Food Franchise

Posts Tagged ‘Restaurant Franchise’

This article is one of several articles that I have written specifically about this Marketing System. We have talked about the term: Funded Marketing Sponsoring System. We are going to go one step further and use the term: Funded Sponsoring Franchise System.

At this point after all these articles, why the change in terminology? Here’s the point. Most of you reading these articles are not new to internet marketing. You have a certain mental image if I use terms such as: marketing, internet marketing, sponsoring, home based business, online business promotion, lead generation and etc. If I say the term: Franchise, what is your mental image? Most people immediately think of McDonald’s, Wendy’s, Burger King, Taco Bell and etc. In this article, I hope to draw some parallels between Internet Marketing and the Franchise System. You also need to keep in mind that most marketing systems are not a Franchise System. You also need to be able to recognize the difference.

First we are going to discuss why a Franchise is important to our marketing pursuits. Then we are going to discuss the terminology of the Funded Sponsoring Franchise System. I like to think of a Franchise as a business in a box. (In the case of a Franchise, it is a very big box.) A Franchise is a complete business. As a Franchise owner for the typical franchise, you are purchasing a business that comes complete with a fully developed marketing plan, operation plan and training program. If, for example, you were to purchase a McDonald’s Restaurant, do you think you would fail if you followed their training program? Do you think your Restaurant is in the best location because of their research work? Unless you go out of your way, it is hardly unlikely you will fail with a McDonald’s Restaurant Franchise. (We will get back to this point later.)

Are there internet marketing franchise systems available online today? Of course there are and there are several of them. But, NOT ALL SYSTEMS ARE CREATED EQUAL! There are marketing systems and there are Franchise marketing systems. Some of the marketing systems are no more than a listing of internet marketing resources. With these systems, it is up to you to EXPERIMENT (with your money) and find out what works and what does not. The problem with this is that you might throw away a perfectly good resource saying it does not work but you missed a critical step when setting it up.

A Franchise Marketing System will not only provide you with internet marketing resources but will also show you how to use them. With a Franchise Marketing System, you should expect a detailed plan on how to market your business. This plan should include resources that have a track record for producing results and instructions on how to best utilize these tools. You can expect to pay a monthly cost for the use of this Franchise Marketing System. (I know of only one that does not charge you for the system.)

If you take internet marketing and divide it into stages, you would have the following 3 stages.
1.General Internet Marketing
2.Internet Marketing Systems
3.Franchise Marketing System

We are going to give you one more stage but it actually is part of stage 3. This is the Funded Sponsoring Franchise System. Before we get to this, I want you to understand what these stages represent.

GENERAL INTERNET MARKETING- You will run across this when you sign up with most companies. They will brag about all the marketing tools and resources they have in their backroom for you to be successful marketing your business. (Most home business owners believe this and this is why they fail. Tools and resources alone are not enough.)

INTERNET MARKETING SYSTEMS- You will see a lot of these marketing systems coming at you through emails from you upline sponsor when you sign up in their business. They will send you all the tools they use (that they have signed up at the Pro level) so you can sign up under them and do the same when you sign up your recruits. Since you never learned how to bring recruits into your business, you basically spend too much money then leave the business trying to find one that works!

FRANCHISE MARKETING SYSTEM- Often, you will see a Franchise Marketing System coming from some of the top marketers that are using not only the tools and resources but they also know you need training and support to make it work. (This is really getting close to where we want to be.)

FUNDED SPONSORING FRANCHISE SYSTEM- We went all the way around the block to get here but we finally made it. Sometimes it is important to see what we don’t want before we can recognize what we do want. Marketing in general WILL COST YOU MONEY! There should be no surprise in that statement. Yes there are FREE MARKETING tools online that you can use but to be successful, you will spend some money on advertising. Here is the twist. When we talk about a FUNDED SPONSORING FRANCHISE SYSTEM, we are talking about covering the costs of your advertising dollars and Funding your advertising costs.

Remember, I said I would get back to this: Unless you go out of your way, it is hardly unlikely you will fail with a McDonald’s Restaurant Franchise. With the right system, you will succeed if and when you decide to succeed. I say that because it is just like owning a restaurant or hotel franchise and closing for weekends. Many of us have multi-million dollar businesses that we have sat on because it only cost a few hundred dollars to own our home business. If we bought a Franchise like a Subway Sandwich Shop, would we market for it if we felt like it this week or abandon the Franchise Marketing Plan.

