Monday, April 17, 2017
When creating your franchise plan, one of the first things you'll need to do will be to choose one or more structures under which you'll offer franchises. The choice of franchise structure will impact a number of variables that will further define your franchise organization—targeted franchisee, support requirements, staffing, and cost structure -- so you shouldn't enter into it without some forethought and financial modeling.
Understand that when it comes to franchise structure, there's no standard naming convention. For instance, what we call an “area representative” structure is referred to in some organizations as an “area developer” strategy and in others as “master franchising.” Here's our shorthand definitions for quick reference:
Single-unit or individual franchising involves granting a single franchise to a franchisee for just one business operation. While the franchisor may choose to award more than one franchise to some of its franchisees, they're typically sold individually and not as part of a multi-unit territorial grant. Perhaps the most prominent example of a company that grew primarily through single-unit franchising is McDonald’s.
Wednesday, April 12, 2017
When I was 10 years old, all of my friends wanted to play for the New York Yankees. Not me. I wanted to be a Hells Angel.
At the age of 19, I found myself involved in one of the most notorious outlaw motorcycles gangs in New York City. In retrospect, it was simultaneously one of the best and worst decisions of my life. While being involved in the gang, I didn’t realize I was learning valuable lessons that I’d be able to apply years later in my businesses. It’s safe to say that if I didn’t go though that phase in my life, I wouldn’t have the business instinct that I have today.
Thursday, April 6, 2017
Most entrepreneurs I know are driven, curious and never content with the status quo. These traits are probably why so many of them dabble in multiple ventures. A restaurateur may open a wine shop; a personal trainer may launch a line of fitness apparel. There’s always a new opportunity out there somewhere, and diversifying your income can be a sound strategy.
If you are running multiple businesses or thinking about starting a second one, you may be wondering what is the best approach for legally structuring each business: should you have separate corporations/LLCs for each one or a big umbrella company to hold them all? Are there any limits to the number of companies one person can form?
Generally speaking, there are three different ways to structure multiple businesses. There are advantages and disadvantages for each approach -- and the best structure will depend on your personal situation. Here’s some general advice to consider, and you can always discuss your specific needs and details with a CPA or attorney.