Category: Franchising

Social Media: A Bridge Between Digital and Real Worlds

January 24, 2012January 25, 2012 ·

Businesses are under pressure to crack the social media code. There’s all those tools and platforms to harness, and all those best practices to adopt. Staying on top of it is exhausting. Staying ahead of it is almost impossible.

This was the lead-in to an interesting interview I recently read with Facebook’s, Paul Adams, Global Brand Experience Manager. Adams explains how a simple commitment to value can unravel the complications of social media. He says the key is to understand and serve basic human behavior.

Will we get to a point where “social media” is not an online thing, but a bridge between the digital and real worlds?

Paul Adams: “I think we’re already seeing it happening. We see Facebook, Twitter and Google Maps stickers on business windows all over town. I do think this is where it’s headed. As I mentioned earlier, social media should be like electricity. It’s there, powering everything, but we don’t really think about it.

Our phone, or whatever we carry around with us, will probably be our primary source and producer of social media data, so it’s important that when we use it, we’re not burdened by its place in the ecosystem — for example, by seeing constant privacy controls or too many invasive alerts.

Fundamentally, the phone collects a number of datasets that other devices don’t. It knows who we communicate with the most, who we care about the most — because it knows who we call and text most often — and it also knows where we are, where we’ve been, and probably where we’re going. And in the near future, it will know the things we buy.

Mobile is going to be a very disruptive space, and I’m not sure how it will evolve. Rather than try and predict which technologies will be dominant, I think the safer bet for businesses is to understand how these technologies will support human behavior and how they will help people do things they are struggling to do today.”

I don’t know why, but I immediately thought of the great Simon & Garfunkel song, Bridge Over Troubled Waters.

Read the full interview HERE.

*This post was originally published on this site March 2011.

Franchise Failure – What Would You Do?

December 30, 2011December 30, 2011 · 10 Comments ·

The following is an excerpt from a recent article on CNBC.com about business failure. The article, Five Businesses That Did Not Survive 2011 included one business that was a franchise… actually, a franchisor, Just Mouldings. The excerpt about Just Mouldings demise was subtitled, “We Did Everything Right”.

In my ongoing dedication to franchise success at all levels, I always attempt to analyze why a franchise business succeeds, and why one would fail. As we work our way out of economic uncertainty I’m sure we’ll have more and more opportunity for analysis, and as the excerpt details, we’ll see more identified as business failure due to the economy… which was listed as the reason for Just Mouldings’ failure.

In this case, the principals stated, “We did everything right” and I’m sure they truly believed they did. I’m also sure they did all they felt they could do. Especially as they faced an uphill battle of selling a non-essential product in an economy that saw many consumers limit their spending to necessities.

So, let’s put on our thinking caps and dig into our extensive experience in franchising and business management and attempt to define how this franchise could have succeeded. Let’s look at this as a workshop of sorts. After reading the excerpt below, please share your thoughts as to what you might have done differently if you were in the position of leading this franchise.

Certainly, this is not an attempt at diminishing the efforts of the Just Mouldings’ principals. Instead, let’s look at this as an exercise where we can assist other franchisors (and franchisees) that may be facing similar challenges. If, through our collective efforts, we can assist franchise businesses from failing, even if it’s just one, then we’ve accomplished a great deal. And, it may just help someone from losing their life savings, or help franchisees within a failing franchise system cope and survive despite franchisor failure.

‘We Did Everything Right’

Just Moulding, based in Gaithersburg, Md., sold and installed decorative molding. It opened in 2004 and closed last April.

AT ITS PEAK Mark Rubin and Kevin Wales started with a single workshop that handled small jobs larger installers did not want. In 2007 things were going so well they decided to sell franchises in the business and raised $700,000 from 21 investors. After Mr. Wales left the company in 2010, Mr. Rubin’s father-in-law, Richard Hayman, took over as president. Soon after, sales increased by 20 percent and the company became profitable.

WHAT WENT WRONG The recession. The company, Mr. Hayman said, sold a product that people wanted but did not need: “It was crown molding, not a furnace or a roof.” And while the business had the high legal and accounting costs associated with selling franchises, it had sold only three by the end of 2009. Potential franchisees had trouble raising the $100,000 to $250,000 needed to get started.

LOOKING BACK “We did everything right,” said Mr. Hayman, who sank $470,000 into the company. “We hired the best people and had a great product. We could not overcome the bad economy.” He and Mr. Rubin declined to discuss what they are doing now.

Unique Franchise Model Raises Questions…

December 29, 2011December 29, 2011 ·

As most everyone in franchising knows, the Chick-fil-A franchise opportunity is quite unique, especially as compared to thousands of other franchise opportunites across all industry segments.

It appears Chick-fil-A has been quite successful with this unique business model, so why haven’t more franchisors followed suit? And, for the ones that have, why haven’t they succeeded?

