Tag : Franchising

Canadian Franchise Association, franchising your business.#Franchising #your #business


franchising your business

Franchising your business

Do You Own a Business that Can Be Franchised?

Franchising allows smaller companies to effectively compete with larger competitors. As a growth strategy, franchising provides you with the ability to gain market share by increasing your points of distribution (your units). Compared to other business expansion models, franchising allows you to expand faster with minimal capital, as investment at the unit level is covered by your franchisees. Your brand’s growth won’t be limited to one or two cities franchising offers the opportunity to have multiple units throughout the world.

In order to franchise your business, you must have a successful business concept/prototype as well as be able to demonstrate that it can be replicated. Often times, the success of a business can be dependent upon its location or the staff. The fundamental principal for the success of a franchise is its ability to replicate its success.

Once these fundamentals are covered, you must determine initial franchise fees, royalties and advertising fund fees. In addition, you will need to develop several documents including your operation manual, franchise agreement, disclosure documents, training materials and more.

Get the best help possible

When franchising your business, it’s important to have the expert support of professionals who specialize in franchising. These franchise support services include:

Experts in franchising who can lead you, step by step, through the process of franchising your business.

Lawyers who specialize in franchising will be able to advise you of any legal requirements as well as assist you in developing your franchise agreement and disclosure documents.

Financial experts will help you develop a financial model that includes cash flow projections and your royalty structure. They will also analyze your business to determine if the projected revenues will be sufficient to provide a profit for your franchisees and a royalty for you.

As specialists in marketing a franchise system, marketing consultants can help you develop your brand through a marketing plan, which details how you will expand your system and introduce your brand in new markets through advertising.

Prepare yourself for success

Attending CFA’s How to Franchise Your Business seminar will give you the knowledge and tools you’ll need to get started successfully. This unique, one-day session covers valuable, up-to-date information on franchising a business and provides the opportunity to speak with expert session leaders and receive free legal and financial advice. To complement your learning from the seminar, you will also receive a complimentary Resource Package designed to help you build your franchise.

Seminar topics often include:

  • How to attract the best franchisees
  • Strategies for marketing to potential franchisees
  • Legal aspects in franchising and how to avoid the pitfalls
  • How to finance the start up of your franchise system
  • Tips and advice from successful franchisors

Franchising your business



Franchising to expand your – business, franchising your business.#Franchising #your #business


Franchising to expand your business

September 5, 2017

Franchising your business

Turning your business into a franchise could enable fast expansion more economically than setting up branches. Figures from industry body, the British Franchise Association, show there were more than 901 franchisor brands in the UK in 2015 and 44,200 franchise outlets.

However, many business owners know little about franchising and they may be missing growth opportunities as a result.

Essentially, franchising allows you to increase your number of branches, but with part of the investment provided by their operators – your franchisees.

Peter Crolla chose franchising when he wanted to expand the family ice cream business. He tested the concept by running two pilot franchise outlets in Glasgow and 2016 decided to launch the Crolla’s Gelateria franchise.

“It took about six months to prepare for the launch, including creating a franchise management team and drawing up the franchise agreements, operations manuals and systems,” he says.

It cost around £60,000 to £70,000, but Mr Crolla says: “It is a lower-cost option than expanding through branches, because the franchisees fund their outlet fit-out, which is £150,000 to £200,000.”

It can also be faster than opening branches. Crolla’s already has two franchised outlets in Glasgow, others in Edinburgh and Aberdeen, and Mr Crolla expects to have eight by the end of the first quarter of 2018.

But not all businesses are suitable for franchising.

Suzie McCafferty, founder of franchise consultancy Platinum Wave, says: “Your underlying business must be successful, as you will be asking your franchisees to invest in it. If you cannot make a success of it, why assume they can?”

Your business must be proven to work, which is why you should run a pilot franchise. The business must be capable of being replicated in different locations and franchisees should be capable of learning your basic business methods fairly quickly.

A business that depends on your personal specialist knowledge, experience and contacts or requires qualifications which take years to acquire is unlikely to be suitable.

Franchising your business

Can you afford it?

While franchising involves using your franchisees’ money to expand your business, it still requires a significant investment from you.

Chris Roberts, director of Franchise Finance, which arranges finance for franchisors and franchisees, says: “You face the cost of creating the franchise business, including a feasibility study, franchise development plan, operations manual, financial projections, recruitment plan and more.

“Assuming you use qualified professionals to help you, it will probably cost around £30,000 to £40,000.”

