Tag Archives: retailing businesses

How Important is Your Franchise’s Location?

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The state of Arizona is among the fastest growing locations in the US when it comes to starting business franchises such as retailing businesses. This is the reason why the Togo’s Eateries sandwich franchise in actively recruiting a number of franchisees in the Arizona area and other key states in the Western region.

The goal of Togo’s Eateries is to increase their number from the 250-unit franchise to 400 restaurants in the year 2015. The franchise is taking the first step to realize this goal by developing its three locations in the Maricopa County in Arizona.

According to Togo’s CEO and chairman Tony Gioia, the franchise company is ready to introduce their large made-to-order sandwiches to the areas of Tucson and Phoenix after the company’s fantastic growth in 2012 and its six quarters of fantastic store sales. Gioia stated that the company is searching for passionate and dedicated entrepreneurs who want to join the enterprise team and help the company grow regionally.

US Franchise Soon

Big Smoke Burger, a gourmet burger chain based in Toronto eyes an even larger expansion. The franchise company aims to establish their presence in the US. The chain is aiming to set up a total of 50 restaurants in the areas of Chicago and New York City. Franchisee Anthony Fauci has recently signed a deal to open and operate the first New York City franchise location.

The Ideal Location

Securing a franchise funding and establishing an excellent business plan are as important as choosing the right location. Locations can greatly affect the success of the franchise operation. According to the Franchise Help, careful analysis of a potential business franchise location should include the following: identifying the major franchise trends and calculating the expenses and costs of the location rent and utilities. Aside from these things, a franchisee should also consider several aspects of the business operation such as the zoning restrictions, opportunities for advertisements like billboards and off-premise signs, availability of parking spaces within or near the franchise store, and the proximity of the store to other franchisees or competitors.

Entrepreneurs and business franchisee owners should remember that strong competitions do not necessarily equate to an unsuccessful business operation. This is especially true if the brand of the franchise for sale is one that is popular and widely recognized.

Spending more time researching on the business franchise is important before any franchise expansion can be done, whether the region targeted is within a city, a state, or even outside the country.

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.

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.

Purchasing a Franchise

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The entrepreneurial among us who are looking at franchise opportunities are wont to neglect consultation with an expert, in a misguided attempt to cut corners and reduce expenses.  However, shying away from the inputs of those with the expertise in franchises for sale may not be cost-effective.  There are many areas of concerns on how to start a business involving franchises, issues which can only be addressed and resolved effectively with the help of a professional franchising consultant.

It is critical for entrepreneurs to choose the franchise just right and tailor-fit to their individual capabilities and business preferences. Those, for instance, with a mechanical bent will likely go for automotive franchises. While the choice may come out naturally for some, an inventory of one’s skills and preferences may have to be undertaken in order to come out with a satisfactory franchise selection.  And this is where a franchise consultant can be most helpful.

There may even be no extra cost involved in having that professional advice. Many franchising companies retain the services of consultants to screen potential franchisees to determine if a mutually beneficial relationship can be achieved with the franchise grant. Another approach is to attend franchising exhibitions and fairs or conduct preliminary research. There are many printed publications devoted to retailing businesses. Online franchise portals are rich sources of information too. Some may even offer matching services. At the end of the day, a consultant may only be necessary to validate an entrepreneur’s initial findings.

The assistance of consultants is also valuable in sourcing the funds to buy a business franchise. Many of these professionals have already established contacts in banks and lending institutions. These institutions often have special departments handling franchising loans, manned by financial analysts who will determine the business viability of the franchise loan application. A consultant with a network at these lenders can help facilitate funding for a franchise which often calls for a substantial amount of capital outlay.

Analyzing the franchising agreement is the ultimate hurdle for franchisees wherein the advice of a franchise consultant would be most helpful. This agreement, after all, is the contract specifying what the franchisee is entitled to get from the franchisor, e.g. services and/or materials necessary for the business franchise. Besides having a consultant, it would also be prudent to have a lawyer evaluate the contract to ensure that the franchise opportunities given are achievable and for real.

