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Franchising: Pathway to Wealth Creation

Book Description

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.

Table of Contents

  1. Copyright
    1. Dedication
  2. Praise for Franchising: Pathway to Wealth Creating
  3. Prentice Hall Financial Times
  4. Financial Times Prentice Hall Books
  5. Introduction
  6. Acknowledgements
  7. 1. Franchising as Entrepreneurship
    1. Franchising
    2. What It Means to Be Entrepreneurial
    3. Franchising: Small and Big Business
    4. Modeling Entrepreneurship[2]
      1. The Opportunity: The Core of Entrepreneurship
      2. Five Key Market Demand Questions
      3. Geographic Profiles
      4. Demographic Profiles
      5. Psychographic Profiles
      6. Behavioral Profiles
    5. Opportunity Recognition: Market Structure and Competition
    6. Opportunity Recognition: Market Size
    7. Opportunity Recognition: Margin Analysis
    8. Resource Marshaling: The Establishment of the Service Delivery System (SDS)
    9. The Entrepreneurial Team
    10. Conclusion
    11. Endnotes
  8. 2. The Franchise Relationship Model
    1. The Customer: How Does Opportunity Recognition Work in Franchising?
    2. Establishing the Service Delivery System (SDS): How Does the FRM Provide a Framework for Marshaling Resources?
    3. Transaction Analysis: In the Franchise Relationship, How Are Responsibilities of the Franchisor and Franchisee Allocated?
    4. Financial Structure: What Is the Financial Model of the Franchise Concept?
    5. Agency Issues: How to Find the Right Franchise Partner
      1. Is This Franchise Right for You?
      2. How Will a Franchisor Select You as a Franchisee?
    6. Relational Dynamics: How Are Tasks Best Monitored?
    7. Information Systems
    8. The Dynamics of the Franchisee–Franchisor Relationship: How Does the Franchise Entrepreneurial Alliance Adjust for Changes in the Market?
    9. Conclusion
    10. Endnotes
  9. 3. The Wealth-Creating Power of Franchising
    1. Understanding the Motivations of an Entrepreneur to Become a Franchisor
    2. Franchise Risk Profile Template: An Introduction
    3. Agency Problems and Administrative Efficiency
    4. Buy a franchise, or launch a standalone?
    5. How Do Franchisors Determine the Amount of Franchisee Fees and Royalties?
    6. Size and Risk Management
    7. Balancing Company and Franchised Outlets
    8. Resource Constraints
    9. Franchise Disclosure: An Insight into Individual Franchisor Health and Wealth
    10. License Agreement: How the Franchise Shares Responsibilities and Wealth
      1. Franchising Benchmarks
    11. Key Factors in the Franchise Relationship
    12. Public Capitalization: An Expanded View of the Franchise Company
    13. Conclusion
    14. Endnotes
  10. 4. Service Delivery System and Real Estate
    1. The Basics of Real Estate
    2. Platform for Service Delivery System and Influence of Buyer Behavior
    3. Purchase Behavior Quick Screen
    4. How to Select Real Estate
    5. The X Factors of Site Selection
    6. How to Value Real Estate
    7. Construction
    8. Financing Alternatives
      1. Lease Agreement: The Contract Between Property Owner and Occupant
      2. Differentiating Between a Capital Lease and an Operating Lease
    9. Leasing Issues and Potential Traps
      1. Common Traps to Avoid When Leasing
    10. Advantages of Real Estate Ownership
    11. Lowering the Cost of Capital
    12. Allocating Risk
    13. Conclusion
    14. Endnotes
  11. 5. Selecting and Monitoring Franchisees
    1. Selection and Monitoring: Franchising’s Dual Challenge
    2. The Tolerance Zone
      1. More on the Components of Internal Control
    3. Monitoring and Controlling Execution of the SDS
    4. Monitoring Methods
      1. Field Support
      2. External Service Audits and Peer Review
      3. Analytical Tools
      4. Customers
    5. Monitoring and Controlling Financial Reporting
      1. Point-of-Sale Systems
      2. Financial Reporting
