Franchising: It's in the System
Printed in USA Today
by Nancy Rathbun Scott
For the last three days in May, thousands of prospective franchise owners will tour the world's largest franchise event-the International Franchise Exposition at the Merchandise Mart in Chicago. What's drawing the crowd?
It's not burgers and fries, folks. These would-be entrepreneurs have a genuine interest in buying into what many regard as the best business system ever devised: franchising. Whether it's food or flowers, tools or travel, many business owners feel safer backed by a solid franchise system.
Turn the key and turn on
At Big O Tires, nothing is left to chance. From the finer points of opening and closing a business each balancing the specifics of the tire and automotive repair industry and undercar service marketing and sales programs for a host of product financial dealing with employees and customers...through the intricacies of point of sale technology-all the answers are in Big O's franchise system.
This systematic approach-refined over time and communicated in extensive training and follow-up-gives novice franchise owners the necessary leg up in highly competitive industries. "Many of our franchise owners are coming out of corporations, so many come with no knowledge of the automotive industry," says Greg Foster, Big O's national director of training operations. "Franchise candidates are required to attend five weeks of training, where we cover just about every issue an owner will deal with in the operational side of the business."
But that's only the beginning. With the integration of state-of-art point-of-sale technology into the system, franchise owners can instantly call up an analysis of their sales and profitability. "Our order system ties our franchisees to corporate distribution centers so they can reorder, check inventory, and have instant credits issued on adjustment products with the click of a mouse," says Foster.
Big O's marketing system frees franchisees to concentrate on service. "We do just about all the marketing for our 415 stores out of our national office here in Denver," says Foster. "We provide them with point-of-sale materials, specials, promotions, and national advertising flyers."
Follow-up training systems bolster Big O's successful track record. "Any franchisee can send his employees to the national training center at any time for follow-up training at no charge," says Foster. Almost half their trainees last year were existing store managers, sales people and technicians.
Franchising IS the system
Some prospective franchise owners are surprised to discover that-in the long run-a well-muscled franchise system can carry more clout than a mere household name. Experts like Mike Kiick, vice president of franchise expansion at Scottsdale-based Frozen Fusion Fruit Smoothies, believe that a solid system-built on experience-undergirds any successful franchise. "In Frozen Fusion, we bring franchising experience from Ben & Jerrys, Swensons, Gibraltar Transmissions, and American Speedy Printing Centers. These are all companies we've built, both nationally and internationally. When people look at Frozen Fusion, they give us a larger-than-life look because of the experience of the franchisor."
With 18 stores in development and more coming on board every day, Kiick expects Frozen Fusion to kick backsides in the fruit juice smoothie business. "We spent two years in research and development. We offer an amazing product in a dramatically growing market. It's made fresh for the consumer-who gets to watch the oranges, strawberries, bananas and blueberries go into the blender in front of them-in less than a minute. We have 200 years of franchise experience in this company. This whole concept is larger than life."
Product mastery
Comprehensive inventory and nitpicky management of hard-to-find- but commonly used-items is another sure way to capture market share: That's what Batteries Plus is banking on.
This growing franchise company started franchising just five years ago, but president and CEO Ron Rezetko expects his company to become the "McDonald's of batteries." Say what?
"We have become a battery dependent society," Rezetko explains. "There's the S.L.I. group-starting, lighting and ignition-and the specialty group, like batteries for electric toothbrushes, watches, cell-phones, laptops, medical and hospital equipment."
Batteries Plus brings just the right energy to the highly-charged battery market. "We go from A to Z in batteries. Our marketing emphasizes a distinctive appearance that builds brand awareness. Our service is consistent. We offer a bright cheerful place to shop. We install and service. We know how to source and buy products from suppliers at the right terms. We can even build battery packs. It's a very sophisticated operation."
Bill Forester, 1980 captain of the U.S. Olympic swim team, was impressed enough to ante up for a Batteries Plus franchise. "My initial reaction was, 'I can go to Wal-Mart and get all the batteries I need.' But once I walked into the store, all my questions were answered. Batteries Plus has batteries for everything. It took me four months to figure out uses for some of those batteries."
Forester says he's still unable to fill orders about two percent of the time, but to this winning athlete, that's just another challenge. "To be America's battery store, we need to offer what customers need 100 percent of the time. That's why we offer technical assistance. I love to track down old batteries."
Sales wizardry
Jackson Hewitt has some 1,500 stores and 600 franchise owners. System-wide revenues added up to about $86 million last year. "We're a seasoned business," says president Keith Alessi.
