59 67 franchisingguide.qxp 7/24/2014 7:03 pm page 59 ... · tures, franchises are often viewed as a...

July 28, 2014 • An Advertising Supplement to the Los Angeles Business Journal

Franchising Guide

SPONSORED BY:

By LARRY SCHWARTZ

The franchise industry has experiencedtremendous growth over the past decade.As corporations downsized or reorganized

in response to the downturn of the economy,unemployment rates skyrocketed and employeeconfidence steadily deteriorated. With this inmind, it is easy to understand why the franchiseindustry has experienced such a high rate ofgrowth. Owning a business provides an attractiveway for people to control their own future andbecome the employer, rather than the employee.

Industry experts are confident that the growthof the franchise industry is not a reactionarytrend, but a permanent shift toward lower riskentrepreneurship. This has led to strong growthamong established franchise organizations andhas prompted other successful business owners toconsider franchising as a viable strategy to expandtheir existing business. However, franchisingcomes with its own set of rules, which makes itunique from other industries. Franchising is high-ly regulated and the importance of the franchisor-franchisee relationship must be understood.

For new and early stage Franchisors, significant

effort must be put into building their system infra-structure and planning how their franchise is go-ing to operate. Proper planning will ensure thatyou have the confidence and know-how to runyour new franchise entity successfully. To accom-plish this, you must surround yourself with theright team of franchise industry advisors and de-velop the key support tools to effectively operatethe franchise organization.

The Team

For new and early stage franchise organizations,it is important to seek out industry professionalsthat can provide a “turn-key” consulting and advi-sory package to help establish the franchise. If youdon’t know where to start, it may be helpful tofocus your search on finding an experienced fran-chise consulting firm to get you started. A well-qualified franchise consultant will be able to pro-vide the guidance, insight, and strategic adviceneeded to make informed business decisions. Atop franchise consulting firm will also have anexperienced support team, extensive resources,and an established network of industry profession-als available to help develop all the key compo-nents of your franchise system.

The Tools

Franchising is one of the best and most successfulplatforms for developing both retail and service brands.It is also a strategy that requires a unique and funda-mentally sound infrastructure. These componentsinclude strategic and tactical planning, support initia-tives, and effective execution, all of which are necessaryfor the company to successfully build and managetheir organization and further develop the brand.

Building and then managing a successful fran-chise company requires a great deal of detailed in-sight within all aspects of the franchise industry. Itis important to understand the historical landscape,current trends, and the many components requiredto operate the franchise system. An experiencedconsulting firm can work directly with your man-agement team to develop detailed strategies and ini-tiatives for franchise corporate development.

Key strategic tools that need to be in your toolboxinclude understanding operational readiness, how tohandle franchise sales, real estate procurement, train-ing and support, selecting the technology, brandingyour concept, marketing, accounting and finance.This can be a daunting list for even the most sea-

Franchising: The Team and the Tools

When it comes to entrepreneurial ven-tures, franchises are often viewed as asure thing or at least a safe bet. Because

we see so many of them, eat at many of them, andperhaps even get our hair cut at one of them, thecommon assumption is that they must be financiallysuccessful. While the best franchise in the worldcan’t guarantee success, the odds are stacked in favorof franchising as a business type. The benefits of aproven, executable operational model combinedwith brand awareness tend to give a franchisee a leg-up or edge over other start-ups. In fact, franchising asa business model is seeing record growth as we slow-ly exit the Great Recession. According to FranData,the largest collector of historical franchise data in theU.S., the demand for franchise units is expected toincrease by more than 12 percent this year, the high-est rate of increase since 2009. Separately, IHS GlobalInsight reported in its June update that the franchisesector will lead the nation’s economic rebound bycreating an estimated 220,000 jobs this year.

We can agree then that franchising, as a whole,is growing and adding jobs, but that generalitymeans little to the franchisee candidate who isconsidering a hefty investment in one specificfranchise.With so much at stake, how do you sep-arate the winners from the losers? How do youevaluate a particular brand’s likelihood of success?

