Over four decades into these regulations and the perils of getting trapped into a franchise scam haven’t ceased to exist.

It is imperative that prospects carry out thorough and extensive research before committing their hard-earned money to a franchise system. There are too many superior systems available for various budgets and there is absolutely no reason to settle for anything less than the very best.

One of the most valuable research tools available to prospective franchisees is the Franchise Disclosure Document or the FDD. Every franchisor –by law is required to provide their prospective franchisees with this document.

The world-wide web is also a huge resource –with a wealth of information. However, use caution when going online to research a system.

You can’t believe everything you see or read online. With the ease of self-broadcasting and self-publishing, anyone with basic skills and a PC can publish what they like –without any regulation. You need to use your own judgment and carry out thorough research to find out what’s right for you.

So what are some signs of a strong franchise?

A franchise is only as good as its brand name – which eventually determines the performance and success of other franchisees within the system.

A good franchise is one with a broad recruitment process, which at some point replaces the selling process so only the most able gain entry into the system.

There are a number of critical areas that –through careful analysis can help you detect a scam:

1. Years of experience in the business: The number one thing to look out for –when looking for signs of  a spurious or inept franchise is the number of years the company spent in the business before entering the franchise industry. I spent years coaching businesses before I went into franchising. I have personally invested millions of dollars into establishing and perfecting the systems of my franchise. Unfortunately, many franchise companies venture into franchising before getting into the business they are in. They are incompetent with flawed systems and many franchisees are getting ripped off by such companies.
2. Experience of the management team and how it supports franchisees: You don’t want to invest in a franchise with an inexperienced team. Each member on my team at ActionCOACH has a good understanding of not only the business coaching industry but also of franchising. It is a good idea to call franchisees and see what they think of the management team and also find out what type of support they will provide you.
3. The financial condition of the company: Needless to say, the financial health of the franchise is vital in your decision-making process.
4. Can they justify the franchise fees? Prospects looking to invest in a recognized brand with thriving franchisees should be prepared to pay a hefty franchise fee. In order to determine if the fees are acceptable, ask existing franchisees if they are getting value for their buck.
5. The franchisor’s litigation history: While litigation is the cruel reality of doing business in today’s world –with most companies having some type of legal action by or against them –it is essential to closely scrutinize these cases, which are available in the FDD.
6. Awards by Recognized Institutions: The growing popularity of the franchise industry has given rise to several reputable organizations that award franchises based upon their financial viability, training and support, systems maturity, etc. An award-winning franchise seems to be a good indicator of an honest and successful franchise system.

With all the companies I have coached and trained, I've seen a massive correlation between the levels of repeat business and the levels of profit.

So, three things to do this week ...

1.   Firstly, what percentage of your business is repeat business V's new customers ... only when you know the number can you grow it ...

2.  Break your past customers down using the 80:20 rule ... who are the 20% of your customers who bring you approximately 80% of your profits/revenues.  It won't be exact but it will be close ...

3.  What are three simple things you could do today to get more repeat business, how will you ask your customers to come back more often, at higher values and with more loyalty ... ?

All the Best ... Brad Sugars ...

http://www.youtube.com/watch?v=XyPkUXGq1S0&eurl=http%3A%2F%2Fwww%2Efacebook%2Ecom%2Fhome%2Ephp&feature=player_embedded

Let me know what you get from it ...

Brad

http://www.bradsugars.com/page.php?page=bradstips

And ...

http://www.actioncoach.com/free-business-tools.php

And ...

http://www.bradsfreeebooks.com/

Hope you find many useful items that really help you grow your business ...

All the Best

Brad Sugars

http://askbradsugars.com/

Ask me about your business, about my business, about my books, me, my ActionCOACH franchise, anything you like ...

Hope to get your questions soon ...

Brad

http://www.businessisbooming.biz/

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Register now or send this invite to your Australian friends and colleagues ...

That’s a shame, considering how profitable it can be.  Here are 7 brilliant applications of the idea …

1.                  Introduce yourself to the database of another business …

This is the easiest way to join forces, and something almost any business can do. 

It’s probably best explained with an example.  Let’s imagine you run a small hairdressing business.  You have a slew of regulars, but rarely see any new business, owing to a poor location and dull advertising.

No problem – for less than the cost of one ad, you can have 300 customers personally recommended to you.

