What Franchise Makes the Most Money?

You're asking yourself, "What Franchise Makes the Most Money?" Good question.

A person can't really point to a particular franchise and say, "There's the money maker," because the fact is any franchise can be profitable. So, instead of trying to determine which franchise will make you richer faster; look for things that must be present in order for any franchise to be profitable.

• One of the key indicators to a profitable franchise is how well it is managed. As with any business, franchise or otherwise, if it is struggling or otherwise unproductive, often the blame, or at least part of it, is going to rest with management. 

• The home real estate industry likes to say that the key to a successful home sale is almost always "location, location, location". In the franchise industry, those words could be "market, market, market". There have been instances of franchises succeeding in markets that previously did not seem as though they would support them. However, these are usually the exceptions to the rule: most of the time the success of a franchise will depend on whether or not the services it provides are needed or wanted.

• If you want to try to get a clear picture of a franchise's profitability, ask to see the Franchise Disclosure Document (FDD). This is a publication that franchisors—those who offer franchises for sale - are obligated to provide to prospective buyers. If a franchisor is dragging their heels to provide the document, or if there is evidence that certain sections of the document may not be a true reflection of the franchise's profitability, this can be a sign that the franchise is not doing well.

• Consider whether or not the franchise has good investment possibilities. If lenders or other financial backers seem reluctant to provide all or part of the money needed to start a franchise branch, this may indicate that the master franchise itself, or at least a good portion of it, is experiencing profitability difficulties. Keep in mind, however, that a number of factors can affect profitability at any given time, so a little more research may be in order to try to ascertain the reason for the investors' reluctance.

• One of the best indications of a successful franchise is sound strategy development. The franchise that combines tactics that are known to be successful with others intended to further growth are often the ones with the highest profitability.

The more of the above key indicators, as well as others, that are present, the more likely it is that a franchise will be successful. By looking for these and other signs of good business practices, you can determine which franchises are indeed the most profitable. To aid you in evaluation these indicators, one of many franchise consultants can assist you.

Which Franchise Should I Buy?

The question of which franchise should you buy is definitely a personal one. Only you know what you do and don't like to do, what you are good at, and what you will honestly admit that you absolutely stink at.


However, by answering the questions below, and of course, any others you may think of, you can get a picture of exactly which franchise you should buy and which ones you shouldn't even consider.


What do you like to do? What do you think you would like to do?

When you patronize an establishment, do you find yourself thinking, "If this was my business, I'd...(fill in the blanks)."If so, you might want to conduct your own research into franchises dealing with that particular business, and what exactly is involved in owning one.


Remember, however, that when you into any business as a patron or customer, you are not seeing very much of the behind-the-scenes operation. There is inventory control, State and Municipal rules, regulations, and guidelines to be followed, and other things that come with running a business.


How "hands-on" do you want to be?

Do you want to be the one behind the counter, or do you want someone else greeting and assisting customers? Some franchises require that the owner be just as involved as other employees, while others allow the owner more flexibility in delegating tasks and responsibilities.


Why do you want to buy a franchise?

Has it always been your dream to work in a particular field, and you find yourself in a position, financial and otherwise, to fulfill that dream? If so, buying a franchise in the area where you have always wanted to work can help you realize that dream.


What are some of the advantages to starting your own business?

When you are a franchise business owner, you are literally your own boss, at least in your particular branch. You may have to answer to an area or district manager, but you still own your little piece of the enterprise, and it's yours to run as you please, as long as you follow the master franchise rules and regulations.


If the franchise is a success, you never have to worry about being out of work again. As long as your branch is in business, you have a job to go to every day, which will get you out of the house and into the business world.


Consider leaning upon the expert advice of a franchise consultant, many have found the answer to the "Which Franchise Should I Buy?" question by working with one of many franchise consultants.

What To Expect from the Initial Franchise Presentation

One of the most popular television shows recently has been "Who Wants to Be a Millionaire?" When it comes to deciding upon your "Final Answer" about your future and your franchise selection you need to study and do your home work. That is, you need to complete your due diligence, a thorough investigative process, as you prepare to take to the stage as a contestant during the initial franchise presentation.

The day that you meet with the prospective franchisor company face-to-face at the company headquarters is often referred to as Franchise Discovery Day. At that point you have the opportunity to learn detailed facts and figures about the firm’s business model, and you have the chance to be the one asking the questions, and by all means, be well-prepared to do so. Ideally, you will have already consulted with a few existing and even former franchise owners with regards to their experiences.

