The International Franchise Association has published their 2012 economic outlook. It’s interesting both for those in the franchise industry, and for any business, because if a business in growing in the franchise sector, it’s probably growing in general. You can see the full study at http://www.franchise.org/2012forecast.aspx or the quick fact sheet at http://emarket.franchise.org/EconOutlookFactSheet12.pdf.

The Coles Notes version is that the IFA expects franchising to grow by 1.9% in 2012 and economic output to grow by 5% in the same year.  However, this outlook for growth is highly dependent on which sector one happens to be in.  The highest expected growth within the franchising sector is in Personal Services (which include educational services, health care, entertainment and recreation, personal and laundry services, veterinary services, loan brokers, credit intermediation and related activities, and personal transportation), followed by Retail Products and Services.  Quick Service and Table/Full Service restaurants are expected to surpass all other business formats in growth in 2011 (not just within franchising).

The report has lots of interesting numbers and charts and is created for the IFA by ISH Global insight.

Lastly, for those who really enjoy statistics (and there are lots of them this time of year), here are the Globe and Mail’s predictions about growth industries for 2012: http://www.theglobeandmail.com/report-on-business/small-business/starting-out/top-5-industries-to-start-a-business-in-2012/article2287411/, or for more similar information about franchising, have a look at http://www.entrepreneur.com/article/222412.

Enjoy the new year, and remember that while the statistics are important, what you do in your own business is equally important and growth challenges can hit any company in any industry, but they’re certainly better than the alternative

Business Growth, Franchise

Are you a spammer?

Most companies will answer ‘of course not!‘.  But are you aware of Bill C-28 and the implications it may have for your business – particularly your sales and marketing processes?  There are a lot of good articles online aboutmarketing compliance for email marketing and newsletters, but it’s important not to forget that your sales processes may be affected as well – certainly if you do cold calling to potential prospects.  Here is the skinny to help you avoid being an inadvertent spammer.

Who

Bill C-58 is specific to ‘commercial messages’ – according to some, this does not apply to other types of email messages that are purely transactional or provide information requested by the recipient or in follow-up to a transaction that has occured.  I would love to know if downloading a white paper or other document from a website is considered a transaction for these purposes – if so, the value of content downloads would be reinforced as part of a marketing program.

Basically any company that sends commercial messages needs to be aware of the regulations and evaluate the impact on their processes and how they will ensure compliance

Why

For example, When you are developing sales processes, do you have a cold-calling process where you then follow up by email?  If so, you want to be very aware of the new regulations coming in, and of the contents of Bill C-28.  The penalties are stiff.  Individuals can face fines of up to $1 million, while businesses face penalties of up to $10 million per violation.

What

If you use emails for prospecting, make sure that you either have consent (this can include such things as the prospect having given you their business card or email address, or having published their email address without a statement saying that they do not wish to received unsolicited commercial electronic messages) or that you have an existing business relationship with the customer.

You also need to ensure that your emails include contact information of the sender (including company name, contact name, address and phone number) and a clear and easy way to unsubscribe.

When

One of the key questions about Bill C-28 is when it will come into effect.  The deadline for comments on the draft legislation is September 7th, 2011.  The implementation will likely follow relatively quickly afterwards (i.e. late 2011 or early 2012).

How

Industry Canada has a Q & A page about Bill C-28 that outlines some common questions and answers, but it doesn’t have a lot of detail about how this affects your business.  Check it out for a basic grounding in what the bill covers.

You can find the Industry Canada draft regulations online to read all the details for yourself.

At Open Box, we have always done our best to follow best practices for all newsletters we send out, but after a review of these regulations, we are updating our signatures to include more detailed information (i.e. our address – we used to just have a link to our website), as well as ensuring that all emails to any type of prospect or new connection we have met include an ‘unsubscribe’ link that will flow through to our customer relationship systems.

Best Practices, Communication, Marketing

Reduce the number of choices you offer your customers.

Sound too simplistic?  In a way it is, but what matters more is that it works.

People faced with too many choices will be drawn and interested, but less likely to buy.

There have been some fascinating studies on this topic, starting with Sheena Iyengar and her jam experiment at Draeger’s.  For all the details, read her publications (links below) or watch her Ted talk (broader than this one question – she branches into the question of whether choices are linked to upbringing and culture – but fascinating) or check out her telling her story about this experiment and what led to it.

