In This Issue

• Franchise Spotlight
• Mario’s Message
• Doug’s Sales Corner
• Lori’s Tips
• Elizabeth Enlightens
• Larry Listens
• Partner Place
• Counter Point
• USG Services Spotlight

 

 

 

 

Franchise Spotlight

 

Rapid Recovery is an exclusive green business positioned perfectly for today’s market needs. Green isn’t new but it is a white hot business segment! Many companies produce green products or claim to be green companies because they use recycled napkins or florescent light bulbs - Rapid Recovery franchisees are the real deal, situated smack in the center of the environmental movement!

 

Every year Rapid Recovery Franchisees collect millions upon millions of pounds of ozone depleting C02 equivalents through the proper recovery of coolants used in everything from industrial chillers, residential and commercial HVAC units, refrigerators, transformers and vending machines.

 

Unlike many fad, green businesses that struggle to change consumer paradigms; recovery of refrigerants is common practice and is strictly enforced through aggressive fines from the EPA. With no true competitor, Rapid Recovery has positioned itself as the only nation-wide recovery company in the United States with locations servicing consumers from coast-to-coast.

 

Having developed proprietary equipment allowing our franchise owners to perform jobs up to 400% faster than previously possible we are strategically positioned to ride the booming need for proper recovery.

 

Rapid Recovery is an exclusive franchise system, with less than 100 total franchise units scheduled. Rapid Recovery is looking for the best of the best to join our system. If you want to help the environment while making a great living and enjoy a business-to-business work schedule, inquire for more information now!

 

 

 

 

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Find out about Franpac and how you can be involved!

 

 

USG in the News

Why So Objectionable? Overcoming a prospect’s ‘no’ can be as easy as one, two, three

 

 

Upcoming Events

The Franchise UnConference
March 3 - 5, 2010
Newpark Resort,
Park City, Utah

 

Upside Group
Franchise Consulting
888-445-2882
newsletter@upsidegroup.biz

Offices in Arizona, California, Florida and New Jersey

 

 

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• Mario’s Message

  The state of things!

  At Upside Group Franchise Consulting we are always being asked, “How are things for you and your clients in this economy?”

  The answer is not too shabby.

  As a franchise consultancy we have actually grown the last couple years and we have taken time to streamline processes and becoming more efficient!

  And our clients have seen very strong growth, albeit different, but still strong.

  Some franchisor clients have grown through royalty growth. While their competitors struggled, some franchisors took the opportunity to advertise aggressively and grab market share through their local franchise outlets, leading to stronger sales and higher royalties. By focusing on the efficiencies of their current system they were able to quickly adjust and take advantage of the opportunities the economy presented; often arming their franchisees with enhanced marketing tools and encouraging them to “get aggressive” in their local areas.

  We have also seen new franchise unit sales. The difference now is certainly financing. While you will find no shortage of gloom and doom articles describing slow or no growth, there are still many franchise prospects purchasing new franchises. Not every American ran their life on credit cards and home equity loans; there are franchise prospects who have managed their money very well and are in a position to purchase a new business now. Often disillusioned with Corporate America and armed with experience and a savings account accumulated over many years, franchise prospects are making the leap to business ownership. The difference in today’s franchise development process is since there are less qualified prospects, franchisors can be more discerning. When self financing is involved, franchise prospects are also going to take a longer, harder look at the offering.

  So take this opportunity to evaluate your current franchise system, make those improvements you have been putting off to enhance your franchise offering and strengthen your current individual franchise units. You might just come out of this recent downturn stronger and in a position to really grow!

• Doug’s Sales Corner

  Where does the franchise value go?

  In the last newsletter we discussed finding the “value” in your franchise system. You may be saying, “Great. Found it. Now what do I do with it?” The answer is simple, be sure it is included every time someone reads anything about your franchise.

  Peter Drucker, the American Management Guru, said, “Customers pay for only what is of use to them and gives them value. Nothing else constitutes quality.” This means, prospects will be looking for the “value” in every piece of documentation available about your franchise. They may not even be aware of it but the underlying search for “value” is inherent every time they ask “what do I get for my royalty?” or “why should I buy your franchise?” The first contact prospects have with your franchise is through your advertising. Even if you are not stating the “value” in the text then the concept can still be conveyed through the theme and design of your advertisements.

