STARTING A SPECIALITY COFFEE BUSINESS - DIY OR FRANCHISE

So, You've been bitten by the coffee bug. It all began when you walked into a Starbucks and said to yourself "I can do that!". You looked at a shiny machine that pushed steam through something you learned was called a 'portafilter'. You saw syrupy looking coffee called 'espresso' slowly stream into a cup that was then filled with steamed milk. The barista added a flavor or two or maybe nothing, put a lid on it and asked for more than three dollars for a drink you knew cost a mere fraction of that. You did the math and thought, "No wonder they've made billions of dollars!" On top of that, the relaxing ambiance, the happy customer who just treated herself to a hot and tasty beverage (or maybe a cold one) all added up to something that made sense and got you excited to start your own coffee business.

Yes, Starbucks is an amazing success story and following their model or something like it appears fairly simple and very profitable. In fact, the gourmet coffee business is one of the fastest growing in the food and drink industry. In more than a few magazines, starting a coffee business has been suggested as one of the best choices as a successful business to start. Compared to other food and drink businesses, the startup costs are one of the lowest. Training is relatively simple and while espresso machines aren't inexpensive (a typical three group espresso machine can cost around $15,000 and up and a grinder runs a few thousand) machines with good reputations (the best are made in Italy) will last for many years without needing to be replaced if they are properly cleaned and maintained.

The biggest issue to consider isn't what brand of espresso machine to buy or whether you will buy coffee beans from a roaster or roast your own. The number one consideration is whether you will create your own business or buy a franchise. After you've logged dozens of hours on the internet, bought a few books, read dozens of magazines and worn out your walking shoes at a couple of tradeshows like Coffeefest or SCAA, it might seem that you're ready to do this without help. But don't be fooled. There is more to do than you can imagine in getting a coffee business off the ground and franchises are a fast track to getting there. In fact, franchises offer much more than a nice logo and a training manual. If you are on your own, making your business profitable in a short time frame is time consuming and costly. Lenders are much more willing to lend money to a proven model and a good franchisor will help you to get the financing you need. While they won't offer the funds and can't promise anything, their business model as well as connections and proven track record are great ammunition when asking for big bucks to start a business. Franchises also have worked the bugs out that you would have to work out yourself if you go it alone. If they are worth their salt, franchisors have tested the equipment, provide operations manuals as well as barista training and offer a big headstart to your marketing needs by having built brand equity - something that small business people overlook. It is true, with patience, perserverance and a little luck, you can develop a business on your own that is successful, but in today's highly competetive specialty coffee industry, having a visible market presence off the ground gives you an edge and with that edge, the time it takes to become profitable can be much shorter.

If you've read this and still decide to go it alone, the best of luck to you. If however you've decided that buying a franchise is a wise business decision, you now have the daunting task of choosing one among a number of strong coffee franchises. My suggestion is to choose a franchisor with a great support system as well as a flexible franchise agreement. Many franchisors in a wide range of industries are strict and don't allow the franchisee to put their personal touch on the business. One franchise that offers great support with maximum flexibility is Sonoma Coffee Cafe. There are many to choose from and doing your homework can't be stressed enough, but choosing a solid coffee franchise like Sonoma Coffee Café can get you where you need to be in less time than if you do it yourself.

TIP 4 THINGS TO CONSIDER WHEN YOUR PERFECT FRANCHISE BUSINESS

If you want to start your own business, buying a franchise from a successful operator means that you are buying into a business system that is already tried and tested. As a franchisee, you will also be provided with substantial sales and administration support and your company will be well branded in the market. All these factors reduce business risk and contribute to the popularity of franchising.

Franchising as a business concept has been particularly popular in Australia. Since its humble beginnings over 30 years ago with the big American fast food chains, franchising has grown and grown in popularity. Australia now has more franchises per head of population than anywhere else in the world. The franchise sector is currently an $80 billion industry and is providing jobs for more than 600,000 people. Nearly 1000 different franchise operations are in Australia at 64,000 workplaces.

The franchise industry is getting increasingly competitive however and there is evidence that some franchisees are even losing money. Consumer confidence has dropped recently and some retail franchises, in particular those in large shopping centres, have felt the pain of rising rents.

However, it is not all doom and gloom for potential franchisees. Franchising will always remain a popular choice for many wanting to own their own business. Figures recently released also reveal that only 5 per cent of Australian small businesses are currently franchised - meaning the room to grow in Australia remains substantial.

So what are the hot growth areas and which franchise businesses will likely prosper in the future?
Below are four ideas to consider when selecting your top franchise opportunity.

1. People are cash rich and time poor. People will rather pay for someone to clean, repair, deliver, maintain - rather than spend their free time to do it themselves.

2. Find a niche. Sometimes, the key to success could be targeting a specific group within a group. An example could be a healthy fast food franchise like SumoSalad.

3. Look past shopping centres. As rents continue to rise, more franchisees are looking at innovative and less expensive locations, such as home based franchises or retail vending machines.

4. Identify your target market and OVER deliver. "What makes any franchise successful is tapping into what consumers are looking for," says John Brown, Western Australian Principal of Franchise Alliance.

10 TIPS ON CHOOSING THE RIGHT FRANCHISE

Starting a franchise is a serious decision. The choice must be well thought of and not random. It is important to take the right step and not have regrets later. So as a business entrepreneur take the right decision by:

1. Finding out all about franchising. Surf the World Wide Web and read as much as you can about franchising its benefits as well as pros and cons. Read magazines and books on franchising too.

2. Researching on the different kinds out franchises in order to choose a franchise that you will enjoy. Any enterprise must give fulfillment and joy just as a writer cannot work on accounts similarly a business entrepreneur must choose to run a business that he will thrive in.

3. Find out what skills are needed for the business you are interested in. never choose a business or model because it is in vogue. Ask yourself:

a. Am I qualified?

b. What is the reach of the product and will it be needed 10 years from now? Think sustainability.

c. How big is the market and what the projected growth potential is?

d. Is the chain local or global in reach?

e. Do the products have universal appeal?

f. In the field how many different franchises are there?

4. Once you have located an industry of choice. Weight your options carefully by studying the pros and cons of every franchise group in the industry. Most industries like say coffee have at least 4-5 successful franchises operating.

5. Contact each franchise and request for information packs. Learn the history, about the successes and failures, the products and services, expansion plans, turnover etc.

6. Meet more than one franchisor in your field of choice. Think did I like them and their attitude. Would I like to be a part of their operations? Did they treat me with respect? Will I fit in their organization?

7. Once you have narrowed down your choice to a single franchise make the effort of doing a thorough back ground check. Find out about the shareholders, directors, financial health, whether they follow the Franchise Association's Code of ethics. And whether fair business practices are in place.

8. Take the professional expertise of experienced franchise accountant, lawyer and bank. Prepare a solid business plan. Weigh the pros and cons of finance options. Get the lawyer to read through the companies franchise agreement and ensure that your rights are protected.

9. Before you sign an agreement survey your locality to find the ideal spot to set up your business.

10. Think about whether you want to start a fresh franchise or purchase one that is already running and up for sale.

Take decisions professionally. Consult your family too! Begin your life as a business franchisor on the right foot and work towards running a healthy and profitable business.

WHAT TYPE OF CORPORATION YOUR COMPANY BE ?

When you are setting up a Company one of the most important things you can do is determine if you need to incorporate. If you are new in the business world then you should talk to two professional before you make a decision. First talk to your bookkeeper or CPA (Certified Public Accountant) they will be able to take your business plan and determine which type of corporation will give you the best tax advantages, select the wrong one and you could end up paying unnecessary taxes.

Then you need to find legal counsel to help do the paper work for the type of corporation that you have decided on. This paper work includes the all state required forms to register legally and properly. Most legal counsel will also fill out your Employers Identification Number (EIN) with the federal government. It is very important that you use legal counsel because any error in the paper work could delay your being open for business because you cannot ever open a bank account without this paper work.

Here is the important information that you should know about each type corporations and pros and cons for each:C Corps: This is for a large company that is going to have a lot of shareholders involved in the corporation. C corps are more expensive to start up and require lots of additional legal advice because of the increased regulation generated by both federal and state government.

The main difference with a C Corp versus other corporation is that the profits of the company are taxed at a corporate level, which is substantially lower than the personal tax codes. The biggest disadvantage to a C Corp is that if you distribute the profits to shareholders through dividends, those are also taxed and you are in essence paying taxes twice on the same money.

