Author Archives: Thomas

Learn the ABC’s of Franchising

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When we were young we all learned our ABCs; each letter became a building block. If you’re just starting out, here are 26 different ways to learn your franchising ABCs.

 

 

A is for Automotive— There are over 250 million registered passenger vehicles in the U.S. As such, it’s no wonder that automotive franchises are such lucrative opportunities. From car washes franchises to mobile detailing businesses, the list of available automotive franchise concepts is long and diverse.

B is for Blue Mau Mau — If you’re looking for the best original and curated content, press releases and articles on franchising, business opportunities and small businesses, Blue Mau Mau is the place to go.

 

C is for Crowdfunding — Funding remains a challenge for all entrepreneurs, not just those who are hoping to open a franchise. New legislation is sure to help crowdfunding’s popularity as a way to raise capital.

 

D is for Discovery Day — One of the most important days for a potential franchisee is discovery day. While each concept’s discovery day is a bit different, it normally includes a visit to the franchise’s headquarters, a sit down with the development team and often a meeting with the franchisor. Often, the franchise discovery day is the last stop before you sign on the dotted line and become a franchisee.

E is for Entrepreneur — Entrepreneur magazine has long celebrated franchising with its “Franchise 500”, their annual ranking of the industry’s top franchise concepts. The magazine also features a franchising section and often covers topics pertaining to the industry on its website.

 

F is for FDD — The franchise disclosure document (FDD) sounds just like what it is: a legal document that discloses the major facts and figures that make up each particular franchise concept to a prospective buyer. The FDD is intended to provide potential franchisees with enough detailed information to make educated decisions about a possible franchise investment.

G is for Growth — Growth despite economic challenges and uncertainty has become a hallmark of the franchise industry. Despite the woes experienced by many during the Great Recession, the franchise industry recovered well. The IFA expects the number of franchise establishments to grow by 1.4 percent in 2013.

 

H is for Healthcare — As the Affordable Care Act became law in 2012, the franchise industry took to the podium to speak out against the potential damages of the healthcare overhaul on small businesses. Many franchisors, including Papa John’s CEO, John Schnatter and Catherine Monson of FASTSIGNS have spoken out against President Obama’s healthcare reforms.

 

I is for IFA — The International Franchise Association (IFA) is the world’s largest and oldest organization representing franchising worldwide. It acts in the best interest of the franchising industry to promote, protect and enhance the franchise industry through policy, PR, and education.

 

J is for Jobs— No, not Steve Jobs, although we’re sure he’d appreciate the economic fortitude that is the franchising industry. According to the IFA, The franchising community provides nearly 18 million jobs!

K is for King — Joel Libava, aka “The Franchise King”, writes a phenomenal blog on all aspects of the franchising industry. His posts range from evaluations of franchising concepts, helping potential franchisees and issues the industry faces.

 

L is for Las Vegas — This year, the annual IFA Convention will be held in Las Vegas. The IFA’s annual convention allows for all members of the franchising community to congregate and connect. This year, Franchise Buy’s CEO David Schwarz will attend with his key managers as an “Entrepreneur of the Year” award nominee.

 

M is for Military — Military veterans have been welcomed profusely to franchising by franchisors and the IFA alike. The push to hire military veterans has been facilitated by websites like Veterans Franchise.com, VetFran and crowd funding platforms like Boost a Hero.

N is for Nation’s Restaurant News — This magazine delivers breaking news about the $600 billion food industry, including franchises. Since 1967, NRN has been covering trends, operators, suppliers and major figures in all areas of the food service industry.

 

O is for Operations — As a franchisee, a large part of your day deals with the day-to-day operations that make a franchise unit run smoothly. Luckily, those with varying degrees of business experience can count on their franchisor counterparts to lead the way. After all, one of the best parts about franchising is the proven track record and support provided to each franchisee by its franchisor.

 

P is for Portal — As the franchise industry picks up speed, leaving the Great Recession behind, portals have become an invaluable source of leads. Some, like Franchise Clique, Franchise Buy and Veterans Franchise, have begun call-verifying leads as franchise sales and development teams field an increasing number of inquiries.

