20 KEY FACTORS FOR FINDING A BETTER LOCATION

Posted on June 26, 2023June 26, 2023 by Franchise Strategist

A broker specializing in retail/restaurant real estate can be a huge resource in navigating through these puzzle pieces. And the landlords usually pay their fees, making this service free of charge to the business owner.

20 Key Factors For Finding a Better Location
By David Simmonds – Founder & President, RESOLUTE RE

Finding the right location is one of the most important processes you will be engaged in for your business. Like the old adage goes: location, location, location. Many factors go into site selection for your business. In this article, I’ll discuss the factors to consider about the retail space itself.

Size of space needed

• Do you need an end cap, or are you willing to go in-line? Do you need a freestanding location and/or a drive-thru?
• Construction budget
• Anticipated sales projections Rent is always a function of sales, and most businesses want their rents to be between
6%-8% of their total costs to run the business.
• Rent/NNN budget…make sure that you are realistic about what can be achieved in the market/s that you are looking at
and how that compares to your budget
• Do you need referrals for a general contractor/architect/etc? Do you have a prototype for your layout?
• Which kind of tenants do you want to be around or stay away from?

Interior of the space:

• What size HVAC do you need?
• Do you need the space to come with equipment left behind by the previous tenant? 2nd gen restaurant space, for
example, could save a restauranteur a lot of capital. Or could you do new construction or a plain Jane retail space?
For example, if you would do a non-2nd gen restaurant space, how much would it cost to retrofit a space?
• Do you have to have natural gas?
• What size electrical service do you need?
• Do you need a grease trap or a vent-a-hood
• Does your space need to be sprinkled?

Selling yourself to landlords:

• What kind of credit will be going on the lease?
• Are you willing to personally guaranty the lease?
• Where is your source of funding coming from to do this new location?
• Your Resume: Have you worked for a competitor in the past, or do you have existing stores? If so, how long have you
been in business? If not, do you have a resume showing your operations prowess?

Use a professional broker

* Ask for and check References
* How many similar-type deals has that agent closed in the past week, 30 days, 60 days, and YTD?
* If he works in other commercial real estate verticals, such as office, industrial, land (not related to retail), farms & ranch, medical or investment sales, for example, how much time does that agent spend working in those verticals versus retail/restaurant?

I highly recommend a broker who specializes in the retail/restaurant field. That broker will have the expertise, knowledge, and relationships in the market to get you the best space for your business. It’s an exciting journey you are embarking on…you’ll never forget it!

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About The Author: DAVID SIMMONDS

David Simmonds founded RESOLUT RE in January of 2009 and has since built a massive, international, 3rd-party brokerage platform. RESOLUT RE has 6 offices across Texas (Dallas/Fort Worth, Houston, Austin/San Antonio, McAllen, Midland & El Paso), and serves the great states of Louisiana and New Mexico out of offices in Lafayette, Albuquerque and Santa Fe.

RESOLUT RE represents 68 tenants nationally/internationally. We have the ability to service our clients’ expansion needs anywhere in the United States and up to 130 countries around the globe.

RESOLUT RE markets over 800 projects and exclusively represents over 250 tenants regionally across Texas, New Mexico and Louisiana.

David is a member of the International Franchise Association (IFA) and the International Council of Shopping Centers (ICSC) and received a Bachelor of Arts degree in Economics from Columbia College/Columbia University in New York City.

When “Common Sense” isn’t so common – Franchising Regulation

Posted on May 21, 2023 by Franchise Strategist

Photo by Sora Shimazaki

When “Common Sense” isn’t so common.
Request for Information – Franchising Regulation – FTC

Original Published Date: May 19, 2023
Author: WorldWise Franchise

Anti-Franchisee lobbying organizations are “worried” and “concerned” that the overwhelming majority of comments to the Federal Trade Commission (Requests for information concerning Franchising) are by Cherished Franchisees concerning many of the issues we have been promoting on behalf of Franchisees are now bubbling to the top.

So much so that they are offering to literally write responses on behalf of those of the same “ilk” that oppose anything that might benefit Cherished Franchisees; you’d expect nothing less from a trade/lobbying organization who’s sole purpose is to oppose fundamental fairness and “Total Quality Franchising” on behalf of Franchisees. “Fair Franchising Standards” is not part of their lexicon. Expected as well when you consider that nearly 50% of the revenue for one particular organization amounts to those monies being used for salaries and benefits for those employed by it.

When inside the beltway of DC, never having to have mopped a floor, cleaned a room, drove a van in a service area, climbed a roof, scrubbed a grease trap, or owned a franchise this is great work if you can get it and the perks are plentiful. Cherished Franchisees don’t have donors ready to write checks so they can meet Friday’s payroll and monthly expenses. Its hard work.

AAHOA, The Asian American Hotel Owners Association (aahoa.com) , is Americas Largest Hotel Organization representing 60% of all hotels owned, 20,000 thousand hoteliers, and some 36,000 hotels. Founded in 1989, their “12 Points of Fair Franchising” strongly state their position as a unified and incredibly viable force to perfect and enhance the franchise model for Cherished Franchisees, its own and others.

The American Association of Franchisees and Dealers (AAFD.org) was founded in May of 1992 with its original mission to “Bring Fairness to Franchising” and it hasn’t stopped since. In fact, its “Franchisee Bill of Rights” was promulgated in 1996 and still stands today as the definitive objectives to be achieved by Cherished Franchisees. The desire, of course, is to accomplish this in conjunction and collaboration with enlightened and fair franchisors who know that happy Franchisees make for the strongest of franchise systems.

