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Working with franchise brokers and coaches

Why working with franchise brokers makes sense
I went to the  Franchise Broker’s Association Annual Convention some time ago. Afterwards, I was in the Houston United Club on a layover, and I had a call with one of my franchisor clients. He was shocked to learn that we were working with franchise brokers. “They are so expensive! Why should they get $20,000 just for a lead?”
The commissions paid to brokers “just for a lead” are surprising to many would-be or brand new franchisors. For some reason the franchise broker/zor relationship can become occasionally adversarial. I have never understood this. To franchisors; franchise brokers are out there building YOUR brand. You are NOT paying them for just a lead; you are paying them because they are your brand ambassadors.

Below is an excerpt from my book How and Why to Franchise Your Business that addresses the coach/zor relationship.

Brokers, coaches, consultants-they are known by many names. Basically, franchise brokers are responsible for generating their own leads, and they refer interested parties to franchisors.
I have heard it said that brokers just bring you leads that you would already get elsewhere. I can tell you that I have worked with franchise budgets in excess of $100K a month in lead procurement. I currently manage a budget close to $1mil/year, and in all my years of franchise development, I have only had one lead come through a broker and another franchise lead source.
If you chose to work with brokers, and I think most franchisors should, then you need to learn how. This is not a set-it-and-forget-it model, though it is often treated as such. It’s important to understand that most broker networks have several hundred franchisors in their portfolio, but most […]

Why is it beneficial to have military veteran franchisees or vet employees?

What’s the deal with hiring or recruiting vets, anyway?
 

As business owners or franchisors, we often here about the advantage of hiring military veterans. The first thing that often comes to mind is taking care of those who agreed to, or actually did, put themselves in harm’s way to defend our country and way of life. Surely, however, there are many other ways to support veterans than to give them a job, right? Absolutely! I myself am a support of the Wounded Warrior Project, send care packages to deployed personnel, and occasionally pick up a tab in a bar or restaurant for a service member.

So we don’t have to give returning service people a job to show our appreciation. That then begs the question, should we be focusing on recruiting candidates with military experience to join our ranks, either as employees or business owners? In short, YES!

 

I myself am a peacetime vet (sorry for the blurry picture, that’s all I’ve got!). That means that I served my entire military commitment (U.S. Army, 13M, STEEL RAIN) in a time that this country was not at war (my time of service ended shortly before 9/11). When it comes to readiness for a position, there is some distinction between peacetime and wartime vets. The qualities I am about to explain to you that make veterans uniquely qualified apply to both peacetime and wartime service members, but in peacetime we were practicing, while in wartime what was once practiced was being executed on.

 

 
So what qualities do military veteran franchisees or employees bring to the table that you may not find as easily in other candidates?

Personal Accountability
I went in the military a little older than most, so I graduated AIT
(Advanced Individual Training, […]

How to fund a franchise

How to fund a franchise
We have helped close to 2000 people invest in franchises. We have worked with franchisors that required an all-in investment under $50K, and have done multi-unit, are development, and master franchise licenses with investments in excess of $5million. An individual’s available capital, the amount of total capital needed, as well as their other assets, credit, business experience, etc., will influence what funding types they have available. However, there are four many ways to fund a franchise; all cash, retirement funds, SBA-backed loans, and private investment.

Each of these can impact the ROI of your franchise. If you are considering becoming a franchisor, your franchise consultant can help guide you to setting up your offering to be most attractive to lenders. If you are a considering becoming a franchisee, these are several of the ways to fund a franchise that may be available to you.
Fund a franchise with all cash
This is obvious, but it deserves a place on the list. I have worked with many investors who have funded this way. The advantages of funding a franchise all cash is that the business is not laden with debt or burdened with servicing, and you are not beholden to shareholders or fighting with partners.

 
Fund a franchise with retirement funds
People often don’t realize that, for many qualifying businesses, you can use retirement funds to fund the business. You are not withdrawing the money, but rather just self-directing it, so you don’t pay the penalties that you would for early cash-out. One of the great advantages of this method is that, if your business is more profitable than you need to sustain it and your lifestyle, you can push issue the profits back to the […]

Who should franchise their business

Who should Franchise?
Many feasibility studies look at a business for franchise-suitability. They evaluate scalability, ROI, product line availability, etc. One thing they miss, however, is the business owner. They fail to ask the question “who should franchise their business?”
Should you franchise?
Are you the right person to franchise? The first thing that you have to realize is you are making a major career change. Becoming a franchisor means you will completely switch your focus from running your current business to running a franchise. If your franchise venture is successful, you will likely have to bring in other people to run the company-owned units of your business, or even sell some or all of them off to franchisees.

Do you have what it takes to be a franchisor? Do you even want to be one? During one phase in my career, I ran the day-to-day operations of a franchise organization in the video game space with 200+ franchisees. Though I was in the video game industry, my day-to-day usually had nothing to do with gaming. I spent my time responding to franchisees needs and concerns and proactively monitoring the system so I could foresee problems; I had solutions in place before the franchisees even knew they existed. Studying spreadsheets, monitoring key metrics, and facilitating business training were all part of my job, but never once did my job require me to pick up an Xbox® controller! Are you ready to switch careers AGAIN? Make sure you have through this through before you franchise!
Assuming you have the desire to become a franchisor, you must then evaluate your capital situation. Franchising is an expensive endeavor. I have seen several franchisors with a promising model come into franchising with a […]

Secure passwords through a password formula

Note: This is kind of a long article. If you just want to know how to make a unique, secure password for every site you log into, jump down to The solution
Using a password formula
So you might be wondering why a franchise blog is writing about passwords. After all, almost all of our posts talk about how to franchise a business in some way. It’s simple; regardless of your line of work, cyber security is important to you. If you are a franchisor, you likely protect your franchisees bank account information, credit card information, SSN, etc. with a password. If you are a franchisee, you likely protect your franchisor’s intellectual property, as well as your employee’s personal information, with a password. We all use them, and most people’s passwords are simply not safe. Why? There are four steps to a secure password, and I am of the opinion that, for most people, following them is impossible. Chances are you already know the four steps, so feel free to skim and then jump down to the solution if you want.
Step 1: Make it unique
This one seems obvious, but many people don’t even take this simple precaution. How do I know? Because many hacks and password dumps have shown that the top five passwords in use today are “password”, “123456”, “12345678”, “1234”, and “qwerty”. Of course, clever individuals do letter/symbol or letter/number substitution, so that “password” becomes “p@55w0rd”. This was a decent solution 10 years ago, but now this is so common that many dictionary hacking programs will try p@55w0rd before they try password! Now, to go truly unique, many people are recommending password phrases. A pass phrase would typically be something that is meaningful to […]