Franchising has a longer history than many people may imagine but there have been several defining moments during its history. One of the biggest events occurred on October 21, 1979 when the Federal Trade Commission (FTC) introduced the Franchise Rule. This was designed to protect franchisees because it asserted that all US operational franchisors were legally obliged to fully disclose details that all potential franchisees should know before committing to investment.
As such, it enforced FTC standards to ensure that all disclosures contained uniform information that has been prepared to meet the legal criteria. One of the main requirements of this law ensured that there has to be evidence to support any financial details given. This in turn assures all potential franchisees that there is profit to be made and make them fully aware of any pitfalls.
More specifically, the Franchise Rule requires the following information to be disclosed by all franchisors:
(a) The franchisor must declare its affiliates, directors, officers, management and individuals responsible for all areas of the business, such as training, support, and franchising information.
(b) The franchisor must declare whether it or any of its officers, management, and directors have ever been bankrupt or faced lawsuits in the past, even those from before the individual in question joined the business.
(c) The exact amount you are expected to pay in franchise fees and various other associated charges must be disclosed. This includes all immediate and ongoing payments after the franchise contract is signed and the business has opened.
(d) Any and all restrictions on the quality of goods and services that you, as a franchisee, may use. This includes any purchase restrictions that may be in place.
(e) Any help and support that will be offered by the franchisor and any affiliates including financial support.
(f) All restrictions applicable to the goods and services you will be managing and selling, as well as any restrictions that you have to work with when dealing with customers.
(g) Any advantage or guarantees provided regarding the location and locality of the franchise.
(h) The franchise conditions under which your franchise may be terminated, sold on to another franchisee, repurchased, or modified.
(i) Franchisee training programs that are available and any fees associated with them.
(j) The involvement, if any, of celebrities or known figures in the public eye within the business, whether in advertising or behind the scenes.
(k) Site selection assistance that is offered by the franchisor.
(l) The number of present franchises, franchises projected for the future, franchises terminated or not to be renewed, and the number repurchased in the past.
(m) Full financial statement disclosure.
(n) How far you are expected to participate within the franchise operation after becoming a franchisee.
(o) Full disclosure of proof for earnings and profit claims made regarding other franchisees.
(p) Full names and addresses of franchisees that you can talk to.
All of the above legal considerations of franchising must be fully disclosed during initial contact with the representative of the franchise, whether that is a broker or the franchisor him or herself. As soon as the franchise opportunity is discussed, the legal considerations must be fully disclosed. The disclosure must be at least ten days prior to payment or to any franchise or related contract being signed. This pertains to the contract signing itself and also any financial statements changing hands.
The Federal Trade Commission does not require franchisors to register, but depending on the state your franchise may be in, it may have to register on a local level. The Uniform Franchise Circular Offering (UFOC) guidelines have been adopted by most states as a result of their strict disclosure requirements. However, you should never take it for granted that the franchise is registered or offers full disclosure, thus providing you with protection of any kind. You must research the franchisor fully before committing.
About the Author:
GlobalBX provides a FREE business for sale exchange connecting business buyers, sellers and lenders. Search over 32,000 businesses for sale and franchises for sale. Sell your business for sale for free with no listing fees and zero commissions. We have 1000s of franchises as well as franchise resales. Find franchise reviews and get free franchise information. You can also contact over 300 lenders directly and get a business loan.
Category: Business Ideas
For any individual looking to capitalize on franchising opportunities and owning a franchise business, there are several advantages to consider. Some of those you may be interested in are outlined below:
The Franchise Business Pros
· Having a brand behind you, whether it is locally or nationally famous, will save you a lot of time and money that would be needed to create your own brand or trademark. You will also attract customers immediately rather than having to advertise extensively.
· You will have an established business framework to work within, which dramatically reduces the risk associated with a startup business.
· You will already have tried and tested suppliers and services at your disposal, which will again save you the time and money associated with finding your own.
· You will receive ongoing support for sales and marketing throughout your franchise ownership. Franchisees often choose to tap into the help that is offered to them throughout their tenure via existing marketing and advertising assistance.
· Franchisees often get comprehensive financial assistance because banks are often more willing to lend money to well-known brands and names than business startups that are completely unknown to consumers. Franchisees may also have access to direct financial assistance from the franchisor.
· The risk of investing in a franchise is lower than it is for a regular business startup. An established concept is much more desirable because there is less risk.
· Continued development opportunities and research will be available. Franchisors tend to choose to tap into information concerning competition in the local area, seasonal goods, demand, and local attitudes.
