7 Ways to Help a Franchisee Succeed

My friend Edwin and I met up last night to have a chat and visit a nearby Royale Business Club franchise. But when we arrived at the place, the cart was no longer there and in place a pawnshop was being constructed. We don't know what happened to it, it could have moved somewhere else but it really got me thinking about the possibility of losing a business.

I know this possibility is something very real in people's minds. I get asked quite a lot how much risk these franchises pose and if they are sure investments.

While I could not think of any surefire, fail-proof businesses, there are some things we can do to help small businesses take root and survive the first critical months. Some of these come from my experience, some come from business books I've read.

Here are some I would like to share to you.

1. Conduct a Survey
Before we started our laundry/dry cleaning business, my wife Charm made a simple questionnaire about customer preferences regarding laundry. I was surprised by the results but found out later on that they were indeed true. This simple questionnaire could be done for any small business. You can ask your target market if they would consider purchasing your product for the prices the franchisor has set. If you are considering food, you can ask your customers what time of the day they eat your product or if they eat it at all. This survey would give some supporting data on whether your hunch is correct. If you don't have any hunches, you should definitely conduct a survey.

2.Spread the Word
If your business has started, it's not enough to just operate it. You have to spread the word, tell people you exist. I remember the time when we walked house to house, knocking on doors to give away flyers, telling the people we exist. We chatted with potential customers and 80% of them tried us out. Another time, we hired students to hand out flyers for us, this time only about 2% responded. Try streamers, samples, stickers and other affordable marketing strategies to get people to know you. A good book that really helps in this type of marketing is Guerilla Marketing by Jay Conrad Levinson.

3. Deliver
Customers, especially us Pinoys love convenience. It's surprising to note that when you eat in the US or even Hong Kong fast food restos, you are expected to clean up your waste and throw it in the wastebasket. But not here. Here, we got guys cleaning up after us (isn't that cool?). Even if it's just a food cart, delivering the food to offices during lunch can be an effective idea. It expands your market and it beats your competitors who don't deliver.

4. Minimize Expenses
When starting out a new business, cash flow is very important. You can be profitable but still not make it because your cash is not returned (flowed) back fast enough for you to pay for your expenses. This is why cash flow protection is vital. To help you with this, you need to protect your cash vigilantly by minimizing expenses. Just like day to day spending, expenses can really pile up fast in a small business. It's important to separate personal spending from business expense so the business can be sustained by it's own profit and cash flow.

5. (Repeat) Customer is King
Hire someone who can chat with customers well. There is greater chance of success if your customers return for repeat business. And every business is a relationship-based business, even food. I think one of the reasons why Country Chicken is one of the best-selling cart in the RBC main office is Ate Bing, the saleslady. For me, she has one of the best attitudes among those in charge of the carts and she makes a lot of friends who buy from her constantly.

6. Act and React
Once the business is set up, continue making observations about your customers, location and competitors. The more you understand, the better your can fine tune your operations. If your location is not the best, maybe you can request for a transfer to a better place. If a competitor sets up nearby, here is where your customer service should come handy. Contrary to popular opinion, a business is a living, breathing entity and sometimes we need to constantly change the situation for it to succeed.

7. Treat it like a Child
My wife and I constantly refer to our first business, Suds, as our first 'child'. No kidding, it gave us lots of sleepless nights and challenges just like changing nappies for Eli, my son. But it has now reached a point where we could leave it for some time without thinking about it too much. I remember a friend who asked me how to set up a laundry shop and I asked him back who's going to take care of it. His reply was "Gusto ko, remote control lang". Ouch. I told him to forget about it. I don't think any rookie entrepreneur should ever leave his business at the control of others, it's a potential recipe for disaster. Be hands on at least until you get the hang of it. That way, you'll know if something fishy is going on when you leave it. You'll also get to know the biz like a person. And you'll know when it's demanding growth already. Someday, all the hard work will pay off and the business will take care of you.

Good Day!

News and Updates

Jan 15, 2008
JC Fran featured in Jan-Feb issue of Entrepreneur magazine
One of Royale Business Club's franchisors, JC Fran Corp, was featured in the latest issue of Entrepreneur magazine. The article outlines JC Fran's philosophy of quality which resulted to a growth of 50 carts nationwide in just 20 months.







Jan 22, 2008
Royale VP Mar Mapala Interviewed in One Morning Show


Jan 27, 2008
Royale VP Mar Mapala and Franchisors (Galaxy Burger, TinyVille and First Blend Corp) appear in channel 4's The Young Once show.


Jan 28, 2008
Royale Business Club International Inc. to be featured today on IBC 13's 430PM news.


