June 2014

Jeff Sinelli: 3 Critical Questions to Ask Before You Franchise


Think you’re ready to start franchising your business? Not so fast. Franchising is a lucrative business model, and it can be an excellent way to expand your brand. But before you embark on the franchising journey, you need to make sure that you are fully prepared. Because if you are not careful, you can fail as a franchisor and possible put your business at risk too.

Jeff Sinelli of WhichWich fame recently discussed 3 important questions to ask yourself before franchising.  As a 3-time franchisor and current CEO of Which Wich, Sinelli knows what he is talking about.  Here are the 3 question he suggests asking before diving into the deep end of the franchising pool.

Why now? Choosing to franchise your business is just like any other major life choice — having kids, purchasing a house, choosing to get a graduate degree — there is a right and a wrong time for it. After all, if you had just lost your job, it probably wouldn’t be an ideal time to purchase a home. Think about why now is the right time to franchise. Do you have the necessary resources? Are you financially able to do so? Will you be able to make the necessary changes in your schedule to accommodate extra work? You need a clear and solid reason as to why now is a good time to start franchising. In other words, you need a clear understanding of your purpose, incentive, and sales as well the needs of your clientele.

Is there a line out the door? If there is no popular demand for your business, it probably isn’t a wise idea to jump into franchising. For the franchise model to be successful, the product or service your business offers needs to be lucrative. It needs to attract other entrepreneurs. If you are having trouble making ends meet, don’t expect others to want to jump onboard and adopt your business model. Jeff Sinelli, founder of the Dallas-based franchise Which Wich, explains that you really need a line of customers out the door before considering franchising. “If people are willing to wait for your service, in our instant gratification culture, your next responsibility is to evaluate the line. Are these returning customers? Are they asking questions about getting involved? These are signs that you may be on your way to a franchise”  said Sinelli.

Have you put in the time? It’s not all about product and popular demand. Franchising requires a significant amount of time and experience on the part of the franchisor. If you haven’t been in business for at least one year, you need to drop the idea of franchising. You absolutely need a bare minimum of one full year of company history, data, operations, systems, and sales records for a clear idea of how your company would operate in all four seasons. Without a history to provide data on the patterns and fluctuations in your company, there is no way that you can plan for the future.

From the outside, franchising might seem like an easy way to grow your business, but it’s not all that easy. If you can’t come up with clear, compelling answers to these three questions, you probably aren’t ready to franchise.



To learn more about Jeff Sinelli, please see this link: http://www.whichwich.com/chief_vibe_officer

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

Jamba Juice Embarks on a Franchise Recruitment Spree

Jamba Juice has expansion plans in the works. The juice and smoothie chain recently announced a range of new incentives to boost franchising in an ambitious attempt to add 500 new U.S. stores in the next five years. The plan would mean doubling the current franchise acquisition rate. In 2013, the chain opened 52 franchise-operation locations and two company-owned stores. Incentives include a 50 percent reduction in initial franchise fees and a three-year graduated royalty reduction plan.

“As we prepare to celebrate our 25th anniversary in 2015, we thought it would be a great way for us to launch what we view as the most significant growth-initiative franchising incentive plan in the history of the brand,” Jamba Juice CEO James White recently explained.

The expansion initiative represents the second phase of Jamba Juice’s mega franchising push. In the span of a few years, the company has managed to transition from a primarily company-owned chain to a thriving franchise system. In April 2009, the company had 499 company-owned locations and a mere 233 franchise stores. The company now owns only 263 of the chain’s stores in the U.S., while franchisees operate 544 locations in the U.S. and 47 international stores. With the new franchising campaign, it is estimated that roughly 80 percent of the chains’ locations will be franchised.

The company also hopes that the new franchising incentives will help it expand into new, key markets, including the Baltimore and D.C. greater metropolitan area, Dallas, Atlanta, Northern New Jersey, Raleigh/Durham, and New York City.

With the expansion plan, Jamba Juice is hoping to capitalize on the juice trend sweeping the nation. While many might assume that juice is the major source of income for a chain that has juice in its name, it is actually smoothies that have historically been the bread and butter of Jamba Juice. But with the juice craze, times are changing, and stores are putting freshly squeezed juices back at the top of menus. Today, 500 shops across the U.S. now serve freshly blended juices, with such options as Veggie Harvest (apples, carrots, beets, super greens, and ginger) and Kale Orange Power (orange, kale, and bananas).

“We just launched the largest juice platform for any national company,” White said. “[Jamba Juice] attracts a consumer that has almost an unquenched thirst for these healthier beverages.” He also reported that there has been a 3 percent to 4 percent lift in same-store sales at shops that have added juice to the menu.