Sub S Corp: This is a classification for a company that either wants no shareholders or wants no more than 100 shareholders. Taxes are also done differently, they are done on what is called a "pass-though" tax. This means that profits the company makes are not taxed on a corporate level, it is "passed-thorough to the owners of the S Corp. So the profit is equal divided between the officers or shareholders and added to their personal tax return. This is great unless you get to the point where your tax returns are pushing you towards the Alternative Minimum Tax (AMT) bracket; make sure you that you are advised on how this can affect your taxes.

LLC: An LLC (Limited Liability Corporations) are a combination of both a C Corp and an S Corp. It has the structure protection of incorporating without the restrictions placed on an S Corp. Many overseas investors find that this type of corporation is the best way to go. The taxes are done on a "pass-through" basis also.

The one thing that all these corporations have in common is you are setting up a separate legal identity for your company, which will protect you and your personal assets from business debts so if your company has financial problems they will not affect your personal finances. No matter which one you choose you should always consult expert help in determining which type of corporation will work best for your needs.

8 KEYS QUESTIONS POSED IN APPROACHING A FRANCHISOR AND A FRANCHISE OPPORTUNITY

These day's many individuals are increasingly interested in starting their own business and some are choosing franchising as it offers the opportunity of using a proven reliable business method. However, despite the low failure rate of franchises, like any other business venture, it is not completely risk free so it is important that individuals opt for the right franchise partner to support them from the very beginning and for the long haul.

The following question arises: if you have no prior experience in relation to the franchising industry, how can you be sure a particular franchise is the right option for you? The following answers to posed questions should provide basic information relating to choosing the right franchise partner and the possible questions you need to be asking any potential franchisor about a franchise opportunity.

1. Should I research the franchise industry?

Yes, yes and yes again! It is paramount to research the franchise industry if you are interested in a particular area of franchising, for example fast food pizzas or health and fitness business ventures, to research this area methodically.

You can research a particular franchise industry via on-line franchising directories, franchise magazines and on-line franchising resources. Find out as much information as you can, by visiting reputable franchising sources such as International Franchising Association (IFA) for advice and guidance on your area of interest. Sign up for weekly newsletters, subscribe to regular news articles, and be informed as you can about your area of franchising interest.

2. Have you prior business experience?

Perhaps one of the most important elements in deciding if you are right for franchising is to assess your own personal and professional skills in a self critical manner. Do you have prior business experience? Are you self-motivated and ambitious? Are you a leader?

Write down all your relevant skills and assess these skills critically. Then assess these skills according to guide lines set out by the International Franchise Association, and by the potential franchisor you are interested in approaching. Remember every franchisor will have a set of predefined franchisee requirements and you must meet every one of them in order to be successful in your attempts to buy into a franchise opportunity.

3. Can I talk to other franchisees?

Yes you can! You can approach existing franchisees in a professional way, by phone, email or in person. Be confident and certain of what you want to ask them. Have a set of questions written out so you are prepared to find out as much as you can about a potential franchise opportunity.

This is particularly beneficial and will give you good insights into how a particular franchise operates and how successful the franchise is. Ask them to be honest and find out the pros and the cons of the job. This will help you evaluate whether it is the right franchise for you.

4. Is there training offered?

All franchisors will provide potential franchisees with expert training seminars, on-going support and advice in the initial stages of your franchise operation. However, every franchisor has a different training scheme, and you must be aware of what individual franchisor's training covers, how long for and if there is any on-going support involved in the long term operation of your franchise.

The best training programs will cover all parts of running the day-to-day business activity, from market knowledge and stock management to merchandising expertise. Be aware of franchisors offering limited training, which suggests that a franchisor may not be interested or committed to your franchise and its success.

5. What support will be offered?

A good franchisor will offer effective support networks to optimize the success of your franchise. This should extend beyond the introductory training and the better franchisors will provide dedicated staff to ensure on-going support is at hand whenever needed.

Also good franchisors should help with attracting your initial customer or clientele base, by offering excellent media and PR campaigns, contacts and databases of customers you can attract. Furthermore, generating income on a daily basis should also be a requirement of your initial franchise, and support and assistance on generating this initial income, should be made available through your franchisor's support network.

6. What are my likely earnings?

It is important to remember like any business venture, you must be realistic when you decide to enter into a financial agreement with a franchisor, and to be specific as to what you can earn realistically in your first year. Ask to see business annual forecasts and sales histories of the franchise opportunity you are interested in becoming part of. This will be an excellent guide to do your own calculations for your franchise opportunity.

7. Can I see sales histories?

Yes you can! This is an excellent way to indicate future earnings and the best way to analyse other franchisee's sales histories. This will allow you to gain a realistic picture of the likely health of your business before you take over ownership. Despite all of this, you must put in a whole hearted effort to be committed and motivated to your business venture in order to make a positive ROI.

8. What involvement will I have with other franchisees?

Alongside the support given from your franchisor, support and advice will also come from other franchisees. This type of networking provides important opportunities to discuss problems, ideas and successes. In addition conversing with other franchisees will provide inspiration and motivation and create a sense of working with a team.

It is important to remember when deciding to enter into a franchise agreement that you have methodically researched the particular franchise industry you are interested in, and you are aware of the pros and cons associated with this franchise opportunity. Make sure that this franchise will work for your benefit, since this is your livelihood and that of your family's. Anything you can do to increase your knowledge of an industry sector will be advantageous in the long run. The best of luck!

SIGN FRANCHISE PUTTING UP BIG SALES NUMBERS

The sign industry over the past 10 years has had tremendous growth. The growth of the sign industry has been made possible by solvent and inkjet printing. In the full sign business, inkjet printing has become a vital part of the process.

It is estimated that the sign business is now taking in over 8 billion dollars a year. The industry has made its place in franchise fields that reward their owners. Are you looking for a place in the franchise industry? Have you ever thought of creating signs for businesses to be a rewarding and profitable field? Well, it's time to start realizing the potential of these businesses.

Places such as Sign Biz, Signs by Tomorrow, Fast Signs, and Have Signs are all showing big profits year after year. You don't have to be technical savvy or have large overhead budgets, all you need is a little creativity and a strong work ethic.

Making good use of computer-based methods, Fast Signs offers innovative graphic and sign solutions. The franchise has over 20 years of experience in the industry, and has close to 500 franchised units to show its experience and vision. Few employees, short business hours, low seasonality, and large availability of territories is just a few of the reasons why Fast Signs has an advantage over others in the industry.

Since 1989, Sign Biz is another big player in the industry. It has been its own mark by offering extensive start-up assistance to its franchisees and using different software methods then other franchisors.

THE EASIEST WAY TO START YOUR OWN FRANCHISE BUSINESS

Have you ever dreamed of owning your own business with no boss to listen to but the idea of starting a business of your own from scratch is to frightening for you? Then you should look into purchasing a franchise from a company with established track record of success. Not only do you then have a business with instant name recognition but also the opportunity to learn the franchiser's successful business methods.

A great number of people don't realize that franchise concepts cover over 75 different product and service lines. The franchising business model becomes a major opportunity for ambitious entrepreneurs. It gives them the chance to create their own niche in a marketplace and run their own business.

If you think running a business franchise is the right idea for you, decide on what type of service you want to invest in. It needs to be one that you enjoy immensely and will be passionate about for years to come. Here are a few steps and recommendations for you to follow when deciding upon starting your own franchise business.

Do a little bit of homework beforehand and conduct some research of your area where you plan to start your business. Is there or can there be a demand for a particular product or service? There better be or there really isn't a point in starting that business. It's a basic economic rule that if there is no demand for what your service or product, then your business is doomed right from the start.

Look at the competition around you. This is the second critical factor you will influence your decision. You'll always face some competition and sometimes it's a good thing but too much isn't. For example, if you're starting a coffee shop franchise, and there already are three Starbucks in your town, then you may want to consider a new location or type of franchise.

Name recognition is something that should never be taken lightly when it comes to choosing a franchise. It's a well documented fact of business that consumers are more likely to spend money from a name they know and recognize. This can often times give a new franchisee an advantage on their competition, and get you to profitability much sooner.

Another very important factor to think about is the franchises growth potential. Will your business risk grow and succeed for the next few years and for how long? Are the latest business trends a fad and will soon dry up, leaving you high and dry?

