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Franchising Path

Connecting You to Your Future

Ryan Perry

5 Tips To Confidently Invest In A Franchise

Investing in a franchise can be a daunting prospect, especially if you're new to the world of business ownership. Many people are afraid of the risks and uncertainties that come with starting a new venture, and the idea of investing a significant amount of money into a franchise can be intimidating.

However, it's important to remember that every business carries some level of risk. The key to overcoming the fears of investing in a franchise is to do your due diligence and make informed decisions. Here are a few tips to help you navigate the process with confidence:

1. Research the franchise thoroughly. Take the time to understand the business model, the products or services offered, the target market, and the competition. Look for franchises with a proven track record of success and strong support systems for their franchisees.

2. Consider your strengths and weaknesses. Investing in a franchise is a more than one-size-fits-all solution. Choose a franchise that aligns with your goals, skills, and interests so that you can bring your unique strengths to the table.

3. Understand the financial requirements. Investing in a franchise typically requires a significant upfront investment, as well as ongoing fees and expenses. Make sure you fully understand the costs involved and have a solid plan in place for financing your investment.

4. Get professional guidance. A Franchise Consultant can help you navigate the process while you are making an informed decision. In addition, Franchise Consultants can help you understand how you can weigh the risks and potential rewards of investing in a franchise.

5. Take your time, and don't rush into a decision. It's important to thoroughly research and consider all of your options before making a commitment. Don't feel pressured to make a decision before you're ready.

Investing in a franchise can be a rewarding and exciting opportunity, but it's important to approach it with a level head and a clear understanding of the risks and rewards. By doing your research and seeking professional advice, you can overcome your fears and make an informed decision that is right for you.

If you're interested in learning more about overcoming your fears of investing in a franchise, please schedule a call with me to discuss your goals and concerns.

Franchising Myth: I Should Invest In A Brand Name People Recognize

Many people think that buying the most well-known brand is the best option. However, it is not all about the name on the sign and is more about the value the brand provides its customers.

You don't have to invest in the biggest or flashiest franchise in the market, but you should examine the value they provide to customers and the principles they embrace as a brand. This enhances the franchisee and franchisee relationship.

Here are a few reasons why a large, well-known brand is not always best.

Level of Investment
First, there may be higher costs associated with the initial investment. The cost of purchasing the franchise, as well as any associated set-up expenses, are likely to be much higher.

With the challenge of making a return on your investment, as well as increased stress, this brand may not be the most profitable franchise for you.

Franchisee Background Requirements
Not only are large franchises more competitive, but the franchisor may also be more choosy. As a result, they will likely demand a certain combination of abilities, expertise, and history in the industry.

More Than Just Profits
If money is your only motivation for beginning a franchise business, the security of a well-known brand is likely adequate. However, if you wish to target niche markets, big-name companies are more likely to cater to the masses and will fall short of your expectations.

It's critical to keep in mind that while you will profit from the reputation of a well-known brand, this is true of any size franchise. This is because they are all established brands in their respective industries, with a tried and true model that works.

If you would like to learn more about franchise brands that fit your needs, please schedule a brief call with me.

What Motivates Franchisees To Make the Leap?

Being a franchisee includes both risk and responsibility. Franchisees must invest in the business and bear the bulk of the losses and gains. Being the boss is both exhilarating and terrifying, and it's easy to see why someone might choose to become a franchisee.

Research
According to studies, potential franchisees are primarily motivated by research. They speak with current franchisees of the franchises they are considering, look over company paperwork, meet with company personnel, and even visit actual franchise sites.

Information from current franchisees in the company has a big effect on potential franchisees. A real franchisee may share first-hand experience with the brand the person is contemplating, discussing their accomplishments, challenges, degree of assistance, and training quality.

Franchisee research frequently covers certain parts of the franchiser's business operations, such as how simple it is to manage a franchised unit, what sort of assistance the company provides franchisees, and what amount of brand awareness the business has.

