Franchise
Content
KUNAL GAURAV
10144E SAGARPUR JANAKPURI DBLOCK WEST DELHI110046. M-08802433161([email protected])
PROFILE
Enthusiastic Creative Jewelry Designer experienced in RHINO CAD designing, DIAMOND ASSORTING, Wax Modelling, Jewelry and GEM TESTING, ENAMELING, Costume Jewelry and STAMPING. RENDERRING & ILLUSTRATION techniques of all kinds of Jewelry piece like Necklace, Rings, Earrings. Established artist as a live PORTRAIT MAKER and sketching on demand with Charcoal Pencils.
EXPERIENCE
2012, June- Internship with P.C JEWELLERSRHINO CAD designing, Diamond Assorting, Manual Designing. 2011, December- took part in Enamelling Workshop, learnt CLOISSONE, LIQUID LAYER, VITEROUS ENAMMELING techniques, created 5 pieces of Jewelry. 2009, researched on Costume Jewelries, designed and created 27 pieces of Jewelries.
SKILLS
Good Renderring & Illustration skills, fast sketcher and a good observer. RHINO CAD Corel Draw PhotoShop Illustrator Enamelling Illustration & Renderring Stamping & Thappa Bangkok Jewellery
EDUCATION
Bachelor in Jewellery Designing. IMS-DIA,Noida. Graduation in 2013. Inter with Science 75% Saint Francis School.
LANGUAGES KNOWN
HINDI(native), SANSKRIT(vedic), ENGLISH(fluent).
FRANCHISE
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of Anglo-French derivation - from franc - meaning free, and is used both as a noun and as a (transitive) verb.[1] For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods that avoids the investments and liability of a chain. The franchisor's success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. Essentially, and in terms of distribution, the franchisor is a supplier who allows an operator, or a franchisee, to use the supplier's trademark and distribute the supplier's goods. In return, the operator pays the supplier a fee. Thirty three countries, including the United States, and Australia, have laws that explicitly regulate franchising, with the majority of all other countries having laws which have a direct or indirect impact on franchising • Franchising – • A marketing system revolving around a two-party agreement, whereby the franchisee conducts business according to the terms specified by the franchisor
Franchisee – An entrepreneur whose power is limited by a contractual agreement with a franchisor
•
Franchisor – The party in the franchise contract that specifies the methods to be followed and the terms to be met by the other party
FRANCHISING ARRANGEMENTS
THREE KINDS OF FRANCHISES
•
Trade Name Franchise – Grants the right to use a widely recognized name within a particular territory • True Value Hardware, Associated Grocers Inc (AGI), Century 21
•
Product Distribution Franchise (…Dealership) – Allows you to sell a specific, brand-name product in a specified territory • Snap-On Tools, Toyota
•
Business Format Franchise – – Provides an entire business plan, marketing, and operating system Guidance from the franchisor is ongoing; supervision & monitoring are continuous • Subway, McDonalds
* * * * * * * * * * * * * * * * * *
•
Single Franchise Owner – Owns the franchise rights to operate in just one business location or territory
•
Multiple-Unit Owner/Master Franchisee – Has the right to open several franchised outlets in a given area or territory
•
Piggyback Franchise
A retail franchise operation within the physical facilities of a host store
ADVANTAGES AND LIMITATAIONS OF FRANCHISE
•
Advantages – Probability of success • • • – Proven line of business Pre-qualification of franchisee Overall lower failure rates
Training • Franchisor-provided
–
Financial assistance • Loans & loan guarantees
–
Operating benefits • • • Location feasibility study Marketing assistance Quick start-up time
•
Limitations – Franchise costs • • • • – Initial franchise fee Investment costs Royalty payments Advertising costs
Restrictions on business operations • • • Hours of operation Restrictions on expansion/growth Franchisor only source of supplies
–
Loss of independence
QUESTIONS BEFORE STARTING A FRANCHISE
• • • • • • • • • • • •
Does the franchisor have an excellent reputation in the industry? Is the franchisor in partnership or any other legal relationship with another franchisor? If so, how will the franchisee be protected should that relationship fail? Is the franchisee required to do anything that appears questionable from a legal or ethical perspective? Under what circumstances can the franchisee or franchisor terminate the franchise agreement and what are the consequences to either party? Will the franchisor grant an exclusive territory? Is that area subject to reduction or modification? If so, under what conditions? Will the franchisor reveal the certified financial figures for one of its franchises and can those figures be verified with the franchisee? Will the franchisor provide a management training program, an employee training program, public relations and advertising support, or credit? Does the franchisor assist in finding a suitable location? What is the financial health of the franchisor? Can financial statements be verified? What is the track record of the franchise? Has the franchisor conducted an in-depth investigation of the franchisee to assure that he or she has the necessary skills and financial requirements to operate the business successfully? How much capital will be required to start and operate the business to a positive cash flow? Does the initial fee include an opening inventory of products and supplies? What do royalties pay for and how are they calculated?
