Our Proven Franchising Method
Franchise Your Business Seminars
Want to know how franchising works? Want to know how it stacks up to other forms of expansion and what controls are in place to protect you? Attend a Franchise Your Business Seminar, held in cities across the country. Conducted by a Francorp Senior Consultant, this seminar is designed to answer your questions and provide you with a better understanding of costs, time frames and working capital typically needed to grow through franchising.
The Francorp Tour
As business owners and executives examining franchising as an expansion strategy, you are encouraged to visit Francorp's headquarters in Olympia Fields, Illinois, a Chicago suburb. Here, you are invited to tour through all of our departments, meet our staff and senior officers, and review the documents needed in effective franchise growth. Your time spent with us will allow you to gain a detailed understanding of Francorp's unique process and how this process fits your needs for expansion.
Consultation
Is franchising right for your business? How long will it take to transition your business into a franchise? What kind of costs should you expect? These are just a few of the questions that are answered when you meet with a Senior Consultant. The Francorp consultation is typically a face-to-face meeting that allows you the opportunity to obtain an impartial evaluation of your business and its readiness for franchising from a professional with strong business experience and exceptional expertise in franchising.
Franchise Development
Franchise Development is our area of expertise. Whether you are developing a brand new franchise, reworking an existing one, or converting company-owned operations, Francorp has extensive experience across a wide variety of industries. Franchise Development includes designing a strategy for expansion, legal documents, operations manuals and marketing materials. These documents are created by a team assigned to your program that works closely with your company and staff to create materials that meet your expectations and deliver franchise sales.
Franchise Sales Training
While Francorp doesn't function as a broker for our clients, as part of our Franchise services, Francorp provides franchise sales training to new and existing franchisors. Attendees are taught by industry experts with numerous years of franchise sales experience, receive a "how to" manual and personalized instruction on how to sell effectively. On an ongoing basis, Francorp provides implementation consulting to ensure that the lessons learned in the classroom work effectively in achieving sales.
Franchise Management Training
Francorp conducts a two-day Franchise Management Training course designed to educate the Client's management team on the complexities of operating and managing a growing franchise organization. Detailed and comprehensive manuals are provided to all attendees on all course segments:
Building the Franchise Organization
Training Your Franchisees
Providing Effective Field Support
Marketing as a Franchisor
Franchisor Compliance
Franchisee Relations
Franchisor Services
While franchisors have specific needs that differ from one company to another, there are some basic needs that remain the same for all franchise organizations. Franchisors need both speed and accuracy in keeping their documents in step with the current marketplace. Experience and flexibility are critical. Francorp is structured perfectly to meet these needs. From a singular document revision to a whole system audit, Francorp adapts to meet the needs of each of our clients. We have the resources and experience to assess a problem, offer solutions and implement them in a timely manner.
Showing posts with label francorp connect. Show all posts
Showing posts with label francorp connect. Show all posts
Tuesday, February 24, 2009
Thursday, October 23, 2008
Franchise Financing: Keys to Success in the Current Economic Climate
http://www.franchisewire.com/article.php?id=3223
October 23, 2008 - New England Franchise Association (NEFA) will present " Franchise Financing: Keys to Success in the Current Economic Climate" on Tuesday, November 18, 5:30 p.m. at the Marriot Hotel, 1000 Marriott Drive, Quincy.
The panel discussion will outline how successful franchise development requires franchisors to stay up to date on all financing options available. Expert panelists include Anne Rice Hunt, Finance Chief, U.S Small Business Administration; Barbara Arena, CIT Small Business Lending, Senior Regional Account Manager; Bill Rowland, Equity America Mortgage Services; Itamar Chalif, Atlantic Capital Solutions; and Tom McDonald, IRA Rollover Solutions. The discussion will be moderated by Constantine (Dean) Fournaris, Partner, Wiggin and Dana.
In today’s economy one of the biggest concerns of a franchise system is how and where to get capital for franchisees to start their business or ways for franchisees to keep it running or to finance their growth. This panel discussion is valuable for each member of your franchise development team as well as for existing franchisees, or prospective franchisees interested in expansion. You will learn how banks and other lending organizations evaluate franchisee loan applications, and the types of funding that is available, even in these unsettled financial times.
The evening includes a cocktail and networking session beginning at 5:30 PM, dinner at 7:00 PM, and then the presentation. The entire business community is urged to attend. Membership in the NEFA is NOT required. Reservations are required. Registration Fee is $60 per person and includes dinner. All NEFA Members get $10.00 off.
For information regarding NEFA membership visit www.nefranchise.org.
About NEFA:
New England Franchise Association (NEFA) is the trade organization for franchisors and franchisees in the region, with over 150 members. The mission of NEFA is to bring franchise executives, franchisees and vendors together to share ideas for success.
Franchising more than ever before, has an unprecedented opportunity to make a major positive impact on the future New England economy. In a 2001-05 study conducted by PriceWaterhouseCoppers on behalf of the International Franchise Association (IFA) found that in New England over 875,000 jobs area result of franchising, the total output is over 100 Billion dollars a year, and there are over 35,000 franchise establishments in the six New England States.
To reserve your seats, please contact New England Franchise Association via the organization's website www.NEFranchise.org, email: info@NEFranchise.org, or by calling NEFA Executive Director Jim Coen, (617) 469-3002.
October 23, 2008 - New England Franchise Association (NEFA) will present " Franchise Financing: Keys to Success in the Current Economic Climate" on Tuesday, November 18, 5:30 p.m. at the Marriot Hotel, 1000 Marriott Drive, Quincy.
The panel discussion will outline how successful franchise development requires franchisors to stay up to date on all financing options available. Expert panelists include Anne Rice Hunt, Finance Chief, U.S Small Business Administration; Barbara Arena, CIT Small Business Lending, Senior Regional Account Manager; Bill Rowland, Equity America Mortgage Services; Itamar Chalif, Atlantic Capital Solutions; and Tom McDonald, IRA Rollover Solutions. The discussion will be moderated by Constantine (Dean) Fournaris, Partner, Wiggin and Dana.
In today’s economy one of the biggest concerns of a franchise system is how and where to get capital for franchisees to start their business or ways for franchisees to keep it running or to finance their growth. This panel discussion is valuable for each member of your franchise development team as well as for existing franchisees, or prospective franchisees interested in expansion. You will learn how banks and other lending organizations evaluate franchisee loan applications, and the types of funding that is available, even in these unsettled financial times.
The evening includes a cocktail and networking session beginning at 5:30 PM, dinner at 7:00 PM, and then the presentation. The entire business community is urged to attend. Membership in the NEFA is NOT required. Reservations are required. Registration Fee is $60 per person and includes dinner. All NEFA Members get $10.00 off.
For information regarding NEFA membership visit www.nefranchise.org.
About NEFA:
New England Franchise Association (NEFA) is the trade organization for franchisors and franchisees in the region, with over 150 members. The mission of NEFA is to bring franchise executives, franchisees and vendors together to share ideas for success.
Franchising more than ever before, has an unprecedented opportunity to make a major positive impact on the future New England economy. In a 2001-05 study conducted by PriceWaterhouseCoppers on behalf of the International Franchise Association (IFA) found that in New England over 875,000 jobs area result of franchising, the total output is over 100 Billion dollars a year, and there are over 35,000 franchise establishments in the six New England States.
To reserve your seats, please contact New England Franchise Association via the organization's website www.NEFranchise.org, email: info@NEFranchise.org, or by calling NEFA Executive Director Jim Coen, (617) 469-3002.
Tuesday, October 21, 2008
A Buffet of Franchise Growth: Stevi B’s Serves Up Huge Helpings of U.S. Territories
http://atlanta.dbusinessnews.com/shownews.php?newsid=169176&type_news=latest
Atlanta - Marietta, Georgia (October 21, 2008) – A proven restaurant executive who helped drive strategic growth for worldwide icons McDonalds and Arby’s, has taken the reigns at Stevi B’s to put the emerging family pizza buffet concept on the national map. Jordan Krolick, president and CEO of Stevi B’s, America’s leading value oriented family pizza buffet franchise concept, has designed a growth strategy that aims to more then triple the chain’s size over the next five years, moving outward from its core of restaurants in Atlanta. With a strong mix of both franchise and corporate owned restaurant locations, the strategic expansion calls for the system to exceed 100 units by 2013. “Now more than ever, families are looking for ways to get out and have a good time without breaking the bank at mealtimes,” said Krolick, who, before getting into the restaurant industry, spent 10 years as an attorney, CPA and eventually partner in a Chicago-based investment banking firm. “Stevi B’s is growing with carefully selected franchisees at a pace that allows us to best serve our franchisees and maintain the distinct restaurant environment that defines our franchise concept.” The planned growth of Stevi B’s builds upon the chain’s momentum established in 2008. Since the beginning of the year, Stevi B’s has signed development agreements to add 18 new locations to the franchise system. Included in the agreements is a pair of multiunit deals with experienced restaurant operators which will add a total of 13 new restaurants along Florida’s eastern and southern coasts during the next three years. Already in 2008, new Stevi B’s franchise locations have opened in Gadsden, Alabama, Cleveland, Tennessee and Chesterfield Township, Michigan. Before the end of the year franchised units are slated to open in Cartersville, Georgia and Southaven, Michigan, and in early-2009 in Winder, Georgia, Gainesville, Georgia and West Palm Beach, Florida. A new corporate-owned restaurant in Columbia, South Carolina is also slated to open before the end of this year. “We are attracting experienced restaurant operators with proven success in franchising,” said Krolick. “Stevi B’s has built a great reputation with consumers and as word spreads we are experiencing tremendous growth.” With original menu items such as Loaded Baked Potato pizza and a warm décor featuring stonework and granite countertops in an open kitchen environment, Stevi B’s breaks through the blasé of buffets with an exciting fast casual concept. Creative pizzas include the Cheeseburger Deluxe, Chicken Fajita, Macaroni and Cheese and more, and are complemented with a fresh and full salad bar and enticing dessert selections. Buffet prices for adults typically vary from $5 to $5.79 and from $2.99 to $3.29 for children. “Stevi B’s lets mom be the mealtime hero. When the decision is made to go to Stevi B’s, the whole family is high-fiving mom,” added Krolick. “Our value-driven offerings provided in a welcoming environment for adults and children keep customers coming back, often for multiple meals a week.” Stevi B’s prototype store design reflects the chain’s commitment to fast casual dining, blending quick service with a casual dining atmosphere complete with multiple flat screen televisions. For adults, each Stevi B’s offers a laid back environment ideal for lunch and dinnertime discussions, and for children, the experience includes a retreat from the norm with a fun game zone. Each store’s unwavering commitment to the community it serves further defines the Stevi B’s brand. On a nightly basis, all Stevi B’s locations offer to donate a percentage of sales to local school groups, community and religious organizations, local athletic teams and others. Plus, Stevi B’s provides Peel-A-Deal cards to youth groups at steep discounts which are resold as a fundraiser. About Stevi B’sStevi B’s, a national pizza buffet restaurant franchise, was founded in 1996 in Atlanta. Recently purchased by Argonne Capital, an Atlanta private equity firm focused on growing restaurant and retail companies that are market leaders with strong growth potential, Stevi B’s currently has 25 franchised and five company-owned locations in six states throughout the United States. With distinctive pizzas such as Loaded Baked Potato, Chicken Fajita, Cheeseburger Deluxe and Spinach Alfredo served fresh and at a great value in an atmosphere that is fun for adults and children, Stevi B’s is primed for growth throughout the United States. For more information, please visit www.SteviBs.com or contact Stevi B’s by e-mail at info@SteviBs.com.
