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Hidden Ways Franchisors Can Manipulate Item 19
Posted by Ed Teixeira March 30, 2018
At the current time 60% of franchisors provide a financial performance representation (“FPR”) under Item 19 in their Franchise Disclosure Document. As the disclosure of an FPR becomes more prevalent so too does the quality of the financial information become more important. Franchisors that provide more accurate and detailed FPR’s will be providing valuable and practical information to prospective franchisees. Providing more financial disclosure will be a valuable edge for a franchisor. However, some franchisors will provide information in their Item 19 that can be misleading and confusing to franchise candidates.
Read moreFranchisors Prepare to Answer These Questions the Right Way
Posted by Ed Teixeira January 29, 2018
As part of a franchise candidate’s due diligence process, it should be expected that certain questions will be directed to franchisor staff. Although many of the questions will be of the typical and usual variety, there can be certain questions that require a careful and detailed response. If a franchise candidate doesn’t receive the answer they expect, it will reflect poorly on the franchisor representative or franchise broker who is representing the franchisor. The better prepared a franchisor representative is to answer certain questions the right way, the better the impression the candidate has.
Read moreAn Office Flood Taught Us How to Manage Remote Employees
Posted by Jeff Lefler January 24, 2018
Right after New Years, during the cold snap, pipes froze and burst at our office, damaging desks, walls and some electronics. It was a big enough flood that we needed to vacate the office while renovations occurred.
Read moreThe Top 10 Franchise Grade Facts & Figures From 2017
Posted by Jeff Lefler January 13, 2018
Download The Top 10 Franchise Grade Facts & Figures From 2017 Franchise Grade’s continuous effort to study the franchise industry paved the way for new insights and findings throughout 2017. From detailed studies on emerging franchise success rates, errors in Item 20 disclosure and sector performance, Franchise Grade’s reports helped shed light on key performance metrics for successful franchising!
Read moreThe Meaning of Changing Franchise Investments
Posted by Ed Teixeira December 13, 2017
A recent study by Franchise Grade® analyzed changes in the average franchise investments from 2013 to 2016 for the ten major franchise sectors. While there have been various changes in average franchise investments during this time, some changes were more dramatic than others. It’s important as a prospective franchisee to understand why certain changes take place. For example, in the case of the Real Estate franchise sector, the average franchise investment decreased by 46%, which was by far the largest decrease among the ten sectors. The reasons for this change can be attributed to the rebound in residential real estate values after the demise of the Great Recession. After suffering more than any other franchise sector Real Estate has been on the rebound.
Read moreFranchise Candidates Need to Dig Deeper
Posted by Ed Teixeira November 16, 2017
There are numerous books, articles and blogs that provide advice on how to evaluate a franchise opportunity. A common thread that runs through is the recommendation that before a prospective franchisee invests they must review and validate the information disclosed in the Franchise Disclosure Document and obtain feedback from franchisees. This approach is an effective way to evaluate a franchise and when coupled with the assistance of professional advice can be an effective way to evaluate and protect your franchise investment. However, to complement this approach I would advise prospective franchisees to dig deeper into the franchise and gather more information.
Read moreFranchisors Need to Avoid Wasting Their Franchisee Leads
Posted by Ed Teixeira November 9, 2017
It’s a well- known fact, that when franchisors strategize their system growth, the major focus is placed on the amount and quality of their franchisee leads. However, if there isn’t a program in place to maximize the productivity of candidate leads the growth of the franchise network will be severely hampered. All the money and human resources invested in lead gen will be for naught if a franchisor doesn’t have the right program in place. Industry surveys and data continue to indicate that it requires from 1 to 1.5% of all total leads to produce one new franchisee sale. In other words, it takes 100 leads to complete one new franchise transaction. Obviously, it’s critical to maximize ROI on the leads franchisors pay for, which includes costs for PR, SEO programs, PPC and Ad Portals. It’s a waste of money to pay for leads and not have a complete franchise development program in place.
Read moreThere’s More to a Franchise Than the Fees
Posted by Ed Teixeira October 31, 2017
When prospective franchisees consider choosing among various franchises to invest in, the most immediate consideration is usually how much is the franchise fee and other ongoing payments like royalty and advertising fees. Although these items are an important part of the decision- making process, they are not the only items that need to be evaluated.
Read moreIt’s the Market Before Location, Location, Location
Posted by Ed Teixeira October 10, 2017
Anyone that’s worked in retail or franchising has likely heard the term location, location, location countless times. However, by placing so much attention on the location franchisors can overlook the importance of the market the location is serving. My saying is: “A good location in a poor market is the same as a poor location in a good market.” Often, poor franchisee performance is attributed to a poor location.
Read moreHow Franchise Brokers Can Distinguish Themselves
Posted by Ed Teixeira September 8, 2017
When a prospective franchisee contacts a broker, one of the first questions they ask is if their preferred territory is still available. Depending on the response, this question leads to a lengthy process of trying to match the prospective franchisee with the right franchise. We find the territory and franchise location receives more focus than the quality of the market. It’s important to remember though, that a franchise broker should also qualify a candidate, identify the best franchise from their portfolio and help complete the franchise transaction.
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