Why Franchisees Go Rogue and What to do About it


Among the best ways to keep franchisees from changing or competing with your brand is to have an ever-evolving brand that creates financial opportunity for the franchisee. Another great technique is to set up “Franchise Advisory Council” so franchisees are made to feel that their opinions, input and feedback matters to the success of not only their individual unit but also the brand as a whole.

Why Franchisees Go “Rogue” and What to Do About It

How to prevent a problem from occurring in the first place.
By Gary Occhiogrosso – Managing Partner, Franchise Growth Solutions, LLC.

One of the problems facing franchisors is when franchisees choose to go “rogue” by changing how they run the system or they take proprietary knowledge to compete with the brand. There are famous cases where slight changes to a name, but similar advertising and business models landed franchisees in court. One that stands out is Mister Softee, Inc. vs. Tsirkos in 2014. The franchisee copied the ice cream brand’s trucks and even operated under the name Master Softee. Needless to say the “real” Mr. Softee won out in that case. However, time, energy and money were spent on something that may have been avoided in the first. Why do franchisees make these decisions? Sometime its just in their nature or personality to take a position of “knowing better or more” than the franchisor. Although many times it’s because the franchisor is not living up to the franchisee’s expectations or worse yet, offing little in the way of field support, innovation and/or ongoing education designed to help the franchisee drive sales into their establishment. As a result a franchisee may sometimes feel abandoned and then goes into “Survival Mode”.

Ways to Keep Franchisees from Competing with Franchisors
Among the best ways to keep franchisees from changing or competing with your brand is to have an ever-evolving brand that creates financial opportunity for the franchisee. Another great technique is to set up Franchise Advisory Council so franchisees are made to feel that their opinions, input and feedback matters to the success of not only their individual unit but also the brand as a whole.

Of course how the franchisor communicates with its franchisees is a key component to success. It’s not enough to issue reports and statements concerning policy changes and procedural updates. You’ve got to meet face-to-face and make the franchisees part of the discussion. Field visits are integral in developing strong report with the individual franchise owner. An open, transparent approach to issues facing franchisee can make all the difference in the world. This approach will surely help when a franchisee is contemplating reinventing the wheel or leaving the system all together.
When issues of operational compliance do come into play (and they will eventually) you’ll need to demonstrate why following the system is the way to success. Franchisors should be confident they are making legitimate requests of the franchisee by making sure all the franchisor’s processes have been fully tested and proven to be successful. If this is the case, then in my experience, even the most difficult franchisees will have reason to follow suit although they may be reluctant to do so at first. It’s also import to keep an open mind and listen to the franchisee. When franchisees feel they are “heard” they are far less likely to go rogue. Critiquing does a lot but encouragement does a lot more. Creating a culture of open communication will go miles in preventing rogue franchisees.

What Protections are in Place for Franchisors?
Spending time to coach, counsel, correct and encourage franchisees does not mean the franchisor should ever give up their rights and remedies under their franchise agreement. And when a rouge franchisee is damaging the brand or the system or both and if a resolution cannot be reached then unfortunately the only choice is to terminate the relationship. Your franchise agreement should clearly state the terms and conditions for termination. That said, following one basic principle of communication and transparency should prevent this from happening. However if a franchisee does go rogue, then swift and decisive action must be taken to protect your intellectual property and your other franchisees.
Avoiding rogue franchisees requires skill, work and constant improvement on the part of the franchisor. The lines of communication between franchisors and franchisees must remain open and clear. Setting expectations early in the approval process and onboarding is key. Expectations must be spelled out clearly from the beginning. All these small steps, when combined and practiced regularly will help to prevent rogue franchisees.
About the Author:
Gary Occhiogrosso is the Managing Partner of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm.
Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, advertising, selling franchises and guiding franchisors in raising growth capital.
Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program with it’s founders. He is the former President of TRUFOODS, LLC a 100+ unit, multi brand franchisor and former COO of Desert Moon Fresh Mexican Grille. He advises several emerging and growth brands in the franchise industry
Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine and named “Top 50 CXO’s” by SmartCEO Magazine. In addition Gary is an adjunct instructor at New York University on the topics of Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales and Marketing. He is also the host of the “Small Business & Franchise Show” broadcast over AM970 in New York City and the founder of FranchiseMoneyMaker.com

How to Develop a Franchise Model



5 Factors to Consider When Developing Your Franchise Model

A well-thought-out franchise model is a great way for successful businesses to grow, and for entrepreneurs to work within a secure environment. But before you consider going the franchise route, however, franchise lawyer Harold Kestenbaum recommends that you consider the following 5 factors to guarantee that your business operates at peak capacity.

1. Your franchise model must be based on an existing and functioning business.

An idea is just an idea until it is proven in the physical world. Your franchise needs a successful starting point before it can become an actual chain. Until you can prove that the original model that you want to expand can be consistently solvent, you will not only have a hard time making sure the next location is functional, but you will have a harder time selling it to a franchisee in the first place.

2. The model must be replicable in order to successfully become a franchise.

Many factors go into determining whether a business is profitable or not, and unfortunately these may not be as universal or constant as one might hope. When attempting to transform an effective business model into a franchise program, doing so can require a lot of research and strategy in order to recreate the circumstances that made it productive in a new area.

3. Be mindful of the money.

There can be a great deal of numbers to crunch when developing the framework for franchising, and you should have a minimum of $75,000 to $150,000 in capital ready before you even consider acting on your model. You will need to tap into expert advice — and legal advice from franchise attorneys like Harold Kestenbaum — regularly as you navigate the complex structuring of a franchise plan.

4. Operations must be delegated properly.

A key aspect of ensuring your model will be successful is making sure the franchise is suitably managed. This entails not only choosing the right leaders in any new locations, but also possibly bringing in new personnel for both your primary business and overseeing the franchise as a whole. Your model will need to maintain self-sufficiency for every location in your chain, including your original operation, as it is not advisable to micromanage every establishment in a franchise.

5. Maintain your brand.

Above all, you have to mind your brand. Every location in your franchise represents your company and its image. The development of your franchise model should incorporate what you expect from your brand and communicate that effectively to your franchisees and your customers.

A franchise lawyer like Harold Kestenbaum is integral to much of this process and can keep you properly informed of important issues such as trademark registration and contract disputes. Check out Harold Kestenbaum’s questions and answers to franchising your business or Contact Harold Kestenbaum for a free consultation before moving forward with your franchise development model to avoid running into legal pitfalls later.

Getting New Franchisees off to a Great Start


This approach helps franchisees adapt as the brand grows and systems evolve. Preparing franchisees to deal with the issues that may come up along the way is key to building a successful franchise system. Ultimately solid onboarding and training should expose the franchisee to detailed information so the franchisee knows what the company expects and they can live up to the “Brand Mission”.

"Prepare them for business ownership through the onboarding and training process."

By Gary Occhiogrosso – Managing Partner of Franchise Growth Solutions, LLC.

When training new franchisees, there is a term that is used regularly but has received a lot of criticism “Onboarding” Many Franchisors believe that the “onboarding process” begins once a candidate is awarded the franchise. I coach this process in a different way. At Franchise Growth Solutions we know that the onboarding process begins from the very first interaction the company has with the franchise prospect.

That said, let’s take a step back and first explore the goal of proper onboarding. In my opinion, the main focus is to create value for the brand in the minds eye of the candidate. Without value and respect for the brand, all the training in the world will not produce a franchisee capable of living up to his or her full potential as the operating franchisee.

Although franchisee training is often seen as a means to an end because of how quick paced it is and how much information is packed into training sessions, in and of itself training is certainly not the sole answer in producing quality franchisees. Through the years I’ve trained franchisors to understand that in order to successfully orientate a new franchisee; Mission, Culture and Core Values of the brand must be communicated to and embraced by the franchisee. Here again I cannot emphasize enough that franchisors must start building value and respect for the brand during the recruitment phase. It is during that time, potential franchisees and the franchisor should engage in meaningful, mindful conversation so that the franchise candidate understands what is expected of them and the Franchisor should understand what the franchisee expects in return. It’s a simple (but not easy) process that can lead to rejecting a candidate and losing the deal. However, trust me when I say, losing that candidate is a far better outcome than bringing the wrong franchisee into the system only to wreak havoc, compromise brand standards and lobby additional, otherwise satisfied franchisees into their negative mindset.

Successful onboarding and training requires transparency, consistency and follow up.

The likelihood of a franchise owner “going rogue” when a company is transparent in its expectations lessens. Franchisees know what is expected of them. In addition, the Franchisor’s support personnel should be out in the field in front of the franchise owner, coaching, counseling and working with the franchisee to achieve optimum results, financially as well as making sure the business is providing options consistent with the franchisees lifestyle goals. Supplying ongoing training that places resources within reach of the franchisee is not only vital at the onboarding phase but throughout the lifecycle of the business relationship. This approach helps franchisees adapt as the brand grows and systems evolve. Preparing franchisees to deal with the issues that may come up along the way is key to building a successful franchise system. Ultimately solid onboarding and training should expose the franchisee to detailed information so the franchisee knows what the company expects and they can live up to the “Brand Mission”. Initial and ongoing training should support the idea that following the system is the most important aspect leading to the success of the business. This approach puts franchisees in a better position to make sound decisions concerning the business with little outside assistance and with little room to “reinvent the wheel”.