Atlanta - Marietta, Georgia (October 21, 2008) – A proven restaurant executive who helped drive strategic growth for worldwide icons McDonalds and Arby’s, has taken the reigns at Stevi B’s to put the emerging family pizza buffet concept on the national map. Jordan Krolick, president and CEO of Stevi B’s, America’s leading value oriented family pizza buffet franchise concept, has designed a growth strategy that aims to more then triple the chain’s size over the next five years, moving outward from its core of restaurants in Atlanta. With a strong mix of both franchise and corporate owned restaurant locations, the strategic expansion calls for the system to exceed 100 units by 2013. “Now more than ever, families are looking for ways to get out and have a good time without breaking the bank at mealtimes,” said Krolick, who, before getting into the restaurant industry, spent 10 years as an attorney, CPA and eventually partner in a Chicago-based investment banking firm. “Stevi B’s is growing with carefully selected franchisees at a pace that allows us to best serve our franchisees and maintain the distinct restaurant environment that defines our franchise concept.” The planned growth of Stevi B’s builds upon the chain’s momentum established in 2008. Since the beginning of the year, Stevi B’s has signed development agreements to add 18 new locations to the franchise system. Included in the agreements is a pair of multiunit deals with experienced restaurant operators which will add a total of 13 new restaurants along Florida’s eastern and southern coasts during the next three years. Already in 2008, new Stevi B’s franchise locations have opened in Gadsden, Alabama, Cleveland, Tennessee and Chesterfield Township, Michigan. Before the end of the year franchised units are slated to open in Cartersville, Georgia and Southaven, Michigan, and in early-2009 in Winder, Georgia, Gainesville, Georgia and West Palm Beach, Florida. A new corporate-owned restaurant in Columbia, South Carolina is also slated to open before the end of this year. “We are attracting experienced restaurant operators with proven success in franchising,” said Krolick. “Stevi B’s has built a great reputation with consumers and as word spreads we are experiencing tremendous growth.” With original menu items such as Loaded Baked Potato pizza and a warm décor featuring stonework and granite countertops in an open kitchen environment, Stevi B’s breaks through the blasé of buffets with an exciting fast casual concept. Creative pizzas include the Cheeseburger Deluxe, Chicken Fajita, Macaroni and Cheese and more, and are complemented with a fresh and full salad bar and enticing dessert selections. Buffet prices for adults typically vary from $5 to $5.79 and from $2.99 to $3.29 for children. “Stevi B’s lets mom be the mealtime hero. When the decision is made to go to Stevi B’s, the whole family is high-fiving mom,” added Krolick. “Our value-driven offerings provided in a welcoming environment for adults and children keep customers coming back, often for multiple meals a week.” Stevi B’s prototype store design reflects the chain’s commitment to fast casual dining, blending quick service with a casual dining atmosphere complete with multiple flat screen televisions. For adults, each Stevi B’s offers a laid back environment ideal for lunch and dinnertime discussions, and for children, the experience includes a retreat from the norm with a fun game zone. Each store’s unwavering commitment to the community it serves further defines the Stevi B’s brand. On a nightly basis, all Stevi B’s locations offer to donate a percentage of sales to local school groups, community and religious organizations, local athletic teams and others. Plus, Stevi B’s provides Peel-A-Deal cards to youth groups at steep discounts which are resold as a fundraiser. About Stevi B’sStevi B’s, a national pizza buffet restaurant franchise, was founded in 1996 in Atlanta. Recently purchased by Argonne Capital, an Atlanta private equity firm focused on growing restaurant and retail companies that are market leaders with strong growth potential, Stevi B’s currently has 25 franchised and five company-owned locations in six states throughout the United States. With distinctive pizzas such as Loaded Baked Potato, Chicken Fajita, Cheeseburger Deluxe and Spinach Alfredo served fresh and at a great value in an atmosphere that is fun for adults and children, Stevi B’s is primed for growth throughout the United States. For more information, please visit www.SteviBs.com or contact Stevi B’s by e-mail at info@SteviBs.com.
Monday, October 13, 2008
Immigrants as Franchisees
A key target for a franchise owner is an immigrant. As this article from the Wall Street Journal points out, immigrants tend to be ideally suited for to be a franchise owner. For more information on how to franchise a business or franchise development, go to www.francorp.com.
OCTOBER 13, 2008
FranchisingChain ReactionFor many immigrants, owning a franchise is the path to the American dream
By RICHARD GIBSONhttp://online.wsj.com/article/SB122347728915015415.html?mod=djkeywordLike many immigrants, Lyudmila Khononov turned to a franchise to fulfill her American dream.When she was 10 years old, Mrs. Khononov's family left Odessa, Ukraine, for the U.S. in search of a better life. "There was a lot of discrimination against Jews," she recalls of their exodus 30 years ago.As they began anew in this country, "we had nothing except a dream," Mrs. Khononov says. "But our parents told us we could be anything we wanted to be."After marrying, Mrs. Khononov and her husband, Gregory, ran a diner in Queens, N.Y., for six years. But when it came time to think about expansion in 2001, they borrowed money from a bank and friends and turned to a franchise instead.Mrs. Khononov says she spotted "tremendous growth potential" for the Subway fast-food concept in neighboring Brooklyn, where there were only a handful of the outlets, primarily in gas stations.She says they considered it a fairly easy concept to operate since "you don't have to prepare all the food from scratch" and the franchiser's big marketing campaign would give their business instant recognition. Her husband, also an immigrant, adds that it would have been much harder for them to expand the diner on their own.The decision has paid off. The Khononovs now operate four Subway stores in Brooklyn. And this past summer, Subway, a unit of Doctor's Associates Inc., named Mrs. Khononov its top multistore franchisee in North America, among 12,200 competitors.Built-In HelpMany immigrants look to establish themselves by running their own business. And the chance to start afresh after enduring hardships and adversity in another country often stokes their resolve to succeed. But starting -- and successfully running -- a small business is hard enough without the language and cultural barriers that immigrants can encounter.So, many immigrants turn to a franchise concept. With its proven track record, name recognition and built-in marketing, a franchise can take out a lot of the uncertainty of running a business. And immigrant entrepreneurs often are able to tap their own immigrant community for customers, as well as use the franchise name to broaden that base.A 2006 study by the Ewing Marion Kauffman Foundation of Kansas City, which advocates entrepreneurship, found that immigrants are 30% more likely to become entrepreneurs than are native-born Americans.One reason so many immigrants gravitate toward running their own business may well be because of their experiences with risk, often starting from scratch, says Vivek Wadhwa, an executive in residence at Duke University in Durham, N.C., who has written several papers on immigrants for the foundation and who, after emigrating from India, founded two software companies in the U.S."They've learned what it's like to lose everything," Mr. Wadhwa says. "Once you've done that, you're less afraid of doing it again."Hospitality BusinessThe number of foreign-born franchisees operating in the U.S. businesses isn't known. The International Franchise Association, the sector's leading organization, and major franchisers say they don't keep count.What is known is that some franchised concepts are particularly attractive to immigrants. For example, nearly half of the hotel and motel units in the country -- most of which are franchised -- are run by first- or second-generation East Indians and Pakistanis, according to Fred Schwartz, president of the Asian-American Hotel Owners Association.Anil Chagan is one of them. Raised in South Africa by Indian parents, he immigrated to the U.S. in 1978 at age 24, in part because of the apartheid then embroiling South Africa, where he ran a men's clothing store.Mr. Chagan initially worked at a brother-in-law's motel in East Oakland, Calif. But after two years, he sought to acquire his own. "I couldn't see myself working for somebody else," he says.He purchased a motel in Visalia, Calif., that wasn't affiliated with any of the big national brands. After five years, he converted it to an EconoLodge, a unit of Choice Hotels International Inc., at the chain's invitation. Today, Mr. Chagan's company, Infinite Hospitality, operates two hotel-motels in central California and is building three more. All are franchised, but with various franchisers.Being a franchisee "has been a very significant part of my success," Mr. Chagan says, adding that the affiliation with a national brand helps in obtaining loans and various construction permits.Getting the Message OutOne of the biggest challenges immigrant business owners face -- especially those unfamiliar with local customs -- is understanding what the market wants and then effectively getting their message out."With a franchise," though, says Duke University's Mr. Wadhwa, "that's already done for you."It was RE/MAX International Inc.'s built-in Internet marketing that convinced Shawn Nam, a South Korea native, to sign on with the big real-estate franchiser. When looking up properties on a specific area on the franchiser's Web site, the local franchisee's address pops up. Mr. Nam figured that constructing his own site -- and the marketing to go with it -- would cost him thousands of dollars.Now 39 years old, Mr. Nam immigrated to the U.S. with his parents when he was in high school. "We were looking for a better life," which, he says, included freedom of speech. He worked for his father's janitorial company before enrolling in Rutgers University in New Jersey, dropping out after three years to help support his family. He then set out for a career in real estate.Helping HandThe Situation: Many immigrants look to franchises when opening a business.The Appeal: With its proven track record, name recognition and built-in marketing, a franchise can take out a lot of the uncertainty of running a business.No Guarantees: Cultural and language barriers can still be a challenge.He got a job as an agent at the Prudential Fox & Roach real-estate agency in Voorhees, N.J., and quickly became one the office's leading producers, focusing on the area's large South Korean community, says Paula Goldberg, the agency's vice president. After three years with the Prudential affiliate, Mr. Nam left to start his own agency under the RE/MAX banner, with the Korean community his primary customer target.Mr. Nam had a rough start, though. He believes that several of his agents quit because "they didn't want to work for a Korean. They didn't tell me," he says. "But I can feel it." Today, he counts Koreans, Chinese, Filipinos and East Indians among his agency's employees. Its president is a Palestinian.Making the CutShahin Urias was spurred by the opportunity to do something few women in her native Iran enjoy -- own her own business.Mrs. Urias, who survived bombings and, for a time, lived with her young children in a mud basement-shelter in Tehran during the Iraqi-Iran war in the 1980s, came to the U.S. as a refugee 16 years ago.Her early years here were hardscrabble. She worked in a Luby's cafeteria in Austin, Texas, where, after six months, a cafeteria manager encouraged her to pursue her desire to own a hair salon. At first, Mrs. Urias's poor English kept her out of beauty school, but with her children's help her linguistic skills improved. After 11 months of study, she earned a degree in cosmetology.She started working at a Sports Clips Inc. hair-care franchise in Austin as a part-time stylist. After moving her way up to manager, Mrs. Urias, by then remarried, moved to Tucson, Ariz., and purchased her own Sports Clips franchise -- the first one in that area. While she could have opened an independent shop, Mrs. Urias says she saw advantages in going with a proven concept with a solid market niche and "policies and procedures in place. All the hard work is done."Also, Sports Clips, she says, is a known national brand. So, people who either move to Tucson or are passing through are familiar and comfortable with the brand.Mrs. Urias acknowledges finding bookkeeping and some other aspects of running a business unfamiliar, but says help from Sports Clips is only a phone call away. "Without their support, I would be lost."Although she has had her shop only a few months, Mrs. Urias, 45 years old, has plans to open two more. "I think I'm doing great," she says. "My numbers may not be up there yet, but I'm definitely on the right path."—Mr. Gibson is a writer in Des Moines, Iowa.Write to Richard Gibson at reports@wsj.com
