Filed in
Franchise Consultants |
28 August, 2008
One of the biggest questions asked by new potential team members and franchise buyers of a franchise system as they work to determine if they should purchase a franchise is; How much money will I make. This is a good question however one which is so very difficult to answer as it depends on so many factors, such as their work ethic, business acumen and location chosen, economic factors and a host of other potential eventualities.
It is for this reason many franchisors do not state how much money one can make, but rather the franchise buyer can call up or visit with franchisees of the system and ask them directly. This eliminates any potential false, misleading or unsubstantiated earnings claims which could come back to haunt the franchisor later in litigation if the franchisee fails for some unknown reason.
In fact often franchisee attorneys will lie and file false claims against the franchisor stating that the franchisor gave the franchisee earnings promises, which did not come true. Attorneys and this is only my personal opinion from 27 in business are the biggest self serving lying sacks of feces on the planet. But we figured a way around these professional parasites and I inserted this clause into our franchise agreements;
7.17.2 No Representations
Franchisee acknowledge that there have been no representations, promises, guarantees or warranties of any kind made by Franchisor to induce Franchisee to execute this agreement except as specifically set forth in the Franchise Offering Circular that has been delivered to Franchisee. Franchisee also acknowledges that Franchisee has decided to enter into this Franchise Agreement with Franchisor under their own free will. Nothing on any website has induced Franchisee to enter into this Franchise Agreement. Franchisee further acknowledges that much of the material on any website contains a degree of corporate propaganda and enthusiastic and aggressive consumer-oriented advertising.
- - - - - - - - - - -
Further I insisted that each franchise buyer initial this paragraph in the franchise agreement, put this clause in all caps and had them also initial the page it was on as well as sign the franchise agreement. As a franchisor you must make sure that people will do what they promised and not try to screw you over via some ambulance chaser who has never had to make a payroll or earn and honest living. Consider this in 2006.
\”Lance Winslow\” - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington
Hotel Franchising
Hotel franchising is a very popular concept. Hotel franchising includes the franchising of hotels, motels, inns, and other forms of lodging and boarding. Hotel franchising includes a lot more technicalities compared to restaurant or fast food franchising. Hotel franchising leads to hotel chains appearing in various parts of the world.Franchising in the hospitality industry requires a lot of research and conscientiousness from the franchisees end...
Franchising Directories
Franchises have more opportunities to acquire multiple units with greater potential compared to individual companies with branches. Names of the franchises that are willing to expand in various industries can be available in a franchising directory. This directory provides an exhaustive list of industries wherein the prospect of franchising is available or willing to start. There is practically no industry where the company would not like to grow...
Franchising Companies-The List is Endless
If you want to enhance your chances for success as an entrepreneur, you should go for the franchising companies rather than starting your new business. However, sometimes, when you do not do proper research and analysis and go for the franchise system, even that is not successful and around for the long term. Therefore, in order to assure success and stability for your franchising business, make sure that you do a thorough research and analysis o...
The Power of Franchising
There is probably no better business model that has ever been created in the history of human commerce than the franchising model. The franchising model has been working well for governments, religious organizations, service clubs, brotherhoods and businesses for hundreds of years. The power of franchising is alive and well along with all of its hybrid models or similar type structures. Such as distributorships, multilevel marketing and licensi...
A New Lease in Productivity and Financial Fulfillment
More and more people are flocking to the franchise concept as a means to achieving financial success without climbing the corporate ladder. This is not really surprising as todays competitive job market is getting harder and harder to enter. Moreover, the globalization of economies, jobs among other things has taken out much of the security and reliability of jobs in the market today. Today, youll never know if you are going to be replaced by ...
Filed in
Franchise Consultants |
28 August, 2008
Franchising can be a very effective method of quickly growing your business with minimal investment required in new premises, equipment and people. The franchisees actually fund the expansion for the business. Franchising gives a business the potential for full national coverage as well as significantly growing the capital value of the business.
One of the biggest problems for a business in expanding is finding the right employees to take the business forward. The beauty of franchising is that you get highly committed, capable and motivated individuals who put their own money up to buy a franchise and work in it full time. They are 100% focused on making it work and follow your systems and processes to ensure their success. This also guarantees good quality control and service for customers and clients.
The possibilities for franchising are endless too. Over 80 different industries use franchising to get their goods and services to the market place.
Franchising Income
There are six main income streams that can occur from franchising your business. Depending on the products and services that your business offers you will benefit from some or all of these income streams which can be seen below:
1. Upfront Franchise Fee
\r 2. Management Fee
\r 3. % of turnover
\r 4. Supply of goods
\r 5. Backend products and services
\r 6. Volume discounts
Franchise Success
The more successful your franchisees are the more likely you are to sell more franchises. Once potential franchisees can see a number of other franchisees who are doing well this will help them make their mind up to buy your franchise.