Franchisees need to be held accountable for holding the same high standards as the franchisor. In order to do this, your company culture, value proposition, training program, operations manuals, job aids and other franchisor supplied tools should be carefully developd, tested, reviewed and updated as necessary. The onboarding process and training program is never “done”. As the franchisor it is your job to insure that franchisees have access to the tools and support needed to grow and thrive.
Get new franchisees off to a great start through a sound onboarding process that starts at the first hello. Recruit and vet your candidates thoroughly, be certain they are a fit for you brand culture and buy into your mission statement. Provide them with the tools and support needed to navigate system changes as they occur. Give the franchisees the foundation they need to grow, develop, and succeed as business owners. An excellent franchise system, built this way from the start makes it easier for franchisees to overcome challenging situations as they occur, and they will occur.
About the Author:

Gary Occhiogrosso is the Managing Partner of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm.http://www.frangrow.com

Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, advertising, selling franchises and guiding franchisors in raising growth capital.

Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program with it’s founders. He is the former President of TRUFOODS, LLC a 100+ unit, multi brand franchisor and former COO of Desert Moon Fresh Mexican Grille. He advises several emerging and growth brands in the franchise industry.

Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine and named “Top 50 CXO’s” by SmartCEO Magazine. In addition Gary is an adjunct instructor at New York University teaching Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales and Marketing. He is also the host of the “Small Business & Franchise Show” broadcast over AM970 in New York City and the founder of http://www.FranchiseMoneyMaker.com

How Franchising Impacts the Economy and creates jobs



By Gary Occhiogrosso, Managing Partner - Franchise Growth Solutions, LLC.

Franchisees support communities by strengthening them financially.

In cities around the nation, franchises play an integral role in supporting the local economy through job creation and the payment of taxes. In Jacksonville, Florida, Checkers franchisees Karen and Rich Weber have turned around a franchise that failed not once with former owners but four times previously in the city. Thanks to their knowledge of the restaurant industry and franchise training, the couple has survived to see the opening of their second location in the city.

Their reputation for building customer relationships has helped them create growth within their franchise. Previous owners were not able to keep up with customer demand nor were they able to offer the same type of benefits to the local economy the Webers have. With the opening of a second Checkers in the city, there is a need for even more skilled employees to fill the roles in the business.

New Businesses Help Other Local Businesses Thrive

Men and women are more likely to shop locally when they have a reason to come into town in the first place. The excitement of a new franchise spreads like wildfire, helping other business owners meet sales goals. In return, these businesses pay more taxes due to increased sales which support the city’s budget for the year.

Employment Rates Steadily Increase Yearly Because of Franchises

According to the International Franchise Association (IFA), 2016 helped U.S. employment rates by growing 3.5 percent. The projected totals for 2017 estimated continuous growth with the addition of close to 250,000 new jobs. Franchise output was also up in 2016 by a reported 5.8%.

Franchises Earn Billions of Dollars Annually

Estimates for 2017 had franchises earning an outstanding $700 billion. Americans then contribute dollars to the local economy through payroll and taxes. Having the option to become a franchisee opposed to starting a business from the ground up is very appealing to entrepreneurs who see growth projections for franchises on the incline each year.

Take Your Great Franchise Idea and Help Communities Nationwide

Franchisors contribute a great deal of resources to communities around the globe. Launching a successful franchise business provides entrepreneurs with the opportunity to share their ideas, products, and services with like-minded business people who find franchising to be a legitimate way to go into business for themselves. The local economy thrives, jobs are created, and local business districts in cities around the globe profit.

For information on starting your own francise business contact:                            info@frangrow.com or call (917) 991-2465

Planet Wings Suits Up for Super Bowl By Focusing on Technology

“About six months ago, we revamped our website and put a focus on increasing our SEO,” Franco Fidanza, Planet Wings’ CEO, explained.



Planet Wings- Crave the Flavor - Fresh Never Frozen No Antibiotics, No added Hormones, No Steroids

“About six months ago, we revamped our website and put a focus on increasing our SEO,” Franco Fidanza, Planet Wings’ CEO, explained.

MIDDLETOWN, N.Y. (PRWEB) January 19, 2018


The big game is quickly approaching, but the real MVP of Super Bowl season isn’t the players or the teams — it’s the food. From beer, to chips and subs and event to the almighty chicken wing, the Super Bowl would be nothing without the food that accompanies it. But how do consumers connect? Where do they get their game day food from? In today’s day in age, it’s all about technology.

Planet Wings, a tri-state area based restaurant franchise in New York and New Jersey, looks forward to the big game day each year. With nearly 23 Super Bowls under their belt, Planet Wings knew it was time to spark a change in the way they prepared for the big day, to stay modern and attract new customers.

“About six months ago, we revamped our website and put a focus on increasing our SEO,” Franco Fidanza, Planet Wings’ CEO, explained.

What exactly is SEO? Search Engine Optimization is extremely important for businesses who want to show up on customer’s search results. In addition to focusing on SEO, Planet Wings has increased promotion of their online ordering page through use of email blasts, social media and digital ads.

“Super Bowl is the most popular time of the year for us. We knew leading up to the big day that we had to secure our website, and keep our promotions clear and concise for our consumers,” revealed Brittany Ambrosino, Planet Wings’ Marketing Director.

Now, the Planet Wings website receives over 30 thousand users monthly, with 80% of users being on their locations page the longest. In addition to that, over 75% of their users now access their website through mobile devices. “With all of these statistics in mind, we wanted to make sure our online ordering was easy to use for our customers,” said Fidanza. Their focus on SEO seems to be doing the trick, as 60% of their monthly customers are organically coming to their website based on searches such as “chicken wings” and “fast casual.”

“During the summer, we sat down and combed through our website, seeing places and areas that we could add meta data too to help us show up to new organic consumers,” said Kristina Andujar, Planet Wings’ Web Designer.

One of the most important aspects of Super Bowl Sunday is having a full spread of football food. Planet Wings sets themselves apart with their Game Day Specials. “We really looked at our menu, what menu items have been popular for the past 20 years, and made specials to offer our customers,” Fidanza explained. “These specials make game day a breeze for both the customers, and for us.”

The new specials make choosing easy for customers, featuring wing options of 30, 50 and 100 count wings. Customers will have five options to choose from to suit their game day needs.

“Super Bowl is a crazy time. We need all hands on deck,” Franco explained. With 75 percent of chicken wings coming from restaurants or foodservice outlets during Super Bowl Sunday, according to the National Chicken Council, it’s no wonder why the whole team is in place for the day.

What are some game day tips Fidanza has to offer? “Always order ahead of time” he reveals. “I’m sure any restaurant open on Super Bowl Sunday can agree that ordering ahead of time leads to a smooth operation throughout the day.”

Planet Wings’ website will be fully equipped and ready for the big day. Their hope is that putting in the work to make their website a success, will make game day a big success for both them and their customers.

“It is important for us as a brand to be in on what’s going on technologically, as we believe it helps us to best serve our customers,” Fidanza expressed.

The 12 Worst Mistakes When Marketing...


For Our FGS readers, although this article references "restaurants" be assured it applies to all retail service and product based businesses.   Enjoy!






The 12 Worst Mistakes When Marketing for Restaurants

Written by and originally posted by Kendal Austin in Restaurant Marketing

All too often, restaurants miss opportunities to get their business in front of hungry diners.

With growing competition and increasingly demanding consumers, an effective marketing strategy can mean the difference between success and failure.

You put a lot of work into making your restaurant successful. Don’t waste those efforts by making these all-too-common restaurant marketing mistakes.

Once you make your way through the list, Download Toast's Restaurant Marketing Guide 101 for more restaurant marketing advice.

1. Inconsistent branding

Define your restaurant’s brand and stick with it. Use it to be the driver behind marketing messaging and strategy. The restaurant website, social media channels, and any in-store materials should support your unique brand.

If you’re a sustainably-focused fine dining restaurant, build marketing messaging that speaks to where your food comes from and how that creates an excellent experience. Avoid anything that does not appear to support that mission.

2. Ignoring social media

All restaurants should have a social media presence. Just because you are not an avid Facebook user, doesn’t mean it’s not a good fit for your business. Social channels provide an inside look into your restaurant, helping build relationships and stay top-of-mind with guests. Whether your business is on social media or not, you can guarantee your diners are. Take this opportunity to be part of the conversation. 

Determine which social media channels are most used by your typical diner and make your business accessible there.  Read more restaurant social media best practices.

3. Not claiming your business on Google

Google My Business puts your restaurant information on the map, literally. By claiming your business, you can update hours, website, menu, and other crucial data your guests need to know. Google prioritizes these listings and shows them first in search results.

A GMB listing ensures that the most important information (location, phone number, hours, etc) appears immediately when your business is searched online.

You can read more about Google My Business for restaurants here.

This also paves the way to launching targeted local online ads like Google Adwords. Which brings us to the fourth common marketing mistake…

4. Refusing to pay for marketing 

For marketing to make an impact on the success of your business, you’re going to have to allocate funds to support it.