Make sure you are up for operating and running this type of business venture. There is a long list of failed franchise business owners that see their investment fail because of it matching their talents and abilities. One of three things usually occurs: you loose interest in, get aggravated, or end up closing the business within a few years.

In order for your investment to be successful, you will need the full support of the franchisor; that goes without saying. Training and support given by the franchisor comes in especially handy when it comes to training you and your staff. If this type of support is not offered at all, my best advice is to look into another franchise system that will.

If you still aren't sure about starting up a franchise business, talk to someone who is already in the business about the pro's and con's they face with having one. Actually, this step should one of the first steps you should undertake. Ask them how they decided on starting one, how their business is doing, and what any negatives there are. Most people enjoy giving advice to others especially in the same business field; you'll receive some real honest feedback that can help you out.

BUSINESS TIPS - THE FRANCHISE OF FRANCHISES AND DON'T CUT COST INCREASE VALUE

Look around the local shopping centre, and it is almost impossible not to spot all the franchises that are popping up everywhere. Franchises can be best described as a form of business that merges the scale of the major corporations with the management of a small business. It offers operators the support and security, while still maintaining the control of the business in their own hands. Of course, for the convenience and features that the franchise offers, the owners must pay a fee, as well as face all the risks and problems that come with any small business.

The biggest advantage of a franchise is that it decentralizes the management of operation of the business, which cuts down on a lot of the operating and organizational costs of the big companies. Franchise owners can adapt their business to better suit their locality and environment while still operating under franchise structure.

The success of the franchising business has seen similar models developed extensively in the service and retail industry. Key markets include the food and beverage industry, with a traditionally strong focus on fast food and coffee. In retail, this extends to the mobile phone and computer businesses, while in the service industry, there are many gardening and pet care franchises also available for sale. The most interesting development of the franchising concept is that it has also extended to the banking and finance sector, changing the perception that franchises can only operate in the framework of a small business.

Are you working for a business and considering setting up your own operations? Are you a business that can benefit from catering for the franchising industry? The fact is, franchising is becoming a dominant force in the service and retail market, and it could very well be the new way businesses in other industries operate in the future.

Don't Cut Costs Increase Value

Businesses today appear obsessed with cutting costs. Whether it is to keep the shareholders happy, keep the accountants happy or keep the bank happy, this unhealthy obsession is giving the industry sector a very bad reputation for penny pinching. What happened to the good old adage that you have to spend money to make money?

If you keep your workers happy, they will be more productive. If you keep your customers happy, they will keep coming back. Never mind those people who take advantage of your generosity, because what comes around definitely goes around. Like a solid stock market portfolio, you want to constantly get rid of the bad stocks, and accumulate the good blue chip stocks. The same principle applies to your workers and customers. If you keep hiring people who will work for less, does it seem logical that your productivity will keep increasing. If you spend less time with your customers, do you think they will spend more time with your business?

If this seems like a good dose of common sense, then just take a look around you. The business sector is becoming less and less personalized. The Internet has put us closer to people far away from us, but further away from those close to us. Just because we can send someone an email or a text message doesn't mean we shouldn't take the time to talk to them. Just because the customer has already bought something, it doesn't mean we shouldn't see what else we can do for them.

Look at your business practices. Do they cut costs at the expense of cutting value from your operation? Instead of trying to minimize your expenditure, why not look at maximizing the value of your business? It may be difficult to cut costs to your business, but it is very easy to lose value in your business.

HARDWARE STORE FRANCHISES - TRUE VALUE AND ACE HARDWARE

Almost every household in the country will visit a hardware store at least one a year. This potential for business is one of the reasons that a hardware store has always been one of the more popular businesses that an owner can start or buy.

The generic hardware store exists in the mind's eye as a retail store that a person can go to and buy just the right nut and bolt or the odd sized screw. This mythical store is run by knowledgeable people who can answer almost anything that has to do with home repair. This is what the public has come to expect when visiting a hardware store. Some chain store outlets have gotten away from the help side of hardware stores and just sale products off the shelf. Getting answers to questions in these stores is not what the hardware store visit is about. The great help of the old type hardware store is missing. Except in those stores that are run the old fashion way and continue to prosper as their customers are repeat customers and would not think about going somewhere else to shop. Two franchises that carry on this tradition are True Value and Ace Hardware associated stores.

True Value stores

True Value is the third largest co-op in the hardware business. True Value is a cooperative that allows the store owner who is a member to buy merchandise at reduced prices since this group can make large wholesale purchases. The store owners can also enjoy the advantage of group advertising buys. Being able to buy at the large volume prices makes the advantage a significant profit maker. Group advertising can also reduce the cost of getting customers into the store.

The average True Value store investment

The average investment in a True Value store works out to about $35 a square foot for inventory. The fixtures or equipment will come in at about $8 a square foot. The start up cost can vary by area of the country, but the average is about $4 a square foot. The additional cost to become a True Value store can be found by contacting True Value corporate.

Ace Hardware stores

Ace Hardware is the largest hardware co-op Like True Value it offers members the capability to buy merchandise through the co-op at reduced prices and thereby make more profit from sales. They also offer the advantage of group advertising which reduces the cost of getting customers through the doors.
Group buying of the co-op saves all of the member's money as the co-op gets better pricing due to large volume buying. This savings is then passed on to the members and allows them to make more money.

Ace Hardware Investment Structure

The Ace membership application is about $5000 Initial stock ownership is another $5000. Liquid capital needed to start a store is $250,000 with a loan from Ace of an additional amount of $390,000 to $740,000, which depends on the store size. The total investment is between $650,000 and one million dollars.Land and building cost are not included in this pricing.

The Ace investment numbers are based on a 12,000 square foot store. Dollar amounts are for fixtures, inventory, office equipment, computer system and operating costs.

Other factors that will help the owner

Both of these hardware operations offer the owner training and seminars, which are designed to help the store grow. Suggestions for operating the store more efficiently can be taken in and used to good effect. Special purchases that include a targeted advertising campaign will attract customers into the store. The staff's helpful attitude will impress the customers and insure they will come again.

Buying a local hardware store

Local stores that are affiliated or not do come to market every now and then for purchase. The owner may be willing to deal very favorably in order to make the sale. Contact a business broker or look up businesses that are for sale listed on the Internet. A good business broker may be wise to contact, as these pros are very good sources of current information. If an existing business is for sale, the price may be excellent due to the store being established. A store with cash flow is always a business to be considered. Customer habits are in the favor of the new owner as long as the service stays the same or gets better. If you are going to make some significant changes, make sure they are well thought out before putting them into practice. If there is a strong benefit to the customers, they will probably be met with enthusiasm.

An old owner may be willing to help with the financing of the business. In most cases the price of the business will increase some and will have to be negotiated as part of the sales contract. The other way to get the needed money is to see if a business lender would be willing to give you the needed loan. Many of these money lenders are easily found on the Internet.

Conclusions

The hardware business is one business that has a variety to customers that need what the store is offering. Every person of age is a possible customer. This large potential customer base is what will make a new hardware store quickly grow and in the right location become profitable. . As with all retail stores location is important. Name recognition is also very helpful which is why the two co-ops have so many members. Customers will come to a store with a familiar name.

Friendly, helpful and knowledgeable staff is critical if you want to stand out from the box stores. Their pricing will be competitive to yours, so you have to beat them by having better help. If you try to compete on price alone, you will be fighting a losing battle. Store hours are also important in this business. Early openings are almost a necessity of the business. People like to get up and get started on projects.

FRANCHISE BUSINESS IN INDIA

One of the business options open to India's first time or small entrepreneurs is to take up a franchise. Buying a franchise of an established brand is a good alternative to starting on a new idea from scratch or could offer a faster way to take an existing business to the next level.

This option offers several advantages - not the least of which is an opportunity to latch on to a tried and tested model. A well established franchise brand also affords instant visibility, and with most rules being laid out already by the franchisor.

However, you need to consider several factors before deciding on a franchise business:

Start with the motive - Prioritize your reasons for wanting to enter this business. What do you expect to get in terms of return on investment or annual income? Most important, do you have the commitment to go the distance? It is very important to be sure that you really need the brand to make a business. Many franchises are generic in nature, and not much is offered by way of specialized knowledge or support. If there's a chance you can enter the business by yourself, minus all the franchise costs, maybe it is better to go it alone.

