Franchise Opportunity - Guides for Choosing The Franchise

The 10 Best Opportunities For Starting A Home Business Today

2009-02-26T06:12:00.000-08:00

The 10 Best Opportunities For Starting A Home Business Today Careers Center Guide will show you: * how to get started with little capital *how to start on a part-time basis *common problems and pitfalls to avoid *tips on using a home computer to your best advantage *often-overlooked opportunities you should investigate * the pros and cons of home business franchises.

Continue Readings...

How To Become Prosperous And Stay That Way (Part 2)

2008-12-15T04:18:00.000-08:00

By Dale Mazurek

This is part two in my prosperity articles. This series is making out to be a long one but if people are getting any good advice out of it then it is worth it. For the most part affiliate marketing is how I put these into practice but they can be used no matter how your financial marketing works. I hope you will come back frequently to look at my newly published articles and I would hope you would tell you friends about them.

1. Believe In Yourself Or Forget It

Believing in you in my opinion is the most important part in becoming and staying prosperous. Believing in your self is going to determine how well you do in life. I don’t care what it is if you truly believe that you can do it than you will succeed. It took me a long time to believe I could be successful at affiliate marketing. However now that I started believing in myself things have never looked better for me. Other people will make decisions about you on how confident you seem. If you are trying to sell something and you don’t really believe in yourself then trust me your potential customer is going to read that on you and they will be gone.

2. How Does Believing In Yourself Work
The first thing you’re going to notice is that you walk with pride in your stride. Your confidence levels are going to rise to heights that you didn’t even know existed. Your understanding of things is going to become much clearer therefore making you more capable of dealing with them. So the more you understand the more prosperous you will be.

So if you believe in yourself you will be able to go to someone and ask them for something in confidence. And if the belief is strong enough you will probably get what you are looking for.

It has always baffled me as to how not believing can affect people so negatively. My cousin showed me her poetry that she has been writing for about twenty years. To be honest it is some of the best work I have ever read and I read a lot. When I asked her why she isn’t getting it published she told me that she wasn’t good enough. This is a prime example of someone losing out on lots of income because she doesn’t believe in herself.
To make things worse the non believers always think they have to handle all aspects on their own. I know my cousin is a good enough poet to get published but she is so worried about all the other aspects of getting her poems published that it stands in her way. You have to know that there are other people out there to help you along the way. So as long as you believe in what you’re doing other people will help you keep those beliefs alive.

So don’t hold back on something that will succeed because you’re not sure of how to do it. There are people who are paid to put your business in place and make sure it works. So stop looking at the cup as half empty and start believing that you can become prosperous.

Okay this is the end of my second excerpt on how to become prosperous and stay that way. In the following weeks I will continue on with this series. It is important to follow the series. You can print each edition if you want because remember once it is done it won’t be available for long because as I submit these I am working on an eBook that will be going for sale.

Thanks,
Dale Mazurek

Dale is a professional affiliate marketer who has come from getting scammed throughout the years to becoming very successful at what he does. You can see his program at http://stcajo.netsalaries.com He has also started two interactive blogs that can be viewed at http://relationshiptidbits.blogspot.com/ or http://fishingtutor.blogspot.com/

Article Source: http://EzineArticles.com/?expert=Dale_Mazurek

Keep Your Income Secure

2008-12-15T04:16:00.002-08:00

By Randolph Wells

If your a newbie to internet marketing, you probably use PayPal© to process your sales. This is a smart and profitable move since PayPal© is one of the most secure and reliable payment processors. Even if you use someone else you can run into trouble and it's not the processor's fault.

Your Sales page and/or Order page will probably have your payment processors button or link to take your customer to their secure server. Once there they pay with their account or credit card. The secure server sends them back to your Thank You page. It works as smooth as silk. That is, if they get back to your page.

Browsers have the ability to allow you, or anyone for that matter, to "View Source" code on any given html page. You can even view php pages although they are a little more confusing.

What does that mean to you? It means that your Sales pages, with the "hidden" information regarding the payment process, are exposed. EXPOSED! So what, you say? Big problem, I say!

What's to keep your less that honorable customer from viewing your source and then looking up the path to your Thank You page? If they know the URL of your Thank You page, they can download your product for free. You've just been taken!

How do we protect ourselves? You can make sure you make the information as secure as possible on the payment processor's end. They can encrypt the process to a point. But, is that enough? It's not!

There are encryption services available. You can buy software to encrypt your payment processor buttons and links. None of it is free. But it can be reasonable.

I've found a site that will encrypt any information you want to put up on the web for a nominal one-time fee. I know, I'm into FREEBIES for you guys, but some things are worth paying for!

Go here: Encrypt you Site or Your Sensitive Information Take a look and see how it works. They explain the process very well. Once you pay the small fee, you can use the service as many times as you want. It's a lifetime subscription. Just don't forget your password. It's terribly long but very secure.

If you have problems keeping up with all your logins and passwords, I recommend Roboform or Pins. You can Google Roboform. I've used both. I'm currently using PINS. Its Open Source Freeware. You can find it at http://www.mirekw.com/winfreeware/pins.html. Password management programs really help, especially when sites don't allow you to pick your own passwords.

Just remember....Internet marketing is about closing the sale. You can market your tush off and lose income because your code wasn't secure. Don't let a thief pull an end run around your payment processor!

Randolph M. Wells Microsoft Certified Systems Administrator IT Training and Certification Consultant IT Project Management Specialist Visit the Profit Master Blog

Article Source: http://EzineArticles.com/?expert=Randolph_Wells

Making A Living From The Affiliate Marketing

2008-12-15T04:16:00.001-08:00

By Clive Chung

Is it possible to make a living from the internet? Yes, you can earn a lot of money just selling other people's stuff online, which known as affiliate marketing. A canadian woman named Rosalind Gardner earned over $400,000 in one year just writing a dating review site. However, becoming a successful online marketer takes time and effort, and there is no way to 'get rich quick'. The basic steps to make money from affiliate are:

1. Buy a domain and web hosting online.

2. Design your website and write a few keyword-rich contents.

3. Looking for a good affiliate program which related to your keywords.

4. Submit your site into all major search engine like yahoo and google.

5. Working hard on the SEO stuff to improve your search engine ranking in order to drive more traffic to your website. Most people will do some link exchanges with some similar website or submit their 'own words article' into article directory.

6. Searching over the internet everyday to check if someone steals your content.

7. If you think your website is having a lot of good content and believe some people will buy what you are selling after reading your website, you could pay google to advertise for you(google adwords).

8. After a few months, some people should get some sales and start earning money. The bad news is, most people don't.

These are the brief summaries to tell you how to make money from affiliate market. However, if you want to be successful, you need to do more. Just like the real world market, you need to know your competition, find out the profit-making weapons, and make some good investment.

Nowadays, you could easily find many software on the internet that can help you to make money from affiliate market. BUT BE CAREFUL, 99% of the program are scam. Don't invest on any program that claims you can earn six digits in one day unless some of your real-life friends has tried it before. However, if you find a software that works, you can save a lot of time to research the skills by investing under $100. If the software really works, you could probably get your investment back in a few days. So, if you are interested in making a living from the internet, start searching a good program throughout the internet.

Check out Earn Money From Amazon Affiliate to get a free e-book “Craigslist Traffic” today and learn how to earn money from affiliate with zero cost.

Article Source: http://EzineArticles.com/?expert=Clive_Chung

Affiliate Marketing Techniques

2008-12-15T04:11:00.000-08:00

By Corinne Mech

Affiliate marketing, if done correctly, is a very lucrative business. This is why affiliate marketers are always searching for that “prize-winning product”… you know, the one that will earn h/him the biggest paycheck.

Well, I’m here to tell you that as an affiliate marketer, you do not need a product. In fact, you don’t even need a website. There are, however, strategies that need to be implemented in order to succeed as an affiliate marketer.

Affiliate marketing is a business and will require some investment of time and money, like in any other business. You will need to invest in the tools of the trade and keep up with new developments and trends of the internet marketing business.

Here are a few techniques you could use to help you succeed with your affiliate marketing business:

First, create a unique landing page for the promotion of each and every product you are marketing for an affiliate. Do not combine all of the products onto one landing page just to save some money on web hosting. It is best to have one landing page focusing on one individual product and make sure that your site adds value by providing relevant content. I know how much it frustrates me to visit a site only to find out that it is a web page advertising other websites.

Your landing page should have black type on a white background and there should be a lot of white space in your copy. This gives your page a clean and easy-to-read appearance. Make the pages attractive, compelling, and prompt customers to act on the product being offered. Your headlines should attract the readers and compel them to want to read more. Highlight text, add bullets, and use bold type for the special points. This will help your visitors to clearly understand what you are marketing and make them want to find out more about the product.

You might want to add a picture of yourself and a signature for a personal touch. This will gain trust from your visitors as you are now no longer some faceless, fly-by-night scammer.

Second, build a subscriber list by offering free articles, reports, or an e-Book to your visitors. Use an opt-in box to gather personal information from them, such as their name and e-mail address. If possible, position your opt-in box at the very top of your page so it simply cannot be missed. Create auto responder messages that will be automatically e-mailed to those who input their personal information.

According to research, it takes at least seven contacts before a sale is made. That is why it is imperative that you build a list with your opt-in box and keep in contact with those who have signed up to receive whatever it is that you’re offering (article, report, or an e-Book). This is how you will be able to generate income from backend sales. Remember . . . in the internet marketing world, your "list" is your "goldmine"!

One of two things will happen at your landing page: the visitor will move on to your affiliate’s site (which means a possible sale) or the prospect will leave the site never to return again. However, if they opted in for the freebie, you will be able to place useful information into their inbox at certain specified periods of time, inviting them back to your site. You can also remind them of the offer they missed and give them another opportunity to purchase the product. Be sure that the content and the product you are offering is for the same purpose that they visited your site to begin with. Do not make it sound like a sales pitch.

Include compelling subject lines in the e-mail, and for content, focus on how the product will benefit the customer (your landing page should reflect this point as well). Convince those who signed up for your free product that they will be missing out on something huge if they do not act now, today, this instant! (You get the point.)

Finally, drive only targeted traffic to your product. If the person who visited your website has no interest whatsoever in what you are offering, they will be among those who move on and never come back. Another way of getting free targeted traffic is to write articles for publication in e-zines and e-reports. This way you can submit your articles to publications that are targeting customers who would already be interested in your product.

Submit articles with at least 300-600 words in length. Do not submit articles that have been taken from the public domain or purchased as a private label rights package. In other words, the article should be an original copy written by you. The more articles you submit, the more free traffic you will be able to generate. If you consistently write articles, you can generate as much as 100 targeted visitors to your site in a day . . . free!

According to statistics, only 1 out of 100 people are likely to buy your product or service. Therefore, if you can generate as much as 1,000 targeted hits for your website in a day, you can make 10 sales per day.

The strategies above are not really difficult to follow, if you think about it. It just requires a little time, effort, and an action plan on your part. You can do this. . .

© 2007 Corinne Mech
http://www.ezautopilotsystem.com/
http://www.youreadminassistant.com/

Article Source: http://EzineArticles.com/?expert=Corinne_Mech

Why Affiliate Marketing Should Be Included In Most Traditional Business Models

2008-12-15T04:06:00.000-08:00

By Brian D Anderson

I am a firm believer most entrepreneurs should engage in selling affiliate products, unless perhaps you are already making 6 to 7 figures. I have been involved in affiliate marketing for the last 6 months because I realized how lucrative it can be. I decided to focus my own business in that direction. The reasons are simple. Here are just 8 of them...

1) Affiliate marketing is truely downright cheap. No huge startup costs and can be done easily on a shoestring budget.

2) You have the ability to literally create cash on demand, whenever you need it. Pay off bills or meet unexpected expenses. Have the ablility to funnel extra cash flow into your primary business to build it faster. Increase your advertising budget, purchase needed office equipment, etc.

3) Affiliate products are easy to promote. All you need is an affiliate link.

4) Information products are in high demand. The market is endless and growing each day.

5) InfoProducts are digital and instantly downloadable to the customer and the commissions are credited to your account immediately.

6) Commissions can be as high as 75%. Info-product marketplaces, like ClickBank pays out a 50% to 75% commission.

7) You don't need to create your own products, deal with customer support, handle credit card orders, etc.

8) Did I mention it's quick and easy to get started right away? You can earn your first affiliate commissions in a little as 24 hours.

Of course affiliate marketing has it's ins and outs. But with a little training from super affiliates, a willing to take action, the possibilities are endless what you can earn without much experience, whatsoever.

I totally recommend anyone starting out and building their MLM business, consulting business, whatever business opportunity you're in, strongly consider affiliate marketing to create extra income streams. The benefits are well worth it and may just save your butt whenever you get into a financial jam.

Brian Anderson is an eBusiness cosultant and affiliate marketer. You will find his personal business profile at http://www.directmatches.com/profitexperts

Article Source: http://EzineArticles.com/?expert=Brian_D_Anderson

Create Your Own Life Using The Secret

2008-12-15T04:05:00.000-08:00

By Martin Vidakovic

There is a power that has changed my life and I want to introduce you to the same power. That is the power of energy. Do you realise we can create our own life. What we thing about we bring about. To Learn more , read on!

I have educated myself in the property market, share trading, business ventures, how the mind works and what it takes to writing a book. Formal education will earn you a living but self education will make you a million. The Secret will show you that you can create your own life.

At the core of the movie is a central philosophy called "the Law of Attraction". In fact, the movie itself was inspired by this very same law when the producer read a book called "the Science of Getting Rich" by Wallace D. Wattles. This books was written in 1910!

This philosophy states that we create our reality, both good and bad! The message is delivered through 24 "teachers" which include prosperity preachers, chiropractic healers, relationship gurus, life coaches and motivational speakers — into one clear, cohesive voice. The movie is a "must watch" for anyone interested in taking charge of their life and in creating the life of their dreams.

Following on the success of the Secret, 3 of the core teachers - namely Bob Proctor, Jack Canfield and Michael Beckwith have collaborated to produce a wealth building program called "the Secret Science of Getting Rich Seminar". This program is based on the book that inspired the movie and is set to make history as the fastest selling personal development program in history.

What is the Science of Getting Rich about? Well in the words of Wallace D. Wattles, "The ownership of money and property comes as a result of doing things in a certain way. Those who do things in this certain way, whether on purpose or accidentally, get rich. Those who do not do things in this certain way, no matter how hard they work or how able they are, remain poor. It is a natural law that like causes always produce like effects. Therefore, any man or woman who learns to do things in this certain way will infallibly get rich." The Secret Science of Getting Rich is all about teaching how to do things in this "certain" way to create wealth.

The success of this program is built on several rock solid foundations. These factors include: the phenomenal success of "the Secret", the timeless concepts from the Science of Getting Rich by Wallace D. Wattles, the credibility of 3 of the most successful personal improvement teachers and New Thought leaders of our time, and the Internet as the distribution medium.

Click here to learn more about the Secret Science of Getting Rich Seminar and how you can profit from the distribution of the program.

Martin Vidakovic is an entrepreneur and self made millionaire at the age of 34. Only 6 years ago Martin only had $10 in his account and needed to find direction. That's when he decided to start his on Mortgage Company and spent time personally educating himself on what were the attributes of successful people. Using the Secret and the Law Of Attraction plus vision and hard work Martin has achieved a great deal in a short space of time. He now hopes to share some of these secrets with fellow readers. Enjoy!

http://lifetimeachievements.theofficialsecretseminar.com/

Article Source: http://EzineArticles.com/?expert=Martin_Vidakovic

4 Ways to Build a Website For Affiliate Marketing Easily

2008-12-15T04:04:00.000-08:00

By Stephen Chua

If you are planning to do affiliate marketing online, it pays to have your own website. Having your own website allow you to control the content and advertisements you want to show your visitors as well as collect your visitors name and email address for future backend promotions.

Here are a few ways you can build your own website easily:

1. Hire a website designer

This is the best option if you have deep pockets. It is not cheap to hire a website designer. A plain, single page website can set you back at least fifty dollars. If you want more pages and professional looking graphics, you may have to fork out a few hundreds to over a thousand dollars.

While this option is expensive, its main advantage is that you can have a professional looking site up and running quickly without having to know all the technical details. And it is designed according to your specifications.

2. Do It Yourself

If you are technically inclined and have no problem using an HTML editor or graphical website building tool such as Dreamweaver or FrontPage, this option is for you. However, make sure you have considerable amount of free time available, as this option can be very time consuming, depending on how complicated your site is.

To get your site up quickly and easily, you should use a website template as a starting point. You can modify the template right within the tool itself. To help you with the design, you can check some successful online stores to get an idea on how you can make your site look better. Make sure you do not place too many banner ads since these could distract some site users. Instead of clicking your ad, they might just leave your site and go look for other interesting websites.

3. Use a page generation tool

A page generation tool is not quite the same as a website building tool. It provides you with a form where you fill in essential information such as website title, keywords, content and other fields. Once you are done and click the start button, the tool will use a built-in template and generate a website for you based on the information you provided.

This is a very quick way to build a no frill website. Some page generation tools allow you to import templates so that you can build website with different look and feel. If this feature is available, you should take full advantage of it and create new templates. You can create template yourself or buy pre-made templates that you can customize. Customization should be done before you start to import the templates into the page generation tool. Most of the time, these tools do not allow you to modify the source code from their interface.

4. Use a blog

In a nutshell, a blog is a website with content management capability. It is probably the easiest way to start a website. You can get a free account at blogger.com or wordpress.com. Your primary tasks are posting fresh content on your blog and drive traffic to it. You do not even need to have a web host or domain name to get started. Just remember to add the appropriate affiliate link in your post if you are promoting any product.

In the long run, it is a good idea to have the blog hosted in your own web host and link it to a domain name. This will build your credibility and make you look professional. Furthermore, you have total control over the look and feel of your blog layout. Most hosting service providers include a tool called Fantastico, which enable you to easily install a Wordpress blog at the click of a button.

Once you have your website or blog up and running, you need to provide good content on a regular basis. In addition, you should try to promote your website or blog in as many places as possible. Your content should be useful to your website visitors and not just blatant advertisements. With useful content, your website visitors will trust you and likely purchase products that you recommend on your website or blog.

Discover how one guy from India make $15,691 from AdSense using a free website building software Insider report revealed all. Get your free copy at http://adsenserevenuetips.com today.

Article Source: http://EzineArticles.com/?expert=Stephen_Chua

Use Your "About Us" Page for Extra Income

2008-12-15T04:02:00.000-08:00

By Lisa Irby

You don't have to have a website on web design to earn extra income as a domain name reseller. If you own a website, there's absolutely no reason you shouldn't try this. This technique works especially well if you have a site that is already making some money because you can use your success as a case study or testimonial to inspire others.

Think about all the people who visit your site. Many of them want websites of their own, but they have no idea how to create one. Sure, these people didn't come to your site to learn about website building, but there's a clever way to get them interested, and you can earn a nice residual income by reselling domain names and web hosting.

Here's how to do it...

Start by building an "About Us" page (if you don't have one already). When your visitors click to this page, it's usually because they are curious about you. Maybe they like your site and they want to learn what inspired you to create it.

And if your site is really useful and informative, people will arrive at this page with feelings of respect and trust for you. This is important because that means they are more likely to buy products you recommend.

After you've told your audience about you, create a section on your "About Me" page that explains how you created your site. And if you're making money from it, give them a little background on how you've done it (Google AdSense, affiliate programs, etc.)

Next, encourage your visitors to build their own sites. And this is very important...

Make sure you do it within the context of your site's theme.

For example, let's say you have a site that reviews electronic products. On your "About Me" page, explain to people how they can create their own affiliate site on electronics or their favorite hobby. Give them some examples.

Tell them that they can create a website reviewing video games and earn money by referring their audience to the latest games and video game consoles. Notice how the example is relevant to their interests? All of a sudden, your audience is brainstorming for ways they can build their own website and make money.

Even though affiliate marketing is getting more popular, most people still don't understand that a simple information website can earn them money. Now here's your chance to show them. And here's where your affiliate revenue comes in...

Join a domain name / web hosting reseller program and send your audience to your reseller site so they can begin their websites. As a reseller, you'll be able to set your own prices and determine your own profit margins while the parent company handles all the transactions, customer support, etc. (They do all the hard stuff while you sit back and collect the commissions.)

I recommend domain reseller programs over affiliate programs because as a reseller you have more control over your profits. Most affiliate programs are free, but you don't earn any residual income. You'll just earn a commission for that first-time sale. Ultimate Domain Resellers is a great domain and web hosting reseller program where you can earn residuals.

When you're a reseller, as long as your customers keep their sites, you will get paid every time they pay their monthly hosting bill and renew their domain names. So just think... if you earn a $5 commission for each hosting plan and you sign up 10 people per month. By month 6, you will earn $300 just in residual commissions plus any new customers that begin their websites.

An About Us page can be extremely powerful. Not only can it help build your credibility, but it gives you a chance to help your audience do something many of them have always wanted to do...

Build their own website!

Now you may be wondering why I suggest promoting this on an "About Us" page, rather than just creating a page about website creation, or simply putting ads up on your site.

Think about it. If your site is not about web development then your audience would probably ignore such a page. After all, they didn't come to your site to learn how to build a website so a page like that may seem out of place or some kind of sales pitch.

However, if you tell your story on your "About Us" page, it comes off as an informational article rather than someone trying to hard sell domain names on a site that is totally unrelated. It provides you with a chance to let your audience know you are a real person with interests and a personality. That's so important on the Net since so many websites are authored by anonymous people.

So there you have it. Unlock the power of your About Me page and tell your visitors how to create a website of their own. Join a domain name / web hosting reseller program and experience the wonders of residual income when your audience begins creating their own websites.

Lisa Irby is the author of http://www.2createawebsite.com - a site that squashes many of the myths about making money with a website.

Article Source: http://EzineArticles.com/?expert=Lisa_Irby

Advantages of Purchasing a Franchise Business

2008-08-23T06:33:00.000-07:00

By Budda Oliver

Purchasing a franchise business may be a good option to consider if you want to have your own business, but are not sure how to go about doing it. Purchasing and running a franchise is just like owning your own business, but it provides you with excellent tools, resources, and other advantages that do not come with starting a company from the ground up.

A franchise is basically a license to use an existing company's name, trademarks, products, services, and other resources in return for agreeing to use that company's existing business formats and provide a percentage of your franchise's income and earnings. For the parent company, or franchisor, selling privileges to a corporation provides a way to expand the market share quicker, and less expensively.

The most appealing aspect of purchasing a franchise is usually the fact that most of the pre-opening work is done for you. When you purchase a business format franchise, you gain the privilege of not only being able to sell the parent company's products or services, but also the right to use their established practices. These procedures may include training programs, marketing strategies, trade secrets, accounting systems, etc.

As opposed to starting your own enterprise from scratch, franchising allows you to take advantage of the parent company's already established reputation and recognizable assets. The main advantage of this is that you will be able to more easily be able to attract customers from the start, which is one of the biggest obstacles faced when starting a company from the ground up. For example, buying a McDonald's restaurant will no doubt provide you with a much larger instant customer base than you would have if you were to open an independent hamburger restaurant.

In addition, most of the financial aspects of running a venture will be more clear-cut. The franchisor will be able to provide you with details of both start-up costs and operational costs, taking most of the guess work out of running a corporation.

Besides name and product or service recognition, your franchisor will also be able to provide you with many other benefits, such as industry experience, group purchasing power, training programs, and ongoing support, just to name a few.

As with any business venture, there will be risks in opening a business. However, having a proven and reliable franchise system helps to minimize these risks. Good franchisors will be able to provide you with proven systems that are easily replicated in order to provide consistent results.

Purchasing a franchise business should be thought of as entering into a partnership. As long as you can be a good business partner to you franchisor, your franchisor should do everything possible to ensure that you have a successful, profitable venture. This kind of support is what makes running a franchise business so advantageous to aspiring entrepreneurs.

Mr. Oliver is a marketing agent of FRANNET. The franchise buying expert provides consultation services to walk clients through the process of purchasing a franchised business. For more information on their Franchise Experts please visit their website.

Article Source: http://EzineArticles.com/?expert=Budda_Oliver

Will Your Franchise Sell for What You Think it is Worth?

2008-04-21T05:25:00.001-07:00

One of the common questions prospective franchisees ask during the discovery phase of their franchise opportunity centers on the ability to sell the franchise. Generally, the franchisee is informed that it can be sold just like any other business. That is only partially true. Unfortunately, for the inexperienced franchisee, they will not find that out until many years down the road. While many businesses are sold based upon a multiple of the earnings of the business, this does not always hold true for franchises. You see, in the sale of a franchise, there is another party which must be dealt with, and that is the franchisor.

Just because you want to sell your business does not mean that it can even be sold. Remember, every potential buyer must meet the requirements of the franchisor and the landlord, just as you had to. The next hurdle is the price. This is where things get a little tricky. For basic illustrative purposes, assume the business nets $100,000 and you want to sell it for a multiple of five, or $500,000. Obviously, there are many factors that go into determining worth, so this is just an extremely basic example.

How realistic is it that you can command that price? Well, you will need to consider several factors. First, how many years are left on the current agreement and how many renewal options are left? Does the franchisor have the ability to decline the options? If you do not have enough years left on your term to enable the prospective buyer to get a proper return on the investment, your sale price will be reduced. An independent business does not have to deal with this concern.

A second variable that plays a part is the cost to transfer ownership. Many franchise agreements require the buyer to pay a transfer fee. However, that is not usually the biggest stumbling block. Generally, the franchisor will require that the unit be brought up to the current specifications and will invoke the mandatory remodeling costs to bring it current. In most cases, that amount, plus the transfer fee, will come off of the sale price. If a broker is involved, there is also that fee to deal with.

Finally, depending on the chain, your location and footprint of your building may not fit the current model or look the franchisor is using. Therefore, upon sale, the buyer may be approved however the location may not. The buyer may be required to relocate the business. If that is the case, you really have very little to sell.

All of these factors, plus many more, will play a huge part in determining what you will get for your business, IF you can sell it.

A current successful entrepreneur and multi-unit franchisee for over 16 years as the initial franchisee of a restaurant concept, David Kajganich has continually sought lucrative opportunities that are in the early stages of success. His goal and purpose is to help and mentor others to achieve the success of their dreams.

Check out his latest ventures at http://www.myspace.com/everlastingwealth

http://www.NoFranchiseNeeded.com

Nobody cares how much you know until you show them how much you care.

Article Source: http://EzineArticles.com/?expert=David_Kajganich

The Joys of Being a Franchise Consultant

2008-04-21T05:24:00.001-07:00

If you have been in an industry for 20 years and were at the top 5% level of productivity and knowledge and are now semi-retired perhaps you should be a consultant. Not everyone has what it takes to be a consultant, but if you do, you will find yourself in a nice place financially by taking advantage of your expertise and knowledge.

Today, I am a semi-retired consultant to industry and having been in the franchising industry for so long I find that those are the most rewarding coaching opportunities for me. Of course it is not all good. There are some real winners out there. Luckily you can choose who you wish to do business with. My advice is to be the best, work only for the best and expect the best; let's call it "all the best!"

Recently when discussing franchise consulting with a gentleman who wished to start a mobile franchise business making jewelry, we got to talking about past experiences and international business. No, not far off international business, just over the border in Mexico from Arizona and I mentioned the questionable ways business was done there and how some of Mexico ran like a third world country. He stated;

I was going from Phx to Mexican border town for scripts. I met this girl and found that her Father was Mayor (town w/300K), her Uncle was Chief of Police (I could do NO harm), and another Uncle,on her Mother's side was a State Rep. I married her after a long formal courtship and bought a strip club 5 blocks from the border.

So, far as a business consultant, no real problem here, only a red flag on the strip-club thing, but still there are always reasons why people do things. I no longer wanted the job of consulting this gentleman after hearing this, but did not dismiss him as an entrepreneur by any means. But then he stated something like this;

The kids came in droves from U of A, ASU and I rolled in the bucks, even sold coke right in the club. I got a chance to buy a cantina that had a 21 room "Casa de Pu-ta". I got the kids all pumped up at the strip club then loaded them on my jittney for the 4 mi. cross town trip to my Cantina so they could get drunk and laid. I made 3M in 4.5 years. Long story short I left my wife, three kids, mistress, and two kids 2M in trusts and took off for Tonapah, AZ where I sold land home packages until I went into an 18 day coma and almost died.

Now as a consultant and a straight arrow, you can imagine my dismay at this gentleman's lack of personal character. Indeed, there was no way at this point I was going to help a man who left his wife and kids to set up a whore house in Mexico just over the border, with a strip-club and then sell drugs and assist American Kids in getting STDs. He then stated how he preceeded to lose all his wealth and how he got a terrible disease.

Well, being a one man show, not even capable of getting out of bed for 6 mo., I lost all but 75K. Then I came down w/Buerger's Disease and wound up on SSD, living in Escanaba, MI. Oh well, I'm still going to try to make it again if you'll hang w/me and coach me!

Indeed the answer is "No Way" would you? And am I suppose to feel sorry for this gentleman now and help him regain his ill-gotten riches in an industry that I care about? Well, you see there are success stories in consulting and there are horror stories. And the moral of the story is "Know Your Customer" because your reputation is based on it.

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington

Article Source: http://EzineArticles.com/?expert=Lance_Winslow

First to Market Theory Completely Out of Sync with Reality

2008-04-21T05:23:00.001-07:00

Is being first to market really that important? I believe that the amount of energy and time purporting this myth is somewhat unnerving in that being first to market is not always so great. Indeed, I have been first to market many times and yes, no one can deny that often that is a total advantage. But it is also somewhat costly to chase hunches and the cost to build a prototype that crashes and burns is not so funny, especially when the future of your company hangs in the balance.

As a veteran of the high stakes game of entrepreneurship, I completely concur with the comments that First to Market should not be the primary goal. You see it costs money, lots of it, or lots of grass-roots hard work to do a test market roll-out and introduce a new product or in my case "a new service" and after refining your techniques someone else can come into the market without having to pay for all the mistakes and hard-knocks and not have to worry too much about getting kicked in the teeth from having to straddle between non-existent regulations, while competing with the old guard (industry association status quo) with all their little political connections.

Now if you have your act together and have done it a few times, being first to market can be a good thing, but all eyes are on you and if you screw it up (Zap Mail - FedEx example), well they will never let it down.

In 1997 I was in Las Vegas for the International Franchise Association (elite club meeting) and everyone who is anyone in the Industry was there and yes many household names. But one thing that I got the most out of was the "mini-round table" seminar only 20 people in the room, all founders of franchise companies and up to bat was the International Marketing Team from Dominoes Pizza, Tom Monahan appeared to be quite proud of them in fact.

Well to make a long story short they discussed why they did not desire and preferred not to be "first to market" because if you went into a country and put in a few outlets, example; Nairobi, Kenya for instance. No one knew what a Pizza was. What is this thing with cheese on top and all these food items melted in place? See the point. They indicated they wanted to be second or even third to market.

Why? Well after the first company (ies) spent all the money offering discounts, advertising and free-sample marketing, they simply came in competed head to head in the "Enterprise Rent-a-Car" style and took massive market share, since people already knew what a Pizza was and they knew who to market better and followed time-tested efficiency strategies refined from over 10,000 previous outlets. Yah!

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington

Article Source: http://EzineArticles.com/?expert=Lance_Winslow

Franchise Help Wanted - In Need of Qualified Franchise Attorney

2008-04-21T05:21:00.000-07:00

Introduction

Business ventures need to be complemented with excellent consultation. The more sources of information a business person has, the more efficiently they can undergo the process. Being part of a franchise is a wise decision, but many hours of research are needed for the appropriate acquisition of knowledge. Even after the process has commenced, a good business-minded person will realize that they constantly need to learn more through experience and through the consultation of others.

Why they are needed

Getting a qualified franchise attorney is a suggested component of the franchise process. Look for an attorney that specializes in franchise law and has spent some time working with the franchise industry. Not only should they know franchising very well, but they also need to know your particular state’s franchising rules, laws, and regulations. It is also suggested that the selected attorney is not affiliated with the franchisee’s franchisor.

