Franchising

When thinking about purchasing a cleaning franchise you ought to first mull over what type of responsibility you would like in the business along with the style of trading that interests you. There are numerous types of cleaning franchises in the UK and various unique offerings to markets.

Types of cleaning franchise opportunities go down predominantly into two groups.

Business to Business (B2B)

B2B is where businesses are giving provision of services to other businesses. These cleaning franchises are more often than not operated by white collar executives. This attitude to franchise business building requires a robust sales focal point and professional approach as well as the ability to present tenders for work to customers.

Business to Consumers (B2C)

Business to Consumer is where the cleaning franchise owner provides services to the householder. This form of franchise system is on the whole for individuals that like better a more hands on method. Franchise business owners should take pleasure in practical work and be especially friendly and obliging to deal with.

One main advantage to purchasing and building a Business to consumer cleaning franchise opportunity in the household marketplace is that it normally demands less start up and trading investment to develop. This is because the household market pays on the day of the job so cash-flow is generally especially good.

One main advantage to investing in and building up a Business to business cleaning franchise is that the business has more scope for expansion. This is because employing a workforce to bring front line services helps to ensure the business more scalable for development.

Speak to franchisers and franchisees

When thinking about investing in a cleaning franchise business it is essential to look into and take into account a number of things.

• Firstly, take into account the brands and services available. Think about if they interest you?
• Secondly, take into account the outlay of the franchise investment and set up expenses, are they within your range money-wise.
• Thirdly, request further information concerning the brands you have found of most interest and read it wisely.
• Fourth, create a short list and pay a visit the franchises for sale of your choice. Get together with the key people and look at the support facilities.
• Fifth, talk to franchisees and find out if they are content using the brand and if their business has been affected through the economic downturn.
• Sixth, acquire a copy of the legal contract and take it to a British Franchise Association solicitor for guidance.
• Seventh, talk to your bank regarding bank account set up and finances. For the most part banks have professional franchise departments that will assist to give advice to your local manager.
• Lastly, identify which cleaning franchise business franchise is best for you. Sign up, get trained and follow the brand's established system enthusiastically for best yield on your time and initial investment.

A franchise agreement will usually specify the given territory the franchisee retains exclusive control over, as well as the extent to which the franchisee will be supported by the franchiser. it is duty of franchiser to give training and marketing campaigns.

The franchiser typically earns royalties on the gross sales of the franchisee. In such cases, franchisees must pay royalties whether or not they are realizing profits from their franchised business.

Cancellations or terminations of franchise agreements before the completion of the contract have serious consequences for franchisees. Franchise agreement terms typically result in a loss of the sunk costs of the first-owner franchisees who build out the branded physical units and who lease the branded name, marks, and business plan from the franchisers if the franchise is canceled or terminated for any reason before the expiration of the entire term of the contract.

There are great franchise opportunities and advantages for the new entrepreneurs who want to establish the business with all essential managerial prospects by training, supporting and mentoring all the financial issues of the franchisees.

The best and appropriate franchise ideas not only enhance the operating systems of the franchisees but also give a new trend to the profitable earnings by endowing the ownership to the franchisees.

Best franchise ideas focus on the developing and running the business without any hindrances in starting up the small business enterprises.

Franchise ideas small business have given a new orientation to the directorates of the corporation how the franchisees should avail the franchise opportunities in an accomplished style. It is the main objective of the home inspection franchisers to drive the massive traffic of the potential customers to invest and spend the huge amount of the capital for the maintenance and establishment of the business.

Franchise ideas small business offers the profitable and remarkable features for the potential buyers to be inclined to invest more likely in the running franchises with the great productivity.

Franchise ideas refer the programs to purchase and develop more and more exclusively all kinds of franchise ship with complete inspection and consultation with the expert and professional franchisers.

You may devise very appropriate franchise ideas to avail the greatest franchise opportunities for the settlement of the business very proficiently. You have to establish the small business with the least investment by running franchises of the different brands as you may directly get ownership if you contact the owners of the corporate and may earn the huge amount of the profits.

What does it take to be a franchisee? How much does it cost? Will it work in my area? These are just a few questions that arise when discussing franchise ownership. Is franchise ownership for you?

Franchising involves a symbiotic relationship between franchisee and franchiser. Franchisees give expansion, extra profit, as well as increased brand recognition. The franchiser gives basic know-how, supply chain, brand name, and ongoing support for the franchisee.

Franchising has become a profitable and strong business system in today's world. In the world, franchising symbolizes about only a tenth of the total number of the businesses, yet franchises hold nearly 40% of the market sales.

There are lots of types of franchise agreements and they differ on amount of participation that the franchiser will make and the amount of start up capital. There are a variety of franchises, such as those with a retail environment, including a lease and employees, or those that you can work from home. Your investment will vary depending on the type of franchise you like. You can invest in franchises for as little as $20,000.00 up to $1,000,000.00.

Franchising is a valid alternative to independent ventures. The idea of a franchise is that you are able to follow a system of success, and put that system into motion. When investing in a franchise, you will receive a model and training from the franchiser. This guidance will help you get a good start in your new franchise and offer you a plan of attack.

In my opinion Franchising is the best way to go if you are exiting the corporate world and desire your own business. You are provided with an easier start up and direction. It is normally suggested that a franchisee have some basic knowledge & interest in a business he is going into. Starting any business is tough, but with the right passion matched with the right franchise, franchising has been proven to be a great way to get started and move through the start up months with confidence.

During your evaluation period of your new franchise opportunity, look for assistance from a knowledgeable person. Part of your due diligence will be to discuss with current franchise owners. You can speak to them on the pitfalls and benefits of a particular franchise. As a potential franchisee, you will be offered a FDD, which outlines all the workings of the franchise and who is responsible for what. The FDD is a legal document designed to give the potential franchise owner information that will assist them with making an informed decision.

In conclusion, franchising is strong as ever, with good support, a model of success and a natural path for those that are looking for something after their corporate experience. Take a look and see if franchise ownership is for you.

Companies look for strong, focused and well-trained individuals to join their network of franchises. Franchise owners can become a powerful force for a successful franchise company, or be destined for downfall if they put the prosperity of the franchise company at risk if they don't market or manage their products and services carefully.

Before you dive into the world of franchise ownership, ask yourself these five questions to determine if you have the skills, background and financial ability to be successful:

1. Are you financially prepared for franchise ownership? In addition to the start-up franchise fee and expenses you'll need to get the business off the ground, franchises need to pay marketing and royalty fees to the franchisor. Many franchise companies also have minimum net worth requirements for prospective franchises, so make sure you have the ability to raise capital either privately or through financing.

2. Are you dedicated to salesmanship? A franchise owner is at ease when dealing with customers and is enthusiastic and capable of having effective communication with them. A background rich in marketing and customer service can help you achieve your sales goals by using your instincts to make important decisions and cultivate your strategy for success.

3. Have you done your research? Potential franchise owners must do their homework to consider the type of franchise they should own, based on their personality, experience and what they can afford. Be sure to read all the disclosure documents that supplied by the franchisor. Talk to current and former franchise owners to get an understanding of the state of the business and what the day-to-day operations are like. Discuss your conclusions with a franchise lawyer for guidance on whether this particular investment is right for you.

4. Are you committed to supervision and management? Franchise owners aren't creators or innovators. They follow rules under a structured business model. Franchisors are looking for potential franchise owners who can take instruction and want to become part of a well-oiled machine that has proven procedures and policies. Depending on the length of your contract, you'll be working with the franchise company for many years. Knowing your role in the franchise system is key to a good relationship with the franchisor.

5. Are you dedicated to do working long hours and doing whatever it takes to make the business succeed? A franchise owner must be driven and have the endurance to work hard and long. Commitment to being an entrepreneur can be exhausting, but with enthusiasm, franchise owners can get through the rough times and slow business phases in order to taste victory. Sometimes, after you pay your weekly expenses, there won't be enough money left over for you. Sometimes you'll make a nice profit. There are ups and downs in franchise ownership and you have to remain dedicated through it all.

All franchise owners want their franchise to be successful. That level of success starts from the time you choose your franchise. Whether you are new at your franchise business or not it is always important to keep striving to become better. You should always be striving to make your franchise business better and more successful. The best way to make and keep your franchise successful is to use the skills you already have!

Owning and managing a franchise takes skills in many different areas and time. If you want your franchise to be successful you will have to invest a certain amount of time into it. You will also need to have what it takes to manage the franchise. You will need certain business skills, people skills, management skills, computer skills, and much more. Choosing what type of franchise will have a big effect of your success as a franchisee.

When you first begin to start a franchise you need to begin by using the skills you already have. It is important that you know what you are getting in to. Also you should know what you can and can't do as far as choosing which franchise to begin. You need to choose a franchise that you know you have at least some of the necessary skills needed to run the franchise successfully. If you do not already have some of the needed skills for the franchise, you will be setting yourself up for franchise failure. If you do not already have some of the skills needed you will be spending a lot of time learning about your type of franchise instead of learning about your franchise business system and how to make it successful. If you don't know anything about pool cleaning, but know a lot about vehicle repairs, it would be most wise to choose a franchise in the auto body field rather than jumping into a type of franchise you know nothing about!