Mark Harris is the Managing Director of the Franchise Company, Business For Profit http://www.businessforprofit.co.uk and has a Franchise Directory which can be found at http://www.franchiseseeker.co.uk His blog for franchise seeker appears at http://www.franchiseseeker.co.uk/wordpress
7 Benefits Of Franchising
Statistics on franchising are astounding for the period 2005-2006 in the US there were approximately 1500 brands franchised with more than 767483 outlets with a turnover of USD62460 billion. The figures are an indication that franchising is an accepted concept that is profitable.All over the world people are choosing to run franchises instead of floating new businesses as with franchising all the basic market surveys, research, and business plans...
Hotel Franchising
Hotel franchising is a very popular concept. Hotel franchising includes the franchising of hotels, motels, inns, and other forms of lodging and boarding. Hotel franchising includes a lot more technicalities compared to restaurant or fast food franchising. Hotel franchising leads to hotel chains appearing in various parts of the world.Franchising in the hospitality industry requires a lot of research and conscientiousness from the franchisees end...
Franchising Directories
Franchises have more opportunities to acquire multiple units with greater potential compared to individual companies with branches. Names of the franchises that are willing to expand in various industries can be available in a franchising directory. This directory provides an exhaustive list of industries wherein the prospect of franchising is available or willing to start. There is practically no industry where the company would not like to grow...
Benefits of Franchising
As with any other business, franchising has a number of advantages and disadvantages. Keeping these in view, an investor can decide whether they want to open an independent business or a franchise.One of the major advantages of franchising is that the company would deal with most of the financial aspect of the business. Even though the applicant needs to provide the franchising fee and other fees later on, the major part of the assets would be ta...
The Power of Franchising
There is probably no better business model that has ever been created in the history of human commerce than the franchising model. The franchising model has been working well for governments, religious organizations, service clubs, brotherhoods and businesses for hundreds of years. The power of franchising is alive and well along with all of its hybrid models or similar type structures. Such as distributorships, multilevel marketing and licensi...
Filed in
Franchise Consultants |
27 August, 2008
Can we franchise nations to create a World Franchise System that might be similar to the United States but it would be more like the United Countries in Franchising motif? Would it be strong enough to stay together like the United States has and work together too?
The Franchise System grows as the Franchised Outlet Countries succeed. Of course no doubt each country would be slightly different and there would be much more diversity and regional variation than just in the United States. Is this possible? Well, in franchising there are some franchises that have different markets. Take the company I built (Carwashguys.com), some markets have lots of fleets of Trucks to clean, some have none, some have boats to clean, some have none.
Some are small cities with less opportunity some are great big markets with seemingly unlimited opportunities. Regional variation also occurs where it rains from Oct. 15 each year for six months straight in the Northwest and it is 100 plus degrees all summer in AZ and labor hardly can be found to work. Regional Variations on the franchise Business Models are indeed a given and so that is not a worry.
There would also be cultural differences, weather differences, terrain differences and differences in raw materials and thus differences in how things were built and out of what and to what specifications. IE Earthquakes, Typhoons, volcanic, etc. But since we are talking about franchising the system, rather than the way of life we are indeed talking about; Roads, Rail, Airports, Bridges, Water, sewer, schools, government structures, etc. Most of this would indeed be Plug and Play. Civilizations to succeed have basic needs; Jered \”Collapse\” and government leadership training; Collins \”Built to Last\” & \”Good to Great\”. Consider this in 2006.
\”Lance Winslow\” - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington
International Franchising
Franchising has gone international in various sectors. The world seems to be getting smaller as more and more companies scan the globe to put up franchise operations. The international franchise market has expanded to a large extent during the past few years. Countries throughout the world seem to be participating in the growth of industries that was previously specific to a particular country only.Some of the major industries are food, electroni...
Franchising the World will Never Work Say Critics
Many critics and critical thinkers think that Franchising the World cannot work, but it already kind of is. Oh, these critics have all sorts of silly notions as to why it will not work such as; it is too complicated. Or franchising Nations and Nation States is too complicated. They say it is much more complicated than franchising a Burger Joint and leave all the hard work to us?Sure leave it to them and the United Nations huh? What on Earth are t...
Franchising Directories
Franchises have more opportunities to acquire multiple units with greater potential compared to individual companies with branches. Names of the franchises that are willing to expand in various industries can be available in a franchising directory. This directory provides an exhaustive list of industries wherein the prospect of franchising is available or willing to start. There is practically no industry where the company would not like to grow...
Franchising Companies-The List is Endless
If you want to enhance your chances for success as an entrepreneur, you should go for the franchising companies rather than starting your new business. However, sometimes, when you do not do proper research and analysis and go for the franchise system, even that is not successful and around for the long term. Therefore, in order to assure success and stability for your franchising business, make sure that you do a thorough research and analysis o...
Hotel Franchising
Hotel franchising is a very popular concept. Hotel franchising includes the franchising of hotels, motels, inns, and other forms of lodging and boarding. Hotel franchising includes a lot more technicalities compared to restaurant or fast food franchising. Hotel franchising leads to hotel chains appearing in various parts of the world.Franchising in the hospitality industry requires a lot of research and conscientiousness from the franchisees end...
