The franchise agreement is a legally binding document spelling out the rights and responsibilities of both the franchisor and franchisee.
Before you sign the agreement you should obtain as much information about the franchise as possible. Consider the following questions:
What are the details of the business?
* Do you have all the relevant information on the business?
* What is the track record of the franchisor?
* What are the franchisor's current motives for franchising?
* Does the franchise have a strategic plan and what are the plans for the future?
* What is the success rate of other franchisees in the same business?
What is included in the sale?
* Does the sale include the use of business name, products, reputation/goodwill, site location, advertising budget or back-up assistance?
* What are your intellectual property rights and obligations?
* What are the terms of sale of goods? Can you purchase them from outside the franchise network?
What are your obligations?
* What are your occupational health and safety obligations?
* What are your obligations upon termination of the franchise?
* Are there guidelines/costs when you sell the franchise?
* Are the operating procedures, employee responsibilities, and standards spelled out in the franchise manual?
What fees do you need to pay?
* An initial franchise purchase fee?
* Franchise renewal fees?
* Franchise service fees/royalties?
* Advertising fees?
* Transfer fees?
* Training fees?
Source: http://www.smh.com.au/small-business/resources/entering-into-a-franchise-agreement-20091218-l0hk.html
Tuesday, January 5, 2010
Monday, January 4, 2010
How much can you make by taking up a Franchisee???
By: James Walker - Staff Writer for Red Hot Franchises.com
How Much Money Can You Make as a Franchisee?
When investigating a franchise opportunity one of the most difficult pieces of information to get from the franchisor is how much money you might make. This may be frustrating because you are not going to invest in a business until you have a good idea of what you can earn. In most cases the franchisor is not being purposely difficult.
There are two reasons for the exclusion: first, there is no possible way to predict how well any one franchise can do over another, regardless of other franchise successes. A franchisee will likely take these facts to heart, pursue the opportunity, then begin to retaliate should these figures not come to fruition. Secondly, earnings claims will include financial gains and losses and people new to the business world have a difficult time understanding anything to do with “loss.”
Therefore, by keeping the earnings claim portion out, franchisors are less likely to lose a franchisee candidate during the early stages of the franchising process. But, that doesn’t mean they won’t show you some actual income statements from existing outlets. If you’re lucky to get some samplings, it will happen later in the process, at the point where the franchisor senses your willingness to move forward.
However, there are ways to get this essential information………..
The Back Door Approach to Getting the Numbers
If getting cold hard figures doesn’t seem possible, you will have to take another approach to determining if the franchise opportunity will make you money. Listed below are some good questions to ask.
1) How long have you been in business?
2) How long did it take you to get comfortable with your franchise?
3) Has your business been growing year by year?
4) How long before your business broke even each month?
5) Are you getting the support you were promised from the franchisor?
6) Do you see yourself in this business over the next 5 to 10 years? If no, why?
7) Is your annual salary after all these years where you’d expected it to be?
What’s a reasonable level of earnings for a franchise business?
Once you have earnings data, your next question will be whether the probable earnings represent a good return on your investment.
Remember that when you invest in a franchise, you are investing both your time/talent and your money. Therefore, you should reasonably expect a greater return than you would for a passive investment of money only.
If a good return for a passive investment is 15% to 20% per year, you will want to see a greater return in a franchise opportunity. After all, the time you put into your new business should yield you a return at least equal to the return on the money you invest, maybe not the first year but certainly down the road.
A second important point to consider is that a higher franchise investment does not necessarily mean a higher rate of return. While this seems contrary to common knowledge, there are plenty of low to mid-range investment franchises that provide great return on investments. Don’t limit yourself only to high-investment franchises when seeking that business with a high ROI.
How much money you will make as a franchisee depends on many factors - from the structure of the franchise (e.g. retail versus service), to how long your franchise has been operational, to how well you understand and embrace the system, to your enthusiasm for the business and how it will help you realize your dream. But, with a little research, you can get enough information to decide if this opportunity makes financial sense for you.
Source: http://www.redhotfranchises.com/articles/Franchise_Basics/How_Much_Can_I_Make?
How Much Money Can You Make as a Franchisee?
When investigating a franchise opportunity one of the most difficult pieces of information to get from the franchisor is how much money you might make. This may be frustrating because you are not going to invest in a business until you have a good idea of what you can earn. In most cases the franchisor is not being purposely difficult.
There are two reasons for the exclusion: first, there is no possible way to predict how well any one franchise can do over another, regardless of other franchise successes. A franchisee will likely take these facts to heart, pursue the opportunity, then begin to retaliate should these figures not come to fruition. Secondly, earnings claims will include financial gains and losses and people new to the business world have a difficult time understanding anything to do with “loss.”
Therefore, by keeping the earnings claim portion out, franchisors are less likely to lose a franchisee candidate during the early stages of the franchising process. But, that doesn’t mean they won’t show you some actual income statements from existing outlets. If you’re lucky to get some samplings, it will happen later in the process, at the point where the franchisor senses your willingness to move forward.
However, there are ways to get this essential information………..
The Back Door Approach to Getting the Numbers
If getting cold hard figures doesn’t seem possible, you will have to take another approach to determining if the franchise opportunity will make you money. Listed below are some good questions to ask.
1) How long have you been in business?
2) How long did it take you to get comfortable with your franchise?
3) Has your business been growing year by year?
4) How long before your business broke even each month?
