Audra

About Audra

This author has not yet filled in any details.
So far Audra has created 28 blog entries.
21 08, 2018

Exploring Franchise Opportunities

By |2018-08-21T14:21:01+00:00August 21st, 2018|Categories: Franchising 101|Comments Off on Exploring Franchise Opportunities

Business meeting

Exploring Franchise Opportunities:

Get the Answers YOU Need!

By Paul Segreto

Potential franchise buyers know before making a final decision, they need to obtain information from other franchisees and also, their possible franchisors. But what information do they need to get?

Generally, I recommend using the Franchise Disclosure Document (FDD) as a guide. Read through it and ask a potential franchisor very specific questions about each item listed. It’s a can’t-miss road map. Here’s a start.

What is the history of the franchise concept?
What is the founder’s vision? Who is on the executive and support teams? What experience do they bring to the table? If a franchisor hasn’t worked at a location, how has he learned about daily operations? Has he owned a business before? It’s important to understand how these individuals relate to franchisees.

How high could expenses go?
All expenses should be clearly defined. It’s imperative to gain a complete understanding of the range of expenses—and why they are what they are. Inquire about assistance for everything from advertising to site selection to your grand opening.
What is the temperament of the franchise group nationally and within your market? Of course, I recommend speaking with franchisees, too. Make sure to ask them about costs, problems, profits, and trends. Discuss competition with both the franchisor and franchisees.

Ask about exit strategies.
At some point, you may want to exit the system or you may have to exit. If you have to exit, is there support if you’re in trouble? Ask about transfer fees and the process of selling your business. Understand the franchisor’s approval process. What happened to each franchisee listed under terminated or closed franchises on the FDD? What happened to their locations? Have they continued operation under a new franchisee or corporate? Is the location still available?

Ask yourself if you would consider a long-term relationship with this brand and its leadership.

After this process is complete and you’ve reviewed your notes, trust your gut instinct! Take your time and think things through until you’re 100 percent sure of your decision. Make sure you have all your support mechanisms in place, including friends and family. Do not kid yourself. Do not lie to yourself. And, do not justify any negatives. Being honest with yourself will help you make the right decision.

Paul Segreto is a recognized entrepreneur, franchise and small business professional. His expertise includes startups and turnarounds, strategic planning, business and franchise development, branding, social media and digital marketing with primary focus on restaurants and service-driven businesses.

Segreto founded Franchise Today podcast in 2009 and Franchising & You podcast in 2018. He is CEO of the Franchise Foundry. Contact Segreto at paul@franchisefoundry.com.

Business meeting

Exploring Franchise Opportunities:

Get the Answers YOU Need!

By Paul Segreto

Potential franchise buyers know before making a final decision, they need to obtain information from other franchisees and also, their possible franchisors. But what information do they need to get?

Generally, I recommend using the Franchise Disclosure Document (FDD) as a guide. Read through it and ask a potential franchisor very specific questions about each item listed. It’s a can’t-miss road map. Here’s a start.

What is the history of the franchise concept?
What is the founder’s vision? Who is on the executive and support teams? What experience do they bring to the table? If a franchisor hasn’t worked at a location, how has he learned about daily operations? Has he owned a business before? It’s important to understand how these individuals relate to franchisees.

How high could expenses go?
All expenses should be clearly defined. It’s imperative to gain a complete understanding of the range of expenses—and why they are what they are. Inquire about assistance for everything from advertising to site selection to your grand opening.
What is the temperament of the franchise group nationally and within your market? Of course, I recommend speaking with franchisees, too. Make sure to ask them about costs, problems, profits, and trends. Discuss competition with both the franchisor and franchisees.

Ask about exit strategies.
At some point, you may want to exit the system or you may have to exit. If you have to exit, is there support if you’re in trouble? Ask about transfer fees and the process of selling your business. Understand the franchisor’s approval process. What happened to each franchisee listed under terminated or closed franchises on the FDD? What happened to their locations? Have they continued operation under a new franchisee or corporate? Is the location still available?

Ask yourself if you would consider a long-term relationship with this brand and its leadership.

After this process is complete and you’ve reviewed your notes, trust your gut instinct! Take your time and think things through until you’re 100 percent sure of your decision. Make sure you have all your support mechanisms in place, including friends and family. Do not kid yourself. Do not lie to yourself. And, do not justify any negatives. Being honest with yourself will help you make the right decision.

Paul Segreto is a recognized entrepreneur, franchise and small business professional. His expertise includes startups and turnarounds, strategic planning, business and franchise development, branding, social media and digital marketing with primary focus on restaurants and service-driven businesses.

Segreto founded Franchise Today podcast in 2009 and Franchising & You podcast in 2018. He is CEO of the Franchise Foundry. Contact Segreto at paul@franchisefoundry.com.

31 07, 2018

Words
to Know

By |2018-08-21T13:56:24+00:00July 31st, 2018|Categories: Franchising 101|Comments Off on Words
to Know

Reading Dictionary

Words to Know

Important terms that potential franchisees should know.

By Susan Scotts

Absentee ownership: The potential to manage and own a franchise without active involvement in the day-to-day operations. The franchisee will purchase the franchise unit but will hire someone else to manage and run the unit.

Owner-operator: The franchisee will run the franchise unit him or herself and be hands-on during day-to-day tasks.

Advertising fee: The amount that is paid, annually or monthly, by the franchisee to the franchisor to cover some of the costs relating to advertising. These are sometimes calculated as a percentage of gross sales.

Discovery day: The opportunity to visit a franchise’s corporate headquarters in order to meet the management and support team and learn more about the franchise. Not all franchisors require them or offer them.

Franchise Disclosure Document (FDD): The Federal Trade Commission mandates that franchisors provide detailed of information about the franchisor. This information, which includes the buy-in costs and initial start-up expenses, is packaged in a 150-page document known as the Franchise Disclosure Document. It is commonly referred to as the FDD.

Franchise: The authorization of a right or brand name to a person to sell or distribute the company’s goods or services. Franchisee: The person or entity that purchases and is granted a franchise.

Franchise agreement: The actual contract which includes the responsibilities of the franchisor and franchisee. This document is signed by both parties.

Franchise fee: The initial up-front fee a franchisee pays for the right to purchase a franchise and use the trademark and business system. This is typically paid at the signing of the franchise agreement.

Franchisor: The franchise company and owner of a franchise system’s trademark brand that provides usage rights to a franchisee.

Federal Trade Commission (FTC): A federal agency assigned to regulate franchises. This agency protects America’s consumers and assists in protecting them against false, deceptive, or unfair trade or advertising practices.

International Franchise Association (IFA): Founded in 1960, this membership organization includes franchisors, franchisees, and suppliers.

Initial investment/start-up costs: The initial investment that the franchisee makes in becoming a franchisee during the start-up period. These costs can include the franchisee fee, lease improvements, asset costs, inventory, deposits, working capital, and other costs required to establish the business.

Net worth: Total assets minus total liabilities of an individual. A franchisor may require a minimum net worth prior to approval as a franchisee.

Receipt acknowledgement: In franchising, the receipt to be signed by potential franchisee as proof of the date of receiving of the FDD.

Renewal: Franchise agreement lengths vary and expire after anywhere from five to 20 years. After the initial agreement, the contract may be renewed but not always under the same original conditions. A renewal fee may be less than the original franchise fee.

