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Franchising 101 for Veterans
Stacy Swift  FranNet CO, WY, & MT• Degree in Business Administration• Self-employed for 23+ years• Suzy-Q Deli; Sole Propr...
Who is FranNet?•   International franchise brokerage and    consulting firm; celebrating 25 years in 2012!•   Over 70 Offi...
US Labor MarketCurrent Economic Outlook• More than 1 million Vets returning home from Iraq        & Afghanistan will re-en...
VetFran Program• Founded in 1991 to support veterans transitioning back into  civilian life after the Gulf War.• More than...
VetFran Program• ―Help Veterans Own Franchises Act‖ (HVOF)   – Establishes a tax credit for Vets to become franchise owner...
Why Own Your Own Business?                   SUCCESS    Fulfillment    Flexibility   Independence             Financial   ...
The Reality:Yet … most peoplechoose to work forsomeone else!
Some MisperceptionsRisk:              A job is safer than a business.Economy:              I’ll wait until the economy is ...
Perception of Risk: Job                                Is working for someone safe?                                     Sh...
Business Ownership                   At first, owning your own business                              can be scary, but ......
Lower Your RisksConcerned about starting a business during          poor economic times?Lower the risk by looking for busi...
What About The Economy?Growing markets driven by demographics   • Ex: Senior Care, Residential Repairs & Cleaning, etc.Ess...
Business Ownership                        Options                      Start a Business from ScratchBuy a Franchise       ...
Start Up Business      Advantages              Disadvantages•   Total control           • Must create systems•   Make all ...
Buy an Existing Business      Advantages                    Disadvantages• Cash flow & good will        •   What is the re...
A Franchise…      Advantages                        Disadvantages• A proven, time-tested business    • An seemingly endles...
What is Franchising?                                   Franchise                                  HeadquartersThe creation...
Franchise is…A license to use:  • Name and trademarks  • Products  • Business SystemsIn exchange for:  • Initial franchise...
Franchising Fact #1:                                    Popular                                   CategoriesFACT:         ...
Franchising Fact #2:FACT:  Total Investment Percent                                                     Under $100k     $1...
Financing Facts:How Much Do I Need?Typically, 25-30% of the total investment will be  your money.Financing is relatively e...
Financing Facts:Sources:     •     Personal savings     •     Family, friends, or partner     •     Home equity line of cr...
Financing Facts for Vets• Patriot Express Pilot Loan Program Ideal for Veterans and other eligible members of the militar...
Franchising Fact #3:FACT:  There is no automatic correlation  between the cost of the franchise and  the potential return.
Franchising Fact #4:FACT:  Service businesses require far less  capital investments and frequently  yield higher returns.
Franchise Business                Economic Outlook• It is estimated that Franchises accounted for  over 7,934,000 jobs in ...
2012 Forecast for                             Franchise Industry• In 2012, franchising will     – Add 168,000 new U.S. job...
The Benefits of                   FranchisingProven, systematic approach to starting and    staying in business:    – Expe...
Franchising BenefitsYou’re in business for yourself,     but not by yourself….
How Do You Find a             Franchise That is a Great Fit?Separate thefunction of thebusiness,from the functionof the bu...
Determine Your                     Business Model5 Years                   20 Years          10 Years           Identify y...
What Are Your Transferable      Business Skills?                  Customer  Sales            ServiceManagement         Mar...
Your Business ModelEmployees                           Types of Customers                                       Service or...
Business Characteristics• These are preferences• It will not be perfect• Expect some of your preferences to  conflict• Be ...
Finding a Great FitMatch your business model withfranchisors who are looking forpeople with your characteristics,attribute...
Conducting Your                 ResearchWell coach you through a4-Step Research Planand you’ll determine if one of thefran...
Professional Advisors                        AdAdditional Resources You Should Use   Franchise Attorney        Accountant
The Science of Psychology
Getting Started with            FranNet     Visit our Website:    www.frannet.comClick on the Orange button:
Can YOU Relate?
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Franchising is More Than Just French Fries

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Franchising is an all-American business model that has enabled tens of thousands of veterans to become small business. Join Stacy Swift, owner of FranNet Colorado and a franchise industry expert, to learn how to separate the myths from the facts. What is a franchise? What are the requirements? How do you find the “best” one for you?

By: Stacy Swift, FranNet

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  • Focus on under $100K investments, service and B to B businesses.
  • Give personal examples of clients who got financing.