While there are myriad factors to consider,understanding these five will make you more ofan expert than most.

Read and understand the Franchise DisclosureDocument (FDD). It is long, boring and will likelyrequire a double tall espresso to complete; even so,it specifies your rights and responsibilities, as well asthose of the franchisor. From the FDD, compile alist of questions to ask the franchisor. If the fran-chisor’s sales person cannot adequately answer the

questions, get the answers from a more senior-levelmember of the franchisor’s company.

Compare brands within the same sector orcategory. Rather than comparing a Taco Bell to anIHOP, evaluate brands within their respective cate-gory. Taco Bell is part of the quick service categorywhile Broken Yolk Cafe, IHOP, Denny’s andOriginal Pancake House all compete within thefamily dine category. A side-by-side comparison ofthese brands will show Broken Yolk to have thehighest average annual unit volume ($AUV) whileoperating the fewest hours per day. Further apples-to-apples comparisons can be made for key met-rics such as real estate costs, food and labor costs.

Look for brands that serve more than onedaypart. A daypart simply refers to a meal occasionsuch as breakfast, lunch or dinner. Brands that havemenus for two dayparts can more easily spread cus-tomer traffic and labor costs throughout the day.For example, compared to a sandwich shop whichserves the majority of its customers from 11 am to 2pm, Broken Yolk Café offers a wide menu of break-fast and lunch favorites, creating the likelihood ofsteady customer traffic throughout the day.

Interview as many franchisees as you can find.The contact information of all current and formerfranchisees is listed in the FDD. At Broken Yolk Cafe,our franchisees are the best source of day-in-the-lifeexperience. We encourage our candidates to talk toeach franchisee since each comes from varying busi-ness backgrounds, have been with us from sixmonths to seven years and chose to invest in BrokenYolk for different, albeit primarily financial, reasons.

Calculate the sales-to-cap ratio. While it can bedifficult to get to key metrics, the sales-to-cap ratiois a fairly easy to obtain, yet very useful, statistic.Sales-to-cap is simply the brand’s average $AUVdivided by the capital expenditures represented in

Item 7. Because the Item 7 total is represented as arange, you will end up with a sales-to-cap range.Look for brands whose sales-to-cap is at least 1:1,meaning the annual dollar sales (numerator) isequal to, or greater than, the total capital expendi-ture (denominator). A ratio less than 1:1 is analo-gous to an upside down or underwater mortgageand should throw up a red flag.

For example, using Broken Yolk’s 2013 average$AUV of 2.1 million per store, the sales-to-capratio ranges from 1.5:1 up to 3.7:1, the primarydifference being whether the unit is new construc-tion or converted from an existing restaurant. Ineither case, the ratio is well north of 1:1, making ita worthy addition to your short list of brands tofurther consider.

While it’s easy to fall in love with a brandbecause you like the product, the marketing, or per-haps even the sales representative, remember thatfranchising is a long-term, typically 20-year, rela-tionship. Take your time and do your homework.

Information for this article was provided by BrokenYolk Café. Known for its from-scratch cooking, andfeatured on The Travel Channel’s “Man v Food,”Broken Yolk Café is the owner and/or franchisor of 13restaurants from San Diego to Orange County. Formore information, visit www.brokenyolkfranchise.com.

Is Franchising a Sure Thing? It Depends…

Continued on page 66

This special advertising supplement did not involve the reporting or editing staff of the Los Angeles Business Journal.

59 67_franchisingguide.qxp 7/24/2014 7:03 PM Page 59

60 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL JULY 28, 2014

By BARRY KURTZ AND DAVID GURNICK

Franchising is a large part of theeconomy. According to the Inter-national Franchise Association,

franchising accounts for more than sixpercent of nonfarm jobs, four percent ofU.S. payroll and nearly four percent ofU.S. Gross Domestic Product.

