Monthly Archives: March 2013

What Your Franchisor Expects of You

Franchisor-expectationsYou have expectations of the franchise business opportunities you’re considering, and you’ll use those expectations to choose the best option for your needs. Have you thought about the other side of that coin?

Franchisors also have expectations of their franchisees. Different companies have different expectations, and they use different metrics. Making sure the business you choose is a good fit for you in terms of their definition and measurement of success is a good plan.

Picking a franchisor based on their system of measurement will help you avoid stress and financial distress down the line. If you fail to meet benchmarks consistently, it can spell the end of your franchise. When you choose a franchise, you’re signing up for a proven method of success but also for an analysis of your progress. While you’re still your own boss, you will have to answer to your franchisor’s expectations and meet Key Performance Indicators (KPI) or benchmarks.

Different franchisors measure different things when it comes to the success of their franchisees. The point is always to make sure the franchisee is on track to be successful and isn’t performing poorly.

The only way to find out how a franchisor measures success is to ask the franchisor and existing franchisees, as it’s not generally part of the Franchise Disclosure Document (FDD). What is in the FDD that’s important to think about in terms of benchmarks is contained in Item 17: Renewal, Termination, Repurchase, Modification and/or Transfer of the Franchise Agreement, and Dispute Resolution.

There is a wide range of things that can happen if a franchisor isn’t happy with your progress. The franchisor could modify your territory if you’re underserving customers, buy your franchise from you, or even give your franchise to someone else. The worst case scenario is that they pull the plug on your franchise and you’re stuck empty handed and possibly with quite a bit of debt. The best scenario is that the franchisor works with you to improve your franchise. Ideally, franchisors will want to protect their investment of time into their franchisees and will help you improve and give you to the time to do so.

But don’t think having your success measured by someone else will mean the demise of your franchise. Having someone check in on your trouble areas often can be useful – that accountability can help you to meet your own goals as a businessperson, especially if the franchisor is good at helping you improve and build on their investment. Sharing goals with your franchisor can help make your assessments more useful.

Take BodyBrite as an example. Their mission is to “Let Your Beauty Shine” for both their customers and their franchisees. As a customer, you’d want services to let your physical beauty shine at an attainable price, which is what BodyBrite offers their customers through a single price point laser hair removal service. But for franchisees, BodyBrite wants franchisees to shine beautifully in owning a successful business. If you’re looking to help customers let their beauty shine while owning your own business, BodyBrite is a franchise you should consider because it meets your expectations for yourself. You’ll find that if you’re not meeting your goals of helping customers feel beautiful, BodyBrite’s assessments will help you get closer to that goal.

Choosing a franchise with a mission you can support and metrics you can work within will increase your chances of happiness in your franchise business. As always, knowing what you want out of life and taking a deep assessment of what’s important to you will help you become a successful and happy franchisee.

Unique Niche Early Adopters: Naturals 2 Go

Early adopters of new trends can get in on the ground floor before a trend really takes off and become huge influencers when it does. Naturals 2 Go is doing just that—the healthy food vending franchise is ahead of the rest of the pack, offering healthy snacking options just as American consumers are getting serious about changing their snacking habits.

The connection between food and health may not be a new idea, but it’s definitely going mainstream. Where in the past people who were concerned about eating healthy foods might just have stayed away from vending machines, they’re now expecting to see better choices there . . . as well as in school cafeterias, factory break rooms, and other spots that have generally been havens for doughnuts and chili cheese fries.

There used to be a divide between healthy meals, which Americans typically ate at home, and snacking, which was expected to be unhealthy. Snacking was associated with fun, extra eating. Meals would naturally include a hot vegetable and a salad along with a high-protein entree. Snacks were things like cookies, chips, and candy, and no one expected them to be healthy.

As Americans began to eat fewer of those traditional home cooked meals, the line between meals and snacks began to blur. The Palo Alto Medical Foundation reports that more than a quarter of Americans eat fast food every day. For most of those consumers, a meal is likely to be a burger and fries. Thinking of snacks as a frivolous break from an overall healthy diet is clearly no longer appropriate.

And yet we’re also becoming more health conscious – maybe not so health conscious that we’ll go home and cook broccoli, but enough that we feel bad about living entirely on junk food. The outcome? A preference for healthy snacks.

There are a few other healthy vending machine franchisors out there but Naturals 2 Go has an unrivaled 20 years of experience and the clout to negotiate with big brands, a power new vending franchisors simply don’t have. They’ve been on the leading edge for long enough that, as early adopters, they’ve become a powerhouse in the health snack niche.

On top of extensive experience and a sound reputation, Naturals 2 Go’s vending machines use top of the line technology, indicating their commitment to staying ahead of the pack. All machines are outfitted with card readers for convenience in an era when fewer people carry cash. Their machines are high capacity and made of the highest grade materials, meaning less time spent filling and repairing machines—the two most costly aspects of a vending machine business.

