Posted on October 9th, 2008 by Sebastien
This article on NewsOK is about Just Between Friends, a franchise that offers twice yearly children’s and maternity consignment sales events.
The sales are held twice a year, although that can vary by franchise, and consigners receive up to 70 percent of the selling price on infant, children’s, young teens and maternity clothing, toys and equipment in a large, garage-sale type environment that benefits everyone, Wilburn said. “Our goal is to help moms and families in communities where we’ve sold franchises.”
Just Between Friends made almost $5 million last year, Wilburn said. There are now 66 franchisees in 17 states. A franchise cost $10,500, and franchisees pay royalty fees.
I personally don’t understand why you need to go the franchise way with such a business model. I mean, what is the franchisor bringing to the table? Certainly not brand recognition… Comments are welcome
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Posted on October 9th, 2008 by Sebastien
Following the post I wrote a couple of days ago about how the franchising industry is also being hurt by the economy, I cam across a Press Release today that shows that not all franchises are getting beaten up… This Press Release is about Rent-A-Wreck, a car rental franchise company.
Bob Barton, the Company’s Chief Operating Officer stated, “We are quite pleased with the continued expansion of the Rent-A-Wreck system in Canada and welcome these new franchisees to our network.”
As it relates to the current economic conditions and its effect on the Company, Mr. Barton also made the following statement, “In light of the current unfavorable capital market conditions, we wish to inform our shareholders of our continued success in selling franchises during this difficult economic period. The Company currently has several candidates under consideration for U-Save franchises in the United States, and has been advised by the U-Save master franchisee in Ontario of several candidates also considering U-Save franchises in that province. We wish to remind the investment community that with the exception of a working capital facility which has already been successfully renewed through December 2009, the Company has no other external third-party debt. While the credit markets continue to place significant strain on the economic conditions throughout North America, the Company, as a franchisor, does not require any fleet financing and is not subject to the constraints currently being experienced in the capital markets. Our franchisees continue to finance their own fleets, and we have already been advised by many of our franchisees of 2009 fleet orders made with automobile manufacturers. The Company continues to provide competitive insurance products to its franchisees for fleet operations.
That gives us some hope that not all the franchising industry is going down. If you know about franchise businesses that are doing good despite of the rough economy, please let us know in the comments.
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Posted on October 7th, 2008 by Sebastien
Douglass Crouse wrote a very interesting article for the The Record titled “As economy hurts, so does franchising”. Unlike most articles about franchising that usually tells you how great franchising is, this one paints a very realistic picture of this sector, at least for the time being.
Crouse writes:
Reduced access to capital has some franchisers struggling to maintain their growth and many franchisees wondering how to pay for improvements. Prospective franchisees, meanwhile, face having to raise hundreds of thousands of dollars for start-up costs at a time when banks are reluctant to lend.
So although some franchises are using arguable tactics to attract new franchisees, it seems that banks are not rushing to finance those new franchisees. Everything is not as bad as it seems though:
Jeff Kip, chief financial officer for Panera Bread, said he foresees no “structural change” in how franchisees obtain funding.
“Even in this time, our franchisees are not having any issues accessing the capital they require to run their businesses,” Kip wrote in an e-mail.
That response was supported by Jim Nawn, owner of the Fenwick Group, the franchise holding unit for 36 Panera Bread bakery cafés in northern New Jersey. He said a combination of in-house cash and bank borrowing has funded remodeling work at nine units this year. A store will be opening in Montclair next month.
It also seems that some industries are still doing pretty well in these tough times:
Franchises often fare better than other businesses during slowdowns. Scarda said service-based franchises — particularly what he calls “dull normal businesses” such as plumbing repair — tend to do especially well.
Cartridge World, which refills printer ink cartridges as an alternative to replacing them, has the benefit of offering a low-cost, business-to-business service that reflects the ideals of reuse and recycling, said Greg Carafello, master franchisee for New Jersey.
Read the full article here.
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Posted on October 7th, 2008 by Sebastien
That sounds awful, doesn’t it? Well, get used to it as it seems it’s going to be the new trend in franchising during these tough economic times…
According to an article by the Baltimore Sun:
Franchise companies, facing what many say is the toughest economic environment they’ve seen, are offering two-for-one deals, reduced fees and financing help to woo new buyers. They are also paying existing franchisees to help spread the word.
While I can understand and agree on financial incentives such as reduced franchise fees and financing help, I am strongly opposed to giving away a franchise when one is purchased.
