# Franchise Fred

### Posts

#### 8 Steps to Take Prior to Buying a Franchise- Franchise Fred
As with any major purchase, especially one that will become your life’s work, perform your due diligence. Below are eight steps you need to take prior to buying a franchise:

	Make sure your own finances are in order. Franchisors will want to know that you are financially secure before awarding you a franchise.
	Carefully review the Franchise Disclosure Document (FDD). This document is a treasure chest of information about the Franchisor. Among other things, check for any litigation issues, your obligations to the franchisor and vice versa and any financing the franchisor may provide.
	Understand exactly what the franchise fee covers. Some franchise fees cover for all of the start-up costs and some exclude marketing and training. Make sure you know what you will have to pay in addition to the fees to get a good start in your business.
	Ask about support. Find out what level of support you will receive from the franchisor. Will they create ads for you? Assist you with hiring? Provide continual training?
	Talk to current franchisees. Ask them about any disputes, if the franchisor does what they say they’re going to do and how long it took them to get to their break-even point.
	Make sure there is a territorial clause in the franchise agreement you will be signing. This is defined as an exclusive territory around the business location. The agreement will specify that no other franchisee will be allowed to open in that territory. The territory could be stipulated by zip codes, the number of households in the area, highway boundaries or any number of other definitions.
	Check for the existence of franchisee advisory groups and associations. In general, franchise advisory groups are organized by the franchisor. They are comprised of franchisees and representatives of the franchisor. An association usually is independent of the franchisor. As a franchisee, you may have to pay dues to join so the group can be funded. The presence of one or both of these groups generally indicates that the franchisor welcomes input and closely listens to franchisee concerns.
	Know the franchisor. Any agreement is only as good as those who make it. Do your research on the internet and elsewhere about the franchisor. Check the franchisor’s employment history, how long they have been managing franchisees and any litigation history they may have been a party to.

Finally, consider retaining the services of an experienced franchise attorney to review the franchise agreement with you. This will help ensure you have a clear understanding of all of its contents.

#### A Veteran Discovers the American Dream in Franchising
What do you do if you’re a veteran who is reentering the workforce? You might get a traditional job. However, after serving in the military and coming out with a set of impressive skills like humility, a service mentality, discipline and most importantly, the ability to see any situation all the way through, you might consider owning a business. These skills and others acquired in military service makes you a perfect candidate for entrepreneurship.

Marc Richard- Franchisee of the Year 

That’s what happened with Marc Richard. He bought a Postal Connections franchise in Vero Beach, FL in 2010 and proceeded to thrive in the franchise environment. So much so, that in 2011, he was named Franchisee of the Year.

He also will be a forum presenter at the Military Officers Association of America Career Fair held the week of May, 12th, 2014. He transitioned from graduating from West Point to serving as a US Army infantry captain to joining the workforce to becoming an entrepreneur which is the topic of his speech at the Career Fair. Marc is uniquely qualified to speak about his experiences which may help other veterans seeking a path after their honorable service to our country.

Veterans in Business for Themselves

One of the paths for veterans is business ownership. According to the Small Business Association and US Census Bureau stats. many veterans are doing just that. Consider these statistics from a survey conducted by the Census Bureau:

	In 2007 (the latest year figures are available for), there were 2.45 million businesses with majority ownership by veterans, representing 9% of all US firms.
	8.3 percent of the respondents had service related disabilities.
	California, Texas, Florida, New York and Georgia had the largest number of veteran-owned businesses.
	75.1 percent were 55 years and older and tended to be better educated than other business owners.
	Finance, insurance, transportation, construction and scientific and technical services were among the industries that veterans were involved in.
	The largest capital source (reported by 61.7% of the respondents) was personal or family savings followed by business loans (9.8%) from commercial financial institutions.

Often, veterans who go into business for themselves, especially in franchising, can take advantage of favorable offerings to ease the transition. For example, currently, Postal Connections is offering 50% off the franchise fee for veterans.

In addition, the turnkey nature along with the built in support system (In Business for Yourself but not by Yourself) features of a franchise can make it a very attractive option for veterans seeking their hard earned slice of the American Dream.

#### Being Your Own Boss
A recent Gallup Poll indicated that 79% of all Americans still list business ownership which included franchise ownership, as a dream. The best thing about that stat is that the dream lies within your grasp!

The second best thing about business ownership is what comes with it- you are the boss of the whole enterprise. No one to answer to but yourself. It’s a liberating feeling, especially if you’ve spent time in the corporate trenches with less than desirable bosses.

If that sounds appealing to you, the next step is to consider these four questions:

	How much sales, marketing and management experience do you have? If you have been involved as a manager or sales/marketing rep in any size company, you most likely have a solid foundation for business ownership.
	How motivated are you to strike out on your own? This is a key question. If a dream of being your own boss has kept you up at night and occupies your thoughts during the day, it may be a sign you are ready to venture out on your own.
	What level of financial acumen do you possess? Having the ability to understand cash flow, how timely bill paying can save money, how to purchase and where you can get the best returns on your money will help you carry out the most important functions of funding your business.
	Are you truly driven to use these and your other talents to compete and succeed? The possession of an inner drive, cannot be underestimated. Running a successful business means you will be investing in a sustained period of hard work. This needs to match with your personality.

Business and franchise ownership is a life altering decision. It’s best to invest in some soul searching while taking a realistic inventory of your talents, skills and experience prior to starting an any type of enterprise.

#### Changing with the Times: Standing still will get you run over
Franchisors and franchisees alike must continue to adapt to changing customer and employee trends to find opportunities for growth.

Over the years, Postal Connections has evolved from a pack-and-ship retail franchise to adding e-commerce and online sales services to capitalize on growing consumer trends. Learn more in my feature in Franchise Update: 

#### Deciding on a Franchise Product or Service to Sell
It’s a big decision deciding what you want to sell, what business or franchise product or service speaks to you and will also make you money when you decide on what type of franchise to buy or business to own.

Have you ever thought about why stores in your neighborhood sell what they sell? For example, a Postal Connections in Islandia, New York, is an agent for U-Haul and a store in Redmond, Oregon, sells greeting cards and locally made gifts and crafts.

How did they and how do other local stores decide what they want to sell and what would also work in their markets? Here are 15 points to consider when making this decision:

	Do you like the product you’re considering selling to the point that you would buy it yourself?
	Would you champion it to a friend or family member?
	Does it look like the product or service has staying power…will it still be moving over the next five to ten years?
	Can the product be advertised and sold for a reasonable COGS (Cost of Goods Sold)?
	Can you make money selling it?


	Is there a demand for the product in your local area?
	What problem does the product resolve for your customers… how does it improve their life?
	Who will you be selling it to…what are the demographics?
	Do you like the customers who will be using this product or service?
	How will the product or service by promoted and sold?


	Does the need exist for the product?
	What is the guarantee, service process or replacement procedure?
	Name three ways the product is superior to its competition in the area.
	Is the product priced lower and/or of better quality than similar products?
	How is the product or service manufactured or produced?

To sell a product or service, everything has to be right: price, timing, demand, supply and especially your contentment in selling it.

#### Eight Ways to Finance a Franchise
The most important step, if you are seeking financing to buy a franchise, is to create a business plan. Banks, private lenders, and most money sources require a complete, vetted plan to decide on the credit worthiness of your business.

A thorough business plan explains how the money will be used, the state of the industry, a market analysis, the marketing and pricing strategies, your financing sources and costs/sales projections. Many resources are available to help you develop the business plan including the franchisor you are considering.

If you are considering financing a new franchise business, there are many routes you can explore to finance your dream. Below are five of them:

	Leasing- If your franchise involves equipment, you may want to consider leasing instead of purchasing it. Leasing allows you put your working capital elsewhere and also preserves your lines of credit. This way of financing has been used by franchises where the vast majority of start-up costs include fixtures, equipment, signage, or other tangible assets that can be put on a lease.
	Securities-based credit lines- Use your stocks, bonds and other securities as collateral to obtain a line of credit (LOC). This is not reported to your credit bureau.
	Unsecured LOCs- There are programs available that will offer you a business LOC to fund your franchise. You pay a percentage on the loan, very similar to a credit card. No down payment is required and it is not reported to your personal credit.

An important aspect of business is to have controllable and predictable monthly costs so be careful about adjustable rates which can go up dramatically. If you’re making a decision to finance your business with debt, make sure you know what the servicing of the debt each month will be. If your interest cost takes an unexpected jump this could negatively affect the breakeven sales you need, increase pressure to raise prices and/or diminish what you can pay yourself.


	Secured LOCs- An example of a secured LOC is to take out money against your home equity. If you owe $70,000 on a home worth $200,000, you may be able to get 80% of the difference or $100,400 in this case. Some see this as a risky strategy because if the business fails, it could impact repaying on the equity loan, possibly putting the home in jeopardy.
	Retirement Funding- You can use your 401k or IRA to fund your business and not incur any taxes or penalties. This is not a loan you have to repay as your 401K or IRA becomes the banker.  But you will need to form a C Corporation to be held in your 401K/IRA as an asset. It is wise to find legal counsel because the C Corporation has to be formed correctly to avoid taxes on the money you use.
	US SBA (Small Business Administration) Loans- The SBA offers low interest government loans designed to spur business growth. The loan is made by a bank or financial institution and the SBA guarantees the loan. There are numerous qualifying requirements to get an SBA backed loan.  (Note: A recent report co-authored by the International Franchise Association (IFA) stated that lending to franchises from the SBA has increased 60% from the previous year.)
	Private Angel Lending- These are private investor sources who tend to be pro-franchise. It’s faster and easier to obtain a loan this way than it can be through conventional sources. There also might be more flexibility in terms such as down payment and interest rates. The challenge is finding and inspiring the Angel with a compelling, logical business plan or having a friend or relative who believes in you and your business plan.
	Crowdfunding- Crowdfunding sites consist of groups of people willing to fund worthy business ventures.  This is internet based and is used in efforts such as disaster relief, political causes and artist support. It is a relatively new phenomenon for businesses.

KIVA is an example of crowdfunding but it focuses on lending to overseas businesses. So, when you go on that site, you might see a food vendor in Uganda who needs $200 to help buy a booth to display his wares. According to the site, most of the loans are repaid.
For US businesses there are different types of crowdfunding and while it can be a good source of money, there may be some pitfalls, one of which is that the process is very public.
There are many financial firms that offer business lending. A broker that specializes in finding funding for franchisees, for example, may have several alternatives for you to peruse. The broker will help explain all of the financing avenues so you can make a good decision. Some of these brokers also assist writing a business plan for a fee. One online company that does this is www.biz2credit.com. Their business plans are detailed and cover the things lenders want to see.

Do your research to find out which funding source is best for you but make sure that before you do anything, prepare a bullet-proof business plan. It will be difficult to obtain most types of financing without one.

Let us know funding experiences you’ve encounter. There is an enormous amount of capital sitting on the sidelines waiting for the right business to lend to.

 

#### Financing Your Franchise Dream from an Unexpected Source
Did you know that you could finance your business from your 401K or IRA without incurring a tax penalty? When we say finance, we mean all costs associated with your business from living expenses until you get profitable to franchise fees.

Economy Affects 50+ Age Group

Our economy has changed dramatically in the past eight years. One result has been that many employees over 50 years old have lost their jobs and are having difficulty finding replacement employment. Often, they have valuable work experience and retirement savings to use toward another venture because they are not ready to retire. Many would like to create a career bridge to retirement while building an asset that can later contribute to their finances when that occurs.