CFA, The Coalition of Franchise Associations (thecfainc.com) founded in 2007, was formed with the mission “To leverage the collective strengths of franchisee associations for the benefit of the franchisee community”. The “Universal Franchisee Bill of Rights” outlines the necessary elements of fair franchising. The “Universal Franchisee Bill of Rights” is a hybrid compilation from significant work that has been done by the AAFD, AAHOA, AFA, CFA Fair Franchising Committee, individuals from those prominent organizations, and other friends and supporters of Franchisees. It is the intent that we create a “Universal Franchisee Bill of Rights” that no one organization can claim as their own, but members of the greater franchise community can endorse.

As to the title of this article, “When “Common Sense” isn’t so common” we find the reasoning and rational of those opposed to these organizations as well as what they stand for and promote as being without plain and fairly straightforward common sense. You’ll find posted within this article the stated objectives of each of the organizations and for all intent and purpose, their combination as being a representative sample of “common sense” on behalf of Cherished Franchisees.

To deny that any of the standards and statements made belies clear common sense. Cherished Franchisees know it, franchise attorneys know it, anti-Franchisee trade and lobbying organizations know it, Legislators know it, and of course, the Federal Trade Commission knows it better than most. Thus the FTCs “Request for Information” concerning franchise regulation.

As of the date and time of this writing, there are 248 posts overwhelming in favor of franchise regulation change: (https://www.regulations.gov/docket/FTC-2023-0026/comments)

You’ll note also that many are marked “anonymous” for fear of retribution by their franchisors which unfortunately has proven itself to be true in far too many cases.

Now is YOUR TIME to add your voice, to express your opinions and to be heard by the agency that counts most at this time, The Federal Trade Commission.

We can’t stress the importance of taking advantage of this opportunity. Please submit your comments. Here is the link to submit your comments.

https://www.regulations.gov/commenton/FTC-2023-0026-0001

To look at the full Request for Information, you can see it here:

https://www.ftc.gov/system/files/ftc_gov/pdf/Franchise-RFI.pdf

Should you require any additional information, feel free to contact us directly.

Document Links:

AAFD Franchise Bill of Rights

AAHOA 12 Points of Fair Franchising

CFA – Universal Franchise Bill of Rights

Franchising Strategy: Strategic Business Plan Development

Posted on May 17, 2023May 17, 2023 by Franchise Strategist

Photo by Tima Miroshnichenko

<strong>Franchising Strategy: Strategic Business Plan Development</strong>

Franchising Strategy: Strategic Business Plan Development
By David G Komatz

As with any business, you must have a solid business plan. Do not think that you can start a franchise without a good plan. The plan is a roadmap to how you will operate, how you will reach new franchisees, how you will market your business and must have solid financials. A mistake of a single percentage point on a franchise royalty can easily cost you millions of dollars. It does not seem like a big mistake, when you have a single franchisee. It simply means that the franchisor will make $5,000 less in royalty revenues. But in franchising, we are talking about continuing growth, and this mistake might be multiplied 100 times or more. Other business decisions that a new franchisor will make that could impact long-term profitability include:

• Advertising fees

• Technology fees

• Product margins

• Type of franchise offered (individual, area development, area representative, etc.)

• Organizational structure

• Compensation structure

• Geographic growth strategy

• Territorial rights provided to franchisees

• Reservations of rights for the franchisor

• Franchise Disclosure Documents

Conflicting or ambiguous communications when a franchise is first sold can form the basis for future franchise litigation. The cost of defending any franchise lawsuit, even an inconsequential one, can be enormous. The cost of prosecuting even a “small” franchise litigation lawsuit can easily exceed $100,000 to $200,000, or more.

You must have a solid, coherent Franchise Disclosure Document. An integrated Franchise Compliance Program that stipulates rules and expectations, manages Franchise Disclosure Documents and controls the publishing of all information is extremely important. It is also one of the best investments a franchise company will ever make.

Understanding a franchise agreement

A Franchise Agreement includes all of the key facets, requirements and principles of the franchise, including the privileges and commitments of both parties, the length of time the agreement will last, the territory (if any) granted to the franchisee, and the costs involved and how they are to be calculated.

A Franchise Agreement is the foundation of your business. You must be certain that you understand it clearly before you start to build on it. The following is an outline of some of the key aspects contained in Franchise Agreements.

Every Franchise Agreement needs to be carefully read and you should therefore have your attorney review the Agreement clause by clause with you, to make certain that you understand all of its terms. Franchisees also need to be aware that, while it can be relatively simple to enter into a Franchise Agreement, it may be far more difficult to remove yourself from one. A standard Franchise Agreement is a long-term commitment to a third party (often of six to ten years in length). The Agreement will include stringent requirements which have to be complied with for the full length of the term. Failure to conform to these requirements may in many situations allow the franchisor to terminate the Agreement.

While the strict stipulations of Franchise Agreements are there to protect the interests of all parties and particularly the franchise system, from time to time Franchise Agreements can include or exclude clauses which aim to protect the franchisor.

A provision that any costs involved in defending the use of the trademark should be paid by the franchisee

Immediate rights for the franchisor to cancel without notice if the franchisee misses or delays payment of royalties

Lack of clauses regarding ongoing support, training and development of the business by the franchisor

Limitation of the franchisor’s liability to the franchisee even if the franchisor breaches their requirements to the franchisee

Widely drafted clauses undermining a franchisee’s ‘exclusive’ territory in unwarranted circumstances.

The presence of these clauses will vary between Franchise Agreements. An experienced franchise lawyer will be able to highlight them for you. Some franchisors will not be willing to make any changes to their agreements especially when there are other franchisees already in operation.

Regardless of what you may dislike about some provisions in a Franchise Agreement, it is nevertheless essential that you understand it fully and the requirements it places on you as a franchisee. Careful attention should also be paid to supplementary documents, as these may contain provisions that, if breached, constitute a breach of the Franchise Agreement.

