Franchising and the Franchising and the EntrepreneurEntrepreneur

Where else can we find a job Where else can we find a job creator, an economic stimulator, creator, an economic stimulator,

and a personal wealth creator that and a personal wealth creator that gives the opportunity to realize gives the opportunity to realize

dreams and financial security for dreams and financial security for families beyond wildest families beyond wildest

expectations?expectations? …Dan DeBolt …Dan DeBolt

FranchisingFranchisingA system of distribution A system of distribution

in which semi-in which semi-independent business independent business owners pay fees and owners pay fees and royalties to a parent royalties to a parent company in return for company in return for the right to become the right to become identified with its identified with its trademark, sell its trademark, sell its products and services, products and services, and use its business and use its business format and systemformat and system

Types of FranchisingTypes of Franchising

Trade nameTrade name Product Product

distributiondistribution Business Business

formatformat

Benefits of Buying a Benefits of Buying a FranchiseFranchise

Management training and supportManagement training and support Brand name appealBrand name appeal Standardized qualityStandardized quality National advertisingNational advertising Financial assistanceFinancial assistance Proven products and business formatsProven products and business formats Centralized buying power Centralized buying power Site selection and territorial protectionSite selection and territorial protection Greater chance of successGreater chance of success

Drawbacks of Buying a Drawbacks of Buying a FranchiseFranchise

Franchise fees and ongoing royaltiesFranchise fees and ongoing royalties Strict adherence to standardized Strict adherence to standardized

operationsoperations Restrictions on purchasingRestrictions on purchasing Limited product lineLimited product line Contract terms and renewalContract terms and renewal Market saturationMarket saturation Less freedomLess freedom

10 Myths of Franchising10 Myths of Franchising Safest way to goSafest way to go Less money to openLess money to open Bigger franchise organization, Bigger franchise organization,

more successfulmore successful Use 80% of business formatUse 80% of business format All are the sameAll are the same No need for hands-on No need for hands-on

managementmanagement Anyone can be successful Anyone can be successful Cheapest way to get into businessCheapest way to get into business All problems will be solvedAll problems will be solved Run things the way I want toRun things the way I want to

Franchising and the LawFranchising and the Law

Uniform Uniform Franchise Franchise Offering CircularOffering Circular (UFOC)(UFOC)

Federal Trade Federal Trade Commission-Commission-Trade Regulation Trade Regulation RuleRule (23 major (23 major topics)topics)

Right Way to Buy a Right Way to Buy a FranchiseFranchise

Evaluate yourselfEvaluate yourself Research your marketResearch your market Consider your optionsConsider your options Get a copy of their UFOCGet a copy of their UFOC Talk to existing franchiseesTalk to existing franchisees Ask some tough questionsAsk some tough questions Make your choiceMake your choice

Trends Shaping Trends Shaping FranchisingFranchising

Multiple-unit franchisingMultiple-unit franchising-a -a method of franchising in which method of franchising in which a franchisee opens more than a franchisee opens more than one unit in a broad territory one unit in a broad territory within a specified time period within a specified time period

11%11%

TrendsTrends

International International OpportunitiesOpportunities

ChinaChina-1,900 -1,900 franchises, franchises, 82,000 outlets82,000 outlets

McDonaldsMcDonalds-119 -119 countries, countries, 10,000 outlets10,000 outlets

TrendsTrends

Smaller, nontraditional locations-Smaller, nontraditional locations-interceptintercept marketingmarketing: the : the principle of putting a franchisee’s principle of putting a franchisee’s products or services directly in products or services directly in the paths of potential customers, the paths of potential customers, wherever they may be wherever they may be

ex. Dunkin Donutsex. Dunkin Donuts

TrendsTrends

Conversion FranchisingConversion Franchising-a -a franchising trend in which franchising trend in which owners of independent owners of independent businesses become franchisees businesses become franchisees to gain the advantage of name to gain the advantage of name recognitionrecognition

ex. Century ex. Century 2121

TrendsTrends

Master FranchisingMaster Franchising-a franchise -a franchise that gives a franchisee the that gives a franchisee the right to create a semi-right to create a semi-independent organization in independent organization in a particular territory to a particular territory to recruit, sell, and support recruit, sell, and support other franchiseesother franchisees

TrendsTrendsPiggybackingPiggybacking-a -a

method of method of franchising in which franchising in which two or more two or more franchises team up franchises team up to sell to sell complementary complementary products or servicesproducts or services under one roofunder one roof

ex. Taco Bell, KFC, Pizza ex. Taco Bell, KFC, Pizza Hut, A&W-Yum! BrandsHut, A&W-Yum! Brands

TrendsTrends

Serving Serving Dual-Career Couples Dual-Career Couples

And And Aging Baby BoomersAging Baby Boomers