Apr 7

Technology helps franchises! By integrating point-of-sale (POS) systems, franchise companies such as Baskin-Robbins is now able to control / update menus, enable digital marketing, as well simply the rolling out of new products. What are your thoughts on POS technology?

Baskin-Robbins Taps Par to Drive Efficiencies, New Capabilities for Franchisees Baskin-Robbins has selected ParTech as its exclusive provider of point-of-sale (POS) systems to the company’s United States stand-alone franchise network. PAR’s Boundless Hospitality vision delivers software, hardware and service solutions to the restaurant, hotel, spa and retail industries. PAR’s unified POS solutions will simplify Baskin-Robbins’ new product roll-outs, improve its ability to control and update menus, and enable digital marketing. “PAR’s technology solution will give Baskin-Robbins and our franchisees the necessary tools and flexibility to better deliver exceptional experience to our guests,” says Daniel Sheehan, chief information officer for Dunkin’ Brands, the parent company of Baskin-Robbins. “With its ease of use, efficiency and consistency, the PAR system delivers top-notch performance and provides capabilities that will help streamline a variety of day-to-day operational tasks for our franchisees.” The PAR systems selected for Baskin-Robbins’ franchise stores feature PAR EverServ PixelPoint POS software and a choice of PAR EverServ 2000 or PAR EverServ 6000 POS hardware. EverServ PixelPoint software is designed to enhance restaurant performance through capabilities ranging from menu-screen customization to perpetual inventory management and detailed reporting. The EverServ 2000’s sleek compact design is ideal for environments where space is a premium. The EverServ 6000 is a high performance, rugged and energy efficient POS terminal that is designed to achieve a low total cost of ownership. PAR is also providing Baskin-Robbins franchisees comprehensive service and support through the company’s PAR EverServ Services offering. PAR will provide integrated product delivery services designed to provide a single point of contact to facilitate hardware, software and service delivery. After implementation, PAR will provide franchisees onsite service and help desk assistance across the Baskin-Robbins USA stand-alone store locations. Also included in the PAR support package are professional services, hosting services and maintenance.

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Feb 16

As economic downturns continue on a global scale, more and more people are starting to think twice about investing in a franchise. But despite the recession, several top franchises belonging in various industry stay remarkably strong. This only shows that prospective entrepreneurs have nothing to worry about owning a franchise business, especially if their chosen franchisor already has a proven track record of success and profits in its industry. The following list is a compilation of the top 10 franchises:

1. Subway
Subway is definitely one of the fastest growing franchises in America. In fact, Subway franchises in the country alone is around 22,000. Subway franchises in foreign countries are about 10,000. Subway branches are located in small areas of cities, thus, proving the company’s expertise in marketing and promotion. This year, Subway is the number one franchise choice, for it continuously open new branches on a weekly basis.

2. McDonald’s
McDonald’s has an impressive number of franchise locations: 12,221 in the US; 1,070 in Canada; 12,510 in foreign countries; and 6,357 owned by the company. The McDonald’s corporation has impressive marketing and advertising programs. As such, the company’s franchise costs may begin at $995,900 to $1,842,700. A franchise fee of $45,000 is also required by the company.

3. 7-Eleven
Started by Joe C. Thompson in 1927, 7-Eleven Inc. convenience stores opened across the globe with more than 30,000 branches in total. The start-up cost for a 7 11 franchise ranges from $40,500 to $775,300, with additional franchise costs of $10,000 – $611,600.

4. Hampton Inn
The fourth name in the list of 2010 top franchises is the Hampton Inn. Instead of staying at five star hotels, more travelers prefer cheaper accommodation options. Hampton Inn, a mid-priced hotel chain, is currently the best option of consumers so far. The Hampton Inn franchise has over 1,595 branches in the country and about 70 more sites in other countries.

5. Super Cuts
The Super Cuts franchise has 1,027 locations within the US and one site in Canada. The company’s branches are commonly found in strip malls. Super Cuts’ growth rate may be slower than other franchises, but it has been consistent for the last couple of years.

6. H&R Block
H&R Block is a respected company in the tax preparation and filing industry. It now has 3,999 franchises across the country, 418 branches in Canada, and 85 sites in other countries. With these figures, H&R Block deserves to be on the 6th spot of this year’s list of top 10 franchises.

7. Dunkin’ Donuts
Widely recognized for its coffee, baked goods, and doughnuts, Dunkin’ Donuts is 7th on this list of 2010 top 10 franchises. The company has over 6,400 operational branches in the country and about 8,800 branches worldwide. The company is expected to grow and expand further for the next 20 years.

