Public Affairs Conference Success – On To Franchise Update TODAY

The IFA Public Affairs Conference was high energy and positively charged. IFA’s Conference and Government Affairs team was on top of their game and did a stellar job in keeping the program on track and the speakers relevant. George Will as a repeat speaker worked well for me as well. He was every bit as good this year as we was last. Just as he does weekly on ABC’s This Week with George Stephanopoulos, he breaks down all of the political double speak, to the simplest of common denominators.

More than 400 IFA loyalists attacked the Hill to lobby their members of Congress for the myriad of issues that are important to IFA and its members, predominantly:
· Capital Access
· Card Check
· Health Care

As for me, I broke ranks and instead of joining the rest of the Georgia gang to visit our Peach State elected officials, I spent my time seeking out those Members of Congress and staff that can make the greatest difference with reference to the passage of another issue that IFA has signed on to, one that is near and dear to all of us at RetroTax. I am referring to HR 1677, HR 3500 and S 1222, three bills that are focused upon the extension and expansion of the legislation governing the Federal Empowerment Zones and Renewal Communities and tax credits available to businesses that send resident employees to work in those zones. My time on the Hill was very productive and I am confident that we will prevail in the extension of these benefits.

And, I think other IFA member’s time was productive, too, as there were easily 450 in attendance, a true reflection of the times and how important our collective voices are on the Hill, in these challenging times.

This week, the franchising fun continues, as I will be Networking, networking, networking at the Franchise Update Leadership Conference in Chicago – STARTING TODAY.

I am looking forward to robust conversations with franchisors that can benefit from RetroTax services, to learning as much as possible from my peers and as always, to giving back as much as I can, to those that can benefit from hearing from me. I’m really looking forward to participating in the “pre-conference, CEO Summit again this year. As was the case last year, it is facilitated by the very able Linda Burzynski and is a mindshare session for CEOs and Presidents only. This interactive program is all about "Exceeding Today's Stress Tests for Franchise Growth". How to continue to grow franchise units, where to get the right capital, what your org. chart should look like, how to craft salary and incentive programs and issues like that.

As for the panel that I am speaking on this year, our topic is: Lead Generation Track -- Where Can I Find More Qualified Prospects in this Economy? I join the very capable Paul Mangiamele, President/CEO, Salsarita's Fresh Cantina and Kevin Drudge, Vice President of Franchise Development at Valpak for this session.

Information shared at events like the IFA Public Affairs Conference and Franchise Update’s conference in Chicago this week are validating my belief that the recession has hit bottom, but that there will be a long slog to recovery. It could take years to get there, but barring any unforeseen events, I don’t think that things are geared to get any worse than that which we have already experienced.

If you are at Update – be sure to connect with me (best way if you want to schedule a meeting is by emailing me at stan.friedman@retrotax.com). Can’t wait to see all of you!

Economic Improvement Continues – My Economic Predictions

For those of you that read my blog regularly, you know that I remain optimistic about the future, despite these challenging times that we’re all living through. It’s been a while though since I last commented on how I see things, so an update seemed in order. While on some fronts I believe that economic conditions surrounding the recession may finally be close to bottoming out, I’m still a bit concerned about the potential for another meltdown in real estate. This one though, on the commercial front. With so many business failures recorded during the first half of the year, there is the potential for a commercial crisis, stemming from landlords unable to meet their mortgage commitments on unoccupied retail and office spaces.

Needless to say, when it arrives, economic recovery will be good for all businesses, franchised or otherwise. I think though, that it will take a bit of time for demand to catch back up with supply on the real estate side. Overall, as a business model, I believe that franchising would have weathered this storm with far less stress, but for the perfect storm caused by the simultaneous impact of the recession and credit freeze. More than anything, it was the latter that has gummed up the works for franchising, keeping displaced employees from becoming aspiring new entrepreneurs.

Through all of this, IFA members should all be extremely proud of their membership in the International Franchise Association. Now, more than ever, the IFA, it’s Board of Directors, its Government Relations Team, and members on all fronts, franchisors, franchisees and suppliers have made their voices heard at the White House, on Capitol Hill, at the Federal Reserve and the U.S. Treasury.

