Agenda
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Background
Franchise concept
Process and funding
Myths and Realities
Lessons Learned
Cheryl Wadeson
Independent Business vs. Franchise
Independent Business
Owner
Franchise Owner
Brand Awareness
Unknown
Established brand
Control/Autonomy
Total freedom
Play by their rules
Cost
Can start up on a
shoestring budget,
Control over investment
decisions and timing
Upfront franchise fee,
ongoing Royalty and
Advertising fees, Franchisor
dictates remodels
How to run your business
Build it from scratch
They give you the
playbook, training and
coaching
Operational Resources
Go it alone
Total freedom
Tried and tested business –
with an established system
and support (training, real
estate, advertising, product
development, supplier
network)
Source: ”Independent Business or Franchise? How to Decide”, Curtis Kroeker, Inc., June 2013
What Does it Take to Become a Franchisee?
Franchise
Fee
+ Start Up
Investment
+ Royalty
Fee
$27K
$100K - $200K
6%
$45K
$1M - $3M
2% - 5%
$15K
$250K
8%
$40K
$215K
6%
$5K
$250K
3%
Source: www.entrepreneur.com 2013 Franchise 500
Why Cold Stone?
Paying for a Franchise
• #1 - You are selling yourself
• Getting an SBA loan:
– You need good credit
– 15-25% cash for a down payment
– May require collateral
– 10 – 25 year repayment terms
– Patriot Express loans
Myth: Franchise Owners are Rich!
Sales
COGS
14%
Salaries
23%
4%
4%
Rent
Royalties/Ad
Other
9%
22%
9%
Utilities
Taxes/Fees
15%
Profit
Successes and Lessons Learned
Working
Capital
Human
Relations
Know
Yourself