Feb 5, 2008
Product Centers to open in Dasmarinas (March 08) and Davao (June 08)! - It was announced in the Leaders' Meeting last Jan 31, 2008. The Dasma Product Center will be located either at Dasmarinas Highway or at Robinson's Pala-pala. Stay tuned!

Strategy Session - Become a Stockist

Stockists versus Franchising

I have been asked may times which is a better option, becoming a stockist or becoming a franchisee. Before I understood the incentives, I thought that they should have been pretty even.
But given the incentives now, I would have to say becoming a stockist would give you better odds at better income.

For those not familiar with the term, a stockist is basically a Royale member who pays an additional 50T and gets 50T worth of Royale products. The stockists have bigger discounts than regular members and can thus sell to regular members for a profit. They can also sell to non-members.

For example: Royale sells the L-GlutaPower product for P1400 to non-members, P700 to members and P560 to Stockists.

Stockists have a number of advantages over regular franchisees:

1. They are mobile - they are not tied to a single location.
2. They require lower capital - only 50T to become a stockist.
3. They have a captured market in the form of Royale members in their area.
4. Most importantly, becoming a stockist increases your chance to partake in the profit sharing.

The Profit Sharing Program

Please make sure you read the incentives blog before you proceed. You can read it here.

First off: Please understand that each time you buy Royale in-house products, you get points. For example for L-GlutaPower, you get 275 points for the regular bottle and 375 for the L-GlutaPower700.

In order to be part of the Royale profit sharing program (PSP) requires two things:

1. You should consistently purchase products to maintain points on a monthly basis.
AND
2.You should have 2 direct referrals that also maintain a certain level of points monthly.


Let's tackle the first condition first: You should consistently purchase products to maintain points on a monthly basis.

If you read and understood the incentives article, you will find that maintaining the required number of monthly points could be pretty hard if you just use it for personal consumption. For example, for the lowest level (PSP level 1), you are required to maintain 3500 points/month. That translates to purchasing around 13 bottles of L-GlutaPower per month or around 10 bottles of L-GlutaPower700/ month. Unless you are a 'gluta junkie', you can never consume that much.

Here is where stockists have an advantage. They buy more products from Royale (and thus have more points) because they sell the products. 13 bottles of gluta for a stockist is very achievable.

Now for the second condition: You should have 2 direct referrals that also maintain a certain level of points monthly.

At first glance, this looks hard because you now have to make sure two other people are 'gluta junkies' otherwise you don't meet the profit sharing conditions!

Don't worry, I have talked to some friends and I learned that there are certain techniques you can use to achieve this. Here are some of them:

Tips and Techniques

1. Cultivate a circle of sellers and ask your direct referrals to do the same. - Here's how it goes. Say you talk to Inday, Tata, Baby, your neighbors who are not Royale members and who might not have enough money to become members themselves. Tell them you will give them discounts on Royale products. Your goal is to cultivate distributors. You sell them the products cheaper than the Standard Retail Price so that they can sell it to others. You buy more products, you get more points. Teach your direct referral to do the same.

2. Become a stockist, cultivate a circle of sellers and get a triple head - This concept is basically the same as above. The difference is that by becoming a stockist, you have a bigger discount and thus have a higher profit margin. Also, instead of depending on your other direct referrals to maintain points, you make your other 2 heads your direct referrals and distribute points to them for maintenance.

For example: Pedro is a stockist and has a triple head. His 1st head buys products enough for 6500 points per month. He assigns the 3500 points to the 1st head and gives 1500 points each to his other heads. Voila! Now you dont have to depend on your other direct referrals to maintain points. You have the control.

Another Tip: If you buy products worth 10,000 points this month. You can opt to use just a certain number of points for this month and 'reserve' the remaining points for the next months.

More Tips

1. Tap doctors and their networks. Some doctors actually prescribe glutathione to some patients.

2. Contact friends who are active in direct selling companies such as Avon, Natasha, Dakki etc. They might be willing to sell the products for you for the profit. They get some of the money, you get the points. Example: You sell L-Gluta for just P850 instead of P1400. They think it's a deal. You make P150 (for regular members) but get the complete points.

3. Supply to pharmacies. Our products are BFAD Food Registered and could be displayed and sold in pharmacies.

4. Tap the OFW market, especially Filipinos in Japan and HongKong. I heard they are avid consumers of our products.

As with other business opportunities, you have to act fast. The faster you establish your 'sellers circle' the better. Remember: your profit sharing depends on the number of months you consistently maintain your points. If you break your maintenance just for 1 month, your hard work will be erased.