In short, she set up an experiment where people had either 24 choices of types of jam, or 6 choices.

The findings were that the 24 choices drew more people to look at the options, but actually led to fewer sales.

6 choices made it easier for people to make a selection and actually complete the purchase.

I know which one I prefer

To quote Sheena Iyengar, “they were actually less likely to make a choice if they had more to choose from than if they had fewer to choose from.”

Psychology Driving Business Growth

I’m fascinated by how psychology & the knowledge of psychologists can help drive business growth.  It’s not actually surprising – what we as people chose to do and buy and be is rooted in our brains – but it’s easy to think of psychology as a slightly wishy-washy ‘how do we feel’ science.  Where the real value comes in is the data driven research that helps us learn about how people behave and how we are wired – that will all tie in to helping drive business success.

For those who want do want more choices, here are some other fascinating links:

Related to Sheena Iyengar & the jam experiment:

• Her bio & links to her actual publications
• Her TED talk
• Talking about her famous jam experiment – great details on exactly what they did & the numeric results

Other useful articles online referencing this study or other similar ones and drawing additional conclusions:

• Product Variety Management & Sales Volume – references the Sheena Iyengar study
• Too Many Choices – references another paper called “When More Alternatives Lead to Less Choice.”

Interesting (and useful) psychology links:

• Mind-Blowing Psychological Facts – part 1 – from BusinessInsider.com
• Mind-Blowing Psychological Facts – part 2

Have you ever tried this?  What psychological insights have helped grow your business?

Best Practices, Business Growth, Communication, Marketing, Tips

I was reading some interesting articles online lately and this one by Paul Segreto stood out because it gives a realistic impression of Franchise Candidates’ changing needs and perspectives. Paul as always, kindly, agreed to let me post it here (it’s from a while ago, but just getting more true with time).

By Paul Segreto
A look at today’s franchise candidates will reveal they are more sophisticated, better educated, and more technologically advanced than ever before. In addition, and even more so because of the economic downturn, they are extremely cautious.

Today’s candidates are spending more time researching opportunities, and doing so at a much slower pace. In order to be diligent in the process, more time is spent online pouring through page after page of information, constantly bookmarking, and moving back and forth from new information to saved information. They’re comparing notes with other franchise candidates on social networking sites. As well, they’re gaining invaluable insight monitoring online discussion groups and forums.

Ultimately, today’s franchise candidate desires, needs, to be certain the franchise opportunity is as close to perfect for his or her situation, as humanly possible. In the past, and especially after previous recessions, franchise candidates took their capital gains and invested in a franchise opportunity. Many times leaving the principal investment untouched. There was a sense of throwing caution to the wind because they were investing profits. Many times ungodly profits, at least by today’s standards. Does anyone remember when money markets kicked out 17% profit margins?

Unfortunately, many individuals looking at franchise opportunities today are looking at things differently. They have to. Many are transitioning corporate executives staring at the back end of illustrious careers trying to squeak out just ten more years before retirement. Facing the challenge of younger talent, new technology, and a rapidly changing business environment, many opt to “buy” a job and explore franchising and small business ownership.

What Changed?

Here’s the difference between today’s recession, and of those in the past. As huge fortunes have been lost, and large gains have not been realized in current financial markets, today’s candidates are forced to invest all or part of their remaining nest egg in order to enter the world of business ownership. Of course, everyone knows and fully understand the risks involved in owning a business. But in yesterday’s business environment, many franchisees and business owners were “gambling” with profits.

Certainly, no one wanted to lose money in a business venture. But, many had fallback positions with funds still in retirement accounts and of course, if they had to, employment. For many of today’s candidates, failure is not an option because fallback opportunities are fast becoming non-existent. Actually, I believe many of today’s candidates might not have even considered franchise or small business ownership in the past.