Good law consultation is needed at every level of the franchise process. Franchisors may have a team of legal advisors and franchisees usually have at least one source of legal counsel.

What they can help with

Franchise attorneys will aid a person with understanding legal issues and documents and guard them from making costly mistakes. Documents (especially in the beginning of the venture) are filled with technical terms and may not be easily understood by all, so having someone to serve as an interpreter is a wise decision.

Franchising is associated with a series of involved and complex laws. The system also involves many different players on varied levels. The enterprise is much easier handled along with the help of a specialized counselor.

A prospective franchisee will need to analyze particular franchises to theorize what will be the best fit for them. A franchise attorney will be able to research each franchise according to their business record and reputation within the industry.

Specifics

As aforementioned, a franchise attorney will help you through the entire franchise process. The following is a list of some of the components they will help you with:

- Review of the Uniform Franchise Offering Circular
- Negotiation with the franchisor
- Preparation of shareholder agreement
- Negotiation of leases
- Help with dispute resolution
- Review of renewal agreements
- Transactions

Franchise attorneys can be found by:

- Referral from other attorneys
- Referral from the American Bar Association
- Referral from the International Franchise Association

Franchise Fetch delivers franchise opportunities to the public. We have businesses offering franchises in many industries. Check out our Web site to see all of the occasions we have to offer.

Article Source: http://EzineArticles.com/?expert=Oscar_Twain

Get Free Fast Food Using an Austin Business Consultant

2008-03-29T01:09:00.001-07:00

I want to share an interesting ad I saw in the paper the other day: Wealthy fast food addict in search of an Austin business consultant to guide him in the purchase of a fast food franchise so he can save money on burgers and fries.

Okay! I didn’t really see that ad, but I know Texas business strategists and business coaches all around your area that could help that person, or you, find and purchase a franchise by guiding you through the process if that’s what you want to do.

Just so happens that, even though I’m awful with an opening joke, I know a few things about buying a franchise myself that I learned from Austin business consultants. This time I’ll be serious, so please keep reading.

As with anything, common questions arise that you want answered before you begin to even consider buying a franchise. Before you consult with a Texas business consultant or business strategist, you must read the answers to those questions and save yourself some time and maybe money.

How does a franchisor make his money?

They consult a Texas business coach like you will! Then, they charge a hefty fee for a franchise. After that, they collect a percentage of the sales and also sell supplies and services to the franchise. Consult an Austin business consultant to find out the standard fees and percentages for the industry in which you want to buy a franchise.

What’s more important? The initial fee or the charges down the road from sales, etc?

Assuming you’re buying into a successful franchise, definitely concern yourself more with the charges you’ll incur down the road. Those charges come directly from a percentage of your sales, not profits. Too high of a percentage can deflate your profits.

Beware of any hefty fees required up front. Make sure the franchise is successful. Most importantly, consult with a Texas business consultant or seek the help of a Texas business coach before signing any contracts.

Well, is it worth it to pay a percentage of my sales?

I can’t decide that for you. Austin business consultants say that if you possess industry experience then, yes, it could be worth it for you. However, if you’re new to the industry you want to buy into and just want to try your hand, you might be best to work for someone else first.

Texas business strategists point out that you pay a percentage of sales. That means what you pay doesn’t take into account operating expenses and the like. If you don’t know the industry, you can’t plan ahead so that you can pay those fees and still make the profit you need.

What other costs can exist?

You might have to pay a percentage of advertising costs and not just for your area. This might include local, regional, or even national costs. Again, consult with an Austin business consultant. Take advantage of the help that Texas business coaches can give to you to help you make the smart choice.

What else should I watch out for?

Talk to other franchise owners and a Texas business consultant before proceeding with buying any franchise. I can’t say that enough! However, you should know if you could sell the franchise easily, if the franchise fees can be increased for any reason, and how your industry skills stack up against others who bought into that franchise. Again, talk to a Texas business strategist and other franchise owners. The time you take to do your research will pay off in gains instead of losses.

Ben Jordan is x-Fortune 500 Austin Business Consultant, who has consulted small business owners, up to $30 Billion dollar companies around the country. For a short time you gain access to his now infamous, "The No BS Video Newsletter" FREE for life, a $447 value by visiting http://www.whoisbenjordan.com

Article Source: http://EzineArticles.com/?expert=Ben_Jordan

Financing A Franchise - The BIG Error

2008-03-29T01:08:00.000-07:00

So you fancy a franchise eh? You like the sound of the whole ‘in business for yourself, but not by yourself’ thing. You’ve done your research and you reckon you can see the way ahead. You reckon your future lies under the banner reading ‘Franchise’.

Then you come up against the $64,000 questions…

1) How much will it cost?

2) Can you afford it?

Now if you are at all human you will have done what every prospect on the path to making a purchase of any sort does. You will have pictured what it will be like to own that franchise. Which is perfectly understandable.

BUT

You are also laying yourself open to the biggest mistake that prospective franchisees can possibly make. You see you can be in danger of letting your judgement be affected by a fatal affliction that is the cause of huge misery in many walks of life, but especially in Franchising. That affliction is

OVEROPTIMISM

Even the most level-headed individual is prone to it from time to time. Most of the time you get away with it, but in franchising there are several things that make this a hugely dangerous problem. That’s because of the following points:

1) The prospective franchisee (You?) is often not experienced in the world of small business finance, so they are leaning heavily on others to provide that experience. The major supplier is frequently the franchisor. A person or company who has a different agenda to you. They want to grow their business and while they don’t want you to fail they are certainly more willing to risk your future they you might be.

2) You may not be experienced in finance and cannot pull together a cash flow forecast.

3) You may know exactly how much you’ve got to spend and believe that it ‘should be enough’.

4) Your optimistic assumptions are based on doing as well or better than others already in the field.

5) You haven’t factored in what you really need to live on. What will see you on the short road to bankruptcy is a failure to recognise that these problems have to be acknowledged and dealt with. Optimism will mask these unpalatable facts sometimes until it is too late.

So to avoid disaster:

1) Create several cash flow scenarios. Yes, be optimistic, but also be neutral and pessimistic too. Then look at the pessimistic forecast. Now be even more pessimistic. Can you afford to fund the franchise and yourself at that rate of profit?

2) When you think you’ve covered the options take your thoughts along to a friend or somebody who’s opinion you value and who you can trust to give you their real thoughts rather than what you want to hear. Tell them you need to check the reality of the deal.

3) Take your proposition along to a local accountant or book keeper. They will give you their advice for a fixed fee and it needn’t cost the earth. If you are worried about the cost, try to compare the cost with the amount of money you could lose. I suddenly looks a little better doesn’t it.

4) When you are lying in bed in the still of the night ask yourself if you are really sure that the numbers stack up. Are you really certain that you are being realistic rather than optimistic.

5) Take another look at the numbers that the franchisor is giving you as an example. Ask yourself exactly how you are going to replicate the numbers that they are quoting. If they are suggesting that you can make quarter of a million in the first year, ask yourself whether you can really make that money – where are the customers coming from in the real world rather than on paper.

6) Look again at the assumptions you are making and decide what would happen if the assumptions were slightly out? Would it be a disaster or would it be OK.

Finally make sure you do every bit of research you can think of, and get a really good guide to help you create the structure for your investigations. You may want to consider my book – www.realworldfranchising.com it covers all of these items in more depth and a lot more too.

Gareth Williams is an advisor on franchising from the franchise buyers perspective. A past franchise owner he has real experience of franchising 'from the trenches'. He has written what many consider to be the definitive guide to buying a franchise. This is available from http://www.realworldfranchising.com

Article Source: http://EzineArticles.com/?expert=Gareth_Williams

Why Franchising Needs Women

2008-03-29T01:07:00.002-07:00

That there are differences between men and women should not come as a surprise to anyone. That those differences would be a consideration and even a key method in determining whether or not a person would have greater success in the franchise world seems to be more than shocking it's downright politically incorrect. That is until understanding that the determination is that the franchising world needs more women franchise owners. According to recent studies, and also to age old observances of the many differences in the way men and women think and operate, women tend to have a different style and approach to business thinking that allows them a significant edge in the franchising market.

Women and men are both capable workers in the business world, but studies have shown that women are the gender with a tendency to multi-task several different operations, while at the same time not allowing minor hindrances and details to bog them down and detract from a long term overall picture. The more simple and direct approach of focusing on one task or job until it is accomplished, studies have shown, is a natural approach for the male brain, but the female brain is more naturally adept at processing many different tasks before any one particular job or task has been completed. This type of multiple task approach is the exact type of mindset that a successful small business franchise owner needs in order to get their new business off the ground and making profits.

The different types of franchise opportunities are virtually limitless, and the "shotgun" thought pattern naturally prevalent in the female brain allows women an easier path to initial success in the franchise business world. An encouragement for the many women out there that are looking for a business opportunity but have felt that the small business franchise world is more suited for the corporate male mind. Don't believe either that the only successful female franchises are those that employ only females or provide "womanly" products and services.

While there are a variety of franchises that seem to cater to the operation and sales of a female population such as LittleAngels Children's photography, which is a fast growing franchise that prefers their all female ownership for the simple reason that their main business is photographing children in pre-school groups and nurseries who have shown a preference to women photographers.

Other options also include Rosemary Conley Diet & fitness Clubs. These fitness clubs are all women clubs that allow women the opportunity to enjoy exercise and fitness activities in a much less self conscious environment than a typical bi-gender health club. Rosemary Conley Franchises are the first and only franchises in the UK to offer both health and fitness programs along with diet advice in the same class.

Also looking for women franchisers in the UK is Auntie Anne's Pretzel. This franchise is a basic, simple to understand business plan that provides a great treat whose smell serves as one of it's best advertising components. Auntie Anne's pretzel franchises are typically places in areas with high pedestrian traffic and are a great business to watch flourish quickly.

There are many other franchises that are specifically seeking women owners and investors that may surprise you such as: MatchPoint Professional Consultants, Expense Reduction Analysts Franchise Consultancy Group, and Busby Web Solutions franchise.

If you are a woman seeking a business opportunity, then take a look at the world of franchising, because franchise providers are looking for you.

Learn more about UK franchises and find the best business opportunity for you at Franchise Gator UK.

Article Source: http://EzineArticles.com/?expert=Candice_Clem

Franchise Success vs Entrepreneurial Spirit in a Super Smackdown Event

2008-03-29T01:07:00.001-07:00

You're all the things a good entrepreneur should be: driven, disciplined, confident and focused. Business problems that send others running for cover are simply the fuel that feeds your ambition. You prepare and prioritize like a paratrooper and you're as independent and steadfast as a bull taunted by fluttering scarlet silk. If you opt to buy a franchise, prepare for a smackdown.

Buying a franchise requires many of the same characteristics starting a business from scratch demands, but tempered in a way that allows the franchisee to integrate into a network. A successful franchise owner should be a good leader, but one who can listen to and take advice from peers and colleagues - and a franchisor.

Learning the franchise system means going back to school - as the student. Good franchisors must have the patience and tolerance to learn, understand and implement an already established system, leaving little room to do things their own way. Are you prepared to accept the franchisor's way of doing things - whether you like them or not, whether you agree with them or not? Your franchise agreement will require it.

Die-hard entrepreneurs are willing to take risks few people can stomach. But buying a franchise involves much less risk than building a business from the ground up, which is the very thing that attracts many franchisees in the first place. They like the idea of being a part of something that's already established. If this idea excites you, you're franchisee material. If, instead, you hear the faint hiss of your spirit deflating, perhaps you should consider another option.

Be honest: do you work well with others? Are you the kid who just couldn't follow the teacher's directions for your science project because you were convinced you knew a better way? Do you merge with traffic or would you prefer to direct it? Being a successful franchisee will require you to work together with the franchisor as well as other franchisees for optimal results. Some people live for collaboration, some prefer to do things their own way and own the results, good or bad. There's no doubt you'll own the results of your franchise endeavor. But any chance of success requires that you be the type of leader who is willing to follow an established course.

Committing to a business venture is like committing to a relationship. It requires plenty of consideration, honest self-assessment and ownership of your actions and the resulting consequences. Choose well, and you can look forward to many challenging yet blissful years of contentment. Choose poorly, and you're in for a major smackdown.

Lisa Hoffmann is chief copywriter for PRstore, a full-service retail marketing franchise with 41 stores in 18 states. PRstore makes professional marketing accessible to small- to medium-sized businesses by offering affordable marketing solutions and eliminating the pricey retainers often required by traditional marketing agencies. For more information about becoming a part of this dynamic franchise, visit PRstoreFranchise.com.

Article Source: http://EzineArticles.com/?expert=Lisa_Hoffmann

4 Tips To Remember When Talking To Franchisors

2008-03-20T05:34:00.001-07:00

Franchising research is a dangerous business for potential Franchisees. The Franchisor can hold all the cards….unless you see the relationship for what it is!

I’ve set out below 4 rules that I go into in more depth in my book. Ignore these at your peril, but take them into account and you and the Franchisor can have discussions with the deck not stacked against you.

1) The Franchisor is wishing to enter into a contract with you that will enable him to grow his business. The relationship that you develop is based around MUTUAL benefit. In the light of this, there is no need to feel that you have to impress the Franchisor or that when you meet with them you are applying for a job.

2) The purchase price of the Franchise should be in proportion to the rewards that are realistically on offer. Don’t forget, every penny spent in the purchase of the Franchise is one less going into the development of the Franchise after purchase.

3) Remind yourself that the person who is taking the biggest risk in this relationship is you. It’s true that the Franchisor wants to grow their Franchise with the right people. However don’t forget that if they don’t sell Franchises they don’t grow their business at all!

4) The Franchisor’s representative is well motivated to sell you a franchise. Remember, if this was a job interview you would be the salesman in the relationship. In fact you are the buyer and the Franchisor is the salesman. Tailor your approach in the light of this.

Don’t forget these rules when interviewing Franchisors.

NOTE YOU are interviewing THEM -- NOT vice versa!

Gareth Williams is an advisor on franchising from the franchise buyers perspective. A past franchise owner he has real experience of franchising 'from the trenches'. He has written what many consider to be the definitive guide to buying a franchise. This is available from http://www.realworldfranchising.com

Article Source: http://EzineArticles.com/?expert=Gareth_Williams

The Eight Best Franchise Opportunities Of 2006

2008-03-20T05:33:00.000-07:00

Wondering what franchises provide the best business opportunities? The results are in for 2006’s best franchise businesses. Check here to see if your favorite franchise made the list!

International. This company provides graphic design for signs large and small, as well as trade show displays, banners, electrical signs, and graphics for vehicles. The company has a great track record, with over twenty years of experience under its belt and consistently strong sales.

HomeVesters of America, Inc. You’ve probably seen those ads that say “we buy ugly houses!” Meet the company behind the ads: real estate experts who operate in a special niche market—undervalued property. Those who’ve bought into the franchise love the fact that the business provides group rates on vacant property insurance and strong support of its franchise owners through conventions, personal consultations, a detailed website, and more.

Haagen-Dazs Who doesn’t love ice cream? Franchise-owners find this company as hard to resist as its product. They’re a company with strong franchisor support, including a two-week onsite training course at their headquarters in Minneapolis, onsite training until your opening day, site selection assistance, and continued support for your marketing, business planning, and operations.

Jazzercise, Inc. A fitness phenomenon in the eighties, jazzercise is still going strong, and it’s easy to see why—it’s a fun, challenging fitness program that incorporates blood-pumping dance moves, upbeat music, and a solid cardio workout. Today, Jazzercise, Inc. is an international franchisor. It has over 5,000 instructors in over thirty countries, and teaches almost half a million students each year.

Budget Blinds, Inc. Budget Blinds is a company that invests heavily in its advertising—which is good news for the franchisee. The company runs a multi-million-dollar national ad campaign, and has a business model that’s proven to work. Franchisees love this company because of its financial growth, strong support from the franchisor, and its established brand name.

Heaven’s Best Carpet Cleaning 106 franchisees gave their opinion about this franchise—and the results were resoundingly positive. The franchise was consistently rated excellent for great franchisor relationships, strong training and support programs, and a great financial opportunity. It’s also a franchise with a low start-up cost: your total investment for this business is estimated at only between $24,000 and $60,000.

Hair Cuttery This business is a fast-growing, highly profitable chain that works hard to keep its employees satisfied. In fact, it has one of the highest employee retention rates in the industry. It also provides products to sell, site selection, décor advice, and thorough training—the company claims that even people with no salon experience can become successful franchise owners through their training program.

RE/MAX This real estate franchise was voted Inman News’ Innovator of the Year for 2006. It was also voted #8 in survey. It’s been in business for over thirty years, with a strong national ad campaign, a good sales record, and plenty of support for its franchisees.

Business is booming for many American franchise companies nowadays—in all industries. If you’re considering going into business for yourself, a franchise may be just the opportunity you’re looking for—and you can’t go wrong with any one of these successful brands.

FranchiseFetch.com brings you tremendous business opportunities. Buying into a franchise means that you can be your own boss, yet still have the experience and insight of an already successful business behind you. There are many different businesses to choose from on our site along with resourceful information and tips in reference to franchising.

Article Source: http://EzineArticles.com/?expert=Sage_Dean

Buying a Franchise Business

2008-03-20T05:32:00.000-07:00

Buying a franchise is often a good way for people to own a business, who might not have as much experience or confidence in running a business. Franchises offers a safer alternative, with less risk & more support than building a business from scratch.

The success of franchises' comes down to the fact you have a proven and working business model, with many other franchisees having already taken the (hopefully successful) step into owning the same franchise.

Benefits of owning a franchise:

- Established brand.

- Established marketing campaigns.

- Cumulative purchasing power.

- Proven successful business model.

- Support, assistance and training.

- Risk avoidance.

Before jumping headfirst into a franchise, you should tread carefully. It is likely you will be sinking a lot of money into non-recoverable costs - for example, franchise fees, legal costs and brand new equipment/store setups.

You should also be weary of new franchises promoting the 'best new thing' - no matter what the flashy brochures say. Be certain to speak to existing franchise holders to see if they are successful, and if not, why not.

With the added support of the franchise, they usually have a vested interest in you succeeding which has helped it to become a very popular way for less experienced people to become self employed. However it shouldn't stop you from going alone. The success of your business is only going to be as good as the franchise operator, if the marketing falls short - it could hit you badly as well.

A lot of people buy into franchises purely as a job, and it doesn't always live up to people's expectations. You should make sure you do the proper research and be realistic about the goals the business can achieve, before you hand over your cash.

Andy is a writer for CanadaBizMart - home to hundreds of business for sale and franchise listings in Canada.

Article Source: http://EzineArticles.com/?expert=Andy_D

5 Marketing Tips - Franchises Benefit from Integrated Promotions and Mail Campaigns

2008-03-20T05:27:00.000-07:00

If you are like most franchisors, you continually face the same challenge: how to grow your business in a competitive marketplace. The primary leverage points franchisors have to grow their companies are twofold: add more franchisees to their networks and ensure the ongoing success of those franchisees once they have been added. One key to achieving both is to plan and execute optimal promotions and direct mail campaigns.

In order for a given franchise network's promotions and direct mail campaign to be optimal, the campaign must meet four conditions: 1. must be cost-effective, 2. must accurately communicate the value proposition of the company, 3. must be easy for franchisees to participate in, and 4. must target the right customers and prospects.

With these conditions in mind, here are 5 marketing tips for franchises for designing and executing integrated campaigns:

Tip #1: Standardize your marketing materials:

One of the cornerstones of good branding is the ability to present an integrated brand image - the look-and-feel of your materials, the messaging you use to reach out to prospective customers, and your value proposition - at every point of customer contact. Regardless of which advertising media you leverage or which members of your organization are in daily contact with your customer base, it is important to present a "unified front" in terms of what your organization is all about. This is particularly important for franchise organizations. If you leave it up to individual franchisees to develop marketing and advertising materials, it is highly likely that your customers and prospects will be exposed to conflicting brand images about your organization. This should be avoided at all costs because it can damage the brand you are working so hard to build.

Tip #2: Allow for just the right degree of customization:

Franchisors need to set forth strict guidelines for the use of company-branded promotional materials. Franchisees are faced with a dilemma: they want to promote the company brand, but they also need to communicate to customers the relevant information about their specific locations. As a guideline, about 80% to 90% of each piece of direct mail, poster, door hanger, and promotional good your organization sends to customers should remain consistent from location to location. At the same time, it is important to give franchisees the freedom to add address, store locator and customized coupon or promotion-related information as per their local campaigns. Striking the right balance between standardization and customization is paramount.

Tip #3: Give franchisees the flexibility to place orders online, anytime:

Franchisees are busy running their businesses day-to-day. They need to be able to place orders for corporate-approved promotions and direct mail campaigns on their own terms - even if that means doing so in their pajamas at 10:00 p.m. on a Saturday night over a hot cup of coffee. Franchise networks that implement password-protected, secure online ordering systems benefit from the flexibility that comes from "at-anytime, from-anywhere" style ordering. Online ordering means that franchisors can avoid the hassle of receiving or fulfilling mail and promo goods orders from franchisees. And, franchisees gain the flexibility to place orders anytime they choose - on their own terms.

Tip #4: Allow for targeted mail campaigns by offering only the most relevant list filters:

Franchisees are interested in the day-to-day tactics and strategies of running a cost-effective operation - they are in most cases not marketing experts. On the other hand, franchisees do understand that targeting the prospects that are most likely to respond to their direct mail campaigns makes good financial sense. The trouble is, there are literally thousands of available ways to filter any given mailing list today; income, age, and gender are just the tip of the iceberg. The best way around this dilemma of simplicity-of-ordering vs. offering multiple list filtering options is to set up an ordering system that gives franchisees access to just a handful of the most important list filters (e.g., demographic selects). This allows your franchisees the freedom to select their own list filtering criteria but at the same time does not overwhelm them with hundreds of confusing options.

Tip #5: Set up pre-arranged fulfillment agreements on behalf of your franchisees:

Franchisees often work 12 to 16 hour days building their businesses, especially when they are opening new locations. They know that marketing and advertising are important, but they do not have the time to call vendors, compile mail lists, check drafts, negotiate pricing and place orders - let alone get corporate approvals. The solution: the franchisor can help franchisees by pre-selecting the right goods and mail items and then setting up business agreements with geographically-appropriate vendors to fulfill them. That way, the franchisee just needs to pick up the phone or go online and place the order after choosing from a list of pre-approved items. Thinking through these considerations ahead of time can free up franchisors to focus on growing their business rather than managing the day-to-day selection, approval and fulfillment of promotional items.

Finding intelligent, cost-effective ways to integrate promotions and direct mail campaigns across your franchise network can pay off huge dividends down the road. These dividends include fewer franchisor headaches, higher participation rates among franchisees, a more integrated brand image across all points of customer contact, and more cost-effective, targeted campaigns.

Visit http://www.VentureManagerSolution.com for a free demo video on how to implement an custom online ordering system for your franchise network that features real-time mailing list counts, five-minute order processing and pre-arranged mail and promo goods fulfillment.

Article Source: http://EzineArticles.com/?expert=Gene_Adelson

PrideStaff

2008-02-22T03:47:00.000-08:00

Franchise Description

About Us

PrideStaff is a national staffing franchise organization consistently delivering innovative solutions to the staffing challenges employers face. We do this through a network of high caliber franchisees that have developed significant businesses by embracing the PrideStaff system. Over our 25 plus year history, our franchise model has been highly successful. PrideStaff has consistently outpaced the growth of the staffing industry year after year.

Industry Growth

For the third decade in a row, the staffing industry has been one of the fastest growing industries. Following a decade of double-digit growth, the industry continues to be strong and the timing is good to open a franchise . According to the latest analysis by the Bureau of Statistics, the Staffing Industry will generate more new jobs over the next decade than any other industry.

Complimentary Strengths

The most successful staffing franchise owners are passionate self-starting business people who cherish their independence and success, and who wish to control their future. PrideStaff's franchising package has been developed specifically for this motivated, successful group. We have simplified the business management side of One of the Best Gross Margin Splits in the Industry - We offer one of the best splits in the staffing industry. You receive more. Find out how this is different.

1. Affordable Franchise Fee - With a low cost franchise fee, we have devised a plan that helps to conserve your working capital.

2. Inclusive Office Package - We require a high image, highly efficient office operation. A complete package of office furnishings, equipment and computer hardware and software has been designed to provide this strong physical presence with tremendous efficiency starting Day One.

3. Leadership Team for Regional and National Support - We have built the PrideStaff leadership team to offer franchise owners training and support at our Home Office resource center, in the field, regionally, and at the PrideStaff annual convention Our franchise owners and staff participate in both classroom and on the job training. We operate on a system for continuous improvement in the support arena - always looking for ways to improve.

4. Maximizing Productivity through Technology - We have an extensive Intranet system and are training and upgrading our web based skills testing on a regular basis. Our mission is to enable our franchise owners to work efficiently and productively with some of the latest technology.

5. Provides Full Back Office Support of Payroll/Billing - We also provide the funding of the weekly temporary payroll, thereby drastically reducing the investment required to fund a fast growing business and enabling you to expand your business more rapidly

Franchise opportunities are available in most major markets

Investment Requirements

Franchise Fee: $24,500
Required Cash liquidity: $135,000 to $170,000
Total Investment Range: $135,000 to $170,000

Spherion

2008-02-22T03:41:00.000-08:00

Franchise Description

Spherion is a leading staffing and recruitment company with a nation wide network offices and $2 billion in annual revenues. As one of the nation's largest employers, we've placed millions of workers in temporary, temp-to-hire and full-time jobs. Our more than 8,000 clients include 85% of the Fortune 100 companies.

A high-growth industry
Over the next decade, the U.S. staffing industry will add more jobs than just about any other industry, according to the Bureau of Labor Statistics. In fact, spending on staffing is expected to reach $100 billion in 2007, according to Staffing Industry Analysts.

Align yourself with experience
Spherion, with 60 years of experience, understands the trends and nuances of staffing and is able to guide our franchise offices because we have been in the industry from its inception. Our company - and our industry - has stood the test of time.

We were awarded the prestigious World-Class FranchiseTM designation based on a thorough survey of our franchise community. Click Here: Check-out the results!

Franchise Training and Support

Spherion provides turn-key support for franchisees every step of the way, from pre-opening to ongoing operations. We bill clients, pay employees and provide access to cutting edge technology and software applications. As a result, the franchise owner eliminates many operating costs associated with running a business - reducing cash flow needs and letting our franchisees focus on growing their business.

Spherion empowers entrepreneurs to achieve their business potential.

Investment Requirements

Franchise Fee: $25,000
Required Cash liquidity: $97,700 to $163,200
Total Investment Range: $97,700 to $163,200

Personalized Management Associates

2008-02-22T03:37:00.000-08:00

Franchise Description

Personalized Management Associates, founded in 1985, has pioneered an executive search system for management staffing in our niche markets of retail, restaurant and hospitality management. We have become one of the largest recruiting chains specializing in these niches in the United States. Few companies have the reputation of Personalized Management Associates in finding innovative employment solutions for both companies and candidates in today's workplace.

PMA Franchise Systems, Inc. began in 1999 to franchise our system of search and placement. A PMA Franchise allows you to be in business for yourself but not by yourself!

Entrepreneur Magazine has ranked PMA Franchise Systems, Inc. in the "Top 200 Low-Cost Franchise Opportunities." A USA Today article listed PMA Franchise Systems, Inc. as one of the top recruiting franchise opportunities in the United States.

Franchise Training and Support

PMA training, guidance and support is led by "Certified Personnel Consultants." Certified Personnel Consultants (CPC) is the highest professional designation in the recruiting industry. Approximately 4% of all recruiters in the USA are Certified Personnel Consultants. With PMA's CPC's, you have access to the continuous guidance and support from Certified Personnel Consultants and other company trainers to not just maintain, but to grow your business for the future. Their #1 priority is your success!

Operating Margins 40%-65%. Niche Markets are "Recession Resistant", Lowest Total Investment in Staffing Industry (Under $50,000), Prime "Real" Protected Territories, Multiple Revenue Streams, Fast Staff Up, Cash Flow in as soon as 60 days, "Live Action" Training Program, Proven Easy to Follow Efficient System, Continuous Support, Guidance and Mentoring by Certified Personnel Consultants, Office Set-up, equipment purchase, field visits, employee hiring, strategic planning, accounting, newsletters, Internet Links, conferences, inter-office networking.

Investment Requirements

Franchise Fee: $30,000
Required Cash liquidity: $250,000 to $350,000
Total Investment Range: $50,000 to $75,000

Lloyd Staffing

2008-02-22T03:34:00.000-08:00

Franchise Description

The Lloyd companies have been fine-tuning our unique approach to staffing and employment since our inception in 1971. During this time frame, we have successfully served thousands of employers, job seekers and temporary employees. Our blended service concept truly embodies the entire spectrum of staffing, including temporary personnel, consultant referrals, contingency placement and executive search. And, because we recognize that the field of human resources has significantly changed its structure and focus over the years, we have also added several complimentary and compatible staffing components to our service line to enhance the support we provide to the business community.

Franchise Training and Support

Permanent and temporary operations for total synergy and maximum profit opportunities. Although we recommend that your franchise offer both disciplines, you may choose to enter each area one at time, with the ultimate goal of becoming a totally blended staffing service. An exclusive geographic territory. And, whenever possible, you'll have the opportunity to expand your ownership regionally with multiple offices. High splits on gross profits for temporary help business. Lucrative royalty arrangement for permanent placements. National client and candidate exchange program. In-depth training for you and your staff-in a variety of key areas.

Investment Requirements

Franchise Fee: $20,000
Required Cash liquidity: $350,000 to $500,000
Total Investment Range: $100,000 to $150,000

Sanford Rose Associates

2008-02-22T03:28:00.000-08:00

Franchise Description

Sanford Rose Associates' mission is to be the preferred provider of custom recruiting services to clients worldwide. We serve clients who are looking to fill middle- or upper-management positions in a variety of industries. SRA's focus on exclusive relationships with companies enables us to identify and carefully court the top people for each position.SRA's proprietary methodology, Dimensional Search(r), creates a unique three-dimensional profile that matches a candidate's personal skill level to job requirements, past experience to futur expectations and management style to corporate culture. Second is our history of excellence. The first SRA office opened in 1959 and began franchising in 1970, awarding a limited number of franchies each year to help ensure a high level of profesisonalism, performance and service that can best meet our clients' expectations. And, specializing in a particular industry or occupation, the profesionals in each office are experts in that field.

Franchise Training and Support

Initial mandatory training consists of a minimum of 12 days in the SRAI training center in Akron, Ohio, followed by a minimum of 3 days of on-the-job training at your office site. Training covers the Executive Search Process, Business Planning and Profit Goals, and Operations Training.

Investment Requirements

Franchise Fee: $41,000
Required Cash liquidity: $50,000
Total Investment Range: $75,000

@ Work Franchises Inc.

2008-02-22T03:22:00.000-08:00

Franchise Description

One of the most important aspects of the @WORK network is the relationship between the franchisee and the franchisor. We believe that maintaining a good relationship with our franchise owners is critical to their success. That belief is why we place such high emphasis on the standard of quality for the services, facilities, and personnel in each franchise operation. All of these elements combine to present a professional image to our clients and employees. Our open communication and meaningful relationships are what keep the system alive and vibrant. We must all be aware that through constant interchange of ideas and creative concepts we remain fresh and continue to grow. We maintain that the relationship between us is the essence of greatness. For this reason, we stress the significance of good franchise relations. We continuously strive to provide you with the assistance and support you need to make your @WORK franchise reflect the very best it can be. @WORK Personnel Services @WORK Personnel Services represents the most traditional niche in today's staffing marketplace. Through the placement of temporary and temp-to-hire employees predominantly in clerical and light industrial fields, the personnel market represents the largest and most developed of all staffing niches. As a form of outsourcing, the use of personnel services has become a preferred method of cutting costs and focusing on core business functions. According to a U.S. Chamber of Commerce survey, 98% of all companies use some form of personnel staffing. Overall, the temporary staffing industry has become the ultimate outsourcing service in America today. More than one-half of businesses say they use temporary employees for assistance during unexpected increases in demand for their products or services while many companies also rely on temporary employees to fill in for absent regular employees who are sick, on vacation, or on family and medical leave. The ability to cover staff vacancies with temporary employees until a regular employee is hired is also an important driving force for @WORK Personnel Services franchises. @WORK Medical Services With the shortage of nurses and healthcare professionals on the rise, companies are paying considerable fees to secure these employees.

