Steps in Franchising your Business
We will consult with your attorney
regarding the strategic and operational issues contained in the documents. Issues that affect the success and
profitability of the franchiser and the franchisees. Management 2000 does not prepare legal documents. We believe you
will be better served having an established law firm that will, if necessary,
to defend your documents in court, prepare them for you.
Management
2000's role in this project includes participating in meetings (phone and
face-to-face) between you and your attorney, input on all drafts, discussions
with the attorney, reading of all documents and serving as project manager for
completion of the documents on schedule.
If you need
an attorney we can recommend one with national recognition and an outstanding
reputation who understands business as well as law.
q
Create a storyboard
defining your company’s franchise offering: what markets, what strategy, rate
of growth, key issues, costs, etc.
q
Establish: mission, core values, vision, strategy, systems,
internal strengths and external opportunities, internal and external threats,
analysis of current systems, identification of operational issues, key result
areas, major objectives for each key result area, projects and accountabilities
established with time-lines.
C Identify all the critical issues pertaining
to the creation of the U.F.O.C., single, multi-unit and Area Development
strategies.
C Build a financial model showing the
investment needed to begin generating positive cash flow.
C Construct a pro forma that reflects staffing needs, i.e. when people are
brought on board, at what salary.
C Construct a pro forma that reflects accurate general and administrative
expenses for the franchiser.
C Construct a pro forma that accurately reflects development, franchisee and
royalty fee revenue based on a projection of when Franchise License Agreements
will be granted and when the franchises will open and begin generating royalty
revenue.
C Construct a strategic and operating pro forma for a franchise unit.
C Enable you to construct an accurate
organization chart.
Going
through this process with Management 2000 will help you to think the way you
must think to be a successful franchiser.
The first step in this process is a Strategic
Planning meeting. During this meeting we will develop unified
thinking about the critical basic concepts Management 2000 has developed over
the years: history and philosophy of franchising, business, creating a
customer-driven culture, marketing, market share, strategic-partners,
franchisee-franchiser relations. We will also get a clear overview of the
different parts of the project and each individual’s responsibilities and
accountabilities. See bullet number two
in the above paragraph ("Establish: mission, core values,..")
The result
of this meeting will be that everyone involved in the preparation to franchise
knows what the expected results are for the next 90-120 days. We will also help
you work through the operational issues that must be decided upon before
launching the national franchising initiative.
As we
discussed, this project will be divided into two parts: 1) Strategic planning
meeting and 2) preparation of the financial model. We will work with Marc to complete the financial model after the
planning meeting.
1) The
Strategic Planning meeting includes the time of Bob Gappa and other M2000 team
members as deemed necessary.
"Time" includes meetings and phone conversations with you and
your team, as well as our own time in preparation for the Strategic Planning
meeting.
2) Preparation
of financial model includes preparation, research, and construction of the
financial model with your appointed staff.
It will include: (a) A franchiser financial model showing the investment
needed to begin generating positive cash flow, (b) The franchiser financial
model will have a pro forma that
reflects staffing needs, i.e. when people are brought on board, how many, at
what salary and benefits, (c) The franchiser pro forma will reflect s accurate general and administrative
expenses for the franchiser, (d) A pro
forma that accurately reflects development, franchisee and royalty fee
revenues based on a projection of when Development and single unit Franchise
License Agreements will be granted and when the franchises will open and begin
generating royalty revenue.
We will take what you have and integrate
into the new manual.
Generally the operations manuals for a
franchised business will include: pre-opening, franchisees responsibilities,
administration, marketing and daily operations.
The Process: We will work with you and designated personnel to
develop and rewrite your company’s Franchise Operations Manuals. We will do the
following to complete the manuals to your satisfaction:
a. Prepare a milestone chart detailing the major
results, due dates and persons responsible for these results.
b. Prepare a topical outline for your approval
to show the organization of the manuals and scope of the project. With your
concurrence, we may change the organization of the material as we write the
manuals.
c. Rewrite, edit and format any existing manual.
d. Obtain information to supplement existing
written materials through research, telephone interviews and meetings with you
and your designated staff.
e. Add the
voice of the customer to each section of each manual.
f. Prepare at least two drafts of the manuals.
We will write the drafts and send them for your review. You review the draft
for accuracy, completeness, organization and understanding, format and style.
We edit and rewrite the manual incorporating your comments so that you have a
complete, easy-to-read and useful manual.
g. We will send you one master copy of the
manuals ready for duplicating and a computer disk copy that you can use to keep
the manuals up to date.
Management
2000 will require the following from you:
a. Copies of all written resources for the
operations manuals.
b. Access to appointed experts to supplement
written materials.
c. Appointment of an Aedit group.@ This will be
the individual or group responsible for providing comments on the drafts to
Management 2000.
Management
2000 will work with you and designated personnel to prepare your company’s
pre-opening manual. The following are subjects recommended to include in your
pre-opening manual:
C Opening Time Line and detailed activities
(everything that must happen between the signing of the franchise agreement and
the opening of the first location).
C Real estate assistance, procedures and
procedures.
C Site selection criteria for locations.
C Prototype franchise unit building plans.
C Equipment
purchasing specifications.
C Grand opening marketing plan (what, when,
where, who and how).
C In unit pre-opening training (what, when,
where, who and how).
