Sometimes, they say, two franchises are better than one. Many franchises have discovered in the last few years that co-branded franchises can dramatically increase customer number and profits. No franchise can give everyone what they want, so why not team with other like-minded concepts?
Perhaps the best known co-branded franchise concept in the country is the YUM! Brands package of Taco Bell and KFC. YUM! helped pioneer the piggybacking franchise and brought it to national prominence. Co-branding was worth $2 billion to the business in 2002. It’s a franchise concept ideal for airports or highway rest-stops. Entrepreneur magazine has profiled the ups and downs of the movement in recent years.
While food franchises like Dunkin; Donuts and have struggled to introduce co-branding to their systems, co-branding remains an interesting strategy, especially outside of the food domain. Take, for instance, Seva salon, which has co-branded with Walmart in order to radically improve its global reach.
“Our customer is the Walmart customer, so co-branding to me has been huge,” Val Maniatis, Siva founder told Entrepreneur “We’re all about enhancing the one-stop shopping experience [that] Sam Walton built.” With the help of Walmart, Siva has opened 25 unites in 8 states and its aspriring to double that figure by the end of the year.
The success of co-branding rests upon on finding an ideal partner for your business, but if you can find one, your franchise can reach all kinds of new markets.
Financing is such a major issue for prospective franchsiees and entrepreneurs that we often go out of our way on this blog to promote innovative new funding programs. Of all the exciting funding programs to come online in the internet age, none may be as interesting as Boefly.
Boefly aims to revolutionize the financing marketplace and we can see it’s having a great impact already. As their website quite directly explains: “BoeFly revolutionizes how deals get done by seamlessly connecting all parties, including lenders, borrowers, franchisors, investors, buyers and sellers to a potential transaction and facilitating the efficient completion of these transactions. At the heart of BoeFly is a loan exchange that efficiently connects small business owners with more than 2,000 business lenders.”
Think of it as a dating site for prospective franchisees and financing institutions. Boefly is perfect for the franchising community as it provides direct access to a range of lenders. For a subscription fee, aspiring entrepreneurs can make their pitch, creating a loan request form with the help of Boefly’s expert team. That form can then be assessed by lenders and institutions can decide if they’d like to fund the project.
This system allows entrepreneurs to cast their net out to a much wider body of lenders. Such is their success in helping franchising that they’ve partnered with the IFA to create a strategic alliance that will see both organizations worki to “jointly develop and conduct educational programs focused on credit access for franchise businesses”. For franchisees who are not having any luck with conventional routes of achieving lending, websites like Boefly may provide to be the future.
Some franchise sectors have major ties with seasonal developments. The fitness franchise industry, for example, relies solidly on a strong January, as people who’ve overindulged over Christmas or made New Year’s resolutions to exercise take on gym membership. Now there’s evidence emerging to prove that the annual spring clean is creating incredible opportunity for the cleaning franchise sector.
The Street, one of the best online business resources, had a very topical article on the subject of the link between spring cleaning and cleaning franchises recently. The article served to promote the industry and show that for people who are simply too strapped for time, cleaning franchises can step into the void and assist citizens as they do their cleaning.
The article especially highlights the work that the likes of Mr Handyman, College Hunks Hauling Junk, Fresh Coat Painters, Clean Air Lawn Care and Oxi Fresh Carpeting do. But as Mr. Handyman President Alex Roberts told The Street, the success of the sector is not just a seasonal development: this is an industry that’s hear to stay.
“People’s biggest investment are in their homes and the services we provide with repairs, maintenance and improvements are not going away anytime soon, nor can they be outsourced or replaced by technology,” he said.
We couldn’t agree more.
Projections for the franchise industry called for modest growth over the year and according to metrics provided by the IFA, it seems that franchising is on track for solid improvement over this year.
The IFA launched a very informative index - the Franchise Business Index - late last week that will provide those who follow the industry with a level of insight that is essentially unprecedented. According to the first posting of the index, franchising experienced a 0.3% increase in the last month and most excitingly, is at its highest point since mid-2008.
The index, according to the Washington Times, is devised from “employment figures from the U.S. Bureau of Labor Statistics, personal consumption expenditures from the Bureau of Economic Analysis, and small-businesses optimism and credit conditions from the National Federation of Independent Business.”
Not surprisingly, the IFA was very welcoming of the findings.
“For the first time, the franchising sector had economic information based on solid government data,” said Steven Caldeira.
Perhaps the most beneficial aspect of this index is the way it will allow franchisors to track overall industry progress at a month-in, month-out basis. If this metric is anything to go by, though, franchising is meeting, if not exceeding, its targets for 2012. We expect we’ll be hearing more exciting things about the growth of franchising via this index in the coming months.
The IFA’s presence was felt at a recent banking conference that featured over 1,000 leaders from America’s retail banking sector. Lead by president Steven A. Caldeira, the IFA made the case that franchising is a worthwhile investment. Lending is such a critical issue for the franchising community, which makes it critical that the IFA is getting this message across to the country’s top banking executives.
Caldeira was the main headliner from the franchising community at the event, which also featured a panel at the conference entitled “Engaging in Franchise Lending: Growing Bank Loans in 2012 Using a Proven Concept”. There’s an interesting blog post on the meet-up over on the IFA’s blog which provides some photos from the event as well as some discussion of what was achieved in Austin.
“While the credit crunch has eased somewhat, franchising needs significantly more capital to return to strong growth and job creation,” Caldeira told the conference. “We’re here to raise awareness about the advantages of franchising as a proven, scalable, lower-risk small business model, and the unique tools and turn-key solutions available to increase franchising lending and a healthy return on investment. Now is the time.”
The bottom line is crystal-clear: franchising is a safe and proven business model. Entrepreneurs are out there ready to start franchising. They just need funding from America’s lenders. The country as a whole benefits from franchising.