iFranchise Group Identifies Mobile Businesses as Top Growth Trend in Franchising

FRANCHISE CONSULTING FIRM IDENTIFIES MOBILE BUSINESSES
AS TOP GROWTH TREND IN FRANCHISING

iFranchise Group Offers a Free Educational Franchising Webinar for Mobile and Other Business Owners


Foodtruck - ThinkStock87741362HOMEWOOD, IL – Mark Siebert, CEO of iFranchise Group, a leading franchise consulting firm based in the Chicago area, has seen an uptick in the number of their clients who are part of a currently “hot” trend in franchising: mobile or vehicle-based concepts.

“In today’s environment, being flexible, keeping overhead low, and meeting consumer demand is key for any business owner,” says Siebert.  “Therefore it’s no surprise that we’ve seen the number of mobile franchise concepts increase significantly, especially in the last year or two. From the incredible explosion of mobile food trucks to many other types of consumer and business services, more and more creative business owners are taking their ideas on the road, rather than relying on traditional physical locations.”

Siebert, a franchise consultant with over 25 years of experience, went on to note that his team of franchise experts is approached by mobile business owners on a daily basis, all with questions about how best to  expand their vehicle-based concepts into other markets.

To assist aspiring mobile business owners with deciding whether franchising is a viable option for expansion, iFranchise Group will conduct an educational webinar directed toward independent business owners who are evaluating their growth opportunities. The webinar is scheduled for Thursday, April 26, 2012 at 1:00 p.m. Central time.

This is the latest in a series of complimentary online seminars the franchise consulting firm offers. Past webinars have focused on topics including Quality Control, Sales Goals, and Litigation in Franchising.  This month’s webinar is scheduled to be an hour in length, and will cover, among other topics, predictive criteria that help to assess the readiness of a company for franchising and the likelihood that it will achieve success as a franchisor, including various financial, legal, and logistical factors.

The franchise consulting firm notes that mobile franchise concepts run the gamut in terms of what they can offer. More than just food trucks serving up gourmet menu items, there are also numerous mobile consumer services franchises such as beauty salons and pet groomers, and mobile B2B services including commercial cleaning, office equipment recycling, and document shredding concepts.

Mobile or truck-based businesses have a unique focus that affects how the franchising model is applied. Mobile food trucks, in particular, can face a number of disadvantages compared to traditional restaurant locations, such as being more directly affected by weather, traffic, territory size, quality control issues, and lower average unit volumes. “Food trucks often work best when they’re in combination with an actual restaurant location, as opposed to a stand-alone franchise concept,” notes Siebert. “Given the challenges that operators will naturally face with this business model, it is doubly important to seek professional guidance to help examine all aspects of the business carefully when planning for franchise expansion.”

Siebert continues, “We have talked to and worked with many mobile business concepts, and understand that there are particular complexities to consider when franchising. At the same time, we want this, as well as all the other webinars we hold, to be beneficial for various types of concepts. We expect our upcoming webinar to be beneficial for brick-and-mortar businesses, as well as mobile ones. Much of the same franchisability criteria can and should be analyzed before expanding, regardless the structure of the business itself.”

Individuals or companies interested in attending the upcoming webinar, or who would like to request additional information on mobile franchises or franchising in general, are encouraged to contact iFranchise Group at [email protected] or 708-957-2300.

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About iFranchise Group:  iFranchise Group (70.32.98.159), is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide.

 

Trends in Retail Franchising: Retailers Adapting to the New Economy

RETAILERS ADAPTING TO THE NEW ECONOMY

Franchise Consultants See Shift in Retail Franchising in 2012

Retail - ThinkStock86540004HOMEWOOD, IL – Based on the observations of over 11,000 businesses since January of 2009, franchise consultants at iFranchise Group have identified four ways in which retailers are adapting to the new economy.

“More than ever, retailers must stay on the cutting edge to keep their clients satisfied, while at the same time keeping profit levels where they should be,” says Mark Siebert, franchise consultant and CEO of iFranchise Group. “Therefore, we’re seeing a number of businesses adopt practices and tools that help keep them competitive – ranging from how they structure their business to the types of products and services they offer.”

