EXPANDYOUR BUSINESSTHROUGH FRANCHISING

AND GROW

www.BusinessAndFranchiseLaw.com | 800. 976. 4904

BY NATIONAL FRANCHISE LAWYER CHARLES N. INTERNICOLA, ESQ.

HOW TO

IMPORTANT NOTICE

The information contained in this publication is provided for general educational purposes only, should not be relied on as legal advice and does not serve to create an attorney client relationship. In utilizing these materials you acknowledge that there is no attorney client relationship between you and Charles N. Internicola, Esq. and that the information contained in this publication does not and cannot serve as a replacement for the competent legal advice of a licensed attorney. The content of this publication is subject to the Copyright of its author and owner, Charles N. Internicola, Esq.

2014 Charles N. Internicola, Esq.All Rights Reserved. Not to be produced or reprinted without express written permission.

Note:The information contained in this publication is from

National Franchise Lawyer Charles N. Internicolas

ANNUAL FRANCHISOR TELECONFERENCETHE TRICKS AND TREATS OF FRANCHISING YOUR BUSINESS

A complimentary copy of the audio CD is available.

ABOUT THE AUTHOR Charles N. Internicola, Esq. is a franchise lawyer who represents start-up and established franchisors throughout the United States, in all fifty states. Mr. Internicola is the managing member of a small but national franchise company.

Mr. Internicola has developed unique franchise development, franchise compliance and outside counsel services including the 90 Day Franchise Launch Program, an intensive program designed to put franchising within reach for successful business owners who are ready to expand. If you are looking to expand and franchise your successful business, in this publication learn more about Mr. Internicolas Franchise Launch Program. If

you have already established a franchise system but need to make improvements and implement a timely and cost effective compliance program, contact Mr. Internicolas staff at 800. 976. 4904 to discuss Mr. Internicolas franchise programs and services and how we can assist you with the expansion and protection of your business.

Learn More: Visit www.BusinessAndFranchiseLaw.com and www.90DayFranchiseLaunchProgram.com.

CONTENTS

1 INTRODUCTIONBe aware of the many benefits (treats) and potential negatives (tricks) of franchising.

WHAT IS FRANCHISING ALL ABOUT?Franchising is a business expansion model.

IS FRANCHISING A GET RICH QUICK OPPORTUNITY?Why franchising should be all about creating a win-win scenario for you as the franchisor and for your franchisees.

3 QUESTIONS TO DETERMINE IF FRANCHISING IS RIGHT FOR YOUAsk yourself these questions before getting started.

SCALABILITYExpand locally, regionally or nationally.

IS IT DIFFICULT OR EASY TO SELL FRANCHISES?The answer may not be what you think.

THE 4 SECRETS OF FRANCHISING

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GETTING STARTEDTaking action is the critical step.

HOW MUCH WILL IT COST TO FRANCHISE YOUR BUSINESS?A lot depends on your expectations, but no, it should not cost $100,000.

HOW ARE FRANCHISE DEVELOPMENT COMPANIES DIFFERENT FROM FRANCHISE LAWYERS?

Well, ask who is legally accountable to you?

HOW TO FRANCHISE YOUR BUSINESS IN 90 DAYSThe right franchisor can have their FDD and Franchise Agreement

ready for filing within 90 days.

WHAT ARE SYSTEMS?They are the formulation of everything you already know.

WHAT ARE THE CURRENT MARKET CONDTIONS?Are franchise sales increasing in our current economy?

90 DAY FRANCHISE LAUNCH PROGRAMFull details and Our Guarantee. 24

When you are considering franchising your business there is a lot of information and opinions out there. Some right, some wrong and some that is outright irrelevant and confusing. So, when it comes to franchising and, in particular franchising your business, the information that you need to know will relate to whether or not franchising is right for your business, what it will take to franchise your business, how to get started, critical mistakes to avoid and the secrets to franchising. Within that context, today we are going to jointly get to the heart of franchising, what franchising can mean for your business and proven steps that you can take to launch your franchise.

Who These Materials Are ForYou, if your business is successful, you are looking to expand your business and if you have identified or are considering franchising as a potential expansion option. Now, what I do know, and what you should know, is that for the right business and the right entrepreneur franchising is a proven and powerful tool for business expansion. So, if: p You are a business owner; p Your business has been successful; and p You are now looking for an expansion option;

Then franchising may be the answer for you.

HOW TO LAUNCH YOUR BUSINESS FROM LOCAL SUCCESS TO REGIONAL OR NATIONAL FRANCHISEby Franchise Lawyer Charles N. Internicola

Also, franchising may not be the answer and, so, during this conference and in these materials what we will focus on is you and the expansion of your business.

So Why Are These Materials and This Conference So Important?Well, what is important critically important is your business, your decision and your plan for how you expand your business and whether or not franchising is right for you. This decision making process or mindset is important because you are probably at a crossroads in your business, and right now, you may be and probably

are evaluating and making a decision as to what the future of your business will look like. That is, the path that you are going to take, the road you are going to follow.

Now, this isnt to say that you need to change what you are doing, but the fact that you are participating in this conference (or reading these materials) indicates, that, at the very least, you are thinking about expansion and, more likely than not, you are looking for answers and a path to get to the next level: To make your business the exception to the norm and to drive growth, your brand, your sucess and the success of those around you. So, you are very much at a crossroads right now, and you are at least evaluating franchising as one expansion option. The next step will be to make a decision, develop a plan and execute, execute, execute. Doing Nothing and Staying the Course is Very Much a DecisionAlso consider that (and I can say this as a business owner myself, and I will talk more about this) staying the course and not changing what you are doing is very much also making a decision. That is, by doing nothing (whether right or wrong) you are making an active decision to stay the course and stay on the track that you are currently on. What I am here to talk about today is franchising, my experiences as a franchisor, my experiences as a franchise lawyer and a plan that you can adopt to launch your franchise, expand your business and adopt a new path for your business. How Should You Evaluate the Information in these Materials?Well, consider a couple of things. The first thing to consider is that this conference does not present all of the answers. This conference and these materials are just one piece to the puzzle of how to achieve or accelerate your business growth and expansion. So, use this information as a part of your overall decision making process. In terms of evaluating the source of the information, well, as many of you know, and I have had the benefit of speaking to many at this conference, I am a franchise lawyer, and while thats important, it is equally important to know that I am also a franchisor and in many ways have experienced the decision making process that you are now evaluating.

