Tag: franchise business

NAVIGATING SITE SELECTION: A DATING ANALOGY

Posted on by Franchise Strategist

Photo by vjapratama

The process of site selection bears striking similarities to the dating experience. By understanding the different stages, emphasizing clear communication, seeking legal counsel, and documenting agreements, you can navigate the site selection process more effectively and increase the chances of a successful, long-term location that maximizes your unit volume.

Navigating Site Selection: A Dating Analogy
By David Simmonds – Founder & President of RESOLUT RE & Contributing Writer for Franchise Money Maker

Finding the perfect location for your business is a lot like dating. You start by exploring your options, then progress through various stages of interaction before committing to a long-term relationship. In this article, we’ll highlight key phases of this process and emphasize the importance of clear communication and legal protection.

Exploring Options:
Just as in dating, the site selection process begins with exploration. You survey the market, research potential locations, and get a feel for what’s out there. This phase is crucial for gathering information and identifying viable prospects.

Casual Meetups (Showings):
Once you’ve narrowed down your options, it’s time for the casual meetups—the showings. Similar to going on dates, these meetings give you the opportunity to physically experience the space, envision your business there and assess its suitability.

Sizing-Up Phase (Letter of Intent):
After finding a promising location, you enter the sizing-up phase, which is comparable to the letter of intent (LOI) stage. Here, both parties—the owner and the tenant/buyer—begin to outline the terms and conditions of their potential relationship. Deal breakers and negotiable aspects are identified, setting the foundation for future discussions.

The Importance of a Non-Legally Binding LOI:
It’s crucial to remember that the LOI process should be non-legally binding. Much like a pre-dating phase, it serves as a basic agreement on key economic terms. The LOI should explicitly state its non-binding nature, allowing both parties to proceed to the lease phase without undue legal obligations.

Focus on the Big Picture during the LOI Process:
During the LOI process, it’s important to maintain a focus on the big picture and not get bogged down in the minutiae. The LOI serves as an outline of the agreed-upon economics, while specific legal and contractual details can be addressed by your attorney. This approach ensures smoother negotiations and allows for a more efficient transition into the lease phase.

Documenting Agreements:
Always ensure that both parties sign the LOI. While non-binding, the signatures serve as a record of the agreed-upon terms before entering the lease phase. Memories can be unreliable, and having a documented understanding helps prevent misunderstandings and misinterpretations.

The Legally Binding Lease (Marriage):
The lease agreement is the legally binding contract that solidifies the relationship, comparable to a marriage. While the main terms from the LOI should be reflected in the lease, it’s essential to engage an attorney to safeguard your interests, similar to a prenuptial agreement. Legal counsel can ensure that your rights are protected and mitigate potential disputes in the future.

Navigating Challenges and Resolving Issues:
Just like any relationship, issues may arise during the course of the lease. If disputes occur and communication breaks down, both parties will refer to the lease to justify their positions. This underscores the significance of a well-drafted lease agreement and the need for effective resolution strategies.

Conclusion:
The process of site selection bears striking similarities to the dating experience. By understanding the different stages, emphasizing clear communication, seeking legal counsel, and documenting agreements, you can navigate the site selection process more effectively and increase the chances of a successful, long-term location that maximizes your unit volume. And working with a qualified real estate broker increases that likelihood even more. Remember, just like in dating, finding the right match is an exciting journey that requires careful consideration and proactive decision-making.
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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.

GROW LEADERS WITHIN YOUR RANKS

Posted on 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

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.

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 SELECT THE OPTIMAL VALUATION TECHNIQUE FOR YOUR STARTUP

Posted on 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.

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.

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 by Franchise Strategist

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.

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.

Does Your Franchise Program Contain the Elements of a Top Franchise?

Posted on by Franchise Strategist

Here are 10 elements that you will find in the top performing franchise programs. If you are a franchisor and want to enhance your franchise performance, make sure these are a part of your franchise operation.

Does Your Franchise Program Contain the Elements of a Top- Franchise?

By Ed TeixeiraFranchise Expert, Author, Franchise Executive and Former Franchisee with 40 years of Franchise Industry Experience.

