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Franchisors Must Carefully Manage Change
Posted by Franchise Grade Team April 25, 2016
Change is a normal part of operating any company whether the company is small or large, franchised or not. Change can come in many forms, whether procedural, which is implemented per the operations manual or marketing changes such as introducing an advertising program or new product. Change can be of a major category such as a franchisor acquisition, a merger or a sale. If the franchisor is publicly owned, this type of information must be disclosed in compliance with SEC regulations.
Read moreSome Franchisors Neglect the Importance of Market Research
Posted by Franchise Grade Team March 21, 2016
There are two primary objectives franchisors seek to achieve! First, the recruitment of qualified franchise candidates and second, growing their franchise network with successful franchisees. However, a number of franchisors neglect another important objective that’s related to the two. This requires having an effective franchise recruitment and development strategy that targets the right markets.
Read more5-Year FTR Comparison of Healthy & Unhealthy Franchise Investments
Posted by Franchise Grade Team February 17, 2016
The Top 10%, or Healthiest, franchise systems in the industry had a 5-year average Franchisee Turnover Rate (FTR) of 8.4% while the Bottom 10%, Unhealthiest, almost doubled that FTR with 16.1%.
Read moreFranchisee Candidates Need to Evaluate the Franchisors Corporate Culture
Posted by Franchise Grade Team January 21, 2016
There are numerous activities that relate to the process of evaluating a franchise opportunity. These activities include; reviewing the FDD and especially the franchise agreement, gaining feedback from franchisees and analyzing the performance of the franchise system. However, one area that doesn't get the attention it deserves pertains to the culture of the franchisor. Corporate culture begins with franchise leadership and works its way throughout the organization. The importance of corporate culture applies to all companies, with the exception that franchisees rely upon the franchisor to provide the vision, guidance and support necessary to operate a healthy franchise system.
Read morePlanning your Future: A Prospective Franchisee's Exit Guide
Posted by Franchise Grade Team July 16, 2015
A new franchisee must necessarily create a very detailed business plan for getting the new business from a great idea to a functioning, operating, profitable, and successful franchise. A critical but sometimes overlooked component of that plan is an “exit strategy”, which addresses two basic scenarios: Best Case and Worst Case.
Read moreAnnualized Costs Of Initial Franchise Investments
Posted by Franchise Grade Team May 12, 2015
One of the leading causes of franchisee failures is undercapitalized franchisees. Being able to more accurately predict the financial requirements of a franchise investment and compare the results to available investment capital can lower the risk of being undercapitalized.
Read moreYour Home Office - What You Need To Know
Posted by Franchise Grade Team March 26, 2015
Nearly everyone has a space in their home or apartment that they use as a home office. As you begin to consider investing in a franchise, your home office will be where you begin – transforming it from where you pay household bills and make/take business-related phone calls, to the business office you will be using on your journey to franchising. In fact, regardless of what type of franchise business you’re planning to get into, it’s almost certain that you will be getting started out of your own home office. Further, some business are ideally suited for being run out of a home office rather than an external, on-site location like the back room of a restaurant location. On that note, there are many due diligence tasks you need to address when transforming your space into a business office for your franchise. Following are a few of the most critical.
Read moreDon’t Get Stuck in Reverse!
Posted by Franchise Grade Team December 18, 2014
It's hard to hit a target facing the wrong direction.
Read moreWhat’s the Right Royalty Rate?
Posted by Franchise Grade Team December 15, 2014
Most franchisees pay franchisors a royalty, typically set as a fraction of the franchisee’s gross sales, in return for using the franchisor’s brand name and business format in the operation of their businesses. This royalty rate varies substantially, even across franchisors in the same industry. So how do franchisors decide what royalty rate to charge?
Read moreHow to Inspire Loyalty and Boost Your Staff Retention (Part 1)
Posted by Franchise Grade Team December 12, 2014
A business succeeds or fails because of the people involved.
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