OCTOBER 13, 2008
FranchisingChain ReactionFor many immigrants, owning a franchise is the path to the American dream
By RICHARD GIBSONhttp://online.wsj.com/article/SB122347728915015415.html?mod=djkeywordLike many immigrants, Lyudmila Khononov turned to a franchise to fulfill her American dream.When she was 10 years old, Mrs. Khononov's family left Odessa, Ukraine, for the U.S. in search of a better life. "There was a lot of discrimination against Jews," she recalls of their exodus 30 years ago.As they began anew in this country, "we had nothing except a dream," Mrs. Khononov says. "But our parents told us we could be anything we wanted to be."After marrying, Mrs. Khononov and her husband, Gregory, ran a diner in Queens, N.Y., for six years. But when it came time to think about expansion in 2001, they borrowed money from a bank and friends and turned to a franchise instead.Mrs. Khononov says she spotted "tremendous growth potential" for the Subway fast-food concept in neighboring Brooklyn, where there were only a handful of the outlets, primarily in gas stations.She says they considered it a fairly easy concept to operate since "you don't have to prepare all the food from scratch" and the franchiser's big marketing campaign would give their business instant recognition. Her husband, also an immigrant, adds that it would have been much harder for them to expand the diner on their own.The decision has paid off. The Khononovs now operate four Subway stores in Brooklyn. And this past summer, Subway, a unit of Doctor's Associates Inc., named Mrs. Khononov its top multistore franchisee in North America, among 12,200 competitors.Built-In HelpMany immigrants look to establish themselves by running their own business. And the chance to start afresh after enduring hardships and adversity in another country often stokes their resolve to succeed. But starting -- and successfully running -- a small business is hard enough without the language and cultural barriers that immigrants can encounter.So, many immigrants turn to a franchise concept. With its proven track record, name recognition and built-in marketing, a franchise can take out a lot of the uncertainty of running a business. And immigrant entrepreneurs often are able to tap their own immigrant community for customers, as well as use the franchise name to broaden that base.A 2006 study by the Ewing Marion Kauffman Foundation of Kansas City, which advocates entrepreneurship, found that immigrants are 30% more likely to become entrepreneurs than are native-born Americans.One reason so many immigrants gravitate toward running their own business may well be because of their experiences with risk, often starting from scratch, says Vivek Wadhwa, an executive in residence at Duke University in Durham, N.C., who has written several papers on immigrants for the foundation and who, after emigrating from India, founded two software companies in the U.S."They've learned what it's like to lose everything," Mr. Wadhwa says. "Once you've done that, you're less afraid of doing it again."Hospitality BusinessThe number of foreign-born franchisees operating in the U.S. businesses isn't known. The International Franchise Association, the sector's leading organization, and major franchisers say they don't keep count.What is known is that some franchised concepts are particularly attractive to immigrants. For example, nearly half of the hotel and motel units in the country -- most of which are franchised -- are run by first- or second-generation East Indians and Pakistanis, according to Fred Schwartz, president of the Asian-American Hotel Owners Association.Anil Chagan is one of them. Raised in South Africa by Indian parents, he immigrated to the U.S. in 1978 at age 24, in part because of the apartheid then embroiling South Africa, where he ran a men's clothing store.Mr. Chagan initially worked at a brother-in-law's motel in East Oakland, Calif. But after two years, he sought to acquire his own. "I couldn't see myself working for somebody else," he says.He purchased a motel in Visalia, Calif., that wasn't affiliated with any of the big national brands. After five years, he converted it to an EconoLodge, a unit of Choice Hotels International Inc., at the chain's invitation. Today, Mr. Chagan's company, Infinite Hospitality, operates two hotel-motels in central California and is building three more. All are franchised, but with various franchisers.Being a franchisee "has been a very significant part of my success," Mr. Chagan says, adding that the affiliation with a national brand helps in obtaining loans and various construction permits.Getting the Message OutOne of the biggest challenges immigrant business owners face -- especially those unfamiliar with local customs -- is understanding what the market wants and then effectively getting their message out."With a franchise," though, says Duke University's Mr. Wadhwa, "that's already done for you."It was RE/MAX International Inc.'s built-in Internet marketing that convinced Shawn Nam, a South Korea native, to sign on with the big real-estate franchiser. When looking up properties on a specific area on the franchiser's Web site, the local franchisee's address pops up. Mr. Nam figured that constructing his own site -- and the marketing to go with it -- would cost him thousands of dollars.Now 39 years old, Mr. Nam immigrated to the U.S. with his parents when he was in high school. "We were looking for a better life," which, he says, included freedom of speech. He worked for his father's janitorial company before enrolling in Rutgers University in New Jersey, dropping out after three years to help support his family. He then set out for a career in real estate.Helping HandThe Situation: Many immigrants look to franchises when opening a business.The Appeal: With its proven track record, name recognition and built-in marketing, a franchise can take out a lot of the uncertainty of running a business.No Guarantees: Cultural and language barriers can still be a challenge.He got a job as an agent at the Prudential Fox & Roach real-estate agency in Voorhees, N.J., and quickly became one the office's leading producers, focusing on the area's large South Korean community, says Paula Goldberg, the agency's vice president. After three years with the Prudential affiliate, Mr. Nam left to start his own agency under the RE/MAX banner, with the Korean community his primary customer target.Mr. Nam had a rough start, though. He believes that several of his agents quit because "they didn't want to work for a Korean. They didn't tell me," he says. "But I can feel it." Today, he counts Koreans, Chinese, Filipinos and East Indians among his agency's employees. Its president is a Palestinian.Making the CutShahin Urias was spurred by the opportunity to do something few women in her native Iran enjoy -- own her own business.Mrs. Urias, who survived bombings and, for a time, lived with her young children in a mud basement-shelter in Tehran during the Iraqi-Iran war in the 1980s, came to the U.S. as a refugee 16 years ago.Her early years here were hardscrabble. She worked in a Luby's cafeteria in Austin, Texas, where, after six months, a cafeteria manager encouraged her to pursue her desire to own a hair salon. At first, Mrs. Urias's poor English kept her out of beauty school, but with her children's help her linguistic skills improved. After 11 months of study, she earned a degree in cosmetology.She started working at a Sports Clips Inc. hair-care franchise in Austin as a part-time stylist. After moving her way up to manager, Mrs. Urias, by then remarried, moved to Tucson, Ariz., and purchased her own Sports Clips franchise -- the first one in that area. While she could have opened an independent shop, Mrs. Urias says she saw advantages in going with a proven concept with a solid market niche and "policies and procedures in place. All the hard work is done."Also, Sports Clips, she says, is a known national brand. So, people who either move to Tucson or are passing through are familiar and comfortable with the brand.Mrs. Urias acknowledges finding bookkeeping and some other aspects of running a business unfamiliar, but says help from Sports Clips is only a phone call away. "Without their support, I would be lost."Although she has had her shop only a few months, Mrs. Urias, 45 years old, has plans to open two more. "I think I'm doing great," she says. "My numbers may not be up there yet, but I'm definitely on the right path."—Mr. Gibson is a writer in Des Moines, Iowa.Write to Richard Gibson at reports@wsj.com
Friday, October 3, 2008
What's Up Dog! to Expand Through Franchising
What’s Up Dog to Expand Through Franchising
San Francisco, CA, October 01, 2008
What’s Up Dog has announced they will be launching an aggressive expansion program through franchising.For over five years, What’s Up Dog has offered the hot dog enthusiast a variety of gourmet hot dogs and sausages within the San Francisco area. Their tantalizing menu consists of old carnival favorites like the corn dog, chili cheese nachos and garlic fries. But the eclectic selection of frankfurters and sausages (“Lemon Chicken”, Veggie Tofurky”, “Kielbasa”) has reinvented an American favorite.Americans eat an estimated 20 billion hot dogs a year, with 150 million consumed on Independence Day alone. We love hot dogs so much that the U.S. Chamber of Commerce actually dubbed July as National Hot Dog Month over 50 years ago.It was this shared love for hot dogs that inspired What’s Up Dog owner King Lei to open his own hot dog shop. To ensure that he only offered the best, he visited hundreds of hot dog stores from Los Angeles to New York. And his research resulted in rave reviews. “People love our name and products,” remarks King.This response has led What’s Up Dog to Francorp, the world’s leader in franchise consulting, to assist them in the development of their franchise program.
For more information about What’s Up Dog, call (415) 864-3707or visit www.whatsupdogs.com
###
San Francisco, CA, October 01, 2008
What’s Up Dog has announced they will be launching an aggressive expansion program through franchising.For over five years, What’s Up Dog has offered the hot dog enthusiast a variety of gourmet hot dogs and sausages within the San Francisco area. Their tantalizing menu consists of old carnival favorites like the corn dog, chili cheese nachos and garlic fries. But the eclectic selection of frankfurters and sausages (“Lemon Chicken”, Veggie Tofurky”, “Kielbasa”) has reinvented an American favorite.Americans eat an estimated 20 billion hot dogs a year, with 150 million consumed on Independence Day alone. We love hot dogs so much that the U.S. Chamber of Commerce actually dubbed July as National Hot Dog Month over 50 years ago.It was this shared love for hot dogs that inspired What’s Up Dog owner King Lei to open his own hot dog shop. To ensure that he only offered the best, he visited hundreds of hot dog stores from Los Angeles to New York. And his research resulted in rave reviews. “People love our name and products,” remarks King.This response has led What’s Up Dog to Francorp, the world’s leader in franchise consulting, to assist them in the development of their franchise program.
