Franchise Blog

Every time you turn on the news, log in on the computer or open the newspaper, a major company is laying off 5,000 plus employees. Franchising has always soared when jobs are lost and no new ones are created. The current economic situation surrounding us is the worst in the history of the United States. It is now impacting the “global economy”. When we are having tough economic times no one is spared in the global market.

So why are franchise companies stuck in neutral, during what should be a good market for new franchisees? One of the major reasons is the lack of lenders (funding). First of all, I believe the consolidation of the banking industry is nearing an end. This was and is a huge problem, and the primary reason our government is now getting into the act and looking at taking over some of this bad debt. If you are the US government can you afford to let the banking system collapse? The answer is “no”. They can and will regulate and create better guidelines. For those in the banking system that have weathered the storm, how long can you stay out of your primary business which is lending? If you are one of the few that is lending you have free choice over the risk factor.

We are already starting to see the private sector push some funds into the lending market. Where else can you find a safe haven for your money? If your funds are with a lender that has no financial issues and has solid lending practices it is a better bet than the stock market. I have personally seen two lending sources throw in towel and recently receive “new sources” for funding and come back to life. This is a good sign!

If you have an existing business that you feel can become a good franchise concept, get the ball rolling now. Put all your information together and position yourself during the present times so you can pull the trigger six to nine months out. Someone once said, it’s not always the idea, but the timing that matters the most.

Need help with your concept?

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One of the most intriguing franchise business opportunities currently has to be the educational tutoring franchises and schools. There are franchisor’s that offer math tutoring business franchise opportunities as well as reading and literature offerings. Indeed, there are quite a bit of different franchise opportunities to choose from, but one has to ask are they economically viable during the current financial crisis and recession.

There is some debate about their viability presently, a number of them have closed, and that is not a very good sign for current and future franchisees in this educational industry sub-sector. Still, there have been many success stories as well. When families are cutting costs they are apt to cut education costs if at all possible and if they can do so without jeopardizing their child’s academic future.

Some families refuse to cut-back on their children’s education and thus, there will always be customers. So, depending on the location and demographics these types of franchises are surviving and some even thriving. Now, I have talked to a number of franchisees that own these types of franchises and one that recently closed his doors.

The one that closed indicated that he could have stayed in business with a loan of only $50,000 but neither he nor his partner was able to come up with the money due to banks lending freezes. Other franchisees I’ve talked to with math tutoring franchised outlets said this year was not their best year, but it was one of their best. Both that I talked to said they planned on expanding their facilities and their enrollment in 2009 and 2010. Definitely something to consider.

“Lance Winslow” – Franchising Resource. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/.

Because there are so many options to look at when deciding on the right franchise opportunity for you, it helps to have someone else willing to sort through them for you, narrowing down the choices a little. Though the list could probably go on for quite some time, here are 10 of the best work-from-home franchises that we can find.

(#1) To start this list of great home business opportunities, it only seems fitting to choose a giant, and Molly Maid is just the mammoth success to go with. If you want to talk about brand recognition, it doesn’t get any more recognizable than Molly Maid. Rooted all over the country, this franchise business cleans client homes with a level of quality and professionalism that is beatable only by the quality and professionalism that the franchisor gives its franchisees.

(#2) If being paid to clean people’s homes isn’t your cup of tea, perhaps being paid to fix them is, and Mr. Handyman is just the name to do it under. Nationally recognized as an up-and-coming star in the industry, this franchise provides everything you need, from a rock solid business plan to ongoing support whenever problems arise, to build and sustain a profitable business utilizing the fix-it skills you already have.

(#3) It may sound a little goofy, but The Glove Lady is a force to be reckoned with. The chief of all glove and safety gear distributors, this work-at-home franchise sports an amazing opportunity for profit with very little overhead. Selling from the back of your own Glove Lady (or Glove Guy for the men) van, you will make far more profit from client purchases than what your competition will ever see.

(#4) Another monster of business success is Cruise Planners. The name is a mouthful, but the concept is not. In the massive travel market, cruises are by far the most profitable and least tapped corner of the industry, but this franchise is trying to change that. Franchisees learn how to make a strong income just by advertising the fun of travel cruising and helping people find the right cruise for them.

(#5) HomeTeam Inspection Service is an up-and-coming name with a new twist on an old business model that is making the difference for its clients. Unlike traditional home inspectors, who work solo when looking over a home for sale, HomeTeam Inspection Service franchisees and their employees work in small teams to most successfully go through their specialized 400-point inspection list. Now is the perfect time to get in on a business that’s only going up from here.

(#6) When it comes time to sell a home with a deck designed and built by Archadeck, however, there will be no need for inspection beyond the back door. Even if you currently don’t have a history in construction, the Archadeck franchisor is more than able to teach you everything you need to know about business and building. All you need is the heart to go for it.

(#7) Do you know how to make sales like a pro? So do the people at Sandler Training, who help employees at all levels of business, in all different industries, learn how to best sell their products and be as profitable as possible. If you’ve got a heart for motivating and a mind for sales, Sandler Training is for you.

(#8) One of the largest and most understaffed industries today is the medical industry, which means that business opportunities exist for both medical professionals and for the talented folks who can link those professionals with the facilities that need their services. This is right where Home Care Assistance franchisees excel. This franchise business is right on the cusp of one of the most needed, practical, and profitable businesses out there.

(#9) 1-800-GOT-JUNK? has quickly risen above the crowd as a franchise to watch in the future. Their motto is that everyone has junk, but not everyone has a truck and time to get rid of it. And they’re right: not only do private parties not have junk trucks, but there really are no competing businesses who have junk trucks; it’s an entirely untapped market. This franchise is for those who don’t mind rolling up their sleeves and don’t mind making piles of money for doing it.

(#10) For those who just can’t choose a franchise, the best business opportunity has got to be American Franchise Consultant Network. Instead of choosing a business to work in, help other people find the right business for them to work in. You’ll learn all there is to know about dozens of franchise opportunities and how to best connect aspiring franchisees with the business that is just right for them.

If none of these really suit your fancy, don’t worry. Deciding on ten to spotlight here was no easy task because the list of worthy home-based businesses is so long. Take some time to browse it yourself and you’re sure to find something right up your alley.