Don’t miss your chance to do the same by voicing your concern to your elected officials at http://www.franchisingvotes.com/ and by attending the IFA’s fall Public Affairs Conference on Capitol Hill in mid September. More about that opportunity to meet with your elected officials can be found at http://www.franchise.org/publicaffairs.aspx. Each of these efforts support the loosening of the purse strings so that banks again begin lending to existing and/or soon-to-be franchisees. That will provide the best assurance of sustainable growth for our economy and the creation of new jobs and businesses on Main Streets across America. In addition to the obvious value propositions provided by the IFA, like education and networking, in my opinion, there is nothing more powerful than the voice it provides in terms of political action.

As for the future – or the end of this economic drought -- I wish I could read those tea leaves and see through the haze. I do think though, that what happens (or hopefully doesn’t,) between now and summer recess on Capitol Hill, will speak volumes to where we can expect things go from here.

As the old saying in TV news goes, “film at 11.”

Update on The Recession Friendly Franchise – RetroTax

Amazing how fast this year is zipping by. With each and every meeting that we take with a prospective franchisee or business client, we are creating more and greater opportunities for the growth of our company. Right now I am at our processing center in Indianapolis, overseeing the training of our newest franchisees, RetroTax No. 6 (more to come on these “high profile” guys in an upcoming blog).

Our business won’t slow either. By year’s end I expect to have at least six more franchisees trained and operating. Being that we are a boutique type concept, this will be a tremendous measure of success for our young company. RetroTax was never contemplated to be an offering that would put out dozens or hundreds of franchise units in any given year. Six more by year end would have us at a total of 12, in less than two years. That is a number that I will be very proud of. Actually, for me the real measure of success comes from the numbers that the franchisees post, (sales and margin) not the number of franchises that we award.

For certain, times like these are troubling, but things around here are good. That said, this economic climate can be humbling. At this stage of our growth and development, our biggest challenge as a franchise concept and company, is deciding how, when and where to deploy our assets, both current and future. As we grow, we will continue to make enhancements and additions to our infrastructure. Our plan is to plow ahead aggressively with our development strategy, despite the fact that the world around us is still locked in the grips of recession. We can ill afford to sit around and wait for an upturn in the economy, before upgrading systems, technology and human resources. One such major addition is the introduction of a new position on our. org chart. RetroTax now proudly boasts the addition of a Director of State and Local Tax. That position has been filled by a very talented “recovering attorney” named Carol Stephan. Carol is an accomplished professional in the field of State and Local tax and we are extremely proud to have her on our team. Along with Carol, our recently inked alliance partnership with the Ryan Company brings a whole new level of services and programs for our franchisees to offer and for us to administer.

So, challenges like recession do breed opportunity. We face no shortage of interested parties to talk with, regarding our core services and our franchise offerings. When times are good, people like what we do, because we save them money. In times like these, people LOVE what we do and are interested in learning how they too, can become part of the RetroTax team.

More updates to come.

Together for Recovery Provides Path for Economic Resolution

A few weeks ago, I wrote about an organization that I have recently been introduced to and for whom I have subsequently committed to work tirelessly. It is called the Business Civic Leadership Center. (BCLC) is an arm of the U. S. Chamber of Commerce. Its mission is to advance the positive role of business in society. As such, (BCLC) and the U.S. Chamber work with leaders from business, government, and non-governmental organizations to address and act on shared goals.

Given the depth of the current recession and credit freeze that our nation has been feeling the pains of, since at least Q4 of 2008, one such goal has been to find a way for all of those served by BCLC to weather this storm. In early May, 2009, (BCLC) and the U.S. Chamber actively engaged the business community, government, and nonprofit organizations to help America get back on its feet. It did so during a Rally for Recovery, at its annual National Conference on Corporate Community Investment in Chicago.

Subsequently, (BCLC) launched: http://www.togetherforrecovery.org/ At this portal, business owners, non-profits, individuals will find a one-stop-shop for information and guidance regarding economic recovery. BCLC and the Chamber has assembled the largest collection of examples on how the business community is part of the solution to economic recovery. If your company is doing something to help blunt this recession but is not yet listed, please tell (BCLC) what you are doing, so that they may update the site and share this with their subscribers.