For more information about What’s Up Dog, call (415) 864-3707or visit www.whatsupdogs.com
###
Sunday, September 28, 2008
Blockbuster to Stick to the Bricks
Blockbuster sticks to the bricks
06:29 PM PT, Sep 23 2008
The instant gratification of video-on-demand and the novelty of movies by snail mail may get many a consumer more excited than an old-fashioned trip to the corner store, but for Blockbuster Inc., the store is still the thing.
The Dallas-based video rental and retail chain, which closed hundreds of stores over the last year, plans to revamp many of its remaining outlets, expand its movie and game offerings, and add more rental and download kiosks.
But it’s still keeping an eye toward increasing Internet-based downloads through Movielink, the digital movie site it acquired last year, and attracting more movie-thru-mail subscribers. Critics say stores are passé, but Blockbuster notes that its mail customers also have the convenience of returning or trading-in their mail-ordered movie at stores — something which Netflix can't do because it doesn't have brick-and-morter outlets (just in case an Ingmar Bergman flick showed up in the mail when you were more in the mood for "Sex and the City").
“Most people read a lot of interesting headlines, and we enjoy the headlines, about Netflix, Amazon, Apple, so forth,” says Tom Casey, Blockbuster’s chief financial officer, during a presentation at Thomas Weisel Partners’ Annual Consumer Conference on Tuesday. “But what you need to understand is we really have a market that we address that’s nearly $36 billion in size. Video-on-demand is actually pretty small.”
That $36-billion figure is the total market for DVD's and game sales — where Blockbuster has been expanding — and movie rentals. Blockbuster has a 40% share of the $9.6 billion movie rental business, of which in-store rentals account for more than half the total revenue, followed by mail subscription and video-on-demand, according to the company.
Blockbuster reported a loss of $44.7 million, or 23 cents a share, in the second quarter, ended June 30, compared to a $34.2 million loss in the same period last year. But same-store revenue rose 9%, and the company reaffirmed that it expects a profit for the year.
“Traffic tends to transfer to a nearby Blockbuster whenever they close a store,” says Arvind Bhatia, an analyst at Sterne Agee & Leach, Inc., adding that he estimates a “normal attrition” of about 150 store closures in the U.s. this year and next. Blockbuster now has about 8,000 stores worldwide.
"Financially, they're doing well," he adds.
Blockbuster plans to increase its stock of rental and retail movies and games at each store as well as pay for store refurbishing, from paint and carpeting to adding Blu-ray kiosks. Some stores have already undergone a broader remodeling, complete with gaming stations and cafes.
“Too many of the stores still look like the old blue-and-yellow 90s VHS stores,” Casey says.
And analysts think Blockbuster still has life left in its stores — particularly on the retail market — before the Internet or video-on-demand becomes the dominant delivery system.
“We all have the idiot friends who have collections of hundreds of DVDs. Nobody is going to collect 100s of DVDs on their hard drives,” said Wedbush analyst Michael Pachter. “And the movie studios don’t make as much" on rentals or on-demand services, where the profit margins are smaller.
Pachter notes that as long as Blockbuster gets customers in stores and studios release movies on DVD before they allow video-on-demand and streaming online, the company will thrive.
“Blockbuster says, why not buy a movie while you’re in here? What else can they sell? Popcorn, video games, maybe a TV or an iPod,” Pachter said. “They’re merchandising better, and that’s absolutely working.”
— Swati Pandey
06:29 PM PT, Sep 23 2008
The instant gratification of video-on-demand and the novelty of movies by snail mail may get many a consumer more excited than an old-fashioned trip to the corner store, but for Blockbuster Inc., the store is still the thing.
The Dallas-based video rental and retail chain, which closed hundreds of stores over the last year, plans to revamp many of its remaining outlets, expand its movie and game offerings, and add more rental and download kiosks.
But it’s still keeping an eye toward increasing Internet-based downloads through Movielink, the digital movie site it acquired last year, and attracting more movie-thru-mail subscribers. Critics say stores are passé, but Blockbuster notes that its mail customers also have the convenience of returning or trading-in their mail-ordered movie at stores — something which Netflix can't do because it doesn't have brick-and-morter outlets (just in case an Ingmar Bergman flick showed up in the mail when you were more in the mood for "Sex and the City").
“Most people read a lot of interesting headlines, and we enjoy the headlines, about Netflix, Amazon, Apple, so forth,” says Tom Casey, Blockbuster’s chief financial officer, during a presentation at Thomas Weisel Partners’ Annual Consumer Conference on Tuesday. “But what you need to understand is we really have a market that we address that’s nearly $36 billion in size. Video-on-demand is actually pretty small.”
That $36-billion figure is the total market for DVD's and game sales — where Blockbuster has been expanding — and movie rentals. Blockbuster has a 40% share of the $9.6 billion movie rental business, of which in-store rentals account for more than half the total revenue, followed by mail subscription and video-on-demand, according to the company.
Blockbuster reported a loss of $44.7 million, or 23 cents a share, in the second quarter, ended June 30, compared to a $34.2 million loss in the same period last year. But same-store revenue rose 9%, and the company reaffirmed that it expects a profit for the year.
“Traffic tends to transfer to a nearby Blockbuster whenever they close a store,” says Arvind Bhatia, an analyst at Sterne Agee & Leach, Inc., adding that he estimates a “normal attrition” of about 150 store closures in the U.s. this year and next. Blockbuster now has about 8,000 stores worldwide.
"Financially, they're doing well," he adds.
Blockbuster plans to increase its stock of rental and retail movies and games at each store as well as pay for store refurbishing, from paint and carpeting to adding Blu-ray kiosks. Some stores have already undergone a broader remodeling, complete with gaming stations and cafes.
“Too many of the stores still look like the old blue-and-yellow 90s VHS stores,” Casey says.
And analysts think Blockbuster still has life left in its stores — particularly on the retail market — before the Internet or video-on-demand becomes the dominant delivery system.
“We all have the idiot friends who have collections of hundreds of DVDs. Nobody is going to collect 100s of DVDs on their hard drives,” said Wedbush analyst Michael Pachter. “And the movie studios don’t make as much" on rentals or on-demand services, where the profit margins are smaller.
Pachter notes that as long as Blockbuster gets customers in stores and studios release movies on DVD before they allow video-on-demand and streaming online, the company will thrive.
“Blockbuster says, why not buy a movie while you’re in here? What else can they sell? Popcorn, video games, maybe a TV or an iPod,” Pachter said. “They’re merchandising better, and that’s absolutely working.”
— Swati Pandey
Friday, August 22, 2008
Francorp Regional Director - Peter Yang
PRESS RELEASE
FOR IMMEDIATE RELEASE FOR INFORMATION CONTACT:
Francorp
(714-293-7124)
Francorp Welcomes New Regional Director
(Diamond Bar, CA) - Francorp is proud to announce that Peter Yang has joined the Regional Directors Program.
Peter has had extensive experience in sales in business development, most notably with First Data, a giant in the credit card processing industry. He has been successful in acquiring sales both with large corporations as well as small businesses through a variety of sales methods including: telemarketing, business to business, cold calling, referrals, and networking. Peter also has a BS in Organizational Leadership from Biola University in La Mirada, CA with a special emphasis on Business Ethics. He currently resides in Diamond Bar, CA.
Francorp is acknowledged as the world's leader in franchising. Since 1976 Francorp has provided full development programs to help insure the franchise success of over 2,000 businesses. To continue helping businesses expand, Francorp has established a Regional Directors Program. This program allows representatives throughout the country to provide the necessary resources to new business interested in franchising. For more information, visit www.francorp.com or call 714-293-7124.
# # #
FOR IMMEDIATE RELEASE FOR INFORMATION CONTACT:
Francorp
(714-293-7124)
Francorp Welcomes New Regional Director
(Diamond Bar, CA) - Francorp is proud to announce that Peter Yang has joined the Regional Directors Program.
Peter has had extensive experience in sales in business development, most notably with First Data, a giant in the credit card processing industry. He has been successful in acquiring sales both with large corporations as well as small businesses through a variety of sales methods including: telemarketing, business to business, cold calling, referrals, and networking. Peter also has a BS in Organizational Leadership from Biola University in La Mirada, CA with a special emphasis on Business Ethics. He currently resides in Diamond Bar, CA.
Francorp is acknowledged as the world's leader in franchising. Since 1976 Francorp has provided full development programs to help insure the franchise success of over 2,000 businesses. To continue helping businesses expand, Francorp has established a Regional Directors Program. This program allows representatives throughout the country to provide the necessary resources to new business interested in franchising. For more information, visit www.francorp.com or call 714-293-7124.
# # #
Francorp Regional Director - Kent Boxberger
PRESS RELEASE
FOR IMMEDIATE RELEASE FOR INFORMATION CONTACT:
Francorp
(678-462-8646)
Francorp Welcomes New Regional Director
(Atlanta, GA) - Francorp is proud to announce that Kent Boxberger has joined the Regional Directors Program.
For over 25 years, Kent has worked with Fortune 500 companies to grow, expand and increase business success. Over the past 12 years, as President of his own small business, MarketCorp International, Inc., in Atlanta, GA, he has worked in various executive management positions as a consultant with expertise in Sales, Marketing, Advertising, Management, Operations and Training, with dozens of companies in many industries.
Prior to joining Francorp, Kent worked for Bell Atlantic Leasing and Finance, as a Regional Manager facilitating the finance and expansion for business equipment manufacturers, distributors and dealers nationwide. He also worked with large Franchise organizations, providing finance and leasing of multiple unit locations, for expansion on a national scale. In addition, holding various positions and as an executive, he has worked with some of the largest insurance companies, in providing personal and business insurance through agents, brokers and direct sales organizations.
Francorp is acknowledged as the world's leader in franchising. Since 1976 Francorp has provided full development programs to help insure the franchise success of over 2,000 businesses. To continue helping businesses expand, Francorp has established a Regional Directors Program. This program allows representatives throughout the country to provide the necessary resources to new business interested in franchising. For more information, visit http://www.francorp.com/ or call 678-462-8646.
# # #
FOR IMMEDIATE RELEASE FOR INFORMATION CONTACT:
Francorp
(678-462-8646)
Francorp Welcomes New Regional Director
(Atlanta, GA) - Francorp is proud to announce that Kent Boxberger has joined the Regional Directors Program.
For over 25 years, Kent has worked with Fortune 500 companies to grow, expand and increase business success. Over the past 12 years, as President of his own small business, MarketCorp International, Inc., in Atlanta, GA, he has worked in various executive management positions as a consultant with expertise in Sales, Marketing, Advertising, Management, Operations and Training, with dozens of companies in many industries.