Once you are running the franchise don't forget about the skills you already have. It is likely that you have acquired skills that will help make you successful in your franchise. Make sure that you utilize them. Don't get caught up in what others are telling you to do and not do. Take the time to think about it and see if you already have some ideas that would be helpful. If you have really great people skills make sure you take advantage of that skill in every way possible. If you have management skills then use that. You need to already be strong in some way that way the rest will come with time and a little will.

Have faith in yourself. Know that you can own and manage a franchise business. Remind yourself that you are capable and that you have what it takes to make your franchise successful! Your franchise can be successful. You must take control and use all the tools and skills you have to make it a successful franchise business!

Many landlords tend to view a franchise as either a chain store tenant or an independent operator - a perception that can cause problems in franchise lease negotiations. To understand the key issues, start by examining the concept of franchising. The International Franchise Association reports 35% of all retail sales are from franchised businesses. What is it about this business strategy that has made it so successful?

1. Marketing clout to penetrate and dominate markets
2. Brand-driven consumer purchases
3. Consumer loyalty to the brand
4. Consistently applied operating system that addresses consumer needs
5. Ongoing support that improves the effectiveness, efficiency and profitability of each unit and the overall system
6. Franchisee motivation.

In short, the reasons franchises are successful are much the same as the reasons chain stores are successful; franchises look and perform like chain stores. But a key difference lies in reason number six above; the franchisee motivation.

TENANT MOTIVATION

The franchisee has a much greater motivation to succeed than does even the best store manager. A franchisee has made a significant financial investment in the assets of his or her business. He or she has made a conscious choice to be self-employed and sees being part of a franchise system as a way to achieve life goals. That franchisee will do everything possible to ensure the business succeeds; and the franchisee-franchisor relationship differs dramatically from the chain store's employee-employer relationship.

Franchising is a mutually beneficial business relationship based on a legal structure. Franchisors must comply with federal and state regulations, which in most cases make it impractical to negotiate the terms of their franchise agreements. The better a landlord understands a franchise tenant, the easier it will be to negotiate a lease.

FRANCHISEE ON THE LEASE

Landlords often want the franchisor to sign the lease for the franchisee, but most franchisors are not in the property management business. They do not have trained staff to handle these matters. Franchisors prefer to be sent duplicate default notices so that they can help cure the default. If the default causes a termination, the franchisor would like the option to come in and operate the business until it can find another franchisee. This agreement keeps a store from going dark and maintains rental income.

ASSIGNMENT or SUBLETTING

A franchisee does not own his or her business. A franchisee is granted a license to operate a business and only owns the assets of the store, while the franchisor owns the trademark and the operating system. If a franchisee wants to sell the franchise rights, he or she must get approval from the franchisor to transfer those rights before selling the assets. To customers, the business appears to be the same. Understandably, landlords do not want a tenant to develop a short-term business and sell it. But a franchise ensures the landlord that the business is operated uniformly and consistently with all other stores in the franchisor's system, even under a new franchisee.

LEASE TERM

Most retail franchises have 10-year terms. Franchisees cannot renegotiate the term of their franchise agreement; the agreement is typically nonnegotiable and uniform throughout the franchise system. Franchisees frequently get financing through their bank, which offers 10-year loans in harmony with the franchise agreement. Franchisees need to have a lease that is compatible with their franchise agreement and business loan. This is where the landlord needs understanding of the full situation.

ADVERTISING REQUIREMENTS

Landlords of shopping centres typically require tenants to spend some percentage of gross sales on advertising. Franchisors also require their franchisees to advertise. Landlords need to acknowledge this and allow the dollars spent with the franchisor to apply to the lease-required advertising. Often, franchisees can purchase expensive advertising (TV, radio, newspaper) through their franchise advertising fund and make a greater impact in their local market.

TRADEMARK/STORE DESIGN

Franchisors have registered trademarks and distinctive store designs. That is part of their brand image; conformity and standardisation contributes to the franchise's success. Franchisees are required to build their store according to the franchisor's specifications without changes. Landlords must respect that identity and not alter the look so that it becomes unrecognisable to the customer.

MULTIPLE LOCATIONS

Landlords who own multiple shopping centres often negotiate multiple occupancy sites with a tenant. Some landlords tie a deal for a choice location to a lesser site. A chain retailer can choose to agree to such a deal because all of its stores contribute to the corporate profits and the impact of one store can be mitigated by the performance of others. When a franchisor is negotiating for several franchisees, the franchisor cannot agree to a below-average location because each franchise store stands on its own. Each franchise is a single investment and must be able to cover its own expenses and generate enough profit to justify the initial investment.

USE CLAUSES

These special clauses need to strike a balance between the landlord's need to protect the centre's merchandise mix and the franchisee's requirement to provide all the goods and services that other franchisees offer. Franchisors spend a lot of time and money developing new products to enable franchisees to keep up with customer demands and increase profitability. If a franchisee is prevented from offering additional goods and services, the store will seem out of date and limited by comparison to the other franchises in the system. The use clause needs to be flexible enough to allow for changes in the operations of the franchise within reasonable limits, or both the franchisee and the landlord will suffer.

BENEFITS OF FRANCHISES

Franchises combine the best attributes of a chain store and an independent operator. They offer a brand name, a proven operating system, corporate support, advertising programs, consistency and standardisation much like chain stores. In addition, franchisees offer the same motivation and responsiveness to customers' needs and demands that independents do. As a landlord you can have the best of both worlds. Remember, a new franchise opens every 16 minutes. If you don't get that franchise tenant in your centre, someone else will.

The Indian franchising industry has seen robust growth over the past decade. In spite of the economic recession, the annual growth rate of the franchising industry in India has remained positive and is currently pegged at 30%-35%. The success of the franchising story in India is a testament to the huge potential and promise that India holds for the franchising industry.

In India, franchising has gained considerable popularity in numerous sectors, such as, education and training, healthcare and wellness, information technology services, and in particular, the retail sector including, food and beverage, fashion and lifestyle, etc. However, franchising of products and services in India is still in its infancy thus presenting to interested foreign enterprises a vast untapped business opportunity.

A fast growing middle class population with a faster growing disposable income and propensity to spend is one of the paramount reasons for the mushrooming of the franchise industry in India. Additionally, the entrepreneurial character of India's population and increased brand and quality awareness amongst urban consumers provides another impetus to franchising in India.

Apart from a huge consumer base, next only to that of China, exposure to international standards of goods and services and availability of skilled, technology savvy and relatively cheaper human resources, India has one of the fastest growing retail sectors. As per Business Monitor International's India Retail Report for the third quarter of the financial year 2010, retail sales are expected to grow from $353 billion in 2010 to $543 billion in 2014. Clubbed together, these factors present a highly lucrative business opportunity for foreign enterprises wishing to franchise their business, brands, or their products.

Franchising is a relatively modern distribution channel that permits foreign brand owners to exercise a substantial degree of control over the manner and mode in which their products or services are offered and sold to consumers. It ensures efficient and rapid trans-border market penetration to the Franchiser, an opportunity to take its brand beyond boundaries with minimum capital investment and risks.

Simply put, a franchise is a business model premised on a license granted by one entity (the 'Franchiser') to another (the 'franchisee') permitting use/exploitation of the Franchiser's intangible assets such as brand/trade name, business model and concept, image, marketing techniques and other intellectual property for the purpose of making sales or providing services in a defined geographic location in return for a sum of money.

India does not have a consolidated legislation regulating franchising, although private sector bodies have been lobbying for enactment of franchise specific legislation. Some key laws which impact franchising in India include the Indian Contract Act, 1872, the Competition Act, 2002, the Trademarks Act, 1999, the Copyright Act, 1957, the Patents Act, 1970, the Consumer Protection Act, 1986, the Foreign Exchange Management Act, 2000, labour and taxation laws.

Importance of a Quality Franchise Agreement

'Quality' in any agreement, regardless of its subject matter, is, inter alia, seminal for mitigation or avoidance of disputes between contracting parties. 'Quality' of an agreement may be assessed on numerous parameters including: clarity in purpose, holistic/loophole free character; unambiguous provisions/terms/conditions with no scope for contradiction; manner of presentation; and most important enforceability.

A 'franchise agreement' is a contract between the Franchiser and the franchisee which defines their relationship and inter se rights and obligations.

'Quality' assumes even more significance in a franchise arrangement due to the inherent commercial and operational complexities present in such arrangements. A quality franchise agreement must effectuate the underlying symbiotic relationship between the Franchiser and the franchisee.

A quality franchise agreement must ensure clear, unambiguous and water tight coverage of all critical issues, such as, roles and obligations of the parties, confidentiality and intellectual property protection; payment terms and taxes; duration, renewal and termination; agency issues; post termination issues; negative covenants; governing law and jurisdiction (especially in international franchise arrangements).