You should also be certain that any pre-contractual statements regarding turnover or other aspects of the business that may have attracted you to the franchise are carried over into the Franchise Agreement or in some other written form.

Grant of Rights

The Grant of Rights sets out the term of the franchise and its renewal provisions. It is important to make certain that the term of the franchise is adequate to allow you to achieve a realistic return on your investment. Renewal provisions need to be looked at carefully along with any renewal fees. They may contain some or all of the following:

Notice of renewal – this is usually required within strict timeframes. If the renewal notice is not given in time, the right to do so may be lost

Payment of renewal fee

Changes to terms of the Agreement by the franchisor upon renewal

Changes to the franchise territory size by the franchisor where the particular Agreement provides exclusive rights to the franchisee

Changes, alterations and improvements to operating practices to meet competitive and other challenges

First options or first rights of refusal for additional franchises.

It is important that the franchisee understands that, more often than not, the right of renewal may in fact be a right in favor of the franchisor. The franchisor often has the ability to reject the renewal if a franchisee has not been performing to set standards.

Ongoing costs and royalties

Many Franchise Agreements include ongoing payments to the franchisor such as:

• Royalties

• Advertising levies

• Mark-ups or margins on products supplied by the franchisors

• Training fees.

There may also be requirement to attend franchise conferences and other meetings. The Agreement should clearly set out the details of what has to be paid and when, including circumstances relating to any deposits payable before securing the franchise.

For advertising and promotion costs, the Agreement should specify when the payment is to be made and to whom, including details of any special banking arrangements. Back-up assistance and assistance are essential to the operation of a successful franchise. Details of the support and training to be provided by the franchisor should be stated in the Agreement, including both initial and ongoing assistance. As well as having your attorney review the Agreement for these provisions, talk to existing franchisees about the level of support they have received.

Initial costs

The Agreement, or often an ancillary document, should set out in full all beginning costs. These may include the initial franchise fee, equipment costs, working capital requirements, fit-out costs, initial training costs and the cost of opening stock.

Premises, leases and mobiles

Lease provisions usually allow the franchisor to take over the lease at the end of the term, and also if the franchisee defaults during the term

Often the franchisor will lease the property itself and grant a sub-lease to the franchisee. You are responsible for paying the rent, so you should ensure the amount negotiated is a fair market rent

Mobile franchises usually contain terms that set out the sign writing and other d�cor required by the vehicles from which the business is operated, and possibly for any major items of equipment

One issue that is often overlooked is the need to ensure that the length of the franchise term coincides with the length of the lease term.

Requirements

Every Agreement should contain clauses setting out the initial and continuing requirements of both franchisor and franchisee

• Examples of franchisee requirements include minimum operating hours, insurance, engagement of staff, and uniform requirements.

• Examples of franchisor’s requirements include maintaining the manuals, providing products, and training

• Records of accounting must be up-to-date, with regular reporting and auditing

• Intending franchisees should pay careful attention to the requirements since breach of any may entitle the franchisor to terminate the franchise.

Intellectual property

Intellectual property is a key element of most Franchise Agreements, specifying legal ownership rights by the franchisor concerning patents, copyright, trademarks, designs and even operating systems. Other relevant laws include the Fair Trading Act and common law rules prohibiting the copying of a business’s identity.

Sale of the franchise

Most Agreements will allow the franchise to be sold during its term, but you should note that as a franchisee your rights to sell the business may be restricted.

• The franchisee may have to give the franchisor the right to buy the business first known as right of first refusal, which in itself can destabilize the value of that business and the goodwill for a selling franchisee

• If the franchisor chooses not to purchase, they may rigorously control the sale process

• The incoming franchisee must be approved by the franchisor

There may be a transfer approval fee, which the franchisee will need to pay to the franchisor when a sale takes place. This is designed to cover the franchisor’s costs involved in training the incoming franchisee.

In some Franchise Agreements, the term of an existing franchise for sales purposes covers only its unexpired remainder, unless the Agreement provides for the franchisor to offer a new Agreement for a full new term.

Termination

Franchise Agreements provide for circumstances in which the Agreement may be terminated in advance of the original ending date. These include:

• Bankruptcy, company liquidation or criminal conviction of the franchisee

• Termination of leases to the franchise premises (where premises retention is important).

Termination provisions should be considered carefully as they are often points of disagreement. There are frequent misunderstandings by franchisees as to what happens at the end of a term and procedures vary from one franchise system to another. However, it should also be kept in mind that if the franchise is operating well and the franchise relationship is a good one, it is likely that both franchisee and franchisor will want to renew the Agreement.

Disputes

Although disagreements between franchisors and franchisees are usually solved through discussion and negotiation, mediation and arbitration are also effective methods for working out disputes and less damaging to franchise relationships than legal proceedings.

Other terms

The Entire Agreement clause is especially important as it usually states that what is contained in the Agreement overrides anything which may previously have been promised unless it is expressly referred to in the Agreement

As a franchisee, you should be certain that anything on which you have relied in selecting your franchise is included in the Agreement in some way

The Definitions section, usually close to the beginning of the Franchise Agreement, contains key definitions. One of the most important is Gross Sales, the figure on which the franchisor’s royalty is usually based. Usually this covers substantially every type of transaction carried out by the business and almost every payment received. Often it will include sales made, whether or not payment has actually been received.

David G Komatz is a seasoned leader and manager and has studied franchising extensively. He is versed in the many aspects of franchising including preparing the manuals and policies used in new franchises.

Be sure to obtain his book “Franchising” available at https://www.amazon.com/author/dgkomatz.

