Monthly Archives: October 2012

Holiday Shopping for Franchises

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The new year automatically equates to a promise. It is the best time to re-organize and well, start new things. For entrepreneurs like you, it’s the perfect season to look for franchise opportunities.

Before you exert all energy for all your celebrations and shopping, ensure that you include franchise for sale in your must-have list. It’s practical to start spending on an investment. Remember, a successful business venture enables you to have an opportunity to have bigger shopping funds next year. How fun would your next new year be!

Start to have your own business with a franchise. What’s the advantage of having one? Well, for starters, a franchise for sale already has an established brand. The formula for its service or product offerings have been perfected already. All that you need to do is implement that system. Unlike when you start a new brand, franchises enable you to already have brand awareness and visibility. In short, you won’t start the business from scratch.

So now you know all the advantages, the next question would be how to select the best ones.

The first thing you should consider is your passion and interest. No matter how winning or successful a brand franchise is, it won’t work if you are not even into it. The rule of thumb is to choose a franchise that you love, and will love. Simply put, go for ones that you are deeply passionate about.

Another thing to look for in all franchise opportunities  you are considering is the requirement of the business. Do you want one that has set hours like the typical 9 t0 5 job? Or do you prefer working on particular timeframes? This also boils comes up when you’re considering the franchise to be a full time venture. If it’s for part-time purposes, different considerations would apply.

Also, you should know the direction you want to take. There are franchises that wouldn’t require you to have employees. Others though have a different setup. Take a look at where you are most comfortable.

How much you are willing to invest both in time and money is a major consideration. Your investment threshold already dictates and limites franchise choices. Consider though that different franchises have varying timeframes for ROI even if they have varying levels of investments required. You might want to go for ones with smaller investments so you wouldn’t have too much risk even if it takes longer to get profits. While it’s enticing to look at the possibility of getting bigger profits, examine also if there are more risks and bigger investments involved.

In the event that you feel trapped with the choices, do a comparative analysis. You can always rely on franchisegator.com to give you good insights. Our range of available franchises would surely give you a few ones that could spart your interest. Cross-check your considerations before making a decision. It would surely enable you to have a clearer understanding of your franchise venture. Only then can you make a decision that will leave you that assured and rewarding feeling.

Franchise Opportunities With Highest Chances Of Failure

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Deciding to buy a business should be done carefully – although many franchise opportunities bear great potential, there’s always a chance for failure when mismanagement, plus other factors, becomes an issue.

On the other hand, there are businesses that are flat-out risky, and are statistically marked to fail. There are various franchises which fall under this category, but the two types which can be considered the riskiest of all are fast food restaurants and ice cream shops.

With data acquired from the US Small Business Administration (SBA), researchers were able to determine the two commercial establishments listed above have the highest rates of failure of their federally guaranteed loans utilized to acquire franchises.

Analysts were able to come up with this conclusion by using this simple formula to determine a business’s failure rate:  number of loans charged-off plus number of liquidations divided by number of loans disbursed throughout the franchise system.

Based on this formula, the top five franchise systems with more than half of their SBA loans failed are: Golf Etc. at 71. %; Mr. Goodcents Sub and Pasta at 65%; Dream Dinners at 60%; Planet Beach at 58%; and Carvel Ice Cream 56%.

Keeping this list in mind, anyone looking to buy a business from similar franchise opportunities should definitely consider the risks involved first. Although there still a good chance to succeed with the purchase of any of the establishments above, financial failure remains the more probable outcome for investors.

Also, keep in mind that the formula includes loans guaranteed under SBA financing programs only. Regardless, strong conclusions can still be derived with the use of SBA-approved loans, mainly because the government tends to be unbiased when gathering data pertaining to its borrowers, and when presenting it to the public.

In addition, a large percentage of franchisees acquired their finances from SBA financing programs, thereby fortifying the reliability of all assumptions made based on the gathered data.

This presentation of franchises which are most likely to fail may not gain favorable responses from other franchisors, especially the ones belonging to the list. Moreover, they likely have their own slightly modified formulas for determining the worst franchise opportunities.

Nevertheless, ample research and planning should be done before ultimately choosing to buy a business. Statistics should always be included in the basis for selection to ensure a successful commercial operation is acquired.

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!

Finding The Ideal Franchise

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Learning how to start a business to make money that flows on autopilot can be unbelievably tough, and is something that not everyone can do. Fortunately, franchisors have worked hard for years to create adaptable and successful operating systems for their franchisees to follow so they too can achieve financial success.

While reaping the advantages of a business built around a thoroughly tested and perfected system is an alluring idea, carefully screening franchisors, and ultimately sticking to the best one, should be done beforehand.