In addition to my franchise law firm I am also a managing member of Thoughts Are Things Franchising, LLC, the franchisor of the ECOMAIDS franchise system. ECOMAIDS is very much in a start up phase and initial growth phase, so I understand what you are considering, your goal of expanding your business and your desire to do more, achieve more, make the business assets that you have built work for you, and in the process, help out others, create a brand that

you are proud of, and, most importantly, to create a business that will serve you, your family, and your future franchisees. Just as a disclaimer, ECOMAIDS is a maid cleaning franchise. I mention this because in my consulting and legal services, we dont accept clients in the maid cleaning industry to avoid a conflict of interest.

...I understand your goals of having a business and wanting to do more, wanting to achieve more, wanting to make the assets

youve built work for you, your family, and down the line your franchisees.

- Charles N. Internicola, Esq.

Franchising has many dimensions. Too often people will discuss franchising in terms of legal issues and regulatory issues and all of these other things (including misconceptions) that you may or may not have to comply with. But as a business person, as business people, we need to look at franchising for what it is - as a business expansion model. Franchising is a business model - a vehicle - to expand your business, to allow others to utilize their investment, their capital and their manpower to take your brand and the business that you have built and to assist you in expansion. And so, what franchising can mean for you is that franchising is an opportunity to monetize what you have already built. To take those business assets and know-how that you have already built and actually earn income from those assets in the form of franchise fees and ongoing royalties.

Now, naturally - as with many things the government regulates

seemingly everything these days, and so franchising is a regulated industry, but I dont want to get bogged down in that during this conference. We need to focus on franchising as an expansion option, as an expansion vehicle. There are regulatory issues, there are legal issues, but I can tell you that with the right plan of action and team of professionals, these issues may be readily satisfied and handled. So set that aside for the moment as regulatory and legal issues (all managable) should not be the

What is Franchising All About?

3 THE INTERNICOLA LAW FIRM, P.C.

The key to franchising is to get started... Start small but

keep moving.

deciding factor as to whether or not you franchise. You can handle the regulatory issues, you can handle the compliance. The real question or questions that you need to be considering relate to your goals, your business, and whether or not franchising is the right expansion vehicle for you. So, as we go through this conference, as you consider franchising, focus on what your business goals are, what your personal goals are and how franchising can help you achieve them. Focus on developing a franchise system and what it will look like to you. Consider that one of the biggest issues that you and many other potential start-up franchisors need to know about (including those of you who are participating in this conference or may be listening to the CD) is that franchising your business is a process. You cannot do everything all at once and over time - even after you launch - your franchise system will continue to evolve, grow and develop. Franchising is readily achievable - it is done every day - but franchise success is all about the right execution and perspective. You are not going to do everything all at once. The real key to franchising is to get started, to build a solid foundation, to launch a small franchise system and then, along the way, to make continuous improvements and then scale up your franchise operations. Like many other things

in business and life, the key is to get started, set a solid foundation, and start with small steps but keep moving. So, franchising is, in its own way, a journey and if you take that first step and you do it with the right perspective and the right plan of action, before you know it you are pretty far along and down the line, and that is when you find that opportunities come about.

Franchising is About LeverageGetting to the benefits of franchising the treats of franchising, one important benefit that I

have mentioned is that franchising allows you to take the assets that you have already built, your tradename, your business reputation, your know-how, the products you

sell, the services you provide, how you deliver the products, how you provide the services, everything that you have built and worked hard for, and franchising allows you to monetize these assets. So, with franchising, your business assets will not only work for you and your business location, but also for your franchisees in what we would hope to become many more locations. You monetize and leverage your business assets and know-how because now not only are they producing revenue and supporting your particular unit, but also for your franchisees. This leverage is one of the big benefits of franchising.

creating aNATIONAL BRAND

THE FRANCHISING BASICS

Franchising is Not a Get Rich SchemeIf your interest in franchising is not driven by a genuine desire to expand your business, then franchising is not right for you. Franchising is some type of get rich quick scheme or opportunity. In every business - including a franchised business - success is not automatic nor quick. If you are interested in franchising because you want to make money fast, I will tell you that you do not have the right mindset and you will be making a mistake. Franchising is a proven expansion option and expansion vehicle, but, like anything else, you need to build it up, you need to work at it, and you need to insure that the franchise system that you create is a win-win scenario for you as the franchisor and for the franchisees who will be placing a significant amount of trust in you. So franchising is not a get rich quick opportunity, and is not a decision to take lightly. Although franchising is something that may be readily achieved, once you are involved, you will be engaged in a development process, and a very rewarding one.

Can franchising help you level the playing field? It can and let me share my perspective on this important point. Well, I have been a franchise lawyer for many years, and in the past few years, I have also had the opportunity to follow my passion and develop a franchise company. I can tell you that, on a personal level, franchising truly is an opportunity to level the playing field. It is an opportunity to take what was or is a small local business and to create a national brand. Throughout the country franchise success happens every day. To be certain, there are also franchise failures, but from my perspective these failures have much more to do with perspective, approach and execution and not the franchise business model. So franchising is a very real opportunity for you, it is something to build around if it is right for you and your business and you work hard at it.

One of the most important things that I have come to know both, in business and in franchising, is that it is not the best idea or franchise concept that necessarily succeeds in the marketplace, but, rather, the business that executes best. So, you probably have a good business, and you probably have good business systems, but whats going to decide your success is whether or not your get started and, once started, how well you execute and continue to execute. You need to keep pushing on a daily basis. Just because you have the best idea or best product means nothing if you dont execute properly. You are not going to survive in the marketplace on good ideas alone and if you dont get started and you fail to launch then, for sure, success will not be possible.