If you are interested in this business scheme, contact me for more details. I'll be glad to help.

Good luck and God bless!

Royale's 2008 Incentives

Royale introduced a lot of incentives for 2008. From just local travels to Tagaytay and Subic last 2007, we now have local and international travel, a chance to purchase a new car or house and profit sharing. The incentives were also designed so that new members could compete with old members (unlike the questionable category of just “top earners” before).

Disclaimer: This is not meant to explain all (too much details). Please visit the Royale Office or get in touch with me for more details.

There are 4 main incentives:

The Profit Sharing Program

International and Local Travel

Special Incentive Program

2008 End of Year Raffle

Some clarifications/ definitions before we start:

Personal Points – when you buy Royale Wellness and Beauty products, you get points. See catalogue for corresponding points for each product.

Network Points – You also earn a percentage of the points from the consumption of the people in your network.

Group Points – Sum of member’s personal and network points.

Corpo Accounts – Accounts with more than one person as an owner. Example: Phoenix Corpo is owned by 9 of our Phoenix leaders.

I’ll start with the simplest program

I. 2008 End of Year Raffle

What Can I Win?

i. Grand Prize - 50% down payment on a brand new Honda Civic

ii. 1^st Prize – 30% down payment on a brand new Innova

iii. 2^nd Prize – 20% down payment on a brand new Avanza

iv. 3^rd Price – a brand new Nokia Communicator

b. How do I Qualify? – Get raffle tickets if you become or sponsor/ refer a new member (2008 new accounts only), buy a franchise, buy 1000 worth of Royale products, become or sponsor a mobile stockist or product center (you get lots of tickets if you sponsor or become a product center owner).

II. Special Incentive Program

What Can I Win?

i. Level 1 – P200,000 towards the purchase of a new car or house and lot

ii. Level 2 – P300,000 towards the purchase of a new car or house and lot

How do I Qualify?

i. Level 1 – Have 350 Pairs in your Binary Network in 365 days after you join (new, 2008 accounts only).

ii. Level 2 – Have 700 Pairs in your Binary Network 2 years after you join (new, 2008 accounts only)

iii. If you reached level 1 and level 2, you only get P100T once you reach level 2.

Did you Know? – You actually have 2 networks working for you in Royale? One is your Binary ‘pairing’ network. The other, less famous one is your Unilevel Network. But I doubt it’s going to stay ‘less famous’ for long. Watch out for my article about your existing (yes, it is already existing) Unilevel network and how to take advantage of it.

III. International and Local Travel Incentive

a. Local Travel (Jan 01 to June 30, 2008 period)

Where do I Get to Go? – Either Palawan, Boracay or Bohol.

How do I Qualify?

1. Be a Top 10 Earner – Only personal, no corpo accounts are eligible. Must have at least 6 direct referrals. Must have 9000 personal points within the period.

2. Be a Top 10 Direct Referrer – No corpo accounts. Must have at least 30 Direct Referrals for the period. Must have at least P100T income within the period. Must have 9000 personal points within the period.

b. International Travel

Where do I Get to Go? – If Royale meets the 80M income mark (which we are on target for), we will be going to either Hawaii, Australia (on a tour that includes the Great Barrier Reef), Dubai (on a Safari), or 3 European countries.

How do I Qualify?

1. Be a Top 10 Earner for the Year – No corpo accounts. Must have 12 direct referrals, must have 18,000 personal points for the year.

2. Be a Top 3 Rookie of the Year – no corpo accounts, must be a new member joining in 2008, must have at least 12 direct referrals, must have at least 250T income and have 18,000 personal points for the calendar year. (Kayang kaya niyo to)

3. Top 3 Mobile Stockist/ Product Center – must have 1M of products purchased, must have 18,000 personal points,

4. Top 3 Unilevel Earners

5. Top 1 in Personal Sales for Royale In-house products

IV. Royale Profit Sharing Program – In a nutshell, it is a profit sharing program for people who consistently push Royale’s product through personal consumption or through selling to others.

Note: This program actually use formulas which I will conveniently leave out. But please make sure you get the details if you are interested.

What Do I Get? – you get to share 10% of Royale’s NET income with the other members who qualified for the profit sharing.

How Much are We Talking About? – Royale’s Net Income last year was at least 50M according to our president. I’m pretty sure this year will be bigger, but assuming it’s the same, we are talking about 5M divided by a few people.

