How Do You Survive Franchisor Bankruptcy

It takes immense discipline and fortitude to survive a franchisor’s bankruptcy. It’s a good idea to have a plan to minimize any potential losses in revenue and reputation, just in case such an unfortunate circumstance arises. When armed with a plan, you’re more likely to avoid disaster and consequently keep your business afloat.

The following are tips designed to help you get through franchisor bankruptcy:

-Heed warning signs: Hear a rumor? Investigate it. You do not want to find out the hard way i.e., through a third party like a customer or the paper that the franchisor is bankrupt, since doing so can compromise your rights and interests. If someone murmurs bankruptcy, be on the alert. The worst case scenario is that you determine that the rumor is no more than a rumor, and business resumes as usual. Some signs are very subtle, so pay attention. For example, if your franchisor is collecting advertising money from you but you don’t see any advertising happening, be on guard.

-Have a crisis communication plan: Make sure you have a public relations campaign that includes a crisis communication strategy preferably, a strategy that includes several contingencies. For instance, if your franchisor goes bankrupt, the media and customers will be wondering if the business is in jeopardy. You want to be able to craft a quick response.

-Be sure to stay in touch with the local media: True, newspapers and media generally go straight to corporate headquarters for information but don’t let that deter you from establishing your own relationships with writers, reporters, producers, and news directors. This way, you’ll be in a better position to field inquiries should disaster strike.

-Keep a list of alternative suppliers: Occasionally the initial problems occur with suppliers who may be nervous about getting paid. Moreover, if the franchisor can’t provide supplies, a franchise must look elsewhere. Develop a list of viable and trustworthy suppliers to prepare for a possible distributer catastrophe situation.

-Maintain a stash of supplies: Your franchisor declaring bankruptcy could very well leave you with an inadequate amount of supplies. By keeping a surplus of items you may need, you can avoid this scenario.

-Ensure that the community is aware that you’re independently owned: While you don’t necessarily need to regularly remind your customers that you’re independently owned, you do need to establish your business as a separate entity from all the other franchises. This can be accomplished by either letting fellow business owners know or becoming involved in the community. You want your business to feel as local as possible, because customers tend to favor locally owned businesses over nationally owned ones.

-Get the support of fellow franchisees: Moral support from your colleagues even if they’re also your competitors never hurts. In fact, helping out your fellow franchisees in times of need could ultimately mean the difference between success and failure. If the distance between you and other franchisees isn’t too great, you may be able to share supplies, which would help everyone.

-Consult a lawyer specializing in franchising: Consulting an attorney who has expertise in franchising could end up being invaluable in the case that your franchisor goes bankrupt. The time and money you put into hiring an expert is, simply stated, an investment in your future. A lawyer can educate you about your rights and help you concoct the right business plan for your business. You owe yourself this and more as a business owner.

Want To Start A Business, Try Franchising

Want to start a business? Many have the capital, but wonder how to realize this dream without a good idea? Don’t worry. There are plenty of people out there who do have good ideas and who would love to take on a partner. The reason is that, while, these business owners may have the good idea, vision and desire, they may not have the time or the money to realize their goal of branching out. Therein lay an opportunity for any wise investor with hopes to collaborate and grow alongside a lucrative business.

One of the best parts about these types of opportunities is that they are easy to realize. There is no need to start a business from scratch. There are plenty of businesses that are already operating and that already have clientele, so the desire to start a business does not require it be started from the ground up. A business can be started through a powerful business model called franchising.

Franchising provides a template for an existing business in that is in need of smart investors. It also provides the creator of the business a means to share his or her dream with more customers. It also provides the creator another stream of revenue in the form of added capital provided by the wise investor: An investor with the foresight to realize a good thing when he or she sees it. For those who have considered starting a business, expanding a good one is a smart way to go about accomplishing this goal.

If franchising sounds like a good investment, what would be the next logical step in making this dream a reality? One path that a curious investor might take, leads to a maze of information that could be difficult to disseminate. Another path would be to find an expert in the field or a group of experts that can help you figure out how to franchise. For those who prefer the easier and more logical approach and for those who seriously want to start a business, there is the How to Franchise System.

