I’ve been noticing a new crop of high-end fast casual franchise concepts that are the size and atmosphere of a traditional sit down restaurant, but orders are taken at the walk-up counter. Ingredient in Kansas City comes to mind. They follow the recent trend of hearth oven baked pizza, homemade pastas, salads and sandwiches.
Vapiano is also an interesting urban-only concept started in Germany and now here in the USA.
It is a very modern, high-end Italian fast casual concept. The chefs are stationed around the dining room, and customers walk up to the chefs who prepare their order right there. A customer’s food and drink totals are tracked using a chip card similar to one you’d see on cruise boats. As the customer leaves the card is scanned and the customer pays. It sounds a bit like a modern cafeteria but the architecture is sleek and hip. The average check ranges from $14.50 to $22, depending on whether it’s lunch or dinner, claims the owner.
The franchisor’s job of communicating with franchisees is not as easy as you might think. Some franchisees simply shy away from anything technology, some barely speak english, and some franchisees expect regular courtesy phone calls.
To communicate news and information, brands like Qdoba, FOCUS and Salad Creations use newsletters, representative committees that will communicate back to the franchisees, and technology tools such as intranets, online videos, webinars (voice-over presentations viewed from the franchisees’ computer)
Most restaurants have or would live to have a thriving catering business to augment sales. A restaurant with a successful catering business typically increases sales sales by10% to 20%. Here is a great article with advice from experienced caters on equipment, deposits, and marketing.
“Our biggest catering customers are schools, offices and churches,” says Preston. “We market our service on our menus, on the Web, in the paper, and in schools and offices. We also hand out catering information at functions, feature it in our EClub newsletter, visit local businesses and leave info (then follow up with a phone call), and get involved in local charity events.” If you’re worried about spending too much money on advertising in the beginning, Skvorecz says, “Start slow and advertise to your existing customers by printing out your offerings and placing an easily visible sign on your countertop. Get through a holiday period and see how it goes; then consider expanding your ads into the Sunday paper or other media.” The possibilities for game days alone are amazing, according to Skvorecz. You can free up a lot of your time on days such as Super Bowl Sunday if customers have called ahead to cater their parties and already have their food before the game even starts.
“I can’t stress enough how important it is to have the proper equipment,” says Preston. “Keep your hot food hot and your cold food cold with a stackable Cambro (hot box); invest in midto high-quality chafing dishes; and don’t forget your canned heat! Make sure all catering platters, plates, flatware and serving utensils are kept in storage, and never (unless you want to buy more) put them into restaurant/pizzeria circulation.” Preston also advises being a stickler for details: “Be sure to qualify special requests and leave no loose ends,” he says. “The devil is in the details; I use email, which gives me a written record, which wins all discussions.” Get a deposit, too: “I shoot for 50% and will accept no less than 25%,” he says. “Of course, that can change with repeat customers.”
A 26-year-old woman became the youngest franchisee in the Schlotzky’s system. Is she too young? You may think, until you read this:
Jessica Johnson worked at the Schlotzky’s in Teays Valley for nine years – working her way from cashier to manager.Then in October, even though some people thought it was a little crazy, Johnson got a Small Business loan and bought her very own store.That made her the youngest franchisee in the Schlotzky’s chain.”I was not scared to do this because I believed 100 percent” Johnson said. “I knew it was something I wanted to do and if for whatever reason it didn’t work out I knew there was someone looking out for me and it wasn’t meant to be.”Johnson says she has been focusing on catering, delivery and customer service to keep profits up despite the economy.
She is probably more experienced and ready than 90% of Schlotzky’s independent franchisees.
Clever. Pay for a survey about Super Bowl eating habits, get free publicity, get your brand associated with “healthy” and “Super Bowl”.
SUBWAY Restaurants, which has long been committed to promoting “better-for-you” meal options among both children and adults, conducted an Omnibus survey of more than 1,000 Americans regarding their Game Day snack consumption habits and learned they overeat the most during the Big Game (27%)–trailing only Thanksgiving (85%) and Christmas (61%). More than half surveyed (59%) admitted to overeating during the Big Game and reported gorging themselves on nachos, fried chicken, chicken wings, pizza and other generic “junk food.”
Methodology: An Omnibus survey conducted a telephone survey on behalf of SUBWAY(R) Restaurants of a nationally representative probability sample of households; 1,090 interviews were completed among adults ages 18+ (53 percent female, 47 percent male). Interviewing took place January 7-9, 2008.
