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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.

How Success is Achieved through Franchising

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Before you decide to venture into franchise opportunities it’s very important to do your research on the franchisor.  And it will also be to your benefit to make a thorough assessment of yourself.   Your business and you should mesh well together because you and your business will become synonymous once you start operation of your business.  People will start attaching your name to your service or store.  Whether you’re running a franchise or an independent business, the way you run things in your business will be a great reflection on yourself.

In franchise opportunities you make money by following a system.  But there are innovations you can do while still following procedures without sacrificing quality of the products.  Deviating from procedures can cause differentiation of products which will not be accepted by the franchisor.  But franchisees are allowed experiment and find ways to deliver the same quality of service or products more efficiently.

The Wall Street Journal clearly spells out where the success of franchisees comes from, it will highly depend on how well they’ll follow and execute the system set by the franchisor.  Some people may get the wrong idea about franchising they may think that it’s an easy “make money” or a “get rich” scheme.  But owning a franchise business requires a lot of hard work before you can reach financial success.

Try to talk to other franchisees about their business and find out as much as you can about the company.  You may be surprised to discover some details not readily mentioned by the franchisor during your inquiry with them but franchisees will be more than willing to give you more information about the business.  This will help you prepare yourself for your own franchise business.  It’s always a good idea to know what’s in store for you in the business world.

Franchise support is a big piece of your franchising success.  It’s important to know what kind of support will be offered to you.  In general, franchisors will offer consultation on location, support in marketing, help in hiring employees, training of employees, and overall all business operation like applying for licenses, permits and other paper works for your store.

Ultimately, it’s how you run things and how you manage it will be the big basis for success.  If you constantly meet the standards that are expected by your consumers then there’s no way for you to fail in your franchise venture.

Part 2 – The Big Dont’s of the Franchising Business

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A lot of new entrepreneurs become very tenacious when it comes to jumping on franchise opportunities. They want to make money quickly by banking on the national brand that is already trusted by a lot of patrons.  But they still make some errors along the way; here are some of the mistakes often committed by new entrepreneurs;

  • Failing to read and understand the business plan of the company

Before getting into the bandwagon of a franchise opportunities create a budget and review the startup expenses. Try to stir away from paying too much for your equipment.  You can ask other franchisers about less expensive products but of same quality.  If you directly get your equipment from the franchisor then you may be spending more than you bargained for.  Remember that you still have other expenses to worry about at the end of the month like bills, rent, and salary of your staff.

  • Failing to read and understand the Franchise Disclosure document

It is crucial for any entrepreneur to understand what kind of agreement he is signing in to.  Under the Federal Franchise Rule it is mandated by the Federal Trade Commission that franchisors should report such information as performance of company, risk factors, franchisee’s obligation, restrictions, and other details.

  • Not following the business plan

The business plan is the map how the brand reached its success.  It is the guide to help manage the business the way it’s managed by the franchisor.  It includes hiring of personnel, distribution, projection of sales, budget planning, sales and advertising.  It’s important to realize that there are legal implications associated to this agreement if you don’t stick to it.  So review carefully all the terms and conditions to avoid possible violation on your end.

  • Not getting support from your franchisor and other franchisees

It’s easy to make money in this business if you started everything the right way, but any form of business is still a gamble.  What is booming right now may have a different story to tell after just a couple of months.  One way of keeping afloat in the game is to network with other business franchisees.  Don’t stick to business owners in the same line of service as yours.  Try to get to know as many entrepreneurs and add them to your contact list to help you build awareness about the business world.  Join as many groups and associations as you can. You can join a community of franchisees and be visible during community events to allow them to get to know you too.  This can help you build your business and find support in a lot of areas.

 

Part 1 -The Big Dont’s of the Franchising Business

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Franchise opportunities can certainly reel in a lot of cold cash in your pocket.  But if you’re considering getting into this type of business there are a lot of don’ts that you should also know before investing your time and money into the deal;

  • Research about the franchise opportunities

Some people make the big mistake of diving in without doing their homework.  If you have your eye on some franchise businesses then investigate on their market trends, history of the business, the demand in your local area, and how economy could impact their service or products.  What you think is a sustainable long-lasting business can turn out to be just a market craze and fizzle out later on.  So before you get make your investment it’s better to investigate on how well it will grow over a period of time.

