More and more people continue to lose their jobs and they are searching for alternatives such as those provided by franchising. This was obvious at a recent franchise show organized by The Entrepreneur’s Source in Chicago. The event was extremely well attended and by serious prospects.

People are searching for opportunities and The Economist’s is joining the many resources to available to assist these people  with their virtual fair. This online event will be held June 28-29.

The Economist Franchise Fair connects potential investors with franchisors and consultants who can provide advice and guidance on buying the right franchise. It is completely FREE to attend.

Registration is now open at

http://register.economistfranchisefair.com/?source=expansionexperts

Visitors can:

- Meet franchisors & consultants

- Browse virtual booths of a variety of franchise concepts

- Engage with live webinars & chat sessions

- Log in any time during the 48 hour event from the convenience of their home or office computers

Exhibitors at The Economist’s last Franchise Fair (March 24-25 2011) included:

-Dunkin’ Donuts ®

-Carl’s Jr. ®

-Hardee’s ®

-Maid Brigade ®

-Express Employment Professionals ®

-Carvel ®

-Auntie Anne’s Pretzels ®

-Cinnabon ®

-Moe’s Southwest Grill ®

-Schlotzsky’s ®

-The UPS Store ®

-PLM Franchise Consulting, LLC

Related posts:

1. Looking for Franchise Leads? Start With Your Website
2. 7 Challenges Home Based Franchisees Face

When we went to South Africa in 1992 I got a real understanding of the challenges one faces when franchising in other countries. It was obvious to us that just because a concept was successful in the United States, it was not necessarily going to be so in South Africa. At the time,  however, there was a strong initiative to bring US franchised concepts to South Africa to assist this country with its massive unemployment. What better way to help people who had no training. Franchising would bring the know-how and the experience, or so it was believed. What we soon found out was that the challenges one faces in a different country are totally different than those we face here in the US; and, most franchisors, unless they already have a strong international presence, are not equipped to handle them. Therefore, we focused our energies in developing indigenous franchise concepts.

One of the projects we worked on was Lapa Foods. Clover International was the largest dairy and poultry co-operative in South Africa. They wanted to penetrate the now accessible townships and thought they could do so best via franchising a ‘bodega’ concept using shipping containers. Here are some of the challenges that we faced:

• Opening – To get approval to open the store took over 8 months and many, many meetings with town council and other parties. The most difficult part of the permission process was making sure that we did not step on anyone’s toes and respected the township hierarchy and politics.
• Dust – the dust in the townships used to get inside the electronic cash registers and we had to constantly call a repair person who did not necessarily like going to the township. In  addition everything in the store including all the equipment had to be dusted at least three times a day, whether or not you were busy.
• The Franchisee – choosing the first franchisee was in many ways easy. We were working on a pilot so we partnered with a self- educated resident of the township. To avoid politics we decided to offer a series of entrepreneurial workshops and choose the best student. And, the franchisee we chose was excellent. The problem arose with the extreme success experienced from the first day of opening the location. The franchisee had never seen the amount of cash that he now had. And, the franchisor was not prepared for the level of demand and kept poor records of all the deliveries leading to disputes and mistrust between franchisee and franchisor from the very first week.
• Success – yes, this was a real challenge because it surpassed the most optimistic projections and keeping the store supplied was nearly impossible.
• Staff – the two staff members chosen to help in the store were in their mid-twenties and had never held a job. They were smart and willing, but their lack of experience resulted in an absence of what to us is common sense making training them a real challenge. One time, I took the role of ugly American and was frustrated with one of the staff members because she did not know how to dust the shelves. I will never forget when the franchisee called me aside and said: “Lizette, she has never been taught. She probably has never been this close to shelves of food. Her mother couldn’t teach her. She hardly went to school. She is doing the best she can.” What a lesson!!! I am still grateful to this man after all these many years for showing me my stupidity and my own lack of common sense!

The time we spent in South Africa was not only my best franchising experience; it taught me important lessons about life, people and cultures. Perhaps the most important lessons were to make NO assumptions and to embrace the differences, because it is in understanding them that success exists.