With that said, here’s the first point to consider when picking a franchise: total acquisition costs and future operating expenditures. Some folks like to go for ones which they can cost-efficiently purchase and sustain, while others may opt to go for pricier variations that’ll probably require a bank loan.

For the latter, the British Franchise Association (bfa) recognizes three major banking organizations as specialists in financing loans for franchises, namely: Lloyds, HSBC and RBS/NatWest.

Second point for consideration is the franchisor’s bfa membership – in order for these businesses to become a member of this prestigious organization, they have to comply with rigorous criteria based on European Code of Ethics, operational procedures, and franchisor/franchisee practices.

To verify a franchisor’s bfa membership, potential franchisees are advised to check out the official bfa website online.

Third, we have the actual operation systems of targeted franchises – some systems are easy to learn and execute through training (rendered by franchisors,) thereby saving the franchisee from the burden of learning how to start a business to make money in consistently large amounts.

Also, seeing quite a number of franchises successfully operating for years is also a good sign that the system adopted by its franchisees is effective. Little to no branches closed on record can be reflective of a franchisor’s strength, reliability, and efficiency.

Fourth and probably the most important point to consider is the prospect business’s impacts on the owner’s lifestyle. Different franchises will require varying levels of owner commitment. Also, the actual trade itself has to be interesting for the future franchisee to keep engaged. For example: people into cars would definitely be happier running an automotive shop than operating an ice cream store.

By purchasing the right franchise, anyone can skip out on the painstaking process of learning how to start a business that’s engagingly fun, and can make money in bundles for years to come!

Determining A Franchise’s Income

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People putting up retailing businesses or purchasing automotive franchises have different reasons for doing so. Some folks do it because of their passion for automobiles, certain retail products, or a natural inclination towards engaging services within such industries. These types don’t mind if they make bundles of cash or not, so long as they get to do what they enjoy doing.

Others build these commercial establishments with hefty profits as their only motivator. Even if they aren’t into cars or retail services, the profits are more than enough to compensate for the perceived disadvantage.

Whether entrepreneurs actually like the trade, or are in it for financial rewards, the bottom line is to make money. People operating out of passion are admirable, but ultimately need to meet the business’s financial demands to keep running smoothly.

Franchisees need to know the potential income of their retail or automotive franchises to get a rough idea as to where they’ll be in the near or distant future. While hiring an accountant is the usual method used by franchise owners, especially those engaged in retailing businesses, the simple formula below can be used to help the entrepreneur do so without professional help.

With that said, the first step is to check the franchise disclosure document (FDD) for total royal payments to determine how much cash current franchisees are jointly paying the franchisor. This document is usually presented by the franchisor to prospective buyers of franchises during the pre-sale disclosure process.

Second step is to jot down the percentage of sales franchisees pay as royalties (commonly referred to as the royalty rate,) as well as the total number of full-time operating franchises recorded in the system.

Third step involves executing the actual formula: divide the total royalty payments by the total number of franchises. This in turn allows the franchise owner to compute the average royalty payment paid by each owner of all retail or automotive franchises.

Fourth and last step is to divide the average royalty payment per franchisee by the royalty rate. The final figure will reflect individual franchisees’ average gross sales.

This formula can be used by all franchise owners of automotive or retailing businesses to identify their potential income. However, it’s important to note that the actual success and possible income of any business doesn’t solely depend on franchisors’ operating systems, but on the management plus entrepreneurial skills of the franchisee as well. 

Cinnabon: The First US Franchise For Sale To Open In Libya

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With Libya recovering from the civil war which erupted back in 2011, several investment groups are now eyeing this Middle Eastern country as a possible location to do business. Earlier this year, the first US franchise for sale, Cinnabon, was successfully put up in downtown Tripoli.

Compared to other Cinnabon franchises for sale, this branch is fairly large with a surface area of 7,500 square feet. The bakery-café is situated in one of the busiest streets within Tripoli’s business district, and has attracted truckloads of customers during its opening earlier in July 2. During the store’s first week of operation, the company says it was able to generate $45,000 in sales.

Focus Brands International, the parent company of the Atlanta-based bakery, has already amassed over 900 locations in 51 countries. Moreover, it plans to open four more Cinnabon branches in Libya within a span of ten years.

“Ultimately, we think there’s an even larger opportunity in the country for us,” says Mike Shattuck, president of Focus Brands International.

According to Shattuck, his company has received numerous inquiries from Libyans pertaining to different franchises for sale. Out of the numerous brands offered by the firm, the Cinnabon franchise for sale received the most inquiries.

“They were already familiar with the brand and wanted to bring it to Libya,” said Shattuck. “We were in every major market in the Middle East. Expanding into Libya made sense as part of our emerging market strategy.”

Original plans of the Cinnabon push were actually scheduled as early as the first quarter of 2011 – franchise partners were already selected, as well as a suitable location.

