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Global Central American franchising The biggest markets in this emerging region Franchise From the U.S. to globalfranchisemagazine.com Canada and back again How to capitalize on cross-border developments MASTER, REGIONAL AND INTERNATIONAL FRANCHISING INTRODUCING PROPELLED BRANDS: Franchisor of FASTSIGNS and NerdsToGo
5 AREAS OF OPPORTUNITY TO EMERGE FROM THE PANDEMIC
7 WAYS TO PROPERTY STRENGTHEN FRANCHISE FRANCHISING RELATIONSHIPS Your essential guide to hotels, real estate, and flexible workspaces
PAGE SCOTT PAGE JACKIE PAGE BETTE 21 GREENBERG 56 LOBDELL 88 FETTER Closing the franchisee Making international Tackling the master performance gap development pain-free franchising model GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 2 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 3 CONTENts HIGHLIGHTS
Mary Aldred Central Five areas of on Australian American opportunity to 16 franchising 48 focus 58 come from the The CEO of the A comprehensive pandemic Australian Franchise Association report of the leading markets in How COVID-hit franchisors can is hopeful about 2021’s potential this understated region emerge strong
FRANCHISE OPPORTUNITIES 78 SUMMA FRANCHISE 33 PROPERTY CONSULTANTS FRANCHISING SPECIAL Your 2021 global franchise business A cover-all guide to this capital-rich 30 HELEN DORON forecast sector EDUCATIONAL GROUP More than a business. A way of life 84 FRANSCAPE 40 THE CHANGING FACE OF THE Invest in technology to bolster your brand OFFICE SPACE FRANCHISE 42 PROPERTYGUYS.COM Julian Chambers examines the A new and better way to sell real estate workspace industry of 2021 86 OFFICE EVOLUTION 54 SLIM CHICKENS Flex space taking flight in 2021 44 FRANCHISING FROM THE U.S. From Fayetteville, Arkansas to London TO CANADA – AND BACK AGAIN 87 METAL SUPERMARKETS How franchisors can make the most of 61 FLANNELJAX’S A business as solid as steel these leading markets Extreme. Social. Fun! 56 MAKING INTERNATIONAL 90 FRANFUND 62 FASTSIGNS EXPANSION PAIN-FREE Franchise funding strategies for Beginning 2021 stronger than ever Jackie Lobdell helps to avoid sustained success common pitfalls 64 CHAIIWALA Living to serve the community ADVICE, FEATURES, 68 LESSONS LEARNED FROM INSIGHT EXPORTING OVERSEAS 70 CAMILE THAI KITCHEN Steve Scully reflects on the challenges The fastest-growing Thai brand in the U.K. of going global and Ireland 10 OPENINGS AND EXPANSIONS The latest goings-on in the world of 72 STRENGTHENING YOUR 76 TRIB3 international franchising SUPPLY CHAIN Forget what you think you know about Thomas Kremer stresses the boutique fitness importance of this timely topic 18 SEVEN WAYS TO MAINTAIN STRONG RELATIONSHIPS 80 FRANCHISING 2.0 Dr. John P. Hayes outlines how Adam Hannath talks boosting your franchisors can embrace change brand’s technological side
21 CLOSING THE FRANCHISEE 88 CHOOSING THE RIGHT PERFORMANCE GAP MASTER FRANCHISEE Scott Greenberg identifies three areas for Bette Fetter picks out the key virtues of franchisee improvement a perfect candidate
92 ZORFORUM: A CIRCLE OF 25 HOW TECH CAN KEEP CULTURE TRUST FOR FRANCHISORS HEALTHY ACROSS BORDERS Graham Chapman details this Michael O’Driscoll doubles down on invaluable networking tool tech support 97 INTERVIEW: CHRIS 28 STRATEGICALLY REDESIGN MCCUISTON, GOLDFISH YOUR INTERNATIONAL SWIM SCHOOL FRANCHISE “At Goldfish, we pride ourselves 28 Patricia Perry shares some invaluable on articulating a clear and cross-border tips focused strategy”
4 GLOBAL FRANCHISE | ISSUE 5.6 UPFRONT hether I like it or not, W the topic of technological advancement is demanding an increasingly prominent role in the curation of this publication. When forward-planning issue themes and 25 subjects — which we use as anchor points to base the content of the entire issue around — the magazine you’re reading wasn’t going to originally tackle the rise in digital and its impact on our working lives. How things change. When liaising with our roster of franchise experts who contributed articles to this title, advancements in technology and how certain digital tools and software can be embedded with great success into the “inexorable shirt towards tech” as part of infrastructure of many organizations was a his property franchising report. It appears consistently pitched theme. Working remotely that even a sector that specializes in good ol’ and embracing a suite of new digital tools into dependable brick-and-mortar isn’t immune our lives has become commonplace now — the to advancements in technology impacting print date of this issue marks a year since methods of working and investment, either. the World Health Organization declared the coronavirus outbreak a “public health emergency To your success, of international concern”, soon making working from home a reality to many of us — and oodles James Fell of businesses and adapted impeccably. Yet we’re Editor, Global Franchise still obsessed with the idea of bettering the [email protected] technologies at our disposal. Key pieces written by seasoned franchise @globalfranmag experts on the subject can be found on p.25 Global Franchise and p.80, while on p.36, Kieran McLoone writes Global Global Franchise that the real estate sector is also seeing an Franchise Magazine
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Global Central American franchising The biggest markets in this emerging region Richard Davies 44 (0)1323 471291 | [email protected] James Fell | [email protected] Franchise From the U.S. to globalfranchisemagazine.com Canada and back again How to capitalize on cross-border developments MASTER, REGIONAL AND INTERNATIONAL FRANCHISING INTRODUCING PROPELLED BRANDS: SENIOR ACCOUNT MANAGERS DEPUTY EDITOR Franchisor of FASTSIGNS and NerdsToGo Luke Elliott 44 (0)1323 471291 | [email protected] Kieran McLoone | [email protected] 5 AREAS OF OPPORTUNITY TO EMERGE FROM THE PANDEMIC Matthew Gilley 44 (0)1323 471291 | [email protected] Millie Hall 44 (0)1323 471291 | [email protected] DESIGNERS Luke Rogers & Adam Barford Published by D.C. Thomson & Co. 7 WAYS TO PROPERTY STRENGTHEN FRANCHISE FRANCHISING Rachael Wenham 44 (0) 1323 471291 | [email protected] Ltd, 185 Fleet St, Holborn, London RELATIONSHIPS Your essential guide to hotels, real estate, and flexible workspaces CREDIT CONTROL Sue Carr 44 (0)1206 505903 PAGE SCOTT PAGE JACKIE PAGE BETTE EC4A 2HS. 21 GREENBERG 56 LOBDELL 88 FETTER Closing the franchisee Making international Tackling the master performance gap development pain-free franchising model Printed in England PUBLISHER Matthew Tudor
ISSN 1744-6988 © Aceville Publications Ltd 06 EXPERT
9 771744 698037 ADVICE 3 FEATURES OF WEALTHY FRANCHISEES Common traits of the top performers What I CHANGED MY CAREER PATH Meet 29-year-old mum of one Georgina Burman ESSENTIAL LEADERSHIP Franchise SKILLS £3.99 | VOLUME 16 ISSUE 6 what-franchise.com 10 ways to energise your team Disclaimer: Limitations of Global Franchise Content: the Global Franchise Content (including any information we publish regarding Third Party Products) is only for your general information and entertainment purposes and is not intended to address your particular requirements. In particular, the Global Franchise Content, including UGC and any other content provided by third parties and distributed by Global Franchise Website, does not constitute any form of advice, recommendation, representation, endorsement or arrangement by Global Franchise. It is not intended to be and should not be relied upon by users in making (or refraining from making) any specific investment, purchase, sale or other decisions. Appropriate independent advice should be obtained before making any POWERBRANDS CLEANING & such decision, such as from a qualified financial adviser. Any agreements, transactions or other arrangements made between you and any third party named on (or linked to from) Global Franchise RESTORATION FRANCHISES 5-page special Website are at your own responsibility and entered into at your own risk. Any information that you receive via Global Franchise Website, whether or not it is classified as “real time”, may have stopped LITTLE PAIN, being current by the time it reaches you. It is not intended to be and should not be relied upon by users in making (or refraining from making) any specific investment, purchase, sale or other decisions. POSITIVITY, CAESARS PASSION Appropriate independent advice should be obtained before making any such decision, such as from a qualified financial adviser. Any agreements, transactions or other arrangements made between you SEEKS AREA DEVELOPERS What franchisors look for AROUND THE WORLD in would-be franchisees and any third party named on (or linked to from) Global Franchise website are at your own responsibility and entered into at your own risk. Any information that you receive via Global Franchise Website,
PAGE PAGE PAGE INSPIRING THE BE YOUR SURVIVING THE 14 NEXT GENERATION 60 OWN BOSS 98 STORM whether or not it is classified as “real time”, may have stopped being current by the time it reaches you. The views and opinions expressed in Global Franchise magazine are those of the author(s) and do Award winning education 7 steps to finding the British Franchise Association opportunity launches in UK right franchise vows to be industry anchor not necessarily reflect the views and opinions of Global Franchise magazine or staff. GLOBALFRANCHISEMAGAZINE.COM 5 UPFRONT Facts, figures and trends from the world of franchising
IN THIS ISSUE: Closing the franchisee 21 performance gap Scott Greenberg identifies three areas where franchisees can improve – and how franchisors can help
18 Maintain strong franchise relationships Dr. John P. Hayes shares seven essential tips for people-first networks
The guide 56 to master franchising Jackie Lobdell delivers a masterclass on going global with your brand
Property 58 Five areas of 33 franchising opportunity special to come from We dive deep on why hotels, real estate, the pandemic and workspaces make for bankable Richard Beese looks for the silver franchise investments linings that franchises can utilize
6 GLOBALFRANCHISE | ISSUE 5.6 Franchising around the world
Many see the U.S. as the world’s primary franchise market; while this may be the case, it’s important not to neglect the several surrounding countries and the opportunity that can be found within. In this issue, we look at the appeal of heading into the Great White North, as well as why Central America should be your next target market.
P.44 CANADA & U.S Making the most of leading market THE GLOBAL “In the last 10 or so years, what we’re finding is that FRANCHISE more franchisors are not going the master route PODCAST and instead considering multi-unit franchising” - Edward (Ned) Levitt, CFE, Dickinson A new year means a whole host Wright LLP of exciting new podcast guests, and we kicked off 2021 by speaking with P.49 MEXICO Natalie Brennan, general manager Central America’s franchising gateway of Aussie-based cafe concept Muffin “Something of an outlier within the Central Break, about how the pandemic American market, Mexico’s franchise industry inspired a new delivery direction for is predominantly made up of domestic brands, this breakfast brand. at around 86 per cent. Of the remaining share, around seven per cent consists of concepts that originate from the U.S.” To listen to this episode of the Global Franchise Podcast, as well P.52 COSTA RICA as all of our upcoming conversations Central America’s second-largest market with franchising professionals, “San Jose’s solid infrastructure means that many make sure to visit international flights come and go from the city; globalfranchisemagazine.com/podcast strengthening the country’s global presence”
Build a successful franchise by investing in property
Despite the pandemic-induced shakeup of the hotel industry, hospitality and property still remain a lucrative business for the right kind of franchisee. Five areas of Whether you’re interested in a rewarding career in real opportunity estate or the fiery world of flexible workspaces, there’s to come from something for everyone in this dynamic sector. Find the pandemic out more in our sector special, starting on page 33. Richard Beese looks for the silver linings that franchises can utilize
GLOBALFRANCHISEMAGAZINE.COM 7 U.K. SMES OPTIMISTIC ABOUT 2021
ranchising is the global network provides a sense 54 per cent of SMEs in the perfect avenue for of security that going it alone U.K. and Ireland, for example, F wannabe owners simply can’t guarantee. are optimistic that economic of SMEs to get into And despite the turbulent conditions will improve in the business for themselves, but not times for small businesses next 12 months, according to a by themselves. This has been in the past 12 months, SMEs report from business consultancy especially true in the past year, throughout the U.K. are now Vistage, with 71 per cent of with the pandemic highlighting bouncing back and looking respondents expecting their exactly why being part of a ahead to greener pastures. sales revenues to rise in 2021.
Majority of workers prefer ‘new normal’
When the coronavirus pandemic first gripped the world, our Has your franchise incorporated remote working into its day-to-day lives were thrown into an unfamiliar state to say the operations? If so, you may want to reconsider a sudden return to least. Remote working became the norm internationally, and pre-pandemic methods, and opt for a more flexible approach. the idea of a standard nine-to-five faded into a distant past. As it turns out, almost one year since national lockdowns began, our ability to adapt to massive changes has persevered once again. In fact, 57 per cent of workers do not want to go back to a normal way of working, according to a report by consulting firm Theta Global Advisors. Further, over a third of workers say that working in a traditional office will negatively impact both their mental health, as well as their productivity.
GEN-Z TAKING OVER THE BUSINESS WORLD
As could perhaps be expected, the impact that COVID-19 has had on regular employment has led to countless entrepreneurs to look to owning their own business or joining a franchise network; allured by the appeal of working for yourself, and guaranteeing your own financial future. In fact, this trend is now skewing younger than ever, with one-in-seven young people classified as Gen-Z (aged between 18-24 years old) planning to start their own business in 2021. This figure comes as a result of a survey commissioned by business consultancy Mushroombiz, and if all respondents were to carry out their plans, it would result in around 800,000 brand-new Gen-Z businesses just this year. Now more than ever, the importance of showcasing why your franchise provides a valuable career opportunity to strong-minded entrepreneurs is abundantly clear.
6 GLOBALFRANCHISE | ISSUE 5.6 Catch up on essential episodes of The Global Franchise Podcast Start 2021 the right way by listening to our valuable insider tips, straight from the experts’ mouths
“We’re going to open more gyms in the “Our government reacted very fast, next four to five months than in any and very generously” stretch of our organization” We’re always keen to get an international When we spoke with Adam Sedlack, the president of perspective on franchise matters, which is why UFC GYM, it was a breath of fresh air to hear that despite we turned to Kai Enders and Matthias H. Lehner, the troubling state many industries were in following the president and vice chairman of the German Franchise impact of the pandemic, certain franchise brands were Association, respectively, to gauge the climate of still experiencing exponential growth. We’re not out of the one of Europe’s largest franchise markets. What we woods just yet, but episodes like this one really highlight found out, was that because of ongoing government why being part of an established franchise network support, many franchisors were confident they could provides some much-needed security. weather the COVID-19 storm.
“We want to find the right balance “It’s better to be early and wrong between innovation and convenience” than late but right” It’s always interesting to look at a legacy franchise When we spoke with Catherine Monson, brand to understand how they ensure their staying she’d not long been chairwoman of the IFA; a power. We’ve spoken to many of the biggest international role she still balances with her commitments names on the podcast, but few are as ubiquitous as Pizza as CEO and president of international signage Hut, which is why our conversation with Regina Borda, franchise, FASTSIGNS. During our talk, Monson managing director of Pizza Hut Europe and Canada, was highlighted why acting preemptively can save a so insightful. If you want to peek behind the curtain of a brand – something she put into practice before the truly enduring brand, you won’t want to miss this. pandemic turned the industry on its head.
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@globalfranmag Global Franchise Global Franchise Magazine G globalfranchisemagazine.com GLOBALFRANCHISEMAGAZINE.COM 9 NEWS
Global franchising updates The latest highlights, expansions, and goings-on in the world of international franchising
s 2021 gets underway, it’s reassuring to see so enduring success of the franchise model. many international brands continue to develop Here are just a handful of the latest developments; to keep A their concepts both domestically, and also into up-to-date with all of the latest franchising news, head over to entirely new global markets. Not only is this good globalfranchisemagazine.com. for first-time investors, but it highlights the great development work made by long-term entrepreneurs who depend on the
TaxAssist Accountants: Consulting Canada We’ve seen many brands develop into Canada in recent years, and the most promising aspect of these news stories is the sheer variety of industries that incoming franchises originate from. Now, TaxAssist Accountants will bring its white collar offering to Canuck franchisees, courtesy of a partnership with domestic master franchisee, QX Global Group. “We are delighted to have awarded our Canadian master franchise rights to the Club Pilates: Starting internationally known and respected QX Spanish expansion Global Group,” said Karl Sandall, chief The world’s largest Pilates franchise executive director of The TaxAssist Group. will soon become that bit bigger “The team are all highly skilled individuals who with the announcement of 50 new share our passion and vision, which, combined with Club Pilates studios planned for our 25 years’ experience in building and running a Spain across the next decade. The leading franchise network, bodes well for future success.” deal, signed with Horacio Rosentgberg, a Club Pilates “South Korea's economic strength multi- unit franchisee and geographical advantage in Florida, his Barcelona-based greatly appeal to global investors" brother Fernando and a business partner, Gabriel Carl’s Jr.: Making moves past 30 years, we’re thrilled to be Mops, will see in Mexico celebrating the opening of Mexico’s the Xponential CKE Restaurants Holdings, Inc., the 300th restaurant,” said Mike Woida, Fitness-owned franchisor of Carl’s Jr. and Hardee’s president of CKE International. “This concept strengthen restaurants, recently celebrated the milestone moment is only the start, as its European presence. “The challenges 2020 300th Carl’s Jr. opening in Mexico with we plan to bring Carl’s Jr. to even more the launch of a site in Guadalajara, brought about have shown how regions in Mexico and across the world Jalisco. Not content to rest on its laurels, strong our core and resilience at in the months and years to come so the brand is planning to open a further Club Pilates truly is,” said Shaun Grove, 100 locations in the country by 2024. more people can experience and enjoy president of Club Pilates. “This deal in “As a country that has been integral the innovative flavors we’re known and Spain is only the beginning of great things to CKE International’s growth over the loved for.” to come for the brand in 2021.”
10 GLOBAL FRANCHISE | ISSUE 5.6 Hyatt Hotels Corporation: Expanding in Cambodia The Hyatt Regency Phnom Penh recently opened Sotheby’s International Realty: in Cambodia’s capital city, marking the first South Korean conversions Hyatt-branded location in the capital and the Sotheby’s International Realty announced at the beginning second site operating in the country. At 247 of the year that WP Realty, a South Korean real estate brand, rooms, this new venue is also the largest hotel would now operate as Korea Sotheby’s International Realty; from a global brand to open in the bustling city. the global real estate franchise’s first location in the South “We look forward to welcoming business and Korean market. leisure guests to an energizing new space where “South Korea’s economic strength and geographical they can recharge, discover locally-inspired advantage as a peninsular country greatly appeal to global culinary experiences and stay connected investors and luxury buyers,” said Philip White, president during a stress-free travel experience, all and CEO, Sotheby’s International Realty. “The market is delivered with the warm comfort of Cambodian seeing a significant rise in luxury real estate and high-rise hospitality,” said Herman Kemp, general developments, making it a prime location for expansion.” manager, Hyatt Regency Phnom Penh.
Dickey’s Barbecue Pit: Ghost kitchen growth In a move that may become more common as restaurant brands look for non- traditional entry routes to untapped markets, Dickey’s Barbecue Pit will develop its first locations in Singapore through a ghost kitchen partnership with local operator Texas Smoker PTE. LTD. “I came to the United States specifically to visit Dickey’s in 2019 and was impressed with the systems and process in place,” said Marvin Singh, co-owner of Texas Smoker PTE. LTD. “As COVID-19 became very real in Singapore, Jim Perkins reached out to me to further discuss plans, but with the option of a virtual kitchen. Singapore is built for food delivery and I look forward to using this venture to grow into traditional restaurants.”
Wahlburgers: Non-traditional entry Wahlburgers, the burger franchise owned by celebrity Mark Wahlberg and his siblings, has signed an agreement valued Topgolf: Teeing off at $50m with Australian cinema chain in UAE United Cinemas to open 15 Walburgers sites in or next to the chain’s Topgolf recently opened its first cinema locations. location in Dubai, UAE, which marks The first of these is planned for the fifth international country Sydney, with subsequent locations where this golfing entertainment brand scheduled to open in Melbourne’s now operates. The new site, spanning more than Craigieburn, 60,000 square feet and containing over 96 climate- Brisbane’s controlled hitting bays, overlooks the Dubai Indooroopilly, and Marina skyline. Perth’s Rockingham. “The opening of Topgolf Dubai is a great milestone for our To date, Wahlburgers brand as this venue serves as a gateway market, which will has 49 stores open across introduce the Topgolf experience to many new guests from the U.S., two in Canada, and countries across the world,” said Dolf Berle, Topgolf CEO. one in Germany.
GLOBALFRANCHISEMAGAZINE.COM 11 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 12 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 13 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 14 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 15 INSIGHT
2020 resilience creates a strong platform for 2021 franchising growth Following the massive social and business disruption in 2020, franchising in Australia looks poised for solid expansion in 2021
WORDS BY MARY ALDRED
ranchising proved the government intervention to information and resources, and most resilient segment • Reinforcing the need for fairness government advocacy. F of the small to medium in application of operating business sector during rules across sectors, including The need to innovate the impact of the COVID-19 pandemic. highlighting disparity between After pivoting quickly in a When COVID-19 hit, franchised public and private outdoor workers marketplace that transformed businesses were employing almost • Encouraging Federal Treasury almost overnight, franchisors THE AUTHOR 600,000 Australians and contributing and state governments to began looking to the future with Mary Aldred is the more than AUS$184bn to the introduce or continue support for new strategies for customers who CEO of the Franchise national economy. struggling businesses and workers adjusted to the convenience of online Council of Australia The varying business restrictions facing unemployment shopping and delivery services. in place across Australia for most of • Making submissions on FCA members have shared many the year created a tough economic specific issues to various state stories of innovations quickly rolled climate and demanded adaptability, government small business out across franchise networks to determination and innovation by departments on business ensure the ongoing viability of all businesses and franchising restrictions, exemptions, franchise businesses and many of stood out as one of the most robust customer registers and these are now embedded as normal business models. industrial relations functions of their ongoing business. In the past 12 months, the The FCA’s most recent quarterly Franchise Council of Australia (FCA) The core of our advocacy has national survey of franchise has focused on providing practical been a concerted campaign of businesses (conducted by FRANdata advice and assistance to franchisors dialogue with members to test Australia) showed 64 per cent of and franchisees including: government policy and regulatory respondents were optimistic about changes, as well as to provide 2021 as trading conditions continue • Guidance around navigating new input on specific measures to improve. regulations and restrictions requested by members. The 2020 MYOB FCA Excellence • Assistance with accessing Feedback from FCA members, in Franchising Awards provided government support programs corroborated by a high level yet more examples of franchise • Supporting franchises in of member retention and new businesses succeeding in an commercial leasing negotiations memberships, is that they feel they extremely difficult year for small • Providing information to have been supported, listened to business owners. support the well-being of and represented through access The resilience of winners and franchisees and staff The FCA engaged deeply at all levels of government both informally and formally, including: “Interest in entering franchising • Facilitating COVID-safe business recovery by emphasising the has accelerated in recent months specific assistance and regulatory changes needed by diverse as many people seek to establish business sectors • Bringing bad commercial leasing new careers or stable business practices and landlord misconduct to their attention and urging income streams”
16 GLOBAL FRANCHISE | ISSUE 5.6 finalists in the face of adversity, and the continued contributions award recipients have made to their franchise systems and communities speaks volumes for the strength and tenacity of the sector and all those who depend on it for their livelihoods. The support and resources provided to franchisees through franchise networks has more than ever demonstrated the value of belonging to a franchise system and interest in entering franchising has accelerated in recent months as many people seek to establish new careers or stable business income streams. Franchise enquiries are being reported to have almost doubled compared to the previous year, and “A well-qualified in some instances, interest levels are much higher. pool of potential The current market presents a very real opportunity for franchise franchisees are looking systems to access a pipeline of qualified franchise candidates for new opportunities in with access to their own financial resources, who are looking for the a post-COVID economy” structure and support provided by franchising as small business owners. of practical ideas and information them than as part of a strong at the most comprehensive and supportive FCA member How to take your professional development event on franchise network. brand to Australia the FCA's annual calendar. Any franchisor looking to For an international brand looking A feature of NFC is the annual access or expand in Australia to expand to Australia, or grow their Legal Symposium, which provides is well advised to take up FCA footprint here, getting your brand in both franchise executives and membership as a vital tool front of this talent pool at the 2021 the legal profession with vital to gain direct and unfiltered Franchising & Business Opportunities regulatory updates, including any information and understanding Expos is a great way to start. developments with the Franchising of the operating landscape – as The well-established expos – to Code of Conduct, which is the so many franchisors did in 2020. be held across Australia throughout mandatory code governing the While trading conditions remain the year – routinely draw crowds sector in Australia. tough, the strategic value of being of business-ready visitors looking A dedicated international part of a strong franchise network to find out more about becoming a stream connecting international hasn’t gone unnoticed and as we franchisee and make decisions about franchisors to the wealth of move into 2021, a well-qualified the types of businesses and franchise knowledge and networking on pool of potential franchisees are systems that are right for them. offer at NFC21 will aim to assist looking for new opportunities in a For an international franchisor, a overseas brands on their Australian post-COVID economy. broader understanding of Australia’s expansion journey. As long-established sources franchise operating environment The FCA’s first Sustainable of employment have shed staff, is also essential and in the year Food Leadership Forum, open to especially in the hard-hit tourism, ahead, the FCA is determined to get members and non-members looking travel and hospitality sectors, the schedule of program initiatives for leadership, innovation, best many hard working Australians are disrupted by COVID-19 back on track, practice and improved regulatory betting on themselves for the next including the National Franchise understanding of single use chapter of their career. Convention (NFC21), to be held in plastics, food waste and recycling, is Even as the rest of the economy Melbourne in August. scheduled to be held in March. looks uncertain, the demand for Franchising and small business And while there will be franchise businesses in Australia leaders from across Australia more challenges ahead for has boomed as people search are expected to attend NFC21, to small businesses in Australia, to secure a better future for immerse themselves in a program there is no better way to meet themselves and their families.