Find more small businesses for sale including mobile small businesses and cleaning and maintenance small businesses at Small Business Sale.

Opening a franchise can be quite the rewarding experience. You find a franchise that you are really interested in, you buy that franchise, and you then dream of turning it into something great. But it is important to keep in mind that the costs associated with opening a franchise don’t stop at the actual purchase price. There are other costs as well.

For example, you have rent, the rent deposit, and deposits on utilities. You also have legal and accounting fees to take into consideration. This can cost you up to $2,000 for the attorney to review your agreements. You may then have to pay $500 to $1000 to set up your LLC, corporation, or other legal entity.

You also have to factor in the cost of borrowing the money to buy the franchise, but it is great that you are able to borrow the money if you need it to make your dream come true. You also have to have insurance in place because you don’t want to buy this franchise and something occur that you lose everything. You want to be able to recover everything if disaster strikes.

But what is great is that anyone who can receive financing from a bank can buy a franchise. This creates jobs, makes your dream of being a business owner come true, and does a great service to your community in a lot of ways.

So what are you waiting for? You’re now aware of the fact that the costs are greater than the franchise cost itself, so that means no surprises that will take you for a loop.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

When you are opening a franchise for hamburgers, you have the ability to make a lot of money very quickly. All you need to do is to provide the site for the building and the money to purchase the franchise. After you structure is built you need to provide the workers. The rest is provided for you.

The décor will also be provided for you. You do not have to select anything. The chain owner will select everything; they will even have a code for you to follow. You will receive all of the food products with instructions that must be explicitly followed. Nothing is left up to you to decide, which means that all of the bugs have already been worked out. Opening a franchise means that the company already has a good reputation and all you have to do is manage the workers and let the money roll in.

The only way you can screw up your business when you are opening a franchise is to have health code violations, hire incompetent workers or not follow the prescribed instructions. Basically, if you hire a good manager, you have nothing to worry about.

When you are opening a franchise, you do not even have to work out the advertising because it is already prepared. You get all everything you need and it matches all of the other cookie cutter establishments. The pattern has been set and if you can keep up with the health codes and keep your workers in line, you will have it made. Before you know it, you will be rich and thinking of opening another franchise.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

There are literally millions of people out there each year who dream of opening their own business. However, while a few of them will go on to become successful entrepreneurs, many more of them will fail. Their businesses will sink like stones and they will likely lose any and all investments they put into their business. Taking your own idea from scratch, and trying to build it into a successful business can not only be frustrating, but it can also be near impossible. So how can people who want to become business owners find a way to be successful? Many of them choose to open a franchise.

So why are franchises so popular? It’s simple. The business plan is already there, and it is one that has already been proven to be successful. The parent company holds your hand the entire way. They provide the plan, the materials, and the knowledge to succeed. All you have to do is pay for the franchising rights. This is usually in the thousands, and your local bank could assist you with a loan to purchase the franchise rights. There are also small business grants that are set aside specifically for franchises.

If you open a franchise, you are much more likely to succeed. Franchises are especially good for those people who can successfully operate and manage a business and it’s employees, but lacks the imagination to form their own idea for a business and put it into action. So if you are looking to run a business that is essentially set up for you, a franchise may be just the thing for you!

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

When opening a franchise, there are a lot of decisions that have to be made. First, you have to decide which franchise you’re going to get involved in. If you decide that the food industry is the one to get involved in, then you have to decide which one. So how do you make that decision?

Well, look to see how many are in your area. If you’re dealing with a lot of the same in the area, then you want to stay away from that one. Try to go for something that isn’t around anywhere in your area, but that you feel will do well. But it isn’t always about the way you feel.

You can actually do a survey amongst the citizens in your area and see what they think of your particular idea. If it goes over well, then you know that you have made the right choice. If not, then you know you need to try something else.

You have to make sure you choose the right business because you don’t want one that is going to falter as soon as you open the door. Then again, there are some that do really well when the door opens, but everyone gets tired of it after a few months. You need to keep everything alive as much as possible. If things are going strong after the first year, then you know you made the right decision. If not, you don’t have to go down the tube. You just need to find out what everyone wants and make it happen.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

Many factors impact the initial Franchise Fee charged by a Franchiser. Some franchise companies make the mistake of setting their franchise fee based solely on what their competitors are charging. Although this may appear to be a sound strategy, the problem is that not all franchise systems are created equal, regardless of whether they operate in the same industry.

When establishing the initial Franchise Fee, it is important to remember that although the Franchise Fee can certainly help a company’s cash flow and assist in sustaining the company’s initial growth, the royalty fee income and income from the sale of products and/or services to Franchisees should be the major source of revenue in terms of the long-term profitability of the franchise operation. Companies that attempt to make a huge profit from the initial Franchise Fee may find that they are discouraging qualified candidates from looking past the huge fee.

When assisting clients in franchising their business, part of the development process entails our determining an appropriate Franchise Fee (and other fees) that balance the franchisor’s financial needs with the needs of the franchisee relative to their total initial investment. We do this by evaluating a number of different factors.

With Franchise Fees wildly fluctuating even among similar type franchise companies, to a potential franchisee the Franchise Fee may appear to be based on a “throw it out there and see if it sticks” approach. However, when the Franchise Fee is properly established based on a thorough evaluation of specific factors, it can be easily justified (and understood) by a potential franchisee.

When determining the initial Franchise Fee, we evaluate the following:

1. The sophistication and/or uniqueness of the system;
2. The potential ROI and profitability of the Franchise Business; and
3. The Franchisor’s costs and expenses associated with the acquisition and grant of the franchise.

When considering differences in the initial Franchise Fee of two similar franchise companies operating in an established industry (i.e. pizza), the third category is where much of the difference between franchise fees can often be found.

