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November 2007 |
Volume 9, Issue 10, Part 2 |
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November: The Holidays Begin
In this issue...
Commentary:
Doing holiday shopping online is becoming
more and more popular. Are you one of the online
shoppers? If so, you'll like our picks for some
good- and often novel- gift sites.
Click
Here and browse the sites.
Street Smarts:
The Name Game
Industry
Focus:
Seasonal Franchise Strategies, part 2
Guest Column:
Elements of successful franchising
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The Name Game
Are you facing an identity
crisis on the Internet? You tried to set up shop on the
information highway and went to register your domain name.
It should have taken about 5 minutes and $6.99. But when
you tried to register "bestfranchiseever.com", InterNIC
said no, that name belongs to someone else. With 15,000+
".com" registrations a week, this scenario is happening
more often than not. Now what?
If you simply must have the domain name
of your dreams, you can probably get it - for a price. "Vista.com"
recently sold for $1.25 million, which explains why the
domain name aftermarket is the hottest game in cyberspace.
Thousands of dealers are selling domain names on dozens
of virtual real estate sites with the help of specialty
finance companies. But you may not need to take out a loan
to get your name. Less powerful names often sell for a few
thousand dollars. To find out what you're up against, scope
out the domain name holder and start negotiating.
Having a domain name to match your business
name is good, but not necessarily ideal. Another option
is to select a domain name that is search engine friendly.
A domain name based on the main keyword for your product
or service will give you a much better chance of moving
to the top of the search engines. For example, "safemoneytransfer.com"
will drive more traffic than "franklinfinancialgroup.com".
Often, a domain name is available, but not
with a ".com" extension. Is there a difference? Sure, ".com"
is more familiar, but a “.net” or “.org”
extension might work equally well for a good business model
and sufficient optimization.
Once you have a domain name, hold on to
it. If it accidentally expires, a drop-catcher will snag
it for resale or worse – sell their own products to
your customers. Protect your name with auto renew. Make
sure your payment information stays current.
Seasonal
Franchise Strategies, part 2
Last time, we talked about a
holiday lighting franchise that provides seasonal businesses
with a good way to get through the winter. But if you're
thinking of jumping into the business, you're too late -
at least for this year. According to Nick Schriver, the
founder of Decorating Elves, the holiday lighting season
starts long before the frost is on the pumpkin. "By October
1st we're rolling. There's a lot to do in a short amount
of time. We run all of our advertising, do the design work,
write proposals, interview for temporary crew spots, and
get everything into the schedule. We'll get three pallets
of lights delivered right after the first and start installing
the week before Halloween."
Decorating Elves is just one
of a handful of holiday lighting business franchises taking
advantage of this lucrative seasonal niche. There's no doubt
the fledgling industry is growing though there are no statistics
to indicate exactly how big it's' gotten. However, every
business we talked to reported that it was profitable from
year one and the number of customers just keeps on growing.
Schriver, who started his franchise company as a college
student in 2002 says, "This was successful right out of
the gate. And we are still growing 50-60% every year." No
doubt the 85% retention rate is a big help.
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Company: Decorating Elves
Startup costs: $35,000-$85,000
Franchise fee: $15,000-$30,000
Address: 10460 Roosevelt Blvd,
Suite 292, St. Pete, FL 33716
Phone: (866) 445-6202
Website: www.DecoratingElves.com
In Business: 2002
Franchising since: 2007
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Another indication that this
industry is growing is the willingness of people to pay
more each year. In some areas, people are routinely ponying
up $3,000 to $5,000 for holiday lighting services. Some
spend even more - like the rich guy in California who paid
$50,000 to keep up with some holiday-centric Jones'es. "It's
crazy," says Schriver. "When we started out we were doing
jobs around $500. Then it was $800, then $1200 - and I'm
talking average. Now we're getting closer to $1500 on average
and we've done projects as big as $9,000."