Royalty fee: The share or percentage of gross sales paid by the franchisee to the franchisor on a recurring basis from the franchisee’s generated sales.

Small Business Administration (SBA): The SBA connects entrepreneurs with lenders and funding to help them plan, start, and grow their businesses.

With three decades of experience, Susan Scotts, of The Entrepreneur’s Source®, can help you determine if a franchise may be the best way to achieve your personal income, lifestyle, wealth, and equity goals. For more information, call 561-859-9110 or visit www.SScotts.EsourceCoach.com.

Reading Dictionary

Words to Know

Important terms that potential franchisees should know.

By Susan Scotts

Absentee ownership: The potential to manage and own a franchise without active involvement in the day-to-day operations. The franchisee will purchase the franchise unit but will hire someone else to manage and run the unit.

Owner-operator: The franchisee will run the franchise unit him or herself and be hands-on during day-to-day tasks.

Advertising fee: The amount that is paid, annually or monthly, by the franchisee to the franchisor to cover some of the costs relating to advertising. These are sometimes calculated as a percentage of gross sales.

Discovery day: The opportunity to visit a franchise’s corporate headquarters in order to meet the management and support team and learn more about the franchise. Not all franchisors require them or offer them.

Franchise Disclosure Document (FDD): The Federal Trade Commission mandates that franchisors provide detailed of information about the franchisor. This information, which includes the buy-in costs and initial start-up expenses, is packaged in a 150-page document known as the Franchise Disclosure Document. It is commonly referred to as the FDD.

Franchise: The authorization of a right or brand name to a person to sell or distribute the company’s goods or services. Franchisee: The person or entity that purchases and is granted a franchise.

Franchise agreement: The actual contract which includes the responsibilities of the franchisor and franchisee. This document is signed by both parties.

Franchise fee: The initial up-front fee a franchisee pays for the right to purchase a franchise and use the trademark and business system. This is typically paid at the signing of the franchise agreement.

Franchisor: The franchise company and owner of a franchise system’s trademark brand that provides usage rights to a franchisee.

Federal Trade Commission (FTC): A federal agency assigned to regulate franchises. This agency protects America’s consumers and assists in protecting them against false, deceptive, or unfair trade or advertising practices.

International Franchise Association (IFA): Founded in 1960, this membership organization includes franchisors, franchisees, and suppliers.

Initial investment/start-up costs: The initial investment that the franchisee makes in becoming a franchisee during the start-up period. These costs can include the franchisee fee, lease improvements, asset costs, inventory, deposits, working capital, and other costs required to establish the business.

Net worth: Total assets minus total liabilities of an individual. A franchisor may require a minimum net worth prior to approval as a franchisee.

Receipt acknowledgement: In franchising, the receipt to be signed by potential franchisee as proof of the date of receiving of the FDD.

Renewal: Franchise agreement lengths vary and expire after anywhere from five to 20 years. After the initial agreement, the contract may be renewed but not always under the same original conditions. A renewal fee may be less than the original franchise fee.

Royalty fee: The share or percentage of gross sales paid by the franchisee to the franchisor on a recurring basis from the franchisee’s generated sales.

Small Business Administration (SBA): The SBA connects entrepreneurs with lenders and funding to help them plan, start, and grow their businesses.

With three decades of experience, Susan Scotts, of The Entrepreneur’s Source®, can help you determine if a franchise may be the best way to achieve your personal income, lifestyle, wealth, and equity goals. For more information, call 561-859-9110 or visit www.SScotts.EsourceCoach.com.

31 07, 2018

Part 1: Breaking Down the FDD

By |2018-07-31T18:16:37+00:00July 31st, 2018|Categories: Legal|Comments Off on Part 1: Breaking Down the FDD

Man using calculator

SPECIAL SECTION: PART 1

Breaking Down the FDD

Item 7: Estimated Initial Investment.

You’ve heard it before: Be sure you understand your Franchise Disclosure Document (FDD) before you buy into a franchise. The advice makes sense—after all, the document is there to protect you by listing everything the Federal Trade Commission (FTC) believes you need to know about your franchisor. But given that it’s a 150-page legal document, many prospective franchisees aren’t always clear on the details.

It’s complicated, we get it. So, to help you understand the finer points of the FDD, we’ve enlisted Nicole Micklich, a franchise attorney. In the next six issues of Franchise Dictionary Magazine, she will highlight some common misunderstandings about the document and clarify them. Here, we launch with the topic that everyone needs to be clear on: Money.

Under the FTC Franchise Rule, in Item 7 of the Franchise Disclosure Document, the franchisor must provide an estimate of the likely initial investment costs a franchisee will incur. Don’t confuse Item 7 with Item 5. Item 5 only discloses the initial fees that must be paid to the franchisor or affiliate. Item 7 should be more detailed than Item 5.

Item 7 requires franchisors to use a table to set out a franchisee’s entire estimated initial investment. The table is supposed to disclose all the expenses required by the franchise agreement and all other costs necessary for a franchisee to pen for business, including those that are to be paid to third parties, like rent.

The Rule does not dictate a complete list of the types of fees or expenses that must be shown in the table. The Rule provides suggestions of the typical expenses franchisees will incur. Franchisors should also identify and itemize other specific required payments franchisees must make to start operating.

Item 7 covers the period that ends when the franchisee opens for business. It also requires franchisors to include in the table “Additional Funds” for the time during the “initial period” of operations. The “initial period” can vary depending on brand, and franchisors must disclose the specific initial period used in the FDD.

For each item listed in the Item 7 table, the franchisor must disclose:

  • The amount of the payment
  • The method of payment
  • When the payment is due
  • To whom the payment is to be made

Some of the costs set out in the Item 7 table may be difficult for the franchisor to estimate and the franchisor may use ranges or variables. Franchisors use footnotes to provide more information about the Item 7 expenditures. If the franchisor offers different types of outlets, like restaurants that offer both stand-alone units and units in convenience stores, the franchisor might use more than one table.

As you consider the purchase of your franchise, you and your advisors should carefully and cautiously use Item 7 and other information provided by the franchisor to prepare a financial model for your start-up costs.

The Cost of Franchising

There are numerous costs associated with starting your franchised business, including:

  • The initial franchise fee
  • Training
  • Travel and living, to re-locate or for training, until business becomes profitable
  • Organizing and registering a business entity
  • Banking
  • Obtaining business licenses and permits
  • Negotiating a lease or purchase of real property (franchisor may require a real estate consultant)
  • Security deposits, utility deposits
  • Rent or mortgage payments
  • Insurance, including renter’s, auto, workers’ compensation, commercial general liability, officers and directors
  • Remodeling, leasehold improvements, and decorating
  • Advertising and marketing, both required and optional, and grand opening
  • Payroll, including pre-opening payroll during employee training
  • Equipment
  • Fixtures
  • Vehicle(s), truck(s), trailer(s), and/or vehicle wraps or paint
  • Gasoline/Fuel
  • Signage
  • Bookkeeping
  • Computer hardware
  • Computer software, including POS
  • Telephone system
  • Promotional Items
  • Opening Inventory
  • Cash on hand

Nicole Micklich is a franchise attorney with Garcia & Milas. Contact her at (203) 773-3824 or email her at nmicklich@garciamilas.com

Man using calculator

SPECIAL SECTION: PART 1

Breaking Down the FDD

Item 7: Estimated Initial Investment.