5) Are you getting the support you were promised from the franchisor?
6) Do you see yourself in this business over the next 5 to 10 years? If no, why?
7) Is your annual salary after all these years where you’d expected it to be?
What’s a reasonable level of earnings for a franchise business?
Once you have earnings data, your next question will be whether the probable earnings represent a good return on your investment.
Remember that when you invest in a franchise, you are investing both your time/talent and your money. Therefore, you should reasonably expect a greater return than you would for a passive investment of money only.
If a good return for a passive investment is 15% to 20% per year, you will want to see a greater return in a franchise opportunity. After all, the time you put into your new business should yield you a return at least equal to the return on the money you invest, maybe not the first year but certainly down the road.
A second important point to consider is that a higher franchise investment does not necessarily mean a higher rate of return. While this seems contrary to common knowledge, there are plenty of low to mid-range investment franchises that provide great return on investments. Don’t limit yourself only to high-investment franchises when seeking that business with a high ROI.
How much money you will make as a franchisee depends on many factors - from the structure of the franchise (e.g. retail versus service), to how long your franchise has been operational, to how well you understand and embrace the system, to your enthusiasm for the business and how it will help you realize your dream. But, with a little research, you can get enough information to decide if this opportunity makes financial sense for you.
Source: http://www.redhotfranchises.com/articles/Franchise_Basics/How_Much_Can_I_Make?
Sunday, January 3, 2010
Is franchising for you?
By Roberto Pace on Saturday, 2 January 2010
How does a franchiser pick a good franchisee and is franchising for you?
For anyone who has aspirations to run their own business, franchising has long been considered a low-risk stepping-stone from employee to boss. It’s also a leap of faith.
For the business owner, franchising means placing their good name in your hands. For the franchisee, it’s taking a chance on a new way of life.
With 74 franchisees across more than 125 properties in Australia, New Zealand and Fiji, Quest Serviced Apartments has built its business on the franchising model. Quest franchisees come from all walks of life and some have made huge career changes to take on running a serviced apartment business. Among Australia’s Quest franchisees are former accountants, a nurse, a teacher, a chef and even a priest.
General manager of franchising, Nick Suriano, said the company’s investment into finding the right franchisees has been key to the success and growth of the business. “That really makes a difference: passionate, motivated people, implementing the best system,” he says.
Why franchising works
The franchise model has been extremely successful for Quest since its inception more than 20 years ago. Initially, some of the company’s properties were corporately owned and some were franchises. But Quest opted for a 100 percent franchise strategy when it was shown that the franchise businesses were outperforming the corporate properties.
“The results were quite polarised. It was almost chalk and cheese,” Suriano says. “The franchised properties were able to deliver a better bottom line. They had a smaller infrastructure and were run by motivated operators who were enthusiastic about driving their business. In almost every case where a business was converted to a franchised model, the performance doubled. Since we focused on franchising, the company’s growth has been in excess of 20 percent every year.”
How do you pick a good franchisee?
Quest receives more than 500 applicants for a year for an average of 10 franchised properties so competition is stiff. New Quest properties are only offered to existing franchisees and the company has a strict set of criteria, such as a proven financial track record, a clear business plan and a succession plan, making sure if they take on a second business that their first one does not suffer.
When it comes to new franchisees, Quest is looking for a number of qualities: business acumen, personal organisation, demonstrated leadership skills, strong sales orientation, communication skills and family and social support.
Franchise manager of Quest Newcastle and Quest Singleton, Belinda Stevenson, said the most important prerequisite for a franchisee is people skills: “You have to have a passion for people and you need to be customer focused because it’s a service industry.”
Employee versus franchisee
Franchisees agree that the number one difference between being an employee and a franchisee is responsibility. “The buck stops with you,” says Stevenson. Quest Ballarat Mews franchise manager Andrew Hoffman, said his responsibility “increased tenfold overnight”.
But with more responsibility, comes more reward. “It’s very satisfying to work for yourself,” Stevenson says. “And you have the franchiser and many other franchisees around you for support, which is a huge bonus.”
Suriano says more than anything he sees franchisees grow into great business people in their own right. “There’s a philosophy here that Quest is about creating business people. The Quest system empowers them to develop and use their management skills. If you’re thinking you’re sick of working so you’re just going to become a franchisee and sit in a back office, you’ve got the wrong attitude and you’ll fail.”
Benefits of being a franchisee
Those looking to take the step into running their own business will weigh up the pros and cons of a regular small business versus a franchise. Suriano believes one of the biggest arguments in favour of a franchise is the reduced risk for those starting out.
“There’s significantly less risk when you’ve got systems and processes and a strong brand behind you,” he says. “We’ve never had a business fail in 22 years. It’s a proven business. We do a lot of research before we select our next franchise opportunity.”
Support from head office and other franchisees is another advantage. “You’ll get excellent training, ongoing support, a refined business model, access to a strong customer market, a niche product, sales and marketing assistance and franchise mentoring,” Suriano says.
And finally, there is the power of a network of like minded people. “People love belonging and it’s a socially-charged network. It’s not just head office expertise, it’s also about sharing hundreds of years’ of experience and similarly-minded people with a desire to share ideas and resources.”
So when do you take the plunge?
For Hoffman, the decision to take on a franchise came down to the support the company offered. “It was the upfront training. If we were just going to buy a motel, I’m pretty sure we’d be broke by now. With those businesses, as long as you’ve got a chequebook, you’re in. I came from a building background—I was a roof tiler—so it was a complete change of lifestyle overnight.”