It is also advisable to run at least one pilot franchise. “You need not do this, but banks are unlikely to lend to your franchisees if your model has not been tested and proven viable,” says Mr Roberts. The cost of running the pilot will vary according to set-up costs and working capital required.

In addition, you will need working capital to keep your business afloat until sufficient royalties start coming in from successful franchisees. “The additional working capital is likely to exceed the £30,000 to £40,000 initial set-up cost of the franchise,” says Mr Roberts.

“If you want to borrow to fund the transformation to a franchise, the maximum amount you can access is 50 per cent of the total cost, and you will need to demonstrate a robust and professionally produced business plan.”

Expect to be asked for personal guarantees backed by security, such as a charge on your home.

When your business becomes a franchise, your role will change dramatically from independent business owner to franchisor

Going the franchise route also involves a degree of risk to your business, so legal protection is essential. “A legal agreement protects your business systems, products, brand and processes, so you can control your franchisees and ensure they follow your systems, standards and rules,” says Jane Masih, franchise specialist at solicitors Owen White.

“A basic set of legal agreements and advice for turning a small business into a franchise typically costs £4,000 to £5,000,” says Ms Masih.

It also pays to hire an experienced franchise manager to run the franchised arm of your business. While you may know a great deal about your company’s product or service, running a franchise is a specialist skill, which a limited number of people have. “Look for a manager with the Qualified Finance Professional qualification and a track record of success,” says Mr Roberts.

So when should you get started on a franchise project? Ms McCafferty says: “Your business must be ready, but so must you. When your business becomes a franchise, your role will change dramatically from independent business owner to franchisor. Are you ready to stop doing what you love?”

Franchising your business



Franchise Association of New Zealand – Franchising Your Business, franchising your business.#Franchising

Franchising Your Business

Franchising as a method of doing business has many of the qualities sought by leading businesses. In fact, many conglomerates have adopted franchising as a means of managing risk.

Advantages for franchising

  • Franchising reduces personnel requirements – each outlet is a self-contained business. The franchisor receives regular reports from the franchisees, and supplies support as required.
  • Franchising is a knowledge-based business – franchising requires businesses to capture their specialist knowledge within franchise manuals. By documenting their specialist knowledge, franchisors have not only defined their intellectual property, but they can also realise its value by licensing the intellectual property to franchisees.
  • Franchising is a synergistic network of enterprises – franchising allows individuals dispersed over a wide geographical region to pursue common goals. By co-ordinating purchasing, accounting and marketing procedures, franchising allows small businesses to enjoy the benefits normally only realised by large conglomerates.

Franchising offers many advantages over other business systems

  • Growth using other people’s capital and time.
  • Freedom to focus on central business processes while the franchisees focus on day-to-day operations
  • Reduced staff to manage the central business process
  • Reduced exposure to risk during the expansion phase by having franchisees carry a large proportion of risk associated with opening new outlets.
  • Ability to penetrate the market rapidly before competitors gain footholds.
  • Owner-operators consistently out perform managers.
  • Secured outlets for the franchisor’s range of products or services
  • High earning ratio on capital outlay.

Extract taken from the NZ Franchisor Guide 3rd Edition, written for the Franchise Association by Franchize Consultants and published in January 2009.



International Franchise Expo Workshop 2, FRANCHISING YOUR BUSINESS, franchising your business.#Franchising #your

franchising your business

sponsored by: Franchising your business Franchising your business

Franchising has become the dominant method for the creation of wealth through small business ownership. Franchising, once known primarily for restaurants, today is used by over 85 industries including a wide range of consumer and business to business services, retail, hospitality, health, recreation and many more. This two day workshop will explain how to turn your business into a successful franchise.

All workshop attendees receive admission to the exhibits on all three days.

Starts Friday, June 1, 2018 2:00 PM – 5:00 PM

Continues Saturday, June 2, 2018 10:00 AM – 1:30 PM

Rates

Advance: $280 includes exhibit hall admission and seminars

On-Site: $330 includes exhibit hall admission and seminars

CFE Accreditation

Franchising your businessIndividuals enrolled in the Certified Franchise Executives program will earn 200 education credits towards completion or recertification of the Certified Franchise Executive (CFE) designation by attending Franchising Your Business. For more information about the Certified Franchise Executives program, please call or email Rose DuPont (202-662-0771 — [email protected]) or visit www.franchise.org/certification.aspx.

Who Should Attend

Anyone looking to grow their business or seeking information on the use, benefits and risks associated with an indirect method of distribution such as franchising.

