New Franchise Opportunities

2006 saw The Franchise Doctor developing several great new franchise concepts. If you're the type of person that likes to get in on the "Ground Floor" we may have the answer for you.

The first is ideal for anyone who understands outstanding customer service and wants to earn a great living without having to rely on many employees to make it happen.

We've helped a 60-year-old business bring their unique cleaning concept into franchising. Their niche is Oriental, Persian, and other Specialty Rugs that can't be cleaned in the owner's home because they're on hardwood or parquet floors. Most customers actually bring their rugs to the franchisee's shop! Others are picked up and returned, for an extra charge. By not cleaning "carpets"--an industry that's very crowded--this franchise system is able to quickly gain market share and run it's shop with only part-time help. Franchiees enjoy a 5 day work-week. A low investment and low overhead makes this system very attractive to many. Click Here for More Details =>

Another great new concept is America's first "Ride In-Ride Out" motorcycle maintenance shop. Bikers love to ride--they hate being forced to drop off their motorcycle at the dealer for 3 to 5 days while they handle routine maintenance. These franchisees change oil & filters, replace brake pads and
tires and offer interval maintenance services for all brands of bikes. With 2 days a week off for riding, owners truly enjoy helping their fellow bikers enjoy their sport--and profit at the same time. Great saving discounts have been arranged for parts & supplies. Click Here for More Details =>

If a dessert concept suits your taste, you should check out the world's first rice pudding franchise concept. With over 35 delightful flavors, they're bringing smiles to mall visitors where ever they have a kiosk or in-line store. Nutritious, low calories, no trans-fats--much healthier than ice cream, gelato, cookies or pretzels! A low investment, lots of fun changing kids and their parents dessert preferences, and good profit margins, too! Click Here for More Details =>

If pets are your passion, we've an outstanding young Doggie Day Care and Pet Boarding service. Pets check in for a 9 to 5 playday or a weekend stay as their owners travel knowing fido is safe and happy playing with his peers. Fun and profits all in one economical franchise package. Click Here for More Details =>

2007 is already shaping up with several more excellent systems coming down the pike including an Italian Restaurant that thrives in rural communities and a Taco stand that keeps college students from starving.

Within the next few weeks there's going to be exciting news from The Franchise Doctor on ways to ensure you make the best franchise choice for your circumstances. Check back soon.

Is Franchise Ownership Right for You?

As a question that seems on the forefront of most of our callers minds, we thought we'd take time to come out and meet you in a Free 2 Hour Seminar.

Jim Deitz, The Franchise Doctor will start off our evening presenting "Everything You Need to Know About Franchising." Then Roberta Marcantonio, of Spherion will discuss "The Emerging Workforce" presenting hundreds of details you should know before you hire your first employee.

We'll then present details on a dozen outstanding franchise opportunities seeking investors in most markets.

As a reward for attending, each participant will receive Free our eBook, Insiders' Secrets to Buying a Franchise and their full FranchiseFit Entrepreneurial Report.

Our Free Seminar will be at the Huntsville, Alabama Marriott, Wednesday, April 19th from
7 PM until 9 PM or when the last question is answered. For Reservations: 800 903-0082

For more details, or to register online, visit our site.
http://www.franchisedoc.com/Huntsville.html

Will They "Just Say No?"

Buying a franchise is typically the most critical decision you'll make in your work life. While it's an exciting time, and you and your family are right to be enthusiastic about your future as they small business owner, be sure you don't let your "heart overrule your head."

When you start zeroing in on a franchise system that is appealing to you, many of your supporters will cheer you on. Often, your wife, parents, and friends will pick up on your enthusiasm-helping you gain confidence that you're headed in the right direction.

In most instances, the franchisor's sales team will be the most excited to learn of your interest.

Naturally, they have a financial interest in seeing you join the team. Many of them are unable to "Just Say No." Many take the approach that, if you have the money, you should be allowed to buy their franchise opportunity.

