New York SBDC Research Network

By Joel Libava From Small Business Administration Before I share my ideas on how you can get past your fear of buying a franchise, I need to address this issue: It’s perfectly normal to have feelings of fear when you’re thinking about buying a franchise. Let’s see if I can help alleviate some of these fears for you. Transition Fears You’re probably worried about the transition you’ll be making if you decide to move forward with the franchise opportunity you’re interested in. The transition I’m referring to is from employee to employer. And it’s a big one. The reason it’s so big is because of all the responsibilities you’ll have as the owner of a franchise. You’ll be responsible for things like: Hiring Payroll Inventory Marketing Operations Business Development Expenses And part of your fear has to do with the fact that you may not know how to do all of those things. The good news is that when you’re a franchisee, you’ll receive formal training on every aspect o

From the Census Bureau Mention franchises, and images of the thousands of fast-food restaurants that dot landscapes across urban and rural America immediately come to mind. Franchises, however, go well beyond fast-food chains. They are important to many industries instrumental in providing other day-to-day services, from storage and warehousing to eyeglass stores and weight-loss centers. Detailed data on franchises comes from the Economic Census, which is taken every five years, and covers employer businesses in the United States. The latest Economic Census will be conducted this year, and continue to offer detailed information only available through this program. Comprehensively collected for the first time for the 2007 Economic Census, the franchise question covers over 300 different types of businesses (industries) and measures the number of franchisee- and franchisor-owned businesses in each industry and their total employment, annual payroll and sales. The question was add

My knee-jerk answer to that question is no. I have several reasons why, and I’ll be sharing them in this article. But first, do you know of anyone who has purchased a  franchise business right out of college? To learn more visit  SBA !

When looking for a franchise to buy, it’s important to find one that has it all. But, what does it mean to “have it all.”   I'll show you!

Franchised limited-service restaurants (NAICS 722513 ), sometimes called fast-food restaurants, employed 2.6 million people in 2012 and had sales of $129.2 billion, the U.S. Census Bureau reports. New car dealers (NAICS  441110 ), an industry solely comprised of franchises, employed 973,745 people and had sales of $672.5 billion in 2012. The  2012 Economic Census Franchise Report  is only the second comprehensive and detailed report by the Census Bureau on this segment of the U.S. economy, with the first being released for the 2007 Economic Census. The report presents data for selected industries on the number of businesses with paid employees engaged in franchising, annual sales for these businesses, and employment and payroll. These data are broken out by industry in three categories: franchisor-owned businesses, franchisee-owned businesses and all businesses. The data are primarily national level, although state-level statistics are provided for limited-service rest

First impressions. They’re worth so much. In franchising, the first impression you get when you start to look at a specific franchise opportunity, dictates how far you’ll go with your investigation.  These days, it’s  the franchise company website * that is often where people who are looking at franchises get theirs. According to website conversion expert  Peep Laja *, website visitors form their first impression in about 50 milliseconds. That’s not a lot of time. And, once you do get interested in a franchise opportunity, franchisors have to keep you interested. They do this in a number of ways. And, your impression of how they do it is crucial. Ways To Keep You Interested

In a previous post  we talked about deciding if a business is franchise worthy. The next step is the big one. It’s one thing to do market research on a business idea, it’s quite another to open your checkbook and put your money where your idea is. Here are a few things you’ll need to do to get your business going, and to get it franchise-ready. Open A Store In the case of Just Socks, my hypothetical idea, the next step assuming that the data found in the market research step was positive for a retail store like this, would be to open one up. And, unless you have the money needed to open a retail store, including furnishings, signage, and of course, inventory, you’re going to need to get a small business loan. The first step: Visit a local bank that offers small business lending, hopefully one that participates in programs administered by the SBA. Loans approved by the SBA offer certain guarantees for participating banks. Check out  SBA LINC , a free tool that connects borr

By FranchiseKing (Joel Libava), SBA Guest Blogger Do you ever have ideas for a new business running through your head? I do. Most of the business ideas I come up with nowadays are marketing-related. It’s probably because I own a business and I’m always thinking of ways to market my services and products. But, once in a while, I come up with an idea that’s bigger than just a marketing tool. An Idea For A Franchise Many years ago, I don’t remember how many, exactly, I came up with an idea for a retail store. It was an idea that I was able to easily visualize-and still could today. I even had a name for the store. Stores plural, actually. I envisioned lots of stores. Franchises even. My idea was a niche-clothing store, for men, women and children. The name of the store: Just Socks. The business would specialize in one thing-you guessed it, socks. The latest search on Google revealed that as of today, the only business with that name is a little shop located in Perth, Aust

You’re considering going into business for yourself. Perhaps you’re looking into a franchise, but you’re not sure you’re ready to start a brand new franchise outlet. Even with all the support and systems in place to aid new franchisees, the thought of tackling a brand new franchise outlet can be intimidating to some. An attractive option for those individuals may be a resale franchise opportunity. Franchises all over the country will routinely be resold by the previous franchisee for a variety of reasons. These outlets may be a little more “ready-made” for an immediate business opportunity, yet all businesses aren’t created equal. Also, you may not know which franchises are for sale. Many times, the franchisee must work back through their franchisor in a resale opportunity. You need to find the right guidance and investigate, there’s no substitute for performing your proper due diligence throughout the business investigation process. More from America's SBDC