Back in Ecuador the first Papa John’s location had just opened and everyone was excited about it. I couldn’t help myself and had to go visit the location. Did you know that Cuenca, Ecuador has the perfect weather and that there is no air-conditioning ANYWHERE! My question when I saw the new large Papa John’s location in one of the malls was how are they managing with the heat that is generated from the ovens? Also, Cuenca sits at 8,500 ft. above sea level. I wonder how they had to modify their recipe to make sure they got product consistency. Interesting operational challenges. How about sharing yours?

Related posts:

1. Franchising as a Community and Social Development Tool
2. Client Reaches Exit Strategy Objectives
3. What Are the Challenges Faced by Start-up Franchisors?

I had used the perfect word to express my feelings, as well as its causes! That word ‘disillusioned’ was the key.

The dictionary defines ‘disillusion’ as ‘to free or deprive of illusion’. And, I definitely had been under a self-created illusion.  I believed that because the franchise relationship is based on the win-win principle, the parties involved must care ‘first’ about the other party; and, must always seek the win of the other party because it is in the other party’s win that they can find their own.

When the veil of illusion was lifted, I could see that I had created standards impossible to achieve. The problem was in the absolute nature of my belief. The use of the words “must,” “first” and “always” tainted an otherwise true statement.

People in most cases care more about themselves than they do about others. We even see it in the closest of families; so, why on earth would I think that a business relationship would be exempt of this human trait? The franchise relation is dictated by a legal and operational structure that invites more cooperation and more dependency than other business relationships. In more than one way the franchise relation resembles a family. Yet, although it invites cooperation, it cannot make an entrepreneur care more or less about others; nor can it make a franchisee be a better team player. People who are drawn to franchising their businesses, in most cases, feel the pull because of the economic and ego rewards it offers. Very rarely have I heard people express that their main reason for franchising was to help others. That has been my trip, my blind spot, and the cause of my disillusionment. I had created a belief to match my own preferences; and thus, when reality did not match my expectations I felt a sense of discontent and disappointment.

When illusions are lifted one can see, accept, and even appreciate, things as they are. There is nothing wrong with the franchise relationship. There is nothing wrong with franchisors seeking their own gain and franchisees doing the same. That’s just the way it is; these parties are human. The structure of the relationship makes franchisors aware that it’s to their best interest to support franchisees and likewise encourages franchisees to protect their brand and team.

Now that the illusion is gone, I can appreciate the franchise relationship even more for what it is and for what it’s not. In franchising we are dealing with people with their strengths and their weaknesses, and with their humanness. Yet, in franchising people are encouraged to bring their best qualities to the forefront; they have an economic incentive to do so; and when they don’t, they suffer the consequences. Franchisors who don’t support and/or abuse their franchisees experience a shrinking of their network of locations. Franchisees who decide not to follow the franchisor’s system or not to be part of the team have a harder time achieving the success they seek.

Last year’s debate triggered by the CNBC report “Behind the Counter: the Untold Story about Franchising,” in my opinion, resulted in the best of franchising coming forward as franchisees joined the franchisor of Cold Stone Creamery to defend their brand. This is what franchising is all about: the team, the single objective, the win-win. Franchisees and franchisors may have differences; but, like in many families, when an outsider attacks the system or the family, its members unite.

The recent economic downturn definitely has taken its toll and this time franchising was not able to escape it. As many franchisors were not able to respond quickly enough to the economic changes, their franchisees experienced drastic consequences and in many cases failure. Yet, overall, I bet that franchised businesses still have done better than most small independently owned ones.

So, yes, Franchising is not perfect. But, what is?

Related posts:

1. Franchising: the Beauty and the Beast
2. Franchising: a Love Affair by Lizette Pirtle
3. Are franchise relationships dependent or interdependent?