      3. Financial Audits
    6. Creating a Feedback Loop
    7. Conclusion
    8. Endnotes
  12. 6. The Service Delivery System and Marketing
    1. Why is Marketing Important in a Franchise?
      1. Marketing States the System’s Promise to the Customer
      2. Marketing Sells Franchises and Raises Capital
        1. Marketing Leverages Brand Awareness as the System Grows
    2. What are the Forms of Marketing in Franchising?
    3. Local Marketing
    4. Regional Advertising
    5. National Advertising
    6. Supplier Cooperative Advertising
    7. Production of Marketing Materials
    8. An Overview of Marketing and the License Agreement
    9. Potential Marketing Problems
      1. Distribution of Benefits
      2. Franchise Marketing and Pricing Issues
    10. Marketing and the Free Riding Risk
    11. Conclusion
    12. Endnotes
  13. 7. Transaction Analysis
    1. Using Transaction Analysis to Improve the Service Delivery System
    2. Support Systems and the Franchisor-Franchisee Relationship
    3. Introduction to Case Study: Bagelz
      1. Bagelz
      2. Mike’s Background
      3. Due Diligence
      4. Bagelz
      5. The Bagel Industry
      6. Fred DeLuca
      7. To Franchise or Not to Franchise?
      8. A Decision Is Made
      9. Franchising Operations
      10. Franchising and the Bagelz Business Format
      11. Joe’s Departure
      12. Organizational Structure
      13. Operations
      14. The Commissary
      15. Marketing
      16. Franchisee Advertising Fund
      17. Co-Branded Units
      18. Future Dilemmas
    4. Summation of Case Analysis: Bagelz and Transaction Analysis
      1. Franchise SDS (please refer to Table 7-1)
      2. Ongoing Outlet Operations (please refer to Table 7-2)
      3. Advertising and Public Relations (please refer to Table 7-3)
      4. Product Supply (please refer to Table 7-4)
  14. 8. Financial Analysis
    1. Focusing on the Key Transactions
    2. Return on Investment
      1. Introduction to Case Study: Panera Bread
      2. Large Motivations Come in Small Packages
      3. Pre-Panera: The Saint Louis Bread Company
      4. A Potential Partner: Au Bon Pain
      5. Fast-Casual Dining
      6. Panera Bread Is Born
      7. The Panera Franchise Concept
      8. Service Delivery System
    3. PR Restaurants, LLC
      1. Getting Started
      2. PR Restaurant Operations
      3. From Here to 20?
    4. Endnotes
  15. 9. The Dynamics of the Franchisee–Franchisor Relationship
    1. Wealth Creation
    2. Communication
    3. Value of Trademark or Brand
    4. Exit Costs
    5. Introduction to Case Study: Quick Lube Franchisee Company (QLFC)
      1. Quick Lube Franchise Corporation
  16. 10. Understanding the Basics of U.S. Franchise Laws
    1. Recent Key Trends in U.S. Franchising
      1. An Overview of Federal and State Franchise Regulation of U.S. Franchises
      2. A Brief Review of the Evolution of Franchise Regulation
      3. State Franchise Laws
      4. Guidelines for Determining What Is a Franchise
        1. Types of Control or Assistance
      5. Preparing the Disclosure Document: Choosing the Appropriate Format
      6. The Mechanics of the Registration Process
      7. About the Chapter Author
  17. 11. International Franchising
    1. Franchising in a Foreign Country from a U.S. Base
      1. Using The International Franchising Checklist
    2. Conclusion
      1. Further Reading
      2. Web Sites
      3. Official websites of intellectual property authorities
  18. 12. Harvest
    1. Harvest Options
    2. The Initial Public Offering
      1. An Ideal Harvest Strategy for the Franchisor
      2. IPO: A Rare Experience for the Franchisee
      3. A Word of Caution
    3. A Trade Sale or Merger with Another Company: A Franchisor’s View
      1. Merger of the Franchise Company with a Known Brand Manager
    4. Increasing the Free Cash Flow
    5. Management Buyout
    6. Employee Stock Ownership Plan (ESOP)
    7. Your Harvest Strategy and Valuation of the Franchise
    8. Conclusion