Franchise Buyer and Owner Blog

When the time comes to move on and do something different, many successful business owners are scared of selling franchises.  They may be afraid of having their business sit on the market too long, or being unable to sell it at a fair price, but there are ways of marketing franchises that will draw in the most qualified buyers. 

If you’ve ever really thought about starting a business of your own, then you may have considered doing something that is an absolute necessity.  This could include a gas station, convenience store, tax service, hair salon, and many other “essentials oriented” businesses.  An auto repair franchise falls into the category of “absolute necessity” as well.

After fixing cars for a few decades, many expert mechanics realize they would rather own and run a business than spend the rest of their working lives under the hood of a car.  Owning an auto repair franchise is one way of doing this, and is usually far more successful than opening an independent repair shop.  In fact,  an auto repair franchise can be much more lucrative than “turning a wrench” at a local auto dealer or repair shop. 

Being in the restaurant business is never an easy road; just ask anyone who’s ever done it.  For some people it has an addictive quality, and they cannot get enough of the fast pace, but this type of franchise is not for everyone. 

If you have always enjoyed working with the public and being the person “in charge” behind the counter, then maybe a franchise in food service is right for you.  To be successful with this type of franchise, you will need great communication skills, high energy, and a passion for owning your own business. 

Why is a franchise in food service such a great idea right now?

Are you shopping for the perfect franchise?  Have you already done your research in a franchise opportunities guide?  Then chances are you are more confused now than you were before you started searching.  That’s because it isn’t until you start searching for a franchise that you realize how many different franchise systems exist.  So how do you narrow the playing field of potential franchises? 

One way to learn more about franchising is to attend a franchise exposition, where you can view and compare a variety of possible businesses.  However, you may not get the attention you deserve in a setting like this.  Most of the exhibitors at this type of expo are looking to make a sale, so they may not give you the most balanced advice.

If you are looking to start a new business, franchises offer the excitement of a start-up without all of the uncertainty.  Because a good franchise system has already been successful in other areas of the country, your risk as an investor is minimal.  However, with such a wide range of business models to choose from, it makes sense to start your research by consulting a comprehensive directory of franchises.

A franchising directory will allow you to search by price range, industry, and geographic area.  By asking yourself some important questions up front, it is easy to use the franchise directory as a way to narrow the playing field of potential businesses. 

Investing in a franchise business is a lot less risky than staring a business from scratch; especially when you are considering one of the top food franchises.  Even though thousands of food franchises are started every year, few of them even come close to the success that has been realized by the top 10 food franchises.  According to recent research, here is a top ten list of food franchises in the U.S.:

1. Subway
2. Jimmy John's Gourmet Sandwich Shops
3. Jack in the Box
4. Smoothie King
5. McDonald's
6. Buffalo Wild Wings Grill and Bar
7. Hardees
8. Denny's
9. Pizza Hut
10. Dunkin' Donuts

Depending on where you live, you probably have about five of these franchises within a short drive of your home.  But what makes these top food franchises so successful, while other ones continue to struggle.  Each of these businesses has its own unique story to tell, but one thing that seems consistent among all of them is their ability to change along with their customers.  Food franchises must continuously adapt in order to remain successful. 

For a chain like Dunkin Donuts to compete with recent rivals like Starbucks and McDonald’s, they had to completely reevaluate their coffee business, which accounts for over 60 percent of its business.  As a result of their efforts to increase brand loyalty in this area, Brandweek magazine awarded the chain its coveted “Marketer of the Year” for three years in a row. One of the nation’s top food franchises, Massachusetts-based Dunkin Donuts has more than 7,000 shops across 30 countries, 4,400 of which are located in North America. 

Subway is another franchise that has adapted to market trends by expanding its product offerings.  By offering alternatives to the unhealthy fare served in most of the top food franchises, Subway’s popularity soared.  This popular purveyor of subs, flatbread sandwiches and salads is now the second-largest quick service food franchise behind McDonald’s.  With more U.S. locations than McDonald’s, Subway now operates 32,000 locations in 90 countries, every one of which is franchised.

While many other restaurants have come and gone, these top 10 food franchises have survived because they focused on what their customers wanted.  Interested in starting a business that has an excellent chance at success?  Before you look at lesser-known business models, why not check out one of these top food franchises?

Buying a franchise restaurant is one of the most common ways for would-be entrepreneurs to enter the world of business ownership.  With traditional restaurant ownership being one of the riskier ways to start a business, with restaurant franchises just the opposite is true. They may be more expensive than many other types of franchise businesses, but that is only because the return-on-investment kicks in right away and the process of buying one is not extremely difficult.

Here are some simple steps to put you on the road to buying a franchise restaurant.

Step One:

Before you buy a franchise restaurant, you will need an accountant, an attorney and money to invest in the business.  Once you decide on the type of restaurant franchise you want, you will find there are several online resources and franchise FSBO directories that will help you find the right franchise for your budget and geographic area. 