At this stage of your investigation, it's critical that you begin to evaluate your primary concerns. Do you feel that you could be undercapitalized? Are you unsure if you'll excell at your new job description? Are you concerned that the ramp up to profitability will be too long? Are you worried about the strength of competition in your marketplace?

While you're "friends and family" team may encourage you, it's critical that you press your advisors and the franchise management team with your concerns. A good franchise system will usually allow a prospect to speak directly to the Field Representative who will be your day-to-day mentor when you open your unit. This individual has his finger on the pulse of the franchisees in his region and probably does not want an underperforming unit in his area.

Anyone who shows concern about your potential success should not be discounted. He or she may well save you from a difficult financial future.

A good franchisor will regularly disappoint buyers by saying; "Sorry, but you are undercapitalized," "Sorry, you don't have enough experience at this time," "Sorry, our concept won't work in your home town."

In speaking with the salesman and your field representative, you should bluntly ask how often they deny a franchisee the right to buy into their system. Ask them of the most common cause.

Closely evaluate your own situation and feel comfortable if you're moving ahead with a franchisor that is wise enough to "cull" weak franchisees from the buying process-long before they joined network. In fact, The Franchise Doctor believes this to be one of the greatest advantages of joining a franchise system-having someone tell you the bad news that you may be too blind, or inexperienced, to see for yourself.

For more insights into the franchise buying process read "Why Buy a Franchise" on our web site. Also, be sure to review The Franchise Doctor's Recommended Systems.

Somebody Has To Say It...

When someone decides that it's time for him to take charge of his future and invest in a franchise, many hours are spent trying to select the best franchise system. Naturally this is a critical process and one that we devote hundreds of pages to on The Franchise Doctor's website.

However, until now, no one in the franchising industry seems to be addressing a very real factor that should be reviewed by each and every franchise buyer and their advisers. That factor is the impact that future terrorist acts may have upon a franchise system and the unit owned by the investor.

In June 2005, Senator Richard Lugar, Chairman of the Senate Foreign Relations Committee released The Lugar Survey On Proliferation Threats and Responses. This forty-four page report was compiled from surveys submitted to hundreds of experts on national security, both in the US, and around the world.

A chilling summary of this report states, "the odds of some type of Weapons of Mass Destruction attack occurring during the next decade are extremely high." In addition, "the survey responses suggest that the estimated risk of a WMD attack over five years is as high as 50%. Over ten years this risk expands to as much as 70%." (For the full report.)

Of course, these words seemed too prophetic to the residents of London during the month of July.

If you're evaluating an industry in which to purchase a franchise, you would be wise to evaluate the probable impact of another terrorist attack on US soil. Naturally, the city where you locate may also have an effect on your risk. Many businesses, from restaurants to dry cleaners to printers were adversely impacted by the 9/11 attacks in Manhattan. Even a year or two later when things seemed to have returned to "normal," there is less a need for many services in the immediate area of the World Trade Center towers due to their loss and the decrease in workday traffic.

Using the past to predict the future, we can surmise that the public will be less eager to fly, travel outside the US, visit major cities, utilize mass transportation, or even dine out depending on the nature of the attack.

Before you invest you should carefully evaluate the potential impact of another terrorist attack. If your business relies on travel, tourism, or entertainment you may decide to reevaluate your focus.

Most Americans tend to stay near home when safety is an issue. This can improve performance for businesses that serve their local communities compared with those who capitalize on tourists and business travelers. In addition, those offering home services may benefit from this phenomenon known as "cacooning."

After you and your advisors evaluate how you feel another terrorist attack could impact a franchise system that you are evaluating, you should ask the representatives of the franchise system point-blank how they anticipate such an event will change the sales growth curve of franchises in their system.

With all the variables that you must judge when choosing how to plan your business future, it's frustrating to have to add another layer of uncertainty. However, to fail to do so, would be foolhardy.

You're Late If You Want a Franchise in 2005

If you've been planning on buying a franchise this year, you're probably too late!

My calendar says it's time to be planning a Fourth of July getaway.

