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2 05, 2019

Bank on It!

2019-05-03T15:10:28-04:00May 2nd, 2019|Tags: , , , , , |

Bank on It!

Find help landing your SBA loan

by Shay Mora

Even a low-cost franchise can require $100,000 to get up and running, and some need considerably more. Entrepreneurs often must line up financing for their start-ups or other major expenses. Many of them seek Small Business Administration loans but find the process challenging.

One source for assistance is FranFund, which has used its portfolio of top SBA lenders and SBA Express/7(a) Small Loan programs to help hundreds of new and existing franchisees receive funding. These loans are ideal for service-based businesses requiring $150,000 or less for a start-up, expansion, or working capital loan; some lenders go as high as $350,000.

Although the fast-tracking of SBA Express attracts many borrowers, the specifics of these loans often create confusion over eligibility, requirements, and terms. Following are answers to common questions about SBA Express/7(a) Small Loans.

Are all SBA Express Loans the same?
Yes. All SBA Express loans follow the same SBA rulebook regardless of lender. Many lenders advertise an SBA Express program, but most actually submit those loans as SBA 7(a) Small Loans to secure a larger SBA guaranty (up to 85% vs. 50% Express) as additional security because these typically don’t require personal collateral. Also, with the SBA guaranteeing 85% up to a loan amount of $150,000 and only 75% for loans from $150,000 to $350,000, many banks cap their programs at $150,000.

Where can I get an SBA Express/7(a) Small Loan?
Banks can be selective about the industries they work with, number of startups they lend to, and kinds of business costs they cover. Because it is challenging for borrowers to find a bank that is a good fit for their specific franchise, it’s wise to work with a lending consultant such as FranFund, which specializes in SBA loans and can match franchisees with the right lender.

Can I receive an SBA Express/7(a) Small Loan if I have bad credit?
Banks look at business owners’ personal credit score (FICO) and small business credit score (SBSS). If your personal credit score is below 680, you’ll need a good explanation and good liquidity/income. The SBSS scores a small business by its likelihood of making payments on time. You’ll need an SBSS score of 165+. A past bankruptcy, short sale, or judgment is not an automatic disqualifier as long as it is at least 3 years old and you’ve re-established clean credit (680-plus). You must not have any open collections, past-due student loans, unpaid child support, or tax liens.

Is a cash injection required?
If you have a business that has operated longer than two years and is successful, then a cash injection typically isn’t required. For start-ups, you can expect to contribute 10% to 20% of personal funds, meaning you can’t use borrowed funds such as a home equity line of credit or personal loan. Funds from a 401(k) or IRA rollover can satisfy this requirement, however.

How is the loan secured?
A lien on your business assets secures the loan. No personal collateral is needed, but a personal guaranty (an individual’s legal promise to repay the debt) is required from each owner with 20% or more ownership of the business as well as spouses, if their assets and/or income will be used to qualify.

What’s needed to close the loan?
The business should be within 60 days from generating revenue, which means these items need to be complete:

  • Training certificate (required by some lenders).
  • Business insurance.
  • Signed franchise agreement and SBA franchise addendum.
  • Signed lease agreement (if applicable) and the bank’s landlord consent waiver.
  • Business licenses/permits required by state and county.
  • Proof of equity injection (down payment).
  • Additional requirements if the business has a build-out.

How soon will I receive funds?
Funding can occur five to 10 days after all closing requirements above are completed. This allows time for SBA document completion, bank review and approval, and final signatures on the closing documents.

FranFund helps franchisees put the right funding strategy in place as a framework for long-term success. With ex-bankers on its team, quick preapprovals, and a 99% loan approval rate, FranFund makes the lending process as painless as possible.

Want to learn more about SBA loans and other financing options? FranFund designs all-in-one funding plans that grow with your franchise and set you up for long-term success. Whether you are considering leaving your current job to start a new venture or if you want to expand your existing operation, we are here to help. Get started today at bit.ly/frandfund-fd or email info@franfund.com.

2 05, 2019

Dig Into Due Diligence

2019-05-03T15:21:35-04:00May 2nd, 2019|Tags: , , , , |

Woman on Phone

Dig Into Due Diligence

by Diana Capirano
Certified Franchise Consultant

When exploring a resale, the level of due diligence will be driven by the complexity of the business model and how the owner is performing. Evaluation of resales must be comprehensive, even granular to mitigate risk. Although franchise systems are the same, owners are not, which leads to a great degree of variability in financial and operational performance.

