by Larry Reed | Jan 1, 2024 | Uncategorized
Many entrepreneurs will start their franchising career with a single unit, but it isn’t uncommon for them to move onto multi-unit franchising once they’ve gained their footing. While multi-unit franchising may not be for everyone, it comes with many benefits for those who choose to explore it.
This blog will discuss three benefits of multi-unit franchising, including the potential for increased revenue, the ability to reduce costs by sharing resources and faster growth.
Potential for Increased Revenue
One of the benefits of multi-unit franchising is the potential to increase revenue. When a franchisee operates multiple units, the owner is part of multiple markets, which increases the number of potential customers who can be reached. With multiple units, it is easier to strengthen brand reputation and drive higher sales.
The ultimate goal is to create loyalty among customers by being consistent and reliable. These trusted customers will regularly use the services provided by the franchise, but they will also help to spread the word about the franchise itself! This can lead to an increase in revenue as it will bring in more customers.
Reduced Costs From Sharing Resources
Managing costs is a vital part of owning a business. One of the many benefits of being a multi-unit franchisee is that you can spend less money when dealing with suppliers. Because you manage more than one unit, you can buy your supplies in bulk, and there will often be discounts made available to you.
The sharing of resources goes beyond supplies. When you are a multi-unit owner, you can share marketing, advertising and training expenses across multiple units. Sharing your resources in this way will allow you to reduce costs and increase efficiency. This can help you when it comes to competing in the market.
Potential for Faster Growth
Another benefit of multi-unit franchising is the potential for faster growth. With the ability to operate in multiple markets, multi-unit franchisees can grow their footprint faster than single-unit owners. Once they have established a proven business model at one unit, they can use that to achieve similar levels of success across all their units.
The growth will boost the franchisee’s reputation as well as increase the brand’s presence in the areas where it is located. However, this success depends on the dedication of hard-working teams fulfilling their duties across each unit.
If you are ready to begin your career as a franchisee, get in touch today to get started with a free consultation.
by Larry Reed | Nov 15, 2023 | Uncategorized
Learning the terminology used in the franchising industry is important for franchisees, especially those who are entering the industry for the first time. Understanding what certain terms mean, how they affect you, and the differences and similarities between them can make your job easier.
Not sure where to even begin? This blog will discuss and define some of the common and important terms you should know when it comes to being a franchise owner!
Franchisors & Franchisees
The relationship between a franchisor and a franchisee is one of the most important in the franchising industry. And while the names are similar, the two positions have different responsibilities.
Franchisors, which are often big brands or businesses, allow franchisees to run one of their businesses under its name and business model. The franchisor may also provide a franchisee help with marketing, training and guidance when it comes to business practices.
The franchisee is responsible for taking that assistance to help grow the name and reputation of the brand. This is done by following the brand’s business model and adhering to its guidelines.
Franchise Fees & Royalty Fees
Learning about the different fees a franchisee must pay can be overwhelming. The most common fees you’ll encounter are franchise fees and royalty fees.
A franchise fee is a one-time fee that essentially opens the door for the franchisee. This fee is paid to the franchisor by the franchisee, and it can cover training costs, equipment and the right to use the brand’s name.
Royalty fees are ongoing payments, and the amount that is paid is often determined by a franchisee’s sales. These fees are also paid to the franchisor, either on a monthly or quarterly basis, and they cover the continuous use of branding, marketing and much more.
Franchise Disclosure Document
A Franchise Disclosure Document (FDD) is a legal document that franchisors are required to give potential franchisees. This document provides franchisees with everything they need to know. Among the information covered in the FDD is the franchisor’s history, how much is required for the initial investment and information about fees you’ll need to pay.
It will also cover information about financing arrangements and the franchisor’s financial statements, among other things. The point of this document is to help you make an informed decision when selecting a franchise.
Ready to start your franchising adventure? Get in touch today to learn how I can help you.
by Larry Reed | Oct 15, 2023 | Uncategorized
Owning a franchise comes with challenges, and there is one you will need to figure out before putting pen to paper. How you’ll afford your franchise is something you need to take into consideration when choosing the franchise you want to own. Obtaining financing help is common in franchising.
This blog will discuss the common financing options available to franchise owners: SBA loans, franchisor financing and bank loans.
SBA Loans
Small Business Administration (SBA) loans are one of the most popular forms of financing for franchisees. To provide these loans to franchisees, the SBA works with different lenders to fund the loans.
You will need a detailed business plan and to have your credit history assessed before obtaining one of these loans. Part of what makes these loans so popular is that the SBA guarantees a portion of the loan, which means that lenders are taking fewer risks and are more willing to offer loans of varying amounts with longer repayment times and lower interest rates.
SBA 7(A) is the most popular type of loan and allows you to take up to $5 million. The CDC/504 loan allows up to $5.5 million dollars and is often used for equipment and real estate. The smallest loan is the SBA Microloan, which allows borrowers to take up to $50,000.
Franchisor Financing
Another form of financial assistance is financing through your franchisor. This can come in the form of help with the franchise fee or help with purchasing any of the necessities needed to operate your franchise.
It is important to know that each franchisor will have individualized financing terms. This includes the amount offered and repayment times. The success of your franchise is important to your franchisor, so they will be more than happy to help you with getting started!
Bank Loans
One of the most common types of loan is a bank loan. These loans are given to small business owners to help them fund their goals. Similar to other types of loans, to secure a bank loan you will need a detailed business plan and to have your credit history assessed.