Step Two:

Request a franchise application and spend time reviewing the franchise documents with your attorney.  Your accountant can help you better understand the franchisor’s financial statements.  Now is the time to ask questions about company training and marketing support.

Step Three:

Interview some current franchisees and ask them about the day-to-day activities of the business, if they are as profitable as they expected to be, and if there were any unexpected problems in dealing with the franchisor.

Step Four:

Evaluate the target market for your proposed franchise restaurant, and consider how many similar or competing restaurants are located in the area.  Ask yourself if any recent changes have occurred in the community where you want to open the restaurant, or if anything would cause a decrease in potential customers.

Step Five:

Check with your franchisor about financing options.  You will need to know how much working capital you will need to operate the business as well as specifics about start up costs.  Many franchisors will make buying a franchise restaurant very attractive with seller financing. 

Okay, so you have made the decision to start franchising your business.  The first thing you might want to do is hire a franchise consultant.  Franchise consultants can often be found on a Franchises FSBO Directory or you can ask your franchisor where to find a good one.  Why is so important to hire a good franchise consultant?   Franchises consultants play a very important role in your ultimate franchise plan, which can make or break the success of your franchise roll-out.

What should I expect from a franchise consultant?

Before you even start writing a franchise plan, your consultant should have advised you on how “franchisable” your business really is, and given you an idea of what costs are involved in franchising.  Since your initial consultation is really more of an interview, you should not be charged for your first meeting and business analysis.

An experienced franchise consultant should be able to provide you with a number of different services, including the development of a strategic plan, marketing strategies and quality control tools.  In addition, your consultant will be help you with key decisions early on, and with the ongoing adjustments to your strategic plan.

What will my strategic plan look like?

Keep in mind that every business has a different set of needs for expansion, and every consultant tackles these needs in a different way, but for the most part you should expect to get the following information from your franchise consultant. 

• Competitive analysis
• Industry best practices
• Structural and/or staffing recommendations
• Sophisticated financial analysis
• Royalty structure

Quality control tools, including operations manuals, training videos and site selection guides are all a part of the early planning as well, but will probably not be complete until after the initial structure is laid out and approved. 

Once you have completed all of the research and made key decisions about the franchise system, it is time to start selling franchises.  Ask your consultant about using listing your franchises for sale on an FSBO directory.  Franchises often sell much faster on sites like this, and it eliminates the middle man so you deal directly with potential buyers. 

If you plan to start franchising your business in the near future, you will need a qualified franchise attorney to help you draft the offering circular and franchise agreement.  An attorney will also be needed when applying for trademarks and preparing registrations for your state. 

Before listing your franchise for sale on an FSBO Directory, it is vital to use a franchise lawyer who specializes in franchise law.  Many attorneys may claim to have this experience just because they have spent some time evaluating franchise agreements for franchisees, but when you are becoming a franchisor, you need someone with a more specialized background.  Because of changes in case law, state laws and FTC guidelines, franchise laws are constantly evolving, and your attorney will need to be current on every nuance of these laws.

If you have been relying on a franchise consultant for everything else related to the expansion of your business, it may be tempting to take their advice on legal issues as well.  Be careful of consultants who set you up with a franchise attorney who merely “packages” your documents, which still requires a secondary review by another attorney.  Not only will this cost you more money, it can also become a conflict of interest if that same packager/consultant ends up representing your business by selling franchises on your behalf. 

If your consultant offers you outsourced legal consulting, be sure you will have the opportunity to personally interview this attorney to be sure they have an adequate level of experience practicing franchise law.   Franchise law is far too complex for you to trust your legal documents to someone who lacks experience. 

A word of advice for new franchisors: leave the marketing and consulting work to consultant and the legal work to the lawyer. And when it is time to start selling, stay away from business brokers - advertise in a Franchises FSBO Directory. 

Anyone who has ever considered a franchise opportunity has probably wondered, “How much does it cost to buy a franchise?”  For many aspiring entrepreneurs, franchise ownership can seem a lot more complex than a single owner-operated business, but it doesn’t need to be that way.  Before you start shopping a Franchises FSBO directory, it is important to understand the basics about the underlying costs of franchising.

Every franchise has its own unique financial requirements, but the following costs are standard for almost every franchise opportunity.

Franchise fees: This is the initial cost for the right to own a franchise location.  Most of these fall between $15,000 and $50,000.  The franchise fee will usually cover the cost of support, training and site selection, but in many cases this is just an up-front licensing fee for the right to use the business’ name. Before deciding on a business, find out what is covered by the franchise fee.

Legal fees: Once you decide to buy a franchise, your attorney will help you review the Uniform Franchise Offering Circular (UFOC) and the franchise agreement.  Plan on spending anywhere from $1,000 to $5,000 for an attorney to review these documents.

