Are you wondering how to evaluate a franchise marketing plan? It is important to know how to do this because if the franchise you buy into doesn’t have a well mapped out marketing plan you won’t do well as a franchisee. Here are some steps you should take in doing so.

You should definitely know the basics to a marketing plan. A marketing plan is pretty much a set plan on how to bring business to the franchises. Franchisees put in a certain amount of money to contribute to this marketing plan. This money covers advertising expenses. Franchisors may advertise on T.V, radio, direct mailings, and so forth.

Another thing you want to do is ask questions. This will help you know where the franchisor is with the marketing plan right off the bat. Here are some good questions to ask; do you know and meet the needs of your customers? Do you know what your customers like?

If you do not know much about the franchise you are thinking of buying into, I suggest you ask for more information. You can call their corporate headquarters and ask for all public information on the franchise.

Another way to get an idea of where a franchisor is with their marketing plan or how it works is by asking for the table of contents of the marketing support guide for franchisees. There may be some sensitive information in the guide, but if you request the table of contents, you will have an idea of how the franchise markets its product.

The best way to get info on a franchise’s marketing plan is by talking to franchisees involved with that franchise. You should ask about their sales and what kind of avenues for advertising work best. You should also ask what they would change about their marketing plan. Another good question to ask them is whether or not the franchisor is receptive to the franchisee’s input. Ask if their ideas of been taken into consideration or if they have been used.

Are you thinking about selling your franchise? Or for you who are thinking of buying, do you want to know what kind of rights you have to sell your future franchise? Here’s the inside scoop.

Usually franchisees don’t have many rights to selling their franchise. Franchisors like to be in charge and monitor who comes into their franchise system. The franchisors have special rights before you can even try to sell the franchise. The franchise agreements are usually made to protect the best interests of the franchisor. This agreement has buy-back and right to refusal clauses in it. These clauses say that the franchisor can either buy back the franchise before you can accept any offers from outside parties or they can refuse to buy back the franchise before you entertain offers. These clauses are obviously benefiting the franchisor because they can buy their franchise back for a low rate and sell it to a new franchisee for a higher rate to gain profit. If the franchisor decides to exercise their first right refusal clause, they have to match the offer from an outside buyer. To know how much the franchise is worth, sometimes franchisors will send an appraiser out to make an estimate. This is something that you may have to pay for, but the franchisor will choose who does the appraisal. Franchisors usually send out a appraiser if the outside buyer’s offer involves a non-cash payment, such as real estate.

So now that you know what kind of rights you have, make sure to think of all your options before doing so.

Ever wonder if you can negotiate a price on franchises? Well I have good news for you…you can! Okay, not always, but sometimes franchisors are willing to go down in price. Here some more info on it.

First off, know that large and well known franchisors will not negotiate. Why would they need to? Their franchisees are happy and proven to be successful. So why would they settle for anything less? They do not need to negotiate to get franchisees, they know there is potential franchisees wanting to buy into their company and will do anything it takes.

Another thing you should know is that some states won’t allow franchisors to negotiate the price. They don’t allow this because they want the contract that you sign to be the same as the other contracts they have on file. Franchisors being nonnegotiable are also due to administrative costs. It costs money to make adjustments to a UFOC or maintaining different contracts. Even if by some miracle you end up negotiating with one of these franchisors, the other franchisees will resent you and it will cause a lot of drama in the company. Some franchisors are flexible in some areas. They may be flexible in territory assignments, training, or signage.

However, new franchisors are much more willing to negotiate. They will even negotiate the franchise fee! They are usually willing to do anything to expand. So before you ask a specific price, talk to some other franchisees and see what kind of deal they got so they you do not pay more than you really need to.

Good luck with bargaining!

Hey to all you young college graduates!

Are you interested in buying a franchise right out of college? Are you thinking that buying a franchise is the best way to get established financially and professionally? This is true to some extent but usually it doesn’t turn out the way you plan. A lot of college graduates have these amazing ideas and don’t really think things through before jumping into something and being way over their head. Here are some things to think about.

The first thing you want to do is learn to hire and lead/manage people. This is where most college graduates get overwhelmed. You should definitely get some hands-on experience in this area before you take on a franchise of your own. Start watching your manager more carefully, taking notes, and listening to what other have to say about them to see what areas could improve so that you know before you get in the game.

Another thing that might help you before you buy a franchise is by working in the franchise field you are thinking of buying into. For example, if you are thinking of buying into a coffee shop, try working their and moving up to management to get a better feel of the business and see how it’s run by its owner.