If you have been to Europe, particular the U.K., you know what Tesco is. It is an omnipresent, progressive grocery chain. They are opening up their first US stores starting in California. I always enjoyed Tesco’s twist on the supermarket, and I am sure they will be making a very successful entrance into the US marketplace.
I unfortunately need to board my 2-year-old beagle while I leave on trip. I shopped around thinking I would find franchise dog hotels everywhere considering I’m in downtown Chicago. I’ve discussed pet franchises like Camp Bow Wow here and here. To my surprise, in Chicago all I found were all privately owned business started by practical entrepreneurs , some being very innovative such as Stay started by dog-lover architect who said, “Why do pet boarding facilities need to be small locations with chain-link cages. He charges between $45 and $75 for one night of dog boarding, and he easily get’s that fee.
Mobile pet grooming seems to be a franchise getting attention lately. I found this Chicago-based entrepreneur that could have purchased a pet service franchise, but decided to build it herself. After a few years she added a mobile pet grooming service to her existing two Chicago pet service (grooming, boarding, walking, training) locations.
She could have paid a $25,000 franchise fee plus 6% royalties and other mandatory marketing fees to a franchisor, which may have been worth it if the business had a strong competitive advantage and high brand recognition with the target market. But, that just wasn’t the case here in Chicago.
The moral of the story is - demand a lot from franchisors. As a franchisee, you are literally making a multi-million dollar bet, while the franchisor is not at much financial risk. You are taking on the risk that could result in bankruptcy if the franchise business projections don’t pan out or competitors can copy your poorly branded business, so require that as a franchisee you license a business model with a proven and sustainable business model, a business with high barriers to entry and difficult to duplicate business, and can provide a much higher return than your money in the market and your time working for an employer. Just being “new” or “unique” or “better looking” in a new or mature market is NOT enough. See the meal assembly industry for a perfect example of a good idea but bad business with no real protectable competitive advantage. You should choose your business and build out your projects with the assumption that competitors with a fresher twist or lower prices will move in next door. In the franchising industry, if a concept makes money, rest assured there will be improved copycats out within a year or two. Can you still be certain that you’ll earn a sufficient return on your investment? If not, keep looking for another franchise or start your own business…even if it’s a copycat.
I’m a fan of free wifi or near free wifi (pay an extra $5 and you can have unlimited internet for the day) if you have the seaing capactiy. I am a frequent user of free wifi in stores and think it usually makes economic sense. I go to Panera Bread and other local restaurants just for the free wifi. In fact, many visitors will buy a coffee and snack, then in a few hours buy lunch. The idea that people will sit there all day and not spend any money is rare because people simply cannot sit and not eat for 10 hours, especially when they are in a restaurant. You will always have people who pay you $2 for a coffee and use your wifi for several hours, but most don’t. The $20-$30 per month spent on wifi will certain pay for itself in higher net sales.
Panera Bread limits free wifi to 30 minutes during lunch times (noon – 2pm).
Costs will vary, depending on the size and configuration of each restaurant. Franchisees must buy equipment to make specialty coffees, and, eventually, smoothies, as well as wall-mounted refrigerators for bottled sodas and energy drinks, and would have to remodel the counter and drive-thru service areas to make room for the equipment.
A franchisee who installed the new beverage equipment as part of a company test pegged the cost at $100,000 per restaurant, according to notes from a meeting of restaurant owners in August.
McDonald’s hopes to equip 1,500 restaurants to sell the new drinks by the yearend, with the rest on board by late 2008, the planning documents indicate. It’s the biggest change for McDonald’s since it overhauled its cooking procedures in the late 1990s to make sandwiches to order, says Dennis Lombardi, a restaurant consultant with WD Partners in Ohio.
As it rolled out that plan — the Made for You campaign — McDonald’s agreed to pay half of the estimated $25,000 per restaurant in equipment expenses for franchisees. But when the costs for the program exceeded the estimates in some restaurants, it caused hard feelings among some franchisees.
The test market numbers looked good:
In test markets including California, Georgia, Michigan and Texas, specialty coffee has increased customer traffic by 44% a week, an August memo from a franchisee group shows. The initial tests show the new plan doesn’t require more employees or slow down service.
Specialty beverages such as lattes have much higher profit margins than sandwiches. Sales in this new beverage category could rise by 90% in the next five years, generating $125,000 in annual revenue per store, according to company documents. McDonald’s estimates that those sales could mean additional annual profit of between $15,000 and $60,000 per restaurant, the documents show.
