Franchise Maven Feb 10 Newsletter

Hello, friends and franchise mavens.

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As always please let me know what you would like to read about in my newsletter!

Do you have a business that you want to turn into a franchise or would just like information on what that would mean to you???We do that and help you grow the franchise as well.?Ready to sell that franchise system??We do that as well.

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Investors Corner

While we receive quite a few inquiries about resales I m always amazed at how many people switch from resales to passive (franchisor runs it) or semi-passive (10-15 hours per week) new franchise opportunities. Many of these opportunities are with franchises that have 100 or more franchises, just none or very few in your area.?Industries of interest have been restoration, HVAC, electrical, plumbing, pets and tutoring.

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Interesting article on investing in the beauty industry:

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Placements

Congratulations this week to Tony and James who went the semi-passive and passive route.

Tony opened up his dog grooming business in Woodbury MN.?If you are in the area and have pets, contact me and I will connect you with Tony.

James went the completely passive route and will have the franchise run his business which?focuses on refinishing wood and fiberglass doors with a focus on the Front Entry Doors.?James took over the entire Austin TX area with 5 territories.?If your doors need some help and you are in the Austin area contact me and I will get you in touch with James and his team.

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Top resales this week:

Prime Resale Opportunity Available in the Richmond, Virginia Area!

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Take over a franchise with an established customer base and all the supplies you need for immediate start-up for less than you would pay for the initial franchise fees!?Be part of the $16 billion pest control industry with a franchise that the right enthusiastic buyer could easily double the revenues in 2023.

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This franchise was established in 2020 and serves the Mechanicsville, Chesterfield and surrounding areas of Richmond.?The franchise has seen good growth but has so much more potential having been open for such a short period of time. The community already sees the value and loves the service!??There are 230 active customers with the revenue doubling in 2022!

Would you like more information???

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Real Freedom?

Why Franchises Are Worth Considering and How They Can Be Used To Build Wealth

Chapter 7:

What to Look For!

Negotiations (Nice and Simple)

With Richard, we found that perfect franchise for him. He didn't want a nine-to-five, every day. He wanted to get out there and find something that was enjoyable. That was his big thing. So, we found a services industry for him. These are some of the things we went through with Richard: we went through the FDD and franchise agreement, how to go about finding those employees, how the franchise is going to help you to make it a lot simpler. That's why you pay the franchise fee and the royalties—you're looking for a nice, easy, simple process that's not too complicated.

With territory, some things are negotiable and some things are non-negotiable in the franchise agreement, and that's where a good franchise attorney comes in. Keep in mind I am not an attorney, and I cannot give you legal advice at any point in time whatsoever. That is why you need a good franchise attorney to look through this part and to look for things that stand out. This is not like a job where you go into corporate and where everybody's paid differently. When you go into corporate, you can negotiate. However badly they need somebody at that point in time, you can go in there, and you can negotiate your salary.

When I worked in corporate, they did not really appreciate it if you talked salary amongst each other. They discouraged that sort of thing. A franchise agreement is just the opposite—they want everybody on the same playing field. There's not a lot that is going to be negotiable in the franchise agreement itself. They want to keep everybody on a level playing field. Keep in mind that if everybody negotiated their own terms on a franchise agreement, once you get up to 100 or 500 franchisees, that's just going to be a nightmare to try and keep track of. They keep everybody exactly on the same level.

For the most part, there's not much that can be negotiated in a franchise agreement. However, there are a few things and territory is one thing that can be. You could add a few more zip codes if you'd like, but again, a franchise attorney is where to go. I have not seen the franchise fee ever be negotiated but, some of the franchises here lately have been changing the franchise fee in return for a different royalty structure. So that's a possibility.

But generally speaking, franchise fee and royalties, I have not seen as being negotiable. Occasionally, during hard times, I did see a couple of the franchises where they would not have you pay royalties for three to six months. So it comes down to the old saying, “It doesn't hurt to ask. The worst they can do is say no.” So it’s not very often that I see royalties being negotiated; that's how a franchise stays in business. And you want them to stay in business because you want them to stay on top of what's happening out there in the franchise world and in their industry and keep you abreast of it.

The ad fund is another thing—some franchises have it, some franchises don't. Make sure you're aware of it. That'll be in the franchise agreement as well as the FDDs. That may or may not be negotiable. I've seen sometimes where they will waive it for a while, but generally speaking, no.

Disclaimer:?I'm not an attorney—get an attorney's advice. These are for the franchises I work with and I work with about 300 different franchises, but here's 4,000 out there. I cannot speak for every single franchise out there. I can just speak for my experience in the franchise world over the last ten years.

Check out my book on how I have helped people just like you find the right franchise

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Enjoy your day,

Greg