 

Q is for Quick-Casual — If you didn’t catch our recent post on food costs and the franchising industry, you missed out on a short and sweet explanation of how food franchises continue to grow despite rising food, oil and transportation costs. The real winner in the food franchise category? Quick-casual restaurants, which are predicted to grow 1.7 percent in 2013, the third largest growth percentage according to the IFA. Also, quick-casual restaurant franchises make up two-thirds of all food related franchise establishments.

 

R is for Restaurants — When you think of franchising the golden arches and drive-thrus probably spring to mind first. It’s no wonder, considering food franchise establishments comprise 33 percent of all franchise establishments.

S is for Steve Caldeira — Stephen J. Caldeira is the President & CEO of the International Franchise Association. As the President and CEO, Caldeira works with the IFA’s board to set the course for the organization’s strategic priorities: policy, research, education, PR, and various development programs. Mr. Caldeira has 30 years of government relations, political communications, fundraising and professional development experience. Prior to his current position, Caldeira served as the Executive Vice President of Global Communications & Chief Public Affairs Officer for Dunkin’ Brands, Inc.

 

T is for Trillion — Yes, that’s trillion with a “T”! The franchise community represents $2.1 trillion of economic output just for the U.S. economy.

 

U is for Understanding — Let’s talk it out. No, really. When you’re deciding which franchise to buy, it’s important to do your research, ask questions and find out all you can about the concepts that interest you before taking the next steps. A franchise is a long-term business investment

 

V is for Vision — If the franchising industry were a word it would be “expansion.” Beyond the U.S. and Canada lies opportunity– and the franchise industry knows it. More and more brands are expanding their vision to Africa, Asia, Australia, South America, Europe and the Middle East.

 

W is for Work — Despite the autonomy inherent in becoming a franchisee, there’s also a lot of hard work. Ask any small business owner and they’ll tell you how much they wish there were more than 24 hours in a day.

 

X is for Xenophile — Now that’s an SAT word! As far as we’re concerned, one of the very best things about the franchise industry is its acceptance of other cultures. Whether it’s a franchisee expanding outside of the U.S. or the birth of a new food franchise celebrating a cuisine that’s not quite mainstream yet, the franchise industry makes a point to bring “new” and “different” to the masses.

 

Y is for Yogurt — How many frozen yogurt businesses can you count driving through your city or town? The frozen yogurt craze, which hasn’t cooled yet, has been going strong for years. Though it’s not the oldest type of franchise concept in the industry, it’s certainly one that’s made other consider franchising as a viable means of making a living.

 

Z is for Zany— As of late,new franchise concepts have gotten creative and outright zany! Nail art vending machines, make your own sushi franchises and dog walkers have become incredibly popular. What could be next?

How Do Food Franchises Keep Growing Despite Economic Challenges?

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It’s no secret that food franchises are often the most searched for and requested on franchise directories and portals. It’s what we all think of when someone says “franchising.” But, is the most popular kind of franchising really doing well?

 

Why do I ask? Well, maybe you heard of this little thing called “The Great Recession” and, in its wake, the tightening of our collective belts. How have food franchises fared? Has development for food franchises slowed? If not, how is that possible when food costs have risen and disposable income has decreased for most families?

 

Fast-Casual Food Franchises Are On the Rise

 

Research suggests that fast-casual franchise restaurants, which are a subset of quick-service restaurants, rank as one of the five best franchises to open due to high demand. Presumably as a result of the Great Recession, consumers are concerned with maximizing their time and money when it comes to eating out. Eating establishments that are less expensive but still allow consumers the ability to escape the kitchen and feel as though they’re treating themselves.

 

The number of quick-service restaurants are expected to grow 1.7% in 2013, the third largest growth percentage according to the International Franchise Association.

 

The Franchising is On the Rise– How? Why?

 

A recent study by the IFA shows that the number of franchise establishments increased by 1.5% last year.

 

Why? How? Simply, the economy is why and how.

 

Unemployment and underemployment (taking lower pay and lower-level jobs) are still unfortunate realities for the U.S.’ economy. As such, more Americans are mindful of their spending. Dinners at high end dining establishments have become increasingly rare. In addition, many individuals and families are working multiple jobs or longer hours resulting in a need for fast, inexpensive meal options– especially if you’re traveling between places of employment. This increased demand for quick-casual and quick-service establishments (think Five Guys and Burger King respectively) has permitted the franchise industry a growth coveted by many other economic sectors.