A holistic approach is best in assessing the overall health of the business. Many buyers think they just need to evaluate financials. Not so! If you’re not prepared to ask the how and why behind the numbers, you may miss a whole lot more.

Following are the 3 most important categories and items that are fundamental in disclosure.

Financial
Standard disclosure is the past three years’ tax returns and corresponding profit-and-loss statements (P&Ls) and balance sheets. Also request current YTD (Year-to-Date) information. Tax returns tend to be of most value because they are holistic. Make sure the financials are verifiable or reviewed by a CPA as they are not audited. In some cases, a cash-flow analysis may be available. If not, view bank statements to verify money in and money out.

  • If the business carries accounts receivable (AR), you’ll need an AR aging report to see money that’s due, collection trends, and the largest outstanding AR sources considered an asset in the purchase that may not attach to the sale.
  • A current asset list should be documented in the tax returns if they are still being depreciated. These items may be cars, equipment, computers, furniture, etc. Get an updated list from the seller, and an inspection should occur later in the process.
  • Other supporting information will be required for owner salaries or distributions; adjustments to earnings before interest, tax, depreciation and amortization (EBITDA), and any irregular items that don’t really attach to running the business. These should be discussed with the seller as they were discretionary, not necessary (examples: extravagant staff party or personal expenditures). These numbers will help you validate the Seller Discretionary Earnings (SDE), which is significant because some sellers set their asking price based on a multiple of the SDE.

Operational
Leases, organizational charts, contracts, price lists, payroll, staff records, third-party companies utilized, and a review of SOP are just a few on my checklist. The more complex the business model, the more items you can expect to dig into.

Compliance/Legal
You’ll need to verify the business license(s), insurance policies, lawsuits/claims, liens, and other licensures (if required). Even if not planning a stock sale, any litigation is important as it can speak to the reputation of the brand name or future financial vulnerabilities. Businesses related to health and the trades tend to have more regulations. Make sure you check federal, state, and local requirements to operate this business. Verify that the existing business has been complying and is in good standing through past surveys or copies of licenses.

Opportunity Value

This is more about you than the seller. It’s how you can improve the top and bottom lines. Financials are a great indication of how the current owner is operating but not how you will run business. For example, if the seller has been in business for two to four years and revenue is declining rather than growing—why? This is a prime time for a great growth trajectory. For an owner after 10-plus years, declining sales may indicate burnout, not utilizing new or updated franchise processes, or in some cases, the competitive landscape changed and the owner did not adapt. Good data does not lie, and intangibles are harder to value but just as valuable!

Don’t be afraid if your due diligence doesn’t reveal great results. They may serve you well as leverage in negotiating. The nightmare would be not knowing the real deal and entering blindly into a sale.

 

Diana Capirano, CFC, has an expansive career which includes corporate and franchise sales and development, marketing and operations, merger and acquisitions, structuring and negotiations as well as business ownership. As a highly-respected consultant and mentor, Diana espouses a profound commitment to help prospective business owners and investors understand and navigate the process of deciding on a franchise business. Contact Diana at 941-999-0095, email diana@focusfranchise.com, or visit http://www.focusfranchise.com.

2 05, 2019

Building Relationships

2019-05-03T15:28:02-04:00May 2nd, 2019|Tags: , , , , , |

Building Relationships

Marketing your business at a local level

by Jessica Melendez
Certified Franchise Consultant

Relationships are the heart and soul of a business and crucial to its survival. In your community, you’ll have business relationships with customers, referral partners, employees, vendors, networking communities, financial institutions, cleaning crews, and more. The list can go on and on based on who comes in contact with your business in any way. These are two-way relationships with each party desiring to help each other achieve the highest level of success. No matter how big or small their role is, all of these relationships take part in building your empire, and these relationships need to be fed.

quote

As an example, let’s examine how Dryer Vent Squad franchisees use relationship-building in their local marketing.

First it’s worth noting that I own Dryer Vent Squad along with entrepreneur Leo Goldberger. Our partnership began with a relationship we formed while working together in the franchise industry.