Looks like the R&D team (or their consultants) at Dunkin’ Brands (Dunkin’ Donuts, Baskin Robins, Togo’s) have been hard at work reworking their ingredients. Hopefully this won’t be too much of a burden on the franchisees and no new equipment or costlier ingredients will be required.
About 400 locations nationwide that took part in a four-month test already have made the switch to a new blend of palm, soybean and cottonseed oils. That includes all restaurants in New York City and Philadelphia, which are forcing restaurants to phase out their use of artery-clogging trans fat.
The ice cream chain Baskin-Robbins, another unit of Dunkin’ Brands Inc., plans to be zero grams trans fat by Jan. 1.
…
Dunkin’ isn’t positioning its namesake product as health food – a shift that would involve more disbelief suspension than might be possible for a treat synonymous with portly, doughnut-gobbling Homer from television’s “The Simpsons.”
“The goal was not to make a healthy doughnut, it was really to create a doughnut that was better,” said Joe Scafido, Dunkin’s chief creative and innovation officer. “Certainly, we did not create a healthy doughnut.”
…
This past spring, hundreds of restaurants began taking part in a test to gauge customer reaction to the blend that Dunkin’ ultimately selected. Managers at participating stores were split into two groups, with one receiving conventional cooking oil, the other receiving the experimental oil, and neither group knowing which type they received. Dunkin’ closely watched sales and customer response at restaurants with the experimental oil.
“We got no negative consumer feedback, and we sold 50 million doughnuts in that time,” Scafido said.
What are Dunkin’ Donuts’ competitors up to with the fat?
Dunkin’ is ahead of Krispy Kreme Doughnuts Inc., which has yet to roll out a zero gram trans fat doughnut but hopes to do so. Brian Little, a spokesman for the North Carolina-based chain, said, “We continue to work aggressively with outside supply partners, and our goal is to get to zero trans fatty acids while maintaining great Krispy Kreme taste.”
A call seeking comment from another chain, California-based Winchell’s Donut House, wasn’t immediately returned.
Starbucks Corp., Dunkin’s Seattle-based rival in the coffee shop niche, said in May that it would cut artificial trans fats out of its food and drink by year’s end in stores in the continental U.S., Alaska and Canada.
Dunkin’s announcement follows about four years of research of more than 28 alternative cooking oils and proprietary blends.
If nothing else, this will result in much FREE puclicity for Dunkin’ Donuts…being one of the first movers in a healthy trend does have its advantages.
What is one way to gather sample financial results for franchises when the franchisor refuses to make optional financial disclosures in their UFOC? Check out the classified ads of businesses for sale. While the classified ads will generally disclose very basic and very vague financial information, such as annual sales and net income or cash flow, you will start to get a picture of the going valuations and metrics used (such as a multiple of earnings before income, taxes, depreciation and amortization; or a multiple of free cash flow), all of which will help you understand the financial models and drivers for the business.
The financial disclosures in classified ads should be taken with a grain of salt. Why? You need to understand accounting and finance, or hire someone to help you with the valuation and explain the tax and valuation factors used in determining what type of free cash flow and return on your invested capital and time you can expect to reap. You also need to understand finance to know if you are comparing apples to apples. For example, all of these will make a huge difference in what the valuation means to you:
Seller’s Loan payments and interest rates
Lease payments
Upcoming or postponed capital improvements
Wages per employee, total wages per day
Wages and distributions paid to the owner, if any
Competition near location (knowing that there are several competitors in the mall is better, because if there are no competitors you know that sales will mostly drop when a competitors moves in)
Your(buyer’s) financing options and interest rates
Expenditures for accounting/legal (did they owner do their own accounting, or pay an accountant, what will you do?)
Cash/theft rates
Franchise renewals – how soon before the franchise agreement expires, and will there be required remodeling or purchases as a condition of the franchisor to renew the franchise?
Below are two Auntie Anne’s for sale:
#1 – Worcester County, MA, USA Asking Price: $175,000 USD USA Dollars Business for Sale Industry: Food & Beverage: Non-classifiable Reason for Selling: other business interests Year Established: 1995 # of Employees: 1FT/8PT Yearly Revenues: $269,687 Yearly Cash Flow: $70,690 Overview:
Auntie Anne’s Pretzel franchise located in a recently renovated mall. Be part of one of the fastest growing international franchises. Any new owner would benefit from the training offered at both the corp. HQ and on site. With a very reasonable rent in place for the next 7 years this store is ready for a new owner/operator to take it to the next level. A great opportunity for a first time business owner looking for the security of a franchise with minimal expense and maximum potential. Get in now before the busy fourth quarter when things really boom!
