Getting A Higher Price When Selling Your Restaurant In 2019

Getting A Higher Price When Selling Your Restaurant In 2019
Chris Viscup a prominent New York Business Broker with Transworld said “One of the other most important parts of selling your restaurant is to make sure your books are in order. It will be your job to prove out how much money trickles down to you through the company and what this can look like to potential buyers.

Getting A Higher Price When Selling Your Restaurant In 2019
by Gary Occhiogrosso Contributor
Photo by Rod Long on Unsplash

It’s 2019 and after years of hard work you’ve now decided to sell your restaurant, perhaps to open a different business, or retire or relocate. Whatever the reason, selling a restaurant requires a strong strategy, careful planning, and detailed preparation. In this article, we’ll explore some essential tips and steps needed to put you on a path for a quicker sale at the highest possible price along with a smooth transition.

Let’s Start With First Impressions.

The appearance of your restaurant not only matters to your customers, but it also matters to potential buyers. Bad “curb appeal” on the initial visit may be all it takes for a potential buyer to take a pass on a more in-depth look into the investment potential of your restaurant. Make sure everything inside and outside the restaurant is clean. If your establishment is a free-standing building, then the quality of care for the property will be an early indication of the level of care taken in building and growing the business over the years. Items like trimming the grass, keeping the parking lot and surrounding area clean and free of trash are crucial to curb appeal. Maintaining clean windows & glass doors, polishing handles, deep cleaning the grout in tile floors and shampooing carpeting are some simple things that will pay dividends to the buyers first impression. If the restaurant is a storefront location, then you’ll also need to make sure any cleaning and improvements that may be the responsibility of the landlord are taken care of before showing the business.

Nothing says “I don’t care” or “I’ve given up on this place” more than broken or missing equipment. If your kitchen equipment is not in 100% working order, it may set up doubt in your financial presentation regarding production capabilities. Also, nonfunctional equipment is detrimental to employee morale and productively. Ultimately that lack of productivity shows up on the Profit and Loss Statement (P&L) in the form of increased labor cost. Every part of the restaurant should present itself as credible to handle the current volume as well as to grow the business in the future. Make sure all of your equipment works. I can not emphasize enough to take the time in advance to replace or repair any broken equipment.

Remove personal items you do not intend to include as part of the sale. Doing this helps avoid any misunderstandings later between buyer and seller. For example, your personal laptop computer used for the business sitting on your desk may be mistaken as part of the assets for sale. Later in this article, we’ll cover making sure a complete equipment and asset list is written. However, the cleaner and less cluttered the visual aspect of the facility, the less chance for any misunderstanding when it comes time to negotiate.

And lastly regarding the facility, don’t be afraid to spend a little TLC money. Making a small investment, such as freshening up the paint, or replacing ceiling tiles, or reupholstering a ripped seat cover can go a long way to increase the visual appeal of your restaurant. These quick fixes will have a positive impact on your sale price and the time it takes to sell the business.

Put Your Financial House In Order Now

Presenting an honest, straightforward, financial picture of your restaurant is the most critical factor in determining accurate valuation and sale price. Professionally documented results regarding unit economics, profitability, and true owner benefit are what buyers, their accountant, and lawyer will be investigating in the due diligence phase of the process. Whether or not potential buyers purchase your restaurant depends on whether or not they think it will make money and provide a reasonable return on investment (ROI). Therefore, the financial information you provide to the buyer is the most significant factor in determining the success of the sale.

Ideally, you have practiced clear and organized bookkeeping since you started your business. If not, then arrange financial records going back at least one year before the time you list your restaurant for sale. That way potential buyers will have a trailing 12-month picture of the restaurant’s performance and trending. It is likely that buyers will ask to see a profit and loss statements and a balance sheet. If you are unable to create them yourself, have your accountant prepare them in advance so you do not feel rushed later in the sale process.

Make A To-Do List For Yourself

Financial statements aren’t the only aspect of getting organized. This step also includes creating a written list of all hard assets such as furniture, fixtures, small wares, and equipment. Also, a copy of your lease should be available for review in the due diligence phase of the transaction. Additionally, be prepared to document that all of the restaurant’s bills are up to date. Be ready to prove in writing that your sales and payroll taxes are current and paid in full. Employee payroll information needs to be in a presentable format and up to date. A to-do list will help you make sure everything gets done so that the sale goes as smoothly as possible.

The Hunt For Buyers

There are two ways to find potential buyers: find them yourself or hire a business broker. The process of valuation, listing, advertising, and vetting potential buyers is time-consuming and in my opinion, requires professional experience and know how. Although many sellers take this step on their own, a professional business broker can support the process by offering recommendations and presentations that save time and attract more potential buyers.