Personally, I wish to thank Katie Loovis, Director of Business and Society at the (BCLC) and Stephan Jordan, Senior VP of the (BCLC) for inviting my participation in the video that is found at http://www.togetherforrecovery.org/ (BCLC) and the U.S. Chamber are committed to ensuring that that American businesses thrive, and that those of us on Main Streets across America emerge as victors, not victims of these trying times. My sincere thanks to each and every member of their team, for all that they do. Let me encourage you too, to become engaged and involved in the work of this organization.

ATLFA Meets This Week: If In Atlanta, Don’t Miss It

I would like to personally invite all of the RetroFacts readers to the Atlanta Franchise Alliance’s May meeting, 5-7 p.m. tomorrow (Thursday, May 21, 2009) at the Paper Mill Grill, 305 Village Parkway, in Marietta, GA.

The meeting is a great networking event and an opportunity to connect with your franchise colleagues from Atlanta.

To understand the value of the ATLFA, one must first understand our growth, as throughout the last year it has been two-pronged. First and foremost, we continue seeing many first-timers at our networking events, which is always a great indicator of growth. Secondly, we are growing internally, with the addition of four new members of our board in 2009. They are: Nick Powills, CEO, No Limit Media Consulting, Rich Greenstein, Partner, DLA, Piper, Greg Cory, CEO, eMaximation and David Asarnow, President, CEO at CLIX Portrait Studios.

This week, without a doubt, the economy and its impact on our businesses and ability to obtain credit and financing for new and existing franchisees will be top-of-mind. That remains the hot topic everywhere.

Our topical meetings set the tone for great interactions. Anyone with an interest in keeping up to date on what’s going on around them in franchising should clear the calendar for tomorrow night. Whether you are a franchisee, franchisor or a supplier, this is where to connect with all of those on the cutting edge of the franchise business model locally.

Administration of Tax Credits Takes Time; How RetroTax Makes It Easier

When I am asked, “how much time and energy goes into administering a tax credit?” I return that question with this one: “How much time goes into closing a mortgage loan?” Of course, in either case, the answer depends on who is doing the work. Even for those that sell a house on their own, minus the help of a professional realtor, who knows of anyone that actually gets a mortgage loan closed the same way? Answer… NONE! The reason is that even if you do navigate your way through the real estate process and transaction alone, virtually NOBODY closes the loan by themselves, without the help of professionals. Same can be said for the process of administering tax credits and incentives. It is onerous. The good news though, is that when you retain us to do the heavy lifting, WE do the work, and YOU get the credit.

The timeline from when we are retained, until the time when credits are redeemed, depends on whether we are administering demographic or geographic credits. The process and client involvement is a bit different too, depending upon which types of credits we are administering.

Today’s economic climate has definitely created something of a “stimulus” for us as a business model. What we do makes sense in ANY economy, but it becomes far more compelling in times like these. With so many business owners struggling to make ends meet and wrestling with issues like tightening credit to keep their boats afloat, payroll can become something of a challenge. In reality, sometimes the credits that we administer, can make the difference between keeping, vs. laying off personnel.

As our business continues to grow, perhaps RetroTax itself is providing a stimulus for the economy. From my vantage point it’s really impossible though to know how the money that we save a company is allocated. Is it saved, or is it spent? I just don’t know. What I DO know is that because of us, many business owners at least have the option of deciding that for themselves, as opposed to scrambling to make ends meet. They have the choice. They have options… and options, like credits are GOOD things!

Two Weeks Until Tax Day – For Many Businesses Though, It’s Still Not Too Late to Benefit From Tax Credits

While the media is certainly hot on the topic of taxes as we approach April 15th, the topic of “tax credits” is one that our clients talk with us about all year long. In fact, our rush began around January 1 and ran through the deadline for the first quarterly filing date for corporations, which was March 15.

When it comes to business vs. individual tax returns, the biggest myth of all, is that April 15 is tax day. While true for individuals, corporations are on quarterly cycles, with March 15 ending the busiest time of all, for those in the corporate tax world. Many companies have other quarterly filing dates, but March 15 is the grand dad of them all. Can you claim tax credits year round? Certainly, if you are eligible for geographic, wage based credits. (FEZ/RC) But, that said, retroactivity only extends three years from the open tax year. So, once 2008 returns are filed, we would only be able to look back as far as 2006 for any credits that might have been available in those tax years. If the 2008 return has yet to be filed, we could go back as far as 2005, retroactively.

