Green Guilt

Indulge Me: Market in “Green Guilt” Booming, If Nothing Else Is
Posted by Keith Johnson
Wall Street is tanking, home prices are flying south, and jobless claims are on the rise. Are there bulls anywhere? Sure there are—in the market for “green guilt.”
Early guilt markets (Wikipedia)
The Washington Post reports today on one of the few markets enjoying happy times, the market for voluntary “carbon offsets” that let people pay someone else to curb their emissions of greenhouse gases. The offset market, says the WaPo, is not only getting bigger, prices are going up:
In other words, when nearly everything seems to be selling for less, thousands of individuals and businesses are paying more for nothing, or at least nothing tangible.
Part of the reason, the WaPo says, is that the kind of people who have money to spend on “luxuries” like expatiating green guilt haven’t yet been slammed by the financial crisis. That’s true of high-profile green activists, too—actress Jamie Lee Curtis snagged one of the first five hydrogen-powered cars in Los Angeles, even though she admitted higher gasoline prices hadn’t dented her tax bracket or influenced her decision.
Odder is the continued enthusiasm for offsets when government watchdogs have been warning all year that it is sometimes a sketchy market. The Federal Trade Commission held hearings earlier this year to examine questionable advertising claims about carbon offsets. Last week, the General Accounting Office released a report criticizing “the limited assurance of credibility” in the voluntary market for offsets. The GAO report also questions how many projects would have been carried out anyway, regardless of the extra financing brought in by the offset market.
And that issue hounds more than just people trying to justify a guilt-free weekend in Vegas. At a time when the scope and seriousness of China’s push into clean energy is becoming apparent, for example, how much longer can reluctant European economies pretend they are underwriting China’s energy transformation and cleaning up the global environment?

