Strategic Communication Plan 1

Strategic Communication Plan

Julena So, Jennifer LaCario, Nathan Belew, Jocelyn Ortiz

Business 2200

Patrick Dunchee

Thursday, April 26, 2017

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Franchising

I. Purpose and Objectives

A. Educate and inform about basics of franchising

a. start up process

b. investor options and budgets

c. contract drawing

d. pros and cons of franchising

e. differences in franchising and self-start

II. Learning Objectives

A. Students will have knowledge in franchising

B. Team members will have successfully articulated business related ideas

C. Students will be able to work knowledgably with business professionals

D. Team members will effectively research topic via computer

III. Audience Analysis

A. Demographics

a. franchising entreperneuers

b. ages 35-88

B. Psyschographics

a. people interested in franchising options

C. Context

a. leave audience with enough facts to know if they should pursue

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franchising as a business otion for them

IV. Messaging Goals

A. We want to leave with a positive view of Franchising and with enough

knowledge on the topic to be confident in pursuing a Franchise.

B. Using different channels to communicate the message to our audience.

a. Weebly

b. Youtube

c. Poster

V. Key Messages (Ideal Order Format):

A. Give Details of the Franchise start up process

B. Describe Investor options and contract details

a. Fees

C. Explain the Advantages and Disadvantages

D. Summarize the difference between Franchise and Self Start Business

E. Provide successful examples

a. Facts

b. Stories

VI. Channels / Media Mix

A. Graphics: such as posters, or signs.

B. Social media and Digital Communities: Digital tools for

communicating, sharing and producing content.

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C. Data: reports, dashboards and analytics tools.

D. Advertising: services that allow you to deliver messages where they

are likely to noticed by your target audience.

VII. Budget

A. $0.00

a. all resources are free- website, school databases

VIII. Tactical Plan

A. Mission, vision, and values

a. it is important to think about these elements. Encourage them to

write a mission statement, think about the ultimate destination
where they would like their business to arrive and record it as
their vision, and achieve their goals.

B.Goals

a. make your goals for a short and long term, also have your

goals clear and concise.

C. Control Book

a. this organizes all information that comes to bear a tactical plan

Difference between Franchising and Self-Start

A franchise is an already stablished business model, customers will already know about

your products which will increase your sales. By buying a franchise, you are buying a business

that is waiting for you to start. A self-start is the leading channel to expose innovate ideas and
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make them a reality. In a self-start creativity is very important. Starting up a business is typically

riskier than buying a franchise where there is an image.

Franchising is a network of a business relationship in which allows several people to

share brand identification, a successful method of doing business and a proven marketing and

distribution system. This is a strategic alliance between a group of people who have specific

relationships and responsibilities. The business relationship is a joint commitment by all

franchisees to get and keep customer. According to Bob Gappa, “to be successful in a

franchising you must understand the business and legal ramifications of your relationship with

the franchisor and all the franchisees” (Gappa, 2008). Your focus must be on working with other

franchisees and company managers to market the brand to get and keep customers.

Franchising is simply method for expanding a business and distributing goods and

services through licensing relationship. As a franchisee you own the assets of your company,

which you have chosen to invest in someone else brand and operating system, you own an asset

of your company, but you are licensed to operate someone else’s business system.

Starting a franchise there is a commitment not only of money, but also time. Before you

decide to invest in a franchise you need to do research and consider several factors; including the

rights you will be getting under the franchise agreement, the experiences of current and previous

franchisees, initial and ongoing costs, and your obligations under terms of the franchise

agreement. As Bell Wong said, ‘it is important to go through the Franchise Disclosure Document

thoroughly and ask questions if there is anything you find needs to be explained or clarify”

(Wong, 2014). Nowadays buying a franchise is not an investment to be taken lightly.

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There are some steps to take before buying a franchise according to Alfredo Edmond,

“you must get your financial house in order, consider financing alternatives, carefully study all

legal documents, become a student of the industry in which the franchise company operates, talk

to other franchise owners, and enlist family support” (Edmond, n/d). There is little doubt that the

right franchising opportunity can be profitable and satisfying for the right entrepreneur, you must

consider all the steps you have to do before buying a franchise.