The National Restaurant Association has reported that restaurants typically spend about 3% of monthly revenue on marketing programs.General recommendations typically range from 2 - 10%. Where you spend marketing budget will vary by business type, but many experts are encouraging restaurateurs to focus on digital and mobile marketing - specifically search engine optimization (SEO), Google My Business, and social media.

5. Not measuring your marketing

For restaurants, marketing is now measurable. 

Whether it’s tracking visits to the website, clicks on online ads, growth in social media followers, or attendees at a special event, your investment in marketing and branding should be tied to specific metrics. You’ll have a much easier time justifying marketing costs by defining Key Performance Indicators (KPIs) beforehand to measure the effectiveness of your programs.

6. Missing the true benefits of a restaurant loyalty program 

Data is power. An integrated restaurant loyalty program is a great way to collect data on guests. It gives loyal guests an incentive to stay in touch while enabling your restaurant to run targeted marketing campaigns and drive repeat business.

Loyalty programs should be customized to fit your restaurant’s brand (see #1) and offer immediate and frequent value to all who sign up.

7. Sitting on valuable customer information  

A database of guest information through a loyalty program or mailing list is useless without a communication strategy. Have a plan to utilize that valuable contact information. Email, SMS texts, social media, and targeted advertising are at your disposal with a robust customer database.

Depending on your restaurant brand, guests might appreciate coupons and promo codes or notifications about upcoming wine tastings and events. Promotional marketing, in moderation (see below), is a valuable tactic for the restaurant and your loyal customer base.

8. Sending too many promotional emails

The #1 reason that people unsubscribe from emails is that they receive them too frequently. The huge potential value of a customer database is lost if guest are unsubscribing from your messages.

Optimal email timing and frequency will vary by industry. Data suggests that most people are open to receiving promotional emails at least once per month. Try providing different subscription options (i.e.: monthly newsletter, weekly discount code) to see which cadence is most popular with your guests.

Also, instead of an "unsubscribe" button on emails, send them to a "manage email preferences" page where they can either unsubscribe or switch to a different cadence. 

9. Being clueless about SEO 

Effective search engine optimization (SEO) does require some technical knowledge, but it will make or break the “discoverability” of your restaurant. With so much search traffic going to Food & Beverage (see #11), it’s clear that restaurant websites with optimized keywords will win.

If someone searches “chicken wings beer denver,” the restaurant’s SEO strategy will determine which restaurant shows up in the search results. If you’re a Colorado-based sports bar, it’s extremely important that you show up. At the very least, have a conversation with your web designer about it. For a complete guide, check out these tips for restaurant SEO.

10. Skimping on photography

Imagery is a powerful storytelling tool, particularly online and on social media. One study predicted that 84% of online communication will be visual by 2018.

RELATED POST: 7 Tasty Food Photography Tips & Tricks for Restaurants

Photos can evoke powerful feelings in the viewer. Our mouths water at the mere sight of a juicy fire-grilled hamburger; just the image of a lively dance floor can be energizing; we react to photos of food with “Ooh, that looks delicious,” without ever having tasted it.

Invest in high-quality photos of your food and interior to build brand and evoke an immediate positive reaction.

11. Missing on mobile

Failing to prioritize the mobile experience is an extremely costly mistake. Not only do searches from mobile devices make up over 60% of total search volume, but “Food and Beverage” is the most searched category on mobile devices. 72% of searches in this category are initiated from a mobile device, according to one report.  

Bottom line - your restaurant should be easy to find from a phone. That means a mobile-friendly website, a Google My Business account, and information-rich social media profiles. More tips for mobile-friendly marketing can be found here.

12. Refusing to evolve 

Adapt or die.

Keep your eyes open to the way the industry, your competitors, and your neighborhood are evolving. Your marketing strategy should be modified and tweaked to accommodate the inevitable changes in the environment.

Maybe the neighborhood has become more upscale over time; perhaps a large chain has popped up next door and people will be looking for the “local” option; maybe a widespread food safety issue has resulted in an aversion to seafood. Be aware of these shifts in the market and adapt your restaurant marketing accordingly.

Written by: Kendal Austin

Kendal Austin is the Marketing Manager at Toast responsible for customer and partner programs. After a brief stint in foodservice, Kendal found a passion for marketing technology that solves problems. Her claim to fame: she was a contestant on the Price is Right and lost in the final round.

Why Do I Pay a Franchise Fee?


To the Franchisee it must represent a reasonable fee to allow you to become a part of the existing system, including all of the training programs that are a part of that system, to help you reach your own business goals.


Why do I Pay a Franchise Fee?
By Premium Author Dennis Schooley

Franchising is a strategy that the Franchisor uses to achieve its objectives, including market penetration and market domination. Franchises are granted or awarded to a qualifying Franchise Candidate that has similar objectives in their own marketplace. That Franchisee will have the responsibility to fully implement the operating and marketing systems of the Franchisor in their defined area for a specified period of time. The relationship is not generally one of parity.

If it were a relationship of parity, the Franchisee would take on a great deal more responsibility, and of course, liability and risk as well. So the relationship is not one of actual partnership in the legal sense. However, good Franchise systems will generally recognize their Franchisees as Strategic-Partners, meaning they are in a partnership of sorts that is aimed at achieving unified goals, but not one of legal partnership or equity.

The Franchise Fee is the cost of putting the Franchisee into the business of the Franchisor, not as a partner, but as a participant. Costs include:

The development costs of all of the elements of the Franchisor’s system

Training the individual Franchisee to use those system elements and programs
Marketing and advertising to find Candidates
Costs of qualifying Candidates including rejecting many unqualified Candidates
Salaries, travel, & administration, etc.
Legal expenses to draft agreements defining the methods & terms for the Franchisee to participate
The Franchise Fee is the Franchisor’s assessment to cover those costs as well as a reasonable markup. In other words, it’s the entry fee to the point of the completion of the initial training programs.

To the Franchisee it must represent a reasonable fee to allow you to become a part of the existing system, including all of the training programs that are a part of that system, to help you reach your own business goals.

When asked about the Franchise Fee, the Franchisor should have this concept clearly defined in their approach to Franchising. They should recognize that the Franchise Fee should be reflective of the value of entry into a well-developed, comprehensive system for the participant Franchisee. They should also recognize it as the recovery of costs to find, qualifyPsychology Articles, and grant legal rights to participate in that system to the very best Franchisees for the Franchisor’s business.

Source: Free Articles from ArticlesFactory.com


Shake Shack (SHAK) 

Forward for Franchise Money Makers' Readers:

The rising cost of labor is an industry wide issue among restaurant operators.

One of the most successful and rapidly growing restaurant chains, Shake 

Shack, is currently experimenting with a store (at Astor Place in NYC)

that has no cashiers and only accepts credit cards. This article provides

a short video of the store in action, three days after opening, and my

suggestions about some of the unintended consequences of this approach.


      Roger Lipton




Danny Meyer, founder of Shake Shack, is no longer actively involved  in management of this leader within the “fine” casual dining industry.  His cultural influence is no doubt being maintained as one of the restaurant industry’s most progressive voices.

Shake Shack, no doubt anticipating the inevitable material rise in the cost of labor, has just opened a unit at Astor Place in Manhattan which has no cashiers.  You can’t accuse Shake Shack, no doubt channeling its founder, Danny Meyer, of lagging the crowd in terms of anticipating changes within the hospitality industry. Combined with mobile order and pay, about 10 POS “kiosks” allow customers to place orders as well as pay. Cash is not accepted.We took a twenty five second video at 1:00pm today (link below), the third day of operations, panning the store interior. On the viewer’s right is the array of ordering stations. SHAK management is not naive about the need to explain the new system and provide customers as much “training” as necessary, so several employees are circulating among the customers, helping where necessary (including myself). I found the system fairly easy to navigate, and used the chip on my card to pay. The customer then moves to the center of the store, and waits in front of the pass through section where names are called out. Mobile orders presumably are handled over the same counter. There is a drink and condiment station, left of center, where customers can set themselves up as they wait for their orders. There is a modest amount of seating as the camera pans to the left, indicating that the Company feels that most orders will be taken off premises. 

I will briefly discuss my reaction after you have viewed the video below:


The business model is “a-changin”. Danny Meyer literally wrote the book in dining hospitality, “Setting The Table”.  His fine dining restaurants have distinguished themselves from this standpoint and he is appropriately viewed as one of the long time greats in the industry. At Union Square Hospitality Corporation, his elimination of tipping two years ago was his effort to equalize compensation between the back of the house and front, and this (I call it “unresolved”) experiment has continued to this day. USHC, however, is privately held, and the operating margins (which we suspect have suffered) don’t come under the  line by line scrutiny of analysts and investors. Shake Shack (SHAK), publicly held, must bow to the needs, and demands of the publicly held constituents. Growth rates, and operating margins, have to be maintained or valuation will suffer. We can’t prove it, obviously, but SHAK (if still private) might not be moving quite so aggressively in eliminating cashiers (which includes a significant personal “touch”) and going to a production based model.