The Risks of an Independent Business
The common reason new franchise owners choose a franchise instead of an independent business is because of the significant risk of running an independent business, along with the franchisee's lack of business expertise. New franchisees can also follow along with fellow franchisees and ask questions, which is a great advantage over being an independent business owner.

Opportunity is Key
Opportunity is a key component for some franchisees. Since some franchises have limited territories or are looking to expand aggressively, the opportunity for a new franchisee to join may be limited by time. If you are interested in a franchise, you should begin the candidate process as soon as possible.

If you would like to learn more about franchisee motivation, please schedule a brief call with me.

Why Is An Executive Franchise Opportunity A Great Option For You?

Have you been looking for a method to spice things up in your career? If this is the case, an executive franchise opportunity might be just what you've been looking for.

A powerful executive franchise brand makes it simple for beginners in the franchising market to launch their own venture. In addition, unlike owner/operator franchises, franchisees often supervise a small executive staff or manage the manager under this business model.

Greater Flexibility
In an executive franchise opportunity, franchisees enjoy greater personal freedom. This business model allows franchisees to decide which tasks they’d like to complete personally and which to delegate to their trusted staff.

Franchisees can also make their own decisions, such as creating their own schedule. For example, you can determine when you want to take a vacation or sick days without going through an HR department.

As the franchise owner, you will have the authority to make many of these decisions on your own. In addition, since you won't be dealing directly with your customers, you'll have more time to devote to expanding your business as it suits you.

A Greater Share of the Profits
Many executive franchisees come from a corporate background. Unfortunately, one of the most frustrating aspects of working in a corporate environment is that no matter how successful your company becomes as a result of your hard work, you won't see much of an increase in your income.

Executive franchise opportunities are different from corporate businesses. You hold the lion's share of the responsibility for the success or failure of your business. Thus you will also be the one to benefit most from its growth.

A Turnkey Investment Opportunity
Another appealing feature of executive franchise opportunities is that they are a turnkey investment. Unlike independent business owners, executive franchisees are less likely to be caught off guard by unexpected costs.

A strong executive franchise brand understands what it takes to get your new business up and going as smoothly as possible. Furthermore, they may make the procedure uncomplicated from start to finish.

If you're new to the idea of executive franchising or work more info, I can help. Please schedule a brief call with me.

Why The Holiday Season Is Perfect For Reflection And Self-Improvement

I would like to share my personal thoughts on the holiday season and why it’s perfect for diving into self-improvement. I also have thoughts on how to ease into self-improvement actions.

Express Gratitude And Share Kindness
Even though every day is a good time to show gratitude and share kindness, it’s especially prominent around the holidays.

I understand that money can be tight this time of year. However, keep in mind it doesn’t cost anything to be a decent human being. To show kindness and help other people.

Start each day thinking or saying something you are grateful for out loud. I’ll Start!

I am grateful for my family, the freedom of time I have to spend with them, and that I get to help so many others realize their dreams, and not be paid by them. I get to share what I’ve learned over the last 20 years of business experience to help catapult others to their successful business ownership.

A Time To Reflect
Consider all of the twists and turns, failures and achievements, and ask yourself:

  • Would you like to experience this same year?
  • Or would you like to make it better next year?

Think About The Future
This is the perfect time of year to think about the future. For some people, this might mean creating a New Year’s Resolution.

Set some goals, and define your why. Why set this goal? Why are you passionate about this particular goal?

Once you have your goals in mind, put together a simple plan to execute them.

Here’s to your growth!

If you would like to share your goals with me, please schedule a brief call with me.

5 Things For Candidates To Know When Considering Emerging Brands

The franchise industry continues to grow at a record pace. One out of every eight jobs in the country is related to franchising in some way. One prevalent trend is the continuing growth of emerging franchise brands. A generally accepted definition of an emerging brand is a system with under 50-75 operating units, and a micro-emerging brand has under 12 units. Emerging franchise brands are more common than ever.

While funding emerging brands under 75 units may present unique challenges, FranFund has the expertise to simplify the process for candidates of both emerging and established brands. FranFund has helped countless entrepreneurs fund their dreams of owning a franchise regardless of the industry, sector, or location.

