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Donald Cranford

November 5, 2009

The IFA Turns 50

We’d like to take a moment to congratulate the IFA which turns 50 years old this year.

Those people who started the International Franchise Association a half a century ago would hardly recognize today’s business landscape, but still their organization continues to provide advocacy and guidance to franchised businesses around the country.

What began when Dunkin’ Donuts founder Bill Rosenberg brandished a 100 dollar bill from his wallet at a franchisor convention in Chicago back in 1959 is now a hugely mobile and influential organization, as the recent successful of lobbying of President Obama on small business reform shows.

The latest issue of Franchise Times magazine features a detailed story on the history of the IFA. For anyone with an interest in franchising, this is a must-read. Writer Nancy Weingartner takes a decade-by-decade look at the IFA’s evolution, discussing how it planted roots in Washington and began its education programs, and many other things.

Part of the IFA’s initial success was that it let franchisors of all stripes convene and discuss the in’s and out’s of operating a franchise business.

“Companies got together to share ideas,” said Jerry Darnell of Benetrends. “There is no place else to get this information.”

Franchisors weren’t afraid to share best practices because they weren’t sharing trade secrets with their competitors. Members were in a number of different industries and the information they were sharing had to do with business-format franchising, not with burgers or brake jobs.

And as for today? Well, the IFA remains more vital than ever. We particularly enjoyed how the story concluded.

IFA’s challenge is to make business-format franchising a priority in their members’ businesses. They’ve accomplished this in part through economic studies, education and lobbying for small business concerns.

And by selecting volunteers who are committed to the cause. The past chairs stay involved. “They don’t do their time and walk away,” IFA’s CEO Matt Shay said.

“Where IFA goes is where franchising goes,” stated Zeidman.

Here’s to 50 more years of success!


Donald Cranford

November 4, 2009

Successful international franchisors explain how to become a Top 100 Global Franchise

It is easier than ever to develop your franchise into a top global business, thanks to Franchise Direct. The Atlanta-based, world-leading franchise portal recently compiled its rankings of the Top 100 Global Franchises. After a number of insightful follow-up interviews with ranked franchisors, Franchise Direct can now shed some light on what takes to grow a business into a top global franchise.

As recent reporting in the Wall Street Journal shows, international development is now a profitable course for many franchises seeking new markets, as economies around the world have been somewhat slower to introduce the franchising model than the US. With its inaugural rankings of the Top 100 Global Franchises, Franchise Direct not only listed the best-performing global franchises, but it provided a blueprint to other franchises eyeing similar growth.

Interviews with franchisors with businesses on the Top 100 list showed that there is no one path to successful international expansion. Selling a master license is a common strategy, but by no means the only route, as Coffee News USA discovered.

“In those countries that are doing well, we will leave them alone. If we take back countries we will run them from here for awhile and then sell them once we have someone who can do Coffee News well there,” said Bill Buckley of Coffee News USA.

Other companies like PakMail have tailored a business model that can be easily reshaped into different foreign economies.

“We are open to further international expansion and prefer to establish master licensees outside of the U.S. The Pak Mail operating concept is pretty easy to adapt to foreign markets as evidenced by the success of our franchises in Mexico,” says PakMail’s Sandy Lasky.

There will be many cultural roadblocks for the franchisor to overcome when opening in a foreign market. “Knowing the culture, language and business processes, as well as ensuring successful product distribution,” are some of the problems that PuroClean encountered when it launched its Canadian operation. However, it found a solution that changed the way it did business in the country.

“By having a native Canadian manager running operations in Canada, PuroClean has been able to overcome typical obstacles faced when entering a foreign market,” said PuroClean’s Natalie Zupo.

Launching a franchise on a global level takes time and patience. But the rewards can be limitless, as the success of Franchise Direct’s Top 100 Franchises has shown.


Donald Cranford

November 3, 2009

Small Business Recovery Plan is Passed in the House

The House of Representatives passed the Small Business Financing and Investment Act – or the small business recovery plan - by an overwhelming majority of 389 yes votes to 32 no votes last night.