FROM THE CUSTOMER’S STANDPOINT: SHAK will not lose its cult-like status any time soon. We don’t expect volumes to suffer substantially with this new approach, however: at the end of the day, it’s (mostly) a burger, fries, and shakes, preferred by many, but not by all. Lot’s of Californians  think In and Out is the ultimate, some prefer the fresh cut fries at Five Guys, and the burgers at Schnipper’s here in NYC are pretty good if there is not a Shake Shack nearby. I believe that what has distinguished Shake Shack, as much as anything else, as been the hospitality quotient. Their staff has been a cut above the big three burger chains, just as been the case at Starbucks. Credit the influence of founders, Howard Shultz and Danny Meyer. Cutting to the chase: the absence of cashiers is not going to gain customers, and could cost some.

FROM THE EMPLOYEES’ STANDPOINT: Shake Shack is no doubt going to try to maintain the hospitality experience, as best they can, but eliminating cashiers is not an upgrade. There are lots of young people who correctly view a job at SHAK (or Starbucks) as a stepping stone in the retail/hospitality industry. They get an on-the-job education and get paid (modestly) at the same time. I’ve written about the Starbucks barista who told me “working at Starbucks makes me a better person” and I suspect that there are more than a few Shake Shack crew who feel that way as well. The new business model increases the value of “production” rather than customer contact, so it is going to be a lot less satisfying for that young person who really loves to interact with people, but is now just pumping out product.

Bottom Line: No Cash, and No Cashiers, may be progressive, even necessary, but will likely have unintended consequences, for  employees, customers & shareholders.

Read Roger Lipton 



Three Signs a Franchisor needs to consult a Franchise Lawyer


Franchisee discontent can also morph into litigation. Franchisees can sue franchisors for a variety of reasons, such as non-disclosed operating costs and for opening too many franchises in a geographic area

Three signs a franchisor needs to consult a franchise lawyer

 By Harold Kestenbaum

Franchisor liability is often based on agency relationships, and vicarious liability is a form of liability without fault. This means that a person injured at a franchise location can file an action against the franchisor as well as the franchisee. For example, A Wisconsin Arby’s franchisee hired a work release inmate who walked off the job and shot his ex-girlfriend and her fiancé at a Wal-Mart. The women lived, but her fiancé was killed. The franchisor and franchisee were sued for negligence in hiring and supervising its employed work release inmate. Ultimately, the court decided that Arby’s had little control over the hiring of the employee and could not be held vicariously liable. Being sued under the principle of vicarious liability due to franchisees’ wrongful acts is just one example of when a franchisor would need to consult with a franchise attorney for an effective defense. A recent joint employer decision from the National Labor Relations Board (NLRB) will have an impact on vicarious liability. If the decision goes into effect, franchisors will have a responsibility and a standard for hiring and human resources decisions.

Franchisee discontent can also morph into litigation. Franchisees can sue franchisors for a variety of reasons, such as non-disclosed operating costs and for opening too many franchises in a geographic area. In a 2007 Muffin Break case, the franchisor set up a franchise to operate its muffin shop in a shopping center and gave the franchisee financial performance projections. The projections failed to come true, and the franchisor was sued by the franchisee. The franchisor was ordered to pay more than $300,000 plus interest on a loan. 

About the author: Harold Kestenbaum is a member of the Franchise Growth Solutions "outsourced consultants" https://franchisegrowthsolutions.com/meet-the-team/               

HAROLD L. KESTENBAUM is a lawyer who has specialized in franchise law and other matters relating to franchising since 1977. From May 1982 until September 1986, Harold served as franchise and general counsel to Sbarro, Inc., the national franchisor of more than 1,000 family-style Italian restaurants and, was a director from March 1985 to December 2006. From September 1983 to October 1989, he served as president and chairman of the board of FranchiseIt Corporation, the first publicly traded company specializing in providing business franchise marketing and consulting services and equity financing to emerging franchise companies, which he co-founded. Harold has authored the first book dedicated to the entrepreneur who wants to franchise his/her business, called So You Want To Franchise Your Business. It is a step-by-step guide to what a businessperson needs to know and do to properly roll out a franchise program. Harold’s book is available at major book stores and on Amazon.com or you can click here for more info on his book So You Want to Franchise Your Business.  Contact Harold at:  info@frangrow.com


To Invest in a Qualified Business Plan is a Fundamental Strategy


Your Business Plan is your “road map” of your enterprise and shows you where you want to go. It is to become your check list to follow up, the same way an orderly routined pilot does before taking off.

To Invest in a Qualified Business Plan is a Fundamental Strategy                 By: Elsa Hedenberg

Before you start reading any arguments about why you should have a super professional Business Plan for your new venture, you might as well first take a look at those lean statistics.

* Only 400 out of 40.000 new ventures are funded by Venture Capitalists (VCs).
* Only about 4.000 ideas reach the pre-business plan stage.
* Only 400 entrepreneurs have available some kind of business plan.
* Only 40 out of them receive some funding by business angels or any other sources.

Statistics also tell us that there is more money looking for good projects than vice versa. Why then is it so difficult to raise money?

It is all about investing on a qualified Business Plan. 
This is a methodical first step that leads to the anticipated Fundings.

Your Business Plan is your “road map” of your enterprise and shows you where you want to go. It is to become your checking list to follow up, the same way an orderly routined pilot does, before taking off his plane.
As Henry Kissinger remarkably said: “If you do not know where you are going, every road will get you nowhere

Why let Professionals Prepare A Business Plan for you?

  • They have the skills to detect the investors’ preferences.
  • Have the experience to eliminate mistakes.
  • Define and focus your objectives.
  • Can uncover overlooks and weaknesses in your planning process. This will help you to build up an overview of your business idea. They also prepare you to give a thought to the potential investor’s unexpected questions.
  • Guide you to avoid common mistakes.
  • Create a meaningful content which is expected by professional investors who recognize generic phrases, created from business plan software. They compile for you a convincing content that covers from hard to find market research to articulating the value of your message.
  • They free up your valuable time. Instead of collecting material, gathering market research, writing creating drafts and revising, it would be better used working on your business.

Professionals model your business:

  • They teach you how to both create and communicate true value to potential customers, suppliers, employees and even investors.
  • They formulate a start up strategy which will minimize the capital needed to launch your company.
  • You have only one chance with many investors. They help you make it count and stand out.

Who qualifies for Venture Capital today?
Ask yourself the hard question if you have what it takes to turn your vision to reality. Your business idea, as good as it may be, will mean nothing if it is not backed up by your entrepreneurial skills. For Venture Capitalists are like winning horse track gamblers, they bet on the jockey not on the horse.


Author Bio
Elsa Hedenberg has an extensive experience in consumer products marketing and has a degree in consumer’s psychology. Has published business articles in business magazines, in Swedish and English.

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Next Life Phase - Starting a Business After Ending a Career


Making Lemonade: Starting a Business After Ending A Career
By: Liz Sumner, M.A., CPC
What do you do when the money tree starts sprouting lemons? 

It's increasingly common these days to find middle-aged, mid-level managers suddenly faced with huge shifts of circumstance. Down-sizing, bubble-bursting, plant-closing, and consolidating are just some of the forces creating a class of sudden solo-preneurs.

At 50-something you face particularly difficult job-hunting challenges. Your salary range is high. Your network is decent after so many years, but jobs at your level are few. You've been there, done that, and thought you were finished with all that new trick-learning.

A big upset like job loss can provide a shift of perspective - an opportunity to take stock. What is really important? What do you want to pursue at this point in your life? Is being your own boss the way to go?

I spoke with several silverbacks to share their wisdom gleaned from these life changes with a new member of the pack.

Dean turned 50 in January of 2005. In May he was fired from his position as marketing director of a high-tech firm. He's angry at the ease with which an employer could let him go.

"Control is a big issue for me. Do I really want to have someone tell what, where, and how? It seems like I work a lot but don't reap the benefits. If I were on my own I'd have all the benefits and all the risks."

Dean is deciding whether to find another job with the security of a regular paycheck and benefits, or start his own business. He finds information on the internet helpful but wishes there was a Big Brother-like program pairing people and businesses to help him sort through the options.

Carl was 51 when the ordinance plant where he was safety manager closed its doors.

"I had a lot of friends in the business. I could have easily picked up another job but I would have had to relocate halfway across the country. I didn't want to do that."

Bob was an engineer whose position was eliminated after 23 years with the firm. This sent him into a deep depression that lasted for months.
"I couldn't even drive."

With the help of his psychiatrist, Bob recognized what was most important in his life-his wife, his son, and his lifelong hobby, bird-watching.

"My doctor told me to go bird-watching every day. While out there on the wetlands I had a vision. I couldn't go back to the corporate life."

It takes a lot of stamina and belief in yourself to move ahead with plans for a business. Carl spoke of his state of mind at the time:

"I wasn't frightened. I'm a survivor. I screwed up when I was younger- went bankrupt, lost a lot of material things. One good thing about failing is that it gets you over that fear of failure. You learn from your mistakes."

Both men did a lot of research, internal and external. Bob determined that he loved birds, kids, nature, education, photography, and the environment. Anything he pursued needed to involve those. Once he was clear on the essentials the how-to landed in Bob's lap.

"I saw an ad in a magazine to call for franchise information. My mind immediately took off with the possibilities. I began looking at retail spaces thinking 'I wonder how that location would work?' I saw the ad on a Saturday. That Tuesday I called the company. On Thursday I had the package and on the following Tuesday they had it back."

