Showing posts with label franchise a business. Show all posts
Showing posts with label franchise a business. Show all posts

Sunday, February 22, 2009

Franchising in India

Franchising in most parts of the world is well established and part of everyday life. In the U.S. over $1 trillion is spent per year in franchised outlets, 1 out of every 12 retail locations is a franchised operation. Now franchising is moving into other parts of the world, most notably India.
India now presents and enormous opportunity for franchise organizations. The country has over 12 million retailers which surpasses even China. This makes India the country with the highest retail outlet density in the world.
Indians have taken to franchising like the U.S. Already in this young and undeveloped franchise environment there are over 600 franchisors franchising in the Indian marketplace today. Along with that comes over 40,000 franchisees spread out across the country and across different sectors, over 300,000 Indian employees are employed directly by Indian franchise companies there. The market is enormous with almost unlimited potential. Currently the education sector of franchised businesses is the leading franchise model, but retail is catching up. The size of the consuming class means big opportunities for more franchise development.
The potential downsides of the new Indian market are what comes along with any developing market. For one the lack of regulation can still be an issue, real estate can be tricky and skewed in some cases and financing can be difficult. But if you can deal with those, this market has loads of potential.
There are a lot of companies in the services sector that are actively looking at India to set up their franchise operations today and will continue to be in the future. The growing popularity of the franchise model among Indian business men is evident in and around the country of India. The same issues that are taking place in the U.S. are also happening in India today. More people are losing their jobs, the big companies are downsizing with the slowing the economy in many sectors. This puts more people in the franchise market who would otherwise be working in a management position at a salary.
A franchise is a way for someone to earn a living without the risk of starting their own business. The other side of the equation is that as is the case in the U.S., investors are becoming more and more wary of putting their money into the stock market today. Earning the kinds of returns that were possible 2-5 years ago are extremely difficult today. This prompts more and more Indian business people to invest in themselves through a franchise model. Overall, the Indian franchise market represents one of the largest franchise opportunities in the world today.
Franchise organizations with applicable concepts and good planning will absolutely take India into account when planning their franchise system expansion for the coming years.
Christopher J. Conner
Vice President
Francorp, Inc.
708-481-2900
http://www.francorp.com

