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Introduction to
                                      Business / Franchise
                                          Ownership


                                                          Control Your Destiny…


                                                    “Always bear in mind that your own
                                                       resolution to succeed is more
                                                       Important than any one thing”
                                                                          -Abraham Lincoln-
This presentation is intended solely to inform and educate individuals about franchising -- the
process, benefits, drawbacks and available resources. Only the prospective business owner can
determine if franchising is right for him / her. Prior to buying any franchise or business opportunity, a
thorough due diligence should be conducted, including consultation with a CPA / Accountant and a
Franchise Attorney.
                                                                          Copyright © 2012 All Rights Reserved
Franchise Quest…Franchise Search Consultants
                      Larry S. Powell, President

Franchise Quest, a franchise search consulting firm that recruits
candidates for a wide variety of franchise / business opportunities
from small to large and startups to nationally recognized.
Over 36 years experience encompassing both the corporate and
franchise worlds.
Prior to Franchise Quest, the original owner and operator of
Handyman Connection, a home improvement franchise in San
Antonio, TX from 2001 to 2008.
Formerly, the Vice President, Human Resources for The
Psychological Corporation / Harcourt Assessment.
 A graduate of The University of Texas at Austin with a BBA degree
in Management.
Franchise Quest…Franchise Search Consultants
                    Larry S. Powell, President



In addition to his 25 years in corporate America, Mr. Powell’s
experience has taken him through the “life-cycle” of business /
franchise ownership:
Involvement with a franchise consultant
Determining business and lifestyle goals, objectives and needs
Reviewing various franchises
Performing due diligence
Selecting and buying a franchise
Successfully owning and operating a franchise for 6+ years, and
growing the business to about $1M annual revenue
Exiting the business through a franchise re-sale
Franchise Quest…Franchise Search Consultants
                       Larry S. Powell, President


    Why am I here today?
    Outplacement Assistance….another “alternative”
    Your Options…
    Be Unemployed
    Go to School, or other activity
    Find Other Employment…another job
    Explore Self-Employment
   Start an Independent Business
   Business Opportunity…low-cost-of-entry business
   Franchise
What is Franchising?

Franchising is a method of distributing goods or
services to consumers. The franchise system owns
the right to the trademark of the business. The
franchisee purchases the right to use the trademark
and operating system.


Most people associate the word “franchise” with
fast food restaurants. But, there are many more
types of franchise businesses, including everything
from advertising to laundry/dry cleaning, maid
services to printing/copy services, real estate to
weight control and many more.
What is Franchising?
•Franchising is a network of interdependent business relationships
that allows a number of people to share:

• A brand identification

• A successful method of doing business

• A proven marketing and distribution system

In short, franchising is a strategic alliance between groups of people
who have specific relationships and responsibilities with a common
goal to dominate markets, i.e., to get and keep more customers than
their competitors.
Legal Factors to be
                    Considered a Franchise
Franchising is defined by state and federal laws as a
commercial relationship in which three factors are present:

    1. a licensed trademark
    2. a prescribed marketing plan
    3. the payment of a franchise fee for the right to
participate in the program.

When these three factors exist, the relationship is regulated
as a franchise by state and federal laws.
A “Business Opportunity” is similar to a franchise without
the restrictions and royalties. This can be an advantage
with SOME industries. Brand recognition would not be a
factor.
What Is A Franchise?
Business in a Box, that:

-Includes complete set of instructions…
      -- Franchisor has worked out the kinks…

-- Proven Turnkey Business Model
-- Operational Methodology & Systems
-- Initial Training & On-going Support
-- Location Selection
-- Set-up & Build-out
-- Hiring & Training Assistance
What Is A Franchise?

