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Franchising the First Five – How Franchise Your Business Model Early On

When you sell your first franchise, the initial development efforts typically consist of franchisees who wouldn’t necessarily make the cut later in your franchise system’s life cycle.  Mature franchise systems are much more aggressive and diligent as to who is allowed into the franchise network.  This isn’t necessarily a luxury that new franchisors can afford.  The largest single point of failure for a new franchisor is to not sell the initial five units who start to validate the business model and brand.  This puts a significant amount of pressure on new franchise systems to get these initial units sold and as a result typically the failure rate is higher for early stage franchisees.

  1. Who typically buys the first five franchises of a new franchisor? They usually are a bit more entrepreneurial then they probably ought to be. They are willing to take more of a risk and see longer term vision in the brand and the leadership of the franchise company. They want to negotiate the fees, territory and other material items in the franchise agreement. As a new franchisor, you need to be careful with who you sell these to, while not screening too hard, you also should be able to spot the landmines who really exhibit poor character traits for a franchisee. You also should be conscientious of how large and how exclusive you make territories as these early agreements sometimes become a thorn in growing franchisors sides as they gave away too much or were too generous with early franchisees.
  2. What kind of terms should be considered when negotiating a franchise agreement with early stage buyers? We have seen anything and everything negotiated in a franchise agreement, I wouldn’t rule out any possible terms as negotiating points if the buyer is right and the long term opportunity justifies the deal. Make sure that you get enough money up front and try not to touch royalty structures as the long term revenue stream will have an exponential impact to your bottom line and in most cases don’t make as significant of an impact in the negotiations of the franchise sale. Look first to initial franchise fee and territory size, most early stage franchisees will respond to these offers.
  3. How do you find the early stage franchise buyers? Most of the time, early franchise investors come from the same channels that the majority of franchise sales originate. We recommend the franchise lead portals (www.FranchiseConduit.com, www.BizBuySell.com, www.FranchiseDirect.com, etc), although they are not necessarily the best leads all the time, they are consistent and with the right sales process will produce sales for an early franchisor. Organic leads will many times play a large role in early franchise sales, pay attention to customers who ask about the franchise, leads that come in off your corporate site or referrals that come to you asking about franchises.
  4. Managing the franchise registration process while you sell your early franchises, you should be careful with managing the franchise regulatory process. First, you need to make sure that you have a good franchise attorney involved in your sales and transactions with each of your new sales and make sure that you have a solid franchise disclosure document (http://www.franchisemarketingsystems.com/franchise-disclosure-document-guide/). Cover yourself to make sure that the sales are managed appropriately and also that you are careful to manage the franchise registration process. We recommend limiting any communication with potential franchisees in franchise registration states as soon as you find out what states they are located in. Know the franchise registration states (http://www.franchisemarketingsystems.com/blog/franchise-state-registrations/) and understand that your franchise must be registered in these states prior to any marketing or sales activities taking place with a potential franchise buyer.

For more information on how to franchise your business and how to sell your first franchises, contact us:

info@FranchiseMarketingSystems.com

 

The Top Performing Franchises of 2015 -Franchise Marketing Systems

 

Franchising: Tiers of Growth

2015 has been another year of significant growth for the franchise industry in general. With more growth comes more responsibility, time and effort.  We define franchise systems by where they are in the evolution of their growth and understanding for the franchise business.  These Franchise Marketing Systems brands had success in 2015 and are entering 2016 with continued aggressive growth in mind.


 

Tier 1 Franchisor:

These franchise brands opened their first franchise and are beginning to scale effectively.  They’ve just sold their first franchise and officially have become a franchisor and have gotten into the franchise industry.  Clients who sold their first franchise in 2015:

Bactronix

Antimicrobial Franchise – Reached 4 Franchises in 2015.

Fire & Rice

Mobile Food Service Franchise – Sold First 2 Franchises in 2015.

The Haven

Resident Senior Care Franchise – Reached 7 Units in 2015.

New Again Carpet & Cleaning

Carpet Cleaning Franchise – Sold first unit franchise

Middle Spoon

Desert Bar FranchiseSold 2 Franchises in 2015.

Vital Restoration

Water Restoration Franchise – Sold 5 Franchises in 2015.

Groutastic

Grout Cleaning Franchise – Sold first unit franchise

Bin It

Storage Franchise – Sold first unit franchise

Cocktail Wax

Waxing Franchise – Sold first franchise

1Heart Cargivers

Senior Franchise – Sold the first 3 Franchises

The Brake Squad

Mobile Brake Repair – Sold first franchise

Patch Boys

Handyman Franchise – Sold first 5 Franchises

Classic Commercial Services

Cleaning Franchise – Reached 4 Franchises in 2015.