Is franchising right for your business?Now, this brings us to a very big point to discuss. For those of you participating in this conference, reading these materials or listening to the CD, I think it is safe to say you are looking for something more, to expand your business and for many good reasons you are drawn to franchising. Like many others, the question you have and the one that I am asked often is whether or not franchising right for you and your business? I can tell you that there are a ton of a franchise consulting companies, lawyers and others out there that will try to sell you very expensive feasibility studies that really tell you nothing. Feasibility studies are about your business - the one you built and know better than anyone else - they really dont help answer the franchise question of whether or not franchising is right for your business. You should know internally if this is going to be the right step for you, but to help out here are some franchise assessment questions that I think you should be answering and evaluating.

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levels that you have experienced and extrapolate. If a franchisee opens up a franchise location, what do you believe their overall investment will be? What do you believe their cash flow and profits may look like? And now, profitability should be similar to yours, except it will be less since the business of your franchisee will be in a start-up phase, in a new market and will incur higher expenses in the form of royalties to be paid to you. Then evaluate what you believe the income potential of your franchisees will be and compare it to their initial investment. I think that if your business is truly successful, you are going to find that it could be very suitable for franchisee profitablitiy and growth. So, as to the first assessment question of, is your business proven and profitable, some analysis on your part is required. I can tell you that if you opened up your doors two months ago, it is too early to be thinking about franchising and, if you are not profitable, you absolutely should not be considering franchising. Your business needs to generate that cash flow and must be able to do the same for your franchises.

THE FRANCHISING BASICS

Have you developed a brand?

Now keep in mind that we dont need to be too fancy here. A brand is really your business name (your trade name), your logos and the trade dress that may comprise the look and feel of your business. If your business doesnt have any formal trade dress right now, well that is ok as it will or should develop over time as you get more and more involved in developing your franchise system. But if your business is successful, at one level or another, you must have a brand.

Consider that during the franchise development stage you will need to protect your trade name and the identity of your business, and when working with your franchise lawyer, he or she will be evaluating your intellectual property snd will put together a plan of protection. So, do you have a brand? Again, if you have a successful business, I think the answer is going to be yes.

Is your business model proven and profitable?

People use terms like proven and profitable all the time. Well, the questions that you need to answer, include: Does your business have a good reputation? Does your business generate free cash flow that supports your lifestyle and your family? And if it does, then it probably is proven, and certainly and sounds like its profitable. But will it be profitable for franchisees?

How will the profits that you have experienced - the cash flow associated with your business - relate to the income a potential franchisee may earn when operating one of your franchises? Will frachisees possess an opportunity to earn a reasonable return on their franchise investment?

So, when you evaluate your profitability, now take the profit

1 2Franchising Assessment Question

This is a big factor. Even if your business is a tremendous success,

line (or access to a franchisor controlled production source) are very popular and offer great potential.

Now, I will also tell you that complex businesses can be franchised - if they are approached properly and afforded the right resources. Recently, I met with a start up franchisor, a very successful business, a very well known brand and reputation in the restaurant industry with a phenomenal product. One of our concerns was how will franchisees be able to create and replicate the food products themselves? So, initially I viewed the business as complex. It had to do with the type of food - and I expressed some concern about franchisee replication. Well, for this franchisor, our solution was that the franchisor would be developing or using his current facility as a production facility to supply his initial group of franchisees. By doing this from a franchisability standpoint, this soon to be franchisor really moved his potential franchise model from questionable to solidly franchisable and what I think will be a very good franchise system with great growth potential. So, if you have a complex business, consider what your training systems are going to be. Give thought as to how you are going to assist your franchisees in replicating the products that you sell and the services you provide.

7 THE INTERNICOLA LAW FIRM, P.C. THE FRANCHISING BASICS

Franchising will enable you to monetize and lever-age the assets that you have already built and put these assets to work for you through royalties and other franchise revenue streams that will be paid to you. If done correctly, franchising represents a true win-win solution.

3Can your business model be duplicated by franchisees?

if it is overly complex and requires very specialized skill and knowledge, this factor may mitigate against the franchisability of your business. This does not mean it cannot be done, just that additional focus must be placed on franchisee systems and support.

Now, if your business can be duplicated as many are, then it is suitable of franchising. What do I mean by duplication? Well, will your franchisees have access to your sources of supply? Will your franchisees have access to production sources? Will your franchisees, if your business requires on-site production, have the ability to produce and replicate your products? And if your franchise is a service-based business, are you able to train your franchisees so they can replicate the quality of your service? In the economy right now, simple franchises are very popular. So service-based businesses that offer only one or two services and product-based businesses that offer a limited product

8 THE INTERNICOLA LAW FIRM, P.C. SCALABILITY

Franchising is scalable.

One of the greatest benefits of franchising is scalability. A questions that many prospective franchisors consider and ask is whether or not my business is big enough to franchise and what if I dont want to get too large? This question has been raised by many participants in this conference. One individual who asked this question explained to me that they are very profitable, they have been around for a number of years, and while they are interested in franchising, they dont want to expand nationwide. He just wanted to expand within a region. So how does this play into a franchise analysis? Can franchising be local or regional? The answer is, definitely yes. In fact, this scenario (i.e. a successful business owner who wants to expand locally or just regionally) is very good

and very suitable for franchising. When people focus on franchising or when companies are promoting how to franchise your business, the conversation almost always turns to, you could be a national company with hundreds of units, but thats not really what franchising is all about. Sure your franchise growth may very well be national, but always consider that franchising is very scalable, and when I say scalable, what I am referring to is that you should start off with a local market or a regional market, and then once you have established your footprint in that market, evaluate whether or not you want to take the next step into another market, another region, or nationally. There are very successful franchises that are out there - under the radar - because they are small: Six, ten,

twenty, fifty units. For those small franchisors, many are very happy with their system and many of them do not want to expand any further. They have very tight controls on quality, and they are preserving profitability. So consider that franchising is scalable, and you dont need to be big franchise system to be a successful franchise system. Consistent with the scalability standpoint, with franchising, big is not necessarily better. When franchising is done correctly, when you set the right infrastructure, franchising is scalable, and this means that you can create a system that revolves around your products, your services, and your selected markets. It is your choice and your franchise system should be developed accordingly.