Holding Onto Customers in a Tough Economy

Keeping Customers in a Crummy Economy
With recession expectations growing, some companies are taking extraordinary steps to hold on to customers
by David Bogoslaw
Even before the U.S. economic outlook darkened as the gravity of the financial crisis came into focus, companies started to get more aggressive in their attempts to hold onto old customers and attract new ones. Telephone companies' offers for two months of free service and reduced rates, discounted gym membership renewals, and generous gift cards from high-end department stores all underscore a pervasive fear on Main Street: With the uncertainty around the credit seize-up, consumers may be digging in for a long hibernation.
In upstate New York and other rural communities it serves, Frontier Communications (FTR) is even sending sales representatives door-to-door to persuade customers to lock in another year's worth of service at a discount rate. Those visits are effective where customers are often two-income families with busy lives, and many of those drop-ins are scheduled in advance, says Brigid Smith, a company spokeswoman. "We're sensitive to what this financial crisis means to them and we have to communicate with them," she says.
It's not only because of the gloomier economic picture that Frontier and other telephone companies are trying harder to hold onto customers. Ongoing attrition of users to more advanced technologies, like wireless, and poaching by cable companies have also called for more aggressive retention efforts. Verizon Communications (VZ) estimates an average loss of 8% to 9% of its customer landlines a year over the past few years, most of them going exclusively wireless or switching to service from a voice over IP (VOIP) or cable company, says spokesman Bill Kule. The barrage of competition from cable operators was a key impetus for Verizon's fiber-optic service, called FiOS, which bundles voice, high-speed Internet, and television service together into a triple-play package, which had been connected in more than 7 million households by the end of June.
Verizon has long been pitching promotional offers at "customers on the precipice of leaving," says Kule, but those became more urgent after the company saw bigger than expected departures of both broadband and voice customers during the second quarter. Since July, it's been offering all three services for the price of two to keep customers thinking about switching and to win back residential and small business customers who have already left, says Kule. Verizon is also urging customers to sign up for at least a one-year plan, hoping it will help them stick, he adds.
Sinking Economy…Cable Company Boost?
The tougher economy may have put cable service providers more squarely in the catbird seat, relieving some pressure to offer perks to customers. Their rationale: Subscribers to premium cable channels and pay-per-view events have arguably already chosen to cut their entertainment expenses and trade down—by staying home, says Christopher King, a telco analyst at Stifel Nicolaus (SF).
Long before the financial crisis tripped off new alarms last month, DirecTV (DTV) had initiated a program to retain customers, who sign up for either 18 months of standard service or two years for advanced service with features such as high-definition. "We're always looking at customers who are about to roll off their commitment, and there are groups we do go after with commitment-renewal efforts," using free digital video recorders or HD boxes as incentives, says Paul Guyardo, DirecTV's chief sales and marketing officer.
More often than not these efforts are directed at customers who live in areas where cable competition is more cutthroat. The company also discourages switching by charging early termination fees—generally $150 to $250—that are pro-rated according to how much time remains on a contract.
With a longer and deeper recession looming larger on the horizon, telephone and cable providers will be more inclined to use prices to differentiate themselves from their rivals, predicts King at Stifel Nicolaus.
Tough Task for Car Dealers
For big-ticket items like cars, keeping customers coming requires a more Herculean effort. With larger banks increasingly unwilling to approve car loans even to applicants whose credit scores used to be regarded as stellar, it's up to the manufacturers to risk filling the gap by financing less creditworthy customers, or "buying deep," as auto industry analyst Brett Hoselton at Keybanc Capital Markets (KEY) calls it. Carmakers can also offer a bigger discount so that the remaining cost meets the threshold of 90% of the manufacturer's suggested retail price that financing organizations generally require, he adds.
Car dealerships are starting to create their own incentives by narrowing their profit margins, in some cases giving up the profit they used to make on the financing terms, which can reduce the customer's monthly payments. Dealers are happy just to make a sale, says Jack Sayer, managing partner at Sayer Partners, a consultant to car dealerships and a former car dealer himself.
The best dealers he works with are aggressively contacting current customers three months before their leases or financing contracts are due to expire and preparing them for the tougher challenges of getting financing. For them, retaining customers requires as much outreach to potential financing sources as to the customers themselves. Dealers are now courting the smaller local banks that are still eager for business—banks that dealers wouldn't have felt as confident using in the past, says Sayer. They're also contacting local credit unions, which are typically less aggressive about drumming up new business than banks. "[It gives dealers] another source for financing and it also works in reverse," he says. "These credit unions are sending you customers and they usually have pre-approval of $25,000. This generally doesn't happen with bank customers."
Subscribing to services such as DealerTrak, an Internet-based credit application system, is another way for dealers to expand their lists of potential financing sources. It allows them to submit a customer's application to 1,000 banks all at once instead of faxing it to them individually, says Sayer. He also encourages clients who may have been resistant to using the Internet to make their Web sites more user-friendly, including posting information about customers' financing options.
Seeking Access to Affluent Customers
Health clubs like Life Time Fitness (LTM) seem to be among the most pro-active companies when it comes to customer retention. Life Time eschews long-term contracts and discount offers in favor of more lavish customer service, facilities, equipment, and features like children's centers—replete with computers, basketball courts, and climbing equipment—where parents can securely park kids under 12 while they work out.