Franchise Training and Support

As an @WORK franchise, you are an integral part of the company's future. @WORK gives each franchise a personal commitment to excellence. From helping make the franchise location decision to pre-opening and operating the office, @WORK provides a complete support system. Each franchisee receives a 5-10 day training session at our corporate office in Knoxville, Tennessee. This one-on-one training includes materials and courses to acquire a CSP (Certified Staffing Professional) designation from the American Staffing Association, sales and business development training, systems training, workers compensation training/certification, recruiting/employment training, and financial management training. In addition you will receive: On-going training programs, Field support personnel, State of the art front and back office system, Technical support center, Proprietary business planner, Comprehensive business operations manuals, Payroll funding for temporary personnel, Complete payroll and invoice processing, Internet based employee testing and screening software, Complete disaster recovery protection Regardless of the specific niche that interests you the most, by franchising through @WORK you receive the reputation, notoriety, and branding of a national franchise system along with the affiliation needed to secure those clients who would otherwise turn you away. Overall, @WORK provides an all in one, turn key operation with a proven method and manner of operation, complete with procedures, guidelines, methods, and most importantly, a track record of success.

Investment Requirements

Franchise Fee: $17,000
Required Cash liquidity: $20,000 to $75,000
Total Investment Range: $50,000 to $100,000

Snelling Staffing Services

2008-02-22T03:17:00.000-08:00

Franchise Description

We offer franchises to qualified individuals and entities to operate one or more personnel service businesses providing career placement, employee leasing, temporary, and Temp-To-Hire services. The franchised businesses are established and operated by franchisees under a combination of training, knowledge, methods and techniques for operating such a business.ith more frequent career changes and new types of job opportunities, the demand for staffing services has never been greater. As a matter of fact, The Bureau of Labor Statistics, a U.S. agency charged with tracking labor markets, says there will be 10 million more jobs than employees by 2010. By then the economy will support 167 million jobs and there will only be 157 million workers. These changing dynamics provide tremendous opportunity for you as a Snelling franchisee. Virtually everyone you come into contact with is a potential customer.When you join the Snelling team you are joining a business that has a proven track record. Over the years, Snelling has developed an operating system that provides franchise owners with the tools they need to be successful. Our signature SnellingSelect Customer Care Process insures an outstanding service experience that has clients returning to us again and again.

Franchise Training and Support

To assist you in marketing your business, Snelling has developed award-winning marketing programs which include print advertising, sales brochures, direct mail campaigns, power point sales presentations and public relations press kits. Our proven marketing programs are designed to represent Snelling as an industry leader and in turn support your local sales efforts.

Investment Requirements

Franchise Fee: $25,000
Required Cash liquidity: $50,000
Total Investment Range: $150,000

Express Personnel Service International

2008-02-22T03:13:00.002-08:00

Franchise Description

With nearly 600 offices worldwide, the company has enjoyed amazing success, annually exceeding industry growth trends. Express is consistently ranked by business magazines like Success and Entrepreneur as one of the best franchising opportunities in the country. 96% success rate over 24 year history. Franchisor has never been sued by a Franchisee over the Franchise Agreement. Express Personnel had annual sales in 2005 of nearly 1.6 Billion and 1.33 Billion in annual sales in 2004 of a $72 billion industry. Express is running ahead of the industry with over 22% in sales growth. Currently Express is the 5th largest Staffing Company in the US and the largest privately held fully franchised worldwide. The Benefits of Franchising with Express Include:

*Full service Franchise Agreement with exclusive territories
*Major Medical group policy through BCBS for Franchisees and family
*Low initial start-up investment

Franchise Training and Support

Offered every month and held at Express Personnel Service International headquarters in Oklahoma City, Oklahoma and in the field. Training is comprised of 2 weeks in Operations, Sales and Business Management sessions and one week in a regional field office, and one week onsite in franchisee's market. Lifelong learning and training is available to Franchisees and their staff at Headquarters, in the field, and on-line 24/7.

Investment Requirements

Franchise Fee: $30,000
Required Cash liquidity: $130,000 to $170,000
Total Investment Range: $130,000 to $170,000

Decor & You

2008-02-22T03:13:00.001-08:00

Franchise Description

Decor & You® gives you the opportunity to build a home-based business in the expanding field of interior decorating!

The industry's newest decorating franchise, Decor & You® features personalized service from professionally trained interior decorators and state-of-the-art computerized sampling. We provide our franchisees with a Regional Developer to support them through the developmental stages of their growing businesses and provide coaching and problem-solving assistance while tracking and nurturing their success.

A Growth Industry

The interior decorating field is a vast, exciting and exceptionally lucrative market in which to conduct business. Americans currently invest at least $60 billion annually on home furnishings. A recent study by the 2000 American Express Retail Index shows that over 30% of homeowners plan three or more home improvement projects a year. Decor & You® gives you the opportunity to build a home-based business in the expanding field of interior decorating. As a Decor Designer you will develop clients within your protected marketing area through proven methods that will ultimately position you as the local, resident expert on decorating needs.

Exploit your talents to grow a business doing something you love! Complete the short form below and we will tell you more about our regional and individual franchise opportunities.

Decor & You® Franchisees Are Talking!

"Words cannot adequately express how proud and pleased I am to be a part of the Decor & You® enterprise. The organization's commitment to superior client satisfaction drives all of its actions--something that truly sets it apart in today's competitive business environment. This commitment is evidenced by such things as the variety and quality of products and services available to the Decor Designers for their clients, the comprehensive training provided to franchise owners and the fantastic supportive infrastructure designed to ensure long-term success" - Amy Boesen, Decor Designer, NE

"As a first-time business owner, my experience with Decor & You® has been a positive one - a challenging, yet rewarding journey with the camaraderie and support of your peers having the same hopes and dreams of being a successful decorator. The training program offers a complete insight into becoming a professional interior decorator with comprehensive sales, marketing, advertising & business skills. The efforts of the Decor & You® system outlines a clear, progressive plan to maximize your productivity & achieve goals you did not dream possible." - Corrine Barone, Regional Developer, Southbury, CT

"After previously owning and operating an Interior Decorating Business as a sole proprietor with formal training, WOW was I surprised! I realized I didn't know as much as I thought. The training through Decor & You® has been and continues to be outstanding. It enables me to service my clients with confidence and expertise. As an independent decorator I was in business for myself and by myself. However, with Decor & You® , I am in business for myself but not by myself. Decor & You® is team oriented and success driven. Thanks for making my dreams come true!" - Michele Reed, Decor Designer, GA

"After 21 years in the travel industry I knew it was time for a career change. Owning my own business had been a long time goal, yet I wasn't sure what it would be or how I would get started. Friends have encouraged me to pursue a decorating career, but I was afraid to step out on my own until I found Decor & You® . They have a proven system that helps you succeed by allowing you to be in business for yourself, but not by yourself. I can't believe I own my own business and I'm doing something I love." - Judy Yablonski, Decor Designer, CT

Franchise Training and Support

Decor & You provides a CID certified professional education program for all franchisees, held at the Performance Enhancement Center in Southbury CT. An additional 3 day training program is provided for Regional Developers. <

Investment Requirements

Franchise Fee: $25,000
Required Cash liquidity: $20,000 to $50,000
Total Investment Range: $50,000 to $75,000

Nationwide Floor & Window Coverings

2008-02-22T03:13:00.000-08:00

Franchise Description

America`s premier mobile floor & window coverings franchise. We provide free, shop at home service to today`s time-starved customer. Low overhead, national account pricing, comprehensive training, proven marketing programs and the largest exclusive territories in the industry allow us to be ranked as one of the best home based franchises in both Entreprenuer and Income Opportunities Magazine. In addition, we were ranked in the top 200 franchise listing by Success Magazine.

Franchise Training and Support

You will start with 6-8 weeks of pre-training at home. Videos, manuals, audio tapes and products are reviewed. This will be followed by one week of hands on formal training at the franchise heaquarters in Milwaukee, Wisconsin. Extensive ongoing support, 24 hour toll free help line, intranet and workshops are also provided to help you succeed. Executive Growth Package available.

Investment Requirements

Franchise Fee: $40,000
Required Cash liquidity: $35,000 to $90,000
Total Investment Range: $35,000 to $90,000

Franchise Book at Amazon with Discount Price

2008-02-22T02:07:00.000-08:00

Bank Loans for Buying a Franchise

2008-01-25T08:02:00.000-08:00

By Jim Wilson

The time has come. The decision has been made; you are going to leave corporate life, buy that franchise and be your own boss. Great! Have you thought about how you will finance it yet?

To effectively apply for and land a commercial loan for your franchise, you must understand the commercial lending business in order to get the best results. My goal here is to introduce you to commercial lending and provide insight into how banks approve and make loans so that you can approach commercial lending with a better chance of approval.

Maybe the place to start is the bank's perspective on lending money. Most new franchisees are absolutely positive of their eventual success with their franchise business and want the bank to share in that success by approving a loan for the needed capital. From the bank's point of view, however, all loans look the same. A bank's return on a loan to a start-up is the percentage rate charged just like it is on a loan to the biggest corporation in America. The bank only wants to control getting the interest on the loan and getting its money back.

The bank distinguishes borrowers based on how likely the borrower appears to be able to make the payments under the note. And when the likelihood of repayment seems diminished, the bank will look for additional and stronger collateral and guarantees to be sure that if the borrower does not make the payments the bank can get its payments from selling the collateral or from guarantors.

In addition to collateral and guarantors, banks often turn to the United States Small Business Administration (SBA) for a guaranty on the loan. The SBA, by providing a guaranty of 80-85% of the total loan balance, makes it easier for a bank to approve a small business borrower that does not present the best package for a loan. If the borrower fails to make loan payments, the bank turns to the SBA for payment of up to 80-85% of the initial loan, thereby lessening the risk the bank is taking on a new franchise owner.

SBA loans have a number of attributes that must be understood to be used successfully by a small business owner. The first is that the SBA does not lend money; it only guaranties a portion of the loan so that the bank can more easily take the risk in making the loan to a small business. If the loan fails, the most the bank will lose is the portion not covered by the SBA guarantee. And the SBA is not frivolous in granting its guarantees. If approved for an SBA guaranteed loan, the SBA will take security interests in business furniture, fixtures and equipment; will ask for personal guarantees of the principals of the business (generally anyone holding in excess of 20% of the equity of the business); and will take a security interest in the business principals' personal homes. If the loan fails, the SBA will recover against any or all of these assets to recover the money they pay to the bank on the loan under the guaranty.

Applying for a business loan requires that the business owners or managers develop a full plan for how much money they will need, how the money will be spent, and what the return to the business will be after the money is spent. In looking at start-ups, the necessary costs normally include build-out/renovations of the business site, furniture fixtures and equipment ("FF&E"), inventory, salaries and working capital. Considering a franchise restaurant for example, there might be build-out of $50,000, FF&E including kitchen equipment of $150,000, initial inventory of $30,000, three months of salaries of owner/manager, four cooks, eight wait staff at $80,000 and $25,000 of working capital for a total of $335,000.

Banks with an SBA guarantee will likely lend about 80% of the total project, or in this case $268,000, leaving the owners to input $67,000 of the capital required. Generally at this point, small business owners begin to panic. Coming up with $67,000 in cash seems like trying to come up with the whole $335,000. Understanding how the banks and others look at some of the project costs can greatly improve the situation however.

The first thing to consider under the circumstances is the build-out of the restaurant. Depending on the demand for real estate, a landlord will sometimes provide build-out, or at least a portion of build-out, in exchange for higher rent payments. If the rent for the restaurant was originally $3,000 per month, the landlord might provide $40,000 of the build-out for a $400 per month increase in rent on a ten-year lease. Now the restaurant owners have decreased the project costs to $295,000 and the cash down payment (20%) to $59,000.

The next change the new restaurant owner might consider is leasing the FF&E instead of buying it. There can be very good practical business reasons to lease instead of owning FF&E. If technology is constantly improving in your business such that equipment needs to be replaced regularly, leasing can be a better alternative to purchasing because the equipment can have a fixed period of usefulness in your business before it is replaced by newer technology. If the FF&E is used hard by your staff and customers so that it wears out over a short period, leasing can make it easier to replace equipment on a fixed cycle. If your FF&E has a long life in general or if the technology has a long life cycle, purchasing the equipment can be a better way to invest in your business by investing in the equipment of the business, though.

If the owners of our franchise restaurant do lease the FF&E, however, they will reduce their project costs by $150,000 to $185,000 and if they also get $40,000 in build-out costs from their landlord the project costs are now $145,000 and cash required is $29,000. Start-up costs can be further reduced by negotiating payment terms on some of the inventory needed to get the restaurant opened.

Do not be mistaken that these kinds of changes come without a price. The build-out change will increase monthly rent payments; the equipment lease payments now represent a monthly payment that was not part of the business plan at first. Of course, the loan payment is now lower too. The business now must make a higher cash flow each month to support these payments, but the cash to get started is less.

Many factors will affect the analysis of making these changes in a business plan. What are the expected trends in interest rates? How long is the lease on the FF&E and what king of buy-out provisions exist at the termination? These are just some of the aspects one must consider in gauging financing options for a franchise.

Jim Wilson is a small business attorney in Richmond, VA. He helps people start, buy/sell and finance businesses, purchase franchises and franchise their existing businesses. Jim graduated from the U.S. Naval Academy (1980) and the University of Richmond Law School (1992). Email: Jim@Wilsonstoyanoff.com.

Could "Biz Opp" Offers Be Out for Your Coffers?

2008-01-25T08:00:00.000-08:00

Courtesy of the Bureau of Consumer Protection, Federal Trade Commission

A-1 Pay phones. $160K (thousand) per year potential … Premium locations.

Huge profits. Distribute candy mints, part-time, full-time …

Work 6 hours/week. Earn 45K+/year. Must sell!

Big $$. No competition. Low investment.

It's easy to see why ads for business opportunities like these appeal to consumers looking to make extra money: They promise good pay for little effort. But, as many consumers who have answered these ads have learned -- and the Federal Trade Commission (FTC) has found -- many business opportunity promotions are nothing but scams that take consumers' money up front and fail to deliver on the promises.

If you're a prospective business owner, what can you do to make sure this doesn't happen to you? First, do your homework, including getting pre-investment information in writing. Under the FTC Franchise Rule, most potential business purchasers have the right to receive information about the earnings potential of a business opportunity. Most legitimate business opportunity promoters don't hesitate to give this information.

Second, research other aspects of the business' performance. One way to do that is to personally interview other people who have bought into the program.
The Usual Suspects

Spotting fraudulent business opportunities is no easy task, but there are certain clues: One may be the type of business opportunity being advertised. Fraud is most often associated with vending machine, display rack, pay phone, medical billing, work-at-home, and some Internet-related business opportunities.

Promotions for fraudulent business opportunities often appear in the classified pages of daily and weekly newspapers and magazines, and online. They also may be marketed in television infomercials and commercials.

The ads use similar bait: Good pay (say, $160,000 a year) in a short period (weeks or months) for little effort. They trumpet an ideal work situation -- the ability to set your own hours, be your own boss, and work from home.

What the ads don't say is that the people behind these so-called business opportunities aren't really interested in helping you run a successful business: They're interested only in getting your money. To get you to buy in, they may mislead you about the business opportunity's earnings potential and promote a "phantom" opportunity that has little chance of succeeding -- for example, a business with little or no market. They may doom your chances of success by providing cheap, low-quality or out-dated merchandise; poor quality equipment (such as defective pay phones and vending machines) and locations that get little foot traffic, like rural gas stations, out of-the-way snack shops or stores in deserted strip malls.

While fraudulent business opportunities prey on consumers, they also harm legitimate businesses. To evade the law, promoters of fraudulent business opportunities often jump from one city to the next, leaving behind unpaid bills for newspaper ads, office rent, phone bills, mail delivery, and other services.
An Ounce of Prevention

If you're considering a business opportunity, do your homework first:

* Look at the ad carefully. If it claims buyers can earn a certain income, then it also must give the number and percentage of previous purchasers who achieved the earnings. If an earnings claim is there -- but the additional information isn't -- the business opportunity seller is probably violating the law.
* Get earnings claims in writing. If the business opportunity costs $500 or more, then the promoter must back up the earnings claim in a written document. It should include the earnings claim, as well as the number and percentage of recent clients who have earned at least as much as the promoter suggested. If it's a work-at-home or other business opportunity that involves an investment of under $500, ask the promoter to put the earnings information in writing.
* Study the business opportunity's franchise disclosure document. Under the FTC Franchise Rule, most business opportunity promoters are required to provide this document to potential purchasers. It includes information about the company, including whether it has faced any lawsuits from previous purchasers or lawsuits alleging fraud. Look for a statement about previous purchasers. If the document says there haven't been any previous purchasers but the seller offers a list of references, be skeptical: the references probably are phonies.
* Interview each previous purchaser in person, preferably where their business operates. The FTC requires business opportunity promoters to give potential purchasers the names, addresses and phone numbers of at least 10 previous purchasers who live the closest to the potential purchaser. Interviewing them helps reduce the risk of being misled by phony references.
* Contact the attorney general's office, state or county consumer protection agency and Better Business Bureau both where the business opportunity promoter is based and where you live to find out whether there is any record of unresolved complaints. While a complaint record may indicate questionable business practices, a lack of complaints doesn't necessarily mean that the promoter and the business opportunity don't have problems. Unscrupulous dealers often change names and locations to hide a history of complaints.
* If the business opportunity involves selling products from well-known companies, call the legal department of the company whose merchandise would be promoted. Find out whether the business opportunity and its promoter are affiliated with the company. Ask whether the company has every threatened trademark action against the business opportunity promoter.
* Consult an attorney, accountant or other business advisor before you put any money down or sign any papers. Entering into a business opportunity can be costly, so it's best to have an expert check out the contract first. If the promoter requires a deposit, ask your attorney to establish an escrow account where the deposit can be maintained by a third party until you make the deal.
* Take your time. Promoters of fraudulent business opportunities are likely to use high-pressure sales tactics to get you to buy in. If the business opportunity is legitimate, it'll still be around when you're ready to decide.

Reporting Possible Fraud

If you suspect a business opportunity promotion is fraudulent, report it to:

* the state attorney general's office in the state where you live and in the state where the business opportunity promoter is based.
* your county or state consumer protection agency. Check the blue pages of the phone book under county and state government.
* the Better Business Bureau in your area and the area where the promoter is based.
* the FTC. File a complaint online at www.ftc.gov or call toll-free 1-877-FTC-HELP (1-877-382-4357).

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the market place and to provide information to help consumers spot, stop and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357). The FTC enters Internet, telemarketing, identify theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundred of civil and criminal law enforcement agencies in the U.S. and abroad.

Source: Federal Trade Commission, Consumer Protection Bureau

Healthy Fast Food: Oxymoron or Competitive Advantage?

2008-01-25T07:58:00.000-08:00

by Patricia Schaefer

"Traditional marketing says fill a need and you'll be successful. America has a huge need to eat healthy and no one's filling that need in the fast food market... not really." So says Jaynie Smith, author of Creating Competitive Advantage and president of Smart Advantage, Inc.

Smith is right about the huge need for Americans to eat healthy: According to the National Center for Health Statistics, 66.5 percent of adults are overweight or obese; 32 percent of adults obese. Just as alarming if not more so, childhood obesity is escalating; tripling since the 1970's. 17 percent of adolescents and 19 percent of children are overweight.

Increasing demands, legislation and litigation directed at America's fast food industry is now at fever pitch. Every day headlines abound on the issue of our fast food giants and the customers and food they serve:

* "America's Deadly Junk Food Addition"
* "Wendy's Significantly Cuts Trans Fats"
* "NYC Councilman Proposes Limiting Fast Food"
* "KFC Sued for Unhealthy Fat"

When Smith says there's a need and niche for healthy food in the fast food market, there's good reason to listen. Clients who take her Smart Advantage workshop typically increase their company revenues by double digit growth within six to 12 months after completion. True to her book title, Smith does in fact know a thing or two about creating that "competitive advantage."

"If someone would create a chain with healthy food, and I don't just mean healthy food that tastes bad (like junky iceberg lettuce) - but healthy food that tastes wonderful -- they would have complete competitive advantage in a new niche," says Smith. "And there is a niche completely unserved out there in the fast food market."

Take the beleaguered fast food chain KFC. Their latest conundrum is a recent lawsuit targeting its use of cooking oil with trans fat, today's "dirty word" in the world of healthy eating. Although reviewing alternative oil options, KFC has yet to find another oil that produces as good a taste. In contrast, Wendy's -- often referred to as the "fast food innovator" -- just announced that it is cutting trans fat from its menu, switching to a new blend of corn and soy oil in August. Wendy's will be the first fast food chain to switch from trans fat to a healthier oil.

Smith says there are a couple of things KFC and other fast food franchises can do to create a competitive advantage. One is they can offer their customers an option in menu items; for example, the traditional KFC chicken or "KFC light ('only three grams of fat')." The second solution according to Smith is for fast food franchises to have a separate stand-alone chain that has healthy offerings that taste good.

"Statistics show that it is the higher educated, higher income people who most focus on being healthy," noted Smith. "Therefore, if you have a product chain that differentiates its product to be healthier, price would not be an issue because these are the folks who want to eat healthier and they'll pay for it. I know when I'm in an airport I don't care what it costs if I can find something healthy."

Past fast food chain attempts at "healthy" have had mixed results. Do you remember McDonald's McLean Deluxe hamburger introduced in 1991? The low-fat McLean burger's taste was certifiably terrible and was subsequently withdrawn from McDonald's menu. Subway on the other hand has had great success with their "Subs with 6 grams of Fat or Less" campaign (by the way, they also contain no trans fat). A recent try of their 5-grams-of-fat Sweet Onion Chicken Teriyaki sub was very pleasing to the palate. Toasted and customized with added veggies, it is heartily recommended. With 26,044 restaurants in 84 counties, Subway's success in part is due to the fact that it promotes and provides "an alternative to traditional greasy fast food."

So, tell me. It's the year 2010. You walk into a Boston Market. From these two menu offerings (the second is presently fictional), which would you choose?

* Meatloaf with a side of creamed spinach and sweet potato casserole, and cornbread (1420 calories and 79 grams of fat)?

OR

* Grilled Salmon with a side of seasoned roasted vegetables and a basil-chive red potato mash (471 calories and 15 grams of fat)?

When looking at today's fast food calories and nutritional values it's no wonder then that the Food and Drug Administration (FDA) recently issued a report on away-from-home foods, with recommendations on how restaurants and carry-out chains can help prevent overweight and obesity. These recommendations include:

* Increase the availability of lower-calorie products, menu items and meals.

* Shift the emphasis of marketing. The marketing of lower-calorie and less-calorie-dense food should increase accompanied by a reduction in marketing that highlights higher-calorie (or calorie-dense) foods or encourages large portions.

* Strengthen and/or create education and promotion programs regarding away-from-home foods that promote the consumption of fruits, vegetables, no- and low-fat milk and milk products, whole grains, and foods low in saturated fats and trans-fatty acids.

* Away-from-home food establishments should provide consumers with calorie information in a standard format that is easily accessible and easy to use.

"If somebody would get both down; the fast and the food -- the fast and the "good" food down -- then you'd really have something," says Smith. "You'd have a competitive advantage that none of them could catch in the short term."

Let's hope -- for the future health and wellbeing of the American public -- that someone out there is listening.

Copyright 2006, Attard Communications, Inc.

You can read an excerpt from Jaynie Smith's book, Creating Competitive Advantage on BusinessKnowHow.com.

To find out more about Smart Advantage, Inc. or Jaynie Smith's book Creating Competitive Advantage, go to www.smartadvantage.com.

Multi-Unit or Multi-Concept?

2008-01-25T07:52:00.000-08:00

By Michael H. Seid and Kay Marie Ainsley, Managing Directors
Michael H. Seid & Associates, LLC

Question: Three friends and I have decided to pool our investment dollars and buy some franchises. Our backgrounds are financial, sales, and business administration. We have investigated several different franchise opportunities and have enough money to either buy six to 10 locations from a single franchise or one to two locations from three different franchises. Our question: Is it better to own several units of one franchise or to own one or two of several franchises?

Answer: You may find that some of the franchisors you are considering will not allow you, under their standard agreements, to own or operate other businesses while you are a franchisee of their system. Many will not offer to sell you a franchise if they know in advance that your full attention, at least in the beginning will not be focused on their brand, especially if your team is going to be working on several new concepts at the same time. Make certain that all of the options you expect to have actually exist.

Putting that all aside, it sounds as though you have put together a formidable management team. Unfortunately there is no "right" or single answer to your question. There are pros and cons to each option and you are going to have to make some trade offs in making your decision.

Many franchisors offer an area development plan to those potential franchisees who are willing to commit to opening a specified number of units within a defined territory and in accordance with an agreed upon schedule. They often provide several benefits in exchange for the franchisee's commitment. Typically, these incentives include some of the following:

* An exclusive territory for a defined period of time
* Reduced opening fees -- generally you will find that initial fees are reduced on a sliding scale. The more units you commit to often will determine the "average" fee you will pay.
* Reduced royalty if the franchisee provides support to their own units
* Reduced royalty based on total sales volume
* Ability to open additional units within the territory during the term of the agreement with no or lowered initial fees once the initial development obligations are met.

With multiple units you may be able to realize significant operating efficiencies:

* Shared labor among the locations you own
* Commissary and internal warehousing and distribution costs
* Purchase and other cost of goods benefits
* Advertising efficiencies
* Critical mass benefits including location and lease considerations from landlords
* Improved operations because of the ability to establish a strong internal management and training infrastructure

These are just a few of the benefits multi-unit operators can achieve. In addition to these benefits, owning several units of a single franchise often enables you to provide a career path for key employees. This in turn eases the burden on staff recruitment and can increase your employee retention rates.

You're also going to be "a bigger fish in the franchisor's pond." With more locations, you may have a louder voice with your franchisor and more influence among your fellow franchisees.

Of course, you will be putting all your eggs in one basket. Remember that not all franchisors are created equal. Some franchisors succeed while others disappear from the marketplace. It will be very important to evaluate both the consumer demand for the product or service you will be offering and the stability and track record of the franchisor.

Some franchise systems are truly only geared to single unit ownership. They cannot support either paid unit management or the establishing of a back-of-house support organization to run the multiple locations. Either the bottom line is insufficient to support both the royalty and other payments to the franchisor or the royalty or other payments to the franchisor are too high for successful multi-unit operations. You need to be certain that the franchisor you select has a system designed to allow profitable operation by a multi-unit owner.

Selecting multi-concepts will definitely allow you to spread your risk. You may also pick up intelligence and skills in one business that will improve your performance in another business. And, you may realize a higher overall return with a diversified portfolio -- one really hot concept can make up for a lack of performance elsewhere.

The multi-concept option may work best if the concepts you select either:

* Are within the same general industry; i.e., food, clothing, technology
* Create synergy among themselves; i.e., pre-school and children's clothing, elder care and home services
* Are all service businesses or have other similar attributes that can be leveraged over the brands; or
* The different brands have differing seasonality that can improve your internal cash flow

By leveraging concepts you may be able to create efficiencies that can be used across brands. This will likely be in areas of administrative support (payroll, etc.) and warehouse and distribution, among others.

In addition to gaining experience from one brand that can be used on the other, you may be able to maximize real estate. Landlords like to work with tenants that can deliver multiple concepts. They can subdivide larger space to fit your multiple brands or can simply appreciate the fact that you can deliver to them efficiencies that are not possible from single-concept tenants.

If you decide on the multi-concept option, we would suggest that you read your agreements very carefully to make sure the franchisor allows you to operate other businesses during the term of your agreement. Make certain that your definition of competing business and the franchisor's are the same. Have a qualified franchise attorney work with you to coordinate and provide guidance on the differing requirements of the various franchisors. These types of transactions tend to become complicated.

One last piece of advice: Learning how to run any new business and managing the opening of that new business generally requires more time, effort, money and skills than anticipated. While your team may bring many talents and skills to the new business, getting one concept off the ground before you take on another concept is going to be essential.

Remember to:

* Select compatible opportunities
* Stay geographical
* Look for seasonality benefits
* Develop your support infrastructure to leverage across brands if possible
* Pace your investments and development obligations
* Make certain that each concept can sustain its Return on Investment independent of contributions from the other
* Get great business and legal support to give you guidance in specialized areas

Take your time and Good Luck.

Michael H. Seid & Associates, LLC (MSA) is a domestic and international franchise advisory firm. Seid is also the co-author of Franchising for Dummies. To find out more about MSA and the services they provide, go to www.msaworldwide.com.

Understanding the Franchise Contract

2008-01-25T07:50:00.000-08:00

Source: U.S. Small Business Administration

The franchise contract, like the Uniform Franchise Offering Circular (UFOC), is a very important document. The contract is probably the most important document in the transaction process. It is a legal commitment which is binding on both the franchisor and franchisee. In the franchise contract, the franchisor's promises must be presented to the franchisee in writing and subjected to careful scrutiny. During this stage of the buy/sell process, the franchisee must have competent legal advice regarding the meaning and effect of the contract.

When reviewing the contract, you and your attorney, will need to determine if it confirms what you have been told. If you find improprieties in the contract at this point, you may decide to withdraw from the transaction before committing your time, energy and money to an agreement that may not be beneficial for you. If, however, you choose to continue with the process, you may be able to negotiate favorable terms, but remember by signing the contract, you are legally bound by the provisions of the agreement.

The franchise contract consists of two main parts: 1) the purchase agreement and 2) the franchise or license agreement. For convenience, occasionally the franchise transaction is split into two stages. When this happens, some franchise companies have two contracts, one for each stage, rather than a single contract. While it isn't necessary to have two contracts, it can be the better method where there is a comprehensive equipment and initial services package.

The purchase agreement of the contract covers:

* the franchise package
* the price
* the services to be provided.

The franchise or license agreement covers:

* the rights granted to the franchisee
* the obligations undertaken by the franchisor
* the obligations imposed upon the franchisee
* trade restrictions imposed upon the franchisee
* assignment/death of franchisee
* termination provisions.

A brief explanation of each agreement follows.
PURCHASE AGREEMENT

1. The franchise package. Consists of an equipment or inventory list. This list must contain all the items the franchisee has been told to expect. Some franchise companies regard this list as being confidential and stipulate in the contract that it must be so treated.

2. The price. The price and the manner of payment will be specified. This may be cash on signature, although rare. More often a deposit is required on signature with payment of the balance to follow on delivery of the equipment or at other stages of the transaction.

3. The services to be provided. This section outlines or lists the franchisor's responsibilities to the franchisee. Those services the franchisor is required to provide the franchisee before he or she is ready to open for business are called the initial services. Those services the franchisor provides periodically are called continuous services. A more detailed explanation of the services provided by the franchisor are included in the next section on the license agreement.
FRANCHISE OR LICENSE AGREEMENT

1. The rights granted to the franchisee. The franchisee will be given the right as it applies to particular circumstances. As a franchisee there are certain rights that are extended to you.

Your rights include:

* use of trademarks, trade names and patents of the franchisor.
* use of the brand image and the design and décor of the premises developed by the franchisor.
* use of the franchisor's secret methods.
* use of the franchisor's copyright materials.
* use of recipes, formulae, specifications and processes and methods of manufacture developed by the franchisor.
* conducting the franchised business upon or from the agreed premises strictly in accordance with the franchisor's methods and subject to the franchisor's directions.
* guidelines established by the franchisor regarding exclusive territorial rights.
* rights to obtain suppliers from nominated suppliers at special prices.

2. The obligation undertaken by the franchisor. This item in the contract tells prospective franchisees what the franchisor will do for them both before and after start-up. That is why this item frequently refers to specific contractual obligations detailed in the franchise agreement, which is attached to the UFOC.

