Franchise Futures Course Presentation

1. How to Find the Right Franchise for You
Jerry Pollio
1800.866.826.0103

2. What is Franchising and Is It for Me?
• Most people associate the word “franchise” with fast food restaurants. But there
are many more types of franchise businesses, including everything from
advertising to automobile repair, printing services to adult care and many more.
• Franchising is a network of interdependent business relationships that allows a
number of people to share:
• A brand identification
• A successful method of doing business
• A proven marketing and distribution system
In short, franchising is a strategic alliance between groups of people who have specific
relationships and responsibilities with a common goal to dominate markets, i.e., to
get and keep more customers than their competitors. Franchising requires the
same attributes needed to run any successful business, leadership, passion and
willingness to do whatever it takes to succeed!

3. Franchise Statistics
• Franchise businesses account for nearly 50% of all retail sales in the United States.
• There are an estimated 5,000 franchise companies operating in the U.S. doing
business through nearly 500,000 retail outlets.
• A 2009 study by the United States Chamber of Commerce found that 86% of
franchises opened within the last five years were still under the same ownership
and 97% of them were still open for business.

4. Franchise Statistics
• A U.S. Department of Commerce study conducted from 1971 to 2007 showed that
during that time less than 5% franchise business were closed each year.
• Total sales by franchised business are projected to reach $1.7 trillion, this year.
• 1 out of every 12 business is a franchised business.
• In 2008, the median gross annual income, before taxes, of franchises was in the
$75,000 to $124,000 range, with over 30% of franchisees earning over $150,000
per year.
• 90% of franchise businesses are still operating after 10 years, whereas, 82% of
independent businesses have failed according to the U.S. Dept., of Commerce.

5. Legal Factors to be Considered a
Franchise
Franchising is defined by state and federal laws as a commercial relationship in which
three factors are present:
1. A licensed trademark
2. A prescribed marketing plan
3. The payment of a franchise fee for the right to participate in the program.
When these three factors exist, the relationship is regulated as a franchise by state
and federal laws.
A “Business Opportunity” is similar to a franchise without the restrictions and
royalties. This can be an advantage with SOME industries. Brand recognition
would not be a factor.

6. Advantages of Buying a Franchise
In Business for yourself, not by yourself!
• Lower Risks with predictable results
• Established product or service
• Experience of Franchisor (learning curve is diminished)
• Group purchasing power
• Name recognition with national leverage
• Efficiency of operation
• Management Assistance
• Business Plan
• Start-up Assistance
• Assistance in Franchising
• Proven System of Operation
• 70% of Americans prefer to Buy Veteran(www.buyveteran.com)

7. Disadvantages of Buying a Franchise
• Payment of Franchise Fee: “or advantage?”…best rate for business consultant
• On-going Royalty: “or advantage?”… paid by customer
• Conformity to Standard Operating Procedures
• Inability to make changes readily
• Underfinanced, inexperienced, weak franchisor
• Duration of relationship
• Dependent upon franchisor’s success

8. The E-Myth Revisited
by Michael Gerber
• The Turn Key Revolution
Right to a Business System
The real “product” is the sales technique rather than what you sell
• Development Processes of a Business
Strategic Objective
Organizational Strategy
Management Strategy
People Strategy
Marketing Strategy
Here’s a link to a pdf summary on the book: E-Myth Revised

9. Who Am I
• A Franchise Advisor is simply a “matchmaker”. I am licensed with one of the
nations most respected franchise advisory firms in the nation with more than 25
years of franchise expertise, resources and industry partnerships.
• I take your goals and match them to companies that should meet those goals.
(This may mean identifying what your goals and objectives are.)
• I reduce your time and aggravation researching franchises….how do you pick?!!
• I am objective and unbiased with no sales rhetoric.
• I work with over 250 companies that have been screened, analyzed, and reviewed.
• My services are paid by the franchise community and at no cost to you! I find the
right business for you and you purchase that business, the company pays the
SAME if you work directly with them or with me.
• I can also help you locate funding options that can save you thousands of dollars.