At some point, we will have to talk about the cost of your Funded Sponsoring Franchise System. You will see how this is the most cost effective way to market online. Right now, just to wrap up, I want to leave you with some background information that I shared in one of the first articles in this series related to Funded Proposals.

I was first introduced to this concept many years ago but unfortunately, I did not see how it would fit into a Network Marketing concept. Two of the top internet marketer I had spoken with at various times about how they covered their costs of advertising with this concept. They were using the internet for direct selling and I really did not see how to use this concept for Network Marketing because of this. What they would do is sell a product for $8- $10 but not more than $20. This would generally be an information product that they could deliver over the internet after the purchase is completed. The product would have to have a broad appeal. They would use their marketing resources to advertising this product sometimes costing them thousands of dollars in advertising. (They also knew their resources well! Hint! ! ! ) The entire cost of their advertising was covered by the sales that resulted from this campaign.

Now, pay close attention and you will be quizzed later.

If I told you nothing more, you would think these guys were nuts! They would spend thousands of dollars just to break even! NO, they received very, very, very targeted leads and covered their cost of obtaining them! Now these customers have a relationship with them and they are SATISFIED CUSTOMERS! (HINT!) Now the marketer knows what their customers want and they have virtually no cost selling to them. And what about the SATISFIED CUSTOMERS that the Marketing Gurus continued to sell to.

Multi-unit and multi-concept franchising both provide opportunities for fast, efficient growth. Franchising is an obvious consideration for individuals who naturally have that entrepreneurial spirit. You might be wondering what is means to have an entrepreneurial spirit.

Are you self-motivated? Do you dream of building a business with your two hands? Do you struggle as an employee, constantly feeling like you could improve the company if someone would hand over the reins? If one or more of these questions provokes an affirmative answer, you are an entrepreneur who is ready to find a track into the business world, possibly with a business franchise.

Most importantly, you do not need a college degree or years of experience to take advantage of this increasingly emergent business prospect. And, with the right information, you can successfully operate more than one franchise business.

What is Multi-Unit and Multi-Concept franchising?

Multi-unit franchising occurs when a franchisee operates multiple stores from one franchisor within a specific area. This type of franchising is popular, for instance, in the food industry. Entrepreneurs seeking a restaurant franchise will find a bounty of options. Similarly, multi-concept franchising involves more than one brand and works best if the concepts are related. For example, children’s hair care and family portrait studios are two concepts related enough to create synergy for each another.

Challenges of Multi-Unit and Multi-Concept franchises

As with any rewarding investment, there are a few challenges to take into account when considering a multi-unit or multi-concept franchise. First and foremost, choosing a good location is vital. Consider the surrounding area of a potential outlet. Going back to the restaurant franchise example, you might ask, are there plenty of retail businesses nearby? Obviously, an eatery would do well if located near a shopping center or strip mall where guests may be inclined to take a food break.

Another challenge common to first-time franchisers is micromanaging. Certainly, you have a vested interest in how each store functions but much of the responsibility should be placed on an infrastructure of managers you hire.

These individuals are responsible for the everyday operations of their stores and should be trusted to run these businesses as you would if you were working there each day. Hire managers to serve as an extension of you. They should believe in the franchise, working toward its success and most importantly, its growth. This is where you meet the first advantage of a multi-unit franchise business. If managers see the potential for growth, they consider themselves as being on a career path. The benefit for you here is that you are much more likely to have a dedicated management team for the long term.

Also, allowing each manager to assume responsibility of store operations allows him/her to put personal touches on that particular location. This gives the store the “feel” of a small business franchise, something most customers appreciate.

Of course, staffing is always problematic, but you can improve it by treating your managers and their staff members well. Again, growth potential encourages employees to stay with your franchise because they see a career path. They are also far less likely to seek employment elsewhere if they feel that their services are valued and their opinions respected. Many multi-unit and multi-concept franchisees meet with their managers regularly. Some even set up voluntary focus groups for subordinate employees to give them a chance to express any concerns.

Advantages of Multi-Unit and Multi-Concept franchise businesses

With the challenges come advantages that make multi-unit and multi-concept franchising worthwhile. One key advantage is that the risk is absorbed by several units or brands. With multiple stores, you do not have all your eggs in one basket, so to speak.

For example, if a local government suddenly plans road construction near one of your stores, sales will inevitably dip. Fortunately, your remaining outlets will not suffer. In fact, some of the business may simply be diverted to one of your other locations. Moreover, with a multi-concept franchise, you can spread the risk over several brands. If you operate a realty franchise, for instance, and the housing market experiences a low, it is unlikely that all stores and all brands will experience down time in the same period.

