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November 2007
Volume 9, Issue 10, Part 2

Publisher: Mary E. Tomzack
Editor: Lynie Arden
Assistant Editor: Vanessa Goldschneider
Design: Halit Rugova


November: The Holidays Begin


In this issue...

Commentary:
Doing holiday shopping online is becoming more and more popular. Are you one of the online shoppers? If so, you'll like our picks for some good- and often novel- gift sites.
Click Here and browse the sites.

Street Smarts:
The Name Game
Industry Focus:

Seasonal Franchise Strategies, part 2
Guest Column:

Elements of successful franchising


The Name Game

Are you facing an identity crisis on the Internet? You tried to set up shop on the information highway and went to register your domain name. It should have taken about 5 minutes and $6.99. But when you tried to register "bestfranchiseever.com", InterNIC said no, that name belongs to someone else. With 15,000+ ".com" registrations a week, this scenario is happening more often than not. Now what?

If you simply must have the domain name of your dreams, you can probably get it - for a price. "Vista.com" recently sold for $1.25 million, which explains why the domain name aftermarket is the hottest game in cyberspace. Thousands of dealers are selling domain names on dozens of virtual real estate sites with the help of specialty finance companies. But you may not need to take out a loan to get your name. Less powerful names often sell for a few thousand dollars. To find out what you're up against, scope out the domain name holder and start negotiating.

Having a domain name to match your business name is good, but not necessarily ideal. Another option is to select a domain name that is search engine friendly. A domain name based on the main keyword for your product or service will give you a much better chance of moving to the top of the search engines. For example, "safemoneytransfer.com" will drive more traffic than "franklinfinancialgroup.com".

Often, a domain name is available, but not with a ".com" extension. Is there a difference? Sure, ".com" is more familiar, but a “.net” or “.org” extension might work equally well for a good business model and sufficient optimization.

Once you have a domain name, hold on to it. If it accidentally expires, a drop-catcher will snag it for resale or worse – sell their own products to your customers. Protect your name with auto renew. Make sure your payment information stays current.

Industry Focus

Seasonal Franchise Strategies, part 2

Last time, we talked about a holiday lighting franchise that provides seasonal businesses with a good way to get through the winter. But if you're thinking of jumping into the business, you're too late - at least for this year. According to Nick Schriver, the founder of Decorating Elves, the holiday lighting season starts long before the frost is on the pumpkin. "By October 1st we're rolling. There's a lot to do in a short amount of time. We run all of our advertising, do the design work, write proposals, interview for temporary crew spots, and get everything into the schedule. We'll get three pallets of lights delivered right after the first and start installing the week before Halloween."

Decorating Elves is just one of a handful of holiday lighting business franchises taking advantage of this lucrative seasonal niche. There's no doubt the fledgling industry is growing though there are no statistics to indicate exactly how big it's' gotten. However, every business we talked to reported that it was profitable from year one and the number of customers just keeps on growing. Schriver, who started his franchise company as a college student in 2002 says, "This was successful right out of the gate. And we are still growing 50-60% every year." No doubt the 85% retention rate is a big help.


Company: Decorating Elves
Startup costs:
$35,000-$85,000
Franchise fee: $15,000-$30,000
Address: 10460 Roosevelt Blvd, Suite 292, St. Pete, FL 33716
Phone: (866) 445-6202
Website: www.DecoratingElves.com
In Business: 2002
Franchising since: 2007

Another indication that this industry is growing is the willingness of people to pay more each year. In some areas, people are routinely ponying up $3,000 to $5,000 for holiday lighting services. Some spend even more - like the rich guy in California who paid $50,000 to keep up with some holiday-centric Jones'es. "It's crazy," says Schriver. "When we started out we were doing jobs around $500. Then it was $800, then $1200 - and I'm talking average. Now we're getting closer to $1500 on average and we've done projects as big as $9,000."