"There's more stickiness in the membership base already because of the family component in the membership," says Laura Richardson, an analyst at BB&T Capital Markets (BBT). "The best way to retain a customer is to get them more fully involved in the club, using it as frequently and broadly as possible." (BB&T Capital Markets expects to receive or intends to seek compensation for investment banking services from Life Time in the next three months.)
Life Time is beefing up its customer connectivity program by bolstering its online advantage club, through which members get discount offers on everything from groceries to cellular service to vacation resorts from a network of nearly 100 partners who want access to Life Time's affluent customer base, says Scott Lutz, Life Time's chief marketing officer.
"In a tough economy, people start justifying every spend they make," says Lutz. "We make it easier for you to justify [that expense] because you can only get this discount if you're a member of Life Time. We allow it to fit your budget."
Veering Off the Yellow Brick Road
Department stores are also getting more desperate to keep customers engaged. In addition to buying customer lists from credit-card companies, some upscale retailers are offering gift cards for $150 or more after a $1,000 purchase, and turning their stores into entertainment venues to boost store traffic, says Patricia Pao, chief executive of Pao Principle, a retail consulting firm in New York.
For a Wizard of Oz theme party during New York's annual Fashion Week in September, Saks (SKS) brought in top shoe designers to create their renderings of the MGM film version's iconic ruby slippers, an event that probably cost Saks an additional couple of hundred thousand dollars, Pao estimates. She doubts such attention-grabbing tactics are working since sales at stores open at least one year continue to be extremely weak. With comparable sales already faltering for a year before the Lehman Brothers collapse and other recent events, "it's going to be very hard for [retailers] to retain their customers, or just to get them in the door," she says.
Aggressive markdowns on prices are also occurring much earlier than in the past, she notes, with fall merchandise already being advertised at 60% off at the start of October. "[Stores] are going to start doing markdowns [on Christmas items] by the middle of November" rather than waiting until the traditional day after Thanksgiving.
Says Pao: "I guarantee you're not going to see Black Friday anymore."
Bogoslaw is a reporter for BusinessWeek's Investing channel.

In Home Care Demand Growing

Piece of Mind The demand for in-home care is growing, and clients and their families say it is a great way for senior citizens to stay in their homes.
By JORDAN RAUBOLT of the Tribune’s staff
Published Saturday, October 4, 2008