Carl was taking his time, looking at options. His values included a love of people and a desire to create a positive environment.
His plans started with casual conversation.
"My buddies owned this building. There had been a restaurant there years ago but it had been mismanaged. And somehow the idea of starting another one came up. At first we were clowning around, yucking it up over a few beers, but then we started getting more serious.

Bob made use of the infant, but still helpful internet of 1995. Carl used lower tech methods to estimate his market.

I spent 15 days from 4:00 am to 11:00 am counting cars at that intersection. I figured if we could get a big enough percentage of them to stop we'd be in business.

Bob used a book called, The Insider's Guide to Franchising [Webster, B. 1986 Amacom, New York] to help him review his offer. Carl was mentored by a successful friend in the restaurant business who helped him think things through. They developed their business plans and opened their doors.

The first year was tough for both businesses. Miscalculations and errors sent both owners reeling.

At first Carl knew nothing about preparing and serving food.

"The restaurant was overstaffed and overpaid. I felt held hostage by the people who worked for me. Things were pretty shaky there for awhile. Some days I wondered if we could open the doors."

Bob got overwhelmed with paperwork and screwed up his accounting records.

"Plus I went crazy at Vendormart. I bought four times as much inventory as I should have. Nowadays the franchise pairs successful stores and newbies so that doesn't happen, but those safeguards weren't in place back then."

In September Bob's store will celebrate its tenth anniversary. It has been recognized three times among the Top 30 Most-Improved stores. In February and June of this year his store was number 2 out of 320 in overall sales.

Carl was advised that he'd know if the restaurant would make it within four years. It was clear after three that they'd be fine. Today after seven years they're looking to expand.

"We're not getting rich but we're self-supporting, and the relationships are priceless."

What advice do they have in hindsight for Dean and others like him?

Bob says, "Find what you love and create your opportunity. Be willing to change-be retooled. Don't get stuck in a rut. And you gotta have another source of income when you're starting."

Carl adds, "We grossly underestimated the working capital we'd need. And if I had it to do over I'd own the building. There are improvements I'd like to make but I'm restricted by the landlord."

So back to Dean, who's looking at buying an existing restaurant business, if he doesn't decide to return to marketing.  Where do you want to be in a year? What will you say when I check back with you?
"I made the right choice. I'm doing exactly what I should and I'm excited about it.

Author Bio
Liz Sumner, M.A., CPC, of Find Your Way Coaching specializes in mid-life reassessment. Are you happy with your direction? Do you feel good about yourself? Are you fearless? Joyful? Energized? You could be. Visit www.findyourwaycoaching.com or call 603-876-3956 for more information.

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Branding - What's in a Name?

names branding.jpeg

What's In A Name? The Six Essential Elements You Need To Know
By: Susan Friedmann

Selecting a name for your new business is not easy. A name does more than identify your company. It tells customers who you are, what you do, and more than a little about how you do it. Your name differentiates you from your peers, peaks customer interest, and invites further investigation -- if you do it right.
I didn't do it right. At least, not at first.
All entrepreneurs make mistakes, and I made one of my first ones right off the bat. Thrilled with the fledgling business I was starting, this precious enterprise so near and dear to my heart, I christened my company Diadem Communications. Diadem means crown-- a fitting name for what I felt was a
crowning achievement.
What does Diadem say to you? Does it evoke thoughts of me coming into your company, training your sales team to be the best booth staff ever, ensuring that every single trade show you attend turns out to be amazingly successful? Does it make me sound so good that you just can't wait to hire me?
No. It doesn't say that to me either. And even worse, it didn't say that to any of my potential customers. Going by name alone, no one would be able to determine the least bit of information about me, my company, or the services we offer. The name said nothing, and it did nothing for me.
The name had to go. More importantly, it had to be replaced by something effective. How do you come up with an effective name? Consider these six elements:
An Effective Name:
1. Tells Who You Are: Your name should reflect your identity. This is an essential aspect of branding. You'll be promoting this name, getting it in front of as many eyes as possible as often as possible. How do you want the public to think of you?
For some, that means integrating your personal name into the name of your business. This is very common in some professions: legal, medical, and accounting leap to mind. 
Others prefer a more descriptive name. One successful small baker runs her business under the name "The Cookie Lady" because that's how her first customers identified her. It's doubtful that most of the customers even know her first name (It's Pat) but everybody in her market knows "The Cookie Lady".
2. Tells What You Do: It's incredible how many company names give little, if any indication of what type of work the organization actually does. Take the following examples:

Smith and Sons
Hulbert Brothers
Only One

Can you tell me what any of these companies does? Of course you can't. They're relying on customers already knowing who they are (a tricky proposition for new businesses!) or by having their name found in 'context', such as a yellow pages or on-line business directory. 
3. Tells How You Do It: Words are very powerful. By carefully selecting what words you use in your name, you can convey a great deal about your company's image. Consider the names of three different massage and bodywork centers:

Champlain Valley Therapeutic Massage
Clouds Above Massage
Speedy Spa

All three companies are providing the same service: massage therapy. Yet the first appears to favor a more medical approach, the second, a dreamy, luxury approach, and the third focuses on fast service.
4. Differentiates You From Your Peers: Your company name is the first opportunity to tell customers how you differ from the competition. This can be done by emphasizing what makes you unique, pinpointing what aspect of your products and services can't be found anywhere else -- or that you do better than anyone else. 
Consider the massage therapy example we looked at in number three. Each organization clearly has a different focus and approach to their customer base. They're attracting different types of clients, who are seeking fundamentally different approaches. All of which is conveyed in less than five words.
5. Peaks Customer Interest: Creating customer interest is an art and a science. Think carefully about your target audience. What qualities of your services are of the greatest import to your customers? What kind of words are likely to appeal to them? 
Emphasize the important qualities in your name. For example, busy homeowners are drawn to the inherent promise of speed offered by "Bob's Instant Plumbing" while a reader in search of a good mystery will gravitate toward "Crime Pays Books".
Word choice is also important. Two yarn shops can both specialize in specialty fibers, but the one who labels themselves "All Hemp All the Time" will draw in a decidedly different crowd than the one named "Natural Beauty: Organic Yarns".
6. Invites Further Investigation: Customers are funny creatures. What one group finds to be funny and engaging turns another group off. You want your name to be inviting and approachable -- as those qualities are perceived by your target audience. 
The best example of this may be seen in the individual investor segment of the financial services industry. Charles Schwab has spent years cultivating a classic, formal image -- but now that the consumer base is changing from 'old people with money' to 'everyone with a 401K', Charles Schwab has launched the "Talk to Chuck" campaign in an effort to be more approachable.
Make sure your name doesn't intimidate customers away! Some industries are more formal than others, but adopt pretension at your peril.
After following a series of simple step-by-step instructions to match my corporate identity with my service offering, I came up with the quintessential name: The Trade Show Coach. This name instantly tells customers what I do - assist companies with trade shows - and a little of the manner in which I do it - coach, rather than dictate, direct, guide, or organize. 
See the difference? So did the buying public, some of who quickly became my best customers. The same thing can happen for you -- if you pick the right name.

Author Bio
Written by Susan A. Friedmann,CSP, The Tradeshow Coach, Lake Placid, NY, author: "Meeting & Event Planning for Dummies," working with companies to improve their meeting and event success through coaching, consulting and training.  For a free copy of "10 Common Mistakes Exhibitors Make", e-mail: article4@thetradeshowcoach.com; website: www.thetradeshowcoach.com

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Understanding the Personal Guaranty in the Franchise Agreement


By Ed Teixeira Chief Operating Officer at Franchise Grade.com 

An important obligation in a franchise agreement is the personal guaranty. Although this provision will be cited in the Franchise Disclosure Document it may not get the attention of other items. Prospective franchisees should fully understand the obligations that the personal guarantee reason why franchisors require this covenant and what the implications are in the event the franchisee has problems. When performing franchisor due diligence, keep this factor in mind. 

Virtually every franchisor requires that its franchisees be individually responsible for and guarantee all contractual commitments, including the financial obligations, made by the corporate entity owning and operating the franchise. 

Obtaining personal guarantees from individuals is a common practice for lenders, creditors and landlords. Banks that lend money to a franchisee will require the owner to personally guarantee repayment of the loan. Landlords leasing space to franchises, almost always require the personal guarantee of the franchise owner. 

A personal guaranty provides the franchisor, with additional security in the form of the assets of the guarantor, the franchisee. Otherwise, the franchisor could be chasing corporate entities with virtually no assets. 

Most personal guaranty provisions in the franchise agreement enable the franchisor to immediately proceed against the individual guarantor (franchisee) rather than the corporation operating the franchise. This is because the individual franchisee is usually required to waive the right to require the franchisor to proceed first against the franchisee's corporate entity. 

The personal guaranty provision is contained in the Franchise Agreement and will include an exhibit of the agreement the individual must sign.  

Most franchisors require that the spouse of the individual franchisee execute the guaranty obligation. This allows the franchisor to pursue those assets held jointly in the marriage, such as bank accounts, investments, personal property and real estate. 

