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Employee To Entrepreneur Webinar

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Introductory webinar for people who are interested in self-employment

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Employee To Entrepreneur Webinar

  1. 1. “ From Employee to Entrepreneur - Exploring Franchise Ownership as a Career Option”
  2. 2. Today’s Speakers <ul><li>Tim Stubbs, The Entrepreneur’s Source </li></ul><ul><li>Coach/ Consultant/ Owner of an independent office of TES </li></ul>
  3. 3. The Entrepreneur’s Source – Who we are – What we do <ul><li>Coaching Firm – 240 offices nationwide </li></ul><ul><li>Provide education & coaching to people who are exploring biz ownership as a career option </li></ul><ul><li>Help clients identify and research options that match their background, skills, interests, & earnings/lifestyle goals </li></ul><ul><li>No cost for our placement coaching services </li></ul><ul><li>95% of our clients discovers options that they would not have explored on their own. </li></ul><ul><li>Also provide business coaching to Franchisors & Franchisees </li></ul>
  4. 4. “ New Career Economy” <ul><li>Job Market has changed permanently </li></ul><ul><li>Workers will need to change jobs & industries many times during career </li></ul><ul><li>Lots of downsizing & jobs going overseas </li></ul><ul><li>Less security & predictability </li></ul><ul><li>Either no pensions or reduced pensions </li></ul><ul><li>Reduced or eliminated benefits </li></ul>
  5. 5. Why are people exploring business ownership? <ul><li>Take control of their career & professional life </li></ul><ul><li>Create Income, Lifestyle, Wealth, & Equity (ILWE) for themselves instead of for other people </li></ul><ul><li>Professional Satisfaction / Make a difference </li></ul><ul><li>Use their professional skills to build & manage their own team </li></ul>
  6. 6. Why a Franchise? <ul><li>Take advantage of proven business model & often well-known brand </li></ul><ul><li>Many levels of support & training </li></ul><ul><li>Surround yourself with industry experts </li></ul><ul><li>Usually no direct industry experience needed </li></ul><ul><li>Marketing tools & lead generation programs </li></ul><ul><li>Be in business for yourself, but not by yourself </li></ul>
  7. 7. What exactly is Franchising? <ul><li>Franchising is NOT a business or an industry. </li></ul><ul><li>It is a method of distributing products & services to consumers. </li></ul><ul><li>It utilizes a network of local owners (“locally owned & operated”) operating under a shared brand. </li></ul><ul><li>Franchisees pay the franchisor for the right to do business under that name, and operate under a specified, controlled business method or format. </li></ul><ul><li>Franchisors provide significant initial and continuing services and support. </li></ul>
  8. 8. How widespread is Franchising? <ul><li>Over 5,000 franchises in the US </li></ul><ul><li>Cover everything from Animal Care to Yard Work </li></ul><ul><li>Ex.) Art classes for kids, decorating, websites, personal training, pet services, spas </li></ul><ul><li>Chains vs. Franchises </li></ul><ul><li>Ex.) Starbuck’s is NOT a franchise </li></ul>
  9. 9. Financial Impact of Franchising <ul><li>As recently as 2008, franchises accounted for: </li></ul><ul><ul><li>Over 1.6 trillion dollars in sales </li></ul></ul><ul><ul><li>775,000 business units </li></ul></ul><ul><ul><li>9.9 million jobs </li></ul></ul><ul><ul><li>41% of U.S. Retail Sales </li></ul></ul>
  10. 10. How big are franchise systems? <ul><li>8% of franchises have over 500 units </li></ul><ul><li>34% of franchises have 50-500 units </li></ul><ul><li>58% of franchises have less than 50 units </li></ul>
  11. 11. How much do franchises cost? Total Investment (estimates ) <ul><li>$25K-$75K: Home based, sales, coaching/consulting, B2B professional services, distribution, some part time </li></ul><ul><li>$75K-$150K: Service, Mobile, Home Improvement, Professional w/employees (staffing, tax prep, etc.) </li></ul><ul><li>$150K-$300K: Light retail, small restaurant, small fitness, light manufacturing </li></ul><ul><li>$300K +: Large retail, large restaurant, large gyms, hotels, storage, location-based </li></ul>
  12. 12. Territory (defined in franchise agreement) <ul><li>“ Exclusive” or “Non –Exclusive” access to a market or geographic area </li></ul><ul><li>May be based upon: </li></ul><ul><ul><li>Population </li></ul></ul><ul><ul><li>Number of businesses </li></ul></ul><ul><ul><li>Registered # of vehicles, number of “qualified households”, or other indicator of potential business base </li></ul></ul><ul><ul><li>Varies depending on company & industry </li></ul></ul>
