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FRANCHISE Journal ADVICE Getting Pre-Approved for Funding, Is It Worth It? p. 88

FEBRUARY 2020 /FranchiseJournal.com

MEET THE TITANS A CELEBRATION OF BLACK HISTORY MONTH

HOW TO Find the Right Franchise for You p. 106

THE SCOOP Millennials — the Entrepreneurs of the Future. p. 86

TM


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contents

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FEBRUARY 2020

Welcome Notes

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16 If He Can Own His Own Business, Why

Can't You? By Amanda Tokos

20 Jamaica Conference Update 24 Valerie-Daniels Carter Bio

50 ADHD and Business Ownership

By Jay Bankert

26 Why People Invest in Franchises

54 From Fighter Jock To Franchise Executive

By Chris Connor

By Steve Taylor

30 Fear and Loathing in Franchising

58 Sensory Overload - Jumping in Feet First

By Dave Cooley

By Michael Martuza

36 Executive Q&A with CEO Lindsay Dellasega

62 COVER STORY

By Cristina Merrill

40 The American Dream is Alive and Well!

in 2020? By Dave Jones

FEBRUARY 2020 | WWW.FRANCHISEJOURNAL.COM

Titans of Franchising

76 Costly Tax Errors for Owners of

By Kapil Manocha

44 Is the Economy Primed to Start Business

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48 Teriyaki Madness

Small Businesses By Cherry Laufenberg

78 Living the ecomaids (Franchise) Dream

By Sharon Cupach


62 82 D1 Training's Partnership with Franchise FastLane Translates to Increased Franchise Sales

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40

86 Millennials are the Entrepreneurs of

the Future By Rich LeBrun

88 Funding Pre-Approval: Is it worth it?

By Sherri Selber

92  Best Legal Practices for Explosive

Franchise Growth By Jonathan Barber

98 How Technology & Customers are Shaping

the Franchise Model By Rick Morgin

100 2020 Trade Shows 102 Mahana Fresh Journey Blends with

Life's Work By Joseph Rahael

106 6 Steps to Getting Started in Finding the

Right Franchise By Seth Lederman

110 5 Frequently Negotiated Lease Terms

By Nancy Lanard

114  Organizational Culture — What it is and

Why it is Important? By Rashmi Alran

102

118 AAFC Seeks to Connect African American Entrepreneurs From Coast to Coast

122 Moving Small Business Forward

By Clarence Nunn

126 Taking Your Brand to the Next Level

By Jeff Dudan

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welcome T

NOTES

"Thirty-eight percent of African American small business owners are women — a big distinction f rom the average small business owner, of whom only 23 percent are women."

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his issue is dedicated to all the African American entrepreneurs who have overcome adversity in bringing their vision to life. February is when we celebrate Black History Month and reflect on the foundational contributions the African American community has made to the growth of America. Franchising has been a path to success for many business owners and the African American community is no exception. The number of African American owned franchises and businesses has seen significant increases over the years. As more Americans embrace entrepreneurship, the strides that are made by all groups magnify the strength of our Great Nation. While both African American men and women start businesses, According to Guidant Financial’s 2019 Trends Report, “There are more female African American small business owners than the average by a solid 15 percentage points. Thirty-eight percent of African American small business owners are women — a big distinction from the average small business owner, of whom only 23 percent are women. This percentage hasn’t changed since last year, suggesting that though the number of African American women in small business is greater than the average, it has hit the same plateau of growth seen in the average small business owner populace.” The American Dream is Alive and Well in the African American community as talented entrepreneurs bring us the next innovations and life changing ideas that help our country continue to prosper into the future.

Nick Neonakis

Editor, Franchise Journal

THE AMERICAN DREAM IS ALIVE AND WELL!

ORGANIZATIONAL CULTURE — WHY IS IT IMPORTANT

Immigrants are the fastestgrowing group of people achieving the American dream through small business ownership. One of the most popular avenues for many emerging entrepreneurs towards the path to business ownership is Franchising. — Kapil Manocha

A strong culture can be the key driver of performance and strategic advantage. An organization that is clear about its culture will hire and affiliate with those individuals and other entities that support the foundational values and beliefs of the culture. — Rashmi Airan

FEBRUARY 2020 | WWW.FRANCHISEJOURNAL.COM


FOUNDER

NICK NEONAKIS DESIGN DIRECTOR

Pete Neonakis DIGITAL DIRECTOR

Abel Beyene ART DIRECTOR

Marty Greenbaum EXECUTIVE EDITOR Chantae Arrington

VIDEO PRODUCER Matt Panepinto

MANAGING EDITOR Brenda Lesch

CONTRIBUTORS Rashmi Alran Jay Bankert Jonathan Barber Chris Connor Dave Cooley Sharon Cupach Jeff Dudan Dave Jones Nancy Lanard Cherry Laufenberg Rich LeBrun Seth Lederman Kapil Manocha Michael Martuza Cristina Merrill Rick Morgin Clarence Nunn Joseph Rahael Sherri Selber Steve Taylor Amanda Tokos

DEPUTY EDITOR Faizun Kamal SENIOR EDITOR Bill Polk ONLINE EDITOR Seth Lederman STAFF WRITER Megan Neonakis SOCIAL MEDIA EDITOR Abel Beyene ASSOCIATE EDITOR Mariel Miller ONLINE EDITOR Mike Ciccarelli SENIOR DESIGNER Patrick Elsner

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FRANCHISEJOURNAL.COM


If you want to get ahead in franchising, The Franchise Journal has the most concepts and tactics to help you become a business owner.

Share with your friends. franchisejournal.com


FINANCE

If He Can Own His Own Business,

Why Can’t You?

I

by Amanda Tokos, Consultant, The Franchise Consulting Company remember sitting at my desk as a U.S. Probation Officer listening to a recently released felon tell me how he was going to be a business owner. I admittedly thought to myself that it was an unrealistic goal. Almost impossible…because he had been in prison for almost 5 years, had no education, and no prior experience owning a business. Unless you counted his career as a drug dealer. Despite my reservations, I put him to the test by asking him various questions. He had no idea that I had a degree in business management, nor that I was planning to open a business of my own in the near future. Here I was thinking that I might be able to help him, but was quite flabbergasted as he explained to me in elaborate detail how he was going to open an upscale clothing store for African American men in his community. While

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in prison, he had read many books on business ownership, put together a business plan, and worked with friends and family to find an investor, retail space, and vendors. This man did in fact open up his own business despite so many people telling him it was impossible, all while I sat back in awe of his vision, passion, and determination. Fast forward 12 years, after I left my career to open a franchise, followed by two more buildouts and an acquisition, then a partner buy-out, an old acquaintance of mine reached out to discuss franchise opportunities. I asked him why he thought he wanted to be a franchise owner and he said because he felt he would do a good job and just needed a chance. I didn’t quite understand what he meant so I asked that he elaborate. He said he just needed someone to


believe in him enough to give him the money to invest into a business. When I asked him what he had done to position himself with investors in terms of industry experience and sweat equity, he admitted that he had not done anything of the sort and just felt someone should give him a chance. I almost spit my coffee out!!! These two very different stories resonate with me. Not because neither one had the financial means, experience or education to open a business, but that only one of them believed in himself. The other one believed others should believe in him. I have had the honor of listening to hundreds of stories from very successful entrepreneurs from all over the world, and regardless if they started out with a net worth of $0 or $5 million, the common denominator I heard was that they believed in themselves, even when no one else believed in them. It didn’t matter. Many even experienced failed businesses. It still didn’t matter. It was truly through their business tribulations that they become resilient, continued down the path of entrepreneurship, and developed into successful business owners.

THE ANSWER TRULY LIES WITHIN YOU. I often times talk with clients who have never owned their own business and are afraid to take that leap into business ownership due to the unknown. They literally want me to tell them if they can do it. While I do believe certain personalitytraits are prevalent in entrepreneurs and essential, “you” have to “decide” if you can do it. No one…not your family, not your friends, and not your favorite franchise consultant, can tell you if you can do it. The answer truly lies within you. But if you have a vision, passion, and determination, I suspect you do believe in yourself, even when no one else does, even when things get tough, and even when you fall down. I further suspect that you get up after you fall down, keep grinding, stay focused and reach your goals. Again, because you do in fact believe in yourself. Just sayin’. ABOUT THE AUTHOR Amanda Tokos has ten years of franchise experience as a former Massage Envy owner and operator of four locations. She advises on franchising options and career transition, while also playing an active role with her local Chamber of Commerce on their Leadership Advisory Committee promoting entrepreneurship within her community. amanda@thefranchiseconsultingcompany.com

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CONFERENCE UPDATE

Montego Bay Jamaica – The Franchise Consulting Company (The FCC) held it’s WInter Conference January 15-17. A three-day program of presentations, panel discussions, interactive dialogue along with a heavy mix of team building events on leading the way in franchise development. The event brought together some 350 franchise professionals from 130 companies to discuss development, expand entrepreneurship, to address current and future development opportunities, place national strategies in a global context and position franchise companies for high performance in 2020 and beyond. It also provided a valuable networking opportunity and set the stage for further cooperation among franchisors, consultants and professional services organizations across the spectrum of franchising. The conference began with

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opening remarks by Nick Neonakis, CEO of The Franchise Consulting Company, and then a look forward to The FCC initiative to Rebuild Puerto Rico. June 23-27th will mark the largest franchise conference ever in Puerto Rico along with The Rebuild Puerto Rico trade show which will support entrepreneurial endeavors in Puerto Rico to help the island’s economy rebuild. “Entrepreneurship will lead the way in helping our Puerto Rican brothers and sisters grow their future. Puerto Rico is an integral


part of America” and “we believe franchising is one of the foundational components of what makes our nation great” said Neonakis. A series of panels on finance, legal, strategy and best practices rounded out the day. The finance panel featured Platinum sponsor Franfund’s COO Sherri Seiber sharing what they see on the horizon in the US economy and lending practices towards franchising. The legal panel featured Platinum Sponsor Nancy Lanard of Lanard & Associates and Jeff Zucker of Fisher Zucker discussing legislative items to be aware of going into 2020. The best practices panel featured top franchisors and consultants from around the country who discussed the state of franchising, technological advancements from franchisors as well as marketing & operations best practices that help their brands grow. A series of awards ceremonies and team building activities including zip lining, ATV riding and the largest foam pool party in the Caribbean marked the end of the 3 day event.

TO LEARN MORE about The Rebuild Puerto Rico conference please reach out to info@ TheFranchiseConsultingCompany.com TheFranchiseConsultingCompany.com

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CEO BIO

Valerie Daniels-Carter President & CEO V&J Foods, Holding Companies, Inc.

V

&J Holdings’ multibrand/multi-state operation is the largest femaleowned franchise organization in the country. Dr. Daniels-Carter’s quick-service restaurant empire is comprised of Auntie Anne’s Soft Pretzels, Burger King, Coffee Beanery, Nino’s Southern Sides, MyYoMy Frozen Yogurt, Pizza Hut and the newest venture, Captain D’s Seafood Kitchen. In addition to her food service ownership, Dr. Daniels-Carter is also a minority owner of the Milwaukee Bucks National Basketball Association team. Valerie Daniels-Carter graduated from Lincoln University with a bachelor’s degree in Business Administration. In 1984, she earned a Master’s degree in Business Management from Cardinal Stritch University. Dr. Daniels-Carter also received an Honorary Doctor of Humane Letter from Cardinal Stritch University in 2008 and Lincoln University 2016. Prior to establishing V&J Holding Companies, Inc., she worked in banking and finance. Dr. Daniels-Carter is one of the most preeminent business owners in the United States. In addition to auspiciously commandeering two of the largest fast-food brand operations in the United States, she has been widely recognized for her adroit business ingenuity. As such, she is befittingly appointed to a dizzying array of financial and corporate boards. She has also chaired a cluster of boards spanning a multifarious arc of civic, corporate

and non-profit organizations. Dr. Daniels-Carter is currently a board member of the Green Bay Packers and in the spring of 2017, was appointed as the first African-American Woman Chair of the Automobile Association of America (AAA). She has been recognized consistently as the largest female franchisee in the country – an achievement that speaks to her unyielding belief and connection to God, coupled with her commitment to honesty and hard work.

DR. DANIELS-CARTER IS AN OUTSTANDING LIFE COACH AND A GENEROUS HUMANITARIAN. Her business accomplishments can only be matched by her philanthropic efforts. This CEO stays grounded by engaging in local and international philanthropic projects. On the campus of her church, Holy Redeemer, she along with the rest of her family opened a 160,000 square-foot center that houses a Boys & Girls Club, family service center, two schools (K-12), loan center, medical facility, and a community meeting facility aptly named “The Mother Kathryn Daniels Youth Center” in loving memory of her mother and husband. She has also been the catalyst to the opening of three orphanages in Kenya and Ghana for children whose parents have died of AIDS. Her entrepreneurial aptitude inspired her to author “Your Business Is His Business” and “Anointed Offering or Tainted Sacrifice”. She is a native of Milwaukee, WI and a proud mother of Jeffrey Alan.

DR. DANIELS-CARTER’S QUICK-SERVICE RESTAURANT EMPIRE IS COMPRISED OF:

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BUSINESS

Why People Invest in Franchises by Chris Conner, President, Franchise Marketing Systems

T

he entire franchise industry has gone through enormous change and evolved significantly with the "Amazon Effect" impacting nearly every industry and business on the planet. Many have even surmised that traditional retail is dead and the entire concept of a retail store is extinct. The reality is that the market segment has just changed and has been forced to evolve. Franchising is a huge and diverse industry—from fitness gyms like RockBox Fitness to QSR Food service models such as Grab N Go Tacos and specialty retail boutiques which create value at the store level like Ideal Feet. The

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franchise industry continues to grow and thrive with new ideas and breakthrough franchise brands. So why consider a franchise vs. just starting a business? A franchise essentially offers an entrepreneur a completed blueprint of a successful business based on a proven track-record. The Franchisor should have the experience and expertise to provide guidance and support to the new franchise owner to skip the learning curve and shorten the timeframe from opening to breaking even. The franchise terms and conditions are outlined in the franchise disclosure document or FDD and operational processes are documented in the Franchise

FEBRUARY 2020 | WWW.FRANCHISEJOURNAL.COM

Operations Manual. All of these documents provide a clear sense of what the Franchisee's responsibilities are to be an effective and efficient business owner while being compliant with the terms and conditions of the franchise. As a franchisee, the franchisor has already done all the heavy lifting so the new business owner doesn't have to. The franchisor developed the idea, documented the financial model and business plan, tested the business model, and defined the franchise marketing system through promoting and selling the product/services through advertising and marketing. A Franchisee can take advantage of these experiences and resources from the Franchisor and ultimately have a higher success rate than traditional business start ups. Perhaps one of the most difficult elements of building a business is establishing a professional and credible brand. A strong brand is what allows you as a business owner to marketing yourself, and create trust with consumers which ties in directly to your ability to create revenue. The barrier to entry is high for


A FRANCHISE ESSENTIALLY OFFERS AN ENTREPRENEUR A COMPLETED BLUEPRINT OF A SUCCESSFUL BUSINESS BASED ON A PROVEN TRACK-RECORD. new brands to compete with more mature brands that have captured their consumer base. Buying a franchise is one way to lower that barrier to entry by leveraging an existing brand and credibility that the Franchisor has developed. As a start-up business owner, it can be difficult without having a reliable support network and resources to support better decision making during the new business ramp up. As a franchisee, you’ll have the support of the franchisor as well as other franchises who in most cases probably have run into the same obstacles you’re encountering. Owning a franchise offers a nice balance between that feeling of independence and maintaining a comfortable level of risk. However, there is a cost associated with investing in a franchise over a new business start up. A Franchise typically includes a requirement to pay an initial franchise fee to the franchisor and ongoing royalty fees as a percentage based on how much revenue your franchise generates. Franchising requires sacrificing a little independence and freedom, but offers greater security and support in a new business endeavor. Essentially, investing in a franchise is one way of minimizing your risk of failure and maximizing your rate of success due to leveraging a standardized and scalable business model.