  • Research about the demands

If you see the brand in every corner of your street, then that means your area is already saturated with their products or services.  It may not be a good investment after all.

  • Not planning for growth

When you make money out of your business this is a good sign of growth.  But some business owners get over excited and start growing too soon without carefully planning of their logistics and finances.  They end up losing more instead of gaining more in the process.  Before considering expansion, business owners should study factors like where their current patrons are coming from, or how is the current sales faring to last year’s and last month’s sales.  And more importantly, will the demand be strong enough to sustain the new franchise in a different location.  A thorough investigation and analysis of these factors will determine if the business is ready for growth.

  • Not setting a regular financial forecast

A financial forecast will give you an idea of how much you will make on the next month, the next week, or even the next year.  This will give a clearer picture of how your business is doing.  Another benefit of conducting a regular forecast is that you are able to forecast your expenses too.  Budgeting also come in to play in your financial forecast.  Change in sales should also be included in your budgeting plan.  The key is to save money to make money.  One important thing to remember when making your budget is that you should make it as realistic as you possibly can and try your best to stick to it.

Getting Through Your First Day of your Franchise Business

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Entrepreneurs who buy a business franchise experience the jitters during the first day, even if they’re already riding on a known brand.  Owning a franchise business that represents a national brand gives consumers a set of expectations that should be met even during the first day.  But you know that there are a lot of things that could go wrong so it’s very important to plan for potential errors that can happen and have a plan B for everything to keep your business running smoothly. Remember, first impressions last even in the business world.

Sometimes before you make money, you have to give away some too.  Marketing your business before it even opens makes your consumers aware that you’re coming in their neighborhood.  There are my ways to do this, you can give away flyers, print the opening event on your local newspaper, buy some airtime from your local radio station or television, and give a shout out at the internet via social media.  Send your message in a unique way as you possibly can to make your opening day more exciting.

Consider giving away coupons that consumers can bring on your first day of business.  Or give discounts to the first 50-75 guests who will visit your store.  Generate as much buzz to your business to excite your future customers on opening day.  Some even start with a scavenger hunt and shout their hints on their website or on twitter. Since your franchise is already a known brand getting attention is no longer a problem, the goal now is to let them know where your customers can find you.

Utilize the internet to its full extent.  Create a you tube marketing infomercial, set up a blog, create pages on Facebook, create a twitter account for your business,  and send email blasts to family and friends that they can send to their friends.  This will help you get the word out in the streets.

Before you can make money from your franchise you know that you should have available funds to keep the ball going.  Adequate funding will play a major role once you buy a business.  Return of investment will not come quick for some services so you have to plan for a long period of funding if you want to reach success.  Get everything that’s necessary to be covered by insurance, and have volatile funds on the side should you encounter some immediate and extra expenses along the way.  Having your hands on volatile funds will make sure that you can run your business smoothly for a longer period of time.

Burger King and Beboca Forming new Joint Venture for Central America

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There are lots of ways for owners of retailing businesses to make money far beyond the amounts they’re enjoying at the moment. Methods to achieve this may range anywhere from improving operating efficiency of current outlets to opening branches in select regions.

Burger King Worldwide Inc. implemented a similar strategy to that of the latter, but took things to the next level by launching a joint-venture with long-time franchisee Beboca Ltd. Through a deal that was intended to help the fast-food chain expand their territorial coverage in Central America.

What’s interesting here is the fact that the companies will be operating these new outlets under a new name: BK Centro America. Beboca will take on the role as the master franchisee and developer for the proposed 178 restaurants in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.

As of today, Miami-based Burger King is the second largest fast-food chain in the world with over 12,600 branches in total.  Meanwhile, Beboca currently owns 48 restaurants and Costa Rica and Panama. Both partners will be working to develop and promote the newly established entity destined for Central America.

The reason why this partnership was struck and the particular location was chosen lies within the area’s growing middle class. This has led to an increase in demand for products from fast-food establishments, which has also presented an exceptional opportunity for the partners to supply the demand and profit off it at the same time.

