Category Archives: Franchising 101

How-to articles on the basics of franchise ownership.

Franchise Financing – How to Get It

Posted on by

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

Posted on by

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

Posted on by

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

Posted on by

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.

Franchise Clique Recognized by the Franchise Brokers Association as Vendor of the Year

Posted on by

Last week the executive team at Franchise Clique traveled to Orlando, Florida as an Emerald Sponsor for the Franchise Brokers Association’s Annual International Franchise Brokers Conference, and what a surprise, we were recognized as the 2015 Vendor of the Year! The coveted award was presented at the expo among the franchise and business opportunity industry’s most recognized and respected names, signifying the impact made by Franchise Clique in the lead generation industry.

“We have always believed in our drive and commitment to being the best. FBACon4We are honored that the Franchise Brokers Association recognized this fact. We are so grateful to be involved with such an incredible organization.” Said Owner|CEO David Schwartz when asked about Franchise Clique’s rise to greatness. When asked what was next Schwartz replied, “Winning Vendor of the Year propels the Franchise Clique team to strive to new heights.”

Franchise Clique received the award for Vendor of the Year in a year that included many accomplishments. Amidst new innovations and exciting personal changes the company has continued to grow and flourish through facilitating connection among inquiring franchisee candidates and the brokers and concepts they are looking for.

Franchise Clique would like to thank all the brokers and vendors, who gave their time at the FBA Conference, as well as the members of the FBA, which, as an organization, shines a light on all the advantages that this organization has to offer.

 

 

 

 

 

The Healthy Psychology of Franchise Relationships

Posted on by

Franchising World Magazine recently wrote a piece on the healthy psychology of franchise relationships. The author Greg Nathan focused specifically on the how franchisees and franchisors feel about being legally and commercially connected, “It incorporates trust, commitment and the informal expectations people have of each other. We would call this the “psychological contract.” Nathan expresses that this psychological aspect of the franchise relationship can be a potent source of competitive advantage by those who recognize its power, as well as a source of misery for those who deliberately or inadvertently ignore it.

Nathan says that in order to achieve a healthy franchise relationship, there must be high levels of franchisee advocacy, commitment and engagement.

The team of psychologists at the Franchise Relationships Institute has been studying the factors that drive advocacy, commitment and engagement for more than 20 years. Nathan’s article includes the entire seven principles (which we encourage you to check out here), but we have chosen three of our favorites:

  1. Leadership messages should be focused on promoting optimism. The franchisor has an important role to provide franchisees with a sense of confidence in the future. Optimism drives positive attitudes, and in return, positive behaviors. Despite businesses facing significant marketplace or commercial challenges, many have managed to maintain healthy franchise relations because franchisees have confidence that their franchisor is taking them to a better place.
  2. The way in which changes are introduced is extremely important. A poorly managed introduction of new initiatives is said to be a common source of franchisee dissatisfaction. The loss that comes with change, financially, or with identity, status, certainty, convenience or relationships. Communication is key during these times of change, and will impact franchisee commitment to change.
  3. It is important to encourage connection and pride. A sense of belonging is a string that extends through seven of the principles that the Franchise Relationships Institute offers – not surprising given that the simple need to belong is a powerful human instinct. Having a sense of connection to the brand and culture, networking with other franchisees, and interacting with customers and staff is powerful for the business. The way group meetings and conferences are structured is important as they should maximize small group interaction, allowing people to get to know one another.

How to Embrace Change

Posted on by

Whether you are a current franchisee, a future franchisee, or even just a fan of our blog, chances are that you have experienced major changes in your workplace. Changes can cause great anxiety, especially if you are forced to adjust the way you have always approached a situation. Changes in process are often the best way to enhance productivity in business, yet the transition can prove to be troublesome.

We wanted to take this week’s post to discuss dealing with change and the growth contained in the process of change. Most of us operate under the illusion that life remains constant, but in reality, it is always changing. Your business, if it’s growing, is always changing, too.

Based on a study by the Center for Creative Leadership (CCL), the number one issue facing senior leadership today is “dealing with complex challenges.” Furthermore, studies say that the number one most important competency in shortest supply today is dealing with change. The CCL defines challenges as problems that:

  1. Lack a clearly defined solution
  2. Remain beyond an individual’s or single group’s ability to overcome
  3. Have significant strategic, cultural, environmental, and marketplace impact
  4. Create a paradox of reflection and action
  5. Render traditional solutions ineffective
  6. Demand flexibility and agility as challenges shift seemingly overnight

Being open to change and the lessons within change is no small task. Positive change requires letting go of old patterns and taking a fresh approach. In business, and in life, we must go beyond our preconceived ideas. We have to embrace, rather than resist, the change.

Change in an organization calls for a great deal of communication, specifically from the leaders in the group. What are some important lessons that you have learned about change from your business? Leave comments below!

Traditional Media and Content Marketing

Posted on by

It probably comes as no surprise that the printed newspaper and magazine industries are shrinking. Less and less people are reading printed articles, and more and more are turning to online media for their news. It is interesting to learn in recent studies that the trust of your targeted audience may be diminishing as well. Recently in a Gawker.com article, an executive from Chipotle said that Millennials “are skeptical of brands that perpetuate themselves.”

There is a decreasing number of future customers who have no desire to see commercials or ads that they don’t believe are true. Traditional marketing strategies as a whole just don’t seem to be getting the job done anymore when it comes to younger generations. With social media, we are bombarded daily with a surplus of news, opinions, and advertisements. The key to successful public relations strategies now is understanding what to share and how to share it.

Which leads to content marketing.  Content marketing is created when a company develops its own content in the form of articles, blogs, or videos featuring the business. The content must be professional, honest, and not self-serving. Bloggers, specifically, are becoming increasingly credible and popular influencers and can help drive products while not appearing as self-promoting as other forms of advertising.

