Over four decades into these regulations and the perils of getting trapped into a franchise scam haven’t ceased to exist.

It is imperative that prospects carry out thorough and extensive research before committing their hard-earned money to a franchise system. There are too many superior systems available for various budgets and there is absolutely no reason to settle for anything less than the very best.

One of the most valuable research tools available to prospective franchisees is the Franchise Disclosure Document or the FDD. Every franchisor –by law is required to provide their prospective franchisees with this document.

The world-wide web is also a huge resource –with a wealth of information. However, use caution when going online to research a system.

You can’t believe everything you see or read online. With the ease of self-broadcasting and self-publishing, anyone with basic skills and a PC can publish what they like –without any regulation. You need to use your own judgment and carry out thorough research to find out what’s right for you.

So what are some signs of a strong franchise?

A franchise is only as good as its brand name – which eventually determines the performance and success of other franchisees within the system.

A good franchise is one with a broad recruitment process, which at some point replaces the selling process so only the most able gain entry into the system.

There are a number of critical areas that –through careful analysis can help you detect a scam:

1. Years of experience in the business: The number one thing to look out for –when looking for signs of  a spurious or inept franchise is the number of years the company spent in the business before entering the franchise industry. I spent years coaching businesses before I went into franchising. I have personally invested millions of dollars into establishing and perfecting the systems of my franchise. Unfortunately, many franchise companies venture into franchising before getting into the business they are in. They are incompetent with flawed systems and many franchisees are getting ripped off by such companies.
2. Experience of the management team and how it supports franchisees: You don’t want to invest in a franchise with an inexperienced team. Each member on my team at ActionCOACH has a good understanding of not only the business coaching industry but also of franchising. It is a good idea to call franchisees and see what they think of the management team and also find out what type of support they will provide you.
3. The financial condition of the company: Needless to say, the financial health of the franchise is vital in your decision-making process.
4. Can they justify the franchise fees? Prospects looking to invest in a recognized brand with thriving franchisees should be prepared to pay a hefty franchise fee. In order to determine if the fees are acceptable, ask existing franchisees if they are getting value for their buck.
5. The franchisor’s litigation history: While litigation is the cruel reality of doing business in today’s world –with most companies having some type of legal action by or against them –it is essential to closely scrutinize these cases, which are available in the FDD.
6. Awards by Recognized Institutions: The growing popularity of the franchise industry has given rise to several reputable organizations that award franchises based upon their financial viability, training and support, systems maturity, etc. An award-winning franchise seems to be a good indicator of an honest and successful franchise system.

KFC Corporation V Iowa Department of Revenue is one of the most interesting and important cases on franchise taxation in the last 20 years in America.

The ramifications of this ruling are important to anyone working within a franchise system in the United States, so over the next couple of blogs we will discuss the case and what it means in some detail.

KFC V Iowa Department of Revenue was based on the belief by the state that KFC was responsible for paying corporate income tax in the state based solely on its receipt of royalties from franchisees in Iowa.

In June 2009, an Iowa District Court upheld the state's imposition of tax. KFC quickly appealed the decision to the Iowa Supreme Court, which heard oral arguments in the case in May 2010 and issued its decision on December 30.

In the case, KFC argued to the Iowa Supreme Court that the Department's assessment of tax violated the Commerce Clause of the U.S. Constitution.

Previous Supreme Court case law had found that the Commerce Clause required a taxpayer have a physical presence in a state before the state could require the taxpayer to collect and remit the state's sales and use taxes.

The Department of Revenue disagreed with KFC's position, arguing that the state could impose its corporate income tax on KFC regardless of KFC's physical presence in the state.

So what was the ruling and what are the ramifications for franchises based on it? Stop back for my next post and hear the rest of the story.

So, you started the company, you built it up, but are you the best person to keep running it?

It’s a tough question.

Entrepreneurs are not always the best managers. In fact, they are often some of the worst.

For entrepreneurs who find themselves “stuck” or see their companies at a growth plateau, a great question to ask yourself is whether or not your greatest strength is managing what you’ve built.

For most owners, it isn’t. For most of them, what they really need to do is get out and start a new venture or enterprise.

Because entrepreneurship is what they do best.

What are the characteristics of a great entrepreneur?

