Franchise Blog

How McDonald’s is McScrewing Their Franchise Up

Do you remember when you could drive up to your nearest McDonald’s franchise, order your food, and get in and out in less than 5 minutes? I do; it was last century…

Something that used to be really important at McDonald’s all of a sudden isn’t; convenience.

A Warning

If the suits at corporate headquarters don’t get it together, and soon, their customer base will start spending their money elsewhere. From what I’ve seen first-hand, elsewhere is Burger King. I’ll explain…

From Fast Food To Slow Food

I consider the McDonald’s franchise system to be world-class. I’ve written plenty about this top franchise over the years, and I watch what they do like a hawk. They are the most important franchise in the industry. But, their corporate team isn’t paying attention, and that troubles me. And considering that they’ve experienced over 100 months of consecutive positive global same-store sales growth, maybe they don’t feel that they have to. Plus, there’s a major transition taking place internally, and the team could be focusing on their own futures.

That’s because a new CEO is jumping on board in July.

One of the first things he needs to do is become a secret shopper. He needs to travel around the US-by car, and pay a visit to at least a dozen McDonald’s franchises-preferably the newer ones. He needs to order his lunch or dinner from his car in those new, cutting-edge Double Drive-Thrus. Then, Don Thompson-the new CEO, will understand what I’m getting at.

The Double Drive-Thru Fails

It’s frustratingly slow, customers are confused as to who should proceed to the cashier’s window, and the employees aren’t being trained correctly. Other than that, I’m a very happy McDonald’s customer.

One Simple Fix

Just shrink it down. Look;

I snapped that picture at the new McDonald’s restaurant that just opened less than a mile from The Castle. What do you see?

I’ll tell you what I see; too many choices! No wonder cars and trucks are backed up 8 deep x 2, (Double Drive-Thru) at lunch and dinner. (Breakfast, too?) I’m no mathematician, but looking at that menu board, I’d guess that there are around 250 possible variations in the way that customers can order. That slows things up a bit, especially with poorly-trained staffs. Now, I’m not saying that every McDonald’s franchise that’s been equipped with the Double Drive-Thru is a disorganized mess. I can only go with what I know from the two that are open and operating in my local area. It’s really disappointing. Especially for someone who’s constantly extolling the virtues of the McDonald’s franchise model.

Another Fix

McDonald’s stock price could rise if corporate uses this suggestion;

Add two more drive-thru windows!

If franchisees are going to the trouble, (and the expense) to build Double Drive-Thrus, why not just go for it, and have them build another set of drive-thru windows? (One with a cashier, and one with order fulfillment.) The lines would certainly move a lot faster, revenue would go up, and the slimmed down menu board would give customers less choices. (Giving customers less choices isn’t necessarily bad.) You’re supposed to be a hamburger restaurant. Serve hamburgers! (And a few chicken selections, a salad or two, and some fancy profitable coffee.)

One More

Retool your training program. You’re employees are (in general) not making you look good! I’m not sure what’s missing, but it sure seems like they don’t know what they’re doing. Slow service and mistake-prone orders are a deadly combination. Eventually, some customers will go elsewhere. Like Burger King.

They’re Fast

I buy fast food at least once a week. And, I’m not always going to McDonald’s. Sometimes, I’m just not into waiting. And waiting…

So, I go to Burger King, instead. I go there because I can get my hot food in 2 minutes. Two. Not only that, the employees there are pumped. They are all smiles, and have tons of energy. It’s like they live to provide super-fast service. There is a team feel to the operation.

Now, they do make mistakes, and I have had orders come out wrong, once in awhile. But, somehow I don’t mind as much there. Interesting.

Is it Enough?

I don’t think that Burger King will surpass McDonald’s, franchise unit-wise, anytime soon. And, I’m not sure if most Burger King franchises are managed the same way as the one that’s by The Castle. (Maybe you can let me know how you feel about the Burger King near you, service-wise.)

But, they’re onto something.

Now, if only the french fries at Burger King were as good as the ones at McDonald’s….

