Monthly Archives: January 2013

Net Worth Requirements and Franchise Opportunities

BY BILL BRADLEY, Founder/CEO, America’s Best Franchises

January 31, 2013

Almost every franchise has a net worth requirement for franchisees. Before being considered for the franchise investment, you might have to prove that you have a net worth of $100,000 or some other amount. Some large franchises require even larger net worth — into the range of $300,000 or more.

This can be frustrating for some franchisees. You have enough to buy in, and you plan to invest in order to make more, right? Why should you have to prove your net worth first?

The most obvious reason for net worth requirements is to ensure that the franchisee has the financial health to open a franchise. Parent companies know that it can take time to make money, and they don’t want you to be limited by a lack of capital.

Another– not as obvious– reason is to protect you, the franchisee. If you open a franchise and it fails, costs can really add up quickly.

Reasons why Franchisors look at net worth:

Money Management Skills

Being financially solvent and having liquid assets in excess of a certain amount shows a franchisor that you know how to manage your own money. While it doesn’t necessarily mean you know how to manage other people’s money, franchisors assume you will treat the franchise as you do all your other assets. People who can manage their own money well have a higher chance of success than people who have low liquid assets or who have declared bankruptcy a number of times.

Market

Franchisors care a lot about potential markets. If your neighborhood contains some people with a net worth of a certain amount, the likelihood is that there are other potential customers of a similar level of net worth. These are the markets where the parent company feels they’ll do well.

Experience

When franchisors require exceptionally high net worth, it is because they expect you to have made money through other enterprises. They are looking for franchisees with experience operating a business rather than inexperienced individuals.

What Franchisees should look for:

Appropriate Net Worth Requirements

Very low net worth requirements can mean that a franchise is willing to accept a lot of franchisees, knowing that not all will succeed. If you can meet a higher net worth requirement, you might be better off with a more demanding parent company. If you know that you have the personal characteristics to succeed, even without much net worth, you can choose a company with lower requirements.

Preexisting Franchises

You can often buy an existing franchise and avoid net worth requirements altogether. This can mean that you have a business that’s ready to run from day one. Of course, it can also mean that you have a business that has already made mistakes. Look closely at this option before you invest.

Using Investors

If net worth minimums are a problem for you, you can partner with other investors who have more liquid assets than you do. You might be able to provide more of the work and let your partners benefit by letting their money work for the business.

As with any decision concerning your investment in a franchise business opportunity, you can make the best decision when you fully understand the opportunities. Use our simple Franchise Bulls Eye search tool to find the right franchise opportunity for you.

Get Unstuck in Your Search

BY JAY CAPPERELLA, VP of Franchise Development, Above Grade Level

January 30, 2013

If you are reading this, chances are your email in-box is littered with countless career emails. There are offerings, solicitations, requests and mass produced email drips masked as personal notes.

I spend most mornings deleting, deleting, deleting. My business coach says don’t just mindlessly delete, ‘simplify things’.

But how do I do that? How do I keep the ones that may be good, and get rid of the rest. And, even more important, how do I manage that nagging feeling of what if? What if one makes sense, or a diamond in the rough? What if it is an opportunity that I may regret passing? That is why my wife does not allow me to do the food shopping. I spend 4 hours to her 2 in the store. I check out everything in every isle, with visions of outrageous health and vitality from eating THIS food. Or maybe THAT food. Or perhaps BOTH!

Do you feel me? Ok, enough hyperbole. What is the point?

If your career is stuck in neutral, moving sideways, or worse, in reverse, and you want to keep your options open and making strides, instead of just deleting email solicitations, or allowing them to pile up, try to do as my coach says – keep it simple, organized and planned out. How? Start by being in Control.

HOW TO GET UNSTUCK. Simple. Take Back Control:

1. Control Your Focus. Adjust Your Attitude, daily.

      Being stuck is a lament that comes from frustration that comes from our reacting to the incredible demands and noise of the world as we know it. It is also the abdication of personal controls because a little voice in our head, one we know well, warns us to stop the madness of the silly entrepreneurial dream! Take back control starting now, with this thought and beyond!

2. Control Your Goals. Visualize Yourself 5 Years Out.

      This is the hard one for most of us. We do not do this exercise! So where will you be, with whom, doing what, and what will it get you? Just play with this; have fun thinking big! The saying is, if you don’t know where you are going, you won’t know how to get there. Map it out, and post a visual representation that lights you up. Then, fully list in detail your skills and goals in order to easily funnel them into an opportunity.

3. Control Your Research. Pick 5 Franchise Opportunities Sites (start with America’s Best Franchises).

      Comb through and pick 5 great businesses you like, feel good about, or seem intriguing. Do the same for job sites too, and choose a few entrepreneurial or industry groups on LinkedIn.

4. Control your TIME! (hint, this one is the key to all others). Block time NOW on your weekly calendar to get busy on the effort.

      You made the inquiry, now follow through. Take at least one call from the representative calling you. You never know what you will learn. What’s that, you have no time? Ah ha, yes you do, if you really want it. The insight then is make the time, and gain agreement from everyone you are responsible for, or to, so they understand what you are up to and why (but not the boss necessarily. Just be sure you report your actions and results so that he/she will leave you alone).

5. NIKE! That’s right… Just Do It.

    There is no better time than now to start. It need not be perfect. But if you keep with it, a new habit will be formed.

Most reps and franchise coaches can support you on the necessary research, and help you formulate a success plan. And most can help with financing the total franchise investment. All should be well versed in the contract you will sign. Those are manageable details. Do not worry about them.

My coach will say actions speak louder than words. If you are not acting, it may be that timing for you to get into business is just not right. And that is fine. But do not deny yourself the chance to learn what is possible, and chip away at making that 5 year vision a REALITY!