What is the process of finding and selecting the right franchise brand and how do you analyze the market to make the best choice? Choosing which franchise to invest with is similar to the first steps of creating a business plan for a new business start up. Some things a prospective franchisee should consider are: What kind of business might you like to own and operate? Each business requires certain daily responsibilities and skill sets, find ones that match up best with your skill sets and interests and odds are you will be happier in the long run. Do you prefer to work more as an individual or as a team member? Some franchises require large staff numbers and teams to operate, others can be managed with a very low number of employees or even as a single operator. How much capital is available to invest? A franchise which requires a physical store location is more expensive to operate and maintain than maybe a mobile business which could be run out of home office. Is there a demand for that type of business in a particular market or area you are interested in? If your local or regional market is saturated with similar brands or offerings, it can be increasingly difficult to compete for new consumers. On the other hand, If the market doesn’t offer much competition, you might have a significant opportunity

for the product or service your franchise would offer. There are over 3,000 franchise brands active in the U.S. today. Many are some of the best brands and businesses the world has ever seen, others are not as strong of an opportunity. Get help when analyzing the franchise market and making a decision with this much importance, there are countless franchise consultants who can provide direction and support to help new franchise owners go through the franchise investment process. ABOUT THE AUTHOR Chris Conner has worked in franchise development since 2002 and began his career as a franchise developer with a Chicago-based franchise consulting firm. His work focuses on strategic planning, marketing and sales of new franchise brands, he has worked with several hundred brands to implement franchise platforms and bring these organizations into the franchise market. In 2009, Mr. Conner founded Franchise Marketing Systems, a full service franchise development firm with 26 team members based in Atlanta, Georgia which has provided franchise development services to new franchisors globally. Mr. Conner hold's a B.S. in Finance from Miami of Ohio and an MBA from the University of DePaul. chris.connor@fmsfranchise.com

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LEARN

Fear and Loathing in Franchising by Dave Cooley, Consultant, The Franchise Consulting Company But what, you may be wondering, One of my favorite “Gonzo” authors, Hunter are the next steps in moving S. Thompson, wrote a book titled, Fear and your interest in franchise business ownership Loathing in Las Vegas, and it was later made forward? Well … you most likely have already into a movie starring Johnny Dep. jumped the gun! It was a great book and an “ok” movie, but Jumped the gun? Why? How? thinking about it got me to realize … there’s fear Most people who are highly motivated to and loathing in franchising, too! investigate franchising simply do what they Huh? What do I mean? always do when they want to inquire about Well, I’ve been in franchising for over twenty anything: they Google it. years and I can honestly say the number one Yes, you can say to your Google connected reason why people don’t invest in their own device, “Hey, Google. What are the best businesses can be summed up in one franchise opportunities?” and I’m word: fear. Plain and simple. sure Google … or Siri … or Alexa … And, if you stop investigating THE NUMBER will respond with something. In owning your own business ONE REASON fact, I just asked Alexa about due to fear, it’s likely you’ll be franchise opportunities and loathing the people who WHY PEOPLE she yammered away for didn’t let fear stop them and DON’T INVEST about five minutes about became successful business IN THEIR OWN franchises for insurance sales, owners. Jealousy involves a sandwiches and dry cleaning. great deal of loathing, huh? BUSINESSES CAN Or, if you’d like to stare It’s like this: If you stopped a BE SUMMED UP at your phone, tablet or hundred people at random on IN ONE WORD: computer screen for a couple of the Strip in Las Vegas, crowded FEAR. hours, you can search online (via them into a room and then asked, Google, Bing, Firefox … whichever) by a show of hands, “Who here for “franchise opportunities” or simply would like to own your own lives by “franchises” or “buy a franchise” or the like, and owning your own business?” Most likely every your search engine will list dozens and dozens hand would go up. of websites advertising sometimes hundreds of If you then said, “Keep your hand up if you have franchises each. done anything — regardless of how minor — to Go ahead, enter your contact information into investigate actually owning your own business,” one of those sites and click on a dozen options most likely every hand would go down. at each site … you’ll be begging your cell phone You’d need about a thousand hands in the provider for a new number within a day or two as air before one hand would remain raised – and, you are bombarded by franchise sales people – since you’re reading this, that’s your hand! each of whom will probably tell you that you’re a So, congratulations for being motivated enough great fit for their opportunities. about owning your own business to have at least But … are you really a great fit … or, have you, made it to reading this article … but, you can’t indeed, jumped the gun? stop here. You need to keep moving forward.

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To not jump the gun so you can truly uncover a set of franchises to investigate that will actually be good fits for you, well … you have to do some homework first. Steven Covey, you know him … he wrote The 7 Habits of Highly Effective People … gave some great advice when he wrote, “Start with the end in mind.” What does that have to do with finding “right fit” franchises to investigate though? Simple: you have to define what you are investigating franchising for … and, yes, I ended that sentence with a preposition on purpose (with apologies to Mrs. Light, my 7th grade English teacher). You have to ask yourself, “Five years from now, what do I want to have achieved through franchise ownership?” That’s starting with the end in mind, right? Start by asking yourself: WHAT WORKSTYLE DO I WANT? • Do you want to work full time yourself? • Do you want to keep your job and have a manager run the day-to-day operations of your business? This is called “semi-absentee” in franchising parlance, by the way. • Do you want to work from home … from an office … from a retail location … from a mobile location such as a truck or a van?

WHAT LIFESTYLE DO I WANT? Do you want a franchise for just “something to do” in your semi-retirement years? • Do you want to build a business as a legacy for your children in hopes they may take over the business someday? • Do you want a semi-absentee ownership/ manager-run business that will enable you to travel, golf, and volunteer or do other things with your time? • Are you looking for a business to augment and enhance your retirement income or do you need a business to pay your mortgage and to put your kids through college? WHAT INCOME DO I NEED AND WANT TO HAVE? • Do you need to replace your current (or former, if you’ve been laid off) income? • How much income do you need to cover your monthly expenses? • What is your vision for a “successful business” and the income that business provides? WHAT ARE THE CHARACTERISTICS OF MY MARKET? • Population? • Median income? • Age ranges? Continued on page 34 u

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TAKE OUT A SHEET OF PAPER AND IRON OUT ALL THE ANSWERS TO THE QUESTIONS LISTED THROUGHOUT THIS ARTICLE. WHAT ARE MY TRANSFERABLE SKILLS? • Education? • Work experience? • Life experience? Now, here’s where the “rubber meets the road,” so to speak: WHAT FINANCIAL RESOURCES DO YOU HAVE AVAILABLE AND FEEL CONFIDENT ENOUGH TO INVEST? • Cash? • Savings? • Stocks and/or bonds? • 401(k) or IRA? • Property you can sell to help finance your business investment? • Gifts or loans from relatives? • Funds from investors who want to “go in” with you? You need to tally all the resources you can muster. Yep, that’s a lot of questions to answer but without doing so, you really won’t be able to determine if a franchise option is a good enough fit for you to warrant spending six to eight weeks investigating it. More though, getting all these questions answered up front, at the beginning of the process, before you start looking at franchises, will not only give you a good road map for uncovering franchise options but answering these questions will also help lessen the bugaboo of all bugaboos that block people from business ownership: fear! So, take out a sheet of paper, pour a couple of

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cups of coffee and you and your significant other/ spouse sit down across from each other at the kitchen table and iron out all the answers to the questions listed above, then – and only then – are you ready to start looking at franchise options. Sound a bit daunting? I know. But investing in a franchise is a huge deal. If you get it right, it’ll be the best thing that ever happened to you and your family … if you get it wrong it won’t be – I vote on doing the work required to get it right. Need some help with all of this? You have some great people who can help you through this process and then guide you through the rest of the way. Who are these people? FRANCHISE CONSULTANTS. Franchise consultants are much like residential real estate agents in that they work for you … but, they are paid by the sellers. You don’t pay them anything. More, thanks to the rules laid out for franchise companies by the Federal Trade Commission, you can’t pay more for a franchise because you have the benefit of a franchise consultant helping you and you can’t pay less for a franchise if you don’t have a consultant helping you. Same cost either way … so, doesn’t it just make sense to let an experienced and ethical franchise consultant help you? Working with a consultant, you’ll clearly answer all of the questions outlined above, and then some, and your consultant will then have the information needed to do a thorough search for franchise options that are actually worth your while to review. More, a good franchise consultant will be at your side as you formally investigate franchise options making sure you understand everything and that you’re conducting a thorough and responsible investigation that will end with you knowing all you need to know to make a franchise investment decision. The Franchise Consulting Company is one of the largest and most respected consulting groups in franchising. Their consultants are some of the most experienced in franchising. Learn more at www.thefranchiseconsultingcompany.com. ABOUT THE AUTHOR Dave Cooley is a Franchise Consultant with The Franchise Consulting Company. Dave has over 20 years of executive experience in franchising and consulting. Previously he was a Lt. Col in the USAF. dave@thefranchiseconsultingcompany.com


SPONSORED

Executive Q&A with CEO Lindsay Dellasega Dellasega shares insight as leader of eco-friendly home cleaning service by Cristina Merrill WHAT VOID DOES YOUR BRAND FILL? WHAT WAS MISSING IN THE SPACE BEFORE? There is more awareness of the health and environmental benefits of using eco-friendly cleaning products. ecomaids, as an ecofriendly home cleaning service, addresses those customer demands better than any other brand. Moreover, homeowners will always value the trust and the integrity of the people coming into their homes, because ecomaids bonds, insures and trains all of its maids before they enter a client’s home. As a full-service cleaning franchise that dispatches trained and trustworthy teams and uses eco-friendly products, ecomaids is truly different from the rest, and these differentiators will help the brand grow its footprint. WHAT ARE YOU DOING WELL RIGHT NOW? WHAT ARE YOUR BRAND’S DIFFERENTIATORS? I would say the corporate-managed marketing programs, our in-house sales center and the employee training support we offer franchisees. We really uphold brand integrity. Now that ecomaids falls under the umbrella of our new parent company Happinest, which also encompasses Lawn Doctor and Mosquito Hunters, there will be even more support for franchisees. We’ll be able to keep a cutting edge on marketing, respond rapidly to customer inquiries and stay ahead of the competition. We can help our owners with demand creation and fulfillment better than ever before, allowing them to focus on customer care, staff development and retention. The Happinest acquisition will also help us ensure quality growth.

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WHAT ARE YOUR GROWTH GOALS? WHAT IS YOUR BRAND VISION THAT YOU HOPE TO FULFILL? We currently have two locations and are very much focused on the quality of our new franchisees rather than the quantity. At ecomaids, we believe culture and fit are critical to success. We only want franchisees who believe in the brand and the business model and are excited to put ecomaids on the map in their market. Ideally, I’d like to see 20 to 30 new franchisees in 2020. In a general sense, we have a vision for being a dominant brand in the cleaning industry. We want to fully penetrate every market we enter, get good customer reviews and be known as a great place to work. In doing so, we can uphold a good culture throughout our franchise system. WHAT WERE SOME LEARNING OPPORTUNITIES THAT THE BRAND LEVERAGED TO GET WHERE IT IS NOW? We’ve learned more about the support that’s needed in order to help franchisees focus on relationship building and team building. Franchisees need to focus on these two things in order for their businesses to grow. That’s another reason why we’re so excited about the Happinest partnership. The support provided by Happinest will allow ecomaids to take some responsibilities off of the franchisees’ shoulders so they can focus on growing their business. We are able to leverage the infrastructure, resources and expertise of a 700+ unit franchisor that has been a leader in home services for over 50 years. It’s


AT ECOMAIDS, WE BELIEVE CULTURE AND FIT ARE CRITICAL TO SUCCESS. WE ONLY WANT FRANCHISEES WHO BELIEVE IN THE BRAND AND THE BUSINESS MODEL AND ARE EXCITED TO PUT ECOMAIDS ON THE MAP IN THEIR MARKET. not very often you see an emerging concept like ecomaids have expert in-house marketing teams and a national sales center quoting and selling services for franchise owners. WHAT DID IT LOOK LIKE IN THE BEGINNING FOR YOU AND WHERE DO YOU SEE ECOMAIDS HEADING? I started out with my location in 2010 and we have since added a second franchise to the system. The two locations have been successful with steady growth. One location will make over $1 million this year and the other will come in at just under $1 million for 2019. I tell our team that we took the stairs so our future franchise partners can take the elevator. The tools and programs our new partners will have at their disposal didn’t exist when I was in my early stages of development. We did it the hard way, with a lot of trial and error. The model has been refined over the years and the partnership formed with Happinest has proven to be a turning point in making ecomaids a franchise that’s ready to go nationwide. I fully expect to attract high-caliber franchisees who will help us expand our footprint across the country and help ecomaids become an industry leader.

HOW DOES ECOMAIDS SUPPORT FRANCHISEES? Ecomaids franchisees can now enjoy the full support provided by Happinest. Everything starts with our on-boarding process, where new owners begin their journey and are introduced to support personnel and vendors. This carries on through our new franchisee training program and beyond as owners begin working with their franchise business advisor. Happinest offers expert marketing and operations support, as well as technician training, among other services. All of this takes a huge load off of our franchisees. Happinest is truly an expert base with refined systems. ecomaids franchisees can leverage this support and put their time and energy into focusing on their relationships and expanding their market footprint.

WHAT DOES YOUR IDEAL FRANCHISEE LOOK LIKE? The ideal ecomaids franchisee is growthmotivated. They need to be strong leaders who want to build teams because that’s what’s going to lead to growth. Our ideal franchisee is also service-oriented. This business, after all, is about customers and relationships. Of course, the ideal ecomaids franchisee can also follow a system and appreciates having a path in place. As an ecomaids franchisee, you have many hats to wear, so if you can follow a system and utilize the resources in place, the hurdles to growth can be overcome much more efficiently. WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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Your Home Thoughtfully Clean The Green Clean Customers Need At ecomaids, we help franchisees tap into the vast supply of consumers who want eco-friendly solutions for their home cleaning needs. Our safe, natural cleaning products, and our thorough 64-point checklist, help us shine brighter than anyone else in the industry.