You’ve heard it before: Be sure you understand your Franchise Disclosure Document (FDD) before you buy into a franchise. The advice makes sense—after all, the document is there to protect you by listing everything the Federal Trade Commission (FTC) believes you need to know about your franchisor. But given that it’s a 150-page legal document, many prospective franchisees aren’t always clear on the details.

It’s complicated, we get it. So, to help you understand the finer points of the FDD, we’ve enlisted Nicole Micklich, a franchise attorney. In the next six issues of Franchise Dictionary Magazine, she will highlight some common misunderstandings about the document and clarify them. Here, we launch with the topic that everyone needs to be clear on: Money.

Under the FTC Franchise Rule, in Item 7 of the Franchise Disclosure Document, the franchisor must provide an estimate of the likely initial investment costs a franchisee will incur. Don’t confuse Item 7 with Item 5. Item 5 only discloses the initial fees that must be paid to the franchisor or affiliate. Item 7 should be more detailed than Item 5.

Item 7 requires franchisors to use a table to set out a franchisee’s entire estimated initial investment. The table is supposed to disclose all the expenses required by the franchise agreement and all other costs necessary for a franchisee to pen for business, including those that are to be paid to third parties, like rent.

The Rule does not dictate a complete list of the types of fees or expenses that must be shown in the table. The Rule provides suggestions of the typical expenses franchisees will incur. Franchisors should also identify and itemize other specific required payments franchisees must make to start operating.

Item 7 covers the period that ends when the franchisee opens for business. It also requires franchisors to include in the table “Additional Funds” for the time during the “initial period” of operations. The “initial period” can vary depending on brand, and franchisors must disclose the specific initial period used in the FDD.

For each item listed in the Item 7 table, the franchisor must disclose:

  • The amount of the payment
  • The method of payment
  • When the payment is due
  • To whom the payment is to be made

Some of the costs set out in the Item 7 table may be difficult for the franchisor to estimate and the franchisor may use ranges or variables. Franchisors use footnotes to provide more information about the Item 7 expenditures. If the franchisor offers different types of outlets, like restaurants that offer both stand-alone units and units in convenience stores, the franchisor might use more than one table.

As you consider the purchase of your franchise, you and your advisors should carefully and cautiously use Item 7 and other information provided by the franchisor to prepare a financial model for your start-up costs.

The Cost of Franchising

There are numerous costs associated with starting your franchised business, including:

  • The initial franchise fee
  • Training
  • Travel and living, to re-locate or for training, until business becomes profitable
  • Organizing and registering a business entity
  • Banking
  • Obtaining business licenses and permits
  • Negotiating a lease or purchase of real property (franchisor may require a real estate consultant)
  • Security deposits, utility deposits
  • Rent or mortgage payments
  • Insurance, including renter’s, auto, workers’ compensation, commercial general liability, officers and directors
  • Remodeling, leasehold improvements, and decorating
  • Advertising and marketing, both required and optional, and grand opening
  • Payroll, including pre-opening payroll during employee training
  • Equipment
  • Fixtures
  • Vehicle(s), truck(s), trailer(s), and/or vehicle wraps or paint
  • Gasoline/Fuel
  • Signage
  • Bookkeeping
  • Computer hardware
  • Computer software, including POS
  • Telephone system
  • Promotional Items
  • Opening Inventory
  • Cash on hand

Nicole Micklich is a franchise attorney with Garcia & Milas. Contact her at (203) 773-3824 or email her at nmicklich@garciamilas.com

27 07, 2018

Protect yourself: Form an Entity

By |2018-07-27T19:00:58+00:00July 27th, 2018|Categories: Legal|Comments Off on Protect yourself: Form an Entity

Signing Legal Documents

Protect Yourself: Form an Entity

By Jonathan Barber

If you’re buying into a franchise, you’re probably about to make one of the biggest investments of your life. You’re likely spending hundreds of thousands of dollars and taking a great leap of faith. Maybe you’re taking out a small business loan or rolling over your retirement funds.

Maybe you’re using your parents’ hard-earned money that you just inherited. Regardless of how much skin you’ve got in the game, you’re heavily invested in this new venture and there is a ton of risk involved. Forming an entity is one way to protect your personal assets and limit your risk.

Limit Your Liability

When John Smith signs a contract in his own name, John Smith is personally liable if things go south in that deal. However, if John Smith forms Smith Holdings, LLC, and signs a contract as Smith Holdings, LLC, he is generally not liable for the obligations of that contract. The limited liability company that John Smith formed is responsible for performing the terms within that contract. This scenario applies directly to franchising. Before you sign your franchise agreement, you could form a business entity such as a corporation or a limited liability company. Then, if you sign that franchise agreement on behalf of your entity, you have greatly limited your personal exposure.

Most franchise agreements require that the franchisee sign a personal guaranty. This isn’t a dealbreaker, it’s an industry standard. A personal guaranty will make you liable even if you sign the franchise agreement on behalf of an entity. Almost all franchisors require this, because they need to ensure their franchisees are all-in with the franchise. If a franchise doesn’t require franchisees to sign a personal guaranty, those franchisees could essentially walk away halfway through their terms with no consequences.

With an entity in place, however, you’re still largely protected. For instance, if a man slips and falls in your store, he most likely won’t be able to take your house and the clothes off your back if you have an entity in place. He could sue your entity for negligence, but as long as you didn’t do anything malicious, he will likely only be able to get to the entity’s assets. Likewise, if your entity enters into contracts with vendors or employees, those parties would really only have claims against your entity—not you individually. The “limited liability” aspect of corporations and LLCs literally limits the liability of an entity’s owner. Some states are different though, and you should consult with a business attorney within your state for further guidance.

By purchasing a franchise, you are putting your business and personal assets on the line, and it’s impossible to completely eliminate your risk. However, you can balance that level of risk against the potential reward your franchise offers. You can also limit your personal risk for non-franchise issues like personal injury and negligence by forming an entity—and the low cost of doing so is worth the personal protection.

Jonathan Barber exclusively practices franchise law as a partner at Barber Power Law Group in Charlotte, North Carolina. He has assisted hundreds of franchisees with their FDDs and buying into franchises all over the world. Barber also represents emerging and established franchisors.

Signing Legal Documents

Protect Yourself: Form an Entity

By Jonathan Barber

If you’re buying into a franchise, you’re probably about to make one of the biggest investments of your life. You’re likely spending hundreds of thousands of dollars and taking a great leap of faith. Maybe you’re taking out a small business loan or rolling over your retirement funds.

Maybe you’re using your parents’ hard-earned money that you just inherited. Regardless of how much skin you’ve got in the game, you’re heavily invested in this new venture and there is a ton of risk involved. Forming an entity is one way to protect your personal assets and limit your risk.

Limit Your Liability

When John Smith signs a contract in his own name, John Smith is personally liable if things go south in that deal. However, if John Smith forms Smith Holdings, LLC, and signs a contract as Smith Holdings, LLC, he is generally not liable for the obligations of that contract. The limited liability company that John Smith formed is responsible for performing the terms within that contract. This scenario applies directly to franchising. Before you sign your franchise agreement, you could form a business entity such as a corporation or a limited liability company. Then, if you sign that franchise agreement on behalf of your entity, you have greatly limited your personal exposure.