When taking a loan from a bank, remember that each bank offers its own repayment terms and interest rates.
If you are ready to start your career as a franchisee, get in touch today to get started with a free consultation.
by Larry Reed | Oct 1, 2023 | Uncategorized
Purchasing a franchise is a life-changing decision for a franchise owner. But before going out and purchasing a franchise, some factors need to be taken into consideration to help you pick the franchise that is the right fit.
This blog will discuss how your business goals, financial readiness and other franchisees play a role in helping you select a franchise. It will also discuss how the different franchising industries can impact your decision-making process.
Goals
When considering purchasing a franchise, one of the first things you should do is figure out your business goals. You will want to match yourself with a franchise that has similar goals to your own.
These goals could be as simple as making a certain amount of revenue in your first year or as complex as expanding to multiple units over the next five years. When speaking with franchisors, do not be afraid to ask questions about their goals. It will help you determine how focused they are on the brand’s growth and success.
Finances
Maybe the most important aspect to consider is your financial readiness. You need to think about what it takes to own a franchise. That includes the initial investment, ongoing fees, and any equipment and operational costs that need to be covered.
You will want to align with a franchise that is within your budget range to avoid financial problems. Should you need it, many franchises offer help with funding to get your franchise started.
Franchisees
If you have narrowed down your list of possible franchises, try to connect with franchisees of those brands to learn about how they operate, the experiences they’ve had with their franchisors and their brand’s track record over the last few years.
This can be helpful information that can inform your final decision. These experienced franchisees will be more than happy to help you!
Industries
Another thing to consider when purchasing a franchise is the industry you would like to work in. You should pick an industry that you have an interest in or one that you may have previous experience in. This will make franchising much more enjoyable for you.
Whether it’s working in the home repair industry or working in the fitness and health industry, there is no shortage of franchises to choose from. Take your time finding the one that is best for you!
If you are ready to start your career as a franchisee, get in touch today to get started with a free consultation.
by Larry Reed | Sep 1, 2023 | Uncategorized
Starting your franchising career is an exciting time. It’s something that you have worked hard for, and now the opportunity is upon you! And while there are no secrets to finding success in franchising, there are some helpful tips that can make the process much easier for you. One of those is being comfortable asking a franchisor questions, especially as you begin your career.
In this blog, you’ll find the types of questions to ask your franchisor regarding investments and finances, the type of support you will receive as a franchisee and your franchisor’s history.
Questions About Finances
One of the more important aspects of owning a franchise is understanding how finances work in the franchising world. You will want to make sure that you are on top of everything so that there are no surprises. When speaking with your franchisor, you should make sure that you speak about franchising fees, royalties and return on investment.
It would help if you even asked about any other operating costs and the financial outlook for your franchise’s industry. Knowing this information can help you make better decisions for your franchise.
Questions About Support
As a new franchisee, you must have support as you start your career. Even if you are business-savvy, having help from your franchisor can be a massive boost. You should ask your franchisor about the types of training available, whether there are mentoring opportunities with seasoned franchisees and what help you’ll receive in marketing your franchise.
All of these factors are important to your success as a franchisee. You may be surprised to learn that some franchisors offer ongoing support.
Questions About Your Franchisor
During your career as a franchise owner, you will build several relationships, but none will be as important as the one you have built with your franchisor. They can help you with so much during your time as a franchise owner, so before you make any permanent decisions regarding a franchise, you must make sure that you know who your franchisor is. You should ask questions related to their history in franchising, their achievements and their credibility.
You will want to make sure that their visions and goals align with your own so both of you are on the same page when it comes to your franchise’s success!
If you are ready to start your career as a franchisee, get in touch today to get started with a free consultation.
by Larry Reed | Aug 1, 2023 | Uncategorized
Owning a franchise is a fantastic way for an entrepreneur to get a start in business ownership. Franchising allows you to work with a brand that has built its name already and has shown that it has a working and profitable system.
Franchisees are required to pay fees before they can take control of their franchise. This blog will discuss those fees and why they are important.
Franchise Fees
The first fee you will need to pay, and one of the most important, is the franchise fee. This fee allows a franchisee to become part of a franchise system. Franchise fees are one-time payments that range in price. Depending on how big the franchise brand is—and what the franchise fee covers—determines how much you will need to pay.
As a result of paying the franchise fee, you can now take advantage of the franchise’s brand name and trademarks. From there, you can then go and find an audience of your own to help your franchise grow.
Royalty Fees
Royalty fees are also important in franchising. The difference between these fees and franchise fees is that royalty fees are paid regularly. You and your franchisor can discuss how often these fees will be paid. Most will decide to make the payments either monthly or quarterly. While franchise fees focus on getting the ball rolling, royalty fees are there to keep the ball rolling.
A franchisee’s royalty fees allow for continued support from the franchise brand. This could include ongoing training, other needed services and marketing. The percentage that you will be responsible for paying will come from your gross sales and can differ from franchise to franchise. Royalty fees are also how most franchisors make their money.
Advertising Fees
Owning and operating a franchise takes a lot of work out of franchisees but also franchisors. In most instances, franchisors will be in control of any advertising that happens. This could be via social media, commercials and any other form of advertising available. These services are not cheap. This is where advertising fees for franchisees come into play.
Much like royalty fees, advertising fees are often paid regularly. These fees can help your franchisor afford national and local advertising, which will help build brand awareness and attract more customers!
If you are ready to start your career as a franchisee, get in touch today to get started with a free consultation.