This is big news across the news wires today. This legislation will increase the amount of money the SBA can lend by $44billion. It also increases the guarantee rate on SBA-backed loans from 75% to 90%.

“This bill is about choices. It’s about better options for the small businesses that didn’t get a bailout,” said Nydia M. Velázquez, the chairman of the House Small Business Committee.

“Small businesses with tight profit margins don’t have the luxury of simply ‘tightening the belt.’ When money is short, they’re often forced to lay off workers. But with unemployment at 9.8 percent, we just can’t afford more losses. That’s why this bill delivers critical capital to new ventures.”

It’s unclear when the funding will be transferred to the SBA and the bill must also pass through the Senate.

The IFA has come in to support the measure. Let’s hope now that this bill breezes through the Senate and the funding gets into the hands of the people that need it most: those franchisees and entrepreneurs up and down America.


Donald Cranford

November 2, 2009

The State of the Small-Business Reform

So, about 10 days later, exactly what effect has President Obama’s statements on the small business sector had on stabilizing confidence among entrepreneurs?

The answer seems to be mixed. If you’ve been following developments over on the You’re The Boss blog run by the New York Times, you’ll know that success in passing the new small business laws are not guaranteed. Initially, it seemed that the President might have to struggle to get his plan through the House and Senate after disquiet from members of both parties.

Now much of the debate has turned to the perspective of Rep. Sam Graves, who is the ranking member on the House Small Business Committee. He had initially announced his disdain for President Obama’s plan. But in an interview with the NY Times, Karen Mills, the head of the SBA, described Graves as “extremely supportive”. Now Rep. Graves’s office has taken exception to this statement, but it is unclear exactly where he stands on the President’s plans. Rep. Graves has declared himself to be an ardent supporter of small business, so it will be interesting to see where he comes down on this legislation.

All of that said, no matter what roadblocks the Republicans throw up, the Democrats will have the votes to pass the bill and it seems that now that support is there for the plan. This is important because there are a number of lingering political issues that are eating into the confidence of small business owners.

The Wall Street Journal recently issued another report on the difficulties facing small business owners. It framed the story around three big political concerns of small business owners: the impending health care legislation, the looming expiration of Bush-era tax cuts and the possibility of green taxes.

With all of these issues looming, it is really time for consensus. The President’s small business plans have to come into effect, and they should only the beginning. For those who doubt the President’s commitment to franchising and small business, here he is again, talking up the importance of entrepreneurship to the American economy:


Donald Cranford

October 29, 2009

Bringing Green Businesses into the Mainstream

The greening of the American economy is underway. Up and down the country, we are seeing the gradual embrace of environmentally-friendly products and materials. What green entrepreneurs are waiting for is the moment when green consumerism reaches the mainstream. At the moment, many are hard at work trying to explode the myth that green products are simply a niche.

“The real question is ‘How does green equal better?’” says Joel Makower, executive editor of GreenBiz.com and author of Strategies for the Green Economy told Entrepreneur magazine recently. “That is, how does making the green choice become a no-brainer, because it’s just clearly the better choice. You buy the green car because it’s more fun to drive or a better deal. Until it’s about that, it’s going to be a niche audience.”

We are constantly trying to sketch out where the next big business opportunities will come from on this blog. While there is no denying the strength of the green sector, we are still far away from the day a driver selects a new electric automobile over a gas-guzzler because it provides better fuel efficiency. But the Entrepreneur story has great insight from the businesses that are driving green business into the mainstream.

“The challenge facing green-product companies going mainstream is how to motivate consumers to shop value and not simply price. The key is to define and present both the product and green value in one marketing message,” says David Mleczko, co-founder of Signature Green Marketing, in the piece.

The story identifies the cleaning sector as one of the biggest areas for green growth. Demand is growing for more ethical cleaning products. At Franchise Direct alone, we are seeing a huge upsurge in cleaners targeting the green sector. The story also makes a point of noting that Walmart is doing a lot to improve its carbon footprint and has even been publishing its own sustainability index. So the stars are definitely aligning for the green industry.

And probably more than other industry, green franchises make a lot of sense for entrepreneurs, as they offer a direct path to success, without the unpredictability of a start-up.


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