Business practices that are becoming more prevalent among retail concepts include:

Using franchising for specialty product distribution. From home cleaning and kitchen equipment, to fashion accessories, to gourmet foods and drinks, specialty retailers that may not have originally started out as franchises are consistently turning to franchising as a means of distributing their products on a broader basis, while also controlling costs. Some companies manufacture their own goods and establish franchise systems as a means of getting their unique products in front of more retail customers. Others choose franchising as a means for international expansion beyond their current domestic distribution channels. Even more are start-up concepts that turn to franchising in order to grow beyond what their own resources might otherwise allow. Whatever the scenario, say experienced franchise consultants, franchising is a vehicle that is highly flexible, scalable, and applicable to just about any niche-specific retail product on the market.

Flexibility in real estate. From developing franchise agreement language that contemplates current retail space lease terms and pricing, to including options for storefront and kiosk-based franchises, in today’s real estate environment, franchisors have learned that flexibility is key. “Franchisors need to understand what a franchisee will be paying for their store location in all kinds of markets, and how this will affect the bottom line,” says Siebert. “They also need to structure their franchise agreement terms to extend beyond what a typical initial lease term might be – it doesn’t make sense to have a franchise agreement that expires halfway through a franchisee’s store lease term.” Adds Dave Hood, franchise consultant and iFranchise Group President, “Franchise agreement language for retail franchises should take into account the possibility of a franchisee needing to relocate the business; whether from a stationary storefront site at the end of a lease or, in the case of a kiosk format, when a move that is required, often on short notice, by the local mall operator.”

Multimedia online training. Effective training is a key component of any retail franchise system, due to the inherent large numbers of employees and often high employee turnover rates. And, as more business functions are brought online, retail franchises are finding that today’s technology lends itself well to both franchisee and employee training. Online training systems can be used for ensuring franchisees are sufficiently trained in key aspects of operating their retail businesses on a day to day basis. These same types of systems can apply to retail location staff, as well. Says Siebert, “To ensure that their franchisees’ staff have adequate product knowledge and can explain all the appropriate features, advantages, and benefits to customers, we’re recommending more franchisors provide Internet-based training through interactive learning management systems that include online modules, participant tracking functions, and even multimedia quizzes.”

“Green” retailers turning to franchising. Environmental responsibility is perhaps one of the biggest buzz words in franchising, and business in general, today. Retail concepts are certainly no exception, say franchise consultants, with franchise systems popping up everywhere that offer products such as organic foods, eco-friendly cleaning products, and recycled office products (including everything from ink cartridges to cell phones).

Business owners and franchisors in the retail sector, or any other type of business, who are looking to evaluate their business model and identify and adopt current best practices are encouraged to contact iFranchise Group franchise consultants at 70.32.98.159 or 708-957-2300 for more information.

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About iFranchise Group: iFranchise Group, is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide.

Back on the Front Burner; Signs of Significant Improvement in Food Franchising

FOOD FRANCHISING BACK ON THE FRONT BURNER

iFranchise Group Sees Signs of Significant Improvement in Food Franchising

HOMEWOOD, IL – Franchise consultants with iFranchise Group, a leading franchise consulting firm based in the Chicago area, recently cited several market factors and franchisor success stories that point to a strong improvement in the overall health of the restaurant franchising sector.

Since the recession began, the tight credit market and lack of financing options had affected most franchises, and hampered their ability to sell and open additional locations. Recent improved access to capital and other factors are helping franchisors, especially those in foodservice, get back on track.

“While we are still in a tight credit market, franchise financing is much better than it has been over the last two years,” states Mark Siebert, CEO of iFranchise Group. “Franchisees are finding it easier to get the funding they need to open units, and we’re seeing more restaurant franchisors hit, and even exceed, their franchise growth goals as a result.”

Improved credit availability is not the only factor that is helping restaurant franchising climb out of the recent recessionary period. Current labor and real estate conditions, while challenging for individuals and property owners, are actually favorable for franchise systems looking to expand.

Continues Siebert, “The availability of quality labor is unlike what we’ve seen in just about any other period. There are more qualified workers out there looking for employment, and employers are able to hire them less expensively than before.”

