Nearly all franchises will have an interview process to determine if you are a candidate to be a franchisee. Most franchises would prefer someone with a business background, but many franchises are very lenient and are confident they can train the right individual. Along with the interview process, the franchisor will help determine the viability of their franchise in your area. In this step they will help you determine population and location details.

The next step in the purchase of the franchise is the actual buying process. Some franchises will finance a portion of the purchase price with a down payment. The purchase price of the franchise will include equipment costs, the franchise fee, and ongoing royalties. The franchise fee is charged to cover expenses related to training in the use of the brand name. Nearly all franchises will also charge an ongoing royalty fee that will either be a set price or a percentage of revenue. Again, this is charged to use the brand name and the franchises business practices.

Finally, once the purchase is complete a training date will be set. Most franchises have comprehensive training programs that will span 1 to 2 weeks. During this training the new franchisee will learn the franchisor’s specific business methods. In addition, most franchises will briefly cover the management of the location. Finally, nearly all franchisees will receive some type of marketing training. Different industries will have specific marketing campaigns that work better than others. The franchisor will have a vast amount of knowledge in this field and can convey what works best.

There you have it. As you can see the mysteries of a franchise can be solved relatively easily. A franchise can be a great choice to increase your chances of success. Franchises have a much higher success rate than an individual business start up. This has to do with the proven business practices performed by the franchise.

If you are short on cash there are a number industries that can be entered into with a cheap franchise. Commercial cleaning, carpet cleaning, and cheap food franchises are just a few industries that are ideal for low cost investments.

Author: Jeff Klingworth
Article Source: EzineArticles.com
Creditcard Currency Conversion Fee

You pay a fee to purchase the franchise, then an ongoing monthly fee which is meant to cover advertising and other support services from the franchisor. Sometimes this includes finding new customers for you, and sometimes you must do that yourself.

As with any business purchase, be very aware that not every franchise will be successful, and that you have no guarantees whatsoever that you will make a profit. It is also possible that you will make a significant loss from the start, and may never move into profit.

How Cleaning Franchises Work

Typically you would pay the franchisor for a client base worth a certain amount of annual fees. For instance you may be given 10 clients, with an expected annual spend of $20,000. The price you would pay for that would generally be about 50%, or $10,000. In most cases you would pay ongoing monthly management fees for support from your franchisor. Often these fees are around 10% of your monthly revenue.

Some franchisors even offer you credit to finance your purchase. As you might imagine this can seem very attractive to someone who is struggling financially but very much wants to start their own business. However if things go wrong this can land you in even more debt.

Your income can also disappear very suddenly because if you decide that a customer is too damaging to your business and you need to dump them, or if a customer lives too far away for you to be able to service the account, or if you lose a customer because they decide they don’t want your services any more.

Other Potential Problems with Cleaning Franchises

Cleaning franchises often appeal to people who have limited education, or whose English language skills aren’t adequate. In both cases these people may struggle with the convoluted and complex language of the franchise agreement and it is very easy to get into a contract which disadvantages them. Always get professional advice from an objective, qualified 3rd party such as an accountant and/or a solicitor.

Verbal agreements are worthless. The franchisor or his/her representative may be overly-optimistic in their descriptions of what’s being provided. Never pay attention to verbal agreements, only to the information contained within the contract.

Although you may have purchased a group of accounts, it may be that the franchisor doesn’t immediately make those available to you, and your cash flow can be severely compromised if you’ve based your business plan on having work from the start. You may need a backup plan including a second job in order to survive the first year.

Monthly management fees can prove to be an impossible burden because they usually consists of a fixed amount which you must pay whether you are earning money or not, as well as a percentage of your revenue. Also you will pay those fees even on customers that you’ve found by yourself, without any help from your franchisor.

Any accounts you have sourced yourself, from your own efforts and expense, may still belong to the franchisor. This means that if your agreement ends, you lose everything.

Most franchisors offer training but this may be poor quality or leave out the strategies and support that are essential for guaranteed success. Make sure that you’re assigned a skilled mentor who has a solid track record of success.

