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Should I Franchise My Business?
| The Franchise Council will choose one applicant to help with the initial launch of their franchise, valued at over $85,000.
Services will include legal services, coaching and training, branding and marketing, and documentation of systems and operations. We held an information webinar on the Franchise Development Contest, the recording of the presentation can be viewed here: https://www1.gotomeeting.com/register/124003065 If you’d like to receive the application for participation, please read through our Official Rules /Terms and Conditions and fill out the request form to the right. All entries must be received before Friday, September 6, 2010. |
FRANCHISE BROKER’S ASSOCIATION
FRANCHISE DEVELOPMENT CONTEST
OFFICIAL RULES, TERMS AND CONDITIONS
1. Agreement to Official Rules, Terms and Conditions. Participation in the Franchise Development Contest constitutes entrant’s full and unconditional agreement to and acceptance of these Official Rules, Terms and Conditions. The Contest is sponsored by the Franchise Broker’s Association, Inc. (“Sponsor”). There is no purchase necessary to enter this Contest. THIS CONTEST IS VOID WHERE PROHIBITED BY LAW.
2. Eligibility. The Contest is only open to legal United States Residents eighteen (18) years of age and older. Age and citizenship will be verified at the time of award. Employees, agents, representatives and independent sales representatives of the Sponsor and their immediate family (defined as parents, children, stepchildren, siblings and spouses), together with those persons with whom such employees, agents and representatives are domiciled are not eligible. Entries are limited to one entry per person. All information provided by the participant (“Participant”) must be true and correct or entry will be forfeited.
3. To Enter. No purchase is necessary. You may enter by sending a completed official application the Sponsor at Franchise Broker’s Association, c/o Eric Riess, 10 South Broadway, Suite 2000, St. Louis, Missouri 63102 or scanning a completed official application and sending it via email to e.Riess@FranchiseBA.com. All entries must be received before Friday, September 6, 2010.
4. Sponsor and its officers, directors, employees, agents and representatives are not responsible for lost, late, incomplete, damaged, illegible, or misdirected mail or email, for failed, partial, or garbled computer transmissions or for technical failures of any kind, including, but not limited to electronic malfunctioning of any network, hardware or software or by any human error that may occur in the processing of any entries or for any incorrect or inaccurate information, whether caused by web site users or tampering or hacking or by any of the equipment or programming associated with or utilized in the Contest. For purposes of the Contest only, every person and every entity providing services or products to the Winner as part of the Contest prize shall be considered a “representative” of Sponsor.
5. Contest Period. The Contest Period begins June 1, 2010 and ends September 6, 2010. The Sponsor will award one prize on or before October 20, 2010. Sponsor reserves the right to terminate the Contest at any time, for any reason. All work in connection with the prize awarded will be performed in the State of Missouri, USA as that is where each of Sponsor’s representatives who or which shall be providing services or products to the Winner as part of the Contest prize are physically located.
6. Winner. The entrant selected as the winner (“Winner”) must comply with all of these Official Rules, Terms and Conditions. There shall be only one Winner selected from the pool of qualified entry submissions. If for any reason a Winner cannot be reached after reasonable attempts or the Winner is found not to be eligible or in compliance with these Official Rules, Terms and Conditions, then an alternative Winner may be selected from all remaining entries. The Winner grants to Sponsor and each of its representatives the world-wide, royalty free, fully paid right to use their name and likeness for advertising, publicity, promotion and any other purpose without any additional compensation. The Winner will be encouraged to participate in Sponsor’s Annual Convention in October of 2010 in Orlando, Florida (at Winner’s expense) and if the Winner attends same (at Winner’s election) will be featured and introduced to Sponsor’s members in attendance at that event.
7. Prizes and Odds of Winning. One prize will be given away as determined by the Sponsor. The prize is detailed more fully on the official Contest Announcement. Odds of winning depend on the total number of eligible entries received and on Sponsor’s or its representatives’ sole determination of the franchiseability of each Participant’s concept. No cash or other substitution or transfer of prizes permitted except by Sponsor, who reserves the right to substitute a different prize of equal or greater value. PRIZES ARE AWARDED “AS IS” AND NEITHER SPONSOR NOR ANY OF ITS REPRESENTATIVES PROVIDE ANY REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTEES, WHETHER IMPLIED OR EXPRESS, INCLUDING, WITHOUT LIMITATION, REPRESENTATIONS OF MERCHANTABILITY OR FITNESS FOR A SPECIFIC USE, IN CONNECTION WITH THE PRIZE. Selection will be determined by franchiseability of an applicant’s concept as solely determined by Sponsor or its representatives. The Winner will be notified by email, telephone, overnight carrier, or regular mail.
