Category Archives: Franchise Opportunities

Is There a Limit to How Many Franchises You Can Own?

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The benefits of franchising are its low priced capital yet at the same time earns sizeable income or profit. This is the reason why most restaurants love franchising. Although a franchise opportunity is a good business, some franchisors still think they need to operate on other locations to keep their credibility and earn more franchisees. Other continues to buy franchise and operate in different areas to check out new concepts that may or may not work for them.

Despite the number of units a franchisor own, the big question still remains and that is how much is the percentage profit of the company ownership? Some restaurant executives claimed that you’ll only know the amount once you know it. Confusing right? A conference in Four Seasons Las Vegas was held, “Franchise Finance & Growth” where most of the panel present in the conference were restaurant executives and they indeed claimed that the percentage is not done in magic. This was in fact said by Jim Greco who was the previous owner of Sbarro and Bruegger’s.

Most successful franchisors have long been unloading in different locations such as the famous Applebee’s or the Burger King. On the other hand, there are some franchisors who still believed to buy franchise based on percentage. According to the chief executive officer of Wingstop which is based on Texas, the practice of holding on to an owned franchise is not really needed. Charlie Morrison thinks that franchisors need to explore other places to check and better understand variables of other market consumers and its locations.

Lastly, Jim Greco provided a thought to ponder to those who want to buy franchise. He said never to combine a company to a franchise. By combining these two entities may result in chaos or conflicts. According to Greco, creating multiple franchises gives you an idea of the variable from one store to another. Franchise opportunity is everywhere but it must be understood properly to run it smoothly. Having multiple franchises is good and you’ll just know what ratio is enough once you’re starting to profit enough. After which, grabbing a franchise opportunity will then be considered as worth it.

Research Shows Steady Growth for Franchise Opportunities

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Franchise opportunities are growing because the franchise business is on a roll! According to the International Franchise Associaiton and FRANdata, the environment for franchising businesses has constantly grown for the past three years and there’s no sign of it stopping in the near future.

Reports show that the demand for new lending capital is at $11.7 billion and franchise financing is at a close $9.5 billion.  And the gap between these two continues to shrink from 2010 to 2012.  Bank projections also indicate that there will be an increase in demand for franchise financing.  People are now aware that investing on franchise opportunities make money faster compared to putting up a new business and introducing a new brand in the market.

Jon Luther, IFA chairman, says that franchising growth has created a lot of jobs in many locations.  This is helping the economy of that region.

It would take about $30,000 to put up a new business from scratch, according to the Business Finance Store.  And the risks are even higher if you’re building everything from the ground up, including a good reputation for your brand name.  This is why a lot of entrepreneurs are turning to franchising instead.  Some franchises, some even real good ones, can start with just a few thousand bucks.

One good example is a homebased franchise opportunity that can get started with just $1,500.  The benefits are just the same as putting up your own franchise retailing business but minus several overheads. You will get noticed through brand recognition; this is how franchisees get success faster compared to new brand names in the market.  You won’t need to pay for equipment, monthly staff salary, rent, and other expenses.  You can easily do this in the comforts of your home and it’s a one man show.  If you’re internet savvy then this is an ideal opportunity for you.

For those who want to roll up their sleeves and be more hands-on with their business can invest on franchises such as the Soccer Shots. Their business is all about soccer development programs for kids who are 2 to 8 years old.  They’re start up investment is only $13,395. It’s not even half of what you’ll normally need in a startup biz.

The good news is, lenders now recognize that franchise businesses know how to make money faster that’s why a lot of lenders have opened up doors for entrepreneurs who want to venture into franchising.    Some entrepreneurs haven’t even realized that financing a business with retirement funds is an good option.

China’s Luxury Market Evolving at Alarming Rate

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Anyone who wants to learn how to start a business can start by thinking of what products are currently in demand at the moment, how long that demand will last, and how to supply that particular consumer need or want in an efficient and cost-effective manner.

Those aiming to acquire certain franchises for sale will be interested to know that there’s an ongoing purchasing trend happening with the Chinese consumer market right now. Based on statistics released by personal luxury brands – including Prada, Gucci, Dior and Burberry – a large portion of their revenues generated is currently being driven by Chinese consumers.