Filed in
Franchise Consultants |
27 August, 2008
Buying a Franchise is a great business opportunity as the majority of franchisees are still trading successfully after 7 years (source - US Department of Commerce figures). Before you start looking at franchises, decide which market niche you want to enter. Choose a field that not only creates a livelihood but one that you personally will enjoy.
You also have to analyse your self. Are you good at sales? If you do not like being cooped in to one environment, then a franchise which demands that you out and meet people might be good for you.
Do you prefer it if the customer comes to you? If you prefer to have a retail outlet where you task is to ensure that the environment is as conducive as possible so that customers will be more inclined to shop, then a fast food franchise or similar might be up your street.
Where does your expertise and strength lie? This analysis will determine the franchise that you choose. Always choose the option that is right for you! You are more likely to succeed if you enjoy your work.
Some franchises do all the market research for you and even help you to choose a location for your business. Your job is then to manage the business, keep proper accounting records, always be at hand and control the staff. This would be ideal for a person with good management skills.
Other franchises ask you to work from home, set up a mini office and then go out and network with local business to generate your income. This might suit people who do not like to be tied down and handle rejection fairly easily.
Once you have found the niche that you enjoy, then start looking at all the franchises available in this field.
Choose a franchise which has a proven track record, and then speak to existing franchisees. By speaking to them you will be able to quickly understand the business and the pit falls. Spend your free time analysing the market and visit the library if you require further information.
Most franchisors offer excellent training and long term support. Some even have refresher courses throughout the year which you can attend. Make sure that you are happy with the level of ongoing support given.
The advantages of working for yourself, but not by yourself are what many franchises try to encapsulate. The disadvantages of buying a franchise are that you have are restricted in many areas. If the niche that you choose is right for you then you have overcome the biggest hurdle to making a success of the opportunity.
If youre ready to make the commitment with the right opportunity, franchising can be a rewarding, and often, a highly lucrative business. Remember to take professional advice before signing any legal documents.
Naz Daud is the founder of CityLocal. This Franchise Opportunity is for people who would like to work from home and be their own boss.
Business Franchises and UK Business Directory
Business Franchise Opportunity
Ireland Business Directory & Franchise Opportunity
Buying A Franchise
When buying a franchise there are lots of things to be considered. Some obvious, some not. When looking for your perfect franchise some of that perfection is going to be what they see in you just as much as what you see in them. When discussing franchise opportunities with others it is generally suggested that they keep the following things in mind.Your current financial position plays a major role in buying a franchise. Do you have the financial...
Evaluating a Franchise Business
There are now franchise opportunities that operate in almost every type of business category that you can imagine. They are available in most price brackets and can suit most people lifestyles. Franchising is now a very reputable way to start a business and has revolutionized the way people do business throughout the world.Are you considering buying a franchise? If so then you need to decide on the type of business that would suit your lifestyle ...
Buy Into The Right Franchise Business
Many people who would like their own business wonder if they should buy a franchise business. It is an attractive option for two types of people.First, people who are experienced in a certain type of business but recognize the risks, challenges and hard work involved in starting one from scratch. Secondly, people who have no business experience and are interested in the support, training and proven systems for success that they would get if they ...
What To Take Into Consideration When Starting A Franchise
Franchising offers you a middle ground between starting your very own business and working full-time for somebody else. Though there are a lot of advantages to franchising, it does take a lot of commitment, capital and time.Before buying into any franchise it is important to do your research well. Dont just buy into a franchise because it is top-rated. The first thing you need to determine if the franchise fits into your business style. Running a...
Disadvantages of a Franchise Opportunity
When you buy a franchise opportunity, you are buying much more than a just a business. A business which stands a higher chance of success compared to people who choose to start a business on their own. You are also buying into a business which has strict control and regulations as to what you can and can not do.The franchisor will insist on certain quality standards being maintained. This is so that the end consumers receive a high standard produ...
Filed in
Franchise Consultants |
26 August, 2008
Introduction
Business ventures need to be complemented with excellent consultation. The more sources of information a business person has, the more efficiently they can undergo the process. Being part of a franchise is a wise decision, but many hours of research are needed for the appropriate acquisition of knowledge. Even after the process has commenced, a good business-minded person will realize that they constantly need to learn more through experience and through the consultation of others.
Why they are needed
Getting a qualified franchise attorney is a suggested component of the franchise process. Look for an attorney that specializes in franchise law and has spent some time working with the franchise industry. Not only should they know franchising very well, but they also need to know your particular states franchising rules, laws, and regulations. It is also suggested that the selected attorney is not affiliated with the franchisees franchisor.
Good law consultation is needed at every level of the franchise process. Franchisors may have a team of legal advisors and franchisees usually have at least one source of legal counsel.