Where the franchisor is finding new accounts for you, it is the franchisor who sets the hourly rate that you may charge. In some cases this rate may be insufficient to cover costs of staff and equipment, meaning that you’re operating these accounts at a loss.

Very few customers of cleaning services retain their cleaner for more than a year. This means that you have very little reliability or continuity and must always be seeking new accounts. Some franchisors take advantage of this by charging you for new accounts that they provide, even though they are merely replacing what you already bought in the first place.

You can lose your franchise and your franchise fee, and be left with nothing but debt if you don’t meet your service or performance targets. Some customers are slow payers or end up not paying at all. If your franchisor sues for payment, you might still have to pay the legal costs, even though you get nothing from that.

These days it’s common for a franchisor to demand your personal guarantee of any debts or liabilities that arise. This means that your personal assets, such as your home, car, furniture and electrical equipment are immediately put at risk because they are totally exposed to potential debt.

Your contract may state that no-one in your family can join or own another cleaning business, not just while you own the franchise, but even afterwards! Some of these cases have failed in court, but do be aware of the risk.

How to Stay Safe

No matter how cheap the franchise, there is still risk. You can minimize that risk by:

Giving the disclosure document and contract to both your accountant and your solicitor. Pay attention to issues such as legal cases and failure rates, and have them explain both documents, including your rights and obligations, comprehensively.

Talking to existing and ex-franchisees. Typically the franchisor will only refer you to businesses that are successful. You need to speak with the failures also to determine whether the franchisor has faults that should be warning signs for you.

Contacting the appropriate government department (wherever you are in the world there will be a government department that administers franchise agreements) and discover what information they have for you.

Getting any verbal statement or agreement in writing. Verbal statements or agreements are totally worthless and it is madness to do any deal on a handshake. No matter how seemingly minor, get it in writing! If they won’t do that, don’t just walk away – run! Honest people are not afraid to put their claims in writing.

Precisely understanding your obligations so you can plan cash flow around fees and expenses.

Getting the truth about earnings claims and ensuring that you’ve spoken to other franchisees who have made that money from the start.

Being incredibly cautious if you’re considering getting credit to finance the deal, or to carry you through the early days before the cash starts to flow. Think carefully before exposing yourself or your family to disastrous loss.

A Safe, Easy Alternative to a Cleaning Franchise

What would you think of a business which:

You could purchase for less than $2000
Would give you 90% of that back if you decided to stop within 12 months
Had maximum monthly operating costs of less than $500
Had no membership fees, management fees, royalties or other costs
No complex contract
You were under no liability to perform and no danger of being dumped
Training and mentoring for success (with highly-qualified mentors) was completely free
Audited and published earnings were excellent
You could simply walk away from any time you wished, without liability or cost
You could develop an income stream that could continue long after retirement, and even be willed to your children to create generational wealth?

It’s well worth a look at other, better options before exposing yourself to the expense, risk and uncertainty of a franchise

You can see a fabulous alternative to a franchise here and avoid franchise fees altogether!

Author: Christine Sutherland
Article Source: EzineArticles.com
How Electric Pressure Cookers Work

Though its a little more complicated for their 7(a) loan program

“Interest rates may be fixed or variable. Fixed rate loans of $50,000 or more must not exceed Prime Plus 2.25 percent if the maturity is less than 7 years, and Prime Plus 2.75 percent if the maturity is 7 years or more.

For loans between $25,000 and $50.000, maximum rates must not exceed Prime Plus 3.25 percent if the maturity is less than 7 years, and Prime Plus 3.75 percent if the maturity is 7 years or more.

For loans of $25,000 or less, the maximum interest rate must not exceed Prime Plus 4.25 percent if the maturity is less than 7 years, and Prime Plus 4.75 percent, if the maturity is 7 years or more.”

SBA Franchise Loan:

So you’re thinking of buying a franchise. As an intelligent and driven entrepreneur you realize that although the risk of starting a business is much greater than buying into a franchise you know you may need additional funding, whether it be from personal funding from the franchisor, or perhaps a Franchise loan from a commercial lending company, or financing from of the franchisor’s businesses.

