taking advantage of it and planning for their futures.”

Dec/Jan 2021

Education

Second Chances are for Everyone: How to Take Ownership of Your Career

by Susan Scotts

thletes, veterans and educators are often given standard operating procedures - blueprints for being successful. These folks are good at following a system. However, almost everyone, including those in the armed forces, whether transitioned or currently transitioning, are tired of answering to someone else, so what’s next?

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Getting a job is an option, but in a job, you still answer to someone else and will not be in control of your financial future. But there are other options to consider when evaluating your future, or what I call, Your Career 2.0. You may want to consider the possibility of becoming your own boss or “commanding officer” by leveraging a proven, replicable, duplicatable system of doing business. That’s what a franchise offers.

Mike’s Second Chance My client, Mike H. in Spring, Texas, is a great example of an outstanding move to his Career 2.0. Mike left the United States Air Force and his role of Senior Manager of Aircraft Maintenance Operations after 22 years. He took a J.O.B. (Just Over Broke) for another 10 years working for two different companies in aerospace and aviation managing technical operations. He led multi-site international manufacturing operations and built high-performance teams. When Mike and I connected, he was really frustrated, loathing the corporate scene and answering to someone else. He wasn’t earning what he was worth. Mike couldn’t take the time off he wanted, had no control, freedom or flexibility in his schedule. He was also very concerned about the company’s financial future -- worries that kept him up at night. I asked him why he couldn’t follow a proven system that a franchise offers, create that same success for himself and build wealth for his future instead of someone else’s? He agreed to learn more about career ownership and being his own commanding officer. We began exploring various possibilities. One really struck him right from the beginning. It provided Mike the opportunity to work in a commercial setting versus retail, which was one of his

interests. He felt it was a recession-proof business (more on why that was so important in a moment). It also allowed him to be diverse, as well as provide services internationally. The franchise gave Mike a great degree of support which was essential to him as a brand-new business owner. In addition, he felt like he had many contacts in procurement positions from his past that he could leverage. After careful research and conversations with several owners, Mike decided to take on this new challenge. I assisted him in obtaining funding (he decided to use other people’s money to begin). Mike opened his business TWO DAYS before the state of Texas SHUTTING DOWN due to Covid-19! Most people would be fearful about a business launch during Covid, but since Mike’s focus was on recession-proof and essential businesses, it turned out this was his recipe for success. Covid created even more of a demand than anticipated for the products Mike offered his community. He generated 10 times more than projected revenue in his first month in business! Mike’s business outgrew his facility quickly, and he had to expand to keep up with demand. He’s delighted with his role of commanding officer in his own business and enjoying the freedom and flexibility his new position

offers. So much so, that his wife, a schoolteacher, has reached out to me to explore business possibilities as well. Whatever your personal income, lifestyle, wealth or equity goals are, and whether you are transitioning out of the military, a long-time career or simply tired of answering to someone else, you already have many skills that are transferrable to a business of your own. By following the recipe for success and leveraging a proven system that a franchise offers, second chances exist for you. Why not explore all the possibilities for your Career 2.0 and make an informed choice based on facts just like Mike did?

Susan Scotts is a multiple award winning career transition coach with The Entrepreneur’s Source® and possesses three decades of experience in helping empower individuals to become entrepreneurs through franchise business ownership. For a complimentary consultation, she can be reached at 561-859-9110 or SScotts@EsourceCoach.com.

Dec/Jan 2021

Features

Act Two for Huntington Learning Center

with Anne Huntington Sharma

by Elizabeth Denham

e spoke with Anne Huntington Sharma and her team about what Second Chances look like for her and Huntington Learning Center.

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ANNE HUNTINGTON SHARMA PRESIDENT, HUNTINGTON LEARNING CENTER DECEMBER ISSUE Q&A POF: This issue of the Pillars of Franchising magazine is about “Second Chances.” What are some examples of times in your life when you have felt as though you were given a second chance,

either in your career or in your personal life? AHS: The idea of ‘second chances’ is like a second act to me. As President of Huntington

Learning Center, I am the second generation of leadership. Our family business was started in 1977 by my parents, Dr. Ray and Eileen Huntington, with the mission to give every student the best education possible. Now I am working to build on that history and foundation while maintaining our ethos and expanding our mission’s reach. I inherited a business model that provided exceptional student results throughout its four generations. Huntington’s ‘act two’ will continue to be rooted in its original mission, while also expanding on our vision of world-class student results and franchise profitability through innovative new programs and continued digital expansion. POF: As someone with an Art History degree and a career in the arts as a collector, curator, and philanthropist, how has working in franchising integrated into your life goals and helped you in business? AHS: It’s a positive for many reasons that my life outside of Huntington is as different as it is from my ‘day to day.’ I don’t want the various facets of who I am to be the same. I would not want to always be doing the same thing 24/7. I believe it is important to have extra passions and lead a dynamic life. At the end of the day, business is business. Crossover from the franchising world into my philanthropic work includes being able to share and adapt more struc-

tured methods to procedures and outreach to also create growth in the arts and charity sectors.

Learning Center, how did the pandemic affect these plans and goals?

POF: Coming on full-time with Huntington Learning Center in 2017, you led the largest franchise expansion to date. What kind of second chance or renewed energy did that bring to the franchise system and how did you accomplish that?

AHS: “Sped up” is certainly one way of putting it! Part of my mission as a leader at Huntington is taking the organization through a digital transformation, one that we are in the throes of now. The pandemic launched some of our innovations into warp speed. With endless hours of dedicated collaboration and innovation, we successfully redesigned our business model seemingly overnight. Our remote learning platform HuntingtonHelpsLIVE was launched in under two weeks in March 2020. Since then, we have provided 1million+ hours of virtual and hybrid remote/in-person tutoring and test prep for students across the US.

AHS: Huntington Learning Center is a significant piece of the fabric that is me. I grew up in this organization, it is pretty much part of my DNA. Experiencing my parents growing the company throughout their many decades of success has always bolstered my sense of belief in what we do. It fuels me to know that students and franchisees across the country are thriving because of the work we are doing and the innovative ways we are allowing them access to resources and in turn their success. POF: The pandemic sped up plans for digital and online learning across the board. While this was in the works at Huntington

POF: How did the franchise system fare in the pandemic? AHS: Huntington provided a critical resource for families during the pandemic in the face of school closures. When our brick-and-mortar centers had to also close their physical doors

Dec/Jan 2021

during the lockdown, we innovated ways for our franchisees to continue to be able to provide access to learning for students when they needed it most through online options, as well as continue to operate and earn revenue for their employees and local communities. POF: How will digital learning continue to be utilized going forward as the world opens back up? AHS: Digital learning is not going away, but it is also important to note in-person instruction is not either. At Huntington, our recent nationwide survey data as well as milestone exams and student progress have proven that a hybrid approach to teaching and learning is the best way to provide students with the idea support moving forward. In-person, in-center and in-school instruction is critical for development of not only academic skill, but also what we refer to as the ‘soft skills,’ the social and emotional growth students gain by learning in a classroom setting and among peers. POF: Through the Huntington Compensatory Education Services program which supports special education students who have been denied their federal right to free and appropriate education, you are leveling the playing field for these students. What was the impetus for this program, and what future plans do you have for it?