So, as many individuals explore their options, they will focus more and more of their efforts online. Franchisors must embrace this fact, and dedicate more resources to the internet and look to social media to complement, not replace, their traditional franchise marketing strategies. By doing so, they’ll realize multiple benefits for their entire system including:

- Creating or further developing brand awareness with franchise candidates and consumers alike
- Generating franchise leads that are genuinely interested in exploring what franchising and small business ownership has to offer, and how a particular concept may be the vehicle to achieve their goals and objectives
- Establishing an interactive environment of communications and information sharing that will become the backbone of future franchise relationships throughout franchise systems

Last, it used to be that many franchise candidates viewed franchising and small business ownership as a way of achieving their wishes, hopes and dreams, regardless of what they may have been. Today, it’s more about goals and objectives, and necessities. We, as an industry need to fully realize this, and understand the mindset of today’s franchise candidate.

To see the original post go to:
http://franchisessentials.wordpress.com/2009/08/13/franchise-candidates-a-changing-mindset/

Best Practices, Business Growth, Franchise, Marketing Franchise, franchise candidates, franchise market strategies, franchisees, Paul Segreto, recession

That’s the horned devil’s greeting on the website of Hell Pizza.  With its first Canadian location, in North Vancouver, the chain continues its ghoulish global spread.

Word has spread to pizza lovers everywhere, creating a cult-like following.

Cutting edge in concept, marketing and advertising, with a wildly creative menu, Hell Pizza is one franchise to watch out for.

The eatery began in Wellington, New Zealand in 1996, and quickly expanded to 63 locations in that country and 3 in Australia, before setting up shop in London, Dublin and now New Delhi, India.  The brainchild of Warren Powell, Callum Davies and Stu McMullin, they sold the New Zealand Master Franchise rights to Tasman Foods for a whopping $15 million NZ.  The trio then bought the rights back in 2009.

What are their secrets?

The darkly satirical and wickedly fun underworld theme is used throughout their menu and marketing campaigns.  The pizza boxes contain a coffin-like cut-out “for your remains,” the box reminding customers to “dispose of the evidence.”  The phone number is 1-888-HELL-911.  An after-hours message kindly requests that you “go to Hell.”

Pizzas choices are infinite, and devilishly named.  The ‘Seven Deadly Sins’ items include a lustful meat-laden pie slashed with your choice of sauce, a greedy double-cheese and double-ham option, and a proudly vegetarian creation.   Gore-Met offerings include seafood rich ‘Underworld’, a ‘Sinister’ Mexican variety, and a cream-cheese apricot sauced ‘Grimm.’   Fiery chili-toppers include ‘Forked Tongue’ and ‘Ring of Fire’ for those not faint of heart.

Besides the vegetarian, vegan and gluten-free ‘hell-thy’ options there are many other fresh ideas.  The menu prices include taxes, making bill time surprise free.  They have further added value by offering online orders in addition to delivery.

Some think that the franchise may have gone too far, but it seems to have worked wonders for them.  Besides, they are selling pizza- not plasma- so it’s okay to have a little fun.

Is it time for your franchise concept to incorporate some of new, fiendishly good ideas?  Maybe it’s time to add a little –gasp- playfulness into your franchise.   Perhaps a free-flowing brainstorming session is in order.   And if you decide to order a pizza for the party, I’d recommend Hell Pizza.  If you chose a different pizza palace – beware!  Who knows what in Hades might happen to you…

Business Growth, Franchise, Franchisor Spotlight, Fun creative, franchise concept, Hell Pizza, marketing campaigns, pizza, strategy

Guest Post by Nancy Baye

‘Reduce, Reuse, and Recycle’ is not just a motto: it’s a mindset.

I find waste offensive.  If it’s not needed, don’t use it.  If it is needed, then reuse and recycle it.  Go ahead and laugh at the re-used zip-lock bags and gently-damp paper towels that hang drying in my dish-rack; just know that this attitude is prevalent among today’s consumers.

Is it on the mind of your franchise operations?

On a recent visit to McDonald’s for a (relatively healthy) chicken wrap, I specifically stated that I did not need a bag.  My comment was noted by the girl who took my order and my money, then went to retrieve the order.  Another staffer (highly bored) ventured to the counter and glanced at my order.  He automatically reached for a paper bag and shook it open.  I tried to stop him, but he was quick as a bullet.  When I re-iterated my request he shrugged his shoulders, indifferently crumpled the bag and – to my horror –threw it into the garbage.

I explained to the blemished offender my attempt to avoid waste, adding that had I used a bag, (forgive me old growth forests) it would have been respectfully recycled.  Again, he shrugged his shoulders, and then walked away.  

