Entrepreneur of the Year Says: Reinvent Yourself!

There's a lot to be learned from successful entrepreneurs. They know how to get ahead and stay ahead of the competition. They know how to adjust and adapt to changing business conditions, markets, customer desires, shop location. They watch industry trends. Focus on the future. And always "sell customers on value, retain customers by service, service, service." Sounds simple, but a good number of franchise owners are too busy to pay attention to these essential building blocks for success. The story below from Franchise Times illustrates how one innovative franchiser parlayed one success in to another, and then another after that. The wise franchiser, regardless of industry, will apply the perspective of someone like Tarid Farid and discover new ways to do business. 

Peter Casey, Franchising Consultant

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Want solutions?

Here's what is working for some innovators

Franchise Times, April 2009. It's easy to see why Tariq Farid was honored as IFA's Entrepreneur of the Year. He's someone who never stops improving on what's already working.

When he was 17, his father borrowed and financed $6,000 with credit cards to buy a flower shop for Farid to run after high school. Fortunately he did well in school and could relieve his mom at the shop by noon. His mother didn't speak English, but she took copious notes on the orders coming in and whether the salesgirls were smiling at customers.

There was no shortage of flower shops in his town, but Farid distinguished himself by buying roses from the growers and selling them for $9.99 a dozen, cutting his profit to $4. He made up for the loss by encouraging customers to "supersize," their orders by adding on higher margin items, such as bows or Teddy bears, he says. Lower prices delivered higher volumes, which allowed him to lock in prices with the growers.

Flowers were nice, but Farid's passion at the time was computers. He designed a computer system for his shop that he turned around and sold to other flower shops in the area. This was not a small endeavor. By 1997, his computer business had sales of $2.5 million a year. His strategy was the same as with flowers, "sell them on value, deliver lots of service," he said. Part of that service included advice on how to improve sales at their flower shops. "We had so much business we had to put people on a wait list," he said.

He sold the computer company, kept the original flower shop and began to tackle a new project. He had seen bouquets made from fresh fruit and did a feasibility study on the prospect. "My mom liked them; that was my feasibility study," Farid said, grinning.

He designed the technology to support the business and built four stores that would serve as test markets. The first was the prototype, the second was as if a franchisee was building it, the third was located in an upscale area; and the fourth was in "an area no one wanted to build in," he said.

"I learned how to handle customers in all areas," he said. For instance, coupons worked in the blue-collar neighborhoods, but not the upscale ones. Upscale areas, on the other hand, demanded the shop be open on Saturdays.

Customer service is key. When a call comes into the shop, the employee immediately pulls up that customer's file. For a repeat customer, they suggest a different item. So no one's getting the Simply Dipped Daisies time after time, when there's artfully arranged strawberries and grapes and bananas to create buzz.

Innovation

So how does a luxury business survive in hard times?

Two ways: Design a symbiotic concept and start a finance arm (which shouldn't hurt, right?).

"I felt if I was so confident about this I should back it," he explained. "The best thing you can put your money into is yourself. Worst case scenario, I'll have to take over the stores and run them."

In order to qualify for a loan, franchisees have to agree to an extensive training program, including finance management.

What to do with the leftover fruit was another problem that created opportunity. Since the stores have to buy premium fruit for the arrangements, they are careful to have very little waste. But there's still pieces left over after the fruit is trimmed to look like flowers. Farid developed a complementary concept, Frutation, which turns the scraps of fresh fruit into smoothies and fruit salads. The concept is a natural because the locations are already in premium locations with foot traffic. Franchisees pay an additional $10,000 for the franchise fee.

Farid said that if a franchisor isn't reinventing himself right now, he or she is in trouble. "When you swim in your own little pond, you think you're the best swimmer," he said. Not only is the pond getting bigger, but there are lots more swimmers entering the race. Perhaps it's time to take swimming lessons...

Here are some tips from Farid:

*  Transform yourself before there's a need.

* Walk into your concept like a customer, not an owner.

* Technology may save you money, but there's always a cost involved. Step back and view your processes from a distance. If you enhance an inefficient process, all the technology in the world won't help. 

* Don't just compare last year's number with this year's - look to see if you could have done more.

* Know your destination and how to arrive there. And, if you're the CEO, you have to arrive there before everyone else does.

Kneading Out the Recession Blues

Stress generating economic news can get you down and make you tense, all at the same time. How to get out of the dumps, even if you can't pull the economy along with you? A lot of people are turning to massage therapy. That's why the massage therapy industry has not only remained relatively unscathed by the recession, but has even begun to flourish. Massage therapy franchises are opening new locations and gaining new customers at a brisk pace. The cost of entry is low and franchise owners profit nicely. What's more, they can take satisfaction in knowing that they're providing a service that helps revitalize energy and outlook, makes people feel good, and offers respite from dreary financial news. Give the article below a quick read for more information.