A good franchising agreement should in addition ensure that quality control mechanisms do not flout India's competition laws. For instance, in certain situations a provision obliging a franchisee to source products exclusively from the Franchiser or any other specified entity may be regarded as anti-competitive and in contravention of the provisions of the Competition Act, 2002.

Naturally, the importance of a quality franchise agreement for a Franchiser and a franchisee differs considerably as discussed below.

The Franchiser's Perspective:

The importance of a quality franchise agreement for a Franchiser cannot be stressed enough. Of paramount importance for the Franchiser is protection of its brand, image, reputation, know-how, business concept and other intellectual property rights as well as limiting exposure to potential risks and liabilities resulting from the franchisee's conduct.

It is important that the franchise agreement is carefully drafted to ensure clarity on duties and services of the franchisee including in the areas of investment and infrastructure, adherence to specific operating guidelines to maintain uniformity, reporting requirements, quality maintenance; annual market penetration targets; financial returns such as royalty and fee payment, etc.

A quality franchise agreement should provide adequate fetters and security against misuse of the Franchiser's intellectual property rights by the franchisee. Further, it must provide enough quality control mechanisms to the Franchiser, including control over managerial discretion of the franchisee, to enable it to control its business concept and protect its brand and reputation. Consequently, the franchise agreement must unambiguously and comprehensively address vital issues, such as, the temporal and territorial scope of the license, the rights and property licensed, nature of the license, restriction on use of licensed rights and property, quality control measures, including periodic audits to ensure that the business concept is adhered to, sourcing of products, training, type of products to be sold under the franchise, etc. The business concept being licensed and mode and manner of operation must be clearly stipulated to enable the franchisee to conform to it. However, the downside of excessive control over a franchisee and franchised products is that the Franchiser may become susceptible to liability for acts of the franchisee in claims by third parties. A quality franchise agreement should ensure that the relationship is on principal to principal basis and the Franchiser is not liable for the franchisee's acts and omissions.

Another crucial issue for the Franchiser is protection from competition by its franchisee. It is common practice to include non-compete covenants during and post termination in most franchise agreements. However, a quality franchise agreement, like any other agreement, must have a carefully crafted non-compete clause to ensure that it is enforceable under law and not a redundant term. Unreasonable post termination non-compete clauses which are against public policy and in restraint of trade would be enforceable.

A quality franchise agreement should ensure that the franchisee conforms to the business concept. It must have stringent provisions to deal with situations of breach and non-adherence to the business format and misuse of brand by the franchisee. Also, the franchise agreement must protect the revenue flow from the franchisee to the Franchiser.

Issues related to governing law and jurisdiction, post termination obligations to ensure protection against breach of confidentiality and intellectual property, inventory handling are equally critical and need to be adequately addressed in a franchise agreement to ensure effective control and systematic business expansion.

The Franchisee's Perspective:

'Quality' is as serious an issue for the franchisee as it is for the Franchiser. As the initial investment in the venture is that of the franchisee, a quality franchise agreement is essential for a franchisee to capitalize on its investment.

For a franchisee, a quality franchise agreement must have clearly defined payment terms with no hidden fees or costs and a clearly defined area of operation. It must protect the franchisee from infringement of third party's intellectual property rights due to use of Franchisers intellectual property by the franchisee. Further, the franchise agreement must enable the franchisee to optimally leverage the brand and other intellectual property rights licensed by the Franchiser and ensure continuity of supply (wherever applicable). Therefore, a clearly and properly defined business concept and format is as important for the franchisee as it is for the Franchiser. It helps the franchisee avoid implementation issues and ensure profitability of the venture. A quality franchise agreement should enable the franchisee to extract maximum support for implementation of the business concept from the Franchiser by way of training, up-gradation of concepts and evolving technologies, etc. The relationship between the Franchiser and the franchisee should be that of independent parties and the agreement must be carefully drafted to avoid an inference of agency.

Thus, a quality franchise agreement is the very fulcrum upon which the success of a franchise rests which by itself underscores the importance of 'quality' in franchise agreements.

Seema Jhingan

As economic downturns continue on a global scale, more and more people are starting to think twice about investing in a franchise. Despite the recession, a lot of top franchises remain remarkably strong within their respective industries. This only shows that prospective entrepreneurs have nothing to worry about owning a franchise business, especially if their chosen franchisor already has a proven track record of success and profits in its industry. The following list is a compilation of the top 10 franchises.

1. Subway

Subway is definitely one of the fastest growing franchises in America. Within the US alone, the number of Subway franchises is now around 22,000. Subway branches in other countries total to about 10,000. These franchises are situated in small areas of various cities, which prove the success of the company's excellent marketing strategy. Subway is this year's number one franchise pick as it continues to open new locations weekly.

2. McDonalds

Today, the McDonalds franchise has around 12,221 locations in the United States, 1,070 in Canada, 12,510 in foreign countries, and 6,357 within company-owned locations. With its impressive and established marketing and advertising programs, the worth of McDonald's current franchise range from $995,900 to $1,842,700, with franchise fees of $45,000.

3. 7-Eleven

Started by Joe C. Thompson in 1927, 7-Eleven Inc. convenience stores opened across the globe with more than 30,000 branches in total. The start-up cost for a 7 11 franchise ranges from $40,500 to $775,300, with additional franchise costs of $10,000 - $611,600.

4. Hampton In

The fourth name in the list of 2010 top franchises is the Hampton Inn. Due to the current recession, a lot of consumers started looking for an alternative to five star hotels for their travel and accommodation needs. So far, the Hampton Inn, which is a mid-priced hotel chain, proves to be the best option. Today, Hampton Inn franchise has about 1,595 locations in the country and around 70 branches elsewhere.

5. Super Cuts

Super Cuts now has 1,027 franchises within the country and one franchise in Canada. The Super Cuts franchises are typically located in strip malls. The company's growth rate is quite slow compared to the others in this list, but its growth is remarkably steady and consistent for the recent years.

6. H&R Block

H&R Block belongs in the tax preparation and electronic filing field. It currently has 3,999 franchises across the country, 418 franchises in Canada, and 85 foreign franchises around the globe. These remarkable figures earned the H&R Block franchise the sixth spot in this year's top 10 franchises list.

7. Dunkin' Donuts

Widely known for its doughnuts, coffee, and baked goods, Dunkin' Donuts come in seventh place in the top 10 franchises list for 2010. It has about 6,400 locations in the US and 8,800 locations around the world. The Dunkin' Donuts franchise is expected to continuously grow and expand for the next 20 years.

8. Jani King

Jani King is included in the list of top franchise opportunities based on its solid track record of success and growth. The company provides commercial cleaning solutions; thus its famous motto, "Everyone needs to be clean". The Jani King franchise has 11,000 locations within the US and around 12,000 locations in other countries.

9. Servpro

Established way back in 1967, Servpro is generally a painting enterprise. It offers services such as cleanup, repairs, and disaster restoration. Servpro franchise earned the ninth spot in the top 10 franchises list of 2010, with about 1,500 locations in the United States.

10. ampm Mini Market

ampm is quite popular among youngsters for its delicious hotdogs and cold beers. The ampm franchise now has 3,000 locations across the globe and an additional 1,100 franchises within the United States.

Now that you know the top 10 franchises of the year, would you consider investing in any of these franchise opportunities?

Just a few years ago, franchise businesses were opening up on every corner of this country - not to mention around the world in emerging markets. One of the reasons was that it was fairly easy to get financing for a franchise purchase and development.

But, when the great recession hit, nearly 90% of all franchise funding went away, and many past lenders and current banks are still not picking up their franchise lending.

Why? Only those lenders know.

However, on the other side, the franchise industry has remained one of the fastest growth industries - even in the face of this poor economy. Franchises are a very easy path to entrepreneurship. Franchises offer proven business models, established procedures, name brand recognition, economies of scale, as well as shared marketing might.

All key aspects to any business's long-term success and items that may take years or even decades to develop on your own.

So, if the number of franchises are growing and growing quite well, how are they getting financing to do it?

Let's first begin by understanding what is required to purchase and thus finance a franchise.

Franchises come in all shapes and sizes. You can purchase a right to franchise for as little as a $1,000 (one that you would probably run out of your home) to several million dollars (one that would require a huge building and lots of equipment).

Now, to finance these businesses, most lenders will look at several things with the most important being credit and cash flow.

Credit and Cash Flow:

Your credit does matter - it always has and always will. Thus, if your credit is not up to par - start here to get it fixed. It does not matter if you are trying to borrow a thousand dollars or a million, without solid personal credit you have no chance - period.

Regarding cash flow. Your franchisor should be able to provide average revenues that each franchise should be able to earn yearly. Lenders will then evaluate these numbers and try to determine if you (the borrower) have the experience to meet those averages.

