The current year poses challenges most printers haven't seen for a long time—and some have never seen. But as the franchise companies stand behind their franchisees with strong support, we expect that most will weather the storm and come out stronger on the other side.
Observations from Franchise Leaders
By Joe Kerns
To view PDF version of Composting the Numbers, click here.
Every year, we offer the franchise leaders an opportunity to share their views and observations about their systems and the franchise segment, in general. The following is their commentary.
Franchise Services, Richard Lowe, President & COO
I'm inspired to write you a brief note about our franchise network. My inspiration comes from conversations I've had with franchisees across the country on their experiences in these very unique and difficult times. Although there are owners who experienced growth in 2008 and are doing the same as we start 2009, the greater majority of franchise owners are looking at declines simply not experienced before.
I'm impressed by the decisive actions they've taken to trim/cut costs, resulting in more work with longer hours for them. They've gone through the personal pain of laying off employees; some had been with them a long time and were almost like family. Many of them have evaluated and taken action on all of their operating expenses. They've also had to aggressively pursue their accounts receivables, as some customers became very slow payers as their businesses began to suffer. I know that many of them worry about cash flow. All the while, most of them are absorbing our new marketing services strategy and are beginning to implement it.
What I am in awe of is their attitude. There is simply no quit in any of them. They "keep on keeping on." Many of them tell me they have been through recessions before, albeit not quite this severe. They know they'll come out of this leaner and meaner than before, and they'll be better positioned with more efficient employees and operations to capitalize on opportunities as the economy improves. On every center visit, I see where they've recognized the importance of leadership, as that same positive attitude is reflected in the actions and attitudes of their employees.
Everyone I talk to is fully aware of the harsh reality of the challenges we face today. The alternative is closer to the door than some are comfortable with. However, failure is not an option! Every day is about the plan: To manage costs, to talk to customers about new services and how to grow their businesses, to visit with prospects on how to grow their businesses, and of course, to offer world class customer service and quality. And then, we get up the next morning with the same mission: It is about the plan. A key element to that daily plan is to prospect, and prospect, and prospect. We must be cautious to not sacrifice tomorrow to save today. We can't just cut costs to stay profitable. We must always look at ways to grow our business through customer acquisition. And, we must not fall into the all too familiar trap of trying to grow business through lower prices.
I know from experience it is not always easy to keep the leadership battery fully charged. There are so many things in just the daily operations that drain our energies, not to speak of visioning and preparing for the future. If our operations and employees truly mirror the attitude and energy we reflect, then there is not a choice. We must "keep on keeping on." If their battery needs a bit of a charge, they don't hesitate to call on their corporate support team. Our daily plan remains the same: To help them to succeed.
ICED, Bob Metzger, Vice Chairman
As was the case with most small businesses, 2008 proved to be quite challenging for our owners in many ways, particularly in the third and fourth quarter.
While average sales per center indicate an increase during 2008, it was due in large part to the termination of centers that were unable to achieve a profitable performance level and could no longer sustain their business. In some cases, decisions were made not to renew their franchise agreements for similar reasons. Subsequently, by eliminating these centers from our system, it had a positive affect on the remaining centers in terms of an increase in average annual sales.