A pro at social media, Goldberger uses it to strengthen the Dryer Vent Squad brand. Social media is a great way to tell a brand’s story, form bonds, loyalty, and a network within your community. Followers tend to feel connected with you, and gain an inside look into your business. Our franchisees use social media to advertise, run promotions and post pictures of jobs, their crew and community events they attend.

BUILDING PARTNERSHIPS
A big part of our business-to-business (B2B) success has been in building relationships with referral partners such as hotel associations, apartment associations, property managers, appliance repair companies, and dryer retailers. All of these partners can refer business our way and, in turn, we can refer business to them or sponsor their events. These types of relationships are not one-sided—there’s give-and take and we work together to support each other.

EDUCATING THE COMMUNITY
Dryer Vent Squad franchisees partner with local fire departments to raise awareness about fire safety. Dryer fires are the leading cause of household fires and education on the dangers of clogged dryer vents is vital for saving lives and property. In this case, the relationship works because both parties have a vested interest in the safety of the community and its residents.

Relationships empower you to aggressively try new things that will help you and your business evolve and learn continuously. Take care of them and keep your eye out for opportunities to build new ones.

Jessica Melendez

A trainer and mentor for FranServe, Inc., the world’s largest franchise consulting firm, and the CEO of WestStar Franchise Group, Jessica Melendez coaches and educates prospective franchise owners and helps them find businesses that align with their personal and professional ambitions. As a franchisor and president of Dryer Vent Squad, Melendez has first-hand experience in all aspects of franchising, which makes her an excellent resource for prospective franchisees. Contact Melendez at 915-202-8272, email Jessica@weststarfranchisegroup.com, or visit https://www.weststarfranchisegroup.com.

2 05, 2019

It’s a Process

2019-05-03T15:35:08-04:00May 2nd, 2019|Tags: , , , |

It’s a Process

Franchising is about following a winning formula

by Don Clayton
Certified Franchise Consultant

I recently had a conversation with a young woman interested in owning a franchise. She was excited, friendly, joyful, and asked great questions. But once I began explaining the next steps in franchising, the conversation took a turn.

She quickly informed me that she didn’t operate that way and we’d do things her way. To her, the process is just like buying a car. The salesman needs to bow to her requests. That makes sense, right? It does when you’re buying a car, but not when you’re investing in a franchise.

After I explained that there are standard operating procedures to follow, she responded by standing her ground. Needless to say, she’s now looking for her next W-2 job.

A business in a box
Investors do not buy a franchise the same way they purchase a car or any other product. Franchises are awarded, not sold. The woman in my example is a nonconforming individual, and this type of person goes against everything in franchising. A franchise is a business in a box. For the most part, all of the kinks, errors, trials, and models have been hashed out and neatly packaged together. If someone wants to reinvent years of trial and error, that person should do so, but not through the franchise system.

The people best-suited to own franchises are open-minded life learners who are adaptable and follow instructions. Highly successful franchisees let the system work while incorporating their unique personalities into the business to make it their own.

The benefits of franchising
Franchisees enjoy the rewards of countless hours (sometimes years) of blood, sweat, tears, trial, error, money, and other sacrifices that someone else endured in order to make this opportunity available. Investing in a franchise allows one to jump right in, learn, follow protocol, make money, and have fun.

Don ClaytonDon Clayton has spent more than 15 years helping others achieve their dream of business ownership. Starting as a franchise consultant for FranServe in 2001, he quickly became a top producer. His passion for the business led Don to the position of VP of Talent Acquisition, where he is committed to recruiting successful candidates. Contact Don at don@franserve.com or 919-777-0178.

2 05, 2019

What to look for in a food franchise

2019-05-03T15:40:38-04:00May 2nd, 2019|Tags: , , , , , |

What to look for in a food franchise

by Geoff Batchelder
Certified Franchise Consultant

The food sector makes up about a third of all franchises – A HUGE percentage for a single sector! So it’s no wonder that when many people think of franchising, they think of food. In fact, my own introduction to the franchise world came about as I was looking at pizza franchises.

Like most people, I had no idea that franchises were available in so many other business sectors. The idea of owning a
restaurant sounds glamorous, maybe because of the TV image of the restaurant owner greeting dignitaries as they enter the
establishment and then sharing an after-dinner drink with them while receiving lavish praise. That sounds great but is pretty far from reality. The food industry has lower margins than most industries, depends on tight management of food spoilage and inventory loss, relies heavily on minimum-wage employees, requires more in terms of capital investment, and is just plain hard work.