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AHS: During ‘No Child Left Behind’ circa the Bush administration, Huntington was the top provider in the US for supplemental education. The goal of publicly funded programs like these is to increase access across all segments of students and families. Huntington saw a need and decided to fill the niche of furthering access to students who were not getting the academic help they needed based on their level of ability or access to resources. Throughout the years, we have been able to refine that tool in the form of our Huntington Compensatory Education Services that works directly with schools and families providing access to the resources they deserve and that are already earmarked for public funding. Today’s administration has launched a new round of funding in the form of millions of dollars being allocated to education and tutoring as a means to help curb and recover any learning loss created by the pandemic. Huntington is already seeing success in districts throughout the country where we are partnering with schools to provide supplemental learning opportunities across all sectors of community and education. POF: As someone who is heavily involved in philanthropy, what role does that play in the fabric of your life, and how does it shape your decisions both in business and personally? AHS: Philanthropy is a huge part of who I am. I have always felt it is

one of the most important things in life to ‘do good.’ I seek out meaningful activities at all levels, local and beyond, that provide the opportunity to create a positive and lasting impact on communities and the families within them. POF: What are you looking forward to in 2022? AHS: We are excited to continue to expand Huntington’s programs and capitalize on the fact that hybrid learning is creating a means to reach an exponential number of students that previously did not have access to a local Huntington Learning Center for example. We will continue to grow our network of franchises by an increased number of team members as well as units and are excited to explore new sectors for growth. To learn more, pleaser reach out to: www.huntingtonhelps.com or www.annehuntingtonsharmacom

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805.202.8127 Dec/Jan 2021

Customer Service No Second Chances for Poor Customer Service…

Even in a Pandemic

by Nancy Friedman

o one seems to have any idea why COVID-19 has put this world in a (hopefully winding down) constant mentality of negativity. Sure, it is bad. Yes, we’ve lost some very close relatives, friends and coworkers. Certainly, we have plenty to cry about. But in the face of adversity,

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customer service becomes even more important. As a service provider, you can make customers’ days better and easier, or you can be the straw that breaks their backs. And COVID-19 is no excuse for being the straw – because there are no second chances in customer service.

My wonderful husband reminds me when I cry, “Nancy, if I thought crying would help the situation, I’d cry with you. Let’s figure out a positive way to this situation.” This is true for so many things – not just COVID. Let’s start looking at the positivity at things – everywhere. Here are 5 Costly Comments that can/ will deter many sales, relationships and much more. Not in any special order. They all hurt the economy, sales and relationships. Please avoid with all your might!

MISTAKE 1: NOT SMILING

“

Why is smiling called a ‘comment?’ Why is this so important? Mainly because when we’re smiling, we are making a big comment. Especially in this current atmosphere. It’s insanely simplistic. On the phone or in person, we need to understand why a smile works. Some people say, “I don’t feel like smiling!”

Sorry – not good enough. Don’t feel like smiling? Well, smile anyway. The customer doesn’t care if you feel like smiling or not. Frankly, it’s better to have the customer think your office/store, restaurant, bank, whatever, is closed than to have the phone answered or greet someone in a negative mood. Without that SMILE, on the phone or in person, you’re creating a possible negative situation. And to those who say, “Well, you can’t tell if I’m smiling or not on the phone.” WRONG! Yes, you can hear a smile. IT’S A FACT: Something happens in and to the tone of your voice with a smile. MISTAKE 2: NOT ACKNOWLEDGING A CUSTOMER’S REQUEST OR PROBLEM IMMEDIATELY. Rapid response. Requests, problems and even ‘good news’ should be handled sooner than later. Delaying a request or not immediately acknowledging it usually will cause more problems than the original request. Immediate answers – especially to negative situations will normally turn out better. Waiting on those usually creates more frustrations. Rapid response is best.

…there are no second chances in customer service.

MISTAKE 3: IMMEDIATE REJECTION OF A REQUEST

MISTAKE 5: FORGETTING WHAT MOM TAUGHT YOU

“NO” at the start of a sentence is total rejection. Do you know anyone who enjoys being rejected immediately? It hurts. Rather than rejecting immediately, be a double-checker. It may be easier to tell people, “We don’t have it,” “Sorry, it’s past the deadline,” “We ran out of that,” “No, we can’t do that,” or “That’s our policy.” The list of negativity goes on.

That’s right. Remember these? Please, thank you and you’re welcome. No matter how much or how little money someone has, they all need and want to be treated well. Using their names when you’re aware of it makes a big difference too. That along with the three little phrases (please, thank you and you’re welcome) are critically important to today’s business world.

Instead, it will do YOU better if we use a soft rejection: Something like: “The last time I checked it wasn’t available, let me double-check for you.”

With or without COVID. Don’t let COVID be the excuse of the day.

This simple statement immediately defuses some of the tension of not being able to fulfill a request. And often when we do double-check, we find a way to get what the person wanted after all. Be a DOUBLE CHECKER. MISTAKE 4: ONE WORD ANSWERS Question: “Hi, how late are you guys open today?” Answer: “5.” “Ok, thanks, bye.” VERY DANGEROUS. One-word answers are perceived as cold and rude. If you graduated from third grade, you know three words make a sentence. Engage with the customer. And being ‘busy’ doesn’t cut it. Everyone is busy. It’s a good thing to be busy. Stop complaining.

Nancy Friedman is a popular speaker in the franchise family industry and a highly respected customer service expert. Email: Nancyf@telephonedoctor.com. During COVID, call her cell at 314-276-1012 or office: 314-2911012 (central time) and visit www. nancyfriedman.com. Need a company zoom meeting? Or a 30-minute RX Shot in the Arm for your team? We’d love to share our tips, ideas, skills and techniques with you and your team.

Dec/Jan 2021

Legal

How to Salvage a Failing Franchise Unit

by Harold Kestenbaum Ways to Save a Sinking Franchise Even the best franchise systems have weak spots. Maybe you have a franchisee who doesn’t communicate well or one who won’t participate in special programs and offerings. Some franchisees won’t participate in advertising,

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fail to report sales and become delinquent with fee obligations. These frustrations are all too common and are usually the result of a financial issue. If both the franchisee and the franchisor are willing to put in hard work, there are options for fixing these faults.

This process is called a work out, and this occurs when a franchisor and franchisee come up with an out-of-court plan to fix or mitigate a failing business. It could include a plan where the franchisee’s relationship is restructured or in some cases, a plan where the franchisee exits the franchise.