3. The obligations imposed upon the franchisee. Certain obligations are required of you by the franchisor. These obligations include:

* to carry on the business franchised and no other business upon the approved and nominated premises.
* to observe certain minimum operating hours.
* to pay a franchise fee.
* to follow the accounting system laid down by the franchisor.
* not to advertise without prior approval of the advertisements by the franchisor.
* to use and display such point of sale advertising materials as the franchisor stipulates.
* to maintain the premises in good, clean and sanitary condition and to redecorate when required to do so by the franchisor.
* to maintain the widest possible insurance coverage.
* to permit the franchisor's staff to enter the premises to inspect and see if the franchisor's standards are being maintained.
* to purchase goods or products from the franchisor or his designated suppliers.
* to train your staff in the franchisor's methods to ensure that they are neatly and appropriately clothed.
* not to assign the franchise contract without the franchisor's consent.

4. Trade restrictions. The restrictions imposed upon a franchisee may prohibit him or her from carrying on a similar business except under franchise from the franchisor, taking staff away from other franchisees, carrying on a similar business in close proximity to other franchised businesses within that chain, and continuing, after termination of the franchise contract, to use any of the franchisor's trade names, secrets, and so forth.

5. Assignment/death of the franchisee. The franchisee should ensure that in the event of death his/her personal representative or dependent will be able to keep the business going until one of them can qualify as a franchisee, and that arrangements can be made to keep the business going until a suitable assignee can be found at a proper price.

6. Termination provisions. The termination of a franchise is an event heavily regulated by the franchise laws of 17 states. Franchise relationship laws in many states specify the conditions under which a franchisor may terminate or refuse to renew the franchise, imposing a standard of "good cause," "reasonable cause" or "just cause" as defined by those laws. Minimum advance notice usually has an opportunity to cure the default and avoid terminations; notice ranges from five days to 90 days. Many states also specify circumstances under which the standard notice and cure requirements need not be met.

In view of the close working relationship that must exist between the franchisee and franchisor all provisions must be stated clearly in the contract. In this transaction, no small print should exist. Make sure, if possible, the franchise contract contains provisions that are favorable for both you and the franchisor.

Understanding the Franchise Contract reprinted from and courtesy of the U.S. Small Business Administration (from the SBA's Workbook entitled "Is Franchising for Me?")

How to Avoid Buying a Franchise that Might Go Under

2008-01-25T07:46:00.000-08:00

By Lori Kiser-Block

Statistics show that your chances for success as an entrepreneur are greater if you start your new business as a franchisee rather than opening a business all on your own. However, there are times when even franchise systems aren't successful and around for the long term. Of course there are no guarantees but you can boost your chances for finding a franchise with stability by doing some additional research.

A franchise company usually begins when someone has a desire to bring a product or service to a wider audience. One or more units, often called company stores, are opened so the product or service can be tested, refined, retested and improved. Once the company stores have experienced some success, the company will begin early franchising efforts.

Opening the first 10-25 franchised units is often the most difficult phase for a franchisor. The company will have to learn how the concept works in a variety of locations and with a variety of franchisees. Marketing can be tried on a larger scale and there are hundreds of details to be modified, changed, refined and locked down.

Once this initial group of franchisees experiences financial success, the franchisor will open up franchising to a larger group. If you are a risk taker, feel free to jump in at any of the earlier stages of a franchisor's development. If you'd rather avoid risk, confine your research on potential franchise opportunities to those companies that have survived the initial stages and have at least 25 or more successful franchise operations in place.

Yes, there are companies that are solid gold from inception. But as a general rule, the earlier you get involved in any business, the greater the risk. Not only that, by joining an established company you will also avoid many of the bumps along the road. A franchise that has reached a modest number of successful franchisees will have added sufficient infrastructure to support you and the marketing/branding efforts will help draw customers to your location.

By focusing your search on those companies that have reached this stage of development, you can increase your chances of success in finding one that will be around for the long term.
Validating the Franchise

Another way to increase your chances of franchisee success is to talk to the existing franchisees in a system. This cannot be overemphasized. The very best way to learn about a franchise system is to talk to a variety of franchisees and ask them very pointed questions, such as, "Have you reached your financial goals as a franchisee?" You want to find out actual earnings, not pie-in-the-sky expectations. New franchisees are notorious for having unrealistic expectations about the profitability their business will experience, until they've actually been in business for awhile.

The next question to ask existing franchisees is about the overall attitude of the franchisor about the business itself. What you want to see here is an attitude from the franchisor that their success is based on the success of the franchisees. In general, the more the franchisor is willing to help the individual franchisees become successful, the greater the longevity of the company.
Support from Franchisor

Once you've talked to existing franchisees and gotten good feedback about the company you will want to take a close look at the infrastructure of the franchise company. Your success as a franchisee will depend on the dedication and expertise of the operational support people so find out how long they've been with the franchisor and what previous experience they've had. Your conversations with existing franchisees should help you learn whether these people are competent and accessible but you will also want to talk to these support people yourself to be assured of compatibility. The operations and support people are there for your benefit and you want to make sure you will get your money's worth out of the association.

While there are no guarantees that a franchised company will be around for the future, there are ways to position yourself for a greater chance of success. When doing your research, keep in mind that a company that has reached at least a modest number of units (a minimum of 25 is suggested) will have a better chance of long-term survival than one that is new to franchising. If that company also has happy and successful franchisees and the right attitude toward mutual success, then you should feel comfortable the company has a very good chance of survival.

When making a decision as important as purchasing a franchise, you definitely want to be sure that the company will be around for the long term and that you will get the full benefits of being part of a franchise system. The bottom line is that just like any business, franchise companies can also fail. However, you can minimize your chances of joining a franchisor that won't be around by doing a complete and thorough investigation of the company. This will take more work on your part but your reward is that you will be better protected from buying a franchised business that might go under.

Lori Kiser-Block is Vice President of FranChoice, a national network of franchise consultants that provide free guidance and advice to qualified individuals in the United States searching for franchise opportunities that match their personal interests and financial qualifications.

The Best, Worst and Most Surprising Things About Being a Franchisee

2008-01-25T07:45:00.001-08:00

by Patricia Schaefer

What have you personally found has been the best thing about being a franchise owner? What have you personally found has been the worst thing about being a franchise owner? Was there anything that surprised you about being a franchise owner?

These are the survey questions Franchise Trade asked franchisees across the U.S. Franchisees are from franchise systems large and small, in a variety of industries, and located in all regions of the nation. All responses were anonymous so franchisees would feel free to "tell it like it is." Accordingly, the names of franchisees and their franchise systems are not given in order to protect franchisees' identities.

What these franchisees had to say is a fascinating snapshot of a frank "unhyped" reality of what it's like to be a franchisee today.
What have you personally found has been the best thing about being a franchise owner?

The price of advertising is cheaper than if I had a business of my own.

The best thing has been the product itself: The brand sells itself, and the product sells itself.

The franchise support system is great. Whenever I have a question, I can just pick up the phone and Support staff are available with the answers.

The whole system of the franchise has been great. Everything is ready to use from beginning to end. No headaches.

The best thing about being a franchisee is working for myself.

The research the franchisor has already done and the fact that it's a proven method is great.

The support from Corporate is the best.

There are several great things about owning my franchise:

* I get to dance for a living.
* I can do all the preparation at home -- working around my family obligations.
* I love the community of women that I've met professionally. I love the clients and my fellow instructors.
* The company encourages and provides opportunities for extensive networking.

There is no best thing. Franchising for me has been a bad thing.

Every six months in my previous job, I was worried about being downsized by the large corporation I worked for. The best thing about being a franchise owner is being able to rely on myself, and not having to rely on a large corporation for my job security.

I love the flexibility my franchise allows and being my own boss.

The best thing about being a franchise owner has been the national recognition though collective advertising, and the support system (i.e., if I have a question, can always get assistance).

Having had no prior experience as a business owner, the best thing has been everything that comes with buying into a franchise system -- it really helps.
What have you personally found has been the worst thing about being a franchise owner?

I'm required to buy the product line that I sell to my customers from my franchise company. I feel the costs are unfairly high for the products, so my revenues are lower than I would have liked or expected.

The worst thing is my territory -- I don't have enough. If I had more territory, I could be earning more.

Just because you buy a "franchise" doesn't mean that their product is well-known in your particular area. Although you're buying into a brand, it can be somewhat like starting from scratch in your own business. It's been tough for me to brand a product that virtually no one in my area knows about. There's a whole range of franchise brand awareness; from a brand like McDonalds to other lesser-name brands. I've needed to spend more dollars on marketing than I anticipated.

I don't really have a worst thing. The only negative I could say is that as a franchisee, you have one more check above you; you have to answer to someone else. The few times I have heard from Corporate about a customer complaint, it's been easily resolved, so I really haven't had a problem.

The start-up costs were higher than expected, and taxes on small business are very discouraging.

Revenues aren't as good as I expected. I took over a franchise from another franchisee, and in hindsight realize I didn't know all the questions to ask this franchisee in terms of specific details regarding incoming revenues. There's a fairly short period of time -- a window -- to perform research. I did have an accountant, but feel I still needed better guidelines when looking through records.

The limitation in local advertising has been the worst thing. Having a well-known brand, national awareness and word-of-mouth is great. Things though are different on the local level. If I advertise in my local newspaper, someone else in the franchise also has their territory in the paper's distribution area. My solution has been to advertise only within my territory; i.e., sending mailings only to particular zip codes.

The money is bad:

* We pay 20% off the top to the corporation.
* The rent for commercial space in my area is prohibitive.
* Clients pay a relatively small amount to take classes.

I feel I was misled by Corporate. This industry is very expensive. I didn't get the right information -- the costs, everything. I have to buy from a particular vendor and the costs are exorbitant.

In business for just over a year, I'm not making nearly as much as I expected. I do though anticipate revenues to get better within the next year or two.

The worst thing has been the employee turnover.

The royalty structure is pretty costly. I've been a franchisee for 13 years, and at first I felt like I was getting something for my money. After a few years, though, I didn't need anywhere near the same level of support and now I feel like I'm not getting my money's worth.

Following requirements, whether I like it or not, has been the worst thing; i.e., where the advertising fees I pay to Corporate are spent.
Was there anything that surprised you about being a franchise owner?

What surprised me was the degree of control the franchisor has over us (the franchisees). I find the degree of control excessive.

Temper your enthusiasm. I did my research: great idea, great product, and people I surveyed loved the idea. Additionally, my research showed that business was pouring in to the already established corporate stores. But there's a difference between people liking the idea and buying the product (which has a significant price tag). With my franchise being four hours away from Corporate stores, brand recognition is practically nil and revenues thus far have been less than I anticipated. A big surprise.

I was pleasantly surprised with the level of support that the franchisor provides. Everything is ready for the franchisee, with the franchisor as a helping and guiding force.

I was surprised by how much we have to pay in taxes as a small business.

No surprises. I did a lot of research. I like the structure and support of a franchise, and like working with a large corporation. The franchisor sends mentors out; I can call my sister stores -- it's like a family.

The franchisor was very clear about their policies, so nothing was a surprise.

I was surprised by the amount of work required to produce and keep producing classes.

There was nothing that surprised me about being a franchise owner.

I was surprised by how expensive everything is. I have to buy from Corporate -- everything is overpriced.

Prior to purchasing this franchise, I had only been an employee. I had no experience supervising other employees. I was very surprised to find how difficult it is to select, supervise and motivate employees so that they will perform necessary tasks to my satisfaction.

Nothing really surprised me. It's pretty much what I expected.

I was surprised to find that being a franchise owner in a good franchise system does not guarantee results. I have found that it is the franchisee's own skills, ambition and abilities that are the strongest factors in determining the success of a franchise.

Nothing comes to mind as far as surprises.
A few findings and conclusions

Most of the franchisees I was unable to reach were absentee owners, and there were many. Their managers were running the daily operations, and owners I was told came in to the store, for example, only "on Thursday mornings." Business experts often cite the risks of absentee ownership, but it appears that absentee owners comprise a significant portion of today's franchisees.

The individuals who cited franchise support as being "the best thing" were from both newly and long-established franchise systems. This is encouraging news for franchisees seeking to purchase a franchise that's a "new kid on the block."

Many of the "worst things" franchisees named were things that probably could have been found out had they done their homework a little better. In fact, many franchisees admitted that "in hindsight," they could have done a better job of getting all the needed facts about the franchise.

Based on our findings, it would serve prospective franchisees well to thoroughly research potential franchises, and then some -- preferably with the assistance of a qualified franchise attorney and a good accountant. Although no research is perfect, special attention to calculating realistic earnings, limits or restriction on product purchases, territory, advertising costs and assessing royalty fees may be a good place to start.

Copyright 2006, Attard Communications, Inc.

Multi-Unit Franchising on the Rise

2008-01-25T07:42:00.000-08:00

by Patricia Schaefer

"Historically unprecedented." That's what Darrell Johnson, President and CEO of FRANdata, says about the fact that about 50 percent of all franchise units are now owned by multi-unit franchisees. FRANdata has been tracking for years the incidence of multi-unit franchising. Johnson and others agree that multi-unit franchising is one of the industry's most dominating growth trends.

As the growth of multi-unit and multi-concept franchising intensifies, it is becoming part of the amazing evolution and maturation of U.S. franchising. A number of today's franchisees are highly experienced and savvy business professionals who are strategically building their own small franchise empires. At the same time, more and more franchise systems are seeking multi-unit development agreements as the best and sometimes sole way to grow their franchise concepts.
Factors contributing to the rise of multi-unit franchising

Profitability

Increased profitability for both franchisor and franchisee is a strong contributing factor toward the steady rise in multi-unit franchising.

An SBA Office of Advocacy April 2007 report on Income and Wealth shows that multiple business owners are "the most prosperous small business group, with nearly three-fourths of them classified as high income and nearly one-half classified as high wealth."

For the period from 1989 to 2004, this SBA report shows multiple business households increasingly earning a higher percentage of income and wealth. "In 2004, they constituted nearly 18 percent of all small-business-owning households; however, they now earned nearly 35 percent of total household income and held 47 percent of the wealth of small-business-owning households." This up from 16 percent in 1989; with 30 percent of total household income and 38 percent of wealth.

Eric Stites, President of Franchise Business Review, says, "multi-unit operators tend to be more sophisticated investors with stronger business backgrounds and more experience, and they tend to maximize the profits from their business better than owner-operators." Multi-unit candidates also have deeper pockets, adds Stites, which he says actually lowers their risk of failure during startup.

Dunkin' Donuts franchisee Gulam Choudhury, who started out 19 years ago as a single-store owner, says he is reaping far more profits now as a six-store multi-unit franchisee. Furthermore, Choudhury says having more than one store affords him certain savings that would not have been available with one store. For example, his five Long Island, New York, stores all share one kitchen: "I didn't have to build a kitchen in each additional store. This was a tremendous savings."

Today, Dunkin' Donuts offers its franchise investment opportunities to only those who can purchase development agreements for five or more restaurants. This, says Lynette McKee, Vice President of Franchising for Dunkin' Brands, is part of "an aggressive national expansion plan that will ultimately triple Dunkin' Donuts to 15,000 U.S. [restaurants] by 2020."

"Our expansion plan is made possible by working with qualified, experienced franchisees who will help us grow at the pace and in the places we want," says McKee. "Therefore, moving forward, we are moving away from a single store model to expectations that our franchisees will sign multi-unit store development agreements."

Like Dunkin' Donuts, a growing number of franchise brands are seeking vigorous and optimal expansion with multi-unit operators only. Certainly, it is easier and more cost-effective to interact with and manage, for example, 50 franchisees who own 250 units rather than 250 single-unit franchisees.

Business owners with a wealth of experience and knowledge

Many established franchise owners are finding multi-unit and multi-concept franchising as the next challenging and rewarding step in their franchise career. These savvy entrepreneurs have the know-how, confidence and ambition to successfully expand their franchise systems and multiply profits.

The U.S. Census Bureau's most recent Characteristics of Business Owners, released in September of ‘06, shows sixty percent of business owners as 45 years of age and older. With people living longer and healthier, the desire to work stronger than ever, and the aging of baby boomers, business ownership is increasingly appealing to those in this age category -- many of whom have years of experience, knowledge and skills in the business world.

A number of these business owners are former corporate professionals - whether the result of corporate layoffs, downsizing or a yen for their own entrepreneurial endeavor. Many of these individuals have found that their years of sophisticated business experience and acquired financial resources have made them perfect candidates for not only owning their own franchise, but for multi-unit ownership as well. In fact, many say the rise of multi-unit franchising is directly linked to the downsizing of corporate America, starting in the late 1980's.

Cost-effective use of financial, material and human resources

Having multiple units of a franchise can lead to greater overall savings. For example, a multi-unit franchisee with franchises in close geographic proximity could advertise a number of stores at virtually the same cost as one store. In fact, a single-unit franchisee of a popular fitness franchise recently complained about the flip side of this scenario: "If I advertise in my local newspaper, someone else in the franchise also has their territory in the paper's distribution area."

Some other potential savings include:

* Time: When opening additional units, less time is spent with a familiar system than the time it would take to learn an entirely new business, system and procedures.
* Staffing: Staffing problems or shortages can be assuaged with the ability to share employees amongst stores. Opportunities for advancement may also be more readily available, thus reducing turnover; i.e., Store manager positions for skilled employees striving for higher positions and pay.
* Greater Discounts on Equipment and Supplies: If a franchisee is not required to purchase all supplies or products from the franchisor or specific source, significant savings may be gained with the purchase of items in greater bulk.

Is multi-unit franchising right for everyone?

Not every franchisee is cut out for multi-unit franchising. It takes considerable financial resources, commitment, drive, and is certainly not suitable for an inexperienced business owner.

And achieving success as a single-unit franchisee does not always equate to achieving success with multiple units. A franchisee that takes on multiple units too soon can become overwhelmed and eventually bankrupted. There's also a chance that subsequent units may underperform and ultimately lower the average profit of each.

Stites of Franchise Business Review says for the average franchisee and owner-operator, multi-unit franchising is not very realistic. "They typically don't have the capital to make it happen. That's why systems that are focused on multi-unit operations target a completely different individual -- someone with business ownership experience and/or executive level management experience and a good amount of capital. This is typically going to be someone who is 40+, a successful business owner already or a senior level manager coming out of the corporate world, with a net worth of $500,000+ and enough liquid capital to float themselves for a couple of years until their business is profitable (Again, owner-operators usually need to start earning some cash within six to 12 months)."

At Dunkin' Donuts, McKee says they are looking for multi-unit developers with a strong organization and the ability to manage stores effectively and successfully. "Respect for the franchisee-franchisor relationship is vital as well. We stay in constant contact with our franchisees, from advisory council meetings to frequent visits to the market. Because we have no corporate-owned stores, and all new product testing is done in concert with our franchisees, that trust level with franchisees is critical. Finally, any candidate for multi-unit franchising should share the customers' own passion and love of the brand. At Dunkin', our franchisees have a loud voice in the direction of our operation unlike many other franchise organizations, and it is extremely important that they understand that we represent not just a stop for something to eat and drink, but a daily ritual for millions of people."

Successful multi-unit franchisee Choudhury says, "If you want to be a multi-unit franchisee, you have to work hard and love what you do. You have to love your business like you love your own child."

Patricia Schaefer is a staff writer for Franchise Trade. She can be reached by email at pschaefer@businessknowhow.com

Difference Between a Franchise Opportunity and a Business Opportunity

2007-12-31T23:57:00.000-08:00

Franchise

In simple terms, a franchise opportunity is a relationship between a seller and a buyer that continues for the duration of the buyer’s involvement in the business. A franchise differs from a business opportunity in two important ways:

* A franchisor generally collects an “up front” fee from the buyer but also collects on-going royalties in exchange for a proven business model. In a business opportunity, the buyer pays for the system or training, but does not have a further obligation, unless his contract specifies he buy inventory from the seller.

* A franchisor, in order to protect the brand and ensure consistency of the product, requires strict adherence to specific guidelines. In a business opportunity, the buyer may learn a specific program but is not required to follow the system.

The Federal Trade Commission (FTC) regulates franchising at the federal level. In order for a business to be labeled a franchise, three elements must be in place:

1. Franchisor allows the buyer to use the franchisor’s trademarks
2. Franchisor collects a fee (at least $500) from the buyer within the first six months of operation
3. Franchisor exercises “significant control” over the buyer’s operation on an ongoing basis

If a business meets the above criteria, it is considered a franchise by the FTC and is required by law to follow federal guidelines. The most critical FTC guideline requires franchisors to provide buyers proper disclosure information prior to finalizing the sale.

Before a potential buyer can purchase a franchise, he must receive specific disclosure information about the franchisor, called a Uniform Franchise Offering Circular (UFOC). The UFOC is a valuable document that will assist a buyer in completing the due diligence (the process of investigation into the details of a potential investment and the verification of material facts) before purchasing the franchise. In many cases, individual states have additional guidelines a franchisor must meet to sell locations in that state.

In a franchise opportunity, the franchisor has a vested interest in the success of the buyer (franchisee) because it receives ongoing royalty payments. Therefore, the franchisor is usually committed to building the brand by adding locations, monitoring individual performance based on a proven system and assisting the franchisees to increase their revenues. This relationship lasts the duration of the franchise agreement.

Business Opportunity

In a business opportunity, the seller makes his money by delivering the business system, training, equipment, or service method to the buyer. In some cases, the seller may also make residual income for the ongoing sale of products or services, but for the most part, the relationship is over once the purchase is final.

While a business opportunity is not federally regulated, some states will encourage a general form of disclosure prior to purchase, but most do not require it. If a business opportunity does offer a disclosure document, it may provide only general information. The lack of regulation can speed up the purchase process, but it also leaves the buyer responsible for a thorough investigation of the business.

Since there is no ongoing royalty payment, there is no vested interest by the seller to ensure that the buyer succeeds in the business. Although many business opportunities provide system training, they may not require or monitor performance. Sellers generally don’t invest in local marketing or operational support, but buyers are given complete freedom to run the business.

Income expectations for a business opportunity may be lower than for a franchise opportunity, but they are also a lower investment than most franchises. A business opportunity may not require costly leasehold improvements or large working capital reserves, making it an option for many people whom may not have the capital available to purchase a franchise. For many buyers, a business opportunity provides the flexibility to start out as a supplemental income or home-based business, but has the potential to support their lifestyle and meet their financial goals.

Which opportunity is best for the buyer?
The answer, obviously, is that it depends on the buyer. An entrepreneurial individual may find the confines of a franchise opportunity limiting and thrive in a business opportunity where he makes all the decisions. Another buyer may find the brand recognition, ongoing assistance, and company-wide marketing programs associated with a franchise just the safety net he needs to feel confident when starting a new career.

A Franchise Opportunity Provides:

A Business Opportunity Provides:
• UFOC disclosure information
• Brand recognition
• Marketing expertise
• Intensive training program
• Site selection management
• On-going support
• Security of proven processes

• No ongoing royalties
• Usually lower investment
• Company supplied advertising
• Intensive training program
• Site selection assistance
• Freedom to make choices
• Proven system of operation

Expert Franchise Selection Advice

2007-12-31T23:52:00.000-08:00

The FranChoice®Program

Our Mission is Helping People Realize Their Dreams.
We do this by helping you find a franchise opportunity that fits you.

"What's the best franchise for me?"
Prospective entrepreneurs ask that question all the time. The best answer is, "it depends". It depends on what you like to do. It depends on what you're good at. It depends on how much capital you have to invest. It depends on how you evaluate risk. It depends on understanding all the factors that go into making a good decision - from your perspective, not ours.

A Free Service For Entrepreneurs
The FranChoice consultation process is similar to working with a realtor when buying a home. An industry expert guides you through the search process, helps answer your questions and concerns, and understands your needs and goals in business ownership.

There is no obligation or cost to you for the services or for the information about franchise opportunities we offer at FranChoice. We are paid fees by franchisors who respect the processes we follow and who recognize the high quality and fit of prospective franchisees we refer to them. You pay exactly the same franchise fees with any franchise company whether you work with FranChoice or not. FranChoice is able to provide a win-win scenario for you as the candidate and for the franchisors.

FranChoice has been so successful in matching potential entrepreneurs with the perfect franchise business because it is a win-win situation. The candidate avoids the confusion of researching the overwhelming myriad of franchise opportunities and can concentrate on those that have been pre-screened as high quality businesses matching his (or her) requirements. Franchisors love working with us because they find that candidates referred by FranChoice are enthusiastic, motivated and well-informed about the business requirements. Entrepreneurs continue to find value with the FranChoice Program.

Your Model
At FranChoice, we work with people across the United States who want to find a franchise business that will meet their needs. In order to do that effectively, we first have to learn what those needs are. We work with you to determine your profile and create a model you can use to evaluate any franchise company you investigate. To do this properly we need your help. We will ask you many detailed questions to determine the business characteristics that define who you are and what you want to do. We will work with you to find the right opportunities consistent with your answers to questions like:

*

What are your reasons for wanting a business of your own?
*

Have you ever owned a business of your own?
*

What hours do you like to work?
*

Where do you want your business to be located?
*

How do you feel about managing people?
*

How much capital do you have to start a business with?
*

Will you have partners?
*

Do you want to build multiple units?
*

How soon do you want your business to open?
*

Will you be involved on a full-time or part-time basis?

These are just a few of the many vital issues we'll discuss with you. Then, we'll narrow down the choices of franchises to those that best match your wants and needs with the goal of finding a great match for you.

Pre-Screened Franchise Choices
There are over 1600 registered franchise companies in the marketplace. Sorting through this huge collection of opportunities can be a daunting task. You could spend months looking at franchises and you'd still find that most, if not all, just don't match with what you really want in a business. At FranChoice, we've done much of the homework for you. We have carefully pre-screened hundreds of franchise companies. Some are very large and some are newer, hot concepts. They include companies from all types of franchises including mall retail, shopping center retail, home based, food, automotive, personal service, gift and business to business.

A Great Fit
Our process is designed to listen carefully to what you want and to understand you goals and aspirations. There are many opportunities out there - some great, some good, some not so good - and it can be quite difficult to weigh their pros and cons alone. We offer a safe, professional environment in which you can learn about opportunities in a variety of industries that span a wide investment range. We'll help you build your business and personal model and define exactly where you want your business to take you and how you want to get there. Our goal is to find a "great fit" for you.

The Next Step
If you're ready to make a profound change for the better in your life...if you want to take control and live the American Dream for yourself...if you want to take the next step to achieving the goals you've set for yourself...all you have to do is get started.

How To Raise Funds To Start A Franchise Business

2007-12-31T23:43:00.000-08:00

Franchise Article Author: The Franchise Guide

Financial capacity is the important aspect that founders will have to address when business opportunities such as franchising are concerned. Franchising businesses do not come cheap and the costs involved are variable. The need to allocate the proper funds for budgeting purposes will be the immediate aspect that needs to be addressed so that every area surrounding the business will be covered for a smooth flow of operations.

Where to Look for Funds
There are various ways to which a franchise business can be accomplished. Here are some possible alternatives:

1. Financial Loans. The easiest way of being able to allocate the needed funds would be to apply for financial loans with banking and lending institutions. The process after application would call for the purpose of the loan, a background credit investigation check on the person/s applying for the loan, declared assets and the payback period for such. Interest rates will perhaps be the only point up for discussion, considering that depending on the lending institution, interest can be varied and dependent on the standard or organizational declared rate of interest on loans.

2. Investors/ Partners. Ideally, people who lack the funds and resources to engage in franchise business opportunities would look for potential partners to help them out in expenses and needed financial settlement issues. Shares or percentage of ownership for more than two persons will be up for negotiation. Normally this would depend on the amount of invested capital that a partner would have, unless otherwise specified.

3. Fixed Assets as Collateral. For franchises, land may be one good aspect to use as a means of lessening the need to include rent expense as one of the usual expenses to be incurred. But in some cases where cash or checks are more important rather than declared assets, a person can either sell the asset as a whole or use land as a form of collateral as leasing or having it rented out to get additional forms of money overall.

Franchises for sale are available anywhere and the real issue remains on the amount needed to be raised to be granted one. Also, successfully acquiring franchise rights is not the end of the long line of other expenses to be incurred since other points for consideration such as utilities and rental expenses necessary for the proper administrative and operational aspect of the business is entirely separate.

With the right resources, franchise expenses can be kept at minimum levels but incurring such expenses in businesses is only normal for any business entity. The manner of financing a franchising business opportunity would depend the amount of investment that a person and/or his partners would pledge. That is why the choice for which franchise to consider will always be important because big name franchises usually promise a profitable rate of return.

Home Care Franchise Opportunities

2007-12-31T23:35:00.000-08:00

Senior Services Franchises
Medical & Healthcare Franchises
Serving Baby Boomers (and Their Parents!)

Home care, living assistance and medical programs especially for seniors are in demand, and the need will continue to grow as the U.S. population continues to age. If you're searching for a franchise that makes good business sense and affords an opportunity to provide personal, caring service, look into the various senior services franchises and businesses related to health and wellness as described in the listings below.

Home Care Franchise Opportunities

Visiting Angels / Living Assistance offers services to a market of more than 30 million senior citizens. This market is exploding in growth, which has rendered it nearly immune to changing economies. Their business provides the satisfaction of helping senior citizens and convalescing clients continue to live where they want to be - in their own home.

Visiting Angels is well-established with 260 senior home care franchises (non- medical) in more than 40 states across the United States (and Canada). They advertise and market nationally for homecare client leads and distribute hundreds of home care client leads each week to their franchisees.

Visiting Angels has been ranked by Entrepreneur Magazine as one of the fastest growing franchises in America . Their Advantages Program gives the company an edge in recruiting homecare clients - f amilies receive discounts on products from Energizer, Serenity, Kimberly Clark , The Scooter Store and other top manufacturers. Also, Visiting Angels has established hundreds of relationships with national organizations such as the Alzheimer's Foundation of America (AFA).

Right At Home

Home Instead Senior Care

Home Care Assistance

Adult Day Services

SarahCare

Medical Handpiece Repair

Hayes Handpiece

Ergonomic and Therapeutic Products

Relax The Back

Medical Recruiting

Health Career Agents

@Work Medical Services

Cosmetic Medical Skin Care

Dermacare Laser and Skin Care Clinics

See all Senior Services and Medical & Healthcare franchise opportunities on Bison.com.

Factors That Affect A Good Franchise Site Location

2007-12-31T23:31:00.000-08:00

Franchise Article Author: The Franchise Guide

Choosing the best franchise is just half the equation. Without the right location for it, you may find it hard to recoup your investment. So how do you choose the right location for your franchise?

Perhaps the first thing you should consider is if there are enough people in your locality to ensure that sufficient volume will be consumed. If not, does your area have any plans for expansion? The more you cater to a small segment or niche in the market, the bigger the population must be. Moreover, the product volume consumed monthly must not only be sufficient to cover your monthly expenses but must also bring you a profit.

You should also think about where the people who can afford your product or services live. Your city may have the perfect solution for these people with the buying power but if your product or service is inaccessible to them, how will you profit? Rule of thumb in this case is to place your business along the routes or place your customers generally go to or through.

Of course, affluent people will not take a second look at your store if it is located in a seedy neighborhood. In fact, they might never see your store at all. So take the time to match the neighborhood or the place to your target market’s preferences.

You will also need to consider the businesses that may avail of your products and services in your area. Of course, you will want to locate your franchise as close to them as possible. If your target customers or clients are for example schools in your area, then you will have to locate your tutorial business near them. Bottom line is, your customers will generally dictate where your franchise will be located.

Of course, not only will you have to make your franchise location accessible to your customers but to your employees too. An inaccessible franchise place may be too far for quality employees therefore degrading the quality of your service.

You will also have to consider your competition in the area. On some cases, it will be to your advantage if you locate your franchise location near your competitions as people looking for this service will be made aware of your new office. If the competition is too strong however, it may be better to locate your office further out from your competition.

With these factors and more, you will be able to have a better idea on where to locate your franchise outlet.