So why would anyone want to enter this business? Simple: Every person on the planet needs to eat multiple times a
day. That is one seriously large potential customer base. If you’ve considered the downsides and still want to own a restaurant, here are some things to look for when evaluating franchises.

THE FOOD
Do you like the food? Would you be excited about serving it?

THE BRAND
Is the branding professional? Are there multiple marketing and advertising strategies in place?

THE SOURCE
Where are the food products sourced? Is there a commissary model where you buy from the franchisor? Do they use one of the large distribution  companies? Can you source any products locally?

PROCESSES
Does the franchisor have well-developed processes? The operations manual should cover everything you need to know from the time you unlock the door in the morning until you turn off the lights at night. There should be a detailed food preparation manual and also a food handling/safety manual.

SITE LOCATION
How are potential sites identified? Has the franchisor developed demographic models to understand where their customers are? Do they assist you with finding and evaluating potential sites? Do they help with lease negotiation?

CONSTRUCTION
What about construction? There should be a detailed construction manual and maybe even contractors in place that have previously done store build-outs for other franchisees. You can waste a lot of time and money if you’re left on your own to secure a site and get the store built.

TRAINING
What training and ongoing support are available? The food sector typically requires longer training and more support than other franchise sectors. Will you receive on-site training and support? Will you get assistance in hiring your staff? What are the plans to deal with changing trends and customer tastes? This is a sector that will also see more changes in terms of what customers want.

GeoffBatchelderGeoff Batchelder has been a franchise consultant and franchise development expert for the last 10 years after spending 25 years focusing on business development in the high-tech industry. Contact him at 1-877-222-3722 or geoff@compassfranchisegroup.com, or visit www.compassfranchisegroup.com.

1 05, 2019

May 2019: Franchisee of the Month

2019-05-02T16:50:21-04:00May 1st, 2019|Tags: , , , , , |

Helping yourself by helping others

by Jill Abrahamsen

After 18 years on the road in sales and business development, George Sanchez was ready to spend more time with his family and enjoy a more meaningful career. So Sanchez sold his business and invested in an existing BrightStar Care® franchise, which provides in-home health care in Austin, Texas. “I looked at hundreds of options in all different areas, but BrightStar Care made the most sense,” he says. “There is a never-ending demand for this service, and you can truly make a difference.”

After caring for elderly parents, Sanchez had firsthand knowledge of what quality care looks like. “I understand the value of the service we provide. I know what it means when a caregiver doesn’t show up or isn’t a good fit. We strive to give our customers the very best service. I’ll only hire people whom I would send to care for my own family.”

With more than 200 employees, Sanchez has tripled the business since he bought it in 2013. “The first few years weren’t easy. I had to invest to grow, but it was well worth it. We have a great team and a thriving business now.”

The best part for Sanchez is giving back, both directly and indirectly. Besides the gratification of helping clients every day, he and his staff are very involved in the community and raise money for charitable organizations.

Sanchez loves getting to know his patients and their families. He recently paid tribute to client Dr. John McKetta, a chemical engineering legend and professor at the University of Texas. Drawing on his artistic talents, Sanchez sculpted and presented a bronze bust to McKetta on his 103rd birthday, just a few months before his death. “It was a great way to pay tribute to a man who has given so much to the world,” he says.

BrightStar Care Austin received the Best of the Best Home Healthcare Award from Austin’s American-Statesman e-paper.
The Austin BrightStar Care gang has fun raising money for local charities.

Sanchez’s passion has been a driving force in the success of his business. In 2018 his location was honored with the Best of the Best Home Healthcare Award by Austin’s American-Statesman electronic newspaper. “Owning this business has been great on so many levels,” he says.

For more information, call (877) 689-6898 or visit www.franchise.brightstarcare.com.

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Helping yourself by helping others

by Jill Abrahamsen

After 18 years on the road in sales and business development, George Sanchez was ready to spend more time with his family and enjoy a more meaningful career. So Sanchez sold his business and invested in an existing BrightStar Care® franchise, which provides in-home health care in Austin, Texas. “I looked at hundreds of options in all different areas, but BrightStar Care made the most sense,” he says. “There is a never-ending demand for this service, and you can truly make a difference.”