In addition to advantageous labor and wage conditions for employers, franchise systems are also benefitting from an increased availability of prime restaurant locations, and the fact that landlords are more willing to negotiate lease terms than they had been in the past.

“The recession caused a high number of restaurants to shutter,” adds Siebert. “This in turn has opened up the market of desirable locations. Faced with vacant properties in their portfolios, owners and landlords are cutting deals and offering incentives that are simply unprecedented. There hasn’t ever been a better time for a franchise restaurant owner to be able to get favorable terms on space and lease options.”

Given the shift in market conditions facing restaurant franchises, iFranchise Group franchise consultants and executives point to a number of their young foodservice franchise clients that have seen dramatic sales and expansion in recent months:

How Do You Roll?, an Austin, Texas-based alternative sushi bar, is experiencing rapid growth. The chain, founded in 2009 and first franchised in 2010, has over 65 franchises contracted to open in Texas, Florida, and California over the next eight years, including 10 slated to open in 2011 alone.

Newk’s Express Café, with the original founders of McAlister’s Deli at its helm, has sold 70 franchises since the beginning of 2010, with 115 overall in development and plans to continue on an aggressive growth track in the months and years ahead.

Fuzzy’s Taco Shop, another Texas-based fast casual dining chain which features a Baja-style Mexican food menu with a cult-like customer following, has sold 130 franchises with very limited franchise marketing efforts.

Hot Head Burritos, an Ohio-based concept founded by a Subway franchisee which started franchising in 2010, will have 28 locations open by year end and 50 in some stage of development.

Siebert concludes, “All signs point to an ongoing period of healthy growth in restaurant franchising. For restaurant franchisors that have a compelling brand and a concept that is working in ‘the new economy,’ there is a booming market for franchise sales.”

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About iFranchise Group: iFranchise Group, is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide.

Social Media in Franchising

SOCIAL MEDIA NOT WORKING IN FRANCHISING?

iFranchise Group Notes Limited Use of Best Practices for Making Social Media Effective in Franchise Recruiting

HOMEWOOD, IL – Franchise consultants with iFranchise Group, a leading franchise consulting firm based in the Chicago area, have noted that a growing number of franchise systems are utilizing social media, not only for branding and communication purposes, but also for franchisee recruiting. For a select few franchisors, the results are positive. But for most, their results have not produced a measurable increase in franchise sales.

Despite the increased activity and budget allocation focused on social media, only a small percentage of franchisors who utilize social media to attract franchise buyers can actually attribute franchise sales directly back to their social media efforts.

The key, according to iFranchise Group executives, is knowing how to best implement and use social media across multiple platforms for multiple audiences, and ensuring that proper policies and monitoring functions are in place.

Benefits and Dangers of Social Media. As with all marketing, franchise companies’ efforts and expenditures around a social media strategy will depend on their various goals – whether local limited-time promotions, cultivating a fan base for the brand, or generating leads for franchise sales. Any interaction the brand has on the web – a posted article, answering questions on social media forums, posting videos, etc. – can improve organic search results and drive traffic to the company website, which is typically the goal for franchise sales, in particular. But on a broader scale, franchisors should be aware that all social media postings have the potential to impact the brand, both positively and negatively, so all social media content and posts should be frequently checked and updated.

Distinct Uses of Social Media in Franchising. Not all social media is created equal. When comparing options such as Facebook, LinkedIn, and other social media sites, franchisors need to recognize that social media that consumers or clients use is likely to be different than social media that franchise prospects will use. And, while the general population may look to social media for deals and discounts, in the franchise sales arena it is mainly used as a first stop on the way to the franchisor’s website.

“There’s a big difference between using social media to push out sandwich coupons and using it to attract investors to purchase a multi-unit franchise deal,” says iFranchise Group CEO, Mark Siebert. “In franchise sales, a franchisor’s ultimate goal should be to drive all its social media traffic to the company website and keep it there long enough to capture lead information.”

Recent data shows that social marketing is not replacing traditional media but rather enhancing it. Franchise industry surveys show a relatively low percentage of franchise sales can be actually attributed to social media; meaning it cannot be relied on alone and should, instead, be blended with a variety of other media options.