Furthermore, you will have access to more cash flow. Many multi-unit franchisees, for example, use the cash flow from other units to expand with additional units. And, the financial benefits do not stop there. You also have the option of reducing overhead costs by spreading them over several outlets, also gaining economies of scale.

In short, with multi-unit and multi-concept franchising, more capital becomes available. Meanwhile, franchisees running a single-unit are immersed in the details of managing a small business franchise.

Additionally, multi-unit franchises provide efficiency because of their potential for shared labor. Many employees are willing to take shifts at other locations, if needed; thus, the costs of hiring and training new personnel decrease. You also save money in other areas such as internal warehousing, distribution and advertising costs. If you operate a multi-concept franchise, you are far more likely to acquire special location and lease considerations from landlords. Most landlords prefer to work with multi-concept franchisees because they can subdivide larger areas. Your benefit is that they provide accommodation for all of your brands.

Building an Infrastructure for your franchise

First, consider any skills you may have. As mentioned, the most important attribute of a successful franchisee is an entrepreneurial spirit. However, if you have a degree in accounting, you may want to consider what you have to offer as you plan the infrastructure.

When planning your infrastructure, which should be designed to umbrella all units and brands, it is important to bear in mind how many staff members you will need to launch verses the number you will need to grow.

Starting with a large infrastructure will help the launch go much more smoothly. Otherwise, you may end up with a few people scrambling to meet the demands of a new business franchise.

However, there are significant downfalls to this method. For instance, having too many people in your infrastructure can lead to a breakdown of communication. Also, once all units and brands are up and running, you may find the costs of maintaining a large infrastructure to be too high and cutting back on personnel can reduce morale among remaining employees. Of course, the best way to solve this dilemma is to carefully plan and build the infrastructure slowly.

Choosing the best franchise opportunities

It is important to remember that there are many franchises for sale in today’s marketplace. Still, not all franchisors are equipped to support multiple units. This does not necessarily mean the franchisor is unsuccessful. Instead, it may simply mean that there is limited demand for a particular brand in your area. Or, the structure of the store might simply be geared toward a single-unit franchisee. This explains why it is always best to thoroughly research a franchisor before any agreements are made.

If you are considering a multi-concept franchise business, remember to carefully review the franchise agreements. Make sure your definition of a competing business matches that of each of your franchisors.

Most importantly, keep in mind that there are plenty of opportunities at your disposal. It is imperative that you research each prospect before investing your valuable time and money.

In today’s rapidly changing economy, college graduates realize that embarking on a steady career that will last many years with one company is a reality of the past. More likely than not, college graduates will change jobs multiple times over the course of their professional lives, and job security will be something they only dream of. As a result, more and more young men and women entering the workforce are exploring options outside of the traditional “9-5” job. For the entrepreneurial thinker, buying a franchise will rank high on this list of possibilities. Yet, despite the inarguable success of numerous franchises and countless franchise owners across the country and around the world, is venturing into the franchise business the right choice for a recent college graduate?

Persuasive cases exist on both sides of the issue, and in order for each individual to make the best personal decision on whether to pursue a franchise opportunity, he or she should take time to evaluate several factors involved in franchise business opportunities. The following are several pros and cons of making the college-to-franchise transition.

The Pros

1) No Experience… No Problem

Because franchises succeed based on a proven system of operation, capitalizing on franchise opportunities requires little to no previous experience. Rather, established franchises provide the tools necessary to make your business profitable, including training manuals, marketing and PR, and full support for your endeavor. Consider, for example, any popular restaurant franchise. The franchise owner does not need to spend time or energy on advertising and marketing, as the parent corporation ensures the development and implementation of marketing strategies. In the same way, the franchise owner does not need to research best business practices to determine how to operate his or her particular store. He or she needs only to follow the tried and true pattern of operation that is already in place.

2) Early Independence with Less Risk

Few things are more gratifying than building a business in which you work for yourself and are able to see and keep the fruits of your labor. With interest in entrepreneurship increasingly on the rise, more and more young professionals are looking for ways to generate an income and create a lifestyle while working for themselves. Because of the systems of success already in place with franchise business opportunities, young entrepreneurs can minimize business start-up risks while maximizing their potential for success.

