Category: Franchise

Article contributed by Franchise Direct
Franchise Direct, one of the world’s top franchise portals, has released its first-annual list of the Top 100 Global Franchises. Franchise Direct arrived at these rankings after examining thousands of franchises worldwide. Franchising plays a major role in the global economy, and this list highlights the franchise businesses that have best-invested in international development. Combined, they make up some of the world’s most best and beloved franchised brands.
Franchise Direct is perfectly positioned to examine the global franchise market, as it is a prominent player in international franchising and operates popular national portals in seven major economies in North America and Europe. Their exclusive study has wider ramifications for the franchising industry. The list was compiled according to an objective methodology that factored in a range of commercial matters alongside issues of corporate citizenship and best practice. Franchise Direct examined each franchise’s units, revenue and market position. It also weighed in its support and financing for franchisees, as well as its policy regarding environmental and social matters to arrive at its list of the Top 100 Global Franchises.
The Top 100 Global Franchises provide an insightful glimpse inside the state of the franchising industry in the current economic climate. For instance, the Top 100 is largely dominated by the top performers in the quick-service restaurant industry, with McDonald’s and Subway coming first and second. But the list also shows the diversity of the franchising system, with cleaning, internet and senior care franchises represented in the Top 100.
Franchising is seen by many as an American concept, but these rankings are also unique because they indicate the rising success of franchises outside of America. Fifteen franchises that are not based in America have cracked the Top 100, with franchises from Japan, Australia and Britain represented.
This list provides a blueprint for franchises considering international expansion.
While each franchise on the Top 100 has developed a clear brand identity, they all share a number of similar traits. Each has built its success on a clear business model that’s easy to replicate, a strong support apparatus, an ability to innovate and a sensitivity towards environmental issues..
Franchises are certain to play a greater role in the globalizing economy. Despite the global credit crunch, the world’s top franchises remain cautiously optimistic. This list shows that franchising continues to remain a vibrant economic force in America and beyond.

You’ve narrowed your search down to three franchises. All of them promise great support. How can you get a better idea of what you’ll really get from each of them?
That’s a great question. One of the main benefits of being in a franchise system is that you don’t have to figure everything out on your own. With a little research, you’ll find a wealth of information about levels of support. That information will help you pick the franchise system that’s right for you.
Before you get started, take a few minutes to think about the word “support” and what that looks and feels like to you. Does it mean someone holding your hand through the pre-opening phase, or does it mean someone handing you a manual and checklist and letting you go? Does it mean an “in-market” support person living in your market, or are you willing to accept less frequent visits from franchisor staff who fly in from a home office? The better you understand what’s important to you, the more likely you are to get it.
Next, check the UFOC for lawsuits, closures, and transfers of existing units. While not a direct indicator of level and quality of support, they can at least serve as an early warning system. If a company has high levels of lawsuits or closures, it’s a good indicator that you’ll want to look at everything a bit more closely – including support.
Then, review the list below to determine which items are most important to you. Once you’ve reviewed the list, start talking with the prospective franchisors and their existing franchisees. The more people you can talk to, the better. Also, look for support information in writing. Does the franchisor have manuals for training you? For training your employees? How often are they updated? Do people use them? If not, why not?
Remember that no franchise system is going to have everything. A young franchisor will often have fewer of these, and that’s why it may cost less to get into their system. A more mature franchisor will often have more of these, and that’s why it may cost more to get into their system. Here’s the list:
Protection of Intellectual Property
* Trademarks and copyrights
* Willingness and ability to protect intellectual property from infringement
Real Estate
* Verification of suitability of potential locations
* Preparation of construction documents
* Preparation of signage construction documents
* Relationships with contractors
* Lease negotiation
* Construction oversight
* Discounted pricing on materials
* Checklists to help keep you on track
Purchasing and Distribution
* Vendor screening
* Vendor negotiations
* Vendor management
* Getting the product to you
* Getting it to you at a cheaper price than you could on your own
Marketing
* Clear, intelligent marketing and advertising plan
* Branded marketing and advertising materials
* Ability to produce custom materials for you if needed; how much does it cost, and how long does it take?
* Development of a marketing plan for your business
* Guidance to help you maximize your return on investment on marketing dollars
* Grand opening support
* Regularly-scheduled marketing coaching
* Discounted pricing for media and printing
* Advertising cooperatives
Operating Systems
* Outlines the standard procedures for running your business. Usually in manual form.
Training Systems
* Initial training at the franchisor’s training location how long? How good will you be when you’re done?
* Ongoing pre-opening training; does the franchisor have pre-approved training locations, either franchisee or company-owned, where you can continue practicing what you learned at your initial training?
* Grand Opening Training; does someone come out to help you make the last push to get your business open? How long do they stay? How long have they been with the company and what is their level of experience?
Business Operations
* Visits from franchisor staff. How often do you see someone? What happens when they come?
* Back office support staff
* Maximizing profitability
* Budgeting and forecasting
* Local, Regional, National, and/or International workshops and conferences
* Trademarks and copyrights
* Willingness and ability to protect intellectual property from infringement
Enforcement of Standards
* How clearly do they communicate standards? Are they written down? Talked about regularly?
* Is there a clear, objective system for measuring compliance to standards?
* How often are standards checked to verify compliance?
* Once a franchisee or vendor is found to be in non-compliance, what action does the franchisor take, and how quickly do they take it?
* Do they leave flexibility for innovation within acceptable guidelines?
This article is contributed by: Franchise Genius
FranchiseGenius.com is the largest, most comprehensive online directory of franchise concepts, with 1,700+ concepts summarized, and includes a franchise resource center full of objective and useful information.

