Francorp Consulting

Francorp Upcoming Events
Francorp is the world leader in franchise development and franchise launches. As part of that, the ongoing responsibility for the firm is to provide information and up to date facts on the current franchise market and most recent happenings in the field of franchising.

Francorp has a podcast site for Francorp clients that can be accessed any time with continuously updated information and discussions on the franchise industry.

www.francorppodcast.com

With the most recent technology improvements in place this site will allow constant access to many informative video and audio recordings on franchising from Francorp's Chairman, Don Boroian and other Francorp professionals.

There you can also access Don Boroian's extensive discussion on franchising in today's economy and what strategies have worked best in the franchise field.

If you are planning on attending the International Franchise Expo in Los Angeles October 2-4, please come visit us at the Francorp Booth

Show Dates & Hours
Friday, October 2, 2009 11:00 am to 7:00 pm
Saturday, October 3, 2009 10:00 am to 5:00 pm
Sunday, October 4 , 2009 11:00 am to 4:00 pm

Location:
Los Angeles Convention Center
South Hall H & J
1201 South Figueroa Street
Los Angeles, CA 90015
PH: 213-741-1151
Fax: 213-765-4266

Booth # 821

Francorp will have a number of staff members there at the booth to discuss franchising and hold consultations. Several members of the Francorp team who are based throughout California will also be at the show.

Francorp also has an office based in Mexico City that has been established for nearly 20 years run and operated by Mr. Ramon Vinay. Mr. Vinay brings almost 35 years of franchise experience around the globe to Francorp and will be available for business owners to discuss franchise strategies and implementation in Spanish.

If you would like to arrange for a meeting with any members of the Francorp team please call 708-481-2900. Please call us for a free registration to the show before October 1, 2009.

Francorp will be conducting Franchise Marketing Training with former Francorp Client, Todd Sullivan at the Francorp world headquarters.
Francorp Marketing Training is focused on lead generation, developing a franchise brand and efficient marketing strategies for a franchise company.
October 20th & 21st
Francorp, Inc
20200 Governors Drive
Olympia Fields, IL 60461

Francorp - Franchise India Client Meetings
October 12-14th, 2009
Francorp will be inviting select franchisors to the Francorp corporate headquarters for meetings and discussions with Francorp India to break down strategies and implementation for entering the Indian Market. Francorp India will have several Francorp team members in attendance including the Francorp India CEO Gaurav Marya.
Francorp, Inc
20200 Governors Drive
Olympia Fields, IL 60461


Franchise Management Training Module
This training module is run by Mr. John Dukach, Vice President of Strategic Planning with Francorp. He discusses current management strategies for new franchise companies, system management, franchise relationship building and other processes to effectively run and manage a franchise company. Mr. Dukach brings over 30 years of franchise management to Francorp.

October 21st & 22nd, 2009
Francorp, Inc.
20200 Governors Drive
Olympia Fields, IL 60461


Franchise Expo South
January 15 - 17, 2010
Francorp will be Exhibiting at the Exposition
Miami Beach Convention Center, Hall C
1901 Convention Center Drive
Miami Beach, FL 33139

Show Dates & Hours
Friday, January 15, 2010 11:00 am to 6:00pm
Saturday, January 16, 2010 11:00 am to 6:00 pm
Sunday, January 17, 2010 11:00 am to 5:00 pm

For constant updates on Francorp, Francorp clients and global updates on the franchise industry, follow Francorp on Twitter, www.twitter.com/Francorp

The Scariest Monster of All Sues for Trademark Infringement

The Scariest Monster of All Sues for Trademark Infringement
Fancy Audio-Cable Outfit Defends Its Brands; A Mini Golf Course Fights Back
Article
Comments (62)
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By STEVE STECKLOW

When Christina and Patrick Vitagliano dreamed up their Monster Mini Golf franchises -- 18-hole, indoor putting greens straddled by glow-in-the-dark statues of ghouls and gargoyles -- they never imagined that a California maker of high-end audio cables would object.
But Monster Cable Products Inc., which holds more than 70 trademarks on the word monster, challenged the Vitaglianos' trademark applications. It filed a federal lawsuit against their company in California and demanded the Rhode Island couple surrender the name and pay at least $80,000 for the right to use it.
"It really seemed absurd," says Ms. Vitagliano.
Video
Watch the YouTube video of Monster Cable's Mr. Lee and Monster Mini Golf's Ms. Vitagliano.
The legal actions were nothing new for Monster Cable, which was granted its first "Monster" trademark in 1980. Since then, the company has fought more monsters than Godzilla did.
Over the years, it has gone after purveyors of monster-branded auto transmissions, slot machines, glue, carpet-cleaning machines and an energy drink, as well as a woman who sells "Junk Food Monster" kids' T-shirts that promote good eating habits. It sued Monster.com over the job-hunting Web site's name and Walt Disney Co. over products tied to the film "Monsters Inc." It opposed the Boston Red Sox trademark applications for seats and hot dogs named for the Green Monster, the legendary left-field wall in Fenway Park. All in all, Monster Cable says it has fought about 190 monster battles at the U.S. Patent and Trademark Office and filed around 30 monster lawsuits in federal courts.
Along the way, it has attracted its share of ire from those who say it is overreaching and trying to corner the market on a word, not a brand. "If Monster Cable prevails, the Gila monster will become just another lizard" and "the monster under your bed will have to become an ogre," wrote Michael Meadors of tabberone.com, a Web site that sells fabrics and also keeps tabs on trademark issues.
"Monster Cable's practice of suing anyone using the word 'Monster' in their name is nothing short of playground bullying," says Robert Holloway, a computer contractor in Iowa who set up a Web site called monstercablebully.com to support the Vitaglianos.
Monster Cable says its trademark challenges are a matter of necessity. "If you don't defend your mark, and people use [it], it runs the risk of becoming generic and then you lose the mark," says Noel Lee, founder of the Brisbane, Calif., company, whose corporate title is "Head Monster." Mr. Lee says the company sells many other monster-branded products besides cables that it has to protect, including music, clothing and candy mints.
To a legal novice, it may seem odd that a common word like monster can be trademarked at all. But in the complex and sometimes murky world of trademark law, common words can be registered, provided they are associated with specific classes of goods. Apple Inc., for example, holds trademarks for the word apple when it's related to computer products, not fruit.
Sometimes, trademarks can obtain a higher order of protection, known as "famous marks." This category is supposed to be reserved for words that have become so entwined with a product and a company -- like the word visa and Visa Inc.'s credit card -- that the trademark owner can argue that no other product may use the word in its name.
David Tognotti, Monster Cable's general manager and an attorney, says the company considers "Monster" a famous mark -- on a par with Barbie dolls or Camel cigarettes. "We're protecting our mark as if it's a famous mark," he said in an interview in Monster Cable's headquarters, where the walls are lined with framed copies of the company's trademarks and patents.
Mr. Tognotti cited a chapter on famous marks in the law book "McCarthy on Trademarks and Unfair Competition" by J. Thomas McCarthy, a noted expert in the field.
But in an interview, Prof. McCarthy expressed doubt that Monster Cable possesses a famous mark. He said such determinations are made by courts. Mr. Tognotti acknowledges Monster Cable hasn't obtained such a court ruling.
Most of the company's lawsuits have been settled privately under confidential terms. In some instances -- such as the case of the Discovery Channel's reality auto show, Monster Garage -- companies have surrendered their trademarks to Monster Cable, which sometimes licenses them back for a fee. Discovery Channel declined to comment. The show is no longer in production.
In its federal civil lawsuit against Monster.com, Mr. Tognotti says owner Monster Worldwide Inc. agreed to pay Monster Cable's legal fees and post a clickable link to its Web site on Monster.com that says, "Looking for Monster Cable?" A spokesman for Monster Worldwide acknowledged the lawsuit was resolved but wouldn't discuss details.
A Disney spokesman says the company settled the lawsuit over Monster Inc.-related products without paying any compensation. Mr. Tognotti of Monster Cable says his company dropped the lawsuit after determining there was no trademark infringement.
He says Monster Cable has no plans to pursue the new DreamWorks Animation film, "Monsters vs Aliens." Says Mr. Tognotti: "We do not have a concern if a company is using the word 'monster' in a purely descriptive sense to describe actual monsters."
As for the Red Sox, Mr. Tognotti says the team agreed to withdraw or modify some of its trademark registrations for Green Monster-related products after Monster Cable argued there was "confusion in the marketplace." At the time, San Francisco's Candlestick Park was called Monster Park because Monster Cable had bought the naming rights. A Red Sox attorney referred questions to Major League Baseball, where a spokesman said the team had agreed with Monster Cable over a "procedural matter" but declined to elaborate.
Occasionally, Monster Cable has retreated. After it sued MonsterVintage LLC, an online used-clothing store based in Oregon, owner Victor Petrucci says he drove a rented truck to Monster Cable's headquarters and around San Francisco for two weeks. It was emblazoned with a giant sign that read in part, "Monster Cable S-." Monster Cable dropped the lawsuit.
"We have to balance what we do legally to protect our mark with that of public opinion," says Mr. Lee, adding, "We're very sensitive to our reputation."
The Vitaglianos say their monstrous fight erupted in 2006, two years after the couple opened their first mini-golf course. "It never occurred to me that a cable company might not like it," she says. Adds her husband, "We just all assumed it was going to go away."
Their attorney, Arthur L. Pressman, says he suggested they consider changing the name to Scary Mary's Monster Mini Golf to play down the word monster. But the couple refused to back down. By late last year, with their legal bills approaching $100,000, they agreed to try mediation. But after 10 hours, "we got really angry and sort of stormed away," says Ms. Vitagliano.
The couple then launched an Internet-based guerrilla campaign to generate public support. "We blogged nonstop, around the clock, for weeks, and enlisted much of our staff to do the same," she says. The couple offered to sell symbolic slices of "Justice" for $1 on eBay and raised about $4,400 for their legal defense. Two days before Christmas, she sent Mr. Lee a DVD of the film, "How the Grinch Stole Christmas."
Monster Cable's Mr. Lee says the company also received at least 200 angry consumer complaints. After speaking with the Vitaglianos, he decided to drop the lawsuit, withdraw his company's opposition to Monster Mini Golf's trademark applications and pay up to $200,000 of their legal expenses.

