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Information and Advice That Matters
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In This Issue
-- IFE Recap
-- Licensing versus Franchising by Robert Townsend, Attorney
-- Generating Franchise Leads From Your Website
-- "In Search of Excellence" - Revisited after 25 years.
-- Ego Makes Entrepreneurs? Brian Wu
Dear Ed, This issue includes an article for those who look to licensing vs. franchising, a report on franchise lead generation, with some interesting results and a trip back in time. Ed Teixeira, Publisher - Carol Moccia, Editor |
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IFE Recap
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Recently, I presented a seminar to prospective franchisees at the International Franchise Expo in Washington, D.C. It was titled "Meeting The Franchisor At Corporate". There were some interesting questions from the attendees. Here are a few of the questions and my responses to them. The question you need to ask yourself is, would you agree? Q. I'm invited to visit a franchisor in Boston and I live in Baltimore. When I asked if I could obtain a copy of the UFOC before my trip, I was told I needed to wait until I visit. What should I do? A. My advice is to avoid spending the time and money to make a trip unless the franchisor sends you the UFOC. It doesn't make sense for you, and quite frankly for them, to have a Discovery Day visit before you've seen and had an opportunity to review the franchise documents. Q. I did a business plan for the franchise I would like to purchase. Should I have the franchisor "sign off" on it during my visit? A. Franchisors are impressed by a franchise candidate that takes the time and interest to write a business plan. You may not get them to "sign off" on it per se, however, its an excellent opportunity to obtain comments and feedback. All prospective franchisees should have a business plan, no matter how simple, and should share it with the franchisor before closing the transaction. Q. What does the franchisor look for during the corporate visit? A. There are several keys that most franchisors look for in the franchise candidate.
In my experience, a red flag was when a franchise candidate seemed primarily concerned about a franchisee work schedule and the number of hours most franchisees needed to work in order to have a successful franchise. After having made several of these presentations I offer the following observation to franchise candidates and franchisors: Despite the abundance of franchise information available on the Internet, in books and in various articles, most franchise candidates still depend upon the franchisor to be straightforward and honest during the sales process. " Quality questions create a quality life. Successful people ask better questions, and as a result they get better answers." Tony Robbins |
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Licensing versus Franchising by Robert Townsend, Attorney
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Utilizing licensing as a method for business expansion is an option many business owners consider.This article by Robert Townsend, an attorney from Brentwood, California, presents some of the options licensing provides and how licensing can be used as a first step to franchising. " Learning is an active process. We learn by doing... Only knowledge that is used sticks in your mind." Dale Carnegie |
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Generating Franchise Leads From Your Website
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Whenever I speak with clients about the most cost effective way to generate franchise leads I suggest a good way to begin is to use their own website. This position may not endear me to the many franchise advertising portals, however my first obligation is to my clients. A recent report from Franchise Benchmark supports this advice. Franchise Benchmark tracked lead generation from January 1st through May 31st and compared the data for 2005 and 2006. To be included in the data, a franchisor had to receive a minimum of 50 leads per month for a 12 month period. Lead sources were categorized as Franchise Portal or Franchisor Website. Although lead flow from the franchise advertising portals was down between 5-7%, the lead flow from franchisor corporate websites had increased more than 30%! The report states that the the dramatic increase in franchisor website leads is based upon two key factors: 1. Franchisors are making better use of Internet marketing techniques to generate website traffic 2. Increasingly, prospects see a brand on an advertising portal and go directly to the franchisor website to request information. The franchise advertising portals have done a great job building franchise awareness. Ultimately the true measure of success is the number of completed franchise sales. However, as this report reveals the Internet is a great source for generating leads! "If we become increasingly humble about how little we know, we may be more eager to search." John Templeton
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"In Search of Excellence" - Revisited after 25 years.
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A few weeks ago during a conversation with a young businessman I used the term "stick to your knitting" and cited the quote from "In Search of Excellence. " His response was "excuse me, but I hadn't heard of that book." I explained that the book was a famous business book written almost 25 years ago. It presented a study of US companies and how they came to achieve a high level of success. As I spoke, a thought passed my mind, there must be countless business people especially those much younger than I who had never heard of this book. It is a business classic, since it taught many of us why certain companies were successful while still others were mediocre. I recall how this book served as a blueprint for so many small and medium sized companies. How often one would see or read quotes from this book applied to a particular business situation. Tom Peters and Robert Waterman of McKinsey Consulting wrote "In Search of Excellence" in 1982. It represented a study of 40+ companies that they rated based upon a set of criteria. As a result of their study they determined that there were Eight keys to excellence, which were shared by each of these firms. The Keys To Excellence
If you haven't read "In Search of Excellence" or like me read it years ago I suggest you buy a copy. I loaned mine to someone so I'm going to buy a new one. Its available from Amazon. Almost forgot, you'll find some companies like GE still at the top while others are no longer in business or are struggling. Nevertheless, it doesn't change the premise of the book which is still valid today. "Leaders don't create followers, they create more leaders" --- "Underpromise; overdeliver" both by Tom Peters
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Ego Makes Entrepreneurs? Brian Wu
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Researcher Brian Wu says that entrepreneurs aren't unusually risk tolerant. Its "overconfidence in their ability" that allows them to take the leap. This is a very interesting article. "Checking the results of a decision against its expectations shows executives what their strenghts are, where they need to improve and where they lack knowledge or information." Peter Drucker |