Author: Ken Garron

The Fine Print on Franchises: What you need to know before signing on the dotted line.

Franchises offer entrepreneurs many benefits, including marketing tools and expertise, lots of back room support, and training to help new business owners succeed.

The road to the right franchise, however, may present some rough terrain to cross, which is why preparation is so critical. Every potential new franchisee needs to take the time to read the fine print before signing any contracts.

The good news is that Federal Trade Commission regulations provide a good safety net, which goes a long way toward helping potential new franchisees avoid getting a raw deal. A franchise coach can help you through the nitty-gritty of this process.

You will want to get a copy of the franchise disclosure document, which franchisors are required by law to provide you at least 14 days before you sign a contract or pay any money. You can ask for the document in any format convenient for you.

Before signing any contracts, we recommend you consult a franchise attorney who has the expertise to help you review what can be a long and complex agreement. In the meantime, as you begin your preliminary research, here’s what you should look for:

Franchisor’s Background

You want to know how long the franchisor has been in business. What’s the competition like? Pay close attention to the general business backgrounds of the company executives and how long they’ve been with the company and in the industry.

Litigation history

Has the franchisor been involved in any litigation with their franchisees? Have any of its executives been convicted of fraud or other violations of franchise law? Have franchisees filed law suits against the franchisor? These would all be red flags to further investigate if not disqualify this franchisor from your search.

Initial and Ongoing Costs

This is critical information since you never want to find yourself short on funds or surprised by costs you should have known about. Examples of costs franchisees face are: advertising, business promotions, operating licenses, inventory, royalty payments, cost to purchase equipment, and insurance, among others.

Only by estimating your costs can you realistically evaluate franchise operations to see if you have the capital to succeed in this business.

Restrictions

Franchisors may restrict from whom you order supplies, what you may offer for sale and where you can sell. Each franchisor will have different ways of determining a territory, which is meant to protect current franchisees but may not be satisfactory to you. For example, Dunkin’ Donuts has restrictions limiting some franchisees from also offering 31 Flavors ice cream.

Training

While franchisors offer training, you need to know who is eligible for training and who pays. Are new employees eligible? Are support staff available for ongoing support? Again, make sure you know all the costs.

Advertising

Franchises often are asked to contribute a portion of their earnings for advertising. Get the details on what the franchisor requires. What percentage of the advertising budget is spent in your area? Will local advertising amount to extra out-of-pocket costs?

Current and Former Franchises

Plan on talking to as many current franchisees as possible. Ask them what you will need to do to succeed. Also talk to former franchisees to learn what went wrong for them. Make sure you ask financial questions, such as their total investment, and how long it took them to recover their initial investment. What are their earnings? Franchisees’ income might vary quite a bit, depending on geographic area, the skill and commitment of the owner, and other factors.

Financial History

You want to make sure the franchise company is financially stable since you certainly don’t want the company to go out of business just after you invested your money. You also want to ensure the franchisor has sufficient money to supporting its franchise system. You will have access to the financial statements of the franchise company, so review them – or better still, have an accountant review them for you.

For more information, check out the FTC’s website, which has published a consumer guide to buying a franchise at http://www.business.ftc.gov/documents/inv05-buying-franchise-consumer-guide

Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!

Contact Dan Citrenbaum to create the career you’ve always wanted. As a Franchise Coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-4589.

©Dan Citrenbaum 06/2015

Franchisors offer incentives to help veterans start their own franchises.

Don’t know anything about starting a business but are determined to take control of your employment destiny?

If you’re a military veteran, the International Franchise Association (IFA) thinks you’re particularly well-equipped for a franchise. And they’ve got a program to help you take a leap into entrepreneurship and a career in which you can use the skills you’ve acquired in the military.

VetFran was founded as a special program within the IFA in 1991 to help veterans returning from the first Gulf War as a way to thank veterans for their service, according to the IFA.

Then in 2011, the IFA launched Operation Enduring Opportunity, a partnership with several organizations, including the U.S. Chamber of Commerce and the U.S. Department of Veterans Affairs, to help the large influx of veterans transitioning to civilian life get into franchise careers. The program has been a great success.

Through VetFran, many franchisors will waive 10 percent to 25 percent of the franchise fee, which can help veterans hire staff as they get their new businesses up and running.

In the last three years, more than 150,000 veterans have started careers in franchising, more than 5,000 as franchise owners. Now, one out of every seven franchise businesses is owned by a veteran of the U.S. military, according the IFA.