This critical meeting will center around the Franchise Disclosure Document (FDD) which is required by the Federal Trade Commission. The FDD (formerly called the UFOC - Uniform Franchise Offering Circular) is a legal, binding agreement that covers the following topics and must be reviewed at least 14 days before a franchisee ever signs the contract:

• History of the franchise
• Franchise fees and royalty fees
• Information about franchisor executives, directors
• Company litigation history
• Terms of the franchise agreement
• Estimates of initial costs, inventory, insurance
• Renewal options
• Territorial boundaries
• Products and services
• Training program
• Franchisee obligations

The franchisor also must provide information regarding the responsibilities it has to the franchisee:

• Training program
• Territories and locations
• Advertising and marketing support
• Management and operational planning support
• Trademarks, patent and copyright information
• Audited financial statements
• Existing franchise statistical information
• Vendor and product restrictions
• Renewal, termination, dispute terms

Caution: before you sign any Franchise Disclosure Document, it is imperative that you seek legal advice as well as counsel from your financial advisor. Remember the Boy Scout motto: "Be Prepared."

 

Finally, similar to the "Who Wants to Be a Millionaire" program, know that you have a "lifeline" - the opportunity to collaborate with one of FranFinders franchise consultants whose professional experience can be invaluable.

 

 

 

Franchise Business Profitability

Many things can determine franchise business profitability, but there are specific key performance indicators (KPIs) that can help give a more accurate picture of how well your franchise is doing in terms of showing a profit.

• Are your living costs being met? In other words, do you have enough money coming in from your franchise to keep a roof over your and your family's head, provide for the children's education, cover minor emergencies, and buy groceries, just to name a few. At the very least, this is how much money should be coming in over and above operating expenses.

• If you borrowed money for the franchise fee, are the payoff terms in line with the length of the franchise agreement? Or are you going to be paying for a 5-year franchise agreement for the next 20 years? If you are, then your debt to asset ratio is too high.

• Are you using franchise profit for personal expenses, in order to receive a tax break, or for any other reason? When you do this, the bottom line is that your business profits are not as high as they can or should be.

• Are you paying yourself enough, or are you paying yourself too much? Both situations create false profit figures.

• Are your cost and other margins accurate, or are they too wide or narrow? As with salaries, too much or too little will not give an accurate picture of franchise profitability.

• How are your expenses? Do you need to get them under control? Too many expenses can make a huge dent in profits. Look for ways to control cost without sacrificing customer service or satisfaction. And, whatever you do, don't try to cut corners by failing to adhere to guidelines and regulations.

• Do you have to be told that more sales mean more profits? Probably not. Look for ways to increase your sales at the same time you are figuring out how to cut expenses.

• Ready for a review? It's a very short, simple one. Keep your expenses low, make sure your margins are as accurate as possible, and increase your sales. By doing this, you will be able to get a clearer, more accurate picture of what your franchise profitability truly is.

Only a few people besides yourself need to know your franchise profitability, because it's really no one else's business except those who are directly involved in the franchise. However, this seeming lack of accountability is what makes it easy for you to "play around" with your figures. Don't do it; instead, hold yourself to an honest reckoning.

By contacting one of FranFinders expert franchise consultants, you can be referred to a competent franchise accountant that can review any franchise business profitability numbers.

Franchise Agreement Sample

Franchises are different; therefore, franchise agreements must by necessity be different in scope and tone. However, there are certain provisions that are or should be included in most franchise agreements.

• Obligations of both franchisors and franchisees concerning business operations must be spelled out, in as complete detail as possible.
• The amount of training and operational support that the franchiser will be responsible for providing must be clearly stated. This information should also include the cost of the training and operational support.  
• The territory in which you are allowed to operate your franchise must be plainly stated. In addition, any exclusion which may apply must also appear in this section.
• How long the franchise agreement will be in force must be included in the document. Renewal rights must also be stated.
• The amount of investment required by the franchisee must appear in the agreement.
• Guidelines and regulations concerning trademarks, patents and signs and the rights and responsibilities of the franchisee as pertaining to them must be included in the agreement, and written in such a manner that the franchisee will be able to follow them with minimal, if any, problems.
• Fee amounts, including franchise, royalty, and service fees for which the franchisee is responsible must be stated in the agreement.  
• The responsibilities of both franchisee and franchisor where tax issues are concerned must be addressed.
• Conditions and restrictions on the sale or transfer of the franchise must be clearly stated.  
• Any advertising policies that must be adhered to by the franchisee should be plainly stated.
• How franchisee termination issues will be handled must be included in the agreement.
• Dispute settlement guidelines must be in the agreement. Further, the paragraphs addressing these must include how the company will settle disputes, how disputes concerning operating practices will be handled, dispute cancellations, and who will be responsible for attorney fees.

By contacting one of FranFinders expert franchise consultants, you can be referred to a competent franchise attorney that can review any franchise agreement sample.

 

 

 

What is a Certified Franchise Executive (CFE)?