With respect to a recent article’s reference to average franchisee profits, are there potential issues with Financial Performance Representations in the franchisor’s Franchise Disclosure Document?

Here’s a thought as I compare Chick-fil-A to other franchises… Should Chick-fil-A really be considered a franchise?

Hey, don’t get me wrong… I admire a company that affords individuals the opportunity to earn significant income, provides a great product and customer experience, and stands by its convictions (Closed on Sundays for religious reasons). My questions are entirely focused on the franchising aspect. Is it really a franchise?

Is the Chick-fil-A model more successful from the perspective of failed locations than other franchise chains?

From a business standpoint it appears there is much to be learned from Chick-fil-A. So, why aren’t more franchisors developing similar business practices, even beyond the franchise practices.

Looking to keep this positive… and really looking forward to all thoughts, insight and perspective!

One-size-fits-all Social Media Solutions… A false prophecy!

December 17, 2011February 20, 2012 ·

As could be expected, many within franchising entered the year determined to make things happen. As also could be expected, many turned to social media, believing it could be the answer to improving sales at the unit level, increasing interest in their franchise opportunity, and considered social media a low or no-cost alternative to what they’ve done in years past.

Unfortunately, many have failed in their social media efforts. The reasons? Well, many did not understand the ins and outs of social media marketing. Some didn’t even understand the basics of the most fundamental social media; Facebook, LinkedIn and Twitter. And others failed because they were just not 100% committed to the effort. But, are these the real reasons they failed?

Well, as you may have guessed, the answer is, “No!” Ultimately, failure in social media is a direct result of failing to plan. Referring to the old adage, “Failing to plan, is planning to fail” causes me to shake my head in bewilderment at the statements posted in many of the online discussion groups recommending what clearly points to one-size-fits-all social media solutions. How much planning goes into a one-size-fits-all solution? How much commitment actually goes into a one-size-fits-all solution from both the consultant making the recommendation and the client that signs on? How much does a one-size-fits-all solution address outside the realm of the basic social media platforms? I don’t believe it’s ironic or a coincidence that the same questions I pose here are similar to the reasons many fail in their attempt to utilize social media.

Success in social media takes hard work. It takes a well-defined strategy based upon a clear, concise understanding of objectives and desired results. It takes a firm commitment of dedicated resources in both time and money. It takes knowing who the target audience is, where they congregate and communicate online, what messages need to be delivered to create interest, and seperately, to create a call for action. It takes full comprehension of a contingency plan based upon what if…? In essence, it takes planning!

Brian Solis, author the best-selling book on social media, Engage!, and Fast Company expert blogger, recently wrote an article on this very subject, In Social Media, Failing to Plan, is Planning to Fail. He wrote, “I’ve received a series of inbound requests for comments based on a report from Gartner, an IT analyst firm, that estimates as many as 70-percent of social media campaigns will fail in 2011. There are a series of discussions hitting the blogosphere and the Twitterverse exploring this very topic, some elementary and others on the right path. I contacted Gartner earlier this week and the problem is, that this data isn’t new at all. In fact, these discussions are fueled by information originally published in 2008 and in early 2010. Yet another example of the importance of fact-checking in the era of real-time reporting, yes, but, when I paused for a moment, I appreciated the timelessness of this discussion.

Are many of the social media programs in play yielding tangible results?

No …

Are they designed to impact the bottom line or are they tied to meaningful business outcomes?

No …

The truth is that you can’t fail in anything if success is never defined.”

To franchisors, I suggest, before choosing what appears to be a one-size-fits-all social media solution, take the time and expend the effort to develop a social media strategy that not only reflects your current status, but one that can evolve as your system grows. And, be sure to involve your franchisees as it is essential that local objectives to drive sales are integrated in the overall plan that may also include franchise development objectives. Keep in mind, many plans will include multiple objectives that may require that different social media be utilized for optimum results. And don’t forget to integrate your social media plan with your overall marketing and development plans!

Solis concludes his article, “Success is not a prescription. There isn’t one way to excel. That’s the point. Success requires definition based on intentions, goals, and mutual value … across the organization from the top down, bottom up, inside out and outside in. Success is defined departmentally and also at the brand level. There’s much to do …”

Read the complete article HERE.

* This post was originally published on this site July 2011

“Social Media is not applicable to us!” – How would you respond?

December 6, 2011December 6, 2011 ·

Earlier this year, Brett Newman, from the Franchise Opportunities Network, responded to a Linkedin discussion with a question relating to social media acceptance that I hear all too often.

“After attending a few social media presentations and roundtables, I heard an important contact dismiss social media as “not applicable to us”. I understand this to mean that he didn’t think that social media could make an impact on franchise development or franchise lead generation.