Down Payments:

Most lenders require a down payment for a franchise purchase. It is essentially a way to share the pain and the risk. This down payment can range from 10% of the purchase price to 30% or more with the average being around 20% to 25%.

This means that you have to come to the table with some money and be able to legitimately prove that you have those funds and where they came from (no lender will lend to you, say 80% of the amount needed, knowing that you already borrowed the other 20% - just too easy for the borrower to walk away without any real skin in the game).

Collateral:

Given the current economy and the state of lending to small businesses - especially unproven franchisees (the franchise system is proven, the new owner is not in the eyes of lenders) - collateral requirements are climbing. Thus, what use to take just 30% or 40% in collateral value to back a franchise loan could now take 50% or more.

This means that when seeking franchise loans be willing to either put up the plant and equipment your franchise will be buying with the loan funds or be willing to provide additional collateral like your personal home or other personal assets.

Financing Options:

SBA Loans

The SBA loves franchises. Not only are these usually proven business models, they come with a huge support and mentor system - items that the SBA think are key to business success.

But, more than that, the SBA offers numerous funding programs for all types of franchises. Some programs are more geared towards franchises that require a lot of property and equipment, some programs are designed for labor intensive franchises, some programs are designed for exporting and international trade businesses / franchises and some are designed for veterans. Plus, the SBA offers working capital funding programs which typically tend to be some of the hardest business loans to acquire given that most new businesses do not have a lot of financial assets to back the loan.

Community Development Loans

Also in conjunction with the SBA's 504 business loan program, community development loans are great financing vehicles for franchises needing to finance commercial property and equipment (items that can be collateralized).

These programs can also reduce the amount of a down payment that a franchisee will need.

Example: Let's say that your new franchise needs to purchase $500,000 worth of property and equipment. For a traditional business loan and even some SBA loan programs this means that you would have to come up with a down payment of some $100,000 - which is quite hefty.

But, with community development loans, that amount could be cut in half.

Under these programs, the borrower would provide as little as 10% of the loan amount. The community development corporation would provide 40% and a SBA loan provider would provide the remaining 50% -- essentially spreading the risk and reducing the up front outlay of the business owner.

Plus, these community development corporations already work with many SBA approved banks and lenders - not requiring the franchise owner to have to track these resources down.

Retirement Funds

Retirement funds are usually earmarked for those golden days when one can stop working and really enjoy all they have worked for. Well, owning a franchise can do the same thing by providing a solid financial future to the owner and possibly their heirs.

The goal with retirement investing is to leverage small amounts of current income (monthly or annually) for huge appreciation in the future. You invest $100 per month for thirty years for a total outlay of $36,000 in hopes of growing that sum to half a million or more.

Investing in your own franchise can do the same thing. You leverage your retirement funds today, for future cash flow - cash flow that can be re-deposited back into your retirement fund or used to create your future financial security.

Thus, taking, let's say $100,000, out of your retirement fund to purchase a franchise today that could turn into 3X, 4X, 5X or sky's the limit in the future.

Even if you don't have enough in these accounts to fund the entire franchise purchase, these monies could help satisfy the down payment requirement for you to secure the needed business loan.

To invest your retirement funds into your franchise, you simply create a new C-corporation that will operate the franchise. Then direct your retirement fund to invest in that new C-corporation.

The best part here is that this is not a loan. Thus, no payments and no interest are required.

Home Equity Loans

While these home equity loans are still a bit hard to get as most mortgage lenders are only looking to fund a home's purchase and not a second or equity loan, they are still out there. And, with interest rates remaining at record lows, can provide a great way to cheaply finance your franchise or at least to come up with your required down payment.

Combining Options:

For most franchises these days, finding a single, all inclusive loan is nearly impossible. Thus, most new franchise owners have to find individual business loans for individual needs. When seeking to purchase property and equipment, look to a SBA loan program. When seeking working capital or inventory financing, look to home equity loans. And, when seeking down payments or overall business development, look to those retirement funds.

Franchising is a great way to enter the world of business. They provide tons of benefits with the most important being that they can be up, running and profitable in no time flat.

However, financing that franchise purchase might be another story. While all small business financing is harder to get these days - it is not impossible. You just have to get a bit creative and be willing to take some personal risk - which in the long-run might just be the difference between success and failure. If you have a lot at risk, you just might work a little harder to succeed.

Franchising can represent a good choice for many people as it could effectively be a type of supported self-employment. Although a franchise system has a business ownership option, the franchise owner should typically provide training and on going support aside from a demonstrated franchise system on which to build a business.

How then could you find the very best franchise opportunity for yourself? What could be the key factors that need to be considered?

Established System

The heart of a franchise business is its proven system. By piloting a small business idea, a franchisor will demonstrate that their business prototype and formula works and is lucrative. This may then be replicated by any person who wishes to purchase into the franchise business proposition and dedicate themselves to sticking to the proven system. Take a good look at the franchise business idea and look to see if it has a proven track history.

Track record

The track record is generally established by talking to the franchise owner and requesting information of their pilot businesses and their performance. Contacting any current franchisees is also important to find out how the franchise business is functioning for them and if they're operating profitably. It's also possible to consult the franchise departments of a few of the major high street banks. If they have knowledge of the franchise business, and are presently lending finance to current franchisees, this is a positive sign.

Finance

Its also crucial that you consider what you may have the funds for. Any investment investment you've got to hand, might possibly be combined with any lending that a bank can offer, so chat to a few of the main high street banks concerning financing to evaluate what your purchase potential is. This will assist you to explore franchise offerings that meet your financial constraints and not throw away time considering those you cannot come up with the money for.

Gut Feel

Its also vital that you meet the franchise owner face-to-face and establish how you are feeling about working with them. A franchise isn't a totally self-supporting choice, but one which may sometimes require interaction between you as the UK franchise operator, or franchisee, and the franchise brand owner, or franchisor.

When investigating a franchise opportunity, many people make several very basic mistakes, based on common assumptions or misconceptions. If you are looking into this possibility, whether you have found a possible franchise or have not yet even started looking, it may be wise to spend a little while asking yourself some basic, but very important questions before deciding just how appropriate such a venture will be for you.

If you have been studying franchises, then one of the things you may have come across is the advice that you should never be amongst the first people to join. The reason for this is supposed to be that if a franchise is new, then it is untried and untested, and therefore represents more of a risk. It is often said to be better to wait until the franchise has gained popularity, expanded and taken on many more franchise buyers before deciding to join such a venture.

This assumption although right most of the times can sometimes be false! Firstly, if a franchise is new, it does not necessarily imply that it is not worth joining. New ideas can have many benefits - being first into the marketplace with a new product, a new service or a new concept is very powerful indeed.

Also, it is worth asking how much support you will receive from a franchise business which has already grown rapidly, compared to one which is only just beginning. If you're looking at getting a lot of support and advice, surely you are more likely to receive better and more personal support if you are the first, or one of the first, to join such a business?

It is also worth considering the assumption that large franchises are better than smaller ones. If a franchise has already grown to the point where it is nearing market saturation, then clearly it would be unwise to attempt to compete within such a business. If a franchise has expanded, and taken on too many franchise holders, then there is likely to be greater competition between those individuals who have bought in to the opportunity. If there are local franchise holders, then is it wise to put yourself up against them?

These questions are particularly worth contemplating if you are new to the idea of franchises, and even more critical if you are new to the whole idea of working for yourself or running your own business. If this is new territory for you then not only will you not want to be thrust into a market where there is massive and experienced competition, but you will need to be within a franchise arrangement that offers you excellent support, especially in the early years.

If you have started to look about at franchises, and have read some of the material on offer, including business plans, agreements, contractual requirements and advice on running the business, then you may have come to one conclusion. You have realised that most franchises offer a very great deal of well thought out business advice. You may have found a franchise but decided that you will only follow some of the guidelines, forging your own way in new directions once you get started.

This can be dangerous for one of two reasons. If you decide to run the business your own way, are you really prepared for the consequences? Have you enough business experience to be able to go against the recommendations of headquarters that clearly already have more business experience within this particular sector? The other issue to give serious consideration to is whether you may be breaking a contractual agreement by diverging from the specified business path or method.

Franchise contracts can be quite specific, and it is worth bearing this in mind. If you are not fully happy with every aspect of the franchise agreement, then it may be better to walk away than to assume you will be able to successfully deviate from it. There are many franchises available today, and if one doesn't seem to quite fit, it may be more appropriate to look elsewhere.

However, if you are regularly finding that you are critical of almost every business proposal and franchising agreement available, then ask yourself two questions: are you being too unrealistic in your expectations of what franchising can offer? Should you instead consider setting up your own business so that you have the freedom to run things the way you really feel best? Either way there may be the need to be critical with yourself, asking some deep questions and being thoroughly honest about your expectations. Managing a franchise is not easy, but if you do choose the right one then the rewards can be huge.

If you've recently begun the process of finding a franchise business that is in alignment with your values, and if you're conducting this search alone, it's fair to say that you are at least partially, if not completely, overwhelmed.

