Franchising, Licensing or Certification

What You Need To Know

You’ve grown your business to a successful point and are now considering expansion.  Congratulations! The most important question is “Which structure is right for my business, temperament and risk tolerance?”

Will you choose. . .

  • multiple company-owned locations, wherein you will be responsible for all business and operations aspects of each location?
  • certification program, allowing others to become certified to utilize and sell your products or services within their business?
  • license the rights to your business opportunity? (not recommended in most instances, click here to read why.)
  • franchise, keeping you in legal compliance and allowing you full control over your brand and intellectual property usage? 

These various structures are far more than simple semantics.  Many people inappropriately call their business “licensed” to avoid expenses.  However, if legally it should have been categorized as a franchise, it will be much more costly in the long run when they get sued for selling a disguised franchise.  Remember, if it looks like a duck and quacks like a duck…it’s probably a duck!  We suggest that you consult with a franchise development firm as part of your decision in order to avoid expensive legal liabilities down the road. 

By the nature of state and federal laws, most businesses will fall within franchising parameters.  Franchising is not as simple as hiring an attorney, drafting Franchise Disclosure Documents (FDD’s), drafting an operations manual, and the appropriate state and federal filings.  Those steps are absolutely necessary, yet those legal agreements can be full of loopholes and missing components if they are not based upon a well thought out and well-designed franchise strategy and business model.  You’ve worked too hard to grow your business.  Do not jeopardize your pride and joy by taking shortcuts!

How do you find the right company to take you through the franchising process?  As a franchise developer who has been instrumental in successful national and international franchise expansions, here are several questions that we recommend you ask when interviewing prospective franchise development firms:

How do you charge for your services?  Run away from the companies that charge a percentage of your business, royalties or future franchise sales.  Additionally, there is no need to pay large upfront fees before starting the process. You should be looking for a company that clearly outlines their services, is willing to customize a plan specific to your needs, and is reasonably flexible with payment options.  Remember to ask if there are fees that may not be included in their services.  You don’t want to enter into a contract and then be surprised by additional fees that were not in your budget. 

Does your company sell franchises?  If yes, while on the surface it sounds good, this is NOT in your best interest in our opinion.  A company that develops franchises and sells them often will spend their efforts making the offering sound good to a prospective franchisee because they will profit on the sale, not however, on your long term success. You want a company that places an emphasis on the success of the franchisees.  If this is not kept top of mind in the development process, you risk high turnover in your franchise, which will make it difficult to sell units in the long run.  Remember, you are required to disclose all current AND PREVIOUS franchisees to a prospective buyer.

Who will be preparing the franchise documents?  Many franchise development companies prepare these documents using a cookie cutter template, which means they are not necessarily drafted to your preference and the uniqueness of your specific business.   Additionally, any franchise development firm that advises their clients in drafting these documents without the use of attorneys, either in-house or outsourced, could be in violation of unlawfully practicing law.

After the initial franchise development stage, what type of ongoing support do you provide?  Many franchise developers are interested in your business through the initial development process only, however they offer very little in the way of ongoing support for a continuously growing business.  Ongoing support to look for: training for all levels of your franchise, technology, legal, financial management and marketing support.  Your relationship with a franchise developer should be taken seriously.  If you have carefully selected your developer, you should enjoy the benefit of a long-term supportive business relationship.  If they are not interested in an ongoing relationship, this is a huge red flag and may indicate a lack of understanding of the franchise world in total.

Click here to see The Secret Weapon’s Franchise Development Solutions

Time Management Tips

Time management is one of the biggest challenges we hear from business owners.  How do you get all the stuff done in a day or even a week?  Most of us go into business for ourselves because there is something bigger out there for us besides being an employee to someone else.  However, there are those days when we think to ourselves that it would be easier to go back to being an employee.  If we can make business ownership as easy as it was when we were employees, life would be grand…wouldn’t it?  Well, we can’t take away all the challenges of business ownership, but we can give you some tips to better handle your time.  
1.   Keep it simple.  Technology is fabulous and makes many tasks much easier, however it is also very easy to get wrapped up in too much technology by trying to use it all when it’s not necessary.  For example, we do not use task lists.  We only use our calendars.  All of our tasks get placed into our calendars as an appointment with ourselves.  By doing this, we block out the estimated time to complete the task.  If we do not do this, a couple of things happen.  First, we generally will fail to allot ourselves enough time for the task and we find ourselves each trying to fit 30 hours of work into a day.  If we have a separate task lists from our calendars, we also tend to forget to look at our task lists and appropriately plan tasks into our day.
2.   We’re only the boss on Sunday evening.  We realized that the part we sometimes enjoyed about being employees was that we didn’t have to think about what we were doing every minute of every day.  We were told what to do and we did it.  So now we are only the business owner on Sunday evening and if there is a fire that comes up during the week.  We sit down for about an hour every Sunday evening to plan our week, blocking times for phone calls, appointments, tasks, etc.  If we do this, then starting Monday morning, we have already done all the thinking and we can just be employees to our calendars.  We find there to be fewer fires to put out, yet we can easily look at our calendars and rearrange if need be.
3.   Travel time is still TIME.  Estimated travel time has its own category in our calendar.  Always round your time up!!!  For example, if GPS or Google Maps says it is going to take you 47 minutes to get to your destination, give yourself an hour of travel.  Not only is it professional to be on time or early, it is also much less stressful if you are not racing against the clock. 