Article Source: https://EzineArticles.com/expert/David_G_Komatz/1543625

http://EzineArticles.com/?Franchising-Strategy:-Strategic-Business-Plan-Development&id=10541277

How Business Leaders Can Prepare for a Possible Recession this Year

Posted on May 11, 2023May 11, 2023 by Franchise Strategist

JPMorgan Chase Survey “Most Businesses Expect Recession in 2023” The good news is that despite these expectations, most midsize (66%) and small business (72%) leaders remain upbeat about their own company’s performance, and are focused on growth, hiring plans and other elements within their control.

How Business Leaders Can Prepare for a Possible Recession this Year

(BPT) – By John Simmons, Head of Middle Market Banking & Specialized Industries, JPMorgan Chase Commercial Banking & Ben Walter, CEO, Chase Business Banking

No matter their size, location or industry, businesses across the country have been hit by inflation in the last year, forcing leaders to use a variety of creative strategies to combat rising costs. While these inflationary pressures show some signs of easing, business leaders’ sentiment around recession expectations raises important questions for businesses on whether they’re prepared for the next big economic challenge.

In the JPMorgan Chase 2023 Business Leaders Outlook survey, we uncovered just how widespread inflation’s impact has been for business owners nationwide and how it and other pressures have contributed to a challenging business outlook. Unsurprisingly, the vast majority of small (94%) and midsize (91%) businesses are experiencing pricing pressures that are affecting their bottom line, while the majority of small (61%) and midsize (65%) business leaders anticipate a recession some time in 2023.

The good news is that despite these expectations, most midsize (66%) and small business (72%) leaders remain upbeat about their own company’s performance, and are focused on growth, hiring plans and other elements within their control. We are encouraged by the optimism and resilience of business leaders after a tough few years, and we know that time and again their mettle has delivered the economy through lean times to propel our economy and communities forward.

As we talk with business leaders about the challenges ahead, there are three main approaches they should consider this year in their preparations for the next economic cycle:

1. Consider Non-Traditional Strategies to Combat Inflation

Small and midsize businesses have had to find ways to meet challenges brought by inflation. Traditional responses, such as raising prices on products and services, have been augmented by some non-traditional strategies. For example, nearly half of midsize businesses have made changes to their purchasing habits, including strategic stockpiling, and more than one-third have turned to automation.

Among small businesses, more than half have said honest and transparent communication with customers is a top tactic for coping with inflation. Because consumers still demonstrate a willingness to shop local, honesty and transparency can help strike the right tone to balance price increases with customer loyalty.

2. Invest in Prospective and Current Employees

The tight U.S. job market presents a challenge for small and midsize businesses; however, economic data show the worst may be behind them. More than half of small business leaders (55%) anticipate hiring full- and part-time staff and 50% of midsize business leaders expect to increase headcount in the next 12 months.

Employee retention and development — always important priorities for business owners — are emerging as even more important in the current economic environment. In fact, more than half (55%) of small business leaders cited retaining top employees as a critical factor for business survival, especially because they operate with less slack from the start.

Likewise, nearly half (43%) of midsize businesses plan to invest in talent development by offering upskilling and training opportunities that increase productivity, improve the quality of work and enhance problem-solving abilities. These programs are hugely important for small and midsize businesses looking to improve retention, limit turnover, boost morale and attract new talent.

3. Optimize Working Capital

Working capital is a key indicator of small and midsize businesses’ financial health, and maintaining it during times of economic volatility is important for long-term prospects. Despite a tough year, the majority of small (69%) and midsize (63%) businesses expect increased revenue and sales in the year ahead, making it important for them to have a corresponding capital plan.

Business leaders are optimizing working capital to finance inventory and accounts receivable through supply chain finance, which helps them move to extended payment terms with suppliers including the option to get paid earlier in their working capital cycle, and dynamic discounting, which enables owners to receive discounted prices in exchange for paying vendors early. They are also investing heavily in inventory management, reworking current debt and securing working capital financing to maintain and even grow their balance sheets.

To learn more about how JPMorgan Chase is helping business leaders build for the future, view the full Business Leaders Outlook survey results for small and midsize businesses.

GROW LEADERS WITHIN YOUR RANKS

Posted on May 4, 2023May 21, 2023 by Franchise Strategist

If you want to increase retention and expand diversity in the restaurant business in 2023 – especially in leadership, on boards and with founders of growing brands – start with education.
The restaurant industry has an information problem. Historically, most restaurant education is limited to on-the-job (OTJ) training, which presents numerous challenges.

Increase retention and expand diversity through employee education
By Lauren Fernandez

Traditional restaurant OTJ training is fraught with issues such as a lack of budget, lack of time and no quality control standardization. Accessibility is also an issue: often we see that with OTJ training there is no way to accommodate different learning styles and languages, alienating non-English-speaking employees. A lack of training stems from many problems, such as categorically high turnover rates, high levels of attrition and a general lack of leadership training that plagues our industry.

I’m a Latina and a first-generation American, and my parents saw education as a means for me and my siblings to better our lives. They worked hard to make sure we received the best education in order to create more opportunities than they had.

While I followed a traditional educational path in law and business, my OTJ training operating our restaurants was undoubtedly the most impactful. Experience in the field as an operator taught me more about the restaurant industry than my previous education could, and it closed the information gap on what it takes to be a leader in our industry. But both my educations together – in graduate schools and on-the-job – have equipped me with a unique lens, and it informs my call to action: we as restaurant leaders can leverage education to overcome barriers and as a tool for growth.

When we champion education, we mean restaurant-specific training with a focus on operational excellence, profit and loss management, leadership development and more. Investing in people and their personal and professional development contributes to a culture where people are valued, and ultimately develops stronger leaders that will make the industry a better place to work. We must proactively nurture the next generation of restaurant workers who will see the industry as a long-term career rather than a temporary job.

