Franchising Is It a Strategy That Fits You?

Is Franchising Right for You? 70% of all people have thought seriously about owning their own business. Is it the right venture for you?

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

Is it the right venture for you?

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

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

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?

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?

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.

“ 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.

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?"

“ 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?"

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.

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.

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.

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.

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.

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.

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!

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!

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

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

Franchise Success Franchises have a 90%+ success rate. Most people can’t even predict that they can keep their jobs with a 90% certainty.

Franchises have a 90%+ success rate.

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

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

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

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

Leverage growth through resources of stakeholders

Knowledge, experience, effort, purchasing power, financial

Similar goals & unified thinking among participants

Strategic-Partnership

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

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

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

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

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

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

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

Collaboration – Share best and worst practices with similar people

Systems continually adjusted, changed, & improved

Training systems

Sales & marketing strategies and systems

Manuals & other documentation

Value of Franchise Systems cont… Letters, contracts, agreements, documents – all in place Development costs – shared resources Purchasing power Many others…

Letters, contracts, agreements, documents – all in place

Development costs – shared resources

Purchasing power

Many others…

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

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

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

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

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.

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.

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

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

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

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

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

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

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

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

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?

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?

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?

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?

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

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

Realizing the Dream It will never be the perfect time where all the stars line up… Opportunity Finances Family Market Conditions Demographics Advisors

It will never be the perfect time where all the stars line up…

Opportunity

Finances

Family

Market Conditions

Demographics

Advisors

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

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

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

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

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

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

Golden Opportunities If you don’t follow your dream, you will be working for someone who did!

If you don’t follow your dream, you will be working for someone who did!

Contact Information Traci Mousetis, Owner Ben Adamo, Owner www.AffordableBusinessConcepts.com Office: (480) 626-2287 Fax: (480) 706-0385 Toll-free: 866-388-3576 E-mail: info@abcbyob.com

Traci Mousetis, Owner

Ben Adamo, Owner

www.AffordableBusinessConcepts.com

Office: (480) 626-2287

Fax: (480) 706-0385

Toll-free: 866-388-3576

E-mail: info@abcbyob.com