4.   Value your own time!  It baffles we that we will not miss appointments with other people, but we will easily ignore appointments we make with ourselves.  We used to be that way too, until we learned this little mind trick.  Now, we tell ourselves that for every time block in our calendar, there are 20 people relying on us to show up.  Since we would never miss a meeting with 20 people or even a single client, this little trick has changed our point of view and keeps us on track.  

5.   Review your week.  At the beginning of the week, we print a copy of our planned calendars and set them aside.  As we go through my week, we modify our calendar to what we actually did, make changes to the areas where we deviated from the plan.  Be honest about what you actually did!  If we decide that we are not going to complete a task and rather we take a nap, we will actually change our calendar to say so.  At the end of the week, we can print an updated copy of our calendar and compare it to our original plan.  Then we celebrate where we did great, and correct the areas that need improvement.

Parable of the Pencil

We are not sure of the author of this great little parable. However, someone shared it with us several years ago. We prefer to write with pencils when we do our business planning because it is a great reminder to us of purpose and making our mark in this world. Enjoy!

Parable of the Pencil

The Pencil Maker took the pencil aside, just before putting him into the box.

“There are 5 things you need to know,” he told the pencil, “Before I send you out into the world. Always remember them and never forget, and you will become the best pencil you can be.”

“One: You will be able to do many great things, but only if you allow yourself to be held in Someone’s hand.”

“Two: You will experience a painful sharpening from time to time, but you’ll need it to become a better pencil.”

“Three: You will be able to correct any mistakes you might make.”

“Four: The most important part of you will always be what’s inside.”

“And Five: On every surface you are used on, you must leave your mark. No matter what the condition, you must continue to write.”

The pencil understood and promised to remember, and went into the box with purpose in its heart.

Now replacing the place of the pencil with you. Always remember them and never forget, and you will become the best person you can be.

One: You will be able to do many great things, but only if you allow yourself to be held in God’s hand. And allow other human beings to access you for the many gifts you possess.

Two: You will experience a painful sharpening from time to time, by going through various problems in life, but you’ll need it to become a stronger person.

Three: You will be able to correct any mistakes you might make.

Four: The most important part of you will always be what’s on the inside.

And Five: On every surface you walk through, you must leave your mark. No matter what the situation, you must continue to do your duties.

Allow this parable on the pencil to encourage you to know that you are a special person and only you can fulfill the purpose to which you were born to accomplish.  Go out into the world with courage, know you are significant, and allow yourself to make a change!

Business Plans vs. Strategic Plans

The first thing a business owner usually says to us is “I need a business plan.”  Most often, this is not actually the case.  The business owner generally has a misunderstanding of what a business plan will do for them.   A business plan is usually a beginning point in requesting capital from government grants, bank loans or private investors.  If your business is in need of start-up capital or expansion capital, then you will definitely need a business plan.  However, if the business is self-funded, then creating a business plan is a daunting task which is generally a waste of time.
What these business owners actually need is a strategic plan.  Business plans are concept-based, wherein strategic plans are activity-based.  The strategic planning process we use at The Secret Weapon is called the Business Success GPS.  After examining the processes used in a multitude of business, we suggest using a one-page strategic plan that covers a span of 5 years.  Anything more than 5 years is difficult for the business owner and core team to mentally digest and set with clarity.  The idea is to gain clarity and determine exactly the activities that need to be done on a yearly, quarterly and daily basis. 
Business Success GPS is exactly that…a GPS system for your business.  To best explain this concept, think about using a GPS system in your car.  When you get in the car, you turn on the GPS device, which bounces a signal to a satellite and pinpoints your exact location.  You then enter your destination into the device.  The device calculates the best route to get you from where you are to where you want to be.  In driving, we also know the shortest route in mileage is not always the shortest route in travel time.  A Business Success GPS will allow you to pinpoint where you are in your business, where you want to be, and the exact activities that will need to be done on a daily basis to ensure you will reach your 5-year goal. 
Each activity is assigned to a person, with the resources and timeline for completion.  Accountability is then held by way of daily huddles and weekly team meetings.  These meetings and generally facilitated by a business mentor or manager.  They serve as the “GPS lady” to get you back on track when you’ve missed a turn, turned the wrong direction, or just simply need to step on the gas in order to reach your destination on time.
While business plans are not necessary for every business, operating your business without a solid Business Success GPS can be the equivalent of playing Russian roulette.  As business owners, we invest too much time, money and energy into being successful.  We have a responsibility to our employees, vendors, family and community to ensure we are doing the right things in our businesses.  A business without an action plan is a business that actively plans to fail.