The Franchise Essentials Development Program

 

The Franchise Essentials Development Program is the ideal solution for companies seeking complete assistance with the franchise development process. The services provided under the Essentials Program are extremely comprehensive with all key components of the development program coordinated and completed by our team. Our experienced franchise consultants and attorneys address every area required to develop a franchise and begin granting franchises across the U.S. Under this program, we also provide assistance with the initial franchise sales process to help ensure the successful launch of your franchise.

 

The Essentials Program also reduces the amount of capital required to franchise your business by permitting a portion of the development fee to be paid as a percentage of the initial franchises sold. Under the Essentials Program, we defer almost 50% of the development fee until franchise sales begin and the franchise operation is generating revenue. Contact us today to learn more.

 

The following services are provided as part of the Franchise Essentials Development Program:

 

Business & Industry Research / Franchise Development Plan

 

We begin the development project by completing a comprehensive review of your business and industry relative to the franchise operation and structure. A competitive analysis is completed of similar type franchise companies. Following our research, we produce a development plan that outlines your company’s expansion goals and financial projections for the franchise operation. 

 

The Franchise Disclosure Document and Franchise Agreement

 

The FTC requires 23 “items” to be disclosed in the Franchise Disclosure Document concerning the franchise company and provisions contained in the Franchise Agreement. The system and process we use when developing the franchise disclosure documents ensure that all aspects of the franchise business are fully identified and properly disclosed. We advise you concerning the terms of the franchise relationship and assist you in completing our proprietary questionnaire. The Disclosure Document, Franchise Agreement and Exhibits are prepared in conformance with the FTC Franchise Rule. This enables your company to begin granting franchises in 37* "non-registration" states upon completion of the documents. Thirteen states have individual registration requirements that must be met prior to soliciting and selling franchises in those states (please see “Registration of the Franchise” in the Optional Services section below).

 

*  Five of the 37 “non-registration” states require the filing of a simple “exemption form,” which we coordinate prior to launching the franchise (see “State Exemption Filings” below). Six states (CT, GA, LA, ME, NC and SC) have requirements that must be met if a franchisor does not have a federally protected trademark (a state registered trademark is accepted by GA, LA and SC). The requirements may include filing under each state’s Business Opportunity Laws. if you do not have a federally protected trademark (which is common with new franchise companies), please contact us for additional information and requirements.

 

Exhibits to the Disclosure Document & Franchise Agreement

 

The following Exhibits to the Franchise Disclosure Document and Agreement are prepared:

• Deposit Agreement
• Confidentiality & Non-Competition Agreement
• Area Development Agreement (see section "Area Developer Program" below) 
• Site Selection Addendum (if required)
• Lease Assignment & Addendum to Lease Agreement (if required)
• Telephone Number Assignment Agreement
• Operation Manual Table of Contents
• Franchisee Compliance Certification
• List of State Administrators
• List of State Agents for Service of Process
• State Specific Addendum to the Disclosure Document
• State Specific Addendum to the Franchise Agreement

The State Specific Addendum to the Disclosure Document and Franchise Agreement are prepared as part of the franchise legal development process to ensure compliance with individual state franchise laws when registering in the 13 Registration States. The State Specific Addendum address individual state franchise laws and regulations that vary from the FTC Franchise Rule relative to specific provisions of the Franchise Agreement and/or disclosure requirements. These documents help expedite the registration process. In addition, our relationships with the various state examiners further streamline the registration process for clients. 

 

Area Developer Program

 

An Area Developer program permits a franchise company to sell multiple franchises to a single franchisee for development over a prescribed time period.  A percentage of the franchise fee for each franchise to be opened is typically paid in the form of a Development Fee upon execution of the Area Development Agreement. As part of the preparation of the disclosure document, we advise you concerning the structure and requirements for the Area Developer program. We then prepare an Area Development Agreement as an Exhibit to the Disclosure Document. This ensures that disclosure requirements are met and multiple-unit opportunities are immediately available.

 

Nondisclosure Agreement

 

To help ensure the protection of your confidential and proprietary information, we prepare a Nondisclosure Agreement for use during the franchise sales process. The nondisclosure is typically provided to prospective franchisees early in the process to enable you to share information that may be confidential in nature.

 

State Exemption Filings

 

Of the 37 non-registration states, five states require franchise companies to complete an “exemption filing” prior to commencing the sale of franchises in their state.  The filing is required under each state’s business opportunity laws. A filing fee ranging from $0 to $100 is required when submitting the exemption notices. An exemption package is provided by FranSource for filing in the five states. The states include:

• Kentucky
• Utah
• Texas
• Florida
• Nebraska

Trademarks, Service Marks & Copyrights 

 

As part of the franchise legal document preparation, we advise you concerning trademarks, service marks and copyrights that your company may license to Franchisees. If required, we coordinate trademark filings on your behalf. 

 

Franchise Support Services

 

We consult with you concerning the types of support services that should be provided to franchisees during the pre-opening period and once their franchise is operational. We also advise you concerning additional support services that may be required as the franchise grows. This ensures that proper disclosure is made while permitting you to make modifications to the types and amounts of support provided as changes to the system are made.

 

Franchise Reporting Requirements and Performance Standards

 

Franchisees are typically required to provide information to the Franchisor regarding sales, financial data, income and sales tax returns, and other information specified by the Franchisor. We advise you concerning appropriate reporting requirements relative to the franchise business and your operation. In addition, we provide recommendations regarding minimum performance standards, revenues and/or inventory purchasing requirements when appropriate. When performance standards and/or inventory purchasing requirements are implemented, they are included in the Disclosure Document in compliance with the FTC Franchise Rule.