--Marketing Strategy & Implementation
--Mentoring & Collaboration
-- Group Purchasing Power
--Entity Identification
-- Rights To Use The Brand, Trademarks & Trade Names
Franchise Types
•   Single Unit Franchise
•   Multiple Units
•   Area Developer
•   Master Franchise




•   Business Opportunity… “Biz-Op”
Categories of Franchises
Accounting/Tax Services             Fitness                    Packaging/Ship/Mail
Advertising/Direct Mail             Florist Shops              Painting Services
Auto & Truck Rentals                Food/Restaurants           Paralegal Services
Automotive Products/Services                                   Payroll Services
                                    Golf Products/Services
Batteries-Retail & Comm.                                       Pest Control Services
Beverages: Special                  Greeting Cards             Pet Sales/Supplies
Business Brokers                    Hair Salons & Services     Photography
Business/Mgmt Consultants           Health Aids & Services     Printing/Copying
Campgrounds                         Home Furnishings           Real Estate Services
Check Cashing/Financial Services    Home Inspection            Recreational Services
Children’s Services                 Hotels and Motels          Rental Equipment & Supplies
Clothing and Shoes                  Insurance                  Retail Stores
Computer/Electronics/Internet       Janitorial Services        Security Systems
Construction Materials                                         Senior Care
                                    Jewelry                    Sign Products & Services
Consumer Buying Services
Convenience Stores                  Laundry & Dry Cleaning     Tanning Centers
Cosmetics                           Lawn/Garden/Agriculture    Telecommunications
Dating Services                     Maid & Personal Services   Transportation Services
Drug Stores                         Maintenance                Travel Agents
Educational Products/Services       Marine Services            Vitamin & Mineral Stores
Employment Services                 Optical Aids & Services    Weight Control
Well Known
                        Franchises
McDonald’s                   Gold’s Gym
Subway                       Great Clip’s
Curves                       H& R Block
Alphagraphics                Handyman Connection
ServPro                      Jenny Craig
Cleaning Authority           Kwik Copy
Baskin Robbins               MAACO
Budget Blinds
                             Molly Maid
Maui Wowi
                             Money Mailer
CareMinders Home Care
Courtyard by Marriott        Express Personnel Services
Lenny’s Sub Shops            Papa John’s Pizza
FocalPoint Coaching          Radio Shack
Dunkin’ Donuts               Sport Clips
Fantastic Sams               Taco Bell
Fuddruckers                  Wild Bird Centers of America
Established versus
                      Emerging Franchises
Mature Franchises:

Name Recognition
More regional and national advertising
More costly to get in
Territories may be smaller and limited in some markets
More refined training and support

Newer Franchises:

Cutting Edge Concepts
Cost-of-entry may be lower
More flexibility
Territories may be larger and available in more markets
Opportunity for emerging companies
What is a Franchisee?

          “Frantrepreneur”
           (fran*tre*pre*neur) n.


One possessing the desire to be a business
owner -- without the desire to recreate the
wheel -- by following a proven system for the
benefit of personal and professional goals.
Are You A Potential
     Franchisee?


What Do Franchisors
     Look For
  In a Prospect?
Are You A Potential
                       Franchisee?
Financial Qualifications…Liquid Capital & Net Worth
Business & Financial Acumen
Managerial Skills
Customer Service Orientation
Enthusiastic
Entrepreneurial Spirit
Work Hard / Smart
Teamwork Oriented…franchises are collaborative working
environments. Follow a system.
Decisive…make sound decisions within a reasonable time frame
Wanted…Military
                     Veterans

