Franchise Business Information

The current difficult operating environment calls for a special approach when working with franchisees. Franchise Relationship Institute Managing Director, Greg Nathan, provides tools, tips and strategic insights into advancing franchisor and franchisee interests more of interest to franchisees..

This article outlines a range of key factors and decisions to consider when evaluating international franchising in the UK and Europe. more of interest to franchisees..

In this article Jerry Wilkerson explains how progressive franchisors encourage and stimulate their employees to think and grow with the system. more of interest to franchisees..

Determining appropriate franchise income streams and setting their levels is one of the most difficult and important structural decisions made during the franchise system development process. Michael Seid explains some of the options, complexities and methods involved in determining the optimal income mix. more of interest to franchisees..

Tags: Lee Myles Automotive Franchise Information, Franchising, Franchise, leemyles, Lee Myles, Lee Myles Franchise, Franchise Opportunity

The concept of franchising is a couple of centuries old. The franchising business and world economies have developed simultaneously. The term franchise comes from old French where it meant freedom, or privilege. Franchising goes back to the feudal times when the feudal lords granted permission to their slaves and common men to hold fairs, markets, ferries, and even allowed hunting on their lands.

In the middle ages, kings used the concept of franchising when they gave contracts, or franchises for most of the commercial activities like developing roads, wells, and brewing ale.

As the concept of franchising developed further, it was seen as the right to monopoly that a person got to perform any kind of a commercial activity. As time passed, several franchises became a part of the European Common Law.

Singer Sewing Machine Company is considered to be the father figure of franchising as most of the concepts of franchising developed by them, form a part of modern day franchising contracts.

The way in which Singer made its sales and provided services is considered to be modern retailing that is a part of franchising. In the 1850s, Singer brought together teams of salesmen and dealers who were given the rights to distribute sewing machines in different regions. They made written contracts for franchising, which are the basis of modern-day franchise agreements.

At this point in time franchising was seen as the right granted by the manufacturer to sell and distribute products and service to the franchisee. Big oil refineries, automobile manufacturers, and many others also started following the concept of signing written agreements for franchisee distribution.

Proper business format franchising came into being, in the United States and other countries of the world, after World War II. This was the time when soldiers returned from the war to be back with their families and the baby boom took place because of which different and newer products and services became essential.

This was when the concept of franchising developed the most. It made its presence felt in the U.S. economy. This was also the time when most of the hotels and motels developed. With the increase in the number of franchises, the 60s and 70s saw a time when every second person was into the franchising business.

The decades of 60s and 70s also brought about a number of frauds in the franchising business. There were people who duped many others by taking money from them in return for a franchisee that did not exist and escaped with the money. On the other hand there were also many franchise businesses that went bankrupt. This was when the need for strict regulations for franchising business was given a thought.

In the year 1978, the Federal Trade Commission ordered that all the franchisers/manufacturers were supposed to submit the Uniform Offering Circular or UFOC before receiving money from the prospective franchisers. The UFOC provides the details of the franchise company, gives their history, audited financial statements, information of the officers, and the contract, or the franchise agreement.

At present, the franchising is seen as the most lucrative business option for many people who aspire to own a business.

Learn more about owning your own franchise business:
http://www.franchise-business.biz

About the Author
Howard Schwartz is a partner in several business strategy groups, including HJ Ventures International, Inc.
For more information visit: http://www.franchise-business.biz

Tags: Lee Myles Automotive Franchise Information, Franchising, Franchise, leemyles, Lee Myles, Lee Myles Franchise, Franchise Opportunity

There are so many naturally occurring business situations, which cannot be properly fit into the UFOC or Uniform Franchise Offering Circular for proper and legal disclosure to new franchise buyers as per the onerous rules and regulations in the Franchising Industry. You would think that a 250-page franchise agreement would be all encompassing, but it is not always. Often there are times when the rules and regulations do not consider other than straight black and white franchise sales. Such as transfers, trades, vendor deals, family members, original franchisee discounts to get the ball rolling.

Recently, I was discussing all this with an individual who unfortunately had their franchise fail. His comment was that in the UFOC it showed a lawsuit with a franchisee and then that franchisee s name was not listed in the exhibit section. The franchisee in the lawsuit was apparently terminated, which makes sense right? And then that franchisee was run by a family member of the Franchisor; Why you ask? Well simple, the Franchisor did not wish to have a closed store or brand name loss and the family member wanted to run the outlet, makes sense right?