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.

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. 

Tips for Staffing Retailing Businesses

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Retailing businesses and franchises for sale don’t come with employees upon purchase or setup, unless the venture was bought second hand. In the majority of cases, the entrepreneur will have to hire people to get the business up and running.

When hiring employees, it’s important that they’re qualified for the job, and possess the desire to work towards the satisfaction of customers and the company’s growth. In some instances, this can in some way be a difficult task. Some franchises may have positions that require unique skillsets that aren’t easily found.

In this case, looking beyond the usual sources for hiring may be necessary. One good source in particular is former employees of similar businesses, particularly those who’ve worked at another outlet owned by franchisee of the same franchise company.

These individuals will certainly possess the skillset required to fill out certain positions. Regardless, thorough screening may be required, since the reason why they left their former employer might be something “bad.” And since he’ll be working within the same company with identical policies, it’s possible he’ll be quitting for similar reasons.

With some franchises for sale, staff training is often rendered by the franchisor, especially in the case of retailing businesses. With that being said, it is probable to hire someone with little to no knowledge regarding a specific role in the business, and instill the necessary skillset through training programs setup by the franchisor.

The franchisors usually create these programs so that employees will be able to work effectively and in compliance with the franchise’s standards. If every franchisee’s commercial establishment performs well, then the franchisor benefits more, so it’d naturally be in their best interests to see that everything is done to ensure the success of the business is taken.

When creating a staff comprised of skilled and driven employees, it’s vital that the operations of the business aren’t heavily dependent on anyone of them, especially on the ones with low-income positions in fast food and retailing businesses (and even in most franchises for sale).

When the employee turnover becomes high, immediate replacements that are not trained may have to be hired, which will negatively impact the consumers’ perception of the business.

With that being said, having more employees work shorter shifts (instead of the other way around) is a recommended course of action. If one of them quits, it’ll be easier to cover the number of hours he worked by having another employee temporarily work overtime.

Why An Accountant Is Important In Retailing Businesses

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Before an individual decides to buy a business or franchise, having a certified accountant on standby, who’s ready to work immediately, is a must. When it comes to operating any commercial establishment, especially retailing businesses, having an employee who can crunch all the numbers at the back-end, make informed decisions that are beneficial for the company’s growth, and handle every financial matter in general, is unquestionably important.

James Layton, CPA and director of Systems Support & Development for the accounting firm Fiducial says that while most franchisees possess the entrepreneurial spirit and are generally operations-oriented, many of these individuals lack the financial skills to effectively run a business.

“A good accountant can provide them with the information necessary to make informed decisions and serve as a trusted adviser on financial matters much like an individual’s family doctor. We all know we want to be healthy but we’re unsure of all that we need to do,” said Layton.

“Our family doctor gathers information, such as blood tests, x-rays, etc. and uses that information to advise us on health matters. The accountant in a similar fashion gathers information, such as reviewing costs of goods sold, ratio analysis, etc. and uses that information to advise the business owner on financial matters.”

This professional can even help an individual with the decision-making process that takes place when he finally decides to buy a business (e.g. the initial acquisition of retailing businesses.)

To be more specific, a good accountant can help out with analyzing and ascertaining the financial strength of a franchisor, which is information that’d definitely aid the franchisee in deciding which franchise to buy. Moreover, he or she can aid with determining the probable earnings and overall potential for profit a certain franchise plus its location may have.

Another role tackled by an accountant involves finding out if the advertising fees and royalties are reasonable. Additionally, the “money expert” should be able to determine whether or not the advertising fees are spent in a way that actually benefits the franchisee – this is important, since there have been instances where the franchisor spent all the national advertising funds for certain areas, while leaving none for other areas.

There are of course, plenty of other roles that an accountant will take on, wherein each role is beneficial to the financial well-being of the company. So when a person finally decides to buy a business, or even a chain of retailing businesses, having a qualified accountant on the team is a must.