Franchisors understand Vets have demonstrated:
 Discipline
 Teamwork
 Ability to follow a system
 Leadership skills
 Military & Franchises are similar structures, built on
system methodology & execution
 Many Franchisors participate in VetFran Program
The Frantrepreneur
                       Mentality
   “I’m in
                       “I have the opportunity to
 business for          learn from the success and
myself, but not             failure of others.”
 by myself”.
                            “I want a ‘bottled’ process for success
                             that I can use in developing my own
 “Why would I work
                                     successful business.”
  for someone else
 when I can work for
 myself and reap the     "Why would I spend years and the investment
   rewards of my         required to establish a successful brand when I
      efforts?"         could buy a franchise which provides immediate
                       access to a successful business system and a brand
                             name which others already have made
                                           successful?"
Franchise Options
       TYPE:
       • Office                            OWNERSHIP:
       •Traditional retail                 • Hands-on
       • Mobile products/services          • Passive
       • Light Industrial                  • Part-time/full-time
       •Work from home
                                    SCOPE:
PRODUCT/SERVICE:
• 75 categories - an endless        • Single Unit Franchise
        array of possibilities      • Multiple Units
• Something to match anyone’s       • Master Franchise
        background, skills and      • Area Developer
        interests
Franchise Statistics
Franchise businesses account for about 50% of all retail sales in
the United States.
1 out of every 12 business is a franchised business.
A new franchised business is opened every 8 minutes of every
business day.
Franchise businesses employ more than 14 million Americans.
There are an estimated 3,000 franchise companies operating in
the U.S. doing business through more than 500,000 retail
outlets.
More than 75 industries use franchising to distribute goods and
services to consumers.
A 1999 study by The United States Chamber of Commerce
found that 86% of franchises opened within the last five years
were still under the same ownership and 97% of them were still
open for business.
Franchise Statistics
                          (continued)
A U.S. department of commerce study conducted from 1971 to
1997 showed that during that time less than 5% franchise
businesses were closed each year. Compare that to a U.S.
Small Business Administration study conducted from 1978 to
1998, which found that 62% of non-franchised businesses
closed within the first 6 years of their existence due to failure,
bankruptcy, etc.
Total sales by franchised businesses are projected to exceed
$2.3 trillion, this year.
In 2000, the median gross annual income, before taxes, of
franchisees was in the $75,000 to $124,000 range, with over
30% of franchisees earning over $150,000 per year.
Franchise Success Rate

       Franchises have a 90%
       + success rate. Most
       people can’t even
       predict that they can
       keep their jobs with a
       90% certainty.
Advantages of
                         Buying a Franchise
Offers the greatest success potential, with the least amount of RISK!
Franchisors have a vested interest in your success.
The marketplace has already been checked out by the franchisor and
determined the system to be successful.
The franchisor utilizes collective buying power and passes on the
discounts to you.
Local and national advertising for the franchise operation as a whole is
supplied by the franchisor.
Supervision, training programs and consulting are readily available from
the franchisor.
Managerial, operational and accounting systems are in place to
facilitate your success.
Ongoing research and product development is provided by the
franchisor.
Disadvantages of Buying
                      a Franchise
You have to pay the franchisor royalties.
The contract with the franchisor must be renewed after a certain
period of time.
There is a lack of flexibility because business methods are
dictated by the franchisor.
The franchisor's problems are also your problems.
You may be forced to buy products supplied by the franchisor
rather than the most cost effective product available.
You don’t get to make all of the decisions in how to run your
business.
In some ways, owning a franchise is like a cross between
independent business ownership and employment.
Questions To Ask
                       Yourself
What are my reasons for wanting a business of my own?

Do I have the necessary attributes to be self-employed?

Do I have the total support of my spouse / family for buying a
business?

When I find the “right” franchise / business opportunity, am I the
type of individual who will be ready, willing and able to “pull the
trigger” and move forward with a new life?
Questions To Ask
                      Yourself
How much capital do you have to invest?
How much liquid assets do you have?
Are you interested in using 401K / IRA to fund the business?
Do you require a specific level of annual income?
Are you interested in pursuing a particular field?
Are you interested in retail sales, food service, or performing a
service?
Do you want a part-time or fulltime opportunity?
How many days / hours are you willing to work?
Questions To Ask
                     Yourself
Do you want to operate the business yourself or hire a
manager?
Do you want to have employees?
Do you want to have inventories?
Do you want to have Accounts Receivables?
Will franchise ownership be your primary source of income or
will it supplement your current income?
Would you be happy operating the business for the next 5-20
years?
Would you like to own several outlets or only one?
Due Diligence…
                      Validation
Questions…….ask….ask….ask!!! You are the one that
validates!

