Article

Planet Smoothie embarks on franchise tour

Companies get creative to woo new operators as franchise sales flatten.

April 7, 2009 by Valerie Killifer — senior editor, NetWorld Alliance

On March 31 Planet Smoothie announced a new plan to generate franchise interest in the brand with what the chain is touting as Franchise U.

The program will launch in Tallahassee, Fla., and will offer educational sessions geared toward potential franchisees. The sessions will cover the principles of successful franchising – from identifying cult brands to understanding regional vs. national brands to building a winning team – in an effort to ease potential franchisees' concerns over the franchise market.

"Franchise U is really more about educating prospective franchisees about franchising, not just about Planet Smoothie," said Tanya Mareno, Planet Smoothie's vice president of franchise sales and development. "Our goal is to build a very solid foundation internally and right now, looking at the industry and the market, candidates tend to be a bit more scared."

The sessions also will cover the lending process and real estate market to help ease any fears attendees may have about going into the franchise business.

Franchise U will hit eight select markets in the Southeast throughout the course of 2009 before heading along the Northeast region. Cities scheduled for the tour's first leg include Atlanta and the Florida areas of Tampa, Fort Lauderdale, West Palm Beach, Miami, Jacksonville and Fort Myers.

"Our core, strong franchise base is in the Southeast and those are the areas that surround our strong base," Mareno said. "We're just working around those markets and building from there."

Recent studies have shown less than 2 percent franchise growth across the restaurant industry in 2009.

An industry issue

According to the International Franchise Association's 2009 Franchised Business Economic Outlook report, quick-service restaurant franchises are expected to grow 1.5 percent in 2009, a 0.4 percent increase over 2008 numbers. Additionally, casual-dining restaurant franchises are expected to grow 1.3 percent, a 0.2 percent increase over 2008.

Alisa Harrison, vice president of communications and marketing for the IFA, said the numbers reflect a lack of credit funding and not a lack of franchise interest.

"I don't think the interest is decreasing in franchising, what's hampering it is available credit and access to capital," Harrison said. "People have great prospects, but now a lot of those applications are being denied because banks aren't lending. It's the No 1 issue across the board."

Historically, franchise growth has been on the rise across all business segments, she said. And to retain franchise interest, a lot of companies are getting back to their core brand values.

"Some of the things (companies) are really trying to do is demonstrate the value of their brand," Harrison said. "In this environment, when you have high-quality prospects, you have to make sure you've got your value proposition down-tied and you have to show why your brand is a good investment during an uncertain economic time."

To further drum up interest in a Planet Smoothie franchise, the company is offering a grand prize giveaway of a $25,000 franchise fee discount to anyone attending Franchise U who submits a franchise application. Eight first prize winners also will receive a $5,000 discount.

Port City Java also announced in early March a program that will waive royalty fees for franchisees.

The "No Royalty" promotion is designed to stimulate franchise investment throughout the Carolinas. According to the promotion, anyone who enters a franchise agreement with Port City Java in 2009 will pay no royalties until 2011.