Another route, if the franchisor offers to help, is to get a loan from a bank. If you do this you should see if you are eligible for a SBA guaranteed loan. The first thing that you need to do is check with the bank and the SBA concerning your eligibility. Once you confirmed your eligibility do what you can to get this particular franchise registered with the SBA registry of franchises, assuming it wasn’t already on it.  Once it is, your application for a franchise loan guaranty you should be able to get your money in no time.

Well why should you consider an SBA loan: well the SBA doesn’t actually loan directly instead guaranteeing 75% the loan for the bank or lender allowing less risk on their part which means you can ask for more money up to 2,000,000 dollars! All you have to do is in your application is show the SBA your integrity, responsibility, character, and financial record, and plan to repay the money. Even good collateral isn’t always needed!

The SBA loans will help you move past obstacles that were in the way of your success getting into the franchise.

Collateral:
If you use collateral as part of getting a loan for your business then you are getting what is called a “secure business loan”,   you would need to include how much equity  your business has, how much money does company have taken out in borrowed funds, and how much money does your company have available in cash.  If you don’t want to do this, then go for an unsecured business loan or a Unsecured Business Line of Credit!

Franchises are an excellent choice for people wanting to start their own business, but who would prefer to avoid the risk. They supply a first time business owner all the advantages of being their own chairperson, while still having the security of an established brand, and all that goes with that. Profran Consultant has helped thousands of folk over the past 30 years.

naturally, the disadvantage is that there are royalties to be paid, so your revenues won’t be as high as if you had started a completely new firm, then again, the security of being a part of a bigger organization should offset that.
The trick, when choosing a franchise, is to find the right one, that gives you the right mix of stability, and liberty, and here are my top tips, to make your search just that little easier.

• Check the franchisor’s certifications. They should be registered with the appropriate franchise organizations in your country. Of course, that doesn’t always guarantee a hassle difficulty problem free association, but it does mean that you are going to at the very least have recourse in the case of a dispute.

• Make sure that you are able to afford it. Investing in anything, whether a franchise, or your own business, requires capital outlay, and infrequently taking a loan. If you are unable to afford the franchise you want, look for other possibilities, and make sure that you only accept financing deals once you have gone over them with a fine toothed comb! Also remember that while turnovers could be high, you’ll have to pay royalties on your earnings, which could put a big dent in that bottom line!

Of course, you do not have to stick only to industries that you have experience in, but it’s a lot better to make successful of your franchise if you have the basic abilities before you get started. As an example, you may have management experience – which could stand you in good stead in a restaurant franchise.

• Research, research, research. Look industry. Speak to folk in the industry, existing franchise owners, and potential clients. Glance at the numbers, the brand and everything else that has anything to do with your chosen franchise. The more that you know, the less certain that there’ll be any surprises later right?

The great part about buying into a franchised opportunity is that it IS possible to find almost everything out before hand. Unlike a new business, where a lot is based on projections, ideas, and hopes, franchises have a history.
make use of that before making a decision to commit to a particular franchise, and make sure that you weigh up all the good points and bad points. If you follow all these tips, and your chosen franchise still stands head and shoulders above the rest, chances are you are on to a winner, and you’ll have years of trouble free, franchising success.
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Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

Article Source:http://www.articlesbase.com/franchise-articles/make-your-franchise-work-1277809.html

There arrives a time in the development of every business that a choice has to| choice must| decision needs to} be made concerning whether or not to expand to reach a larger marketplace and, if this is so the best method to reach that goal. Franchising, which is one strategy of enlargement, has become more popular in the previous 3 decades. There is no doubt regarding its success but the important questions are whether or not it is right for you and whether or not you are prepared to be a franchisor. To help answer those questions, let’s explore what being a franchisor requires, mentally, physically and financially.

You first need to appreciate that franchising is a business in and of itself. Your existing business ( the fundamental concept which you would like to franchise ) is another business. It is necessary , therefore , for you to begin adjusting your thinking to the new business at hand . It is, of course, beneficial to have a unique or superior service or product concept to offer to the public ; [**] it won’t hold up well without a good franchise system built around it. Inversely, some less than superb concepts have made a name for themselves as a consequence of a superior franchise system.

