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Franchisee 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 moreRecords Retention: What To Do As A Franchisee
Posted by Franchise Grade Team July 13, 2015
As a new franchisee, one of the first things you’ll be doing is amassing a physical and virtual mountain of paperwork – documents which comprise the vital records required for your new business. In fact, creating these records begins as early as the Franchise Disclosure Document (FDD) you receive from the franchisor, and the resulting Franchise Agreement (FA) that seals the deal between you and the franchisor. These two are but a small component of the franchise records you will be required to maintain during the entire lifetime of the franchise and beyond.
Read moreDoes an FAC or IndFA Add Value In A Franchise System?
Posted by Franchise Grade Team May 28, 2015
A franchisee advisory council or an Independent Franchisee Association may provide value in other ways such as engagement with the franchisor, preventing costly litigation, a forum for dispute resolution, sounding board for the introduction of new products or services by the franchisor and a vehicle for assessing the attitude of the franchise network.
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 moreHow Item 19 FPRs Are Shaping The Franchise Industry
Posted by Franchise Grade Team May 7, 2015
Item 19 Financial Performance Representations (FPR) are a key component in any prospective franchisee's due diligence process. FPRs help them to analyze a franchise investment for the opportunity of a return. They are critical in constructing a pro forma income statement and cash flow projections.
Read moreWhy You Should Talk With a Franchise Lawyer Before You Buy a Franchise
Posted by Franchise Grade Team April 15, 2015
So you’ve decided to pursue a franchise opportunity and have done some preliminary research to determine if it is a good fit with your business goals and lifestyle. You’ve even identified where you’ll get the money to make the purchase. Before you proceed, consider the issue of “Due Diligence” – doing all the research and completing myriad tasks to ensure your success as a franchisee. One of the most critical due diligence tasks you can do is to talk with a good franchise lawyer BEFORE you make the purchase. Why?
Read moreTraining Resources For Franchisees and Business Owners
Posted by Franchise Grade Team April 8, 2015
Nearly every business in the franchising industry has its own vaunted pool of industry-specific “training resources”. For example: The restaurant industry has the National Restaurant Association (www.restaurant.org). Their training programs cover everything from training for the general manager to the people who actually prepare and serve the food. But there are also training resources for those who may not have decided on an industry to jump into; resources that can give you a bit more insight into what it takes to become a franchisee; to help with your decision-making. A couple of favorites:
Read moreResearching Vendors For Your Franchise
Posted by Franchise Grade Team April 3, 2015
Another of the many due diligence topics you need to explore and research for discussion with a potential franchisor is Vendors/Suppliers. This is especially true for most business in the franchise industry. All of them require a solid, reliable network of vendor contacts. These are the people who will be providing the initial and ongoing products and services to your franchise.
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.
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