September: A New Start In this issue... Humor: These are from a book called Disorder in the American Courts, and are things people actually said in court, word for word, taken down and now published by court reporters who had the torment of staying calm while these exchanges were actually taking place. Click Here Street Smarts: Get the Most Out of Your Next Exhibition Industry Focus: What's Working In The Franchise Lead Game Guest Column: Are You Selling The Way They're Buying?

News You Can Use Burger King Posts Profit Subway Adds Pizza to Menu Best Western Plans Rapid Expansion in Asia Focus Completes Moes Southwest Grill Deal Cereal Bowl Franchise to Expand Nationwide Embassy Suites Moves into Foreign Markets Featured Supplier Signs Plus We Thank Our Sponsors FREE White Paper Hotel Survey 2007 (Focus on economy sector) Subscribe | Unsubscribe to the Newsletter

Franchise expositions can be a great source of sales leads for franchise developers. It can be expensive though, and there's only a few days in which to make the investment pay off. The West Coast Franchise Expo is right around the corner, so we went to Joel Goldstein, Director of Marketing for MFV Expositions, for his perspective on what makes a franchise show work.

Q: What's the first thing franchisors should know about expo visitors?
A: Attendees are people who really do their homework. They have spent an impressive amount of time researching brands and concepts way before the show. As an exhibitor, you probably won't have to educate visitors about what franchising is all about. Instead, you have to be prepared to quickly identify the skills, talents, goals, and commitment level of each prospect to see if it's a good fit with your concept.

Q: It sounds like you attract some highly qualified visitors. How do you do that?
A: We focus our efforts on targeting people who are on the business end of things-people who are entrepreneurial, maybe already in business, ex-military, and so on. To reach them, we don't put free passes in the supermarket. We spend millions of dollars promoting the show with advertising on radio and television in the local markets. And there's heavy newspaper advertising in the business sections of USA Today, Wall Street Journal, Los Angeles Times, and Orange County Register.

Q: What kind of attendance do you expect in L.A.?
A: There will be nearly 250 exhibiting companies including franchisors and suppliers. Last year, there were 9,700 visitors and I expect we will exceed 10,000 this year

Q: What's your best advice for exhibitors?
A: Don't sit down in your booth and have a sandwich. If you're going to have chairs, use them exclusively to sit down and meet the people. Inexperienced exhibitors are the ones just sitting behind a draped table, arms folded, waiting for lightning to strike. This is a very unique opportunity and you have to be proactive. Exhibitors who do exceptionally well are out there talking to prospects.

Q: What's the key to getting the most out of a show?
A: Taking the next day or the next week to follow up. Too often these leads end up in a box somewhere and no one's on top of them. Make the investment worthwhile by pursuing each and every one of your leads.

The West Coast Franchise Expo
October 19-21, 2007
Los Angeles, CA
www.wcfexpo.com
210-226-1130- Ext 563

What's Working In The Franchise Lead Game

In keeping with our theme on attracting new franchisees, we asked a group of franchisors how they get their sales leads outside of the occasional expo. Here are a few of the responses we got:

Gina McNabb, Senior Vice President, Candy Bouquet
We do most of our advertising online. Our two best sites are FranchiseGator and Entrepreneur.com and we also buy search words. But the vast majority of our people who actually purchase a franchise are through word of mouth. They are people who either know one of our franchisees or have received a bouquet.

Mark Geman, CEO, Spicy Pickle
Our favorite way is networking. New franchisees are generally people who have visited one of our restaurants and made a direct application through our website. Those are the strongest leads and the ones with the highest closing percentage. We have a very small brochure that sometimes the franchisees in our stores remember to display on the counter and sometimes not. But when we ask people where they got our name or number from, usually they've asked somebody at the store and the franchisee sent them to the website.

Richard Sparacio, cofounder and VP, MaidPro
The best thing would be Search Engine Optimization (SEO). We hired somebody to do that internally full time. He looks for organic and paid related search optimization opportunities to turn up people who are looking for business opportunities. The days of yellow pages and print media have gone by the wayside. It's SEO now.

Michael Kleimeyer, Director Franchise Development, Pop-A-Lock
Our favorite way to get leads is to look within. Two years in a row now we've been featured in Franchise Business Review's, Franchise 50. With that good validation, we ask our franchisees to recommend anybody who they think might be good for any of our available areas in the country. It works. In the last four years, we've gone from covering about 20% of the country population-wise to about 50%.

