Franchise Brokers Association BLOG

It’s pretty remarkable how many different types of franchised businesses there are available.  When most people think of a franchise, images of McDonald’s, Burger King and Subway come to mind.  But less often do people think of the other business concepts the franchising industry has to offer, like:

• Clothing boutiques
• Day Spas
• Hair Salons
• Business Services and Coaching
• Childcare and Development
• Tutoring and Education
• Financial and Loan Services

There are thousands of franchise and business opportunities to invest in.  And, while many people initially say “I want to own a restaurant” or “I want to own a gym” there are important factors than can help you choose the very best business option for you.  Are you looking for:

• Flexible schedule
• Home office based operations
• Low investment level
• High return on investment
• Quick start up
• Small office or small number of employees

This is where a franchise broker can provide you with valuable guidance and assistance.  Their purpose is to not only match you with the best industry for you, but also the best business model.  Your work-life balance and your business goals are taken into consideration when researching your franchise options.  Do you want to:

• Make a difference
• Operate a green company
• Work with other businesses and professionals
• Provide job opportunities

It is important to take all of these items into consideration when investigating franchise and business opportunities you are interested in.  While these things can be daunting, having an experienced partner in your research process can prove immensely helpful (and stress reducing).

If you’re interested in talking to someone about your options or want to learn more about the benefits of using a franchise broker, click here and fill out an Information Request Form.

Throughout the 2011 Franchise Broker Conference and Expo, Dan Durney and the wonderfully accommodating owner at the Woodhouse Day Spa in Orlando, Allison Murphy, provided tours of the spa to conference attendees.  38 brokers and consultants participated in the tours; tours not only gave a peek inside the plush and luxurious treatment rooms but also provided a look inside the day-to-day life of an owner and why they decided to invest in the Woodhouse franchise.

The Woodhouse Day Spa is a lavish and well-appointed, resort-style spa with unique services, including the only Shirodhara massage in Orlando.  The spa offers franchisees multiple streams of revenue, including upscale spa services, private party packages, and retail sales.  The scent filling the spa caught everyone’s attention, a signature scent developed by Woodhouse Day Spa’s corporate company that is a big seller and a must-have for many clients after their initial spa experience.  Incentive programs encourage clients to make follow-up appointments before they leave the spa, further promoting multiple visits per client.

The location of the Orlando spa is placed within an affluent area of the city, but also conveniently located near upscale tourist hotels and attractions.  The franchisee uses a third-party company to encourage customers of local hotels and resorts to become clients of the spa, and they highly recommend that practice to other franchisees.

Allison spoke very highly of the brand, the training and support offered by the franchisors as well as the marketing collateral and branding efforts they’ve put into this concept.  She knew she wanted to open a spa, but once she came across Woodhouse and flew out to meet the team, she knew this was the franchise for her.

This is a wonderful concept that provides their franchisees with everything they need in the expanding and popular spa market.  The FBA is very much looking forward to working with Dan, Brandchise and the Woodhouse Spa team.

Shirodhara Oil Pot and Stand	Facial Treatment Table
Massage Treatment Room	Vichy Shower Treatments

Seeing a franchisee’s operation first-hand is truly eye opening.  You get to see the day-to-day life of a franchisee in a given system and can give your clients an honest description of what they can expect when they invest in this franchise or business opportunity.

The FBA is so pleased to announce this opportunity to franchise brokers and consultants who are attending the FBA’s upcoming Convention.  Signworld has graciously invited 2011 Convention attendees on a private tour of a local Signworld operation.  The tour will take place November 9^th from 12:00 – 2:00 pm, travel between the Convention hotel and the licensee’s location and lunch is provided.

This is an excellent occasion to see the operations of the notable Signworld opportunity, meet and ask questions of a Signworld licensee and see why this is a fantastic investment for your client.

 Registration for the Convention and an RSVP for the tour are required. 

For details on the event click here.

For questions or to RSVP, please contact Andrea at andrea@franchiseba.com.

One of the greatest advantages of investing in a franchise over building a business from scratch is the ability to leverage your investment.

While some banks will still loan funds to a qualified individual to start a business, they are few and far between.  With the state of the industry, you now have to provide not only more but a higher quality of information to the lenders to improve your chance of getting a loan.  When investing in a franchise, the loan process is easier.  Franchise companies have a track record of other business owners who have run this type of business successfully.  They provide the FDD which contains exact start-up costs, materials, suppliers and more.

Franchisors many times have relationships with lenders that help their franchise prospects apply for and obtain funding.  A franchise broker can also give you access to lending information, companies that they recommend and would (or maybe have) used, giving you direct access to companies and contacts that know the benefits of franchising and helping your chances of getting the loan to start your business.