Pros and Cons of Work Outs Before pursuing a work out strategy, the individual circumstances of each situation should be evaluated in terms of its potential benefits and risks. When handled carefully, there are several advantages to pursuing a work out. Work outs tend to be less expensive than filing for chapter 11, they can maintain customer confidence, and they help preserve a positive franchise morale. You do need to tread carefully, because things could go wrong, and a work out may not be the best choice for you. A failed work out can result in a host of legal headaches, and you may be wasting your time extending the franchisee’s inevitable failure.

goal is to allow the franchisee to exit from the franchise system with the investment intact. In some cases, they also may allow the franchisor to receive full fees owed and retain the unit in the franchise system. Exit strategies are often about finding the best way to mitigate the parties’ losses. A third common work out is called a Collective Creditor Compromise or a Composition Agreement. This method is faster and less expensive than bankruptcy that allows the debtor to pay creditors a percentage of their claims in exchange for the rescinding of those claims.

the marketing material. When viewing your FDD and Franchise Agreement through this prism, prospective franchisees can make a more informed decision. What Should You Do Next? If you have a failing franchise on your hands, you have some important decisions to make. You need to decide if the franchise is worth saving at all, and then you need to discern the best work out strategy for your situation.

A Strategy for Reading Your Documents

Selecting the Best Work Out Plan If you decide that the pros outweigh the cons for your situation, you will need to select the type of work out that makes the most sense for you. A common type of work out is called forbearance. This work out allows the parties to work together to save the franchise relationship. Typically, the franchisor makes arrangements to allow the franchisee to pay off debts over time. Other common work outs are called exit strategies, and their

A best practice when reviewing the FDD and the Franchise Agreement is to go in reverse order. Go through the Franchise Agreement first, clause by clause, and the FDD second. If it helps, you can think of the Franchise Agreement as the “lease” for the trademark and system, while the FDD is, in part,

Harold L. Kestenbaum joined Spadea Lignana in 2019, having unrivaled experience in the franchise industry and in franchise law. He founded and served as President and Chairman of the Board of FranchiseIt Corporation. Harold also authored the first book dedicated to the entrepreneur who wants to franchise called “So You Want to Franchise Your Business.” Contact Harold at hkestenbaum@spadealaw.com or call at 215.774.3365 x136.

Dec/Jan 2021

Features

And the Rise to the Top. by Elizabeth Denham

“I had no idea I would end up in women’s beauty, but I love it!”

ed to know about women and their lashes.

These are words Lash Lounge franchisee Michael Jania never thought he would utter. But he is so glad he took the leap and learned more than he ever want-

While his location is now number three in the company after less than two years of ownership, those two years have been an uphill climb. He signed his fran-

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chise agreement in January of 2020, opened his store during the beginning of the pandemic and suffered looting during the George Floyd riots before things began to turn around.

Photo taken during the civil unrest in Chicago.

A Second Chance. An Uphill Battle.

His path was unexpected. After 25 years in a family manufacturing business, Jania lost his father. Without a clear succession plan for the business, Jania decided to look at other options for his career. “I have been raising my three daughters on my own for the last 15 years,” he explained. “And franchising was appealing. You have a structure, the technology and the marketing in place and I would gladly give up a fee for that kind of support. So, I started with a broker to help me find the right franchise.” He knew he did not want food. He was looking for something in a growth market that people were excited about. Something with a solid brand, a reasonable price and a team that had its act together. “My broker called me one day and said, ‘don’t laugh…,’” Jania said. “But I do have three daughters, so maybe he thought lashes were the way to go.” Originally slated to buy a threepack in the suburbs, he was given the option to buy an existing location in downtown Chicago. The location wasn’t doing terribly

Dec/Jan 2021

well and was ranking in the bottom 20. Jania forged ahead and signed the deal. Sixty days later, the pandemic hit, and he was shut down for the next two-and-ahalf months.

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“At some point, my daughters asked if I was ever going back to work – I was driving them crazy,” he laughed. “It was difficult. We moved to be closer to the store during the pandemic and that was a challenge. The government changed its mind about reopening, so planning was tough. And then George Floyd happened.”

“I went to work every day all by myself with no customers and nothing to do. I finally hired six stylists and we trained the first week of August. The national training team was coming down the second week of August for hands-on training while I was driving my oldest daughter to college in Texas.”

Jania reopened his store on June 3, 2020, with minimal staff and with boards on the windows due to the civil unrest. There were three weeks in July when he had no staff whatsoever.

That is when the second round of looting happened. He was not as lucky this time around. They had removed the boards from the windows as things had died down the first time, and the store was hit – computers, inventory and digital devices looted.

“I had just hired six new stylists, and they all showed up to help clean up. It was amazing,” he mused. “One was even an artist who painted the new boards on the windows with logos and sayings and made it into something attractive.” They were able to finish training and reopen the store in mid-August and the store steadily climbed from the bottom 20 to the top three. Jania credits his

“

I had no idea I would end up in women’s beauty, but I love it!

team, the strong franchise system and brand for his success. “I have no experience in women’s beauty,” he said with a laugh. “My

team members are truly ambassadors for the brand. And maybe there was some divine intervention – with three daughters. I don’t know how God prepared me for this, but here I am.” Jania said that he leads his staff with empathy and compassion and hopes those play into their dedication and loyalty. “Most of my team is comprised of young women in their 20s. I try to understand the things they have going on in their lives,” he said. “I am like a work father figure. And they all understand the brand and how to make the guests enjoy their experience at the Lash Lounge. We have built a great culture together and we really do roll out of the red carpet for our guests. And I think that is why we have grown faster than I ever thought we could.” For more information about Lash Lounge, please visit: www.thelashlounge.com

Dec/Jan 2021

Tax/Finance

Taxes Anyone?

by Michael Iannuzzi

tarting a franchise as either a franchisee or a franchisor is a very exciting time. There are so many factors to think about such as locations, branding, marketing, hiring employees and generating business, among many other things. One of the most overlooked components of franchising,

26 Pillars of Franchising

and with business ownership in general, is the initial set-up and creation of the business entity. How much time and effort did you put into creating the appropriate corporate structure? Do you have a general ledger program ready to go, such as QuickBooks, or will you be running your business based off bank state-

ments and spreadsheets, potentially leading to mistakes and missed opportunities? There are a number of different things to consider when getting started and this article will touch on some of the basic areas to think about before forming your entity.

Entity selection: There are three main types of entities business owners could choose from when structuring their business, including the C-Corporation (“C-Corp”), the

limited liability company (“LLC”), and the S-Corporation (“S-Corp”). There are pros and cons to each of these entities and one size certainly does not fit all. The entity

selection process is extremely important when starting up either as a franchisee or franchisor and there are many things to consider such as:

• The number of owners or investors you will have (certain entities like S-Corps have limits on the number of shareholders) • Asset protection considerations (shielding leases and intellectual property from third parties) • How taxes will be paid to the IRS and various states (either by the owners or the company itself) • Future goals and plans (multi-unit franchisee or franchisor with company owned units) • How everyone is sharing in profits or will there be various forms of distributions to partners? (investors with preferred distribution rights vs sweat equity partners) • Do the owners want to receive K-1s or do they prefer all filings and payments happen at the company level? (C-Corp structure vs pass-through structure such as an LLC)

Those examples are very high-level considerations when you are looking to form an entity. There are many different examples where two different franchisees of

“

the same system choose different entity types because of certain factors above. No one can predict the future, and as you grow the business will change. What

you are doing today may not be right for the next phase of the business, such as bringing in a private equity investor.