The demand for in-home care is growing, and clients and their families say it is a great way for senior citizens to stay in their homes and keep their independence.
Creola Jones loves her home.
The 93-year-old retired schoolteacher has lived with her daughter, Jackie Jones, in the split-level off of North Garth Avenue for more than 27 years. Because Creola Jones’ mobility is limited by severe arthritis and several knee surgeries, she spends most of her days enjoying the scene in her backyard from her perch in the living room, which overlooks woods and a small stream that host birds and other wildlife.
Jones said the routine has helped her make it to her 93rd year.
Don Shrubshell photos
Leanna Clayton, a caregiver for Home Instead Senior Care, gives client Creola Jones a hug at the end of the day. Below, Clayton, right, waters flowers for Jones. “I call them my daughter’s peace of mind,” Jones said of her caregivers.
"It’s very peaceful here," she said. "I don’t know whether I could have made it without the birds."
Jones also has had some help from Home Instead Senior Care of Columbia. Jackie Jones hired Home Instead in 2006 to provide her mother with companionship and assistance during the times Jackie Jones’ job as vice chancellor of administrative services at the University of Missouri keeps her away from home.
Home Instead of Columbia, a franchised outlet of Omaha, Neb.-based Home Instead Inc., is one of several local businesses that provide nonmedical in-home-care services, such as companionship visits, grocery shopping, meal preparation, light housekeeping and appointment and errand transportation.
"There are times because of my work where I have to go out of town, and Home Instead will send someone to spend the night with her," Jackie Jones said. "You can count on them. I just know that I don’t have to worry."
Creola Jones said there are a handful of caregivers who come to her home five days a week. They help her up and down the stairs, assist with light house-cleaning and drive her to the doctor’s office and the grocery store - and provide good company.
"I love them all," she said. "I look upon them as friends, and they are my friends. I could call on any of them for help."
●
According to the U.S. Census Bureau, nearly one in five U.S. residents will be 65 or older by 2030. And that same age group is projected to reach 88.5 million in 2050, more than doubling from 38.7 million this year.
Don Shrubshell photo
Clayton puts away groceries for Jones. Clayton also cooks some meals for Jones.
Home Instead co-owner Debbie Critchfield said she has seen tremendous growth in the industry since 1998, when she and her husband, Greg, opened their business.
She said Home Instead franchises have expanded from around 130 U.S. locations in 1998 to an international franchise network of more than 800 today. And their business has grown from 18 to 75 employees and now serves anywhere from 60 to 80 elderly clients at any given time.
"It is something that I think is a huge new trend," Critchfield said. "This is a fairly new concept to be able to provide nonmedical, companion home care. ... A lot of people, they don’t need a nurse. It’s the stuff that all of us do every day, but when you’re in your 80s, 90s and 100s, it becomes more of a challenge."
“Handymen are a dime a dozen, but there’s no one who specializes toward the seniors. I’m someone that they’re familiar with and comfortable with.”
— Rod Perry,owner of Senior Hand
Mike Armstrong, fiscal administrative manager for the state Division of Senior and Disability Services, said in-home care is catching on because it’s less expensive than nursing home care. He said it costs about $32,000 to $35,000 per year for a person to receive nursing home care, whereas in-home care typically costs about $6,000 to $7,000 per year.
"It is fiscally more beneficial to keep somebody at home because it’s cheaper, and most individuals would prefer to stay at home if they have the option," Armstrong said.
Phil Melugin, co-owner of the Springfield-based in-home medical-care company Integrity Home Care, said the state has saved $1 billion over the past 12 years by funding in-home care. He said recent studies suggest that home medical care also results in a shorter recovery time for patients after surgery, injury or illness.
"They have their plants, their pets, and they’re able to nest in a setting that many of them have been in for 40 to 50 years," Melugin said. "That is an emotional connection that cannot be achieved in a nursing home facility."
For those who need constant monitoring for their medical needs, in-home care can provide much-needed relief for family members.
Deshai Richardson, 17, said caring for her great-great-aunt - 81-year-old Louise Ellis - over the past few years has taken a toll on her family. Ellis is bedridden and suffers from diabetes and high blood pressure.
"This is like a full-time job," Richardson said. "It’s worth it, though, because she’s done a lot for everybody, so we’re returning the favor."
Richardson said that in 2006 Ellis began receiving in-home nursing and housekeeping services from Integrity. Caregivers assist with bathing, bed changing, laundry, preparing meals and monitoring Ellis’ medications.
"If it wasn’t for the extra help, it would be harder to have our own personal time outside of helping her," Richardson said. "It’s hard, but Integrity makes it easier. We’ll do anything before we’d let her go to a nursing home."
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According to the Senior Network of Columbia, there are more than 13 businesses in Boone County that provide in-home health, private duty nursing, light-duty and respite care. The network consists of local organizations, businesses and individuals interested in promoting senior services. It maintains a directory of local businesses and resources at its Web site, seniornetwork.missouri.org.
One of the newest entrants into the in-home-care market is Living Well Home Services.
Cindy Hansen and Terri Maples opened the business in May. The business, which has 15 caregivers, offers nonmedical care and catered meals for seniors and people with disabilities for $17 to $22 an hour.
Hansen said she developed an affinity for the elderly during the six years she spent working for the Columbia Parks and Recreation Department’s 50 Plus Program, and she saw a business opportunity in providing seniors with assistance.
"The companionship is so important because a lot of these people are living away from their families, and they need stimulation just like anyone else," she said.
When Laura England, 59, moved to suburban Denver this spring, she hired a medical in-home-care company to care for her 87-year-old mother. But she soon realized that her mother needed personal interaction more than a nurse, so she hired Living Well.
"It’s nice to have someone stop in for a couple of hours and visit," England said. "They spend time with her and take the time to help her do the things she enjoys."
Local businessman and auctioneer Rod Perry has filled a related niche.
He recently started a home-based business called Senior Hand to offer handyman services such as rearranging furniture, interior and exterior painting, replacing light bulbs, yard work and other light repairs. The business charges $30 per hour.
Perry said the idea for the business came from hearing his retired mother and her friends discuss the difficulties they had in finding a trustworthy and reliable workman to do various jobs around the house.
"Handymen are a dime a dozen, but there’s no one who specializes toward the seniors," he said, noting that he’s getting a lot of word-of-mouth business as customers refer him to friends. "I’m someone that they’re familiar with and comfortable with."
Creola Jones has her own handyman - or handywoman.
Leanna Clayton, 66, one of Jones’ regular caregivers, has developed a reputation for her handiness. A retired American Airlines accounting officer, Clayton has worked part time for Home Instead for the past two years.
Clayton said all of the caregivers develop close relationships with their clients and each provider develops a reputation for his or her style and set of skills.
"We get categorized," Clayton said, noting that Jones often says, "If we’ve got something mechanical, we’ll wait for Leanna."
Jones said she appreciates the companionship and help of the caregivers, for herself and her daughter.
"I call them my daughter’s peace of mind because that’s really what they are," Jones said.

