Franchise Growth Partners (FGP) is a one-of-a-kind management consulting firm. Our professional services provide new and emerging franchisors a comprehensive platform which includes consulting, legal, training and an array of essential support services. Our philosophy is based on an authentic ownership experience gained through a history of formation, operations and acquisition. Consulting FGP will prepare your high level strategic plan, your tactical business operations plan detailing the day- to-day activities of training and supporting franchisees, and a financial plan calculating the initial and ongoing costs of marketing, selling, and operating a profitable franchise company. Without this necessary business planning, your Franchise Disclosure Document will be deficient before it is drafted. Legal Documentation FGPimage1 FGP has partnered with expert franchise attorneys to draft Franchise Disclosure Documents, Franchise Agreements, and Area Development Agreements at a pre-negotiated and affordable fixed rate. Training Certification FGP offers the following stage-appropriate management skills training programs at an affordable cost based on a “pay as you grow” basis: Marketing and Lead Generation newFGPimage Franchise Sales training Franchise Operations Management Financial Management CEO Leadership Development Support Services (Optional) FGP has developed seven critical operational divisions that provide strategic value to our franchisors. Clients benefit from our highly standardized services to grow their brand without investing capital on additional office space and employees. Commercial Leasing Services (Site selection, lease negotiation, and legal review) Franchisee Funding Franchise Operations System (Web-based) Franchise Operations Manuals Marketing/Sales Support Brand Development Services (Website, franchise brochures, etc.) Accounting Services (all 50 states)

1. The Advantages of Franchising
Franchise Development Program
Volume I, No. 1
INTERNATIONAL FRANCHISE ASSOCIATION
®

2. Franchising offers the following advantages to you, the franchisor:
• Control – less than company owned – generally greater than independent dealers
• The franchisor does not control the day-to-day management of the franchisee’s location
• Franchisor sets brand standards
• Products and Services
• Consumer Relationship
• Brand Management
• Marketing
• Unit Investment and operating costs are transferred to franchisee
• Accelerates expansion
• No contingent liability on expansion capital
• No contingent liability on real estate
• No equity dilution
• Market Penetration
• Increased brand recognition as more and more locations open
• Ability to serve smaller markets that might not be attractive for corporate development
• Accelerates market dominance over local competitors
• Improves acceptance and terms from landlord
• Increases value of the brand
• Collective buying power
• Reduces cost for products, equipment, etc., because of system purchasing capacity
• Shared Resources
• Warehouses, production, and distribution
• Leverages purchasing power
• Brand Marketing through system marketing fund
• All contribute to more professional advertising and marketing programs and materials
• Ability to maintain web presence
• Franchisee manages the day-to-day activities of their local business to system standards
• Labor
• Inventory
• Franchisee responsible to execute to brand standards
• Reduces per unit cost of support for franchisor
• Franchisee liable for local operations – substantially reduces risk of vicarious liability
• Franchisee motivated to succeed
• Knowledgeable about local markets
• Source of new product and service ideas
• Franchisee at risk for unit performance
• Generates revenue
• Fees – initial and ongoing
• Rebates
• Franchisee purchases
Advantages
to You
Franchising offers the following advantages to individual business owners (franchisees):
• Use of franchisor’s brand
• Use of franchisor’s operating system
• Initial Assistance
• Business establishment and start-up
• Site selection and construction assistance
• Training
• Staffing and hiring guidelines
• Market introduction assistance
• Ongoing Assistance
• Business consultation and guidance
• Reduced cost of goods
• Marketing assistance
• Ability to be a part of a larger whole
Advantages
to Franchisee
2
The Advantages of Franchising