One of the most overlooked components of franchising, and with business ownership in general, is the initial set-up and creation of the business entity. Dec/Jan 2021

General ledger program: Many business owners can relate to the classic question – “My books say I am profitable, but how come I have no cash?” I have heard this question many times and most often it comes down to a single factor: either the owners or someone involved with the business is handling the

books from a pure cash perspective and they are not recording the entries correctly. This method of running the finances of your business invariably leads to improper budgeting, mistakes and bad decision making. Here are some tips to help you out: miannuzzi@citrincooperman.com

• Create a 12-to-18-month cash flow budget and be realistic. • Make sure you factor in everything such as debt obligations and tax distributions and, of course, your salary. • Reconcile all monthly accounts, such as bank accounts, credit card statements and loan statements. • Every quarter, take a hard look at your numbers, compare actual results to your budget and identify differences. • Bring in an experienced bookkeeper to make sure all accounts are properly coded to the correct asset, liability, equity, revenue and expense accounts so you can make informed, well-thought-out decisions.

Many business owners look to save costs by doing this part themselves. Consider how much your time is worth per hour. Is it $250 an hour? Is it $500 an hour? Compare that to what you would pay a bookkeeper to do your

books. Not having a bookkeeper could cost you more money than if you were paying someone. Making these types of strategic decisions allows you to focus on the business, generate sales, and create strategy.

“Citrin Cooperman” is the brand under which Citrin Cooperman & Company, LLP, a licensed independent CPA firm, and Citrin Cooperman Advisors LLC serve clients’ business needs. The two firms operate as separate legal entities in an alternative practice structure. Citrin Cooperman is an independent member of Moore North America, which is itself a regional member of Moore Global Network Limited (MGNL).

28 Pillars of Franchising

Michael Iannuzzi is a partner and co-leader of the firms franchise practice providing audit and accounting, business consulting and advisory, and tax planning services to a wide spectrum of franchise related businesses. Michael works with franchisors and multi-unit franchisees in a variety of industries, including, but not limited to, fitness and athletic centers, children entertainment centers, junk removal companies, mobile concepts, Quick Service Restaurants (QSRs), and grocery stores. Links – Franchise Website Link - https:// www.citrincooperman.com/industries/franchising Social Media: Michael Iannuzzi - https://www. linkedin.com/in/michael13/ Citrin Cooperman: https://www.linkedin.com/company/ citrin-cooperman/ https://twitter.com/citrincooperman https://www.facebook.com/Citrin. Cooperman.CPAs/ https://www.instagram.com/citrincooperman/

Dec/Jan 2021

Features

A Life Designed

by Dawna by Elizabeth Denham

s many of us do when we turn 50, Dawna Blum, her last child in high school, started asking questions – of herself. What’s next? Who am I? What makes me happy? And she set off to find the answer. And find it, she did! Four years ago, she bought a Wild Birds Unlimited (WBU) franchise location in Woburn, Massachusetts and changed her life, her perspective and her self-image for the better. “For most of my life, I was a stayat-home mom,” Blum said. “I had four kids and a husband who worked six days a week. I did the spaghetti dinners, the coaching

30 Pillars of Franchising

“

People look up to me. They ask my advice. They trust me.

and the pasta palloozas. I worked part-time at my husband’s office 15 hours per week, but it wasn’t enough. I wanted more power over my own life.” Blum shared that the number one reason she wanted to buy a franchise was for her financial independence. And her quest began.

As a 14-year customer of her nearby Wild Birds Unlimited store, she knew its value. When she was having a down day or needed cheering up, she would go by the store -- and the store and the staff would work their magic.

worked there 10 hours each week for three years before I was ready for the next step. I loved working there. It is where I am happiest.”

“One day I asked if they would hire me. It would be something just for myself,” she said. “So, I

“It took a lot of courage for me to take this step. I did not have a lot of support,” she noted. “My kids

The Decision When she was ready to take the next big step, it was the first time in her life she ever said, “I want this, and I am going to do this one way or another.”

Dec/Jan 2021

were very supportive and told me I could do it. Wild Birds Unlimited was fantastic and provided tons of help.” Within six months of making the decision, she found the perfect location. She wanted to be in close proximity to other WBU locations knowing that she would rely on them for support. “I was so happy to talk to people and make decisions and feel confident in those decisions,” she said. “I so appreciate what Wild Birds Unlimited has done for me. It has made me feel better, calmer, happier. And that is what I want my store to do for others.” Blum used the many resources

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provided by WBU and learned from as many experienced business owners as possible creating a network of supportive peers. Blum also took full advantage of the business coach WBU assigned to her who has helped her through every step of learning. She said she never felt alone and learned two big lessons in business: how to manage people and how to run a computer. “It was important for me to be successful,” she said. “And my attitude paid off. I think I made good decisions. I am not as strong with the financials, so I feel like I have succeeded in spite of not knowing what I am doing!”

Liberation and Independence Blum is thrilled to have her own bank account with only her name on it. Her first big purchase was to update the garden beds to native plants. And in her first year, she went to Amsterdam for 10 days. “It felt so good,” she laughed. “I could afford it and so I did it. This is what it’s all about. It feels so good to be able to do things and to give my kids money for travel. It makes me so happy.” The pandemic was good for WBU business Blum mentioned, adding that people at home needed something to do to make life a little happier. With her hard work and dedication, her store is 13th

in the region out of 64 and she is running above average in her region and age of store group. Blum still can’t believe the impact franchise ownership has had on her life. “People look up to me. They ask my advice. They trust me,” she said. “And I look forward to what is next. I am now turning 60, and I am able to make my own choices, build my own life and design it the way I want it to be. Every possibility is open for me now. I can choose, which is crazy. I have all of this new confidence. Instead of being afraid, I can do anything. And the only way I could have gotten here was through this franchise.” For more information, please visit: www.wbu.com

Dec/Jan 2021

Leadership

Coming Back

from Rock Bottom

by David Kagjanich The Bottom “Dad, are we poor?”

Our early teen daughter had just finished getting ready for school and was heading out the door when she stopped and asked me that question. The irony of the question struck me first. It was about seven years earlier

34 Pillars of Franchising

when our six-year-old son had asked, “Dad, are we rich?” Staring out the window into our backyard, I took a drink of my water and turned to my daughter. I looked at her face which was a combination of worry and pleading. I did my best to reassure her. “No, we are not poor, we are broke. Broke is temporary.”

Not sure if she understood the difference or if it gave her any reassurance. I said, “Don’t worry about anything. Have a good day at school. Things will be alright.” She didn’t say another word and left for school. That was the bottom.