401k/ IRA Financing Advantages

In our experience with franchise candidates 50 years old and more, we see retirement fund franchise financing becoming an important resource for getting into business. The benefits over borrowing from banks or other financing sources are many:

	You pay the principle and interest on the loan back to your retirement fund. Of course, your 401K or IRA takes the risk. But that risk is often the same one that you would take by borrowing since most lenders require a personal guarantee to pay off your loan.
	Funding via your retirement account does not impact your credit report or score.
	It is often faster to get the funds via 401K/IRA rather than by typical lending processes.
	There are several credible firms available to assist you in setting up funding via your 401K or IRA. These companies have experience in setting up a government accepted C-Corporation inside your retirement account so there is no tax impact and it passes legal requirements as a non-personally directed investment.
	Often the investment of the C-Corporation is only one of several funds within your retirement account.

Tax Deductions

Your C-Corp will cost money to set up and there will be a monthly management fee to the company you select to handle this transaction. The usual cost of this is $4,000 to $5,000 for set up and under $100 per month in management fees. All of these cost are expenses that are tax deductions for your C-Corp.

Choosing a company to assist with setting up your 401K or IRA as a funding source should be chosen by performing due diligence just like in every aspect of your business buying exploration process.

Two sources that will come up when searching for 401k business funding are Guidant and Fran Funding. Spend time discussing their services with them so you can judge how exactly they will support your business.

 (Pic from Fran Net.com blog)

#### Five Paths to Franchise Financing
You’ve found the ideal business in the thriving world of franchising and are ready to live the dream of business ownership where you are supported by the strength of a national franchisor.

As you ponder how to pay for it, there are several sources of funding that you may want to look into:

	Home Equity: If you own enough of your home and feel confident about your business decision, you can take a second mortgage or set up a line of credit with your lender. You will not need a business plan for this type of financing so this method can often be the simplest route to business ownership.
	Small Business Administration Financing: SBA backed loans can be a great source of funding especially for those who may not quality for traditional financing sources.
	Traditional: This is where you go to a bank and get the money. You will need a pretty good credit rating, a solid business plan and some on-hand liquid capital. However, the rates can be very competitive if you meet all of the criteria and your franchisor might even help with your business plan.
	IRA Money: You can roll your IRA money into a business loan. The advantage is that no penalties are associated with this conversion and you will not need a business plan or good credit because it’s your money.
	Franchisor Programs: Some franchisors offer in-house financing or have established partnerships with lending companies. Because the lending company has confidence in the concept, it can be easier to get a loan.

You can also borrow money from family and friends. If you have built up good credit, you might even be able to get a loan online or quality for an unsecured business credit line.

The point is that there are several alternatives to franchise financing. Find the one that works best for you.

#### Five Reasons to Buy a Business
The franchise business has weathered the recession better than most industries and it shows considerable promise moving forward. Plus, this is the time when more people are patronizing local shops allowing for the flourishing of family capitalism rather than big business capitalism. 

Good reasons to buy right now include: 

Seasonality: Be ready to take advantage of the seasonal spikes that occur during the holidays. This can make a huge difference in revenue if you time it right. For example, Postal Connections of America does 2 to 2.5 times their average monthly volume between Thanksgiving and Christmas. That might be the best time to buy that franchise. 

Financing: Not only may sellers and franchisors be more willing to finance but other funding options such as SBA loans, penalty free 401k funding and using unsecured credit are being made more readily available. This trend is definitely headed in the right direction especially when compared with a few years ago. 

Buyer’s Market: Right now, prices on business and the equipment to run them (including real estate) are lower than usual. As with the stock market, it’s good to buy low and sell high which makes now a fertile business buying time. 

When it comes to leases, landlords are open to negotiating favorable terms on prime space for a new franchise operation. 

In addition, interest rates are at all-time lows. If you have a good credit history, you will be able to find excellent interest rates. Keep in mind that as the economy continues to heat back up, so will expenses. 

Job Market: In addition to it being a buyer’s market for opportunities, it’s a good market for hiring qualified employees. Because individuals in all sectors are experiencing layoffs and downsizing, it’s highly probable that you will be able to get the right individuals to help your business prosper. 

Risk: If you are concerned about the risk of going it on your own, an established franchise system reduces the worries of business ownership entry. In fact, it’s one of the big advantages of franchising. You build on the experience of a franchisor and established franchisees that can support and guide you through the process. Another positive is that a franchise system offers the buying power, efficiencies of scale and training you need to build a successful operation. 

If you have a dream to be a business owner now is the time to go out there and make it happen.

#### Four Business Skills Needed to be a Successful Franchisee
Every American has the right and opportunity to become a business owner. It's a huge part of the American Dream and if you have the drive and desire to own a business and create income you can do it, too. It's a dream that people from other parts of the world continue to risk life and limb to acquire.

The benefits of the franchise model are reduced risks to achieving that dream. Postal Connection offers a proven business model and systems in place to help franchisees become as successful as their dream requires.

Skills Needed to be a Good Business Owner
However, It helps to understand a few of the basic tenets of business when embarking on business ownership whether it be an independent business or a venture with an established franchise. While attaching yourself to a franchise can help, you still want know the basics of the following four areas:

Sales: Learning basic salesmanship is essential since sales is what makes any business run. This means knowing how to satisfy your customers, creating appealing offerings and knowing what people respond to in relation to what you offer.

Marketing: This is related to sales but it’s more about understanding where your customers and prospects come from and figuring out how to attract them to your business. A good franchise system can help enormously with this.

Accounting: Basic knowledge of your revenue streams (where they come from and how you can get more), your expenses (and how can you reduce them) and how revenue minus expenses equals profit which every business needs to survive.

Strategic Planning: Usually, when running a business, you find yourself planning 3 to 6 months ahead under an umbrella of a 1 to 5-year overarching strategy. You create these strategies and plans. You also have to be flexible in your thinking and know when to stick with, alter or even jettison a strategy/plan if it’s not working.

A strategy would be something like this: The goal is to increase revenue by 10% in 2016. A plan to achieve that might be that you will introduce high margin products into your mix of offering in 2016.

You don’t have to be an expert in each one of these areas but acquiring some basic knowledge of them will help your business run smoothly. Many community colleges offer useful workshops in these and other business disciplines.

#### Franchise Forecast 2016
The International Franchise Association’s (IFA) state of the industry report for 2016 suggests a positive outlook for the franchise industry.


The report, compiled by IHS Economics, a well-known forecasting firm, projects that the franchise sector will outperform the overall economy next year by posting a 5.1% gain against a projected US gross domestic product increase of 3.1%.
Out of the 10 major franchise sectors IHS tracks, the following six will see the most growth:
-         Personal Services: This includes businesses such as spas, childcare, tutoring, hair salons and specialty niches like learning-to-paint franchises. The growth is tied to the growing disposable income of the aging population.
-         Lodging: With travel increasing because of the improving economy, many of the major hotel and motel chain franchises are expanding across the US.
-         Business Services: Business services including tax franchises, staffing companies and pack and ship stores are also in a growth mode fueled in part because of the increasing number of self-employed workers who do not operate out of offices.
-         Fast-Service Restaurants: Consumers are looking for better quality food served quickly. Franchises in this sector include Panera Bread and many of the fast food chains. This category is responsible for 40% of franchise employment and has 20% of all franchisees.
-         Retail Products and Services: Stores including 7-Eleven, Pearle Vision and GNC are all niche stores that are posed for more growth in 2016 because of the country’s economic growth.
-         Residential and Commercial Services: Along with the increase in business in general, places that service businesses like Service-Master will also grow.
2016 appears to be another good year for the franchise sector. Along with the built-in advantages of the franchise system, franchising might be the right choice for many aspiring entrepreneurs.

#### Franchises Built for the New Normal
As published in the October issue of Global Franchise Magazine.

We live in interesting times, which a Chinese proverb tells us this is a curse. In franchising it can be a blessing to those franchise models that see flexibility and a focused view on customers.

Artificial intelligence is powering business automation; and digital technologies are transforming clunky analog processes at a rapid pace into self-help time and cost efficiencies. Franchise industry adoption of new age operating processes is in full swing, so there is no slowing down the future. 

As a consequence of the pandemic and continually changing consumer behavior, what we once thought of as normal business practices just a few years ago will never be the same. Your franchise business could be in peril if you utilize stagnant “old-school thinking,” ignoring the modernized preferences of today’s customers with special attention on differences among different generations.

Franchises that have remained flexible and nimbly embracing change are being rewarded, often driving record sales and new unit growth. Unique innovations across industries have been implemented to entice today’s consumers in new ways, such as double drive-through lanes to keep fast-food fast. Ecommerce delivery drop-off and pickup packages at pack and ship retail stores adds time-saving convenience and service when needed. Postal Connections® has been following a retail business strategy of blending high tech with high touch service to remain relevant for consumers and local businesses. Paperless and cashless transactions are another technology driver impacting retailing. Recognizing this at Postal Connections, a new consignment sales service using eBay enables customers to turn over the selling of their items online to our staff expertise and iSOLD It® automated system. Using a software system, staff are able to assess item values and sales volatility to advise customers on pricing. Seller identities are transparent online, automated payments are received and franchisees earn a service fee that is directly deposited by eBay into their business account.

In another retail sector, a 2020 study from Wakefield Research found that when faced with change, 85% of restaurants completely reorganized their operations, changing the way they interact with customers as we know it. But, restaurants are not the only ones impacted by modernizations, all of franchising has been impacted. Thus, here are three things to keep in mind as you consider your evolutionary plans for the new normal.

 
Embracing New Technologies 
Technology innovations are the driving forces of our modern society. A whopping 95% of Americans own a cellphone of some kind, with over 85% of those being smartphones. This means that a great minority of the American population does not own a smartphone. One aspect at the intersection of technology and businesses coming together that has taken off is mobile applications. In 2018, 42% of small businesses already had a mobile app, and this has only increased in the last three years. Now, businesses can be an earworm in our phones and with consumers carrying a piece of them everywhere we go.

With increased technology, the way we think about currency has changed. Years ago, the concept of  “cashless” businesses was unheard of, and now, especially in big cities, they are a normal occurrence. What started as the takeover of credit and debit transactions, is now the takeover of mobile payment options such as Apple Pay, or even unconventional payment methods like Bitcoin. With the click of a button, you can pay for your items without picking up a single penny. Though not all businesses will or even should go cashless, providing sufficient currency options for customer payment is essential in the modern era.

Home delivery options within businesses were proven to be saving graces throughout the pandemic and continue to remain a staple. E-commerce has simply soared to unimaginable heights due to what began as stay-at-home orders and turned into time and convenience efficiencies for society at large. Postal Connections has seen a surge in our pack and ship services from this transformation (systemwide revenues were up nearly 10 percent in 2020 over 2019. Currently franchise locations are nearly 15 percent up in 2021 over 2020), and we’ve embraced by reinvesting in our own technologies to reinforce the uptick in delivery preferences for consumers and businesses.

Whether it is taking the form of delivering food from a local restaurant through third-party mobile applications, or e-commerce orders for whole new wardrobes through extensive online shopping options, the ease of not having to leave your home matched the needs of modern consumers in a post-pandemic world. For instance, we have adjusted to at-home convenience with our proprietary iSOLD It on eBay operating system. It works on mobile devices so Postal Connections staff can go to a seller-customer’s home or business to start our service. Robust e-retailing options are one of the most transformative aspects of new normal operating processes, though concerns remain with supply chain issues.

 
Labor Light
 According to a 2019 study from Oxford Economics, Robots could take over 20 million jobs by 2030. Where factory workers once sat, and secretaries once made phone calls, there could be an individual computer controlling all of the work. Labor supply for many franchise sectors is as small as ever, and businesses are looking for ways to operate “labor-light” business models, requiring as few bodies as possible.

We have all heard complaints that robots are growing so complex that they have the ability to take over our jobs. Though this sentiment is often laughed off, it is a genuine reality and concern. But, given current labor shortages, there may be no other answer. The more automation built into business models today, the greater the likelihood of operating a business designed for today and beyond.

