Expanding Your System through Broker Networks, Regional Developers and Master Franchisees

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2 Expanding Your System through Broker Networks, Regional Developers and Master Franchisees Moderator: Lori Kiser-Block, CFE, President, FranChoice Speakers: Gregory A. Longe, President, Automotive Franchise Systems John Dring, CFE, EVP & COO, Cartridge World Mark C. Johnson, VP Area Development, Liberty Tax Service

3 Terms Defined Consultant - An intermediary who generates qualified leads/candidates, qualifies the candidate and works as an advisor to facilitate a franchise purchase. Consultants can represent either sellers or buyers but are compensated by the franchisor. Master Franchisee - A large territory acquired by a franchisee with the intent to subdivide and resell individual franchise locations. Regional Developer - The right granted to a franchisee by franchisor to open several franchise locations in a specific area. This opportunity may include a requirement to develop a certain number of locations within a specified timeframe, and/or may also include the right to sell franchises within the specified area.

4 Automotive Franchise Systems Which sales process do you use and why? At what stage of franchisee development did you begin using that process? What is your cost per acquisition? Does the end consumer product or service matter when deciding which process to use? If you use a combination what are the benefits/challenges of doing so? Share a success story of their process using the above and why it worked so well.

5 Liberty Tax Which sales process do you use and why? At what stage of franchisee development did you begin using that process? What is your cost per acquisition? Does the end consumer product or service matter when deciding which process to use? If you use a combination what are the benefits/challenges of doing so? Share a success story of their process using the above and why it worked so well

6 Cartridge World Which sales process do you use and why? At what stage of franchisee development did you begin using that process? What is your cost per acquisition? Does the end consumer product or service matter when deciding which process to use? If you use a combination what are the benefits/challenges of doing so? Share a success story of their process using the above and why it worked so well

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8 BENEFITS OF USING CONSULTANTS: Quality candidates Wear and tear on sales staff Quick growth Variable costs

9 OUR RECRUITING PROCESS What? When? How? Costs?

10 HOW DOES OUR PROCESS EFFECT THE CONSUMER?... It doesn t.

11 HOW MANY DIFFERENT DEVELOPMENT SYSTEMS SHOULD YOU HAVE?... Two? Three? Four?... The answer is ONE.

12 WHY WE DO WHAT WE DO.. We get results and you can too!

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14 Liberty Tax

15 Liberty Tax Sales Process Regional (Area) Developer Approach Why? Best fit to expand the growth of our company Area Developers live in the area they oversee and have vested interest/vision in the growth of that area When did we begin using this process? Area Development program was launched in our 2 nd year Best way to handle our growth

16 Liberty Tax Cost Per Acquisition Average about $20K

17 Liberty Tax Sales Process Area Developer Approach Deciding Factors Provides good source of capital for funding our company s growth Explosive growth more manageable Provides extra layer of support not all internal Better support for our franchisees means their customers are better served

18 Liberty Tax Success Story 2001 Area Development program launched 7 Area Developers 412 Offices Nationally Area Developers 2,500+ Offices Nationally To date, the Area Development program has infused tens of millions of dollars into the company to fund our explosive growth!

19 Liberty Tax

20 Cartridge World

21 Expanding Your System through Broker Networks, Regional Developers and Master Franchisees John Dring, C.F.E. EVP, COO CARTRIDGE WORLD

22 CARTRIDGE WORLD DEVELOPMENT BY: Master Franchisees Regional/Area Developers Consultant Networks Cartridge World uses all three methods operating in over 60 countries worldwide with stores.

23 The Partnership Franchisor Consultant Master Franchisee Area Developer Franchisee It s A Network That Produces Sales & Results

24 Master Pro s Masters represent the Franchisor on All levels of the Business without the Franchisor Obligation They provide Sales & Operational Support and are strategic to the Franchise Growth in your and their markets

25 Master Con s Sometimes they look like Eagles and act like Turkeys! Poor Master selection crates: Loss of development, loss of time and dealing with partnership issues.

26 Area/Regional Developers Pros Are well prepared to provide Franchise Sales and operating support in their local markets Generally area developers territories allow for better clustering of development Doesn t have the same obligations and responsibilities as a Master or Franchisor

27 Consultant Networks Spends quality time with their franchise prospects Qualifies and retrieves all the necessary documentation Supports the applicant through the process Is a major partner in the development process The expense to the Sale Con

28 Cost per acquisition Masters 50% of Franchise Fee Area/Regional Developer 25-50% of Franchise Fee Consultant 40 % of Franchise Fee

29 Close Any method you choose! Having the wrong Partner, Consultant, Master, Area Developer No growth or development in your system Reduces market share The expense of removing them from your operation Loss of performance and time Retraining/re-selling Re-investment

30 Area/Regional Developers Pros Are well prepared to provide support and Franchise Development in their local specific markets Area Developers territories allow for better clustering of development Doesn t have the same obligations and responsibilities as a Master or Franchisor

31 Cartridge World

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