Sure, financially we were already there. Our business had crashed. We were sustaining losses at an enormous rate. By that time, we had depleted all our savings, retirement accounts and college savings. We were forced to close three businesses; our house was in foreclosure, and we had no income. We had one business left. Unfortunately, it had just lost $250,000 for the year, had over $2 million of debt and was about to be closed by the county for unpaid property tax. Past due bills and lawsuits were piling up.

“

by the situation, I heard myself say, “I don’t know.” His response was the first step. “You have to. We have no choice. We will never recover from the debt if we close the business.” The next statement came from a close friend and fellow franchisee who had fought through his own financial issues when his business first launched. He said, “I’m looking at my financial statement and

To tell how we were able to turn everything around would take a book. However, the key is, one person does not take a disaster such as this and turn it around by oneself. One person will need to provide the vision, strength and confidence to make it happen, but it takes a lot of people to carry it through.

Our accountant and shareholder asked me if I thought I could turn it around. Normally confident in most situations, I was so shaken

That’s the beginning. Pride is a difficult thing to overcome. Nobody wants to seem vulnerable. Sometimes, you need to derive your strength from others. You’re never alone. There are always people willing to help. Once you realize that, it’s as

“Dad, are we poor?”

Facing the reality of not being able to provide for your family… THAT is THE bottom.

The anxiety and sense of panic were frightening. The doubt was tremendously difficult to overcome. When I think back, my strength to not give up and to save the business, and essentially, our lives, came from four different people and four statements.

Without knowing it, those four were instrumental, with seemingly innocuous statements, in getting back on our feet. First, the reality of the situation and the challenge ahead. Second, the hope that it could be done. Third, the building back of my self-esteem and fourth, the reminder I needed that I had done it before, which built my confidence.

looking at yours. You can do this. There are some cost issues to fix and build some sales and you can get this to break even.” Still lacking confidence, ashamed and embarrassed that I had let it get to this point and unsure of what to do, I was close to giving up. Then, my sister, who had been bringing food over to feed the kids, said, “David, you’re smart. You’ll figure it out.” My Mom followed later, saying, “You did it before. You can do it again.”

OBSESSED WITH YOUR SUCCESS

DigitalEdge

By UniFi Equipment Finance

Leveraging 39 years of experience implementing finance programs for the partners, UniFi has taken a bold new step in adding ease of use to their process. We are pleased to announce DigitalEdge, a fully digital end-to-end funding program offering franchisees a fast, easy and secure financing experience while offering franchisors a streamedlined process to accelerate development. Digital Edge features DocuSign technology, the global leader in e-signature technology.

RJ Grimshaw CEO, President UniFi Equipment D: 734-794-4250 IM: 315.529.2903 rgrimshaw@teamuniﬁ.com UniFi Equipment Finance, Inc - 3893 Research Park Dr. - Ann Arbor, MI 48108 - T: 800.748.0015 - www.teamunifi.com

Dec/Jan 2021

if a cloud releases. You don’t feel worthless and defeated. Other people still care about you and see you for who you were before the challenge. Making it Happen Then you must make it happen. Fifteen minutes before the county was to padlock the doors, our shareholder paid the past-due property tax. Last chance. Time to get to work. Having to rally the management team and employees was not easy. As usual, honesty is the best policy. It was difficult to sit down with the managers to explain the situation and to inform them of the sales and costs targets we needed to hit. Telling our longterm, loyal managers that we need them to work more hours and take a pay cut was worse. I told them I would understand if they said no and left, but when we survived this, I would make it up to them.

36 Pillars of Franchising

They took the challenge and were the reason we turned it around. Together, we built an astonishing team. We attracted some of the best people we could have ever asked for. With a relentless focus on people, we built the business back.

me and giving me the confidence to start over, and those who worked their tails off alongside us. Forever grateful to everyone. As John Maxwell said, “Your first step to success is having the confidence you will succeed.”

If you build the people, the people will build the business. We truly had some of the best people working together toward a common vision and goal. In three months we were at breakeven and were profitable that first year. The business continued to grow and over time, exceeded all expectations and has become an icon in the community. We never forgot what our managers did and rewarded them many times over. Turning that business around was the most difficult thing I have ever done. I am grateful for the experience because it made me better. It never would have happened without others; first believing in

David Kajganich is one of Pillars of Franchising’s Million Dollar Mentors. He began his career in franchising in 1992 when he became the first franchisee for Buffalo Wild Wings. Within the first year, he reached more than one million dollars in revenue, and for nearly three decades, he successfully ran multiple units until he sold the business in 2020. David was also involved as an area director for a quick service sub sandwich concept as well as for a fitness franchise. Through his experiences, he honed his skills in the areas of leadership, performance coaching, influence and persuasion to help franchise owners get the most out of their managers and employees. He is currently a performance coach through his business, Eagle Status Performance, LLC. You can reach David at david@davidkajganich.com.

PILLARS OF FRANCHISING Looking Forward Coming in February: “To Franchising and Beyond”

www.PillarsOfFranchising.com Dec/Jan 2021

Equipment Funding

Introduction to Equipment

Financing for Franchisees

by RJ Grimshaw

s a new franchisee, putting together your financing is one of your most important business strategies, especially when you have to purchase equipment. if you pay for your equipment outright, it can be expensive enough to disrupt your cash flow -- even though it may seem like the most cost-effective way to invest in the growth of your business. You must consider things like depreciation,

38 Pillars of Franchising

maintenance and repairs before signing that check. Also, the need to upgrade over time could be another drain on your capital. For many franchise owners, resisting the urge to purchase equipment (especially as you are just starting) frees up precious funds that could be used for marketing and developing the growth of your customer base. At the same time, in the U.S., businesses can deduct costs of equipment purchases if the type of equipment qualifies (and

deduction amounts vary from year to year). Also, the U.S. and Canada allow you to deduct the cost of depreciation which can take the sting out of some of the expense as your equipment ages and loses value. Consulting your tax attorney on these points would be wise.

Need to buy equipment? Leasing can be a viable alternative, but there are important issues to consider before taking that step. Equipment leasing has become an increasingly popular option for companies that need new equipment. A lease lets you “pass the buck”—at least for a while. A funding source (the lessor) will purchase the equipment. As the Lessee, you can use the equipment in exchange for regular

payments made over a contracted period of time. Just like a bank loan though, you need to have good credit and prove your ability to repay the lender. If you are considering an acquisition, expansion or construction of a franchised business, the key can

be to determine your borrowing needs. Addressing the overall financing requirements will allow you to select the needed financing sources. FF&E financing can be a viable alternative to a cash purchase.