Why Our Franchisees Love Our Spotless Opportunity

In House Financing

In House Marketing

Proud to offer $10,000 Discounts to Military Veterans, First Responders and ethnic minorities

Recurring Revenue

Available to qualified candidates

Corporate call center to close sales

Repeat customer business model

High-Demand for Green Business

Better for Planet Earth

We’re a Happinest Company

People want safe, natural products

Keep chemicals out of the environment

Franchise experts with 50 years of experience

To get more info on this eco opportunity, contact: 855-424-8683 or franchiseinformation@ecomaids.com


Join the premier managed IT services franchise, TeamLogic IT IN-DEMAND BUSINESS-TO-BUSINESS OPPORTUNITY

AWARDS AND RECOGNITION

TeamLogic IT provides businesses with technology support and services that range from simple computer systems support to managed IT services and project outsourcing. As an owner of your own TeamLogic IT business, you’ll help small- and medium-sized companies with a broad range of IT services. Your clients will come to rely on you to keep their technology current and their businesses running efficiently. You’ll help them with proactive, preventative and responsive IT services. Our monthly recurring revenue model is a win-win for you and your clients. And, the camaraderie, peer support and drive among our network of franchisees are like none other in the industry.

• The Channel Company® MSP 500 ELITE 150 • Channel Futures™ MSP 501 #37 • Entrepreneur ® Magazine Top 500 Franchise • Forbes Best Franchise to Buy • Franchise Business Review™ Top Franchise • Franchise Times® Top 200 Franchise • Franchise Gator Top 100 Franchise • Inc. 5000

FRANCHISE OWNER PROFILE The ideal candidate for a TeamLogic IT business is a person who wishes to work in a business environment, understands technology, has an aptitude for sales and/or building relationships, and enjoys working with other business professionals while building a team to deliver outstanding service and support. Many of our franchise owners were previously IT directors for small companies, executives in corporate America, engineers or technology consultants.

READY TO LEARN MORE? CONTACT US TODAY.

866.TEAMLOGIC

TeamLogic IT 949.683.3314 26722 Plaza, Mission Viejo, CA 92691

pspaan@teamlogicit.com teamlogicit.com teamlogicfranchising.com


LEARN

The American Dream is Alive and Well! by Kapil Manocha, Consultant, The Franchise Consulting Company

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hat do Elon Musk (Tesla), Sergey Brin (Google), Jan Koum (Whatsapp), Vinod Khosla (Sun Microsystems) and Arianna Huffington (Huffington Post) have in common? They are all immigrants and they are entrepreneurs. Can you imagine what America would be like without them and hundreds of thousands of other immigrants who have started small businesses here. In fact, immigrants are the fastest-growing group of people achieving the American dream through small business ownership. According to the International Franchise Association®, immigrants are taking on a significantly increasingly role in the business environment. Today 900,000 out of approximately 4.9 million small businesses are owned by an immigrant (that’s almost 1 in 5!). Not only that, but immigrants are

twice as likely to become entrepreneurs than nativeborn Americans! One of the most popular avenues for many emerging entrepreneurs towards the path to business ownership is Franchising. This is also true for established entrepreneurs looking to diversify their investment portfolios. There are several reasons for this. For one, franchising provides a proven model of success.

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The management team has made good and bad choices and fine-tuned the model by learning from their decisions. As a result, it reduces the risk and shortens the learning curve for franchisees. Franchise companies also have brand equity that has been built over time. This name recognition helps franchisees grow faster than they would had they gone it alone. Finally, franchisors also have systems in place – everything from partnerships with realtors to help find the ideal location, to architects and contractors to help with the build out, proprietary CRM software, marketing plans, social media platforms,


computer systems, etc. – that come as a playbook so the franchisee can plug and play. One of the largest population groups that intersects Immigrants and Franchising is Indian Americans. India leads the list of immigrant founders who have started billion dollar companies in the United States, according to a study done by National Foundation for American Policy, a US-based non-profit non-partisan public policy think tank. They make up only about 1 percent of the US population (about 3.9 million) but have disproportionate numbers of professionals such as physicians, corporate executives, and successful entrepreneurs. Their median annual household income is $100,000, which is significantly higher than other immigrant groups or the US population as a whole. Economics Professor Nirvikar Singh, coauthor of The Other One Percent: Indians in America, also adds – “Indian immigrants who were shut out of corporate jobs and professions because of discrimination followed one classic immigrant path, starting out in retail, hotels, restaurants, and convenience stores. Nevertheless, many of them emerged as entrepreneurial success stories. Someone who started out working in a gas station might end up owning twelve of them." 1 There are many reasons Indians make successful entrepreneurs. For starters, they tend to be more daring and risk tolerant, considering they were brave enough to migrate to a new country, learn

the systems, assimilate, and raise families here….it’s like a brand new start in life. They also tend to be extremely hard working. For many there is no boundary that exists between work and life. They are also likely to be resilient to stay the course until they achieve success. Another big success factor is the lack of entitlement. They don’t care if they had to skip an annual vacation one year or couldn’t visit a salon to get their nails done. They know all that will come with entrepreneurial success and they are comfortable with that delayed gratification. One such success story is that of Leena and Yogesh Khandelwal. Based in Columbus, OH Leena and Yogesh own a successful Technology business. But success didn’t come easy to them. It was a lot of toiling, a lot of lows with intermittent highs, and a lot of sleepless nights. Leena recalls working 18 hour days and sometimes spending the night at work. All this while raising two kids without any family support. There was never any time to celebrate. But their hard work paid off. With the technology business well established and the kids in college Leena was ready to do something for herself. With a wonderfully supportive husband, and a bundle of energy herself, she wanted to start a new business…something she could call her own. Leena is a fitness freak and loves to work out. She is also a huge dance fan and accompanied her daughter (quite an accomplished dancer herself)

to dance competitions. We talked about all of this and the choice was clear – Club Pilates® and AKT Dance®. Leena has partnered with both these brands and plans to open 6 studios in the Columbus market. Leena is a multi tasker and has the ability to be in ten places at one time. “She runs a 100 miles an hour. Sometimes I need to pull her back and say slow down honey”, laughs Yogesh. Leena has already opened her first 2 studios in January 2020. In fact, I just attended the launch of her AKT studio today! ABOUT THE AUTHOR Kapil Manocha grew up in India and worked in the Indian business environment, Kapil understands the culture, constraints, and excitement of doing business in India. He now resides in the US he has helped several Fortune 500 companies grow their business by identifying gaps in customer needs and delivering superior operational efficiency. kapil@ thefranchiseconsultingcompany.com 1 https://news.ucsc.edu/2017/06/singhbook.html

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FINANCE

Is the Economy Primed to Start Business in 2020? Starting a business in any economy should be a calculated decision. Multiple factors need to be considered. Let’s look at a few key areas: by Dave Jones, Consultant, The Franchise Consulting Company

WHAT ABOUT LENDING AND INTEREST RATES? The average 30-year fixed mortgage rate started 2019 at 4.68% and steadily declined before closing out the year at 3.93 percent. In 2020, rates are expected to remain mostly stable, not straying too much higher or lower from the 4% mark. Greg McBride, CFA, Bankrate.com chief financial analyst, predicts mortgage rates will stay relatively stable around 4% in 2020. How the Federal Reserve could impact rates: It’s challenging to predict where rates will head in the future, as daily news has the power to sway rates. But if the Fed’s attitude is any indication, then rates should remain low next year.

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WHAT ABOUT THE ECONOMY? Jobs gains were surprisingly strong in November, showing the economy still has a lot of oomph left. 266,000 jobs were added in November of 2019. Monthly job growth in 2020 is likely to average 150,000 jobs per month, down from 180,000 in 2019 and 223,000 in 2018. Partly, that is because there are fewer available workers to hire, given the low unemployment rate. But the smaller gains will also signal that the economy is slowing down to a more moderate growth rate. TOP PERFORMING INDUSTRIES IN A MORE MODERATE ECONOMY. While it is impossible to guarantee that an


industry is “recession proof,” there are certainly industries that do well — or even thrive — during times of widespread unemployment and economic recession. Economic hardship does not necessarily equate to personal financial downfall. In fact, people tend to turn to franchising in times of a strained economy (as well as in times of prosperity). “Franchising has historically done well under most economic conditions,” said Franchise Business Review CEO and Managing Director Eric Stites. “During boom periods, the fear of missing out on a great opportunity fuels strong franchise growth. During a downturn, on the other hand, the fear of job loss and financial security drives many people to take control of their own futures by investing in a franchise business.” According to The Franchise Business review, below are some of the top industries: 1. Food and Beverage: No matter the state of the economy, people must eat. Whether they’re looking for a healthy option to sustain themselves throughout the day or a tasty treat to aid them through a stressful situation, there are business and franchise opportunities just waiting to be cashed in on. 2. Retail Consignment: The craze hit during the recession. Although clothing stores’ sales were down by 10 percent in 2009, the average sales at thrift stores had increased by an average of 35 percent, according to CNN Money. 3. Information Technology: With continuous technological development and increasing dependence on our gadgets comes the need to understand how to work these devices and programs. There is a steady market for technology support, like with the franchise: TeamLogic IT, which services small companies looking to stay up-to-date with their technology. 4. Repair Industry: Hate to break it to you, but we are far from a day when cars don’t break down, roofs don’t leak, and windows don’t shatter. This is bad news for the consumer, but great news for the repair industry. Especially during times of recession, people tend to spend their money on repairs, as opposed to trashing their broken goods and buying new items. 5. Health and Senior Services: The Bureau of Labor Statistics (BLS) predicts that the health care and social assistance sector will add

more than 5.7 million jobs from 2010 to 2020, the largest projected growth for any industry. BLS also estimated that demand for in-home health aides and personal health aides is expected to grow by 70 percent because of the aging baby-boomer generation (the U.S. Census estimates that there will be over 57.8 million baby boomers between the ages of 66 and 84 by 2030). This industry is experiencing enormous growth and promises job-security, a very tempting offer for those striving to open their own businesses. There are many franchise opportunities in the senior care and health care sectors. 6. Cleaning Services: While residential cleaning services may seem like a luxury for many, it is relegated by law that all workspaces be clean. Just think about it: Classrooms, office space, conference rooms, lobbies, windows… it all needs to be cleaned on a daily or weekly basis. Cash in on this industry, one mop at a time. Corporate cleaning companies, no matter the state of the economy, will offer a reliable income. INFLATION. Inflation is simply the rate of price increase during a specified timeframe. Typically, inflation impacts small businesses (less than 500 employees) more than mid/large businesses. 99% of all companies in the US are classified as “Small Businesses”. 1. Most of the inflation is driven by less buying power, which makes franchising even more attractive. A simple review of supply and demand in the short-term and long-term inflation due to the money supply should be considered. AM I THE RIGHT AGE TO START MY BUSINESS? The best time for starting a business has nothing to do with how old you are. People of any age can start a business and you may be surprised to know that most small business owners in the U.S. are older; 51% of owners of small businesses are 50-88 years old, 33% are 35-49 and only 16% are 35 years old and under. DAVE JONES — CONSULTANT The Franchise Consulting Company 412-400-9209 David@thefranchiseconsultingcompany.com WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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EDUCATION

ADHD and Business Ownership (Squirrel Jokes Aside) by Jay Bankert, Consultant, The Franchise Consulting Company I’m happily self-diagnosed as ADHD. Oh yeah, and my wife says so, and just about everyone who knows me agrees. My short attention span has affected my work life, keeping me either job-bouncing or bored and unattached to a job I thought I’d enjoy, leading to performance decay and lack-luster attendance. The romantic thoughts of owning a business have always appealed to me, but during times of selfevaluation, I have yielded to

thoughts of inadequacy, due to short times with employers and not too many accomplishments due to this. “How could I be the boss, when I can’t even stay-put at a job for a few years?”

I TURNED TO FRANCHISING. With franchising, I found that I can be an entrepreneur with a canned system. I found a way to have a mentor and a system of

checks and balances to keep me focused and moving towards a goal. The following are some of the reasons I chose this route to own a franchise myself:

PROVEN SYSTEM: Franchise systems are built off of a successful pilot business, demonstrating success and innovation. Typically, you’re not the first to buy a franchise from a given system-others have before you and you can validate their

ONGOING TRAINING AND REGULAR MONITORING KEEP YOUR SKILLS SHARP AND ASSURES THAT YOU STAY IN COMPLIANCE WITH WHAT THE FRANCHISE DOES.

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media campaigns exist that you can populate your FaceBook, LinkedIn, Instagram, etc. with professionally created content

BACK OFFICE SYSTEMS:

results to aid in your decision to invest in that franchise.

PRESET PROCESSES: See above, but also, no reinventing the wheel. A system is in place to teach you a set of processes and procedures that have proven successful in the past.

MENTORSHIP: People are in place to teach you how to do what the franchise does. This starts with corporate training and then field training of some kind. Ongoing training and regular monitoring keep your skills sharp and assures that you stay in compliance with what the franchise does.

PREBUILT SYSTEMS: Typically, a pre-built advertising system exists. A website is created by the home office for you, populated with correct and pertinent information. Social

Accounting, billing, scheduling, etc. Many/ most franchises have a system of billing and accounting in place that interfaces directly to the home office for compliance and financial checking. Also, software or systems exist that help with scheduling and cost estimating, product ordering, credit card payments, etc. that are in place and activated by knowledgeable staff from the beginning.

recognition, training, systems, mentorship, etc. that puts you in business and keeps you in business. If you fail, then they will, also. With all of these things put onto a timeline for implementation and having the “adult supervision” to help get the ball rolling for your new business, a franchise will hold your short attention span through regular contact, goal setting, mentorship, scheduling and training. The long-term outlook is effective, as well. Seeing growth and goals that are hit or missed, good days or bad, or simply regular contact with new and old customers will keep you engaged as your franchised business progresses.

SQUIRREL!

QUANITY DISCOUNTS: Usually a franchise has quantity buying power. A franchised food establishment may have cheaper prices than the neighboring “mom-n-pop” shop, even for the same items, due to negotiated buying agreements established by the corporate team.

GENUINE DESIRE TO SEE YOU SUCCEED: A franchisor (the “parent” company) genuinely wants YOU to succeed because they earn their income off of royalties on your sales. This is a percentage of your revenue you share with the “parent company” for providing the ongoing support, name brand

ABOUT THE AUTHOR

Jonathan Bankert is a franchise owner and a consultant with The Franchise Consulting Company. In a previous life he was a Detective with the Charlottesville Police Department and is the Chair of First Responder Fran, a group dedicated to helping First Responders with franchise ownership. Contact him at jonathan@thefranchiseconsultingcompany.com or by phone or text at 717 634-6704. WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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INTERVIEW

From Fighter Jock To Franchise Executive by Steve Taylor, Consultant, The Franchise Consulting Company INTERVIEWER (STEVE): Brian, thank you very much for your time – eager to dig into some the details of your career and explore how your military experienced translated into business success. BRIAN: You are very welcome, Steve.

Brian Garrison (current COO of Buzz Franchise Brands and President of British Swim School) grew up in Medfield, MA and graduated from the U.S. Naval Academy class of 1990. While at the Academy, Brian selected NFO (Aviation), started in the A-6 Intruder community and transitioned to Super Hornets. His final command tour was as skipper of an Oceana Naval Air Station based F/A-18 squadron. Following retirement from the Navy, Brian went to work for McKinsey & Company and then was recruited to be the COO of Mosquito Joe – which in turn, provided the leadership nucleus of Buzz Franchise Brands when Mosquito Joe was sold to Neighborly Brands. Brian resides in the Virginia Beach area with his wife and two children and now calls southern Virginia home.