My request was dismissed and I felt dismissed.

What recourse do I have?  What is the likelihood of the burger jockey reporting my feedback?  About two shoulder shrugs out of ten.

How do you, as a franchisor, keep up with consumers’ shifting mindsets and resultant requests?

Some encouraging examples to consider

• many grocery and liquor stores now give away reusable bags (with logos smartly displayed) to brace customers for the upcoming ban on plastic bags
• ‘Mom & Pop shops’ seem sensitive to their customers needs, perhaps because the owner is on the front lines to witness those glances of approval / disapproval

It’s too late for that McDonalds’ bag which now faces years in a landfill.  But my tale is not simply about a wasted bag: it’s about a principle. 

Today’s consumers want to be as socially and environmentally responsible as possible.   Can you afford to overlook this way of thinking?

How do you get feedback from the front line:  your consumers?

Best Practices, Focus, Franchise, Tips consumer's shifting mindset, franchise operations, franchisor, Nancy Baye, recycle, socially and environmentally responsible

Selling a franchise is – by definition – selling a system of operations, sales, production and delivery that will make money for the buyer.

One often unspoken assumption by franchisees is that you will provide them with ‘best practices’ and will continue to provide them with improvements to procedures and operations.

The franchisee expects to acquire a system of operations, sales, production and delivery that will generate profits; and they expect it to be continually updated.

A big part of the value of a franchise is having a group of intelligent invested people who are constantly trying out new things and learning from their experiences.  Since the learning that arises from this is carried out in disparate locations, the challenge becomes how the franchisor can gather, collate, distribute and continually update these found improvements to all the franchisees.

Why this is so important

• When this does not happen, the learning process comes to a grinding halt and the newly acquired data is lost.
• But when it does happen, the competitive advantage of this franchise will go through the roof!

Sir Isaac Newton said:  “If I have seen further, it is by standing on the shoulders of giants.”  (Letter to Robert Hooke, 1675)   This quote speaks to any successful franchisor who learns from his franchisees.

Set up systems for people to:

• See what has been done before, what worked and what didn’t
• Easily track what they are trying, and filter results for fellow franchisees
• Easily generate graphs to see trends, leading indicators, etc.
• Learn from you about franchise-wide best practices that have been discovered
• Have a place for updated best practices, and a forum for questions and conversation

Distributing continual improvements further benefits you as it is proof of all the ongoing advancements, upgrades and value that you are providing.

It helps to justify your royalties even before the franchisee asks the question,“What have you done for me today?”

Best Practices, Business Growth, Communication, Focus, Franchise advertising, Best Practices, investors, marketing, product, selling franchises, strategy, support development

Have you ever said that keeping franchisees happy is like herding cats?

The biggest impediment to franchise growth, as you likely know, is unhappy franchisees. Even if you have leads, you won’t be able to close them if the existing zees are unhappy.  Don’t worry; no one’s franchise operations are perfect!   Let’s look at how to improve this area.

While you are working to improve operations (or trying to find the time to do so…) good communication will go a long way to improving franchisee satisfaction. If you can quickly and easily share information with your franchisees and get useful feedback from them, then you will either:

• get good franchisee validation when new prospects are in the  funnel, or
• know why you’re having trouble with franchisee validation

Sometimes when I’m discussing communication with franchisors, I hear:  “The last thing I want is more complaints – then I have to deal with them!”

The trade-off is that allowing franchisees to express their thoughts and feelings often alleviates the emotional impact on them, and it deflates the problems.

You may be very pleasantly surprised by positive feedback that comes through these free-flowing communication channels.  This positive information can validate you as it confirms what you are doing right.  It can further be used to strengthen marketing materials.

You would be surprised how easy it is to set up a system that allows people to share their thoughts, comments and questions without taking up a lot of your time or energy. 

One great way to do this through the use of an employee ‘Intranet’ - a place where franchisees can have an online conversation with you (and ideally with each other) in a protected environment.  This system also allows you to review the exchanges at your leisure, and to share information with them simply and easily.

Managing these communications so that you don’t end up with online gripe sessions (which only further inflame people) is a huge issue in itself.  But that’s a topic for another post!

Does the idea of an Intranet feel overwhelming to you?  You’d be surprised by how easy we can make the process.   Contact us at online@openboxinc.com and a 15 minute demo will show you how you can get started easily.