Don't do it unless you have adequate funds - The better known brands come at a hefty price. The annual franchise fee itself can run into several hundred thousand rupees, and will vary with territory. Different franchisors adopt different models. We know that (at least some years ago) leading garment retailer Arvind would place goods on consignment and pay franchisees a commission on the value of the sale. On the other hand, the training and education company CADD Centre charges a territory based flat franchise fee, regardless of volume.

When you start negotiating, the franchisor is likely to sell you some dreams and their ROI calculations will likely focus on initial franchise fee, royalty payments if any and capital expenditure for setup. However, remember, that the business is not likely to pay for itself for a while, so the ongoing requirements will be substantial. Don't take it up unless you have the resources to hang in there for three years. If you still have conviction in the idea, but are strapped for funds, rope in some partners; in any event, don't start still you have enough resources.

Be sure you can handle it - Even with a franchise business, some basics don't change. As with any venture, the success of a franchise will depend on whether you and your team have the requisite skills to run it. A good franchisor is choosy about who they sign up as a franchisee. In the same way, you should choose a franchise opportunity that draws upon your capability or passion or leverages the strengths of the existing business in some way.

ADVANTAGES OF FRANCHISING BUSINESS

In this article, I will provide a detailed listing of the advantages of using the Franchise System.

Franchising is a wonderful system that has changed the lives of many. Here is why it works:

1. The Franchisor provides step-by-step detailed training.

2. The franchisee receives national media attention provided by the Franchisor.

3. The more the franchise grows, the better business each franchisee receives.

4. The Franchisor negotiates special finance rates and conditions that the Franchisee could otherwise not receive

5. The support given to the franchisee from the Franchisor greatly reduces the chance of failure

6. The Franchisee receives exclusive rights to the patents, trademarks, trade secrets, copyrights, and more..

7. Each Franchisee receives an exclusive territory to guarantee there will be no direct competition

8. Most Franchisors provide great help in choosing the location for the Franchisee, this greatly reduces the risk of picking a bad location.

9. 95% of Franchisors will not succeed unless you succeed. This greatly influences them to have a complete business plan to ensure success and profit for both parties involved. Pick a proven franchise and you should be on your way to success.

10. A Franchisee can always call on the Franchisor if they have any customer service, technical, marketing, or any other type of problems.

11. If the first location is a success, then the Franchisee has the option of opening many more units. A successful Franchisee is of great value to the Franchisor and will be treated like royalty. Work hard and diligently and you could own many units one day. This is how a normal Franchisee turns into a rich Franchisee.

FITNESS FRANCHISES - THE TOP 5 FITNESS FRANCHISES

The following five fitness franchises are described as the Top 5 Fitness Franchises today:

Equinox Fitness

Equinox Century City is an advanced fitness club and spa. It is innovative in its design and its approach to fitness. It is not just an experience, it promises results.

Bally Total Fitness

Bally Total Fitness is completely committed to building its brand and position as a leading provider in fitness. Bally has been helping its club members reach their goals by providing top quality service and fitness concepts. The facility runs in a friendly, safe, fun, and welcoming environment. Bally operates its business to ensure it has long-term results and success. The end result is a great result for its members and shareholders.

LA Fitness

LA Fitness is quickly taking over the market for gyms in urban environments. Their massive gyms providing multiple services is the reason why. They offer basketball, weights, aerobics, classes, swimming pools, steam rooms, showers, lockers, and more. The gym depends on high number of members to cover the costs of its mega gyms. The customer service and trainers are helpful, which results in a friendly environment.

Gold's Gym

Gold's Gym has been in the gym market since gyms were created! In 1965, Gold's Gym started in Venice, California. In just a couple of years Gold's Gym became known as "The Mecca in Bodybuilding." From just one gym in Venica, CA Gold's Gym has been franchised to 600 facilities in 43 states and 25 countries. The company is under constant expansion and seems like it is going to be on top of the fitness market for years to come.

Curve's

Curves is a franchise that is helping women get in shape in a small and helpful environment. Their scaled down gyms is just what women are looking for these days. They set goals and have very helpful staff to help get their members in shape and reach their fitness goals. This franchise has been rapidly expanding over the last couple of years and is showing no signs of slowing down in the near future.

WHAT IS UFOC UNIFORM FRANCHISE OFFERING CIRCULAR

What is a UFOC?

The UFOC was a response to some unethical behavior in the 1960's and 1970's. Today franchises are regulated by law. The Federal Trade Commission (FTC) requires that certain information be disclosed to potential franchisees before a contract can be signed or any payment made. The information is presented to the prospective franchisee in the form of a document -- the UFOC.

The FTC requires franchisors in every state to provide a UFOC. In addition, some states require that the offering must first be approved and registered by the state before it can be promoted to prospective franchise buyers. These states include: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Oregon, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. Certain states, such as Illinois and Minnesota, have even more stringent requirements for the franchisor. This in turn affords better protection for the prospective franchisee.

What Does the UFOC Contain?

The UFOC contains 23 items of information that must be current as of the completion of the franchisor's most recent fiscal year. If there is a material change to the information in the document, the franchisor must make a revision (to be issued quarterly). The disclosure document must be given to a prospective franchisee at whichever occurs earlier: the first personal meeting of franchisor and prospective franchisee or ten working days prior to the execution of a contract or money payment to the franchisor.

Standard UFOC Items:

1. The Franchisor, It's Predecessors And Affiliates

2. Business Experience

3. Litigation

4. Bankruptcy

5. Initial Franchise Fee

6. Other Fees

7. Initial Investment

8. Restrictions On Sources Of Products And Services

9. Franchisee's Obligations

10. Financing

11. Franchisor's Obligations

12. Territory

13. Trademarks

14. Patents, Copyrights and Proprietary Information

15. Obligation To Participate In The Actual Operation Of The Franchise Business

16. Restrictions On What The Franchisee May Sell

17. Renewal, Termination, Transfer And Dispute Resolution

18. Public Figures

19. Earnings Claims

20. List Of Outlets

21. Financial Statements

22. Contracts

23. Receipt

How Do I Use this Franchise Document?

The UFOC is similar to a securities prospectus. It can provide the information you need to evaluate a company or to target potential sales clients. An accredited franchise company, whether publicly traded or privately owned, must provide this disclosure document.

The UFOC is most valuable for potential franchisees, potential franchisors, franchisors, investors, financial companies and suppliers to franchisees. Description of Standard UFOC Items:

1. The franchisor and any predecessor. This section contains historical background material on the franchisor, as well as any predecessors. It includes corporate and trade names, address and principal place of business. A description of the franchise should include information such as the nature of the franchise and business experience of the franchisor, including direct experience in a franchise.

2. Identity and business experience of persons affiliated with the franchisor. All names of individuals having significant responsibilities in the operation of the business or in support services provided to the franchisees must be disclosed. Information stating the person;s current position in the company and business experience for the last five years is also included. If a marketing representative or franchise broker is involved, the same information is required.

3. Litigation history. Detailed information on criminal, civil and administrative litigation involving any of the officers, owners, directors or key executives of the company is disclosed in this section if the allegations or proceedings would concern the potential franchisee.

4. Bankrupcy history. The franchisor must disclose whether the company or any of its directors or officers has filed for bankrupcy during the past 15 years. Information on each action must be included.

5. Franchisee's initial franchise fee and/ or other initial payment. This section states the franchise fee and any other initial payments to be made by the franchisee upon the execution of the franchise agreement. The section discloses the terms of payment and fees, the use of such monies, and whether the payment and fees are refundable in whole or in part.

6. Other fees. All other fees are detailed, including royalties, advertising fees, insurance expences, training costs, audit and accounting cost, consulting, leases, alteration costs and any other fees associated with the franchise.

7. Franchisee's estimated initial investment. The estimated expenditures associated with the opening of a franchise are recounted wih a high and low range given for real estate, construction, equipment, fixtures, permits, furnishings, signage, inventory, working capital, etc. This section should include the name of the person or persons to whom payment is made for the preceding, under what terms and whether refund terms apply.

8. Obligations of franchisee to purchase or lease from designated sources. Any requirements that the franchisee must purchase goods, services, supplies, equipment or insurance for the opening and/or operation of the franchise from a franchisor-designated source must be disclosed. Franchisors must also disclose if they receive income from the approved suppliers as a result of purchases by franchisees.

