New Multi-Brand Firms Make Big Showing at the 2008 Franchise Expo

WASHINGTON, D.C. (Blue MauMau) - The 17th annual International Franchise Expo wound up its three-day show in Washington, D.C. on Sunday, April 13. The show is touted as the world's largest exhibit of franchise concepts. Last year's show attracted more than 13,200 visitors, who came largely from the D.C. area to see the 350 franchise exhibits.

CEOs attending company exhibits and expert speakers commented to this journal on how this year continued a trend of lighter traffic. But they also added that attendees looking for franchises seemed to know a lot more about franchising this year.

According to Joel Goldstein, Group Marketing Director for the show's organizer, MFV expositions, this year's IFE had 10,929 attendees, visiting some 329 exhibitors.

Ron Berger, Chief Executive Officer of Figaro's Italian Pizza, was manning his company booth. He said of the show, "For our booth, attendance seemed lighter than in previous years, but the quality of prospects was excellent, including a number with significant prior franchising experience."

With over a thousand participants being international visitors, there was considerable interest at the expo of showcasing international opportunities. The Department of Commerce works with the organizers of the International Franchise Expo to help bring in international delegates to the D.C. show to buy American franchise concepts. There were some 85 international delegates this year.

Carl Zwisler, a well-known international franchise attorney for Haynes and Boone, LLP, lead a seminar on international master franchising, one of the many seminars to assist visitors in learning to negotiate a franchise buy. Zwisler observed of the show, "Attendance was down." But he continued, "My [international] audience was more sophisticated. They were people involved in franchising as master franchisees, as franchisors, as private equity companies from other parts of the world, who were looking to expand through master franchising or to buy into it. It was interesting to see the growing sophistication of people who are involved in the business. I was impressed."

But one master franchise candidate from Japan, a country that has the second largest number of franchise owners in the world, told our journal that he was disappointed by the quality of the franchise exhibitors, their lack of any sophisticated understanding and their inability to address his needs in Japan. He left the show empty-handed.

Exhibitors often were medium sized and some were newer franchise concepts. McDonald's, Burger King, Wendy's, Blockbuster and others have other ways of recruiting potential franchise owners and were not to be seen at the IFE.

Mr. Sunil Dewan is an advisor to the Franchising Association of India that exhibited at the expo, and has led such U.S. franchise businesses as Jenny Craig and Metro Media Restaurants. He disagreed with the experiences of the Japanese buyer.

Dewan estimated that the show had new, old and large international concepts. “There are new and established big franchisors exhibiting, and everything in between. NexCen is exhibiting, which has a portfolio of concepts such as Marble Slab, Maggie Moo and The Athlete's Foot. On the first day of the show, we had a seminar in which a panel discussion on India was given, introducing franchisors and potential franchise buyers to the Indian market."

Dewan observes that traffic was good for the India delegation. "The recent presidential debates on television spoke about India and China,” Dewan observes. “So the media has done a good job of speaking generally about India and how large the market is becoming. This was our second year of exhibiting, with this year being much better in attracting visitors and interest in the Indian franchise market.”

Large franchising companies with a portfolio of new brands were more numerous and had very prominent positions in the show this year.

There was NexCen, a private equity firm out of New York City that in the past two years has been purchasing a range of franchise concepts such as The Athlete's Foot, Marble Slab and Maggie Moo's. Raving Brands, with their concepts of Shane's Rib Shack, Monkey Joe's and others, also had a large, prominent display at the front of the Expo. And The United Franchise Group (see photo) says it now has nearly a hundred different concepts for buyers to purchase.

Mr. John Hayes, CEO of HomeVestors, a real estate franchisor, and a frequent speaker at one of the show's seminars on buying a new franchise, observes, "I think this IFE was perhaps the best in the history of the IFE in terms of the quality and interests of the prospects who showed up."

Hayes continues, "Ten years ago at least half of the people who sat in my symposium were there because they had lost their job and half of them intended to buy a franchise that sold food. Nowadays, few are there because they've been downsized and few, about 1 in 20 this year, said they will buy a franchise that sells food. There was great interest this year, as there has been for several years, in service-related businesses, especially business-to-business and child/elder care franchises. I thought this year's expo was well attended even though there didn't appear to be as many international visitors. However, there were more people from the states and from a wider geographic market. I was particularly impressed this year by the quality of the students. They're not in a rush. They do not have to buy a franchise because they need a job. They are not nearly as fearful about franchising and they are willing to invest the time to make a good decision."