The goal is to know what to expect the day you open the doors!

Every franchisor is different with how they help you through the
process. You are that must conduct the due diligence to
determine if the franchise / business concept validates.
Due Diligence…
                           Validation
When Exploring Business Ownership…Do Your Homework …
The best source of information is the existing franchisees /
business owners.
 – Listen carefully and read between the lines in terms of not just what they are
   saying, but also how they are saying it.
Personally, select a reasonable number of existing owners to
call. Do not settle for calling only the ones recommended by the
franchise rep.
Don’t make it easy for the franchisor to steer you. If you are
looking for variety in the characteristics of the existing
franchisees, ask the franchisor or your coach for assistance.
                                                     assistance
Due Diligence…
                      Validation
Visit with some franchisees who are struggling. No system has
all their franchisees in perfect alignment all the time, so there
will undoubtedly be a few who are struggling or upset about
something.
Remember, one of the primary reasons for making validation
calls is to gather additional facts and information you can use in
your evaluation, but it is also to develop a sense of the culture
and attitudes of the system.
Prior to buying any franchise or business opportunity, a
thorough due diligence should be conducted, including
consultation with a CPA / Accountant and a Franchise Attorney.
Funding
Consult with the Franchisor regarding available funding options

Benetrends…401(k) / IRA

SBA Loans
 –   Patriot Express Pilot Loan Initiative: http://www.sba.gov/content/express-programs
 –   Other SBA Loan Programs:
      http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans
Process to Becoming
                      A Franchisee
1.   Identify Goals; Objectives; & Lifestyle Needs.
2.   Review Current Financial Position And Future Goals.
3.   Complete Confidential Questionnaire.
4.   Teleconference To Discuss Questionnaire.
5.   Search for Franchises / Business Opportunities.
6.   Discuss Options That Align With Goals.
7.   Initial Teleconference With Franchise Rep.
8.   Receive Franchise Packet & FDD
9.   Additional Teleconferences / Webinars With
     Franchise Rep(s).
Process to Becoming
                    A Franchisee
10. Validation Process…Talk / Visit Franchisees.
11.Consult with Attorney & Accountant.
12.Visit Franchise Headquarters…Discovery Day.
13.Obtain Funding.
14.Sign Franchise Agreement
15.Obtain Real Estate, if necessary.
16.Franchise Initial Training
17.Complete Build-out, if necessary
18.Local Training
19.Open For Business
20.On-Going Support
Should You Use
                        a Consultant?
A Franchise Consultant...
  will take the time to educate you on the franchise industry
  will help you define your goals & objectives, so that you don’t
  waste your energies and time on franchises that are not right for
  you or that you are not qualified for
  can provide you valuable insight on franchises that you won’t find
  on your own
  will help you present your qualifications to a Franchiser
  is paid by the Franchisers, but he / she recognizes that this only
  happens if he / she provides you excellent service and presents
  to you the right opportunities
  will take an unbiased approach to helping you achieve your goa ls
Franchise Quest       …       Franchise Search Consultants



                          Larry S. Powell, President



     Recruit & Match Candidates for Top-Quality Franchises;
     Business Opportunities [Biz Ops]; Low-cost-of-entry home-
     based businesses.

1.   Our goal is NOT to convince you that business ownership is the
     right thing for you.
2.   COACH….don’t sell.
3.   Assist with the various decision-making processes that may
     lead to business ownership:
Franchise Quest…Franchise Search Consultants
                         Larry S. Powell, President



   Help candidate understand pros & cons of business ownership
   Edu. Background; Work Exp; Personal Attributes; Interests;
    Preferred Bus. Model; Lifestyle Needs; Financial Resources
   Help candidate determine and list those career & personal
    lifestyle objectives, goals, & needs which he / she wants
    business to help him / her attain
   Introduce to appropriate options by identifying franchise /
    business opportunities that align with those goals
   Franchise
   Business Opportunity [Biz Op]
   Low-cost-of-entry home-based business
Remember…

A dream is just a dream.

