October 2014 Archives

The Department of Labor is keen on inflicting heavy penalties on franchise brands for their collective failure to pay fair wages.  

"Under Solis, the amount of back pay Labor collected for workers in wage and hour enforcement actions rose to $250 million in fiscal 2013, up from $173 million in fiscal 2009 -- an increase, after inflation, of more than a third. Since the start of the Obama administration, Perez crows, the agency has "recovered over $1 billion" in lost wages.

Meanwhile, the number of man-hours spent on enforcement rose nearly half, to 1.3 million, up from 880,000."

And employment lawsuits are expensive, even if you win the costs of defense can be very high.  

Sometimes just the threat of a employment lawsuit is enough to bankrupt a franchise owner.  The underlying complaint could be baseless, but you cannot afford to defende the employment lawsuit.

As reported at the website Agents and Broker, a couple of years ago, 

"Workplace discrimination claims are at an all-time high, and small-business owners feel vulnerable.

With a difficult economy, Employment laws are making lawsuits more likely, employment practices employment liability insurance, EPL, is evolving from a high-priced option to an affordable necessity for smaller companies.

A recent survey of small-business owners conducted for Hartford Steam Boiler found that 66 percent were concerned their employees would file an employment-related charge against them, 2010."

This number has probably increased since then!

At the same time, a recent industry study by MarketStance in Middletown, Conn., indicates that only 1.1 percent of small businesses have purchased EPL insurance

"One of the chief advantages of purchasing EPL is that the insurer has a duty to defend, even when the insurer is not going to indemnify you - the insurance may not pay the legal damages, if you are found liable."

The cost of defending even an ordinary employment lawsuit could run well over $100,000, which is beyond the reach of most franchise owners.

One possible solution is to purchase EPL at an affordable rate, which will give you the piece of mind that should you be sued even for a frivolous claim, your insurer pay to defend you.

Employee retention can be impacted by a number of different organizational forces, which start the moment the employee steps in the door to interview for the job.

One of the most important things to remember is that first impressions can set the tone for the whole experience.

You want to make sure that both the employee and the organization are on the same page and know what to expect from each other.

Some effective steps:

Start with the Interview

  • A successful retention strategy starts with the first interview and continues throughout the employee's career. The interview is an essential tool for both the prospective employee and the interviewer to gauge each other's needs, abilities, and future plans. An employee's career starts with interviewing, it is their first impression of the company and how they operate.

Employee Orientation

  • The employee orientation provides a chance for the new hire to become familiar with their new surroundings. This should be a time of low stress for the employee, giving them the opportunity to meet co-workers, learn the layout of the office, and further their understanding of the vision and mission for that organization. Why do you need to do an orientation? It sets expectations for both parties at the beginning of the job and helps to develop positive attitudes, job expectations and job satisfaction.

Designing Your Orientation Program

  • The first thing you want to do when creating an orientation program is to define what you want to accomplish with the program. In doing this, keep in mind what kind of impression you want to make on the employee, in other words what are the stories they will be bringing home to their families after their first day/week on the job.

Get Them up to Speed Quickly

  • Have their email address, phone number etc already set up prior to their arrival. Give them a glossary of common terms, all orgs have their own language. Pre-arrange a "buddy" who will be there if they have any questions or concerns. Prepare a quick "help" card listing contacts for different questions.

Tips & Tactics

  • Who is doing the interviewing? Are they up to speed on the job? Do they understand the legal framework for questions? Are they a "people" person? All of these things will impact how interviews are conducted and how effective they are.
  • When designing an orientation program it can be helpful to sit down and make a list of what you need the first day, the second day, the first week, and so on.
  • How can you reduce the first day jitters for new employees? Send them a letter prior to their first day with info in it: What time to arrive, where to go, where to park, who they will be meeting with, what to bring with them (documents for I-9 form etc). Also celebrate their arrival by doing something such as hanging a welcome sign with their name on it by their office.
  • Onboarding: This is the modern term for the process of interviewing, hiring, orienting and successfully integrating new hires into an organization's culture. The best onboarding (orientation) strategies will provide a fast track to meaningful, productive work and strong employee relationships.
  • Who should be Involved: The people who need to be involved in the onboarding process include the HR department, team members of the new hire or a "buddy" from that area, and members of other functional areas they will be working with on a regular basis (ex: payroll/finance), their direct Supervisor, and a member of the management Team.

A Lasting Impact

  • A well thought out orientation program, whether it lasts one day or six months, will help not only in retention of employees, but also in productivity. Organizations that have good orientation programs get new people up to speed faster, have better alignment between what the employees do and what the organization needs them to do, and have lower turnover rates. Which translates into dollars.
  • For a comprehensive online Human Resource Compliance service that provides support in areas including employee hiring and orientation, check out HRSentry.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Reputation marketing isn't something to be improvised. I always encourage my clients to take the offensive when it comes to their reputation. Most companies have an area or two where they operate in the crisis management mode and can get away with it.

Given today's connected society reputation marketing is an area that can have the greatest impact in the shortest amount of time.

Every company from a major corporation to a solo entrepreneur working at home has to have a solid plan for managing its reputation. There are five steps to doing this effectively.

Step 1 - Brainstorm Possible Reputation Damage Scenarios

Sit down and make a huge list of all of the different things that can happen. Imagine everything from a small bump in the road to a major emergency. The most obvious problem would be a negative post somewhere complaining about your company's service. There may also be a situation where a customer doesn't understand your company's policies and the complaint comes from this misunderstanding.

Brainstorm each place where a comment could appear so that you can create a plan for dealing with each. Examples would be personal blogs, your blog comments, social media sites, online forums, review sites, etc.

Step 2 - Determine the Best Response

For each item on your list, decide what would be the best response. Consider it from the point of view of other customers who will be watching. For example, you might respond to a complaint on Facebook by engaging with the customer, asking them to clarify, empathizing with them, and then offering them a solution.

To other users who are reading the thread, your company shows that it cares about customers and not just its own reputation.

Included in this plan should be a chain of command notification. When a problem is discovered, how will it be communicated to everyone in the company who needs to know?

Step 3 - Set up a Plan for Monitoring

You know what to look for. The next step is to decide how to monitor. One way to monitor all online content is through alert notification programs like Google Alerts.