Francorp Client Schotzsky's

Schlotzsky’s Goes Web 2.0 for Sandwich Debut
March 3, 2009

-By Becky Ebenkamp

Schlotzsky’s is throwing out the first pitch for its initial major QSR deal this week with a spring baseball-themed program that supports the casual chain’s launch of three Big League Clubz sandwiches.

The creative challenge was to spread the word about the new Beef ‘n Bacon Club, Chick ‘n Turkey Club and Ham ‘n Turkey Club sandwiches among dads and their ball-playing kids by the bonding the sport brings—from Little League to the big leagues. (The promo has no affiliations with Major League Baseball or any other organization, however.) Austin, Texas-based Schlotzsky’s is owned by Focus brands (Carvel, Cinnabon, Moe’s Southwest Grill) and has about 350 restaurants in 35 states.

This is the largest promotion Schlotzsky’s has ever done, and the first time the chain has gone beyond the traditional TV, radio, FSI, POP route to communicate.

“We brought in all these [components] to help [Schlotzsky’s] understand the power of social media to drive sales and to show them how measurable it is,” said Van Vandegrift, executive producer at branded entertainment company Matrixx Pictures in Santa Monica, Calif., the agency that devised the promotion. “In Web 1.0, we used to care about the time visitors spent on the site and where they went; now, the sentiment is about the brand, how many times it’s mentioned in blogs and in what context, photos posted to Twitter, drive-by buzz. This is great because this is a brand new sandwich--there’s no buzz yet.”

At a microsite (Bigleagueclubz.com), fans can join a Big League Clubz club and enter a sweepstakes to win a trip for four to St. Louis (coincidentally timed around the MLB All-Star Game). The sweeps runs through May 31, and visitors who come back for extra site experiences—such as to play games or sign up for an e-letter—get bonus entries. Gameplay will be a main draw, as there are video games and a fantasy baseball league component that involves drafting friends for teams. The latter will also extend to social networking sites, such as Facebook.

A downloadable desktop widget lets players keep track of scores and other baseball info and gives Schlotzsky’s a conduit of communication. “We’ll know how many people download the widget, and when we push out an offer, we’ll know who we pushed it to and who responded,” Vandegrift said.

There are many more components: Codes from ads and POP can be texted to win additional sweepstakes chances, the sandwiches have their own baseball-type cards that factor in and fans who collect those can upload photos to a site to receive a mini engraved baseball bat premium. There’s a local market activation push to help restaurants connect with baseball entities in their communities through sponsorships, team nights and other touch points.

“It’s rare to see a 40-year-old brand take a shot at new media," said Vandegrift. Most are afraid to dip their toes in, and he believes the best way to introduce clients to Web 2.0 is to engage them personally. He added: “If you want to know how text messaging works, [we say to them,] ‘Text this message to this code and when you get a message back you can see if you like how it works. That’s better than sitting around all day saying, ‘We should have a better web site.’ It’s about building a better social experience.”

What is Franchising?

What is Franchising?

Imagine that you're opening your own McDonald's. To do this, you have to buy a McDonald's franchise. In order to qualify for a conventional franchise, you have to have $250,000 (not borrowed). Your total costs to open the restaurant, however, will be anywhere from $685,750 to $1,504,000, which goes to paying for the building, equipment, etc. Forty percent of this cost has to be from your own (non-borrowed) funds.

You'll pay an initial franchise fee of $45,000 directly to McDonald's. The other costs go to suppliers, so this is the only upfront fee you pay to McDonald's. Then, you'll go through a rigorous nine-month training period where you'll learn about the McDonald's way of doing things -- things like their standards for quality, service, value, formulas and specifications for menu items, their method of operation, and inventory control techniques. You'll have to agree to operate the restaurant from a single location, usually for 20 years, following their guidelines for decor, signage, layout and everything else that makes McDonald's McDonald's.

Once you've completed training and are ready to go, McDonalds will offer you a location they've already developed. The exterior of the building will be complete, but you will have to take care of interior additions such as kitchen equipment, seating and landscaping. You'll get constant support from a McDonald's Field Consultant, who can advise you on details and will visit regularly. You'll pay McDonald's a monthly fee of 4 percent of your sales, and either a flat base rent or a percentage rent of at least 8.5 percent of your sales. How much money you make depends on many things, including the location and its popularity, the efficiency of your operating costs, and your ability to manage and control the business.

Think of franchising as paying someone for his or her business strategy, marketing strategy, operations strategy, and the use of his or her name. That's pretty much what franchising is -- you are establishing a relationship with a successful business so you can use its systems and capitalize on its existing brand awareness in order to get a quicker return on your own investment. You are using its proven system and name, and running it by its rules.
Are you still your own boss? In some respects, no. You still have to answer to someone else and follow his or her direction. You don't really own the business; you own the assets you've purchased in order to establish the business.

Small Cafes Doing Well Despite Downturn

Cup of competition: small cafes holding their own
By RAMIT PLUSHNICK-MASTI
The Associated Press
Friday, February 13, 2009; 3:48 PM
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/13/AR2009021302304_pf.html

CRANBERRY, Pa. -- Steam releases in a long psssssssssss. Coffee drips and glasses clink. Coffee lovers in the hotel lobby closely watch baristas prepare their crafts: espressos and cappuccinos that can win them the title of best coffee maker on the East Coast.
While business owners large and small lay off workers, cut costs and freeze expansions in a bid to survive the worst recession in decades, many small cafes are enjoying double-digit profits, opening new shops and spending time and money to boost their images in competitions like this one recently held outside of Pittsburgh.
Economists are baffled by the phenomenon. They say it could be part of a backlash against large corporations _ such as Starbucks _ and a move by consumers to carefully choose where to spend each dollar and opt for what they perceive to be a high-quality cup of coffee made by a well-trained barista.
Starbucks turned a luxury into a necessity and everybody needs their coffee, said Constantine Stavropoulos, owner of Tryst coffee shop in Washington, D.C.
"Now they're saying if I still need it why would I go to Starbucks when I have this alternative," he added. "People are really beginning to re-recognize the neighborhood coffee shop," he added.
Small coffee shop owners are doing everything to maintain their loyal clientele and attract new customers, especially those disillusioned by Starbucks and other chain coffee shops.
Cafe owners are pulling out the stops: They're blogging; diligently selecting roasters; upgrading and changing menus frequently; chatting with customers in an effort to foster relationships; training baristas for months; and ultimately trying to provide a unique atmosphere.
Tryst has a message board on its Web site where people who exchanged smiles or sly glances over a latte can try to reconnect in a 21st-century forum. Stavropoulos calls Tryst calls the sought after "third place," not home and not work, and says it stands "in stark contrast to the suburban culture and coffee chains that proliferate the country."
Starbucks, meanwhile, has reported a 10-percent drop in same-store sales, is closing nearly 1,000 shops and cutting at least 7,000 jobs. The chain's profits in its most recent quarter were down 69 percent.
On the other hand, Stavropoulos said his coffee shop enjoyed a 4 percent increase in sales in 2008, although he did see it slowdown a bit in the last three months of the year. Still, he said, he is plowing ahead with plans to open another cafe later this year.
Ken Zeff, owner of Crazy Mocha, a 9-year-old chain of coffee shops in Pittsburgh, says his comparative sales were up 12 percent year-over-year in 2008 and he is planning to open his 21st shop in the first quarter of this year. He is also looking at three or four other potential sites to launch later in the year.
Kiva Han Coffee, a gourmet roaster that supplies coffee to retailers in western Pennsylvania, eastern Ohio and parts of West Virginia, grew 40 percent in 2008, and about 90 percent of its business comes from small coffee shops, president and owner Ed Wethli said.
All told, Wethli said he helped 30 new cafes open their doors in 2008, supplying them with everything from cups and equipment to the syrup used in the drinks.
"There's a real local initiative with people to buy from people in their community and ... coffee bars represent one area where you can definitely walk with your feet and support somebody local," Wethli said. "All of us feel a little betrayed by the big corporations that have really put us in a tailspin here."
Economists say the trend contradicts expectations in a slow economy. Typically the weakest competitors _ often the smallest business owners _ are weeded out, failing first and fast.
But Esther Gal-Or, a professor in the University of Pittsburgh's Katz Graduate School of Business, said it may be small cafes are succeeding because they have the flexibility to adapt to a failing economy.
Jeffrey Inman, a marketing professor at the University of Pittsburgh, said part of the shift away from Starbucks could be "a backlash against some of the corporate greed we've seen."
"If I have a relationship with the baristas and they know who I am and they know what I usually get that drives it too," Inman said. "And the small guys tend to be better at doing that then the big guys. I would call that the 'Cheers' effect, where everybody knows your name."
At the recent Northeast, Mid-Atlantic Region Barista Competition, Luke Shaffer was moved to tears to see some of his regulars at the 21st Street Coffee and Tea drove 30 minutes from Pittsburgh to see him perform.
For cafe owners like Shaffer, the competition was an opportunity to learn as well as a chance to market themselves _ key to businesses that do little to no advertising.
"Customers are kind of callous toward advertising," Shaffer said, noting that even without it he enjoyed monthly sales growth in 2008 of 20 percent to 50 percent. "I would rather focus my resources and my time on just improving our product and word of mouth has brought us a lot of wonderful press."
On his lunch break at the Crazy Mocha in downtown Pittsburgh, Nathan Eber, a 32-year-old ombudsman with Allegheny Health Choices, is reading a book and listening to his iPod while sipping coffee. The earth-tone orange walls, the comfy chair and the relaxing music all play into his decision to buy his coffee every day at this local coffee shop rather than at the Starbucks down the block.
Even when he goes home, he chooses to frequent the local coffee shops in his neighborhood, and has been doing this for quite some time.
"I do work hard for my money," Eber said, "and I choose to put money in businesses where I know it's going to come right back into the community."