10. Business Model versus Business Name
• How many employees do you want?
• How many days and hours do you want to be “open”
• What are your income goals…. Needs?
• Do you want a home based business, traditional retail, or mobile products &
services?
• Are your assets covering the full start up costs or do you want funding?
• Do you want one location or many?
• Do you want ownership to be hands on, passive, part time, full time?
• What are your “must haves” in your business?
• What do you feel are your primary strengths and weaknesses?

11. The Right Fit
• Same Company with “like” locations….. How does one have better results than
others?
• The “Natural” choice for you? How to find it.
• The risk factor = the research factor. How do you get the information you need to
make a smart franchise decision?
• Plan with your “end game “ in mind. Realize that in your ramp up phrase money
will be tight so planning and being prepared is critical.
• Bottom Line, a franchise purchase is a life changing event when done right it will
bring you years of security for you and your family. Done wrong it could ruin your
life!

12. Financial Foundation
Can you afford a franchise?
– Research process …. Know what you can afford and what your willing to invest
before you start looking
Is financing available:
– Credit Score? www.creditchecktotal.com. Cost $1.00 no hard inquiry
– Use the Franchisor or Consultant referrals
– Talk to your Banker
Finance Options?
– SBA Loans + Vet programs “Patriot Program”
– 401K conversions with no penalty or distribution

13. Franchise Types
Single Unit Franchise
Multiple Units
Area Developer
Master Franchise
Some franchise systems will only offer single units while others only area developers
opportunities.

14. Franchise Categories
• Account / Tax Services • Florist Shops • Pest Control Services
• Advertising / Direct Mail • Food/Restaurants • Pet Sales/ Supplies & Svcs.
• Auto & Truck Rentals • Golf Eqt, Prod & Svcs • Photography
• Automotive Prod. & Svcs. • Greeting Cards • Printing / Copying Svcs.
• Batteries – Retail & Comm. • Hair Salons & Services • Real Estate Services
• Beverages: Special • Health Aids & Services • Recreations Svcs.
• Business Consultants • Home Furnishings • Rental Eqt & Supplies
• Business / Mgmt Consultants • Home Inspection • Retail Stores
• Campgrounds • Hotels and Motels • Security Systems
• Check Cashing / Fin’l Svcs. • Insurance • Senior Care
• Children’s Services • Janitorial Services • Sing Products & Services
• Clothing and Shoes • Jewelry • Tanning Centers
• Computer / Electronics / Internet • Laundry & Dry cleaning • Telecommunication Svcs.
• Construction Mat’ls & Svcs. • Lawn / Garden / Agriculture • Transportation Services
• Consumer Buying Svcs • Maid & personal Services • Travel Agents
• Convenience Stores • Maintenance • Vitamin & Mineral Stores
• Cosmetics • Marine Services • Weight Control
• Dating Services • Optical Aids & Services
• Drug Stores • Packaging / Ship / Mail Svcs.
• Educational Prod & Svcs. • Painting Services
• Employment Svcs. • Paralegal Services
• Finess • Payroll Services

15. Partial Franchise List
• Maaco • Budget Blinds
• Alphagraphics • Nationwide Floor & Window
• Closet & Storage Concepts • A-Pro Home Inspections
• Kitchen Tune-Up • Fantastic Sam's
• Tutoring Club • Planet Beach
• It’s A Grind • Closet Taylors
• Action Coach • 1-800-Dry-Clean
• Express Personnel Services • Molly Maid
• Global Recruiters Network • Doc Popcorn
• Carvel Ice Cream • Crestcom
• W.G. Grinders • The Alternative Board
• Great Wraps • Aussie Pet Mobile
• Maui Wowi • Handyman Matters
• FastSigns • Homecare Alliance
• Wild Birds of America

16. Established versus Newer Franchises
Established Franchises:
1. Name Recognition
2. More regional and national advertising
3. More costly to get in
4. More refined training and support
Newer Franchises:
1. Cutting Edge Concepts
2. More affordable
3. Lower cost
4. More flexibility
5. Opportunity for emerging companies