In a competitive market like tax preparation, seasoning adds up to tasty sales and that's where Jackson Hewitt's system feeds franchise owners. "We do all the research, creative development, and placement of ads in the national media, including cable and broadcast buys. We have developed point-of-purchase brochures and full specs for all signage. A variety of camera-ready newspaper ads in different sizes and shapes is available online for franchise owners to download. We do direct mail to past customers. And, we run infomercials, with a national 800-number to which people can call for the closest franchise owner."
The company also teaches courses for people interested in learning about taxes and sponsors tax schools for the general public. Both activities lead to new customers and new employees.
Flexibility in a shifting market
Golf lovers love MacBirdie. That's the golf-gift retail store that sells apparel, accessories, novelties and gifts to greens goers and their families (about 75 percent of MacBirdie shoppers are women buying gifts for golfers, says Chuck Lunde, president of the burgeoning company). But MacBirdie's ability to quickly adapt to changing market demand has been the engine driving sales up. "Our biggest growth has come in the home accessories area: artwork, pillows, lamps, clocks, furniture, wallpaper. We can now provide all the things people need to decorate a room in their home with a golf theme."
The company has just released its first corporate catalog, too, which will enable franchise owners to prime lucrative company wells. Meanwhile, as sales rise, MacBirdie's biggest problem has been finding available mall space for new locations in a booming economy. Here again, the franchisor has adapted. "Difficulty leasing in malls has forced us to consider other venues. We're looking at downtown areas, not only for gift shoppers but for the corporate market."
With 12 stores open now, MacBirdie expects to have 30 by the end of the year.
Recruitment, training and networking systems ring success
"I'm not just in the business of selling franchises, I'm in the business of attracting high caliber people to it," says Gerry Rhydderch, Remedy Temp, Inc.'s vice president of franchise development. "Finding the right people who want to use our recipe is a business courtship. We put them through a rigorous Discovery Day process where they meet the people who make up Remedy."
The prospective franchisee must click with Remedy's culture and philosophy. "If someone sees a little bit of Remedy when they look in the mirror, but we can't see a little bit of them when we look in the mirror, it's not going to work," says Rhydderch.
In this courtship process, prospective franchisees get answers from Remedy's vice presidents of technology, marketing, training and risk management. "We go right through this together. They check us out, talk to all of our franchisees, visit our franchisees' offices in their local area. If it all fits, we go to the altar together and get married."
In this marriage, commitment provides franchisees with two weeks of pre-training school, where Remedy helps the new owner find a location and do space planning. "And we train them in our fully automated system, from applicant entry and testing, right on into sales process and placement."
Networking systems-like Remedy's mentor program for rookies-also increase comfort levels. Feedback from franchise owners, who are networked through regional offices and annual conferences, strengthens the Remedy system. Soon everybody will be linked through the Internet and intranet software, too.
Rhydderch speaks for all legitimate franchisors when he says, "Our commitment to our franchisees means working together to generate better systems and more business."
The System Sets Them Apart
"What makes you so different?"
That's what potential employers often ask when approached by Remedy Temp, Inc.'s franchise owners. Gerry Rhydderch, vice president of franchise development for the company that does business as Remedy Intelligent Staffing, has the answer: HPT-Human Performance Technology.
All clients want the same thing from temporary staffing agencies, Rhydderch points out- to find them workers who are reliable, trustworthy, dependable, have a good attitude, and are good team players. "How you test and place people is what's important, since everyone in the industry is drawing from the same pool of workers. And, we're the only company that has validated behavioral testing.The human performance technology that Remedy developed tests people for just those qualities. With HPT, we are able to make a much better placement. For example, we won't make the mistake of placing an introverted person in a job requiring a lot of interaction with people."
A "3-D"sales philosophy-define, develop, deliver-rests at the center of Remedy's system. "We need to know the client's staffing problems before we can satisfy their needs. We take a very long-term view of our relationship with clients. Temporary staffing is no longer just an add-on, but a business strategy."
For example, the company's fully automated system matches temporary associates with clients through Remedy's sophisticated, proprietary Intelli-search software. "Remedy has made a commitment to technology to drive sales," says Rhydderch. "With HPT steering placement, we are able to meet our clients' needs more precisely. In addition, we offer our clients a system for recruiting people who only meet that particular client's benchmark. We can establish benchmarks for any position or set of positions by putting our client's top people from any department through HPT testing."
As with all successful franchise ventures, Remedy's tested and proven system lies at the heart of what franchise owners want. Now marking its 33rd year, the company's business format is replicated in 130 franchise offices and 90 company owned offices.

® copyright 1999 Nancy Rathbun Scott
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