You may also routinely check Twitter using hashtags and Facebook by searching posts or using HyperAlerts.

You might identify certain online forums, review sites, and other sites where you're likely to be mentioned for monitoring.

Step 4 - Delegate Monitoring

Put someone in your company in charge of monitoring.

You may want to delegate to several staff members. For example, if a certain staff member handles your Facebook account, put them in charge of monitoring Facebook for comments.

Make sure everyone is on the same page with all procedures for dealing with negative comments.

Step 5 - Create Positive Content

This step is often forgotten. In addition to doing damage control, reputation marketing is also about creating content that shows your company in a positive light.

Seek testimonials and reviews from your customers and create fresh content on your website, social media sites, and blog. Positive content will off-set any negative content.

This is an ongoing job, so make things like soliciting feedback from customers a regular part of your sales process.

Many companies and online professionals decide to outsource reputation marketing to a company that specializes in this field. These companies have experience and tools to manage a company's reputation comprehensively.

Look on what on your strategic plan for the next 6 months? Do you have a plan? Make this a priority.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

It's no secret that the restaurant sector is a very competitive segment of the service industry to survive in for full-service restaurant concepts. Most restaurants struggle to make it past the first, second, and third years of business; the U.S. Bureau of Labor and Statistics reported that only around 25% of the restaurants that opened in 2004 were still in business eight years later in 2012.

With such an intimidatingly high failure rate, this business is not for the faint of heart or those who fear change.

We were lucky to have Tom Prince, founder and owner of Tomasso Trattoria start using On The Spot's mobile survey tool in February 2011 to improve customer satisfaction and loyalty based on real-time feedback.

What follows is a very nice testimonial from Tom - which should help everyone in this space improve their loyalty programs.

Prince believes that the addition of On The Spot's mobile survey tool has had both tangible and intangible benefits that have played a key role in the success and profitability of Tomasso Trattoria.

It is so essential in this day and age to use real-time survey tools because it supplies a depth of beneficial knowledge to restaurant operators specific to their business and customer base. The company administers the surveys during "available guest time(TM)" -- the time when a patron's check is being processed -- by providing guests with a survey board.

Pioneered by On The Spot Systems for use in the service industry a 'survey board' is an iPod touch programmed to run the survey that sits atop a lightweight bamboo board and can be easily handed to guests at the table. Tomasso Trattoria also offers an iPad kiosk programmed to run the survey at the front of the house so that patrons can also take the survey and sign up for the newsletter club as they leave the restaurant.

Impressively, 91.3% of Tomasso Trattoria guests that are offered the option to skip the survey and just sign up for the email club will voluntarily opt-in to take the survey. This validates the value of the data that the restaurant is receiving and they are extremely proud of because it shows that guests value the opportunity not just to stay in touch for promotions, but also to give their feedback.

Whether or not customers choose to take the survey, they're asked to join the Tomasso Trattoria newsletter mailing list to receive special promotions and offers. Over 3,500 customer email addresses have been collected from the survey and are automatically fed into their email-marketing database; the ability to e-market and promote restaurant specials to this list drives foot traffic and revenue, increases social buzz and the likeliness of customer recommendations.

In fact, the National Restaurant Association published their findings from a survey conducted on dining habits in 2012, which showed an industry standard of 45% of diners say that they respond strongly to promotional advertisement via email.

This high conversion rate from marketing to purchase intent means that a growing email-marketing list will continue to enable Tomasso Trattoria to strengthen their customer base and encourage repeat visits.

Prince reflected on the intangible benefits of the survey data, stating,

If a customer has a poor experience with their meal, they have the opportunity to vent and give feedback directly to the restaurant instead of running home to post their opinion on a social network. We've seen a noticeable decrease in customers airing their grievances on public forums such as Yelp!, which could be seen by any interested diner.

Tomasso Trattoria isn't the only restaurant that should be worried about the negative effects of poor comments on peer-review websites for their business;

The National Restaurant Association conducted research on dining habits and found that 34% of diners base their decision on what restaurant to go to from peer comments and reviews on forums and social network sites.

Another benefit of switching to the service was realized through the level of engagement of the staff. As the restaurant industry remains fiercely competitive, it has become increasingly important that the staff members in the front of the house are truly involved in enhancing the guest experience and contributing towards positive impressions of the restaurant's service and atmosphere.

With the addition of the mobile survey, Prince has been able to realize a significant improvement in the awareness and recognition of customer feedback as a driver of success. Prince said,

The survey has made it more apparent to the staff that customer feedback is the ultimate evaluation of their performance.

When asked how using a mobile device to take the survey improved the process of data collection Prince answered enthusiastically.

As he said, "The mobile devices are fun and easy to use. For some of the older clients who don't have as much experience with modern technology, the survey gives them a chance to explore and have fun with something that they don't regularly see. Using mobile technology not only improves the process of data collection, it is also infinitely more responsive.

In Prince's words, "Our response rate from our previous paper survey forms was miniscule as compared with the high response rate we get from On The Spot Systems."cognition of customer feedback as a driver of success. Prince said, "The survey has made it more apparent to the staff that customer feedback is the ultimate evaluation of their performance."

"In an industry like hospitality, whenever you are given the opportunity to get customer feedback you need to jump on it. That is why On The Spot Systems is so useful; the survey is quick, efficient, and innovative," said Prince. He continued, "The specific comments we get about food and service allow us to make quick and effective changes in either product or people."

On The Spot Systems allows Tomasso Trattoria to constantly change and innovate to suit customers' needs, likes, and dislikes in a modern and convenient manner. We are thankful to Tom for such a fulsome testimonial!

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Have you ever wondered just what goes into figuring out where to locate a restaurant? Certainly there are hungry people everywhere, so why is one site better than another? That question is one that Dave O'Brien, real estate manager at Culver's, a successful Wisconsin-based quick-serve restaurant chain, asks himself every day.

  click to enlarge
GIS helps Culver's do better comparable store analysis by allowing staff members to focus on the most appealing trade areas.

A growing franchising business, Culver's specializes in frozen custard; a premium ice cream; and the ButterBurger, a juicy hamburger so named because of its lightly toasted and buttered bun. The restaurant cooks everything to order, including making the namesake frozen custard, fresh on the premises throughout the day.