This is clearly a win-win partnership for both sides.

Franchising offers one of the very best paths to starting your own business for those with little or no experience in the business. With a proven system, training and ongoing support, novices get a franchise team to show them the way to success, helping them troubleshoot the rough spots along the way. As the IFA points out, the system is not dissimilar to the structure of military life.

While veterans can expect a little extra special treatment as thanks for their service to the country, franchise companies benefit from the particular strengths veterans bring to the franchise.

Before you or a veteran you know starts second-guessing all the ways he or she is not qualified for a career in franchising, consider the following list, compiled from articles written by Franchisors or IFA officials.

The Treasured Traits of Veterans Prized by Franchisors

Integrity and Honor

Ingrained through their military training, veterans learn firsthand the importance of executing orders with dedication to accomplish a common goal.

Respect for Rules of Operation

A military operation requires everyone to do his job. A franchise requires franchisees to follow the proven system of the franchise company to succeed. In both one person implements a plan prepared by others with proven experiences.

Leadership Training

Business ownership requires the type of leadership the military teaches. An owner is responsible for the business, its employees and, of course, accountable to its customers.

Discipline

When the buck stops with you, you need a disciplined work ethic, especially during the early days as you build your business to profitability.

Character

Overcoming obstacles, an everyday activity for soldiers in the military, builds the kind of character necessary for business ownership.

Teamwork

In the military, soldiers learn to put the success of the mission ahead of their own interests. This dedication to teamwork well suits the needs of franchisees to work with franchisors in a cooperative manner to maximize success.

To pursue the opportunity available through VetFran, veterans should check out the website and complete the toolkit at www.vetfran.com/toolkit-sign-up/. You’ll find a list of franchises that offer incentives to veterans, as well as greater detail on what it takes to purchase a franchise, such as investment of capital and time for research.

Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!

Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a franchise coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484)278-4589.

© Dan Citrenbaum 09/2015

Are You Cut Out for a Franchise? Take the Quiz!

Buying a franchise is one of the quickest, safest ways to start your own business, but a franchise is not for everyone, particularly if you’re the type of person who likes to blaze your own trail.

For starters, to be successful with a franchise — that is to maximize your potential earnings — you must be prepared to follow the franchisor’s system, the time-tested method the company has for virtually every aspect of its operations, including staffing protocols, an advertising campaign and store build-out plans.

After working with dozens of franchisees over the years, I still see new franchisees decide they can cut corners, for example, by declining to hire enough people to cover the day-to-day responsibilities of meeting the needs of customers.

The owner may decide to save money by doing some of the work himself, for example, cleaning houses or caring for seniors. As a result the owner has less time to build the business, creating a steady and growing clientele to generate earnings. While that owner may save some upfront costs, he or she loses long-term earnings potential.

So how do you know if you are a good candidate for a franchise? Answer eight easy questions:

1. Are you prepared to thoroughly research the business?

Selecting a franchise may be your first most important step, and the process requires solid research, from reading background materials to putting shoe leather to pavement and visiting franchisees.

1. Are you prepared to work hard?
2. Just because the business comes with a system doesn’t mean you won’t have a learning curve. Of course, once you have good employees in place and operations running smoothly, many franchise operations will allow you to take an afternoon for golf or to attend a child’s track meet. Many franchisees set a realistic goal to work 30 to 35 hours per week within three to five years of starting their business.

1. Can you call for assistance when needed?
2. A good franchisor wants to help you through the start-up phase, so to take full advantage of what you’re paying for, you need to be willing to ask for guidance. A good franchisor will likely offer many good suggestions, possibly a long to-do list that will require time to implement.

1. Do you have enough capital to set up the business to operate as designed?
2. Before you buy the franchise, your research should have told you how long it will take to operate in the black, and the Franchise Disclosure Document will tell you your upfront expenses. Getting to profitability varies by location and franchisee. You will need to be work hard and pay operating expenses for some time before earnings begin.

1. Can you accept paying the franchisor royalties and other specified fees?
2. These fees are the price you pay for a proven operating system, built-in research and development, a fully vetted list of suppliers, as well as an advertising campaign and ongoing support and training.

1. Will you accept structure in your business?
2. If you would rather create your own approach to a unique business that reflects your particular vision for a product line or service, you don’t want a franchise.

