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1 find it at franchise.org

2 Key Steps in Reaching The Next Plateau Moderator - Nikki Sells, VP Franchising Express Services, Inc Panelists - Susan Black-Beth, CFE, Director Franchising, Super Wash, Inc. Brad Fishman, President, Fishman Public Relations Burt Yarkin, CEO, Cartridge World North America

3 Infrastructure Development for Small, Growth-Oriented Franchisors Susan E. Black-Beth, CFE Director of Franchising, Super Wash, Inc.

4 Is cloning a reality yet?

5 Key Components for Infrastructure Development Key Component #1 Franchisee Training Key Component #2 Field Support Key Component #3 Marketing Support Key Component #4 Compliance Key Component #5 Research & Development

6 Key Component #1 Franchisee Training Create franchisee belief in the system Build lasting, trusting relationships between the franchisor and franchisee Communicate system standards to franchisees and help them understand why the system standards are what they are in addition to how they are to be implemented Participate in store opening and provide start-up assistance

7 Key Component #2 Field Support Act as the pipeline for communication between franchisor and franchisee Be a mentor and provide guidance to the franchisee Main point of contact regarding all things operational Enforce system standards

8 Key Component #3 Marketing Support (Objectives) Two main marketing objectives in franchising: -Enhance brand recognition, in turn building brand value -Bring more business in the franchisees door

9 Key Component #3 Marketing Support Keep the message consistent at national, regional and local level Communicate the message to franchisees and other audiences Assist franchisees in implementing the required programs

10 Key Component #4 Compliance (Types) Two primary types of compliance -System Standards compliance -Financial compliance

11 Key Component #4 Compliance (System Standards) Ensure individual units are being operated and run according to the Franchise Agreement -Discussions with field representatives -Quality Assurance / Quality Control Visits Openly communicate to franchisees their operations strengths and weaknesses

12 Key Component #4 Compliance (Financial) Ensure franchisor is collecting royalties in a timely fashion If not collecting royalties from a franchisee: -Help figure out why they aren t paying and what underlying problem is -Assist franchisee is correcting the problem -Work out a payment solution

13 Key Component #5 Research and Development Stave off competition Protect the value of the brand Search for and/or develop dominant products or service Communicate developments and their benefits to the franchisees in a timely manner

14 Master Key to Infrastructure Development - CONTINUOUS COMMUNICATION

15 Cartridge World A Case Study in Rapid Growth Burt Yarkin, CEO Cartridge World North America

16 Cartridge World History Cartridge World began franchising in South Australia in Cartridge World stores do on site ink and laser cartridge refilling saving customers up to 60% off the typical retail price of a cartridge. Early success helped send the concept around Australia, next to New Zealand and then to the UK. Cartridge World launched into the U.S. in January Our first year in the U.S. was focused on infrastructure development, awarding Master Franchisees in the U.S. and initial store development.

17 Cartridge World History Since it launch into the U.S. in January 2003, Cartridge World North America has Master Franchised 90% of the U.S. and all of Mexico and Canada. In 2004 over 100 new stores opened in the U.S. and over 200 new franchises were awarded. Franchises are being awarded at the rate of one per day in the U.S. and we anticipate opening over 300 stores in this market this year. Worldwide we now have over 800 stores open and we are the largest refiller of printer cartridges in the world.

18 First Year Challenges and Opportunities Initial Focus was creating our basic infrastructure Established our office and initial warehouse. Hired a VP of Operations and basic support staff. Hired IT staff to create systems to support the stores. Recruited initial field staff to open stores. Focused in on completing our Development and Operations Manuals. Started to work on Marketing materials for the stores. Moved our franchise documentation and registration along all over the country. Early on we had the luxury of using our training center in Australia. We didn t set up our training center during the first year. Since this was a new industry in the U.S. we were challenged by not being able to hire technical and operations people already in our industry in the U.S.

19 First Year Challenges and Opportunities The award of Master Franchisees accelerated quickly during the first year. By the end of 2003 we had awarded master Franchises for about 50 % of the U.S. At that point out primary focus was assisting Master Franchisees as they started to franchise in their areas. Awarding initial stores is always difficult especially in the new industry. Started print and national franchise advertising. Hired a PR firm

20 Lessons Learned in First Year Have the financial resources available or you will struggle. Critical balance of projecting your growth and building the infrastructure to support it. Hire the most experienced people you can, especially those with franchising experience. Listen to your system and get them involved in solving system issues.

21 Second Year The System Takes Off 2004 was our first full year of franchising and we opened over 100 stores and awarded over 200 stores. Focus During the Year: Awarded most of the last Master areas in the U.S. Helping the Masters accelerate the award of franchises. Supporting the growth of operations staff for our Masters. Continued work and development of infrastructure; Brought in more senior staff to support our growth. Brought in more administrative staff to handle documentation. Established a large training center and hired a full staff of trainers. Moved to a new 20,000 corporate office and training center. Focused in on tools that would help our stores. Created Franchise Councils comprised of Master and Unit Franchisees to improve support systems.

