The Best Kept Secret in Franchising

If you really want to own your own business, there is a franchise that will fit every requirement. Do you want a home based business? Do you want to work on the business part time? Do you want to be a passive owner? Do you want a business that operates during standard business hours, Monday through Friday, 9-5? After Meta-Franchise Consulting finds a franchise that will meet all of your requirements, the next question is: what type of franchise arrangement is best for you?

There are three franchise arrangements that a new franchisee can choose from before signing the franchise agreement. The first arrangement is a single-unit franchise. In this arrangement, the franchisor grants the franchisee the rights to open and operate one franchise unit. This is the simplest and most common franchise arrangement. Some franchisees start out as single-unit operators and then buy the rights to a second or even third unit after the first becomes successful.

The second arrangement that a franchisee can choose is area development. In this arrangement, the franchisor grants the franchisee the rights to open more than one unit during a specific time, within a specified area. For example, the franchise agreement may state that the franchisee will open three units in a three year period within the county in which they live. The benefit of agreeing to multiple units up front, as opposed to adding on later, is that the franchisor will often discount the franchise fee for your second and third units.

The third arrangement that a franchisee can choose is a master franchise. This arrangement is similar to the area development in that the franchisee is granted the right to multiple units. In addition to multiple units, the franchisee is granted the right to sell franchises to other people within their territory. When the franchisee takes on sub-franchisees, they take over many of the tasks of the franchisor like training and support. In exchange for taking on those tasks, the master franchisee receives a percentage of the franchise fee paid by the sub-franchisees and a percentage of each month's royalties. Additionally, the franchisor will often significantly discount the franchise fee for each unit opened by the master franchisee and the master will pay reduced royalties on each unit they own. The master franchise arrangement may be the best kept secret in franchising, and for the right franchisee can provide an amazing return on investment.

Please contact Meta-Franchise Consulting at www.metafranchiseconsulting.com or metafranchiseconsulting@gmail.com for more information.

Metro franchises rise as proven models hit the ground running

This article from The Denver Post reports that the number of franchising units is expected to grow by 2% this year and Denver is expected to attract more than it's fair share. Job losses, coupled with entrepreneurial spirit, an educated workforce, and commercial landlord incentives are making franchising an attractive option for Denverites.

Please contact Meta-Franchise Consulting at http://www.metafranchiseconsulting.com/ or metafranchiseconsulting@gmail.com for more information about franchise availability in Denver.

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Blood, Sweat, But No Tears (Franchise Times Magazine: June-July, 2010)

Blood, Sweat, But No Tears (Franchise Times Magazine: June-July, 2010)

Freshii is one of about four hundred franchises in Meta-Franchise Consulting's network. This article was published in Franchise Times Magazine and provides a great look at the concept and the founder. When you buy a franchise, it's important to believe in the concept. At least as important is believing in the management team. Matthew Corrin has a great story, great ideas, and will take his business far. This is an amazing opportunity for the right entrepreneur.

Please contact Meta-Franchise Consulting at http://www.metafranchiseconsulting.com/ or metafranchiseconsulting@gmail.com for more information about Freshii.

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20 Questions for the Franchisor

When you enter into a franchise agreement, you are taking on a business partner for the life of your franchise. The Franchisor will provide the initial training and on going support for everything from technical issues to marketing advice. To make sure you know exactly who you are going into business with, it is import to thoroughly interview the Franchisor. Many clients tell me they know they should be asking a lot of questions, but they don't know exactly what to ask. Here is a list of questions to help you get started. As you hear the answers to these questions, you will probably think of many follow-up questions that will provide you with the information you need to make an informed decision.

1. What are the strengths of your franchise?
2. Where do you see this franchise system in 5 years and what steps are being taken to reach that goal?
3. Who is your competition?
4. How are you viewed in the consumer marketplace?
5. Can you give me a break down of all of the expenses associated with getting started (franchise fee, equipment, product, training, real estate, etc.)?
6. How much additional capital (working capital) will I need after I launch my franchise?
7. Please explain the contractual responsibilities if I join your franchise system (length of agreement, renewals, etc.).
8. What can I expect to earn if I join your franchise system and do you disclose this amount in an Item 19 Earnings Claim?
9. What does your training program look like? What kind of ongoing training do you offer?
10. What goods or services do I have to purchase directly from you or your preferred vendors, and can I competitively shop for a better deal?
11. Is there an advertising fund that I must contribute to and what rights do franchisees have to audit that fund?
12. What is my protected territory and how is it defined?
13. What are your plans to develop additional franchisees in my state and how will that impact my franchise?
14. How many of your franchisees have failed and why?
15. Will you assist me with financing, real estate selection, and construction?
16. Have you been sued or are you currently being sued?
17. How have previous franchisee/franchisor disputes been settled?
18. What happens when I want to retire or sell my business?
19. If I sell my business and leave the franchise system, what am I forbidden to do?
20. What is the biggest complaint from your franchisees?