Peter Casey, Franchising Consultant

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Massages help fight economic stress

by Jenn Rains, Hill Country News

The economy has been at the forefront of people's minds with stories about the stock market fluctuating and businesses throughout the country closing stores or going bankrupt. While many businesses and industries continue to flounder in the unstable economy, one particular industry is experiencing good fortune with more customers because of the stressful times. The local massage therapy industry continues to do well despite economic hardships.

As more and more people are stressed about finances, many are turning to massage therapy to help them keep a balance in their lives, said Rima Star, quality officer of seven Massage Envy clinics including one at 1890 Ranch in Cedar Park.

Star said the massage clinics continue to see new customers. “I think all have seen some kind of shift, but it hasn't been a huge one,” she said of the business which has been open almost a year.

The biggest change she's seen is the increase of customers who used to go to more expensive spas who are cutting back and finding more affordable places to receive their massages.

“A lot of people who have private therapists work on them are coming and taking advantage of great prices,” said Traci Stricklan, clinic administrator for Massage Envy. She also said people who didn't use to get massages are coming in because they're stressed.

Bernado Mora of Village Massage Heights of Cedar Park has seen similar trends. Though the business has only been in Cedar Park for about three months and is still trying to get established, Mora said the company is doing well.

He said the economy being what it is creates a positive and negative for the company. If the economy was better, the business would be better, but the stress of the economy is leading to more customers, Mora said.

“With this economy, people are stressed out so they're coming in for massages,” he said.

As a business that offers affordable massages, like Massage Envy, he said some of his clients used to go to spas. Mora said, “The economy is helping us a little bit because people who used to go to a spa are coming to us now.”

As for Alex Matthews, co-owner with wife Vicki of Advanced Therapeutic Massage, he said their business hasn't seen much of a change.

“Initially it slowed down a little bit and then it went back to where it was before,” he said of his business, which has been in Cedar Park for over 10 years and was the first licensed establishment for massage therapy in the city.

He said some new clientele continues to come in and that people are turning to massages to help with stress. Matthews said Advanced Therapeutic's style is to manage stress throughout the year, rather than offering a once-a-year relaxation treat like many spas do.

All three businesses have found much success in Cedar Park and continue to be successful. “It's always been fantastic for us,” said Matthews, who said the business worked to integrate itself into the community from the beginning.

Stricklan of Massage Envy, a nationwide chain which employs about 8,000 therapists, said the owners were looking for ideal spots for Massage Envy businesses and thought Cedar Park would be an ideal location.

In a city that continues to grow and bring in more people, Mora said he expects his business to grow and benefit a lot of people in the area.

Franchises that are Predicted to Ride Out the Recession

These days, the number one priority for franchise owners is survival. The good news? Recent studies indicate franchises are in a better position to weather a bumpy economy than many other types of small business. There are even some bright spots. Temporary staffing services, executive coaching, and other business services will handle the downturn fairly well and emerge intact. The story below offers some insights as to why this is true, and gives you a sense of the considerations that go in to choosing a business service franchise.

Peter Casey, Franchising Consultant

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Business Services Weather the Economy

By Matt Bolch
As published in: Franchise Times - April 2009

At a time when stocks are trading at half what they did 18 months ago, the loss of 10,000 franchise estab lishments doesn't seem so bad. The key, of course, is to make sure that it's not your business that closes.

Other data from the Franchise Business Economic Outlook for 2009 estimates a loss of 207,000 jobs in the sector and a decline in overall economic output of 0.5 percent, which translates into a $4.2 billion loss for the year. The report was prepared by PricewaterhouseCoopers with input from FRANdata.

"It's a slight dip, but better than the rest of the small business economy," indicates Rieva Lesonsky, editor at large for AllBusiness.com. "Franchises are perfectly poised to handle the downturn." Bright spots include the QSR industry, temporary staffing services, coaching and franchises aimed at business services, notes Lesonsky. "Business services are going to do well," Lesonsky says. "Larger companies are getting rid of employees and turning to outsourcing."

FastSigns has weathered previous downturns without incident, but President Larry Lane says the current economic climate is hitting his business, too. The company was founded in Carrollton, Texas, in 1985 when the state's housing market was in the tank, but FastSigns prospered then, as well as during downturns in the early '90s, during the dot-com bust and in the aftermath of 9/11.

"We did pretty well the first half of last year, then the second half saw a tightening," Lane says. "In November, the business world stopped. January was bad, but we've started being more proactive and are seeing things loosening up."