Sure, but consider the problems now with the franchise documentation and proper disclosure. You must understand that Franchisors are required by law to make changes as they occur in the franchise documents. If the founder’s family member took over an abandoned franchise so the franchisor would not lose brand name due to an empty failed store in the beginning then there is nothing wrong with that business decision to do that. It is not deception to change the data, it is the law to upgrade it every 6-months.

The lawsuit is disclosed as is required by law. Sometimes when a transfer is made the new store owner changes the list of franchise owners. In the case of a terminated franchisee for cause or abandoned franchisee this would trigger a change in the list of franchisees in the back regardless. That is a very weak case unless the franchisee complaining about it bought their franchise prior to the date when the change was made, but never the less it was listed in the section of litigation, which is proper.

So, often onerous rules and regulations miss things like this because the people making the rules assume every franchise deal is cut and dry. It is not and to that point these types of issues should be considered. What is the answer to all this you ask? Well, reduce all the rules require no disclosure and thus no problem is created you see? Consider this in 2006.

Lance Winslow - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs/

Tags: Lee Myles Automotive Franchise Information, Franchising, Franchise, leemyles, Lee Myles, Lee Myles Franchise, Franchise Opportunity

Determining appropriate franchise income streams and setting their levels is one of the most difficult and important structural decisions made during the franchise system development process. Michael Seid explains some of the options, complexities and methods involved in determining the optimal income mix. more of interest to franchisees..

The current difficult operating environment calls for a special approach when working with franchisees. Franchise Relationship Institute Managing Director, Greg Nathan, provides tools, tips and strategic insights into advancing franchisor and franchisee interests more of interest to franchisees..

What makes a franchise successful today may not work tommorrow. This article explores four key trends and challenges that are forcing many big names to change operating practices and product/service offerings. more of interest to franchisees..

Mark Siebert, iFranchise CEO, provides expert tips for developing your franchise’s national expansion plan. more of interest to franchisees..

Tags: Lee Myles Automotive Franchise Information, Franchising, Franchise, leemyles, Lee Myles, Lee Myles Franchise, Franchise Opportunity

In the world of franchising it is imperative to have a cohesive marketing plan throughout all regions and all franchised outlets. Without a comprehensive and cohesive marketing plan, with each franchisee doing their own thing the overall message to the consumer can become so diluted that synergies which are of supreme benefit to franchise systems are lost. It behooves all members of a franchise company to support a main message and participate in all marketing, advertising and promotion.

To prevent these issues from hurting my franchise company, by established in the franchise agreements, as well as a confidential operations manual guidelines, which addressed advertising, marketing and promotional issues. By addressing this issue early on in the franchisees business, I was able to prevent problems later down the road and insure that each franchised outlet was on the same page. Below is the clause that I used in our franchise agreements;

3.16 Advertising and Promotion

3.16.1 Independent Advertising

Franchisee, at its own expense, must conduct local advertising and promotional activities as reasonably required to enhance the public awareness, goodwill and image of the Franchised Business. Franchisee may not use any advertising, sales or promotional materials of any kind or conduct any broadcast advertising or promotion, without first obtaining the written approval of Franchisor, which approval will not be withheld unreasonably. To obtain approval, Franchisee must submit a copy of the proposed advertising to Franchisor for review. If Franchisor does not give Franchisee written notice of disapproval within fifteen (15) business days after receipt of the proposed advertising, then such advertising will be deemed to be approved. Nothwithstanding the foregoing, Franchisor may from time to time, in its reasonable discretion, provide Franchisee with such marketing programs and brochures developed by Franchisor as Franchisor deems appropriate for use in the Marketing Area. Franchisee may use such of Franchisor s marketing materials in connection with Franchisee s local advertising in accordance with Franchsior s advertising standards and without Franchisor s prior approval unless Franchisor sends written notice to Franchisee that the use of such marketing material is thereafter prohibited. Except as permitted under Section 3.15 above, Franchisor s approval will not be required and Franchisor will not review any portion of the materials referenced in this Section 3.16, with respect to pricing or the other terms of sale of the Services to be provided by Franchisee.

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Each franchisor should make sure they have a comprehensive strategy for marketing and promotion in that should include all advertising material in the should be read and reviewed on a routine basis. Additionally I would go one step further and suggest that a franchising company should indeed consult an experienced and knowledgeable franchise attorney on this issue to see if it makes sense to include such in their franchise agreements. Consider this in 2006.

Lance Winslow

Tags: Lee Myles Automotive Franchise Information, Franchising, Franchise, leemyles, Lee Myles, Lee Myles Franchise, Franchise Opportunity