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.

Tax Credits and Tax Credit Administration Popular During Economic Struggle

These days, business owners are instantly excited by the prospect of tax credits being available to their business, as these credits and incentives can improve the bottom line – which is welcomed in any economic climate, but especially now.

The most popular tax credits that RetroTax administers are the empowerment zone and renewal community credits. The reason is that an eligible business owner can not only claim the credit for the open tax year, but can also reclaim, on a retroactive basis, taxes for as many as three years previous to that, for credits that could have been, but were not, claimed.

Once business owners discover that they do indeed have credits awaiting them, they also find out what it takes to claim these credits, is no walk in the park. Business owners cannot administer these credits on their own for the same reason that virtually nobody can close a home loan by themselves. The amount of knowledge, paper and detail makes it virtually impossible for even the most sophisticated businesses to do this on their own, especially when a company like RetroTax will do all the work for them, with no set up or consulting fees, strictly on a contingent fee basis.

Business owners are impressed by the fact that we only get paid if we produce results and therefore understand, that the results that we produce are the best possible.

Some business owners are skeptical when we tell them about the availability of these credits – however, typically anyone that employees people will, on average, find that there are some percentage of those on payroll that qualify for wage-based tax credits. In fact its usually no less than 10 – 15 percent of those that they employ. It really depends, though, on the type of business that they operate, and sometimes, where the business is located. In manufacturing and food service though, as just a couple of examples, these percentages are usually much higher.

More businesses are coming to RetroTax for tax credit administration in this economy. First, because they are hearing about what we do and are wanting to simply learn more. Once we educate business owners to the legitimacy of these opportunities, (as spelled out in IRS Publication 954), it is merely a function of getting the process underway. In any economy, I know of no one that wants to pay more than his fair share in taxes. In times like these though, when we tell a business owner that we can legally mitigate his tax burden, it’s music to his ears.

For more on our tax administration services, visit http://www.retrotax.com/

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.

IFA Convention Recap

Myself with: Dina Dwyer-Owens, CEO of The Dwyer Group, Chairwoman, IFA; Shawn Goldsmith, IFA Don DeBolt Scholarship winner; and Steve Greenbaum, CEO of PostNet and immediate past Chairman of the IFA. As talked about in previous posts, for the past 3 or 4 years, I have been very involved with DECA, an organization that among other things, prepares, mentors and trains high school and college students to become America’s next generation of entrepreneurs. Last spring I had the honor of presenting Shawn Goldsmith, of Oceanside, NY, the IFA’s Don DeBolt scholarship at DECA’s National Convention. IFA invited Shawn to our 49th Annual Convention in San Diego, to get a taste of franchising IFA style. Here, I am showing him around and introducing him to some of the best in the franchising business.

Brian Schnell, attorney for Faegre & Benson, and myself.

Me with: Michael Roman, CFE, Fuels Franchise Strategy Manager of Exxon Mobil Corporation; Shawn Goldsmith, IFA Don DeBolt Scholarship winner; and Fred DeLuca, Founder of Subway.

From my perspective, this year’s IFA Convention was amazing.

First, on a personal note, while I teetered on the edge of losing it toward the third day, I actually managed to keep my voice this year. My apologies to those who might have wished for the alternative… my thanks too, to those that didn’t encourage me to smoke “just one more” cigar at the bar each evening. No names need be mentioned, because you know who you are. (Ron Feldman)

This Convention was very powerful in what it delivered. Jim Bugg, Bill Clinton, and Cary Fiorina all delivered powerful keynotes that basically stated that the future of America is in the hands of small business. Certainly, there are situations and conditions that we can’t control, but if we keep our eye on the things that we can, we will emerge victorious. I believe that is true. Yes, we are living in some very scary times and no doubt, more changes lie ahead. How we manage what we can control though, can and will make a difference.

The economy was, of course, a hot topic at the Convention, for franchisors as well as franchisees. I guess we are each playing the same game on different playing fields. Our franchisees are charged with growing their businesses locally, just as we are with growing our brands globally. At the local level they must seize each and every opportunity to make the most of whatever twists or turns they are confronted with. No different than what most franchisors are confronted with, just that we play our game on a larger playing field. Otherwise, it’s very much the same for each of us.

But despite the bumpy economy, the Convention experience was excellent. For RetroTax, the Convention presented new opportunities for national accounts that we can service; three new prospective franchisees; and a tremendous amount of collective intelligence shared by and with my peers.

With that said, whether using it as a connector to new business leads or as an educational resource, an IFA membership is a good idea anytime, but COMPELLING in times like these. There is no other single event (the annual IFA Convention – 2010 in San Antonio) that can offer so much at one time, in one place across each and every discipline of our business model, to the benefit of everyone in franchising. Operations, Marketing, Franchise Development or Administration: Whether you’re a start-up or legacy brand, there was something for everyone at this Convention.

Besides the convention, there are other IFA events franchisors, franchisees and suppliers alike should attend. For instance, I will speak on behalf of the IFA Diversity Institute and Minority Fran initiative, at the upcoming IFE in Washington, DC, March 20-22, another good opportunity to connect, learn and thrive forward.

RetroTax Adds Third Franchisee in 2008 – Big Plans for 2009

Me (Stan Friedman) with our newest franchisee, Iraida Bottazzi. Iraida will represent us in Miami-Dade and Broward Counties.

The good times keep rolling, as we are proud to announce that our third franchisee is already rocking and rolling in Miami. Iraida Bottazzi will manage relationships with the Miami-Dade and Broward communities and she provides us with a perfect “fit” in South Florida. Iraida is a tireless, extraordinary networker, has limitless energy, and as a former school teacher, that can educate potential clients to the opportunity available for them to redeem the tax credits that we administer. What’s more, as a native of Puerto Rico, she is fluent in both English and Spanish, a real advantage in the South Florida market, where that is more a necessity, than a luxury.