When you interview brokers, be sure to ask them how long they have been in the business of selling businesses, what their specialty is, how many listings they have now, and how many restaurants they have sold in the past year. Also, ask if they have prepared contracts for this type of transaction and how they plan to determine the value of your restaurant. Discuss their answers with your financial and legal advisors to determine if the broker has the right qualifications, experience, and track record.

One prominent New York Business Broker I spoke with said “One of the other most important parts of selling your restaurant is to make sure your books are in order. It will be your job to prove out how much money trickles down to you through the company and what this can look like to potential buyers. Without this component, you will either fall prey to lower offers than you would otherwise be getting, no offers, or end up with buyers wasting your time and never getting to the finish line. Not having good books leads ultimately to the two biggest deal killers – lack of trust and too much time for the transaction to close. With a good broker and good books, most of the heavy lifting is completed in the beginning, before putting the business on the market. Once you sign with a broker, there should be significant time dedicated to proving out the numbers – what they are, and what they could be. Every minute you spend in the beginning will save 5-7 minutes later.”

On the other hand, if you decide to go it alone and forgo hiring a business broker, then you’ll need to get some additional advice from your attorney and account. They can assist you with the proper valuation and selling price. Setting an unrealistic or emotional price on the business will slow the sales process or cause it to fail altogether. Actions to take also includes advertising and listing the restaurant on websites that post restaurants for sale. Keep in mind professional business brokers also use these websites, so competition exists. However, if you study these websites carefully, you should be able to get a good idea on how to word your ad for better results.

Always Be Ready

Whether you list your restaurant on your own or with a broker be prepared to show your restaurant to potential buyers at all times. Since you may have a buyer visit you unannounced, it means keeping the restaurant clean, fully staffed and well-managed no matter the day and time. You never know when a buyer might drop by to take a look. I also remind my clients that any customer in the restaurant may actually be a buyer doing some research before they contact you.

Once The Buyer Is found

At this point, if you’ve found a buyer and negotiations have been successful, then the final step is the paperwork necessary to complete the transaction. The paperwork usually starts with an “Asset Purchase Agreement.” Your attorney should prepare this document for you. The Asset Purchase Agreement details all the components of the sale. Items such as the sale price, the terms (if you are holding a note), a full and complete equipment list, the amount and value of the inventory you will have at the time of closing, the length of time (if any) that you are willing to train the new owner as well as any contingencies regarding the lease assignment from your landlord and of course a deadline date to close the transaction. Regardless of whether you’re working with a business broker or selling on your own, in all cases, I recommend you have your attorney involved to ensure the Asset Purchase Agreement covers all the various aspects of the transaction.

In addition, once you have a buyer engaged but before the final closing date, you should continue to operate your restaurant as if you are not selling it. Acquisitions sometimes fall through at the last minute, and you don’t want to create extra work for yourself in getting everything back up to par again if that happens.

Plan And Proceed

Smart and detailed planning will minimize glitches and deal-killing problems, throughout the transaction. Business Brokers warn: “The biggest disasters all come with one thing in common – wasted time. Without proper planning, not only may you decide to accept an offer lower than what you desire, but you will lose a good portion of your time getting there. As the saying goes – An ounce of prevention is worth a pound of cure! Make sure you front-load your business and get all the materials you need in order before you sell it.”

I recommend you spend the time upfront, planning the sale, organizing paperwork, investigating brokers and deciding the best time to execute your plan. Selling a restaurant can be a smooth, simple transaction if these tips along with the advice of your accountant and attorney are put into practice.

Six Ways to Finance a Restaurant Franchise

Six Ways to Finance a Restaurant Food Franchise…

Before seeking financing of any kind, make sure you’ve done your own due diligence. Prior to beginning your search, it’s important to know your own net worth, your credit rating, and to have a comprehensive business plan that includes pro forma documents, operations details and market comparison analysis.

Six Ways to Finance a Restaurant Food Franchise

If you are considering investing in a franchise opportunity, the very first question that may come to mind is whether you qualify financially. Most entrepreneurs, restaurant aficionados, or business executives exploring opportunities for a restaurant food franchise will seek outside sources of financing. The golden rule is to expect to contribute 15% to 30% of your own money to start with, and then go from there.

If 30% seems daunting, there’s good news. Often a franchise business opportunity is looked upon by financial institutions as less of a risk, compared to independent business start-ups. This can be further reinforced by the history and recognition of the brand name, the number of units in operation, and even the support provided to the franchisee by the franchisor.

Before seeking financing of any kind, make sure you’ve done your own due diligence. Prior to beginning your search, it’s important to know your own net worth, your credit rating, and to have a comprehensive business plan that includes pro forma documents, operations details and market comparison analysis.

Franchise financing can be complex, but it doesn’t have to feel impossible. Consider these six ways to finance a restaurant food franchise like Taboonette.

1. Friends and family, as well as experienced business owners,d business owners turn inwardly toward friends and relatives to help finance their franchise or start-up business. With this kind of financing, individuals and families get to create their own terms for repayment and enjoy the collaborative support from those closest to them.