The single most crucial side of any franchise system is the trademark or service mark which is being licensed to the franchisee. Your first priority should be to design a completely unique mark by which your franchise system and its goods will be identified. You then must search the files of the central government and the states in order to determine whether anyone else is presently using the same or a similar mark. If you’ve got a green light, you must go on to secure a registration of that mark for yourself. Your franchise agreement must shield your interest in those marks and you need to set up stern and well implemented standards for the franchisee to follow in order not to endanger those marks.

The offer of a franchise is subject to state and Fed. laws. The penalties for failure to comply with those laws can be damaging both to our pocketbook and your reputation. You have to present prospective franchisees with a specially prepared declaration document ( known as an offering circular ) in strict obedience to those laws at least ten working days before they sign the franchise agreement or pay you any cash. There also are fifteen states that might need you to register the offering and submit the declaration for review before selling can occur inside their jurisdictions. Additionally, any form of advertising which is used to solicit a prospective franchisee must obey governmental rules.

There is more to being a franchisor than simply having a franchise agreement and an offering circular. The franchisees who receive that notification and at last sign the accord must be trained to operate an outlet in an organized manner. Therefore , an operations manual must be prepared and a training program should be in place. A staff of qualified individuals who will run the franchisor’s organization and train the franchisees must be assembled. Once more, remember that franchising is a different business. Thus any existing manual which simply summarizes the daily conduct of your present business may not be adequate to explain to a franchisee how she is to operate your idea. You must develop a program of continual field support to assist franchisees with issues which they may confront in daily operations of the outlet. The team assigned to that function will also monitor and report on the franchisee’s compliance with your standards. The creation of an aggressive advertising campaign to plug your franchised outlets and the image which you wish them to convey to the market is of utmost significance.

Although federal and state rules do considerably repress your capability as a new franchisor to show the income potential of an outlet to a prospective franchisee, it’s still smart to have a prototype of the typical outlet in existence in order to indicate the feasibility of the idea and your actual hands-on experience in its operation.

It is also advantageous from a sales perspective to have an actual facility which a prospective franchisee can visit since you will be engaged in a new business ( franchising ) ; your present business should be secure enough to function without your daily collaboration. Likewise, don’t expect to raid the ranks of your present organization to staff the new business. Remember, they have got to be replaced.

Ken Hollowell is considered one of the countries leading franchise specialists. Ken has developed over 800 different franchise firms during the last 35 years.

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Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

Article Source:http://www.articlesbase.com/franchise-articles/ken-hollwell-explains-franchising-1285910.html

The above statistics indicates that franchise owners are having a difficult time getting their ventures to succeed in these difficult financial times.  Everyone certainly understands the difficulty in getting a new small business to succeed and meet their financial obligations.

So, what can franchise business owners learn from the above statistics regarding recent SBA loan default rates? What are the factors that seemingly contribute toward the high default rates?  Well, a review of the statistics seems to reveal several basic factors that affect this.

First, those franchises that focused on serving the affluent customers have a more difficult time during these tough financial conditions.  As families face lower income levels, they begin to cut back on those good and services offered by franchise businesses that can be considered luxuries.  Cleaning services, laundry services and lawn services may fall into those categories.

Secondly franchises that are in an already crowded market face the prospect of stiff competition and as number of customers for that good or service fall even slightly, marginal businesses suffer immediate consequences.  As an example there are a lot of pizza restaurants both independent and franchise operators.  As families conserve cash and start to cook at home more often, they cut back on ordering pizza.  This affects all smaller and newer operators and those with lower financial capital. 

Third factor that affect franchise businesses is the business model of the franchise business.  It is crucial to have a solid business model that works even in a difficult financial environment.  If the business model is marginal to begin with and depends a lot on the operator’s talent and experience, then this environment will put you to the test.  As an example opening fruit juice and cold drink stores in colder climates in winter does not make sense.

