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It’s a daunting task to sift through all the franchises out there and pick the one that’s right for you. In fact, it can be downright intimidating since there are so many to choose from! If you are a potential franchisee that’s currently considering investing in a franchise or business opportunity in a specific industry sector, you should consider sourcing the advice of a knowledgeable business consultant to help you find the right opportunity to match your requirements.

Franchise consulting has become a popular field, especially since franchising does so well even in times of economic crisis. Consultants who are well versed in franchising provide professional assistance and the right information to help you, the potential franchisee, choose a franchise to suit your needs. This service is usually free for the potential franchisee!

The franchise consultant will find you viable matches to your unique needs. They help you weed out franchises that may not be as stable or meet the high standards set by these franchise experts. On top of that, the franchise consultant will be a great resource regarding the Franchise Disclosure Document (the new substitution for the old Uniform Franchise Offering Circular, or UFOC).

Some of the many benefits of obtaining the services of a franchise consultant are:

• Franchise consultants can help figure out how much legitimacy a franchise holds.
• They can find a franchise that matches the potential franchisee’s background, goals and available capital.
• They can help a potential franchisee evaluate their strengths and weaknesses.
• They can help potential franchisees understand the Franchise Disclosure Document (FDD) and the Franchise Agreement.

Do you already own a business? Another function franchise consultants perform is helping convert your business into a franchise. Setting up a new franchise network can seem difficult, but a franchise consultant can walk you through the process and save you a lot of time and money. They help evaluate how franchise-able the business is, screen potential franchisees, build brand recognition and give advice to the franchisor on how to market and provide training for their business.

It’s also very important to have a knowledgeable franchise attorney and accountant who can help you navigate the legal and financial ramifications of starting your own business and signing a Franchise Agreement.

When you are doing something as important as investing in a franchise, you need to know you’re making the right decision. By getting the help of a qualified franchise consultant, you can make the process a painless one while getting all the necessary information to make an informed choice about your investment.

We recommend the following Top Franchise Consultants:

MyFranchisePath.com

MFP takes its years of experience in the franchising industry to provide a free consultation for people interested in owning their own franchise.

MatchPoint

You are a just a few steps away from being guided through a process that will help you determine which franchise is right for you. The MatchPoint profiling system is FREE

FranNet

FranNet helps people (like you) find the perfect franchise business. For over 20 years, FranNet has been helping people through the various decision-making processes that often lead to franchise ownership. We’ll help you get there!

The Entrepreneur’s Source

The Entrepreneur’s Source is a beacon as the one stop, one source resource for entrepreneurs and those who dream of becoming one.

Mark your calendars on September 15-16 for the International Franchise Association’s Franchise Appreciation Day, held in Washington D.C. at the JW Mariott. (Note: Registration ends Sept. 1, so you have two weeks to do this!) This fall conference will help shape public policy, and if you, the franchise business owner, want your say, this is your chance!

Over 500 franchise business leaders will get together in order to tell Congress about franchising and its impact on our (presently fragile) economy. This is also a chance for the IFA Educational Foundation’s study on the Economic Impact of Franchised Businesses to be reviewed by policymakers; this is a study showing that franchises have outpaced the economy in job growth (3 times higher than the economy), payroll and output from 2001-2005.

Some of the important issues that might be discussed on Franchise Appreciation Day (and throughout the year with your local congressman or woman):

• The “Employee Free Choice Act”: This replaces the federally-supervised private ballot with a card, and allows union organizers to oversee the process of joining a union. The individual’s choice is made public to everyone.
• Immigration Reform: The IFA wishes for a comprehensive plan that makes sure that legal immigrants are hired, our borders are secure, and creates a worker visa program that will allow legal admission of needed workers on top of providing a solution for the 12 million undocumented immigrants in the US. The IFA is pushing for a system that makes employer verification simple and practical, without putting burdensome costs on small business owners.
• The Federal Arbitration Act: The IFA is hoping to make all pre-dispute binding arbitration clauses unenforcable, as many franchisors and franchisees have already signed arbitration agreements in their Franchise Agreements.
• Small business health-plan legislation: This legislation would allow small businesses tocreate national pools to get affordable health care coverage.
• The Business Activity Tax Simplification Act: This legislation hopes to limit audits and tax bills from states where franchise companies and other businesses don’t have property or staff.
• Healthy Families Act: Employers with less than 15 employees are required to permit workers to take up to 7 days of leave with pay and benefits. This could potentially limit an employer’s ability to create benefits packages for their employees.

These and other issues will be discussed in-depth at Franchise Appreciation Day, so come and help your Congressman or woman understand how legislation affects your franchise. The IFA will arrange meetings on Capitol Hill, and provide you with guidance on how to conduct these meetings.

Also, you’ll have the chance to listen to keynote speaker and political strategist Paul Begala, who will discuss the 2008 presidential election. Begala has experience in the White House’s Situation Room and CNN’s own program with the same name.

So sign up today for Franchise Appreciation Day! Check out IFA’s site on FAD to get more information.

Anyone who invests in a franchise, just as with any other long-term investments such as real estate or stock, should always have an “exit strategy” in mind. For instance, when you buy a stock, you look for it to reach a certain price to sell it. When buying a home, the investor should count on living there for a certain number of years.
The same goes for a franchise – how long do you want to own the franchise? Which leads to other questions:

• • • When will you break even on your investment?

• • • What are your projected profit expectations and how long will it take you to reach certain financial goals?

