Franchising is about creating a community of business owners working out of the same system and sharing the same goals, metrics, brand, system, etc. It is franchise malpractice to not have your franchisees reporting their numbers in a uniform way, which starts with a standard chart of accounts for your franchisees. By Tom Spadea
Why do customers buy from your franchisees? That should be the question at the root of every decision a franchisor makes. Does the system continue to deliver the brand promise that created the original profitable unit that pushed the founder into franchising? By Tom Spadea
Many of our franchisor clients are run by a dynamic and charismatic founder with the vision and passion to lead the brand through the wild and unpredictable ride of franchise growth. By Tom Spadea
It is so tempting for a franchisor to only tout what they do well, the good decisions they have made, and the incredible systems they have built. Although it may sound counterintuitive, a big part of the value of experienced brands comes from all the things they didn’t do well over the years. By Tom Spadea
As a crab grows, it must periodically shed its hard outer shell, at which time, its inner soft shell expands and hardens, giving the crab room to grow. This is an oversimplified explanation of the “molting” period. By Tom Spadea
If you make $100 in profit, that $100 on the open market is worth the multiple of the earnings in the business it is generated. If you pay that $100 in royalties to the franchisor, that $100 becomes an expense to your operating unit and profit to the franchisor. By Tom Spadea
As a franchise attorney, I am often asked what makes a franchise system succeed. What separates the brands that grow past the point of royalty breakeven and get on track for explosive exponential growth? By Tom Spadea
As attorneys, we protect our clients with the contracts we write, the clauses we negotiate, and the words we choose. However, words are not magic and not the end of the discussion in any legal analysis or dispute. The words are a road map and documentation of what the parties intended the legal relationship to be, but they aren’t the “last word,” so to speak, in most instances. By Tom Spadea
Seems like a simple enough question. However, I think many franchisors forget they are in two businesses. One is the underlying subject matter expert on the service provided to consumers, such as a restaurant, gym, roofing, etc. But the second, and increasingly more important, as your system grows, is the business of franchising. By Tom Spadea
As a franchise attorney, I have had the good fortune to watch a number of brands grow from small businesses that looked more like a side hustle, to enterprises courted by multiple private equity firms willing to dish out 8-figures to the founders. By Tom Spadea