FastSigns, which has 462 locations in the United States and 81 outlets in six other countries, has been reinforcing the value message of signage to the small- and medium-sized business (SMB) community and helping franchisees make smart decisions during the downturn.

The company encourages franchisees to try social networking, and FastSigns has started a blog on its Web site, which currently is undergoing a transformation to incorporate mobile access that should be complete by mid-summer. The company has instituted additional training for franchisees and their employees and has issued guidelines about how stores can operate more efficiently from a green standpoint.

Technology has transformed the signage industry but can be costly, and FastSigns is helping franchisees make critical decisions about whether efficiencies and sales opportunities gained from new equipment would be worth the expense.

BookKeeping Express believes its value proposition will appeal to the SMB community during the recession, says Greg S. Jones, CEO of the franchise services company based in McLean, Virginia. The company was founded in 1984 and operated under a license model until it was sold in 2007. BookKeeping Express has 23 licensed locations and 112 franchise territories, mostly multiple units on the East Coast.

"There's a huge void in the market between bookkeepers who mainly have limited skills and CPAs who consider bookkeeping a low priority," Jones says. "We boast the quality of a CPA with the cost of a bookkeeper."

In a small business environment, one person often does two jobs, including bookkeeping. So if that person is laid off, the owner has to look elsewhere for bookkeeping services. BookKeeping Express offers reports and industry analysis comparing a client's business with comparable companies across the company.

"Every week, every month, we're looking at how the business is run, and that's the value we offer small business owners," Jones says.

Staying on top of your game

If franchisees ever needed a little sage advice, now is the time.

"We've never been more relevant and never been more effective," says Jason Zickerman, president and CEO of The Alternative Board, an international peer advice and executive coaching franchise based in Westminster, Colorado. "Executive coaching is kind of recession-proof. In good times, owners can afford it, and in bad times they need us more than ever."

Clients can participate through peer boards of non-competing business owners who meet to discuss challenges and strategies for success and receive one-on-one coaching about their particular business.

This isn't the time to sit back and hope to weather the storm, Zickerman advises. Business owners have to be aggressive and proactive, finding ways to cut spending that do not include marketing and leveraging company strengths to find new customers and cement ties with existing ones.

David Fagiano, senior vice president and COO at Dale Carnegie & Associates Inc., agrees that the time for action is now. "It's been proven recession after recession that companies that don't cut funds for advertising and training come out of recessions better than companies that do," says Fagiano. "But usually those items are the first to get cut when the economy goes south."

That's one of the five biggest mistakes companies make, as found in a Dale Carnegie Training survey of 150 of its franchisees. Another common misstep is following the herd, cutting people or budgets indiscriminately because other companies are doing it. Others include delaying key decisions, failure to communicate within the organization and viewing the situation negatively.

"This constant barrage of awful news has a lot of people scared and retreating into their shells," says Fagiano, who says Hauppauge, New York-based Dale Carnegie has not been immune to the downturn. "Even if the unemployment rate hits 10 percent, that means 90 percent of Americans are working. It's all a matter of perception."

Linda Burzynski has led several franchise organizations and now consults with franchisors and franchisees as CEO at VL Service Corp., Austin, Texas. Burzynski says nearly three-quarters of the franchisors she works with are trying to increase communications to franchisees and customers to strengthen ties, while the rest are working to expand the number of locations.

A coach with franchise experience can bring a trained set of eyes into a company's business, often paying for the service with increased efficiencies or opportunities. "One suggestion (the client) leverages can mean hundreds of thousands of dollars to the bottom line," Burzynski says. "Franchisors can't afford not to do this."  

Fast Track Office Cleaning Franchises

There’s money in wastebaskets, dirt, dust, and carpets. In emptying and cleaning them, that is. With cleaning service franchises of all kinds among the fastest growing and most profitable franchise categories, it’s a good idea to stay on top of how they’re ranked and what they offer. If you’re shopping for a franchise that has a proven track record and a solid market, a cleaning service franchise may be just the way to go. All businesses need cleaning----retail stores, medical facilities, office buildings, restaurants, government buildings, movie theaters, you name the business and it will require regular cleaning----but you can choose to clean only the ones you want or even specialize in a particular type of business. A very modest investment puts you in to the business. You can keep your regular job while getting started, working evenings and weekends, and setting your own working times and number of hours. And, once your business grows large enough, you can do it full-time. Give it some thought.