Expanded franchising in conjunction with more fresh juice options to meet consumer demands for healthy options could mean success for Jamba Juice. The key, it would appear, is figuring out how to cash in on the opportunity. Still, things are looking good for the brand. In April, Jamba Juice reported a 0.3 percent increase in same-store sales for the first quarter and a net loss of $244,000, compared to a loss of $1.2 million in the same period last year.




Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

The Pros and Cons of Multi-Unit Franchising

Brands are increasingly realizing the value of multi-unit franchising, and the practice is on the on the rise. Economically, the practice makes sense. During the recession, multi-unit franchisees fared much better than single-unit franchisees in part because these multi-unit franchisees had more infrastructure and better access to capital, which enabled them to better weather the economic storm. Furthermore, brands are increasingly recognizing that it is much more advantageous to support a handful of very large, well-capitalized franchisees than to have a very large cadre of individual franchisees who may run into trouble when sales are volatile. The bottom line? Across the board, brands are interested in soliciting multi-unit franchisees.

Nevertheless, it is crucial to note that while multi-unit franchising can be advantageous, it also presents a unique set of challenges. Perhaps most notable is that the shift from single-unit ownership to multi-unit ownership requires a franchisee to shift focus from operations to development. He or she needs to be prepared to take a step back from day-to-day operations to focus on the bigger picture of growth and development. Basically, you need to work on your business instead of in your business. So before you decide to venture into the world of multi-unit franchising, you should have an idea of what you are getting into. So, what are the pros and cons of multi-unit franchising? Let’s have a look.

CON: Increased risk. Let’s face it: Growth means risk. If you’re considering making the move from single-unit franchisee to multi-unit franchisee, you need to be prepared to assume more risk, particularly more financial risk. You’re likely going to need to take on more debt and have a larger operation to manage. The bottom line? You need to invest in infrastructure if you want to grow, even if you don’t necessarily have the revenue to do so. If you decide you’re going to invest in infrastructure only once you have revenue, you may never have the revenue. This, of course, means making personal sacrifices. Remember, growth might be rewarding, but it isn’t always easy.

CON: More time dedicated to human resources. A significant portion of a multi-unit franchisee’s time has to be dedicated to HR. It’s one of the few things that cannot be delegated completely. You as the franchisee understand your company culture and you understand who would fit in what role. The franchisee also needs to be involved in the hiring and recruitment process to make sure that the right kind of leadership is brought on board.

CON: More operational headaches. With more locations, come significantly more operational issues to control and manage.  Managing multi-unit operations can be one of the biggest management challenges out there.  So before you jump in, make sure you have best practices and technology in place to help you grow, scale, and effectively manage operations.

PRO: Increased profit. Of course, as with anything in life, the greater the risk the greater the reward. Multi-unit franchising certainly comes with a unique set of risks. However, when done successfully, multi-unit franchising can be tremendously financially rewarding. Growth means profit in many cases.

Pro: Multi-unit franchise growth is good for your entire team. Growth is an excellent human resource strategy. You might have extremely talented, skilled people working for you. But if these valuable employees don’t see growth on the horizon, they are unlikely to stick around. It’s much more likely that they will seek growth opportunities elsewhere. Multi-unit franchising is not just about developing for your own personal gain. It is also about developing new opportunities for your team. Remember, the better the team that surrounds you, the better you will do in the world of franchising.

PRO: Economies of scale.  The more locations you have can often times provide economies of scale that allow you to actually save money.  For example, you can quality for discounts on large order purchases which reduce your costs overall and provide competitive price advantages.  Further, with more locations, you can share personnel resources between teams for things like Maintenance and Repair as well as Marketing resources.

PRO: Great freedom and flexibility. The rewards of multi-unit franchising aren’t just monetary. They are also personal. The larger your organization, the more freedom you, the boss, ultimately has. Multi-unit franchising is about building infrastructure. The more infrastructure you have in place, the more freedom you have. Think of it this way: If you have a solid network of franchises in place and the appropriate staff and resources to properly run them if you miss a day off work, business will continue as usual. This differs dramatically from the role of a single-unit franchisee who often has a critical role in the day-to-day operations of the business.

The bottom line? Multi-unit franchisees may just have more freedom and flexibility, giving them a better quality of life.  So, if you are a seasoned single-unit operator, now might just be the time to expand.



Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

The World’s Most Expensive Doughnut

One of the world’s most popular doughnut franchises has a new product out. And it costs $1,683. Yes, you read that right — Krispy Kreme has launched a new doughnut that costs one thousand six hundred and eighty-three dollars. For that price, you could buy about 2,000 glazed Krispy Kremes.

