Author: Min Tang

Categories
Business Ideas

Basics of Franchising

When entrepreneurs dream about their future, franchising is rarely the starting place for their fantasy. While it’s not always choice No. 1, the benefits of franchising make it an enticing career opportunity for entrepreneurs. With an established brand and support system, franchises offer franchisees a chance to taste running a business while also giving them significant help.

“A franchise is a business with training wheels,” said Tom Scarda, founder of The Franchise Academy, a podcast dedicated to franchising. “For a majority of franchisees, franchising has proven to be a viable way to become a business owner. For the most part, it offers the lowest risks and the highest level of support. Because a franchiser doesn’t succeed until the franchisees do, you’ll find a team of dedicated professionals willing and able to help you every step of the way, from site selection to employee hiring to grand opening.”

A company that sells rights to its existing business model and products to another businessperson or company is creating a franchise. The exact definition, however, varies because of the numerous statutes passed by the Federal Trade Commission and individual states.

Federal regulations exist to protect the rights of both the franchisee and the franchiser. The FTC helps to oversee and enforce franchise laws to ensure that entrepreneurs receive full disclosure on the state of the business they are joining and that the franchiser’s brand is protected. [See related story: Should You Be a Franchisee? 5 Questions to Ask]

Early in the franchise purchasing process, franchisers must provide a franchise disclosure document (FDD) to the potential franchisee. Sometimes called an offering circular, the FDD outlines the fees, investments, and bankruptcy and litigation history of the franchiser company. There are also registration and relationship laws that govern the registration of the franchise, salespeople and advertising, as well as grounds for terminating a franchise, notice and cure periods, grounds for nonrenewal, and equal treatment. These vary by state.

Franchising requires a significant financial investment in return for the benefits it gives entrepreneurs. After paying the initial fee, the franchisee can begin setting up the business premises to sell products under the franchise’s brand name.

Before launching the business, the franchisee is expected to propose a store location, business model, business opportunities and royalties. Once the terms of the franchise contract are agreed upon, the entrepreneur can begin setting up the storefront. All those activities require an additional investment of money and time.

While the appeal of the franchise is an established name and branding, it may limit your business autonomy – that is, the ability to move and grow your business in different directions to take advantage of local business factors.

It’s important to find a business with a sustainable business model and a track record of success. Make sure to research where the company stands before joining as a franchisee. Rob Holt, the founder of Two Maids & a Mop, said his franchise underwent growing pains when initially transitioning from a traditional corporation to a franchise.

“In 2013, we only opened one franchise,” he said. “In 2014, we opened one as well. We didn’t really start growing until 2015, but during those first two years of franchising, even though we only had two, we really tried to perfect what we were doing.”

It’s important to understand the parent company’s current state. The first franchisees for Two Maids & a Mop were willing to remain patient as the company experienced growing pains, whereas today’s Two Maids & a Mop franchisees are joining a more established business. Neither option is right or wrong, but it’s important to know what situation you’re getting yourself into before spending the time and money to open a franchise. [There are more factors to consider. Read this related Business News Daily article.]

One of the biggest benefits of franchising is drawing off the experience and expertise of the entire organization. By joining an accomplished brand, you bypass many of the hardships in building a company from the ground up.

“Franchising takes the guesswork out of starting a business,” said Jonathan Barnett, founder and CEO of Oxi Fresh Carpet Cleaning. “They have established systems designed to give new franchisees a massive head start over competitors. On top of that, franchisees benefit from the power of an established brand. It’s hard to overstate the advantage of starting a business and having people know and trust your brand from day one.”

These are some specific benefits of franchising:

  • Perks of the particular brand (e.g., training and discounts)
  • Business model with a proven record of success
  • Easier access to money and loans
  • Low risk for banking institutions

Nearly every industry has a successful business practice being sold as a franchise, from retail stores to employment services. Finding the right opportunity for you depends largely on your previous expertise and passion.

Based on our research of top franchising opportunity lists from around the web, we’ve identified 10 industries where franchise business is booming:

1. Children’s enrichment. Parents want the best for their children, and educational franchises such as Kumon, The Goddard School and The Little Gym are helping the next generation learn and grow.

2. Hair salons. Hair care for men, women and children is a consistently in-demand service. Companies such as Supercuts, Sport Clips and Great Clips allow franchisees to stand out with a recognized brand name, while kids-only concepts like Snip-its give owners the opportunity to narrow their target market.

3. Fitness. While large gyms like Crunch and Retro Fitness are going strong, selecting a niche that’s missing in your area, such as kickboxing or Pilates, can help you stand out.

4. Paint-and-sip studios. This entertaining concept, which allows participants to have a glass of wine while they take a group painting class, is growing fast for both new and established companies, such as Painting with a Twist, Pinot’s Palette, Paint Nite and Wine & Design.

