Types of Business

Griffiths University recently reported that the overall number of franchises fell between 2012 and 2014 largely because of small and unprofitable franchise closures. This wave of closures, in my experience, poses a real "uneasiness" to both aspiring franchisors and franchisees. But why is this happening? Is it because the franchisor's business model is not appropriate for franchising? Or maybe the business owner does not have the necessary skills to operate a franchise system? More importantly, will this mean that the odds of being able to expand at this particular time are highly stacked against you? It is worth noting that over the years, many successful franchise systems did start with only one outlet - Subway, Donut King, McDonald's among them. Most new franchise groups start with one or very few outlets. And other smaller franchise groups operate with a small number of outlets and do not wish to grow. Franchises such as Bushman's Bakery, which is...

Purchasing existing businesses for sale from someone who is looking to cash out of their business or retire is a great way to become an entrepreneur! You buy an already-proven and profitable business, and then use your skills and acumen to grow it further. However, finding owners who want to sell is not always easy. Consider this your guide for finding and sizing up good businesses to buy. Business Opportunities Rarely Advertised Most business sales are rarely known, largely because companies do not want the word getting around to their employees and customers, who might panic about the change. Instead, most business owners looking to sell are left with no choice but to wait patiently for a qualified buyer or use a broker to market their deals. Call-Mail-Call Often small business lawyers may know of a client who wishes to sell, however, it is typically best to focus on a particular industry and just contact owners directly. To do this, simply start calling business owner...

Franchising Corporations need to maintain an iron fist when it comes to certain things to maintain absolute integrity of the system; Consistency, Quality, Cleanliness and Customer Courtesy or Service. Ray Kroc in his book; "Grinding it Out" made that point perfectly clear, some called him a hard ass on the details and indeed it served him well and turned 11,000 franchisees into millionaires along with some 1500 executives early on. That, of course, is one side of the game and it is difficult to maintain control of such important quintessential items in an age of over regulations and constant lawsuits. The best strategy we have found after surveying many franchising companies at; Franchising.org is to have a strong franchise relationship policy, which enhances communications and prevents lawsuits, as litigation is the lowest form of communication. In my franchising company; CarWashGuys.com we had a specific chapter in our Confidential Operations Manual, which address...

Last week's question from Anthony R. on how to choose the franchise that would best fulfill his life-long dream of owning his own business sparked several emails from other readers wanting to offer their two cents on the subject. Some folks offered helpful insights and suggestions on how to pick a franchise and a few things to watch out for, while other emails came from current franchise owners asking me to help them sell their operations to Anthony R. Hmm, it sounds like it's time to update the old business card once again. Tim Knox: Franchise Broker At Large... Who knows, maybe I can franchise the concept. Last week I promised we'd take a closer look at a few of the things you should look for when considering a franchise opportunity. Keep in mind that there are thousands of franchise opportunities that range from the low-end opportunities available for a few thousand dollars to the high-end franchises that cost hundreds of thousands of dollars. The difference ...

Q: I will be retiring this year at age 60 and intend to fulfill my lifelong dream of owning my own business. I'm too old to start from scratch, so I'm looking at several franchise opportunities, including fast food, auto parts, and accounting service. What should I consider before choosing one? A: Congratulations on the retirement, Anthony, and on the new business venture. As the old adage goes, when one door closes, a drive-through window often opens (or something like that). Given the franchise types, you are considering the first thing you should ask yourself is whether or not you want to spend your golden years cooking fries, selling mufflers, or doing taxes. Franchising can be a great way to start a business career, but you should make sure you're not just trading one job for another. Unless you plan on being an absentee owner, which I highly discourage, you are going to be working in the business just as an employee would, so be sure the business you choose...

Franchising Trade Journals do not do well, because today with all the industry regulations only about 1800 active franchises actually exist in the US. Down sharply over the past five years. Why? Over-regulation. Now you have a Bank Cooperative, which owns a company that collects data, FranData of Uniform Franchise Offering Circulars, which are the industries required disclosure documents to new franchise buyers. The company sells it to attorneys and to competitors of which many probably are financed through that bank. My God can this be real. Then they work with industry Trade Journals to do Top 50 franchises lists, but to be qualified to be reviewed they, of course, wish to see your UFOC; Uniform Franchise Offering Circular So what is the deal with this purported 50 Fastest New Franchise List? Is it real? Does it matter if it is? After all once a Franchisor decides to participate they have just given their life's work to someone who will sell the data including the names ...

Jim and Sally run a successful auto business, which they have built up over two decades and have expanded to three stores and many of their friends keep saying, "You should Franchise." They think about this for about five years read a few books, like "Franchising for Smarties The "E-Myth", "The Franchising Bible" and many others on the shelves of the new big book store in town with the coffee shop inside. They finally decide that it makes sense especially as they have friends and loyal employees who wish to be associated with them and even own the first franchises. So they set out to franchise. They visit an attorney since that says in all the books to do. Most books about franchising are, at least in part if not whole, written by S2D2s (lawyers: S2P2s; Self-Serving Parasites of Planet) anyway, so they take that advice and visit an attorney. The S2D2 explains the MUD and helps by charging them a good chunk of change; $35,000 to prepare a boiler...

Disclosure laws in franchising are supposed to help the consumer. They don't. The FTC, which oversees franchising has in fact created a rule, which makes 5 lb. Disclosure documents for franchise buyers, which is so huge that no one ever reads it. I know when I personally meet a franchise buyer whose application form is approved and hand them a UFOC. Uniform Franchise Offering Circular with attachments and watch their jaw drop and then their hand drop when they clutch it in their hands (due to the weight of the 155 to 200 pages), I see a blank look. I apologize for every time for my unreasonable government and the US legal system for the rules. I tell them it is to protect them and put up my shoulders and they usually say something like "Yeah Right." A franchise buyer who wants to buy a franchise is not going to read and expect to understand every clause, nor are most franchisors going to enforce every clause. You can't, you would not have any franchisees left. ...

Fast Moving Consumer Goods or the FMCG sector is a place where goods are sold at a relatively low price and include products that sell out much quicker than other products. They mostly keep perishable items as opposed to durable items. For example, packaged foods, beverages, toiletries, over-the-counter drugs, etc.; whereas durable items include kitchen appliances, textiles, items that can be used for many years. FMCG goods mainly composed of items that have a low shelf life. Because it includes items that are required by masses in their daily lifestyle and because this sector has a huge demand, this sector must divide it work amongst various other short segments. The major segments in the FMCG sector are Manufacturer - Packaging - Sales and Distributorship - Retailer/Wholesaler. A distributor is someone who will ensure that all your products reach the right people. Whether it is business to business or business to personal. In any emerging market, as demand for a product increa...

Are you someone who is considering purchasing a franchise? While a lot of people consider owning a franchise, not many take the time to do a proper calculation of a franchise cost. It turns out that several factors affect the final cost of the franchise which means that each company will be different. However, no matter which restaurant you're interested in, there are a few common costs that are the same in each situation. This includes the franchise fee, all build-out costs, contractor fees, professional fees, signage, and your inventory. It also requires that you have enough working capital to open and stay in business until the business can actually support itself. Let's take a moment to further discuss the common costs that come along with a franchise opportunity. 1. Franchise Fee Every company will require that you pay the initial franchise fees. These fees cover the cost of training, support as well as site selection. The benefits (or items) that are included in ...