Subscribe To Get Free Franchise Blog Updates

Filed Under: franchise advantages, franchise experts, Franchise Purchasing, McDonald's

Could You Make it As A Franchise Owner In Australia?

By The Franchise King® Leave a Comment

First off, why would you even want to become a franchise owner in Australia?

Why not just do it here in the US? We could use the business. Just think of all the people in your local community that you would impact? C’mon; please?

(Courtesy of Arianne’s photostream-Flickr.)

Just think; you could be in business fast.

Other Advantages

If you have what it takes to become a franchisee in the US, you have a real shot at achieving your dreams. (Or, at least some of them.) There are several great things about franchise business ownership, and if you’ve been following along here for the past 5 years or so, you undoubtedly know what some of them are.

If you’re new to The Franchise King Blog, first of all, welcome…I appreciate you spending some of your day with me. I post articles on all aspects of franchising several times a week, and I promise that you won’t fall asleep reading them. I’m not into word-stuffing-but, I am into always keeping my readers on their toes, and I’d like you to be one of them. A great way to become a regular reader here is to Subscribe. (It’s free.) That way you’ll receive information on all the latest trends in franchising, franchise news updates, my self-produced franchise videos, and of course my always gentle and never sarcastic, (right) opinions on the world of franchising. Hang out for a couple of weeks and see why I’m The King. I’m loved by all.

There really are several great things that you get as a franchisee. Like these 5. And, as much as I’d like to see you open a new business down the street from me, I know that you do have choices. It’s part of being an American. You’re free.

Thanks to these men and women.

Move To Australia

Let’s say that my powers of persuasion didn’t work on you, and you’re still hell-bent on moving to Australia to become the owner of a franchise. Fine. I have some tips…

Actually, David Wilson does. But first, he lays the franchise model out nicely;

“On paper, because its structure has been road-tested, a franchise is a money-making machine. In theory, any dropkick can run one successfully – all anyone has to do is get on with it – execute, exploiting the turnkey convenience.”

I like this guy already. He continues…

“Almost a quarter of Australian franchise owners squabble with their parent company, often taking legal action, according to a Franchising Australia 2010 report. Find out what mindset you need to avoid bust-ups and make franchise ownership work for you. Above all, experts agree, stick with the programme – there’s a reason you never see yellow arches painted pink.”

David understands franchising. Do you?

Do you understand that there are no guarantees?
Do you understand that you have to follow the rules?
Do you understand that you’ll need massive amounts of energy to be successful?

I hope so. In the meantime, check out The 10 Traits That a Franchisee Needs, Aussie style.

Then read the American version, over on CNBC.com

Notice any differences?

Filed Under: 2012 Franchise Trends, Australian Franchisees, CNBC.com, franchise advantages

How Food Franchises Can Make More Money

By The Franchise King® 2 Comments

If you’re the CEO of a food franchise, and you’d like to increase unit revenue, read on…

I know that you want your franchisees to be fat and happy. (With profits) I also know that your cost of doing business keeps increasing, which is really frustrating.

But, you’re the leader, and you’re in charge of solutions.

Use Geofencing

What is Geofencing?

It may be the answer you’ve been looking for. It’s tied to a huge trend; the increasing use of mobile devices for everyday activities.

Like eating. I’ll explain…

Let’s say that Jill Stressball, a 35-year old mother of three, just picked one of her kids up from Little League practice, and needs to drop her other two kids off at soccer practice. Of course they’re all hungry, and she has about an hour to play with. While she’s driving around, trying to decide where to stop for a quick lunch, her phone starts chirping. She has her oldest take a look at the message coming in via text, and see’s that it’s from a restaurant nearby.

As a matter of fact, it’s only 3 blocks from her current location.

The text reads, “Today Only: Stop by for lunch, and your beverages are on us!”

She just decided where to bring the kids for lunch. And, geofencing made it happen. Here’s how….

From Mobile Commerce Daily;

”Geofencing enables retailers to recognize customers when they are within a predetermined radius around a specific location and send them messages and special offers designed to encourage them to walk into the store and make a purchase.”

