What is a Franchise?

A franchise is actually an agreement between two independent parties which grants certain rights and sets obligations. Some of these are:

The right to market a product or service under a trademark or trade name
The right to market a product or service using particular operating methods
The obligation of the Franchisee to pay Franchisor for rights
The obligation of the Franchisor to provide training

This agreement is the foundation of a successful franchise system.

In summary, a franchise is an agreement between a Franchisor and a Franchisee. A Franchisor has trademarked a brand for a service or product and wishes to grant rights to the Franchisee in exchange for obligations. The obligations of the Franchisee come in the form of ongoing payments. Obligations of the Franchisor are usually to provide ongoing support and training.

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What are the Pros and Cons of Franchising?

Franchising offers many advantages to the Franchisee which make franchising and attractive business model. Some of these advantages are:
• A franchise increases the chances of business success because of the association with a proven product or service
• A franchise provides a level of training and support
• A franchise allows the franchisee a certain level of freedom in where they can run their business

As with any thing else, there are disadvantages, listed are just a few:
• Franchises require strict adherence to proven operational systems and the franchisee forfeits some independence
• There are fees associated with franchises such as, ongoing royalties and advertising fees
• The length of the franchise agreement may be limiting to the franchisee

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What is the Process for Buying a Franchise?

1. Selection – Browse our franchise listings and select one that interests you. Complete the form and submit.

2. Consultation – Your request will be assigned to one of our expert consultants and you will be contacted to discuss your business goals and life objectives.

3. Presentation – After reviewing your specific needs, your personal consultant will research and match your needs with a choice selection of franchises. They will present each concept to you, explaining how each meets your needs.

4. Evaluation – This stage is where the heavy lifting begins. With the assistance of your personal consultant you will then begin your due diligence process on your top one or two concepts. You will be provided tools and a plan to follow to properly research and compare franchises. Questions to ask existing franchisees, comparison sheets, legal and accounting references are just a few of the tools provided at this stage.

5. Decision – At this point you will have gathered enough data, researched each prospective franchise and preformed a thorough and diligent investigation. Armed with this information you will be able to make a confident decision as to which franchise is the one for you.

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Who Typically Buys Franchises?

Actually, it’s someone like you. Today’s franchise buyer is a success-minded, well-educated individual who value their family and has a keen sense for business. More times than not, coming from a corporate background.

A long-term study conducted by the International Franchise Association shows that the typical franchise buyer has the following characteristics:

• Generally Between 35 and 55 Years of Age
• Management Experience at a Corporation
• Average Income of $80K to $150K
• Net Worth of $300K to $800K
• Majority Have IRA/401K Retirement Plans
• Men, Couples, Women in that order
• Most Have Not Previously Owned a Business
• Want to Build a Business That Will Allow Them to Retire
• Looking for On-going Marketing, Training and Support

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What is a Franchise Consultant?

A franchise consultant is an expert in the field of franchising who is utilizing their depth of knowledge to assist a franchise buyer in selecting a franchise concept that meets a specific set of buyer objectives. 

With the thousands of possible franchise options to choose from, a you may feel overwhelmed and unsure of where to start. A franchise consultant will guide you through the franchise decision process, while adding valuable insights. This service is also valuable to those who sell franchises.

By using a consultative process, the franchise consultant identifies potential, qualified buyers for franchisors. This service saves the franchisor time and money. As far as compensation, the franchisor gladly pays the franchise consultant for this valuable service. There is no fee to the franchise buyer.

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How Can FranFinders Help Me?

We pride ourselves with listening to our clients and understanding what their reasons are for owning a business.  We understand that everyone has unique situations, and with that, using our consultative approach will identify personalized solutions.

Some of the questions we ask to determine your objectives are:

• Why do you want to own a business?
• Do you have previous business ownership experience?
• What type of working hours are you looking for?
• Is there a particular area you would like your business located? 
• How are your people management skills?
• How much capital do you have to start a business with? 
• Will you have partners?
• Do you want to build multiple units? 
• What is your timeframe for starting your business?
• Will you be involved on a full-time or part-time basis?

Once we have the answers, we then research and match your objectives with current franchises.  A choice selection will be presented to you, keeping your goals in mind.

At the end of the process, you will have reviewed and researched your top selections with enough information to make an informed decision.

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Is there Financing Available?

FranFinders will be able to direct you toward multiple funding sources that are available.  Our consultants will be able to guide you seamlessly through the entire franchise buying process, including financing. 

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What is the Return On Investment (ROI)?

The return on investment varies with every franchise opportunity.  Sometimes the franchisor can provide the return on investment information based on the current franchisees in their system, however, each opportunity will vary.  We recommend that you address this question with each franchisor when completing your due diligence research.

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What is the Time Frame to Start?

A franchise purchase is dependent on the candidate’s time frame and territory availability. Typically, the franchise purchasing process can take as little as 30-60 days, however, there are factors may lengthen the time frame. Financial qualificaions are one of those factors. It is wise to start getting prequalified financially with a lender early in the process.  Your franchise consultant can help you with this process. 

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Is there an Earnings Claim?

This is probably one of the most frequently asked questions. The earnings claim, referred to as Item 19 in the UFDD (Uniform Federal Disclosure Document), may be disclosed, however, most franchisor’s tend not to provide this information due to liability issues.  Your due diligence will help you determine if a frachise is right for you.

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What is Discovery Day?

Discovery Day is a time where the franchisor would invite an interested candidate to their corporate headquarters to meet the staff they will be working with. 

Typically, the Discovery Day lasts one to two days.  The candidate will often meet the franchise owner, the franchise developer, the operations staff and other key component people who will be working with you.  Both parties are evaluating each other to see if they would be a compatible fit for each other.

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Do I Need to have Experience in the Industry?

Many franchisors do not require you have a background in an industry you desire. When you speak to the franchisor, they typically will tell you what skill set you need to be a successful franchisee. Basically, if you follow the franchise system the way it is outlined, you have a high probability of success. 

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How Much does FranFinders Charge?

We do not charge a fee for our consulting services.  Our services are paid for by the franchisor at the time a franchise agreement is signed.  Even if you decide not to use the service of FranFinders, the franchise fee you pay to the franchisor will not be reduced.

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