Common Reasons for Business Ownership 

• Being in control of your own financial freedom.
• Create an asset for the future that can also be sold or passed down to your family.
• Opportunity to work with your family.
• Control of your time.
• Quality of life.
• Build wealth.
• Eliminate debt and achieve real cash flow.
• Build your dreams.
• Eliminate the threat of job loss.

Franchising – What’s It All About?

• Franchising is not a business or industry itself – it is a business strategy.
• Franchisor designs a strategy to penetrate and dominate a marketplace…
  • Knowledge
  • Training
  • Software
  • Databases
  • Analytics.
• Leverage the resources of stakeholders who have similar goals and a unified way of thinking.
• Strategic partnership.

Elements of a Franchise

• Brand – it’s more than a name… it is the representation associated with the products or services delivered in a memorable and satisfying experience.
• Operating System – a world-class institutionalized service delivered in a memorable experience so it can be done over and over again from unit to unit in a consistent manner.
• Support System– what empowers a Franchisee to become better and better at delivering a memorable experience and drastically improve overall performance.
• Franchisee – the individual business owner who represents the Brand in their town.

Value of Systems in a Franchise

• Reduced Risk – Proof of success is in place
• Operating System – Success Formula has been established for you
• You don’t have to re-create the wheel – or many wheels
• Other Franchisees with their ‘feet on the street’ – emulate the best advice & support from the Franchisor – position of experience
• Collaboration – Share best and worst practices with similar people
• Systems continually adjusted, changed, & improved
• Training systems
• Sales & marketing strategies and systems
• Manuals & other documentation
• Letters, contracts, agreements, documents – all in place
• Development costs – shared resources
• Purchasing power

Entry to a Franchise System

• Franchise Fee
  • The Franchise Fee is the cost of putting the Franchisee into the business of the Franchisor, not as a partner, but as a participant.
  • Access to all of the Franchisor’s systems
• Royalty Fee
  • The Franchisor’s share of the customer’s money generated by each Franchisee using the Franchisor’s systems
  • The oil that makes the engine run
• Advertising & Marketing Fee
  • Used to build Brand presence to benefit all members
  • Advertising campaigns, marketing campaigns, co-op programs, Search Engine Optimization, Creative Artwork, collateral development costs, etc.

Evaluation – Making an Informed Decision

• System of discovery – two-way exchange of information
• Step-by-step qualification system should be in place
• Open & honest exchange of information
• 30 – 120 days to complete the due diligence process
• Should never feel pressure to move too quickly, yet the information you need must be accessible – usually on a schedule set out by the Franchisor
• Includes open access to all Franchisees in the system
• The goal is to feel comfortable to make an informed decision about becoming Strategic-Partners

Franchisor Disclosure – Get All of the Pertinent Information

• Exchange information on a fair and equitable basis
• Formal Disclosure Documents
• No decisions – documents for 14 days
• Cooling off period – final documents for 7 days
• Full disclosure of all Franchisees
• Financial performance data

Important Consideration – Exit Strategy

• How will the business be valued at time of exit?
• Do the customers/clients carry an ongoing future cash flow value?
• How will the value be affected by changing demographic conditions?
• How will the value be affected by changing competitive environment?
• Franchisors help with resale?

Facing the Fears – Realizing the Dream

• The fear of change, failure and the unknown are perfectly natural.
• Naysayers are everywhere, and we call them the “fire hose brigade”.
• Listen to advisers, but continue to trust yourself no matter what.
• Face it, feel it and blast past it.
• There isn’t a “perfect time” where all the stars align..
  • Opportunity,  financial resources,  market conditions and demographics.