8. Jani King
With Jani King’s consistent growth and expansion, it is definitely one of the top franchises of the year. The company is well-recognized for its impressive commercial cleaning solutions. It currently has 11,000 branches in the country and over 12,000 sites in other countries.

9. Servpro
Founded in 1967, Servpro is basically a painting company. It offers services such as cleanup, repairs, and disaster restoration. Servpro came 9th on this list of top 10 franchises of 2010, as it successfully opened more than 1,500 branches in the US.

10. ampm Mini Market
ampm is quite popular among youngsters for its delicious hotdogs and cold beers. Today, the ampm franchise is proud of its 1,100 sites within the country and over 3,000 more locations across the globe.
Now that you know the top 10 franchises of the year, would you consider investing in any of these franchise opportunities?

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Feb 16

What is Due Diligence?
Invented in reference to the country’s Securities Act of 1993, due diligence has taken more legal definition for the past seven decades. Right after the stock market crash of 1929, business brokers needed to follow detailed procedures before they offer and sell stocks and bonds to interested investors. While a lot of things have definitely changed, lack of proper control on Wall Street was among the many causes of the Great Depression. These days, due diligence means “Do your homework”.

Use Due Diligence When You Buy a Franchise
In planning to acquire a franchise, due diligence is said to be the most critical part. All franchisors are required by the state and federal laws to prepare and present necessary documents regarding their companies to prospective franchise owners. However, there are other things apart from these documents that you need to assess when buying a franchise. There are other things you need to consider that you cannot obtain from the parent company. Below you will find the due diligence checklist that you need to look into when buying a franchise:

Know the Due Diligence Process
Examine your expenses. You ought to compare the franchise cost and the price that your budget can afford. If you happen to need more money, determine as fast as possible where you will get them, either from banks or from other lending institutions.

Understand the market. Carefully examine the franchise and how well other owners operate their locations. Note that it is important to assess not only the franchisees of your prospective franchise, but also its competition. A stagnant and decline in an industry are generally signs of trouble.

Explore other opportunities. Search for franchise opportunities that are related to your skills and interests. To start off, find the industry you are most suited with. Trim down your list of prospect industries and compare each field in terms of operational methods.

Check out corporate assistance and training. All franchisees are to be provided with the necessary training and assistance. Some take these more seriously than others. A small business usually requires one to two weeks of training. Bigger companies require a more comprehensive training program.

Check out other franchisees. Before you purchase a franchise business, make rounds in some franchise locations. The franchise owners are the ones you can rely on when it comes to unbiased feedback about the business. They can openly give you information regarding your prospective franchise business. Use their opinions to assess if your prospect franchise is worth buying after all.

Examine and understand all documents. A franchisor is required by law to provide necessary legal materials to all prospective buyers. Carefully examine these material, from the money involved down to the signatures. UFOC or Uniform Franchise Offering Circular explains the franchise system, the number of existing franchisees, and the financial health of the franchise business. It is stated in the franchise agreement all the rules and rights of the franchise location owners. You have the option to hire a business attorney who can guide you through the legalities of the entire process.

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Feb 16

Franchise questions to keep in mind 
A franchise agreement is a comprehensive legal document that often contains more than a hundred pages. There are even instances when even experts like franchise lawyers find it challenging to explain the legal document to potential franchise owners. However, if you familiarize yourself with the right franchise questions and the people whom you need to ask, buying a franchise will be a lot easier for you. The answers of existing franchisees are as valuable as the answers of the parent company. Here are the top 20 franchise questions you need to keep in mind -12 questions for the franchisor and 8 for existing franchise owners:

Questions to ask a parent corporation:
1. What is the total cost of buying a franchise? A franchise agreement should state the total figures for the franchise and royalty fees. However, the amount for other expenses like inventory, location, and vehicles is declared in values like $200,000 to $500,000, which is actually quite high. It should be pretty easy for the franchisor to further narrow the ballpark figure based on real estate values in your location and other variables.

2. Do you offer other franchises in the system? If there are other franchises, how many? The number of franchises does not necessarily show the franchise’s market standing. In fact, you should not be looking at the number of franchises, but rather on the company’s history and ensure a well-tested franchising system. A high-risk opportunity, on the other hand, is also a tempting offer. There are franchisors that provide master franchising rights to an entire state or even a national region.