The Franchisor’s costs and expenses may include:

* Allocation for franchise development costs
* Allocation for franchise advertising and marketing expenses
* Franchise acquisition costs including sales costs (i.e. sales commissions) and other related expenses (i.e. marketing materials, personnel)
* Expenses related to training new franchisees and providing on-site support and/or site selection assistance prior to or during the franchisee’s grand opening period. Franchisors may choose to include some or all of these expenses in the initial Franchise Fee.
* Other hard costs incurred by the Franchisor in establishing a new Franchisee (i.e. training materials, supplies, equipment) if these costs are inclusive of the Franchise Fee.

As stated previously, the initial Franchisee Fee may also be based in part on the potential ROI and profitability of the Franchise Business. Of course, this may only be shared with a prospective franchisee by Franchisors who have made the required disclosure in the Disclosure Document relative to “financial performance representation.” Otherwise, these factors will only be tangible to prospective Franchisees once there are a number of franchises operating under the franchise system.

For franchisors who do not make financial performance representations (and the majority do not), the company’s franchisees may choose to share their financial performance with prospective franchisees. So as the number of franchises increases, it becomes easier for a prospective franchisee to evaluate the financial potential of the franchise. This is why it is common to see Franchisors increase their Franchise Fee over time. As the number of franchises increases, the franchise business gains more credibility (and believability) for potential franchisees. In essence, later stage franchisees are investing in more of a “sure thing,” which can justify a higher Franchise Fee.

So the question remains, what percentage of the Franchise Fee does a Franchisor typically “net?”

Again, this will vary greatly in large part based on the factors discussed. In addition, some franchise companies choose to “break even” on the Franchise Fee to reduce a franchisee’s barrier to entry in terms of the total initial investment. Others franchisors may actually choose to “lose” money on the Franchise Fee with the justification that they will make it up many times over with the ongoing royalty fee generated by franchisees.

This being said, it is not unusual for a Franchiser to “net” 25% or more of the total Franchise Fee (officially “gross profit”). It is also important to remember that a portion of the Franchise Fee normally includes a recoup of certain expenses that the Franchiser previously incurred (i.e. franchise development costs, production of advertising and marketing materials, advertising costs, etc.). So the net cash flow generated from the Franchise Fee is normally higher than the gross profit. As a result, the gross profit generated from the Franchise Fee increases as additional franchises are granted and some of these costs are fully recouped.

There is an art and science to establishing the initial Franchise Fee and other fees associated with the franchise (i.e. continuing royalty fee and advertising fees, which I discuss in another article). When establishing the Franchise Fee, franchisers should carefully evaluate the various factors discussed in this article as they relate to their franchise. Doing so will help ensure that the initial Franchise Fee is fair to both the franchiser and franchisee instead of a reason to question the Franchiser’s true motives.

Steve Vandegrift is President of FranSource International, Inc., a full-service franchise development and consulting firm founded in 1997. FranSource works with both startup and existing franchisors providing the expertise required to start and maintain successful franchise operations. You can email Steve via the FranSource website at http://www.fransource.com

As we approach the new year, many prospective franchisors wonder whether developing a franchise operation is a wise decision with the U.S. mired in a recession. Conversely, prospective franchisees wonder whether purchasing a franchise makes senses given the current economic climate. The quick answer to both is that it may not be.

A company that is looking to franchise their business mainly as a means of raising capital would probably be wise to defer franchising. Of course, a company in this position should probably never consider franchising, but that discussion is for another time. The same holds true for an individual who may be investing their last cent (and available credit) in purchasing a franchise business. In both cases, with the need for immediate revenue so great and little room for error, neither may have the staying power to survive through the current economy. At the very least, both would likely approach the endeavor with a mix of fear and trepidation…certainly not the best way to begin a new business.

This caution stated, it is exciting to share that the current U.S. economy actually offers incentives that makes franchising a business or investing in a franchise an excellent decision for many companies and individuals. Although franchisors in general have experienced a decrease in franchise inquiries over the past six months (our clients report 25-30% fewer leads on average), franchises are continuing to be purchased nationwide. In fact, one of our clients (ALOHA USA) announced in November that they had just granted their 25th franchise since beginning to offer franchises in August 2007.

So what incentives are there in this economy for a company to consider franchising?

First, in times of economic uncertainty the number of individuals concerned with their job status dramatically increases, which in turn leads some individuals to consider starting their own business. Due in part to the economy and mixed with a little “I’ve always wanted to operate my own business,” some ultimately choose to start a business. For other individuals, the opportunity to accept a buyout or early retirement package is the motivating factor for considering starting their own business. In both cases, rather than waiting for the proverbial shoe to drop, these people prefer to take destiny in their own hands. Of course, many prefer to do so with the assistance and support of a franchisor.

In addition to the “currently employed” candidates, a recessionary period creates tens of thousands of additional “forced” franchise candidates, who come from the ranks of the “recently unemployed.” Consider that with each ¼% increase in the unemployment rate, more than 350,000 people are added to the pool of prospective franchisees (another upside of high unemployment is the availability of qualified employees to assist in running a new business). Even recognizing that many of the recently unemployed will seek and find other employment (eventually), there are thousands of others who choose (and in some cases, are forced) to consider starting their own business. Many of these individuals take retirement funds, buyouts and/or severance packages with them when they leave their employment so from a financial standpoint, they are often ideal franchise candidates.

Which brings us to another affect this economy, and more directly, the stock market is having on franchising. With many investment and retirement accounts hovering somewhere below sea level, many people have opted out of the market. Now they are holding onto capital which they realize they need to invest somewhere. The question is where? Once again, some decide that investing in starting their own business is a good option, and what safer way than following the proven business model offered through a franchise system?

So what are the economy-related incentives for potential franchisees?

I will share three of the major ones. First, one of the key expenses associated with starting a franchised retail business is lease space and construction costs. With lease space going begging right now in markets across the country, many franchisees are securing lease space at discounts unheard of even a year ago. On top of this, landlords are increasingly offering high allocations for build-outs. In the last month, one client’s franchisee successfully negotiated an increase in the landlord’s build-out allowance by 300% (gaining an additional $40,000), while at the same time negotiating a 25% reduction in the lease cost.