  In the previous article, I used the example of a home improvement franchise whose “value” was helping save the environment because they used products that are either made from recycled materials, helped increase the energy efficiency of the home or reduced energy costs. In this example, the franchisor could create advertising pieces that reference how their franchise saves the environment in their message or use environment-themed photos to create the theme visually. Even the FDD should address the “value” in the franchise. For example, the description of your training programs in the FDD could list “use of recycled materials and how to promote how they save the environment.” All points of contact with a prospect, like franchise web portals and brochures, should address this underlying principle of “value.”

  But the real trick in maximizing your franchise “value” lies in the fact that prospects are not just asking about it before the sale. New franchisees want confirmation that they have made the right decision, so they will be looking for validation of the “value” of your franchise system in your Operations, JumpStart and Grand Opening Manuals. Reading through the manuals, new franchisees will affirm in their minds their choice of your franchise system if they see that your franchise “value” complements some of your procedures.

  Franchise “value” – It’s not just for sales anymore.

• Lori’s Tips

  How to Evaluate your portal success

  If you have determined that franchise portals are the best place to spend your advertising dollar, it’s now time to evaluate their success. The first task after deciding to begin advertising on the franchise portal is to write the copy for your ad. It is important to be as detailed as possible in explaining your franchise. You also want to make sure the differentiators of your brand are clearly described and appear early in the copy so you are sure to grab potential franchisees right off the bat.

  Additionally the imagery you choose can also send a message and separate you from the pack. Proper use of imagery can clearly illustrate the essence of your brand – like they say, “a picture is worth a thousand words.”

  Once you have chosen the proper advertising package and budget, it is time to start responding to your inquiries. A few basic benchmarks to keep an eye on are --- How many leads are you getting per day? Are these leads serious inquires? Are they ready to move forward within the next 45-60 days? Are they financially qualified? What other offerings are they currently reviewing? By paying attention to the type of inquiries you are receiving you can tweak your copy, imagery and filters to target the best franchise prospects for your specific brand.

  Many portals have data fields that a prospective lead must complete before they are forwarded to your business. You can check with your franchise portal representatives and make sure that your prospects are being filtered according to the standards you set up. If you have written effective copy, have eye grabbing photos and have chosen a franchise portal that gives your company maximum exposure, you should be enjoying steady inquiries that are qualified for your business.

  Also do not be shy about contacting your franchise portal representative to discuss placement and where your company can be most effective. Do they have a newsletter? Sometimes new clients will be given a month or two free on the front page of a franchise portal or newsletter on a trial basis. But if you never ask them, you won’t get to take advantage of those offers. So speak up and remember --- these are your advertising dollars and it’s up to you to get the most bang for your buck.

• Elizabeth Enlightens

  Many of you enjoyed our 1st Newsletter and we welcomed the positive feedback!

  Recently I heard someone say that a sign of a real sales pro is someone who can fall right into any selling situation and make it work. I say you don’t have to be born with a special gift to be this kind of sales professional. What you need, however, is a workable strategy, workable skills, organization, and some understanding of the harmony of phone-conversation with different personality types.

  In each newsletter we publish, I hope you gain additional knowledge and useful information that will allow you to develop into that kind of sales pro. And now it is time to continue sharing more nuggets on phone-lead management. In this issue I will discuss the art of “Introduction”.

  Introduction:
  As simple as the step of “Introduction” can be, it is often delivered incorrectly. When you first reach a prospect you don’t need to say something clever or astute to get their attention. Anyone can see through that kind of insincerity and resent you for wasting their time. Simply start the conversation with the simple courtesy of using the prospect’s name. The first words to say when they answer the phone are “Good afternoon Mr. Smith.” The moment they hear their name you have captured their attention. Most everyone responds in a positive manner to a positive sounding voice on the other end of the line. If you present yourself politely and intelligently then they will speak politely and intelligently to you.

