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Joe Barbat on Integrity In Franchising

May 20th, 2011 Comments off

Joe Barbat CEO of Wireless ToyzPartnership Integrity

Partnerships can pose another type of legal problem. Many new entrepreneurs take on partners to get started. This is a great way to share costs. But be sure to take time before you sign the franchise agreement to protect you and your partner:

  • Put the partnership in writing
  • Define each person‟s role in writing
  • Establish buy/sell valuation rights and terms in writing in case of a future dispute

Do you notice a theme? Put it in writing. This may require an attorney‟s help, but it will be time and money well spent. Another thing to write down is your goals. It helps to have a shared vision of the company and expected growth.

Franchisee story: Two young cousins wanted to open a retail business together. They convinced an uncle to put up the funds for their “partnership.” Since they were family, the uncle and his nephews agreed to the deal with nothing more than a handshake. At first, everyone was very excited. Everything started off great, the cousins even moved in together. Then they got mad at each other — so mad that one moved out in the middle of the night. Then the other got mad and locked the door to the business. After a few days of hoping they would work things out, the franchisor declared them in default of the Franchise Agreement. There were no winners here.

Management Integrity

More important is the integrity of the franchise brand’s management team. Management integrity is important when things don’t go exactly as planned. You can learn about a management‟s integrity by asking about previous difficult situations and how the management team reacted to solve each situation. If you can‟t get answers from the franchisor, ask other franchisees for their insight. This will enable you to understand how the management will solve future challenges and problems that will arise.

About Joe Barbat

As a leader in the wireless retail industry, Joe Barbat founded Wireless Toyz in 1995 and grew the organization to a multi-location national franchise.  Now Joe Barbat focuses on providing quality information and advice for franchise candidates that are interested in creating a better life through owning a franchise.  Questions, thoughts, and comments about your franchise search experience are fielded by visiting the Ask Joe Barbat section of the website.

Joe Barbat “Don’t Skip These Steps” Franchise Tips

May 20th, 2011 Comments off

Joe Barbat CEO of Wireless ToyzBased on my personal experience when working with franchise candidates, I strongly recommend that when you are researching franchise brands and opportunities, DO NOT SKIP THESE STEPS:

  1. Ask the franchisor’s representative specific questions about the business.  This means that you should create a list of the questions that are important to you and take your time when contacting the franchisor to ensure that your questions are answered thoroughly.
  2. Thoroughly read the Franchise Disclosure Document (The FDD is the information that the franchisor is legally obligated to provide prior to the signing of a franchise agreement. The structure is dictated by the Federal Trade Commission to ensure uniformity.)
  3. Interview current franchisees (They are listed in the FDD) regarding their experience with the franchisor.
  4. Interview former franchisees (They are listed in the FDD) regarding their experience with the franchisor.
  5. Visit as many current franchise locations as possible and conduct an on-site assessment to see if the day to day operations are a fit for your lifestyle.
  6. Read articles in business publications about the franchise, the franchisor and its franchisees.
  7. If the franchise is publicly traded, review the annual report.
  8. Check to see if the franchise has been reviewed by a credible third party, such as Entrepreneur Magazine’s Franchise 500, FranSurvey, Franchise Business Review or Inc Magazine’s Inc 500, and compare the results.

You want to make an informed business decision about the business that you are intending to purchase. Your research will help you calculate your opportunity cost: the risk you take with your investment capital, your time, and your potential to derive an income from another job or business. Not only that, you want to secure the value of your assets for the time in the future when you may wish to sell the business.

About Joe Barbat

As a leader in the wireless retail industry, Joe Barbat founded Wireless Toyz in 1995 and grew the organization to a multi-location national franchise.  Now Joe Barbat focuses on providing quality information and advice for franchise candidates that are interested in creating a better life through owning a franchise.  Questions, thoughts, and comments about your franchise search experience are fielded by visiting the Ask Joe Barbat section of the website.

Joe Barbat Tips For Being A Happy Franchisee

May 20th, 2011 Comments off

Joe BarbatIt’s no secret that planning and preparation offer the greatest advantages for success in business.  As a candidate to own a franchise you need all of the assistance that you can handle during the evaluation, selection, and then operation phase of your new business.  Below are a few good resources that can offer insight on specific topics to help make your franchise experience a happy one:

Guiding Principles for Franchisees

What are the guiding principles for franchisees?  What should the be thinking about on a day to day basis?  Joe Barbat goes into a deeper explanation on these topics in his Franchise Advice post.