RISKS UNDERTAKEN
• • •
Are the number of franchise units growing/staying constant/or declining? (Item 20 of the FDD) Has there been an increase in litigation between franchisor and franchisees during the last couple of years? (Item 3 of the FDD) Scrutinize the last three years’ audited financial statements as part of the FDD. – – Strong capital reserves, cash flows, and good profits? Are accounts receivables increasing? (…may be a bad sign if franchisees can’t pay monthly fees!)
• •
Are the same-store sales figures increasing, holding steady, or declining? Is the business susceptible to economic downturns? What is the attitude of the existing franchisees? Call them and ask… – – – How do you feel about the business? How have the past couple of years been? Knowing what you know now, would you do it again?
20 TOP FRANCHISE
1. Subway Submarine sandwiches & salads 2. McDonalds Hamburgers, chicken, salads 3. 7-Eleven, Inc Convenience stores
$84,300 - $258,300 $1,057,200 - $1,885,000
$40,500 - $775,300
4. Hampton Inn/Suites Hotels $3,716,000 - $13,148,800 5. Supercuts Hair Salons $112,600 - $243,200
6. H & R Block Tax preparation & filing $34,438 - $110,033 7. Duncan Donuts Coffee, doughnuts, etc $537,750 - $1,765,300 8. Jani-King Commercial cleaning $13,200 - $93,200 9. Servpro Disaster restoration & cleaning $127,300 - $174,700 10. AmPm Mini Market Gas/Store $1,835,823 - $7,615,065 11. Jan-Pro Commercial cleaning $3,300 - $54,300 12. Kumon Math Supplemental education $36,538 - $145,250
13. Stratus Building Commercial cleaning $3,450 - $57,750 14. Miracle-Ear Hearing instruments $122,500 - $570,000 15. Pizza Hut Inc Pizza, pasta, wings $302,000 - $2,100,000 16. Hardee’s Burgers, chicken, biscuits $1,182,000 - $1,583,500 17. Denny’s Inc Full-service restaurant $1,200,000 - $2,600,000 18. Jazzercise Inc Dance/fitness classes $2,980 - $38,400 19. Matco Tools Mechanics Tools & Equip $79,926 - $188,556 20. UPS Store Postal/Business Services $150,980 - $337,950
WHERE TO FIND BUSINESS OPPROTUNITIES
• • • • • • •
Attorneys Accountants Bankers The Wall Street Journal Liquidation auctions Business brokers The internet
Who is a broker?
When a business owner is looking to sell his business, he may turn to a business broker, who will look for a buyer for the business. Brokers typically charge one to 10 percent of the transaction price for their services.