A Certified Franchise Executive (CFE) is a person who has chosen to take his career in franchise to the next level. He does this by taking a total of 3500 hours of continuing education classes which include courses in experience, participation, core, and electives. Experience and participation classes count for 500 hours each; core classes count for 1600 hours; elective course work earns a CFE student 900 hours.

Those who choose to become CFEs demonstrate that they have taken the initiative to continue their education above and beyond what is or may be required for franchise operations. CFE students are able to reach new goals in such areas as professional development and career planning.In addition, those who achieve CFE certification also display a sense of pride and self-fulfillment: both personal and professional, and exhibit dedication and loyalty to their careers. Further, they show others how much they believe in the franchising industry and their decision to pursue a career in that area.

Becoming a Certified Franchise Executive allows you to place the letters "CFE" after your name, just as you would any other title or educational accomplishment. When people see this, they are aware that you have voluntarily committed yourself to a higher standard in the franchising field.

Further, becoming a CFE casts you in a more positive light when it comes to seeking employment or working towards a promotion or other type of career advancement.In order to be eligible to pursue a CFE, a person must be considered as already being active in the franchising field. From there, all necessary requirements of the CFE program must be successfully completed.

A person pursuing CFE certification may take the required courses on his own time, working them around his individual schedule. However, all courses must be completed within three years after he has enrolled in the program. Average completion time is usually 1½ to 2 years. If a person has not completed the program by the end of the third year, it will be necessary for him to enroll again in the problem. This will incur an additional enrollment fee.

A person will be notified when he is getting close to the three-year deadline. In this way, he can arrange to either speed up the process or prepare for re-enrollment.Anyone who is employed in the franchise industry would do well to consider achieving CFE certification. After all, you can never have too much education.

How to Start a Small Business

People often choose a franchise as a means of starting a small business. This is because much of the "groundwork" - finding a site, stocking the business, and other things, has already been done, making it easy for the franchisee, especially if it is someone who is just starting out, to get things going.

Buying into a franchise as a means of starting a small business also means that the owner can talk to franchise consultants once he has paid the franchise fee. They can provide him with tips for starting a small business, which may include some of these:

1 - Don't do anything until you conducted your own franchise business search. You have to understand how the business operates before you can open your own franchise. Others can offer you suggestions on where to look for information, but you should find and read the information on your own.

2 - Don't be in a hurry. Most businesses that fail do so because the owner tried to expand or grow the business before it was ready. When you get in a hurry, you may lose sight of what's important in running your business. However, even as you are taking your time to do things right, continue to plan for and imagine what you would like to in the way of expansion and growth.

3 - Have your business plan in place before you buy the franchise or as soon after the purchase as possible. Franchise consultants can help you by telling you what they feel you should include in your business plan.

4 - Have a substantial savings account in place before you make the first move towards starting a business. It is this money that will see you through the first few weeks when the business is just getting off the ground and profits may be slow in coming.

5 - Make sure you have all the necessary permits and licenses well before the first official opening day. Nothing is more frustrating than opening your franchise and having it immediately shut down by authorities because the necessary paperwork was not in place.

6 - Do your best to hire the highest quality people you can. And, don't be afraid to hire someone who may demonstrate more knowledge in some aspect of the business than you have. Together, you both can make the business a success.

7 - Make sure your personal assets are protected. If by some unfortunate circumstance the business should fail, protecting your assets means you won't lose everything. Consider registering your business as a Limited Liability Company (LLC). By doing this, you will be able to start over and your personal assets will still be safe.

If starting a small business is a top goal for you, then contact one of FranFinders expert franchise consultants.

How to Quit Your Job

If you are considering investing in a franchise, there are quite a few things you are going to have to accomplish before you can even think about quitting your job. Some of them may be easier than others, but you should concentrate on having fulfilled them all before you turn in that notice.

• 
  Of course, the first order of business is to figure out what type of franchise you want to invest in. This should definitely be done before quitting your current job.
• 
  You want to have the franchise business you have chosen to be operating on at least a part-time basis before you quit. In order to do this, you will most likely have to go ahead and pay the franchise and other start-up fees, so you will have already invested at least some money into the franchise.
• 
  Since you will in essence be working two jobs, it is better to have the franchise operating on a part-time basis, at least for the first little while. Otherwise, unless you can employees to keep it open full-time without your presence being required, you are going to essentially be working two jobs, which means you will have no time for family or other activities. Stretching yourself that thin may cause you problems on your current job. This may lead to your having to quit before you are truly ready.
• 
  Have a back-up plan. If the franchise fails, you are going to need something to fall back on, either savings or another source of income, or the ability to return to your previous employment. Do not quit until you have established this back-up plan.
• 
  Don't quit your job until you are certain you are completely ready. Make sure you have everything in place, including a good business plan, additional income, preferably in the form of savings to cover personal and living expenses, and money that you can put back into the business. Also, check to see what you need to do about keeping your current insurance policies, including health and life. Make sure your back-up plan is in place, and most importantly of all, make sure you have the wherewithal to make your new business work.