This all makes sense, if you were loaning your money, wouldn’t you want to see the highest chance of success possible for your borrower?  Franchising has proven time and time again to provide this.  Therefore, banks prefer a business with data, statistics, and proof to back up the borrower’s forecast.

Learn about leading franchise funding sources and franchisors with funding connections, contact us here.

So, you want to start your own business?  You have heard about the benefits of working with a franchise and you’re interested in researching the opportunities out there for you.  Investing in a franchise over starting an independent business offers a wealth of benefits, including valuable support, tested and proven systems, discounts on products and services and more.

What is likely to be your first questions is “How much money can I make?”  Even though you have heard great things about franchising, you need to research each concept’s specific earning potential.

A percentage of franchisors provide a financial representation (also known as an Item 19) in their Franchise Disclosure Document (FDD), industry sources report between 20 – 35%.

Through their memberships, FBA members can offer their clients one complimentary hour of accounting consultation.  This can help you to uncover the financial stability of the franchise system you are investigating.  FBA members also provide a proforma which can help you identify your break-even point.  This provides you with an outline of your targeted sales before you even open your doors. 

Preparing yourself for a franchise purchase is the best way of ensuring your success, and researching your income potential and ROI is large part of being prepared.

If you are interested in speaking with our Accounting consultant, contact an FBA member here.

Bast via Flickr

When you research buying a franchise, one of the most important parts of your due diligence process is asking the Franchisees questions.  Franchisors provide you with names of past and present Franchisees of their system as well as their contact information.

Questioning the Franchisee is about so much more than asking if they are happy with the franchise and the business.  It’s talking to the people who are working in the business, the business that you are looking to invest in, and digging into the benefits and issues that they – and you will – face every day.  It’s analyzing the system beyond the obvious and finding out if the business will fit your lifestyle and goals.

In addition to questioning the Franchisees, you can access surveys from independent third parties that will provide insight into the franchise system.  They ask all Franchisees in a system the hard questions about support, financial opportunity and the relationship with the franchise.  These findings will provide great insight into the franchise system and whether or not it is a good system for you to become a part of.

Due diligence is the most important part of your purchase process.  You want to make sure you are making the right investment for you, your family and your future.  Talking with the Franchisees and learning about their experiences are a pivotal part of the process.

Contact us to get a list of questions to ask Franchisees and to obtain information on Franchisee surveys.

Build Wealth With Businesses

How many millionaires can you think of?  Of those, how many of them have owned and built their own business to become a millionaire?  The book The Millionaire Mind by Thomas J. Stanley reports that 2/3 of all millionaires are business owners.  Why is that?  The simple answer is that businesses have two equity streams.  You earn a living with a business just like you do with a job, but you also build equity.

If you have ever looked into purchasing an existing business that is for sale, you will find that it is much more expensive than starting a business from scratch.  In fact, one of the franchises that we work with costs around $50,000 to get up and running.  By the fifth year in business the average Franchisee is grossing over $600,000 and many of them have hit the million dollar mark.  When a Franchisee goes to sell that business, they can charge between half to two times the gross sales.  That works out to be $300,000 in the worst case scenario and $1.2 million in the best case, assuming you only make $600,000 per year.  That is up to 24 times your original investment, and remember while you were working on your business and building equity, you were also taking a salary.  Show me a stock that can give you that kind of return!

There is risk in business just as there is in any other investment.  When you consider franchising with the RIGHT franchise system, your risk is dramatically reduced.  You will start with the end in mind, and think about what kind of return on your investment you want.

Franchising isn’t a magic pill, but with the right research, hard work and dedication to your system, a positive ROI on your business is absolutely within your reach!

*Today’s post is from FBA Member Robert Slatkin on his recent deal with CertaPro Painters.

America’s Best Brand

By: Robert C. Slatkin, President

Vantage Franchises – FBA Member

A Division of Vantage Business Group, Inc.

We’ve all seen polls, articles, and studies trying to determine “America’s Best Brand.” Is it Apple, McDonalds, Coke, Google? The arguments go on and on, and each year the same top 5 names seem to just get switched around.

I would like to nominate a Brand that is often overlooked by almost everyone in these discussions, but could possibly be the most relevant one to those of you reading this article. The Brand I am referring to is David Brand. For those of you that don’t know David, you should make it a point to get to know him. He is the Regional Manager of Recruiting for CertaPro Painters; North America’s largest painting company, and a preferred Franchisor with the FBA. David and I just closed a challenging deal together. The way he conducted himself only solidified the high regard I had for him since we first met, and inspired me to write this.

David is what I call “a difference maker.” By that I mean someone who can have a materially positive impact on your business. If there is a problem, and there is a possible solution, he will find it.  He will go out of his way to satisfy your clients, and, because of all this, his knowledge, work ethic, and CertaPro’s attractive, segment leading Franchise, the bottom line is that he will put more money in your pocket (if that’s important to you).