How To Choose a Franchise

2007-12-31T23:27:00.000-08:00

Franchise Company Investigation Process

FranChoice

Before You Begin
You've carefully evaluated yourself and built an individual model that can be used to determine if a franchise opportunity has the attributes you want. You know what you need to find in a franchise business to match your preferences and desires. You have a picture of what the future will be like for you as a business owner. Now you just need a process to investigate individual franchise opportunities and determine if they fit perfectly into your plans.

Franchise Investigation Preview
The first thing you need to keep in mind in your investigation is that it is a process of mutual elimination for both you and the franchisor. You might find exactly the franchise you're looking for on the first try, but that is highly unlikely unless you have some expert help. Remember to ask any and all questions you can think of about a franchise business. This will allow you to remain focused and weigh all of your options to find the proper franchise opportunity.

You should also understand that it is unlikely that any one person contacting the franchisor will turn out to be a great match for them. Therefore both you and the franchisor are trying to determine if the fit seems right from the beginning of the investigation. If either party comes to the realization that this is not the right match, they simply inform the other party and move on.

Step 1 - General Information
The franchisor will begin by providing you with overview information on the company (typically a brochure and video package). They will then ask you to provide them with additional information on you (by filling out a questionnaire) to determine if you have the general characteristics that they are looking for, and the financial qualifications necessary for their franchise. Assuming that each party is still interested, based on this information exchange, you will proceed to the next step.

Step 2 - The Uniform Franchise Offering Circular
This document, commonly referred to as the UFOC, is the Federal Trade Commission mandated disclosure document that gives you a wealth of information about the franchisor. The form and composition of the document is standard with any franchisor and must include information on a variety of topics of interest to you. The major subject areas include:

*

The history of the franchise and its officers and directors.

*

A complete description of the business to be franchised.
*

All costs and fees that you will be subject to under the agreement.
*

The obligations of either party to the other during the term of the agreement and thereafter.
*

Any relevant litigation history of the company or its officers.
*

Any business failures, ownership transfers, franchise agreement terminations or other potentially adverse information relating to the success rate of the existing units in the system.
*

Audited financial statements for the franchise company for the previous three years.
*

A list of the existing franchisees.

A few franchisors also include an earnings claim in the UFOC document. Though they are not required to do so, this can be a real time saver for you if it is included. Even if it is included in the UFOC, it is still imperative that you discuss this subject with franchisees during your fact-finding calls and visits.

You will carefully review the UFOC document and note any questions or issues that the material raises for further discussion with the franchisor. You may also choose to involve outside advisors to review material you do not understand.

Step 3 - Franchisee Calls and Visits
The most valuable source of information on any franchise system is the existing franchisees. You need to plan on calling or visiting a number of the existing franchisees during your investigation. It sounds almost trite, but whatever you find the prevailing attitude of the existing franchisees on any issue to be, it will almost certainly be your attitude on the issue as well if you decide to become a franchisee. Visit with a sufficient number of the existing franchisees to ensure you have a sense of the prevailing attitudes of the group.

Though you want to find the overwhelming majority of franchisees to be happy and supportive of the franchisor, it is important to try to find an unhappy franchisee during your investigation. When you do, not only listen to the complaints but also try to determine what makes this franchisee different from the rest. If you find you identify with the positive ones and feel the negative franchisee is not at all like you, then you should be fine. If you find that you are more like the person who is unhappy however, this is probably not the right franchise for you.

The following list covers the principle areas you want to investigate during these calls:

*

Training Programs - You need to determine how well the initial training programs and support prepared the franchisees for opening and running their business.
*

Opening Support - How easy did the franchisor make the process of getting the first unit open and operating? Was there assistance in site selection, lease negotiation, construction and design, securing financing, permits or any other factors unique to getting this business up and operating?
*

Ongoing Support - You want to know how effective the ongoing support services of the franchisor are in terms of helping franchisees deal with the problems that come up in the running of their business.
*

Franchise Marketing Programs - Most franchisors collect marketing dollars from every franchisee into a pool that is spent to promote the brand. You need to know whether the franchisees are happy and supportive of the way this process is handled. Note: this is typically the area where you will find the most complaining in any franchise you examine.
*

Purchasing Power - Does the franchisor use the collective buying power of the total system to get discounts on supplies and inventory beyond what an independent operator could achieve? This factor is one of the biggest advantages of joining a well-run franchise system and should offset much of the upfront fees associated with being a franchisee.
*

Franchisor/Franchisee Relations - Determine how the franchisees feel about the franchisor in general. Is the franchisor supportive, caring, focused on their success, responsive, effective, organized, and trustworthy? Make sure you have a good feeling about the values of the organization and that they are consistent with your values.
*

Franchise Investment - The UFOC will give you a wide dollar range for the investment required in the business. Use the franchisee discussions to narrow that down to a reasonable and conservative estimate of how much capital you will need to be successful in this franchise in your market or region.
*

Earnings - It is critical that you have a strong sense of just where the average unit is in terms of earnings. You should know the answers to the following questions: How much money does the typical unit make given a specified length of time in business? How soon does a typical unit start making money after opening? What is the range of answers for these questions? If you are simply not able to determine these answers to your satisfaction in your research, do not settle! Tell the franchisor of the problem and that you cannot proceed unless you have these answers.

It is always a good idea to bring up the subject of earnings as the last point in your franchisee visits. Most people are reluctant to discuss their income with strangers and you will find the franchisees are more willing to cover this subject after you have spent some time visiting with them. At that point they know you're not a competitor trying to get information but rather a serious prospective franchisee who will need the information to proceed. They were all in your position at some point in the past, so if they develop a comfort level with you it may enhance the financial information you can gather.

Step 4 - Review the System Documentation
A strong franchise company will have documented their systems, operations and marketing programs in a concise and easy to use format for the reference of franchisees. Make sure that such documentation exists. The franchisor will probably not give you a copy of their actual manuals, but they can certainly provide you with the table of contents or index of every support manual they have. This will enable you to confirm that the documentation exists and will show the scope of the coverage of all their major business factors.

Step 5 - Meet the Franchisor
At some point in the process of investigation, you will want to have personal meetings with key personnel of the franchise company. This might be possible in your local market or you may need to travel to the headquarters of the franchisor. Many franchisors facilitate this need by holding what are referred to as "Discovery Days". These are structured events where you can go to a specified location and know that all of the key people from the franchisor will be available.

Be sure to get to know those people you will be working most closely with as you build your business. We would expect the President of the company to be an impressive person, but that's not who will be answering your call when you have a problem. Find out who will be providing the operational support and training directly to you and form an opinion about their competence. Make sure that any remaining questions or issues you may have are addressed at this meeting.

Step 6 - Make a Decision
If you have been diligent, the entire process outlined above should have taken about two to four weeks to complete. You have now finished your investigation and have all the information you need to determine if this franchise is right for you. It either is or it isn't, and you'll know which it is. In either case, it is time to make a decision and move on. Use the model you developed for yourself to evaluate what you wanted in a business.

Don't settle. If this company has everything you wanted, do it. If it doesn't, eliminate it and go to the next one.

FranChoice offers a free consulting service to help you find your perfect franchise match. Learn more about this great time-saving service!

B2B or Not to Be?

2007-12-31T23:25:00.000-08:00

You’ve got the questions – we have the answers!

Lori Kiser-Block, President, FranChoice

Can you answer a resounding “YES” to these questions?

* Am I willing to dedicate long hours every day for at least two years to get my business up and running?
* Do I have or am I willing to learn (or hire someone) to network with other small business owners in my local community?
* Am I able and willing to take direction from a franchisor partner?
* If some of my potential customers turn me away, will I remain upbeat and steadfast in an effort to get new business?

If you can answer in the affirmative to all four questions, a business to business franchise may be the ideal opportunity for you. As a B2B franchisee, you will provide needed services to other small businesses, saving them time and money and making you part of their success while making a success of your own business. There are also advantages to being part of the B2B industry over retail businesses, and the varieties of franchises in this area are vast.

Business Services
Services to small businesses include everything from ship and mail centers to business consulting, temporary personnel placement and IT support. Other B2B franchises provide such services as commercial cleaning businesses, tax preparation and marketing. It is generally less expensive for a small business to outsource these services than it would be to have a dedicated employee on staff, so these types of franchises are in demand.

Outsourcing is becoming more and more popular as a way to trim operating costs. Additionally, it allows businesses – large and small – to focus resources on their core competencies while relying on the expertise of the service provider.

Business to Business Products
Some of the franchises providing products to local businesses include copier toner and ink jet suppliers and refillers, office supply companies, logo apparel businesses and sign companies.

Numerous Advantages
There are many advantages to the franchisee who owns a B2B company. One obvious advantage is that you operate the same hours as your clients are open – Monday to Friday during normal business hours. Knowing that you have a traditional schedule and that your hours are limited can be a great advantage, particularly to the franchisee who is balancing work and family.

Compare these hours to those worked by the owner of a retail business (nine to nine, seven days a week) or a fast food franchise, which could be open from 6am to 2am, every day, and you’ll be even more impressed by a business offering a livable work schedule.

For those people transitioning from corporate America to business ownership, a B2B franchise will use many of your previously learned skills. You will not be working with the general public but calling on business professionals and offering them products and services they need. If you have a background in sales and marketing in any industry, you’ll find you can use those same skills in your B2B franchise business.

Another advantage is that as a franchisee, you will most likely have national buying power through your franchisor and be able to get better pricing on the products you sell or on the supplies for your services, and you will pass savings on to your customers.

A B2B franchise is often less expensive to get into than other types of franchise businesses and may also have smaller operating expenses. Because you will probably not be required to locate your business in prime retail space, your overhead will be less than that of a business catering to the general public.

Many B2B businesses, particularly in service categories, can run their companies from home offices, which can greatly reduce operating expenses. For example, service B2B franchise owners can manage a staff of technicians who travel to the site of the business. By eliminating the high overhead associated with a storefront, B2B owners can focus their resources on advertising, marketing and management.

Business to business franchise companies provide a much needed service to small business and they are one of the fastest growing sectors in the franchise industry. Whether you have a home-based or brick and mortar location or if you choose a service or product providing business, a B2B franchise can provide you with a low-cost, high-demand business opportunity with both a home-town feel and the support of a national franchise company.

Lori Block is the President of FranChoice, Inc., a national network of franchise consultants providing free guidance to qualified individuals in the United States searching for franchise opportunities that match their personal goals, interests and financial qualifications.

To learn more about FranChoice or to reach Lori, click here.

What Is Franchising? How Does It Work?

2007-12-31T23:22:00.000-08:00

What Is Franchising? How Does It Work?

Steve Hockett, President
FranChoice

Simply put, franchising is a way for a business to expand beyond its original owners. The most common form of franchising is a business format franchise where the franchisor contributions certain elements of the business and the franchisee contributes certain elements. The power of franchising is realized through the combination of the contributions from the two participants. Franchisees pay initial franchise fees and then ongoing royalties for access to the format the franchisor has developed and for ongoing enhancements to the system.

The franchisor contribution will include the brand / trademark of the concept; it will include the proven business system (commonly called the operating system); and the franchisor will provide the initial and ongoing support as the franchisee builds their business.

The franchisee contribution involves the management skills to run the business day to day using the franchisor provided brand and system; and the franchisee also contributes the capital to fund the opening and continued operations of the business. Finally, the franchisee brings a level of desire and interest in having the business succeed that is essential to franchising – and the focused desire is something the franchisor can’t replicate on their own.

There is a contract – called the Franchise Agreement – signed by both parties that governs the relationship between the franchisor and franchisee and explains in detail the responsibilities of both sides. The franchisor is required to provide a generic copy of the Franchise Agreement early in the investigation process, and this contract will provide a roadmap for the duration of time the agreement is effective.

What to do before you begin searching for a franchise

2007-12-31T23:21:00.000-08:00

How to Buy a Franchise – Step 1

What to do before you begin searching for a franchise

By Kim Ellis

You’ve thought about it for years and you’re finally ready to make the leap into business ownership. It’s time to be your own boss, to be the one in charge of your financial future – your destiny. Because you are a smart woman, you want to avoid making mistakes along the way. You have so many questions: Will you be happy as a franchisee? Can you make the money you need to provide for yourself and your future? What kind of franchise would be best? Where do you start, with thousands of franchise opportunities available?

The simple answer is that you start with YOU.

Before you even begin looking at franchises, you need to do a thorough self-evaluation of your own business style, strengths and challenges. So find a quiet place, get out paper and pen, and as objectively as possible answer the following questions. (And don’t worry; unlike the quiz in Cosmo, “Are you a good friend?” there are no wrong answers!)

What's Your Personal Business Style?

* What part of your current and past jobs have you liked doing the most?
* Do you like working with the public or would you rather be involved in a B2B company, helping other businesses to grow?V
* Are you an outgoing, people person or do you prefer to be behind the scene, managing the business?
* Are you willing to ask for help when you need it? One of the benefits of franchising is the ongoing support you will receive but it will do you no good unless you use it.
* Describe the work environment that most appeals to you.
* Are you status conscious? Does it matter to you what the product or service of the franchise is or does the business potential matter more?

What Are Your Skills and Strengths?

* List your skills and evaluate how well you perform each.
* How do you feel about sales and marketing? These skills are most often on a franchisor’s list of desired attributes in a potential franchisee.
* Are you good a networking? In many cases, a franchise owner’s role will be to make community connections by joining civic organizations and networking with various groups.

What Do You See As Your Challenges?

* What part of your current and past jobs have you liked doing the least?
* List your weaknesses, those things you would not want to do or would want to hire someone else to do in a business.

What Experience Do You Have In Employee Management?

* Do you have experience managing employees? Did you enjoy it?
* Are you comfortable recruiting employees?
* Do you have the experience and skill needed to create a work environment that will allow you to retain employees?

What Is Your Financial Profile?

* How much capital do you have to invest?
* Can you afford to do without a regular income during the start up phase of your new business?
* What are your financial goals?
* How do you see your lifestyle changing as a result of meeting your financial goals?
* How do you feel about taking the risk of becoming self-employed?

Are You A Team Player?

Franchising is all about following someone else’s system. Can you picture yourself in this role, executing a system you didn’t create?

Once you have answered these questions, you’ll begin to see a clearer picture of what talents you can bring to a franchise business and what you expect to receive in return. Do you see yourself managing a string of dry cleaning franchises and vacationing in Tahiti ? Or, would your perfect opportunity be to own a mall-based tax preparation service where you could mingle with your customers and have lots of free time to spend with your family?

The next step is to start looking at opportunities and evaluating them based on your answers. It may take some effort to find the right franchise so don’t feel that you need to compromise. Just like jeans, franchise opportunities com e in many shapes and sizes and you never need to settle for one that is just not a great fit. Choosing the franchise opportunity that best matches your needs, interests and style is your greatest assurance of happiness and success as a business owner.

Kim Ellis is president of Bison Advertising, Inc., a leading online resource for franchises and business opportunities. Drawing from a diverse background in franchising, marketing and operations, Kim specializes in Internet marketing, lead generation and branding.

Prior to Bison, Kim served as vice president of FranChoice, where she helped establish one of the industry’s most successful franchise referral networks. Her responsibilities included franchisor relations, brand management and lead generation. Prior to FranChoice, she served in executive positions for Regis Hair Salons, Premier Hair Salons International, and for a business-to-business marketing agency in Minneapolis. Her franchise experience started with a family-owned Schwinn Bike franchise and extended to her first position after college with Great Clips for hair. Currently, Kim serves as chairperson for the International Franchise Association (IFA) Women’s Franchise Committee and as a member of the IFA Supplier Forum.

Security and Investigations Franchises

2007-12-31T23:20:00.000-08:00

Identity theft, corporate fraud and traditional crime against people and property are, unfortunately, standard fare on the evening news. Home and business owners are taking an active role in protecting themselves and their possessions by investing in preventive security measures such as increased outdoor lighting, video surveillance and other similar products.

The franchises and businesses featured here require no background or training in law enforcement or a technical field, and individuals from the insurance industry may find these businesses particularly rewarding, on a professional and financial level.

Many of these opportunities can be run from a small home-based office, and require a relatively low initial investment.

If you'd like to own and run a successful small business that also contributes to the safety, security and well-being of your community, please investigate these franchise opportunities further and request additional information.

EYESthere

Wouldn't you like to own a company where every business could use your services, and 90% of the potential market is yet untouched?

EYESthere custom designs solutions that protect and empower businesses with live and recorded video. Our franchises provide solutions that help protect our customers' premises, property, people and transactions and empower the owners, employees and customers with EYESthere unique Digital Video solutions.

"The EYESthere opportunity has hallmarks of a franchise poised for explosive growth." - Mark Siebert, President of iFranchise Group

Build a business with national brand recognition and helps your community

L & W Investigations

The traditional "mom and pop" shop approach to private investigations is not adequate to fight fraud today on behalf of insurance companies who are mostly national/international.

L & W Investigations, Inc is the first franchise opportunity in the United States in private investigations, specializing in all types of insurance fraud. In just four years, L & W:

* Opened 35+ offices in 23 states and Toronto and Puerto Rico
* Has large multi-million population territories
* Has low operating costs and less than $15,000 in start up costs!
* Worked for top Insurance, TPA and Private & Public Companies

Learn more about this one-of-a-kind franchise opportunity in surveillance and investigation

NiteLites Outdoor Lighting

Outdoor lighting sales are being driven by the increasing number of homeowners seeking safety, security and aesthetics, as well as enhancement of their home's market value.

This, coupled with the growing trend for people to spend more time in and around their homes, presents a great opportunity for our franchise owners to sell and service our lighting systems.

At NiteLites, we're expanding our franchise throughout the United States, offering a tremendous opportunity for those who qualify.

We're searching for individuals with drive, determination and a desire to own their own home-based business. We want goal-oriented people who are driven by beauty.

Learn more about this bright, home-based franchise business!

Proshred

PROSHRED® specializes in on-site shredding for the secure destruction and recycling of confidential documents and proprietary materials for thousands of organizations and individuals across the United States.

In addition to serving major government, financial, medical, legal, high-tech and manufacturing industries, PROSHRED® actively services the growing home office and residential shredding markets.

According to the National Association for Information Destruction (NAID), document destruction in the United States is a multi-billion dollar industry, positioned to continue rapid growth due to recently enacted privacy legislation and heightened concerns about safeguarding confidential business and consumer information.

Within this rapidly expanding market, PROSHRED®'s vision is to be the premier franchise system in the shredding market, recognized as the system of choice for the secure destruction and recycling of confidential documents and proprietary materials worldwide.

"If you are serious about building a profitable, rock solid business, a PROSHRED® mobile shredding business is certainly worth a second look." - Mark MacMillan; Tampa, Florida

MonitorClosely.com

MonitorClosely.com is a home-based business with tremendous earnings potential. With the advancements in digital technology, the quality of surveillance systems has significantly improved while the cost of equipment has continuously decreased. With the availability of hi-speed ISPs and personal computers both at the home and office, it is now possible to monitor surveillance cameras from anywhere at anytime. The customer base is unlimited and includes; day care centers, schools, assisted living facilities, any retail business, apartment complexes, multi-unit fast food restaurants, hotels, private residences and much more.

You can learn more about the MonitorClosely.com franchise by participating in one of our regularly scheduled corporate visits in Cincinnati, where you will learn first-hand why this business is for you and the great opportunities it provides.

Learn more about this exciting and unique franchise opportunity

Police Reports Now

Police Reports Now is the simplest and most accessible database of law enforcement reports in the world. Police Reports Now was designed with a single purpose in mind: provide a secure, efficient means for all interested parties to exchange information in an easy and profitable manner. This means that law enforcement agencies, insurance companies, attorneys, medical professionals, and victims of crimes can all exchange critical information in a timely manner while saving money.

Police Reports Now even takes this concept a step further for law enforcement agencies by introducing several models through which they can profit. For example, an agency may elect for Police Reports Now to set them up for FREE and receive a percentage for every single report that an involved party pays for.

Police Reports Now is not a Franchisor. We're only looking for a select and qualified few, and once all states are taken- that's it. In fact, we are only offering a total of 20 opportunities, as each partner will receive two states. The remaining states will be owned by Corporate.

We hope you share our excitement as we near the full launch of Police Reports Now. A member from our senior executive staff will be in communication with you within 24-48 hours to discuss how you can be a part of the Police Reports Now team. We will also provide you with much more information during our next contact.

Eight Keys to Selecting the Best Retirement Account Facilitator

2007-12-31T23:17:00.000-08:00

Successfully buying businesses with IRA money requires the securing of account facilitators who know exactly what they’re doing

David Nilssen, CEO, Guidant Financial Group

A growing number of people are discovering the joys of utilizing IRA money to purchase businesses and franchises. Consequently, more companies are springing up to meet the account-structuring needs of those seeking to take advantage of this “self-directed IRA” funding option. These companies can run the gamut from the sublime to the ridiculous, so it’s crucial that consumers know what to look for when choosing a retirement account facilitator.

When structured correctly, money in your IRA account can be accessed before retirement to buy a franchise/business without incurring early distribution penalties. Setting up a structure for these types of transactions is a complex process involving rollovers, creations of corporations and/or new accounts within IRS and Department of Labor guidelines, and appropriately submitting numerous documents to various agencies.

Ensuring that the structure is created correctly and that all compliance measures are adhered to is critical. If it’s done wrong – or if it’s created for a transaction that doesn’t meet government guidelines – it could result in the incurring of significant penalties or the dissolving of the tax-free status of your retirement account. Not only could you lose the opportunity to purchase the business or franchise of your dreams, but you could be penalized as much as 100 percent of your retirement funds.

Although you can find numerous companies on the Internet offering to facilitate the structuring of these unique accounts, beware: all facilitators are not created equal. Some of these companies cut corners that leave clients open to later IRS repercussions. Others are tiny one- or two-person operations lacking the infrastructure to provide professional service or, based on the handful of accounts they have set up, they lack adequate experience to provide reliable guidance. So who can you trust? Thankfully, there are some professional and respected companies you can rely on with confidence. But even among these, costs for services can vary widely.

To help keep you and your hard-earned retirement money safe, here are some of the characteristics you should look for in selecting an account facilitator:

Professional Expertise. Look for companies staffed with a wide variety of professionals who can look at your unique situation from all angles. Check to see whether the company is affiliated with other respected organizations, is well-known in the industry, and completes hundreds or, better yet, thousands of these plans each year.

Reputation. Even though this is a relatively new industry, you do want to see that the facilitator has been in business for at least a few years and has built a reputation for itself. Nothing can replace the value of real-life experience. You want to be confident that all the early trial-and-error took place long ago and that the current service is reliable and error free. You don’t want to be the guinea pig for a brand new company. It would be wise to invest some time in checking out what companies are in the news and what type of recognition they have been receiving.

Communications. Does the company make you blindly submit your information to them without providing the ability to talk with them directly? While online submissions are fine, be wary of sites that don’t even give you a phone number where you can contact them. Also, are their representatives always available to answer your questions? A good rule of thumb is: the easier it is to communicate with the facilitator, the more secure you can feel about what is happening behind closed doors.

Success. Is the company growing or is it struggling to keep its head above water? Will it still be in business next year? The best companies to deal with are those that have a large and growing clientele. Don’t be afraid to ask how many similar accounts the company has structured or how many clients they’ve served. Bolder is better when it comes to questioning those who will be facilitating your financial future.

Conservative Approach. Hearing “yes” is not always in your best interest. There are companies out there that will, out of ignorance or greed, set up structures that enable you to purchase businesses that are not permitted or advised under the IRS or Department of Labor laws. Choosing a facilitator that will keep you away from any business deals that are even remotely questionable is a safer route to take. Look for facilitators who encourage you to run your potential transactions past counsel. Better yet, look for a company that includes this step as part of their facilitation package.

Customer Service. So what constitutes topnotch customer service? Look for characteristics such as: Proactive Communication (the company reps keep you regularly informed of where you are in the process, and they speak a down-to-earth language you understand, not some trade lingo that makes little sense in the real world); and Ongoing Support (you can rely on the company to answer your questions and “hold your hand” if necessary after they’re set up your account).

Turnaround. A company should be able to set up the account within 20-25 days. Yet some companies promise five days or less . . . which makes you question what corners they’re cutting, since some states require as much as eight days to process documents. You need to be clear about your time constraints, and you should expect a clear and honest time estimate in return. And then you should be able to rely on that estimate.

Competitive Prices. Is the company clear about the costs up front? And do you know exactly what services you are purchasing? Some companies will charge separately for each step of the process, while others will charge for the “package.” Package deals can provide the better bargain, as they includes features that other programs will expect you to pay for separately and which can add substantially to your costs (such as an IRS authorization letter or time with outside counsel).

One of the best steps you can take is doing a thorough study of the companies wanting your business. Shop around! Most account facilitators have websites you can peruse and most offer free consultations. This may sound simplistic, but write your questions down beforehand and keep them in front of you. It’s far too easy to lose your train of thought in the midst of a detailed – and sometimes confusing – sales presentation.

Finally, never lose sight of the fact that you’re dealing with your money, your business/franchise purchase and your success or failure. Go with a company that ensures that your money never leaves your authority, and that you remain the one who defines your future.

David Nilssen is the Chief Executive Officer (CEO) of Guidant Financial Group, Inc., the nation's leading retirement account facilitator. Using customized and conforming structures, Guidant helps investors use their retirement funds (i.e. - IRA or 401k) to purchase non-traditional investments such as a business. With the help and expertise Guidant offers, investors nationwide are able, not only to control their individual investments by redirecting those funds into higher yielding assets, but also keep their investments safe from penalties and tax consequences.

A former corporate exec launches children’s art-education franchise with 401(k) funds

2007-12-31T23:11:00.000-08:00

Tony Capobianco of Tampa, Florida, just spent the last three days dressed as a pirate. And he has seven more days to go of eye-patch wearing and numerous growls of “Aaargh, shiver me timbers, me matie!”

Capobianco, 43, is enjoying running his first-ever pirate-themed art camp for children eager to draw, sculpt, mold, paint, throw glitter around and laugh a lot. Although glitter and clay weren’t tools of the trade at his previous IBM and AT&T jobs, he has taken to his new position as an Abrakadoodle franchise owner and education director like a pirate takes to gold doubloons.

A former manager of customer service and implementation, Capobianco, found himself laid off in May 2005 after 18 years in corporate America. Yet, he’s not shedding any tears about it; in fact, quite the opposite. “I get up every morning now with a smile – and sometimes glue – on my face,” he says. “I’ve gone from wingtips to sneakers, and I’m loving every minute of it.”

Capobianco is one of a growing number of laid-off (or simply rat-race-weary) workers who have left the corporate world to embrace new lives as self-employed entrepreneurs. “I never thought that it would be feasible until circumstances made it a feasibility.”

After finding himself booted from his managerial position, Capobianco began building the groundwork for an employment future that was not only more secure than his previous jobs but that included elements missing from all his corporate positions. “I guess I’ve always been an independent and creative thinker,” he says. “Those character traits weren’t exactly encouraged in my last jobs.” So the idea of creating a position for himself that met those needs was very appealing.

After exploring various self-employment options, Capobianco began working with a franchise consultant at FranChoice (www.franchoice.com) who introduced him to a variety of ownership opportunities. But when he saw Abrakadoodle, an art education company for children ages 20 months to 12 years, it was love at first sight. “It stood out because I love kids, it was a creative enterprise, and I’d be able to share it with my wife Patti who’s a preschool teacher,” he says.

While choosing a franchise was easy, finding the means to buy it was another matter. As a father of three, Capobianco wasn’t eager to plunder the family bank account or take out a massive loan. Fortunately, his franchise consultant recommended he check out an alternative funding method: using his 401(k) money to purchase the business without taking a distribution or paying additional taxes or penalties.

“I was referred to Guidant Financial Group [www.guidantfinancial.com], a retirement account facilitator,” he says. “They showed me how they could restructure my retirement account to allow for purchasing a business as an investment for the 401(k) without having to pay any taxes.”

Like the majority of tax-paying Americans, Capobianco had never heard of such a thing, and he immediately began digging. To his surprise, he discovered that thousands of entrepreneurs had already used such means to finance their own businesses. When structured correctly, not only were such transactions allowable but they were an excellent means for growing retirement funds while launching a business enterprise.

“More people need to know about this option,” he says. “The whole process was simple, clean and effortless, and Guidant saved me from paying early distribution penalties or paying off debts from a loan.” Within five weeks, he had access to his funds to purchase his franchise.

Capobianco purchased Abrakadoodle in August 2006, and he opened for business only two months later in October. He points out that one of the reasons he could be up and running so quickly is that Abrakadoodle is a mobile business. “We sell to schools and preschools and go into the classroom to present our lessons as part of the curriculum or after-school enrichment programs,” he says. “I’ve just tapped into the home-school market, and I’m already teaching classes for a group of 40 home-schooled kids.”

And these aren’t just any art classes. These are classes that help children draw outside the lines, think outside the box and follow wherever their imaginations lead – not a particularly surprising approach for a company tied to the tag line, We inspire the creativity in every child.

“What we teach is the process of art,” Capobianco explains. “In other words, the importance is placed on how they get there, not necessarily what they produce. We encourage visualization first, then execution.” Along with building creativity and individuality, the Abrakadoodle lessons are designed to introduce children to such art basics as color, form and design and to encourage developmental basics, such as fine motor, language and cognitive skills.

Capobianco gives an example of a recent Abrakadoodle lesson. When the presentation touched on the artwork of Michelangelo, the students were instructed to lie underneath their desks to paint up on the “ceiling” (the underside of the desk covered in construction paper) to experience what it might have been like to paint the ceiling of the Sistine Chapel. “They had a ball. Then when we talked about the famous painting of God’s hand creating Adam, we had pairs of kids trace their own hands in a similar likeness,” he says. “You know, reaching out and touching finger-to-finger.”

Creatively connecting and communicating is not just an important lesson Abrakadoodle teaches its students; it’s a philosophy that, according to Capobianco, is woven throughout the franchise itself. “In this world, the CEOs are not untouchable,” he says. “We talk all the time with them. And they actually listen.”

When he isn’t teaching the color wheel or hand-to-eye coordination, Capobianco is busy building up his franchise business, which covers East Pasco and Hillsborough County in the Tampa Bay area. He employs five instructors, and he’s looking for more. To that end, he molds cute lizard-like critters out of clay, sticks his business card in their mouths with the words, “Now hiring,” and leaves them around town at Starbucks and other gathering places. “Business wise, I’m about 40 percent of the way to my goal,” he says. “I’m not a top producer yet, but I will be.”

Capobianco reports that, while his franchise isn’t yet as financially rewarding as his past jobs were, emotionally “it’s phenomenal.” He no longer thinks of his life as high-pressure and hectic, he’s more closely involved with his family and community (“My kids and the neighbors are my focus group; I try out the new lessons on them”), and he swears he feels like an 8-year-old kid again. “I don’t believe I’ve complained in eight months. I don’t even whine any more.”

So how does it feel to have gone from layoff to laughing every day? “I can honestly say that I never smiled in my 18 years in the corporate world like I smile every day now,” he says. “It’s absolutely hysterical!”

For more information on Self-Directed IRAs or Business Financing, please visit www.guidantfinancial.com

Handyman and Restoration Franchises Always busy, no matter which way the economy goes!

2007-12-31T23:04:00.000-08:00

The home repair and restoration market includes a limitless supply of exciting franchise and business opportunities! Home repair can mean everything from a small handyman or furniture repair business, to a nationally-known home restoration concept. When the economy is booming, homeowners have more money to spend on substantial restorations to their residences and vacation properties, or to buy and build new homes. When the economy is lean, people tend to stay put and make necessary repairs to maintain their most valuable possessions - their homes, property and vehicles.

All reputable repair-oriented franchises will assist the new franchisor with marketing and advertising to help you get established. Many offer ongoing company wide programs that capitalize on their brand name. Your success is highly dependent upon the reputation you're able to create for your new business, and the number of referrals you're able to generate. Home repair and restoration franchises appeal to the hands-on practitioner, as well as the experienced manager who prefers to supervise a team of professionals with skills in repair and restoration.

The companies featured here include relative newcomers and established, national brands, and all offer exciting entrepreneurial possibilities to the prospective business owner!