Different from those of a manager or employee. That’s why owners are entrepreneurs in the first place. Beyond a vision and drive for something more, true entrepreneurs realize trading time for money is not the way to get rich.

However, being stuck as a manager in your own operation is not productive, especially when your talents lay elsewhere. But how do you get out of your own business in a way that benefits everyone – including yourself?

First, you must recognize “you” may be the issue. Once you admit that, options and opportunities become more clear. Ideally, you already have some systems in place in your business and a good team you can trust to run at least some portions of your operation.

Then, you must take a leadership position to put new leadership in place.  There are a few great ways you can successfully make it happen that have proven effective for other owners in your position over the years:

1. Recruit two or three high caliber people and let them work their way to the top. Don’t let them know you are looking at them as your replacement one day; instead, mentor them and let them lead their various divisions and see for yourself who would be the best fit for the company long-term.
2. Look within. Here, you’re looking at your current roster of executive staff you currently have for one or possibly a group of employees who could takeover the company and run it long-term. You might even find a way to create an income flow for yourself long-term from this type of arrangement – one that would let you do something else, like….
3. Find and run a business that is not dependent on you. Ideally, this is the business you start after you sell or find a creative way to get your cash out of your existing business.

That said, there are a couple of ways NOT to replace yourself. In some instances, these tactics may have worked. Just remember, those successes are the exception – and not the rule.

1)      Make a clean break. This is the easiest way to replace yourself. Here, you basically go out and hire a pro to come in and run the business. That person comes in, and you go out. Obviously, this isn’t recommended for a number of reasons. First, the new person has little or no institutional knowledge of your business or its history.

Second, such change is usually too drastic for customers and employees. Sometimes, it’s even too drastic for the business owner – who in many instances undergoes a change of heart six months or a year down the road and decides to come back. Many times, the company the owner returns to is not the one he or she left.

2)      Put a family member in charge. This is also an easy way to replace yourself, and it is also not recommended. The reasons for this are obvious:  resentment among top management and employees; perceptions of nepotism; the idea that skill sets don’t match the high standard of a founder.

Putting a family member in charge could be an option if the plan of succession for a business is already laid out that way, all team members are aware of that plan and the person tapped to lead the company has paid his or her dues working in the company from the ground up.

Most times, however, owners aren’t so prepared or long-term oriented in this regard, and the envy and resentment of family members in charge leads to problems from which most companies never recover.

Regardless of the route you take, the important thing to realize is most issues in business start at the top. It’s why a company suffering for lack of sales is probably led by a boss who is not a great sales person. It’s why a company with a dysfunctional team is led by a person who is not a great manager. Or why a company that seems unfocused is run by a person chasing after every new market or idea that seems to hold opportunity.

Maybe you’re the person I’ve just described. You had the great idea, the brilliant innovation or the breakthrough product. But maybe you’ve taken the business as far as you can take it. Maybe it’s time to get out of the way and let a new team of professionals take over so you can move on – and start your next business.

Recognizing you are not the perfect sales person, manager or marketing director isn’t bad. It can be liberating.

Realizing you’re the perfect entrepreneur can be the just what you need to really succeed in business – at a level you may have never dreamed possible.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

I want to teach you how it is that the very best companies and the very best salespeople NEVER worry about having a higher price.

In fact, if you’re great at sales, and great in business, you want a higher price.

You want to have to sell, rather than just accept orders.

You see, anyone who can only make a sale when they have the best price has, in my opinion, missed the whole point of selling.

Let me give you an example from my own life …

I needed new tires for my car. I opened the yellow pages and picked three companies to call.  Of course these companies had invested big dollars to have their advertisements placed, so you’d want their people to do a great job at answering the phone.

(Just as an aside, try calling your company and buying something, see if it’s hard, easy or somewhere in between.)

So I make the call, first company, what do I ask … “How much for a set of tires ... ?”

That’s what everyone asks, why …?

Because that’s how we’ve been trained - and even more importantly, what else do we know to ask about?  When I call to ask about airline tickets, do I ask about the pilots’ experience? No. I ask about price.

So, his answer … “That will be $X per tire plus fitting and balancing.”

I said, “Thanks, I’ll call you back.”

Of course I did, same line we all use, what other option did he give me?