9. Obligations of franchisee to purchase or lease in accordance with specifications or from approved suppliers. A further elaboration on supply sourcing, this section itemizes any seponsibility of the franchisee to purchase or lease either from pre-approved suppliers or according to franchisor specifications. Specifications for purchases are not normally included, but pricing, discounts and procedures to have suppliers approved by the franchisor are usually cited.

10. Financing arrangements. Any financing programs that are offered either by the franchisor or its designates are described in this section.

11. Obligations of franchisor: other supervision, assistance or services. This section describes the initial and on-going services and support of the franchisor. Often it is divided into two parts -- service obligations of the franchisor and services that may be performed by the franchisor. Some types of service and support described are training, advertising material, site selection, market research and computer services.

12. Territorial rights. If the franchisor grants exclusive rights, the territory and the rights will be described in this section. Any conditions that the franchisee must meet to retain these rights, as well as the right of the franchisor, are also disclosed.

13. Trademarks, service marks, trade names, logo types and commercial sumbols. The franchisor must disclose information regarding the registration of trademarks, service marks, trade names, logo types and commercial sumbols with the U.S. Patent and Trademark Office. Also included is a list of states and countries in which the marks are registered, as well as any limitations imposed on the franchisee for the use of these marks.

14. Patents and copyrights. This disclosure lists any patents and copyrights that may be involved in the operation of the franchise and that may cover trade secrets and confidential information.

15. Obligation of the franchisee to participate in the operation of the franchise business. If the franchisor requires the active participation of the franchisee in the operation of the business, it must be so stated. Terms and conditions of the participation should be defined.

16. Restrictions on goods and services offered by franchisee. Any limits or exclusions on goods and services that can be commerialized by the franchisee are stated in this section.

17. Renewal, termination, repurchase, modification and assignment of the franchise agreement and related information. This, the longest and most complex section, covers the franchisor's requirements and the franchisee's options when a franchise is to be renewed, terminated, repurchased, modified or assigned.

18. Arrangements with public figures. If the franchisor has any compensation or endorsement program with a public figure, it must be disclosed. If the public figure is involved in the ownership or the managment of the franchise, it must also be disclosed.

19. Actual, average, projected or forecasted franchise sales, profits or earnings. There is an option here. Some franchisors will state that they do not furnish the actual, average, projected or forecasted sales and earnings to prospective franchisees. If a franchisor does make a claim of sales, profits or earnings, then the franchisor must fully describe the method by which the claim is made.

20. Information regarding franchises of the franchisor. The franchisor provides a summary of franchises sold, the number actually operating, the number of agreements signed but not in operation, and the number of company-owned units. Information on the number of franchises terminated or not renewed with the causes for termination or non-renewal for the past three years is also required.

21. Financial statements. In this section there is a complete set of financial statemetns, usually a balance sheet for teh past fiscal year, an income statement and changes in the financial position of the franchisor for the most recent three fiscal years. Most states require audited statements.

22. Franchise agreement and related documents. A copy of the franchise document and any other document to be signed by the franchisee must be included as exhibits.

23. Acknowledgement of receipt by a prospective franchise. Prospective franchisees are required to sign an acknowledgement that a disclosure document was received from the franchisor.

HOW TO DEVELOP A FRANCHISE LEVEL INCOME WITHOUT THE HUGE FRANCHISE COSTS AND FEES

To purchase a franchise or not to purchase a franchise. That is the question. If you have done any significant research on purchasing a franchise you most certainly have realized that the ones that almost guarantee success are the companies where you will have a high 6-figure to even 7-figure investment/outlay. There are several other options, but most viable franchises that have an honest chance of succeeding still will require a minimum of $50k as a franchise fee and capital available to start. If you don't have the proper financial statements it can be a daunting task to even come close to purchasing a franchise.

Where do you go when you truly want your own business but a start up from scratch seems too risky and you don't have the $50k-$1 mil. needed to buy a franchise? This is the million dollar question.

The options for starting your own business are almost as endless as the grains of sand in the Sahara. There are some criteria that a person should follow when evaluating any business, but especially one that can be started part-time and operated from anywhere in the world. Here are what many experts feel are the important factors to look for.

Quick return on investment. High profit margins on product/service provided Minimal investment compared with most franchises Can be operated anywhere in the world Does not require employees Provides substantial tax benefits Has cutting edge/highly expanding products positioned in front of a major trend.

If you are sick and tired of looking at multi-level-marketing business or network marketing then you owe it to yourself to search for a business that meets the above criteria. Don't purchase a franchise until you realize that most people end up buying themselves an 80+ hour per week job. I encourage you to evaluate and investigate any business that fits most or all of the above and get yourself out of the rat race you are in now!

HOW TO FIND THE TOP FRANCHISE OPPORTUNITIES

America is a great place. A business in the United States or Canada can be started in no time at all. In the past few decades, starting a business has been made much easier with the number of franchise opportunities available to the public. Finding the top franchise opportunity to start a business in is not an easy task. There are countless numbers of franchisors out there eagerly waiting for you to sign their franchise agreement, but which one should you choose?

You have many options to choose from including the following: Food Franchises, Business Franchises, Automobile Franchises, Daycare Franchises, Fast Food Franchises, Retail Franchises, Hotel Franchises, Travel Franchises, Home-Based Business Franchises, and even know Internet-based Franchises. The opportunities are endless for eager business owners. The walks of life that prospective franchise owners take are from all different paths. Frustrated corporate workers, previous business owners, college graduates, even teachers choose the Franchise route.

Why do they choosing franchising?

Well, the statistics speak for themselves.

-Less than 4% of franchises fail in their first year of operation

-90% of franchises are said to still be in business ten years after opening

Independent start-ups, also known as small business opportunities are a bit different, well actually a lot different.

-38% cease operation in twelve months of opening

-90% are out of business by the tenth year

With the comparison of those two statistics alone, it is plain to see why people choose to go the franchising route versus just a small business opportunity.

The Franchisors provide the franchisee with great support, products, training, and assistance in marketing.
Marketing is a crucial factor for franchises to gain market share within the first couple of years. If nobody knows about your business, it is hard to gain customers. The Royalties are supposed to help in regional and state-wide advertising efforts for the franchisee. The percentage that is used for advertising varies from franchise to franchise, but generally it is around 2-3%.

It is my belief that independent start-ups or small business opportunities fail so quickly due to the lack of marketing and exposure. The owners get discouraged very quickly and close up shop before investing too much time and money. This is unfortunate, because many of these businesses are great ideas and could offer a great value to the customer- many times even better then a franchise opportunity could offer.

Why should you team up with a franchisor? They have the know-how, money, and most importantly the established name that you need for your business. Just think, if you were driving into a shopping complex to grab a bite to eat at a sandwich shop, would you pick Quiznos or Big Johns Subs? Well, an astonishing 79% choose the name they recognize, Quiznos. Why is this? They have seen it on TV, newspapers, billboards, and local fliers. On top of that, Quiznos benefits from viral marketing. Viral marketing means basically word-of-mouth. There is a buzz that goes out about the company that makes them more popular than any other advertising technique. Basically, without being behind a popular franchise you are putting yourself at a serious disadvantage.

I recommend thoroughly researching any franchise opportunity you are thinking about investing into. Make sure they have good market presence, management support, proper franchise fees, and most importantly a good number of currently franchised units.

If all those factors are in place and the financial s in your life are in place, then it is time to take the leap to franchising. It is a great path my friend, work hard and you will once and for all be self-employed for the rest of your life.

HOW TO FIND THE BEST FRANCHISE OPPORTUNITIES

Finding the best franchise opportunities on the Internet can be quite a hard task. There is estimated to be over 3,500 franchise opportunities in the United States and Canada today. Franchising has proved itself to be the most effective form at one to run their own business, but where are you supposed to look? In this article, I will expose to you where you should look for franchise opportunities, how to properly evaluate the franchise, and how to decide if the particular franchise is the right fit for you.

Where should you look for Franchise Opportunities? Well, franchise opportunities are all over the internet, the question for you should be which opportunities are worth your time. First off, I suggest that you put together a plan of action before even beginning to research for the best franchise. You need to sit down and figure out which industry you could see yourself owning a business in. Have you worked in the restaurant business all your life? Are you a personal trainer that has been thinking about opening a gym all your life? These are very valid questions you need to be honest with yourself about. Choosing the industry to buy a franchise in is the most important decision you will make. Once you sign the franchise agreement, there is no turning back.