What they can help with
Franchise attorneys will aid a person with understanding legal issues and documents and guard them from making costly mistakes. Documents (especially in the beginning of the venture) are filled with technical terms and may not be easily understood by all, so having someone to serve as an interpreter is a wise decision.
Franchising is associated with a series of involved and complex laws. The system also involves many different players on varied levels. The enterprise is much easier handled along with the help of a specialized counselor.
A prospective franchisee will need to analyze particular franchises to theorize what will be the best fit for them. A franchise attorney will be able to research each franchise according to their business record and reputation within the industry.
Specifics
As aforementioned, a franchise attorney will help you through the entire franchise process. The following is a list of some of the components they will help you with:
- Review of the Uniform Franchise Offering Circular
\r - Negotiation with the franchisor
\r - Preparation of shareholder agreement
\r - Negotiation of leases
\r - Help with dispute resolution
\r - Review of renewal agreements
\r - Transactions
Franchise attorneys can be found by:
- Referral from other attorneys
\r - Referral from the American Bar Association
\r - Referral from the International Franchise Association
Franchise Fetch delivers franchise opportunities to the public. We have businesses offering franchises in many industries. Check out our Web site to see all of the occasions we have to offer.
Why You Need A Franchise Attorney
Unless you are a franchise attorney, dont decide to set up your won franchise business without consulting one. No matter how skilled you are at doing online research into the technicalities of starting a franchise; no matter how much advise you have been given by other successful franchisees; and no matter how helpful your franchisor is, you need to hire your own franchise attorney before you sign anything, both when starting your business and d...
Buying A Franchise
When buying a franchise there are lots of things to be considered. Some obvious, some not. When looking for your perfect franchise some of that perfection is going to be what they see in you just as much as what you see in them. When discussing franchise opportunities with others it is generally suggested that they keep the following things in mind.Your current financial position plays a major role in buying a franchise. Do you have the financial...
Best Franchise Shop Opportunities
There are two main criteria that a potential franchisee should consider when deciding where the best franchise shop opportunities lie. The first is strictly financial. The second has to do with where the potential franchisees strengths and goals lie.Costs
The type, size, location and recognition of a franchise will determine what the initial cost of a franchise is. You should have a fairly good idea of how much you can afford to spend initially ...
Understanding The First Steps in Franchising
You have done the research, found the start-up capital and decided upon the franchise that is right for you and/or your partners. If you have begun the process of initiating a franchise relationship the franchise information has begun to flow and there is plenty of it.Read carefullyr r Understanding franchise agreements and reams of franchise information is, and will continue to be, a daunting task. The information covers everything from advertis...
Franchise Overload
Going into the franchise business might be a very good idea for you as it is one of the popular methods of doing business today but when you do a search of the available franchise opportunities, choosing one among the hundreds might be a daunting task.Of course you can always go into the fast growing fast food franchise industry but if you feel that your location is already saturated with this kind of business then maybe you can look up the other...
Filed in
Franchise Consultants |
25 August, 2008
Have you considered buying a franchise instead of trying to start a business from scratch. Many franchise agreements are renewed every five or ten years, automatically. If you do not want to renew your franchise you need to let the franchisor know a little bit in advance as it generally states in the Uniform Franchise Offering Circular (UFOC) The franchise Disclosure Document used in franchising. Most require that you out it writing so there is no question about your intent, some require this 180 days before expiration. Others state that if you do not specifically say you do not wish to renew the agreement you are automatically renewed. If you do not want to renew your franchise at the end of the five year period, that is ok, but there are generally stipulations after termination. You cannot simply change the Burger King Hamburger sign out front to Joes Burgers and keep operating (example only).
You can decide not to renew but many franchise attorneys might suggest rather than just not renew; that you transfer your franchise to a new buyer and get the money out of your business that you deserve for building up the franchise. Example: If you have built up your business and you are doing one million dollars a year, just under 100,000 dollars a month, finding a buyer should not be a problem. Then you would be compensated for building the business up to that point or maintaining it at that level. Many businesses sell for a multiple of of their gross sales and a business broker can give you an appraisal. If your business is small and lets say doing one hundred thousand dollars gross a year, you may wish to sell your business for an additional fifty thousand dollars above and beyond the value of your equipment. In other words, whatever the equipment is worth plus fifty thousand dollars. (example only).
The franchisor may help you find a buyer or you may find a buyer yourself, sometimes the franchisor may charge you a fee from renewal and this is quite typical as they have real costs of screening and training the new franchisee. But you need to understand that not renewing your contract will cost you money. You will lose your original investment. At the end of five years if you have run your business exactly how we have shown and you qualify for renewal, but you decide you do not want to run your business anymore, the franchisor may be glad to buy your business at a fair price or make you and offer. Some franchise agreements require that the franchisor has the first right to purchase or first right of refusal, some require both.
Of course if you dont follow the franchisors confidential operations manual and continually violate the standards of the franchise you will not qualify for renewal at all, you might be terminated completely and not able to sell your business, which in franchising we call transfer, because you do not actually own the business, you are basically leasing it and using your business acumen to derive an income for your hard work in promoting the franchisors brand name.