Iraida’s territory is home to an extensive Federal Empowerment Zone which includes Miami, Homestead and extends into Broward County as well. While Broward offers no Geographic Zone opportunities, it is rich in service businesses and restaurants, rife with opportunities to administer demographic credits for the countless businesses there.

Iraida is the third to join our growing family of franchisees. Our first two franchisees in Atlanta and Cincinnati are both doing quite well. Kevin and Dennis in Atlanta are gaining lots of traction with work already in the door and a very full pipeline. Their fourth quarter prospecting efforts are really paying off in Q1 of 2009. In Cincinnati, Jim, barely out of training, has already landed his first account, which also resulted in a referral to yet another and he too, has a very full pipeline. It just doesn’t get much better than that.

For 2009, it looks like franchisees four, five and six are already on the horizon. Keep your eyes on Chicago, Milwaukee, Washington DC and San Antonio. These markets are all in my cross hairs, with Boston and Buffalo/Rochester not far behind. And our growth won’t stop there. What we look for in our prospective franchisees is someone with strong interpersonal skills, comfortable dealing with high net worth individuals, executives and business owners. Big ticket, longer cycle, intangible sales experience and/or a finance background could be a plus, but the ability to communicate at high levels is the requirement.

As job loss continues to be a by-product of our nation’s economic woes, I would imagine more mid to high-level executives will be turning toward franchising in the next six months. As a white collar, Monday-Friday type B2B concept, appealing to those types of skill sets, RetroTax looks like a perfect fit for many of those displaced executives.

Prospective Franchisees... Where are they Hiding?

At this week’s IFA Convention in San Diego, one hot topic will certainly be about selling franchises in a down economy. As soon as I hear anyone serving up “selling" advice, I’m on my way to a different session. “Sorry, you have it all wrong.”

Even in this economy, I am still not "selling," just continuing to meet those people who might be right for our concept – based on referrals from friends, existing clients, affiliates and alliance partners. As I have said in the past, networking and developing relationships has proven to be much more effective than selling.

Normalcy, whatever that was, must be thrown out the window in these trying economic times. I can’t rely on “typical” marketing measures to grow RetroTax, Instead, I rely on viral and guerrilla marketing at every level. I don’t use mass media, to speak of, but rather, spread the word one mouthpiece at a time, or via press opportunities as they present themselves.

Franchisors should ABSOLUTELY look outside the box in marketing their concepts in the immediate future. (at least for the duration of 2009 and quite likely beyond) Always know where you are and how to act accordingly. There may have once been a time when just being in the right place at the right time was enough to insure success. Those days, if they "ever" existed, are long gone. Now, you not only need to be in the right place at the right time, but you’ve got to also be aware that you’re there. Then, you’ve got to know what to do about it and have the wherewithal to respond accordingly.

The landscape has changed and along with it, the rules of engagement. Understanding such will help you succeed in these challenging times.

FRANCHISE DEVELOPMENT, Not just about the Sale… It’s more about the Relationship

Many business people boast of their unique approaches to the sale of their products or services. Not to sound trite, but in the world of franchise development, it should NEVER be about the sale, but rather, about the relationship between the parties. Personally, I have no interest in selling franchises. It’s a new world, a new era and at RetroTax, a concept that I co-founded, and whose day-to-day operations I direct as President, SELLING franchises is a non-starter. No, I am not parsing words, with reference to the difference between “awarding” vs. “selling” franchises. I’m just telling it like it is. To date, each of our franchisees have been personal referrals. That notwithstanding, if a prospective franchisee presents himself to us, but does not meet or exceed our baseline for shared vision, values and ethics, they’re out of here, on the first pass, despite the fact that they may have been referred. That is not just lip service either, it is fact. It is real, it has already happened and it will happen again, I’m sure.

As the IFA Convention approaches, (barely a week away, in warm San Diego) it is important for fellow franchise executives and suppliers too, for that matter, to examine their selling practices. Take stock of this fundamental statement: neither your customers nor potential franchisees want to be “sold.” Rather, each of your prospective clients, customers or franchisees, would prefer that you appeal to a deeper level of connection, communication and relationship between all parties to the potrential transaction as well as to your product or brand.

My own personal experience repeatedly demonstrates that it’s more about relationships. Some of these relationships were built months, years, even decades ago. While some of these didn't provide any quantitative value at the time that they were created, several are now front and center and are intrinsic to the growth and development of my company.

There is actually no better evidence of this than the relationship between my partner and me. It took us more than a dozen years of talking about it, prior to putting our program together and our case study is just the tip of the iceberg. Beyond us, I cite the following:

RetroTax Franchisee No. 1, Kevin is an 18+ year friend and peer, a consummate franchising professional.

RetroTax Franchisee No. 2, Jim was a personal referral from our CPA.

RetroTax Franchisee No. 3, Iraida yet another personal referral, came recommended from one of my most highly valued IFA peers.

Prospective franchisees No. 4, 5, and 6, were also introduced to me via personal relationships, from other IFA peers, one of which is actually the President of yet another franchise concept. To my point, it’s much more about the relationships in franchising, than about the sale.

When you attend the upcoming IFA Convention, think about the relationships that you make, renew or update with new, old and established peers and friends. All of these connections represent opportunities for you to seize the moment, every moment, every opportunity, both real and perceived, with each and every contact that you make or renew. As my partner Al Newcomb so often says, no meetings are bad meetings.” As the old saying goes, “Carpe Diem.” Seize the moment and don’t let any opportunities that are worthy of your consideration, pass you by.