Seven inches of snow greeted the Weise Communications team upon landing in Denver from the International Franchise Association (IFA) 2013 conference in Las Vegas. The conference was full of highlights, including:
CEO of CKE Restaurants, Andrew Puzder explaining how Carl’s Jr and Hardee’s bucked the trend of targeting mom’s with children for a fast food restaurant and changing to a ‘Young Hungry Guys’ target which led to the infamous Paris Hilton commercial and unprecedented revenue increases.
A lasting, and to many frustating experience, was the image is the ½ mile long line of people queuing up to attend the speech given by former U.S. Secretary of State and National Security Advisor Dr. Condoleezza Rice. Her speech and the following Q&A were fantastic. She received multiple standing ovations from this friendly audience.
The four-day conference didn’t disappoint. After panels, concurrent sessions, roundtables and a host of meetings, we are going to break-up the top ten takeaways Tracy and I collected at the conference. Today, the first 5 takeaways deal with macro trends and issues that are franchise business specific. In part 2, we will reveal our marketing takeaways.
1. In 2012, there was optimism that economy is turning and that financing for franchisors and potential franchisees was beginning to loosen. That optimism has continued despite the November election eliminating the chance of a lower corporate tax rate.
2. Speaking of the elections, instead of focusing on electing business-friendly government officials, the election has provided certainty how the country will be governed. We are already seeing the impact of higher taxes, burdensome regulations and costly entitlement programs. The franchising industry response needs to be: adapt, figure out how to work the rules and grow business.
3. In a panel discussion featuring Shelly Sun of BrightStar Tariq Farid, CEO Edible Arrangements and Steve Greenbaum, CEO PostNet there was an exchange about indicators of when to make changes to the franchise business model. Tariq said all franchise systems will eventually have to change. Steve provided us with key indicators on when to consider making changes. They included:
- When your customers’ needs have changed
- When technology has evolved past your business
- When there is over-saturation in the marketplace
- When there is an absence of differentiation with your business and the marketplace
- When year over year sales are flat or declining
4. There was a lot of discussion about paying referrals to franchisees to gain new franchise sales leads. There are two legal concerns that need to be considered:
- If a franchisor pays too much for a referral, they are exposing themselves to a potential liability. The franchisee could be considered a broker and be exposed to licensing issues
- The franchisee could be held to the same financial disclosure requirements as the FDD
5. Operation Enduring Freedom and the VetFran Program has been a raving success. The stated goals were to recruit and hire 75,000 veterans to careers in franchising by the end of 2014. IFA President Steve Caldeira gave an update during his State of Franchising address: 64,880 veterans, military spouses and wounded warriors have started careers in franchising.
Be on the lookout for our top five marketing takeaways from 2013 International Franchise Association Conference.