And this isn’t as hard of a lift as you would think. While I was an operator, I hosted quarterly management team meetings where we not only focused on results and celebrated wins, but we focused on new leanings and sharing best practices. I taught high-level strategies like profit management, but we always-connected theory back to actual practice. These meetings created a collaborative and transparent environment where managers helped each other improve, and they were instrumental in improving the performance metrics of the group as a whole.

Restaurants nationwide employ nearly 12 million workers and account for 4% of the overall GDP in the United States. As an industry, we still suffer from very high turnover and attrition. Investing in education is one key to retention and building long-term, desirable careers in our industry. To address the challenges of turnover and retention, consider some of these additional ideas:

*Innovative incentive and rewards programs like matching payments on student loans. More than 43 million people in the U.S. owe money toward student loans, and the average federal student loan debt balance is nearly $38,000. Offering a program to help reduce that debt can be a huge incentive to draw good employees and keep them. In fact, one study noted that 86% of people between the ages of 22 and 33 would commit to an employer for five years if offered a student loan repayment program. And, through 2025, employers can offer up to $5,250 in student loan repayment benefits without paying any tax thanks to the Consolidated Appropriations Act, which was signed into law in 2020 as part of pandemic relief efforts.

*Volunteer days for a food-related cause like a community food bank. Many studies have shown that offering some sort of volunteer program can boost productivity, increase employee engagement and improve hiring and retention rates. Ask your employees to select a cause, or find something that ties into what your restaurant offers – not only are you giving back to your larger community, you’re also showing your employees that you are doing something worthwhile outside your restaurant’s four walls.

*Encouraging participation. Support your employees to seek out opportunities to learn and engage in the industry. It can also encourage them to grow and thrive in their potential hospitality career. That can be through culinary schools and events, volunteer board opportunities or speaking on panels and at conferences.

*Sponsoring conference membership and attendance. Encourage employees to attend conferences or pay for memberships to restaurant- or culinary-related organizations. This will help create networking opportunities for them, and they will bring back information that could help your business grow, too.

*Teambuilding retreats/exercises. Consider building a program that promotes your company’s mission, vision and goals while also creating an atmosphere for support and encouragement.
With education as the cornerstone of your efforts to retain good employees, expect it to play an even larger role in the future as labor challenges continue. To that end, Full Course launched a new 501(c)(3) nonprofit foundation, Full Course Learning Center, to ensure education and support are accessible to all in our industry, from back of house to operators. You can find educational tools and resources, including more ideas about employee retention, at fullcourse.com/education.

When it comes to employee retention, new ideas and approaches will continue to evolve. By implementing some thoughtful ways to address these challenges, you can make sure that not only will you find good employees, but that they stay and grow with you and your business, too.

Lauren Fernandez is the Founder and CEO of Full Course (www.fullcourse.com ), a non-traditional restaurant investment group created for operators by operators that is changing the way new businesses grow their brands. The company partners with restaurants in the early stages of development to optimize existing operations develop strategies for sustainable growth and bring the right investors or franchise partners to the table. Fernandez is a restaurant industry veteran with two decades of experience. She previously served as general counsel and head of franchise administration for FOCUS Brands, a multi-brand restaurant company with more than 4,000 restaurants (including Carvel, Cinnabon and Moe’s Southwest Grill) in over 15 countries, and was co-founder, president and operating partner for multi-unit franchise developer Origin Development Group, acting as a strategic growth partner for brands such as Chicken Salad Chick. She also is a frequent speaker in the areas of organic business growth, licensing and franchise operations across the country.

HOW TO SOLVE THE BIGGEST CHALLENGES OF A HYBRID WORKFORCE

Posted on April 23, 2023July 8, 2023 by Franchise Strategist

According to Forrester, 70% of U.S. and European companies will pivot to a hybrid work model post-pandemic. What’s more, 75% of CEOs expect their office spaces to shrink, so the space that is retained must be intentionally created with hybrid in mind.

How to solve the biggest challenges of a hybrid workforce

Contributed by BrandPoint

(BPT) – Since the onset of the global pandemic there has been a paradigm shift that work is what you do, not where you do it. As workers increasingly return to traditional offices, the need to transform the space into more dynamic and collaborative business centers grows.

“The problem is that while many American employers have embraced this model for their employees, they have not fully implemented collaborative strategies and the necessary technologies that help workers remain productive, creative and inspired in and out of the office setting,” said Shannon MacKay, general manager of WW Smart Collaboration Business Group, Lenovo.

Adopting the right technologies so employees can seamlessly work in the office, at home or elsewhere is key to the success of hybrid work. When done correctly, it can set an organization up for success: According to a recent Lenovo study, a majority (77%) of employees and IT decision-makers believe that productivity and collaboration tools have made or will make their business more efficient in the long run.

When done poorly it can diminish productivity, culture and ultimately, the workforce: According to the Adobe State of Work Report, 32% of workers (nearly a third) have said goodbye to an employer whose tech was a barrier to their ability to do good work — up from 22% pre-COVID.

Hybrid work will require new ways of collaborating to ensure an inclusive environment that attracts and retains top talent. This is particularly important considering in-person meetings will drop from 60% of total enterprise meetings to just 25% by 2024, according to Gartner’s 2021 Digital Worker Experience Survey.

Unfortunately, the Lenovo study shows large enterprises report an average of three unified communication/collaboration applications in use at their companies. This makes collaboration complex and a daily pain point for workers. Not only does this restrict communication, so many of the important interactions between people that build company culture and teams are lost.