EntryPoint - EntryPoint offers customers a dramatic way to increase their home's curb appeal by installing decorative glass into an existing door - in about an hour! Construction figures show 75% of today's home are built with steel or fiberglass doors. These home owners are the number one customer base for EntryPoint®. These same construction figures show that over 73 million doors have been delivered over the past 10 years with either no glass or clear glass inserts. You can see the potential opportunities for Franchised EntryPoint® Dealers!

All Franchised EntryPoint® Dealerships will have an exclusive territory, and you will receive an extensive five day training course at their corporate headquarters plus four days of field training prior to showroom opening. EntryPoint® is looking to fill their territories with qualified business people as soon as possible.

Maintenance Made Simple - Armed with an innovative business model and cutting-edge systems not found anywhere else, Maintenance Made Simple franchisees are taking advantage of a 150 billion dollar industry without ever having to swing a hammer or turn a screw.

From the moment you start your business, their trained customer service professionals accept incoming calls from your customers, answer customer questions, schedule appointments and make outbound sales calls on your behalf. In addition, many franchisees participate in a National Leads Program, which can be effective the very day you start your business, and can provide a significant supplemental marketing channel as you build your local name recognition.

One more benefit of the Maintenance Made Simple franchise opportunity is their Jumpstart program, a comprehensive pre-training correspondence course that covers every detail of your new business’s start-up. By doing as much as possible before training, once you’ve completed our initial training, you’ll ready to run your business and generate revenue.

Re-Bath Bathroom Remodeling - Owning a Re-Bath Franchise will provide you with a proven business opportunity. Over 84 million homes in the United States are more than 15 years old, and each of these homes has at least one bathroom. That is a huge number of bathtubs, showers and walls in the residential market alone. Now add apartments, dormitories, military housing units, H.U.D. projects, hotels and motels to the equation.

To meet this nationwide demand for Re-Bath products, Re-Bath LLC, established what is now the largest franchise network in the industry. Our comprehensive approach, excellent products, years of experience, sound management and positive reputation all combine to give you a unique opportunity in the booming remodeling industry.

As a Re-Bath Franchisee you get Prime Exclusive Territory, The Industry's Leading Products, Ongoing Operational and Marketing Support, Complete Nice Day Training Program, Proprietary Product, Patented Installation Technology. Re-Bath is looking for exceptional people to join our organization. Find out if you have what it takes to become part of this booming industry.

Surface Specialists - As a child you may have dreamed of becoming a doctor, a lawyer, or even a fireman, however, you probably didn't dream of buying a franchise or becoming a bathtub repairman! However, if your current dreams include running your own profitable business, Surface Specialists will show you why spending all day in the bathroom can be a good thing!

Though Surface Specialists franchises have been business since 1981, there are still a lot of people unaware of the great franchise opportunities available to them as alternatives to typical kitchen and bath remodeling. The company is looking for qualified, motivated and committed individuals who will build the value of the Surface Specialists name, follow their proven operating system and use their ongoing support to dominate local markets and get the word out that there are better and lower cost alternatives to complete remodeling!

As a Surface Specialists franchisee, you will not have to rely on one service to support your business. They currently offer ten distinct profit centers, more than any other home improvement franchise. You will not find another franchise at this price with as much to offer.

UBuild It - UBuildIt is the first and only franchise company to offer a national service to the owner-builder segment. Recognizing a need by consumers for help and guidance on their self-managed building projects, UBuildIt was formed in 1988 to offer solutions. Since that time they have helped thousands of owner-builders realize their housing dreams by consulting on the construction of their new home or significant remodel project. Entrepreneur Magazine ranked UBuildIt as a top Franchise 500 in 2004.

UBuildIt offers Franchise Partners the opportunity to take advantage of their business skills in sales, marketing and consulting without the headaches, liability and risks of being a builder. Construction Consulting is less involved than being a custom builder or even a project manager. It's a great time to join them in a new market segment.

UBuildIt is seeking quality candidates in markets all across the United States. We want offices that will reach clients where there is building activity, and we want remodel offices in areas with an aging housing stock. They want to hear from successful entrepreneurs or business managers looking for a business to grow and operate, and successful builders looking to utilize their experience and knowledge to transition out of hands-on daily involvement in the construction process.

UBuildIt has a strong, proven business model that just happens to be construction consulting. The franchise owner does NOT need a construction background. They do require that the UBuildIt Construction Consultant have residential construction management experience, and current relationships with local, quality subcontractors.

AeroColours - Aero-Colours®, Inc. is recognized as the market leader in the paint repair industry based on our superior paint repair processes, industry-leading products, and highly trained and motivated franchisees. In addition to the dealer market, opportunities also exist with wholesalers, commercial fleets and individual car owners. Experience in paint repair is not necessary as many of their successful franchisees come to them with unrelated business experience and careers. They will teach you to be successful in this business if you have a genuine interest and are willing to make the commitment for success.

Your assigned territory is exclusive to you. You have the power to maximize your market potential. You can start out hands-on as a manager/technician and grow the business as large as the market will allow. Many franchise owners operate businesses that include multiple vans on the road with managers to oversee the day-to-day operation. This type of operation then frees the franchise owner to further expand the business by securing additional territories.

In addition, Aero-Colours® provides, without cost, an 800-telephone number that routes all service inquiries originating within your territory to your office telephone or to your location via cell phone. This benefit allows the franchise owner to respond to all current and perspective customer needs quickly and professionally.

Aero-Colours® offers over one hundred and sixty hours of classroom and hands-on training that prepares the new Aero-Colours® franchise owner for success in their territory. Plus, follow-up training in the field is available to any new franchise owner that may need additional fine-tuning of their skills.

DUCTZ - Ductz is rapidly becoming the recognized industry leader in helping home owners and businesses improve indoor air quality. As a Ductz franchise owner, you’ll build a business that will meet the rapidly growing demand for the benefits of better air quality by providing Residential Homes and New Construction Duct Cleaning; Dryer Vent Cleaning; Commercial Duct Services; and Restoration.

Your success as a Ductz franchise owner is in properly managing your business -- not cleaning ducts. Your business is building relationships in the business community and dispatching your trained technicians to do the work. They will teach you how to effectively recruit, train, and motivate good employees. The technicians do the work, you manage the business! They’ll also teach you the business to business marketing skills that will help you build a profitable base of referral partners.

If you qualify and are invited to their Discovery Day, you will get a glimpse of the support they provide to help you build a well-managed business. Their winning combination of people, technology, and proven business systems will help you maximize and reach your professional potential.

DUCTZ has just completed phase II of its franchise expansion plan. In this phase, we selected five concept development locations throughout the United States, and focused on refining our business model in both residential and commercial markets. We are now entering phase III, which allows for additional expansion throughout the United States. This is your opportunity to get in on the ground floor of this emerging industry!

Furniture Medic - Furniture Medic, the world's largest furniture repair and restoration franchisor, has established a reputation for excellence unmatched in the industry. Our system's success is firmly rooted in our dedication to providing our customers with unparalleled craftsmanship and quality service. Utilizing exclusive, technologically advanced equipment, products and processes, the expert technicians of Furniture Medic revitalize valuable furniture and wood pieces, restoring and enhancing their natural beauty and strength. In addition to delivering dramatic results, a Furniture Medic franchise offers convenience by performing many repairs on-site in homes and offices. Our franchisees provide home and business owners an affordable alternative to replacing fine wood furnishings and fixtures.

As a Furniture Medic franchise owner, you will have the opportunity to build your business on our system's solid reputation and established methods.

Hear what their franchisees have to say...

"We like the fact that Furniture Medic has been developing new programs and new lines of products and services for us because we’re able to generate additional revenue with the existing customer base that we have. The types of products that have been developed, the types of training systems, the methodology of training is really putting out a higher level of franchisees than when I started back in 1995."

"It really does all belong to you…I can walk in the office door and say, ‘This is ours – we did this!"

"We’ve definitely been blessed with the Furniture Medic franchise system. We’ve definitely put a lot of hard work into it. We’ve learned a lot as we’ve gone, but we’re really happy we made that decision – it really made a big impact in our lives."

Global Safe Technologies - Slippage accidents are one of the leading causes of disabling injuries and the second leading cause of death and disabling injuries after automobile accidents. Worker’s Compensation and Insurance Liability claims are astronomical.

The Company’s products have been field tested and proven for more than
13 years in hospitals, hotels, restaurants, offices, nursing homes, health clubs, industrial areas and tiled decks / pools and spas. All products are bio-degradable and / or water soluble and environmentally safe.

The response from the Insurance Industry and the Food and Service Industry at national trade shows clearly indicates that Global Safe Technologies Inc. products and programs have found a niche in a huge market.

Global Safe Technologies Inc. is on the verge of expanding very quickly across North America and internationally, particularly in Australia and South East Asia. The recent, rapidly growing recognition and endorsements by the Insurance Industry and many of the world’s largest food and service corporations is creating a huge and very profitable opportunity for Master Distributors and Authorized Dealers / Installers worldwide.

House Doctors Handyman Service - This complete, ready-to-operate franchise is what the industry calls a "turnkey operation." It takes most of the guesswork out of starting a new business. House Doctors will help you establish and maintain "the House Doctors Concept."

House Doctors' unique approach goes far beyond that of the average home repair business. Like most good franchises, you will receive comprehensive training on how to organize and run your business. But that's not enough. You have to know how to get the business! These marketing skills and techniques are the hallmark of House Doctors.

House Doctors' best advertising is "word-of-mouth" through personal recommendations by home owners, real estate agents, friends and neighbors. To supplement word-of-mouth, House Doctors have an unmatched year-round marketing program which includes pre-approved artwork for direct mail, newspaper ads, magazine ad slicks, color brochures, rebate certificates, coupons, site signs, Realtor presentations, trade show exhibit, publicity releases and radio spots. This complete program is started even before you do your first job.

This is the opportunity for you to get in on the ground floor and reserve and exclusive territory with the greatest potential.

Miracle Method Bath & Kitchen Refinishing - With proven products and systems, Miracle Method can dramatically improve your chances for success. They know the surface restoration business inside and out. As a franchisee you have Miracle Method's reputation and track record to rely upon. You are in business for yourself…not by yourself. Why "recreate the wheel", when Miracle Method has over 25 years of experience and knowledge to offer you?

Miracle Method provides A to Z support to its franchisees. The products and services provided can be summarized as help with technical, marketing and administrative aspects of running a business. Miracle Method can help you become the dominant refinisher in your market. They have the systems and knowledge to help you be successful and profitably grow your business.

There may be other ways to learn how to refinish a bathtub. But if you want to be the best at what you do and want to make money in the surface restoration business, then Miracle Method can help you achieve those goals.

Mr. Handyman - If you are seeking a business with tremendous customer opportunities, stop right now. Mr. Handyman believes their franchise opportunitiy is your answer. You will own a high-demand handyman service that caters to 100 million U.S. homeowners and commercial customers needing handyman service, home repairs, and property maintenance.

You don't need to be handy to own a Mr. Handyman franchise. Their franchisees don't do the repair work. They will teach you how to effectively recruit, train, and motivate good handyman employees. The handyman technicians do the work, you manage the business! If you qualify and are invited to their Discovery Day, you will get a glimpse of the support we provide to help you build a well-managed handyman business. Their winning combination of people, technology, and proven business systems will help you maximize and reach your handyman professional potential.

With your minimum investment, they offer a winning combination of people, technology, and their proven system to help you reach your growth potential. Mr. Handyman may just be the perfect business. A ton of potential -- without working nights and weekends. A small initial investment. Exploding handyman customer demand. And the backing of a handyman company that has everything you need to help get your business off the ground. Plus, continuing support to succeed in the long run. The American Dream is alive and well... Let them prove it to you!

Squeegee Squad - Founded by brothers Jack and Joe Ruegsegger, Squeegee Squad was originally known as Jack & Joe’s Window Cleaning, Inc. The founders have seen overwhelming success with the Squeegee Squad™ concept in the metro areas of Minneapolis and St. Paul, Minnesota. They have taken their concept from a small two-man operation to a booming business, which employees over thirty people during the busy seasons.

By deciding to franchise the Squeegee Squad™ brand, their proven system of top quality window cleaning service will soon be available throughout the country. The initial focusing will be on developing the Midwest (MN, ND, SD, IA, WI, IL, IN, OH), and then continue to grow the brand in the rest of the United States. Squeegee Squad™ has won many awards for great customer service including The Angie’s List Super Service Award in 2002, 2003 and 2004.

Squeegee Squad is also very committed to giving back to the community. In 2005, they began donating free window cleaning to all of the homes built by the Twin Cities chapter of Habitat for Humanity, as well as other local organizations. Jack believes that “all successful businesses have an obligation to give back to the community.”

Each franchisee will have access to the following: customized Squeegee Squad™ software, a detailed operations manual, initial and ongoing support and future advertising co-ops. Each franchisee will complete training at corporate headquarters on the “wall of windows” as well as classroom and onsite training, be assured a protected territory, special arrangements with suppliers, and a franchisee website. In addition, a representative will visit the franchisee’s territory for initial sales and set-up training.

Ask These Money Questions Before You Buy a Franchise

2007-12-31T23:02:00.000-08:00

Congratulations on your interest in buying a franchise! The number of companies that have chosen to grow their businesses through franchising and the number of people who have decided to own their own business through franchising is a testament to the power franchising has to make dreams come true. But there are numerous questions you will want to have answered before you commit to anything and asking MONEY questions may be the most important.

Here are what we feel are the top money questions to ask – and get answered – when deciding on the purchase of a franchise business:

How much money can I make with this franchise?
We put this question first because it is probably the first question you will have when considering a franchise concept. The answer will depend on many factors but a typical franchisee doesn’t start making money until the second or third year. You may find a range of incomes in the franchisor’s UFOC (Uniform Franchise Offering Circular) which the franchisor will provide, but this information is not mandatory and the range may be too large to be useful. A better way to find this information is to talk to a number of existing franchisees who have been in business for several years or more and find out when they started seeing a profit and how much they currently make. Remember that other factors will influence the profitability of your franchise, such as your location, the marketing you choose to do and how engaged you are in the running of the business.

What is the total investment required for this franchise?
Knowing what your upfront costs will be for buying and running the business until it makes a profit is a key piece of information. You will be able to learn about these costs in a general manner from reading the estimated investment section of the UFOC. But for more specific and accurate information, you will need to talk to as many current franchisees as possible. Even then, your figures will only be an estimate of your actual costs so be sure to plan for having sufficient working capital.

How long will it take before I reach the break even point with my new franchise?
The reality is that your business will probably not make money during the start-up phase. You have to build up your customers or clientele and for most businesses that can take a period of time. The franchisor will be able to give you a range of time in which most of their franchisees reach the break even point but, to be safe, plan on the longest amount of time in that range rather than the shortest time.

What will I need in working capital as my business begins?
Working capital, also called operating capital, is the money you will have to put into your new business after it opens until your business starts making as much money as you are spending – the break even point. This includes both operating expenses (such as your lease, cost of employees, cost of equipment and utilities, etc.) and your personal living expenses. Since the break even point could take longer than expected and your expenses could be greater than expected, an extra cushion of capital is a smart idea.

What are my options for financing my franchise?
There are several options for financing the purchase of a business. The most common is to obtain a bank loan, which will usually need to be secured by your personal collateral (such as the equity in your home) or through an SBA (Small Business Association) guarantee program, or both. Some franchisors will offer advice that will help you obtain this financing while others require you to do this part on your own. Some of the equipment you need can be leased, which is helpful because then you will not be tying up all your cash, and leases can be secured by the assets that are being leased. Both franchisors and banks will require you to have a portion of the amount needed in cash, often referred to as “having skin in the game.” This means that you are risking your own money as well as the bank’s money, giving you a stronger reason to make the venture successful.

Other ways to finance your franchise can be loans from family and friends or by taking on a business partner who has the money required. There are also companies who will assist you in borrowing money from your own IRA or 401(k) accounts, without early withdrawal penalties, to finance a franchise business.

Whatever means of financing you use, keep in mind two things: 1) it’s never too early in the franchise research process to begin looking at your financing options and 2) having good credit and cash in the bank are always good ways to prove financial stability.

How strong is the franchisor financially?
This may not be the first question that comes to mind when researching a franchise opportunity but it is a question you need to ask. A franchise company that is in a strong financial position will be able to support the franchisees and will be prepared to survive over the long term, building the brand and making changes to the product / service / operating system as needed. The franchisor’s UFOC will provide you with their financial statements but if you aren’t sure what the figures mean, ask for help from your financial advisor.

Getting answers to these money questions is a critical step in your process of franchise research. Take time with each and every question and talk to as many people as necessary so that you are sure the answers you get are accurate. Then, if the answers are acceptable to you, you can be confident that you are making the right choice in a franchise purchase.

FranChoice is a national network of franchise consultants that provide free guidance and advice to qualified individuals in the United States searching for franchise opportunities that match their personal interests and financial qualifications. Learn more about FranChoice.

To see all articles about researching a franchise opportunity, click here.

Franchise Prospecting and How To Maximize Your ROI

2007-12-31T23:01:00.000-08:00

September 2007 Franchising World

There is a resurgence of trade shows and other events underway.
By Jim Squire, CFE

Twenty years ago, when franchise lead generation was much simpler, trade shows were the lifeline of franchise development teams. As the primary, and often only, source of prospects, franchise companies flocked to franchise trade shows and expos across the country in droves—daring not skip a single one, or they might miss out on their only opportunity to meet prospects and make that critical franchise sale.

When the Internet entered the picture and became mainstream in the 1990s, trade shows and expos experienced a steady decline. Leads from the Internet poured in from all directions, and franchise systems opted to invest resources in both building their own Web sites and optimizing their Web site’s performance, as well as paying for stand-alone presence on franchising portals, rather than traditional expos and trade shows. They felt their development teams’ time and funds were better spent on the telephone following up with all the Internet leads. Likewise, prospects spent most of their time surfing the Internet for franchise concepts, rather than spending time and money to travel to expos around the country.

Over the past several years, trade shows and expos have experienced a gradual comeback. Numbers show that attendance continues to climb, on both sides of the fence. Prospects are realizing the value of attending expos to “shop” around for potential franchises and actually talk in person to the human beings behind the Web sites, and therefore more franchise systems, particularly the emerging franchises, are re-allocating funds to exhibit.

Why the resurgence? It seems that everyone simultaneously came to the realization that, while the Internet is an efficient method for initial shopping, there’s tremendous value in good, old-fashioned, face-to-face interaction. Franchising is, after all, about establishing and building relationships. By attending an expo, prospects could “put a face” on their Internet investigations, while franchise organization could use trade shows to help “seal the deal” for prospects who came to them from the Internet. In other words, the Internet provided the initial exposure and introduction to the concept, but the expos became the logical next step in the process.

In addition to prospecting and sealing deals, franchise companies also realized that trade shows and expos can be powerful tools to create brand awareness and network with other franchise systems in the industry. Often, business and personal relationships are created with peers at these shows. As franchise exhibitors come to terms with the idea that they’re basically all in the same boat, they frequently leave the shows with two sets of business cards: one with prospect leads, the other with peers in the industry that later develop into valuable professional and personal relationships.

Getting the full benefit from your budget
Franchise system budgets are tight, and development teams know they need to prove the value and return on investment for every trade show and expo they attend. If they don’t, they know that the following year, the show simply won’t go on. The fact of the matter is that the tremendous value of trade shows and expos can be proven time and again—if the right steps are taken and a plan is carefully followed.

First, it’s critical to carefully choose the most beneficial shows to attend, as investing in the wrong venues can be a non-productive use of time, not to mention precious marketing dollars. How do franchisors pick and choose which shows to visit and which shows to exhibit?

Major factors to consider include credibility of the hosting organization, the target audience and the greatest opportunities for meeting quality leads and networking with other franchise systems. Like anything else, due diligence is important. Ask peers for recommendations on which shows have been most successful for them in terms of education, networking and lead generation. Also, look for shows hosted by a reputable organization, for example, the International Franchise Association or National Restaurant Association.

Outside of expos and regional trade shows, franchise companies can consider attending a variety of specialty events, such as the Multi-Unit Franchise Conference, the Elliot Leadership Conference and the Multi-Unit Foodservice Operators Conference. Other conventions to consider include those that make the most sense for an ideal franchise prospect’s demographic or psychographic profile, such as the AARP if your system seeks to reach the baby boom generation, or the National Urban League, if the company is seeking to recruit more minorities into its system. While such events aren’t necessarily business specific or franchise-sales related, they create good opportunities for prospects and networking.

Consider location. Shows such as the West Coast Franchise Expo are ideal for franchise organizations seeking prospects to expand in California, Arizona or other states in the region. HoneyBaked Ham recently supplemented its Texas expansion efforts by exhibiting at a Dallas franchise show. Before attending, it sought leads in the area and targeted them with direct mail, advertising and public relations. The increased impressions create more qualified leads once prospects see the booth.

Once the most appropriate shows to attend are selected, franchise companies should consider several additional factors to ensure the potential return on investment, including setting goals and objectives beforehand, as well as emphasizing post-show follow up efforts.

Set goals. Franchise systems should consider what it is they want to accomplish at the show and to set realistic goals. For example, perhaps the goal is simply to test out the environment to see if it’s worth investing again the following year, to check out the competition, or to meet a certain number of realistic potential prospects to start the conversation process. Another goal could be to simply put the name out there to increase brand awareness or get the word out about a new image or prototype store. Goals can also be as simple as positioning oneself as an ambassador of the brand, developing dialogue among industry peers and potential candidates, and attending seminars where the experience gained will help attendees become a better, well-rounded franchisor.

Keep it positive. While at the show, it is important to remember that every conversation at a trade show should be positive. Whether exhibiting or not, conversations with prospects or peers should be about how excited they are to be affiliated with the brand they’re representing and how encouraging it is to see the growth of the industry. Complaints about the cost of booth space, location or even how much their feet hurt should be kept in check.

Best impressions. The goals of exhibiting at a booth are generally to attract new franchisees, build brand visibility and to get a buzz going about the company. Exhibitors especially have to feel comfortable in talking with those they have never met. Find out why they stopped at the booth, and resist the temptation to hand out as many marketing cards as possible. Literature often acts as a barrier to conversation, and chances are, it will be discarded at the first opportunity.

Control the crowds. Experienced exhibitors caution against booth overcrowding. Be careful not to outnumber visitors, or monopolize other company staff, or do anything else which would restrict visitor interaction. When not working the booth, exhibitors should make some effort to walk the show and network with representatives from similar concepts. Frequent trips to your hotel room or going off-site to relax will deter the maximum return on investment.

Contact system. Always try to make as many contacts as possible at a show and adopt a system of remembering and identifying people or their interests on their business cards or, if possible, in a BlackBerry or laptop when they walk away. It can be helpful to take a break away from the crowd and jot down notes while they are still fresh in your mind, such as a unique fact or anecdote that will later help put a name to a face. Adopt a code—use an “A” for hot, promising contacts, a “B” for medium potential, and so on.

Follow-up. When it comes to trade shows and conventions and turning leads into deals, it’s all in the follow up. Despite the fresh pile of work from being out of the office, it is imperative to promptly follow up with contacts from the show. Let them know how great it was to meet them, and send any follow-up information that was promised. It shows diligence and makes the prospect feel like their matter is a significant engagement for the company.

Maximizing Learning and Networking Potential
Conventions and trade shows are not just about cutting deals, but learning about the franchising industry and networking. One of the key objectives at a trade show is to make connections. These shows are designed to bring franchise companies in various roles in the franchising industry together in a comfortable setting where they can share of ideas, resources and experiences.

It’s easy for franchise professionals to get so caught up in the day-to-day activities of their home office that they miss critical opportunities to connect in the industry. But it’s often been said that the common threads of every great organization include a culture that promotes idea sharing and programs that cultivate mentorship relationships. Research directly correlates these elements to profitability.

Trade shows create a network where professionals in franchising can build relationships, mentor each other, address challenges, share strategies and ideas and present best practice examples to help one another be successful. Even social networking events planned during trade shows help foster relationships in franchising. With each event comes new contacts, new lessons learned, and sometimes, new friendships. Trade shows and conventions are ideal settings to cultivate relationships.

Trade shows are like anything else: it’s what one makes of them. Franchise companies get back what they put into them. Careful planning, goal setting and choice of the right shows are important first steps. Once there, following the previous advice of positive first impressions and careful attention to follow up are key factors that contribute to maximizing return on the investment.

Jim Squire, CFE, is the director of franchise development for the HoneyBaked Ham Co. and Café. He can be reached at jsquire@hbham.com.

Managing the Franchisee Relationship During a Corporate Shift

2007-12-31T23:00:00.000-08:00

June 12, 2006
By Lynette McKee, CFE

Today’s franchise companies are experiencing dramatic changes, either through mergers and acquisitions, exponential growth and or through changes in brand identity and executive leadership.

During a corporate shift in strategy, the risk of damaging the relationship between franchisor and franchisee runs high if the franchisor does not have a clear strategy for maintaining a positive relationship with its franchisee network. Franchisees have an equally vested interest in a successful franchise program. The franchisee has committed financially in the relationship with the same objective of achieving profitable results. It is the responsibility of the franchisor to play an active role throughout the process of corporate change, keep franchisees up to date with the organization’s future plans and to keep them informed of all changes that will affect their business. It is critical for both parties to have a mutual understanding in order to address the challenges each will face during transition and that is required to help them meet their goals.

Communication is Key

One of the major obstacles of the franchise relationship, particularly during corporate change, is communicating effectively throughout the franchisee network. Franchisees need to constantly be kept informed of the franchisor’s plans towards making their business better. Communicating key corporate messages on new programs and initiatives designed to help grow the business, ultimately benefiting franchisees and the franchisor, requires a very strategic communications plan.

Create a Franchisee Forum

It’s not only essential to keep franchisees abreast of all corporate changes, shifts in strategy, but it is also important to provide a platform where select franchisees can share their opinions and provide their franchising expertise on corporate strategy. This allows franchisees to play an active role in corporate decisions and shows how much their opinion is valued by the franchisor.

Creating a Team Organization

Understanding the roles, responsibilities, differences and accountabilities of the franchisor and the franchisee relationship is important, especially during a time of corporate change as these may shift depending upon the franchise organization’s new strategy.

A market alignment structure helps the franchisor communicate internally and helps everyone within the organization to understand strategy and objectives, helping the entire organization to communicate effectively to the franchisees. It involves a straight or dotted line from each discipline within the organization to the leadership of the market and or region. With these members working in concert within the market, everyone’s objectives are targeted toward the same goals. Team members create a business plan for the market that includes operating standards, training, marketing, development and human resources. Everyone is involved in building the plan from the ground up and ‘owns’ the plan throughout the implementation. Strategies for the brand, then ‘roll up’ from the market teams’ efforts. It’s a win for everyone.

With corporate changes come new messages that need to be communicated across the organization and the franchisee. The franchisor needs to present the reason for corporate change clearly and effectively, explain why it’s happening and what the objectives are behind the change.

Communication within the brand becomes synergized with the creation of the market teams. With the building of the ground-up plan, everyone is “in the know” of what needs to occur in the market from personnel, marketing, implementation of operational standards and so on. The teams also work in concert with the franchisee community. It becomes “one voice” no matter who from the team is the communicator. This type of communication to the franchisee community is refreshing. How often does a franchisee say, “I get a different answer from everyone I speak to.”

Work Closely with Franchisees During
Aggressive Expansion

System growth can be negatively affected if a franchise organization does not have a clear strategy for communicating the expansion plans with franchisees. As today’s franchise organizations experience rapid growth in effort to gain a national presence, a strong market alignment structure is needed to keep franchisees informed on expansion plans and also help plans stay on track. Franchisees need to work closely with the organization and be kept abreast of all changes as they happen. The support of franchisees is critical to executing an aggressive expansion plan successfully.

Keep Realistic Expectations

When planning a national expansion plan, it’s important to keep realistic and obtainable goals. Franchisors should work directly with franchisees to determine the appropriate number of units for each market it plans to expand in.

Buy-in to Expansion

As a mutual partner, franchisees share the same goals as the franchise organization—building their business to be bigger and better. Getting franchisees’ buy-in on a new strategy is important to making it work.

Several methods can be used to encourage the franchisees to align with the same goals of the franchisor. Communication is critical. Getting franchisees together with the leadership of the brand can provide a moral booster, if the right message is presented. The franchisor must be prepared and organized and be able to speak to the business plan and how it is to be implemented. When setting the strategic direction, include the franchisee community: it will go a long way. So many times, franchisees feel that the franchisor does not include them in the planning of the business, and when the plan is announced, it is contrary to what they believe will benefit them.

Explain the Changing Face of Franchising

T oday’s franchises facing aggressive expansion are targeting large area developers for multi-unit deals. More than 1,500 U.S. franchise companies are conducting business through more than 760,000 units. An increasing number of franchisors in a variety of different industries are selling development rights only in multi-unit packages. Franchisors should explain the shift in strategy to existing franchisees.

Franchisee Recognition

Franchisors should promote franchisee relations through incentive programs designed to acknowledge franchisees for their accomplishments and strong leadership skills.

Executing such incentive programs can help the franchisor grow in an existing market and can also provide the opportunity for a successful franchisee to enter a new market and be the mentor for new franchisees entering the system. Franchisees should always be encouraged to work together collaboratively, creating and sustaining teamwork across the franchisee network.

Kick off a New Initiative

Franchise conventions offer an interactive place to get all franchisees in the same room and create excitement over a new initiative planned for the franchise organization. Conventions give franchisors the opportunity to interact with the franchisee community and discuss how they look to them for added growth within the system. A convention also provides a forum for franchisors to announce and educate franchisees on new initiatives planned for the brand.

The Road to Expansion

Corporate change, such as planning an aggressive expansion, is an exciting venture filled with its own challenges. Preparing your business for the different stages of growth and knowing how to address the main points along the way is essential to making franchise expansion a success.

Lynette McKee, CFE, is the vice president of franchising for Dunkin’ Brands. She can be reached at lynette.mckee@dunkinbrands.com.

Three Avenues to “Destination Success“

2007-12-31T22:59:00.001-08:00

Franchising World, December 2006

By Ken Houck, CFE

Franchisees and franchise companies come together to build a business relationship for a period of 10, 15, 20 years or sometimes longer. The goal is to be mutually, financially beneficial. Each party enters into the franchise agreement with a certain vision of their future in mind. As in any relationship, business or personal, things may not always go the way one had envisioned them. That is natural, but what causes the relationship to go sour, or become adversarial? Let’s face it, neither party gets pleasure from an uncomfortable, sometimes confrontational and possibly financially-expensive situation.

There are many ways a franchise relationship can become strained. The franchisee may believe he was misled before signing the franchise agreement. The franchisee may not be making the profits expected, not receiving the support he believed he should receive, may not have faith in the business model any longer, may not understand the franchise agreement or may have never read it. The franchise system may believe the franchisee is a renegade, not truthful or even deceitful. The franchise company’s culture and philosophy may be to let each franchisee make it on their own. These are just a few of hundreds of reasons for deterioration of the relationship.

Top 10 list of issues that can cause conflict:

1. Encroachment and non-traditional locations-defined protective radius,
2. Remodel requirements, clear-cut requirements, no surprises,
3. New product introductions or unapproved products,
4. New system introductions-reasonable time for implementation,
5. Inferior operating standards-consistent tool for measurement and consistent application,
6. Use of advertising funds-establish co-ops,
7. Transfer of ownership-clear policy,
8. Non-compete covenants,
9. Default and termination procedures, and
10.Renewal issues (facility upgrades, modifications to the franchise agreement).

Imagine that, at some point, one of the parties involved makes the conscious decision that he has had enough. He closes the door on the relationship. This usually comes from a breakdown in communication somewhere. The conversations may have evolved from avoiding the facts to keep from hurting someone’s feelings, not having the courage to have tough conversations and leads to communication that becomes personal and heated, then talks just stop. At this point everything seems to get done in writing, documenting the communication, and getting poised for some form of legal action.