Most franchise agreements require that the franchisee sign a personal guaranty. This isn’t a dealbreaker, it’s an industry standard. A personal guaranty will make you liable even if you sign the franchise agreement on behalf of an entity. Almost all franchisors require this, because they need to ensure their franchisees are all-in with the franchise. If a franchise doesn’t require franchisees to sign a personal guaranty, those franchisees could essentially walk away halfway through their terms with no consequences.

With an entity in place, however, you’re still largely protected. For instance, if a man slips and falls in your store, he most likely won’t be able to take your house and the clothes off your back if you have an entity in place. He could sue your entity for negligence, but as long as you didn’t do anything malicious, he will likely only be able to get to the entity’s assets. Likewise, if your entity enters into contracts with vendors or employees, those parties would really only have claims against your entity—not you individually. The “limited liability” aspect of corporations and LLCs literally limits the liability of an entity’s owner. Some states are different though, and you should consult with a business attorney within your state for further guidance.

By purchasing a franchise, you are putting your business and personal assets on the line, and it’s impossible to completely eliminate your risk. However, you can balance that level of risk against the potential reward your franchise offers. You can also limit your personal risk for non-franchise issues like personal injury and negligence by forming an entity—and the low cost of doing so is worth the personal protection.

Jonathan Barber exclusively practices franchise law as a partner at Barber Power Law Group in Charlotte, North Carolina. He has assisted hundreds of franchisees with their FDDs and buying into franchises all over the world. Barber also represents emerging and established franchisors.

27 07, 2018

Funding Your Dream

By |2018-07-27T18:33:44+00:00July 27th, 2018|Categories: Funding|Comments Off on Funding Your Dream

Business Owner

Funding Your Dream

by Dallas Kerley

Entrepreneurs are dreamers, innovators, and go-getters. They are driven enough to start their own businesses. Many, however, lack the funding needed to open the doors. Or, do they?

There are plenty of ways to fund a franchise. Yes, you can borrow from the bank or find investors; of course, that means you’ll be starting your business in debt. But what if you had a pile of cash that allowed you to start your franchise cash-rich and debt-free? If you have money in a qualified retirement plan, you are cash-rich and can fund your franchise with a process known as Rollovers for Business Start-up (ROBS).

How does ROBS funding work?

A Rollovers for Business Start-up plan lets you use existing qualified retirement account funds, such as a 401(k), 403(b) IRA, or other qualified retirement vehicle, to fund your franchise tax-deferred and penalty-free. Because of the way a ROBS is structured, you can still contribute funds to a tax-advantaged retirement account as your business grows, enabling you to continue to plan for your retirement.

How do I get started?

Using retirement funds for your start-up involves four key steps:

Step 1: Establish a Corporation. In order to be eligible for a ROBS arrangement, you must form a new corporation.

Step 2: Create a New Retirement Plan. The corporation will sponsor a new retirement plan that has provisions allowing investments in the parent corporation stock.

Step 3: Transfer Retirement Funds. Once the plan is established, your existing retirement funds will be rolled over to the new plan. Because the funds are rolling from one qualified plan to another, no taxes are due and there are no withdrawal penalties.

Step 4: Launch the New Business. Once stock is purchased in the new corporation, you now have the cash to invest in your new franchise.

The Advantages

Tax Benefits. Under the ROBS plan, you maintain tax-deferred status and do not face any early withdrawal penalties.

Flexibility. The funds can be used for many different purposes. The money can be used as a cash injection for an SBA loan (Small Business Administration), to pay franchise fees, build or renovate a site, or buy equipment. You can even use the funds to pay yourself a salary. If you don’t need the money, don’t spend it—you aren’t required to use all the funds you’ve transferred.

Ease and Speed. In some cases, you can get access to your funds in as little as 10 days.

Funding isn’t dependent on your credit. Unlike other borrowing options, a ROBS doesn’t impact your personal credit. If you borrow any money for your business, your personal credit may suffer. Plus, if you have issues with your credit, you can still use the ROBS for your franchise.

Peace of Mind. Using your retirement plans means you are not incurring additional personal debt. And you’re spared the headache of negotiating with lenders for funding.

Need help figuring out how to best fund your franchise? Benetrends helps entrepreneurs make their dreams a reality. The ROBS program, known as the Rainmaker Plan®, provides guidance and support, so you can focus on your business. To learn more, visit www.benetrends.com.

Business Owner

Funding Your Dream

by Dallas Kerley

Entrepreneurs are dreamers, innovators, and go-getters. They are driven enough to start their own businesses. Many, however, lack the funding needed to open the doors. Or, do they?

There are plenty of ways to fund a franchise. Yes, you can borrow from the bank or find investors; of course, that means you’ll be starting your business in debt. But what if you had a pile of cash that allowed you to start your franchise cash-rich and debt-free? If you have money in a qualified retirement plan, you are cash-rich and can fund your franchise with a process known as Rollovers for Business Start-up (ROBS).

How does ROBS funding work?

A Rollovers for Business Start-up plan lets you use existing qualified retirement account funds, such as a 401(k), 403(b) IRA, or other qualified retirement vehicle, to fund your franchise tax-deferred and penalty-free. Because of the way a ROBS is structured, you can still contribute funds to a tax-advantaged retirement account as your business grows, enabling you to continue to plan for your retirement.

How do I get started?

Using retirement funds for your start-up involves four key steps:

Step 1: Establish a Corporation. In order to be eligible for a ROBS arrangement, you must form a new corporation.

Step 2: Create a New Retirement Plan. The corporation will sponsor a new retirement plan that has provisions allowing investments in the parent corporation stock.

Step 3: Transfer Retirement Funds. Once the plan is established, your existing retirement funds will be rolled over to the new plan. Because the funds are rolling from one qualified plan to another, no taxes are due and there are no withdrawal penalties.

Step 4: Launch the New Business. Once stock is purchased in the new corporation, you now have the cash to invest in your new franchise.

The Advantages

Tax Benefits. Under the ROBS plan, you maintain tax-deferred status and do not face any early withdrawal penalties.

Flexibility. The funds can be used for many different purposes. The money can be used as a cash injection for an SBA loan (Small Business Administration), to pay franchise fees, build or renovate a site, or buy equipment. You can even use the funds to pay yourself a salary. If you don’t need the money, don’t spend it—you aren’t required to use all the funds you’ve transferred.

Ease and Speed. In some cases, you can get access to your funds in as little as 10 days.

Funding isn’t dependent on your credit. Unlike other borrowing options, a ROBS doesn’t impact your personal credit. If you borrow any money for your business, your personal credit may suffer. Plus, if you have issues with your credit, you can still use the ROBS for your franchise.

Peace of Mind. Using your retirement plans means you are not incurring additional personal debt. And you’re spared the headache of negotiating with lenders for funding.

Need help figuring out how to best fund your franchise? Benetrends helps entrepreneurs make their dreams a reality. The ROBS program, known as the Rainmaker Plan®, provides guidance and support, so you can focus on your business. To learn more, visit www.benetrends.com.