Small Businesses Stymied as Credit Gets Scarce

Small businesses stymied as credit gets scarce

By JENALIA MORENO and BRAD HEM
Houston Chronicle
Oct. 3, 2008, 11:27PM

Gary Fountain For the Chronicle
Doc Cohen, a Tomball franchisee, wants $1.5 million to add three stores.
Doc Cohen has borrowed money from the same lender for about nine years.
Yet, despite his track record and good credit, the Tomball-based franchisee is finding it harder to get a loan.
He wants to add three stores to his collection of 29 Pretzel Time, Great American Cookies and Coffee Beanery outlets found in Houston-area malls, and needs $1.5 million.
But the lender won't give him credit unless he keeps $1 million as his minimum balance.
"Well, if I had the minimum balance, I wouldn't need the loan," said Cohen, whose company generates $10 million a year in revenue. "We don't have that much on hand."
Entrepreneurs such as Cohen are having a tough time getting lines of credit, expansion loans and money for startups as the financial crisis on Wall Street spreads to Main Street.
"Two years ago, if you wanted to open a business, there would be two or three banks jockeying for a position to get your business," Manuel González, district director for the Small Business Administration in Houston, said. "Now, its like you've got the plague or something. Nobody wants to touch a new venture."
Fewer licenses issuedA slowdown does seem to be taking hold.
Through August the Harris County Clerk's Office issued 34,364 business licenses. That compares to 66,664 issued in all of 2007 and 76,391 in 2004.
Existing businesses say they are feeling the effects of the nation's credit crunch as well. Nearly 70 percent of Houston's small businesses reported that to the Greater Houston Partnership this week, the business group said.
"Right now, we're seeing a lot of tightening, and we're seeing some of these smaller firms really struggling with financing," said Gilbert Herrera, founder of Houston-based Herrera Partners, an investment bank and financial consulting firm.
At the Houston SBA — which provides government guarantees to help banks mitigate risks — just 1,700 loans valued at $435 million were produced this fiscal year, down from 2,700 loans valued at $535 million in 2007.
"That's the lifeline for all small businesses," said González.
More expensive termsLocal bankers agree that in these tough times fewer are making loans.
"We became a lot more cautious with walk-in customers," said George Lee, president and chief executive officer of Houston-based MetroBank. "If they have a history and they want to expand their business, then we will consider that."
Loans just may be a little tougher to get.
"It may be under different terms and a little bit more expensive," said John Hernandez, senior vice president of Houston-based Amegy Bank of Texas.
Cohen said he understands the position the banks are in. He'll try to shuffle some other accounts around to come up with the money.
"The decision will be to do what they ask or find another lender, and in this market, finding another lender is going to be difficult," said Cohen, who expected to create 45 jobs with his planned stores.
Beyond those like Cohen who are seeking expansion or startup loans, there are those who just need a temporary infusion of cash to help meet payroll.
Ben Mendez, owner of PMG Project Management Group, whose company helps city, county and federal officials make disaster assessments, said he's suddenly had to hire more people to do the job.
"The bankers are basically telling us that everything is on hold," said Mendez, who adds that he'll turn to his friends and family for money to pay his temporary workers.