Here are some specific reasons why, to me, David Brand stands out:

• He does what he says he will do. (Okay, this means he already stands above 80%-90% of “the pack”)
• He does not avoid issues, he deals with them.
• He provides intelligent and creative solutions.
• He acts with honesty, directness, and integrity.
• But, the biggest factor that, I believe, sets David Brand apart from other Franchisor Representatives, is that he truly becomes your Partner in the process like no one else I know.

I am not saying there are not some excellent people to work with throughout the franchise business. I know there are, and I have had the privilege of working with some of them. But, I am saying that with David, there are no ego battles, no attitude problems, and no antagonistic behavior, unless you are bringing it.  Again, working with David is a partnership. What a difference that makes! And what a pleasure! Without going into all the details, without David Brand, there is absolutely no way my recent CertaPro deal gets done. Period.

So, for all these reasons, he gets my recommendation and vote for America’s Best Brand!

Contact Information:

Robert C. Slatkin, President

Vantage Franchises

A Division of Vantage Business Group, Inc.

www.vantagefranchises.com

*I consider David my business partner when doing CertaPro deals, a trusted advisor, and a friend.

*I have no financial interest nor receive any kind of compensation for anything I have said or written here.

Floor Restore offers floor restoration services with the twist of a mobile “showroom” bringing floor samples directly to the customer.  This minimizes overhead, allows franchisees to work from home and gives them the opportunity to offer a unique service.  Floor Restore is currently offering an exceptional promotional program.

Floor Restore
Presents
The
Pioneer Program

Start your business today for only $20,000

Program Available for the first 5 Franchisees.

Program Details:

•   Reduced Franchise Fee: Due in two payments. $10,000 due at sign up and $10,000 due 12 months later.
•   Training Fee WAIVED. Franchisee only pays for travel and lodging.
•   Lease program available on the Mobile Studio, Flooring Samples and Start Up Package due at sign up (up to $25,000 value).
•   Reduced Working Capital Required: NOW only $10,000

Floor Restore will be joining us on July 13th at 3:00 pm EDT to discuss their new program and answer your questions.  Register to attend by clicking here or copying and pasting the following URL into your browser:  https://www1.gotomeeting.com/register/825025464

Use ‘Contact@fba.com’ as “Referring Broker Email Address.”

Email us with any questions at contact-at-franchiseba-dot-com.

Statistics show that small business and franchise owners who use Rollovers as Business Startups (ROBS) arrangements to fund their ventures are 63% more likely to succeed.

Why are they so successful? Because they buy their business in cash and don’t tie their credit or other personal assets to the transaction. Because they don’t have to jeopardize their home or pay high interest costs. Because they start out with more capital to spend on hiring the best employees, advertising and equipment, therefore building a tremendous foundation from the get-go.

Since their founding in 2003, Guidant Financial, has emerged as an industry leader in self-directed IRAs and innovative small business financing. Here are several questions they suggest asking of any ROBS provider when using their services or referring a client, and the answers you will receive when asking them:

1. Have you ever had a plan disqualified or paid taxes or penalties on behalf
   of a client?
   We at Guidant have not. Our plans withstand scrutiny.

2. Do you provide in-house 401(k) recordkeeping services?
   We at Guidant do. In fact, we have over 30 individuals dedicated to the “back end.”  Most errors occur after the initial formation of the business.

3. Do you stand behind your program and will you put that in writing?
   We at Guidant provide Plan Protection to our clients. We will stand behind our work, our clients and your referrals, and bear 100% of the cost to do so.

4. Do you have an in-house legal team?
   Not one attorney, one professional or one resource. A team. Our team at Guidant has the largest legal team in this industry working under one roof. [Clients] can work with us knowing that our team of tax professionals and ERISA experts (including a former ERISA Investigator for the US Department of Labor) provide comprehensive support to them as a client.

5. Do you reciprocate referrals?
   At Guidant, we do. Our web properties generate more than 3,000 leads each month. While some companies rely exclusively on you – we work with you to close deals with your candidates quickly and send call-verified, qualified referrals back to those who support us.

6. Does your company have sufficient experience?
   At Guidant, we’ve helped more than 6,000 people in all 50 states invest more than two billion dollars through ROBS, and that amount keeps growing.

7. Is your company the recognized industry leader?
   At Guidant, we’ve been honored by many industry and civic organizations for our leadership, innovative business and philanthropic efforts. We were recognized as a Small Business of the Year by the US Chamber of Commerce, ranked on the prestigious Inc 500 list, and the SBA said our founders were the best in the country.

For more information on Guidant Financial’s services and how they can help you fund a business, contact an FBA member today.