Thousands of franchisors select fromamong millions of potential franchisees.To get the best, franchisors should devel-op a profile of the ideal franchisee fortheir particular system. Here are some keycharacteristics to look for in prospectivefranchisees for any franchise system:

Honesty and integrity. Franchisees rep-resent the franchisor’s brand. They servethe public, receive payment, and share therevenue with the franchisor in the form ofpercentage royalties. For all these reasons,honesty and integrity are essential.

Strong work ethic. Franchisees do thedaily work where the franchisor’s brandmeets the public. A good work ethic is crit-ical so that this work will be performedenthusiastically, and with dedication.

Willingness to follow the franchisor’ssystem. A successful franchise system isan organization in which franchisees giveup some independence in reliance on thewisdom, experience and good judgmentof their franchisor. It is important to selectfranchisees who are willing to follow theprecepts and procedures that comprisethe franchisor’s system.

Over the course of a lifetime, many

people will buy a franchised business forthemselves or invest in a franchise to berun by a family member, friend or part-ner. In evaluating the many availablefranchise opportunities, here are somequalities to look for in a franchisor.

Good business and activity fit. Res-taurant franchises involve lots of hands-on work and engagement with customersand suppliers. After-school enrichmentfranchises require working with schooladministrators, teachers and kids. Realestate franchisees do lots of selling, anddriving around customers. Office work ispart of almost every franchise. Look for abusiness in which the daily activity alignswith what you like to do; avoid franchis-es with activity you dislike.

Competence. Check carefully that thefranchisor has deep knowledge of the bus-iness they operate in. Look for a record ofadjusting and overcoming challenges inthe past and a plan or procedure foraddressing surprises in the future.

Balance of firmness and flexibility.Good franchisors are serious aboutenforcing requirements of their franchisesystem, to achieve uniformity of opera-tions and customer experience among allfranchisees. The best franchisors do thiswith good cheer, finding the way to keepgood relations with franchisees. They alsoknow when to listen, welcome ideas, andflexibly embrace the needs of franchisees.

Satisfied franchisees. One of the mostimportant signs of a healthy franchisesystem is a high level of satisfaction

among franchisees. This comes easier inprofitable systems, but surprisingly, insome profitable systems many franchiseesare frustrated at the demeaning attitudeand harsh treatment from their fran-chisor. Check with current, and formerfranchisees about their satisfaction withthe franchisor.

Profitability. Because franchisor rev-enue is a percentage royalty, a franchisorcan be profitable even when franchiseesare not. It is important to know if thefranchisor and franchisees are profitable,and how much. Look at the franchisor’sfinancial statements (their disclosure doc-ument provides these going back threeyears). Some franchisors also providefranchisee earnings information in Item19 of their Disclosure Document. Butthat information can be carefully struc-tured to look good. Interview severalexisting and former franchisees to abouttheir income and profitability.

Long term commitment. Many fran-chisees invest based on respect for thefranchisor’s management and then findthemselves dealing with different people.Some franchisees who loved the cultureat the Century 21, Coldwell Banker, ERAand Better Homes franchise systems, weredisappointed when the owners sold. To-day these brands are all owned by thesame public company, Realogy and manyfranchisees feel the culture has changed.Investigate whether the managementwho recruits you will be there in thefuture to work with you.

Relatively Balanced Agreement.Franchise agreements tend to favor fran-chisors. Their lawyers write the agree-ments as a tool for the franchisor tomaintain system uniformity among indi-vidual franchisee owner operators. Butagreements that are too one-sided placefranchisees at the mercy of the fran-chisor’s whims and judgments. Thismakes even a currently profitable fran-chise highly risky to invest in. Look foranother system where the agreement ismore balanced.

Financial Strength. Make sure the fran-chisor is financially strong. The franchisorneeds funds to maintain the system, updateits services and products, provide support tofranchisees, advertise to the public, andrespond to business challenges.

Experience. A franchisor whose man-agement has deep experience in the busi-ness and industry is preferred over sys-tems whose management experience isweak, or from other industries.

Care and thoughtfulness by fran-chisors and franchisees in selecting eachother lead to the most successful fran-chise relationships.

