To Franchise or Not To Franchise: That is the Question!

Edible Arrangements (Photo credit: Chu❤)

On the contrary of what many people think, managing a franchise or franchising one’s business doesn’t have to be as difficult as one may perceive. In fact, according to IFA Franchise Business Economic Outlook (2011), there are over 780,000 business units franchised while employing around 8 million individuals in the United States alone, with the most franchises being in the quick service restaurant and personal service industries. As well, franchises boast revenues of over $739 billion in the United States, therefore running and managing a successful franchise can definitely be attainable for an aspiring entrepreneur. Obtaining a franchise(s) usually evolves in two ways for a person: Investing in someone else’s business or actually franchising one’s own business. By investing in an established brand, it eliminates a franchisee from having to build the particular brand from the ground up which can take anywhere from a few months to years depending on how popular and successful the brand is and how fast a particular product/service catches on in a trendy hungry society. The process of being a franchisee for a business such as McDonalds would be an ideal situation for a smart savvy business owner because it’s an established company and you will receive a good amount of support from the McDonalds corporation if you so happened to meet their stringent franchisee qualifications. Likewise, one can attempt to be a franchisee of a much smaller business, like that of in the commercial cleaning industry that would require much less capital. The unfortunate aspect of trying to be a franchisee of such a well known brand, depending on how one views the situation, is that it requires hard work, long hours and ‘the most important’ lots of capital. In fact, the average fees to open up a McDonalds franchise is roughly between $1 million – $2.16 million excluding other ongoing fees that are typical when franchising. (www.franchisedirect.com) In comparison, some business owners eventually begin to franchise their firm under unexpected circumstances. In 1986, when 17 year-old Tariq Farid opened up his small flower shop in East Haven, Connecticut, he had no idea that his small dream would eventually become a big one. Farid, who comes from a Pakistani descent, would tell his mother of how much money he dreamed of making and due to his vision it has become a reality turning his local flower shop business in a small Connecticut town into a franchise that now has a presence in 14 countries as of 2013 with almost 1,000 units. (www.franchise.org) In an article, by Deluca (2011), he collaborates with Farid, founder of Edible Arrangements and Mulgannon founder of Junk King, to identify 6 key steps in franchising one’s business successfully. The first step is to “Know Your Business Inside and Out”.  Farid recollects in the early days of his business that he wore many hats trying to increase revenue and build his brand. If he needed some photographs of his products or needed a better back-end to fulfill his company’s orders online, he did it or built it himself. When a stranger walked into his store inquiring about wanting to open up a store in Boston, Farid decided to open up a second store, for him to test the waters just as if it were an actual franchise unit going through all the proper steps to determine if franchising would benefit his business. Next, “Learn About the Legal Issues”. Mulgannon and Farid both concur that it would be wise to seek help from expert Franchise Consultants in order to cover all legal aspects of franchising one’s business.  Also, they suggest realizing “How You Want to Grow” as compared to what seems like a natural growth for your business concerning your product/service as well as your financial budget. It seems that some entrepreneurs make a mistake of trying to grow too fast not realizing that they don’t have the manpower to keep up with the demand of their product/service or simply just not have enough funds to keep up with day- to- day operations. Fourthly, they state to “Screen Your Franchisees” because more than often a person that wants to become a franchisee for your business doesn’t share the same vision or they lack the entrepreneurial spirit that would allow that person to expand one’s business successfully.

Furthermore, they express to “Set the Right Directions” for your franchisees. When imposing certain guidelines and restrictions pertaining to the what signage is allowed in the firms, what the ongoing fees are going to be, how much is required to be spent on advertising, etc., it is necessary that these requirements be consistent with one’s brand while allowing it to provide adequate growth for future advertising and earnings for both the franchisor and the franchisee. Finally, the last step would be to “Support Your Franchisees”. Farid states that one of the most important aspects of having successful franchisees is to provide continuous support for them keeping them up to speed pertaining to anything related to Edible Arrangements and the industry in general, notifying them of the constant changes as well as any foreseen future problems that would negatively affect the brand. For instance, Edible Arrangements actually has various departments that handle different parts of the business such as: supplies, ongoing training, franchisee customer service questions, etc., that specifically assist their franchisees.

