Women in Franchising

As the number of women in franchising grows. franchisors are naturally turning their attention to attracting female entrepreneurs. According to Price Waterhouse Coopers and the International Franchise Association, about 25% of franchises are owned by women.

FranchiseHelp.com conducted an informal poll to learn towards which franchises women trend. The answer was those that allow a flexible schedule, a daytime schedule, or relate to something they feel strongly about, like nutrition or pets. They identified popular franchise choices as Naturals 2 Go, Kumon Math & Reading Centers, Cleanpro Carpet Cleaning, and Bark Busters.

Patricia Deering of FranNet says that franchises typically begin at $50,000 and go up from there. “Usually, they need to have 25-30 percent of their own money and they need to be able to support themselves while they are growing the business.

For women who want to be in charge of their own financial destiny and can manage the up front costs, there are many franchise options. All franchises don’t require the hours of a fast food franchise. The key is to find the fit best for your background, interests, and lifestyle.

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Top Franchises for Young Entrepreneurs

Under 30 CEO offers a list of 21 Franchises best for entrepreneurs in their twenties. They selected franchises with relatively low start-up costs, appropriate for the experience level of someone in their twenties, and with franchisors favorable to young investors.

  • Weed Man. The largest lawn care company is a good transition for someone who spent summers mowing lawns. The franchise offers the business, marketing, and logistics support to help an entrepreneur get a franchise off the ground.
  • GroOrganic. Combining entrepreneurial fire with a desire to do good in the world, GroOrganic franchises assist people and businesses in growing organic backyard gardens that are later harvested for food consumption. With a minimum cash investment of only $10K, this is a good option for an entrepreneur who enjoys outdoor work.
  • Fetch! Pet Care. This dog walking and pet sitting business requires low net worth to start, has relatively low risk, and a system that is accustomed to young entrepreneurs.
  • Recruit. For the sports-minded, a Recruit franchise may be a good choice. Franchisees obtain, refine, and disseminate key scouting data for colleges recruiting high school athletes.
  • Merry Maids. This well-known cleaning service offers another avenue for young entrepreneurs to break into franchising. Translate your years of doing chores and business expertise to a successful venture. This cleaning franchise also has low entry requirements, a minimum cash requirement of approximately $25,000.

For more options, check out the full list.

Veterans Eligible to Win a Pool Service Franchise

On Veteran’s Day 2015, America’s Swimming Pool, the nation’s largest pool service company, rolled out a special program in appreciation and admiration for our nation’s veterans and the sacrifices they have made for our country. One veteran is selected every year and is awarded a waiver of the full franchise fee. The application process is simple, starting with a short form on the ASP website. Take your chance at winning a business.

Tesla and the Auto Franchising Debate

The issue of auto franchising is front and center in Connecticut. Senate Majority Leader Bob Duff, D-Norwalk introduced a bill to allow electric car manufacturers to sell their vehicles directly to Connecticut consumers. The bill limits electric car manufacturers to three Connecticut stores.

This is a change from the current system that requires all car manufacturers to apply for a franchise license and offer vehicle servicing. The Connecticut Automotive Retailers Association (CARA) wants electric car manufacturer Tesla to be held to the same standards and requirements as other car companies. CARA President James Fleming said. “We would welcome (Tesla) to join us in the franchise system today, as we have asked them over the past couple of years when they’ve come in to visit the state of Connecticut.”

CARA, the Alliance of Auto Manufacturers, and General Motors joined to make the statement that the state’s auto franchise system is effective and special treatment should not be given. “What we want to make sure we have is one set of regulations for everybody who’s going to compete in this marketplace,” said Landon Fulmer, vice president of state affairs for the Alliance of Auto Manufacturers. “We don’t need carve-outs, we don’t need loopholes. We need to make sure everybody plays by the same rules.”

Watch and see whether Tesla and other electric car manufacturers will be given special treatment.

Auto Retailers, Makers Call on Tesla to Apply for Franchise The CT Mirror Mar 1, 2016

Hong Kong Franchise Laws

Franchises and franchise agreements must comply with the competition rules in Hong Kong’s Competition Ordinance. While franchises have a right to protect their brand and intellectual property, they don’t have a right to limit competition. Excessive restrictions demanded by franchises will run afoul of competition law, but measures specifically necessary to implement the franchise agreement will not.

Beware these restrictions:

  1. Resale Price Maintenance (RPM). The Ordinance’s First Conduct Rule (FCR) prohibits an agreement or arrangement between two parties that has the object or effect of harming competition in Hong Kong. A franchisor may, therefore, provide a franchisee with  a recommended price list and a maximum price, but may not require a franchisee to resell goods or services at a fixed or minimum resale price.
  2. Non-compete. An overly zealous non-compete with a broad scope or extended duration likely breaches the First Conduct Rule. Franchisors may restrict a franchisee’s operation to a specific territory and prevent a franchisee from selling competitive goods.
  3. Franchisee suppliers. “A franchisor may require franchisees to purchase goods or services from the franchisor, a related company, a particular supplier, or a list of nominated suppliers.” Such arrangements, however, should not limit competition.

