Expanding your Business
YPK – Lunch & Learn
August 15, 2012
Beckerlawyers.ca
Basis of Interaction
• This is a discussion…..
• It your business – lets talk about it….
• Statistics – Private Sector (Statistics Canada)
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48% - of labour force – Small Enterprises (< 100 empl) (5.1m)
16% - Medium Enterprises (100 – 499 empl) (1.7m)
SME = 64% private labour force (6.8m)
Other 34% - government & big business?
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Methods of expansion
 Internal
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Work harder
Appoint more staff
Get a partner/s
Other?
 External
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Open another location/store
License businesses to use your system
Franchise your business
Combination
Other?
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USA - Franchising commands a staggering 43% of the nation’s total retail sales and
service dollars - Jerry Wilkerson, Founder, Franchise Recruiters, Ltd.
 Further discussion based on franchising
 For purposes hereof: The word “Franchising” = Expansion
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First things First
Do you have a franchiseable business?
 You own and operate a business
 You make a profit
 Your business is distinct, special or unique
 You want to expand
 You are financially able to invest in your expansion
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What is franchising?
 Franchising is the practice of using another company’s
successful business model to your own benefit
or
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A form of business organization in which a company (franchised business)
which already has a successful product or service (the franchisor)
enters into a continuing contractual relationship (franchise agreement)
with other businesses (franchisees)
operating under the franchisor's trade name (license)
and usually with the franchisor's guidance (training)
in exchange for a fee. (royalty)
 Examples: Subway, McDonalds, 7-Eleven
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Why is franchising popular?
 Easy to set up
 Best practices immediately – no learning curve
 Relatively low set-up costs
 Brand recognition – multiple locations
 Purchasing power
 Consumer confidence - no surprises
 Manager is the owner – own boss
 Combined marketing, branding, etc.
 Increased profit = lower than royalties
 Ongoing support & training
95% of all franchises are still in business after 5 years
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Why franchise?
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People prefer franchised businesses
Most cost effective growth model
Accelerated growth potential
Supplements your existing distribution system
Process increases your current systems, controls and
management.
 Protect your business model
 Pre-empt competition
 People pay you to expand your business!
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Best practices
Businesses for which franchising work best have one or
several of the following characteristics:
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A good track record of profitability
Easily duplicated
Detailed systems, processes and procedures
Around a unique or unusual concept
Broad geographic appeal
Relatively easy to operate
Relatively inexpensive to operate
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Franchising process
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Franchise feasibility and viability study
Develop the concept, business and franchise model
Enable the franchisor
Prepare and finalise documentation
Canadian Franchise Association
Develop manuals (Usually consist of 3 sections)
 Recruitment & Selection of the prospective franchisee,
 Pre-opening manual,
 Daily operations manual (15 sections)
 Launch the franchise network
 Manage recruitment process
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What can we do for you?
 Save you time & cost of developing the administration –
allowing you to focus on your business
 Franchise coaching
 Evaluate your franchise system
 Franchise feasibility and viability study
 Develop the concept, business and franchise model
 Enable the franchisor
 Draft legal documentation
 Franchise Association
 Develop processes and manuals
 Manage recruitment process
 Chair franchise forum meetings
 Annual franchise system review
 On-going support
 Give you the benefit of previous experience
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What are the experience benefits?
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Corporate identity and brand development
Training models and implementation
Websites and Intranet
Franchisee financing
IT solutions
Increasing sales – techniques
Alternative business solutions – problem solving
Ongoing involvement
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How do franchises come aboard?
 Awareness of the opportunity
 Vetting process – Recruitment and Selection
 Disclose
 Sign a franchise agreement
 Pre-opening actions
 Training
 START BUSINESS
 Daily operations and franchise management
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“Thank You”
Look out for the last L&L opportunity:
Aug 22 - Business planning
Bookkeeping (Pat Smith - EPR)
Risk Management (John Becker)
Insurance (Desiree Perdue)
Responsible person: Lisa Frey (John Becker)
Assisted by: EPK and Don McClean
emollema@beckerlawyers.ca – www.beckerlawyers.ca
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