2.SBA loans.
The Small Business Administration is a government agency that helps entrepreneurs plan, launch, manage and grow their businesses.1 They work with financial institutions to provide SBA-secured loans. A lender may be more likely to approve financing for individuals backed by an SBA loan because it is 90% secured. This means if the loan goes into default, the SBA guarantees repayment of 90% of the loan to the lending institution.

3.Bank and private loans.
Since the 2008 recession, it has been more difficult to secure bank loans or loans from venture capitalists or angel investors. A bank loan not secured by the SBA is perhaps the most challenging to obtain, but if you have a good relationship with a financial institution, a stellar credit rating and the required minimum liquid capital, it may be a good option.

4.Veterans loan.
The Department of Veterans Affairs, another government institution, offers qualified veterans financing opportunities for franchise and business loans. The program, called the Patriot Express because of its speedy process, makes loans up to $500,000 to active-duty military preparing to transition to civilian life, as well as to spouses and survivors of veterans. The loans come with the SBA’s lowest rates.2

5.Home equity.
A home equity line of credit or second mortgage is a way of obtaining financing but comes with a personal risk. Financing in this way uses your home as security. This means if you default on a business loan, you lose your home. But with sufficient equity in your home, it can be a relatively easy financing source to tap.

6.401(k), stocks and other personal accounts.
It is not unusual for people to tap into their retirement or savings accounts to help finance business ventures. In an interview with the Wall Street Journal, Bernie Siegel, founder of Siegel Capital LLC, discusses a rollover plan where the franchisee creates a C corporation that will own and operate the new franchise business. That corporation then creates its 401(k)-retirement plan. The C corporation’s 401(k) plan then purchases stock in the C corporation. The cash paid to the corporation is then used as the down payment, and the balance can then be financed through an SBA guaranteed loan.3

At Taboonette, we are excited to work with financially qualified individuals to help them reach their goal of owning a restaurant food franchise. Together we look forward to growing both our Taboonette franchisee and customer bases and bringing our delicious trademark Middleterranean® food and a unique dining experience to more hungry guests.

For franchise information contact [email protected] . “Offer by Prospectus only”

1.https://www.sba.gov/
2. http://guides.wsj.com/small-business/franchising/how-to-finance-a-franchise-purchase/
3.https://www.wsj.com/articles/SB120242422031851929

Branding Drives Restaurant Sales

Create Branding To Drive Restaurant Sales And Growth…

A restaurant must connect with the lifestyle of consumers. The first step to doing this is to have a definite name, image, and brand message.

Create Branding To Drive Restaurant Sales And Growth
By Gary Occhiogrosso
Forbes Contributor
I write about the franchised restaurant and food services industry.

In the past, restaurant advertising consisted mainly of print and broadcast advertisements along with word of mouth. Branding isn’t accomplished solely through conventional advertising. Although advertising uses the branding elements, it refers to so much more. Branding is the practice of making a name, symbol, reasons, and guest experience stand out in the minds of consumers. Branding gives the company and its products a competitive edge above other companies which provide similar products. Thousands of restaurants serve hamburgers, but why when people think about burgers, their minds immediately go to McDonald’s or Burger King? It’s because the power of branding connects the product to a bigger picture. Today’s savvy consumers expect more than merely a place to have a meal. They are not only hungry for lunch but eager to connect with the experience the product or service provides.

Spotlight on branding
In today’s noisy advertising environment restaurants must cut through the clutter with a cohesive advertising and marketing strategy. Franchised and chain restaurant brands spend a great deal of time, effort and dollars on this critical aspect of their business model. Creating and enforcing their brand image is a crucial task for their marketing teams. Smart restaurants marketers understand the need for a consistent brand voice with a clearly defined marketing plan. This consistency is vital because locations in the chain must present consumers with the same image and message to avoid confusion and brand dilution.

Additionally, many consumers want to know what a company stands for, it’s mission, how it goes about its business and why you should eat at a particular restaurant. The need for guest engagement has led restaurant marketers to pivot from purely traditional advertising to creating a total restaurant experience. These experiences include social causes the guests share, their experience with friends and family via social media and their connection to a community. The evolution of social media platforms such as Facebook, Instagram, Twitter, and Yelp, as well as search engine optimization, and online ads have become the new messaging channels used by marketers to increase “occasion to use” and brand loyalty. Today’s chain restaurants employ tactics including traditional advertising, social media messaging and participating in local events that support the community. Creating value and loyalty through brand image and guest experience lives in the mind of the guest long after the meal.

Creating a connection is key

A restaurant must connect with the lifestyle of consumers. The first step to doing this is to have a definite name, image, and brand message. Usually, the owners of the business and a branding team come together to discuss and decide on what the restaurant will mean to their future customers. This step should be accomplished at the beginning of the business planning.

