Friday, March 6, 2015

What is a Franchise?A franchise is the agreement or license between two legally independent parties which gives:

1. a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor)

2. the franchisee the right to market a product or service using the operating methods of the franchisor

3. the franchisee the obligation to pay the franchisor fees for these rights

4. the franchisor the obligation to provide rights and support to the franchisee

Advantages of Buying a Franchise

Proven system

High probability of success (after 5 years 95% vs 47%)

Support and network

Speed to market

Staffing advantages

Association with a well established brand, reputation and product or service

Advantages of Buying a Franchise

Assistance with site selection, lease negotiation, site development, and builders

Management support including training

Established standard procedures, operating manuals and stock control systems

Assistance in securing finance

Established financial systems and business metrics

1 ▪ Is Business Ownership for Me?

How much cash do I really have?

What is my tolerance for risk?

What is my expected ROI and when?

Am I passionate about my product or service?

Am I willing to take on numerous responsibilities?

Do you have the experience and skills to manage and lead?

2 ▪ What Do I Want to Do?

3 ▪ What Industry Do I Want to Be In?

• Automotive• Business Services• Children’s Business• Education• Financial Services• Food/Full-Service Restraints• Food/Quick-Service

Restaurants• Food/Retail Sales

• Home Improvements• Hotel & Motels• Maintenance• Personal Care• Pets• Recreation• Retail• Services• Technology

4 ▪ What Franchise Do I Want to Own?

Industry trends

Marketing

Franchise organization

Royalties – base, advertising, software, etc

Training and support

Brand recognition

Cash flow quadrant

Cash requirement

5 ▪ How Do I Raise Capital? Capital required

Start-up, franchise fee, operating, lease, salaries

Cash required

Lenders typically require 30% to 60% cash

Options for raising cash

Sell shares

Use personal savings (shareholder loan)

Find partners

Refinance assets

Be creative

6 ▪ How Do I Select a Location?

Perform demand and area rate survey

Complete due diligence

Talk to other franchisees

Determine size of grid or radius

Identify if your franchise agreement is site specific

Understand leasing – net, cam, TI, leasehold cost

Assess location visibility and profitable

Be patient

7 ▪ What is My FA/DD?

FA – Franchise Agreement

DD – Disclosure Document (PE, NB, ON, MB, AB)

Hire a franchise lawyer specialist

Understand not much will change

Determine number of lawsuits between franchisees and the franchisor

Identify the number of units are open and success rate

8 ▪ Marketing - What Should I Look for?

Social media strategy

On-line reviews

Mobile friendly web sites

Search Engine Optimization (SEO)

Easy to find online

Web site quality

Where do consumers look for their product?

9 ▪ What Technology Might I Receive?

Management controls

Inventory

Communication

Business management

Training

Process

Security and access control

10 ▪ Do I Belong in Entrepreneurville?

Passion

Burning desire to win

High risk tolerance

Great leadership skills

Cash flow quadrant

Self-belief

Greatest reward ever!

Wayne CochranePresident/CEO, Willowbrae Academy

www.WillowbraeAcademy.com

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