|Small Business Information|
Franchise Buyers Lying On Forms
The Federal Trade Commission which governs the franchise industry thru the franchise rule, which enforces Franchise Disclosure laws seems to think that consumers need to be protected even when they lie. Often The FTC takes complaints from consumers who claim they had been ripped off or lied to from someone selling a Biz-OP or some corporation, which sells franchises. The Federal Trade Commission will not admit that at least two-thirds of the incoming complaints are made in falsehood by consumers; as a participant in the industry I can safely say that much misrepresentation comes from the buyers side and not from the sellers.
I would like to discuss the fact that many franchise buyers who have 2.2 kids, credit card and short term debt in excess of 150% of annual earnings, college degree, BMW, Mini-Van, will claim on application forms that they have excellent credit and cash in the bank in excess of the amount needed to start the franchise. Over 70% of the applicants who claim this cannot even get an additional credit card or buy a car without 0/0 financing option currently available. Yet they often say they have "X" amount of cash available when really they have nothing and many are about to lose their jobs, through downsizing, right sizing or their current employer filing for bankruptcy. You know the companies I am talking about.
Without placing judgment on the falsehoods and giving these consumers the benefit of the doubt (which they showed to not be worthy of), maybe they just do not realize that if they lose their jobs they will be out of money and pushing a Home Depot shopping cart with their remaining worldly possessions within 2.4 - 2.6 months. Many may not realize that the credit rating required for a small business of their own, franchise or otherwise, is higher than that required when buying a car with no money down. They equate their recent purchase of a car with zero down or a home with 2.5% down as having excellent credit. Even the SBA lendors will require 15% minimum and usually 25% and banks are a little sketchy right now on any new business. True franchises less than other businesses, but they are a little tough right now. Jeez, you would think it was their money, they are mere bankers. The bankers run potential franchise buyers around, they give franchise buyers answers like "The board will be meeting next week" or "Can you give us more collateral." Why? They already have 20% of it guaranteed by the government in the case of an SBA Loan and the entire business is on the hook including all assets of the newly formed company.
Many inquiring franchise buyers often state on an application form when asked how they will pay for this business; "with a small business loan." I cannot offer a franchise to someone with no money. That is a sure failure being undercapitalized in any business, franchise or independent. Therefore I do not offer the franchise because they do not meet our criteria. If they secure financing and can prove it then they qualify and then we can offer them a franchise. By giving them a UFOC we are in essence offering them a franchise. Our franchises are only available to people who are reality based and tell the truth. We cannot allow someone in our system who constantly exaggerates, lies or inflates his or her current net worth, borrowing ability, earnings or assets. Just like you cannot hire someone who lies on their resume, makes up degrees earned in college or accomplishments at the FTC, or do you? Remember in franchising, we are stuck with the franchisee for the remainder of the contract once signed and most franchises have automatic renewals for up to 20 years. If we get a bad apple in our system it hurts all the other franchisees and our brand name which in turn hurts all the previous buyers (consumers) into the system in sales, ROI, and amount they make if they transfer their franchise to a new buyer. We must protect those current franchisees who have been forthright and are team players as much as the rights of new buyers. The public (consumer) is not the innocent dupe that the FTC makes them out to be.
"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
FTC Franchise Rule if Enacted will Trigger Hardship for Private Sector
The FTC Franchise Rule maybe changed, as the Federal trade Commission has put out a report to the franchising industry as to upgrade the rule. If enacted will it will trigger hardship for private sector and cost many trees their lives; Paperwork. If this rule is passed; tree MUST die because everyone will have to their already 200 plus page franchise disclosure documents.
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Pressure Washing Market Niche
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FTC Adding to the Franchise Rule
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Tracking Revenue For MORE Profits
The revenue history is a vital piece of your power page and you need to record that information. Keeping track of client revenues should not be done in a paper format, it should be recorded electronically. It is too easy to make mistakes when calculating by hand, the results of the data entry can then be recorded into your power page. You need to date these numbers as they can change quite rapidly and you will want to know if there is a growth pattern. You will also be aware of diminishing returns and flat areas. Familiarize yourself with how they report earnings because each company has their own unique way of presenting the information to the public or its employees. You are probably asking yourself why you would bother tracking financial earnings of a company you are doing business with, or even one that is not yet a client. Believe it or not, financial information gives hints as to the success of the sales force, the marketing efforts, and the leadership of the executives. The financials can paint a picture that says more than what you are being told. If you still do not believe me, read through the next example.
Excuses Franchisees Make; When They Violate Exclusive Territory Agreements
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Sample; Territory Reduction Policy for a Franchise Company
I propose this thought on the subject of Franchisee territory reduction based on performance for a Mobile Business Model. Please read the sample policy below as it explains the reasoning and methodologies considered to extend brand without risking underdeveloped territory. We will use a Mobile Car Wash Franchise Business for this discussion. This sample is speaking from the Operation Manual of the franchisor to the franchised unit:
Starting a Virtual Assistant Business
If you're organized, smart, capable and willing to work with deadlines, you could start a virtual assistance business and cash in on your skills without having to commit to an employer (you'd be your own boss instead) or the "cube life". A VA (virtual assistant) is basically like an administrative assistant (or whatever duties need to be filled, such as writing, link building etc) that serves in a virtual capacity. What this means is that they are independent contractors, and not employees of individual companies.
Small Business Checks ? Money Saving Options
When you go into business for yourself, there are many things to consider. What you don't want to worry about is spending too much money on unnecessary items. Business checks are one of those things. They don't have to be expensive. Your bottom line keeps your business going, and it is important to keep it that way.
Where To Get Money For a Franchise Idea
How often have you thumbed through a business opportunity magazine, noticed a franchise opportunity advertisement, and felt you'd really like to get in on that...if only you had the money? If you're like most who are seeking greater opportunity and wealth, this probably happens with you more often than you care to admit, except perhaps in strictly private conversations.
Preparing to Launch Your Small Business
Small business owners often enter their field with great expectations. Unfortunately, reality strikes shortly afterwards. Here's how you can enter the entrepreneurial battle ground with confidence...
How to Integrate Yourself in Someone Elses Business
When do you need to get more involved with the day to day activities of your business partner?
Alliances: What works, what does not
Why Alliances Fail
How to Profile a Client
At first glance, this topic may seem a little repetitive, but you will find that although you have done homework before getting a contract and already know a fair amount about your client, you, however, do not know everything that is pertinent to the job. Once you have the project underway you will be adding to your knowledge of the client. In other words, you will be getting to know them more intimately than before. The information you had at the beginning is what the organization allowed you and the public in general to know. Now you are in a position to increase that knowledge and add to the client profile. This information will take time to accumulate as not all will present itself right at the beginning of the project. It is through your performance that it will surface.
Franchisor; Ongoing Support and Ideas
Ongoing support for a franchise system is omnipotent. A major part of any family relationship is communication. A large franchise system is similar to a giant family; it needs constant communication. By providing on going support for your franchisees, we will guarantee both success and open communication lines will strengthen you company and team in the market place. Some things, which many franchisors do not do or do not do enough are little things which are really low cost and simple. For instance sending out sales tapes.
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