INNOVATIVEIDEAS THAT

BREAK THE MOLD

THE PANEL

• Moderator: Evan Hackel, CFEPresident, Ingage Consulting

• Panelists:– Corey DeNicola, CEO, Mainstream Fashions Franchising

– Geoff Goodman, President, Orange Leaf Frozen Yogurt

– Luke Stanton, COO, ProTradeNet (Dwyer Group)

– Eric Bernstein, President, ProSource Wholesale Floorcoverings

QUESTIONS

THE CHALLENGEWhat is the challenge or issue that confronted your system?

THOUGHT PROCESSHow did your system think through the goal of solving the problem?

THE SOLUTIONWhat changes did you ultimately decide to implement? Why? How?

EVALUATIONWas the solution ultimately successful? Were your goals met?

KEY TAKEAWAYS

Breaking the Mold by:

getting franchisees involved in

the solution

breaking through the

noise

not being afraid of going

back to the drawing board

expanding your vision

Corey DeNicolaCEO, Mainstream Fashions Franchising

THE CHALLENGE

TEAMWORK MENTORING COMMUNITY

THOUGHT PROCESS

THE TEAMHOME OFFICE STAFF

• Franchise Support• Marketing• Operations

FRANCHISE ADVISORYCOUNCIL

IDEAS

Regional Groups

Networking Group by number of units

Mentoring Program

Networking GroupsBy sales volume

Monthly meetings with all franchisees

THE SOLUTION:REGIONAL NETWORKING GROUPS

SET REGIONS ANDRECRUITED LEADERS

TRAINING FOR THE GROUP LEADERS

LAUNCHED AT THEANNUAL CONVENTION

THE SOLUTION:REGIONAL NETWORKING GROUPS

Typical RNG meeting agenda:– Goal report (from goal set at their previous meeting)– Discussion topic– On the floor (one person shares problem, others brainstorm

solutions)– For next meeting:

• Agree on the discussion topic• Decide who will be “on the floor”• Set goal to achieve by next meeting

EVALUATION

TEAMWORK MENTORING

COMMUNITY

SUCCESS

COMMUNICATION

Geoff GoodmanPresident, Orange Leaf Frozen Yogurt

THE CHALLENGE

THOUGHT PROCESS

Internal Culture Definition

External Brand Communication

THE SOLUTION

Live the Mission of “Being Remarkable”• Be Noticeably or conspicuously different,

worthy of notice or attention• Bring marketing to the front line operations• Activate the voice of the system

“Advertising is the tax you pay for being unremarkable.”

-Robert Stephens, The Geek Squad

THE SOLUTION:REMARKABLE ENGAGEMENT

BREAKTHROUGH THE CLUTTER

“SHARE WORTHY”CONTENT

LEVERAGE TECHNOLOGY

AMPLIFY MESSAGE

THE SOLUTION:ORANGE UNICORN “SPOKESTHINGIE”

THE SOLUTION:INTERACTIVE AUGMENTED REALITY

EVALUATION:ORANGE UNICORN AR APP UPDATE

• 9,764 visits to the Orange Unicorn page in one month

• 867 visits to the Orange Unicorn AR page

• Orange Unicorn has been downloaded 1,149 in 30 days

• Average time spent on Orange Unicorn AR app is 3:36

• 3,860 minutes of occupied time that Mom or Dad gets to take a time-out!

PROJECT “FLYING ORANGE UNICORN”

EVALUATION:PROJECT “FLYING ORANGE UNICORN”

• 398 Total Press Mentions

• 206,406,549 Total Reach

• $407,681.78 Total Publicity Value

Luke StantonCOO, ProTradeNet

THE CHALLENGE

PURCHASING DECENTRALIZED

VENDOR LISTS IN EXCEL NO UNIFIED BUYING RELATIONSHIPS

NO AGREEMENTS INEFFICIENT

THOUGHT PROCESS

EXPERIMENT FAIL FORWARD IMPROVE

THE SOLUTION: SYSTEMS AND PROCESSES

ONLINE PLATFORM STAFFING SYSTEMS AND PROCESSES

AUTOMATION OF REBATES

EVALUATION

EVALUATION:VENDORS ARE HAPPY

BETTER SPONSORSHIPS STRATEGIC ENGAGEMENT SALES GROWTH

EVALUATION: FRANCHISEES ARE HAPPY

SAVINGS & REBATES TIME SAVINGS SINGLE SOURCE OF INFORMATION

EVALUATION: FRANCHISOR &TRADING PARTNERS ARE HAPPY

PROFIT CENTER ADDS VALUE TO EXISTING & NEW FRANCHISEES, &

TRADING PARTNERS

NEW UNIT SALES ENCOURAGES LOYALTY

Eric BernsteinPresident, ProSource Wholesale Floorcoverings

THE CHALLENGE

• Established & unique

• 125,000 active trade pros

• Spend < 1% on marketing

• 6X year purchase cycle

• Low cost & high touch

• Relationships = $1.4M year

Our Model

We’re in a location you can’t find

and a business you’ve never seen

advertised…

THE CHALLENGE

• The $26B Industry with 18,000 Independents

THE CHALLENGE

• A moment of truthSYSTEM SALES

THE CHALLENGE

Will the industry return us to…

Per unit sales of $3.5M?

Per unit profitability of 3.2%?

THOUGHT PROCESS:THE REARVIEW MIRROR IN 2016

Stay the Course

• Industry < $18B

• Independents < 12,000

• Industry Growth Rate; 2.0%

Innovate; New Category

• Existing customers; 45% purchased

• New Customers; 32%

• Customer Annual Sales; +3.7X

Avg. SR Sales

$4.7M

+10% CAGR

Avg. SR Sales

$3.7M

+5% CAGR

THE SOLUTION

Help ProSourceshowrooms increase

sales, profit and cash flow

Leverage current• SR floor space

• Trade-Pro customer base

• Sales staff

Projected Annual Sales• $700K - $1M

Projected Annual net profit• $66K - $120K

THE SOLUTION:INVESTMENT

Franchisee

• $75,000; buildout &

display

• $55,000; annual staffing

• 800-1,200 Sq. Ft.

• 4 month buildout

Franchisor

• $2.0M dev., pilot & Op.

funding

• $2.8M Financing support

• Staffing Infrastructure

• Supplier Agreements

THE SOLUTION:TURMOIL, ROADBLOCKS, CHALLENGES

Pilot Philosophy; System Sales, Profitability & Scalability

Franchise Agreement; BOD & Advisory Council

Selling Space; my lease is up for renewal

Risk Adversity; I’m making enough (or not enough) $$$

New vendors; you’re irritating our existing dealer network

Existing vendors; you’re removing what?

THE SOLUTION

THE SOLUTION

EVALUATIONSystem Sales (in M)

$300

$350

$400

$450

$500

$550

$600

$650

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016

$1,083,000

$812,000

$667,000

$593,000

$446,000

Year 5

Year 4

Year 3

Year 2

Year 1

Avg. SR Cabinet Sales

Flooring Sales Cabinet Sales

KEY TAKEAWAYS

Breaking the Mold by:

getting franchisees involved in

the solution

breaking through the

noise

not being afraid of going

back to the drawing board

expanding your vision

INNOVATIVEIDEAS THAT

BREAK THE MOLD