They Opt-In

If you set geofencing up correctly, right from the start, you can have your potential customers opt-in. They’ll give you permission to notify them when they are in a specific geographic area that you can determine. For example, you can set up the system to only work within a quarter-mile radius of your franchise. Or a mile.

And, it’s not just food franchises that can use this cool technology to increase their revenues-and profits. Retail franchises can use geofencing, too.

Are your senses starting to awaken? Are you thinking of the possibilities?

Good!

Could geofencing give your franchise a much-needed boost?

Filed Under: 2012 Franchise Trends, Apps, Franchise Technology

A Perfect Example

In a recent article I wrote for Virginia’s Cox Small Business Navigation Program website, I encouraged every serious would-be franchise owner to do a little exercise.

(Not that kind of exercise.)

If you’re thinking of buying a franchise, the exercise I suggested you do in that Cox Business article is designed to help you hone in on what you’re best at. That’s because one of the ways that you can significantly increase your odds of success as a franchise owner is to match your top skills with franchises that can allow you to use them for maximum benefit. (Profit) Are you with me?

I hope you’re with me, but more importantly, I hope you do the exercise!

Sadly, most of the people that I’ve met over the years, either at franchise seminars that I present at, or during my franchise ownership advisory sessions, don’t. It’s not that they don’t want to do it…not at all. They just didn’t know that the franchise business discovery process starts with them-not the franchise opportunities themselves.

Franchise buyers that don’t take the time to do a serious amount of self-discovery, frequently end up in the wrong franchise business. (For them.) Check out this example…

Someone that’s pretty close to me had to close his franchise business down, several years ago. He invested in a coaching franchise. Read about what a coaching franchise is, and then pop back.

My friend is really good at what he does. He’s in a pretty specialized area of business, and it’s one that was growing back then, and still is today. His franchise business should have been able to do pretty well just based on the niche he was in. But it didn’t. And, the reason is simple;

He didn’t possess the top skill needed to be a successful business coach. Do you know which skill I’m referring to?

That’s right; he wasn’t a skilled salesperson.

In a business coaching franchise, actually, in any franchise business that’s in the B2B space, the most important skill that franchisees need to possess is the ability to sell. My friend was not, (and is not) a strong salesperson. He never had a chance. He made two mistakes;

1. He didn’t take the time to match his top skills to a few franchises that would allow him to use those skills, and have a real chance of success as a franchise owner.

2. He never found out what his day to day role as The Owner would be.

Don’t Assume

My friend assumed that his role as The Owner of a business coaching franchise would be one in which he coached small business owners. He knew he could do that, especially since he possessed a tremendous amount of knowledge in a growing field that lots of small businesses wanted to learn how to capitalize on. Yet, he still had to close his franchise business down. He quickly became an ex-franchisee. Why?

Today, he’s an ex-franchisee of a well-known business coaching franchise because he never went far enough in his franchise research. He never really found out what his role was going to be as The Owner. He never learned that in order to get small business owners to pay for his unique expertise, he’d have to first go out and find them.

And sell them.

Have a Plan.

Filed Under: Coaching Franchises, Franchise Purchasing, Franchise Research, top 40 franchise questions

On Doing It Alone

By The Franchise King® 1 Comment

I’m troubled by something. I need to share what it is, and why it’s bothering me.

Several years ago, I created a free tool. This tool is designed to quickly help people figure out if they had some of the personal traits needed to successfully own and operate a franchise-type of business.

I came up with the idea after hearing the same question being asked over and over during my franchise seminars….

“Joel, how do I know if I’ll be right for franchising?”

The franchise quiz has remained pretty much the same over the years, except for a little tweaking here and there. Lots of potential franchise owners have taken the quiz. It only takes about 10 minutes to complete, and I score each one, personally. It’s not something that I ever want to automate.

And I’ve been scoring a lot of them, as of late, since I made sure to include it in my book.

The Science Behind It

There is none.