17. Process in becoming a Franchisee
1. Analyze Lifestyle Needs 15. Obtain Real Estate
2. Analyze Business Goals 16. Franchise Initial Training
3. Analyze current financial position and future 17. Complete Construction
goals 18. In Store Training
4. Help determine type of business 19. Open for business
5. Obtain confidential questionnaire 20. On-Going support
6. Research applicable Franchises
7. Obtain Franchise Packet & FDD
8. Return Receipt of FDD
9. Speak in-depth with Franchise
10. Interview existing Franchisees
11. Second interview with Franchise
12. Consult with Attorney & Accountant
13. Visit Franchise Headquarters
14. Enter into A Franchise Agreement

18. Pre-Sale Disclosure – FDD
Franchise Disclosure Document
1. Description of the franchisor, predecessors and 16. Restrictions on sale of goods and services
affiliates 17. Renewal, termination, transfer and dispute
2. Identity and business experience of officers and resolution of the franchise
directors 18. Endorsements by public figures
3. Litigation history 19. Earnings claims
4. Bankruptcy history 20. Names, addresses, and telephone numbers of
5. Initial franchise fee current and former franchises
6. Additional costs and fees 21. Financial statements
7. Initial investment 22. Contracts and agreements
8. Restrictions on sources of products & services 23. Receipt
9. Franchisee’s obligations Exhibits
10. Financing arrangements for franchisees • Franchise Agreement
11. Franchisor’s obligations • Equipment Lease
12. Territorial Protection • Premise Lease
13. Trademarks, service marks and trade names • Loan Agreement
14. Patents, copyrights & proprietary information • Others
15. Franchise requirement to operate the business

19. Validation Process
• Questions…..ask…ask….ask!!! You are the one that validates!
• The goal is to know what to expect the day you open the doors!
• Every franchisor is different with how they help you through the process…. One is
NOT better than the other. You are the one to validate.
• Very Important! These successful owners may one day be your business partners
so treat them with care and respect as you speak with them. Remember at one
time, they too where validating the business just like you!

20. Questions to ask the Franchisee
• How long are you in business?
• Would you do it again?
• How is corporate support?
• Are your earnings meeting your expectations?
• What is your biggest challenge?
• How long do you plan to stay in this business?
• What do you wish you would have known when you started?
• What is the best thing about this company? What would you like to change if
anything?

21. Questions to ask the Franchisor
• What training will I have?
• What short term and long term support is available?
• Are there any national accounts? Will I have an opportunity with those accounts in
my territory?
• How many income streams?
• Do you help with projections?
• What is expected COGS?
• Have there been failures with franchisees? Why?
• What is success rate of franchisees?
• How are you different than other “like” companies?
• Give me your success and failure profile in your system.

22. Case Study #1
• Home Based Business Model

23. Case Study #2
• Retail Business Model

24. Case Study #3
• Retail Food Business Model

25. Case Study #4
• Business to Business Model (B-2-B)

26. The Future of Franchising
You are in the right place at the right time.
• People are disenchanted with corporate jobs, because of the dot.com failures and
the corporate scandals.
• 20-34 year olds are going into business for themselves three times as frequently as
35-55 year olds, many looking at franchising.
• The “Baby Boomers” are retiring from their jobs, but are too young to truly retire.
• Women are going into business twice the rate of men, and many looking at
franchising.
• Minorities – another fast growing group going into franchising
• Veterans and military personnel are disciplined, focused and well trained with
transferable skills that execute well in a successful business system. Many
transition and or explore their options for when they will retire from the military.

27. Frantrepreneur
(fran*tre*pre*neur) n.
A cross between a traditional entrepreneur
and a modern franchise owner. One
possessing the desire to be a business owner
without the desire to recreated the wheel.
The ability to follow a proven system for the
benefit of personal and professional goals.

28. Franchise Phrases
“Be in business for yourself, but not by yourself”.
“ Learn from the success and failure of others.”
“Franchising is a process of bottling success and giving it to other people for use in
developing their own successful business.”
“Why would you spend years and the investment required to establish a successful
brand when you could buy a franchise which would give you immediate access to a
successful business system and a brand name which others already have made
successful?”
“Why work for someone else when you can work for yourself and reap the rewards of
your efforts?”

29. Remember…..
A dream is just a dream.
A goal is a dream with a plan and a
deadline!
From Dr. King:
Many men die at 22-23 years old but
are buried at 60-70!