     A goal is a dream
with a plan and a deadline!
“If you don’t follow your dreams, you’ll be
                                             working for someone who did.”
                                                      -anonymous




                                Larry Powell
                        210-479-2491
             888-479-2491…Outside San Antonio
                franchisequest@sbcglobal.net
                   www.franchise-quest.com

Copyright © 2012 All Rights Reserved

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Introduction To Business / Franchise Ownership

  • 1. Introduction to Business / Franchise Ownership Control Your Destiny… “Always bear in mind that your own resolution to succeed is more Important than any one thing” -Abraham Lincoln- This presentation is intended solely to inform and educate individuals about franchising -- the process, benefits, drawbacks and available resources. Only the prospective business owner can determine if franchising is right for him / her. Prior to buying any franchise or business opportunity, a thorough due diligence should be conducted, including consultation with a CPA / Accountant and a Franchise Attorney. Copyright © 2012 All Rights Reserved
  • 2. Franchise Quest…Franchise Search Consultants Larry S. Powell, President Franchise Quest, a franchise search consulting firm that recruits candidates for a wide variety of franchise / business opportunities from small to large and startups to nationally recognized. Over 36 years experience encompassing both the corporate and franchise worlds. Prior to Franchise Quest, the original owner and operator of Handyman Connection, a home improvement franchise in San Antonio, TX from 2001 to 2008. Formerly, the Vice President, Human Resources for The Psychological Corporation / Harcourt Assessment. A graduate of The University of Texas at Austin with a BBA degree in Management.
  • 3. Franchise Quest…Franchise Search Consultants Larry S. Powell, President In addition to his 25 years in corporate America, Mr. Powell’s experience has taken him through the “life-cycle” of business / franchise ownership: Involvement with a franchise consultant Determining business and lifestyle goals, objectives and needs Reviewing various franchises Performing due diligence Selecting and buying a franchise Successfully owning and operating a franchise for 6+ years, and growing the business to about $1M annual revenue Exiting the business through a franchise re-sale
  • 4. Franchise Quest…Franchise Search Consultants Larry S. Powell, President Why am I here today? Outplacement Assistance….another “alternative” Your Options… Be Unemployed Go to School, or other activity Find Other Employment…another job Explore Self-Employment  Start an Independent Business  Business Opportunity…low-cost-of-entry business  Franchise
  • 5. What is Franchising? Franchising is a method of distributing goods or services to consumers. The franchise system owns the right to the trademark of the business. The franchisee purchases the right to use the trademark and operating system. Most people associate the word “franchise” with fast food restaurants. But, there are many more types of franchise businesses, including everything from advertising to laundry/dry cleaning, maid services to printing/copy services, real estate to weight control and many more.
  • 6. What is Franchising? •Franchising is a network of interdependent business relationships that allows a number of people to share: • A brand identification • A successful method of doing business • A proven marketing and distribution system In short, franchising is a strategic alliance between groups of people who have specific relationships and responsibilities with a common goal to dominate markets, i.e., to get and keep more customers than their competitors.
  • 7. Legal Factors to be Considered a Franchise Franchising is defined by state and federal laws as a commercial relationship in which three factors are present: 1. a licensed trademark 2. a prescribed marketing plan 3. the payment of a franchise fee for the right to participate in the program. When these three factors exist, the relationship is regulated as a franchise by state and federal laws. A “Business Opportunity” is similar to a franchise without the restrictions and royalties. This can be an advantage with SOME industries. Brand recognition would not be a factor.