Once you have all that in place, you can then confidently walk into your supervisor's office, or the Human Resources Department, and hand in your two weeks notice.

If quitting your job is a priority for you, then Consider using the advice of one of FranFinders expert franchise consultants to assist you with your goal.

Franchising vs. Licensing

There are distinct differences between franchising and licensing businesses. The chief one concerns establishment and operation costs, but there are others as well. It is important to know about as many of these differences as possible before deciding which one is best for you.

Let's talk about the difference that has already been mentioned: establishment and operating costs. A franchise requires that a significant amount of money be paid at the very beginning. Additionally, you will continue to pay royalty, advertising, and other fees to the parent company.On the other hand, you only pay for a licensing fee one time, and the cost is usually lower than that of a franchise fee. Because you are not connected with a franchise, however, you do not have to pay royalty fees or provide financial information on your business. You are pretty much responsible, however, for your own advertising and other business-related expenses that might be covered in a franchise.

Relationships between franchisees and parent companies and licensees and those from whom they obtained the license are different. Franchisees can expect to work a little more closely with the parent company; this may be especially true in the areas of training and support. Further, as a franchisee, you retain certain rights to company trademarks and logos.

Also, as a franchisee, you may be limited in some areas, such as where your branch can be located, which products and services you can offer, and possibly even price amounts.A licensee, however, may not have much contact with the original license holder at all. Further, the license agreement may not include the use of a brand or trademark; rather, as a licensee, you will be expected to make your own mark in the particular market for which you hold a license. You probably won't get a lot of training or support from the original license holder, either.

Further, as a general rule, you do not have any territorial rights. In other words, the original licensor can sell as many licenses, along with the products and services they offer, as he wishes in the same geographic area.

On the bright side, about the only time you will even be in contact with the licensor is when you're buying his product to sell in your store. However, that's all you'll pay, is the purchase price on the product. You won't have to pay royalty, advertising, or other fees to support the licensor.

How Franchising Works

Here is a concise, "pocket-guide" on How Franchising Works.

The Merriam-Webster dictionary defines a "franchise" as "the right or license granted to an individual or group to market a company's goods or services in a particular territory"; also "a business granted such a right or license".

A "franchisor" is defined as "one that grants a franchise", while a "franchisee" is defined as "one granted a franchise". The phonetic pronunciation for franchisor is fran-chi-zor; the phonetic pronunciation for franchisee is fran-chi-zee.

The reader may now be asking himself why, if this is an article on how franchising works, was it necessary for the short lesson in Language Arts? The answer is because for the remainder of this article, we are going to be discussing some fascinating creatures called "Zors" and "Zees", and it's important to know how they got their names.

(Seriously, in the franchise industry, it is common to drop the first seven letters, thus referring to those who sell franchisors as "zors", and those who buy and/or operate franchises as "zees".)

In Franchise World, "Zors" are the people who own businesses that operate as franchises. An example of a franchise in the "real world" would be McDonald's®.

"Zees" are people who live in Franchise World and want to own or operate one of the "Zors" franchises for themselves. In order to do this, a "Zee" enters into a business arrangement, usually by paying a certain amount of money, with a "Zor" which allows him to establish or operate a particular franchise in the "Zee's" desired location.

When "Zors" and "Zees" enter into this business arrangement, both of them reap benefits. "Zors" see a profit from the money that has been paid to operate a franchise. "Zees" have the opportunity to go into business for themselves, thus providing them with steady incomes and employment opportunities.

When you think about it, though, "Zors" and "Zees" actually need each other. Without "Zees" to buy into their franchises, "Zors" may actually start to see a decline in franchise growth.On the other hand, many times, the purchase of a franchise is a "Zee's" first time to operate a business. And, as is so often the case, the "Zee" is going to need all the help and guidance he can get from his "Zor".

This article may have been written in a light vein, but the fact is that both franchisors and franchisees serve a distinct purpose in their own right. For this reason, it is important that franchisors consider franchisees as partners or equals, affording them all the support and respect they need and deserve. Franchisees need to prove to franchisers that they have earned the respect shown to them, and acknowledge the support by making the franchise as successful as possible.

If you're looking for additional help, there are experts in the industry who work with beginners, they are franchise consultants. Reach out to one today, they can provide the next level of information.

What Franchise Makes the Most Money?

You’re asking yourself, “What Franchise Makes the Most Money?” Good question.

A person can’t really point to a particular franchise and say, “There’s the money maker,” because the fact is any franchise can be profitable. So, instead of trying to determine which franchise will make you richer faster; look for things that must be present in order for any franchise to be profitable.

•One of the key indicators to a profitable franchise is how well it is managed. As with any business, franchise or otherwise, if it is struggling or otherwise unproductive, often the blame, or at least part of it, is going to rest with management.