 

Exiled corporate executives and those who lost a substantial portion of their savings due to the Great Recession face the unfortunate reality of a shortened or no retirement at all. In order to earn a living, many entrepreneurs have chosen franchises as a means of business because of each concept’s proven track record.

 

What’s Behind Rising Food Costs?

 

Despite a reputation for quick and inexpensive meals, franchises are facing rising food costs because of four important reasons: increased fuel and transportation costs, reduction of food availability, and a continuation of economic circumstances that created 2011’s food price inflation.

 

  • The U.S. government’s subsidization of corn for bio-fuels has removed substantial amounts of the grain from the food supply, increasing overall prices.
  • The World Trade Organization limits the amount of stockpiling the U.S. and the European Union may do of corn and wheat in case of extenuating weather circumstances. As such, the price of corn and wheat remains volatile. (Note: wheat prices in 2011 more than doubled.)
  • As more of the global population becomes affluent, the demand for meat increases. In accordance with this demand, the need for animal feed– primarily grains– increases driving up the cost of both items.
  • The increase in oil prices means high food prices, as much of our food isn’t grown locally but shipped across oceans and nations.

 

Franchises That Are Making a Difference

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The franchise industry has a bad reputation as an industry that force feeds processed foods to the masses and cons its franchisees into paying high franchise fees.

 

But, there’s more to franchising than just French fries and lawsuits.

 

Concepts do exist that make a difference in the lives of customers, communities and franchisees. Some concepts help people change their lives for the better, others offer healthy alternatives to junk food and then there are those that are encouraging positive social change in the business world. Here is our list of favorite franchises that are making a difference:

 

[highlight]Healthy Vending Machine Concepts[/highlight]

Usually, it’s not our three main meals of the day that are our unhealthiest, it’s our snacks. Healthy vending machines remind me of the saying, “Don’t hate the player, hate the game.” By stocking conveniently located vending machines with better, more nutritious options, these vending machine franchises are reinventing our definition of convenience foods.

  • Naturals 2 Go
  • Health You Vending
  • Fresh Healthy Vending

 

[highlight]Personal Fitness Franchises[/highlight]

Just watch one episode of “The Biggest Loser” and you’ll understand America’s fascination–and need– for businesses that empower others to get in shape, lose weight and be healthy. These fitness franchises give their customers and franchisees the power to change lives for the better.

 

[highlight]Socially and Environmentally Conscious[/highlight]

Almost 70 percent of adults are more likely to visit a restaurant that offers food grown or raised in an organic or environmentally-friendly way.  Over 40 percent of Americans say they’ve purchased an item solely because of its association with a social or environmental cause. If you think being a socially and/or environmentally conscientious business isn’t important, think again. These franchises have their minds set right.

 

[highlight] Charitable Giving[/highlight]

A full 83 percent of consumers want more products, services and retailers to benefit worthy causes. Some make financial donations while others give their time. Even still, some are known to provide meals for those in need.

 

 

Why Owning a Franchise Needs to Be One of Your New Year’s Resolutions

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You made it! The Mayans were wrong, your family didn’t drive you completely crazy during Christmas and civilization endures. But, there’s another hurtle left to jump: your list of resolutions for 2013. As the number of remaining days in 2012 shrinks, it’s time for you to consider your future…

 

Will 2013 be the year you (finally) learn to love kale and embrace the treadmill? Is this the year you start– and finish– all of those DIY projects? A year from now, as you reflect upon the past 12 months, will you pat yourself on the back because you did what you finally promised yourself you would do: start your own business and become your own boss?

 

Or, will you let 2013 be a carbon copy of 2012?

 

(The correct answer is no.)

 

If you plan on making 2013 your best year yet (and one of financial independence) owning your own business needs to top your list of new year’s resolutions, and here’s why:

