April: Is it Spring yet? 20 Ways to Maintain a Healthy Level of Insanity. Continued from Part 1 11. Specify That Your Drive-through Order Is "To Go." 12. Sing Along At The Opera. 13. Go To A Poetry Recital And Ask Why The Poems Don't Rhyme Read More.. In this issue... Street Smarts: How to Interview Franchisees to Get the Real Scoop. Industry Focus: Turning Green Grass into Green Cash, Part 2 Guest Column: Maximize Your Benefits from Discovery Day.

News You Can Use Wendy's Considers Sale Bagel Brands Seek New Image Fantastic Sam's U.S Expansion Lightstone Buys Hotels from Blackstone Qdoba’s Ambitious Growth Strategy for 2007 Hilton to Turn Waldorf-Astoria into Worldwide Brand Featured Supplier InSource Financing Featured Pick Manny & Olga's Pizza Coming Soon FranchiseHelp's Top $$$ Low-Cost Franchises Subscribe | Unsubscribe to the Newsletter

In Part 1, we talked about questions to ask of the franchisor. But even the most honest and forthcoming franchisor can’t tell you what it’s like to be a franchisee. You should take the time to call existing franchisees and get some candid answers to your questions. Be careful that you don’t get a limited list of hand-picked contacts. It would be a waste of time to talk only to the most successful operators or those who are coached to give the “right” answers. Calling franchisees at random will give you the clearest picture of what you’re getting into. Here are some questions you should ask:

1. Are you happy with your franchisor? How is your experience different from what you expected?
2. How long did it take for you to realize a return on investment?
3. Approximately how much are you earning? Is it what you expected?
4. How many hours a week do you spend working on the business?
5. Did the training your franchisor provided really prepare you to run this business?
6. Were there any hidden fees or unexpected costs?
7. Are there restrictions on the products you sell and use in your business? If so, were you told of those restrictions beforehand?
8. What do you think of the marketing and advertising? Does the franchisor advertise as much as you were promised it would?
9. What kind of support do you receive now? When you have a problem, is your franchisor responsive or do you feel like you’re on your own?
10. What did it cost you to build and start the franchise?
11. Did your franchisor accurately estimate the start-up and operating cash you needed?
12. If you had it to do all over again, would you choose the same business and franchisor?

Turning Green Grass into Green Cash, Part 2

NaturaLawn of America is a franchise program that provides environmentally safe and friendly types of lawn care. We spoke with Marcus Peters, Business Development Manager, about the growing trend towards “green” products and services.

Q: What is the focus of your concept?
A: We are the recognized leader in organic-based lawn care. Our franchisees treat lawns - and that’s all we do. We don’t do landscaping and we don’t do snow removal. Lawn care is relatively easy to do if you stay away from the more labor-intensive type of work.

Q: So you offer organic lawn care?
A: No. It is organic-based. There’s a difference. A pure 100% organic service would not be something most people would want because it’s not as effective or quick as it really needs to be. But we use 85% less pesticide than a traditional lawn care company does. And we do have “pesticide free” programs that are dependent on Mother Nature. Our proprietary fertilizers are unlike traditional type chemical spray fertilizers that kill weeds and everything else including all the good microbes in the soil. Our fertilizer builds the soil up, makes it richer. Ergo you’ve got a thicker and a better plant. We’re also the only program that offers phosphorous free programs for high watershed areas. In this industry, we offer the most environmentally friendly lawn care.

Q: In your industry, do you see a growing emphasis on “green?”
A: The “green” thing is very strong and will continue to grow. You can tie it to Global Warming, but there’s generally more of an awareness overall. The Baby Boomer generation was the first to be exposed to the word “ecology.” Now more people are becoming more environmentally conscious. Will everybody get behind it, no. But it becomes more popular each year.

Q: How do your franchisees deal with the seasonal nature of the lawn care business?
A: Lawn care is a series of “rounds” or visits with so many visits in a season. With us it’s seven. In the South, those visits are spread out more because the growing season is longer while in the North, those same seven rounds are more condensed. But regardless, the yearly income is virtually the same. The only difference is that in Minneapolis you’re going to have a little more down time to get your equipment retooled and get your marketing plan ready to hit homes in February. If you can take time off between Thanksgiving and Christmas without hurting your income, that’s a pretty good deal. That’s what our people enjoy about it.