• Vision
• Skill
• Money
• Ego

Vision encompasses those people who want to grow their business quick, yet lack the resources to do it with company-owned locations. They want to enter new markets and understand that the cost and energy to do so themselves may be too high for them. Franchising thus affords these people the answer, as prospective franchisees invest their own capital in the new locations within their markets.

The skill reason category is broad. People seeking to expand their businesses often do not want to deal with more employees, so franchising is a perfect answer since the employees of the new location work for the franchisee. These people are often also seeking more motivated workers than employees tend to be. Franchisees have more to loose and thus have a vested interest in the business. On the other hand, people seeking to expand their businesses may actually lack the managerial skills that a company with multiple locations requires. Franchising calls for a totally different set of managerial skills. Since franchisees are not employees, franchising requires stronger human relations skills than managerial ones.

Money is always an element in the decision whether or not to franchise. Although franchising is expensive to set up, it saves the cost of opening locations as franchisees use their own capital for this purpose. The economic rewards do not have the same potential of an expansion via company-owned locations. However, franchising does not have the risks nor does it require the time and effort that come with the former method of growth.  Franchising creates an annuity. It can also create wealth; and, it can serve as a profitable exit strategy for small business owners. Franchising does not dilute the owners’ equity nor does it necessarily have to create debt.

Finally, there is ego. Yes, ego plays a big part in the decision to franchise. People who choose to franchise their business usually have the desire to see their creation appear all over the place. The yearning to be recognized for one’s accomplishments as a business leader and the longing to make an impact on many lives are also strong motivations to franchise a business.

What are (or were) your reasons to consider franchising?

Related posts:

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2. 5 Tips to Creating an Effective Franchise Operations Manual
3. Who Should NOT Franchise Their Business?

During my first experience working in a franchising company I heard the voiced and common belief that franchisees are happy as long as they are making money. Now, after over 20 years of working in the franchise field, I know that the truth in this statement is not absolute. Although I also have  learned first hand that it always helps when franchisees are financially successful, but for most franchisees there is more to it than just ‘making money’.

I have found that franchisee success has to do a lot with the numbers, yet we must dig deeper. Non financial goals and objectives play an important role, although for some people more than for others. However, there is no question that the numbers are critical and how franchisors deal with them or ignore them can determine the success or failure of their franchisees.

Kate Groom is a franchise expert residing in Australia and her focus is franchisee financial performance. Kate assists franchisors have the much needed conversations around profit, performance, and results. I call these the ‘tough conversations’ because they involve topics outside of the comfort zone of franchisors and the franchisees.

“Most franchisors don’t have a financial background, and lack the experience talking about and managing this subject,” Kate said to me in a recent conversation. “The result of this lack of experience is that many franchisees don’t know where they are going nor do they know how to, or even when, they get there.”

I definitely agree with Kate. Franchisees need clear objectives and a way to measure their results. Kate mentioned: “These days technology has provided franchisors with a multitude of ways to gather, benchmark and report financial and operational information. Sadly, however, lots of people get caught up in the process of creating process; and, we make things complicated just because we can.” Kate continued;  “It doesn’t have to be difficult.”

Franchisors like to tell their franchisees that they need to get back to basics. It seems to me that franchisors need to heed their own advice. As Kate says: “It’s easy to get caught up in the ‘wretched hows’ and forget that we can make a difference one conversation at a time, one franchisee at a time. Sometimes a good place to start is with what’s simple and easy to do with what’s available.”

Kate has lots of great information in her blog; make sure to visit it at http://www.starfishconsulting.com.au/

Related posts:

1. Are Performance Tools Important for Franchisee Success?
2. What’s the Makeup of a Franchisee?
3. Are You Listening or Merely Hearing What Franchisees and Prospects Are Telling You?

And, because I have worked with small businesses my entire career, I know how many of them disregard or become overwhelmed by record-keeping. So, this contest by BookKeeping Express will come to the rescue of one lucky company. Hopefully you will be the lucky one.