Here’s how it works.  You arrange to meet with the owner of a non-competitive, yet related business.  For a hairdresser, a beauty salon would be ideal.  Dependent on the target market of the hairdresser, a ladies gym might also be a winner.

Tell the business owner you are willing to give every one of their customers a free haircut, valued at $18.95.  The trick is, you’re going to set it up so it looks as though the owner of the beauty salon has personally paid for this gift.

You write a letter, signed by the other business owner, that says ‘ Thanks for being a customer – I appreciate it immensely.  Just to show that I truly am grateful, I’ve arranged a special gift for you … a complimentary stylecut with Julia’s Hairdressing.  I recommend Julia and her team highly – and I’m certain you’ll appreciate the difference too.’

You mail this letter to the beauty salon’s entire database.  To sweeten the deal, you might offer to pay for the postage and printing.

The benefit to the beauty salon is clear – they get to mail their customers an $18 gift without paying a cent for it.  They get all the good feelings, referrals and repeat business and they didn’t have to do a thing.

But the real benefits are yours.  Hundreds of qualified people will receive a personal recommendation to see you for a haircut.  They’ll also get an almost irresistible offer.

Compare this with a traditional ad.  You spend $400, get 10 calls, and maybe 5 sales.  Cost per sale: $80.  That’s pretty steep. 

With the joining forces concept, the stats are a lot more appealing.  A mail out to 200 people might cost you $150 all up.  Let’s imagine you get 10% (a pretty conservative estimate) – that’s 20 new qualified customers.  Cost per sale: $7.50.  Hmmmm, now it’s starting to make sense.

2.                  Join forces with 4 or 5 related businesses, and form a ‘collective’ ...

This idea especially applies to people in the service industry.

Here’s a great example …

Let’s say you’re an auto electrician.  You’re doing ok, but most of the work is going elsewhere.  The main mechanics in town are referring the work to other guys, and you’re getting killed in Yellow Pages.

What can you do?  It’s a tough one – although everyone who has a car may one day need your service, you never know when. 

The answer is to join forces.  Get on the phone to a mechanic, a car detailer, a tyre retailer and car tinter.  Tell them of your brilliant idea – ‘let’s join forces!!’.

Here’s how it works.  You’ll advertise yourselves under the one name – let’s say ‘Guaranteed Car Services’ (you’ll probably need to be a bit more creative than that).  You have one number (a Freecall number), one guarantee (either you’re delighted or you get the job for half price) and one policy – everyone helps everyone else out.

If the mechanic, car tinter, car detailer or tyre seller becomes aware of a car that needs an auto electrician, you get the name and details.  If you see a mechanical problem, you pass on the customer to the mechanic.  If the car detailer overhears the customer talking about tinting, they refer them to the car tinter.

At the end of every job, you run the customer through a checklist – ‘Ok, that’s you’re electrical problem sorted out.  Now, when was the last time you had the car serviced?  Right, I could arrange a service for you.  Here’s a $25 voucher towards that – I know the mechanic, Paul, and he does a top notch job.  Oh, by the way, summer’s coming – have you thought about tinting?  No, you should – I’ve got this card here from John’s Auto Tinting.  He said if I gave it to any of my customers, he’d do two windows for free when you book your whole car in.  And in case you didn’t know, both of those guys are covered by Guaranteed Car Services.  If you’re not delighted you get your money back.’

You run through your checklist, until each business has been covered.  Any ‘hot’ leads get passed on to the relevant business, and they return the favour for you.

It takes a bit of organisation, but it’s certainly worth it.  Here are 3 more interesting combinations …

a)     Guaranteed Home Services – a lawn mower, water blaster, painter, roof restorer and tree stump removalist.

b)     Guaranteed Beauty – a beauty salon, hairdresser, masseuse, psychic and gym.

c)     Guaranteed Fashion – a clothes store, shoe shop, hat store, tie store and image consultant.

Open your mind to the possibilities – who could YOU join forces with? 

3.                  Arrange free gifts to give to your customers …

A great one for businesses where there’s a long interval between purchases.

Let’s think about a car salesperson.  The hardest thing about selling cars is getting people to remember who you are next time.  Because they go 2-3 years without buying a car, there’s very little loyalty.

That problem is easily solved – just keep in regular contact.  Mail your customers cards, letters and communication, just keep the relationship going.

