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Introduction toFranchising
John Reynolds, CFE
President, IFA Educational Foundation
International Franchise Association
• Founded in 1960, IFA is the world's oldest and largest organization representing franchising worldwide.
• IFA’s Mission: to protect, enhance and promote franchising. • IFA members include franchise companies in over 300
different business sectors, individual franchisees, and businesses that provide products and services to the industry such as marketing, law, and business development.
Based in Washington, D.C.
$14 million annual budget
30 Members - Professional Staff
Government Relations, Conferences, Media Relations,
Membership, Marketing, and Administration
International Franchise Association
IFA Website –
www.franchise.org
The U.S. Franchise Industry
• Job Creators– Nearly 18 million jobs
• 1 out of every 12 private sector jobs
• $304.2 billion in payroll (direct)
(2007 Economic Census.)
Franchises in Job Creation
The U.S. Franchise Industry• Revenue
Generators– $2.1 trillion in economic
output• $802 billion in direct output/ 9
percent of total economic output
• 3.9 percent of all private sector GDP (direct)/ 9 percent of total
• 3.4 percent of all GDP (including government & farm sector)
American Franchising Video
What is Franchising?
A marketing method in which the owner of a product or service, known as the
“franchisor”, offers the right to operate and manage his product & service to
others, the “franchisees”, in return for a fee and ongoing royalty payments.
Franchisee- Initial Fee - Royalty,- Infrastructure
Franchisor- Know-How - Support- Trademark
How To Investigate A Franchise
Conduct market researchEvaluate strength of franchisorCall existing and former franchiseesHire a lawyer or accountant familiar with
franchisingRead the Franchise Disclosure Document, or
FDD – thoroughlyCheck the FDD for earnings claims or financial
performance estimates
FDD Highlights
Experience of franchise management
Bankruptcy and litigation history
Initial and ongoing fees
Territory rights (if any are granted)
Contact list of current and former franchisees
Supply and sourcing arrangements (if any required)
Franchise Agreement you will be required to sign
Fred DeLuca – worked in the first Subway restaurant in 1965to earn money to go to college. Now he and his franchise partners own more than 36,000 restaurants in 85 countries.
Start Small Finish BigBy Fred DeLuca & John Hayes
15 Key Lessons to Start – and Run –
Your Own Successful Business
Two Men And A Truck – 1985 to 2012
Started by two brothers in
high school with $350 and one truck,
now 200+ locations across the U.S.
and development rights in a number
of foreign countries.
Bill Rosenberg, founder of Dunkin’ Donuts, with his book Time To Make The Donuts
Started business in 1950selling coffee and donuts offthe back of a catering truck in factory parking lots.
Now more than 9,000locations world-wide.
For more information:
John Reynolds
IFA website:
www.franchise.org