GLOBALFRANCHISEMAGAZINE.COM 17 INSIGHT
Seven ways to maintain a strong relationship with franchisees How 2020 enabled franchisors to embrace change and support their international franchise networks in the process
WORDS BY DR. JOHN P. HAYES, CFE
f you ask 100 franchising at the Titus Center at make changes also fell into franchisors to list the Palm Beach Atlantic University. place, especially as franchisors I ways the pandemic “What changes has Ray made?” spoke to their franchisees and to changed their Even though I didn’t specifically their advisors, including other relationships with franchisees, know what Ray was doing I franchisors, all of whom were also you’ll get at least several dozen knew one thing for certain: making changes. different answers. But there will be Ray was selling franchises! Many changes almost THE AUTHOR one consistent answer: Change. Because that’s what seasoned instantly became “aha moments”. Dr. John P. Hayes “Change is good; you go first,” franchisors do. With obligations to Franchisors said to themselves: is chair of the Titus wrote the late Tom Felte`1nstein, communities of people including “Why weren’t we doing that Center for Franchising who coached franchisors for many franchisees, suppliers, investors (or doing it that way) all at Palm Beach Atlantic University in West years to help them understand how and employees, franchisors sell along?” Almost every change Palm Beach, Florida to better support and advance the franchises even in a pandemic. strengthened the franchisor- success of their franchise networks. That’s how I answered everyone franchisee relationship, and many It’s human nature to resist who asked about Ray but then I changes saved money. Perhaps change. Before we make changes, decided to host a Zoom franchise most importantly, changes we want time to look at the conference entitled What that obviously benefitted the alternatives and study the Franchisors Can Do Now, featuring franchisees demonstrated the predicted outcomes. We want to Ray and other members of the franchisor’s commitment to the know the pros and cons of change Titus Center Advisory Board. The franchisees and to franchising as a and, of course, any affiliated costs. interest in that conference led to a business strategy. But up against a pandemic, those dozen more conferences, most of By the end of winter 2020, who wait for someone else to them designed to help franchisors franchisors were living in a “new change first already lost. and franchisees succeed in spite of normal” as they continued to sell Franchisors like to win! Some a pandemic. franchises, train and support are better than others, and the While “change” became the franchisees, and provide essential best proved in 2020 that they had byword for success in a pandemic, products and services to the to make changes without waiting it was easy for franchisors to consuming public internationally. to test, to speculate, or to ask too know what to change. How to It wasn’t an overnight success. many questions. Many franchisors changed their plans in a heartbeat, or so it seemed. They changed “By the end of winter 2020, faster than people and companies usually change. And many changed franchisors were living in a “new again and again. During the first several weeks normal” as they continued to sell of the pandemic I often got this question: “What’s Ray doing?” Ray franchises, train and support as in Ray Titus, founder and CEO of United Franchise Group with franchisees, and provide essential 10 franchise brands operating internationally. Ray as in Ray Titus products and services to the who several years ago pledged $1.5m to teach people about consuming public internationally”
18 GLOBAL FRANCHISE | ISSUE 5.6 “Our corporate team provided financial coaching to ensure that our franchisees would have the most essential resources early on”
Businesses, including franchised daily conversations and formal businesses, faltered and failed. Innovation committee recommendations. With few exceptions, revenues fell In spite of Gestring’s At Card My Yard, where Jessica below projections and leadership 2 willingness to be flexible, Stanley is chief marketing officer, teams rejigged their goals while he acknowledged the importance the company uses a Facebook scrambling to meet their financial of finding long-term solutions business page to coach franchisees obligations. Millions of employees for a brand that enjoyed 80 per daily. Mark Dawson, chief operating were furloughed. Even a year after cent dine-in business. In just officer of One Hour Heating & Air it all began there was uncertainty three weeks, his team launched Conditioning, includes coaching in about the future for many franchise systemwide a new curbside monthly Town Hall Meetings and companies. The “new normal” would carryout process and developed launched a monthly call to teach not be normal enough for everyone, a unique QR code to deliver best practices to his network’s but anyone who wanted to survive contactless menus as well as top 10 franchisees. At Homewatch had plenty of opportunities. expand third party delivery Caregivers, Tucker uses franchisees Change led franchisors to partners. “As a result,” he said, “we to provide coaching in a peer- rethink their businesses in 2020 experienced a 155 per cent increase to-peer program created and and in so doing they not only got in digital sales and 16 percent facilitated by the corporate office. ahead of the pandemic but they increase in curbside.” also raised the bar in franchise Staffing up management and operations. Here Collaboration At a time when most are seven ways that franchisors Jennifer Tucker, chief 5 businesses downsized made changes to improve their operating officer at it seemed counter-intuitive to relationships with franchisees. 3 Homewatch Caregivers, recognized add staff, but some franchisors the need to provide a robust Home continued hiring during the Do they walk Care Toolkit to address legal pandemic to demonstrate their the walk? considerations faced by franchisees commitment to franchisees and to 1 In franchising, the “rule of delivering care in homes. Rather stay ahead of their growth. Card My sameness” almost always applies. than create the document Yard benefitted from consumers “This is how we do it,” franchisors internally, her team collaborated celebrating milestones at home and tell franchisees. A brand’s success with a leading law firm to provide simply needed more staff. is built on consistency of quality, this resource to franchisees. Tucker environment, and behaviors. also collaborated with a consultant “All franchisees are treated the to develop a new Virtual Care “We want franchisees same”. Except in a pandemic. Gary Services strategy for franchisees to De Jesus, chief brand officer of implement when an in-home visit to work with our Massage Heights, pointed out that wasn’t possible. flexibility is the most important way At Blaze Pizza, Gestring outside partners to to maintain a strong franchisor- appointed two franchisees to a franchisee relationship. “Many team leading a systemwide pricing provide their expert systems are rigid, which lends study. “We’re not only encouraging to them being less flexible and franchisees to provide feedback,” advice on key decisions” responsive. The ability to listen he explained. “We want franchisees and positively react is important to work with our outside partners to building trust and maintaining a to provide their expert advice on Personalization strong relationship,” he said. key decisions.” Every franchisor starts out Flexibility resulted in 100 per 6 providing “the personal cent royalty abatements for five Coaching touch”. It’s easy to do with a weeks and 50 per cent abatements Scott Redler, chief operating few or even a couple of dozen for another month at Blaze Pizza, 4 officer of Freddy’s Frozen franchisees. But with growth where Rick Gestring is the chief Custard & Steakburgers, uses comes standardization, for restaurant officer. “Our initial business coaches to “discuss example, the rule of sameness. focus was on providing urgently best practices and make Stewart Vernon, chief operating needed financial relief to our recommendations” to each officer of America’s Swimming franchisees. Our corporate team franchisee. But he pointed out Pool Company, insisted there’s no provided financial coaching to that coaching must be “a two-way better way to form partnerships ensure that our franchisees would relationship”. A company must be with franchisees than to focus have the most essential resources willing to receive franchisee input on each franchisee’s growth early on.” and feedback through informal and happiness.
GLOBALFRANCHISEMAGAZINE.COM 19 INSIGHT
In that process, the company “Of everything that’s changed achieved a 600 per cent sales growth by selling healthy products as a result of the pandemic, via their eStore. “These products are only additional sales and not franchise development seems our core business,” he explained, “but a 600 per cent (result) is to be affected most. And in simply incredible.” In some instances, franchisors a good way!” moved to online out of a sense of responsibility and safety. At TBC Corp., franchisor of Midas and At global giant Neighborly, most. And in a good way! Online Big O Tires, Lenny Valentino, vice where Dina Dwyer-Owens was discovery reaches more people president of franchise development, chairwoman, the company offers faster and without the interruption explained: “We have moved our every franchisee a unique program and cost of travel. traditional in-person activities to titled Design Your Life. In what may But franchisors found many video conferencing platforms. Our be the ultimate personal touch, the others ways to “go virtual”. They franchisees have embraced this course teaches franchisees how introduced weekly video updates change as it allows them to remain to live by design not by default. and conducted Franchise Advisory in their stores and service the During the course, franchisees “get Council meetings via Zoom. Tucker customers. We look forward to the clarity about their personal values, at Homewatch CareGivers explained future when we can do a mix of in- understand the six areas of life that early in the pandemic she person and virtual events to get our and how to harmonize those areas introduced weekly webinars but franchise family together." to achieve greater peace, build then gradually decreased the Indeed, every franchisor is looking a dream list and leave with two frequency. However, the company forward to the future with the dreams they’ve converted to targets moved its annual meeting to an pandemic discussed as past tense. with clear and actionable steps. online format and benefitted from Lehner has already planned the And then it’s all about execution; increased participation. “We plan to Bodystreet Brand Festival, an outdoor progress not perfection,” said use this format again,” she said. event comparable, he promises, Dwyer-Owens. Matthias H. Lehner, CEO and to Woodstock (but in Munich, De Jesus at Massage Heights founder of Bodystreet, explained Germany)! Post-pandemic, he said: said he prefers the personal touch his staff worked “day and night” to “we simply have to make our brand, as a way of building relationships transfer their brand from physical the brand values and everything that with franchisees. He said every studios that customers could no belongs to our culture tangible and franchisor should set aside longer visit to the “web and (then experienceable again.” one day a week to speak with into) the living rooms” of customers. But until then, and even then, franchisees. A.J. Titus, president of savvy franchisors will continue to Signarama, frequently reaches out make changes to build and maintain to franchisees via text messages strong relationships with franchisees. as well as phone calls “just to check up with them personally.” At Card My Yard they call themselves “joy bringers” and they look for opportunities to celebrate with their franchisees. Stanley said: “Bringing joy connects us even more with our franchisees”.
Building an online presence 7 After years of insisting that prospective franchisees show up in person at the home office for a day or two of discovery, franchisors discovered something themselves: It wasn’t necessary. In- person discovery days may still be preferred, but every franchisor that hoped to continue selling franchises in the pandemic quickly learned how to recruit using online tools. Of everything that’s changed as a result of the pandemic, franchise development seems to be affected
20 GLOBAL FRANCHISE | ISSUE 5.6 INSIGHT
Closing the franchisee performance gap Three areas in which franchisees can improve – and how franchisors can help
WORDS BY SCOTT GREENBERG
ranchise businesses are lead, and how they serve. These How the franchisee about replication. In human factors are what each THINKS F theory, a hard-working, franchisee brings to their own Franchisees don’t usually look financially qualified operation – things completely in the mirror for answers, but person can adopt proven branding, under their control. often that’s where they lie. Many marketing, and operational A franchisor, however, can’t operate without self-awareness, not tactics, and by serving the right control these factors, any more THE AUTHOR realizing how their thoughts impact demographics, get the same results. than an automobile dealership Franchise expert Scott their business. But this is important, Greenberg is the In practice, that’s not at all what can control how their buyers drive because marketing isn’t just about author of The Wealthy happens. Within every franchise and maintain their car, though advertising; it’s about patience. Franchisee: Game- brand there’s a wide spectrum of these things significantly impact Managing employees isn’t just about Changing Steps to results. Doing the same things in performance. But franchisees directing work; it’s about developing Becoming a Thriving similar conditions, some franchisees can improve in these areas people. And customer service isn’t Franchise Superstar are killing it while others are getting and franchisors can help. This just about facilitating sales; it’s scottgreenberg.com killed. And it’s not just because improvement – on top of hard about making human connections. some work harder, have better work, marketing and other These philosophical differences are locations, or do more marketing. operational necessities, will the difference-makers. Better work A deeper look at top enable any franchisee with a begins with deeper thinking. franchisees, whom I call “wealthy marginally acceptable location to Consider the contrasts in franchisees”, reveals three dramatically boost performance. how wealthy franchisees and areas where they’re particularly Let’s explore what improvement struggling franchisees approach adept: how they think, how they in each of these skills looks like: the same issues:
Factors Impacting Business Wealthy Franchisee Thinking Struggling Franchise Thinking
Owner Attitude Clear, Positive Distorted, Negative
Hiring Builds culture Fills positions
Motivating Employees Lights a fire within them Lights a fire under them
Works harder, Markets more, Bad Economy Worries, Complains, Cuts back Finds new opportunities
Collaborates, Sources, Supply Chain Complains to supplier/ franchisor Monitors inventory
Competition Feels motivated Feels threatened
Trains, Delegates, Prioritizes, Embraces systems Struggles to do too much Time Management for efficiency or too little
Customer Service Creates meaningful experiences Facilitates quick transactions
Change Embraces Resists
Embraces brand practices, Franchise System Doubts, Deviates, Goes rogue Focuses on execution
Collaborates and communicates with franchisor, Resents franchisor, insulates self or Franchise Culture Participates, Assists fellow franchisees connects with other angry franchisees
GLOBALFRANCHISEMAGAZINE.COM 21 INSIGHT
These differences in perspective They’re also better at leading enough. They grumble about the put wealthy franchisees and their teams. They understand that applicant pool. “People these days struggling franchisees miles apart. employees are the lifeblood of are so lazy and entitled,” echoing the And most of what the struggling the business. They do most of the same complaints of the generations franchisee does in these examples work, they have the most facetime of mediocre employers who came is in complete accordance with with customers, and if trained before them. the franchise agreement. There’s well, they allow the business to These franchisees also rush no contractual obligation to be become more of an investment for through training, moving through positive, to work smart, or to the franchisee instead of a job. A instruction way too fast. Wealthy uplift customers emotionally. good use of money should yield franchisees remember that new Nor is there one that requires more money. A good use of time team members are nervous, franchisors to encourage this should yield more time. That’s hesitant and overwhelmed. They approach to business. why wealthy franchisees hire slow, support their mindset as much Franchisees are responsible train slower, and fire fast. They as their skill set. Struggling for their own mindset. build cultures. They know every franchisees don’t consider the Franchisors would be wise to new person will add or take away human side of onboarding staff. devote more time and resources from the team. So, they’re careful They just want employees to absorb helping struggling franchisees about whom they recruit. the instructions and get to work. think like top franchisees. It In addition to patient, selective Consequently, their work suffers. may not be part of the legal hiring, wealthy franchisees Both franchisees know that relationship, but it has everything continuously work to make employees need motivation but to do with performance. employees great and work even approach it quite differently. harder to keep them great. They Wealthy franchisees offer fair pay How the franchisee focus on their development rather and outside incentives, but they also LEADS than just their work. They want create environments that promote Franchisees oversee two things: every employee to become a leader. intrinsic motivation. They appeal systems and people. How they That takes a little more time up to their employees’ inner desire manage both significantly impacts front, but it saves time in the to grow, to feel connected to the business. backend when their employees their team, and to be part of When it comes to systems, work more independently. something that has purpose. wealthy franchisees embrace At the same time, wealthy Struggling franchisees brand standards. They didn’t buy franchisees appreciate that even rely exclusively on a franchise to innovate. They the best employees slip backwards extrinsic motivation. leave the R&D to the franchisor. when they get comfortable, bored, or They’d rather mitigate the risk feel unappreciated. They need their and stick to what’s proven. When fire fed. This isn’t a burden for top they do have ideas (or concerns franchisees. It’s what being a leader about the franchisor’s ideas), they means. It’s the most important bring them to the franchisor and work they do. collaborate to figure out what’s Struggling franchisees best for the entire network. Mostly, see how solid wealthy they just execute and find a way to franchisees’ teams lead within the lines. are and ask the same Struggling franchisees don’t fully misinformed question: buy into the system. They believe “Where do you find such they know better and try to outsmart great people?” They their franchisor. Sometimes they think good hiring is about succeed, but usually not. Ignoring locating a good fishing good advice and doing things their spot. They believe superstar own way weakens the brand and employees are found, having exposes them to more risk. no appreciation for the work I’ve met and interviewed so many top franchisees put into great franchisees over the years. developing them. When it comes to operations, they Struggling franchisees just want don’t do things differently. They do the work to get done. They fill them better. positions with people who are good
“I’ve met and interviewed so many great franchisees over the years. When it comes to operations, they don’t things differently. They do them better”
22 GLOBAL FRANCHISE | ISSUE 5.6 They buy their team lunch and marking are about attracting and perspective is two-dimensional. occasionally give them gift cards. delighting people. When a customer They move through transactions They offer cash incentives. They who can be spending their time robotically. They think it’s enough to tempt them with carrots without and money anywhere on the planet be polite and give customers what understanding the internal drivers comes to them, that’s a big deal. they came for. Their service isn’t that inspire people. So they do more than exchange a necessarily bad; it’s forgettable. Wealthy franchisees better product for money. They work to Nothing about it gets noticed. understand the humanity of their elevate the customer’s emotions. Nothing about it distinguishes the team members. They tap into their Even if they’re just selling an ice experience from the competition’s. feelings, which directly elevates cream, they deliberately seek to Nothing inspires customers to their work. Struggling franchisees make the customer feel just a little spend more, spread the word, or don’t lead well because they’re too bit better. Because what people get come back. busy being busy. matters less than how people feel. You can’t reproduce a meal unless Wealthy franchisees want more you use every ingredient. To enjoy How the franchisee than customers; they want repeat the same level of success as their SERVES customers. They want more than wealthy counterparts, struggling This might be the most tangible people thinking good things; they franchisees need to replicate difference between great franchises want people saying good things. everything about them, beyond the and everyone else. You can see it in Every transaction is a marketing obvious operational elements. Only their business and read it in their opportunity. So wealthy franchisees then will they know the true value online reviews. create memorable experiences of their business. If franchisors are Wealthy franchisees customers love, talk about and serious about helping them, their remember that every want to repeat. support needs to extend to how aspect of the business Struggling franchisees sell franchisees think, lead and serve. revolves around stuff. They’re in the “next in line” That’s their best chance to close the the customer business. They see customers performance gap and becomes a experience. but not people. Their peak performance brand. All offerings, branding, and
THE THREE SUPERPOWERS OF WEALTHY FRANCHISEES 1 How they THINK 2 How they LEAD 3 How they SERVE
GLOBALFRANCHISEMAGAZINE.COM 23 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 24 INSIGHT
How tech can keep your franchise culture healthy across borders Doubling down on useful tech resources can help your organization to become better connected
WORDS BY MICHAEL O’DRISCOLL, CFE
e all know what 2021 be difficult to navigate or Skype to name just a few - they've looks like. We all create robust communication all experienced explosive increases W probably have a good structures and methods. Getting in daily active users. Reports idea about 2022. into the field was always one have stated Teams went from Depending on the country you live of my favorite things to do in a approximately 32 million daily active in, your view will no doubt range franchise company. I look forward users last March 11 to approximately from mild optimism to continued to doing it again. 44 million by March 18. By April it THE AUTHOR frustration – and maybe even Of course, I have also spoken to was 75 million daily active users. Michael O’Driscoll despair. Travel looks to remain franchisors who say it's been okay Workplace has also experienced CFE has been in the limited for at least another 12 to manage through disconnection, exponential growth. One report franchising sector to 18 months, or until there is a as the independent nature states that the messaging platform for 30 years. He has been a CEO, COO widespread application of vaccines. of the way franchise models went to five million paid users up and board director We’re in for a long haul of pandemic work across domestic and from three million in a matter of a of several franchise management and continued remote international borders can mean couple of months. That excludes systems. He is business management. risk is somewhat negated as those that are using its free version. former director of the Travel isn't as easy as it was. business owners and markets Even if you exclude the number of Franchise Council of Some governments are banning can adapt more quickly to their people using multiple applications, Australia and holds an entry. Quarantine makes business particular situation and have the growth in the use of technology MBA in International trips long. Running any company a degree of independence and to stay connected and communicate Franchise Strategy across borders has to be one of resilience. I am curious about is staggering. Now, it is important to the most challenging aspects of how they have managed to stay note that not all these applications leadership right now. Franchise well connected across borders. do the same things. Some are for businesses are ‘high touch’ From these businesses I have very specific purposes and some businesses. As a founder, CEO found out some useful tips about are very rich with functionality or COO, nothing beats meeting staying connected and keeping a and capability. face to face with franchisees, franchise culture on track. I’ve used many of them. My their teams, customers and personal favorites are Teams suppliers. A good franchise The new normal and Workplace. Teams is easy company for me has always Just to confirm how much to activate and is embedded in had a flat hierarchy compared communication has changed, let's Outlook. It’s very simple to book a to other business models. No look at a few numbers. Think of Teams call. Like all applications, it matter their size. I found it the many different communication is a mobile-first solution as well as easy to reach into a network to software applications out there right you can download the app onto your connect with key stakeholders now. Zoom’s story is well known. smartphone or PC. You can have as no one was far away from Explosive revenue growth for them. many callers on a call and record it. one another. High-performing Slack, Workplace from Facebook, Workplace is rich with franchise organizations shouldn’t WhatsApp, Microsoft Teams and functionality, too. Its live broadcast capability, real-time two-way interaction, captioning and “Running any company across borders multilingual functions are fantastic. The number one plus to me is that has to be one of the most challenging it is just so easy to train people to use it. Why? Well, it’s just like aspects of leadership right now” using Facebook, and since so many
GLOBALFRANCHISEMAGAZINE.COM 25 INSIGHT
people these days have at least a new communication methods. connection is a must. Seeking rudimentary understanding of how The transformation was already input from team members across to use Facebook, training people taking place. It's just sped up like borders is an important part of that to use Workplace is just about a rocket which won’t be slowing process. Setting etiquette rules the easiest thing you can do. Both down anytime soon. It certainly will and being open to creating safe of my favorites are inexpensive become more sophisticated. But I ways for people to express their and talk to your other company believe it's here to stay. That’s the views is essential. This can be a applications like your CRM and socialization of business activities challenge in a franchise company as financial applications. Integration and organizational culture. emotions can run high. Remember, is a breeze. Workplace case studies Having a comms plan that works franchisees are heavily vested along have also shown how dramatically on culture is not optional anymore with senior leaders and founders. emails reduce in a business when So, with all this wonderful All these applications have rich they embrace a social approach tech, I have noticed franchise resource centers that can also help to communication using its organizations investing more guide your business to execute your application. I am always happy to in the creation of tangible and communication plan well. spend less time scrolling through thoughtful communication plans Franchises are network my email inbox! to minimize disruption, keep businesses. It is natural that they This didn’t happen overnight company culture on track and behave like a social network. The when the pandemic hit. The use of increase the connectivity of its tech allows it. What franchise these applications was happening people. Engaging a communication leaders need to do is not fear these well before that. What we are specialist to help you embrace and open communication methods witnessing is a pandemic-led be successful at this accelerated and be prepared to engage with acceleration of technology and new world of communication and franchise networks in an open “What we are witnessing is a pandemic-led acceleration of technology and new communication methods”
26 GLOBAL FRANCHISE | ISSUE 5.6 “Even the most techno-phobe something. That human need to connect in person. I look founder or senior executive is forward to them returning but no doubt with a new etiquette now using technology like in place. Admirable efforts are being never before” made to avoid “remote fatigue” as well as early signs of blended in person working and meeting - mode. Embrace all the feedback, happening. Has anyone noticed how where people can meet in person establish protocols for usage and much shorter meetings are now? they will, alongside a large screen use video to help communicate The reality is we are all in a that has remote team members your message and gain feedback. truly long haul to a new world. I joining in. Nothing tells a story better than personally am busting to travel We only use a small fraction of moving pictures! Here’s a tip. Many freely again, domestically and available technology – how many of the applications that exist have internationally. I truly believe of us know or use even a third of the ability to create snap polls and meeting in person for business the features of our smartphones? surveys. If you really want to keep is essential to maintaining good Even the most techno-phobe your finger on the pulse of your working relationships and to keep founder or senior executive is now organization culture, try short polls organizational culture on track. using technology like never before. and surveys to keep up with team Founders and leaders will always This ultimately is a good thing. Use sentiment across borders. Report keep their finger on the culture that technology to stay connected. back to the team on the results and pulse a little better when they are It will be a bit of a haul but it's so what action (if any) you will take in out of their office and travelling easy to stay connected. Let’s not response to the findings. meeting franchisees, their team stop working across borders now. members suppliers and customers. Let’s double down in that tech to Where to from here? I miss a good convention keep us together. We all know, depending on where gathering. I have sat through a few we are in the world, that life isn’t excellent virtual events. They’re going back to normal anytime really good, but is it just me or soon. We will continue with remote does everyone take less notes communication and management now that everything is recorded? across borders. Meetings will However, unfortunately, continue to move from the formal they do lack and to be more informal. Friday night drinks and tailgates are happening regularly. I hope they continue and don’t fall victim to remote meeting fatigue. I love a good informal chat with franchise colleagues all over the world. We have so much in common yet still so much to learn from one another. The insights are gold and I appreciate the willingness to share not only business lessons but personal and life lessons. We need to stay connected more than ever before. I am hearing more about the agile nature of communication plans to sustain healthy organizational cultures. Subtle changes to meeting formats, content, length and meeting breaks are
GLOBALFRANCHISEMAGAZINE.COM 27 INSIGHT
How to strategically redesign your franchise business model for international markets Tips for brands that are looking to make the transition internationally and enter into new markets
WORDS BY PATRICIA PERRY
s many brands are familiar shores and diving into new looking for new international territories. Global opportunities in expansion brings new opportunities A to engage with not only customers, 2021, global franchise expansion is an exciting topic but cultures that can enrich a brand’s of discussion. Edible has made identity through diversity. Global the decision to enter into new expansion allows for true increases in THE AUTHOR international markets, and with that brand market share. Patricia Perry is vice comes the introduction of a new The first step in this process is president of franchise prototype to help the brand seamlessly to conduct thorough research to development for adapt to its new surroundings. determine the best markets of focus. Edible, leading the This decision and redesign process In Edible’s case, after conducting brand's growth efforts preliminary research, the brand chose both nationally and require strategic attention to detail to target the following markets which internationally and personalized support for new franchisees in order to effectively are likely to offer the most promising brand opportunities: Central America, adjust the brand’s identity to the South America, Pakistan, India, China, local palates and preferences of each several areas within the Middle East targeted region. Below are a few tips and the United Kingdom. for brands that are looking to make the The next step is to transition internationally and enter ensure the brand into new markets. has the resource infrastructure plans “It is important to solidified in order to guarantee that new ensure that items are international franchisees will have the support required to launch both representative and in their markets. In addition, market planning is important. The brand relevant to each market needs to decide how they would like to engage with franchisees in each while also remaining true region and what types of stores they would like to see developed. Some to the brand’s identity brands elect a master franchise model, others go with large and values” area developers, form joint ventures or build Going global: the company-owned stores. first steps Once the resource Many U.S.-based franchise brands infrastructure plan is in have a strong foothold in their place and the development model domestic markets, therefore the is selected, the next step is finding next best opportunity to grow and experienced operators with a keen innovate involves looking beyond understanding of the targeted
28 GLOBAL FRANCHISE | ISSUE 5.6 property landscape as well as franchisee’s expertise and taking consumer habits and products unique time to thoroughly research the to the area. These franchisees will help territory are simple ways to begin the PATRICIA'S ADVICE FOR U.S. serve as cultural brand ambassadors menu redesign. Picking ingredients BRANDS LOOKING TO GO GLOBAL while leading the charge in their that are native to the region and My personal advice to others in the industry respective regions. Their valuable incorporating them into the menu is who are navigating the transition of international knowledge of the real estate market, a great way to engage with the culture expansion is to complete your due diligence. business infrastructure, local tastes and gives consumers something This involves having a strategic expansion plan and preferences will help successfully new but familiar, making products in place, finding the right franchisees, allowing for customization so the brand is relevant to guide expansion efforts in the region. approachable. consumers in each country and having proper Once the franchisees have been Also, using consumer and cultural resources in place to adequately support identified, the in-depth market research to understand how locals international franchise expansion. Taking planning occurs. gather and engage with one another these few steps early on in the process will are crucial insights when redeveloping pay off in the long run and ensure that your New location, new store a prototype design. For example, the brand is equipped to make waves in new prototype international growth strategy at Edible international markets. With a new store design and will include two options. The first international expansion in the works option, reserved for large multi-unit production using only ghost kitchens supported by a comes the next step and responsibility franchisees interested in developing robust e-commerce platform. to adapt the brand’s model from both large regions or countries, will include Based on various analyses, our team decided to a building footprint and building a production facility, flagship develop and offer a few store format options for menu perspective. stores in the new design format, and Edible locations internationally. The first prototype In regard to products, it is smaller bespoke locations across style is a marketplace where local products are important to ensure that items are the market. The second option offered in conjunction with our standard menu items. both representative and relevant to will be for experienced franchisees The second design will be a café-style model that each market while also remaining looking to grow in smaller regions. creates an inviting central meeting place for guests true to the brand’s identity and This expansion method will include to enjoy gathering together over a cup of coffee and values. Striking that balance can be some treats. The last development option is the challenging but again leveraging your rollout of several ghost kitchens in a particular region. The overall goal of the redesign is to make our store fronts customizable. We also want to create retail experiences that are inviting and exciting for the locals of each region, so that they feel engaged and connected with our brand.
