Turn your assumptions into questions and get to the truth!

How Do I Avoid Mistakes?

In the right circumstances, franchising reduces the risk of getting into business. Nevertheless, your process of investigation should be extensive and methodical. Most initial buyers will say, “I don’t even know what questions to ask.” If this is true for you, allow me to point the way for you.

Start now, and study up:

• Learn about franchising. Read books, attend seminars, etc, and become familiar with terminology. I can refer you to appropriate resources – see below.
• Examine your motives for going into business. Be realistic. Even the best franchises can test your patience during that first year of operation. If you aren’t particularly good at seeing things through, then franchise ownership will offer you coaching to help you stay on track.
• You will need the support of your family and should discuss your plans with them. In fact, most states require both husband and wife sign a franchise agreement so encourage your spouse to be part of your investigation process.  Remember, the biggest fear is the fear of the unknown.  The more your partner is engaged in the process, the more support you will receive.
• Study the concept — I will help you know what to examine, what to learn, what will work for your skills.
• Study the FDD — the Franchisor must provide you with a disclosure document that delineates all of the pertinent facts relative to their opportunity. If they do not offer you one before asking you to sign a contract, they are breaking the law. When you read it – read it as if you have been in business for two years. You will be amazed what a difference that makes.

Above all – turn your assumptions into questions so you get to the facts. You don’t want to say NO to a business based on what you think, rather than on what you know.

Suggested Readings:

Rick Dad, Poor Dad, Robert Klyosaki

The Go-Giver, Bob Burg

From Employee to Entrepreneur, Marvin Storm

The E-Myth Revisited, Michael Gerber

Having It All, John Assaraf

Share on Facebook

Take your time

Advantages:

• There is an already successful model to view and evaluate, and your rights are clearly delineated in a contract.
• Instead of needing to think through thousands of details on your own, your franchise provides support to you. During the start-up of your business, they may provide assistance with site selection, supply of equipment, assistance from experienced staff during the launch period, and selection and purchase of stock. Better franchisors are committed to providing you with ongoing support as their income is dependent upon your success.
• The franchise’s brand name can add an aura of success and drawing power to your business.
• The franchisor can provide training in both general management and skills specific to your franchise as well as significant administration and management functions.
• Advertising and/or marketing support to build your clientele is provided.
• A detailed Operations Manual provides you with resources to support you in just about every eventuality your business could experience.
• A designated territory is often provided to avoid overlap within the Franchise system.

Disadvantages:

• You will not be in a position to exercise 100% control over all aspects of your business. But why would you want this? You’re BUYING expertise and experience when you purchase a franchise, so 100% control would be counter-productive. You should understand this fundamental point from the beginning if you want to be successful.
• If a franchise in another town or country has problems that draw national attention, it could adversely affect your sales. (Do you remember the tainted food fiasco that injured Taco Bell’s reputation in 2006?) This is why FDD’s from the better franchise companies often have very strict rules – they are there for YOUR protection.
• If you’re not terribly good at taking directions from others, then perhaps franchising isn’t for you, because you must be able to follow the system that your franchise company has developed. A franchisor has the right to terminate your contract if you do not remain in compliance with your contract with them. You will never find sushi at McDonald’s.
• An average contract with a franchise is for 10 years — but not a lifetime. As you near the end of your contract, you can sell your franchise, or you can choose to renew, if the franchise invites you. So first of all, you have the right to sell your franchise at any time if you choose.
• Every franchise receives ongoing monthly royalty payments from its franchisees for the ongoing support they provide usually in the form of a flat fee or a percent of gross sales. Remember the franchisor’s engine runs on royalty income, hence if you are not successful, neither will they be.  It’s a win-win proposition.

One thing I always coach my clients on is this: don’t let a past experience rob you of your future dreams. It is human nature to go back automatically to a negative experience we had in the past because we are afraid history will repeat itself. Make sure your fear is REAL and not just a bad memory. (Fear is false evidence appearing real.)  I work hard to find a business where my clients can play where they work! If you love what you are doing, it won’t seem like work. Do you know what you are passionate about?

Watch for Part Five

Share on Facebook

Happy Thanksgiving

I wanted to wish everyone a very happy and warm Thanksgiving. This is the perfect time of year to reflect on life and focus on the many things you can be thankful for. So many times we get bogged down in thinking of all the things that are not going well and we forget to look at what is going right.

Life is always going to bring us ups and downs, highs and lows, that is just called life. It is how you deal with it that makes the difference. If you are feeling down, make a gratitude list, you will amazed how that will help you. Call a friend or mentor and thank them for being there for you. You will find that if you start finding what is going right and quit trying to stare at what is going wrong – you will be amazed how that will help you.

Have a wonderful holiday and thanks for the opportunity to share my experience with you. Life is what you make it – why not make it the best life ever!

Your Franchise Coach, Phyllis

Share on Facebook

What Can I Expect to Pay?

Most franchisors charge an initial fee (often referred to as the franchisee fee) to cover the upfront costs of “setting up” the franchisee in business. These companies have often spent a great deal of money to establish, prove, document — and then market — their Franchise System. The initial fee is simply a means of their recovering some of these expenses.

However ongoing support of the new franchisee requires additional funding. There will be certain out-of-pocket expenses required of the new owner for real estate leases, build-out, equipment, etc. There will be capital expenses to market the concept and pay employees, as well as for ongoing fees (royalties) usually taken monthly by the franchisor. These are either a percentage of the franchise owner’s gross income, or a flat monthly fee.