Ever wonder what sets the top franchise brands apart from the rest? There is a big difference between the indicators of a good franchise program and how the franchisor got to that stage. Whether a franchise system has 10, 100 or 1,000 units there are certain practices that separate the top franchise brands from the rest.
Here are 10 elements that you will find in the top performing franchise programs. If you are a franchisor and want to enhance your franchise performance, make sure these are a part of your franchise operation.
 
1. Stick to your franchisee profile
Have a franchisee profile and when franchise candidates do not fit the profile, say no! If using brokers, then remain in control of the franchise sales process.

2. Be candid with prospective franchisees
Provide prospective franchisees the tools they need to be a successful franchisee.

3. Have an effective training program, evaluate it, and continue training
Top performing franchisors have an effective training program that continues as an on-going activity.

4. If the franchise program needs adjusting, then do it
If certain marketing programs, products or services are not delivering the results then make changes.

5. Franchisee profitability must be a priority
The structure of the franchise program both operationally and financially must provide franchisees an opportunity for success that does not require extraordinary performance. If the franchisees follow the program and do not earn an ROI commensurate with their original investment, then the franchise is flawed. There must be balance between the earnings of the franchisor and its franchisees.
 
6. Franchisor leadership must be fully engaged in the franchise operation
Franchisor executive leadership must be totally involved in the franchise so that there is total awareness of successes and failures. There is no room for “surprises” when it comes to franchise operations. Whatever the forum, franchisee feedback must flow to franchisor leadership.

7. Solicit Franchisee input for important operational and marketing decisions
Whether through a Franchise Advisory Council, advertising committee or other representative body use them as a sounding board before making major operational decisions.

8. New products and services should be evaluated and measured by select franchisees before introducing
Obtain objective results from these franchisees, which will enable you to obtain a franchisee system buy-in when implemented.

9. Measure franchisee results on a regular basis
Use key performance indicators (K.P.I.s) to measure franchisee performance on a scheduled basis, whether monthly or quarterly. This enables a franchisor to know how its franchisees are performing.

10. Protect the integrity and standards of the franchise program
It is critical that the franchisor uphold the standards of the franchise. The franchisees that follow the program deserve it and the customers that use the product or services provided by the franchisees are entitled to consistency. Franchisors that do not protect their brand are not respected by their franchisees.
When franchisors have these elements in their franchise program, they can feel confident their franchise brand will be a top performer.

About the Author:
Ed Teixeira Franchise Expert, Author, Franchise Executive and Former Franchisee with 40 years of Franchise Industry Experience.Ed is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].

Franchises Need To Protect Themselves From Increased Sexual Harassment And Cyber Security Claims

Posted on by Contributing Writer

Photo by unsplash-logofreestocks.org

Our friend and franchise expert Ed Teixeira interviews Peter R. Taffae, MLIS, CFE and Managing Director Executive Perils, Inc. on the topic of Cyber Security Claims and Sexual Harassment claim that all employers need to protect themselves against.This important topic has faded from the mainstream ews media but remains a real problem that employers need to focus on…

Franchises Need To Protect Themselves From Increased Sexual Harassment And Cyber Security Claims

By Ed Teixeira – Chief Operating Officer of Franchise Grade

After hitting a two-decade low in 2017, sexual harassment complaints to the Equal Employment Opportunity Commission increased by more than 12 percent from last year. The federal agency has also been aggressive with litigation this year, filing 41 sexual harassment lawsuits so far, up from 33 in 2017. At the same time, cyber-crimes which involve the theft of personal information has cost some companies millions of dollars in damages to its reputation and from monetary claims.

Employer Liability Claims Increase

Over the course of this year, stories of sexual harassment have dominated the headlines. In what USA Today dubbed the “Weinstein Effect,” various sized companies have witnessed employees take part in the #Me To movement. This increased focus on sexual harassment has created a surge in protests, discrimination lawsuits, and government investigations, with almost no industry being immune, including a recent demonstration against McDonald’s franchise locations. Regardless of whether a sexual harassment allegation has merit, these claims can cause a company significant damage to its brand and sales. Seven in 10 human resource professionals said they believe sexual harassment complaints at their workplaces will likely be “higher” or “much higher” in 2018 compared to previous years.