Dec/Jan 2021

Important variables to keep in mind are: 1. Is my lender really a lender? • You should expect a yes to this question. In many cases, a source is not a direct lender but a middleman or broker. Your costs could potentially increase using a broker as the commission is typically added to the overall cost. 2. Lender expertise in the industry. • It is important to find out how much industry experience your lender has. The more experience in the business the better. 3. Lease term. • Structure the term of the financing with the estimated useful life of the equipment. 4. Process. • Your lender should explain the process to you upfront including what specific documentation will be required. Understand the timeframe associated with getting your credit approved. 5. Financing limits. • Any potential limits should be discussed to determine if the financing is available for the total costs involved in the financing. In addition to the variables above, there are a number of key factors to consider when shopping for equipment financing: 1. It is important to ask if there are any non-refundable fees associated with your credit request that are not applied to the benefit of your lease.

a commitment. Don’t send any money until you are sure what you are signing. Remember the large print giveth and the small print taketh away.

2. Do you have a firm commitment/approval or a proposal? All documentation should be read carefully. Proposals can be carefully disguised to look like

3. Be prepared and have your financial information organized and available. An equipment financing source will require this to move forward for approval.

Equipment financing is a product. A seasoned leasing professional will understand the nuances of your industry and have the knowledge to get your requests approved and closed. Don’t hesitate to ask questions and get references. Shopping for and securing financing can be difficult at best. The equipment leasing program you select should take into ac-

40 Pillars of Franchising

count the individual needs of the project no matter how ordinary or exceptional they may be. Look for a full-service equipment leasing and financing company that services its leases from origination to termination. For more information visit: www.teamunifi.com

RJ Grimshaw, President & CEO, UniFi Equipment Finance, has previously served on the ELFA’s (Equipment Leasing and Finance Association) Vendor and Captive Business Council Steering Committee, as well participated in the past two Industry Future Councils with the ELFA foundation. RJ is a lifelong student of business, and passionate about helping entrepreneurs succeed. UniFi Equipment Finance is a wholly-owned subsidiary of the Bank of Ann Arbor. RJ joined Bank of Ann Arbor in August 2013 as an Executive Vice President and Chief Sales Officer. With more than 20 years of experience in the equipment finance/ banking industry, he brings valuable experience in the areas of commercial banking, investment banking, and business banking.

PILLARS OF FRANCHISING The Dream Starts Here! Reach your target market with the click of a button. Distribution: Social Media – 60,000+ connections Subscribers – 9,000+ Monthly Podcast Downloads – 6,000+

We have our finger on the pulse of franchising.

BECOME A SPONSOR elizabeth@pillarsoffranchising.com Dec/Jan 2021

POF Updates

Pillars Team Meeting in Chicago! by Elizabeth Denham November was an exciting month for Team Pillars. With travel opening back up, we were finally able to put an in-person meeting together to plot the plans for the next year with the Pillars of Franchising, LLC. We have lots of exciting news on the horizon, but for now, please enjoy seeing the team together for work and play – we also got to celebrate Kristin’s arrival into the half-century club!

42 Pillars of Franchising

Dec/Jan 2021

Pillars of Women

The Original

Corporate Refugee

by Nancy Chorpenning

hroughout my career, one of the most valuable lessons I’ve learned that has become my mantra is to “NEVER underestimate the Power of a Circle of Women.” I believe this adage applies to women across the board, including women in franchising.

44 Pillars of Franchising

While we are a group on the rise, we are still only about a third of the owners in the franchise space, and we need each other’s support. There is PLENTY of success for all! And it’s grand that women tend to be naturally more “abundance” than “scarcity” based. During the first 20 years of my career, I was “the first woman everything” in professional medical publishing. I excelled working

with our famous physician authors and became the youngest acquisitions editor in the industry. (Never mind that I hadn’t even known there WAS such an industry when I began…) As I became proficient in my field and built successful relationships with some of the most prominent MDs in the world, the professional publishing world was undergoing a disturbing trend. Successful

divisions were being divested as fast as I could build them. I called it the “Bain-ization” of America, where investors buy a company and sell off the component parts to benefit top management with little attention to its employees, the community, its customers or, in our case, our authors. After this happened to me personally for the THIRD time, I decided I needed time to rethink my career and my future. A LONG time. So, I joined Peace Corps and moved to Papua New Guinea for two years. That’s a story for another time. Upon my return, I was invited to help start up one of the most successful dotcoms of all time, WebMD. What a remarkable experience! I was there from day one for six years (measured in “dog years”) and learned tons, as it was my first startup. But when our original vision shifted from making a difference to patients and caregivers to making money for a small group of investors, I ejected from Corporate America for the second and final time. That is when I started my first business on my own. C-Suite Advisors launched in January 2006 and remains our corporate identity. The business that started then bears absolutely no resemblance to my current business today. And that is a good thing! I started C-Suite Advisors as a business consulting practice “to help small business owners do business planning.” (Did I mention that I’m a planning geek?) Other than my complete and total ignorance about what “small

“

Not everyone has to try twice to exit Corporate America, but I did.

businesses” were or what their owners wanted or how to address their pains and challenges it went well! (HA!)

Our focus is on continual learning, FUN, and peer support.

One of my first steps was to join the National Association of Women Business Owners (NAWBO), an established and prominent membership organization that supports the interests of women owners across every industry. (Again, a story for another time…)

If you are a woman in franchising and you do NOT have a community of women peers to support you, hold you accountable, learn from you and with you or offer an outsider’s perspective for you and your business, consider making this a top priority for 2022!

My NAWBO sisters allowed me to “learn all over them.” And I came to understand that I work better and prefer working with women, especially with those of “a certain age.” Turns out that my journey through the early days of women in Corporate America held experiences and teachings that were and are valuable to women entrepreneurs. The playing field for us is, sadly, as unequal as it was in the corporate world.

I’ll leave you with my mantra once again: “NEVER Underestimate the POWER of a Circle of Women!”

When I started my business, I didn’t know what I didn’t know. Have you ever felt like that? Because I couldn’t find the resources I specifically needed to start and grow successfully, I created the program I wished I’d had: CEO School for Women™ a (now) Virtual Learning Community for Women Entrepreneurs. My whole career has involved education. My business now focuses entirely on other women entrepreneurs. And now I get to support my sisters by mentoring and guiding them around and through the rough spots in a community of terrifically smart business owners.

Focusing on the right priorities that will lead to success and build value is critical for business owners. My specialty is working with women entrepreneurs whose businesses are in building and growth stages. Then, as they navigate the challenges of scaling, I help prioritize strategy, structure, staffing, practices, systems and processes. CEO School for Women™ is a curated group that includes online learning to enhance business skills, virtual coaching to share and get feedback strategic issues, and offline retreats to regroup, refresh, and renew. Visit www.ceoschoolforwomen.com to learn more.