Though the success of Culver's stems a great deal from the delicious ButterBurgers and frozen custard, the company also works hard to help franchisees choose great locations for their restaurants. To do this, Culver's uses GIS.

Having discovered the potential of GIS, O'Brien uses a combination of Esri's desktop and online software. ArcGIS Business Analyst, including the Segmentation Module, provides in-depth customer analytics, while Business Analyst Online is used for creating boardroom-quality maps and easy-to-understand reports. The company can compare and contrast new sites by analyzing the demographics of existing restaurants and pinpointing new areas that are similar.

"We are a family company, and this is apparent in all our daily efforts," stresses O'Brien. "We want our franchise partners to succeed. Without them--the local owners and operators in their own communities and hometowns--we would not exist."

Selecting the Choice Sites

With nearly 400 restaurants that stretch from Wisconsin's heartland south into Texas and west to Wyoming, existing franchise partners and franchise candidates are continually looking at possible new sites. "The best way to determine a good site versus a bad site--besides understanding its access to customers, how to place signage, how good visibility is, and the location's prominence in a particular market--is almost certainly going to be comparable store analysis," says O'Brien.

Whether by existing franchise partners or new franchise candidates, new sites are always being scrutinized for potential. "Working with franchisees requires a lot of time; we're either on the phone discussing locations or viewing prospective sites in person," explains O'Brien. He goes on to add that ArcGIS Business Analyst helps everyone focus on trade areas that are more appealing before going out to visit prospective restaurant locations, helping decrease the time it takes to narrow down choices.

  click to enlarge
Using ArcGIS Business Analyst, Culver's is able to easily compare and contrast new sites by analyzing the demographics of existing restaurants, then pinpointing new areas that are similar.

Culver's analysts define areas being serviced by existing restaurants by creating locations on a map of their restaurants and using tools within ArcGIS Business Analyst to delineate market area boundaries around sets of customers. Next, Culver's uses the ArcGIS Business Analyst Segmentation Module to mine valuable customer profiling information.

Culver's uses the Segmentation Module's Tapestry Segmentation data, which consists of 65 segments broken down by socioeconomic and demographic variables. Operating on the theory that people with similar tastes, lifestyles, and behaviors seek others with the same tastes--"like seeks like"--Culver's uses these segments to predict where other restaurants can successfully be opened. Using the intuitive wizards, analysts are guided to answer questions about customers, such as, Where are other neighborhoods that look like neighborhoods we are currently in that tend to have higher sales volumes? What do they buy? How can I reach them? and Where can I find more like them? Using these spatial analysis tools, Culver's is able to segment the demographics of a restaurant location and find new areas that have similar attributes.

To quickly share this information with corporate managers and new franchisees, the Culver's Real Estate and Franchise Development team uses Business Analyst Online. Business Analyst Online is a Web-based solution that combines GIS technology with extensive demographic, consumer spending, and business data to deliver on-demand analysis and presentation-ready reports and maps. Reports and maps are easy and convenient to use, with more than 50 templates readily available for Culver's analysts to use for presentations to their board members and potential franchisees.

photo of a Culver's restaurant"We want to give our franchise partners the support they deserve," says O'Brien. "GIS technology gives them the ability to maximize their potential at Culver's."

Today, GIS is seen as a strategic business solution that helps businesses continue to grow. Culver's plans to open 22 new restaurants by year-end and almost 30 in 2009. Two have already opened in Phoenix, Arizona, a new market for the company. "GIS is a tool to help us make even better decisions as we continue to expand," says O'Brien. "GIS doesn't replace anything we have now, including people. Instead, the software has become a necessary tool that complements our existing business process."

Sponsoring morning or afternoon traffic updates on local radio stations can be a great way to reinforce your grand opening message.

If you have ever listened to radio on your way to or from work, you're already aware of the benefits of traffic updates. In metro areas and even large towns, stations have added traffic to their morning and afternoon programming as a "public service" to their listeners.

The sponsorship of these updates represents a revenue stream to the stations. But, used correctly, they also represent a great opportunity for you to increase awareness of your new store opening, and deliver a call-to-action to your potential customers.

Here are three advantages to having traffic packages as part of your grand opening media mix:

1. Frequency

Stations deliver their traffic updates multiple times, every hour, during standard "drive times" in your market. In turn, your message is being delivered multiple times to the same radio audience over that same compressed period of time.

Plus, many sponsorships are structured with both a "billboard" (e.g., "this traffic report is brought to you by _________") and a 10 or 15-second commercial message. So, within each report, you're gaining double the exposure for your brand.

2. Reach

Traffic reports are usually implemented consistently across entire station ownership groups, and sometimes even across multiple station groups. That means your single sponsorship can be heard on numerous stations in your market.

Sponsorship packages, from providers like Clear Channel's Total Traffic Network, will admittedly include placing your message on both powerhouse stations as well as those with much smaller audiences.

But, you're extending your reach in the marketplace. And, you can (and should) negotiate the sponsorship costs, to make sure the pricing is fair for what you're getting in return.

3. Cost

And, speaking of costs ... they obviously vary, depending upon your market and the size of the overall radio audience you're reaching. But, fortunately, the traffic format doesn't require (i.e., allow) the use of a traditional 30 or 60-second commercial.

Advertisers usually provide the copy (usually 30-45 words) and the station either pre-records your message or reads it "live" within each traffic update. Regardless, you avoid the cost of audio production, voice talent(s) and music.

Traffic radio sponsorships are definitely not appropriate for every brand message. It's hard (if not impossible) to introduce a complex new program or offer within the format.

But, traffic packages can be a great complement to an established message, or one that is spelled out more completely in another medium.

If you're opening a store, they can be the perfect way to invite the public to your new location. With some careful writing, you may even have enough time to hint at the fun and excitement you have planned for your grand opening.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

When you start your own independent (non-franchised) business, your mistakes will be more costly than you imagined. In fact, your mistakes will probably put you out of business.

I'm not writing this to scare you away from starting a business without a franchisor; I'm writing it because it's factual . . . and scary.

Do indie businesses survive?

Have you looked at the statistics? How many independent start-up businesses survive in the USA? Rather than take my word for it do some research, or better yet, just ask a local business banker!