3. Where are the locations of the franchise? If you choose a nationwide franchise, you have the advantage of mass buying power for inventory and supplies. A regional franchise, on the other hand, may provide a better range of services and products based on local demand. Remember that products and services that have good selling turnout in either coast may not have the same following in Midwest.

4. Are there locations that closed down? What are the reasons for closure? There is a law that requires all franchisors to share information regarding the number of franchisees that are no longer operational in their system. A good standing company should be honest and open about this aspect and must explain to prospective franchisees the reason behind the failure of some of their locations.
5.   Is there an existing lawsuit between the parent company and the franchisees? This is really important for you to know as you will be able to see how the parent company handles disputes within its franchise system.

6. How experienced is your management team? It is essential to understand the experience and background of the upper management in buying a franchise. Take note if there have been major turnovers among the franchise’s corporate players. If so, the franchising system of the company is unstable.

7. Who are your competitors? What is your advantage against competition? While you may already know the answer to this question, it still best to hear what the franchisor has to say about its competition in the market.

8. What will be my territory if I join the franchise? How will you protect my business in such territory? For your location to be successful, avoiding other franchisees is a good move. A small business area will not be able to generate the cash you need to succeed. 

9. How will your corporate team support me in the process of choosing my location? You need to discuss the business location to the franchisor and a real estate expert if you intend to buy a retail franchise. You must tour around your prospective locations and choose a spot with good traffic and visibility.

10. How much input is required from franchisees to contribute in expenditures and ad placements? Most franchise agreements include the costs for the national, regional, and local advertising and marketing. These are the inclusions of the royalty fees that are paid monthly or yearly.There are some franchises though that do not require promotional input from their franchisees. However, they can earn bigger sales when they listen to the advertising and marketing ideas of their franchisees. 

11. Do I need to order and buy certain items or equipment directly from the franchisor? To maintain the consistency and quality in the standards of the company, franchisors have a list of inventory and supplies to be given to their franchisees.

12. What happens if the parent company is sold? Before you buy a franchise, it is best to inquire about the company’s exit strategy. It is easier for you to plan on necessary transition if you know the company’s moves beforehand.

Learn the right questions to ask existing franchisees: 

13. How long before you start earning profits? The franchisees’ answers to this question will surely give you an idea of what to expect. Do take note though, that every franchise is different based on location, clientele, as well as the entrepreneurial skills of the owner.

14. Was your opening cost in line with the amount you expected? The answer to this question gives you an idea of how much you’ll be spending on the opening day of your location.

15. Is the support of the parent company enough? Since you’ll be expecting support from your prospect franchisors, this information is very important. Take note of the concerns stated by every franchisee.

16. Are there initial and ongoing trainings? Once you have determined the training shortfalls experienced by other franchisees, you will be prepared to address similar issues during your own training period.

17. Has there been an issue between you and the parent company? You have asked this question to the franchisor, it is best to hear the side of the franchisee.

18. What do you think is the company’s major competitive advantage and disadvantage against its competitors? This is to give you an idea of how the company deals with competitors.

19. Would you alter anything on the present promotional methods of the franchise? You see, some promotional methods rise impressively to the corporate level, while others unfortunately fall flat at the retail level. 

20. If given the opportunity to do it all over again, would you still choose to purchase this franchise? A positive answer is a good sign that the franchise is a wise opportunity to get into. Better move on to your list of prospect franchises if the answer is negative.

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Feb 16

It could be a challenging task for you to find the franchise that best suits your preferences and business requirements due to the current condition of the economy and wide selections of franchises to choose from. You see, there are certain factors you need to take into account to check if a certain franchise opportunity meets your goals and resources. The business area or location is also an important aspect in the said process. It can greatly affect the processes involved in owning and running a business. Keep in mind that your target market has a lot to contribute to the success of your franchise business. So how can you assess if a certain franchise opportunity will prosper in your chosen business location or area?

Franchise location considerations
When you decide to acquire a franchise, you need to bear in mind that the characteristics and location are some of the most important factors that contribute to the success of your business. As such, you should know the needs of consumers and see if the franchise area can comply with these demands.     
The most convenient method to determine the success factors of a business is to assess the location’s general population and client base. You need to learn about the income level of the people who are likely to utilize the services or products you are planning to sell.  Also, you must know the age group and the population density of a franchise location. These factors have different impacts, depending on what type of franchise opportunity you wish to buy. Take for example the success rate of a home cleaning business which relies significantly on the high-income levels of every household in that franchise location. This may not be the main issue to franchises in other industries.

