02/03/2020
Franchising has long been a business sector that welcomes immigrants, both as successful franchise owners and as franchise employees. But more recently, the industry has repeatedly hit the headlines for employing undocumented immigrants…
Franchise Direct has announced the release of their most recent guide: A Look at How Franchises Impact the Economy. Guide breaks down the United States benefits from the multifaceted franchise industry…
Guide itself - HERE.
Over the past decade, the number of women venturing into franchise ownership has grown significantly. According to a study commissioned by the International Franchise Association's Franchise Education Foundation, the rate of female-owned franchises grew by around 10% from 2007 to 2012...
01/27/20
A franchisee that operates seven Wendy's and one Fazoli's in southern Wisconsin has been fined for violating child labor requirements of the Fair Labor Standards Act…
In each issue of Franchise Update magazine, we profile franchise CEOs and presidents, asking each the same set of questions. Throughout the year, we'll be selecting one of those questions - and providing answers from those profiles...This week's question: Are there any trends in your industry you foresee having an impact on your brand?...
A spike in customer demand for food transparency and a greater attention to well-sourced, fresh ingredients led to fast casuals’ rising popularity over the last decade. That trend not only encouraged entrepreneurs to jump into the space, but also influenced quick-serve franchisees who are complementing their portfolios with fast-casual brands…
...Purchasing a franchise is a major investment so it is important to make an informed decision. Zeeks Pizza Executive Vice President Greg McClure offers reasons an entrepreneur should consider a franchise...
01/20/2020
The Trump administration has made it harder for employees of fast-food restaurants or other big franchises to sue corporations when individual franchise owners violate wage laws, a step that was a top priority for business groups…
On January 12, 2020, the U.S. Department of Labor announced a final rule that updates its regulations interpreting when multiple entities can be held liable as “joint employers” for wage-and-hour violations under the Fair Labor Standards Act (“FLSA”). Because franchisors frequently face claims that they should be jointly liable to franchisees’ employees for franchisees’ alleged FLSA violations, franchisors should welcome the Labor Department’s final rule…
An increasing amount of franchises are starting to realize the power of youth, and working to attract young and hungry franchisees...
In the world of business, the relationship between a franchisor and a franchisee is indisputably unique. Some liken it to a partnership, but in fact, it’s nothing of the sort. In a partnership, interests of both parties are directly aligned. And while the best franchise systems work to actively align franchisor and franchisee goals, at the end of the day, the franchisor’s financial interests are met by increasing franchisee revenues, while a franchisee’s interests are met by increasing profits...
01/13/20
It’s the time of year when most franchisors start to think about FDD updates. Under the Federal Trade Commission (FTC) Franchise Rule, the FDD must be updated within 120 days after a franchisor’s fiscal yearend. For franchisors with a fiscal year that ends on December 31, that means that the FDD update should be completed on or before April 30…
...Papa John’s was riding high back then. It was the official pizza of the NFL, with legions of devotees, when the Youngs signed on in 2017. But the ink was barely dry on their franchise contract when racially offensive remarks by Papa John founder and Chief Executive John Schnatter turned the pizza chain into a national pariah…
Say the name McDonald’s, and what comes to mind? Tasty hamburgers or hardened arteries? Entry-level jobs or dead-end McJobs? Responsive community outreach or mercenary corporate power? In “Franchise: The Golden Arches in Black America,” Marcia Chatelain has written a smart and capacious history suggesting that McDonald’s should summon all of those thoughts, and then some...
If your business has grown rapidly and found a lot of success, you may have considered franchising your company. This is a major step that can bring a lot of rewards, but it's not without its challenges. Before you make this leap, you'll want to consider all the potential pros and cons of franchising your company, and what it might mean for your existing business model...
01/06/2020
For every solid strategy developed to achieve measured franchise growth, I'd say there are five times as many ill-advised ways to execute it. Franchisors pursuing new development heights must redirect their focus from the end goal of a sale to the process in place to get there — and in doing so, make sure they are avoiding these five common miscues that keep brands from executing on their growth goals…
Today, franchising moves at the speed of technology. Tech is baked into nearly every part of franchise operations, helping unit owners track trends, train workers, learn, market to customers and make more sales. Franchising use of technology will continue to advance in the coming year, as the space grows ever more sophisticated and competitive. What’s going on behind the scenes in franchising? Here are the top technology trends that will give tech-savvy franchise brands an edge in the coming year...
