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23
Jun
10

5 Principles for International Franchise Sales: It’s More Important to Find the Right Fit than Sell to a Willing Buyer

By Tracy Weise 1 Comment
Categories: Branding, Business growth, Franchise, Franchising and Legal
Tags: , , , ,

At Faegre & Benson, Brian Schnell is the lead corporate franchise lawyer for more than 80 franchisors. He helps franchise systems navigate the legal process of expanding internationally, including understanding the ramifications of international marketing and sales decisions and how those decisions can effect your established brand.

Brian has taken the time to provide the readers of The Side Note insight into his experience.

Many U.S. franchisors are looking to overseas expansion as a way to continue growth for their franchise brand and system. Franchisors who have successfully expanded internationally always emphasize the importance of finding the right international franchise candidates, rather than emphasizing getting a deal done and collecting a big upfront fee.  In order to maximize the opportunities for successful international deals with long-term success, franchisors are encouraged to focus on the following principles:

1) Award (Do Not Sell) International Franchise Rights

The key distinctions between awarding and selling are the attitude and resulting relationship both parties have once they sign an agreement.  If the international franchisee buys the rights to their country or a territory within their country, they likely believe they own those franchise rights. This is particularly true when the franchisor tells the international franchisee to modify the operating system for local customs.  This purchase mentality is reinforced if the international franchisee has master franchise rights and immediately begins subfranchising.  Subfranchising often happens before the master franchisee truly understands the business, the marketplace and in general, what it means to be a franchisor.

Contrast this sell/buy mentality with awarding franchise rights. The difference starts in prospecting. It needs to be clear in the beginning that the international franchisee will own its business assets, but those business assets include a license to use the franchisor’s trademarks and operating system, which is being awarded to the franchisee. The smart franchisor focuses its presale discussions with the international candidate on the franchisor’s brand opportunity in the country, the roles that the franchisor and franchisee will play in rolling out the brand and the importance of collaborating in building the brand and the brand’s customers.  This subtle difference channels both the franchisor’s and franchisee’s efforts on mutually working together, rather than the behaviors that ensue when the international franchisee believes it has purchased something.

2) Build an Emotional Bond with International Candidates

With the appropriate awarding mentality in place, the franchisor can spend less time on selling its franchise opportunity and more time on determining if the international candidate is prepared to make an emotional commitment.  Successful brand building and successful franchise building is more about emotion than pure economics.  Most international franchisees have the financial strength to do the deal, but if the international franchisee is not fully invested emotionally, than the chances of long-term success in the country are greatly diminished.

Too many franchisors overlook this key issue in their search for international candidates.  Statistics show that most international franchisees fail to meet development schedules throughout the life of the deal.  One reason this occurs is that the international candidates have been sold, not awarded, their rights. No emotional bond exists between the franchisor and franchisee. Therefore no emotional bond exists between the franchisee and the brand.  If the emotional connection is not established in the beginning, the international franchisee struggles, loses confidence and interest, and likely makes a half-hearted effort in developing the brand in the country.

3) Establish the Importance of Your Culture and Brand

The franchisor must emphasize the culture of the company and the role it plays in the franchise system, both domestically and internationally.  An international franchisee can properly change certain aspects of the operating system when it expands in its country, but they should not change the franchisor’s culture.  Further, a franchisor’s culture is akin to the brand culture, as this is the foundation for promises that are made to brand customers (we promise/we deliver).  The emphasis on the culture is often overlooked in the international sales process, when it should be a core component. If the international franchisee does not understand and embrace the franchisor’s culture or brand, frustration and miscommunication will result and breakdowns will occur.

4) Focus on the Mutual Fit

During the initial conversation with an international candidate, the franchisor should clearly explain the objective is for both parties to determine if the fit is right. Is the candidate a good match for the franchisor and is the franchisor the right fit for the candidate?   In the end, if both parties have determined a mutual fit exists, then the next steps of the relationship (building, expanding and operating the brand in the country) take on a collaborative tenor. Furthermore, when a challenge arises (and challenges will indeed arise), the established relationship will allow the parties to work through those challenges quicker and more collaboratively.