The importance of tech integration Another key consideration for brands looking to expand is how to efficiently integrate technology. Across the world, e-commerce platforms, delivery apps and networks function in full force and will remain for years to come. With this in mind, the seamless integration of technology into the new store designs and in each country will provide a competitive advantage for the brand and added convenience for customers abroad. Creating regional websites and e-commerce platforms for our brand in international countries is crucial when looking at ways to improve business through the use of tech. One simple alteration to consider is updating and customizing the brand’s internal tech infrastructure to fit the needs of international franchises in order to keep operations moving smoothly. Additional tactics that should be in place ahead of time include ensuring that the website copy in a new language is properly translated, that the third-party delivery process is well structured and that all e-commerce functions adhere to the laws of the territory. With these advancements and updates, brands will be able to succeed in their international launch.
GLOBALFRANCHISEMAGAZINE.COM 29 BEHIND THE BRAND: PARTNER CONTENT
AT A GLANCE HELEN DORON More than EDUCATIONAL GROUP
Established: 1985 Number of franchised outlets: Over 1,100 a business. Locations of units: Albania, Austria, Bosnia and Herzegovina, Bulgaria, Chile, China, Croatia, Cyprus, Czech Republic, Ecuador, Estonia, France, Germany, Hungary, Israel, Italy, Kazakhstan, Lichtenstein, Macedonia, Mexico, A way of life Montenegro, Panama, Peru, Poland, Portugal, Romania, Russia, San Marino, Serbia, Slovakia, Slovenia, South Korea, Spain, Switzerland, Thailand, Turkey, Helen Doron Educational Group shares the secrets to Ukraine, Vietnam Investment range: €150,000 - €250,000 building an enduring, global franchise community Minimum required capital: €200,000 Contact: [email protected] helendorongroup.com
“We’re in our business possibly more than we are in our homes, so we better do what we love”
joining the franchise network, however, investors can replicate the systems that have delighted customers for over three decades. “It takes a long time to build hen franchisees join that they work. Somebody who buys up a business and specifically an the Helen Doron an educational franchise doesn’t educational business until you get Educational Group have to reinvent the wheel. The it right,” says Anne Gordon, vice W president of customer business network, they aren’t just actual business side, the financial signing up with a run-of-the-mill side and the organizational side – development. “You’re looking for franchisor. They’re becoming part of everything’s ready for them with the somebody who can offer you a top an international family of pedagogic Helen Doron Educational Group.” product, because then your time experts and professionals, and For entrepreneurs coming to to market is going to be so much joining a brand based on 35 years of the education space for the first quicker than trying to go on your experience in successful, forward- time, it may seem like one could own. In the case of an educational thinking educational franchising. simply launch a new business franchise such as Helen Doron, we And now, through a new and find success in no time. This have really excellent guidelines on video series of tips and tools for is especially true if you look to a how to run your business and how franchisors and franchisees, the brand like Helen Doron Educational your teachers conduct lessons. We leading education brand is sharing Group for inspiration, but this have very strict ongoing training of the secrets that have allowed it to surface-level approach doesn’t our teachers, and ongoing training build a global community. take into consideration the years programs for the master franchisees “The franchisee and the of development and expertise that and the learning center franchisees franchisor have a very strong and support every single decision that as to how they will run his business important bond,” says Helen Doron, the brand makes. and what is expected of them.” founder and CEO. “They’re helping Because of this, it’s very difficult each other, they’re supporting each for a new investor to emulate the LIFELONG LEARNING other, and they’re giving each other sophistication and maturity of Franchisees coming to Helen Doron ideas. You have unity in the way Helen Doron’s end product. By Educational Group will encounter
30 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - XxxxxxxxxxxHelen Doron Educational Group 31
GLOBALFRANCHISEMAGAZINE.COM GLOBALFRANCHISEMAGAZINE.COM https://youtube.com/ “Someone going into an into an “Someone going important bond” important “The franchisee and “The have the franchisor and strong very a GxR4gkkHzRvgX amounts of passion for this this amounts of passion for should While profit industry. any be a concern for certainly will passion that it’s investment, the make to really an investor allow journey. franchising most of their is doing education franchise about care it because they what’s education, because this is Doron. says heart,” closest to their business possibly in our “We’re homes, so in our are we than more we’re or love we what do better we problem. wellbeing a to have going out reach can not only Franchising places, but in remote to children very a get it can also help children need to love You education. good you what do, want because you world. on this mark your to make created we a slogan that have We were franchisees our what out of than a business. telling us: More of life.” way A video playlist, Talks the full Franchise view To English Global the Helen Doron head to channel at: YouTube playlist?list=PLHllW_2sCNGOprmRjYA_ What this also achieves is a is a What this also achieves become part of a you “When EDUCATION and capability as the drive well As portfolio, own their to expand is looking for Doron Helen that possess huge franchisees over the years and has built and has built years the over money that represents credibility, investment your in terms of to acquire years because it takes and this credibility this reputation continues in the market,” gain that you “Once Bronstein. become part of you and reputation can find you then that franchise, ready really that are customers your on willing to spend money and and services.” products FOR A PASSION information on board when it it when on board information connects to them on a fundamental in turn leads to a which level, of operations. execution superior sense strengthening continually as well As credibility. of brand of justifying the investment this also franchisees, current word-of-mouth organic, achieves leads to increased which marketing inquiries. franchisee that has built a reputation brand Rather than adopting a one- Rather “One of the advantages that that “One of the advantages This positive feedback is echoed is echoed feedback This positive “The franchises we offer are are offer we “The franchises is always focused on the human on the human focused is always This element of the business. take because franchisees works to create tailor-made training for for training tailor-made to create the franchisees.” this training approach, size-fits-all able to build very quick training quick training very able to build that adjust to the reality programs that enables us operations of their training manager. “We know what’s what’s know “We manager. training know We happening out there. going are the franchisees what we’re and sometimes through constantly analyzing the status of the status of analyzing constantly get we the business in the field, so the franchisees,” from information business Bronstein, Diego says to consistent, replicable success. to consistent, replicable program in the training have we are we is that Doron at Helen Educational Group prioritizes prioritizes Educational Group its network; support for ongoing that bringing out the it recognizes path best in its people is a surefire were doing with their lives.” with their doing were network growing the brand’s by Doron as Helen of franchisees, tell us what a wonderful learning learning wonderful a what tell us that and how was, it experience accompanied learning experience they whatever them throughout early twenties often come back and often come back and twenties early All of them are full of fun, and all full of fun, and all All of them are to created especially of them are brain. growing the child’s develop late teens or reach who Students says Doron. “They have their own own their have “They Doron. says with their unique methodology learning unique materials for own full of music. and all of them are Helen Doron Kindergarten, Helen Helen Kindergarten, Doron Helen and MathRiders,” English, Doron opportunities; each of which has has which each of opportunities; and honed over been developed it as to make years of a number as possible. and rewarding effective three potential investment potential investment three GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 32
FRANCHISEE Since we started franchising 3 years ago, we have opened over 35 unique and stunning stores, and are on course to open 50 per year for the next 3 years in the UK. We have multiple stores set to open in North American markets and countries in South East Asia by 2021.
We are actively reviewing suitable partners in Europe, the USA and the Middle East.
We will soon open our first cluster of stores with our Canadian Master Franchise in May this year, and soon after, our first store in South Africa!
Our aim is to be recognised as one of the top casual dining and beverage brands in the UK and globally.
Are you ready to be part of the biggest Chaii brand in the world? For more information please visit our website: www.chaiiwala.co.uk PROPERTY FRANCHISING BUILDING A SUCCESSFUL FRANCHISE: THE ENDURING APPEAL OF INVESTING IN PROPERTY From real estate to hotels to flexible workspaces, the varied and enticing world of property is one that has attracted franchisees for decades. But what does it take to make a name for yourself in this capital-rich segment? We speak with the experts and highlight key trends in this comprehensive sector report
REPORT BY KIERAN MCLOONE
GLOBALFRANCHISEMAGAZINE.COM 33 PROPERTY FRANCHISING
HOTELS: A franchising mainstay for capital-rich investors While certainly not approachable to every kind of entrepreneur, hotel franchising can be a great way to diversify a property portfolio
hile hotels have been will not have,” says Geraldine exceptionally low occupancy around for centuries, Guichardo, global head of research, rates, and in May 2020, it was W the franchise industry hotels and hospitality group, at recorded that occupancy was less only took hold of this JLL, a provider of numerous real than 15 per cent in luxury U.S. hospitality-driven sector in the last estate services. hotels, and around 40 per cent for three or so decades. Back in the “Particularly during COVID-19, economy locations. 1980s, for example, the big hotel having that backing really helps. Because of the volatile nature names would take on significant During the pandemic, a lot of of the industry, hotel franchisors debt to purchase or develop their these brands launched sanitation are becoming increasingly own branded locations. programs where they partnered selective about who they take on A look at the industry today, with major cleaning brands. The as franchisees. The numerous however, reveals that roughly 80 combination of those two entities responsibilities associated with per cent of hotels in the U.S. are really helped to build consumer running a 24-hour, 365-day franchised operations as opposed confidence in staying in a hotel. operation make hotel franchising to independent entities; with the An independent property would much more formidable than likes of Hilton, Marriott, and Choice have to go and do all of that on opening a new gym or cafe, Hotels now opting for more ‘asset their own.” and as such, only lite’ models that see them take on a certain a supportive consultancy role for Help needed for their franchisees. hospitality But why are hotel franchise Before we go any further, it networks continuing to expand, would be remiss to not cover even amidst a pandemic that the unavoidable impact almost seems custom-built to that the ongoing pandemic target their revenue streams? And has had on the hospitality why would independent locations and services industry – decide to partner with a national especially when it comes or international brand? to hotels. “A lot of the hotel franchises According to a report have been established for a number by McKinsey & Company, of years and not only have a robust a specialist on travel, network of trained professionals logistics, and infrastructure, that will help the hotel operator to U.S. hotel revenue per hire and train the right people, but available room will be down they also have a lot of resources by 20 per cent by 2023. This that an independent property is due to factors such as
“If you take care of your people, train them, and pay them well, that will reflect on the service that they give to the consumer”
34 GLOBAL FRANCHISE | ISSUE 5.6 kind of entrepreneur fits the bill. more difficult to break into the same governing brand. Beyond “Not everyone can say they want hotel franchise world compared having best-in-class membership to run a hotel and get a franchise to opening a restaurant or gym, deals and reward systems for from Marriott or Hilton,” explains and franchise agreements in customers, the definitive tool to Guichardo. “They require you to this industry can last 10 to 15 stand ahead of the pack should provide a resume with previous years; it’s a long time to live up come as no surprise: people. hotel experience. That includes to expectations and pay fees for “If you take care of your people, experience in running the kind anybody unprepared.” train them, and pay them well, of hotel in the category that you that will reflect on the service that want to develop; for example, if Stand-out services they give to the consumer,” says you want to run a JW Marriott, you If an entrepreneur decides that Guichardo. “You can stay in a hotel need to have experience running a hotel franchising is the right move in Arkansas and one in Oklahoma, luxury product.” for them, there are still several and even though it's the same Despite the asset lite considerations to be made. First, brand, if the people who service you developments that many big will a conversion work best, or an in Arkansas go above and beyond brands have taken in recent entirely new build-out? and make sure that you feel safe, years, this cautious approach by “It really depends on the have a clean room, and are there the biggest brands is reflected in individual product and the hotel for you – that hotel will stand apart their franchising figures. HVS, a brand itself,” says Guichardo. from the rest.” consulting firm for the hospitality “Let’s say that Hilton wants to Due diligence is crucial, as industry, found that hotel brands launch a new hotel in Costa Rica. always, but one final consideration are less willing to franchise their They need to understand the for investors looking to get into luxury properties (at only 8.6 physical landscape available and this space will be in the details of per cent across Accor, Hilton, whether they can build a new the franchise agreement. If you’re and Marriott), and instead trust hotel. Also, what makes sense locked in for over a decade, you franchisees with midscale (62.6 financially? Conversions can run want to know that the franchisor per cent) and economy (47 per up costs depending on the layout has plans and relief for when cent) locations. of the original space, and so things go south; whether that’s “To be able to operate something sometimes it makes more sense a pandemic, or a random act of that never shuts down and is to do a new build.” God that stops business. This consistently adhering to brand Once this has been determined, a has always been important, but standards takes a lot of effort franchisee will want to distinguish is especially so now that we’ve and experience and work,” says their location from others in the seen what kind of impact a global Guichardo. “I think it’s quite a bit nearby vicinity – even those of the situation can bring. “To be able to operate something that never shuts down and is consistently adhering to brand standards takes a lot of effort and experience and work”
GLOBALFRANCHISEMAGAZINE.COM 35 PROPERTY FRANCHISING
REAL ESTATE: Building a future for savvy franchisees
It may not be a natural choice for some, but real estate franchising is a worthwhile endeavour for the right kind of entrepreneur
nvesting in property franchising market is easyProperty. And in a world where businesses has always been Relaunched by CEO David Brierley from every industry are struggling I considered a financially in January 2020, easyProperty to justify a wholly brick-and- savvy choice, and almost immediately ran into the mortar approach, it’s ironic that history has shown that – for the first U.K. lockdown brought about a brand dealing in property is most part – the buying and selling by the coronavirus pandemic. working on a solution. of homes or commercial space is a Despite this, it continued to attract “We term it 'tech-and-touch',” good way to diversify and bolster investment from franchisees that explains Brierley. “So the 'touch' is your income. saw the potential of the sector, and our licensed agents on the ground Not surprisingly, this has by September, it had expanded to 41 who can make a visit to a property also opened up the real estate locations and announced aggressive and interact with the consumer. The market to franchising. Hundreds expansion plans for the new year. 'tech' allows the consumer to interact of franchise concepts now 24/7, request viewings, book exist around the world to valuations. A lot of the work facilitate property sales, “We've got people that the traditional agent and although the industry is would do over the telephone prone to fluctuations, some who are in business is handled via technology. of the biggest players have Which is what the consumer grown into hugely successful and who see property wants; it's what Amazon does. businesses. You don't talk to anybody at Take the likes of RE/MAX, as an interesting way Amazon, you just order it and for example, which initially it arrives. That's pretty much entered the market in 1973, of earning a living what the consumer wants in and has now developed into all aspects of their lives a household name. And why – and a reasonably these days.” wouldn’t it? At 7,350 offices around the globe populated lucrative one” Be business- by over 110,000 agents, it minded managed to achieve the kind of “We attracted a mix of existing You may anticipate that you’d numbers that emerging franchises highstreet estate agents who see need to have a comprehensive can only dream of. the future in more flexible working understanding of the property It’s not just growth figures and more tech-enabled working,” market to make it big in real estate that highlight why real estate says David Brierley. “And then we've franchising. After all, knowing franchising is a worthwhile cause, got people who are in business and when and what to buy or sell gives of course. In 2018, it was estimated who see property as an interesting you the edge over less experienced that the real estate franchise way of earning a living – and a industry produced roughly $53bn reasonably lucrative one.” in revenue. Just the year before, The steady growth of the construction of new residential easyProperty highlights a key and industrial buildings in the aspect of the real estate franchise U.S. added $1.03tr to the economy. industry that investors from other Buildings mean big business, and market segments will find familiar: for the right kind of franchisee, they the inexorable shift toward tech. can also mean a rewarding career Rather than traditional brick- and an exponentially growing and-mortar offices, easyProperty network of like-minded partners. instead handles much of the admin side of things online, and has Easy money licensed agents who can visit clients One brand looking to carve up on the ground to keep the human a segment of the real estate touch intact.
36 GLOBAL FRANCHISE | ISSUE 5.6 “It's all good being a great estate agent, but if you can't build a business and generate activity, then it's not for you” competitors – right? franchisees to make the most of a nine to five hours. It works really As it turns out, this isn’t always dire situation. Thankfully, the real well for her, and I think that it gives the case. While understanding estate market isn’t as dire as others people a work-life balance.” property is certainly a benefit, appear moving into a new year; U.S. So if you’re looking for your next the same way that studying real estate experts predict that the investment venture, don’t overlook QSR processes would help with 2021 market will see annual sales the possibilities contained within opening a restaurant concept, it’s grow over 10 per cent, compared real estate franchising. It may the more human elements of an with the five per cent in 2020. not be an industry as viable for entrepreneur that can make or If anything, the pandemic has complete newcomers, but for those break their ability to really succeed only highlighted how viable real with business backgrounds, this within this industry. estate franchising can be for affluent sector could build you a “We do a psychometric testing entrepreneurs from many different long-term franchising future. exercise to find the right kind of backgrounds. As Brierley explains: people,” says Brierley. “Basically, “One of our most successful it's great communication, great franchisees at the moment is a lady interpersonal skills, and a with four children who she is home- determination to make a business schooling. She can balance her successful. It's all good being a great working around the schooling estate agent, but if you can't build a because a lot of people are business and generate activity, then happy to interact in the it's not for you. I suspect there's evening or morning probably only 20 per cent of current – times that aren't estate agents that would make for the traditional good franchisees.” This is especially true during the times we’re currently living in, where proactiveness and preparedness would allow
GLOBALFRANCHISEMAGAZINE.COM 37 PROPERTY FRANCHISING
FLEXIBLE WORKSPACES: A brave new world for forward-thinking franchisees With the traditional office fading into obscurity, this emerging sector is more enticing than ever
longside the holistic industry could be valued at around a very simple and easy business to disruption to how $111.68bn, according to Zion run. You only need a few employees, A consumer-facing Market Research. so entrepreneurs, hotel owners, businesses operate, Put simply: this is a ground-floor landlords, real estate owners – they one of the biggest changes that the opportunity if there ever was one. can see this as a way to get high COVID-19 pandemic has brought returns for their investment and to the business world is an almost The future is flexible diversify, or take advantage of an total shift to remote working. To fully understand why the future industry while it's still early.” More than ever before, employees of this industry is a bright one, it’s Flexible workspaces are becoming and employers alike are seeing the important to first consider why so ubiquitous that even brands benefits of a flexible arrangement, so many franchisees have already outside of the industry are getting and the traditional fixed office entered the market. involved. Raddison Hotel Group, space has never been less “The simple answer is that for example, recently launched appealing; both from a financial it's just a better way of doing its Hybrid Solutions virtual office perspective, but also in terms of something that's already existed,” spaces and partnered with Zoom how people now live their lives, says Matthew Szafaryn, director of to provide video conferencing for with more free time as a result of franchise development for Venture drastically reduced commutes. X, a U.S.-based As such, the world of flexible flexible workspace workspace franchising has emerged franchisor. “Office as a very bankable investment. It’s spaces have always a sector that’s already been on the existed with these rise, and between 2010 and 2020, long-term leases, the number of flexible centers in the but anybody right U.S. almost tripled. now can see the It’s estimated by organizations growth in this like Instant Offices that 35 per industry and the cent of all offices need for it. It's also will be flexible by 2023, and by 2027, the global
“It's just a better way of doing something that's already existed”
38 GLOBAL FRANCHISE | ISSUE 5.6 “We're seeing a lot of franchisees who are got smaller companies that might have offices around the world, or looking for more suburban-type markets multi-national companies that have staff go around the world, and outside of those downtown or CBD areas” they can use all of our offices. It's benefitting our owners by allowing them to get that additional revenue, meetings and events in lieu of Keeping things local and allowing our owners to bring in-person gatherings. One of the most surprising shifts for new members in.” Similarly, Hyatt, the international flexible workspaces to come out of Other franchises have focused hotel franchisor of more than the pandemic is that the locations on locating their offices in high- 950 locations, introduced its that this industry began in – big demand locations, which will Office for a Day program back in business hubs like Los Angeles become more of an appeal once December 2020 at more than 400 and New York City – are no longer pandemic restrictions begin of its sites. For $65 a day, guests as appealing for new build-outs or to subside. receive a private room with office conversions. This is a far cry from “We are purposely located in a conveniences, paired with the 2015, when half of all flexible office vibrant, downtown area that allows amenities of a hotel experience. space in the U.S. was located in just our members to take advantage Landlords of traditional office five states: Florida, Texas, New York, of the food, beverage, retail, and spaces are also seeing the appeal: Illinois, and Chicago. entertainment businesses that “One key trend that I have seen “We're seeing a lot of franchisees are within walking distance of emerging in the last few years who are looking for more our space,” says Pam Tanase, co- and has accelerated through the suburban-type markets outside founder of Workzones, a Santa pandemic are traditional landlords of those downtown or CBD areas,” Barbara-based brand. “Not only moving into the flex space with says Szafaryn. “That allows is our location desirable for our their own flexible products,” says these multinational clients to members, it allows us to focus and James Walton, director at form_ decentralize their office. You see a provide the ‘work’ aspect without by Hadron, a flexible workspace lot of people in New York right now having to provide the ‘fun’ factor.” consultancy. “We see hybrid offices who are deciding that they don't Workzones also offers on- or managed offices that sit between need to go into an office space, demand meeting and conference a coworking and leased space as which will really hurt the rates in rooms, which have temporarily seen a future trend, as occupiers want those areas. My guess is that those a decreased demand due to less to have their own self-contained will be slower markets to regain in-person meetings, but usually space but all the benefits – such as their growth and opportunity.” provide yet another revenue stream flexibility and turnkey solutions – To combat this, franchises for its franchisees. that come with a coworking space.” operating in the flexible working Still not convinced that flexible space need to really prioritize workspaces are the next big thing? differentiating their offering from As Matthew Szafaryn puts it: “Back the many emerging competitors. in the day if you landed at the For Venture X, one way to achieve airport and you didn't have a ride, this is a reciprocal membership you'd call a cab or wave one down. agreement; similar to what the Now, 99 per cent of people are likes of Anytime Fitness offer, calling Ubers. I'm not saying that where guests can attend any 99 per cent of the market will be location in the world with just flexible workspace, but it will be a one membership. regular thing that “The more that we grow, the more people that our members and franchisees recognize benefit,” explains Szafaryn. “You've and use.”