#1: Understand Key Differences Between Emerging And Established Brands
A candidate considering an emerging brand would be wise to consider a few crucial points relative to funding that will impact their ability to obtain the funding they need. For example, recognizing that the first 20 franchisees of a new system must have a strong financial history and sufficient capital. These candidates will establish a reputation for the emerging brand in the lending community. This reputation can go two ways: 1) having 20 high-performing franchisees that validate well; or 2) having franchisees within that 20 that default on their SBA loan. Lenders view a loan default as both the candidate/borrower's and the emerging franchisor's responsibility. An oft-repeated phrase in the franchise industry is "businesses fail for a number of reasons but being over-capitalized is not one of them."

The funding solutions available to the candidate of an emerging brand will depend on the total project cost. The total project cost (TPC) is the cost of the franchise fee, equipment, marketing, licensing, leases, etc., plus working capital. Emerging brands do not have the benefit of a regional or national reputation that would generate immediate lender interest. We need to bring a financially strong borrower to the table for an SBA loan to mitigate that issue. Put simply, because emerging brands do not have "strength of brand”, that strength must be found in the borrower.

#2: Funding Strategies For Emerging Brands
Two of the most common capitalization strategies for candidates of an emerging brand are Rollover for Business Startup (ROBS) and Small Business Administration (SBA) loans. Other solutions I’ve seen for funding emerging brands may include:
Signature loan (unsecured)
Securities-backed loan
Equipment leasing
HELOC (home equity loan or line of credit)
Candidates/franchisees of emerging brands can use a combination of these as a complete funding strategy.

#3: 401(k)/IRA Rollover
Utilizing a rollover program such as FranFund's FranPlan® allows candidates to access their qualified retirement savings tax-deferred and penalty-free to invest in their business. The IRS affectionately refers to this process as ROBS or Rollover for Business Start-Up. Using this program, the candidate/franchisee invests their IRA or 401(k) from a previous employer into their new business. At the end of this transaction, the new company operating account has cash available for any legitimate business expense, and their new 401(k) has shares of stock equal to the initial investment. As the business grows and prospers, the value of the stock grows, often performing better than your stockbroker! Using this option as the entire capitalization strategy means that the new franchisee can open their doors with little or no debt and therefore reach break-even sooner. However, you can also use this product paired with a business loan for the down payment (also known as equity injection) for the loan. The IRS, however, does have strict guidelines regarding the execution and maintenance of the plan. FranFund offers the IRS-mandated Third-Party Administration (TPA) service to ensure your retirement plan maintains the IRS compliance requirements.

#4: SBA Loans
The Small Business Administration (SBA) provides a guaranty to lenders to incentivize them to consider riskier loans. Generally speaking, lenders think all business startups and first-time business owners are risky. The lender's number one objective is to be comfortable with the borrower's ability to repay the loan. The SBA program works with lenders to offer business loans for startup, acquisition, expansion, and working capital with values available up to 5 million dollars. At FranFund, we have developed a portfolio of SBA lenders across the country that understand the value proposition of the franchise industry and are interested in franchise loans, including emerging brands. Your funding partner's role is to help prepare a loan package and shop the loan to our lending network to get your candidates the best rate and terms on their emerging franchise.

#5: How To Know Which Options Are Right For Emerging Brands
Around the internet, candidates may find interactive funding or pre-approval tools that allow input of key information about assets, credit score, investments, available cash, etc., allowing them to calculate a funding amount for which they qualify. FranFund offers a tool for this. However, there can be tremendous variables these tools are unable to accommodate. The most efficient, effective, and accurate way to get an assessment and pre-qualification is to speak to an expert franchise funding consultant. It is advantageous to work with a funding partner such as FranFund, who uses a franchise-specific pre-qualification, has extensive expertise in the franchise industry with emerging brands, and has relationships with lenders who are comfortable working with an emerging brand franchise model.

If you’d like me to find your franchise match, please schedule a brief call with me.