Archive for the 'Franchise Economics' Category

Reasons to Work For Yourself

August 28th, 2011

Buy A Franchise Unlimited, Buy A Franchise Seattle, Buy a Franchise Bellevue

Here are some excellent reasons and statistics regarding the benefits of working for yourself:

1.  Franchise Growth Expected
to Increase over 20% in 2011.

2. Lack of Jobs Equals Opportunities for Franchise Sales.

3. Franchise Expansion Equals Lowest Cost Expansion Model

4. New Financing Programs Franchise Purchase More Affordable Than Ever.

With the difficult economic landscape and even more trying employment
landscape, the franchise marketplace continues to build interest and relevance.
People who are losing work and being displaced by the downsizing of Corporate
America are all of a sudden forced into entrepreneurship.

Franchising allows people the benefits of business ownership while offering the
safety of a proven business system and a coach to provide guidance and
mentoring in starting a franchised business.

Franchising also allows an organization to expand quickly and develop a solid
brand through motivated entrepreneurship. For example, in 30 years, Subway
opened over 33,000 locations!

New Programs are supporting franchise growth, franchise financing for Military
Veterans, First Time Business Owners and Woman-owned businesses. The United
States is making a shift back towards small business and franchising is the
vehicle that allows people to accomplish this goal and take control of their
future.

There are over 3,000 franchises on the market today for you to choose from – we
can help navigate the process and help you find the right business model for
your needs and personal goals.

Buy A Franchise Unlimited, Buy A Franchise Seattle, Buy a Franchise Bellevue

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Franchise Businesses Protect Yourself from Fraud

June 21st, 2011

(Buy A Franchise Unlimited, Buy A Franchise Seattle, Buy A Franchise Bellevue)

The Fraud Triangle :

Pressure
Pressure in this case means financial pressure. This can be caused by any number of things including medical bills, drug addiction or excessive lifestyle costs. Often the person committing the fraud feels they must solve their problem on their own and cannot turn to legitimate solutions for help.

Opportunity
Opportunity is when there is the ability to commit fraud. This is created by weak internal controls, poor oversight by management, failure to establish procedures to detect fraud or other factors. Of the three factors in The Fraud Triangle, this is the one that businesses have the most control over.

Rationalization
Most of us have a strong sense of right and wrong and fraud (stealing) is wrong. How does someone committing fraud justify stealing? They rationalize it through various ways. The perpetrator may believe they are justified to save a family member, especially a child. The fraudster may think they will lose everything if they don’t get the money. Often, the stolen money is thought of as loan and the person committing the fraud has every intention to pay it back. Often a dissatisfied employee believes they are owed something because they perceive they have been treated unjustly. And occasionally, a person has just lost all sense of right and wrong.

The Trust Factor
Owners of closely held businesses often don’t set up proper internal controls. Frequently, real segregation of duties is impossible–there just aren’t that many employees. Business owners console themselves with people they think they can trust in key positions. Let me say it clearly: Trust is not an effective fraud prevention strategy. Business owners think “It can’t happen here.” They are wrong. Internal frauds are always perpetrated by trusted employees. And business owners always think “I’d spot it” if fraud occurred. The truth is, they wouldn’t. Fraud is fairly easy to hide and people are amazingly creative in their schemes.

Consequences
The consequences of fraud on a business include losses, of course. But there are also creditor and vendor impacts, HR issues, legal issues, insurance repercussions, and negative public relations. In the end, it can mean the failure of the business.

The information in this article was provided by David Lightfoot of B2BCFO.

 

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Buy A Franchise – New IRS 1099 Reporting

October 7th, 2010

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New 1009 Reporting Requirements to Impact Franchise Businesses

On Wednesday, the International Franchise Association called for the repeal of expanded reporting requirements for small businesses enacted as part of the health care reform bill in comments submitted to the Internal Revenue Service.
 
“The immense scope of this new information reporting requirement will undoubtedly impact the operations of small franchised businesses and lead to serious unintended consequences,” said International Franchise Association’s  Senior Vice President of Government Relations & Public Policy David French.  “The proposed rules are very broad and afford no opportunity to minimize the burden of these requirements. Therefore, the IFA strongly believes that the only solution for franchise business owners is to repeal these new reporting requirements before they are scheduled to go into effect.”

Under the new health care law, The Patient Protection and Affordable Care Act, beginning in 2012, businesses must report all transactions that involve property and services, and which aggregate more than $600 in a year.  These transactions will trigger the requirement to file a Form 1099 with the IRS and furnish taxpayer identification numbers (TINs) for the businesses and persons involved.  Currently, businesses are only required to file Form 1099 for independent contractors they use in their businesses.  The new rules expand the requirements to cover all goods and services purchased for the business.