Navigating the Hong Kong Competition Law – Competition Issues in Franchise Agreements Bird & Bird Feb 25, 2016

2016 Franchising Gives Back Annual Awards

The International Franchise Association’s (IFA) Franchise Education & Research Foundation is now accepting nominations for their Franchising Gives Back awards, honoring those franchise charitable or community-based programs with the greatest impact. Nominees are accepted through June 17, 2016 and are considered in five categories:

  • The program that best embodies the spirit of the award
  • The best new program
  • The most outstanding program of more than five years
  • The program that best supports our military
  • The innovative program that makes the most of limited resources

Nominees must be current IFA members or affiliated organizations. To nominate your 2015 charitable program, enter on the Franchising Gives Back site. Winning programs will be recognized at an awards celebration and dinner on Sept. 12 during the IFA’s Franchise Action Network Annual Meeting in Washington, D.C.

International Franchise Association’s Franchise Education & Research Foundation Announces Call for Nominations for 2016 Franchising Gives Back Annual Awards The Daily Meal Feb 19, 2016

VetFran Brings Franchise Opportunities to Veterans

Since 1991, VetFran has been thanking veterans for their service by providing information about business opportunities. The International Franchise Association that runs the program believes that franchise opportunities are a good match for our returning service men and women because the franchise business model offers comprehensive training, a career path, and scalability.

VetFran offers information on the franchise industry, online courses, mentorship, and financial assistance, giving veterans their best chance of success as small business owners. VetFran partners with more than 650 member franchises “that voluntarily offer financial discounts, mentorship, and training for aspiring veteran franchisees and veterans seeking employment.” Discounts can save veterans aspiring to small business ownership tens of thousands of dollars. VetFran Helps Veterans Build Businesses A Business for Veterans Feb 16, 2016

The Tale of a Bad Franchise Investment

Everybody’s looking for the right investment, a way to get ahead. For a former investment banker in Arizona, that meant purchasing a franchise from a New Jersey-based chain of educational service centers. In just two years, he learned that it wasn’t the right investment after all. He closed his struggling tutoring center. But that wasn’t the end of his travails. Read on

2015’s Fastest Growing Franchises

The fastest growing franchises in 2015 were determined based on those franchises that added the most new units. According to Entrepreneur magazine, the top 5 are:

  1. Subway
  2. Dunkin’ Donuts
  3. Cruise Planners
  4. Jimmy John’s Gourmet Sandwiches
  5. Vanguard Cleaning Systems

See the rest of the list at entrepreneur.com.

Subway’s spot at the top of the list is a bit surprising given the Jared Fogle scandal and the death of co-founder Fred DeLuca, but Bloomberg Business reports, “Subway has about 44,000 shops globally, including 27,000 in the U.S., and opens five more a day on average.” Subway is a privately-held company with no company stores; all units are run by franchisees. Bloomberg reports that each franchise, “costs $15,000 in initial fees and 8 percent of weekly sales in royalties to its owners. Franchisees also pay 4.5 percent toward advertising.”

Despite its #2 ranking, Dunkin’ Donuts reports slowing growth and the closure of 100 outlets. “The restaurants are being closed in 2015 and 2016 as convenience store chain Speedway LLC plans to exit about 100 locations with Dunkin’ Donuts franchise outlets,” Dunkin’ Brands Group reported.

In November, 2015, regarding 3rd place Cruise Planners, it was reported, “Of the 1,000-plus Cruise Planners franchisees, 69% had year-over-year growth so far in 2015, compared with 54% who responded to a similar ASTA survey. Cruise Planners CEO Michelle Fee reports that success is due in part to database tool Smart Select, “that uses client demographics to make marketing more targeted. Agents that used Smart Select typically had higher sales.”

Jimmy John’s Gourmet Sandwiches continued growth have placed the franchise in the top 5 fastest growing franchises for 2015, but the high cost of opening a franchise, reported at $323,000 to $544,000 plus the cost of real estate, and employee dissatisfaction may hamper growth moving forward.

Vanguard Cleaning Systems has 2,900 independently owned and operated franchised businesses in North America.

It should be noted that there are several different lists for top franchises using different criteria and showing disparate results. Entrepreneur based rankings on the number of new units rather than revenue growth.

 

 

Today’s Headline: Wage Law Heads to Supreme Court

“The International Franchise Association is appealing part of Seattle’s $15 minimum wage law that it claims discriminates against franchise owners,” reports the Seattle Times.

The association lost to a federal appeals court panel last fall. The group’s original lawsuit was filed in 2014, arguing that franchises should be treated as small, locally-owned companies rather than enterprise-level companies with hundreds of employees.

The International Franchise Association President and CEO Robert Cresanti said, “Our appeal to the Supreme Court will be focused solely on the discriminatory treatment of franchisees under Seattle’s wage law and the motivation to discriminate against interstate commerce.”

Seattle has 30 days to respond to the petition. The Supreme Court is expected to decide this spring if they will hear the case.