What does it take to own a franchise? In many ways, the responsibilities of a franchise owner align quite similarly with those of a small business owner. Even though they are essentially the same, the franchise owner starts off with a few more advantages.
There are many franchise concepts and some of them offer a type of product or service that connects directly with the customer. Depending on which franchise you choose, you could be very involved with the public on a daily basis. If you don’t have the patience or personality to deal with complaints, demands and the occasional attitude, then you might want to look for a franchise that does not need you on the front lines. Carefully understand the outline of your responsibilities and don’t settle for something you aren’t passionate about.
As an owner you need to make sure you have a strong team of employees, so you need to prepare for effectively training and motivating your team. The franchisee’s training and on-going support will come from the franchisor; however, the franchisee must pass on his or her knowledge and use it to better their individual operation. (more…)
As with any major investment, the best decision can be made only if you’re as informed as possible. You need to spend a good deal of time researching, interviewing and exploring your options — and a part of the process is determining what the legal and financial aspects are.
As your focus gets more serious with the idea of owning your own franchise, you need to genuinely look at your financials and propose a budget with which you feel comfortable. Research the many options you have, like the Self-Directed 401K option or loans. Financing a franchise may be considered a lower risk investment, mostly because franchises have proven track records and an established trademark and brand. That being said, it is still crucial that you prepare an in-depth business plan and explore a range of options so you commit to the one that makes the most sense for your budget. (more…)
With over 3,000 choices of franchise concepts in the marketplace today, your options for owning your own business are limitless. But not all franchises are created equally.
Say hello to the Franchise Disclosure Document, or FDD for short. Quite simply, it’s a legal document mandated by the Federal Trade Commission (FTC), designed to assist the potential franchisee through the due diligence process. Every legitimate franchise must produce one. If a company doesn’t, remove yourself from discussions as quickly as possible. At its core, the FDD removes any emotion from the process.
Under FTC guidelines, the FDD must be presented to the potential buyer in the pre-sales process no less than 10-14 days prior to entering a contract or paying any amount of money for a franchise. Regardless of the type, size or scope of a franchise opportunity, the FDD follows a strict format. FDD’s are uniform and consist of 23 specific items. Expect to see franchise fees, initial investment totals, trademarks, assigned territories, renewals, restrictions and advertising efforts. (more…)
How many of you have spent your career advancing to the Executive Suite, only to find out it was not what you really wanted? Or, perhaps the company to which you devoted the majority of your career was sold, merged… or just decided they did not need your position anymore?
That happened to me. I got the education I needed to be successful in Corporate America, and I worked my way up the career ladder. But, I have to tell you: I was not happy with what I found there. I had no work/life balance, and what good does it do to live in paradise if you can’t find the time to enjoy all it has to offer?
In 2007, I was downsized. It was the best thing that could have happened to me! While I started out looking for another job, I just could not get excited about anything I found. Fortunately, I was introduced to franchising. Like you, I once believed that franchises were all fast food or retail stores. I thought that I couldn’t afford to buy one. I was afraid to be a business owner because I didn’t think I had the experience to succeed as a business owner. I was very mistaken! (more…)
After you have narrowed your search for a franchise business to THE ONE that best fits your personal and professional goals and financial resources, it’s time to engage the services of a qualified franchise attorney to review the associated Franchise Disclosure Document (FDD) and the franchise agreement contained therein. While you might be tempted to hire an attorney at a far earlier stage in the due diligence process (let’s be honest: navigating through an FDD is far from “reading for pleasure”), the investment is not warranted until you are ready to become part of a particular franchise system.
The Value of a Franchise Attorney
The Federal Trade Commission requires that the FDD be written in “plain English.” No such restrictions pertain to the franchise agreement itself, however. You will want an attorney, who is experienced in franchise law, to review the contract to ensure that it is within the norms for franchise agreements, which are notoriously slanted for the benefit of the franchisor. If there are some provisions that need adjusting, your attorney can negotiate those on your behalf. Additionally, your franchise attorney can help you determine the best legal entity for your franchise business, as well as assist you with the numerous other legal matters that accompany business ownership. There is no standard fee for the review of the FDD and franchise contract, and they can be wide-ranging. So, be sure to ask before engaging your attorney’s services. (more…)
A potential franchisee seriously interested in becoming an entrepreneur will take several demonstrative steps throughout the ownership process. In this post, we focus on the financing options available to the franchisee. It is our hope that you will be able to avoid potential mistakes and find a suitable solution which matches up perfectly with your own financial position.