1. Can you accept advice from authority?
2. When you buy into a franchise system, you are part of a team, and the franchisor needs each of its franchisees to present a consistent image to the buying public. No reinventing the system.

1. And, most importantly, can you trust the system to work? Ideally, you will answer yes to each of these questions. If you answered no to more than two, then you might want to consider an independent business. I also suggest you consult a franchise coach, who is in the business to help you make the best decision to ensure success. Ready to make your dream of becoming an entrepreneur come true?
2. If the answer is no, then don’t buy the franchise.

Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!

Contact Dan Citrenbaum to create the career you’ve always wanted. As a Franchise Coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-4589.

©Dan Citrenbaum 05/2015

Shorten the Learning Curve: Start Your Own Business with a Franchise Tips from a Top Franchisee

Bob Riesenbach happily left behind corporate America to forge his own path building a business of his own, even if that has meant working as many hours as he did in corporate America.

Is there a catch? Not when you love what you do and know it’s all for you!

Mirroring the desires of many MBA-ers of his generation, Riesenbach always dreamed of starting his own business, and so, after 23 years of working for big corporations, he left his marketing position at a large retail chain of convenience stores and ventured out on his own without a safety net.

“I was tired of bureaucracy and politics,” he said, so he started researching his options. While he started looking at businesses for sale, he didn’t find much in his area beyond pizza joints and bars.

Before long, he decided a franchise made the most sense because “I didn’t want to start from scratch, and I thought I could learn from other people’s experiences,” he said.

After meeting a franchise coach at a Philadelphia area networking meeting, Riesenbach started looking closely at several franchise possibilities, eventually choosing to buy a franchise that took the most advantage of the skills he had spent his career acquiring.

Almost four years down the road, Riesenbach is happily building his new business, CMIT Solutions of Cherry Hill, a provider of information technology services for small and mid-sized businesses, with the support of a strong network of fellow franchisees.

“The strength of the organization comes from our partnership with other owners,” Riesenbach explained. The franchisor sets up formal networking groups, and he talks to fellow owners at least once a week.

Advantages of a franchise include fully vetted resources, such as vendors, marketing services, and annual conventions. Franchisees have the ability to leverage the size of their network to attain for clients discounted prices on services from vendors, such as Dell, that would likely not be available to a small independent business.

Riesenbach’s company continues to grow. He has been honored by his franchisor as Rookie of the Year, and has also received honors from other local business organizations, including the Philadelphia Business Journal.

Riesenbach’s top tips for prospective franchisees:

1. Look for a good match with your skill level and interests.
2. Talk to a lot of existing franchise owners, whose contact information can be found in the Franchise Disclosure Document. Don’t only talk to those the franchisor may recommend.
3. When people say “Why not just do it on your own, so you don’t have to pay royalties,” ignore those people… I feel I’m getting a lot more value than I’m paying for.
4. Have realistic expectations – Know it takes a while to get a new business going.
5. Be prepared to work hard.

Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!

Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a franchise coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-4589.

© Dan Citrenbaum 08/2015

Sick and tired of your job?

Try our Entrepreneur’s Checklist

If you’re one of the 90 percent of Americans employed full time by someone else, chances are you’re not feeling much satisfaction at work. Some of you are stuck with a boss who makes your lives miserable, while others may be merely bored or vastly under appreciated

Only 30 percent of Americans are actively engaged in their jobs, according to a recent Gallup report, State of the American Workplace. Not only does being unhappy at work lead to a whole range of obvious complaints, it can also take a toll on your health, the survey reported

One way to improve your situation is to strike out on your own. So how do you know if you’ve got what it takes to run your own business?

Just like most things in life, what separates the whizzes from the also rans is preparation. Do your research, write a realistic business plan, raise sufficient capital and your odds for success go way up.

Even before you pinpoint your business, you’ll need to start by asking yourself key questions to determine whether you’re ready to leave a sure paycheck for the chance to take charge of your career for life.

Entrepreneur’s Checklist

Support from your family

When undertaking such a major life change, it’s critical you have your family behind your decision to give up your job to follow your dream. As you may go through a financial fallow period, their support can help you persevere.

Commitment and dedication to making your business succeed

You’ve heard the phrase: You’ve gotta want it more than anything else. Or how about: Hungry for success. The point is you have to believe in yourself even when faced by setbacks. Sometimes that means aggressively courting clients or revising your business plan. Surround yourself with critical support, including a good attorney, accountant and business coach.

