The convention also features an awards ceremony, honoring those who are deemed to have contributed significantly to the international franchise community, along with a tribute to the lifelong contribution of Russell J. Frith, former member, treasurer and chairman of the IFA .

The convention is a great networking opportunity, and attendees at this year’s convention also have the chance to meet with representatives from many franchises available across the US including such recognizable brands as 7-Eleven Ltd., Ben & Jerry’s, Build-A-Bear Workshop, ComForcare Senior Services, McDonald’s, Subway and NexCen Brands who are responsible for some of the most successful food franchises including Great American Cookies and Maggie’s Moos IceCream. Some of these franchises ranked very high in our recent Top 100 Global Franchises, and have a lot to offer in terms of advice to new and growing franchises. The convention should prove a wonderful opportunity for those franchises looking to expand their franchise network across the US.

Franchise Direct representatives Jill Ptacek and Chaz Williams along with Marie Andrée Maurice are currently attending the convention so we’ll be sure to provide you with an update of all that went on when they return…and recover!

To find out more about the event, visit the IFA’s website, or to find out more about any upcoming franchise expos and events, why not visit our franchise expo and event calendar.

Before we can effectively discuss compensation for account placement, we need to discuss the qualities of the account market. Have you determined the type of company you will be selling to? What type of people are the decision-makers in these accounts, what are their purchasing habits, when do they buy? Create a sales strategy and implement that strategy in a sales program that targets the decision-maker’s habits.

Remember the law of cause and effect. For example, if your desired decision-makers are concerned only about price, your concern should be profitability. If you can obtain placement by lowering the prices of your products – but your company cannot make a profit – there is no reason to place the account, because no profits means no cash flow, which means the business isn’t sustainable. You can grow your business by lowering prices. If your goal is to sell 1 million units and you achieve this goal by lowering prices – but you lose $1 per unit – you are now $1 million in debt. Not a great business model to follow.

Find a business mentor

The vending machine industry is an established industry. An operator that has been in business for 5 or more years has seen what does – and doesn’t – work. Don’t fool yourself into believing that you are innovative and that your new system is going to take the market by storm. Very few ideas are new and somewhere (probably closer than you think) someone has tried to implement it that same idea. Keep thinking, but find an experienced operator with whom to discuss the ideas. You might be surprised by the answers you receive.

I personally did just this with an idea that I felt would give me a huge advantage in the vending machine business. I discussed it with my equipment supplier, who informed me that the concept had been tried by 3 other companies that he knew of – and that all 3 failed for the same reason (a possibility that hadn’t even occurred to me). He saved me thousands of dollars and hundreds of man hours for 20 minutes of conversation; it was one of the best returns on investment I have ever made.

But what about paying for placement?

Paying to place machines is a type of sales program and is a subset of your marketing effort. What are you trying to achieve with this type of sales program? What are the implications of your actions, and why are you doing this action? What are your sales and marketing alternatives? What will this program cost? Will it be profitable? What type of vending accounts will it generate? How do successful operators become successful?

Experience has taught me several lessons about this type of program. There are particular industries and companies where this is a common practice. Shortly after a sales discussion is started, the decision-maker asks what’s in it for him. I have found that these particular locations change vending suppliers frequently, and some companies have no ability to have vending services unless they find new operators.

The law of cause and effect works here, too. If you replace a qualified vending machine operator because you offer the decision-maker a cash bonus for changing, you set a precedent allowing that decision-maker to change again when a better offer comes along. Unless you have a signed contract, you will not recoup your initial investment.

I know one vending machine operator who lost $1000 and never placed the equipment. The decision-maker took the $1000 (cash), told the vending machine operator that he was getting the account, and retired the next day without telling his successor that the company was changing vending operators. The vending machine operator was truly in a no-win situation: The unscrupulous decision-maker had stolen his money and he had no recourse.

While this is an extreme scenario, offering cash incentives to replace vending machine operators gives the industry, as a whole, a bad name. It also creates a level of expectation in customers that implies it is normal.

Concentrate, instead, on good service, quality products, and an enjoyable experience. Those are the best ways I know to ensure low account turnover, higher profitability higher and stable cash flow.

About the Author:

Joe Nichols is the second-generation owner of A & M Vending Machine Sales, a family owned and operated business, for over 40 years. A & M ships new vending machines and used vending machines all around the world.

It saddens one to scour the internet and read about some of the tensions between franchisors and franchisees that have emerged in certain operations. Many of these differences are avoidable. There is certainly an impetus (with a financial benefit) upon the franchisor to keep abreast of how the franchisees are faring.