The Importance of Developing Social Media Policies. iFranchise Group franchise consultants also point out that the main social media functions in franchise marketing – local consumer messaging and franchise recruitment — are distinct, and that franchisors should develop policies around the use of social media for all purposes, system-wide.

“Our franchise consultants advise our clients to develop a comprehensive social media policy for their brand,” states franchise consultant and iFranchise Group President, Dave Hood. “For example, in most cases, franchisors will allow franchisees to establish their own local social media sites rather than having one central site for the brand. However, even with policies in place, franchisors need to continually monitor a franchisee’s use of social media much like they would any other form of local marketing.”

For more information about improving social media presence and tactics or developing appropriate social media policies, franchise companies are encouraged to contact iFranchise Group.

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About iFranchise Group: iFranchise Group is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide.

 

 

High-Tech Tools for Quality Control in Franchising

FRANCHISE CONSULTANTS CITE 21ST CENTURY QUALITY CONTROL TOOLS AS THE KEY TO FRANCHISING

iFranchise Group Discusses the Importance of High-Tech Information Storage and Delivery for Successful Franchise Systems

HOMEWOOD, IL – The iFranchise Group (70.32.98.159), a leading franchise consulting firm based in the Chicago area, recently held a seminar for the franchise community that included information and guidance on how to use technology to help ensure quality control within franchise systems.

“Controlling quality and maintaining operational consistency is vitally important to the success of any franchise,” stated franchise consultant and iFranchise Group CEO, Mark Siebert. “It is the cornerstone of replicating any business model across a network of locations. That’s why franchisors continually need to find ways to provide easy access to current information to their franchisees.”

Highlights from the seminar included a discussion of best practices in the creation, maintenance, and delivery of critical documents such as confidential operations manuals and other franchise training materials.

Secure Intranet Sites for Confidential Document Storage. Not long ago, creating online access to essential documents was cost-prohibitive to many franchise companies. But technological advances have made the cost to set-up and maintain system-wide intranets much more accessible to franchisors of all types and sizes. And, at the same time, people on both the franchisor and franchisee side of the equation today are more comfortable with accessing critical information electronically rather than in hard copy.

Therefore, with cost and usage barriers no longer an issue, franchisors are finding that housing their confidential and mission-critical documents – such as operations manuals — in a secure online setting provides them with a number of key advantages. Important information stored and accessed electronically can be:

 Easily searched by users for quick access to desired content

 Seamlessly linked to data, both within the document and to external source material and websites

 Kept secure through password protection and distinct access levels for different positions within the franchisee’s business

 Updated inexpensively and in a timely manner, since there is no need to send out new printed information to replace outdated content

Online Training Libraries. iFranchise Group franchise consultants and executives went on to show that conducting franchisee training through an online learning management system, both at start-up and on an ongoing basis, has similar benefits. While online training cannot completely replace in-person, hands-on training, the advantages include:

 Streamlined, cost-effective remote training sessions; ideal for material that can be recorded, archived, and delivered on an as-needed basis

 Better tracking of completed training requirements by individual employees at each franchise location

 Readily updated information to reflect the most current procedures

 Simplified synchronization of training materials with operations manuals and other documentation

 Easy integration of video and other multi-media presentations into training materials

Franchisors interested in learning more about how to create and maintain state-of-the-art quality control and training systems for their businesses are encouraged to contact iFranchise Group for more information.

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About iFranchise Group: iFranchise Group (70.32.98.159 ), is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide.

 

 

Trends in Optimizing Franchise Sales

FRANCHISE CONSULTANTS TALK TOP TOOLS AND TRENDS
IN FRANCHISE SALES

iFranchise Group Discusses What Franchisors Need to Keep in Mind
to Optimize Sales Efforts

HOMEWOOD, IL – The iFranchise Group (70.32.98.159), a leading franchise consulting firm based near Chicago, is confident that franchise agreements will continue to be signed at increased rates this year and beyond, even with ongoing challenges still facing most franchisors. The company believes that the successful sale of franchises, however, will depend on franchisors being able to intelligently leverage available financial tools, existing and emerging technologies, and, of course, human resources to their best advantage.