12/30/2019
...Under ASC 606, a franchisor can now only recognize initial franchise fee revenue pro rata over the term of the franchise. In simple terms, under the old protocol, if a franchisor granted a new franchise for an initial franchise fee of $40,000 and the term of the franchise was 10 years, that franchisor could recognize the entire $40,000 initial fee as revenue as soon as the subject unit opened for business. Under ASC 606, the franchisor can only recognize $4,000 per year as revenue over each of the 10 years of the franchise (except as noted above)...
12/23/2019
If you’re dreaming of starting a business but you aren’t sure what kind of business to start—or where to even begin—the ideal solution may be to buy a franchise. In fact, Guidant Financial has gone so far as to dub 2019 the “Year of the Franchise” based on trends in its latest Small Business Trends survey. Here’s a closer look at what it found about today’s franchise owners (also called franchisees)...
Champagne bottles are likely popping ahead of the new year at McDonald's corporate headquarters following a big labor win for the fast-food chain and a setback for workers in the gig economy. The National Labor Relations Board ordered the settlement of an Obama-era lawsuit that had attempted to hold McDonald's liable as a "joint employer" for labor violations by its franchisees. The case had threatened the profitability of the franchise model as worker advocacy groups looked to hold parent companies accountable for franchisee behavior...
For all the talk about how small the world is, it’s probably bigger than you think. That can be helpful to remember for business owners who are franchising. You may feel like a market is oversaturated in, say, New York City or Boise, but there are plenty of places you can take your company where the competition is relatively thin and the consumers could be eager for American brands…
... However, there are a few very important steps we always recommend to clients committed to pursuing franchising before deciding to take the plunge. With 2020 on the horizon, let us provide you with a list of tips to get you ready to launch!...
...In order for a franchise system to grow in step with a brand, information sharing and relationship building is paramount, regardless of what stage a franchise brand is at in its growth trajectory. One of the most tried-and-true means of establishing a forum for this relationship building is through an annual conference or convention. While these events are not new, what your franchisees get out of them certainly can be…
MFV Expositions, the world's largest producers of franchise expos, recently announced the finalists and winner of the "Best Franchisee of the U.S.A" award – part of the Best Franchisee of the World program, a global initiative highlighting franchisees who have used franchising to positively change their lives and/or improve their communities. The award provides franchisors the opportunity to recognize the driving force behind the franchise industry – their franchisees...
12/16/2019
...When you do start considering firms, make sure you choose someone with experience in franchising. Just because you’ve used a lawyer for a lease review or a corporate formation doesn’t mean they know franchise law. And remember: Some lawyers represent both franchisors and franchisees. Find someone who doesn’t just dabble. You want someone whose primary focus is representing and advocating for franchisees…
For a budding entrepreneur, buying a franchise can be the first step to turn their business dreams into a successful reality. Franchises offer many benefits. According to John Giglio, president of Freedom Boat Club, which franchises private-membership boat clubs, there are three reasons an entrepreneur should consider choosing a franchise…
A U.S. labor board on Thursday approved McDonald's Corp's proposed settlement allowing the fast-food company to avoid a ruling on whether it is a “joint employer” of franchise workers and could be made to bargain with unions...
12/09/2019
Women’s presence in the franchise industry is soaring. As of May, women own or co-own 35% of the franchise outlets in the U.S.—around 265,000—according to the Franchise Business Review research firm. That represents outlet growth of 24% from a decade earlier, and in the two years ended in May, 41% of new franchise outlets opened have been owned or co-owned by women. And in some sectors, such as interior decorating, they far outnumber their male counterparts...
...It’s important to build up trust in franchisor-franchisee relationships, especially for chains in the process of adding more franchisee-run units. Improving and maintaining those relationships is crucial for a strong brand, and operators looking to bolster the connection and communication with their franchisees can get the ball rolling by following a few guidelines...
