Franchise (2)
Share /
Making a Case for Mandatory Item 19 Disclosure
Posted by Franchise Grade Team July 13, 2016
The US Securities Act of 1933 (the Securities Act) requires that the disclosure filing of a registration statement with the Security and Exchange Commission and the distribution of a prospectus in connection with the Initial Public Offering for investors must contain certain financial statements and other financial information regarding the issuer’s financial condition and results of operations.
Read moreFranchisee Centric or Franchisor Centric?
Posted by Franchise Grade Team July 4, 2016
Although there may be differences in the way franchisors operate their franchise system we can assume with confidence, that franchisors intend to develop a franchise network with profitable franchisees and strong brand recognition. If there is an operational difference among franchise systems, an indicator can be found in the balance found within a franchise system. I would describe this in terms of how a franchisor interacts with their franchisees. This is not to say that all franchisors aren’t concerned about their franchisees but rather what is the operating philosophy that certain franchisors utilize. In order to more clearly define this phenomenon, I believe that franchisors usually fall into one of the following two categories or somewhere in the middle; Franchisee Centric or Franchisor Centric. Problems can arise when there is a pattern of overly emphasizing one approach over another.
Read moreStartup Franchisors Need to Preserve Capital
Posted by Franchise Grade Team June 20, 2016
After having recently attended the 2016 International Franchise Expo, I was struck by the number of startup franchisors exhibiting and extolling the benefits of their franchise opportunity and was impressed with a number of the franchise concepts. If some of these franchisors have the proper leadership and necessary capital (emphasis on capital) I believe they can develop successful franchise programs. A number of these startups are built upon a foundation of multiple corporate locations, which is an important predictor of future franchise success. However, an important requirement for a successful startup franchise system is having enough capital to fund the growth of the franchise.
Read moreTechnology Should Complement Not Replace Franchise Communications
Posted by Franchise Grade Team June 6, 2016
There is no denying that technology has enhanced the ability of people to communicate in mere seconds in a variety of ways. However, despite the advantages of enhanced communication, it does raise certain issues, especially as regards the franchise industry.
Read moreFranchisors 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 moreVital Franchise Statistics
Posted by Franchise Grade Team April 18, 2016
From time to time we’ll publish some important Statistics from Franchisegrade.com that we feel are pertinent to franchisors, franchisees and other participants in the franchise industry.
Read moreFranchisors Should Be Confident Yet Candid
Posted by Nate Riggs April 8, 2016
When presenting their franchise concept to qualified prospects, franchisor staff should balance their presentation with their confidence in the franchise and the amount of effort it takes for a franchisee to be successful. Franchisors that follow this advice have a better chance of developing a successful franchisee network.
Read moreFranchisor Franchisee Litigation: Perception versus Reality
Posted by Franchise Grade Team April 4, 2016
When considering a franchise opportunity, one of the most important items, a prospective franchisee should review is the disclosed litigation between a franchisor and its franchisees. Presented in Item 3 of the Franchise Disclosure Document, this component of the due diligence process has been recommended by franchise attorneys and franchise industry professionals for countless years. There is little doubt that the amount and type of litigation a franchisor disclosed in their FDD can provide insight into the state and quality of franchise relations in a franchise system. However, what it doesn’t reveal is the amount of litigation that’s avoided due to a franchisor and franchisee amicably resolving their differences.
Read moreProspective Franchisees Need to Know Why Some Franchisees Fail
Posted by Franchise Grade Team March 24, 2016
There can be a number of reasons why a franchisee can fail and before investing in a franchise opportunity, it’s important for franchise candidates to know the reasons why.
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 more