Of course, the more entrepreneurial you are, the more likely you are to say that you can avoid the mistakes, and maybe you can. However, the statistics say otherwise. Most independent startups fail.

Why mistakes occur

Many people think certain businesses are easy to start and operate. Let's take pizza for example. Many people can make a "good" pizza? My Italian grandmother made the greatest pizza in the world, so it's no surprise that many of my cousins can make great pizzas, too.

In fact, when people tasted my cousin Mary's pizza, they told her that she needed to go into business. And she did! Mary and her entrepreneurial husband (also an Italian) opened a couple of pizza shops, and in a matter of years were dead broke.

How could that be? They made a "great" pizza.

Can you sell what you make?

I'll tell you how. They knew how to make pizza; they didn't know how to market and sell pizza. Franchising's saving grace is that it knows how to distribute (sell) products and services.

It is simple to open a pizza shop. You get a good location, buy the equipment, bring in the supplies, get a recipe, put up a sign, do some marketing and . . . voila! . . . you've got a thriving business.

No, you don't. You've got a money-sucking business, unless you avoid the mistakes.

What do customers want?

1. Mary's first mistake was believing that consumers want a "great" or even "good" pizza. They don't. Just look at what they buy everyday!

2. Mary thought she could build her business by advertising in the newspaper. Wrong. The pizza franchises would have saved her from that mistake.

3. Mary also thought she could build her business without delivery. Wrong. The pizza franchises would have saved her from that mistake, too.

Too many mistakes

There were numerous other mistakes . . . Mary didn't know how many slices of pepperoni to place on a large pizza and still keep it profitable . . . and the pizza franchises would have saved her from that mistake as well.

After so many mistakes, Mary and her husband lost their business and much more.

It's easy to make these mistakes . . . Mary and her husband had no idea they were making them. They would have done anything to avoid them . . . except buy a franchise. Because a franchise would not have allowed Mary to sell her "great" pizza.

Should you buy a franchise?

Look, you need to make some tough decisions before you start a business. What's important to you? Your way? Or a franchisor's way? Keep in mind that the franchisor may not sell what you consider to be a "great" or even "good" product - if that's important, find another franchisor, or avoid franchising.

Of this you can be sure: If you buy a reputable franchise (and they're not all reputable) the franchisor's training will save you from making too many costly mistakes. You're still going to make mistakes, but in a franchise, the mistakes probably won't put you out of business. Ask your banker how many of his or her franchisee clients fail? It's one of the reasons why bankers love franchising.

In fact, even though they won't tell you, the bankers know you are going to make mistakes when you start an independent business, and even though you've accounted for mistakes in your business plan and cash flow estimates, the bankers know better. Your mistakes are going to cost more than you think.

Franchisors need to have financial standards for their franchise candidates. In fact they are a 'must have' in your franchising sales and recruitment process.

And your franchise candidate financial requirements for net worth and liquid capital (cash or cash equivalents) should match up with the Item 7 Estimated Initial Investment in your Franchise Disclosure Document - FDD. And be bankable by meeting or exceeding bank lending requirements. 

Now I look at a lot franchise sales processes and a big area of opportunity to generate more franchise sales is your application. Most franchise salespeople don't think of their franchise application as a candidate attraction and sales tool. 

I think you should. And here's how.

You should use the 'Joe Friday Dragnet Approach" of "Just the Facts Ma'am". You want the 'bare essentials' at this stage and most franchise applications ask too many questions gathering information the franchisor and sales team will not ever use.

Let me ask you how many times do you look at the franchise candidates application after you have confirmed they meet or exceed your requirements?

Okay here's the quick fix list of do's and don'ts. 

  1. Do make it easy to fill out the application. Get it to 20 minutes or less.

  2. Don't ask for Social Security numbers at this stage. You don't need to.

  3. Do get the 'bare essentials' of net worth and available cash. You need to know they qualify.

  4. Don't let someone in the Finance or Accounting Departments control this part of the franchise sales process. You need to. Franchise sales is your thing.

  5. Do keep your franchise application to one page. You'll get points for this with candidates and more will apply.

Remember it's the financial wherewithal of the candidate that's important. And the trust you build at the beginning of the sales process. It's not about making people do more work than is necessary. You're not the Department of Motor Vehicles.

Have the right financial requirements for your concept. But make it easy & dead simple to apply.

We fix gaps on franchise sales processes. And if you need me to look over your franchise application process call me at 443.502.2636 or [email protected]

Steve Jobs often said that making things simple is hard. The same can be said of training.

Training franchisees or their employees is simple, but it takes a lot of hard work to make it that way.

Here are ten training tips to keep in mind:

#10: Respect people's time. If you're going to ask people to spend the time and possibly money to attend a training session, it should go beyond valuable to indispensable. This is especially true of classroom or other in-person training, which are typically longer and more expensive.

#9: Utilize online learning. This helps you achieve #10. Using online learning wisely allows you to make the most of in-person. One way is to present the concepts in an online delivery and then practice the needed skills in-person, thus reducing the amount of classroom or coaching time but increasing its effectiveness.

#8: Invest in an LMS (Learning Management System). There really is no excuse not to have an LMS. The franchise structure makes them the perfect tool for your training. There are too many good, inexpensive LMS options out there right now not to have one. This should probably be #1. It can be the foundation for all the training you do.

#7: Don't overwhelm. Know why M&M's are great? Because they're so small you can eat either 5 or 50. Break training into itty-bitty bits. If people want more, than can always combine bits.

#6: Spread it out. Relates to #7. Eating a whole bag of M&M's in one sitting might make you sick (who's up for some hands-on research?!). Building skills takes time, so should your training.

#5: Be holistic. I don't mean eating tree bark to cure a cold. I mean develop a strategy for your training based on an analysis of your franchisees' and employees' needs, and create a curriculum plan utilizing multiple delivery methods. Don't slap together several workshops from outside experts and call it a day.

#4: Speaking of outside experts, how about inside experts? You will be amazed, shocked and stupefied by how much your people know, if you just ask them. Trust me on this.  Plus, you'll save a boat-load of money on consulting fees. 

#3: Social media. Yes, you've been told that social media can cure every ill that ails your company but in the case of training, it is a powerful tool. That doesn't mean you need a complicated system. Do you know what social media is? Knowledge Sharing. Do you know what knowledge sharing is? Bob has a problem. Julie has a solution. Julie tells Bob the solution. Done. I've seen it in action, my friends, and it is amazing.