Utilizing the internet in your search for the right opportunity can be a great place to find information on franchises. The downside to this approach, however, shows itself almost immediately. You'll quickly become frustrated with the incredible massive amount of information and franchise companies that you find, many whom you've never even heard of, and often times this results in more questions than answers. In addition, you may only be exposing yourself to possibilities that are listed on the first page or two of a Google search. Doing this could block you from many franchise "golden nuggets". Taking this approach is similar to attempting to buy or sell a home without the services of a realtor. It can work, but it will take much more time, effort, and research on your part, but even then, you are likely to never find the franchise business that is the best for you.

On the other hand, a professional franchise consultant can save you all of this aggravation by finding the perfect opportunity for you, at no charge, based on your interests, talents, and goals. Did you know that there are several thousand (at least) registered franchise businesses out there? Try researching even 1% of those options and see how long it takes to complete that exercise. A franchise consultant not only has already done this extensive research for you, but he also has key connections with hundreds of the best franchises available today that have been pre-screened and analyzed. The key advantage is that the agreements they do have are with solid, up and coming, or established franchise concepts that will meet the specific requirements of a potential franchise buyer.

In a nutshell, once you have a keen interest in a particular franchise shown to you, your consultant "takes you by the hand to the head of the class" and makes a professional introduction between you, the candidate, and the franchiser. You will be valued and respected by the franchiser immediately, not only based on the strong relationship between the franchisor and the consultant, but also because the consultant has pre-qualified and pre-screened you, deeming you a strong potential franchisee.

One of the most annoying and frustrating tasks the franchiser undertakes is the whirlwind of under-qualified, less-than-serious potential franchisees that they deal with. Imagine, if you will, the monumental task it would be to answer the phone several times each day from people who say "I want to buy a McDonald's. How much is it?" Not to mention the time involved in having to send out information packets to anyone that raises an eyebrow. A franchiser would need to create a full-time position just to handle this tedious job.

This is why the franchise consultant is so valued and respected by the franchiser. Only pre-qualified, serious candidates will be brought to the table. The franchiser is saved the time and money of having to undertake this task, and, therefore, he is willing to pay the consultant a fee if the candidate buys a franchise. A true win, win, win for all three parties. So, why wouldn't you utilize a franchise consultant?

Register for your Free Franchise Consultation.  The Franchising Authority will help you find your perfect franchise!

Franchising is the best way to enter the business world. From top franchise business owners, you get the support to understand a business module and how to run it in a successful way. Even though the concept of franchising is popular, yet there are certain erroneous beliefs about this business concept which at times mislead investors and entrepreneurs for investing in any top franchise business. Here are certain myths related to franchise opportunities and the actual fact behind it.

Myth - Anyone can enjoy success in a franchise business

Actual fact - Investing in a franchising concept is a good option to enjoy success in business. But, remember success is never guaranteed. For the success of any business there are many factors responsible for it like market saturation, training, support, location, the economy, and how hard you are working to make your business successful.

Myth - Franchising is best way to earn money

Actual fact - To make franchising profitable, both time and dedication is required. Thus, if you think that just investing money in any of the such business will make you richer, then you are having a wrong approach. You need to treat this business as your own and put in hours of hard work in order to make it successful.

Myth - Investing in top franchise concept means success

Actual fact - Going for an established and easily recognizable top franchise options has got many benefits. But this never means that you will enjoy success. A lot depends on the kind of training and on-going support you will receive from the franchisor. Only when you will able to offer quality services to your customers, success will come in your way.

Myth - High cost franchise means higher return

Actual fact - Higher investment in franchise business does not guarantee higher returns. It has been found that high-cost franchise opportunities at time may get you less money as compared to a low cost franchise business.

Myth - Franchising business is less expensive

Actual fact - The startup costs for starting a franchise and starting your own business from scratch are often the same. Remember in a franchise business you need to invest money in an appropriate location plus you need to pay franchise fees and royalties to the franchisor for using their trademark and business model.

Myth - In franchising you will be your own boss

Actual fact - Certain amount of freedom and flexibility is there in this type of business but remember you will always need to work within the company system and follow the pre-set standards for wages, suppliers, the price of the products, norms related to working hours and so on.

Myth - I don't need any help from a lawyer to start a franchise business

Actual fact - For starting a franchise business, a legal contract is signed between the franchisor and a franchisee. To ensure you understand all legal and financial liabilities it is advisable to take help from a lawyer before you sign any papers. This will ensure smooth functioning of your franchise business.

Well, there are some more franchising myths, but never forget that the benefits of franchising are immense. These benefits cannot be ignored and if you really wish to get the best values of your money start looking for top franchise opportunities in the market.

First it was the 'credit crunch', then the Recession, and now, the emergency budget announced by George Osbourne has outlined plans to reduce public spending and raise certain taxes like VAT, putting another strain on homes and businesses across Britain. There are some aspects of good news affecting small businesses in the budget too though, so it's not all bad news.

Starting a business now, therefore, means that the decision of which business sector and industry to operate in is now even more important. So, knowing that the industry that you start your own venture in is established, stable and forecasted to continue to grow is certainly a key attraction in these times.

The domestic cleaning market is therefore one of the most attractive sectors to start a business in today, thanks to the development of recognised national brands, such as Molly Maid, who have the 'lion's share' of the professional cleaning sector of this industry, which in total is worth around £3billion in the UK, and who estimate that around 10% of UK households are existing users or viable and realistic potential users of the domestic cleaning services they offer.

Although an established industry, it is still largely dominated by the 'cash in hand' one man/woman bands though the professional operators, led by Molly Maid, are becoming increasing utilised as their brand and reputation spreads. So, there are great opportunities for those who wish to operate under the proven business structure and branding of a market leader, through franchising.

Molly Maid, with its recognised branded vehicles and professional approach and appearance, has been operating in the UK since 1984 and their business system has been proven time and time again. The Molly Maid service provides high quality reliable domestic cleaning, operated by Franchise Owners who manage teams of maids within an exclusive area.

Pam Bader OBE is Chief Executive of Molly Maid UK Ltd. Pam was awarded an OBE in recognition of her services to training and she also became the first women to be elected Chair of the British Franchise Association in 1994 and is now on the Board of Directors.

Regarding the UK Marketplace, Pam confirms "There is enormous scope in the market for the right type of people. Businesses like Molly Maid are very reliable - they can't be replaced by technology and operate in a secure business sector with very high growth potential. They enjoy high consumer demand with steady repeat business. There are more and more women pursuing careers, people working in busy dual income households, young up and coming singles and recently retired seniors, all looking to have more time during the day which can be achieved through service businesses like Molly Maid."

Molly Maid is a management franchise which means Franchise Owners employ staff to carry out the maid service. Franchise Owners come from all walks of life although there are certain skills and attributes that will help a franchisee to succeed. Pam explains "We've found that a sales background can be an advantage but the strength of the Molly Maid brand avoids the need for a 'hard sell'. We believe that business experience, professional qualifications and academic achievement are less important than a capacity for hard work and determination to succeed."

Coupling the right skills and attributes with the right business in the right market sounds like a recipe for success, so what does a franchise owner actually do? Pam advises "A key requirement is to recruit staff. The Franchise Owner must then ensure that his or her employees are aware of their responsibilities and duties, and are properly trained and supported to fulfil them. To a large extent, the role of the Molly Maid Franchise Owner is defined by the Molly Maid Operating System. Numerous responsibilities include those of employer, trainer, salesperson and transport manager. What a Franchise Owner does not do is the cleaning itself!"

The result of the combination of the efforts of the Franchise Owner, coupled with the Molly Maid proven business model are dozens of successful franchisees throughout the UK, but what might a new Molly Maid Franchise Owner expect from their business by way of financial performance?

"The scope is enormous," says Pam, "providing they follow the business system and have a determination to succeed. Depending on personal ambition Franchise Owners can have 5 Molly Maid branded cars on the road within 12 - 18 months with estimated sales turnover in excess of £100,000 and when the businesses are fully established 15-20% of turnover could become net earnings. Some of our Franchise Owners turnover in excess of £500,000 and are running upwards of 12 teams. Of course none of these figures are guaranteed as at the end of the day success or otherwise hinges on the skills and abilities of the Franchise Owner."

There are clear benefits to running a Molly Maid franchise over starting a domestic cleaning business from scratch, and the initial investment of £16,995 covers full training and support, as well as the whole business and operations structure so that you can, after successful completion of induction training, operate your own Molly Maid franchise in full confidence.

"Franchising is a much safer way of getting into a business that is already proven to work. All the hard work has been done for you. Someone else has already proved that there is a demand for the service. Molly Maid is a well known brand and as the business grows it becomes a bigger and bigger asset which if and when it comes to be sold the value is likely to be a lot higher than if it was being run independently."

Explains Pam who, with her abundance of experience in franchising and also from her position on the Board of Directors of the British Franchise Association, is well placed to advise would-be business owners who may be considering starting up with a franchise of how to conduct their research.

