Let’s Get Together

Let’s get together at the upcoming IFA Convention — either for business or to just meet and chat. Either way, let’s make the most of what is sure to be a great event.

I’m always excited to work with startup and emerging brands in franchising. The passion exhibited by founders is something that I truly cherish. To that end, my own passion is helping them achieve their goals.

With the IFA Convention just around the corner, I’m looking forward to sharing how Franchise Foundry can help franchisors:

  • Improve system sales and unit-economics
  • Strengthen franchisee relationships and communications
  • Increase franchise interest and actual franchise sales
  • Explore strategic or financial partnership for future opportunities

So, if you’re a franchisor with any of these objectives, we should meet in Vegas and explore the possibilities. I’m confident Franchise Foundry can help you achieve your goals. Of course, if you’d just like to get together for coffee or a drink and have a meaningful discussion about challenges franchisors are facing today, I certainly look forward to that as well. Or, maybe we should just exchange cards and agree to touch base after the convention? That works, too.

In any event, please contact me at psegreto@franchisefoundry.com. Let’s make the most of the IFA Convention experience… together!

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Why Sweeto Burrito?

I love food. So when Jon Pierre Francia, the founder of Sweeto Burrito, invited me up to Idaho Falls to sit in his truck and try out some of his burritos, I grabbed my 10 year old son and hopped in the car.

2012-11-28 09.02.40welcome-idaho

It’s about a 4 hour drive from Provo to Idaho Falls so we planned to stay the night with family in Rexburg (thanks Carly) but we were going to spend the afternoon in the truck to see Sweeto in action. We were headed up in November and Sweeto Burrito is a food truck in Idaho Falls. I have to admit that we weren’t expecting a crowd to be standing outside in near freezing temperatures, but there they were and once we tried the food, we understood.

Ben and I shared a burrito – they are big. We started with the Papi Chulo — what seems like a traditional carne asada burrito but it is amazing. It’s everything you could hope for in a carne asada burrito and then some. After we ate, we went inside. Jon Pierre runs a tight operation and the people there love it. There is something very cool about being inside the truck watching Jon Pierre’s team work side-by-side. They have worked together in North Dakota and at the Sturgis motorcycle rally. They have a really cool story and you can tell that it has brought them together. But most importantly, they make amazing food and their customers love it.

My son and I watched as customer after customer would come up and wait outside in the cold for their Sweeto fix. Here’s my son eating his share of a Buff Chick — an unbelievably tasty burrito:

2012-11-28 15.14.34

I’ve since been up a couple times and Sweeto Burrito never disappoints. The Foundry team is excited to be backing Sweeto Burrito. We are going to help them prepare to offer franchises and then we will support their development efforts and oversee franchise support. This is a great opportunity for Franchise Foundry and we believe it will be great for Sweeto Burrito as well. And now I have a reason that I have to eat Sweeto — quality control.

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The Sub Zero Shark Tank Pitch

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Handling the Onslaught of Leads

Spikes in lead flow always present an interesting challenge. Our client, Sub Zero Ice Cream and Yogurt, was on ABC’s Shark Tank last night and it generated a tremendous amount of interest in the Sub Zero franchise opportunity. Sub Zero has never had trouble generating interest in the franchise, but Shark Tank definitely increased the number of inquiries we received.

So how did we prepare to deal with the lead flow? Here are a couple things we did and they seem to be working. Hopefully they are useful to you if you find yourself in a similar situation:

  1. We use a great CRM. At Foundry, we use Salesforce.com. There are a number of CRMs that are exceptional and some of them are designed specifically for franchising. We use Salesforce.com because we are nerdy enough that we want to be able to completely customize our workflow and autoresponders. It has been a great tool for us because we know how to use it. It’s overkill for many development operations but it works for us.
  2. We use MailChimp. I am a huge fan of the simplicity of MailChimp for sending out and managing lists. We were able to directly import all of our new contacts into MailChimp and send out an email campaign to everyone who responded to the show.
  3. We setup a public calendar to simplify setting up phone calls. One of the hardest parts of lead qualification is trying to get people on the phone and arranging schedules. This posed an especially difficult problem for our team with the huge influx of leads. We wanted to spend more time on the phone and less time trying to arrange schedules. By posting our available times at Doodle.com and allowing interested parties to schedule a time with us, it greatly enhanced our ability to get people on the phone.
  4. We updated our electronic collateral to highlight the show. This provided relevant information to people who had seen the show and wanted to know more. We also updated the website and social media channels to make sure everything was in order so that people could explore and learn more before submitting an inquiry.