#2: Training should not be just fun. I always get push back on this, but I don't understand the obsession to make learning fun. Training should not be boring, agree. Training should be useful and relevant, agree. Training should be engaging and experiential, agree. There's nothing wrong with some levity, but most, if not all, people will choose good training over fun training.

#1: K.I.S.S. Keep it simple, stupid. It's easy to get distracted and swayed by fancy talk and one-size-fits-all solutions. Remember the ultimate goal of training. Your company has business goals. In order to meet those goals, your employees and franchises have to perform. In order for them to perform, they need skills. Determine which of those skills are lacking and train them. Done and done!

If you want improve your  franchise training and onboarding, connect with me on LinkedIn and let's talk.

Everyone's busy, stressed out and short of time.  

Are we forgetting some people?  

We usually remember to thank our customers.

And we probably don't have any trouble thanking family.

However, there is a group of folks that are often left out of the "thank you" pile. 

And that would be our co-workers. 

Known as our INTERNAL customers.

The folks we spend most of the day with side-by-side. The folks that are thought of as our 'home away from home' family.  

Sure, we argue and disagree with co-workers just like our family. And that's OK, because most of us have a family environment in our office. We understand that.

It's our office family. 

Our word of the day is: WACTEO.  

No need to look it up . . . we made it up. Here are the ground rules for WACTEO: We Are Customers To Each Other: 

 

1.    Understand Your Role - Each employee should know the mission of their organization and the role they play. Those of us who are in a small department of a large company can often times miss the big picture. If you don't know the mission of your company, ask for it. Keep it at your desk. It will help you with the big picture. You may start to understand the 'why' of the things you're asked to do sometimes and 'why' internal customer service is everyone's responsibility from president to maintenance. If management isn't doing their part, often times the entire customer service program will go out the window. We don't want double standards. Remember it starts at the top!  

2.    Respect Employee Differences - Cub fan? Cardinal fan? Republican? Democrat? Rock music, classical, whatever. Just because we don't agree with someone doesn't make us right. Differences are crucial for an organization. Differences are key to understanding people. If everyone thought the same way, most of us wouldn't be needed. It's not healthy to argue just because a co-worker isn't doing it the way you would or thinking the way you do. Learn to respect the differences. That's why we have chocolate and vanilla ice cream.  

3.    Recognize the Personal Space of Others - Simply put, this boils down to the golden rule. Those who can work with a radio playing music may disturb others around them who aren't able to concentrate. Loud voices around someone who's on the phone with an external customer can be annoying also. If you're working in a cubical or sharing an office or area, we need to recognize there are others around you. Be sensitive to their wishes, as you would hope they would be to yours. 

4.    Work to Resolve Conflicts - Who hasn't had unkind words with another employee? Or perhaps you and a co-worker strongly disagree on a project or idea. Not trying to make it work can only lead to more stress and frustration. Learn to work it out (notice I didn't say 'try' and work it out), even if you need to call in a professional in the area. Normally someone from HR or another trusted employee can usually be of help on conflict resolutions.  

5.    Show Appreciation - We saved this for last because being appreciated, showing you care with a genuine 'thank you,' is critical to WACTEO. It can be a note, a phone call or just stopping by an office and letting someone know they did a great job. This makes a huge difference in our internal relationships. There are surveys upon surveys that show how much a genuine pat on the back of appreciation is thought of as a way of special compensation.

 

A recent IFA Annual Conference speaker, Nancy speaks at franchise meetings across the country.

Her passion for the small business is second only to her techniques on sales and customer service.

Her reviews at IFA were off the chart. Contact Nancy personally about your meetings.

Everyone in sales hears, at one time or another: "We cannot afford your proposal."

Sometimes you just have to listen more, as this story shows:

But, sometimes people are objecting to your price. This is at least (2) different types of objections.

1 .The first objection dismisses your solution to their problem.

Your solution doesn't solve anything for them because they don't have that problem. So, they say "we cannot afford this". These people are not qualified to buy from you. You should sell them something cheaper or simply move on.

2. But, the second type of objection -which uses the same words- is different objection entirely.

The need is acknowledged as real, your solution a good one - but, your solution cannot work here and now because we don't have new sources of funding. These people are qualified to buy from you, but they are not ready yet.

Be clear on which type of objection you are hearing.

Responding to the second type of objection can be hard. After the budget has been set, it assumes a permanence that is unrealistic.

Instead, trying asking:

"Well, if we had been considering this proposal at the time we set the budget, what would we have done? What would we have cut out then & what cannot we do that now?"

And, see if you can get away with "we" instead of "you".

1. Most good ideas have to find funding.

2. More money is never allocated in the budget line under: "Good ideas, to come later."

Here is one trick that I know works for franchise vendors: If the franchisor has no more marketing spend, then ask about their training budget.

Many times a franchisor needs an educated or trained franchise owner for the system to work better.

So, ask for some training dollars, put on a workshop, and gather up some interested names/emails.

Follow-up with a nurturing newsletter program. Rinse and repeat with another franchise system.

(Inspiration for article: Buy-In website.)

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Death of a Franchise Salesman

| 0 Comments | 0 TrackBacks

Arthur Miller's character Willy Loman is the tragic protagonist in the 1949 play "Death of a Salesman".

Miller's play is an enduring story about an aging  and now mediocre salesman who has lost his enthusiasm for selling.

Willy is in the twilight of his career. He does know his product well, maybe better than most of his peers. 

Great actors like Brian Dennehey, Fredric March, Dustin Hoffman, George C. Scott, Lee J. Cobb and Philip Seymour Hoffman have all portrayed Willy on stage and screen.

There's no question that "Death of a Salesman was one of the greatest plays of the 20th Century.

Death of Salesman Phillip Seymour Hoffamn.jpg

So what's Willy Loman got to do with the Death of a Franchise Salesman?

Well I don't think Willy sold franchises? 

In the play Arthur Miller never reveals what Loman sells. Could you imagine getting into a car and going from town to town equipped with a briefcase and sell franchises in 1949? 

Who would ever do that?