What is your business doing to reach you target audience? Leave comments below!

How Creative Initiatives Can Fuel Growth

Posted on by

Through challenging economic times, franchisors have developed new ways to fuel growth and development in their business. When it comes to finding qualified, well-funded prospects for franchising, usually portals, franchise consultants, and advertising & networking all are strong factors in growing a franchise. Lead-generation sites, like Franchise Clique, play a huge role in connecting qualified clients to franchisors and consultants. Beyond these necessary tactics, franchisors are branching out further, and bringing creative ideas to development.

From the patterns I’ve observed, this is happening in several ways. Parent companies of franchising brands are now taking new approaches to their stores – in locations that offer opportunities for food-court style eating, such as hospitals, malls, and airports where normally one brand would be placed in a store, developers are bringing three or four of their brands to the same location. Both dual-brand storefronts and co-branded store partnerships are certainly on the rise in the franchising market. Providing two goods or services in one location offers customers more of a variety, and targets a wider range of customers altogether.

In addition to multi-brand locations, I continue to see a growth in social enterprise within the franchise industry. Non-profit organizations such as Affordable Homes of South Texas, Inc., Dale Rogers Training Center, and the National Christian Foundation are all teaming up with major franchises like Great Clips, Papa Murphy’s, and Blimpie, bringing franchisee profits straight to these organizations.

These partnerships are doing well because they solve fundamental issues that both franchisors and non-profits face. On one hand, franchisors benefit because they are launching a new location, which is owned and managed by a non-profit group that possesses strong and favorable community reputation, while on the other,  the non-profit benefits because it is buying into proven concepts and corporate office teams who are invested in their success. It truly is a win-win.

What are other ways you have seen franchisors creatively fuel growth? Leave your comments below!

Three Tips for Growth in a Sluggish Economy

Posted on by
  1. LEADERSHIP IS PRICELESS.
    Any growing business needs a strong leader. This holds true especially when a business is struggling. Senior management should play on the strengths of other team members to reinvent old ways and pull from outside sources to evaluate what is and what is not working. As a leader, it’s important to be transparent and honest about the financial stability of the system, yet remain optimistic that positive changes can be made to face economic conditions head on.

2. ACT LOCALLY
National and global goals are certainly something to aspire to; however, market share is won at the local level. A successful and motivated franchisor helps franchisees get active with local businesses, schools, and charitable       organizations. Having a strong brand in a local market can build reputation and lead to potential growth opportunities.

3. LOYALTY IS EVERYTHING
Customer loyalty is crucial during tough financial times. Along with a high-quality product, it is just as necessary to give your customers an awesome experience, consistently. To provide loyalty incentives to your customers is a win, win. For example, this year, the Marco’s Pizza franchise received more than 27 percent of new restaurant applications from Marco’s Pizza customers. Additionally, 30 percent of applications came from referrals of existing owners who sought to share franchise opportunities with ambitious entrepreneurs.

Thanks to Franchising World Magazine‘s January issue for some of this week’s content! Check out more here!

Being Mobile-Friendly and Why It’s Important

Posted on by

Mobile communication is now an imperative part of a business’s marketing strategy. People are using smart phones and other mobile devices now more than ever. They are using their mobile technology to find shops, restaurants, and services in their area, and it’s important that when they search, they find your business.

If your website is not mobile-friendly, it will most likely lose you business. Anyone searching your business from their smart phone wants to quickly and conveniently access your contact information, purchase your products, or both. If the customer can’t find information, or the layout of your site isn’t compatible with his or her technology, they may become frustrated and bring their business elsewhere.

Additionally, your emails and newsletters must also be mobile-friendly. If people are reading your communications on-the-go, they want to be able to read the email free of excessive scrolling, pinching, and squinting at their touch-screen device. An annoying-to-read email will quickly be sent to the trash bin, or worse, unsubscribed from.

By creating a shorter, more condensed version of your website for mobile-users, you keep current customers happy and new customers coming. You can find more information about making a mobile friendly site in Franchising World’s current online magazine, found here.

Get LinkedIn: How Franchise Professionals Should Be Using The Networking Site

Posted on by

This month I have been paying a closer attention to the way in which franchise professionals utilize social media platforms. Specifically this week, I wanted to take a closer look at how LinkedIn is being used in the franchise industry. LinkedIn is a hot topic in the social networking realm right now. Everyone wants to know how to best leverage LinkedIn for their various needs. Franchisors, franchisees, and suppliers all see opportunity in the networking site, but many question how exactly they can use the platform to their benefit.

With a database of more than 238 million individuals, LinkedIn provides a great pool of prospective franchisees and customers. How can franchise professionals tap into this resource? They can start with their profile page. A new article in Franchising World’s November issue gives some tips about how you should go about revamping your page. First, look at your page from an outsider’s view. Does it read like a resume? If you’re seeking employment, that is one thing. But if you are not, it may be time to rewrite your profile to target whichever prospect or customer or prospective employee that you would like to engage.  People are using LinkedIn to better know you. You must actively choose a message: what do you want people to know about you and your company?

The article says that as you read through your LinkedIn profile, you must ask yourself whether your profile answers these questions that the reader may have:

–          Should I pay this person money?

–          Can I trust this person?

–          Can this person help me with my objectives (franchise ownership, employment, doing business)?

–          What benefits does this person and his company provide?

–          Does this person have the ability to help me make a significant decision?

–          Does this person look trustworthy and credible?

 

What is all really comes down to is making your profile a welcome mat to your company. You want to seem approachable, communicable and transparent. People want to do business with people they like and feel at ease with. Let your LinkedIn profile be a peak into your company’s missions and future goals. What LinkedIn tips do you have for fellow franchise professionals?