Over Two Days, This Workshop Will Look At

  • The difference between licensing and franchising and when each is appropriate
  • Franchise Feasibility – is franchising the correct expansion strategy for your company
  • The benefits and risks of franchising your business
  • Characteristics of a strong franchisor organization
  • Tactical Business Planning – the design, development and implementation of a franchising strategy

– Determining the core drivers of your business and setting standards

– Identifying the roles and responsibilities of the franchisor and franchisee

– Determining the proper fee structure

– Creating a positive relationship with franchisees

– Brand development and advertising requirements

– Ensuring the legal documents reflect the business strategy

  • The financial implications of developing a franchise system including:

    – cost of development and anticipated return on investment for the company

    – Organizational requirements – headquarters and field

  • Managing Expansion Strategies – Understand when and how to use:

    – Single Unit Franchising

    – Area Development and Multi-Unit Franchising

    – Area Representative Franchising

    – Company Owned and Franchisee Owned locations in the same market

  • Operation manuals and training programs – what they should contain, how they can be used to manage change, and risky issues you should consider when creating manual and training program content. The use of web based training and operating manuals in franchise systems
  • Technology – the use of technology in the support and expansion of the franchise system
  • Growing the business – how to develop and manage a franchise system growth strategy that meets the system’s expansion goals, earnings expectations and attracts the types of franchisees that are best suited for the franchise system
  • Retro-franchising – using franchising as a new or replacement method of distribution for established companies and for companies seeking an innovative re-organization, re-capitalization or tactical change strategy
  • Financing your growth and planning your exit strategy
  • The Law – Understanding the Federal and State Disclosure requirements, relationship laws, trademarks, service marks and trade dress and other regulations that impact franchise system on a day to day basis
  • Franchising your businessMichael Seid is the founder and Managing Director of Michael H.Seid & Associates (MSA), a domestic and international franchise advisory firm. He has over 25 years experience as a Senior Operations and Financial Executive or Consultant for companies within the franchise, retail, restaurant, hospitality and service industries as well as having been a franchisee. MSA is a member of the IFA’s Supplier Forum (SF). Michael serves on the SF’s Board of Directors as a Past Chairman. He is a member of the Board of Directors of the IFA, the first and only time in the association’s history that a professional services provider has been elected to the board. Together with the late Dave Thomas, Founder of Wendy’s, Michael is co-author of Franchising For Dummies. Michael lectures and writes frequently in the US and internationally on franchising.

    Franchising your businessKay Ainsley is a Managing Director of Michael H. Seid & Associates, LLC, a domestic and international franchise advisory firm. She has over 25 years of experience in franchising as Director of Franchise Development for major franchise systems or as an advisor to companies within the retail, restaurant, services, manufacturing, and business to business sectors. Kay currently serves on the Board of the IFA’s Supplier Forum and is a member of the Glomak Committee, the international marketing arm of the IFA. She is also on the Advisory Board of the National Franchise Mediation Program of the Center for Dispute Resolution which promotes mediation in settling disputes in franchising.

    Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business Franchising your business

    franchise expo shows. Produced and Managed by MFV Expositions 210 Rt. 4 East, Suite 204, Paramus, NJ 07652. Tel: (201) 226-1130



    Franchising to expand your – business, franchising your business.#Franchising #your #business


    Franchising to expand your business

    September 5, 2017

    Franchising your business

    Turning your business into a franchise could enable fast expansion more economically than setting up branches. Figures from industry body, the British Franchise Association, show there were more than 901 franchisor brands in the UK in 2015 and 44,200 franchise outlets.

    However, many business owners know little about franchising and they may be missing growth opportunities as a result.

    Essentially, franchising allows you to increase your number of branches, but with part of the investment provided by their operators – your franchisees.

    Peter Crolla chose franchising when he wanted to expand the family ice cream business. He tested the concept by running two pilot franchise outlets in Glasgow and 2016 decided to launch the Crolla’s Gelateria franchise.

    “It took about six months to prepare for the launch, including creating a franchise management team and drawing up the franchise agreements, operations manuals and systems,” he says.

    It cost around £60,000 to £70,000, but Mr Crolla says: “It is a lower-cost option than expanding through branches, because the franchisees fund their outlet fit-out, which is £150,000 to £200,000.”

    It can also be faster than opening branches. Crolla’s already has two franchised outlets in Glasgow, others in Edinburgh and Aberdeen, and Mr Crolla expects to have eight by the end of the first quarter of 2018.

