FRANCHISE IRELAND

WINTER 2004

(The online newsletter of the Irish Franchise Association, 30 Tolka Valley Business Park, Ballyboggan Road, Dublin 11. Tel 01 4991091.
Chairman - John Green. CEO - Michael Bradley. www.irishfranchiseassociation.com)

CHAIRMAN'S MESSAGE - from John Green
Welcome to the winter edition of our newsletter. It is published primarily for members of the Irish Franchise Association (IrFranA) but also to help raise the profile of Franchising as a means of developing an existing business or starting your own business as a Franchisee. The IrFranA Committee has been busy since our summer '04 edition and the following is a summary of our main activities: -

Our revamped website (www.irishfranchiseassociation.com) was launched in September to very favourable reaction from members and visitors alike. Many improvements and new features have been incorporated, including a colourful, lively banner; a directory of members containing a brief profile on each and a link to their own websites; an upcoming events section that flags exhibitions, seminars and workshops; an information page containing the latest (2004) survey on franchising in Ireland, along with lots of other useful advice and guidance on the industry; and a news section where current and previous issues of this newsletter, Franchise Ireland, can be found.

Regional seminars/mini-exhibitions were held in Ashbourne - with Meath County Enterprise Board - Athlone - with WESTBIC, Roscommon, Athlone Chamber of Commerce and Westmeath County Enterprise Board - and Ballymena. In addition to IrFranA speakers the Franchises represented included Snap Printing, Mail Boxes Etc, ChemDry, Cartridge World, Action International, Inside Business and Computer Troubleshooters.
Dublin - Seminars for potential Franchisors and Franchisees will be held alongside the Franchise Exhibition at the RDS, Ballsbridge, Dublin this weekend, 19th and 20th November. See our website for details.
We plan to hold seminars in various locations in 2005 and details of these will be posted on our website as they arise.

IrFranA membership continues to grow and we would encourage more ethical Franchisors to join us. This can be done online. Please see the membership section on our website for details.
Just a reminder that the findings of the latest Franchising in Ireland Survey 2004 are available on our website. They confirm that the Franchise sector continues to show exceptional growth.

The inaugural Irish Franchise Awards 2004 were held at the Burlington Hotel, Ballsbridge on 19 October and were attended by Ireland's leading Franchisors. The Awards recognise success and achievement in the Franchise sector, and will become an annual event. Mr Micheal Martin, TD, Minister for Enterprise, Trade and Employment, presented the Awards.
We congratulate the following winners: -
Retail Franchise of the Year - O'BRIENS IRISH SANDWICH BARS
Service Franchise of the Year - SNAP PRINTING
Retail Franchisee of the Year - DENIS BOWE, SLIDEROBES, Portlaoise
Service Franchisee of the Year - PEADAR SMYTH, FOUR STAR PIZZA, Bray
Best Emerging Franchise - LEMONGRASS RESTAURANTS
Franchise Person of the Year - RAY COWZER, The bagel Bar

The Irish Franchise Exhibition will be held at the RDS, Ballsbridge, Dublin on this weekend, 19/20 November, with over forty Franchises on display. Seminars on all aspects of Franchising will run on both days. Fuller details are on our website. I hope to welcome you to the Irish Franchise Association stand.

We welcomed the first U.S.A. Franchise Trade Mission To Ireland in early October (fuller details below). At a reception hosted by Bank of Ireland, Business Banking, held at the House of Lords, College Green, the U.S. Ambassador to Ireland, His Excellency Mr James C. Kenny presented a Certificate Of Appreciation For Achievement In Trade, on behalf of the U.S. Department Of Commerce, to the Irish Franchise Association, for creating opportunity through trade between the United States and Ireland.

We are drawing up a workplan for 2005 which will be designed to enhance the position of Franchising in the Irish economy, benefiting the potential Franchisor and Franchisee. This will include meetings with Government and Semi-State organisations, and broaden our range of promotional activities.