So, what’s the story behind this new ultra-expensive doughnut? Well, it’s decked out in gold and diamonds. Made to commemorate National Doughnut Week, the opulent baked treat took three days to assemble and includes a Krispy Kreme Cocktail made with 500-year-old Couvoisier de L’Esprit Cognac and 2002 Dom Perignon champagne. Unveiled last week at a London department store, it is decorated with gold-dusted Belgian white chocolate lotus flowers, butterflies, ivy, and blossoms; 24-carat gold leaves; and edible diamonds. Talk about luxurious.

Unfortunately, however, this ultra-opulent doughnut isn’t for sale. So if you’re looking to purchase it, you’re out of luck. The doughnut is now in the possession of a makeup artist from London, who won it as a grand prize in a recent Krispy Kreme competition. On the bright side, however, you can snag a more affordable version at Selfridges in London for about $807 per dozen. The discount version also boasts 24-carat gold leaves, white chocolate butterflies, and flowers, although there is no Dom Perignon.

The Krispy Kreme gold and diamond doughnut is the latest in a growing trend of expensive offerings in the food franchise and restaurant industry. Steveston Pizza, for example, charges an astounding $450 for its C6 Pizza, topped with lobster and black Alaskan cod with a side of Russian caviar, while Las Vegas restaurant Fleur recently created a buzz with the $5,000 Fleurburger 5000, served with a “free” $5,300 bottle of wine. New York’s Bagatelle is also jumping on the ultra-expensive, super-opulent food bandwagon, offering a $1,000 sundae with Dom Perignon Rose sorbet, served with a side of a Mauboussin ring.

What’s the point of these pricey food offerings? While few will ultimately taste these pricey creations, it is an excellent way for brands to generate hype and free PR. After all, even those who can’t afford such ridiculously expensive items will still inevitably enjoy checking out pictures of them.





Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

Why Is Burger King Bringing Back Its Sandwich Menu?

After a 30-year hiatus, the Burger King sandwich is back! Yup, you read that right — after three decades Burger King is once again planning to sell sandwiches. So what prompted this shift?

It’s a valid question. Burger King says it’s all about nostalgia. Well, nostalgia and profits. Burger King explains that its strategy of selectively bringing back customers’ favorite food items has been a tremendously successful business tactic. Last August, the fast food franchise brought the much beloved chicken fries back on the menu after a two-year hiatus, in part because of customer social media campaigning. The move was a success. The company reported a 3.6 percent increase in same-stores sales in the fourth quarter, attributing the rise to the reintroduction of the product.

The company is hoping things work out as well this time around. The first product up for a comeback is the Yumbo Hot Ham & Cheese Sandwich, a Burger King twist on an American staple that features “savory black forest ham, topped with melted American cheese, crisp lettuce, and creamy mayo, all served heated on a toasted hoagie bun,” according to a recent Burger King press release. It originally launched in 1968 and was taken off of the menu just six years later in 1964. Though short-lived, the sandwich proved to have a lasting impact.

“We’re always listening to our guests through our franchisees, in social media, and via guest relations,” said Eric Hirschhorn, chief marketing officer, North America, Burger King Corporation. “The return of the Yumbo Hot Ham & Cheese Sandwich is the latest example of how we’re able to give our guests what they’ve asked for. Our strategy to selectively bring back favorite foods has helped us connect with our guests while also driving business results.”

Many Burger King franchisors are thrilled with the news. “My family’s been in business with Burger King restaurants for over 40 years,” said Tom Walsh Jr, a Burger King franchisee awarded the prestigious franchisee of the year in 2013. “The Yumbo Hot Ham & Cheese Sandwich was a favorite I remember having as a boy in my dad’s restaurants, and I know our guests are going to love having it back and sharing it with their own kids. This is a great example of how we as franchisees are working closer with Burger King Corporation on menu and marketing initiatives.”

In support of the launch, the company is launching a social media campaign that transports viewers into the past, complete with nostalgic 1970s-style images. “The Yumbo Hot Ham & Cheese Sandwich will be supported by a 360-degree marketing campaign including TV advertising, social media, public relations, and in-restaurant merchandising,” the company said. “To introduce the Yumbo Hot Ham & Cheese Sandwich to a new generation, the Burger King brand is rewinding the clock by taking our Facebook page back 40 years to 1974, for 48 hours as we take social media ‘analog’ with the Burger King Yumbo Social Hotline.” Burger King hasn’t specifically said whether or not it plans to relaunch any additional products, but if all goes well, customers could expect to see other old fan favorites back on menus soon!





Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.