8. Laws, Taxes and Release. All applicable federal, state, and local laws and regulations apply. VOID WHERE PROHIBITED. All taxes, fees and surcharges on prizes are the sole responsibility of Winner. Return or rejection of any prize or prize notification as undeliverable may result in the disqualification of Winner and the selection of an alternate. By accepting these Official Rules, Terms and Conditions, PARTICIPANT RELEASES, DISCHARGES AND AGREES TO HOLD HARMLESS SPONSOR, AND ITS DIRECTORS, OFFICERS, EMPLOYEES, SHAREHOLDERS, REPRESENTATIVES AND AGENTS FROM ANY AND ALL LIABILITY FOR ANY INJURIES, LOSS OR DAMAGE OF ANY KIND TO PERSON, INCLUDING DEATH, AND TO PROPERTY, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, FROM ACCEPTANCE, POSSESSION, USE OR MISUSE OF A PRIZE, PARTICIPATION IN ANY CONTEST RELATED ACTIVITY OR PARTICIPATION IN THIS CONTEST. Entrant agrees that all decisions of the Sponsor and its representatives are final and conclusive in all matters relating to the administration of the Contest and the determination of Winners. Entrant further agrees that (a) any and all disputes, claims and causes of action arising out of or connected with this Contest, or any prizes awarded, other than the administration of the Contest or the determination of winners shall be resolved individually, without resort to any form of class action, and exclusively by the United States District Court for the Eastern District of Missouri; (b) any and all claims, judgments and awards shall be limited to actual out of pocket costs incurred in entering this Contest, but in no event attorneys’ fees; and (c) under no circumstances will entrant be permitted to obtain awards for and each entrant hereby waives all rights to claim punitive, incidental and consequential damages, other than for actual out-of-pocket expenses as described above, and any and all rights to have damages multiplied or otherwise increased. All issues and questions concerning the construction, validity, interpretation and enforceability of these Official Rules, Terms and Conditions, or the rights and obligations of the Participant and Sponsor in connection with the Contest, shall be governed by and construed in accordance with the laws of the State of Missouri, without giving any effect to any choice of law or conflict of law rules or provisions (whether of the State of Missouri or of any other jurisdiction).
Sponsor reserves the right, at its sole discretion, to disqualify any individual or entity it finds to be tampering with the entry process or the operation of the Contest or web site; to be in violation of these Official Rules, Terms and Conditions or the terms and conditions of the web site or to be acting in a non-sportsmanlike or disruptive manner, or with intent to annoy, abuse, threaten or harass any other person. In the event of a dispute as to entries submitted by multiple users having the same email account, the authorized subscriber of the email account used to enter the Contest at the actual time of entry will be deemed to be the Participant and must comply with these Official Rules, Terms and Conditions. Authorized account subscriber is deemed to be the natural person who is assigned an email address by an Internet access provider, online service provider or other organization which is responsible for assigning email addresses or the domain associated with the email address.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN NO EVENT WILL SPONSOR OR ITS OFFICERS, EMPLOYEES, REPRESENTATIVES OR AGENTS BE RESPONSIBLE OR LIABLE FOR ANY DAMAGES OR LOSSES OF ANY KIND, INCLUDING DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF YOUR ACCESS TO AND USE OF THE SPONSOR’S OR ANY REPRESENTATIVES’ INTERNET SITE OR THE DOWNLOADING FROM AND/OR PRINTING MATERIAL FROM SAID SITE. WITHOUT LIMITING THE FOREGOING, EVERYTHING ON THIS SITE IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. SOME JURISDICTIONS MAY NOT ALLOW ALL OF THE ABOVE LIMITATIONS OR EXCLUSIONS. CHECK YOUR LOCAL LAWS FOR ANY RESTRICTIONS OR LIMITATIONS ON THESE LIMITATIONS.
9. Winner. To obtain the name of the Winner, send a written request along with a self-addressed stamped envelope to Franchise Broker’s Association, c/o Eric Riess, 10 South Broadway, Suite 2000, St. Louis, Missouri 63102, after October 20, 2010.
