A franchise system that achieves royalty self-sufficiency is essentially earning sufficient revenue from franchisee royalties to cover its operational costs. This milestone varies among franchisors,...
The Franchise Blog
FDD Item 20: Signed But Not Open
FranNet's CEO, Jania Bailey, delves into the significance of encountering the phrase "sold but not open" within a franchisor's Item 20 disclosure. She highlights the importance of scrutinizing this...
Requirements for Financial Statements the Franchisors Must Provide in the FDD
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...
The Importance of the Item 19 in the Decision Making Process
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...
FDD Item 19: Financial Performance Representations
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...
FDD Item 7: Advising Clients on Initial Investments
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...
Why is it Important to Understand the Financial Health of the Franchisor?
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...
Importance of the FDD
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,...
Funding a Franchise
Most people don’t have $50k lying around to invest in a business, so many will turn to small business loans. Amanda Berry, FranNet Kentucky Consultant and Kentucky Market President, says that buying...
Cost of a Franchise
So how much does a franchise really cost? Amanda Berry, FranNet Consultant and Kentucky Market President, explains why you need to look beyond the franchise fee and dig deeper into Item 7 of the...