Prada recently announced a 30 percent year-on-year increase in net income during 2012’s third quarter, with sales in China increasing by a whopping 33 percent during the same period. Moreover, roughly 50 percent of the company’s sales to the Chinese are raked in from stores residing from outside the country.

Observers believe say that the fashion house’s impressive figures clearly denote the Chinese’s ever-growing refined tastes, and their need to satisfy this insatiable desire through the purchase of luxury goods.

Boston Consulting Group estimates that the Chinese will have spent $41.5 trillion dollars on such merchandise by the end of the decade. This organization also predicts that the country’s annual $2 trillion expenditures witnessed in 2010 will jump to $6 trillion by 2020.

“The Chinese consumer has a profound belief that they deserve luxury products now. They had fifty years with so little, and now, many can afford to buy luxury goods,” says Francois Pinault, CEO of the French luxury producer and retailer PPR (originally known as Pinault-Printemps-Redoute.)

“Their growth in demand is rooted in an expression of individualism in the way you dress. It is a way to differentiate yourself from friends and neighbors. Chinese consumers buy to treat themselves. This China market has evolved faster than any other market in the world.”

In China – as well as other locations across the world – luxury franchises for sale offer their owners an excellent opportunity to capitalize on this trend of significantly increasing demand for premier commodities.

Those within the early stages of learning how to start a business may be interested in knowing that experts are predicting this trend to continue for a diverse range of lux items and services, including, clothing, accessories, watches, home goods, wine, health care and education.

Service Industry Franchises Performing Well

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Higher employment and the recession have slowed existing home sales and have also spurred the surge of franchises especially in the service sector, which deals on fixing things.

From the Main St. to Wall St., recession-proof property owners and businesses needing skilled workers to construct saleable buildings have been benefitting from laid-off employees looking for job security.

Marketing and operations VP of Texas-based company The Dwyer Group, Doug Dixon stated that the new franchisees will probably increase between 25-30% in the current year compared to last year.

Dwyer, with 1,500 franchises scattered in 10 countries and 16 in the Massachusetts area earned a total of $77.5 million revenues in the previous year.  The company operates 7 franchise types – 4 in the area of Central Massachusetts, 2 Mr. Rooters, 1 Mr. Appliance, and 1 Mr. Electric.  Purchased by private equity corporations led by New York-based TZP Group LLC in 2010, its estimated value is $150 million.

The third quarter report of the International Franchise Association showed that the U.S. is home to 736,114 franchises, which employ over 8 million individuals.  The association indicated that the current year will see a rise in the number of franchise opportunities at approximately 1.5%, following last year’s decline.  Employment will then increase by 2.1%.

The Forbes magazine listed the 10 fast-growing franchises during recession and the list included McDonald’s, Dunkin’ Donuts, Subway, and Liberty Tax Service among others.

Kyle Ritchie from Worcester is the general manager of Mr. Rooter and Mr. Electric, two franchises owned by Dwyer.  The president is Stephen Ritchie, a plumber, and Kyle’s father.  They purchased the Mr. Rooter franchise last 2002.  Last year, they purchase the Mr. Electric franchise to widen their services.

Layoffs triggered the Dwyer growth with many of the unemployed individuals choosing to start franchises rather than looking for new employment and experiencing another layoff.

According to Mr. Dixon, home service franchise opportunities were unaffected by the recession.  There are many franchises available however home repairs still rank higher than retailing businesses related to purchases.

The list of Dwyer franchisees include electricians, landscapers, and plumbers who prefer a business of their own or do not enjoy working alone.

After doing demographic studies on the number of dwellings occupied by owners and the number of veterans, Dwyer has Worcester as the location with the vital growth.  Mr. Dixon stated that unlike in retailing businesses, house ownership is essential in the service industry because renters do not usually concern themselves with getting things fixed.  Worcester’s home ownership is above average.

Mr. Dixon indicated that veterans make ideal franchisees.

He stated that franchises and veterans go well as people who used to be in the service are into following rules, processes, and procedures, similar to an ideal franchisee.  Franchisees who know how to follow the processes are more likely to do well.

Franchisees receive tailored support in various areas including finances, management, marketing, and technology.  Mr. Dixon mentioned that franchise businesses experience higher success rate compared to independent stores as revealed by a number of studies.

Franchisees however are required to pay revenues to franchisers.

