book

Franchising: Pathway to Wealth Creation

by Stephen Spinelli, Robert M. Rosenberg, Sue Birley

August 2003

Intermediate to advanced

256 pages

6h 56m

English

Pearson

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Copyright
Dedication
Praise for Franchising: Pathway to Wealth Creating
Prentice Hall Financial Times
Financial Times Prentice Hall Books
Introduction
Acknowledgements
1. Franchising as Entrepreneurship
FranchisingWhat It Means to Be EntrepreneurialFranchising: Small and Big BusinessModeling Entrepreneurship[2]The Opportunity: The Core of EntrepreneurshipFive Key Market Demand QuestionsGeographic ProfilesDemographic ProfilesPsychographic ProfilesBehavioral ProfilesOpportunity Recognition: Market Structure and CompetitionOpportunity Recognition: Market SizeOpportunity Recognition: Margin AnalysisResource Marshaling: The Establishment of the Service Delivery System (SDS)The Entrepreneurial TeamConclusionEndnotes
2. The Franchise Relationship Model
The Customer: How Does Opportunity Recognition Work in Franchising?Establishing the Service Delivery System (SDS): How Does the FRM Provide a Framework for Marshaling Resources?Transaction Analysis: In the Franchise Relationship, How Are Responsibilities of the Franchisor and Franchisee Allocated?Financial Structure: What Is the Financial Model of the Franchise Concept?Agency Issues: How to Find the Right Franchise PartnerIs This Franchise Right for You?How Will a Franchisor Select You as a Franchisee?Relational Dynamics: How Are Tasks Best Monitored?Information SystemsThe Dynamics of the Franchisee–Franchisor Relationship: How Does the Franchise Entrepreneurial Alliance Adjust for Changes in the Market?ConclusionEndnotes
3. The Wealth-Creating Power of Franchising
Understanding the Motivations of an Entrepreneur to Become a FranchisorFranchise Risk Profile Template: An IntroductionAgency Problems and Administrative EfficiencyBuy a franchise, or launch a standalone?How Do Franchisors Determine the Amount of Franchisee Fees and Royalties?Size and Risk ManagementBalancing Company and Franchised OutletsResource ConstraintsFranchise Disclosure: An Insight into Individual Franchisor Health and WealthLicense Agreement: How the Franchise Shares Responsibilities and WealthFranchising BenchmarksKey Factors in the Franchise RelationshipPublic Capitalization: An Expanded View of the Franchise CompanyConclusionEndnotes
4. Service Delivery System and Real Estate
The Basics of Real EstatePlatform for Service Delivery System and Influence of Buyer BehaviorPurchase Behavior Quick ScreenHow to Select Real EstateThe X Factors of Site SelectionHow to Value Real EstateConstructionFinancing AlternativesLease Agreement: The Contract Between Property Owner and OccupantDifferentiating Between a Capital Lease and an Operating LeaseLeasing Issues and Potential TrapsCommon Traps to Avoid When LeasingAdvantages of Real Estate OwnershipLowering the Cost of CapitalAllocating RiskConclusionEndnotes

5. Selecting and Monitoring Franchisees
Selection and Monitoring: Franchising’s Dual ChallengeThe Tolerance ZoneMore on the Components of Internal ControlMonitoring and Controlling Execution of the SDSMonitoring MethodsField SupportExternal Service Audits and Peer ReviewAnalytical ToolsCustomersMonitoring and Controlling Financial ReportingPoint-of-Sale SystemsFinancial ReportingFinancial AuditsCreating a Feedback LoopConclusionEndnotes
6. The Service Delivery System and Marketing
Why is Marketing Important in a Franchise?Marketing States the System’s Promise to the CustomerMarketing Sells Franchises and Raises CapitalMarketing Leverages Brand Awareness as the System GrowsWhat are the Forms of Marketing in Franchising?Local MarketingRegional AdvertisingNational AdvertisingSupplier Cooperative AdvertisingProduction of Marketing MaterialsAn Overview of Marketing and the License AgreementPotential Marketing ProblemsDistribution of BenefitsFranchise Marketing and Pricing IssuesMarketing and the Free Riding RiskConclusionEndnotes
7. Transaction Analysis
Using Transaction Analysis to Improve the Service Delivery SystemSupport Systems and the Franchisor-Franchisee RelationshipIntroduction to Case Study: BagelzBagelzMike’s BackgroundDue DiligenceBagelzThe Bagel IndustryFred DeLucaTo Franchise or Not to Franchise?A Decision Is MadeFranchising OperationsFranchising and the Bagelz Business FormatJoe’s DepartureOrganizational StructureOperationsThe CommissaryMarketingFranchisee Advertising FundCo-Branded UnitsFuture DilemmasSummation of Case Analysis: Bagelz and Transaction AnalysisFranchise SDS (please refer to Table 7-1)Ongoing Outlet Operations (please refer to Table 7-2)Advertising and Public Relations (please refer to Table 7-3)Product Supply (please refer to Table 7-4)
8. Financial Analysis
Focusing on the Key TransactionsReturn on InvestmentIntroduction to Case Study: Panera BreadLarge Motivations Come in Small PackagesPre-Panera: The Saint Louis Bread CompanyA Potential Partner: Au Bon PainFast-Casual DiningPanera Bread Is BornThe Panera Franchise ConceptService Delivery SystemPR Restaurants, LLCGetting StartedPR Restaurant OperationsFrom Here to 20?Endnotes
9. The Dynamics of the Franchisee–Franchisor Relationship
Wealth CreationCommunicationValue of Trademark or BrandExit CostsIntroduction to Case Study: Quick Lube Franchisee Company (QLFC)Quick Lube Franchise Corporation
10. Understanding the Basics of U.S. Franchise Laws
Recent Key Trends in U.S. FranchisingAn Overview of Federal and State Franchise Regulation of U.S. FranchisesA Brief Review of the Evolution of Franchise RegulationState Franchise LawsGuidelines for Determining What Is a FranchiseTypes of Control or AssistancePreparing the Disclosure Document: Choosing the Appropriate FormatThe Mechanics of the Registration ProcessAbout the Chapter Author
11. International Franchising
Franchising in a Foreign Country from a U.S. BaseUsing The International Franchising ChecklistConclusionFurther ReadingWeb SitesOfficial websites of intellectual property authorities
12. Harvest
Harvest OptionsThe Initial Public OfferingAn Ideal Harvest Strategy for the FranchisorIPO: A Rare Experience for the FranchiseeA Word of CautionA Trade Sale or Merger with Another Company: A Franchisor’s ViewMerger of the Franchise Company with a Known Brand ManagerIncreasing the Free Cash FlowManagement BuyoutEmployee Stock Ownership Plan (ESOP)Your Harvest Strategy and Valuation of the FranchiseConclusion

Overview

Franchising: Pathway to Wealth Creation is franchising as true entrepreneurship, for every potential franchisor and franchisee ready to generate large-scale wealth. Authors include the entrepreneur who built the world's largest system of Jiffy Lube franchises, the executive who grew Dunkin' Donuts by 1,000%, and the franchising expert at the world's #1 franchise bank lender. This remarkable team covers every step from assessment through cashing out, every element of the product/service delivery system, and every facet of the franchisee/franchisor relationship.

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