...start off with a local...or a regional market, and then once you have established your footprint in that mar-ket, evaluate whether or not you want to take the next step into another market, another region, or nationally.

Another question we hear often is whether or not it is easy or difficult to sell franchises. My answer is that selling franchises is easy, provided that you have the right expectations and that you proceed responsibly. And I will tell you what I am getting at here. When you are considering franchising, you are going to sit down with your franchise lawyer or partners, and one of the questions that you are going to have is, okay, we go through this whole process, but will I be able to sell franchises, and who do I sell them to? And, based on my own experience, what I will tell you is that there is a robust market of individuals who are very much interested in buying a franchise and when you put your franchise offering out there - and there is places to advertise and promote your system - more often than not, you will see significant interest. In fact, many times your initial sales will come about organically and locally based on interest generated in your home market, by customers, suppliers, family and friends. Selling franchises may not be difficult, but you do need to resist the temptation of selling just for the sake of generating initial revenues. Your initial franchisees will be critical to the launch and initial success of your franchise system. You must carefully select the franchisees that you let into your franchise system. Consider the franchisees background, mind-set and working capital. Is the franchisee interested in building a business (a good thing) or is he or she interested in just replacing a job

and working in the business (a bad thing).

Your initial two, three, five, ten franchisees will serve as a critical foundation for the success of your franchise system. Franchisee success is going to be critical to your success, and you need to insure that your franchisees have the same mindset as you, that they have sufficient reserve capital, and they have the right perspective and understanding about the business they are about to purchase, invest in and develop. You need to be willing to reject undercapitalized or unqualified (i.e., those with the wrong mindset) franchisees. You need to tell certian applicants that you will not sell them a franchise, because I will tell you that probably more than three quarters of the people who will want to purchase your franchise are probably not going to be suitable candidates. And so, the answer is, you should not have a difficult time selling franchises but you need to have the right expectations and be extremely cautious.You need to limit your initial growth to a pace that is exremely controlled. If your goal is to sell 25 franchises in the first year, then you have the wrong expectation.

When Developing Your Franchise: One Size Does Not Fit AllFar too many franchise development companies (whether franchise lawyers or claimed franchise development

IS IT EASY ORDIFFICULT

TO SELLFRANCHISES?

9 THE INTERNICOLA LAW FIRM, P.C.

companies) treat franchising like its a one size fits all process. It is not. There are many franchise development companies, lawyers and others out there telling you how easy it is to franchise, However, when things seem too simple and too easy proceed with caution because someone may be trying to stuff your business and future franchise into a generic legal framework that will not work for you and will not assist in the achievement of your long term development goals.

The franchise development process should be all about understanding the strengths and weaknesses of your business, protecting your intellectual property and building a system that works. That is, it allows you to expand and legally protects you.

Now, how do I know this? Well, I know this based on my experiences as both a franchise lawyer and a franchisor myself, I have seen disclosures and franchise agreements that just dont work for franchise companies and I have had countless discussions with franchisors in their second or third year of the sales process that have an FDD and franchise agreement that does not reflect the realities of their business. This eventually proves unworkable or, worse, creates unnecessary exposure and risk.

So, understand that when it comes to the franchise development process, when you are working with your franchise team - your franchise

lawyers - you must be actively involved. You must participate to ensure that the development process reflects your business and how your new franchise system will operate best.

Consider that some of the many, many legal and business aspects of your franchise system can and should be customized toward what will work best for you.

SELLING FRANCHISES

The Four

TO

FRANCHISING YOUR BUSINE

SS

SECRET 1: TAKE ACTIONThis may seem obvious but a major reason some achieve franchise success and others dont comes down to action. That is, as with many things in life, it is not the smartest entrepreneur or the one with the best products or services that succeeds and achieves multi-unit expansion but, rather, the entrepreneur that takes action, adopts a plan and keeps moving forward.

So, in the franchising and multi-unit expansion world, many smart entrepre-neurs fail because they never get started - they never take that first step and they fail to launch.

SECRET 2: THE RIGHT PERSPECTIVEUnderstand that franchise and business success is not a destination but rather a continuous journey. To be a successful franchisor you need to under-stand this perspective and agree with it.

SECRET 3: CONTINUOUS IMPROVEMENT REQUIRED Understand that you cannot do everything at once - a process is required. The key is taking action and then understanding that your must be dedicated to continuously improving and refining your business. What you franchise system will look like today (really 90 days) will be different from what it will be one year, two years and five years later. So, dedication to developing and contin-uously improving your business systems will trump having the best of every-thing right now.

SECRET 4: FRANCHISING IS FLEXIBLE (IT DOES NOT NEED TO BE HUGE) Understand that franchising is flexible and should be customized to your business and your personal goals. This is how we approach the development of your franchise. You control how big or how small you become - becoming a franchisor does not mean you have to become a large company operating in all 50 states. Sustainable and controlled growth is the key to successful franchising.

SECRETS

Franchising Requires a Collaboration Between You and Your Franchise Lawyer. An important point (something you already know) is that growth requires action and if franchising is the vehicle for the development and growth of your business, you (individually) must be actively involved in the development of your franchise system. As a franchise lawyer, I can tell you that I rely very much on the input of our clients and how they respond to our suggestions, the options we make available to them and how they see their future operations. The franchise development process is very much a collaboration, and you need to be actively involved in the process.

One thing we hear often is from many perspective franchisors (business owners like you) is that after having spoken to so many people (lawyers, consultants, etc...) that they have heard so much conflicting advice and are left with more questions than answers. Sometimes all the conflicting information and misinformation about franchising can create paralysis. What I will tell you is that it is critical for you to speak to and work with a professional that you have trust and confidence in and that the person put together a franchise plan.