Thank you for your continued support, and may I be the first to wish you a Happy Christmas and prosperous 2005,

JOHN GREEN
Chairman
Irish Franchise Association
P.S. Email to join our Newsletter mailing list

New Member - We welcome Computer Troubleshooters

Founded in Australia, Computer Troubleshooters is a unique computer service franchise specialising in helping home, home office and small businesses with all their onsite computer-related needs: software/hardware troubleshooting, upgrades, repair, consulting, anti-virus/spy ware, networking, made-to-order new & refurbished systems, maintenance and training services.

They have opened their fourth outlet in Dublin 12 under the management of John Finnerty who has many years of technical and business experience and is a Microsoft Certified Systems Engineer (MCSE) and a Cisco Certified Network Associate.

Computer Troubleshooters Ireland plans to open 12 additional locations in the Republic and Northern Ireland over the next three years and is seeking potential franchisees in all parts of Ireland, both North and South.

Contact: Enda Folan, 091-867888, 086-8108118; email: efolan@comptroub.com
Or visit the company's web site, www.comptroub.ie

CLASSIC MARKETING MESS-UPS:

Thinking of exporting your product into foreign markets? The following branding disasters show how important it is to hire local marketing staff when launching abroad.

Clairol introduced the "Mist Stick", a curling iron, into Germany only to find out that "mist" is slang for manure. Not too many people had use for the "manure stick".
When Gerber started selling baby food in Africa, they used the same packaging as in the US, with a Caucasian baby on the label. Later they learned that in Africa, companies routinely put pictures on the label of what's inside, since most people can't read.
Coors put its slogan "Turn it loose", into Spanish where it was read as "Suffer from diarrhoea".
Scandinavian vacuum manufacturer Electrolux used the following campaign: Nothing sucks like an Electrolux.
Colgate introduced a toothpaste in France called Cue, the name of a notorious porno magazine.
An American T-shirt maker in Miami printed shirts for the Spanish market which promoted the Pope's visit. Instead of "I saw the Pope" (el papa), the shirts read, "I saw the potato" (la papa).
Pepsi's "Come alive with the Pepsi Generation" translated into Chinese as "Pepsi brings your ancestors back from the grave".
Frank Perdue's chicken slogan "It takes a strong man to make a tender chicken" was translated into Spanish as "It takes an aroused man to make a chicken affectionate".

(To be continued...)

News from The U.S. Commercial Service
First-ever American Franchise Trade Mission to Ireland is a Success.

The U.S. Commercial Service, U.S. Embassy Dublin, in conjunction with the International Franchise Association, hosted a Franchise Trade Mission in Dublin in early October. Eight American franchisers met with over 70 prospective franchisees and master licensees that have already resulted in the signing of one master license agreement. As the franchisers follow up with the contacts made, it is expected that several more agreements will be signed over the coming months.

The U.S. Commercial Service would like to thank the Irish Franchise Association, Bank of Ireland, Franchise Direct, PricewaterhouseCoopers and Beauchamps Solicitors for their support of this event.

Anyone interested in learning more about the American franchises that are interested in entering the Irish market should visit www.buyusa.gov/ireland or contact Finola Cunningham directly at 01-667-4753.

THE BANE OF OUR LIVES - CUSTOMERS

(Part One of a two-part article by Bill Holohan, Solicitor, Bill Holohan & Associates, Dublin and Cork)

It is an oft repeated cry of the busy Solicitor, and is also no doubt the oft repeated cry of Franchisors / Franchisees, that "it would be great if we did not have to deal with the clients / customers". While this is sometimes said in a jovial fashion, underneath it, there is a grain of truth. On the one hand, customers sometimes seem to be an impediment to getting the job done, but let us never forget that our customers / clients are the very reason for our continued existence. Indeed, they are perhaps our greatest asset. If one were to talk to one's Franchisor, no doubt the Franchisor would say that the great facet in the Franchise is the "system" i.e. the system controls and operational procedures that govern every aspect of the business. But is this necessarily so?