How To Identify And Eliminate Distractions During Work

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Learning how to start a business that makes good money is a very attractive idea. There are many types of commercial establishments raking in consistent amounts of cash every day, such as retailing businesses. The level of financial freedom rendered by these income generating entities is high, which is all the more reason for employees to step out of their comfort zones and try starting businesses for themselves.

These commercial establishments will naturally require staff, wherein each member of the team performs specific tasks to ensure optimal operation and growth of the entire company. While the each worker works by the hour, the amount of time the owner puts in counts the most, as he usually addresses all areas of concern inside and outside the establishment.

Learning how to start a business successfully will require the owner to make the most of his time in order to guarantee proficiency in operations and general growth. Owners of multiple retailing businesses will find that the time they have at hand is very limited, and is further diminished by a number of distractions that reoccur throughout the day.

While being distracted from typical routines is perfectly normal, it’s crucial to determine which interruptions are completely necessary, and which ones aren’t worth the amount of allotted time. Now, mentally recalling these disruptions and assigning an “importance rating” to each one may not work, as there can be plenty of diversions which take place throughout the duration of a week.

That being said, getting a piece of paper to record such disturbances, plus a list of supporting details for each one, is the best way to identify and eliminate insignificant interferences.

Here’s how to create a “sheet of distractions”: take a piece of pad paper, divide it into six columns, and write the following headings: date, time, person, concern, duration and importance. Basically, one entry would consist of the person’s name, the date he acted as a distraction, the time he did it, what his concern was, how long the disturbance was, and how important his concern was.

Entries should be inputted for a total of two weeks, wherein each distraction plus supporting details must be recorded immediately. The data will reflect how much time is spent on meaningless interruptions. From that point on, measures can be taken to eliminate these disturbances, and the owner will be able to run his business (even multiple retailing businesses) more proficiently.

Again, learning how to start a business is just a small portion of the battle. It’s important that the owner continuously and efficiently maximizes his time to ensure his company’s success plus continual growth.

Singing a Franchise Agreement

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Buying business franchise opportunities may take a long and arduous process of understanding the ropes of retailing businesses, selecting the best franchise investment, investigating the business background, and finally taking that step of faith to sign the contract and seal the franchise.

Perhaps the most crucial part of a franchise investment is signing the franchise agreement and making everything legal and official. At this point, there is no room for mistakes. A signed contract will be very difficult to amend once problems arise—it will take time, money and effort to correct mistakes. So it’s best to carefully study the agreement and consult experts before signing contracts for retailing businesses.

A disclosure agreement is subject to changes regularly. The document sent to the prospective franchisee may have changed by the time he is ready to sign it. Therefore, it is the responsibility of a franchisee to get the updated disclosure agreement before signing anything. The updated document contains the latest financial reports, any changes in management team, and the business’ financial performance report, among others.

Business contracts are long, technical documents that may be hard to understand, a franchisee is recommended to seek the assistance of a lawyer to review the stipulations and obligations written down. There are lawyers who specialize in retailing businesses.

The guidance of an accountant may be critical at this point. An expert eye is necessary to dissect the company’s financial reports, their earnings and projections. And help the franchisee draw out a business plan that best fits his investment capacities and goals.

For added protection, a franchisee may seek the analysis of a bank or any other similar financial institution. A third party viewpoint is unbiased and may offer the best recommendation for franchise opportunities.

It would be a franchisee’s nightmare to invest in franchise opportunities and find out after that several complaints have been filled against the business. Checking with a local BBB or Better Business Bureau office will give the franchisee information on any complaints about the services, products, or staff of the business.

Lastly, to fully understand the business rights of a franchisee, he may check with the local government office for franchise rules and other related documents that will serve as a business guide. The Federal Trade Commission (FTC) provides businesses with guidelines on how to operate certain services such as telemarketing sales and mail and telephone order, among others.