So what should a franchisor do in this environment?  It is crucial for franchisors to maintain their current base of operators and expand their base cautiously.  Nothing is more valuable to a franchisor than a demonstrable track record of success as evidenced by their customer base.  A large number of failures and defaults does not inspire confidence in a potential franchise opportunity seeker.  There are several things the franchisor can and should do.  Speak to your customer base regularly and poll them on their market situations.  Provide advise and counseling where appropriate and direct them to financial resources when needed.  When selecting new franchise owners, have a higher standard, for financial and capital requirements, so they can withstand the market forces longer.  Make sure to provide adequate training in operations so they are more successful in operating their business. 

BuyTradeBiz.Com is internets newest business for sale and franchises for sale listing website. 

Buytradebiz.com-your marketplace to buy and sell businesses!

Article Source:http://www.articlesbase.com/franchise-articles/financial-challenges-facing-franchise-businesses-1618205.html

In the mid 1970′s when I started consulting with business owners there were only a hand full of advisors who specialized in franchise development. Back then, the federal Trade Commission’s Rule 436 had not even been active. This document, depending on the essentially business system and opportunity being described may be anywhere from forty pages upwards to a 100 pages. There are twenty-three basic items that has got to be declaration with numerous sub items.

Before the FDD can be prepared, a franchisor wants to have the correct business structure or entity made along with a name that can be trademarked federally thru the U. The trade name is the corner stone of the franchise business. As the name is branded regionally and nationally, more valuable the franchise becomes.

As you can already see, a specialist teaches, informs and prepare the new franchise customer for franchising. And for each decision to be made there might be multiple options to think about.

Profran advisors uses a 21 page questionnaire to learn particular facts about the business idea. Most young franchisors discover that during the franchise development process, they learn things about many aspects of their business never previously considered. Regularly a young franchisor will state I’d haven’t considered all of the options open to me had I not decided to franchise my business.

a professional and seasoned franchise advisor can make the transaction from entrepreneur to franchisor exciting, delightful and easy mostly. One of the commonest questions is,’don’t I have to go to a solicitor to develop a franchise?’ my response regularly surprises most potential customers when I say,’Not in the first stages of development.’ Unless the solicitor is a franchise business consultant in addition to being a lawyer, the answer is no. How can a solicitor assist or help you when there was no evaluation of your business provided or business system developed? Many franchisors have waste time and money having a lawyer prepares the required document before the franchise system has even been developed. There is a time and place for the lawyer involvement but not always at the beginning. Contained in the FDD is the actual franchise agreement that franchise applicants sign. As a franchise consultant I have consulted with thousands of business owners who were considering franchising their business. The bulk of those were counseled NOT to franchise due to a number of factors. Business and management evaluation is highly necessary in making the choice to franchise. Franchise isn’t for each business or everybody.
Request a FREE 60 minutes phonephone consultation with Ken Hollowell.

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Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

Article Source:http://www.articlesbase.com/franchise-articles/franchise-consulting-just-for-you-1379451.html

Now buying a franchise is buying a business, so capital is going to be involved. I want to take you through a checklist of questions you must answer before buying a business franchise. So you won’t bite your finger in regret.

Some business franchises are  very good. They treat both the franchisor and the franchisee well. Others are one sided. But most of them are total rip offs because they make you pay ten to fifty times the actual value of the business idea, equipment, or whatever it is they are trying to get you to buy.

Before buying a business franchise, you should examine everything carefully, from the documents and paper work to the product. Infact, scrutinize everything. To help you out, i have prepared a list of questions you should ask and answer satisfactorily before buying a business franchise.

1.  Has your attorney examined the business franchise contract, discussed it with you, and do you both approve it without any hesitation?

2.  Does the business franchise require you to do anything or take any step that is illegal, questionable or risky in your city, state or country?

3.  Does the business franchise give you an undivided territory for the duration of the franchise period, or can the franchisor sell a second franchise in your territory?

4.  Is the your franchisor linked in any way with any other franchise company operating related products or services?

5.  If your answer to the above question is yes, what is your guard against the second franchising company?

6.  Under what conditions can you end the franchise contract, and at what cost will it be to you?

7.  If you sell your franchise, will you be compensated for your helpfulness or will it be a loss to you?

8.  How many years has the company offering you the business franchise been in operation?

9.  Does the company offering you this business franchise have a status for honesty and fair dealing among its franchisees?

