Video Overview It’s not uncommon for large investment firms to buy franchisors. These firms may own upwards of 20+ franchise companies. Jania Bailey, FranNet CEO, explains that even though a brand by itself might have a weak balance sheet, you can find solace in the fact that the firm behind it has the capital [...]
Video Overview A franchise system that is royalty self-sufficient is essentially generating enough income from franchisee royalties to cover their overhead. Royalty self-sufficiency happens at different times with franchisors. Some hit it at 50 units open, some at 100+. Beware of franchise systems that are dependent on another franchise sale to cover payroll. FranNet [...]
Video Overview FranNet CEO, Jania Bailey, examines what it means when you see “sold but not open” in a franchisor’s Item 20. Some franchisors sell multi-unit packs and they should have a development plan in place. When you see a lot of “sold but not open” reports in the FDD, this might be a [...]
Video Overview FranNet CEO, Jania Bailey explains that it is a requirement to have three years of audited financial statements in the FDD. The exception to that rule might occur when you are dealing with a new franchise brand that hasn’t been around for 3 years. In those cases, you might only see an [...]
Video Overview About 80% of franchisors now will have an Item 19 in their FDD, but it’s not required. It’s important to understand that a franchisor legally cannot tell you, “Here’s how much money you’ll make in our system.” Jania Bailey, CEO of FranNet, has a background in banking, so she implores you to [...]
Video Overview FranNet Consultant and Kentucky Market President, Amanda Berry discusses the importance of the optional Item 19 in an FDD. For some businesses, it doesn’t make sense to include it. For others, it’s quite necessary. Your local FranNet advisor can help you decipher whether or not this item is actually crucial to the concept [...]
Video Overview FranNet CEO, Jania Bailey, reviews the things you need to be aware of while looking at Item 7 in an FDD. At FranNet, we advise our clients to compare that initial investment estimate with existing franchisees that are in markets similar to yours. Important factors to consider are things like lease or [...]
Video Overview A lot of people get excited about a franchise brand, but fail to examine the financial health of that company. Jania Bailey, CEO of FranNet, warns against signing a 10-year contract with a brand that doesn’t have a strong balance sheet. You must feel confident that they will be around for another [...]
Video Overview A 200+ page Franchise Disclosure Document (FDD) can be intimidating. However, it’s crucial to your due diligence process and your success with a franchise system. Jania Bailey, CEO of FranNet, encourages you to whip out that highlighting pen and get to studying! Remember that a local FranNet Consultant is standing by to help [...]
Video Overview Part of franchise law is that the franchisor cannot make an earnings claim. Amanda Berry, FranNet Consultant and Kentucky Market President, explains why this law was put into place and how system-wide validation of a franchise can help you gain a better idea of what your potential could look like. [...]