Peter Casey, Franchising Consultant

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Bonus Building Care Receives Top Ranking from Franchise Business Review

PRLog (Press Release) – Mar 16, 2009 – Franchise Business Review, a franchise market research firm, announced today that BONUS Building Care, one of the highest ranked and fastest growing companies in the commercial cleaning franchise industry, has ranked 2nd in the Cleaning and Maintenance category and 11th in the Less than 50 category based on franchise owner satisfaction.

The survey invited each BONUS Building Care commercial office cleaning Master Franchise owner to participate and asked forty questions related to their BONUS Building Care commercial office cleaning franchise ownership experience. The survey questions covered franchisee training and support, system quality issues, franchisor relationship, financial opportunity and overall satisfaction. Additionally, BONUS Building Care commercial office cleaning franchisees completed demographic and lifestyle questions, for a 360-degree view of their franchise experience.

Details about the 2009 Franchise 50 Awards are available at fbr50.com.

“We are proud that our franchisees have once again rated BONUS Building Care’s commercial cleaning franchise as one of the best of the best in the franchise industry. The Franchise Business Review survey validates the satisfaction, opportunity and support provided through the BONUS franchise system! This is a great achievement that we are very proud to receive” says BONUS of America, Inc. President, Perry White.

About BONUS Building Care

Bonus Building Care is a commercial cleaning franchise company founded in 1996 by Arleen Cavanaugh. Bonus Building Care’s headquarters is located in Indianola, Oklahoma from which it supports twenty-eight (28) Bonus Building Care commercial office cleaning franchise branches in the U.S. operating from coast to coast. Bonus Building Care provides commercial office cleaning services to thousands of accounts nationwide through its network of over 2,200 cleaning franchise owners. Learn more about Bonus Building Care on their website at bonusbuildingcare.com or commercialcleaningservice.net. 

How to Really Clean Up in the Recession

Cleaning services have been one of the fastest growing franchise sectors for several years now. That's due to several key factors. Low entry costs, extensive training materials, and superior, active support from the parent company lead the list, but the real driving force behind the demand for cleaning services is simple----no one likes to do house cleaning chores. Especially after a long day at work or a weekend packed with much more interesting activities. This is true for both single- and two-income families. If they can afford to pay someone else to do the housework, cleaning is among the first luxury services selected. If you're considering this area of franchise endeavor----or even if the idea has never occurred to you before----this article offers some tantalizing food for thought.

Peter Casey, Franchising Consultant.

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The Cleanest Sector of U.S. Economy 

Molly Maid Reports Positive Sales, Franchise Expansion as Consumers Prioritize Cleanliness

Ann Arbor, MI – American consumers made it clear this year that one thing they won’t give up is a clean home, and they don’t want the chore of doing it themselves.

Molly Maid, a leading residential cleaning service franchises with more than 5,000 signature navy and pink cars on the road, finished 2008 with a 5 percent increase in sales over the previous year. In addition, the company welcomed 18 new franchises across the country, and an additional 17 existing franchise owners invested in expanding their territories. Molly Maid also experienced a whopping 85 percent increase in website contacts.

Molly Maid broke into four new markets last year, including Tulsa, Okla., Omaha, Neb., Rochester, Minn., and Syracuse, N.Y. and company executives are preparing an aggressive franchise expansion campaign for 2009, targeting Boston, Long Island, Philadelphia, Baltimore and Miami. According to Mailloux, each market was carefully chosen based on consumer demand for quality, reliable cleaning services. Overall, residential cleaning represents a $3 to $4 billion industry, which is projected to grow up to 17 percent through 2014.

“In homes around the country, a volatile economy often calls for both spouses to work harder and longer hours than usual, just to get by,” said Molly Maid President Kristi Mailloux. “Busy working families want to make the most of their free time, and cleaning their house isn’t exactly what they want to do during those rare, free moments. We offer one time, monthly, bi-weekly and weekly cleaning. It costs money, but it’s an investment families are willing to make as a trade out for quality time together.”

Mailloux noted that also during tough economic times, consumers tend to be more careful in making choices about companies and services that they hire, and are less likely to take chances with independent, little-known local businesses.  “Molly Maid is nationally recognized. We do background checks, and home service professionals are bonded and insured. Customers know they can trust the people they are letting into their homes, which at a time like this, is critical.”

As a whole, Molly Maid has been increasingly contacted by and has awarded franchises to executives being downsized in corporate America, or others who are tired of the uncertainty. She noted that Molly Maid franchises offer an executive style model for those who enjoy managing people, providing great customer service and who are looking for a flexible lifestyle with Monday – Friday hours.

In addition to franchise opportunities, Molly Maid also helps boost local economies by bringing jobs into the community, said Mailloux. “Our company and our franchise owners believe in creating good working environments where Home Service Professionals and office team members can make a good living. Many have been with their franchises for more than 10 years,” she said.