Financial Tools for the Franchise Sales Process. Though lending conditions have been gradually improving, franchisors, just as any other businesses, are still feeling the effects of tightened credit that has characterized business lending over the last few years. Franchisors are finding they need to actively assist their potential franchise buyers by exploring and even providing direct access to options beyond traditional bank loans.

“Non-traditional funding sources such as local credit unions and venture capital, along with SBA-backed lending, and even in-house financing are all playing important roles in achieving franchise sales. And as franchisors and franchisees learn to navigate the financial field and seek out financing alternatives, plus with credit loosening even more, we expect franchise sales to be up by 10% to15% or so this year, and likely up 20% in 2012,” reports iFranchise Group CEO, Mark Siebert.

Other industry executives echo this sentiment. “It’s critical that franchisors do whatever they can to help ensure a franchise sale does not completely stall out in the final financing stage,” says Robert Stidham, President of Franchise Dynamics, a strategic partner of iFranchise Group which provides outsourced franchise sales services.

Using Technology in Franchise Sales. Technology also continues to play an important role at every step in franchise sales. But savvy franchise industry insiders know that it is an ever-changing field; what may have been a failsafe way to sell franchises just a couple years ago may be obsolete today.

“Franchisors need to understand the importance of using every bit of current technology to their advantage when selling franchises. It’s no longer just a matter of promoting their concept online via their websites,” says Siebert. “Through our ongoing franchise consulting services, we constantly educate our clients that it’s all about using a variety of tailored online marketing and social media options to get the message in front of the right prospects. It’s about using communications technology, such as e-brochures and webinars, to drive a prospect from first inquiry through to the date of the franchise sale. And, it’s about continuing to use technology even after the franchise is sold, to assist with important functions like site selection, vendor relations, document delivery, and more.”

The Importance of People to Franchise Sales. Industry experts also recognize that in franchise sales, people are often the most crucial ingredient. “The best results come from hiring the best people, giving them the right resources, and managing them for performance, effectively,” comments Stidham.

“I’ve been a franchise consultant for more than two decades, and I know that in the end, franchise sales are still all about building long-term personal relationships,” adds Siebert. “No matter how state-of-the-art the tools are, no matter how many pre-approved financiers a franchisor works with, if the sales staff is not properly motivated to identify and select the right candidates, and if candidates do not feel comfortable with the franchisor’s representative, deals will not get done.”

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About iFranchise Group: iFranchise Group (70.32.98.159 ), is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide.

Strategically Managing Legal Matters in Franchising

TOP FRANCHISE CONSULTANT OFFERS INSIGHT ON STRATEGICALLY MANAGING LEGAL MATTERS IN FRANCHISING

iFranchise Group Executive Discusses Franchisor Strategy
in Light of Key Legal Issues

HOMEWOOD, IL – The iFranchise Group (70.32.98.159), a leading franchise consulting firm based in the Chicago area, works closely with franchisors and their attorneys as they develop or modify their franchise systems and related legal documents. In a recent interview, experienced franchise consultant and iFranchise Group President, Dave Hood, talked about trends and other common concerns in franchising as they pertained to the creation of franchise legal documents, the management of franchise systems, and strategically managing legal issues in franchising.

Q: What advice would you give new and existing franchisors when they are creating or updating their franchise legal documents?

Mr. Hood: Franchisors should analyze or benchmark the practices of franchise systems in similar industries. And, when franchisors consider making any significant change to their existing franchise agreements, they should always assess the potential impact of the change from the perspective of both the franchisees and franchisor. Most important, franchisors should only work with an experienced franchise attorney when drafting or modifying their legal documents; franchising is highly regulated, and it’s critical to work with lawyers with ample experience in franchise law to avoid potential pitfalls.

Q: What do franchisors need to keep in mind this year and going forward in terms of “hot topics” in franchise law?

Mr Hood: I’d say to continually monitor changes in the state laws regarding taxation and employment. In recent years, multiple states have been seeking ways to tax royalty income for out-of-state franchisors. This was most notably supported within the last few months by an Iowa Supreme Court decision that upholds the state’s ability to tax out-of-state franchisors based solely on having franchisees in the state. We expect more and more states will follow suit in the future. Franchisors need to understand that advances in technology make physical presence obsolete in some situations. Thus, they must be sure the attorney they retain to draft their documents has a thorough understanding of the nature of the business and franchise. And, they’ll need to have a highly detailed strategic plan prepared before creating any legal documents.