· You will get business support from your franchisor, which will help to find you the best possible site and enable any construction work that needs to be done in addition to employee training and operational assistance.
· All business procedures and methods that you use will already be tried, tested, and proven to work.
· The quality and desirability of the franchisor products have been proven and come at a certain standard level that is well established.
· You will have the buying power of the franchisor and centralized purchasing at your fingertips, so costs may be reduced as a result of bulk buying savings that are handed down to the franchisee.
In addition to the pros of franchise businesses as outlined above, there are also others that you may want to consider. For example, expansion may come more easily with a franchise business and you may enhance your business interests with additional businesses, either within the franchise or outside of it. This is how dreams of riches become realities.
That is not to say that there are not cons and disadvantages associated with franchise businesses. A few of them are outlined below:
The Franchise Business Cons
· You may lose ultimate control of your business as a result of the established franchise standards that you have to run your business in accordance with. You may also find that you cannot implement your own ideas and initiatives.
· The level of royalties could be as much as 10% or more in select cases, which will of course affect your profits.
· You will have to pay an initial fee to buy into the franchise. It could be as little as $4,000 but may extend up to $50,000 so there is significant initial outlay.
· You will have to pay advertising fees to ensure that your business is recognized as existing in your current location. If the franchisor advertises poorly then your fees are wasted.
· You may have to buy a signage pack from your franchisor. Some franchisors insist on you buying their specific signage and so you may find it extremely expensive.
· If the franchisor gets into difficulties then so do you. As you effectively bear their name then you bear the brunt of a problem, including issues with suppliers.
In conclusion, although there are some disadvantages with having a franchise business, the positives far outweigh the negatives. The risks of failure are significantly reduced and so there are fewer problems than a brand new startup business. Of course, you should always ensure that the paperwork is in order, and you should complete your research and due diligence before committing because there are no guaranteed profits, and you would ultimately be responsible should the venture fail.
About the Author:
GlobalBX provides a FREE business for sale exchange connecting business buyers, sellers and lenders. Search over 32,000 businesses for sale and franchises for sale. Sell your business for sale for free with no listing fees and zero commissions. We have 1000s of franchises as well as franchise resales. Find franchise reviews and get free franchise information. You can also contact over 300 lenders directly and get a business loan.
Categories
Where’s The Next Great Idea?
Article Contributed by Karen S. Sieczka
Do you know where your organization will be in the next 2-5 years? Will it still even exist? If it does, how will it look? One thing is certain, you will need new ideas to survive and thrive–Ideas for new or improved products, better or new services, and ideas to increase productivity and lower production costs.
So, where’s the next great idea? It could be right under your nose and your employees may hold the key. Your employees can be a potential idea goldmine. We just need to give them the tools, the encouragement, and the opportunity to get the idea process flowing.
What would you do with equipment that only worked at 5-10% of its capabilities? Something would need to change, wouldn’t it? It is estimated most of us only use about 5-10% of our brain’s amazing capabilities. So think about how much potential your employees have. Sometimes we forget to tap into this vast resource.
Most people are naturally curious and imaginative but may not feel comfortable sharing or we haven’t encouraged or given them an outlet for creativity. We haven’t asked them for ideas! What a lost opportunity!
So how do we ask? How do we encourage our staff to let the ideas flow? How do we help them build creative muscle? How do we give staff the creative tools they need to think outside the box? There are some simple, low-cost ways to make this happen.
Create friendly, internal competition
Why not create an internal market for ideas, a competitive atmosphere fostering creative thinking? Pose a challenge. Make a competition out of it. Put up a poster or flyer. Use phrases like… in what ways might we… or how could we…? Communicate this challenge to everyone in the organization, at the least, input across different divisions, departments, from different backgrounds. Give a specific starting point for ideas input.
Some workplaces have taken to using a request for proposal or RFP for ideas. Others use a venture planning tool kit containing a series of questions to start the ball rolling such as: Why should we invest in this idea? What are the potential markets for this idea? Is the idea ethically sound? Is it easy to explain? Will it be short or long term in its effect? Is it financially feasible? Will it bring about the desired results?
Build an idea website
Host the input of ideas on a company intranet site devoted to new ideas. or listed on a common network folder because one of the key elements of an idea campaign is that it is collaborative. When others see the ideas being posted, they can become inspired to build on the idea and create new ideas of their own. Advertise heavily that website is available and ready to be used by all.