Molly Maid residential cleaning franchises also enjoy giving back to the communities they serve through the Ms. Molly Foundation, a non-profit foundation that supports victims of domestic violence and their families. The foundation raised a record-setting $127,500 this year, which was distributed to nearly 100 shelters across the country. Since its inception in 1996, the foundation has raised more than $725,000 for local domestic violence shelters throughout the United States and Canada.

About Molly Maid

Molly Maid, based in Ann Arbor, MI, is one of three service companies under Service Brands International. The residential cleaning franchise, ranked number one in the United States, was founded in 1979 and began franchising in 1984. Currently, over 450 Molly Maid units are operating in the United States alone, with an additional 300 operating throughout Puerto Rico, Canada, Japan, England and Portugal. Molly Maid has consistently ranked well in Entrepreneur magazine’s Franchise 500 rankings, currently at number 104. Molly Maid has also been the recipient of numerous awards for entrepreneurialism, software innovation and humanitarian causes, including the Ms. Molly Foundation, which collects money and goods for safe houses and shelters for victims of domestic violence.

Timely Credit Help for Franchisees Now Available

With credit tight or nonexistent everywhere, pessimistic franchisee concern about financing has become a contagious viewpoint. But tough times have been known to generate innovative approaches in all industries and realms of economic enterprise. One of the more interesting recent innovations that would've been unthinkable a year ago is the willingness of franchises to offer credit help or loans to franchisees. If you---like many another franchise owner---are caught in a tight spot, you might want to think about approaching your mother ship for help like that below. And there's no reason why you can't send them the whole article.

Peter Casey, Franchising Consultant

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Lifeline for Franchisees 

More Franchisers Help Franchisees Ride Out Credit Crunch With Financing, Waivers or Assistance Getting Outside Loans.

Most franchisers don't help franchisees out with financing, but more exceptions are emerging in today's tight credit market. Great Clips Inc., a Minneapolis-based hair-salon chain, says it has secured $14 million in loans for expansions, acquisitions, debt consolidation and refinancing for new and current franchisees.

The franchiser obtained the money from lenders InSource Capital Services Inc. of Sherman Oaks, Calif., and IRH Capital LLC, Deerfield, Ill., "in the wake of all the turmoil and fear out there," says Rob Goggins, Great Clips' vice president of franchise development.

Mr. Goggins says the franchiser was able to get the financing partly because of franchisees' low default rate on previous loans. Much of the money is still available, the company says.

To attract investors to a new hotel-motel prototype, Red Roof Inn, a unit of RRI Inc., is extending a $50,000 credit against various costs, capping marketing and reservation fees and waiving royalties for seven years. The waiver, which starts when the franchisee signs up, could average $45,000 a year or so, estimates Joe Wheeling, the company's CEO.

For the franchisers who have long offered financial assistance of some kind, the measures are taking on greater importance these days as a lot of outside lending dries up and personal assets shrink.

Toronto-based Proshred Security, which provides document-shredding services, finances the initial $35,000 fee on at least one franchise when selling a multifranchise territory to an individual.

The franchiser typically attracts people with high net worths, who usually don't need such financing. But more such franchisees have recently sought the loans, which carry an interest rate of prime plus 2%.

"Their resources have diminished," says Proshred President John Prittie, citing business owners' shrunken asset portfolios and 401(k)s. Coverall Cleaning Concepts lends up to $6,800 of its initial franchise fee, which, depending on the franchise's size, ranges from $10,750 to $32,200. "About 80% of our franchisees take advantage" of that financing, says Kevin Derella, a senior vice president at the Boca Raton, Fla., company, whose 9,000 franchisees provide cleaning services.

Real-estate franchiser RE/MAX International Inc. will finance as much as 50% of its initial fees, which vary from $12,000 to $25,000, depending on the market. But only a small percentage of franchisees tap that money, because "we can be extremely selective in making sure we have a really strong client," says Tim Burns, director of franchise sales.

Multiconcept franchiser ServiceMaster is unusual among franchisers in that it has an in-house bank, ServiceMaster Acceptance Co., to lend money to current franchisees for working capital, equipment and vehicles.

The company also will lend as much as 80% of initial franchise fees and start-up equipment costs. Those fees and costs could range between $27,000 and $87,000, depending on its franchises -- ServiceMaster Clean, a commercial cleaning business; Furniture Medic, on-site furniture repair; Merry Maids maid service; and AmeriSpec home inspections.

"Often, we'll charge interest only in the first year, as a way of helping new franchisees get started," says David Messenger, vice president of market expansion for the Memphis-based company, a unit of private-equity firm Clayton, Dubilier & Rice Inc.