5) Be Prepared to Walk Away

If the focus is in on mutual fit, then the parties should have an understanding that if at any time one of the parties determines the fit is not right, then both parties will part ways and wish each other the best.  International failures are often results of signing deals instead of walking away. Often the franchisor gets too focused on finalizing a deal and receiving the upfront franchise fee that warning signs against the match are missed or ignored.

The bottom line is that successful international franchisors understand the critical nature of the approach they use in their development.  The franchisor should design an approach and structure conversations with potential franchisees that focus on fit above all else.

About Brian Schnell

Brian Schnell is a leader of the Faegre & Benson franchise practice. He counsels both emerging and mature franchisors in a variety of industries on all aspects of their franchise programs. He is the lead corporate franchise lawyer for more than 80 franchisors, ranging from companies with thousands of locations worldwide to companies in the initial stages of building their franchise systems. Brian is a past chair of the International Franchise Association Supplier Forum and a member of its Legal and Legislative, Awards and Membership committees. As the first male to receive the IFA Women’s Franchise Committee Crystal Compass in 2009 based on his leadership in franchising, he is recognized nationally as a leading franchise lawyer and is a frequent speaker and author on franchising topics.

04
Jun
10

Hanes and Michael Jordan – Another Integrated Marketing Campaign Done Well

By Tracy Weise Leave a Comment
Categories: Ad Agency, Ads, Advertising, Branding, business to consumer, Marketing and Uncategorized
Tags: , ,

I would like to start this blog with a few personal comments. While my husband may not think I know who Michael Jordan is, I do. I may not be an over zealous basketball fan, but who doesn’t want to be like Mike? And to top it off, I love his Hanes Commercials. And don’t judge me, men love Victoria Secret commercials for the same reason women enjoy seeing Jordan in his Hanes.

So when I read the New York Times article about the new Hanes commercials (sans Charlie Sheen) it took me about 15 seconds to blurt out, “I love those commercials!” And now there is even more to love. Hanes has fully integrated the TV and radio campaign to include Rick’s blog (its rather lame, but so is Rick). The website promoting the story of Rick and Michael (stuck on a flight to Sydney together) is terrific. I especially like the comfort demos.

You can also follow Hanes Comfort on Twitter and on Facebook. I feel like the Facebook page could be a bit more Jordan-esque, but what is cool is that you can sign-up for Hanes weekly giveaway for a chance to win two round-trip JetBlue Airways certificates.

All of the commercials can be seen either on the website or on YouTube. I especially love the “bacon neck” ad.

The beauty of integrated campaigns, such as the Hanes campaign, is their ability to make use of multiple media channels – TV, radio, and social media to name a few. Messages reach larger audiences and can more specifically target service and product audiences.

What do you think? Will Jordan convince you to purchase some Hanes? Will you get involved in following Hanes in their social media campaign? What do you think about the campaign?

Is your business ready to utilize the power of an integrated campaign? Visit Weise Communications for help in making your campaign a success.

17
Mar
10

Major Corporations Not Advertising Healthy Options…To Protect The Unhealthy Ones?

By Tracy Weise Leave a Comment
Categories: Advertising, Branding, business to consumer, commercials, healthcare marketing, Marketing and Uncategorized
Tags: , , , , , , ,

A recent article in Advertising Age explained that some major food production companies are doing away with high-fructose corn syrup (HFCS) as their main sweetener ingredient and replacing it with good old plain sugar. The switch to sugar is limited to certain products. I am no doctor or dietitian or nutritionist, but I have taken enough health, wellness and work out classes to know that high fructose corn syrup is unhealthy for two reasons – it’s sugar and it’s processed. And worse yet, it comes in virtually everything you buy that is packaged in the grocery store.

