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How To Navigate A Franchise Expo

How To Navigate A Franchise Expo

If you’ve been itching to learn more about franchising or think you might be ready to buy a franchise, you can spend hours and hours reading about franchising on the internet (including on this blog), or you can go right to the source. A franchise expo, especially the national and regional shows that are endorsed by the International Franchise Association, present a veritable smorgasbord of franchise opportunities (and sometimes non-franchise business opportunities (known as Biz-Ops). This is a great opportunity to sample a wide variety of business concepts—even if you don’t find your perfect match, you may well be inspired by an industry segment, or a kind of business that may suit your career aspirations. A franchise expo can feel overwhelming, especially to someone who hasn’t prepared for the experience. Here are just a few tips for navigating your first franchise expo and making the most out of your experience: There’s No Need To Be Frightened Walking onto the expo floor can feel intimidating, but you really don’t need to be afraid of getting swayed by a good sales pitch into handing over your life savings. Franchise laws prohibit any deals being closed on the expo floor. Franchisors must properly qualify all prospects and comply with substantial pre-sale disclosure laws before you can legally be asked to pay any money. (If you are asked for a deposit or any payment, head for the nearest exit. That means you will have plenty of time to consider a franchise opportunity before making the big decision. Consider the franchise expo your opportunity to acquire information rather than to make a franchise purchase. Come In With A Game Plan And Questions If you wander to a franchise expo with no game plan, you’ll end up drifting around the show floor packing your free tote bag with colorful pens, brochures, magnets, and other useless knick-knacks. In other words, you’ll waste your time. Before you visit the show, go to the expo’s website and take a look at the list of franchisors that will be attending. Review franchisor websites that catch your eye and start making a list of all the franchisor booths you want to visit at the show....

Are You Part Of A Static Or Dynamic Franchise?

[spacer] [/spacer] If you’ve ever invested in stocks or mutual funds, then you are probably aware of the warning that comes with each purchase. It goes a little something like, “Past performance does not guarantee future results.” One of the most compelling reasons individuals flock to franchises is the assumption that the franchise will offer a “proven solution” that will nearly guarantee the success of all franchisees. Robert Purvin, Chairman of the AAFD, has thoroughly debunked the proven solution myth, but I suspect that it will continue to persist. Not every franchise is made equally, but even some of today’s best performing franchises may fail tomorrow if they do not stay on top of changing trends in their market, keep in touch with the needs of their customers, and demonstrate a willingness to change their services, distribution, and business plan in the face of an evolving market. In other words, franchises should come with the same warning as stocks: Past performance does not guarantee future results. Franchisees are often willing to invest hundreds of thousands of dollars or even millions to join a hot franchise with big profits. However, this bet could easily sour if the franchise is caught flat-footed in the future by selling outdated products or getting passed by a young and innovative competitor. (Think Fotomat or Deans Film Developing Centers, or Blockbuster Video rental stores.) Some franchise associations are sparked by franchisees who believe their franchise is not responding to changes in the marketplace. A static franchise that believes its operational model is bulletproof could take down its franchisees as it loses market share. In this instance, it may fall on the franchisees to raise their concerns help nudge the franchise toward awareness and adaptation. Franchisees are on the ground and have a day-to-day perspective that those working at the franchise central command may miss entirely. In this way, franchisees may be the best “canaries in the coal mine” when it comes to changes in customer appetite, disruptive technology, or dangerous competitors. If your franchisor isn’t adapting well in a fast-paced and quickly changing marketplace, a franchise association may be an effective way for you and your fellow franchisees to spur...

Before You Start An Independent Business, Is A Franchise Available?

Before You Start An Independent Business, Is A Franchise Available?