Lov Juice

Juicing Franchise – Sold First Franchise in 2015, reached 4 Units.

Everything Christmas

Christmas Retail Franchise – Sold 4 Franchises in 2015.

Lice Ladies

Lice Removal Franchise – Sold First Franchise in 2015.

 

Tier 2 Franchisor:

These systems typically have 1-7 units, they have been franchising for 1-2 years and are just beginning to get validation through franchisee’s success.  Heavy focus on sales, low operating budget and typically the founder is still the primary human capital involved in operating the franchise business.  Franchise Marketing Systems clients who entered this phase of growth in 2015:

Bloomin Blinds

Blind Sales Franchise – Reached 8 Units in 2015.

Simple Computer Repair

Computer Repair Franchise – Reached 7 Units in 2015.

eMaids

Maid Service Franchise – Reached 9 Units in 2015

Launch

Trampoline Franchise – Reached 8 Units in 2015.

Brakes For Less

Brake Repair – Reached 12 Units in 2015.

Global Garage Flooring

Garage Floor Franchise – Reached 7 Units in 2015.

Headlights 20/20

Headlight Repair Franchise – Reached 8 Units in 2015.

Montessori Kids Universe

Education Franchise – Sold 3 Franchises in 2015.

 

Tier 3 Franchisor:

These franchises have between 8 and 50 units and have been in the industry typically for 2-5 years and have achieved some consistent growth in both new unit sales and from the operating unit financials.  A team is now in place with 2-5 good support team members and a system for opening, supporting and add value to franchisees is coming into its own.’  Key Performance Indicators are new franchise sales, but are driven by higher quality operators.   Brands in this category include:

LifeLine Repairs – Mobile Technology Repair Franchise – Reached 32 Units in 2015.

The Lost Cajun – Cajun Restaurant Franchise – Reached 14 Units in 2015.

Blue Moon Estate Sales – Estate Sales Franchise – Reached 14 Franchises in 2015.

Splash and Dash For Dogs – Pet Services Franchise – Reached 33 Franchises in 2015.

East of Chicago Pizza – Pizza Franchise – Sold 12 Franchises in 2015, total Units 84.

Postal Connections – Shipping Franchise – Reached 43 Franchises in 2015.

Andy Oncall – Repair Franchise – Reached 38 Franchises in 2015.

Renter’s Warehouse – Property Management – Reached 27 Franchises in 2015.

Seva Beauty – Brow Franchise – Reached 74 Franchises in 2015.

Garage Floor Coatings – Flooring Franchise – Reached 28 dealers in 2015.

Junk King – Junk Removal Franchise – Reached 70 units in 2015.

Executive Home Care – Senior Care Franchise – Reached 15 Franchises in 2015.

Caliber Patient Care – Medical Transportation Franchise – Reached 37 Franchises in 2015.

The Flower Tent – Flower Retail Franchise – Reached 93 Franchises in 2015.

Romp and Roll – Children’s Franchise – Reached 70 Franchises in 2015 including China.

Ecoview Windows – Window Franchise – Reached 24 Dealers in 2015.

Caring Matters Home Care – Senior Care – Reached 67 Units in 2015.

Philly Connection – Food Truck Franchise – Reached 37 Units in 2015.

 

Tier 4 Franchisor:

These franchise systems have achieved significant scale, have an established team in place of 5-10 professional franchise support staff, understand unit level economics and typically have a system-wide network of 100-200 franchises.  Brands in this category include:

Mad Science Group – Children’s Franchise – Reached 126 Franchises in 2015.

Rosati’s Pizza – Pizza Restaurant Franchise – Reached 123 Units in 2015.

Bruster’s Ice Cream – Ice Cream Franchise – Reached 200 Units in 2015.

Jantize America – Commercial Cleaning Franchise – Reached 308 Franchises in 2015.

Green Home Solutions / Mosquito Terminators – Home Services Franchise – Reached 180 Units in 2015.

Lunchbox Waxing – Wax Franchise – Reached 113 Units in 2015.

Discovery Maps – Advertising Franchise – Reached 130 Units in 2015.

Tier 5 Franchisor:

Mature franchise systems with 300 units or more.  These systems are at their peak and have capitalized on complete scale.  Franchisees consist largely of multi-unit owners, the executive team at the franchisor will be 15-30 people on staff.  Key Performance Indicators are driven by training, support, technology and reporting.  Brands in this category include:

Anytime Fitness_franchise

Anytime Fitness – Fitness Franchise – Reached 3,000 units in 2015.

moving franchise

Two Men and a Truck – Moving Franchise – Reached 300 units in 2015.

matco tools franchise

Matco Tools – Mobile Tool Franchise – Reached 1500 units in 2015.

berlitz franchise

Berlitz – Education Franchise – Reached 600 units in 2015.