Dec/Jan 2021

Featured Vendors

Spadea Lignana Franchise Attorneys Unlike many franchise law firms, we take a balanced approach by representing both franchisees and franchisors (not of the same system of course). By knowing both sides, our franchise attorneys are better able to help our clients navigate difficult issues. We have a deep understanding of the relationship dynamics that underpin all franchise systems. Many of our partners have held senior leadership positions for national franchise brands and some were franchisees themselves. That experience has proven invaluable in advocating on behalf of clients. We know franchising and we can help. Learn more at www.spadealaw.com

UniFi Equipment Finance Formerly, Ervin Leasing, UniFi Equipment Finance provides superior service with a variety of lease plans on virtually all types of commercial equipment. We have earned a reputation for service and integrity. Our lease representatives are experienced professionals in the leasing industry and the equipment markets they serve. UniFi/Ervin Leasing has been a proud member of the Equipment Leasing and Finance Association (ELFA) since our inception in 1978. The two companies share a mission for quality service, strong credit culture and a commitment to build our communities. For more information, visit: www.teamunifi.com

46 Pillars of Franchising

Westvyne Westvyne has been creatively bridging the gap between marketing & technology since 2010. We have been guiding our clients in what to say, how to say it, where to say it, and who to say it to in order to attract and retain customers. We truly enjoy getting to know about our customers and their products and services We offer a full complement of services including digital marketing, website design, marketing and brand strategy, graphic design, podcast consulting and franchise marketing. Reach out today at www.westvyne.com

Telephone Doctor Years back, Nancy Friedman phoned her insurance agent and said, “Cancel all my policies!” She was upset after repeated episodes of poor customer service. So, the agent invited Nancy to teach his staff how to improve their telephone skills. Combining the service techniques pioneered at an earlier start-up business with the presentation skills acquired from a background in professional theatre, Nancy’s customer service training program proved to be extremely popular. Word spread and after a series of Fortune 500 corporations hired her, a company was formed to market these skills and techniques. Nancy began delivering workshops to corporations and associations across North America. Today, ServiceSkills and Telephone Doctor® are both respected brands in the corporate learning space. We’ve helped over 30,000 organizations improve the Customer Satisfaction Scores (CSat) of their Customer Service Reps, Help Desk Staff, Call Center Agents, Tech Support Staff and other team members. Learn more at www.telephonedoctor.com

Eagle Status Performance Coaching ACHIEVE IMMEDIATE AND LASTING RESULTS!! Workplace success is right around the corner. In the workplace, 85% of your success depends on your ability to build relationships.

See the people in your business:

Key roles I play for companies and teams I work with:

• • • • •

Gain insights into strengths and weaknesses Develop areas for increased success Gain an appreciation for each other Understand others’ perspectives and needs Recognize patterns of behavior and understand interaction dynamics with all personality styles • Create better relationships, adapt for better communication and see growth in all relationships

BOOK A NO-PITCH STRATEGY CALL HERE

www.DavidKajganich.com

Human Behavior and DISC Trainer and Consultant Manager Trainer for Multi-Unit Business Owners Performance and Communication Skills Trainer High Performance Teamwork Development Personal Development and Performance Coach

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David@DavidKajganich.com

Dec/Jan 2021

Funding

Franchise Funding 101:

Top Options and Tips

by Kelly Krueger

t’s no secret that the pandemic has caused many of us to reconsider our career paths and priorities. As a result, individuals are quitting their jobs in droves, with recent statistics showing that one in four Americans has quit their job in 2021. For those that took the plunge, many are looking at entrepreneurship as a second career option.

48 Pillars of Franchising

To make their entrepreneurial dreams come true, most prospective entrepreneurs need to finance some or all of the busi-

ness purchase. And just as every business is different, so are the options for financing them. So where do you start? Here is a

quick 101 overview of some of the top options for funding a franchise or business:

• 401(k)/IRA Business Funding: Many new entrepreneurs are not aware that their retirement savings represent a viable resource for funding a business. Called Rollovers as Business Start-ups (ROBS), this method of funding allows you to use a qualified retirement account to fund a business – with no penalties, upfront taxes or debt.

• Rollover funds from a qualified retirement plan (including 401(k), IRA*, 403(b), PSP or SEP IRA) to start a business • No early distribution taxes or penalties • Minimizes going into debt for the start-up • No business financials are required • Up to 100% of existing funds available for use • Can also be used as the necessary capital injection for a Small Business Association (SBA) loan

• SBA (Small Business Administration) Loans: An SBA loan may provide the longest-term and lowest-interest loan available for your business. There are two main types of SBA loans and both are based on strong personal credit, industry experience and good character:

1, • • • •

SBA 7(a) Loan is the most common type of SBA loan. Funding available from $50K to $5M Longer terms/amortizations available A loan can be used for any legitimate business purpose Collateral may be required

2, SBA Preferred Small Business Loan Program (FastTrack) is another popular option but is utilized for smaller sized loans. • Funding is available from $50k to $150k • Closings in 30-45 days • Loans can be used for any legitimate business purpose • Collateral may be required

Kelly Krueger is a Senior Consultant at Benetrends Financial with over a decade of franchise and business funding experience. Benetrends has been a leader in the financial services industry for nearly 40 years, helping entrepreneurs understand their funding options and develop smart capitalization strategies. Kelly has a well-rounded, empathetic approach to assisting her clients. Prior to her position as a Sr. Consultant, Kelly was a Financial Services Professional with Prudential where she earned the following professional licenses: Series 6, Series 63, Life & Health. She also worked as a Pharmaceutical Specialty Sales Professional for near 14 years for both Schering-Plough and Sanofi-Aventis. Contact Kelly at 267.328.1296 or kkrueger@benetrends.com.

Dec/Jan 2021

• Securities-Backed Line of Credit: A bank line of credit that is backed by sufficient securities in your bank account or portfolio to use as collateral.

• Cash needs can be satisfied without selling assets, keeping your long-term investment plan in place • Avoid paying capital gain if you have low-cost basis stock which you would not need to sell • Keep all the appreciation and dividends from your portfolio • Interest rate is usually lower than an SBA or home equity loan • Borrow 60% to 95% of your investment portfolio • Receive funding in 10 days • Monthly interest-only payments

Bonus! Here are 3 additional tips to consider: 1. Get your financial house in order. Lenders (and franchisors) have certain minimum criteria when it comes to approving franchise candidates. Some may require a minimum net worth and a certain amount in liquid assets. It would benefit you to set yourself up financially – for example: find out your credit score, calculate your debt-to-income ratio and even update your resume. 2. Get pre-qualified. You do this with a home, why not a business? By getting pre-qualified through a funding provider, you can better identify what you can afford. 3. Don’t underestimate how much funding you’ll need. One of the leading causes of small business failure is undercapitalization or insufficient funding. Make sure you have enough of a buffer to help with any unexpected operating costs. Securing funding can be challenging but is one of the most important steps in starting a business. Knowing your options and ensuring you have a solid funding plan in place is often the key to long-term success and profitability. Contact us for a complimentary funding consultation or find out your fundability with our free pre-qualification funding calculator.

50 Pillars of Franchising

The Dream Starts Here Pillars is now a full-service consulting firm.

We help you select and buy a franchise, grow it to profitability and make your dreams a reality.