Self-Start your Business

When you start your own business, you are on your own. You must think in what you are

selling, will your customers be going to like it, will you make enough money, and you must think

that the failure rate is high. A startup is a young company that is just beginning to develop; they

are usually small and initially financed and operated by a handful of founders or one individual.

These companies offer a product or a service that is not current being offered elsewhere

in the market. As Amy Fontinelle said, “startups may be funded by traditional small business

loans from banks or credit unions, by government sponsored Small Business Administration

loans from local banks or by grants from nonprofit organizations and state governments”.

(Fontinelle, 2017). Because startups don’t have much history and may have yet to turn a profit,

investing in them is considered high risk.

How to start a small business

Small business is everywhere, but not every small business is positioned for success.

According to Alyssa Gregory, “in fact about two-thirds of businesses with employees survive at

least two years, and about half survive five years”. (Gregory, 2017). You must keep in mind that
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starting a business is not easy, and you can lose, or you can earn a lot.

To start a small business it takes to follow some steps, you have to do a research, make a

plan, plan your finances, choose a business structure, pick and register your business name, get

licenses and permits, chose your accounting system, set up your business location, get your team

ready, and promote your small business. These are some of the steps you can follow to start you

own business.

Pitfalls to avoid when seeking a franchise

Every time you are going to buy a franchise or you are going to start a new business, you

have to always think about the risks you are taking, according to Alfred Edmond, “don’t assume

that franchises are risk free, don’t expect franchises companies to do everything, don’t seek

financing without developing a business plan, and don’t rush into a purchase”, (Edmond, n/d).

The more you know the better it will be before getting into business.

At one time in your life everybody has dream of having their own business and being

their own boss. According to Ashley Fox “entrepreneurship sounds exciting doesn’t it? Waking

up when you want, making your own rules, and most importantly, being your own boss. On the

outsides, it looks amazing, but behind closed doors, there is so much in the world we don’t

know”. (Fox). If you are ready to become an entrepreneur, there are some things you need to

know.

1. Don’t make financial decisions based on future income: for every investment

always make a spreadsheet that outlines all your expenses.

2. Strive for the best, but plan for the worst: be ready for things to financially fall
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apart right when you need them to be perfect.

3. Sometimes having a physical location is not always the smartest idea: working in

communal spaces often helps you to network with others, like minded individuals

who are also growing their businesses.

4. Don’t wait until you start making enough money to get an accountant: there are

many accountants that will assess fees based on the size/annual revenue of your

company.

Advantages

In every business there is going to be some advantages and disadvantages, sometimes

there can be more advantages or vice versa. According to Scott Shane, “like any business model,

franchising has its benefits and drawbacks, there is no way to know for sure whether franchising

is right for your company until you evaluate its pros and cons in the context of your operations”

(Shane, 2013). You should to always get a sense of the key advantages and advantages of a

franchising.

1. Access to better talent: the most qualified and hardest working people generally

prefer to invest in running a business in return for profits rather than taking a salary as

an employee, by franchising you are going to get better talent that will work harder to

build the business that would by hiring someone to work for you.

2. Easy expansion capital, franchising is a good way to obtain expansion capital.

Minimized growth risk, franchising can generate high financial returns for relatively

little risk, if you have a good business model; you can earn high royalties from sales

at those outlets.
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Disadvantages:

3. The percentage returns you earn can be many times what you would have earned if

you opened and ran the outlets yourself.

4. Less control over manager: you can tell franchisees what to do the way you can with

employees, franchisors make money by collecting a percentage of sales as a royalty

for letting the franchisee use their brand name and operating system. If you want to

offer customers promotional coupons, franchisees my likely object.

5. A weaker core community: it is more difficult to get franchisees as opposed to hired

store managers to work together; franchisees have an incentive to profit from each

other’s efforts to generate business.

