Francorp The World Leaders In Franchising

Webinar Expectations Open Forum Open Forum 45 Minutes w/ 15 Minute Q&A 45 Minutes w/ 15 Minute Q&A E-Book and Slides E-Book and Slides

Francorp Francorp Consulting Francorp Connect Francorp Connect Francorp International Francorp International

Reasons to Franchise Money Money People People Time Time

Ways to Raise Capital Internally Generated Internally Generated Debt Debt Venture Capital Venture Capital Franchising Franchising

Franchise Fees Designed to Cover Investment Designed to Cover Investment Cost Recovery Cost Recovery  Marketing for Franchisees  Training  Support  X-Factor

Ongoing Revenue Royalty Royalty  Percentage Based  Average 6%  Gross Sales  Weekly Product Sales Product Sales Technology Technology Must Provide Ongoing Value Must Provide Ongoing Value

Example Average Francorp Client Sells Average Francorp Client Sells – 9 Franchises in Year 1 – 11 Franchises in Year 2 – 13 Franchises in Year 3 – Total of 33 in 3 Years Average Franchise Fee = $35,000 Average Franchise Fee = $35,000 Average Royalty = 6% of Gross Sales Average Royalty = 6% of Gross Sales Assume Business Grosses $500,000 Assume Business Grosses $500,000

Example Continued Results Over the 3 Year Period: Results Over the 3 Year Period: $1,150,000 in Franchise Fees $1,150,000 in Franchise Fees $1,860,000 in Royalties $1,860,000 in Royalties Over $3,000,000 in 3 Years Over $3,000,000 in 3 Years Royalty has at least a 50% profit margin Royalty has at least a 50% profit margin

Franchise Structures and Models Individual Individual Multi-Unit Multi-Unit Sub-Franchisor Sub-Franchisor Conversion Conversion

3 Pillars 3 Pillars – Use of your Name – Use of you Systems – Payment of a Fee Licensing Fulfills Only Two Licensing Fulfills Only Two Franchising Vs. Licensing

Legal Issues of Franchising Federal Compliance Federal Compliance  UFDD  Format (23 items of disclosure)  FA State Compliance State Compliance  23 States  Registration Vs. Filing

State Compliance RegistrationFiling

Franchisability? Decent product/service Decent product/service Great system Great system Teachable Teachable Nationally adaptable Nationally adaptable 15% Return on cash investment 15% Return on cash investment Plus manager’s salary Plus manager’s salary

Who is a Franchisee? “A” Students “A” Students Rule Driven Rule Driven Track Record of Commitment Track Record of Commitment Networked within their community Networked within their community Physical stamina Physical stamina No Fishermen! No Fishermen! No Entrepreneurs! No Entrepreneurs!

Why Buy a Franchise? Developed Brand and Systems Developed Brand and Systems Initial Training/Ongoing Support Initial Training/Ongoing Support New Career/Unemployed New Career/Unemployed Lower Failure Rate Lower Failure Rate

Field Support Field Support Corporate Marketing Corporate Marketing Required System of Operations Required System of Operations No Guarantees! No Guarantees! Franchisee Relations

1. Initial Client Meeting 2. Research the Franchise Marketplace 3. Strategic Planning Visit 4. Franchise Structure 5. Franchise Revenue Sources 6.Franchise Business Plan 7.Franchise Agreement 8.Franchise Offering Circular 9.Franchise State Registrations Francorp Development

10.Operations Outline 11.Operations Visit 12.Operations Manual 13.Franchise Marketing Plan 14. Franchise Brochure 15.Franchise Internet Marketing 16.Franchise Marketing Training 17.Franchise Sales Training 18.Franchise Management Training 19.Franchise Manuals 20.Franchise Consulting and Implementation

Exit Strategies Trade at 7-10x EBITDA Trade at 7-10x EBITDA

Francorp The World Leaders In Franchising Thanks for joining us today. 800-FRANCHISE