n the mid 1970’s when I began consulting with business owners there were only a hand full of consultants who specialized in franchise development. Back then, the Federal Trade Commission’s Rule 436 had not even been active. The only regulations on franchising were in fifteen (15) states that adopted the Uniform Franchise Offering Circular (UFOC) where a franchisor could not offer a franchise within their jurisdiction without prior registration and review of the document. Today a Franchise Disclosure Document (FDD) is required in all regulation states as well as nationally. This document, depending on the actually business system and opportunity being described may be anywhere from 40 pages upwards to a 100 pages. There are 23 basic items that MUST be disclosure with numerous sub items.

Before the FDD can be prepared, a franchisor needs to have the proper business structure or entity created along with a name that can be trademarked federally through the United States Patient and Trade Mark Office in Washington, D.C. The trade name is the corner stone of the franchise business. As the name is branded regionally and nationally, more valuable the franchise becomes. Brand name recognition by the general public is what all franchisors strive to obtain and achieve over time.

As you can already see, a consultant teaches, informs and prepare the new franchise client for franchising. The more knowledgeable the franchisor becomes the better equipped the company is to make the proper decision related to franchise. One of the most important factors in franchising is the franchise system. Developing a concept or existing business into a franchise system requires many decision. And for every decision to be made there may be multiple options to consider.

Profran Consultants uses a 21 page questionnaire to learn particular facts about the business concept. Most young franchisors discover that during the franchise development process, they learn things about many aspects of their business never before considered. Often a young franchisor will state I would have never considered all of the options available to me had I not decided to franchise my business.

An experienced and seasoned franchise consultant can make the transaction from business owner to franchisor exciting, enjoyable and effortless in most cases. One of the most common questions is, “don’t I have to go to an attorney to develop a franchise?” My answer often surprises most potential clients when I say, “Not in the early stages of development.” Unless the attorney is a franchise business consultant in addition to being an attorney, the answer is no. Attorneys are trained to provide legal advice and prepare legal documents. How can an attorney assist or help you when there has been no evaluation of your business provided or business system developed? Many franchisors have waste time and money having an attorney prepares the required document before the franchise system has even been developed. There is a time and place for the attorney involvement but not necessarily at the beginning. One of the most important tools in the franchise system is the franchise operations manual. Contained within the FDD is the actual franchise agreement that franchise candidates sign. The franchise agreement refers to the operations manual in many places therefore how can an attorney prepare an agreement without knowledge of the operations of the business contained in the operations manual?

As a franchise consultant I’ve consulted with thousands of business owners who were considering franchising their business. The majority of those were recommended NOT to franchise because of one or more factors. But over 800 over the past 30 plus years were encourage to proceed with their dream to franchise. Business and management evaluation is extremely necessary in making the decision to franchise. Franchise is not for every business or everyone.

Choosing a bad name may not make or break your business, but it sure can make the road ahead rockier, especially when it comes to branding and believability. Before you commit, first ask yourself: Is it easy to say? Is it easy to spell? And is it easy to see?

Your name is the first thing potential clients will see or hear, so it had better leave a lasting impression.

Where do you start? First, pick a name that’s memorable. New businesses come and go, but it’s the ones whose names stand out that get new clients.

Think about it. The harder the name is to say or spell, the harder it is to find in the phone book or on the Internet. Plus, if people are afraid to mispronounce it, you’ll miss out on all that good word-of-mouth public relations.

Next, pick a name that gives a clue as to what your business does. Just because your favorite flower is a daisy doesn’t mean you need to incorporate the word daisy into the name of your auto body shop.

Sure, business names are personal, especially with small firms. But too many businesses focus their branding on what they like rather than the tastes of their target audience.

Also, try to stay away from trends. Pick a name that is timeless and branding that will appeal across the board.

If you’re running a day care center, for instance, you’re marketing to the child’s parents, siblings, grandparents and community. Choose a name that is gender-neutral, age-neutral and location-neutral.

What’s the long and short of it? The longer the name, the harder it is to say — and type, when you’re thinking about Web domain names. Long names tend to get abbreviated or shortened in marketing materials and Web addresses, which ultimately leads to confusion and frustration.

Think about Google, Target, Kodak, Pepsi, Ingles, Belk and Taco Bell. Just about all the great company names and products are short and easy to say, usually one word or two.