A poll by the Human Resource Certification Institute found that “63 percent of HR professionals said that acts of sexual harassment “occasionally” or “sometimes” occur in their workplaces and 30 percent said that such acts “frequently” occur. Only seven percent said that such acts “almost never” or “never” occur.” The trend toward more sexual harassment lawsuits appears to continue as the EEOC increases efforts to crack down on sexual harassment. The EEOC has launched online access for employees to file harassment charges from their homes, with the EEOC.

Employment-related risks can represent the most damaging exposure to a franchiser. Claims involving sexual harassment, wrongful termination or discrimination, from a current or former employee can potentially cause irreparable damage to a franchise brand and reputation resulting in significant financial cost.

To gain more insight into employer liability and especially sexual harassment claims I spoke with Peter R. Taffae, MLIS, CFE and Managing Director Executive Perils, Inc. In 2014 they introduced a management liability policy, FranchisorSuite®, designed for the unique needs of Franchisors.

Q. How extensive are employer liability claims?

A. Companies of all sizes and industries have been affected by a surge in employment-related litigation and rising legal damage awards.

Q. What can be done to mitigate those risks?

A. Be sure that franchisers, franchisees and their employees are properly trained to understand the risks of sexual harassment, unlawful terminations, and discrimination claims. Have the proper procedures and protocols in place and have financial protection.

Q.What does the future hold for sexual harassment claims?

A. The threshold has been raised for what is appropriate in the workplace. This means that the expectation for proper employment practices is higher. Some experts believe that it will take 10 to 15 years to reverse the trend as current middle age retirees are replaced by today’s younger generation.

Q. Any other threats that franchises face?

A. One area related to the franchise industry that doesn’t receive a lot of coverage is cybersecurity. Every state has primary notification laws, which that when there is a breach of a customer’s personal data, the company or franchiser must notify every customer. In addition, there is no statute of limitations regarding these crimes. For example, if I purchased a meal at a franchise location 10 years ago and their system was hacked, and my personal information was stolen, that franchise is liable.

Franchise restaurants process so many credit cards and have the extensive point-of-sale equipment, that they are vulnerable to data theft. Websites, Wi-Fi and digital kiosks represent additional threats. Any franchise which does any of the following is at risk for a cyber-attack; Accepts credit cards, handles or views private information of employees or customers electronically, has Wi-Fi or conducts a portion of their business online.

It’s important that each component of the franchise industry be prepared to protect themselves from the threat of employer liability and cybersecurity claims.
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About the Author:
Ed Teixeira is Chief Operating Officer of Franchise Grade and was the founder and President of FranchiseKnowHow, L.L.C. a franchise consulting firm. Ed has over 35 years’ experience as a Senior Executive for franchisors in the retail, healthcare, manufacturing and software industries and was also a franchisee. Ed has consulted clients to franchise their existing business and those seeking strategic solutions to operational, marketing and franchise relations issues. He has transacted international licensing in Europe, Asia, and South America. Ed is the author of Franchising from the Inside Out and The Franchise Buyers Manual and has spoken at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. He has conducted seminars, written numerous articles on the subject of franchising and has been interviewed on TV and radio and has testified as an expert witness on franchising. He is a franchise valuation expert by the Business Brokerage Press. Ed can be contacted at [email protected]

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TOP 10 REASONS TO INVEST IN RIKO’S NOW!

Posted on by Contributing Writer

RIKO’S THIN CRUST PIZZA…Franchise opportunities abound in every business category, but entrepreneurs interested in the fast-casual space, and pizza, in particular, should have Riko’s Pizza on their radar as a brand poised for growth and success with ground floor opportunities for franchisees.

Franchise Money Maker
CLICK HERE NOW: Franchise your company, expand your brand, collect your royalties!

1. Pizza is a $50.7 billion dollar*1 American passion
The pizza industry was designated as the fastest-growing segment of fast-casual restaurants in 2017.*2 A Riko’s franchisee buys into a growth business with high consumer demand and a track record of solid growth year-after-year. The opportunity to bring America’s favorite comfort food to a franchisee’s local market ranks high among Riko’s attributes as a new franchisor in this extremely, profitable business category.