Schriver graduated with a degree in architecture and did start down that career path. But that's been put on hold. "The lighting and decorating business has been so successful that it pretty much engulfs me year round," says Schriver. It's possible to earn a year's income in three months and spend the other nine months in Barbados sipping Pina Coladas, but for go-getters there are a lot of different off-season decorating scenarios. "We get a lot of referrals for wedding, special events, and parties. It's not nearly as go, go, go as during the holiday season. It's a lot of fun though," asserts Schriver.


Elements of Successful Franchising

By: Bob Gappa


Although many aspects of franchising are unique, it is, at the core, a business and shares many of the challenges and characteristics of other businesses. The reason for a business is economic performance. The purpose of a business is to create and keep customers and the result of a business is satisfied customers. The characteristics of a successful business include the following NINE COMPETENCIES:

• Attracting new customers
• Ensuring customers are VERY satisfied and loyal
• Retaining current customers
• Ensuring customers promote you, forever
• Getting customers to purchase more of its products or services more often
• Continually increasing market share
• Maintaining a sufficient profit margin
• Having low management and employee turnover at the operating locations
• Having very satisfied and engaged managers and team members executing
the systems at the operating locations.

Franchises vs. Independent Businesses
The average success rate for franchising may be greater than for independent businesses. However, few people understand why. Simply put, it is because franchises (and company-managed outlets) have a clear advantage in all of the NINE COMPETENCIES above due to their ability: [a] to align all franchisees to a Brand’s mission, core values, vision and positioning statement; [b] to design, develop and execute Operating Systems that deliver on the NINE COMPETENCIES mentioned above; and [c] to design, develop and execute Operating Systems that deliver and enhance what customers’ value.

Professional Management
Companies using franchising as a growth strategy must evolve from an organization run by an entrepreneur to one run by systems and processes known collectively as “Professional Management.” This is not meant to denigrate entrepreneur founders, but rather to identify one of the “elephants in the room.” Many founder entrepreneurs are frustrated with their inability to grow their companies successfully after the 100-200 unit milestone. They attend seminars and hire consultants and outside executives in an attempt to solve their problems. What is needed by every franchise company, whether its locations are company or franchisee operated, are systems developed with customer-driven philosophies, policies, programs, procedures and practices. The operations in these companies must be consistently executed by well-developed, trained, committed and engaged franchisees and company employees. This is what is known as Professional Management.

Bob Gappa is the founder and President of Management 2000, which was founded 27 years ago and specializes in working with companies that use franchising to grow their business. Bob can be reached at 800-847-5763, via email at m2000@mgmt2000.com or visit website www.mgmt2000.com.

Burger King to Test $1 Double Cheeseburger

Burger King will try cutting the price of its double cheeseburger to $1 in an attempt to trump one of McDonald's most popular bargains. According to Dow Jones Newswires, the chain intends to lower the price of the burger in three test markets to what McDonald's charges for its double cheeseburger, a key component of the archrival's Dollar Menu. BK's version is reportedly larger than the sandwich offered by McDonald's.

The move by BK comes as some McDonald's franchisees have complained about selling a double burger for $1 at a time of rising commodity prices. Some units have bumped up the price of their double cheeseburgers by as much as 99 cents, with the Value Menu revamped as a Value Menu & More listing. Dow Jones noted in its story that BK's three-city test of a bigger $1 double cheeseburger could ignite a price-cutting war between the quick-service giants. Oak Brook, Ill.-based McDonald's operates or franchises more than 30,000 restaurants worldwide and Miami-based BK operates or franchises more than 11,000. (Nation's Restaurant News, 11/20/07)

Holiday Inn Brands to Relaunch After Revamp

While executives from InterContinental Hotels Group (IHG) touted change as the key to improving the chain's global lodging efforts at their recent annual Americas Investors and Leadership Conference, a sea change is about to unfold for its legacy Holiday Inn brand and its offshoot, Holiday Inn Express. Now grouped under the umbrella of the Holiday Inn brand family, both lodging choices are tossing out their longstanding logos and signage in favor of more contemporary typefaces, shapes and colors that will affect everything connected with the brands' images from monument signs to website icons to marketing tools this is all part of a worldwide initiative to relaunch the brands as more trend forward, more consistent in quality and service, and better equipped to meet the needs of both existing and emerging travelers.