One franchising giant, meantime, still carries enough clout to help business owners get outside financing from banks and other lenders. McDonald’s Corp. has more than 50 institutions on its lenders list, including Chase McDonald's Finance, an arm of J.P. Morgan Chase & Co. that deals exclusively with McDonald's franchisees.

The money is still available, although it might take longer to process loan applications and the cost may be "a bit higher," says McDonald's Chief Executive Jim Skinner.  

Misleading Franchising Myths Laid to Rest

There's a wealth of franchising MISinformation floating around out there. Every would-be franchisee has to wade through a swamp of myths to get to the solid ground of truth. There isn't a franchise owner that hasn't made the journey. But once you've slogged through that swamp----once you've learned for yourself that better than half of what you've heard is nonsense sprung from the minds of those without any hands-on franchise business experience----you'll be amazed at how eager you'll be to get started. We can't dispel every franchise fairy tale you'll hear along the way to opening a franchise business, but we can shed some light on the subject by bringing to this blog every worthwhile story we find about misleading franchising fears. Below is one of the best articles we’ve seen in a long time.

Peter Casey, Franchising Consultant

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Exploding Five Myths About Franchising

by John P. Hayes, Ph.D.

Maybe you've thought about buying a franchise but you never seriously considered it because someone told you it's too risky, it's not a good idea, it's for rich people, or it's for people other than you...Unfortunately, there's a lot of information about franchising and much of it is wrong. Perhaps the information below will help you think differently about investing in your own franchise.

* The franchisor will make you do everything their way. They'll take away all your freedom. What does that mean, exactly? It would be interesting to call a successful franchisee and ask him or her, "Does your franchisor ever allow you to make a decision on your own?" If you think franchisors make all the decisions for franchisees then you will be surprised by their answer. Yes, the franchisor will force the franchisees to conform to standard operating procedures. The franchisor will control what you sell, what you say, what you wear, how, when and where you operate the business. It's all part of branding, which is part of marketing, which is what makes money! But franchisors do not take away their franchisees' rights to make all decisions. There are plenty of decisions every day to be made at the franchisee level. Just ask successful franchisees. Many wish there were fewer decisions to make!



* The franchisor charges huge fee so you're just making them rich and not yourself. Really? Are there no wealthy franchisees anywhere? Yes, every franchisor requires you to pay fees, including ongoing royalties. And if they're not fair, why do people agree to pay them? Franchising is a business and a franchisor must make a profit. However, franchisors also need profitable franchisees. Otherwise, who's going to pay those fees? Unsuccessful franchisees don't last long. It's just silly to say that the fees make the franchisor rich but not the franchisee. When it's done right, franchising is successful for both the franchisor and the franchisees.

* You can't sell a franchise. You don't own it. Once you buy it, you're stuck with it. Who comes up with this nonsense? Of course you own it. You will sign a contract that gives you ownership to a license to operate a specific business. You will not own the trademark, the brand, the operating system, or anything else. Your license grants you the opportunity to build a successful business using the franchisor's marks, training and support. And unless your franchise agreement says you can't sell it, assign it, or transfer it, you certainly can. I've never seen a franchise agreement that prohibits the franchisee from selling, or what's commonly called transferring the franchise. You can also make a profit when you sell-- thousands of franchises have done so in the last 50 years!

* If you're successful the franchisor will take the business away from you, or they will compete with you. And franchisors will do that because . . . it makes sense for them to shoot themselves in the foot? Or they like to go to court and defend themselves against lawsuits? Franchisors and franchisees sign contracts that spell out their legal relationships. Sometimes the relationships are violated by both franchisor and franchisee. But people that consistently violate franchise contracts don't remain in business very long. A franchisor lives and dies by its reputation. You can find out about scoundrels in advance of investing with them and avoid them!

* The franchisor will just take your money and run. They won't teach you anything or help you set up a successful business. Then why would you give them your money in the first place? There's homework to be done before you invest in a franchise. Disclosure laws require franchisors to share information with you before you invest. If you do your homework you can find the right franchise opportunity.

Franchising is not perfect. It is not always successful. Some franchise companies fail. However, when a franchise goes bad, it's usually the fault of the people involved and not the fault of the concept. Franchising works. It's the safest way for people to start a business. It may not be right for you, but don't be fooled by these myths.