2. A proven business concept
The Riko’s business model has been refined over a 7-year period prior to expanding into franchise offerings. Riko’s founders have continually tried and revised products, systems, and operations as they evolved into a turnkey operation. Those hard-earned systems are passed to franchisees as easy-to-follow, foolproof guidelines for consistent results. The simplicity and ease of operations hold opportunity for owners with or without previous restaurant business experience.

3. Flexibility for Franchisees
Franchisees can choose from a flexible footprint that suits urban or suburban venues. The flexible business model is designed to work and succeed in any space. Riko’s fast-casual operation features take-out, dine in and delivery. Riko’s full-service casual restaurant features a family dining experience with a full bar and table service. Owners can purchase single units or multi-unit options that are commensurate with their experience and finances.

4. Multiple revenue streams
Diverse revenue streams including lunch, dinner, and late-night business with takeout, delivery, and fast casual dine in and full-service restaurant and bar options, gift cards and rewards programs offer multiple growth opportunities within a franchise.

5. Quality, quality, quality
Attention to details has made quality a hallmark of Riko’s brand. High-quality ingredients — nothing artificial — proven recipes, simplified menu, first-rate equipment, comfortable, contemporary venue design, staff training ensure business growth and a consistent brand image. Entrepreneurs are buying into a brand associated with quality at every level.

6. Streamlined, state-of-the-art business operating model
Riko’s has set standards and developed systems that are easy to follow and easy to replicate over and over. Pizza franchisees can produce consistent, great results. Both franchisees and their future customers are assured of the quality food and service that launched Riko ’s original success in three Connecticut locations. Pizza franchisees are armed with the tools and knowledge to produce consistent, great results. Riko’s is a turn-key business model that works across all processes. The goal: keep things simple and do them the best they can be done.

7. Traditional family values that resonate with consumers
Riko’s core philosophy: respecting family, serving great simple food with a family-friendly ambiance, offers an appealing alternative in an ultra-fast food world. The Riko’s guest experience is warm and casual, fast without being harried. It’s a comforting experience that engenders customer loyalty and on-going, multi-generational business.

8. Comprehensive training & support
A good franchise offering includes support and training . That’s why Riko’s consulted and hired industry experts to develop a first-class training program. A five to six-week long training program — with modules at the company modern training center and owner’s location — takes franchise owners through all phases of the business; covering all the components necessary to effectively and efficiently manage a Riko’s Franchise business. A full suite of manuals provides on-going reference and instruction for owners.

9. Owners with passion
As a franchisor with a passion for growth and quality, Riko’s future is guided by passionate, involved owners with a hands-on approach to day-to-day business as well as an eye on long-term growth strategies. The active 360º business outlook ensures Riko’s is prepared to adapt, adjust, and seize new opportunities as they arise. The formula is set, but it’s constantly fine-tuned for success.

10. Community-centric focus
The success of the Riko’s original locations is grounded in community involvement. Riko’s mission in all franchise venues is to be part of local family life. Franchisees are trained to be local in their location and engage in sponsoring local youth sports teams, supporting school events, donating pizza to community events and more as a means to building relationships and thanking customers for their loyalty.

For more information please visit: www.rikosfranchise.com

How Do I Get The Money to Start My Own Business and How Much Money Do I Need.

Posted on by Franchise Strategist

HOW TO FINANCE YOUR BUSINESS IDEA…Our friends at Benetrends have covered this topic perfectly. When you have a great idea for a business but not the cash to get it going. This article will offer helpful tools to get that business started and growing.
Photo by Mick Haupt on Unsplash

Entrepreneurial Dilemma: Do I Have Enough Money to Start My Own Business?
Author Benetrends

You have come up with a great idea for your own business, one that you are confident will be financially, personally, and professionally fulfilling. You are ready to start developing your business plan, doing market research, and testing marketing ideas.
How much money will you need to bring this idea to fruition? What kind of finances will you need to get things started and how much will you need on a monthly basis going forward?

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These financial questions are often ones that keep entrepreneurs up at night, worrying about how much money they will need to be viable and successful.

It is a classic entrepreneurial dilemma: do I have enough money to start my own business?