The advantages of franchising one’s business can benefit both the franchisor and the franchisee depending how well the formula for success is, that the franchisor has in place for its franchisees. Failure rates for franchises like: Blimpie, Blockbuster, Coldstone, and Quiznos were on the unsuccessful side of a list of various franchises as of 2011 and is a prime example of how not to franchise one’s business resulting in 20% default loan rates. (www.franchisehound.com) Whether it’s their product, inability to adapt to a changing society, or simply just not drawing in their target market on a consistent basis, future aspiring entrepreneurs who decide to lend their brand name to other entrepreneurs can learn from the mistakes that seem to be more often than one would expect.

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Martians Love More Than Chocolate: They Love their Jobs Even More!

Snickers & Mars (Photo credit: Wikipedia)

Often in the world of big business many individuals are more focused on how well their stocks are performing, pleasing shareholders, and the valuation of company IPO’s. They frequently forget that public companies aren’t always the ones with a long company history and early modest beginnings. In fact, private companies account for some of the largest revenues in the world and also have been acknowledged as some of the best places to work for in the United States. Firms like Mars, Inc. has made Fortune Magazine’s list as one of the top places to work for in 2013. This has been quite an accomplishment considering the private nature that has become a staple for whom ever is familiar with the company’s long history. Nevertheless, when Paul Michaels took over as the CEO in 2004 after the retirement of Forrest Mars, Jr. and John Mars, sons of Frank Mars (Founder of Mar-O-Bar, now Mars, Inc.) in 1991 and 2001, respectively, Mars began to realize to expand their business even more they would have to adapt to current social networking/consumer trends and be a little bit more open to consumer needs of wanting to know where their food and beverages are coming from.

Early Years

Frank Mars learned to make candy from his mother in her kitchen in Tacoma, Washington in 1911 and by his late twenties he developed his company and named it Mar-O-Bar. Together with his son, Forrest Mars, Sr., a Yale graduate, they developed the Milky Way and seven years later they created what is known as its close cousin, the infamous Snickers Bar, named after a favorite family horse. But, in 1933 Frank and his son began to grow apart and often did not get along while running the family business. So much in fact, Forrest decided to escape the frustrations of his relationship with his father, business and personal, and travel to Europe to experience the much talked about Swiss chocolate factories of Henri Nestle and Jean Tobler in which he further enlightened himself with the art of chocolate making. While in Europe he refined an idea of serving pet food in cans (Pedigree and Whiskas) and also generated the idea of combining chocolate and peanuts and placing it in a candy coated shell, which is now known as M&M’s. One would think with his strict leadership style and his vision of company culture that employees would not want to work at Mars, Inc. much less wanting to stay for years at this firm. Nonetheless, in the U.S. the firm currently experiences a turnover rate of an astonishing level of only 5%. It seems that combined with company culture, adequate front-line leadership, and executive management decisions, Mars is a terrific place to work for, every so often attaining 2^nd and 3^rd generational workers in places as far away as Slough, England where Mars has a manufacturing plant.

It’s Good to be a Martian

Mars, Inc. which currently ranks 3^rd in the U.S. as the biggest private company behind Cargill and Koch Industries actually is positioned ahead of Fortune 100 public firms such as: McDonalds, Starbucks, and General Mills. Today, it is still owned by the Mars family and has around 72,000 employees around the world in over 73 countries. Their headquarters is in the state of Virginia, but apparently it looks more like a secretive government compound, rather than one of the biggest firms in the world that sells some of the most favorite snacks for consumers like: Kudos, Dove, Combos, Wrigley’s, and Twix. Though ironically, the product that experiences the most sales annually is not human snacks, it’s actually Pedigree, which is food for dogs with $ 4.74 billion in sales this past year.  In exchange for higher salaries and hourly wages than many of their competitors, as well as free Mars candy, employees are expected to abide by the firm’s five principles and go above and beyond in their efforts to increase output of their various products. In fact, at Mars an employee won’t receive any stock options or experience specialized chefs on company grounds nor will they see fancy modern day art on company walls. But, they do have the ability of earning bonuses up to 100% of their pay in some cases and they will also be reminded of the five core company statements of quality, responsibility, mutuality, efficiency, and freedom framed on their office walls at which is described in detail of what is expected of employees in a 27-page introductory booklet that they receive after being hired. In addition, employees are encouraged to display corporate responsibility by volunteering around their local economies that portrays a sense of empathy and thanks to the very communities that support Mars’ products. Also, a select amount of employees get to experience various sides of their business by spending weeks at different locations to get a better understanding of how the process of making their products takes place from around the world.