According to Mr. Dixon, individuals need to weigh the difference in cost between starting independent store versus getting such support from franchisers.  He stated that as franchiser, Dwyer continues to exhibit growth, which helps in selling franchises.

Aside from providing cost-related support, Dwyer also provides other services like brand name recognition, call center, social media access, and demographic analyses.

Famous Dave’s Secures 21 New Franchise Contracts

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The barbeque chain based in Minnetonka will have its 18 new branches in most of the southern part of California.  Moreover one new venue will be opened in Yakima Washington, Missouri, Independence, Michigan, and Lansing Cities.  Famous Dave’s success is a good motivation to those who are planning to buy a business or searching for franchises for sale.

Famous Dave’s Spokeswoman told the Twin Cities Business about the opening of all its new restaurants in two years with most of them becoming operational by next year.

Opening more Famous Dave’s branches in California will increase its presence in the state, adding more to its 14 restaurants that opened in January.

John Gilbert, CEO of Famous Dave’s stated that the signing will give them a perfect start in their aim of having 50 new venues in the next couple of years.  He added that having more deals will make the growth potential of Famous Dave’s look impressive.  With impressive growth record, more individuals will be attracted to buy a business franchise of Famous Dave’s.

The Famous Dave’s has 132 franchises in 53 locations.  At present, its geographic footprint spans one province in Canada and 33 states.  In July, Famous Dave’s first international venue was opened in Winnipeg.  According to Brett Larrabee, the director of franchise sales and development, the Winnipeg location has exceeded all of their expectations, providing the enterprise its highest sales ever.

The revenue of the company in the latest fiscal year, which ended in January, had a 4% growth or about $154.8 million.  However its current net income was down by 22.9% compared to the previous year.

Its quarter sales, which ended in September 30, amounted to $39.9 million, 2.6% higher from the same period a year ago.  However the net income amounted to $845,000, which was 46% lower from the similar quarter a year ago.  According to Famous Dave’s, its 3rd quarter earnings have been badly affected by its timing on direct-mail marketing and media spending, which occurred on the 4th quarter of the prior year.  The margin pressure brought by the benefit, commodity, and labor costs were also cited as contributing factors.

Last month, Gilbert became the company’s CEO, replacing the former CEO Christopher O’Donnell who became the President and COO.

When the C-suite transition was announced, Aric Nissen, the company’s Marketing VP told the Twin Cities Business that Gilbert and O’Donnell are unique people possessing excellent skills while working with the company’s board together.  He stated that O’Donnell’s strength will be in operation while Gilbert will give attention on the company growth and franchises for sale, emphasizing on brand management and marketing.

Searching For Franchise Opportunities At Expositions

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People who choose to buy a business, instead of going through the financially unhealthy way of learning how to start one that’ll last, are doing themselves huge favors. Building a successful commercial establishment from the ground up can be extremely difficult, especially since statistics show that most ventures fail within their first year of operation.

Franchise opportunities make things even easier, and statistically safer, for hopeful entrepreneurs to run establishments that can compete and make money. Coming across these types of businesses isn’t difficult, as they’re advertised practically everywhere.

That being said, franchise expositions are great places to find potential businesses to run. Different commercial brands are advertised at such events, and there are salesmen who’ll explain the advantages that come with each brand.

However, it’s important to keep in mind that the main purpose of salesmen is to sell their product, so many of these professionals will tend to be aggressive. There are times where folks fall victim to sweet sales pitches, and end up investing significant amounts of cash to buy a business they don’t like, or doesn’t make money.

To avoid this from happening, interested franchisees should always do ample research on different franchise opportunities before going to any exposition. This’ll give them a rough idea on what kinds of businesses they’d be interested in running, the amount of capital they’ll need to get started, and how competitive the industry is.

In addition, future entrepreneurs should also assess their current skillsets, and decide whether or not it’s suitable for competing within a particular industry. Moreover, they should have passion for the type of business they intend to run – these folks have to ensure they’ll still be happy operating within the same industry ten to twenty years from now.

Soon-to-be franchisees should also verify earning reports shown by franchisors – it’s easy for anyone to say they net $20,000 a month, and make verbal explanations to back up their claims. FTC requires franchisors to substantiate such statements through official written reports, so asking for these documents is highly recommended.