Franchising’s Most Frequently Asked Questions

If you’re considering buying a franchise, you’ve probably got some pretty general questions you’ll want answered before you take the plunge. Franchise Gator (franchisegator.com), one of the best sites on the Web, offers articles on franchising that answer questions like the ones below. Of course, not every franchising question you might have can be answered completely—at least not without specifying a franchising niche industry or, in some cases, even the company you’re considering—but the questions below can help you fine-tune your understanding. They can also help you formulate questions you might not have otherwise thought to ask, or narrow down more specific questions you’ll want to ask a given franchise company.

Peter Casey, Franchise Consultant

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How Much Money Can I Make

The Secrets to Finding Out Franchise ROI Potential

When investigating a franchise opportunity one of the most difficult pieces of information to get from the franchisor is how much money you might make. This may be frustrating because you are not going to invest in a business until you have a good idea of what you can earn. In most cases the franchisor is not being purposely difficult. The Federal Trade Commission (F.T.C.) and many states have stringent regulations as to how franchisors can provide this information to prospective franchisees. However, there are ways to get this essential information.

Why is the government regulating franchisors?                                                   


In 1979 Congress passed legislation authorizing the F.T.C. to regulate the franchise industry to protect the public from a franchisor making fraudulent earnings claims. A number of states also passed similar legislation. The current F.T.C. and state rules do not forbid a franchise company from supplying information about the earnings that can be achieved in their business. They do, however, regulate how this information can be given to a prospective franchisee. 

A franchise that wants to provide earnings claims must put it in writing in their FDD (Franchise Disclosure Document).  Also, it is essential for the franchisor to make sure that the data provided is accurate and not misleading and they need to clearly label any assumptions or qualifications on the data provided. 

Assuming they meet the legal requirements, a franchisor is free to provide whatever earnings information they want to a perspective franchisee in terms of sales, expenses, cash flow and income. 

Why don’t all franchisors provide this information?


It sounds relatively simple but there are still many franchisors that don’t provide earnings claims. There are two likely reasons: First, producing an earnings claim does involve effort and expense for the franchisor.  Second, the results may not be attractive enough to assist in the recruiting of new franchisees.  

Where else can you find this information?


If a franchise does not provide an earnings claim in their FDD, the best source of information to find out how much money you might make is the existing franchisees of the system. Call them and ask. Item 20 of the FDD provides a list of current and former franchisees along with their contact information. You will be talking to many franchisees anyway as part of your due diligence so make sure you also cover the subject of the averages and ranges for earnings in the system. By gathering actual performance statistics, you will have a realistic starting point in determining how much you can expect to make in a similar business.

What’s a reasonable level of earnings for a franchise business?


Once you have earnings data, your next question will be whether the probable earnings represent a good return on your investment.

Remember that when you invest in a franchise, you are investing both your time/talent and your money. Therefore, you should reasonably expect a greater return than you would for a passive investment of money only.

If a good return for a passive investment is 10% to 15% per year, you will want to see a greater return in a franchise opportunity. After all, the time you put into your new business should yield you a return at least equal to the return on the money you invest, maybe not the first year but certainly down the road.

A second important point to consider is that a higher franchise investment does not necessarily mean a higher rate of return. While this seems contrary to common knowledge, there are plenty of low to mid-range investment franchises that provide great return on investments. Don’t limit yourself only to high-investment franchises when seeking that business with a high ROI.

How much money you will make as a franchisee depends on many factors ─ from the structure of the franchise (e.g. retail versus service), to how long your franchise has been operational, to how well you understand and embrace the system, to your enthusiasm for the business and how it will help you realize your dream. But, with a little research, you can get enough information to decide if this opportunity makes financial sense for you.

If You Have a Passion for Business, a Strong Desire to Help, and the Will to Succeed, here's a Business Worth Considering Investigating Closely

Despite all the economic doom and gloom, there are new businesses just starting out as well as mature businesses that will make it through to better times. And therein lies an opportunity for anyone who wants to help. Being a coach of any kind demands a wide variety of talents, not the least of which is the ability to show people how to improve what they're doing, how to measure the effectiveness or progress of what they're doing, and how to recognize when they need to change course in what they’re doing. What’s required is native “people skills.” The drive to put them to good use. A desire to teach the kind of methods and strategies that help others help themselves. If that sounds like you, take a look at the kind of business you can have with an ActionCOACH franchise---along with the training you need to make it fly.

Peter Casey, Franchise Consultant

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ActionCOACH Provides Valuable Mentoring Source

ActionCOACH is the world’s number one business and executive coaching firm, with more than 1,000 offices in 26 countries. As part of an ActionCOACH franchise, consultants provide a valuable mentoring service to clients. For three years running, Entrepreneur magazine has rated ActionCOACH one of the Top 20 Home Based Franchise Businesses. 