Likewise, the simplicity in business models needs to be optimized – the lower the employee count, the greater the attractiveness of the franchise for franchisee recruitment. Today, blending high tech with high touch services fosters personalized attention with as little as just a few employees. The combination of human interaction and tech forward innovation becomes a powerful benefit for many who want to save time, don’t want to do it themselves or seek expertise and comforting attention. Especially among service business franchises, the human element is key to customer loyalty and earning a margin for being there.

One aspect that many businesses have adopted is the concept of “self-service.” This takes the form of self-checkout at a grocery store or an ordering kiosk at a restaurant.

Another dying concept is that of picking up the phone. 88% of Millennials prefer texting over phone calls, and the same can be said for Gen-Z. Picking up the phone and engaging in a time-consuming conversation that could have been a simple text feels like a waste of energy for these groups. Nowadays, to accommodate these young individuals, there should always be an online option. Being able to make a haircut appointment on an app at the click of a button versus having to spend time speaking to another human is a sigh of relief. Scheduling and booking appointments, tickets and more online takes franchise industries is a huge step in the right direction.

When we look at customer satisfaction, consumers tend to be happiest when the task requires the least time and brainpower. The “labor light” model with fewer employees, do it yourself options, and single-click versus phone call options make the world run smoother, especially among younger generations who are the most savvy technology users.

 
Supply Chain
Right now it is hard to get many things. We are consistently hearing about shortages within the narrow supply chain crowded with back orders. Supply shortages are up 638% in the first half of 2021. It is vital that businesses dependent on hard and soft goods, foods and delivery of operating supplies remain up to date and prepared to tackle these challenges.

The modern business will make adjustments to accommodate services and offerings depending on product availability and delays, without compromising quality and reliability. One example of this recently were the U.S. meat shortages. Supply chain issues are to blame. These shortages have led to shifts in consumer behavior, and leave consumers looking for alternatives. Other shortages include car-chip shortages, impacting the number of new cars produced, home furnishings and less essential items such as pool equipment.

In the very near future, drones may very well be dropping our stuff off, and we may leave our own homes less. People are continuing to work from home (with roughly 22 million Americans still in “WFH” mode), shop from home and do things without any human interaction. This is new behavior, and a big change from old fashion ways, but adaptation to new supply chain requirements is imperative. We are gripping onto any human interaction we can get, though now we are launching into a new normal filled with endless possibilities and personal capabilities using technology. Agile and flexible franchise concepts will flourish as they recognize that younger people from a new generation coming into consuming and commercial leadership have the right to do things the way they want.

Fred Morache is the COO and Managing Partner of Postal Connections/iSOLD It, bringing more than 25 years of experience in the franchising and pack and ship industries to his leadership role.

#### Franchising 2016- More Projections
From 2010 to 2015 franchising has seen nothing but strong growth. Consider these two statistics:

- The economic production of franchise establishments has increased from $699 billion to $892 million.

- The number of franchise establishments has increased from 740,098 in 2010 to 795,932 in 2015.
2016 Projections
The International Franchising Association (IFA) projects continuing growth in its Franchise Business Economic Outlook for 2016 prepared by IHS Economics. It’s expected that the number of franchise establishments will grow by 1.7% this year: 
- Franchise output will increase by 5.0%.
- Employment by franchises will continue to remain strong with 3.1% growth.
- The six-year period from 2011 to 2016 (projected) realized a 2.7% growth which is 0.5% higher than all businesses economy-wide.
     A driver of this expansion will be the expectation that business spending will grow in 2016, boosting franchises that provide business services. In fact, business services franchises are projected to rank first in the growth in establishments and are tied for second in employment growth with a 3.3% gain.
Fast food and table service restaurants are also expected to expand nicely throughout 2016.
What this Means to a Prospective Franchisee
Franchising comes with built in advantages most prominent of which is that most mistakes have been bled out of the enterprise for prospective franchise owners. The business system a franchisee works with offers proven business concepts. This means in each of the main business disciplines like finance, marketing, sales and operations all of the processes and procedures have been refined to reflect what exactly is needed to make a successful business.
For example, in marketing, a franchisor will be able to explain to its franchisee what marketing works best (the internet, trade journals, industry shows, etc.) for the business. If the franchisee focuses efforts in those areas, odds are, they will pay off if executed well.
Another built in advantage is if franchisees struggle, they can turn to a support network that includes others that have faced and conquered the same issues. The accelerated learning curve very much works in favor of success for all franchisees.
The fact that the franchise industry as a whole is performing well for the US economy is a positive factor for the prospective franchisee to consider during the due diligence process. Simply put, it means the franchising concept works and is a viable way to make a living and in the process, possibly help others make a living as well.

#### Franchising and Millennials - A Surprising Match Made in Heaven
Commonly, the main group of individuals interested in buying franchises has been those on the “bridge to retirement,” as I like to call it.

The “bridge to retirement” refers to those who have had a successful career in their established industry, and are now looking for the opportunity to be their own boss and establish a new source of income. This franchise ownership will carry them into retirement and could be an excellent opportunity to provide their family with an existing business.

However, in recent years, a new group has emerged in the franchise ownership space: Millennials. Gen Y, or Millennials, are the generation made up of those today who are between the ages of 25 and 40. Many Millennial-aged professionals are choosing to take control of their personal and professional futures by grabbing hold of the opportunity to enter entrepreneurship. Only now, more and more are choosing to do it in franchising, mainly because of the level of support and the proven business model that comes with a franchise. It almost could be considered entrepreneurship with a parachute.



Business, especially franchising, must deal with the most powerful force known-to-man: Aging. The latest statistics reveal the obvious that “the two generations following the Baby Boomers are larger and growing faster than Boomers who are aging out,” according to the Pew Research Center.





As reported by FranchiseInsights.com: July 21, 2021 – For the first time in history, more Millennials are seeking franchise ownership than Baby Boomers. While Generation X, has shown the greatest share of franchise interest for some years, that share may have peaked in 2020 at 48.2%, based on year-to-date data in 2021 through June.

The Gen-Y or Millennial cohort (ages 25-40 in 2021) is growing rapidly in share, and now makes up the second largest generation of future franchise owners at 24.7%, edging out Baby Boomers at 23.4% of franchise inquiries.

So, what does all this mean? See the last discussion in Franchise Fred below. Millennials are interested in many things at home and work that have not been the priorities of the Baby Boomer (ages 57-75 in 2021) and the Gen X cohort (ages 41-56 in 2021). Technology, environment, personalized service and meaningful work come to mind as top priority among Millennials. Franchises that embrace these aspects of human endeavors and business interests will fine the greatest appeal.



Millennials now represent nearly 20% of new franchise owners, otherwise known as franchisees. Plus, that number is increasing in part because this age group brings a lot to the table. Their skillset often works hand-in-hand with owning and operating a franchise business.

Some of the talents commonly found in Millennials include:

 	Increased collaboration
 	Enhanced problem solving
 	Interest in self-improvement
 	Competent communication

Let’s explore some of the main reasons why Millennials are a great fit for franchising.
Strong knowledge of technology
Technology and computers are as natural to this generation as walking. Millennials are the first generation to have been raised in a highly tech-advanced culture. The ease with which they absorb new technology makes them skilled for franchise business management, which is a challenge to older franchise prospects.

Millennials fully embrace digital life by not only purchasing technology but also consuming technology in their daily lives. To stay up to date with the latest trends and consumer behaviors, almost all businesses are now building platforms and digital tools, which boost their effectiveness. These tools, such as mobile applications, can embrace the franchise owner and customer needs and expectations.

In 2021, the integration of technology into businesses is a must. As an example, we have invested heavily in advancements for our franchise, Postal Connections/iSOLD It®, and now consider our concept to be at the leading edge of the business services franchise category. New service centers are equipped with digital menu boards for ease of customer service, websites configured to download files and online ordering and as well as eBay technology, such as Quicklist™ for iSOLD It services, is being implemented.
Purpose
It’s a common misconception that this generation is lazy and unmotivated. Rather it’s quite the opposite. Millennials are just motivated differently than previous generations, and we have to take that into account as they pursue franchise investments. According to a 2018 study, Millennials want to spend their time doing work that has a positive impact on others.

Millennials seek purpose in their lives and their careers. Many are naturally inquisitive and eager to learn from others, making them great candidates for franchising. The best type of franchises for Millennials are those with strong missions that give back to their communities to tie into a greater purpose. At Postal Connections, we start when our candidate joins up as a franchisee with explaining what our operating values—service that is trustworthy, friendly, savvy and leading edge—means to business activities and treatment of customers.
Schedule
Being tied to a desk and a specific schedule is often viewed as an ancient practice for Millennials. Online meetings, classes, and smartphones have made it easier to be efficient and flexible with scheduling. It has been found that companies that offer flexible scheduling are much more successful than those with the standard 9 to 5 schedule. When you can “be your boss” you can have the flexibility that you would like. Owning your own business and making time for family or other commitments when needed creates freedom and control. Franchises that offer business models with flexible operating standards, instead of regimented and mandatory requirements offer Millennials a place to apply entrepreneurial creativity to advance the business.

One of Postal Connections’ newest franchisees, a Millennial, Lee Kennedy in Bend, Oregon, has found a great path with opening his first Postal Connections franchise. He has chosen to operate the business with help from his family – a selection he made strategically as a way to incorporate those he loves into the business for now and future generations. His strong desire to learn and grow within his business and the community is proving to be an asset.

“I have been impressed by the Postal Connections franchise model since day one and have witnessed firsthand how a business service center with time-saving, personalized services will meet the needs of residents here in my Bend community,” said Lee Kennedy.

As Millennials begin to lead us from the office life and launch their careers to new entrepreneurial models through franchising, we can learn a lot from them. Careers are moving away from what we once knew, and begin to incorporate more technology, purpose and flexible scheduling of work, we look ahead to new, successful models of franchising. Franchises that accommodate savvy customer needing support working in with online commercial and customized service solutions.  The future of franchising is expanding beyond the traditional “bridge to retirement” goals, but is a refreshing direction to launch careers as “budding entrepreneurs” for a new generation of individuals becoming their own boss.

#### Franchising Over 50
Business myths are rife with stories about youthful entrepreneurs who concocted wild ideas while eating pizza in a tiny college dorm room, raised hundreds of thousands of dollars of VC capital and founded million dollar ventures. While this does happen, it is rare. The typical entrepreneur is a middle-aged professional who taps into a market need and uses his/her own savings to get into a venture like franchising, for example.

In fact, AARP's (A nonprofit, nonpartisan organization that helps people 50 and older improve the quality of their lives) has done studies on self-employment and the over 50 population. Their research indicates that almost half of the self-employed population is over 50. What’s more about 33% of those first became self-employed at or past the age of 50.

The over 50 years proved to be the best time to start their own business for these people. For many of them, buying a franchise was the best way to do that. It’s a trend that is expected to continue for the foreseeable future.

Why? Well, many franchisees are retirees or downsized corporate soldiers who always wanted to own their own enterprise. With rising life expectancies, at 50, there are most likely many years of fruitful labor remaining in their lives.

Also, do not underestimate the power of mid-life reflection. It’s a time when people seek meaning in their lives. Working in a career that is not providing fulfillment can often be a springboard to considering a franchising opportunity.

A franchise can be attractive to this age group because it’s a fast way to get into business with a proven product or service. Coupled with a good support system, it can make entry into small business ownership franchising a less risky proposition.

Understanding and wanting to fill a business need comes from experience and experience comes with age. Hopefully, a little wisdom does also. Because owning a franchise can be a beautiful experience in this rich stage of life. http://www.postalconnections.com/franchise-opportunities/ 

#### Franchising Service and Advertising
Simply understood, customer service is the value added during a transaction. This is especially important when the product is a commodity. It’s about the extra value a customer gets when they buy a product readily available in many other places.

Successful service franchisees have figured this out and are overcoming economic issues and competition. They know people like to have a healthy dose of value added in commercial relationships.