After caring for elderly parents, Sanchez had firsthand knowledge of what quality care looks like. “I understand the value of the service we provide. I know what it means when a caregiver doesn’t show up or isn’t a good fit. We strive to give our customers the very best service. I’ll only hire people whom I would send to care for my own family.”

With more than 200 employees, Sanchez has tripled the business since he bought it in 2013. “The first few years weren’t easy. I had to invest to grow, but it was well worth it. We have a great team and a thriving business now.”

The best part for Sanchez is giving back, both directly and indirectly. Besides the gratification of helping clients every day, he and his staff are very involved in the community and raise money for charitable organizations.

Sanchez loves getting to know his patients and their families. He recently paid tribute to client Dr. John McKetta, a chemical engineering legend and professor at the University of Texas. Drawing on his artistic talents, Sanchez sculpted and presented a bronze bust to McKetta on his 103rd birthday, just a few months before his death. “It was a great way to pay tribute to a man who has given so much to the world,” he says.

BrightStar Care Austin received the Best of the Best Home Healthcare Award from Austin’s American-Statesman e-paper.
The Austin BrightStar Care gang has fun raising money for local charities.

Sanchez’s passion has been a driving force in the success of his business. In 2018 his location was honored with the Best of the Best Home Healthcare Award by Austin’s American-Statesman electronic newspaper. “Owning this business has been great on so many levels,” he says.

For more information, call (877) 689-6898 or visit www.franchise.brightstarcare.com.

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1 05, 2019

May 2019: Featured Entrepreneur

2019-05-02T16:59:53-04:00May 1st, 2019|Tags: , , , , |

When the goal is fun, everyone wins

by Jill Abrahamsen

Yassen Nikolov loves his work. As General Manager of Funtopia, North America, he feels good about helping children lead active and healthy lives. An active entertainment center, Funtopia gets kids moving and off their devices. “There’s nothing better than seeing happy kids running around and having fun,” Nikolov says.

In his home country of Bulgaria, rock climbing is a huge sport. In fact, Nikolov started his journey into the business as part of The Walltopia Group, the largest producer of climbing walls in the world. The company offers wildly creative, custom-made rock walls that run the gamut from traditional rope and bouldering walls to military walls and speed walls. The company also produces themed, kid-centric “fun walls,” which were the inspiration for Funtopia.

Making fun a priority
Nikolov and his partners recognized the need for an active entertainment center where kids could get exercise in a fun and safe way. Funtopia was launched in Bulgaria in 2012 and Nikolov became General Manager of North America in 2015. Using the climbing walls as a foundation, they included several mini-concepts to the mix, including rope courses, zip lines, ninja courses, artificial caving, and trampoline fields. “Offering variety keeps it interesting,” Nikolov says. Visitors experience imaginative scenarios such as riding dinosaurs, jumping off skyscrapers, or climbing beanstalks. “At Funtopia, kids get to use their muscles and their imaginations,” he adds.

Funtopia’s dedication to healthy lifestyles doesn’t stop at rope courses. For example, there’s no junk food at the snack bar. “We offer only healthy options like baked chicken, fruit smoothies, and juices made without sugar,” Nikolov says.

Funtopia
Funtopia
Funtopia
Funtopia active entertainment center gets kids moving and off their devices. Instead of just focusing on one activity, the company offers several mini-concepts, including rockwall climbing, rope courses, zip lines, ninja courses, artificial caving, and trampoline fields.

Funtopia franchises are spreading around the globe, including locations in Australia, Israel, and Pakistan. Since 2016, franchise opportunities have been offered in the U.S. and Canada. Franchisees enjoy a feel-good business in a growing market, ongoing support, and training. “This is a great opportunity for an investor, but it has to be the right fit,” says Nikolov. “We like to see some passion for the business. Most importantly, we want franchisees who follow the system and like our culture.”

For more information, visit www.funtopiaworld.com.

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When the goal is fun, everyone wins

by Jill Abrahamsen

Yassen Nikolov loves his work. As General Manager of Funtopia, North America, he feels good about helping children lead active and healthy lives. An active entertainment center, Funtopia gets kids moving and off their devices. “There’s nothing better than seeing happy kids running around and having fun,” Nikolov says.