It’s a work in progress, but so far so good!

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Sub Zero on Shark Tank: Now the Real Work Begins

We were very excited to see our client, Sub Zero Ice Cream and Yogurt on ABC’s Shark Tank. The experience was fantastic and for us at Foundry. Our work on the project, as part of our overall franchise development and management program, included promoting the event on various social media outlets and across multiple marketing channels. We did this before, during and after the show. Prior to the show we also worked with operations management in training franchisees and staff to handle increased traffic and potential questions from customers.

And now the real work begins. There is plenty to do to help our client capitalize on this tremendous opportunity. Our next step is an immediate focus on franchise sales as we’ll lead the effort of working with hundreds of franchise leads that came through the franchise development site within hours of the show. The site traffic actually crashed the website four times in the process, but Sub Zero’s web hosting provider was able to resolve issues quickly. We will also be combing through hundreds of comments on Facebook and other social media as we’ve seen roughly 20-30 requests for franchise information there as well.

This will be an exciting experience to document — we want to be able to do more the next time we are presented with a similar opportunity. It’s also going to be quite interesting to analyze all the social media data leading up to the show, during the show and I’m sure for quite some time after the show.

Yes, NOW the real work begins!

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Franchise Foundry Completes Merger with FranchisEssentials

Today, Franchise Foundry announced the completion of its merger with FranchisEssentials. FranchisEssentials Founder, Paul Segreto, has officially been named Chief Executive Officer of Franchise Foundry.

Operating in the leadership role since forming a strategic partnership with Franchise Foundry in June 2012, Segreto will continue to spearhead efforts aimed at improving unit-economics of Foundry’s current brand portfolio, and attracting new franchise brands for its comprehensive franchise development and management program.

“The leadership and reputation of our two brands are long-standing staples within franchising,” said Christian Faulconer, Senior Managing Partner of Franchise Foundry. “Combining the two, and capitalizing on the strengths of each, allows us to offer a broader range of services and provide additional focus and quality to developing growth and improving a variety of franchise systems.”

With the merger complete, Franchise Foundry will administer franchise management and development services which include franchise operations, training and support, compliance, sales and development, technology implementation, and marketing and social media, as well as providing interim c-level management for franchise companies. Additionally, Foundry will develop and implement franchise rescue and turnaround strategy, change and transition strategy as well as acquisition and partnership investment and match-making.

“We are thrilled to provide our expertise and knowledge to the extensive list of Franchise Foundry brands,” said Segreto. “Our mission is to continue growing and extending our reach and influence throughout all of franchising, and Franchise Foundry is the perfect organization to make that happen,” he added.

In addition, the merger included other FranchisEssentials brands and divisions along with other ventures of Paul Segreto, often closely tied with FranchisEssentials brands. These include: Franchise Today on Blog Talk Radio; FranSummit, a virtual events platform (in partnership with ElementsLocal); and Personal Branding for Franchise Professionals.

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Sub Zero Ice Cream Selects Franchise Foundry as Development Partner

-The Customizable Ice Cream Shop Looks to Expand Nationally-

PROVO, UT – November 1, 2012 – Sub Zero Ice Cream and Yogurt today announced that it is partnering with Franchise Foundry of Provo, Utah to franchise its personalized ice cream and yogurt experience across North America and Internationally.