Seattle's Best Coffee to Franchise

Seattle’s Best Coffee franchise expansion planned
Puget Sound Business Journal (Seattle)

Seattle’s Best Coffee, a division of Starbucks Corp., said it plans to expand its franchising program.
Seattle’s Best Coffee sells some products that are smoother tasting and not as strong as the Seattle-based coffee giant’s specialty drinks, according to spokesman Alan Hilowitz. Seattle’s Best Coffee calls itself “an accessible entry point to specialty coffee.”
Company officials said they will concentrate on expanding the Seattle’s Best Coffee brand in the West and in Texas from the existing 550 locations today.
Seattle-based Starbucks (NASDAQ: SBUX) bought Seattle Coffee Co. and the Seattle’s Best Coffee brand in 2003 for $72 million from AFC Enterprises Inc.

How to Effectively Work a Franchise Tradeshow

How to Effectively Work a Franchise Tradeshow
By: Christopher James Conner

Franchising is a fantastic way to grow a business. Many companies have utilized franchising as a way to grow their businesses across the United States and around the world. Hundreds and in some cases thousands of units have been opened in very short time periods by many different franchise brands. The basic premise, is that one company who has a good business model and understanding of how to run their type of business can teach other business owners how to be successful doing the same thing. In return the ones who learn from the credible business owners pay a franchise fee and royalty for that knowledge and training. It really can be an amazing thing when franchising successfully builds “win-win” relationships between so many different parties.
When a company decides to offer franchises of its business model, they begin to look for potential franchisees who will then open locations of their concept. It is with that principal that companies use tradeshows as a potential avenue for meeting new franchise buyers.
A Franchise sale is unique and different from most other sales. It is the formation of a long term relationship between two business parties. Unlike in the sale of a good or a short-term service, this transaction has a lasting relationship that in many franchise contracts extends to twenty years or longer. When a franchise company exhibits at a franchise tradeshow to meet new buyers they are in the first stages of forming a long partnership with those people. With that in mind the tradeshow takes on a new light. This decision has enormous consequences for both sides of the transaction. The buyers at a franchise tradeshow analyze everything about the franchisors and are carefully evaluating everything about the company. This is a very big decision for most franchise investors and they will be extremely cautious about who they get into business with. The Franchisors exhibiting at franchise shows must have their best presentation ready to go and be totally on top of their game in order to impress potential buyers.
This starts first with the booth. At any tradeshow the booth is an extension of a company’s office and home. It represents to the people at that tradeshow what and who that company is. Every piece of the booth and messaging displayed needs to be carefully and appropriately structured. There are many companies that do nothing but booth design and set up, I would recommend exploring their services. Because of the brevity inherent in a decision to invest in a franchise, the booth must look and be set up properly, it should represent a company extremely well. The best companies in the world at doing this are the commercial real estate organizations at the ICSC in Las Vegas each year. Their booths literally look like permanent office buildings they have constructed on the trade show floor. Booths to this extent can run in the hundreds of thousands of dollars and are not practical for most purposes, but it is critical to have a professional and well organized booth at a franchise tradeshow. It is also extremely important to understand how your booth and the materials will actually get TO and FROM the show. If pieces are missing when you go to set up your booth, it can ruin the structure and overall presentation.
The most critical aspect to a successful tradeshow is the Staffing. There is an old saying that describes the uselessness of an extremely expensive booth with all the bells and whistles and no one to staff the booth that cares enough to engage the prospects. Franchise buyers are wary, this is a big decision for them and they are very careful in their evaluation. That being said, most buyers do not know what they want to invest in. They come to franchise shows with the understanding that they could investigate the options and look around to meet potential franchisors. Very rarely does a buyer come to a show with an express intent to buy or meet with one particular franchise company. Keeping that in mind, it is absolutely essential that a franchise tradeshow booth be manned by aggressive and positive staff. The booth very quickly becomes an afterthought once a prospect is engaged. Then the attention is shifted to the person. Everyone at the booth should look professional, well dressed, clean shaven, positive and excited about what they have to offer. If the people at the booth are not excited about the franchise offering, why should the buyers be?
The key to a successful tradeshow for a franchise company is to leave with LEADS. Very rarely does a tradeshow attendee come to a show and buy a franchise there at the exhibition. In most cases they meet the franchisor and begin the information gathering process from that point, the franchise agreement and relationship begins in several weeks or months after continued follow up and interaction. As a result, the focus of a franchise tradeshow for the team and staff must be to generate leads. Once a prospect has been engaged and their information has been gathered, it is time to move on! Find the next potential buyer, the tradeshow floor is not a place for long conversations. It is short introductions where enough value is built to set up the next call. Good franchise tradeshow staffs will not get caught talking with vendors or unqualified prospects. They will be on their feet the entire show and will not eat or drink in the booth. You just never know when that next good buyer will walk around the corner, and if your booth staff is drinking smoothies or eating ice cream at the time, you just might miss out on a great opportunity.
After the smoke clears and the tradeshow activities come to an end, it is not time to rest. It is time for follow up. An amazing percentage of tradeshow meetings at franchise exhibitions are never followed up on. It is a travesty to spend money on a tradeshow, put in the hard hours, walk away with sore backs and knees and not give the follow up the attention and commitment it deserves. The leads that you meet at a franchise tradeshow should be followed up with the night after the meetings have happened. This may seem aggressive to some, but you are not the only company or person that the attendee met for the first time that day. It will be a very short time before they forget you even exist. The follow up should be continued until there is a substantive conversation. Ideally, a franchise company will arrange a follow up meeting, either at the location or in the form of a seminar or workshop about their franchise. These meetings are a great way to continue the franchisee’s buying process and information gathering.
Overall, franchise tradeshows are wonderful ways for buyers to learn more about franchises and meet firsthand with the owners and leaders of franchise companies. They are also extremely effective ways for franchisors to market their franchise offering and meet quality potential buyers for their franchise. If the show is managed correctly and the preceding points are taken into account, tradeshows can be the beginning of many wonderful franchise relationships!

www.francorp.com

How to Franchise

Often times we are asked at Francorp about how franchising works and how a company can franchise their business. We provide valuable insight to our clients and to the businesses we meet with at our seminars and our office on how franchising works. Franchising a company can, on the surface, appear to be relatively simple and easy to get into.

However, as you continue to investigate the subject of franchising more, you will soon discover the complexities of it. There are a few steps that I always recommend a business looking to franchise take:

1. Attend a Franchise Seminar
2. Meet for a Franchise Consultation
3. Read "Franchising Your Business," by Don Boroian and Patrick Callaway
4. Take the Franchise Quiz to see if you are franchiseable
5. Call 800-FRANCHISE and ask to speak with a franchise analyst for a free initial phone consultation.

Franchising Poised for a Successful 2009

Talk about getting started on the wrong foot! Could everyone in the United States be in a more cautious and precarious situation then right now in the days soon after New Years 2009? Most people are still asking, "What just hit us?" as they try to collect themselves both financially and emotionally from a devasting 2008 where over 3 trillion dollars of wealth was lost throughout the year. My guess would be that my Holiday was similar to a lot of other professionals in the United States, less presents under the tree and much less extravagant all around.