http://www.metafranchiseconsulting.com/

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Where There's a Will, There's a Way

You and your franchise consultant have identified the perfect franchise that meets all of your requirements. You called existing franchisees and love what they said about their experience in the system. You reviewed the FDD with a franchise attorney. You have the support from friends and family. You are ready to sign the franchise agreement and become a franchise owner. The only thing standing in your way is money, or more specifically a lack there-of. Traditionally you would put together a business case and go to your bank for a business loan. Unfortunately, the credit markets are tight and traditional funding is very difficult to come by. Thankfully budding entrepreneurs have other options. Benetrends and FranEquity can make your dream of business ownership a reality.

Benetrends has been in business for over 15 years, helping people use retirement savings to fund a new or existing business. Benetrends will set up your company as a C-corporation. They will roll-over your existing 401(k) into your new company's retirement plan, and then use the money to buy stock in your new company. You will not incur any early withdrawal or tax penalties. You can use cash generated from the stock sale for legitimate business expenses, including a salary for yourself. You and your employees can make contributions from paychecks to the retirement plan to save for the future.

FranEquity is another option to secure financing for your franchise. FranEquity is essentially Match.com for franchise financing. At FranEquity, you publish an investment opportunity to the investing community. Angel investors, private equity groups, and traditional banks will review the opportunity and start a dialog with you if they are interested. Through this channel you might be approached by people looking to invest in your company or loan you the money you need to get started.

Meta-Franchise Consulting looks forward to working with you to secure the financing you need to make your dream of business ownership a reality.

http://www.metafranchiseconsulting.com/

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The Currencies of Trade

The following post was written by Pam Duskocy, Director of Business Development for Schooley Mitchell. Pam sends out a newsletter on a regular basis. This one really struck a cord for me and I'm excited to share it with you.
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The Currencies of Trade
Every Franchise system should have a clear understanding of the following concepts. In addition, they should have a clear marketing strategy to help their Franchisees communicate to customers and prospects about how they will deliver these currencies as they operate their Franchise.

Trade. Give something to get something. Our inhabited globe has come a long way since the act of trade meant that ‘I’ll give you one caribou if you give me three baskets of carrots and a cord of wood’. However, that same basic tenet still drives all economic transactions. Value for value is the test. If we can create more value then we can get more value back when we auction ours. The only difficulty is that the definition of value is ever-changing. Therefore it would make sense that if we can figure out who defines value, we will be able to create and deliver more of it.

Remember from the discussion about Basic Business Concepts that ‘It’s all about the customer’. So if we accept that it’s all about the customer then it follows that the customer is the beast that defines value. Seems simple. Seems basic. Seems unchallengeable.

O.K. so how do we figure out what the customer defines as value? It seems to make sense that we need to find ways to ask the customers that we choose to serve. We need to ask them to define what they find more and more valuable. We also need to accept that the definition of today will not be the same definition of tomorrow. At some point, somebody figured out that the customer wanted a fatter caribou, and if a fatter caribou was delivered, then four baskets of carrots and some extra wood could be obtained. They probably asked the carrot guy.

Study of business customers in today’s world will reveal that there are some basic currencies of trade that hold value for the customer. Understanding these basic currencies will help to define the specific methods and characteristics that are required of the product or service you provide to meet the value definition of your customer.

Money
This is the most accepted version of currency in most people’s minds. In fact, money is used in our common language synonymously with currency. I propose that it is only one currency, albeit the one we trade with in commercial transactions most apparently.

In reality, it’s just the bridge between the caribou and the carrots. I mean, surely people don’t really want a stack of paper. No, they want the carrots if they’ve already got a bunch of caribou. Our forefathers have simply been able to structure a system where the paper can be traded for stuff, and stuff can be traded for paper – and we’re all willing to abide by this trading system.

So a dressmaker is willing to trade one of his dresses for some paper. The landlord is willing to rent part of her space to the dressmaker to display dresses in return for some of his paper. The grocer will accept the landlord’s paper for some carrots – no caribou required.

We all get this one. So if we know that one of the currencies that businesses desire is money, then our products and services must be able to help our customers gain more money. It seems simple but I’m not sure we have that goal firmly in mind when we illustrate our wares.

However, just like the system of trading stuff for paper is simple, so is the concept that we need to show our customers how they can gain more money by doing business with us. The better we can communicate that message, the more attractive our goods and services will be to our desired customers.

Time
Any desired commodity, currency in the case of this discussion, increases in value as it increases in scarcity. Although we were all hoodwinked into believing that the computer revolution of the 1980’s was going to make us so efficient that we would have gobs of time on our hands, I don’t think there are too many converts to that ascribed belief any longer.

