Page 110 - Business Plans that Work A Guide for Small Business

Marketing Plan: Reaching the Customer • 101

A table showing
Franchises will also need to contribute 7 percent of their how Lazybones stacks up
on these metrics versus
monthly revenue to Lazybones corporate. This contribution competition would be very
is slightly above the industry average of 5.5 percent, but, compelling. It should also be
again, we believe we are offering more benefits to in materials they present to
these customers.
compensate. Specifically, we are confident franchisees can
make larger net margins with Lazybones than with most
other franchises. For instance, dry cleaners and Laundromats
average net margins between 3 and 6 percent, while
Lazybones has historically achieved 15–20 percent.
Asking for a 1.5 percent larger contribution in exchange for a three- to fivefold
improvement in net margins is a very fair exchange.

Franchise fee = higher
than average
Exhibit 4.3: Franchising Pricing Table Royalty = higher than
average
Ad fee = lower than
Franchise fee $35,000 average
Royalty rate 7% of revenues
Advertising rate 1% of revenues
Franchisees will also need to contribute 1 percent of their monthly revenue
into a national advertising fund. This goes into a fund that is jointly managed by
headquarters and a council of franchisees, and used for nationwide advertising.
This is a standard approach in the franchising industry.

Communications
We have had numerous franchise requests over the last
10 years, despite neither advertising this opportunity Integrating the
nor being ready to provide it. Nearly all of these requests franchising advertising into
material the firm already
came from parent customers. Therefore, the first place produces is a cost-effective
we will look for potential franchisees is from this pool means of getting your mes-
sage out. It is basically free.
of people already familiar with us.
We will integrate the franchise message with our current
marketing materials nationwide, adding summary information
about franchising opportunities to the mailers we send out
to parents each year. We will also place mentions of our
There is a cost to
franchising business on every package of laundry we deliver, SEO. A table summarizing
all these efforts and their
the packaging for everything we ship or store, and the associated costs powerfully
invoices sent to our customers. communicates the Lazy-
bones strategy and leads
Besides aggressively marketing franchises to the parents to more accurate financial
and students who are our customers, we will also projections.
implement a thorough online marketing campaign. A link
from our main Web page will connect to an extensive Web
site devoted to franchising. We will do extensive search
engine optimization (SEO) so that this Web site appears