My name is Richard Ashe, I am a former Marine and have over 30 years of business experience in building and managing businesses for Chase Manhattan Bank, Xerox, Compaq and HP Computer Corp, Symantec as well as a few start-ups you have never heard of. I have been an entrepreneur for over ten years and have spent the last 5 plus years researching and exploring franchise opportunities. I am currently the owner and a Certified Franchise Adviser of Veteran Franchise Centers Houston. Thanks for your service and allowing me to speak with you today; How many have considered franchising as an option for a start-up business? For those who haven't considered it I will discuss why franchising may be an option and the reasons why.
Franchising is a means for a company to expand and share a business concept or business model in an efficient and cost effective way. In exchange for a fee the franchisee receives the right to market, sell use the trade marks as well as training on the specific operational business process, support and vendor or supplier discounts on materials, supplies and products.
Franchising is not new and has a long and distinguished history that goes back over 150 years starting with Albert Singer in 1860. One of the most successful early franchises was started by Martha Matilda Harper which spanned over 50 years as well as across going international Canada, London and Paris. The IFA was formed to provide governance to the franchise community and develop standards and rules to ensure compliance to rules.
50% of small business start-ups fail in the first year. Another 50% of the remaining never make 5 years. In contrast the success rate of franchises is 80%. The two major reasons fro failure are failing to follow the system or under capitalization. Also, an important consideration when starting your business is your exit strategy. Having an exit strategy is just as important as determining your initial investment. It is a critical area that people should think about. Which one of these businesses do you think has a better exit strategy?
There are over 75 different industries in which franchises are available. So no matter which industry you want to be in there is probably a franchise available. If you already own a business there are programs in which you could potentially convert into a national brand franchise as a means to expand your business or add national accounts or implement business process improvements. Just as there are many industries there are also many investment levels and different business models to select from.
The economic impact of franchising is enormous. One in twelve business is a franchise. 12.5% of Jobs Today are Attributed to Franchising Nearly 50% of all retail sales come through franchising. Nearly 86% of all franchises opening in 60 industries during the past 5 years are still under the same ownership. Over 3,200 franchises are sold every week. A new franchise is opened every 8 minutes of each business day. Source: U.S. Department of Commerce
Franchisor has a vested interest in your success. Franchisor offers market analysis / competition. System provides collective buying power / lower operation costs. National advertising strength to build awareness. Training and support programs and personnel. Ongoing research and product development. Build greater value and equity in the business.
Veterans make great franchisees because of their military experience. The same personality traits that led to uccess in the military and the sames traits that lead to success in franchising. There are over 66,000 veteran owned franchises.
Getting into business is a major investment and carries risk. One way that a franchise mitigates risk is with a strong support system. Having a network of business owners running the same concept and business model provides you with a network of knowledge throughout the lifecycle of your business. The network reduces mistakes as well as provides more heads are better than one ideas and solutions to problems and challenges as your business grows and evolves. How can I mitigate my risk, what questions should I be asking myself before I make a commitment to starting any business, not just franchising.
VetFran was started after 9/11 and continues to grow and expand today. VetFRAN is a part of the IFA and focuses solely on finding s ways to help more veterans start their of franchise business. They are the political action committee that keep veteran concerns in front of our legislators as well as recruit, negotiate and manage the organizations, both franchisors and suppliers that want to do business with veterans. Currently there are over 400 participating franchisors that participate and their program is growing.
Good to know. Based on my experience, I think every business owner needs to invest the time to develop a business plan, franchises included. The BP is a living document and provided the business owner with a detailed roadmap of how to reach their goals. Without one business owners tend to stray away from their goals. Do franchisors help you formulate a business plan? On the last slide you mentioned the FDD. What is an FDD.
So what's the process and how would our audience get started.