•The home real estate industry likes to say that the key to a successful home sale is almost always “location, location, location”. In the franchise industry, those words could be “market, market, market”. There have been instances of franchises succeeding in markets that previously did not seem as though they would support them. However, these are usually the exceptions to the rule: most of the time the success of a franchise will depend on whether or not the services it provides are needed or wanted.

•If you want to try to get a clear picture of a franchise’s profitability, ask to see the Franchise Disclosure Document (FDD). This is a publication that franchisors—those who offer franchises for sale—are obligated to provide to prospective buyers. If a franchisor is dragging their heels to provide the document, or if there is evidence that certain sections of the document may not be a true reflection of the franchise’s profitability, this can be a sign that the franchise is not doing well.

•Consider whether or not the franchise has good investment possibilities. If lenders or other financial backers seem reluctant to provide all or part of the money needed to start a franchise branch, this may indicate that the master franchise itself, or at least a good portion of it, is experiencing profitability difficulties. Keep in mind, however, that a number of factors can affect profitability at any given time, so a little more research may be in order to try to ascertain the reason for the investors’ reluctance.

•One of the best indications of a successful franchise is sound strategy development. The franchise that combines tactics that are known to be successful with others intended to further growth are often the ones with the highest profitability.

The more of the above key indicators, as well as others, that are present, the more likely it is that a franchise will be successful. By looking for these and other signs of good business practices, you can determine which franchises are indeed the most profitable. To aid you in evaluation these indicators, one of many franchise consultants can assist you.

Which Franchise Should I Buy?

The question of which franchise should you buy is definitely a personal one. Only you know what you do and don’t like to do, what you are good at, and what you will honestly admit that you absolutely stink at. However, by answering the questions below, and of course, any others you may think of, you can get a picture of exactly which franchise you should buy and which ones you shouldn’t even consider.

• What do you like to do? What do you think you would like to do?

When you patronize an establishment, do you find yourself thinking, “If this was my business, I’d…(fill in the blanks).”If so, you might want to conduct your own research into franchises dealing with that particular business, and what exactly is involved in owning one.
Remember, however, that when you into any business as a patron or customer, you are not seeing very much of the behind-the-scenes operation. There is inventory control, State and Municipal rules, regulations, and guidelines to be followed, and other things that come with running a business.

• How “hands-on” do you want to be?

Do you want to be the one behind the counter, or do you want someone else greeting and assisting customers? Some franchises require that the owner be just as involved as other employees, while others allow the owner more flexibility in delegating tasks and responsibilities.

• Why do you want to buy a franchise?

Has it always been your dream to work in a particular field, and you find yourself in a position, financial and otherwise, to fulfill that dream? If so, buying a franchise in the area where you have always wanted to work can help you realize that dream.

• What are some of the advantages to starting your own business?

When you are a franchise business owner, you are literally your own boss, at least in your particular branch. You may have to answer to an area or district manager, but you still own your little piece of the enterprise, and it’s yours to run as you please, as long as you follow the master franchise rules and regulations.

If the franchise is a success, you never have to worry about being out of work again. As long as your branch is in business, you have a job to go to every day, which will get you out of the house and into the business world.

Consider leaning upon the expert advice of a franchise consultant, many have found the answer to the “Which Franchise Should I Buy?” question by working with one of many franchise consultants.

What To Expect from the Initial Franchise Presentation

One of the most popular television shows recently has been “Who Wants to Be a Millionaire?” When it comes to deciding upon your “Final Answer” about your future and your franchise selection you need to study and do your home work. That is, you need to complete your due diligence, a thorough investigative process, as you prepare to take to the stage as a contestant during the initial franchise presentation.

The day that you meet with the prospective franchisor company face-to-face at the company headquarters is often referred to as Franchise Discovery Day. At that point you have the opportunity to learn detailed facts and figures about the firm’s business model, and you have the chance to be the one asking the questions, and by all means, be well-prepared to do so. Ideally, you will have already consulted with a few existing and even former franchise owners with regards to their experiences.

This critical meeting will center around the Franchise Disclosure Document (FDD) which is required by the Federal Trade Commission. The FDD (formerly called the UFOC - Uniform Franchise Offering Circular) is a legal, binding agreement that covers the following topics and must be reviewed at least 14 days before a franchisee ever signs the contract:

• History of the franchise
• Franchise fees and royalty fees
• Information about franchisor executives, directors
• Company litigation history
• Terms of the franchise agreement
• Estimates of initial costs, inventory, insurance
• Renewal options
• Territorial boundaries
• Products and services
• Training program
• Franchisee obligations

The franchisor also must provide information regarding the reponsibilties it has to the franchisee:

• Training program
• Territories and locations
• Advertising and marketing support
• Management and operational planning support
• Trademarks, patent and copyright information
• Audited financial statements
• Existing franchise statistical information
• Vendor and product restrictions
• Renewal, termination, dispute terms

Caution: before you sign amy Franchise Disclosure Document, it is imperative that you seek legal advice as well as counsel from your financial advisor. Remember the Boy Scout motto: “Be Prepared.”