10. Interpretation. The headings and titles of each section of these Official Rules, Terms and Conditions are for convenience only and have no effect on the meaning of the content of each Section.
Profitability, Longevity, and UniquenessThere are many great businesses out there. Yours may be one of them, but is that enough to become a great franchise? The key factors to a franchise-able business are Profitability, Longevity, and Uniqueness. These characteristics give you a healthy start when trying to market and sell your franchise to prospective franchisees. Other essential elements needed for franchising are solid process, capital reserves, and great advisors. |
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The first step is to make sure you have thought through what it means to be a franchisor. We have formulated some questions to help you understand the journey you are about to embark on.
There are many states that are non registration states so you can focus on those first while you build your capital reserves, but you should start thinking through an action plan before getting into this process. The registration states are typically the ones with the most people and the best opportunities for franchise sales.
The next step is to consult with an attorney. There are many attorneys out there that handle franchising to a degree, but it is not wise to use an attorney that doesn’t focus primarily on franchise law. Franchise law is extensive and strict. You don’t want costly mistakes and potential lawsuits. You also want an attorney that is fair and understands you are selling franchises. Many attorneys write agreements so stringent that they immediately turn away potential franchisees. That type of agreement doesn’t protect you any more than a fairly written agreement. WE have negotiated special pricing for prospective franchisors through our attorneys and legal counsel. They are one of the biggest franchise law firms in the country, but more than that, they are also the best. Please contact Eric Riess, our lead counsel for more information and/or legal assistance. He will assist you directly or assign you to one of the 180 attorneys at Greensfelder Attorneys at Law. With negotiated pricing you will receive an affordable rate from one of the best attorneys in the country. If you are going to become a franchise, do it right the first time.
Franchise Development is the next phase. When speaking with a development company you will learn a wealth of information directed to setting your franchise up for success. Different development companies offer a wide range of services and products. Some offer to sell your franchises as well as develop it, but that is rare. Here are two companies that will assist you in building your franchise and your franchisees! FCI and Franchise Alliance Inc. (links to contact from or their vendor page on our website) It is absolutely necessary to talk to a development company for direction. They can offer you many singular options or full development.
State |
Fee |
Make check payable to: |
Registration |
| CA | $ 675.00 | Dept. of Corporations | at least 30 days |
| FL | $ 100.00 | Dept. of Agriculture and Consumer Services | at least 30 days |
| HI | $ 250.00 | Dept. of Commerce and Consumer Affairs | about 2 weeks |
| IL | $ 500.00 | State of Illinois | could be 3 months |
| IN | $ 500.00 | Indiana Securities Division | about 2 weeks |
| KY | $ - | about 2 weeks | |
| MD | $ 500.00 | Office of Attorney General | could be 3 months |
| MI | $ 250.00 | State of Michigan (no application, just send check to Helen) | about 2 weeks |
| MN | $ 400.00 | Minnesota Dept. of Commerce | could be 2 months |
| NE | $ 100.00 | Dept. of Banking and Finance | about 2 weeks |
| NY | $ 750.00 | NYS Dept of Law | could be 2-3 months |
| ND | $ 250.00 | North Dakota State Securities Commissioner | could be 2-3 months |
| RI | $ 500.00 | General Treasurer of Rhode Island | about 1 month |
| SD | $ 250.00 | South Dakota Securities Division | about 2 weeks |
| TX | $ 25.00 | Secretary of State | about 2 weeks |
| UT | $ 100.00 | State of Utah | about 2 weeks |
| VA | $ 500.00 | Treasurer of Virginia | could be 2-3 months |
| WA | $ 600.00 | State Treasurer | about 1 month |
| WI | $ 400.00 | State of Wisconsin | about 2 weeks |
Development fees
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State capital$75,000 to $100,000 on their audited balance sheet. |
More documentation, order and structure are always better when taking your franchise to market. Having impeccable operations structures will make your franchise much more attractive to prospective franchisees.
The reasons why you want to do this should be strategic and well thought out.
Some franchisees will need a lot more assistance than others and you have to be equipped to handle them as well as your current obligations. It may be beneficial to consider hiring on additional staff to accommodate these needs.