As July ends, so does  Independent Retailer Month , - celebrate the successful family-owned, mom-and-pop, independent stores out there by using some resources on BusinessUSA to help you  Grow your Business , including: Forecasting for Growth Check out the competition in your area with our  SizeUp Tool Developing a Marketing Plan Using Technology to Stay Competitive Financing Growth Building your own Franchise

From FORBES : A best and worst of franchising list is tricky to put together. The methodology is just as important as the objective of the ranking. For the FORBES “best” and “worst” in franchising, FRANdata considered demand for the franchise brand, success of existing franchisees and franchisor support from the perspective of “lender friendliness”. This brings up another factor we reviewed, transparency and the average investment. As important as these criteria are, they can also appear nebulous, and indeed some are difficult to measure. In fact, we used proxies. Starting with demand, FRANdata examined a brand’s growth rate over the 2008 to 2012 period. High growth rates may be impressive but they can be misleading. Fast growth can become unsustainable and mask underlying issues. Therefore, as a proxy for sustainable growth and existing franchisee success, we calculated the franchised unit continuity rate between 2008 and 2012

Think in an uncertain economy there's some safety in buying a franchise of an already-established brand? A new report suggests that's true only if you choose very, very carefully. Seeing a Pattern The report found that 11 franchises—more than half ice cream or fast food—had the highest rates of failure of their federally guaranteed loans used to buy them in the first place, according to analysis of U.S. Small Business Administration figures done by BlueMauMau.com, a franchising news website. This is the same list that the agency provides loan officers of its most trusted lenders and banks throughout the country, the site says. See the list on Open Forum

Technology has certainly made an impact in the way we do business these days. It’s practically impossible to run a small business without it. In the world of franchising, technology is a very important part of the actual business model. A good franchisor with good technology makes it a lot easier to be a franchisee-an owner. If you’re considering franchise ownership, make sure that you find out what’s being used by the franchise company that you’re thinking of joining. Make sure that the systems in place are designed to help you succeed as a franchisee. For the full article, click here .

Starting a new business from the ground up can be exciting – developing new ideas and selling these concepts to anyone who will listen is something many people thrive on. But it’s certainly not for everyone. What about those folks whose previous job experience or personality types might not transfer as successfully to starting a business by scratch? Another avenue to consider is franchising. Opening a franchise is no easy (or necessarily cheap) option but it definitely has some advantages: lower failure rates, instant name recognition, buying power, and so on. There are thousands of options out there – from donut shops to car repair to haircuts. How to decide where to start? There are many rankings of franchises available. One place to start is a list of the “best franchises for the buck” that writers from Forbes have put together . The authors of this report looked at four variables: minimum initial investment, total locations, survival rates, and training hours offered. So are th

Today’s franchise buyers are faced with thousands of choices; not only do they have to figure what type of franchise businesses to look into, they have to figure out which one is the “best in show.” Read more .

A useful link to find out much of what you might want to know about about franchise and business opportunities, including Franchise Disclosure Documents (FDD), can be found on the FTC site .

On Wednesday, October 27th from 9:30-10:30 AM, the New York State Small Business Development Center (NYS SBDC) will be co-sponsoring a free webinar on Franchising. The webinar is being presented by Frank Dunne, Principal of the Hudson Valley FranNet, a company that provides no-cost guidance, information and support to individuals who are interested in exploring the purchase of a franchised business. The program is primarily targeted at entrepreneurs who are seeking information on franchising. To register by phone call (914) 260-9082, or by email at fdunne@frannet.com.

The National Small Business Association's 2009 Small Business Credit Card Survey (12 pp PDF) "provides a detailed view of how small businesses are utilizing their credit cards , how their credit-card companies are treating them, and the impacts of deteriorating credit-card terms on their business. Small business credit-card usage is on the rise..." SMALL BUSINESSES Using credit cards in the past 12 months to finance their firms December 2008-49 percent April 2009-59 percent. Reporting worsening credit-card terms December 2008-69 percent April 2009-79 percent reported worsening terms Experiencing credit-card issuers reducing credit lines December 2008-28 percent April 2009-33 percent Paying off their credit cards each month December 2008-50 percent April 2009-40 percent "In past recessions , economic recovery has been led by the creation of millions of new, small businesses. However, unlike previous periods of economic uncertainty, today’s entrepreneurs are severel

The 2008-2009 New York State Budget Act has drastically altered the way that franchise taxes will be determined for businesses. Last night CBS 6 News reported that the Tax Changes Anger Small Businesses . A Mr. Subb franchise owner in the Capital Region had his franchise tax jump from $425 last year to $3,000 this year. The franchise tax used to be based on payroll and is now based on receipts. A more in depth article was published on January 1st, 2009 in the CPA Journal . Written by Mark H. Levin, a copy of the article can be found here . The below tables were found in the original article.

Earlier this week I stumbled onto The Franchise Mall , an online directory of franchises. The reason why I prefer the Franchise Mall over other franchise directories is the amount of information given about the company. The Franchise Mall lists the number of franchises in operation for the past five years, start-up costs, statistics on business operations, similar franchises to look at, and much more. There are many other excellent franchise directories to choose from and since results vary from database to database, I would suggest using a few when searching for franchise opportunities. The Franchise Registry - SBA list of franchise companies whose franchisees enjoy the benefits of a streamlined review process for SBA loan applications. Franchise Search - Resource for franchising lifestyles and personal ownership. Franchise Opportunities - Directory of available franchise and business opportunities. Best Franchise Opportunities - Best franchise opportunities, franchises for sale