Barry Kurtz and David Gurnick are CertifiedSpecialists in Franchise and DistributionLaw, designated by the State Bar ofCalifornia Board of Legal Specialization, atLewitt Hackman in Encino. Kurtz is theChair of the Practice Group. Contact themvia email at [email protected], [email protected].

What to Look For in a Franchisee or Franchisor

FRANCHISING GUIDE

REGISTER FREE NOW AT:

WCFExpo.comUSE PROMO CODE: LABJ

OCTOBER 23-25, 2014ANAHEIM CONVENTION CENTER

ANAHEIM, CA

Are you ready to take control of your own destiny, fulfill that dream and have a better quality of life with financial security? Consider owning a franchise. A franchise allows you to bein business for yourself but not by yourself, with a provenbusiness system that gives you endless support and branding.

At the West Coast Franchise Expo: • See 200+ leading franchises

• Attend 40 educational seminars • Get answers to all your franchising questions

Register today, it’s Free!Take charge of your future!

®

The King of Clean

Follow us on:


JULY 28, 2014 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 61



By DAVE WELLS

Investing in a franchise is a life-chang-ing decision. The information avail-able can be overwhelming. I hope to

provide insight into a few key areas thatwill help narrow your choices. By takingthese into consideration, you can identifya franchise opportunity that is not onlyfinancially sound, but will also contributeto your overall quality of life.

Passion

Inevitably, when evaluating criticaldecisions, a well-intentioned friend willadvise you to follow your passion,recounting quotes like “Follow your pas-sion and success will follow you.” This maysound great but is it really all that help-ful? Don’t misunderstand me – if there isa franchise model that you are extremelypassionate about, follow! However, youmay not exactly be passionate aboutmaking sandwiches, preparing taxreturns, or cutting hair.

Instead, ask yourself a larger question– how will the franchise help you pursueother passions? If you’re passionate aboutpeople, an owner-operator model mayprovide the day-to-day interaction youseek. If you’re passionate about coachingyour kid’s team, a semi-absentee modelmay provide the flexibility to pursueother activities.

At Sport Clips, our semi-absentee,manager-run model does not require youto be in the business on a daily basis.You’ll purchase three licenses to develop

over a three year period and spend 10-15hours a week working on your business.After three stores are built out, manyfranchisees continue to grow their hold-ings and find flexibility by transitioningto Sport Clips full time. Others use SportClips to supplement their income andpursue other passions professionally.

Fit

Once you narrow your options, askquestions like “Can I see myself doing thisfor the next 10, 20 or 30 years?”, and “Do Ifit well with the company’s culture and val-ues?” These are “fit” questions and willhelp you eliminate companies that don’talign with your way of thinking.

Conversely, companies should also beevaluating your fit for their organization.If a company is not serious about yourqualification and ability to be successfulwithin their system, now would be agood time to run! If they are not con-cerned about your fit, they won’t be con-cerned about the fit of other candidates,either. A system full of underqualifiedfranchisees is not a system of which youwant to be a part!

Don’t underestimate the importanceof culture and values. Many companieswill try to impress you with a well-writ-ten mission statement and set of values.If you don’t see these values exemplifiedin your interaction with the company,then what is the point?

At Sport Clips, we are very selective.Candidates are qualified through financialreview, personality assessment and direct

interaction. Ultimately, decisions arebased on a simple set of values borrowedfrom Coach Lou Holtz’s Do Right plan: Dowhat is right, do your best and treat oth-ers the way that they want to be treated.

Due Diligence

At some point you will receive theFranchise Disclosure Document (FDD), astandardized, federally-mandated docu-ment that makes it easier to comparefranchise systems. Unfortunately, thiscomparison only works if you know whatto look for.

Many will highlight the importance ofItems 5, 6 and 7, which outline the initialand ongoing costs, and Item 19, the onlyfinancial performance information a fran-chisor is legally able to provide. However,many miss Items 9 and 11, whichdescribe the roles and responsibilities ofthe franchisor and franchisee, and Item20, which gives insight into the true per-formance of the system by detailing clo-sures, terminations, non-renewals andtransfers.

