FranX

Charles N. Internicola and Nick Powills of FRANX talk about what you need to know about buying a franchise including: 

1. If Buying a Franchise is Right (or Wrong) for You - Franchise Ownership vs. Entrepreneurship - Difference between buying an individual unit vs. multi-unit ownership

2. Franchise Buying Basics  - Where to Find Franchise Opportunities - Franchise Brokers - the FDD - the Franchise Agreement - the Process

3. What to look for in a Franchise - Start with the FDD - Item 19 Financial Performance Representations - Unit Level Economics - Franchisee Validation - Leadership Team and Purpose

4. Plus Factors to Look for

5. Warning Signs to be Aware of

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Best this, best that. The bests of bests are wide and large in franchising. That is the start of the discovery for a franchise buyer.

Charles Internicola and Nick Powills talk about task items franchisors should work on in Q2 of 2021.

Leads take time to mature. While, on occasion, single events can create impactful moments, most of your successes, especially in franchising, will come from steady Eddie execution.

So, now that we are in the second quarter of 2021, the activities you do in these three months will have tremendous impact in end of year results. A few things to consider:

1. If you're behind in franchise sales, increase spend.  It may feel uncomfortable when you are not rockin’ the deals, but, if you don’t increase spend, you very well could be in the exact same place at the end of the year.

2. Reconsider/reconfigure your goals.  When knockin’ back some drinks around New Years, we create these crazy goals. But, then, we don’t look at the indicators. Now, for some, you are probably crushing the goals you set out, but for others, if you are playing from behind, pivot and adjust.

3. Ask franchisees for help. They are walking in the same brand shoes as you. Lean on them, too. It will make them feel like partners, and they just may have some good ideas. Make sure you are aligned as a team on what needs to be done this quarter. Assign tasks, measure, hold accountable. Make sure your team is aligned with your brand goals. And, don’t be afraid to share your personal goals, too.

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The “it” conversation in franchising is all about, “How do I get the brokers to sell more of my franchises.”

Franchisors are banging their heads on walls, desks and FDDs trying to figure out the new secret to getting deals through the broker networks (* apologies to those who call themselves consultants, coaches, or tour guides -- you are still a broker). Yet, many franchisors are missing some of the important basics of deal building:

Relationships: Cultivate and build them. Tools/Brand Resources: These folks are not in your brand. They don’t know your secrets. Give them the tools to present your brand amazingly. (a) Two-Minute Drill (b) Videos on why you/why now (c) Brand assets To win the war of growth, you have to arm your troops with the best franchise weapons. In this case, the truths that elevate your brand.

If you are not getting the deal traction you desire, perhaps it’s time to evaluate your tool kit and give your outside team a refreshed weapon to tell your brand story. Add it to the to-do list.

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Avoid franchisee lawsuits…

Sometimes they are inevitable... other times they are completely avoidable. Following the year of the pandemic, business closures, and small business challenge… it’s time to re-think your franchise agreements and legal relationships with your franchisees…

How can you make the lives of franchisee lawyers more difficult and less profitable?

1. Enlist Your Franchisees A franchise advisory council can be your “canary in the coal mine”. Embrace your FAC and use it as a tool to improve your system communication and as an early warning system.

2. Be Aware of State Franchise Laws No matter what they say… state specific franchise relationship laws may trump the terms of your franchise agreement. Be aware of the states that you operate in and the supplemental rights afforded to your franchisees.

3. Rethink Your Franchise Agreements Do you need all of the provisions in your franchise agreements? Maybe and, most likely, yes...but can you tone them down? Absolutely. And, if you overreach in your franchise agreements, important provisions like your non-compete and confidentiality covenants may not be as enforceable as you think they are. Make sure your restrictive covenants are fair, balanced, and enforceable.

4. Leverage Your FDD Unhappy franchisees are usually over-leveraged franchisees with misaligned expectations. Use your FDD to align expectations including a clear understanding about franchisee marketing obligations, the dollars that need to be spent to make the phone ring, and a supercharged Item 19 that creates clarity as to income replacement expectations.

The most successful lawsuits are the avoided ones.

You are at a franchise cocktail party. Ok, not really -- more like a franchise zoom happy hour (lame, can’t wait for a real one).