The How to Franchise System provides information on the best way to create a partnership through utilizing the franchise model. This system also provides all the tools needed to open up a second establishment as well as how to maintain a consistent level of quality and service. If there is an opportunity out there that looks like it would make a good franchise, the wise investor would act before someone else sees the opportunity. And, best of all, Franchising is neither as hard, nor as expensive as many think. It is one of the most affordable ways for someone to start a business.

Just look for the How to Franchise System where all of the guidance and support needed to turn one successful business into two or more successful businesses is available. The dream can be a reality, but only for those who are willing to take that initial step by going to How to Franchise and seeing what can be done for someone who wants to start a business.

Going The Franchising Way!!

To be a franchisee or not to be, that is the question?
In planning ahead it is important to be aware of all the options available to you.
The good news is, the results you achieved last year was based on the model you operated, so if you were happy with what you achieved keep doing what your doing. If you were not, then changing your marketing strategy, upgrading your web site may not be enough to get what you deserve. Addressing the method in how you do business is by far the most import thing you need to do in your business.
One need only look at history for supporting evidence on whole industries that have all but disappeared from this land because owners were not prepared to change their models to meet the ever changing market. Look at the car industry and the Ambassador. Dont let your business be a statistic. Just think two years ago before the Apple phone there was no such thing as a phone app, today there are more than 600 000 phone apps. Change is inevitable in all that we do, we can either stick our heads in the sand and be overwhelmed by change, or embrace change and build a dynamic business designed for today and tomorrow. There is business to be done and there are smart ways to get it.
I know that in our real estate industry, mention franchising and ones audience becomes immediately skeptical, however I believe this skepticism is probably based on a lack of understanding of how much value a good franchise model can add to an existing business.
I have taken note of various comments made by the franchise industry and share them with you, and yes it could be construed as self serving, but the comments do tell a compelling story.
I know that given the choice of having to navigate a stormy sea I would be more comfortable on board an ocean liner than paddling my own canoe.

FRANCHISE INDUSTRY CONTRIBUTES SIGNIFICANT INCREASES TO THE INDIAN ECONOMY DESPITE A SLOW DOWN IN MOST OTHER SECTORS
94% of franchisees are optimistic about future business
Nine out of ten businesses are profitable
86% increase in the number of women franchisees
INDIAN franchise businesses continue to grow and remain robust despite economic conditions, with the industry contributing significantly to the country’s GDP last year.

2011 was a year where more businesses took up franchising as a business model. Franchisors’ confidence for the future of their business also grew with 94% being optimistic about business conditions, in comparison to only 82% last year. Franchisors and franchisees are hopeful about the potential for growth with franchisors on average planning for a large number of additional franchisee outlets.
Franchised businesses have weathered the tougher economic times extremely well, which is not surprising if we look at how franchising has proven itself over the years. The combination of the wider business support, training and economies of scale, with the determination, enterprising nature and local business focus makes franchise businesses a very robust offering. This year has highlighted this particularly well with success rates of franchise businesses not dropping.
It’s been a tough time for businesses across the India, but franchised businesses have clearly shown a high level of stability and robustness and made a valuable contribution to the Indian economy last year.

At RE/MAX we have invested a huge amount effort and resources over the past 3 years developing systems that address:
Affordable growth
Productivity
Forecasting cost
Quality service
And profitability

We have implemented these systems in all of our offices and Regions and have experienced phenomenal results.
We are looking to grow our business with like minded people who have the desire to lead their local real estate markets.
To find out more about the opportunities we have, please contact:
Puneet Verma – or call him 09654965021 or www.remax.in

