Franchise Q&A
plan carefully then the franchise fee would effectively become a fi xed overhead of your business. The higher your turnover the more you keep because the franchisor will not have a share in it. Franchisees that pay franchise fees as a percentage of their turnover may also complain that once their businesses have matured and turnover has increased they pay more to the franchisor without any appreciable increase in the support they receive from the franchisor. So it can be swings and roundabouts and this sort of problem merely highlights the need for franchisees to do their homework and arithmetic very carefully before signing up.
[Q] What fi nancial aspects should I consider when purchasing a resale?
[BIO] CARL
READER
is a partner at Dennis & Turnbull Chartered Accountants and Strategic Advisors
the franchisee? Will these staff members stay with you/the relationships be maintained? Are the income streams legitimate, and within the franchise territory? There is also a critical decision to be made – whether the purchase should be a share sale or an asset sale. There is no simple answer to this, and you should seek advice from both a bfa-affi liated legal advisor and a bfa-affi liated accountant, in respect of the commercial, tax, and legal implications of both.
[Q] I am very interested in a franchise but am aware that I will have to give a panel presentation at some point in the application process. Although outgoing in personality, I haven’t given a presentation in years – any pointers for successful public speaking?
[A] Purchasing a resale is a great way to start a franchise with an income stream
from day one. Any potential investor should, however, note that the due diligence required in purchasing a resale is far more detailed than that of buying a new territory. Putting to one side the checks that a
prospective franchisee of a new territory should perform, you should also rigorously scrutinise the validity of the fi nancials for the resale, paying special attention to expenses that should be included but might not be. For example, is the previous owner operating the business from home? If so, will you be able to do this, or do you need to factor in offi ce rental? Do unpaid family members assist the former franchisee? Are there any preferable arrangements that you will not be entitled to? You should also review the strength of the income streams. If there are recurring customers, are they supported by contractual obligations? Is the income reliant on relationships with key members of staff, or even
20 |
Businessfranchise.com | April 2012
[BIO] KIM
CHAMBERLAIN Is the principal of Successful Speaking, a public speaking coaching service
confi dent you will feel. 1. Prepare early – days or even weeks beforehand. Decide what you would like to say and refi ne it until you feel it’s the best it can be.
2. Put it into a structure – a short opening; a longer body which has around three main points; and a short ending.
3. Decide if you want to include visuals, such as items to take along or PowerPoint. Prepare these well and make sure you are used to the equipment you’ll be using, whether laptop, overhead projector, etc.
4. The golden rule is ‘practice’. Practice until you know your presentation fully. Know it inside out and back to front. Give your presentation to someone else. Get feedback.
5. Ask people to ask you questions so you can prepare answers for likely questions you may get on the day.
Public speaking is one of the most important skills anyone can develop in order to be successful. Enhance your skills by attending a training course or putting some work in so you can make the best of the franchising opportunity.
[A] The main reason that most people get nervous when speaking in public is because
they don’t do it very often. The nerves build up beforehand, are present during the presentation, and subside afterwards, then the speaking aspect of the presentation is forgotten until the next time and the whole pattern repeats itself. The way to deal with this is to put some work
in before your speaking engagement. A good presentation is like an iceberg. What people see is the small amount of time when you speak. What they don’t see is the amount of work that has gone into making it good. The more work you put in, the better it will be and the more
Contact details
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