    But not all businesses are suitable for franchising.

    Suzie McCafferty, founder of franchise consultancy Platinum Wave, says: “Your underlying business must be successful, as you will be asking your franchisees to invest in it. If you cannot make a success of it, why assume they can?”

    Your business must be proven to work, which is why you should run a pilot franchise. The business must be capable of being replicated in different locations and franchisees should be capable of learning your basic business methods fairly quickly.

    A business that depends on your personal specialist knowledge, experience and contacts or requires qualifications which take years to acquire is unlikely to be suitable.

    Franchising your business

    Can you afford it?

    While franchising involves using your franchisees’ money to expand your business, it still requires a significant investment from you.

    Chris Roberts, director of Franchise Finance, which arranges finance for franchisors and franchisees, says: “You face the cost of creating the franchise business, including a feasibility study, franchise development plan, operations manual, financial projections, recruitment plan and more.

    “Assuming you use qualified professionals to help you, it will probably cost around £30,000 to £40,000.”

    It is also advisable to run at least one pilot franchise. “You need not do this, but banks are unlikely to lend to your franchisees if your model has not been tested and proven viable,” says Mr Roberts. The cost of running the pilot will vary according to set-up costs and working capital required.

    In addition, you will need working capital to keep your business afloat until sufficient royalties start coming in from successful franchisees. “The additional working capital is likely to exceed the £30,000 to £40,000 initial set-up cost of the franchise,” says Mr Roberts.

    “If you want to borrow to fund the transformation to a franchise, the maximum amount you can access is 50 per cent of the total cost, and you will need to demonstrate a robust and professionally produced business plan.”

    Expect to be asked for personal guarantees backed by security, such as a charge on your home.

    When your business becomes a franchise, your role will change dramatically from independent business owner to franchisor

    Going the franchise route also involves a degree of risk to your business, so legal protection is essential. “A legal agreement protects your business systems, products, brand and processes, so you can control your franchisees and ensure they follow your systems, standards and rules,” says Jane Masih, franchise specialist at solicitors Owen White.

    “A basic set of legal agreements and advice for turning a small business into a franchise typically costs £4,000 to £5,000,” says Ms Masih.

    It also pays to hire an experienced franchise manager to run the franchised arm of your business. While you may know a great deal about your company’s product or service, running a franchise is a specialist skill, which a limited number of people have. “Look for a manager with the Qualified Finance Professional qualification and a track record of success,” says Mr Roberts.

    So when should you get started on a franchise project? Ms McCafferty says: “Your business must be ready, but so must you. When your business becomes a franchise, your role will change dramatically from independent business owner to franchisor. Are you ready to stop doing what you love?”

    Franchising your business



    Be Franchising, franchising your business.#Franchising #your #business


    franchising your business

    Franchising your business

    Make Franchising Your Business

    Whether you are looking to buy a franchise or expand your business through franchising, Be Franchising can help. Read More

    Franchising your business

    When tomorrow’s too late, Pronto delivers today. Owned by Dragon’s Den star, Hilary Devey. Read More

    Franchising your business

    Healthy Alternatives that Taste Great

    Unique food drinks products for the rapidly growing “free from” market. Gluten, Dairy, Nut and Lactose Free. Opportunities Worldwide! Read More

    Franchising your business

    Interscreens operates in the huge automotive glass industry offering an exceptional opportunity for ‘hands-on’ franchisees to build a lucrative and valuable business. Read More

    Repair Replacement Automotive Glass Franchise

    Franchising your business

    Eco-Mist Biotechnics range of eco-friendly, safe to handle but lethal to bacteria range of biocides, eliminate 99.9999% of all known pathogens. Utilising unique UK invented and developed technology. Read More

    Franchising your business

    Your brand could be global with our help. Master Franchising offers local businesses global potential. Read More

    Franchising your business

    The global market place is crying out for high quality brands and concepts. Could your business be one of them?

    Franchising your business

    Can I franchise my business?

    There are over 920 franchised brands in the UK. Find out if your business could join them.

    Franchising your business

    We’re very proud of the businesses we have supported. Take a look at a few examples from our client portfolio.

    Franchising your business

    Find out the latest trends, facts and new developments in the franchise industry. Sign up to our free newsletter here.

    Welcome to Be Franchising

    Be Franchising is a franchise specialist company operating in the North East of the UK, providing expert, help, guidance, training and support to individuals and companies looking to use franchising as part of their business solution.

