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How does a local hamburger restaurant become the most popular restaurant on earth? Franchising, of course. But there is one subtle, yet critically important step in the process of franchising that can decide whether a franchise explodes into the popular consciousness or is simply left behind: the drafting of your franchise agreement and FDD’s.

To some, these papers might seem like a legal burden. But in reality, the more engaging these documents are, the more likely it is that your franchise will prosper. That’s certainly the feeling of franchise lawyer and blogger Charles N. Internicola, who has written extensively on the subject of franchise agreements.

In a recent post on his New York Franchise Law blog, Charles urges business owners considering expansion to view the FDD and franchise agreement as “a collaborative process focused on the development of a critical “asset” that uniquely reflects, identifies and protects the components of your business…franchise and franchise system.”

When starting a franchise keep in mind that all agreements are not the same and and that your input will be critical to insuring that your agreements and disclosure documensts reflect the unique nature of your business. This is no easy task and is not one that is not simply delegated - an in-depth working relationship with your franchise lawyer is required.

This is valuable advice for anyone expanding into franchising. Stick with Charles’ blog for more insight on the particulars of franchise law.

Tax day: that dreaded part of the year is rapidly approaching. With March 15 less than a month away, the best thing that entrepreneurs can do is think hard about finding deductions that might not have seemed obvious a year ago. Luckily Franchise Direct is here to help you.

A number of periodicals have just published their advice for this gruelling season. Business Week has suggested its Hidden Tax Tips For Entrepreneurs. Among a slideshow of 25 tips are two that many franchisees, including those who operate home-based franchises, commonly overlook: vehicle and home-office deductions.

“New investments of up to $250,000 in equipment, vehicles, or software can be written off immediately, rather than depreciated over future years, under the Section 179 deduction. If you have a home office that you use exclusively as your primary place of business, you can deduct costs for the business use of your home.”

Enterpreneur magazine offered a small business focus for tax savings - they’ve keyed in on changes to the tax code that were brought in from last year. For instance, tax deferment is something that all small business people should explore

“Income deferred under a nonqualified deferred compensation plan is usually taxed the year the deferral is made. But the IRS changed the complex rules on this issue for 2008, so if you deferred income, be sure to check the fine print to see if you owe the tax now or can wait to pay it.”

Take a few minutes to read through these suggestions to find if they apply to your franchise. There’s a good chance franchisees might able to save thousands.

Times are tough enough - there’s no point in giving the government money that is rightfully yours.

The IFA released its forecast for the year of franchising that lies ahead yesterday. A few words catch the eye: ‘challenging’ and ‘cautiously optimistic’.

The first-ever Franchise Business Economic Outlook was conducted by PriceWaterhouseCoopers. The survey, predictably perhaps - considering the economic challenges, of the last year - forsees that the franchising industry, as a whole, will contract over the course of the year. It says the number of franchise establishments will drop from 865,000 to 855,000. It also predicts that 207,000 jobs in franchising will be lost during the year and that the value of goods and services sold by franchising industry will decline by about four billion dollars.

So where, you ask, is the silver lining? Recent surveys have shown that franchisors remain confident that franchising will rebound quickly after credit markets stabilize. Part of this optimism comes from past experience: franchisors have emerged from the few recessions stronger than ever. Just look at the period the followed 9/11. The economic decline that followed the attacks on the World Trade Center triggered a growth spurt in the franchising industry, so much so that the industry grew by over 18% over the next four years.

Entrepreneurs looking for investment opportunities will be heartened that there are signs of growth in quick-service restaurants and full service-table restaurants (up 1.5% and 1.3% respectively). Meanwhile, the industries that are experiencing the least amount of contraction are lodging, business services and real estate franchises.

There is a lot of essential information in this study for people preparing for the year in franchising. Explore all of the information here.

Welcome to 2009, a year that is sure to be interesting, challenging, and hopefully lucrative for franchisees and franchisors alike.

We just couldn’t let 2008 pass with pointing out an excellent article from the December issue of Business Week magazine that spells out the virtues of franchising.

The article offers prescient advice about some of the important practicalities involved in franchising, including utilising top-notch consultants and employing sound legal advice.

Also featured are three important questions prospective franchisors should ask themselves before commiting themselves to franchising:

1. Firstly, is your flagship business successful? Your flagship’s success will provide the blueprint to a thriving franchise operation.

2. Is your business solely reliant upon your presence? If work is stopping you from taking a vacation, handing over the reins of your franchised business to a manager may prove extremely difficult.

3. Is your business idea simple enough to be franchised?

“Any business that requires a specialized skill or creative talent—say, a restaurant with a complicated menu or a boutique clothing store—isn’t ideal. Relatively simple concepts tend to do the best because they appeal to a diverse pool of would-be franchisees and are quick to launch.”

If you’ve answered ‘Yes’ to these three questions, odds are, you have a business concept that’s perfectly suited to franchising.

Stick with Franchise Direct this year for all the latest news from the world of franchising.

As the year winds down, one question that continues to pop up – be it on radio or TV or in conversation – for people in the small business world is: what constitutes a recession-proof business?

As we all know, there is no wishing away the economic downturn at this stage. It has quickly become part of our lives and the most opportune investers are trying to position themselves with the business most able to weather a bad economic stretch.

There are a lot of theories about which industries are recession-proof. It’s certainly a subject that we’ve discussed on this blog. The truth is, there’s no way of exactly saying, as each recession differs from the one that precedes it. Interestingly though, Scott Shane, who writes for the website smallbiztrends.com and teaches entrepreneurial studies, compared data from the last two recessions (1990-1991 and 2001-2003) in search of trends among the small business that succeeded.

Shane used pretty rigorous criteria to determine a recession-proof business. A company had to experience a 20% increase in each of the following categories to be considered recession-proof: the number of establishments; the number of employees; the dollar amount of payroll; the number of establishments with 20 or fewer employees; the number of employees at establishments with 20 or fewer employees; and the dollar amount of payroll at establishments of 20 or fewer employees.

Pooling all of his data together, Shane found only a handful of industries that experienced booms as the rest of the economy slumped: banking-related businesses, accident and health insurers, health practioners and business consultants.

The findings are highly interesting, indeed. One thing Shane admits is that every recession is different, and so it is rare to see a business thrive in two recessions. As for thriving in three recessions, banking-related businesses are facing into a tough few months given the collapse of Wall Street. The future may look brighter for business consultants and insurers, though.

Shane also makes two other points:

• Some industries grow at a steathfully during a recession.
• Insurance, health care, and consulting tend to be recession-resistant industries for people running small businesses.

As for his second point, Franchise Direct brings you some of the most vibrant insurance, health care and consulting franchises in the industry. Find out more today.