The two-week intensive training course Hoffman and his partner Sandy Cook undertook was invaluable and took away much of the risk of embarking on a new business. While Quest’s training was the sealer of the deal for Hoffman, it was by no means an overnight decision.
“For us, it was three years in the planning,” Hoffman said. “We talked about it for a long time, but I’m so glad we went that way. We’ve been there four-and-a-half years next month and we’ve never regretted it. You learn every day.”
For Stevenson, the decision to take on her own franchise was inspired by her own experience working in sales and marketing at Quest. “I’d always had a desire to own my own business and we’d looked at many other options and this was the best for us.”
Suriano says there were two distinct groups of franchisees; around half are home grown (former company employees) and the other half are new franchisees. “In terms of most of our franchisees, they would be in their mid-forties, probably sitting in a middle or senior management level job, looking beyond their current role to 20 years down the track and not liking what they see,” he says. “They see the whole business opportunity and the chance for independence.”
Source: http://www.dynamicbusiness.com/articles/articles-franchising/is-franchising-for-you4939.html
How does a franchiser pick a good franchisee and is franchising for you?
For anyone who has aspirations to run their own business, franchising has long been considered a low-risk stepping-stone from employee to boss. It’s also a leap of faith.
For the business owner, franchising means placing their good name in your hands. For the franchisee, it’s taking a chance on a new way of life.
With 74 franchisees across more than 125 properties in Australia, New Zealand and Fiji, Quest Serviced Apartments has built its business on the franchising model. Quest franchisees come from all walks of life and some have made huge career changes to take on running a serviced apartment business. Among Australia’s Quest franchisees are former accountants, a nurse, a teacher, a chef and even a priest.
General manager of franchising, Nick Suriano, said the company’s investment into finding the right franchisees has been key to the success and growth of the business. “That really makes a difference: passionate, motivated people, implementing the best system,” he says.
Why franchising works
The franchise model has been extremely successful for Quest since its inception more than 20 years ago. Initially, some of the company’s properties were corporately owned and some were franchises. But Quest opted for a 100 percent franchise strategy when it was shown that the franchise businesses were outperforming the corporate properties.
“The results were quite polarised. It was almost chalk and cheese,” Suriano says. “The franchised properties were able to deliver a better bottom line. They had a smaller infrastructure and were run by motivated operators who were enthusiastic about driving their business. In almost every case where a business was converted to a franchised model, the performance doubled. Since we focused on franchising, the company’s growth has been in excess of 20 percent every year.”
How do you pick a good franchisee?
Quest receives more than 500 applicants for a year for an average of 10 franchised properties so competition is stiff. New Quest properties are only offered to existing franchisees and the company has a strict set of criteria, such as a proven financial track record, a clear business plan and a succession plan, making sure if they take on a second business that their first one does not suffer.
When it comes to new franchisees, Quest is looking for a number of qualities: business acumen, personal organisation, demonstrated leadership skills, strong sales orientation, communication skills and family and social support.
Franchise manager of Quest Newcastle and Quest Singleton, Belinda Stevenson, said the most important prerequisite for a franchisee is people skills: “You have to have a passion for people and you need to be customer focused because it’s a service industry.”
Employee versus franchisee
Franchisees agree that the number one difference between being an employee and a franchisee is responsibility. “The buck stops with you,” says Stevenson. Quest Ballarat Mews franchise manager Andrew Hoffman, said his responsibility “increased tenfold overnight”.
But with more responsibility, comes more reward. “It’s very satisfying to work for yourself,” Stevenson says. “And you have the franchiser and many other franchisees around you for support, which is a huge bonus.”
Suriano says more than anything he sees franchisees grow into great business people in their own right. “There’s a philosophy here that Quest is about creating business people. The Quest system empowers them to develop and use their management skills. If you’re thinking you’re sick of working so you’re just going to become a franchisee and sit in a back office, you’ve got the wrong attitude and you’ll fail.”
Benefits of being a franchisee
Those looking to take the step into running their own business will weigh up the pros and cons of a regular small business versus a franchise. Suriano believes one of the biggest arguments in favour of a franchise is the reduced risk for those starting out.
“There’s significantly less risk when you’ve got systems and processes and a strong brand behind you,” he says. “We’ve never had a business fail in 22 years. It’s a proven business. We do a lot of research before we select our next franchise opportunity.”
Support from head office and other franchisees is another advantage. “You’ll get excellent training, ongoing support, a refined business model, access to a strong customer market, a niche product, sales and marketing assistance and franchise mentoring,” Suriano says.
And finally, there is the power of a network of like minded people. “People love belonging and it’s a socially-charged network. It’s not just head office expertise, it’s also about sharing hundreds of years’ of experience and similarly-minded people with a desire to share ideas and resources.”
So when do you take the plunge?
For Hoffman, the decision to take on a franchise came down to the support the company offered. “It was the upfront training. If we were just going to buy a motel, I’m pretty sure we’d be broke by now. With those businesses, as long as you’ve got a chequebook, you’re in. I came from a building background—I was a roof tiler—so it was a complete change of lifestyle overnight.”
The two-week intensive training course Hoffman and his partner Sandy Cook undertook was invaluable and took away much of the risk of embarking on a new business. While Quest’s training was the sealer of the deal for Hoffman, it was by no means an overnight decision.
