Consultant Question: You recently converted to a virtual training model. How does it compare to the old fashioned face-to-face one-on-one model?

Peter Casey’s response: Simply put, it makes much more sense to train our brokers with the live, online, virtual classroom. We deliver a better product that produces a more informed broker.

Armed with many years of experience, we knew that we needed more than 2 days to cover all the keys areas of franchise consulting, and we also know that people learn better at their own pace. I am sure that everyone can think back on a time when they were given too much information too fast-it can be overwhelming at times.

Our online training program not only delivers the information at a pace customized by each trainee, it also provides more information in a much more comfortable learning environment for our brokers-the home office or current place of business. What could be a better environment to learn in?

Our training curriculum is composed of fifteen key areas of franchise consulting. Each one of these modules is taught by a different franchising professional, so not only do you learn at your own pace, you learn from those with specific practical skills and experience in that particular area of study. The advantages of having fifteen different mentors with varied and focused attention on specific areas-teaching live classes at the pace of the trainee can’t be measured.

This approach allows our trainees to control the launching of their own franchise consulting business. They won’t leave training exhausted and with their head spinning. To me, it just makes so much more sense than forcing so much information into a small period of time and in a setting that might not be comfortable for everyone.

We did an enormous amount of research to find just the right online training tools for our Franchise Alliance Online University. We settled on the identical online training tools that are used by companies like Google, Stanford University, ADP, Boeing, and BMW, to name a few. If a tech-friendly company like Google and an “old school” University like Stanford uses the same online training tools that we use, we are very comfortable in our state of the art training platform.

So is online training smarter, better, faster, simpler, more complete, and clearly the way to go? Our answer is a solid yes. Just ask yourself this one question: “How is it possible to improve on a teaching system with fifteen successful practitioner mentors teaching me at my own learning pace in the comfort of my home office? ” We think the answer is abundantly clear!

Consultant Question: 

Can you tell us a little more about how the Franchise Alliance virtual classroom works?

Pamela Currie’s Response: 

The Franchise Alliance distance training program is modeled after and uses the same platform that is used by stalwarts such as Stanford University, Google, Boeing, ADP, and BMW to name just a few. State of the art tools that give the new Consultant every advantage and the fastest start possible.

We begin with a core curriculum that covers every aspect of franchising and every tool, script, form, and level of information needed to support that core. Then the curriculum is broken down into individual modules for easy understanding.

Each module is taught by an instructor that specializes and is an actual practitioner in the field for that aspect of training. As each team member teaches his or her specialty, the new Consultant is able to both assimilate information about the subject matter, but also build a rapport with that instructor that allows for ongoing coaching and mentoring relationships after the training is completed.

Please understand that most modules are conducted LIVE, so there is no back row of the classroom and always room for a lively give and take of ideas, questions, and answers. The classes are small, and typically scheduled a minimum of once every week with on-demand modules also offered for learning and reinforcement.

The advantages of team training are overwhelming and totally state of the art. First of all, the ability to bring multiple instructors into the classroom scene gives the trainee access to the best minds in every area of the learning experience. The modular approach also allows the trainee to learn at his or her own pace, completing training is as little as one week, or spreading it out over several weeks to meet personal needs.

Because each of our instructors is a successful practitioner in the franchise business, the training is real world versus theoretical. Flexible scheduling allows each team member to learn at their own pace, attending school without ever setting foot in a classroom.

The opportunity for face to face meetings with staff, officers, faculty and other brokers occur frequently. The Franchise Alliance team meets a minimum of three times each year in conjunction with the IFA conventions. In addition, we sponsor daily conference calls with franchise partners that allow our consultant team daily interaction.

Let’s go forward now as the best trained and supported organization in the industry!

Consultant Question: 

How has the economic downturn affected franchising and our ability to get sales financed and closed?

Don Daszkowski’s Response:

The franchise industry and particularly our segment of that industry have historically proven to be remarkably resilient and almost recession proof. Even in the midst of this worst economic climate since the Great Depression we continue to get good news.

From 2001 to 2008, franchising grew by 40 percent, according to the International Franchise Association. A report prepared by PricewaterhouseCoopers for the association showed that with the economy in a tailspin in 2008 and 2009, franchising saw only a slight decline of one-tenth of one percent. The consulting firm expects franchising to start growing again this year at around a 3 percent clip, or an increase of nearly $24 billion over 2009.