In his home country of Bulgaria, rock climbing is a huge sport. In fact, Nikolov started his journey into the business as part of The Walltopia Group, the largest producer of climbing walls in the world. The company offers wildly creative, custom-made rock walls that run the gamut from traditional rope and bouldering walls to military walls and speed walls. The company also produces themed, kid-centric “fun walls,” which were the inspiration for Funtopia.

Making fun a priority
Nikolov and his partners recognized the need for an active entertainment center where kids could get exercise in a fun and safe way. Funtopia was launched in Bulgaria in 2012 and Nikolov became General Manager of North America in 2015. Using the climbing walls as a foundation, they included several mini-concepts to the mix, including rope courses, zip lines, ninja courses, artificial caving, and trampoline fields. “Offering variety keeps it interesting,” Nikolov says. Visitors experience imaginative scenarios such as riding dinosaurs, jumping off skyscrapers, or climbing beanstalks. “At Funtopia, kids get to use their muscles and their imaginations,” he adds.

Funtopia’s dedication to healthy lifestyles doesn’t stop at rope courses. For example, there’s no junk food at the snack bar. “We offer only healthy options like baked chicken, fruit smoothies, and juices made without sugar,” Nikolov says.

Funtopia
Funtopia
Funtopia
Funtopia active entertainment center gets kids moving and off their devices. Instead of just focusing on one activity, the company offers several mini-concepts, including rockwall climbing, rope courses, zip lines, ninja courses, artificial caving, and trampoline fields.

Funtopia franchises are spreading around the globe, including locations in Australia, Israel, and Pakistan. Since 2016, franchise opportunities have been offered in the U.S. and Canada. Franchisees enjoy a feel-good business in a growing market, ongoing support, and training. “This is a great opportunity for an investor, but it has to be the right fit,” says Nikolov. “We like to see some passion for the business. Most importantly, we want franchisees who follow the system and like our culture.”

For more information, visit www.funtopiaworld.com.

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30 04, 2019

May 2019: Food Franchises

2019-05-02T17:06:31-04:00April 30th, 2019|Tags: , , , , , |

ON THE COVER

Game Plan

Lessons learned on the field help Super Bowl champ Gary Brackett lead his winning franchise

by Jill Abrahamsen

Stacked Pickle CEO Gary Brackett attributes his success as a franchisor to his time playing football. As a Super Bowl-winning linebacker for the Indiana Colts, Brackett used the same skills on the field that he needs today to run his successful business: leadership, hard work, and discipline, just to name a few. “As a team captain, I was chief defensive operator. Now I am chief executive officer,” says Brackett. “There are a lot of similarities. I run my business like I ran the defense. It’s all about teamwork.”

Knowing that professional football players have short careers, he always had a “plan B” and thought about his retirement early. “The idea of owning a sports bar always appealed to me,” Brackett says. While exploring his options, he came across the Stacked Pickle, a small sports bar chain in his area.

Brackett loved the community feel and vibe of the restaurant, and he invested as a silent partner while going back to school to earn his MBA. Brackett’s coursework inspired him to look into scaling the business. Eventually he took over the entire operation and prepared the Stacked Pickle for franchising.

“We got our processes and procedures down to a science before offering franchise opportunities in 2016,” Brackett says. “We made it as polished and brand-focused as possible.”

Stacked Pickle
Restaurant Interior
Restaurant Interior
Beer taps
Bar food

With a fun, family-friendly, casual feel, The Stacked Pickle is all about local sports, and the décor includes photos of high school teams and memorabilia from local professional sports teams. “It’s a great place to watch your favorite team or come after a local high school game,” Brackett says. “Our goal is to build a sense of community.”

Menu items include signature “stacked” burgers and wings, fun appetizers like nachos and pizza-stuffed breadsticks, plus healthier options like salads and wraps. “We have something for everyone,” Brackett says.

In designing the franchise, Brackett kept costs down for investors. “Instead of expensive build-outs, we give franchisees the option to retrofit existing locations,” he says.

Quote

He’s thrilled with the growth of the brand and looks to partner with investors who share his enthusiasm and work ethic. “While this is a simple business to run, it’s not always easy. We work together to make things run as efficiently as possible and deliver an exceptional customer experience. It’s the ultimate team sport,” he says.