3) Organizational Support

Today’s young business owners are not alone in navigating the at-times-rough waters of entrepreneurship. Organizations such as the Small Business Administration in the United States (http://www.sba.gov/smallbusinessplanner/index.html) and the Young Entrepreneurs Association in Canada (http://www.yea.ca) provide useful information, tools, and resources to help business owners on the path to success.

As positive as the pros are, however, as with any decision, it is equally important to weigh the cons. When determining whether a business franchise is right for you, consider the following.

The Cons

1) Leadership Skills

As a recent college graduate, you may have extensive by-the-book business knowledge and be able to foresee assets and liabilities without a blink of the eye. But many franchise opportunities also require the ability to lead a staff of people. It is important to ask yourself if you know the principles of hiring and firing, and if you are comfortable managing people even if difficult and stressful situations. Some experts recommend that before you step into the role of employer, you might benefit from first spending some time as an employee, particularly in the franchise industry which you are planning to pursue.

2) Financial Capabilities

Even when it pays off in the long run, up-front franchise financing can be a costly endeavor, and it is not uncommon for franchises to take at least a year or longer to break even. In fact, it is uncommon for them not to. Do you have the resources to fund your franchise venture while still being able to provide for your basic needs such as food and shelter? And, are you willing to stick with your franchise even through any early difficult days and see it through to the profitable days ahead?

3) Industry Interest

As with any business endeavor, to become successful in a franchise business opportunity, you must be committed to persevering for the long haul. Have you done enough research to ensure as much as possible that the franchise you have chosen is one that you will be able to enthusiastically devote yourself to for several years to come? Are you letting your passion dictate the franchise you choose, or are franchise opportunities dictating your passion? To be successful, be sure that it is the former and never the latter.

The franchising market is strong and growing larger by the day. From 2004 to 2005 along, there was an 11% increase in the number of franchise units! Given the incredible growth of this industry, it is natural that it will remain a serious consideration for any young college graduates seeking to reap the benefits of free enterprise. And with the many types of business available, franchise opportunities offer numerous industries to fit with individual interests and talents. Honestly considering the above pros and cons will help you in your decision on whether starting a franchise business straight out of college is right for you.

More and more, those who have a desire to open a business of their own are finding that opening a restaurant franchise is very profitable. It is predicted that restaurant sales will reach $577 billion in sales by 2010. The restaurant business industry now employs 8% of all workers employed in the United States. That comes to about 11 million people, and makes them the largest employer next to the government.

Restaurants have been satisfying the hunger of people for ages, and restaurant franchising is around to add to the growth of the industry. In 1950, Colonel Harlan Sanders introduced his Kentucky Fried Chicken franchise and built a chain of over 600 restaurants by 1960. McDonalds was franchised in 1955, and so were House of Pancakes, Tastee Freeze, Dairy Queen, and Dunkin Donuts.

Baby boomers (people born between 1946 and 1964) are often the folks opening new restaurants and fast food establishments. They have sophisticated tastes and the money to make their ideas a reality. They demand fresher ingredients, healthier dishes, and vegetarian options. Baby boomers are credited with setting the pace for what does and doesn’t work when it comes to successful restaurants. When they dine out they want high quality, no matter where they are eating.

More and more people are holding full time jobs, leaving little time to prepare meals at home. Quick serve restaurants continue to be fueled by the consumer’s ever increasing need for convenience. More than half of all adults say they are busy, and convenience is a critical part of their lives.

While older consumers demand quality, younger customers want convenience. 55% of consumers between the ages of 25 and 34 admit they are usually in a hurry and want fast service. This sparks the growing need for quick service restaurants. Takeout restaurants are also a growing trend. 78% of all households in the United States use take out or delivery service at least once a month. These people consider themselves very value conscious.

Many investors are buying into co-branded franchises. Co-branding refers to franchising two or more different brands in one location (Taco Bell, Pizza Hut, & Kentucky Fried Chicken). All three are housed in one building, instead of building three different restaurants. These restaurants are responsible for more than 29,000 restaurants, and more are popping up all the time. There are also multiple franchising concepts with Dunkin Donuts and Baskin Robbins in the same building.

Some franchisors take their products overseas. Subway has nearly 800 international franchises (not counting Canada). If you add Canada they number around 2,000. The size of the company has helped with their popularity in other countries.

Whether you are selling sandwiches across the sea, or have an upscale dining establishment uptown. The outlook looks strong for food franchising in the next ten years. As long as consumers continue to eat at restaurants, the franchise opportunity will be a gainful one.