How can a franchisee owner reverse declining sales?
•Download as PPT, PDF•
2 likes•454 views
This document outlines a case study about declining sales at the Firehouse Subs franchise sandwich shop. It discusses the chain's history and expansion over 16 years to over 400 locations across 21 states. In 2008, the recession caused unexpected declining system-wide sales. Management is considering three options to reverse this: 1) Continue existing local marketing by franchisees; 2) Discount sandwich prices; 3) Launch a new marketing campaign. The document analyzes advantages and disadvantages of each option. It recommends option 3, launching a new marketing campaign advised by an experienced advertising company, as it has proved successful for other chains. It suggests Firehouse Subs' unique selling proposition should focus on its reputation for quality ingredients and special firefighting-themed
Recommended
More Related Content
What's hot
What's hot (20)
Similar to How can a franchisee owner reverse declining sales?
Similar to How can a franchisee owner reverse declining sales? (20)
Recently uploaded
Recently uploaded (20)
How can a franchisee owner reverse declining sales?
- 1. Small & Medium business management Instructor: Sopheavy Ty Student: Tran Thanh Thuy 24th of September, 2015
- 2. Case Study 10 How can the owners of a franchise reverse decling sales??
- 3. Outline of the case About Firehouse Subs • A chain of submarine sandwich shops • More than 400 locations • 21 States Robin and Chris Sorenson
- 4. Outline of the case
- 5. Time Spent Achievements Open the first restaurant Open the first restaurant Expand to 300 locations in 17 states Expand to 300 locations in 17 states Developing process of the Firehouse Subs Grow to 30 restaurants & begin selling franchises to expand business Grow to 30 restaurants & begin selling franchises to expand business 1994 2001 Early 2008 Outline of the case
- 6. Outline of the case Facing unexpected declining sales throughout its system caused by the recession in March 2008
- 7. Management’s Discussion Eliminate the 2% local advertising fee and allow franchisees to do their own marketing Why the sales decline even worsen?
- 9. Management narrows the Puzzle to three options
- 10. Discussion Advantages franchisees gain when they buy franchises ? Disadvantages they experience?
- 11. Advantages franchisees gain when they buy franchises ? Gaining access to a successful business system with strong brand name recognition Low range of investment ($200k - $425k) Standardized Quality of Food National Advertising Program Extensive Training Program
- 12. Disadvantages they experience? Franchise Fees ($20K) and On-going Royalties (a royalty of 6% of sales & a 3% advertising fee) Limited Freedom Domino effect of sales declining in a recession
- 13. Discussion Develop a list of Advantages & Disadvantages for each of the three options the managers are considering
- 14. Continue the existing local marketing by franchiseesContinue the existing local marketing by franchisees AdvantagesAdvantages DisadvantagesDisadvantages Reduce fees for franchisees Reduce fees for franchisees Franchisees have their own freedom and authority to create and try new marketing programs Franchisees have their own freedom and authority to create and try new marketing programs Inconsistency among franchise owners Inconsistency among franchise owners Negative impact on the brand from poor management of some Franchisees Negative impact on the brand from poor management of some Franchisees Waste of time and money Waste of time and money
- 15. Discount sandwich pricesDiscount sandwich prices AdvantagesAdvantages DisadvantagesDisadvantages Attract low-income customers improve sale declining Attract low-income customers improve sale declining Increase competition ability Increase competition ability Narrow the already thin profit margins decrease profit Narrow the already thin profit margins decrease profit In danger of damaging the reputation for ingredient quality In danger of damaging the reputation for ingredient quality
- 16. Launch a new marketing campaignLaunch a new marketing campaign You should spend more on advertising per store and collect higher royalties and advertising fees (double to 4%) You should spend more on advertising per store and collect higher royalties and advertising fees (double to 4%) Like Subway and Quiznos did Like Subway and Quiznos did Experienced advertising companyFirehouse Manager
- 17. Launch a new marketing campaignLaunch a new marketing campaign AdvantagesAdvantages DisadvantagesDisadvantages Advises of an experienced advertising company Advises of an experienced advertising company Proved by other sandwich chains Proved by other sandwich chains Increase in advertising expenses Increase in advertising expenses Additional pressure for franchisees to their existing struggles with lower sales and profits Additional pressure for franchisees to their existing struggles with lower sales and profits
- 18. Discussion Make recommendations to Firehouse Subs managers using one of three options. Explain.
- 19. Create a new marketing campaign Proved by other sandwich stores Objective and greater vision of the advertising expert Better outcomes than Option 1 (continue current marketing) and Option 2 (discount)
- 20. Discussion What should Firehouse Subs’ Unique selling Proposition (USP) be? What new key points if the managers decide to launch a new marketing campaign ?
- 21. USP and the key points Reputation of quality ingredients that Firehouse Subs has been using throughout 16 years Special service style by featuring firefighting theme
- 22. Questions?
- 23. Thank you for your attention
Editor's Notes
- This template can be used as a starter file for presenting training materials in a group setting. Sections Sections can help to organize your slides or facilitate collaboration between multiple authors. On the Home tab under Slides, click Section, and then click Add Section. Notes Use the Notes pane for delivery notes or to provide additional details for the audience. You can see these notes in Presenter View during your presentation. Keep in mind the font size (important for accessibility, visibility, videotaping, and online production) Coordinated colors Pay particular attention to the graphs, charts, and text boxes. Consider that attendees will print in black and white or grayscale. Run a test print to make sure your colors work when printed in pure black and white and grayscale. Graphics, tables, and graphs Keep it simple: If possible, use consistent, non-distracting styles and colors. Label all graphs and tables.
- Give a brief overview of the presentation. Describe the major focus of the presentation and why it is important. Introduce each of the major topics. To provide a road map for the audience, you can repeat this Overview slide throughout the presentation, highlighting the particular topic you will discuss next.
- This is another option for
- Use a section header for each of the topics, so there is a clear transition to the audience.
- Use a section header for each of the topics, so there is a clear transition to the audience.
- Use a section header for each of the topics, so there is a clear transition to the audience.
- Use a section header for each of the topics, so there is a clear transition to the audience.
- Use a section header for each of the topics, so there is a clear transition to the audience.
- USP (unique selling proposition) is the competition advantage expressed in an advertising message, telling a key customer benefit or a product or service that sets it apart from its competition;
- Is your presentation as crisp as possible? Consider moving extra content to the appendix. Use appendix slides to store content that you might want to refer to during the Question slide or that may be useful for attendees to investigate deeper in the future.