The International Franchise Association says that with the amount of new information the IRS will receive, small businesses are likely to face a heightened level of scrutiny from IRS examiners.

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Buy A Franchise – Basic Business Concepts Part 3

September 27th, 2010

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Time

Any desired commodity, currency in the case of this discussion, increases in value as it increases in scarcity. Although we were all hoodwinked into believing that the computer revolution of the 1980′s was going to make us so efficient that we would have gobs of time on our hands, I don’t think there are too many converts to that ascribed belief any longer.

When we discuss our clients’ need for more time in their respective businesses, during our training class for all new Schooley Mitchell Franchisees, I always relate the following story.

The scene was at a National Franchise Convention waiting for the kick-off speaker to begin the proceedings. There were several hundred Franchisors sitting in the convention hall, when from the back of the room this guy entered, flipping a head of lettuce up and down. He walked right up the middle aisle continually flipping the leafy orb. There were a few snickers because it was apparent to some that an inmate had gone over the wall at the local asylum.

With a determined look, and a single purpose in mind, this guy trotted right up to the front of the room, climbed onto the stage, and leapt behind the podium. With a greatly threatening look, he bellowed, “Somebody in this room tell me why this head of lettuce represents the most important concept that you must understand for your business to survive in the next decade!” He was completely fired up, spittle was flying, and he was turning red. At this point half the room was convinced of the asylum scenario, while the other half realized that this was actually the guest speaker.

Gliding down a bit from his commando high, he said, “O.K., I want to ask you a couple of questions.” He went on to say, “I want you to think back ten years, picture in your mind your local grocery store, and tell me how many square feet were dedicated to heads of lettuce at 79 cents each.” After a bit of a pregnant pause, someone in the audience yelled out, “30 square feet.”

Our now calm and seemingly rational speaker now asked, “O.K we can accept that answer, so now flash forward ten years to today and somebody tell me how many square feet are dedicated to heads of lettuce in today’s grocery store at 89 cents.” The answer came back as ten square feet.

The next question was, “Now somebody tell me how many square feet are dedicated to prepared salads at $4.95 each.” The revelation was clear. Yes, that’s where the other 20 square feet went – in fact, the current stores may even use more than 20 feet! The crowd was elated that they had solved the riddle.

Then in a very quiet, almost ominous tone he asked, “So what is that about and why does it matter so much to your business?”

His message was of course that it was about time. We are willing to pay good money, already conceded to be a valuable currency, to save ourselves time. We will pay a premium to avoid cutting carrots and cucumbers, and in my mind I plead guilty to the act.

In fact, he said, “Time is the currency of today’s economy, and you need to figure out how you are delivering time to your customers, or you will not thrive.”

The story hit hard, made a strong and valid point, and I have been thoroughly convinced of the importance of time as a currency of trade ever since. The challenge of course is to figure out how to deliver time to our customers. Before we can do that we have to figure out how we can make it clear to our customers that we will, in fact, help them to gain time through our wares.

Money and time are certainly the most recognizable and widely accepted of the currencies of trade. However, it is my belief that we also trade in Security, Knowledge and Prestige. These currencies will be reviewed in more detail in a subsequent release, but for now, suffice it to say that we need to feel secure, not only physically, but also that we have made the right decisions. We also crave knowledge. In fact, we live in a knowledge-based society now. The vast majority of people trade for prestige as well. Otherwise, why would we wear what we wear, drive what we drive, live where we live?

Money, time, security, knowledge and prestige make up the suite of Currencies of Trade. So the challenge is how to deliver these items, and how to make our customers aware of how we deliver them.

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Buy A Franchise – Economic Franchise Report

September 18th, 2010

   

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Franchises with paid employees make up 10.5% of U.S. businesses, according to the Economic Census Franchise Report. Keep in mind that this number does not include the millions of Franchises that have no employees.  The report also notes franchise businesses employ 7.9 million workers and account for sales of nearly $1.3 trillion. “We are pleased that the U.S. government has recognized franchising as a significant business model,” International Franchise Associations’s Alisa Harrison said. “Census officials told us they received a very good response to their franchise questions and so we feel we have a fairly accurate snapshot of franchises with paid employees.”

This information is gathered on an annual basis, and is very important to understand when analyzing the U.S workforce.  The numbers continue to show and indicate that the Franchising modes is a very significant contributor to U.S. GNP.

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