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Franchisees Feeling the Squeeze of Value Menus

Franchisees Feeling the Squeeze of Value Menus

In a world where a lot of major expenses like housing,  medical, and education are growing at a much faster rate than typical inflation, it’s no surprise to learn that consumers are increasingly gravitating towards eating out less and using value menus when they do. It’s also no surprise that franchisors are pushing those value menus more than ever, in an effort to keep the sales numbers up and the juicy royalties flowing.  Unfortunately, that means a lot of franchisees are caught in the middle and fighting to stay afloat.

Subway is just one off many franchises forcing the squeeze onto their loyal franchisees. In this LA Times piece, one frustrated franchisee says he spends more than $4 to produce every $4.99 footlong. Add in the fact that Americans are drinking less soda and using more debit and credit cards to pay (creating additional transaction fees), and you’ve got a recipe for franchisee misery.

When you buy into a franchise, you’re stuck with what they give you. If they decide their California-based franchisees need to honor the same deals as their Midwestern franchisees (in spite of vastly different costs of living), you could find yourself struggling to make ends meet. When you’re talking about investing hundreds of thousands of dollars and many hours of your time, you need to know the company you’re partnering with is looking out for you.

How Can You Protect Yourself?

If you already own a franchise in a system that treats its franchisees poorly, you might just be out of luck until you’re able to sever ties. However, if you’ve decided you want to open a burger franchise or get into pizza franchising, there are things you can do to protect yourself.

  • Ask the franchisor how they respond to the challenges of operating in areas with vastly different costs of living. Do locations in places like Hillsboro, Illinois charge the same prices as locations in places like New York City, Los Angeles, and Washington, DC?
  • Find out ahead of time what the rules are on promotions. Do you  have to opt into all of them? When price cuts are required, do they subsidize it or reduce royalties in any way?
  • Make sure your contract doesn’t make it excessively difficult to change brands. Look at the terms offered by a variety of brands in your desired niche. Leave yourself a reasonable out.
  • Get your own lawyer to read through the paperwork. Franchisors have teams of lawyers writing contracts heavily slanted in their favor. The least you can do is get someone to help look out for your interests.
  • Remember that terms are negotiable.  You may not have much power as one single-location franchisee of a large and established company, but if you join a smaller system, especially in a new regional market, you may have a little more pull.

In general, don’t let yourself be swayed by brand names. Talk to other franchisees and attend conferences. Opening a franchise of any type is a huge investment, and no matter what they say, franchisors are looking out for the brand first. That doesn’t mean they can’t be wonderful partners, but it does mean you need to look out for yourself. Nobody else will.

Big Chains Out, Small Franchises In

Big Chains Out, Small Franchises In

One only needs to look at the recent United Airlines controversy (or worse, the Shea Moisture blowback) to see how quickly social media can drag down a large brand when something goes wrong. Even though we’re living in a time where major corporations thrive, there’s something to be said for the smaller ones – especially if you’re about to invest your life savings.

When you invest in a large chain, it only takes one bad incident at another location to see your franchisor’s name dragged through the mud. Your fate is tied to theirs, so their PR problems are your PR problems. If their CEO is insensitive in his or her responses, it makes you look bad.

Still, it’s great to have a partner, and that’s what franchising gives you. You don’t have to reinvent the wheel, or find suppliers, or negotiate bulk discounts, or figure out what makes a good location. You have help every step of the way, and that’s hugely desirable for a lot of people. So what’s the answer? Do you accept the help and take the risk of some huge fiasco hurting your business over something you had nothing to do with? Or do you go it alone and forgo all that help?

There’s actually another option. Smaller franchises can be a fantastic compromise. If you pick a company that has at least 5-10 existing locations, you’ll still know you’re getting involved with a company that knows what they’re doing. However, there are fewer other locations to cause problems – and even if something happens, it’s highly unlikely it would be big enough to warrant national news coverage.

Smaller franchises can be great from a customer standpoint, too. Many people love the polished look and feel of franchised restaurants, but they still like to try new things. As a result, they may be more likely to pick a nearby Pizza Factory pizza franchise over yet another Pizza Hut when it comes time to choose a place for dinner.

Small franchises can also be great for new franchisees since they’re better able to give you the time and attention you’ll no doubt need as a new business owner. It’s very easy to get lost in the shuffle when you’re dealing with a large multinational franchisor that primarily deals with multi-unit owners.