Francorp works closely with virtually every major franchise system in the U.S. and around the world. The consulting firm continually analyzes the health and future of the franchise market to better serve and impliment new franchise companies.

So what does 2009 bode for franchising? How will franchising respond to the inclimate financial times and what is sure to be an interesting road to recovery for the U.S. economy this coming year?

In my oppinion, 2009 will be a good year for franchising and for many entreprenuers getting started in their own franchised businesses. Here are the reasons.

1. There are no corporate jobs out there right now. Almost all of the large corporations in America save a few niche industries have made enormous cutbacks in their labor forces. When college educated professionals were coming out of school into the job market 3 years ago, those $100k jobs were plentiful and offerred a very nice alternative for new workers. In the 2009 market finding a good job anywhere will be like winning a car from the monopoly game at McDonald's, not that likely. Franchises offer a valid alternative for those either newly out of school or looking for new opportunities. The absence of work opportunities will make franchise offers that much more attractive.

2. Real Estate Opportunities. Commercial Real Estate prices are at all time lows per square foot in most U.S. markets. When times are good and the Starbucks of the world are dishing out rents at $100 per square foot in Dekalb, Illinois, its impossible for the "little guys" to keep up. Today, if you have been living in a cave and haven't heard, Starbucks is closing 700 locations as well as many other major corporate chains. This leaves ample opportunities for smaller, emerging chains in many different business categories.

3. The Flock Mentality. Most people are pretty depressed right now. People tend to base their decisions on what others around them are doing or saying. Because of this mentality many of the "pretenders" in any given industry will not be participating in 2009 to the extent they would be when the economy is booming. Looking at the investment community, the really successful investors make opposite moves of the general public. During this massive sell-off in stocks during the second half of 2009, Warren Buffett invested over $20 Billion. The franchise companies that make aggressive expansion moves in 2009 will take market share from their competitors and be in extremely good positions when the economy comes out of this slump.

With the increasing numbers of unemployed workers in the United States franchisors have a growing audience and number of potential franchisees. As more and more creative finance tools are uncovered and the federal reserve does everything in its power to loosten the financial markets, the access to capital will begin to come easier. This combination stands to fuel franchise growth at unprecendented levels in 2009 and beyond.

Francorp is the world leader in franchise consulting and development. For more information and analysis on whether a business is suited for franchising, please visit our corporate site where a multitude of free information on franchising and franchise development is available.

Francorp was founded in 1976 and has worked with over 2,000 successful franchise systems from the ground up. Francorp has four seperate companies, Francorp Consulting, Francorp Capital, Francorp International and Francorp Connect. The company was founded by Don Boroian who runs and operates Francorp's four companies to this day.

www.francorp.com

Francorp Client Jimmy John's Honors Disciplinarian

Troublesome Student Makes Good, and Honors Disciplinarian

Peter Wynn Thompson for The New York Times
James J. Liautaud, right, founder of Jimmy John’s sandwich shops, with James Lyons, who was the dean of discipline at his high school, Elgin Academy in Illinois.
By DIRK JOHNSON

Published: December 30, 2008
ELGIN, Ill. — In the early 1980s, James J. Liautaud was a trouble-making student at Elgin Academy who ranked near the bottom of his high school class. He drank beer. He smoked cigarettes. He skipped class.

Alex Romanovsky/DLA Architects
Mr. Liautaud donated $1 million to his alma mater and insisted that the Liautaud-Lyons Upper School bear Mr. Lyons’s name.
Teachers at the academy, a private prep school, grew so exasperated with his antics that they finally voted to expel him. But the mischievous student had an unlikely defender: the dean of discipline.
The dean, James Lyons, recognized the rebellion as insecurity, and saw what others did not — a student from a financially struggling family, trying to fit in at a prestigious school among wealthier, more polished peers. The dean, who had a working-class upbringing himself, put his job on the line. “If he goes,” he told the faculty, “I go.”
Mr. Liautaud — better known as Jimmy John, the founder of a sandwich shop empire with some 800 restaurants — came back to the Academy this semester for the opening of a building that bears his name. He gave the school $1 million, with one condition: the building also had to bear the name of Mr. Lyons.
“It’s a real simple deal,” said Mr. Liautaud, 44, explaining the motive for his generosity. “Jim Lyons believed in me.”
On a bluff in this old city on the Fox River, the new building houses 12 classrooms, a theater and a library. The high school is now known as the Liautaud-Lyons Upper School.
John Cooper, the head of the school, said educators everywhere could tell stories of dismal students who turned out to be successful in business or the arts. But not many send such a gift.
“He called me up out of the blue and said, ‘Hey I’ve decided to give you guys a million bucks,’ ” Dr. Cooper said of Mr. Liautaud.
At first, Mr. Liautaud wanted only Mr. Lyons’s name on the building. But the school told the sandwich king that it wanted to use his name, too, since his story would inspire many students. There are still a few teachers around who remember Mr. Liautaud and his wild ways.
“It’s all in the permanent record,” Dr. Cooper said, smiling.
A big man with a streetwise charm, Mr. Liautaud delivered the commencement address last year, wearing a T-shirt, blue jeans and cowboy boots. He implored the students not to emulate his own academic and behavioral missteps.
Among students at Elgin Academy, Mr. Liautaud is regarded as something of a hero. One of them, Christopher Theodorou, 18, said he ordered food from a local Jimmy John’s restaurant for seven straight days after learning about the donation, a gesture of pride and gratitude.
“And besides,” Mr. Theodorou said, “it’s delicious.”
Mr. Lyons, 74, now retired, said he had spent many hours in the company of young Mr. Liautaud, often because he had violated some rule.
In those days, a disciplinary dean had a little more leeway, and Mr. Lyons was not afraid to capture a boy’s attention by giving his arm a bit of a squeeze. “You wouldn’t get away with any of that stuff today,” he said.
But he also had a gentleness that won over the troubled boy.
“I would just listen,” said Mr. Lyons, who learned that Mr. Liautaud’s parents were going through hard financial times while their son was in school. “He was able to confide in me. He was a pretty good kid. He was just struggling to find out who he was.”
The two men have stayed in touch. They got together for dinner just before Christmas. “You have a lot of students who become successful,” Mr. Lyons said. “But this is one who said thank you.”
Mr. Liautaud said he had “acted like a jerk” at Elgin Academy.
“I was at this fancy school and I felt out of place, so I rebelled,” he said. “But Jim Lyons put his arm around me. He cared about me. He’d say, ‘Jimmy, don’t say that; it’s not classy.’ And he’d tell me I could do whatever I wanted in life. He told me that a lot. And by the time I was a senior, I started to believe him.”
He made it through high school, but Mr. Liautaud said he was not exactly college material. “I didn’t have the grades, and my dad didn’t have the money for tuition,” he said.
He had always wanted to start his own food business. The financial picture at home improved enough that his father offered him a deal. He would lend the young man $25,000 to start a restaurant business. If he failed, he would have to join the Army.
Mr. Liautaud’s business model was to go to college towns and deliver inexpensive food to dormitories. Most restaurants in those days refused to deliver to dorms. He started his first restaurant in Charleston, Ill., near Eastern Illinois University. He now has stores throughout the country, but mostly in the Midwest and Southeast.
With his success, Mr. Liautaud could live in any fancy neighborhood he chose. But he and his wife and two small children live in the central Illinois university town of Champaign.
“You can’t forget where you came from,” he said.
The officials at Elgin Academy are thankful for that. Mr. Lyons, who said he was humbled by the gift, initially felt uncomfortable about having his name on the school building. But he liked the notion of linking a student’s name with an educator’s.
“We believed in each other from the start,” Mr. Lyon said. “And we never gave up on each other.”

McDonald's urging franchisees to oppose card-check bill Email warns of dangers of pro-union legislation; 'will impact the McDonald’s system'

McDonald's urging franchisees to oppose card-check bill Email warns of dangers of pro-union legislation; 'will impact the McDonald’s system'
By David Sterrett