  Then proceed to identifying yourself and your company. Besides simply giving your name and company name, go further and give them a brief description or introduction of your franchise company. The description of your franchise company should be brief, just to serve as a reminder of your offering, and tailored to highlight the most important criteria that make the franchise unique. Although the description of the franchise company is short, it is still an essential component of your introduction. Most likely your prospects are getting calls from various other franchise companies they have contacted for information. You want to be sure your offering is not mistaken for other franchises and that you stand out from the crowd.

  Next, let them know the reason for your call. Such as, “I am calling in response to your inquiry about XYZ Company”. It lets them know that you are calling because they requested someone contact them to learn more about your franchise company and that you want to help them get further knowledge about it.

  Well, it’s that simple every time. After you have properly done your introduction, then you may proceed with the goal of your call. Whether it is to set an appointment, have them complete a profile, etc. The point is that without a proper cohesive introduction you will not get on to your next step.

  See you on the next issue!

• Larry Listens

  What Franchisees are Looking For

  The dynamic between franchisees and franchisors has always been a challenging and delicate issue. Most franchisees enter a system with specific expectations. Often the franchisor is viewed as a safety net, essentially eliminating any real risk. The assumption of the franchisee is that “I’m investing in a proven system” and “since the franchisor has all the answers they will not let me fail.”

  Under this fundamental premise, many franchisees enter the system with extremely high expectations and continue to look for a level of support, cooperation, guidance and understanding that may fall outside the scope of what a franchisor is willing and/or obligated to provide to the franchisee.

  Whether you’re operating an early stage, mid stage or well established franchise organization, it is important to understand that the majority of franchisees are looking for the same thing. They want a business in which they can take pride, get comprehensive training, receive strong marketing support, and most important, they want communication from the franchisor. Although financial performance is the ultimate barometer by which franchisees (and franchisors) measure their level of success, it is only one of many factors franchisees utilize to gauge their satisfaction. Franchisees also require consistent communication from the corporate office, a gut feeling that they are being heard and that the franchisor has a genuine interest with regard to their challenges as well as their successes. This will go a long way toward meeting or exceeding most franchisees expectations and ultimately help produce quicker franchisee success.

• Partner Place

  10 Stress-Reducing Tips for Updating FDDs and
  Renewing State Registrations

  Rochelle Spandorf
  © 2010 Rochelle Spandorf

   

  Federal law requires all franchisors to update their franchise disclosure document (FDD) within 120 days after their fiscal year end (FYE). Likewise, state registrations must be renewed annually. Since most franchisors have a December 31 FYE, this is “renewal season,” the annual rite of racing the clock to meet updating and filing deadlines to prevent the lights from going out on franchise sales activities. Whether 12/31 or some other date is your company’s FYE, here are 10 stress-reducing tips for getting the job done right.