However, the civil revolt erupted without warning as the first shipment of products was on its way, thereby causing a delay with the establishment’s opening date. “We quickly halted everything because the revolution happened,” said Shattuck. “Fortunately we were able to secure the location and it made it without serious damage.”

Aside from Focus Brands International, there are other firms looking to bring their franchises for sale to Libya. Chuck Dittrich, executive director of US-Libya Business Association, says that American business interest in growing within this country.

“In the new Libya, people are seeing franchising as an opportunity to become entrepreneurs,” said Dittrich. He went on to explain how acquiring a franchise for sale could give any individual a better shot at operating a commercial establishment successfully for years to come.

Things to Know About Private Practice and Franchising

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A lot of medical professionals dream of going into private practice.  With private practice, success, autonomy, and a respectable reputation in the community can be achieved over a period of time.  However with private practice, it will take more time, more effort, and huge amount of money before one can finally achieve a successful status.

Introducing the franchise model in the field of private practice or health care industry can provide a new concept of practicing health care professions.  Applying the franchise model can also bring new medical practices available in the market.  Using the model can even revitalize the striving private practices by incorporating business logistics such as operations, marketing etc. while promoting local awareness at the same time.  These concepts are achievable without having to lose any of the long-term objectives set by most health care professionals all throughout their career.

When looking for franchise opportunities applicable in the field of healthcare, having an idea on some important details regarding the business is important.

  1. Franchise model comes with associated fees that might somehow create confusion about franchise opportunities.  Associated fees are part of franchises (food franchises, automotive franchises, retailing businesses, etc.) however in a number of cases, cumulative expenses spent in private practice can even exceed the franchise fees.  The good thing about franchises is that they can support franchisees with regard to planning, marketing, operations, etc.  Some franchises even offer financial options to make the start-up easier.
  2. The use of franchise model provides a more secure bottom line.  Franchise fees may be expensive but they can offer several benefits.  Most franchises including hotel franchises, retailing businesses, etc. are provided corporate support by parent companies.  Other benefits include operational and time-tested IT systems that facilitate logistics.
  3. Compared to private practice, franchises can quickly penetrate the market.  Professionals who are into private practice may enjoy absolute control of the business however this may easily become one overwhelming obstacle.  Aside from the challenge of attracting new patients, medical professionals in private practice also have to deal with a lot of things such as business advertising, signage, facilities, operational systems, office furniture, and other details needed for the business to succeed.  With franchise model, businesses can easily be set-up in new locations complete with excellent launch marketing and branding.  With corporate support, franchise owners need only to focus their attention on the patients as other things are well taken-cared of by the parent company.
  4. In franchising, individuality is also possible.  Just because the franchise belongs to a larger business group does not mean that franchise owners are no longer allowed to enjoy flexibility to express their own individuality.
  5. Private practice businesses are built on reputation and referral and this can be a challenge in today’s striving economy.  Compared to franchises that have already carved their own reputation for years, private practice businesses may need to struggle just to build their own reputation.  A newly licensed doctor starting his/her own private practice may find it hard to attract patients when compared to a franchised medical facility.  People can easily remember established franchise businesses rather than unfamiliar medical facilities or doctor’s offices.

The Important Role of a Franchise Consultant

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For a lot of people buying a franchise can be very risky and challenging.  Hotel franchises, food franchises, automotive franchises etc., are great opportunities for business-minded people.  However just like any other business, before one can acquire or buy a business franchise, careful planning is needed.

In a recent statistic, a total of 650+ franchises would be available for the year 2012.  If this is true, then it would pose difficulty for people who want to acquire a franchise.  This is where the franchise consultant or a franchise broker comes in.

A franchise consultant is generally defined as someone who negotiates with franchisors in setting up, operating, and helping expand a certain franchise system.  Some groups however are taking liberties in adopting the title and job descriptions of a franchise consultant such as the franchise brokers and even field support staff.  This article will refer to franchise brokers as the people who represent various franchises and help franchisees sell the brands directly to new prospects.

There are several kinds of franchise brokers however among the most popular and largest groups, some common features and similarities are observed.  Most groups of franchise brokers represent 20-100+ brands covering various products and industries.  A lot of franchise brokers utilize personality profiles to help narrow the type of industry that a franchisee should be checking and reviewing.  Aside from this, the brokers must be able to gather enough information regarding the various companies that belong to the franchisee’s selected industry.  This can help franchisees narrow the search thus saving ample time.

However, a franchisee should not expect that franchise brokers are experts in all the brands included in their portfolio.  Thus when it comes to the final decision of whether to acquire or buy a business franchise or not, the decision still falls in the hands of the franchisee and not with the brokers.  Franchise brokers can only help by gathering enough information to narrow the search for the perfect franchise product or brand.  Once a franchise is selected, the franchisee must now create a list plan on what to ask the franchisor before the meet-up for the one-on-one talk and discussion.