So how about it? Would you consider a smaller franchise? If so, here are a few to get you started in your search:

Steak N Shake Restaurant Franchise Introduces Vegan & Vegetarian Options

Steak N Shake Restaurant Franchise Introduces Vegan & Vegetarian Options

In spite of the fact that it has “Steak” in the name, the Steak N Shake restaurant franchise has increasingly been adding in options for their vegan and vegetarian patrons. What can you eat if you’re vegan?

  • Veggie Melt without cheese
  • Breads: Sourdough, rye, knotted buns, mini kaiser rolls
  • Sauces and dressings: salsa, ketchup, mustard, BBQ sauce, A1 Steak Sauce, buffalo sauce
  • Sides: Vegetable soup, guacamole, french fries, mandarin oranges, apples, garden salad, corn, black beans, tomato, lettuce, onions, pickles, red cabbage, dried cranberries, saltines, oyster crackers

And of course, vegetarians who consume dairy have quite a lot more choices – including milkshakes, pancakes, grilled cheese, cole slaw, onion rings, cottage cheese, and more.

This is a great sign that times are changing, and even burger franchises have to come up with options for the vegetarian and vegan crowds if they want to stay competitive in an increasingly health-conscious market. Taco Bell’s recent vegetarian and vegan guide is another indication that the market is growing, and those who adapt will be rewarded.

Find Your Niche with Gluten Free Offerings

Find Your Niche with Gluten Free Offerings

“Oh, another pizza place?”

When looking for your perfect fit in a pizza franchise, it is this statement you must avoid!  If your target market sees you as nothing more than one more pizza place in town, failure may be inevitable.  So what do you do to avoid this?  Find the Pizza Franchise that best fits you and your market, by knowing the newest trends in the market that a high amount of your customers may be looking for!  In this post we will be focusing on the new gluten free diet.  By deciding to go for the franchise with gluten free options, customers who are required to eat gluten free will flock to your door.  After months to years of sub-par cardboard tasteless pizzas, if you can offer these customers a tasty and beautiful gluten free pizza, you will earn their loyalty and their dollar.

Red Brick Pizza

When it comes to gluten free options Red Brick Pizza franchise takes the cake with a complete gluten-free menu avaliable, and the knowledge to back it up.  When a gluten free customer has been fighting those cravings and desires for something  more than what they have had the options for before, it is Redbrick Pizza is the one they will turn to.  From choices in Salads, Pizzas, Deserts, even Sandwiches, Redbrick Pizza goes over and above to give their gluten free customers the best of the best in Italian dining options.  Franchise opportunities are available everywhere download a Franchise Info Packet at RedBrickPizzaFranchise.com.

Pizza Hut

Yes you read that right.  Pizza Hut now is offering gluten free options.  While they’re selection is slightly limited, Pizza Hut is bringing this option to those in areas not serviced by many specialty dining options.  With a partnership with  UDI’s Gluten Free, Pizza Hut brings a gluten free pizza that the consumers can trust, from a known gluten free company.  Franchising information can be found at pizzahutfranchise.com

With a complete gluten free menu on offer since 2008, Garlic Jim’s swears their gluten free is the best on offer.  With over 13 full pizzas available in gluten free, they blow many other franchises out of the water.  With years of experience in gluten free operations Garlic Jim’s knows what they are doing, and will make the customers feel at ease with their expertise. You can find information on franchising at garlicjims.com/franchise/.

 

 

 

 

Grocerant… What’s That?

Grocerant… What’s That?

Restaurant examples are McDonalds, Pret A Manger Burger King, Pizza Hut, Papa Murphy’s and Starbucks, each having a fresh Ready-2-Eat or Heat-N-Eat fresh prepared food. In the Casual Dining sector Maggiano’s Little Italy offers a buy one take a 2nd home for free in their Classic Pastas menu section, Olive Garden, Chili’s, Boston Market and Denny’s.  That is to name but a few.

Drug Store examples Walgreens as a food destination yet Walgreens sells fresh soft-serve yogurt, coffee, sandwiches, salads  and sushi at selected stores, so they are technically grocerants.

Convenience Store examples are 7 Eleven, Wawa, Sheetz, Sheetz, and QuickChek, all of which sell fresh and prepared sandwiches, salads, beverages.