"A logical approach is to start by selecting a particular category of franchise then focus on the business that appeals to you. When considering various franchise opportunities it's worth knowing from the outset what you can afford to invest and what borrowings you are able to commit to. It's also important to be clear about what your income goals are to support your family and the lifestyle you want. Once you know this you can talk to Molly Maid or any other franchisor to see whether they can help you to achieve your goals with the resources you have available" she advises.

When you have decided that a franchise is the best option for you there are still a lot of things to be considered when buying the right franchise. When looking for a franchise they are looking for skills in you as well as you looking for a franchise opportunity in them. So when you are negotiating the possibility of joining a franchise there are a few points that you should take into consideration.

One of the main points of buying a franchise is what your current financial position. Do you have the resources to find a franchise for sale and actually buy it? And if not, where can you get this money? Many franchises don't require more than a small investment to get you started but other require an investment along with premises, staff and other assets. The amount of money you have to invest will largely be the main reason you buy a franchise opportunity.

Another important point that will determine which franchise you buy is your sustainability of your finances. If the initial investment was a large amount for you, do you have sufficient funds to help you survive before the business starts paying for itself? For some people an immediate return is vital for them to pay the bills while other are able to wait a certain period of time before they take a wage. If you can talk to friends or family to maybe help you out while the first stages of the franchise are being set up then this will take a lot of the pressure off you when unexpected costs surface.

The business sector of your franchise is the next main point that will decide which franchise to buy. A lot of franchise owners initially looked for a high name brand such as a well-known fast food restaurant for their franchise opportunity, but after deliberation and research they ended up buying a smaller home based franchise such as an Internet franchise. If after your research you find that you are going down the same path don't worry because everyone has an idea of their ideal opportunity would be but the idea is to keep an open mind to all types of franchise for sale options. A major fast food restaurant may look a great franchise opportunity on the outside but once analysed it might be too expensive or not have the job satisfaction that you desire, don't get forced into taking a high name brand as there are many other franchise opportunities that will better fit your work ethic. Find an opportunity that you are enthusiastic about and enjoy doing but don't close you mind to other possibilities.

Your experience counts for a lot, what you have done in the past and what you are good at, this will naturally help you build a franchise. Franchises are looking for people with certain skills and you may be one of them but in most cases training will be provided by the franchisee.

I have mentioned a few points to help you make your mind up as to which franchise opportunity best suits you but after all this the ultimate decision is up to you as to which franchise for sale you go for.

There are many states in the US that regulate franchise systems, and the federal government also regulates franchising through the Federal Trade Commission. Many believe that it is important to regulate franchising so that franchise buyers are not fraudulently induced to purchase a franchise, and then end up losing all their money. The Federal Trade Commission and regulations states believe that a franchise is an investment, and like any investment they must be regulated.

This is all well and good however one has to ask who's protecting the franchisers against the Franchise Buying Consumers. As a former franchiser, I was often blown away by the number of franchise applicants who would lie on their team member profiles, or franchise applications. You see, buying a franchise is similar to getting married, and it makes no sense whatsoever to start out such an important relationship with a foundation of lies.

Often, franchisers find out after it's too late and the franchisee has already purchased the franchise that the franchise buyer wasn't exactly upfront with all the details. One of the most common things they would lie about is the amount of money they had to put down on the franchise, and the amount of working capital they had to help their business succeed. As a franchisor this is very important, because undercapitalization is the number one reason for business failure; in a franchise or any business.

Had the franchisee buyer been upfront with this information, the franchiser could have told them "no" they cannot buy the franchise and it would've saved everyone a lot of money, and time. When a franchisee goes out of business, due to lack of initial capital, they often burn territory, and give the franchiser a black eye on their brand name in those communities. No one seems to care about the franchisers, and franchise buyers often lie on their applications.

In going through all the franchise applications that we had, I noted that about 75% of them had falsified information of some type. That's totally unfortunate. So, the reality is there is a lot of fraud going on, on the franchisee buying side, whereas, on the franchisor side there is less than 1%. This is because the franchisor knows that it is essential to be honest and truthful with franchise buyers because you are entering a long-term relationship with them. If not you could be sued down the road.

So someday, I'd sure like to hear the regulators tell me why they don't regulate the franchisee buying public, only the franchiser's side of things. After all, there is so much fraud on franchise applications that it's more common than truthful applications. Please consider all this.

What do you do when franchise sales are lagging? How do you respond? Do you blame the economy for your low sales? Do you blame your sales people? Do you look for excuses beyond your sales process? There is not necessarily a one-word answer to these questions; however, I would like to walk through some suggestions and strategies to help out. There are a number of areas to evaluate including franchisee lead flow, qualification process, sales representatives, franchise brokers, review and monitor sales pitches, franchise sales software program, discovery days, proper disclosure, follow-up, and going for the close. Let's take a look at each of these one at a time.

1. Lead Flow - The obvious and most important to ask when sales are low is, "What does my lead flow look like." If lead flow is down let's evaluate why. Are your current marketing avenues working? What portals are you on? Should you exhibit at trade shows? Is your marketing message appropriate for the current franchise sales environment? Have you made any recent changes and monitored the effectiveness of these changes? It is important to remember that you do not want to do a total make over all at once as you will most likely change too many variables and be unable to pinpoint what led to the increase in leads and ultimately increasing your franchise sales.

2. Lead Qualification - This is an important avenue for your sales process. What are you doing to qualify your prospective franchisees? Are you sticking to your requirements and not lowering your standards? Have you been monitoring what your franchise sales people have been saying? It is important in the sales process to stick to your program, otherwise, you end up having discovery days and prospective franchise sales meetings with people that just waste your time.

3. Franchise Sales People - The next step is to evaluate the people you have in place running your sales department. If you are a young franchisor, the best sales person is the founder of the company. No one can sell with the same passion and charisma that the creator has. If you have sales people in place re-evaluate if they are the right people. What are their closing percentages? If they are not performing, let them go and find someone else. It might be hard, but it will hurt even more if they cannot sell and your franchise company suffers because of it. You will also want to examine how your franchise sales people are being compensated. Usually you will want to have a small base or a draw with a nice commission structure to motivate them to sell.

4. Franchise Brokers - Often times the idea of franchise sales brokers comes up when working with my clients as to whether or not they should use this as a resource. As a core value, my recommendation is to not use franchise sales brokers as they tend to take a large chunk of your franchise fee, which you need, and they have conflicting interests. However, utilizing brokers in as a supplement to your in-house sales team is something worth considering. Again, when choosing brokers you will want to be very careful which company you work with and be quick to pull the plug if there are no results after 6-9 months.

5. Review and Monitor Sales Pitches - One of the best ways to assist your sales team is to review and monitor their sales calls. Be sure to comply with any legal requirements prior to listening in to their calls or making recordings as there are many states that have specific rules. This is a great way to find out what your people are actually saying and more importantly to help them improve. It is as raw as it gets and allows you to completely dissect their presentation and sales skills. Very often you will uncover that your franchise sales person has deviated rather far from the basics. As it goes in sales, it seems that the more you stick to basics the better you do.

6. Franchise Sales Software - What kind of software program or sales monitoring system are you using? Do you have one? If you don't, you need to get one ASAP! You need to be able to manage your franchise sales people and the franchise sales of your company. There are many different kinds of CRM's and sales software programs that are rather inexpensive including Salesforce.com, ACT, Access, Goldmine, and many others. I generally recommend that you work with an "off the shelf" software program as they are less expensive and more people know how to fix them. If you do have a franchise sales software program are you utilizing its full capacity? Run some diagnostics on your current sales process to ensure maximum utilization. It makes the sales process much easier and helps your franchise sales people sell more franchises!

7. Discovery Days - Are you conducting discovery days? Are you presenting the best of your business to your prospective franchisees? Are you ensuring that on discovery days that you are bringing them to your business when it is busy and open? Are you ensuring your prospects a quality experience? Remember, buying a franchise is an emotional purchase. Meaning that your franchisees will "fall in love" with you, your company, the business, or whatever. We want the prospective franchise buyers to have a great experience and come away with a "good feeling." This is too often overlooked in the process. Re-evaluate what you are doing for your discovery days. If you are not having any discovery days, make sure that you add them in.

8. Proper Disclosure and the 14-day Cooling Off - Remember to properly disclose your franchisees. Get the signatures, the sign-offs, and everything else that needs to be taken care of when presenting the Uniform Franchise Disclosure Document to your prospective franchisees. Always make sure to have your UFDD in its most current form and be compliant with your state and federal regulations. Remember to be compliant with the 14 day cooling off period where you cannot accept a deposit, sign a contract, or do anything that could indicate a sale after the initial disclosure document is presented. This is an important aspect of the franchise sales process as your prospects will consult with their lawyers, CPA's, bankers, friends, family, etc. This is also your opportunity to make sure that this is a prospective buyer that you are interested in bringing into your franchise system.