GLOBALFRANCHISEMAGAZINE.COM 39 PROPERTY FRANCHISING
The changing face of the 2021 office space franchise How the pandemic has only strengthened this emerging sector
WORDS BY JULIAN CHAMBERS
020 was a challenging industry likely to evolve in the in 10 U.K. workers still want to work year for anyone trying coming year as a result of 2020's in an office for at least part of the 2 to operate a successful turbulent events? Here’s my take week – but one closer to home, with business, but especially on what we can expect in the 77 per cent saying that this is a must- for franchisees. With gyms, hotels, year ahead. have for their next job move. and fast-food chains closing during Driven by this demand, we will lockdowns, many traditional Staying closer to home see successful flexible offices grow THE AUTHOR franchise industries felt the pinch With many businesses and in suburban commuter hotspots, Julian Chambers is the of the pandemic and the importance closer to where employees live. In employees reaping the rewards head of franchise for of having a diversified franchise time, a flexible workspace in every of flexible working during the Regus/International portfolio was clearer than ever. town, city, and some villages will very Workplace Group pandemic, it’s already becoming But, while COVID-19 has impacted much become the norm. At IWG this (IWG), and has expe- clear that the traditional idea of all types of businesses, flexible is a trend that we’ve already seen rience spanning more commuting into a central HQ office space has an opportunity to gather pace during the pandemic, than 25 years across every day is dead. multiple F&B brands. adapt and even grow as a result of having recently reported 20 to 30 per According to our own IWG iwgplc.com lockdown in 2021. cent growth in our outer London and The pandemic has accelerated the research released in September, six shift to remote working and allowed businesses and workers alike the chance to experience the benefits of hybrid working. For employees, it has meant saving time and money on commuting into the office, and for businesses, it has opened up the potential savings of shifting away from central offices while keeping the workforce productive and happy. This year already we’ve seen big businesses such as Standard Chartered adopt a more flexible model, signing a deal that allows its 95,000 employees to work from any of our 3,500 offices around the world. But what does this shift mean for office space franchises, an emerging franchise sector which has traditionally been based in large cities? How is the
40 GLOBAL FRANCHISE | ISSUE 5.6 Cambridgeshire locations. concerns about social distancing, We’ve also seen a surge in demand the demand for smaller individual “While COVID-19 has for our centers in M25 commuter workspaces rather than larger open- hotspots including Luton and plan work areas will continue to rise. impacted all types of Uxbridge, where the number of This trend played out in our sales inquiries for flexible office space last year when we observed a 19 per businesses, flexible office increased by 74 per cent compared to cent increase in interest for our pre-pandemic levels. It’s a different one to two person workspaces space has an opportunity story in central London though, compared to pre-pandemic levels, where we’ve seen a 40 per cent drop and it is one that will be a key to adapt and even grow as in new sales. consideration for office space The desire to work closer to franchisees in the next year. a result of lockdown” home will have an impact on other franchise industries once they are A new type of people making the leap towards able to reopen, such as gyms and becoming their own boss this year, restaurants, who will no longer be franchisee potentially turning to franchising as The uncertainty caused by COVID-19 able to bank on the business of a viable option. has meant that everyone, regardless office workers in city centers. As a of their profession or individual result, we can expect an increase in Eggs in more than situation, has had to adapt their way these types of businesses opening one basket of working in some way. locations in the suburbs over the It isn’t just franchise newcomers With many employees saving coming year, as they look to bounce we can expect to hop on the hybrid time that would otherwise be spent back from the pandemic and grab working trend this year. Established commuting into work, the pandemic a slice of this new customer base franchisees looking to diversify has also provided an opportunity for working from multiple locations their portfolios and reduce risk by people to reflect on their goals and throughout the week. investing in previously unexplored aspirations for the future, maybe industries could make flexible office More demand for even encouraging them to start a space franchises more popular than smaller spaces side hustle or business they’ve never ever in 2021. With more people looking for a desk had the time to work on until now. There is currently a high level space close to home and lingering It goes without saying that the of unmet demand for flexible pandemic has and continues to workspace in certain towns and cause a loss of confidence in the suburbs across the country, which security of certain jobs and presents an untapped opportunity industries. I would be for potential investors, so long as unsurprised to they move at pace. learn of more Looking ahead 2020 was the catalyst for a huge long-lasting shift in how and where we live and work. Many ‘traditional’ franchise sectors such as fast food and hospitality have had to change their operations overnight, and challenges such as closures unfortunately aren’t going anywhere for the first part of 2021 at least. The office franchise space has also quickly responded and is now tuned in to cater to the changing working practices that are here to stay. While the industry will undoubtedly undergo a number of changes in 2021, the outlook for franchised office space looks positive, offering an attractive proposition for existing franchisees to diversify their portfolio and reduce risk, as well as for budding entrepreneurs who wish to start their own business under an established brand.
GLOBALFRANCHISEMAGAZINE.COM 41 BEHIND THE BRAND: PARTNER CONTENT
AT A GLANCE PROPERTYGUYS.COM A new and Established: 1998 Outlets: 85+ Locations: Canada, Texas, Florida, South Africa better way to Franchise fee: $25,000 - $75,000 Contact: [email protected] buy and sell info.propertyguys.com/globalfranchise putting the needs of buyers and sellers above everything else. We do this because we know that when our real estate customers win, we win too.” Instead of charging commission like traditional agents do (often five to seven per cent of the final PropertyGuys.com is disrupting this lucrative industry sale price), PropertyGuys.com franchisees collect a flat fee for their services. That much lower hailing a taxi, or only staying in nce upon a time, in fee is based strictly on the types of hotel rooms when you travel. a land called North services that the seller selects, not Meanwhile, PropertyGuys.com America, there were the price of their home. O real estate agents who is growing rapidly thanks to its If imagining a world where the earned large commissions from national franchise operators majority of real estate transactions people who were buying and selling and the enthusiasm of tens of happen without a full-service agent properties. It was a highly profitable thousands of early adopters who seems implausible to you, consider (and monopolistic) era in which have become raving fans. this: Less than 10 years ago, there these agents lived. They earned “We believe the traditional real were still people waiting in line billions of dollars in commissions estate agent model has become at Blockbuster on Saturday night every year. obsolete and way too expensive with DVDs and an over-sized bag of One day, armed with a vision of for the average person,” says Ken popcorn in hand. something better and the power LeBlanc, president and CEO of Today, those iconic yellow and of technology, PropertyGuys.com PropertyGuys.com. “We know how blue signs are only a memory. They swooped in and designed a modern hard people work for their money. gave up their market dominance to alternative to the traditional That’s why we are transforming Netflix, because they were unable to agent – one that streamlined the every single piece of the puzzle – see the vast potential of a new way process and empowered buyers and sellers to connect directly. To make real estate transactions more efficient they cut out the expensive middleman – creating a flat fee no- commission approach that typically saved the customer 10 times more than if they used an agent. If you think the idea of transforming the real estate industry sounds like a fairy tale, then you’re probably still using a travel agent to book your flights,
“We believe the traditional real estate agent model has become obsolete and way too expensive for the average person”
42 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - XxxxxxxxxxxPropertyGuys.com GLOBALFRANCHISEMAGAZINE.COM 43 GLOBALFRANCHISEMAGAZINE.COM If you believe that the that the believe you If estate the real moving are “We coast-to-coast in the U.S. coast-to-coast can be estate industry real fees lower through transformed specialized commission), (no service, and innovative is this opportunity technology, need a real don’t Owners you. for do need to estate license, but they of innovation in the power believe by upside obtained and the huge estate forever. helping disrupt real and giving forward industry the freedom and sellers buyers property sell their to successfully of the cost of using at a fraction Melanson. explains an agent,” disruptors fellow our like “Just we way the changed have who and town, around get TV, watch not only – it’s vacations book what also it’s want, people what deserve.” they
In the new real estate model, online real In the new service is or product your “When is currently PropertyGuys.com With a 20-year track record of of record track With a 20-year focus on our expertise and rely and rely expertise on our focus on a combination of people and the rest.” for technology put and connectivity engagement and in control. at the core the seller In addition to connecting customers sale platform, with its online private is thinking ahead PropertyGuys.com a move integration, to full platform favor tilt the scales in finally that may disruption. of industry can’t you the customer, built around LeBlanc. says lose,” representatives area looking for a few with only internationally, still available franchises single-unit in Canada. ESTATE REVOLUTION ESTATE JOIN THE REAL JOIN THE REAL As one of the fastest-growing in Canadian systems franchise is an PropertyGuys.com history, investors for opportunity exciting looking to get south of the border of the at the forefront involved estate industry. shift in the real and training system proven Its have franchisees ensure programs a all the tools needed to operate successful business. and success, the company growth in power has established its staying there yet estate industry, the real to be done to bring the work is still The America. North across brand new for timing could not be better with involved to get entrepreneurs or franchisees as master the brand from owners franchise individual
PropertyGuys.com is taking is taking PropertyGuys.com on a mission to bring “We’re “When your your “When service or product around is built the customer, lose” can’t you before it was too late. too late. was it before that of the opportunity advantage technology has been opened up by estate real regulatory and favorable shift in This paradigm changes. a function of estate is simply real like Much business model evolution. the music Apple reconfigured how eliminating monolithic business by distribution channels that made companies and artists rich, record has been quietly PropertyGuys.com estate, real doing the same thing for and (buyers making the customer the hub as opposed to just sellers) wheel. in the spoke another estate through to real clarity We and technology. franchising isn’t the transaction believe up break you when complicated each task and place it in the hands of the most capable professional,” director said PropertyGuys.com Melanson. Walter of partnerships, uses a team “PropertyGuys.com ‘jack of all instead of the approach model. agent traditional trades’ benefit customers That means our in the real the best experts from a franchisee estate field. From we that means perspective, We to be all things. have don’t FEATURE
FRANCHISING FROM THE U.S. TO CANADA – AND BACK AGAIN How franchisors can make the most of these two leading markets
44 GLOBAL FRANCHISE | ISSUE 5.6 WORDS BY KIERAN MCLOONE
t’s commonly known either way until the home market uncomfortable. Also, you don't just that the U.S., arguably is maximized,” says Angela Coté, update your FDD once per year. In the creator of the a franchise growth catalyst with Canada, the FDD must be up to date I franchise model as we many years’ experience in franchise each and every time it's issued to a know it today, is the largest and development. “While it is tempting prospective franchisee.” most developed franchise market in to simplify the concept of crossing U.S. franchisors may also assume the world. Statista estimates that the border, there are so many costs that Ontario is the key market they there are roughly 773,603 franchise and uncertainties involved. must target first, because of its establishments throughout the “A mistake I see time and time density and positioning as a central country, outputting a total again is the franchisor not using a hub for business in the country. economic value of $787.5bn. concentric growth strategy. What After all, the province is home to 56 Perhaps lesser-known, however, happens is that they get a unit per cent of franchise headquarters is that North America’s neighbor opened in a market like southern in the country, and 65 per cent of to the North holds the title of Ontario, and the next thing you all Canada-based franchise outlets the second-largest franchise know they get interest from an operate in this market. As it turns market, with an estimated 1,300 eager prospect in Western Canada. out, though, these figures should unique brands currently operating The offer seems too good to refuse not come before a carefully planned throughout Canada. and they go ahead and sign the entry strategy. “Canada has more U.S. brands agreement. Soon after, because of “While Ontario is by far the most operating than any other country in the expansiveness of the country, densely populated province in the world, because of our proximity the franchisee in Western Canada Canada, I would always recommend and similarity,” says Edward (Ned) in the isolated market feels alone entering a market where the best Levitt, CFE, a partner at Dickinson and unsupported, and struggles as master franchisee partner is and Wright LLP. “It's a trust that the U.S. they are starting from scratch to where the best market is for your knows franchising. The expectation build brand awareness.” brand,” says Coté. “If you have a is that you're going to get what you well-vetted, rockstar prospect who pay for if it's a U.S. brand. A brand Preparedness creates thoroughly checks off all the boxes coming in from France, for example; prosperity and they are in what appears to be there wouldn't be the confidence Like the U.S., Canada comprises the right market based on research, that the French franchisor really a number of regions, namely there is a better chance for success knows how to franchise in Canada provinces and territories, which than just choosing an area because or North America.” are separate jurisdictions. These of density.” provinces and territories are akin Familiarity can to the states in the U.S., across A more direct route be a trap which franchise regulation can Interestingly, despite the journey Hold off on making that vary, as can culture and trends. from the U.S. into Canada being international development call “Franchise regulation in an international one, many for just a moment. While Canada’s Canada is, for better or worse, franchisors are opting for direct franchise market is highly somewhat self-regulated,” says franchising when crossing the receptive to U.S. brands, and Andrae J. Marrocco, a partner border – not something you’d many of the States’ biggest names at McMillan LLP. “There are six commonly see when entering a have continued to find success provinces that have provincial new regional market. in the North, to consider Canada franchising legislation, but there “A high majority of my clients simply yet another American state is no regulatory body (or bodies) are looking at direct franchising would be a mistake. As with any that monitor or enforce compliance because they feel that they can international expansion, heading with those franchise laws; it is service their franchisees from the from the U.S. into Canada requires entirely up to each of the parties U.S.,” says Marrocco. “A fitness plenty of planning and preparation to enforce their own rights. concept out of Rochester, New York, to avoid cross-border pitfalls. Moreover, there are no federal utilizing all custom proprietary “While I love the idea of franchise laws in Canada, there equipment, gets it all on a truck and brand growth, I typically don't are no registration requirements, brings it to Canada because of the recommend crossing the border and some U.S. franchisors find that proximity. If you’re a restaurant, however, and there’s a lot of supply chain nuances that need to be “A high majority of my clients are addressed, then master franchising may be the preferred choice of looking at direct franchising because franchise structure.” Master franchising hasn’t always they feel that they can service their been a surefire path to success in Canada though, and this has led franchisees from the U.S.” franchisors to sometimes consider alternative routes.
GLOBALFRANCHISEMAGAZINE.COM 45 FEATURE
“In the past, the franchisor was “From a cultural perspective, relying on the master to know the while Americans reap the benefits market that they're going in to, and of cross-border brand awareness, it to make changes that needed to be doesn’t always work the other way made. 20 years ago, we had a lot around,” says Coté. “What I mean “From a cultural of failures, because the franchisor by this, is that probably mostly left too much down to the master through the media, we Canadians perspective, while franchisee,” says Levitt. “In the last often get exposed to American 10 or so years, what we're finding concepts, so by the time a U.S. Americans reap the is that more franchisors are not franchise enters Canada, there’s a going the master route and instead good chance there has already been benefits of cross-border considering multi-unit franchising. some brand awareness built up. More are realizing the benefits of When a Canadian franchise enters brand awareness, it multi-unit; they would give a multi- the U.S., we are often starting more unit operator a sizable territory from scratch.” doesn’t always work the in the target country, but there Starting from scratch isn’t always would still be the franchisor/ a bad thing, of course. For the right other way around” franchisee relationship.” franchisor, this blank slate can be With all of this taken into an attractive prospect. It allows consideration, the experts are still seemingly limitless growth – just confident that there is prosperity as long as a proper market strategy to be found by U.S. franchisors is put in place. After all, as Bill heading North: “Any U.S. franchisor Edwards, CEO of Edwards Global who has domestic success, does Services puts it: “U.S. consumers their research, has sufficient are very open to international capital and patience – their concepts and trying new things. chances of success in Canada are You have to test your brand, but great,” says Levitt. there's rarely any pushback.” Avoid assumptions Opt for multi-unit Despite the U.S. and Canada investment appearing similar on paper, it One of the first things that Canadian would be a mistake to take all of franchisors need to understand the above information and simply about franchising in the U.S. is flip it, assuming that it could be that it’s a huge, complex market. utilized by Canadian franchisors By sheer land mass Canada is heading into the States. While the equally large, but America’s many close proximity of the two countries jurisdictions and region-specific benefits brands taking the leap, regulations can prove tricky to there are still many considerations the uninitiated. that need to be made before “The U.S. Department of formulating an entry strategy. Commerce says that there are 16 different economic regions in the U.S. and they do business differently in some States,” says Edwards. “In fact, there are 16 States that have different franchise regulations. It's important to look at those when you're coming into the country.” Because of this complexity and size, Edwards recommends that franchisors entering from Canada always opt for multi- unit franchisees over single- unit investors. This is because of their increased capital and manpower, but also due to the fact that entrepreneurs or groups looking to invest in multiple units will undoubtedly already have experience in franchising. They will understand both the logistics of the business model itself, but also how a brand can fit into the nuances presented by a specific demographic or market.
46 GLOBAL FRANCHISE | ISSUE 5.6 The latter point is particularly notable in the States compared to Canada, because competition is increased dramatically. “I think one of the big things you need to be ready for is that there are far more competing brands in each sector, than there would be in Canada,” explains Edwards. “If you look at homecare, there are 50 franchise systems that are considered worthwhile. In Canada you may have three or four, or 10 at the most. That's a huge challenge that brands find when they come to the U.S., and they don't take that into account and do their market research ahead of time to see whether they're really “New York just doesn't want differentiating or not. If they're more of the same, it's going to be new businesses to come difficult to find franchisees.” in. They want to keep what Be mindful of the market they've got, and so their When it comes to choosing your entry point in the U.S., the regulations are tough” consensus among the experts is that almost every state is ripe for U.S. than with other global markets: development for the right kind of “Expansion and growth of any kind brand. However, two states stand includes expanded possibilities out as being tricky for first-time of litigation, and knowing and developers: California and New York. adhering to the laws at the federal “California has the joint-employer and state level is key to avoiding problem and they're slowing down this,” says Red Boswell, president of applications for any new franchises IFPG, a franchise consultancy. “It is or renewals,” says Edwards. important for franchisors to align “New York just doesn't want new with a reputable franchise attorney businesses to come in. They want to to help navigate the sometimes keep what they've got, and so their confusing regulations and ensure regulations are tough. If you're going their paperwork is filed on time.” to come into this country, I would suggest not coming into those two Strength in numbers as your first location.” This brings us to the main reason The ongoing joint-employer Canadian franchisors should use debate in California basically boils the U.S. as their first step into down to whether franchisors can international growth: community. be held liable for a franchisees’ Because the franchising model is so employees, and has the potential engrained into U.S. business culture, to open franchisors up to many countless events and support legal troubles that could be groups have been established “Franchise regulation avoided by simply omitting the to support both domestic and state from growth plans. This foreign brands when navigating the in Canada is, for better would be a shame, though, because country’s quirks and hurdles. the Sunshine State has such a “There’s a huge sense of or worse, somewhat ripe franchise market. As such, community within the industry and very careful planning should be we get together every chance we get self-regulated” undertaken if this is to be part of a to collaborate, share best practices, brand’s entry strategy. and network,” says Boswell. “If you This also opens up the Pandora's wanted, in non-COVID times, you box of litigation in the States, could attend several franchise which is a leading fear among events every month – from international brands looking to conferences to trade shows and enter the country. While the threat more. With pent-up demand, we’re of litigation is a very real one, some going to see a surge in U.S. get- believe that it’s no more likely in the togethers once COVID is behind us.”
GLOBALFRANCHISEMAGAZINE.COM 47 NORTH AMERICAN SPECIAL
CENTRAL AMERICA: A GUIDE FOR U.S. FRANCHISORS HEADING SOUTH
While many franchises based in the U.S. go to Canada when stretching their international legs, the countries beneath the States are equally viable for cross-border expansion. Here’s a guide to some of the leading franchise markets in Central America
48 GLOBAL FRANCHISE | ISSUE 5.6 Mexico: Central America’s franchising gateway It’s easy to see gold within this familiar market, but precautionary planning is a must
MEXICO STATS Population: 128.9 million Capital city: Mexico City GDP: $1.2tr Language: Spanish Area: 1.93 million square kilometers Currency: Mexican peso ($)
hile Mexico’s status Employing all of these Mexicans recommend at least three masters as a Central American are some 1,500 unique franchise to cover Northern, Western, and W country is debatable, concepts, which generally tend to Central Mexico. with many proclaiming have low investment fees ranging it firmly a North American country, from $50,000 to $250,000. While A neighboring source the region’s culture and business franchise offerings with higher fees of success landscape plant it firmly alongside do exist and even thrive in Mexico, Even in the face of the pandemic, its Latin American peers. going beyond the $250,000 range can American franchisors are looking to alienate some investors. Mexico as a source of opportunity. “Something of an outlier Something of an outlier within the In August, maintenance retail Central American market, Mexico’s franchise Ace Hardware announced within the Central franchise industry is predominantly that it would be expanding into made up of domestic brands, at Mexico thanks to its first franchise American market, Mexico’s around 86 per cent. Of the remaining agreement in the country, and in share, around seven per cent October, Arby’s opened its first franchise industry is consists of concepts that originate Mexican-based restaurant. This from the U.S. opening came with 10 exclusive- predominantly made up However, even though the market to-Mexico menu items, which were may feel familiar to U.S. brands, there designed to differentiate this new of domestic brands, at are still some developmental truths store from its U.S. counterparts. that must be acknowledged in order Arby’s isn’t the only restaurant around 86 per cent” to find success. For instance, even concept targeting Mexican expansion, though the majority of franchise with others also recognizing the activity in Mexico may appear to take possibilities presented by a country Franchising was first brought place in its capital of Mexico City, where F&B makes up almost one- to the country in the 1980s, and neglecting the smaller cities such third of the total franchising market. since then, the business model has as Guadalajara and Monterrey is Twin Peaks, a sports lodge brand, grown into a leading contributor to leaving money on the table. opened its first Latin American the country’s GDP. In 2016, it was That being said, employing a location in Mexico City in November. reported that the franchise industry single cover-all Mexican master It’s banking big on Mexican growth, employed around 80,000 Mexicans, franchisee is inadvisable, because with this inaugural site being the and represented six per cent of the the country is so large and dense first in an eight-location deal with country’s total GDP. that organizations such as the IFA domestic group Operadora 2 Montes.