  • 8. What Is A Franchise? Business in a Box, that: -Includes complete set of instructions… -- Franchisor has worked out the kinks… -- Proven Turnkey Business Model -- Operational Methodology & Systems -- Initial Training & On-going Support -- Location Selection -- Set-up & Build-out -- Hiring & Training Assistance
  • 9. What Is A Franchise? --Marketing Strategy & Implementation --Mentoring & Collaboration -- Group Purchasing Power --Entity Identification -- Rights To Use The Brand, Trademarks & Trade Names
  • 10. Franchise Types • Single Unit Franchise • Multiple Units • Area Developer • Master Franchise • Business Opportunity… “Biz-Op”
  • 11. Categories of Franchises Accounting/Tax Services Fitness Packaging/Ship/Mail Advertising/Direct Mail Florist Shops Painting Services Auto & Truck Rentals Food/Restaurants Paralegal Services Automotive Products/Services Payroll Services Golf Products/Services Batteries-Retail & Comm. Pest Control Services Beverages: Special Greeting Cards Pet Sales/Supplies Business Brokers Hair Salons & Services Photography Business/Mgmt Consultants Health Aids & Services Printing/Copying Campgrounds Home Furnishings Real Estate Services Check Cashing/Financial Services Home Inspection Recreational Services Children’s Services Hotels and Motels Rental Equipment & Supplies Clothing and Shoes Insurance Retail Stores Computer/Electronics/Internet Janitorial Services Security Systems Construction Materials Senior Care Jewelry Sign Products & Services Consumer Buying Services Convenience Stores Laundry & Dry Cleaning Tanning Centers Cosmetics Lawn/Garden/Agriculture Telecommunications Dating Services Maid & Personal Services Transportation Services Drug Stores Maintenance Travel Agents Educational Products/Services Marine Services Vitamin & Mineral Stores Employment Services Optical Aids & Services Weight Control
  • 12. Well Known Franchises McDonald’s Gold’s Gym Subway Great Clip’s Curves H& R Block Alphagraphics Handyman Connection ServPro Jenny Craig Cleaning Authority Kwik Copy Baskin Robbins MAACO Budget Blinds Molly Maid Maui Wowi Money Mailer CareMinders Home Care Courtyard by Marriott Express Personnel Services Lenny’s Sub Shops Papa John’s Pizza FocalPoint Coaching Radio Shack Dunkin’ Donuts Sport Clips Fantastic Sams Taco Bell Fuddruckers Wild Bird Centers of America
  • 13. Established versus Emerging Franchises Mature Franchises: Name Recognition More regional and national advertising More costly to get in Territories may be smaller and limited in some markets More refined training and support Newer Franchises: Cutting Edge Concepts Cost-of-entry may be lower More flexibility Territories may be larger and available in more markets Opportunity for emerging companies
  • 14. What is a Franchisee? “Frantrepreneur” (fran*tre*pre*neur) n. One possessing the desire to be a business owner -- without the desire to recreate the wheel -- by following a proven system for the benefit of personal and professional goals.
  • 15. Are You A Potential Franchisee? What Do Franchisors Look For In a Prospect?
  • 16. Are You A Potential Franchisee? Financial Qualifications…Liquid Capital & Net Worth Business & Financial Acumen Managerial Skills Customer Service Orientation Enthusiastic Entrepreneurial Spirit Work Hard / Smart Teamwork Oriented…franchises are collaborative working environments. Follow a system. Decisive…make sound decisions within a reasonable time frame
  • 17. Wanted…Military Veterans Franchisors understand Vets have demonstrated: Discipline Teamwork Ability to follow a system Leadership skills Military & Franchises are similar structures, built on system methodology & execution Many Franchisors participate in VetFran Program
  • 18. The Frantrepreneur Mentality “I’m in “I have the opportunity to business for learn from the success and myself, but not failure of others.” by myself”. “I want a ‘bottled’ process for success that I can use in developing my own “Why would I work successful business.” for someone else when I can work for myself and reap the "Why would I spend years and the investment rewards of my required to establish a successful brand when I efforts?" could buy a franchise which provides immediate access to a successful business system and a brand name which others already have made successful?"
  • 19. Franchise Options TYPE: • Office OWNERSHIP: •Traditional retail • Hands-on • Mobile products/services • Passive • Light Industrial • Part-time/full-time •Work from home SCOPE: PRODUCT/SERVICE: • 75 categories - an endless • Single Unit Franchise array of possibilities • Multiple Units • Something to match anyone’s • Master Franchise background, skills and • Area Developer interests