  1. THE FISCAL CLIFF: Despite what you’ve heard or read, the majority of small business owners aren’t so doom and gloom about the fiscal cliff/slope/precipice as you might think. As the backbone of our nation’s capitalist society, small business owners know and live the value of progress and forward movement. They’re unafraid of putting their shoulder to the wheel and know that no matter what happens, they’ll make it work.
  2. FUNDING: Traditional SBA-backed loans remain a touch-and-go source of funding for small businesses. Some find traditional lending to be the best and easiest way to raise capital. For others, banks are unwilling to loan for whatever reason.  As a whole, banks say they’d like to make more loans but it seems that many have upped their standards due to regulatory pressure. Regardless, securing a loan is definitely possible. 
  3. YOU’RE A VETERAN If you’re a military veteran you are in high demand– especially in the franchise industry.  Many franchises are so pro-veteran they’re only recruiting veterans to become franchisees, like J Dog Junk Removal. Often, veterans are offered significantly discounted franchise fees, financial incentives and mentorship opportunities “regular” franchisees don’t receive. As an added bonus, Sprigster’s “Boost a Hero” program is specifically designed to help veterans and their spouses become franchise and small business owners through crowd-funding.
  4. YOU’RE A FORMER CORPORATE EXECUTIVE OR SMALL BUSINESS OWNER: Exiled or retired corporate executives and former small business owners make excellent franchisees. Franchisors are always keen to recruit those with business experience, especially those with an entrepreneurial spirit and previous management training.
  5. PREDICTIONS FOR 2013: Again, despite what you may have heard, the franchise industry is yet again poised for growth unseen by most other industries since 2008. The number of franchise establishments is expected to increase by 1.4 percent in 2013, from 746,828 to 757,055 with the number of jobs increasing 2 percent, reaching 8.262 million, according to a study by the IFA’s Educational Foundation. In addition, the same report also projects the gross domestic product of the franchise sector to increase 4.1 percent in 2013 to $472 billion.

Still not convinced? Consider all of the franchise opportunities available in your area, your preferred industry or investment level at Franchise Buy.com.

What’s For Dinner? Menu Predictions For 2013

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According to Pantone, the “it” color of 2013 will be emerald green. But that’s not the only trend worth considering– what about the “it” menu items diners are sure to see on their menus next year?

 

A survey of over 1,800 professional chefs produced the National Restaurant Association’s list of top ten menu trends for 2013. The top ten list indicates that consumers have four things in mind: cost, where their food comes from, gluten and their kids.

 

Consumers remain concerned about food costs while eating out, as suggested by the prediction that new cuts of meat will continue to appear on menus. These new cuts of meat, like the Denver steak, are lesser-known and less expensive but have become more popular as tough economic times have eaten into consumer’s disposable income.

 

The locovore movement continues to grow as more diners look for locally grown produce, locally raised meat, and sustainable seafood. Thanks to the popularity of cooking shows, food magazines and the rise of the celebrity chef, consumers are increasingly aware of how food appears on the dinner table– and they want it to be in an environmentally conscientious manner.

 

Gluten-free items began appearing on menus a few years ago– thank you Miley Cyrus– and, if anything, have increased in number and popularity. Pizza franchises like Domino’s offer gluten-free crusts in an effort to include those who have Celiac disease or a gluten sensitivity.

 

Some of the top trends carried over from last year, including children’s nutrition and locally sourced produce.

Do you think the predictions for 2012 proved to be true? Do you think 2013’s top ten list is missing a trend?

Yummy Cupcakes: a Hot Out of The Oven Franchise Opportunity

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There’s no denying the allure of a cupcake: sweet, creamy frosting (preferably chocolate) and moist, delicate cake (preferably vanilla) is a winning combination. But, can you be successful owning a cupcake bakery? Can it really make you money?

The short answer? Yes — and Yummy Cupcakes has proven it’s more than just a possibility.

 

In 2004, Executive Chef Tiffini Soforenko opened the now award-winning Yummy Cupcakes in Los Angeles, California. Since then, she’s served gourmet cupcakes and other treats to customers and celebrities the world over. (Martha Stewart, Rachael Ray and even Steven Spielberg like Yummy Cupcakes!) As of September 2012, Yummy Cupcakes began sharing its secrets to sweet success as it expands as a fresh new franchise concept.

 

Yummy Cupcakes’ hub and spoke business model positions each franchisee at the center of multiple incoming revenue streams. At the center of the business model is Yummy Cupcakes’ bakehouse, a location that both sells and bakes cupcakes. A bakehouse is capable of baking up to 12,000 cupcakes a day– enough to sustain sales at 2-4 satellite Yummy Cupcakes locations, which don’t perform any onsite baking. In addition to cupcake sells (the average ticket is $14), half of Yummy Cupcakes’ business comes from catering sales.