Sufficient capitalization or willingness to take on debt

While you will likely need to finance some of your startup costs, you should have sufficient resources set aside to get you through the startup period until revenue begins to exceed costs and the profits start rolling in.

Management Skills

If this is one of your strengths, bravo, but if not, you may need to investigate what it takes to manage employees. If you choose a franchise, you’ll get ongoing training to help you learn the art of hiring, retaining and getting the most out of your workers. Alternatively, you could purchase one of the many franchises that do not have any employees other than the owner.

Marketing

How do you see yourself getting customers? The answer to this question will dictate which businesses best suit your style. If you’re an expert at networking, you’ll likely find it easy to develop a clientele. For those who prefer that customers find them, either due to a good location or national advertising campaign, you might want to try a retail operation.

Desire to develop your own or follow someone else’s system

You may be well suited to a franchise if you like the idea of following a system that’s been perfected over time and working well for franchisees around the country. Or you may prefer to control every aspect of your business and make your own unique contribution to the marketplace.

Tolerance for Risk

Even in today’s job market where a steady job is no sure thing, starting your own business requires you to be comfortable with risk. If you believe in your vision and have the moxy to push through the learning phase, you greatly improve your odds.

If you’ve checked most of the items above and you’re ready to move forward, we recommend you consult a coach to help you decide on a business that suits your skills and experience.

Once you turn the tables and occupy the boss’s chair yourself, don’t forget you still want to make your employees feel valued, help develop their strengths so they, too, can feel satisfied and engaged at work. After all, you’ve already walked in those shoes. And happier employees can go a long way toward helping you make your business a success.

Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!

Contact Dan Citrenbaum to help you create the career you’ve always wanted. Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484)278-4589.

© Dan Citrenbaum 04/2015

Get the Edge and Consult a Franchise Coach!

When shopping for a franchise, knowing how to separate the wheat from the chaff takes expertise. Consulting a franchise coach can help you ask the right questions and zero in on key issues that can mean the difference between success and failure.

While you will find a seemingly endless supply of information about franchises in any internet search, you can save yourself a lot of time and aggravation by consulting an expert who has made his or her career studying the ins and outs of what makes a great franchise.

And since one of the attributes of successful business ownership is having the wisdom to know when you should rely on the expertise of others, your first test comes during your research phase.

To be sure, there are some clunker franchises out there. But to understand how the best franchise operations work, you need to have some idea about what they should offer, and what your expectations should be. If you’re not careful, you could find yourself with a franchise with subpar training and worthless support that ends up costing you your business.

The bottom line: You want value for your money, and the costs can be significant. With the best franchises, the value far exceeds the cost.

A good franchise can provide you all the knowledge you need to have a successful business, unlike an independent startup, where you have to guess the costs and estimate the potential revenue stream. A franchise operation already has a proven system, developed over time with a successful network of franchisees who came before you.

Without exception, franchisors will tell you they have excellent training and hands-on support to help you with every facet of your new business. And some surely do. But their job is to sell you their franchise, so they may leave out the part about a recent turnover in their training staff that has left the program in disarray.

Of course, the best way franchisors can maximize their income is to create the best environment for their franchisees to succeed – spectacularly so. Unfortunately, this isn’t always the case, which is why the research phase is so important.

A franchise coach can help steer you to specific franchisors, based on a thorough assessment of hundreds of franchise operations over the years. Another important goal is to match a franchise to your basic skills and personal profile — so that you can make a good living and enjoy your work.

The Benefits of Tapping the Expertise of a Franchise Coach

A franchise coach can help you figure out:

• What type of franchise you should research — based on your interests, skills and personality
• How well the franchisees have been succeeding
• How to evaluate the FDD
• How to assess franchisees’ and franchisor operations
• How well the franchisor prepares franchisees in the set-up phase
• How good the franchisor’s training program is, which includes answering questions, such as: Do you connect well with the support staff? Do you like them? Are they hands-on? Do they know what they’re doing?

In addition, as you continue your research, a franchise coach can help you answer questions that arise along the way. And best of all their service is free to you since they are paid by the franchisor.

As in every endeavor, you want to capitalize on every advantage you have, so consult the experts and get the edge in your search for your perfect business opportunity.

Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!

Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a franchise coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484)278-4589.

© Dan Citrenbaum 07/2015