Jennifer Williams, the founding partner, of “the watsons,” a New York City based branding firm, describes the importance of restaurant branding like this: ” The National Restaurant Association reports that Americans spend $799 billion a year on restaurants. Beyond clothing, restaurants are the most searched type of business online. Competition is fierce, and branding is more important than ever before. Whether yours is a franchise or independent restaurant, it takes more than great food and service to lure customers and build loyalty and repeat business. It takes a well-defined brand that resonates emotionally with your customers. A brand is essentially the personality of your business. Moreover, its value is derived from the connection people make with it. In today’s crowded restaurant sector, where many chain restaurants offer similar menus, your ability to differentiate yourself – can make or break your success.

READ THE ENTIRE ARTICLE HERE https://www.forbes.com/sites/garyocchiogrosso/2018/11/14/create-branding-to-drive-restaurant-sales-and-growth/#537d8cd3487a

Tips for Branding Design Success – Riko’s in Stamford CT

Riko’s: Designed For Success…

Restaurant design plays a huge role in branding. Your guest’s total experience is the difference between success and failure. Especially in the franchise business. Small Business needs to watch how the Big Guys transform their restaurants into memorable experience their customers can take home…

Riko’s: Designed For Success
By Laurie Hilliard – FMM Contributor.

In our very visual world, consumers have developed a keen awareness of design. What we see and how it makes us feel impacts our response to our environment in virtually every facet of our lives. The importance and impact of design in the restaurant industry is an ongoing and growing trend for restaurants as they scramble for recognition. “The U.S. restaurant industry is huge: $800 billion in annual sales with some 625,000 restaurants each trying to set itself apart from the others. One effective way of differentiating a restaurant brand is to design around a theme or concept that conveys a story to customers as they dine.” Reports international architectural design firm, AD&V.

Vincent Celano, founder, and principal of New York-based Celano Design Studio says, “The guest experience starts when he or she walks in the door. ”READ THE ENTIRE ARTICLE CLICK HERE”

SELLING & AWARDING FRANCHISES

“In sales, it’s not what you say; it’s how they perceive what you say.”
– Jeffrey Gitome
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Franchising, Be Your Own Boss, Venture, Shark Tank, Mark Cuban, Entrepreneur, Gig Society, Side gig, Franchise your Business

SELLING & AWARDING FRANCHISES
By Gary Occhiogrosso – FMM Contributor

Selling on every level is the principal work in any franchise organization in order to grow your franchise business. Whether it’s selling new franchises or creating systems to support your franchisees to grow their sales or selling your goals to investors, there’so business on the planet that exists without sales.

Have you given thought to the logistics? How do you intend to quickly respond to all the incoming calls, make follow-up calls and address all the prospects questions? How will you ever conduct discovery days, tour prospects to operating units or spend the needed hours to address their fears, concerns and objections? How will you manage your CRM, keep past inquirers in the loop or create buzz that may initiate new buyers and motivate past inquirers to take action now.

A consistent, timely sales effort rules the day. That’s our specialty… We sell! We make the initial contact, we qualify the prospect, guide the candidate through the application process, do the store visits, conduct the meetings & the numerous follow-up calls, the discovery day and work with the prospect each step of the way. You, the Franchisor can stay focused on building the operational side of your business.

One of the most important aspects regarding the franchise sales process is to practice timely response time and create value in the system. That comes from totally dedicated time & focus to the sales process, carefully planning a sales funnel that uses decades of experience, successful track record, industry credibility and franchise industry specific “know how”.

The various steps and numerous hours it takes to close a franchise sale are not something any startup or emerging franchisor should even be thinking about doing on their own.

There is no organization like Franchise Growth Solutions that offers not only a franchise consulting program but also earns its keep by selling franchises for you. It’s our “success-based” upside to offset the low fees for all the other services FGS provides.
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About the Author:
Gary Occhiogrosso is the Founder of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm. Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, advertising, selling franchises and guiding franchisors in raising growth capital. Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program with its founders. He is the former President of TRUFOODS, LLC a multi-brand franchisor and former COO of Desert Moon Fresh Mexican Grille. He advises several emerging and growth brands in the franchise industry. Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine and named “Top 50 CXO’s” by SmartCEO Magazine. In addition, Gary is an adjunct instructor at New York University on the topics of Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales, and Marketing. He was also the host of the “Small Business & Franchise Show” broadcast over AM970 in New York City.
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ABOUT FRANCHISE GROWTH SOLUTIONS, LLC
Franchise Growth Solutions, LLC is a strategic planning, franchise development and sales organization offering franchise sales, brand concept and development, strategic planning, real estate and architectural development, vendor management, lead generation, advertising, marketing and PR including social media. Franchise Growth Solutions’ proven “Coach, Mentor & Grow®” system puts both franchisors and potential franchisees on the fast track to growth. Membership in Franchise Growth Solutions’ client portfolio is by recommendation only. www.frangrow.com
Contact: [email protected]

Why Thin Crust Pizza is all the Rage in Franchising

While many new franchised pizza brands have turned to create your own, limited service concepts offering non-traditional, lower quality pizza, Riko’s Thin Crust has moved in the other direction. Offering full service, high quality, made to order pizza, salads, and Wings in a family-friendly casual setting. They practice all the steps in successful franchising

Why Thin Crust Pizza is all the Rage in Franchising

The “Think” Crust Concept behind Riko’s Pizza
By Laurie Hilliard – FMM Contributor.

