Embed Size (px)
DESCRIPTION
Franchise Growth Partners (FGP) is a one-of-a-kind management consulting firm. Our professional services provide new and emerging franchisors a comprehensive platform which includes consulting, legal, training and an array of essential support services. Our philosophy is based on an authentic ownership experience gained through a history of formation, operations and acquisition. Consulting FGP will prepare your high level strategic plan, your tactical business operations plan detailing the day- to-day activities of training and supporting franchisees, and a financial plan calculating the initial and ongoing costs of marketing, selling, and operating a profitable franchise company. Without this necessary business planning, your Franchise Disclosure Document will be deficient before it is drafted. Legal Documentation FGPimage1 FGP has partnered with expert franchise attorneys to draft Franchise Disclosure Documents, Franchise Agreements, and Area Development Agreements at a pre-negotiated and affordable fixed rate. Training Certification FGP offers the following stage-appropriate management skills training programs at an affordable cost based on a “pay as you grow” basis: Marketing and Lead Generation newFGPimage Franchise Sales training Franchise Operations Management Financial Management CEO Leadership Development Support Services (Optional) FGP has developed seven critical operational divisions that provide strategic value to our franchisors. Clients benefit from our highly standardized services to grow their brand without investing capital on additional office space and employees. Commercial Leasing Services (Site selection, lease negotiation, and legal review) Franchisee Funding Franchise Operations System (Web-based) Franchise Operations Manuals Marketing/Sales Support Brand Development Services (Website, franchise brochures, etc.) Accounting Services (all 50 states)
Citation preview
The Advantages of FranchisingFranchise Development Program
Volume I, No. 1
INTERNATIONAL FRANCHISE ASSOCIATION
®
Franchising offers the following advantages to you, the franchisor:
• Control – less than company owned – generally greater than independent dealers • Thefranchisordoesnotcontroltheday-to-daymanagementofthefranchisee’slocation
• Franchisorsetsbrandstandards • ProductsandServices • ConsumerRelationship • BrandManagement • Marketing
• UnitInvestmentandoperatingcostsaretransferredtofranchisee • Acceleratesexpansion • Nocontingentliabilityonexpansioncapital • Nocontingentliabilityonrealestate • Noequitydilution
• MarketPenetration • Increasedbrandrecognitionasmoreandmorelocationsopen • Abilitytoservesmallermarketsthatmightnotbeattractiveforcorporatedevelopment • Acceleratesmarketdominanceoverlocalcompetitors • Improvesacceptanceandtermsfromlandlord • Increasesvalueofthebrand
• Collectivebuyingpower • Reducescostforproducts,equipment,etc.,becauseofsystempurchasingcapacity • SharedResources • Warehouses,production,anddistribution • Leveragespurchasingpower • BrandMarketingthroughsystemmarketingfund • Allcontributetomoreprofessionaladvertisingandmarketingprogramsandmaterials • Abilitytomaintainwebpresence • Franchiseemanagestheday-to-dayactivitiesoftheirlocalbusinesstosystemstandards • Labor • Inventory
• Franchiseeresponsibletoexecutetobrandstandards
• Reducesperunitcostofsupportforfranchisor
• Franchiseeliableforlocaloperations–substantiallyreducesriskofvicariousliability
• Franchiseemotivatedtosucceed
• Knowledgeableaboutlocalmarkets
• Sourceofnewproductandserviceideas
• Franchiseeatriskforunitperformance
• Generatesrevenue • Fees–initialandongoing • Rebates • Franchiseepurchases
Advantages to You
Franchisingoffersthefollowingadvantagestoindividualbusinessowners(franchisees):
• Useoffranchisor’sbrand
• Useoffranchisor’soperatingsystem
• InitialAssistance • Businessestablishmentandstart-up • Siteselectionandconstructionassistance • Training • Staffingandhiringguidelines • Marketintroductionassistance
• OngoingAssistance • Businessconsultationandguidance • Reducedcostofgoods • Marketingassistance
• Abilitytobeapartofalargerwhole
Advantages to Franchisee
2
The Advantages of Franchising
The Advantages of Franchising
Whatoperatingsystemsshouldyouhaveinplacetooperateyourbusiness?