I also know that people are fed up with it. Which is why the switch is being made back to sugar. As HFCS became a cheap and easy way to add “flavor” to pre-packaged foods, obesity rates quickly began to climb. The statistics vary, but a variety of research says that the average American annually consumes upwards of 54 pounds of sugar, just in soda. Total annual sugar consumption for Americans is between 100-120 pounds, each. Yikes! You think you are not one of those people? Check out the foods you normally buy in the grocery store, many have HFCS included as a top ingredient – bread, yogurt, pasta, salad dressing, ketchup, pickles… the list goes on and on.

So why would a major food producer like Hunts Ketchup or Wheat Thins NOT do a major marketing splash when they eliminate HFCS from their foods? It’s not because of the lingering recession; it’s because of the unwillingness to take business away from their other brands that still carry the HFCS. (My guess is that non-HFCS products will be more expensive to purchase.)

According to the same article, Pepsi and Mountain Dew are marketing their products that have switched from HFCS to sugar – but these changes are for a limited time only. So they are making and marketing a short-term change to sugar, not a long-term one. See the Mountain Dew Commercial here:

I have issues on so many levels with all of this information (don’t get me started about why sugar is added to my bread or spaghetti sauce.), but my major concern is that the brands don’t want to advertise that they are switching from HFCS to regular sugar because they don’t want to hurt their HFCS brands, or confuse the consumers that don’t understand the issues with HFCS. Wouldn’t we all be better off if they did shout the change from the mountain top? Shouldn’t they be proud of this switch? Or are they just trying to defer the spotlight from how much sugar (sweetener, HFCS, whatever…) are in their products to begin with?

To make matters worse, we still have the Corn Refiners Association running a major advertising campaign stating that there is no difference between HFCS and sugar. The implication being that either are fine for you. You can see one of their commercials here:

OK – I’ll give them that added sweetener is still just that – added sweet. But HFCS is still processed, and our bodies react differently to it than to sugar. And I firmly believe that when a switch is made to a healthier ingredient, we should celebrate this, not hide it.

28
Jan
10

File This Under “What Were They Thinking?”

By Beth Hardy 3 Comments
Categories: Branding
Tags: , , , ,

I’m jumping on the “Are there any women in Apple marketing?” bandwagon that Brooke Hammerling (@bhammerling) started yesterday in regard to the iPad. (Yes. I realize I’m a little late, but this was the earliest I could sit down and write this!)

I have no idea what Apple was thinking when they named their latest product, but they clearly didn’t run it by any focus groups that included women. If they had, I imagine the feedback would have been negative.

But now that the iPad is out, we can enjoy humorous comments like the following on PR Newser:

“All I know is that if I can buy it from a vending machine in the washroom, it’ll be damn convenient.”- nankevans

Funny stuff!

But in all seriousness, I’m a big fan of Apple products and I have no doubt that the iPad will be a big hit. We’ll all probably get used to the name and it won’t be such a hoot in the near future.

However, the lesson to be learned here is that Apple, being the huge corporation that it is with a good reputation for putting out quality products, can get over a silly naming gaffe. But other businesses may not be so lucky. A situation such as this could cause smaller, lesser know companies to fall flat on their faces, no matter how awesome their product. Take note when the big guys stumble to ensure you don’t make the same mistake.

20
Jan
10

Twitter influences Massachusetts Senate Election

By Jay Weise Leave a Comment
Categories: Branding, election, Facebook, Followers, Twitter, Uncategorized and YouTube
Tags: , , ,

The latest on how social media can make a big difference.

A story in the Wall Street Journal, by Susan Davis, gives great support for Scott Brown’s social media strategy, specifically his use of Twitter, Facebook and YouTube, being more effective and making a big difference in the outcome of the Senate Race in Massachusetts yesterday (1/19/10).

Atwitter in Mass.: Brown’s Social Media Strategy Tops Coakley’s

Below is an excerpt from the WSJ story:

A study conducted by the Emerging Media Research Council out today found that Brown had a more effective strategy of using social networking tools including Facebook, Twitter, and YouTube to promote his campaign and connect with supporters.