The inspiration for opening a restaurant comes from many sources, Riko’s is rooted in the enduring values of family, a belief in simple homestyle food and finding the best means to serve the time-honored passion for pizza. Today Riko’s is an evolution of the classic mom and pop pizza places we all grew up with. It is familiar, inviting and smells delicious yet offers a modern next-generation twist designed to meet today’s fast-casual lifestyle. We like to say, “It’s a good place to be.” And that translates into “It’s a good place to be” all ‘round: a good place to eat, a good place to work and a good place to own.

Since opening our first location in 2011 in Stamford CT, our family-centric enterprise has evolved and adapted to the changing pizza industry, local real estate markets, and consumers’ lifestyles. We have developed two proven operating models in three locations; full-service, casual restaurant with full bar and the fast-casual model; take-out and delivery. Both models have three points of service: dine-in, call/online ordering for pick up and call/online ordering for delivery. And that’s unique in the casual dining space.

Our menu is a study (a labor of love, to be sure) in simplicity, in delicious food, and no-fail processes. Our signature 6-slice, thin crust pizza made from a 70-year-old recipe starting with a proprietary pizza dough and sauce, that tops a carefully crafted, streamlined menu. Best sellers like cheese, pepperonil and hot oil pizza satisfy family favorites while innovations, like Chicken Scarpariello, a host of salad pizzas, specialty pies like Hawaiian pizza, Mac ‘N Cheese Pizza and Veggie Pizza tempt guests looking to try something new. Our baked (not fried) chicken wings, fresh-made salads, and tempting dessert selections offer a high-quality, family friendly, affordable meal to be enjoyed at our tables, at home or on the go.

Riko’s franchise opportunities are uniquely flexible, streamlined and turn-key. And while we have refined and tweaked our business models over the past 7 years, we have retained our core philosophy; a long-standing esteem for family and relationships, quality food from our own family recipes, and warm hospitality. Our respect for guests, our employees, and our community is the cornerstone of our success.

Franchise owners and guests alike are assured of consistency with every thin crust pie. Our proprietary, simplified cooking process draws on equipment, instructions and no-fail recipes that are easily perfected by cooks and non-cooks. We boast that we can teach anyone to make our pies with our process in about 10 minutes. That typifies the thoughtful approach we have taken to all aspects of the business. We blend our strong, family-based values with a simple menu, systems, and operations to ensure quality, consistency, and success. That’s the “secret sauce” for driving success and growth while keeping Riko’s a good place to be. Contact: [email protected]

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ABOUT RIKO’S THIN CRUST PIZZA
Riko’s Thin Crust Pizza is a chain of “new generation” pizzerias located in Fairfield County, CT. Using a recipe handed down for generations; Riko’s offers authentic Italian fare using the highest quality and fresh ingredients. Known for its thin crust pizza, Riko’s also offers a full complement of salads, wings, and other menu items. https://rikosfranchise.com/index.php

ABOUT FRANCHISE GROWTH SOLUTIONS, LLC
Franchise Growth Solutions, LLC is a strategic planning, franchise development and sales organization offering franchise sales, brand concept and development, strategic planning, real estate and architectural development, vendor management, lead generation, advertising, marketing and PR including social media. Franchise Growth Solutions’ proven “Coach, Mentor & Grow®” system puts both franchisors and potential franchisees on the fast track to growth. Membership in Franchise Growth Solutions’ client portfolio is by recommendation only. www.frangrow.com Offer by prospectus only.
Contact: [email protected]

10 Simple Steps To Evaluate a Franchise Opportunity

Whether you’re a multi-unit franchisee, an individual franchise candidate or a representative of a private equity group these 10 steps will allow you to perform a preliminary franchise review. Although a first step in the franchise evaluation process, it can provide an overview of a franchise investment opportunity at minimal cost and expense.

10 Simple Steps To Evaluate a Franchise Opportunity

By Ed Teixeira – Chief Operating Officer of Franchise Grade

A good deal of information has been written and published about how to evaluate a franchise opportunity. Whether one is an individual or represents a private equity firm, it’s important to be able to evaluate and vet a franchise before conducting a full-scale analysis. The following is a way to do an initial franchise review, before investing a lot of time and money.