Colonel Sanders.jpg

In 1952 Colonel Sanders did just that.

He traveled across country from Corbin, Kentucky to Salt Lake City, Utah to sell his first Kentucky Fired Chicken franchise to Pete Harman.

And KFC franchising was born.

I talk with a lot of people in across franchising at all levels. And franchise company presidents have expressed a concern. They think that they may have Willy Loman selling franchises for them. Not the tragic version in the play, but a failing franchise seller nonetheless.

This is their perception right or wrong. 

Their solution however is to do something radical to change franchise sales and take them to unprecedented heights. 

They are going to automate the sales process so that an over-the-hill mediocre Willy Loman can sell or even Biff or Happy for that matter.

Franchisors are buying into the hype that franchise buyers are going to self-discover everything they need to know about buying a particular franchise. And all you need do is automate this process for them.

Build it and they will buy.

Here's how it's supposed to work in theory. Leads flow into the CRM. Candidates follow the application instructions and gain access to a series of steps or doors and learn what they need to know to buy the franchise. You can't get from one door to the next without successfully unlocking it.

So all Willy, Biff or Happy has to do is guard the doors and assist the franchise prospect if they run into trouble with the CRM. Once the prospect completes the CRM process one of the Loman's schedules a Discovery Day to get the deal done.

But one day Happy gets an idea!

If he just unlocks all the doors and rushes franchise candidates through the CRM process he can get them to a Discovery Day faster and get more deals. How do I know this you say.

I talked with Happy Loman about it and he told me.

Don't get me wrong I like sales force automation. 

I have been using these databases for over 20 years. I think to do it right you need to first have your franchise sales process set up so that it works for both your candidates and your Willy, Biff and Happy.

Using a CRM to keep the salesperson engaged, in control and attentive to your franchise buyers makes sense.

So before you try to replace franchise selling with a CRM we should talk about why Mr. Loman is not selling as many franchises as you want to sell.

Gaps in Your Defences

What started as trickle could have been a disaster. But, who goes around looking for holes in the Dykes? What sort of job is that?
Mostly, we are interested in sailing the Seven Seas, not standing around looking for small gaps in our defences.
Yet, there is a breed of humans who do exactly that. Auditors.

So, Call in the Auditors
A franchisor executive recently told me this story. They were a publicly traded company. Large cap.
And as auditors are trained to do, they thought they spotted a gap in the franchisor's defences.
They weren't sure.
And they wanted to be sure. (Especially, because it lead to billable hours. Lots of them.)
So, they asked the franchisor:
"Hey, Are Your Franchisees in compliance with insurance requirements as laid out in Franchise Agreement?"
The auditors were doing their job - trying to catch potential leaks before they became floods.

The Production of the Records
So, this franchisor executive asked for the production of their insurance file from staff.
Simple request.
Here is what the request produced:
1. The franchisor didn't know if they were named as "additionally insured". Meaning they didn't know if they were going to be covered if the franchisee and the franchisor were going to be sued, together. If a franchisee is sued, the franchisor almost always sued, too.
2. The franchisor didn't know how many franchisees were in compliance with the insurance requirements.
3. The franchisor didn't how many franchisees had the right amount of coverage.
4. Heck, the franchisor didn't know how many franchisees even had insurance!
He complained to me:
"KPMG asked for records - we didn't have them. Caused us a lot time and money - all of which was wasted."
Cleaning up after a flood is not so fun.
dutchboy.jpg
The Program Insurance Certificate Solution
I told you that true story to tell you another one.
That same franchisor executive told me how he had implemented a program insurance certificate program at the previous franchise he had worked with.
It was a simple idea:
a) Appoint an insurance broker as the preferred vendor for insurance.
b) As part of the deal, the insurance broker had to keep a record of all the insurance certificates.
c) As part of the deal, the franchisor would give the insurance broker the telephone numbers of each of the franchise owners & tell them to expect a call.
The franchisor got their insurance records for "free", and the insurance broker got the opportunity to make a lot of warm sales calls.
Better than waiting for flood, wouldn't you say.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Document, document, document! It's the mantra of the human resources profession.

Create timely and thorough documentation for all employment decisions.

On the other hand, supervisors and managers often view documenting as a chore they simply don't have time for.

But do they have time for the following all-too-common scenarios?

  • Rebecca, has performed her data entry job poorly for several months. She is consistently late and her work is often inaccurate. The manager has spoken with her and given deadlines for improvement but the deadlines have come and gone. The company decides to fire her but wants to wait a few days until the manager returns from a business trip. Before he returns, Rebecca suddenly goes out on leave under the Family and Medical Leave Act (FMLA) for a problem with her back. Upon her return, the company fires her for poor performance. She claims the company retaliated against her for taking FMLA leave. Without documentation of her performance problems, the coaching efforts or the timing of their termination decision, the company has no defense against her claim of retaliation.
  • Joe, performs some aspects of his graphic design job well but is often slow to get back to customers. Co-workers pick up his slack. Resentful, two of the best employees quit so the supervisor knows she needs to fix the situation quickly. She approaches Human Resources about firing Joe. The HR administrator check's Joe's personnel file and finds several years' worth of good performance evaluations. So she says, "You can't. At least not yet." The supervisor and HR work together on a coaching and performance improvement plan that will take a couple of weeks to implement. The turnover adds pressure until replacement staff can be hired and brought up to speed. Staff members grumble louder than ever.
  • A supervisor in a retail store, Marcus, asks employee, Kaitlyn, out on dates every day. She tells him, "No, thank you" but he keeps asking and makes comments about her body that make her feel uncomfortable. It is Kaitlyn's first job and she doesn't know how to handle the situation so she quits. She was given a copy of the company's sexual harassment policy on the first day, along with a stack of other papers. No one told her what was in the policy, she never read it, nor did she sign an acknowledgment that she received it. Her mother helps her contact the EEOC. They decide to pursue two claims: one for sexual harassment and one for constructive discharge. (Constructive discharge is when an employment situation is made so intolerable that a reasonable person would quit.)

All of these scenarios are preventable surprises.

Supervisors and managers and those responsible for handling human resources need to understand that creating timely documentation is a critical part of their role.