GLOBALFRANCHISEMAGAZINE.COM 49 NORTH AMERICAN SPECIAL
Guatemala: Central America’s largest franchise market Despite economic disparity, Guatemala has been a franchising hotbed for half a century
GUATEMALA STATS Population: 17.9 million Capital city: Guatemala City GDP: $82bn Language: Spanish Area: 108,890 square kilometers Currency: Quetzal (Q)
uatemala was originally credited with coining the concept the site of the ancient of the Happy Meal, as well as “Local Mayan civilization, and being one of the primary test sites G now is known as one for the McCafe brand upon its entrepreneurs of the more understated, yet highly initial launch. attractive, franchise markets within Politically, Guatemala hasn’t willing to invest the Central American region. always been a stable market for International franchising first brands to enter, but the signing of in a franchise took hold in Guatemala in 1969, peace accords in 1996 ended 36 when Pizza Hut became the first U.S. years of civil war in the country, and will only do so chain to open up in the country. Fast removed a major obstacle for foreign food still remains the most popular investment. The impact of this move if the concept segment of the market, too, with a was seen a few years later, with the 43 per cent market share. This is Guatemalan Franchise Association in question followed shortly by services at 33 reporting a 1,500 per cent growth in per cent, and a little further behind, the market between 2002 and 2007. has a strong retail at 11 per cent. However, there are still some Because of its size, density, major social and economic barriers foundation in its and financial output, Guatemala that could impede the growth is known as the largest franchise potential of some international home country” market in Central America. 80 per brands. For example, while cent of the brands that operate in Guatemala accounts for over a third the country are of foreign origin, of Central America’s total GDP, the For franchises that meet local and just over half of that figure (45 country still possesses high rates criteria, though, Guatemala is a per cent) come from the U.S. of inequality and disparity among truly enticing opportunity. 70 per This includes franchising its youthful population. This can cent of the country’s population mainstays like McDonald’s, which make finding the right kind of is under 30 years old, with many was first brought to Guatemala in investor tricky, and means that citizens speaking English alongside 1974 by entrepreneur José María local entrepreneurs willing to invest the local Spanish language. And as Cofiño. McDonald’s Guatemala in a franchise will only do so if the with many markets south of the has always proven a real success concept in question has a strong border, Guatemala’s close proximity story for the golden arches, and foundation in its home country. to the U.S. means that brand Guatemala’s arm of McDonald’s is Emerging brands could struggle. awareness is rife.
50 GLOBAL FRANCHISE | ISSUE 5.6 Honduras: Central America’s potential springboard It may not be a franchising juggernaut, but Honduras still possesses the appeal of an up-and-coming global market
HONDURAS STATS Population: 9.9 million Capital city: Tegucigalpa GDP: $24bn Language: Spanish Area: 112,492 square kilometers Currency: Lempira (HNL)
onduras may not markets within this region as part Wendy’s to bring its restaurant have an official of a singular franchise agreement. brand to the country in 1991. H franchise association Earlier this year, this cross- There are a handful of factors just yet, but that hasn’t border convenience led to the that mean Honduras is often stopped the country from gaining signing of a multi-country targeted as part of a wider the attention of many international development agreement between franchising net, rather than brands looking to penetrate an U.S. fitness franchise Workout solely focused on by large emerging market. Anytime, and Honduras-based international brands. As well as In fact, over 70 foreign brands organization Lady Lee Corporation. having one of the highest rates currently operate in the country This agreement will see Workout of violence in the world, and a through numerous franchise relatively low position on the agreements, with many focused World Bank Group’s Corruption on Honduras’ primary cities of “The country Perception Index, Honduras Tegucigalpa and San Pedro Sula. is also comparatively poorer Part of this attraction comes as has the highest than surrounding Central a result of Honduras’ high rates American countries. of education. The country has the Spanish-English Its total GDP sits at around highest Spanish-English bilingual $23.97bn, and the country is population out of all of Central bilingual considered a low/middle-income America, and the literacy rate in region with a GDP per capita of Honduras sits at around 88.5 population out $2,080, and around 60 per cent per cent. of its population living in poverty. Another domestic appeal is of all of Central Rather than completely dissuade Honduras’ position in CAFTA, franchisors, however, these figures which is a regional trade agreement America” should showcase the room for between the U.S., Guatemala, El potential that Honduras presents. Salvador, Nicaragua, Costa Rica, Anytime expand throughout It may not be a global frontrunner and the Dominican Republic. Central America and the Dominican in the franchising sphere, Agreements like CAFTA ensure Republic, and is evidence of the but the country has still seen that the Central American franchising know-how on offer many international brands find market is kept open for foreign within Honduras; Lady success, and could act as a great investment, and will often mean Lee Corporation was also springboard for further Central that franchisors will target several responsible for working with American development.
GLOBALFRANCHISEMAGAZINE.COM 51 NORTH AMERICAN SPECIAL
Costa Rica: Central America’s enticing land bridge It may be small in size, but Costa Rica is home to this region’s second- largest franchise market
COSTA RICA STATS Population: 5.09 million Capital city: San Jose GDP: $58.5bn Language: Spanish Area: 51,100 square kilometers Currency: Costa Rican colón
nown as the land bridge 321 unique franchises in the To this day the government of Costa that connects South, country, with 76 per cent being of Rica still invests around 20 per cent K Central, and North international origin. of its GDP on universal access to America, Costa Rica Surprisingly, fashion retail makes education, healthcare, clean water, is a naturally attractive market up the majority of the franchise sanitation, and electricity. As a for franchisors looking to invest market within Costa Rica, at 32 per result, the country has the most in thriving regions. The country cent. Lots of competition can still literate population in all of Central be found in the food and beverage America, at around 95 per cent. segment, however, which accounts Costa Rica has also created “San Jose’s solid for just under one-quarter of the several Free Trade Zones, and country’s franchising landscape. businesses established in these infrastructure means that Following behind this, at just 14 per areas can enjoy tax exemption on cent, are hotels. the export of goods and numerous many international flights As would be expected with the types of tax. likes of fashion retail and fast- There are, of course, challenges come and go from the casual offerings, many franchises that franchisors will encounter in within Costa Rica establish city; strengthening the themselves in malls and other Costa Rica – it would be wrong to commercial centers. This has conclude that it's a carefree tropical country’s global presence” led to further mall construction paradise. More than 40 per cent of toward the east of San Jose, the the population hold informal jobs, is also surrounded by the Pacific country’s capital city. And despite which can lead to low disposable and Caribbean oceans on either the pandemic, San Jose’s solid income. This means that finding side which, coupled with Costa infrastructure means that many franchise investors with adequate Rica’s established ports, makes for international flights come and go capital can be a slow and arduous streamlined logistic solutions. from the city; strengthening the process, and that investors will only It’s this natural proclivity toward country’s global presence. be willing to partner with brands international business that has Costa Rica’s population isn’t just showcasing proven success. Also, resulted in Costa Rica becoming familiar with franchising, it’s also even though literacy is very high Central America’s second-largest highly educated in general, and in within Costa Rica, both Spanish and franchise market, despite the 1869, the country was the first in English versions of business cards country’s relatively small the world to make primary school and promo materials will need to be landmass. As of 2016, there were education both free and compulsory. made to appeal to local talent.
52 GLOBAL FRANCHISE | ISSUE 5.6 El Salvador: Central America’s familiar franchising haven With the majority of franchise concepts in El Salvador originating in the U.S., it’s easy to see why western brands turn to this country’s familiar market
EL SALVADOR STATS Population: 6.48 million Capital city: San Salvador GDP: $24.7bn Language: Spanish Area: 21,040 square kilometers Currency: U.S. Dollar ($)
f all the countries that international “While it’s still the most established O franchisors could penetrate in Central brands that will find it easiest to America, El Salvador seems like the most natural entry point. After all, partner with domestic franchisees, the U.S. dominates the country’s franchise industry with a 75 per even strong emerging concepts could cent market share, and franchising was only introduced to El Salvador enjoy success within El Salvador’s because of brands like McDonald’s and KFC entering the market in the welcoming borders” late 1970s. Since then, countless American his messaging to promote the incoming brands will need to make. staples have found success within international possibilities available On the World Bank Group’s Ease the modest country, including the within El Salvador. His approach of Doing Business Ranking, for likes of Domino’s Pizza, Denny’s, is one of convenient trade, and he example, the country comes in at Olive Garden, Panda Express, and has continuously stated that the 91st – just over halfway down the Taco Bell. country is “open for business”; list. It manages to score highly in It isn’t just the brands that especially for prominent U.S. aspects like getting credit and the operate within El Salvador that brands. This means that while it’s processes of starting a business, give it a distinctly U.S. slant. The still the most established brands but falls down in areas like country uses the U.S. dollar as that will find it easiest to partner enforcing contracts and protecting its form of currency, and this with domestic franchisees, even minority investments. dollarized economy eliminates strong emerging concepts could Because of this, it’s crucial that the foreign exchange rate risks enjoy success within El Salvador’s you do your homework before that come with both other parts welcoming borders. entering the country; even more of Central America, and the wider The challenges associated with so than in other global markets. global business landscape. franchising in El Salvador aren’t as Anybody can start a business in El Additionally, president Bukele, immediate as some other Central Salvador, but it takes truly savvy who entered office back in June American markets, but there’s franchisors to safeguard it for the 2019, has been consistent with still ample considerations that long-term.
GLOBALFRANCHISEMAGAZINE.COM 53 BEHIND THE BRAND: PARTNER CONTENT
AT A GLANCE SLIM CHICKENS
From Established: 2003 Number of units: 120 Location of units: Fayetteville, U.S., U.K., Kuwait Investment range: Variable Options available: Traditional ground-up development, conversions, non-traditional (airports, Arkansas to army bases, malls) Contact: Jackie Lobdell, VP of franchise development, [email protected] / (630)-300-4798 London slimchickensfranchise.com
Slim Chickens’ global appeal is spurred on by staying true to its roots
lim Chickens was hatched and it wasted no time expanding. in 2003 in Fayetteville, First, Slim Chickens expanded past Arkansas, a small city the borders of its home state of S Arkansas. Now, it has reached out near the northwest corner of Ozark National Forest. across the pond and into the United It’s the kind of place that, with its Kingdom – and beyond. It turns out rolling hills and lively entertainment that people from all over the world district on Dickson Street, feels were hungry for better chicken, too. quintessentially American. Greg Smart and Tom Gordon, the PERFECT MASTER founders of Slim Chickens, exude FRANCHISING PARTNERS the same kind of Americanness. To aid its foreign expansion, Slim When they started Slim Chickens Chickens has utilized a master in their garage, they knew that franchising model to expand its their customers would expect – and international footprint. For its deserve – something better than the expansion into markets in the status quo. Americans didn’t want United Kingdom, Slim Chickens greasy chicken that came in a soggy needed a partner with the Slim Chickens knows that a box. They wanted better chicken. capabilities to truly scale the successful master franchisee- So there, in a little city nestled in concept they had so successfully franchisor relationship is not a the woods, Slim Chickens was born, honed domestically. one-way street, and that both the franchisee and franchisor have to truly trust one another. Slims found that trust when it inked a master franchise agreement with Boparan Restaurant Group, cementing the brand as one with the potential for explosive international growth. Slim Chickens partnered with the London-based restaurant group as their master franchisee overseeing the development of their business in the U.K. market. With 10 U.K. locations and more on the way, Boparan knows first- hand the possibilities that the Slim Chickens brand has in foreign markets. The opportunities for expansion are everywhere. Utilizing a master franchise
54 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - XxxxxxxxxxxSlim Chickens GLOBALFRANCHISEMAGAZINE.COM 55 GLOBALFRANCHISEMAGAZINE.COM “In the U.K., we have seen a seen a have we “In the U.K., found has even Slim Chickens “We really enjoy working with the with the working enjoy really “We than 150 units With more U.K. A growing fanbase of local of local fanbase growing A U.K. Slimthusiasts fuels the creation opens and customers of repeat possibilities for more up even growth. future to the brand response strong very well,” business is growing and our excited really “We’re Williams says. to be part of the Slim Chickens international success story.” success on parts of the map might not expect you where American chicken to find an city in the Kuwaiti like franchise, and a location in the of Salmiya, Airport, a testament to Kuwaiti simple of Slims’ the popularity appeal. menu and universal can be growth Opportunities for hungry are there wherever found chicken. tasty of simplified, fans SUPPORTIVE NETWORK successful Slim Chickens What makes same things very the are overseas inthat made it a successful franchise support States: a robust the United care truly who of people network other inspire who about the brand invested personally to get franchisees in its success. is a “It Williams says. Slims team,” business people-focused genuine support has been and franchise at Slims is excellent. Everyone ready passionate about the brand, and curious expertise, their to share business.” to help and support our multi-unit sold to 15 different than and more in 2020 groups in currently 500 restaurants well is Slim Chickens development, to becoming a household way on its growth for The prospects name. limitless. are abroad
Slim Chickens’ service model also service model also Slim Chickens’ of thousands of With hundreds what All of this contributes to of options,” says Judd Williams, Williams, Judd says of options,” director. development Boparan’s to us about appealed “What really of the quality was Slim Chickens of the efficiency the branding, and of course, system, operating food.” great mouth-wateringly UNIVERSALLY UNIVERSALLY MENU BELOVED Slim Chickens One of the reasons has such international appeal is would be You menu. its refined to find a culture hard-pressed feature on Earth that doesn’t as a staple of its cuisine. poultry is chicken, there Wherever to be a going always there’s With chicken. better space for its buttermilk marinade and made-to-order hand-breaded, house-made and 17 tenders the dipping sauces, customers a little slice can enjoy over world Arkansas. of Fayetteville, to international lends the brand are customers Whether appeal. or through, dining in, driving always are carrying out, customers smile and warm with a greeted Apart from to please. a desire main Slims’ delicious chicken, is southern hospitality. export has the brand customers, happy fanbase, devoted strong a developed “Slimthusiasts,” as also known helping to fuel the global demand cooked-to- its hand-breaded, for also resonate Fans tenders. order with the southern contemporary and the open and look and feel, of the restaurants, layout inviting to be popular proven have which the world over. “success Williams describes as a in the the brand for story” Boparan had been looking for the the had been looking for Boparan a for searching were we “When “When expanding “When internationally, to is crucial it master a select thatfranchisee understands” perfect franchising opportunity in in opportunity franchising perfect when segment chicken the better After Slim Chickens. found they of options, it a number exploring to see that Boparan for hard wasn’t to it takes what had Slim Chickens overseas. successfully operate to bring to brand chicken better a number explored we the U.K., model is mutually beneficial. When When beneficial. model is mutually Slims with Boparan, partnering absorbed all of its knowledge In turn, of the local markets. working benefits from Boparan with a passionate team that has to ensure the support networks product. success and a refined that infrastructure The expansion has in place already Slim Chickens a of signing the process makes one. an easy agreement multi-unit INSIGHT
How to make international expansion a pain-free experience There can be many pitfalls in overseas expansion, so it is wise to take precautionary measures to avoid them
WORDS BY JACKIE LOBDELL
s a franchisor, expanding the success we have generated their own existing systems in place into foreign markets is domestically can be easily replicated and are capable of doing their own A an exciting prospect, internationally, but this would development. When we partner with but one that does not be a faulty line of thinking. We a master franchisee, we’re not just come without its own unique set of have to be sensitive to cultural absorbing their ability to attract and challenges. Diversifying your regional differences, especially in the food vet prospective franchisees. We are, footprint can reduce your business’ service industry, where customs and in effect, absorbing their knowledge THE AUTHOR dependence on domestic markets. traditions vary greatly. of local communities, economies, Jackie Lobdell is the As members of franchise vice president of consumer trends and cultures. organizations, we’re always hungry franchise development Experience: absolutely Being aware of global trends for growth, growth, and more growth, for Slim Chickens, a necessary and policy will also make your but there can be many pitfalls in U.S.-based better- At Slim Chickens, the first thing we job a lot easier when expanding overseas expansion, so it is wise to chicken concept look for in a master franchisee is a internationally. Want to open a take precautionary measures to high level of experience. We want to franchise in the post-Brexit United avoid them. see that they already have Kingdom? You’ll need to be aware of At Slim Chickens, we’ve found that utilizing a master franchisee to handle overseas franchising to be the most successful way to expand abroad. It’s easy for us as a franchisor to believe that
56 GLOBAL FRANCHISE | ISSUE 5.6 what kind of supply chain disruptions ears on the ground, providing updates have occurred after the U.K. formally on market shifts and identifying “There’s no one who left the European Union. There’s future areas for expansion. no one who knows how to account knows how to account for for policy shifts better than the Know the competition businesspeople who work in those Be sure you do a considerable policy shifts better than markets every single day. amount of research on your foreign To be aware of what global competitors. We all know our the businesspeople who developments mean for business on domestic competitors like the back the ground in foreign countries, it’s of our hands, but you might not work in those markets best to develop a robust network of know anything at all about those on every single day” contacts and business leaders the other side of the pond. Carefully whom you can turn to for advice. study what makes them successful, All of this means that you’ll be That local knowledge can help and if they too are a domestic putting additional responsibilities on reduce costs by minimizing mistakes company gone international, pay the stakeholders within your business. that might otherwise be made by a close attention to how they adjusted foreigner making their first foray Going global is not an undertaking their business to meet the demands into the market. that should be taken lightly, and it’s of international markets. It’s critical to partner with highly wise to make sure team members It is worth considering whether experienced and reliable franchisees are on board with the extra workload you want to outsource certain from the get-go when expanding into and prepare them to confront the aspects of your expansion to ensure foreign markets. Be sure that these challenges that come along that all local policies and regulations initial franchisees are knowledgeable with expansion. are being adhered to. Supply chain, and experienced businesspeople. If your business is a consumer- trademarks, accounting and tax Taking those first steps into an facing one, it is also wise to lay the preparation are all complicated overseas market might feel like foundation for your expansion by enough already, but adding foreign taking a plunge into the abyss – but getting local influencers on board. policies and procedures into the a smart, reliable overseas partner Send them your product and have can steady the ship. mix can cause some real headaches. them start circulating the word to As franchisors, we all know how to Passing off administrative functions increase brand awareness. When it properly vet prospective franchisees. to established local firms can help comes time to open up shop, local But your overseas partners are going your team stay focused on the task consumers are already familiar with to be doing a lot more for you than ahead of them. your brand and will be eager to just operating your local franchises. Some companies will even engage with it. You’ll want them to be your eyes and establish a “beachhead team” on the But don’t feel like you need to ground ahead of their expansion. slow-walk your introduction to foreign Establishing a beachhead team gives consumers. An all-out marketing blitz the franchisor more control over can drum up excitement in ways day-to-day operations, and also can that an incremental approach could give peace of mind to those at the never accomplish. home office knowing the operation Expanding your franchise into is in trustworthy hands. At Slim overseas markets can be a risk, but Chickens, we prefer to go the route of by partnering with trustworthy, partnering with highly-experienced established operators, that risk groups who already have a foothold can be largely mitigated. Then, the in our target markets. possibilities for growth are limitless.
GLOBALFRANCHISEMAGAZINE.COM 57 INSIGHT
Five areas of opportunity to come out of the pandemic How COVID-hit franchisors can use the situation to their advantage – and emerge stronger as a result
WORDS BY RICHARD BEESE
he saying goes: “Within As a master franchisor there consider investing in this every adversity is the are key factors to what you look area now before someone else T seed of an equal or for when growing your franchise, snaps up a perfect franchisee greater opportunity”. and current trading aside, for your business. If you have a scalable idea or the pandemic has brought us business format, which in a opportunity in each area. Exceptional normalized trading environment If you believe you can handle the THE AUTHOR has growth written all over it, then risk and reward of what is on offer property deals If your business requires a Richard Beese is the now is one of the most exciting and to step up and take the bull by the 2 premises to operate and you have co-owner of Flip Out unique times we may ever get in horns, here are some elements and Boom: Battle taken the advice to go and recruit our business lives. worth considering to help you make Bar franchises new franchisees, then a suitable The pandemic has exposed most that decision on whether you want property is a vital part of your companies’ cracks and weaknesses to stand still or push forward in this franchise offering. leaving them bare for all to see, brutal trading environment. With the high street in disarray with even many goliaths screaming globally and consumers shopping for help. This is a time when only Abundance habits changing even pre-COVID-19, the strong will survive and in of potential now is the time to get in the market some way has created a last man franchisees and start to test what is on offer – standing environment. 1 COVID-19 has changed most you may be pleasantly surprised. I say the above confidently industries forever, affecting the way For the first time that I know of, it because our businesses are in both most of us work. This, along with is very much the tenants’ market, leisure and hospitality, arguably the essential need for countries and I could even go as far to the hardest hit industries alongside to lock down, has given rise to say that landlords need the retail high street. Despite career changes for many different us more than we U.K. government assistance and reasons; for example, realizing need them – if relief packages, we are left being the benefits of what working from this is the locked down with ample time on home can bring, having more case in our hands to consider how we can hours in the day, and generally your take advantage of this unintended having more downtime to reflect situation we find ourselves in. on what is important in life and even contemplating if now is the time to make that change to pursue “As a master franchisor whatever dream you have in life. This has all led to an increase in there are key factors to franchisee interest. Reports are telling us that a large number what you look for when of private individuals and households are sitting on cash growing your franchise, which is unable to be spent, such as redundancy packages and current trading or even savings burning a hole in prospects' pockets. aside, the pandemic has There has never been a better time to be in the brought us opportunity market for attracting new franchisees to your product in each area” or service, so seriously
58 GLOBAL FRANCHISE | ISSUE 5.6 sector, you need to go and test Take advantage unobtainable and employed, but the market. Pension funds and of the abundance have been let go purely because of landlords of all scales have cash to of talent on the climate and are willing to take invest in properties and are always 3 a drop in salary because of the willing to do a deal, sometimes the market necessity of requiring employment. Finding the right calibre of rent-free. Remember, most companies aren’t candidate to fulfil various roles To mitigate the risk on taking a hiring right now. within your company can always lease in this climate make sure your I would suggest creating be challenging and hiring talented lawyer adds a COVID-19 clause into performance-related packages personnel can be costly but the lease negotiations; the potential within their deal, otherwise a year usually worth the money when of another lockdown is all too real or so in the future if the economy they perform. and if government intervention is recovering you could start to The pandemic has flipped that stops you from trading this clause lose these candidates for more on its head. We have started will protect you. It means that if are generous job openings. I advise interviewing for high-level senior not allowed to trade, you do not pay being sensible when attracting management positions and rent or accrue a liability on your them for the longer term and uncovered a whole treasure balance sheet that you have to pay incentivise them to reach pay trove of exceptional back at some point in the future. levels they were seeing before. It people whom Why agree to put a loose noose may mean they will have to work technically around your neck knowing the harder for you than they had in the should be reality that these lockdowns could past, but this is only a win-win for raise their heads in the future. you and your business.
