The term Franchise is part of our daily language but what does it really mean? It is a right or license granted by a Franchise Company to a business to use the Company’s name to sell its products or services in exchange for an initial franchise fee and ongoing royalties. Franchise Companies invest hundreds of thousands of dollars in some cases to develop a strategy to gain huge market share! Although Franchise Companies account for only approximately 10-12% of all retail and service businesses. They receive almost 50% of the retail and service dollars spent in the United States annually. Franchise Companies have sales of over 1 trillion, 500 Billion and are growing!
A study conducted by the International Franchise Association pinpointed the typical franchise buyer. Franchise buyers will come from all walks of life, educational and economic backgrounds, although some of the typical traits are the following: Between 35 and 55 years old Corporate Management background Income average 80k to 150k Net worth of 300k to 800k Majority have IRA / 401K retirements plans Men, couples, women, in the order Most have never owned a business Want to build a business that will allow them to retire Looking for ongoing marketing, training and support These are the same outstanding clients that come to Transworld offices seeking to buy their own businesses.
The majority of franchise buyers are success oriented, educated, family minded and ex corporate people. These people are comfortable with long term commitments, have some business experience, and are willing to learn new skills and procedures. They have enough cash reserves for the franchise fee, start up costs and operating capital for the time period before a positive cash flow is reached. A good franchise business has been tested! You’re buying into a company with a proven track record, established operating systems and sometimes a recognizable brand. Even if the franchise is fairly new, the franchisor has done the hard work of developing the product or service and overall vision. Franchise companies provide training, structure, support, market expertise, and they have a vested interest in your success! An unsuccessful franchisee is a black mark on the entire system and therefore, they make sure you are the right person for their franchise. Start up costs are predictable, and you can verify actual experiences by talking to as many current and former franchisee’s as you would like. These are some of the reasons why over 90% of all franchisee’s are still in business after 5 years! Financing is available in many cases through the Small Business Administration along with the opportunity to use your IRA or 401K without penalty.
Royalties are the magic that make the formula work. What would it cost you to hire a management, marketing, training and customer support team? The answer clearfix is a lot more than a typical owner would ever spend! The vast majority of royalties are only between 4% and 8%. A franchisor provides you with ongoing knowledge, assistance and support so you can reach your financial goals! It’s worth it!
Our franchise consultants will provide you with guidance, information, and support as you seek to obtain your franchise goals. Due to our experience and expertise, we have developed relationships with some of the leading franchise companies in North America. It is our desire to help you find the franchise that matches your skills, passions, interests, experience, and investment needs.
Each Client is assigned an experienced Franchise Consultant, who is familiarwith every nuance of the franchising industry and will guide you through your franchise process. Designated teams of Franchising Professionals will create each of the items included in your program used to franchise your business, while working closely with you to create a dynamic Franchise Program that can deliver results. The Transworld Franchise Development Program will be structured to your individual needs as a Franchisor. Financing for this program from may be available with terms customized to you r business. If you feel that your company will qualify for the Franchise Development, then contact us to arrange a review. Franchising Professionals will work with you and your staff, to determine the best way of structuring your franchisor program. All items necessary such as corporate entity in terms of regulatory acceptance, limitation of liability, financial disclosure requirements, tax implications, auditing standards, trademark usage, future spinoff possibilities, and Federal Trade Commission and State regulatory requirements will be reviewed. Obviously, specialized research, knowledge, and planning are needed to determine how to best structure you franchising corporate structure. In franchising, the Franchise Disclosure Document and Franchise Agreement are more than just legal documents- they cover financial aspects of a business, qualitycontrol, operating systems and procedures, marketing, future options/alternatives and many other business aspects. The work is extensive; an attorney preparing the documents is limited to the legal process only, and normally does not possess sufficient knowledge or experience in all the various areas to develop the documents and additional materials such as operations manuals, marketing and sales items.