“Central America’s middle class continues to expand rapidly and this partnership will enhance our ability to grow aggressively and ensure we are the preferred choice among consumers in the region,” says Jose Tomas, Burger King’s current president of Latin America and the Caribbean.

Nevertheless, Burger King and Beboca aren’t the only ones looking to capitalize on this growing market. According to sources, Denny’s Corporations and Brinkler International Inc. are also shifting their focus to developing their own restaurant retailing businesses within the region as well.

Tomas will be joining the board the new joint-venture along with Jonathan Weisleder, its finance and business director for Latin America and the Caribbean.

Legitimate franchisors such as Burger King represent outstanding opportunities for businessmen and non-entrepreneurs to make money in consistently large amounts over a long period of time. Although such businesses are comparatively pricey to acquire as compared to other franchises, popular fast-food restaurants give a steady and large return on investment.

Make Your Franchise Successful

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Entering a business or one of the franchise opportunities can be tough.  If you believe the opposite then you should take a different route of expansion because your franchise business will only become a failure and you will not be able to make money out of it.

Among the biggest franchising misconceptions is that you only have to follow a certain formula in order to succeed. This belief is a myth regardless if you are a franchisor or a franchise owner.

The truth is, there are franchising elements included in every franchise model.  An example of this is the provision of support and training from most franchisors.  There should be a signed Franchise Agreement.  A franchise owner is given the right to utilize the business model and the brand name.  The support and training provided are entirely different from other brands, the same goes for the business model and the brand name.  Franchise Agreements have different clauses as well.

So if you own a business and looking for franchise opportunities, you cannot just simply follow the formula of another brand then anticipate the success of your business.

Your own business is unique, which deserves a franchise offering that is also unique.

So how will you make a franchising offer that is unique?  The answer is by hiring a skilled franchise consultant.

A skilled franchise consultant can assist you in every aspect of your business franchise, including the writing of manuals and recruiting ideal franchise owners.  The consultant will also guide you in expanding your franchise at a quick pace, which is necessary because if done too fast, you might not have the infrastructure needed for your network, but if done too slow, your franchise may end up becoming stagnant.

Franchise consultants will even assist you when the time comes for you to start considering international franchising.

A franchise consultant plays an essential role in the success of a franchise business, which means that choosing a franchise consultant must be taken seriously.

Asking the following questions prior to working with a franchise consultant can help a lot:

  • What brands did the consultant work with before and what was his track record?
  • Do you and your franchise consultant understand each other?
  • What are the ideas of your consultant in promoting your franchise?
  • Will the consultant assist you in manual writing and other needed documentations in business franchising?
  • Will your franchise consultant let you get in contact with franchise attorneys and other experts that can provide essential services to franchisors?

The franchise consultant must also be trustworthy to help you succeed in the world of business franchising for you to be able to make money.  This is the most important attribute that you should look for prior to hiring your own consultant.

How Franchising Helped One Couple from Reno

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Brita Ingstad and Greg Zrinyi dreamed of having their own bar and restaurant to make money however the lack of funds made them choose the path to being chocolatiers.

The two worked with Nevada Small Business Dev’t Center at University of Nevada in Reno on how to start a business such as a restaurant.  They gathered information, prepared the business plan, joined the competition, and met several bankers to apply for a loan to open a restaurant.

The couple went to meet with a banker suggested by Rod Jorgensen, management and counseling consultant director working for a small business center.  However they learned that banks are reluctant to lend funds to high-risk investments like restaurants.

The banking sector may be willing to provide loans to more established enterprises like the franchises however the banks are wary to commit to emerging independent food ventures because of first-year failure percentage.

Zrinyi stated that there are several food franchises out there for individuals who are thinking of venturing into this type of business just like they did.

A Colorado native, Ingstad chose to open their Rocky Mountain Chocolate Factory shop in the Reno area.  The venture’s international franchiser is based in Durango, Colorado and has the chocolate candies, dipped items, and caramel apples as its popular products.

Jorgensen assisted the couple throughout the whole process, which included the review of franchise agreements and the help with the lease.

The pair had to pay the startup fee of $24,500 and must be able to settle the 6% to 10% royalty sales.