  • 20. Franchise Statistics Franchise businesses account for about 50% of all retail sales in the United States. 1 out of every 12 business is a franchised business. A new franchised business is opened every 8 minutes of every business day. Franchise businesses employ more than 14 million Americans. There are an estimated 3,000 franchise companies operating in the U.S. doing business through more than 500,000 retail outlets. More than 75 industries use franchising to distribute goods and services to consumers. A 1999 study by The United States Chamber of Commerce found that 86% of franchises opened within the last five years were still under the same ownership and 97% of them were still open for business.
  • 21. Franchise Statistics (continued) A U.S. department of commerce study conducted from 1971 to 1997 showed that during that time less than 5% franchise businesses were closed each year. Compare that to a U.S. Small Business Administration study conducted from 1978 to 1998, which found that 62% of non-franchised businesses closed within the first 6 years of their existence due to failure, bankruptcy, etc. Total sales by franchised businesses are projected to exceed $2.3 trillion, this year. In 2000, the median gross annual income, before taxes, of franchisees was in the $75,000 to $124,000 range, with over 30% of franchisees earning over $150,000 per year.
  • 22. Franchise Success Rate Franchises have a 90% + success rate. Most people can’t even predict that they can keep their jobs with a 90% certainty.
  • 23. Advantages of Buying a Franchise Offers the greatest success potential, with the least amount of RISK! Franchisors have a vested interest in your success. The marketplace has already been checked out by the franchisor and determined the system to be successful. The franchisor utilizes collective buying power and passes on the discounts to you. Local and national advertising for the franchise operation as a whole is supplied by the franchisor. Supervision, training programs and consulting are readily available from the franchisor. Managerial, operational and accounting systems are in place to facilitate your success. Ongoing research and product development is provided by the franchisor.
  • 24. Disadvantages of Buying a Franchise You have to pay the franchisor royalties. The contract with the franchisor must be renewed after a certain period of time. There is a lack of flexibility because business methods are dictated by the franchisor. The franchisor's problems are also your problems. You may be forced to buy products supplied by the franchisor rather than the most cost effective product available. You don’t get to make all of the decisions in how to run your business. In some ways, owning a franchise is like a cross between independent business ownership and employment.
  • 25. Questions To Ask Yourself What are my reasons for wanting a business of my own? Do I have the necessary attributes to be self-employed? Do I have the total support of my spouse / family for buying a business? When I find the “right” franchise / business opportunity, am I the type of individual who will be ready, willing and able to “pull the trigger” and move forward with a new life?
  • 26. Questions To Ask Yourself How much capital do you have to invest? How much liquid assets do you have? Are you interested in using 401K / IRA to fund the business? Do you require a specific level of annual income? Are you interested in pursuing a particular field? Are you interested in retail sales, food service, or performing a service? Do you want a part-time or fulltime opportunity? How many days / hours are you willing to work?
  • 27. Questions To Ask Yourself Do you want to operate the business yourself or hire a manager? Do you want to have employees? Do you want to have inventories? Do you want to have Accounts Receivables? Will franchise ownership be your primary source of income or will it supplement your current income? Would you be happy operating the business for the next 5-20 years? Would you like to own several outlets or only one?
  • 28. Due Diligence… Validation Questions…….ask….ask….ask!!! You are the one that validates! The goal is to know what to expect the day you open the doors! Every franchisor is different with how they help you through the process. You are that must conduct the due diligence to determine if the franchise / business concept validates.