  • Know Your Deadlines. A franchisor violates federal and state franchise sales laws by offering or selling franchises with an out-of-date FDD or expired registration. Some states set registration periods to expire earlier than 120 days after a company’s FYE despite federal law. For example, Hawaii requires updating and filing by March 31, and California requires updating and filing within 110 days after the FYE. Docket all deadlines. Most states grant automatic renewal (subject to clearing comments) to early filers (e.g., California provides automatic renewal to franchisors that file the renewal application at least 15 business days before the current registration expires). Check states laws for automatic renewal deadlines and treat these as the real filing deadline, not the registration expiration date. Missed deadlines will force you to go “dark,” which means suspending all solicitation activities, including advertisements, trade shows and casual discovery days, and not closing sales in the pipeline, until you complete FYE updates and receive registration orders. Franchise registration states will not excuse late filings regardless of how compelling the excuse may be.
  • Call Your Outside Auditor Now. Cycling through FYE updates includes adding the latest FYE audit to your FDD. Late audits are the primary reason for missed deadlines. For 12/31 FYE franchisors who may need their audit by the end of March (depending on where they sell) and certainly by the end of April, you’ll be competing with April 15th tax season for your auditor’s attention. Impress on your auditor that filing deadlines are fixed by law and a late audit can cost you franchise sales.
  • Compile FYE Updates Now. All franchisors must update certain information in the FDD even if they make no program changes requiring modifications to the franchise agreement. E.g., Item 2 (changes in key management); Items 3 (litigation) and 4 (bankruptcy) (changes in the status of pending matters, new cases in which Item 2 individuals are defendants, and actions you’ve initiated against your franchisees during the last fiscal year (FY)); Item 7 (changes in opening costs based on recent experiences); Item 8 (payments from suppliers during the last FY and updates about officers who own an interest in recommended or mandatory suppliers); Item 11 (percentage breakdown on advertising fees used during the last FY); Item 13 (updates about trademarks and known infringers); Item 20 (franchise statistics and corresponding lists of existing franchise outlets and recent terminations); and Item 21 (adding the new audit). You’ll also need to update franchise seller disclosure forms. All of this information must be current as of the FYE, which means you have the data to compile updates now. Don’t wait until your audit is done to begin work.
  • Give a Heads Up to Your Franchise Sales Team. Let your franchise sales and operations teams know about impending deadlines so that pending franchise sales, discovery days and other franchise sales activities can be coordinated and, if possible, completed ahead of time. A few states do not provide for automatic renewal, which may cause a company temporarily to go “dark” if a state franchise examiner cannot process the renewal application before the registration expires (a frequent occurrence). If sales go dark because of a delayed audit or renewal application, explain to your sales team that they’ll need to re-disclose prospects in the pipeline with the new FDD and restart the 14 day waiting period once you clear hurdles. Discipline your sales team to comply with your directions for handling “dark” periods and powering up afterwards.
  • Take Stock of Your Contracts. FYE updating season is a convenient time to take stock of your contract commitments. Re-read all of the contracts that you ask franchisees to sign. Make sure that all of the obligations you impose on them are important and being enforced. Check that you still provide all of the services that Item 11 of your FDD claims you offer. Have your attorney re-read the contracts and advise you of any changes in the law that might affect the enforceability of any provisions. While you do not have to make any adjustments to your franchise program, it is convenient to do so at renewal time since that eliminates mid-year material changes and extra filings and filing fees.
  • FPRs: Update or Reconsider. If your company makes an Item 19 financial performance representation (FPR), the claim must be reevaluated based on FYE results for franchisees who fall within the claim’s parameters. If the latest data is not rosy, consider omitting the FPR from your updated FDD (explain what this means to your sales team). If you stick with a FPR, update the numbers (you may change the parameters depending on outcomes; just explain all assumptions). If your current FDD does not include a FPR, but the latest numbers are impressive, consider adding a FPR now since doing so will avoid mid-year material change amendment filings and extra filing fees. Don’t finalize the FPR without having your franchise attorney review it first. FPRs are a target for unhappy franchisees who don’t achieve disclosed results so it is important to make sure the FPR explains all of the bases and assumptions underlying the claim.
  • Inventory Your IP. The annual updating ritual is a convenient time to review your IP portfolio to make sure you’ve filed applications to protect new logos or brand names introduced during the last FY, filed the necessary applications to maintain existing trademark registrations, and taken steps to protect patents and copyrights valuable to your franchise system.
  • State Tax Initiatives. Cash-strapped states are stepping up efforts to impose income taxes and reporting obligations on out-of-state franchisors. Make sure you know about these extra duties in the states where you sell franchises and comply with them.
  • Review Website Content and Advertising. Your marketing department may be responsible for keeping your website content current, but may be unaware of what your FDD says. Review your website to make sure it is entirely consistent with the terms of your franchise offering. If your FDD has no FPR, then your website cannot provide any information to prospective franchisees about historical or potential income, sales, earnings, profits or break-even points. Make sure all other forms of advertising used to attract franchise prospects is legally compliant and registered in the states where the you distribute or publish the advertising.
  • Mandate Refresher Training in Franchise Sales Compliance. Before you complete FDD updates, schedule refresher training in franchise sales compliance rules and company sales policies for your franchise brokers and management who interact with prospects during the franchise sales process. Use the updated FDD and renewal season to remind your team of the rules of the road. A franchisor’s officers, directors, partners, managers, franchise sellers, and key management may be personally, jointly and severally, liable for franchise law violations even when the franchisor is a legal entity. Remember: franchise laws are consumer protection laws that are construed liberally in favor of franchisees even when the franchisee is sophisticated. Ignorance of the law or a lack of any intent to violate the law is no defense. Given the significant penalties involved, annual franchise sales compliance training is an ounce of prevention that is worth far more than a pound of cure.

