Francorp

The World Leaders In Franchisingwww.Francorp.com

Webinar ExpectationsWebinar Expectations

• Open ForumOpen Forum

• 45 Minutes w/ 15 Minute Q&A45 Minutes w/ 15 Minute Q&A

• E-Book and SlidesE-Book and Slides

FrancorpFrancorp

• Francorp ConsultingFrancorp Consulting

• Francorp ConnectFrancorp Connect

• Francorp InternationalFrancorp International

Reasons to FranchiseReasons to Franchise

• Money Money

• PeoplePeople

• TimeTime

Ways to Raise CapitalWays to Raise Capital

• Internally GeneratedInternally Generated

• DebtDebt

• Venture CapitalVenture Capital

• FranchisingFranchising

Franchise FeesFranchise Fees

• Designed to Cover InvestmentDesigned to Cover Investment

• Cost Recovery Cost Recovery Marketing for FranchiseesMarketing for FranchiseesTrainingTrainingSupportSupportX-FactorX-Factor

Ongoing RevenueOngoing Revenue

• RoyaltyRoyalty Percentage BasedPercentage Based Average 6%Average 6% Gross SalesGross Sales WeeklyWeekly

• Product SalesProduct Sales• TechnologyTechnology• Must Provide Ongoing ValueMust Provide Ongoing Value

ExampleExample• Average Francorp Client Sells Average Francorp Client Sells – 9 Franchises in Year 19 Franchises in Year 1– 11 Franchises in Year 211 Franchises in Year 2– 13 Franchises in Year 313 Franchises in Year 3– Total of 33 in 3 YearsTotal of 33 in 3 Years

• Average Franchise Fee = $35,000Average Franchise Fee = $35,000• Average Royalty = 6% of Gross SalesAverage Royalty = 6% of Gross Sales• Assume Business Grosses $500,000Assume Business Grosses $500,000

Example ContinuedExample Continued

• Results Over the 3 Year Period:Results Over the 3 Year Period:• $1,150,000 in Franchise Fees$1,150,000 in Franchise Fees• $1,860,000 in Royalties$1,860,000 in Royalties• Over $3,000,000 in 3 YearsOver $3,000,000 in 3 Years

• Royalty has at least a 50% profit marginRoyalty has at least a 50% profit margin

Franchise Structures and Franchise Structures and ModelsModels

• IndividualIndividual

• Multi-UnitMulti-Unit

• Sub-FranchisorSub-Franchisor

• ConversionConversion

• 3 Pillars3 Pillars–Use of your NameUse of your Name–Use of you SystemsUse of you Systems– Payment of a FeePayment of a Fee

• Licensing Fulfills Only TwoLicensing Fulfills Only Two

Franchising Vs. LicensingFranchising Vs. Licensing

Legal Issues of FranchisingLegal Issues of Franchising

• Federal ComplianceFederal Compliance UFDDUFDD Format (23 items of disclosure)Format (23 items of disclosure) FAFA

• State ComplianceState Compliance 23 States23 States Registration Vs. FilingRegistration Vs. Filing

State ComplianceState Compliance

Registration Filing

Franchisability?Franchisability?

• Decent product/serviceDecent product/service• Great systemGreat system• TeachableTeachable• Nationally adaptableNationally adaptable• 15% Return on cash investment15% Return on cash investment• Plus manager’s salaryPlus manager’s salary

Who is a Franchisee?Who is a Franchisee?

• ““A” Students A” Students • Rule DrivenRule Driven• Track Record of CommitmentTrack Record of Commitment• Networked within their communityNetworked within their community• Physical staminaPhysical stamina• No Fishermen!No Fishermen!• No Entrepreneurs! No Entrepreneurs!

Why Buy a Franchise?Why Buy a Franchise?

• Developed Brand and SystemsDeveloped Brand and Systems

• Initial Training/Ongoing SupportInitial Training/Ongoing Support

• New Career/UnemployedNew Career/Unemployed

• Lower Failure RateLower Failure Rate

• Field SupportField Support

• Corporate MarketingCorporate Marketing

• Required System of OperationsRequired System of Operations

• No Guarantees!No Guarantees!

Franchisee RelationsFranchisee Relations

1. 1. Initial Client Meeting Initial Client Meeting 2. Research the Franchise Marketplace2. Research the Franchise Marketplace3. Strategic Planning Visit3. Strategic Planning Visit4. Franchise Structure4. Franchise Structure5.5. Franchise Revenue Sources Franchise Revenue Sources6.6. Franchise Business PlanFranchise Business Plan7.7. Franchise AgreementFranchise Agreement8.8. Franchise Offering CircularFranchise Offering Circular9.9. Franchise State RegistrationsFranchise State Registrations

Francorp DevelopmentFrancorp Development

Francorp DevelopmentFrancorp Development10.10. Operations OutlineOperations Outline11.11. Operations VisitOperations Visit12.12. Operations ManualOperations Manual13.13. Franchise Marketing PlanFranchise Marketing Plan14. Franchise Brochure14. Franchise Brochure15.15. Franchise Internet MarketingFranchise Internet Marketing16.16. Franchise Marketing TrainingFranchise Marketing Training17.17. Franchise Sales TrainingFranchise Sales Training18.18. Franchise Management TrainingFranchise Management Training19.19. Franchise ManualsFranchise Manuals20.20. Franchise Consulting and ImplementationFranchise Consulting and Implementation

Exit StrategiesExit Strategies

• Trade at 7-10x EBITDATrade at 7-10x EBITDA

Francorp

The World Leaders In Franchisingwww.Francorp.comThanks for joining us today.

800-FRANCHISEwww.Francorp.com