Here’s a look at the numbers:

Facebook Posts since Jan. 1: Brown (128), Coakley (58)

Facebook Fans: Brown (70,800), Coakley (13,529)

Tweets since Jan. 1: Brown (142), Coakley (144)

Twitter Followers: Brown (9,679), Coakley (3,385)

YouTube Videos: Brown (57), Coakley (52)

YouTube Video Views: Brown (578,271), Coakley (51,173)

What are your thoughts? Do you think that social media really had an effect on the outcome? What have you seen? What are your experiences? We all know social media can make a difference in an election, but do you think social media changing the election process?

02
Dec
09

TV shows about salad dressings and lipstick? Welcome to the (advertising) world of Webisodes

By Tracy Weise Leave a Comment
Categories: Advertising, Branding, Product Placement, Uncategorized and webisodes
Tags: , , ,

Product placement has existed for years. Companies pay big money to get their product placed in a movie or TV show. The blockbuster hit “New Moon” has a Burger King bag precisely placed in the middle of a scene, and “American Idol” may as well be called “Coca-Cola’s Idol” with the grotesque amount of product placement on that show.

But what happens when the entertainment outlet doesn’t exist for your product? You call in the advertising agencies that know how to get creative, and then you create your own entertainment outlet. Welcome to the world of Webisodes.

According to Wikipedia, “A webisode is simply a web episode – collectively it is part of a web series, a form of new medium called web television that characteristically features a dramatic, serial storyline, where the primary method of viewership is streaming online over the Internet. While there is no set standard for length, most webisodes are relatively short, ranging from 4–15 minutes in length.”

Stuart Elliot in a New York Times article writes, “Webisodes — part of a trend called branded entertainment — are growing because marketers feel compelled to find new methods to reach consumers in an era when the traditional media are losing eyeballs, ears, hearts, minds and perhaps other body parts to the Internet.”

Webisodes are being created to advertise everything from makeup to cleaning products and salad dressings. And, like most advertisements that run when and where the target audience is viewing, Webisodes are being placed on specific Web sites that reach the most appropriate audience. Hidden Valley Ranch Webisodes, for example, star Jenny Garth and will be featured on ivillage.com starting this January. I personally like Jenny Garth, the new queen of Webisodes, but I hope the “entertainment” is strong since I can’t really get my head around being interested in ongoing mini-shows about salad dressing.

A Webisode currently getting plenty of attention is Maybelline’s “The Broadroom” (also starring Jenny Garth). Episodes for your entertainment are below.

What do you think? Are Webisodes the new marketing platform that will get your attention? Not cheap to produce, are they worth the cost? What products would you like to see in a Webisode?

20
Nov
09

Gap commercial… What is the problem here?

By Jay Weise 14 Comments
Categories: Ads, Advertising, Branding, Business growth, Business Strategies, Cheerleading, Christmas, commercials, Creative, Holiday, location data, Marketing, Publicity, Publicity Stunts, Recession, Stunts and Uncategorized

In the last few days, the blog world has exploded in controversy with this new Gap holiday commercial. I saw it on TV last night and I thought there was cool dancing, there must be cheer leaders to pull that off, especially the girl who gets tossed 20 feet in the air at one point, nice sound stage to shoot on, good choreography. I also think the lyrics were fine…except that the Gap is showing its PC side. We have seen mostly PC holiday messages for years now.

But now there are groups (well, one actually: American Family Association – AFA) that are all bent out of shape because in the commercial’s lyrics say “You 86 the rules, you do what feels just right.”

I just dont understand the problem with the commercial. What do you think?

I have to run. I am attending a “Celebrate the coming of Winter with this Winter Welcome gathering” at Stapleton’s town center. Now that’s just another PC name for the lighting of the Christmas lights at my town center.  I hope people aren’t upset when they get there to find out Christmas won’t be mentioned anywhere. What a world we live in.

Here are the lyrics for the GAP commercial:
Two, Four, Six, Eight, now’s the time to liberate
Go Christmas, Go Hanukkah, Go Kwanza, Go Solstice.
Go classic tree, go plastic tree, go plant a tree, go add a tree,
You 86 the rules, you do what feels just right.
Happy do whatever you wanukkah, and to all a cheery night.

Go Christmas, Go Hanukkah, go whatever holiday you wanukkah.