WHAT TO LOOK FOR IN A BUISINESS
• • • • • • •
A business that had a broad scope that would insulate it from market downturns. A business with existing customers and vendors A low-tech business but with high growth A market that was not so large so as to encourage major players but not so small that the company couldn’t grow. Available float from suppliers; in other words, leeway in having to pay vendors. Manageable seasonality Cost cutting potential
FIND OUT WHY BUSINESS IS FOR SALE
•
Owner’s stated reasons for selling the business
– – – – – –
Poor health or illness in the family Wants to retire while he can still enjoy life Desires to relocate to a different section of the country Has accepted a position working for another company Wants to start a new business in a different industry Has to sell the business to generate funds to settle a divorce, lawsuit, etc.
Beware of sellers who may have priced the business at more than its worth, or who have “cooked the books” to make the business appear to be more attractive than it really is.
REAL REASONS WHY THE BUSINESS IS FOR SALE
• • • • • • • •
Larger companies are squeezing the firm out of the market Key employees have been leaving The industry is very mature and there aren’t any new ways or places to grow Competitors’ products (or services) are superior The business has developed a negative reputation in the community The firm is facing a pending lawsuit The business is just not profitable The physical facilities are old or obsolete and in need of major renovation/repairs
EXAMINING THE FINANCIAL DATA
• •
Review financial statements and tax returns for the past five years. Recognize that financial data can be misleading. – – – – Assets overvalued Expenses under-stated Income over-stated Unrecorded debts
•
Adjust asset valuations to reflect the true state of the business.
VALUING THE BUISINESS
•
Asset-Based Valuation – Estimates the value of the firm’s assets; does not reflect the value of the firm as a going concern.
•
Market-Comparable Valuation – Considers the sale prices of comparable firms; difficulty is in finding comparable firms.
•
Cash-Flow-based Valuation – Compares the expected and required rates of return on the amount of capital to be invested in the business.
NON- QUATITATIVE FACTORS
•
Asset-Based Valuation – Estimates the value of the firm’s assets; does not reflect the value of the firm as a going concern.
•
Market-Comparable Valuation – Considers the sale prices of comparable firms; difficulty is in finding comparable firms.
•
Cash-Flow-based Valuation – Compares the expected and required rates of return on the amount of capital to be invested in the business.
10144E SAGARPUR JANAKPURI DBLOCK WEST DELHI110046. M-08802433161([email protected])
PROFILE
Enthusiastic Creative Jewelry Designer experienced in RHINO CAD designing, DIAMOND ASSORTING, Wax Modelling, Jewelry and GEM TESTING, ENAMELING, Costume Jewelry and STAMPING. RENDERRING & ILLUSTRATION techniques of all kinds of Jewelry piece like Necklace, Rings, Earrings. Established artist as a live PORTRAIT MAKER and sketching on demand with Charcoal Pencils.
EXPERIENCE
2012, June- Internship with P.C JEWELLERSRHINO CAD designing, Diamond Assorting, Manual Designing. 2011, December- took part in Enamelling Workshop, learnt CLOISSONE, LIQUID LAYER, VITEROUS ENAMMELING techniques, created 5 pieces of Jewelry. 2009, researched on Costume Jewelries, designed and created 27 pieces of Jewelries.
SKILLS
Good Renderring & Illustration skills, fast sketcher and a good observer. RHINO CAD Corel Draw PhotoShop Illustrator Enamelling Illustration & Renderring Stamping & Thappa Bangkok Jewellery
EDUCATION
Bachelor in Jewellery Designing. IMS-DIA,Noida. Graduation in 2013. Inter with Science 75% Saint Francis School.
LANGUAGES KNOWN
HINDI(native), SANSKRIT(vedic), ENGLISH(fluent).
