Franchising TNT

For the new investor, not having to start a new business from scratch offers significant advantage, both in time taken to earn a return and in initial investment cost. Marketing costs are expected to be reduced. Of course its in the interest of the franchisor that quality franchisees succeed and the franchisor support offered is a quantifiable attraction. How does that investor reduce the risk of fraud in the due diligence process?

The relationship of the investor franchisee with the franchisor will and must be ongoing. As with any contractual arrangements it should go without saying that both parties to the contract must honor it. Disputes arise in the best of relationships and some may give rise to litigation initiated by either party on the basis of fraud Here are five key areas where possibilities for fraud may exist to destroy the plans of the franchisee from the commencement of contract. Some will be familiar to the first time investor as a risk for an entrepreneur; but all warrant that second take.

Make sure to look only at quality franchise offerings. The new to franchising investor should forget the passion for a particular business and try to be more objective. Just as too popular franchises will be more expensive, may be subject to passing fads, or have fierce competition alongside the sales territory defined in the proposed contract, there are the few franchisors that are known to someone as sharp operators. Every franchise offering could have a number of unhappy, unsuccessful franchisees who may claim to be subject to fraud A strong internet search should be done and, if done on behalf, not stop at page one Google. . Speak to Franchisees. Is there a pattern to the complaints? If the complaints make the investor uncomfortable this is an alert to move on to another option. The relationship with the franchisor must be built on trust and respect.

There should be a check whether the franchise principals have any history of litigation. Disputes over failure to perform can arise from either partys perspective. Franchising is a very litigious business and most franchise companies will have some history of legal actions but its important to separate fact from fiction (as the internet is filled with both). Was the franchisor looking to enforce their agreement to protect the brand and the system, or were they taking advantage of the franchisees? It is important to the franchisee to understand the competition. The investor`s lawyer may alert the investor to signs of undue competition. But what if the competition represented in various initial discussions about marketing does not in fact exist? Are there other flags of fraudulent practise of which the investor should be aware?

Franchisees must go in with eyes wide open. Use of detached, competent and professional help to draft the franchisee`s own business plan and research on earnings forecasts is an essential step as a protection against fraud on the part of the franchisor especially internationally where FTC type protections are non-existent. Breakeven analysis and less optimistic scenarios must be included and the investor should not place o reliance solely on the information provided by the franchisor, no matter how well known that particular franchise may be. In lower cost and lesser known franchise offerings, earnings performance may relate to the strengths and skills of the buyer; then again an optimistic earnings scenario provided to the potential investor may also be a flag of fraud. The investor should prepare a detailed assessment of initial investment costs and compare that with the data which must be requested from the franchisor.

There is a greater risk inherent in considering a start up franchise. It is in the interest of the inexperienced would be franchisee to choose a business for due diligence with a track record over a minimum of 4 to 5 years, with a minimum number of currently operating franchise units. Should the support and expert advice of a franchise consultant not be sought out at an early stage, there will be a need for basic legwork such as visiting the head office of the franchisor and viewing the training material for oneself.

To quote an old adage, the devil is in the detail, even before a study of the draft contract is the next step. Researching important detail early in the due diligence process will make the intended franchisee less concerned about the possibility of fraud. They should be comfortable with the quality of training and support provided, where it will be provided and for how long. A promise to send on the material later should be regarded as just that, a promise, and should be made good promptly. Delays in the provision of any paperwork agreed to be provided should alert the would be investor and their advisors and the franchisor challenged at an early stage in the process.

MatchPoint Franchise Consulting Network was founded in 2006 with a mission of helping companies expand their franchise networks and improve their system profitability. Its mission included improving the quality of new Franchisees coming into a system. From its inception it was clear that complimentary advice offered to franchise buyers on the web site and by MatchPoint consultants is vital to the would be franchisee to enable a better, prudent, buying decision. The advice offered by our consultants does not make us lawyers, rather it is there to help bring all advice offered to the potential franchisee in the due diligence process to a high level of quality.

MatchPoint consultants trained by Nigel Mayne know the red flags of fraud in the industry. It takes the very few franchisors that practice franchise fraud to taint the dream of the franchisee. That`s where seeking the independent advice of an expert franchising consultant is prudent and invaluable.

