Technology Solutions for Emerging Franchisors

Some of the more difficult decisions facing emerging franchisors involve technology — the level of development needed in the early stages of growth; which types of systems to tackle first; and whether to buy from outside sources or to build platforms internally.  Often, significant up-front costs must be balanced against the multitude of advantages that are enjoyed by an advanced, integrated technology system.   A recent study by the Boston

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Growth in a Franchise System: Maximizing Unit Level Economics

It starts at the top, with you – the franchisor: implementing an efficient system; instilling the culture; providing units the tools to succeed. A vital aspect of each of these components is communication. Franchisors must communicate with their franchisees beyond providing them with marching orders. Franchisees are much more likely to embrace your decisions and buy into an idea if they understand the rationale behind them.   In general, make

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Landing the Big Fish: Selling Multi-Unit Deals

Emerging franchisors often view multi-unit deals as a golden egg. However, before jumping into such a commitment, a franchisor should take some time to self-reflect and consider, “Is this right for me?”   Multi-unit sales will only succeed if every aspect of a franchise is compatible with integrating and implementing multi-unit deals. The ability to handle multi-unit deals needs to starts at the grassroots level of the organization. It needs

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A Step in the Right Direction: NASAA Releases New Item 19 Commentary

A Step in the Right Direction: NASAA Releases New Item 19 Commentary

Last week, the North American Securities Administrators Association (“NASAA”) published a notice of request for public commentary regarding financial performance representations, or “FPRs”, that a franchisor discloses in Item 19 of its FDD.  The commentary aims to create a set of guidelines that will control how franchisors are permitted to disclose financial results in its Item 19, by prohibiting certain types of FPRs and requiring additional support or information in

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Attention Spammers: New Rules for Marketing Via Text and Email

Attention Spammers: New Rules for Marketing Via Text and Email

  Before franchisors (or any company) starts sending commercial texts or emails, they should be aware of the new rules regarding this type of marketing.  The Federal Communications Commission and its CAN-SPAM laws govern the rules related to text marketing and email marketing, which means that any person, including business entities and nonprofit associations, that initiates commercial e-mail messages must comply with the CAN-SPAM Act requirements.   Importantly, CAN-SPAM does

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Franchisee in the Jailhouse

Franchisee in the Jailhouse

One huge dilemma a franchisor can face is when a franchisee is accused of a crime that has nothing to do with the operation of the franchised business. First, you have to look to the terms of your franchise agreement. Most franchise agreements will allow a franchisor to terminate the franchise agreement if a franchisee is convicted of a crime or engages conduct that reflects poorly on the franchisor’s brand

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Paperless Filing for State Franchise Registrations

Paperless Filing for State Franchise Registrations

  This week, the Wisconsin Department of Financial Institutions sent out an email confirming that Wisconsin will only accept electronic filing (or “e-filing”) of all franchise registration applications beginning on October 1, 2016. With this announcement, Wisconsin will become that first franchise registration state that does not allow franchisors to submit registration applications in the mail.  This communication also present us with a good opportunity to review the status of

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Avoid the Pitfalls of Offering Gift Cards Through Your Franchise System

Avoid the Pitfalls of Offering Gift Cards ThroughYour Franchise System

Do you have system-wide gift card program?  Have you talked to your attorney regarding the federal and state requirements related to gift cards?  What happens to the gift cards sold by a franchise location that subsequently closes?  If you offer gift cards through your franchise system and haven’t spoken to your attorney, it’s definitely time to have that conversation.   The Credit Card Accountability Responsibility and Disclosure Act (the “Act”)

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