Fortunately, most up-front and ongoing costs can be identified at the start of your ideation. Doing the work to build out your budget will bring you peace of mind and a foundation to use when pursuing small business funding. Here is a closer look at the framework you should use to determine your business costs.

What will it cost to open your business? Find out with our business planning calculator.Twitter Tweet This
Why Knowing Startup Costs Is Important

Startup costs give you and others a clear idea of what it will take to operate your business. Too many small-business owners underestimate their costs and end up playing catch up, undermining their growth or forcing them out of business. There are several benefits to projecting these costs:

Profit Analysis. Knowing what your costs are, along with your revenue projections, helps you estimate your profitability, including when you are likely to break even and how long you may be operating at a deficit.
Investor Expectations. If you are seeking investments to help finance your business, investors will want to see your startup cost analysis.
Loan Approvals. Lending officers, like investors, will want to know what it takes to open the doors and keep them open when considering your loan application.
Tax Planning. Anticipating your business costs helps you and your accountant plan your tax strategy by understanding what will be deductible when it comes time to file your taxes.
Peace of Mind. There is stress in starting a business. A clear-eyed understanding of your costs eliminates one uncertainty in the process.

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Click Here to Learn about Franchising Your Business

Questions to Answer Before Building Your Cost Estimate…Read the entire article here:
https://content.benetrends.com/blog/entrepreneurial-dilemma-do-i-have-enough-money-to-start-my-own-business

6 Tips When Buying A Franchise

Posted on by Franchise Strategist

Starting a business can be a life-altering event both good and sometimes not so good. One of the ways people reduce their risk is to purchase an established brand with a proven business model – a franchise.

Franchising has proved over and over again to give a new business owner the highest probability of success. If you follow the system, choose an experienced franchisor, work diligently, are appropriately funded and understand what you’re getting into then operating a franchise may be a perfect business model for you.

Selecting a franchise and purchasing a franchise combines gut reaction with solid research. Although there are many steps to buying a franchise here are my Top 6 Tips that will keep you moving forward in the process. I recommend never skipping or overlooking any of them.

Tip #1 – Begin With Some Soul Searching
Make a written list of what you believe you’re looking for in a business opportunity. However, for this exercise, you cannot put the words “make money” on your written list. The reason for that is simple. I want you to look inward at your dreams, background, hobbies, likes, dislikes, skills, social and community positions and all the elements that a business would need to deliver to you, despite the money. I know many franchisees and entrepreneurs that dread getting up every day to work their business even though are making all sorts of money. Franchisees that are great at selling or corporate engagement should seek a franchise that puts them in front of customers in a corporate environment, perhaps in the advertising business or financial business. Entrepreneurs that like to craft things or work outside or work with their hands should never seek out opportunities that land them behind a desk or stuck in a shop 12 hours a day. Although ultimately in time you will not be doing the “work of business” keep in mind that in the startup phase you may need to. Moreover, if you don’t like the work or have neither the time, desire or inclination to develop new skills you may never get to the next level in developing your business. If you can’t “see yourself” doing a particular type of work, then walk away, no matter how much money you think you’ll make. Look in the mirror and be honest when you sit down to write your list.

Tip #2 – How Much Available Capital Do I have?
Numerous business reports cite the number one reason a small business fails is that proper thought and consideration wasn’t given to the appropriate capital required to open and sustain the start-up of a small business. A lack of adequate money can destroy you before you even begin. It is crucial that you understand the numbers. Before you start your quest for a franchise, you should access your available liquid capital, your borrowing ability and the net worth necessary to collateralize a business loan. Also, there are various ways to finance your new business. That includes your savings, investments or loans from friends and family, bank loans, SBA loans and using the funds in your 401K to finance the new venture. Once you know the number, you can go shopping, or you may decide you don’t have enough money now and need to create a plan to accumulate the appropriate amount of start-up capital. Your accountant may be able to help you access your investment ability. Keep in mind many accountants (and lawyers) are not entrepreneurial minded or risk takers. Some will attempt to “protect you” by trying to convince you not to go into business. Remember you’re assessing your investing capability not looking for permission. That said, knowing how much you can invest will save you and the franchisor time. In addition, it’ll place you in a better position to succeed.

