DailyFranchiseNews.com

The Tan Company fights the "Tan Tax"

In case you haven't heard, there's a major healthcare debate going on in this country right now. One proposal is a tax on cosmetic procedures and tanning. The tax on cosmetic procedures is now off the table, probably due to the lobbyists at the pharmaceutical companies, but still a possibility is a 10 percent tax on indoor tanning.

Todd Beckman, president and CEO of The Tan Company, appeared on St. Louis' FOX 2 News in the Morning to discuss the new tax and how it will affect small businesses in the industry. Opponents of this tax can also go on The Tan Company's web site to voice their concerns.

The Franchise King makes his predictions for 2010

The Franchise King's 3rd Annual Top Franchise Trends article is now live at Small Business Trends.

Joel Libava predicts that any concepts catering to Boomers will continue to grow in 2010 including Amramp and Comfort Keepers. He says also to keep an eye on hot new food concepts like Five Guys, Tasti D-Lite and Panchero's.

And being the social media guru that he is, Libava encourages franchisors to continue to embrace social media as franchise candidates don't want to be sold to in the old fashioned way.

Honey Baked Ham Takes a Hit!

Wow! Wouldn't want to see this story for too many franchisors--sure things are tough out there but so what?  This is not the first bout of hard times and in franchising it's the fourth recession we've seen in the past two decades--all of which were good for franchising except this one.  I don't know about you, but when I am feeling sad or deprived a nice Honey Baked Ham is exactly what I would enjoy--with some wine and chocolate!  Everyone needs to perk up a bit!  However, bad press like this is NOT helpful right now for franchising and franchisors!

Read story here in USA Today!

 

The Changing Franchise Marketplace – EXPLAINED!

If you lost your job today, would you search for a new one or go into business for yourself? It’s a question many Americans have had to answer over the past year but making that decision is not easy – especially if you’ve never even fathomed owning a business before. The upside is that franchising allows you to strike out on your own without having to develop a concept from scratch and it provides you with a built-in support system to help you every step of the way.

Crain’s Chicago Business recently posted a great Q&A with Laurie Pollock, a woman who helps potential Chicago-area entrepreneurs investigate franchise opportunities as a senior franchise consultant with Toronto-based MatchPoint Franchise Consulting Network. Here’s a snippet from her interview (the full text can be viewed here):

Q: Are the first-time entrepreneurs able to cut it launching their businesses in such a difficult market?
A: The franchisees are still seeing success, even though there’s a recession out there. The franchisers are helping people hold on. Industry-wide, there’s an 80-percent to 90-percent success rate after five years. Opening a franchise does reduce your risk (compared with starting a business from scratch). You get support, guidance, resources — a lot of franchisers will assign you a business coach for the first year. There’s so much that comes with a franchise system that you’d have to create yourself otherwise: The franchiser will build your Web site, provide customized business management software, and, of course, marketing. With a franchise, it’s like you have a very large cooperative pooling of funds to build that marketing arm, and you’ve got people in the corporate office testing and churning out new marketing programs, and then the other franchisees are reporting back on how they work. Over time, the business model gets perfected and the things that don’t work get cast aside.

Photo: MatchPoint's Laurie Pollock.

Simplifying the Internet with WSI’s Daren Coudriet

Is your franchise looking to build its presence online? If so, Daren Coudriet is the man to speak to. Coudriet, 44, has been in technology consulting and internet solutions for more than two decades and counted companies like The New York Times, Standard & Poor’s and Amtrak as clients. Just about six years ago, Coudriet became a WSI franchisee and recently moved his business from the Boston area to State College, Pa. Started with WSI on 1/1/2004 (coming up on sixth anniversary) and has been growing his client base ever since. DailyFranchiseNews recently sat down with Coudriet to find out a little more about his services and expertise. Here’s what he had to say:

Do you work with a lot of franchises? Franchises are actually my sole focus because they need an Internet solutions partner who understands their business and can formulate high-value solutions.