 

“Taste is very subjective, but our Los Angeles locations win ‘Best in Show’ each time in one of the most competitive markets,” says Dennis Mulgannon, Yummy Cupcakes’ director of franchising.

 

Part of Yummy Cupcakes’ success lies in its proprietary icing and cupcake recipes. The franchise doesn’t use a single pre-made mix for any of its 430 flavors– some of which are vegan and sugar-free– and include interesting combinations like Green Tea Wasabi and Turkey and Gravyin addition to more traditional, sweet offerings.

 

Currently, Yummy Cupcakes operates three locations in California and two international locations in the Middle East. Since it began franchising in early September of 2012, Yummy Cupcakes already has locations in Boston, France, Italy, the U.K., NYC, Texas, Nevada, Colorado, Oman, Japan and Abu Dhabi.

 

So, who are they looking for when it comes to potential franchisees?

 

“We’re looking for candidates with business experience– be it former small business owners or former corporate executives,” explains Mulgannon. “A passion for baking is great, but we’re not looking for someone who likes to make cupcakes– we’re looking for someone who understands basic business skills, knows what a P&L is, and how to manage a growing business.”

 

For those who are interested in starting a Yummy Cupcakes franchise or simply want more information, visit: http://www.franchisebuy.com/franchise/Yummy-Cupcakes.

 

Sports Image: The answer to underfunded school sports teams?

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A franchise might just have the solution as to how America can put its youth back on the global playing field– literally.

 

The education system has seen its share of cutbacks thanks to the Great Recession. A report released last year indicates that cuts to education funding has led to:

 

  • reduction in early childhood education programs
  • increases in class size
  • termination of art, music, physical education, and other elective classes
  • elimination of Advanced Placement courses, extracurricular activities, special science, foreign language, and technology programs

 

To some, sports might not be a “subject” but that’s not to say that sports don’t have their place in the education system. The disintegration of organized sports in America’s school systems is a major problem, as a recent study of 317 middle school students commissioned by the American College of Sports Medicine found that:

  • The fittest group of students scored almost 30% higher on standardized tests than the least fit group;
  • The least fit group had grades in four core classes that were 13-20% lower than the fittest group.

So, what do we do? As it turns out, the franchise Sports Image might just have an answer.

 

As a marketing consulting agency for grassroots sports teams that are in need, Sports Image solicits sponsorships from various businesses– large and small– for teams that need everything from new uniforms to a new scoreboard.

 

As President and CEO Eric Hortsman puts it, “Sports Image is a booster club on steroids.”

 

To date, Sports Image has given over $10 million in equipment and $1 million in cash to elementary school, middle school, high school, public recreation department, religious organization, Division II college, and Division III college teams.

 

Unsurprisingly, Sports Image has watched the need for its services rise considerably since the Great Recession. Then again, the public and not for profit sectors always need financial help, something that the franchisees of Sports Image are happy to give.

 

“A lot of companies do good and charitable work. Sports Image, at its core, is helping others,” says Hortsman.

 

Tom Carmichael, a Sports Image franchisee in Virginia, loves what Sports Image does for communities, as he’s “really been taken aback by how schools are hurting.”

 

“Being a Sports Image franchisee means having your own business but also being able to understand the wants and needs of a school, and then being able to go out and get it for them,” he says.

 

As for the sponsors, “They love it,” he says. “They get good advertising from it.”

 

Prior to becoming a Sports Image franchisee, Tom spent 33 years working his way up the corporate ladder at the same company, which he admits was a wonderful opportunity. He noticed that fewer and fewer new hires had a “team mentality”, something that had been instilled in him as a youth sports player.

 

During his college years, Tom played baseball and basketball despite being legally blind in one eye. He credits his coaches with giving him confidence in his abilities despite his handicap. In addition, he’s still best friends with his teammates from his college years.

 

“It’s like putting on an old jacket; it just fits me really well.”

 

@Work Staffing: The New Way to Hire

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The Paradigm Shift to Temporary Staffing

 

In the two years since the Great Recession ended in 2009, staffing firms have created more jobs than any other industry. As Jason Deverant, vice president of sales for @Work Personnel Services says, “Private sector temporary staffing is a leader in job creation.”