As franchise consultants we are even more impervious to the vagaries of the economy because of our unique ability to change and adapt to the current climate. Instead of finding ourselves locked in to a single product with a single price point and financing options, our Franchise Alliance team has over 300 unique franchises with unique price points and financing to offer a client.

When the marketplace changes, we as franchise consultants are able to simply adapt and change with it. A few years ago we might have been referring more clients to high end hotel, restaurant, and other bricks and mortar franchises that required extensive financing. Today we are much more likely to be showcasing the smaller, work from home, low equity franchises. We easily modify our approach to the moving economic target.

According to the International Franchise Association’s recently updated Small Business Lending Matrix and Analysis, every incremental $1 billion in lending to franchised businesses can create 40,400 jobs and $4.2 billion in economic output. No wonder the current administration has made SBA fast track loans a priority. Historical data also demonstrates that during previous economic downturns franchising has always led the economy toward recovery.

In addition to our ability to tailor our offerings to meet the needs of the marketplace, we also benefit during a downturn from the added presence of some very talented and entrepreneurial people to our client list. Former employees that have been downsized or forced to take a buyout often feel that the only real security is to own their own business, and we can help!

Now let’s get back to the business of leading the economic recovery into the next decade!

Consultant Question: 

How does the new contact management system work and how does it benefit the Affiliate?

Pamela Currie’s Response: 

The Franchise Alliance team has joined forces with the premier contact management system available today. It is a well accepted fact that 43% of the predicted success with an internet franchise lead is determined by how the lead is managed, and our goal is that the Franchise Alliance Affiliate is provided the very best technology and management tools in the world.

There are a number of CRM’s available for consultant use, but we at Franchise Alliance elected to use www.emaximation.com as it is the only system designed specifically for franchise sales. Think about that for just a moment: no more putting square pegs in round holes or trying to adapt to an imperfect lead and contact management system.

Franchise Alliance has negotiated its own platform within the EMaximation system for the exclusive use of its broker team. This allows the company to load leads from the co-op lead program directly into the user account of the Affiliate, saving the Affiliate precious time and also immediately putting the potential client into a drip marketing program.

The company has further loaded important marketing tools into the system to allow the Affiliate to send regular updates, newsletters, and general information to the client to maintain a constant contact position and stay on the client’s front page. Because each campaign is opt in-opt out the email is never treated as spam. Your message will resonate with the client.

Finally, there is the ability to access the system from any computer anywhere, with all contact information, notes, reminders, updates easily accessible to the user. Computer crashed? No problem, your data is safe and sound!

The goals are simple and attainable:

• Optimize your lead management process
• Interact effectively with qualified prospects
• Accelerate the sales cycle
• Reduce the total cost per sale

Once again the Franchise Alliance team is leading the way into improved client service. Let’s make today a record setter!

Consultant Question: 

Why doesn’t our company fight back with replies to the absurd claims and negativity put out there by some in our industry?

Don Daszkowsk’s Response: 

We have elected to ignore any and all negativity directed at our Franchise Alliance team. My concern is that dignifying any of it with a reply actually adds credibility to the attacker, much like barking back at a barking dog.

Anyway, how do you even begin to defend yourself against an anonymous critic? And for that matter why would you want to? Our reputation in this industry is spotless, we are widely acknowledged as the elite Franchise Consulting Agency, and we are the only truly full service Franchise Consultant in the US. We don’t need to apologize to anyone!

We are well known for our outstanding Bank references, CPA references, Attorney references, and Supplier references to name a few. We are a BBB Accredited business with a perfect record for as long as we have been in business. Franchise Alliance, Inc. is an International Franchise Association member as well, adding to our luster.

Now add to that impressive resume the over 350 franchise companies that have elected to work with us and share their business future and recruiting with Franchise Alliance, Inc. Imagine the collective power of over 350 of America’s finest brand names associating with the number one Franchise Consulting agency to grow their business.

My take on most criticism is that if the other guys have nothing to say about their own business model, of course they have to talk about ours! They don’t have a story to tell of their own, so instead they elect to try to tell ours. I suppose we should thank them, if only they would get the story straight!