Put up an idea board
An idea board is as simple as a bulletin board in a frequently visited area such as a cafeteria or break room and has three basic categories: one for issues, problems, or concerns, one for possible answers, and one for management to put information about ideas that were implemented.
For example, an employee is having a recurring problem with a process, he can post it on the board where all staffers can see it, think about it, and offer suggestions to fix or change the process. At certain intervals, management should make a point of collecting the ideas and updating the board to show what was done or used to improve the situation.
Use examples of others’ creativity, innovation, and idea process as a starter
Creativity comes in many varieties. There are myriad examples of ordinary people facing a challenge or need and coming up with a solution or finding a new, improved process for something—an idea, an innovation. They are often known as inventors. It has happened many times throughout history and still happens today.
Want to jumpstart the creative process? Take a closer look at inventors and innovators, both historic and recent. Get to know their stories. Study their methods. Share stories to start a meeting or begin a brainstorming session. Collect stories of your own to use as examples.
Don’t forget to ask for ideas!
Sometimes we forget to ask for ideas; problem is if we don’t ask, they often won’t tell! Most of us have one thing in common at work and in life—we want to use all of our talents but because of fear, ignorance or simply because we were never asked, we hide our potential, let our enthusiasm get trampled, and just spend the work day going through the motions.
As managers and supervisors, we should strive to create an organizational culture that celebrates effort and embraces positive expectations. When staff know it’s okay to try something new, they are more likely to come up with new ideas. Encourage the flow of new ideas with this simple method: ASK for ideas! And then keeping asking for ideas!
Do something with those ideas! Ideas without execution = 0
For those of you in management, here’s another barrier to ideas, never putting them to use. Oh, it’s great to gather all those grand plans your people come up with but do you look at them (or not) and then put them in the “round” file?
Do a little research and think about some of those silly or small ideas that turned into huge moneymakers. Things like Cabbage Patch dolls or the guy who figured out people would rather buy their bread sliced. Consider: Will this idea fill a niche that no one is serving?
It is silly enough to be a fad? Don’t dismiss fads—they can generate big bucks too. Think Pet Rock. Think friendship bracelets. Think Rubik’s Cube. Think Koosh Ball. Think WWJD. So, how much is this “silly” idea worth??????
Remember, an idea with no execution has no value!
If people offer ideas and they never get executed, you can bet the ideas will eventually start drying up because everyone thinks, why bother? They will probably also go to work for a competitor or go on their own and run with it. Get the picture? Steve Wozniak, one of founders of Apple Computer, left his job at HP, to develop the personal computer, after his bosses discouraged the idea. Their loss, huh?
Ideas = money and happier employees stay around longer and produce more!
Cultivate your human talent. It is ready and waiting to be unleashed. Show staff how to build idea muscle, inspire them, and your organization will mine the creative potential within, uncovering the next great idea.
About the Author
Karen S. Sieczka is a training consultant and founder of Growing Great Ideas.com. Her latest training program is Growing Great Ideas: Unleashing Creativity at Work. The program generates ideas, enthusiasm, and teamwork and can be customized to address particular organizational issues or challenges. This article is an excerpt from her new book Growing Great Ideas: Unleashing Creativity at Work, now available at LULU.com for download or print version.
Internet and local media advertising are useful sources to start up and promote home bookkeeping services. By setting a financial budget for each sales channel the bookkeeper can manage the results to build the bookkeeping services.
There are numerous opportunities to advertise bookkeeping services although not all sources of new business will justify the marketing investment. An essential first step is to determine all potential promotion areas, set an expenditure budget for each and maintain a record of enquiries and fee basis for the bookkeeping services obtained.
Whatever the bookkeeper states in the advertisement it is important to include a reason for a potential client to respond. Key prompts to create response are the promise of savings and initial free meeting or even the offer of free services.
Advertising
Advertising the accounting and bookkeeping services in local newspapers can produce new clients but tends to be marginally profitable. Write the advert copy concisely using keywords to mention specific bookkeeping services of which tax tends to be the most popular and consider all publications within the geographical area.
Generally it would be unusual to find local daily newspapers producing little response, local daily evening papers quite expensive compared with the level of business generated and free papers offering a balance between the level of bookkeeping enquiries generated and the cost of advertising.
Monitor costs and response rates vigilantly as some media adverts will perform badly usually based upon circulation while other advertisements may not be cost effective. When a suitable responsive source is identified reduce advertising costs by taking longer term contracts but not too long as successful response rates can reduce over time.