Allow us to introduce to you the Top-3 Pitfalls of franchise funding. Take heart, because making the right decisions will illuminate a path to success and growth. A costly mistake could jeopardize your break-even possibilities and even hamper your effort to achieve viability in the marketplace. Some of what you are about to read is just plain common sense, but you may find just find the “gem that keeps you out of a jam!”
Pitfall Number One – “Pump Your Brakes”
You’ve spent the requisite time in choosing to meet with a qualified franchise consultancy like FranNet, whose sole focus is matching the right opportunity with the right option just for you. You believe in the franchise concept, and you did your due diligence through the Franchise Disclosure Document process. You have arrived at this point because you were both cautious and prudent with your time in researching the development of your soon-to-be franchise. It’s time to explore financing options, not hit the gas and floor it. Stay as focused and patient as you have been up to this point, never let your emotions override the necessity for exploring any and all financing options – even if you do feel close to the finish line. (more…)
Sandy, Oregon Woman Opens Oasis Senior Advisors with Help from the SBDC and FranNet
As many people do, Breanna Nickila geared her education toward a career in corporate America. After starting on her MBA, however, she began to realize her life might point in another direction, as the allure of business ownership and the struggle to find a quality job in eastern Portland created a new opportunity. Ultimately, her path landed her as one of the newest franchisees with Oasis Senior Advisors, a senior care advising company.
Nickila, a graduate of Portland State University, initially delayed her leap into the entrepreneurial world as she stayed at home for 11 years to raise her daughter. What she realized is that corporate life had changed and that her true calling was that of a business owner. (more…)
Corporate executives create new lives for themselves with franchise ownership after layoffs and business closures.
It’s not a pleasant position to be in, especially for a six-figure-generating corporate executive – unexpected layoffs and downsizing. According to ExecuNet (a networking group for outplaced Executives in the $100K+ salary bracket), corporate executives can expect to be in the same job for only 2.7 years, and with the same company for only 3.3 years.
That means mid-level and executive-level managers are looking for new jobs every couple of years. It’s an employment cycle that puts a lot of stress on finances and family.
But many former corporate executives are now choosing another option after facing numerous corporate layoffs and reorganizations: business ownership. (more…)
For some, the idea of getting off the corporate treadmill and becoming their own boss is the attraction. For others, retirement allows them to fulfill a life’s dream. And recently, unemployment may have brought the alternative of business ownership into sharp focus for many.
FranNet brings together franchisors and individuals who are interested in exploring self-employment as a career option. FranNet consultants provide both information and guidance at no charge to prospective franchise owners to help them assess their aptitude for business ownership and to identify the best franchise options for their background and interests.
To make it easier to connect with a local FranNet consultant, the “Find a Consultant” feature on FranNet’s website prompts users to enter their zip code. The website displays a complete profile of the local FranNet consultant, including contact and background information. (more…)
In this week’s blog edition, we’re going to tackle the issue of using a franchise or small business to diversify your portfolio of investments. As you’ll see, there are several advantages for doing so, the least of which is the creation of a figurative safety net. This safety net is designed to do two things:
- To prevent the depletion of wealth in the event of a severe downturn in the economy—something we all became familiar with beginning in 2008.
- To provide a fall-back source of income should your current job or position be eliminated.
While signs of recovery continue to aggregate, arming yourself with additional information will be a helpful exercise in diversification.
As an investor, if you have a healthy portfolio, you are always looking for ways to diversify your holdings. Owning a small business or franchise opportunity can be a smart addition which gives you the option to stay engaged in the semi-absentee model of operations while keeping your day job, so to speak. As we have covered before, the semi-absentee model allows you to run the business from afar, typically with a smooth “manage the manager” philosophy. (more…)