Developing and expanding your business is an on-going process. It requires constant action. Franchising is a business growth action.

11 THE INTERNICOLA LAW FIRM, P.C. SELLING FRANCHISES

How do you get started with franchising?

Consider that business and franchise sucess is not necessarily awarded to those with the best ideas or business models but rather to those who

focus on execution and slow but continuous improvement.

12 THE INTERNICOLA LAW FIRM, P.C. GETTING STARTED

Getting Startedu Adopt a Franchise Planv Take Actionw Keep Movingx Understand that small steps add up to big results.

What I see many times are exceptional business owners that have the prospects and makings of a really great franchise system but, unfortunately they never get started. They think about franchising, maybe even take some preliminary steps but they fail to follow through or adopt a mindset of not now but next year and when the next year comes... more delay. So, when it comes to franchising, many times I can tell you that the differentiating factor is to adopt a plan, get started and take the small steps that, over time, will amount to big things. For those that fail to launch, I can tell you that, for most, they lose (from a franchise perspective) because they never get to the starting line. Again, it is critical to know that franchise success (as with most things in life) does not require the best ideas. You need good ideas, a good business, and a profitable business, but not the best. Execution and implementation are the most important franchise success factors. Common misconceptions and mindset mistakes that I hear and that I

believe causes many to fail before they even get started include statements like: [Mindset Mistake] Im not

ready to franchise, but maybe

in a year or two.

Well, look. There may be very valid reasons as to why you may not be ready to franchise right now, but these reasons better be valid and should be focused on things like capital, the profitability of your business, and even your own personal goals, but if what is stopping you is procrastination or that you are just too busy, then you are making a mistake...and excuses. When I talk about getting started and how you can get started with the launch of your franchise, I am assuming a

couple of things. That is if franchising is right for you and your goal is to expand your business, then relegating the franchise process to well do it in a year or two is a mistake - a mistake that many make. I can tell you that from my own experience (by the way, I violated the rule I just told you, now looking back, I regret that I didnt start

certain things earlier when it came to my franchise company) that there is no better time than right now to get started.

[Legal Mistake] I dont need to

franchise, I can sell licenses.

Another common misconception I hear often is that, I dont need to franchise my business, I have been told that I can sell licenses or enter into some type of management agreement, and Ill avoid the expenses of franchising. This is a topic really for another conference, and we have a publication on this, but I can tell you this, and I challenge any authority to tell me otherwise, licensing is not an alternative to franchising. There are many people who promote and advertise licensing

as a franchise alternative. I can tell you that this alleged short cut, much more likely than not, will only create legal problems - big ones that we see every day. In fact part of what we do for many is convert licenses into franchise systems. You may share this common misconception or relied on it or you may not. But be aware.

STEP 1GO!

FACT OR FICTION? IT WILL COST $100,000 TO FRANCHISE YOUR BUSINESS.A common misconception is that it should cost you $100,000.00 to franchise your business. Every business is different but if you have the right expectations, the expenses associated with franchising your business should be reasonable and manageable. In the franchise industry, when it comes to franchising we have seen and heard about a broad spectrum of franchising estimates ranging from the impossibly low to in excess of $150,000.00. That is, some are told it will take #100,000 to franchise their business. If you have the right perspective, this is just not the case. (Think $18,000 to $35,000, but read below).

I have spoken to new franchisors who paid $100,000 and more to development companies to have their business franchised and I can tell you it was not the right thing for them (at least the ones that contact me). Naturally, we offer what I believe to be a very significant and affordable solution to the how to franchise my business question. In these materials, you will learn about my 90 Day Franchise Launch Program. Take a look at this program and the benefits and numbers. I can tell you that they are very different from the $100,000+ misconception. You can approach a franchise development process with a very manageable budget. We will talk a little bit more about this program and what it can do for you a little later on in these materials (see pages 17 and 18). So, after you have answered the questions about the franchisability of your business, the ones we discussed earlier (page 6), you need to put together a team. And this doesnt need to be so sophisticated. My advice is to work with a very experienced franchise lawyer, and the reason why you want to work with a franchise lawyer is because they will be accountable to you.

With the right perspective and approach, franchising is well within reach for you and your business. It is. A big misconception that many have or use as an excuse is that franchising is too complex or that it is too difficult to franchise my business. Going back to one of my initial points is that you need to adopt the right perspective where you understand franchising for what it really is: a business model for the expansion and growth of your business.

The Legal Issues Behind Franchising.Now lets deal with the regulatory and legal issues. To gain access to this business expansion model - franchising - it just so happens that franchising is a regulated industry. The franchise development process will require the development and preparation of certain disclosure documents and registrations, but I can tell you that this process, if approached properly, is very manageable and can even work to your advantage. Our legal team - my team - works with clients everyday developing FDDs, franchise systems, solving disclosure issues and working to educate and equip our clients with information and a solid game plan for achieving franchise success. Along the way what you should find is that the franchise laws are actually not that complex when you plan properly and you follow a system.

What you will also find is that you can turn these franchise laws to your advantage. What do I mean by this? Well, you know and I know that in our society there are lawsuits every day, everyone is suing someone over something whether it makes sense of not (pathetic actually). Well, with franchising, the important factor you need to know is that once you comply with the franchise laws, prepare your disclosures, maintain updated disclosures and follow a system, you will be actually creating legal protection for your business because when you compy with the FDD disclosure obligations, it actually becomes more difficult for franchisees to sue you. So if you take the right steps, you can turn those franchise laws into an asset that creates certainly for your business.

Why Franchising Is Achievable For Your Business:

13 THE INTERNICOLA LAW FIRM, P.C.

Franchise Lawyers, Franchise Development Companies... What is the Difference?

GETTING STARTED

FRANCHISE DEVELOPMENT COMPANIES are groups of individuals who offer services

focused on franchising your

business. Generally, they are

not lawyers but they will tell

you that they have lawyers.

The implication being hire us

and you can use our attorneys.