Consider these stories:

	A Play Station System got snatched from a doorstep. Although, Amazon was not responsible, the retailer sent a replacement, didn’t charge for shipping and got it there in time for Christmas.
	A security staff member at Nordstrom’s noticed a customer crawling on the floor looking for a diamond that had fallen out of her wedding ring. The staff member recruited a small team to help her search. They found the gem while picking through the dirt and debris picked up from the vacuum cleaner
	A woman ordered six pairs of shoes from Zappos to test after undergoing medical treatment that left her feet sensitive. Her mother called to receive instructions on how to send back the shoes that didn’t work. Two days later the daughter received a get well flower bouquet. Then, her, her mother and sister were also upgraded to “Zappos VIP Members.”

As service guru Tom Peters writes in Beyond Close to the Customer:

	Service is about turning adversaries into partners
	Service is soft and low tech - about attitude, listening, perception and empathy
	Service is about delight, not satisfaction

Service differentiates your business so allow your passion for it to stand out.

Advertising 

According to a recent study in Ad-ology, when a business continues to advertise, especially in tough times, consumers see this as a sign of commitment to their enterprise.

It’s not only good for consumers, it’s good for businesses to advertise because:

Your message is more likely to get noticed and your business is more likely to be remembered when businesses start advertising again.

In fact, tough times are an incredible opportunity to build market share. Studies through recessionary periods in all decades (only three shown here because of space) showed:

1990s: Jif and Kraft Salad dressing grew sales by 57% and 70% respectively by advertising during a recession. (MarketSense Research Study)

1980s: Sales of aggressively advertising firms during the recession grew 275% over those who didn’t. (McGraw Hill Research Study)

1970s: Companies who advertise and market hard can not only maintain but increase their revenues during a recession and subsequent years. (American Business Press Study)

Throughout the Great Depression and all recessions, Proctor and Gamble practiced a philosophy of not reducing advertising budgets even while their competitors cut ad buys. It’s not a coincidence that the company progressed during each of these economic downturns to become the giant it is.

#### Franchising Trends
Franchising Trends 

With franchising growing every year for the past six years, the successful franchisees and franchisors, for that matter, stay on top of societal trends to keep business booming.

Demographic Changes

US population shifts impact today’s consumers and as well as the labor force. Owners must adapt to this shifting base to mine growth opportunities:

Millennials- This cohort, born roughly between 1981 and 2000 affect everything because of their sheer numbers which are greater than that of baby boomers. Raised on the internet and technology, this group loves to be catered to. They want the owner to know what they want before they even go shopping!

Baby Boomers- As they age, boomers need new and customized services including housing, fitness, aging parent assistance and financial and retirement planning. Other programs and services tailored to their aging experiences will be in high demand.

Minorities- A new majority consisting of Hispanics, Asians and African-Americans is being formed. The growth here presents new opportunities for franchises focused on serving these groups.

Growth Areas

Recession-proof businesses- Businesses like shipping and packaging, hair care, tax preparation, childcare, pet care, computer services and many more do well in any economy. House cleaning and mailing services businesses especially appeal to those who want to stop doing maintenance work in order to pursue more life-fulfilling activities.

Personal care- This includes fitness centers, spas, tanning centers, healthy fast good and tailored education programs designed to improve physical appearance and mental well-being.

Green businesses- With LEED-certification and other guidelines aimed at sustaining and improving the environment, opportunities have arisen in areas such as home improvement, energy savings and green home care.

Staying current with these trends helps the franchisee and franchisor stay relevant in the ever-shifting market.

Fred Morache is a franchising expert and a partner in Postal Connections of America and iSold It franchisors.

#### How to Decide Between an Independent or Franchise Business
How to Decide Between an Independent or Franchise Business

When you decide to buy a business, one of the first decisions you will face is whether to purchase an independent or a franchise business. People succeed in both kinds of enterprises but there are significant differences between the opportunities. A big part of the choice may also be how well either one meshes with your personality. Talk with family, friends and trusted advisors to help get insights to this major career choice. Here are some points to consider:

Business Model

As an independent business you can change, add or eliminate products and services as you assess what works best in your market or even determine what your personal feelings are about what you sell.

A franchisor usually makes those decisions for a franchisee.

However, an independent business owner does not possess the security knowing that product lines and services have already been tested and maximized for the market. Franchisees give up the decision-making independence but reap the benefits of the tried and true.

Costs

In most cases, franchises have lower total investment expenses, especially up front. But, they have to pay ongoing royalties and may have little say in the timing and scope of other investments and renovations.

If an independent business owner is having a cash flow issue, expansion can be delayed. The owner can dictate the terms of any projects they pursue.

Brand

This can be a big advantage for franchise buyers. If the brand is well known and constantly cultivated, they will benefit from that exposure. It’s unlikely that an independent business owner will have the advantage of brand recognition unless it has been proactively marketed.

Resources

Franchisees have the advantage of a business system, a network of suppliers, marketing support and other services. These are especially helpful to those who might be lacking formal business education and experience.

Independent business owners are on their own. They have to develop their own supplier network, set price points and develop marketing strategies, all vital and daunting tasks, particularly for the novice. It can also result in a lot of trial and error to help figure out what works best which costs time and money. The independent business owner, however, retains complete control.

Support

Who can an independent business owner call in times of trouble? Maybe an outside advisor. A franchisee can call other franchise owners knowing they are experiencing the same situation. They can also call the corporate headquarters to get assistance in everything from training to troubleshooting.  That can bring a significant degree of comfort to the entrepreneur taking the business ownership plunge for the first time.

At the end, make sure whichever opportunity you select matches your personality.

Fred Morache has spent many years in the franchising business and is currently the managing franchisor partner for iSold It and Postal Connections of America franchises. 

(Pic from Te-deum blogspot)

#### Keeping the Connections: New Franchisees Discover Desirability of Business Services
The rise of e-commerce shipping, coupled with increased demand from residential and commercial shippers, has many of our own customers taking the entrepreneurial leap to purchase a thriving, recession-resilient Postal Connections® franchise in their neighborhood.

The pandemic has changed the way people work, with less commuting and more done online, resulting in local business services. Postal Connections franchises are performing well by delivering much needed business services. Locations are thriving with loyal customers who value service and trustworthy delivery.

Plus, new and currently operating franchise locations are being purchased by enthusiastic customers eager to become their own boss. Postal Connections offers an entry business, that is easy to learn and a rewarding retail concept for those who like people and solve their needs.

Standout franchisee Brent Kyzer-McHenry took ownership of Postal Connections in Verona, Wisconsin, from retirees Dan and Laura Brennan, earlier this year.

As he continues to build on a 15-year legacy of success, Brent quickly hit the ground running in his community and became a top-performing location nationwide in just a few months. He was recently honored at the 20th annual Postal Connections franchisee convention with the prestigious Top Sales Award.

“It couldn’t have been a better fit for me career-wise and lifestyle-wise,” Brent told The Verona Press. “I am excited about it. The business has grown already. Shipping has gone up exponentially. Especially since COVID-19, people are shipping more than they ever have.”

Other recent franchise transferees have realized the equity and potential. In addition to Verona, Postal Connections service centers recently were acquired in Hockessin, DE, Stevensville, MI and San Diego CA. Importantly, Postal Connections is a growing choice of new store buyers. Recently opened, Postal Connections in Melbourne FL is led by a longtime UPS store manager. In Sunriver, OR, the new franchisee worked as a FedEx Office employee and our newest franchisee operated independent stores in Arizona and San Diego.

We provide a large number of services with trained expertise ranging from shipping choices to digital fingerprinting to professional printing to selling customer items for them on eBay.

Explore how we differentiate ourselves in the $2 billion pack-and-ship industry. If you’re ready to get started on your pack-and-ship business, inquire today to get started.

#### Leadership- the Five Bs
Leadership styles vary just as people do. Usually, the ways individuals lead are outgrowths of their personalities. Some are bombastic, some quiet and others are mix of many traits. However, there are ways to act as a leader that transcend all personality traits… the five Bs:

Be Yourself: In a time rife with phony smiles and chameleon-like changes because of the circumstances, stay authentic. Be true to yourself. It makes others feel like they know you and because of that, they want to help you be successful. And make sure you put the best part of yourself for your employees and customers to see.

Be an Immigrant: This means that when you arrive on new shores, you look at the landscape, including opportunities, with fresh eyes.  Everything is not only new, but exciting! You cannot wait to sink your teeth into what you’re about to face. You may even see potential that others miss.

Be Calm: Screaming does not work. If your customers or employees spend time wondering about what mood you’re in, not much gets done. Stay calm, steadfast and focused on the tasks on hand.

Be Accountable: This may be the toughest of all because this includes acknowledging when you make a mistake and few like to do that, yet we all admit we make them! If an error has been made with an employee’s pay, a customer’s order or a supplier’s shipment, ‘fess up and fix it. People know mistakes are made. It’s how mistakes get handled that separates the true leaders from the posers.

Be Questioning: Business owners often fall into a: The process is good because that’s the way it’s always been done or if it’s not broke, don’t fix it mentality. Question everything! If something has been around for a while chances are it could use some scrutiny.

If you can maintain the spirit of the five Bs, not only will you have set the foundation of good leadership but your company will flourish.

http://www.postalconnections.com/franchise-opportunities/

#### LOCATION, LOCATION! But First What is the Business
Typically, when people make the decision to own their own brick and mortar business, they begin to envision themselves in a specific location. It’s natural to think about where your business would operate considering you’ll be the owner, you know the community, and it’s probably a venue or address you’ve always found well-suited for a business.

Franchising offers a strong opportunity for entrpreneurs to pursue those business ownership dreams right in the community where they’d like operate. In fact, in many cases, franchises offer sophisticated real estate site mapping services to provide accurate information about opitmal location placement. It will include drive-by traffic and many other details pertaning to the viability of the location.

Not all franchises can offer a new location in your neighborhood or dream location. Of course, many established franchises already have someone occupying a protected franchise territory which blocks new franchisees with the same brand from doing business inside the current franchisees designed territory. This is important to all parties concered and avoids dimenished revenue potential and failures. Frequently, established franchise brands first select a site and offer than offer this to a franchisee candidates.

However, many franchise candidates believe they already know where to place their units and they start scouting locations, contacting real estate brokers and begin to get “hard wired” into the fact that “this is the place.”

Yet, in most cases this puts the cart before the horse. Since every franchise has a different set of characteristics that have proven the model out, it’s important to first match up with the franchise model of your choice, then look for a location. A potential franchisor should be able to describe the type(s) of neighborhoods, traffic paterns, customer income levels, kids, etc. are needed to be successful. The franchisor should be able to expalin competitor issues and greatest potential where the“under-served” marketplace(s) are. Get this information when you start looking to save time and intelligence for where to go for a good location.

The franchise model that you choose to join is an invaluable guide in the site selection process. With that said, there are always a few things to keep in mind when considering locations to open your franchise:

 	What size location does the franchise’s corporate leadership recommend?

 	You pay rent based on how much space is being occupied. Too much room is wasteful because space cannot be used to produce revenue. Too little space and there is not enough room to tend to customers and maintain back-of-the-house operations. Early in the process of considering a retail franchise selection, visit an existing franchisee’s business. View how the location’s space is used first-hand.


 	How well do you know the area?

 	The key here is knowing the immediate and surrounding areas like the back of your hand, including where direct or indirect competitors who may influence your prices up or down are operating. Assuming you’ll do a great job with delivering the product and/or service, will your franchise business depend on generous margins from loyal customers or mainly from other demographics? First consideration is to think as a customer might. Convenience is KING. Is a location easy to travel to? Can you get into and out of the site without dealing with no-turn postings or difficult traffic? Is there enough parking near the store?



 



A few years ago in Southern California, one of my pack, ship and postal store Franchisees chose what at first look seemed to be a perfect site. The space and rent level were OK. The location was at the corner with a high-level of traffic who would see the store sign and know what was being offered. And best of all, it was one door down from the hottest coffee shop concepts.