Finally, similar to the “Who Wants to Be a Millionaire” program, know that you have a “lifeline”—the opportunity to collaborate with one of FranFinders franchise consultants whose professional experience can be invaluable.

How to Spot a “Hot” Franchise Business

“When you’re hot you’re hot, and when you’re not, you’re not” according to the Jerry Reed classic song of the same name. No truer words have been spoken that could describe a multitude of franchising opportunities.

Practically everyone wants to be associated with the latest and greatest, the next big thing, whether it involves a franchise, the latest phone, or the newest car. Be careful where you tread, however, because what may seem hot at the time, could just be a flash in the pan. Conversely, what’s old can often be new again.

Customer demands and needs may vary from year-to-year. External market conditions, such as the economy, government regulations, or competitive pressures can change your business dynamics overnight. So, how do you decide what is hot and what is not?

Let’s take a look at several key factors that may help you in your decision-making process:
•Start by simply getting a general feel about trends by sheer observation of the marketplace
•Do in-depth research on-line, read trade journals, attend shows, even participate actively on social media (LinkedIn, Facebook, Twitter, etc.)
•Venture out and meet experts in the your industry or field of interest
•Consider counter-trends: if everyone is into burgers, perhaps consider hot dogs
•Study demographics and buying habits of various age and income groups in your region
•Realize that a tried and true franchise may seem old, but just one new item might change the face and fortunes of the franchise
•Consider your risk-aversion and risk-taking profile

When it comes to the bottom line—your bottom line—it is up to you to assemble all of the facts you have gathered, study them, face them head on.

Then decide what is best, for not only your finances, but also with regard to your personality, lifestyle, business experiences, as well, of course, what people truly want and need. In other words, select the hot franchise business that meets your needs and objectives, not just the “flavor of the day.”

Only when you match each of those parameters to the plethora of franchise opportunities, will you be making an informed decision as objectively as possible.

To help you further in your franchising quest for the “hot” opportunity is one of the expert franchise consultants with FranFinders.

Pushing Past Fear – Taking the Leap Toward Franchise Ownership

As President Franklin D. Roosevelt proclaimed in his first inaugural address: “…let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

Think about that quote for a minute. Not only can it apply to your challenging decision to take the leap toward franchise ownership; it also reinforces that you are not the only one who has ever harbored any negative thoughts.

It is normal to have some self-doubt, otherwise you would not be human. Think of the Super Bowl football heroes who say that they have had butterflys in their stomachs before the game of their lives—and then went on to victory and stardom.

Make no mistake about it: franchising is a major life decision. What should override all other aspects of this assessment is that you have a dream—a goal of being a business owner, the head of your own company, a better lifestyle for you and your family. If you can envision it, however, more than likely, you can achieve it.

On the other hand, people can be true visionaries…while others act as Pollyanas. Which are you? Consider these important factors in your thought process:

• What is your motivation? Escaping a bad employer, had a job loss, or truly self-motivated?
• Do you have a plan? Where will you find the financial resources?
• Are you willing to roll up your sleeves and pitch in?
• How well are your people skills and ability to deal with the public?
• What is your business background? Your overall strengths and weaknesses?

These points are not mentioned to discourage you from becoming a franchisee, but rather to help you start an authentic self-assessment. Still, for many, these represent questions that you may not have had to consider in the past, and an objective gut-check is not always easy to do.

That is why you need a mentor to help you through the franchising maze that encompasses self- awareness, financing, multiple franchise choices, personnel selection, plus legal and compliance issues, to name just a few hurdles. All of these elements you need to seriously consider, even before you sign on the dotted line, which itself can be somewhat nerve-wracking.

What To Look for When Considering An Existing Franchise for Sale

One of the best reasons that many entrepreneurs enter the world of franchising would be that, in a broad sense of the word, it is perceived as a “turn-key” operation, given all of the marketing, branding, training and overall support you can receive from the franchisor.

Taking that “turn-key” approach to the next level might be someone’s rationale for buying an existing franchise for sale where presumably the owner has an established base of customers, vendor relationships and possibly, owner financing. Before you decide to go in that direction, however, it might be a good idea to carefully review some of the advantages and disadvantages of that strategy:

•Start by reviewing your overall business goals and aspirations. For example, just because the franchise location might be convenient for you may not mean it is convenient for customers because of pending road construction.

•Conversely, a site not so close to home may be prime for new development which could add store traffic.

