CNBC Cancels Reruns of Franchise Documentary

On December 19th I wrote a blog about CNBC's Untold Story of Franchising documentary. In that blog I talked about what I thought the story got right and what the story missed for the franchising industry and the franchises they highlighted. Apparently I neglected to highlight a major criticism of the show!

I did not spend a lot of time talking about negative spotlight that was shining brightly on Cold Stone Creamery, primarily because I have not worked with them and don't have enough information to have an informed opinion. However, those closest to the details found many flaws with the Cold Stone Creamery segment and hired the top franchise attorney in the country to represent the franchisees and a separate law firm to represent the franchisor. Robert Zarco, the new franchisee attorney, said in a letter that CNBC acted "irresponsibly, wrongfully and with malicious intent, negligently, and with reckless disregard for the interests of the franchisor, the franchisor’s employees, the franchisees’ employees, and consumers." Now CNBC has "temporarily" cancelled planned reruns of the documentary to investigate the facts as presented in the original airing.

This was not the first piece of controversy about CNBC's "The Untold Story of Franchising." After the original airing, CNBC posted a clarification that the CEO in charge of P&G's franchise subsidiary said that Mr. Clean and Tide franchise royalties were based on net sales instead of gross sales, which would be a good deal for franchisees. It turns out that what P&G calls net sales is what other companies call gross sales. As if current and potential franchisees need something else to be confused about.

Top 10 Franchising Trends for 2011 and Meta-Franchise News

The December newsletter is now available! Check out the hot industry news this month and the spotlight franchise for December, Tutor Doctor.

CNBC's The Untold Story of Franchising

Last week CNBC aired a story called "Behind the Counter: The Untold Story of Franchising." The report looked at five brands including Five Guys, Camp Bow Wow, Tide Dry Cleaners, Mr. Clean Car Wash, and Cold Stone Creamery. CNBC's story included some useful information, but I don't think anyone who has been looking at franchising will find any of the information "untold." Here is what the story got right and what it may have missed.

What It Got Right

• Franchising is big business! 1 out of 10 business owners become their own boss through franchising and franchising is a trillion dollar industry
• When doing your due diligence, you should talk to franchisees that have been open for less than 1 year as well as franchisees who have been in business for a while to get a variety of perspectives
• Franchisors are not required to make an earnings claim (Item 19)
• The FDD is a big document (Cold Stone Creamery's was 700 pages!) and it is important to have the document reviewed by lawyers and accountants so you are aware of all of the fees (one time and on-going) associated with buying a particular franchise
• Not all franchisees will be successful. All businesses have risk, but a good franchise system can significantly reduce your risk

What It Missed

• The story looked at Camp Bow Wow and seemed to say that because they have high initial costs, it is not a good franchise to buy. I don't work with Camp Bow Wow, but I do work with many franchises that have costs equal to or greater than Camp Bow Wow's. The costs to start a franchise are primarily driven by the cost of real estate and the costs to outfit (equipment and supplies) the business, and do not correlate to the chances of success for the franchisees in the system
• Since 2008 the United States has been in a credit crisis, making financing very challenging for potential and existing franchisees. While doing your due diligence, you should be careful about drawing conclusions from what Don Sniegowski of Blue MauMau called SNO (sold but not open). There are lots of reasons (like access to credit) that might leave a franchisee stuck in SNO that say nothing about the quality and profitability of a franchise system

Contact Meta-Franchise Consulting today for more information about how to find the franchise that is the best fit for your requirements.

Franchise 500: The Top Franchises for 2011

Entrepreneur.com has released their 2011 Franchise 500 Rankings*. Meta-Franchise Consulting is proud to work with many of the franchises on the Franchise 500 list. Here are a couple highlights:

• Servpro made the "Top 10 Franchises for 2011" list
• Servpro and Stratus Building Solutions are both on the Franchise 500 list as the "Top 10 Homebased Franchises for 2011"
• Stratus Building Solutions and ServiceMaster Clean are on the Franchise 500 list as the "Top 10 Low Cost Franchises for 2011"
• Always Best Care Senior Services and The Senior's Choice made the "Top 10 New Franchises for 2011" list
• Stratus Building Solutions is the #1 "Top 10 Fastest-Growing Franchises for 2011" and Liberty Tax Service is #7 on that list

Contact Meta-Franchise Consulting for more information about these or any of the other franchises on the list. I look forward to helping you identify which "top" opportunity is the best fit for your unique requirements.

*Every year Franchisors submit data to Entrepreneur.com, including their full FDD. Only franchises that have at least 10 units will be considered and a franchise will not be considered if it has filed for bankruptcy. All companies are judged on objective and quantifiable data and Entrepreneur.com uses their proprietary formula to give eligible franchises a score. The franchises are then ranked based on their cumulative score. Entrepreneur.com makes it clear that their ranking is "not intended to endorse, advertise or recommend any particular franchise. It is solely a research tool you can use to compare franchise operations."