But if you’re going to mail them something, why not make it extra special.  Drop down to the local clothes stores and say ‘you know, most of my customers are young trendy women – they’d love to know more about your store.  If you give me a $20 gift voucher for every one of my customers, I’ll write a personal recommendation that they come and visit you’.

Once you’ve got that out of the way, go onto the next target business – a massage therapist.  Say ‘most of my customers have the money to spend on a monthly massage, and if they were shown how good it really is, I’m certain they’d be more than willing to come back regularly.  If you give me a voucher for every one my customers, I’ll mail it direct to them, and recommend that they see you every 4 weeks’.

Ok, that should take care of your customers for a few months.

Imagine that – you buy a car from someone, then start getting all these great gifts in the mail.  How would that make you feel?

You can arrange gifts from almost any other business – either in the form of a gift voucher, a free service, a trial product, a 2 for 1 coupon, a free consultation, an in-home design service.  The possibilities are endless.

Best of all, you won’t have to pay a cent for any of it.  And because it’s off your own back (and not the dealership), you take the list of names with you when you leave for another yard. 

People buy off people, so if you’ve built the relationship, you get the sales.  

4.                  Join forces with the suppliers of businesses you’d like to sell to … this is an extension on idea 1.

Let’s say you’re a management consultant – you specialise in helping mangers reach a state of peak performance.  Simply introducing yourself directly could work – but it’s really only you saying ‘hey, I’m good’.

People expect you to toot your own horn.  It’s when someone else toots it for you that they get excited.

So how do you do that?  Easy – hit the suppliers of the businesses you’d like to deal with.  For example, their stationery supplier.  You say to them ‘I’d like to give you a gift which you can them pass on to your top clients.  It’ll make them love you, and give them some genuine benefits.  I’m a management consultant, and I charge $456 an hour.  For your clients, I’ll do a full 1 hour appraisal and performance evaluation free of charge.  This will be your gift to them.’

To understand why this idea will work, you first need to understand the plight of the poor old stationery supplier.  They’re aware that almost anyone with better prices can come along and knock them off their perch.  There’s so little differentiation between service, price is often the only factor.

Doing something out of the ordinary for their customers will give them the edge.  They’ve introduced emotion into a very bland, price driven business.

The benefit to you is also massive – you get a personal recommendation from someone the prospect already knows and trusts.  For something as intangible as management consultancy and personal performance coaching, that’s essential.

5.                  Sell someone else’s product … probably the most straightforward joining forces concept of them all.  The trick is to be constantly scanning for hot products related to your business. 

Getting back to our hairdresser example, there are plenty of opportunities – a new quick –setting hairspray that you spray just once, a hair dryer that runs on solar power yet generates more hot air than any on the market, a new hair colour that changes with the weather.

You simply write your customers a letter that explains the benefits of the new product and ends with ‘Of course, I’ve arranged a special price for you.  To order, simply call me now with your credit card details.  I’ll arrange postage within 2 days.  And your purchase is guaranteed – if you’re not delighted, simply phone me and I’ll drop by and pick it up.’

Suppliers generally won’t mind, even if they’re dealing direct with retail stores – it’s another opportunity to sell the product after all.

You can also do this with service businesses – simply take a commission of their first sale to the customer.  For instance, a gym might sell a massage therapist in a mail-out to the their customers.  They do this, on the condition they get half of the first sale.  If the massage therapist is smart, they’ll understand the lifetime value of the customer, and jump at the chance.

So put your thinking cap on – who can you join forces with?  There’s thousands of businesses out there.  Why not make some of them your allies?  

They try everything - new sales scripts, better ads, new products, yet to no avail ... every day they open their doors, they plunge further into debt.

In most cases, the reason things aren’t working is very simple - there’s not enough business out there to keep them operating.

To illustrate, think about this example - Harry and Barry open up a hardware store.  There’s 6 other hardware stores in the immediate area, but the boys aren’t fazed - the other shops are staffed by ‘pimply kids who don’t know anything’.  According to Harry and Barry, they’re experts in the game - and will get heaps of business simply because of that.

They open a store a block down from the big competitor, write a couple of ads with the headline ‘Opening Sale’ and they’re off and running.

For two weeks, things seem to go well - they may be selling the products extra cheap, but they’re selling lots.  The cash register keeps ringing and things are pumping along.

Soon after though, things slow down.  In fact, they almost come to a dead stop - just a few customers a day, buying a hammer here and there.

The boys wonder why.