9. Follow-up - After the qualification, phone calls, and discovery day the hardest part is next. You have to remember to follow-up with your prospects. The follow-up is often times where you are able to hear the truth about what your prospects are thinking. You need to examine how often and what you are saying in your franchise sales follow-up. It is key to institute a quality follow-up procedure to assist your franchise sales long-term.

10. Going for the Close - If you don't ask you will not receive. Make sure you always ask for the sale. This is critical! Nothing else in the sales process matters if you don't ask if they are ready to move forward with signing the paper work and cutting a check. If this is your first sale or you are new to the process, do not act squeamish about asking for the sale. Repeat to yourself: "I will ask for the sale, I will ask for the sale, I WILL ASK FOR THE SALE!!"

As we have discussed the franchise sales process is full of detail, hard work, and persistence. It is a rewarding and exhilarating experience that is full of high emotion for both you and your prospective franchisees. Remember that the key to franchise sales is being able to say "No" to someone that doesn't fit in with your organization. If someone is a problem early in the sales process, they probably will be a problem as a franchisee. Learning to say "No" and granting or awarding franchises to the right people will help you out significantly as you continue to grow your franchise company. I would also suggest that it is often difficult to do your own brain surgery when reviewing your sales process and you may want to seek outside consultation. Remember, the key to franchise sales is selection, selection, selection as these people will be "married" to you for the next 20 years; so choose wisely.

For those of you who may just now be looking into the possibility of buying a franchise, there are a few basic things that you need to know about the franchise option for business ownership. Many people do not realize that franchising, like any other business start up, has many facets all its own, and things that you will need to be familiar with, and to learn before you even begin your search for that perfect option for you. Getting yourself really familiarized with some of the more common terms in franchising helps, yes, but also, it helps to know what sort of franchises there are out there. It's true, for every industry, there is a franchise, but franchises basically break down into three basic types.

Here, we will name those three types of franchises, and we'll explain a little bit about what each one entails.

Product Franchises are the first type of franchises we will look into and explore. A product franchise is a great way for manufacturers to take control of how a retailer gets their product out there. The manufacturer gives the franchisee permission to distribute the product and allows the owner of the retail establishment to use that brand name and trademark to further enhance promotion and built the trust of the consumers. Product franchises are often times a food service oriented business. However, the downside is, sometimes these can be very fad based, so plan your market research accordingly. Steve Steve Rosen, chief executive officer of FranNet, had this to say about product franchises:

"A lot of product businesses are fad-based. It goes in cycles. People love coffee or ice cream or high-fat or low-fat stuff; they love or hate donuts. You've got to take that into account."

A business format franchise is likely to be one of the things that comes up most in your search for that perfect franchise. You'll find that this is a very popular type of franchise and there's a good reason for this. The company usually gives the franchisee not only a great system for running the business itself, but usually again lends the name and trademark of the parent company. Often times, these are very well known brands and they automatically inspire trust, so that is a huge benefit to the business format franchise. The company also typically will provide a great deal of assistance in not only start up, but continued management of the company- so this format is a great way for someone to become a business owner, but without flying blindly. Think of a business format franchise as a sort of safety net to ensure the success of the franchisees that are involved in this.

Manufacturing franchises are another area where big money comes into play and these are also fairly common. These types of franchises usually give a group, or an organization the rights to produce or manufacture a certain product again, with the ability to use that name and trademark for marketing and promotion benefits. This sort of franchising is usually food and beverage, but can sometimes be affiliated with other products as well.

Lately it seems many well known franchisers are offering financing deals to lure new franchisees into buying into what are likely unprofitable stores. The enticements are many including the opportunity to own a small business that is backed by the marketing, procedures and processes of a large international franchise organization. On the surface and to the uninitiated, this looks like a good opportunity. A franchise opportunity that looks too good to be true, likely is.

The parent companies are offering supposedly good deals to existing or new franchisees to open new or take over existing stores. This is becoming more common as the financial crisis continues to drag on and more and more stores from all franchise concepts are failing and franchisees walk away from their businesses. The real question that needs to be answered before considering a "deal" like this is whether or not the failed store would have ever been viable. Was the location a poor choice from day 1?

For franchisers who hold a head lease to these businesses this is becoming a bigger and bigger long term problem. With years left on a lease and little hope of sub-leasing the building as well as de-fit costs, this becomes a long term financial drain for the franchiser. Now multiply this by the tens or in some cases hundreds of failed units within some of the larger franchise concepts and you can see why these deals are becoming more common.

They will sell them as partnerships, management agreements or whatever, it still comes down to basics. The franchiser has a store or stores that are not viable for a set of reasons; wrong location, changing demographics, over capitalization or even an over eager bank that lent too much. The reason does not matter, the ongoing problem does.

If you look through the eyes of the franchiser it is easy to understand. Have a slew of shuttered stores with monthly rent due and a black eye on the reputation of the company (closed business never look good!) or entice a new buyer to take over the business. To the newbie potential franchisee these can look like manna from heaven when in fact you are being lured into a business that will never be viable. There will, of course, be exceptions to this and there is a slight chance that the business closed due to mismanagement and with the right mix could be profitable.

Some of the "creative financing" being offered is:

• Quiznos, for example, is offering an "Operating Partner program" that has an entry cost of $5000
• You get full ownership over time.
• You use the profits of the business to pay for the store. 80%
• You are paid from the profits of the store. 20%
• You are paid a salary as well
• You receive full corporate benefits, health insurance etc.
• Quiznos covers losses for 12 months.
• They set up the LLC and hold the head lease.
• They set up all utility contracts.
• They set up and do P&L's for you.

Additional offers being slung about from various franchisers include:

• Capped rent; this is where a franchiser sets out a percentage of the sales as rent and pays the rest themselves. This is usually enough to ensure break even or better for the franchisee if their controls meet industry standards.
• Upgrade costs. Where a franchiser pays for a refurb or refresh of a site that will bring added custom and better controls.
• Local store marketing paid for by the franchiser for a certain length of time.
• Free training.

These or any mix of the above can and are being used. There is one critical item missing from the list - franchise fees. I have yet to find any franchiser willing to discount or waive (even for a short time) their franchise fees. That would set a precedent that once started cannot be stopped and no franchiser wants it known that they are willing to discount their franchise fees!

So what's the problem?

Most of the stores that are going cheap, or being offered along with financial assistance are under performing stores and as such will take a lot of effort (or a miracle) to bring them back to a point of financial viability.

It is also important to remember that the majority of these financial packages only run for the life of the lease or for a set period, which means that the aid will stop at some point and you will be back in the same position as the previous owner. Also of note, a lot of these stores have had multiple owners none of whom have succeeded so unless the new franchisee has a dynamic skill set and or magical powers it will remain as unprofitable as in the past. When the lease does run out it is unlikely the franchiser will continue to provide ongoing assistance to an unprofitable store. You then will be looking at a lot of hard work and money down the drain.

In closing, if you are considering one of these "deals" or franchise opportunities from a franchiser be well aware of what you are getting into and please seek sound financial and legal advice from industry professionals prior to signing anything. They need you as much as you need them.

Opening a part-time franchise can be a great way to add to an existing income or is particularly appropriate for folks who require flexibility of working hours for example those with kids. If your time is constrained, and you might consider working in full-time employment impractical, then a part-time franchise business may well present you with a path to making money without giving up your current family or personal obligations.

Even though a good number of franchise businesses call for a full-time style of working commitment, there are a range of options which fit into the 'part-time' class of business:-

Pre-School Music Clubs

During the last few years, childrens music club franchises have turned out to be all the rage. A good number of these are aimed at providing an enjoyable learning setting for pre-school children through music and singing. The characteristics of these franchises, require that they can run all through school hours which is a great opening for people who have family commitments such as dropping off and picking up their kids from school. These kind of franchise opportunities can quite often fit in with the academic times also providing extra give and initial investment costs are usually very appealing. If you take pleasure in working with children, and could do with a franchise that can tally in with a family way of life then these can be a good fit.

Dating Franchises

A number of dating franchises can also be administered as part-time businesses. These are usually evening or weekend event type businesses which again can be helpful for individuals with young families as they can potentially be run outside of typical Monday to Friday working day times when a significant other may be on hand to look after the children. Any administration might of course be done over school times.

Investing in a Part Time Franchise

Above are only some of the businesses you could mull over but before investing in a part time franchise opportunity, make sure you have researched financing options with your bank as you could likely require capital to take on your franchise unless you already retain some private investment capital. The franchise departments of the major high street banks could be a good source of information on the franchise business that you might be considering. Put aside time to ask if they have had any dealings with the franchise business.

When you know what you can manage to pay for, make a date to see the franchisor so that you can see their operation, support setup and head offices. Its worth remembering that you will be in business with these individuals on a continuing basis so ensure you feel relaxed and at ease with them. In addition, get a hold of a list of their franchisees as references and put aside some time to talk to them to get some helpful views about how the franchise business operates for them day-to-day.