22 2005 and Beyond We will open at least 300 stores in the U.S. this year. Our focus will be on rapid growth, and brand awareness as we establish more stores. We will continue to staff up and build our infrastructure to support rapid growth. We just moved into a 18,000 sq. ft. warehouse which helps us purchase in volume and give out franchisees competitive pricing from us and our vendors. We are already looking to double the size of our training center.

23 Marketing Your Franchise To Potential Franchisees Brad Fishman, President Fishman Public Relations

24 What Really Works?

25 Walk Before You Can Run Lay the groundwork: Have solid plans for how to market the products, services to potential customers Provide proof of successful model to potential franchisees Proof of support mechanisms to potential franchisees

26 Do Your Homework Examine surveys of franchise lead generation practices (Franchise-UPDATE) Tap into expertise of ad/marketing execs (personal meetings, read Advertising Week, BrandWeek) Check out approaches of other successful franchise concepts

27 Using Diversified Lead Generation Methods Print Internet Collateral Referrals Public Relations Consultants/Brokers Trade Shows Direct Response

28 Sales Tools Brochure E-brochure Folder Sell Sheet Interactive CD Website Webinars PR kits Broker Newsletters

29 Profile the Potential Franchisee Candidate Geographical -Local -State -National -International Demographics -Age -Income -Gender Psychographics

30 Media Strategies Determine the media habits of the target franchisee Understand the different types of media Develop a media mix to achieve the lead generation goals Work within your budget

31 Print Ads Newspapers -National -Regional -Local -Weekly Business Journals -Local Magazines National Regional Local Trade

32 Internet Your Own Site consumer franchise only Search Engines optimization: Yahoo, Google, MSN Web Sites Opt-in

33 Invite-Attract-Ask-Convert-Optimize Invite-Look for targeted opportunities and ask prospects to visit your site Attract design, copy and good site usability will keep interest Ask Provide them with a clear call to action Convert Filter and work leads through compelling communication. Optimize Learn from results and tweak as needed

34 TRACK TRACK TRACK! How did the candidate find your web site? Drop-down questionnaire on the site Ask lots of questions by phone! Classify them properly Spend your marketing dollars accordingly

35 Online Franchise Directories Be The Boss Bison Entrepreneur Franchise.com Franchise Handbook Franchise Solutions FranchiseUpdate Franchising.com Gator IFA

36 Use Caution Internet listings: warm leads Investigate before signing contract with franchise listing page

37 Referrals Franchisee Referrals In-Store Programs Corporate

38 Public Relations Nearly 85 percent of U.S. franchisors use PR Credibility of good press coverage is immeasurable POWERFUL! Areas of Effective PR: National Lead Generation Target Market Leads Local Franchisee Support

39 Consultants/Brokers Franchise Consultants FranChoice FranNet Entrepreneur s Source Franchise Buyer Business Brokers Sunbelt Independent Brokers

40 Trade Shows IFE Regional Franchise Shows International Franchise Shows

41 Direct Response Mail

42 Image is Everything! Professionalism Presentation Website/Online Presence Office

43 Industry Statistics Average Recruitment Budget: $167,823/yr 45% Internet Marketing 27% Print Marketing 5% Trade Shows 12% Public Relations 11% Other

44 Sources for the Most Leads Internet 74% Referrals 8% Print 2% Other 16%

45 What Sources Provide the Most Signed Deals? Internet 45% Print 6% Referrals 13% Brokers 29% Other 7%

46 Brad Fishman Brad Fishman is Chief Executive Officer and co-founder of Deerfield, IL based Fishman Public Relations, a full-service media relations agency which was established in Also, in 1993, Mr. Fishman co-founded Investor Awareness, Inc., a Deerfield, IL based Investor Relations firm. Brad is a noted expert who speaks internationally on the subjects of franchising and public relations, particularly regarding lead generation. He serves on the board of the International Franchise Association s (IFA) Franchise Suppliers Forum and on the IFA's Membership Committee, as well as the IFA's International Matchmaker Task Force. In addition, he serves on the Strategic Advisory Board for Nova Southeastern University's International Institute for Franchise Management. Prior to co-founding Fishman Public Relations with his wife, Sherri, Brad served as Vice President of Check Changers, Inc., a family-owned and operated chain of retail check cashing facilities located throughout Illinois and Indiana. Mr. Fishman graduated from the University of Illinois with a degree in finance.

47 Questions & Answers

48 Please fill out the 30-second critique..

49 What is your next plateau? Thanks for coming

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