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STEVE: First off, I noticed on your official bio, you have an MBA from Wharton. Very impressive – did you get that while you were in the Navy or following retirement? BRIAN: I was very lucky. While a student at the Naval War College I was able to enroll in the Executive MBA program at Wharton and fly down every other weekend to Philadelphia for classes. I say “lucky” because this set me up to transition directly from the Navy to McKinsey. Also, it was also one of the rare times I was not flying at night, deployed overseas, etc. STEVE: Tell me, in your opinion – is an MBA necessary for veteran business owners? BRIAN: Short answer is “no”, but you need to understand how to manage to a budget, navigate a business environment, common terminology. The path to that understanding could be an MBA, working in business or taking a couple community college courses.

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STEVE: Most veteran franchisee’s I see are former officers. Is a former enlisted service member right for business ownership? BRIAN: Absolutely. In some ways they are even better candidates. Let me explain - any business may break even the first year, have minimal income in years 2 and 3 and then break out in year 3 or 4. In my experience – the former enlisted member is more likely to see the investment for what it is – a pathway to a high income where (at times) former officers see it as a step back. For veteran candidates who are otherwise similarly well qualified, the former enlisted member is more likely to opt for small business ownership. HOWEVER – the pool of qualified veteran officers is typically deeper if only because they have had a better opportunity to accumulate capital. STEVE: Brian, tell me about your biggest disappointment when you transitioned into the civilian world. BRIAN: Probably it was not being able to wear a flight suit to work. Just kidding - it was the lack of camaraderie and passion in the work environment. Remember – I went from command of a fighter squadron to a management consulting!


WE CURRENTLY OWN 3 BRANDS: BRITISH SWIM SCHOOLS, POOL SCOUTS, AND HOME CLEAN HEROES. ALL THREE ARE LOW INVESTMENT / ASSET LIGHT BUSINESSES THAT CAN LEVERAGE OUR CORE COMPETENCIES OF WORLD CLASS CUSTOMER SERVICE AND UNMATCHED MARKETING EXPERTISE.

STEVE: Working with small business owners like you do now, do you find the more passion and camaraderie then working for a large management consulting firm (McKinsey)? BRIAN: Absolutely. No question. I just got back from Buzz Brands’ annual convention in Mexico and I am totally energized and jazzed to be working with such a great group of intelligent, focused and passionate owners. Much more positive “vibe” than having an all employee meeting – that is for sure. STEVE: Glad we circled back to Buzz Franchise Brands. Can you tell me what this is? BRIAN: Sure, Buzz Franchise Brands is a multi-brand franchising company that builds companies that get people

talking. We do everything from developing business model concepts and launching brands to training and mentoring our owners, and we are always doing research and development to make sure we are offering cutting edge support and tools to our owners. We are located in Virginia Beach and have very strong ties to the local military community.

STEVE: What brands does Buzz currently own? BRIAN: Sure – we currently own 3 brands: British Swim Schools, Pool Scouts, and Home Clean Heroes. All three are low investment / asset light businesses that can leverage our core competencies of world class customer service and unmatched marketing expertise.

STEVE: Any final words of advice for veterans or anybody searching for a business to buy? BRIAN: When I got out of the Navy, franchising was not on the radar. I considered three attributes as I looked at my postNavy life – a) Industry, b) Location and c) Job Type. The beauty of franchising is that since it so broad, you can choose location, industry and even job type. STEVE: Thanks for your time, Brian. Go Navy! BRIAN: Beat Army! ABOUT THE AUTHOR Steve Taylor is a former Naval Officer, Naval Academy Graduate and Franchise Consultant with over 30 years industry and military experience. He may be reached at 925.344.5981 or SteveTaylor@ TheFranchiseConsultingCompany.com.

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ADVICE

Sensory Overload­— Jumping in Feet First by Michael Martuza, Consultant, The Franchise Consulting Company

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will often bring up the term “sensory overload” when discussing the franchise search process. “Sensory overload”is a state during which the rational/thinking part of the brain becomes so overloaded with new/ unfamiliar stimuli that it forgets, or is unable to, perform seemingly simple tasks. This state can cause us to make poor short-term decisions that can have lasting consequences. Let me tell you about one of my ‘sensory overload’ experiences. While in my mid-20’s I started to engage in some adrenaline producing activities; the first being skydiving. A bit of background. At some point since the time of my first jump the industry decided that letting novices skydive solo was not a good idea, so now they harness novices to a very qualified jumper and allow that expert to control the descent while the novice enjoys the ride. This harnessing concept was not used when I made my first jump; it was just me, the parachute and a one-way radio. At the start of the day I paid the fee and signed a waiver absolving the business of any and all liability, up to and including packing my parachute with kitchen utensils a la Wile E. Coyote in the Road Runner cartoons. They actually used this example while explaining the waiver. To prepare for the end of day jump I, along with the other

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members of this first-time jumpers group, repetitively practiced a variety of procedures that every skydiver needs to know; basic procedures for when everything goes according to plan, and what corrective measures to take if the plan goes awry. The hours upon hours of practice was supposed to make these procedures second nature. I didn’t find any of these practice exercises to be difficult and was told by the instructors that I was doing very well. At the end of the day the plane took me up to about 4000 feet, from which I would make my jump. When it was time to jump I was to step out of the door putting my left foot on

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the step we used to enter the plane, leaving my right foot/ leg dangling in the breeze. To keep f rom getting blown off of the step, I was to hold onto the wing support bar and wait for the jump-master to give the ‘Go’ command. At ‘Go’ I was to jump backward and lay out, spreadeagle, face down employing all of those practice exercises that were now theoretically second nature. I was supposed to count to five (one Mississippi, two Mississippi, etc.) at which time I should feel a slight tug on my shoulders from the opening parachute. I was to look up and make sure that there were no problems with tangled lines, etc. If there was a problem, I had practiced the proper


‘SENSORY OVERLOAD’ CAN RESULT FROM MANY SITUATIONS IN LIFE, FROM SKYDIVING FOR THE FIRST TIME OR BUYING YOUR FIRST BUSINESS. procedures for hours before the jump. It should be noted I was on a tether line to the plane that would automatically pull the parachute’s ripcord the moment I jumped off of the plane. After counting to five, if the parachute opened and everything was alright, I was just to enjoy the ride and remember the correct way to land. Earlier in the day an instructor made a remark about the possibility of ‘sensory overload’. He didn’t put much emphasis on it and I really wasn't concerned since I had been excellent all day in practice. So much for being great in practice, because as soon as I jumped back from the step and attempted to start my Mississippis’, I forgot how to count. Actually I forgot how to do anything. It’s fortunate that basic functions such as breathing are not controlled by the logical part of the brain because I would have forgotten that as well. After the time that it would’ve taken me count up to five Mississippi passed - it could have been five days for all I could tell - I felt the slight tug on my shoulders and I was brought back to reality. I looked up at the chute to make sure there were no issues. From that point on

everything went according to plan; actually, it was a great experience. I’ve since wondered if I did not get that tug on the shoulders from the opening chute would the ‘sensory overload’ have continued until I came to a stop. Remember it’s not the fall that kills you, it’s the stop. ‘Sensory overload’ can result from many situations in life, from skydiving for the first time or buying your first business. Utilizing an expert in assisting you to find a great fitting franchise is not unlike the tug on the shoulders from the opening parachute. You want someone available to provide you with instructions and education at the beginning and be able to guide you through to a safe landing, while keeping you focused on what’s important and realistic.

ABOUT THE AUTHOR Mike Martuza is a serial entrepreneur, author, lecturer with over 30 years of business ownership, business creation, franchising, consulting, coaching, business management. Reach him at mikemartuza@thefranchiseconsultingcompany.com Reprinted with permission from the book “The Franchise Rules” by Michael Martuza

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COVER STORY

TITANS OF FRANCHISING WE ASKED SOME OF THE GREAT FRANCHISEE'S IN THE INDUSTRY to share their success stories with us and what advice they have for people starting out. Each story is unique with a little insight into their background, goals and views on the franchising industry. Check out their businesses online.

Gary Brackett Stacked Pickle StackedPickle.com

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went from walk in college to a free agent and Captain of a super bowl team in the NFL. I leveraged my skill set from playing Football and my knowledge obtained from getting an MBA to invest in Stacked Pickle sports bar. After a few years I purchased the company and grown it to 10 corporate locations in addition to 7 Franchise locations. The goal is to grow at a pace at 10 a year so we consistently support or franchisees so they can be successful.

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Ben Carson Jr. Interprise Partners

www.interprisepartners.com

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en Carson Jr. is Co-Founder and Partner at Interprise Partners, a lowermiddle market private investment firm based in Maryland, where he assists in the overall guidance of the company and its portfolio. In this role, Mr. Carson focuses on the total financial health of Interprise and its holdings with an emphasis on capital structures, deal origination, and strategic planning. Complementing his prior experiences in investments and operations, he supports portfolio executive teams with capital market insights and growth strategies. Mr. Carson becomes directly involved with portfolio companies to support strategic alliances, business development, and corporate development initiatives. Interprise Partners is one of the few minority owned private investment firms in the country. The firm primarily invests in healthcare, business services, and infrastructure companies with at least $1,000,000 of EBITDA. Each target investment is $3-30 million backing proven executive teams leading highly scalable businesses. Mr. Carson has a dedicated interest in the success of Minority- and DisadvantagedBusiness-Enterprises (MBE/DBE) and has been an active advocate for supplier diversity and reform of current regulations. Mr. Carson has also supported multiple MBE/DBE companies as an investor, board member, and advisor and

continues to be routinely engaged in the MBE/ DBE business community. Mr. Carson is also involved in the community and serves on several boards, including Tufts University (Tufts Entrepreneurship Center), YPO Southeast US, Mt. Washington Pediatric Hospital Foundation Board, and The Carson Scholars Fund. Mr. Carson earned a Bachelor of Arts degree in Psychology with a minor in Entrepreneurial Leadership from Tufts University. He is a recipient of Baltimore's 35 Under 35 award, the Envest Foundation's 40 Under 40 award, and DCA Live’s Rising Stars of GovCon. VISION FOR THE FUTURE Continue to build Interprise Partners and drive workforce development and education in underserved communities. With our continued focus on MBE/DBE investments, we believe that this traditionally underrepresented demographic could have a meaningful impact not only on their local communities, but also on the broader capital markets. If MBE/DBE businesses have access to capital, talent, and education they will be as (or more) successful than their non-MBE/DBE counterparts. As this reality continues to unfold, I hope to do my part to encourage the success of these capable and enterprising entrepreneurs. WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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Antwanye E. Ford Enlightened, Inc., www.enlightened.com

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BACKGROUND ntwanye E. Ford is President & CEO of Enlightened, Inc., a leading Information Technology and Management Consulting firm founded in 1999. Enlightened serves federal, state, and local government agencies, and provides cyber security, software development and integration, management consulting and business process outsourcing services. As co-founder of Enlightened, Antwanye has led the Company’s growth from a start-up business to a diverse organization with over 200 employees. He continually leads the Company’s corporate vision, strategic planning, and innovation efforts. LOOKING TOWARDS THE FUTURE As I think about the future, I am full of hope for an unusual reason. I believe for various reasons people have become more honest with each other. People are more honest about what they want and what they are willing to give. As a society, it is accepted that we have become more polar in our views and perspectives on a myriad of topics, however, this is why I am hopeful. Before this wave of polarization, we had to guess about people’s agenda, needs and wants. From a business and personal perspective, once someone validates their

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agenda and states their objectives, we can have an honest conversation without fishing for the hidden meaning. Yes, there are still hidden agendas, however, we can get further down the problem-solving road, because we all come to the conversation with a map of how we believe the problem should be solved. In the past, people did not openly share their map; now, the map is present and accounted for. The core of this hope is that as we have more honest conversations, we should and must establish that honesty must be maintained throughout the process and all partners must be honest if they are willing to get to a common goal. If not, time, energy, and effort must be re-directed to issues, problems and concerns that are solvable because two people decided to be honest. As far as my greatest learning experience and a concept that has helped me throughout my life, it comes down to one statement: “do what needs to be done, but what other people are not willing to do”. A Black Executive and mentor, who was a shining star at a Fortune 500 company, told me that this was his method of accelerating his career. It has never failed. Be ready to take the risk.


Robin Kirksey K-Bilt Investments, LLC DBA Wingstop wingstop.com

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y background is growing up in LA/ Gardena having a love for Family, God, sports and neighborhood friendships. Month to month living and bad credit was rampant. I decided from an early age that I would be a little different in that realm of life. I listened, grasped and took direction well but did not always want to be in a less authoritative position. Way before I could attain a workers permit I had paper routes and I would cut a lot of my neighbors yards to earn money. As I grew older and with the help of my older brother and sister Carl and Dale I began to blossom in the sport of basketball. I earned an athletic scholarship to Loyola Marymount University. I studied business and developed lifelong friendships. After receiving my BA I played ball overseas in various countries and I also toured with the Harlem Globetrotters. After hoop, I started investing in real estate. I studied many franchises and at the time Wingstop was definitely the best option.

ADVICE I WOULD GIVE TODAY IS TO LIVE BELOW YOUR MEANS, SAVE MONEY, BE DILIGENT AND RESILIENT. REALLY STUDY WHAT CONCEPT YOU THINK YOU WOULD LIKE THE MOST. I now own/operate 8 locations with a different concept in fruition called the Lash Lounge. Advice I would give today is to live below your means, save money, be diligent and resilient. Really study what concept you think you would like the most. Pick franchisees brains and get all the information you can. WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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Pele Nunley Paul Davis Emergency Services of Mansfield mansfield.pauldavis.com

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'm a mechanical engineer by education. I attended the Colorado School of Mines and worked in the Oilfield for 18 years. I really enjoyed solving engineering problems and leading teams. However, there was a certain aspect to my work that left me unfulfilled emotionally. I didn't feel like I was helping people or positively impacting lives. So, when I was laid-off in 2014 I hired a franchise consultant (thanks Nick Neonakis!!!!) to help me find a business that would be profitable and fulfilling. After several personality assessments, we came to the conclusion that "restoration" would be the best industry for me. But what kind of restoration; Auto, homes, etc? Based on my background in engineering, we thought home restoration would be the best fit for me, and boy were we right!!!! The satisfaction that my team and I get when helping a property owner in a very stressful time is immeasurable! When people come home to find their most valuable physical asset (their home) has been damaged by water, fire, mold or storms; and we're able to

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empathetically guide them through the process of mitigation, and reconstruction..... It gives me chills thinking about the smiles and hugs we've received over the years!! The Paul Davis f ranchise has been an excellent fit for me. We both align on values and ethics. They've been a great support for me, and have helped me continue to grow my business without losing our core values along the way. For those looking to join the empowering, and sometimes scary world of business ownership, I strongly suggest looking at a franchise. Purchasing a franchise has a LOT of benefits for a start-up, due to someone already creating a script for you to follow so that you too can be successful. Do your homework and visit the franchisor and meet with current owners. This is the only way to truly understand if the franchise will be a great fit for you. Good luck, and enjoy the process.


