1. Franchising – Is It a Strategy
That Fits You?
70%of All People Have Thought Seriously about
Owning Their Own Business.
Is it The Right Dream For You?

2. Common Reasons for Business Ownership
 Control your own financial freedom
 Build an asset for future sale
 Create more control and freedom for
your time
 Fair reward - make money for
yourself instead of the company
 Emotional fulfillment of building your
own dream

3. Common Reasons for
Business Ownership (continued)
 Satisfaction and happiness
in day-to-day activities
 Build an asset to pass on to
family members
 Create an opportunity to
work with family
 Remove threat of job loss
 Replace lost income stream
 Other?

4. Franchising – What’s It All About?
 Franchising is not a business or industry itself
 Franchising is a business strategy
 Franchising is a strategy of the Franchisor designed to
penetrate and dominate a marketplace
 Efficient distribution system
Hamburger meat, muffler parts, coffee grounds
Knowledge, training, software, databases
 Leverage growth through resources of stakeholders
Knowledge, experience, effort, purchasing power, financial
 Similar goals & unified thinking among participants
 Strategic-Partnership

5. Elements of a Franchise
 Brand - the Franchise name associated with the products or
services delivered in a memorable and satisfying experience
 Operating System – institutionalizes an excellent 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 – helps the Franchisee get better and better
at delivering the service in a memorable experience – helps a
Franchisee improve their performance
 Franchisee – the individual motivations or reasons for being
a part of a vibrant system

6. 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
 Many others…

7. 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.
Entry fee to the point of the completion of the initial training
programs
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

8. 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

9. 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
 Earnings Claims – most don’t, some do
 Financial performance data will be obtained from Franchisees

10. 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?
 Franchisor should be willing to discuss

11. Facing the Fears – Realizing the Dream
Common and expected fears – we all have them
 Fear of change, failure, unknown – perfectly natural
 Naysayers are everywhere – the ‘fire hose brigade’
 Listen to advisors but trust yourself too
 Face it – feel it – blast past it – the only path to the dream
 It will never be the perfect time where all the stars line up
Opportunity
Finances
Family
Market Conditions
Demographics
Advisors

12. Franchise Broker/Consultant Value
Delivery of Currencies of Value
 Money – help avoid wasting your resources pursuing less than
optimal matches for you
 Time – spend my time to help you sort through thousands of
Franchise options
 Security in decision making – help you eliminate systems that
don’t fit for you and your characteristics
 Knowledge – apply my specialized Franchise knowledge and
experience for your benefit

13. Franchise Broker/Consultant Value – continued
 Provide education about Franchising
 Interview/Profile/Discuss/Follow up
 Identify characteristics most important to you
 Help identify best options for you
 Match your qualifications to appropriate systems
 Help with selection of systems to learn about
 Introduction to appropriate personnel at those Franchisors
 Act as a buffer between you and Franchisor
 Help with information exchange process

14. Changed Results Will Only
Happen if You Change Activities!
Is It Your Time?