5. Pizza. This is a staple of the franchise world, with competitors still finding new and innovative ways to put together a pie or slice. Domino’s, Pizza Hut and Papa John’s still rule the market, but concept franchises such as Kono Pizza and Project Pie offer a fresh take on this classic food.

6. Frozen yogurt. The froyo craze remains in force, with franchises like Menchie’s, Yogurtland, Pinkberry and Red Mango continuing to grow.

7. Property management. Since 2008, the number of rental properties – and companies needed to manage them, like Real Property Management and Property Management Pros – has been on the rise, prompting growth and opportunity for those looking to fill that need.

8. Senior care. As more aging baby boomers require in-home or facility care, this field is evolving by offering services such as advocacy and placement. Franchise options include Caring Senior Service and BrightStar Care.

9. Spa and beauty services. Franchises such as Massage Envy, Hand and Stone, and European Wax Center are a part of the burgeoning self-care market. You can offer specialized treatments like waxing or massages or go for a full-service establishment with add-on services such as facials and threading.

10. Vending machines. Vending machines have been popular for decades, but the success of these models – and the variety of potential product offerings – has made franchising a viable option within the past few years, through companies including Fresh Healthy Vending and Healthier 4U Vending.

The Basics of Franchising and Today’s Top Opportunities [BusinessNewsDaily]

Categories
Work Life

Fun At Work Builds A Likeable Culture

Letting your employees have more fun around the office could make them better at their jobs, research suggests.

A study published in the Journal of Vocational Behavior discovered a link between informal learning, which is a common way employees pick up new skills that improve their job performance, and having fun at work.

Michael Tews, one of the study’s authors and an associate professor at Penn State University, said informal learning includes most unstructured, non-classroom forms of education.

“Most learning at the workplace occurs independently at the desk, or with a few other people, not necessarily in a classroom,” Tews said in a statement.

Creating fun work environments

The study’s authors believe it’s not necessarily the fun activities themselves that teach the new lessons to employees. Instead, they think it’s the fun atmosphere that creates a better learning environment.

Tews said employees in fun work environments are more willing to try new things and not stress about mistakes they may make.

“It’s easier to make the connection between fun and retention, or fun and performance to the extent that it leads to creativity, but fun and learning doesn’t seem connected at the face of it,” he said. “The gist of this argument, though, is that when you have a workplace that is more fun, it creates a safe environment for learning to occur.”

The study’s authors said the research revealed that while fun could be considered a distraction, it actually has the ability to improve employee resilience and optimism, which leads to better attention to tasks.

Fun also has the potential to bring co-workers together, which can foster learning among colleagues.

“It creates this group cohesion,” Tews said. “So, when there’s fun, then the co-workers may be able to get to know each other, have better connections, and be more apt to help each other.”

For the study, the researchers surveyed 206 managers from a chain of casual dining restaurants. The surveys had the managers rate fun activities, their own bosses’ support for fun, their attitude and informal learning at their restaurants.

The questions were designed to determine if management supported fun activities, such as team-building exercises and recognition celebrations, and how much overall support there was for fun on the job.

The study’s authors discovered that fun has more of an impact on employee learning than whether an employer has created a climate for learning.

“What we’re showing is that this fun on the job actually matters as much as – or even more than – that support for learning,” Tews said.

The study’s authors note, however, that fun cannot cure everything wrong with workplace performance. Tews’ previous research found that while fun can increase employee retention, it also has the possibility to hurt productivity.

Based on the current and past research, Tews believes employers should be selective in how they use fun to encourage learning and productivity.

“With most management tactics, there are always going to be pros and cons,” he said. “There’s never going to be a perfect workplace, there’s never going to be a perfect management intervention, so you have to choose your battles.”

Although Tews believes that, moving forward, it would be beneficial to examine other groups of employees, he does think that this current study supports the notion that fun has instrumental value in the workplace.

The study was co-authored by John Michel, an associate professor at Loyola University, and Raymond Noe, a professor at Ohio State University.

Tips for having fun at work

Creating more opportunities for fun at work tends to boost company morale. People are more prone to put effort into an activity they find enjoyable. If you don’t make your employees’ happiness a priority, you will notice a lack of productivity. Here are a few ways to create a fun and happy workplace.

  • Add games in the breakroom. Games aren’t only for kids. Breakrooms should never be sterile places with only tables and chairs for decoration. Fill the space with interesting things, such as brainteaser toys like Rubik’s cubes, board games, and adult coloring books. If you have the budget, spring for a television and a game console like an Xbox.
  • Create opportunities for socializing outside of work. Set up a happy hour once a month, or book tickets to attend a baseball game together. If your employees become friends, they are more likely to be happy in their positions.
  • Celebrate victories both big and small. Reward team members for a job well done. This could mean treating them to pizza one night after work or awarding comp time. Make sure you provide positive feedback more often than negative to keep an upbeat vibe at work.
  • Encourage a healthy mindset. Many workplaces are starting initiatives to help employees stay physically and mentally healthy. This could mean offering a discount for gym membership or arranging a workshop with a fitness instructor. Exercise helps reduce employee stress, and attending workouts together can be fun.