Rod O'Neal JR Whitsett www.mrwhitsettinc.com

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od O’Neal was raised in Las Vegas, Nevada and graduated from Clark High School. He later matriculated to University of Nevada, Reno where he studied in the concentration of Business Administration. While attending the University of Nevada, Reno, O’Neal was initiated into the Theta Sigma Chapter of Kappa Alpha Psi Fraternity. After graduating from the University of Nevada, Reno where he obtained his Bachelor of Science in Business Administration in 1989 he went on to complete the Military Police Officer Basic Course Program. During America's entrance into the Persian Gulf War and the Operation Desert Shield/Storm War in 1990, O’Neal was a commissioned First Lieutenant Military Police Officer. Upon his completion of his tour in Iraq, Brother O’Neal graduated from the Nevada Peace Officers’ Standards and Training (POST) Academy and started his career in public service in law enforcement as a Police Officer for the State of Nevada Gaming Control Board Enforcement Division. He served as an Agent until promoted as a Senior Agent of Field

Services Unit. During his employment with the State of Nevada Gaming Control Board, Brother O’Neal started a Cleaners business serving as the company’s Vice President. The company later expanded into concessions at the McCarran International Airport located in Las Vegas, Nevada and operates five (5) Mrs. Field’s/TCBY, three (3) Port of Subs, Popeye’s Chicken and Biscuits, Jody Maroni’s, Vienna Beef Hotdogs, and an Accessories for Wireless Store. He expanded the company into the SeattleTacoma International Airport located in SeaTac, Washington where he owns the Africa Lounge and Mountain Room bars in the A concourse. The bars received the Airports Council International (ACI) award for best locations in an airport in North America. He operates the largest African American owned companies in the states of Washington and Nevada based on the number of employees and gross receipts in excess of $11 Millon collectively. WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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Brian Pearson The Franchise Consulting Company thefranchiseconsultingcompany.com

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started out in franchising in 1999 with smaller franchise concept as western regional business consultant and learned the operational aspects of being a successful franchise operator from training, staffing, budgeting, business planning and operational excellence. During that time, I was fully exposed to the incredible world of franchising and how massive the industry truly was. I then moved into a great and very challenging opportunity with Cendant Corporation and Jackson Hewitt Tax Service Franchise covering the Southeastern and Central States eventually back to Western states as the Director of Franchise Development doing Franchise Sales, Conversions and Acquisition of independent tax practices. I achieved a high level of success attaining the President Club honor 3 times. Boston Pizza Restaurants and Sports Bar was a great franchise chain. I had the pleasure of working for under the leadership of Jim Treviling learning the restaurant industry in the Casual Dining sector with higher ticket franchise investments. I truly enjoyed working with Boston’s, but I was inspired by the example I saw from Jim to start my own company and become a business owner. In 2007 I started my 1st company that was a Franchise Coaching, Consulting and Franchise brokerage firm. In 2007 I also attained my Certified Franchise Executive designation for the International Franchise Association and was the 5th African American to attain it in. As a Franchise Coach, Consultant and Broker I have immersed myself in continual learning

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of the multiple brands and Industry sectors for franchise concepts and opportunities. A major key aspect I focus my clients on is following a system for success. The path of franchising is a great wealth building formula that has and can be replicated. Many of my clients have started with just 1 location and have flourished into multiple locations and multiple franchise brands. I make sure they have secured financing through our great companies like Guidant Financial, FranFund, Benetrends or Tenet Financial for SBA Loans or 401K ROBS (Roll Over for Business Start Ups) or whatever means they feel comfortable with. My advice to anyone considering starting franchise exploration is to partner with a top franchise broker that is experienced and credible. The process should never be rushed. I would say the more information you can provide about you, your likes, wants and must haves — the better I can work with you to find the best opportunities that meet your criteria. Being very candid is great. Be open minded and receptive to learn what you may have not ever considered for a business. Step out of your comfort zone. Be a sponge and learn like your going back to school. I would also recommend getting a franchise attorney to help review the FDD and franchise agreements to explain some of the key aspects of the agreement


Michael Poe The Franchise Consulting Company

thefranchiseconsultingcompany.com

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FROM “THE WIRE” TO “THE BRIDGE” aving spent over 20 years working on a global stage developing and leading brands across countries on 5 continents, Michael is truly a global citizen who brings his unique perspective and business management experience to the world of franchising through his work as a consultant for The Franchise Consulting Company and as a Franchising Development advisor to the Swedish start up community. Michael has been around the world and had a truly inspiring path that has taken him from his humble beginnings in the rough streets of West Baltimore to the far shores of Australia, to the beautiful land of South Africa, to the amazing deserts of Saudi Arabia and now to the vibrant land of Sweden. It is this global perspective that helps Michael navigate the varied types of brands, people, needs, wants, cultures and situations for a positive result which is built on a solid business foundation combined with the empathy, self-awareness, curiosity, confidence and ability to listen. It was early on that the value and importance of a solid education and a lifelong passion for learning were critical to achieving the kind of life that I wanted for myself. In addition, having the confidence to believe in yourself and embrace the unknown gives you permission to expand and grow. I chose the business environment to operate in, but I believe these principals apply to all disciplines. Typically, the journey will not be a

smooth or direct path, but it is how you respond to those bumps and forks in the road, and the choices you make that will provide the valuable inputs to building your character and your life. This is the advice that I will give my son when the time is right. Be curious, be smart, make good decisions without fear of failure and take care to nurture yourself, those around you, and the community in which you live. You’ll be happy and achieving happiness is successful life. Michael received in BA in Religion from Trinity College in CT. and he obtained his MBA from Duke University’s Fuqua School of Business. Originally from New York City, Michael continues his explorative nature and currently resides in Malmö Sweden with his wife and young son. With a purposeful balance between work and family and personal interests, Michael can often be found in the kitchen trying to perfect his favorite dessert (Chocolate Mousse Cake), or pounding the pavement as an avid runner constantly seeking to beat his personal bests, or dreaming of underwater exploration as a PADI Certified Rescue Diver. WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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Donnell Thompson Checker Board Foods LLC | Checkerboardfoods.com

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have been in the food business over 30 years. I was a part of a training program with McDonalds while playing Football in the NFL. I was bless to have very good mentors at McDonalds. I graduated from the university of North Carolina at Chapel Hill and was a student athlete. This is where I learned about everything is about the entire team! I played on the kicking team my first year in collage and did not like it, but that’s where I was needed. Business is sometimes the same way. You must do what you have to do to Win! People are the most important part to anyone’s success. We have the Dennys Brand and Rally’s / Checkers Brand today. I love the QSR business.

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We were blessed to buy the Birmingham AL. Market Rally’s in early 2019 and are very pleased with the Rally’s Brand.

WE WILL CONTINUE TO GROW RALLY'S AND CHECKERS BRAND IN A BIG WAY. I am very blessed to be doing what I love. The best way to understand any business is work the business yourself and understand the in’s and outs of the business. Have God lead your path, ask him for understanding. You are not smart enough!


Carlos White Frost Brown Todd frostbrowntodd.com

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arlos White is a Member at Frost Brown Todd LLC., an AM Law 200 law firm. He has been recognized multiple times by D Magazine as one of the best franchise lawyers in Dallas. Carlos has a 360° view of franchising. He has advised franchisors and franchisees on various domestic and international franchise disclosure, registration, relationship, and transactional issues, and he has even operated a franchise unit with his wife. Carlos has extensive experience in representing and counseling companies on franchise and distribution matters, including creating franchise networks for companies and assisting franchise operators on unit acquisitions and strategic partnerships and transactions. As a result of his professional background, Carlos has clients throughout the United States and has represented numerous startups and mid-market companies on franchise and corporate matters, including business

CARLOS HAS EXTENSIVE EXPERIENCE IN REPRESENTING AND COUNSELING COMPANIES ON FRANCHISE AND DISTRIBUTION MATTERS. acquisitions and divestitures, raising capital through private offerings, and structuring legally compliant joint venture arrangements. Economic development and mentoring are passions for Carlos. Accordingly, Carlos has served on the Southern Dallas Economic Development Board and Dallas County Big Brothers Big Sisters Board. Carlos received his law degree from the University of Pennsylvania and undergraduate degree from Southern University. WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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Hiawatha Williams Williams Chicken williamschicken.com

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iawatha Williams is the Founder and CEO of WILLIAMS CHICKEN. The Dallas-based fast casual chain is celebrating more than 30 years as the most beloved ‘chicken spot’ in North Texas. With nearly 40 stores and about 500 employees, Hiawatha Williams has worked tirelessly to cook up a stellar reputation. With humble beginnings from a small Texas town, Williams earned an opportunity to work for a nationwide fast-food corporation while in attending Paul Quinn College, only to later spread his wings into the world of entrepreneurship. Serving GREAT CHICKEN, COOKED FRESH, NEVER FROZEN has been the passion Williams has dedicated his life to. His popular mantra, dedicated to serve, grow and give back to the community, resonates with the company’s work ethic and unmatched ‘give back spirit’ supporting major community outreach in the area of education, youth programs, and corporate philanthropy. Williams is an inspiration to many and a mentor to all who have witnessed or somehow been the recipient of his faith-filled messages and inspiration. He is quick to acknowledge his Lord and King, Jesus Christ as the conduit for his success and after that – he quickly highlights the role

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THE DALLAS-BASED FAST CASUAL CHAIN IS CELEBRATING MORE THAN 30 YEARS AS THE MOST BELOVED ‘CHICKEN SPOT’ IN NORTH TEXAS. his wife of over 30 years and the people who have been with him since day one, as the wind beneath his wings. Williams has become the cover story for entrepreneurship for various publications. He and the company have been featured in Black Enterprise Magazine Top 100, Our Texas Magazine, Dallas Business Journal and so many others. Williams also has appeared on numerous television shows and is a frequently invited to inspire entrepreneurs and students. Mr. Williams and his wife Doris have two adult sons who also work in the family business.


Tim Williams Williams Chicken williamschicken.com

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im Williams is a Certified Franchise Executive with more than 25 years in the franchise industry. Williams’ experience, however, spans into various fields, including commercial real estate, franchise licensing, and business development consulting. An executive who prides himself on crafting deals that makes a difference for everyone, Tim Williams has led the growth of WILLIAMS CHICKEN for more than two decades. As Director of Franchise Development and Operations for Williams Fried Chicken Inc., and Williams Chicken Licensing Company, Inc., he has lead the company into multimillion dollar status, becoming one of the largest African-American Franchisors in the nation. Under Williams’s leadership, Williams Chicken has experienced tremendous growth and development with more than 40 stores in its system. Williams has been called upon for his innovation, creativity and relationship building skills that has allowed him to keep the Williams Chicken brand top of mind for prospective franchise partners and consumers. A former commercial real estate Associate with Quine & Associates, Williams learned quickly that his

experience in commercial real estate, coupled with his franchise expertise would yield effective results. His business development and corporate initiatives are now making a difference with other major brands. Williams has utilized the WILLIAMS CHICKEN company philosophy, “to grow, serve and give back to the community” to inspire other corporate partners to give back to communities that so generously supports their business. Under Williams’s leadership, he established the WILLIAMS CHICKEN Partners in Education program that has attracted partners like AT&T, Coca-Cola, and others to support communitybased programs with partners like the YMCA and others to serve children and youth. Williams is well respected and is known throughout the country and state of Texas for his work as a leading Franchise Developer and Operations Executive. Williams earned a bachelor’s degree in Finance from Texas Tech University, and received his Certified Franchise Executive Designation more than 10 years ago. WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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Karim Zaman The Zaman Group www.thezamangroup.com

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arim Zaman, President of The Zaman Group has been a successful business owner for over twenty two years and Home Guardian Angels for two years. The Zaman Group’s diverse business includes: Public Communications, Wholesale Distribution and Airport Retail Concessions with Joint Venture Partner, The Hudson Group, the nation’s premier airport retailer. Long dominant in Public Communications with 8 airport contracts, The Zaman Group expanded its offering into Airport Retail Concessions on June 1, 2009. Significant in The Zaman Group’s new growth ventures is its Joint Venture partnership with The Hudson Group, Magic Johnson Enterprises and other partners to include 46 airport retail concession stores at Los Angeles International Terminal (LAX), including the Tom Bradley International Terminal at LAX. In addition to the Hudson News brand, this partnership contains specialty retail including: Hugo Boss, Rip Curl, Harley Davidson, Magic Johnson Sports, Mattel, Armani, Coach, Michael Kors, Tumi, Victoria’s Secret, Fred Segal and Bvlgary (partial list).

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THE ZAMAN GROUP’S DIVERSE BUSINESS INCLUDES: PUBLIC COMMUNICATIONS, WHOLESALE DISTRIBUTION AND AIRPORT RETAIL CONCESSIONS WITH JOINT VENTURE PARTNER, THE HUDSON GROUP, THE NATION’S PREMIER AIRPORT RETAILER.


FRANCHISEJOURNAL.COM/SUBSCRIBE


ADVICE

Costly Tax Errors

for Owners of Small Businesses by Cherry Laufenberg, CPA, Associate Director of Tax Services with Berkowitz Pollack Brant For many small business owners, taxes are a once-ayear chore that requires them to dig through files of paper and pull together all of the documents required by their tax preparers to file their annual returns. Truth be told, maintaining tax compliance and minimizing one’s annual tax bill is a year-round process that demands constant planning and attention to detail. Last-minute preparation during tax season increases the likelihood that errors will occur and penalties will be assessed. Following are four cost-saving tips for business owners to keep in mind throughout the year.

PAY ESTIMATED TAXES Under the U.S.’s pay-as-you-earn system of taxation, individuals, including sole proprietors, partners, and S corporation shareholders who expect a federal income tax bill of $1,000 or more are required to make estimated payments to the government on a quarterly basis (April, June, September and January) or risk penalties that come with underpayments. The amount of estimated taxes you should pay each quarter is determined by your filing status and the income you reported in the previous year, less eligible deductions and credits.

DEPOSIT EMPLOYMENT TAXES Small-business owners are responsible for paying the wages of W-2 employees and withholding from workers’ pay the appropriate amount of federal income tax, Social Security and Medicare tax, and Federal Unemployment Tax (FUTA) based on the IRS’s withholding tables. The taxes withheld plus the employer’s share of those amounts are required to be deposited by the business on time via electronic fund transfers.

FILE ON TIME Businesses, like individual taxpayers, must file their federal tax returns in a timely manner by the published due date, which varies depending on the entity structure. In general, S corporations and partnerships have a tax filing deadline of March 15, whereas corporate tax returns are due on April 15. All

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businesses can receive a six-month extension to file their returns, but tax liabilities are due by the March and April deadlines. Business owners have additional tax filing responsibilities throughout the year, including, but not limited to mailing W-2 forms to employees and Form 1099 to independent contracts and the IRS. Failure to meet a filing deadline may result in late-filing penalties and interest on underpayments.

SEPARATE BUSINESS ND PERSONAL EXPENSES The tax laws for individuals differ from those that apply to business entities. While it may be easy to use one credit card or bank account for all expenses, doing so can make it difficult to discern legitimate business costs from personal ones come tax time. This can result in errors when claiming deductions and raise red flags in the event of an IRS audit.

