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Information and Advice That Matters
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In This Issue
-- Look Both Ways Before Franchising Your Business
-- Franchise Advertising Portal Comparison
-- "Good to Great: Why Some Companies Make the Leap " A Classic
Revisited
-- Interview With Tom O'Rourke- Trademark Attorney
-- West Coast Franchise Expo- Complimentary Tickets
Dear Ed, This issue includes: an interview with Tom O'Rourke, Trademark attorney, advice on franchising your company and interesting franchise advertising stats. Ed Teixeira, Publisher - Carol Moccia, Editor |
Look Both Ways Before Franchising Your Business
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Frequently, I receive telephone calls and e-mails from existing business owners who are considering franchising their business. Some of these individuals are determined to do the majority of the franchising work themselves, whether due to a lack of capital or an unwillingness to spend money. Some have even gone so far as to try and write their own franchise agreement. Although I applaud their enthusiasm and self- confidence, I must admit that this approach will lead to problems. First, franchising consists of a contractual relationship between the franchisor and franchisee utilizing a number of complex documents, including the franchise agreement and disclosure document. The content and use of these documents must conform to regulations of the Federal Trade Commission and particular State Agencies. Second, failure to comply with Federal and State regulations can result in substantial fines or worse. Third, having all of the franchise tools in place including, appropriate terms of the franchise agreement, the operations manual, marketing materials, website, franchise sales processes and understanding how to deal with requests to negotiate the franchise agreement, takes expertise and experience. Finally, launching a new franchise program is more than having the right tools. It involves knowing how to use these tools. I often tell clients it’s akin to giving someone the tools to build a house when they don’t know how to use the tools. For example, knowing the most effective way to generate franchise leads and sell new franchises requires competency and coaching. Another situation that arises is when a business owner has their franchise documents constructed by a competent franchise attorney and then they decide to do the rest of the work themselves. These are the franchisors that have trouble selling a franchise and they can’t figure out why. In many cases they advertise on various Internet sites or in print media. They often receive a good amount of leads but “can’t get past first base.” Although the Internet represents one of the greatest technological achievements in history its access to information sometimes makes us believe that we have all the answers. From diagnosing a medical condition "on line" to learning about franchising a business, we may think we have all of the information we need. Its important to establish a knowledge base but to act solely upon this information can be a mistake, if we don’t have all the right information and the correct tools to complete the process. I’ve had business owners tell me that they wanted to franchise their business but weren’t quite ready because they didn’t have sufficient capital. These individuals should be commended for making a thoughtful decision regarding their lack of capital. I’ve spent time with some of them explaining the important steps for successfully franchising their business. This has enabled them to understand what steps are needed to be completed, the approximate cost and how to set a realistic strategy for the future. Establishing a franchise program the right way takes time, effort and capital. There is a great deal of unanimity among franchise experts that the cost to franchise a business can range from $50-$75,000 and this doesn’t include advertising, new staff and other expenses. My Advice: Look for the right amount of capital to franchise the business correctly. Look for the proper advice and guidance even if you want to do some of the work yourself. If you can’t do either don’t cross the street to franchising until you’re ready, otherwise you could end up in trouble. Response to Debbi Fields' idea of Mrs. Fields' Cookies: "Market research reports say America likes crispy cookies, not soft and chewy cookies like you make." |
Franchise Advertising Portal Comparison
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The August "Franchise Benchmark" survey reported on the top 20 franchise advertising portals. The results are categorized by Domestic US Leads and International Leads. Each tier is listed in alphabetical order because of statistically insignificant variances within each bracket. The Top 5 US Portals were:
To read the entire report click below. " Many attempts to communicate are nullified by saying too much. " Robert Greenleaf, ATT |
| "Good to Great: Why Some Companies Make the Leap " A Classic
Revisited