“Hearing the live reactions, or impromptu exchanges going on at the end of the table is the difference between feeling like an equal citizen at a hybrid meeting and feeling like a second class one. What about if those microphones can auto-adjust to the positioning of the participants in the room and upweight the sound of those on the right of the room in the right-hand speaker to make it as realistic as possible for those at home too?” said MacKay.

Purpose-built technology like Lenovo’s new ThinkSmart One, the world’s first Windows-based completely integrated collaboration bar, anticipates the continued growth of hybrid meeting spaces as businesses strive to find innovative ways to work together in a distributed workforce. Designed to easily equip small meeting rooms, the bar offers an exceptional audio-visual through eight microphone arrays with echo and noise cancellation, 15-Watt stereo speakers and an integrated high-resolution camera with wide field of view.

There is no one-size-fits-all solution when adjusting to hybrid work. It is critical for IT leaders to reassess their technologies and best practices to ensure all participants have an equal opportunity to collaborate, share ideas and influence decisions. Companies focused on a successful ‘return to work’ plan must implement customizable technologies to make sure their office setup matches their employees’ needs.

ELECTRIC VEHICLES HELP THIS SARPINO’S USA FRANCHISEE GROW HIS BUSINESS

Posted on April 22, 2023July 3, 2023 by Franchise Strategist

ELECTRIC VEHICLES HELP THIS SARPINO’S USA FRANCHISEE GROW HIS BUSINESS
Used with permission from Sarpino’s USA

Electric vehicles are helping Sarpino’s USA Franchisee Girmantas Urbonas attract new employees and customers while reducing costs. Based in the Chicago suburb of Downers Grove, Urbonas has prioritized sustainability in his local community by completing deliveries with electric vehicles. While he believes the choice is a worthwhile environmental investment that will create long-term savings and economic efficiencies, there has been an added benefit of going electric.

Recruitment Tool
The vehicles have ended up selling themselves because they are attracting delivery drivers to his business. This is a crucial recruitment tool in today’s competitive labor market.

“I have not had a problem finding delivery drivers. Maybe partly because we pay better than other places. We are also busier than most of our competitors. But the cars also work as an incredible tool for advertising,” said Urbonas.

Electric Vehicles Require Limited Maintenance
Even with hybrid cars, you need to change the oil often, maintain the belts and the engine. “With electric, we replace the batteries every two years, but that’s it. There’s very little upkeep. Plus, with gas cars, there were always complaints among employees. Who was going to put gas in the car? We charge overnight and that’s enough power to last the whole day,” adds Urbonas.

Environmental Impact
“We often post about how many tons of CO2 savings we achieve in one month because of our electric vehicles and their efficiencies,” said Urbonas. “And, because we deliver a lot in the late-night hours, it’s a bonus that these cars are so quiet.”

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HOW TO SELECT THE OPTIMAL VALUATION TECHNIQUE FOR YOUR STARTUP

Posted on April 19, 2023July 8, 2023 by Franchise Strategist

Revenue multiples are helpful for both private companies (which lack stock prices) and public companies (for which stock prices are readily available). They’re also beneficial for businesses with low sales because they’re less affected by fluctuations in gross margins and other financial metrics that may fluctuate based on industry trends or economic conditions during the analyzed period.

How To Select The Optimal Valuation Technique For Your Startup
By FMM Contributor, Johnny Dey

Introduction

It is simple to focus on the day-to-day operations of your business when launching a business. You should not spend too much time contemplating the value of your business or the amount you could receive if you sold it. However, valuing your venture is crucial to operating a successful business, as it helps you determine how much capital you need to raise to develop and sustain your business. When it’s time for an investor or potential acquirer to make an offer on your company, valuation is an essential part of the negotiation for the selling price.

The Market Strategy

The market approach is founded on the value of comparable businesses. Therefore, this method is optimal for entrepreneurs with a proven business model or who have already raised capital.

The market approach can be utilized to determine the value of either a startup or an established business. For example, an early-stage company has yet to achieve profitability. As a result, it may not have any revenue. In contrast, a mature company has already achieved profitability. As a result, it generates sufficient cash flow to pay its obligations and reinvest in itself without raising additional capital from investors.

Revenue Multiple

Revenue multiples are a straightforward strategy for valuing a business. The multiple revenue formulae divide a company’s annual revenue by its market capitalization, which is its stock price multiplied by its outstanding shares. For instance, if your company has $1 million in revenue and a comparable company has a market capitalization of $10 million, then your company would be valued at ten times revenue, or $10 million.

EBITDA Multiple

Multiples of EBITDA are based on a company’s earnings before interest, taxes, depreciation, and amortization. EBITDA is an excellent indicator of profitability because it is less affected by accounting decisions than net income.

The calculation for this multiple is as follows:
Earnings Before Interest Taxes Depreciation And Amortization (EBITDA) Multiple = (Earnings Before Interest Taxes Depreciation And Amortization) / Enterprise Value

Comparable Organizations Technique

The analogous companies method is the most prevalent method of valuation. It’s founded on the presumption that your venture is a “normal” business, so you can use other comparable companies to determine its value.

This method is very time consuming, as you must identify analogous companies and compare them to yours. In addition, this method needs to account for the risk and ambiguity related to your startup’s business model and product/service offering.

Pricing Strategy

The cost approach is a method of business valuation that compares your company to others in the same industry to determine its worth. This strategy depends on tangible and ethereal assets, such as technology, team, and brand, in addition to the customer base.

Identifying competitors with similar products or services publicly traded on Nasdaq or NYSE MKT is the first step in this process (formerly known as OTC Markets Group). Once you’ve identified analogous companies, you can compare their sales figures to determine whether yours are developing at the same rate or quicker. If they’re growing faster than you, this may indicate that there’s room for expansion in your own business; however, if they’re growing more slowly than you, investors may be able to demand better terms from them when negotiating funding rounds in the future, as they’ll know how much potential value lies within each share of stock sold today compared to tomorrow’s market price once news spreads about how well Q1 earnings season went!