By supplying a pair of fresh eyes to evaluate the current structure of a business, ActionCOACH consultants help business owners and CEOS improve and maintain the health of their companies. Business Coaches show each individual client how to excel by focusing on the four core aspects of his or her business: time, team, money, and systems.

And while Franchise owners can easily learn the details of fixing and managing a business from ActionCOACH, each ActionCoach Business Coach develops his own career by continuing to learn from each client he tutors. Over time, this expands an ActionCOACH’s understanding and experience of a variety of business and business problems.

In short, being an ActionCoach Coach is a never-ending process of learning more and gaining deeper insight to business operations; a process that benefits each successive client.

All it takes is dedication and commitment to get started, ActionCOACH provides the training on how to run your franchise, the details of fixing and managing a business, and how to deal with your clients.

Contact us today at actioncoach.com to learn more about available franchise opportunities in your area and how your can become a Business Coach.

Thinking Strategically Crucial Recession Survival Skill for Business Owners

The Chinese symbol for “crisis” also stands for “opportunity.” With that first word creeping in to the economic news more and more, it’s worth remembering that the second word goes with it. A lot of cutting-edge creative thinking comes out of hard times, often leading to extraordinary innovation and possibilities for growth. That’s why we took notice of the recent article below. It heralds how one franchise’s service or product might help franchisees in another franchise niche stay profitable. Not only stay profitable, but gain a mindset and skills that will apply to sound business development long after the recession ends. Whatever franchise you already operate or may be contemplating, give some thought to what other franchises offer----and how a partnership similar to the one below might generate solid benefits for both.

Peter Casey, Financial Consultant

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Children's Fitness Franchise Offers Business Coaching and Accountability Process to Franchisees 

March 20, 2009 // Franchising.com // CINCINNATI - The Growth Coach, one of the fastest-growing business coaching franchises in North America with a presence in more than 170 markets throughout North America, has announced a nationwide coaching partnership with The Little Gym International, a global franchise which promotes a fun and non-competitive environment where children develop vital motor skills while also learning self-confidence and social skills.

Armed with The Growth Coach's signature group coaching process, The Little Gym franchisees are given the structure, discipline and process to improve three essential components: their business, themselves as owners and the quality of their personal life. In short, franchisees are educated to think and act like strategic business owners, especially important traits during any economic downturn. 

With more than 300 locations operating in 20 countries, The Little Gym offers programs which not only help children develop physically, but also intellectually, emotionally and socially. The programs are strictly non-competitive, focusing on creating fun, positive experiences with the goal of giving children the confidence they need for a lifetime of success. 

"Through The Growth Coach's guaranteed Strategic Mindset^® coaching process, The Little Gym franchisees are introduced to effective mindsets, strategies and practices and then offered on-going accountability which converts these aspects into permanent habits," said The Growth Coach president and founder, Daniel Murphy. He added, "The Growth Coach is rapidly becoming the leading, go-to coaching authority to serve entire franchise systems, from large to small, mature to emerging." 

Some of the franchise industry's biggest names have already turned to The Growth Coach for its business coaching and accountability services. The Little Gym joins an all-star roster including Handyman Matters, Fresh Coat, Home Helpers, Caring Transitions, Fish Window Cleaning, and Signs by Tomorrow, to name a few. The Growth Coach offers business coaching and accountability services to these franchises via affordable group workshops or The Coaching Club a one-on-one coaching program delivered by phone and e-mail. 

As with many franchise executives, Bob Hicks, The Little Gym's senior vice president of franchise support, is always looking for innovative resources, such as business coaching, to help franchise owners achieve greater success. "We have always provided our franchisees with one of the most robust and progressive training and support systems in the franchise industry," Hicks said. "The Group Coaching format is very affordable for both our owners and The Little Gym. This win-win offering has helped our franchisees achieve greater success, personal balance and satisfaction as business owners."

About The Growth Coach

Founded in 2002, The Growth Coach is the only pure business coaching franchise system with the single purpose of helping to drive success and balance the lives of business owners. The company's goal is to help clients gain greater focus and leverage so they can work less, earn more, build greater business value and enjoy more fulfilling lives. In addition to serving entire franchise systems, clients include small business owners, individual franchisees, the self-employed, sales and service professionals, and managers from businesses of all sizes. The Growth Coach is located in more than 170 markets across North America.

About The Little Gym International

The Little Gym concept was developed 30 years ago by Robin Wes, a kinesiologist and educator who conceived the idea of using gymnastics to help children develop motor skills. The Little Gym promotes a fun and non-competitive environment where children develop vital motor skills while also learning self-confidence and social skills. The concept has blossomed into a global company serving more than 150,000 children each year between the ages of four months and 12 years old at more than 300 locations in 20 countries.