Second call was the same, third guy must have been trained by me or Jeff.  He used my “magic line.”

“Yes sir, thanks for your call, just so I can help you best, would it be OK to ask you a couple of questions … ?”

How great is this? He makes me feel good, and then gets my permission to sell to me.

He then went on to ask VALUE based questions.  What type of driving I planned to do, how many passengers I carried and so on, until I blurted …

“So, what does all this have to do with a price … ?”

“Well sir, if I don’t understand your driving habits, I couldn’t possibly recommend the right tire with the right tread pattern, the right tire compound and that would mean your tire wouldn’t be safe and wouldn’t last as long as it could, and you wouldn’t want that would you sir … ?”

BANG … I’m shot dead, I can’t go anywhere …

Suffice to say he got the sale, but the whole point is …

Price only matters if you don’t educate your buyers …

If you let them think price is important, if your questions lead to price objections, if your sales literature focuses on price and if your sales skills are lacking …

Turn yourself into a performer …

Use questions rather than answers, let them show themselves why they should buy, design questions that lead to value answers not price answers …

You see, if you have a higher price, it must be because you are better. So find out why you are better and ask the customer questions about how important those things are to them …

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

If ever there was a concept you absolutely had to understand in order to succeed in business this would be it. That said, I would see less than 1 in 20 or 1 in 30 business owners who actually do grasp it and, even less who use it well.

So, why learn this … ?

Well, before I understood this I worked 16 hour days, traveled too much and, for two years running spent more than 200 nights a year in hotels … for work that is, not pleasure …

Now, I work maybe 2 or 3 hours a day, have 4 months a year on vacation and run a company with almost 1,000 offices in 26 countries …

So, here goes, let’s learn …

The concept of Leverage is all about achieving ever more with ever less.  Getting your people to achieve more with less effort, getting your advertising to return more sales with less dollars.  Getting better results with less and less efforts, time after time.

So, how do you do it … ?

Well, first you need to think in terms of the formula for Leverage, divide to multiply.  Stay with me. I truly want you to grasp this view of business thinking.

Think about divide to multiply in terms of day-to-day life, a tree cutting.  You take a cutting from one plant, you don’t end up with half a tree, you end up with 2 trees …

In terms of business, franchising is the easiest way to describe divide to multiply, but there are hundreds more ways to apply it.  I want to make it as simple as I can for you to use …

Leverage is your key to business success, and my definition fo you is … Do the work once and get paid forever …

And the exact opposite of that …

Do the work once and get paid once.

That’s why most employees will never create wealth in their job.  They go to work for a day and get paid for a day.  Business is a great way to build something once that will pay you and your family for the rest of your life.

Problem is, most business owners still think like employees and are trying to maximize their income from today’s work.

I don’t do that anymore …

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

Hiring an employee is kind of like dating. The interview can be all roses, but then on date #1, you really start to understand who it is you’ve hired.  And “Oh no,” you got it wrong.

In a big business, one bad employee won’t really kill them. But in small business, we need basically everyone to be a great performer if we are to build our revenues and profits.

So, how do we get and keep good people … ?

I remember when I was 21 and hiring people for my business right at start-up phase and I turned to my Dad for some wisdom and hopefully encouragement.

I said, “You know Dad, I just can’t seem to find any good people.”

To which he ever so bluntly replied, “You know son, you get the people you deserve.”

“Gee, thanks Dad, so motivational.”

Motivation I didn’t get, but a reality check I did.  The really great people didn’t want to work for me, yet.

So, over the years, I’ve come to realize that even though I probably wouldn’t be quite as blunt as my Dad, I would have to agree with him.  I have noticed that with my own companies and just as often with the business owners I’ve coached, Dad was right.

When you run a great company, you get great people.  When you are a great leader you get great people, and vice versa.

At the time I wasn’t a leader, I would have been lucky to be seen as an average manager, and thus I was rewarded with the type of employees who like working for a manager who really wasn’t any good.

So, how did I go about fixing it.  Pretty simple really.

I started to look at what sort of company a great employee would want to join, what sort of leader they really want to work with and learn from.  Then, and only then could I go to work to build a company that they would want to be employed by.

So, just to get you started, great team members (not staff) want to work in a positive, rewarding, successful organization where they have the ability to give input, get the job done and be recognized for their work.