Loosen Up! Having Fun at Work Is Good for Culture [BusinessNewsDaily]

Categories
Entrepreneurship

Innovation During An Epidemic

Innovation comes from environments where ideas can connect. So, what kind of environment does an epidemic create when it comes to spurring innovation.

This is the very question a new infographic from Top Masters in Public Health Degrees developed by NowSourcing looks to answer. According to the report, ground-breaking innovations have come despite the tragic effects of epidemics throughout history.

This is a timely report because people are coming up with some innovative ideas to address many of the challenges brought on by COVID-19. The second part of the infographic looks at how individuals, small businesses and large organizations are coming together to solve these challenges of today.

Past Epidemics

As epidemics go, the Black Death of the 1300s was devastating. The plague as it is also known, wiped out up to 60% of the population in Europe. According to the report, it was responsible for changing the economic and social structure of Europe and the creation of a middle class. Furthermore, it sparked interest in literacy, art, and experimentation.

There were other outbreaks of the plague in England later on. In 1592, London faced an outbreak that shut down theaters for six months. This led Shakespeare to start writing poetry to make a living. And it was during this time he wrote Venus and Adonis, and The Rape of Lucrece. Another plague in 1606 also closed the theaters in London, and this time Shakespeare apparently wrote King Lear, Macbeth, and Antony & Cleopatra.

A plague from 1665 to 1666, was responsible for making Isaac Newton flee to the countryside where he came up with his theories on calculus, optics, laws of motion, and gravity.

In the U.S., the Boston smallpox epidemic of 1721, led to the spread of variolation which was responsible for reducing the mortality rate from 14% to 2%, as well as the first steps towards vaccines. And the debate of inoculation ushered in a new era in journalism.

The Spanish Flu of 1918 was responsible for the death of 50-100 million people. The pandemic marshalled in a new era of public health. The underlying causes of illness, like diet and living conditions were now being considered.

COVID-19

A little over a century after the Spanish Flu, COVID-19 is wreaking havoc around the world. And although the death rate is nowhere close, the economic impact has been overwhelming. On the negative side, it has highlighted many of the shortcomings in the healthcare industry as nurses and doctors battle the virus woefully underequipped.

With increased connectivity and technology, innovators around the world have responded by making the equipment healthcare workers desperately need.

Today’s innovators are addressing ventilator shortages by using 3D printers and designing simpler ventilators; distillers are producing hand sanitizers; companies are making washable and reusable masks; apps are tracking the virus and Facebook, Google, and Twitter are combating the spread of misinformation.

How Epidemics Spur Innovation [Smallbiztrends]

Categories
Sales & Marketing

Mobile Advertising Declines

As the coronavirus outbreak continues and the government extends social distancing recommendations, people are spending more time on their phones. And advertisers will likely spend less on mobile advertising.

A March 19-22 survey by InMobi found that 70% of US consumers in areas under lockdown are spending more time on their phones. A good proxy for how much additional time is what happened in China in February. According to App Annie data, the average smartphone user in China spent an additional 30% of their time on their mobile device in February. Italy, which was at the beginning of an incomplete lockdown period at the end of February, saw an 11% increase in daily mobile time spent, while South Korea and Japan—both experiencing outbreaks in February and selective quarantines—saw daily mobile time spent increase 7%. In contrast, the US saw no year-over-year change in February.

The increase in time spent, however, is not easily monetized for app and mobile web publishers. First, much of this increased time is on platforms that aren’t heavily monetized by advertising. In Italy, Facebook has seen traffic increase by 70%, with group calling increasing by 1000%, Facebook Live and Instagram Live up 100% and messaging up 50%. None of those features can be monetized easily.

More importantly many advertisers don’t have the money now to buy the additional impressions, which has depressed CPMs. Adomik, which lets publishers track their ad monetization, released data this week that showed a 17.2% drop in week-over-week ad revenues in the US between March 10 to March 15 and March 17 to March 22. The biggest drops were in direct deal and programmatic guaranteed, with real-time bidding dropping 15%, followed by CPM dropping 14.8% and mobile dropping 13.3%.

Twitter and Facebook are reducing their ad revenue expectations for the rest of the quarter despite having large traffic increases, a pattern being repeated across digital publishers. The New York Times predicted a drop in ad revenues “in the mid-teens.” For the many media companies on the edge of viability, the boon in traffic will only be a cruelly ironic twist to their inability to make enough money to maintain operations. Facebook pledged to spend $100 million to bolster local news outlet, which will help somewhat but not enough to save many publishers.