  • 29. Due Diligence… Validation When Exploring Business Ownership…Do Your Homework … The best source of information is the existing franchisees / business owners. – Listen carefully and read between the lines in terms of not just what they are saying, but also how they are saying it. Personally, select a reasonable number of existing owners to call. Do not settle for calling only the ones recommended by the franchise rep. Don’t make it easy for the franchisor to steer you. If you are looking for variety in the characteristics of the existing franchisees, ask the franchisor or your coach for assistance. assistance
  • 30. Due Diligence… Validation Visit with some franchisees who are struggling. No system has all their franchisees in perfect alignment all the time, so there will undoubtedly be a few who are struggling or upset about something. Remember, one of the primary reasons for making validation calls is to gather additional facts and information you can use in your evaluation, but it is also to develop a sense of the culture and attitudes of the system. Prior to buying any franchise or business opportunity, a thorough due diligence should be conducted, including consultation with a CPA / Accountant and a Franchise Attorney.
  • 31. Funding Consult with the Franchisor regarding available funding options Benetrends…401(k) / IRA SBA Loans – Patriot Express Pilot Loan Initiative: http://www.sba.gov/content/express-programs – Other SBA Loan Programs: http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans
  • 32. Process to Becoming A Franchisee 1. Identify Goals; Objectives; & Lifestyle Needs. 2. Review Current Financial Position And Future Goals. 3. Complete Confidential Questionnaire. 4. Teleconference To Discuss Questionnaire. 5. Search for Franchises / Business Opportunities. 6. Discuss Options That Align With Goals. 7. Initial Teleconference With Franchise Rep. 8. Receive Franchise Packet & FDD 9. Additional Teleconferences / Webinars With Franchise Rep(s).
  • 33. Process to Becoming A Franchisee 10. Validation Process…Talk / Visit Franchisees. 11.Consult with Attorney & Accountant. 12.Visit Franchise Headquarters…Discovery Day. 13.Obtain Funding. 14.Sign Franchise Agreement 15.Obtain Real Estate, if necessary. 16.Franchise Initial Training 17.Complete Build-out, if necessary 18.Local Training 19.Open For Business 20.On-Going Support
  • 34. Should You Use a Consultant? A Franchise Consultant... will take the time to educate you on the franchise industry will help you define your goals & objectives, so that you don’t waste your energies and time on franchises that are not right for you or that you are not qualified for can provide you valuable insight on franchises that you won’t find on your own will help you present your qualifications to a Franchiser is paid by the Franchisers, but he / she recognizes that this only happens if he / she provides you excellent service and presents to you the right opportunities will take an unbiased approach to helping you achieve your goa ls
  • 35. Franchise Quest … Franchise Search Consultants Larry S. Powell, President Recruit & Match Candidates for Top-Quality Franchises; Business Opportunities [Biz Ops]; Low-cost-of-entry home- based businesses. 1. Our goal is NOT to convince you that business ownership is the right thing for you. 2. COACH….don’t sell. 3. Assist with the various decision-making processes that may lead to business ownership:
  • 36. Franchise Quest…Franchise Search Consultants Larry S. Powell, President  Help candidate understand pros & cons of business ownership  Edu. Background; Work Exp; Personal Attributes; Interests; Preferred Bus. Model; Lifestyle Needs; Financial Resources  Help candidate determine and list those career & personal lifestyle objectives, goals, & needs which he / she wants business to help him / her attain  Introduce to appropriate options by identifying franchise / business opportunities that align with those goals  Franchise  Business Opportunity [Biz Op]  Low-cost-of-entry home-based business
  • 37. Remember… A dream is just a dream. A goal is a dream with a plan and a deadline!
  • 38. “If you don’t follow your dreams, you’ll be working for someone who did.” -anonymous Larry Powell 210-479-2491 888-479-2491…Outside San Antonio franchisequest@sbcglobal.net www.franchise-quest.com Copyright © 2012 All Rights Reserved