Another way to prepare yourself is by finding an internship or mentoring program with an owner of a franchise. This is a great way to see exactly what it takes to be a franchisee and get some practice in.

Again, take some time to think about entering into the franchising business. If you are going to need to borrow money to pay for it, this is an even bigger reason to really think it out.

Good Luck!

This is to anyone who is thinking of exiting their franchise. You may want to exit it because you are under too much pressure, not able to spend enough time with the family, or maybe you are just not making a profit on the franchise. Some franchisees think that they are guaranteed success; however, this is not true.

When thinking about exiting a franchise, you want to make sure that you don’t make any rash decisions. If you are having some troubles with the franchise, write out the problems you are experiencing and go over them with your franchisor. Your franchisor may be able to help you come to some solutions or you may just decide that you are done. Another person you may want to talk to are other franchisees. Expressing your concerns to them may be rewarding. They may be able to give you some first-hand advice.

So after the decision making process you decide that you want to exit the franchise, review your franchise agreement to make sure you can sell your business and transfer the agreement to the next owner. You should definitely let the franchisor know because they may want to have a hand in picking the next owner. The franchisor also may want to purchase it from you, this is called “right of first refusal”. If your franchisor decides to pass on the offer, you NEED to get proof of what they said in writing. Another reason why you want to talk to your franchisor about it is because they may know of a franchisee who may want to purchase it. This is usually your best bet to get rid of the franchise quicker.

Last thing but definitely not least, you want to look over the post-term covenant in your franchise agreement to see what duties and rights you have when exiting your franchise. I would definitely recommend having your lawyer look it over so you can have a better understanding about the terms agreed to.

Hey out there!

Are you interested in buying a foreign franchise? I found some info about whether or not it is a wise decision. There are more foreign franchises coming over to the U.S. every year, such as Kumon Math, Reading Centers and so forth.

Are you the pioneering-type who likes to the first to try things? This can be a lot of work and start off on a rocky road. However, there are benefits to being the first ever to bring a foreign franchise over to the U.S. For example, some franchisors will cut the costs such as, the franchise fee or the cost of marketing materials because you are taking a huge risk with their company. You should feel free to ask whether or not they are willing to give you this kind of discount. If you are drawn to things such as this, here are some things you should do before you make a decision.

First off you should definitely investigate the franchise you are thinking of. You want to find available info on its history, product, performance record, and future goals. You also want to investigate how well the franchise is doing in other countries other than the U.S. You also want to find out how well the franchise is doing in the U.S. by contacting the master licensee based in the U.S. If the master licensee is a dimwit, you probably do not want to go with that company. If the master licensee is knowledgeable enough to answer your questions, then that is a good sign. This will determine if down the road the master licensee will be able to help you out when you’re in a jam in terms of sales and finances.

You will also want to request the UFOC for the franchise, just as you would with a U.S. based franchise.

Another thing you want to consider is whether or not the foreign franchise will be popular in the place you want to start it. Sometimes foreign franchises are a huge hit because it’s new and exciting, but sometimes it can be a huge dud because the people in the area do not like change or exotic things. You want to understand the cultural trends in the area you are thinking of entering. For example, say you want to open up a Thai food restaurant. Before you enter the area you want to think of these questions: Are the people here adventurous? Do they like exotic food? Are they willing to step out of the normal foods they eat?

That’s all I have for today.

FranGirl

Ever wonder how franchisors usually assist franchisees? I found some very interesting info. Franchisors are very helpful! They provide assistance in a lot of ways.

Some franchisors assist franchisees financially by providing financing programs. Not all franchisors provide this kind of service.

Another thing some franchisors help with is finding a location for your franchise. Sometimes franchisors don’t let franchisees have a say, but franchisors definitely have a better knowledge in how to pick a location. They have first-hand experience.

Franchisors always provide training and an operations manual. The operations manual gives very detailed instructions on how to carry out their operating system. It also provides rules, standards, and specifications. It also lets you know the roles of employees in the business as well as responsibilities and tasks. Franchisors also provide intensive training before you open your franchise. Sometimes training takes place at corporate headquarters so will have to consider travel expenses. Most franchisors also provide periodic training and seminars.

Franchisors also help you advertise. Usually all the franchisees contribute money to advertising and then the franchisors get it done. The advertising could be on T.V., radio commercials, and through public relations. Franchisors also use direct mail campaigns.

