Marketing Makes A Franchise Go 'Round
Printed in USA Today
by Nancy Rathbun Scott
Last year, the International Franchise Association surveyed its members to find out which companies were expanding and by how much. IFA members account for more than 80 percent of franchising's nearly one-trillion-dollar annual sales. Among the 50 companies who responded to the IFA survey, revenues at franchised locations were up, up, up-18.5 percent over a year earlier. On an average, respondents opened some 21 new units, too.
Behind the expansion, pushing both revenues and unit sales, are some of the most sophisticated marketing schemes in American business-schemes that fill a niche, add a new twist, follow the marketplace, adapt to franchisees' needs, and anticipate customer needs.
Fill A Niche
Soon harried corporate execs will get a better night's sleep. No more 2:00 a.m. panics, realizing that time's run out to print, copy, and mail a report by 6 a.m. That's because executives in need will now tiptoe down to the hotel lobby, pop into an MBE Business Express center, and take care of business.
Mail Box Etc.'s new Express centers are niche marketing at its best. With 3,500 stores worldwide, MBE already has gone increasingly ditital. Now, in MBE Business Express, the giant franchisor has tweaked its already-winning product and created a whole new market.
MBE's new credit card-activated, self-service business system will be open 24 hours per day. Customers simply swipe a credit card to gain access to laptop ports, copy machines, fax machines, PCs with email access, etc. "We're placing MBE Business Express initially in hotel chains across the country," says Ken Ross, vice president for domestic sales. But that's just the beginning. Target markets include convention centers, airports, colleges and universities, as well as military bases, supermarkets and banks.
Give An Old Coupon New Tricks
Glen Liset, vice president of sales and marketing at SuperCoups, points to the rule of three. "Three companies will make it and the others will fall by the wayside."
Liset believes the franchise company that helps its owners sell the most will survive and thrive. That's why the company is thinking outside the mailbox in order to find new ways to deliver the word on SuperCoups.
"Right now we're doing cable tv. We've set up a whole system where the parent company-MailCoups-supports and works with the franchise owner financially. The owner gets an editing studio, brokers who buy cable tv time, and trainers who go into the field and train franchisees how to shoot tv commercials." SuperCoups delivers coupons to customers via the Internet, too. "Some of our advertiser retailers are forming a mall right on the Internet. Consumers can sign up on the Internet for coupons for their locality and every month we'll e-mail coupons in the categories they want-food, dry cleaning, car wash. Consumers can just print them out and take them to the retailers."
Being price competitive is only part of the company's strategy. "You have to be an innovative company that adds value and services to your franchise and give your franchisees the ability to differentiate themselves and your product. Our franchisees aren't just selling a coupon. They've become local marketing consultants."
Fit the Franchise to the Franchisee
It's been a record year for Kinderdance, the leader in developmental dance and gymnastics programs for young children. For the first time since the company was founded in 1981, enrollment exceeded 6,500 kids. The company thinks that number will hit 8,000 in 1999.
Kinderdance president and founder Carol Kay Harsell credits the company's "Gold" program. This two-year-old ownership option fits executives who want to build a larger business based on hiring and managing others. Until the introduction of this program, Kinderdance only offered opportunities for owner-operators. Now owner/manager investors can buy the exclusive right to develop an area, then hire and train a team of instructors to provide Kinderdance programs to child care centers. "One franchisee now has an area of 1.3 million people on Long Island and another has 1.4 million in all five counties surrounding Portland, Oregon. These are very powerful women, very capable, real entrepreneurs," says Jerry Perch, vice president of sales and marketing.
Follow the Marketplace
Frulatti started franchising in 1994, but sales have picked up a lot recently. Fred Addington, Frulatti's franchise director, projects 100 stores by the end of the year. "We're fitting into a niche that's an alternative to everything else in the mall," he says.
One growth strategy has been for Frulatti to market as aggressively to mall employees as to shoppers. The company circulates coupons through the internal mall mail system to entice employees looking for Frulatti's fast, light fare -sandwiches, salads, and fruit drinks made with fresh ingredients.