ABOUT THE AUTHOR About the Author: Cherry Laufenberg, CPA, is an associate director of Tax Services with Berkowitz Pollack Brant, where she works with corporations, pass-through entities, trusts and foreign entities. She can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or via email at info@bpbcpa.com. Information contained in this article is subject to change based on further interpretation of tax laws and subsequent guidance issued by the Internal Revenue Service.


SUCCESS STORIES

Living the (Franchise) Dream

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by Sharon Cupach, Senior Director, ecomaids

have heard it said many times over my 20 plus years in franchising that no one decides to be in franchise development…franchise development finds us. I am no exception. I was looking for ways to make a living and support my family doing something I enjoyed. Not too much to ask for, is it? When presented with my first opportunity into franchising, I had no idea I had found my passion. I had found my path to success. I did not realize how interesting this industry was. I also had no idea how impactful and satisfying it was to help others through the process of business ownership. I have had the pleasure and honor of working with some of the best of the best in franchising over the years. I have learned from every opportunity and every colleague. One of the most valuable lessons I have learned is that my role is to educate. I educate our candidates about the concept. I paint a picture of what it would be like to be a franchisee. We walk

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through the process and determine if it is a good fit. If it’s right, it’s right. Helping grow multiple concepts over the years has been an amazing opportunity. I am fortunate to keep in contact with some that I “walked with” 20 years ago. It makes me feel happy and proud that I played a small part in their story. I am living my dream as Senior Director with ecomaids® which is part of the Happinest group. ecomaids is focused on bringing a green, eco-friendly option to the market by leveraging its many years of experience in home services. Happinest is the parent company to Lawn Doctor, a 53-year franchise with over 600 units. They also own Mosquito Hunters which has grown aggressively over the past two years since purchased. Happinest has an entire team of subject matter experts to support our franchisees throughout their business in areas of marketing, operations, training and the sales center.


WHEN PRESENTED WITH MY FIRST OPPORTUNITY INTO FRANCHISING, I HAD NO IDEA I HAD FOUND MY PASSION. I HAD FOUND MY PATH TO SUCCESS. ecomaids is unique. It focuses on the trend of green cleaning. We truly are green, using plant based, biodegradable, toxic free and allergen free proprietary products. We do not use paper towels and a minimal amount of water to clean a home. We don’t just talk about being green. We are green! In today’s society, green, eco-friendly products and services are no longer a consideration, they are an expectation. This green movement puts the brand and our owners in a very favorable position within the marketplace. I am into simplicity and this model couldn’t be any more simplistic. We don’t have the need for a build out or a storef ront location like many franchises do, so it’s a relatively low inf rastructure business. As the customer base grows, our owners simply add vehicles, allowing us to stay mobile and nimble. Our candidates love the recurring revenue and high retention rate potential with their customers. We assist with customer acquisition and our franchisees can focus on doing an amazing job of keeping them happy.

This is an opportunity to get into a solid, proven industry with a unique proposition. It is considered a low investment with incredible centralized marketing support and a national sales center to sell for the franchisees. It is an easily scalable business without a ton of employees. As a veteran mom of two sons, I am proud to work with a company that honors our veterans, first responders and ethnic minorities with a generous discount. I am fortunate to work with some of the most wellrespected professionals in franchising. I am thrilled and excited to be a part of the future with ecomaids! I am confident we will make ecomaids a household name and lead the cleaning industry. Personally, I enjoy spending time with my husband in beautiful SW Florida. We have 5 amazing children and 5 perfect grandchildren spread all over the country. We enjoy good wine, good food and watching the dolphins in the Gulf of Mexico. Not a bad life! Every day I feel grateful for the opportunity to touch someone’s life. Perhaps change their path. And know I was able to play a small part. It’s a good day, every day.

WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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MEET FRANCHISE FASTLANE

Meet FranchiseFastLane at ALL The Great American Franchise Expo in 2020! For FREE Tickets go to: www.franexpousa.com


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JANUARY

WE BELIEVE FOOD SHOULD BE DELICIOUS, ORGANIC AND INSPIRING.

It's not made, it's not manufactured, it's grown. To own your own grownTM and join our fast food revolution, please visit grown.org. Now awarding grownTM franchises!


OPPORTUNITY

Millennials Are the Entrepreneurs of the Future by Rich LeBrun, Consultant, The Franchise Consulting Company Millennials, those born between 1981 and 1996, are redefining small business entrepreneurship now, and will continue to do so well into the future. Dubbed the “most entrepreneurial” generation in history, studies show millennials will comprise 75% of the global workforce by 2025. According to a study by Wells Fargo Works for Small Business, 80% of millennial business owners are in it for the long haul, 67% are willing to take financial risks in order to grow, and 77% are optimistic about the future. NorthStar Research for the Small Business Majority found that millennials are taking an entrepreneurial role in businesses such as technology, retail, e-commerce and investment management. However, “millennials don’t want to be managed, they like to be led, coached and mentored,” entrepreneur Farshad Asi said. “This generation is on fire and ready to go.” The International Franchise Association has recognized the potential of millennials and launched NextGen in Franchising, a program which offers future “franchise ambassadors” with networking opportunities, constructive feedback and a closer look into how the franchise process works, according to the IFA website. So, what makes millennials ripe for the entrepreneurial picking, so to speak? Several factors. Forbes said millennials are flexible, embrace the unexpected and enjoy

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ACCORDING TO A STUDY BY WELLS FARGO WORKS FOR BUSINESS,

80% 67% 77%

OF MILLENNIAL BUSINESS OWNERS ARE IN IT FOR THE LONG HAUL, ARE WILLING TO TAKE FINANCIAL RISKS IN ORDER TO GROW, AND ARE OPTIMISTIC ABOUT THE FUTURE.

the journey. They are willing to step outside the “industry bubble” to gather useful information. Millennials take initiative without asking for permission but relish the guidance and advice of a mentor. Millennials know social media, a key aspect of most marketing and branding. Finally, unlike baby boomers, Millennials know how to unplug and refocus, and realize the importance of spending time with friends and family. You can’t ask for a better set of attributes than that.

ABOUT THE AUTHOR Rich LeBrun has 30 years as a senior executive working with small to medium size companies helping them with strategic planning, executive coaching and leadership training. rich@ thefranchiseconsultingcompany.com

WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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FINANCE

Funding Pre-Approval: Is It Worth It? by Sherri Seiber, COO, FranFund

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wning a franchise can be one of the most rewarding and exciting experiences of your life. Like many other major purchases, it usually requires financing. When shopping for a new home or a new car, how would you determine your price range? You could go to a dealership and test drive the flashiest vehicle you see on the showroom floor. You could meet with a realtor and tour the biggest, most expensive home they have to offer. Alternately, you could contact a lender and obtain pre-approval, which would be a much wiser way to make a major purchase. Although obtaining preapproval for a franchise purchase is more complicated than buying a house or a car, the premise is the same: a potential lender checks your personal financial history to determine the range they’re comfortable lending to you. This is to help ensure that you make the best investment possible. There are several factors that lenders consider before providing a business loan, which fall into four categories: credit, equity, collateral, and burn rate.

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CREDIT is your personal credit score and financial history. The lender will look to see that you have demonstrated responsible use of credit in the past. Items such as late pays, delinquencies, medical charge-offs, and credit card debt ratios will be considered, as will timely payments, length of credit history, and types of credit used. If your credit is not strong, FranFund will help you explore other funding options, including 401(k) business funding.

EQUITY is what lenders refer to as your “skin in the game.” The personal equity – or cash – injection required by a lender can range from 10% to 30% of the total project cost. This number depends on the type of loan, the size of the loan, and the borrower’s financial health.

SBA LOANS require the borrower to pledge an asset as collateral, such as a home. Although a home is the most common form of collateral, alternatives exist. SBA loans typically have the advantage of being lower interest and more flexible than alternative options.

BURN RATE is the rate at which an enterprise or individual spends money. The lender requires a business owner to have postloan liquidity via an outside source of income – such as house payments, groceries, and utilities – to cover personal expenses, as well as the SBA loan and the business lease during the critical startup phase of the business. FRANFUND designs flexible funding plans that help new and experienced business owners fund their franchises. We have a powerful and accurate pre-approval process. Our former bankers analyze a candidate’s financial situation the same way a lender would, and we have a 99% success rate in obtaining loans for borrowers who received FranFund pre-approval! Whether you’re considering your first franchise purchase, or are an experienced franchise owner, FranFund is here to help.

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LEGAL ADVICE

Best Legal Practices

for Explosive Franchise Growth by Jonathan Barber, CPA, Partner at Franchise.law

How to protect a brand during massive expansion. It’s becoming increasingly common to see emerging franchisors sell 50, 100 or even 200 or more franchises in a year. Their concept is unique, their sales team is aggressive, and their leadership usually gathers a cult following. Some of these franchisors work with franchise developers and utilize various franchise broker groups. Others handle their sales in-house and source all of their leads organically. There’s no specific formula for franchise growth as there are many ways to sell a large volume of franchises. However, franchisors experiencing explosive growth can find themselves in a legal minefield where one small step can spell disaster. Below are some common pitfalls and best legal practices for avoiding them.

DISCLOSURE COMPLIANCE A franchisor’s first few sales are usually “rough” from a legal perspective. If they worked with a franchise attorney to prepare their franchise disclosure document (“FDD”), they should have learned the basic disclosure rules. If the franchisor doesn’t have a system for tracking disclosures, they could run afoul of the “14-day rule.” Should they sell a franchise before 14 days have passed since disclosure, that franchisee could have serious state and federal claims, including “rescission.” Rescission and fines can effectively cripple a new franchise system before it ever gets off the ground. Shockingly, many franchisees are given the wrong FDD, a Microsoft Word version of the FDD, a redlined version of the FDD, or never even given an FDD! These mishaps are rarely intentional. They’re usually the result of the franchisor’s sales team simply not knowing the rules. Today, there are software and systems available to franchisors for disclosure compliance. Many franchise lawyers will also handle electronic disclosure for their franchisor clients. At a minimum, franchisors should attend the IFA Emerging Franchisor Conference and other IFA events where they can learn these basics.

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Franchisors should also consider enrolling their sales or development teams in the IFA Certified Franchise Executive program, which provides extensive compliance training. The best practice is to learn the basics of franchise disclosure and to attend continuing education on the topic since these laws are subject to change.

PROPER DOCUMENTATION With explosive franchise sales comes a ton of documentation. FDD receipts, franchise agreements, development agreements, and addenda to those agreements are some of the key documents that should be organized and easily accessible by the franchisor and their legal counsel. Additionally, franchisors should keep accurate records of franchisee applications, vendor contracts, intellectual

MANY FRANCHISORS ASSIST NEW FRANCHISEES WITH IDENTIFYING A MARKET WHERE THERE’S A NEED OR DEMAND FOR THAT PARTICULAR FRANCHISE. property registrations and state franchise registration and renewal documentation. Today, all of these documents can be easily maintained in PDF format. If franchisors are utilizing electronic methods for disclosure and signing franchise agreements, those PDFs can be easily searchable. If a franchisor doesn’t keep its franchise and related documents in order, there is a much greater chance of compliance issues arising. For instance, if a franchisor loses a franchise agreement they are


at the mercy of the franchisee. This is a bad position to be in if that franchisee ever becomes dissatisfied with their franchise. On the other hand, a particular franchise unit could be awarded, transferred, re-acquired, re-sold, and closed all within a twelvemonth period. Every year, each franchisor must update the Item 20 tables of their FDD, which state the number of units awarded, transferred, re-acquired by the franchisor, and closed. A lack of documentation can lead to inaccurate numbers, which is a federal compliance issue that can be easily avoided. The best practice is to either use franchise management software or to work closely with a franchise attorney to create an maintain a document management system.

SETTING BOUNDARIES It’s important to set boundaries with franchisees from the start. Most franchisors know what they can and cannot say in regard to financial projections. If there’s nothing in Item 19 of a franchisor’s FDD, they can virtually say nothing about the prospective financial performance of their franchise units. One situation in which it’s easy to slip up with respect to financial representations is when a prospective franchisee is trying to obtain financing. Often, a lender will require a prospective franchisee to assemble financial projections. The franchisee, in turn, looks to the franchisor for guidance in putting these numbers together. Franchisors also need to be aware of their involvement with

franchisees’ hiring practices. Franchisors often suggest staffing levels and require managers to attend training. However, some franchisors actually interview and approve their franchisees’ candidates. As the franchising community has recently seen, involvement in the hiring process can create liability for the franchisor as a joint-employer. Many franchisors assist new franchisees with identifying a market where there’s a need or demand for that particular franchise. However, some franchisors require franchisees to use the franchisor’s in-house, affiliated or preferred real estate agents or teams in obtaining a site and negotiating a lease or purchase. These deals often fall through, and a franchisee can’t open by their deadline. These franchisees sometimes pursue claims against the franchisor for interfering with the real estate process. The best practice for all of these claims is to define clear boundaries with franchisees and to allow them to navigate these decisions on their own. There are huge opportunities for explosive franchise growth, but there are huge risks as well. A well-informed franchisor can navigate the minefield and emerge with a strong, sustainable franchise system. By following best practices, the franchisor ensures their massive growth lasts and all ships continue to rise.

ABOUT THE AUTHOR Jonathan Barber is a partner at Franchise.law, a boutique franchise law firm that exclusively represents emerging and established franchisors in transactions and litigation. Contact Info: jonathan@ franchise.law | (980) 202-5679 | www.franchise.law

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NEW BUSINESS

HOW TECHNOLOGY & CUSTOMERS ARE SHAPING THE FRANCHISE MODEL by Rick Morgin, Consultant, The Franchise Consulting Company

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he franchise landscape is changing quickly. New business opportunities are emerging within traditional industries, creating what we refer to as disruptions. This is good news for both sides of the franchise model. Companies ready for expansion can more easily consider franchising, and entrepreneurs eager to own a business can find a greater range of opportunities. What is causing this shift, this disruption? Simply put it’s due to advances in science and technology. Advances in science and technology are allowing

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businesses to develop innovative new products, attract a greater number of customers, and provide increased convenience to those customers. What this means is traditional offerings are being broken down into highly convenient and customized products and services consumers can purchase with the touch of a button. The fitness industry is one example where we see disruption and opportunity. If you think about traditional fitness service offerings, Big Box gyms come to mind. If we apply advanced technology, improved customer access and greater convenience

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to this industry, we find many new offerings. For example, specialized fitness concepts have developed a segment of the fitness industry known as boutique fitness. Specializing in a specific fitness category such as Yoga, Indoor cycling, Rowing, or Stretch and building a studio in an aesthetically pleasing, smaller and more personable footprint, boutique fitness has grown 450% year over year since 2010. Boutique fitness concepts create an intimate and almost tribe like following. This loyal customer following develops because the franchises operating in this space empower their managers, trainers,


and staff. This team utilizing technology creates the customer experience that consumers are looking for in new fitness concepts. Customers can use smartphones to access the app and schedule a work-out based upon location and desired time frame. When investigating the fitness industry, potential Franchise candidates should find the company whose strengths give them an edge in this field. A company who strengths are in real estate, labor, marketing and branding, and buildout has mastered the most difficult aspects of opening a franchise location. A dedicated team devoted to real estate who proactive searches for the right location with the right demographics with simplify this part of the process. A company whose track record is

in attracting, empowering, and retaining thousands of their fitness instructors will benefit the franchisee in their system. Look for a company that has the highest of brand standards and marketing programs and guidelines. What this means is that, the company provides the bulk of the marketing programs delivering the brand standard which allows the franchisee to focus on the customer experience. A brand or company who has a standard footprint has also figured out efficiencies in the build out process, this reduces a franchisees time to their grand opening. Other examples of change can be found in the beauty and fashion industry, where blow-dry bars, on-call stylists, and gown rentals are disrupting traditional salon and boutique businesses, bringing increased convenience to

more customers. The automotive industry has fantastic business models that are industry disruptors and go beyond the maintenance and collision repair businesses. It’s exciting to see this level of disruption across traditional industries. So many new opportunities are emerging for both franchisors and franchisees. Additionally, just as we are seeing greater convenience for consumers, we are seeing greater flexibility for businesses. More aspiring entrepreneurs can enter the franchise market with varying levels of investment and commitment.