  • Demonstrate how to leverage 401K
  • Transcript of "Franchising is More Than Just French Fries"

    1. 1. Franchising 101 for Veterans
    2. 2. Stacy Swift FranNet CO, WY, & MT• Degree in Business Administration• Self-employed for 23+ years• Suzy-Q Deli; Sole Proprietor• Fantastic Sams (Franchisee; 2 stores)• FranNet (Franchisee; CO, WY & MT)• Mr. Handyman (Franchisee; 3 territories)• CO Real Estate Broker license (resales)
    3. 3. Who is FranNet?• International franchise brokerage and consulting firm; celebrating 25 years in 2012!• Over 70 Offices in U.S. and Canada• Worked with the SBA, SBDC, and SCORE since 1987• Proud contributor to Wounded Warrior Project• We match people who want to be in business with franchises that meet their needs• NO COST!
    4. 4. US Labor MarketCurrent Economic Outlook• More than 1 million Vets returning home from Iraq & Afghanistan will re-enter workforce in next 5 years.• Unemployment rate for Vets is higher than the civilian rate—11.7%.• 12.8 million currently unemployed.• 2.6 million ―under-employed” in jobs beneath skill set & fair pay scale. U.S. Census Bureau’s Business Dynamics Statistics (BDS) - 2010
    5. 5. VetFran Program• Founded in 1991 to support veterans transitioning back into civilian life after the Gulf War.• More than 400 IFA member companies participate – Offer financial incentives, training, and mentoring for Vets interested in starting their own franchise business• ―Operation Enduring Opportunity‖ – Campaign to recruit and hire 75,000 Veterans and their spouses and 5,000 Wounded Warriors by 2014 – The IFA has partnered with the White House Joining Forces Initiative, the SBA, and The US Chamber of Commerce in this unprecedented recruitment effort – The program offers tax credits to employers who hire unemployed Vets
    6. 6. VetFran Program• ―Help Veterans Own Franchises Act‖ (HVOF) – Establishes a tax credit for Vets to become franchise owners – Allows a tax credit of 25% of the Franchise Fee to offset start-up costs• 1 in 7 franchises are owned by Vets – 66,000 Veteran owned franchises in the US provide 815,000 American jobs and generate $41B in GDP• Veteran success in Franchising is driven by: – Outstanding leadership and teamwork skills – Ability to implement and execute systems – Franchises provide extensive training – Franchises offer on-going business support• More information is available on the IFA’s VetFran Directory – www.franchise.org/Veteran-Franchise.aspx – www.VetFran.com
    7. 7. Why Own Your Own Business? SUCCESS Fulfillment Flexibility Independence Financial No MoreControl Money Security Layoffs What is it for you?
    8. 8. The Reality:Yet … most peoplechoose to work forsomeone else!
    9. 9. Some MisperceptionsRisk: A job is safer than a business.Economy: I’ll wait until the economy is better.Investment: A business costs a lot of money to start and run.Knowledge: I don’t know where to start or find what I’m looking for.Skills: Running a business takes specific talents and skills.
    10. 10. Perception of Risk: Job Is working for someone safe? Short term yes, but …Risk Can you be sure your job is safe? Can performance determine security? Time Job (Then) Job (Now) Will you meet your long-term financial goals of security and retirement? Risk Increases
    11. 11. Business Ownership At first, owning your own business can be scary, but ... • No one can take it away. You can’t be downsized, transferred or fired. • You can grow the business at the pace you want. • The longer you own your business the safer it becomesRisk Decreases
    12. 12. Lower Your RisksConcerned about starting a business during poor economic times?Lower the risk by looking for businesses with specific market characteristics.Many businesses thrive in all economic conditions.
    13. 13. What About The Economy?Growing markets driven by demographics • Ex: Senior Care, Residential Repairs & Cleaning, etc.Essential services • Ex: Hair Care, Automotive, Damage Restoration, etc.Business that help other small businesses thrive • Business Coaching, Personnel Services, Sales Training, etc.Many businesses thrive in all economic conditions
    14. 14. Business Ownership Options Start a Business from ScratchBuy a Franchise Buy an Existing Business
    15. 15. Start Up Business Advantages Disadvantages• Total control • Must create systems• Make all decisions • No one to turn to for• Keep all profits help• Biggest upside • Limited financing options • Highest failure rate
    16. 16. Buy an Existing Business Advantages Disadvantages• Cash flow & good will • What is the real cash flow?• Actual historical results • What is the good will?• Attractive to lenders • Hidden seller motives• Established location & • Employee defection customer base • Higher debt service• Employees in place • Poor training/support by the• Systems may be in place former owner• Owner financing
    17. 17. A Franchise… Advantages Disadvantages• A proven, time-tested business • An seemingly endless and model that works overwhelming number of• Predictable future results concepts to choose from• Very attractive to lenders • Paying a franchise fee• Transparent due diligence • Royalties process with the franchisor and • Reporting, compliance, and existing franchisees mandatory attendance for• Recognized brand name and training, annual conferences, turn-key operating systems etc.