You must clearly know your success potential in all franchise areas before you commit on a certain franchise opportunity. Carefully study the area characteristics that made one venture successful before you push on establishing your business in other franchise areas or locations. As the saying goes, “always ask, when in doubt.”

Valuing a prospective franchise area
Once you know the factors to successful franchise ownership, you should be ready to assess your prospective franchise location. First off, know the main characteristics of your chosen franchise area. Some of the facts that you should know include the total population and density, which need to meet your sales goals and revenue requirements. You must know if your franchise location can get enough clients.

Next in the list is to study the specifics. Determine if the factors that contributed to the success of the original franchise exist in the location. Getting all the details you need for assessment is now easier, for you can check them all via government databases.

Lastly, you have to make projections. Check out the dominant trends in your prospect franchise areas. Determine the market growth and potential of the franchise area. See if it’s really the best time for you to introduce your franchise business in the proposed area. You need to use your insights and experiences in assessing these data and statistics.

Define franchise area developer
To make the most of your investments, you must choose franchise opportunity with the most promising growth and profit potential. You can become a franchise area developer if you have the talent in seeing the success potential of a franchise opportunity in a particular business location. Most franchise area developers own several franchise sites, thus, creating a bigger region. To raise brand awareness within your territories is one of the benefits of becoming a franchise area developer.  Other franchise owners cannot operate in your areas without your consent. As you take on more responsibilities as a franchise area developer, you will be rewarded with bigger profits and more rewards in return.

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Feb 16

Almost all aspiring entrepreneurs these days prefer to buy and own established franchise businesses than start one from scratch. While the United State’s economy is now slowly recovering from recession, many Americans are still financially challenged due to its effects. Entrepreneurs are now wary of investing big money on a new business so they opt to engage on a franchise business instead. Note though that buying a franchise is still a huge business decision to make. It requires a lot of time for researching and assessing options and possibilities. Below you can find some of the most essential factors you need to know and understand about franchise costs.

Franchise costs to consider
The costs to own a franchise include initial and ongoing franchise costs. Thorough researching and assessing of these two costs are a must before you sign a franchise agreement. Remember that financial issues can happen even in the most lucrative offers or deals.

You are required to pay an initial fee to open a franchise. The initial fee commonly starts with several thousands of dollars. A franchise ownership fee is usually around $20,000 to $30,000. Moreover, home-based and mobile type businesses generally require lower franchise fees. In addition, franchisors may also require other necessary financial obligations.

Aside from the initial fees, you also have to buy a franchise ownership. Franchise ownership fees are higher due to some factors like professional fees and the hiring and training of employees. Other expenses such as operating licenses, insurances, inventory and equipment acquisition, and signage all contribute to additional franchise costs. All expenses have to be considered and noted to determine the expected cost of a franchise.

Franchise costs in different industries
The initial and ongoing fees are just a fraction of the entire franchise cost. When you buy a franchise, you should have the asking initial investment of the franchisor, plus a working capital that can support your business on the rough first years until you develop a solid client base.

The total investment cost significantly varies between one industry and another. Here are examples of investment cost range in some of today’s largest industries:

• Auto-repair enterprises –  $200,000 to $300,000
• Fast food chains – from $250,000 to $1 million
• Full-service restaurants –$300,000 to $3.5 million
• Accommodation and lodging industries – $4 million to $6 million

Entrepreneurs who are looking for business franchise ownership in smaller scale must look into mobile and home-based business franchises. These businesses have the lowest costs to open and require less expenses to run. 

All franchisors have their own set of requirements and procedures, thus, making franchise costs different among businesses within the same field. Initial fees commonly include all the training, support, as well as assistance on business site selection and equipment costs.  Since there are no standard policies or rules that apply to costing, you will need to consult a trusted business broker to have your prospective business assessed for a fair and reasonable value estimation.For instance, the inventory costs can start from $20,000 to $150,000.

Your working capital is another factor to consider. This is really important in opening a franchise, for this will give you the funds you’ll need during the first few months or years of operation until your business starts to earn a stable income. Keeping all these in mind, the costs to purchase a franchise business can be higher or lower than what you initially expected.

Not thinking about the money and effort you need to invest to own a franchise business, this career move can really be a fulfilling and rewarding experience. Considering the lower risks and investment costs, it is more convenient and easier to purchase a franchise than start one from scratch. Your investment money can double in no time as long as you do it right. Ready to calculate the cost of your chosen franchise opportunity?

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