Monday, August 11, 2008

Marriott Being Social

Being SocialMeet the new facebook of MarriottBy Nancy WeingartnerAs published in: Franchise Times - August 2008Kathleen Matthews is viewing the news from a different angle. Instead of reporting the news from behind the anchor desk, she's now making the news for Marriott using new media techniques.Cover photo by Steven E. Purcell
When Kathleen Matthews created her Facebook page as part of her new-media campaign at Marriott International, two of the first people she invited to be her "friend" turned her down flat. But they were her children, after all - one of whom called her to complain; the other simply ignored her. Matthews' oldest child, Michael, perhaps in a pity move, did accept her offer of cyber friendship, she says, laughing.Matthews, a former award-winning news anchor in the Washington, D.C., market and wife of "Hardball" host Chris Matthews, is settling comfortably into a life of making news, as opposed to reporting it, for the somewhat staid Marriott brand.Her charge as executive vice president, global communications & public affairs, is multifold, which is what appealed to her when offered the job 18 months ago. In addition to handling public relations, her role was expanded to encompass politics; social responsibility, such as Marriott's green initiatives; and new media. New media, by the way, is using nontraditional channels to get a company's story out, such as the social networking site, Facebook, plus blogs and online videos viewed on sites such as You Tube."She's a dynamo; no one can keep up with her," says Jay Hamilton, Marriott's senior director of public relations. "By the time she walks by your door she's mentioned five things you need to write down (and do)." And she repeats this process all the way down the row of offices, her co-workers say.Walking and talking, both at a fast clip, to have her photo shot in front of the world flags that signify Marriott's international scope, Matthews does indeed appear to be a dynamo. Still looking the part of a news anchor, Matthews was dressed in her favorite color, red. It's a hue that dominates her office décor from the chairs to the espresso maker. Red also "pops" on television and now she has one more reason to wear red, it's the signature color of her new charge, Marriott.Matthews exudes confidence - friendly, but not chummy. A runner, she's in constant forward motion. Her desk at the time of this interview was covered in stacks of paperwork, and she joked that her boss wouldn't want her picture taken there. Her department has an abundance of flat-screen TVs turned to the news - especially MSNBC, the station that runs Chris Matthews' show. "If we want to put Marriott in the news, we have to know what the news is," she states.A familiar spot for someone used to being pitched stories."She's always looking for the next big idea, how you can maximize news," says Gordon Lambourne, senior vice president of global PR. "She's intuitive of what the media's interested in."Perhaps that's why Matthews is a nine-time Emmy winner for her news coverage in the Beltway. Reporting the local news was ideal while her children were younger. "I didn't travel, and I had a predictable schedule," she says. "(Plus) I brought home stories that made me a better mother." While other mothers may have struggled talking to their children about HIV or drunken driving, Matthews says she was able to bring up one of the stories she had just reported on to launch the subject with her teens.For the most part, her children kept the fact that they had high-profile parents a secret from their friends and teachers. "People were surprised to find out Chris and I are married because most women (in TV) keep their (maiden) names," she says.Being half of a celebrity couple makes it a little harder to balance work and home. Like most working women, Matthews says she was always "time-starved." "I try to let the worlds bleed into each other," she says. When her children were younger, they would come to the studio with her when need be, and "Chris took them to New Hampshire every four years to cover the presidential primary."Ironically, the contacts she spent years amassing as a news anchor have helped her more in her position with Marriott than when she was sitting behind the anchor desk. It's also given her a different perspective on the news to offer her husband. "It's exciting to bring a new skill set home," she says.And Marriott has benefited from having Chris Matthews, who usually commands a hefty speaking fee, talk at Marriott functions, she says.Moving up MarriottThere's a method to introducing new-media channels to an established brand. For instance, her Facebook page is the equivalent to the old-fashioned suggestion box. Her circle of "friends,"or contacts, can send her messages, or she can alert a group to new innovations at Marriott in real time. Gen Y associates like her Facebook page, she says, and baby boomers, "who are always trying to be relevant, love it because they always want new ideas."One of her first coups at the hotel chain was to convince Bill Marriott, the 80-something chairman, to blog. His first reaction after learning the definition of a blog was that it would be impossible for him to do because he doesn't type, nor does he use a computer. Matthews says she convinced him to record his message on a small, digital tape recorder for someone on staff to type. A hard copy is then printed out for his