Franchising Can Be Much Riskier Than Some Believe

Dispelling some myths

 

bermanevansretail's avatarRetailing: From A to Z

About a year ago, we wrote about the questionable nature of the 90% success rate for franchisees (a figure promulgated by the industry).
Now, two recent Wall Street Journal articles raise even more questions about the viability of a franchised business from the vantage point of the franchisee.
In the first article (“Is Buying a Franchise Riskier Than Ever?”), Sarah E. Needleman notes that:
“Franchising has never been a more popular option — or, perhaps, a bigger risk. Over the past few years, people have been flocking to franchising, seeing it as a simpler path to entrepreneurship in troubled economic times. But over that same period, numerous pitfalls have appeared that make franchising much tougher to navigate, say many franchise attorneys and advocacy groups. For one, they say, it’s gotten much more complicated for buyers to get an accurate picture of a franchise before taking the plunge. And, they…

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Posted in Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 5: Managing a Retail Business | Tagged , , , , | 1 Comment

The Effects of Employee Behavior and Attitudes

Many retailers, such  as Costco, provide a positive, reinforcing work environment for their employees. Many other retailers [we’ll leave these uncited] have allowed an environment to exist that leads to some disgruntled employees — who then may rub off on others. As a rule: Happy employees lead to happy customers, while disgruntled employees many inhibit the customers’ shopping experience.
In two articles, Doug Fleener (president and managing partner of Dynamic Experience Group, a retail consulting firm) discusses the effects of these opposing dynamics:
In his article about happier employees, Fleener says:
“Let me ask, have you ever received amazingly good service from an unhappy waitperson? Probably not. Ever been WOW’d by a bored salesperson? I doubt it. That’s why the environment you create for your employees directly impacts the customer experience, the employee experience and, ultimately, store results. You’re not going to have happy customers unless you first have happy employees.”
He provides six tips for gaining happier employees.
In his article about negative employees, Fleener says:
“I suspect we can all agree that positive people have a positive impact on customers and results. So why aren’t we also assuming that employees with a negative attitude will have a negative impact on customers and results? I have a client whose business was on a roll this summer, and then all of sudden took a dive. At first she thought it was traffic or the local economy, but as she poked around she discovered that one of her employees was very negative when the boss wasn’t in the store. The owner made a change, hiring a positive, upbeat person in place of the negative person. Sales went up over 30%. A negative employee was killing her business. Not hurting it. Killing it!”
He suggests how to handle negative employees.

 

Posted in Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 5: Managing a Retail Business, Part 7: Communicating with the Customer | Tagged , , , , , , , | 2 Comments

Vending Machines Are Smart, Too

Smartphones represent just one of the intelligent technologies available to consumers. Smarter-and-smarter vending machine technology is also enhancing the shopping experience.
As Fresh INFOS reports:
“Today, a lot of manufacturer companies are testing out new and improved vending machines with touch screen controls, gesture based technologies and even cashless payment methods. ‘Did you know that smart vending machines can interpret facial gestures, and can tell if you need a can of coke or a sandwich based on your expression, gender and age? The vending machine of the future will be able to view its audience and tailor make choices based on demographic. It is projected that there will be 2 million smart vending machines installed by 2016, so the future of vending technology will be infinitely different.'”
Take a look at this infographic from Westways Vending.

 

 

Posted in Part 3: Targeting Customers and Gathering Information, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer, Technology in Retailing | Tagged , , , , , , , , , | 1 Comment