Since franchises are typically granted to individuals, who usually establish a corporation for liability or tax reasons, a franchisor views the operation of the franchise resting with an individual rather than a corporation. The franchisor uses the personal guaranty to protect its trade secrets, enforce non-competes and recover monies owed by the franchisee. Without this tool the franchisor would most likely pursue a shell corporation with few assets. 

Ed Teixeira Chief Operating Officer at Franchise Grade.com 


How Critical is Harassment Prevention Training

From the SymbianceHR Newsletter.

 Your Challenges. Our Solutions. A Successful Relationship

Your Challenges. Our Solutions. A Successful Relationship


If you have watched or heard any of the attest news highlights in recent weeks, the topic of sexual harassment is popping up all over the country and across industries. Increased education and awareness of the behaviors and conduct that lead to violations of employee’s rights in the workplace have and will continue to lead to an increase in complaints and litigation. Ignorance in this arena is not bliss, and your failure as a manager, supervisor or business owner in what your obligations are to protect your workforce will not excuse you in court.


You must take proactive steps to educate your leadership on the laws and regulations they must adhere to and follow to protect your employment practices. Employers need to take steps to prohibit, prevent, and protect employees from all forms of harassment. Let us also not forget the critical training needed to ensure no one in the organization is retaliated against for raising their concerns to management.

When you think about harassment, do not limit yourself to sexual quid pro quo harassment. Instead recognize there can be workplace bullying that could fall into the category of harassment, sexual harassment by peers, vendors, customers, etc., and there is the recognized topic of a hostile work environment that reveals itself as harassment based on a protected characteristic.


Building a culture and workplace environment that is harassment free should be not only a goal of the business, but a strategy to attract and retain the best employees. Regular and periodic training is important to support the goals of your harassment prevention programs, and appropriate open-door policies and two-way communication empower the success of these initiatives.

Take this topic seriously regardless of how small or large your business is. The financial risk and exposure to the community and the customers and clients you serve can be destroyed overnight if you fail to manage your employment practices effectively.

For more information on this topic please call or visit:                                                SymbianceHR | 888-343-7340 | info@symbiancehr.net | www.symbiancehr.net

Find Out If Franchising Is Suitable For Your Business



November 10th, 2017 · No Comments

Franchise Your Business: www.franchisegrowthsolutions.com

A business ‘partnership’ in which one party permits the other ‘partners’ to replicate a proven business system, operating under a common brand, in return for initial and on-going fees. It allows a third party to legally copy your business in exchange for an upfront payment and on-going management services fees.

Is Franchising suitable for your Business
By Daniel Kidd

A business ‘partnership’ in which one party permits the other ‘partners’ to replicate a proven business system, operating under a common brand, in return for initial and on-going fees.

It allows a third party to legally copy your business in exchange for an upfront payment and on-going management services fees.

To franchise a business you need the following factors

• Sufficient development capital to establish a franchise system
• High enough margins to share
• Existing business network or ‘pilots’
• Easily transferable knowledge
• Identifiable brand or trademark
• Expansion requires investment into property, equipment and staff

The Benefits

• Franchise fees will generate a stream of capital income and ongoing revenue
• A loss of profit margin will be offset by much larger overall revenues
• Motivated franchisees ‘running their own businesses’ will generate higher per unit income than employees

What can be franchised?

• Very diverse range of businesses
• Proven business systems capable of replication
• Profitable businesses financially viable for both parties and financially secure
• Steady or growing demand for your products or services
• Simple business formats that are easy to learn
• Identifiable brands and trademarks with your own distinctive image or concept

Undertake a SWOT Analysis of your brand

Trading History

• How long have you been in business?
• What is proven?

Profit Margins

• Are these above average industry benchmark?
• Is there enough margin for two?


• How big is your market?
• How volatile is your market?
• Does it have mass appeal?


• Is there consumer acceptance of your product?
• Is your product or service easy to sell and deliver?
• Quality record?


• Is your Intellectual Property protected?
• Is there a unique and distinguishable marketing approach?
• What is your reputation in the market place

Business Management

• Do you have the management skills and capacity to create a new culture?
• Is your business professional and well presented?
• Is your management financially skilled?
• Do you have well documented processes and systems in use?
• How is Information Technology used in your business?
• What is your attitude to risk?
• Is there a commitment to research and development?

Franchise Opportunity

• Do you have sufficient access to development capital to fund growth?
• Are there similar franchises already on the market?
• Will the franchisee be able to control their costs?
• What will be the minimum term?

Reasons for failure

• Growing too fast too soon
• Franchising for the wrong reasons
• Lack of planning
• Selecting the wrong franchisees
• Lack of infrastructure and support
• Failure to take proper advice

Review your SWOT

Do you have the key criteria you need to franchise

• Developed systems of operation and staffing
• Defined image and clear market position
• Proven and successful business model
• Sustainable market and source of ongoing clients
• Easily duplicated management systems
• Profitability for both parties
• Mutual respect and support – partnership
• Will your operating experience and culture allow you to develop a franchise operation?
• Are your products or services suitable for franchising?
• Is your Brand sufficiently well developed and strong enough to deliver a worthwhile advantage to a franchisee?
• Is your financial position strong enough to support a franchise network?
• Is your business system provenFind Article, robust and capable of being learned by a franchisee?

Daniel Kidd writes about a range for business and franchising topics. For more information please visit Coach Franchise.
End of Article

Franchise Your Business: www.franchisegrowthsolutions.com

An Introduction to Franchising

Four tips to starting a successful franchise

By Cambridge Who’s Who Lifetime Member and Contributing Author Harold Kestenbaum


My name is Harold Kestenbaum, and I am a franchise attorney. Many of you may want some information about what a franchise attorney does. I realize that franchising is not a well-known sector of the legal profession unless you work in the industry as either a franchisor or a franchisee. Here is how I became involved in franchise law.

In 1977, at my third job out of law school, I worked for a solo practitioner in Manhattan who represented many corporate clients, some of whom were publicly traded. One company happened to find the opportunity to franchise their business. One day my boss said to me, “Kestenbaum, I need you to learn about franchising opportunities, so that you can handle our franchise client.” Not knowing what in the world he was talking about (I had done everything but franchise law up until then) I found every book I could on business franchising information (there was no Internet in 1977) and for the next four years I immersed myself in franchise law. When New York State passed a new franchise registration law in 1981, I decided that it was time for me to become a solo franchise attorney and resigned my position. I have been practicing franchise law ever since.

Based on my years of franchise experience, I wrote a book, So, You Want to Franchise Your Business, that delves into the opportunity a company embarks on the franchise path. It includes the dos and the don’ts of how to franchise your business. In my book, my co-author, Adina Genn, and I discuss what makes a company have the right opportunity for franchising and how to go about turning a successful business into a franchise company. Here are a few key tips from my book:

  1. Have a successful model. It is impossible to create a franchise program without having at least one successful operation, a pilot, if you will. It is not feasible to think that if your core business loses money and is unsuccessful, that a franchisee will be any different. It is imperative that your franchisees be successful, otherwise franchising opportunities will not work.
  2. Make sure your business model is replicable. You must be able to build clones of your operation, otherwise, the system will not work. Have you ever seen a McDonald’s without the infamous golden arches? That is just one example, but it goes beyond the look. It is the method of operation that must be duplicated in order to have the opportunity to franchise.
  3. Attain capital for your franchise. You must have capital in order to roll out the franchise program. You cannot believe that franchising will cure your cash flow issues, you need to have money in order to roll out the program. Do not view the program as a way to fund an undercapitalized business model.
  4. Prove your model works! The concept that you are trying to franchise must be lucrative. You must demonstrate that your concept works before you try to offer it to the public as a franchise. If the business model is a failure, your franchisees will inevitably fail as well. Franchising can be a wonderful business opportunity, but your initial model must work first, otherwise franchising will not be possible.

Why franchise your business? That is a very good question. But to those of us in the business, the answer is quite obvious. If you want the oppertunity to grow your business beyond one or two stores, and you cannot afford to build more units at, for example, $500,000 each, then what better way to grow than to let a franchisee buy a franchise and build the unit himself or herself for that amount, and you simply receive the weekly royalty of 5% or 6% of gross revenues? Franchising is a vehicle for growth using the capital and human resources of someone else (the franchisee). How great is that? It is simple, yet complex. The franchising relationship goes much deeper than building the unit and collecting royalties. It is a starting place for companies that want to grow but do not have the internal capital or human resources, like Starbucks, to do it by themselves.


Legendary Philadelphia Hoagie brand now ready for East Coast Franchise expansion.

Lee's new logo with r.png

By: PRWeb 

Legendary Philadelphia Hoagie brand now ready for East Coast franchise expansion

"Lee’s has had to limit their expansion to the Delaware Valley. But now, with the help of Liscio’s Bakery, Lee’s is able to share their award-winning hoagies and cheese steaks beyond their original home, the “City of Brotherly Love.”

Philadelphia , PA (PRWEB) September 06, 2017

Lee’s Hoagie House has been serving up authentic hoagies and cheese steaks since 1953. So much so that when it comes to serving their legendary sandwiches, they have three generations of bread experience. However, up until very recently and due to “the bread issue,” Lee’s has had to limit their expansion to the Delaware Valley. But now, with the help of Liscio’s Bakery, Lee’s is able to share their award-winning hoagies and cheese steaks beyond their original home, the “City of Brotherly Love.”