YOUR NEXT CAREER MOVE A BUSINESS OF YOUR OWN! PRESENTED BYGrowing America With Americas Best 1 www.VeteranFranchiseCenters.com
What is Franchising?• A marketing method in which the owner of a product or service, known as the “franchisor”, offers the right to operate and manage his product & service to others, the “franchisees”, in return for a fee and ongoing royalty payments. Franchisor Franchisee - Know-How - Support - Initial Fee - Royalty, - Trademark - InfrastructureGrowing America With Americas Best www.VeteranFranchiseCenters.com 2
How did Franchising Come About?• 1881 – 1929: Martha Matillda Harper Hair Salo• 1902 – 1930’s: Rexall Drug Stores, Western Auto, Ben Franklin, Super Value Stores, Oil Companies for Gas Stations.• 1950’s – 1960’s: McDonalds, KFC, Holiday Inns, Laundry and Dry Cleaning, Tax Preparation, Travel and Recreation, Quick Printing, etc.• 1960 – International Franchise Associations is founded by Bill Rosenberg of Dunkin’ Donuts.• 1979 – FTC adopts rule requiring pre-sale disclosure of information to prospective buyers.Growing America With Americas Best www.VeteranFranchiseCenters.com 3
Entrepreneurship -vs Frantrepreneurship -VS-Growing America With Americas Best www.VeteranFranchiseCenters.com 4
Not Jut Burgers & Fries... More than 75 Sectors of Business• Accounting & Tax • Restaurants• Automotive • Hair salons• Business Services • Home furnishings• Children’s Services • Hotels/Motels• Clothing & Shoes • Janitorial Services• Construction • Laundry/Dry Cleaning• Computers/IT • Lawn & Garden• Educational Services • Maid Services• Employment Services • Printing Services• Environmental Services • Real EstateGrowing America With Americas Best www.VeteranFranchiseCenters.com 5
Economic Impact of Franchising• One in twelve business is a franchise.• 12.5% of Jobs Today are Attributed to Franchising• Nearly 50% of all retail sales come through franchising• Nearly 86% of all franchises opening in during the past 5 years are still under the same ownership• Over 3,200 franchises are sold every week• A new franchise is opened every 8 minutes of each business day. 4314 veteran became franchisees since 2011** ‣ Source: U.S. Department of Commerce ‣ International Franchise Assoc.**Growing America With Americas Best www.VeteranFranchiseCenters.com 6
7 Benefits of Franchise OwnershipFranchisor has a vested interest in your success.Franchisor offers market analysis / competition.Collective buying power / lower operation costs.National advertising strength to build awareness.Training, support programs and personnel.Ongoing research and product development.Build greater value and equity in the business. “In business for yourself not by yourself.”Growing America With Americas Best www.VeteranFranchiseCenters.com 7
Franchising is NOT...• A guarantee of success ‣Like any business it has risks• For everyone ‣Willingness to stick to the system• A short-term commitment ‣Average contract is 10 yearsGrowing America With Americas Best www.VeteranFranchiseCenters.com 8
Why Veterans OutperformDisciplinePerseveranceTeamworkLeadershipCommunity According to PWC the average veteran-owned franchise businesses compared very favorably to all veteran owned businesses, generating average gross receipts of $2.1 million compared to $445,487 for all veteran-owned businesses.Growing America With Americas Best www.VeteranFranchiseCenters.com 9
Ecosystem Entrepreneur vs Frantrepreneur Entrepreneurship Frantrepreneurship Organizations Vendors Franchisor FranchiseesGrowing America With Americas Best www.VeteranFranchiseCenters.com 10
Financial Incentives for Vets★ VetFran is a voluntary effort of IFA member-companies that is designed to encourage franchise ownership by offering financial incentives to honorably discharged veterans.★ In 2002, the IFA and the U.S. Dept of Veterans Affairs signed an official memorandum to jointly promote the VetFran program.★ Over 400 franchise companies participate in the program.★ 4300+ Veteran Owned Franchises and Growing. Taking advantage of the financial incentives veterans had acquired 4312 - October 2012 VetFran Report★ Action Item - Write a Letter to CongressThe Veterans Business Ownership Act of 2011 | A proposal to empower Americas military veterans to create businesses and jobshttp://act.vetbizgibill.org/4115/take-action-to-help-our-veterans/?src=widgGrowing America With Americas Best www.VeteranFranchiseCenters.com 11
Questions to Ask Yourself While Searching for Your Opportunity The first step in finding the perfect franchise is to look within you and not within franchising. With literally thousands of franchise opportunities available, if you try to evaluate them before you evaluate your own wants, needs, and capabilities, your search for the business of your dreams will more than likely become a nightmare. Ask yourself these questions: • Why do I want to own my own business? • What am I looking for? • How much am I willing to invest? • Can I build equity in my business? • Will owning a business make me happy?Growing America With Americas Best www.VeteranFranchiseCenters.com 12
5 Common Mistakes to AvoidNot reading and understanding the Uniform Franchise Disclosure Document (FDD) and Franchise Agreement.Not contacting current franchisees.Not having enough working capital.Not developing a forecast or business plan.Not developing a marketing strategy.Growing America With Americas Best www.VeteranFranchiseCenters.com 13
Why Work with VFC? We provide you with free education! We define your qualifications! We provide valuable insight on franchise companies! We provide a consultive approach to helping you!Growing America With Americas Best www.VeteranFranchiseCenters.com 14
Retired General Colin Powell “An important attribute in successful people is theirimpatience with negative thinking and negative acting people. ...those who never succeedthemselves are always first to tell you how.”Growing America With Americas Best www.VeteranFranchiseCenters.com 15
Thank You! Richard Ashe President, Certified Franchise Advisor Veteran Franchise Centers – Houston firstname.lastname@example.org 713 849 9642Growing America With Americas Best 16 www.VeteranFranchiseCenters.com