Whataburger Names new Technology Chief

Breaking News

Whataburger names Bird technology chief
www.whataburger.com

CORPUS CHRISTI, Texas (Oct. 3, 2008) Whataburger Inc. said it has appointed as chief information officer Karen Bird, a foodservice technology veteran who most recently served as vice president of restaurant information solutions at Brinker International Inc.
Bird succeeds CIO Scott Parr, who is becoming a principal in the Business Technology Partners LLP consultancy in Dallas, Whataburger said.

“Karen has a strong background in aligning technology systems and making smart business decisions across multiple brands and concepts. She’ll be a valuable resource and driving factor in applying new systems in our restaurants to help us deliver the friendly service and made-to-order food we’re known for,” said Preston Atkinson, president and chief operating officer of Whataburger, which operates or franchises more than 700 namesake restaurants.
During her two years at Brinker, Bird had responsibility for aligning technology strategy, business processes and priorities across 1,600 restaurants in 24 countries, Whataburger said. Prior to joining Brinker, she worked as director of retail technology services for Dunkin’ Brands Inc., franchisor of the Dunkin’ Donuts and Baskin-Robbins chains. Before that, she was vice president of business systems at Advantica Restaurant Group, which at the time was parent to seven restaurant chains, including the Denny's family-dining concept.

Bird started in foodservice as a restaurant-level employee for Burger King and worked her way up to a post as systems manager before joining Advantica.

MoveMe.com

No one likes to move. It is one of the most dreaded tasks of all time. It is typically difficult to organize movers, arrange for a new place to rent, heavy lifting and long tiring days. But where there is a need there are services to help the weary.

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The site answers all the questions a mover might have....like "how do I change my address" or change locks or handle parking registrations of any kind. Anything and everything that could be associated with a move is handled at Move Me.com. This truly is a great resource for anyone making the move. The Site also won the Yahoo Innovation Award as well as the Yahoo People's Choice Award.

One of the most useful tools I found on the site is the move planner. This is a tool built to make your move simpler and plan. One thing I have been told by my wife many times is that I lack the ability to plan anything. The Move Planner could very well save me from myself. It reminds you of every possible task involved in the move. The calendar is easy to use and the subsections to the right of the daily calendar provide key topics that any mover should focus on during their job.

Here are some key links I would direct you to in order to see the sites functionality and capabilities. It's funny, every time I have moved, I just did it....and screwed up a bunch of things and made the job much more difficult than it should have been. A site like this could save a lot of time and effort.

On the site you can access free mortgage quotes

It is easy to use Move Me.com, in most cases you feel pressured and like you are being put through a sales process, when all you really wanted was to get some mortgage quotes

Move Me also provides easy access to removal quotes

I would use this site, I recommend it to others who are making moves and who might be overwhelmed with all of the responsibilities and tasks that come with moving and the buying or selling of a home. Move me.com has all the tools and all the insight to provide true value to someone taking on the job of moving.

Francorp 12 Criteria of Franchiseability for a Business

Don Boroian founded Francorp on the premise of working only with companies in a position to take the next step of expansion and growth through franchising. Francorp closely evaluates every business it meets with to determine whether or not that particular business has the viability needed to be a successful franchise organization. Francorp has put together the 12 steps of franchise criteria that the company uses as a benchmark for determining whether franchising could be a successful growth vehicle.

Francorp 12 Criteria of Franchisability for a Business

While it is impossible to determine the franchisability of a business concept without a significant amount of analysis, Francorp has identified a series of 12 criteria that assess the readiness of a company for franchising and the likelihood that it will achieve success as a franchisor.

1. Credibility – To sell franchises, a company must first be credible in the eyes of its prospective franchisees. Credibility can be reflected in a number of ways: organization size, number of units, years in operation, look of the prototype unit, publicity, consumer awareness of the brand, and strength of management, to name some of the most prominent factors.

2. Differentiation – In addition to credibility, a franchise organization must be adequately differentiated from its franchised competitors. This can come in the form of a differentiated product or service, a reduced investment cost, a unique marketing strategy, or different target markets.