Further incentives are available in the advertising and marketing arena. Many media are aggressively discounting advertising rates to attract business. It appears that we will see continued discounts from traditional media in 2009. The opportunity to advertise now at reduced rates can have a dramatic impact on a company’s bottom line following the recession period. McGraw-Hill studied the advertising expenditures of companies during the 1981-1982 recession. They discovered that companies who decreased their advertising during the recession increased sales an average of 19% following the recession while companies who continued to advertise during the recession increased sales by an average of 275%.

A third economic-related incentive relates to the cost of borrowing . Although credit requirements are much tighter than a year ago, capital is starting to flow again (think $70 BILLION bailout) and is available extremely cheap to individuals whose credit history, net worth and available cash meet the new requirements. The difference lower borrowing costs make to a company that is undertaking a franchise development program or to an individual who is purchasing a franchise cannot be understated.

When determining whether now is the right time to undertake a franchise expansion program or purchase a franchise business, prospective franchisors and franchisees should first evaluate their financial condition to determine whether they have sufficient capital to survive if revenues fail to meet expectations. During a recession, it is especially wise to follow the adage, “Hope for the best. Plan for the worst.” A thorough evaluation should also be conducted relative to the type of business being franchised. Is it in a industry that normally holds its own during recessionary periods? This alone makes a franchise business an attractive opportunity during good times and bad.

If both of these questions can be answered affirmatively, you may want to act now to take advantage of the incentives afforded by the current economy. In doing so, history demonstrates that you will be well-positioned to reap the rewards that come following a recessionary period.

Steve Vandegrift is President of FranSource International, Inc., a full-service franchise development and consulting firm founded in 1997. FranSource works with both startup and existing franchisors providing the expertise required to start and maintain successful franchise operations. You can email Steve via the FranSource website at http://www.fransource.com

When it comes to starting up your own business, the thought of a franchise has a lot of appeal. When starting a franchise you already know that your customers have heard the name of your business and will most likely come to your shop as well. You already have that free advertising going for you. Nothing can spread business faster than word of mouth. But there are pluses and minuses to every type of business you could decide to start up. It would be a good idea to read through some rent-a-center franchise information before jumping in feet first.

One of the major benefits to starting up your own franchise is that the franchisor often provides a significant amount of training. This is highly beneficial since any other business would not have access to this type of assistance. While your franchise might have to pay for the training, this is a better option than having to go out and figure it all out on your own. In addition, the franchisor will usually provide continued support and mentoring throughout the life of your own rent-a-center franchise. This is due to the fact that each franchisor wants to see each branch of their company succeed. They will not want to have one of their own stores ruin the reputation of all the stores.

On the other side of the advantages are also some disadvantages. The biggest disadvantage that you have owning your own franchise is the loss of control in most aspects of your company. If you want to make any changes the change must be approved by the franchisor. Also, if the franchisor is not running the company to the benefit of each franchise, this can cause major problems between you and the franchisor. You should make sure to read through your franchise agreement as most of these have you sign your rights away if any such disagreement should occur. The other main disadvantage is the cost in general. There is an upfront fee that you must pay to the franchisor for using their name and trademark. You will also have to pay royalties to the franchisor which will cut into your pocketbook for the life of your business.

While starting up your own business sounds like a wonderful idea, it is also a good idea to weigh the good and the bad that go along with opening a franchise. After you read some RAC franchise information you might decide that you still want to go ahead or you might change your mind altogether. It just depends on what type of business owner you want to be.

So if you are looking for more RAC franchise information, you should click on APRO today for answers to all of your questions. If you are interested in starting up your own Rent-a-Center franchise then APRO has plenty of information on that as well. APRO is an invaluable resource when it comes to looking for details on Rent-a-Center franchise information.

Because of their unique nature, employees and owners working within a franchise are more likely to have strained or alienated relationships that employees and owners working in a traditional business setting. Without a doubt, franchising presents excellent opportunities for profit making and career advancement, but it can often feel that the bond between co-workers is not as strong within a franchise and personal well-being and productivity suffer as a result.

Employees and owners of franchises need not be told corrosive affects of a sick work environment, all too many deal with such environments on a daily basis, but few within the franchise system have offered solutions and analysis of this malady. While there is certainly no one, single right way to conduct yourself in the work place, there are methods that can help identify different ‘characters’ that workers within the franchise tend to play.

Often referred to as ‘employee paradigms’ these two general, broad categories of worker – the achiever and the buddy- can help to illustrate the positives and negatives of two contrasting styles of work. There are certainly more character types to be dissected within the franchise dynamic, but these two will serve to set the stage for understanding franchise relationships.

The Achiever: Simply put, the achiever is the employee who treats their job as a life or death situation and who will stop at nothing to make sure that everyone else at work realizes how seriously they consider their employment. The achiever’s behavior and demonstrative attitude can take many, often contradictory forms such passive aggressiveness, assertiveness, and ill-humor, but the underlying thread in the achiever’s behavior is that they are driven by a need to succeed and be recognized.

Without delving too far into the psychology of the achiever type, it is important to understand that if you find yourself working alongside an achiever, though their behavior may at times be off-putting, their goals and projects are most likely driven by an inborn desire to succeed (and perhaps a fear of failure as well) and as such, a few well placed compliments will do wonders for this co-workers self-confidence and opinion of you. Likewise, in your interaction with the achiever, you should not attempt to become too ‘chummy’ or unprofessional as they might be taken aback by your seeming lack of respect for their dedication.

The Buddy: Traditionally considered to be on the opposite end of the franchise employee spectrum, the buddy is an employee who, for one reason or another, puts their work within the franchise as a secondary goal to that of making friends and becoming popular.

The buddy is often great fun to be around and can really lighten up the work place if kept in check, but if poorly managed or, worse, if managing, the buddy can become a plague on the office, draining productivity and causing irritation wherever they go. Buddies are best dealt with in short spurts, if you feel that you cannot talk to a buddy without going back to your work in a bad mood simply find reasons to stay away from them- your work will profit as a result.

One can reduce these two general categories into further specialized character types, but in terms of franchise success and profitability, the achiever and the buddy tend to be the two signature personalities that reoccur most frequently. Above all, with all character types, remember to be understanding, compassionate, and adaptable.

Mr. Oliver is a marketing agent of FranNet. The franchise business experts provide franchise consulting services throughout the nation.