Whilst they got a few things right - the ads were ok, the customer service was good, the store was laid out well and the products were well chose, they missed the most important point of all ... whether the business was viable at all.

If they’d done a little research, they would have discovered the following - every year, 1.1 million is spent on hardware in their area.  If each of the 7 local hardware stores had an equal share of the sales, each one would have revenue of around $150,000 each.

Of course, the stores had wildly different figures.  The largest, a nationwide chain had the lion’s share at $475,000 - almost half.  The next biggest, a smaller, older store with a loyal client base, had $260,000. 

The 5 other stores made up the rest.  Naturally, 4 of them were on the verge of going under.  The fifth was Harry and Barry’s.

Looking at it from this perspective, the boys’ dream of opening a hardware store and becoming wealthy seem a little unrealistic.  They’ll be lucky if they last the next 6 months.

Think about your situation.  How much business is out there, and how much can you actually claim?

If there’s only a million dollars worth of sales, and you manage to grab 10%, that’s only $100,000 in sales.  Take out basic expenses (not including your own wage), and you’d be lucky to pull $30,000 profit out of it.

You may as well go and work for someone else - that way, you’ll earn more money and have less responsibility.  If the business goes down, it’s not your house, car and credit rating on the line.

So what do you do if your business is a dud?

Sell - get the heck out before it’s too late.  “But nobody will buy it,” most people say.  Wrong - you’d be surprised how many people there are willing to take a business that’s just getting by to buy themselves a job and ‘make a go of it’. 

Take the money and invest in something with more potential.  “But I can’t do anything else,” business owners often contest.  Wrong again - if all you could do is sell hardware, or wash dogs, or whatever it is you do, you should avoid business and get a job.

Owning a business isn’t about doing something - it’s about making money.  It doesn’t matter what the actual product or service is ... you can easily find people who know how to do the work; your role is to do the business.

So don’t flog a dead horse any longer than necessary - you are not bound to your business for the rest of your life.  You are free to change direction at any time.

Scared?  Good - that means something has stirred.  Let that stirring become action, go see one of my ActionCOACH's and you’ll be taking the first step towards real business success. 

All the Best ... Brad Sugars

Let me give you mine.  The usual restaurant my wife and kids go for lunch on a Sunday had an item on their menu changed by their "corporate head office" and it's my favorite sushi ... it arrived and I was unhappy.

So, when the manager came over, he made a really quick decision and took action.  He said, sir, let me make you the old one on the house right away ... happy customer, will return and buy again.

Simply put he took action to turn an unhappy customer into a happy one.   I'd love your story to help with a new training program on turning unhappy customers into happy ones ...

Thanks ... Brad ...

PS.   If you want help turning your unhappy customers into raving fans, speak with one of my ActionCOACH Business Coaches, as franchisees they know what it takes to run a business of your own ... www.actioncoach.com ...

In fact, it's decisions to lease something and pay over 5 years, or to take on another type of monthly commitment that kill a company more than anything else.

Imagine running your business, bringing in a great deal of money and then finding out that there’s not enough to cover your bills.  It literally happens every day, in fact, it would amaze you how often companies go under, right after their highest period in sales.

For just one reason ... they have literally no idea how to manage their cashflow ...

Easily more than 80% of the business people I meet have no idea about the cash gap, and even less of an idea about how to work a budget and keep to it ...

The cash gap is the difference in timing of when you buy something and have to pay for it, it then sits on the shelf, or is a wage for a person at a desk and then it might be 90 days later or longer you sell it, and then 45 days later still you get paid for it.  The cash gap here is 90 days shelf/desk time and 45 days until you're paid ... so 135 days or 4 and a half months that you have to fund.

Now imagine you had to fund 135 days in a company that grew at 10% and you had 10% margins, well you would almost never get to do anything but re-invest the profits back into the company, now triple the growth rate to 30% with the same margins, and you will KILL the cashflow unless you can reduce the GAP ...

It's basically where you think you’re making a profit when you’re really not.  You see cashflow is about timing, NOT profitability ...

This week I had another session with business owners where I get people to run the numbers on their business for and hour or so.  We work out your real gross profit, your weekly expenses and the total number of sales you need each day, or week, or even hour to make a profit ...

Learn your numbers or have a look at it next time your meet ... if you need help contact my coaches www.actioncoach.com ...

All the Best ... Brad Sugars