All in all, Naturals 2 Go is a promising opportunity for a franchisee who wants to be an influencer in the healthy snacks revolution. As more and more schools, office buildings, and gyms put more thought into their snacking options, customers are going to demand healthier options in vending machines. Naturals 2 Go is already an influencer in this unique niche and their franchisees can tap into this power.

Franchises Cater to the Impulse Buyer Too!

As you consider the purchase of a franchise, you’ve discovered a franchise universe with hundreds of business models all requiring a different customer service skill set.

Some business models are designed to cater to the customer looking for an appointment followed by a visit to their home and a selling process with a future delivery date. Other business models cater to the impulse buyer. Let’s take a look at a few franchise opportunities that are built to appease the impulse buying customer.

The Great American Cookie Company franchise is generally found in malls, usually tucked into a corner with cabinets displaying their cookies and other baked goods – and the scent wafting out to tempt passersby. They also have a kiosk program with the same approach.

It’s unusual for a Great American Cookies storefront to be a standalone business simply because the business model relies on a lot of impulse purchases. A large portion of the revenue also comes from orders for the iconic giant “cookie cakes” and boxes of goodies for business events, but having a location where franchisees can thrive on impulse buys is important to the success of a Great American Cookies franchise.

Great American Cookie Company puts it like this: “We find that areas such as regional malls, lifestyle centers, entertainment complexes, airports and transit stations make excellent sites.” In other words, places with lots of walk-by traffic, places where people hang out – locations with plenty of opportunities for impulse buys of fragrant cookies.

The franchise’s awareness of the motivations of its customers lets it help franchisees with identifying the perfect location.

Another example is Little Caesars. This innovative franchise makes pizza into an impulse buy.

Pizza can be made to order for people sitting in a restaurant or for people prepared to plan ahead and drive to pick it up. Pizza delivery is ideal for people who know they want pizza, and online ordering now lets people schedule pizza delivery for the end of a long workday. Grabbing a pizza right now because your nostrils have been tickled by a delicious scent isn’t usually an option.

Little Caesars changed all that when they moved away from made to order pizzas and into their “hot-and-ready” style of service. Their bright store facade is designed to grab the attention of customers driving by, and they can serve up hot, immediate pizza by offering just two basic options—cheese and pepperoni. They actually use some special ovens to be so quick, but customers generally don’t care. They’re drawn by the knowledge that they can get pizza whenever the mood strikes them.

Little Caesar’s has put a lot of effort and creativity into making sure that consumers realize that they can buy a pizza without calling or waiting, so your Little Caesar’s franchise can reap the rewards by appealing to the impulse buyer.

A franchise designed to draw the impulse buyer must obviously have a location where it will be seen (and perhaps smelled) by lots of potential shoppers. It has to have a system for welcoming customers, getting the goods into their hands, and completing the transaction quickly, with no complications along the way. Its products must have a price point that encourages quick decision making. All these elements have to come together to make the franchise work for impulse shoppers.

If this sounds like it’s a good fit for you, seek out the franchise opportunities that appeal to the impulse shopper in you – chances are they’ll do the same for your customers.

What’s It Like to be the First Franchisee In a Region?

The experience of one coffee franchise owner provides a lot of insight into the decision-making process for people who are planning to buy a franchise.

This businessman was the first franchisee in his state for a well-known chain of coffee shops. He jumped in with no proof that this company would do well in his region, largely because he had enjoyed their coffee when traveling and felt positive toward them from the point of view of a consumer.

On the day his franchise opened to the public, the new franchise business owner started his day at 3:00 a.m. and worked through till 3:00 the next morning. He was busy the whole time. Customers were camped out the night before just to be there when his new franchise opened because they believed in the quality of the brand. There’s nothing better for a new franchisee than having a brand that’s already so successful that people are clamoring to come in.

This businessman could have gone with another brand that was successful in his territory, or even a local chain with a strong following. Choosing a company that was already advertising in his market and already succeeding in his state would have been a safer move. Instead he went with a nationally known brand with no previous local presence, confident that the name recognition would work in his favor.

He was right. The most common response to his new shop was excitement that his town finally had this famous brand.

In a sense, the famous company had already been marketing in his area for his franchise, even though there wasn’t a single franchisee of that particular brand anywhere near him and his customers. His neighbors were aware of the brand and some had probably made a point of stopping in when they were in a town that had the franchise – just as this new franchisee had.

This first franchise was so successful that other franchisees have started the process to open locations elsewhere in the state. Not only did potential franchisees see the opportunity to open a successful coffee shop but the franchisor saw an opportunity to expand their reach to new markets instead of focusing on markets already saturated with their brand.

Realistically, not many brands generate enough following in untapped markets to have people waiting in line on opening day. It’s also important to recognize that buzz is just buzz. If you don’t follow through and provide the anticipated experience to your customers, their excitement won’t last enough to create lasting success for your business.

Still, the new coffee franchisee’s sleepless night when he opened his shop was a good sign for him, and he has been able to reach the goals he set for himself. The people following in his footsteps now that the first franchisee has been successful will probably do well too, but there are things to be said for being the pioneer.

If you find yourself saying, “We really need a _____ here,” you might have found your perfect franchise business opportunity.”