Build-out costs:  Your franchisor will give you an estimate on the cost of building your franchise, based on the site location you choose.  These fees include furniture, equipment, fixtures and signage.  Home based franchises don’t usually include any build-out costs, but you still may need specific equipment or software in order to get started.

Inventory:  In the case of retail franchising, where you will be selling a specific product, you will need to start out with an initial order of inventory.  Depending on what you will be selling, this initial investment could range from $20,000 to $150,000 or more. 

Working Capital: This is the amount of cash you will need to have available on a day-to-day basis.  Some franchisees only carry a few months worth of working capital, but it is safer to have two or three years worth of funding.  Each business model is different, so your franchisor will give you a general idea of how much cash you should have on hand. 

Miscellaneous supplies:  Every business needs certain supplies in order to do business.  Again, your franchisor will give you an estimate on what is needed.

Searching through a “Franchises for Sale by Owner Directory” is a great way to start gathering knowledge about franchising.  In addition to learning about the potential income you will earn from buying a franchise, you will also find out about financing, industry trends, and how much money you will need to be successful. 

Before you enter the franchise marketplace and start perusing the franchises for sale listings, there are a number of key things to consider.

• Start by assessing yourself to see what kind of franchise will suit you best. 
• Then take a look at the listings in a franchises FSBO directory and draw up a short list of prospects
• Don’t be afraid to ask questions of other franchisees to find out what they like and don’t like about the business.
• After identifying the business model you like best, it is time to do some research.  Find out how strong its financial position is, in comparison to competitors.  Look at performance figures, analyze the past few years of financial statements, and find out how long the typical franchisee takes to become profitable.
• Conduct your own research of your immediate area and identify any competitors, including similar franchises that are expanding rapidly in your county and state. Do not rely on the business research provided by the franchisor.

Last week, I talked about the challenges and potential disadvantages of buying a franchise, and why it is important to consult a Franchises for Sale by Owner directory to learn more about each opportunity.  This week, I want to focus on the positive aspects of franchising.  For many entrepreneurs, buying a franchise was the best decision they ever made.  Franchising allows would-be business owners to get started on a new venture without all the headaches involved in a start-up. 

Here are some of the major advantages of franchising:

Before jumping into the world of franchising, most would-be business owners want to know exactly what they’re getting into.  You may already be perusing the franchises for sale directories, but are you really ready for the challenges of franchising?  I will be covering the benefits of franchise ownership in a separate article, but first let’s examine the challenges.  Many of these challenges may not exist in all franchise systems, but they offer a good starting point for a frank discussion with your potential franchisor. 

More women than ever are starting businesses of their own, but that doesn’t mean they are taking unnecessary risks.  Women are scouring the online directories, looking at “franchises for sale” listings and Franchises for Sale by Owner directories to choose the right business model and franchise system. 

Why are so many women buying franchises?

Do you have dreams of expanding your business, but lack the capital or manpower to do so?  Becoming a franchisor may seem complicated, but with the right resources it can be the safest way to raise capital.  This post explores why you should franchise your business.

Not all entrepreneurs are a good fit for franchising.  While there are many benefits to owning a business that is part of a larger system, there are many factors that can affect whether you are successful or not.  Before you decide on franchising here are some questions to ponder.

So many people’s lives have been turned upside down due to recent upheavals in the job market, a foreclosure, or a business shutting down.  For the people most affected by these changes, it won’t be “business as usual” until everyone gets back on their feet.  Ask anyone who has been through a personal tragedy like this, and they will tell you they’d rather do business with companies who are interested in making a difference and really care about their customers. 

When most people think about starting their own business, it is because they have an original idea that meets a specific need, for which there is a certain level of demand.  While this may sound noble and make perfect sense to the entrepreneur, it doesn’t always make sense to lenders and investors.  Sometimes a bank will want to see a certain amount of business ownership experience before funding a totally new venture.

It is in situations like this that many people start searching for franchises for sale in a Franchises for Sale by Owner Directory, and in this economy, which is not a bad idea.  But franchising isn’t for everyone. 

How does a "Franchises for Sale Directory" work?

It used to be that aspiring franchisees needed to pore through encyclopedia-size catalogs to find the right type of business, but thankfully those days are gone.  Now it is possible to look for franchises for sale online, at the click of a mouse, using a “franchises FSBO directory”.  Just like a “for sale by owner” real estate transaction is designed to save the homeowner the added cost of paying commissions to an agent; franchises FSBO is an online marketplace that allows the business owner to avoid the middleman.

In a tough economy, it is important to start a business that you feel confident about.  But being confident in any new venture requires sound financing.  Before you start looking in the online business directories franchises for sale, consider what questions you should ask the franchisor about financing. 

Today, most franchises are found through a franchises FSBO directory.  If you’ve never been on one of these, you will find it an invaluable tool in your search for a business.  By providing easy access to franchises for sale by owner, you will have easy access to the franchisor.