Despite the economy’s sluggish recovery, if you own a staffing franchise business has been good. According to the U.S. Bureau of Statistics, the temporary help services industry put nearly half a million Americans back to work and accounted for 91 percent of non-farm job growth from June 2009 – June 2011. For @Work, this has meant a 30 percent increase in profits over just last year.

 

“We’re looking for similar growth numbers this year,” Deverant adds.

 

As an industry, temporary staffing and recruiting are hyper-cyclical, fluctuating with the contraction and expansion of the economy. A study from the American Staffing Association suggests that temporary staffing firms lose jobs first during an economic contraction and create jobs first during an economic recovery. In essence, the temporary staffing and recruiting industry is a litmus test for the rest of the economy.

For a variety of reasons, there hasn’t been a significant shift back to permanent hiring since the recovery began. Firms are, according to Deverant “a little gun shy” about returning to the old business model of hiring employees permanently.

 

“Awareness of staffing companies has increased and attitudes have changed,” explains Deverant. The Great Recession has issued a new staffing paradigm: temporary might just be the new permanent.

 

For the employer, staffing provides an obvious value. Shielded from workers compensation litigations, unemployment, and the need to offer benefits, firms are able to mitigate the inherent risks of hiring a permanent employee while still getting a project done on time. Staffing takes into account the seasonality of certain industries, too. In addition, using a staffing agency is an enormous time saver for the employer.

 

“Very often we hear, ‘It’s hard for us to find a new candidate, I don’t have the time.’,” says Deverant.

 

But what about the employee? Is staffing good for the temp, too? According to Jason Deverant, it is. Instead of being tied down to one particular job every day, a temporary hire can pick and choose which projects he or she wishes to be a part of. There’s an increase in modality that’s coveted many full-time employees. In addition, work is often accomplished in a more project-oriented manner. The temporary staffer is treated more like a contractor than just a “filler” employee.

 

How staffing benefits the employee and the employer.

The need for staffing reaches into multiple industries extending beyond the traditional administrative work, which is why @Work’s franchising model includes four distinct staffing lines: personnel, medical services, search group, and helping hands.

“Our model is more cost effective,” says Deverant, “There’s about a 30 percent savings to comparable business models.”

 

In addition to providing staffing for multiple industries, @Work prides itself on its screening process. Finding quality temporary staffers is a huge part of what has made @Work a major competitor in the world of staffing. When a firm approaches you to fill a position, they’re trusting you to do the same kind of thorough recruitment and background check they’d do– if they had the time.

Of course, @Work’s dedication to finding franchisees is equally strong.

 

“An ideal @Work franchisee candidate is, of course, someone with staffing experience,” jokes Deverant, “But most of all we’re looking for someone with relationship development skills.”

 

Many of @Works’ franchisees are former human resources professionals who have made the switch to staffing. Those who aren’t skilled in sales (or might be a little rusty) need not worry. As part of the franchise’s standard fees, @Work dedicates a substantial amount of time preparing new franchisees for their new business ownership role.

 

“Our model is fairly inexpensive when you break the costs down,” says Deverant. Of course, a lot depends on the market in which a franchisee chooses to establish his or her location, but an @Work franchise usually costs between $77,000 and $120,000. According to Deverant, this includes the franchise fee, training fees, estimation of start-up costs, equipment purchases, client development cash, and additional overhead. As Deverant notes, franchisees can make frugal choices and bring this cost down even more.

 

For more information on @Work or how to become an @Work franchisee, please visit http://www.franchisebuy.com/franchise/@-Work-HelpingHands-Services.

 

 

Satmetrix: What to do when your customers go from engaged to enraged.

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The advent of social media has ushered in a new customer service paradigm. Interactions between a business and its customers — positive or negative– are now part of a company’s narrative thanks to platforms like Facebook and Twitter.

 

For businesses, this presents an opportunity to engage with its customer base and obtain feedback on its products and services. Under normal circumstances, this is a good, even great, thing. But, when a customer turns from engaged to enraged, a business is often caught off-guard, especially if a customer chooses to vent his or her frustration publicly. An angry customer is a scary thing; an angry customer on Twitter or Facebook is terrifying.

 

 

 

 

 

 

 

 

Dissatisfied customers present a unique challenge to franchises. Negative feedback expressed publicly can not only tarnish the reputation of the local outpost, but also influence a potential customer’s perception of the brand overall. As Forbes reported earlier this year, “when you make a decision to choose one brand over another, you’re influenced more by the company’s reputation than any particular product it offers.”