The total initial investment for a particular franchise is estimated in that franchise company’s Franchise Disclosure Document (FDD) so that you can estimate ALL costs associated with starting up your new business.

It is very important to get started on your financing right away. If you have a relationship with your local banker you might pay him a visit to see what programs are available to you. But buyer beware.  They might tell you they can do an SBA loan for you, but please make sure that you ask if they have been doing them lately. Over the years, it has been my experience  that if they don’t have an SBA packager doing the loans, your chances may be limited and you can waste a lot of time.

I always help my clients in this area during the early stages of the process. Have you given a lot of thought about how much money you are willing to invest?

Watch for Part Four

Share on Facebook

How Does One Qualify For A Franchise?

Most franchise companies have set forth a number of criteria against which you will be qualified, such as:

• Financials — Franchisors don’t want you to be “overextended” on your purchase, thereby limiting your ability to succeed, so most franchises have minimum liquidity and net worth requirements for investors.
• Your skills and/or experience — They have learned from experience with other owners what levels are required to succeed, and expect you to meet or exceed these.
• Your personality — This should be suited to the role you would play as an owner.
• Your support system — This is your partner, wife, husband,  and family who should be there to back you emotionally.

Unfortunately, most potential buyers go about searching for a franchise in the same way they would when buying a refrigerator. They fall in love with the franchise product or service without really knowing whether or not it would be a good investment. There are many well-known brands out there that don’t allow you to make much money on your investment unless you own quite a few units or are considered “mature” and the real money has already been made. Quite simply, you have to know what you are doing.

The better route is to use a franchise consultant who can help you assess your skills, needs, wants, desires, goals, and match you to the franchise opportunities that would be right for you. I have thirty years of experience gained by helping many others like you do exactly that.

My service is free-of-charge and can save you from many mistakes and much frustration. Buying a franchise is a lot like buying a house and you should receive the same level of attention as you would from your real estate agent.

What Should I Look For?

A good Franchisor will have considerably reduced the inherent risks of setting up a new business in several possible ways:

• they will have proven that their business system works well, and can be reproduced consistently
• they will have tested their idea, by means of at least one (but preferably more) test market operations which they operated for a minimum of a year in a typical location
• they will have justified their royalty payments by providing a significant number of support services for their owners, thus freeing owners to concentrate on building their business

Will the franchise be risk-free? Of course not. There is a human factor (you, the franchisee) to consider, as well as many other factors, therefore no franchisor can promise success. Franchising has demonstrated time and time again its ability to reduce risk versus the option of starting a business without the benefit of a franchise system. The key is to believe whole-heartedly in your franchisor’s system and be willing to follow it, rather than insisting on reinventing the wheel yourself.

Watch for Part Three

Share on Facebook

Understanding Franchising

Franchising is a powerful economic force, according to a study conducted for the International Franchise Association’s Educational Foundation by PriceWaterhouseCoopers, which found that A franchise opens every 8 minutes in the United States, franchising employs over 21 million people, there are 3,500 franchise concepts in 75 industries (there is life after food). Franchising accounts for 1.53 trillion in sales and 50% of all retail sales and that 1 out of 12 retail business is a franchise?

Yet, we’d be the first to admit that franchising isn’t for everyone.

Not only do I prepare potential franchise owners so that they can make highly informed decisions about purchasing a franchise, I tell them if I don’t think they are well-suited to franchising, starting with directing them to a resource like mine, so that they better understand what franchising is about.

If you are going to understand only one thing about franchising, it should be this:

When a company has a great idea and wants to expand distribution of that idea, they can either try to raise millions of dollars (not an easy task), or they can franchise their idea. Through successful franchising, not only does the originator of the business idea have an opportunity to gain by expansion, but the individual franchise owner can potentially benefit from the Franchisor’s experience and success. But understand: a franchise’s primary purpose is to “award franchises” and build a critical mass.

That being said, they couldn’t award a franchise unless they had happy, successful owners. So the better companies have taken every step toward helping you succeed. In fact, the last thing they want is for you to fail — which is one of the reasons why they spend so much time “qualifying” you before they award you a franchise. That’s right. You must qualify for purchasing a franchise, the company is not simply “lined up” ready to take your money.

What was your perception?

Part Two will be – How to Qualify for a Franchise?

Share on Facebook

Guardian’s research shows that by 2018 women entrepreneurs will be responsible for creating between 5 million and 5.5 million new jobs nationwide. That’s more than half of the 9.7 million new jobs the Bureau of Labor Statistics expects small businesses to create, and about one-third of the total new jobs the BLS projects will be created nationwide in that time frame. READ THE FULL ARTICLE HERE

Share on Facebook

Sir Speedy Named To Franchise Times Top 200 List Company achieves high ranking in foreign units category

MISSION VIEJO – Sir Speedy, a franchise network of printing and marketing services providers, was recently named to Franchise Times magazine’s Top 200 List. The Franchise Times Top 200 is comprised of all top franchise systems ranked by worldwide sales for the year 2008. Sir Speedy ranked number 155. This year’s report showed significant international growth among franchise companies. Sir Speedy ranked number 75 in the foreign units category. READ THE FULL ARTICLE HERE

Share on Facebook

Share on Facebook