After signing the 5-year lease it was discovered early that the popularity of the coffee shop was a plague to nearby parking, easy access with drive lane lines and coffee customers who came and left without a 2nd stop to other mall merchants.

The lady Franchisee resolved at the end of here 5-year lease not to renew and move to a larger space 100 yards to an adjacent mall. She kept her customers from the first location and spike new revenue helped by accessible parking, easier access and egress and more space to offer new products and service.

Consider from the start whether high traffic counts into the center can be a boon or curse for the personality of your franchise business.



 

Shopping malls can be a great location for franchisees to open a site. A shopping mall-based business will bring traffic and customers on your first day of business. Remember these hints when you start the site-selection process:

 	Having an exclusive right in a retail mall or shopping center to sell your specific items is a major key.

 	The right to sell things in your store needs to be defined on the lease. It’s important to know there usually are two categories of “Use” in a commercial lease.  One is “exclusive use” and another is right to sell even though another store or business is selling the same or similar things. “Exclusive” is the key to avoid competition from retail neighbors in the mall such as grocery stores, pharmacy or other businesses that sell a specific product that you also sell. Start your site selection efforts by getting information on “Use” for any location you may think is good for your business. Landlord’s, R.E. brokers or questioning current tenants can get you this info. It will save time if you do this up front—don’t wait until you ask for the lease. Be ready, learn what may be competitive threat by getting product/service sales percentages in a typical store. The franchisor will know this.  It’s important to know if a sales item is a minor portion of your revenue and negotiate the right to sell but not exclusively.


 	Be aware of your direct neighbors and other nearby businesses.

 	Often, the mix of fellow mall and shopping center occupants or nearby businesses may be traffic generators for the area surrounding the site or, they can deplete customer traffic to your business. Grocery stores usually boost traffic for their neighbors while destination enterprises such as furniture stores, home improvement, auto parts, movie theaters, etc. where people come, buy, and leave, can hinder traffic.



Keep in mind these specific things your franchisor can help you determine when finding a new site:

 	Help review the lease with you before you engage an attorney.

 	Legal advice is expensive yet needed when you are considering signing the lease. The franchisor is there to help review the lease and guide you concerning typical terms.


 	Rent and common charges

 	Negotiate a rent abatement for the first few months. This is usually a reduction and not free rent. Monthly abatements from the front of the lease can be added to the back of the lease, so make sure to negotiate shrewdly. Typically, landlords will abate the first few months, but not the Common Area Charges (CAM). This occupancy cost also called the “Triple Net” monthly charge for taxes, insurance and administrative work managing the property. You pay a portion of the total mall or center CAM based on the percentage of space you occupy. Learn what this expense is when you get the rent figure because frequently it can add 25% to 33% more to the rent.
 	Franchisors should be able to tell you how much a typical franchise business should get in what is called “tenant improvement” allowance. This is money the landlord allots to the new business to customize the location for the specific model. Know the condition of the space you’re considering. If the site is new or perhaps recently vacant, the tenant improvement may need removal of walls, a new ceiling cover or flooring, relocating utility outlets, paint, etc. These improvements can be costly and impact your initial investment and cash operating reserves. So negotiate aggressively! Most important be assured by the landlord the heating and air conditioning system (HVAC) is inspected with a certification it is good condition. This item when it goes down can break the back of a new franchisee.


 	Location-based services

 	The franchisor should identify all necessary vendors that can service important supplies and goods due to the location and protected territories of competitors. Be sure your franchisor discloses whether there are any typical items the franchise model sells but cannot be sold at the location chosen. This frequently occurs with a nearby competitor has the exclusive right to sale an item your business depends on. It also can occur if a vendor product/service cannot be sold in a business model in your city, county, state etc. This can include districts and proximity to a school



Learn more about franchising opportunities with Postal Connections.

 

Are you still learning about franchising and do you remain curious if it is right for you? Lean into franchise investing a bit more with Postal Connections/iSold It’s top executive Fred Morache.   For a fresh perspective and high-quality educational information on franchising, read the Franchise Fred blog. Check back regularly for new articles!

#### Locking into the Franchise Formula
One of the main differentiators between buying an independent business and purchasing a franchise is the franchise formula. But what is a franchise formula? It is a proven model for marketing and operating a business from lawn care to garage door installations to educational systems to cupcake shops to a fast food restaurant.

Independent businesses also have a formula, but their model is about that specific operation and how the current owner works the business. It is not a proven formula beyond its current state because there is no proof of it working in another locale or under a different owner.

Asset Value

When you own a franchise business over many years you are continuing to pour value into your business and the franchise as a whole. As a result, the ability to sell if/when the time comes appears to be much greater. This is due to the fact that the franchise business is working in other locations among other owners.

What you’re really doing when you buy a franchise is investing in its formula. The impact of that can be seen in the business support you receive. (Remember, when you buy an independent business, the owner usually leaves after a short period of time and you’re on your own.)

Franchise support is typically extended to:

	Marketing to target customers or protected territories
	Operations support that starts with a complete description (manuals) of how the business works
	Training, ongoing support and business concept updates
	Financial sourcing and planning in support of the business’ progress
	Site selection if the business is location specific
	Brand identity



Due Diligence

Of course, not all franchises are created equal. And it is the individual’s duty to perform due diligence and confirm that the franchisor is meeting the basic expectations of the franchise formula. This is done by reviewing the franchisor’s claims, investigating current franchisee performance and carefully studying the Franchise Disclosure Document [FDD].

The final step in validating the franchise formula is having a personal meeting with the franchisor. This is where you get to probe about the business philosophy and the company operational practices. See if they’re realistic and most importantly, if they fit your expectations and personality.

(Image from Franchise Direct)

#### Married Couples Turn to Franchises To Own Their Own Business
The last year-and-half has seen rapid changes to commerce and where we work and live. Beyond the much-reported ascendancy of ecommerce and working-at-home, there is strong evidence married couples are seeking new opportunities to be their own boss. They want to participate in the American dream to own their own business, opposed to working for others. Large numbers of married couples are turning to franchises.

Franchising has unique, positive benefits for married couples wanting to control of their careers while building a financial asset. Couples have unique advantages to join a franchise. They combine financial strength, talent, and family support frequently with participating children.

Research from FranchiseInsights.com by Franchise Ventures, a large collection of internet lead-source companies for franchisors, measures and analyzes online franchise candidates who come to them to investigate opportunities.  From January to April 2021, it is revealed that “Nearly two-thirds of prospects [candidates] interested in buying a franchise are married….” “This is significantly higher than the national marriage rate of 55.7% for adults aged 24 and older.” 

Married couples exploring franchise opportunities, according to FranchiseInsights.com, account for 65.5% of inquiries and are significantly above the national marriage rate of 55.7% of adults 24 and older 

Business is exciting. Not only the financial rewards but also the emotional gratification especially shared by a man and wife team. As an entry-level business model franchising is a good option since you start up with a proven business, something that works. For married couples, the franchise business formula is ready to go and ongoing training and support enables the couple to combine their financial strength and apply different talents while maintaining a household or continuing a separate career or simply keeping either person from becoming exhausted. Plus the old saying about franchising applies: Go into business for yourself, but not by yourself.
From my years in the franchise business here are key ideas for married couples:

 	Test with discussion what is the most important, 1 goal spouses shared. Before looking into a franchise business, before investigating a formula—e.g., restaurant, senior care, cleaning, plumbing, educational tutoring, etc.—agree on the reason you want to own your own business. This is critical to combining talents and energy as business partners. A few examples:

 	

 	Make as much money as possible
 	Build an asset and income bridge to retirement
 	Create a family business
 	Gain experience as a business owner while building an asset that can be sold
 	Have a business near home
 	Develop a multi-unit business with greater revenue and asset value









Investing in franchising by married couples has the career strength and creativity from two entrepreneurs with the multiplier of talent for operating the business. Below are three examples for how this has worked for others.

Elizabeth & Jim Bowe Franchisees (center), and Franchisors Andy Thompson (Right) and Fred Morache (left)

Couples focused on their shared No.1 goal in choosing a franchise investment. This is demonstrated in a couple’s priority to build a family business. The couple bought out of relative’s failing franchise and revived it into be a thriving, profitable venture. Combining their talents a commercial airline pilot and housewife-mother concentrated on building a family retail operation, turning the store into one of the national chain’s top performing sales units. They achieved a million sales operation in one store. 

But priories grow, just as families do. Now the couple own three franchise stores in southeastern Pennsylvania and employ many local people while their family business served as the nexus for their children to learn how business works, successfully finish college and venturing out on their own.





 	Only after a shared goal, begin investigating franchise concepts that excite both of you. Most important, be sure you agree on the knowledge, talent, and capacity that each spouse will provide to the business. Avoid that one-half effort is excited and the other is lukewarm for a concept. It’s too easy when on partner pursues a separate career or the household. Emotional, physical support and financial decisions suffer. A harmonious and cooperating married couple is a powerful business force.
 	When you land on a franchise concept know the requirements of the business. The franchisor will provide a Federal Trade Commission (FTC) document called the Franchise Disclosure Document (FDD). It is filed annually to certify the details of the franchise business. Both parties should review and discuss what’s required what the obligations are and whether you can do what it takes. There should be no verbal promises from the franchisor that are not in the FDD.
 	Often married couples have different talents that complement each other—one is a savvy user of technology; another is a people-person; one is focused on financial matters while the other is a visionary with creative business solutions; one has a high-level physical drive while the other is less so, etc. The best part, is unless the couple are newly-weds, a married couple should know each other.




An entrepreneurial couple’s shared goal was to diversify their agricultural, seasonal business in their Oregon smalltown. They invested in a mail, pack & ship service franchise opening “…where everybody knows your name.” Both husband & wife are savvy customer service and marketing experts sharing owner-operator duties in-store while the partner switches off to manage other outside priorities. The wife contributes her talent gained from advertising experience. The husband adds a sharp eye for new sales opportunities introducing new services and products that attracts customers.
Postal Connections franchisees Don & Sue Harteloo,
In their 18th year as Franchisees, the couple’s harmony and talents have consistently made their hometown franchise store a success while continuing a successful second unrelated mail-order business.



 

 	Funding is always a key issue, especially for married couples, are there more than themselves to consider. Do you lead a family unit with kids or parents? The household budget needs to be kept in place at greater or lesser levels. It will affect funding a franchise. The FDD gives you a range a range for initial investment. You have the advantage of combining incomes and investments. Currently, SBA backed loans are offering favorable funding terms and low interest rates. Typically, these loans require 20% to 30% down of the total loan and a logical business plan. Experience in the business is a big plus. Be sure to consider in your loan application two key expenses that often are overlooked

 	Household expenses projected for the next year. Which spouse can cover this with separate employment until the business is making money? Or perhaps a household reserve set up by adding to the loan debt?
 	A business operating reserve is always needed for a new business. It’s rare to open a business and have salary or profit to support operations with labor cost, maintenance and repair, marketing and advertising cost, etc. The best way to get an answer for how long is phone calls to current franchisees and ask “how long?”






A married couple’s shared commitment started with building an asset bridge to retirement. They brought savvy and unbending enthusiasm to their franchise investment following a lay off due to a corporate failure. The couple’s partnership has been supported a two-track career strategy with the wife as an employee of a private educational system and the husband develops a new franchise business that is the asset that can be increased and cashed in when the times comes.

Located in Boise ID, the mail, pack & ship service center has had one of the fastest new store revenue climbs and continues in 2021 on a rapid pace with 6-month 2021 sales 75% higher than first half 2020. The wife continues to bring home stable employment and benefits; while the husband succeeds in being his own boss. He brings retail and sales experience to his operation; and keenly understands how personalized customer service is key to loyalty where a population relies on ecommerce yet starved for face-to-face service attention when needed. 