Since 2004, Sub Zero has served its ice cream and yogurt using cryogenic processes to create custom creations for every customer. Because customers can choose from bases ranging from sugar free and dairy free options to yogurt to premium cream, customers can create an unbelievable number of different flavor combinations.

Jerry Hancock, CEO and Founder of Sub Zero Ice Cream and Yogurt, announced the partnership: “We are pleased to be working with Franchise Foundry to provide us with the operational support that our franchisees deserve. We are very proud of our system and what we have accomplished and we believe that with this partnership we can continue to build Sub Zero into a national brand.”

Christian Faulconer, Senior Managing Partner of Franchise Foundry, immediately recognized the franchise opportunity that Sub Zero presented. “Sub Zero is an interesting opportunity because it is a relatively low cost investment and allows many franchisees to accomplish multiple unit ownership faster than is possible in other brands. We believe Sub Zero is a great franchise opportunity and we love the product.”

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What does the FranchisEssentials Partnership Mean?

We recently announced our partnership with FranchisEssentials in this press release. We are excited about the new direction we  are headed at Foundry and working with FranchisEssentials is key to our future success.

Paul Segreto is joining Franchise Foundry as our Chief Development Officer. He will be actively looking for new clients that we can help grow. Additionally, Paul brings his years of experience as both a franchisor and a franchisee. This will be a tremendous resource to the brands that we service at Foundry.

One of the first tasks he is undertaking is to strengthen our unit economics strategy for some of our clients. Successful franchisors recognize how important it is to have successful franchisees. Gone are the days that the franchisor can simply license the business model to a franchisee and wis them well. Today’s franchisors have to take an active role in training successful franchisees. At Foundry, we believe that the key to success as a franchisor is in the success of the franchisees.

We are thrilled to have Paul on the team and excited about the future of Foundry and FranchisEssentials.

More to come soon.

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Marketing Your Franchise

Any franchise owner will tell you that one of the biggest benefits of owning a franchise is leveraging the franchise brand with its regional or national marketing. However, truly successful franchise owners know that effective local franchise marketing is what makes all the difference.
“We coach our franchise owners to always make time and budget for local marketing,” says Craig Donaldson, president of ChemDry. “As a general rule, the franchise owners that generate the most revenue are the ones that really grasp this.”

In the past, local marketing consisted of mailers and coupon books (which for the most part have very low response rates) and was dominated by one major medium.

The Phone Book.

For decades, regardless of whether you were in the service, restaurant or retail industry, the local area phone book was a keystone of your local marketing. According to Scott Abbott, CEO of Five Star Painting (one of the top 100 fastest growing franchises of 2008), the phone book is still king. “We help franchise owners use local marketing for lead generation and for now our franchisees still get the vast majority of their leads from it.” Nevertheless, there are major changes happening on the local marketing front, and Abbott sees them heading their way. “Although we still see the most traction from the phone book, I suspect that will change in the next few years. That is why we’re investing in local online search marketing.”

By all accounts, this is a wise move. Online local searching is when customers use search engines to find information about local businesses. This is not a web-wide search, but one specific to the city or region of the searcher. The number of local business searches online increased over 20% last year (www.comscore.com), and according to a research report from the Kelsey Group (http://www.kelseygroup.com/), 54% of consumers have substituted internet search in place of their phone book. In these economically tight times, the majority of businesses are lowering their traditional marketing budgets while increasing their online marketing, especially in search engines (http://www.webpronews.com/topnews/2008/01/18/online-advertising-to-reach-50-billion). Much of this is due to the ability of search marketing to focus on specific geographies, key words and tools that empower business owners to accurately calculate and predict ROI.

This isn’t to say that local marketing in the phone book is dead, but the tides are changing. For instance, as Scott Abbott said, the most effective local marketing for Five Star Painting is the phone book. This makes sense with the most recent data collected by comScore (http://www.comscore.com/). According to recent surveys, when asked, “In general, what is the first thing you use when searching for local business information?,”  the phone book and online search engines went head to head with the phone book getting 30% and search engines getting 33% (the rest was made up of 8 different marketing mediums). Five Star’s claim makes even more sense when you consider their target audience. Five Star paints residential homes, meaning their audience is mostly 45+ home owners. The age breakdowns of the above question show that for this age group, 45% selected the phone book. On the other side of the coin, the phone book only received 18% by those under 45.