“For us, it was three years in the planning,” Hoffman said. “We talked about it for a long time, but I’m so glad we went that way. We’ve been there four-and-a-half years next month and we’ve never regretted it. You learn every day.”
For Stevenson, the decision to take on her own franchise was inspired by her own experience working in sales and marketing at Quest. “I’d always had a desire to own my own business and we’d looked at many other options and this was the best for us.”
Suriano says there were two distinct groups of franchisees; around half are home grown (former company employees) and the other half are new franchisees. “In terms of most of our franchisees, they would be in their mid-forties, probably sitting in a middle or senior management level job, looking beyond their current role to 20 years down the track and not liking what they see,” he says. “They see the whole business opportunity and the chance for independence.”
Source: http://www.dynamicbusiness.com/articles/articles-franchising/is-franchising-for-you4939.html
Corner Office: Papa John's John Schnatter is Building a Better Pizza Empire
When John Schnatter first fell in love with pizza (and first obsessed over fresh dough and cheese-to-sauce ratios), he was a 15-year-old kid promoted from dishwasher at Rocky’s Sub Pub. Anything is better than washing dishes, right? But Schnatter took to pizza making right away, not just to get away from dish duty but to prove he deserved the promotion.
“If you didn’t do it right... then it would come back about half-eaten because [customers] wouldn't want to take it with them,” says Schnatter, Papa John's founder and chairman. “I had an intuitive grasp on what the consumer wanted at a very young age, which ended up being a tremendous advantage."
Whether it was putting a smile on customer's faces with a well-made pie or writing notes to his girlfriend using pepperonis, Schnatter says the experience was so fun that he knew he wanted to be in the pizza business.
That intuition and love of pizza led Schnatter to create Papa John’s, inception in 1984—when Schnatter tore down the wall in a broom closet at his father’s tavern in Jeffersonville, Ind., and installed a pizza oven. Today, with more than 3,000 stores worldwide, Papa John’s is a booming enterprise that brought in around $1.1 billion in total revenue in 2008.
Even with steady early growth and increases in sales yearly, Schnatter didn’t really feel Papa John’s success until his Louisville, Ky., store was voted “best pizza” in town in 1989. Then, as he saw his Jeffersonville store beating the nearby Domino’s by leaps and bounds, he realized the potential of his little back-room pizza company. “
I thought, ‘If we can beat them in Jeffersonville in Indiana, with one store, then why shouldn’t we be able to beat them in the rest of the world?’ ” Schnatter says. “We just believed early on that if we take care of our people and take care of our product and we do the right thing and run a good, clean business, where it's a win-win [for everyone], we could build a successful enterprise.”
That enterprise continues to deliver the promised "better ingredients,better pizza." Its commitment to quality has earned Papa John's the highest customer satisfaction rating among national pizza chains in the American Customer Satisfaction Index for nine of the last 10 years.
"Everything we do, we try to do it just a little bit better, and that costs money. We're willing to pay up,” Schnatter says. "I bet, on average, our competitors can make a pizza for 2 bucks. That same pizza will cost us $3-plus. But that extra dollar is the thing that makes Papa John’s different, and we think the consumer can tell the difference.”
"We just believed early on that if we take care of our people and take care of our product and we do the right thing and we run a good, clean business, where it's a win-win [for everyone], we could build a successful enterprise."
In addition to perfecting pizzas and seeking ingredients without artificial flavors, the Papa John’s team is always researching new ideas to improve on the existing product without drastically changing the pizza consumers have come to love—from ideas as simple as strengthening the boxes holding the pizzas and making sauce measurements more precise to more complex oven calibrating processes that ensure even heating in the front and back of the oven.
Schnatter calls these improvements a process of refinement rather than radical change. He has worked to instill the habit of constant advancement into their companywide culture, modeling a consistent desire to get better.
Thanks to this vision, business growth is definitely on the horizon, but that’s not the only kind of growth in which Schnatter is interested. He says watching the growth of Papa John’s employees is one of the best parts of his job and believes relationships within the Papa John’s system could be as big a competitive advantage as a solid product. He places a heavy focus on attracting and keeping talent. “We want to get to the point where everyone wants to be on the Papa John’s team,” he says.
Grooming the next generation of leadership at Papa John’s is part of this team building. Schnatter is still very much involved in guiding executives through the process, but he realizes that teaching autonomy is vital to the company’s future. “We’re giving them a nice little test run here on how to run this [company] in case John gets hit by a bus,” Schnatter says with a smile.
“If I’m doing my job right and you’re doing your job right, Papa John’s should be a people-growing machine,” he says. “We’re seeing people that two or three years ago did not think they could run a department and now think they can run a division. That is very fulfilling to watch people grow.”
Always looking ahead to the next task, challenge or goal is another one of Schnatter’s strengths. Papa John’s is already the third-largest pizza franchisor in the world, but Schnatter still has his sights on reaching the No. 2 slot and, eventually, becoming the No. 1 pizza chain in the world.
And why not? Schnatter is not the quitting type. Rather than quit college to start Papa John’s early, he took summer and night classes to finish his degree in business administration at Ball State University in three years. When his father’s bar was failing, he sold his car (a ’71 Z28 Camaro) and jumped in to help pay off the debt. When everyone said that car was lost for good, he kept the search up and was recently reunited with it.