    18. 18. What is Franchising? Franchise HeadquartersThe creation of a distributionchannel to build brand identity Franchiseand attain market dominance… Operators QUICKLY! Customers
    19. 19. Franchise is…A license to use: • Name and trademarks • Products • Business SystemsIn exchange for: • Initial franchise fee • Ongoing royalties
    20. 20. Franchising Fact #1: Popular CategoriesFACT: • Education• Over 3,100 different • Retail franchise companies • Pet Care• In more than 80 industries • Cleaning• With over 900,000 • Real Estate operating units • Senior Care • Home Repair • IT Services
    21. 21. Franchising Fact #2:FACT: Total Investment Percent Under $100k $100 - 250k $250k - $500k Over 500k Under $100k 52.5% 6% 9% $100 to $250k 32.7% $250 to $500k 9.2% 33% 52% Over $500k 5.6% Franchise Times Magazine Survey, Franchising is All Right, Thank You
    22. 22. Financing Facts:How Much Do I Need?Typically, 25-30% of the total investment will be your money.Financing is relatively easy to get for 70-75% of the total investment including working capital.
    23. 23. Financing Facts:Sources: • Personal savings • Family, friends, or partner • Home equity line of credit • Financial Institutions • Seller financing – resale • 401K, IRA, etc.
    24. 24. Financing Facts for Vets• Patriot Express Pilot Loan Program Ideal for Veterans and other eligible members of the military community who want access to funds to start or expand a business Business must meet SBA minimum guidelines (for profit, operating in the U.S., etc.) Credit amounts up to $500,000; faster turnaround time Terms: less than 7 years = prime plus 2.25%; greater than 7 years = prime plus 2.75% Collateral: bank will take a secured interest in business assets and/or a mortgage on real estate Personal guarantees: required by all owners of 20% or more 85% guarantee: loans less than or equal to $150,000 75% guarantee: loans greater than $150,000 The program has been extended thru 2013
    25. 25. Franchising Fact #3:FACT: There is no automatic correlation between the cost of the franchise and the potential return.
    26. 26. Franchising Fact #4:FACT: Service businesses require far less capital investments and frequently yield higher returns.
    27. 27. Franchise Business Economic Outlook• It is estimated that Franchises accounted for over 7,934,000 jobs in 2011.• It is estimated that the Franchise Industry accounted for over 4.9% of the total US GDP in 2011.
    28. 28. 2012 Forecast for Franchise Industry• In 2012, franchising will – Add 168,000 new U.S. jobs – Add 13,928 U.S. units – Grow contribution to GDP 4.8 percent = $21 billionSource: IHS Global Insight
    29. 29. The Benefits of FranchisingProven, systematic approach to starting and staying in business: – Experience – Simplicity – Initial Training & Ongoing Support – Name Recognition – Sales, Marketing & Operational Systems – Culture of Teamwork
    30. 30. Franchising BenefitsYou’re in business for yourself, but not by yourself….
    31. 31. How Do You Find a Franchise That is a Great Fit?Separate thefunction of thebusiness,from the functionof the businessowner!
    32. 32. Determine Your Business Model5 Years 20 Years 10 Years Identify your Financial & Lifestyle Goals 32
    33. 33. What Are Your Transferable Business Skills? Customer Sales ServiceManagement Marketing
    34. 34. Your Business ModelEmployees Types of Customers Service or ProductBudgetBusiness Business New or Established IndustryEnvironment PreferencesFull or Part-time Room for GrowthHoursNumber of Units Other Items?
    35. 35. Business Characteristics• These are preferences• It will not be perfect• Expect some of your preferences to conflict• Be clear about your few ―must haves‖ versus your many ―nice to haves‖
    36. 36. Finding a Great FitMatch your business model withfranchisors who are looking forpeople with your characteristics,attributes, goals and businesspreferences.
    37. 37. Conducting Your ResearchWell coach you through a4-Step Research Planand you’ll determine if one of thefranchises is the right fit for you.
    38. 38. Professional Advisors AdAdditional Resources You Should Use Franchise Attorney Accountant
    39. 39. The Science of Psychology
    40. 40. Getting Started with FranNet Visit our Website: www.frannet.comClick on the Orange button:
    41. 41. Can YOU Relate?
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