It is sometimes said that Franchisors have a perception that Franchisees expect to be spoon-fed the customers rather than having to go out and earn them. On the other side, it is sometimes said that Franchisees for their part expect the Franchisor to conduct national advertising and secure, where appropriate, national accounts. Both will believe that they are faithfully operating the Franchise system. Very few Franchise Agreements that I have reviewed, (which naturally will concentrate on the legal aspects of the relationship between the parties), ever mention or refer to the fact that it is important that every Franchisee would develop, maintain and nurture the customer base.

Regardless of what one's business is, whether one is a Solicitor or a Franchisee, on an ongoing basis we need to find, and then retain more customers. Every year, a certain percentage of our customers will defect to our competitors, (as do our workforce). In those circumstances, it is no wonder that at times, difficulties can arise in actually trying to operate.

How do we get clients or customers? The answer is very straightforward. You do not get customers, you earn them. How many Franchisors / Franchisees would operate a system whereby they would reward employees who bring them business, or is it simply assumed that that is a given responsibility of the employee. In my particular business, if somebody introduces a customer, then they get a bonus based on the fees earned. How many Franchises operate on the basis of rewarding staff for introducing new customers? If somebody was employed in a sales role where remuneration is directly tied to sales turnover, then that is easily understood, but what about a back office person providing support. Why should they not get a "commission" on introducing new business? Think about it. How much does it cost you in advertising to find a new customer? Then ask yourself a few more questions in order to discover how much each customer is actually worth to you.

Firstly, how much does each customer pay each time they use your service or buy your products? Secondly, how often did they request a service or how often did they buy. Thirdly, how long would they continue to buy? You then take a calculation based on average spend, say €250.00, the frequency with which they buy, say every three months, and a loyalty period of say 5 years, that gives you €5,000.00. How much would you be willing to pay to retain that customer rather than constantly having to try and find a new one?

On a regular basis, (given my known affiliation to the Franchise industry), I am contacted by newspapers asking me to advertise in their "special" feature on Franchising, assuring me that the €500.00 / €1,000.00 / €1,500.00 ("special offer"), which they are offering me, would be money well spent. My standard response to them is that I have a very conservative advertising policy, particularly having regard to the Law Society Regulations of Solicitors advertising. This usually stops them in their tracks because they have little or no idea what the Law Society Regulations in Advertising actually provide, they thank me for my time and off they go. However, the reality is that I do not see a value in such advertisements. That is just me. I advertise in the Golden Pages, and on very rare occasions, such as when something is being promoted by the Franchise Association, I will support it with an advertisement. However I have worked out the figures for myself.

In general, clients come to me because of recommendations from other clients. This would be by word of mouth. In short, people find me - I do not find them! Is that true of your business? Do people need you more than you need them or do you need them more than they need you?

Take the example of Solicitors. Every year, there is a 5% increase in the number of Solicitors qualifying i.e. a 5% increase in the number of service providers. This is inevitably going to result in increased competition. One then has to ask oneself: "is this the way to stay ahead of the posse, i.e. to continually advertise?" Personally, I am not convinced. However, when it comes to servicing equipment of one kind or another, selling food stuffs of one kind or another or providing services of one kind or another, through a Franchise system, one has to consider the competition and how one can stay ahead of them. While some may say that I manage to attract new clients on an ongoing basis despite my masterly marketing inactivity, it is in fact on foot of a positive policy of planned inactivity, if I am to use that term. However I am conscious, as any person in business must be, that you cannot simply look forward to comfortable anticipation to new clients / customers. You have to try and grab your customers away from your competition. Remember, the customer is not always right and in fact, sometimes the customer is wrong.

The customer may be wrong because they are wrong for us. They may take too much effort to service and maintain, may only buy in small quantities or not often enough. The right customer is the one who will spend the most in the least time and who comes back on an ongoing basis. Very often we tend to devote too much time and resources to trying to please the disgruntled client who will, at the end of the day, fight about, (in our case fees), i.e. price. You have probably heard the expression before, but remember the 80/20 rule, i.e. that you probably get 80% of your revenue from 20% of your clients / customers and 20% of your revenue from 80% of your clients / customers. Who then is the more valuable? Who then gets more of your time and attention?

(Part two of this article will be published in the next edition of Franchise Ireland, early 2005)