sales & marketing
by joseph bisogno

Older minorities are substantially underserved by the Kansas City health-care system; frequently they are “out of sight, out of mind.” Their needs, however, continue to impact their families, employees and communities. Swope Ridge Geriatric Center at 59th Street and Swope Parkway is among the largest providers of health-care to the elderly minority community and has experienced for a number of years the bad effects of our defective arrangements for serving the needs of the residents, their families and the employees of this important institution.

The most recent Kansas City health levy was passed in 1989 to fulfill the city’s obligation to provide health care to the indigent, the poor and the needy. At that time the tax proceeds of the levy were used almost entirely for working-age adults and children; the elderly were an afterthought. The number of elderly has increased significantly since that time.

One definition of franchise is “the right to vote.” Anyone looking to become a first-time franchisee is exercising that right to vote by choosing which franchisor offers the best concept, the greatest support and the clearest communication. When a franchisee pays that first franchise fee, he is voting with his pocketbook, and, like any good voter, he must study the candidates carefully.

Not all franchisors are created equal—many may have a great concept but no more franchising experience than the novice franchisee. There are ways, however, for a potential franchisee to narrow the field.

Some of the best intelligence you can gather will come from a visit to the franchisor’s office. Is the franchisor focused on the concept or distracted by other enterprises? What is the franchise experience of key management personnel? Is there adequate support staff to assist you in the field? Is the organization set up for long-term growth? In particular, look for the franchisor’s expertise in:

• Marketing, advertising and public relations
• Real estate, site selection and construction
• Product development and research and development
• Accounting practices
• Operations and systems development

Next, talk to existing franchisees, especially multi-unit franchisees, about their experience with the franchisor. Are they satisfied with the training, both initial and ongoing? In what areas do they receive assistance? Have they reaped the rewards that they expected? Ask them about profits. Ask them about support. Most importantly, ask them if they would do it again.
Another all-important source of information is the Unified Franchise Offering Circular (UFOC). Look for it to be well-written and to include a thorough operations manual. Some other topics the UFOC should cover are:

• Franchisor’s staff
• Listing of past and current franchisees
• Training programs
• Fees the franchisee must pay for marketing, advertising, royalties, etc.
• Franchisor/franchisee obligations to one another
• Earnings claims
• Financial disclosure with audited statements
• Franchise agreement form
• Outline of approximate costs of opening a franchise
• Disclosure of pending legal issues franchisor may have with other franchisees

In particular, pay close attention to the area of royalties and advertising fees. Some franchisors develop concepts, then sit back and collect these fees without offering much in return. On the other hand, you need to beware of franchisors who charge only a royalty with no advertising fee. How will the concept grow if it’s not advertised?

Also beware of franchisors who try to rush you to sign on the dotted line. Know that the Federal Trade Commission requires a potential franchisee to have 10 business days to review the UFOC before he is allowed to sign a franchise agreement and pay the franchise fee.

Finally, the most important aspect of the franchisor/franchisee relationship is communication. Ask if the franchisor has established a franchisee committee to allow franchisees a voice in the system that they bought into. Franchisees can offer valuable feedback that will strengthen a franchise network.

When looking for a franchise, remember it is probably your life savings that will be buying this business. You as a franchisee can grow your business if you stay focused on your personal vision—owning your own company. You can own and operate a small business, or you can grow that small business into a multimillion-dollar corporation. It’s not unusual for franchisees who develop a solid business plan and stay focused on a five-, 10- or 20-year strategy to end up with companies employing hundreds or even thousands of people.

In the end, it takes the franchisor and franchisee working together to make a success. The franchisor must lead and build the system; the franchisee must execute and support the system. When you choose your franchisor, you choose your leader. Vote wisely, and you will do well.

Joe Bisogno is CEO and founder of Mr.Goodcents Subs and Pasta. He can be reached at 1.800.648.2368 or through www.mrgoodcents.com