Category Archives: The Wire

Breakdown of important industry news and developments affecting franchises everywhere.

Franchise Financing – How to Get It

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If you’d like to purchase a franchise, but aren’t sure where to get the financing from, then you will want to read this article. Specifically in this article, we’ll discuss how to raise investment capital, what banks are looking for before they will loan money for a franchise, and alternative resources you can utilize to finance your franchise. After reading this article, your head should be swimming with ideas on how to get franchise financing.

The best way to get financing for your franchise is to have a good credit rating and a solid character. Most franchises will assist someone who they believe can run a business well but lacks the initial startup cash. Oftentimes these franchises have track records for picking successful business owners, so they have networks of investor groups who they can tap into for capital. Sometimes, your best bet for franchise financing is to get help from the franchise itself.

If that isn’t an option, then you need to know how to go about getting a loan. First of all, if you own property, that is your best bet at getting a loan. Otherwise, you might need the help of family and friends to sign on to share the burden by offering assets in exchange. Unless you have had several big loans in the past that you have made good on with your bank, then you’re going to need some assets. Unless your net worth is very substantial, don’t count on getting a simple signature loan.

If your credit is bad but you have a lot of cash on hand, then this works in your favor. My advice to you is to first find a franchisor that banks will be more apt to give money for. Investing in a new franchisor that only has 5 locations is probably not a good way to get financing from banks. If you were to invest in a McDonald’s franchise, I guarantee you’d have banks lining up at your door waiting to give you money. Before planning your business model, you need to take into account the bank’s point of view. They are in the business of giving money that they are 99% sure will be able to pay back the loan. If they have any doubt in their mind that you could go under, they will not give you financing.

Sometimes, if a franchise itself won’t help you with the financing, they will point you to the direction of someone who will. Because franchises want to sell their franchise to make money, they typically create resources that will help you in approaching venture capitalists and other people who are looking to loan money for a better than average return.

In conclusion, your best chance for franchise financing comes either from the franchise itself, the resources they can point you towards, or the loan you can get for the bank. Depending upon your circumstance, if you do it right it shouldn’t be a problem getting a loan from one of these three resources.

The Franchise Business is Alive & Strong

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New franchise opportunities are coming to the market regularly and the franchise industry is getting stronger and stronger. Franchise exhibitions are attracting many new exhibitors. Potential franchisees are coming in their droves to look at the many new & old opportunities that are eager to take their cash.

The entrepreneurial spirit is alive and kicking. People from all walks of life and different educational backgrounds are now thinking about going into business. More women are now looking to buy a franchise than ever before. Older people are joining the queue looking for part-time & full-time business opportunities for later life.

The banks and lending institutions are competing strongly to lend money competitively to new franchisees. It has never been a better time to buy a franchise. In some cases, the franchisors are even stepping in to provide guarantees to lenders to enable the franchisee to buy their franchise and set up the business.

Buying a franchise is much safer compared to starting a business on your own. Survey after survey carried out by official franchise organizations and lenders prove that people buying a franchise business are much more likely to still be trading profitably than people who choose to go into business on their own steam.

For those who are considering buying a franchise business, it is imperative that the right questions be asked to the franchisor.

How long has the franchisor been trading?
Are you a member of any approved organization?
What skills are required to operate the business?
How long will it take to recuperate capital invested?
How much turnover will I need to do to breakeven?
Who are your main competitors?
Is the market for your products growing, at a standstill or declining?
Will there be any unexpected fees?
Is there any ongoing training & support?
Which territories are available?
Do I have an exclusive territory?
What assurance do I have that my territory will be protected?
Are there any ongoing fees?
How long is the training?
How many franchisees do they have?
Can I contact all or some of your franchisees?
How many are trading successfully?
How many franchisees have failed in the past?
Why did they fail?
How are disputes handled?
How is marketing done?
What will be my contribution?
What is the procedure in selling the business?
What are the fees involved in selling the franchise?