If you are a business owner who is doing pretty well locally, you may be wondering if you should expand your business efforts to other parts of the world. For many companies, going international is a wise business decision because of the opportunities it presents. Another reason why an entrepreneur would want to convert its present set up into an international business is because of the huge market exposure gain from it. Another aspect, as they will be forced to work with a new culture they can learn from and apply to other business ventures they make in the future.

Expanding business globally requires slightly different expansion plans than a domestic expansion plan based on stages of business growth over time. It is also possible to consider an international business strategy and work from a global perspective to formulate a more traditional type of business implementation plan.

If you are looking to own your own business abroad, international franchising opportunities will offer a solid foundation. As you will experience success much faster than with a traditional business, the initial investment will be much lower.

Franchising has gone international in various sectors. As more and more companies scan the globe to put up franchise operations, the world seems to be getting smaller. During the past few years the international franchise market has expanded to a large extent. Countries throughout the world seem to be participating in the growth of industries that was previously specific to a particular country only.

Some of the major industries are food, electronics, and automobiles that have shown a rapid growth through franchising model expansion plan worldwide. International franchising allows the companies to infiltrate countries and introduce their product or service in local market. Local franchisees play vital roles in this whole process.

International franchising is more popular than ever due to the potential it brings both for franchisors and franchisees. Foreign market growth has caused many companies to be successful with franchising overseas. Although the potential is there, it is still quite a challenging decision to make. One must consider both the pros and cons of international franchise and make the choice.

No matter the type, size, or location, franchises are one of the most popular international business opportunities. But figuring out which ones are hot and which ones are not can be a daunting task. A company considering franchising internationally or all for that matter needs to have a proven, repeatable business model in place. There should be documented systems in place that can be taught and standardized. International franchising might either increase your systems’ efficiencies or it might increase the loop holes in your business model’s operating system. If there are undefined or unrefined aspects to the original model, the franchisees systems will be drastically affected. The original business needs to have some brand value that may be recognizable and carry brand equity with the franchise offering. The business product or service offering should have competitive and unique differences compared to the competition. At a nutshell, international franchising is a bring prospect if it is carried out efficiently.

About Author :

Sparkleminds offers international franchising solutions for international business. It helps corporate houses on how to make a franchise a success. Creating awareness among masses about various aspects of franchise and franchising is one of the major objectives of sparkleminds. This particular article illustrates these points further.

Passing by that new techie shop with their all-new phone brand displayed on their window, you can not resist checking out your savings account and see if you could possibly buy one. But wait, on the way you heard the growling within your stomach. Well, no doubt, you go directly for the nearest fast food chain in the location and grab that piece of cheeseburger that suits your taste. This is exactly the explanation why food franchising is being increasingly more hit and prosperous all over the world.

Food stuff is a important commodity. Eating is unavoidable. That is certainly why considering of new goods to advertise in the market can be difficult; but thinking of that fundamental commodity that humans cannot live without and turning it into whatever stylish may be profitable, and ensure longevity. Particularly that food is the first on the checklist when we discuss hang-out, salary pay, and celebrations.

Palatable fashion sense is king. The availability of major points of innovation and alteration in existing recipes; and experimenting with the peoples taste buds brought in a number of product franchises to consider from.

1. Fashion Fruit. There is actually a whole lot of dishes and palatable goodies that can be created out from the abundant fruits. Artistically presented fruit shakes, organic fruits, fruit salad, dried fruits, spread, jelly and jams are in demand despite a range of brands.

2. Meaty Rolls with a Twist. This involves majority of those available in kiosks and food stores i.e., hotdog on-stick, roll or sandwich, short meal toppings, and balls.

3. Cafe and Latte Culture. Coffee culture has pointed out the value of coffee to the human body. Coffee product made its way for the customers diet and caters the needs of young professionals and has become a part of their routine.

Food is a reasonable investment. Beginning up your own food business may be costly with all preliminary ingredients, resources, and quota to be attained. What’s perfect with franchising is that the parent corporation shoulders initial stock and provision of such equipment and ready-made recipe which has a investment that could be as low as 25,000 to 35,000 pesos. Even all those with low socio-economic status can grow to be entrepreneurs.

Safe and authentic product via franchising is guaranteed. Food trade is very technical and complex since it also deals with sanitary criteria and health assurance. With franchising, the franchisee absorbs an already tested system of business plan which has conducted its own sanitary practices and has been accepted legally. Additionally, operational requirements can also be acquired with the companys support.