Selling your franchise will most likely not be a unilateral decision because the franchisor will probably have certain rights regarding when and how the business can be sold or transferred. Item #17 in the UFOC details these stipulations, such as the exact length of the Franchise Agreement contract – five years, ten years, etc. It also outlines the franchisor’s right to renew the contract, re-buy the franchise unit from the franchisee and/or rights to re-assign the franchise to another individual.
Many franchisors retain the “right of first refusal” meaning an external party’s bid can be matched by the franchisor, who gets first preference over buyers. This can create roadblocks to the sale because prospective buyers will not want to invest time and money evaluating your business unless there is a high probability of completing the deal.
So the first step in planning to resell your franchise investment is to clearly understand what the franchisor’s rights and intentions are down the road, and how these affect your resale options. A franchisor who has no interest in buying back your franchise can still exert control over the sale, and demand that any prospective buyers first meet all franchisee qualification criteria.
Keep in mind, though, that the franchisor may be your best choice and resource for selling the franchise. Franchisors are often eager to buy back an established business for a fair purchase price because it is easier to sell a proven commodity. And many have a pipeline of qualified franchisees looking to buy existing units.
As the time approaches for you to exit your franchise business, there are key steps to take. Think like a homeowner getting ready to sell and house. First, get your business appraised, so you know what it is worth. Then, make sure everything is neat and orderly. Prospective buyers will be visiting to inspect the premise and see how well it is run. And just like a home seller has a deed, utility and repair bills available, have all the pertinent documentation ready for examination – profit and loss statements, gross receipts, past and present invoices, supplier information, payroll information etc.

You’ve heard of the Uniform Franchise Offering Circular, or UFOC. This allows potential franchisees to weigh the pros and cons of any franchise offering. Well, as of July 1, 2008, the Federal Trade Commission finished phasing in its amended Franchise Rule by getting rid of the UFOC and instating the Franchise Disclosure Document. The FDD not only includes the UFOC disclosure requirements, but requires more extensive disclosure on some topics. This can be helpful for potential franchisees, with more transparency on the part of franchisors.

The FDD will contain 23 items of information about the franchise, its officers and other franchisees, including information on the franchise’s litigation history, past and current franchisees (and ways to contact them), the exclusivity of a territory, what assistance will be provided by the franchisor and the cost of purchasing and starting up a franchise. Information about the financial performance of the franchise will also be included.

The new federal Franchise Rule will be much more closely in line with state franchise disclosure laws and changes in franchise marketing and new technologies. The Rule also aims to reduce compliance costs and address franchisee complaints about the franchisor - franchisee relationship.

Let’s examine what top areas require more extensive disclosure under the FDD:

1. Lawsuits franchisors filed against franchisees
2. Franchisors using “confidentiality clauses” during lawsuits
3. Warning when there is no exclusive territory
4. What “renewal” means for the franchise system

The biggest differences between the new Franchise Rule and the old UFOC requirements?

1. Franchises and business opportunities now have separate requirements under the new Rule.
2. More disclosure about earnings is encouraged, with information about business costs and financial results for a subset of franchisees (as opposed to results for the entire chain) available.
3. The FDD can now be sent electronically.
4. Disclosure of all the franchisee associations in their system (ones approved by the franchisor and independent associations).
5. The corporate parents of a franchisor must be disclosed if its guarantees the business and/or provides supplies to the franchisees.

So now that this new Franchise Rule is in effect, look for that FDD in place of the UFOC … and remember to read it carefully!

Global franchise expansion is a natural evolution for businesses proven popular in their original markets. The International Franchise Association (IFA) cites three major regions as the best places for franchise international development: North America (Canada and Mexico), Western Europe and Latin America.

Although buying and starting a franchise in the US can be complex, the uniformity of laws, customs and language make it easier than launching a franchise in a foreign country. For one thing, laws vary from country to country on small business operation and franchise licensing.

Here a just a few differences in franchise law in different countries:
* The disclosure acknowledgment and “cooling off” periods are longer in Australia than the US.
* Brazil requires the Franchise Agreement be translated into Portuguese and registered with the Brazilian Patent and Trade Office.
* There are special stipulations about terminating the Franchise Agreement in Mexico.
* Spain imposes special registration laws applicable to franchises.

The IFA has a detailed guide to franchise laws in various countries at its web site: http://www.franchise.org

Franchisors looking to expand into international markets typically start with Master or Area Developer License arrangements. A Master License allows an individual to sell franchisee rights within a fixed territory, such as an entire country. The Master Licensee in effect becomes the franchisor for that country and sells franchise licenses, for which the Master Licensee receives a portion of the fees. An Area Developer actually runs franchise units rather than sells licenses in an assigned territory; and must have substantial resources to invest, backed by business experience.

One new and increasingly used practice in international franchise development are “test periods” of one or two years, during which the franchisee operates as an Area Developer and must meet minimum unit openings and operation before advancing to a Master license.

Because there are diverse cultural, language and legal issues to address for international franchise development, franchisors look for certain qualifications in prospective franchisee candidates. Obviously, speaking the language is important. Individuals who already own or lease a potentially good location are also more likely to be awarded a franchise license. US Embassies in foreign countries have a commercial service that provides information to native residents about local business opportunities through American-owned companies.

There are many business consulting firms that specialize in helping prospective franchisees find the right international opportunity. These consultants can help the franchise understand and navigate through the legal requirements and local customs. You can find consultants for individual countries as well as larger international markets at this web page:
Business Consultants

Check out international franchise opportunities at these upcoming expositions:
September 28-29: Shanghai International Franchise Exposition
October 8-9: 6th Annual Polish Franchise Exposition, Warsaw
October 2-3: Franchise Association of India Convention & Expo, Mumbai
October 10-17: IFA International Trade Mission to Australia: Melbourne and Sydney
October 23-26: 13th Macao International Trade and Investment Fair
October 23-24: Caribbean American Franchise Forum, Santo Domingo, DR
November 5-6: International Symposium on Franchising, Los Angeles