After all, the news and TV tabloids only feature phony stories about the biggest stars! Newspaper headlines only feature industry leaders. The gossip columns aren’t writing about unknowns every day. Maybe we should just sit back and take any and all sniping as the great compliment that it actually represents!

My personal best regards for another great month!

Consultant Question: 

Why did you sell Business Alliance and open a competing concept? Was there a non-compete involved?

Dan Prechtel’s Response: 

There was never a non-compete element in that sale, either written or implied. I had actually founded Franchise Alliance, Inc. almost three years prior to selling Business Alliance, Inc. to its current ownership.

In fact, during most of 2006 and 2007 Franchise Alliance, Inc. did contract training for new Business Alliance Affiliates. It was only when we began to expand and dominate the franchise broker space that a chasm started to emerge between the companies.

The model of training franchise consultants and supporting them through the payment of an over-ride, or royalty, was an excellent business model for the 1990s when I began training brokers. We had to fight for listings, fight for web space, fight for commissions. The home office earned every penny of those royalties!

Fast forward ten years, and what had been an outstanding model began to break down. Consultants were earning deep six figure incomes and didn’t see the value of paying a royalty four, five, even ten years after they had been trained. They began working “out of network” to avoid paying over-rides on commissions.

On the other side, franchise companies were flocking to the major consulting companies, so listings weren’t a problem. With the maturation of the internet, leads were also broadly available to franchise consultants that wanted them.

The handwriting was on the wall: What had been an excellent proposition ten years ago was fast becoming a dinosaur. Although the business was a cash cow, the cow wasn’t going to live forever! My choices were easy: ride the cow until it was on life support and finally died, or move on to a sustainable model for the 21st century.

The new BAI ownership clearly understood what was happening, and purchased a cash flow that everyone knew would be finite. Bringing all commissions “in house” helped with collections of royalties, and aggressive recruiting has helped maintain the membership, but long term the outcome is very apparent.

We feel that the BAI ownership team is of high integrity and owns great management skills, and we look forward to a friendly competition and may the best concept win!

Thanks to you all for making this another record month!

Consultant Question: 

If the company doesn’t collect over-rides or royalties from our commissions, how do you make money and what is your long term interest in supporting the broker network?

Peter Casey’s Response: 

We have created a 21st century business model that allows us to make money WITH our brokers, not FROM our brokers. This model will be sustainable indefinitely and results in a win win situation for the entire team.

First, please understand that the Franchise Alliance broker network is the main engine that drives every part of our business. Without brokers, the company does not have franchise partners, advertising programs, or revenue. Simply put, supporting our brokers is priority one.

One principal revenue stream is generated from the individual web sites that the company builds, hosts, and maintains for its brokers. We operate a massive supplier pay per click ad campaign on the right margin of each one of those web sites.

Every time we add a broker to our group, we add over 800 pages of franchise specific web content to our ad campaign! Imagine the power of over 200,000 pages of franchise specific information on the web, and the advertising dollar potential from those pages. As long as the broker is successful and active, the web pages are earning money for the company. We are totally vested in the broker’s success.

A second and very key revenue stream comes from paid premium placement advertising both on our company web site and on the 35 web sites we use to generate leads for our broker team. At any given time up to 35 of the 350+ franchisors that we work with pay us a flat monthly fee to assist them with marketing their franchise company to our brokers as well as to the general public. Enhanced exposure means enhanced referrals, and in today’s competitive market franchise companies are looking for every edge and are willing to pay for that edge. The fee that they pay for this service is completely separate from the commissions that they pay our brokers, and is simply another way that we earn money with our brokers, not from them!

A final and decidedly spectacular revenue stream comes from our Franchise Partner division. Although many factors are part of a company decision to use us to launch a new concept, our successful broker network is our number one sales tool. The ability to plug into that network and sell his new franchise is what separates us from the competition and builds our partner division, further adding to our overall profitability.

It is easy to see how our profitable operation is completely dependent on the amazing synergy between the company and its broker team.

Now let’s go out today and help someone find that dream franchise!

Consultant Question:

You’ve been at this for a long time. Any thoughts of retirement, and what comes next for the company?