While I don’t agree, I wasn’t in a good position to challenge this view from this contact.

If you heard this from someone, how would you respond?”

My response…

“Very interesting, but not all uncommon. I probably would have quoted Socialnomics author, Erik Qualman, who also happens to be the person behind the Social Media Revolution videos – “Social Media ROI is that you’ll still be in business five years from now!”

Once I stated that, I would probably state that utilizing social media is not a one-size-fits-all strategy, nor is it easy to use effectively. I would also indicate that social media, in order to be effective takes serious planning, and should be integrated with other aspects of the business for optimum results. Last, I would reiterate that social media is a communications tool, and as with any tool, it takes practice and hard work to utilize it correctly, and effectively.

If that still doesn’t at least get the person to pause and consider the options, then I would believe the person is afraid of social media just as many are afraid of the unknown. Or, I would tend to believe the individual isn’t willing to put in the effort which lends towards complacency or laziness.

I believe this is really no different than people continuing to use ledgers instead of an accounting software. Or, the many that were phobic about using computers and word processing programs and continued utilizing IBM Selectric typewriters. How many times did we see someone walk away from the large Xerox copier because they didn’t know how to load the paper? In all these cases, as with social media, is it fear, complacency or laziness… or really a combination of all three to varying degrees?”

Please share YOUR thoughts!

*This post was originally published on this site February 2011

AMEX Reassessing Policies for Small Business Saturday

November 29, 2011November 29, 2011 · 5 Comments ·

Looks like we’re making progress on the issue of American Express excluding franchising from its Small Business Saturday event which took place this past Saturday, the day after Black Friday. The following is an article that was posted on Entrepreneur.com earlier today.

Should Franchisees Participate in Small Business Saturday? BY DINAH WISENBERG BRIN

American Express’s second annual Small Business Saturday promotion, which the company declared a success, also spurred a one-man complaint storm over the exclusion of franchised business locations. Now the giant card issuer is reassessing its policy for the program, which is designed to entice holiday shoppers to independently owned enterprises.

Franchise marketing consultant Paul Segreto, who heads franchisEssentials, deserves much if not all of the credit for airing the issue. He recently took to social media and other Internet forums to complain that “franchising, supposedly the cornerstone of small business and as many claim, the driving force behind economic recovery in America, has been excluded from the event.”

Small Business Saturday offered $25 credits to shoppers who patronized qualifying mom-and-pop stores on the Saturday after Thanksgiving.

Segreto noted that American Express solicits franchise brands and franchisees to accept its card and exhibits at franchise trade shows. On Saturday, Segreto tweeted: “I bet #AMEX wouldn’t be very happy if all of #franchising didn’t accept AMEX Cards … even for just one day.”

An American Express spokeswoman says the company is arranging a conference call for this or next week with both Segreto and the International Franchise Association.

Small Business Saturday focuses on small, independently owned and operated businesses that do not benefit from national marketing campaigns funded by a larger corporate entity, according to the spokeswoman. “It’s not our intent to exclude anybody,” she says. The company only recently learned that smaller franchises wanted to participate.

IFA President and CEO Steve Caldeira says it’s a common misperception that franchises are not small businesses, even though most meet the standard definition.

“I’m confident that the franchised business community will play a role in future AMEX initiatives,” he says.

Segreto says he became aware of the exclusion this year after recommending to several franchise clients that they participate in the event; he was astonished when one of them sent him the eligibility requirements.

“That is when I started posting about the situation,” Segreto says, “and when I saw I had support from others within the franchising community, I kept increasing my efforts.”

Franchises Excluded from Small Business Saturday – AMEX Responds!

November 26, 2011November 26, 2011 · 3 Comments ·

Well, I am happy to say that I have been in touch with AMEX as one of their VPs contacted me directly and apologized for their exclusion of franchising. They just missed the boat on franchising being an integral part of small business. They never even considered franchisees as Moms and Pops investing their money in a small business of their own. All their thoughts were focused on the giants of franchising and not the smaller franchises. Although, I did communicate that even the McDonalds franchisees are small business owners themselves. The long and the short is that AMEX knows they committed a huge blunder in excluding franchising.

Rosa Alfonso, the AMEX VP that contacted me directly, wants to set up a conference call next week with several other AMEX VPs to start down the road of getting franchising involved in next year’s Small Business Saturday. I am so excited they took notice and are willing to do something about it.

As much as I would love to be front and center on this, I recognize that it should not be without the IFA. This is about franchising being recognized as an essential component to America’s economic recovery, as IFA President, Steve Caldeira has promoted since leading the IFA. It’s about continuing to educate, not only the masses, but even the giants of business like American Express. I’m sure Steve and his staff could think of many ways this can further benefit franchising.

To that end, I have reached out to Steve Caldeira and will defer to him and the IFA staff in moving forward. Of course, I look forward to being involved as I am passionate about franchising!