Franchisees have to learn it before they can implement it. Once they are fully trained and totally operating on their own, your job becomes a lot easier, but what does it take to get them to that point?
What would your target profile be for a prospective franchisee? Is it someone just like you or is it someone a little different? Make sure you have a clear picture of who you want to come into your system. This helps you later on to say no to the prospective franchisees that aren’t a good fit. If you take on franchisees knowing that they are not what you want, it will end up costing you more than its worth in time, training, and legal issues.
You are going to be investigated by the FTC, state regulatory agencies, prospective franchisees, and competitors. It’s helpful to have a solid background in the business and strong credentials to lean on through this process.
We always recommend showing earnings because it helps sell the franchise. Prospective franchisees want to see numbers and it’s a lot easier if you can provide them. If your finances aren’t that good, franchising may not be the right path to begin with. Solid earnings equal healthy franchise growth.
This is important and will affect your sales strategy tremendously. Of course it is easier to sell franchises by starting with a broad demographic. It is easier to service franchises by starting with a local or regional marketing campaign. State licensing fees are a consideration as well. Certain states require that you file your FDD with their regulatory agencies and pay a fee for applying to that state. Click here for a listing of state fees and franchise registration states.
Since your franchisees will be in different markets, you need to be able to handle questions about their market viability in their market when asked. You may want to research competitors in targeted markets around the country.
You may grow extremely quickly or very slowly. There are many factors that determine this. If you grow quickly, it is important that you have thought through how you will manage that growth.
Becoming a franchise means that you are opening your doors to interrogation of your business. Prospective franchisees are going to ask you very personal questions. They are also going to ask anyone that they can find what type of person you are and how your business has done. Prepare yourself for these types of inquiries.
No one wants to buy a franchise that isn’t profitable and doesn’t have stability.
How stringent will you be with awarding franchises? How deeply do you want to examine your prospective franchisee? Make sure that you have thought through a solid process by which you will investigate a franchisee during the time they are investigating your franchise.
Using brokers and consultants is an easy, cost effect way to get national recognition quickly. There are many other ways to market your franchise including trade shows, internet leads, magazines, PR firms and more. One thing you definitely need is a good website, because franchise buyers research on the web in this day and age. They will weigh the quality of your website against the quality of your franchise. Click here for more information on quality websites.
Do you like working with people? Are you a good salesperson? Can you give a powerful presentation? How much freedom and flexibility will you have to transfer roles to franchise development?
Being a franchisor means you will have the workload of many people added to your current workload, so have a plan in mind for how you will manage that workload.
Are your marketing programs strong enough to be successful in other markets? If not, how are you going to adjust it to ensure that it is a solid system for franchisees to use in their unique market?
Franchising is very unique in that franchisees have their own business, but that business is also your business and reputation. The simple answer is to be reasonable and fair. Stay involved with them. Remember that you are working together and have a well laid out plan that you can remind them of and direct them to.
This can and probably will happen as you grow. There are many solutions to this situation. You can assist them with a resale of their location or operation. You can also work with them to find out why they are not meeting the expectations. You can provide them extra training or you can decide to part ways. Things happen. Many times a situation that is totally unrelated to anything a franchisor has control of will occur, such as death, divorce, sale of another business, illness, relocation, etc.
How long do you want to run thins and what happens when you want to leave?
With any business venture, you should always plan your exit strategy. Begin with the end in mind and decide how you would want the business to continue even if you don’t.
This is also part of having good systems of support. If you have an infrastructure in place this should be easy to handle.
This is very important. We are working in a virtual economy where brand can make your franchise or break your franchise. It’s advisable to get this straight before getting into franchising. Click here to discuss creation of a quality brand.
Once you have thought through some of the basics you need to see if you qualify financially to become a franchise. Each state has different laws on what capital they require a franchisor to have in reserves. There is also an expensive and timely development process that you need capital to fund. Here is an estimate of low and high franchise development fees.
Do you have a business that is profitable, well managed, unique and long standing? Then you may have a franchise-able concept. The primary element of a good franchise is a system that is replicable. We have several Franchise Development companies and attorney’s we work with to help you get your franchise ready for selling.
Once you have completed the development process, we will list your franchise for all of our brokers to see. This creates national exposure to the right clients instantly, allowing you to build a name for your brand in no time. For more information, please fill out the request below and someone from our office will contact you to discuss your goals and options.
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