Also, franchise documents have recently been under scrutiny for how they establish the legal relationship between the franchisor, franchisees and their employees. Franchisors need to have carefully worded legal documents that do not inadvertently create an agency relationship or other employment-related arrangement as they structure their franchise programs. Recent cases show that some local courts look beyond contract language and closely examine the actual business structure; so, in addition to including appropriate language in the Franchise Agreement, franchisors have to truly treat franchisees as independent operators.

Q: What do you see as key to successful franchising from a legal perspective, now and in the future?

Mr. Hood: Franchisors should keep their legal contracts as simple and straightforward as possible, and also be consistent in terms of how they enforce contracts from one franchisee to the next. They should also ensure the franchise agreement is flexible enough to allow for changes in the system or industry. Also, as the economy slowly recovers from the recession, franchisors need to stay on top of the financial health of their franchisees to ensure they remain strong. Franchisors should be very proactive in identifying franchisees who are at risk financially, and should develop internal programs or practices for addressing struggling franchisees before bigger legal issues arise in the relationship.

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About iFranchise Group: iFranchise Group (70.32.98.159), is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide. Since its inception in 1998, iFranchise Group has dedicated its efforts to establishing long-term, strategic relationships with franchisors, both new and established, and other companies seeking consultative guidance with business expansion strategies. With a staff of franchise consultants with a combined 450+ years of experience in franchise development and implementation, iFranchise Group has worked with over 30 Fortune 2000 companies and with 98 of the world’s top 200 franchisors as rated by Franchise Times magazine.

Hot Trends in Franchising

FRANCHISE CONSULTANTS IDENTIFY “WHAT’S HOT” IN FRANCHISING

iFranchise Group Executives Discuss Top Trends in Franchising for the Year

HOMEWOOD, IL – The iFranchise Group (70.32.98.159), a leading franchise consulting firm based in the Chicago area, sees a number of current trends in franchising that they expect will endure, and has identified others as ones to watch as 2011 continues to unfold. Key franchising trends they have indentified fall into several main categories:

1. Innovative and healthier foods

2. “Green” products and services

3. Health and wellness businesses

4. Low cost and other market-appropriate concepts

Franchising has seen a recent influx of trendy foodservice concepts. Some of the most notable of those include gourmet hamburger restaurants, as well as the return of frozen yogurt shops, many offering a new self-service spin on a concept that was first made popular back in the 1980’s.

According to Mark Siebert, noted franchise consultant and CEO of iFranchise Group, “Upscale burgers and frozen yogurt have been going strong for a little while now, and probably have another three years of continued aggressive growth before we start seeing market saturation.”

Healthier foodservice concepts are also making impressive headway in franchising, such as healthy pizza recipes featuring fresh and organic ingredients, as well as newer ethnic food franchise entries including Middle Eastern and Indian cuisine.

Of course, innovation and appeal isn’t limited to restaurants and foodservice. An influx of environmentally-aware franchisors and franchise buyers is carving out a new niche in franchising. iFranchise Group franchise consultants and analysts believe some new leaders will soon start emerging, especially those that focus on solar technology and other energy savings-oriented businesses.

Adds Mr. Siebert, “With more and more people aware of and concerned about minimizing the negative impacts businesses have on the environment, it’s not surprising we’re seeing new franchise systems come along that focus on earth-friendly products and services, and that help consumers and businesses alike find ways to reduce their carbon footprint.”

Experienced franchise executive and iFranchise Group President, Dave Hood, also sees a common thread among franchise concepts he works with, in his role as project director for the franchise consulting firm. “Health and wellness businesses overall continue to focus on expansion through franchising,” says Mr. Hood. “We’re seeing more wellness concepts in general coming into the franchise market. And of course, as the population continues to age, with more Baby Boomers fast approaching retirement age, we feel that senior-oriented franchise programs still have a lot of room to grow.”