The positioning push will include, for both brands, redesigned guestrooms; upgraded bedding, bath and amenity packages; revamped front-desk areas with custom back-wall presentations; exterior lighting features in brand colors that will appear above and on the columns of the arrival canopy; modern landscaping; signature scents and customized music in public spaces. With more than 3,100 Holiday Inns and more than 1,700 Expresses open and approximately another 1,000 hotels in the pipeline, IHG is targeting 2010 as the completion year for the relaunch. Between now and then it's expected franchisees and owners will invest an estimated $1 billion to bring that goal to fruition. (Hotelbusiness.com, 10/24/07)

Pollo Campero Inks Deal with Wal-Mart

Campero USA, a division of the Guatemala-based chain with 36 Pollo Campero chicken restaurants in the United States, has signed an agreement with Wal Mart Stores Inc. to begin opening stores in the big-box retailer's outlets in 2008. The number of Pollo Campero units planned for Wal-Mart stores was not disclosed. The landlord-tenant agreement currently covers Wal-Mart stores in select areas. The company also owns Supercenter, Neighborhood Markets and Sam's Clubs. The retail giant has recently been increasing its commitment to the Latin American community.

Separately, Qdoba franchisee Chair 5 has signed a deal with Pollo Campero to open five units in an area that includes the northern suburbs of Boston because of their prime Central American neighborhoods. Pollo Campero has more than 260 restaurants in 11 countries. (Nation's Restaurant News, 11/14/07)

Five Guys Debut Their Burgers to Manhattan

Five Guys Famous Burgers and Fries, the 200-unit, fast-casual burger chain based in Lorton, Va., has inked a deal with Five Points Partners, a New York-based franchisee, to open 30 units across Manhattan over the next eight years. The first location is expected to open this month in midtown on West 55th street between Fifth and Sixth avenues. The menu will consist of such core items as burgers, fries, hot dogs, veggie sandwiches and grilled cheese sandwiches. Free toppings include mushrooms, cooked onions, jalapenos, lettuce, tomatoes, pickles, mustard and ketchup. Prices range from $5.75 for a regular burger to $7.75 for a bacon cheeseburger.

In addition to its investment in Five Guys Burgers and Fries, Five Points Partners also owns the exclusive development rights for the Dunkin Donuts and Baskin-Robbins brands in central business districts of Washington, D,C,, Northwest Washington, D.C. and a part of Prince George's and Anne Arundel counties, as well as a network of Dunkin Donuts shops in Suffolk County, N.Y. (Nation's Restaurant News, 10/26/07)

Massage Franchisers Launch Skin Care Franchise

The owners of Sacramento, Ca.-based Massage Envy Ltd., a membership-based chain which offers discounted massages and extended hours, have launched a similar concept for facial treatments called Faces365. Both ideas are designed to appeal to customers who do not use such services or do so infrequently because they feel the cost at traditional spas is too high or limited hours do not fit in with their busy lives. Face 365 is open seven days a week, days and evenings, with drop-ins available. The membership model gives customers discounted prices and guarantees business, and helped Massage Envy expand the market for massage services.

Faces365 would locate in suburban areas in at least 2,000 square feet in grocery-anchored or lifestyle centers. Faces365, which will soon ask the state to approve franchising, is not the first to market. Facelogic International of Carlsbad, Ca., with a similar model, has sold 85 territories for franchises in two years and opened in 29 of these locations. Facelogic is attempting to reach 1,000 sites by 2014 while Faces365 aims to reach 750 to 800 locations in five years. (Sacramento Business Journal, 11/9/07)








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