Presentedby:ChrisCynkar,CPA

FranchiseConsultant,FranChoice

TopicsofDiscussion

� BackgroundaboutChrisCynkar

� Top10Questions–Asked&Answered

� Nextsteps

WhoisChrisCynkar

�  Accounting&financebackground–CPA,Big4firm

�  Businessowner–since1999�  6businessacquisition�  1fantasticallybadstartup�  Franchiseownerwith3

differentbrands�  FranchiseConsultantwithFranChoice

�  AdjunctprofessoratCarnegieMellon-Entrepreneurship

WhyamIheretoday?

�  Iwantyoutobeabusinessowner!

�  Franchisingistheidealtransitionfromemploymenttobusinessownership

�  Allowmetobeyourbridgetobusinessownership

Aren’tallfranchisesfoodrelated?

FranchisingisVERYdiverse

�  MANY different industries �  Automotive

�  Meineke, Jiffy Lube �  Business Services

�  Supporting Strategies, Sandler Sales Training

�  Healthcare �  Miracle Ear, Right at Home

�  Personal care �  Massage Envy, Deka Lash

HowmuchmoneycanImake?

2DifferentIncomeQuesCons

IncomePotential

SpeedtoProfit

WhatIncomeisPossible?

� Whatistheincomepotential?�  >$50,000profit-YES�  >$100,000profit-YES�  >$250,000profit-YES

� Howdoyoubuildmoreincome?� Multi-UnitOwnership�  Itisthe“secretoffranchising”

SpeedtoCashFlow

� What models are quick to profit? �  Owner-operator vs manager-run

�  Pay yourself instead of a manager

�  Service vs retail �  Finding a location takes time �  Retail has more overhead expenses

�  B2C vs B2B �  B2B sales cycle is typically much longer

Howmuchdoesitcosttoinvestinafranchise?

InvestmentLevelsareAffordable

� Very wide range - $50,000 to $3,000,000

� Price and success are NOT correlated

� Most franchise investments are $100,000 - $250,000 �  Includes ALL business expenses: franchise fees,

startup costs & working capital �  Does NOT include your personal living expenses

Whatarethefinancingoptions?

MulCtudeofFinancingOpCons

�  Identical to buying a house

�  Equity down payment – 30% of total

�  Loan options – 70% of total

EquityInvestmentOpCons–30%

� Option #1 - Start with cash savings

� Option #2 – 401k rollover �  Not a distribution, not a loan �  No taxes, no interest, no penalties �  Invest in your own company!

� Option #3 – Find a partner

LoanOpCons–70%

� Goodnews–bankslovefranchises�  Provensystems=reducedrisk!

� SBAloansaretheprimaryoption� HomeEquityLOC� Marginloanagainstabrokerageaccount

WhatwillIdoeveryday?

Owner’sRole

� Whatisyourdailyinvolvementlevel?� Owner-Operator

�  Daily,directinvolvement�  ExecutiveOwner

�  Daily,indirectinvolvement�  Semi-AbsenteeOwner

�  Weekly,indirectinvolvement

Owner-OperatorModel

� Splitrole–OwnerandGeneralManager� Youservethecenterpointofthebusiness�  Interactdailywithcustomers&employees� Lovethebusiness� Example–BudgetBlinds

ExecuCveOwnerModel

� Dualrole–OwnerandCEO� Youinteractwiththebusinessdaily� Managersinteractwithcustomers&employees� Yousetstrategy,buildtheteam&managefinancials� Example–ServPro

Semi-AbsenteeOwner

� Perfecttransitionfromemployeetoowner� Singlerole-Owner� Part-timecommitment(10-15hours/week)� ManagementteamdoesALLdaytoday� Example–SportClips

Whataboutsales?(Idon’tlikesales.)

YouhaveChoiceswithSales

� Whichoptionworksbestforyou?

� #1–YOUselldirectlytocustomers

� #2–Manageasalesteam

� #3-Marketingdriven

Whatisthe“best”franchise?

ItDepends

� Similartofindingthe“best”restaurant

� Whatdoyoureallywant?

� Thisiswhereyoureallyneedsomeguidance

KeyEvaluaConCriteria

Primary Factors

� Owner’s Role � Sales & Marketing Role � Capital to Invest �  Income Goals

Secondary Factors

�  Location � Employee related �  Industry preference � Brand maturity

“BestOf”Rankings

� Most are generally not reliable because the franchise companies can pay to be included

� Some sources are more objective �  Entrepreneur magazine – every January �  Forbes magazine �  Franchise Business Review

Whatarethesuccessrates?

SuccessRatesareHigherthanyouThink

� Therearemorethan2,500activebrands

� Lookateachbrandindividually�  ReferencetheFDD–Item20

� FranChoicepre-screensopportunitiesinordertoonlyworkwiththebestofthebest

Whatdoestheprocesslooklike?

Fromideatoreality

Phase1

•  FranchiseDueDiligence

•  8to10weeks

Phase2

•  Setup–siteselection,construction,training

•  Service4weeks

•  Retailislonger

Phase3

•  Rampup–fromstartuptoprofit

•  Timelinevariesbasedonbrandspecifics

FranchiseDueDiligence

FoundationInternal

conversationswithfranchisor

ValidationConfirmyour

beliefsbytalkingtocurrentowners

ConfirmationMeetthe

executive;aretheytherightpartner?

Whatarethenextsteps?

TreatThisLikeBuyingaHouse

� Setyourbasicsearchcriteria

� Startresearchingthebasics

� Connectwithanexpert

IcanbeyourFranchiseExpert

�  Iwillworkwithyouto:

� Understandyoursituationandgoals

�  Presentyouwithpre-screenedoptions

�  Guideyou,stepbysteptomakegreatdecisions

YouShouldAlsoKnow

� Myservicesare100%freetoyou�  Iworknationwide

� Youwillworkonlywithme–nostandins

HowtocontactChris

� ChrisCynkar

� Telephone:412-877-2000

� Email:ccynkar@FranChoice.com

� Mycalendar:www.calendly.com/ccynkar/