Any restaurant owner knows that opening a unit takes time, and that the number of restaurants an owner/operator can open at any one time is limited, even for the most sophisticated restaurant systems.
For restaurants with too little time, too little staff, or too few capital resources for expansion, franchising can help solve these issues by having the franchisee do most of the heavy lifting. Thus, franchising not only provides the restaurateur financial leverage, but it allows "resource leverage" as well.
To help restaurant owners determine if franchising is the right path for their expansion goals, Chicago-area franchise consulting firm, iFranchise Group, announced it will be offering restaurant owners free evaluations of their businesses' franchise feasibility at the National Restaurant Association (NRA) show in May 2013.
Every year at the show, iFranchise Group is approached by restaurant owners considering franchising. "As we prepare for our ninth year exhibiting at the NRA show, we are pleased to announce that iFranchise Group will be offering free consultations to restaurants considering franchising. Simply stop by our booth #4962 and we can schedule a consultation," iFranchise Group CEO Mark Siebert announced today.
Siebert has been a franchise consultant for over 25 years and has personally consulted with hundreds of restaurant concepts on franchisability. Franchising, according to Siebert, allows a restaurateur to avoid the typical issues with organic expansion by substituting a highly motivated franchisee as both business owner and unit manager. When it comes to growth, the biggest barrier for any restaurateur is typically capital. Since the franchisee provides the initial investment in the restaurant, franchise growth can occur at a much lower cost to the franchisor than organic growth. And since the franchisee has a stake in the unit, restaurant AUVs will often be higher than with units managed by hired staff.
"While it seems as if every successful restaurant is doing it, franchising is not right for everyone," Siebert added. "There are a number of key issues that should be addressed prior to making that leap." Franchise experts at the firm emphasize that in order to successfully sell franchises, the franchised restaurant must be credible in the eyes of prospective franchisees and must be unique in some way if it is to have the "sizzle" that ultimately sells franchises.
Beyond that, the restaurant's menu and operations need to be assessed to determine whether the restaurant can be duplicated without losing quality. Are operations readily teachable, systemized, and documented in an operations manual?
Perhaps most important, the restaurant will need to provide an adequate return to both the franchisor and the franchisee. That means the future franchisor will need to adjust the franchisee's potential returns after deducting a royalty. The iFranchise Group will conduct this analysis on behalf of companies throughout the show and immediately thereafter.
To schedule this analysis, visit iFranchise Group at Booth #4962 at the NRA show to speak to one of its franchising experts.
Biz2Credit Small Business Lending Index Reports Jump in Loan Approvals at Big Banks in April 2013
Small business loan approvals improved to an all-time index high of 16.8% at big banks, according to the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com. Lending approvals jumped in April after experiencing a minor setback in March when approval ratings were at 15.7%. More importantly, in a year-to-year comparison approvals at big banks are up over 50 percent.
"Big banks such as TD Bank, Sovereign and Wells Fargo are investing heavily in new technology to increase speed and service of approvals," said Biz2Credit CEO Rohit Arora, who oversaw the research. "As the economy continues to rebound, lending conditions are gradually improving. Higher credit-quality customers are electing to apply to loans from big banks first now that they are more willing to lend and the service has improved."
Meanwhile, lending approvals at small banks increased for the fifth consecutive month, reaching a new all-time index high of 50.9%. This rate is a slight increase from the 50.8% figure in March 2013. However, a year-to-year comparison indicates over a 10 percent increase in approvals from the April 2012 figure.
"Small banks continue to be aggressive players in small business lending, but must maintain focus on advancements in technology to remain competitive in lending. Otherwise big banks will take over," said Arora, one of the nation's leading experts in small business finance. "Big banks possess the element of brand recognition and can generally offer better rates than small banks, so it is essential that small banks offer an advantage and continue to process loans quicker."
Credit union approvals of small business loans continued to plummet, dropping to 45.2% from 45.5% in March 2013. There is no indication that this trend will reverse soon. Further, loan approval rates sit at an all-time Index low for credit unions.
"The return of big banks to the small business credit market does not bode well for credit unions," Arora added. "In order to bounce back in small business lending, they must improve their technology and expedite the loan-making process."
Small business loan approvals by alternative lenders - accounts receivable financers, merchant cash advance lenders, Community Development Financial Institutions (CDFI), microlenders, and others -decreased slightly to 63.4% from the 63.6% rate in March 2013.
To view the historic chart of the Biz2Credit Small Business Lending Index, click here: www.biz2credit.com/small-business-lending-index/april-2013.html
EXIT Realty is First Real Estate Brand to Launch National Investor Center
The EXIT Investor Center will feature a 4-hour video education program which is free to the public, and an analysis tool called the Case Study Calculator that allows prospective investors to evaluate a property investment for 30 years.
"We are excited about the new content launch with EXIT Realty. We've worked with the company for two years and have certified almost 1,000 EXIT brokers and agents on servicing residential investors," said Greg Rand, CEO of OwnAmerica, "Today it has become clear that investors are the driving force for the recovery of the housing market. EXIT understands and appreciates that, and wants to do more to help them."
More than 12% of all US households, over 14 million people, reside in single family homes as rentals. Historically, most single family investments were owned by small investors, but now a new class of institutional investors has emerged, acquiring thousands of single family homes to hold as rentals for the long term. "Large institutions who are building national portfolios of homes need a real estate partner with a national footprint," Bonnell added, "and that's us."
"The institutionalization of the single family housing market is a major trend in this economy," said Rand, "Estimates indicate that over $100 million will be deployed into the asset class over the next decade. This is a whole new level of real estate expertise that we are developing with our partners." OwnAmerica is the only national network of certified investment specialists in the real estate industry. OwnAmerica's subsidiary, American Portfolio, currently works with several institutional investors as their acquisition partner in ten American cities.
Subway Founder Fred DeLuca to Deliver Opening Remarks at International Franchise Expo
The International Franchise Expo (IFE) will welcome the founder of Subway restaurant, Fred DeLuca, to kick off the industry's premier annual event. DeLuca will share personal remarks during the IFE's opening ceremony that begins at 9:50 a.m. June 20 at the Javits Center in NYC.
"We are elated to have Fred Deluca as part of the IFE this year," said Tom Portesy, President and CEO of MFV Expositions, producers of the show. "Fred brings an incredible perspective on franchising, one which he is uniquely qualified to offer. We are extremely grateful Fred agreed to participate and look forward to his contribution to opening ceremonies along with the thousands of current and future entrepreneurs from across the United States and from around the world who will join us."
The billionaire cofounder of the Subway sandwich restaurant chain was born in 1948 in New York City. At the age of 17, DeLuca created his first sandwich store after an idea came to him from a family friend. He began this venture to raise funds for college where he wanted to study medicine, but his restaurants eventually took over his life. Subway now has 39,000 locations in 101 countries and was deemed the fastest growing franchise in the world.
More than 400 franchise brands will be on display for the public at the 22nd Annual IFE that is sponsored by International Franchise Association. The three-day show draws thousands of entrepreneurs to the Javits Center in New York City seeking franchise opportunities. Taking place June 20 -22, prospective business owners, the top franchise brands and current franchisees have the rare opportunity to meet face-to-face with one another.
In addition to the 400+ brands, the IFE offers the most comprehensive conference on franchising, including more than 70 free seminars along with serious in-depth symposiums. This is a one of a kind opportunity to meet entrepreneurs from the United States and more than 90 countries from around the world.
Updated: May 12, 2013