Many try to relegate the legal

aspects of franchising as

some after thought and sell

you on consulting services

like feasibility studies (where

someone tells you about your

industry and whether or not your

business is franchisable) and

marketing studies (about your

business). While there are certian

experienced and professional

development companies, there

are many others that in many

instances portray (wrongly)

themselves as replacements for

a franchise lawyer. Only problem

is that the lawyers of franchise

development companies, in one

way or another, are beholden

to the development company

(as their source of business or

employment) and not to you

directly.

My question for these franchise

development companies is, who

are these lawyers accountable

to? If one, two, three years down

the line there is a problem, can

you call that attorney and are they

accountable to you? Chances

are they will not be accountable

to you and will tell you that all they

did was prepare forms that you

approved. Also something even

more important is that under

these very unclear relationships,

many of the FDDs that I have

reviewed - those prepared

by the franchise developers

lawyers - are extremely generic

and do not create the right

platform for the franchised

business. So I think you need

to find an experienced franchise

lawyer and he or she needs to

be experienced in developing

franchise systems that from both

a legal and business perspective

will work in the real world. Once

you have developed a comfort

level with, your franchise lawyer

you should be speaking to him or

her about your business model,

your goals, where you would like

to see the franchise go, and what

your expectations are. Once that

is discussed and understood, he

or she should provide you with a

proposal and a plan about your

business, and the specific steps

to develop your franchise.

The second step is to put together your management team and start off on a step-by-step process. Now, I will speak to you from a franchisor standpoint. When I use words like management team, your first reaction may be hey, what do you mean by management team? It is just me or just me and my partner. I know that for many of you, you are a small business, you may work with a family member, a partner, maybe some employees, and, so, you dont have some large franchising staff. What I can tell you is that again, here to, franchising is very scalable. As long as you have the right expectations - the right expectation about growth and that you are going to start off focused and disciplined - then it is important to get started. It is important to set the right foundation, and then engage in a step-by-step process, where you sell one or two franchises, and, over time, you build. So, your management team might be you, it might be a family member with you, it may be a trusted employee, and that is okay. A key part of your franchise team (not management) will be your franchise lawyer.

STEP 2YOUR

MANGEMENT TEAM AND A STEP-BY-STEP PROCESS

Speak to your franchise lawyer about your franchise plans and team. Certain franchise lawyers will have a program, a very affordable program, where they will not only be available for you during the development process, but also after you launch. At my firm we have monthly conference calls with our franchisor clients after they launch. We also put our franchisors in touch with each other. So, you need to know that there is a network out there, and I can tell you as a franchisor myself, franchisors do help each other out by sharing experiences and advice.

STEP 3Start Selling

The third step after you get started, put together a franchise plan, set up your management team (even if it is just you) and your franchise development program is complete, is to start selling franchises. During the sales process, you need to remember that starting slow is better than fast, and when you sell a franchise, you need to ensure that you can and will support those franchisees. When I say support, I mean that you will provide them with initial training, be available to answer their questions, provide them with marketing materials, review what they are doing, and ensure that they are taking the right steps. If you do that, and you create one or two successful franchisees, what I can tell you is that you are going to see other growth opportunities, you are going to see demand for your franchise, and along the way, you should be continuously improving and expanding your franchise system as a whole.

1Develop a Franchise Compliance Program and work with an experienced franchise lawyer who has a plan. This stage is critical as the franchise foundation that you set will impact your business for many years to come. This is in contrast to franchise development companies who claim their attorneys work for you.

Your franchise lawyer should review your business model to plan the best approach in developing:

A Franchise Infrastructure and Compliance Program that fits your business,

your goals and your franchise system.

!Avoid the generic. Understand that franchising is flexible and scalable. Take advantage of this opportunity.

3 Steps to Getting Started

15 THE INTERNICOLA LAW FIRM, P.C.

GETTING STARTED

3 Steps to Getting Started

2 Your Management TeamSTART: You

(plus maybe one more person)

+Franchise Lawyer

0 - 2 Years

After 2 Years

Small staff to help support franchisees

Full staff to further help

in operations and franchisee

support.

3Selling FranchisesRemember, franchising is scalable and a continuous process.Start slow, focus on selling to only a select few franchisees.

Over time, you will see growth opportunities.

For this conference, we have included these materials

about our 90 Day Franchise Launch Program. I

can tell you that this program is designed for those

business owners who are ready to take action and

are committed to establishing a franchise system. I

created this program because I gained a very new

perspective once I became a franchisor myself.

Being a franchisor gave me certain insights into

what it takes to be successful.

The 90 Day Franchise Launch Program is

designed for those business owners who

truly have a franchisable business, who

understand what it is going to take, who

want to franchise for the right reasons and

who are prepared to roll up their sleeves,

get started and work hard in achieving

this goal. With this program I can tell you

that in 90 days, your franchise compliance

program will be ready to launch. At the end

of this publication we include more detailed

information about this program and even a no

obligation application to see if you qualify. Take a

look and also visit 90DayFranchiseLaunchProgram.

com. We are extremely selective with this program

and I can tell you we do get applications that we

have to politely reject, because certain individuals are

not suitable for the program. Our 90 Day Launch

Program solves one of the biggest franchise

problems that too many encounter. That is, the

problem of not having a franchise plan and never

getting started.

As we discussed, there are many successful

business owners out there that want to franchise

and really should be franchising, but they never

get started, and this is because of excessive

costs, misinformation about franchising,

and an overly complex understanding of the

development process.

So weve taken care of the excessive cost, and we

have made the program very clear for those that are

ready to work and ready to develop their systems.

Go to www.90DayFranchiseLaunchProgram.com for

even more details and videos about this program.

CHARLES N. INTERNICOLA, ESQ.S

90 Day Franchise Launch ProgramHow You Can Use This Program to Launch Your Own Franchise

Can you franchise your business in 90 days? I can tell you, it can be

done. It is a demanding process, but for the right business owner - with the right expectations and mindset

- it can be successfully done.