Was Franchising Slapped in the Face by American Express by Accident?

November 25, 2011November 25, 2011 · 2 Comments ·

As mentioned on this site, and within several social media and various discussion groups, American Express has excluded franchising from its Second Annual Small Business Saturday campaign. It’s really unclear as to their motive behind the exclusion.

One theory is that franchising is associated with large corporations and brands much the same as big brand retailers like Macy’s and JCPenney. Another theory is that franchising is not considered to have Mom & Pop proprietors running businesses at the local level, right next to and often not much different than independent Mom & Pop businesses.

Still, another theory points towards franchising as only the well-known brands of the likes of McDonalds, Burger King and Taco Bell. There’s even a theory that franchisees are really employees, not business owners, and as such should not be included in the campaign. Yes, the theories are many, and then there were the thoughts (and perception) of individuals outside the franchise community that clearly state that franchising is not small business at all and is nowhere close to the cornerstone of small business in America today. Obviously, there are statistics that prove otherwise.

Below are some of the comments from the franchise community…

“I think that people forget that MANY franchisees are small business owners just the same and still need the support. I think it is a common mis-conception by the public that a franchise = large corporations.”

“Big mistake by Amex! If the franchise owners of america said fine…exclude us and we will stop accepting the Amex card… you can bet their attitude would change!”

“I wonder, then, if a small business (that is not a franchise) that relies on providing a nationally recognized service or product would also be excluded. Are distributors or those with licensing rights excluded?… It’s too bad that franchisees are not recognized by Amex as the hard-working, dedicated, small business owners that they are.”

“Interesting…when I attended the West Coast Franchise Expo in Los Angeles earlier this month, AMEX had a booth and they were handing out fliers to franchisees. When I asked if franchisees could participate in the Small Business Saturday event I was told “yes.””

“This is very ironic. AMEX is a HUGE business that is more than eager to suck as much profit (or add to the losses) as possible out of small businesses (including franchises) with their outrageous fees. This event has nothing to do with helping small business, but rather is a self-serving promotion for AMEX, which obviously doesn’t even comprehend what small business is all about since they’ve excluded franchises.”

“Not a good idea! Many small businesses are franchisees. In fact, numerous franchisers are small businesses. More research would have been appropriate!”

“Wow – I feel it’s a BIG mistake on AMEX’s part. But it exposes one of the issues Franchising faces. People’s perception of Franchising is Fast Food as represented by the Huge National Chains. Fast Food is only 20% of all franchising. There are over 75 Industries represented in franchising. As a Self-Employment Coach (which includes franchise consulting), I spend a huge amount of time demystifying and demythifying franchising. A franchisee is locally owned and operated and as such should be able to take part this Saturday in Amex’s event!”

So, where does franchising go from here? How does it address this debacle with AMEX from happening again? How does it get AMEX to stand up and take responsibility for making a huge mistake? And, maybe even more importantly, how does franchising continue to educate people that franchising really is small business, and a huge part of it at that?

Franchises Are Not Small Business?

November 21, 2011November 21, 2011 · 9 Comments ·

Earlier today I posted about the exclusion of franchising from the upcoming American Express Small Business Saturday. In addition to my post on the franchisEssentials site and multiple social media, I also posted on LinkedIn within its Q & A forum. My objective was to learn what individuals outside franchising had to say. Well, the responses that have been coming in are quite interesting. Putting aside the American Express issue, I believe we, as franchise professionals, may need to do a much better job of educating the general public about franchising as evident by the responses. Read the following response and then, please share your thoughts.

“If the motive is to spur small business owners, then I see the logic in this. Franchisees aren’t small business owners. They primarily earn profit for the mega-brands they represent. That’s not a moral judgment, just a fact. Franchises are not small business. You’re the first person I’ve heard say that franchising is the cornerstone of small business. I’d disagree. It’s the antithesis of small business. Despite some fancy paperwork, a franchisee is earning money for someone else, just like an employee. The only difference is that risk is pushed to the franchisee. This isn’t small business. It’s big business writ large. Franchises are, by definition, independently owned, but there is nothing independent about their operation. Doing things yourself according to someone else’s strictly-enforced guidelines isn’t independence.”

For what it’s worth, the comment above is from an individual that promotes himself on LinkedIn within his profile as follows…

“I’m one of the founders of (company name withheld) and have over a decade of experience helping companies of all sizes multiply growth and outperform the competition. Business leaders who work with me get actionable strategic insight that contributes directly to the bottom line. I’ve worked with startups, small, medium and large enterprises and government agencies to set critical strategic goals and, more importantly, develop the roadmaps to get there. My focus is always on exploiting opportunities and eliminating obstacles wherever they are and not on employing a standard toolkit of proprietary models and methods.”

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