If you are a potential or current franchisee, we can help you with: • • • • •

Finding the right franchise Navigating the purchase process Finding a mentor Building a network Reaching your goals

If you are a franchisor, we can help you with: • • • • •

Attracting new franchisees Marketing your business Lead generation Generating visibility Reaching your goals

YourFuture@PillarsOfFranchising.

www.PillarsOfFranchising.com Dec/Jan 2021

Marketing

Can You Recover

from a Marketing Mistake? by Michele Rempel

ill Rogers famously said, “You never get a second chance to make a good first impression.”

52 Pillars of Franchising

Of course, it’s true that your business will never have the chance to make another FIRST impression. But if you make a bad first, or tenth or twentieth impression because of poor communication, a big product or customer service mistake, a bad day or any one of a myriad of ways you can disap-

point a customer, can you use marketing to make an unsatisfied customer into a “re-satisfied” one? We say yes. Re-satisfying a particular customer may not be possible, especially if the screw-up was a bad one (or, let’s face it, it’s just a customer

that won’t be satisfied). But you can use these situations to your advantage in your marketing and you may “re-satisfy” a disgruntled customer or two along the way. Here are a few ways you can use marketing to address issues and possibly re-satisfy a customer (or group of customers): Tell the story. It’s hard to admit when you’re wrong, but sometimes telling a story about how your company messed up can show that you understand where you went wrong and what you’re doing to make sure it doesn’t happen again. You may catch some heat – after all, some people love to be keyboard warriors, especially on Facebook - but others will appreciate your honesty, vulnerability and attention to customers. Ask for feedback. If you’ve identified a gap in your customer service practices or a service you offer often seems to fall short with your customers, consider asking for feedback via social

“

media, email and your website. Don’t make it a long, complicated survey. Ask for open-ended comments. Respond to any feedback you receive promptly and compile a list of any messages and suggestions that are helpful to share with your team. Since the statistics show that for every one customer who actually complains, over 20 may remain silent, actively soliciting feedback from past and current customers may be an eye-opener. Show your appreciation. Create a marketing campaign that centers around customer appreciation. Depending on your service, you may be able to send notes or give small gifts to loyal customers. You may also feature customers (with their permission, of course) on your social media profiles. When you remind everyone on your team, as well as the public, that customers are why you exist, you can refocus a company’s mindset.

… can you use marketing to make an unsatisfied customer into a “re-satisfied” one? We say yes.

Reach back to disgruntled customers. It might be good to wait a bit, but if the customer seems to be reasonable, consider sending a personal note or making a phone call and offering a discount if they give you a second chance. Happy customers who get their issue resolved often tell four to six people about the positive experience. On the other hand, a dissatisfied customer will often tell nine to 15 people about a bad experience (White House Office of Consumer Affairs). Taking time to address and validate a customer’s feelings and viewpoint can go a long way toward making better FIRST impressions with new customers.

Michele Rempel is the founder and managing partner of Westvyne, a marketing and website design firm based in California and Illinois. For almost a decade, she and her team have been guiding their clients in what to say, how to say it, where to say it, and who to say it to in order to attract and retain customers. For more information about Westvyne, visit www.westvyne.com.

Dec/Jan 2021

Million Dollar Minute

Second Chances as Our Mentors See It by Elizabeth Denham

n every issue, we will take a Million Dollar Minute to get the perspectives of our mentors about all things franchising. This month’s Q&A focuses on our theme of Second Chances and how franchising has changed our mentors’ trajectories. Here are the responses from Kristin Selmeczy, Jerry Akers, David Kajganich, and Ray Pillar. With their varied roles and experiences, they are the Dream Team in franchising. Let us know if you have questions for our next issue!

54 Pillars of Franchising

How did franchising offer you a second chance in your career? KS: Franchising allowed me to have a family life and a career! I was PTA President, Cub Scout Master, Room mom for every party, hock-

ey mom, baseball team mom… it just never ends! I serve on the Board of the Ms. Molly Foundation, and I have been so blessed to be able to enjoy watching my kids grow while giving back to the community!

JA: While I had a successful career on a couple of different levels, I was still missing something! I was missing the chance to be my own boss and to have the chance to make a difference in many lives through my business

DK: Joining the franchise allowed me to fulfill my desire to own my own business and be responsible for the results of my efforts. RP: You have many more people cheering you on, rooting for your success, helping you in every way conceivable. What did franchising teach you that you can’t get anywhere else? KS: I learned that even people who don’t have a fancy degree, who grew up in subsidized housing can be successful! JA: Knowingly buying into a system where you are generally more successful by leveraging the skills taught by the franchisor even in areas you were accepted as an expert in your previous life. In their business, they are the experts! DK: Being part of a franchise system emphasizes the importance of implementing and following proven systems and procedures. RP: Rely on proven systems and processes. What did franchising enable you to do that surprised you? KS: Franchising allowed me the opportunity to help other people, in this case, women, like my mom, who struggled to work hard and be able to provide for children.

JA: Gain a different income level and bring my kids into the business thereby changing their lives!

JA: Family meals and communal time with extended family we may only see that one time a year!

DK: The impact that you can make in the community.

DK: We look forward to getting together with the family and getting to see our kids, especially, since we don’t see them often because we live in different states.

RP: Partial retirement. I love business, so I get to do what I want when I want. What are your favorite holiday traditions within your franchise locations? KS: I love all holidays, but the best are the ones when the American traditions and Mexican traditions are shared together. JA: Buying a holiday meal for each location and celebrating with all the staff, albeit virtually! DK: We really didn’t have any traditions...except that it was the busiest time of the year, and the last six weeks of the year were both exhausting and exhilarating. RP: Potluck food events, fantastic homemade recipes. Our annual Christmas parties. What are your favorite family holiday traditions?

RP: Secret Santa gift-giving. What are you looking forward to in 2022? KS: I’m looking forward to everyone getting back to work! I want to help more people realize their dreams of business ownership! I want women to see that they can have a family and a career. If I can do it, so can they! JA: A return to an even higher level of normalcy after Covid allowing us to get back to growing businesses and improving the lives of even more staff! DK: Opening another franchise; The Joint Chiropractic! RP: In the coming year, we are prepared for better business results.

KS: I love spending time with family and friends! Summer holidays are the best! BBQ is roaring, the gate is open and all are welcome!

Dec/Jan 2021

PILLARS OF FRANCHISING

56 Pillars of Franchising

Pillars of Franchising magazine Issue 2 Dec/Jan 2021

Articles inside

Second Chances as Our Mentors See It

Can You Recover from a Marketing Mistake?

Franchise Funding 101: Top Options and Tips

Featured Vendors

The Original Corporate Refugee

Pillars Team Meeting in Chicago!

Introduction to Equipment Financing for Franchisees

Coming Back from Rock Bottom

A Life Designed by Dawna

Taxes Anyone?

A Second Chance. An Uphill Battle. And the Rise to the Top.

How to Salvage a Failing Franchise Unit

No Second Chances for Poor Customer Service…Even in a Pandemic

Act Two for Huntington Learning Center with Anne Huntington Sharma

Second Chances are for Everyone: How to Take Ownership of Your Career

From King of the Football Field to King of the Burger

Second Chances for Success in Franchising