 	An important aspect of choosing a franchise is how well will you get along with the franchisor. My company, Postal Connections®, a mail, packaging, shipping & business services retail service center arranges a personal, face-to-face meeting with one of the owners and the candidates where they live. We asked that both spouses attend. It’s important to know each other as persons before an Agreement is signed. This is not a howdy visit, but a meeting for a day or more to discuss goals, remaining Agreement questions, business practices, obligations, etc. There are many ways franchises do this personal introduction: discovery days at HQ, phone conversations, regional meetings with representatives, etc. Because a franchise relationship is for several years, it is important to know each other. The confidence of both spouses that commitments and support will be there and when you pick up the phone there already is some understanding for why you called.

#### Potential Franchisees and the Franchise Disclosure Document
One big advantage that occurs within the potential franchisee’s due diligence timeframe is that the franchisor is required by law to provide what is called a Franchise Disclosure Document (FDD) during the pre-sales disclosure process. (Note: This used to be called a Uniform Franchise Offering Circular.)

This document is required to be submitted to potential franchisees by the Federal Trade Commission (FTC) Franchise Rule. This rule gets into the specifics of FDD disclosure obligations including when (at least 14 days prior to any contract signing) the franchisor has to provide the document.

The FDD contains the following valuable information:

	Franchisor information like how long they have been in business and likely competition
	Key person business experience
	Any litigation history that has occurred with the franchisor
	Any information on if the franchisor ever filed for bankruptcy
	The franchise fee and other fees and expenses the franchisee will have to pay such as advertising costs, monthly royalties and training expenses
	The training and assistance program used by the franchisor
	Your estimated initial investment and obligations to the business
	Financing arrangements
	Franchisor obligations
	Territory, trademarks, patents, copyrights and other proprietary information
	Restrictions on any goods or services you can offer
	Renewal, termination, repurchase, modification, transfer of the franchise and the dispute resolution process
	Financial information about the franchisor including financial statements
	A list of franchise outlets

This is not a comprehensive list but it provides the majority of what you will receive with the FDD. The FTC site at http://www.ftc.gov/bcp/franchise/faq1.shtm provides more information on the disclosure obligations of the franchisor.

#### Reasons to Consider Becoming a Franchisee
Maybe you’re one of the growing number of baby boomers who have been downsized or have become fed up with the corporate politics. You might be seeking a business to own after serving our country in the military. Or you realize it’s time to act on the entrepreneurial spirit burning within you before it’s too late.

Whatever the reason, the next decision is what type of business to buy. One of the venues you might be considering is a franchise. Because you haven’t delved into it before, you might be unaware of a few key benefits of this business model. Many people have made very good livings under the protective umbrella of a franchise. Following are five reasons why:

	It’s Established. A new business would require you to set up everything from scratch. Even with an existing business, you may be buying its problems. In either case, you will have to experiment (which may be costly) to get to the money making formula.

One variation of buying an existing business is purchasing a current franchise. Here the franchisor should be willing to provide a description of the business model and what it takes to work properly. With a franchise, everything is ready to go. Unsuccessful techniques have already been drummed out of the system. What’s left are methods that should work with your investment and efforts.

	Marketing. Probably one of the toughest business concepts to execute well as an independent start-up, especially if you’re not familiar with it, is how to successfully market your product or service. Due to the enormous change that the Internet has introduced to business (Think about what it did to the Yellow Pages.), this has become particularly challenging without the help of a franchise system.

The Internet has been a great boost to many franchises that compete with bigger companies that spend millions on mass media advertising. Most franchises are about local business or one-on-one customer connections. The Internet helps make these connections. Look for franchises that help you use the Internet juggernaut in tandem with other marketing ideas.

For example, the types of ads, where to run them and how to reach your target market are all crucial to your business success.  A franchisor not only creates advertisements beneficial to all but also provides guidance for what media is most effective for specific business locations.

	Pricing. This is a two-part consideration. First, considering the initial investment, starting up a business from scratch can be a tough guessing game. A very common cause of business failure is under-funded start-ups since no accurate cost estimates were available.

Be sure you purchase a franchise you can afford that does not result in an excessive debt burden. And consider how much cash in reserve you need to have. This is the extra money that is needed to keep up with the ongoing cost of doing business before the business can provide a good level of income. The franchisor should be able to give you fairly accurate start-up costs and alerts to extraordinary things that can happen. The franchisor can also give you an estimate of how long it can take to have a new store pay the bills.  Finally, consider what it takes to keep your household going and have the cash on hand for that.

The second part of Pricing is how to charge your customers. This often is a mysterious trial and error process with non-franchise businesses.  For franchises, in many cases, the franchisor will set the prices or provide price guidelines so that you can make money. This saves you from having to perform the tough task of arriving at the right price point on your own.

Keep in mind, though, that the franchisor cannot set your day-to-day prices unless you sign an agreement that stipulates this is the way you will operate the business. This is especially important to retail businesses where local competition can radically affect pricing.  Be sure you closely review your franchise agreement wording around this issue before entering into a long term arrangement.

	Support. One of the major pluses of owning a franchise is that you will find assistance and guidance for setting up the business. This support is ongoing through any rough patches you might encounter. In addition to the franchisor, you have a network of other franchise owner-operators with whom you can discuss concerns.

Look carefully for how business information is delivered to franchisees and how easy it will be to get the franchisor’s attention on important issues. Ongoing access to decision makers and personalized attention when needed goes beyond company manuals and online email contacts.  Being able to get this valuable input if/when it’s needed, can make the difference between costly mistakes and consistently implementing what works.

	Innovation. A good franchisor is always on the prowl for ways to improve the experience of their business owners. This could come in the way of new advertising, additional ancillary products/ services to sell and opportunities to expand beyond the original business model.

Ask the franchisor if new ideas and products are tested or proven when they are introduced. Also, find out whether new things not in the business model when you join up, are optional or if they become mandatory when they are introduced.

Remember, franchisors have a vested interest in the success of their franchisees.

#### Scouting Franchise Locations in Wilmington
As part of my role as franchisor, I get to become involved with the start-up process. I spend a great deal of time with our PCA (Postal Connections of America) franchisees doing just that. It allows me to contribute to the success of the store, it supports the franchisee and keeps me connected to the pulse of the business community.

And nothing is more rewarding than discovering a suitable franchise location for one of our PCA stores.

Northwest Wilmington

As part of this process, I go out with our franchisee and look for locations that would have a steady flow of traffic and is affordable. Recently, I went to Wilmington, Delaware and met with our franchisee to scout three finalist sites for a PCA store. Historical Wilmington is the largest city in the state with a population of about 70,000. It is the thriving home of several credit card, banks, insurance and financial services firms.

We focused on sites in the Northwest sector of the city where DuPont (the world-class science and engineering conglomerate) has been since 1802.

Four Franchise Location Must-Haves

Four site features we look for include:

	Square Footage- Around 1200 square feet is generally optimal and anywhere from 850 to 1,500 can work.
	Rent- This is generally the biggest piece of the fixed cost for the business. It’s very important to keep this at levels our experience tells us is right for making profit. The monthly rent always includes the landlord’s expenses called triple net which includes net real estate taxes, net building insurance and net common area maintenance prorated with the other tenants plus your rent.
	Traffic Flow- We determine how much traffic passes the site each day. Importantly, the traffic must have good visibility of the site or signage and easy access and egress to the site. For example, a Starbucks in the area might generate a considerable amount of traffic as might a popular strip mall with a grocery store magnet or well-travelled road.
	Signage- The location needs to be friendly to allowing good signage so our stores can be easily found by consumers and business people.

The Final Analysis

After we narrowed down three sites that met the four requirements, it became a matter of analyzing all of the facts we had. They included demographics, traffic flow patterns, visual observations of signage in the area, a call to the city authorities to determine any restrictions, how the square footage and layout work for our store and of course, the rent.

All of those factors have to be aligned for the location to do its job in generating a store profit, which is what this is all about. Our more than 20 years of experience enables us to recognize rather quickly when a site will work.

Scouting franchise locations is an exciting challenge which I love. Soon we’ll be finalizing a space lease in Wilmington, Delaware!

#### Small vs Big Franchises
Franchising is a uniquely American business model. In fact, the entire idea of selling a proven business formula to others with support over a period of years in return for royalties became popular in the US just after WWII. Since then, franchises have grown to account for a third of the businesses in the US There isn’t a small town or busy city street that doesn’t have a store or service truck operated by a franchisee.
An important factor in considering a franchise is deciding if you prefer a big or small franchise system.

Big Franchise Chains

These well-known organizations offer brand recognition that brings people to the business whether online, on the phone or on the street. You pay for the brand recognition in the initial investment as well as to an ongoing fund to continue promotion of the awareness and good image of the company. For example, some of them can cost as much as $500k for the total initial investment and up to 8.5% of your monthly sales.

Also, as a franchisee, you will work with staff operations, business development or marketing departments of these franchisors. Programs are sophisticated and typically originate and are directed from headquarters. Individual face-to-face attention is emphasized less and implementation of standardized programs are the most common solutions to business challenges.

Smaller Franchise Chains

Choosing a lesser known franchise brand, usually smaller but with a proven business model, are ideal for people who have fewer capital resources, seek flexibility in operating the business, and are prepared to do much of the marketing effort locally. The initial investment is less and the ongoing marketing cost, usually, is less. Initial costs may be as little as a few thousand dollars and ongoing royalties are generally low.

Points to Ponder 

To help you decide what size & brand development fits your goals, here are three things to consider:

	Be sure the franchisor is committed to be in business with you. This means the franchisor is “with you” as you set up the business. He thoroughly explains the business formula so you understand the financial model, the best sites to look for and how to work with vendors. Check to see if he can be reached in a timely fashion. Will he come to visit you when needed? Does he demonstrate understanding of your business goals and will he help you achieve them?
	Be sure to know what resources are available to you through your franchisor. This includes working with you on a step by step basis in organizing the necessary opening resources needed to open your store.

Find out if your franchisor has a non-fiduciary relationship with any funding sources he might be recommending. Check out how the training program is run including the franchisor’s commitment to it.

	Whether the franchise is large or small, make sure the business model is proven. That’s what you’re paying for. It’s supposed to have all of the bugs worked out of it and be ready to generate a profit assuming you put in the required effort.

One thing that cannot be discounted is how you feel after you meet with the franchisor. Are you getting a good vibe? No matter which route you take, a large or small franchise business, it has to feel right.

(Image from the William Rosenberg International Center of Franchising: guides.business.library.edu)

#### Take Care of Your Franchise with a Good NAP
 
You want to list your local franchise in every directory you can find. Before you do, the first step is to determine your local business information which is called your NAP (name, address and phone). This should be used the exact same way in each local listing. 
A consistent NAP online will help you rank in local search. You want many quality websites, including local listing directories, to display your NAP the way you want it to be. 
Name – How is your franchise name written? Is it PCA Store 225 or Postal Connections, Mechanicsburg? Determine the name of your business based on how many customers will search for you using it. Keep it simple and use one name for everything.  
Search for your business name online and see how Google views it. If Google sees your business name a certain way, you might want to consider using that as your brand name online. 
Address – How will you write your address? For example, will you use “Avenue” or “Ave”? This may sound nitpicky but you need your address to display consistently across the internet.  
See how Google lists your business address. Consider using that as your model. If Google currently sees you at “4500 West Irving Park Road” and you’re ok with that, use that address everywhere online, website included.  
Phone - Some local business listings require that a local phone number be used rather than an 800 number. Select one main number for your local business information.
Local Business Rankings
Appropriate listings make it easy for Google to identify your local business. In fact, it is the primary method they use to rank local businesses in Google + Local.  This is important because about 40-50% of mobile search and 20% of PC-based search is related to location and local information. That’s why it is critical to claim, update, and improve all online information about your business. Otherwise, you might struggle to be found in search results.
Claim It
Many local businesses are still unaware that they can claim and optimize every local listing that their business is entitled to. This includes claiming on sites like:  


	Yelp (http://www.yelp.com/)
	Yahoo (http://local.yahoo.com/)
	Google Places (www.google.com/placesforbusiness/)
	Bing Local (www.bing.com/local/us/)

Claim these and get on all of your local directories with a consistent NAP today!