    The team is made up almost entirely of franchise professionals with experience in all aspects of operating ethical franchise systems. Whether you need help in assessing, selecting or operating a franchise business or want assistance to develop your current business using a franchise model, Be Franchising has the people, knowledge and support to help you achieve your aims. If you want expert advice, guidance and practical support on any franchising matter, contact us today.

    Franchising your business



    Franchising Your Business #business #cards #design


    #franchising your business

    #

    Franchising Your Business

    Franchising is an exciting marketing method. Properly structured and well run it provides benefits and satisfaction for both parties. However, it is not an easy ‘route to riches’ for franchisor or franchisee, nor is it a panacea for the ills of a ‘sick’ business.

    Establishing a franchise has to be undertaken with skill, patience and capital.

    The time scale for establishing a franchise system and preparing it for marketing can be as long as three years and it can take another three to five years before the franchisor begins to see net profits and cash flow.

    The capital requirements of the franchisor have to reflect these time spans. However, once the network moves into net profit and achieves relative maturity, the return should make the effort and investment worthwhile.

    Guidelines

    Why consider Franchising your business?

    The advantages of franchising for a franchisor may be summarised as:

    • The growth of the network is achieved using the financial and manpower resources of the franchisee
    • The franchisor is not concerned with the day to day operation of each outlet
    • The franchisor’s organisation is compact and can earn profits without involvement of high capital risk
    • The network has an ability to grow rapidly
    • The franchisor has fewer staff and fewer staff challenges
    • The management of each outlet is the owner who will tend to be well motivated to be successful
    • It provides wider and secured outlets for products and services
    • It enables the franchisor to service national customers using their network of outlets

    Points to consider prior to Franchising

    Franchising your business can be a very successful way of expanding. Some of today’s largest businesses have used franchising to finance and accelerate their growth into global brands. However, franchising must be planned properly:

    • It must be pilot tested with company-owned and operated outlets
    • Business must be successful, distinctive and replicable
    • Take proper professional advice – Solicitor, Banker, Accountant and possibly a Franchise Consultant
    • The Franchise Agreement must be written by an experienced Franchise Solicitor
    • Take time to write an operations manual
    • Choose franchisees very carefully and slowly
    • Avoid overselling and forecasts
    • Have first class training
    • Maintain good ongoing relationships
    • Focus on Franchisee satisfaction and profitability
    • Keep developing the Franchise and maintain standards
    • Ensure marketing, advertising and PR is first class

    As the most-franchised nation (per head of population) in the world, there is a very high level of awareness of franchising in Australia. As a result, the Franchise Council of Australia receives many inquiries from individuals and organisations who have existing businesses or who are developing business concepts and would like to establish these as franchise systems.

    This high level of interest, however, is not followed through by the number of new franchise systems which actually enter the market. The reason for this is simple. Establishing and testing a business concept is not as easy as some would believe, and furthermore, Australia now has some of the world’s most stringent franchising legislation which means there is little or no margin for error for “new” franchisors.

    Proving the Business Concept

    The average stand alone small business has an 80% chance of failure in its first five years of operation. Prior to franchising, a small business should operate for at least this time (and certainly no less then three years) to prove that it has a viable concept, ongoing market demand, replicable systems, and a management, logistic, marketing and training structure capable of supporting franchisees in a variety of locations. If not, the business may well become another statistic.

    During this period, it is highly desirable for the intending franchisor to open several outlets using their own capital in which they can test the adequacy of their systems, procedures, training, etc. The lessons learned during this phase will reap dividends after the successful commencement of franchise operations.

    Getting Proper Advice

    Experts who are skilled and experienced in franchising can give you competent advice relevant to your franchising plans. Be sure to seek out these specialists. Most are members of the Franchise Council of Australia, denoted with representation of our logo, and they are listed on the FCA website www.franchise.org.au under Buying a Franchise or at www.franchisebusiness.com.au .

    It is critical that intending franchisors get the right advice from the very start of their franchise journey and, in particular, that they have ensured all aspects of their intellectual property rights are protected prior to franchising.

    The Franchising Code of Conduct

    Implemented on July 1, 1998, the Franchising Code of Conduct provides the most stringent national regulations for franchising introduced anywhere in the world. The Code was primarily introduced to outline the rights and responsibilities of franchisors to franchisees including particular requirements for disclosure of information, the provision of a cooling-off period, and unconscionable conduct.