Benefits Of An Asset-Based Strategy

The benefit of an asset-based approach to valuation is that it measures a company’s intrinsic value. This is because it emphasizes assets rather than liabilities. Subtract your liabilities from your assets, then divide the difference by one minus your tax rate to calculate this method (1 – T).

The disadvantage of this method is that it does not account for intangible assets such as goodwill or intellectual property rights; however, these can be factored into any potential sale price through negotiation with potential buyers or sellers during due diligence processes before finalizing the transaction.

The optimal method for valuing your venture depends on the specifics of the situation and its characteristics.

The market approach is the most straightforward and intuitive method for valuing a startup. It is based on the value of comparable companies in the same industry, so it can be used for early-stage companies that do not yet have a significant amount of revenue or earnings (if any). The disadvantage of this method is that it is challenging to locate comparable companies; you will need access to an extensive database of private company financials if you wish to employ this strategy.

Conclusion

The optimal method for valuing your venture depends on the specifics of the situation and its characteristics. If you have significant market potential and wish to transfer your company immediately, you should adopt a market-based strategy. The revenue multiple and EBITDA multiple are useful for valuing established firms. In contrast, the comparable companies method helps value smaller businesses with less complex operations. The cost approach can be used when estimating value based on assets or liabilities alone. In contrast, the asset-based approach is beneficial when evaluating a company’s goodwill value.

TIPS ON COMMUNICATING SUCCESSFULLY WITH YOUR EMPLOYEES

Posted on April 12, 2023May 4, 2023 by Franchise Strategist

Tips on Communicating Successfully With Your Employees

Introduction

When you are in charge of anything, communication is a crucial aspect of the task, but its relevance increases if you are in a leadership role regarding employees. The method in which you interact with your employees may have a substantial impact on how they feel about their jobs and the quality of work they do. You want them to feel heard and appreciated. You also want them to feel free to make mistakes without fear of censure or punishment. However, accountability for their actions should not be overshadowed by communicating in such a way that they are not aware of a mistake. It’s how you use the mistake to improve that count. This is why it is crucial to know how to communicate most effectively with them: you want them to feel heard and appreciated, but you also want them to feel comfortable speaking freely without fear of making a mistake.

Set The Tone

Set the tone by being a good example for people to follow. As your employees will mirror your behavior and emulate how you deal with them if you set a good example, it is crucial that you courteously communicate with them.

Preserve coherence to establish a tone. Ensure that every team member is aware of the expected behaviors while communicating with one another, whether through email or in-person meetings; then adhere to these standards in all of your communications. The use of proper words is critical to maintaining clear and professional communication, particularly in a workplace environment.

When dealing with employee disputes, you should set the tone by being kind and impartial (and even between managers). When there is a dispute between two individuals or teams at work, you shouldn’t let it develop into a full-scale conflict; instead, you should attempt to resolve the issue amicably before involving higher-ups if necessary. If you allow the situation to grow into a full-scale battle, you will only make matters worse.

Communicate In Person

Unquestionably, emailing your workers is an excellent way to stay in contact with them. Face-to-face engagement, on the other hand, cannot be compared to any other kind of communication in terms of delivering crucial information and managing workers’ emotions. When you are face-to-face with your employees, you can read their body language and assess how they respond to your words, and vice versa. You can also convey the tone of voice and facial expressions, which is far more complicated (or impossible), through email.

Due to recent improvements in videoconferencing technology, it is now possible for individuals on opposite sides of the globe who have yet to meet to want or need something from each other (such as comments on performance appraisals) to connect.

Ask Questions, Not Statements.

Ask open-ended inquiries. This can help you better comprehend the employee’s perspective and encourage them to respond more thoughtfully.
People sometimes do not like it when you answer a question with a question, but do it anyway. It conveys an interest in what the other person is attempting to communicate and your desire to truly understand them.

Whenever feasible, you should avoid asking yes/no questions and making “if/then” statements since these queries tend to be too binary for most situations. Instead, you should ask yourself: what else could this person possibly be thinking? What would be different from their vantage point? And what reaction would I get if I told them this?

People Should Be Allowed To Speak Openly

While communicating with your workers, you must allow them to express themselves freely. As a leader, it is crucial that you listen to what people have to say without interrupting or casting judgment on what they say. It is preferable to ask questions when something does not make sense rather than make assumptions or speculations.

It would be best to allow them space to express themselves without feeling compelled by your emotions interfering with the dialogue. For example, when a team member makes a mistake, you may feel angry or frustrated. Nevertheless, it would be best to refrain from responding emotionally since doing so will only exacerbate the problem and distract your teammates from what matters most: how effectively they execute their job.

Practice being an attentive listener (and observer)

The single most important thing you can do as a leader is to listen to the input supplied by your workers. You may decide not to execute on the suggestion, but at least it should be heard and considered

Listen to what they have to say and observe their behavior, not just in the workplace but also in other contexts. This entails studying closely how folks interact in person and through technological means such as email and text messages. You may find that some of your best ideas come from observing patterns of behavior that have not been explicitly brought up but are nonetheless significant (for instance, an employee may always respond to questions about a project with “I’m on it!”; this could indicate that she needs additional direction). Conversely, you may also discover that some of your finest ideas result from recognizing patterns of conduct that have not been expressly mentioned but are nevertheless significant.

Don’t Allow Job Titles To Distract You.