The store opened in March of 2008 in the northwest of Reno.

About 60% of the store goods are handcrafted in the store location, which include the logo merchandise and other package items.  Chocolate bars and hot chocolate mixes come from the Colorado site.

Ingstad has made caramel apples that local consumers like since the franchise provides franchisees freedom to be creative.

She has also begun offering her confections during special events held in the town and not merely relying on the shop location to attract customers and make money.

Zrinyi stated that the various events in Reno become opportunities for small businesses to make it big.

According to Ingstad, the money earned during the special events is set aside to cover for the months without chocolate holidays.

Five years after the store opened, the two are breaking even.  Both are hoping that the following year will bring profit.

Ingstad shared that they have just started growing and expanding their business.

Currently, the store has four employees working part-time and sell products in four various places through mobile setup.

The couple still calls on Jorgensen for some opinion and answers on leasing concerns.

Zrinyi finds the small business center one excellent resource for their business.  He added that they can call the center for advice anytime and Rod is always available to help with things.  He stated that this is very helpful for couples like them who need assistant and support on how to start a business and make it grow.

Papa John’s Announces 200 Franchise Agreements for North America in 2012

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On Tuesday, November 20, Papa John’s announced its plan to sign more franchise agreements for North America.  More than 200 franchise opportunities will be developed, create jobs, and make money for some 5,000 future employees over the next few years.  John Schnatter, Chairman, CEO, and founder, said in an interview that their aim is to continue opening up more restaurants that will help the economy.

Papa John’s is the third world’s largest pizza company.  Papa John’s International’s home base is located at Louisville, Kentucky.  For eleven years, customers have consistently rated this pizza chain as No. 1 when it comes to customer satisfaction according to the American Customer Satisfaction Index (ACSI).

Three months earlier the company has already given information about their continuing Papa John’s Franchise Development Incentive Program, which offers zero franchise fee ( $25,000 in value) and waived royalty for 18 months.  The program also includes $50,000 worth of restaurant appliances and equipment for stores that will open in 2013.  The equipment includes two Middleby-Marshal ovens.  The franchise program also provides $3,000 in food credit with PJ Food Service.  This is the establishment that controls and operates food distribution and produce fresh dough for Papa John’s. This special incentive will be available to restaurants that will open 30 days ahead of their schedule.

The incentive program is generally available in the U.S. for qualifying franchisees who will start to operate on or before the 29th of December 2013.  Full details of the program will be made available to applicants upon completion and review of the Franchise Application.

Schnatter revealed that 50% of the franchise agreements are new to the idea of franchise opportunities and are just opening their very first Papa John’s.   An average Papa John’s franchisee owns about three to five restaurants.  Right now Papa John’s is not just all about how to make money from their fabulous pizzas but they’re focused into developing their franchise for small business owners.

The Story Behind the Success of Two Men and a Truck

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Brig and Jon Sorber dabbled in the moving van business during their high school years back in the 80s to make money.  They’d borrow their mum’s 12 foot van and do moves for apartments and small houses in the Michigan and Lansing areas.   They stopped their small moving business when they went off to college.  At least that’s what they thought they did.

But Mary Ellen Sheets, the boys mum, had a better idea when the boys left.  Even when her boys were already off to college she still received calls for jobs.  So she asked them if she could hire a few guys to keep the business moving along and make money out of it.  So it became a routine for Brig and Jon to go back on their truck during summer and Christmas breaks and continue with the moving business.  They were surprised to come home one summer with a brand new truck parked in the driveway.

The big break in the business happened when they set their foot in to franchise opportunities.  Big Sorber, currently CEO of the franchise, says that at the beginning they didn’t have a clue about what franchising really is and so they made a lot of mistakes.   But they learned fast from their mistakes.

Now after two decades in the moving business, Two Men and Truck has turned into 228-unit franchise.  They now have more than 1,400 trucks.  Franchise opportunities helped this business get to where it is now.   Their transition wasn’t easy, but they were able to pull it through.  One important ingredient is to have a clear mission statement that will be carry core values that will create strong partnerships between the franchisor and the franchisee, it shouldn’t be all about just making money.