Your business is very successful and you want to start franchising? What do you look out for? What do you do? There are many pitfalls in franchising, but concept and timing are critical. The first thing you need to concern yourself with is concept. How many competitors in the category that you are in? Let’s take pizza for example, well over 500 chains in this category, so what sets you apart and makes you different? Are you Domino’s and you focus on delivery? Or are you Little Caesars with the 2 for 1 concept? You need an edge, what sets you apart from the others?

If you don’t have a specialty you need one. Got great meatballs? Become the meatball king. What is it you are best at? If you don’t have it, come up with something. Remember if I am a franchise candidate, why should I buy your concept if there is nothing special about it? Get good at one thing and push it to the forefront.

Every good concept is able to paint a good picture with a formal profit & loss statement. I am not just talking about the company overall, but more importantly at the store level. The financial piece is critical and is the measuring stick for future and continued success. If every franchisee has his/her own different statement, how can you measure it as a group. You should also have biannual meetings or workshops to discuss acceptable percentages of each item category for the P&L. For instance, what should be the projected labor as a percent of gross sales? 20% 30%? You keep your franchises successful by keeping them in a set format with projected percentages. In the food business, food, paper and labor percentages are critical.

Another critical piece is legal documents. You will need to develop a Franchise Disclosure Document or FDD. This is basically everything about your company from it’s principals to it’s financial status. It’s the law and you will need to not only have one but file it in some states that require registration. it needs to be updated on an annual basis. It is always a good idea to find a good franchise attorney so that it is prepared correctly.

Training, at the core of a great franchise concept is it’s ability to train people to run it as well as you do. If you can’t teach them, your concept will fail. Consider classroom training, a 1-800 help number for problems tied directly into your office and video library with internet access to training video’s.

It is always best when considering a franchise to pick the right people to help you build it. Find someone with a background in franchising that can assist you in the process. It may cost you initially but will save you in the long run. A great example is a group that I know of that spent $ 65,000 on training videos. They were great, state of the art, but another group spent $10,000 rolled them out in less time with a more than adequate product. A good franchise leader that has been there, done that may cost you, but at the end of the day could save you considerable money.

Bob Moglia http://www.linkedin.com/in/bobmoglia Do you need help with your concept? CONTACT ME

Seizing a lucrative business opportunity is best done by purchasing an available franchise. By becoming as franchisee, you will have a business that comes with a ready made reputation. The standard franchise rules and regulations will help you set up the business. You can avoid making mistakes in the set up of the business because the franchiser company will be able to help you if you have a problem.

Franchises give the small entrepreneur the influence and the purchasing power of a big corporate name and the advantage of a low investment. The most common examples are fast food franchises, hotel franchises and franchises for moving and storage containers. The disadvantages are that small businesses can feel suffocated by the excessive control of the franchisor with little freedom in proportion to the investment.

However, there is merit in not having too much business freedom. The franchiser will give you a dedicated location, no other business person will be allowed to take a franchise in that location. You don’t have to experiment with different business strategies because the standard business practices are given in the form of an agreement with the franchiser.

You will need to pay a portion of your profits to the franchiser for the right to use their name. All the equipment used will have to adhere to certain standards stipulated by the franchiser. You can get a franchise directly from the franchiser or through a franchise agent. You must make sure that you can get a clientele for your business before taking a franchise otherwise it could be a costly mistake.

Franchises are hassle free ways of starting a business riding on the name and fame of the franchiser.

There is always risk involved when you are buying a franchise. It does not mean that if the franchiser is well known, you will also be successful. This is the reason why you have to look into several factors before investing. Think of it as an investment that you can make some profit from if you do the right things.

First of all, you should consider the reputation of the company or the franchisor. This involves the reputation of the franchiser, services, training, support, experience and profit potential. The ultimate reason for franchising a business is its brand and profit potential. You should look at the popularity of the company you are franchising with and find out if it has a registered trademark. This is important because you have to make sure that the business is not just an imitation of another person’s ideas.

You should also find out if the services offered by the company meet your target market needs. The experience of the company is important as well. You have to be aware of the length of time it has been operating or working to know how experienced the franchiser is in the business. Sometimes, the franchiser cannot guarantee close handling of the franchisees needs. That is why it is vital to understand the support and assistance that the company gives to its franchisees.

The training offered by the company is very important, since without adequate training you will not only fail to meet the standards of the franchise, but also be inadequately equipped to run your business properly. A failure of a franchiser to properly train you indicates a weakness, and that could be an indicator for you to get out as soon as you can. Your success depends upon the company’s success, and if the company is based on a foundation of poorly trained franchisees, then the future is bleak.

The franchising disclosure document is important, and you should be provided with a copy of that before signing up. This document will give you valuable information regarding the company, including the business background, the names of the executives, the business processes, the franchising system, and the experience of the company in franchising. Such a document also contains information about the history of litigation, costs, bankruptcy, terminations, restrictions, advertising, and current lists of franchisees. So make sure that you read and understand all the franchising disclosure information, since it will enable you to ask the right questions regarding the disclosure, so that you can get proper clarifications before franchising.

After gathering the information regarding the franchiser, you need to look at other important factors such as the location, market, demand, and competition. The location where you plan to establish the business can greatly affect your venture. Your franchising success will depend a lot on this because these other factors are affected by the geographical location of of the business. A sandwich bar might do reasonable lunchtime business in an industrial estate, but very little at other times.

Selection of the location should be strategic and well planned. Visual inspection is needed to find out if there are competitors in the area that offer the same services. Visit the area you have in mind and have walk around. Knowing the nearest franchisees of the same company is also essential because they can also be competitors. The location of your business should be accessible to your target market. Your market research should tell you which types of location are best for your kind of business; you will want somewhere that provides good exposure and best visibility for your business.

With regard to finance, the cost of the franchise should be well analyzed. Is franchising the ideal route to entry? Can you earn back your investment in a shorter span of time? You need to know how long the return of your investment is. You should also expect additional overhead costs when franchising because earning back your investment usually takes more than a year. This means that you will be spending more before you actually start making profit. There are also other expenses to consider such as the rent, supplies, utilities, and the payroll. Therefore, make sure that you have the necessary funds to sustain the business, so that you will not have to face the risk of bankruptcy.