Schnatter’s drive isn’t the only thing propelling the company in the direction of the No. 1 slot. It seems more and more franchisees are choosing Papa John’s. In 2009, it celebrated 25 years of business, and in all that time it hasn’t lost momentum. The company was recently ranked as one of the fastest-growing franchises and was given the No. 10 slot in Entrepreneur magazine’s 2009 “Franchise 500”—just three places behind Pizza Hut, ranked No. 7.
“I never give up hope. Sometimes I go to bed and I’m a little beat up, but when I wake up in the morning, I just always have a lot of hope,” he says.
Source: http://www.successmagazine.com/papa-johns-john-schnatter/PARAMS/article/947
“If you didn’t do it right... then it would come back about half-eaten because [customers] wouldn't want to take it with them,” says Schnatter, Papa John's founder and chairman. “I had an intuitive grasp on what the consumer wanted at a very young age, which ended up being a tremendous advantage."
Whether it was putting a smile on customer's faces with a well-made pie or writing notes to his girlfriend using pepperonis, Schnatter says the experience was so fun that he knew he wanted to be in the pizza business.
That intuition and love of pizza led Schnatter to create Papa John’s, inception in 1984—when Schnatter tore down the wall in a broom closet at his father’s tavern in Jeffersonville, Ind., and installed a pizza oven. Today, with more than 3,000 stores worldwide, Papa John’s is a booming enterprise that brought in around $1.1 billion in total revenue in 2008.
Even with steady early growth and increases in sales yearly, Schnatter didn’t really feel Papa John’s success until his Louisville, Ky., store was voted “best pizza” in town in 1989. Then, as he saw his Jeffersonville store beating the nearby Domino’s by leaps and bounds, he realized the potential of his little back-room pizza company. “
I thought, ‘If we can beat them in Jeffersonville in Indiana, with one store, then why shouldn’t we be able to beat them in the rest of the world?’ ” Schnatter says. “We just believed early on that if we take care of our people and take care of our product and we do the right thing and run a good, clean business, where it's a win-win [for everyone], we could build a successful enterprise.”
That enterprise continues to deliver the promised "better ingredients,better pizza." Its commitment to quality has earned Papa John's the highest customer satisfaction rating among national pizza chains in the American Customer Satisfaction Index for nine of the last 10 years.
"Everything we do, we try to do it just a little bit better, and that costs money. We're willing to pay up,” Schnatter says. "I bet, on average, our competitors can make a pizza for 2 bucks. That same pizza will cost us $3-plus. But that extra dollar is the thing that makes Papa John’s different, and we think the consumer can tell the difference.”
"We just believed early on that if we take care of our people and take care of our product and we do the right thing and we run a good, clean business, where it's a win-win [for everyone], we could build a successful enterprise."
In addition to perfecting pizzas and seeking ingredients without artificial flavors, the Papa John’s team is always researching new ideas to improve on the existing product without drastically changing the pizza consumers have come to love—from ideas as simple as strengthening the boxes holding the pizzas and making sauce measurements more precise to more complex oven calibrating processes that ensure even heating in the front and back of the oven.
Schnatter calls these improvements a process of refinement rather than radical change. He has worked to instill the habit of constant advancement into their companywide culture, modeling a consistent desire to get better.
Thanks to this vision, business growth is definitely on the horizon, but that’s not the only kind of growth in which Schnatter is interested. He says watching the growth of Papa John’s employees is one of the best parts of his job and believes relationships within the Papa John’s system could be as big a competitive advantage as a solid product. He places a heavy focus on attracting and keeping talent. “We want to get to the point where everyone wants to be on the Papa John’s team,” he says.
Grooming the next generation of leadership at Papa John’s is part of this team building. Schnatter is still very much involved in guiding executives through the process, but he realizes that teaching autonomy is vital to the company’s future. “We’re giving them a nice little test run here on how to run this [company] in case John gets hit by a bus,” Schnatter says with a smile.
“If I’m doing my job right and you’re doing your job right, Papa John’s should be a people-growing machine,” he says. “We’re seeing people that two or three years ago did not think they could run a department and now think they can run a division. That is very fulfilling to watch people grow.”
Always looking ahead to the next task, challenge or goal is another one of Schnatter’s strengths. Papa John’s is already the third-largest pizza franchisor in the world, but Schnatter still has his sights on reaching the No. 2 slot and, eventually, becoming the No. 1 pizza chain in the world.
And why not? Schnatter is not the quitting type. Rather than quit college to start Papa John’s early, he took summer and night classes to finish his degree in business administration at Ball State University in three years. When his father’s bar was failing, he sold his car (a ’71 Z28 Camaro) and jumped in to help pay off the debt. When everyone said that car was lost for good, he kept the search up and was recently reunited with it.
Schnatter’s drive isn’t the only thing propelling the company in the direction of the No. 1 slot. It seems more and more franchisees are choosing Papa John’s. In 2009, it celebrated 25 years of business, and in all that time it hasn’t lost momentum. The company was recently ranked as one of the fastest-growing franchises and was given the No. 10 slot in Entrepreneur magazine’s 2009 “Franchise 500”—just three places behind Pizza Hut, ranked No. 7.
“I never give up hope. Sometimes I go to bed and I’m a little beat up, but when I wake up in the morning, I just always have a lot of hope,” he says.