13
Nov
09

Steve Hayden: Product Focus groups are Silly

By Jay Weise Leave a Comment
Categories: Ad Agency, Ads, Advertising, Brand Loyalty, Branding, Business growth, Business Strategies, business to consumer, Copy writing, Creative, Facebook, focus groups, NFL, Social Media, Uncategorized, Video Ads and YouTube

Last night here in Denver, while listening to Steve Hayden’s talk From Big Ideas to Big IdeaLs… (that’s an entirely another blog on another day)…Steve talked about a campaign for Shreddies, the Canadian version of Shreaded Wheat here in the U.S., that used a focus group to learn more about the new Shreadies product, DIAMOND SHREADIES. As you’ll see, people in focus groups are very polite people and will provide the desired response even if obviously wrong. This “focus group” video was then posted on YouTube and was viewed by almost a million people, that’s a lot in Canada, and sales ‘went way up beyond expectations’ after this and the new “Diamond Shreadies” campaign broke. I agree with Steve. It is silly to use focus groups to gain insight into the effectiveness of an ad or when your questions in the focus group lead the people to the answers you want to hear.

See for yourself.

Focus Group Video

Shreddies Commercial

Also, 81 Facebook pages and over 280 discussion groups have been started on this topic of Diamond vs. Square.

Steve Hayden is one of the most revered advertising copy writers since the mid 1970′s. He’s most respected for his “1984″ commercial for the introduction of Apple’s Macintosh computers… an ad that only ran once during the 1984 Super Bowl, and most recently the “Real Beauty” campaign for Dove.

28
Oct
09

Branding Social Media Programs for Franchises; On the National, Regional and Local Level

By Tracy Weise Leave a Comment
Categories: Branding, Franchise, Franchising, Marketing, Social Media, Twitter and Viral
Tags: , , , , , ,

We recently studied several franchise groups and their social media programs. These organizations had national, regional and individual business Twitter, Facebook and LinkedIn accounts. We picked up on one major problem that seems to be a spillover from traditional franchise advertising — not paying attention to or following brand guidelines. Different logos were used, different ID nomenclatures were implemented and different tactics were being employed. And all this “different” leads to an erosion of the brand.Picture 6

It is possible, of course, that social media brand guidelines have not been established for the franchise systems we studied. But as previously mentioned on The Side Note, branding is in the details. There is no excuse for a system to have an absence of guidelines when individual franchise owners or regions are implementing social media campaigns independent of the national campaigns.

If you don’t have social media rules of engagement and branding guidelines, you need to get one established, now.

The following are suggestions for you to include in your guidelines.

1. Pick a version of your logo, or establish a new version of your logo, to be used on all social media sites.  Make sure it is used consistently and appropriately.

2. Establish a basic nomenclature for on-line networking sites. Similar to how you have established your email addresses (last.first@xyzco.com), create a specific formula for Twitter IDs and Facebook fan/group pages.

Example: Twitter IDs for a hair salon or donut shop may be called: DenverGoodHair, AuroraGoodHair or VailDonutKing, StCldDonutKing

3. Don’t be afraid to get creative. Just like vanity URLs, consider a vanity online “handle” for your organization’s social media account. Instead of just referring to your company by name, describe it or use your tagline.

Example: Facebook fan pages for an automotive franchise may be called:

San Diego, You can’t get better car care anywhere else

Manassas, You can’t get better car care anywhere else

4. Take advantage of the Twitter background to make it creative, and include your business information. Make sure this background or elements of it are used consistently by all of the franchises.

5. Make sure the company reference is consistent throughout all media posts. For example, either use your acronym or your full company name – pick one reference and stick to it.

6. Make sure the language used to refer to your services is used consistently. Is it a “blow-out” or a “wash and style”?

Don’t forget, when it comes to maintaining the integrity of a brand, all the details matter. With the explosive growth in social media, it’s important that you develop not only rules of engagement for all franchisees to follow, but that specific branding guidelines are developed as well.

Does your franchise system have a social media branding guideline? What tips can you provide to others? Share them here.

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