Tip #3 – Meet The “Parents”
In this case, the Franchisor. Once you’ve selected the type of industry you’d like to be in, its’ now time to search for a company that meets the criteria on the list we discussed earlier in this article. There are many ways to seek out opportunities, Franchise Trade Shows, Websites, Franchise Business Brokers and others. I’ll cover that in a subsequent article. Once you reach out to a franchisor, a franchise sales representative will most likely contact you. At this point be prepared to answer some questions over the phone. You may also be asked to fill out an application before going any further in the process. Many reputable franchisors will not engage in any serious conversation with a candidate without an application. My experience has been that franchisors willing to forgo written applications or skip asking qualifying questions at the start of the process may be desperate to “sell” a franchise. That should be a red flag for you. Beware, because it may be a sign the franchisor is undercapitalized and/or more interested in selling franchises and collecting licensing fees instead of supporting the franchisees long term by focusing on royalties from successful franchised locations.

Tip #4 – Take A Good Hard Look At All The Documentation
Once you fill out the application, the franchisor will most likely interview you over the phone or in person and then is required to issue you a Franchise Disclosure Document (FDD). Depending on the State where you live, you must have the FDD between 10 and 14 days before you can enter into any agreement or hand over any money to the franchisor. You will be asked to sign a receipt that you received the FDD and indicate the date you received it. This disclosure document has all the required information that the Federal Trade Commission (FTC) and various States require the franchisor to tell you. Please read it and reread it. Have a franchise attorney review the document and offer legal counsel regarding the franchise agreement. Then follow up with the franchisor. I would recommend that if you’re interested in moving forward, it’s now time to meet the franchisor in person (if you haven’t already) by scheduling a Discovery Day. Make a list of questions and spend the day to meet the team and get answers as well as a feel for the culture of the organization. Find out how deep the franchisor’s organization is and, please make sure you feel comfortable that the franchisor has enough experienced staff to service the franchisees.

Tip #5 – Speak With The Franchisees
Your best source of information is going to come from the franchisors customers, that means the franchisees. Call and visit as many franchisees as possible. Since many Franchisors don’t disclose Average Unit Sales and Operating Expenses in their FDD, they can not discuss it with you. Franchisors can only make claims and address financial issues published in their FDD. Be wary of the sales rep that starts telling you how much money the franchisees are making and how much money you can make. This practice of making “earning claims” not documented in the FDD is not only a violation of franchise regulation but also another red flag. However franchisees are not bound by franchise regulation and if they choose, are free to answer any question as long as they do not disclose proprietary information belonging to the franchisor, such as recipes or processes. When visiting the franchisees, build a report, let them know you’re close to making a decision and carefully phrase your questions so that they are not intrusive. I always ask about support and if they had the opportunity to “do it all over again” would they? Keep in mind there will always be a few disgruntled or struggling franchisees. Without knowing all the facts, it’s tough to condemn the system or franchisor. That said, if the majority of franchisees regret their decision or feel that the franchisor is not supportive, then you need to make further inquiries with the franchisor before signing the franchise agreement.

Tip #6 – Ready, Set, Go
Not so fast. Before the franchisor prepares a franchise agreement is it essential to discuss the best way to structure your new company. Many attornies will recommend that you not sign the franchise agreement in your name but instead set up a separate business entity such as a Limited Liability Company (LLC) or an S-Corp. Seek competent legal advice from a franchise attorney before you sign a franchise agreement or set up a new company.

Franchise ownership can provide you and your family a lifestyle that can not be achieved by working a job for a company. Building a business can be rewarding, exciting and stressful all at the same time. As an entrepreneur, I believe business ownership is the best form of work for many people.

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About the Author
Gary Occhiogrosso is the Founder of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm. Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, advertising, selling franchises and guiding franchisors in raising growth capital. Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program with its founders. He is the former President of TRUFOODS, LLC a multi-brand franchisor and former COO of Desert Moon Fresh Mexican Grille. He advises several emerging and growth brands in the franchise industry. Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine and named “Top 50 CXO’s” by SmartCEO Magazine. In addition, Gary is an adjunct instructor at New York University on the topics of Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales, and Marketing. He was also the host of the “Small Business & Franchise Show” broadcast over AM970 in New York City and the founder of FranchiseMoneyMaker.com