“And that gap is closing,” says Chris Bennett of the 97th Floor (http://www.97thfloor.com/) search engine marketing firm. “Every study and survey shows that the online age gap is closing, and it will get even smaller in the future.”

And what is the future of local marketing? “Mobile searches,” says Bennett. “Without a doubt, smart phones, like iPhones, are increasing local searches like crazy”. With this new technology, users are able to use Google-powered searches which are integrated with GPS technology. This gives users results the second they want them (not making them wait until they reach a computer or a phone book), and it gives them the results that are closest to where they are at that moment. In other words, local marketing won’t mean your city or neighborhood anymore. Local will depend on where your potential customers are when they make the search.
According to Bennett, franchise owners’ search engine results will mean more than ever. “When a customer wants a frozen yogurt they can search for it and find the one closest to where they are at that moment. The ones that show up are the ones investing in online search engine marketing now.”

For most franchise owners it makes the most sense to do local marketing using every medium possible. For now, the two that make the most sense are the local phone book and local search results in popular search engines like Google. While buying space in your local phone book is as easy as calling them, ranking in local search results is a bit trickier.

Here are 5 tips to help you get good rankings in local search results:

Use Google’s Local Business Listing (LBC)
The first step is to list with Google’s Local Business Listing. Almost 80% of all searches are done in Google, so if you can get listed there, the others will be much easier. The LBC is where you officially tell Google about your business and its information. Local search requires structured data to be effective. Google needs to be able to match the business to a location. By submitting a business listing, you’re giving Google the data confirmation it needs to make the association between your business and your place on the map.

Have a web page for your local franchise

In most cases your parent franchise will have a site. But increasingly, franchisors are empowering franchise owners with tools that allow them to have their own page or even sub-site. This is critical for local search ranking. Make sure your page is optimized for search engines. As a beginning, make sure your address, directions, phone number and all other contact information are in text (not an image) on every page. You can find more information on this here: http://www.smallbusinesssem.com/8-simple-steps-to-make-a-page-more-local/175/.

List in Internet Yellow Pages
These are often called online local directories. They include providers such as Superpages, YellowPages.com and dexonline.com. Paying to get listings in these directories is good for 2 reasons. The first is that it is another medium for which customers can find your business. The 2nd is that being listed on these trusted sites can help your local search ranking.

Get reviews
One of the ways to increase your local search ranking is to get reviews from customers. Google allows users to add reviews to local businesses. It also grabs reviews from other 2nd tier sites like Citysearch.com and Insiderpages.com. Getting good reviews can dramatically help your ranking. Make sure not to fake these or upload them yourself. It’s obvious when franchise owners do this and it will hurt your cause more than it will help it. However, you can suggest to your satisfied customers that they add a review.

Pay to play
Google breaks down its search results into two categories, organic (these are the majority of the results) and paid (these show in the “sponsored” section). Getting ranked in the organic section can take time, so in the meantime, you might want to use their “pay-per-click” system. Pay-per-click advertising allows you to bid on specific keywords, set a daily limit and not pay unless someone clicks on your ad. This can help you get your business noticed by local searchers while you wait for your organic listings to take hold.

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Funding Your Future Franchise

It’s no secret that the current economical climate has affected the franchise world for good and for bad. On the “good” side of the spectrum, people who have been content working for others are re-evaluating their professional options. If you own your own business, you have greater control of your future and are able to reap your rewards instead of passing them to your boss.

On the other side of the spectrum, you have the negative effects. This can be summed up in one word – funding. Across the board, getting loans and funding for anything from a home to a car to (of course) a business is harder than it has been for decades. However, that certainly doesn’t mean you should throw in the towel. If you’ve found a franchise opportunity that’s the right fit for you, then there are still ways to get the funding you need. Here are some things to remember as you start the process:

Choose the right franchise:
When you are looking at franchises there are a few things of which you need to be aware. If you’re going to be an owner operator, make sure you like the work. Talk to as many franchisees as you can. Be objective about what your return will be.