With all these being considered, costs and benefits of franchising a business should be thoroughly analyzed before making a decision. Some of the factors mentioned above are disregarded by people when they go into franchising, but in order to be successful in the franchising business, you have to consider all these factors and make the necessary effort to ensure that they are in line with your business goals.

Given that you have done your homework and market research, there is no reason why you should not join all those others that are successfully operating a franchise business.

Naz Daud is the founder of CityLocal. This Franchise Opportunity is for people who would like to work from home and be their own boss.

Andrew purchased a Worldwide Online Printing franchise in Brisbane in 2003 and, despite having no printing experience, quadrupled its turnover in four years and soon was able to purchase his second franchise close by.

Is there anything Andrew wishes someone had told him at the outset that could have made him a better franchisee?

“I certainly wish I’d had a better understanding of the difference between cashflow and profit. I was running a very profitable business but all the same outran my working capital because I hadn’t fully appreciated the importance of cashflow. I learned that one the hard way.”

“You need to make sure you have enough working capital. Franchisors recommend a certain amount but you should really treat that as a minimum. You can never have too much.”

What are the other things he thinks help make a franchisee successful?

Understanding the role of the franchisor

“You really need a clear view of what you are getting into. Franchising isn’t about paying your money and then sitting back and watching the money come in.”

“A lot of franchisees expect too much. The franchisor gives you access to a brand, systems and methods of doing business. It’s still up to you to make a success of it.”

“There are a number of key benefits that joining a franchise group brings – access to operating systems, a recognized brand, marketing and technical assistance, buying power, and a network of fellow franchisees to support you. This all comes at a price, and it’s important to recognise the value that you get for your royalty fee.”

Managing risk

Another key factor Robertson identifies is the ability to manage risk.

“It’s definitely part of the package and sometimes the stresses and strains are rather different from those of an employed person. You get individuals entering franchising with a golden handshake payment after many years as an employee. They want to be their own boss. That’s all well and good, but it comes with risk.”

“One day they wake up and realise ‘Gee, I’ve put my house on the line! I can’t sleep. I’ve got this debt to worry about’ and it comes as a shock. They then start to make decisions based on fear rather than on what’s best for the business. The truth is debt is a fact of life when you own your own business.”

Interpersonal skills

People skills are another key area Robertson emphasises, though he points out there’s no single right way of relating to others.

“It’s crucial to be able to relate positively to people. Obviously the most important people that you’ll deal with are your customers, so be prepared to impress them, to see the inevitable (although hopefully rare) customer complaints as an opportunity, and to ensure all your customer interactions are handled with respect and have a positive focus. Equally as important are your skills in communicating with your staff. The skills required with this can vary widely, for example in some fast food franchises you need to be able to deal really well with the young people who staff your business. The key is knowing where you have those interpersonal skills and choosing the franchise where they can be best used.”

Appetite for self-improvement

“You should be focused not just on building a great business but on improving yourself. In fact if you focus on becoming a better manager the business will probably take care of itself.”

“A piece of advice I often give people is that if they spot a problem in their business the very first question to ask is whether they might be the problem. Look at your own actions first. Be self-critical. If you want to see change in your business then usually that will mean making changes to your own attitude, knowledge or skills, so be prepared to invest time and money on improving yourself.”

Balancing working in the business and on the business

“You need to be prepared for a constant and continual battle between time spent hands-on in the business and taking time to be more strategic. Both are important.”

“It’s important to try to work at every level in your business so you understand the roles your staff play and can manage them effectively. But you can’t get so buried in operations that you can’t step back and look at the bigger picture.”

Hard work

“You really will have to display a considerable work ethic in the early days. You’ll need to keep your head down and bum up and do some long hours. It’s hard to avoid coming home with your head still in the business. Some people are naturally better at compartmentalizing than others and can switch off. Luckily I believe it’s something you can learn to do.”

“Your long hours can take a toll on your family and it helps if they’re prepared for it from the outset. Ultimately I don’t know anyone who doesn’t feel the effort has been worth it in the end.”

Positive mindset

Finally Andrew says that a positive mindset is important, but that’s normally something that franchisees have anyway.

“Thank goodness there aren’t a lot of pessimists who choose to become a franchisee!”

Check out Top Franchise.com.au for more insights into franchising

Franchising in most parts of the world is well established and part of everyday life. In the U.S. over $1 trillion is spent per year in franchised outlets, 1 out of every 12 retail locations is a franchised operation. Now franchising is moving into other parts of the world, most notably India.

India now presents and enormous opportunity for franchise organizations. The country has over 12 million retailers which surpasses even China. This makes India the country with the highest retail outlet density in the world.

Indians have taken to franchising like the U.S. Already in this young and undeveloped franchise environment there are over 600 franchisors franchising in the Indian marketplace today. Along with that comes over 40,000 franchisees spread out across the country and across different sectors, over 300,000 Indian employees are employed directly by Indian franchise companies there. The market is enormous with almost unlimited potential. Currently the education sector of franchised businesses is the leading franchise model, but retail is catching up. The size of the consuming class means big opportunities for more franchise development.

The potential downsides of the new Indian market are what comes along with any developing market. For one the lack of regulation can still be an issue, real estate can be tricky and skewed in some cases and financing can be difficult. But if you can deal with those, this market has loads of potential.

There are a lot of companies in the services sector that are actively looking at India to set up their franchise operations today and will continue to be in the future. The growing popularity of the franchise model among Indian business men is evident in and around the country of India. The same issues that are taking place in the U.S. are also happening in India today. More people are losing their jobs, the big companies are downsizing with the slowing the economy in many sectors. This puts more people in the franchise market who would otherwise be working in a management position at a salary.

A franchise is a way for someone to earn a living without the risk of starting their own business. The other side of the equation is that as is the case in the U.S., investors are becoming more and more wary of putting their money into the stock market today. Earning the kinds of returns that were possible 2-5 years ago are extremely difficult today. This prompts more and more Indian business people to invest in themselves through a franchise model. Overall, the Indian franchise market represents one of the largest franchise opportunities in the world today.