A year from now, tax credits will change, but it’s still too soon to tell what impact the stimulus package will have on jobs creation. If however, those shovel-ready jobs begin gaining traction, there will be many opportunities to generate credits, as a result of the jobs that will be created. More immediately though, there are two new categories for demographic credits (WOTC) that were born out of the stimulus bill and these WILL make a big difference. These categories are: unemployed veterans and disconnected youth. In general, an employer can earn from $2,400-$9,000 in tax credits for hiring a qualified unemployed veteran or disconnected youth who begins work for the employer during 2009 or 2010.

An unemployed veteran is any veteran who is certified as having been discharged from active duty at any time during the 5-year period ending on the hiring date; and being in receipt of unemployment compensation for not less than 4 weeks during the 1-year period ending on the hiring date.

A disconnected youth is any individual who is certified as 16 – 24 years old, not regularly attending any secondary, technical, or post-secondary school during the 6-month period preceding the hiring.

The bottom line is many businesses have tax credits available, but never claim them. That is why our business is so attractive to both potential clients and franchisees as well. Our tax credit administration process is second to none. While we cannot predict future tax credit trends, we definitely know how to maximize their potential, once we identify them and let our clients know that they are available.

Atlanta-Franchisor Focused on Customer Service In Tough Times

Last week I was treated to a multi-tiered experience at an Atlanta-based franchisor’s “company store.” While this may seem to stray a bit from those things that I usually write about, I think that this experience is definitely worth sharing. Let me preface by telling you that the focus of this post is not so much about the retail experience itself, (which was remarkable) but more about the culture that I was exposed to, on a number of fronts. The concept is called Clix Portrait Studios and it’s headed by CEO, David Asarnow.

This all started with my need to update my publicity headshots. When I saw David at the IFA Convention, I mentioned that to him and he suggested that I come to Clix. I did and I not only came away with some outstanding composites, but add to that, a dose of franchising at its very best.

Because I went to their “company store” for my session, the studio that I visited also serves as the Clix Training Center. So all of that said, let me set the stage. I arrived for my 4 p.m. appointment and stepped into the usual mix of chaos one might expect to find at that hour of the day at a retail portrait studio: Families with babies and high energy kids, some well behaved, others not. On this day, though, add to the mix new franchisees in training from Arizona, along with a new member of the corporate team, also in training. So, I stepped back and asked myself, do I really want to do this or should I come back another day? I decided to stick it out and am I glad that I did.

For years, be it in food or any other franchising concept, for that matter, I have always professed that a franchisor’s single greatest strength, resource or assets, are his people. I know that if it’s a food concept, your recipes are important and that no matter what, there’s always your “trade secret” proprietary stuff. Bar none though, in my mind, when you’ve got the right people piece in place, you’ve got a cultural advantage that no competitor can steal. That’s what I experienced at Clix. There was one single, common denominator present that was shared by the experienced, technical help, as well as the newbies in training (staff and franchisees).

There was an absolute alignment of one thing first and foremost… the customer’s experience.

Whether it was having the patience to engage a screaming five year old and replace her tears with a smile, or go back and reset some poses, because they just didn’t hit the high water mark that was desired, every single thing that I could see in this corporate culture screamed “customer-centric.”

You know, living up to expectations used to be the gold standard, but anymore, that’s simply not enough. In fact, in today’s world, that’s no longer even point of entry. Exceeding customer expectations is the new starting line and from there, treating your customer to a WOW experience is where the rubber really meets the road.

It’s no different at RetroTax then it is at Clix or anyplace that subscribes to principle centered leadership. It all starts at the top, with leadership by example. Next, put the right people in management positions and empower them to deliver upon their areas of responsibility. Then, select teammates and franchisees who share the vision, values and ethics of the culture they are joining. Sounds easy, doesn't it? But it’s not, or trust me, everyone would be doing it.

Franchise Update Story Captures Urban Franchise Development

In the first Franchise Update issue of 2009, I had the honor of being included in Eddy Goldberg’s story: The New ROI: Return on Inclusion, Franchisors Seek Green Pastures in Urban Concrete. In addition to my quotes throughout the article, http://www.franchise-update.com/, I wanted to share with you a few important passages.

Stan Friedman has for the past two years, chairedf the IFA’s MinorityFran program, launched in February 2006 as part of the Diversity Institute’s efforts to 1) build awareness of franchising within minority communities and 2) increase the number of minority franchisees, franchisors, suppliers, and employees.