edits.Bill Marriott is one of the few top executives to have a blog, and most likely the oldest. His subject matter varies from his revelation that he does Pilates regularly, which led to the creation of an exercise studio for employees at Marriott headquarters, to praise for franchisees and their staffs who helped during the Midwest flooding earlier this summer. His blog on lessons learned as a Boy Scout had 5,000 hits, Matthews says.The purpose of the blog is two-fold. It drives traffic to the site - a link to booking a room at a hotel property, generated $1 million in room revenue, Matthews says - but it also is a way for the personable CEO to visit all 3,000 properties without leaving town.When he does visit his hotels, Matthews says staff will gather in the lobby and actually applaud. "He's so warmly received everywhere he goes," she adds. Which isn't hard to understand, given that Marriott likes to visit with the housekeeping staff and tour the kitchens, not just meet with management."Traveling with Bill is like traveling with the secretary of state - no make that the president and Bono combined," she says, laughing. It's also a full day's worth of work, since Marriott visits between 10 and 15 hotels a day on the road.Marriott's interviews, as well as any company news, such as the grand opening of its 3,000th hotel, are posted on the Marriott page on You Tube. Footage of the grand opening of that hotel, which just happened to be in China, was fed back to headquarters within hours of the ceremony, where 3,000 trees were planted as part of Marriott's green initiative. Footage of the event was immediately edited and posted on the Web, says Lambourne. "We were able to combine new media and traditional media to get the story out," he says.In addition to using new media for external communications, Marriott also takes advantage of ways to keep employees and franchisees in the loop. And Matthews has a chart detailing the many ways headquarters reaches out to its constituencies.Nick Powills of No Limit Media Consulting marvels that more franchisors aren't blogging.While Marriott International may be ahead of the curve by embracing new media in so many facets, it's something all franchisors should be doing, according to PR professional Nick Powills of No Limit Media Consulting who blogs about new media.Marriott's use of social networking is right on target, Powills says. Every time it posts a blog or adds something to its social Web pages, the company's name moves up on search engines. "You want your franchisees to find as much positive information on your brand as possible," he says. "It drives content and you can control the message." For instance, a negative posting to a blog or Web page can be deleted.Social networking sites give consumers a way to comment on their stay at the Marriott brands - which include Ritz Carlton, Fairfield Inn, Renaissance and Residence Inn - or give their opinions on the company's green initiatives or a hotel's amenities. And in a world where we can't trust whether the TV character is drinking a Coke because the script calls for it, or because Coke paid for a product endorsement, having "real" people's input on brands is seen as invaluable.These sites are also a way for the company to offer a special room rate, announce a new opening or alert consumers that Marriott International is getting greener by offering recycled pens.The company actually does offer recycled pens. "We buy 47 million Bic pens as a company a year," she says. "We worked with (Bic) to develop recyclable pens." The company also has gone to toilet paper with no cardboard rolls."Bill (Marriott) is a great evangelist for these initiatives," Matthews states. "Social responsibility is so important for companies." Remaining competitive and able to attract a "world-class workforce," means being green. In addition, she adds, climate changes greatly influence their hotels, so it's in the company's best interest to reduce its carbon footprint and to encourage vendors to do the same.And with the buying power of 3,000 hotels, the brand has considerable clout.The purpose of all her creative energy is to guide Marriott so that it stays cutting edge and relative to both its employees and guests.New media has proven a popular way to connect with customers. For instance, guests of the Courtyard brand were asked what kind of hotel they wanted, and their candid responses were captured on film and uploaded to http://www.gocourtyard.com/. "We continue to get comments" from guests, Matthews says.On the other hand, Bill Marriott's blog gives a behemoth brand a human face. His musings are supplemented with video clips, like a recent one starring the young pop-and-lock dancer whose silhouette is featured on the Apple iTune commercials.And while more than 100 million people have blogs - Time magazine named bloggers its person of the year in 2006 - Powills says he's surprised more franchisors aren't doing it. Or that they don't have Facebook pages, since Powill's research reveals the site had 123.9 million unique visitors in May of this year alone and is the Internet's No. 6 most visited site.Stay tuned, because as soon as this article comes out Matthews probably will have added another dozen sites to Marriott's new media campaign, or found some other innovative way to get the brand into the news."She's just what we needed," says her assistant Marilyn Cole. "I don't know how she does everything. But we're having fun."