3. The Advantages of Franchising
What operating systems should you have in place to operate your business?
Customer Experience
You must deliver the customer experience on a consistent basis:
• Product/Service
• Preparation of Product
• Location Criteria (site selection, lease negotiation, and legal review)
• Build-Out and Décor
• Labor and Scheduling Requirements
• Equipment
• Vehicle Requirements
• Ingredients, Products, Supplies
• Advertising
• Customer Service
• Pricing
• Inventory
• Suppliers and Vendors
• Training
• Can be codified into Operations Manuals
• Can be operated by a trained manager
Training Programs
You will need the following training programs in place:
• All positions in the business
• Franchisee and their staff
• Whys as well as Hows
• Consistent results
• Required skill set to be hired
• Specialized backgrounds
• Time to achieve proficiency
Marketing & Advertising Programs
You will need the following marketing and advertising programs:
• Brand Identity and Development
• Pricing Philosophy
• Local Market Adaptations
• Advertising and Marketing Materials
• Assist franchisees to introduce the concept or the brand into a new market
• Corporate Identity
Legal & Regulatory Requirements
You will need the following legal and regulatory requirements in place:
• Federal Level
• State Level
• Local Level
• Licenses and Certifications
• Franchise Ownership
Acceptable Return on Investment
Is there the opportunity for an acceptable return on investment?
• No Guarantees
• Franchisors and franchisees can and do fail
• Opportunity for an acceptable return based on economic modeling
• Franchisor
• Reasonable time and growth rate
• Franchisee
• Earn a living or build a business
Your Company & Franchising
You must identify whether your company culture lends itself to a franchising model:
• Franchises are governed by the contract but managed by relationships
• Do you care what others think?
• Can you enforce standards against a “friend”?
• Can you follow the requirements of the contract?
• Can you comply with franchise regulations?
Overview of the
Franchise System
3

4. The Advantages of Franchising
Overview of the
Franchise System
(continued)
Products & Services
You must be able to supply products and services to your franchisees:
• Suppliers’ relationships in place
• Are your current suppliers positioned to grow with you?
• Do you have the ability to protect your “secret sauce”?
• Will your suppliers work with you while you grow your franchise system?
• Do you have backup suppliers identified?
Competitive Franchise Offer
You must identify how competitive your franchise offer is:
• Pool of prospective franchisees
• Affordability of the franchise
• Other terms of the agreement
• Operating standards
• Territory
• Fees and required purchases
• Other rights/obligations
• Ability of franchisees to obtain financing
Franchise Expectations
You must consider how realistic your franchise expectations are:
• Growth of franchise network
• Ability to provide opening and ongoing support
• Actively evolve and manage the brand
• Provide management tools to franchisees
• Enforce standards
• Financial investment required to begin franchising
• Expected revenue from franchising
Setting the
Expectations
You are embarking on a new exciting voyage, and in your initial optimism you might not anticipate
the potential storms to come:
At some point your growth will plateau! Whether you hit this growth barrier at 10, 30, 60, or 90
operating units, the solution to achieving a breakthrough begins in asking the right question.
We are tempted to ask the wrong question first, “How do I get my franchise system to grow?”
The right question is, “What is preventing my franchise system from growing? What is my
Achilles’ heel?”
It is essential to recognize your specific Achilles’ heel and take proactive measures to prevent plateauing.
The five major Achilles’ heels to every franchisor are: Leadership, Management, Operational Performance
(Franchisor/Franchisee), Administration, and Financial Management.
You need to think about your exit strategy. Will you sell the company, go public, leave it as a legacy
for your children, hire a professional management team so you can retire, etc.? These are important
decisions to be made before we can properly design your franchise company. You must keep the end
in mind so that your franchise company is built on a foundation to achieve this goal.
Breaking Through
Growth Barriers
Keeping the End
in Mind (Exit Strategy)
Your Role
as a Leader
There are a number of components essential to your success, growth, and profitability. More than likely
you will delegate many of these; nonetheless, you maintain ultimate accountability. The following
factors are necessary to build a solid base for a franchise company:
• Leadership
• Management
• Operational Performance (Franchisor/Franchisee)
• Administration
• Financial Management
As your strategic partner in franchise system development, Franchise Growth Partners
holds itself responsible to growing with you through novice, apprentice, journeyman to
master-level CEO leadership skills.
3625 Thousand Oaks Blvd., Suite 228, Westlake Village, CA 91361
phone: 800.471.1682 • fax: 805.496.4284 • franchisegrowthpartners.com INTERNATIONAL FRANCHISE ASSOCIATION
®