December 8, 2008 1:29 PM ET(Crain’s Chicago Business)—McDonald’s is mobilizing its U.S. restaurant owners to fight a measure in Congress supported by President-elect Barack Obama that would make it easier for workers to unionize. In a Nov. 25 memo, McDonald’s USA President Don Thompson urged 2,400 franchisees to “contact your U.S. senators and representatives to oppose” the Employee Free Choice Act. The EFCA, or “card-check” bill, would enable unions to organize a workplace by obtaining the signatures of a majority of workers on authorization cards. Current law requires secret ballots. In addition, the legislation would establish a bargaining process that could lead to binding arbitration for labor contracts. Mr. Thompson warns franchisees of the “gravity of the issue,” saying the legislation, “if enacted, will impact the McDonald’s system.” Binding arbitration, he adds, would result in worker contracts “being written by government-appointed arbitrators who are not familiar with our business and don’t have long-term accountability for the decisions they make.” With more than 600,000 U.S. restaurant workers, many earning less than $10 an hour, the chain makes an attractive target for union organizers. Unionized employees could demand higher pay and stricter work rules in McDonald’s kitchens. “This bill is a huge threat to fast food and has the ability to impact the long-term health of the industry,” says Rick Berman, a lobbyist in Washington, D.C., for the restaurant industry. Oak Brook-based McDonald’s has formed an internal “response team” to help franchisees “actively participate in the opposition to EFCA,” Mr. Thompson’s memo says. The company also is a member of the National Restaurant Assn., which, in turn, belongs to the Coalition for a Democratic Workplace. The latter group is running ads saying the card-check bill would inhibit job growth. As it fights the bill, McDonald’s must take care not to antagonize customers who may belong to or support unions. It also needs to maintain good relations with Mr. Obama and the new Democratic power structure in Washington. The company’s political action committee—which received contributions from top executives and hundreds of franchisees—distributed $197,000 to candidates during the past election cycle, government records show. As of Oct. 15, 65% of McDonald’s contributions had gone to Republicans. The remaining 35% went to Democrats, the highest portion McDonald’s PAC has given to that party since at least 1980. Mr. Thompson personally contributed $29,500 to Mr. Obama and supporting groups. McDonald’s CEO James Skinner contributed $19,800 to Republican candidate John McCain and his supporting organizations. In a statement, McDonald’s says it is “neither anti-union nor pro-union,” but declines to comment further. Unions have been almost nonexistent in fast food in the past 25 years. Labor made numerous attempts to organize McDonald’s employees in the 1970s without success. Mr. Thompson tells franchisees to reach out to employees to “build a more confident and committed team.” Removing the secret ballot requirement would have a particularly strong effect on the fast-food industry because of its high turnover rate and large percentage of young workers who may be more easily pressured by co-workers to sign union cards, Mr. Berman says. Starbucks employees have had some success organizing in the past four years with the Industrial Workers of the World. The union represents a small number of employees in six cities, including Chicago. “We would be thrilled to have an opportunity to work with McDonald’s employees on organizing,” says a spokesman for the Cincinnati-based union.
Write to the editors at fw_editor@financialweek.com.

Great Article By Brian Scudamore, Founder of 1-800 Got Junk

December 2008 Franchising World
It is critical to build a foundation of strong systems and support that will set franchisees up to be profitable. By Brian Scudamore

Successful franchisors have found the last few years to be very rewarding. A quick look at a few industry statistics shows just how significant franchising is to our economy.

Research released earlier this year by the International Franchise Association found that in the United States alone:
• Small franchised businesses generated more jobs between 2001 and 2005 than several of the nation’s major economic sectors.
• During that period, franchising expanded by over 18 percent, and its direct economic output increased by more than 40 percent.
• The franchise industry in 2005 included more than 900,000 establishments generating 4.4 percent of the U.S. private-sector economy.

Yet despite the booming nature of the industry, many established franchisors have more sobering thoughts in their minds: the economic turmoil that has defined the last half of 2008. Not exactly a fortuitous environment for a franchisor poised to cross the threshold of 100 units. So what does a franchisor do to stay on target for a new level of growth, particularly in an economic downturn? There are five common mistakes franchisors planning to grow beyond 100 units must avoid. However, given the current economic conditions, here’s a colossal sixth mistake that is critical to address today: Letting the economy hold you back

Times of economic turmoil are actually some of the best during which to focus on growth. Maintaining the success and profitability of existing franchisees becomes more vital than ever before, which means concentrating on strengths–the systems that helped build the company from infancy to establishment. What better example for a potential franchisee than franchisors that showcase their top performers? Identifying and cultivating best practices will “wow” the right candidates and help you award more franchises, despite the economic picture. In addition, the top achievers in any franchise system become role models for those franchisees who aren’t yet performing at their peak. Focusing on alignment and best-practice sharing will strengthen the entire system and help boost the results of under-achievers. The spinoff benefit is that this is a very attractive and efficient franchise system for a prospective franchisee. Now here are the five common mistakes franchisors seeking to grow beyond 100 units should avoid. Lacking vision

A vision is a compelling, crystal-clear picture of the franchise in the future. It defines every element of an organization’s success and guides franchisees and employees toward common, realistic goals. Vision is the most important leadership tool a franchisor can master because it charts a clear path to successful growth. While many entrepreneurs keep their vision in their heads, either to prevent someone from copying it or because they don’t have enough faith to share it, some entrepreneurs don’t have a vision at all. Lacking vision is a grave mistake, and a surprisingly common one. Even an out-of-this-world business concept can only take a franchisor that has a weak vision, or worse, no vision at all, so far, and certainly not beyond 100 units. Great ideas are really only as good as the vision that guides them. So what does a solid vision look like for a successful franchise looking to grow beyond 100 units? Check your vision against these four criteria:

• Vision must be attainable: Franchisees will invest their livelihood in a solid franchise business with proven systems, but not if the vision for the company is unclear or unrealistic. Employees are the same. They will buy into a great vision, but without a steady guideline of where they’re going, they’ll drift.
• Vision must be well-articulated: A well-articulated vision is one that includes all facets of a business. It is more than ”who will do what by when?” It speaks to the company’s core beliefs and values. It paints a broad and colorful picture about how the business looks, acts and feels at various points in the future.
• Vision must be shared with passion: A vision must be shared with passion, and to as many people as possible: Current and prospective corporate employees, current and prospective franchisees, the media, friends, family, neighbors and so on. Why? The passion with which true vision is imparted will propel the franchise toward achieving it and attract constant interest from others.
• Vision must be revised often: Franchisors do not want to run the risk of becoming complacent, growing too fast, choosing the wrong people or neglecting important systems. A strong vision, reviewed on a regular basis, will ensure the organization is on the right track. Complacency Many successful franchise entrepreneurs reach a point where they say, “Success has come so easily,” and they believe it will continue to be so. Perhaps a phenomenal business concept has catapulted the organization into “mostwatched” status in the media. Everybody wants a piece of the company. It’s a heady feeling for a franchisor which can lead to a premature sense of security. The belief is that the hard work of building out strong systems, hiring great people, and getting the expansion strategy down on paper has been done. The flywheel has momentum. Franchisees are posting record satisfaction scores. Employees are engaged and motivated. This is a peak moment in the life of a franchise. However, a word of caution: it’s also a pivotal moment. All businesses face unexpected challenges. Now is not the time to become complacent, yet now is often the time when many franchisors do. Now is the time to be hyper-vigilant about every aspect of the business. Complacency can be a deadly mistake for successful franchisors poised to transition beyond 100 units. One of the most common indications that a franchise is leaning toward complacency is expanding internationally without performing adequate due diligence. It is always tempting for any business to answer calls for its service or product in a new international market. Franchises today are expanding internationally at a much faster rate than in the past. The common pitfall is believing what worked here will work as well there. Not so. Even the most common expansion markets such as Australia and the United Kingdom, present different cultures, consumers, market trends, economic climates, labor laws, and business expectations. Franchisors must approach international expansion as though devel oping a new franchise business, albeit utilizing the foundations of a strong franchise model, rather than taking the complacent attitude that success here will easily translate into success there.

Growing too fast
Franchising is widely believed to result in fast and easy growth because it uses other people’s money to build out infrastructure. Franchising requires a proven business model, strong systems and the right people–things that take a lot of time to develop. For many entrepreneurs, particularly those who are impatient by nature or who have fallen into complacency through their success, it’s easy to make the dire mistake of growing too quickly. To ensure the franchise system is on target for healthy, sustainable growth, a franchisor must filter everything through the following two-part question: Is there an appetite in the market that warrants the business growing beyond 100 units and can the existing infrastructure sustain such growth? Franchisors must understand with absolute clarity why expanding beyond 100 units is the right move for the brand and for the franchise system. It is critical to build a foundation of strong systems and support that will set franchisees up to be profitable. Happy, successful franchisees paint a positive picture of the entire system, which will attract new candidates and foster growth when conditions are favorable.

Choosing the wrong people
Failing to hire the right people to grow a franchised business beyond 100 units can be a fatal mistake. Hiring the right people pertains to all areas of a franchise system: the franchisees, the franchise leaders, and all employees. Franchisors must never compromise on the quality of their franchisees. A helpful way to ensure this doesn’t happen is to get used to the concept of awarding, rather than selling franchises. An organization seeking to attain critical mass must avoid bringing on franchisees merely to hit their quota. It is not enough for a candidate to bring a lot of money and a business degree into the interview room. Dig deep to discover if the candidate has the business drive, experience, stamina and passion to go along with their investment and education. Due diligence is significant with franchisees because they are a lot more difficult to exit than the wrong employees are. In the early days of a franchise, enthusiasm may be impetus enough to motivate employees to succeed and grow. Many, including budding leaders, learn the ropes along the way, growing up with the business. But once a franchise has reached a size of close to 100 units, it’s time to shop for the best–the experienced leaders with a track record of building companies of substantial size. Too many entrepreneurs hold back for fear of letting a faithful, hard-working leader go, when the best solution is to allow the leader to thrive in another start-up and make room for the star who can commandeer the franchise to new levels of growth.