Conclusion

During the Great Depression, Mars, Inc. survived for essentially three main reasons: intelligent leadership, hardworking employees, and of course the passionate love for chocolate that many humans obtain. Today, CEO Paul Michaels recognizes the changes that need to take place in his organization in order to further compete with seasoned competition as well as up and coming start ups in the food industry. Originally when Frank Mars began Mar-O-Bar, his vision of making quality rich chocolate for everyday people to enjoy from his mother’s kitchen in Washington has become a global phenomenon going from revenues of $25 million in 1933 to $30 billion in 2012. Currently, the firm makes some of the most popular snacks in the world as far east as China, boasting a diverse workforce accounting for around 38% in female leadership, valuing their employees through financial reward programs, allowing select employees to enhance their skills and knowledge by way of Mars’ global partners, allowing free Mars candy from vending machines on campus, all while holding core principles alive for over 100 years.

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Circuit City Taught Us What Not to Do in Business: Is Best Buy next?

Best Buy sign (Photo credit: Ron Dauphin)

During the years 2007-2008, the electronics retail industry witnessed the demise of giant Circuit City. After certain executive management decisions like: halting the sales of household appliances and removing sales people from the sales floor, in combination with the Credit Crisis of 2008, fighting off competitors such as: Best Buy, Wal-Mart and Amazon, and the inability for creditors to lend out money to consumers to make big purchases, Circuit City’s death of its brick and mortar stores was inevitable. When Circuit City’s executive managers decided to stop the sales of products like refrigerators and stoves, consumers behaved like normal, they went to other stores that sold these items. In addition, the removal of sales people from the sales floor at Circuit City, handicapped them because consumers wanted that one on one experience of being helped by a Circuit City salesperson in case they had any specific questions about the product, sales specials, or about any other specifications they could think of at the time of a possible purchase. Consumers began to flock to other retailers that sold similar products that were cheaper, which ultimately spelled the end for the once dominant player in the electronics retail industry. In contrast, today’s consumer behavior and market has grown to something rather different on how they obtain information concerning purchase decision making and how they react to traditional sales and marketing techniques. Currently, more than 38% of consumers have a smart phone and according to research around 45% of them used their smart phones to compare prices for products with other retailers like Amazon.com and Wal-Mart, while actually still in that particular retail store. (Haag & Cummings, 2012) It seems that many consumers are learning that they actually prefer not to be bothered by any salesperson that is pestering them by continuously making unwanted suggestions about other products in the store that the consumer might be interested in or they are just annoyed by the fact that many salespeople lack the ability to answer many related questions about an actual product accurately without going to some other resource, in which a consumer can now do themselves with mobile smart phones that have access to the internet as well as retail related money saving applications for their phone. In an article by Downes (2011), Best Buy, once Circuit City’s main competitor, has been experiencing the same negative financial health for the past few years, as did Circuit City back in 2007. Downes states that Best Buy has seen a dip in their overall financial health for reasons such as: feeble sales forecasting, lack of effective salespeople, poor customer service, busts in sales like the 3-Dimensional televisions, stronger competitors, weak supply chain management, and executive management’s ineffectiveness of adapting to current consumer trends. Downes expresses numerous mistakes that Best Buy has made in recent years that in essence, are the reasons why their company has found themselves facing bankruptcy and liquidation. The most notable failure of Best Buy is during the Christmas Season of 2011 in which they could not fulfill orders of the most popular items during the busiest shopping season of the year which portrays poor inventory management. Also, as consumers attempt to buy items in Best Buy, they’ll soon realize that the salespeople often don’t attempt to help you and when they do, they seem to be more inept in trying to practice old fashion cross selling techniques which often agitates people in general. Responsible managers will realize that consumers want to be notified when there are certain sales or specials, but they have to find the right balance in doing so without becoming overbearing upon unloading too much information on the consumer, in which case eventually becomes cumbersome. For example, Best Buy’s rivals like Apple, Amazon, and Wal-Mart are taking advantage of technology by exploiting the use of push technologies versus the already old-fashion pull technologies of what seems to be decades old. Using data mining technologies, they simply recommend certain items for purchase based on past purchase and keyword search behavior without seeming too vexatious, upon your return to their websites. In addition, stronger competitors not only offer better prices, they even emphasize better customer relationship management techniques such as no hassle returns, free shipping, better post sales customer support and by utilizing mobile applications that enable consumers to compare prices with similar products that they also sell. Downes believes that Best Buy has created their ill fate by not being able to adapt to consumer needs and trends like the way their competitors have in the 21^st century. He states that their path to bankruptcy will be similar to that of KB Toys and Virgin Megastores in which he borrows a line from one of Ernest Hemingway’s books, “Two ways, Gradually, then suddenly.” As shareholders have been monitoring Best Buy’s depleting growth in the last few years, Downes’ prediction of a failed company may soon become a reality.