1 06, 2018

Franchise Funding Do’s and Don’ts

By |2018-06-19T23:56:15+00:00June 1st, 2018|Categories: Funding|Comments Off on Franchise Funding Do’s and Don’ts

piggy bank

Franchise Funding Do’s and Don’ts

by Eric Schechterman

Entrepreneurs figure out how much they can afford to spend before finding the right franchise, right? Not exactly. In fact, people often tell me they found the right business, then struggle to figure out how to fund the opportunity—which is completely backwards. Do you look for a house before getting pre-qualified for a mortgage? Of course not! Ensuring you have the right funding in place can be the difference between long-term success and failure. Start off on the right track by following these key guidelines.

Do decide if you want to be a multi-unit owner. Some franchises will only accept you if you are willing to commit to 3 units. If you are interested in owning multiple units, then you’ll need to consider a multiple unit funding strategy from the start since how you fund your first unit affects your ability to fund future units.

Do consider all funding options. Some of the more popular include franchisor-specific financing programs, SBA loans, traditional loans, alternative lending, and home-equity financing. You can even utilize your retirement funds without penalties through a Rollover as Business Startup (ROBS) structure.

Don’t give up if you were rejected by a bank. Many candidates go to their local banks assuming they would be the best places to start securing loans. Then they get turned down once or multiple times and give up. In reality, it could just be the bank isn’t interested in the concept you are pursuing. Find a funding partner who works with multiple lenders—and knows which lenders prefer which concepts—and you can increase your chances of securing the right loan.

Do get pre-qualified. Why wouldn’t you want to find out how much funding you might pre-qualify for in advance? You do this with a home, why not a business? By getting pre-qualified through a funding provider, you can better identify which franchise concepts you can afford. Some pre-qualification programs are even offered free of charge.

Don’t underestimate how much funding you’ll need. One of the leading causes of small business failure is under-capitalization or insufficient funding. Most new business owners need more working capital than they anticipate, so make sure you have enough of a buffer to help with any unexpected operating costs.

Do your homework and get your financial house in order. Both franchisors and lenders have certain minimum criteria when it comes to approving franchisee candidates. For example, some franchises require a minimum net worth and a certain amount in liquid assets.  Do your financial homework in advance—find out your credit score, calculate your net worth, even update your resume—to see if you’re compatible from the get-go.

Don’t wait until the last minute. There are a lot of steps—and a lot of professionals—involved when it comes to funding a franchise, so you want to make sure you leave yourself enough time to get it right. If you don’t start early to shore up funding for your franchise, you might lose out on your dream opportunity.

As part of FranNet of Boston, Eric Schechterman works closely with clients to understand their goals, values, lifestyles, and interests. He coaches them through the franchising process and helps determine if franchising is a good fit. For more information, contact Eric at eschechterman@frannet.com

piggy bank

Franchise Funding Do’s and Don’ts

by Eric Schechterman

Entrepreneurs figure out how much they can afford to spend before finding the right franchise, right? Not exactly. In fact, people often tell me they found the right business, then struggle to figure out how to fund the opportunity—which is completely backwards. Do you look for a house before getting pre-qualified for a mortgage? Of course not! Ensuring you have the right funding in place can be the difference between long-term success and failure. Start off on the right track by following these key guidelines.

Do decide if you want to be a multi-unit owner. Some franchises will only accept you if you are willing to commit to 3 units. If you are interested in owning multiple units, then you’ll need to consider a multiple unit funding strategy from the start since how you fund your first unit affects your ability to fund future units.

Do consider all funding options. Some of the more popular include franchisor-specific financing programs, SBA loans, traditional loans, alternative lending, and home-equity financing. You can even utilize your retirement funds without penalties through a Rollover as Business Startup (ROBS) structure.

Don’t give up if you were rejected by a bank. Many candidates go to their local banks assuming they would be the best places to start securing loans. Then they get turned down once or multiple times and give up. In reality, it could just be the bank isn’t interested in the concept you are pursuing. Find a funding partner who works with multiple lenders—and knows which lenders prefer which concepts—and you can increase your chances of securing the right loan.

Do get pre-qualified. Why wouldn’t you want to find out how much funding you might pre-qualify for in advance? You do this with a home, why not a business? By getting pre-qualified through a funding provider, you can better identify which franchise concepts you can afford. Some pre-qualification programs are even offered free of charge.

Don’t underestimate how much funding you’ll need. One of the leading causes of small business failure is under-capitalization or insufficient funding. Most new business owners need more working capital than they anticipate, so make sure you have enough of a buffer to help with any unexpected operating costs.

Do your homework and get your financial house in order. Both franchisors and lenders have certain minimum criteria when it comes to approving franchisee candidates. For example, some franchises require a minimum net worth and a certain amount in liquid assets.  Do your financial homework in advance—find out your credit score, calculate your net worth, even update your resume—to see if you’re compatible from the get-go.

Don’t wait until the last minute. There are a lot of steps—and a lot of professionals—involved when it comes to funding a franchise, so you want to make sure you leave yourself enough time to get it right. If you don’t start early to shore up funding for your franchise, you might lose out on your dream opportunity.

As part of FranNet of Boston, Eric Schechterman works closely with clients to understand their goals, values, lifestyles, and interests. He coaches them through the franchising process and helps determine if franchising is a good fit. For more information, contact Eric at eschechterman@frannet.com

1 05, 2018

The Types of Franchise Arrangements

By |2018-06-20T00:38:07+00:00May 1st, 2018|Categories: Franchising 101|Comments Off on The Types of Franchise Arrangements

Map with markers

Types of Franchise Arrangements

Selecting the right franchise is important. But it’s just as important to select the best franchise ownership arrangement. You can start by understanding your options—and the responsibilities that come with each one. We’ve outlined the basics here. Once you align your background with a franchise—and an ownership arrangement—you’re well on your way to success.

Single-Unit Franchises

What it Means: Single-unit franchising is the simplest ownership arrangement. Here, a franchisee gets a single franchise license that enables her to operate one business location. It’s a great way to learn the system before making more purchases.

Your Territory: A franchisee may be granted a small radius of exclusive territory —a retail store, for example, may have a radius of two to three miles around its location. In other cases, licenses are non-exclusive but the sky’s the limit on where you can set up shop.

Your Role: This kind of ownership is great if you’re a hands-on manager, because single-unit franchisees are usually very involved with their franchises. Even semi-
absentee owners participate in the day-to-day operations.

How Much? Plan on $25,000-$60,000 initial out-of-pocket investment with a total investment of $50,000 and up.

Multi-Unit Franchises

What it Means: Multi-unit franchises are comparable to single-unit franchises, but instead the franchisee acquires more than one unit, sometimes at reduced franchise fees. If you’re a franchisee who wants to expand quickly, this could be for you.

Your Territory: Generally, the territory varies depending on the franchise. A franchisee might choose to have one unit in one section of town with another unit in another section of town a few miles away. Or, she may have an additional franchise in another county or state.

Your Role: Though you have more units, typically you’d be less involved in the day-to-day operations. But you will have to hire managers for each unit to provide structure and supervision. If many units are open, you may need to add additional administrative staff and training.

How Much? Figure $50,000 to $70,000 or more initial out-of-pocket capital to take care of the initial franchise fees. The rest of the investment is usually financed when each unit opens.

