SO, WHAT EXACTLY IS FRANCHISING?

By fmopblog | Published: June 21, 2011

 

  

We all use products or services from franchised businesses every day, from the sub sandwich we eat to the maids that clean our homes. But what is franchising? Simply stated, franchising is an expansion strategy for a business that has a unique product, service or way to do business. The franchisor develops trademarks that are unique to their business so that they can increase their brand awareness. The franchisor recruits qualified individuals to invest, own and operate the franchised business in their area. The franchisee is awarded the right to use the operating methods of the franchise. Training and support is provided so regardless of the market, customers receive a similar product, service or experience. The franchisor receives a royalty from the franchisee and the franchisee keeps the profits of the business. The entire relationship is legally binding by a contract called a “franchise agreement”.

Franchises are everywhere and can be seen in strip malls (food, pack and ships stores, tutoring franchises), office buildings (answering service franchises, business consulting) and even being operated out of franchisees’ homes (service franchises such as floor refinishing, furniture repair, pet services).

Franchising continues to expand as franchisors award franchises to qualified people who want to join their franchise system. Just how does a company become a franchise? Here are the steps most franchisors go through before you even hear of the company.

 

Franchising comes after a start-up business experiences success. They’ve learned what works and what doesn’t, made adjustments, tried a variety of strategies, tested and re-tested. Finally they have documented results and a system in place and want to grow.

 

More adjustments are made as a few franchises are awarded and opened, usually in a small number of test areas.

 

With data coming from a variety of sources, the business can determine what type of marketing works and in what areas. Are customer expectations being met? Word of mouth will make or break any business concept so the franchisor solicits feedback from franchisees customers to ensure quality throughout the system.

 

Once everything is working well, major expansion of the franchise concept begins. A good franchisor will offer continuing support and training to franchisees, putting as much time into keeping the business on track as they do into growing it.Franchisors provide a safety net for their franchisees: a tried and proven concept with operations, marketing, distribution, accounting, technical support, brand, etc. all in place, tested, retested and ready for a sharp, hard working entrepreneur to join the team.

There are other advantages of franchise ownership beyond having all the systems set up for you. Most franchise businesses will allow someone with little experience in a particular arena to learn new skills, and to build a thriving business using the system provided by the franchise company.

 

 for more infor visit our website

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Increase Your Odds for Success

By fmopblog | Published: June 20, 2011

Increase Your Odds for Success!

Window Genie Window Cleaning Franchise According to the U.S. Commerce Department, only 62% of independent businesses make it through the first year versus 96% of franchises. Surprisingly, a recent Gallop Poll found that after 5 years only 23% of independent businesses are still left, compared with an astounding 94% of franchise businesses. Franchise buyers are following a blueprint to pattern their business from. They are able to visit and observe a franchise business in operation. They also benefit from volume buying, customized programs and down the road, have access to information regarding industry trends and changes.

A franchise with a proven operating history is more likely to succeed than an independent business. Franchises have many benefits such as:

  1. High Success Rates
  2. Proven Techniques & Ideas
  3. Franchise Name Recognition
  4. Training & Technical Assistance
  5. Marketing & Advertising Support
  6. Trademarks, Patents & Designs
  7. Networking with other Franchise Owners
visit us at www.franchisemart-overlandpark.com

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The 5 Keys to Selecting a Franchise Opportunity

By fmopblog | Published: June 1, 2011

My friend George Vodin the CEO of Fancy Art Franchising sent me his list of the five key considerations in selecting a franchise opportunity.

1) Find something that is interesting and motivating. There are franchises in almost every field and if you enjoy what you are doing, you will do it better and be more productive; it won’t seem like work and you will be building a legacy for yourself and your family.

2) Look for a big market with broad appeal, but not an industry that is over developed with outlets on every busy intersection, where you will get lost in the crowd or be at a competitive disadvantage.

3) Can you make money? It is not just how much money you make, but how much you keep that counts. In any business, you either have to do a high volume or have a high profit margin; preferably both and then weigh that against your overhead costs. Only you can assess the franchises potential in your market area; your accountant, lawyer and brother-in-law will give you their advice, but you have to live with the decision.

4) What makes this franchise different?  (Point of Differentiation) What gives this product or service an advantage; what sets it apart from the competition, so that it will stand out from the crowd.