Source: http://www.successmagazine.com/papa-johns-john-schnatter/PARAMS/article/947
Tuesday, December 29, 2009
How to Avoid a Franchise Scam
If you are thinking about buying a franchise, there are many opportunities in a variety of industries that you may find suitable. However, there are so many franchise opportunities now that many franchise opportunity scams are surfacing as well. You will have to be wary of these scams while searching for your perfect franchise opportunity, and take precautions so as not to fall prey to them. The most important thing to keep in mind is to avoid things that are too good to be true. If a franchise opportunity presents itself and the franchisor is promising that you will make a lot of money in a short time with little effort, this is very unlikely to be true. The franchisor will go back on their promises and leave you out whatever money you have given to them. If you are going to buy a franchise you have to be prepared to work hard if you want to be successful. You are not going to be able to go into business for yourself and make money if you are expecting to expend little effort. As for the amount of time in which you will see returns, that can vary from franchise to franchise.
Another thing to avoid is franchise opportunities which are advertised in infomercials on TV. A good franchisor will not advertise this way, and an infomercial for any product, franchise or otherwise, should raise doubts for us if we’ve ever bought anything “As Seen on TV.” You should also look out for franchisors who are trying to rush you into making a decision with things like limited time offers. They are trying to trick you into something that you will regret if you do not take your time deciding on their franchise opportunity.
There are certain things you can do to research the company you are thinking aboutbuying a franchise from beforehand to avoid getting caught up in scams that may not be as obvious as those seen in an infomercial. Find out if there have been any lawsuits filed against the company. You can also talk to current franchisees to find out if the franchisor is up to no good or if they do all that they promise to do. You should also check with the better business bureau to find out if they have any unresolved complaints. In general, find out as much as you possibly can about the company. Keep in mind that they could have changed their name if they are a scam business.
Finally, make sure that the contract is everything it is supposed to be. If they promise that you will make a certain amount of money, you need to get it in writing in the contract, otherwise, you have no guarantee that they will follow through on that promise. Also, it is strongly recommended that you get a lawyer to read through the contract before you sign anything, no matter how confident you are in your ability to understand it and the reputability of the company.
Source: http://www.the-franchise-shop.com/articles/How-to-Avoid-a-Franchise-Scam_307.html
Another thing to avoid is franchise opportunities which are advertised in infomercials on TV. A good franchisor will not advertise this way, and an infomercial for any product, franchise or otherwise, should raise doubts for us if we’ve ever bought anything “As Seen on TV.” You should also look out for franchisors who are trying to rush you into making a decision with things like limited time offers. They are trying to trick you into something that you will regret if you do not take your time deciding on their franchise opportunity.
There are certain things you can do to research the company you are thinking aboutbuying a franchise from beforehand to avoid getting caught up in scams that may not be as obvious as those seen in an infomercial. Find out if there have been any lawsuits filed against the company. You can also talk to current franchisees to find out if the franchisor is up to no good or if they do all that they promise to do. You should also check with the better business bureau to find out if they have any unresolved complaints. In general, find out as much as you possibly can about the company. Keep in mind that they could have changed their name if they are a scam business.
Finally, make sure that the contract is everything it is supposed to be. If they promise that you will make a certain amount of money, you need to get it in writing in the contract, otherwise, you have no guarantee that they will follow through on that promise. Also, it is strongly recommended that you get a lawyer to read through the contract before you sign anything, no matter how confident you are in your ability to understand it and the reputability of the company.
Source: http://www.the-franchise-shop.com/articles/How-to-Avoid-a-Franchise-Scam_307.html
Grabbing a bite, Indians are lovin’ it!
BANGALORE: Amit Burman, vice-chairman of Dabur India, never thought that a casual stroll down one of south Delhi’s upcoming localities would
provide an idea for a unique business opportunity.
In 2006, the US-returned Burman and his friend Rohit Aggarwal were in Saket, standing outside one of the outlets of the international chain, Subway. The place was crowded, with people, especially in the 18-35 age group, buzzing in and out constantly. Burman and Aggarwal paused their conversation and wondered if there was a business opportunity here.
“Franchising Subway began as a hobby,” Burman says laughing. In the initial months, the team had to work on creating the sandwich category and tailoring it to local tastes. The classic cold-cut turkey and tuna subs had to share space with chicken tikka and chicken seekh kabab fare. “People were very doubtful about the venture and would ask if I planned to make sandwiches all my life,” jokes Burman.
He needn’t have worried. In three years, Burman’s Lite Bite Foods has become Subway’s largest franchisee in India. The company operates 40 quick- service restaurant (QSR) outlets and has added other international brands apart from Subway to its menu. Street Foods of India serves roti-kababs and rajma-chawal though kiosks, bakery cafe Bakers Street at airports, Pino’s Pasta Pizza and Rapps. It will also franchise US-based fried chicken brand Pollo Campero in the next few months. “We intend to become a restaurant chain with 200 outlets, including 30 QSRs, in three years,” he added.
Consumers’ growing penchant for eating out and taking quick meals in between long working hours has spawned a boom in the Indian QSR industry. Across the country, businessmen are either venturing into QSR market on their own or through franchisee tie-ups with foreign chains such as Domino’s and Papa John. Unlike fine dining restaurants, QSRs largely operate through smaller self-service outlets that provide value-for-money food that can also be consumed while on the go. It is estimated to be worth about Rs 2,500 crore and is growing at 30-40% annually.
Bangalore, which is a favoured choice for many people to open restaurants, has also seen an explosion in the number of QSRs in the recent past. This includes Spencer’s Retail’s Au Bon Pain, Global Franchisee Architects’s Cream and Fudge Factory and Donut Baker as well as Italian coffee brand Caffe Pascucci. US chain Melting Pot is ready to invest $5-$7.5 million in the Indian market by 2010.