How to Give a Good Slide Presentation: Business or University

NeKeta Argrow of Microsoft (Photo credit: Travelin’ Librarian)

I’ve given close to 100 presentations and these tips have worked for me throughout the years.

Do

• Pick a good presentation software. Microsoft Powerpoint, Google Drive, Sliderocket, Powtoon, or Prezi seem to be the best looking, affordable and easy to work with.
• When preparing beforehand, write talking points that highlight  the most important things to talk about.
• Just like writing a Term Paper, write an outline of how you want to begin the presentation, transitional talking points, (The ones you just wrote) and the conclusion. (Presentations are just like Term Papers, the best ones are the ones that flow naturally and sound organized.)
• Do research on the subject you are talking about. Nothing sounds better than a person who knows what they are talking about. Plus, it allows you to answer any questions that your audience may have for you.
• After writing your talking points and outline, form your slides in that exact way. Every time you go to the next slide it should be a transitional point from the one before. That way, it sounds naturally smooth.
• When giving statistics or an important fact that is not part of general knowledge, put a citation (Year and Author is fine) at the bottom of the slide in a smaller font to show that the information that you gathered holds validity and that you didn’t draw it from a hat.
• Writing slides should be summarized main points that you want to make.
• Keep your presentation to no more than 10 minutes long.
• Realize that only 7% of an attitudinal meaning of a message comes from the actual word and more than 90% comes from non-verbal cues. (Therefore, gestures, eye contact, hand movement, postures, etc. says more than you think to your audience. Keep it positively engaging and not boring.) Charisma is everything!
• Be conscience of different cultural norms of who you are presenting to. What is okay in one country, may be an insult in another. (Be aware of Business Etiquette) Note: This applies to different company cultures within your own country as well.
• Before you begin your presentation, give a summarized handout of your presentation of main points that you want your audience to remember such as statistics, graphs, financial outlooks, and financial statements that may persuade decision making. (No more and no less than what you need to get your point across. No unnecessary information.)
• Practice giving your presentation to a friend/colleague or possibly even record yourself and watch the playback to give yourself ideas on how to improve it.
• Practice, practice, practice. (Don’t have a brain freeze during your presentation. It could make or break a deal and could cost you your job or a good grade in school.)

Don’t

• Don’t give the handout and immediately begin speaking right after. Your audience may still be looking at the information you just gave them. (You should have the handouts already in their seating areas, so they can view it while others are coming in and wait a few minutes for them to look it over before you start the presentation.)
• Do not Overload too much information on the slides. Slides should only highlight main points and not be used to transfer a “novel” on them.
• Do not read your presentation from the slides. (Writing an outline beforehand should help organize your thoughts and help you avoid doing this.) 
• Giving a presentation more than 10 minutes long almost assures that much of what you are saying past that time mark will not be accurately heard by your audience. (About 75% of communication is listening, but humans only spend about 30-40% hearing it. The more you speak, the less they will hear it concisely. Keep it short and to the point)
• Don’t assume that all cultures and traditions are the same, even in business. (For example, giving a thumbs up in the The United States, is an insult in Spanish speaking countries.)
• Avoid using words like: um, uh, etc. during your presentation. It sounds unprofessional.
• Avoid putting too many pictures and illustrations on your slides. Keep it mild. (Often, less will be more.)