Through a par-bake technique and onsite baking, Lee’s Hoagie House can now expand anywhere without the fear of giving up the traditional taste of Philadelphia. Lee’s Hoagie House CEO, Allan Lewin states “The Lee’s hoagie roll is one of the keys to our success and great tasting sandwiches, therefore we will not compromise on the bread.”

Lewin went on to say, “The bread is fully-proofed, flash-frozen and then shipped to our stores. Each store has a special oven called a CombiTherm which injects both steam and dry heat while the bread is baking. This method produces that unique hoagie roll that has made the Lee’s brand famous in Philadelphia for over six decades.”

“The unique par-baked bread allows Lee’s Hoagie House to carry their bread and make their authentic Philadelphia hoagies and cheese steaks anywhere in the country. We are happy to provide Lee’s Hoagie House with their special bread,” said James Liscio, owner Liscio’s bakery

It took modern technology, dedication and experience to create an “Old School” product that can now be enjoyed everywhere. Lee’s Hoagie House can expand without giving up the quality and authenticity of their Philly Hoagie roll.

About Lee’s Hoagie House
Created in 1953 in a tiny storefront at 19th and Cheltenham Avenue in Philadelphia’s Mt. Airy neighborhood, Lee’s Hoagie House is known for its award winning, authentic hoagies and cheese steaks. Starting in 1977, Lee’s offered licenses to independent operators and grew throughout the Philadelphia area. In 2014, Lee’s Hoagie House began franchising and has now grown to 18 locations in 3 states, 4 franchises and 14 licenses.

For More Information Contact: gary(at)frangrow.com

For the original version on PRWeb visit: http://www.prweb.com/releases/2017/09/prweb14659520.htm 

What Financials Should go into a Franchise Disclosure Document?

If you are a new franchise company, it may be wise to refrain from including financial performance information in your FDD. Some companies choose to include their corporate performance information, but there is a danger that this information could be misleading to a franchise prospect.



What Financials Should Go in a Franchise Disclosure Document?
By Harold Kestenbaum

If you’re still wondering, “What is a franchise disclosure document?” — buckle up. This legal document, delineates nearly every aspect of your franchise organization and its operation. Not only will you have to file the FDD as part of your franchise legal documents with various states, potential franchisees will review it before signing on with your plan.

Though you have a thousand little details to finalize before getting your FDD drawn up, you’re faced with one significant decision — whether to include company financial performance information. It’s something of a sticky situation, as there are problems both with divulging too much and not revealing anything at all.

The FDD must follow a prescribed format, which includes several “Items” that must contain specific information. In the Franchise Disclosure Document Item 19, companies have the option to disclose their corporate or franchisees’ financial performance from the previous year. There are many expectations as to how this information will be presented, based on law and industry standards.

Figures should be presented as average or median values, to show a range of outcomes.
It’s safer to include the average income of all franchises, not just the top performers, which you cannot do.
If averages include only top performers, this must be plainly delineated.
Performance data must be clearly labeled as reflecting gross profit or net profit.
If both corporate and franchise data must be included, they must be listed separately and cannot be averaged together.
The Item 19 must include a date range.
Some company executives wonder about the benefits and drawbacks of offering prospects financial performance information. After all, these individuals haven’t even signed on yet for a franchise. However, including financial performance information can move the dial on a franchise sale.

Here are three considerations when deciding whether and how to include financial performance information.

Include information that offers accurate context

If you are a new franchise company, it may be wise to refrain from including financial performance information in your FDD. Some companies choose to include their corporate performance information, but there is a danger that this information could be misleading to a franchise prospect. Corporate locations can perform much differently than franchise locations, especially in a new franchise system. However, if the corporate earnings are particularly impressive and you feel they present a good marker for potential franchisees, go ahead and include them.

Understand it and be ready to defend it

Financial performance information sometimes is extensive, while other times it is fairly condensed. Some companies include year-over-year earnings, while others opt to present the information on a quarterly basis. Perhaps the numbers are averages or medians. Do they include top performers or all performers? You must include both. You must decide the best way to present the data. It’s also critical to understand your charts, tables and numbers, and how to answer questions and defend your calculations. Having an Item 19 you can’t explain to a prospect could be worse than not having any Item 19 at all.

Item 19s can help your prospect get funded

Since the recent economic recession, many more FDD’s include financial performance information. As lenders have grown more restrictive, there is a greater onus on franchisee hopefuls to prove up the potential of their proposal. Loan officers look to the FDD to support the risk of lending to the franchisee prospect.

Additionally, lenders and prospects alike have become more sophisticated regarding the franchise industry, and the marketplace has more competition than ever. For these reasons, franchise companies are under more pressure than ever to prove that their offering provides a worthwhile return on investment.

If you need help in understanding, “What is a franchise?” or in crafting a Franchise Disclosure Document, call my office at (516) 745-0099. I can help your company craft its franchise legal documents and offer advice about Franchise Disclosure Document Item 19 development. Or, send us a message for a FREE consultation!
If you own a successful business and you’re interested in franchising it, contact us info@frangrow.com

Roger Lipton reviews Chicken Salad Chick

CHICKEN SALAD CHICK – Comfort Food and a Great Corporate Culture

July 20th, 2017 · No Comments


Roger Lipton’s introduction, for Franchise Growth Solutions readers of Chicken Salad Chick.

CSC is a really special emerging fast casual restaurant franchising company. Their corporate culture is special and the unit level economics are among the best in the industry. The most important decision a potential restaurant franchisee will every make will be the Company they choose to affiliate with. The best local operator, with the wrong franchisor, will be a very unhappy experience over a very long time. Chicken Salad Chick seems to be making a lot of great decisions for a company at their stage, so they are worthy of consideration, especially for restaurant operators in the Southeastern US.

By Roger Lipton

CHICKEN SALAD CHICK – Comfort Food and a Great Corporate Culture

Chicken Salad Chick was started in Auburn, Alabama, in 2008, by Stacy Brown, a stay at home mom and self-proclaimed connoisseur of chicken salad who began the business by selling Chicken Salad made from her home kitchen. When she was shuttered by the local health department for selling food from her home kitchen, she was joined a partner and future husband, Kevin, who left a career in software sales to help build the foundation for multiple corporate locations and future franchise growth.

In terms of equity ownership, in early 2015, Eagle Merchant Partners, an Atlanta, GA based private equity firm, purchased the majority ownership of the Company. Kevin Brown, tragically, succumbed to colon cancer in 2015 at the age of 40. Before his death, however, Kevin was instrumental in negotiation of the P/E transaction, and he also helped establish the Chicken Salad Chick Foundation, which raises funds for cancer research and feeding the hungry. In conjunction with that transaction, Russ Umphenour and Scott Deviney become Chairman, and President/CEO respectively. Both are highly respected industry veterans, as Mr. Umphenour was the CEO of Focus Brands (parent of Moe’s, Auntie Anne’s Pretzels, and others), and before that ran RTM Restaurant Group, the Arby’s franchisee that he founded. Mr. Deviney was CEO of SDZ (a multi-unit Wendy’s franchisee) and SVP with SunTrust Bank, specializing in the restaurant industry. Over the last two years, the management team has obviously been broadened further to support the ongoing rapid growth. Stacy Brown, the cultural creator of Chicken Salad Chick remains a prominent spokesperson and brand voice, as well as a shareholder.

Originally a drive-thru and takeout only operation, the menu was expanded and sit-down facilities were added as additional stores opened. With franchise operations beginning in 2012, 29 units were open by the end of 2014, with contracts for an additional 114 locations. The comfortable family oriented decor is combined with a creative and modestly priced menu, featuring over a dozen varieties of made from scratch chicken salad plus pimento cheese and egg salad, as well as fresh sides, salads, soups and sandwiches. The primary meal special called The Chick includes a scoop or sandwich of chicken salad with a choice of a fresh side, salad, soup or another scoop of chicken salad, egg salad or pimento cheese. All meals are accompanied by a pickle spear, wheat crackers, a selection of breads for sandwiches and a small cookie. The menu also offers chicken salad BLT and turkey club sandwiches, though over 95% of sales come from chicken salad, which is also sold in large and small grab’n go containers called Quick Chick. Upwards of 70 percent of guests are women and the chain prides itself on being “chick friendly”.

Chicken Salad Chick ended calendar 2016 with 64 locations operating (55 franchised and 9 company operated. 18 franchised locations and 2 company stores opened in 2016. At the end of 2014, there were 32 stores in the system, so growth has been dramatic over the last two years. There are currently 70 locations (58 franchised, 12 company), in nine states (ALA, GA, FLA, NC, SC, TN, MS, LA, TX,). It is expected that 20 to 25 locations will have opened in 2017, 6 of them being company operated. It has so far not been necessary to advertise for franchisees, as the curb appeal of the physical unit combined with the menu and employee culture, as well as attractive unit level economics have generated more than adequate franchise interest.

