Franchise growth sizzling nationwide

 Tom Demeropolis Cincinnati Business Courier

Premium content from Business Courier – by Tom Demeropolis, Courier Staff Reporter

Date: Friday, March 11, 2011, 6:00am EST

Read more: Franchise growth sizzling nationwide in recession’s wake | Business Courier

Ray Wiley knows the challenges of being both a franchisee and a franchisor. The longtime Subway franchisee launched his own Mexican fast-casual restaurant concept in Dayton back in 2007. Now, Hot Head Burritos is one of the fastest-growing franchise concepts in the region.

And in the wake of the Great Recession, Hot Head Burritos could have as many as 100 locations in some stage of development before the end of the year.

Wiley is far from alone, as franchise businesses across the country are gearing up for growth.

Coming out of recessions, franchises historically have grown at a faster clip. Matt Haller, director of communications for the International Franchise Association, said franchises perform better in down economies because of the nature of franchising. Franchises are easier to operate and easier to expand because franchisees can draw from experience in the franchise system and support from the franchisor.

Many who lost their jobs during the recession don’t want to be dependent on someone else for their income. Franchising offers a way to be independent without starting from the ground up.

Don Boroian, founder and chairman of Chicago-based Francorp International, said franchising offers entrepreneurs an easier way to own a business.

“Ninety-five percent of people who try to start a business from scratch fail,” Boroian said.

Franchising is the fastest and strongest way to scale a business to create new jobs and expand a business, Haller said.

Darian Richardson - Owner, RMC Franchise Connect - Cincinnati Franchise ConsultantDarian Richardson, president of Cincinnati-based RMC Franchise Consulting, works with clients interested in buying a franchise.

For the first quarter of the year, activity is up 10 percent compared to the fourth quarter of 2010, Richardson said. He’s seeing increased interest from two different segments: those who have lost their jobs during the recession and those who are looking to franchises to supplement their existing income.

For those making a career change, Richardson helps them investigate the type of franchise business that fits them best.

“If you’re considering starting a business, perform a self-assessment first. Figure out what’s important to you,” Richardson said.

And franchising goes far beyond restaurants. That way, you don’t have to come home smelling like hamburgers if you don’t want to, he said.

Franchise segments that are seeing continued expansion are senior care, personal care, such as hair salons, and business related to pets, Richardson said. There are more than 300 business format lines that operate as franchises, Haller said.

The biggest obstacle facing both franchisees and franchisors is access to credit. Banks have tightened restrictions on lending, in turn making it more difficult for franchisees to get money to start up their own business.

“We’re making the argument now that we can turn this economic recovery into a jobs recovery if we can get the banks lending again,” Haller said.

For every $1 million loaned to franchises, 34 jobs are generated, Haller said.

Credit has been a hindrance for potential franchisees in the past, but a growing number of franchisors are acting as banks for their franchisees. Haller said this is a trend across the board for franchises.

“Franchises are looking for creative solutions to grow their systems,” Haller said.

Toledo-based Marco’s Pizza, for example, has several programs aimed at helping franchisees open stores, including providing them financing or guaranteeing their loans with banks. The 225-unit company has roughly 60 stores in development.

ServiceMaster Clean is offering qualified prospects up to 80 percent financing to start their cleaning business.

Another franchise offering lease finance options is Hoodz Kitchen Exhaust Cleaning, Richardson said.

Franchises of all shapes and sizes have targeted 2011 as a growth year.

Locally, LaRosa’s is looking to expand through multi-unit franchise operators in cities such as Nashville, Louisville and Columbus.

Dunkin’ Donuts experienced a 50 percent increase in development deals last year, crediting existing franchisees and incentives. The chain opened 206 new locations in the U.S.

In some markets, the Canton, Mass.-based franchise offered reduced royalty fees for three years and an extra $10,000 in local store marketing.

After more than 35 years in the franchise business, Boroian said there is always room for another franchise, as long as it’s well-run.

“The naysayers in 1970 said there was no room for another burger operation. We’ve seen burger operation after burger operation go on to flourish,” he said. “There’s always room for one more.”
Read more: Franchise growth sizzling nationwide in recession’s wake | Business Courier

Are you giving good instructions?

Matt Plapp - Cincinnati & Northern Kentucky Marketing & Social Media Consultant
Matt Plapp - Cincinnati & Northern Kentucky Marketing & Social Media Consultant

Recently I bought a new desk.  Once the boxes were delivered to my house, I unpacked everything and organized the pieces by their letter and number.  Ten years ago I would have been stressed looking at these 25 pieces of wood and bags of hardware.  The task of making everything look like the display the store would have seemed impossible.  But I’ve learned a thing or two over the years, the most important is to follow the instructions.  I followed every word on every page and sure enough a few hours later I’ve got a beautiful new desk.  This was similar to my experience over Christmas with my son and his Lego’s, everything went as planned, except for searching for an occasional dropped piece:)

I bring this up because I can’t help but think how detailed instructions could make customer service top notch.  What if every time you hired an employee you had a multi-page document that outlined your company, what you did, why you did it and the expected result.  If every task they were required to perform was written down to the smallest possible detail.  Just imagine how many of your customer complaints would go away.  How many times does a customer have a bad experience with your company because a few steps were skipped in the process?

Now, relate this to your marketing plan.  Have you ever written down everything you are going to do each month to help drive sales and profits.  Defined the goals of each marketing medium and outlined to your staff how this should be carried out?  How can you expect good results without doing this?  AND how can you judge a particular advertisement without setting the proper ROI goals and expectations.

My challenge to you is not only to sit down and write out instructions for your business before 2011 is gone, but to also map out your marketing plans just like you were leaving tomorrow to drive to Nebraska.  Make a plan and stick to it, and I’m sure you’ll have a great looking desk in 9 months.

Matt Plapp is a the President of Driven Media Solutions, a Full Service Marketing Firm in the Cincinnati Northern Kentucky area specializing in small business marketing via grass-roots, events, guerilla, online and social media marketing. You can contact him at matt@mattplapp.wpengine.com.

Dorron Hunter Featured On Channel 9

A close friend of mine, Dorron Hunter, is featured in this video on his work in Over The Rhine and with the youth.  Dorron is an inspiration to me and the work he does is making a major change.  I’ve not only worked with Dorron and his kids the past 2 1/2 years, but a few of these young men work for me part time on marketing projects.  Dorron is helping change lives.

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