ABOUT THE AUTHOR Rick Morgin is a Consultant with The Franchise Consulting Company and alumnus of SantaClara University. We assist clients with the educational process of researching and selectingavailable franchise businesses that best suit desired lifestyles and financial goals. The research, qualification, and application service we provide is free; our fees are paid by the Franchise company when a client opens their business. For more information please email rick@thefranchiseconsultingcompany.com , call/text at 925-324-6371 or visit thefranchiseconsultingcompany.com WWW.FRANCHISEJOURNAL.COM | FEBRUARY 2020

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2020 Franchise Trade Shows FEBRUARY 8-11, 2020

APRIL 4-5

SEPTEMBER 18-19

IFA2020 Convention Orlando World Center Marriott Orlando, FL www.franchise.org

The Franchise Expo Pennsylvania Convention Center. Philadelphia, PA www.nationalevent.com

The Franchise Expo Alameda County Fair Grounds Pleasanton, CA www.nationalevent.com

FEBRUARY 15-16

APRIL 18-19

SEPTEMBER 19-20

The Great American Franchise Expo Irving Convention Center Dallas, TX www.franexpousa.com

The Great American Franchise Expo Orange County Convention Center, Orlando, FL www.franexpousa.com

The Great American Franchise Expo Henry B Gonzalez Convention Center, San Antonio, TX www.franexpousa.com

FEBRUARY 15-16

APRIL 25-26

OCTOBER 2-3

The Franchise Expo Meadowlands Expo Center Secaucus, NJ www.nationalevent.com

The Franchise Expo Greater Tacoma Convention Center Tacoma, WA www.nationalevent.com

Franchise Expo Houston George R Brown Convention Center Houston, TX www.mfvexpo.com

FEBRUARY 20-22

MAY 16-17

OCTOBER 3-4

Franchise Expo South Miami Beach Convention Center South Beach Miami, FL www.mfvexpo.com

The Great American Franchise Expo Cobb Galleria Atlanta, GA www.franexpousa.com

The Great American Franchise Expo Miami Airport Convention Center, Miami, FL www.franexpousa.com

FEBRUARY 22-23

MAY 16-17

OCTOBER 9-10

The Great American Franchise Expo Stafford Center Houston, TX www.franexpousa.com

The Franchise Expo Dulles Expo Center Washington, DC www.nationalevent.com

The Franchise Expo Tampa Convention Center Tampa FL www.nationalevent.com

FEBRUARY 29-MARCH 1

MAY 28-30

OCTOBER 23-24

The Franchise Expo Austin Convention Center Austin, TX www.nationalevent.com

International Franchise Expo The Javits Center NY, NY www.mfvexpo.com

The Franchise Expo Royal Plaza Trade Center Marlborough, MA www.nationalevent.com

MARCH 14-15

JUNE 6-7

OCTOBER 31-NOV 1

The Great American Franchise Expo Tampa Convention Center Tampa, FL www.franexpousa.com

The Franchise Expo Hyatt Regency Hotel Orlando, FL www.nationalevent.com

The Great American Franchise Expo Dulles Expo Center Washington, DC www.franexpousa.com

MARCH 20-21

JUNE 27

NOVEMBER 6-7

Franchise Expo Nashville Music City Center Nashville, TN www.mfvexpo.com

The Great American Franchise Expo Rebuild Puerto Rico Wyndham Convention Center Rio Grande, PR www.franexpousa.com

The Franchise Expo Dallas Market Hall Dallas, TX www.nationalevent.com

MARCH 28-29

SEPTEMBER 10-12

NOVEMBER 13-14

The Franchise Expo Donald E. Stephens Center Rosemont, IL www.nationalevent.com

Franchise Expo West Phoenix Convention Center Phoenix, AZ www.mfvexpo.com

The Franchise Expo Cobb Galleria Atlanta, GA www.nationalevent.com


There are alot of choices!


INVESTMENT

Mahana Fresh Journey Blends with Life's Work by Joseph Rahael, Entrepreneur

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rowing up in Trinidad and Tobago, I started working in my family business weekends and summers from my early teens. To say those years with formative would be a gross understatement. The time spent working with my grandfather, father and

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two uncles and aunt were the equivalent of multiple University degrees. Not to mention a vast amount of life lessons and Common Sense experiences. I learned so much from those days and it sparked the entrepreneur inside me. I never looked back. I continued my entrepreneurial education by

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getting a double major from the Wharton School in real estate development and finance. After graduation I worked for the family business in the USA and Trinidad and Tobago working on all facets of real estate development in major commercial projects.


To give back to the community, I was an investor on Trinidad's version of Shark Tank known as "Planting Seeds". It gave me the opportunity to participate with and advise up and coming young entrepreneurs. Seeing the creativity and ambition of my fellow Trinis was an extremely rewarding experience. And now the Mahana journey begins... my next entrepreneurial venture will blend all of my life's work, experiences, and joys all into one fabulous opportunity of retail, real estate and food. I’m looking for partners who can help grow this amazing brand. Mahana fresh is a fast casual dining experience centered around great tasting, fresh healthy, affordable, fast service, gluten-free cuisine. I am developing the rights for all of South Florida. Mahana is a Hawaiian word meaning the warmth of the Sun, and at our restaurants

we intend to provide a warm, welcoming, fresh and delicious dining experience indicative of the brightness and positivity of the sun. I am truly excited and eager to share Mahana with South Florida and if you are interested in opening one, we should talk! A large number of Trini friends are reaching out to make investments into the USA alongside entrepreneurs from South Florida. I am looking forward to sharing Mahana with South Florida and I know when you taste the food once you’ll know why this is the best franchise option in the QSR space!

ABOUT THE AUTHOR Joseph Rahael is an entrepreneur, philanthropist and real estate developer who splits his time between Florida and Trinidad and Tobago. He is currently developing Mahana Fresh a healthy QSR concept in South Florida. For more information reach out to him at 407-232-3705 or joseph@ mahanafresh.com

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FRESHNESS ISN’T JUST A SAYING, IT’S A COMMITMENT. A SINCERE BELIEF THAT A GOOD MOOD BEGINS WITH GOOD FOOD AND EVERYONE HAS A PLACE AT THE TABLE. VISIT OUR WEBSITE FOR FRANCHISE INFORMATION MAHANAFRESH.COM MEET MAHANA AT THE GREAT AMERICAN FRANCHISE EXPO IN HOUSTON AND DALLAS! FOR FREE TICKETS GO TO: WWW.FRANEXPOUSA.COM


INVESTMENT

Steps to Getting Started in Finding the Right Franchise by Seth Lederman, Consultant, The Franchise Consulting Company

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hen considering any new investment, you probably have a million questions, and getting started in franchising is no exception. Your mind will be racing: What's the best franchise industry? What's the best business model? What are the start-up costs? How do I finance the investment? How much money can this franchise make? Will I have to manage people or can I be an absentee owner? These are all fair and important questions, so you'll certainly want to follow a Step-by-step plan to exploring franchise ownership. The path to addressing all of these questions begins with the most fundamental question of all: How do I get started choosing the right franchise? The good news is that if you've done some initial research, there are some proven steps you can follow to ensure you make an informed decision.

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SET YOUR PRIORITIES IN ORDER TO NARROW YOUR FOCUS One of the first things you need to do as a prospective franchise buyer is to form a list of your top priorities. The list doesn't have

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to be complete or final, but it should capture your top must-haves that will guide your initial franchise search. Your priority list will cover things like: • The type of business you'd like to be in (preferences like "I'd prefer to work with consumers," or "I'd like to be in a business to business franchise.”) • Are you looking for a large, established industry, or brands? • How much can you afford to invest. • Is the franchise or Industry congruent with your value structure?

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EXPLORE YOUR OPTIONS AT A FRANCHISE SHOW Once you've assembled your initial list of priorities, it's time to start asking questions. Going through a detailed Q&A with several dozen franchises can be time consuming and impractical, you can't fly to every franchise's HQ to meet with their corporate staff, so you need a way to meet with as many franchise representatives as possible in a reasonable amount of time. Attending one or more franchise shows or expos is a great way to


accomplish this task. Most franchise shows will feature anywhere from a few dozen to several hundred franchises gathered in a convention hall, with hundreds or even thousands of individuals just like you going from booth to booth to learn more about companies that pique their interest: think of these events as speed dating for the potential franchise owner! You won't learn everything there is to know about an interesting franchise at a franchise show, but you will learn enough to cross opportunities off of your list that don't truly meet your criteria

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of the experts — the current and former f ranchisees themselves! Start emailing or calling the individuals found in the list of current and former f ranchisees you compiled in Step 3.

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VISIT FRANCHISE LOCATIONS (AND COMPETITORS) Even if you discover a great concept with seemingly happy franchisees, to get a really good understanding of what to expect you'll want to visit active franchise locations or meet faceto-face with several current franchisees. Again, working with the list of franchise outlets that you compiled from the FDD in Step 3, you should map out a dozen or so locations you can visit and/or with whom you can meet face-to-face. Remember not to limit yourself to just talking to franchisees directly related E. FRYER to your own franchise of interest - you'll want to speak with competitors as well. The more variety you get, the better information you'll have.

DIG INTO THE DETAILS After reviewing the profiles of franchises of interest online and speaking with their representatives at a franchise show, you should have narrowed your list of potential franchise opportunities – MATHEW to perhaps a half dozen or so. This is when it's time to get down to the details! Obtain copies of the Franchise Disclosure Document from the franchises you're most seriously considering. The FDD breaks BONUS down the details of the franchise opportunity ACCEPT THAT YOU CAN'T KNOW providing a description of the business, the EVERYTHING expected costs of investing and running a location, discussion of the franchise's key The most important thing a potential franchisee can do to ensure executives, a list of any ongoing litigation that success is to know everything they may raise red flags for you as a prospective possibly can about the company they're investor, as well as many other crucial details. getting involved with before investing. It SPEAK WITH CURRENT AND may require months of research before FORMER FRANCHISEES you are ready to select and invest in your No amount of research can own franchise. supplant the need to speak with There's no question it's a lot of work, but if you current and former investors of a proceed diligently through the steps outlined franchise. Take the questions you developed above, you'll have started down the right path from reviewing the FDDs — questions about to a decision that could pay back your efforts the business, about training and ongoing for years to come. support, questions about the Item 19 (earnings claims) statements, questions about the SETH LEDERMAN expansion (or contraction) of the system — and Senior Franchise Consultant get them all in front of you in one place. 312-307-1297 Now it's time to ask some tough questions seth@thefranchiseconsultingcompany.com

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“YOU CAN’T FIND WHAT YOU ARE LOOKING FOR IF YOU DON’T KNOW WHAT YOU’RE LOOKING FOR.”

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OUR STYLISTS USE THEIR EXPERT TRAINING TO RECOMMEND THE PERFECT CUT OR STYLE FOR YOU.

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LEGAL ADVICE

Frequently 5 Negotiated Lease Terms by Nancy Lanard, Esq. Founder, Lanard & Associates The commercial lease can have a significant impact on the performance of a franchised business. Among other things, lease costs, restrictions on the tenant’s business, and the rights and uses that are specified in the lease can affect whether the business will be successful or not at a particular location. In this article, we discuss five frequently negotiated lease terms and offer strategies for approaching these terms from the perspective of the tenant/franchisee looking for a retail location.

1. PERSONAL GUARANTY The personal guaranty is often a hot-button issue in commercial lease negotiations. Having

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been burned badly during the recession and having their own lenders to whom they must answer, landlords prefer strong personal guarantees. However, negotiation by tenant’s counsel to limit guarantees is still imperative. For example, a tenant may attempt to limit the personal guaranty to no greater than twelve months of rent (or less, if the landlord will agree) that lasts through only the initial term of the lease (or only the first several years of the lease). This means that the personal guarantor will only be liable for at most twelve months of future rent and additional rent (taxes, insurance and operating expenses) plus all

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past rent due. In order to have the most leverage in the negotiation of the personal guaranty, the tenant should address the topic at the pre-lease stage, during its negotiation of the letter of intent (“LOI”). LOIs are non-binding but landlords typically remain faithful to their terms through a lease negotiation, and they expect the same from the tenant. Sometimes, tenants will sign an LOI before they have retained counsel. While landlords may be quite reluctant to reopen the negotiations on the guaranty, tenant counsel can attempt to revisit the issue by explaining that the tenant did not have a full understanding of the implications of the personal guaranty.


2. RELEASE UPON AGREEMENT Since the recession of 20082010, landlords have commonly required the original guarantors of a lease to remain jointly and severally liable (meaning they are liable equally with the tenant and may be called upon to step in and make payment before enforcing the tenant to make payment, and each guarantor is fully liable, not partially liable) for the tenant’s performance under the lease even after the business has been sold and the lease assigned to a new tenant. This means that the guarantor[s] may be guaranteeing the rent obligations of the buyer of their business. In strong economies this can be a tough term to eliminate. Many times it can be negotiated if the sale of the business is to the franchisor or another franchisee of the system who has a similar or stronger net worth than the prior guarantor.

3. RELOCATION In shopping centers, landlords will often want flexibility in moving a tenant to another location to accommodate another prospective tenant. This can be highly detrimental to a tenant’s

business. It is important to try to either eliminate landlord’s right to relocate completely or limit the landlord’s rights. Limitations can include, for example, (i) the times of year or days of the week; (ii) designating certain areas within the center as permissible areas for relocation; (iii) ensuring that landlord pay all costs associated with the relocation, including ancillary costs; and (iv) limiting the time it takes for the relocation to minimize the impact on tenant’s business. Of course, all rent should cease during any relocation period and when the tenant is closed for business.

4. OPERATING EXPENSES Most retail leases are “triple net” leases. This means that the tenant pays their prorated share of the taxes, insurance and operating expenses of the shopping center. However, what is included in the operating expenses that are paid by tenant? This is a highly negotiable item. In the negotiations of a retail lease handled by Lanard and Associates’ attorneys, we always start with negotiating 28 exclusions from the charges to be included in the operating

expenses that are passed through to the tenant such as capital expenditures of the landlord, costs to repair damages caused by other tenants, interest or penalties landlord is charged due to landlord’s late payments of its expenses, etc., should not be passed through to the tenant.