When we discuss our clients’ need for more time in their respective businesses, during our training class for all new Schooley Mitchell Franchisees, I always relate the following story.

The scene was at a National Franchise Convention waiting for the kick-off speaker to begin the proceedings. There were several hundred Franchisors like me sitting in the convention hall, when from the back of the room this guy entered, flipping a head of lettuce up and down. He walked right up the middle aisle continually flipping the leafy orb. There were a few snickers because it was apparent to some that an inmate had gone over the wall at the local asylum.

With a determined look, and a single purpose in mind, this guy trotted right up to the front of the room, climbed onto the stage, and leapt behind the podium. With a greatly threatening look, he bellowed, “Somebody in this room tell me why this head of lettuce represents the most important concept that you must understand for your business to survive in the next decade!” He was completely fired up, spittle was flying, and he was turning red. At this point half the room was convinced of the asylum scenario, while the other half realized that this was actually the guest speaker.

Gliding down a bit from his commando high, he said, “O.K., I want to ask you a couple of questions.” He went on to say, “I want you to think back ten years, picture in your mind your local grocery store, and tell me how many square feet were dedicated to heads of lettuce at 79 cents each.” After a bit of a pregnant pause, someone in the audience yelled out, “30 square feet.”

Our now calm and seemingly rational speaker now asked, “O.K we can accept that answer, so now flash forward ten years to today and somebody tell me how many square feet are dedicated to heads of lettuce in today’s grocery store at 89 cents.” The answer came back as ten square feet.

The next question was, “Now somebody tell me how many square feet are dedicated to prepared salads at $4.95 each.” The revelation was clear. Yes, that’s where the other 20 square feet went – in fact, the current stores may even use more than 20 feet! The crowd was elated that they had solved the riddle.

Then in a very quiet, almost ominous tone he asked, “So what is that about and why does it matter so much to your business?”

His message was of course that it was about time. We are willing to pay good money, already conceded to be a valuable currency, to save ourselves time. We will pay a premium to avoid cutting carrots and cucumbers, and in my mind I plead guilty to the act.

In fact, he said, “Time is the currency of today’s economy, and you need to figure out how you are delivering time to your customers, or you will not thrive.”

The story hit hard, made a strong and valid point, and I have been thoroughly convinced of the importance of time as a currency of trade ever since. The challenge of course is to figure out how to deliver time to our customers. Before we can do that we have to figure out how we can make it clear to our customers that we will, in fact, help them to gain time through our wares.

Money and time are certainly the most recognizable and widely accepted of the currencies of trade. However, it is my belief that we also trade in Security, Knowledge and Prestige. These currencies will be reviewed in more detail in a subsequent release, but for now, suffice it to say that we need to feel secure, not only physically, but also that we have made the right decisions. We also crave knowledge. In fact, we live in a knowledge-based society now. The vast majority of people trade for prestige as well. Otherwise, why would we wear what we wear, drive what we drive, live where we live?

Money, time, security, knowledge and prestige make up the suite of Currencies of Trade. So the challenge is how to deliver these items, and how to make our customers aware of how we deliver them.

http://www.metafranchiseconsulting.com/

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Before there's a Franchise, there's a Concept

As the owner of a franchise consulting business, I know a lot about franchise concepts that are available to my clients today. Everyday I talk to Franchisors that are well established with great brands and interesting concepts. I had not spent much time thinking about how they got here. At least not until this week...

Through my network I was introduced to small business owner who runs a unique self-serve frozen yogurt shop. He and his business partners have differentiated themselves from the competition on product quality, business model, and atmosphere. They are passionate about their business and have aggressive growth goals. What better way to meet those goals than through franchising? When I got a call asking for help, I was very excited. Here was my opportunity to help someone grow their business AND learn a new aspect of the franchising industry.

The Franchise Alliance, of which Meta-Franchise Consulting is a member, provides two complimentary services to businesses. We help Franchisors find Franchisees. We also help business owners become Franchisors. The journey from concept to franchise is complex and costly, and it can be even more costly if done incorrectly. There's the legal side: franchise agreements, franchise disclosure documents, special state registrations, and trademarks. There's the business side: strategic planning, business plans, marketing, and branding. Then there's the operations side: operations manuals,training manuals, and sourcing. All of this to create a turn-key business that potential franchisees will want to buy. If you've never done it before, it can be intimidating. The Franchise Alliance has repeatedly done it successfully and can be a potential Franchisor's business partner for success.

I am looking forward to a long and mutually beneficial relationship with the self-serve frozen yogurt shop. First we'll establish the Franchisor then we'll find Franchisees to turn their 1 successful shop into a national household brand.

http://www.metafranchiseconsulting.com/

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