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The economic downturn is beginning to shift from Wall Street to Main Street. While financial experts remain uncertain about how long this economic turmoil will continue, the picture in the short-term is stark: banks have seriously slowed down lending lately and the cash flow that underpins the creation and growth of small businesses has stalled.

Yet despite this uncertainty, every entrepreneur will be familiar with Warren Buffet’s famous maxim on investing: “Be fearful when others are greedy, and be greedy when others are fearful.” Enterprising franchisees will be surveying the suffering business world and envisioning future success when the upturn comes around. The obvious question then is which kind of franchise makes for the perfect opportunity at this financial  moment.

Many businesses claim to be recession-resistant, but shrewd franchisees must see the bigger picture when considering their big investment. Franchisees should only really be considering buying into the most proven brands and products—the day of investing heavily in gimmicky items is over, it seems. There must also be inherent value in the product you are buying into. It must not be a niche item, but instead something that will work for you. For these reasons and for many other, the time seems right to focus on Vending Franchises.

Vending opportunities come in an array of shapes and sizes, stocking a number of interesting items. With Franchise Direct alone, there are vending opportunities for the sale of DVDs, coffee, yogurt and ice. The tremendous diversity within vending franchises is only one of their selling points. Just think of the low overhead costs. Rather than have to spend long nights sweating about staff or rents costs, you can sleep easy knowing that a vending machine will simply pay for itself.

Market forecasts show that vending businesses blossomed by over 43 per cent earlier this decade, according to industry publication Vending Times. And the beauty of a vending business is that while people’s tastes and interests change constantly, the medium, i.e. the vending machine, remains constant. The financial world may be in total upheaval, and  people may be holding back on that extra restaurant meal on a weekend, or that nagging car problem, but the immediacy of a vending product, be it an a can of Coke or a cup of coffee, makes them invaluable products.

Still, there are essential things to consider when purchasing a vending business. Having the time to stock the product is a must before signing up to owning your own machine. Likewise, the location you choose is essentially linked to the profitability of your venture. That said, if you can find a vending concept that will be a sure-fire success, the time has never been better to own your own vending franchise.

Even at times of economic uncertainty, turnkey businesses continue to be an appetizing prospect for people serious about being their own boss.

For those unfamiliar with the phrase, a ‘turnkey’ franchise is essentially one where the franchisee can walk in on the first day, and in effect ‘turn the key’ on their new business.

This is because the business owner has provided virtually every element required to starting the business, arranging everything from site location to lease signing to construction of the unit to the purchase of essentials for launching the business, and even in some cases, the hiring and training the staff.

The popularity of turnkey business raises an interesting question for franchisors: are franchises turnkey businesses? The answer depends. Some franchises owners go out of their way to provide every resource for new franchisees. But the flexibility built into franchising means that some companies will leave the business preparation completely to the franchisee.

If you’re a prospective franchisee, you have the freedom to choose the opportunity that’s right for you. Perhaps you’re a first-time franchise owner and you’d like to eliminate all of the hassle from getting your business off the ground. In that case, a turnkey business might be the right opportunity. But maybe you’d like to micromanage your business and want a hand in every aspect of its preparation. Turnkey business might not appeal to you.

The beauty of franchising is that there are many different opportunities in a range of businesses. Turnkey businesses are just one kind of model. Franchises themselves aren’t necessarily a turnkey business, but if you’re looking for a turnkey opportunity, Franchise Direct will find the company that’s right for you.

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.

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.

Health insurance is at the forefront of American’s minds, especially since it’s an election year. With politicians actively trying to solve the problem of health care in this country, it’s important to consider how it affects you as a franchisee or small business owner.

Recently, the bipartisan Small Business “CHOICE” Act of 2008 was introduced to help small businesses offer affordable health insurance to their employees. The long version of the name is the Small Business Cooperative for Healthcare Options to Improve Coverage for Employees (CHOICE) and is designed to allow small businesses to form health insurance cooperatives. These cooperatives would act as risk pools, providing insurance against high-cost claims. The bill involves providing a tax credit as an incentive to join a cooperative.

The Small Business “CHOICE” Act seeks to address two important problems facing small businesses:

1. The high cost of providing insurance for its employees
2. The unpredictability of premium increases

By giving small business owners incentive for wellness programs and increasing the number of businesses that can offer affordable, comprehensive health insurance for employees, the bill essentially gives employers flexibility to choose the right plan for their employees. The bill also encourages small business purchasing groups to form, giving the private insurance market a boost.

International Franchise Association Vice President of Government Relations David French commented that, “… this legislation is a positive step forward in addressing the challenges facing franchised small business owners in providing health care coverage to employees.”

The IFA is planning on supporting this bill so that it will pass. Since health insurance has become such a pivotal issue, it will be interesting to watch this bill make its way through Congress in the coming months.

The bill was introduced by House Small Business Committee Chair Rep. Nydia Velazquez (D-NY) and Rep. Joseph Pitts (R-PA).