Are You Selling The Way They're Buying?
Important Changes In Franchise Buying Behavior

By: Joe Mathews

The internet is dramatically changing how franchisors generate and work leads. Telephone contacts are becoming less and less effective. Back in the 1990's franchisors could easily establish contact with more than 80% of their leads by making 3 telephone calls or less. Today, franchisors struggle to make telephone contact with 30% of their leads. While leads may be up for many franchisors, telephone contacts are down. What does this mean? What are the possible implications? How can I recruit a franchise candidate who doesn't want to talk to me? Franchisee recruitment appears to be in the middle of a franchise buyer behavior transformation. Where is this going?

Perhaps we can learn from the transformation which has already occurred in residential real estate.

A poll sponsored by the National Association of Realtors showed distinct differences between the buying behaviors demonstrated by buyers who relied on the internet for preliminary informaiton and traditional home buyers who relied on their real estate agent for preliminary information . Those differences are as follows.

Additionally, internet home buyers indicated they felt more empowered, better educated, and indicated they were MORE SATISFIED with their home purchasing experience and real estate agent services than traditional home buyers.

In 2007 (4 years after this study came out), THERE IS NO SUCH THING AS A TRADITIONAL HOME BUYER. ALL BUYERS ARE "INTERNET BUYERS!"

Possible Implications for Franchising

• Franchisors have to be able to offer internet franchise buyers information the way these buyers gather information and make decisions rather than forcing them into an old process they refuse to follow (remember franchisors are only contacting 30% or less of their leads, from just 10 years ago). Most buyers ARE ALREADY NOT FOLLOWING traditional franchise sales processes because they aren't returning the franchisor's calls.

• Franchisors have to be more generous with information via the web. Franchisors will need to learn to use email drip campaigns, flash video, streaming audio, and other clever uses of existing internet technology to tell their story rather than relying on the franchise salesperson to tell the story.

• Franchise salespeople need to become better organized (as franchisors will generate more leads more cost effectively), more computer savvy and better written communicators (as more contacts and information will be delivered by email than telephone or face-to-face communications). It is possible franchise salespeople are going to need to track more data and spend much time in front of a computer all day reading and responding to emails. This may change the profile of who a franchisor needs to hire as a franchise salesperson.

• Franchisors will need to create more letter templates and more customizable written communications to help franchise salespeople be more effective and deliver more communications quicker, without having to write the same emails over and over again.

• Franchisors need to fast track candidates, as many will enter the process "pre-sold," better educated and informed, and ready to buy. However, franchisors need to resist the temptation to not properly qualify and screen potential candidates, making sure the candidate is a fit for the system.

Franchise sales processes only work if the sales process is consistent with the franchise buying process. When the buying process changes, the franchise sales process must change along with it. Franchisors who hold on to archaic sales processes are going to lose good candidates to franchisors who stay current and consistent with the changes in franchise buyer's behavior.

Joe Mathews is the founding partner of the Franchise Performance Group, a consulting firm specializing in helping franchisors exceed their growth objectives by recruiting top quality franchisees. Joe is co-author of Street Smart Franchising with Don Debolt, former CEO of the IFA. Find us at www.franchiseperformancegroup.com you can email joe@franchiseperformancegroup.comor call us at (860) 567-3099

Burger King Posts Profit

Completing its first full year as a public company, Burger King Holdings Inc. cited early morning and late night sales, as well as large year-earlier charges from its initial public offering, as drivers behind its latest quarter's reversal of a year-earlier loss. For the company's fiscal fourth quarter ended June 30, Burger King earned $36 million, or 26 cents per share, compared with the previous year's loss of $10 million, or 8 cents per share.

Corporate revenue for the parent company of the No. 2 burger brand increased 11 percent in the fourth quarter to $590 million. Worldwide same-store sales increased 4.4 percent, driven by a same-store sales gain of 4.8 percent in the United States and Canada. Sales during breakfast and the chain's new late night service are growing at a faster pace than overall sales. Since May, units of the Miami-based chain are expected to stay open until at least midnight. In February, Burger King rolled out a breakfast value menu amid fierce early-morning competition from segment leader McDonald's and other chains. Burger King operates or franchises more than 11,200 namesake quick-service restaurants. (Nation's Restaurant News, 8/14/07)

Subway Adds Pizza to Menu

Pizza chains already suffering from stagnant sales growth may be facing a showdown with Subway. Earlier this year, the behemoth sandwich chain announced plans to offer 8-inch personal pizza in about 13,000 stores in the United States. Subway operates more than 21,000 locations nationwide and did more than $7 billion in U.S. sales in 2005. Subway is not the only restaurant getting into the pizza game. Coffee and donut chain Dunkin' Donuts has been testing a pepperoni pizza that can be cooked in about a minute and a half.

