So You Want to Franchise Your Business?

FOR IMMEDIATE RELEASE

INNOVATION HELPS FRANCHISES GROW

Irvine, CA--In today's volatile economy, growing a franchise system can be tough. But some franchisors see hope in the current business climate. Harold Kestenbaum and Adina Genn, authors of So You Want to Franchise Your Business (Entrepreneur Press, August 2008), reveal innovative examples from thriving franchisors that could benefit any franchisor trying to help or attract franchisees.

Opening Doors, Lowering Costs

Fast casual restaurant chains, too, are reducing the size of their "box," putting in place "express" units that are less expensive to build, and require less staffing, thereby offering a less expensive option for prospects.

Another innovative approach? Laesser said his system now uses an environmentally safe cleaning process, Laesser said, which "has opened all sorts of doors," including shopping centers that reject dry-cleaner tenants using solvents. What's more, Laesser said, since 2003 the system has focused on multi-unit developers, who enjoy economies of scale and find locations more successfully due to greater clout among brokers and landlords.

Hot Leads

Driving up revenues would help, and Artese and his team had their "a-ha" moment in April at the International Franchise Association Expo. Overlooking the sea of 200-plus franchisors, Artese saw not just peers, but prospects needing computer services.

"I spoke to a dozen franchisors in two hours and asked 'Who sets up computers for your franchisees?'" he recalls.

There and then Geeks on Call's Endorsed Vendor Partners program was born. Geeks On Call distributes its company brochures that explain its offerings to targeted franchisors, who can vet the program, and endorse them to prospects.

"We give them a discount code and become their preferred IT provider," Artese says.

Already six systems signed up, with at least five more signing on, and Geeks On Call has assigned a dedicated person to manage the program. Franchisees and prospects like it, Artese said, because "these are hot leads."

Continued Growth

Fee offered this explanation: "People have two weeks a year to vacation. It's the last thing they want to give up."

They even save money when booking a cruise to Europe, she noted, adding, "They're buying in U.S. dollars and not paying any kind of markup because of the Euro."

This year, franchise sales are up nearly 10 percent. Fee navigates today's sinking economy by sweetening the deal, offering prospects either an iPhone or free advertising dollars if they come onboard once they have read through the FDD and Franchise Agreement within the 14-day-period required by the Federal Trade Commission's Franchise Rule. It's a winning strategy either way, franchisees get a valuable business-related tool that helps them succeed.

And at a time when people value flexibility, Cruise Planners has geared its messaging by coaching its salespeople to engage stay-at-home moms who need the extra income, but currently only want to work while their kids are in school, and retirees who want to subsidize their income, and enjoy some travel perks too. Flexibility again comes into play for those who run home offices. Fee said many franchisees put in several more hours in the office once they put the children to bed.

It's easiest to help franchisees succeed, of course, if your concept is one that's in high demand. Take the education industry. Increased federal and state mandates mean schools expect improved test scores and students, feeling the pressure, rely more heavily on tutoring.

Just ask Greg Helwig, vice president of franchise development at Sylvan Learning, in Baltimore. With 1,200 centers, Sylvan has served 2 million families, with demand growing between 12 percent and 15 percent annually, Helwig says.

But despite that growth, Sylvan isn't leaving anything to chance. In the last year, the company began marketing to its database of prospects often parents of students who inquired in the past, but never bought in.

"Maybe we didn't have an opportunity that suited their geographic need at the time," Helwig says.

Sylvan informs prospects when new territories become available, to gauge interest. Helwig said his response rate to this direct mail effort is about 2.5 percent above the national average, which experts typically put at between 1 percent and 1.5 percent.

Harold Kestenbaum and Adina M. Genn coauthored So You Want to Franchise Your Business, available from Entrepreneur Press. Harold Kestenbaum has specialized in franchise law for over 30 years, working on more than 100 franchise concepts. The former franchise and general counsel to Sbarro Inc. and national franchisor of more than 900 restaurants, he currently serves as counsel to New York City law firm Ruskin Moscou Faltischek and sits on the board of directors of four major franchise companies. Adina M. Genn is an award-winning journalist who has written for The New York Times and the Long Island Business News. In 2007, the SBA named her New York's Small Business Journalist of the Year.