Business Summary: Auntie Anne’s Pretzel franchise located in a thriving destination shopping mall. This shop is in it’s fourth year of operation, the rent will remain steady for the next 2 years and there are options available. The rent includes the utilities, trash removal, and all common area expenses. The mall has been updated with stable anchors such as Macy’s and Target and the cinema is being renovated. This is a great opportunity for an owner/operator to both improve revenues and profitability as it is currently run absentee. Any buyer would need to be approved by the company and spend two weeks training in PA, The key to this operation is the very low cost of goods for this product, it is simple, straight forward, and a high margin operation to run. This store is being offered at a reduced rate as the absentee owner is motivated to move on and it is a fantastic opportunity considering a buyer avoids the normal $30k franchise fee. The initial start-up and build out cost for a new franchise is estimated at $275k.
Year Business was Established: 2003
Number of Employees: 1FT/9PT
Both have around $75,000 in cash flow, but one is selling for $65,000 and the other is selling for $175,000. The $65,000 must be a great deal, right!?!?! Not so fast. The owner is selling for $65,000 already sunk in $300,000 in build out and initial costs, and is implying that at the end of last year he had $80,000 in the business’s bank account. I’ll buy $80,000 worth of cash for $65,000 any day, but the owner obviously isn’t that stupid. Something is going on here for the price to be so low in contrast to his capital outlays and claimed positive cash flow. More likely he is just making ends meet, and the headache of managing teenagers who will rob you blind and not show up for work is driving him nuts.What is better = Buy an existing franchise or open up a new franchise? Buying an existing franchise is often preferable if one is available in your area. The risks are much lower because you have a sense of the business economics and customer visits before investing. Also, you avoid the higher franchise fee and sellers tend to discount their upfront build out costs. Of course, most of the time the franchise you desire does not have one for sale in your preferred geographic area, so buying and building a new franchise is your only option.
The product, introduced Tuesday, is the third chicken snack wrap offered in the past year. The wraps have helped McDonald’s bring more customers in during the usually slow afternoon hours and may give it a leg up over rivals like Burger King and Wendy’s, analysts say.
“It’s probably one of the better products we have seen in the last several years,” says Larry Miller, an analyst in Atlanta with RBC Capital Markets. “They have really attacked the mid-afternoon as an area of opportunity.” Along with expanded
Opinion:
Being part of a larger, publicly traded franchisor has its benefits, particular in innovation. The CEO must respond to negative publicity such as law suits or poor quality control, and it must be able to “tell a story” why the stock price is undervalued. The CEO’s story is usually that investors are not fully valuing the upcoming improvements in the product or service offerings, such as a new menu item, a new promotional campaign, a faster system of delivering to the customer, etc. This dance with stock analysts help franchisees by ensuring that there is some R&D and brainpower behind executing better strategies and more profits.
Furthermore, being a franchisee where the frachisor is a publicly traded company has other often-overlooked benefits. Disclosure rules and various SEC compliance regulations place a heavy burden on the franchisor to honestly disclose information. For example, most publicly traded franchisors (see McDonald’s, Buffalo Wild Wings, Jack in the Box, Gymboree, Choice Hotel, H&R Block, Regis Corp, to name a few) disclose monthly or quarterly same-store sales results, and disclose some transaction involve the sale or purchase of stores. A potential franchisee can likely reap sales data from these SEC filings and press releases.
The franchisor’s executive team must sign-off on these disclosures, and releasing false information can result in jail and huge fines imposed by the government. Instead of pursuing a franchise with a private franchisor who refuses to disclose any earnings claims, perhaps limiting your evaluations to publicly traded franchisors is a prudent decision. For the same disclosure reasons, many investors limit their investments to publicly traded securities rather than delve into the restricted world of private placement investments.
I came across this franchise and thought it was interesting, particularly because of the strong potential for commercial contracts with repeat business.
Auto Driveaway provides personal and fleet relocation services for cars and light-duty trucks, and arranges certified drivers for trucks and heavy equipment.
“We’ll be a full-service office, able to move any type of vehicle that can be driven on the highway,” Schultz said in a statement.