Meeting the Franchisor
By: Ed Teixeira

"Maximize Your Benefits From Discovery Day"

A crucial step in the process of purchasing a franchise is meeting with the franchisor at corporate headquarters. It’s an important time for the franchisor and prospective franchisee.

Whether it is a “Discovery Day” or other term that the franchisor uses, most franchisors require prospective franchisees to visit their corporate headquarters as a pre-requisite to buying a franchise.

Although, some franchisors try to schedule the corporate visit at an early stage in the franchising process, the franchise candidate should attend Discovery Day after:

• Speaking to several franchisees
• Having reviewed the UFOC
• They have gained a good understanding of the franchise program.

A word of advice: some franchisors will not provide a copy of the UFOC to a prospective franchisee until the candidate visits the Franchisor’s headquarters. I believe that once a franchisee completes and submits the application to the Franchisor and is approved, the Franchisor should be willing to forward the candidate a copy of the UFOC.

Each party should have objectives they wish to achieve as a result of Discovery Day:

Franchisor Objectives:
• Meet the franchisee candidate face to face.
• Review the qualifications and make a collective decision regarding the candidate as a future franchisee.
• Present the franchisor program and key staff to the candidate.
• Resolve any open items or questions on the part of the candidate.
• “Close” the franchise transaction.

Franchisee Objectives:
• To observe, recognize and understand the franchisor’s corporate culture.
• To obtain answers to any remaining questions.
• To ask questions raised from franchisee interviews
• To negotiate any open items pertaining to the franchise agreement.
• To gain feedback from franchisor staff regarding the individual franchisee's business plan and strategy.

Typically, the franchisor will have a set agenda or format that is used for Discovery Day visits. Be sure to request a copy of the agenda before your meeting. It should include a list of those individuals who you’ll be dealing with as a franchisee.

From a functional standpoint you want to meet those people:
• Who furnish training and support services to the franchisees
• Who are responsible for marketing and sales promotional activities
• The franchisor senior management or founder

This visit is very important, since it usually comes near the end of the franchising process. It may be the last chance you’ll have to obtain answers to important questions before you decide to sign the franchise agreement and pay the fee. Based upon the results of your interviewing franchisees and the review of the UFOC, you should have specific questions for the franchisor staff. From the franchisor’s perspective, recognize that the franchisor staff is going to make a decision as to whether they feel you are qualified to be a franchisee.

Hopefully, you have been able to have a positive visit with the franchisor and have resolved the questionable items, with the result that you will sign what you and your attorney feel is an equitable franchise agreement. It is important that you utilize legal counsel to advise you in this final step because once you sign the franchise agreement you put your name and money “on the line.” Do you feel, based upon all of the information you’ve gathered, that they will “deliver as promised?” This is the question you should be able to answer at the end of Discovery Day.

About The Author: Ed Teixeira is the President of FKH, a franchise development firm. He can be reached at: ed@franchiseknowhow.com, www.franchiseknowhow.com

Wendy's Considers Sale

Wendy’s International Inc. announced this month that it has formed a special committee of independent directors to “review strategic options,” including a possible sale of the company. The committee will explore all options for the parent of the No. 3 burger chain, including changes to its capital structure, a possible sale, merger or other business combination. Wendy’s market capitalization is about $3.2 billion. Talk of Wendy’s as a possible buyout candidate could be heard during the company's attempt at a turnaround since at least last year, and speculation within the analyst community has focused on billionaire and activist investor Nelson Peltz, who holds a 4.4-percent stake in the company.

In 2005 and 2006, Peltz orchestrated Wendy’s divesture of its Tim Hortons and Baja Fresh Mexican Grill chains and also pushed for increased amounts of returned capital to shareholders and nominated three executives to Wendy’s board who currently are still serving. In return for concessions, Peltz entered into a standstill agreement with the company, agreeing not to take further action. Some analysts have predicted that the expiration of the standstill agreement in June will prompt Peltz to push for a sale of the company, or a merger with the Arby’s system. Peltz is chairman of Arby’s parent company, Triarc Cos., which just this week announced a sale of its other holding, investment advisory firm Deerfield & Company LLC, for about $290 million. (Nation’s Restaurant News, 4/15/2007)

Bagel Brands Seek New Image

Moving beyond their bagel shop origin, major bagel chains continue to evolve into fast-casual cafes in bids to get back customers who have been lured away by bakery-café chains and others that have added bagels to their menus. Bagel segment leaders, New World Restaurant Group and Bruegger’s Bagel Bakery, which have nearly 850 outlets between them, are focusing on such initiatives as afternoon snacks, specialty coffees, improved merchandising and increased customer service. While breakfast continues to be the strongest daypart for bagel shops, lunch and late afternoon have emerged as lucrative opportunities for additional sales.