Before you buy a franchise consult an attorney so you know what you are buying, even though most attorneys are considered scoundrels and parasites of our great nation as they steal the productivity from America and produce nothing in return; causing a complete melt down of our great civilization while destroying all we are and all we have built. Think about it.
\”Lance Winslow\” - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington
Franchise Overload
Going into the franchise business might be a very good idea for you as it is one of the popular methods of doing business today but when you do a search of the available franchise opportunities, choosing one among the hundreds might be a daunting task.Of course you can always go into the fast growing fast food franchise industry but if you feel that your location is already saturated with this kind of business then maybe you can look up the other...
Is Franchising Right for You?
Most probably you have heard of several success stories in franchising. Perhaps you have given it a lot of though and are thinking of wading into the business just to test the waters. Before you do, here are some other questions you might like to chew on just to determine if franchising is indeed for you.Have you manage to limit you choices of a franchise to a specific product or service? You must have at least the basic knowledge on the franc...
Best Franchise Shop Opportunities
There are two main criteria that a potential franchisee should consider when deciding where the best franchise shop opportunities lie. The first is strictly financial. The second has to do with where the potential franchisees strengths and goals lie.Costs
The type, size, location and recognition of a franchise will determine what the initial cost of a franchise is. You should have a fairly good idea of how much you can afford to spend initially ...
Why You Need A Franchise Attorney
Unless you are a franchise attorney, dont decide to set up your won franchise business without consulting one. No matter how skilled you are at doing online research into the technicalities of starting a franchise; no matter how much advise you have been given by other successful franchisees; and no matter how helpful your franchisor is, you need to hire your own franchise attorney before you sign anything, both when starting your business and d...
New Franchise Opportunities
Starting a franchise business is a change to your own career from an employee to owner. There are many new franchise opportunities available in UK today. You should be very careful in selecting the franchise, make sure that it is profitable. Franchises rely heavily on mother business for all the main activities, for financial assistance etc. The mother business will be assisting until the new franchise gains some profit from the business.There ar...
Filed in
Franchise Consultants |
24 August, 2008
As with any other business, franchising has a number of advantages and disadvantages. Keeping these in view, an investor can decide whether they want to open an independent business or a franchise.
One of the major advantages of franchising is that the company would deal with most of the financial aspect of the business. Even though the applicant needs to provide the franchising fee and other fees later on, the major part of the assets would be taken care of by the company. Also, the company would provide trained employers either initially or on a long-term basis. Even if this were not the case, the company would train all the new employees, saving the training costs for the franchisers.
Franchisees need to provide an initial franchise fee as well as some amount of capital as a security deposit. This will definitely ensure the franchise will be run with dedication, as no franchiser would wish to lose a lump sum in capital to the company.
Franchising indicates the company already has a good standing and wishes to expand. So the customer base is already built and the franchising should have no problems even during the initial stages. This will ensure good business right from the start and ensure that the franchiser feels motivated by the response.
Also, franchises can attain growth fairly quickly compared to the regular businesses. This is because there is no limit to the number of franchises that can rise under a particular company. There is no way a company can open branches at the same rate as franchises. Also, the companies get franchise fee, franchise royalty, discount from vendors, better lease options, and better discounts on equipment and raw materials. This indicates that the companies get money from a number of sources when compared to individually owned companies.
Franchising could be a bad option for the franchisee if the business is already successful and has a good standing in the market. Also, the company gets to control the franchise and not the owner. So, even though a franchisee runs the business, the company pulls all the strings. The company would make all the major decisions and the franchisee usually does not get any say in the matter except when it does not really affect the companys policies.
Even though penetrating the market is easier with franchisees, it might involve a lot more legalities when compared to that of an individually owned business. This might ensure taking up more time before the franchise being able to attain a strong footing in the market.
The company must be able to deal with the rapid growth of the franchisees as such situations might, at all times, require excess staffing, and excess training materials. Also, they must take care to avoid any kind of litigations with respect to the franchisees.
Franchising provides detailed information about franchising, franchising businesses, franchising directories and more. Franchising is affiliated with Home Based Business Opportunity.
Hotel Franchising
Hotel franchising is a very popular concept. Hotel franchising includes the franchising of hotels, motels, inns, and other forms of lodging and boarding. Hotel franchising includes a lot more technicalities compared to restaurant or fast food franchising. Hotel franchising leads to hotel chains appearing in various parts of the world.Franchising in the hospitality industry requires a lot of research and conscientiousness from the franchisees end...
Franchising Directories
Franchises have more opportunities to acquire multiple units with greater potential compared to individual companies with branches. Names of the franchises that are willing to expand in various industries can be available in a franchising directory. This directory provides an exhaustive list of industries wherein the prospect of franchising is available or willing to start. There is practically no industry where the company would not like to grow...