Finally, according to iFranchise Group staff, the economic conditions that will remain, as the effects of the Great Recession slowly begin to abate, will also create new opportunities in franchising, and create hot trends in franchising in the year to come. Notes Mr. Siebert, “Any franchise systems that take advantage of the new market realities, whether they are services designed to assist with the lingering challenges in the housing market, or simply lower-cost or home-based franchises, will be well-positioned this year, and likely in years to come.”

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About iFranchise Group: iFranchise Group (70.32.98.159), is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide. Since its inception in 1998, iFranchise Group has dedicated its efforts to establishing long-term, strategic relationships with franchisors, both new and established, and other companies seeking consultative guidance with business expansion strategies. With a staff of franchise consultants with a combined 450+ years of experience in franchise development and implementation, iFranchise Group has worked with over 30 Fortune 2000 companies and with 98 of the world’s top 200 franchisors as rated by Franchise Times magazine.

 

Improvements in Franchise Financing to Spur Sales Boom

SMALL IMPROVEMENTS IN FINANCING TO SPUR FRANCHISE SALES BOOM

After a Lengthy Credit-Crunch, iFranchise Group and Franchise Dynamics Executives Expect Pent-Up Demand to Fuel Franchise Sales Explosion
as Credit Loosens in the New Year

HOMEWOOD, IL – The iFranchise Group, a leading franchise consulting firm based near Chicago, and its strategic partner company, Franchise Dynamics, which provides outsourced franchise sales services, are predicting a slow-paced loosening of credit for franchise systems and franchise buyers in the coming months. This comes on the heels of a protracted period, dating back to the early days of the recession, where funding and franchise financing has been extremely difficult to obtain, even for highly-qualified borrowers.

The franchising sector has not been immune to the challenges faced by home-buyers and sellers and small business owners: banks and other lenders, burned during the financial meltdown of 2008, had tightened the reins on just about all lending.

“Historically,” says iFranchise Group CEO, Mark Siebert, “One could reasonably assume that obtaining a loan to purchase a franchise would be a simple process, merely by demonstrating an interest in the business, some collateral, a decent credit score, and a minimal amount of liquid capital. When the banking and housing crisis became the new reality, things changed.” Demand for franchises, however, continues to grow as unemployment remains high. “With all of the pent-up demand created by the continued unemployment situation, even a small change in loan availability will likely create a huge positive impact on franchise sales.”

As a result of the recent difficulties in obtaining financing, some larger franchisors, in the foodservice sector in particular, have raised the requirements for franchise buyers, expecting them to have prior industry and business-ownership experience, and greater pools of liquid capital, in order to be considered for entry into their systems. Even experienced multi-unit owners and franchisors have found it challenging to obtain funding from traditional sources when they look to open additional franchise units or divest themselves of corporate units to convert to franchises.

But signs point to change on the horizon. The Small Business Jobs Act, passed earlier this Fall, included a pool of $30 billion in low-cost capital available for small business lending. The Act also stipulated enhanced SBA loan provisions – such as the elimination of guarantee fees, reduced the fees charged to lenders, and increased guarantee levels offered — as well lending support, tax cuts, and other opportunities for entrepreneurs and small business owners. The Treasury Department also announced $1.5 billion in funding to the State Small Business Credit Initiative, under which states partner with local lenders to extend credit to small businesses.

According to Robert Stidham, President of Franchise Dynamics, “At this point, we still see most loans being done by community banks and credit unions, plus we see more investors or investment groups funding franchise sales. Many banks want to lend, but lending standards and required documentation remain stringent. We are already seeing some indications that access to financing is improving, and our clients have seen it as well.” Stidham predicts that 2011 will be a banner year for franchise sales. “We had a record year in 2010 despite the lack of available financing. As capital availability improves, we expect that franchise systems will be the big beneficiary.”

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 About iFranchise Group: iFranchise Group (70.32.98.159), is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide.

 

About Franchise Dynamics: Franchise Dynamics (www.franchisedynamics.net), is the nation’s first full-service franchise sales outsourcing firm. Franchise Dynamics provides a complete solution for its clients’ franchise sales needs. Full cycle franchise sales outsourcing services include providing dedicated sales staff, franchise marketing input, initial lead handling, materials distribution, preliminary qualification, FDD disclosure, “discovery day” presentation, document management and both pre- and post-franchise sales closing support.