Dan Prechtel’s response:

As much as some of our competitors wish I would retire (and soon), this event is not imminent. I am committed to ushering the company through its current expansion program until completion in September, 2013.

That will complete the 10-year mission we embarked on in 2003 to redefine the Franchise Consulting industry. From 2013 until 2016 I will continue to serve the company as a board member and paid consultant, although majority ownership and my duties as president will have passed.

Minority shareholders Peter Casey and Don Daszkowski bring great franchise skill and experience to the company, and will over the next four years move from minority to majority ownership. Eventually, by 2013, this impressive team will have taken over the day to day managment of the Franchise Alliance.

Our business isn’t stressful, in fact it helps keep us franchise brokers excited and positive as we help others find those elusive dreams. Why ever retire? With regrets to competitors, who are fewer and fewer each year, and unless I’m hit by a bus I will be leading Franchise Alliance for the next three years, and sharing in its guidance for the next six!

We have exceeded the 275 broker mark, and will within the next year achieve our goal of dominant franchise referral company in our space. Added to our Franchise Partner division, with broker participation in ownership of new franchises, we are poised to achieve every one of our goals in less time than even our most optimistic forecasts.

Thanks to everyone on the team for helping make this dream come true! Now let’s get back to work.

Consultant Question: 

Our license fee is a little higher than at least one of our main competitors. Why is that?

Pamela Hooper’s response: 

I always get a good laugh when I’m asked this question. Our fee is a one-time cost that never has ‘add on’ or ‘enhancement’ fees nor does it increase. Once a broker is trained he has sent us the last dollar we will ever collect from him. We will make future revenuewith our broker, not from our broker!

Other broker networks collect a monthly fee to support a web site or other enhanced service. In fact, one broker network I’m familiar with has a training manager that actually sells “ongoing mentoring” as an add on to the fees. Shouldn’t that be covered in the up-front cost of the business?

Another network that purports to be an Association is in fact a for profit enterprise that has changed its membership and training fees six times in the past two years! Who knows where that one is going?

But the real hook is in those royalties the other guys just love to collect. I can’t say that I blame them, who wouldn’t want to take 10-25% of someone else’s income through eternity? It was a great business model 15 years ago but just does not hold up in today’s economy.

A moderately successful broker doing six successful referrals a year will earn a six figure income (yes, our commissions are that high!) and pay OVER $100,000 IN ROYALTIES in his first ten years in the business. Pardon me if I don’t sign into fuzzy math, but how does that make them cheaper?

I suppose you could buy a refrigerator without a door and it would be “cheaper” than the deluxe model. But if you added in the cost of keeping it cool over ten years, the so called savings would evaporate pretty quickly. Let’s face the facts here folks, the best deal by far is the top of the line Franchise Alliance model.

There is an old cliché floating around, and as much as I don’t want to sound trite, the simple truth is that you get what you pay for. In our case, much more than you pay for including over 350 franchise partners; the most in the industry!

Now let’s get busy and make 2011 another record breaking year!

Consultant Question: 

How does the Franchise Alliance co-op lead program work to benefit the entire Affiliate team?

Peter Casey’s response: 

The beauty of our lead program is that is managed by our Franchise Alliance team internally. What that means to the program is quite simply that we can completely control the quality and source of leads, as well as the price. There is no profit or administration fee added to the lead cost that would be necessary if we outsourced this important function.

Generating the internet lead is an important first step in the franchise sales process. The International Franchise Association tells us that 74% of all franchise sales last year began with an internet inquiry. Our ability to successfully mine that important resource for our Affiliates is an important key to the overall success of the company.

Our lead program is quite simple. It operates as a true co-op, meaning it is of the brokers and for the brokers, and has never been nor will ever be a profit center for our company. The program allows our team to pool resources which reduces the cost per lead and also eliminates any duplication. A lead is given to one broker.

We have 35 web sites generating these leads for our team and we could double the volume if demand was there. Our leads are further filtered for a physical address, and each respondent must also produce a valid 10-digit telephone number and email address. More required fields equals better quality leads.

The quality of the leads we produce is unmatched in the industry. They are cost competitive, delivered in a timely manner, answered with a personalized high tech auto responder, and filtered for duplicates. That is as good as it gets!

Now let’s get busy and respond to some of these great leads and help another client find that dream!