Fundamentals of Franchising. Started in 1960, the IFA is the world’s oldest and largest organization representing this unique way of doing business Mission: Enhance and safeguard the business environment for franchisors and franchisees worldwide
Mission: Enhance and safeguard the business environment for franchisors and franchisees worldwide
Currently have over 30,000 members, spanning 75 different industries, doing business in more than 100 countriesInternational FranchiseAssociation
Clothing & Shoes
Lawn & Garden
Real EstateSpans more than 75 industries
Accounts for 9.5% of the private sector output
Directly provides jobs for almost 10 million Americans
Combining both direct and indirect job activity, franchising generates one out of every seven jobs in the private sectorU.S. Franchise Market
- Know-How - Support- Trademark
- Initial Fee - Royalty,- Infrastructure
Do you require a certain annual income level?
How many hours are you willing to work?
Do you want to operate business yourself or hire manager?
How much can you invest?
Is franchising for you?
How to Evaluate a Franchise
70% of franchise systems have a fee of $30,000 or less
75% of franchise systems require start-up capital of less than $250,000
Typically 3-6% of monthly gross sales
Pays for trademark usage, training, etc.How much does a franchise cost?
Source: Profiles in Franchising Vol. III; IFA Educational Foundation; 2/00
Arranged through banks, part of loan guaranteed by SBA
Small Business Investment Companies (SBICs)
- Provide equity capital and long-term debt financing
Direct financing from franchisor
Not all franchisors offer it
Many have preferred lending relationshipsFinancing Sources
Supported by the IFA, U.S. Department of Veterans Affairs; Small Business Administration and the Veterans Corporation.
Offers honorably discharged veterans financial discounts to own a franchise, I.e. reduced initial franchise fee.
More than 140 franchise companies participating
More than 100 franchises have been awarded through the programIFA’s Veterans Transition Franchise Initiative (VetFran)