What franchises do you work with and how? I’m able to come up with comprehensive Internet marketing focused on franchise sales and customer acquisition for franchisees. Lots of franchisors have web sites with store locators but most don’t support localized search engine optimization and that’s a problem. If a client is, say, a cleaning company in Toronto, the local franchisee wouldn’t come up if I typed “cleaning company Toronto” into a search engine; the local cleaning company that isn’t a franchise, however, will show up.  I work with ActionCoach, Tasti D-Lite and even my own franchisor, WSI. But just because all these companies are franchises doesn’t mean I implement the same programs for them. With ActionCoach, I have implemented regional territory sites in multiple countries with web site platforms the regional marketing representatives can use to market the franchisees in their region and with Tasti D-Lite, I built the original site and worked with the company’s internal IT department to create a site focused specifically on franchise sales. For WSI, I’m in the process of building a network-wide lead nurturing and management system to be used by all franchisees as well as a corporate communication system that allows the franchisor, franchisees and third-party vendors to communicate with one another. In my opinion, one of the greatest values a franchisor can impart is the power of the network. Franchisees have so many solutions and ideas but there’s no good mechanism to share all this but a network gives them the ability to accelerate the experience of every franchisee. When it comes down to it, the competitive advantage of any company is how fast they can learn.

What do your clients need most now? What they need the most is a solid Internet marketing strategy that’s implemented correctly. Much of the community is still looking for the right solution to leverage the Internet from a search engine standpoint. Many sites (about 80 percent) are not optimized for franchise sales but I help my clients to understand how an integrated strategy can provide them with a greater ROI than any other. If you can show them how they can stretch their dollar, the proof is in the pudding. Social media is certainly gaining momentum as well but it’s a future aspect for most; search engine optimization definitely comes first.

How do you blend what a client wants with what they need? When I talk to a new client, they often define needs based on a solution they already have in mind. What I do is take the time to truly understand the challenge of what they think they need and then help them understand their solution alternative. As they explore, what they often realize is that there is a more cost-effective approach out there. Many clients have been burned by vendors in the past so since I have been consulting on this topic for so many years, I “get” this and don’t just sell a solution the client thinks they want. I provide them with a competitive analysis report, which shows them exactly what their competition is doing, followed by a comprehensive plan to help them get the rankings they want. I give them all the information they will need to make an informed business decision. It’s the best way to engage the client and have them for the long run. I don’t believe in employing sales techniques because I want an educated and informed buyer; clients appreciate my openness and honesty and know that I am there to help them make the right decisions.

Typically how long does it take for a client to see results? That timeframe definitely varies from client to client and depends on what they want to achieve. It can happen in as quickly as one to two months or up to three to six months.

To learn more about Coudriet and his business, call 978-223-2225 or e-mail daren@wsifranchise360.com.

Advice Fit for (and from!) a King

It’s been a while since we’ve featured some advice from our friend, The Franchise King, but that streak is ending NOW. Here are some tips from His Majesty Joel Libava from a recent MSN Business on Main article about what to keep in mind before starting a franchise.

- Franchises don't come cheap. The cost can start at $15,000 for small, home-based operations, and go well into six figures for more established chains.

- Don't break the mold. If you want to create your own business model, then franchising may not be for you, because you'll likely have to follow a rigid framework for how the business should be run.

- Watch out for scams. Do your due diligence when choosing a franchise, because the industry is rife with scammers and default rates are at about 25 percent, according to recent data from the Small Business Administration.

Bearing in mind the above considerations, Libava says if you find a concept that fits your skill set and involves something you actually enjoy doing, going the franchise route can be a lucrative and rewarding entrepreneurial option; just be sure it’s something you can commit your heart and soul to working at every day. Here are a few more recommendations before signing on the dotted line:

- Have funding to cover you for the first year or two.
- Talk to other franchisees, past and present.
- Review the Franchise Disclosure Document that includes all the financials on the company.

And Now for Some Expert Advice

Did you know a new franchise opens every eight minutes in the United States? Karol Mercurio does and it’s her job to find the right opportunity for every client.

Oprah.com reported that Mercurio is a New Jersey-based consultant for MatchPoint Franchise Consulting Network who, much like a real estate agent, is constantly seeking the best opportunities and fits for her clients. She says record numbers of people have entered the franchise market since corporate loyalty is generally down during this recession. She says they feel the only way to create self-worth is by becoming your own boss.