__________________________________________________________

CMIT Solutions Refused to Participate in Recession

Nation’s Leading Small Business IT Franchise Expanded at 50 Percent Pace During Downturn

CMIT Solutions is one of the leading small business IT franchise company and it has expanded at a rate of 50 percent during this recent economic downturn. Now that’s something to celebrate!

“Plain and simple, it’s a winning business model,” said Jeff Connally, president and CEO of Austin, Texas-based CMIT Solutions. “We hit home hard on two key differentiators: First, we give downsized corporate America professionals or those seeking to make a career change a successful business model that fills a critical need today; second, small business owners can’t find the type of IT solutions we provide with tremendous affordability anywhere else.”

During the tumultuous past two-plus years in the American economy, CMIT Solutions has flourished as a franchise. Nationwide, the company added 38 new offices in 2009, 26 new offices in 2008, and is continuing exciting growth in 2010.

CMIT has obviously refused to participate in the U.S. economic downturn. Good for them and congratulations!!!!

For more information about CMIT Solutions and franchise opportunities, visit www.cmitfranchise.com, call (800) 710-CMIT or email franchise@cmitsolutions.com.

___________________________________________________________

Contest to Award $25,000 in Bookkeeping and Accounting Services to Small Business Suffering from Financial-Recording Disaster

America’s Small Businesses Savior: The “Great 2010 Accounting Makeover”

From Boston to Tacoma and everywhere in between, small businesses entering the “Great 2010 Accounting Makeover” contest stand to win a comprehensive BookKeeping Express 12-month service package.

HOW TO ENTER:

Business owners and management interested in the makeover must enter the contest by e-mailing a link to a video, photos or a few sentences conveying the accounting nightmare they are facing to makeover@bookkeepingexpress.com. BookKeeping Express will post entries to www.facebook.com/BookKeepingExpress and the winner will be named on Monday, December 20, 2010. All entries must be e-mailed by noon ET on December 17, 2010.

The contest winner will be chosen through a “like” vote system, in which small businesses encourage business associates, friends and family to “like” their entry on the BookKeeping Express Facebook page. The small business’ entry with the most “like” votes will be deemed the winner.

The winning small business will receive:

• A review of previous year’s financials (up to 12 months)
• Comparison reports to industry standard
• 20 hours of consultation (can be used at beginning or spread out)

Plus, BookKeeping Express will give all entrants a waiver on their set-up fee (up to $500 value).

To help ensure a full accounting overhaul, BookKeeping Express will customize its consultative and strategic accounting services for the winner.

So, are you overwhelmed by records? Don’t wait, send your entry today.

BookKeeping Express is a national company with more than 150 locations. For more information, please visit www.bookkeepingexpress.com or contact 877-525-5337.

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Disclaimer: I am not affiliated with either CMIT Solutions nor with BookKeeping Express in any way.

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2. Disillusioned about Franchising?
3. Franchising: what is it, really?

Gratitude is a positive emotion and a way of looking at the world that engenders a sense of well being. Studies have suggested that grateful people are happier, less stressed, and more satisfied with their lives and relationships. They are able to cope with difficulties in a more positive way, hence experience a sense of more control over their lives. So, what does all of this have to do with franchising? A lot!

Gratitude is a choice. We either choose to complain about what we have or don’t have or choose to see the beauty in what we do have and the blessings that come when something is not be present in our lives. It is in that choice that we find the control over our environment. We all have heard the adage that says: “we may not be able to control our circumstances, but we can control how we feel about and react to them.” So, what does all of this have to do with franchising? A lot!

Gratitude is a habit that we create by repeating our choice for the positive frequently. The more often we make this choice, the more ingrained this habit will be. So, what does all of this have to do with franchising? A lot!

If you are a franchisor, you can’t change the way franchisees behave, but you can certainly choose how you will react. Similarly, franchisees have no control over their franchisors’ actions, but they surely can choose whether or not they affect them negatively. It is all about what we choose to see. When either party is upset at the other they have the choice to remain dwelling in the negatives which only creates more discord, or choose to be grateful for the positives such as:

If you are the franchisee:

• The franchisor started a business, took the risk, and created systems.
• The franchisor shares his or her experience with me so I don’t have to make the same mistakes.
• The franchisor is thinking of ways for me to improve my bottom line.
• The franchisor has trained me and continues to train me.
• The franchisor invests in staff to support me.
• The franchisor spends a lot of money in R & D to ensure that my business has a future.