4 Numbers Showing Molly Maid's Resistance to Recession

Many people are scared away from starting a franchise because of concerns over the economy. These are certainly legitimate concerns, especially related to sources of financing and the ability to grow a customer base. However, not all businesses are affected by the economy and some manage to thrive despite the economy. Here are 4 numbers that show Molly Maid franchisees are resistant to the recession:

1. $3.5 Million: System-wide sales for week 46
2. 10.5%: Increase in sales over same week last year
3. 150,000: Total web contracts delivered to franchisees year-to-date
4. 42%: Increase in web contracts over last year

In addition to these amazing results, Molly Maid franchisees also enjoyed the highest sales for a Thanksgiving week and the second highest sales for any week in the history of the franchise!

It is important to note that Molly Maid franchisees do NOT clean homes. This is an executive franchise where franchisees are responsible for marketing, sales, and managing the team of employees who do the cleaning. Molly Maid franchisees enjoy the recurring revenue stream achieved through repeat customers. Visit our Molly Maid site and contact Meta-Franchise Consulting for more information about joining this successful group of business owners.

Listo Tax for the Hispanic and Low Income Communities

I just read this blog post about Listo Tax Solutions. They are opening new offices in Texas and California over the next two months to provide high quality services for their niche market: the Hispanic community and lower income families.

Listo Tax franchisees are well positioned to serve our country's largest emerging market by providing tax, accounting, payroll, and translation services. To be successful in this business you do NOT have to be bilingual and you do NOT have to have prior tax experience. The team at Listo will show you how to be a successful business owner catering to an under-served client base that continues to grow every year. And of course this business is recession-proof. As Benjamin Franklin said in 1789, "The only two certainties in life are death and taxes."

Contact Meta-Franchise Consulting for information about how to have your own tax franchise to provide valuable services to the Hispanic and lower income communities across the country.

Stratus Building Solutions Recognized as "Top" Franchise

Stratus Building Solutions opened their first unit franchise in 2005, and since then they have been included in many "top franchise" rankings including:

• #1 Top New Franchise
• #3 Top Fastest Growing Franchise
• #4 Top Home Based Business
• #5 Top Low Cost Franchise
• #11 Top Global Franchise
• #13 Franchise 500

Stratus Building Solutions recently added another accolade when they were named one of the "50 Top Franchises for Minorities" by the National Minority Franchising Initiative. As reported by NMFI founder Rob Bond, only 5-6% of franchises were owned by minorities in 2000. Today, minorities accounts for over 15% of franchisees. Stratus Building Solutions is leading the way with their Master and Unit programs that make business ownership more attainable.

Stratus Master franchisees are former business executives, sales professionals, and entrepreneurs looking for the next great opportunity in a recession-resistant industry. Master franchisees benefit from quick cash flow and return on investment, multiple recurring revenue streams, high-volume sales growth, high-margin earnings, exclusive territories, national accounts, and multiple franchise concepts under one roof. Stratus Master franchisees provide the contracts, training, billing, and financing for Unit franchisees.

Stratus Unit franchisees are small business owner/operators. Unit franchisees benefit from comprehensive training, guaranteed contracts (and guaranteed income!), the ability to start their business part-time, and the flexibility to execute the contracts or hire a team. Unit franchisees can get started for as little as $1,000 down payment.

Stratus Building Solutions Master and Unit franchisees are part of a $140 Billion industry. Few industries are that big, and even fewer are recession-resistant. Stratus franchisees provide their clients with a "one stop shop" for all maintenance services that include "touchless sanitization", specialty floor care, pressure washing and exterior cleaning, "green" recycling, lawn care and landscaping, pest control, energy conservation, and security/safety. Contact Meta-Franchise Consulting for information on how you can be part of the Stratus Building Solutions team.

Small Improvements in Financing to Spur Franchise Sales Boom

I have published a few blog posts this year about how to find the necessary financing for a franchise when the traditional lenders aren't working for you. In July I covered Benetrends who will help you convert your retirement account into cash for your business (tax and penalty free). In September I wrote about FranFund who provides a service similar to Benetrends but can also help with more traditional loan packages. I just read this article on the PR Newswire about franchise financing improvements that will help more people find franchise financing and open their doors for business.

Before deciding to post this PR Newswire article by Mark Siebert, I looked into his bio. He has been in franchising since 1985 and has taught graduate-level courses on franchising. I trust that Mr. Siebert knows what he's talking about and I am excited for my clients that have the drive and desire to be business owners but until now lacked the financial resources to buy a franchise. Let's get started on your franchise search process now!

Small Improvements in Financing to Spur Franchise Sales Boom