Representitives:Angie Li, Josh Steinegger,

Michelle East, Susanna Harbach

Franchise

• “A franchise is a business model that involves one business owner licensing trademarks and methods to an independent entrepreneur”. --U.S. small business administration

Brand name, training, marketing plan, management support

Pay fees

Franchise Types• Product distribution franchises

o Franchisor licenses its trademark and logo to the franchisees           o example: Coca-Cola, Goodyear-Tires, Ford Motor company

• Business format distribution franchiseso provides to franchisee a full range of services, including site selection,

training, product supply, marketing plans and even assistance in obtaining financing.

o example: Wendy’s, Great Clips, UPS store

Franchise Arrangement Types• Single-unit (direct-unit)

•  Multi-unit

Franchisor franchisee Franchise unit

Franchisor franchisee Franchise unit

Franchise unit

Franchise unit

Self Evaluation

Motivated by results

Chief Cheerleader

Step 1: Self Evaluation

Step 2: Pick a Franchise Consultant to Assist You

Step 3: Research

Pros and ConsPros Cons

Name recognition

Support management

Long-standing training program

Prepared material and equipment

Small business learning experience

High franchise fees

Limited control

Limited duration

Company trouble can impact the local business

Step 4: Attend “Discovery Day”Step 5: Speak to Other Franchisees1.“In the beginning, the last person paid is you”2. Unknown competitors3. Closed stores4. Change in demand5. New laws or government regulations 6. More than making money7. Marketing support and training 8. Hype of a company. Check the facts with other sources.

Step 6 Find a suitable location• High demand of products and services• Relatively low competition

Step 7 Choose a franchise and secure funding

• Measure the potential growth• Compare companies’ business model• Six common cost

Franchise FeeLegal FeesBuild-Out Costs    Inventory Supplies working capital

Source: Fro Yo Spot Frozen yogurt

Franchise Cost by categories

• http://www.franchise.com/franchise-news/Basic_Cost_By_Category.cfm

Source: http://www.entrepreneur.com/franchise500/index.html

Top 10 Franchises for 2014

Secure funding

• Funding budget sources:o Government loans-U.S. Small Business Administration (SBA) loanso Bank loanso Franchiser internal financing

Step 8: Sign the AgreementStep 9: Obtain All Necessary Permits and

Insurance

Step 10: Hire Staff and Attend Training

•Who you hire• The kinds of training usedOperations Manual

Headquarters TrainingOnsite TrainingOngoing TrainingTrain, Train, and Over-trainTest for Competence

• Soft VS Grand Openings

ACTIVITY