If you are the franchisor:

• Franchisees believed in my concept and in me.
• Franchisees trusted me and invested their life savings in my business idea.
• Franchisees paid me and continue to pay me money.
• Franchisees represent me every single day in their communities.
• Franchisees have stepped out of their comfort zone to implement my system.
• Franchisees share their ideas with me and they also help each other.

Did you hear a ‘but’ as you read the statements above? If so, you need a little bit of work on being truly grateful. Gratitude is all about shifting our perspective. It is not about denying the negative; it is about focusing on the positive that is always there, regardless of the situation or person. So, what does all of this have to do with franchising?

• Grateful franchisees are happier, better performers and validators.
• Grateful franchisors create a productive company culture.
• Gratefulness engenders good franchise relations.
• Gratefulness is contagious.
• Gratefulness produces a positive environment that invites communication.

Gratitude is not just for those ‘tree hugging’ folks, as some may say.  It is for all smart franchisors and franchisees who want success.

So, when was the last time you said ‘thank you’ to your franchisees or to your franchisor?

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• Underfunding

Franchising is expensive to launch. There are legal, operational, and training documents to prepare and management strategies to develop and implement. In addition, once you are ready to offer the franchise you must have funds available to market the opportunity and to support franchisees.

Many small companies have the finances to get the first step done but fall short when it comes to marketing their opportunity or supporting their franchisees. The resulting slow growth caused by not investing sufficient funds in marketing the franchise can be deadly for many entrepreneurs who aspired to recover their initial investment quickly. Their motivation fades away and many stop their efforts to grow their franchise networks.

Other underfunded franchisors may be able to sell franchises but lack the funds to hire the management and staff to train and support franchisees. The result is not only under-performing franchisees but also unhappy ones both of whom affect your ability to sell more franchises.

• Non Sustainable Product or Service

If your product or service is a fad or has the chance of its demand decreasing drastically, franchising your business is most likely not the right move. You may be able to sell franchises, but if there is not a strong probability that your franchisees will be able to make income commensurable with the required investment over the life of the franchise agreement, you should not consider franchising the business.

Another facet of sustainability is your ability to provide value to franchisees in an ongoing basis. In other words, do you have a business model that ties the franchisee to you, that makes it valuable to them to be associated with you? Are you able to offer ongoing value for the royalties they have to pay? Or, is the only thing you have to offer your knowledge of how to start and operate the business? If the latter applies, you should probably not consider franchising.

• Inability to Let Go

If you love what you do and can’t see yourself doing anything else, you may not a good candidate to franchise your business. Granted, it is important to be passionate about your product and your services, however you must be able to let go of your current duties, as the job of a franchisor is different than that of the operator of the business.

If you can’t let go of your current duties, are you willing and able to bring someone else to lead the franchising efforts? If not, you will most likely not be able to grow your franchise and your investment getting it set up will be in vain.

Franchising is a wonderful way to grow a business and it makes sense for many business owners. However, franchising is not for everyone.

Related posts:

1. 7 Reasons to Franchise your Business
2. Sustainability of the Franchise Relationship — THE 4 Keys
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A few weeks ago I commented on a colleague’s Facebook post agreeing with his argument to encourage franchisors to create and implement Social Media Policies and Procedures.  A franchisee of an unidentified brand also made a comment enraged at the original posting and at my agreement with it. Her argument was that franchisors should worry more about support than about policies and procedures. In her mind she saw the two totally different and she seem to see the issue as an ‘either/or’. I can understand her point of view and her anger as I have worked with and known of many franchisors whose only or main objective is the enforcement of the agreement or policies, whether or not they make sense or add to the success of the franchise network.