Franchise Ramp Up Time

Quite often, franchise candidates forget the time needed to properly open and ramp up a franchise to full operating capabilities.  Joe Barbat explains some of these steps in detail and how to best Ramp Up Your Franchise.

New Franchise Investment

What are the factors that go into the final investment for purchasing and opening a franchise?  If you are looking for a checklist then this blog post from Joe Barbat about the Opening Franchise Investment Checklist is just for you.

Franchise Due Diligence

What are the steps needed to begin evaluating a franchise to see if it is a fit for you?  Consider following these Franchise Due Diligence Tips as recommended by Joe Barbat.

About Joe Barbat

As a leader in the wireless retail industry, Joe Barbat founded Wireless Toyz in 1995 and grew the organization to a multi-location national franchise.  Now Joe Barbat focuses on providing quality information and advice for franchise candidates that are interested in creating a better life through owning a franchise.  Questions, thoughts, and comments about your franchise search experience are fielded by visiting the Ask Joe Barbat section of the website.

 

Joe Barbat Franchise Financing Worksheet

May 13th, 2011 Comments off

Joe Barbat CEO of Wireless ToyzOne of the main reasons that business start-ups fail is that they are under-capitalized.  This reason is also true regarding the failure of new franchise businesses.

Franchisors genuineness want you to succeed.  Because of this reason they are going to inquire about your personal financial history and resources during the evaluation process. Most will require some form of proof in this area.

The thought of having your personal financial history evaluated by another party may discomforting.  Don’t allow this one step in the franchise process to cause you to lose your momentum.  Very much like rappelling past a jagged portion of a mountain, the process of evaluating and communicating openly about financial matters for a new business will become very common for you over time. One critical aspect to keep in mind regarding the financial evaluation process is that its simply information and not a judgment about or against you personally.

Consider downloading and utilizing the Joe Barbat Planning For Success-Adequate Franchise Capital as you begin to explore the required funding for your new business.

About Joe Barbat

As a leader in the wireless retail industry, Joe Barbat founded Wireless Toyz in 1995 and grew the organization to a multi-location national franchise.  Now Joe Barbat focuses on providing quality information and advice for franchise candidates that are interested in creating a better life through owning a franchise.  Questions, thoughts, and comments about your franchise search experience are fielded by visiting the Ask Joe Barbat section of the website.

Joe Barbat on 5 Franchise Warning Signs To Avoid

May 12th, 2011 Comments off

Joe Barbat CEO of Wireless ToyzNo brand is perfect, and knowing the warning signs to avoid may help you to avert a disaster with a franchise opportunity later on in the process.  A combination of any one or two items below may not be enough to scare you away, but finding three or more may cause you to look elsewhere.

1. The very first call sounds like a pressure sales pitch: You do not want to be talked or forced into buying a business.

2. The website does not work: If a franchise marketing website has dead links or incorrect information, it is a sign that the company has not made a commitment to franchising.

3. Fees, fees, fees: Are there fees beyond the royalty, ad fund and IT fees?

4. Validation calls regarding the franchise opportunity produce lukewarm results at best.  For example, the three best questions to ask a franchisee already in the system are:

  • Did the franchisor deliver on what was promised?
  • Knowing what you know today, would you do this again?
  • Would you recommend to your friends and family to join this business?

5. You feel something is wrong when you visit the corporate office.  Your instinctive reaction is the #1 indicator as to whether you should join the franchise.

Now, there are other barometers with which to judge a franchise opportunity.  However, if you are seeking to build a system for yourself that will allow you to quickly evaluate and qualify new franchise opportunities, then the suggestions above should definitely be in your toolbox.

About Joe Barbat

As a leader in the wireless retail industry, Joe Barbat founded Wireless Toyz in 1995 and grew the organization to a multi-location national franchise.  Now Joe Barbat focuses on providing quality information and advice for franchise candidates that are interested in creating a better life through owning a franchise.  Questions, thoughts, and comments about your franchise search experience are fielded by visiting the Ask Joe Barbat section of the website.