Franchise Owner Profile (02:36)
Prior to opening the Zuka Juice stores Jason Madsen owned and operated an architectural design/construction management firm. He was impressed when he met the owner of Zuka Juice at age 21.
Importance of Franchise Research (02:54)
Jason Madsen, interested in Zuka Juice's franchise, could not get sales figures from the company, so he hired friends and relatives to camp out at all locations and count cups for 1 week. Madsen came up with an accurate estimate of the company's sales figures.
Regional Analysis for Potential Franchisee (01:37)
For franchise owner Jason Madsen, the Colorado Springs area had a healthy and sustainable growth rate. He also considered incomes, retail setting, trade areas,
Getting Started in a Franchise (02:22)
Franchise owner Jason Madsen describes the steps to setting up his Zuka Juice business. He used $155,000 to get the business up and running.
When Disaster Strikes (01:48)
A blizzard struck Colorado Springs ten days after Jason Madsen opened his new franchise. Without sufficient operating capital, the business would have died. He explains what needed to happen in the first store before he could open a second and third store.
Franchise Management (02:36)
Franchise owner Jason Madsen describes the long, hard work necessary to open and manage two new stores in a month's time. A franchise cannot be a hobby. Madsen stresses that the people who work in the franchise are the strength of the business.
Corporate Acquisition (02:17)
Jason Madsen learned how to build sales in his franchise in innovative ways. He had an unusual amount of autonomy for a franchise owner. Jamba Juice owners made a financially motivated decision to acquire Zuka Juice.
Transition to New Brand Name (02:23)
When the brand name Zuka Juice changed to Jamba Juice, franchise owner Jason Madsen was part of the transition team. No one knew exactly what effect the change in brand name would have on the franchise owners. Sales dropped 50% almost immediately.
Review of Franchise Start-Up (02:07)
Tom Duening reviews what franchise owner Jason Madsen talked about in the first part of the program. Topics include customers, hard work, management, exit strategy, and more.
Important Personal Qualities (01:53)
Franchise owner Jason Madsen discusses some of the personal qualities a franchise owner needs to cultivate. These include a realistic view of what it takes to run a franchise, the impact on personal lifestyle, and more.
Franchise Disclosure Document (03:57)
The Uniform Offering Circular is the Franchise Disclosure Document provided by franchisors. Information in the document includes stipulations, prequalifications, and more.
Potential Franchisee: What To Look For (03:02)
The most important step a potential franchisee can take is to talk with other franchise holders. Find out if these business owners would do it again now that they have hindsight. See if they will disclose their financials. Hire legal experts to look over documents.
Franchise Fees (01:47)
Franchise fees are non-negotiable. On top of this fee is a 2-5% marketing fee. Right off the top of sales income, the franchise owner loses about 7% in royalties to the company, so total fees can be as high as 12%.
Corporate Support for Franchisee (02:25)
What do franchisees get for their fees? Corporate requires potential franchisees to go through training.
Franchise Marketing (03:37)
Franchise owner Jason Madsen describes how he created market exposure for Zuka Juice. The product sold itself, but to get new customers, he engaged in a massive free sample campaign. After giving out over 20,000 samples, Madsen's business exploded.
Branding a Product (02:28)
After Zuka Juice became Jamba Juice, a franchise owner's energetic marketing campaign drove the brand identity. People liked the product and linked the brand with it. The story associated with a brand is critical for successful marketing.
Promotion Tracking (01:44)
When a business tries different promotional campaigns, tracking the results is essential to learning what works best to bring in customers and sales. Promotions include coupons, buy one get one free, and more.
Bosses Who Do It All (01:08)
Franchise owners must know every aspect of the business. Employee allegiance builds when the boss rolls up his or her sleeves and does the tasks he or she expects of the staff.
Trade Areas (01:52)
Each trade area needs its own target marketing. From his downtown location for Zuka Juice, Jason Madsen built up loyal customers who took the brand into the suburbs where they lived. When stores opened in the suburbs, there was instant recognition and big sales.
Soft Opening (01:50)
Franchise owner Jason Madsen discusses the necessity for a soft opening of a new store. The staff needs to learn to deal with a normal flow of customers before they can take care of mobs of customers.
Core Customers (01:57)
A franchise owner must know the core customer base. That is the base to focus effort and dollars to. Jason Madsen describes his core customer base.
Challenge of Hiring and Managing People (05:05)
During peak hours, Jason Madsen's Zuka Juice store might have 12 team members working and up to 40 employees altogether. Madsen discusses how he hires people and gives advice that other franchisees can benefit from.
Training for New Hires (02:47)
To train new employers, Jason Madsen puts new hires through dry runs. New hires would learn about the equipment, food storage areas, and more. Everyone learns to do every job. During the training period, Madsen looks for leaders to emerge.
Components of Soft Opening (01:18)
Key components to a soft opening at a Zuka Juice store include putting the best, most gregarious new hires in the front where they meet and greet customers. The franchisor provides support in materials, recipes, and more.
New Hire Training in Multiple Locations (00:60)
Jason Madsen discusses how it is possible to train new hires that will be working in 3 different stores. New staff benefit from working with a fully trained team.
Motivation/Positive Environment (02:00)
Franchise owner Jason Madsen uses the word "climate" to motivate workers to be part of something positive and rewarding. Madsen builds in positive reinforcement and incentives. Managers receive incentives such as insurance plans.
Human Resources Issues (01:41)
With three stores open, how much time does Jason Madsen spend with Human Resources issues? Madsen says it is 30%. Madsen found it necessary to hire a general manager to free his time to work on market strategy.
Importance of General Managers (01:37)
People with general manager potential are experienced in the industry, they know what the demands of all the jobs are, they understand scheduling and uncertainty, and they must be willing to live the lifestyle of the restaurant world.
Training a General Manager (01:29)
Franchise owner Jason Madsen allows his general managers a three-month probationary period during which Madsen used a variety of metrics to evaluate the person's performance.
Physical Equipment for Franchise (01:38)
The true value of a franchise is that the franchisor has already worked through kitchen layout, equipment needs, and more. The franchisee gets a nearly turn-key package to open the business.
Franchise Locations (00:48)
Finding and deciding on a franchise site is accomplished between the franchisee and the franchisor. The latter has certain minimal requirements for a location that must be met. Corporate listens carefully to franchisee's input on location.
Financing Business Growth (01:50)
Jason Madsen needed additional funds to open two more stores. He used SBA because of their good rates and services. He went through what he calls a favorable experience all around for his businesses.
Exit Strategy (03:40)
As a franchise owner, Jason Madsen learned to maximize the value of his businesses. In preparing to sell, he consulted with experts. In this case, a buyer approached Madsen, and they put the deal together, using Madsen's experience and industry experts.
Personal Costs (02:39)
To build a successful franchise, the first year is critically important. Franchise owners must be willing to work long hours, and to spend a great deal of time away from family or other interests. These sacrifices can have huge paybacks in the ensuing years.
Summary of Entrepreneur's Advice (03:47)
Host Tom Duening reviews the key points of Jason Madsen's interview on starting up a franchise business.
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