In February, we released our latest estimates for mobile ad spending, which we expected at the time to grow from $87.3 billion in 2019 to $105.3 billion, a 20.7% increase. Even under the rosiest scenarios, this topline number for 2020 will not be reached because of COVID-19, but it’s still a good baseline to see the ad landscape before the pandemic. The Adomik figures seem ballpark for the drop in revenue—i.e, 10% to 20% over the next few months. Google and Facebook account for the majority of mobile ad spend, and they’re likely to be hit by the steep drop in local business, retail and travel spending. A rapid resolution to the crisis could lead to a decent rebound in spending in Q3 and Q4, but it’s too early to make any clear predictions that far ahead.

There are a few bright spots. Mobile gaming heavily relies on advertising from other games. InMobi’s survey found that 56% of US consumers have increased time playing mobile games. This might be one of the few publishing categories that have benefited from the lockdown rules hurting most of the industry. Subscription video companies have also seen traffic and subscriptions rise and are more immune to advertiser shocks.

Mobile Advertising Declines Due to COVID-19, Despite Increased Time Spent [EMarketer]

Categories
Business Trends

How B2B Behaviour Changed During This Pandemic

As consumers have shifted how they shop and what they buyduring the COVID-19 pandemic, business buyers are also altering their spend. We already noted how much media buying will change because of the coronavirus outbreak, but B2B buyers will alter several other spending categories as the economic fallout progresses worldwide.

Before this global health crisis, US B2B buyers were concerned about the possibility of a recession. In a November 2019 survey from digital commerce solution provider Avionos, more than 80% of US B2B buyers said they were concerned about a recession in 2020.

When asked what would help them get through a recession, US B2B buyers’ answers focused on vendors providing better resources: Roughly a third said they would need more quality and accurate information about what they are buying, while 23% of respondents noted they would need to have more confidence in the purchases they are making.

Now that a recession is looking more likely, companies are going to cut spend in order to mitigate losses, prevent layoffs and in a worse case scenario, avert going out of business.

In many cases, products and services that aren’t essential will be the first to get cut, at least in the short term. For B2B companies selling products that aren’t considered essential during this time, the next few months will not be easy. They should not pursue the hard sell or be too aggressive with marketing and sales touchpoints, which will come off as insensitive and turn off buyers who face tough decisions about where they need to cut. Instead, B2Bs should show compassion and offer solutions and deals while being consultative. This might not bring in revenues right away, but it will ultimately help them maintain and restore relationships, which will be beneficial once budgets return to normal.

Some B2B buying will still occur and be necessary, especially for B2B tech buyers seeking software to enable remote working. An email survey conducted in mid-March by software reviews site TrustRadius asked software buyers worldwide about how they expect COVID-19 to impact their spending. Four in ten noted that they will spend more at least initially in order to make sure their employees can work from home with limited hiccups. That same survey found that 30% of respondents of those spending more purchased videoconferencing software, and 15% bought security software, such as VPNs and firewalls, to keep company information protected while working remote.

About a quarter of respondents said there would be no change in their spending budget, and 15% noted they were unsure. For those landing in the unsure category, TrustRadius asked why, and 39% of that respondent base said it was too early to tell.

Only 18% of respondents from the US B2B buyer sample said they would spend less because of the pandemic. Roughly 30% of those spending less were looking to make “aggressive cuts.” And although there is uncertainty about when the pandemic will cease, 69% of those reducing spend said that they plan to return to previous budget allocations for software purchases.

“No one is buying, but everyone is learning,” said Michael Brenner, founder and CEO of B2B content agency Marketing Insider Group. “Outside of the healthcare sector, remote work tech and collaboration software, B2B buyer’s just aren’t buying right now. But they are researching online.

“My analysis [in late March] of more than a dozen B2B sectors found that daily B2B keyword searches are down on average 35%. We are advising clients to slow or stop their spend on promotional ads, continue publishing educational content and even to take advantage of low CPMs in digital to promote helpful guides and webinars,” he said.

For now, B2B marketers need to be patient as their buyers, including current customers, are making hard decisions. Meanwhile, a priority should be to audit existing marketing plans. Are there any that are irrelevant or in bad taste because of the new reality bought on by COVID-19? If so, cut it or rework it. What email communications are going out? Do those serve the audience in a practical way? How can brand messages and marketing add value and not noise? Is there a way to pivot in an authentic way to show how the company will serve those affected by the pandemic? If so, marketers should strongly consider implementing those tactics to maintain client trust and relationships.

How B2B Buyer Behavior Has Changed in Light of COVID-19, and What Marketers and Sellers Can Do Now [E-Marketer]