Friday, July 25, 2008

Franchise Success in Omaha

If your house is messy, your stomach is rumbling or your grandpa is rattling around alone in his house, don't blame Omaha.

"Omaha has been a wonderful, wonderful city for franchising," said Tom Guy of the Ellis & Guy advertising firm, who was a part of the early franchise business in Omaha.The city has done its part to keep the nation well-fed, happy and clean through a type of venture that can spread rapidly worldwide and generate billions of dollars in sales.What is it?It's franchising, and over the past 35 years the city's entrepreneurs have spawned at least a half-dozen operations that have gone nationwide and, in some cases, worldwide.Every day, employees of Omaha-originated franchises clean thousands of homes, inspect thousands of properties, serve thousands of pizzas and sandwiches and perform chores for thousands of senior citizens, from Europe to Asia and all across the United States.
Franchise businesses with Omaha ties
Little KingFounded: 1968 Initial investment: $30,000- $80,000 Total investment: $140,000- $240,000 Royalty: 6%Outlets: 8 franchisees, 15 storesNational Property InspectionsFounded: 1987 Initial investment: $21,800 Total investment: $28,500- $31,000 Royalty: 8% Outlets: 262 in the U.S. and CanadaHome Instead Senior CareFounded: 1994 Initial investment: $32,500 Total investment: $44,000- $57,600 Royalty: 5% Outlets: 800 centers in 12 countriesGodfather's PizzaFounded: 1973 Initial investment: $0-$20,000 based on a number of factors Total investment: between $10,000-$550,000 Royalty: varies, based on a number of factors Outlets: about 620 in more than 40 statesRight at HomeFounded: 1995 Initial investment: $32,500 Total investment: $50,000- $80,000 Royalty: 5% Outlets: 155Merry MaidsFounded: 1979 Initial investment: $19,000- $27,000 Total investment: $23,350- $34,450 Royalty: 5-7% Outlets: 1,421The MaidsFounded: 1979 Initial investment: $10,000 Total investment: $74,000- $221,000 Royalty: 3.9-6.9% Outlets: More than 1,000 marketsSource: The Franchise Mall Those involved in franchising say Omaha's success is built, in part, on:• A service-oriented Midwestern mind-set.• A willingness to share the secrets of building a successful franchise.• The ability of key individuals to turn good ideas into businesses that can be replicated almost anywhere."Omaha has been a wonderful, wonderful city for franchising," said Tom Guy, who tied his marketing expertise into several successful franchises.Consider this history:Willy Theisen knocked a hole in the wall between his bar and an adjacent pizza restaurant and began selling pizzas to his customers. Convinced that the thick-crust pizza could compete with Pizza Hut's thin-crust version, he launched Godfather's in 1973. He sold the company in 1983 for $306 million.Dallen Peterson realized in the late 1970s that women joining the work force wouldn't want to come home and clean house. He started Merry Maids, selling it in 1988 for $25 million.Peterson protégé Paul Hogan and his wife, Lori, saw that elderly parents of busy and often far-flung children could thrive in their own homes with a little help from a caretaker. The Hogans started Home Instead, which is expected to generate $650 million in revenue this year on three continents."Dallen helped me rifle in on the senior market," Paul Hogan said.There's also Right at Home, a senior care company that includes in-home medical services; The Maids, another home-cleaning company; and Little King sandwich restaurants.A different kind of service franchise caters to businesses instead of individuals. National Property Inspections Inc. provides information on such details as home condition, energy consumption and safety features.Colin Bishop, executive vice president of The Maids, said developing a true, successful partnership with the franchisee is key. That sort of cooperation seems commonplace in the Midwest, he said.In 30 years, Bishop said, The Maids has had only two lawsuits, an outstanding track record considering the decades of business dealings with franchise holders.Merry Maids founder Peterson said Godfather's success inspired him, and he knew Tom Guy and Rick Ellis from working at Fairmont Foods' snack division. Their advertising firm, Ellis & Guy, handled Godfather's marketing campaign, which featured actor J. William "Bill" Koll as a tough-talking gangster who virtually ordered people to buy pizza.Peterson figured that if he could operate a successful home-cleaning service in Omaha, it would be the sort of business that could be franchised: Capital costs were low; most people could understand the necessary training; and the demand was nationwide.Guy helped develop the name - No. 12 on a list of 35 proposed names.Peterson said just being from Omaha was an advantage."The transportation in and out was good, and the work ethic of the people in Omaha was wonderful," Peterson said. "We were able to get talented people on our staff."
Franchises work best for a business:
• With a good track record of profitability• Built around a unique or unusual concept• With broad geographic appeal• That is relatively easy and inexpensive to operate• That is easily duplicated Once you have the right concept, he said, franchising is built on relationships, which in turn depend on choosing the right franchise holder.During the selection process, finalists came to Omaha to learn more about the company."Everyone who came to Omaha would come with a kind of skepticism," Peterson said. "But by the time they spent a week in Omaha, they always were so impressed. There's something about Omaha, the people, the culture, the work ethic, the integrity - all those things were factors."Success built upon success.Peterson and others who started franchise operations gave money to launch the International Center for Franchise Studies at the University of Nebraska-Lincoln, which attracted business students with franchising in mind.Franchises work, say Peterson and others, because they give franchisees a successful formula for doing business, letting them tap into an established brand backed up by training, advertising, equipment and other proven features.And franchises reward people who want to be their own bosses. The drawback, in comparison to starting an independent business, is that the franchisee must pay start-up fees and royalties to the owner of the corporation.An estimated 5,000 franchise companies operate in the United States, making $600 billion in annual sales. They created 1.2 million new jobs between 2001 and 2005, according to national franchise groups.Roland Bates was a contractor who saw a need for qualified inspections of residential and commercial properties. He started National Property Inspections in 1987."This is the kind of place that people still feel you can do business on a handshake and people keep their word," Bates said.Bates eventually met Allan Hager, a hospital administrator who had his own idea for a franchise: a senior care service that would provide in-home medical care as well as light housekeeping, errand and other services."He wanted to know more about what was involved in franchising," Bates said. "He picked my brain. We visited for months."The relationship has continued, Hager said."He was very generous in showing me the nuts and bolts," Hager said of Bates.For example, Hager learned that before offering a concept to franchisees, he needed to assemble and have in place all pieces of a franchise. Those include information technology, marketing, employee recruiting, legal details, pricing and screening of franchise applicants."I think the business climate here is terrific," he said. There's a trust factor in the Midwest. That's just the way people are here." • Contact the writer: 444-1080, steve.jordon@owh.com