6. Innovation challenges if you come up with a new idea, you have to negotiate with

your franchisees to get them to accept the new product or whatever innovation you

want to introduce, instead of just putting the new idea in place on your own.

Benefits of franchising

There is some benefit of franchising, as Faisal Muhammad said, “many business owners

are not too sure if assigning independent people to market and distribute their goods or services

and participate in other aspects of their business is great idea”, (Muhammad, 2017). There are

benefits of franchising that every business owner wants to achieve serious growth and

contemplates exploring the realm of franchising should consider the following.

1. Great way of capital acquisition: many entrepreneurs fail to achieve their growth

goals because they lack the resources and ability to fund them, business can grow

from the use of the resources of other parties.

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2. Committed management acquired: the franchisee has a stake in the business, therefore

they will be better and committed managers and the operational quality will no doubt

go up.

3. Rapid growth: many entrepreneurs worry that their competitors with greater resources

will beat them to the market with a similar concept. Franchising in this case is the

only way to ensure that they capture that much needed market leadership before their

competitors.

4. Increase profitability: franchising offers ease of supervision and staffing leverage, this

enables such an organization to achieve greater profitability.

5. Increased business value: rapid growth, more profitability and improve organizational

leverage contributes to improve valuations.

6. Penetration of other markets: in franchising business entrepreneurs can consider

expanding to secondary and tertiary markets, this will in the end improve the chances

of success for the franchise.

7. Low risk: franchising is a best idea for businesses that want to grow to their full

potential; all that is need is a great business idea that can generate serious profits.

Entrepreneurs that have amazing ideas can no longer just dream, but they can have an

opportunity to grow their startups beyond wildest dreams with franchising.

Contracts details

In a franchise you have to be very cautious about a contract you are signing, according to Jeff

Elgin, “owning a franchise can be a wonderful approach to achieving success in life, but it is

important to carefully consider the contract you sing when becoming a franchisee, this contract

governs the legal relationship between the franchisee and the company and includes important
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provisions for future actions if the relationship doesn’t work out” (Elgin, 2009). A contract is

like a prenuptial agreement, you better understand it before you sign it.

1. Agreement with strong franchise companies are typically non-negotiable: if there are

provisions of the franchise agreement that prompt questions or concerns ask the franchise

company to provide you with a letter or points you have any issue with.

2. A franchise company’s willingness to negotiate substantive provisions of its franchise

agreements should be a warning sign: as part of your due diligence always ask if a

franchise company is willing to negotiate the terms of the franchise contract.

3. Franchise agreements are typically unliteral in nature: when you read the contract even if

you are not an attorney you will realize it is written from the company’s perspective, one

of the main goals of the franchise agreement is to protect the franchise system as a whole.

4. The franchise agreement is full of “must-dos”: within the very first reading you will see

that the franchise contract contains a lot of rules, these rules can help you understand and

prioritize while operating your business to attain success.

5. The franchise agreement is full of “can’t-dos”: if the franchisor is going to provide you

with all of its trade secrets and operating techniques, then it doesn’t want you to operate

using its knowledge unless you are a part of its system.

Investor options

If you are interested in buying a franchise there are some financial options you

should consider, one of the most important step should be to go through your personal

finances and decide for you a reasonable amount of capital that you have available to

invest.

1. Borrowing money using debt financing: most of the people borrow money from
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banks, government sponsored bank loans, franchise system loans, home loans, or

credit cards loans.

2. Equity financing: with this you are giving a part of business to an investor or

investors for exchanges of their financing.

3. Family and friends: if your friends or family have an extra funds and they are

willing to let you borrow money you can use it as an investment.

4. Partnerships: in partnership you will share the equity of the business with another

person. It is very important to maintain a business relationship and formulate a

written operating agreement that clearly details the partner’s rights and obligations.

5. Private equity: private equity is chasing the big deal where the capital requirements

are significant, and where the business generate a very high return.

6. Limited partnership: this partnership gives investors special tax advantages, of the

business fail limited partners can lose only their original investments.