Frulatti also has gotten a big boost from new signage. Formerly, many customers associated Frulatti only with its famous fruit "Smoothies." Now, the huge, upscale signs-visible far across the food court-let hungry shoppers know that Frulatti also offers an assortment of sandwich, salad, and yogurt. "If you look at the food selections in any food court in America, this 85-percent female audience is being offered fried chicken, pizza and corn dogs. When they see we're offering lighter, more wholesome fare that cuts down on the calories and cholesterol, they choose us." Addington says.
Make A Better Wrap
Sandella's, the gourmet fast-food franchise, is wrapping its dreams in pita bread, along with high-end soups and gourmet coffee, all presented in a trendy cafe. The newly franchised concept is growing gastronomically, with 285 stores sold since the first of June. Bruce J. Major, Sandella's vice president of franchise development, projects 500 shops by year's end.
"The concept is built on quality-in people, product, location, and overall customer experience-and simplicity-simple to operate, simple for people to come in, simple for us to communicate what we have, simple for customers to order and get out."
America's growing demand for healthy, high-quality cuisine will drive growth, says Major. At the same time, franchise owners can tailor a Sandella's menu to the regional palette. "Sixty percent of our food products are proprietary, including our pita bread we have 50 to 100 varieties of pita wraps on the approved menu and 45 to 50 soups. That gives franchisees important market adaptability."
Sandella's marketing strategy also focuses on building alliances with major hotel chains, hospitals, and universities. "Sandella's has no cooking on the premises, so we have no need for ventilation," Major says. "Our build-out cost is low and landlords love us."
Know Thy Customer
Michael Adler, chairman and CEO of MotoPhoto, is fervent about the business of people. Photos, he says, follow. "We are really dealing with our customers' lives. The first thing people retrieve is photos when their house burns down. Our franchisees have got to love people more than the technology."
That people-focused marketing philosophy has built MotoPhoto into a premium specialty retailer of imaging services with 334 franchise stores in the U.S. "We've been able to double the average American retailer's rate of growth by knowing more about our customers than anybody else and designing programs that meet her needs better than anyone else. Our mission statement says we are going to enhance our customers' enjoyment of their imaging experiences better than any other provider."
Not a company to rest on its tripods, Moto recently invested massively in market research to understand even more about customers' perceptions. They found that 66 percent of their customers are women and the men that come in are "honey-do" men (honey, do this; honey, do that). That led to new, more female-friendly store designs, rolled out in August. "It's not a techie store, it's a memory user's store. Most of our customers don't want to hear how sophisticated our technology is. They want to know that we can-and will-do whatever they want done."
A Franchise Shopping Spree
The invitations are out and up to 4,000 prospective franchise buyers are expected to attend the Los Angeles Franchise and Investment Expo coming up on October 2, 3 and 4. "There's probably not a better way in the world to sell a franchise in Los Angeles," says Tom Portesy, group vice president of Mart Franchise Venture. The company that has been producing franchise shows for nearly twenty years expects 100 exhibitors at the Los Angeles show.
Portesy says Expos give franchise companies a chance to strut their stuff before a select audience. "It's a very efficient way of marketing for a franchisor. A few thousand people are going to walk through looking to buy a business."
Franchisors, who meet prospective buyers face to face, can quickly size up whether or not further discussions would be profitable. "People can come in, walk around, visit a lot of different franchise booths, pick up information, meet some people, shake some hands, make appointments, ask questions and get a feel for the company and how they come across in that sort of setting," Portesy says.
The Mart Ventures Group produces 32 shows a year-usually two-day weekend events in different markets. Information on show schedules is available through Mart's web site at, or by calling 888-872-2677.
And what if you are a prospective buyer looking for a franchise? "Start at an Expo," Portesy suggests. "Just walk around the whole show. Note companies you think have some kind of product or service that interests you. Keep in mind that the actual opportunity might be very different from what you think it is. Then go back to them and ask some very specific questions. Make appointments."
Portesy says the company representatives typically stay in the city extra days to meet with individual prospective franchise buyers.

® copyright 1999 Nancy Rathbun Scott
Do not reprint without permission