The numbers of Grocerants now offering their services are almost to many to number.  It is a trend that will only grow and grow as the American customer becomes busier and busier.

 

The Healthier Franchise Option, Frozen Yogurt

The Healthier Franchise Option, Frozen Yogurt

While thinking of which way to go when considering opening a franchise, don’t forget to look at those with healthier options.  Healthier franchises are the wave of the future.  People are making better choices for their own health, turning away from the greasy cheese burgers to lower fat options and fresh fruit. What better way to fit into this healthier eating trend than opening a Frozen Yogurt franchise?  Cool, tasty,full of probiotics, and better for the body than most other options out there, these Frozen Yogurt franchises have no where to go but up.  Here’s two of the fastest growing Frozen Yogurt franchises for your consideration.

Red Mango Franchise

Named in Entrepreneur Franchise 500 as the Fastest Growing Franchise, and Top Food Franchise of 2014 Red Mango is an established leader in frozen yogurt franchises.  With offerings from frozen yogurt, to fresh fruit smoothies, and seasonal flavors Red Mango’s menu has something for everyone.  With bright modern stores, and a small retail footprint, Red Mango is a fit for every community.  Read more on Red Mango, and download a Free Franchise Packet at RedMangoFranchise.com.

Menchie’s Frozen Yogurt

Opened in 2007, Menchie’s offers a variety of dairy and non-dairy frozen yogurt options.   In less than ten short years they have grown to be one of the largest frozen yogurt franchises in the world..   By selecting and combining fresh ingredients, they create distinctive products, which both taste good and are good for you.  Trying to always be a bright spot in their customers day, they design amazing environments for everyone to share a fun experience.  To learn more about Menchie’s franchising opportunities please visit Menchies.com

So don’t forget to consider frozen yogurt while on the hunt for your perfect franchise.

 

 

 

 

What’s the Role of Online Video for Franchisees?

What’s the Role of Online Video for Franchisees?

Online video can be a great way to enhance the web presence of your franchise location, though it isn’t right for every kind of franchise. If you own a Subway franchise in a busy office park, you’re going to have a steady lunch crowd as long as your location provides the basics – speed, cleanliness, and good service. On the other hand, if you own a gym franchise in a large city or suburb, for example, online video can give viewers a great sense of what you’re all about.

How do you know if you need video?

Put yourself in the customer’s shoes. Would you want to see the inside of the business or hear from the owner before taking the next step and making a connection or visit? If so, online video can help. Some of the franchise types (but certainly not all) that can benefit from video include: restaurants (though not as much for fast food), fitness centers, dance centers, dent removal, cleaning companies, any type of repair or service companies, business coaching, and retail franchises.

How do you make a good video? 

These days, even a candid smartphone video looks better than a high-end camera from 20-30 years ago. If you’re trying to showcase your facility, I would recommend hiring a local pro. It’s very hard to get a good video of that type without a little help. If you’re recording a personal message, though, it’s pretty easy to make a sincere and effective video all by yourself. Check out some online video tutorials if you’re not sure how to make and upload a good video.

Any caveats?

As with anything franchise-related, you may need to get permission from your franchisor.  Check your agreements to see what you’re allowed to do on your own vs what requires approval. The amount of freedom varies greatly by franchisor, so it’s best to double-check before you start uploading content.

If you have anything to add, or any questions, let us know in the comments!

Unhealthy Sales for Unhealthy Food

Unhealthy Sales for Unhealthy Food

For as long as I can remember, I’ve heard people say, “Man, I wish I could have gotten in on a McDonald’s franchise.” In most places, it’s been pretty much impossible to open a new one since all the good spots have been taken for a long time now – and the best locations don’t come up for sale every day. These days, though, I’m guessing you hear a lot less about people wishing they could have gotten in early with McDonald’s. They recently posted their worst sales decline in 10 years.

As consumers become more and more health conscious, they move towards slightly more expensive, slightly better quality food. Chains like Chipotle and Shake Shack have been doing well, while McDonald’s, often the poster restaurant for American obesity, is seeing declines. In a time when more people are going gluten-free, vegetarian, and vegan, McDonald’s doesn’t even offer a veggie burger (in spite of large online petitions requesting that they do so). Even Burger King has a veggie burger.