GLOBALFRANCHISEMAGAZINE.COM 59 INSIGHT
Make savings as in most cases the majority of will be players in your sector who across the companies in the U.K. were not you follow that will be showing company covered by business interruption cracks of stress – this can be 4 insurance and specifically related from creditors calling in loans, Now is a good a time as ever to a virus, however, your insurance mismanagement and inflexibility to make strategic savings across may be heavily geared towards to adapt to the climate, cash your company. When times are good supplying cover when you are open; holes that were already growing we can all invest in areas that aren’t for example, if there is a higher risk but have been stretched at an necessarily core to our business, to injury partaking in activities in accelerated pace. but when situations arise that your venue like a gym or trampoline This may create opportunities to are out of our control and trade park. If so, speak with your broker. acquire parts or all of their business drops off a cliff due to unforeseen They may be able to apply a short at a favorable value to you, or you circumstances, every pound or term drop in cover to take on board can even step in and purchase dollar must be scrutinized. the fact you are not trading. the pieces you need from the Start by looking at all non- If you are owed money from any administration. It is sensible you essential costs and scrap them debtors, now will be the time to keep abreast of your competitors or, if you can’t, at least freeze call them in, and stand firm on the and also link arms with your allies; them immediately. Then, go urgency to recoup the monies that you never know when you may need through every suppliers contract, are owed. Be relentless. to pull in a favor and who will be utility companies, and service In moments of crisis similar to around to give you a hand should providers agreement and consider what we are seeing in COVID-19, you ever need one. which ones you could attempt to it is paramount you act without The trading environment is renegotiate. Remember: firms are hesitation. Any cash that leaves opportunistic at the moment. I being squeezed from all angles your bank could be the difference believe in every sector, even if and every pound or dollar to them between make or break for you and you are a micro business, there is likely to mean as much as it is your business. Who do you want to is opportunity to leverage from to you, so the potential of them survive through this, you or them? this situation. losing a customer when it comes Having said that, we are all in this It is also a time to be extremely to the end of that contract because together and everyone should share savvy and make sure to be the last they were inflexible to your the pain in some way or another; man standing, because he who is circumstances at a time of need, the support you are shown now will left will definitely reap the rewards could be too much of a risk they help you make a better judgment to to come. are willing to take. Be firm and calculated in your whom you will continue using once approach: some suppliers and out of this crisis, so remember it contractors will become more goes both ways. flexible if pressure is applied but assess that with each call. Keep an eye on And finally, never hide your head your competition in the sand. Communication 5 Companies are going in these kinds of times is not into administration at an only fair business but shows a unprecedented rate and it is supplier you are dealing with your my view that we are problems and remember they only at the tip of maybe offering you a compromise the iceberg as to before you ignore them. what damage the Study your insurance contract, pandemic has done to many businesses – and even entire “There has industries. There never been a better time to be in the market for attracting new franchisees to your product or service”
60 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - FlannelJax’sXxxxxxxxxxx
GLOBALFRANCHISEMAGAZINE.COM 61 GLOBALFRANCHISEMAGAZINE.COM The comprehensive system The FlannelJax’s system The FlannelJax’s AT A GLANCE AT FLANNELJAX’S Established: 2018 Seven outlets: Number of franchised in development) franchised (three of units: U.S.A. Location - $459,000 $180,500 range: Investment capital: $150,000 Minimum required Contact: [email protected] flanneljaxs.com/franchise the necessary guidance to guidance the necessary the idealfind and create venue. FlannelJax’s an ideal FlannelJax’s makes executive for opportunity owner/operators or franchisees to grow. a fun business looking for grow a successful brand. a successful grow businessprovides proprietary management software, online and in-persontraining, fulsome and all support, marketing A STRONG FOUNDATION locations of just a handful With in pre-opening,open or looking for is FlannelJax’s owners, orsingle and multi-unit franchiseesinternational master boththe its footprint to grow in the And U.S. and internationally. brand has experienced leadership to support team that this; the has Supermarketsthe Metal grown networkto over 100 franchise is countries locations in four otherexperienced in numerous and businesses.countries and franchising know They to how knows FlannelJax’s
The beauty of the FlannelJax’s the FlannelJax’s of The beauty The FlannelJax’s experience will The FlannelJax’s area residents and businesses Gen-Z and millennials With alike. taking over the – twoworkforce generations that prioritize –experiences over products there is a growing emphasis by team buildingbusinesses on and rewarding employees with experiences. and fun group quality the entire staff it’s Whether a single or a small business of a largeteam from organization, companies are looking for to share with experiencespremium – and FlannelJax’s employees their boxes.the checks all experiencethat itthrowing axe is This and inclusive. thrilling, is fun, you need a golf where outing isn’t a or to be an experienced player, dinner where you getonly to talk you. side of the people to on either empowers and leads FlannelJax’s andeveryoneto mingle, laugh a perfect It’s together. participate a great– or corporate outing night with friends. Friday THE PERFECT TIME THE PERFECT TIME JOIN TO is poisedto re-emerge FlannelJax’s in a world where people will be in-personcraving experiences and companies will be focused team-building and sustainingon engagement.employee be a welcome change and a great reconnecting. And asvenue for to a remotemore companies adapt working businesses environment, opportunitieswill be looking for and engageto gather employees. will bethere. FlannelJax’s
Extreme. Extreme. hen Andrew Arminen decidedhen Andrew throwing with some axe try to the he was captivated by friends, the unique group potential of Social. Fun!Social. cutting down the axe throwing competition throwing axe the cutting down Unable to stop thinking aboutthinking axeto stop Unable W PERFECT FOR ANY OCCASION a first-class and anvenue The combination of games made FlannelJax’s of exciting variety initial location a hit with Minneapolis throwing, Andrew led the creation ofthe led throwing, Andrew the Metal the rest of with FlannelJax’s, – anSupermarketsteam ownership visionTheir brand. franchise established B2B safe and inclusiveto create a premium, was above.throwing experiencethat was a cut axe experience. Tossing axes was great, but the but axes was great, Tossing experience. venue was a divethere was little concern and the concept had so safety; but guests’ for potential.much “FlannelJax’s is poised to is poised “FlannelJax’s where re-emerge in world a in- will be craving people experiences” person From corporate groups to girls’ nights out, FlannelJax’s is nights out, FlannelJax’s girls’ to groups corporate From BEHIND THE BRAND: PARTNER CONTENT PARTNER BRAND: THE BEHIND BEHIND THE BRAND: PARTNER CONTENT
FASTSIGNS AT A GLANCE FASTSIGNS INTERNATIONAL, INC. begins 2021 Established: 1985 Number of franchised outlets: Over 740 Location of units: U.S. and Puerto Rico, U.K., Canada, Chile, Grand Cayman, the stronger than UAE, Malta, and Australia (where centers operate as SIGNWAVE) Investment range: Cobrand: $96,881 – $206,501 Conversion: $106,054 – $219,842 ever – and New center: $218,596 – $298,679 Minimum required capital: $80,000 Contact: [email protected] / +1 (888) 285-5935 ready to grow fastsigns.com
success comes first. When the pandemic began to impact our Ongoing support has allowed franchisees to industry, we fought to ensure FASTSIGNS centers across the U.S. survive and thrive could continue to operate, and we’ve continued to be by their side to help them every step of the way,” says fter a year that left no new, co-branded, and conversion Mark Jameson, chief support and business unaffected, centers worldwide and opening 30 development officer, FASTSIGNS FASTSIGNS remains at locations, including the brand’s first International, Inc. “We’re incredibly A the top of its game – and center in the Dominican Republic. proud of how our franchisees ready to continue its domination Much of FASTSIGNS’ success in adapted to the changing climate by of the sign, graphics, and visual 2020 can be credited to centers tapping into the diverse product communications industry. being deemed essential businesses, range we offer so they could fulfill The award-winning franchise allowing franchisees to pivot their the unique needs of their customers. reported a strong year of growth services to focus on what matters “Throughout the pandemic, amid the pandemic, signing 31 most – serving their customers. our franchisees have continued franchise agreements to develop “At FASTSIGNS, our franchisees’ to manufacture critical signage, plexiglass shields, and more to help hospitals, local governments, and businesses communicate important health and safety information and to protect communities. Their role of being the go-to resource for visual communications in their communities continues to grow stronger every day. The growth and momentum we’ve experienced is a true testament to the strong FASTSIGNS network, our brand’s ability to adapt systemwide, and the rising demand for signage.”
WORLD-CLASS SUPPORT DURING UNPRECEDENTED TIMES Thanks to FASTSIGNS’ exceptional support team that worked around the clock to help the system succeed, even new franchisees were
62 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - XxxxxxxxxxxFASTSIGNS
GLOBALFRANCHISEMAGAZINE.COM 63 GLOBALFRANCHISEMAGAZINE.COM Jeffrey Chudoff, a FASTSIGNS Chudoff, a FASTSIGNS Jeffrey have would it what “I could not imagine “I could not imagine what what imagine not “I could like been have would it the during operate to without pandemic the and FASTSIGNS of support of franchisees” network our focusing on its co-brand and conversion and conversion on its co-brand focusing business help existing which programs, store to their add a FASTSIGNS owners business to a their convert fully or has FASTSIGNS franchise. FASTSIGNS of print shops,helped countless owners stores, studios, camera photography diversify shops, and more, embroidery lines and services to meet product their signs, graphics, demand for the growing visual communications. Both theand and opportunity franchise co-brand with only be started can conversion fee. franchise on the initial down $15,000 Shade, New in Maple franchisee as theyears 30 spent over Jersey, of an independent sign shopowner his business into a converting before credits He in 2016. franchise FASTSIGNS family being a part of the FASTSIGNS his success in 2020. for during the pandemic to operate been like without the support of FASTSIGNS of franchisees,” network and our small “While so many Chudoff. says closed their businesses struggled or $1m in exceeded we permanently, doors in was truly time. I the first for revenue myself.” but not by myself, business for
FASTSIGNS is aiming to sign at is aiming to FASTSIGNS is particularly FASTSIGNS “We look forward to growing this to growing look forward “We FASTSIGNS is positioned to FASTSIGNS business a strong provide to ready people for opportunity the leap into franchising. make this agreements least 35 franchise such the U.S. across in markets year the Midwest,as Southern California, and along the England, New Additionally, Corridor. Northeast its is focusing the company on the development NerdsToGo aiming to sell 30 franchises U.S., of its plans to as part nationwide in new presence the brand’s grow markets. and existing CREATING CREATING OPPORTUNITIES FOR NEW AND EXISTING ENTREPRENEURS the FASTSIGNS year, the last Over business model has continued on,the pandemic drags privacy, and video conferencing. and privacy, are systems functioning IT Poorly headache and productivity a huge and consumers for constraint needwho small businesses alike solutions. reliable franchiseeswith existing business the NerdsToGo and introducing of potential group to a new brand adds and customers,” franchisees value is to add goal “Our Monson. as to expandwell to the business as as a brand the NerdsToGo and grow standalone business.” The brand its resilience. to show but also is strong, emerged not only As in 2021. growth poised for
“We are excited to officially to officially excited are “We has been franchising NerdsToGo important is more Connectivity Kevin Leamon signed a franchise Leamon signed Kevin incredibly “Looking back, I feel I had the way, the “Along To cap off an already successful cap off an already To Inc., parent Holdings Fastsigns year, also made of FASTSIGNS, company with the addition acquisition its first IT an emerging of NerdsToGo, to its portfolio. services brand, a growing NerdsToGo, welcome in the IT organization franchise family,” services business, into our CEO of Catherine Monson, says FASTSIGNS International. “We lies ahead for what to look forward the especially brand, this exciting will benefit that continued growth franchisees, customers, NerdsToGo and team members.” the and is a part of years four for services IT and growing large with 26 franchise industry states. locations in 16 only with COVID-19 than ever working,accelerating remote online learning, and business require which – all of continuity security, networking, error-free FASTSIGNS ACQUIRES ACQUIRES FASTSIGNS NERDSTOGO I’m thrilled to be part of this brand.” dynamic the expert in the sign industry. in the sign industry. the expert able to open in a timely manner in a timely able to open pandemic. during the in with FASTSIGNS agreement celebrated July and in 2020, March in opening of his center the grand Springfield, Illinois. business new had my to have lucky months four up and running in just As period. during such a challenging the support franchisee, a first-time and guidance that FASTSIGNS this new as I navigated offered process helped the entire endeavor Leamon. says run smoothly,” to tap into the opportunity of existing network impressive they to discuss how franchisees the adapting throughout were pandemic and learned so many tools that I could invaluable was It center. into my incorporate FASTSIGNS how to hear motivating to meet pivot could quickly centers and events the needs of current as themselves position further BEHIND THE BRAND: PARTNER CONTENT
AT A GLANCE CHAIIWALA
Established: Living to serve 2015 Number of franchised outlets: 35 Location of units: U.K. the community Investment range: £200,000 - £250,000 Minimum required capital: £200,000 Contact: Chaiiwala is looking to bring its service-focused [email protected], 0116 3677485 offering to markets around the world chaiiwala.co.uk
York City. Constant inquiries are haiiwala is a fast-growing brand 35 unique and stunning stores coming in from franchisees that looking to disrupt the billion-pound throughout the U.K. market. Its aim have recognized the potential of this hot drinks industry with its variety is to be recognized as one of the top C global-focused brand, and Chaiiwala of chaii and urban-style desi street casual dining and beverage brands is always looking for the perfect food. In the same way that the original Chaiiwala in the U.K. and globally, and to global partners to take its simple on the streets of India was the epitome of the achieve this, it is looking for suitable but effective model into entirely new community he or she served, this brand lives for franchise partners that can develop international regions. the community it serves. Chaiiwala in South Asia, the U.S., and The organization refuses to rest until the Middle East. Chaiiwala has become everyone’s favorite The brand’s current development ORGANIZATIONAL source of high-quality chai and desi street pipeline includes 50 additional U.K. STRENGTH food. It plans to achieve this goal by offering a stores in 2021, and a further 60 in Franchisees who partner with varied, approachable fast-casual operation, with 2022. Because of this incredible Chaiiwala can be confident that dine-in, takeaway, and delivery options so that growth, Chaiiwala doesn’t currently not only have they joined a consumers can access Chaiiwala’s iconic menu have any further territories available rapidly-growing brand, but from wherever they are in the world. for this saturated market. It has that they will also receive signed up a total of 200 locations ONE TO THREE OPENINGS considerable support to ensure among its current franchise network, that their locations not only A MONTH and plans to open one to three new thrive, but stand apart in their Chaiiwala began its franchise journey three sites every single month. years ago, and since then, it has opened over However, in early 2021, the brand respective markets. will be entering North America Chaiiwala’s experienced and Canada with the opening of management team and strong the first Chaiiwala locations in the industry knowledge positions the Great White North, as well as New brand as a thought-leader in the
64 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - XxxxxxxxxxxChaiiwala
- Nil Naik, franchise director franchise Naik, - Nil GLOBALFRANCHISEMAGAZINE.COM 65 GLOBALFRANCHISEMAGAZINE.COM Standout menu items include include Standout menu items menu is also highly Chaiiwala’s on its journey Chaiiwala Join “Constant inquiries are are inquiries “Constant franchisees in from coming the recognized have that this global- of potential brand” focused the likes of Karak Chaii and Karak Chaii and Karak of Karak the likes Rolls, Desi Paratha Kebab Coffee, and Karak Spreads, Breakfast this ever-improving It’s Cake. Coffee that has enticed range product visit Chaiiwala to customers and has week, multiple times every an increasing to take led the brand like competitors from share market Costa and Starbucks. strong and the brand’s photogenic, presence command of its Instagram awareness brand leads to organic The customers. among its many page Instagram official Chaiiwala and its followers, 45,000 has over among also shared are products customers; thousands of happy and even leading to lead generation growth. further to success, and bring its beloved local market. your to offering
In-house chefs also search chefs also search In-house INSPIRING MENU differentiators One of the key in the competitive Chaiiwala for is its iconic market fast-casual with a menu offering, product on a customers that takes into the heart directly journey lunch, With breakfast, of India. options catering to a and dinner always there’s wide demographic, to serve. somebody retention, and Chaiiwala is is and Chaiiwala retention, the brand looking to grow always As ways. and exciting in new development and such, research of things is at the forefront with the behind-the-scenes, and operations latest technology the being implemented to keep running as smooth experience as possible. as possible. and recipes and test new for central marinades in the brand’s test kitchen, and the Chaiiwala estate team is constantly real locations strategic prospecting with the that align growth for metrics. Put simply: key brand’s with brimming this is a franchise momentum. forward Additionally, Chaiiwala’s Chaiiwala’s Additionally, and franchisees Consumers fast-paced retail food sector. Its Its sector. food retail fast-paced branding, marketing, in-house and social media teams enable spread to quickly the brand awareness and brand product ensuring that among customers; queues have will always stores the latest for of people thirsty innovations. product finance department closely the company’s monitors including financial operations, auditing, tax preparation, daily banking, and other No requirements. financial without succeed can brand and this is solid groundwork, has something that Chaiiwala prioritized so that franchisees of on the growth solely can focus locations. own their integrity looking for are alike in brands and transparency more with now align that they and this is another than ever, made has that Chaiiwala area to future- in order a priority Property the organization. proof in place to is always training and staff development ensure GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:58 Page 66 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 67 INSIGHT
How brands can successfully expand internationally in 2021 What franchisors need to know when it comes to exporting their brand, from concept adaptations to cultural differences
WORDS BY STEVE SCULLY
hen taking on operations are dictated by the another country, adding staff in the assignment social and cultural standards in the different time zones is vital as W of international each country across the globe. more support is critical for success. expansion, franchisors Therefore, brands need to be A new headquarters office isn’t must understand the requirement mindful of where they are planning necessary, and franchisors can even for a high level of deliberate to put their footprint next, and contract out support, but no matter planning and intentionality. The partner with the appropriate the avenue taken, the staff must THE AUTHOR complexities that naturally come organizations to assist in entering understand the market. Steve Scully is the with the development of brands the respective market. How a Moving into Australia and New executive vice beyond their domestic borders company does business in America Zealand, we immediately observed president of sales challenges with communication at and marketing at makes the task different from might not work in every country, Express Employment growth within their home country. but there are some areas where it our U.S.-based call center due to Professionals and has Express Employment could work efficiently. For example, the various time zones. To combat played an integral role Professionals was founded in 1983 in countries where English Common the problem, we had to either in the international and began franchising in 1985. Over Law is practiced (including open a 24/7 call center, or create a expansion of the the past three and a half decades, Australia, India and South Africa, presence in each market to offer the country for six years we’ve grown to more than 810 among others), business laws are necessary support. locations across the United States similar, in addition to the legal and Canada, leaving us with only climate. However, this is where the Being open-minded nine to 10 per cent of potential similarities end. and adapting space left for domestic franchise When we entered South Africa in All leaders who took their development. We recognized 2002, we were an immature brand, companies and concepts overseas fairly quickly that with limited and success was limited for a good will tell you there is a gained opportunities available in North amount of time. With only 17 years appreciation on how differently America, we needed to consider under our belts in the States, we business is seen in the United expansion to other regions that were still a fairly young franchisor States. In many foreign markets, were logical for our business. and didn’t have the proper support business takes a backseat to life, Through our growth, we realized structure in place which forced which is unfamiliar to Americans. In South Africa specifically, there are key variables that need to us to face some growing pains businesses will begin shutting down be considered prior to advancing as we were trying to accomplish two weeks before Christmas, and into international territories. international operations. will stay closed until mid-January. Cultural and business Individuals cannot underestimate Time zone challenges the massive cultural differences Parents tend to say that if you differences that exist and will need to make it a International expansion doesn’t have one child, it changes your priority to listen, understand, and necessarily mean executives life. If you have two, it’s more than adapt to these norms. can take their brand and place double the work. The same analogy Changing the entirety of your it in a different country without applies to international expansion, business model isn’t necessary making any adjustments. Business so when you begin to work in as the pure logistics of the brand will not change dramatically, but what is paramount is taking “Business operations are dictated by the a look at the elements that are often overlooked and those that social and cultural standards in each won’t translate to the market being pursued. Additionally, country across the globe” when you are not on the ground implementing regular methods
68 GLOBAL FRANCHISE | ISSUE 5.6 that are executed time and and unique ways to operate, and “In many time again domestically, there while tweaking to local norms in are complexities that arise. a new country, you can improve foreign An example may be how one in your home market by taking goes through a Franchise the time to observe and bring markets, Disclosure Document. back successful processes to When a franchisor has your headquarters. International business takes made his or her mark in a new expansion is not solely taking territory, I’d recommend for them your flag and planting it a backseat to to be flexible and willing to listen somewhere else, it is also life, which is to others. There are always fresh bringing a flag back home. unfamiliar to Americans”
GLOBALFRANCHISEMAGAZINE.COM 69 BEHIND THE BRAND: PARTNER CONTENT Behind the Brand - Camile Thai Kitchen
AT A GLANCE CAMILE THAI KITCHEN
Established: Meet Camile 2010 Number of franchised outlets: 35 Locations of units: U.K. and R.O.I. Investment range: from £50,000 to £450,000, depending on model Thai Kitchen Minimum required capital: £100,000 Contact: [email protected] / [email protected] The fastest-growing Thai restaurant brand camile.co.uk/franchising
in the U.K. and Ireland kitchens, Camile has an offer to suit every market. Camile franchise owner Rakesh amile Thai Kitchen to have more plant-based choices. Galaprishnan was working as a is an international The brand was the first home manager in the Camile Tooting Bec chain of healthy Thai delivery chain in Europe to go location when he saw first-hand the C restaurants and home 100 per cent compostable with its potential of running his own Camile delivery outlets, serving delicious, packaging, the first to print calories Thai business. healthy Thai food that is sustainably on menus, the first to deliver by “2020 has been an extremely produced. With over 35 locations and drones, and to carry out free healthy busy year” says Rakesh, “with the counting, Camile is rapidly growing cookery demonstrations for guests support and guidance of the Camile its sustainable and healthy business – and even the first to home deliver Thai team, I feel well-equipped to online and offline. It now aims to a doggy treat for the third of Camile continue my journey as a business continue to leverage that experience customers who are dog lovers. And owner”. In late 2018, he took the and knowledge outside of its core as well as meat lovers, Camile can keys to his first restaurant, and has markets in the U.K. and Ireland. also cater for gluten-free, dairy-free, since racked up high double-digit and vegetarian diets. like-for-like sales, strong gross THRIVING THROUGH profits, and a dedicated restaurant A PANDEMIC PERFECT FOR DELIVERY team to deliver an amazing Unlike most hospitality businesses, Camile has created an innovative guest experience. Camile has thrived through the food product that is perfectly pandemic, as its suburban-based tailored to holding its heat and JOIN A FLOURISHING home delivery model has proven quality during delivery, developed MARKET resilient to the exceptionally over 10 years of research in the food On a broader scale, the food difficult trading circumstances for delivery space. Each touchpoint of delivery market has exploded in the industry. the customer’s journey is closely the last five years, experiencing a Camile embraces many of the considered to create a world- 50 per cent growth over that time trends impacting today’s conscious class guest experience that leads period. The pandemic has just consumers. A decent vegan section the casual restaurant industry – accelerated that. on the menu caters to those wanting including an award-winning app, With food delivery set to exceed which captures up to 50 per cent $164bn in the next four years, of a branch’s business. Camile is well-positioned to take As a modern brand, Camile advantage of this trend. The brand realizes the environment we live in has built a custom online ordering has finite resources and we must system and native application collectively take better care of it. from scratch to ensure ease of Sustainability is key to Camile in at-home ordering and better data 2021, and a number of initiatives mining of guests. support this reality. The branches run their own Since opening its first location in driver fleet, while also maintaining 2010, the business has expanded to mutually beneficial relationships 35 locations through a combination with industry-leading aggregators. of company-owned and franchised This two-tiered approach to restaurants. Many of the delivery gives them a significant franchisees have become advantage over their competitors. multi-unit owners, with franchisee At Camile Thai, prospective Pramod Thankapan currently franchisees will find the on seven sites, with two more opportunity to join a unique under construction. thriving food delivery brand With a variety of formats on with solid support in a booming offer from a core neighborhood market, and incredible home delivery restaurant, to cloud opportunities for growth.