Using the service of a franchise broker can help save time and effort when gathering information on hundreds of franchises such as automotive franchises, garment franchises etc.  With help from a broker, a franchisee will not have a hard time getting through the first few steps in acquiring a franchise, which involve the search and selection process.

Successful Franchise: How to Achieve It

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Learning the various ways on how to successfully franchise a certain business is not easy.  For the business to be easily duplicated and to garner high sales in various locations, being proficient in all of its aspects is very important.

Franchisors must be responsible when it comes to the product, the planning, the marketing techniques used, and the types and number of trainings needed.  Whether they are food franchises, automotive franchises, beauty products franchises, or even retailing businesses, franchisors need to make sure that each aspect of the franchise or business are dealt with responsibly and skillfully.  Documenting and outlining the business or franchise will make it easier for franchisees to understand everything about the business that they plan to franchise in the future.

Product:

A business franchise is impossible without a product or idea.  What types of products can attract more customers and establish an interest among them?  Products or ideas do not need to be brand new.  As long as they come with innovative and interesting elements, then they can encourage potential customers to take a look and can eventually establish the interest needed for the customers to try the products/ideas.  Examples are the various food franchises in the market.  These franchises may be selling the same product or service however each has its own unique and fresh element that makes them different and a hit, enough to attract more customers and compete with other franchises.

Plan:

An idea or product is not enough to create a franchise.  A business plan is the next vital aspect to take into consideration.  The plan needs to be feasible enough to work.  With a doable plan, franchisees can easily reproduce the plan to make their franchises succeed.  An effective business plan should include the product line, employee guidelines, management structure, legal obligations and a number of instructions on how to manage a franchised shop or store.  Having a detailed business plan will make things easier.

Marketing Techniques:

To promote a franchise, effective marketing techniques are a must.  Franchisors need to set up and provide franchisees the essential marketing techniques and materials.  Sharing advertising and marketing templates for promotion and preparing information regarding customer demographics are some of the techniques that can help franchisees a lot.

Training:

Franchisors should also prepare employee training packets.  Franchise systems operated in a similar manner can have more success.  The use of operation manual and employee handbook makes it easy for franchisors to assist franchisees on a step-by-step level, ensuring effective application of the franchise techniques needed to achieve success.

Interested in automotive franchises?  Clothes/accessories franchises?  Or food franchises?  How about retailing businesses?  Most individuals may find franchising a complicated type of business operation however with careful planning coupled with innovative products, effective trainings, and excellent marketing techniques, success is achievable.

Is Franchisee Training Important Before Buying a Franchise?

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Business franchising has a simple concept; someone is skilled in running a particular business compared to you and their experiences and connections will be of advantage to you if you venture with them.  Therefore rather than doing it on your own, you can hasten the process through franchise opportunities and just pay someone to get you started.

Franchising might sound simple, so how will you decide which among the franchises for sale to buy?  There are many articles available about the essential franchising criteria and how to carefully analyze thousands of franchise opportunities.  Though to make things easier, you can simply employ a qualified franchise consultant.

This article will discuss franchise training, a significant factor you may want to take into account when you have figured out which business franchise to choose.

Is franchisee training important for the new franchise area or location to succeed?  If it means receiving the franchisor’s calculated knowledge for you to use in your franchise, then franchisee training may be one significant factor to consider when making a decision as to which business franchises for sale to purchase.  If the franchise you bought is of superb quality however the training is substandard would it not affect the outcome?  When deciding to purchase a franchise, there are several important factors to consider but franchisee training also counts thus should also be given utmost importance.

How will you know if a certain franchisor has a quality training program in franchising?  A franchisor will definitely not let you attend franchise training before you sign the franchise agreement because the secret techniques are revealed during the training.  But even if you do not join the training there are ways to find out if the franchisor offers a good training system.

  • Perform a background check on trainers; find out if they have experience in presenting or teaching and have industry knowledge.
  • Inquire on the techniques utilized during the training such as the use of hard copy material, PowerPoint, classroom, role play, and on the job practice.  Or if they apply creative methods to relay the knowledge and incorporate tests such as team building activities, quizzes, and trivia games.
  • For complicated businesses, ask if training will be divided into corporate experience to acquire the know-how and the real-world setting where you can apply the skills once you start your business?
  • Talk to other franchisees when you get the chance and ask them how confident they felt when they finished their initial training on franchising.
  • Ask the franchisor; talk with the franchise principals and inquire about the training philosophy that they are applying.

When you make a decision on which franchise to choose never forget to inquire about the training program.  This may be the most significant question that you will ask.