Franchise Investment

Wealth Strategy

For the next generation

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Mission Statement

Franchised Business Investment

belongs in

Everyone’s

Wealth Building Portfolio

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Investors (Profile)

• Minimum Investment $100k to 300k

• Frustrated with:

– Primary Profession

– Current Yields

– Bank Paper

– Wall Street

– Real Estate

– Oil and Gas

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Why this Vehicle?

• You want to earn more INCOME.

• You desire to build Assets and Net Worth.

• You want to leverage capital and minimize risk.

• You want a proven business concept.

• You want safety for your invested capital.

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Franchise Basics

Combine the best of the

Build, Buy or Partner Alternatives Build your business upon an established

business model and systems

Buy the rights to use an identifiable brand

and a proven business format

Partner with a successful franchisor

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What You Get

The Franchisor has worked out the kinks!

As a franchisee, you receive:

• Proven, turnkey, business model and systems

• Initial training and ongoing support

• Marketing strategies and plans

• Group purchasing power

• Entity Identification

• Rights to use a known brand, trademarks or trade names

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Why This Strategy At This Time?

• The Financial Crisis – Real Estate

• Mortgage Crisis (CDS + Bad Loans)

• Wrong assumption of appreciation vs. cash flow

• Commercial crisis looming

– Economy

• Poor evaporating job market

• Historically low traditional investment yields

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What Is The Right Business?

• Startup/Biz Ops

– Uncertain outcome/market acceptance

– Hobby vs. Business mindset

– Hard to duplicate

– Most Fail

What Is The Right Business?

• Franchise

– Proven System, predicable outcome

– Professional selection - investment quality

– Territory limitations once branded

– Majority (91%+)succeed

– Experienced Leadership

– Superior Post-Sale Support

What Is A Franchise?

• Business in a Box, that:

– Includes complete set of instructions

• Location Selection

• Set up & Build Out

• Hiring & Training Assistance

• Marketing Strategy & Implementation

• Mentoring & Collaboration

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Finding the Right One

– Franchise Disclosure Documents (FDD)

• Financial Performance Information (Item 19)

• Fees and Costs

• Territory Rights and Marketing Restrictions

• Franchise Agreement (Rights and Obligations)

– History of the Franchisor

• Experience

• Performance

• Support Staff and Team

– Number of units Sold and Location of Units Open

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Investment Strategies

Individual Unit or Location

Multiple Unit Operation

Area Development Rights

Managed Concept Company (MCC)

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Managed Concept Company (MCC)

You – Investor Partner of Your own

Multi-Unit Franchise

You – Managing Partner Of your own

MCC

Franchise #1

Franchise #2

Franchise #3

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Franchise Case Studies

• Wholesale GM= 20 – 30

• Food GM= 50 – 67

• Retail GM= 50 – 70

• Service/Product GM= 70 – 80

• Service GM= 80 – 100

• GM = Gross Margin

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Strategy (Targets)

• Gross Margin = Total Sales-COGS

• ROI Rule = i (investment) /3 to 5

• Goal = 24 to 36 month return of invested

capital; (excludes 6 months of startup)

• minimum 20% ongoing ROI after startup

Targets Employees

Cost

Operations

Costs

Profit

Rule One 25 50 25

Rule Two 60 15 25

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Target Franchise Concepts

• Concepts with ROI = i/5 or less

Based upon acceptable Industry Gross Margins

B2C

Both

B2C B2C B2B

Food/Retail Service

Product/

Service

Health Care

65 25

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Our process is based upon developing a “Profile”

unique to each Client

To begin our process request our

Confidential Questionnaire.

Alex H. Cunningham

Senior Consultant Office: 859-402-0729

Cell: 859-533-3841

Fax: 859-201-1105

ahc@FranCnsult.com

http://www.linkedin.com/in/ahcunningham

Solving the Puzzle of Owning a Franchise

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