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Page 1: Be Your Own Boss

FranchisingIs It a Strategy That

Fits You?

Page 2: Be Your Own Boss

Is Franchising Right for You?

• 70% of all people have thought seriously about owning their own business.

• Is it the right venture for you?

Page 3: Be Your Own Boss

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

Page 4: Be Your Own Boss

Common Reasons for Business Ownership

• 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?

Page 5: Be Your Own Boss

What is a Frantrepreneur

“Frantrepreneur”

(fran*tre*pre*neur) n.

One possessing the desire to be a business

owner -- without the desire to recreate the

wheel -- by following a proven system for the

benefit of personal and professional goals.

Page 6: Be Your Own Boss

The Frantrepreneur Mentality

• “I’m in business for myself, but not by myself.”• “I have the opportunity to learn from the success and

failure of others.”• “I want a ‘bottled’ process for success that I can use in

developing my own successful business.”• “Why would I work for someone else when I can work for

myself and reap the rewards of my efforts?"

Page 7: Be Your Own Boss

What is a Franchise?

Franchising is a method of distributing goods or

services to consumers. The franchise system owns the right to the

trademark of the business. The franchisee

purchases the right to use the trademark and operating system.

Page 8: Be Your Own Boss

Franchise Statistics• Franchise businesses account for about 50% of all retail

sales in the United States.• 1 out of every 12 business is a franchised business.• A new franchised business is opened every 8 minutes of

every business day.• Franchise businesses employ more than 14 million

Americans.• There are an estimated 1,500 franchise companies

operating in the U.S. doing business through more than 316,000 retail outlets.

• More than 75 industries use franchising to distribute goods and services to consumers.

Page 9: Be Your Own Boss

Franchise Opportunities

Most people associate the word “franchise” with fast

food restaurants. But, there are many more

types of franchise businesses, including

everything from advertising to automobile repair, printing services to party supplies and many

more.

Page 10: Be Your Own Boss

Categories of Franchises

• To name just a few options…• Accounting/tax services * Hotels, Campgrounds• Transportation * Computer/Electronics• Clothing/Shoes * Cosmetics• Fitness * Florists• Foods * Packaging/Shipping• Fitness

Call us for a complete list of options!

Page 11: Be Your Own Boss

Well-Known Franchises

• McDonald’s * Curves (fitness centers)• Alphagraphics * Block Buster• Dale Carnegie * Century 21 Real Estate• Radio Shack * Molly Maid• Great Clips * Subway• Big O Tires * Baskin Robbins

Page 12: Be Your Own Boss

Franchise Success

• Franchises have a 90%+ success rate.

• Most people can’t even predict that they can keep their jobs with a 90% certainty.

Page 13: Be Your Own Boss

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 systemHamburger meat, muffler parts, coffee

grounds Knowledge, training, software, databases

Page 14: Be Your Own Boss

Franchising – What’s It All About?

• Leverage growth through resources of stakeholders– Knowledge,

experience, effort, purchasing power, financial

• Similar goals & unified thinking among participants

• Strategic-Partnership

Page 15: Be Your Own Boss

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

Page 16: Be Your Own Boss

Elements of a Franchise

• 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

Page 17: Be Your Own Boss

Value of Franchise Systems

• 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

Page 18: Be Your Own Boss

Value of Franchise Systems cont…

• Collaboration – Share best and worst practices with similar people

• Systems continually adjusted, changed, & improved

• Training systems

• Sales & marketing strategies and systems

• Manuals & other documentation

Page 19: Be Your Own Boss

Value of Franchise Systems cont…

• Letters, contracts, agreements, documents – all in place

• Development costs – shared resources• Purchasing power• Many others…

Page 20: Be Your Own Boss

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

Page 21: Be Your Own Boss

Entry to a Franchise System cont…

• 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

Page 22: Be Your Own Boss

Entry to a Franchise System cont…

• 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.

Page 23: Be Your Own Boss

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

Page 24: Be Your Own Boss

Making an Informed Decision cont…

• 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

Page 25: Be Your Own Boss

Franchisor Disclosure

• 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

Page 26: Be Your Own Boss

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

Page 27: Be Your Own Boss

Questions to Ask Yourself

• How much capital do you have to invest?• How much liquid assets do you have?• Do you require a specific level of annual income?• Are you interested in pursuing a particular field?• Are you interested in retail sales or performing a

service?• Do you want a part-time or fulltime opportunity?• How many hours are you willing to work?

Page 28: Be Your Own Boss

Questions to Ask Yourself

• Do you want to operate the business yourself or hire a manager?

• Do you want to have employees?• Do you want to have inventories?• Do you want to have Accounts Receivables?• Will franchise ownership be your primary source of

income or will it supplement your current income?• Would you be happy operating the business for the

next 20 years?• Would you like to own several outlets or only one?

Page 29: Be Your Own Boss

Facing the Fears – Realizing the Dream

• 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

Page 30: Be Your Own Boss

Realizing the Dream• It will never be the perfect

time where all the stars line up…– Opportunity– Finances– Family– Market Conditions– Demographics– Advisors

Page 31: Be Your Own Boss

Franchise Broker/Consultant 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

Page 32: Be Your Own Boss

Franchise Broker/Consultant Value

• 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

Page 33: Be Your Own Boss

Franchise Broker/Consultant Value

• 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

Page 34: Be Your Own Boss

Golden Opportunities

If you don’t follow your dream, you will be working for

someone who did!

Page 35: Be Your Own Boss

Contact Information

Traci Mousetis, OwnerBen Adamo, Owner

www.AffordableBusinessConcepts.comOffice: (480) 626-2287Fax: (480) 706-0385

Toll-free: 866-388-3576E-mail: [email protected]