70 GLOBAL FRANCHISE | ISSUE 5.6 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 29/01/2021 15:53 Page 71 INSIGHT
How do I strengthen my supply chain as a franchisor? A smarter, better connected and more sustainable supply chain will not only strengthen your organization, but will bring you a stronger calibre of franchisee prospect as a result
WORDS BY THOMAS KREMER
ncertainty – it’s the count ourselves among those that For example, rental costs for last thing any business were well positioned to quickly commercial properties have gone U needs and it’s been make sure that new trends were down for the first time in many years. one of the biggest reflected in our supply chain and If you need a physical presence for challenges of the past year. But it’s this helped us to successfully your business then you now have the a recurring hurdle to overcome in meet the demand of delivering at opportunity to get a good price in good times, too. scale to customers at home. much better locations than has been THE AUTHOR We know that you simply can’t Challenging times such as this possible for a long time. This could Thomas Kremer is afford to stand still in business: also present new opportunities and prove immensely beneficial for the president of franchise markets, politics and consumer are an excellent time to invest. The types of customers and talent you excellence and demand are in constant flux. In economic effects of COVID-19 mean need to attract – and also complement expansion at AmRest the midst of a global pandemic that there will be consolidation in supply chain management. it’s critical to move even faster many different markets. Last year saw shortages and and be more decisive. This is something tension increase across a wide COVID-19 presented you can take range of sectors and countless challenges that most businesses advantage of. supply chains. This is a moment were unprepared for. Amidst when franchisees long to be the chaos, in many cases it working with an established brand was the “digital and delivery that reduces all the supply chain natives” who thrived and headaches and allows them to focus adapted to find new ways to on their operations. delight customers and keep business on track. At Sushi Shop, we are fortunate to
72 GLOBAL FRANCHISE | ISSUE 5.6 “The economic effects of COVID-19 mean that there will be consolidation in many different markets”
Franchisees benefit from using situation for a franchisee is to have intelligence available to you. Make franchisor’s intellectual property an established partner that already sure you’re using the latest digital rights: their trademarks, manuals has everything in place. Otherwise, tools – technological disruption and systems. And franchisors you have to take a pioneering and the events of the past year should always provide technical approach to innovate and negotiate mean that you can never take your assistance. But, crucially, to perfect your own supply chain eye off the ball. You need to take franchisees need to bring hunger model. Today, that means obsessing advantage of the best solutions at to the table and put in hard work over data and processes, embracing an affordable price. every day with their own team. In digital tools, driving a hard bargain Radio-Frequency Identification 2021, we all need to go the extra with partners, and minimizing (RFID) is one significant change miles to be successful. unnecessary costs and wastage. to the way inventory is managed At Sushi Shop, we have all across the world. Serialized tags or the systems in place and when Interrogate your data chips are embedded or attached to we partner up with a potential Your own business data is an inventory, databases are integrated franchisee we know exactly what it extremely valuable resource when between inventory locations and takes to be successful. We have a managing your supply chain. You retail locations, and managers wealth of experience working with have to review it every day and plan have real-time data across the full franchisees in different countries, accordingly. Of course, in today’s range of inventory metrics. RFID so we are able to provide strong world, what was true last week technology provides a new set of support for our partners, wherever might not be true tomorrow so it’s data on how fast inventory moves they are. Sushi Shop is backed by more important than ever before to through each step of the chain, AmRest, which has almost 500 consider external factors and how specific inventory that isn’t in franchised outlets across the they could impact your operations. demand, and how many employees globe and is the master franchisee Look at changes in customer interacted with that item along the of some world’s most beloved patterns and quickly decide if they way. Keep thinking about how this, restaurant brands. could be an accelerator for progress or similar technology, could benefit Our growth internationally within your franchise network. your business. has given us the knowledge we Never stop interrogating your need to support the success of own data and other sources of Nurture strong franchisees. In this business, partnerships human relationships and relentless Franchisees don't sign up and motivation are critical ingredients. make money automatically. They That’s what it takes to keep your need to understand and supply chain running manage the environment smoothly. The ideal
GLOBALFRANCHISEMAGAZINE.COM 73 INSIGHT
FIVE WAYS FRANCHISORS CAN ATTRACT so fierce, you need to be constantly more research but can result in FRANCHISEES thinking about quality. Is your supply reaping the rewards. chain helping you or hindering you What about cutting down on 1 Provide the data and digital when it comes to providing the best plastic and other packaging? This tools they need product to your customer? It needs is a priority across supply chains 2 Establish supply chain to be aiding your ability to innovate, today. For example, businesses partnerships you can test and launch new categories of need to make sure that packaging depend on 3 Be clear about what it takes products if you’re going to is compliant with the relevant to be successful grow successfully. laws on plastic-free usage. 4 Innovate and take advantage Franchisees must work closely Soon, it’s likely business owners of the latest trends with suppliers, whilst carefully will have to go further still – to 5 Reduce waste and embrace monitoring distribution centres perhaps introducing reusable more sustainable approaches and all parts of the supply chain. packaging – with the aim of They need to enlist the help of eliminating plastic waste. laboratories, research centres, There are countless clever they are going into. They need to transportation companies, and ways to contribute to the circular have the right products – and the certification organizations. economy. For example, Sushi Shop best partners in the business. For It’s vital that franchise partners in France has partnered with an Sushi Shop, this relies on knowing have evidence that they are amazing young company in Lyon the right balance when outsourcing regularly supervised by the relevant that picks up our fish skins for the delivery business, to delivery authorities and reputable bodies to free and transforms them into fish partners such as Deliveroo and ensure safety. leather. They create shoes and Uber Eats, and negotiating the wallets from waste. best contracts. Reduce waste Supply chain management Franchisors should be able to Your franchise network also needs must be at the front of your supply franchisees with information to consider waste in the supply franchisees' minds on a daily about how they might gain access chain: what is it costing your basis. In more ways than one, to new procurement services that business, and the planet? One of you get out what you put in. At allow them to purchase supplies at the most complicated things to do times of uncertainty it’s even reduced prices via bespoke deals. in the past has been to source more more important to scrutinise As innovation and competition sustainable products. But there is your supply chain. Because you continues to increase, these now more information and more can be sure that a smarter, better opportunities are becoming more options available. This is connected and more sustainable commonplace. They can create increasingly important supply chain will be an integral greater efficiency within the supply for both businesses and part of your success as a chain, deliver double-digit savings consumers. Not only business long into and help franchisees improve the is it the right thing to the future. quality of their product. Solutions do but it can also have of this kind can boost the whole financial benefits for procurement process, making the business. Can it easier and cheaper to get the franchisees get what supplies they need. they need locally? It might take a bit Perfect the product line Let’s get to the heart of your business – your product. Today, when competition is
74 GLOBAL FRANCHISE | ISSUE 5.6 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 75 BEHIND THE BRAND: PARTNER CONTENT
AT A GLANCE TRIB3 Established: 2016 Forget what you Number of franchised outlets: Six franchised of 13 outlets Location of units: Sheffield, Leeds, Helsinki, Moscow, Madrid; Cuzco, Basilica, Goya; Guangzhou, Bristol, Edinburgh (opening Q1 2021), think you know 2x Manchester (opening Q2 2021), Amsterdam (opening Q2 2021) Franchise investment: Enquire for more information Contact: about boutique [email protected] trib3.co.uk/franchise
fitness SIGNATURE THREE-ZONE WORKOUT The answer, says chief development officer Karl Dietrich, lies in TRIB3’s TRIB3 is evolving this popular business model unique studio design and highly- curated brand. “Since TRIB3 was launched in he events of the previous continued to open stores in the 2016, with our signature three-zoned year have certainly had a very midst of the pandemic, with a workout, which sees customers T profound effect on many, if third franchised location opened in train across Treadmills, Resistance not all, industries globally. Madrid and a 42-spot studio opening and Intensity, what we call our The fact of the matter is that not all its doors in the heart of Bristol in TRI training system, we’ve been businesses will survive the COVID-19 September 2020. TRIB3 also has augmenting and evolving the pandemic and sadly, some operators several more planned openings experience to what you’ll now see have been forced to close their doors as a on the horizon including a sixth today if you step foot in any TRIB3 result of this vast commercial pressure. international territory with a first studio,” explains Dietrich. One operator bucking this trend is store in the Netherlands, two stores “It was our vision to take the TRIB3. The boutique fitness brand has in Manchester, a city with a clear fundamentally powerful elements appetite for boutique fitness, and its of the boutique fitness proposition first site in Scotland on the grounds – such as the strong relationships “All you need is a passion of the historic Edinburgh Academicals forged in the group setting and the for bringing people together rugby club. So how, with a model experience-led design this type known for its more intimate, of offering demands – but make it and providing exceptional class-based formats and highly accessible. Our one studio, close-knit communities, is TRIB3 one workout model is carefully and uniquely designed so that each customer experience” powering forward? studio will typically feature more than 48 spots-per-session. “We term it the ‘volume boutique’ model because we’re able to scale up the power of the group, the power of the community, to something that’s really commercially exciting.” This volume boutique model means that each new TRIB3 studio can break even at prudent and highly achievable occupancy levels through peak-usage loading. As well as enhanced cleaning measures, TRIB3 also adjusted the layout of its studios, adding dividers and creating distanced training lanes, but also adapted the timetable based on feedback from customers around their changed consumption habits. This ensured that while distancing would mean reduced capacity, as the model is built on a prudent occupancy rate even with reduced
76 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - TRIB3Xxxxxxxxxxx GLOBALFRANCHISEMAGAZINE.COM 77 GLOBALFRANCHISEMAGAZINE.COM actually need to be from the fitness need to be from actually with to start franchising industry wider “The Dietrich. says TRIB3” decades of support team and I have to support in the sector experience and set the process through you CEO our success. In fact, up for you onewas Yates Kevin and founder boutique of the U.K. of the pioneers you need is All fitness market. bringing people a passion for exceptional and providing together fuse that experience; customer concept and an proven with our If that will follow. amazing journey your in touch – get you, excites could start today.” future “The fitness industry is such an is such “The fitness industry workout in the world. It is also It world. in the workout the Live, TRIB3 complemented by offers which virtual platform, brand’s on to train customers the option for the brand’s This grows and offline. with a at scale and comes reach financial kickback to the franchisee also store at their customers when withPlus, virtual workouts. utilize it takes to stay, digital fitness here from and production the effort away another and offers owners store of revenue. stream with a sector and in-focus exciting key ahead. My bright future hugely don’t you be that would message
The highly curated design and curated The highly butDesigned to be intensive Dietrich continues: “These results “These results Dietrich continues: the longer- in “This is also evident with such a resilient “Naturally, GROWTH, DESPITE DESPITE GROWTH, CHALLENGES model, resilient highly TRIB3’s with even results fast delivers which in place, measures safety COVID-19 has continued tomeans the group through even its global family grow and restrictions. lockdowns business commercially-effective model means that as a master franchise with TRIB3 you’ll partner into owners store recruit quickly with the guidance all network; your experienced and backing of a highly support team and a proven blueprint. Likewise, operational and of the programming the nature TRIB3 means the experience workout appeal consumer concept has strong possible audience the largest across each store. for results great to drive accessible and underpinned by and tracking custom heart rate level, metrics of effort proprietary the most inclusive TRIB3 is arguably highlight how exciting boutique exciting highlight how opportunity fitness is and the huge continue our we as TRIB3 for scores NPS Our global expansion. were 60 and over consistently are – there lockdown after higher even in the and loyalty is such power creating. are we communities TRIB3 business the term results partners; franchise for model offers cent of 80 per matures, as a store will come as repeat revenue your existing your from purchases proportion base and a huge customer will be generated leads new your of this highly from referrals by we’re business model, and exciting bothwelcome thrilled to always master and new franchisees new family our into partners franchise in new network our and to grow – but globally markets, and existing see how we than ever, more now the growing important it is to keep people and more more and get sector session capacity, occupancy only has only occupancy session capacity, session to per marginally to increase TRIB3 saw profitable. store the keep in its rate cent return an 80 per over the after just one month stores U.K. of the country’s lifting of the first with an average national lockdowns, (NPS). score net promoter 78 base.engaged active.” physically BEHIND THE BRAND: PARTNER CONTENT
AT A GLANCE SUMMA Our 2021 global FRANCHISE CONSULTING
Main HQ: Arizona, U.S.A. Contact: [email protected] franchise summafranchise.com
from every industry seeking a franchise business to invest in business rather than seeking another job. POST-RECESSION PRODUCTIVITY Third, governmental aid flows in forecast many forms, including a generally more considerate financing environment in many places for qualified investors. Many of those Taking stock of the year ahead unemployed people will be seeking to control their lives through franchise business ownership, not THE AUTHOR s a leading franchise franchising is a leading indicator of re-employment. Words by Robert consulting company, economic recovery in most markets This is a fairly typical part of the Stidham, founder we are often asked by and we are already seeing certain business cycle post-recession and and CEO of Summa A our clients around the segments of our industry thriving. franchise orders need to be putting Franchise Consulting world to assist them in making Franchisors who are not planning processes, people, and resources in and founder of for active franchise development place to capture the best caliber of Franchise Dynamics forecasts about various countries and markets in the global franchise programs during this year will this potential candidate pool. Fewer marketplace in which they operate likely find themselves behind people doing more work inside of or want to operate. their segmentation growth as companies are leading a workforce Coming off of a tremendously business sentiment improves and change that will expand our pool of challenging 2020, due to COVID-19 commercial momentum grows. available potential franchisees. and its related impact, we see Clearly, the marketplace will Fourth, retail and restaurant franchisors trying to understand pick winners and losers – we see businesses that require a physical a rapidly evolving and changing tremendous opportunity in all types location to function will benefit from economic, social, technological, of service businesses and certain a quite changed commercial real regulatory, and business real estate oriented concepts. estate market. In many places, a environment – along with the Mobile concepts generally continue high percentage of restaurants and marketplace ‘drivers’ that they to do well. Restaurant concepts retail locations have permanently can leverage to help them achieve with the proper service models can closed due to the pandemic. success (or minimize the risks that thrive. Retail businesses that can This substantial amount of vacancy could diminish success) during the figure out how to add consumer means that the real estate market upcoming year – and beyond. value or an experience beyond their should swing from being a seller’s physical locations may thrive. market to a buyer’s market as we move Second, the economic and closer to the end of the pandemic, ECONOMIC RECOVERY franchise recovery will be uneven which should spur development within First, as the COVID-19 virus across the globe and some markets these franchise categories. is controlled through vaccine will recover much more substantially distribution, the global economy than others. Labor markets almost SOPHISTICATED will spring back swiftly. Generally, everywhere will have a difficult time FRANCHISEES creating the level of jobs needed Fifth, franchisees are increasingly to absorb the high percentage of becoming more sophisticated. unemployed created as an outcome We have been watching for “In the future, we expect during the pandemic. several years the transition from The COVID-19 pandemic didn’t the prototypical ‘baby boomer’ a blend of in-person and just impact low wage workers: franchisee to a ‘millennial’ combined with an acceleration in franchisee (the oldest of which distance events to comprise the adaptation of technology forced are now in their early forties!) by the crisis, we are seeing talented and they have quite a different a part of ‘the next normal’ and accomplished management, expectation of the franchise or of franchise business” technical, marketing, salespeople, franchisee relationship. and even executive-level candidates Franchisors that focus on the
78 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - XxxxxxxxxxxSumma Franchise Consulting
GLOBALFRANCHISEMAGAZINE.COM 79 GLOBALFRANCHISEMAGAZINE.COM Our team has decades of has decades of team Our right? My Sounds crazy, need help in either you If Franchise Dynamics, and are seeing seeing are Dynamics, and Franchise with our working in these outcomes variety a clients throughout of concepts. of concepts. in franchising working experience me, this For world. the all over during my sixth recession is my While it sounds career. franchising recessions. I like counterintuitive, an I have is simple: reasoning more of many environment generally qualified franchisees, and less access to capital, easier of competition in an environment franchisors Strong demand. higher need to be offerings with relevant commercial a strong for preparing the for environment franchising future. foreseeable offering, franchise your redefining some operations, or systems, developing assistance in further or organization, franchisee your sales ‘franchise a to explore want your grow to (FSO) organization’ international open new or system delighted to help. we’re markets,
More content demand and more demand and more content More despite the occasional Seventh, adage the old investment Like the leading global also own We of franchise business. of franchise development video in the franchise as a part of the future, are process franchisees’ your as supporting well Smart operations. business ongoing on both focused are franchisors and high touch. high-tech has assertion that franchising it challenged, been more never franchising that good view is our offerings with quality companies exciting had a more never have growth to drive opportunity market franchisees caliber with higher improving in a dramatically year. the end of this by environment is a – there sell high” low, “buy grow to substantial opportunity in an system franchise your of greater marketplace accelerated see broader we momentum as global economic recovery. firm, sales outsourcing franchise days’. In the future, we expect a blend expect we future, In the days’. to distance events and of in-person normal’ ‘the next part of comprise a Sixth, certain aspects of franchisingSixth, certain aspects “Many of those “Many unemployed willpeople be seeking to lives their control franchisethrough business ownership” are most likely forever changed. forever most likely are video more technology, Expect more ‘discovery like events for conferencing success of their franchisees first first franchisees their success of They winners. big will be the parity- on a focused very are relationship, franchise focused want emotional ‘data-driven’, are use technology engagement, and seek a high well, extremely are They of communication. degree the 21st century. built for INSIGHT
Franchising 2.0: How brands can thrive by harnessing innovative technologies CRM technology can help franchise brands to optimize their processes
WORDS BY ADAM HANNATH
he franchise industry Naturally, seeing so many business, which, more often than continues to go from franchises expanding especially not, will have to evolve new ways of strength to strength during a downturn is fantastic news, doing things. T The most effective solution with many franchisors but consideration must be given seeing significant uptake of to the implications of such sudden to this is likely a technological licenses from people looking for growth. For example, a franchisor one. It is no secret that tech has the opportunity to own a proven must be able to monitor how each become a valuable asset to all THE AUTHOR business model and hit the ground unit in their network is performing, manner of businesses. Across many Adam Hannath is running. Between 2015 and 2018 and also quickly identify when industries “digital transformation” sales director at the number of U.K. franchises problems arise. Failure to do so will has become a commonly heard BuddyCRM, a CRM increased by 10 per cent to 48,6000 likely result in franchisees missing phrase, which at its most basic solution developed level is used to describe the by salespeople according to the latest British their sales targets, which could be adoption of new technologies by for salespeople Franchise Association (BFA)/ disastrous for the franchise as a buddycrm.com NatWest Franchise Survey. Fast whole. To mitigate this, there must companies, in order to automate forward to 2020, and the industry is be an emphasis on ensuring regular key areas like payroll or sales. described as “booming” by Andrew communication and adherence to Doing so is increasingly considered Brattesani, head of franchise for systems and procedures. Yet the an essential business activity, HSBC UK, which saw the bank take more the network grows, the greater helping to reduce operational costs, on hundreds of new customers. the administration and oversight improve productivity, increase that is needed to manage it. This profits, and generate an overall can test the organization and better customer experience. It is efficiency of any no wonder then that worldwide IT spending is projected to total $3.8trn
“Over the last few years CRM is something that franchises of all sizes are investing in”
80 GLOBAL FRANCHISE | ISSUE 5.6 in 2021, an increase of four per cent from 2020, according to the latest “A franchisor must be able to monitor forecast by global research and advisory firm Gartner. how each unit in their network is Yet achieving genuine digital transformation is often beyond performing, and also quickly identify the means of most businesses, requiring huge investment, when problems arise” fundamental organisational change, and employee reskilling, with no it to store, update and analyze communication materials using guarantee that it will be successful. franchisee information, monitor the very same information to Costs can run into the thousands, contract renewal dates, build proactively and appropriately if not millions, and even when stronger relationships within their engage with them. This could achieved, savings not realised for network, and manage sales data be anything from sending out many years. and enquiries. celebratory messages when For example, a CRM can weed business is going well, or simple The essential first out unsuitable licensee enquiries, reminders to ensure pertinent step toward digital while automatically collating activities are actioned. transformation potential leads, before storing the It also should be noted that a The reality is that achieving data safely in an easily accessible good CRM stores your database digital transformation should be format. Immediately afterwards securely in the cloud giving access a long-term objective, but that it can be passed over to a only to who you want, when you does not mean franchises cannot franchisor’s sales team to process. want. Individual records can be immediately harness many of the Time consuming administrative locked down to specific team very same technologies that are tasks are mitigated, allowing sales members, sales teams, or regions, employed by the world’s most teams to focus on what they do or locked so they cannot be successful companies. Yet with best. It also helps build deeper accessed or exported. All actions so many digital tools emerging at and more effective relationships are recorded within the CRM so an increasingly rapid pace, the within franchise networks you can see when items have challenge for franchisors is working because interactions with them been amended and by who. The out which ones they should be can be easily accessed in order to chances of losing data or it investing in now to ensure sales understand their financial value being inputted incorrectly are growth and organisational cohesion. and forecast their future needs. entirely minimised. Customer Relationship Analysing data to create Therefore through proper Management (CRM) is a clear meaningful business insights oversight and organisation, example of business-critical is a primary function of CRM a CRM helps ensure shared software and is often the first step software, whether that be the standards and values, high towards going digital, being able individual performance of internal performance, mutual trust, and to automate numerous mundane departments, franchises or leads. effective communication, which tasks in order to improve business Furthermore, a CRM will be able are so critical for the success of efficiency. A franchisor can use to create appropriately tailored franchise organizations.
GLOBALFRANCHISEMAGAZINE.COM 81 INSIGHT
Proving the value Similarly the BNI National Office The right tech can of CRM for U.K. and Ireland has made effort be a game changer Over the last few years CRM is to support its members through for franchises something that franchises of all tough economic conditions brought With the global economy sizes are investing in. Industry about by the coronavirus. Whether facing a “slow and challenging leading sales and service analysts that be through building their economic recovery” according professional networks, supporting and training provider, 59club, is an to the World Bank, businesses their development as confident example of a successful franchisor will have to make efficiency leaders, or ensuring the optimum that has expanded rapidly using savings and informed, data led conditions for the creation of an effective franchising model decisions in order to prosper business opportunities. With since its creation in 2007. A in adverse markets. Given that as many as 500 local Chapters market leader in the provision of industry leaders within the meeting every week and more bespoke performance management franchising industry understand being created daily, it is vital that programs for the golf, leisure, spa, and continually invest in their systems are in place to ensure the CRM, it should be clear that the events, F&B and hotel industries, highest standards of the BNI are 59club has recently completed technology has value. That does maintained, and activities such not mean you have to invest huge the roll out of a new CRM system as marketing and sales support to franchises across the United amounts of revenue to secure a organisational objectives. strong performing CRM. There Kingdom, Europe, the Middle East, Therefore the BNI is currently Africa, Asia and the United States. are a number of market options investing in a bespoke software with a myriad of features and Its purpose is to ensure solution that would enhance price tags. What is important cohesiveness and efficiency its offering to members but is that you find the one that throughout the company’s network, also elevate sales, support is best for you. Remember, but also better support member lead management, and ensure though, that training in the use franchises through technology and accountability. When finalised of your CRM should always be statistical data, by enhancing the its CRM platform will augment part of your package, as well as services they offer their clients. and automate existing marketing implementation and support. Whether that be sales forecasting processes, ensuring that Afterall, in order to get the most and managing prospective business members details are effortlessly out of your CRM, everyone needs opportunities, to improving stored, secure, and accessible. to be able to use productivity via the automation Additionally new enquiries it, but also of client servicing and support will be easily traceable, understand meetings, to basic administrative with reminders in place to how it will tasks such as invoicing. ensure timely responses. benefit them.
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@globalfranmag Global Franchiseglobalfranchisemagazine.com Global Franchise Magazine G globalfranchisemagazine.com BEHIND THE BRAND: PARTNER CONTENT Behind the Brand - FranScape
AT A GLANCE FRANSCAPE
Established: 2020 (in use since 2018) Technology in Contact: [email protected] franscape.io
franchising: “Look at your franchise brand franchisors and accept the cold, hard truth: deserve better it isn’t unique”
Invest in technology to bolster your brand
WORDS BY f I hear another When considering Theo Millward, person tell me I need technology in co-founder and CEO to innovate to survive franchising, this of FranScape, and I in the ‘new normal’, is one of the managing director pivoting, post-COVID, or any other of Swimtime key challenges vomit-inducing term for this current a franchisor economic black hole, I am going to must overcome. By scream. Sound familiar? accepting that what For most, knowing that change is you do isn’t actually needed is not news. The challenge unique means is how. you can free The hardest step to answer that yourself from question is to look at your franchise the concept that award nominations. brand and accept the cold, hard you need some expensive bespoke Some key features the team truth: it isn’t unique. platform cut just for you like a achieved: Yes, you read that right. I might as Saville Row suit. well have just told you your child is There are, of course, certain + Allowing clients to book online in ugly, but sadly it is what franchisors companies that do but it is an 60 seconds, 24/7 need to hear. Trust me, I am one. expensive, complex path fraught + Taking MSF at source To illustrate my point, let’s take a with risks. Chief amongst those + Full visibility of the entire network fast-food brand: is the speed of innovation in technology; no sooner is something Fast forward to 2020 and this + A hungry customer arrives commissioned, it is out of date. It ground-breaking franchisor + They choose something from may have security flaws and become technology, FranScape, is now a menu a never-ending money drain. available in the market for brands + They receive the food When Swimtime, one of the big and small. + They leave U.K.’s largest learn to swim With clients in children’s activity, providers, was purchased from education, and pet care already It doesn’t matter whether you have the founders in 2016, the system signed up, FranScape delivers golden arches above your door, were in place was holding it back. some of the latest capabilities for founded by a Colonel from Kentucky, At that time, what was available on just £35 per franchisee per month or you sell foot-long sandwiches; the the market was not fit for purpose so (with no fees for onboarding or process is basically the same. the leadership team with previous support), allowing networks big Look at it another way: we experience at Blue-chip firms such and small to take advantage off all use either Mac or PC, and as IBM, London Life, and Grant the shelf right now. Knowing they our smartphones are virtually Thornton built their own, utilizing have a technology partner that will exclusively either Apple or Android. their decades of experience. continue to evolve. Most companies use one of a This brought the kind of cutting- So, to answer the question of handful of accounting platforms edge automation to the brand that ‘how’: contact my team. At the because successful businesses don’t is often associated with corporate very least, we can give you some reinvent the wheel when they don’t giants. The strategy worked, inspiration on what is possible no have to. resulting in no less than six major matter what route you chose.