    Complying with the Code is mandatory, however registration with a central body, or “approval” is not required prior to the commencement of franchising. The Code is enforced by the Australian Competition and Consumer Commission and the penalties for breaching the Code are quite severe. Click here to find out more about the Franchising Code of Conduct.

    How can the FCA Help?

    Education:

    The establishment of the FCA Franchise Academy coincided with the introduction of nationally recognised qualifications in Franchising.

    In 2004 we developed Certificate and Diploma level courses in Franchising and we became the first educational institution to offer the Diploma of Business (Franchising).

    The FCA Franchise Academy offers a career path via industry specific education enabling individuals to pursue continuing professional development drawing upon the expertise experience of leaders within the sector.

    FCA Franchise Academy courses present up to date knowledge and relevant theory together with practical skills that can be applied immediately to your advantage in the workplace.

    Information on the Franchise Academy is available at www.franchiseacademy.org.au .

    Publications:

    The Franchise Council of Australia publish and market books on key aspects of franchise decision making, management and practices authored by acknowledged experts in their field.

    • Franchise Guide
    • Compiling a Franchise Operations Manual
    • How to Franchise Your Business: A Guide for Australian Entrepreneurs
    • Expanding Internationally: A Guide for Australian Franchise Systems
    • Profitable Partnerships
    • Franchisor’s Guide to Improving Field Visits
    • The Franchise E-Factor
    • What Great Retailers Do
    • Marketing Works

    For full details on these publications and more, please visit the FCA Bookshop .



    Top 4 Mistakes When Franchising Your Business #canadian #business


    #franchising your business

    #

    Top 4 Mistakes When Franchising Your Business

    Freelance Writer and editor, Self-employed

    Specializations: small business, entrepreneurship and human interest topics. Katie’s work has appeared in Hemispheres, USA Today, Consumers Digest, Crain’s Chicago Business and others. Read more of her work at www.katiemorell.com

    Michael S. Rosenthal has childhood issues relating to franchising. No, he isn t damaged by a bad experience; he s regretful of what could have been. Back in 1957, the same year as his birth, his father Harvey opened a hot dog joint on the north side of Chicago. One day, a man came in and asked Harvey to go into business with him, offering a restaurant concept at $5,000 per store that, the man said, would blanket the nation and make Harvey very rich.

    My Dad told him to get the hell out of his store, that there was no way he would pony up $5,000 that was a lot of money back then, says Rosenthal. That man was Ray Kroc, the founder of McDonalds. If only he had said yes, I wouldn t be working right now.

    Perhaps due to this story, Rosenthal has made it his life s work to save wannabe franchisors from bad decisions. Today he heads the franchise law practice at Wagner, Johnston Rosenthal in Atlanta, Georgia, and shares the top four biggest mistakes he sees every day.

    Mistake No. 1: Underestimating costs

    While franchising can make your company (and you) wildly successful, it can also sink you in a massive hole if you don t have enough money on the outset. Most startup costs go to legal representation and the drafting of regulatory documents, says Rosenthal. And regardless if your franchise is doing well or not, the Federal Trade Commission mandates you update them once per year.

    On the legal side, Rosenthal says costs can range from the low teens to the mid-20s. From there, you must file with your state s attorney general, which could cost you another $1,000 to $2,000. Then there are the accountant fees (franchised businesses must be audited once per year, even if you don t sell any units), which could ring you anywhere from $7,500 to $15,000. Gulp.

    How much are we talking here?

    I d say you should have somewhere in the high five figures, says Rosenthal. I ve had clients start with less, but it is rare. You really need to set aside legal and marketing money because things add up quicker than you think.

    Greg Archer learned this the hard way. As co-founder of Age Advantage. a San Diego, California-based company that provides in-home care to senior citizens, he and his wife began offering franchises in 2006, but stopped about 18 months later largely because of under capitalization. He says you need even more than five figures starting out.

    Being undercapitalized really inhibits growth ; I recommend starting with a minimum of $300,000 to $500,000, he says. As a new franchisor, there is no cash flow. You really don t make money on the sale of a franchise, you make your money on ongoing royalties.

    In addition to legal and regulatory fees, the Archers were strapped with sales and marketing costs, all which proved to be too much. In 2008, they reevaluated their business. Two years later another company bought out their original location, which freed them up to focus on franchising alone.

    Today, they are going to tradeshows and actively advertising. According to Archer, the company is on par to close about 15 more locations (they already have six) this year.