Bear in mind that a good franchise opportunity will only work if you are prepared for the hard work involved in running a business. It is absolutely vital to find a business that will stimulate you for years to come. Far too many people choose an opportunity primarily based on profitability, rather than choosing the right business for them.

The franchise agreement is the cornerstone of your business and, as such, demands close scrutiny. Legal advice should always be sought to ensure that it is evenly balanced. Some franchise agreements that I have seen are far too one-sided and give more protection to the franchisor than the franchisee.

A final word of caution, even the best franchise will struggle in the wrong territory and marketplace. Always get independent advice from professionals to determine if your ideal franchise opportunity will work in your area.

How to Research Low Cost Franchises

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There are many franchise opportunities for people with small budgets. A low cost franchise does not necessarily mean a business with low income potential. Trawling through the franchise market, I have discovered that some of the best franchises only need a small initial outlay.

In some cases it is possible to recover the entire franchise fee in the first year of trading. With many of these businesses, you do not need any premises as you can work from home. This greatly reduces overheads and enables you to reach profitability very quickly.

Another very important benefit of low cost franchises is that some of them can be run full time or part time. This is ideal for people who do not have large monthly outlays and only require a small income to supplement their existing business. Just be very careful when analyzing any new business opportunity. If you cannot see a market for the product then it probably does not exist!

One low cost franchise opportunity specializes in cleaning carpets. They use extra powerful industrial vacuum cleaners to remove 80 percent of the dirt and dust in carpets before applying specialist chemicals which dissolves most of the oily and greasy particles that still remain. Their specialist equipment then removes almost all of the fluids used in the cleaning process. This means that your carpet is bone dry within a couple of hours.

Householders benefit because they get their carpets cleaned to a high professional standard at a reasonable cost. This then leads to repeat business possibly every couple of years for the franchisee and his reputation spreads quickly by word of mouth. The franchisee also benefits from professionally created marketing material including leaflets and business cards.

This business also benefits from positive cash flow as the franchisee gets paid for his work on completion and he receives generous term from his suppliers for his cleaning materials. The ideal franchisee for this company is a person who is still relatively strong and does not mind the hard physical work involved.

Another franchise for people with low budgets specialize in bringing single people together. Again this business can be managed from home. The franchisee has to follow a predefined local marketing programs that generates enquiries. This is then followed by a professional consultation so that a suitable match can be found.

This franchise requires people who have decent communication skills and are very presentable. This business is ideal for people who sincerely like to help other people and do not mind networking. The one downfall of this business is that if you do your job properly then you will not get any repeat business although you might get referrals!

Another interesting business opportunity is providing asset finance (lease & hire purchase) to local businesses. Again you do not need expensive premises (and can possibly work from home) but an aptitude for basic arithmetic definitively helps. If you already have many business contacts then this might be right up your street!

This business targets a very specific niche in business and has well proven marketing strategies to help you identify your most lucrative clients. The best factor in this business is that you can generate a lot of repeat business with the same client and if the business is handled correctly then most of your new clients will be generated by referrals.

In this type of business you will most definitely have to be prepared to learn new skills and some cold calling is required. From the point of initial contact to actually generating new business might take months and in some cases years. Patience is a virtue in this business.

My advice to anyone thinking of buying a franchise is:

-Do not just think about the earning potential.

-Find a business that suits your personality and lifestyle.

-Always take professional advice before embarking on a new business.

-Be prepared to “go back to school” and learn new skills.

In short, if you have a small budget, are prepared to learn new skills and choose the right niche, then one of these opportunities could work for you.

David Schwartz of Franchise Clique Announces New Daniel Island Headquarters to Accommodate Increased Growth

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Charleston, SC (May 31, 2018)— Franchise Clique, LLC, a leading franchise recruitment and lead generation company serving the franchise industry, today announced it has moved into new corporate offices at 133 River Landing Drive in Daniel Island’s growing business district to accommodate rapid company growth.

Franchise Clique was founded in 2009 in Charleston, South Carolina. The company offers lead generation and business development services for franchises and businesses of all kinds. It is privately held and boasts that its leadership team has decades of combined experience in lead generation.