Having helped hundreds buy franchises in the last 25 years, I know that researching and reaching a decision takes time. Then there's often a site search, remodeling and headquarters training. Combined, you're talking 3, 6, 9 and often 12 months from the time you sign your Franchise Agreement until you open. Chances of being open by year end are slipping away.

And you haven't even found the right franchise system yet!

Here are a couple of guesses as to why your January, 2005 New Years Resolution is so far from a reality.

Many franchise buyers spend hours surfing the internet looking for their "perfect match." Unfortunately, most don't know where they'd excel if they bought their own company. We provide a tool called the FranchiseFit Entrepreneurial Survey that's helped many gain a better focus on their next career--as a franchisee.

"When you don't know where you're going, how will you know when you get there?" This common question posed by goal setting seminar leaders applies to you in your franchise search.

If you spend time reading short ads on franchise offerings saying to yourself, "No, too competitive." "No, not profitable enough." "No, too hard to find employees." "No too boring!" You're Never going to own your own business!

If you are truly ready to own your own franchise, you need to pick up the phone today and call somebody!

Call a couple of franchise systems that seem even moderately interesting. Ask the salesman what business personality and experience has proven to be most beneficial to new franchisees. If that matches your profile (see above), fill in their qualification sheet and begin a dialog. Ask them to send you their Uniform Franchise Offering Circular and then call two or three existing franchisees for help in understanding what they do in their daily activities. If this matches your interests, find out if they're making any money. Surprisingly, most will give you a great deal of help because they want other winners in their system. They also want to prevent those who should not join from making a mistake.

Keep repeating this process every week until you "fall in love." Remember, your lack of clear focus, your lack of "insider knowledge" of how each system works, and your innate fear of failure will prevent you from moving ahead unless you start motivating yourself.

Think back to when you began to consider owning your own franchise. Why haven't you invested yet? Unless you change your pattern--and I've just suggested a proven method--YOU'LL NEVER OWN YOUR OWN BUSINESS.

You may think there aren't any good franchises out there. But, with all due respect (as they say in Washington), I hope you don't think you're smarter than the owners of 800,000 franchises that are now in operation!

Check out the resources available at The Franchise Doctor's website; read enough articles to get your free "MBA in Franchising;" consider our book Insiders Secrets to Buying a Franchise and take your FranchiseFit Entrepreneurial Survey.

You could also call us with your questions--800 220-8256.

It's time to stop just sitting there and DO SOMETHING!

Spotting Red Flags in Franchising

Recently a caller asked, "What are some of the most common "red flags" that should warn one away from a particular franchise system?"

My reply: While the Franchise Doctor believes that buying a franchise is the best business decision for most aspiring entrepreneurs, there are some systems that seem to disregard the needs of their franchisees.

A quick check of their "corporate culture" can be as simple as measuring the time needed to respond to your inquiries. If calls from a buyer are not returned promptly and courteously, you may have discovered a lack of attention to their franchisees.

Another way to analyze their culture is the system's approach to their fee structure. Some systems charge very high licensing fees (up to $50,000!), then "pile on" fees for using their proprietary computer software (to $15,000 per year) and then demand 8 to 10% royalties on every dollar you produce. While their salesman may provide a great pitch that these fees will not slow your growth, we've found that most franchisees feel these fees are a heavy burden 2 or 3 years after opening.

A very critical concern is called infringement. When a franchisor sells many franchisees the rights to open within a small geographic area, customers will typically frequent each unit equally and therefor reduce sales in each. Some food franchises now grant a license to operate "within these walls"--clearly warning that another unit may be placed across the street. Some food franchises today sell their products through grocery stores. If a consumer can buy frozen tacos or gourmet ice cream at the store, will they frequent your unit more or less often? The franchisees of Taco Bell and Ben & Jerry's Ice Cream seem divided on the benefit/liability of these alternative distribution systems.