If the flag you unfurled today looked a little more pink, beige and lavender than red, white and blue, Goin’ Postal wants to help.
Throughout July the Perry packing and shipping business is offering a free American flag to anyone who brings in a faded or tattered flag. It’s a companywide effort by the chain, which has 250 locations.
Hopefully your franchisor can come up with clever ways to get free PR and get people in the doors. Free in-store give aways, promos with local radio stations, big donations of products/services – are a few commonly used techniques that will get you noticed. However, many franchise agreements forbid franchisees from endeavoring on their own public relations efforts, so I would be sure to choose a franchise that gives the franchisee the flexibility to promote oneself in clever ways.
Hiring reliable employees, and nurturing them so they stay
consistency of product quality (linked to employees)
flexibility of franchisor to permit altenative and innovative store layout
Below are direct quotes for the article:
Lowe attributes much of the company’s success to hiring standards almost unheard of in the restaurant industry. The company has a turnover rate of slightly above 50 percent, unusually low for the industry. Before an employee goes to work for The Restaurant Co., they undergo a psychological profile, a drug test and a criminal background check, and that’s after having gone through several interviews.
…
Once the company hires someone, Lowe said, the processes in the restaurant are designed to help them be successful. The company conducts employee satisfaction surveys twice a year to help spot problems.
Restaurant employees also have the authority to solve a customer problem, up to $100.
…
“We are full-service guys running fast-food restaurants, so we look at things differently,†he said. “We focused on dinner, where a lot of quick-service restaurants focus on breakfast.â€
The company supported that effort with innovative restaurant designs including carpet on the floors, softer lighting, granite countertops and wooden chairs. The Short Pump restaurant even serves beer and wine, although it’s a small part of the business, Lowe said.
“If you are really trying to analyze why our average unit volume is so high, dinner has a lot to do with it,†Lowe said. “Our lunch/dinner mix is about 50/50.â€
One of the franchise opportunities that I thought was interesting at the IFE last week was the Fun Bus.
The cornerstone of the Fun Bus franchise is a full-sized and fully operational school bus whose seats have been removed and replaced with a padded playground ideal for children ages 2 to 7. The bus features a trampoline, a rope swing, a punching bag, a parallel bar, a basketball net and a big slide that is attached out the back. The bright green school bus brings fitness and fun directly to children at daycare, nursery schools and birthday parties.
The Fun Bus visits daycares and nursery schools once a week for a 10-week session, giving the children 30 minutes of learning and fitness taught in a fun way.
What I find appealing about the opportunity is there is no real estate involved, it’s an easy business to operate and it acts as its own billboard as it drives around town.
The investment is moderate: franchise fee is $25,000 fee, franchisees get the Fun Bus name in a secure territory, training, manuals, after-sale support and a list of potential customers (day care centers), a customized bus and equipment runs another $25,000. Add additional $15,000 for some advertising, working capital and misc. expenses, and the total investment is approximately $65,000.
Although they are fairly new to market, they do have some track record, they started franchising in 2003 and have 16 operating units.
I have yet to see the UFOC (I requested a copy), but I think the concept could be a good match for moms, or 20 something year olds looking to get into business.
The scale and efficiencies of being a large area developer is a highly-successful strategy to making money as a franchisee.
Value Place is an extended-stay hotel concept based in Wichita and founded by Wichita entrepreneur Jack DeBoer.
Liberty Lodging announced Wednesday that it closed a debt financing facility of up to $360 million with Goldman, which will allow Liberty to build properties in Boston, central Florida, Denver, Indianapolis, Montgomery, Ala., Providence, R.I., Salt Lake City and Springfield, Mass.
Here is a unique selling idea from Cex, a retail technology franchisors in the UK – Get some of your investment capital back if not satisfied within 12 months. It’s probably difficult to meet the “conditions” for this partial reimbursement and cancellation of the franchise agreement, but at least the idea of giving a franchisee an ability cancel with a small percentage of your money back within 12 months is a step in the right direction. The devil is always in the details, but by the time you get approval on your location, build out and are ready to operate, I would imagine most of your 12 months from signing the franchise agreement are over.
So confident is CeX of its franchise opportunity that, for a limited period, the company is offering a ‘Buy Back Guarantee’ for new franchisees. Subject to conditions, CeX will refund stock, shop build and fit costs and take over the store management and running costs should the franchise not meet the franchisees’ expectations.