•If your desire is to own several units, getting involved with an existing location may not match your financial targets or demographics.If these issues do not represent hurdles for you to achieve your goals, then you should proceed to do your due diligence. Here are a few methods to consider for learning about the existing franchise:

•Check with your franchise broker who can help you find existing franchises that may be for sale that match your interests.

•The corporate franchisor may also be a source of information about the performance of the existing unit(s) for sale.

•Consult with your financial advisor and arrange to review the “books” for the past couple of years in order to determine cash flow, expenses, taxes, margins, and other financial data.

•It is also advisable to retain an attorney so that you can ascertain if the seller currently has, or has experienced in the past, any litigation, or perhaps has other building code, tax, or human resource issues.

You need to be inquisitive and intuitive at the same time. Even as you rely upon your accountant or attorney, you - the actual potential franchisee - need to ask pointed questions, and probe deeper as to why the current owner wants to sell.

Do not conclude or assume anything until you are totally satisfied with every answer. That way you will enter into any agreement with your eyes wide open and with full confidence in your business venture.

The Pros and Cons of Start-up Franchises

You’re quite certain that buying a franchise business represents your ideal pursuit of happiness in business. One of the final questions remaining before you now is “What type of franchise arrangement will work best for me?”

As you mull your decision like Hamlet—“To be (a start-up), or not to be (a start-up),—that is the question…”—note that you can still choose the industry vertical, e.g. fast food. The crux of the matter is whether you want to be a big fish in a little pond or vice-versa?

It all boils down to a soul-searching, face-the-music gut-check that seriously weighs the pros and cons of going with a tried and true emporium with brand recognition, or taking more of a risk with the newest, hot entry into the market. Here are a few key tipping points that might help you to focus better and to help match your options with your overall goals, financial status and personality:

•If you can get in on the ground floor of a new operation, you will have the opportunity to be on the cutting edge, the first on your block. On the other hand…the franchisor has no experience to support this new system. So, do you have extraordinary marketing and business skills to overcome this issue?

•The “XYZ” corporation may have found an ideal niche that serves an unmet need in the market which could foretell growth. On the other hand…their product or service may turn out to be little more than a “me-too” concept with no uniqueness. Are you absolutely certain that this company does have a unique selling proposition?

•Purchasing a start-up franchise probably means that your upfront costs as a franchisee will be relatively lower than buying from a company with hundreds or thousands of locations. On the other hand… the franchisor will likely have lower financial reserves to support marketing/training.

Again, maybe you have prior business experience that can offset this disadvantage—do you have what it takes?

To assist with helping you measure the arguments for and against a start-up, is the advice of a FranFinders expert franchise consultant.

Keys to Know About Franchising when in Job Transition

Double-digit unemployment, the highest in the U.S. since 1983, has led many people to consider buying a franchise. Being your own boss, getting off the corporate merry-go-round, and envisioning a better lifestyle sure sounds enticing. If you are one of those, however, the first thing you need to do is to heed this important piece of advice—should you ever become a franchisee, please don’t ever think or say, “Will franchise for food.”

Not saying don’t buy a food franchise, but rather, don’t rely on getting into franchising as a means of creating a quick cash flow to feed your family and yourself. Consider these due diligence factors before you get ready to sign on the bottom line:

• Check with a few other operators to get their cash flow feedback and experience
• If you are purchasing an existing business, confirm your inventory obligations
• If someone else will run the enterprise day-to-day, how well will they manage
• Fully understand what your franchisor fees and other obligations will be
• Consider engaging a business advisor if you have no experience in business
• Develop and understand a break-even analysis with your financial expert

Secondly, you need to keep a long-term perspective about owning a franchise. Realize that often, it is only after several years of persistence and tight management controls, that the real monetary rewards are achieved. In fact, remember that, in most cases, minimum franchise agreements last five years. Do you have sufficient back-up funds and patience to make it through the long haul?

The third key element to consider is somewhat more of a psychological hurdle: understand that being a franchise owner can be as tedious as your most recent job if you let it be. Getting up at four o’clock in the morning to make the donuts may offer lucrative rewards, but not everyone has the personality and temperament to do so. Rather, you need to sharpen your business and human resources skills so that your operation becomes a well-oiled machine over time instead of a chore.

So, how do you determine this factor? Your best choice is to enlist the aid of a franchise consultant who can advise you about the best fitting opportunity to match your attributes.

What Makes for a Good Franchise Location?

Some locations may look as though they were a perfect spot for a franchise to operate in, but further investigation may prove otherwise. Others may look as though they were the last place one would want to be located, but again looks can be deceiving.

So how do you know which location or site will make a good franchise location. Consider the following when making your decision:

•Area of town

An area of town that is already well-populated by other businesses, or is considered part of the business district can be a good choice. You do want to make sure that over-saturation is not a concern.