Inadequate systems
It is a deadly mistake for franchise organizations to consider significant growth without proven, established systems. Strong systems are the operational building blocks that grow the business. By the time most franchises are planning to expand beyond the 100-unit mark, the time for trial and error of major systems has passed and the era of proven, scalable systems has arrived. On the path to building a business, there are so many valuable lessons. Wellknown professional sales coach, Jack Daly says: “Inspect what you expect.” It’s a simple, catchy phrase that serves as a reminder to always stay on top of company systems. The mistake of complacency often leads to issues with missing systems, but inspecting what you expect ensures those missing systems are caught and tightened in a timely manner. To facilitate growth, successful franchises must have a process to uncover deficiencies. Systematizing the process of inspecting is simple. It involves creating a list of the key, measurable components of the business, then making people accountable for achieving and monitoring them.

If you’re looking to grow beyond 100 units, you’re at a very exciting time in your business. I remember when I awarded the 100th 1-800-GOT-JUNK? franchise. It was a goal I’d had my sights on since the inception of the business and it was a huge achievement for me. Today, 1-800-GOT-JUNK? has more than 275 franchises across North America and Australia, and I have my sights set on 500 units. But all of the common mistakes I outlined here still apply to my business even today. Maintaining the health of the existing system while pursuing expansion can be challenging. However, with laser focus on the foundational pillars of any business: vision, people and systems, the pitfalls can be avoided and the results are very rewarding.
Brian Scudamore is founder and CEO of 1-800-GOT-JUNK? He can be reached at bscudamore@1800GOTJUNK.com  .

Francorp Continues to Expand

Francorp Hires New Franchise Analyst
Francorp brings on new staff.

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Refer to a friend
2008-11-13 17:16:13 - Francorp is the world leader in franchise consulting and continues to help Francorp clients grow through difficult economic times.
Francorp is Pleased to Announce the Hiring of Mr. Aaron Sejud.Francorp recently hired its third new employee this month. Aaron Sejud comes to Francorp with a great deal of management and business background. Aaron will be a new franchise analyst with Francorp Consulting. Francorp now has a staff of almost 60 people that are full time franchise consultants and development
professionals. Francorp is acknowledged as the industry leader in franchising consulting and development around the world.

Francorp's main operations are headquartered out of Chicago, IL but the firm has offices in 14 different countries around the world. Francorp has worked with over 2,000 successful franchise operations and developed many of the world's most successful franchise systems.Francorp's business has grown 7% since last year despite a difficult economic environment. The increased success of Francorp's clients has driven continued development of the Francorp infrastructure.Francorp is excited to have Mr. Sejud as a new addition to the team and looks forward to continued client success in the franchise business.

Don Boroian has built and designed Francorp to support business owners in taking their business and company into the franchise market. The structure of Francorp was purposely designed to support all kinds of entrepreneurs in rapid expansion strategies.

www.francorp.com

Francorp Attends The Restaurant Finance and Development Conference in Las Vegas, NV

FRANCORP CAPITAL

Francorp has an entire division of the company that is focused on financing for restaurants and small businesses - Francorp Capital. Francorp's Vice President, Mr. Senn Sodweidel attended the show and focused on several different forums to discuss financial options in today's economy. With the current financial crisis, finding capital for new businesses and new franchises is one of the most critical and foremost issues to be aware of right now.

Francorp Capital was formed with the purpose of supplying Francorp clients franchisees with the financing they need to open their operations. With the current economic and financial climate it takes some creative methods to get the financing for new franchisees. Francorp is on the front line of working with financial groups and banking institutions to organize and arrange for Francorp clients to get the newest and most current techniques and strategies for getting funding for their buyers. Here is an overview of the conference and what was included in the discussion forums.

The Restaurant Finance & Development Conference is the largest industry event that is exclusively focused on the finance side of the restaurant business. Designed for multi-unit restaurant operators and senior executives, the conference has become the “must attend” for so many in the industry. Don’t miss your chance to be part of this networking and dealmaking event!
Attend this year's Restaurant Dealmaker’s Event.
Register Online Today!

Capital—The Restaurant Finance & Development Conference is the restaurant industry's top financial forum for growth-minded restaurant company owners and executives, to meet with banks, finance companies, brokerage firms, real estate developers, investment bankers and other financial intermediaries—with a focus on the financing and deal-making opportunities available in the restaurant industry. This conference is the restaurant industry's premier business networking event and also offers expert speakers on the "business side" of the restaurant industry and what it takes to succeed in today's business environment.
Growth—The Restaurant Finance and Development Conference is where attendees meet and network with the many financing sources available to national, regional, chain, and independent multiple-unit restaurant operators. Representatives from banks, finance and leasing companies, real estate syndicators, brokerage firms and investors specializing in restaurant financing will preview their 2009 financing programs during the Finance & Development Mall. You'll meet with lenders and investors to discuss your financing and development needs. In addition, the Mall provides an opportunity for growth-minded operators to preview multi-unit franchise and joint venture opportunities and also find other financial services. The conference offers financial programs which feature practical financial and development topics presented by restaurant finance experts. The conference's professional atmosphere attracts the top restaurant operators and financial dealmakers in the world.

Who Should Attend? Owners and operators of multi-unit restaurant chains including senior restaurant executives in finance, accounting, development, legal, real estate and franchising. Also invited are consultants, investors, brokers, bankers, developers, accountants, attorneys and financial dealmakers who serve the restaurant industry.
Contacts—The top restaurant operators in the nation attend the annual Restaurant Finance & Development Conference. Attendees have the opportunity to learn from America's top financial minds about business strategy, mergers, acquisitions and investment. The nation's leading growth restaurant companies including franchisors, franchisees and multi-unit independents, send representatives to the conference each year. Many companies hold their annual planning meetings at the conference. Restaurant owners and executives make deals, find financing and re-charge their professional batteries at this conference. This is the one restaurant industry event of the year that you can't afford to miss! The networking at the Restaurant Finance & Development Conference is better than any other restaurant industry event you'll attend!

http://www.francorp.com/

Francorp West Coast Franchise Breakfast

Francorp will again hold a west coast franchise breakfast for its clients before the West Coast Franchise Exposition. The purpose of the Francorp breakfast is to coach and discuss franchise tradeshow strategies. The West Coast Show is one of the most attended and largest franchise expositions in the country. Most of the U.S.'s largest franchise systems will have a significant presence at this show. It is imperative that Francorp clients get the support and guidance they will need at these shows to impliment and execute the franchise systems we have built for them.

For more information on the Francorp breakfast on Friday 11/07 please contact us via email or phone, 800-372-6244 or cconner@francorp.com.

If you are interested in information on the franchise expositions or would like to see the franchise companies offerring franchises now, register for free under Francorp before November 6, 2008 go to www.wcfexpo.com enter in source code GPEX8.

IHOP Opening In Canada

SOURCE: IHOP

Sep 15, 2008 16:05 ETIHOP Opens First Location in Ontario, Canada
Brand Continues International Expansion; Four New International Locations Planned for 2008

GLENDALE, CA--(Marketwire - September 15, 2008) - IHOP, one of America's favorite restaurants for breakfast, lunch and dinner, today announced the opening of its first franchise restaurant in Ontario, Canada, extending the iconic fifty-year old brand into a new international region. The first IHOP in Eastern Canada opened in Niagara Falls, Ontario on Sept. 13.

The new restaurant marks IHOP's 13th location in Canada; there are currently 12 IHOPs throughout the province of British Columbia. Franchisee Pancakes Canada Limited, controlled by long time Ontario restaurant operators the Alfieri Group, opened the restaurant and has an agreement to develop two additional IHOP restaurants over the next five years, including a portion of Niagara Falls and the city of Barrie, Ontario, Canada. Pancakes Canada Limited is a new franchisee to the IHOP system and the Alfieri Group possesses more than 55 years of restaurant operations experience, with successful casual Italian themed restaurant operations also located in Niagara Falls, Ontario.

Earlier this year, IHOP opened its second franchise restaurant in Mexico in Mexico City, and today announced that two more restaurants are scheduled to open in the fourth quarter of this year in the Mexican cities of Monterrey, Nuevo Leon and Hermosillo, Sonora, respectively. These new restaurants will mark the third and fourth IHOP restaurants to open in Mexico.

"The expansion of IHOP into Ontario and the continued development in Mexico by experienced restaurant operators demonstrates the appeal that IHOP holds for consumers and entrepreneurs," said Des Hague, President, IHOP Restaurants. "As an American icon celebrating 50 years, IHOP's continued international growth is an integral part of our strategy to maximize franchise development and expand the brand's accessibility to an increasing number of new guests every day."

ABOUT IHOP

For 50 years, the IHOP family restaurant chain has served its world famous pancakes and a wide variety of breakfast, lunch and dinner items that are loved by people of all ages. IHOP offers its guests an affordable, everyday dining experience with warm and friendly service. The first IHOP opened in Toluca Lake, Calif. in 1958, and as of June 30, 2008, there were 1,361 IHOPs in 49 states, Canada and Mexico. IHOP restaurants are franchised and operated by Glendale, Calif.-based IHOP, a subsidiary of DineEquity, Inc. (NYSE: DIN).