Consult an expert franchise legal adviser to ensure you will have all the bases protected when it comes to signing any franchise contract. Its prudent to be sure that you are completely clued-up of the legal connection you may enter into with the franchisor. After you have made your choice, commit yourself to following the proven system and enjoy the advantages and everyday life of running a part time franchise.

FRANCHISE VS. LICENSE

What's the difference between franchising vs. licensing a business? Is a license business model really different from a franchise business model? Whether you're a franchise attorney or not, the starting point in any analysis is to consider the legal aspects, then the business aspects. This article focuses on the legal aspects. A franchise always includes a license of the brand and operating methods, along with assistance (training, an operations manual, etc.) or support (providing advice, quality control, inspections, etc.). A license that is supposedly "not a franchise" but contains these elements, is a disguised, illegal franchise with significant legal ramifications and risk.

REGULATORY BACKDROP

In considering the legal aspects, begin with the following premise that applies to both options:
If you put someone into business (or allow them to use your business brand/mark) this transaction will normally be a regulated activity, subject to substantial penalties for noncompliance. If it looks like a duck and walks like a duck, it's a duck. This guiding legal principle (and common sense), coupled with the business aspects of selling a franchise vs. a license (discussed below) will answer most questions.

FRANCHISE & BUSINESS OPPORTUNITY LAWS

Why does regulation exist? Arising from the ashes of documented past abuses, where tens of thousands of individuals lost all of their worth by investing in nonexistent or worthless business endeavors, the government has devised two principal consumer protection mechanisms:

(1) franchise disclosure-registration laws; and
(2) business opportunity laws.

The thrust of these laws is to require sellers to give potential buyers enough pre-sale information so informed investment decisions can be made before money changes hands, contracts are signed and sizable financial commitments are undertaken. It doesn't matter what terms are used by the parties in contracts or other documents to describe their relationship. For example, the contract may call the relationship a license, a distributorship, a joint venture, a dealership, independent contractors, consulting, etc., or the parties may form a limited partnership or a corporation. This is entirely irrelevant in the eyes of governmental regulators,. Their focus is not on semantics, but whether a small number of defining elements are present or not. Today sellers are subject to a complex web of regulations that differ from the federal level to the state level and even differ widely from state to state. Murphy advises through Franchise my business.

DON'T FALL FOR TODAY'S SUCKER PLAY

The internet is filled with statements like "Compare high cost franchising to low cost licensing." Firms or individuals that say calling it a "license" dispenses with legal regulations are delusional and wrong for at least three reasons:

(1) Common Sense - if it was really that easy, everyone would be doing it that way. The 3,000-plus companies that are franchising are not stupid. Many can afford the very best legal talent available. It's not a coincidence they're all franchising and not licensing;

(2) Even if the relationship can be structured so it doesn't fall within the definition of a "franchise," the backup regulatory protection mechanism - business opportunity laws (discussed below) - will certainly apply. And complying with these is a lot more expensive than going the franchise route; and

(3) Any analysis must include federal law (franchise and business opportunity) as well as applicable state laws covering the same dual prongs (franchise and business opportunity).

This all reminds me of some financial planners who still advise their U.S. clients that filing U.S. income tax returns is not required under their interpretation of the U.S. Constitution. It just doesn't work that way. Actually it does work, but only until the IRS catches up.

The "licensing avoids franchise regulations" spin (which, not surprisingly, is not accepted in the legal community) also only works until the company gets caught. The logic (not) goes something like this: licensing arises under contract law, not franchise law and therefore franchise law doesn't apply. Sound's just like the "you don't have to file a tax return because tax laws don't apply" argument.

REAL LIFE EXAMPLES

A license attorney prepared a dealer license agreement and ignored the FTC Franchise Rule disclosure requirements ("licensing arises under contract law, not franchise law"). The dealers became disgruntled and hired a litigation attorney who sued the company for, not surprisingly, selling disguised illegal franchises. It cost the company $750,000 to go to trial in federal court to answer the question "Is our license contract an illegal franchise?"

"Is our license really a disguised, illegal franchise?" is always a very expensive question to answer. Unless spending $750,000 is your idea of a good investment. Trying an end run around the franchise disclosure laws by calling it a "license" or a "dealership" may be a cheaper way to go initially. But it's only a question of when (not if) you will be caught. Be prepared to spend mind-boggling amounts down the road when the disguised illegal franchise is challenged for what it really is.

In a 2008 case, Otto Dental Supply, Inc. v. Kerr Corp., 2008 WL 410630 (E.D. Ark. 2/13/08) another disguised franchise vs. a license was at issue. The company claimed it sold just a license, not a franchise and the franchise laws simply didn't apply. It made a motion for summary judgment to have the case thrown out of court.

The federal Eastern District Court ruled against the company and ordered the case forward. It said whether or not the license was really a franchise was up to a jury to decide. Jurors are like most of us, and apply common sense to the simple defining elements of a franchise. They are not swayed by semantic arguments like "licensing arises under contract law, not franchise law and therefore franchise law doesn't apply." Another very expensive franchise vs. license learning lesson.

And here's a final example. In Current Technology Concepts Inc. v. Irie Enterprises Inc. the Minnesota Supreme Court concluded a licensing arrangement was a franchise and held the franchise company liable for damages in the amount of $1.3 million for violating the Minnesota Franchise Law.

Hearing "after the fact" that the arrangement was an accidental, illegal franchise and you're liable for $1.3 million was the last thing that company ever wanted to hear. Perhaps they got themselves into this mess by listening to statements found on the internet that franchising is expensive and licensing inexpensive. Again, if something sound's too good to be true, it usually is and this should be a big flashing red light.

ROOTS OF LICENSING

It is important to remember the roots of licensing: artwork and character licensing - where the owner (licensor) grants permission to copy and distribute copyrighted works, such as allowing Mickey Mouse to appear on t-shirts and coffee mugs.

The most recent explosion in license law is the licensing of software on personal computers. Or, the owner of a trademark allows another a license to use its mark as a way of settling a trademark infringement suit. These are common and accepted forms of licensing. However, the attempt to use licensing as an end-run around the franchise laws is a corrupted use licensing was never intended for.

This is not to say licensing a business may be a viable option in foreign (out of U.S.) transactions where U.S. laws don't apply - but these are a very small minority. Most transactions and contracts cover U.S. activities and residents, so the franchise vs. license question is usually an easy one to answer.

With the advent of the 21st century and the popularity of franchising business in India, women have now changed from homemakers to successful business owners. Women franchisors are steadily on the rise and gaining prominence in the male dominated business area and especially in jewellery industry, women are doing wonders. In India, key players like Gitanjali Gems Franchise and Gitanjali Jewels Franchise have made a huge contribution in popularizing jewellery franchise concepts in India. Both Gitanjali Gems and Gitanjali Jewels are leading jewellery brands in India and have their franchised outlets in different corners of the country.

As we all know, franchising is a way or method of doing business and expanding the successful business through its channel partners called franchisees. And this concept was very well adopted by Gitanjali Franchise brand. According to a recent study, there are many jewellery franchised outlets managed by women in India. This is mainly because women are hugely interested in jewellery sector. They are always conscious of their looks as compared to men and jewellery items add to their beauty. They have the innate talent for latest fashion in jewellery as well as other beauty accessories.

Gitanjali Franchise understands the fact clearly that the fairer sex is endowed with innate passion for jewellery and it is only due to their in-depth understanding, they can successfully manage and run a jewellery franchise outlet. In recent times, a lot of women franchisees have entered franchising by taking Gitanjali Gems Franchise and Gitanjali Jewels Franchise.

There are many benefits of Gitanjali Franchise, such as:

- The business concept of Gitanjali franchise is successfully tested and with years of experience in the sector, they offer the best franchise proposal in the jewellery segment.

- Both Gitanjali Gems Franchise and Gitanjali Jewels Franchise have strong brand image in the market and this allows the franchisees to exploit new market and earn profit.

- Strong advertisement support by the franchisors. Through electronic, print or online advertising, Gitanjali brand has a strong hold in the market. Here the franchisees don't have to think about think about marketing and advertising of the brand.

- Being the only franchise of exclusive gold and silver jewellery design and customization of unique jewellery, huge traffic of customers are guaranteed throughout the year.

- Gitanjali Franchise offers all the support and training to open and manage a franchise outlet successfully.

These benefits make women investors and aspiring investors to invest in a Gitanjali franchise business. Also remember that earlier, people used to buy jewellery only on special occasions like wedding, birthdays, engagements or during festival seasons. But today, the scenario is not so as with the coming up of organized jewellery players, people prefer to buy jewellery at any time of the year.

Hence, if you are also an aspiring woman entrepreneur, then jewellery franchising offers you the best way to move forward with your dream of running and managing your own business. Investing in Gitanjali Gems Franchise and Gitanjali Jewels Franchise can be most rewarding career option for you to consider. Take a step further with Gitanjali franchise and bring a positive change in your life.