They want a company that is going places where they can learn, grow and build a career.  If that’s not you yet, then keep building.

So, step one is building a great business they want to work with, step two is becoming a great leader who they want to learn from and work with.

I read every book, went to every seminar, got myself a mentor and went to work on becoming a much better leader of great people.

Finally I started to get the people I needed and wanted to help build a great company.

That said, even with all of that, in today’s market place, it’s getting tighter and tighter.  We are running out of great people.  With the labour market as tight as it is, we have to think of our help wanted ads as more of a marketing piece than ever before.  We have to almost sell people on why they would want to come work with us.

And they say the new IR laws are making it tough on employees. Crazy.

As small business owners right now, we’re paying the highest wages we ever have on average, we’re finding it harder to get good people.  That is if anyone will even show up for an interview and as I’ve always thought, when business is booming, the employees have it the best they ever can.

At least we do business in a country now where as a business owner you are allowed to let people go without the fear of them suing you and taking your whole business, or at the very least wasting hours of your time defending yourself anymore.  Across the ditch, the Kiwi’s only wish they had our Industrial Relations laws.

Yes, getting and keeping great people is vital, and yes it’s harder now than it has been in a long while.

But, the next time to feel yourself saying, “I just can’t get good people,” take a look in the mirror and ask yourself, what sort of company do the great people want to join, and go do it.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

So, when is great service really great?

Let’s say you and I go to a restaurant and sit down. The waitress is polite, greets us perfectly and serves us so well we feel obliged to order a little more expensive wine.

It’s poured and served with a great skill …

We order our meal and are having a great time …

The meal arrives and it’s bad, I mean real bad.  Now, no matter how good the service, a lack of delivery reminds us that customer service is about the whole experience, not just the interaction.

I had an accountant once who took me to great football games and wonderful dinners, but he kept messing up my returns and was almost always running late.

I don’t care how good the WOW factor is, if you can’t deliver the basics …

So, here’s my 3 steps …

#1 … Deliver with consistency – by far the most important of the three steps.  Every time I call your company, the phone should be answered the same way, the orders processed systematically, the services delivered with regularity so I can trust that you know what you are doing and I can feel good about coming back and referring my friends.  Remember, you can’t WOW a customer until you have at least satisfied them.

#2 … Make it easy for me to buy – consistency is a start, but if you make it hard to do business with you, I can never be WOW’ed.  Everything from ability to contact people, websites, emails to payment methods, delivery choices and so on.  All of these things you need to make sure you are easier or at least as simple and easy as any of your competitors.  Ring them, go to their websites, do as much ‘market research’ as you need to, to make sure buying from you is both simple and easy.

#3 … WOW me – satisfaction is boring, you have to do something I don’t expect.  I remember when only a year or so back, having WiFi in your room was a bonus, now I expect it and am greatly disappointed when a hotel doesn’t do it.  Check your industry and then check 3 or 4 others to find out what is now expected as standard so you can dream up a strategy to WOW me.

Let me give you a couple of examples …

I met with an accountant recently who has a $15,000 golf computer swing analyzer in his office, so while you are chatting about your accounts (and he is billing you) you get a few practice swings in.

Or, the Emirates First Class seats, where when I flew from Sydney to Dubai they actually have doors to your seat and you can close yourself off from the rest of the cabin.  The lights in the roof of the plane gradually change from day to night with a beautiful orange glow, and then the mini-bar in my seat.  All examples of WOW …

But remember, if they hadn’t of had the flight get to Dubai, would I have cared about all the other stuff.  Or, what if I could only pay with cash, how hard would that be…

Great service is one thing, satisfaction with what I am buying, backed up with great WOW type service is what counts …

Reprinted from http://www.mybusiness.com.au/

My odometer rolled over to 90 in August, so here is the column once more:

1. Life isn't fair, but it's still good.

2. When in doubt, just take the next small step.

3. Life is too short to waste time hating anyone.

4. Your job won't take care of you when you are sick. Your friends and parents will. Stay in touch.

5. Pay off your credit cards every month.

6. You don't have to win every argument. Agree to disagree.

7. Cry with someone. It's more healing than crying alone.

8. It's OK to get angry with God. He can take it.

9. Save for retirement starting with your first paycheck.

10. When it comes to chocolate, resistance is futile.

11. Make peace with your past so it won't screw up the present.

12. It's OK to let your children see you cry.

13. Don't compare your life to others. You have no idea what their journey is all about.

14. If a relationship has to be a secret, you shouldn't be in it.

15. Everything can change in the blink of an eye. But don't worry; God never blinks.

16. Take a deep breath. It calms the mind.

17. Get rid of anything that isn't useful, beautiful or joyful.

18. Whatever doesn't kill you really does make you stronger.

19. It's never too late to have a happy childhood. But the second one is up to you and no one else.

20. When it comes to going after what you love in life, don't take no for an answer.

21. Burn the candles, use the nice sheets, wear the fancy lingerie. Don't save it for a special occasion. Today is special.

22. Over prepare, then go with the flow.

23. Be eccentric now. Don't wait for old age to wear purple.

24. The most important sex organ is the brain.

25. No one is in charge of your happiness but you.

26. Frame every so-called disaster with these words 'In five years, will this matter?'

27. Always choose life.

28. Forgive everyone everything.

29. What other people think of you is none of your business.

30. Time heals almost everything. Give time time.

31. However good or bad a situation is, it will change.

32. Don't take yourself so seriously. No one else does.

33. Believe in miracles.

34. God loves you because of who God is, not because of anything you did or didn't do.

35. Don't audit life. Show up and make the most of it now.

36. Growing old beats the alternative -- dying young.

37. Your children get only one childhood.

38. All that truly matters in the end is that you loved.

39. Get outside every day. Miracles are waiting everywhere.

40. If we all threw our problems in a pile and saw everyone else's, we'd grab ours back.

41. Envy is a waste of time. You already have all you need.

42. The best is yet to come.

43. No matter how you feel, get up, dress up and show up.

44. Yield.

45. Life isn't tied with a bow, but it's still a gift."

How many times have you played the “Whatever Happened to ...” game.  Wondering why a certain customer who used to buy what you have to sell doesn’t buy anymore?

Is there a reason?  Or group of reasons?  Has anyone ever done a study on this?

Though the years, I’ve accumulated a group of reports from different sources ranging from different sources ranging from U.S News & World Report, the Harvard Business Review, and several trade magazines to half a dozen motivational and “secrets of successful selling” articles.  But (and here’s the amazing fact) they all have the same statistics.

Now whether this is one person copying what someone else has written or said or simply perpetuating a myth I’m not sure.

What we are sure of is that the statistics make sense because they worked in our business (and seeing them gave us a reason to develop a new customer-oriented marketing plan) and in other businesses as well.

Here are the numbers as repeated in books, columns, and from the mouths of let-me-tell-you-how-to-succeed speakers:

Why Customers Leave …

·         14% leave because their complaints were not solved

·         9% leave because of the competition

·         9% leave because they moved someplace else

·         68% leave for ... no special reason or what we call perceived indifference …

In other words:  Seven out of ten customers who used to buy from you left for ... no special reason ... I don’t believe that ...  I think there was a reason ...  Or a series of reasons:

       I think they left because you never told them you cared...

       I think they left because you never told them they were important

       I think they left because you never said “Thank you” and “Please come back and shop with us again ...”

Many times I have found that owners and operators are so busy minding the business they forget to mind the Customers, and in the immortal words of super salesman “Red” Motley, “Nothing happens until a sale is made”...

How many times have you walked in to the store and found no one to give you any help or assistance?

I heard the story of writer Ken Erdman tells of the time he and his wife were shopping in a Philadelphia department store ...  His wife found an item and brought it to the counter - but no one was there.  And no one to be seen ...  And so Ken simply stood in the middle of the room and yelled at the top of his voice “Help! Help!” Suddenly security people appeared from everywhere demanding to know the problem...

“There’s no problem,” said Ken.  “We just want someone to help us.” 

The Japanese handle that by having People stationed on either side of the door when you walk into their shops ...  They bow and say O-kyaka-san, which roughly translated means, “You are a visitor to my home.”

Do I feel that way when I walk into your business?  Is one cashier talking to another ...  Or a friend on the phone ...  Or busy fixing stock ... Or ... are they so busy minding the business, they forgot to mind the customer ...