 

So how do you manage your reputation, keep your customers happy, and protect your bottom line? Satmetrix has a suggestion: put your net promoter score to work.

 

There are three types of customers: promotors, passives, and detractors. Customers that support and advocate for your brand are promoters. Those that support your business but aren’t telling their friends and family about you are considered passives. Customers that speak out against your business due to a poor experience are labeled as detractors. A brand’s net promoter score is calculated by subtracting the percentage of detractors from the percentage of promoters and provides a company with a numeric indication of its customer base’s level of satisfaction.

 

 

 

Traditionally, a net promoter score was calculated through surveys, which have become so ubiquitous they’re ineffective. Fewer and fewer customers care to respond to surveys because they get so many. Spark Score, a program from Satmetrix, surveys what customers are already saying by sweeping the Internet and social media.

 

At this point, the folks at Satmetrix decided to go a step further. After the net promoter score has been calculated, more questions are asked. In doing so, Satmetrix is able to draw a correlation between the net promoter score and what’s causing a customer to recommend your brand or, in some cases, to not recommend your brand. The goal is to identify the moment that franchises (and other businesses) are dropping the ball in order to fix the underlying error, improve overall customer relations, and ultimately win customers back.

 

A recent study performed by the Gallup Business Journal indicates that bringing on new customers is about emotion, not price or product. It costs more money to woo a new customer than it does to keep an existing one. In addition, satisfied existing customers spend an average of 2.6 times more than one that’s relatively satisfied and 14 times more than one that isn’t satisfied.

 

In the graph below, total revenue is represented by the total sales from passive and promoter customers in a nonexistent company. Total potential revenue represents the total sales from promoters, passives, and detractors who have returned as passive customers after having their customer service issues resolved. On average, the difference between the total and total potential revenues each month is $9,333.

 

The way Satmetrix has designed their program gives franchises the ability to assign each customer type a value, placing into perspective the real cost of a dissatisfied customer. In the case of the nonexistent company above, one detractor equals 2.6 passives and 1 promoter. So, when you lose a customer due to a poor customer service experience, you may need two customers to make up the difference in lost revenue.

 

At the end of the day, it’s more than the loss of a customer and sales; a detractor also has the ability to turn potential clients into detractors before they’ve even become a paying customer. When you’re looking to try a new restaurant or need help mowing your lawn you turn to family members and your friends for recommendations. The same applies to every business.

 

Satmetrix hasn’t stopped at creating a better net promoter score or helping companies assign a value to each customer type. With Satmetrix, sales teams can respond to customer service emergencies in real-time, assuaging a dissatisfied customer’s frustrations before they’ve said sayonara and been welcomed with open arms by a competitor. It’s also at this point that Satmetrix can help companies identify exactly where they’re going wrong in the sales process. As Carol Tice of Entrepreneur magazine points out, two of the best ways to keep angry customers from storming out and never coming back are reaching out via social media and fixing the broken policies.

 

Beyond the Easy Bake Oven

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How One Franchise Is Teaching Kids to Cook Better Than Their Parents

 

The idea of a child using a knife is enough to make any parent nervous. For Barbara Beery, it’s not so bad. For the past 25 years, Barbara has been surrounded by children with knives as a cooking instructor.

 

Born and raised in Austin, TX, Barbara has spent most of her life cooking. As a child, she was always in the kitchen with her mother. As a mother, Beery was always in the kitchen with her three young children. After the arrival of her third child, Beery needed a little extra cash.

 

Not wanting to put her kids in daycare, Barbara put her degree in education to work as a part-time preschool teacher. In her spare time, she taught cooking classes for children out of her home in Austin, Texas. She realized that, as a teacher, she had access to a large potential customer base: children and their busy parents.

 

All it took was a flier to fill a few of Beery’s cooking classes  After a few years of teaching both preschool and cooking classes, Barbara saw children’s cooking classes were something she could pursue full-time. That was 25 years ago.

 

From Kitchen to Franchise

 

From the very beginning, Barbara never simplified the recipes she taught to her students. “Kids can do so much more than just frost a cupcake,” explains Beery.