Franchise Clique, LLC New Corporate Headquarters

“Going into our tenth year this is a monumental time for Franchise Clique and is the start to large company improvements that have the staff and customers eager to benefit from the unique opportunities this expansion provides,” said Franchise Clique Chief Executive Officer David Schwartz. “Franchise Clique’s new office space provides an updated and healthier work environment for existing and incoming employees while also leaving room for even greater company growth in the future.”

The new space reflects Franchise Clique’s proactive company goals that are meant to bring customers top-notch service while maintaining a high level of efficiency.  The new location is near Daniel Island’s public dock and walking/biking trails which are walking distance from multiple restaurants and shops.  The new office provides each employee with a personal office space which is a drastic improvement from the cubicle-style space from before.

CarePatrol Franchising System Grows

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CarePatrol, the pioneer of the senior living placement industry, recently bought their competitor, Assisted Transition. CarePatrol, founded in 1995 by a social worker after observing the personal trauma experienced by a family whose loved one had been placed in the wrong type of assisted living facility, today helps families make safe choices for their loved ones across the United States.

The recent deal will give CarePatrol approximately 150 franchises by the end of the year, after converting about 60 into the CarePatrol system. CEO Chuck Bongiovanni is excited for this purchase and transition for the company. With his social worker background, he prides himself in using the social work model to clients at CarePatrol. Client phone calls are answered by Master’s level social workers, rather than “the typical call center employees.”

Franchisees must receive their national certification as a certified senior advisor to maintain their franchise license. The purchase makes CarePatrol 10 times larger than their nearest competitor in the assisted living placement industry.

Want to learn more about CarePatrol? Learn more over on our site!

Nonprofits in the Franchise Industry

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It may surprise you to learn that Nonprofit groups around the country own franchises, like Blimpie Subs and Papa Murphy’s Pizza. Nonprofit groups, in a more recent trend, are purchasing franchises, and using that revenue from the outlets to support their social missions.

For example, Affordable Homes of South Texas, a nonprofit that constructs houses for low-income families, opened a Blimpie sub shop in downtown Weslaco, Texas. Affordable Homes of South Texas turned to exploring new options for funding when there was a drop in federal housing grants earlier last year.

Other charitable organizations view it as an opportunity to train and employ people in their community. The Dale Rogers Training Center, an organization dedicated to providing jobs to over 1,100 people with disabilities annually, recently opened a Papa Murphy’s pizza franchise near the charity’s base in Oklahoma City.

Customarily, national franchise brands have been contracted solely with individuals, but that is certainly changing. According to the recent NY Times article, more than a dozen national chains since last May have sent representatives “to explore franchising opportunities with nonprofit groups in SourceAmerica, a network of 1,300 organizations serving the disabled, at its annual meeting in San Antonio.”

Do nonprofits own a franchise in your area? We would love to hear your comments on this franchise trend!

Guest Blog: Top 3 Franchises of 2014

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Upside Group Consulting is this week’s featured blog post! Upside Group provides step-by-step coaching and consulting to franchisors seeking to increase franchise units sold by developing a solid branding platform. This week, as our guest bloggers, they talk about their top 3 franchise picks for 2014.

The Top 3 Franchises of 2014

From fitness to frozen yogurt, the franchise industry has always reflected the ever-popular trends that permeate the business world. And while some concepts seem to last longer than others, it should come as no surprise that it can be hard for many business owners to decipher which trend is lasting versus which is simply fleeting.

While unfortunately, there’s no foolproof plan, there is a way to test the franchise waters: by looking to this year’s most successful franchises businesses. Selected from the Entrepreneur 2014 Franchise 500, here is a list of three of the year’s top franchises – and just what exactly you can learn from them:

1. Anytime Fitness: Anytime Fitness combines access with affordability to appeal to both customers and employees alike. From New Year’s resolutions to a multitude of 24-hour locations, gyms like Anytime Fitness successfully capitalize on the growing trends of health and convenience.