That said, at our recent team meeting for our service franchise brand – Above Grade Level in home private tutoring – we determined that moving forward with a qualified candidate to evaluate our program the time frame should be no more than 2 months. Anything else will indicate a wavering due to personal circumstance, trepidation or mis-alignment to the model, or a general business risk aversion.

We feel the winning formula is well organized, planned, and responsive person that comes across hard charging, relatively unstoppable, and completely decisive on what they want to achieve.

Do you feel me? Be unstoppable. Keep it simple. Just do it!

Jay Capperella
jcapperella@abovegradelevel.com
856-310-9311

Educational Franchises For Children

BY BILL BRADLEY | January 28, 2013


Our educational system is in a state of change, and many parents are looking to franchise businesses for the support they need. Investing in a tutoring franchise lets you make a difference in the world while earning your share of this $11 billion market.

The tutoring industry grew by about 50% during the recession years from 2008 to 2010, as other industries suffered. Parents see tutoring as an investment in future scholarships for their kids, and they may be more cautious about hiring from the laundry room bulletin board than they used to be. Now, parents want the confidence of a national network – and those networks are typically franchise opportunities.

 

Let’s look at a few of the specific tutoring franchises available through America’s Best Franchises:

Huntington Learning Centers has been in business for 35 years, providing tutoring in academic subjects for students who need extra help. The proven system allows franchisees to provide tutoring services on their own, or to hire college students and certified teachers looking for a little extra money on the side.

Parents are willing to make a significant investment in their kids’ education, and Huntington has name recognition that makes the franchisees’ jobs easier. Schools, parents’ organizations, and moms’ groups are receptive to Huntington and willing to pass on recommendations.

Mad Science is another veteran, with 20 years in business. America is suffering from a skills gap, with employers desperate for science and technology grads which U.S. schools don’t supply. For example, engineers are currently the group most needed by U.S. employers – but only 31% of U.S. high school graduates are strong enough in science even to be able to understand college engineering courses.

Mad Science makes science learning fun for ages 3 through 12 – fun enough for birthday parties, but serious enough for after-school programs, summer enrichment, and workshops. With content correlated to official state learning objectives and intensive training, Mad Science provides a level of support that allows franchisees to bring science directly to kids, parents, and community.

Club Z Tutoring is specifically designed for franchisees without an education background. As a Club Z owner, you’ll match experienced tutors with students for in-home tutoring. Club Z was listed by Entrepreneur magazine as the #1 in-home tutoring company, and the name recognition makes your job easier.

Club Z franchises offer specific subject tutoring, but the system is intended to focus on study skills and test prep, areas of enrichment that can be as appealing to high achievers as to struggling students. The in-home aspect of the service keeps overhead and start-up costs down, too.

College Nannies and Tutors is another service that matches qualified nannies and tutors with families. Since the demand for nannies peaks in the summer and the demand for tutors peaks during the school year, you can see year-round growth by combing the two services.

College Nannies and Tutors offers protected territories, strong support for franchisees, and a cost-saving in-home model. Their technology-based system means that organizational skills rather than an educational background are the key to success.

See more tutoring franchises.

Franchises for Women

BY BILL BRADLEY | January 25, 2013


In 2011, the median income of full time working men in America was $886, while women’s median weekly income was $718 – almost 20% less. A recent report claimed that only 13.5% of executive positions in public companies are held by women.

Is it any wonder that women are investing in their own businesses at an increasing rate? As we moved into the 21st century, the number of women-owned-businesses grew 44% faster than those owned by men, and women now own more than one third of all the privately-held businesses in the United States.

When you own your own business, you may start out earning less, but your investment of time and effort can pay off far beyond what the average woman earns.

Women may be gaining on men when it comes to statistics on business ownership, but there are still differences between male and female business owners.

What franchises have to offer women

Women often have less capital than men, and are less likely to borrow money to start a business, according to government figures. Perhaps partly because of this, women-owned businesses tend to be smaller and to earn less money, and women are less likely to stay in business over time than men, according to a 2011 government report.

This makes a franchise opportunity a good choice for many women, since investing in a franchise can be more predictable than starting your own business from scratch. Underestimating the amount of capital needed is one of the top reasons that new businesses fail.

You may know a business owner in this situation yourself. She got into business almost by mistake, perhaps because people kept telling her that her cupcakes were so great that she should open a business or because friends started buying crafts that she made. When she found out about the regulations she’d have to follow, the costs of equipment and inventory, the wages she’d have to pay, and all the rest of the realities began to sink in, she gave up.

A franchise allows a new business owner to go in with her eyes open. The best franchises offer a level of support that allows a woman to succeed in business, even if she has less training than the average man to begin with – unfortunately still a likely scenario.

The best franchises for women

Obviously, men and women both can have – or learn – the skills needed for any franchise. However, government sources tell us that female business owners are often older women whose children have grown up and left home. These women may have been out of the paid workforce for a while. That doesn’t mean that they don’t have marketable skills.

It can mean that their skills are either less likely to pay well or harder to document. Business ownership allows women to overcome both of these problems: the owner of a catering company is in a very different position from a woman applying to become a school cafeteria worker.

Women are most likely to own businesses related to education and healthcare, statistically speaking, and there are plenty of great franchise opportunities available in these categories:

Women also often have a real understanding of and connection with the target market for cleaning and maid services. Their connections with other homeowners, moms, and women active in the community can give them a great starting point for businesses that traditionally sell to women.

And yet only about 25% of franchise owners are women.

Is it time to change this statistic? Here at America’s Best Franchises, you can search for opportunities that fit the size of investment you’re prepared to make, that offer the level of support you need, and that fit your interests and experience.