The franchise sales process is kind of a paradox: both sides want the other to like them, to show that they are perfect for each other. At the same time, both the franchisor and the prospect want to make it clear that they’re looking for the perfect partner.
In other words, franchise prospects want to put their best foot forward but make it clear that this is only one of several possible choices and the franchisor wants to impress the potential franchisee, but make it clear that they are very selective in whom they choose to allow into their system.
So what is it that franchisors look for in prospective franchisees? Most franchisors talk of “awarding” franchises, rather than selling them. The difference is that they won’t sell to anyone. You must be someone who values the same things as the franchisor and be financially qualified. The franchisor is taking a risk by letting you into their system – here are some of the things they look for, either through explicit questions or by watching your non-verbal “answers” to situations.
Are you financially qualified?
You don’t have to have a six-figure bank account but you do need to a) show some resources of your own and b) show that you understand how to obtain money to cover franchise fees, start-up costs, and operating capital. You can do this through loans, friends, and partnerships. The last thing a franchisor wants to do is put someone in who doesn’t have enough capital to get over the initial customer ramp-up period. You make the cut if you show you understand how to obtain capital.
Are you self-motivated?
This seems obvious, and most potential franchisees would say that they are successful people who have always been self-motivated. Your house is on the line, after all, so of course you’re motivated to succeed. But this goes more to what happens when things are hectic or there are challenges unique to your area. Franchisors want to know that you’re motivated to seek help within the system (franchisees, business consultants, and other resources) – that you recognize this is your business. The franchisor has many tools and resources for you to use. But it’s up to you to ask for them and to implement them.
Do you have a passion for the product or brand?
Passion overcomes many obstacles. Franchisors want to know that you can be an evangelist of their brand, to promote the products and uphold the trade dress in your market. A passion for the brand indicates a franchisees willingness to overcome challenges, while still keeping the brand’s best interests in mind. Passionate franchisees are generally more successful than others who just “want to be their own boss.”
Do you just want to be your own boss?
Very often, potential franchisees will expound on how they would do things or offer tips as to how to make the system better. These tips are appreciated when they come from existing franchise owners, but most often are red flags during the franchisee selection process. A franchise system is just that – a system. Franchisors need to know that you are willing to work within the system and that you’re not just buying a franchise because you can get open faster and then do whatever you want (it’s your business…right? You can sell magazines and suntan lotion in your sandwich store if you want to…right?).
Good business partnerships are like good marriages and take just about as much work. If you do your research, and are honest during the application and selection processes, your new relationship will have a firm foundation.
If you’re out to impress the franchisor and you oversell yourself, there’s a good probability that neither of you will be happy with the partnership. Find what you love to do, then do it with passion.
This article is contributed by: Franchise Genius
FranchiseGenius.com is the largest, most comprehensive online directory of franchise concepts, with 1,700+ concepts summarized, and includes a franchise resource center full of objective and useful information.

Article contributed by Franchise Direct
Franchise Direct, one of the world’s leading franchise portals, recently conducted an in-depth study of the coffee franchise sector. After thoroughly examining 29 Franchise Disclosure Documents, Franchise Direct has found that the coffee franchise sector is weathering the recession resiliently, bolstered by a product that is an integral part of American life.
Despite an early dip at the beginning of the recession, this $11 billion a year industry continues to grow and diversify, according to the Franchise Direct study. With coffee consumption remaining constant in this declining economic climate, coffee franchises continue to be a worthwhile investment.
According the study, the coffee franchise industry remains extremely competitive at the top and fragmented at the bottom. Starbucks is the industry’s leading coffee chain, with over 16,000 stores worldwide. Because of the accessibility and popularity of coffee, a franchised approach, boosted by an established brand identity, continues to be one of the most profitable options to profit on this product.
One of the most reassuring reasons to invest in a coffee franchise is the enduring success of the beverage. The Franchise Direct study quotes a recent poll that shows that coffee consumption actually increased last year among the lucrative 25-to-39-year old demographic, while it remained steady amongst 40-to-59-year-old’s. As the recession continues, we can safely assume that the popularity of coffee will continue unabated.
Coffee franchise businesses are also flexibly adapting to new American consumer habits. For instance, in recent years, there has been greater demand for environmentally-friendly products that do not exploit workers in the production process. Coffee franchises have been at the cutting edge of the Fair Trade movement, and with a range of organic goods, they are perfectly positioned to thrive on this developing $1billion industry.
The Franchise Direct study shows that location is the most important factor in a coffee franchise’s success. At the same time, mobile units or kiosks give prospective franchisees a low-overhead, high footfall alternative to the standard franchise unit arrangement.
Underpinning the recent success of coffee franchises is the growing popular consensus that coffee has a number of health benefits for drinkers. While perhaps once seen as unhealthy, coffee, as illustrated by authoritative studies conducted by researchers at Harvard and UCLA, clearly has health incentives.
People exploring franchises for sale will find that coffee franchises sell a product with broad public appeal that is seamlessly adapting to American consumer trends towards healthiness, social responsibility, and environmental sustainability.