Prior to joining Francorp, Kent worked for Bell Atlantic Leasing and Finance, as a Regional Manager facilitating the finance and expansion for business equipment manufacturers, distributors and dealers nationwide. He also worked with large Franchise organizations, providing finance and leasing of multiple unit locations, for expansion on a national scale. In addition, holding various positions and as an executive, he has worked with some of the largest insurance companies, in providing personal and business insurance through agents, brokers and direct sales organizations.
Francorp is acknowledged as the world's leader in franchising. Since 1976 Francorp has provided full development programs to help insure the franchise success of over 2,000 businesses. To continue helping businesses expand, Francorp has established a Regional Directors Program. This program allows representatives throughout the country to provide the necessary resources to new business interested in franchising. For more information, visit http://www.francorp.com/ or call 678-462-8646.
# # #
Friday, August 15, 2008
Don Boroian - How to Buy and Manage a Franchise
The American Dream with a Safety Net:
An Introduction to Franchising
Fred DeLuca needed cash. At seventeen, he was ready for college, but unless he raised some
money fast, he knew he couldn’t cover his first-year expenses at Connecticut’s University of
Bridgeport. As it would turn out, DeLuca’s solution for financing his college education would
lead to one of the biggest franchising success stories of the late eighties and early nineties. But
back in 1965, all he wanted was a financial fix.
DeLuca approached a wealthy family friend for the money. He recalls hoping that Peter
Buck, a nuclear physicist, would “reach into his pocket and pull out a big stack of hundred-dollar
bills.” Instead, Buck offered something more valuable – a business proposition. Instead of a gift
or loan, he would give the youngster $1,000 to open a submarine sandwich shop. And so Pete’s
Submarines of Bridgeport was born.
After a slow start (and a name change), the partners added fifteen more sandwich shops
in the following eight years. The chain had potential for further growth, but the traditional
method of building and operating company-owned stores was proving to be slow and costly.
The choice of an alternative wasn’t hard to make. McDonald’s and Kentucky Fried Chicken,
among others, had set an excellent example by franchising, and it was in that direction that
DeLuca turned to expand his business.
More than twenty-five years after it was started as a collegiate money-making venture,
this submarine sandwich idea has truly paid off. DeLuca and Buck’s business has become the
pacesetter among sandwich chains, setting a growth standard believed to be untouched by even
mega outlet food giants such as McDonald’s or Domino’s Pizza. In a single year – 1988 –
Subway, as the franchise is now called, opened more than one thousand outlets, a feat never
previously accomplished by a single chain.
Of course, opening a sandwich shop isn’t a rocket-scientist type of proposition. All one
needs is money (which, as has been demonstrated, can be someone else’s) and desire. Even
making that shop a success isn’t a superhuman task. Combine hard work, a good product, and a
reasonably decent location, and you can be the local roast beef and salami king. But to establish
and successfully duplicate such a store a few thousand times across the country and around the
world takes more than a profitable outlet (or even a few such outlets). It takes one of two things:
(1) Nearly unlimited capital (quite literally in the billions of dollars) to finance such growth; or
(2) the proven, synergistic power of franchising.
Chapter One
Compliments of Francorp Connect, Inc. 7 www.francorpconnect.com
So if you happen to have a couple of billion dollars lying around in a family trust, or a
friendly banker whose loan checks come preprinted with nine zeros, then what follows will
likely not be of much interest to you. But if you have a desire to become part of – or simply
learn more about – franchising, the successful and growing form of business the U.S.
Department of Commerce has called “the wave of the future”, this book is the source you’ve
been looking for.
As franchising has grown in prominence and performance, it has attracted wide coverage in the
media – some positive, some negative; some aimed at potential franchisees, some at franchisors;
some purely analytical, some philosophical and esoteric. But what was missing was a
comprehensive, easy to read (and perhaps fun to read) book that tied it all together – a book that
combined practical and useful information for both franchisees and franchisors with unbiased
reporting and interpretation of the development and influence of franchising. The challenge,
then, is to fill this information gap.
This book sets out to be the only book anyone (be they franchisees, franchisors, or even
just curious consumers) needs to read about franchising. And that’s not just a boast or some
lofty goal – it is our personal mission as authors.
Perhaps it sounds too simple: anyone with any interest in franchising. But it’s true. This book
was written with the widest possible variety of readers in mind. Whether you are interested in
purchasing a franchise (that is, becoming a franchisee), developing an existing business into a
franchise (becoming a franchisor), or simply learning more about the form of business
responsible for more than one-third of all retail sales in the United States, this book will inform,
educate, and perhaps even amaze you.
Do you dream of becoming your own boss but are wary of striking out on your own?
We’ll help you assess whether you’re ready (financially and emotionally) to become a
franchisee. Are you ready to buy a franchise, but not sure which one to choose? We’ll give you
some valuable advice to help narrow which franchises are best suited to you.
Perhaps you own a small (or even not so small) business and are considering expansion.
We’ll help you answer two questions of paramount importance when it comes to considering a
franchise program: (1) Is your business franchisable? and, (2) if so, what is the best way to go
about it? The fact is times have never been better to consider expansion through franchising, for
anyone who owns or operates a successful business. There is definitely an audience of qualified
potential franchisees available. Big corporations, including many Fortune 500 companies, are
stripping away layers of middle managers with layoffs and early retirements. Add to this pool of
Why This Book?
Who Should Read This Book?
Compliments of Francorp Connect, Inc. 8 www.francorpconnect.com
talent the growing number of executives whose jobs have been “leveraged” out of existence (due
to buy outs, mergers, and other corporate reshufflings), and you have an experienced and
professional class of people ready for a new challenge. For many of these people – and others
ready for a change – franchising is the best choice.
Joe’s brother, John Mancuso, is a good example of a new breed of franchisee. He owned
and operated a small machine shop in Hartford, Connecticut, for the past half dozen years. He
also was a customer of the local Physicians Weight Loss Center in Hartford, and trimmed down
from a hefty 270 pounds to close to 210 pounds. He was thrilled with his weight loss -- so much
so that he sold his machine shop and used the proceeds to acquire the franchise location where he
had lost weight. Rather than start a new business in an area that interested him (but in which he
had no practical experience), he bought the franchise and the national reputation and source of
knowledge that went with it – a franchise that he knew was effective, because it helped him lose
weight.
John had never anticipated being involved with franchising, but at the age of forty, he too
came to marvel at the power of the concept. (But, as you’ll learn later in this book, John lost
more than just weight. That was another motivation to write this book.)
Franchising is a broad term that described a relationship between two or more parties. In
general, the purpose of this relationship is to distribute goods and/or services. The two primary
types of franchise systems in the United States are product or tradename franchising and
business-format franchising. Product or tradename franchising is franchising in its most limited
form: A manufacturer grants another party a license to sell goods produced by the manufacturer.
Principal examples of this form of franchising include sales of cars through dealerships, gasoline
through service station, and soft drinks through local bottlers.
For the purposes of this book, we will almost always be discussing the other type –
business-format franchising. We will refer to it by the simpler term franchising. Under
business-format franchising, a business owner or manager (the franchisor) allows someone to
market products or services using her name, trademark, and most importantly, her prescribed
business format – thus the name business-format franchising. (Frequently – in fact, usually – the
products sold are not provided by the franchisor.) In return for use of the name and system, the
franchisee – as that person or organization is called – pays a fee and, usually, an ongoing royalty
(in the form of a percentage of sales). Moreover, the franchisee pays all the costs of going into
business. The effect of business-format franchising is to make it less a system of distribution
than a system of proliferation or expansion.
www.francorpconnect.com
An Introduction to Franchising
Fred DeLuca needed cash. At seventeen, he was ready for college, but unless he raised some
money fast, he knew he couldn’t cover his first-year expenses at Connecticut’s University of
Bridgeport. As it would turn out, DeLuca’s solution for financing his college education would
lead to one of the biggest franchising success stories of the late eighties and early nineties. But
back in 1965, all he wanted was a financial fix.
DeLuca approached a wealthy family friend for the money. He recalls hoping that Peter
Buck, a nuclear physicist, would “reach into his pocket and pull out a big stack of hundred-dollar
bills.” Instead, Buck offered something more valuable – a business proposition. Instead of a gift
or loan, he would give the youngster $1,000 to open a submarine sandwich shop. And so Pete’s
Submarines of Bridgeport was born.
After a slow start (and a name change), the partners added fifteen more sandwich shops
in the following eight years. The chain had potential for further growth, but the traditional
method of building and operating company-owned stores was proving to be slow and costly.
The choice of an alternative wasn’t hard to make. McDonald’s and Kentucky Fried Chicken,
among others, had set an excellent example by franchising, and it was in that direction that
DeLuca turned to expand his business.
More than twenty-five years after it was started as a collegiate money-making venture,
this submarine sandwich idea has truly paid off. DeLuca and Buck’s business has become the
pacesetter among sandwich chains, setting a growth standard believed to be untouched by even
mega outlet food giants such as McDonald’s or Domino’s Pizza. In a single year – 1988 –
Subway, as the franchise is now called, opened more than one thousand outlets, a feat never
previously accomplished by a single chain.
Of course, opening a sandwich shop isn’t a rocket-scientist type of proposition. All one
needs is money (which, as has been demonstrated, can be someone else’s) and desire. Even
making that shop a success isn’t a superhuman task. Combine hard work, a good product, and a
reasonably decent location, and you can be the local roast beef and salami king. But to establish
and successfully duplicate such a store a few thousand times across the country and around the
world takes more than a profitable outlet (or even a few such outlets). It takes one of two things:
(1) Nearly unlimited capital (quite literally in the billions of dollars) to finance such growth; or
(2) the proven, synergistic power of franchising.
Chapter One
Compliments of Francorp Connect, Inc. 7 www.francorpconnect.com
So if you happen to have a couple of billion dollars lying around in a family trust, or a
friendly banker whose loan checks come preprinted with nine zeros, then what follows will
likely not be of much interest to you. But if you have a desire to become part of – or simply
learn more about – franchising, the successful and growing form of business the U.S.
Department of Commerce has called “the wave of the future”, this book is the source you’ve
been looking for.
As franchising has grown in prominence and performance, it has attracted wide coverage in the
media – some positive, some negative; some aimed at potential franchisees, some at franchisors;
some purely analytical, some philosophical and esoteric. But what was missing was a
comprehensive, easy to read (and perhaps fun to read) book that tied it all together – a book that
combined practical and useful information for both franchisees and franchisors with unbiased
reporting and interpretation of the development and influence of franchising. The challenge,
then, is to fill this information gap.