    Mistake No. 2: Confusing the roles of franchisor and business owner

    Rosenthal uses a barbecue restaurant as an example. As the business owner, it is your job to deliver mouth watering pulled pork; you do a great job and have legions of loyal customers. Pretty soon a potential business partner offers to open a franchise and you jump at the opportunity. It s an ace in the hole, right? Not exactly.

    You need to recognize that being a franchisor and a business owner are two different skill sets, says Rosenthal. You may be a great chef, but that doesn t mean you will be a great franchisor.

    Franchisors must be focused on finding and recruiting franchisees, says Rosenthal. Processes need to be put into place, manuals need to be written and franchisors need to invest time into training franchisees and lower level employees. These duties can take away from those related to owning your primary business.

    Also consider bringing in a franchise consultant to help you with the process. (Note: to find a consultant, check out the International Franchise Association .)

    Mistake No. 3: Lack of planning

    Planning is key to a successful franchised business. Before even considering the business model, make sure you have a detailed operations manual for your business that goes step by step through every process in your company and you ve talked to an attorney or franchise consultant, recommends Rosenthal.

    Don t just think that you can do it on the cheap and see how it goes, he says. Franchises take a lot of pre-planning.

    Mistake No. 4: Franchising too soon

    Just because your five-month-old Mexican restaurant is selling out every night doesn t mean it s time to think about franchising. Rosenthal suggests waiting three years before considering the business model.

    You need to have everything figured out, he says. No one is going to want to buy your franchise if you haven t worked the kinks out yet.



    Franchising Your Business #business #cards #free


    #franchising your business

    #

    Franchising Your Business

    Franchising is an exciting marketing method. Properly structured and well run it provides benefits and satisfaction for both parties. However, it is not an easy ‘route to riches’ for franchisor or franchisee, nor is it a panacea for the ills of a ‘sick’ business.

    Establishing a franchise has to be undertaken with skill, patience and capital.

    The time scale for establishing a franchise system and preparing it for marketing can be as long as three years and it can take another three to five years before the franchisor begins to see net profits and cash flow.

    The capital requirements of the franchisor have to reflect these time spans. However, once the network moves into net profit and achieves relative maturity, the return should make the effort and investment worthwhile.

    Guidelines

    Why consider Franchising your business?

    The advantages of franchising for a franchisor may be summarised as:

    • The growth of the network is achieved using the financial and manpower resources of the franchisee
    • The franchisor is not concerned with the day to day operation of each outlet
    • The franchisor’s organisation is compact and can earn profits without involvement of high capital risk
    • The network has an ability to grow rapidly
    • The franchisor has fewer staff and fewer staff challenges
    • The management of each outlet is the owner who will tend to be well motivated to be successful
    • It provides wider and secured outlets for products and services
    • It enables the franchisor to service national customers using their network of outlets

    Points to consider prior to Franchising

    Franchising your business can be a very successful way of expanding. Some of today’s largest businesses have used franchising to finance and accelerate their growth into global brands. However, franchising must be planned properly:

    • It must be pilot tested with company-owned and operated outlets
    • Business must be successful, distinctive and replicable
    • Take proper professional advice – Solicitor, Banker, Accountant and possibly a Franchise Consultant
    • The Franchise Agreement must be written by an experienced Franchise Solicitor
    • Take time to write an operations manual
    • Choose franchisees very carefully and slowly
    • Avoid overselling and forecasts
    • Have first class training
    • Maintain good ongoing relationships
    • Focus on Franchisee satisfaction and profitability
    • Keep developing the Franchise and maintain standards
    • Ensure marketing, advertising and PR is first class

    As the most-franchised nation (per head of population) in the world, there is a very high level of awareness of franchising in Australia. As a result, the Franchise Council of Australia receives many inquiries from individuals and organisations who have existing businesses or who are developing business concepts and would like to establish these as franchise systems.

    This high level of interest, however, is not followed through by the number of new franchise systems which actually enter the market. The reason for this is simple. Establishing and testing a business concept is not as easy as some would believe, and furthermore, Australia now has some of the world’s most stringent franchising legislation which means there is little or no margin for error for “new” franchisors.

    Proving the Business Concept

    The average stand alone small business has an 80% chance of failure in its first five years of operation. Prior to franchising, a small business should operate for at least this time (and certainly no less then three years) to prove that it has a viable concept, ongoing market demand, replicable systems, and a management, logistic, marketing and training structure capable of supporting franchisees in a variety of locations. If not, the business may well become another statistic.

    During this period, it is highly desirable for the intending franchisor to open several outlets using their own capital in which they can test the adequacy of their systems, procedures, training, etc. The lessons learned during this phase will reap dividends after the successful commencement of franchise operations.