Area Development Franchises

What it Means: If you plan to open a bunch of franchises in a particular area you might sign on for an area development franchise contract. As a franchisee, you’d get the rights to open and operate a number of individual franchises in a designated territory or area.

Your Territory: You get an exclusive geographic territory as long as you adhere to the opening schedule. Territories can range from a small city to parts of—or all of—a larger city or designated area.

Your Role: You’ll be involved in the initial stages of the first location to make sure it’s successful. Once several locations are open, you’ll need to hire managers to oversee those units.

How Much? Plan at least $60,000-$120,000 initially to secure the area and pay all franchise fees. Then plan on additional start-up capital. You will need to be able to finance the rest of the start-up costs for each location as it opens.

Master Franchises

What it Means: Sometimes dubbed regional developers, master franchisees pay a franchisor a significant initial fee for the rights to develop a whole territory.  Franchisees who buy into the territory pay the master franchisee initial fees and royalty fees. In fact, this is the only franchisee who earns royalties instead of paying them.

Your Territory: Usually a large metropolitan area, a state, or even several states or a country. It is generally an exclusive area and will remain exclusive as long as the master franchisee meets the development schedule.

Your Role: Masters are responsible for recruiting individual franchisees and providing all the training and support they need, both initially and on-going. The master franchisee will sometimes set up and operate at least one unit, enlisting a manager to manage it while working on selling other “sub-franchises.”

How Much? The initial costs are more, but so is the earning potential. Figure $100,000 to $250,000 or more to acquire the territory and for the initial liquid capital to start the area.

Susan Scotts has more than 25 years of experience in the franchising industry. She helps her clients realize their goals of self-sufficiency through business ownership. For more information, visit www.sscotts.esourcecoach.com

Map with markers

Types of Franchise Arrangements

Selecting the right franchise is important. But it’s just as important to select the best franchise ownership arrangement. You can start by understanding your options—and the responsibilities that come with each one. We’ve outlined the basics here. Once you align your background with a franchise—and an ownership arrangement—you’re well on your way to success.

Single-Unit Franchises

What it Means: Single-unit franchising is the simplest ownership arrangement. Here, a franchisee gets a single franchise license that enables her to operate one business location. It’s a great way to learn the system before making more purchases.

Your Territory: A franchisee may be granted a small radius of exclusive territory —a retail store, for example, may have a radius of two to three miles around its location. In other cases, licenses are non-exclusive but the sky’s the limit on where you can set up shop.

Your Role: This kind of ownership is great if you’re a hands-on manager, because single-unit franchisees are usually very involved with their franchises. Even semi-
absentee owners participate in the day-to-day operations.

How Much? Plan on $25,000-$60,000 initial out-of-pocket investment with a total investment of $50,000 and up.

Multi-Unit Franchises

What it Means: Multi-unit franchises are comparable to single-unit franchises, but instead the franchisee acquires more than one unit, sometimes at reduced franchise fees. If you’re a franchisee who wants to expand quickly, this could be for you.

Your Territory: Generally, the territory varies depending on the franchise. A franchisee might choose to have one unit in one section of town with another unit in another section of town a few miles away. Or, she may have an additional franchise in another county or state.

Your Role: Though you have more units, typically you’d be less involved in the day-to-day operations. But you will have to hire managers for each unit to provide structure and supervision. If many units are open, you may need to add additional administrative staff and training.

How Much? Figure $50,000 to $70,000 or more initial out-of-pocket capital to take care of the initial franchise fees. The rest of the investment is usually financed when each unit opens.

Area Development Franchises

What it Means: If you plan to open a bunch of franchises in a particular area you might sign on for an area development franchise contract. As a franchisee, you’d get the rights to open and operate a number of individual franchises in a designated territory or area.

Your Territory: You get an exclusive geographic territory as long as you adhere to the opening schedule. Territories can range from a small city to parts of—or all of—a larger city or designated area.

Your Role: You’ll be involved in the initial stages of the first location to make sure it’s successful. Once several locations are open, you’ll need to hire managers to oversee those units.

How Much? Plan at least $60,000-$120,000 initially to secure the area and pay all franchise fees. Then plan on additional start-up capital. You will need to be able to finance the rest of the start-up costs for each location as it opens.

Master Franchises

What it Means: Sometimes dubbed regional developers, master franchisees pay a franchisor a significant initial fee for the rights to develop a whole territory.  Franchisees who buy into the territory pay the master franchisee initial fees and royalty fees. In fact, this is the only franchisee who earns royalties instead of paying them.

Your Territory: Usually a large metropolitan area, a state, or even several states or a country. It is generally an exclusive area and will remain exclusive as long as the master franchisee meets the development schedule.

Your Role: Masters are responsible for recruiting individual franchisees and providing all the training and support they need, both initially and on-going. The master franchisee will sometimes set up and operate at least one unit, enlisting a manager to manage it while working on selling other “sub-franchises.”

How Much? The initial costs are more, but so is the earning potential. Figure $100,000 to $250,000 or more to acquire the territory and for the initial liquid capital to start the area.

Susan Scotts has more than 25 years of experience in the franchising industry. She helps her clients realize their goals of self-sufficiency through business ownership. For more information, visit www.sscotts.esourcecoach.com

1 05, 2018

Understanding the FDD

By |2018-06-28T00:34:31+00:00May 1st, 2018|Categories: Legal|Comments Off on Understanding the FDD

young man on phone

Understanding the FDD

How the Franchise Disclosure Document Works

By Telanda Sidari

One of the most important documents you will run into during a potential franchise purchase is the Franchise Disclosure Document, or as it’s commonly called, the FDD. Granted, the document can be daunting with a lot of legal jargon, but it’s also full of information that lets you know exactly what you’re buying into. In fact, the FDD is the best way to understand the full scope of your business—and the key players involved with it.

What exactly does this document contain? How can you use it to your benefit? Here’s an overview.

How it works
As you may know, the Federal Trade Commission (FTC) oversees franchising guidelines. Back in 1978, the FTC instituted a rule that franchisors had to fully inform potential franchisees about the business they were buying into. The purpose, of course, was to protect potential franchise buyers from sordid franchisor systems.

The FDD is essentially an open book on the business. And though the documents vary in quality, there are 23 points that every document must cover—from the background of the franchisor to hidden fees to bankruptcy to restrictions and financial statements.

The document is usually released at the start of a potential buyer’s research. This way you have plenty of time to review, re-read, and gather questions. If franchisors don’t release the document at the start of your research, they are required to provide the FDD at least 14 calendar days before a contract is signed or any payments are made. The document can arrive in print or via email.

Every year, franchise systems registered with the FTC are required to renew the document with updated information and figures.  A 2018 FDD will show you how much it costs to invest into the system this year, and you’ll get financial returns of locations from 2017.

Speaking of finances, a key component of the FDD is Financial Performance. About 70 percent of franchisors will show financial performance representations, but how they show the information varies. Franchisors can’t provide more than what’s already in the FDD, but they can speak to you about anything listed in the FDD.

If you have questions, go beyond the franchisor. Franchisees can speak to you about how much they make, and will let you know about how the franchise system performs and also what support is like.

Always Enlist an Attorney
While the FDD may seem overwhelming, reading and understanding it is an important step in the franchise-purchasing process. If you understand the document, you can make an informed decision about your franchise purchase. To ensure that you and the franchisor are on the same page, hire a franchise attorney to help translate the document.