10.  Has the franchisor shown any confirmed figures indicating exact profit of one or more of its members, and have you personally checked the figures with these franchisees?

11.  Will the franchisor provide you with a management training program, an employee training program, public relations and advertising program, credit facilities and merchandising ideas?

12. If needed, will the franchisor help you in finding a fitting location?

13. Is the franchising company strongly financed so that it can carry out its stipulated plans?

14. Does the franchisor have experienced management?

15. What can the franchisor do for you that you cannot do for yourself?

These are 15 crucial questions you must answer before buying a franchise business. Let me share 3 more franchising tips with you as bonus.

16.  Has the franchisor scrutinized you carefully enough to be certain that you can successfully operate a business and generate profit for both of you?

17.  Does your state have a law regulating the sale of franchises.

18.  If yes, has the franchisor complied with that law to your satisfaction?

19.  How much equity capital will you need to purchase the franchise and operate it until your income equals your expenses?

If you can answer these questions satisfactorily, then you are on your way to buying a good business franchise. But if you are in doubt with any of these points, be sure to check it out and know the answers before you invest or sign anything.

Buying a business franchise can give you a degree of security, and in some cases, sure-fire profits. Business analysis surveys show that less than 20 percent of all franchised businesses fail. This is in contrast with a 60 to 80 percent failure rate for all new businesses started each year.

Information regarding specific franchising ideas can be found in the franchising directories, which are generally available at the local library. Often there will be a notice posted in franchise outlets themselves.

You can also purchase business books and guides that will help and give you more insight in buying and building a successful business franchise.

If you can afford the capital involved in buying a business franchise, statistics are on your side. You are now armed with some CAUTION and STOP and GO signs!

Ajaero Tony Martins is an entrepreneur and investor. If you find this article informative and you want to learn more, please feel free to visit my blog at www.strategicbusinessteam.com and http://mybusinessgrowthstrategy.blogspot.com
This article may be freely reprinted or distributed unedited in any Ezine,newsletter,blog, or website. The author’s name,bio and website links must remain intact and be included with every reproduction.

Article Source:http://www.articlesbase.com/franchise-articles/15-crucial-questions-you-must-answer-before-buying-a-business-franchise-1322148.html

When is a license not just a license, but also a regulated franchise? If you’re expanding your enterprise through the authorized use of your trademarked products or services, you may think [*CO]‘I don’t need a franchise, simply make it a license agreement;’ or’A trademark license isn’t a franchise is it?’ or’I desire to line up dealers, those aren’t franchises, are they?’ This article tries to answer these questions.

Franchise laws have been applied to contractual relations that to some appear far removed from the traditional franchise industries, including software licenses, merchandizing licenses, and web technology licenses.

If a relationship is a franchise, franchise laws may regulate pre-offering notification, may require registration with and approval by a regime agency, and may regulate the contract and the relationship, including territory, transfer, termination, and renewal.
What Is A Franchise?
The dictionary definition of what is a franchise under law varies significantly from country to country, and from state to state. The definition that applies thru the US by the virtue of the federal Trade Commission Rule (‘FTC Rule’ ), is that a franchise is an oral or agreement in writing ( or series of agreements ) that contains each of the following three elements :
One ) The franchisor offers the right to distribute goods or services associated with or identified by the franchisor’s trademark or other commercial symbol ;
2 ) The franchisee is required to make any direct or indirect payment to the franchisor or its affiliates ( except only a bona fide wholesale price for goods for resale ) ; and
3 ) The franchisor exercises significant control over, or offers significant assistance to, the franchisee ( in some states this is defined as a promoting plan or as a continual commercial relationship between the parties ).
four ) The parties’ written characterizations of the nature of the relationship aren’t binding.
The U.S. State and Fed business opportunity laws also alter in their scope, but generally require pre-offering declaration and registration of offers of help or promoting plans to enable others seeking to build a business, without or with a trademark license. State sales agents laws also provide protection to commissioned agents, referring to payment of commission and termination rights. When considering franchise laws, include in your research these related industry, agents, sales agent, and business venture laws.