Franchisees will usually share their experiences with you if you call and explain your interest in joining their system. If many say they would consider selling their operation at low prices (compared to the start-up investment), you may have discovered a problem. You'll find an extensive list of suggested questions on our Home Page in the article "How Should You Evaluate a Franchise Opportunity?". The clincher is, "If you knew then, what you know now, would you still buy this franchise? Why or why not?"

Do your homework and be sure you're joining a network where franchisees are seen as very valuable partners in the system.

Looking Beyond the Hype and the Documentation

Tips for Matching Your Franchise to Your Personality, Skills & Interests

Before you invest in a franchise, evaluate yourself: What job experiences have you enjoyed? Disliked?

Are you experienced in sales? Customer Service? Employee Hiring & Management? Can you manage money? What is your energy level? How do you handle stress? How do you define a long day? How competitive are you? What are your persuasive abilities? Level of Creativity? How decisive are you? What are your feelings toward these functions?

What is the demand for these functions within the franchise system you are evaluating? Can you confirm this?

Have you evaluated the people at the franchisor with whom you are dealing? Are they "your kind of people?" Are they knowledgeable about the industry and the system, or just "hustlers." Have you talked to the Regional Operations Manager who will visit your unit? What about the head of training? How do you evaluate the other franchisees? Are they similar to you in background, experience & philosophy?

What can you learn reviewing the "tone" of the franchise offering circular? Any legal problems of concern? What is the background of the principals? Can you verify their philosophy in industry trade associations? Are fees reasonable and competitive? (Any reductions as you grow?) What about the ad fund? Do you understand how its used? (Are most franchisees satisfied?) Does the tone indicate a "partnership" mentality or "parent/child?" Any onerous provisions?

You should plan to obtain several Offering Circulars so that you'll have something to compare to. All franchise systems are NOT created equal--you need to discover how you'll fit in before you invest.

The Franchise Doctor's FranchiseFit Entrepreneurial Survey is a great tool to help you learn what personal job descriptions will be the best match for your personality.

Another great tool to help you wade through the hype is The Franchise Doctor's book "Insiders' Secrets to Buying a Franchise."

Franchising's Future Around the Globe

I recently joined 50 other Franchise Executives at a dinner with Matt Shay, the newly appointed President of the International Franchise Association.

It was interesting (and reassuring) to hear his appraisal of the future of franchising. In addition to working with Washington to strengthen the industry in the US, Matt's been working around the globe to help companies expanding internationally. Naturally, many companies are hopeful about future expansion in India and China--two nations that, combined are the homes of over 21% of the world's population.

As for current US data, Shay said that the most recent count of franchisors that have registered in the major states for three consecutive years total about 1,250 companies. Combined, he estimated, they service about 800,000 operating units in everything from brakes to burgers.

Clearly, franchising works!

For details about some great opportunities in the US, check The Franchise Doctor's site.

Taxes, Franchising and You

Well, it's April 15th and many are fretting about their Income Taxes.

If you haven't heard about the growing debate in Washington about how to change our tax system, you should take the time to study the programs and see if you agree that a National Sales Tax is the best solution.

If Income Taxes are eliminated and all taxation is collected through a Sales Tax, those working in the underground economy or getting paid cash, will start being taxed when they spend their money.

Studies show that this program will cause more Americans to save, rather than spend, their money. This will keep interest rates low, as there will be a greater supply of money to lend.

Companies will no longer find it advantagious to move factories out of the US to avoid taxes and you won't be spending hours collecting data and paying fees to a tax preparer to comply with the tax code.

Most who have studied the proposed plan agree that the US economy would be the strongest in the world for years to come. If you're a franchisee, you'll share in the growth and the vibrant economy.

A Georgia Congressman, John Linder has been championing such a program for years. It's now gained recognition as The Fair Tax. To learn more check out the Fair Tax Organization's website.

A syndicated talk show host, Neal Boortz has been on board with this plan for several years. With the current administration evaluating new tax programs, it's time that you decide how you feel about such a plan and let your congressmen know. Check his ideas on the boortz.com site.

A Book You Should Read

For all of you planning to buy a franchise, I think Thomas Sowell's book, "Basic Economics" should be Required Reading. He defines economics as the study of the use of scarce resources which have alternative uses.