Okay, so you have found the right industry for your franchise. Now, which particular franchise is the best opportunity for you? When evaluating a franchise, it is extremely important to remember the following: total investment required, franchise fee, management support, number of currently franchised units, and years in business. Those five fundamental categories are the most accurate and best ways to truly see how properly and efficiently the franchise runs. You need to be honest with yourself in regards to your financials. If the initial capital required is $100,000 and all you have is $70,000 then chances are you are looking at a franchise that is way out of your league. It’s better to look at lower costing franchises and use the extra money to focus more on your advertising and marketing efforts.

Now, how are you going to decide if the particular franchise you have chosen is the right fit for you? There are a number of points that you need to think about before signing the franchise agreement. First off, does the franchise opportunity express you? This might sound a bit strange, but it’s very true. If you are a sports fanatic and a work-out maniac, do you really want to spend your days working in a Florist shop? Chances are that you do not. I have seen franchisees blinded by the promise of making big bucks working in industries where they really have no business being in. Franchising in its beginning stages is a 24/7 at LEAST 40 hour a week job. Don’t want to work? Fine, nobody will suffer but yourself. If the franchise opportunity fits your budget, personality, and current life then you should be prepared to put your all in the business for the next couple of years.

Finding the best franchise opportunity for yourself is not an easy task. It can take months, at times even years before you truly find the franchise you want to invest your life into. There are estimated to be over 3,500 franchise opportunities in the United States and Canada today. You should put yourself and the franchisor under a microscope before this life changing decision is made. I have taught you how to evaluate the franchise, yourself, and the industry you should be working in. The rest is up to you my friend. Good luck in your quest to self-employment and independence, it is a great life once you finally reach it.

WHAT IS A UNIFORM FRANCHISING OFFERING CIRCULAR ?

This is a document that must be provided by the franchisor to the prospective franchisee at least 10 business days before any agreement of sale is signed and finalized.

What is the importance of this document? Well, it is considered a disclosure statement that covers such items as the Franchisor's obligations, the Franchisee's obligations, territory boundaries, and initial and ongoing fees to be paid. All in all, 23 important subsets of information are included in this comprehensive disclosure statement about the franchise that the franchisee is about to invest in. (See below for a full listing of the information that makes up the document).

Furthermore, since prospective franchisees need to have enough information to be able to compile a business plan for financing purposes, the franchisor must offer sufficient documentation for franchisees to forecast future expenses for the business.

The UFOC is non-negotiable and is written within a consistent or "uniform" set of criteria. Individual states are not afforded the opportunity to change the terms and conditions of a franchise agreement. The only items that have any flexibility are territory location and possibly extreme demographic disadvantages.

Since 1995, the Federal Trade Commission (FTC) has required that this document be written in plain English rather than be full of legal terms that the layman cannot understand. The North American Securities Administrators Associations (NASAA) administers and monitors the UFOC.

Following is a list of the 23 categories included in the UFOC:

The Franchisor and Any Predecessors

Identity and Business Experience of Persons Associated with Franchisor

Litigation History

Bankruptcy (any franchisees who may have filed)

Listing of the Initial Franchise Fee and Other Initial Payments

Other Fees and Expenses

Statement of Franchisee's Initial Investment

Obligations of Franchisee to Purchase or Lease from Designated Sources

Obligations of Franchisee to Purchase or Lease in Accordance with Specifications or from Authorized Suppliers

Financing Arrangements

Obligations of the Franchisor; Other Supervision, Assistance or Services

Exclusive/Designated Area of Territory

Trademarks, Service Marks, Trade Names, Logotypes and Commercial Symbols,

Patents and Copyrights

Obligations of the Franchisee to Participate in the Actual Operation of the Franchise Business

Restrictions on Goods and Services Offered by Franchisee

Renewal, Termination, Repurchase, Modification and Assignment of the Franchise Agreement and Related Information

Arrangements with Public Figures

Actual, Average, Projected or Forecasted Franchise Sales, Profits or Earnings

Information Regarding Franchises of the Franchisor

Financial Statements

Contracts

Acknowledgement of Receipt by Respective Franchises

Upon receipt of the UFOC, it is essential that the franchisee evaluate the entire document before signing into an agreement. Also, it is important to note that although the document is required by law, it has not necessarily been reviewed for accuracy by a legal body. Therefore, it is highly recommended that a franchise attorney assess the document for accuracy.

If there is any hesitation on the part of the franchisor to provide you with the UFOC, you may wish to consider a different opportunity.

WHAT I LEARN FROM MY FIRST FRANCHISE EXHIBITION

I launched my business properly for the first time at the franchise exhibition last Friday and Saturday. Up till now I have not felt ready to exhibit as I did not feel that our platform was 100% complete.

For us, exhibiting at the National Franchise Exhibition at the NEC in Birmingham was a resounding success. I think the total cost of our stand including design and build was approximately double the average stand of the same size but it did pay off as our stand was one of the busier ones.

I definitely think it was worth our while paying a little more for a custom built stand rather then using the shell system that most other franchisors were using.

We also hired two large flat screen plasma monitors. The two 42" screens cost $600 dollars to hire, install and takeaway... but they were worth it. Our video and digital brochure was live on both screens and this certainly attracted the punters.

On the first day we made a lot of mistakes! We did not have a system in place and everybody who helped us man the stand, pretty much did what they wanted.

At night we evaluated our day and felt we could have done a lot better!

Many of the enquiry forms had not been filled in correctly and so we decided that after the punter had filled in his / her details in the form we were to ask them again, their first name, last name, email address and phone number and write it in duplicate at the bottom of the form.

We decided to use our people more effectively. Zak and Uzma were really good at making initial contact and directing people to our stand. They stood outside the stand and greeted people as they passed by. Their sole purpose was to get people into our stand.

David, Zubeir, Priyesh and Jamie were very good at explaining the concept and demonstrating it on their laptops. They were each assigned a station and I have to say that they did a great job. I believe that it was a great idea asking our franchisees to help us man our stand.

Finally, all really warm enquiries were passed on to me so that potential franchisees could have a chance to evaluate the man behind the concept. This also gave me a chance to study them and see if they would be right for our business model.

I definitely believe that it is worth spending more money on a custom built stand and having some features that stand out. On our stand we had a little man (not real) sitting on top of our stand!

I noticed that all the stands that had unusual features were a lot busier then your standard shell systems.
If you are planning to do an exhibition and need some free advice, get in touch and perhaps we can exchange / share some ideas.

INTERNATIONAL FRANCHISING - A WORLD OF OPPORTUNITY

We went to the experts and those who have done it to learn what it takes to move a franchise concept from country to country. In this issue we speak with Joe Lindenmayer from TSS Photography and Craig Slavin from Franchise Architects to get their views on international franchising.

Georgia franchise goes down under TSS Photography (formerly The Sport Section) is a franchise based in Georgia. It has been operating since 1983 and now has 222 units. Most of the franchisees are in the U.S., but the company has moved into New Zealand, Australia, and Canada. When asked to describe what TSS Photography does, President Joe Lindenmayer says, "We are the 'picture day' people." Franchisees provide individual, team, and class photos through sports organizations, schools, civic clubs, YMCAs, Boys and Girls Clubs, and PTAs. In many cases the photos are used as a fundraiser for the organization.

TSS Photography's first foray into the international arena turned out to be a case of bad timing. Lindenmayer explains, "We opened a franchise in South Africa back in the late '80s and early '90s. If you remember what happened politically and socio-economically in South Africa at that time, you can understand that it was a very difficult environment for our initial international move. It was hard getting the money out and doing any sort of commerce, so after a couple of years we both agreed that it just wasn't going to work."

The company continued to receive interest in expanding overseas. "We believe in core competencies. That's one of the things that have made us so successful over the years. We do what we do well and once we felt we had that under control in the U.S., then we expanded our reach internationally," asserts Lindenmayer.

Although Lindenmayer liked the prospects of going into the UK first, the next opportunity was much farther away. "We were approached by a gentleman in Wellington, New Zealand, who found us on the Internet. We began discussions with him about bringing TSS into New Zealand and Australia in the early months of 2003. They've really got such a hold of franchising down there and we saw many brands going in that it made a lot of sense for us."

It isn't enough to speak the languageEven though TSS is in 4 English speaking countries, Lindenmayer points out that there are still differences to be aware of. "Every English speaking country has its own culture. And that's one of the big lessons that, frankly, we continue to learn. Australia and New Zealand are wonderful countries and the people are terrific, but it's not the States. They have a different perspective on products. We held focus groups in New Zealand and in Sydney and Melbourne. But while there was a lot of excitement, the focus group only represents the people in the focus group. When you get beyond that scope, you'll see some changes."