To perform this 10- step review, you’ll need a copy of the Franchise Disclosure Document for each franchise you’re evaluating. An FDD can be obtained from the franchisor and they’re available from certain Franchise Registration States or can be purchased from franchise vendor sites. If the decision is to pursue a specific franchise opportunity, a complete and detailed evaluation should follow this 10-step preliminary review, which should include utilizing legal and financial professionals with franchising experience.

Contributing to the 10 steps was Mario Herman, a Washington D.C. based franchise attorney.

Following are 10 preliminary steps for evaluating a franchise opportunity:

1. Franchisor Management-review the management background and experience of key franchisor executives and support staff. It’s important that they have experience in the business sector and franchise industry. Franchisor leadership should have a cross section of business skills and experience.

2. Franchisee Territory-The territory should be defined in a consistent manner and allow for franchisee growth. Verify if the franchisee territory is Exclusive, Protected or Open. Franchisors that grant small open territories can result in conflicts among neighboring franchisees as some franchisees will be more aggressive than others. There is also the potential for a dispute with the franchisor over the territory.

3. Franchisee Fees-identify if the franchisor charges other fees for services above and beyond any royalty and ad fund fees. Additional continuing fees for software usage and licensing fees, when added to royalty and ad fees will increase expenses. Be sure that the initial franchise fee and the continuing fees are comparable to similar franchises.

4. Item 20– review the growth of new franchisees and compare to franchisee terminations. This number will reveal net franchisee growth and prevent one from seeing misleading data. Also, the number of Franchises Sold But Not Opened can indicate if the franchisor is devoted more resources to selling franchise versus the growth and development of existing franchises. The tables in Item 20 contains information which can indicate positive or negative performance results.

5. Financial Statements– Unless the franchisor is a start-up there should be three (3) years of audited financials available. Look for a continuing and growing stream of revenues from franchisee royalties. Initial franchise fees should not represent the preponderance of revenues unless it’s a start-up.

6 .Required Suppliers and Rebates– Does the franchisor requires purchases from specific vendors? Compare that information to the data in Item 8, which shows the percent of purchases from the franchisor and other vendors and suppliers. In addition, does the franchisor receive rebates from vendors and suppliers and if yes, how much? Many rebates from required franchisee vendors could compromise the trust between a franchisor and its franchisees.

7.Intellectual Property-Does the franchisor have any confidential,proprietary information or trade secrets that distinguish the franchise from the competitors? Check Items 13-14 of the FDD to determine how unique the system is, and whether the franchisor has a comparative advantage over its competition. Also, does the franchisor have the marks trademarked? Make sure that the franchisor properly and legally controls the brand name, and there is no potential dispute over ownership of the marks.

8. Item 19-it’s important that the franchisor makes a Financial Performance Representation under Item 19. Any established franchisor should make an Item 19 disclosure. The more detailed the financial information the easier to evaluate franchisee performance and make financial projections. If the franchise is a startup there should be financial data for company locations.

9. Franchisor Litigation– franchisor-franchisee litigation is a barometer of the state of franchisee-franchisor relations, is it positive or negative? Has the franchisor acted to protect its system and brand or is it a case of franchisees having disputes with the franchisor, because they are not receiving support or meeting their financial expectations? Some medium to large franchisors reports no litigation while some smaller franchisors may have had many legal disputes. The amount and source of litigation is an area that should be reviewed since it be can be a red flag.

10. Franchisor Training Programs– Franchisee training should be comprehensive and presented by more than one person. Training that includes a portion of onsite training for new franchisees provides real-world franchise experience that the classroom can’t duplicate.

Whether you’re a multi-unit franchisee, an individual franchise candidate or a representative of a private equity group these 10 steps will allow you to perform a preliminary franchise review. Although a first step in the franchise evaluation process, it can provide an overview of a franchise investment opportunity at minimal cost and expense. If you decide to proceed with a specific franchise opportunity, be sure to utilize an accountant and franchise attorney to guide you along the way.
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About the author
Ed Teixeira is Chief Operating Officer of Franchise Grade and was the founder and President of FranchiseKnowHow, L.L.C. a franchise consulting firm. Ed has over 35 years’ experience as a Senior Executive for franchisors in the retail, healthcare, manufacturing and software industries and was also a franchisee. Ed has consulted clients to franchise their existing business and those seeking strategic solutions to operational, marketing and franchise relations issues. He has transacted international licensing in Europe, Asia, and South America. Ed is the author of Franchising from the Inside Out and The Franchise Buyers Manual and has spoken at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. He has conducted seminars, written numerous articles on the subject of franchising and has been interviewed on TV and radio and has testified as an expert witness on franchising. He is a franchise valuation expert by the Business Brokerage Press. Ed can be contacted at [email protected]

How Affirmations Set The Tone For Your Success

Have you created your affirmations yet? If not, take time right now to get started. Even a few positive statements can have a wonderful impact on your business to attract clients

How Affirmations Set The Tone For Your Success
This article is written and owned by Fabienne Fredrickson

If you are working to attract clients and create a positive mindset, affirmations will help get you there. What a difference they can make! In case you aren’t familiar with this mindset technique, an affirmation is a positive statement about a goal you want to achieve, written in the present tense as if it is happening right now.