FRANCHISE
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of Anglo-French derivation - from franc - meaning free, and is used both as a noun and as a (transitive) verb.[1] For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods that avoids the investments and liability of a chain. The franchisor's success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. Essentially, and in terms of distribution, the franchisor is a supplier who allows an operator, or a franchisee, to use the supplier's trademark and distribute the supplier's goods. In return, the operator pays the supplier a fee. Thirty three countries, including the United States, and Australia, have laws that explicitly regulate franchising, with the majority of all other countries having laws which have a direct or indirect impact on franchising • Franchising – • A marketing system revolving around a two-party agreement, whereby the franchisee conducts business according to the terms specified by the franchisor
Franchisee – An entrepreneur whose power is limited by a contractual agreement with a franchisor
•
Franchisor – The party in the franchise contract that specifies the methods to be followed and the terms to be met by the other party
FRANCHISING ARRANGEMENTS
THREE KINDS OF FRANCHISES
•
Trade Name Franchise – Grants the right to use a widely recognized name within a particular territory • True Value Hardware, Associated Grocers Inc (AGI), Century 21
•
Product Distribution Franchise (…Dealership) – Allows you to sell a specific, brand-name product in a specified territory • Snap-On Tools, Toyota
•
Business Format Franchise – – Provides an entire business plan, marketing, and operating system Guidance from the franchisor is ongoing; supervision & monitoring are continuous • Subway, McDonalds
* * * * * * * * * * * * * * * * * *
•
Single Franchise Owner – Owns the franchise rights to operate in just one business location or territory
•
Multiple-Unit Owner/Master Franchisee – Has the right to open several franchised outlets in a given area or territory
•
Piggyback Franchise
A retail franchise operation within the physical facilities of a host store
ADVANTAGES AND LIMITATAIONS OF FRANCHISE
•
Advantages – Probability of success • • • – Proven line of business Pre-qualification of franchisee Overall lower failure rates
Training • Franchisor-provided
–
Financial assistance • Loans & loan guarantees
–
Operating benefits • • • Location feasibility study Marketing assistance Quick start-up time
•
Limitations – Franchise costs • • • • – Initial franchise fee Investment costs Royalty payments Advertising costs
Restrictions on business operations • • • Hours of operation Restrictions on expansion/growth Franchisor only source of supplies
–
Loss of independence
QUESTIONS BEFORE STARTING A FRANCHISE
• • • • • • • • • • • •
Does the franchisor have an excellent reputation in the industry? Is the franchisor in partnership or any other legal relationship with another franchisor? If so, how will the franchisee be protected should that relationship fail? Is the franchisee required to do anything that appears questionable from a legal or ethical perspective? Under what circumstances can the franchisee or franchisor terminate the franchise agreement and what are the consequences to either party? Will the franchisor grant an exclusive territory? Is that area subject to reduction or modification? If so, under what conditions? Will the franchisor reveal the certified financial figures for one of its franchises and can those figures be verified with the franchisee? Will the franchisor provide a management training program, an employee training program, public relations and advertising support, or credit? Does the franchisor assist in finding a suitable location? What is the financial health of the franchisor? Can financial statements be verified? What is the track record of the franchise? Has the franchisor conducted an in-depth investigation of the franchisee to assure that he or she has the necessary skills and financial requirements to operate the business successfully? How much capital will be required to start and operate the business to a positive cash flow? Does the initial fee include an opening inventory of products and supplies? What do royalties pay for and how are they calculated?
RISKS UNDERTAKEN
• • •
Are the number of franchise units growing/staying constant/or declining? (Item 20 of the FDD) Has there been an increase in litigation between franchisor and franchisees during the last couple of years? (Item 3 of the FDD) Scrutinize the last three years’ audited financial statements as part of the FDD. – – Strong capital reserves, cash flows, and good profits? Are accounts receivables increasing? (…may be a bad sign if franchisees can’t pay monthly fees!)
• •
Are the same-store sales figures increasing, holding steady, or declining? Is the business susceptible to economic downturns? What is the attitude of the existing franchisees? Call them and ask… – – – How do you feel about the business? How have the past couple of years been? Knowing what you know now, would you do it again?