#### Ten Things to Watch for with Franchises
Don’t Have a Big Idea but want to be on Your Own?
Joining a franchise system might be the best thing for you if you want to be a business owner but not from scratch. A franchise might work if you:
·        Are drawn by the security of having an already-branded business with proven services or products.
·        Like the idea of an operation that has already done the hard trial and error work of establishing business operations and building a demonstrated support system.
·        Are comfortable with following franchise guidelines.
·        Already have or can get the franchise fee and startup costs.
·        Are willing to part with some of what you make in the form of monthly royalties, advertising fees and other costs.
·        Know it will take a lot of work and are willing to do it.
Even if you’re okay with these factors, it’s a good idea to hire an attorney that specializes in franchising to help you see it all the way through.
Ten Things to Beware of from a Potential Franchise
If having a franchise does appeal to you, be wary of franchises that:
·       Do not offer a proven business concept coupled with a successful operational system.
·       Lack brand recognition.
·       Have a history of litigation or continual strife with franchisees.
·       Offer minimal startup help and little ongoing training and support.
·       Advertise very little if at all.
·       Balk at territory exclusivity
·       Are reluctant to give you a list of former and current franchisees.
·       Use franchise fees to pay for selling new franchises.
·       Obligate you to purchase services, inventory or supplies from their approved vendors (or the franchise itself) at inflated prices.
Being a franchisee can result in a fruitful work life. Just make sure you perform proper due diligence.

#### The FTC and Franchising
Consider these powerful facts about franchising:

	There are about 825,000 U.S. franchise business
	40.9 percent of all retail businesses are franchises
	Franchising contributes 8.2 million direct jobs and 18 million indirect
	Franchising adds $2.1 trillion to annual U.S. Gross National Product [GDP]

That’s the way it stands now but it was a long road getting there. Some of the most popular and well known franchises were created spanning many decades:

	Howard Johnson 1925
	Kentucky Fried Chicken 1930
	Baskin Robbins 1948
	Dunkin Donuts 1950
	Burger King 1954
	McDonald’s 1955

However, the success of these franchisors and others spawned some unfunded and poorly managed franchise ventures in the 1960s and 1970s. Some even bordered on fraud where money was taken from those eager to own businesses but a franchise was not delivered as promised.



The FTC and IFA

The federal government stepped in in the form of the Federal Trade Commission (FTC). Many regulations were added to bring full disclosure of what potential franchisees might be getting themselves into.

In addition, the International Franchise Association (IFA) was founded in 1978. It’s a reputable industry group where franchisor members use the IFA icon to show compliance with best practices and full disclosure. (In 1978, membership was only for Franchisors, today individual franchisees can join.)

Full Disclosure Documents

Also, the FTC created the Uniform Franchise Offering Circular (UFOC). This was updated in 2007 and is now called the Franchise Disclosure Document (FDD).

Along with the FDD, the business contract (Franchise Agreement) must also be included. Every franchise is governed by these two documents. In fact, if it’s not in the Franchise Agreement, it’s not an obligation.

 What’s in the Documents?

	A legal description of the business & the term
	Franchisee & franchisor obligations
	All fees & payments
	Detailed Lists of what is included with the fees
	Statement of average unit sales (Item 19, optional)
	Rights to transfer, expand & renew the franchise
	Territorial rights
	Signatures to the contract
	Current & former franchisees list
	Audited statement for the franchisor
	And more…

Obviously, for potential franchisees these are must read documents. They are designed to make sure that everything is above board and the franchisee is getting good value at a fair price and that it’s something that can be verified.

#### The History of Franchising
The word franchise originates from the Anglo-French: franchir (to free) and franc (free). The concept of franchising slowly developed in Europe from roots going back to the middle ages. Back then, titled land owners granted rights to people to hold fairs, operate markets and conduct other business on their land. The rights became rules and as such, part of European Common Law.

The Sewing Machine

In the US, credit for beginning modern franchising, goes to Isaac Singer, founder of the Singer Sewing Machine Company. In the 1850s, Singer wanted a wider distribution for his sewing machine but did not have the cash to increase manufacturing them.  Another issue he faced was that people would be reluctant to buy his machines without some type of training which was not provided by retailers at the time.

Singer decided to assess licensing fees to individuals who would own the rights to sell the machines in certain geographical areas. The licensees also were responsible for teaching customers how to use the machines. This created a platform for making a sewing machine commercially available to the public.

Howard Johnson and Ray Kroc

In 1932, Howard Johnson established the first modern restaurant franchise system stemming from one successful restaurant in Quincy, Massachusetts. The concept was to allow independent business people to use the same name, supplies, logos and procedures in exchange for a fee.

Ray Kroc was a salesman of milk shake makers. When he bought a small hamburger joint in 1954, he saw that the owners had perfected a high-volume food production system that combined fast service and low costs with consistent food results. Kroc became their licensing agent and first recruited franchises in the Chicago area (The first was in Des Plaines, IL, a northwestern suburb of Chicago).

The franchising business method got so big that the International Franchise Association was founded in 1960. Their purpose was to provide guidance to the entire industry. In 1978, the Federal Trade Commission got involved by creating laws designed to protect franchisees.

The franchising system has a stalwart history and has proven to be the path to success for many an entrepreneur.

#### The History of Postal Connections of America
Today, you know your Postal Connections of America (PCA) store as a one-stop shop for many useful items and services for businesses and consumers. The stores offer anywhere pack and ship, printing, copying, shredding, mailbox rentals, office supplies, computer rentals, notary services and much more. In addition, to maintain the local flavor of the stores and because so many are community driven, several stores offer other items. These have included stocking greeting cards, gifts, local craft merchandise and selling media like games and DVDs.

The History of Postal Connections of America 

Postal Connections of America started in 1995, 21 years in business in 2016, an enduring accomplishment by any standards. The company originally built and furnished postal, packing and shipping stores for independent operators. The very next year, 1996, PCA started franchising by providing franchisees a support system for daily operations, marketing and preferred vendors.

In 2000, a holding company bought the franchisor as an adjunct to a collection of businesses, operating Postal Connections as a subsidiary. In 2002, the current owners, C. “Andy” Thompson and Fred Morache, joined Postal Connections as experienced managers to develop the franchise business.

New Franchisors 

Andy and Fred ended up buying the franchise in 2007 and made it a privately held company dedicated to expanding franchise stores across the US. Their concept was to update the version of the original postal, shipping and business services concept they helped create at Mail Boxes Etc. which was based on providing community-oriented products and services, stellar customer service and competitive pricing.

Franchisees are encouraged to add new services and hard-to-find products unique to the community. The Postal Connections staff and area franchisees dedicate themselves to assisting and guiding franchisees to grow their shops.

We love this business!

Note: All stores do not provide all services. Contact the store in your area to inquire about a particular product or service.

#### The Impact of Franchising in America
Periodically, the International Franchise Association Educational Foundation publishes a study developed by PwC that measures the contributions of franchising to the US economy.  The key economics measured in the study were jobs, payroll output and GDP establishments. It’s exhaustive research that even presents the impact on a state by state basis.

Following are some of the findings from that study (2007 data, the latest data available):

More than 828,000 establishments operated out of US franchise systems. They produced the following:

	 9.1 million jobs
	$304.4 billion in payroll
	$802.2 billion of economic output
	$468.5 billion to the GDP

In addition, franchised businesses were 2.8% of all non-farm business establishments and their output contributed to 3.4% of the total US GDP.

Job Data

Franchising is a prolific employer. This is how jobs generated by franchising stack up compared to other sectors of the economy:

	Durable goods manufacturing 9,171,500
	Franchised businesses 9,125,700
	Financial and insurance 8,801,600
	Real estate and rental and leasing 7,765,500
	Wholesale trade 6,582,600
	Transportation and warehousing 5,949,900
	Nondurable goods manufacturing 5,300,300
	Information 3,556,900

Jobs generated by franchising are number two to durable goods manufacturing.

This pie chart from the report that shows how franchising jobs are distributed among the different businesses.

When you break it down by state the number of people employed because of franchised businesses was the greatest in New York, Illinois, Florida, Texas and California. On total jobs in a state, franchising had the greatest impact in Mississippi with 15.8% of Mississippi’s private sector jobs related to franchising. In fact, in every state franchising ranked over 10% of private sector jobs except in New York, Rhode Island, Massachusetts and the District of Columbia.

This data underscores the considerable contribution franchising systems make to the US economy. You can read a PDF version of the study at http://www.buildingopportunity.com/download/Part1.pdf.

Fred Morache has spent many years in the franchising business and is currently the managing franchisor partner for iSold It and Postal Connections of America franchises

#### The importance of Pre-qualification to a Franchise Investment
​Similar to buying a home, it is vital that a perspective franchise buyer has realistic expectations, preparation and know cash flow capabilities to make a franchise investment.  For years, mortgage companies have pre-qualified borrowers to establish a price range for the home they would lend to.  The benefits are many, including a pre-qualification provides tremendous buying power and the right guidance on lending ratios—debt to income level, for example. This knowledge gives the buyer confidence for making purchase decisions.

Investing in a franchise is very similar.  The amount financed to own a franchise is an important consideration—debt service is a fixed cost that must be paid every month. Realistic business expectations, solid revenue and cost estimates, are critical to purchasing a franchise opportunity. The Franchise Disclosure Document [FDD], a FTC filing, is where you’ll find this. With this Document and your current financial records are what’s needed to easily achieve a funding pre-qualification.

Once a franchisor knows you have the financial capabilities, the more eager they will be to advise you in many areas such as site selection, space lease payment levels, potential sales territory and marketing plans even before you join their network. At Postal Connections we are able to guide people to funding sources and offer advice to make qualifying easier.

Here are some simple tips:

	Be able to prove your financial status (Borrowing from your rich uncle, unless documented is not a serious financial status)
	Be prepared to have funds available buy the franchise, run the franchise for several months and pay your bills at home.
	Work with the Franchisor to understand financial requirements from signing an agreement (most franchises require payment of a fee), installation cost for the business, marketing cost from Grand Opening to reaching break even.
	 Use borrowing or leasing to an advantage. Borrowing can get you into business now and interest rates are at historic lows. Leasing does not impact your credit scores and if “closed-end” you own everything after the last payment.
	Have enough money to advertise. A start-ups always need funds to build awareness and advertise incentives to try your business.
	Understand how to use leverage and avoid over-extending. This aspect is very important and your chosen Franchise should be willing to give you straightforward and specific advice.

We’ll help you determine the best match for financing and cash management.  Franchising is an active investment that requires ongoing work and capital.  But the rewards are tremendous, as long as you finance properly based on thoughtful business expectations and a realistic plan for paying back the borrowed money.

Alan George, Postal Connections Franchise Development

#### The Power of Franchising in America- By the Numbers
The importance of the American Franchise system cannot be overemphasized. Since the 1840s, when German brewers granted rights to taverns to craft their beer, the system made its way across the pond to gradually become the major force in American business that it is today.

 

Franchise Facts

	There are 825,000 U.S. franchise businesses
	40.9 percent  of all retail businesses are franchises
	Franchising generated 8.2 million direct franchise jobs and 18 million indirect
	The business model contributes $2.1 trillion to the U.S. Gross National Product [GDP] annually

Franchise Ownership

Isaac Singer, who improved the sewing machine in the mid-1800s, is considered one of the first, if not the first, American franchisor. Now, the business models attract every type of individual seeking his/her slice of the enticing American Dream of business ownership. In franchising’s case, this is a tried and true business formula.