 

Exclusive Territories

 

Franchisors may grant Franchisees an "Exclusive Protected Trade Territory" in which to operate the franchise. We advise you concerning the criteria and system to be used to establish exclusive territories. The Disclosure Document and Franchise Agreement describe the territory criteria and identify the franchisee’s rights to the territory in the future.

 

Site and Location Specifications for the Franchise Business

 

Franchisors may choose to offer assistance to franchisees relative to selecting a site for the franchise business. Franchisors have the right to dictate the type, style, size and other criteria specific to the franchise location. We consult with you to establish appropriate requirements and criteria for the site selection process. As part of this process, we produce a Site Evaluation Form to be completed by franchisees. If the franchise business is home-based, we assist in determining specifications and requirements for a home office.

 

The Franchise Fee, Continuing Royalty Fee, and Other Sources of Franchise Revenue

 

Using established criteria as well as statistics compiled from similar type companies, we determine the franchise fee, royalty fee, advertising and marketing fees, and other fees appropriate to the franchise operation. We also provide recommendations and considerations related to other possible sources of franchise revenue, including promotional fees, administrative fees, regional and national advertising fees, product sales, training and field support fees, and other franchise services.

 

Legal Compliance 

 

FTC sales disclosure requirements are reviewed to ensure compliance with federal franchise laws and regulations. In addition, we produce a comprehensive Guide to Executing the Franchise Documents for use by your Development Team to help ensure compliance with laws and regulations related to the offer and sale of franchises.

 

Confidential Operation & Policies Manual   

 

One of the keys to a successful franchise operation is a standardized system that franchisees follow to ensure consistency throughout the organization. An “Operation and Policies Manual” is one of the most effective methods of conveying policies, procedures, and operating systems to new franchisees. Existing franchisees also benefit from a comprehensive Manual relative to the ongoing operation of the franchise business. When properly implemented, the Manual ensures greater consistency between the independently operated franchise locations. The Manual also saves valuable resources at the corporate level by minimizing the time franchise personnel spend responding to Franchisees’ questions.

 

The Confidential Operation and Policies Manual produced by FranSource acts as both a training guide for new franchisees and an operations and policies guide for established franchisees. The FTC permits the Manual to be a unilateral extension of the Franchise Agreement. This allows the Manual to serve as the vehicle through which your company may modify policies, processes, procedures and other "nonmaterial" aspects of the franchise business. Recognizing that systems change and evolve, the pagination system is specifically designed to allow for easy updating as modifications and enhancements to the system are implemented.

 

We determine the content and design of the Manual through the use of questionnaires, interviews, and onsite visits at your business. The content of the Manual includes pre- and post-opening information, instructions, policies and procedures. Forms and other materials used in the operation of the franchise are also included. Upon completion of the Manual, we provide you with the electronic files of the Manual for future updates.

 

The Initial Franchise Training Program

 

We consult with you to establish the initial training program for franchisees. A training itinerary is produced which outlines the training content, hours devoted to each topic and other related information. Training may be conducted at the corporate office and/or at the franchise business.. In addition, we provide assistance in defining and establishing appropriate training requirements for the Franchisee’s employees, which are outlined in the Disclosure Document and the Manual.

 

Franchise Sales Procedures / Franchise Development Manual

 

We consult with you to establish appropriate franchise sales procedures for the franchise operation. As part of this process, we produce a Franchise Development Procedures Manual that outlines your company's franchise sales development process. The Manual is designed for use by franchise sales personnel as both a training manual and an ongoing reference guide. The Development Manual includes the following:

• Franchise Compliance Procedures
• Franchise Sales Procedures
• Contacting Candidates (processes, scripts, Q&A’s)
• Qualifying Prospective Franchisees
• Disclosing Prospective Franchisees
• Franchise Discovery Days (onsite visits)
• Franchisee Selection Process
• Franchise Opening Requirements & Time-line
• Executing the Franchise Agreement

Franchise Sales Development Forms

 

We design and produce franchise sales forms and materials for use during the franchise sales process. We also produce a full-color Franchise Overview Brochure to provide to prospective Franchisees following the initial contact.

 

Franchise Advertising & Marketing  

 

Our franchise advertising and marketing assistance includes:

• Establishing an appropriate franchise advertising budget based on your company’s goals
• Recommending appropriate franchise advertising and marketing programs
• Analyzing various Internet franchise advertising portals to determine appropriate sites to promote the franchise opportunity
• Establishing an Internet Advertising Plan
• Negotiating advertising rates
• Producing a franchise advertisement for use on the selected advertising portals

 Franchise Opportunity Section of the Web Site 

 

To further promote the franchise opportunity, we provide design and copywriting assistance to develop a Franchise Opportunity section on your company's web site. If requested, we also offer complete web site development and design services. Capabilities include creating individual "home pages" that permits each franchisee to customize pages on the company's web site, specific to the franchise location.

 

Franchise Staffing  

 

As required, we provide recommendations concerning staffing requirements for the franchise operation as the franchise organization grows.

 

Franchise Sales Assistance  

 

We provide direct assistance with the franchise sales process for the first six franchises sold. Issues relating to disclosure, agreement negotiations and other aspects of the sales process are addressed as required. As requested, we also conduct 3-way calls with the company contact and prospective franchisees as a third-party reference. Our clients find this interaction to be beneficial during the sales process.

 

Ongoing Consulting

 

The list of services outlined above is intended to describe the core services provided. However, in addition to assisting your company with the sales process for the first six franchises sold, we provide six months of general consulting to answer questions, provide suggestions, and consult with you on various matters. Our single goal is your success.