“Franchisors are missing the boat if they don’t look at those under-served markets as golden opportunities to create revenues for their business, and at the same time serve the community. There’s a compelling case to be made for coming back to inner cities and to under-served consumers,” says Friedman, who helped lead the Urban Expansion Initiative for Blimpie International in 1998 as vice president of global development.

“There still will be challenges, but real estate is less expensive, the pool of people for jobs greater, and federal wage and tax credits and incentives are available,” says Friedman. “All of the sudden your unit economics and startup costs are much better before you even open the door, compared with suburbia.”

Too many times Murphy’s Law intervenes when franchisees are trying to get new locations opened. Be it a permitting problem, a construction delay or the late delivery of some vital piece of equipment, it seems that there’s always something pushing the projected opening date back. Depending on the timelines and financial strength of the franchisee, this can really cause some painful crimps in one’s style and in many cases put the franchisee under water. A much happier pre-opening scenario might look like this: A franchisee’s new unit is under construction within the boundaries of a Federal Empowerment Zone or Renewal Community. He is at the point where he has begun hiring and because most everyone that will work at his store also lives in the neighborhood, the creation of these local jobs makes him eligible for a personal tax credit of up to $3,000 per year, for each qualifying employee he has hired. With 10-12 locals on his payroll, he could be looking at as much as $36,000 in future tax credits.

“Why aren’t franchisors city bound?” Goldberg writes, “Beyond the downside risks most often cited by reluctant franchisors – security and staffing issues – Friedman says, ‘Maybe it’s just something franchisors haven’t spent enough time thinking through.’”

Many franchisors have not even thought about this process because in many cases, it’s too far outside their box. Take this to the bank… no more can franchisors be reactive in their approach to development and depend on yesteryear’s methods of recruiting new blood to their brands. There are some very viable opportunities for inner city development that can put new faces on old neighborhoods, create jobs that are both wanted and needed and serve consumer needs without their need to travel down the line on the bus to find the services they wished were available to them, a bit closer to home.

In terms of social good, says Friedman, franchising in under-served urban markets 1) will change the landscapes of central cities; 2) provide residents with access to needed goods and services; 3) provide residents with access to needed goods and services; 3) create entrepreneurs in the community; and 4) create jobs for people who live there.

“If you’re serious about your commitment, there are resources available through the IFA to help you plot your course and bring your brand into markets that are under-served, and reach out not only to consumers but to potential franchisees as well,” says Friedman. In the past, he says, it might have been more difficult for a franchisor to make a go of it in a diverse inner city market on their own.

Tax credits and incentives should certainly be considered when considering site selection in the inner city. If a proactive approach to candidate selection makes more sense than just reactively speaking to anyone that wants to talk with you, so does the proactive approach to site selection, as well.

MinorityFran, says Friedman, seeks “to create the playbook and glean the best practices” of franchisors succeeding in expanding into cities, and share that intellectual capital with those who want to try it. That involves relationships with many groups nationwide, including SCORE, local banks, La Raza, the National Urban League, and what he calls “an aggressive outreach initiative” through the U.S. Conference of Mayors.

RetroTax is a proud supporter of the IFA MinorityFran initiative and I am proud to be the Immediate Past Chairman of the IFA Minorities in Franchising Committee and First Vice Chair and a founding member of IFA’s Diversity Institute.

Finally, in the article I talked about National Diversity Solutions (NDS), a Lexington, Ky., based company that works with franchisors and large multi-unit franchisees to help them rework the fabric of their supplier channel to reduce costs and introduce diversity. The NDS mission is a no-brainer. Just as MinorityFran has aspired to make the business case for diversity and inclusion, such is so with NDS as well. Their mission is to simplify supply chain diversification and economic inclusion while reducing costs, increasing service levels and promoting a company's commitment throughout the minority community.

At RetroTax we are in the business of identifying and administering wage-based tax credits for businesses that either don’t even know that these economic incentives exist, or who don’t have the time and resources to administer them correctly, even if they did. Additionally, we are looking for franchise affiliations in each of the markets where such credits and incentives exist. What could be better than finding a minority franchisee to service local businesses in his/her local community and build a business serving neighboring businesses, within the community.