Licensees may be Franchisees

V. The Act outlines a franchise to be a relationship where a franchisee : ( 1 ) has the legal right to use the franchisor’s trade name or commercial symbol, ( 2 ) shares a’community of interest’ with the franchisor, and ( 3 ) is needed to pay a fee to the franchisor.

Profran Consultants has been developing enterprises as franchises for over thirty years. Call for FREE consultation with Ken Hollowell. Profran Consultants can offer strategies for paying for your project too.
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Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

Article Source:http://www.articlesbase.com/franchise-articles/licensees-may-be-franchising-1336940.html

Franchise legal documents

in order to sell franchises it is necessary to first have a Franchise Disclosure Document and Franchise Agreement. These are parallel documents that mirror one another. The FDD explains, in everyday language, the main points of the franchise program, while the Franchise Agreement is drafted in legal wording, and is what essentially ties the franchisee to the program. The FDD must be written in an exceedingly specific format, in a prescribed order, and must contain the precise disclosures as needed by the federal Trade Commission.

There are’do-it-yourself’ packages for the preparation of these documents, but in our perspective, this is a poor way to develop franchise documents. Preparation of the franchise documents involves properly establishing many program variables, the discovery of much detail, which comes from several hours of interplay with the person preparing them. You do not wish to make a howler with your franchise documents. New franchisors need advice, direction, consulting, and assistance from someone who has in depth experience in the preparation of franchise documents. This may be a franchise advisor or a franchise attorney.

The Operations Manual

Franchisors are needed to provide training to their franchisees, and are required to give an Operations Manual to the franchisees, routinely at the time that training begins. The Operations Manual should be written to the’least experienced’ franchisee, and should contain, at a minimum, sections about the franchisee’s relationship with the franchisor, opening the business, operating the business, the procedures categorical to the industry, recommendations and direction for hiring workers, and a series of operational and franchise forms for the daily function of the business. The Operations Manual is typically prepared by a franchise expert.

Marketing Program

you’ll need both electronic and printed reply materials. There are certain successful norms that have been settled in the franchise industry for the sort of materials used. You can get some samples from franchisors, decide on your own approach, and then hire a photographer and graphic designer to prepare materials for you. It’s not necessary to spend a large amount of cash on this part of the program, but the materials should look professional and should convey your message.

Advertising the Franchise Offering

There are many ways to advertise a franchise program. In the past, newspapers and print media were the most important way to generate leads, but these vehicles have become less effective. Over half of franchise inquiries now come from the Net. The issue is that there are tons of Internet sites offering franchises, and franchisors receive many casual investigations from folks who simply’check a lot of boxes’ on a number of sites, indicating interest in numerous different franchises.

We suggest that you establish a budget, maybe about a thousand bucks a month, depending on your development plans, select a few web sites, and then be prepared to receive lots of’chaff’ in which there will be some qualified leads. It’s been calculated that one net investigation in 60 actually buys a franchise. However [*COMMA] you cannot forget the web when selling franchises.

Selling Franchises

It is fascinating to sell franchises yourself, if you can. If you want assistance, there are many franchise brokers in the industry to help you. Many of them only generate qualified leads, while others basically become involved in the sale process. Use caution not to pay too high of a share of the franchise fee as a commission. If the commission paid is too high you’ll have inadequate cash remaining to adequately train and support the new franchisee during their startup period.

Managing and Supporting the Program

Good franchisors do everything possible to help their franchisees become successful. Each franchisee needs access to a franchise expert, who represents or works for the franchisor, to help them with daily Problems and questions. At the beginning the franchise owner or existing staff may serve in this roll. As more franchises are sold, it will be critical to hire someone. Your staff does not have to be massive and just some people can support many dozen franchises.

Your Next Step

Profran Consultants can teach you how to become a franchisor. Contact Ken Hollowell for a 60 minutes FREE consultation.

Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

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