For more information, call 317-677-6904 or visit www.buildthepickle.com.

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ON THE COVER

Game Plan

Lessons learned on the field help Super Bowl champ Gary Brackett lead his winning franchise

by Jill Abrahamsen

Stacked Pickle CEO Gary Brackett attributes his success as a franchisor to his time playing football. As a Super Bowl-winning linebacker for the Indiana Colts, Brackett used the same skills on the field that he needs today to run his successful business: leadership, hard work, and discipline, just to name a few. “As a team captain, I was chief defensive operator. Now I am chief executive officer,” says Brackett. “There are a lot of similarities. I run my business like I ran the defense. It’s all about teamwork.”

Knowing that professional football players have short careers, he always had a “plan B” and thought about his retirement early. “The idea of owning a sports bar always appealed to me,” Brackett says. While exploring his options, he came across the Stacked Pickle, a small sports bar chain in his area.

Brackett loved the community feel and vibe of the restaurant, and he invested as a silent partner while going back to school to earn his MBA. Brackett’s coursework inspired him to look into scaling the business. Eventually he took over the entire operation and prepared the Stacked Pickle for franchising.

“We got our processes and procedures down to a science before offering franchise opportunities in 2016,” Brackett says. “We made it as polished and brand-focused as possible.”

Stacked Pickle
Restaurant Interior
Restaurant Interior
Beer taps
Bar food

With a fun, family-friendly, casual feel, The Stacked Pickle is all about local sports, and the décor includes
photos of high school teams and memorabilia from local professional sports teams. “It’s a great place to watch your favorite team or come after a local high school game,” Brackett says. “Our goal is to build a sense of community.”

Menu items include signature “stacked” burgers and wings, fun appetizers like nachos and pizza-stuffed breadsticks, plus healthier options like salads and wraps. “We have something for everyone,” Brackett says.

In designing the franchise, Brackett kept costs down for investors. “Instead of expensive build-outs, we give franchisees the option to retrofit existing locations,” he says.

Quote

He’s thrilled with the growth of the brand and looks to partner with investors who share his enthusiasm and work ethic. “While this is a simple business to run, it’s not always easy. We work together to make things run as efficiently as possible and deliver an exceptional customer experience. It’s the ultimate team sport,” he says.

For more information, call 317-677-6904 or visit www.buildthepickle.com.

Share this story

3 04, 2019

Special Legal Considerations for Home Services Franchisees

2019-04-03T15:39:03-04:00April 3rd, 2019|Tags: , , , , , |

Special Legal Considerations for Home Services Franchisees

By Jonathan Barber

If you plan to operate a home-services franchise, you’ve got some “legal-ish” things to look into. Cleaning, decorating, landscaping, moving and storing, renovating, repairing, and restoration franchisees work in and on customers’ homes, which probably means that specific insurance policies and state licenses will be necessary.

Getting these requirements squared away—as well as hiring trustworthy employees—can take a lot of time and money, which could affect your choice of franchise. Following are some areas you should examine in detail from the very beginning of your decision-making process.

Licensing Requirements

Does your state require a license to perform the tasks involved with a particular franchise? For example, state laws for general contractors vary widely. In some states, anyone who performs work costing a certain amount or more is considered a general contractor and must be licensed to perform that work. If you aren’t licensed, you could face serious consequences, including fines.

The first step in navigating this issue is to ask the franchisor what licensing is required for this particular business. The second step is to look into your state’s licensing requirements. If reading statutes isn’t your thing, find a local attorney who can give you some guidance on whether you need to be licensed. If licensing is required, you should factor the cost of acquiring it and the time involved into your franchise decision. You won’t be making money while you’re waiting on a license.

Insurance Requirements

States also may require certain types and amounts of insurance. Your franchise disclosure document should outline the franchisor’s insurance requirements. The franchise agreement should explain the insurance requirements in further detail.

You should speak with an independent insurance broker in your state to find out whether your state requires additional insurance — beyond what the franchisor specifies—for the type of business you’ll operate.

Employment Contracts

Today, most franchisors will not provide you with sample employment contracts because they try to avoid what’s called “joint-employer liability.” In other words, they don’t want to be considered an employer of your employees so they stay out of your hiring process as much as possible.

