Franchisor Focus: 10 Ways an Earnings Claim Can Help Grow a Franchise System
August 18, 2021
Those of us who have spent years working in franchising may recall when a small number of franchisors made an Item 19 financial disclosure. It’s been reported that 20 years ago less than 20% of franchisors made a financial performance representation (FPR) or earnings claims in their FDD.[i] Over the course of the past number of years that number has increased considerably and a recent review of over 2,500 Franchise Disclosure Documents by Franchise Grade found that 65% of franchisors provided an FPR in their Item 19. The FPRs vary from average franchisee revenues to a more detailed disclosure of average franchisee profits.
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Franchisor Focus: The One Responsibility of Franchising Too Many Franchisors Overlook
August 10, 2021
As I consider subject matter for my franchise blogs its sometimes challenging to come up with a stimulating topic. Because I direct content mainly to franchisors, it’s important to provide helpful and constructive information. Whether as a franchisee, franchisor executive or providing operational advice to franchisors I’ve always advocated that a franchisor should have a strong franchise relations strategy. Certain franchisors are familiar with the clichés often attributed to fostering a climate of positive franchise relations, including having profitable franchisees, responding promptly to their emails, telephone calls and requests for assistance. Unfortunately, some franchisors don’t give franchise relations the attention it deserves.
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Franchisor Focus: What Makes a Successful Franchise Leader?
July 27, 2021
The franchise business model differs from the traditional business model in part because a franchisor entrusts its franchise brand to its franchisees and in return the franchisee invests their money in the franchise.
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Franchisor Focus: EB-5 Investment Program Update and Caution
July 23, 2021
The U.S. government created the EB-5 Investor Program to encourage foreign nationals to invest in U.S. businesses to stimulate economic growth and create jobs for U.S. workers. In return foreign nationals who make a qualifying investment into a new or existing United States business that creates a minimum of 10 US jobs can obtain a Green Card for their spouse and unwed children under the age of 21. This enables them and their families to be eligible to become permanent residents of the United States.
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Franchisor Focus: A Franchise Candidate is an Investor not a Customer
July 7, 2021
Some people will become aware of a franchise opportunity as a customer, through a news report or doing an Internet search for franchises. This can trigger an interest by the person to learn more about the franchise. However, some people do this by acting as a customer who is impressed by a product or service.
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Franchisor Focus: Franchisors and Franchisees Must Learn to Deal with Change
June 30, 2021
If there is one thing the Pandemic taught us, especially those of us in the franchise industry, it's that certain events both large and small require change. It is a given that the recent Pandemic represents extraordinary change having last occurred 100 years ago. Franchise brands face frequent challenges requiring change including, a formidable new competitor, franchisee resistance to certain promotional programs, declining franchise system growth or a public relations problem like when the Subway Foot Long Sub, was found by a customer to be less than a foot long. When these situations arise, franchisors and franchisees must be equipped to implement change to meet the challenge.
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Franchisor Focus: An Overlooked Franchisor Recruitment Strategy
June 25, 2021
To grow a franchise system a franchisor must have qualified franchise leads that can turn into viable franchise candidates. This is a fundamental truism of franchising, whether a franchisor generates their own leads, uses lead gen portals, or receives franchisee prospects from other sources. However, acquiring franchise leads is only a part of the franchise development process. A franchisee prospect needs to be sufficiently impressed with a franchise opportunity before proceeding to the next steps in the process.
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New York Times Investigates Subway’s Abuse of Franchisees
June 30, 2019
In a scathing article published in Sunday’s New York Times on June 30th, the Times reported on its investigation into the use of questionable practices by one its Franchise Development Agents that culminated in the agent acquiring two of a franchisees Subway stores.
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The Main Causes of Franchisor - Franchisee Conflicts
May 24, 2019
Several factors cause franchisor-franchisee conflicts. It is necessary, to begin with, the understanding that conflict between a franchisor and its franchisees is a part of the relationship. Both parties seek to employ strategies, which can lead to conflicts. For example, franchisors make revenues from franchise royalties, activities such as price promotions can drive franchise revenues leading to increased franchisor royalties. Conversely, franchisees seek to maximize their location profits and look to maximize gross margin dollars. Because lower pricing can generate increased sales the potential for conflict is high.
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Why McDonald’s Franchise Program Keeps on Rolling
May 12, 2019
When someone uninformed about franchising asks a question or makes a comment about the franchising industry, the first name they usually reference is McDonald’s. Given the storied history of the iconic franchise brand, its global recognition, and long- term success it is not surprising that McDonald’s is the first brand that comes to mind.
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