Management
2000 will create an outline with your input, acquire the material and provide
you with drafts and a final copy. We will provide you the final manual in two
formats: one copy ready for duplication and a computer disk copy so you can
keep it up to date.
Management 2000 will prepare a training
program for the Franchisee, and Area Developers, including a Participant’s
Workbook and Trainer’s Guide. This will enable a trainer to help Franchisees,
and Area Developers, process and learn the information and systems they will
need to build a profitable business.
It
will not include training for positions within the unit. The Participant’s
Workbook and Trainer’s Guide will be developed from meetings with you and key
personnel, the operations manual, any existing training material and a training
program outline. The key steps in developing the training program are as
follows:
a. Identify the goals of the training program
and a timetable.
b. Identify your company’s personnel who will
provide input for the manual.
c. Review and discuss the training program by
phone or in person to insure that Management 2000 staff has a good
understanding of the program.
d. Identify the objectives for each module or
section in the program. Identify skills needed for each module or section.
Identify situations for case studies and exercises.
e. Design and
develop a first draft of the Trainer’s Guide and the Participant’s Workbook.
Submit it to you for review.
f.
Receive your comments, write a second draft and submit it
for your review.
g. Make final revisions and provide a
camera-ready copy of the Trainer’s Guide, Participant’s Workbook and overhead
transparencies, as well as computer disk copies of the text.
As
additional services: (1) A Management 2000 consultant can train your company’s
trainer(s) and any other key personnel to use the Trainer’s Guide. This can be
discussed at a later time as you deem necessary. If requested by you we will provide you with a proposal for this
additional project. (2) Once the
Franchisee Training Manual is outlined and underway, we can further define and
outline the in-store training modules needed.
At that time, Management 2000 can craft a proposal to create the
in-store training modules.
Management 2000 will work with you to
prepare a system to generate, qualify and award franchises to qualified
prospects.
a. Develop a profile of the ideal Franchisee
candidate(s).
b. Set up candidate generation strategies.
c. Design a total system for dealing with the
candidates from the initial inquiry through the signing of the agreements and
interaction with the Corporate Office.
d. The system
will include promotional strategies, scripts, presentations and letters.
e. We will
prepare a budget for the preparation of Promotional Materials that will be part
of the implementation of the candidate generation strategies.
f.
We will prepare a budget for the cost of marketing the
franchise through direct mail, advertising and other means.
h. The process will include training personnel
on how to use the system and how to help candidates make an informed business decision about your opportunity.
i. We will consult
to the preparation and production of promotional and presentation materials.
j.
Train appropriate personnel on the legal issues pertaining
to U.F.O.C. disclosure and granting the franchise license.
k. We will
consult to the creation of a franchise development department and resulting
staffing issues.
Our fees
would not include the costs of designing and producing promotional materials
sent to candidates, advertising copy and the cost of placing
advertisements. As noted above the
project does include the determination of these costs.
We can
discuss the benefit of having M2000 be your franchise granting department. We could initially qualify the candidates
from Houston and we could also do the follow-up qualifications and present to
you qualified candidates for your approval or rejection. You would be involved in this process and
would, at all times know, what was going on and what
was
happening through regular contacts and reports. If we agree to this model we can discuss the details at a later
date.
Management 2000 will work with you and
designated personnel to create your company’s operational support system. The
ongoing relations between your company and its Area Developers, single and
multi-unit operator franchisees will be a critical factor in the success of
your company’s system. This project
will include the following:
C Establish the philosophy of the relationship
between the Area Developers, single and multi-unit franchisees.
C Identify the external support system needs
(personnel, training, etc.).
C Identify the operational issues on which
field personnel will train franchisees and reporting system for field
personnel.
C Create the internal support structure to
facilitate franchisee needs.
C Establish reporting requirements for
franchisees.
C Establish mandatory attendance meetings for
Area Developers and franchisees.
C Create time frame and structure for field
support consultations.
C Set up Franchisee Advisory Council (including
By-Laws) for feedback from the franchise network.
C Design a Task Force (Franchisees, Council
members, vendors and Management 2000) to insure an orderly evaluation and
documentation of your Company’s system as it evolves in the first 18-24
months.
C Train all of your company’s personnel on the
Field Consultant process.
|
Month |
1 |
2 |
3 |
4 |
5 |
6 |
|
Strategic
Planning |
|---| |
|
|
|
|
|
|
Financial
Model |
|---- |
---------| |
|
|
|
|
|
UFOC,
License Agreement and Area Development Agreement |
|--- |
---------- |
---------I |
|
|
|
|
Pre-Opening
and Operations Manuals |
|
|--------- |
---------- |
---------- |
--------I |
|
|
Training
Manual |
|
|--- |
---------- |
---------- |
--------- |
--------I |
|
Development
System |
|
|--------- |
---------- |
--------- |
--------I |
|
|
Field
Consultant Manual |
|
|
|
|
I--------- |
--------I |
|
|
|
|
|
|
|
|
Payment
schedules are tied to the time lines of each project. When you decide to begin a project, we will create a letter of
agreement for each project with exact timelines, project fees and payment
schedules. Should the timing of various
parts of the project substantially change, both parties will agree on how the
payment schedule should be adjusted.
Expenses are billed separately.