7 Benefits Of Franchising
Statistics on franchising are astounding for the period 2005-2006 in the US there were approximately 1500 brands franchised with more than 767483 outlets with a turnover of USD62460 billion. The figures are an indication that franchising is an accepted concept that is profitable.All over the world people are choosing to run franchises instead of floating new businesses as with franchising all the basic market surveys, research, and business plans...
The Benefits of Franchising Your Business
Franchising can be a very effective method of quickly growing your business with minimal investment required in new premises, equipment and people. The franchisees actually fund the expansion for the business. Franchising gives a business the potential for full national coverage as well as significantly growing the capital value of the business.One of the biggest problems for a business in expanding is finding the right employees to take the busi...
Business Management Case Study; Arbitration, Mediation or Litigation in Franchising Agreements
Executive management franchising teams in franchising companies must decide how they wish to handle disputes in the franchising agreement. More often than not clauses are put into the franchising agreements, which stipulate how disputes between franchise stores and franchisees will be handle.Generally the parties agree in advance to handle such disputes in a certain way. One of the most common ways, which saves both the Franchisor and the franc...
Filed in
Franchise Consultants |
24 August, 2008
Sally and Jim have launched their automotive franchise business and are now selling franchises; problems arise as lawyers and over regulation threaten to ruin their lifes work, see how it ends; tragedy or success. A realistic story of modern day franchising. . .
Sally says well we do not need to do site selection because we were going to go to that shop it is a great location, besides since Joe is a long time employee we are giving him a discount. The S2D2 is so smiling now seeing as they have been on the phone nearly 45 minutes at his billing price of $150 per hour and he loves to round up, over billing may not be his middle name, but definitely in his family tree are the family names of White and Waters, he continues smiling. The S2D2 says you cannot give him a discount if his parent partners are from IL and you have to offer the same exact deal to everyone in IL and it will severely jeopardize your future franchising in IL. Sally enraged starts to say something, This is b-, but doesnt she just is thinking how much she wants to kill the adultering, over charging, scum and S2D2 (Sally thought this not the author of this truly purely fiction story) for not explaining all this ahead of time, they promised Joe. Jim and I honor our word and besides we are about to open the new shop and Joe has waited for this and we are over loaded with business as it is, even if we opened the shop ourselves either way, it must be opened to meet customer demand, we just cannot wait, no way.
The S2D2 feeling the tension, which usually brings him his best money clientele, says quickly. Okay, I think I can work through this, we will figure it out, why not come in tomorrow to talk about it? Jim says We cant, we are stacked with cars at all three shops, down two mechanics and Joe will be gone to MI to talk to his soon to be partner. They are going fishing, Joe needs some time off. The S2D2 says well tell you what lets get your bill paid current and we can meet, I have time next Wednesday, (six days away) meanwhile tell Joe to hold tight on the meeting, wait on the disclosures, see if Joe can get out of the lease deposit or transfer the deal to your name. Tell Joe to alert his parents that he will not be cashing the check until I can call the states of Illinois and Michigan and get those documents in there. The attorney knows some folks in Michigan from college to drop names so he figures he can easily get the exemption for making an offer but not selling yet, as he remembers reading something in the regs on that a few years ago. Illinois will be a different issue, he has to think on this and be careful not to get himself in trouble.
Jim says we have to wait another week? Jim thinks to himself, do I have to call you when I need to use the restroom too, you would probably like that to hold me and help me aim, he decides he will just be quiet and listen? The S2D2 says Yes, Jim, I am afraid to say yes. And meanwhile contact an Accounting firm and make sure they do audits. Sally says but, you said we did not need audits for two-years? The S2D2 says, Well yes that is true but you are franchising in IL now, they require audits. Unless Joe has another way to do this business on his own? Sally says Ill ask him, but I think he has no credit, especially after his divorce two-years ago, his wife ran off with an attorney. The S2D2 sensing some hostility being aimed his way says I am sorry to here that, but maybe you can figure something out, maybe there is another way, meanwhile. It is 5:30 pm and I have to take my daughter to Harp Lessons and then to the Batmitzvah rehearsal, we are so proud of her. Besides we have been in high time billing for 30 minutes. Tell you what I will work on this first thing tomorrow, get your bill caught up, check on the CPA firm, I have a friend who does a little of that if you want a name? Sally says, NO, we will find one. Jim says, thanks for your time, we will do what we need to do. The S2D2 says Dont thank me, you are paying for it. Then he turns to his secretary and says, my wife can take the kid to piano lessons or whatever it is she is doing, would you like to have drink Liz and they roar off in a BMW paid for with a little tricky accounting and double billing to clients and a few thousand copies at $.50 a page.
The next day Sally calls to find an accountant to do the audit, she calls the entire yellow pages and even uses the new South Bell owned online yellow pages, no one wants to do it. Most tell her it will be tough with the new Sarbaines Oxley law all the accountants are busy and most no longer do audits, too high errors and omissions insurance costs, due to too much litigation, too much liability and getting peer reviews is now triple the time to complete, along with their costs.