Linda Burzynski, CFE with the Franchise CEO, has just penned an illuminating article for Franchising.com spelling out the importance of the ‘validation’ system for franchisors. For Linda, it’s essential for a franchisor to open the doors of their organization wide open (and provide access to franchisees) when a new candidate expresses interest.

She provides the four following reasons why validation works:

1. Feedback from candidates or a broker concerning franchisee validation is golden to you.
2. As a leader, it’s key to emphasize that building the brand by adding units is a winning situation for the entire system.
3. Encourage your development team to prepare franchisees and the candidates for the validation process.
4. Continue to be the number-one fan of your franchise development team.

Another thing to consider is hiring consultants to interview franchisees. While they say the numbers don’t lie, franchisors must really go the extra mile to understand how their franchisees are coping with this current market. An open franchise organization is often a thriving one.

On the battlefield, you work individually with a mission in mind. But you exist within a hierarchy with expertise in handling similar situations. You are also surrounded by a strong support network.

We’ve been supporting veterans in franchising for nearly as long as we’ve been blogging, and the new issue of QSR magazine expresses its own enthusiasm with the trend. It profiles the veteran franchise programs at restaurants like Little Caesars, Steak-Out and Figaro’s Pizza.

What better person to run a franchised business than an individual who has just come through the rigorous training and discipline of the military,” says Ron Berger, CEO of Figaro’s Italian Pizza Inc.

The piece is particularly bullish on the prospects of veterans in the restaurant industry. But if you’re a veteran looking for a different field, you’ll definitely some interested franchisors. We’d like to especially single out Maid Brigade, who recently joined the Franchise Direct family. They have one of the most progressive networks for military veterans and we look forward to seeing what future strategies for increasing veteran enrollment they come up with.

But if you are a veteran interested in food franchising, perhaps our new Food Franchise report would be of interest to you.

Jobs himself has assumed a nearly-god like status among techies and business gurus in the last decade.Interestingly, there are many details in Jobs’s own biography that entrepreneurs can take inspiration from. It is particularly his early life, when Jobs was a young entrepreneur looking to launch a fledgling computer company.

Reading through the pre-business life of Jobs, one doesn’t get the image of a fledgling corporate guru. Instead, one sees Jobs as a bit of a hippie. He did two years at Reed College, a small liberal arts college in Oregon, before dropping out. Then he went to India satisfy his curiosity about eastern religion. It was only when he returned to America and started a computer club called Homebrew Computer Club with Steve Wozniak that wheels for Apple started rolling.

After launching their start-up called Apple Computer Company selling circuit boards Jobs and Wozniak became fascinated by the possibility of creating and marketing personal computers. The start-up money they raised was their own, but their idea was golden, as we know now. Personal computing was an untapped niche in computing and Apple’s vision of its potentials has radically changed the way people live their lives now.

It’s important for entrepreneurs to keep in mind that even Apple was once only an idea. Apple’s technological advances may be what define it, but it took a man like Jobs who had vision and belief to make the company what it is. Everyone with a new business concept should look to a man like Jobs, who has no college degree, and find inspiration.

He advised Stanford grads in 2005 to “stay hungry and stay foolish”. And we think that remains salient advice for those looking to launch their own business at the current time.

Leading the way with this movement is the diner franchise Huddle House. Late last week, Reuters released a fascinating interview with Huddle House vice president of development Thomas Flaherty, who had worked at Papa’s John and is now leading the franchising charge at Huddle House. The diner franchise is so driven to broaden their franchise network, they have cut franchisee fees by 80% and waived royalties for 5 months.

“We have a lot of folks that are contemplating retiring or have retired from a corporate job. They’re looking to invest. We also get existing restaurateurs from other concepts,” Flaherty said.

Huddle House is looking to expand rapidly by adding 30 new units this year. This comes on the back of the 20 units they opened last year. For a company seeking profits via growth, expanded franchising is a must. Flaherty doesn’t mind taking a bit of a hit on the franchise fee because it allows him to intensify his envisioned roll-out. Most interestingly, he sees this as a most ideal time to launch franchise expansion.

“There’s probably not been in modern history a better time to get land than now; so many vacant spaces across the country.”

That’s the kind of optimism we like to hear. We hope other franchisors follow suit to get those hungry entrepreneurs into the franchising system as quickly as possible.