Neither party enters into the agreement initially with failure as the goal. The loss of a franchisee is expensive for both the franchisee, as well as the franchise company. Although the termination of the franchise agreement sometimes is the final answer, it should be the exception and not the rule. A strained relationship becomes worse due to poor communication and resolution skills. Ironically the way to begin the repair of the relationship is still through communication and relationship skills.

A disenchanted franchisee may not be willing to listen to the franchise system or its consultants at the beginning of the conflict-resolution process. This is where the members of the franchise advisory council, if a system has one, may be helpful in explaining the reasoning behind the franchise company’s methods. After all, the members of the franchise advisory council are themselves franchisees and peers of the financially- and emotionally-injured party. Sometimes the franchisee may have a valid complaint and the advisory council members may be able to better communicate the problem to the franchise system as they are emotionally-removed from the situation. After all, it is hard to be logical when one is emotional.

Franchise advisory councils are usually made up of some great operators, businesspeople and mentors. Finding the right member of the advisory council to talk to the franchisee involved can usually be done without going to great lengths. This person, or mentor, can walk the franchisee through the resolution process from start to finish in many situations. However, the franchisee involved must seek the advice from a mentor with an open mind and a goal of repairing the relationship with the franchise system. The business relationship didn’t deteriorate overnight and the repair will also take considerable time as each party must build credibility with the other again.

Larry Tate, chairman of the International Franchise Association’s Franchise Relations Committee and senior vice president of franchise sales for the 500-unit Golden Corral Buffet and Grill chain recalls the song “I’ve Got You Under My Skin” and the line “Let’s stop before we begin.” “I think the best way to resolve franchise relationship problems is to stop them before they start whenever possible.”

"Open lines of communication with personal contact and feed-back will allow many issues to rise to the surface early, when they can be productively discussed and resolved, before reaching the stage where both sides have hardened their positions and are digging in for a pitched battle.

“This franchise system works hard to keep the lines of communication open and operating. However some situations do require formal methods of dispute resolution and one of the three processes outlined here may be appropriate for you.“

Methods of Resolution
There are three methods of resolution prior to litigation that can be used if progress has not been made to this point. They are an ombudsman program, mediation and arbitration. Each one has their place in the resolution process and you will have to consider the details of your case to pick the avenue that is the best fit for your situation.

Ombudsman
The ombudsman program seems to be the least intrusive to either party involved. The ombudsman is one that investigates reported complaints, reports findings, and helps achieve equitable settlements. “An ombudsman is a third party who helps the franchisee and franchisor work through their differences,” says Haynes & Boone Partner Joyce Mazero. “The ombudsman will typically work with both parties over an extended period of time to help them identify their issues and find answers to their challenges. This person can be a member of the staff of the franchisor, another franchisee, or an independent third party.”

Both parties will agree on the individual who is to be the ombudsman. The ombudsman is working as a liaison between both parties and strives to get a win/win situation as the final result. An ombudsman program is available through IFA at www.IFAresolve.com.

MediationMediation is an intervention between conflicting parties to promote reconciliation, settlement or compromise. “Mediation involves the selection of a third party to help the parties talk to each other, and help them find solutions to their problems,” says Mazero. “In a typical mediation, the mediator will set aside a full day to meet with the franchisor and franchisee as to the issues outstanding, and how each proposes to address those issues. At the start of the mediation, the mediator will typically meet with both parties in the same room, explain the mediation process, and allow each party to verbally expound upon their initial submission. The mediator will then typically separate the parties, and meet with each one individually, help them find potential solutions to their problems, and remind them of the risks they face in failing to reach a mutually acceptable accommodation. Ultimately, when the mediator believes a proposal has been made from one side that will be acceptable to the other, the mediator will bring the parties face to face and outline the solutions.”

Mazero adds: “There are certain steps each party can take to improve the likelihood the mediation will be successful. First, mediation is not simply a time for the lawyers to meet. While lawyers who are involved in a dispute may need to be present at mediation, the decision-makers from both franchisor and franchisee must be present. The decision-makers must come to the mediation with an open mind; if either party thinks mediation will magically produce a resolution, they will be disappointed. It is also helpful if everyone is ‘invested’ in the mediation process. Investment can occur by sharing the expenses of the mediation, but it also occurs when everyone understands that mediation is crucial. A good mediator does not have to have formal mediation training, but they do need to understand franchising as franchise mediation is different from mediation in other businesses where the parties either are not likely to do business together in the future, or do not want to do so. The mediator must be creative, as solutions are typically not obvious, and typically not found in the initial proposals of the parties.” Mediation can be a positive situation, but usually one or both parties may have to make some concessions.

Mediators can be found on the franchise system’s staff, a fellow franchisee, a franchise consultant or franchise attorney. If using an employee of the franchise firm or another franchisee, mutual trust from both parties is a requirement.

Arbitration
Arbitration is the hearing and determination of a case in controversy by an arbitrator (judge). Binding arbitration must be agreed upon by both parties and many systems include in their franchise agreements that arbitration must be an avenue taken before or in place of litigation against either party. With arbitration, there will be a judge hearing the case and there may also be a small panel of peers or experts. The arbitration may not be held in a court room, it could take place somewhere as simple as a conference room in a nearby hotel. Each party will have the opportunity to state their case and witnesses may also be used to support claims made. After all testimony is heard, the arbitrator will make a decision. Both parties are bound by the arbitrator’s decision. With arbitration there is definitely a winner and a loser. Neither party may be completely happy with the outcome of the arbitration, but nevertheless, they must abide by it.

Resolving Conflict
The methods listed above are all to seek the resolution of the disagreement. If no resolution can be reached using the ombudsman program, mediation or binding arbitration then the franchise company and franchisee will end up in costly litigation, the result of which may be the termination of the franchise agreement and the closure of a viable business with or without continuing financial obligations. The franchise system may elect to release the franchisee from the agreement and the franchisee would have to cease doing business under the brand’s name and business format.

Hopefully, one of the three methods of dispute resolution discussed above will be effective and the franchisee and franchise company will have many more years of a successful business relationship.

Ken Houck, CFE, is vice president, franchise operations west of Golden Corral Buffet and Grill. He can be reached at khouck@goldencorral.net.

Turning Around a Struggling Franchise Company

2007-12-31T22:55:00.001-08:00

Franchising World, January 2007

By Catherine Monson

What would an individual do if presented with an opportunity to be the president of a struggling franchise company? He believes the concept has potential, that the franchise system has been mismanaged and that this has led to the decline or current troubled state of the company. Most business professionals know that they have many things they need to accomplish to successfully turn this company around. Where does a leader start and what does he focus on?

Listen to Franchisees

Without the existing franchisees, there is no company. That is the place to start. The executive must listen and learn; much like playing poker, once a card is flipped, it cannot be pulled back. Touching each and every franchisee as quickly as possible should be the first job. Next, the leader can utilize group meetings, conference calls, Web conferencing, one-on-one visits and telephone calls.

Listen to the franchisees and find out what is important to them and how they believe the franchise company has failed them. This involves a total immersion in what is going on with the franchisees and within their businesses. Since time is of the essence, relying solely on face-to-face visits and group meetings may be too time-consuming. It’s important to get on the telephone and call franchisees. Call the leaders in the network, the average performers and the low performers. Have a set of questions to ask each franchisee and capture input.

When I took over as president of PIP Printing in 1999, franchisee confidence in the company was extremely low, the company achieved less than a 20 percent renewal rate, and the tension and distrust between the franchisees and the franchisor was palpable. I spent the majority of my time during the first four weeks as president calling franchisees, getting to know them, their business challenges, where the franchise system had let them down in the past, and asking for constructive input on what service and support they would find of most value. Since about a one-third of the franchisees were on the East Coast and the corporate office was on the West Coast, I could get an early start on these calls, typically at 6:00 a.m., and still be “walking around” the corporate office at 7:50 a.m. More about “management by walking around” later.

I began each call sharing that I was looking forward to working together with them and that I was hoping that I could count on their support. I explained my background. I had the advantage of having been in the franchise printing industry for 19 years in just about every management function at Sir Speedy and MultiCopy. I shared that we were committed to providing real, substantive value and that we were going to do everything to renew every single franchise.

In 2002 and 2003, almost 70 percent of the system’s franchisees were coming up for renewal; the franchisees knew this and expected the company would cease to exist at that time due to non-renewals. Franchisees were asked about their business, what was working and what was not, which products were selling and which were not, which products and services were profitable and which were not, how the corporate office had served and supported them well and where it had not, and what they thought corporate could do to bring the most value to franchisees and to improve their business. Active listening is critical. And for every answer to a question, another more probing question was asked. Copious notes were taken.

Franchisees were also assured of the company’s priorities: to drive individual center sales volume through implementing strong national and local marketing programs; by expanding the products and services that franchisees provide to their customers; by providing substantive, quality field and corporate support; to provide outstanding targeted training programs for franchisees and their employees; and to improve franchisee profitability.

In those four weeks, almost 80 percent of the 390 franchisees who operated nearly 500 locations were called. Most calls took at least 40 minutes. These calls served as the basis to identify where change was needed. The “Pledge to PIP Franchisees” developed as a result of what was distilled and learned from this process. The pledge was displayed on each team member’s desk and shared with the franchisees at every group event.

Who are system employees and what is their belief system?
The phone will not answer itself. The corporate team leader must meet with and spend quality time with each and every employee early in the tenure. Listen to their ideas and complaints; one can always act later. The direction needs to be focused on WIN: What’s Important Now. No one will volunteer a personal contribution to the current status of the franchise; that will always be “someone else’s doing.” The task is to identify those employees who are committed to the success of the franchisee and franchise company and tuck that information away for later action.

Learn the Industry, Understand the Current Business Model
It is important to thoroughly understand the industry as well as the franchisee’s current business model: what is working and what is not, what is profitable and what is not, workflow processes, who are key customers and target prospects.

Create the New Business Model
Chances are that part of the problem that created the decline of the franchise company is the weakness in the franchisee’s business model, leading to poor profitability, which always leads to franchisee dissatisfaction, as it should. It’s important to understand the core metrics of the business and to develop the new or revised business model; once this is accomplished—and it should be done with input from successful franchisees to ensure it is real-world—it needs to be broken down into step-by-step “how tos” that the franchisees can implement.

Obsessing over the franchisees’ bottom line is essential. Everyone on the corporate team needs to understand how a franchisee makes money and know how to teach franchisees to implement changes so they become more efficient and profitable.

And the brand needs to become religion. It becomes religion first with the corporate staff and, from there, it will spread to the franchisees. Developing devotion to the brand is critical.

It is important to improve the business model and focus on making the existing franchisees profitable and happy before focusing on new franchise sales; when existing franchisees are profitable and satisfied with their franchisor, it’s easier to sell new franchises.

Develop Positive Franchisee Relations
Developing strong, positive relationships with franchisees is not a difficult task; all it requires is providing real, substantive value and keeping commitments. Of course, that is easier said than done.

There have been many articles on this topic and there isn’t space here for all the information. In summary, a franchise system should develop positive franchisee-franchisor relationships by balancing the interests of the franchise company, franchisee and system as a whole. It means providing real value: in the brand, the system, training, marketing and focusing on the franchisee’s profitability. It involves keeping commitments, treating franchisees with respect, and over delivering. It involves listening and participation.

Create a Culture of Service, a Sense of Urgency Within the Corporate Staff
Generally speaking, if an executive is given the opportunity to turn a troubled franchise company around, he will have inherited a staff that is unmotivated and unfocused. Upon joining the company, it appeared that every person had one job to do—rather than multitasking as had been the culture at Sir Speedy—and that the majority of the staff arrived late and left early. They even walked slowly around the office. The fact was that they believed that the network would not renew and that, in just a few years, the company would no longer exist. Due to a revolving door of presidents the previous 10 years, most of the best and brightest folks had left the company. This team needed a culture makeover and needed it fast.

I had the benefit of truly believing that this makeover could and would bring real value to the franchisees and had the commitment to do it. Nothing is more effective than leading by example. I was the first person at the office and the last person to leave. This did not go unnoticed by staff, due to the times on e-mails and contact reports, franchisees mentioning that I called them at 6:00 a.m. California time or finished a call at 7:30 p.m., and the volume of work I completed and generated. I also believe in “Management by Walking Around” and did it every day at 7:50 a.m. and 5:10 p.m. In just two weeks, the team got the message: be working before 8:00 a.m. and still working at 5:15 p.m. The team also started walking around the office faster.

The company held huddles—brief standing meetings with the entire team—almost daily, to announce changes, celebrate victories however small, and spread the culture. During this time the staff was “right-sized,” which meant almost 15 percent of the team was laid off. And each time a change was made, the person was told, it was explained to the entire team in a huddle, including the business reason why and how the workload would be rearranged or support for the model changed.

The management team and I focused the staff on providing valuable support and keeping commitments. Management got them to understand the need to truly focus on the most important thing: the success of the franchisee. The management team defined a new business model and immersed the entire staff in how to position it, explain it and train to it. The leadership broke the implementation down into manageable levels and every team member shared this with franchisees during every interaction. If the franchisees are successful, the franchise system can be successful. If the franchisees are not successful, the franchise company cannot be successful.

Management worked to instill an attitude of “If it can be done, it will be done” with the team, along with a sense of urgency. The leadership established the policy of responding to a franchisee’s call within 24 hours or sooner.

In just a few months, franchisees were commenting about the positive changes in service, support, attitude and sense of urgency they were experiencing from the corporate team. And we were delivering this improved service and support with fewer team members.

Right-size the Franchise Company’s Business Model
Just as important as creating the improved or new business model for the franchisee is to “right size” the franchisor’s business model. At the time of joining the company, it was overstaffed and provided poor service and support. With sound leadership and direction, after reducing the head count by 15 percent to meet an appropriate manpower model of staff per number of franchisees and locations, the quality of the service and support provided franchisees improved significantly as measured by franchisee satisfaction and the increased renewal rate.

Obtain Financing for Future Growth
It is also worthwhile to secure a relationship with a lender who understands the opportunity so that the company has a ready line of financing for future growth.

The Results
System franchisees embraced the new business model and added the expanded products and services. The renewal rate went from below 20 percent to 85 percent, which was critical to the company’s survival with close to 70 percent of the franchisees’ contracts expiring in 2002 and 2003. Franchisee profitability improved dramatically. Positive and trusting relationships between franchisees and the company developed and franchisee satisfaction ratings skyrocketed. Following these steps that worked so well for this company should prove beneficial in a turnaround opportunity.

Catherine Monson is president of PIP Printing & Document Services. She can be reached at cmonson@franserv.com.

Steps to Improve the Franchisor-Franchisee Relationship

2007-12-31T22:53:00.000-08:00

Franchising World, April 2007

If the culture fits both parties, and if both parties are committed to a common goal, the relationship will be good and success begins.

By Harvey H. H. Homsey

What makes a relationship between two parties good? What makes a marriage last for 50 years or “until death do you part?” While the answer might be philosophical or studied for years, it boils down to two words: culture and commitment. The culture has to fit both parties, and both parties have to be committed to common goals. In fact, both parties must accept their role in the relationship. Especially in the relationship between franchise system and franchisee, both have to want it. Making the franchise relationship a good one requires the right culture, the commitment of the franchise company, and the commitment of the franchisee, with the ability to tweak the commitment from time to time.

Establish the Foundation of Culture
Does society shape a culture or does culture shape a society? If an entire franchise organization, franchisor and franchisees, can be called one society, who is responsible for creating and maintaining the culture? Beliefs, values, ethics and purpose must all be aligned for a perfect match between the franchise system and franchisees. In fact, the culture of the entire organization is made up of this matched combination. It is truly a combined responsibility. The franchise company must create the culture that provides a fair place to conduct business and communicate business matters. Additionally, the franchise organization should nurture it through all avenues and means possible. It’s not enough to say, “We have a culture.” It is a must to live it.

When prospective franchisees look at a potential franchise company, truly it’s not the brand, product or sales model that they are being sold on or even reviewing up front; it’s the franchise system’s culture, the feeling and the people that make up the company. If the right culture is in place, fitting both the franchise company and the prospective franchisee, then a match is made. If the culture remains true to its beliefs, values, ethics and purpose, then a long-term relationship is developed. Once the culture is set, the franchise company can begin to develop the brand, which in essence represents and fosters the franchise company’s core culture.

Franchisor Commitment to Building the Brand
A franchise system provides three simple yet sophisticated and complete products: a brand, a system and support of that system. Commitment to these three products is paramount to the success of the franchise company and the franchisee alike.

The franchise company’s first responsibility is to the protection of the brand on behalf of the franchisee. The company name, the company reputation, is the brand, the pure essence of what the franchisee is selling in his local market. While a cliché, it’s true: we only have one chance to make a first impression. A company brand generates the first impression of prospects, clients and the community at large.

Franchisor Commitment to Create and Innovate a System
A proven franchise system to follow and sell is needed to bring the brand to life. Franchise companies provide systems, a way for franchisees to do business. Franchise companies provide the training, the “how-to” and “how not to” of running the business. It’s the system that gives the franchisee the time to spend a working day selling and supporting instead of recreating business models. Franchise firms that create, maintain and even control their systems for franchisees find more successful owners who are reaping the benefits. When prospective franchisees are researching a prospective franchise system and ask current franchise owners what makes them successful, it’s that simple answer, “I follow the system” that strengthens the reason to buy a franchise.

Franchisor Commitment to Continually Support the System
Support of the franchise system can be offered at various levels. Some franchise organizations support the entire system, including materials, training and ongoing support. Others offer advice and guidance. Either level works provided the franchisee knows up front what to expect. Whatever the level of support, the franchise system must be committed to support. For example, simple things such as returning phone calls are a must. Having knowledgeable people available to answer any type of call can also be essential. Just listening to the franchisee and providing guidance in the following ways allows the franchise company to provide even more support such as:

• Talking to the franchisee on a weekly basis,
• Sharing experiences from other franchisees to help make their business successful, and
• Being willing and available to listen to challenges.

Working with the franchisee to set goals, create plans and develop business strategies is one level of support. Assisting the franchisee with challenging situations and providing advice on particular situations is another level.

Holding meetings, providing continual communication and getting feedback from franchisees are some of the best and most effective ways to provide support. Successful franchise companies plan weekly, monthly or quarterly meetings with franchisees to ensure all relevant information is communicated. Above all, encouraging franchisees to use the support and counsel of the franchise firm’s staff can prove to be the most beneficial support.

Franchisee Commitment–The Other Half of the Equation
The franchise system is only responsible for part of the culture and commitment in a good franchise relationship. Not only are franchisees the other half of the equation, but the vital half. It’s their business; it’s their life on the line; it’s they who have risked it all to succeed or not as the franchise owners. The opportunity and benefits that come with owning one’s own business are also balanced with challenges and risks. Their first commitment has to be to themselves. It’s their money; it’s how they feed their children.

The franchisee has bought or been awarded a franchise–the opportunity to conduct a certain type of business in a specific manner within a given territory. There is no reason for the franchisee to reinvent the wheel, but instead just follow the system. The second part of the commitment then must be to protecting and following the system the franchise has purchased. Franchisees sell and service the product, based on the guidelines from the franchise system. Franchisees have the best of both worlds–local ownership with corporate support and backing. In addition to their commitment to themselves and the franchise system, franchisees have to be committed to each other. If a brand is to be protected, all franchisees must be in agreement that they will protect each other, a true commitment to the culture.

Tweak as Needed
Times change; systems change. Cultures must remain. Just because something worked one way 20 or so years ago doesn’t mean it will work today or for that matter tomorrow. Franchise companies have to not only be committed to the brand, proven system and support, but to maintaining and updating the company as a whole.

Laws change. Generations change. Updates to the system should follow suit. To remain current with the ever-changing world, the franchise system and franchisees must be committed to tweaking as needed. What must remain is the culture the franchise company has created for franchisees.

Culture and commitment are what make any relationship between two parties good. And in the franchisor-franchisee relationship, culture and commitment are the basic ingredients for success. Success then is not the end, but the beginning of the relationship. The culture has to be fair and agreeable to both parties. The franchise firm and franchisees must be committed to each other, their respective responsibilities, and a common goal. If the culture fits both parties, and if both parties are committed to a common goal, the relationship will be good and success begins.

Harvey H. H. Homsey is vice president – franchise systems of Express Services, Inc., the franchisor for Express Personnel Services. He can be reached at harvey.homsey@ExpressPersonnel.com.

Ensuring Good Franchise Relations

2007-12-31T22:52:00.000-08:00

June 2007 Franchising World

Ensuring that the relationship between franchisee and franchisor remains positive is always important. Many different aspects of how this relationship can be maintained have been discussed under the topic of franchise relations. One important topic not often addressed is ensuring a positive franchise relationship through insurance.

By Janice M. Dwyer, CFE

So often today, when a franchisee is sued for any reason, the franchise parent is also named as a defendant in the lawsuit. Some argue that the plaintiffs are going after the “big money” of the franchise system, while others suggest that the plaintiffs neither appreciate nor understand the relationship between a franchise brand and franchisee. Whatever the reasons, both franchise company and franchisee alike must pay attention to how their insurance policies are designed to protect their interests in the event of lawsuits.

If a franchise organization had to defend each claim made against it for a franchisee’s actions and operations, it would be left with significantly less resources to maintain and grow the system. This is why franchise agreements frequently contain a “hold harmless” indemnification provision, which requires that the franchise system hold harmless and indemnify the franchise company for, among other things, acts, errors, omissions or negligence arising out of the franchisee’s operations.

In addition, a franchisee often agrees, according to the terms of the franchise agreement, to include its franchise company on its commercial general liability insurance as an additional-insured. This additional-insured coverage provides the protection a franchisee needs to support its indemnity agreements. If a franchisee fails to have adequate insurance coverage, it could be held responsible to indemnify the franchise company out-of-pocket.

Additional-Insured Status
This is why the additional-insured status for franchise companies on franchisees’ insurance policies can be crucial in the franchising relationship. The cost for a franchisee to include the franchise system as an additional-insured on its insurance policies is minimal or can often be at no additional cost. However, the cost to the relationship, if the additional-insured status is incorrectly done or not done at all, can be significant.

Regrettably, all too often, requests for additional-insured status are handled or processed routinely by many insurance representatives. The requests need to be given priority and proper attention due to their importance to the franchising relationship. However, many agents fail to understand what the additional-insured status means in the franchise relationship, as well as the reason behind the coverage request itself. This lack of attention and failure to understand can result in a serious misapplication of coverage, or worse, no coverage at all.

Likewise, many franchise organizations routinely treat this additional-insured insurance status process as just another administrative function. As easy as it may appear at first glance, mistakes are all too common. It is not enough for a franchise company to accept a certificate of insurance from its franchisee showing that the system as a certificate holder is also an additional-insured on the franchisee’s policy. A review of coverage granted by the additional-insured endorsement itself must be conducted.

Review of Coverage
When reviewing certificates of insurance in most cases, policy numbers, insurance carrier, and policy period are listed, but these do not guarantee that the franchise company has the coverage it wishes or requires. So, a franchise system must insist at a minimum that a copy of the additional-insured endorsement itself be included, so that the terms and conditions of the actual additional-insured endorsement may be reviewed. Where a franchise firm looks to rely primarily for its insurance protection as granted by an additional-insured endorsement on a franchisee’s policy, the company must make the attachment of the complete insurance policy for its review a requirement.

In addition, it is important to remember that the terms and conditions of a certificate of insurance may contradict the terms and conditions, or the intent of the insurance policy itself. The terms of the policy will almost always prevail over those on a certificate. The terms of the certificate usually clearly indicate that the certificate is not an insurance policy, and that any coverage granted is done so only through the policy itself, which includes the additional-insured endorsement.

Further, even where proper review and compliance actions occur, the franchise relationship will be compromised if a franchisee cancels the insurance policy or the policy is cancelled for nonpayment of premium. According to the cancellation provisions of the policy, notice is sent to the franchisee as the “first named insured on the policy,“ not to an additional-insured. Cancellation notice for an additional-insured is not guaranteed. So, a franchise company as additional-insured needs some mechanism beyond a certificate of insurance to assure that actual coverage exists when it is needed. Often franchise systems pay particular attention to those franchisees that are late in making royalty payments. This may be an indication that they have let their insurance coverage lapse.

Ensuring Consisted Coverage
What should franchise organizations and franchisees alike be looking for to make sure that insurance coverage is consistent with the requirements of most franchise agreement indemnification clauses?

Request the additional-insured Grantor of Franchise Form CG2029 or an insurer’s comparable form. Coverage under this form provides protection for a franchise system with respect to its liability as grantor of a franchise to the named insured (franchisee). This form is simple, it has no additional exclusions or conditions, and it does not attempt to define in what manner a franchise company is held liable for coverage considerations.

What coverage is often provided a franchise system? It is Form CG2010 or an insurer’s comparable form, additional-insured-owners, lessees or contractors- scheduled person or organization. This is the catch-all additional-insured form most often used to comply with additional-insured requests for coverage.

This form is not only inappropriate, but also the major disadvantage is that it is limited to ongoing operations only. Unfortunately, lawsuits are not so limiting. For example, this means that coverage for a franchise company ends when a franchisee-plumber finishes a job, or a diner finishes eating and leaves a franchised restaurant, or a customer drives his auto away after repairs are completed by a franchised auto repair. Unfortunately, lawsuits do not dovetail with this coverage. For example, a plumber often gets sued for pipes failing in the future, a restaurant diner often gets ill after he leaves the restaurant premises and a defect in an auto repair often becomes apparent after the vehicle leaves the repair shop.

To protect the franchise relationship, franchise companies and franchisees must be proactive. Both must instruct their respective insurance brokers or consultants not to accept insurance that is inconsistent with the indemnification provisions of the franchise agreement. Both must be vigilant in demanding the use of the additional-insured endorsement appropriate for the franchise relationship. The proper focus on the detail of this additional-insured matter results in the appropriate insurance protection benefits not only for the franchisee, but also for the franchisors. What better way is there to ensure positive franchise relations?

Other items of note
• If a franchisee fails to add the franchise company as an additional-insured properly, the franchisee’s policy does not protect the franchisee for this failure.
• Medical payments coverage on a franchisee’s policy will not apply to franchise organization as additional-insureds.
• All exclusions on the policy that apply to the franchisee will apply to the franchise system.
• The named insured on a franchisee’s policy should be the same entity who signed the franchise agreement. Did your franchise sign as an individual, and then formed a corporation or an LLC later?
• Defense coverage provided to a franchise system on a franchisee’s policy may require separate defense counsel and strategy due to separate strategy. Know your rights.
• Ask that additional-insured status be primary and non-contributory.
• A franchise company’s umbrella policy is usually primary coverage over a franchisee’s umbrella policy, unless otherwise indicated.
• Make sure the additional-insured form lists all parties to be indemnified including employees, officers and directors of a franchise organization.

Janice M. Dwyer, CFE, is president of the Affinity Group Division of the law firm Luce, Smith & Scott Inc. She can be reached at 800-642-8338.

Helping Franchisees Adapt When A System is Being Acquired

2007-12-31T22:47:00.000-08:00

July 2007 Franchising World

The best way to help franchisees adapt to an acquisition is going to be through strong, effective and consistent communications.

By Jack Pearce, CFE

The effective management of an acquisition event in the franchising industry demands intense preparation and cautious execution to overcome an emotional shake-up which can accompany this kind of organizational growth. When word gets out there is an acquisition in the wind, there is a measurable impact on all parties involved, but most acutely on the attitudes, feelings and performance of the franchisees being acquired.

The fact is most of this change or shift in attitudes, although unavoidable, is almost always negative. Usually people in both companies, but particularly in the one being acquired, must go through a major adjustment process. They have to adapt to a variety of new organizational realities, not the least of which is the change in relationship between their former franchisor and their new one. All of these changes may be for the better or for the worse, but the bottom line is they must be carefully managed to achieve a positive outcome for all parties.

For these reasons, the acquiring company must first develop and execute a well-planned transition strategy; must learn to understand its new franchisees’ primary issues and concerns; must try to diagnose and deal with any resistance issues; and finally, must work hard toward building long-term relationships with its new franchisee partners. Throughout all these activities the acquiring company’s management team and franchise support staff must maintain an intense focus on highly-effective communications to make the transaction succeed.

Here are five basic steps for helping franchisees adapt when a system is being acquired:

Step One: Develop and Execute a Well Planned Strategy
A well-planned and efficiently-executed strategy for managing the acquired franchisee’s emotions, expectations and operational needs is the key to success in a franchise environment acquisition. Even with all the inherent complications of mixing human nature with the intensely stressful and difficult process of an acquisition, there are still tremendous benefits to be realized by all parties involved. These benefits are the most powerful tool in the transition process, so the communication of a clear and concise plan to deliver new services, enhanced support, additional assets and any other benefits resulting from the acquisition become most critical.

The first benefit to communicate should be at the heart of the entire acquisition process, that is the answer to the question: “Why did these companies merge or why is one acquiring the other?” The answer to this question is found among the basic reasons companies typically buy or merge. Those reasons and a brief description are as follows:

• Faster growth–accelerating the number of franchise units beyond what simple sales and development can accomplish.

• Vertical integration– stability of supplies, controlled outlet for products, eliminate middle agent and developing economies-of-scale.

• Horizontal integration–broadening the range of services that may be delivered to similar or existing customers across multiple concepts.

• Acquisition of intangibles and personnel–intangibles like technology, a marketing network, contracts or other resources–difficult to duplicate on your own. People who have knowledge, training and experience the acquirer needs.

• Changes in industries–entry into a totally new industry with strong market potential.

• Portfolio investment–diversifying the number and types of companies within an existing investor group portfolio.

• Marketability of stock–enhancing the market value of existing stock.

Considering each of these possible reasons for entering into an acquisition, the first four seem to be most typical within the franchising community. It is critical for the acquiring company to articulate and to include in its communication strategy a dialog on just how one or more of these objectives will deliver specific and tangible value to their newly-acquired franchisee constituents on an individual level.

In general, acquisition strategies and procedures may vary from being an isolated event, to being a regular part of the business. In the franchising industry, most acquisitions seem to be more isolated events seeking to accomplish very specific market strategies or synergies. Because these events are not all that common, franchise support personnel are not always fully-trained or experienced at the acquisition process.

The following suggestions may provide support personnel with the necessary orientation and tools they need to get the job done:

• All personnel involved in support of acquired franchisees should be provided training in communication tactics, effective listening, dispute resolution and other “people management” skills.

• Bulletins or announcements used to articulate the top-level strategies and benefits of the acquisition should be professionally-written and produced.

• Frequent meetings and discussions should be conducted for all personnel to be fully-informed and capable of explaining pertinent facts, benefits and strategies.

Step Two: Learn and Understand the New Franchisee’s Primary Issues and Concerns
In general, franchisees often resist change simply because one of the conventional ideas behind purchasing a franchise is for the comfort of a stable, proven and well-defined business model. Changes they fear or changes that are not of their own making ordinarily could elicit a great deal of resistance. This is a key point, because most franchisees whose parent company is being acquired will have had no part in that decision. Not only do they have no say in the matter, they often are taken by surprise.

Franchisees jolted by the news that their corporate parent is being acquired must now report to an entirely new authority. This may create a feeling of having no personal ownership of the decision and thus, their commitment to support the idea may be very weak. There is a heightened state of uncertainty that instantly pervades the entire network of franchisees and will cause rumors and negative communications to begin flowing. This could lead to using intranets, blogs and e-mails with speculation on the pros and cons of nearly every element involved in the acquisition.

The acquiring franchise organization must recognize these attitudes and behaviors and be prepared to deal with them swiftly, pro-actively and with a sound transition strategy. The newly-acquired franchisees need to feel their concerns and fears are not only being immediately addressed, but must also feel their best interests are truly at the heart of the acquisition strategy.

Here are a few suggestions for learning and understanding the issues and concerns of franchisees affected by the acquisition:

• Appoint a franchise advisory council or a small group of “top-performers” to lead a task force or committee specifically charged with examining the acquisition.

• Engage the target franchisees in broad discussions about acquisition strategies designed to achieve specific objectives.

• Provide case study information to franchisees illustrating the benefits and successes of other organizations attempting similar strategies.