Sally is very upset. Joe was upset because he cancelled his fishing trip wonders if his investor friend will be angry. He is also upset since Sally asked him if he could do the business without his parents, now wants to reverse the lease and thinks that Sally and Jim are going to try to open that new shop without him. Joe cant wait, wants to start. His partner wants to move from MI before winter sets in, the delay will mean he will come and want to get a paycheck before the business is ready to pay for two owners salaries. Joe needs both his parents and partner to make his dream, of owning his own shop a reality. So far the attorney is the only one who is making any money. Sally is on everyones bad list and Jim is having ulcers again. So stressed out he actually yelled at a customer again today, he never use to do that, that was way out of character, Jim loves his customers. Sally is determined to work this thru, she will call more accountants on Monday, but from the word she has gotten it will be another $35,000 to do the audit and take minimum of three months, that is if someone will agree to do it and if the costs do not go up again, as most accountants are really not interested in this type of work for anything but Fortune 500s. Sally knows three months is unworkable for Jim, Joe or even her, they need the new shop now. Joe is pissed at Sally, even though he knows it is not her fault. Jim is mad that Joe will not be patient and Jim is mad at Sally too and now he hates attorneys even more, he thinks they should all be killed, but also knows, it really isnt even the attorneys fault, it is the regulations he thinks, all these stupid rules. Joe thinks of all the rules he has to deal with already, all the agencies all believing they are so important and all the possible ways he can get sued, he runs a quick list in his head as he thinks knowing he cannot possibly remember them all and knowing that anyone of them can shut down his business. The constant stress, lets see in my auto shops, I have to deal with OSHA, EPA, DOT, IRS and things like SARA, RCRA, HazCom, VOC, MSDS. There are more than 100 different agencies that the owner of an auto shop has to deal with. Just some of the necessary permits needed; Burglar Alarm Permit, Building and construction Permit, Occupation Permit, Conditional Use Permit, fire Protection Permit, Hazardous Materials Permit, Generator treatment permit, Underground storage tank permit, Accidental release prevention permit, Above ground tank permits, Land-use permit, Storage Tank Permit, Underground tank monitoring plan, SB198 Safety Plan, Zoning Approval, Landscape Authorization permit, noise Permit, Industrial water discharge permit, Business Personal Property County license, Fictitious name Filing, Public Health Permit, Weights and Measures permit if gas is sold, Cradle to grave form on all chemicals that are classifiable, Waste management Plan, Certificate of Disclosure of hazardous Substances and Plan, as well as other things like a Corporations number, Tax ID Number, OSHA plan, Ill stop here, but they dont. Oh crap the phone is ringing, damn lawyers, damn regulators, we ought to bury them upside down for those new bicycle racks the city put in next to the bus stop in front of my shop while imminent domaining my much needed parking area. Damn government. Urrrrrrr!
Note: Jim is a fictional character he thought this, the author of this story on the other hand loves wonderful government agencies, adores lawyers, and likes to participate in government rule making, because it is a worthy use of time and is extremely pleasurable?
Jim settles down he thinks the S2D2 is just doing what all attorneys do, that is their job description, it merely justifies all the jokes he and his crew tell in the shop, but everyone already knows this anyway he decides. Who thought of all these stupid laws anyway? It just makes no sense, it is just like being stuck in his four-wheel drive as a kid in the MUD.
Meanwhile the attorney is at a franchise convention (wink, wink). The franchise attorney has no clue what to do and gets on the ABA forum online system and describes the situation and asks what to do, hoping someone else on the board has worked thru such a mess before, knowing every deal is gray and nothing is black and white and if no answer comes back by his return over the email, he will figure something out, after all that is why they pay him the big bucks?
Liz rolls down the window cruising down the strip in Paradise City, the wind blown hair and a glance towards the S2D2 and he knows this is going to be one hell of a night. The S2D2 thanks his lucky stars and thinks a little thanks goes to Jim and Sally and that Joe character, whoever he is. Oh and thanks to the over regulation and miss-coordination of the Federal Trade Commission and states like IL. He thinks also may be one day he might just actually go to one of those Franchise Rule making meetings, maybe he will rifle off a letter, or have his paralegal write it while he takes dictation? (no pun intended). He wonders who ever goes to these meetings, after all Jim and Sally are too busy and the Federal Trade Commission has them in the stupidest places anyway. Just then Liz turns again and says lets go here, lets get a room with a Jacuzzi over looking NY, I love green. The S2P2 thinks, well I love green to, even if this one is only a building. He pulls in all smiles knowing there is a lot more money for more trips like this where that came from. Jim and Sally are becoming quite good customer, a couple more like them and he can go into semi-retirement, maybe become a wine collector on the side. He flips the valet the keys, a ten spot and off to the suite they go. He follows Liz in, what a body he thinks, he has totally forgotten he is married.
Too be continued. . .