Franchisors also provide ongoing support. This is administrative support, technical support, and financial support. Big franchise companies usually have a hotline you can call. They also provide support with employee issues and other things you may need advice on to keep your franchise operating.

Have you ever wondered what it is like to be a franchisor? Well today I did some research and I am going to share with you what is required of franchisors and why it is better to be a franchisor than to open a solo business.

The reason why being a franchisor is better than opening a chain of solo businesses is because you do not have any capital investments in your franchisee’s units. This is a good thing because you have less liability for the actions of franchisee’s and their units. Another good thing about being a franchisor is that your franchisees are looking to have a successful business. Not like a regular manager, franchisees stick around a lot longer and tend to care more about their jobs.

Now that I told you the advantages of being a franchisor, here are some things that are required of you. First, you must keep all your promises to your franchisees. For example, if you tell them that you are going to give them a specific amount of advertising, you better stick to it or you will have angry franchisees and it is not good to lose their trust. Another thing that you must do, which is required by the law, is to provide material information about the company for potential franchisees. This material has information about the company’s legal history, financial information, and any other information on the company. Another thing that is required of the franchisors is to provide training for the franchisees and provide detailed operating manuals. Training is usually ongoing. Franchisors also provide support for their franchisees. The franchisees rely upon you because of your proven system.

So that’s what it looks like to be a franchisor. Until next time, keep it real.

Are you wondering what it takes financially to franchise or how to get funding? I did some research especially for you then!

Franchisors usually require you to get funding, unless you are a home-based business. The purpose of this funding is to put money down until the franchisor sees a profit. This money is for cash advancement as well as for franchise expenses. Lenders expect franchisees to have at least enough money to pay 30% of the expenses. The person you want to talk to more in depth about funding is your future franchisor. They have all that information in their UFOC. Franchisors sometimes have agreements with lenders or have their own financing agreement. Franchisors sometimes help carry the burden of the funding. This is called “debt financing”. The franchisor might also have hook-ups with companies who lease or finance out equipment needed for a franchise. Equipment can be 25-75% of your expenses.

These are just a few ways to get funding. You should always look at all your options. Asking family and friends if they know of any lenders is another way to find the most efficient way to get funding. You can also get funding from banks, however this is a risky thing because banks like collateral. Some people put their houses up for collateral and end up losing everything they have. You should never put more than you can handle losing up for collateral. If you do end up going with a bank loan, make sure you go in knowledgeable and looking like you are successful. This means having a financial business plan.

Another way you can get a loan is through the SBA (Small Business Administration). The SBA guarantees bank loans that will cover 90% of your loan because they limit their liability.

Last piece of advice is to make sure to go with a lender that specializes in franchise loans so that you will get all you need for your new business.

Hope that this is helpful!

Hey out there! Today I was researching what an electronic UFOC is and the advantages and disadvantages of it are. UFOC, Uniform Franchise Offering Circular, gives all the details about a specific franchise. It will tell you what it entails being an owner, how much money is needed, what qualifications are needed, and so forth. There are two different ways to give franchisees, suppliers, and attorneys a UFOC: electronically or by printing it out. Some people think that it is more efficient to send it electronically and some think it is easier to send it by printing it. Here are some advantages and disadvantages to electronic UFOC’s.

The advantage of it is that a franchisor can save money on printing paper, mailing, and handling costs. You have to understand that UFOC’s is a huge document. Another reason why electronic UFOC’s are efficient is because you can do a key word search and find specifics that you are looking for in the document. For example, if you are looking for information on franchise fees in the UFOC, you can do a find key word search and go straight to that section without flipping through pages. Another reason why electronic UFOC’s are efficient is because a franchisor will be more willing to give a franchisee a UFOC if it is not going to charge him a ton of money. It makes UFOC’s easily accessible to people who want to know more about a franchise.

Some disadvantages of an electronic UFOC are that people have so many problems with their internet access. Some people have slow internet connections. Many franchisees found UFOC’s too hard to read on the computer.

There are some solutions to these problems. The first idea is that you can use both methods for UFOC’s; you can print a copy as well as have it electronically. Another way you could make sure it works, is saving it on a disk instead of having it available on the internet. The positives to having it on a CD are that you can mail it to a potential franchisee and it would be less shipping and handling. Another way that electronic UFOC’s would work is if you only used them for transfers, renewals, or re-disclosures.

That’s about it for today. Hope this is helpful!