Here's 5 reason why:

1. Documentation is vital in an employer's defense against discrimination and other employment claims;

2. Memory alone will serve poorly in court. The lack of documentation will be a glaring omission and could paint the employer in a potentially suspicious light, particularly in a jury case as juries are notoriously pro-employee;

3. Documentation can explain how a situation was handled when an individual involved is no longer available to testify;

4. Documentation can verify that employees have read (or heard) and understand information they were given;

5. Documentation helps supervisors provide accurate and constructive performance feedback to employees.

When you need help implementing your HR audits, connect with me on LinkedIn and let's talk about how we can help you. 

If someone asked you 20 years ago which newspaper they should advertise in for franchise leads, you would want to know several things.

How big was the circulation of the newspaper? Was it a serious paper with articles on finance and business? Who were the readers?

Now, you have many more options: print, online, press release, display ads, search, pay per click, business directories, and trade shows.

How can you get more from my franchise lead budget with all these various options? How do I re-balance between them? What makes sense as a better balance? How do you decide where to advertise?

The basic methodology remains the same as it was 20 years ago.

And fortunately, much of the answers are far more transparent today than 20 years ago.

The General Test

1. How much am I spending now, in a particular medium?

2. What are the general metrics for that medium in terms of readers & time spent?

3. Are there cheaper substitutes which have similar engagement metrics? If so, put more money into the cheaper but similar substitutes and see if you get more leads. Repeat every 6 months to a year.

Here is a simple example, using data from 2012.

We know from the 2012 Franchise Update Survey that the median spend for lead generation is between $150 - $175k.

Ad Balance.png

1. The Franchise Portal Spend

On average, then people are spending between around $42,000 and $51,000 on advertising for leads using Franchise Portals.

In essence, the format on the Franchise Portal is a display ad in a business directory with an application form to fill out for more details.

2. What are the Engagement Scores of the Franchise Portals?

It is very easy to get some objective comparsions between the various Franchise Portals.

I compared our site, franchise-info.ca to 4 webportals: franchise.com, franchisegator.com, franchisedirect.com & franchising.com, in 2012.

Click on the image below to expand it.

Webportals.png


First, you want to focus the rank in US.

1. Franchisedirect

2. Franchisegator

3. Franchise-Info

4. Franchising.com

5. Franchise.com


Second, you want to pick some measure of engagment, say time on the site.

1. Franchise-Info

2. Franchisedirect

3. Franchisegator

4. Franchise.com

5. Franchising.com


Or you might pick pageviews, as another measure of engagement.

1. Franchise-Info

2. Franchisedirect

3. Franchise.com

4. Franchisegator

5. Franchising.com

3. Are there cheaper substitutes with similar engagement scores & that should produce the same number of leads for less?


Suppose your budget shows that you have been paying $800/month per display ad for portal 1 and $600/month for portal 2.

First, forget about the actual leads because we are interested in maximizing expected leads.

Second, is portal 2 more engaging than portal 1?

This calls for some judgment about how to balance relative rank against pageviews and time spent.

Make your decision, record the reasons why, and then revisit it in 6 months. Do the numbers still make sense? Is there evidence that you made the right trade-off? Should you rebalance again?

Keep at it and over time this rebalancing method will prove to produce better leads for less dollars.

If you want to use LinkedIn to recruit franchise operators, ask us to send you the LinkedIn Sponsored Content Guide. We will sign you up for our LinkedIn Marketing Tips newsletter, too.

The rise and fall of the Roman Empire has a lot in common with selling franchises.

The Romans built an enormous empire that at its height spanned from Spain to the Middle East. They built great cities and famous aqueducts.

They were able to do this well because they developed an exceptional formula for concrete.

The Romans were not the first to use concrete.  But they improved upon it by using volcanic ash which allowed it to set underwater and the addition of horse hair made it less prone to cracking after the concrete dried.

Unfortunately, with the fall of Rome by 500 AD their technique for concrete was all but lost. The Visigoths were not much interested in building roads.

(The use of concrete not revived until the 14th Century through 18th Century. Modern concrete with Portland Cement and reinforced concrete were developed in the 19th Century.)

We are in danger of losing the formula to sell franchises.  Because technological visigoths who are yelling about "social selling" don't know how to screen and qualify.

In franchising up until the mid to late 1990s inquiries for franchises came in primarily on the telephone. And franchisors trained people to screen and qualify the callers interested in a franchise. Many had fine-tuned scripts to use for incoming telephone inquiries.

On the first call you determined if the inquiring party's area was available for development, whether they had the requisite liquidity and net worth and answered basic questions.

Only if they qualified they became a lead. 

You then sent them a franchise information packet by mail, Priority, NextDay or FedEx. And they were in the top of your franchise sales funnel. 

You followed up in two days to ensure the lead got your package and you could advance the prospect through to the next step. Franchise sellers had an easier time then because they had a good telephone number and that's all you needed to reliably be able to contact franchise candidates.

In the 21st Century a telephone franchise inquiry is a very rare occurrence. Franchise qualification specialists and franchise sellers go to their email inbox or CRM to see who has "expressed an interest" in their franchise. 

The advent of internet and web-based lead generation in franchising means that franchisors have development teams who have never had to screen and qualify candidates effectively at the outset. 

Franchise sellers have to trust the Request Information Form to do the qualifying for them & trust they get the inquiring person's telephone number and email address. 

In the pre-web lead world franchisors had the opportunity to have a great formula for incoming telephone franchise inquiries.

Yet with all the fantastic technologies that the internet and digital age affords us franchisors have lost this formula. 

People who inquire today don't have to qualify and they don't have to use a real telephone number to get the franchisor's information.

All you have to do to get a current comparison of web franchise inquiries to an inquiry similar to the ones we used to on the phone is to look at how franchisors get leads at trade shows. 

At trade shows we talk one on one with people, get to ask qualifying questions, get their telephone number & email and tell the franchise lead what to expect next in the franchising process. 

So what's a franchise seller to do about their formula and make it better?

  1. Re-think the top of your franchise sales funnel
  2. Stop overwhelming inquiries with too much information 
  3. Get inquiries to do something that expresses their real intent
  4. Give your qualified leads reasons to call you

Technology has changed the way we communicate with one another. 

What hasn't changed are the mental operations that franchise buyers must go through before they buy your franchise and you can't sell unless you get the prospect on the phone. 

