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The birth of franchising

Franchising is the engine that drives much of the world's entrepreneurial train, but it's more than just fast food. Today, you can't drive down any major street anywhere in the world and not pass by some business that is part of a franchise network, and those businesses can be in any of more than 120 distinct lines of businesses today.

Franchising has a long history stretching back to ancient China. The crowns in Europe even used it to control their lands and to explore and conquer the globe. The history of franchising is pretty interesting. But, before we jump right into the thick of things, we want to share the story of Benjamin Franklin.

Now every grade student knows about one of the most important of our founding parents - the bifocaled inventor of seemingly everything including the lightning rod, the flexible catheter (we don't want to know what they used before), swim fins, the odometer, daylight savings time, the Franklin Stove and even a library chair that converted into a stepladder. Old Mr Franklin even invented a musical instrument called the armonica for which Beethoven and Mozart both composed music. Benjamin Franklin gave us our first understanding of the properties of electricity, founded the nation's first hospital, charted the temperatures of the Atlantic Ocean, drafted the Albany Plan, cowrote the Declaration of Independence and on top of all that found time to create the first franchise system on these pre-United States shores.

It was back on September 13, 1731, 45 years before the US was even a nation, that Benjamin Franklin and Thomas Whitmarsh entered into the first franchise, or what they called a 'Copartnership for the carrying on of the Business of Printing in Charlestown in South Carolina'. The printing shop published The South Carolina Gazette as well as being the local printer of many of Franklin's writings including the Poor Richard's Alamanack. Ben went on to establish other franchises in the colonies in the years before the revolution.

Without Benjamin Franklin, the French likely would never have entered into the US War of Independence against the British. Without the income Ben earned as a franchisor, he may not have been able to support himself while living in France, So, have a celebration each September 13 to honor the first franchise because it and Ben were important contributors to the birth of USA.

Patent for a franchise

Look at the above cartoon for the ideas people have in getting new patents. "How Ozzy introduces his new gobble head dolls."

Finding the right franchisee

Prospective franchisors may have a hard time when they are planning to expand their successful business as looking for a capable franchisee is not an easy job. Here are some probable mediums which can help the franchisors in their search for franchisees…

Once the franchisor decides on franchising then the next step will be to search for a prospective franchisee who can help the franchisor in achieving great heights. For an entrepreneur who is new to the road of franchising can commit a mistake by signing the franchise agreement with a franchisee without being assured of the franchisee’s dedication and passion in eagerness of expanding the business. This hampers the expansion of the venture. Therefore eradicating this shortcoming has become a necessity for which this article is a must read! Given below are some mediums which can make the franchisor’s work easier:

• Search on the websites: Long back the search for franchising information was far more physical, time consuming and expensive. Today, information has become more accessible and search has become easier. At a click of a mouse, we can log on to new websites of franchising, rapidly explore and compare franchises. The process of searching for the ideal franchisee can be successfully done even sitting at home. Once you log on to the internet and punch in the key words related to franchising there will be numerous sites available which especially cater for the matchmaking between the ideal franchisors and franchisees. You can surf all these websites that will help you get in contact with your aspiring franchisees.
• Advertising in newspapers: The age old system of advertising in newspapers is timeless and evergreen. Search for an apt franchisee can come to an end by publishing an advertisement in any business newspaper. Aspiring franchisees can come in contact with you through this trusted and tried medium.
• Franchise trade shows: Another option of locating your franchisee is through the franchised trade shows. These trade shows provide a platform to those who want to expand their successful business through franchising and those who want to take a franchise of that business. One can meet a large number of interested and passionate entrepreneurs. This face to face meeting can help you in clarifying your doubts and taking a decision.
• Franchise journals: A number of journals which are into franchising can also help you in searching for franchisees. In these magazines and journals there is a list of franchising companies with their contact numbers, e-mail ids etc. The potential franchisees mostly are in the habit of reading these journals. Finding your business franchise interesting they can come in contact with you on their own. Therefore make sure to enroll yourself in such franchising magazines.
• Social networking sites: The last but certainly not the least is the social networking sites which can really be of assistance in your search for the ideal franchisees. There are a multiple networking sites like linkedin, facebook, Orkut etc through which the probable franchisees can come to know about your business and can contact you for the same. Therefore it is essential to make your account on such social networks and also do not forget to keep updating as well so that the entrepreneurs become aware of your expansion. Through these sites the franchisors can also come to know about the many likely franchisees.

It is said that a best franchisee is one who is willing to operate within the guidelines of the established business model and is also effective at leading a team and making right decisions to further expand the business. Before looking for a franchisee we should also keep in mind and look for a specific category of people who are from a specific professional background. The military is one such profession. An ex-serviceman can be your ideal choice for a franchisee as there are some attributes which are needed in the franchisee. These may be decisiveness, perseverance, able to manage things, maintain a code of conduct etc. These skills are taught and inculcated in servicemen, thereby making them perfect franchisee material. If you know any ex-serviceman who is also interested in business, he may be one of your successful franchisee. All the best for your search!!