It’s especially puzzling that McDonald’s is missing the mark because many of their foreign locations offer the kind of health-conscious and upmarket items you can’t buy here in the US. Many countries enjoy vegetarian options, and French locations even offer macarons and tea in china. For more details on the collapse of McDonald’s demand, check out this article over at The Economist.

What does all of this mean for franchisees? Well for one, it means McDonald’s franchisees probably aren’t too happy right now. More importantly, it means that as investors and business owners, we need to think about food trends. If you’re considering a burger franchise, you need to make sure they’re adapting to the changing food landscape. Is it all greasy burgers? Or do they offer high-end extras like quality veggie burgers, shakes, unique sides, and perhaps even burger customization? Don’t discount the impact of specialty diets, either. That’s still an area where you can do great business. Because these choosy eaters don’t have good options everywhere they go, they become very loyal to the places that give them something reasonable to eat.

What do you think about the changing food landscape? Have you factored this into your decisions? Or are you styuck in a franchise system that doesn’t respond to the changing needs of consumers? Let us know in the comments!

Green Franchising: It’s Not Always What You Think

Green Franchising: It’s Not Always What You Think

Eco friendly stampIf being green and reducing your carbon footprint is important to you, there’s more than one way to incorporate that into your desire to own a franchise business. For some, it will be a direct and obvious approach, perhaps providing a green alternative to a common product or service. For others, it will be more subtle. If you’re interested in owning a business but you want to make sure you incorporate your earth-friendly beliefs, considering the possibilities below.

  • Provide a traditional service in a green way – If a cleaning franchise interests you, look for franchises that use earth-friendly products and procedures. Companies like Eco Maids and Mopfrog offer an alternative to the harsh, environmentally unfriendly products many companies use.
  • Choose a home-based franchise – By working from home, you can save hundreds on gas each year while minimizing your carbon footprint and spending less time in traffic. Like the sound of that? Check out an opportunity like Growth Coach business coaching franchise.
  • Consider a vegetarian franchise – Study after study shows that meat is horrible for the environment, and possibly not much better for our health. By making tasty vegetarian options available to your community, you’re making a real impact on the amount of meat consumed and the corresponding environment devastation. Consider a franchise like Maoz Vegetarian if this interests you.
  • Sell green products – By providing a source of quality eco-friendly products, you can help your entire community live greener lives. Consider Nature’s Pet Market for an eco-friendly retail franchise opportunity.
  • Help people reduce, re-use, and recycle – Tech waste is an especially big problem these days, and there are a number of franchise opportunities that let you help customers save money and reduce their e-waste. Check out uBreakiFix for gadget repair, or Battery Giant to help customers deal with their battery needs in an environmentally friendly way.

Do you have additional ideas for channeling eco-friendly impulses into a successful franchise business? Feel free to let us know in the comments. If you work with a green franchise and you’d like to be included on this site, don’t forget to drop us a line!

 

Specialization in Crowded Markets

Specialization in Crowded Markets

There are times when a certain market just feels right for you, but at the same time you realize your local market may not have room for yet another similar business. It’s happening frequently in the frozen yogurt world, especially in places like Southern California or New York City where you can hardly walk 2 blocks without seeing another froyo shop. As a result, many frozen yogurt companies have begun to innovate more with flavors and toppings, or even add in cafe offerings like sandwiches and smoothies.

But what about other industries, like hair salon franchises? How much variation can there really be in the world of affordable hair services? You might be surprised. SportClips is one salon franchise that has chosen to specialize with great success. Rather than trying to please everyone, their sports-themed salons cater to men and boys. And why not? Men and boys may not spend as much on a typical visit, but they also need trips to the salon much more frequently than most women. It’s much more noticeable if a man skips a haircut for several months than if a woman does the same. In tough financial times, women can even go years with minimal salon intervention – but men need haircuts to stay professional for work.

Blowout bars offer another highly specialized haircare service, and franchises are just now starting to spread across the country. Many women love the way a professional blowout leaves their hair, but they also don’t want to spend $60+/week at their normal salon getting it done. It’s expensive, and it can be difficult to make appointments quickly. Companies like BLO/OUT offer quick service, online reservations, and affordable prices for people who want salon-style hair on a more regular basis. Because blowout specialists don’t necessarily need the full skillset of a normal stylist, staff salaries are often less expensive, too.

Have you ever considered opting for a specialized franchise within a larger industry? Have you followed through? Feel free to share your experiences in the comments!