• As confidentiality restrictions will allow, inform franchisees of the strengths and benefits of both the acquisition strategy, as well as the resulting company structure.

• Most importantly, listen carefully to the feedback and comments coming from the franchisees in all their discussions, committees, e-mails and other forums.

Step Three: Overcome Deliberate and Unconscious Resistance
As hard as the acquiring franchisor might try to provide renewed levels of communication, participation and assurance, the acquisition and the potential changes it brings are still going to be resisted. Some franchisees will be very outspoken and overt in expressing their dismay. They may choose to be very open in expressing their shock, anger, and frustration, and in many cases will not be able to hide their feelings even if they tried.

In the case of overt resistance, it is very important to calmly and resolutely address franchisees’ concerns without attempting to refute, degrade, diminish or belittle them. Explanations or superfluous reasoning will not normally win over emotional comments. In the absence of any current or immediate results, there truly are no right or wrong answers to many of these resistance questions and concerns.

On the other hand, the unconscious resistance may be much more subtle, but no less damaging and often even more widespread. It is more passive in nature and is manifested most visibly in operating performance. Some may even insist they are cooperative and support the newly-formed organization, but the facts could not bear that out. The unconscious resistance will manifest itself in lowered morale, lower productivity, loss of competitive advantage, disappointing profits and most critical for the acquiring company, a deterioration in royalties.

Even when franchisees in the acquired organization make a concerted effort to adjust and embrace the merger, it can still result in decreasing performance. Much franchisee behavior that is well-intentioned and even self-sacrificing may run counter to what is best for the organization as a whole. For example, those “top-performer” franchisees who were asked to participate in strategic discussions may now be bogged down in endless e-mails and inquiries from other franchisees looking for advice or direction.

Here are a few suggestions for the support team to overcome resistance issues:

• Monitor all forms of company communications and ensure that franchisees are not being unduly burdened with the task of implementing, explaining or promoting the benefits of the acquisition.

• Openly address all negative issues and concerns the franchisees may express–be willing to “live with our differences.”

• Actively listen to franchisee anger or venting concerns, but do not attempt to argue over right and wrong answers.

• Ensure that all new assets, products, services or any other benefits of the acquisition are swiftly and efficiently distributed to all franchisees.

• Budget sufficient labor and working capital to ensure there is an increase in the availability of support services just before, during and after the acquisition.

Step Four: Build Long-Term Relationships
As support personnel begin to consider the communication challenges they must face, they are confronted by the fact the most important part of the acquisition occurs after it is concluded, answering the question, “Does it work for both sides?” For this reason, the parties to the transaction should avoid thinking of the event in terms of coming to a close, but instead think of it as the beginning of a long-term relationship.

The various aspects of the acquisition agreement should be geared toward the ongoing development of the long-term relationship. For example, employment agreements with support personnel should not be simply geared toward immediate negotiating positions, but instead should be designed to encourage and motivate the employee to participate and achieve higher levels of performance anticipated through the combination of both company’s assets.

Here are a few suggestions for building long-term relationships:

• Implement support staff incentives specifically designed around performance improvements in newly- acquired franchised locations.

• Offer performance incentives to the newly-acquired franchisees including both short-term benefits (fee rebates), as well as long-term goals (reduced fee rates).

• Immediately integrate newly-acquired franchisees into various committee or council structures, such as the franchise advisory council and advertising fund councils.

Step Five: Maintain an Intense Focus on Effective Communications
As is common with all situations involving franchise relations, effective communication is the key element for success. Given the tumultuous nature of an acquisition event, effective communications are going to be at the heart of both the franchisees’ and the franchisor’s ability to adapt and make the necessary adjustments for a smooth and successful transition.

Although there is inherently an adversarial relationship involved in the acquisition process, all parties must attempt to minimize this factor in order to overcome the unique issue of having a franchisee constituency involved in the process. There is an intense need for cooperation between both companies with an interest toward achieving a long-term outcome of mutual benefits. Because of the extensive due-diligence process, the length of time involved and the need for both parties to fully understand every element of each other’s business, there is a tremendous premium placed on open, honest and clear communications.

From the franchisee’s perspective it will be critical to communicate how the combination of company assets creates greater value for their franchise investment over the long term. There may also be very immediate needs to address in the short term, such as offering new support services, marketing programs, collateral materials or other synergies not previously available to the franchisee from his former parent company or support team. The communication strategy must focus on quickly and efficiently getting this information into the franchisee’s hands and simultaneously providing access to the new benefits.

Cooperation from all parties is the cornerstone in achieving a smooth transition and successful initial operation of the acquired business, but effective communications will be its ultimate foundation. In the end, the best way to help franchisees adapt to an acquisition is going to be through strong, effective and consistent communications.

Jack Pearce, CFE, was formerly a chief operations and financial officer of a 200-unit national franchise organization, serves on two national IFA committees, Franchise Relations and Information Technology. He can be reached at jpearce54@comcast.net.

Building and Repairing Trust Of the Franchisee-Franchisor Relationship

2007-12-31T22:45:00.000-08:00

August 2007 Franchising World

Key steps to ensuring a profitable relationship.
By David Holmes

Most professionals in franchising would agree that trust is a vital element in a successful relationship between a franchise system and its franchisees, whether on an individual level or between the franchisor and its franchisees as a whole. But past this general observation, so common that it’s almost a cliché, some more difficult questions lie waiting:

How is franchising different from any other form of doing business, so far as trust is concerned? How does trust provide direct business benefits or is it merely a “feel-good” aspect of the business relationship that fails to deliver real economic benefits? If trust is important, how can it be established, nurtured and, if needed, repaired? What are the respective roles of the franchisor and the franchisees in building trust?

How is franchising different?
On one level, almost all business relationships require trust. When the first two cavemen advanced toward each other with the idea of exchanging a freshly killed antelope for a fine-looking basket, each one had to trust that the other would not simply hit him over the head with a club and take what he desired, at least if they wanted to have any future dealings. So trust is hardly new in business relationships, not just in franchising, and is probably necessary in all voluntary economic exchanges. So, some observers might conclude that franchising is no different in this regard that any other business relationship.

And, some might argue that where a business relationship is highly legalistic, such as in franchising, with its 60-page franchise agreements and extensive federal and state laws regulating franchising, trust is less significant than in less formal relationships.
But they would be seriously wrong, for a number of reasons.

First, franchise relationships are generally structured to extend over a long period of time, with 10 years being typical and up to 20 or more years not being unusual. In any relationship, more (and more significant) issues will develop as the relationship extends over time and a “bank account” of trust that has been established will allow the participants in the relationship to successfully navigate those issues, while maintaining the relationship.

Second, the franchise relationship is inherently founded on some degree of independence on the part of the franchisee. After all, the franchisee owns his or her franchised business and understandably has an emotional, as well as economic, attachment to that ownership.

Therefore, both legally and as a practical matter, the franchisor cannot adopt a purely “top-down” management model for requiring the franchisee to follow the franchisor’s wishes or resort to “firing” the franchisee for anything other than a breach of the agreement. A relationship based on trust allows mutual accommodation and a highly-useful alternative to a legalistic approach to strategic planning and day-to-day management.

Third, while a top-down management model or resorting to a legalistic approach may sometimes work or be needed in franchising, using either on a daily basis is generally unsuccessful, highly expensive (both economically and in terms of management time and other resources) or both. Trust builds cooperation and avoids the need for more costly alternatives.

Fourth, franchising, by its very nature, involves the owner of a brand (the franchisor) allowing someone else (the franchisee) to use the brand, and includes the potential for that person possibly misusing the brand and thereby generating negative brand equity, impacting both the franchisor and other franchisees. Similarly, the potential exists for the franchisor to fail to adequately protect and enhance that brand equity, adversely affecting each of the franchisees who have made an investment in it, an investment which may, collectively, exceed that of the franchise system.

So, the relationship necessarily includes the potential for each party to seriously and negatively affect the other’s investment, over an extended period of time. Understanding that, it’s obvious that enhanced trust will make the mutual protection and growth in that brand equity far easier to achieve.

Fifth, we know from sports that teams can generally achieve more than single players, and that unified teams with a common goal, and working together, achieve more than teams without those qualities. The same is true in business, and particularly in franchising, and few things build unity in pursuit of a common goal more than a solid foundation of trust.

Since the business world is largely a competitive one, “teams” that are unified and trust one another are simply more likely to succeed in that competitive environment. This reason alone provides a hard-headed business reason for building and maintaining trust.

How can the franchisor enhance trust?
If trust in franchising is a good thing, how can it be enhanced? A number of steps are practical and include the following:

• Nothing builds trust more than actions; anything else is simply words. Therefore, make it clear that the long-term objective of the system is the financial and personal success of all participants. Then follow through with actions that demonstrate that commitment. As actions are accomplished, communicate to franchisees that the franchise system has diligently fulfilled its commitments, moral as well as legal. It’s okay to remind people that you’ve kept your promises.
• Under-promise and over-deliver, and never fail to deliver on a promise made without an awfully good explanation.
• Ruthlessly correct any signs of an “us vs. them” attitude developing among franchisor staff (whether in the field or at headquarters) toward franchisees. There is probably nothing more destructive of trust in a franchise relationship. If the franchisor’s staff cannot manage the franchise relationship with emotional intelligence and maturity, they need to be re-trained, reassigned or moved out of the organization.
• Proactively create a culture in which franchisees and all franchise-system staff personnel feel free to bring concerns regarding the “health” of the franchisee network directly and/or privately to any member of the management team, including the CEO.
• None of this means that the unhappy franchisee or franchisees are always right; often they’re not. What it does mean is that a system-wide culture is created that:
–– Listens to complaints;
–– Identifies which ones are of legitimate concern;
–– Communicates with all franchisees (including those who may not have valid complaints or who suggest inappropriate actions); and
–– Takes appropriate action with respect to legitimate concerns, without ever actually, or being perceived as, “punishing the messenger.”
• If not already in place, establish and fund a franchisee advisory council, and listen closely to it, without surrendering ultimate control of the brand.
• Make sure that top- and mid-level management is effectively listening to franchisees, without “filtration” by personnel who do not understand the importance of good franchise relations, and without the “noise” created by franchisee advocates with personal agendas. Here’s where a franchisee advisory council, either elected or appointed, is particularly useful.
• As a practical matter, trust is allied with good communication and few things do that better than CEOs and divisional VPs getting out from behind their desks and into the field, and into franchisee’s stores.

How can the franchisee enhance trust?
If trust is a two-way street, then either party in a relationship can build or destroy it.

While the franchisor may need to take the lead in establishing and maintaining trust, it’s clear that the franchisee has an important role to play too, so let’s look at some of the things that franchisees, individually or in concert with his or her fellow franchisees, can do to build trust.

First of all, the franchisee needs to perform the two core tasks that a franchisor expects from a franchisee; paying his or her bills and following the system.

In essence, that’s the bare minimum that any franchisor expects from a franchisee, as well as what’s expected by fellow franchisees who are “playing the game by the rules.” If the franchisee fails to do either of those two things, then not only may there be legal or other repercussions, the franchisee will have seriously damaged any trust relationship that’s being built and should not expect to be trusted in return.

Second, the franchisee needs to demonstrate that he/she has a broader view of their eventual success than short-term benefits for their particular unit. For example, will a system-wide unit upgrade cost the franchisee money? Absolutely. Are there any guarantees that the investment involved will generate a reasonable return? No. If the system fails to maintain a competitive edge through upgrades, along with a unified retail presentation to customers and common marketing programs, will the investment of all participants in the system be damaged? Very likely. So, participation in those common programs will seriously build trust from the franchisor.

What can the franchisor do to re-establish trust, if it’s been lost?
Admit any mistakes, including any failure to successfully communicate with franchisees. Few things rebuild credibility faster than sincerely admitting where one has gone wrong in the past, and then demonstrating that those particular mistakes are not repeated and that a sincere effort is made to fix any problems that resulted from those mistakes.

Then go out and implement the steps discussed above.

David Holmes is a partner at Holmes & Lofstrom, LLP. He can be reached at d.holmes@holmeslofstrom.com or 805-547-0697.

From Franchising for Dummies® 2nd Edition 2

2007-12-31T22:43:00.000-08:00

How This Book Is Organized

Franchising For Dummies, 2nd Edition, is organized into seven parts, each covering a major aspect of franchising as well as the standard For Dummies Part of Tens and a couple of appendixes with some extra information. The chapters in each part cover specific information in detail. You can read each chapter (and even each section) independently, which is useful if you have other things to do at the moment. In each chapter, we note other areas of the book that explore in greater detail some of the information you see.

You can also sit back and read this book from cover to cover. We hope that you do, because it’s designed to give you information in a logical progression. Here’s a summary of what you can find in each part.

Part I: Franchising Basics: Separating the Myths from the Facts

Part I gives you an overview of franchising and insight into the relationship between franchisors and franchisees. It tells you about the types of opportunities available within franchising and helps you determine whether you’re cut out to be a franchisee.

Part II: So You Want to Be a Franchisee?

Part II gets you thinking introspectively; it provides sources of information about franchise opportunities to guide your way as well as a process (and corresponding checklists and forms on the CD-ROM for deciding which franchise to get into).

Finding the money to become a franchisee is also important, so we help you determine how much you can afford to invest and where you can get the money. For prospective franchisees, this section is important because it helps you decide whether becoming a franchisee is in your best interests and shows you how to choose which franchise may be right for you.

Before you sign on the dotted line, though, you’d better understand what you’re signing! Part II explains the Uniform Franchise Offering Circular (UFOC), the disclosure document provided to franchisees in the United States. It also talks about how to evaluate a franchise agreement, what you can negotiate with a franchisor, and how to find pros who can help you through the process. Although franchising is a method of business expansion, a significant body of law also surrounds it. This part helps you navigate the legal process of investing in a franchise, so even if you’re not one of the pros, you can look like you are.

Part III: Operating Your Franchise like a Well-Oiled Machine

Part III starts you down the path of establishing and operating your business. It begins by looking at what you likely need first — the location from which your fortunes will be made — followed by the two other most important parts of running your business — your labor and the ingredients and supplies you need.

Every franchise system has a different personality. By that, we mean that they offer different services to their franchisees and provide them with different types and levels of support. Even the way that you, the franchisee, and the other franchisees work together will differ. Part III walks you through some of the most important elements of the franchise relationship and the types of support you are likely to receive. These include training and other support services; assistance in finding and developing your location; how and where you get your inventory and supplies; marketing to your customers; merchandising your location; and hiring, firing, and training your employees. Part III also gives you a glimpse of how you can interact with your franchisor and fellow franchisees. This part begins your process of understanding the difference between a great franchisor and those that may not be ready for prime time.

Part IV: Times Change: Deciding What to Do Next

Part IV talks about the life cycle. The first three parts of the book give you information on selecting the right franchise. Now it’s time to talk about your growth options: investing in additional opportunities with the same franchise system and even investing in opportunities that other franchisors may have available. Many franchisees find that owning one franchise just isn’t enough. This part explains the opportunities and some of the pitfalls of multi-unit ownership, as well as a reality of business: At some point, the relationship is likely to end. We discuss how to prepare for this end and what to do when it happens.

Part V: On the Flip Side: Building Your Own Franchise

Ever wonder where big franchisors come from? They come from companies that have chosen to expand by offering franchises to other people. Part V examines what it takes to become a franchisor, whether your business has what it takes, how to develop a franchise system, how to set fees, and, most important, what not to do. This part also looks at how franchisors expand, both domestically and internationally; what it takes to support a growing franchise system; and some of the mistakes you can avoid.

Part VI: The Part of Tens

In a few short chapters, we give you insight into what we’ve learned in franchising — what we consider to be the keys to franchise success.

Part VII: Appendixes

The appendixes are where you find the definition of that word or two (or ten) that you may not quite understand. This part also welcomes you to the amazing world of bonus material located on the CD-ROM that helps you find the right franchise, establish that franchise in just the right place, and set up rules for your management team and staff. It’s also the place to look for information on what goes into a UFOC and why. We asked some of the leading legal and business experts in the world to help us bring to you an advanced education in franchising, so enjoy delving into the best from the best.

Nine of the Most Important Provisions to Look for

2007-12-31T22:36:00.000-08:00

J. Michael Dady, Attorney
Dady & Garner, PA

One of the most important things that you can do to protect yourself, when you are planning to invest the time, money and energy that come hand and hand with owning and operating a franchise, is to carefully review your franchise agreement before signing. There are, of course, many provisions that will impact your ability to successfully operate your franchise, and many others that will impact the kind of protection you will have in the event of a dispute with your franchisor. But, in my 29 years of experience as a lawyer for franchisees, I have found that there are nine particularly important provisions to look for.

1. A Good Definition of What You Will be Selling
First, make sure that the agreement contains a good definition of what it is you will be selling. You want assurances that you will be able to handle the entire array of products and services offered by the franchisor, as well as all new and improved variations thereof.

2. Protection Against Same-Brand Competition
You should also make sure that the agreement provides protection against same-brand competition. If you are going to be investing your life’s savings and making this franchise your life’s work, in building a demand for the products or services in your area, you should make sure that you will be able to reap the benefits of those efforts without having to compete with others selling the same brand of products or services in your area.

3. “Do the Job, Keep the Line” Duration
If you do a good job building demand for products or services in your trade area, then you should be able to continue to be the only representative of that product line or service in your trade area so long as you capably perform; and, if the franchisor should ever believe that you are not capably performing, then you should be entitled to be given notice of perceived deficiencies and a reasonable opportunity to address them. In short, a franchisor should not be able to terminate you as long as you capably perform.

4. An “Early Out” Provision
Most form franchise agreements do not contain an “early out” provision for franchisees. We have found that this right is something that, increasingly, is an interest to our franchisee clients as they face dramatic changes in their franchisor/franchisee relationships, with no way to get out of relationships which, although starting well, have turned very bad. In those situations, our clients are surprised to learn that, even though their franchise may be losing money, the franchisor will look to them to honor the commitment in the franchise agreement to pay royalties for the duration of the relationship.

5. Franchisor and Franchisee Obligations
The franchisor’s specified obligations should include, at the very least, an obligation to provide some support to you as the franchisee. If fees are charged, you should be receiving written assurance that you can expect to receive fair value for the fees paid. Likewise, you should expect a clear recitation in the agreement of your obligations as the franchisee. Additionally, if the franchisor reserves the right to make changes in the future in your performance obligations under the franchise agreement, those changes should be subject to a “reasonableness” covenant (and, ideally, should first be run through a franchisee board of advisors to confirm reasonableness before implementation).

6. Fair Compensation and Ability to Sell Related Products
The franchise agreement will spell out your financial obligations. You should make sure that these obligations will allow you to make a good living if you work hard and do a good job, disallowing the franchisor from terminating you or failing to renew your agreement unless they have good cause to do so and you have been afforded reasonable notice and an opportunity to cure any alleged deficiency in performance. Additionally, if your franchise agreement does not bind you to selling the products and services of the franchisor exclusively, you will want to make sure that you have the ability to sell complimentary products and services.

7. Fair Dispute Resolution Procedures
If a dispute should arise between you and the franchisor, swift and even-handed dispute resolution procedures are preferable. Franchise agreements that provide for arbitration are acceptable, provided that the arbitration is in an acceptable venue. Similarly, if the agreement contains a provision for payment of attorneys’ fees, this is acceptable, but only if it means that the prevailing party (and not just the franchisor) gets attorneys’ fees. You should also be wary of provisions that disclaim otherwise available statutory protection, or unduly limit your right to recover damages from the franchisor if it breaches its duties.

8. Right to Sell or Transfer/Right to Do Something Else
You should be able to sell or transfer the business without undue interference on the part of the franchisor. This includes insuring that, if you sell your business, you reserve the right to continue to make a living in that area, subject only to fair covenants against competition that the buyers of your business might reasonably require. Rights of first refusal by the franchisor are not preferred as they tend to depress values. Conversely, in this time of mergers among competitors, and leveraged buyouts, you should be wary of provisions that give the franchisor an unfettered right to assign its side of the contract.

9. Good Faith and Fair Dealing
Finally, look to get a written commitment from the franchisor that states what business people intuitively know, as follows: “The parties to this relationship agree to deal with each other honestly, fairly, in good faith, and in a non-discriminatory, commercially reasonable manner.” Who can be against that?

While it is the rare prospective franchisee, indeed, who can get all nine of these basis protections, well qualified prospective franchisees, working with capable franchisee counsel, can and do get many of these basic protections negotiated into their franchise agreements, even after being initially presented with unfavorable forms of franchise agreements at the initial sales presentation. Given the significance of the wording of the final franchise agreement to the future financial fortunes of franchisees, no prospective franchisee should sign a franchise agreement without first having it evaluated by experienced franchisee counsel, who would then likely work with the prospective franchisee to try and improve it by getting as many of these nine important provisions incorporated into the franchise agreement as possible.

Michael Dady is the founding partner of Dady & Garner, P.A. of Minneapolis, Minnesota and New York, New York. To learn more about Dady & Garner, P.A. or to reach Michael

Frequently Asked Questions About Franchise

2007-12-31T22:34:00.000-08:00

How do I know that I will be able to sell franchises?

You don't. Selling franchises requires a different set of skills and a business that meets the test of franchisability. While there are no guarantees, industry surveys have indicated that on average a new franchisor will sell between six and nine franchises in its first year of franchising. And some have grown much faster.

Can I avoid franchise laws?

There are some technicalities that you can use, depending on your situation. For example, FTC Rule 436 has an exception for companies who charge total fees of less than $500 in the first six months of operation. But if you have the three definitional elements of a franchise, it is generally best not to try, as fines in some instances have run in the millions of dollars. Moreover, in addition to the federal law governing franchise sales, 23 states have separate regulations on the subject.

What do the franchise laws require?

FTC Rule 436 requires that you provide prospective franchisees with a prescribed disclosure document at the first face to face meeting at which the franchise sale is discussed. State laws require that you register or file those documents with specific agencies.

What happens if I sell a franchise without developing the necessary documents?

The fines and penalties can be significant. The a franchisor can have significant liability under FTC Rule 436 not to mention actions by the state agencies.

What if I only want to sell one or two franchises? Do I still need to go through all the time and expense?

Depending on your situation, no. All you technically need are the appropriate legal documents and registrations (depending on your state). This may be accomplished for relatively little in the way of expense -- perhaps as little as $15,000.

City Kitchen

2007-12-31T22:32:00.000-08:00

Franchise Description

City Kitchen is a simple, quality of life business. Easy to run and operate. One of the few franchises that can develop in to semi-absentee ownership, with the potential for a franchise holder to commit as little as 8-20 hours per week per store. Easily expandable to multiple locations. City Kitchen has significantly lower start-costs. A higher gross per unit income. Lower royalty fees. Unmatched training and support. Great potential for expansion with greater territorial protection. Offered prime locations in upscale high traffic shopping areas.

City Kitchen Commissary and Express retail outlets operate from small retail areas in a retail strip center, corporate office center, mall or kiosk. Population minimum: two mile 50,000 residential population plus 25,000 daytime population Residential household income average: $75,000 Traffic minimum: 20,000 ADT with direct path to the site.

Franchise Training and Support

Local support and training for franchisees provided by an operations team with decades of franchise experience and success. Founded by the owners of the highly successful TACONE® restaurant franchise, with 100+ stores in development in 10 western states.

Investment Requirements

Franchise Fee: $30,000
Required Cash liquidity: $250,000 to $350,000
Total Investment Range: $250,000 to $350,000

Franchising for Dummies® 2nd Edition

2007-12-31T22:29:00.000-08:00

Franchising for Dummies was written by Michael Seid, Managing Director of MSA and the late Dave Thomas, founder of Wendy's International as a primer for prospective and current franchisors and franchisees. It does not replace the need for professional business and legal advisors but allows the reader to have a solid grounding into the world of franchising that will make them better decision makers, business managers and operators. It's your concise handbook to understanding franchising with two of the world's leading experts as your tour guides.

The first edition was one of the most successful books ever published on franchising. The reason it achieved such dominance as a reference guide for professionals in franchising and for those just starting their exploration of becoming franchisors and franchisees was summed up in a review by Franchise Update Magazine:

"Two of the leading experts in franchising have come together to write not only the definitive work on franchising but one that is witty, easy to read and cuts through the jargon found in the rest of franchise literature. Don't expect Franchising for Dummies to be a rah rah book in support of franchisors. It is often hard-hitting and opinionated. It challenges some common practices in franchising and provides a balanced view of the realities of the franchise relationship. Dave and Michael candidly reveal what makes some franchise systems great and why some franchisors should be avoided at all cost."

Franchising for Dummies carefully takes the reader through the legal issues surrounding franchising, helps the prospective franchisee understand how they should approach the selection of a franchise and also provides them guidance on operating their businesses and working within a franchise setting. For more mature or larger franchisees it deals with issues related to conflicts with the franchisor, terminations, expirations and acquiring additional or new franchise opportunities. For prospective and current franchisors it looks closely at how to become a franchisor and also how to manage the franchise relationship once you are a franchisor and how to expand their system domestically and internationally.

Scattered in-between its pages are growth strategies for franchisees, methods for hiring and training staff, finding locations and it even provide guidance on ending the franchise relationship. For franchisors it focuses in on what it takes to develop a franchise system from the feasibility of the concept to planning for the franchise system and creating the legal documents. It finishes with information on franchise system expansion in the United States and Internationally.

Franchising for Dummies 2nd edition is greatly expanded from the highly successful first edition. While the new book contains all of the same information from the first edition in an updated version, it adds considerably to the knowledge for franchisors and franchisees. The 2nd edition contains a vast CD Rom that also includes contributions from some of the most experienced franchise advisors in franchising. On the CD ROM you will find a workbook entitled Making the Franchise Decision which was written to help prospective franchisees work through the process of asking questions and gathering information from franchisors as they make their decision on which franchise to select. The CD Rom also contains a sample Employee Handbook, an analysis of franchise laws from around the world, an analysis of the construction of the Uniform Franchise Offering Circular, A Franchise Sales and Compliance Manual for franchisors, two Real Estate Workbooks - one for franchisees to assist them in finding the perfect location and the other for franchisors in managing the franchise system's real estate issues as well as other checklists and articles for franchisors and franchisees.

We are excited about the 2nd edition and as with the first edition, all proceeds from the book have been donated to the Dave Thomas Foundation for Adoption.

RAVE REVIEWS

"It is increasingly important that prospective investors know how to properly investigate franchising before taking the big step. Franchising for Dummies is a crucial guide for anyone who is seriously considering the path to small-business ownership. Michael and Dave's long experience and expertise in franchising makes them exceptional guides."
Matthew Shay
President, International Franchise Association

"Dave Thomas, the legendary founder of Wendy's and Michael Seid, one of the nation's leading franchise consultants, have written the ultimate franchise primer. Whether you are planning to become a franchisee or looking to start your own franchise system, don't go into franchising without it."
Lawrence "Doc" Cohen, CFE
Franchisee, Mrs. Fields Famous Brands
Chairman, International Franchise Association

"I have had the privilege of knowing Michael Seid for many many years and there is no human being on the planet with more knowledge about franchising than Michael. I have read his publications over and over again--and each time I learn something new that helps me grow my business. Anyone who makes their living in the "franchising world" is doing himself or herself a gross injustice by not making the time or effort to read this book."
Sidney Feltenstein, CFE
Chairman-Sagittarius Brands
Captain D's Seafood and Del Taco
Past Chairman - International Franchise Association

"Franchising for Dummies is the most important book prospective franchisees and those interested in becoming franchisors should read. "We routinely turn to MSA to perform critical assignments for our clients - including such industry leaders as Pizza Hut, 7-Eleven, Arby's and The Miss Universe Organization - and in this book you get what you need to know straight from the nation's leading consulting expert".
David Kaufmann
Senior Partner
Kaufmann, Feiner, Yamin, Gilden & Robbins
New York

"I have known and worked with Michael and his partner Kay Ainsley for many years. If you want to understand the world of franchising and have the knowledge and tools to make the right decisions along the way, Franchising for Dummies is a must read!"
Dick Rennick, CFE
CEO, American Leak Detection Holding Company
Past Chairman - International Franchise Association

"I have been involved in franchising both as a franchisee and a franchisor for more that 30 years. Franchising for Dummies hits all the critical points. The book is well written and presents the information that's needed to understand the incredible opportunities in franchising. Thanks for writing this book."
Mike Isakson, CFE
President, ServiceMaster Clean

At every Wing Zone Discovery Day, our prospective franchisees receive two disclosure documents. The first is the Uniform Franchise Offering Circular, as prescribed by law and the second is Franchising for Dummies. There is no easier way to translate legalese into layman's English, than placing these two documents side by side.
Stan Friedman, CFE
Executive Vice President, Wing Zone

"Michael brings insight and a wealth of practical experience to Franchising for Dummies. I have worked for many years with Michael and his expertise has made him the leading consultant in franchising and invariably our clients' first choice as an advisor."
Arthur L. Pressman
Co-Chair, Franchise and Distribution Practice Team
Nixon Peabody LLP, Boston, MA

"I have had the privilege of working with Michael Seid for many years in support of franchising at the International Franchise Association. Michael Seid and Dave Thomas has penned a must read for anyone interested in creating a successful franchise system or becoming a franchisee. Franchisees and franchisors alike owe a debt of gratitude to Michael and Dave for this fine work."
James H. "Jim" Amos Jr., CFE
Chairman Emeritus, MBE/UPS
Chairman of SONA MED Spa
Past Chairman - International Franchise Association

"Franchising for Dummies provides the "nuts and bolts" information you need to make a franchising decision. It's easy to read and contains a wealth of insight. I especially like the final section including Ten Keys to Franchise Success and Ten Questions to Ask Before You Buy a Franchise. I wish all my franchise candidates would read this book."
Scott R. Haner, CFE
VP, Franchise Recruiting
Yum! Brands, Inc.
Franchisor of Taco Bell, Pizza Hut, KFC, A&W and Long John Silver

"A must read for anyone with an interest in franchising. This book tells it the way it is from someone who knows it best"
Steve Siegel
Managing Partner, Brookside Consulting
Past Chairman - International Franchise Association

Local Business Coach, Bruce Krebs, Honored at National Franchise Conference

2007-12-31T22:25:00.000-08:00

FOR IMMEDIATE RELEASE

Contact:
Cynthia Lucenius-Schick
(908) 303-9099

Local Business Coach, Bruce Krebs, Honored at National Franchise Conference

Las Vegas, NV - 2/27/2007 - The International Franchise Association (IFA) honored Bruce Krebs of Chattanooga, a business coach from the Entrepreneur's Source, as one of its Franchisees of the Year this week. The ceremony took place at the IFA National Convention held in Las Vegas in front of over 2500 franchise executives.

"I'm honored and very excited about being selected as Franchisees of the Year," says Bruce Krebs, of TES. "As a business coach, helping people find the right business opportunity is very rewarding in itself, and now being acknowledged by the IFA for what I love doing is something very special," he added.

Mr. Krebs purchased his TES franchise five years ago after spending the first half of his career in Corporate America. Since his decision to manage is own career and purchase a TES franchise, Bruce has assisted on average over 50 people a year discover the benefits of business ownership.

"Chattanooga is such a great community, and I really enjoy working to help people and the local economy grow," says Krebs. "When I can help someone find a franchise that meets their lifestyle, goals and needs, I feel real good about it," he added.

Terry Powell, CEO and Founder of The Entrepreneur's Source, states, "Bruce is one of our top performers here at TES. He understand very well that the traditional job market no longer offers the security individuals and families need to live well," he added. "And helping people take control of their lives through becoming self-sufficient is now the new way to reach the America dream of living with long-term financial freedom."

Bruce's office is located in Four Squares Business Center, 1200 Mountain Creek Rd, Suite 230 in Chattanooga, TN. His phone number is (423) 875-5621.

About The Entrepreneur's Source
The Entrepreneur's Source (TES) is North America's leading career and business coaching company with more than 250 offices in the United States and Canada. TES offers a full-range of services to individuals seeking alternate career options and to small-to-medium size companies looking to increase performance. The goal of the Entrepreneur's Source is to partner with both individuals and companies to achieve their desired outcome.