2. Hampton Hotels: Coming in at number two, Hampton Hotels places an impressive emphasis on fostering a franchisee support system. With ongoing support offered through use of newsletters, meetings, and security procedures, in addition to a multitude of marketing support, Hampton Hotels works hard in every aspect of its business plan to promote franchisee success.

3. Subway: Since 1965, the successful sandwich shop has transformed itself into a powerhouse thanks to an emphasis on solid marketing. By taking advantage of a wide variety of different tactics – from spokespeople to healthy living initiatives – Subway combines the ease and convenience of a fast food establishment with the attractiveness of an on-the-go lifestyle.

Whether your franchise has been growing steadily for years or you’re just beginning to consider the idea of expanding, by looking to this year’s top franchise businesses, you can take away a series of important lessons that can help you find success – from management to marketing.

Learn more from 2014’s top three franchises by contacting an experienced franchise consultant at Upside Group today.

Setting New Year Resolutions For Your Business

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I read a great article last week on Forbes, here. It got me thinking… we often set personal goals for the new year (which is great – January is a good time to reflect on the year’s past and prepare and set goals for the year to come,) but not so often, perhaps, do we set goals for our businesses.

The author in the Forbes article, Drew, mentions great overarching goals like following a content marketing plan, utilizing apps that can make life easier, and showing customer appreciation. The ways you go about fulfilling your goals is obviously entirely up to you. I have found in my personal experience with New Year’s resolutions that it is easier to break goals down into more detailed “mini-goals”, so to speak.

For example, if your business goal is “to have a greater social media presence in 2014”, it may be easier to make your resolution something a bit more tangible – “We will post 200 Facebook statuses this year” or tweets, or Instagram pictures, or blog posts or… you get the point. Having a more specific goal, in this case a specific number you will reach, will probably help you better keep track of that progress and feel success at the end of this year when you reach your goal.

What are your business goals in 2014? Share them in the comments below!

The Top 10 Menu Trend Predictions for 2013

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According to Pantone, the “it” color of 2013 will be emerald green. But that’s not the only trend worth considering– what about the “it” menu items diners are sure to see on their menus next year?

 

A survey of over 1,800 professional chefs produced the National Restaurant Association’s list of top ten menu trends for 2013. The top ten list indicates that consumers have four things in mind: cost, where their food comes from, gluten and their kids.

 

Consumers remain concerned about food costs while eating out, as suggested by the prediction that new cuts of meat will continue to appear on menus. These new cuts of meat, like the Denver steak, are lesser-known and less expensive but have become more popular as tough economic times have eaten into consumer’s disposable income.

 

The locovore movement continues to grow as more diners look for locally grown produce, locally raised meat, and sustainable seafood. Thanks to the popularity of cooking shows, food magazines and the rise of the celebrity chef, consumers are increasingly aware of how food appears on the dinner table– and they want it to be in an environmentally conscientious manner.

 

Gluten-free items began appearing on menus a few years ago– thank you Miley Cyrus– and, if anything, have increased in number and popularity. Pizza franchises like Domino’s offer gluten-free crusts in an effort to include those who have Celiac disease or a gluten sensitivity.

 

Many of the top trends carried over from last year, including children’s nutrition and locally sourced produce.

Do you think the predictions for 2012 proved to be true? Do you think 2013’s top ten list is missing a trend?

3 Things to Know This Afternoon

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CBS Miami.com — Veterans returning home from Afghanistan and Iraq are being courted by franchises at the franchise expo in Miami Beach this weekend, thanks to program Vet Fran.

CNBC.com — Read why Baby Boomers who just aren’t ready to retire are perfect for franchising.

Inc magazine— Missouri’s Sam Graves, chairman of the House Small Business Committee, has outlined what he’d like to see from the President on behalf of small businesses.

AMEX Excludes Franchises From Small Business Saturday

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“With every dollar we spend, we cast a vote.”

 

My economics teacher used to repeat this whenever the question of spending came up. If only it really were that simple. She was right, though, in that with every purchase we make (and don’t make) we vote businesses on and off of America’s economic island. The holiday season is a retailer’s chance at surviving the tribal council.