Franchise organizations with applicable concepts and good planning will absolutely take India into account when planning their franchise system expansion for the coming years.

Vice President
Francorp, Inc.
708-481-2900
http://www.francorp.com

Yes, I mean it. It is not rhetoric or hyperbole but is truly grounded in reality. Your accountant or financial adviser is God (or very close to it!).

I began with the best of intentions. My former accountant was a well-meaning guy with a number of small businesses in his portfolio. His specialization, however, was the not-for-profit sector. Their philosophy and that of this budding franchisee could not have been more different.

Believing that I should ground myself in all aspects of the business, he encouraged me to purchase bookkeeping software and complete all of the data entry associated with paying suppliers, receiving books at the store, processing credits, and so on. Unfortunately, not only did I struggle with accounting at college, my desire to undertake such laborious processes was even more underwhelming now that I was distant from academia. Thus, I let the bookkeeping drift while hoping that it would sort itself. While the elf may have repaired all of the boots in the old fairytale, nothing of the sort would occur for me.

You see, I am a book keeper, not a bookkeeper!

Before telling you about the inevitable disaster that loomed over me, allow me to digress briefly to discuss the value of a franchise-familiar accountant prior to making the decision to buy a franchise. In short, an experienced financial adviser is worth gold to you. They can review the most important metrics underlying the success or failure of your proposed business and put their finger quickly on the flaws in your thinking. If it is an existing business, they can spot whether the owners have been paying themselves a reasonable salary, whether they have or have not been squirreling funds between accounts to create the perception of inflated profits and revenues, and let you know if the value placed on the goodwill of the business is reasonable or overstated.

Oh, how I wish I had received that type of advice at the time!

Okay, back to my disaster. While I was keeping up with paying my suppliers, my cash reserves were rapidly diminishing. Cash is the lifeblood of any business and is the very heart and soul of every small business and franchise. Despite sales revenues looking okay, I was losing the battle to stay afloat. In addition, while not completing the critical accounting tasks, I was also neglecting to return overstocks to suppliers, a fatal sin for any bookseller.

I was just about ready to throw in the towel when I received a phone call from the franchiser. A new employee in the accounting department had spotted a major error. Every month since I had purchased the business I had been sending in a check to cover my royalty payments and advertising levies. At the same time, my franchisor had been direct debiting my bank account for the exact same amount each and every month. I had been paying the franchisor double and no one had spotted it.

When the head office employee stated that I was about to receive a refund of almost $30,000, I could hardly speak, such was the feeling of relief. When I phoned my wife, who teaches part-time rather than working in the franchise, she cried. While not nearly as naturally emotional as I tend to be, she had been sharing the same strain. We shared tears of relief.

Now, I have an accountant who services the financial needs of three other stores in this franchise network in addition to mine. He knows all of the ins and outs, can organize the leasing of new equipment, and can complete the critically important financial deliverable on which the franchiser relies. Not only that, Doug drops by the store every few days to pick up my paperwork and discuss any financial matters that either he or I need to resolve. He makes sure I pay my taxes on time, processes the salaries of my staff, and keeps a supportive eye on me, the financial Luddite.

So, while it may be an overstatement to equate Doug with the holy father, it is nonetheless that he was an overdue answer to prayer. For your own peace of mind, find a Doug at the outset!

Dr Dave Poole is a franchise owner, writer and speaker who resides in Sydney, Australia. He speaks regularly to business groups and has taught leadership and corporate strategy at business schools around the globe. Co-author of two popular management books, Dave Poole was recently the successful CEO of a major industry association for the real estate development sector. He has served in local and state politics and currently owns a successful franchise bookstore. His speaking topics include “Making Your Small Business or Franchise Work in Tough Times” and “Communicating Passionately and Persuasively.” For more information, please see http://www.stratleadership.com

Glory Borgeson is a business coach, author, and speaker, and the president of Borgeson Consulting, Inc. She specializes in helping small business owners to catapult their business to new levels of profit. Whether an entrepreneur is at the top of his game or a rookie just starting his business, Glory works with the entire spectrum of entrepreneur. Top athletes have a coach; why not you?

Check out Glory’s book, “Catapult Your Business to New Heights: Sure-Fire Strategies to Increase Profit”. Designed to get small businesses on a better profit-making path, “Catapult” is a practical approach that exercises both the business and the owner! The book is available in both Paperback and E-book versions. Click here to find out more: Programs & Products (Or purchase on Amazon.)

Click here to download a chapter of the book from our home page! Borgeson Consulting, Inc

Many people buy a franchise because they want to work for themselves. The phrase, “I want to be my own boss” is often the first on the lips of budding franchisees. However, buying a franchise is arguably a step back from pure entrepreneurship.

For the pure entrepreneur, consider someone such as Richard Branson, now CEO and majority owner of one of the biggest and most admired companies in the United Kingdom. From a very young age, Branson always sought to go his own way. His first business venture was a student newspaper he started from scratch, a business he later sold to a multinational company for a tidy profit.

Richard Branson considers himself to be a business and brand creator, someone who can reshape an industry through both innovation and an incredibly strong commitment to seeing things from the customers’ perspective. By better responding to meet their needs than anyone else in the sector, his Virgin companies almost always carve out significant chunks of the market. Clearly, Branson could never work for anyone else and, in fact, has never done so.

In the United States, Donald Trump is a superb example of an entrepreneur who always demanded total control of his business and his future. While he worked with and for his father Fred, a Brooklyn-based real estate developer, during his college years, Trump created The Trump Organization during his early 20s. His aim was to create the instant perception among potential clients and customers that his corporation was far more significant and expansive than it appeared, even though at first he was its only employee. Like Branson, Trump has long been a lone ranger who has always needed to maintain primary control over any business venture with which he is associated.

If this approach is also your own favored approach for getting into business, buying a franchise may not actually be for you.

In summary, the franchising organization retains substantial control over what you can do, how you can do it, and when and where you can do it. This information is contained in the franchise agreement that every new franchisee must sign. While the restrictions on your behavior will differ from one franchisor to the next, the motivation for such constraints on your freedom is common to all. That is, they are seeking to ensure that their offerings are standardized to the highest possible extent and that they maintain maximum control over their empires.

