find and fund a franchise tes
DESCRIPTION
Information on how to find and fund a franchise business with help from third party coachesTRANSCRIPT
FRANCHISES – WHY? WHAT? HOW?
• Growing need to diversify whole portfolio– More control over career destiny in uncertain times– Offset reduced income and benefits– Increase retirement savings– Build wealth & equity
• Franchises as one of many options • Franchise landscape• What we do• How we do it
80+ INDUSTRY SECTORS A
Accounting/Tax Services Advertising/Direct Mail Automotive Products & Services
B Beverages – Coffee / Juices
Beauty Care & ServicesBusiness Services Business/Management Consulting
CCell Phone Provider (Kiosk)
Check Cashing/Financials Services Children’s Services (Education, Nannies)Clothing & Shoes Convenience Stores Computer/Electronics/Internet Services Construction – Materials, Services and Remodeling Cosmetics
D Disaster / Cleanup Services Dry Cleaning
Distribution and Vending – DVD, Ice Cream, Beverages Drug TestingDivorce Resolution Services
E Educational Products & Services
Elderly Care ServicesEmployment Services Environmental Services Equipment – Commercial Cleaning
F Financial Services Fitness Florist Shops Food - Baked Goods/Donuts/Pastries Food – Candy/Popcorn/Snacks Food – Coffee / Smoothie BarFood – Deli/Sandwiches/Subs/Wraps Food – Ice Cream / Yogurt Food – Pizza Food – Restaurants Food – Specialty Franchise Consulting
H Hair SalonsHealth Care & Personal Care Services Home FurnishingsHome Inspection Home Restoration / MitigationHotels/Motels
J Janitorial & Commercial Cleaning Services Jewelry
KKids LLawn ServicesLeasing- Equipment
M Maid & Residential Cleaning Services Management & Training Massage Center
P Package Preparation/Shipping/Mail Services Painting Services Payroll Services Pet Services PhotographyPhoto/Video/Document to DigitalPre-employment Screening Services Pressure Washing & Restoration Printing/Copying Services Publications
RReal Estate & Services Recreation – Equipment & Supplies Recreation – Exercise & Sports Retail Stores – Women
S Security Systems & Services Senior Care/Adult Care Skin Care SpasSports & Services Solar Installation
T Tanning CentersTelecommunication Services Tools & Hardware Transportation Services Travel Agents & ServicesTutoring Services
W Weight Control
FRANCHISE DIFFERENTIATORS
Proven, tested business models Already successful, faster ramp up time Shared Branding, marketing, PR Systemized business operations, Training Transfer of knowledge and best practices:
between franchisor and franchisees from franchisee to franchisee
Team approach to running a business
FRANCHISES: PROVEN MODELS
WHY INDEPENDENTS FAIL
Fatal assumption #1: Doing what you know, love and enjoy will bring success.
Fatal assumption #2: By working hard in the business I will be successful
Fatal problem: By working ‘IN’ the business instead of ‘ON’ the business
you in essence buy yourself a job you run out of the time & energy needed to do the most
important work of an owner, namely marketing, promoting and managing the business. (E-Myth, Michael Gerber)
5 MODELS – WHICH IS RIGHT FOR YOU?
Passive Income – work from home part time DVD Rentals, Vending Machines
Absentee Owner – Home office, part time Business Services
Semi Absentee Owner – Home office, 5-25 hours/wk B2B business services, small retail
Owner & Owner Operated – Small office, retail, warehouse B2B products, services B2C retail build out, mall, strip mall
Master Franchisor – Regional or Area Developer Recruit & mentor – Build Equity quickly Sizes
Single Unit, Multi Unit (3 pack) Area Developer (5-10 units) Master Developer or Regional Developer (10-30 units)
HOW MUCH WILL IT REALLY COST?
Franchise Fee – in the range of $25k - $50k One time payment to join the franchise, renewal fees Some will finance part of the fee; Veteran discounts Primarily to cover recruitment costs
Royalties - 4-8% of Gross Income Paid monthly, some paid weekly or bi weekly Invested in R&D to improve products, services, systems Marketing & co-op advertising sometimes separate 1-2%
Working Capital – 3-12 months liquid $25-150k Lease, equipment, retail store build out etc $50-$500k
HOW WILL I PAY FOR IT?!
Franchise Fee Checking, Savings, Home Equity
Royalties Operating income
Working Capital Stock, Bonds, Mutual Funds Family, Friends, Angels Home Equity loan or line, other equity 401k/IRA Rollover into new business without penalty or tax
Lease, equipment, retail store build out Third party financing typically - Franchisor sometime SBA Loan, Secured or unsecured loans depending on credit score
HOW MUCH CAN I MAKE?
It all depends… How much you invest in time and effort How successful you are at following the system How many locations you open How long you are in business Your overall financial & tax situation
Other considerations Tax implications Depreciation, equipment, buildings Building equity over time Exit strategies available
Stephen D’AndreaSelf Employment CoachPhone: + 650-949-2077Email: [email protected] Website: www.EsourceCoach.com/sdandrea
QUESTIONS?