The sheer number of Subway restaurants gives the company a strong advantage in the pizza wars. Even if each Subway restaurant sold one pizza per day, every day, the resulting $30 million in sales would be more than 1 percent of annual U.S. pizza sales, approximately $30 billion. Over at the pizza chains, comparable-store sales growth in recent years has been sluggish at Pizza Hut, Domino's and Papa John's, which collectively control about 40 percent of the pizza market. However, the product served at Subway and others is aimed at a different consumer than the typical pizza customer. Most of what the QSRs are doing is of a single-serve nature whereas pizzerias tend to appeal more to family-occasion group dining and takeout and delivery. (Pizzamarketplace.com, 8/23/07)

Best Western Plans Rapid Expansion in Asia

Best Western International is setting its sights on becoming the largest hotel chain in Asia within three years. Over the next six months, Best Western said it will sign 17 new hotel contracts in China, Japan, Indonesia and Thailand, among other countries, and is on pace to have more than 200 properties by 2010. The chain's Asia presence has expanded from just six hotels in 2001 to 106 today. According to Best Western's president and CEO, the brand's global sales and marketing initiatives, quality assurance programs and Gold Crown Club International loyalty program make it popular with Asian developers and hoteliers. While most of the chain's North American hotels are considered to be in the mid-market segment, Best Western said it is positioning itself as a four-star chain in Asia. (Travelweekly.com, 9/707)

Focus Completes Moe's Southwest Grill Deal

Multi-concept franchisor Focus Brands Inc. said it has completed its purchase of franchising rights to Moe's Southwest Grill and other assets of the fast-casual chain from Raving Brands. Terms of the deal were not disclosed. After the sales agreement was announced in April, a source close to the bidding said Focus would pay $120 million to $140 million, or 10 times Moe's earnings before interest, taxes, depreciation and amortization.

Moe's, formerly Raving's flagship brand, franchises 360 burrito restaurants in 34 states. With the addition of those contracts, Focus now operates or franchises more than 10,000 outlets in 50 states and 32 counties. Its other brands include Schlotsky's, Carvel and Cinnabon. Only the Schlotzsky's chain currently includes company-operated units and those are limited to a few dozen. Focus itself is a holding of Roark Capital, the Atlanta-based private equity firm. (Nation's Restaurant News, 8/30/07)

The Cereal Bowl recently announced its nationwide roll out with 16 stores now under development and several slated to open later this year. The chain has spent the last year developing their concept and creating unique products that can be found at The Cereal Bowl. Customers at the brand's new locations will have the opportunity to enjoy their trademark bowls such as Give Me S'More, cool off with Freeze N' Flakes' or get their health kick with a high protein smoothie known as an Oatie. Customers will also have the opportunity to create their own bowl from a selection of over 35 cereals, 40-plus toppings and a variety of milks.

The Cereal Bowl expects to have three new locations open and 30 stores under development by the end of 2007. In 2008, The Cereal Bowl is expected to launch a kiosk design to accommodate new locations in venues such as airports, malls and college campuses. (QSR Magazine, 8/23/07)

Embassy Suites Moves into Foreign Markets

Embassy Suites Hotels is looking both north and south of the border to expand the brand to as many as 300 hotels by 2010. Presently, there are 190 Embassy Suites hotels open in the U.S. Last November, Embassy raised the flag on its first Mexico City property and last month it debuted the Embassy Suites by Hilton Montreal. The Hilton name is being added to these international markets as a means of enhanced recognition.

The expansion into new markets signals a seminal shift for the brand. Though the upscale all-suite brand has had success, its development pipeline had stalled. In an effort to spur growth, the brand immediately set out to create a more developer friendly prototype which offers a more flexible design and allows variation on the brand's signature atrium to be more space conscious in urban markets. Because of this flexibility, Embassy Suites plans to open up to 20 Embassy Suites in Canada in markets such as each province's capital city. South of the border, the company is targeting about seven markets in addition to Mexico City and had a pair of deals already signed in Central America; one for San Jose Costa Rica and the other in Panama City. Already under construction is a 200-suite property in Valencia, Venezuela which will open in the first quarter 2008. It will be followed by a 165-suite property in Lima, Peru one year later, which is set to break ground early next year. (Hotelinteractive.com, 8/29/07)