3 ILF JANUARY 201417 THE INTERNICOLA LAW FIRM, P.C.

FULL PROGRAM

DETAILS ON PAGE 24

TAKE YOUR BUSINESS FROMLocal Success to

NATIONAL FRANCHISEWhy NOW may be the best time to franchise your business.

Sure, your business is successful and you have thought about franchising. But you havent made the leap. While there may be reasons (including excuses), The Internicola Law Firm has just made it easier for those select entrepreneurs who qualify for the 90 Day Franchise Launch Program.

Visit www.90DayFranchiseLaunchProgram.com for details or contact us at 800. 976. 4904.

FRANCHISE LAUNCH PROGRAM

One of the questions we hear often in terms of franchising and the franchise development process is what are systems and what are we really referring to when we talk about business and franchise systems. Well, what I can tell you is that in franchising, you are going to see the word system very often, and it is an important term.

WHAT ARE SYSTEMS? (AND THE DEVELOPMENT OF YOUR OPERATIONS MANUAL)

19 THE INTERNICOLA LAW FIRM, P.C.

SYSTEMS

What I see from my own franchise

company is that our franchise

systems look different over time.

And when I say different, what I

am referring to is that consistently

over time, we add or, if necessary,

remove another layer to them

in order to improve how we

operate and how each franchisee

should operate. At least right

now, Start writing down your

systems and what you will find

is that, over time, your franchise

operations manual will take

shape. Many times our clients

(with some guidance and sample

table of contents) develop their

operations manual during our

90 day franchise development

process. So start simple, start

basic, and I can tell you that

as time progresses (while your

franchise system is developing) so

will your systems and operations

manual. Franchising is all about

a continuous development and

improvement process.

WHAT ARE SYSTEMS? (AND THE DEVELOPMENT OF YOUR OPERATIONS MANUAL)

Terms like systems, business systems or franchise

systems are used very often and simply refer to how you

operate, manage and market your business. These systems

include the how tos of your marketing, training, and all of

day-to-day operations of your business. Basically, if you have

a successful business you have successful business systems.

When your franchise, you need to educate your franchisees

about these systems and train them in their implementation.

If you prepared a business operations manual, great. If you

have not written down your systems, then like many others,

these systems and know how reside in your head. You created

your system, you made your business successful - you have

systems. During the development process, to create a

franchise, you will need to sit down and get those systems

on paper. You need to write down what franchisees need

to know about establishing their franchise, how to operate

the business, where to obtain product, what employees they

should look for, methods for advertising the business, how

to advertise, and it can be basic. Over time, as you keep

progressing through franchising you will (or at lease should)

constantly refine and improve these systems which when

put all together becomes the operations manual that you will

provide to franchisees. There are steps to this process and it

can be readily achieved.

This question ultimately boils down to whether or not now is a good time to sell franchises. Well, first, every franchise is different. Thats guaranteed. What I can tell you - and I base this on my

own individual experience as a franchisor and I also base this on speaking to other franchisors - is that even during tough economic times, many franchisors are seeing strong demand for their franchise.

Although this may sound counter intuitive it does make sense. In challenging economic times there are individuals, very competent individuals, who now are faced with either corporate downsizing, a lost job or corporate dissatisfaction, and many of these individuals have adequate capital and savings, and they are looking for opportunities to build a business for themselves. Many consider and prefer a franchised business.

Also, what I can tell you is that even in tough economies, there are always going to be businesses that thrive, and that really gets to execution. Someone

What are the Current Market Conditions for Selling Franchises?A question that comes up often and many times is premised on thefact that the economy is challenging right now.

will be expanding and succeeding - will it be you? Your franchisees? Well, the answer all depends on the action that you take and your execution.

YOUR ROLE AND THE ROLE OF YOUR FRANCHISE LAWYER: How Much Money Should You Set Aside to Franchise Your Business?

Another question that many in this conference asked relates to how much money do you have to set aside to franchise your business. This is a very good question, and it is a very difficult question for me to answer without knowing the business your work efforts, your plans and how realistic you are being. But I am going to be direct and give you some specific answers. First, let me give you some context.

First consider that there are two stages that you need to plan and budget for. The first stage is the franchise development process. The franchise development process is when you are going to be working with your franchise lawyer to establish a franchise plan and the framework for your franchise system. That means your

Advantages to Franchising

Franchising is a vehicle for the expansion of your business.

Franchised growth is funded by third-party / franchisee capital.

TODAYS MARKET21 THE INTERNICOLA LAW FIRM, P.C.

51 2

franchise lawyer - once a plan is set - will be preparing your FDD, your franchise agreement, and your FDD registration applications. Now, during this development process you must play an active role with your lawyer and, in fact, we insist on it. In our franchise launch program while we are working on our clients compliance program (i.e., FDD, franchise agreements, etc...) we ask our clients to work on their operations manual. What does this manual consist of? Well, as we discussed earlier, your systems, your story and what your business is about. For those who need assistance on this front we have programs available. However, since no one knows your business better than you, while we are developing your franchise system, we frequently ask our clients to work on their operations manuals. For those that look to outsource the operations manual development process, you need to know that the fee structures charged by third-party operations manual developers range anywhere from $10,000 to $35,000, and weve seen it go as high as $50,000. If you look at our 90 Day Franchise

TODAYS MARKET

Franchising solves the man-agement dilemma. Fran-

chised locations are managed by franchisees.

Frachising leverages the business assets that you have

already built.

Franchising creates recurring revenues: Franchise fees and

royalties.

Launch Program, and again, that opportunity is not available for everyone, you will find a complete and customized franchise program that will take you through the FDD development process for well under $30,000 (contact my staff at 800. 976. 4904 to learn about our set fixed fee). In fact, under the 90 Day Franchise Launch Program, for certain qualified candidates - those that meet certain criteria that we have established (including a solid trademark and the ability to prepare your operations manual) the fee structure may be a lot less. We also insist that in most cases our clients not outsource their operations manuals.

