5 Major Advantages of Multi-Unit Franchising

Franchising -Increasingly, the candidates I work with as a franchise consultant are considering franchises that allow for multiple units. One major reason for this is a result of the increasing number of downsized executives in America needing to quickly replace lost six-figure-plus salaries.

Franchising allows someone with management background and business acumen to be in business for themselves, while receiving the training and support necessary to be a huge success. Their options in the traditional workplace may be limited. Or maybe they are seeking a career change, and they recognize the fact that by owning multiple franchise units, or even multiple brands, the road to meeting and exceeding their income goals can be realized much sooner.

Some popular categories of multi-unit franchising are hair care, fast food, maid and cleaning services, and home improvement, to name a few.

Of course, the franchisor isn't going to grant the rights to a multi-unit territory to just anyone off the street. In addition to showing that they are adequately capitalized, current or potential franchisees will need to present a strong business argument as to why they deserve this privilege. One of the best ways to demonstrate that is by already being a tremendous success in a single unit franchise.

Below are five terrific benefits of multi-unit franchising:

Profitability and overall success becomes accelerated. The expenses per unit decrease as you're able to spread the costs over multiple locations. This frees up your budget for additional marketing or training for a more productive staff.

Marketing and advertising is much more cost efficient. Example: you own three hair care franchises within the same small town. Lets say the cost to place an ad in the local newspaper marketing your services is $200. So you're able to advertise all three locations in one ad for the same cost you would pay if you had only a single unit. Do you agree that 3 for 1 marketing is extremely attractive? Take the money you save over time on newspaper advertising and buy a 30-second radio spot. That's true leverage.

Less assistance and training needed from the franchisor. No need to attend training multiple times. The franchisee has plenty of hands-on experience by way of a single-unit franchisee, and he already is following the proven system. Time is money.

More efficient and flexible staffing. Because multi-units are typically geographically friendly, employee illness and leave of absences can be covered more effectively by shifting employees from one location to another based on necessity. Vacation calendars are more flexible as well with the ability to cross cover.

Leveraged buying power. Substantial savings can be realized when you are purchasing supplies for three or more locations as opposed to only one. For example, paper and janitorial supplies can be bought in bulk, and then broken down and divided among the stores. Also, slower selling products can be shifted to a higher volume location for quicker sales if necessary. < Franchising >

Multi-unit franchising certainly may not be for everyone. However, for a seasoned business person with great management and people skills (and sufficient net worth and liquid assets), this can be the perfect investment vehicle that can provide a very rewarding career and rapid success-while building their own business empire.< Franchising >

By Cory Barber

Research the Market Before Buying a Franchise

Franchise - When investing in a franchise it is vital that you carry out careful research before you commit your money to any franchising opportunity.It is important that you consider the marketplace at both a local and national level as well as looking at the qualities of the individual franchise.Doing this research means that when you do invest you can do so with complete confidence that you are making the right choice.

When investing in a franchise it is vital that you carry out careful research before you commit your money to any franchising opportunity. It is important that you consider the marketplace at both a local and national level as well as looking at the qualities of the individual franchise. Doing this research means that when you do invest you can do so with complete confidence that you are making the right choice.

The first thing to consider is market trends at a national level and how these trends might affect the franchise in which you are looking to invest. The current global credit crunch and recession has obviously had a massive effect on UK businesses. Before investing you need to be confident that the franchise has a good chance of riding through the recession without being too adversely affected. Businesses in which demand is likely to stay constant clearly offer a more attractive investment. Other possible national trends to consider are movements towards new products or technologies and changes in laws such as taxation.

Franchise - Having considered national trends you should then look at trends on a more local level. For whatever area you are considering investing it can be useful to look at its current economic outlook. For example is the area an affluent one or does it have high levels of unemployment? Also just because a product or service is popular in one area of the country it doesn't necessarily mean it will be popular elsewhere. Doing local research ensures that you become aware of any possible problems at an early stage.

The final part of your research should be to look in depth at the franchise in which you are considering investing. Clearly you need to be sure that the franchise is performing well and is viable in the long term. Questions you might want to ask include how many stores does the franchiser have, how many have been opened in the last 12 months and have any stores been shut down recently.

By Rich Bendall

Restaurant Franchising - Going Green

Franchising - Environmentally sensitive practices are becoming increasingly important for many businesses and restaurant franchising is no exception. The environment is a hot topic and the public is becoming more vocal about what they expect from retailers, manufacturers and service providers alike. Environmental issues which are foremost in the public's mind, and which restaurant franchises must now take into account, include energy conservation, recycling and organic locally sourced food.

Franchising - In Britain, a government sponsored "Green Achiever Scheme" has been created to enable companies to demonstrate their environmentally friendly credentials to suppliers, customers and other bodies interested in green business. In the United States, federal tax incentives and recycling programs have been set up to facilitate those companies wanting to improve their green credentials. The number of restaurant franchises opting into such schemes in both countries has been steadily growing, as business owners take note of the public's demands when it comes to the environment.< Franchising >

Franchising - Consumers are becoming more aware of the environmental impact of their personal choices and, when it comes to opting where to spend their cash, are increasingly influenced by ethical business practices. Restaurant franchises have started to realize how important green credentials are to customers and investors alike. Environmentally friendly practices are gradually being introduced into every aspect of the restaurant franchising businesses. These practices range from installing solar panels, reducing carbon emissions and using non-toxic cleaning products to eliminating non-recyclable packaging and reducing the amount of all packaging used, filtering cooking oil for reuse and sourcing local, fair trade or organic produce.