 

For more information on how to Franchise Your Business, Contact Us:

 

Splash and Dash Franchise

Splash and Dash For Dogs Franchise

 

In 2009, Dan Barton approached Christopher Conner with a unique concept.  Mr. Barton had been in the gym business and had successfully worked his way to the top levels of management with the Gold’s Gym franchise organization.  He was CFO at the time and was making a transition into the pet industry.  It was a risky move for anyone to leave a global franchise organization as CFO and step into an entirely new business.  The new concept was to be Hollywood Premier Pets, which was in effect a failing pet retail business located in Palm Desert, California.  Mr. Barton had purchased the business and was instituting his new marketing model to help the business come back to life and franchise the model out to other pet stores who were ailing from similar circumstances.  Dan Barton would be at the time, the first client for Chris Conner and Franchise Marketing Systems.  Mr. Conner had to be sold on the concept and being that Franchise Marketing Systems was a new business at the time, it was imperative that the first client be a success. 

 splash-and-dash

What was of particular interest about the Splash and Dash model was the residual, repeat business that was created through customer acquisition and loyalty programs.  Mr. Barton had effectively leveraged his experience in the gym business, famous for memberships and recurring billing and utilized the model for the pet industry.  The pet retail business was plagued with what is the primary issue for most retail businesses, how do you get customers in the store often enough to achieve critical mass volume, cover your overhead expenses and ultimately see a consistent profit?  The Splash and Dash concept fixed this dilemma.  In three short months of owning Hollywood Premier Pets, it became clear that the model worked.

 

The first order of business was to develop a brand that could be scaled globally.  The pet business was big, but it was getting significantly bigger every year, Splash and Dash had what it took to be a global brand, Hollywood Premier Pets did not.  The organization transitioned entirely to Splash and Dash and the franchise model was created to offer the platform to other stores.  With Franchise Marketing Systems, Splash and Dash developed a strategic plan for franchise growth that focused initially on marketing to existing pet retail and grooming businesses.  This was what all parties involved saw as the low hanging fruit and immediate opportunity for the pet franchise model.  These businesses were already in the industry and for the most part were struggling, the value proposition of Splash and Dash would be extremely relevant.  The franchise fee structure, territory model, support programs and infrastructure were designed to support this growth and allow for duplication of the Splash and Dash model. 

 

Next was the packaging of the Splash and Dash franchise model.  The systems needed to be documented and organized where virtually anyone could pick up the franchise operations manual and understand what steps 1 through 20 were and become Splash and Dash of their market.  The business model was heavily focused on developing clients and therefore had a strong sales component.  Dog Groomers and pet retail owners traditionally were not good sales people and needed heavy training programs in place to teach, train and then maintain their sales model.  Good systems were developed to be able to manage the sales and understand what metrics should be in place so that a store could be gauged as to how successful they were in implementing the pet services franchise system.  Branding, marketing, collateral and all associated materials were then developed to be used in all of the Splash and Dash franchise locations and to add value to franchisees.

 

Then, Franchise Marketing Systems developed the marketing, business development and franchise sales models to go out into the market and recruit new franchise owners.  Within a very short time period, it was obvious that Splash and Dash was a brand with the ability to grow quickly as a Master Franchise was sold in Australia, another in Canada and by the end of the first year of franchising, 23 unit franchisees had purchased the model in the U.S.  New strategic initiatives, technology and management were put into place to support this growth and manage the growing number of responsibilities that came with this growth.  In 2014, Mr. Conner and Mr. Barton held strategy meetings again for the purpose of redefining the model which had reached almost 100 locations.  The new version of the Splash and Dash franchise was a from the ground up retail franchise model that could be offered not only to existing pet industry professionals, but also entrepreneurs who wanted to get into the pet retail and pet services franchise market. 

 

Today, Splash and Dash has over 100 locations of the business model in operation around the world. Mr. Barton has written books on the industry and is asked to speak at pet industry conventions on how to market and build your pet business more effectively.  Splash and Dash continues to add new franchisees on a rapid scale and the organization has been proven to be one of the industry leaders in the entire pet services franchise market.  Splash and Dash is a perfect example of franchising allowing a new business model to scale quickly and capture market share.

 

For more information on how to franchise a pet business, Contact Us:

info@franchisemarketingsystems.com