Forward-Looking Statements

There are forward-looking statements contained in this news release. They use such words as "may," "will," "expect," "believe," "plan," or other similar terminology, and include statements regarding the strategic and financial benefits of the acquisition of Applebee's International, Inc., expectations regarding integration and cost savings, and other financial guidance. These statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results to be materially different than those expressed or implied in such statements. These factors include, but are not limited to: the implementation of the Company's strategic growth plan; the availability of suitable locations and terms for the sites designated for development; the ability of franchise developers to fulfill their commitments to build new restaurants in the numbers and time frames covered by their development agreements; legislation and government regulation including the ability to obtain satisfactory regulatory approvals; risks associated with executing the Company's strategic plan for Applebee's; risks associated with the Company's incurrence of significant indebtedness to finance the acquisition of Applebee's; the failure to realize the synergies and other perceived advantages resulting from the acquisition; costs and potential litigation associated with the acquisition; the ability to retain key personnel after the acquisition; conditions beyond the Company's control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting the Company's customers or food supplies; or acts of war or terrorism; availability and cost of materials and labor; cost and availability of capital; competition; continuing acceptance of the IHOP, International House of Pancakes and Applebee's brands and concepts by guests and franchisees; the Company's overall marketing, operational and financial performance; economic and political conditions; adoption of new, or changes in, accounting policies and practices; and other factors discussed from time to time in the Company's news releases, public statements and/or filings with the Securities and Exchange Commission, especially the "Risk Factors" sections of Annual and Quarterly Reports on Forms 10-K and 10-Q. Forward-looking information is provided by the Company pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. In addition, the Company disclaims any intent or obligation to update these forward-looking statements.

Contact:
Jennifer Pendergrass
IHOP
818-637-3603

Hotel Franchises

Streetwalker: Room At The Inn
03.06.00
Room at the Inn

IT HAS BEEN HEARTBREAK FOR HOTEL stocks lately. Fearing overcapacity generated by a recent room-building boom, investors have pushed the sector down 15% over 12 months, even as the S&P 500 rose 14%.If the fears prove true, Mark Greenberg, portfolio manager at the $600 million Invesco Leisure Fund, sees a prize in hotel manager and franchiser Marriott International. Shares of the hotelier ($8.7 billion in 1999 revenues) have fallen 11% in the past year. Marriott mar (nyse: mar - news - people) is trading at 20 times trailing earnings, cheaper than the S&P 500's 29.Unlike most hotel companies, Marriott's profits, which are growing 15% a year, come from managing and franchising hotels under long-term contracts--not owning them. These fees, which Marriott takes as a percentage of hotel revenues, provide steadier earnings sources than hotel owners enjoy. Sister company and hotel-owner Host Marriott must deal with high fixed operating costs and earns profits out of what's left over. So changes in room rates or occupancy have a bigger impact on Host Marriott's bottom line, making it more vulnerable to business swings than hotel managers and franchisors are.--John Gorham On the Defense WALL STREET DECIDED IT DIDN'T LIKE General Dynamics when it was just in the defense business, a beaten-down sector. Then the company diversified in mid-1999 by acquiring corporate jetmaker Gulfstream Aerospace for $5.3 billion, but investors still didn't like the stock. They suspected that the high-end business-jet sector had peaked. When the company beat analysts' estimates by three cents a share for the fourth quarter, investors yawned. General Dynamics gd (nyse: gd - news - people) is down 45% since last May.But Joseph Nadol, a Donaldson, Lufkin & Jenrette analyst, says General Dynamics' corporate-jet orders continue to be strong, and Gulfstream already has proved to be the company's most profitable division, furnishing 40% of 1999 operating earnings, pro forma. And there's life left in the defense realm. The Navy is set to rebuild its aging fleet, and the company's industry-leading shipbuilding arm should benefit. At a P/E of 9, the stock's cheap. --Christopher Helman Puff Piece TOBACCO'S LITIGATION NIGHTMARE isn't over yet. A monumental class action is going forward in Florida, which could cost tobacco companies plenty on top of their $206 billion settlement with the states.So Philip Morris, the top player with 50% of the U.S. market, would get hit the worst. Well, don't worry, says Bonnie Herzog, analyst at Credit Suisse First Boston. She thinks the suit won't go anywhere. Meanwhile, Philip Morris mo (nyse: mo - news - people) will continue to romp in its arena.While fewer Americans are smoking, giant Philip Morris keeps gaining market share. Plus, the company is nicely diversified, which rivals can't say. Kraft Foods and Miller Brewing, America's largest processed-foods company and second-largest brewer, generate 40% of revenue. Philip Morris, which has lost half its value over the past 12 months, is cheap, with a P/E of 6. --C.H. Cell Division FOR DRUGMAKERS, GAINING FOOD & Drug Administration approval is the make-or-break issue. For Cell Pathways, some encouraging news from the regulators--that its new product Aptosyn had bypassed an FDA approval committee and was set for final consideration as early as May--has jolted the stock and sparked favorable press coverage. Cell Pathways clpa (nasdaq: clpa - news - people) jumped 300% to $51 since its mid-January FDA announcement.But analysts at Avalon Research Group are skeptical. Early tests of the drug showed it was about as effective as a placebo, though Cell Pathways later reformulated its data and got better results. But Avalon thinks the FDA may not approve it.And it's not encouraging that trials for Aptosyn, which aims to retard colon cancer for those with intestinal polyps, are in combination with an already-approved drug from Roche Laboratories, Xeloda. If Aptosyn is effective, Avalon says, the drug should stand on its own. Short the stock; cover at single digits.

--Michael Freedman

www.francorp.com

The Real VC's Of Silicon Valley

Commentary
The Real VCs Of Silicon Valley
Sramana Mitra 04.04.08, 6:00 AM ET

Muhammad Yunus and his Grameen Bank won a Nobel Peace Prize for their development of microlending.
For Silicon Valley's entrepreneurial culture to thrive, we need to create a sort of microequity program for start-ups.
Originally, of course, this is what venture capitalism was about. In recent years, venture capitalists have amassed huge war chests, raising funds that in some cases approach $1 billion. Even so, the number of people in most venture partnerships has stayed relatively modest. You don't have to do much math to realize that such firms are forced to make bigger and bigger investments to generate adequate returns for their limited partners. (If you are wondering why this is the case, read " The VC-Entrepreneur Compensation Disbalance")
That's a problem for first-time entrepreneurs. Of course, the bar has always been high for those trying to start out. Alex Osadzinski, a general partner at Trinity Ventures, notes that most VCs are reluctant to fund a first-time CEO who hasn't had a key position in a previous start-up. "If this is your first CEO job, and the first time in a start-up, you're putting a steep learning curve in your way," warns Osadzinski. His advice: become the technical founder in someone else's company or vice president of marketing.
Very well. But that's a bucket of cold water for any entrepreneur with a burning passion. Besides, history is full of counterexamples--look at Steve Jobs or Bill Gates. Larry Page and Sergey Brin were PhD students at Stanford University--their lack of experience didn't stop Google from taking root. Similarly, Mark Zuckerberg came completely from left field to create the Facebook phenomenom.
The truth is, start-up-land is littered with mavericks, iconoclasts, drops-outs and misfits.
"It definitely makes it easier to raise money if you're a serial entrepreneur," concurs Venky Harinarayan, chief executive of Kosmix, a search engine start-up. "That said, the prevailing VC wisdom is that serial entrepreneurs can get you great returns, but the franchise companies are created by first-timers." Those would be Microsoft, Google, Apple, Facebook and dozens of others.
So how did these legendary entrepreneurs navigate their ways through the maze?
Lacking a better alternative, first-time entrepreneurs often turn to friends and family. Bill Gates funded Microsoft with family money.
It's a dangerous path, though. If the start-up hits tough times, relationships can be strained. Some say that taking money from friends is the surest way to lose them. Having traveled this path in my early entrepreneurial years, I would say that it is to be avoided at all costs.
But what is the alternative, especially if VCs are becoming scarce players in this part of the financing ecosystem?
So-called "angels." While VCs primarily invest other people's money, angels invest their own. An entrepreneur working on a fledgling idea needs investors who not only provide valuable business advice but also connect the dots to make business development partnerships happen, help recruit key team members and help move the venture from concept to a fundable company. Angels tend to have the operational background necessary to play such a role.
In Silicon Valley, "super-angels" like Ron Conway, Reid Hoffman, Ram Shriram and Jeff Clavier are providing seed capital. There are even formal efforts to institutionalize this kind of financing: The dinner club investment group called the Band of Angels is the most organized in Silicon Valley.
Some angels offer more value than others. Don Hutchison is one who is widely respected. "Generally I'll provide less money and more advisory support while likely attracting others to the deal as well," Hutchison says. In many ways, this is a much better value proposition for entrepreneurs, especially those taking their first swing in this game.
Some angels have even started to institutionalize their investments by raising small funds focused on seed-stage investments. Jeff Clavier's new fund is $12 million, focused solely on seed. Dave Whorton has a $50 million fund. Stewart Alsop, a former VC from NEA, has raised a $75 million fund to invest in early-stage deals.
However, cracks are developing in the angel ecosystem. Super-angels are adopting a spray-and-pray investment strategy, investing in lots of deals. Many individual entrepreneurs aren't getting enough of their time or mentorship.
In other parts of the world, seed investment remains a huge barrier to entrepreneurship. In India, entrepreneurs are severely hindered by the lack of "mentor capital." A few small funds have come together to address the gap, notably including Mahesh Murthy and Praveen Gandhi's Seed Fund. Entrepreneurs in India would like to work more closely with the many successful Indians in Silicon Valley who have the expertise to offer them mentoring, connections and capital, but the bridge, as of yet, is wobbly at best.
So, if you are an entrepreneur, especially a first-time entrepreneur, you need to look for the "real" VCs who are willing to take risks and invest their time in mentoring you, not those big names that the term venture capital normally conjures.
In capitalism, gaps generally get spotted and filled. This one--and the entrepreneurs in it--is still waiting.
Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies and writes a business blog, Sramana Mitra on Strategy . She has a master's degree in electrical engineering and computer science from the Massachusetts Institute of Technology.