According to the most recent (2015) Franchise Disclosure Document: The stores are about 2600 square feet in size, generally located in strip malls, costing from $403-583,000 in total to establish, including up front franchise fees. Much of the franchise appeal is the operational simplicity which in turn generates attractive unit level economics. The equipment package is basic, with a steamer to cook the chicken (everything is prepared daily in the restaurant), food processors, refrigerated sandwich tables, a walk-in cooler, reach-in freezer, water filtration system, toaster and Quick Chick refrigerated case. The absence of fryers (which must be vented) reduces construction costs, creates site flexibility as well as relative desirability as a tenant. The entire package of furniture and fixtures cost around $90, 000. The up front franchise fee is $50,000/unit, the ongoing royalty is 5% of sales with an additional advertising contribution of 1.5%. Average volume of company operated stores was $903,000 in 2015, growing by about 9% in 2016 and 16% so far in 2017. The sales improvement is especially impressive within a restaurant industry that has been challenged in this regard. Cost of Goods Sold has averaged about 30.5% with fully loaded labor at roughly 25.0%. It is noteworthy that only about 45% of sales are dine-in, the balance being takeout and catering. Dine-in and takeout sales combine to provide a ticket average of $14.27. Stores are open from 10am to 6-8pm (depending on the market) and closed on Sundays, taking a page out of Chick Fil A’s playbook, and allowing operating management to “have a day for family life”. While CSC makes no unit level profitability claims, our analysis indicates that franchises are likely earning at least 15% EBITDA (after royalties) at the store level. With sales now running over $1,000,000 per unit, that would generate a “cash on cash” return on the $403-583,000 initial investment of 26% to 37%, among the best returns in the franchised food industry. We emphasize: that is our analysis, not their claim.

Chicken Salad Chick seems to “be on a roll”, with no obvious impediments to substantial further growth. While still relatively small, with only 70 units system-wide, franchisees are “voting with their pocketbooks”, and opening stores at a rapid rate. The concept seems “defensible” in terms of product line differentiation, combined with an employee “culture” reflecting the “chick” founder, but an operational simplicity that allows for fairly rapid growth. We look forward to following this Company’s future development.
About Roger Lipton, Roger is an investment professional with over 4 decades of experience specializing in chain restaurants and retailers, as well as macro-economic and monetary developments. After earning a BSME from R.P.I. and an MBA from Harvard, he began following the restaurant industry as well as the gold mining industry. While he originally followed companies such as Church’s Fried Chicken, Morrison’s Cafeterias and others, over the years he invested in companies such as Panera Bread and shorted companies such as Boston Chicken (as described in Chain Leader Magazine to the left) .


He also invested in gold mining stocks and studied the work of Harry Browne, the world famous author and economist, who predicted the 2000% move in the price of gold in the 1970s. Roger has republished the world famous first book of Harry Browne, and offers it free with each subscription to this website. In the late 1970s, Roger left Wall Street to build and operate a chain of 15 Arthur Treacher’s Fish & Chips stores in Canada. In 1980 he returned to New York, and for the next 13 years worked at Ladenburg, Thalmann & Co., Inc. where he managed the Lipton Research Division, specializing (naturally) in the restaurant industry. While at Ladenburg he sponsored an annual Restaurant Conference for investment professionals, with keynote speakers that included Norman Brinker, Dave Thomas, Jim Collins(Sizzler & KFC), Jim Patterson (Long John Silver’s), Allan Karp (KarpReilly) and Ted Levitt (legendary HBS marketing professor). Roger formed his own firm, Lipton Financial Services, Inc. in 1993, to invest in restaurant and retail companies. During the last several years, while continuing to follow the restaurants and retail industries, he has returned to his study of precious metals, and expects gold and silver to appreciate substantially as a result of uncontrolled worldwide deficit spending and paper money creation.

The Bottom Line: Roger Lipton is uniquely equipped as an investor, analyst, investment banker and advisor. He has advised institutional investors, underwritten public offerings, counseled on merger transactions and served on Board(s) of Directors, public and private, and personally managed a successful investment partnership specializing in restaurants/retail. He has studied great success stories over the last 40 years, from McDonalds to Shake Shack. Even more important he has watched scores of companies stumble and sometimes fail. It is this insight that Roger brings to this website. His post, dated 9/30/15, called “VISIT THE GRAVEYARD…..” lists a long list (though only a sample) of companies that have come and gone over the length of Roger’s investment career. This platform is his way of maintaining a dialogue with other professionals in the field, improving his own investment results, at the same time enhancing capital returns for operators and investors alike.

Visit: http://www.liptonfinancialservices.com/

Whatever You're Thinking, Think Bigger!

I have learned to be a big believer in visualization and affirmations, and over the years I have proved to myself that whatever I think is possible becomes possible. But I have also learned that it can become a limit. Rarely do I exceed my goals, rather, I achieve them. And that’s why I love today’s quote.


You’re Thinking, Think Bigger
By Mike Brooks

You’ve probably heard the expression that “Life is a self-fulfilling prophesy.” Nowhere is that more immediately apparent than in the world of commission sales. As you look around the company or industry you work in, I’ll bet it’s true that some reps, the top producers, are making two, three or even four times more than other reps selling the exact same product or service? Have you ever asked yourself why that is?

I sure did. My moment of clarity came one day when I grew sick and tired of being sick and tired. I had just lost a big sale, and suddenly I didn’t have spending money for the weekend. As I looked around at the top three producers, I saw their expensive suites, and I saw their nice cars in the parking lot. They were selling the same thing I was, but my results were totally different. I wondered what I was doing wrong.

At that moment, I made a commitment that day to do whatever I had to do to succeed. Within 90 days I went from one of the bottom producers to the top out of 25 reps. As soon as I was handed the biggest paycheck I had ever earned, I went back to my desk and wondered just what the limit on my income could be at that job. Looking at what others had been earning for over a year, I set a new goal of income for myself – a big one.

By the end of that year, I had reached that goal. As I lay on a lounge chair in Maui, Hi (a bonus from the company!), I set an even bigger goal for income in that next year. By the end of that year, I hit it again! The following year, I had bigger income goals, but I knew I needed more opportunity, so I left that company and became a vice president of sales with a new firm. I hit my goal again. Suddenly life became very open to me.

I have learned to be a big believer in visualization and affirmations, and over the years I have proved to myself that whatever I think is possible becomes possible. But I have also learned that it can become a limit. Rarely do I exceed my goals, rather, I achieve them. And that’s why I love today’s quote. I read something similar once that has become my new mantra:

“Imagine better than the best you know.”

What I love about this quote is that whenever I finish goal setting for the year or the quarter, or the month, I ask myself: what would happen if I imagined even better? What would be even more exciting and fulfilling? What would my life be like if I accomplished something more?

And once I go beyond what I think is possible, I look for evidence of someone else achieving it. I always find examples of people or organizations who have higher goals than I do, and this always inspires me to dream bigger.

I do believe life is a self-fulfilling prophesy, and this leads me to another quote I think often about: “Most people don’t set goals to high and miss, they set them too low and hit.”

So today, I constantly challenge myself to ask “what if?” This helps me raise the limits of what I think are possible, and this allows me to keep hitting bigger and better goals.

Now granted, there are other variables at play. One of the most important is, of course, skill and technique level. Top producers consistently practice better selling habits and better sales techniques. But you can learn and practice these, too. They tend to work harder, but, again, you can do that.

They put in the time, energy and money required to perfect their craft. But the good news for everyone else, is that these techniques and habits can be learned by anyone willing to put in the same time and effort.

Years ago, I heard a sales trainer say that the great thing about sales, especially commission sales, is that you are the boss. Think about it: the company you work for pays all the bills – they pay the phone, office space, pay the support staff, get the leads, etc. All you have to do is determine the amount of money you want to make. The great thing about sales is if you want to get a raise, then you can give yourself one – close more sales.

After I applied myself and mastered the craft of sales, in other words, put in the time to learn how to make a connection, build rapport, qualify leads, handle objections and stalls, etc., I realized that there was another component to sales: the mental part. What I realized is that what separated me from big dollar producers wasn’t my skill set any longer, but rather, what I expected of myself.

Someone once said that the world (and sales) is like a vast ocean: some people go to it with a teaspoon, others a cup, and others a dump truck. How much you take out of the ocean is determined by the container you take to it. It’s the same in sales. What’s the difference between someone making a million dollar a year in commissions and someone making $5,000 a year? Their expectation level.

Think about it: If you were to take a million dollar producer from one company and put him or her in another, how do you think they would do? First, they would make sure a million dollars in commissions was possible in that job or industry, and then they would generate it. But the same is true with the $5,000 producer. Put that person in the same job or industry, and they’ll average about $5,000 in commissions. I’m sure you’ve seen this happen…

What I’ve found to be true in sales – and in life – is that you get what you expect. And the true way to get more – sales, commissions, income – is to believe it’s possible, and then truly expect it.

Copyright (c) 2017 Mr. Inside Sales

Mike is the go-to inside sales trainer and phone script writer in the industry. He is hired by business owners to implement proven sales processes that help them immediately scale and grow Multi-Million Dollar Inside Sales Teams. If you’re looking to catapult your sales, or create a sales team that actually makes their monthly revenues, then learn how by visiting: http://www.MrInsideSales.com

Article Source: http://EzineArticles.com/expert/Mike_Brooks/49855


Thinking Bigger means Thinking your business should be a franchise. Visit www.frangrow.com