    Getting Proper Advice

    Experts who are skilled and experienced in franchising can give you competent advice relevant to your franchising plans. Be sure to seek out these specialists. Most are members of the Franchise Council of Australia, denoted with representation of our logo, and they are listed on the FCA website www.franchise.org.au under Buying a Franchise or at www.franchisebusiness.com.au .

    It is critical that intending franchisors get the right advice from the very start of their franchise journey and, in particular, that they have ensured all aspects of their intellectual property rights are protected prior to franchising.

    The Franchising Code of Conduct

    Implemented on July 1, 1998, the Franchising Code of Conduct provides the most stringent national regulations for franchising introduced anywhere in the world. The Code was primarily introduced to outline the rights and responsibilities of franchisors to franchisees including particular requirements for disclosure of information, the provision of a cooling-off period, and unconscionable conduct.

    Complying with the Code is mandatory, however registration with a central body, or “approval” is not required prior to the commencement of franchising. The Code is enforced by the Australian Competition and Consumer Commission and the penalties for breaching the Code are quite severe. Click here to find out more about the Franchising Code of Conduct.

    How can the FCA Help?

    Education:

    The establishment of the FCA Franchise Academy coincided with the introduction of nationally recognised qualifications in Franchising.

    In 2004 we developed Certificate and Diploma level courses in Franchising and we became the first educational institution to offer the Diploma of Business (Franchising).

    The FCA Franchise Academy offers a career path via industry specific education enabling individuals to pursue continuing professional development drawing upon the expertise experience of leaders within the sector.

    FCA Franchise Academy courses present up to date knowledge and relevant theory together with practical skills that can be applied immediately to your advantage in the workplace.

    Information on the Franchise Academy is available at www.franchiseacademy.org.au .

    Publications:

    The Franchise Council of Australia publish and market books on key aspects of franchise decision making, management and practices authored by acknowledged experts in their field.

    • Franchise Guide
    • Compiling a Franchise Operations Manual
    • How to Franchise Your Business: A Guide for Australian Entrepreneurs
    • Expanding Internationally: A Guide for Australian Franchise Systems
    • Profitable Partnerships
    • Franchisor’s Guide to Improving Field Visits
    • The Franchise E-Factor
    • What Great Retailers Do
    • Marketing Works

    For full details on these publications and more, please visit the FCA Bookshop .



    ANZ Franchising #low #investment #business #ideas


    #franchise loans

    #

    ANZ Franchising

    Obtaining a franchise in a successful franchise system is often difficult. The initial capital outlay is normally large, and to fully secure the loan you usually have to mortgage your house.

    This is where ANZ can help. We work from the basic belief that franchise businesses are different and usually inherit some strengths and capabilities from the franchisor.

    ANZ offers

    • loan assessments made quicker by placing a value on the past performance of the franchise system
    • ANZ Preferred status to selected franchisors to reflect the value of their franchise system
    • ability for franchisees of preferred systems to borrow against the value of their business (including all franchise fees, training costs, stock and business assets) up to a percentage of the purchase price
    • less focus on the franchisee’s personal assets when obtaining finance
    • loan products tailored for franchisees
    • market leading eCommerce services for franchise businesses
    • a full range of services which are customised and priced to reflect the value of the franchise.

    Benefits at a glance

    Access to credit to fund your business purchase or expansion with or without ‘bricks and mortar’ security.
    You can obtain a secured or partly secured loan using an ANZ Business Loan. Or, if your loan is fully secured by residential property, you can use an ANZ Business Mortgage Loan for an even cheaper from of financing.

    Assistance with the short-term liquidity needs of your business.
    An ANZ Business Overdraft provides a revolving line of credit. It’s ideal for assisting with working capital or funding requirements in the day-to-day running of your business.

    A business deposit account to suit the requirements of your business.
    We will recommend the most cost-effective solution for your business by looking at your typical transacting behaviour and average balance of funds.

    Electronic banking for quick and accurate reporting of balances and transactions, as well as electronic payment capabilities.
    ANZ Internet Banking is the smartest way to do your business banking. Without even leaving your desk, you can have control over almost every aspect of your business banking. And there are significant savings in time and money.

    Any advice does not take into account your personal needs and financial circumstances and you should consider whether it is appropriate for you.

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    Australia and New Zealand Banking Group Limited (ANZ) 2015 ABN 11 005 357 522. ANZ’s colour blue is a trade mark of ANZ.