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Three Big Franchise Stories of 2012

Every year, several newsworthy stories and trends occur in the franchise industry. Looking back at 2012, there are three trends that stand out from the year that was...

 

Mobile Technology Integration

The advancement and integration of technology into everyday life usually experiences shifts from year-to-year that make headlines. This year in franchising, mobile technology took yet another step forward.

Mobile Technology

 

Mobile technology has developed as a part of consumer activity for years through the increased availability of easily accessed mobile coupons, price comparisons, and product reviews. As time progresses, many franchises are using the latest portable media technologies to reach active consumers while emphasizing consumer-brand relationships.

 

One major lesson franchises have learned this year relates to the importance of personalization when reaching out to consumers through technology. According to franchising expert Paul Segreto, “franchisors should not take a rigid approach with respect to messaging and social involvement. New media is all about interaction and engagement, and as such, requires a ‘personal’ touch at the local level.”

 

It appears that franchises are getting the point and as a result are developing more sophisticated web pages, social media pages and smartphone apps. Franchises are increasing efforts to provide customers a portable experience that is customizable.

 

Consider Subway, for example. This year, the sandwich chain unveiled a newer version of its mobile app, which allows users to watch while their sandwiches are made in “real-time” as they select their favorite ingredients. The application also accommodates health-conscious Subway customers by giving them the ability to count the calories of each meal as they select ingredients.

 

Looking forward, mobile payment appears to be one of the next steps in the franchise-customer mobile relationship. In fact, some franchises are already experimenting with mobile payment programs at select locations.

 

Simplicity attracts consumers. The aim of mobile payment and other mobile efforts is to make the transaction process easier. The latest technology that accompanies mobile payment may also lead to enhanced interaction and relationship building between franchises and their customers.

 

Rebranding Efforts

In October an updated Wendy’s debuted to the public in the Detroit, Michigan area. The location features even more employees and a distinctive new look. The traditional exterior of the building has been replaced with floor-to-ceiling greenhouse windows for a sleeker appearance and inside the restaurant numerous updates include WiFi access, a flat-panel TV and lounge seating in front of a fireplace. The Detroit location is one of four designs as part of an experiment by the fast food chain with one or two new building styles to be chosen for use nationwide.

 

Wendy’s is not the only franchise business altering its image. Over the past year, several franchise systems—in particular a number of food franchises—completed or began efforts to update their image. All aspects of branding such as advertising logos and slogans, store design, menu composition, even specific ingredients in menu items have been examined to assess whether they align with the values and image that franchises aim to project to the world.

 

The stated reasons for rebranding efforts varied among franchises, although all had a common theme: maintain a powerful presence in an increasingly competitive marketplace. Some of the other franchises that completed or began rebrands this year include: Taco Bell, Arby’s, Krispy Kreme, Captain D.’s, Burger King and Sbarro.

 

Rebranding efforts are not always the focus, and in some cases, franchises are even more interested in expanding the success of their brand to increase profitability. Applebee’s demonstrated one way to accomplish this goal.

 

In Florida, some Applebee’s franchisees noticed a younger crowd hanging out towards the end of the night. The franchise caught on to the trend and began theme nights for their late-night consumer segment such as “White Parties”, Luau, Karaoke, and Girl’s Night. In mid-September, the franchise took the resulting concept national staying open for the after-hours crowd and turning the typically daytime casual restaurant into “Club Bee’s” starting at 10pm.

 

Athletes and Franchising

For several years franchisors have sought franchisees with attractive portfolios well-suited to franchise ownership. This has led to many rewarding franchise relationships with military veterans as well as special incentives and offers for this demographic population. In a similar manner, professional athletes are a sought after demographic often connecting with franchise brands.

 

Why is the experience of former pro athletes so attractive to franchisors? Being a professional athlete involves an extended demonstration of teamwork, leadership and self-discipline—all assets that greatly benefit franchisees and the industry as a whole.

 

To facilitate the linking of former pro athletes and franchises, the Professional Athlete Franchise Initiative (PAFI) was formed. Introduced by Michael Stone’s Coliseum Enterprises in the summer of 2010, the mission of the PAFI is to “advocate the value of the franchise industry to the professional athlete community while at the same time advocate the value of the athlete community to the franchising industry.” Stone himself is a former NFL player and knows firsthand the value of preparing for a second career.

 

So who are some well-known athletes that have joined the franchise industry? Here’s a list of some active and retired pro athletes who are notably linked to franchising ventures:

• Drew Brees, NFL (Jimmy John's)

• Ulysees “Junior” Bridgeman, NBA (Wendy’s and Chili’s)

• Jimmy Graham, NFL (Smoothie King)

• Earvin “Magic” Johnson, NBA (T.G.I. Friday’s and Burger King)

• Keyshawn Johnson, NFL (Panera Bread, Cold Stone Creamery)

• Bobby Labonte, NASCAR (Red Mango)

• Peyton Manning, NFL (Papa John’s)

• Jamal Mashburn, NBA (Papa John’s, Outback Steakhouse, Dunkin’ Donuts)

• Willie McGinest, NFL (WingStop, Swirlz Yogurt)

• Shaquille O’Neal, NBA (Auntie Anne's, Five Guys and others)

• Alex Roberts, NHL (Mr. Handyman, Molly Maid, 1-800-DryClean and ProTect Painters)

• Venus Williams, Tennis (Jamba Juice)

 

While they are being courted for their background, it’s important to note that opening a franchise is not necessarily a slam dunk for former pro athletes. Like all franchisees, the same hard work and business savvy is required to successfully build and maintain enduring franchise businesses.

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