Speaking of the area, consider whether it has a reputation of being a “good” part of town. Even if it doesn’t fit the “normal” definition of “good” part of time, if safety of the public and protection of franchise property is provided to best extent possible, it still might be a site to consider.

Don’t be hasty about giving up on a site if it isn’t in “best” location. Often, some city, county, or even state officials offer incentives or provide benefits for franchisees willing to locate in less-known or less-desirable areas.

You will have to check with the franchisor if you are considering such an area. Some franchisors are reluctant to locate in “less-desirable” areas, even if assurances of safety and protection are offered.

•Access to Major Thoroughfares

This includes interstate and state highways and well-traveled county roads. Drive down a city’s “Main Street”, too. It may prove to be an excellent location.

It may be more expensive to lease or rent real estate in these areas, but most likely in the long run it will be well worth it.

•Location of and Distance Between Competitors

Check out your competitors’ locations. Too many in one area can mean constantly having to “scrap” and fight for business. However, being the only one for miles around may not be all that favorable, either, especially if all or part of the county in which your franchise will be located is in a rural area.

If it takes too long or requires too much gas to reach your location, you can’t count on very frequent return business. You may have a few regulars who make it a weekly or monthly outing, but you will have to consider if this is enough to sustain the franchise.

•Overall Appearance

Just because the area looks suitable does not mean it will be a good location. If it doesn’t look appealing, you still may find it harder to attract customers, even if the area is considered “safe.”

How to Understand a Franchise Agreement

Can you understand your Franchise Agreement?

Unless you are or were associated with the legal profession in the past, the answer to the first question is probably a resounding, “No!” That’s why you had an attorney to look it over and explain it to you.

Now, however, for some reason, you are perusing the document again, and you’re not sure you remember everything you and the attorney discussed. You know that it was clear enough the first time he explained it that you felt comfortable signing the agreement, but now you’re needing to look at some portions of it again.

So, now you’re faced with the second question. But, surprisingly, the answer to that one can be a confident, “Yes!” because we’re going to take each part of a standard franchise agreement and break it down.

There will be differences in every franchise agreement, so some things covered in this article may not be in your agreement, and we may not cover some things that do appear in your agreement. For those situations, you will need to contact your franchise attorney again.

Franchise agreements may be divided into Chapters and Articles, or they may use other terms to express changes in subject matter. For purposes of this article, we are going to refer to subject topics as Chapters and Articles.

The title page will most likely be the first chapter. The top portion will consist of identifying information on the franchisor and franchisee, and possibly the territory in which the franchise operates. From there, the body of the title page will define the type of business and will re-state the business name.

The rest of the paragraphs will most likely spell out different items that concern both the franchisor and franchisee. These can include such things as recognition of the advantages of the franchise, the importance of maintaining the franchise’s reputation, and other things.

Article numbers will delineate different topics that fall under the subject matter addressed by Chapter 1. If necessary, subsections will be used (example: Article 1.01, Article 1.02, etc.).

Article topics may include License and System, with subheadings such as License Grant, Location and Territory, or similar titles. Each section will deal with matters pertinent to the section’s title.

For instance, the License Grant section will explain whether or not the license to operate the franchise is exclusive or non-exclusive, and will state for how long the License Grant is applicable. From there, this and other sections may pertain to matters involving location and territory, as well as other information.

One section, in Article 1 or another article, will define the meaning of the term “licensed business” and will explain again the type of service provided by the business. Subsequent sections, which may immediately follow the one which introduces the subject matter pertaining to “licensed business” will outline the franchisor’s rights and privileges in regards to that particular topic, as well as the responsibilities of the franchisee.

An article in the franchise agreement, along with its relevant subsections, will address the franchise fee(s) and advertising. The amount of the initial fee, royalty fees, national marketing fee, and any other applicable fees, and when each fee is to be paid, is included, as well as information on how or whether those fees will be used for advertising expenditures.

A section in the franchise fee article, or another article itself may be included explaining when, where, and how a grand opening will be held for the new franchise.At least one article and its subsections will deal with business records and reports, which ones are necessary, penalties for failure to make such reports, and audit and inspection rights of the franchisor.

Articles covering training, trade secrets and/or confidentiality issues, the franchisee’s pre-opening obligations (these may also deal with real estate issues) and other issues pertaining to the operation of the franchise may have also been included.

Use the article titles and subsection headings to find the one that you think fits your particular situation, and isolate that section by either copying the page(s) and highlighting the material or printing off that section only, if the document is in pdf or a similar format. Then, take time to read it carefully, making notes as you do so.

If you are still unsure of your position or responsibility as a franchisee, or still have questions, or if your situation was not covered in this article, then by all means consult with a franchise attorney. You may have to pay a consultation fee, but it is better to spend a little now than run the risk of having to spend a lot later.