Make sure that your employment contracts are buttoned up because liability increases when your employees work at your customers’ homes. It’s best to follow the advice of a local attorney in getting your employment contracts in place.

You also should perform background checks on every employee. Obtain the employee’s written consent before performing a background check. Your customers and their property should be your No. 1 priority. One bad experience could really hurt your home-services franchise.

Choosing Your Franchise

The home-services market may seem to be so loaded with franchises that it’s difficult to select one. But great brands distinguish themselves from the competition by doing just one thing and doing it very well. So I suggest you consider a franchise that operates in a niche area with strong brand recognition and solid systems that are efficient and support you in every way. I’ve always said it’s better to be a Jack-of-one trade and master of it than to be a Jack-of-all-trades and master of none. (That’s why our firm handles only franchise law—no family law, real estate, estate planning, or criminal defense.) Doing one thing, and doing it well, is a terrific formula for success.

Jonathan BarberJonathan Barber exclusively practices franchise law as a partner at Barber Power Law Group, in Charlotte, North Carolina. He has assisted hundreds of clients world-wide with their FDDs and franchise purchases. Barber also represents emerging and established franchisors. Contact Barber at 980-202-5679 or jonathan@franchise.law

3 04, 2019

Consider financing via your 401(k) even if your CPA advises against it

2019-04-03T15:37:10-04:00April 3rd, 2019|Tags: , , , , |

Consider financing via your 401(k) even if your CPA advises against it

by Tim Seiber, CFE

Most CPAs will discourage you from tapping your 401(k) to start or grow your franchise business. They usually give this advice because they’re either unfamiliar with the Rollover as Business Start-Ups (ROBS) program or are uncomfortable with the tax structure of a C corporation.

Generally, the benefits that franchisees receive from utilizing the ROBS program far outweigh any concerns. Since the IRS created ROBS through the ERISA Act of 1974, the program has been a great way for thousands of entrepreneurs to open their businesses debt free. So before you let your CPA persuade you that it’s a poor option, you should understand the specifics behind their negative view.

Defining a C corporation
Under the federal tax code, business entities are categorized as either pass-through or non-pass-through business entities, with the main difference being that pass-through entities are not required to pay corporate taxes. These include sole proprietorships, partnerships, and S
corporations.

C corporations are non-pass-through entities that are completely separate taxpayers from their owners and are subject to corporate taxes. This is often where pushback from a franchisee’s CPA comes in. Because income earned by the C corporation is taxed at the corporate level and any distributions made to stockholders (i.e., wages) are taxed at the stockholder’s individual tax bracket, the potential for double taxation scares off tax advisers who are unfamiliar with the other benefits of the ROBS program.

But this should not be the only consideration when looking at ROBS as a funding option, because while double taxation might occur, the
C corporation structure offers advantages for small business owners versus pass-through entities.

Advantages of a C corporation
Although pass-through businesses are not subject to federal corporate income taxes, they can still face a substantial tax burden from federal, state, and local taxes.

Last year’s new tax reform significantly reduced the tax disadvantage of utilizing a C corporation structure. The corporate tax rate decreased to 21 percent, which is lower than the tax rate for pass-through income, and because most individual tax brackets also decreased, distributions are taxed at a lower rate as well.

Operators of C corporations may also withdraw salaries from the corporation profits, which aren’t taxed at the corporate level. If the company pays its employees enough to offset the entire net profit, then no corporate income tax is due, eliminating the double taxation
potential.

The benefits of a C corporation extend much further than a lower tax rate, however. Other advantages include:

  • The opportunity to shift income and retain earnings within the company for future growth.
  • No requirement to make the fiscal year coincide with the calendar year.
  • The ability to deduct 100 percent of medical premiums.
  • Eligibility to deduct charitable contributions as a business expense.

And the most significant advantage of all? A C corporation is the only business entity that supports ROBS, which is often the only viable funding solution for many start-up businesses.

Tim SeiberWant to learn more about financing options for your franchise? FranFund designs smart all-in-one funding plans that grow with your franchise and set you up for long-term success. We are here to help if you are considering leaving your current job to start a new venture or if you are looking to expand your existing operation. Get started today at bit.ly/franfund-fd or email Tim at taseiber@franfund.com.