“Many international franchise food brands are successfully operating in the country and these success stories have sent positive signals to other US franchisors to actively look at India for expansion,” said US Consulate’s principal commercial officer, Aileen Crowe Nandi. The consulate recently held a programme to introduce Indian entrepreneurs to American fast-food outlets such as CKE Restaurants, Round Table Pizza, Tropical Sno, Melting Pot and Church’s Chicken.
QSR segment operates on a high volume-low margin business model. Not only does it focus on delivering products with speed within high footfall areas but its ability to push sales even in recent months by tapping into captive audiences at malls, educational institutions and airports through evolving formats such as kiosks, drive-ins or even take-away joints has been critical.
“India offers tremendous opportunity due to its sheer size which will see the Papa John’s outlets quadruple to 100 in four years,” said Tapan
Vaidya, general manager, restaurant division, of the Jawad Business Group—the franchisee for pizza take-away chain Papa John’s in India and Middle East.
International brands are not the only ones to cash in on this trend. Local entrepreneurs have jumped into the fray with different concepts and ideas. Sunil Cherian, who runs the Chennai-based Burgerman is one such. Burgerman’s core business proposition is to offer 25 burger variants within a 25 sq ft kiosk. With 50 outlets in Chennai and 30 in Bangalore by the month-end, the chain has tied up with retail chains to grab captive consumers at Big Bazaar, Foodworld, Nilgiris or even HPCL and BPCL.
BuddyChef, which comes from the stables of Pune’s organic farming firm Orgreen, aims to sell pre-cooked Indian and Chinese meals under $1 across every pin code. With seven outlets across Pune, it is selling 5,000 meals a day across the counter to working couples, students and small offices.
Franchising has been a catalyst in fuelling the QSR concept in India. Sanjesh Thakur, Ernst & Young’s associate director, retail & consumer products practice, says that around 17% of the F&B outlets within the organised sector are operated through franchisees and over 30% of the upcoming outlets are projected to be based on this model.
The QSR trend was kicked off by the likes of McDonald’s and Yum! Restaurant’s KFC, which began operations in the 1990s. “Since the market opened up in the ‘90s, consumer habits including eating-out behaviour has gradually undergone a change,” said KFC India’s marketing director Unnat Varma. KFC added 27 outlets last year taking its total count to 72.
All this growth needs money and investors have started opening their purses to the industry.
Bangalore-based East West Ethnic Foods, the holding company of wraps chain Kaati Zone which is adding 100 outlets by next fiscal across Maharashtra, is in talks with two-three private equity players to raise between Rs 12-15 crore.
It received its first round of funding from Accel Partners India, Draper Investment company and the founder of Helion Ventures, Ashish Gupta.
Source: http://economictimes.indiatimes.com/News/News-By-Industry/Services/Hotels-/-Restaurants/Grabbing-a-bite-Indians-are-lovin-it/articleshow/5393087.cms?curpg=1
provide an idea for a unique business opportunity.
In 2006, the US-returned Burman and his friend Rohit Aggarwal were in Saket, standing outside one of the outlets of the international chain, Subway. The place was crowded, with people, especially in the 18-35 age group, buzzing in and out constantly. Burman and Aggarwal paused their conversation and wondered if there was a business opportunity here.
“Franchising Subway began as a hobby,” Burman says laughing. In the initial months, the team had to work on creating the sandwich category and tailoring it to local tastes. The classic cold-cut turkey and tuna subs had to share space with chicken tikka and chicken seekh kabab fare. “People were very doubtful about the venture and would ask if I planned to make sandwiches all my life,” jokes Burman.
He needn’t have worried. In three years, Burman’s Lite Bite Foods has become Subway’s largest franchisee in India. The company operates 40 quick- service restaurant (QSR) outlets and has added other international brands apart from Subway to its menu. Street Foods of India serves roti-kababs and rajma-chawal though kiosks, bakery cafe Bakers Street at airports, Pino’s Pasta Pizza and Rapps. It will also franchise US-based fried chicken brand Pollo Campero in the next few months. “We intend to become a restaurant chain with 200 outlets, including 30 QSRs, in three years,” he added.
Consumers’ growing penchant for eating out and taking quick meals in between long working hours has spawned a boom in the Indian QSR industry. Across the country, businessmen are either venturing into QSR market on their own or through franchisee tie-ups with foreign chains such as Domino’s and Papa John. Unlike fine dining restaurants, QSRs largely operate through smaller self-service outlets that provide value-for-money food that can also be consumed while on the go. It is estimated to be worth about Rs 2,500 crore and is growing at 30-40% annually.
Bangalore, which is a favoured choice for many people to open restaurants, has also seen an explosion in the number of QSRs in the recent past. This includes Spencer’s Retail’s Au Bon Pain, Global Franchisee Architects’s Cream and Fudge Factory and Donut Baker as well as Italian coffee brand Caffe Pascucci. US chain Melting Pot is ready to invest $5-$7.5 million in the Indian market by 2010.
“Many international franchise food brands are successfully operating in the country and these success stories have sent positive signals to other US franchisors to actively look at India for expansion,” said US Consulate’s principal commercial officer, Aileen Crowe Nandi. The consulate recently held a programme to introduce Indian entrepreneurs to American fast-food outlets such as CKE Restaurants, Round Table Pizza, Tropical Sno, Melting Pot and Church’s Chicken.