 

As I’m sure many of you in the franchise industry have heard, American Express (AMEX) excluded franchises from participating in Small Business Saturday this past weekend on November 26, 2011. While many are understandably upset about the exclusion of their business from AMEX’s economic initiative, the situation opens the door to several important questions, including but not limited to where franchising fits into America’s spending psyche.

 

Many blogs, articles and forums have focused how this happened and how it can be remedied next year. I’m personally more interested in why it happened. If the franchise industry can figure out what inspired AMEX to exclude an entire industry, in which many businesses in my opinion qualify as small businesses, perhaps the thought process behind the decision can be resolved as opposed to simply the situation.

 

First and foremost, while the success of fast food franchises has certainly helped the industry as a whole, it hasn’t helped the industry’s reputation as a small business job creator. The general public most likely doesn’t understand what franchising truly entails. The term “franchise” often conjures images of McDonald’s golden arches, not mom and pop independently owned businesses.

 

The term “franchise” should first make us think of an agreement rather than a fast food restaurant. For those who don’t know, the franchise agreement is made between two parties: the franchisor and the franchisee. The franchisor lends his trademark or trade and accompanying business model to the franchisee who in turn compensates the franchisor with a royalty fee, and often an initial fee, for the right to do business under the franchisor’s name and use of the business model. In some cases, but not all, the franchisor takes responsibility for creating marketing materials and implementing marketing strategies to further the success of the franchise. That being said, marketing isn’t free and may factor into the franchise’s royalty fee.

 

Aside from the extraneous fees, franchises aren’t so different from small businesses. They are are owned and operated by the same kinds of people as small businesses. They serve and employ the same local residents. Lately, they’ve been facing the same economic challenges. It’s understandable why so many franchisees and franchisors are upset.

 

We’re all, consumers and businesses alike, pinching pennies right now. There certainly isn’t much profligate spending happening this holiday season. The Wall Street Journal hinted that only 29 percent of small businesses are able to give year end bonuses this year. As I said before, every dollar we do or do not spend really matters.

 

From what I’ve read and heard, marketing has been another issue within the franchise exclusion situation with AMEX. AMEX’s Small Business Saturday offered $25 dollar credits to shoppers who shopped at qualifying establishments, those independently owned and operated businesses that don’t have the budget for national marketing campaigns. These credits didn’t extend to those who supported chains or franchises during Small Business Saturday.

 

Then again, it’s an understandable mistake. For those of us who are part of the franchise industry that may be difficult to digest. While we recognize the hard work and long hours franchisors and franchisees put into their respective roles, many outsiders can’t see beyond the brands and logos we have pushed to make mainstream.

 

It is my hope that next year AMEX helps the franchise industry’s small business owners financially by including them in Small Business Saturday. I also hope AMEX helps the franchise industry’s reputation by putting a Main Street face on mainstream logos, so everyone, including industry veterans, remembers who’s behind the cash registers and counters.

 

 

What We’re Reading (Thanksgiving Edition)

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MASHABLE- Domino’s Pizza has put the pizza making in the hands of its consumers with a new app for Apple’s iPad. The game-like app simulates the pizza-making process and allows users to order their pie and track its delivery in real-time. – Todd Wasserman

 

CNN MONEY- Flip Flop Shop franchisee Scott Santy’s love affair with flip-flops served him well with his store’s Las Vegas location. Santy’s store has surpassed the $1 million mark, especially exciting considering his Flip Flop Shop location opened during the height of the Great Recession. – Kristine Hansen


 

BLOOMBERG BUSINESSWEEK– President Barack Obama signed into law a measure providing tax credits to companies hiring unemployed veterans. The law also repales a requirement that federal, state and local governments begin withholding 3 percent of payments to contractors in 2013. – Roger Runningen

 

ENTREPRENEUR– J.J. O’Connor’s paralyzing hockey accident hasn’t stopped him from entrepreneurial success. The 33-year old first realized franchising was for him when he was 15 working for a friend’s father’s convenience store. Today, he owns his own Sports Clips franchise. – Dinah Wisenberg Brin