To me, policies and procedures are not about compliance as much as they are about the support of all franchisees. Franchise procedures are simply step by step explanations or directions of how to operate the business successfully. Franchise polices are guidelines of conduct that allow franchisees to communicate and relate with each other, their customers and the franchisor. These policies protect the brand and therefore the franchisees’ investments. Can policies and procedures be used for compliance purposes? Of course they can; and, in the appropriate circumstances, they should.

True, there are some franchisors who see policies and procedures as a way to control the behavior of franchisees; and, in some cases, just for the sake of this type of control. But successful franchisors learn that policies and procedures are tools to guide franchisees and the entire organization to success. They are not all about compliance, or enforcement, or control; they are about guiding and supporting franchisees; and, as the situation dictates, they provide the legal grounds to protect the brand and the franchise system.

Franchising is all about policies and procedures and successful franchisors use these tools to train and support franchisees. As new technology or methodologies are created such as for example the social media explosion, franchisors must update their franchise policies and procedures to guide franchisees about the best way to incorporate the new technology into their businesses. It is not only the franchisor’s right to do so; it is his or her obligation.

Related posts:

1. My franchisees are using Social Media already. What do I do?
2. Franchisors, Have You Added Social Media Policies to Your OPS Manual? Part 1
3. Social Media: Too much to learn…How do I keep up?

Conflict is not pleasant, but it seems to be part of all relationships at one point or another. In franchising, if conflict is left unchecked it can escalate to the legal arena where communication no longer can heal the differences. Therefore, like it or not, we must deal with conflict and seek ways to resolve it.

• Prevent differences from escalating to conflict.

The answer to dealing with conflict is not to avoid it, instead it is to prevent it. Avoiding conflict can paralyze a person and a company; and, it may also lead to secrecy and lack of communication.

When we avoid conflict we generally create a much bigger mess. Take for example the franchisor who refuses to move ahead with a needed change in the organization because the franchisees may get upset. His or her lack of action is sure to ignite the discontent of proactive franchisees who desire the change. And, the franchisor who keeps information from franchisees to avoid conflict is bound to face a higher level of discontent. We all know that secrets do not stay secret for very long and that franchisees will find out and resent the lack of trust and honesty.

Preventing conflict is about communication. Keeping franchisees informed of what you are doing and the reasons behind your actions and inaction is the only way to keep differences from escalating to larger issues.

• Catch it before it goes to the written form.

If you can’t prevent conflict, at least catch it before it soars. If you allow differences of opinion with your franchisees to go to the point of being discussed in a written format you have let it go too far. When franchisees begin to write down their grievances you may be just a few step away from legal action. And, those franchisors who tend to answer any and all complaints with references to the franchise agreement invite such move. The key is to resolve the differences while you are still talking with each other and the only way to do this is to proactively check the morale of your franchisees consistently and often.

• Seek common ground.

Conflict can only exist when you and your franchisees are pulling in different directions. When dealing with conflict, find the common ground between you and your franchisees. Start the conversation by talking about those things that you agree upon and let these shared values, needs, interests and beliefs be the starting point of your discussion.

• Actively seek a solution.

Franchisors seeking to resolve conflict must contemplate the fact that they may not have the best answer. To be actively seeking a solution means that you are willing to ask your franchisees and to listen openly to their positions and to their proposed solutions. It requires that you give these proposals an honest chance, at the very least in your mind.

• Listen.

Conflict can never be resolved if we don’t listen. If franchisors or franchisees keep thinking about their own needs while the other shares theirs, no listening can take place; and thus, no room for conflict resolution exists. When discussing different opinions we must rescind our need to convince our franchisees that we have the answer, at least long enough to hear them out.

To find common ground and find solutions we must be able to sincerely elicit input from franchisees and truly understand their points of view. We need to put ourselves in their positions. We will never be able to do this if we do not listen. Remember, hearing the words is not listening for the latter requires our full attention AND our embracing the possibility that we may not be right or may not have the best answer.

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