Small Business Vs. Franchising Part 2- Which Do You Want

Franchises: Levels of Opportunity
Franchising offers franchisees a level of opportunity which is not possible in regular businesses. A start-up venture with an established brand, as well as with the support of seasoned professionals, is a tremendous advantage to a business person. Yet many do not realize that varied levels of opportunity are available within franchising. Franchisors can offer the standard franchise but there are also additional options for franchisees.
Types of Franchises
A mini-model – suitable for those with less capital
An in advance option allowing franchises to take on additional units based on future performance of the first location
A large territory option allowing an entrepreneur to become an area developer
A master licensing option in which an entire country or State is your playing field
Ideally, franchisees should enter at the most suitable level for their skills. Most franchisors will enjoy a challenge but nobody thrives in a business if they feel overwhelmed by the commitment. When you are exploring and comparing different franchises, understanding yourself is an invaluable asset.
Remember that a franchise is a long term commitment maybe five or ten years. Although in regards to franchises, commitment can be a relative term. Within the contractual commitment, the standard franchise is five years with the possibility of renewal for every 5 years subsequent to that period. The opportunities for renewal can extend up to a maximum of 15 to 30 years (and possibly ongoing) depending on the particular franchise.
Everyone does not have a clear understanding of franchise licenses. Many individuals are under the impression that franchises extend for an exact 15 or 25 years. Some people believe that franchises do not have an expiry date. The first franchise systems in North America did not have an expiry date. As franchisors leaned more about the industry, they realized that having no expiry date was not favorable to franchising.
The lifetime licenses ran into problems in two specific areas locations and losses. When locations began to show signs of age, franchisees lost interest and became complacent about their business. Since a neglected franchise can weaken the entire franchising system, the failing business becomes an impediment to future sales on the customer and franchisee side.
In addition, older contracts neglected to enforce rules and regulations about modernization. New locations did not open and the brand could not experience consistent growth. The whole system was affected in a negative manner. The lifetime licenses resulted in inadequate regional representation and often in failed franchises. Todays licenses include guidelines which encourage the franchisee to stay current in the modern marketplace.
If current franchisees let their business run down or do not market it in a proper manner, they need not expect a renewal following the five-year period. Modern renewable-on-conditions contracts help protect the investment of the franchisor and the franchisee. These contracts help maintain and increase the value of locations and ensure the health of the franchise. Since franchises are an extremely synergistic setup, the guidelines set up a winning scenario for the entire franchising system. Offering distinct levels of business opportunities, modern franchising is a flourishing industry.

Franchising Mistakes To Avoid

A franchisee must be a sound business person. Even if its about food or cosmetics for a franchise to be a success it is important for the franchisee to have sound business sense and keep the franchise on track.

There are many aspects to running a franchise and the success of a franchise can be assured if mistakes are avoided.

According to people in the industry the most common causes of failure of a franchise business are:

1. Signing a contract without legal counsel or understanding the fine print. It is important to comprehend clearly what clauses 1-23 of the Uniform Franchise Offering Circular or UFOC mean. Be smart read the document and make a list of questions you want answers to. Ensure you are in agreement with everything before you sign and use any negotiation skills you have to your advantage. A franchise business must benefit both franchisor and franchisee.

2. Not doing the foot work to determine whether the franchise has any chance of success or not. Find out all about successes and failures. Ask about litigations and more. Make the effort to contact other running franchisees and ask about problems encountered. Get a clear picture.

3. Miscalculating finances. New franchises need capital to set up things and get the business moving. These include finding allocation, refurbishment, equipment costs, salaries, training, promos and more. When planning finances its important to think of the impossible and include costs of insurance and more.

4. Taking an unviable business loan. Very often its not a good idea to take the first loan offered. There is a need to think of returns, interest, pay back tenure and more. Use expert help to get the best support at the lowest costs. Often paying for a good consultant will save thousands of dollars later.

5. Failing to build a rapport with the franchisor and his /her key personnel. For a franchise to work you need a good relationship with everyone; the sales people, the field representative, the district supervisor, the marketing people and others who hold a franchise of the same franchisor as you. If your instinct tells you there is not much substance below the surface, avoid the business.

6. Analyzing business potential and entering an already saturated market. Study the lay of the land and also find out whether there is a need for your kind of business in the location specified by you. Success needs potential and uniqueness. Being one of many in a small area waters down possibilities of profit.

7. Taking into consideration personal aspects like health and family responsibilities. It is important to know you can burn the candle at both ends until the franchise runs well. You have people you can depend on and are in good health. Thinking the unthinkable makes sound business sense.

8. Ignoring clauses in the contract that refer to breaking the contract etc. pay attention to each and every aspect; consider what will happen to the franchisee if you are hospitalized or die.

9. Taking up a business on an impulse without requisite skills. It is crucial to know whether franchising is for you. A business needs long term commitment and cannot be abandoned on a whim.

10. Not creating a sound business plan. To avoid losses its important to monitor the business from day 1.MIS systems will help nip problems in the bud. Close monitoring and staying ahead of competition are required 24/7.

Use resources provided by the World Wide Web to educate yourself on the franchising business secrets and work models. Be determined to be a pro franchisee.