Business Growth, Communication, Franchise, Technology franchisor, good communication, happy franchisees, Intranet, strategy

Many years ago, a highly astute man named Pareto, led a study which concluded that 80% of our success will arise from 20% of our efforts.  This ‘Pareto Principle’, also known as ‘The 80 / 20 Rule’ can easily be applied to an examination of priorities.

The 20% to focus on is that which will drive revenue.

One of the key challenges for any business owner is how to set priorities.  A glance at your listed ‘To Do’s’ will include many ‘Nice to Have’ items.  Yet you must distinguish between these lower priorities and those that need to top the list:  those that will spur profits.

There are many demands at any given time: from your franchisees, staff, your personal goals and business development advisors.  The secret is to know what drives your revenue, and to be ruthless about new ideas as they pertain to driving revenue.

What will drive franchise revenue?   Key areas to consider are:

1. Communication
2. Relationship Building with your Franchisees
3. Driving Sales

More specifically, items that often fall under each of these are:

Communication:

• your marketing and PR
• methods used to attract new franchisees
• tasks that aid in attracting customers to existing franchisees
• ways to keep franchisees excited, enthusiastic and involved

Relationships with franchisees:

• to make them aware of the value you provide them continually
• to help and support them in getting more sales
• to train and advise them on best practices
• to demonstrate how your training facilitates their increased profits

Driving sales:

• when franchisees make money and have a good profit margin, both them and you make increased earnings
• can be achieved through a combination of online marketing, development and implementation of effective marketing materials, the use of promotions and sales offers
• all begins with market research

Focus on what needs to be done with your existing revenue drivers, and as new ideas arise, be strict in assessing where they fall in regards to the 80/20 rule.  This simple principle will act as a powerful lens, narrowing your focus so you can strengthen the profitability of your franchise.

When is the last time you re-evaluated your priority list?

Best Practices, Business Growth, Communication, Focus, Marketing

Paul Segreto’s creative program inspired brand awareness and skyrocketed sales.

Paul Segreto of franchisEssentials

Open Box is a proud partner with Paul Segreto, founder, president and CEO of franchisEssentials and one of the most knowledgeable and experienced franchise consultants in North America. With two decades of experience in the franchise industry, he knows a thing or two hundred about the world of franchising.

One story really inspired me with how Paul Segreto uses his creativity and industry knowledge to help franchises succeed.  Here’s how one particular American Quiznos franchisee hit a home run by thinking creatively; with a little help from franchisEssentials of course.

Inspired by need the franchisee, whose store was in a tired, old shopping centre with business declining and tenants fleeing, was anxious to generate traffic and sales.  He turned to Paul Segreto.  Paul’s creative thinking led him to look at the many schools in the area and the potential market there.  Visiting one of them, he heard a big complaint from sports coaches:  they hated having to stop for food en route to away games.  The kids would stumble off the bus, goof around, debate orders, wait for food, count out change, goof off some more, and then would need to be corralled back on the bus.  The coaches hated it.

Paul recognized an unmet need and was quick to suggest a solution to the coaches’ problem.   Quiznos would provide away game sandwiches. The offer was quick to catch on.  Parents got involved.  It grew from a simple service where orders were called-in, to a fully developed online system.  Parents could log in, choose a meal for their child (a healthy choice!) and charge it to their credit card.  The traveling team picked up their pre-game meals as they boarded the bus or car pool at the school– each labeled with name and receipt of payment.

Local schools of all levels jumped on the bandwagon and soon this Quiznos was hopping.  The program then expanded to band events, and any functions where school kids were going off-site and needed feeding.  Kids, faculty and parents were happy; Quiznos and the franchisee were thrilled.  Brand and store awareness grew and more revenue was generated through this creative program (especially during football season) than through total in-store sales.

Although franchising is by its very nature about standard operating procedures and systems, there is still room, and need, for creative thinking.  As Segreto says, “You have to think outside of the box.  If that doesn’t work, then make another box.”

When is the last time you lifted your head up from SOP and had a good look around? Let the inspiration flow and you may be on your way to another great franchise success story.  And if you need a little help, contact Paul Segreto at franchisEssentials.

Business Growth, Franchise, Franchisor Spotlight