20 TOP FRANCHISE
1. Subway Submarine sandwiches & salads 2. McDonalds Hamburgers, chicken, salads 3. 7-Eleven, Inc Convenience stores
$84,300 - $258,300 $1,057,200 - $1,885,000
$40,500 - $775,300
4. Hampton Inn/Suites Hotels $3,716,000 - $13,148,800 5. Supercuts Hair Salons $112,600 - $243,200
6. H & R Block Tax preparation & filing $34,438 - $110,033 7. Duncan Donuts Coffee, doughnuts, etc $537,750 - $1,765,300 8. Jani-King Commercial cleaning $13,200 - $93,200 9. Servpro Disaster restoration & cleaning $127,300 - $174,700 10. AmPm Mini Market Gas/Store $1,835,823 - $7,615,065 11. Jan-Pro Commercial cleaning $3,300 - $54,300 12. Kumon Math Supplemental education $36,538 - $145,250
13. Stratus Building Commercial cleaning $3,450 - $57,750 14. Miracle-Ear Hearing instruments $122,500 - $570,000 15. Pizza Hut Inc Pizza, pasta, wings $302,000 - $2,100,000 16. Hardee’s Burgers, chicken, biscuits $1,182,000 - $1,583,500 17. Denny’s Inc Full-service restaurant $1,200,000 - $2,600,000 18. Jazzercise Inc Dance/fitness classes $2,980 - $38,400 19. Matco Tools Mechanics Tools & Equip $79,926 - $188,556 20. UPS Store Postal/Business Services $150,980 - $337,950
WHERE TO FIND BUSINESS OPPROTUNITIES
• • • • • • •
Attorneys Accountants Bankers The Wall Street Journal Liquidation auctions Business brokers The internet
Who is a broker?
When a business owner is looking to sell his business, he may turn to a business broker, who will look for a buyer for the business. Brokers typically charge one to 10 percent of the transaction price for their services.
WHAT TO LOOK FOR IN A BUISINESS
• • • • • • •
A business that had a broad scope that would insulate it from market downturns. A business with existing customers and vendors A low-tech business but with high growth A market that was not so large so as to encourage major players but not so small that the company couldn’t grow. Available float from suppliers; in other words, leeway in having to pay vendors. Manageable seasonality Cost cutting potential
FIND OUT WHY BUSINESS IS FOR SALE
•
Owner’s stated reasons for selling the business
– – – – – –
Poor health or illness in the family Wants to retire while he can still enjoy life Desires to relocate to a different section of the country Has accepted a position working for another company Wants to start a new business in a different industry Has to sell the business to generate funds to settle a divorce, lawsuit, etc.
Beware of sellers who may have priced the business at more than its worth, or who have “cooked the books” to make the business appear to be more attractive than it really is.
REAL REASONS WHY THE BUSINESS IS FOR SALE
• • • • • • • •
Larger companies are squeezing the firm out of the market Key employees have been leaving The industry is very mature and there aren’t any new ways or places to grow Competitors’ products (or services) are superior The business has developed a negative reputation in the community The firm is facing a pending lawsuit The business is just not profitable The physical facilities are old or obsolete and in need of major renovation/repairs
EXAMINING THE FINANCIAL DATA
• •
Review financial statements and tax returns for the past five years. Recognize that financial data can be misleading. – – – – Assets overvalued Expenses under-stated Income over-stated Unrecorded debts
•
Adjust asset valuations to reflect the true state of the business.
VALUING THE BUISINESS
•
Asset-Based Valuation – Estimates the value of the firm’s assets; does not reflect the value of the firm as a going concern.
•
Market-Comparable Valuation – Considers the sale prices of comparable firms; difficulty is in finding comparable firms.
•
Cash-Flow-based Valuation – Compares the expected and required rates of return on the amount of capital to be invested in the business.
NON- QUATITATIVE FACTORS
•
Asset-Based Valuation – Estimates the value of the firm’s assets; does not reflect the value of the firm as a going concern.
•
Market-Comparable Valuation – Considers the sale prices of comparable firms; difficulty is in finding comparable firms.
•
Cash-Flow-based Valuation – Compares the expected and required rates of return on the amount of capital to be invested in the business.
