Paradigm 21: Franchising FAQs

Frequently Asked Questions

1. What are the advantages and benefits of franchising?
     Please refer to the 'Are you franchise-able?' for details on this question.

2. What makes my business Franchise-able?
     - A good business concept. Nothing more complex than that.
     - A structured, systemized operation.
     - Easily duplicated and teachable to the average individual within a reasonable time.
     - Showing a profit and potential for future growth with good return on investment.
     - Capable of being sold in most all markets without massive modifications.
     - Management demonstrates good leadership, management skills and persona
       or recruit people who do.
     - Differentiation. Something unique about system, processes, procedures that sets
       you apart from the crowd and defines your success. Something that others cannot
       easily imitate.

3. My business is not that unique...is it still Franchisable?
     Is Starbuck's? Krispy Kreme? KFC or McD's unique? Not really. Basically they all sell
     food that anyone could make. What sets them apart is a well-structured, well-defined
     business model and system that receives constant attention and improvement.

4. How do I know my Franchise will attract buyers?
     There are certainly no guarantees in business. However, if you develop a system that is
     not easily duplicated, an identifiable brand, provides outstanding initial and ongoing
     support, have great products or services and demonstrate that you are partners with an
     honest interest in their success -- new franchisees will join the system to benefit from the
     network synergies.

5. What can I do to prepare my business for Franchising?
     Designing a business with a proven, systemized structure is essential. No system is
     perfect, so most companies continually modify and improve their systems to ensure
     franchisee success.

6. How many Franchises will I sell per year?
     No one answer for this question. However, research by DePaul University has shown
     that new franchisors sell on average 9 units in year one, 11 in year 2 and 13 in year three.

7. What makes a good Franchisor?
     Of course all the ingredients previously discussed are key to launching a successful
     franchise system. But franchisor management is essential to the initial and ongoing
     success of the network.

     Franchisees need to feel they are important and that the franchisor cares about their
     success by providing: synergistic attitude, good leadership skills, constructive criticism,
     mentoring and coaching and positive support at all times.

     The franchisor must always view the franchisees as partners and recognize they are the
     key to the network's success.

8. What makes a successful Franchisee?
     - Committed to being successful;
     - Ability to follow directions, not a totally independent thinker;
     - Enjoys being part of a team - teamplayer;
     - Entrepreneurial spirit with a 'can do' attitude and demeanor;
     - Open-minded, friendly personality and people person;
     - Good leader and manager with good communications skills;
     - Not easily stressed out or discouraged;
     - Sales-oriented attitude;
     - Having sufficient funds to cover any unexpected events or slow times.

9. Are Franchisee royalties better than company-owned profits?
     One is not better than the other. But comparatively, the benefits of franchising in most
     cases outweigh expansion by company-owned units.

     Franchise Benefits: quicker expansion, reduced risk, using others capital to expand,
     instant product distribution system, owner-operators with a vested interest in success
     and constant brand enhancement by virtual of the network synergies.

10. Will the standards and identity I've created be sacrificed in a Franchise?
       Your model and brand will not be damaged if you have developed a well-defined
       structure, thoroughly train new franchisees on the system, provide consistent, on-going
       training and support for franchisees and contantly monitor their operations to coach and
       provide expert guidance.

11. Am I responsible for a Franchisee's debts should they default?
       No. Franchisees are separate, independent legal entities responsible and liable for
       their own debts. Providing excellent support and guidance will quickly identify potential
       problems and help the franchisee resolve them before they become insurmountable.

       Still not sure if you're franchise-able? Your question not on the list?
                            No problem, feel free to Contact Us.