A retailer friend proudly showed us his new computers ...  He could tell us how many pairs of pink socks were sold on any given day at any given hour ...   His carry-home briefcase was filled with voluminous printout sheets that he read with the same interest and the newest novel by John Grisham ...  He would pencil in notes on the margin, make references for future buying patterns, and the store as an office away from his office at home ...

His once-successful business went bankrupt ...

He was so busy minding the business, he forgot to mind the Customer ...

Now nothing is wrong with cleaning stock, taking inventory, and buying computers ...  It is to be practiced devoutly, to be admired, and encouraged.  But not at the expense of the Customer ...  Businesses often tend to build fences to hide behind ...

We did a series of seminars for banks at annual state meetings across the country.  We asked each of them, “How many made more than ten officer calls last month?” (“Officer calls” mean  the bank officers had to leave the bank and personally make a call on a Customer and potential Customers throughout the community.)  Few raised their hand.  Yes, it was written down for them to do ...  Yes, they knew it was important ...  But there were papers to read and sign and employees to watch and criticize and . . . well, there just wasn’t enough time ...

We remind them to “take the time,” or the competing bank would be out asking a simple question to the Customer: “When was the last time you saw your banker?”

They were so busy minding the business, they forgot to mind the Customer ...

And what of the phone call to a business questioning a bill ... And the answer, “Sorry, our computer handles that.”

Really?  What’s his (or her) name?  Can I talk to him?  If the computer is going to take care of the business, does that mean it takes care of the customer as well?  Shall we set up your business like a vending machine cafeteria?  Customers come in, look for the selection they want, dial their credit card number alongside  the tiny window opening, and click . . . it opens for them to take what they want ...

And those of you that rave about the tremendous success of home shopping on TV, consider this fact:  The total sales (while impressive) make up less than 3 percent of the total retail in the United States ...

·         People are lonely ... They want someone to talk to ...

·         People are critical ...  They want to kick the tires and touch the fabric ...

·         People are social ... They want to “get out of the house” and go somewhere . . . the local mall or business is fine ...

And so the next time the desk piles up with figures to beat and merchandise to buy and salespeople to hire, make sure it does not take up the greater part of your day ...  That belongs to the Customer outside your door roaming around looking for help in buying an item ...

Take care of your Customer.  If you do, you will have a business to take care of ...

The difference is simply that some people have become aware of the power of words ... 

They understand the words you use and the way they are used in a sentence can have a dramatic effect on the impact, emotion or visualisation that each person gets when reading something they have written.

And it’s this impact, emotion or visualisation that’s the difference between finding something boring or interesting.  To achieve real impact you’ve got to direct your piece to the person who’s reading it ... just like I did when I used the word YOU earlier in this sentence.  By using this word I have personally invited you to become a part of the world I’m visualising and writing about.

And its this visualisation and emotion that’s important ... Think back to when you were telling a friend a tall story and you were waving your hands around, acting out certain scenarios and telling it with such enthusiasm that your friend couldn’t help but feel a part of your story.

They were totally captivated by your verbal story ... Now all you have to do is to tell this same story in writing.  Write as if you were telling a good friend who is overseas the same story.

For some unknown reason we are taught that when you write anything you need to forget your emotion and feelings and write in a way that is guaranteed to put people to sleep ... let me give you an example ...

‘I am having a wonderful holiday.  I went and saw my good friends who live here on the Gold Coast.  They have taken me to Sea World and Movie World which was a lot of fun.’

Would you honestly talk to your friend like that in person ...?  Most definitely not, but its amazing how many people would write to their friends like that. Compare the above to ...

‘You wouldn’t believe how good the Gold Coast is.  It really is the perfect place to have a holiday. You should feel the sand between your toes and the sun on your face.  You can even see heaps of dolphins, seals and whales at Sea World just as I did yesterday.  Last week we went to Movie World which is just great ... you’d really enjoy it.’

So what do you think was the main difference between the first and second example ...?  It was the simple fact that the second example was written almost exactly as you’d say it verbally.  It also included the word YOU a total of 6 times ... once again inviting you as the reader to become a part of the story.

These 2 simple methods can be used with any writing you do ... from letters to advertisements you’ll get a better response when you add enthusiasm to your writing ...