Sowell explains that free market economies generally result in the best opportunities for the consumer as well as the most efficient use of resources. For Americans, this is great news–since we have the freest trading in the world and deregulation is making it even more open to trade with few restrictions.

He explains how most of the economy is not a zero-sum game; how exporting jobs brings more wealth to America thru increased stock prices and more jobs(often higher paying jobs) in industries where we excel--like banking, science, medicine & pharmaceuticals; and how a trade deficit is not a bad thing as most of us have been programmed to believe.

Why are homeless people sleeping on the sidewalks of New York City in the winter when abandoned apartment buildings in the city have four times as many dwelling units as there are homeless people in the city? Why are people hungry in Moscow when there are vast amounts of some of the richest farmland on the continent of Europe within easy driving distance?

Sowell addresses price controls and subsidies in detail, both as important political issues in their own right and to demonstrate how prices work by showing what happens when they are constrained. He covers a broad range of topics, from scarcity, the balance of trade, and price controls to minimum-wage laws, competition, profits and losses, and the role of government.

Sowell is clear & concise about a topic most of us don't fully understand but need to in order to vote more competently and manage our businesses and family finances.

Buy it now at Amazon:

What's a Franchisee Do All Day?

As you're sitting at your computer dreaming of owning a franchise, are you carefully planning your future? Or are you about to make a disastrous mistake?

We often get calls from prospective buyers who ask "What's hot?"

My response is often "NASCAR and the World Wrestling Foundation! Do either of these interest you?"

It's amazing how quickly people connect with my belief that what's right for Jeff Gordon may not be right for you.

You may be sitting there evaluating franchise systems by how strong a demand there is for the product or service provided to customers. Currently, Tex-Mex restaurants are "hot" but if you have no restaurant experience and little experience managing entry level workers, you probably should stay clear of food services.

Home health care is another hot niche, with the longer life spans of seniors. However, if you were a top salesman in a business-to-business environment in your last life, you may not have the patience to assist those who are frail and forgetful.

If you're day dreaming about your future job making large bank deposits, trading cars and buying a home at the beach--YOU NEED TO SNAP OUT OF IT!!

Most franchisees report that they draw less money out of their business the first year than they did the last year they worked for someone else. Their rewards came in the later years.

More critical than how "hot" the market segment may be is how much you'll love your work. In franchise systems where the owner invests less than $250,000 to get started, the owner usually carries 80% of the burden for the company's early success on his or her shoulders. Enjoying your Job Description in the early years is critical, since you may be working 50, 60, or more hours a week.

Unfortunately, many franchise salesmen lead you into believing that preparing bank deposits, paying a few bills and coordinating employee schedules is all it takes to succeed. You must demand to know how franchisees spend their time in the early months of their unit and what they do as they mature. Write up a list of activities and assign amounts of time to each. Then call franchiees and get confirmation that this is accurate. Does this sound enjoyable to you?

If not, it's time to resume your search. For more help, check The Franchise Doctor's Website call us with a question (800 220-8256) or post one here.

Do Franchise Royalties Hurt the Franchisee?

Many first time entrepreneurs feel that the added expense of franchise royalties will cut into their profits and make the business less attractive than if they were independent. The attached chart shows the impact a good franchise has on sales and profits.



Grand Opening Sales (and resulting profits) are usually higher for a franchise unit than an independent. After that, sales grow more rapidly thanks to a proven marketing plan, advertising programs that work, and help in choosing the right site for the venture. The franchise's training keeps the neophyte from going down many "dark alleys" that consume cash, time and energy. In addition, you gain name recognition and discounts on equipment, inventory and supplies---all adding to your bottom line. Over time, the independent business never catches up! If you don't have at least five years' experience managing a business similar to your new venture, a quality franchisor will be worth its weight in gold!