This book sets out to be the only book anyone (be they franchisees, franchisors, or even
just curious consumers) needs to read about franchising. And that’s not just a boast or some
lofty goal – it is our personal mission as authors.
Perhaps it sounds too simple: anyone with any interest in franchising. But it’s true. This book
was written with the widest possible variety of readers in mind. Whether you are interested in
purchasing a franchise (that is, becoming a franchisee), developing an existing business into a
franchise (becoming a franchisor), or simply learning more about the form of business
responsible for more than one-third of all retail sales in the United States, this book will inform,
educate, and perhaps even amaze you.
Do you dream of becoming your own boss but are wary of striking out on your own?
We’ll help you assess whether you’re ready (financially and emotionally) to become a
franchisee. Are you ready to buy a franchise, but not sure which one to choose? We’ll give you
some valuable advice to help narrow which franchises are best suited to you.
Perhaps you own a small (or even not so small) business and are considering expansion.
We’ll help you answer two questions of paramount importance when it comes to considering a
franchise program: (1) Is your business franchisable? and, (2) if so, what is the best way to go
about it? The fact is times have never been better to consider expansion through franchising, for
anyone who owns or operates a successful business. There is definitely an audience of qualified
potential franchisees available. Big corporations, including many Fortune 500 companies, are
stripping away layers of middle managers with layoffs and early retirements. Add to this pool of
Why This Book?
Who Should Read This Book?
Compliments of Francorp Connect, Inc. 8 www.francorpconnect.com
talent the growing number of executives whose jobs have been “leveraged” out of existence (due
to buy outs, mergers, and other corporate reshufflings), and you have an experienced and
professional class of people ready for a new challenge. For many of these people – and others
ready for a change – franchising is the best choice.
Joe’s brother, John Mancuso, is a good example of a new breed of franchisee. He owned
and operated a small machine shop in Hartford, Connecticut, for the past half dozen years. He
also was a customer of the local Physicians Weight Loss Center in Hartford, and trimmed down
from a hefty 270 pounds to close to 210 pounds. He was thrilled with his weight loss -- so much
so that he sold his machine shop and used the proceeds to acquire the franchise location where he
had lost weight. Rather than start a new business in an area that interested him (but in which he
had no practical experience), he bought the franchise and the national reputation and source of
knowledge that went with it – a franchise that he knew was effective, because it helped him lose
weight.
John had never anticipated being involved with franchising, but at the age of forty, he too
came to marvel at the power of the concept. (But, as you’ll learn later in this book, John lost
more than just weight. That was another motivation to write this book.)
Franchising is a broad term that described a relationship between two or more parties. In
general, the purpose of this relationship is to distribute goods and/or services. The two primary
types of franchise systems in the United States are product or tradename franchising and
business-format franchising. Product or tradename franchising is franchising in its most limited
form: A manufacturer grants another party a license to sell goods produced by the manufacturer.
Principal examples of this form of franchising include sales of cars through dealerships, gasoline
through service station, and soft drinks through local bottlers.
For the purposes of this book, we will almost always be discussing the other type –
business-format franchising. We will refer to it by the simpler term franchising. Under
business-format franchising, a business owner or manager (the franchisor) allows someone to
market products or services using her name, trademark, and most importantly, her prescribed
business format – thus the name business-format franchising. (Frequently – in fact, usually – the
products sold are not provided by the franchisor.) In return for use of the name and system, the
franchisee – as that person or organization is called – pays a fee and, usually, an ongoing royalty
(in the form of a percentage of sales). Moreover, the franchisee pays all the costs of going into
business. The effect of business-format franchising is to make it less a system of distribution
than a system of proliferation or expansion.
www.francorpconnect.com
Franchise Demand
Creativity, flexibility carry franchises through tough times
National Restaurant Association SmartBrief 08/15/2008
Despite a sour economy, companies are finding ways to make their franchises grow, taking advantage of lower real estate prices and changing the way they market themselves. Even franchisors in industries that have stayed in demand, such as education and cruises, are coming up with new ideas for growth. Entrepreneur.com (08/13)
National Restaurant Association SmartBrief 08/15/2008
Despite a sour economy, companies are finding ways to make their franchises grow, taking advantage of lower real estate prices and changing the way they market themselves. Even franchisors in industries that have stayed in demand, such as education and cruises, are coming up with new ideas for growth. Entrepreneur.com (08/13)
Americans Squeeze Wallets
Americans squeeze wallets to afford food, energy increases
NFIB SmartBrief 08/15/2008
Americans have lowered their standard of living to pay the inflated costs of food and energy, according to this analysis. July's consumer price index rose faster than anticipated, setting a 17-year record with prices 5.6% higher than the same month last year. Energy prices rose 29.3% and food prices increased 6%. MSNBC (08/14)
www.francorpconnect.com
NFIB SmartBrief 08/15/2008
Americans have lowered their standard of living to pay the inflated costs of food and energy, according to this analysis. July's consumer price index rose faster than anticipated, setting a 17-year record with prices 5.6% higher than the same month last year. Energy prices rose 29.3% and food prices increased 6%. MSNBC (08/14)
www.francorpconnect.com
Monday, August 11, 2008
Marriott Being Social
Being Social
Meet the new facebook of Marriott
By Nancy WeingartnerAs published in: Franchise Times - August 2008
Kathleen Matthews is viewing the news from a different angle. Instead of reporting the news from behind the anchor desk, she's now making the news for Marriott using new media techniques.
Cover photo by Steven E. PurcellWhen Kathleen Matthews created her Facebook page as part of her new-media campaign at Marriott International, two of the first people she invited to be her "friend" turned her down flat. But they were her children, after all - one of whom called her to complain; the other simply ignored her. Matthews' oldest child, Michael, perhaps in a pity move, did accept her offer of cyber friendship, she says, laughing.
Matthews, a former award-winning news anchor in the Washington, D.C., market and wife of "Hardball" host Chris Matthews, is settling comfortably into a life of making news, as opposed to reporting it, for the somewhat staid Marriott brand.
Her charge as executive vice president, global communications & public affairs, is multifold, which is what appealed to her when offered the job 18 months ago. In addition to handling public relations, her role was expanded to encompass politics; social responsibility, such as Marriott's green initiatives; and new media. New media, by the way, is using nontraditional channels to get a company's story out, such as the social networking site, Facebook, plus blogs and online videos viewed on sites such as You Tube.
"She's a dynamo; no one can keep up with her," says Jay Hamilton, Marriott's senior director of public relations. "By the time she walks by your door she's mentioned five things you need to write down (and do)." And she repeats this process all the way down the row of offices, her co-workers say.
Walking and talking, both at a fast clip, to have her photo shot in front of the world flags that signify Marriott's international scope, Matthews does indeed appear to be a dynamo. Still looking the part of a news anchor, Matthews was dressed in her favorite color, red. It's a hue that dominates her office décor from the chairs to the espresso maker. Red also "pops" on television and now she has one more reason to wear red, it's the signature color of her new charge, Marriott.
Matthews exudes confidence - friendly, but not chummy. A runner, she's in constant forward motion. Her desk at the time of this interview was covered in stacks of paperwork, and she joked that her boss wouldn't want her picture taken there. Her department has an abundance of flat-screen TVs turned to the news - especially MSNBC, the station that runs Chris Matthews' show. "If we want to put Marriott in the news, we have to know what the news is," she states.
A familiar spot for someone used to being pitched stories.
"She's always looking for the next big idea, how you can maximize news," says Gordon Lambourne, senior vice president of global PR. "She's intuitive of what the media's interested in."
Perhaps that's why Matthews is a nine-time Emmy winner for her news coverage in the Beltway. Reporting the local news was ideal while her children were younger. "I didn't travel, and I had a predictable schedule," she says. "(Plus) I brought home stories that made me a better mother." While other mothers may have struggled talking to their children about HIV or drunken driving, Matthews says she was able to bring up one of the stories she had just reported on to launch the subject with her teens.
For the most part, her children kept the fact that they had high-profile parents a secret from their friends and teachers. "People were surprised to find out Chris and I are married because most women (in TV) keep their (maiden) names," she says.
Being half of a celebrity couple makes it a little harder to balance work and home. Like most working women, Matthews says she was always "time-starved." "I try to let the worlds bleed into each other," she says. When her children were younger, they would come to the studio with her when need be, and "Chris took them to New Hampshire every four years to cover the presidential primary."
Ironically, the contacts she spent years amassing as a news anchor have helped her more in her position with Marriott than when she was sitting behind the anchor desk. It's also given her a different perspective on the news to offer her husband. "It's exciting to bring a new skill set home," she says.
And Marriott has benefited from having Chris Matthews, who usually commands a hefty speaking fee, talk at Marriott functions, she says.
Moving up Marriott
There's a method to introducing new-media channels to an established brand. For instance, her Facebook page is the equivalent to the old-fashioned suggestion box. Her circle of "friends,"
or contacts, can send her messages, or she can alert a group to new innovations at Marriott in real time. Gen Y associates like her Facebook page, she says, and baby boomers, "who are always trying to be relevant, love it because they always want new ideas."
One of her first coups at the hotel chain was to convince Bill Marriott, the 80-something chairman, to blog. His first reaction after learning the definition of a blog was that it would be impossible for him to do because he doesn't type, nor does he use a computer. Matthews says she convinced him to record his message on a small, digital tape recorder for someone on staff to type. A hard copy is then printed out for his edits.
Bill Marriott is one of the few top executives to have a blog, and most likely the oldest. His subject matter varies from his revelation that he does Pilates regularly, which led to the creation of an exercise studio for employees at Marriott headquarters, to praise for franchisees and their staffs who helped during the Midwest flooding earlier this summer. His blog on lessons learned as a Boy Scout had 5,000 hits, Matthews says.
The purpose of the blog is two-fold. It drives traffic to the site - a link to booking a room at a hotel property, generated $1 million in room revenue, Matthews says - but it also is a way for the personable CEO to visit all 3,000 properties without leaving town.
When he does visit his hotels, Matthews says staff will gather in the lobby and actually applaud. "He's so warmly received everywhere he goes," she adds. Which isn't hard to understand, given that Marriott likes to visit with the housekeeping staff and tour the kitchens, not just meet with management.
"Traveling with Bill is like traveling with the secretary of state - no make that the president and Bono combined," she says, laughing. It's also a full day's worth of work, since Marriott visits between 10 and 15 hotels a day on the road.
Marriott's interviews, as well as any company news, such as the grand opening of its 3,000th hotel, are posted on the Marriott page on You Tube. Footage of the grand opening of that hotel, which just happened to be in China, was fed back to headquarters within hours of the ceremony, where 3,000 trees were planted as part of Marriott's green initiative. Footage of the event was immediately edited and posted on the Web, says Lambourne. "We were able to combine new media and traditional media to get the story out," he says.