 

Most of the recipes Beery teaches are inspired by adult cookbooks (as opposed to those penned for children). Instead, she substitutes ingredients and changes a few names to make them appropriate for younger and smaller chefs. “Children are so beyond throwing a peanut-butter-and-jelly something together,” Beery says.

Today, Barbara Beery is the President and Owner of Foodie Kids, a franchise opportunity that teaches children’s cooking classes and sells child-appropriate cooking materials. She still teaches classes at the franchise’s Austin, Texas location; it’s what she “really loves.” In addition, Barbara writes the franchise’s curriculum, divines new recipes, and creates new classes.

 

When it comes to new classes, Barbara feels it’s important to stay up-to-date with the media, food trends and various new movies. For example, one summer she built a series of classes around the movie “Ratatouille” following its release. Of course, she’s constantly in contact with her little chefs and their parents. “There’s nothing more invaluable than listening to our customers.”

 

How Foodie Kids Works

 

As a franchise, Foodie Kids generates revenue in two ways: through cooking classes and its retail store. Each location separates the retail portion from the kitchen area for obvious health and safety reasons, but onlookers are able to watch cooking classes through large glass windows.

 

The retail area of the franchise is, according to Beery, “a cross between a kitchen supply store like Williams-Sonoma and a fabulous toy store like FAO Schwartz.Everything you can imagine having to do with kids and with cooking we sell,” Beery says.

 

Anytime the retail portion of Foodie Kids is open, kids can come in to make a snack for free. Not only does this entice children into the retail area (which is great for franchisees), it allows parents the opportunity to sit down, relax, and enjoy a cup of coffee while their little ones are happily playing. An added bonus? “It’s not their kitchen,” says Beery. There’s nothing to clean up.

In the Foodie Kids kitchen, children are taught according to their age and/or experience level. Those who are new to cooking or are very young will use child-appropriate safety knives, which are sold in-store. Foodie Kids also teaches a knife skills workshop. According to Beery, most children between 7 and 8 cannot use sharp knives that aren’t designed for children. “A 7 or 8 year old who has grown up in a cooking family can use a sharp knife,” says Beery.

 

“As many recipes as you can think of– that’s what we do,” says Beery of the cooking classes. “Children have made turkey sliders, homemade buns, vanilla ice cream, crêpes, chocolate croissants and coq au vin,” she says. Several of her students have gone on to culinary academies to become chefs.

 

“Cooking is one of those things that with the right environment and instruction, a child can be instantly successful. The best part of my job is when the little light bulb goes off in a child’s head, when they accomplish whatever we’re working on for the first time. It doesn’t matter if it’s a 2 year old or a 10 year old.”

 

Finding Franchisees

 

While the only location in current existence is the original in Austin, potential franchisees shouldn’t be alarmed. Barbara has been in the business for 25 years and Foodie Kids has only been franchising since mid-May of 2012.

 

If you’re interested in becoming a franchisee, loving to cook and loving kids are both important but they’re certainly not all Barbara looks for when selecting entrepreneurs to further Foodie Kids. “This is a business, it’s not a hobby. This isn’t something to tinker around with for three to five hours a day and walk away from,” Barbara says of her franchise. She makes the point that it is a small business.

 

“We don’t want an absentee franchisee. These parents and grandparents are bringing in their most precious possession to teach and do right by. You need to have your face in that store.” Beery asserts.

 

Once an entrepreneur becomes a Foodie Kids franchisee training begins in Austin at the original Foodie Kids location. Additional training is provided on-site at the franchisee’s new location for 3-5 days during the initial opening week. Barbara hopes that the new franchises who join Foodie Kids will incorporate new ideas into the program.

 

“You can’t think of everything!” she quips.

 

 

Success Story

 

If you’re wondering as to the practicality and profitability of a children’s cooking franchise in this economy, Beery has proved that it’s possible be successful. Foodie Kids in its current incarnation began two years ago and, despite never advertising, experienced the kind of success you don’t hear of– even in a booming economy.

 

“We opened the doors and we had profit in the first three months,” says Beery, much of which she credits to her local reputation.

 

That said, Foodie Kids provides a service that busy and working parents need and feel are of value. Barbara feels that cooking classes for children were once considered a luxury but now are ways for busy parents to keep kids busy during the summer months and after school when parents have to run errands, be at work, or need alone time.