After the franchise development stage, next is where you are now a franchisor and authorized to sell franchises. During this stage the steps that you will take and the expenses that you will incur will depend on the goals you set, the number of franchises you work toward selling and the number of franchises that you actually sell. So, what will influence your franchise budget after you launch your franchise? Well the biggest factor depends on and is

determined by how aggressive you are going to be in the sales process. Are you spending money to advertise the sale of franchises? How many franchises are you selling? And do you need administrative staff to support your new franchisees?

So, lets assume that during the first year of the franchise sales process, you are very conservative, you sell two or three franchises, you dont focus too heavily on marketing, and you focus more on providing your new franchisees with support and training. Well, in that case, your budget should be focused on how much you may or may not need in staffing to assist those franchisees. I will tell you that during that first 12 month period following launch, you probably need at least $50,000.00. But what we see is that since many of our start-up franchisor clients are indeed business owners focused on systems, they very much take a hands on approach with franchisee assistance. So, the goals that you set and the personal effort that you put in will significantly influence your cost structure.

3 4 5

23 THE INTERNICOLA LAW FIRM, P.C.

FINAL NOTEAs we conclude this conference, I thank all of you for participating. For those reading these materials, I hope

you find them helpful. Over the past year many of you have been in communication with me and have been

kind enough to share your experiences with me and your absolute desire to expand and improve your businesses.

So, thanks and on a personal level, I would like to share with you that I have found franchising to be very

rewarding for myself, my business and my family. If you have questions, even including questions about my

experiences as a franchisor, please feel free to contact me. Many people have helped us, and we would be glad to

help you out. I hope you have a good day. Good luck.

Well, first you need to consider the many points that we have discussed in this conference and depending on factors

such as the profitability of your business and whether or not your business may be replicated by franchisees, the next

step is to make a decision and to understand that if you do have the right plan in place, you can go down this road, and

that franchising is very manageable scalable and achievable. It is also very rewarding. Also, know that like everything

else that is worthwhile, this process requires some work. You need to put in effort and you need to be achively involved

in a collaboration with whatever franchise team you are working with. Most important, you need to take action.

WHAT DO YOU NEED TO DO NOW TO GET STARTED?You need to make an important decision.

LEARN MORE ABOUT THE 90 DAY FRANCHISE LAUNCH PROGRAM

90 DAY FRANCHISE LAUNCH PROGRAM DETAILS

SPECIALIZED FRANCHISE LAW SERVICES

The core components to the franchise compliance program that we provide to our 90 Day Franchise Launch Program clients, relate to:

p The establishment and preparation of the Franchise Disclosure Document (FDD), Multi-State FDD Exhibits and FDD Registration Services (will be ready for filing in 90 days);

p Detailed consultations and services that are designed to result in the launch of a franchise system that is built on a solid foundation in terms of your FDD compliance program and corporate organization; and

p Post-launch consultations.

Franchise Assessment and Planning Sessions

Comprised of planning sessions with Mr. Internicola, Esq., these sessions are on-going throughout the development process and relate to a broad range of franchise development issues, including:

Corporate structures for your franchisor operations; Consultations with your accountants for the purpose of planning and organizing the required financial statements to be included in your FDD; Identifying the right protected territory for your business; Determining the right franchise fee; and Determining the right royalty rate.

Development and Preparation of Multi-State FDD, Franchise Agreement and Exhibits

Critical to your franchise system will be the preparation of the Franchise Disclosure Document (FDD), Franchise Agreement and FDD Exhibits. The FDD and Franchise Agreement will be specific to your business and, among many other things, feature:

p Multi-State Disclosures - The FDD and Franchise Agreement will be prepared as a multi-state disclosure. That is, the FDD and franchise agreement shall meet the requirements for all franchise registration states. As a multi-state FDD and Franchise agreement we will prepare state specific addendums and disclosures to ensure that, at franchise launch, your FDD and franchise agreement may be registered in each applicable registration state.

p State Specific Franchise Agreement Addendums Each franchise registration state requires mandated statutory franchise agreement modifications. Your franchise agreement shall be prepared as a multi-state agreement and shall include state specific franchise agreement addendums.

*

*

*

Basically, you

will be ready to

sell franchises.

1. Does your business possess a trademark registered with the United States Patent and Trademark Office?

2. Has your business been in operation for more than one year?

3. Is your business profitable, i.e., produces positive cash flow after paying all expenses?

4. Can the business be profitable for franchisees - even if, for example, they pay a royalty of 6% of gross sales to you?

5. Do you have systems (i.e., to market your business, produce product or provide services) that can be taught to and duplicated by franchisees?

Yes No Not Sure

Yes No

Yes No

Yes No

DO YOU WANT TO FRANCHISE YOUR BUSINESS? Answer These Questions

6. What are your business goals for the next year? (Most important question of all)

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

Learn More: If you have participated in the conference or have read these materials and you would like to learn more about franchising your business, we would be glad to hear from you. Just be prepared to discuss

these 6 questions. To schedule a complimentary call with Mr. Internicola, Esq., contact his staff at 800. 976. 4904. Please mention these materials when calling. Also, visit www.90DayFranchiseLaunchProgram.com.

Yes No

Reviews& Ratings

Comments: I have been working with Charles and Brian for my Franchise business (Area Devel-oper...) and they are simply the best, easy to work with, knowledgeable, professional, responsive and expert in their field. It is like working with a family member. Even though when I wanted to have a long-term contract with them and, for sure, I will not hesitate to have one when I need, they were honest to let me know that, for now, I did not need one and saved my money...I am glad that I found Charles and his team and it has been absolutely wonderful working with them...

Read more client reviews at www.BusinessAndFranchiseLaw.com

RECOGNIZED BY:

Client Rating - as published by Avvo:

5 out of 5 stars

THE INTERNICOLA LAW FIRM, P.C.National Business and Franchise Lawyers

www.BusinessAndFranchiseLaw.com

www.90DayFranchiseLaunchProgram.com

800. 976. 4904

EXPAND

YOUR BUSINESSTHROUGH FRANCHISING

AND GROW

BY NATIONAL FRANCHISE LAWYER CHARLES N. INTERNICOLA, ESQ.

HOW TO