\”Lance Winslow\” - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington
Either Regulate Franchising Correctly or Do Away With the Regulation
Recently, a very wise studier of the franchising industry sent me an email and we began to discuss the issues considering modern day franchising. They stated:I think we should either regulate franchising as well as securities are regulated or do away with regulation of franchising entirely and concentrate on state fraud laws for consumers of business opportunities.Interesting, as I concur with this actually and after spending over a decade in the...
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Filed in
Franchise Consultants |
24 August, 2008
Understanding the Uniform Franchise Offering Circular or UFOC that each franchisee must get 10-days prior to purchase is a lot harder than it seems. You see many believe that Item 20 is a disaster for both franchisees who deserve to know and franchisors who attempt to comply.
Why do they say this? Well because it is so very confusing, ridiculous and outrageous and thus it means nothing in the end for the franchisee or the franchisor. There are duplicate listings due to circumstances often and/or numbers that do not add up and appear as missing. Then the recording is not in real time, 90-days.
The regulators really do not understand their own laws and many who work at the FTC are 23 year olds who have never run a business or been involved in the Franchising Industry. Some believe that they work for the government because they cannot make it in the real world, whether or not this is true is hard to say, but people are talking about it. Others say that their bosses are bureaucrats who have been given a little authority, which is misused, although still others believe there ought to be more authority given, I agree with the former.
Franchisees need to do due diligence before they purchase a franchise, but the UFOC item 20 is misleading and ill-thought out, does not fit the modern market place or actual way a franchise works, further it gives too much information to competitors and overseas competition. The expected number of units to open in the following year is also misleading, and unfair.
If the franchisor writes nothing in one of the state lines, then later they can be sued for misrepresenting their plans, it becomes a \”forward looking\” statement and has no business in a UFOC which is suppose to be a disclosure prospectus, theoretically. Actually, however a franchise is \”leasing a business for a term\” and it is not an investment really. The rules for franchising should have never been based on \”investment\” laws. Think on this if you are involved in franchising or wish to buy a franchise.
http://www.entrepreneur.com/franchises/franchiseexpertsarchive/article54800.html
\”Lance Winslow\” - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/. Lance is a guest writer for Our Spokane Magazine in Spokane, Washington
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The Dollar Store Franchise - Taking The Market By Storm
Have you noticed that one of the aisles in your local supermarket or Wal-mart is now reserved for $1 items? Even though same item, under a different brand name, may be available for a higher price elsewhere in the same store?If so, youre not alone. Dollar store franchises have been among the fastest-growing segment of the retailing business for nearly a decade, and a report from Retail Forward estimated that there were enough US markets into ...
Filed in
Franchise Consultants |
23 August, 2008
Many franchises run successfully with only minor problems between the franchisee and franchisor. But sometimes disputes can arise. What is the best way to handle these disputes?
Most disputes arise primarily because of lack of communication. It is important to keep lines of communication open at all times so that minor niggles are resolved easily and quickly.
The first point of call is to raise the matter verbally to the franchisor or their representative. Do not make your dispute public or raise any threats at this point. Make sure you raise the matter clearly, politely and in a fair manner.
If this approach fails to yield a satisfactory result then it is time to put your position forward in writing direct to the franchisor. Again try and look at both viewpoints when writing the letter and make sure you send the correspondence by registered post.
In your letter clearly identify what the problem is, the outcome you are seeking and what you hope to achieve. Make sure you keep a copy of this letter.
It can take anywhere between one and three weeks to get a written response depending on how large an organisation you are dealing with. Be patient as the grievance will have to be analysed and if possible solutions created.
If this approach fails then now is the time to write to the franchisor to look at appointing a mediator to analyse the problem and find a solution. How this works will be clearly laid out in your franchise agreement. Usually both parties pay half the cost of the mediator.
The mediator will look at your grievances in an unbiased manner and hopefully help to resolve the dispute in a short and timely manner. Many problems that seemed impossible to resolve have been solved very quickly once a mediator has been appointed.
The mediators role is often not to dictate the solution but rather try and get the franchisee and franchisor talking so that they can reach an amicable solution. If this approach does not work then the mediator might be forced to give their own judgement.
Often the mediator will ask for some payment upfront and an agreement will need to be signed that deals with how the mediation is to be handled and the relative costs of both the parties.
Each party will have to bear their own costs for travel arrangements and accommodation. The time and place of the meetings will have to agreed by the three parties concerned.
Finally if even this approach fails then the only solution left is to seek redress through the courts. This final strategy can be extremely expensive and should only be attempted if the funds are there and the franchisee is sure of his or her case.
If the grievance is not too detrimental to the running of the business then it is perhaps better to give up and resign yourself to the fact that the franchisor has won the argument. Bear in mind that the franchisor invariably tends to have very deep pockets and can drag on the case for a very long time!
Naz Daud is the founder of CityLocal. This Business Franchise Opportunity is for people who would like to work from home and be their own boss.
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