Advertising accounting and bookkeeping services in local telephone directories in useful but highly competitive and often expensive compared with the actual level of business obtained. Despite the sales pitch from the representatives bookkeeping services are so competitive that the level of response may be limited to less than 5 enquiries per year.
A high proportion of new bookkeeping clients obtained from local advertising tend to come from small clients a number of which respond because they have inadequate accounting records and may also have financial problems. The quality of client obtained by advertising may not be the highest but can be a vital starting point when offering home bookkeeping services.
To improve conversion rates from enquiries focus the initial contact, usually by telephone, in arranging a meeting to discuss the requirements. At that first meeting the bookkeeping services can be presented and the price agreed.
Internet Advertising
Setting up a website provides a shop window for the bookkeeper to present the bookkeeping business in what is a highly competitive area. The bookkeeping website should be optimised for search engine rankings to achieve success. Due to the competitiveness it is difficult to rank high for high volume keywords and higher traffic levels are more likely to be achieved by identifying less popular keywords using keyword volume tools and targeting those words.
To optimise the website include the target keywords in the meta tag title, description and keywords. Ensure the target keywords appear in the text and the title and description have a high level of relevancy to the content on each page.
Writing articles using keywords as anchor texts the bookkeeper can improve search engine ranking. Buying links from link farms should be avoided and can cause a website to be penalised.
The website should state clearly the range of services offered and preferably the expertise in those areas. Submit the website to internet business directories. Submitting to high ranking directories such as DMOZ and manual submissions to specific accounting and bookkeeping directories is beneficial as relevancy is higher.
Pay for click advertising with the major search engines Google, Yahoo and Msn will drive targeted traffic to the website but should be strictly controlled within an acceptable budget.
The amount paid for clicks on specific keywords being monitored on a cost benefit basis and a definitive overall budget set for each campaign. Many of the highest traffic bookkeeping terms are simply not economical but many smaller volume words are overlooked and represent an opportunity to attract some business.
Joining business forums, including the website address in the signature and posting on a regular basis concentrating on assisting other forum users with expert bookkeeping and accounting issues will increase website traffic and also increase networking opportunities with potential clients for the bookkeeping business.
Terry Cartwright qualified as a Chartered Management Accountant and Chartered Company Secretary in 1971. A successful business career followed as Head of Finance for major companies in the UK and several consultancy appointments. In 2006 he created DIY Accounting producing Accounting Software for self employed and small companies that use simple accounts spreadsheets to automate tax returns.
Categories
Why be Creative at Work?
Article Contributed by Karen S. Sieczka
Think creativity is only for artistic types? Think again; your livelihood and organization may depend on it.
Why bother with creativity at work? Why should you encourage it from your staff? For one thing, promoting creativity at work has many benefits and an organization’s continued survival may depend on it. Most importantly, ideas= $$$$$!
Technology has made the world small. We are all part of a global marketplace calling for constant innovation and reinvention to keep pace with the demand for new products and services. Things change fast, often in the blink of an eye. What worked yesterday and today might not work tomorrow. Success is no longer measured by profit and inventory but through human, intellectual capital.
Today, fresh solutions to problems and inventing new products and services for an ever-changing market is how businesses survive, thrive, and grow. Ideas are the intellectual capital that gives a competitive edge. Embracing creativity allows organizations to find new connection and insights, spot opportunities, and then act on them.
Human talent is the new working capital. The imagination and creativity of the human mind can’t be outsourced. Even old-school Fortune 500 companies have realized human talent is an important asset and are tapping into this resource.
How can doing things the same way as they have always been done lead to different results? Answer: they DON’T! Creativity, ideas, and innovation comes from the introduction of something new or different or changing and refining a process by injecting creative inspiration. It is a fresh way of looking at common issues and a willingness to take some risks.
Just like building muscles, practicing creativity increases problem solving skills and helps ideas flow more easily. If a business doesn’t use its machinery to its full capacity, they are losing money with them. Encourage creativity and use it to a competitive advantage. Ponder this: What human capital does your organization have available? Are you using it to its best potential?
About the Author
Karen S. Sieczka is a training consultant and founder of Growing Great Ideas.com. Her latest training program is Growing Great Ideas: Unleashing Creativity at Work. The program generates ideas, enthusiasm, and teamwork and can be customized to address particular organizational issues or challenges. This article was excerpted from the book Growing Great Ideas: Unleashing Creativity at Work, now available at LULU.com for download or print version.