Schriver graduated with a degree
in architecture and did start down that career path. But
that's been put on hold. "The lighting and decorating business
has been so successful that it pretty much engulfs me year
round," says Schriver. It's possible to earn a year's income
in three months and spend the other nine months in Barbados
sipping Pina Coladas, but for go-getters there are a lot
of different off-season decorating scenarios. "We get a
lot of referrals for wedding, special events, and parties.
It's not nearly as go, go, go as during the holiday season.
It's a lot of fun though," asserts Schriver.
Elements
of Successful Franchising
By: Bob Gappa
Although many aspects of franchising are unique, it is,
at the core, a business and shares many of the challenges
and characteristics of other businesses. The reason
for a business is economic performance. The purpose
of a business is to create and keep customers and the result
of a business is satisfied customers. The characteristics
of a successful business include the following NINE COMPETENCIES:
• Attracting new customers
• Ensuring customers are VERY satisfied and loyal
• Retaining current customers
• Ensuring customers promote you, forever
• Getting customers to purchase more of its products or
services more often
• Continually increasing market share
• Maintaining a sufficient profit margin
• Having low management and employee turnover at the operating
locations
• Having very satisfied and engaged managers and team members
executing
the systems at the operating locations.
Franchises vs. Independent Businesses
The average success rate for franchising may be greater
than for independent businesses. However, few people understand
why. Simply put, it is because franchises (and company-managed
outlets) have a clear advantage in all of the NINE COMPETENCIES
above due to their ability: [a] to align all franchisees
to a Brand’s mission, core values, vision and positioning
statement; [b] to design, develop and execute Operating
Systems that deliver on the NINE COMPETENCIES mentioned
above; and [c] to design, develop and execute Operating
Systems that deliver and enhance what customers’ value.
Professional Management
Companies using franchising as a growth strategy must evolve
from an organization run by an entrepreneur to one run by
systems and processes known collectively as “Professional
Management.” This is not meant to denigrate entrepreneur
founders, but rather to identify one of the “elephants
in the room.” Many founder entrepreneurs are frustrated
with their inability to grow their companies successfully
after the 100-200 unit milestone. They attend seminars and
hire consultants and outside executives in an attempt to
solve their problems. What is needed by every franchise
company, whether its locations are company or franchisee
operated, are systems developed with customer-driven philosophies,
policies, programs, procedures and practices. The operations
in these companies must be consistently executed by well-developed,
trained, committed and engaged franchisees and company employees.
This is what is known as Professional Management.
Bob Gappa is the founder and President of
Management 2000, which was founded 27 years ago and specializes
in working with companies that use franchising to grow their
business. Bob can be reached at 800-847-5763, via email
at m2000@mgmt2000.com
or visit website www.mgmt2000.com.
Burger King to Test $1 Double Cheeseburger
Burger King will try cutting the price of its double cheeseburger
to $1 in an attempt to trump one of McDonald's most popular
bargains. According to Dow Jones Newswires, the chain intends
to lower the price of the burger in three test markets to
what McDonald's charges for its double cheeseburger, a key
component of the archrival's Dollar Menu. BK's version is
reportedly larger than the sandwich offered by McDonald's.
The move by BK comes as some McDonald's franchisees
have complained about selling a double burger for $1 at
a time of rising commodity prices. Some units have bumped
up the price of their double cheeseburgers by as much as
99 cents, with the Value Menu revamped as a Value Menu &
More listing. Dow Jones noted in its story that BK's three-city
test of a bigger $1 double cheeseburger could ignite a price-cutting
war between the quick-service giants. Oak Brook, Ill.-based
McDonald's operates or franchises more than 30,000 restaurants
worldwide and Miami-based BK operates or franchises more
than 11,000. (Nation's Restaurant News, 11/20/07)
Holiday Inn Brands to Relaunch After Revamp
While executives from InterContinental Hotels Group (IHG) touted change
as the key to improving the chain's global lodging efforts
at their recent annual Americas Investors and Leadership
Conference, a sea change is about to unfold for its legacy
Holiday Inn brand and its offshoot, Holiday Inn Express.