Once an individual has finally made up his mind to buy a business which operates under a certain industry, comparison shopping with five or more franchisors is recommended. The franchise opportunities offered by franchisors will be under different terms and conditions, and some have greater potential to make more than others. That being said, carefully researching about the backgrounds of each franchisor to root out the best one is strongly advised.

The Big Salad Franchise

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When fast food chains first came out decades ago, they took the entire world by storm with the opening of thousands of franchises around the globe. Back then, they were one of the most profitable businesses amongst all industries, and have generated massive streams of income for franchisees.

While their branches continue to rake in money, it pales in comparison to what they did back in the day when consumers were kept in the dark regarding health risks inherent to their products. Now that practically everyone on the planet is aware of the dangers associated with eating burgers, fries and pizza, the demand for restaurants offering healthier alternatives is growing exponentially.

The Big Salad is one franchise that’s capitalizing on this massive opportunity to make money from millions of individuals looking to eat healthier. This type of business couldn’t have been established at a better time, since there are only a limited number of commercial diners selling these vegetables and other healthy edibles.

Current establishments which “specialize” in selling non-meat products observe low-standards when it comes to service and product quality. John A. Bornoty, the founder of this franchise, constantly complained how other businesses were inconsistent with maintaining fresh veggies, as well as the health hazards posed by the germ invested environments they kept.

Bornoty decided to capitalize on their sloppiness, as well as the demand of folks for better, healthier menus, by creating The Big Salad – a premier restaurant serving the freshest, veggie-based meals in the country. He also ensured that strict cleanliness standards were adopted, with dedicated salad chefs creating each item on the menu according to each customer’s likings.

Aside from the fact that all meals are packed with nutritional value, and are served in an incomparably clean setting, the sheer diversity of possible meal combinations makes the idea of eating at this establishment even better.

Consumers are free to choose from over thirty dressing types, twenty-eight vegetables toppings, eight dry toppings, as well as eight meat and seafood toppings. This gives customers over 17 million custom combinations to order from the establishment’s highly-qualified salad chefs.

Becoming a franchisee of The Big Salad is open to those with or without experience in the industry, as the franchisors have developed and perfected a system which caters for everyone. Total investment needed to shoulder franchise fees, as well as start-up capital, is reasonably priced somewhere in between $202,550 to $385,220 at the most.

Unlike other franchisors, the operational manual included shows a simplified, step-by-step process on everything a franchisee will need to know for running his outlet, including the following: daily check list for opening and closing, procedures for hiring/training employees, employee handbook plus guidelines, food rotation procedures, food preparations plus setup, payroll procedures, and more.

Despite its recent foundation date back in 2008, franchisors were able to develop a system that allows franchise owners to monitor, and even run, the entire business from virtually any location. In the event something doesn’t go according to plan, members of the corporate office will immediately render support whenever necessary.

Five Franchise Marketing Techniques To Boost Sales

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While many businessmen depend on the traditional “word of mouth” marketing strategy, it can hardly be considered effective in today’s world, especially since the country hasn’t fully recovered from the economic beat down. Whether entrepreneurs run retailing businesses, automotive franchises, or whatever sort of commercial establishment, evolving marketing strategies is unquestionably a huge determinant for success.

That being said, the first promotional technique for generating larger streams of income (or surviving in a competitive industry) is networking. This is sort of a more advanced form of the word of mouth method, but it takes the relatively inferior tactic to a whole new level by utilizing technology.

Getting other people outside the organization to promote the business is an excellent method to attract more customers. This can be done through a variety of medians, such as in person, through emails, and social media networks.

Creating a network comprised of the right individuals (e.g. those who benefit/regularly use the products/services sold), and maintaining good relationships with them is a great way to build a loyal customer base.

By rendering these individuals topnotch customer service, as well as an array of all merchandise they need, they’ll naturally be inclined towards telling others about the outstanding experience they had while shopping at the establishment.

Second tactic is to engage internet marketing – retailing businesses, automotive franchises and all other commercial entities will benefit by using this strategy. Online campaigns can either be paid to draw in traffic, or developed through search engine optimization strategies to channel traffic through organic search results from Google and its counterparts.

Bottom line is that online advertising is a cost-efficient technique for reaching out to thousands across the area, let them know of the goods/services being sold by the business, which in turn will gradually lead to a notable spike in sales.