7. Leasing: leasing has many attractive qualities that can make it very good option,

although you will pay grater net amount for the leased equipment.

References
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BROWN, Everette. (2017 March/April). A Winning Franchise Choice. Black Enterprise.

Volume 47 Issue 6, p15-16.

Edmond Jr., A. (1990 September). The BE Franchise Startup Guide. Black Enterprise. Volume

21 Issue 2, p73.

Faisal, Muhammad. (2017 January). 7 Benefits of Franchising For Businesses. Retrieved from

http://www.highstuff.com/benefits-of-franchising/

Fontinelle, Amy. (2017 December) What Exactly is a Startup? Retrieved from

https://www.investopedia.com/ask/answers/12/what-is-a-startup.asp.

Fox, Ashley. (Date). Title. Location.

Gappa, Bob. (2008 October). What is Franchising? Retrieved from

https://www.franchising.com/articles/what_is_franchising.html.

Gregory, Alyssa. (2018 April). 10 Steps to Start a Small Business. Retrieved from

https://www.thebalancesmb.com/starting-a-small-business-4161641.
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SBA: Office of Advocacy. (2015 April). Demographic Characteristics of Business Owners and

Employees: 2013. Issue 6 p1-3. Retrieved from

https://www.sba.gov/sites/default/files/advocacy/Issue_Brief_6_Demographic_Characteri

stics_2013.pdf

Shane, Scott. (2013 May). The Pros and Cons of Franchising Your Business. Entrepreneur .

Retreived from https://www.entrepreneur.com/article/226489

Siebert, Mark. (2015 December). The 4 Disadvantages of Franchising. Enrtapeuner. Retreived

from https://www.entrepreneur.com/article/252592.

Winfrey, Sarah. (2007 December). The Real Deal: What to Expect When Starting Your Own

Business. Retrieved from http://www.wisebread.com/the-real-deal-what-to-expect-when-

starting-your-own-business

What to do Before Starting a Business. Business Development: Bank of Canada. Retrieved from

https://www.bdc.ca/en/articles-tools/start-buy-business/start-business/pages/first-

steps.aspx.
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Wong, Belle. (2014 December). How to Start a Franchise. Retrieved from

https://www.legalzoom.com/articles/how-to-start-a-franchise.

Final Submission Questions

Debrief- Our Communications Campaign went very well. For the most part, we were able

to collaborate well and communicate effectively. As the due dates for different assignments were

the same day, and the assignments all related to each other, it was difficult at times to know
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which assignment each of us were talking about at a specific moment. We were able to

overcome that challenge by meeting face to face via Skype and checking the descriptions of each

assignment. We all learned a lot about our topic, franchising. We would be confident in

discussing franchising options and processes with other student or business professionals.

Additional Tactical Items- While we did not add any additional items to our tactical plan,

we did elaborate on what we had started. We started our Tactical Plan with a basic outline of

what we wanted to include and accomplish with this project. Through much research and many

sources, we were able to get very detailed in our information. Everything we have included is

relevant and needed in helping someone decide if franchising a business may be an option for

them.

Additional Audience members- As we researched and learned what our audience,

prospective business owners, may need in helping them decide if franchising a business is

something they may want to do, our goal became to educate and arm them with information

tailored to that need. We included demographics and physiographic to let them see if they fall

into a category of franchise owners, something we would not have included if we were not in

tune with what our audience may want to know.

Any plan changes- We decided to cut the “successful franchise examples” out of our

project. We felt that. Though interesting, this information was not pertinent to our message.

Because different regions have different business markets, we would have had to include that

information making this section of the project way too long to fit into our 20 minute presentation

for the final submission.

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Style Guide- We created a basic outline of what we wanted to accomplish with this

project. This is, inform and educate the audience enough to help them decide if franchising a

business is an option that they may want to pursue. For formatting questions, we consulted

Purdue OWL: https://owl.english.purdue.edu/owl/resource/560/01/.

Our biggest guidelines for consistency in our group were our outline and the message we

wanted to send to our audience.