Optional:

• If you’re presenting at your school, think about giving a short quiz at the end and give a small prize for the ones who get it correct. (This would be discouraged to actual Professional Colleagues)
• Add a short video to your presentation that is from a reputable source.

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Let’s Face It, Some Workers Need a Spanking: Get Them on the Right Track

English: Ken Olsen’s primary concern about customers and employees “Our Employees are our greatest Asset” was distributed on a coffee mug, to encourage all employees. (Photo credit: Wikipedia)

Disciplinary problems among workers have long been a problem for decades. Most recently in the last couple of centuries social scientists and sociologists have been researching the various behaviors of workers in firms to determine solutions on better ways to essentially increase production in businesses. In an article by G.A. Bielous, he offers some solutions on some mistakes to avoid when dealing with troublesome employees at any organizational level. The five blunders when dealing with employees that have behavior problems that examined are: praising too much or too little, losing your temper, avoiding disciplinary action entirely, playing therapist, and being inconsistent and unfair. Disciplinary problems that are most commonly displayed in the workplace are things like: absenteeism, tardiness, productivity deficiencies, alcoholism, and insubordination. (Mathis & Jackson, 2011) Therefore, approaching people that display such a broad base of issues can get a bit complex. For example, when praising someone, one should keep it somewhere in the middle because too much praise may cause the employee to be too reliant on the manager’s approval rather than on personal satisfaction and too little praise may cause an employee to display behaviors of a lack of self-worth thus expecting to fail on various projects. He suggests offering a simple ‘thank you’ may be suffice in most cases because it shows appreciation without being overzealous. Next, losing your temper with an employee doesn’t solve anything. In fact, it may escalate the situation even greater with an employee screaming right back at you causing a huge scene at the workplace. For instance, instead try calmly bringing your employee into your office and tactfully trying to retrieve a logical reason why work is not getting accomplished because it could be personal reasons or maybe a lack of reliable resources and not because he/she is trying to cause a problem. Subsequently, avoiding disciplinary actions in its entirety is strongly discouraged, besides the whole reason for it, is to improve behavior and if it’s just ignored, problematic behaviors among workers will increase and possibly even spread throughout the organization. Bielous (2005) suggests, that either a Positive Discipline or a Progressive Discipline Approach will be necessary to help improve an employees’ self discipline which usually involves four levels of escalation: counseling the employee, another meeting with the employee and documenting what plan is to be enacted regarding the employee, final warning to an employee, and lastly the discharge of an employee.  Furthermore, when a manager is dealing with individuals that are engaging in an open argument among other employees it is not the best idea to play therapist. Bielous (2005), states, “Subordinates are more attentive when executives are less analytical and more decisive.” Therefore, the best alternative to handle a situation of this nature is to be firm with your voice and tell them to go to your office immediately and if they don’t, security or HR should be called to prevent the situation from getting any worse. Finally, as a manager it is very important to be consistent and fair with the way one treats employees or it is assured that one’s employees will take notice and uneasy behaviors will be soon expressed. He believed how one treats their employees can severely affect one’s organization positively and negatively, so it’s important that formal steps are done in order to show that everyone has been treated the same which includes heavy documentation.

In conclusion, all of these words of advice seem to hold a great abundance of validity and it would take proper training of a manager to adequately accomplish these processes. Furthermore, in my experiences I have used only some of these techniques, although many of these tips could have proven to be very useful. I believe in today’s age where employees are trying to protect themselves and employers are also trying to guard against false accusations, documenting all conversations and being consistent and fair are the biggest keys for firms to be successful in production and avoiding farce legal issues.

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