Once in a while, I get crap about the quiz. I’ll hear complaints about my quiz not being a very scientific way of determining if one is right for the business of franchising. One person even suggested that I had no right to administer a franchise test because I wasn’t a psychologist. (I clearly state that my quiz is totally unscientific in the disclaimer.)

But, here’s the thing; my quiz works. That’s because the questions I came up with are ones that anyone who’s thinking of becoming the owner of a franchise needs to ask themselves before they start on their journey.

I’m not sure why it is, but there’s this notion that some people have about franchising. It has to do with some of the, “Business in a box” messaging that’s out there. There’s a lot more to owning a franchise than just turning the key.

Franchise ownership is not for everybody. As a matter of fact, it’s really not for most people. That’s because it’s a very rigid business system. While it’s true that some of the things that are inherent in a franchise business can be run almost robotically, the franchisee still comes to the table with all the frailties of the human condition. There’s that, “ego” thing, for starters. Most of the people that I consult with are pretty damn smart. They bring a ton of business experience with them when they become franchisees. They have, “ideas.” (Which they can’t always implement in their stores-their franchises.) It can become a real conundrum for them.

Why I’m Troubled

The last part of my online franchise quiz includes a link to this webpage. The sentence that precedes that link gently suggests that the quiz-taker may not want to tackle something as big as buying a franchise all by themselves, and that they have an opportunity to work with an experienced advisor, if they choose. But, they’re not choosing to. (For the most part.)

Heck, I even give them 3 chances when I ask them if they want help;

A. Yes, I want to do this right, and I’ll click the link above right now!

B. No- Thanks, anyway

C. Maybe-I’ll click the link right up above to learn a little more.

I am troubled. But not for the reason you may be thinking.

I’m less concerned about them not wanting to work with me, (which would add revenue to my business) than I am with the bigger picture;

65% of the people that take the free quiz choose option, “B“

Why would someone want to try to figure this all out by themselves?

Look!- beforeyousignit.com

Filed Under: Become a Franchise Owner!, before you sign it, Franchise Advisor, Franchise Purchasing, franchise quiz

Franchise Power: What a Powerful Logo Can Do For a Brand

By The Franchise King® 4 Comments

(This is a guest post from Dylan Mazeika)

One of the biggest challenges in today’s business environment is to figure out how to combat the ups and downs of recession era sales. This task is an even greater challenge for a franchise, often forced to adhere to established guidelines related to marketing and promotions.

That said, one of the surest ways to remain proactive in any economy is to foster a unified branding strategy that imparts value through your unique position within the industry as well as your primary focus: customer service. And the easiest way to get up and running is by creating a strong logo design that will act as the brand ambassador to your product or service, no matter where your customers happen to be.

Let’s start by considering an iconic example.

A trusted name: Baskin-Robbins

It’s safe to say that Baskin-Robbins, reportedly serving 300 million customers in over 6,700 stores throughout the world each year, has cornered the market within the ice cream confectionary industry. Much of this can be attributed to their strict enforcement of the widely recognized white, pink and brown brand persona.

From the layout of the store and the colors of paint used within the shop, to the labels, signage and other POP that adorn the widows and ice cream cases, each element of a Baskin-Robbins store is given a specific requirement. In fact, unlike some franchises, when you enter a Baskin-Robbins store, the experience is almost guaranteed to be the same, from Seattle to Tokyo.

This uniform familiarity has resulted in an almost impossibly high level of brand awareness: 98 percent, according to figures published by the ice cream super-chain. And the one thing that ties each of these components together is their identity logo – the letters B and R, colored to incorporate a “31” within the design (alluding to their offering of 31 flavors). These two simple letters guarantee that Chocolate Chip Mint or Cherries Jubilee will taste the same no matter where you are on the planet and further serve as a great example for franchises looking to boost early sales.

Unifying your franchise through a strong logo design

Providing brand guidelines is easy. Enforcing them throughout your franchise system is somewhat less so. But whether you’re a franchise owner with a moderate level of freedom in regard to the marketing of your business or a corporate parent that provides franchise owners a similar level of individual control, the one element that should always remain consistent is your logo. And the reason is simple: brand power.