In addition to using new media for external communications, Marriott also takes advantage of ways to keep employees and franchisees in the loop. And Matthews has a chart detailing the many ways headquarters reaches out to its constituencies.
Nick Powills of No Limit Media Consulting marvels that more franchisors aren't blogging.While Marriott International may be ahead of the curve by embracing new media in so many facets, it's something all franchisors should be doing, according to PR professional Nick Powills of No Limit Media Consulting who blogs about new media.
Marriott's use of social networking is right on target, Powills says. Every time it posts a blog or adds something to its social Web pages, the company's name moves up on search engines. "You want your franchisees to find as much positive information on your brand as possible," he says. "It drives content and you can control the message." For instance, a negative posting to a blog or Web page can be deleted.
Social networking sites give consumers a way to comment on their stay at the Marriott brands - which include Ritz Carlton, Fairfield Inn, Renaissance and Residence Inn - or give their opinions on the company's green initiatives or a hotel's amenities. And in a world where we can't trust whether the TV character is drinking a Coke because the script calls for it, or because Coke paid for a product endorsement, having "real" people's input on brands is seen as invaluable.
These sites are also a way for the company to offer a special room rate, announce a new opening or alert consumers that Marriott International is getting greener by offering recycled pens.
The company actually does offer recycled pens. "We buy 47 million Bic pens as a company a year," she says. "We worked with (Bic) to develop recyclable pens." The company also has gone to toilet paper with no cardboard rolls.
"Bill (Marriott) is a great evangelist for these initiatives," Matthews states. "Social responsibility is so important for companies." Remaining competitive and able to attract a "world-class workforce," means being green. In addition, she adds, climate changes greatly influence their hotels, so it's in the company's best interest to reduce its carbon footprint and to encourage vendors to do the same.
And with the buying power of 3,000 hotels, the brand has considerable clout.
The purpose of all her creative energy is to guide Marriott so that it stays cutting edge and relative to both its employees and guests.
New media has proven a popular way to connect with customers. For instance, guests of the Courtyard brand were asked what kind of hotel they wanted, and their candid responses were captured on film and uploaded to http://www.gocourtyard.com/. "We continue to get comments" from guests, Matthews says.
On the other hand, Bill Marriott's blog gives a behemoth brand a human face. His musings are supplemented with video clips, like a recent one starring the young pop-and-lock dancer whose silhouette is featured on the Apple iTune commercials.
And while more than 100 million people have blogs - Time magazine named bloggers its person of the year in 2006 - Powills says he's surprised more franchisors aren't doing it. Or that they don't have Facebook pages, since Powill's research reveals the site had 123.9 million unique visitors in May of this year alone and is the Internet's No. 6 most visited site.
Stay tuned, because as soon as this article comes out Matthews probably will have added another dozen sites to Marriott's new media campaign, or found some other innovative way to get the brand into the news.
"She's just what we needed," says her assistant Marilyn Cole. "I don't know how she does everything. But we're having fun."
www.francorpconnect.com
Meet the new facebook of Marriott
By Nancy WeingartnerAs published in: Franchise Times - August 2008
Kathleen Matthews is viewing the news from a different angle. Instead of reporting the news from behind the anchor desk, she's now making the news for Marriott using new media techniques.
Cover photo by Steven E. PurcellWhen Kathleen Matthews created her Facebook page as part of her new-media campaign at Marriott International, two of the first people she invited to be her "friend" turned her down flat. But they were her children, after all - one of whom called her to complain; the other simply ignored her. Matthews' oldest child, Michael, perhaps in a pity move, did accept her offer of cyber friendship, she says, laughing.
Matthews, a former award-winning news anchor in the Washington, D.C., market and wife of "Hardball" host Chris Matthews, is settling comfortably into a life of making news, as opposed to reporting it, for the somewhat staid Marriott brand.
Her charge as executive vice president, global communications & public affairs, is multifold, which is what appealed to her when offered the job 18 months ago. In addition to handling public relations, her role was expanded to encompass politics; social responsibility, such as Marriott's green initiatives; and new media. New media, by the way, is using nontraditional channels to get a company's story out, such as the social networking site, Facebook, plus blogs and online videos viewed on sites such as You Tube.
"She's a dynamo; no one can keep up with her," says Jay Hamilton, Marriott's senior director of public relations. "By the time she walks by your door she's mentioned five things you need to write down (and do)." And she repeats this process all the way down the row of offices, her co-workers say.
Walking and talking, both at a fast clip, to have her photo shot in front of the world flags that signify Marriott's international scope, Matthews does indeed appear to be a dynamo. Still looking the part of a news anchor, Matthews was dressed in her favorite color, red. It's a hue that dominates her office décor from the chairs to the espresso maker. Red also "pops" on television and now she has one more reason to wear red, it's the signature color of her new charge, Marriott.
Matthews exudes confidence - friendly, but not chummy. A runner, she's in constant forward motion. Her desk at the time of this interview was covered in stacks of paperwork, and she joked that her boss wouldn't want her picture taken there. Her department has an abundance of flat-screen TVs turned to the news - especially MSNBC, the station that runs Chris Matthews' show. "If we want to put Marriott in the news, we have to know what the news is," she states.
A familiar spot for someone used to being pitched stories.
"She's always looking for the next big idea, how you can maximize news," says Gordon Lambourne, senior vice president of global PR. "She's intuitive of what the media's interested in."
Perhaps that's why Matthews is a nine-time Emmy winner for her news coverage in the Beltway. Reporting the local news was ideal while her children were younger. "I didn't travel, and I had a predictable schedule," she says. "(Plus) I brought home stories that made me a better mother." While other mothers may have struggled talking to their children about HIV or drunken driving, Matthews says she was able to bring up one of the stories she had just reported on to launch the subject with her teens.
For the most part, her children kept the fact that they had high-profile parents a secret from their friends and teachers. "People were surprised to find out Chris and I are married because most women (in TV) keep their (maiden) names," she says.
Being half of a celebrity couple makes it a little harder to balance work and home. Like most working women, Matthews says she was always "time-starved." "I try to let the worlds bleed into each other," she says. When her children were younger, they would come to the studio with her when need be, and "Chris took them to New Hampshire every four years to cover the presidential primary."
Ironically, the contacts she spent years amassing as a news anchor have helped her more in her position with Marriott than when she was sitting behind the anchor desk. It's also given her a different perspective on the news to offer her husband. "It's exciting to bring a new skill set home," she says.
And Marriott has benefited from having Chris Matthews, who usually commands a hefty speaking fee, talk at Marriott functions, she says.
Moving up Marriott
There's a method to introducing new-media channels to an established brand. For instance, her Facebook page is the equivalent to the old-fashioned suggestion box. Her circle of "friends,"
or contacts, can send her messages, or she can alert a group to new innovations at Marriott in real time. Gen Y associates like her Facebook page, she says, and baby boomers, "who are always trying to be relevant, love it because they always want new ideas."
One of her first coups at the hotel chain was to convince Bill Marriott, the 80-something chairman, to blog. His first reaction after learning the definition of a blog was that it would be impossible for him to do because he doesn't type, nor does he use a computer. Matthews says she convinced him to record his message on a small, digital tape recorder for someone on staff to type. A hard copy is then printed out for his edits.
Bill Marriott is one of the few top executives to have a blog, and most likely the oldest. His subject matter varies from his revelation that he does Pilates regularly, which led to the creation of an exercise studio for employees at Marriott headquarters, to praise for franchisees and their staffs who helped during the Midwest flooding earlier this summer. His blog on lessons learned as a Boy Scout had 5,000 hits, Matthews says.
The purpose of the blog is two-fold. It drives traffic to the site - a link to booking a room at a hotel property, generated $1 million in room revenue, Matthews says - but it also is a way for the personable CEO to visit all 3,000 properties without leaving town.
When he does visit his hotels, Matthews says staff will gather in the lobby and actually applaud. "He's so warmly received everywhere he goes," she adds. Which isn't hard to understand, given that Marriott likes to visit with the housekeeping staff and tour the kitchens, not just meet with management.
"Traveling with Bill is like traveling with the secretary of state - no make that the president and Bono combined," she says, laughing. It's also a full day's worth of work, since Marriott visits between 10 and 15 hotels a day on the road.
Marriott's interviews, as well as any company news, such as the grand opening of its 3,000th hotel, are posted on the Marriott page on You Tube. Footage of the grand opening of that hotel, which just happened to be in China, was fed back to headquarters within hours of the ceremony, where 3,000 trees were planted as part of Marriott's green initiative. Footage of the event was immediately edited and posted on the Web, says Lambourne. "We were able to combine new media and traditional media to get the story out," he says.
In addition to using new media for external communications, Marriott also takes advantage of ways to keep employees and franchisees in the loop. And Matthews has a chart detailing the many ways headquarters reaches out to its constituencies.
Nick Powills of No Limit Media Consulting marvels that more franchisors aren't blogging.While Marriott International may be ahead of the curve by embracing new media in so many facets, it's something all franchisors should be doing, according to PR professional Nick Powills of No Limit Media Consulting who blogs about new media.
Marriott's use of social networking is right on target, Powills says. Every time it posts a blog or adds something to its social Web pages, the company's name moves up on search engines. "You want your franchisees to find as much positive information on your brand as possible," he says. "It drives content and you can control the message." For instance, a negative posting to a blog or Web page can be deleted.
Social networking sites give consumers a way to comment on their stay at the Marriott brands - which include Ritz Carlton, Fairfield Inn, Renaissance and Residence Inn - or give their opinions on the company's green initiatives or a hotel's amenities. And in a world where we can't trust whether the TV character is drinking a Coke because the script calls for it, or because Coke paid for a product endorsement, having "real" people's input on brands is seen as invaluable.
These sites are also a way for the company to offer a special room rate, announce a new opening or alert consumers that Marriott International is getting greener by offering recycled pens.
The company actually does offer recycled pens. "We buy 47 million Bic pens as a company a year," she says. "We worked with (Bic) to develop recyclable pens." The company also has gone to toilet paper with no cardboard rolls.
"Bill (Marriott) is a great evangelist for these initiatives," Matthews states. "Social responsibility is so important for companies." Remaining competitive and able to attract a "world-class workforce," means being green. In addition, she adds, climate changes greatly influence their hotels, so it's in the company's best interest to reduce its carbon footprint and to encourage vendors to do the same.
And with the buying power of 3,000 hotels, the brand has considerable clout.
The purpose of all her creative energy is to guide Marriott so that it stays cutting edge and relative to both its employees and guests.
New media has proven a popular way to connect with customers. For instance, guests of the Courtyard brand were asked what kind of hotel they wanted, and their candid responses were captured on film and uploaded to http://www.gocourtyard.com/. "We continue to get comments" from guests, Matthews says.
