Understanding Franchising Part 1

1,622 views

Published on

Franchising has become a popular path for many entrepreneur oriented executives to following when it is their time to take control of their own destiny. Learn more about franchising, how it works and how to find the right one for you.

Published in: Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,622
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
114
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Understanding Franchising Part 1

  1. 1. Presented by: Marvin L. Storm
  2. 2. Types of Entrepreneurs• Extreme Entrepreneurs• Innovator Entrepreneurs• Founder Entrepreneurs• FranPrenuer
  3. 3. Entrepreneurial Personality• Lone Wolf vs. Team Player• Entrepreneur vs. Franchisee
  4. 4. Understanding Franchising• Licensing Concept vs. Buying
  5. 5. Understanding FranchisingTypes of Franchise Structures: Direct Franchising Regional Developer Master Franchising
  6. 6. Finding a FranchiseTypes of Franchisees: Unit Franchisee Multi-Unit Franchisee Area Developer Franchisee
  7. 7. Types of Franchises Franchise Industries: Business Services FranchisesMedical Franchises Small Business FranchisesSenior Care FranchisesRecreation Franchises
  8. 8. Be Aware Of:• Financial strength• Experience level ofmanagement team• Validation of franchisees• Litigation• Mature vs. emerging franchisors
  9. 9. Acquiring an Existing Franchise Location• Same process as buying a business• Additional criteria: Approval of Franchisor
  10. 10. Benefits of Franchising• Brand• Valuation at exit• Learning curve reduced• Technology• Marketing• Support• Systems are a significant competitive advantage
  11. 11. Right For You?• No right or wrong answer
  12. 12. Right For You?• No right or wrong answer• But an answer that needs to be answered.
  13. 13. Right For You?• No right or wrong answer• But an answer that needs to be answered.• Never become a franchisee unless you are a team player
  14. 14. Right For You?• No right or wrong answer• But an answer that needs to be answered.• Never become a franchisee unless you are a team player• Never rely on a franchisor for your success – are only a business partner enabling your success – you still have to make your own success
  15. 15. A Brief History of FranchisingThe Whole Story in an Abbreviated Form
  16. 16. A Brief History of Franchising• What is Franchising? - A French Word - 1851 Albert Singer – the First US Franchisor
  17. 17. A Brief History of Franchising• What is Franchising?• Two Type of Franchise Business Models?
  18. 18. A Brief History of Franchising• What is Franchising?• Two Type of Franchise Business Models? -Trademark Franchising
  19. 19. A Brief History of Franchising• What is Franchising?• Two Type of Franchise Business Models? - Trademark Franchising - Business Format Franchising
  20. 20. A Brief History of Franchising• What is Franchising?• Two Type of Franchise Business Models? - Trademark Franchising - Business Format Franchising - History of Franchise Regulations
  21. 21. A Brief History of Franchising• What is Franchising?• Two Type of Franchise Business Models? - Trademark Franchising - Business Format Franchising - History of Franchise Regulations  The McDonald’s Story
  22. 22. The McDonald’s StoryRay Kroc sells dozens of maltmixers to a hamburger joint inSan Bernardino, CA
  23. 23. The McDonald’s StoryKroc visits McDonalds tofind out what is going on?
  24. 24. The McDonald’s StoryKroc learns about 15₵hamburgers, fries andmalts?
  25. 25. The McDonald’s Story Kroc acquires the licensing rights from the McDonald Brothers and returns to IL to launch a franchise company1st Franchise Location in Des Plaines, IL
  26. 26. The McDonald’s StoryIn the next 10 years Kroc’s focus ison quality, convenience and aconsistent brand experience andgrowing the franchise system to over200 franchise units in the mid-western states. The advertising focused on good food, fast and at a good value
  27. 27. The McDonald’s StoryKroc takes the company public in1965 making millionaires out of manyof the original franchisees and theysay………the rest is history
  28. 28. A Brief History of Franchising• What is Franchising?• Two Type of Franchise Business Models? - Trademark Franchising - Business Format Franchising - History of Franchise Regulations  The McDonald’s Story  Fraud & Abuse in Franchising
  29. 29. Why Are There Regulations?• Stock Crash of 1929 lead to the Securities Exchange Laws of 1933 and 1934.• The Enron collapse lead to Sarbanes Oxley disclosure requirements• The recent financial malaise that began in 2007 will result in new regulations in the financial community and banking industry• The abuses in franchising in the 1960’s & 1970’s lead to the adoption of franchise requirements by franchise companies
  30. 30. A Brief History of Franchising• What is Franchising?• Two Type of Franchise Business Models? - Trademark Franchising - Business Format Franchising - History of Franchise Regulations  The McDonald’s Story  Fraud & Abuse in Franchising  UFOC in 1972-1978
  31. 31. A Brief History of Franchising• What is Franchising?• Two Type of Franchise Business Models? - Trademark Franchising - Business Format Franchising - History of Franchise Regulations  The McDonald’s Story  Fraud & Abuse in Franchising  UFOC in 1972-1978  FDD adopted in July 2009
  32. 32. A Brief Historyof Franchising Question?
  33. 33. A Brief History of Franchising The Next Step in Our Discussionon the FDD is to review the actual Franchise Disclosure Document

×