The purpose of a franchise attorney is to help explain the document and let you know the ins and outs of the franchise business. However, the attorney isn’t there to change the document.  Compare the FDD to a bank mortgage contract—the contract never changes, but you still have to understand what it says.

The FDD might not have all the answers you’re looking for, but it’s an important part of your research. Take it seriously, understand it, always ask questions, and you’re off to a successful start in your franchise purchase.

Telanda Sidari has 20 years of business experience with almost a decade in the franchising industry— from business ownership to sales. Ms. Sidari has first-hand experience in the emotional steps involved in buying a business. She helps clients navigate the process. For more information, email her at Telanda@TheFranchiseConsultingCompany.com

young man on phone

Understanding the FDD

How the Franchise Disclosure Document Works

By Telanda Sidari

One of the most important documents you will run into during a potential franchise purchase is the Franchise Disclosure Document, or as it’s commonly called, the FDD. Granted, the document can be daunting with a lot of legal jargon, but it’s also full of information that lets you know exactly what you’re buying into. In fact, the FDD is the best way to understand the full scope of your business—and the key players involved with it.

What exactly does this document contain? How can you use it to your benefit? Here’s an overview.

How it works
As you may know, the Federal Trade Commission (FTC) oversees franchising guidelines. Back in 1978, the FTC instituted a rule that franchisors had to fully inform potential franchisees about the business they were buying into. The purpose, of course, was to protect potential franchise buyers from sordid franchisor systems.

The FDD is essentially an open book on the business. And though the documents vary in quality, there are 23 points that every document must cover—from the background of the franchisor to hidden fees to bankruptcy to restrictions and financial statements.

The document is usually released at the start of a potential buyer’s research. This way you have plenty of time to review, re-read, and gather questions. If franchisors don’t release the document at the start of your research, they are required to provide the FDD at least 14 calendar days before a contract is signed or any payments are made. The document can arrive in print or via email.

Every year, franchise systems registered with the FTC are required to renew the document with updated information and figures.  A 2018 FDD will show you how much it costs to invest into the system this year, and you’ll get financial returns of locations from 2017.

Speaking of finances, a key component of the FDD is Financial Performance. About 70 percent of franchisors will show financial performance representations, but how they show the information varies. Franchisors can’t provide more than what’s already in the FDD, but they can speak to you about anything listed in the FDD.

If you have questions, go beyond the franchisor. Franchisees can speak to you about how much they make, and will let you know about how the franchise system performs and also what support is like.

Always Enlist an Attorney
While the FDD may seem overwhelming, reading and understanding it is an important step in the franchise-purchasing process. If you understand the document, you can make an informed decision about your franchise purchase. To ensure that you and the franchisor are on the same page, hire a franchise attorney to help translate the document.

The purpose of a franchise attorney is to help explain the document and let you know the ins and outs of the franchise business. However, the attorney isn’t there to change the document.  Compare the FDD to a bank mortgage contract—the contract never changes, but you still have to understand what it says.

The FDD might not have all the answers you’re looking for, but it’s an important part of your research. Take it seriously, understand it, always ask questions, and you’re off to a successful start in your franchise purchase.

Telanda Sidari has 20 years of business experience with almost a decade in the franchising industry— from business ownership to sales. Ms. Sidari has first-hand experience in the emotional steps involved in buying a business. She helps clients navigate the process. For more information, email her at Telanda@TheFranchiseConsultingCompany.com

1 04, 2018

The Types of Franchise Ownership

By |2018-06-20T01:17:32+00:00April 1st, 2018|Categories: Franchising 101|Comments Off on The Types of Franchise Ownership

Coffee Franchise

The Types of Franchise Ownership

Owner/Operator,” “Semi-Absentee,” and “Absentee” are three of the most commonly used terms in franchising. They refer to the different styles of franchise ownership and describe the owner’s role in the business. Ownership may vary in terms of time commitment, upfront and operating costs, scalability, and flexibility, depending on how involved you want to be. The terms themselves sound pretty self-explanatory, right? Yet, these three terms are all too often used inaccurately by franchise companies, consultants, and prospects—basically everyone in the business.

Before buying into any franchise, it’s important to know what kind of owner you want to be. Are you a “Type A” personality who wants to be hands-on everything? Are you planning to keep your day job and just want an easy investment? If you understand your motives, you have a better chance of reaching your goals.

So, how do ownership styles differ? We cover what every prospective franchisee needs to know.

Owner/Operator
What it is: If you’re the kind of business owner who likes being front and center in the day-to-day grind, then this type of ownership is for you. Owner/operators are responsible for daily operations. In a brick-and-mortar business, these owners typically work onsite most or all days that the business is open. In a service-based business, these owners are out in the field doing business development or servicing clients. This type of ownership is often referred to as, “buying yourself a job.”

Who it’s for: Anyone who has recently been forced into a career transition from a recent layoff or job change.

Upside: It’s a full-time job, which means you have lots of control over the business’s success.

Downside: Lots of hours, little flexibility, lots of responsibility.

Semi-Absentee
What it is: If you’re an exceptional manager, you may have what it takes to be a semi-absentee owner—and there are many perks with this style of ownership. With semi-absentee owners, the operational responsibility falls somewhere between absentee (hands-off) and owner/operator (hands-on). Many semi-absentee franchisees are people who want to keep their day jobs and rely on the help of managers to get their first stores off the ground.  Hence, this style is often referred to as “manager run.” You hire a managing staff for day-to-day operations and you oversee them. Your primary focus is leading the overall business strategy. Your time commitment is low, meaning you can continue your regular 9-to-5 gig, while you enjoy the security that comes with a steady income from the franchise. This type of ownership-style is a good fit for those who are good people managers. Another bonus? You don’t require industry knowledge, because the managers you hire already have it.

Who it’s for: Exceptional managers, who can keep up with the business without a full-time presence.

Upside: You lead the business strategy and hire managers to deal with daily responsibilities. Lots of flexibility, low time commitment, steady income.

Downside: Could mean less income because you have to pay managers to take care of the business.

Absentee
What it is: If you’re a hands-off manager looking for an investment opportunity, absentee ownership may be right for you. Absentee ownership is passive ownership. An absentee franchisee owns the business, but he hires the positions required to operate it, including day-to-day management. This person often has little to no physical presence at the business location and owns the business purely as an investment. If you’re in the market for a sound investment, this business model is best suited for you. The time commitment is minimal and you have minor involvement in the daily operations.

Who it’s for: Someone looking for an investment opportunity, more than a job.

Upside: You collect the big paychecks, while everyone else does all the work.

Downside: Most franchise brands are not structured to operate this way, so if this is your preferred path of ownership, your industry options will be limited.

As part of FranNet of Boston, Eric Schechterman works closely with clients to understand their goals, values, lifestyles, and interests. He coaches them through the franchising process and helps determine if franchising is a good fit. For more information, contact Eric at eschechterman@frannet.com

Coffee Franchise

The Types of Franchise Ownership

Owner/Operator,” “Semi-Absentee,” and “Absentee” are three of the most commonly used terms in franchising. They refer to the different styles of franchise ownership and describe the owner’s role in the business. Ownership may vary in terms of time commitment, upfront and operating costs, scalability, and flexibility, depending on how involved you want to be. The terms themselves sound pretty self-explanatory, right? Yet, these three terms are all too often used inaccurately by franchise companies, consultants, and prospects—basically everyone in the business.