It's important that a buyer remembers his goal–-income drawn out of the business for personal and family needs. "What's in it for me?" should be the question. If sales of a franchise unit exceed a comparable independent by 35% to 50% (a very common scenario), if costs are 5% to 10% lower due to group purchasing power, then your profits should far exceed your competitor's. Don't be concerned about paying royalties. Determine that the operation's profits to you, the owner, will exceed what you could achieve as an independent, by more than the amount of the royalties. Remember, too, that when you decide to sell, you can expect to sell your unit more quickly and for a higher price than if you were offering to sell an independent business.

More proof that franchising is the best model for most entrepreneurs.

For more ideas on franchising, visit The Franchise Doctor's Website.

Why Should I Pay to Join a Franchise System?

Recently, a caller asked, "If I'm going to pay Royalties to a Franchise System, why do they insist that I pay an Initial Franchise Fee too?"

My answer went like this:
Most franchisors report that they're happy to break even each time that they get a new franchisee open. First there is the cost of advertising til they find an interested party. Then they must qualify the prospect and customize a territory and franchise license for them. Next comes site selection and oversight of their build out. Then training at headquarters for 1 or 2 weeks and visits by corporate staff during the grand opening.

This often consumes $15,000 to $30,000 which offsets licensing fees that are usually between $12,500 and $35,000.

While everyone hopes for a "great deal," if you are looking for a financially strong coach and mentor, you should understand that making profits through ongoing Royalties is the business model of most franchisors--not by profiting--nor losing every time a new unit is sold.

For more details on finding and evaluating franchise systems, visit The Franchise Doctor's website.

Finding a Dedicated Franchisor

As most of you know, The Franchise Doctor works with many successful businesses to develop their franchise programs. We help them decide what services to offer their franchisees and how much to charge those who join the system. We guide them through preparation of their Uniform Franchise Offering Circular (UFOC), their Franchise License (or contract) and spend hours formalizing their training manuals. This process usually takes 90 to 180 days and helps us really get to know our clients and their franchise opportunity.

I recently got a call from a local entrepreneur who's running a successful company and wanted to explore franchising his concept. When we met, I became enthusiastic when I learned that many of the critical factors we seek in a successful concept were present. The company had several years of profitability and good cash reserves. The franchisee can be home-based; requires less than $20,000 of equipment to get started; targets a large group of businesses; and the system
can be taught in a week-long training class.

After a couple hours exploring how we could work together to develop a great franchise system, the owner stated, "I don't want to work that hard. I'd rather just train a bunch of people & let them sort it out. I don't want to be responsible for their ongoing support."

It seems he'd run another company for many years and sold out with enough money to retire. Instead, he began his present company and built another successful venture. Now his financial security allows him to take time off for travel several times a year. He doesn't have the passion to be a mentor for dozens of new franchisees who are just beginning their companies.

I applauded his frankness and told him he should not try to get into franchising unless he's prepared to dedicate himself and his resources to the success of his franchisees.

While this is an unusual response from someone who called me regarding franchising, I wonder how many fledgling franchise systems are led by someone lacking the drive and energy to grow a system to 20, 50, 100 and more franchisees.

When you're searching for your franchise partner, be sure you closely evaluate the principals' dedication to mentoring you for the next 10 years. In most systems, you'll have an opportunity to talk directly to the President or Chief Operating Officer before you sign your license. Ask them their plans for the company for the next 10 years and be sure you get the commitment you demand before you join.

For additional details on how to evaluate a franchise system, check this article on our website: How to Evaluate a Franchise System.

Franchise Doctor Checks In

Here it is! Based on many requests from our regular Newsletter readers and clients, we've decided to enter the world of Blogging!

We receive many great questions every day but our answers generally go only to the inquirer. Now, we'll take the time to post some of the best questions and responses here to allow a global universe to benefit from our exchanges.

We'll also post details about some of our favorite discoveries--young franchise companies that are just beginning to make their mark.

Our Goal is to provide "preventative medicine" to insure that, when you invest in your own franchise your net worth gets healthier.

Please check back regularly to view our progress.

If you've a question that demands an answer, feel free to post it now.