Of course, this information is uselesswithout validation. A good franchisorwill encourage conversations with asmany franchisees as possible to validateassumptions and fine tune your businessplan. Conduct your own gap analysis toensure the franchisor has systems inplace to supplement areas where you per-ceive yourself to be weaker.

At Sport Clips, we focus on trans-parency. Before we sign contracts, wemake sure you have looked under the

rug, checked the closet for skeletons andknow exactly what you are getting into.In the end, we want to make sure thatyou’ve made your decision based on ALLof the information available to you.

In summary: • Don’t be blinded by passion. Use

this as an opportunity to move toward it. • Focus on fit in addition to profitability. • Don’t settle for anything less than

100% transparency.Keep these in mind as you evaluate

your options, and you will come out ofthis process feeling good about your deci-sion and its impact on your quality of life.

Dave Wells is Director of Franchising forSport Clips Haircuts, a men’s hair care fran-chise based in Georgetown, Texas. To learnmore, call 1-800-872-4247 x1, or visitSportclipsfranchise.com.

Cutting Through the Clutter

FRANCHISING GUIDE

It’s TrueBroken Yolk is Coming to Los Angeles!

Join us for a Franchise Open House

It’s TrueBroken Yolk is Coming to Los Angeles!

Join us for a Franchise Open House

THEBROKENYOLKCAFE.COM

Tuesday, August 26Hilton Woodland Hills (Warner Center)

7:00 pm - 9:00 pmOR

Thursday, August 28Marriott Courtyard Burbank

7:00 pm - 9:00 pmTO REGISTER

visitbrokenyolkfranchise.com

WHAT SETS BROKEN YOLK APART?$2.1 million average AUV

(annual unit volume)

9-hour operating day

Satisfied Franchisees

Real Estate Flexibility(new builds &

2nd generation)

Desirable Territories

With San Diego and Orange County territories sold out,we’re looking for franchisees in

Los Angeles, Riverside and Ventura Counties.



FRANCHISING GUIDE

By ANDREW GARSTEN

HOW do you decide which is theright business to invest in?Below are some of the broad

characteristics of a business that can helpdefine the probability of success.

Demographics

While the mass media primarily focus-es on the youth segment of the market,the largest population group remainsthose born between 1945 and 1964. Thebaby-boomer generation controls the vastmajority of cash and capital within themarket. As baby boomers grow older,they have become increasingly focusedon their personal health and wellness.Skin care products, massage therapy, chi-ropractic services and health clubs are allgrowing segments of the health and well-ness industry, led by the demands of theaging baby boomer generation. Andwhere the boomers go, trends and wholeindustries are created that the youngergenerations follow.

Internet vs. Personal Services

Internet commerce has made the busi-nesses environment much more competi-tive: Buying from overseas requires littleif any more effort than buying locally;Niche markets aggregate into reasonablemarkets; and copy-cat competitors ariseas quickly as opportunities are recog-

nized. In contrast, Personal Services busi-nesses that require a human touch can-not be copied, commoditized or soldelectronically across the globe.

Fads vs. Classics

Often, the businesses that look mostexciting are the newest ones on thescene. For the lucky few that get in onthese businesses early, substantial profitscan be made. However, if the product orservice does not fundamentally fulfill acustomer need, it will soon be replacedby the next new product or service of itstype. Consequently, the “new” fad willquickly become an “old” fad, with a cor-responding loss of customers and rev-enue. A product or service is a “classic” ifit has existed in one form or another overa long period of time. Classic businessesdo change, but they change slowlybecause they succeed in serving a funda-mental need in the market, and are noteasily displaced by newcomers.