Medill Reports has an insightful profile of SBA loans, describing the boost that some of them have gotten from President Obama’s stimulus plan. It examines Tony Rackstraw, president of SkyTech, a Chicago-based small security business. Rackstraw needed $300,000 of capital and found it via the SBA.

Marianne Markowitz, regional administrator of the U.S. Small Business Administration cast a generally positive look at the industry.

“Now that the bigger banks are committing more, we are in good shape going into 2010,” she added.

Meanwhile, speaking strictly about franchising, the Kansas City Star has an interesting take on the industry. Their view of franchising in the Midwest is that franchising remains an outstanding business concept, but hurdles still remain for achieving funding.

The piece profiles Anna Gepson, who just bought an Aussie Pet Mobile franchise.

Aussie Pet Mobile franchise in 2006. Gepson worked with an accountant and an attorney to set up a self-directed 401(k).

The franchise fee, three months of marketing expenses, a van and equipment came to around $100,000 — which was a surprise to Gepson.

“I thought you had to have a million dollars in the bank to start a business,” she said.

The story reminds aspiring franchisees to keep in mind that every entrepreneur must pay a franchisee fee. But if you can get the funding you need, there’s a lot of different franchises to choose from.

Franchise Direct has just released the definitive study on food franchising. After conducting some exhaustive research, we are excited to announce the publication of six brand-new reports on various food franchise sectors. Add these to our reports on pizza, ice cream and coffee franchising that were released last year and we’re proud to say that Franchise Direct has now produced the internet’s most comprehensive and insightful examination of food franchising.

Here’s why this matters- when people think of franchising, they think of food. Franchising has spread as a global economic concept thanks to the likes of Subway and Domino’s. Investors will always be excited by restaurants. Many people want to know how to how open a food franchise and how much it costs. We can now give you a snapshot of this whole diverse industry.

We have broken the industry into a number of sub-divisions and published brand-new studies on full service, fast food, fast casual, retail food, health food and take-out and delivery food franchises. These reports are based on the Franchise Disclosure Documents (FDD) of numerous franchises in each sector, plus some additional research.

These reports will give you all of the essential information you’ll need before investing in a food franchise. You’ll find up-to-date financial statistics on each sector, plus reporting on the rise of the health food restaurant and the enduring popularity of retail food distribution. There is also invaluable franchise-specific economic data taken from FDD’s that will tell you how many franchises are currently faring.

All entrepreneurs are told to do their homework before purchasing a franchise. Franchise Direct’s exclusive food reports take the hassle out of this research and make finding out about food franchising easier than ever before. There’s a lot of unique material here. Dig into these repots today.

Now, we’re all grateful to receive sound business advice, but today’s franchisees and small business owners are strapped for time. But what if you could pool a number of small business experts and get the one piece of advice that every entrepreneur needs to make profits this year?

Anita Campbell, founder of the Small Business Trends website has thankfully done exactly that in an article for the Open Forum website. There’s lots of insight here as she solicits everyone from an SEO expert to a software executive for wisdom. Of course, everyone offers quite different advice, but it’s refreshing to see small business advice distilled and focused as it here.

Ultimately, we really liked the advice that Campell herself offers at the end of the story;

“In 2010 develop and use an executive dashboard, with key metrics, so you can work ‘on’ your business instead of ‘in’ your business. Stepping back and examining your business through numbers will make you focus on problem areas, and find opportunities to improve. Some of the key metrics I am going to pay better attention to are: gross margin; customer acquisition (or in my case, reader acquisition) cost; cost of goods sold; and marketing expenses.”

Brown’s election means that there is one less Democrat in the Senate, which reduces the party’s ability to pass legislation without filibuster. With President Obama’s massive new health care plan facing a vote in the Senate, Brown’s election means that many strands of the bill will have to be renegotiated. The IFA thinks this is good news.

“Our message all along was to start over,” said David French, vice president of government affairs of the IFA, told Nation’s Restaurant News magazine.

“We believe the White House and congressional leadership have crafted a package that is profoundly unpopular and damaging to small businesses. But we see the Massachusetts result as an opportunity to finally get Congress’ attention.”

Now regardless of what side of the political aisle you fall on, it was obvious that this new health care bill was going to make operating a small business even harder than it is already. Perhaps the voters of Massachusetts have done franchisees a favor by electing Brown.

We’ll be following the developments with the health care bill in detail. Here’s hoping that a bill that better meets the interests of America’s small business owners reaches the President’s desk in the Oval Office.