If you have ever read Michael Gerber’s excellent book, The E-Myth, you will understand why this is so. Developed appropriately, the policies and procedures to which you will be subject serve both franchisor and franchisee in positive ways. They ensure that customers who visit any of the franchises receive similarly high levels of service. They ensure that franchisees don’t drop their standards or personalize them in ways that compromise the franchisor’s reputation and brand. Most importantly, they are designed to ensure that anyone with a reasonable degree of intelligence and a commitment to hard work can achieve them, thus limiting the reliance of the franchisor on the vagaries of individual brilliance and talent.

For the franchisee, the rules under which they operate limit the risks associated with starting a new business, since they are less likely to make dramatic mistakes. Their potential customers may be already familiar with the brand and its characteristics, thus making it easier to develop customers and patronage. Many decisions, particularly those associated with marketing, purchasing, and the creation of IT systems and databases, may be out of the hands of franchisees, therefore encouraging them to focus their efforts on building sales. In all likelihood, franchisees will also benefit from the buying power and managerial support provided by their franchisor.

If this is more your ballgame, you are what I call a “frentrepreneur” rather than a pure entrepreneur. Yes, you retain many of the characteristics of the traditional entrepreneur and likely associate yourself with their stories, but you act within a somewhat different operational context. In essence, you deliberately choose to trim your wings in the knowledge that you will likely fly longer than other birds, recognizing too that you may also not get to fly as high as they do.

While accepting the downsides, this can still be a personally rewarding and totally appropriate business decision. The world is full of franchisees who remain enthusiastic about self-selecting into a franchise system rather than starting from ground zero. In fact, I walk past one every day, a bakery and pastry franchise, who proudly stated to me that he is the nation’s highest revenue franchise. Not only is he delighted about this achievement, he is clearly making a great deal of dough with his dough!

In buying a franchise, it is therefore essential that you first examine yourself, your motivations and your relative need for control and autonomy before concluding whether you are an entrepreneur or a frentrepreneur. In whichever industry you are exploring, ask existing independents about the benefits and costs of remaining outside a franchise group. Also, ask current franchisees about the pluses and minuses that they consider to be part and parcel of being a franchisee. It is only after you’ve reflected on this information that your true identity, as entrepreneur or frentrepreneur, will become clear. Armed with this self-knowledge, a critical early decision will have been made.

Andrew purchased a Worldwide Online Printing franchise in Brisbane in 2003 and, despite having no printing experience, quadrupled its turnover in four years and soon was able to purchase his second franchise close by.

Is there anything Andrew wishes someone had told him at the outset that could have made him a better franchisee?

“I certainly wish I’d had a better understanding of the difference between cashflow and profit. I was running a very profitable business but all the same outran my working capital because I hadn’t fully appreciated the importance of cashflow. I learned that one the hard way.”

“You need to make sure you have enough working capital. Franchisors recommend a certain amount but you should really treat that as a minimum. You can never have too much.”

What are the other things he thinks help make a franchisee successful?

Understanding the role of the franchisor

“You really need a clear view of what you are getting into. Franchising isn’t about paying your money and then sitting back and watching the money come in.”

“A lot of franchisees expect too much. The franchisor gives you access to a brand, systems and methods of doing business. It’s still up to you to make a success of it.”

“There are a number of key benefits that joining a franchise group brings – access to operating systems, a recognized brand, marketing and technical assistance, buying power, and a network of fellow franchisees to support you. This all comes at a price, and it’s important to recognise the value that you get for your royalty fee.”

Managing risk

Another key factor Robertson identifies is the ability to manage risk.

“It’s definitely part of the package and sometimes the stresses and strains are rather different from those of an employed person. You get individuals entering franchising with a golden handshake payment after many years as an employee. They want to be their own boss. That’s all well and good, but it comes with risk.”

“One day they wake up and realise ‘Gee, I’ve put my house on the line! I can’t sleep. I’ve got this debt to worry about’ and it comes as a shock. They then start to make decisions based on fear rather than on what’s best for the business. The truth is debt is a fact of life when you own your own business.”

Interpersonal skills

People skills are another key area Robertson emphasises, though he points out there’s no single right way of relating to others.

“It’s crucial to be able to relate positively to people . Obviously the most important people that you’ll deal with are your customers, so be prepared to impress them, to see the inevitable (although hopefully rare) customer complaints as an opportunity, and to ensure all your customer interactions are handled with respect and have a positive focus. Equally as important are your skills in communicating with your staff. The skills required with this can vary widely, for example in some fast food franchises you need to be able to deal really well with the young people who staff your business. The key is knowing where you have those interpersonal skills and choosing the franchise where they can be best used.”

Appetite for self-improvement

“You should be focused not just on building a great business but on improving yourself. In fact if you focus on becoming a better manager the business will probably take care of itself.”

“A piece of advice I often give people is that if they spot a problem in their business the very first question to ask is whether they might be the problem. Look at your own actions first. Be self-critical. If you want to see change in your business then usually that will mean making changes to your own attitude, knowledge or skills, so be prepared to invest time and money on improving yourself.”

Balancing working in the business and on the business

“You need to be prepared for a constant and continual battle between time spent hands-on in the business and taking time to be more strategic. Both are important.”

“It’s important to try to work at every level in your business so you understand the roles your staff play and can manage them effectively. But you can’t get so buried in operations that you can’t step back and look at the bigger picture.”

Hard work

“You really will have to display a considerable work ethic in the early days. You’ll need to keep your head down and bum up and do some long hours. It’s hard to avoid coming home with your head still in the business. Some people are naturally better at compartmentalizing than others and can switch off. Luckily I believe it’s something you can learn to do.”

“Your long hours can take a toll on your family and it helps if they’re prepared for it from the outset. Ultimately I don’t know anyone who doesn’t feel the effort has been worth it in the end.”

Positive mindset

Finally Andrew says that a positive mindset is important, but that’s normally something that franchisees have anyway.

“Thank goodness there aren’t a lot of pessimists who choose to become a franchisee!”