What about personal names? They can add credibility to your company, like McDonald’s, L.L. Bean and Williams-Sonoma. But in my book it’s better to pick something catchy that lends well to a great logo and great image design. Think Amazon, Yahoo, Krispy Kreme and Juicy Couture.

So, what’s next? Stake your claim. Register your assumed name or file your incorporation papers right away. Get your domain name from services like www.godaddy.com or www.dotster.com. And start using either TM (trademark) or SM (service mark). You don’t have to register them to use them.

For more protection, the cost of purchasing a U.S. trademark or service mark is a drop in the bucket compared with trying to defend it later, especially if you’re thinking about nationwide growth or franchising.

When is a license not just a license, but also a regulated franchise?  If you are expanding your business through the authorized use of your trademarked products or services, you may think: “I don’t want a franchise, just make it a license agreement;” or “A trademark license isn’t a franchise is it?” or “I want to set up dealers, those aren’t franchises, are they?” This article tries to answer these questions.

Franchise laws have been applied to contractual relationships that to some appear far removed from the traditional franchise industries, including software licenses, merchandising licenses, and Internet technology licenses.

Franchising as an identifiable form of business began in the 1950’s with such chains as McDonald’s, Holiday Inn, H&R Block, Century 21, and KFC. Growth accelerated in the late 1970’s, and shows no sign of slowing. With the growth of franchising has come government regulation, to curb perceived industry abuses. In the U.S. about 40 states and the Federal Trade Commission (“FTC”) now regulate franchise offers. continue

Rule 504

This rule is considered by many as the perfect answer for the company just starting out that needs to raise less than $1 million but can’t afford to go through the whole SEC registration process. Until they grow to a point where they can afford it, Rule 504 offers such companies an out:

• An exemption to raise up to $1 million
• No disclosure criteria
• Few general solicitation and resale restrictions
• No limit as to the number or type of investors

Actually, Congress’s original intent in 1982 for Rule 504 was to “set aside a clear and workable exemption for small issuers to be regulated by state blue sky requirements, but by the same token, to be subjected to federal anti-fraud provisions and civil liability provisions.” Rule 504 exemption is provided for almost any type of organization, including corporations, partnerships, trusts, or other entities. However, it is not applicable to companies already reporting to the SEC (subject to the ‘34 Act) or investment companies. continue

The decision to purchase a franchised business can be an exciting and rewarding decision.

There are many types of franchise businesses offering you new opportunity, independence, growth, challenge, a comfortable income, prestige and security.  However, many important questions need to be answered, both by you and by the franchisor before you make a decision to buy.

There are over 2,500 franchise businesses being offered throughout the United States today.  The right one for you will depend on many factors such as the franchise fee; start up costs of the business, your financial goals, available business locations, business hours and experience required.

One important thing to know is that franchising is almost a sure thing.  Less than 4% of all franchises fail according to the U.S. Department of Commerce.  That is amazing because the failure rate for non-franchise businesses is as high as 85%. continue

Thinking of getting into your own business? Don’t know where to begin? Don’t know what type of business or the costs associated might be?

Profran Consultants are profession franchise consultants who understand what you are experiencing and know how confusing the process might be for some. Our consultants want to make the experience a pleasant one by educating you in the procedures of search for the right franchise, understanding what a franchisor wants from you and coaching you in the process that allows you to have a better chance of succeeding in by accepted. Most people don’t realize that franchises are not sold but awarded. You cannot buy a franchise, but instead be licensed to operate the business under the franchisor’s trade name and marks. continue

With all of the investment opportunities that are available, how does a private investor make the selection of who, what and when to invest in a particular project? If you speak with an average private investor and ask how they made the decision to invest, they will tell you they rely on their instincts as much as their due diligence. Of course they investigate management looking at past history, achievements, successes and accomplishments along with the overall business concept that must make sense are taken into consideration. Paying attention to the benefits of investing is extremely important too. But it’s that feeling in the pit of the stomach that seems to cause the decision. Does it feel good?

All private investors are looking for that “home run” investment opportunity that will provide them with a return on investment of ten times or more the initial investment within a short period of time. How often does a home run occur? More often than most private investors realize. continue