Recurring Revenue Models

Businesses that primarily offer singletransactions, where a customer makes apurchase and then leaves, have inconsis-tent revenue streams. Unpredictable rev-enue models put a lot of strain on thecash reserves of a new business - under-capitalization is the leading cause of busi-ness failure. A business with a reoccurringrevenue model - usually membership or

dues, can deliver smooth revenue as wellas built-in retention of first-time clients.Recurring revenue businesses collectsteady revenue every day, are better ableto cover expenses, and see compoundgrowth by retaining a percentage of allfirst time visitors as on-going clients.

Franchising vs. Independent

When people think of franchising,they think of food businesses likeMcDonald’s, Jamba Juice or Subway. Inreality, franchising exists in all kinds ofbusinesses. Unless the business you investin is truly original and unique, theopportunity to develop your own busi-ness can be far more time consuming,expensive and riskier than the royalty feeyou pay with a franchise. Historically,franchises have a substantially higher rateof success compared with independentbusinesses. They offer a proven businessmodel with training, turnkey operations,group purchasing power, a built-in part-nership that offers ongoing support, and

branding that offers both predictabilityand convenience to customers. Plus, afteryou learn the system, replicating is verystraightforward.

Leaders vs. Followers

Market Leaders set the market bench-marks in terms of brand, revenues, num-ber of clients, and/or innovation.Conversely, Followers will essentiallycopy a leader, and competes with theleader for clients. Leaders usually havethe advantage of greater margins andprofitability, which it can reinvest in cre-ating greater separation from competi-tors. In general, if you can invest in abusiness that is a leader, it has a higherchance of success and greater returns oninvestment than a follower.

An Example of a Great Franchise Opportunity

Massage Envy Spa is the leadingprovider of therapeutic massage in theUnited States. Founded in 2002, it hasnearly 1,000 franchise locations in 49states and 1.5 million members, with anaverage unit volume of $1.35 million alocation. For more information, visitMassageEnvy.com.

Since 2004, Andrew Garsten has been theRegional Developer (Master Franchisor) ofMassage Envy Spa in the Los Angeles area. Hecan be reached at [email protected],or (323) 702-1647.

Characteristics to Consider When Evaluating a Business Opportunity

The baby-boomer generation

controls the vast majority of cash

and capital within the market.

As baby boomers grow older,

they have become increasingly

focused on their personal health

and wellness.

59 67_franchisingguide.qxp 7/24/2014 7:06 PM 4


By THOMAS D. LEAPER

In the franchise world the importanceof timely and accurate financial re-porting, and its impact on the success

or failure of a franchise system, is rarelymentioned. Next to selecting the fran-chise business concept and marketing ofthe concept, financial reporting is treatedas a downright “red-headed stepchild.”And, while concept and marketing areinarguably essential to the success of abusiness, many a franchise has seen itsdoom due to the neglect of implementingeffective financial reporting systems.

In all of the successful companies Ihave been involved with, the commoningredient has been a strong financialreporting system. Having access to reliabledata ensures the ability to make informedbusiness decisions and to gauge the met-rics that are deemed important. I can statewith absolute certainty that I have neverwitnessed more substandard financialreporting habits than those found in thefranchise industry. And it is even worse inthe early-stage efforts where accuratereporting matters most. In my opinion, itdoesn’t have to be this way!

External Reporting: Franchising is a

Regulated Industry

Significant effort and resources arespent developing the Franchise DisclosureDocument (FDD) that must be filed with-in the state(s) that the new franchise willbe operating in. It is the single most criti-cal document in launching and renewinga franchise. The FDD is a legal document

presented to prospective buyers of fran-chises in the pre-sale disclosure process.The same FDD format is used for all fran-chisors, despite the industry. There are 23items detailed in the FDD of which thefranchisor must understand and comply.

The FDD line item that is least dis-cussed is Item 21, Financial Statements. Aset of audited financial statements isrequired to accompany the FDD. It isimportant to select the right accountingfirm to help you make sure that yourfinancial statements are in compliancewith current accounting rules. Franchisingis a highly technical industry. It has spe-cial accounting rules that must be fol-lowed - especially as it relates to revenuerecognition and deferral. Additionally,many states have specific financial metricsthat must be met. Accounting firms thatmerely dabble in the franchise industrycannot help you navigate these importantareas. Be certain you engage a firm withthe required expertise as many people(and states) will make critical decisionsabout your enterprise based on the finan-cial statements included within your FDD.