Lindenmayer says there are other challenges, such as technology. "It's the little things that you don't think of. Take date formatting, for example. We go by day and month whereas they might go by month, then day. And then there are the logistics of working with any country. Regardless of the number of time zones away, you are dealing with basically a whole day away. We had to work around those challenges by keeping some staff later and making some technology improvements that would help communication. We are also dealing with things like customs and border issues that increase freight and the cost of doing business. One of our goals is to have a lab in each country (currently photos are processing centrally in the U.S. and shipped to franchisees for distribution). We are working on that with NZ currently. The planned launch for a lab, which we are calling TSS Down Under, is March of 06. As you can imagine in a post-9/11 world, international exchange of orders and goods can be a bit of a challenge. But we've done pretty well to work through it together with our master franchisees," states Lindenmayer.

International franchising provides more benefits than just moneyLindenmayer thinks the best part of international franchising is the sharing of experiences.He says, "Even though we are a franchisor with 20+ years of experience, we have learned much. For example, there is potential to market different products and offer different services. And I think franchisees from different countries can add to the culture of the franchise company since they are essentially part of your headquarters operation. There is a neat exchange all around. If you really look at that as an opportunity to learn and have that individual or group of owners contribute to your franchise headquarters, there is synergistic value for you there."

"Overall, international franchising has been a great experience," says Lindenmayer. "My philosophy is, every mistake is an investment in progress. If there's a problem, we isolate it and get it fixed while marginalizing the damages. If you are dynamic enough to try different things, I would strongly recommend it for a franchise company that feels like they're ready. From my experience I would say, don't focus on the master franchise for your revenue. In franchising, it shouldn't be about the franchise fee and when you are going international, it shouldn't be about the master fee."

BUYING A FRANCHISE INSTEAD OF A BUSINESS OPPORTUNITY

America is a great place, you can start a business in just a day.

You have many options to chose from. You can go to the Franchise route and start one of the following: Food Franchise, Business Franchise, Automobile Franchise, Daycare Franchise, Fast Food Franchise, Retail Franchise, Hotel Franchise, Travel Franchise, Home-Based Business Franchise.

The opportunities are endless for eager business owners. The walks of life that prospective Franchise owners take is from all different paths.

Frustrated corporate workers, previous business owners, college graduates, even teachers choose the Franchise route.

Why do they choosing Franchising?Well, the statistics speak for themselves.-Less than 4% of franchises fail in their first year of operation-90% of franchises are said to still be in business ten years after opening
Independent start-ups, also known as just normal business opportunities are a bit different, well actually a lot different.-38% cease operation in twelve months of opening-90% are out of business by the tenth year
With the comparison of those two statistics alone, it is plain to see why people choose to go the franchising route versus just a normal business opportunity.

The Franchisors provide the franchisee with great support, products, and assistance in marketing.
Marketing is a crucial factor for franchises to gain market share within the first couple of years. If nobody knows about your business, it is hard to gain customers.

The Royalty Fees are supposed to help in regional and state-wide advertising efforts for the franchisee. The percentage that is used for advertising varies from franchise to franchise, but generally it is around 2-3%.
It is my belief that independent start-ups or business opportunities fail so quickly due to the lack of marketing and exposure.

The owners get discouraged very quickly and fold-up before investing too much time and money. This is unfortunate, because many of these businesses are great ideas and could offer a great value to the customer- many times even better then a franchise could offer.

FRANCHISE BUSINESS SELECTION - THE THREE KINDS OF FRANCHISORS

After you've talked with a number of franchisors you may begin to wonder why any franchisees fail. But they do, and franchisors are usually tight lipped about it unless the franchisee is clearly at fault. I find it hard to accept their silence, and it is all the more reason to exercise caution. The less potential for risk the greater the opportunity for success.

Franchisors have never been overly generous with information that could be classified as sensitive. State and federal laws have made them "gun shy" and rather than tell a prospect too much they attribute their silence to strict governmental regulations.

The Treadmill Franchisor

This is the franchisor that is going nowhere. It will never make it to the "big time." For a while the number of franchised units in operation will rise and fall like the ocean tides. Over time, however, attrition and disillusioned franchise owners will prevail while the franchise program whithers away and dies.

You can recognize a treadmill franchisor by its lack of purpose and direction - no well defined plan for growth and development. It's management is sorely lacking in the most basic skills and the solution for every problem begins with the incompetency of the franchise owners.

The Good Hands Franchisor

These are the good guys. They are the ones you want to deal with. There are no pretenses, excuses, or hard sell tactics. What you see is what you get is a practicing philosophy. They don't sell franchises, they award them. It is your job to sell them on you. They are building for the future, want only the best people in the system and will turn down any prospect who does not measure up to their standards.

These franchisors have it all together - the people, the resources, and the desire to make their franchisees successful.

The X-Rated Franchisor

These are the ones that give the industry fits. Their motivation is greed. The franchisee is just one big dollar sign to them. They have no qualms whatsoever in telling a franchisee, confidentially, about all the money that can be made and how easy it will be to open multiple units.

By and large the operational people are used for collection purposes. They see to it that all royalties and other charges are paid on a timely basis. Delinquents pay interest and are usually threatened with a cancellation of their franchise agreement if late payments continue.

NEW FRANCHISE - PROSPECTIVE FRANCHISEES - PERSONAL STATEMENT AND FRANCHISE TOTAL COST

Mistake Number 3 Prospective Franchisees Make in Purchasing a Franchise

Failure to put together an accurate personal statement

It infuriates me to have to pry financial information out of a prospective franchise owner. Before a prospect makes an appointment with a franchisor he or she should know how much money is available for investment purposes. Not guesstimate, but hard cash. I will never understand how people can treat this subject so lightly. Here they are talking about making an investment of many thousands of dollars and yet oblivious to the consequences of a bad judgment. Once you're in, there Is no turning back. The players and the money are real.

Start-up cash requirements for selected industries

Perhaps the biggest mistake franchisees make is to underestimate the total number of dollars needed to start a business.

Franchise Costs

The franchise fee and equipment costs should be accurate. Special pieces of equipment, not included in the standard equipment package, are extra. Don't forget to include taxes.

Signage is another matter entirely if interior and exterior signs are part of your franchise package. Sign dimensions are controlled by city, town, county or state ordinances.

The opening inventory should include everything you need initially. Get a list of inventory from the franchisor. You may want to check with existing owners. Some franchisors control the companies that sell to the franchise owners, and the tendency, not a common practice, is to load up a franchisee with an opening inventory. This is good and bad, but most of the time the excess inventory is not needed and limits cash flow.

FRANCHISE OPPORTUNITIES - FRANCHISEES MUST PAY ATTENTION TO THE DISCLOSURE AGREEMENT

Mistake Number 2 Prospective Franchisees Make in Purchasing a Franchise

Failure to read, understand and ask questions about the disclosure agreement.

The same scenario as Mistake Number 1, the only difference is that a disclosure document does not require your signature. The law is very clear on the issuance of this document to prospective owners. Before you buy a franchise a disclosure document must be given to you at least ten days prior to signing a franchise agreement. The contents include a history of the franchisor, its management, any lawsuits or bankruptcies, a three-year financial history and a lot of other relevant information.

Once again, the law requires a franchisor to give you a copy of its disclosure document. If the salesperson tells you that an offering is exempt from the FTC requirement, ask to see a document that upholds that opinion. Call the state agency or local FTC office for verification of the exemption. Don't, under any circumstances, continue to deal with the company any further until you are satisfied that it is not a franchise.

What constitutes a Franchise? According to the FTC rule there are three common elements: (1) the distribution of goods and services associated with the franchisors trademark (e.g., Arby's, Burger King, Midas Mufflers), (2) significant control or significant assistance to the franchisee's method of operation (e.g. direct operational help) and (3) required payments by the franchise to the franchisor (e.g., franchise fee). Any time these elements are present you have a franchise and it falls under the disclosure rule.

BUSINESS TURNED FRANCHISE - WHY IT HAPPENS AND HOW A FRANCHISE OPPORTUNITY AFFECTS YOU

Why Companies Choose to Become Franchisors, and how this affects you. Why do companies choose to become franchisors?