The PFA (Philippine Franchise Association) states that 43% of franchising in the country covers food franchising. It grew by nearly 450% from only 78 systems in 1995 to almost 430 nowadays. This shows that food business is the most sought-after business plan; and it is by no means too late for you to engage in one.

Franchising had become a popular trend in the Philippines due to the many new franchise businesses available in the market today that can offer significantly lower franchising cost compared to what franchise businesses in the past. These kinds of popular Franchising business Philippines are food-cart and food-stall businesses.

Popularity of Food-Cart and Food-Stall Businesses
Food-cart and food-stall businesses had become wide-spread all over the Philippines today. The reason why is because of franchising businesses which had promoted these types of small businesses to average Filipinos.

The advantage that made these types of franchise businesses popular, according to many experts, is because of its affordability, making it easier for the average Filipino to start their own profitable business.

Simplicity of Food-Cart Businesses
Part of the reason that made food-cart and food-stall franchise business in the Philippines simple, other than its relatively lesser expensive franchising cost, is its requirements.

Unlike larger franchise business, such as convenient stores or restaurants, a food-cart and food-stall businesses normally requires smaller investments in terms of location and space.

The simplicity of these businesses made it easier for Filipinos to manage their own businesses, even though they lack the necessary knowledge in handling a business.

But what made these small businesses even more popular, according to many experts, is that it doesnt necessarily require franchisees to have attained experience in a managerial position or have acquired a degree in business administration.

Contribution of Franchise Industry to the Economic Growth of the Philippines
The popularity of food-cart and food-stall businesses in the Philippines had largely contributed to the growth of the franchising industry of the Philippines. However, other than the growth of the sector, franchise businesses had also contributed to the growth of the Philippine Economy.

The PFA, or the Philippine Franchise Association, is the pioneer and biggest franchise association in the Philippines. It is the voluntary self-regulating governing body for franchising in the country with 180 franchisors and allied members nationwide.

According to them, the growth of the franchise industry had also contributed to the economic growth of the Philippines. This includes the creation of thousands of enterprises and generation of hundreds of thousands of jobs, making franchising an important tool in the countrys economic growth. Additionally, the franchise industry had also contributed to the growth of the Philippines as the franchise hub of Asia when it comes to the development of franchise concepts.

Working at home is great, but finding legitimate home-based franchising opportunities can be tough. However, by doing careful research before you invest in anything, running a successful franchise from the comfort of your own home can become a reality!
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Why is it so important to work at home?

Because you get so much out of it, including:

-More freedom
Home-based franchises allow you to have a flexible schedule that simply does not exist with office-based franchises. You can set your own hours and even avoid a frustrating daily commute!

As an added benefit, working from home can save you a bunch of money. Home-based franchises have lower start-up and operating costs than office-based ones which means you can turn a profit faster at home than if you were renting an office somewhere.

-The ability to work from anywhere

Some franchises can call your home office home permanently. Others may work well at home for awhile, but may eventually grow too big for a home office. Some may even afford you the opportunity to work from your vacation home or move to a brand new city. If all you need is a computer and a phone, you can go anywhere without worrying about how it will affect your business!

-Control over how your business grows

As a home-based franchisee, you can choose how fast your business grows. If you think it would be best to work from home for awhile so that you can save up for office space later you can do it. If you want to set a timeline for how long you work from home, you can do that, too. Since youre the boss, you call the shots.

-Access to a complete support network

When you own a franchise, youre never really alone. Quality franchisors will offer ongoing educational opportunities to home-based franchisees, and they will provide ongoing training whenever you need it. Good franchisors even keep the best interests of their franchisees in mind by providing on-site support like sending a field team to your home office to give you training and encouragement.

And youll also get support outside the company. Many franchisors give their home-based fracnhisees access to marketing assistance and public relations services. Theyll even send IT professionals to your home office to get all of your technology set up!

Even though youre working from home, you will have all of the tools you need to build a successful, professional business!

Lesley D’Arcy As a Franchise Recruitment Manager at Mortgage Choice, Lesley D’Arcy is responsible for recruiting franchisees to greenfield (new) opportunities. Her career in franchise recruitment spans over 15 years where she has worked with many major franchise brands. Lesley has a wealth of experience in recruitment of franchisees and builds on this experience by unearthing and developing the latest and most innovative ways to help franchisors build their networks. This experience has given her the skills to become an expert in the field of franchise recruitment, excelling in lead generation, screening, qualifying and selling to prospective franchisees.