The First Step is to Write Your Affirmations. You want to craft a series of positive statements about the goals you wish to accomplish. For example, you might write about your business:

– I attract clients easily and my business is flourishing and growing. – This year my income will reach $___ or higher (be specific!). – I find the ideal virtual assistant who will help my business grow.

You might also write a few for your personal life:

– I feel energetic and excited today. – Good things come easily to me. – I love my life, my family and my home.

Affirmations Need to Be Positive. Make sure these statements are written about what you want to attract or feel versus what you don’t want. For example, you want to avoid affirmations like: “In the future, I don’t attract clients who can’t afford my fee.” This sentence has two things working against it: 1) Putting the time frame out into the future vs. making it about now. 2) Talking about what you don’t want instead of what you do want.

Here’s how to turn this statement around so that it will work for you: “I attract ideal clients who pay my fee easily and get great results working with me.”

These positive statements set you up energetically with an optimistic outlook about what you want. For affirmations to work, you need to repeat them on a regular basis so they get into your subconscious mind, which is the place where all manifesting originates.

Use Affirmations Twice a Day. I recommend working with affirmations at least twice a day. In the morning after waking, you are in this foggy place where you can bypass the conscious mind and go straight to the subconscious. The other ideal time is at night when you are fading before falling asleep. Both times give you access to that part of your brain.

Try Positive Expectations. In addition, I also hold positive expectations during the day. One of my favorites is “I am positively expecting great results no matter what I see in front of me.” I have that posted everywhere in my house and office so it has worked its way into my subconscious as well. This is a powerful tool for shifting your mindset and creating the results you desire.

Your Assignment: Have you created your affirmations yet? If not, take time right now to get started. Even a few positive statements can have a wonderful impact on your business to attract clients.

You can write them every day, read what you have written daily or speak them out loud to yourself. Take a moment at the end to express your gratitude for these statements coming true.


Fabienne Fredrickson, The Client Attraction Mentor, is founder of the Client Attraction System®, the proven step-by-step program that shows you exactly how to attract more clients, in record time…guaranteed. To get your Free CD by mail and receive her weekly articles on attracting more high-paying clients and dramatically increasing your income, visit

http://articles.submityourarticle.com/how-affirmations-set-the-tone-for-your-success-356364
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Franchise or Not, here are Five Steps To Raise Your Rates AND Get New Clients

When was the last time you raised your rates? If you’ve had the same pricing for more than one year, you may want to consider taking an increase. By following the five steps listed below, you can actually get clients while raising your prices.

Five Steps To Raise Your Rates AND Get New Clients
This article is written and owned by: Fabienne Fredrickson

Have you been thinking about raising your rates? That can be both exciting and nerve wracking for business owners. On one hand, you’ll produce more income from the same amount of work. On the other hand you may be concerned by the risk of losing clients due to higher rates. While this may be true, there are best practices for handling a rate increase that, if done well, can get you new clients!

1. Give prospects on your list advanced warning. I recommend that you announce a coming rate increase two-three months in advance. This gives you a great reason to check in with prospects and see how they are doing on their own and if they might be ready to work with you.

2. Use a variety of communication methods to announce the rate hike. Sometimes you have everyone on your email subscriber list. Other times you may have phone numbers or a physical addresses. It’s perfectly alright to make this announcement in several ways. You can email, call and send hand-written notes to prospects – whatever way you have to communicate with them, do it. You can even consider sending the information multiple ways to people to catch their attention.

3. Explain getting “grandfathered” in at old rates. Let people know that if they choose to work with you before the increase, they will be covered by the old rate like your current clients. This can help incentivize prospects to become clients in two ways. They don’t feel trapped because you’ve given them plenty of notice and it makes people get off the couch a little faster so you get clients.

4. Ask questions to create the need to work with you now. Sometimes prospects think they don’t need to work with you even though their current situation demands change. To help people open up to the idea, ask them what’s not working right now. This can plant a seed and inspire prospects to work with you now due to a current need and to avoid a price hike.

5. Tell new prospects about increased rates. As you meet new prospects, share your new rates with them. For those who choose not to work with you, add them to your subscriber list. Then announce your coming price increase in an email, which tells everyone including your newest prospects how they can still get in at the current rates. This can act like a back-door incentive for newer prospects, motivating them to get started now before prices go up.

Your Assignment: When was the last time you raised your rates? If you’ve had the same pricing for more than one year, you may want to consider taking an increase. By following the five steps listed above, you can actually get clients while raising your prices. This process has worked for me and many of my students. So have no fear about the price increase you are dreaming of.