Is it finally time to chuck the cubicle, endless conference calls, and 9 – 5? Are you ready to start your own business? Running a business can be an incredibly empowering experience, especially if you perform a service or provide a product that speaks to a true passion. Starting your own business also comes with plenty of risks, as you know. As a small business owner, you will need to develop a workable operating system that will be able to grow with your business. You’ll also need to handle all of your own marketing, educate potential customers about your products or service, and do your own bookkeeping (or pay someone to do it for you). You may also have to lease a storefront or office, remodel the space to the specifications of your business, develop relationship with vendors, and much, much more. If this seems like a lot of work, or if you feel uncertain about your ability to successfully manage all these different aspects of your business, you can most likely find qualified consultants to help you in each of these areas. Another option is to see if a franchise system already exists in this same space. A franchise operation may have already done a lot of the legwork for you, depending on the quality and experience of the franchise. You will have to make some important compromises if you become a franchisee (more on this below), but the best franchises offer their franchisees the following benefits: An Existing Operating System If your business idea is complex or you aren’t exactly sure how to turn it into a profitable business, a franchisor may have already figured this out. The best franchisor opportunities feature and require adherence to an operating system that should allow the franchisee to quickly and efficiently get to business. A proven operating system is often (and properly) touted as one of the seminal advantages of owning a franchised business. But not all operating systems are created equal, and a mandated operating system may not sit well with those with an independent or entrepreneurial spirit. Moreover, many franchisors claim to offer a proven operational system and then deliver a subpar system...

What Does A Collaborative Franchise Relationship Look Like?

What Does A Collaborative Franchise Relationship Look Like?

In my previous blog post, I talked about how franchisors are eager to advertise themselves as benevolent mentors to prospective franchisees. Their marketing materials often paint a picture wherein franchisors will work hand-in-hand with each franchisee toward mutual success. Unfortunately, over the past decades franchise agreements have become more and more restrictive and onerous until today a franchisee often has less freedom than their employees. In contrast to industry hype, most franchise agreements promise little or no support or ownership equity in the franchisee. Additionally, the courts have routinely found that franchisors have no fiduciary duty to franchisees. These precedents have led to what the AAFD considers widespread abuse among franchisors, and it’s the primary reason that that AAFD developed its landmark Fair Franchising Standards. For over 30 years, the AAFD has fought for Total Quality Franchising, which we view as a collaborative, positive, and mutually respectful relationship between franchisors and franchisees. We believe that a collaborative relationship between franchisors and franchisees will provide the solid foundation that can lead to shared success. We’ve talked a lot about Total Quality Franchising on this blog, but what would a truly collaborative relationship between franchisors and franchisees actually look like? Here’s what we think: Good Faith and Mutually Respectful Relationship: The franchisor would recognize its responsibility to provide good faith support and loyalty to its franchisees, which includes fair dealings, due care in its duties, and consideration of franchisee concerns and challenges. Right to Equity: The franchisor would allow the franchisee to build equity in the franchise over time. Right to Representation: Franchisees would have the right to communicate with the franchisor about questions, concerns, challenges, and suggestions for improving the system. Full Disclosure: The franchisor would share all relevant information with perspective franchise buyers, including earnings data, so that the perspective buyer can make an educated decision about investing in the franchise. Freedom to Terminate: The franchisor would allow the franchisee to terminate the franchise relationship for a reasonable and just cause. Protection from Unreasonable Termination: The franchisee would not have to worry about being terminated without a reasonable or just cause. Ongoing Training and Support: The franchisor would provide continuous training to the franchisee...

Five Tips For Women Looking For A Franchise

Five Tips For Women Looking For A Franchise

Not every woman wants to “Lean In” and climb the corporate ladder (with all the long nights and draining travel that might entail) while also trying to raise healthy, happy children at home. Many women, instead, seek a flexible career that provides income and satisfaction while also allowing them to drive to recitals or even to work from home.