Internal Reporting: Franchisee vs. Franchisor

Hands down—the major pain point inthe franchisor/franchisee relationship isfinancial reporting—or lack thereof.Franchisors need timely reports from thefranchisee so they can collect royalties on atimely basis and evaluate the financial per-formance of the franchisee. In most cases,this information is just not available. Thispain point is a direct result of the lack of anestablished accounting and financial report-

ing solution as part of the franchise package. Franchisees receive highly detailed plans

outlining how to maintain a uniform cus-tomer experience at their particular fran-chise location. Sadly, it is very rare for fran-chisees to receive a standardized accountingand financial reporting system to go alongwith these plans. This leaves a huge void inthe process of setting up the daily operationof a new franchise. It also creates a bottle-neck in the reporting and payment of roy-alty fees to franchisors and deprives themof the capability to analyze individual storeoperations and compare them against therest of the units in their franchise system.

The financial accounting and reportingneeds of a new business is the “red headedstep child” of the franchise industry. This isthe stepchild that cannot be ignored. It mustbe a daily endeavor that is carefully takencare of before (not after) starting a new fran-chise. Many important business decisionsthat a new business owner makes will hingeon how reliable and accessible their financialinformation is. The fact that this process isignored during the pre-launch process is notonly bad business, it is just wrong.

Financial accounting and reportingneeds must be brought into the planningand daily operations of a new franchisebusiness. If this is done properly, it will givethe entrepreneur the best chance to succeed.

Thomas D. Leaper is Partner In-Charge forRBZ Franchise Services Group. For questionsabout this article or for more informationabout the services RBZ’s Franchise ServicesGroup can provide, contact Leaper at (310)478-4148 x5759 or via [email protected].

soned franchisor and is another exampleof how a franchise consultant can help.They can provide or work directly withstrategic partners to develop a custom-ized set of tools that are integral to thecompany. A franchise consultant canalso help support operations, growth ini-tiatives, and franchisees.

A franchise cannot be called a fran-chise without Franchisees. A successfulFranchisor-Franchisee relationship canbe very profitable, but like any relation-ship, it takes work to make sure thingsstart off on solid ground. Obviously, anattractive franchise package thatincludes all of the tools a franchiseeneeds to run their business with willdraw a lot more interest than a packagethat is not as well defined. The key tomaking the relationship work is a com-mitment to doing whatever it takes tobe successful. If the Franchisor hastaken the time to build their advisoryteam and the infrastructure needed tosupport their entire franchise system,they should find success walkingthrough their door as soon as the“open for business” sign is turned on.

Larry Schwartz is Director & Senior Con-sultant for RBZ Franchise Services Group.For questions about this article or for moreinformation as to how the RBZ FranchiseServices Group can help provide the rightteam and the right tools for your concept,contact Schwartz directly at (310) 478-4148 x5759 or via [email protected].

Continued from page 59

FRANCHISING GUIDE

Ease of Operations• No cooking, dine-in or delivery

• Limited operating hours• Limited space requirements

A Successful System• Over 1,400 stores open nationally

• Proven brand with a 33 year history• Lower initial investment than other restaurants

1-877-777-5062 orpapamurphysfranchise.com

Register for an upcoming Franchise Webinarpapamurphysfranchise.com/upcoming-events

Get it as itHappens.

Local Business News fromYour Local Business Source.

News & Reports @LABJnewsEvents, Awards & Promotions @LABJcommunity

The Importance of the ‘Red-Headed Stepchild’



59 67_franchisingguide.qxp 7/24/2014 9:28 AM Page 67

59 67 franchisingguide.qxp 7/24/2014 7:03 pm page 59 ... · tures, franchises are often viewed as a...

Documents