For More Great Sales Tips, Subscribe to The Franchise Info Sales Newsletter!

What type of theatre experience have you ever had?

Why do I ask you that question?

Because if you have ever been on stage in a play, part of a band, chorus, dance group, stage manager, grip, sound, prompter, make up, lighting, director, or any form of theatre where the audience and other co-workers are depending on you, then you probably already know the answer to why I ask.

And you probably have a great background for customer service!

I have a professional theatre background and it has helped my career thrive immensely in the customer service arena. Now, it doesn't mean if you don't have a theatre background you won't be good in customer service, it just means you'll understand the mentality of customer service faster, and perhaps better.

Theatre 101, as I call it, is a perfect precursor to being in customer service. It prepares you in the best way for all these topics and many more.

I fibbed, there are more than 11 skills.

That's a good thing though. Here they are.

* Interacting with others

* Being on time

* Knowing priorities

* Learning how to say something even when you forget your lines

* Knowing how to have a phony smile even when you don't want to

* Understanding your problems are just that: your problems

* Learning to work well with others, even if you don't like them

* Understanding how it all 'comes' together

* Helping others when they forget or don't know what to say

* Learning the "show must go on" mentality

* Learning how to read a script without sounding like it

* Knowing the applause is for everyone

* No complaining!

* Keeping your lines sounding fresh no matter how many times you've said them

* Getting it right "the first time"

* Practice, practice and more practice

* Learning to go with the flow

Here's a real life example of "The Show Must Go On" skill:

On the day of one of our Saturday performances (we did a matinee and evening show) I got a bee sting on my foot. It swelled up and I couldn't put my shoe on that foot.

I had a show to do at 2 PM. What to do? What to do? Sure, I could go barefoot, but that might ruin the show for the others. And certainly for the audience. Theatre minds do not want to do that.

So the theatre mind in me said, "Figure it out, Nancy. Do something. You need to be at the theatre in 1 hour and 45 minutes."

Theatre minds are not necessarily logical minds. However, we are spontaneous. We are quick thinkers. We know something has to be done and we figure out how. My husband has a bigger foot than I do so that was not going to look very good if I wore his shoes. (Didn't go with my outfit anyway.)

What to do? What to do?

I believe I did what most fellow actors would do. I thought of something. The stinger of the bee was removed. I took two aspirins and took my own shoes for the show with me to the theatre. I got to the theatre in time for the 30 minute call and told the stage manager (theatre translation: The Boss) what happened. "However," I said, "I'll be ok. It feels a little bit better and I can squeeze into the shoe."

So that's what I did. I squeezed into the shoe and the show went on. The performance was great. The audience never knew anything was wrong.

Was I in pain? Yes. However, I knew I had a job to do. I wasn't going to let the other actors down and I certainly wouldn't let the audience down. In essence they were all my customers. They were depending on me.

QUESTION: If you got a bee sting on your foot, would you go to work? Would you be able to talk with customers and not let that affect you? Would you complain about it, talk about it until others were sick of hearing about it?

The theatre mind is one that thinks of the audience before themselves. In reality it's the same with your customers. Think of them before you. Remember, customer service is the 'stage.' The customers are your 'audience.' Make yourself a STAR.

Thanks for reading.... 

Nancy Friedman , president of Telephone Doctor Customer Service Training, is a featured keynote speaker and subject matter expert on customer service and communications skills at franchise, association and corporate meetings. She has appeared on OPRAH, Today Show, CNN, FOX News, Good Morning America, CBS This Morning and hundreds of other radio and TV shows. She has been published in the Wall Street Journal with her column, "Don't Strike Out with Your Customers." Nancy is the author of eight books on sales, communications skills and customer service. She is the spokesperson in the popular Telephone Doctor customer service training programs.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Why Are Your Franchise Operators Slow Out of the Gate?

| 0 Comments | 0 TrackBacks

In a perfect world, all franchisees would follow the system exactly as intended; they would all ramp up quickly without struggle; and, they would all be successful and happy.

You wouldn't have to answer distressed calls or have tough conversations with under-performing franchisees who blame you, the franchisor, for their failures. However, reality never seems this easy. To some degree or another every franchisor deals with dissatisfied and under-performing franchisees.  

Yet, the sustained growth of franchisors is directly related to their ability to have training and support systems that produce positive results quickly and minimize franchisee dissatisfaction.

A quick ramp-up is the key to keeping a franchisee's head in the game and to eliminating operational and cash flow problems today in the future.

Why don't franchisees who receive the same training and who are being taught the same system have the same results? Why is it that some "get it" right away and run with it while others struggle, and others even fail? 

There are many reasons behind franchisee success-failure statistics, yet they can all be boiled down to the fact that all franchisees are not equal.

Each franchisee fits somewhere in the scale between the ultimate entrepreneur and the ultimate employee with their own unique combination of the traits and characteristics from both ends of the entrepreneurial spectrum.

Additionally, they bring with them different experiences, learning styles, preferences, levels of expertise, beliefs systems, and habits that can work for or against them. And, the challenge lies in effectively addressing this diversity.  

Furthermore, investing in a franchise is such a drastic change that for most people it engenders chaos, similar to a personal inner revolution with much emotional upheaval affecting all facets of the life of franchisees, including their ability to learn.

If training and support systems are not properly structured, if they don't account for franchisees' innate differences and for their emotional reactions, you simply end up with longer learning curves, slower ramp-up, increased franchisee dissatisfaction, and smaller franchisor's royalty stream. 

The bottom line is that franchisees who don't ramp up quickly create more organizational challenges and contribute fewer dollars to help the franchisor fix them.

If franchisees don't experience some early wins, they lose confidence; and, if franchisees' attitudes start to decline before they achieve system mastery, they can slip into "survival mode," which leads them to wrong decisions, panic, and frustration.

Getting them back on track becomes harder and harder until eventually they become part of the statistics we don't like to discuss-they fail.  And, we failed them.

The post Franchisees' Ramp-up Too Slow? Why? appeared first on InFraSu.

Search for Articles

Follow Us

About this Archive

This page is an archive of entries from October 2014 listed from newest to oldest.

September 2014 is the previous archive.

November 2014 is the next archive.

Find recent content on the main index or look in the archives to find all content.

Authors

Archives