Mercurio says it's best to consider your motivation before getting involved with a franchise because they take an enormous amount of commitment. She also says to evaluate your skill set to find strengths, weaknesses, interests and overall goals. There are actually 75 different categories and more than 3,500 franchises to choose from – proving there’s much more to franchising than just fast food – so Mercurio also says to do your research and don't settle until you find a comfortable match. She recommends franchises that are both recession- and Internet-proof, those in the service industry and home-based businesses.

"Most franchisers don't require their franchisees to possess industry experience, but managerial experience is extremely beneficial," Mercurio says.

Photo: MatchPoint's Karol Mercurio.

A Restaurant Operator’s Best Friend

How does Anand Gala know exactly what it takes to make a restaurant successful? Because he’s done it nearly 30 times over.

Nation’s Restaurant News reported Gala – whose love of restaurants and hospitality stemmed from hanging out at his parents’ franchised Jack in the Box restaurants as a child – oversees Gala Corp., the Los Alamitos, Calif.-based operator of 27 restaurants in Southern California and Phoenix including Applebee’s, Famous Dave’s and Del Taco. His company has launched a consulting and management service for franchise operators and in this new role, Gala Corp. will help investor groups without an operations background and other franchisees navigate the changing business landscape brought about by the recession. Gala has been drawing on his 30 years of industry experience not only to consult with others in the ways of operations, site selection and training, but also to remain viable in an environment unlike any he says he’s ever seen.

Click here to read his informative Q&A. This guy knows his stuff!

Photo: Anand Gala.

Finding the Perfect Match

With more than 3,500 franchises nationwide, the search for the right one can be a daunting task to tackle alone. When a professional franchise consultant is at your side, however, the road gets a whole lot smoother as MatchPoint Franchise Consulting Network consultant Jodi Rowell proved during a recent interview with the Salt Lake Tribune. What are some questions a potential franchise owner should ask before making an investment? Read on for those queries and her answers:

Do I have enough money? It is one thing to have enough money to purchase a franchise, but another to have enough money to support yourself until the business can start producing some cash flow.

How strong is the franchise company? People considering franchising should choose a company that's focused on long-term growth and have several programs in place -- such as a marketing fund to increase brand awareness on a local and national level and a mentoring or coaching program to answer questions and concerns -- to help franchisees succeed.

Can I follow a system? Following the proven model is the most important factor in franchising. Many new franchisees think they know more than the company and try to change the process. Abandon this mentality Am I comfortable marketing and selling my business? Many people are uncomfortable with this aspect of the business and choose not to do it. When you don't do sales, however, sales don't come in and the business suffers. Choose a business that suits your sales aptitude or be prepared to hire someone who can complete these tasks.

Click here to check out the rest of the interview. Jodi sure knows her stuff!

Photo: MatchPoint consultant Jodi Rowell.

To Tan or Not to Tan?

By now, everyone has heard about the recent Associated Press report which deems tanning beds as deadly as arsenic and mustard gas. But what do those in this $5 billion industry have to say about it? One tells the St. Louis Post-Dispatch that he doubts the claims will hurt business.

"These reports have been coming out since I got in the business in 1984. This is very usual this time of year [but] there is no proof a tanning bed causes cancer," said Todd Beckman, chief executive officer of The Tan Company, a Fenton, Mo.-based chain with over 70 U.S. locations. He said that there isn't any way to discount the amount of time people have been exposed to natural sunlight and that there are other considerations like hereditary factors and environmental influences which should be taken into account. "We've all been outside since we were toddlers.”

Dan Humiston, president of the Washington-based Indoor Tanning Association, disputed the findings as well – so much so that the group is running a full-page ad in today's New York Post condemning the "hype" related to the article. "A sunburn is bad for you. Everybody knows not to get a sunburn. But that's a benefit of professional tanning salons," said Humiston, who lives in Buffalo, N.Y. "We reduce your risk to overexposure because we control your environment."

What are YOUR thoughts, DFN readers?