Franchising - Although no official data yet exists on the number of green restaurant franchises, the green market is definitely growing, according to the International Franchise Association, the industry's largest trade group. The association has seen an increase in inquiries about green restaurant franchises, as well as a bigger presence at trade events. The green phenomenon has been seen across the board, which is to say that existing franchises are becoming greener and also that new franchises are starting up who are basing their whole concept on being environmentally conscious. Although the green concept has been with us for at least 25 years, it is only in recent years that this trend has become mainstream.< Franchising >

However, it would be hard to beat the eco-friendly credentials of one new restaurant franchise, which has taken the whole green concept to a new level. All of its fixtures and fittings are environmentally friendly, from seat cushions made from soybean oil to counter-tops made from recycled detergent bottles. Utensils are made from potatoes and containers from cornstarch, both of which biodegrade in 30 days. Ninety-eight per cent of all food served is organic and discounts are offered to customers who return pizza boxes for recycling. The building even meets environmental standards created by the US Green Building Council. Whilst this may be an extreme example of eco-friendly restaurant franchising, all the trends point to more businesses following eco-friendly policies.

By Alexa Morris

The Master Franchise Option

Franchise - Many people want to be a franchisor and not a franchisee. Some of them own businesses they would like to franchise, but they note that someone else has already franchise that type of business and are quite successful. Often, they do not wish to compete against such a successful company or there are several successful corporations franchising in the same industry and they feel the competition will just be too high.

Still, they might realize their dreams by becoming a master franchise ; which is basically a franchisor under the same brand name that operates within a region or state. Buying up the state rights to franchise a given franchise brand name might be a very wise way to go. It is definitely something to look at and worth looking into.

Indeed, I recommend that someone who wants to become a master franchise have franchising experience or bring on board a CFE Certified Franchise Executive from the International Franchise Association who has the least a decade or more experience in franchising at least a similar type of business format.

You must realize if you wish to be a master franchise that you're going to need quite a bit of funding. Generally a franchisor needs about $1 million to turn a prototype small business that has been up and running for ten years into a franchising company. Of course, if you buy a master franchise and wish to franchise only one state and you're going to use the current franchisor's system to do so, and thus, you can probably get by on a lot less.

Still, you are going to need a good chunk of change for working capital for the first five years and you should never buy a master franchise opportunity from a startup franchisor unless they have all the bugs worked out, and have a solid team behind them with excellent capital. Please consider all this. < Franchise >

By Lance Winslow

Before You Buy a Franchise Find Out Why the Franchisor is Franchising

Franchise - If you are considering buying a franchise of your own you might want to consider a couple of questions that you should ask the franchisor or prior to your purchase. One question I always like to ask franchisors on behalf for franchise buyers is; why did you decide to franchise, and expand your business this way? Why didn't you just start opening up all your own locations? Their answers to this question can be very revealing.

You see, if they are franchising just to make a lot of money and franchise fees then they are probably not very good businesspeople because it costs about $1 million up front in capital to franchise and it takes a good 5 to 10 years to really get a good return on investment in the franchise industry.

It's a lot of headaches, a lot of litigation, a lot of sacrifice, and a tremendous amount of work to franchise a company. Although it is enticing to become the next Ray Kroc (founder of McDonalds) the reality is that the failure rate amongst franchisors is five to one over the first five years. Those are not very good odds when you're risking $1 million in working capital.

If however the franchisor has a great product or service that is very much desired by the consumer, but realizes they simply cannot expand fast enough to conquer the marketplace and attain a huge chunk of the market share, then sometimes franchising really is the best way to go especially if they have the right team behind them and the million dollar war chest. Please consider all this. < Franchise >

By Lance Winslow

Steady Growth in Franchise is Essential

Franchise - If you are considering buying a franchise and wish to own your own business, as a franchisee then you need to carefully study the various franchisors and their offerings to make sure it is a good fit and that the companies are financially stable. Perhaps you didn't know this but franchisors have a high rate of failure and most go out of business before five years. In fact it's even worse than that the failure rate of small businesses in the US, as franchisors rates of failure are pushing 5 to 1 in the first five years.

The failure rate of franchising companies is triple that of franchisee failures. One thing that I advise franchise buyers to check out is to see if the franchisor has maintained steady growth. Most likely what you'll find is that the franchisor goes through spurts of growth based on a market conditions and the business cycles. If you do a little bit of research you will also find that the franchisor can go through wild swings in available capital, and on their income statement.

A franchising company that grows real fast can often become cash poor and that means the level of support for his franchisees goes down to a trickle, which is something you definitely don't want to know in advance if you are going to be one of the franchise team members. So before you buy make sure that the company maintains steady growth, and in times of rapid growth did they give proper support or franchised outlets, and keep up with their cash flow.

There are two ways to get to the bottom of this question. One is to look at the financial statements for several years back and contrast that to the number of outlets and growth. The second way to figure this out is to talk to franchisees that are currently in the system about the level of support to see if it has been steady. Please consider all this. <>

By Lance Winslow