Current franchise ownership stats are:

	20.5 percent  are owned by women
	24.4 percent  are jointly owned by women
	Since 2011, more than 5,000 US veterans and their spouses have started franchises
	Minority ownership increased by 6.2% from 2002 – 2007
	20.5 percent of franchises are minority owned. (Minorities make up 14.2% ownership of non-franchise businesses.)

Franchise Progress

There is a reason that franchising remains so popular among such a diverse segment of entrepreneurs. The formula is successful. Because, let’s face it, it’s tough to make a go of a business. With a franchise, however, you are in business for yourself but not by yourself. And that’s what creates the dynamics in these statistics.

	Fewer than 5% of total franchises close each year
	Nearly 97% of new franchises are still in business after 5 years (study done by Arthur Anderson/now Accenture on a sample of 400)
	62.2 percent of all new businesses close after 6 years (U.S. Small Business Administration)

When considering a business opportunity, make sure you look at the power of a franchise. If you join one, you will be part of one of America’s great economic engines.

(graph from census.gov)

#### What Does a Franchise Cost and What is the Money For?
As one who offers franchise opportunities, typically the first question asked by interested people is how much does it cost to become a franchisee and what does this include? To answer this question it needs to be understood that a franchise is a system—usually including proprietary methods, training, a brand name and support from experts—for operating a proven business concept.

With franchising, no matter what your initial buy-in is, you should be able to make money. The franchise cost of entry and how fast you reach an ROI, greatly depends on what franchise you choose, what you can afford and the ongoing cost for operating the business. But where the initial investment money goes is similar for most franchises.

Below are the main initial costs:

Franchise Fee- This is what must be paid to become part of the franchise system. It is for the tried and true business concept, the expertise of the franchisor and the chance to become part of a money-making opportunity. This fee can run from a few thousand dollars to more than $100,000 for greater opportunities of revenue and for the higher end, well known franchises. It usually includes the rights to use proprietary materials and systems as well as the cost of training, initial marketing packages, software and website access.

The franchise fee also can be based on the size of the territory (population) that you will service and how much support will be provided by the franchisor. For example, the iSold It franchisor offers both an at-home and a brick and mortar location franchise system. The franchise fees are different due to territories defined and training.

Build Out and/or Business Set-Up Expenses- These are expenses needed to make any modifications to the physical space to conform to the franchise standards. They include equipment, software (if needed), branding décor, sales materials, supplies, freight to deliver items, training, and other expenses the franchisor might incur to set-up your business.

For example, if you are opening a retail business, it would be flooring, cabinets, counters, sales inventory, equipment, signage, etc. It also includes construction costs, fees for any local licenses and materials needed to bring the store up to standard.

For a home based business it typically includes equipment needed to market and sell things, products, business supplies, and branding materials (whether online or printed). Typically, the franchisor is heavily involved in assisting you in this important process.

Liquidity or Operating Reserve- It will take some time before the franchise turns a profit so franchisors usually require new franchises to have cash-on-hand to take them through that period. This could be needed for as little as six months to over a year. It is the money needed to keep the business going until you pass a breakeven point. This is the financial number, often called fixed cost of the business, that you need to “keep the doors open” whether or not one sale is made.

Once you become a franchisee, your franchisor should spend time with you determining exactly what your breakeven point is. He should also help you plan several years out about how much sales revenue will come to you as wages or profit distribution.

These categories of cost, called Total Initial Investment, are the amount you should expect to invest in the new franchise. Every franchisor is required by the Federal Trade Commission to accurately report the Total Initial Investment to people considering purchase of the franchise in their Franchise Disclosure Document [FDD] and in any advertising stating the initial cost.

Example: Postal Connections Initial Investment



Click on this chart to enlarge it

But there is another potential expense for start-up not part of the initial investment that we encourage every franchise prospect to consider:

Professional Costs- In making a life-changing purchase like buying a franchise, you may want to hire an attorney to help you make a sound decision. The attorney will review all of the franchise documents to make sure they comply with local and state laws as well as to ensure you understand the franchisor’s and your obligations stated in the language of the franchise agreement.

If you need to set up a corporation and need help setting up your books, you may need to hire an accountant also.

Hire professionals who are familiar with the way franchises work. 


Obviously, it’s important to understand what you will initially pay out and be comfortable about where that money is going and how it will come back to you with a profit. Never be too embarrassed to ask as many questions as it takes for you to fully understand what you’re paying for.

#### What Does Customer Relationship Management Mean to You?
Customer Relationship Management or CRM means software developed to store and manage your customer, prospect, leads, business partners and business contacts information. CRM is generally tied to large companies, though software including Zoho CRM , TeamSupport, Pipedrive, Prophet and more claim to work well for smaller companies.
The advent of CRM solutions means that consumers expect companies, no matter what size, to understand the relationship they want and meet those desires. Consumers expect any brand to meet their expectations although, many companies do not.  Often, companies are good at capturing data like gender, age, income and maybe even matching customers with purchasing information. Companies like this may think of customers as resources to upsell or cross sell to rather than as individuals seeking meaningful interactions.
Customer Relationships
B to C companies often blunder when relating to customers. They may treat those seeking a simple exchange of money for goods or services like a friend and interact with a customer wanting to be treated like a friend as a transaction.
Blow are examples of three firms that used CRM data, yet made relationship mistakes:
·       A loyal on-line retail customer was frustrated by a policy of requiring signatures for home deliveries occurring while she worked. Managers were not flexible to her concerns and one blew it by offering her a $200 gift card. She promptly canceled a $7,000 order.
·       A plus-size clothing store repositioned itself to be more relevant to younger, thinner customers only to find themselves alienating established customers who felt disrespected and betrayed.
·       A dedicated customer of a grocery delivery startup sent in suggestions to fix operational glitches. However, the only responses he received were promotional emails urging him to order more frequently. The customer cut back his patronage believing the company did not want a relationship on his terms.
29 Customer Types
One research firm identified 29 distinct types of buyer-company relationships which is more eye-opening and more valuable than demographics. For example, there is the customer that likes the basic exchange. They seek product / service dependability and don’t want to think too much about it. Another is the customer wanting recognition as a business partner. These types want to work with the company long term to solve problems. The buddy customer wants an interaction but doesn’t want to be tied into a close relationship that limits freedom.
It’s up to the business owner to figure out which type matches the customer by developing “relational radar” to hone in on customer signals and then deal with them accordingly.
Fred franchises Postal Connections of America stores: http://www.postalconnections.com/

#### When You Buy a Business, Look for the USP and Customer Promise
The most important aspects of any business you will buy are the USP (Unique Selling Proposition) and the Unique Promise you will offer your customer. Successful development of these two concepts fuel most business successes.

For example, for McDonalds (from their website):

USP: McDonald's brand mission is to be our customers' favorite place and way to eat and drink.

 Unique Promise: Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience – People, Products, Place, Price and Promotion.

Whatever business you may buy, you will need to put a USP and a Unique Promise around the products and services you’ll offer to customers.

But, as in the McDonald’s example, franchises, rather than independent businesses, are more apt to have this developed into a core mission, a set of values and a vision statement that resonates with the public. It’s likely that the USP and Unique Promise were honed over the years as they powered the success of the franchise.

In choosing a franchise opportunity, assess the USP and Unique Promise being made by the Franchisor. The USP may be the brand name and the franchise’s marketing strength or it may be a business formula and how it’s implemented. Headquarters may require tight control of operating practices and the prices you charge or you may have the flexibility to adapt to local conditions.

Often the price of entry to the franchise is the USP. In turn, that price will determine how long it takes to get a return on your investment and when you begin to take profits.

Here are a few factors that can help you analyze the USP and the Unique Promise of a franchise:

	How is the franchise formula and business operation different from competitor’s? Does the franchise business offer different products, lower prices or better service or are these factors essentially the same? This is especially important to determine in established business sectors.
	Is the brand name a high premium in the cost of the franchise and is it the USP that will bring customers to you as opposed to competitors? Will the brand support the higher cost of the franchise?
	Price is very frequently presented as the key USP, especially if the franchise formula is offered by many others. Not only will the initial investment determine how much cash you need (or must borrow), but ongoing royalties, advertising fees and required product costs are all important to  consider in defining the Unique Selling Proposition of a franchise. Can you compare the choices you have regarding how much each franchise costs you on an ongoing basis?
	Buying a franchise is not a one-time event. It is an ongoing business partnership. What is the Unique Promise the franchisor makes regarding the business relationship, guidance and assistance over time? Is the franchisor’s view of the business in sync with yours?

It’s important to consider how well you’ll get along with the franchisor. Is the Promise one of trustworthiness, a friendly relationship of mutual respect and the willingness to coordinate business goals? The best way to determine this is through a one-on-one meeting with the top person prior to joining the franchise. Take that time to learn about each other’s vision for the business. It’s your “chemistry test” for how you’ll get along. Most franchise agreements are for several years.

Franchises are a unique American invention that has spread throughout the world. It’s typically American to admire the process and results of a well-run business. Franchising is a short-cut and risk-reducer for people who want to be in business for themselves. It’s a way to build an asset that can be sold or passed on to family. With so many good choices it pays to carefully analyze the options from many different angles. Viewing the opportunity in the same way that a consumer would assess the value of a product will help you make the right choice.

#### Why Sign Up as a Franchisee
Joining a franchise system might be the best thing for you if you want to be a business owner but not from scratch. A franchise might work if you:

	Are drawn by the security of having an already-branded business with proven services or products.
	Like the idea of an operation that has already done the hard trial and error work of establishing business operations and building a demonstrated support system.
	Are comfortable with following franchise guidelines.
	Already have or can get the franchise fee and startup costs.
	Are willing to part with some of what you make in the form of monthly royalties, advertising fees and other costs.
	Know it will take a lot of work and are willing to do it.

                                                  But Beware of These Franchises
If you’re considering a franchise and are performing your due diligence, be cautious of franchises that:


	Do not offer a proven business concept coupled with a successful operational system.
	Lack brand recognition.
	Have a history of litigation or continual strife with franchisees.
	Offer minimal startup help and little ongoing training and suppo
	Offer minimal startup help and little ongoing training and support.
	Advertise very little if at all.
	Balk at territory exclusivity
	Are reluctant to give you a list of former and current franchisees.
	Use franchise fees to pay for selling new franchises.
	Obligate you to purchase services, inventory or supplies from their approved vendors (or the franchise itself) at inflated prices.

No matter what, it’s a good idea to hire an attorney that specializes in franchising to help you see it all the way through.
Offer minimal startup help and little ongoing training and support.

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#### About
Fred Morache- Managing Partner, Owner

Fred has been in the franchise industry for four decades as an executive, advisor and franchisor. He has extensive experience working with franchisees. Fred is well known for working on a personal level to provide effective business solutions for owner-operators.

McDonald’s, Coldwell Banker and Mail Boxes, Etc.

He began his franchise career with McDonald’s spending nine years at headquarters and in the field. Fred also worked with real estate franchisees at Coldwell Banker Residential as VP of Marketing. At Mail Boxes Etc. (MBE), in the role of VP of Worldwide Marketing, he helped transform 350 postal operations into a global network of 3,200 stores across the US and seven countries. MBE is now The UPS Store after that shipping giant purchased the franchise network.

Postal Connections and iSold It Stores

Today, Fred is the Franchisor of Postal Connections and iSold It stores located across the country.

Postal Connections is a network of stores operating with the original MBE business model of service centers. They provide individuals and small businesses with a collection of postal, shipping and business services including personalized and customized solutions.

iSold It is a franchise chain of more than 20 locations across the country. These stores assist people with selling items on eBay, Amazon and other online marketplaces. Fred’s company bought iSold It in 2009. It is another concept based on high levels of individualized customer service, advertised as the Easy Way to Sell on eBay.

Fred lives in the Dallas/Fort Worth area.