Now grouped under the umbrella of the Holiday Inn brand
family, both lodging choices are tossing out their longstanding
logos and signage in favor of more contemporary typefaces,
shapes and colors that will affect everything connected
with the brands' images from monument signs to website icons
to marketing tools this is all part of a worldwide initiative
to relaunch the brands as more trend forward, more consistent
in quality and service, and better equipped to meet the
needs of both existing and emerging travelers.
The positioning push will include, for both
brands, redesigned guestrooms; upgraded bedding, bath and
amenity packages; revamped front-desk areas with custom
back-wall presentations; exterior lighting features in brand
colors that will appear above and on the columns of the
arrival canopy; modern landscaping; signature scents and
customized music in public spaces. With more than 3,100
Holiday Inns and more than 1,700 Expresses open and approximately
another 1,000 hotels in the pipeline, IHG is targeting 2010
as the completion year for the relaunch. Between now and
then it's expected franchisees and owners will invest an
estimated $1 billion to bring that goal to fruition. (Hotelbusiness.com,
10/24/07)
Campero USA, a division of the Guatemala-based chain
with 36 Pollo Campero chicken restaurants in the United
States, has signed an agreement with Wal Mart Stores Inc.
to begin opening stores in the big-box retailer's outlets
in 2008. The number of Pollo Campero units planned for Wal-Mart
stores was not disclosed. The landlord-tenant agreement
currently covers Wal-Mart stores in select areas. The company
also owns Supercenter, Neighborhood Markets and Sam's Clubs.
The retail giant has recently been increasing its commitment
to the Latin American community.
Separately, Qdoba franchisee Chair 5 has signed
a deal with Pollo Campero to open five units in an area
that includes the northern suburbs of Boston because of
their prime Central American neighborhoods. Pollo Campero
has more than 260 restaurants in 11 countries. (Nation's
Restaurant News, 11/14/07)
Five Guys Debut Their Burgers to Manhattan
Five Guys Famous Burgers and Fries, the 200-unit, fast-casual
burger chain based in Lorton, Va., has inked a deal with
Five Points Partners, a New York-based franchisee, to open
30 units across Manhattan over the next eight years. The
first location is expected to open this month in midtown
on West 55th street between Fifth and Sixth avenues. The
menu will consist of such core items as burgers, fries,
hot dogs, veggie sandwiches and grilled cheese sandwiches.
Free toppings include mushrooms, cooked onions, jalapenos,
lettuce, tomatoes, pickles, mustard and ketchup. Prices
range from $5.75 for a regular burger to $7.75 for a bacon
cheeseburger.
In addition to its investment in Five Guys
Burgers and Fries, Five Points Partners also owns the exclusive
development rights for the Dunkin Donuts and Baskin-Robbins
brands in central business districts of Washington, D,C,,
Northwest Washington, D.C. and a part of Prince George's
and Anne Arundel counties, as well as a network of Dunkin
Donuts shops in Suffolk County, N.Y. (Nation's Restaurant
News, 10/26/07)
The owners of Sacramento, Ca.-based Massage Envy Ltd., a membership-based
chain which offers discounted massages and extended hours,
have launched a similar concept for facial treatments called
Faces365. Both ideas are designed to appeal to customers
who do not use such services or do so infrequently because
they feel the cost at traditional spas is too high or limited
hours do not fit in with their busy lives. Face 365 is open
seven days a week, days and evenings, with drop-ins available.
The membership model gives customers discounted prices and
guarantees business, and helped Massage Envy expand the
market for massage services.
Faces365 would locate in suburban areas in
at least 2,000 square feet in grocery-anchored or lifestyle
centers. Faces365, which will soon ask the state to approve
franchising, is not the first to market. Facelogic International
of Carlsbad, Ca., with a similar model, has sold 85 territories
for franchises in two years and opened in 29 of these locations.
Facelogic is attempting to reach 1,000 sites by 2014 while
Faces365 aims to reach 750 to 800 locations in five years.
(Sacramento Business Journal, 11/9/07)
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