• Counter Point

  The hot topic this month in the franchising industry was the recent IFA Convention in San Antonio, TX. We wanted to use this month’s space to recap the event.

  Upside Group Franchise Consulting was proud to be a sponsor of the International Franchise Association’s 50th Annual Convention, February 5 – 8, 2010 at the San Antonio Convention Center and Marriott Rivercenter in San Antonio, Texas. This year’s franchise convention added something special to its consistently dynamic programming, celebrating the past 50 years by looking back at franchising and highlighting some of the important work the International Franchise Association has achieved on behalf of its franchise members. Starting the first day and continuing throughout the event, educational sessions with presentations from franchise industry leaders and roundtable discussions on relevant topics filled the days. Each day was also highlighted by a general session headlined by a franchise veteran widely known throughout the franchise industry.

  On February 6, this year’s franchise convention was officially opened at a general session featuring a keynote address by former U.S. President George W. Bush. Prior to this keynote address, Mario Altiery, President of Upside Group Franchise Consulting, was one of the dignitaries invited as a major contributor to FranPAC to a special private reception for President Bush. During Mr. Altiery’s private time with the President they discussed baseball and franchising. Following the private VIP FranPAC reception, President Bush gave his speech, filled with humor and insight, to the 2,200 International Franchise Association members in attendance on the key elements of being an effective leader, important lessons learned from his dealings with world leaders and his fond memories of eight years living in the White House.

  The remaining days of the franchise convention concentrated on presentations and discussions revolving around the important issues facing the franchising industry today and in the future. Some examples of popular topics covered during the franchise convention included finding franchisee funding with the current tight credit market, growing your franchise system in today’s economy and building your franchise through global expansion.

  For the past 50 years, franchising has emerged as a driving force of the U.S. economy. Virtually every industry has seen franchising positively affect its growth through new business ownership, expanding customer markets and job creation. This year’s 50th Annual International Franchise Association convention confirmed that franchising will have an equally positive affect on the next 50 years of business.

• USG Services Spotlight

  Franchise Sales Coaching or Outsourcing – Your Choice

  Many franchisors begin their franchise journey as the owner, sales person, operations director, trainer and chief bottle washer but as a franchise operation grows it becomes impossible and ill advised to continue this path. This fork in the franchise road leaves you with two choices; outsource your franchise sales development or hire your own franchise sales team. No matter which road you choose to travel, it is still wise to get professional franchise help from franchise sales experts.

  The current landscape of franchising has placed a premium on quality franchise sales personnel. The franchise industry continues to expand while the training ground and educational sources for true franchise sales expertise remains limited. Upside Group allows quality franchisors to step back from the day-to-day selling of their franchise while still remaining informed and continuing the development of their franchise sales team.

  Because some franchisors prefer in-house sales people, a complete outsourcing solution may not be the answer, so Upside Group’s Sales Management Solution may be the perfect fit.

  Are your franchise salespeople losing quality prospects by inadequate handling of objections, or, unable to close deals in an acceptable amount of time? No matter if you’re selling automotive repair franchises or the next, great fast food franchise, franchise sales people handle many of the same objections and sales problems. The Upside Group sales team is comprised of experts with extensive knowledge on exactly how to handle candidates reluctant to pay royalties, prospects feeling confined by territory limitations and any other of sales’ many curveballs.

  Upside Group provides the following sales management offerings:

  • Management of your sales team
  • Weekly team coaching
  • One-on-one personal interaction with each sales person
  • Objection handling
  • Profile gathering
  • Lead qualification
  • Handling FAQs
  • How to close in fewer calls
  • Sales compliance

  And Upside Group wraps all these management services with comprehensive reporting back to the franchisor so you have accurate forecasting and a clear window in to your franchise sales organizations activities and development.

  Whether you take on Upside Group as a seamless part of your sales organization, or we train your franchise sales employees to secure immense success, the team approach between Upside Group and your firm will result in dominating growth.