How do I Qualify? – There are 3 levels of qualifications. Level 3 will have the highest income among the 3.

i. Level 1 – Maintain 3500 personal points/ month. Have 2 direct referrals who maintain 1500 points/ month.

ii. Level 2 – Gets 2x as much group points as a level 1. Maintain 5,000 personal points/ month. Has 2 direct referrals who are level 1s or has 4 direct referrals who maintain 1500 points/ month.

iii. Level 3 – Gets 3x as much group points compared to a level 1. Maintains 10,000 personal points/ month. Has 2 direct referrals who are level 2s. Or has 4 direct referrals who are level 1s. Or has 8 direct referrals who maintain 1500 points/ month.

Ano daw Yun? – Nakakalito ba? Ok, let’s backtrack. In summary, you have to be a consistent Royale product purchaser and must have direct referrals who are the same (consistent Royale product purchasers). You and your direct referrals must maintain certain monthly product points.

i. Case 1 – What if you meet the monthly product points but do not have direct referrals who meet the criteria? Answer: Sorry, you don’t qualify.

ii. Case 2 – What if you are a Level 2 and have direct referrals who are level 3’s? Answer: That’s good for you, you get a level 2 profit share. But if this happens to you, you should plan to be a level 3 to increase your share.

iii. Case 3 – What if you and your referrals consistently maintain points from Jan – Mar, did not meet the criteria Apr – June and then came back and met the criteria from July to December? Answer: Since one of the key criterion is you have to be CONSISTENT, once you drop off a single month, your record gets wiped off. But since in this case, since you were consistent again from July to December, you get 6/12 prorated profit sharing.

Royale Business Options Basics

Royale's a good stepping stone for new businessmen

If you are new to Royale or is an old member but hasn't really explored what it offers, this blog is for you.

Most Royale Business Presentations focus on either the franchising aspects or the networking aspects. But there are really 3 main business options you can go into in the business club. These are: Franchising, Direct Selling and Networking.

Franchising

The Good - For people who really want to go into business but are not yet sure how business systems work together, franchising is the way to go. It's like a Business 101 practicum. You learn the basics of Operations, Margins, Accounting, Being a Boss. It also introduces you to the world of selling - softly.

The Not so Good - Franchisees usually leave the Marketing to the Franchisor which is really a waste of opportunity. Marketing is an essential aspect of business and is something you definitely have control over even if it is just small-scale. For seasoned entrepreneurs, franchising sometimes pose a challenge since you don't have all the control you need.

How to make it work - As with most businesses, location is essential. This is why Royale's franchisors' offer for a site-locator service is very useful in my opinion. Aside from a good location, it would really help if you do some form of marketing on your own such as go house to house to introduce your business locally. You can also expand your market by delivering to your neighborhood.

Direct Selling

The Good - The best part I see for a direct selling business is that you set your own limit. I have met people who earn 6-digit net incomes from direct selling. It also introduces you, sometimes harshly, to the wonderful world of Selling. Here, you cannot hide behind your office or cart while letting the brand or your employee sell for you, you do the selling yourself - which is a good thing by the way. If you want to go into business, you have to learn to sell.

The Not so Good - Direct sellers are usually go-getters but most do not see how business systems tie up together. Since you can succeed with a one-man team (yourself), it does not present a multi-faceted challenge of running an operation, marketing, managing staff and taking care of your brand.

How to make it work - Use the leverage of other people's time (OPT). You can form a team to sell for you, if you give away part of your profit. You earn less but offset this by selling more with less effort. It also pays to know your product very well and not just repeat what other people tell you.

Networking

The Good - Among the 3 businesses, network marketing offers the biggest income potential due to the fact that it heavily employs leverage. Once you take the time to build a network, income generated from your network base can become a good source of passive income later on. It also allows you to earn big money with little capital and also teaches you to sell.

The Not so Good - Networking is viewed with a stigma, which is really sad since it drives people away from a business that they could build big with little money. Also, the sweat equity you need to build a network could be substantial. It's not a surprise that only people who have learned to handle rejection can succeed in this type of business.

How to make it work - Develop your mental toughness and learn to handle rejection. Just like building a traditional business, you can employ systems in the people business to help make it grow. Train, train and train some more, most of us initially have very little skills to succeed in this business right away. It may look simple, but it actually isn't, just ask the millions out there who claim they got 'burnt' by this sort of business.

You can choose to do just one type of business or you can combine two or all three. Just don't spread yourself too thin. Remember: What you focus on expands. It's much better to focus on one than to do all and succeed in none, right?

In the next topics, I'll thresh out some details on what you can do for each business type to enhance your chances of succeeding.

Lastly, don't be afraid to fail. I read a quote before saying that failure is not success' enemy, rather one is necessary for the other. Do you agree?

Til next time!