Fabienne Fredrickson, The Client Attraction Mentor, is founder of the Client Attraction System®, the proven step-by-step program that shows you exactly how to attract more clients, in record time…guaranteed. To get your Free CD by mail and receive her weekly articles on attracting more high-paying clients and dramatically increasing your income, visit “>http://www.clientattraction.com

http://articles.submityourarticle.com/five-steps-to-raise-your-rates-and-get-new-clients-361950

Debunking The Franchise Myths

Franchisees are highly motivated and take a pride of ownership that is difficult to instill in someone with nothing on the line. Secondly, franchisees, by their nature, are often “lifers,” staying with the company sometimes for generations.

Debunking The Franchise Myths

This article is written and owned by Mark Siebert

Franchising harbors its share of misconceptions; for example, that franchising is a legal minefield simply waiting to explode on some unsuspecting franchisor. The fact of the matter is that franchising need not be any more litigious than any other endeavor and, in fact, may be considerably less so.
Let’s start with the disclaimer. Anyone can sue anyone else for seemingly anything—including the coffee spilled on one’s lap—so there is no absolute proof against litigation.That said, it is important to understand a few reasons why franchising is actually less prone to litigation.
First of all, the typical franchise contract is a very one-sided document. And, if written by an attorney who specializes in franchise law, it is likely to afford you a great deal of protection.
Over the years, the litigation centering on franchising seems to have come in waves. Some years ago, there were a number of cases involving the proper use of advertising funds. As decisions were reached and case law established, we saw fewer and fewer such lawsuits. Later, we saw several lawsuits on the issue of territorial encroachment. And again, as decisions were reached and case law established, fewer such lawsuits occurred. Why have these wavers subsided? Because the lawyers who specialize in franchising have followed these cases closely and have learned how to write clauses in their contracts that allow franchisors to avoid such litigation.
The two issues that always remain ripe for litigation, of course, are violations of franchise law and fraud in the inducement of selling a franchise. But even these issues can be largely inoculated against. First and foremost, train all your people on franchise law and, of course, hire a good franchise attorney. Be sure everyone on your staff is scrupulous in their honesty. Mystery shop your sales force. And, of course, ask each and every franchisee in their closing interview about the sales process and any representations that were made. Many franchisors will use a written “closing checklist,” and some have gone as far as videotaping those interviews. And, lastly, institute a no tolerance policy if you do find any infractions.
On the upside, franchising affords you a significant “liability tradeoff.” In other words, when making a decision about franchising versus company-operations, you need to consider the litigation exposure you are avoiding as a part of this same equation.
Yes, as a franchisor, you gain some potential contractual liability with each franchise agreement you sign. But consider the alternative of company-owned operations.
With company-owned operations, you have the liability for every lease you execute—whether it’s for equipment, a vehicle or a building. In franchising, that liability is the franchisee’s. With company-owned operations, you have the liability for every employee you hire—personal injury, sexual harassment, discrimination, employment law, crime in the workplace … the list goes on and on. Again, with franchising, that employment liability is largely that of the franchisee. The same holds largely true for customer liability—everything from breach of contract to personal injury.
To be clear, franchising may not stop someone from suing you, but if you have a well-written contract and a well-written operations manual (allowing you to avoid claims of negligence and inadvertent agency), the liability will likely be limited to the franchisee. Add to that other protections (such as the requirement of the franchisee to obtain insurance coverage and name the franchisor as the co-insured), and it becomes readily apparent that significantly more liability is associated with the growth of an equal number of company operations.
The second big myth in franchising involves control and the improved unit-level performance that some argue comes with it.
Both independent studies and our own observations of franchisors have repeatedly shown that similarly-situated franchisee-operated sites typically outperform their company-owned counterparts in almost every imaginable category—from revenue to perceived cleanliness to customer satisfaction.
Why?
Two reasons: First, franchisees are highly motivated and take a pride of ownership that is difficult to instill in someone with nothing on the line. Secondly, franchisees, by their nature, are often “lifers,” staying with the company sometimes for generations. Instead of constantly training and retraining and hoping for the best, franchisees develop a depth of knowledge and experience that is virtually impossible to replicate in a company-owned operation at the unit level.

About Mark Siebert:
CEO & Sr. Franchise Consultant
iFranchise Group
http://www.ifranchisegroup.com/

A franchise consultant since 1985, Mr. Siebert founded the iFranchise Group in 1998 as an organization dedicated to developing long-term relationships with successful franchisor clientele. Mr. Siebert has worked with hundreds of franchisors, from start-up operations to corporate giants. He is an expert in evaluating companies for franchisability, structuring franchise offerings, and developing franchise programs. The strategic planning recommendations developed by Mr. Siebert have been instrumental in the growth and success of numerous national franchisors.