Third strategy involves exploiting the media – advertising by using flyers, posters, or even radio stations and television networks are effective for drawing local and national attention to any commercial establishment. Using these medians for promotion may be expensive, but they’re great for gaining much needed exposure to markets, and even boosting credibility.

With these three marketing strategies, retailing businesses, automotive franchises, and all other commercial ventures can significantly generate larger streams of income. Consistently using these methods, whenever necessary, will also help stabilize revenue, thereby substantially increasing chances for the business’ survival in its industry.

Franchising and How Much Earnings Can You Get

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When doing research about franchise opportunities, it is most often difficult to ask franchisors on how much earnings do they get from their franchise businesses.  This can be frustrating since you cannot invest money in a business without any idea on how much you can earn in return.  The Federal Trade Commission and a number of states have strict regulations on how franchise owners can provide such information to potential franchisees.  There are however a number of ways to acquire this important information.

Why the need for government regulations on franchisors?

In the year 1979, legislation was passed by the Congress to authorize the FTC in regulating the industry to stop the bad practices of providing false earnings claims in order to sell franchises.  A similar legislation was also passed by several states.

If franchising companies want to provide information regarding their earnings, they have to put the accurate data on the UFOC disclosure record.  As long as legal requirements are met, franchising companies are free to supply earnings information to their prospective franchisees.

Why only a few franchisors supply this information?

There are two possible reasons why some franchisors do not provide such information.  It could be that for franchisors, producing earnings claim does not come with expense and effort or potential franchisees may not find the results attractive enough to buy a business franchise.

What are the other sources of this information?

If the franchise refuses to provide the earnings claim in the UFOC, you can call and ask its other existing franchisees.  In the UFOC document, the franchise fills-out Item 20 with a list of its present and previous franchisees and their contact numbers.  This method can help you have a realistic expectation if you plan to start or buy a business franchise.

What level/standard of earnings is considered reasonable for franchise business?

A franchise, like any other business requires money, time, effort, and talent from you.  Thus it is only reasonable to expect a higher return of investment; probably not during the first year of operation but definitely in the future.  A 10 to 15 percent of investment return per year is good but aiming higher is even better.

Contrary to what most people believe, not all franchises with higher investments are able to provide higher ROI.  Several low investment franchises can also provide higher ROI so make a thorough research on various franchise opportunities before saying yes to one.

The success of your franchise depends on various factors, which include the franchise structure and its years of operation.  Having the enthusiasm and understanding of the franchise system can also help a lot.

Franchise Opportunities Are Meant To Be Taken!

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Every person has reached one point in life where they’ve dreamt of starting a business that can make money in consistently massive amounts for years or even decades to come. They then move on to carefully sorting out all the details of the plan in their minds, such as a range of products or services to be sold, which industry to compete in, and the best location to build the business.

They then look into various franchise opportunities that resemble their conceptualized establishment, and identify the perfect match. Next step the hopeful entrepreneurs take is to look into different financing options, and select one with the most favorable terms.

However, this is where it ends for most of these fantasists – they manage to conjure the dream in their heads, think of surefire ways to finance it, but fail to turn it into a reality, why? Most franchise consultants say that a lot of individuals looking to start businesses like to put off the dream for “tomorrow”.

While fully capable of doing what it takes to materialize their visions, they can’t find the “right time” to do so, which places them further away from their ultimate goals. The franchise opportunities with enormous potential to make money in substantial amounts become nothing more than opportunities which aren’t taken because of most folks’ natural inclination to set things aside for tomorrow.

And when tomorrow comes, they tell themselves they’ll work on their plans to achieve financial success the next day. These individuals unsuspectingly place themselves into an endless cycle of procrastination. Eventually, their dreams die, or continue to exist in the back of their minds for years or decades to come.

Inaction is a well-known killer of dreams – it’s hard to understand why people would put their aspirations aside for some other time when they could work towards materializing them today. Countless individuals find themselves working the exact same jobs for years because they fail to capitalize on opportune moments coming their way.

If there are several franchise opportunities with huge potential to render a better lifestyle, then an individual would be a fool to NOT do whatever it takes to acquire the best franchise, and run it to make money as soon as possible.

If failure is met, then that’s great too – always keep in mind that experience is an excellent teacher, and is the mentor behind some of the greatest entrepreneurs this world has ever seen!