Today, New World’s brands, especially the Flagship Einstein Bros., offer everything from panini sandwiches to salads to frozen lattes. Additionally, as these brands have evolved, so has interest from potential franchisees. For example, Einstein Bros. expects to start franchising for the first time this year and Bruegger’s said it was expanding at an accelerated pace with plans to open at least 40 units this year and 50 next year compared with 25 openings in 2006 (Nation’s Restaurant News, 4/16/2007)

Fantastic Sam's U.S Expansion

Fantastic Sams, a full service hair salon brand with nearly 1400 salons in the US and Canada, has announced its plan to open more than 130 locations in the following major cities through franchise ownership: New York, Philadelphia, Atlanta, Dallas and Houston. The demographics and consumer lifestyle in each of these markets meet the Fantastic Sams' expansion model criteria. Fantastic Sams new expansion plan furthers its renewed focus on development in growing metropolitan markets nationwide.

Fantastic Sams is currently concentrating its efforts on attracting quality franchise partners who want to invest in a leading hair salon brand with a solid operating system and strong corporate support structure. The average initial investment to open a Fantastic Sams Hair Salon ranges from $100,000 to $225,000 and fixed fee royalties. (Fantastic Sams press release, 4/25/2007)

Lightstone Buys Hotels From Blackstone

Lightstone Group, a New Jersey-based owner of malls and commercial real estate, agreed to buy Extended Stay Hotels from Blackstone Group LP for $8 billion, its first acquisition in the lodging industry. Blackstone, based in New York, is selling 683 properties with 76,000 rooms. The mid-priced hotels operate under brands including Extended Stay Deluxe, Extended Stay America, Homestead Studio Suites, StudioPlus and Crossland.

Lightstone is jumping into the lodging industry as dealmaking heats up. About $90 billion worth of hotels changed hands last year, almost double the amount in 2005. The company, founded in 1988, owns office and retail space in more than 25 states. Blackstone bought Extended Stay in 2004, when it had 425 hotels, for $2 billion and the assumption of $1.1 billion in debt. (Bloomberg.com)

Qdoba’s Ambitious Growth Strategy for 2007

Qdoba Mexican Grill is in the middle of an ambitious expansion with plans to open at least 80 more outlets in 2007. In fiscal 2006, on top of adding 71 new stores, Qdoba posted a 5.9 percent increase in same-store sales and its revenues grew to $74.9 million, up from $58.4 million in fiscal 2005. Currently Qdoba has 354 restaurants in 42 states.

Qdoba’s growth is fueled in part by its aggressive franchising strategy. As of last year, only about 22 percent of Qdoba stores were company-owned. Plans call for adding 75 plus stores annually for the foreseeable future. Additionally, the company has financial help from hamburger chain Jack in the Box which purchased Qdoba in 2003 for $45 million. (Denver Post, 4/16/2007)

The Waldorf-Astoria, which for more than a century symbolized wealth and power, is about to undergo a major makeover. Hilton Hotels, owner of the Waldorf since 1949, plans to turn the hotel into a brand that can be spread around the world, starting with a new project right outside Walt Disney World. This 498-room Waldorf will be paired with a 1,000-room Hilton Hotel, creating one of the nation’s largest resorts when the two open in late 2009. Hilton said it will capture Waldorf’s essence – impeccable service and luxurious appointments that command top-of-the-market room rates.

The Central Florida Waldorf is a first step. It will be the second hotel to bear the Waldorf name but other hotels are already affiliating under an umbrella brand, The Waldorf –Astoria Collection. Hilton has already gathered hotels in California, Hawaii, Arizona and Saudi Arabia into the fold. (Orlando Sentinel, 4/13/2007)