QSR segment operates on a high volume-low margin business model. Not only does it focus on delivering products with speed within high footfall areas but its ability to push sales even in recent months by tapping into captive audiences at malls, educational institutions and airports through evolving formats such as kiosks, drive-ins or even take-away joints has been critical.
“India offers tremendous opportunity due to its sheer size which will see the Papa John’s outlets quadruple to 100 in four years,” said Tapan
Vaidya, general manager, restaurant division, of the Jawad Business Group—the franchisee for pizza take-away chain Papa John’s in India and Middle East.
International brands are not the only ones to cash in on this trend. Local entrepreneurs have jumped into the fray with different concepts and ideas. Sunil Cherian, who runs the Chennai-based Burgerman is one such. Burgerman’s core business proposition is to offer 25 burger variants within a 25 sq ft kiosk. With 50 outlets in Chennai and 30 in Bangalore by the month-end, the chain has tied up with retail chains to grab captive consumers at Big Bazaar, Foodworld, Nilgiris or even HPCL and BPCL.
BuddyChef, which comes from the stables of Pune’s organic farming firm Orgreen, aims to sell pre-cooked Indian and Chinese meals under $1 across every pin code. With seven outlets across Pune, it is selling 5,000 meals a day across the counter to working couples, students and small offices.
Franchising has been a catalyst in fuelling the QSR concept in India. Sanjesh Thakur, Ernst & Young’s associate director, retail & consumer products practice, says that around 17% of the F&B outlets within the organised sector are operated through franchisees and over 30% of the upcoming outlets are projected to be based on this model.
The QSR trend was kicked off by the likes of McDonald’s and Yum! Restaurant’s KFC, which began operations in the 1990s. “Since the market opened up in the ‘90s, consumer habits including eating-out behaviour has gradually undergone a change,” said KFC India’s marketing director Unnat Varma. KFC added 27 outlets last year taking its total count to 72.
All this growth needs money and investors have started opening their purses to the industry.
Bangalore-based East West Ethnic Foods, the holding company of wraps chain Kaati Zone which is adding 100 outlets by next fiscal across Maharashtra, is in talks with two-three private equity players to raise between Rs 12-15 crore.
It received its first round of funding from Accel Partners India, Draper Investment company and the founder of Helion Ventures, Ashish Gupta.
Source: http://economictimes.indiatimes.com/News/News-By-Industry/Services/Hotels-/-Restaurants/Grabbing-a-bite-Indians-are-lovin-it/articleshow/5393087.cms?curpg=1
Franchise Tip: Make Your Franchise Stand Out
Mark Siebert wrote a great story for Entrepreneur Magazine about making your franchise stand out. Among the useful tips he shares for franchisors seeking to make their business rise above their competition include:
• Find Your Small Pond – This is useful advice. Understand that most people seeking a business want a business that will represent their skill base. A person who likes books is more likely to buy a book selling franchise than an automotive shop. Find your niche and stick with it.
• The 4 Sales You Must Make – Invaluable to understand if you expect to sell your franchise. Every potential franchisee ask themselves these four questions:
1. Should I go into business for myself?
2. Should I go into the widget business?
3. Should I go it alone or buy a franchise?
4. Should I buy your widget franchise?
Can you answer them?
• Be Unique – No business will ever survive without being unique. How do you stand out? What makes your franchise different?
• More Than One Way – There is no one way to succeed at franchising. You’ve got to find yourway.
If you are looking to franchise your business you need to make your business stand out. I would also add this tip to those four:
• Write A Franchisee Profile – Who is your ideal franchisee? Make a list of attributes and interests that franchisee might have. For instance, is it a middle-aged woman between the ages of 35 and 50? Is it a young single millionaire with additional investment income laying around? Know who your target is and make everything you do reach for that target.
These tips should help you get the ball rolling.
Source: http://www.stumbleupon.com/su/9quazQ/www.redhotfranchises.com/franchiseopportunities/franchise-tips/franchise-tip-make-your-franchise-stand-out/12/18/2007/
• Find Your Small Pond – This is useful advice. Understand that most people seeking a business want a business that will represent their skill base. A person who likes books is more likely to buy a book selling franchise than an automotive shop. Find your niche and stick with it.
• The 4 Sales You Must Make – Invaluable to understand if you expect to sell your franchise. Every potential franchisee ask themselves these four questions:
1. Should I go into business for myself?
2. Should I go into the widget business?
3. Should I go it alone or buy a franchise?
4. Should I buy your widget franchise?
Can you answer them?
• Be Unique – No business will ever survive without being unique. How do you stand out? What makes your franchise different?
• More Than One Way – There is no one way to succeed at franchising. You’ve got to find yourway.
If you are looking to franchise your business you need to make your business stand out. I would also add this tip to those four:
• Write A Franchisee Profile – Who is your ideal franchisee? Make a list of attributes and interests that franchisee might have. For instance, is it a middle-aged woman between the ages of 35 and 50? Is it a young single millionaire with additional investment income laying around? Know who your target is and make everything you do reach for that target.
These tips should help you get the ball rolling.
Source: http://www.stumbleupon.com/su/9quazQ/www.redhotfranchises.com/franchiseopportunities/franchise-tips/franchise-tip-make-your-franchise-stand-out/12/18/2007/
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