A Home-Based Franchise Is Still A Business

A Home-Based Franchise Is Still A Business

[spacer] Home based franchises are extremely appealing for a variety of reasons. They often allow for a flexible schedule, offer you the comfort of your own home as your office, and typically require a lower investment. These franchises may be a good choice for women or men who want to stay home with children, who need to take care of aging parents, have retired, or simply want to get away from the corporate 9 to 5. Many home based franchise opportunities exist, though they vary widely in their quality. Too often, franchisees fail to thrive in their home based businesses, and may even lose a big chunk of their retirement nest egg (and some even lose their life’s savings). The reasons behind the failure of any particular franchised business are varied, but you will almost certainly lose your shirt if you don’t choose a quality franchise and don’t take the business seriously. A home-based franchise is still a business and requires a high level of commitment, time, and energy in order for the franchisee to achieve success. Your Effort, Your Profit A common issue with home based franchises is that they can feed on a prospect’s ego – the “I can do that” imagination that doesn’t take into consideration the effort required to build up a thriving business. The success of a home-based franchise is strongly related to the work output of the franchisee. For instance, if you choose to run a janitorial franchise, it will be up to you to pick up the phone and start calling prospects, to network in your community, to pass out business cards, and then to perform the cleanings you book or schedule your employees appropriately. If you don’t pick up the phone and start making calls, or get in your car and head down to a networking luncheon, you’ll never get any clients. Don’t get trapped in a fuzzy day dream of an easy home-based franchise that will operate itself or be “fun”. I know of one popular interior design franchise that preys upon prospects, usually women, who have always felt like they had a knack for interior decorating. However, having a knack for decorating doesn’t mean...

The Difference Between Franchise Consultants and Franchise Brokers

[spacer] Choosing a franchise is one the biggest and often one of the most difficult decisions a prospective franchisee must make. The amount of franchise opportunities available is just huge (according to a 2010 report by PricewaterhouseCoopers, over 900,000 franchises existed in 2010). It can be overwhelming to try and comb through all these different franchises to try and find the perfect opportunity for you. This is exactly why franchise consultants and franchise brokers exist. These individuals work as franchise matchmakers, using their expertise to try and match an individual with a franchise that meets their interests, experience, and budget. However, franchise consultants and franchise brokers are not the same, and it’s important that you understand their very different motivations before you decide to work with on or the other. Franchise Consultants True franchise consultants operate in a “fee-for-service” function. You, the potential franchisee, pay the franchise consultant upfront for his or her help in matching you with a franchise. The benefit of this arrangement is that the franchise consultant is your true advocate. He or she has no stake in the franchise that you eventually choose, only in your happiness with the match. Franchise consultants don’t limit themselves to a specific group of franchises. Instead, they can search all available opportunities, which may result in much more tailored recommendations. Franchise Brokers Franchise brokers will often call themselves franchise consultants, or will shy away from the term ‘broker’, despite the accuracy of this term. Franchise brokers offer their services to potential franchisees for free. Don’t imagine for a second they want to match you up with a franchise out of the goodness of their heart. Brokers receive a commission from a franchisor when you become a franchisee.  In essence, they act as recruiters, searching for individuals to convert into good franchisees prospects. Many franchise brokers are actually franchisees themselves, and their franchisor provides them with a list of approved franchises that will provide a commission upon a successful franchisee match. When you work with a franchise broker, you must be aware that he or she has a vested financial interest in guiding you toward a limited set of franchises that he or she has...

How to Find a Great Franchise Lawyer

How to Find a Great Franchise Lawyer

Choosing a franchise is one of the most important decisions of your life. A franchise lawyer can help you make a better informed decision and protect you from an unfriendly franchise agreement. Franchise lawyers do so much for their clients.

Have You Turned In Your 2012 Census Form?

All businesses rely on the U.S. government in some form or another, including franchises. The more accurate data the government has, the better decisions and allocations it can make when it allocates resources to small businesses. In the fall of 2012, the U.S. Census Bureau sent out its five-year census survey to over four million businesses throughout the country. Those surveys were due Feb., 2013 and are now overdue. If you received a survey and did not fill it out, please do so now and turn it in. Your data will help the government gain a more accurate perspective of the needs of small businesses and franchises and your city, county and state. Don’t worry about digging through your desk drawers if you don’t know where your survey is. You can just hop onto the U.S. Census Bureau’s website and take the survey online Right Here. At the AAFD we strongly encourage all franchise owners to raise their voices and be heard. You can’t complain that the government never did anything to support your business if you don’t participate in the...

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