The lure of "risk-free" profits is one reason. Other reasons center on man power the availability of expansion capital and quick access to new markets. It is not uncommon for a company, committed to growth through company-owned and company-managed units, to switch allegiances midstream. Since franchisees supply the manpower and the capital for growth- with little or no risk to the company- the transition to a franchise system can be accomplished with relative ease. It is certainly an inexpensive way to restart a stalled market-penetration program in a short space of time.

Once objectives have been satisfied, the emphasis on franchising may shift back to the company-owned and company-operated unit philosophy. One of the side effects is pressure on existing franchisees- the successful ones- to sell their units back to the company. A compromise tactic is to allow the franchisees to keep their units- with no expansion privileges- while company-owned units are opened around them.

Should the company decide to continue to offer franchises on a limited scale, the company stores division will always have the right of first refusal on new locations as they become available. Existing, qualified owners will be next in line, while new franchisees will be last. You go with the long profits first (company stores) and then experienced operator before you take on an unknown.

Scared yet? Don't worry. You should not be overly concerned about buying a franchise from a reputable franchisor with a strong company division. Just be aware of where you fit in an guide yourself accordingly.

HAVING ENOUGH CAPITAL FOR YOUR NEW FRANCHISE

Mistake Number 7 Prospective Franchisees Make in Purchasing a Franchise

Failure to talk with enough existing franchise owners

Maybe it is just about being lazy, but this is an important part of the investigation process. When you allow a franchise salesperson to take you around to introduce you to owners you eliminate objectivity. The franchise owner is not going to knock the franchisor in front of a company representative. Make the rounds by yourself and telephone out-of-state owners. Keep notes and discuss them with the franchisor. Get the franchisor's input too. This will save you a lot of time and hassle. Current franchisees have the most real-world knowledge in what the state of the franchise is currently. They should be used as one of your top resources in evaluating a franchisor.

This may seem redundant. All of your efforts will go for naught if you fall short on working capital. There's absolutely no way a business can sustain itself when the demands for operating capital exceed the supply. I would recommend a contingency fund be established with half again as much working capital as the budgeted amount. Murphy's Law is as good as a reason as any to consider it seriously.

Here are some real situations that caused a great deal of distress for a few franchisees:

- Construction delays, legal problems, and the weather all held up the opening of a franchised retail operation for six months beyond the scheduled completion date.

- A speciality food operation was delayed six months because the specifications for a serving counter were wrong.

- A contractor failed to complete an application for curb cuts, and the Department of Transportation held up a franchisee's opening for six months.

- A Midwestern franchisee relocated to Florida to open a fast food restaurant. Unfortunately, he had to wait four months before the unit was ready for occupancy.

Who suffers financially? The franchisee. He's without a source of income and all he can do is wait- and wait- while the meter continues to run. It's not a very happy thought.

WHAT TO TAKE INTO CONSIDERATION WHEN STARTING A FRANCHISE

Franchising offers you a middle ground between starting your very own business and working full-time for somebody else. Though there are a lot of advantages to franchising, it does take a lot of commitment, capital and time.

Before buying into any franchise it is important to do your research well. Don’t just buy into a franchise because it is top-rated. The first thing you need to determine if the franchise fits into your business style.

Running a business that you are not interested in or are unable to give any creative input to, can cause a lot of problems down the line. It is equally important to conduct a thorough analysis of the market before choosing your franchise or your location.

After you’ve short-listed the franchise opportunities that you may be interested in, get the company’s Uniform Franchise Offering Circular (UFOC). This is a detailed document that discloses critical components of the franchise and their offer to potential franchisees.

Conducting on-site visits and talking to current as well as former franchisees will reveal a lot of information that you would never be able to obtain from any legal document or agreement. Most franchisors have select franchisee outlets that are on their “tour” list for potential franchisees. After you’re done visiting these, go on alone to other franchisee outlets that are not on the list and gain a real insight into what it would be like to work for this particular franchise. Visit outlets that are successful as well as those that are not doing so well. Establishing the reasons for failure can give you valuable fore-knowledge into the issues you need to avoid if you are to succeed.

Even if you are considering buying into a well-established franchise, it will take time before you start making any profits. Take into consideration family budgeting and various pre-opening costs as well as operating costs and reserve sufficient funds to tide you over during the time it takes for your business to take off.

FOR FRANCHISE BUYERS - WHAT THE UFOC TELLS YOU

Each franchisor must produce a document called Uniform Franchise Circular (UFOC), which is submitted to the Federal Trade Commission. This document, with its 23 required items of information, is essential reading for any prospective Franchisee.

Although the contents of the UFOC are prescribed, many franchisors will only present the minimum information needed to get by. So, to get an accurate assessment of the Franchisor, you will need to do some reading between the lines and ask a lot of additional questions.

The analysis of a Franchisor’s UFOC is too big a subject to cover in one article so let me just give you some important tips to keep in mind while you’re reading through the document. More of these follow in additional articles.

THE TIPS:

•Read the litigation section carefully, looking especially for an excessive number of law-suits by Franchisees. That might indicate that a Franchisor is not living up to its agreement. A real flag: Franchisors that are involved in class action suits and/or expulsions from securities associations.

•Franchisors are often adamant about the Franchisee’s use of their approved suppliers. The prudent franchise investor should compare alternate supply sources with the Franchisor’s approved ones for price and quality.

•Franchisors that offer financial assistance to prospective Franchisees provide a service. Just make sure that the terms and conditions of the system-sponsored financing are fair to the Franchisee.

•When you examine a company’s advertising program and strategy, look for clear-cut goals and effective use of funding. You don’t want to find out that most of the advertising dollars go toward attracting new Franchisees, not customers.

•Most major points of the franchise agreement will not be negotiated by the Franchisor, so if there’s something you cannot live with, be ready to walk away from the deal.

•Be very sure you’ve settled on the right franchise, because, once you have paid the fee, it’s doubtful you will get it back if you change your mind. Most fees are not-refundable.

•Don’t be enticed by Franchisor’s very low franchise fee. Find out what it covers. If training, support and marketing aren’t included in the initial fee, you can end up paying much more on a piecemeal basis than you would with a higher fee that includes all these things.

•Ask yourself this question when considering a royalty fee (especially one that seems high in comparison to other Franchisors): Does the franchise have such powerful name recognition that the high royalty is warranted?

•Find out if Franchisees are paying their royalties. It spells trouble if they aren’t. Either they’re not doing well enough to pay the fee or they’re not satisfied with the Franchisor’s support and services.

7 BENEFITS OF FRANCHISING

Statistics on franchising are astounding for the period 2005-2006 in the US there were approximately 1500 brands franchised with more than 767483 outlets with a turnover of USD62460 billion. The figures are an indication that franchising is an accepted concept that is profitable.

All over the world people are choosing to run franchises instead of floating new businesses as with franchising all the basic market surveys, research, and business plans are already in place and working. So, entrepreneurs young and old choose to become franchises of a running and profitable chain and be their own bosses. If working for a company is not your cup of tea then consider franchising as a business module, it has many benefits:

1. When you take up a franchise you are taking on a business that is already flourishing. The business module is complete in all respects and any problems have been ironed out by the person who first established the business. What you get is a ready made package that just needs to be run.

2. By franchising you get not just a business by all the support you need in terms of marketing, customer relations, accounting, staff training and deployment, as well as in the day to day running. You become part of a local or global group that networks and interacts on all aspects of the business.

3. Solutions to hitches or problems encountered in business are always on hand, the franchise chain will lend complete technical support and any other assistance required. The chain will function as a single unit as far as technology, machinery, group branding, and advertising and so on is concerned.

4. The progress or expansion in the business will occur as a collective group and professional consultancies and so on will be carried out for the whole group of units. This means the think tank is much large as also the resources.

5. Aspects like future plans, product research, buying power, expansion of activities, market surveys, and more will be done as a chain and so you will just reap the benefits. The risk will be collective and not individual as in other business modules.

6. You will be your own boss and be working towards securing your own future. The devotion and long hours will help you reap many benefits and respect.

7. With franchising your staff would be trained by the franchise major and so what you will get is people who can function well without constant supervision and watching over. As the world innovates your business will keep abreast of the changes.

World wide business gurus advice that “a franchising business module is the safest and most dependable choice in business entrepreneurship.” A franchise can make dreams come true of owning and running your own business without the accompanying heartaches.