Unlike a single mom & pop location, a franchise’s success is built on the backs of many. Even though a wide range of people (often living in far-flung locations) are allowed to buy in, you can boost sales with a logo design that features:

Clearly-recognizable imagery. From the unique lettering seen in the Basking-Robbins logo to the Nike “swoop,” a strong franchise logo contains visual elements that can be easily spotted in a crowded mall or on an interstate while traveling 70 miles per hour. This is one of the most critical aspects of logo design, fostering a straightforward appearance that will be positively associated with your brand and thereby enable customers to connect with your company from location to location.

A clear and far-reaching value proposition. As seen in the Baskin-Robbins example, as well as Carl’s Jr., 7-11, Allstate, RE/MAX and even Merry Maids, a powerful franchise logo carries the weight of an entire franchise system, thereby instilling the implied history of success into every location. Though some franchise logo designs include a tagline, many do not – relying instead on the customer’s previous association with the product or service and words, images or a combination of the two that position the brand as the supplier of something they want. Further developing their value proposition in a time when external participation in activities like corporate citizenship and social media are almost prerequisites, many franchises have been seen to slightly alter their logo design, producing variations on a central theme to establish a unique appearance for these aspects of their brand.

(Dylan Mazeika is an online writer with a background in marketing and small business. He enjoys writing articles and guest posts on the latest business and design trends, and helping small business owners with free logo design.)

Filed Under: franchise brands, Franchise Marketing, guest posts

How To Really Lower Your Franchise Business Start-Up Costs

By The Franchise King® 3 Comments

(Picture courtesy of taxbrackets.org)

All businesses cost money to start. Some business types, like network marketing businesses for example, require minimum investments. A quick meeting between your hammer and your piggy-bank should net enough for most of the MLM businesses that are available in the US.

On the other end of the spectrum are franchise business start-ups. Your total up-front investment can range from around $60k to well over $1 million for one of these franchises.

Let’s say that you have located an opportunity that requires a leased retail space, and a lot of equipment-like a sign business. Your total up-front investment will be around $200,000. Your equipment–the computers, and the sign-making equipment and materials probably cost around $40,000. That’s a lot of money. But, there’s a way for you to avoid writing a check for that amount, and in a lot of situations, it’s a smart way to preserve your capital.

Equipment Leasing

I happen to have a lot of experience with leasing, because I was in the automobile franchising business for over a decade. I once read a financial column in which the writer suggested that people should, “Buy what appreciates, and lease what depreciates.” It makes complete sense. I’d wager that someone like Jim Kramer would agree with that.

For example, if you’re going to get a vacation home, you should probably buy it. It’s value will probably increase over time. (No guarantees, but let’s assume that it will.)

(A nice vacation home)

But, when it comes to things like automobiles, or in this case, equipment that’s going to be used every day, it’s value is not going to increase. As a matter of fact, as soon as you buy it, and use it-it’s value has decreased…a lot. I know that it’s not fair, but unless you want to expend your energy on changing the rules of business, you’re going to have to just deal with it.

If you’re going to invest $200,000 into a business of your own, wouldn’t it make sense to hold on to some of the up-front money if you can? Wouldn’t it be nice to have some money stashed away for an emergency?

If you’re investing in a franchise business, you’ll have to look over the FDD to make sure that you don’t have to buy all of the equipment that ‘s required for your business. Make sure that you’re allowed to lease some of the equipment.

Leasing Isn’t Free

If you can lease some of your equipment, you’re going to pay interest. That’s the cost of doing business. But, you’ll have thousands of dollars available to use as needed, or as I’m recommending, to stash for an emergency.

Of course, before you make any major financial decision, check with your accountant, and/or financial advisor. every situation is different.

And, check out what my friend Marco Carbajo wrote about comparing equipment leasing companies. It’s a really useful article.

Learn About Creative Franchise Loans

Filed Under: equipment leasing, Franchise Financing, Franchise Purchasing, Incorporating