Frachisee cartoon

Sure, I'll join you! What happened to the regular crowd?

Street Smart Franchising by Joe Mathews

Street Smart Franchising is a book by Joe Mathews, Don DeBolt and Deb Percival which should be read by anyone who wants to be a successful franchisee before he starts looking for a franchise. The book covers topics like What's a franchise, Why should I invest in a franchise, Understanding your behavious style, What does winning look like, What does it take to win a franchisee, The learning curve of a franchisee, The evolution of the franchisee-franchisor relationship, Locating franchise opportunities & Following a six step franchise investigation process and helps you decide upon a franchisee option.

Joe Mathews has held management roles with such national chains as Subway, Blimple, Motophoto and The Entrepreneur's Source. Don DeBolt is a former president of the International Franchise Association and Deb Percival works in Franchise Development.

Cartoon: Let's franchise it

Another franchisee cartoon which says, "Our seventh step program for wealth accumulation worked for us, so let's franchise it."

Common questions about franchising?

We will try to find answers in the coming posts to some of the common questions that are asked about franchising from frachises to franchisors such as the following:

• What is franchising?
• When did franchising actually start?
• When I visit a franchise store anywhere, say a well known pizza store or fast-food restaurant, how can I come to know whether it is operated by a franchisee or by the franchisor itself?
• How widespread is franchising?
• What is 'Business Format' franchising?
• What are the major growth industries in 'Business Format' franchising?
• Specifically, what kinds of businesses lend themselves to franchising?
• Are the 'look-alike' characteristics of franchises a disadvantage? Don't consumers want some variety?
• What should I consider before buying a franchise?
• What is the Federal Trade Commission Franchise rule?
• How can I be sure that the information provided in the disclosure document is truthful & accurate?
• Are there any other laws which protect me?
• If I want to buy a franchise, what should I do to get started?
• What kind of investment is necessary to buy a franchise?
• Would I make a successful franchisee?
• How can I be sure I won't lose money?
• What are some of the drawbacks of owing a franchise?
• Why should I be concerned whether a company is a member of the International Franchise Association?
• Are there any current trends in franchising?
  

Want a franchise

The above cartoon depicts the mindset of franchisors who are looking for franchises anywhere they go. Here the franchisor is saying to potential franchises, "Hi. Would you guys be interested in a Starbux franchise?"

Franchising for Dummies by Michael Seid

Franchising for Dummies is a book by IDG Books Worldwide wherein Dave Thomas gives you the keys to success in any type of franchise alongwith Michael Sid. Franchising for Dummies can be regarded as a reference for all of us. The book covers franchising basics, establishing a franchise, operating a franchise, deciding what to do in a franchise and how to search for a best franchise. If you're interested in opening a franchise, let Dave Thomas and Michael Seid explain the ins and outs before you sign on the dotted line. From finding the right franchisor to setting up a smooth-running operation, they walk you through the sometimes bewildering choices you face - and show you step by step how to succeed.

Dave Thomas is founder and CEO of Wendy's International. Michael Seid runs a franchise consulting business. Elizabeth J. Gatewood, PhD, the director of the Johnson Center for Entrepreneurship and Innovation at Indiana University, provided a technical review. With Franchising for Dummies you will discover how to:

• Understand the latest legal issues
• Find an ideal location
• Manage daily operations
• Work with your franchisor & fellow franchisees
• Expand your franchise
• Franchise your own small business

Franchising cartoon

See the cartoon above that parodies on the franchising industry saying, 'Franchising for the concept intolerant. Lose weight now! Ask me how!'

Event Franchising

You would see events such as beauty conferences, contests, conventions, trade expos & trade shows happening in major countries of the world. When these events are franchised by exhibitors in other geographical areas, while retaining the original brand & logo, mission, concept & format from the original exhibitor, it's called Event Franchising. As in the classical style of franchising, only those events are franchised by the exhibitors which have been highly successful. The best example of Event Franchising is the World Economic Forum which has some regional event franchises in China & Latin America. Seeing the success of WEF, they have launched many national events as well.

What to franchise...

Generally those businesses are frachised by the franchisors which:

• have a good track record of profitablity
• are fast moving
• have a vast geographic appeal
• are easy & inexpensive to startup & operate
• can easily be duplicated or competed
• have a long term running potential
  

Understanding the Uniform Franchise Offering Circular (UFOC)

Uniform Franchise Offering Circular, or UFOC in general, is a legal document that the franchisors give to their franchisee before any contract is signed between them. Usually, the UFOC is given at least 10 business days before the legal contract is signed & any money changes hands according to the present laws in the USA. The UFOC contains information such as franchisor profile which gives the franchisees enough insight into the business they are franchising & educates them about their investments in the franchise. The UFOC has atleast these 23 sections with detailed information:

• The Franchisor, its Predecessors & Affiliates
• Identity & Business Experience of Key Persons
• Litigation History
• Bankruptcy
• Initial Franchise Fee
• Other Fees & Expenses (if any)
• Franchisee's Initial Investment
• Restrictions on Sources of Products & Services
• Obligations of the Franchisee
• Financing Arrangements
• Obligations of the Franchisor
• Territory to be covered
• Trademarks ownned
• Patents and Copyrights claimed
• Obligation of the Franchisee to Participate in the Actual Operation of the Franchise Business
• Restrictions on Goods and Services Offered by the Franchisee
• Renewal, Termination, Repurchase, Modification and/or Transfer of the Franchise Agreement
• Public Figures
• Earnings Claims
• List of Franchise Outlets
• Financial Statements
• Contracts
• Acknowledgment of Receipt

A new rule by the Federal Trade Commission (FTC) of USA names UFOC as Franchise Disclosure Document, or FDD, and imposes new requirements for its contents & disclosure of information failing which franchisors may face penalties & lawsuits.

While buying a business

The following tips would be useful for you while buying a business:

• See if your are qualified, technically & operation wise, for doing the kind of business you are buying
• Talk with the new employees & see if you can deal with them
• Do a complete backgroud check of the business you are going to takeover
• See if the new business has a positive cash flow
• Take the help of a business appraiser to value the new business
• Take the help of Mergers & Acquisitions firms to find more options
• Don't take decisions in haste
• Plan the entire acquisition deal & execute in proper order
  

Choosing a franchise opportunity

Choosing a right & long-lasting franchise opportunity requires a lot of research, investigation & efforts. Once done you can bank upon the business acumen of another person.

Everyone of us somewhere cherishes a dream of owning a business & many face tough times setting it up. Many people change businesses in search of a right business for them and some setup a franchise for an already famous business. A franchise allows us to be our own boss & provides an opportunity to be the owner of a successful business.

Large number of franchise opportunities are available in the markets today for almost every industry & many of these businesses are well established with proven systems and support structures in place, while others are comparatively new. Now, before one starts imagining oneself as a successful business owner it is very essential to make a right franchise selection. Right franchise selection reduces the risk & elevates the levels of success. Here are a few tip to select a right franchise for yourself:

1. Analyse yourself: Do you have the qualities of an entrepreneur or not? Ask yourself the reason for owning the franchise business. Check out for your marketing and sales qualities. Also consider your family obligation and the amount of time you can spare.
2. Financial investments: Take a close look at the kind of investment that you can make as all kind of small as well large opportunities are available in franchising.
3. Understand franchising: Before investing in any business just understand franchising as a concept. Search on the internet for better understanding.
4. Study various franchise opportunities: Talk to franchisees in various sectors and understand their working systems. Ask them as many questions as possible and consider the success rate of various franchises.
5. Examine the industry: Once you have finalised the industry for which you want to take up a franchise talk to all the franchisors of that particular industry. Evaluate them in terms of training and support they provide, investment required in terms of money and market value of the brand.
6. Take an accountant’s assistance: Talk to your accountant about income and profit projections made by the franchisors and talk to a solicitor about the franchise agreement.
7. Do not rush out for decision: To maximise the chances of success it is imperative you do not rush your decision. Consider all aspects before committing yourself.

Make yourself 100 per cent sure, that the franchise is right for you before making an investment.

Franchisee business in USA

USA is the biggest market in the world for anything. You name it and it's sold in large amounts there. It's home to the largest supermarket chains in the world and franchises owing to the steady industrialization of businesses. Entrepreneurs get their ideas patented, create a store & start franchising to get maximum out of their business model. Some of the top franchisee chains A&W Root Beer, Coca Cola, McDonand's, Western Union & Singer.

According to an estimate by the International Franchise Association, approximately 4% of all of the businesses in the USA are franchises and many are sold by the owners owing to reasons such as relocation, etc. You can also find Franchises for sale in the Biz Super Mall website under different categories.

Types of businesses for sale

You will find the following types of frachises & businesses for sale in Biz Super Mall by their respective owners, or brokers:

• Advertising & Printing
• Apparel Stores
• Auto Dealerships
• Auto Parts Businesses
• Auto Repair Businesses
• Automotive Services
• Bars and Taverns
• Beauty Salons
• Business Services
• Business Start-up Opportunities
• Commercial Cleaning
• Computer & Software Services
• Construction Related Companies
• Contracting Businesses
• Convenience Stores
• Day Care Centers
• Dry Cleaners
• Durable Goods
• Education Companies
• Entertainment & Recreation
• Fast Food Restaurants
• Flower Shops
• Food Companies
• Furniture & Home Decorating
• Gas Stations
• General Merchandise Stores
• Health Care Companies
• Hotels & Motels
• Internet Business Services
• Internet Companies
• Internet Consumer Services
• Landscaping & Gardening
• Laundrornats
• Liquor Stores
• Medical & Dental Businesses
• Nondurable Goods
• Personal Services
• Pre-Schools
• Printing & Publishing
• Restaurants
• Retail Businesses
• Supermarkets
• Vending Machines