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In 2001, Good to Great was written by Jim Collins. The book reveals the results of an intensive analysis of 1,435 companies. The analysis looked for companies that made substantial and measurable progress over a significant period of time. The result was that only 11 companies fulfilled the specific requirements of the analysis. The next step was to find the common traits that these 11 companies shared. Today over 5 years later this book ranks #14 on Amazon! The fundamental conclusion of the book was that going from good to great " Doesn't require a high profile CEO, the latest technology, innovative change management or even a fine tuned business strategy. At the heart of those rare and truly great companies was a corporate culture that rigorously found and promoted disciplined people to think and act in a disciplined manner." One of the more interesting attributes of the CEO's of the "Great Companies" was their "self- effacing,quiet,reserved, even shy personalities- a paradoxical blend of personal humility and professional will." Consider this description of the leaders: " We expected that the good-to-great leaders would begin by setting a new vision and strategy. We found instead that they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats-and then they figured out where to drive it. The old adage "People are your most important asset" turns out to be wrong. People are not your most important asset. The right people are." A truly great book about what makes great companies. If you already have this book dust off your copy and read it again. If you haven't read it, invest in a copy. You won't be disappointed. " If you don't do it excellently, don't do it at all. Because if its not excellent, it won't be profitable or fun, and if you're not in business for fun or profit, what the hell are you doing there? " Robert Townsend |
| Interview With Tom O'Rourke- Trademark Attorney
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Tom O'Rourke is a principal of Bodner and O'Rourke, an Intellectual Property Law Firm. Tom has over 30 years experience in the area of trademark, patent and copyright law. He has conducted his work in both the United States and overseas. FKH- We often hear the terms trademark, service mark and copyright tossed about. For the layperson can you provide a simple distinction among these terms? T.O.- A Trademark relates to goods and services and the specific name for the product. It’s a badge of recognition and can include the name, a color, such as Owens Corning Pink, a sound such as the NBC chimes or a shape like the Coca Cola bottle. A service mark is a trademark whereby the goods are actual services such as in the case of a bank, consultant or accounting firm. Over the years the distinction between the two terms have been eroded, where the term trademark is used to represent both products and services. A copyright represents something of artistic creativity such as music, books or even a fancy trademark. The Poland Spring bottle with its scenic background could be copyrighted FKH- It’s been my experience that most small business owners don’t register their trademark and logo. Can you provide some guidelines that business owners should consider in making this decision? Also what if they wish to franchise? T.O.- Since trademark rights come from usage, a small business owner operating in a geographic area has certain ownership rights to their trademark in their operating area. Unless a business owner intends to expand beyond it's immediate market it’s usually not necessary that they register their trademark. As regards franchising, practically speaking, you can’t franchise without a federal registration. It’s important to have a search done to determine if others are using the same name. Unless the name is unique the odds are someone else is using that name, although it may be in a small geographic area. Without trademark protection a franchisor and its franchisees would have no protection. FKH- What are the approximate costs to register a trademark and how long does it take? T.O.- To file in the US including a full search, the costs can range from $750 -$2,000. Worldwide searches and filings can run from $1,500-$6,000. These costs don’t include unusual actions pertaining to the filing, which can arise. These actions often require additional legal work. It can take 2 years or longer to receive a trademark registration. FKH- Have you found conflicts pertaining to a domain name and trademark rights? T.O.- Since trademarks are territorial there have been instances whereby a foreign firm has a domain name and decides to register its trademark in the US only to find out that someone else already has the registration. FKH- There are some firms that enable a person to file a trademark via the Internet. These sites claim to be fairly inexpensive. Please comment regarding using these sites? T.O.- Its not difficult to file for a trademark registration, the problem arises with rejections or actions by the Examiner. Responding to requests by the Examiner requires experience and knowledge. Also, unless a common law search is conducted the Federal search may be incomplete and fail to identify smaller companies that fall under the radar. T.O.- By the way, when selling a manufactured product or unique business method, you can utilize a patent or trade secret registration for protection.Trade secrets are good for formulas, chemicals and similar items.The best example would be the Coca-Cola formula. The application for registering a patent or trade secret is complex and must be thorough. FKH- Can you explain a copyright and when a business could obtain one? T.O.- Actual text or pictures can be copyrighted. It may be possible to get a trademark protected including a theme. An example would be the look of a McDonalds. Up until 1988 you couldn't use the copyright symbol unless you had a registration.Now its possible to put the copyright symbol © on creative works such as manuals, business materials or articles. However, be advised that without an actual copyright registration its difficult to protect your rights. Tom, thanks for providing some clarity to a complex subject. Contact info follows:
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| West Coast Franchise Expo- Complimentary Tickets
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The West Coast Franchise Expo, sponsored by the IFA serves the rapidly growing West Coast marketplace. It provides the perfect opportunity for over 200 franchise concepts, representing every industry and virtually every investment level, to meet face-to-face with the region’s most qualified prospective franchisees. Visit WCFE, compliments of FranchiseKnowHow, just click below. |
The West Coast Franchise Expo will be held from November 3rd-5th at
the LA Convention Center.