2010 – Some Important Changes In How We Do Business In the Franchise Industry

Guest post by: Anne Barr
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Transfers vs. New First Time Franchisees - By Anne Barr

1. Social Media

In using this tool to reach your customers, there are several things to remember:

a.) Decide WHY you want a Facebook Page

b.) There's value in connecting with customers and prospective customers online

c.) Give reason to "like" your page on a Welcome Tab

d.) Be sure to tell what you can do for them 2. Attorneys and Flat Fee Rates for Franchisors

Some large attorney firms are now offering a flat fee rate or alternative billing arrangements for Franchisors. Clients want to know "What do I get for my money?" Current economic conditions have caused clients to be even more sensitive to costs. Many clients have learned not to pay attorneys to research business, cultural or marketing information when expanding internationally for example. This can be done less expensively through other sources. For foreign expansion one definitely needs an attorney or attorneys to understand the tax law, competition law and labor laws in the country you are targeting for expansion.

3. Lunch Catering

Sandwich chains are finding catering office lunches is an efficient way to bring up their bottom lines.

4. NASCAR Sponsorships as a marketing tool

Many franchisors and businesses are spending a good amount of their marketing dollars in NASCAR sponsorships. Of course, sponsoring a car on the NASCAR circuit can be very expensive. Today, auto racing is second only to football as the most watched sport on TV. Races are televised in 150 countries around the world each week - in approximately 20 languages. Nearly half of NASCAR fans earn more than $50,000/yr and 40% are female. It's all about reaching the consumer with your message and getting the customer involved. According to a recent IPSOS research firm study, NASCAR is the #1 sport in fan brand loyalty. "Three out of four NASCAR fans will consciously choose products of NASCAR sponsors....even if the price is higher"*

*Jeff Cheatham - Director of Communications, Wave Energy Drink

5. Real Estate - Conversions

Franchisees are saving money by tackling conversion projects from restaurants to beauty salons. Many of these now empty spaces are already partially ready for new tenants. Typically, the electrical and plumbing is in place and often with much less cash outlay required for remodeling, the space becomes a new business at much less than the original build-out costs for a new space.

6. What Potential Franchisees Really Want To Know- When Exploring A Franchise Opportunity

• Easy to navigate Franchise website

• Most important factor is satisfaction by current franchisees

• Actual Pro Formas of existing Franchisees

• How long does it take to become profitable?

• Sales numbers by Region, not national numbers

• Most appealing incentive would be reduced royalties for first year

7. Non-Traditional Locations - the newest expansion strategy

Multi-unit franchisees are exploring the viability of sites such as airports, hotels, colleges, senior centers, highway rest stops, hospitals, military bases, and more. Costs are higher, staffing difficult, sometimes there are security issues, and other challenges, but you have a captive audience and can operate in a smaller space.

8. Previously Owned Equipment

Previously owned equipment saves costs and boosts profits, especially in the restaurant sector. Multi-unit owners are saving money.

9. Transfers or Franchise Re-sales

Transfers or Franchise Re-sales will become more the norm than new franchise sales in the next couple years. Many franchised business owners are looking to retirement and will be selling their businesses.

10. The Good, The Bad and The Ugly

The Good: Tax incentives can pay big returns. Several retroactive tax credit programs cover the open tax year and the three prior years. Both franchisors and franchisees stand to gain. Anyone employing people can benefit from these credits, whether for the corporate headquarters, company owned locations, or franchisees nationwide.

The Bad: Closings, bankruptcies, non-lending market. The tight credit market wreaks havoc with business closings, company bankruptcies and the unavailability of capital...money is tight and the requirements to get any kind of financing are unbelievably difficult and stringent.

The Ugly: New health care law affects almost all taxpayers and employers. Beginning after 2013, employers with at least 50 FT employees must offer certain minimum health coverage to its employees or pay a penalty if certain employees are required to purchase health insurance through an insurance exchange. We won't even list the tax law changes.

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Transfers vs. New First Time Franchisees - By Anne Barr

About the Author: Anne Barr

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Anne Barr has over 32 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company.
Click here to visit Anne's website.

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2010 – Some Important Changes In How We Do Business In the Franchise Industry

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