84 GLOBAL FRANCHISE | ISSUE 5.6 GLOBAL FRANCHISE 5_6 master_GLOBAL FRANCHISE 28/01/2021 14:42 Page 85 BEHIND THE BRAND: PARTNER CONTENT Behind the Brand - Office Evolution
AT A GLANCE OFFICE Franchising and EVOLUTION
Established: 2003 Number of franchised outlets: 140 flex space take locations awarded, 72+ open Location of units: U.S. Investment range: $374,000 - $1.6m Minimum required capital: $500,000 flight in 2021 (liquid) / $1.00m (net worth) Contact: Lauren Johnson; franchise@ officeevolution.com OfficeEvolution.com/development Office Evolution is poised for exponential growth of a flexible work environment ffice Evolution, the nation’s for a professional environment close to home is more appealing largest provider of locally minutes from where they live. than ever before. O owned and operated flexible Deemed an essential service, all workspace locations close FITTING INTO Office Evolution locations remained to home that are safe and affordable, is YOUR LIFESTYLE open for members during the stay- poised for growth in 2021. This is a franchise opportunity that at-home orders. With the health easily fits into an entrepreneur’s and safety of its members and staff The franchisor currently has over 70 lifestyle. The coworking location in mind, all centers have taken suburban locations across 26 states and operates during normal business numerous coronavirus precautions is welcoming savvy entrepreneurs to join hours, with only one employee, and are following CDC guidelines, its expanding ‘Ohana’ – Hawaiian for enabling franchisees to achieve including social distancing family, as demand for flexible workspace work-life balance. throughout the office, a face-mask surges. The brand’s model fills a niche The simple, single employee policy, and temperature checks. In for suburban-based workers looking business runs with 93 per cent fact, 10 new locations opened since recurring income. As a business-to- March 2020, proving the strength “It’s great when you can business service, franchisees are and viability of the brand. working with professional clients What is truly unique about Office create a community that just like themselves. In addition, Evolution is its deep commitment franchisees never need to worry to the Ohana, the sharing of best allows not only for a great about food, expiring inventory, or practices, ideas, and solutions working environment but cash. Franchisees also receive back to ensure success on a local and office, lead generation, call center, brand-wide level. Office Evolution also a place where members and billing support. members, known as dreamers, risk- Office Evolution franchisees have takers, and doers, trust its Ohana can work together to grow the incredible opportunity to build will do everything they can to help long-term wealth while operating them succeed. their businesses” other businesses, owning other Franchisees Michael and Kelly franchises, and in many cases, Wielgus practice this every day. keeping a corporate career. “It’s great when you can create a Power couple Deon and Debbie community that allows not only Boles of Los Gatos, CA, couldn’t be for a great working environment happier with their decision to but also a place where members become franchisees. can work together to grow their “We loved the coworking model businesses. It’s great to see them and knew that the demand would refer business to each other,” says be high in an area like ours, the couple. which is full of tech companies With the pent-up demand for and entrepreneurs,” says Debbie. coworking and entrepreneurs “Plus, we believed in the mission looking for the next big statement and what Office opportunity, franchising and Evolution stands for.” coworking are a perfect match. The office market was way overdue A TIMELY INVESTMENT for a change in order to keep With people hesitant to be in large pace with the evolving way groups in confined spaces, the idea people are working.
86 GLOBAL FRANCHISE | ISSUE 5.6 BEHIND THE BRAND: PARTNER CONTENT Behind the Brand - Metal Supermarkets
AT A GLANCE METAL SUPERMARKETS
Established: A business as 1985 Number of franchised outlets: 100+ Locations of units: U.S.A., Canada, England, Scotland Investment range: $228,500 - $437,000 Minimum required capital: solid as steel $150,000 Contact: franchising@ metalsupermarkets.com An essential business, Metal Supermarkets continues metalsupermarketsfranchise.com to grow while others struggle “Metal ntil early 2020 the term During the past year, Metal “essential business” Supermarkets has posted record Supermarkets U was unknown and network sales in all markets and unused. What a change continued to open new franchise has become a year makes! Now well known, locations to meet the ongoing need this classification has supported for small-quantity metals. a preferred ‘winning’ companies while drastically Metal Supermarkets franchisees negatively impacting others. benefit from a diversified customer choice to build The pandemic is not fair but some base. Stores are not dependent brands like Metal Supermarkets, an on any one major customer or a solid, stable, award-winning franchise network, industry. For example, while have not only continued to operate, the aerospace and tourism and profitable but are achieving sales growth industries have slowed in 2020, business” and success. other businesses emerged – like a The reason? Metal Supermarkets clothing manufacturer producing was essential before and this will masks and medical suppliers to unique concept beyond North continue. It truly is an essential become repeat customers. America and the U.K. and stable, though perhaps boring, Many different businesses The business system – which is so business. But a successful one! require metal, and most of them stable it has not materially changed are also essential. since being founded – offers online AN ESSENTIAL BUSINESS Research by Forum Research and in-store training, a full suite of head office-managed marketing Metal Supermarkets is fully and commissioned by Metal campaigns, a proprietary ERP justifiably an “essential business”. Supermarkets reported that the software business system, dedicated Countless businesses need metal majority of customers saw no operational support, conferences, every day to operate. Whether for impact on their business due to and other franchisee-to-franchisee infrastructure, manufacturing, the pandemic. networking opportunities, as well as maintenance, or even on the frontlines a gambit of supportive materials to of the COVID-19 fight, such as LOOKING TO THE FUTURE help franchisees succeed. hospital maintenance and facemask With over 100 stores open across four manufacturing, businesses have countries, and a business system turned to Metal Supermarkets as a that has been perfected over 35 TURN METAL INTO source for over 8,000 types, shapes, years, Metal Supermarkets is poised MONEY and grades of metal, cut-to-size and for accelerated growth in 2021 and While a metal supply franchise may delivered fast for over 35 years. beyond. The network is now seeking not have been an obvious choice for sales and operational-focused franchise candidates prior to the candidates for single and multi-unit pandemic, Metal Supermarkets has owners, as well as international seen a dramatic increase in interest master franchisees to expand this this past year. Aspiring entrepreneurs are recognizing the value in the stability and potential of a Metal Supermarkets franchise, while being warier of potential pitfalls of other, more trendy business models. With a record number of stores in development, Metal Supermarkets has become a preferred choice to build a solid, stable, and profitable business.
GLOBALFRANCHISEMAGAZINE.COM 87 INSIGHT
Tackling international expansion through the master franchisee model A franchisor of a global brand espouses the virtues of recruiting master franchisees to help grow an organization's international presence
WORDS BY BETTE FETTER
or franchise brands that have found success “When deciding to partner with F stateside, international expansion is often the a master franchisee, you need logical next step. By expanding into new regions your business is not only to ensure they have more than exposed to a larger market, but it THE AUTHOR also opens you to so many different just the qualities of a traditional Bette Fetter is the ideas and ways of thinking that will founder and CEO aid in the continual evolution of franchise owner” of Young Rembrandts, your brand. an art enrichment representation of your brand. They a person or organization that is program that However, there is a considerable may take shortcuts or compromise on qualified to be a master franchisee serves children in amount of research, time, and even communities risk, to consider when deciding to the parts of your brand identity that looks at the big picture. While they are around the world expand your brand into another make it successful and unique. considerate of the smaller aspects of country. It can be difficult to figure In the end, the integrity of the running a business, they often think out where and how to start. As a business should be at the forefront more like a franchisor. If you can’t find franchisor, one option is to utilize of your mind when considering a a partner that encompasses the traits the master franchisee model. With master franchisee. mentioned above, you haven’t found this model, the franchisor hands Another element to consider your master franchisee yet. over control of a territory to a is the person or organization’s Aside from finding the right fit, my person or organization; the master business acumen and experience biggest piece of advice for anyone who franchisee. This master franchisee in franchising. Because you will be is considering the implementation is not only required to operate their licensing an entire region – not just of this model within their system own franchise business successfully a territory like with a traditional is: don’t rush anything. Even if you but must also develop the region by franchisee – the master franchisee receive an inquiry from an interested building and managing a team of has to be extremely business savvy. franchise investor who seems sub-franchisees. While this model Take their previous experiences into promising, it’s important to take a step back and do your research. has the potential to make entering account before moving forward in Ask yourself, will your concept a new market easier, it is essential the process. But, be wary – while even work in their market? that a franchisor finds the right their experience may look good on For instance, an after- fit – the perfect fit – to successfully paper, it won’t guarantee success school program like introduce and grow their brand in an with your business. You may want international market. to consider a kind of trial period. Have the franchisee open one unit, Finding the perfect fit and give them a set amount of time at the right time to ramp-up the business and make When deciding to partner with a it successful. If they can’t handle master franchisee, you need to managing one territory, they are likely ensure they have more than just the not the appropriate fit to own and qualities of a traditional franchise manage an entire region. It is owner (although those qualities are also essential they have a important, too). Take the time to keen understanding and reflect on the values of your brand: awareness of the region what is your mission? If that person itself. To appropriately or organization does not align with market the business, your purpose, mission and values, they have to know their then they will not be an adequate audience. In general,
88 GLOBAL FRANCHISE | ISSUE 5.6 Young Rembrandts will not work its home market, there is always Rembrandts is still relatively new to the in certain countries because of the room for improvement. And, a fresh master franchisee model, we’ve already seen structure of their education system. perspective can offer new insight on the benefits. When appropriately handled, Additionally, your business model may how to further enhance the business. it offers a reasonable way to spread your not be where it needs to be in order to Additionally, on a more personal brand to an entire region or country. You successfully grow the concept – your level, their insight will help you gain can still focus on your domestic locations processes must be nearly perfected a unique perspective into a different while empowering your master franchisee before you can take your brand culture, giving you an expanded view to provide that dedicated support to their international. Overall, it is essential of the world. franchise owners. In the end, when you find that you take your time and consider An additional benefit to utilizing the right person in the right territory at the all potential outcomes before moving the master franchisee model is that right time, all of the work and time put in forward in the process. it doesn’t overtax the home office. will be worth it. Your first commitment is to your The benefits of domestic owners, and they the master may be concerned when franchisee model you announce the As previously mentioned, expanding brand is looking to your business internationally is add international no small undertaking. But, when locations. But, by utilizing this master model, it does reiterating your make the process more manageable. commitment to The master franchisee’s insight and their success, the experiences may help to improve prosperity of the your domestic locations, too. franchise and the low While keeping the integrity of your cost of adding a master business is essential, the master franchise partner, it makes the franchisee – if they’re the right decision easier to explain to the fit – may suggest modifications to franchise system. the business plan in order to make While Young it appealing to an international audience. This is appropriate, and welcome, as they should be the expert source on how to market the brand successfully in that region. Plus, you may even consider implementing their suggested changes in the business plan for your domestic locations. Even if your brand is operating successfully in
GLOBALFRANCHISEMAGAZINE.COM 89 BEHIND THE BRAND: PARTNER CONTENT
Franchise AT A GLANCE FRANFUND
Established: 2006 Location: funding Fort Worth, Texas Contact: [email protected] strategies franfund.com FUNDING VIA SBA LOANS Small Business Administration (SBA) loans are an attractive form for sustained of startup business loans for many franchise entrepreneurs. Under the SBA process, a portion of the loan is guaranteed by the Small success Business Administration, which is a United States government agency that provides support for small businesses and small business Do you have the funding strategy for 2021 owners. SBA loans are serviced through private lenders and have and beyond? generous term lengths. For qualified candidates, SBA loans o two businesses are exactly executive summary that may are a great option because the SBA alike. FranFund designs be presented to multiple incentivizes lenders to provide N flexible funding strategies potential lenders. funding to what may be considered to meet the unique needs of This process ensures that the a high-risk borrower. each business and each entrepreneur. client obtains the best rates and To help a borrower look its best FranFund is involved both in obtaining terms. Once the loan is approved to a lender (i.e. low-risk), FranFund funding for the business’s opening and and in process, the FranFund developed a franchise-specific pre- as the business is ready to expand to support team stays in constant qualification tool called FranScore. additional locations. communication with the lender This tool is used to analyze a During this process, the FranFund and borrower to keep the process potential loan applicant’s credit team determines a partner’s goals moving smoothly. Whether you’re profile from a lender’s standpoint and needs, then designs a funding planning to start a business or and take measurable steps to solution to accomplish those goals. wanting to expand an existing one, minimize any potentially negative The funding solution could be as simple let FranFund help you design and factors. This not only saves time as facilitating a ROBS (Rollover for pick the best funding solution during the loan process, but it has Business Startups) transaction, for you. been highly successful in helping or multi-layered to plan for rapid expansion. The process does not stop at designing a businesses’ funding solution. FranFund deconstructs the loan acquisition process to make it easy for the borrower to provide the right information. FranFund creates a complete loan package, along with an
SAVING INVALUABLE TIME “FranFund is an essential service for anyone starting up a new business. I worked with Mariah Bohn and Jessica Clause and was just amazed at how simple they made everything for me. The hours they saved me are invaluable – I was able to focus on getting my sales going instead of worrying about forms and documents” - Jack K.
90 GLOBAL FRANCHISE | ISSUE 5.6 Behind the Brand - XxxxxxxxxxxFranFund GLOBALFRANCHISEMAGAZINE.COM 91 GLOBALFRANCHISEMAGAZINE.COM
Some of the most commonly Some of the most commonly considering franchise you’re If EXTREMELY PROFESSIONAL EXTREMELY partner selecting a funding to “When it came to I am business up and running, new my help get with work certainly I made the decision to glad Clause Mariah Bohn and Jessica Nicole FranFund. knowledgeable, professional, extremely were the entire throughout responsive very and always B. - Peter process” “I realized that aspiring that “I realized business would owners a financial from benefit provide could who partner funding solutions multiple one roof”under NAVIGATING A A NAVIGATING WORLD DYNAMIC has taught year As the past can happen at a change everyone, with notice. Partnering moment’s and trusted fundingan experienced important in is especially provider ever-changing today’s business climate. in businesses are franchised amountsindustries seeing huge The franchise demand. of pent-up is poised to do extremely industry vaccines as year, in the upcoming well rolled are out, restrictions rolled are begins to return.back, and normal life is FranFund business ownership, all provides It a trusted supplier. one roof funding solutions under simple and the process and makes what on can focus you painless, so growing launching or matters: really business. your
“I realized that aspiring business“I realized leader is the industry FranFund Many entrepreneurs utilize a entrepreneurs Many THE SYSTEM STRENGTH IN IN STRENGTH in 2006 by founded was FranFund industry a franchise Geoff Seiber, experience with firsthand veteran franchise owner, as a franchise franchise and new developer, spending decadesAfter creator. Geoff recognized in the industry, consolidated franchise a need for funding solutions. benefit from would a owners who could provide financial partner multiple funding solutions under “FranFund Geoff explains. one roof,” of the one-stop- the pioneer was shop concept in the funding space.” and it comes to high-touch when is This service. engaging five-star it comes to assuagingwhen critical and in business owners, uncertainty on the day-to- it helps them focus businesses. of their operation day plans through its proven FranPlan its proven plans through helps ensurewhich program, with all federal compliance then provides guidelines. FranFund administration third-party ongoing the plan throughout ROBS of their this funding plan. of life combination of FranFund-facilitated capitalizationtools in their Custom-tailored strategies. one of the main are strategies with advantages of working a holistic funding solutions provider. ROBS plans are tax-deferred and tax-deferred are plans ROBS ROBS administers FranFund UNBEATABLE GUIDANCE UNBEATABLE with FranFund “My journey were They in July of 2020. started helpful and provided extremely and insight advice professional company From along the way. loan SBA through registration to guide it helped financing, they the end” - Sean M. to through INVESTING IN YOURSELF INVESTING IN YOURSELF VIA QUALIFIED RETIREMENT FUNDS debt, new than incurring Rather would entrepreneurs many business new fund their rather own. already using assets they to do this is by way common A for called Rollover using a strategy This ROBS. Business Startups, or allows essentially funding strategy qualified to leverage entrepreneurs funds to capitalize their retirement business. In addition to the benefits ROBS business, of funding a new portion of a can use any strategies funds, retirement business owner’s one’s to diversify way a great and are investment with an active portfolio over. control have that they areThe processes debt. zero incur the Internal Revenue guided by Service (IRS) and Department of been in place and have (DoL) Labor Retirement since the Employee of 1974. (ERISA) Act Income Security and with a trustworthy Working like funding provider experienced is crucial because theFranFund rules can be complex. secure efficient loan approvals, efficient loan approvals, secure cent a historical 99 per enjoying success rate. INSIGHT
ZorForum: the circle of trust for emerging franchisors Why a peer-to-peer collaborative group for fresh franchisors was formed – and how it's bearing fruit as a result
WORDS BY GRAHAM CHAPMAN, CFE
f the pandemic has whom you share ideas and bring trust primarily responsible for taught us anything, it’s them to fruition. their success. I that we crave contact. COVID-19, unfortunately, has Human connection is complicated that for everyone. That’s Collaborate with in our DNA. Civilizations, after all, especially true when it comes to emerging franchisors weren’t built by the hunters and building the connections and access So, as the franchise community gatherers. They started when small you need to thrive as an emerging was sealed off from the world in the THE AUTHOR groups of people started forming big franchisor. “Pivoting” to this “new summer of 2020, Dave launched Graham Chapman is a normal” (a word and phrase I think PR, social media and groups; working together to create ZorForum: a first-of-its-kind we all hope to eliminate from content marketing innovations like farming and fire emerging franchisor peer networking the lexicon sooner than later) of professional who has and the wheel (the internet and the community custom built for the cancelled conferences and minimal spent more than 10 Franchise Disclosure Document virtual world. The premise behind face-to-face contact has made years helping franchise came a little later). ZorForum is simple. When you’re brands reach, influence it harder than ever for emerging I bring this up because after you a franchisor, you’re part of a very and convert qualified franchisors to develop the circle of select, elite group of people. customer and spend time in any industry, you trust they need to fuel their success. Very few people know what franchise sales leads connect some dots, and you start I’ve spent my entire career helping you’re going through as a founder to realize that you can’t really do franchisors build brand awareness anything alone. You may be the or top executive at a franchise. and grow their franchise systems at It’s an intoxicating career and creative genius who leads the charge 919 Marketing. The most successful experience, with a lot of risk as you create a company, but you still clients we support understand and reward, but because of need a team of smart people with franchising is all about synergy, teamwork and connections. My most important job is helping our FIVE WAYS PEER-TO-PEER clients expand their network and MENTORSHIP CAN HELP build a circle of trust filled with other EMERGING FRANCHISORS franchise CEOs and industry experts Referrals who can help them meet and exceed Looking for a legal partner or marketing support? their goals. Talking to non-competing franchisors who have This is exactly why I knew found great partners can help ZorForum was special when my good friend, Dave Pazgan, introduced the Leads idea to me earlier this year. Dave Looking for strong leads in specific territories? started his first forum-style peer Some of your fellow members who have sold out in those territories may be able to help group of like-minded emerging franchisor CEOs in 2013 when he Encouragement was the CEO of 101 Mobility. He It’s always helpful to vent, especially when those in surrounded himself with other the room know exactly what you’re going through ambitious entrepreneurs – like ShelfGenie’s Allan Young, College Growth Hunks Hauling Junk’s Omar Soliman, Trying to figure out how to grow your chain from and Tutor Doctor’s Frank Milner – 30 stores to 300? You can get some advice from so they could share best practices, the internet – or actually talk to people who have done it connect each other with trusted vendors, and tackle the tough Self-growth challenges keeping them up at night. Interested in being a better leader? Mentorship Dave’s private group was one of from experienced franchisors and industry leaders many throughout franchising and can help with that so many franchise CEOs credit those groups as the circle of
92 GLOBAL FRANCHISE | ISSUE 5.6 the risk, there’s a lot of pressure. introduce emerging franchisors to the It’s undoubtedly true “it’s lonely at power of ZorForum. Chapter leaders “Very few people know the top” and Dave was on a mission are responsible for building a group to scale the forum-style concept – of eight-to-10 members and leading what you’re going through providing all emerging franchisor a monthly three-hour meeting. The CEOs with the access and support chapter leader moderates these as a founder or top they need. intimate meetings and ensures all To his credit, Dave knew ZorForum group members feel comfortable executive at a franchise” wouldn’t reach its potential if he introducing “explorations” – didn’t surround himself with other conversations about key issues offers a “love it or leave it” guarantee on the industry leaders excited to extend they’re struggling to solve that $495 monthly membership fee where they ZorForum’s reach and influence will benefit most, if not all, of the can opt out at any time. ZorForum chapter leaders are motivated throughout franchising. I am honored group members. that Dave asked me to partner with by the same mission as ZorForum’s founding him on this journey, and I know Collaboration works partners – giving back to the franchising the same is true of Stan Friedman, community that supports their own careers. All group members, and the chapter founder of Sensible Franchising, They understand that effective peer-to- leaders themselves, give and receive a consulting practice that serves peer sharing is pivotal for any franchisor game-changing information, advice, emerging franchisors and franchise because, quite simply, networking works. If and encouragement during each suppliers, president of FRM Solutions, it didn’t, trade shows wouldn’t exist. Chapter meeting. ZorForum also offers all and host of the wildly popular, weekly leaders are also excited to connect emerging chapter leaders and members access podcast, Franchise Today. With our franchisors with industry experts they powers combined as ZorForum’s to Slack channels dedicated to each know because there’s something special founding partners, we know we can group (and hot topics like “marketing,” about meeting with, and getting to know, help all emerging franchisors build “legal,” and “franchise development”) people who know exactly what it’s like to their very own circle of trust and get to foster ongoing group and one-on- run a franchise and recruit franchisees. And on the fast track to success. one conversations between meetings. chapter leaders are certainly interested in The key, of course, is recruiting Further, if for some reason a group creating new sources of revenue amidst the chapter leaders excited to member isn’t satisfied, ZorForum COVID-19 pandemic – something ZorForum chapter leadership offers. ZorForum would have been a hit before the pandemic, and I think it’ll be a success afterwards, but it is no question an organization built for this weird time. In a time when we’re all being encouraged to stay in our home offices and meet with as few people as possible, meeting with your peers is a way to reconnect, recharge, and rise above. Dave, Stan, and I are excited to join forces with phenomenal chapter leaders to help everyone in franchising feel less alone, together.
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5 minutes with... CHRIS MCCUISTON The co-founder and CEO of Goldfish Swim School discusses clarity of mission, finding inspiration through family, and achieving excellence operating across North America. Even amid the pandemic, we have remained steadfast GF: What does success look Whether it be a husband-wife and focused on growth. We like to you? duo, a veteran, a former employee closed out 2020 with 19 signed CM: Success is when we grow our from corporate America – each agreements, 14 new school system with the right franchisees and every one adds value to the openings, and another five are who are aligned with our brand franchise system in their own projected to open in Q1 2021. standards: they get it, they want individual way. it, and they have the capacity to GF: What are the biggest operate strong businesses. GF: Who or what inspires you challenges facing your Amid the pandemic, I've and why? industry today? been able to reflect on the CM: My wife Jenny inspires CM: One of the biggest incredible 'Goldfish family' we've me: she's the strongest, most challenges franchisors face built – all working together to compassionate and hard-working is adjusting in order to person I know. In fact, since we're propel this brand to greatness. appeal to a ‘new consumer’ high school sweethearts, I can From supporting each other, profile brought on by the hardly recall a time when she to investing in more units and pandemic. Our main focus growing their Goldfish portfolios, is on educating parents and to making a difference in the helping them feel comfortable communities they operate – returning to our schools, we're finding success with the “One of the greatest and because sadly, drowning right partners. most interesting things doesn’t stop for a pandemic. GF: What are the vital GF: What advice do you components behind a well- about franchising is that have for entrepreneurs run organization? it attracts people from all CM: Organizational clarity – looking to embark on a ensuring the franchisor and walks of life” career in franchising? franchisees are aligned on core CM: Not only should you values and the overall mission seek out an industry you’re and vision of the company. At wasn't by my side. From helping to passionate about, but also be Goldfish, we pride ourselves raise our four boys to growing the sure the business has a long- on articulating a clear and largest and most established swim term vision for success. focused strategy that is school in the space – we have over Once you find it, dive in and consistently communicated. 110 locations across North America commit. Completely immerse – Jenny is determined and always yourself in the culture, the GF: What most interests you leads with her heart. operations, the way of the about franchising? business, and execute that CM: One of the greatest and GF: Where do you see your flawlessly. Commit to the most interesting things about brand in five years? mission, your role and your franchising is that it attracts CM: In five years, we hope to team, and you’ll be on the path people from all walks of life. have 250 swim schools open and to achieving excellence.
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