Before buying into any franchise, it’s important to know what kind of owner you want to be. Are you a “Type A” personality who wants to be hands-on everything? Are you planning to keep your day job and just want an easy investment? If you understand your motives, you have a better chance of reaching your goals.

So, how do ownership styles differ? We cover what every prospective franchisee needs to know.

Owner/Operator
What it is: If you’re the kind of business owner who likes being front and center in the day-to-day grind, then this type of ownership is for you. Owner/operators are responsible for daily operations. In a brick-and-mortar business, these owners typically work onsite most or all days that the business is open. In a service-based business, these owners are out in the field doing business development or servicing clients. This type of ownership is often referred to as, “buying yourself a job.”

Who it’s for: Anyone who has recently been forced into a career transition from a recent layoff or job change.

Upside: It’s a full-time job, which means you have lots of control over the business’s success.

Downside: Lots of hours, little flexibility, lots of responsibility.

Semi-Absentee
What it is: If you’re an exceptional manager, you may have what it takes to be a semi-absentee owner—and there are many perks with this style of ownership. With semi-absentee owners, the operational responsibility falls somewhere between absentee (hands-off) and owner/operator (hands-on). Many semi-absentee franchisees are people who want to keep their day jobs and rely on the help of managers to get their first stores off the ground.  Hence, this style is often referred to as “manager run.” You hire a managing staff for day-to-day operations and you oversee them. Your primary focus is leading the overall business strategy. Your time commitment is low, meaning you can continue your regular 9-to-5 gig, while you enjoy the security that comes with a steady income from the franchise. This type of ownership-style is a good fit for those who are good people managers. Another bonus? You don’t require industry knowledge, because the managers you hire already have it.

Who it’s for: Exceptional managers, who can keep up with the business without a full-time presence.

Upside: You lead the business strategy and hire managers to deal with daily responsibilities. Lots of flexibility, low time commitment, steady income.

Downside: Could mean less income because you have to pay managers to take care of the business.

Absentee
What it is: If you’re a hands-off manager looking for an investment opportunity, absentee ownership may be right for you. Absentee ownership is passive ownership. An absentee franchisee owns the business, but he hires the positions required to operate it, including day-to-day management. This person often has little to no physical presence at the business location and owns the business purely as an investment. If you’re in the market for a sound investment, this business model is best suited for you. The time commitment is minimal and you have minor involvement in the daily operations.

Who it’s for: Someone looking for an investment opportunity, more than a job.

Upside: You collect the big paychecks, while everyone else does all the work.

Downside: Most franchise brands are not structured to operate this way, so if this is your preferred path of ownership, your industry options will be limited.

As part of FranNet of Boston, Eric Schechterman works closely with clients to understand their goals, values, lifestyles, and interests. He coaches them through the franchising process and helps determine if franchising is a good fit. For more information, contact Eric at eschechterman@frannet.com

13 12, 2017

“Deck the Halls” Christmas Spectacle Returns to sweetFrog Frozen Yogurt

By |2017-12-22T04:04:04+00:00December 13th, 2017|Categories: latestnews|Tags: , , , , , , , , , , |Comments Off on “Deck the Halls” Christmas Spectacle Returns to sweetFrog Frozen Yogurt

Richmond, VA (PRWEB)December 13, 2017

sweetFrog Frozen Yogurt, the nation’s leading frozen yogurt chain, named America’s Best Frozen Yogurt by The Daily Meal and a Top New Franchise by Entrepreneur Magazine, will put on a real Christmas spectacle throughout the holiday season with “Deck the Halls” benefit nights hosted by participating locations from coast to coast.

Church and school choirs throughout the country have partnered with local sweetFrog shops to host benefit night fundraisers. These choirs will perform all the holiday favorites as part of “Deck the Halls” events built to help them raise much-needed funds for local initiatives. To make these events even more special, sweetFrog will produce a video Christmas Card, using a montage of local choirs performing all over the country. The video Christmas Card will then be posted on all sweetFrog social media outlets.

As part of the “Deck the Halls” event, each participating sweetFrog shop will help the choir raise funds while providing each member with a free frozen yogurt. And for parents, grandparents, neighbors, friends, and other choir supporters who come to enjoy the music, sweetFrog will donate a portion (25% recommended) of the sales from all items purchased by those guests while the choir is performing.

“All of us at sweetFrog love this annual event that gets us in the Christmas spirit,” said sweetFrog’s CEO, Patrick Galleher. “It’s a wonderful time of community fellowship as people come together to celebrate Christmas. What better way to do that than enjoying the sounds of the season sung by local choirs? We are proud to showcase great local talent and support local churches and schools, while helping our sweetFrog owners generate some serious winter foot traffic!”

Two sweetFrog owners, in particular – Holly Silveous of Charles Town, WV and Angela Houle of Biddeford, ME – are all-in on Deck the Halls this year and are thrilled to give back to their community. Silveous, who also works as a teacher in her small town, is excited to host the first “Deck the Halls” event in her store on Wednesday, December 13th.

“We invited a local school choir of 4th and 5th graders to perform,” according to Silveous. “Because its kids, I’m anticipating a huge crowd, which is great. Children really shine when they have a chance to perform in front of an audience, so I want to pack the place out. We’ll move tables out of the way to make more room, if needed! Also – my manager will be taping their performance because I want to make sure they’re included in sweetFrog’s video Christmas Card. How cool will that be for them to be a part of something this big?”

Similarly, Houle is gearing up for “Deck the Halls” events with a girl scout troop on Thursday, December 14th and a local high school choir on Friday, December 15th.

“We’ve been looking forward to ‘Deck the Halls’ since we launched our sweetFrog store earlier this year,” said Houle. “We’re very close with local high schools and girl scout troops, so it was easy for us to coordinate these benefit nights. As the mother of a chronically ill child, it’s very important for me to give back to local organizations because I am acutely aware of their importance. The holidays are our happy place as a family, so hosting ‘Deck the Halls’ nights will be a staple of us. We can’t wait!”

For more information about sweetFrog’s “Deck the Halls” Christmas spectacle and other fundraisers and benefit nights, please go to http://www.sweetfrog.com.

To learn more about sweetFrog Frozen Yogurt franchise opportunities, please visit http://sweetfrog.com/franchise.

sweetfrog yogurt

About sweetFrog Frozen Yogurt: sweetFrog (http://www.sweetfrog.com) is the fastest growing self-serve frozen yogurt restaurant company in the country. With a wide selection of premium frozen yogurt flavors and fresh toppings choices, sweetFrog was named Best Frozen Yogurt in the USA by The Daily Meal in 2014 and 2016. sweetFrog has over 340 stores and mobile units including retail, mobile trucks and non-traditional locations (such as sporting venues) in twenty-seven states in the U.S, Dominican Republic and Egypt. The company was founded in 2009 and is based in Richmond, Virginia. sweetFrog prides itself on providing a family-friendly environment where customers can enjoy soft-serve frozen yogurt, ice cream, gelato and sorbets with the toppings of their choice. The company was founded on Christian principles and seeks to bring happiness and a positive attitude into the lives of the communities it calls home.