5. MAINTENANCE OBLIGATIONS Defining whether the tenant or the landlord is responsible for maintaining and repairing the premises is critical in the lease. The heating, ventilation and air conditioning (HVAC) maintenance and repair (or replacement) is very important to define since the costs to repair or replace it can be thousands of dollars. A retail tenant should always ensure that the HVAC system is in good working order and has been maintained properly throughout the life of the unit. Tenant should try to negotiate a representation and warranty on the HVAC system from the landlord. Additionally, the tenant should make sure that the landlord is responsible for all plumbing and sewage lines that enter the premises. These are the first five of the ten clauses I believe to be the most important to negotiate in a retail lease. For additional clauses please refer to my published article on this topic: American Bar Association The Franchise Lawyer Article by Nancy Lanard. To speak with one of our attorneys, please contact Nancy Lanard, nlanard @lanardandassociates.com or 215-392-0030 x101.

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LEGAL ADVICE

Organizational Culture— What it is and Why is it Important? by Rashmi Airan, Consultant, The Franchise Consulting Company I have been a professional in the legal, business, government, and community sector during my years as an adult. Though I was not aware of it as I was working in these various positions, I was exposed to an organizational culture that focused on outcomes and results over values and behavioral norms. As a young twenty-something fresh out of college, I worked in a culture that emphasized roles withhierarchy and thrived on competition. Later as an eager

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lawyer, I worked in a culture that inherently operated with many sub-cultures embedded within the organization. I am often asked to help others on finding the right f ranchise opportunity where there is a foundation of integrity in the organization’s culture. I have spent a significant amount of time doing research and understanding how corporations within one industry would operate in an organizational culture that is completely different from an entity that functions in another area altogether. As defined by

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Merriam Webster’s Dictionary, culture is defined as “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.” Clearly, however, every organization (whether corporate, governmental, or non-profit) formulates and operates with a culture unique to that entity, thus begging the question: What is organizational culture, why is it important, and can it be defined? Culture is, essentially, the underlying values, assumptions, and beliefs that act as the heartbeat of an organization. These all contribute to the


distinct social and psychological environment of an organization. (See www.businessdictionary. com) Every company is made up of individual people, each of whom should understand, uphold, and be inspired by the organizational culture in his/ her workplace. Culture will include the written rules on how to do things, but also include the passed-down stories and experiences f rom those that have helped shape the culture. Leaders are instrumental in formulating and sustaining the culture of an organization. So, why is organizational culture important to a f ranchisee and why are companies placing time, energy and resources to training on, evaluating, and, at times, working to cultivate and change the culture within their organizations? In essence, a strong culture can be the key driver of performance and strategic advantage. A culture can act as an ignition switch turbo-boosting an organization

with overall improvement in efficiencies and compelling positive metrics. An organization that is clear about its culture will hire and affiliate with those individuals and other entities that support the foundational values and beliefs of the culture. The leaders of such organizations model behavior and actions that are in line with the culture and lead by example. It is important to understand, however, that cultures are dynamic and depend largely in part on the people that operate within the culture. Shifts will eventually take place thereby mandating an assessment of the culture on a regular basis. As people are constantly evolving and ever-changing, the cultures within which they work will necessarily need to be re examined and revised.

RASHMI AIRAN 305-772-8712 Rashmi@thefranchise consultingcompany.com

IDENTIFYING THE COMPANY CULTURE The way in which the culture of an organization can be identified with these aspects of an organization: 1. Treatment of employees, customers, and the larger community – insist on fairness, tolerance, and respect for individual(s)? 2. Integrity of the functions and operations– value ethics and morality? 3. Freedom in decision-making and personal expression – are team members encouraged to express their emotions and concerns and have the business discipline for decision-making to do the right thing? 4. Commitment to innovation –encourage experimentation and risk-taking? 5. Flow of power and information - opportunity to speak openly in safe spaces and to challenge if there is disagreement? What is the distribution of power 6. Structure and hierarchy of the team - rigid roles and hierarchy? 7. Incentive structure motivation to make good choices, to act as a team, to empower each other, to contribute to the community, to lead, and to help the company grow?

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ADVICE

AAFC Seeks to Connect

African American Entrepreneurs From Coast to Coast As the U.S. economy continues to strengthen, more entrepreneurs and investors are looking for opportunities to own their own business or generate additional income through franchise ownership, a viable path to financial freedom. Business ownership in the African American community has grown rapidly in recent years, but many challenges remain. For example, African American entrepreneurs experience more difficulty securing financing, and are often charged higher rates when they do. Some of these challenges can be addressed by access to information and collective action through industry groups and communities. While there are brand-specific organizations and

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associations (most notably McDonald’s franchise owners), the The African American Franchise Council (AAFC) seeks to create a platform where past, present and future franchisees, franchisors as well as related vendors and organizations across all categories can engage by sharing valuable resources gained through experience. The African American Franchise Council was founded as a platform to enable and support the exchange of ideas and information. To that end, it offers three main channels for engagement: Online through our social media platforms, which offer a ready-made forum that can act as a marketplace for ideas as well as a place for networking with thought leaders. While most current franchise owners are Baby Boomers and Gen Xers, millennials are beginning to make their presence felt, and all can benefit from intergenerational knowledge transfer, which works well in both directions. Seasoned industry veterans can share their experience about challenges they faced as they built their businesses and the younger generation can


TRADE SHOWS ARE A GREAT WAY TO MEET FACE-TO-FACE WITH DOZENS OF FRANCHISE COMPANY EXECUTIVES WHO WANT TO AWARD TERRITORY IN THE REGION. THE GREAT AMERICAN FRANCHISE EXPO CONNECTS HUNDREDS OF FRANCHISE BUSINESSES WITH POTENTIAL OWNERS. shed light on marketing in today’s digital world and the preferences of younger consumers. Those who prefer to work directly with others as they investigate franchise ownership can engage with experienced consultants, who can help them identify concepts based on a well-defined and client-centric process to evaluate candidates and connect them to resources

including legal reviews and financing options. The Franchise Consulting Company (FCC) works with hundreds of brands in many industries and its global network of consultants can help potential franchisees navigate through the process of exploring entrepreneurship. Finally, trade shows are a great way to meet face-to-face with dozens of franchise company executives who want to award territory in the region. The Great American Franchise Expo connects hundreds of franchise businesses with potential owners. The expos provide education through seminars from industry experts on topics including franchise law, financing, and other critical business concepts. Attending these expos will provide potential franchisees with the opportunity to network with leading industry executives and franchise developers, who can help entrepreneurs turn their business into a franchise. The events are also a great way to connect with local chambers of commerce and other affinity groups connected through the common theme of business ownership.

The new decade will likely see rates of business ownership continue to grow in the African American community. The AAFC seeks to become a trusted resource and a connector of people and ideas across multiple platforms and geographies, where people from all walks of life pursue the American Dream of financial independence and the opportunity to build a legacy through intergenerational wealth. For more information, please contact co-chairs: Brian Pearson, Abel Beyene or Janine Kempfer. www.theafricanamerican franchisecouncil.com/

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ADVICE

Moving Small Business Forward by Clarence Nunn, Southeast Manager for Middle Banking and Managing Director of Franchise Finance, JP Morgan Chase The franchise and restaurant industry has more than doubled in size over the last several years and it is critically important for franchise owners to have access to industry expertise to help plan for the long term. JPMorgan Chase’s team of franchise and restaurant bankers evaluate the big picture and analyze trends, helping clients plan for growth and diversification across service models, geographic locations and cuisines. Wherever a company is in its life cycle, JPMorgan Chase is there to help. Our bankers provide access to treasury services, credit, merchant services, equipment financing, investment banking and asset management to guide and support franchise owners through every stage of their current needs and future growth.

programs that promote inclusive growth at all levels of business, our firm is creating the positive foundation for local communities and our national economy. Over the next five years, JPMorgan Chase is doubling the size of our commitment to our global Small Business Forward program. That’s $150 million to support women, minority and veteran-owned small business through a series of approaches to help build their long term success, creating local, inclusive economic growth. With small businesses growing fastest among people of color, particularly Latinas and African

SUPPORTING SMALL BUSINESS GROWTH IN OUR COMMUNITIES JPMorgan Chase is betting big on small business – they are a critical component of thriving communities and essential partners for our business. The firm is focused on growing a range of businesses, because local economies benefit when the focus is not only on high growth firms, but also sustainable businesses that support community development, local job creation and build stronger neighborhoods. By developing

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American women, it’s essential to help them get started and growing. Specifically, the opportunity to drive economic growth by investing in black families and businesses is real. Nielsen found black consumers have $1.2 trillion in buying power. According to Global Policy Solutions, if people of color owned businesses at the same rates as white entrepreneurs, it would result in 9 million more jobs and $300 billion in worker income. According to the Association for Enterprise Opportunity, if blackowned businesses could reach employment parity with all firms,


GET TO KNOW:

CLARENCE NUNN Clarence is the Southeast Segment Manager for Middle Market Banking. Middle Market includes companies with revenues generally in excess of $20 million and less than $500 million. The Southeast Segment includes the states of Tennessee, North and South Carolina, Georgia, Alabama and Florida. In addition, Clarence is also Managing Director for Franchise Finance and will be assuming the role of Head of Sales and Business Development.

they would create nearly 600,000 new jobs and put black job-seekers at full employment. In 2015, JPMorgan Chase launched the Entrepreneurs of Color Fund in Detroit, along with W.K. Kellogg Foundation and Detroit Development Fund, to provide minority-owned businesses with access to capital and technical assistance. The fund has since tripled in Detroit to $22 million. In addition, the Entrepreneurs of Color Fund has expanded to San Francisco, the South Bronx, the Greater Washington region and Chicago as part of JPMorgan Chase’s $40 million, three-year commitment to the South and West sides of the city. To date, more than $17 million from JPMorgan Chase has attracted another $22 million in external capital for these local funds and helped create or preserve more than 1,250 jobs at minority-owned small businesses. The firm also recently announced a $2.5 million expansion of the Ascend 2020 program that connects underserved entrepreneurs with capital, supplier diversity opportunities and business education resources. The expansion of Ascend 2020, headquartered at the University of Washington Foster School of Business, will take the program from six U.S. cities to 10 – and also formalize business education, consulting services, and partnerships with anchor institutions that are committed to increasing spending with minority-owned firms over the next three years. Generating economic opportunity is what JPMorgan Chase does each and every day. Our support of small businesses is one more way that we add value for our communities. By helping regional economies build on their core assets to develop thriving enterprises, we are helping to create jobs and build a more prosperous society.

Clarence is a former General Electric Company Officer with a 24-year record of progressive leadership in a diverse range of the company's Commercial and Consumer facing Industrial and Financial Services business segments. In his most recent role, Clarence was the President & CEO of GE Capital - Franchise Finance and he also previously led the GE Capital - Fleet Services and GE Capital - Railcar leasing business units. Since joining GE, he has held functional leadership roles in P&L General Management, Sales, Marketing, Product Development and Quality in several domestic and global GE business units – including GE Plastics, GE Capital - Americas, GE Capital - Canada Equipment Financing, GE Capital - Vendor Financial Services and GE Capital Commercial Distribution Clarence has been active in outside affiliations including Board roles with the Business School Strategic Board of Governors, University of St. Thomas; National Black MBA Association, Inc.; GELCO Corporation, and is a member of the American Automotive Leasing Association (AALA). Clarence graduated from San Diego State University with a Bachelor ofScience in Marketing, and received his MBA from Rensselaer Polytechnic Institute (RPI).

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Meet NuVinAir

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Allegra Centers provide graphic design, printing, mailing, promotional products and marketing services needed by virtually every local business and institution. As an owner, you’ll benefit from the unsurpassed network support provided by Alliance Franchise Brands – a world leader in marketing and visual communications. Among the other advantages of acquiring an Allegra Center:

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Explore your Allegra Center ownership opportunity. Contact us today. 866.433.4131 | allegrafranchise.com © 2019 Alliance Franchise Brands LLC. All Rights Reserved. Alliance Franchise Brands LLC is the parent company of Allegra Network LLC and KK Printing Canada ULC. This advertisement is not an offering. An offering can only be made by a disclosure document filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. MN F-4115


ADVICE

Taking Your Brand to the Next Level by Jeff Dudan, CEO, FranDevCo

Jeff Dudan

D

ecades of franchise experience led Jeff Dudan and Steve Greenbaum to launch FranDevCo with a focus on coaching franchisors to succeed. With the real world experience that comes from building multiple successful franchise brands, these well known franchise veterans are now ready to help growing franchisors take their brand to the next level. In addition to being founders of franchise companies, both Dudan and Greenbaum have been featured on the CBS television series “Undercover Boss.” One of the key drivers of growth is adding units to a platform that has a well established culture and values and clear operational systems in place. With Dudan and Greenbaum’s experience, they bring layers of support to franchisors who are looking to grow their system. From lead generation, to outsourced sales, to a comprehensive operations playbook FranDevCo’s services are a complete solution to enable growth. According to Dudan, “FranDevCo is so much more than the typical outsourced franchise sales

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Steve Greenbaum organization. We’re here to help companies create and effectively manage growth through proper planning and execution.” Jeff’s journey as an entrepreneur began as a college athlete who founded a business to paint student housing. After graduation, we assisted South Florida in recovering from Hurricane Andrew which led to the launch of a company which would become AdvantaClean, eventually franchised to the public in 2009 and grown to hundreds of operating territories in 37 states. As a leading national restoration franchise AdvantaClean became a strategic partner with St. Jude’s Children’s Hospital to support families in need when they need it the most. In January of 2019, AdvantaClean was acquired by Home Franchise Concepts (HFC) to create a combined network with over 1,700 franchise territories operating in 11,000 cities in the U.S., Canada and Mexico. Jeff is a published author, Forbes contributor, speaker, and consultant to emerging brands as well as a serving YPO as Chapter Chair of the Southeast Regional US Chapter, Novant Health as Advisory


Board member, and the IFA Franchisor Forum as a member. Steve Greenbaum is well known in franchise circles for the success he has had in growing brands as well as being a mentor to scores of franchise founders and executives. In 1992 he co-founded PostNet, where, as CEO, he led the brand's growth into a 660unit global printing, marketing and shipping services business with locations in ten countries. In October of 2017, PostNet was acquired by MBE Worldwide and Steve has continued to speak, mentor, coach and work with emerging and mature brands

helping them increase revenue and improve performance and profitability. Steve has also dedicated years of service to the International Franchise Association (IFA) and franchising in general. In addition to serving in many capacities, he received the Entrepreneur of the Year Award from IFA in 2003. In 2005 he chaired IFA’s Educational Foundation and in 2008 he served as chairman of IFA and led the Strategic Planning Committee for the World Franchise Council in Paris. He continues to serve as an ex officio member of the board of directors today.

His advice to franchisors looking to grow is simple “Do the right thing, treat others as you would expect to be treated and make each and every day count for the people you serve.” If you are a franchise brand looking to take your growth to the next level reach out to FranDevCo to schedule a consultation. ashly@frandev.co

ABOUT THE AUTHOR Jeff Dudan is the Franchise Executive for Dudan Partners, and the Founder and former CEO of AdvantaClean. Originally started as a painting business, AdvantaClean became a cleanup company in the wake of a devastating hurricane in South Florida.

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WANT TO LEARN MORE?

Reach out to Ashly Loza ashly@frandev.co www.frandev.co


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Franchise Journal February 2020