In the fast and ever developing world of high-end electronic entertainment, CeX provides a valuable service to technology enthusiasts wishing to stay ahead of the game. The ongoing advancements of mobile phones, MP3 players, digital cameras, computers and games consoles means models are quickly updated and replaced. The CeX business model allows customers to buy-and-sell part-exchange quality second-hand technology and entertainment products at attractive prices and with a 12-month warranty – CeX is the one-stop-shop for gadget lovers.
Meanwhile, every detail of this breezy-feeling building is designed to reinforce the brand.
Customers waiting for their food at the drive-up window gaze through glass walls at the interior, and they also have a good view of the coffee-by-the-pound, shelved up high and directly opposite the glass wall.
the Flatbread Sandwich is a key item at the new Dunkin’ at Stickney and Gateway Avenue. Priced at $2.99, the sandwichof the future comes in three versions: turkey, bacon and cheddar; ham and swiss; and three-cheese…Delivered frozen and crisped up in expensive new ovens that combine convection with microwave, the Flatbread is a cross between a Cuban and a pita sandwich…These convection-plus microwave ovens, which are all the rage in the fast food industry, give the bread a toasty, fresh-baked finish while getting the innards nice and hot, and they do it all in a minute.
Same for the next item down under the heading “Anytime Snacks” — the “Grab-N-Go Pizza” — and for another new hand-held meal, the “Chicken Biscuit.”
I like what I’m hearing…
Right now, Kaplan is doing at least 60 percent of his business between opening and noon.
I’m a bit surprised. I thought they’d do 75%+ before noon.
The average Dunkin’ Donuts store churned out $915,000 worth of coffee, donuts, cappuccino and Coolattas during 2005, a figure that was 8.3 percent ahead of 2004.
The $915k sales number is strong, and the margins have progressively increased, helped by nearly matching Starbucks’ coffee prices.
You seem to be assuming there are profit margins. Why is that? Please be aware that you need to go back in time and recalculate old numbers for current lease obligations. FuwaFuwaUsagi […]
Is this the same Paul W. Steinberg who failed to pay the taxes on his franchise operations to the extent of over $33,000 with the result that NY State had to go to the expenses of issuing a series of Tax Warrants against him. Go to: http://appsext8.d... […]
Quote from: FuwaFuwaUsagi on February 16, 2010, 05:03:15 PMThe Pundit writes:I was browsing through old posts and came across this one. It's a great one for all to read.My reply:Thanks for the kind words Ryan, but did you up... […]
The Pundit writes:I was browsing through old posts and came across this one. It's a great one for all to read.My reply:Thanks for the kind words Ryan, but did you up my karma points - NOOOO!!!!!! Cheap &(*%$&^ - LOL!!!Once a year, whether ... […]
The franchisor’s job of communicating with franchisees is not as easy as you might think. Some franchisees simply shy away from anything technology, some barely speak english, and some franchisees expect regular courtesy phone calls.
Most restaurants have or would live to have a thriving catering business to augment sales. A restaurant with a successful catering business typically increases sales sales by10% to 20%. 
A 26-year-old woman became the youngest franchisee in the Schlotzky’s system. Is she too young? You may think, until you read this:
Clever. Pay for a survey about Super Bowl eating habits, get free publicity, get your brand associated with “healthy” and “Super Bowl”.
Mobile pet grooming seems to be a franchise getting attention lately. I found 
Looks like the R&D team (or their consultants) at Dunkin’ Brands (Dunkin’ Donuts, Baskin Robins, Togo’s) 
What is one way to gather sample financial results for franchises when the franchisor refuses to make optional financial disclosures in their UFOC? Check out the classified ads of businesses for sale. While the classified ads will generally disclose very basic and very vague financial information, such as annual sales and net income or cash flow, you will start to get a picture of the going valuations and metrics used (such as a multiple of earnings before income, taxes, depreciation and amortization; or a multiple of free cash flow), all of which will help you understand the financial models and drivers for the business.
One of the franchise opportunities that I thought was interesting at the IFE last week was the Fun Bus.
a retail technology franchisors in the UK – Get some of your investment capital back if not satisfied within 12 months. It’s probably difficult to meet the “conditions” for this partial reimbursement and cancellation of the franchise agreement, but at least the idea of giving a franchisee an ability cancel with a small percentage of your money back within 12 months is a step in the right direction. The devil is always in the details, but by the time you get approval on your location, build out and are ready to operate, I would imagine most of your 12 months from signing the franchise agreement are over.
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