Keep job titles and responsibilities from distracting you throughout the recruitment process. Instead, please focus on the person, their achievements, and degree of competence. Focus on what they can do for your company and how they can help you achieve your goals.

It is easy to fall into the trap of focusing on resumes instead of people when filling a job quickly; this is particularly crucial for recruiting managers with limited resources and time restrictions. This is particularly critical when recruiting managers have limited money and time. Yet suppose everyone concentrates on credentials instead of personalities and character qualities. In that case, it becomes hard for candidates with tremendous potential but insufficient experience to distinguish themselves from others with more relevant expertise but less overall potential. This is because qualifications are objective, but personality characteristics and character traits are subjective (for example: if one person has worked as an assistant manager while another has worked as an entry-level employee).

Clear Communication Is King

One of the essential components of being a great leader is the ability to communicate with others, yet this can be challenging. Please remember that communication is a two-way street; if you want to get the most out of it with your employees, you must be open and honest.

Listening to what they are saying is crucial, so try asking questions such as “What do you think?” or “Can you give me some examples?” Listening more than speaking makes individuals feel more comfortable opening up about sensitive topics. Again, it is essential that you pay close attention to what they are saying. Consider asking, “What do you think?” or “Can you provide some examples?”

Not only does having clear expectations facilitate communication, but it also guarantees that everyone is on the same page regarding how they feel about any given issue or event. For instance, if you tell another individual which tasks must be completed by then, there will be a clear understanding when those dates come up again!

Conclusion

It is important to remember that communication is a two-way process. You cannot just lecture your employees; you must listen to what they say, observe their actions, and ask them questions. Doing this well helps employees feel acknowledged and allows them to provide feedback on what they think needs to be addressed at their workplace.

6 WAYS TO FINANCE A START-UP SMALL BUSINESS

Posted on April 5, 2023July 8, 2023 by Franchise Strategist

They expect to be paid back with interest and generally require collateral (such as property) in case your business defaults on the loan. If you can find someone willing to do this type of lending, and if all else fails, then this may be worth considering. However, small business owners need to exhaust other options first before seeking out private loans as they tend not only to be expensive but difficult for borrowers because they lack flexibility compared with other forms of financing, such as SBA loans which offer more favorable terms including lower rates and more extended repayment periods.

6 WAYS TO FINANCE A START-UP SMALL BUSINESS

Introduction
There are many ways to get funding for your small business or franchise. Here are jut a few suggestions to get you started.

Friends And Family
Friends and family are usually the first ones to help you when needed. If they’re willing to provide financing, ensure they understand what they’re getting into: don’t ask them for a gift; instead, offer them an investment opportunity. Then, ask them for a loan and use promissory notes (a written promise from one person to another) or other legal documents to prove your commitment. The important thing is that you have a good relationship with the people lending you money–and vice versa! Make sure that everyone knows precisely how much money is being lent and when it should be paid back by; this way, there can be no confusion about whether or not payments have been made on time or if interest rates apply in certain situations (like if someone takes out an additional loan).

Your Credit Cards
You can use your credit cards to finance a business if you pay off the balance every month. However, there are two reasons why this isn’t a good idea:

• Credit card interest rates are high. Putting $1,000 on a credit card with an 18% APR will cost $180 in interest over one year–even if you don’t charge any! If you have no other financing options and need $10,000 to start your business, this method would cost $20 per month (assuming a 20% interest rate).
• The second reason is that it’s easy to get carried away when using credit cards for personal expenses and then forget about them as soon as they’re paid off, leaving plenty of room for overspending in future months when unexpected expenses pop up.

Venture Capital (VC)
Venture capital (VC) is a riskier and longer-term investment. It’s only for some businesses or investors, but it can be the right choice if your company has a high growth potential and you have an experienced team behind it. VC investors look to partner with entrepreneurs who are passionate about what they do and dedicated to building their companies into market leaders over time. They expect that the companies they invest in will take more than one round of funding before reaching profitability–and sometimes even after becoming profitable! As a result, VCs typically provide capital infusions in increments instead of larger sums all at once. This allows them to monitor how well each growth stage is going before deciding whether or not additional funds should be provided (and how much).

Private Equity
Private equity is a form of financing where an investor buys a portion of your business. It’s similar to taking out a loan from the bank, except instead of paying it back over time, you pay your private equity investor every year with interest (the same way you would with any other type of loan). Private equity can be used to buy any company or franchise–including yours! If someone wants to invest in your franchise, they might want 50% or even 75% ownership to have complete control over all decisions made within the company.

Small Business Loans
A small business loan is another way to get funding for your startup. The interest rate on these loans is lower than personal loans, but you may need to put up collateral and provide financial statements and tax returns. You can get a small business loan from your bank, credit union, or online lender. Companies such as Guidant Financial and FranFund are reliable sources for assistance with small business loans under various SBA programs

Private Lenders
Private lenders are a good option if you’re looking for funding but want to avoid applying for a bank loan or grant. Private lenders are individuals or companies that lend money to businesses. They expect to be paid back with interest and generally require collateral (such as property) in case your business defaults on the loan. If you can find someone willing to do this type of lending, and if all else fails, then this may be worth considering. However, small business owners need to exhaust other options first before seeking out private loans as they tend not only to be expensive but difficult for borrowers because they lack flexibility compared with other forms of financing, such as SBA loans which offer more favorable terms including lower rates and more extended repayment periods.

Conclusion
There are many ways to get funding for your small business or franchise. The best method depends on what you seek, but all have benefits and drawbacks. It’s essential to consider which option is right for you and your business before making any decisions. We hope this article has provided helpful information on how to fund your small business or franchise. However, if you still need clarification, we recommend contacting Franchise Growth Solutions www.frangrow.com or a financial advisor who can help you make the right decision.