http://www.francorp.com/

Ask an Expert

Ask An Expert
Dealing With Expansion, Marketing and More
Chris Greendale 08.19.08, 3:10 PM ET

Question: I have an 11-year-old, one-location, profitable retail business that I would like expand faster than my private equity will allow. I think it is a very good franchise model. Your advice on using franchising as a growth vehicle and how to proceed?

Answer: Congratulations on your success thus far. My suggestion would be to open another one or two stores to see how successful they are before seeking outside financing to accelerate expansion. You have no doubt been successful as you have been hands-on in your store. With new stores, you depend on store managers--this will be a big change for you. Good luck!
Want to ask Chris a question? Go to the Forbes.com Small Business Exchange and select his name from among our cadre of experts.

Question: How do I market my company online, for free?
Answer: Use the power of your network. Get all your connections--partners, investors, friends, family--to link to your Web site. Have them include a description of your company using the most important keywords on the linking page. Most search engines count the number of links pointing to a Web site to score the relevance of a result. Thus, if many other Web sites point to yours, you'll be high up on Google (nasdaq: GOOG - news - people ), MSN, Yahoo! (nasdaq: YHOO - news - people ), etc.

If you have specific products to advertise, then paying someone, like Google or a few comparison-shopping engines, is cheaper than free--in that the paid services have significantly higher NPV [net present value] than any revenue that can be derived through free methods.
Question: I have a few friends who are willing to sell ads for my Web site. It will be a commission-only basis, but how do I set up a tax system for them?

Answer: Please consult a tax attorney. This is potentially complex, and it varies from state to state.

Question: My wife and I started a telecom reseller's business three years ago. We are profitable and this year we are looking at $1.2 million in revenue with a 35% profit margin. We need more funding to expand or acquire a company. What should be the best approach for getting financial help?

Answer: You might be a candidate for an early stage venture capital firm. If you don't know of any such firms, there are boutique investment bankers around who could introduce you to a couple of firms to see if this is indeed true. The banker will of course extract a small fee on successful completion of funding.

Chris Greendale has 25 years of experience in the software and technology services industry. Co-founder of Cambridge Technology Partners; early stage investor in Siebel Systems; former managing director at Internet Capital Group (nasdaq: ICGE - news - people ); former chairman of Breakaway Solutions, where he oversaw the company's initial public offering. Now on the boards of Kodiak portfolio companies, including Astadia, GlassHouse Technologies, HiWired, Kadient, Recordant, uLocate and Vettro.

In-Home Care Aides Find Demand For Services Is Booming

In-home care aides find demand for services is booming
11:24 AM CDT on Tuesday, September 2, 2008

By BOB MOOS / The Dallas Morning News bmoos@dallasnews.com
When Gertrude Hurd returned home from the hospital after a fall, she relied on in-home caregivers to fix her breakfast, remind her about her medications, tidy up her place and help with other household chores.
"I've graduated from a wheelchair to a walker in just a month," boasted Ms. Hurd, an 84-year-old Lewisville resident, who added that her Home Instead aides share the credit for her recovery.
Mildred Krueger has had the same aide from Right at Home for seven hours a day, four days a week since 2006. The two women have become good friends and enjoy baking and cooking together.
The 87-year-old Dallas resident likes having someone around her house who knows her well enough to anticipate her needs. "I'd be in a nursing home otherwise," she said.
As more seniors decide to "age in place" and remain out of nursing facilities, they're increasingly turning to professional in-home aides to help with everyday living.
Some 11,000 licensed home-care businesses served 7.6 million people last year, according to the American Association of Homes and Services for the Aging. And in-home aides are projected to be the second fastest-growing job over the next decade – the government forecasts a 50 percent increase, from 767,000 to 1.2 million jobs.
Though "mom and pop" businesses have dominated home care, entrepreneurs have propelled the recent growth by opening franchises to capitalize on the expected doubling of the older population by 2030.
The industry includes established brands such as Home Instead Senior Care and Comfort Keepers as well as up-and-comers like Always Best Care Senior Services and Right at Home.
"Nothing is recession-proof, but home-care franchises are faring well in the slow economy because the elderly need help in both good times and bad," said Alisa Harrison, a spokeswoman for the International Franchising Association.
The nonmedical in-home caregivers don't do physical therapy, as home health aides do. Rather, they concentrate on personal care, such as bathing, dressing or just keeping someone company.
Ms. Hurd's aides work for the Home Instead franchise, which Gianna Loftis opened in Denton early this year.
Ms. Loftis got into the field partly because of her experience in caring for her father after his cancer diagnosis. She had been a financial consultant and launched her business after visiting for months with Home Instead's executives and other franchisees and after training at the company offices in Omaha.
"I'm now putting in 70-hour workweeks," she said, "but I don't know of another business where your clients tell you that you're a gift from God."
Franchises
Franchises appeal to people who want to start their own businesses but also prefer to reduce their risk. Franchisees follow a proven business plan and can call on company staff for advice when problems pop up, Ms. Harrison said.
Home-care and other service-based franchises are particularly attractive to entrepreneurs because they don't require as much capital to open as brick-and-mortar franchises, such as restaurants.
Still, home-care franchise owners say initial franchise fees and other start-up expenses can amount to between $50,000 and $100,000.
Harley Cohen, a financial planner before buying a Right at Home franchise in Dallas in 2006, also recommends setting aside enough money to cover one to two years of personal expenses.
"Your first goal is to break even and meet your business expenses and employees' salaries," he said. "Only then do you think about paying yourself a salary. For me, it took 16 months to get a paycheck."
Marcus Gardner, who launched an Always Best Care franchise in June, keeps his overhead down by operating a "virtual office" with a Grapevine mailbox. He and his two employees work out of their homes – or on the road – and communicate by computer.
"My time is better spent visiting hospitals and senior-living communities and introducing the business," he said.
Michael Newman, president of Always Best Care, said the Web-based tool is popular with new franchisees because it lets them manage their business until they can lease office space,
The company charges franchisees a royalty fee of 5 percent of their gross revenue.
Mr. Gardner considers it a fair exchange for the training and support he receives from the home office in Sacramento, Calif.
"Shortly after I opened, a company trainer rode with me for a week and coached me on sales calls to hospitals, nursing homes and doctors' offices. It was quite an education," said Mr. Gardner, who has a civil engineering degree.
Growing industry
The two biggest challenges for any home-care franchisee are cultivating referral sources, such as case managers and social workers, and hiring and supervising caregivers, Mr. Cohen said. On any day, his agency has 40 to 60 aides on duty.
Licensed agencies routinely screen their job applicants, said Anita Bradberry, director of the Texas Association for Home Care, an industry group. Besides checking references, the agencies perform criminal background investigations.
"We also do a gut check," Mr. Cohen said. "If we can't see someone caring for one of our own family members, we don't hire. It's not worth the risk. A couple of bad apples can destroy your business."
Experts say competition among home-care agencies has become fierce in Dallas and other metropolitan areas. Dallas County has 322 licensed agencies, the second-highest concentration among Texas' most populous counties.
"The competition can be difficult for the franchisees, but it should be good for consumers because it will drive up quality and hold down prices," Ms. Bradberry said.
Most seniors pay out of pocket or use long-term care insurance to pay for in-home care, though some on lower incomes qualify for help from Medicaid. Private home care costs an average of $18 per hour nationwide and $17 in Dallas, according to a Genworth Financial survey of long-term care prices.
Ms. Bradberry sees no letup in the industry's steady growth.
"If everyone had three daughters who lived around the corner and checked in every day, I might think otherwise," she said, "But most of us aren't that fortunate."
WHAT TO ASK
The 10 questions to ask before hiring a home care agency:
1. How long have you been in business?
2. Is your agency licensed?
3. Are your caregivers employees, and are you withholding taxes for them?
4. Is your agency insured?
5. How do you screen your caregivers?
6. What are your fees?
7. How do you match a caregiver with a client?
8. If I'm unhappy with a caregiver, how will you find a replacement?
9. How do you monitor your caregivers?
10. Will you provide references I can call?
SOURCE: Dallas geriatric care manager Molly Shomer