 
5) Consider the products staying power: Will it endure and have constant demand or is it the next big bubble ready to burst? In our fast paced economy fads come and go, while other products and services become obsolete. Be sure it will stand the test of time.

Visit the Fancy Art N.F.P. website by clicking here.

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Discovery Day

By fmopblog | Published: May 19, 2011

I believe that most of my clients are attracted to franchising because they want to better their odds of being successful in business.  The well organized nature of the franchise industry helps contribute to that success.  The operations and marketing of a franchised business is not the only well-organized portion of most companies. 

 The qualification process for a franchisee is systematic and includes a number of common steps for every franchise.  I written about the importance of following those steps in the past, to ensure that you are a good fit for your franchise and it is a good fit for you.  One of the most important parts of buying a franchise is the step most franchisors call “Discovery Day.”  Sometimes it’s called “Conformation Day,” “Decision Day” or “Introduction;” no matter the name, the purpose is to ensure the franchise candidate is fully informed regarding the requirements and operating systems of the franchise.   Once this day is completed the franchisor believes the candidate has enough information to make an informed decision.   Some franchisors have done their due diligence regarding the candidate before the discovery day and some wait until after to begin the process of background checks.

I have personally participated in 100’s of discovery days while I worked for Midas International, Prudential Real Estate Affiliates and Mobil Oil.  And of course I participated in one as a prospective franchisee.  It was just over two years ago that June and I flew to West Palm Beach to review the FranchiseMart franchise.

With all of that experience behind me, I had a new discovery day experience this week.  One of my franchisors flew out to KC over the weekend and held a discovery day in the conference room of my FranchiseMart.  I set in on most of the day and really enjoying getting to see the process from a new vantage point.   We “Skyed” (I don’t know if that’s a real verb – but I’m guessing you know what I mean.) with the home office and got to talk to all  of the key people and had a great look at the inside working of the franchise. 

The discovery day, was similar to ones I had participated – a lot of good information and a little bit of the feeling of being exhausted at the end of the day.  I imagine that a lot of the franchisors will be using these remote discovery days, which help save the franchise both time and money.

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What Should You Look For When Considering a Business to Purchase?

By fmopblog | Published: May 9, 2011

What Should You Look For When Considering a Business to Purchase? Unfortunately, too many prospective buyers want to know the asking price first and then how much money can they make.  While these are important questions; these are the wrong questions to ask initially. You need to know how much cash the seller requires as a down payment. (or how much you need to put down on a new franchise)  There is no point in looking at a business no matter how good the numbers are if the seller wants three times as much cash as you are willing to invest.

Remember the actual amount of money a business earns is usually much more than just the bottom line. A smart approach is to get more information on the business, and even make a visit, before ruling it out or getting too involved in the numbers. It’s all part of the learning process.

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Entrepreneurship in America at 15-year high

By fmopblog | Published: March 9, 2011

Entrepreneurship in America is at a 15-year high according to a study released yesterday by the Kauffman Foundation.  On average 565,000, new businesses were created each month last year.  Interestingly, the largest entrepreneurial activity rate was among Latinos, followed by Asians.  African-American and non-Latino white entrepreneurial activity rates decreased a very small amount last year.  Immigrants were twice as likely to start a new business as native born and a large percentage of the new business created were for hands on owner operated, without employees.

If you’d like to read the full report click here; if you like to become part of that trend click here and I’ll help guide you on the journey of business ownership. 

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Franchise Business Economic Outlook: 2011

By fmopblog | Published: March 8, 2011

The forecast for the franchise industry for 2011 looks great.  PwC (the company formerly known as PricewaterhouseCoopers) recently prepared the “Franchise Business Economic Outlook: 2011” for The International Franchise Association Educational Foundation.  The predictions for this year are very strong and encouraging for those of us in the franchising industry. 

PwC projects faster growth in establishments, employment and economic output in every franchise sector except in real estate franchising.  Franchise revenues are projected at 4.7% growth, and would be much higher if the real estate franchising industry wasn’t flat.  Franchised businesses are expected to have a growth rate about 33% better than last year and about a 50% better growth rate than non-franchised business. 

If you are interested in taking advantage of this positive trend, contact me at 913 888-1400 or visit my website to set an appointment.