  13. 13. Franchise options & role of owner <ul><li>Ownership Options </li></ul><ul><ul><li>Single Unit </li></ul></ul><ul><ul><li>Multi Units </li></ul></ul><ul><ul><li>Area Developer </li></ul></ul><ul><ul><li>Master Developer </li></ul></ul><ul><ul><li>Co-Brand </li></ul></ul><ul><li>Owner Roles </li></ul><ul><ul><li>Owner Operator </li></ul></ul><ul><ul><li>Manager </li></ul></ul><ul><ul><li>Manager & Developer </li></ul></ul><ul><ul><li>Recruiter, Manager, Trainer, Mini-Franchisor </li></ul></ul><ul><ul><li>Own & Manage several brands </li></ul></ul>
  14. 14. Franchise Terminology <ul><li>Franchise Fee: ( one-time fee at time of signing agreement </li></ul><ul><li>Total Investment: amt. you’ll spend including FF to open on day # 1 </li></ul><ul><li>Royalties: % of gross or flat fee </li></ul><ul><li>Ad Fund: % of gross or flat fee </li></ul><ul><li>Term: (# years of agreement) </li></ul><ul><li>Renewal: terms outlined in agreement </li></ul><ul><li>License Transfer: selling your franchise </li></ul>
  15. 15. Franchise Disclosure Document (FDD) <ul><li>Required by Federal Trade Commission </li></ul><ul><li>Contains information ranging from start up costs to terms to sell or transfer your agreement </li></ul><ul><li>Franchise Disclosure Document (FDD) includes: </li></ul><ul><ul><ul><li>A copy of the franchisor's standard franchise agreement </li></ul></ul></ul><ul><ul><ul><li>The franchisor's audited financial statements </li></ul></ul></ul><ul><ul><ul><li>Agreements that the franchisor would require to be executed </li></ul></ul></ul><ul><ul><ul><li>Any arbitration or litigation </li></ul></ul></ul><ul><ul><ul><li>Includes a list of the current franchisees and franchisees who have left the system (in the last 12 months) </li></ul></ul></ul><ul><ul><ul><li>You need to submit an application to obtain an FDD </li></ul></ul></ul><ul><li>Some have an ‘Earnings Claim’ – Item 19 </li></ul>
  16. 16. How do I finance my franchise? <ul><li>Typically 25% down payment (liquid assets) </li></ul><ul><li>Financing Options </li></ul><ul><ul><li>Home Equity (HELOC) </li></ul></ul><ul><ul><li>Family, Partners, Angel Investors </li></ul></ul><ul><ul><li>Stocks and Bonds </li></ul></ul><ul><ul><li>SBA Loans </li></ul></ul><ul><ul><li>Signature Lines of Credit </li></ul></ul><ul><ul><li>401K or Pension Conversion (info available from TES Coaches) </li></ul></ul>15
  17. 17. How do I find “the right franchise business”? <ul><li>Franchising is counter-intuitive – it is not like getting a job, or starting a new company </li></ul><ul><li>Most franchises DO NOT require industry experience – they will train & support you </li></ul><ul><li>Franchisors want franchisees to market & manage the business (no technicians please!) </li></ul>
  18. 18. Preferred Mindset: Use the business as a vehicle to get where you want to go Inputs: Business Outputs: <ul><li>Experience </li></ul><ul><li>Skills </li></ul><ul><li>Time </li></ul><ul><li>Energy </li></ul><ul><li>Personality </li></ul><ul><li>Resources </li></ul><ul><li>Income </li></ul><ul><li>Lifestyle </li></ul><ul><li>Wealth Building </li></ul><ul><li>Equity </li></ul><ul><li>Personal & Professional Satisfaction </li></ul>
  19. 19. Our TES Approach <ul><li>#1 Establish your goals, needs and expectations – what you want your life to look like – (ILWE) </li></ul><ul><li>#2 Determine what you really want to get from owning a business – in areas of lifestyle, earnings, day-to-day activities, professional satisfaction </li></ul><ul><li>#3 Identify you transferable skills, and be honest with yourself about your strengths, weaknesses, & circumstances </li></ul>
  20. 20. Our TES Approach - cont. <ul><li>#4 Gather the critical information (earnings, ramp-up time, actual results, lifestyle, relationship between franchisor & franchisees) through structured, inside research (conversations, interviews, fact gathering, & visits)…. </li></ul><ul><li>… .versus passive, outside research (internet, publications, & opinions of others) </li></ul>
  21. 21. Don’t be a “Midnight Surfer”! <ul><li>Researching franchises & business opportunities is all about having conversations & asking questions </li></ul><ul><li>Ask Franchisor – support, training, history, territory, advertising, site selection, role of owner </li></ul><ul><li>Ask Franchisees – why they chose that biz, earnings, ramp-up time, lifestyle, relationship with franchisor, lessons learned </li></ul>
  22. 22. Using a Coach to assist you <ul><li>Consider using a professional who: </li></ul><ul><ul><li>Understands your goals & needs </li></ul></ul><ul><ul><li>Helps you make fact based decisions, not emotion based </li></ul></ul><ul><ul><li>Saves you time & money </li></ul></ul><ul><ul><li>Has access to hundreds of options </li></ul></ul><ul><ul><li>Has experience in franchising & business ownership </li></ul></ul><ul><ul><li>AIM & FAST – education </li></ul></ul><ul><ul><li>Can help you obtain financing </li></ul></ul>
  23. 23. Financing Options <ul><li>Our guest is: </li></ul>
  24. 24. How a Franchisor helps you <ul><li>Our guest is: </li></ul>
  25. 25. Wrap-up <ul><li>Discussion </li></ul><ul><li>Q & A </li></ul>

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