CustomerExperience You must deliver the customer experience on a consistent basis:
• Product/Service • PreparationofProduct • LocationCriteria(siteselection,leasenegotiation,andlegalreview) • Build-OutandDécor • LaborandSchedulingRequirements • Equipment • VehicleRequirements • Ingredients,Products,Supplies • Advertising • CustomerService • Pricing • Inventory • SuppliersandVendors • Training • CanbecodifiedintoOperationsManuals • Canbeoperatedbyatrainedmanager
Training Programs You will need the following training programs in place:
• Allpositionsinthebusiness • Franchiseeandtheirstaff • Whys as well as Hows • Consistentresults • Requiredskillsettobehired • Specializedbackgrounds • Timetoachieveproficiency
Marketing&AdvertisingPrograms You will need the following marketing and advertising programs:
• BrandIdentityandDevelopment • PricingPhilosophy • LocalMarketAdaptations • AdvertisingandMarketingMaterials • Assistfranchiseestointroducetheconceptorthebrandintoanewmarket • CorporateIdentity
Legal&RegulatoryRequirements You will need the following legal and regulatory requirements in place:
• FederalLevel • StateLevel • LocalLevel • LicensesandCertifications • FranchiseOwnership
AcceptableReturnonInvestment Is there the opportunity for an acceptable return on investment?
• NoGuarantees • Franchisorsandfranchiseescananddofail • Opportunityforanacceptablereturnbasedoneconomicmodeling • Franchisor • Reasonabletimeandgrowthrate • Franchisee • Earnalivingorbuildabusiness
YourCompany&Franchising You must identify whether your company culture lends itself to a franchising model:
• Franchisesaregovernedbythecontractbutmanagedbyrelationships • Doyoucarewhatothersthink? • Canyouenforcestandardsagainsta“friend”? • Canyoufollowtherequirementsofthecontract? • Canyoucomplywithfranchiseregulations?
Overviewofthe FranchiseSystem
3
The Advantages of Franchising
Overviewofthe FranchiseSystem (continued)
Products&Services You must be able to supply products and services to your franchisees:
• Suppliers’relationshipsinplace • Areyourcurrentsupplierspositionedtogrowwithyou? • Doyouhavetheabilitytoprotectyour“secretsauce”? • Willyoursuppliersworkwithyouwhileyougrowyourfranchisesystem? • Doyouhavebackupsuppliersidentified?
CompetitiveFranchiseOffer You must identify how competitive your franchise offer is:
• Poolofprospectivefranchisees • Affordabilityofthefranchise • Othertermsoftheagreement • Operatingstandards • Territory • Feesandrequiredpurchases • Otherrights/obligations • Abilityoffranchiseestoobtainfinancing
FranchiseExpectations You must consider how realistic your franchise expectations are:
• Growthoffranchisenetwork • Abilitytoprovideopeningandongoingsupport • Activelyevolveandmanagethebrand • Providemanagementtoolstofranchisees • Enforcestandards • Financialinvestmentrequiredtobeginfranchising • Expectedrevenuefromfranchising
Settingthe Expectations
Youareembarkingonanewexcitingvoyage,andinyourinitialoptimismyoumightnotanticipate the potential storms to come:
Atsomepointyourgrowthwillplateau!Whetheryouhitthisgrowthbarrierat10, 30, 60, or 90 operatingunits,thesolutiontoachievingabreakthroughbeginsinaskingtherightquestion. Wearetemptedtoaskthewrongquestionfirst,“HowdoIgetmyfranchisesystemtogrow?” Therightquestionis,“Whatispreventingmyfranchisesystemfromgrowing?Whatismy Achilles’heel?”
ItisessentialtorecognizeyourspecificAchilles’heelandtakeproactivemeasurestopreventplateauing.ThefivemajorAchilles’heelstoeveryfranchisorare:Leadership,Management,OperationalPerformance(Franchisor/Franchisee),Administration,andFinancialManagement.
Youneedtothinkaboutyourexitstrategy.Willyousellthecompany,gopublic,leaveitasalegacy foryourchildren,hireaprofessionalmanagementteamsoyoucanretire,etc.?Theseareimportantdecisionstobemadebeforewecanproperlydesignyourfranchisecompany.Youmustkeeptheend inmindsothatyourfranchisecompanyisbuiltonafoundationtoachievethisgoal.
BreakingThrough GrowthBarriers
KeepingtheEnd inMind(ExitStrategy)
YourRole as a Leader
Thereareanumberofcomponentsessentialtoyoursuccess,growth,andprofitability.Morethanlikelyyouwilldelegatemanyofthese;nonetheless,youmaintainultimateaccountability.Thefollowing factorsarenecessarytobuildasolidbaseforafranchisecompany:
• Leadership • Management • OperationalPerformance(Franchisor/Franchisee) • Administration • FinancialManagement
Asyourstrategicpartnerinfranchisesystemdevelopment,FranchiseGrowthPartners holdsitselfresponsibletogrowingwithyouthroughnovice,apprentice,journeymantomaster-levelCEOleadershipskills.
3625ThousandOaksBlvd.,Suite228,WestlakeVillage,CA91361phone:800.471.1682•fax:805.496.4284•franchisegrowthpartners.com INTERNATIONAL FRANCHISE ASSOCIATION
®