On the other hand, Bill Marriott's blog gives a behemoth brand a human face. His musings are supplemented with video clips, like a recent one starring the young pop-and-lock dancer whose silhouette is featured on the Apple iTune commercials.
And while more than 100 million people have blogs - Time magazine named bloggers its person of the year in 2006 - Powills says he's surprised more franchisors aren't doing it. Or that they don't have Facebook pages, since Powill's research reveals the site had 123.9 million unique visitors in May of this year alone and is the Internet's No. 6 most visited site.
Stay tuned, because as soon as this article comes out Matthews probably will have added another dozen sites to Marriott's new media campaign, or found some other innovative way to get the brand into the news.
"She's just what we needed," says her assistant Marilyn Cole. "I don't know how she does everything. But we're having fun."
www.francorpconnect.com
Thursday, August 7, 2008
Pizza Delivery In China
Pizza Delivery Gets Big Push In China
Restaurant giant Yum Brands Inc. is betting that, as China's expanding middle class continues to demand more of the typical Western middle-class lifestyle, consumers will develop a taste for one of America's favorite convenience foods -- pizza, delivered.
Pizza delivery, ubiquitous in the U.S., is a new concept in China, where dining out has long been seen as a form of conspicuous consumption. As a result, until recently Yum had focused on positioning its Pizza Hut locations as a "five-star experience, (with a) three-star price" that would attract Chinese consumers looking for a night on the town. But as China's wealth swells -- along with its legions of harried office workers who have less and less time to cook at home -- pizza delivery is beginning to look like a faster way to expand the Pizza Hut brand, and consumers have begun to respond.
During the past year, Yum has been ramping up delivery operations in the country -- building call centers, securing a nationwide telephone number and building out new locations at an expeditious rate.
"We think we could build thousands of these," said Yum Chief Financial Officer Rick Carucci. The company has 61 delivery-only locations, up 49% from a year ago, and plans to continue at that rate for the next year.
The reason for their appeal to Yum is simple economics: Delivery-only locations, unlike fine-dining establishments, don't have to occupy prime (read expensive) real estate and can still pull in 60% to 70% of the revenue of fine-dining locations, and they are already making money. Yum's China division aw its operating profit jump 38% in the second quarter, and Pizza Hut was the division's fastest-growing brand.
To be sure, Yum faces risks in its expansion. Domino's Pizza, the dominant delivery-only brand in the U.S., has been slow to move into the Chinese market, noting the lack of a convenience culture that would demand food delivery. But that is changing: Domino's has built central delivery commissaries in Shanghai and Beijing -- a sign they will build out in the near future.
"I think for a couple of years they were skeptical that there was going to be a delivery business there," Bank of America analyst Joseph Buckley said. "Now they think there is; it could be because of what Pizza Hut is doing."
Yum, whose China group's slogan is "Rooted in China, Part of China," says it is just following the market.
When lawyer Zhan Zhao moved to Beijing in 2002, after spending his teenage years and getting his education in the U.S., he was shocked to find no food-delivery service was available.
"I was a lawyer working long hours and new to China, so a service of convenience was something that I really needed to help adjust to the other realities of modern-day China," said Mr. Zhao, 32 years old, an associate at Skadden, Arps, Slate, Meagher & Flom LLP. To fill the gap, he started a delivery service, Beijing Goodies, to deliver food, at an additional price, from Beijing restaurants. After a rocky start in May 2002, the business has taken off in recent years. Today, the company has 7,000 registered users in Beijing -- and Mr. Zhao, who now lives in Shanghai, sees food delivery as a growth market.
"Food delivery will only become more and more popular, especially for the local white collars, as the Chinese consuming public continues to work longer and longer hours," Mr. Zhao said.
Yum's recent television advertising campaign in China makes a similar case. One ad, for example, shows a young mother rushing from work to the market, cooking dinner and doing dishes, contrasted with a serene woman stretching and enjoying her afternoon. The serene woman has already ordered pizza, and a moped-mounted delivery man is on the way with it.
Papa John's, which recently opened its 100th restaurant in China, has been noticing a pickup in delivery orders, too, according to David Flanery, the company's chief financial officer and head of its international operations.
"The delivery percentage has probably doubled over the past two to three years," Mr. Flanery said. "You go through those cities and see apartment building after apartment building and you go, 'you know, those people have to eat, and more of them have enough money to go to a restaurant and have something delivered.'"
Mr. Flanery said Papa John's is more than happy to follow Yum's lead in the country, where Yum already has a massive head start. Yum was the first Western fast-food company to gain entrance to China in the 1980s, and its KFC chain is one of the most recognized Western brands in the country, with 2,264 locations as of June 30.
Mr. Carucci said he expects Yum to ramp up the building of Pizza Hut delivery locations during the next year or so, moving into more second-tier cities, with the eventual goal of China being a bigger market than the U.S.
"We're off to the races on delivery," Mr. Carucci said.
Source: Dow Jones Newswire
www.francorpconnect.com
Restaurant giant Yum Brands Inc. is betting that, as China's expanding middle class continues to demand more of the typical Western middle-class lifestyle, consumers will develop a taste for one of America's favorite convenience foods -- pizza, delivered.
Pizza delivery, ubiquitous in the U.S., is a new concept in China, where dining out has long been seen as a form of conspicuous consumption. As a result, until recently Yum had focused on positioning its Pizza Hut locations as a "five-star experience, (with a) three-star price" that would attract Chinese consumers looking for a night on the town. But as China's wealth swells -- along with its legions of harried office workers who have less and less time to cook at home -- pizza delivery is beginning to look like a faster way to expand the Pizza Hut brand, and consumers have begun to respond.
During the past year, Yum has been ramping up delivery operations in the country -- building call centers, securing a nationwide telephone number and building out new locations at an expeditious rate.
"We think we could build thousands of these," said Yum Chief Financial Officer Rick Carucci. The company has 61 delivery-only locations, up 49% from a year ago, and plans to continue at that rate for the next year.
The reason for their appeal to Yum is simple economics: Delivery-only locations, unlike fine-dining establishments, don't have to occupy prime (read expensive) real estate and can still pull in 60% to 70% of the revenue of fine-dining locations, and they are already making money. Yum's China division aw its operating profit jump 38% in the second quarter, and Pizza Hut was the division's fastest-growing brand.
To be sure, Yum faces risks in its expansion. Domino's Pizza, the dominant delivery-only brand in the U.S., has been slow to move into the Chinese market, noting the lack of a convenience culture that would demand food delivery. But that is changing: Domino's has built central delivery commissaries in Shanghai and Beijing -- a sign they will build out in the near future.
"I think for a couple of years they were skeptical that there was going to be a delivery business there," Bank of America analyst Joseph Buckley said. "Now they think there is; it could be because of what Pizza Hut is doing."
Yum, whose China group's slogan is "Rooted in China, Part of China," says it is just following the market.
When lawyer Zhan Zhao moved to Beijing in 2002, after spending his teenage years and getting his education in the U.S., he was shocked to find no food-delivery service was available.
"I was a lawyer working long hours and new to China, so a service of convenience was something that I really needed to help adjust to the other realities of modern-day China," said Mr. Zhao, 32 years old, an associate at Skadden, Arps, Slate, Meagher & Flom LLP. To fill the gap, he started a delivery service, Beijing Goodies, to deliver food, at an additional price, from Beijing restaurants. After a rocky start in May 2002, the business has taken off in recent years. Today, the company has 7,000 registered users in Beijing -- and Mr. Zhao, who now lives in Shanghai, sees food delivery as a growth market.
"Food delivery will only become more and more popular, especially for the local white collars, as the Chinese consuming public continues to work longer and longer hours," Mr. Zhao said.
Yum's recent television advertising campaign in China makes a similar case. One ad, for example, shows a young mother rushing from work to the market, cooking dinner and doing dishes, contrasted with a serene woman stretching and enjoying her afternoon. The serene woman has already ordered pizza, and a moped-mounted delivery man is on the way with it.
Papa John's, which recently opened its 100th restaurant in China, has been noticing a pickup in delivery orders, too, according to David Flanery, the company's chief financial officer and head of its international operations.
"The delivery percentage has probably doubled over the past two to three years," Mr. Flanery said. "You go through those cities and see apartment building after apartment building and you go, 'you know, those people have to eat, and more of them have enough money to go to a restaurant and have something delivered.'"
Mr. Flanery said Papa John's is more than happy to follow Yum's lead in the country, where Yum already has a massive head start. Yum was the first Western fast-food company to gain entrance to China in the 1980s, and its KFC chain is one of the most recognized Western brands in the country, with 2,264 locations as of June 30.
Mr. Carucci said he expects Yum to ramp up the building of Pizza Hut delivery locations during the next year or so, moving into more second-tier cities, with the eventual goal of China being a bigger market than the U.S.
"We're off to the races on delivery," Mr. Carucci said.
Source: Dow Jones Newswire
www.francorpconnect.com
Wednesday, August 6, 2008
Bennigan's franchisees on their own
Bennigan’s is out of business — sort of. The restaurant chain, along with the associated Steak and Ale chain, filed Chapter 7 liquidation yesterday, WSJ reports. But while 200 corporate-owned stores shut down, 138 Bennigan’s franchisees will remain open, the Journal says. So what happens to a franchise when the franchisor goes under?
Some Bennigan's franchisees actually see the liquidation as a good thing, according to a report in the Post-Tribune, of northwest Indiana. Larry Briski, the local owner of several Bennigan's who also runs the franchisee association, tells the paper that a firm in Atlanta will buy Bennigan's name and continue the franchise operation. Briski says he expects better marketing and branding, calling the change "a very good thing for the franchisees."
The owners will need every bit of support they can get. The Journal details why times are rough for casual dining restaurants:
High ingredient and labor costs are eating into profits, and several years of rapid expansion by bar and grill chains has left a glut of locations in the market. Pressures such as high gasoline prices and dwindling home values have prompted consumers to eat out less often or switch to cheaper fast-food meals.
Some Bennigan's franchisees actually see the liquidation as a good thing, according to a report in the Post-Tribune, of northwest Indiana. Larry Briski, the local owner of several Bennigan's who also runs the franchisee association, tells the paper that a firm in Atlanta will buy Bennigan's name and continue the franchise operation. Briski says he expects better marketing and branding, calling the change "a very good thing for the franchisees."
The owners will need every bit of support they can get. The Journal details why times are rough for casual dining restaurants:
High ingredient and labor costs are eating into profits, and several years of rapid expansion by bar and grill chains has left a glut of locations in the market. Pressures such as high gasoline prices and dwindling home values have prompted consumers to eat out less often or switch to cheaper fast-food meals.
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