When it comes to funding, there are 2 very important things to look for:


SBA Approval:

If you are considering buying franchises, focus on those that are SBA approved.  The SBA approval increases the franchise’s legitimacy in lenders’ eyes and, generally speaking, makes it easier to find funding.

Franchisor Financing – Look for franchise concepts where the franchisor is willing to do seller financing on the franchise fee. This is becoming more common in today’s market, and it will help decrease the amount of capital you need upfront.

Be prepared:
Getting funding is not a casual matter. This means you have to get your act together before you start applying for loans. Too often people try to get funding before clearly identifying their financial needs, so one of our recommendations is to develop a strategy that includes several financing options.

Have a business plan in place, but also a finance plan – Who are you going to go after? Do you know how much you’ll need?  What are your pro forma projections? These are things that a good franchise system will help you get together. Knowing that information will save you time and increase the likelihood that you will get funding for your franchise investment.

Talk to other people who have raised money and ask them how they got it. What hoops did they have to jump through to get it? This may help you avoid major pitfalls and may also help you create the connections that can make all the difference.

Break it down

One thing to remember when buying a franchise is that the investment can be broken down into several categories. Rather than trying to fund the entire investment from a single source, you may want to consider funding the various parts of the investment individually. Your investment is typically broken down into categories such as franchise fees, real estate, equipment and other start-up costs. Here are some examples and breakdowns of how to go about securing funding:
Franchise fee – You should be able to negotiate seller financing with the franchisor, especially in this downturn economy. Franchisors are trying to sell more franchises and they’re probably willing to cut you a deal.

Equipment – Because this is usually a hard asset, this is something that is easy to get a loan against because it can be collateralized. You should try to get a lease agreement with the bank to finance that over three or four years.

Real Estate – With the downturn in the real estate economy, you should go to the owner of the building and ask for tenant improvements and ask for him to finance this portion of your start-up costs.

Choose the right lenders

Once you’ve found the right franchise, prepared a well-thought out business plan and broken down your costs, it’s time to find the money. There are many different types of loans and leaders you can appeal to.

Love loans:

These are loans from family or friends. It’s not unusual for a parent, grandparent, friend or neighbor to be willing to help you raise your needed collateral by investing in you. In fact, with the economy and job market on the ropes, many parents are buying franchises for their college graduate children to run. This provides their child a job with real business experience, while also receiving a better return on their investment than the current market could render.  Be forewarned, although these can be some of the easiest loans to get, they can be the most costly (in many different ways) if things take a bad turn.

Local Banks and Credit Unions: There is a lot of research highlighting ways the credit crunch has hurt big banks, but in most cases, local and regional banks haven’t been hit as hard. If you are a member of a local bank or credit union make an official presentation (see Be Prepared). Local financial institutions are much more likely to help local customers opening local businesses.  That being said, you go in expecting to have to give a personal guarantee.

State Programs:
A recent report by the IFA Educational Foundation determined that for every $1 million of lending obtained by franchised businesses, 34 jobs are created and $3.6 million in annual total economic output is generated. These are the types of numbers state and local leaders like to hear. Some states have special programs for small business owners to receive funding if they invest back into the community. Talk to your local representatives and see what options are available to you. 

Severance Package:

Some of you reading this might be looking at buying a franchise because you are out of work due to the massive number of layoffs happening across the country. If you have a severance package, use it to fund a franchise purchase. It might be the best investment you ever make.

Finding funding for a franchised business is still much easier than starting on your own, but there is still a lot of work that goes into finding it. The bad news is that franchise sales are down nationwide because of this. The good news is that this means that those who are able to find the funding are much less casual about their investment and more prone to success.

So, if you’ve found the right franchise, and you’re willing to work at it, you can find the funding.

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