The full PwC report is available here.

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Focus On One Idea At A Time

By fmopblog | Published: February 25, 2011

I attended a presentation this morning by David Wanamaker of Cumulus Radio on his company.  One of the items he passed out was a paper titled “Simple Tips for Creating Effective Ads.”  He had a number of great tips; the first one is to “focus on one idea.”  Sometimes I find that difficult because I have so many different things I want to convey in my advertising.  Should I focus on the fact that I’m full service?  Should focus on my free service, my 200 different opportunities, and the fact that we help businesses transform themselves into franchisors or should I focus on the business brokerage portion of FranchiseMart?  That’s a tough question for me.

When a new client comes to FranchiseMart I usually encourage them to limit their serious franchise consideration to 2 opportunities at a time.  I’ve found that the clients who walk out the door with more than 3 to consider tend to “shut down” because of information overload.  The normal process of franchise investigation for my clients is as follows:

  • First the franchisor calls and sets up an appointment to have a phone conversation with the client.
  • The prospective franchisee and the franchisor have a 45 minute conversation.
  • The franchisor sends the prospective franchisee the Federal Disclosure Document and other marketing material.
  • The prospective franchisee reads all the material.
  • Another phone call with the franchisor to answer questions and maybe a webinar.
  • The prospective franchisee calls a representative sample of current franchisees.
  • The prospective franchisee may attend a discovery day/ decision day at the corporate headquarters.
At this point the prospective franchisee is ready to make an informed decision.  If a person is researching multiple franchises at the same time it is easy to see how time consuming this process can become.  For that reason I always suggest only focusing on 2 opportunities at a time. 

Visit my website.

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The eleven resolutions you need to make in 2011 if you want to get into business for yourself:

By fmopblog | Published: January 17, 2011

The eleven resolutions you need to make in 2011 if you want to get into business for yourself:

11.  Raise your credit rating to at least 760

10.  Save some working capital, usually between 3 and 6 months of expenses.

9.  Complete a self assessment of your skills, likes and dislikes.

8.   Establish your timeline for getting into business for yourself.

7.  Review the various business models available.

6.  Determine if you’d prefer to start researching established businesses for sale or new franchise opportunities.

5.  Develop a personal budget to ensure you understand your financial requirements once in business.

4.  Determine your business type preference; home-based, retail, food, shared office space, business to business or business to consumer.

3.  Resolve to completely investigate each opportunity you identify.

2.  Ensure you have the support of your spouse, or other important persons in your decision.

1.  Remember that FranchiseMart can help you with most of the above items.  Make an appointment to talk to us today.

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Is Franchising Right For You?

By fmopblog | Published: January 5, 2011

Going into business for yourself and controlling your own destiny is a “gut-check” for everyone who has ever taken that step.  There is a lot to consider.  High on the list is answering the question, “Is Franchising Right for Me?”

 That is an important question and you should consider the following benefits of franchising.

1.    You are not alone in starting, running and growing your new business. The franchisor, the company that you are joining forces with, is contractually bound to help you with these aspects of your new business. The franchisor has already gone through the learning curve of starting this business model, so that you don’t have to. This saves you time, money, and aggravation while avoiding the mistakes that are common when starting a business from scratch.

2.    With franchising you have existing franchisees to speak to about their experience before you join. With the proper guidance you can really leverage their overall experience and gain valuable insight before you join their system.

3.    You will also get tested and refined marketing plans, sales materials, and business planning assistance. You’ll be relying on the franchisor’s past mistakes, lessons learned, and their overall successes. Their failures and successes have been studied and processes have been put in place with these experiences in mind.

4.    Name recognition and a loyal customer base may also come with your new franchised business. Larger franchise systems often have millions of customers who already know what your products and services are. In many cases your local customers are already sold on what you have to offer and can’t wait to patronize your business.

5.    Since the franchisor negotiates on behalf of all the franchisees, you should expect to have reduced expenses on the products you offer. Simply put, the franchisor is in a great position to negotiate better terms and receive volume discounts than you could expect as an individual.

The benefits of franchising are numerous and I’m here to help you find the right franchise based on your needs. My services will never add a single expense to your franchise purchase and I often can save clients time, money, and aggravation.

I look forward to using my years of experience to assist you in your search to find the right franchise opportunity.

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