The reason? Simply because it doesn’t make sense financially speaking. Yes, the franchisee will have a free franchise, but did this franchisee want to get 2 franchises in the first place? Most likely not. So now, instead of having to pay overheads on one franchise location, our poor new franchisee will have to deal with 2 locations.
I hope that new franchise buyers will not be duped by this dangerous lure.
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Posted on October 7th, 2008 by Sebastien
HeraldNet has a pretty good article on their website about how franchising can be a good idea if you want to be in business for yourself. This article lists some of the advantages and disadvantages to operating a franchise business that you have to take into account before making a decision.
Some of the advantages:
- You don’t need to reinvent the wheel - you will operate a business that has been refined and perfected for years
- You benefit from the brand - you are purchasing a brand name that most likely already has value in the franchise market place
- You get support - not only the franchisor will help you, but you can also get advice from other franchisees
Some of the disadvantages:
- You will have to follow the rules - it’s not called a “franchise system” for no reason…
- You will have to pay royalty fees - that’s part of the game
Reading this article, I understand some franchisees couldn’t deal with these disadvantages anymore:
After owning franchises for 11 years, Jones said he’s ready for business independence. He’s taking his restaurant franchise knowledge and applying it to his own concept. He has opened two Blazing Onion restaurants in Mill Creek and Snohomish.
Jones and Christensen said new franchise owners may also get frustrated paying a percentage of their sales (not profits) to the franchisor as a royalty fee. Those fees are different for every franchise.
The article ends on a franchise advice. So, what is the best advice a potential franchisee can receive?
Both stressed the need to do your homework and thoroughly research any potential franchise opportunity because many of the franchises in the market aren’t worth the investment.
“Be sure to visit several franchisees in the system you are considering. These owners will give you the straight scoop on what it is really like to run that franchise operation,” Jones said.
Read the full article here.
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Posted on October 7th, 2008 by Sebastien
The UTEP Franchise Center will have a franchise management certificate seminar at the University of Texas at El Paso on Oct. 23-25.
The Franchise Center’s 2-day management certificate program is designed to give participants a well-rounded look at franchising and help them decide whether franchising is the “right business decision” for them, Ibarreche said.
The workshop is open to the public. The cost is $875 for registrations by 5 p.m. Oct. 17 and $950 after that. Eleven scholarships are available; the deadline to apply for aid has been extended to 5 p.m Oct. 13.The public can also attend the seminar’s three luncheon events for $25 a day. Mark Liston, director of sales recruiting for Valpak, will be the keynote speaker at 1 p.m. Oct. 23. Dick Rennick, founder of American Leak Detection and former chairman of the International Franchise Association, will be the keynote speaker at 11:30 a.m. Oct. 25. A franchise round table will take place at 12:30 p.m. Oct. 24.
Click here for more info.
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Posted on October 7th, 2008 by Sebastien
If you are looking to buy a franchise in the Atlanta, GA area, do not miss the Franchise & Business Opportunities Expo in Atlanta this weekend. Over 30 franchises and business opps will be exhibiting there. If you’re new to franchising, you’ll be able to learn from the many free seminars:
- Using Your Retirement Funds to Start a Business
- What’s a Good Franchise to Buy? How to Pick ‘Em.
- Everything You Wanted To Know About Franchising
- What It’s REALLY Like to Own Your Own Business
- How To Create 61% Profits In Your Business
Visit this website for more info.
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Posted on October 4th, 2008 by Sebastien
The owner of a national bookkeeping franchise plans to expand into the Huntington area and is looking for interested franchisees.
Greg Jones, chief executive officer of Bookkeeping Express, said he drives through the area often when he’s taking his daughter into Kentucky — and he loves the town. So he’s talking with folks to get some franchises open that serve Cabell, Wayne, Mason, Lincoln and Putnam counties.
[via Herald dispatch]
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Posted on October 4th, 2008 by Sebastien
A young bear opened the door to a Subway restaurant and then sniffed around before leaving. The bear’s every move was caught on the store’s security camera.
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Posted on October 3rd, 2008 by Sebastien
Franchising in restaurants is one of the biggest opportunities for someone looking to start their own business as a franchise. Fast food and full service restaurants are both very profitable as franchises, and are good for both the business owner and the local economy.
Franchising allows the business owner to give exceptional service to the customer because the company takes care of a lot of things that a small business might have to deal with, and name recognition ensures that the franchise owner does not have to worry about losing money. This frees up the restaurant or fast food business to take special orders without difficulty or provide exceptional food at a reasonable price, for example, in a buffet format, essentially, to be the best restaurant possible. Read more »
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