3. Transferability of knowledge – The next criteria of franchisability is the ability to teach a system to others. To franchise, a business must generally be able to thoroughly educate a prospective franchisee in a relatively short period of time. Generally speaking, if a business is so complex that it cannot be taught to a franchisee in three months, a company will have difficulty franchising. Some more complex franchisors offset this handicap by targeting only franchise prospects that are already "educated" in their field (e.g., a medical franchise targeting only doctors).

4. Adaptability – Next, measure how well a concept can be adapted from one market to the next. Some concepts do not adapt well over large geographic areas because of regional variations in consumer tastes or preferences. Others (e.g., dental practices) are constrained by law. Still other concepts work only because they are in a very unique location. And some work because of the unique abilities or talents of the individual behind the concept. Finally, some concepts are only successful based on years of perseverance and relationship building.

5. Refined and successful prototype operations – A refined prototype is necessary to demonstrate that the system is proven, and is generally instrumental in the training of franchisees. The prototype also acts as a testing ground for new products, new services, marketing techniques, merchandising, and operational efficiencies.

6. Documented systems – All successful businesses have systems. But in order to be franchisable, these systems must be documented in a manner that communicates them effectively to franchisees. Generally speaking, a franchisor will need to document its policies, procedures, systems, forms, and business practices in a comprehensive and user-friendly operations manual and/or computer-based training module.

7. Affordability – Affordability merely reflects a prospective franchisee’s ability to pay for the franchise in question. This criterion is as much a reflection of the prospective franchisee as it is of the actual cost of opening a franchise.

8. Return on Investment – A franchised business must, of course, be profitable. But more than that, a franchised business must allow enough profit after a royalty for the franchisees to earn an adequate return on their investment of time and money. Profitability is always relative. It must be measured against investment to provide a meaningful number. In this way, the franchise investment can be measured against other investments of comparable risk that compete for the franchisee’s dollar. Typically, Francorp would like for the franchisee to achieve a ROI of at least 20 percent by the second to third year of operations.

9. Market trends and conditions – While not an indicator of franchisability as much as a general indicator of the success of any business, these trends are key to long-term planning. Is the market growing or consolidating? How will that affect your business in the future? What impact will the Internet have? Will the franchisee’s products and services remain relevant in the years ahead? What are other franchised and non-franchised competitors doing? And how will the competitive environment affect your franchisee’s likelihood of long-term success.

10. Capital – While franchising is a low-cost means of expanding a business, it is not a "no cost" means of expansion. A franchisor needs the capital and resources to implement a franchise program. The resources required to initially implement a franchise program will vary depending on the scope of the expansion plan. If a company is looking to sell one or two franchised units, the necessary legal documentation may be completed at costs as low as $15,000. For franchisors targeting aggressive expansion, however, start-up costs can run $100,000 or more. And once the costs of printing, audits, marketing, and personnel are added to the mix, a franchisor may require a budget of $250,000 or more to reach its expansion goals.

11. Commitment to relationships – Successful franchisors focus on building long-term relationships with their franchisees that are mutually rewarding. Unfortunately, not all franchise organizations understand the link that exists between relationships and profits. Strong franchisee relationships enable the franchisor to sell franchises more effectively, introduce needed changes into the system more easily, and motivate franchisees and their managers to provide a consistent level of products and services to their customers.

12. Strength of management – Finally, the single most important aspect contributing to the success of any franchise program is the strength of its management. Franchise Connect has found that the single most common contributor to the failure of start-up franchisors is understaffing or a lack of experience at the management level. Many times, new franchisors will try to take everything on themselves. In addition to absorbing several new jobs for which the franchisor has little to no time, the franchisor needs to exhibit expertise in fields in which he or she may have little or no experience: franchise marketing, lead handling, franchise sales, ad fund management, training, and multi-unit operations management.

For more information please visit the Francorp corporate site, http://www.francorp.com/