Joel Libava

The recession has hurt the franchise sector, and because of that, I predict that the industry as a whole will be getting extremely creative in 2009, when it comes to attracting prospective franchise owners…

A few franchisors are already headed that direction:

• Papa John’s has lowered some of their food pricing for current franchise owners, and have even absorbed some of the high diesel fuel costs that they were passing on to franchisees for food deliveries.
• Pet Butler has decreased their franchise fee for new franchise owners.
• Emerald City Smoothie is offering to give new franchise owners a free kiosk, with their purchase of a free standing store.

Is this the start of an industry-wide trend? Will franchisors have to risk upsetting some of their current franchisees, by offering discounts to new franchisees? read more

Statistics have been thrown about for years concerning the safety of investing in a franchise, vs. investing in a non-franchise start-up business.

“I abhor averages. I like the individual case. A man may have six meals one day and none the next, making an average of three meals per day, but that is not a good way to live.”
~Louis D. Brandeis

Was Louis Brandeis saying that statistics are just a waste of time? I think not. But his quote may cause some to question the validity of doing hours upon hours of statistical research in whatever subject they are trying to gather more information about, which in this case is franchise ownership.

Published franchise success rates run start at a low of 55% for retail franchises, up to a high of 95% industry wide. But just where did those statistics come from? Look at the various sources to see how widely the numbers vary.

If you are looking to get into a business of your own, wouldn’t it behoove you to take a look at a business model that has a 95% success rate? The answer is no! That is because there was never any such statistic like that published by a reputable source.

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If you have recently joined the ranks of “The Downsized,” undoubtedly doing something entrepreneurial has crossed your mind (at least for a millisecond). But right now?

If you had the power to choose when you could be downsized, late 2008 probably would not be your 1st or even 2nd choice. Your 401k plan is probably looking uglier than this Almiqui. The U.S. unemployment rate is hanging tough at about 6.5%, and you are just not getting any younger.

If you are a newbie to the world of corporate downsizing, the emotion that is probably winning out in your “Top 10″ list is the fear emotion. Being out of work can certainly be frightening, and if you don’t have at least some fear, you either have a significant net worth, or are in a state of denial.

If you have been through a corporate downsizing before, then a feeling of déjà vu has probably settled into your psyche. All of those wonderful emotions that coincide with a job loss are re-surfacing, and you don’t like them one bit.

There is one way to avoid experiencing the emotions that you are feeling, currently. Become a small business owner. Get some control back in your life.

I believe in the franchise business model for a variety of reasons, including: read more

The food related segment of franchising is the largest of all franchise types. From fairly upscale restaurant chains, to bagel shops, to coffeehouses, to fast food restaurants, it is a huge segment, and one that pumps a lot of money into our economy.

I was reading a story over at Smart Money online, a couple of weeks ago, and something I read caused me a little concern;

“Sharon Zackfia, a restaurant industry analyst, said in an investor note Friday morning that GE Capital has halted new franchisee franchising, although it will continue to honor pre-existing financing agreements.”

That is certainly an interesting development. Even more interesting was this story in AdAge that has to do with McDonalds franchisees getting loans for upgrades:

“Tightening credit conditions are crimping plans for marketers as diverse as giant General Motors Corp. and relatively small household-products company Method, have prompted Bank of America to halt loans to McDonald’s franchisees. They need the capital to frantically build coffee bars in the chain’s 14,000 locations for what was planned to be an April coffee introduction.”

Folks, this is all about lattes. Tasty, high profit, lattes. read more

As I was about to do a presentation on franchise ownership late last year, a lady came up to me and asks:

“I know it’s probably too late, but my husband and I invested in an advertising and marketing related franchise earlier this year, and we really don’t like it. It is just not right for us. I know that I probably should have contacted you about investing in a franchise before we purchased this one, but can you help us get out of it?”

I rolled my eyes (invisibly, of course she did not see me roll them!), and asked her what franchise she had invested in, and why it was not all of a sudden, “right” for them. (I thought that would be a good place to start.)

She said that “it is a franchise in which we produce a nice little local print publication and sell advertising space to small businesses in our area for our revenue. It is really a nice publication. We just don’t like to sell the ads. The businesses we are calling on don’t seem too interested in purchasing ads in our publication.”

HUH?

I then started my quiz: read more

With over 3,000 different concepts in franchising today, there are some that should never have been franchised.

Here is my short list of questionable franchise concepts:

1. Lice Franchises. For those of you who are scratching your heads (literally), some folks in the Lone Star state are licensing a franchise called, “The Lice Squad.” A Canadian company feels that lice infestations really inconvenience families enough to require a systematized (a franchise system) approach to getting rid of the little buggers.

Are there enough lice out there to turn this into a million dollar franchise for someone?  I know my vote, but I’ll let you be the judge.

2. Help for Hectic Lives by Making-Your-Life-More-Hectic-Franchises.  My family is a dual income one. read more

Your cash register is ringing. You added 2 more employees last month. Your second location is almost ready for a full time manager.Your regular customers are asking you when you’re going to “franchise” your business. Should you? read more