12 | Business World Magazine |
February 2014
Similarly, brands like FirstLight HomeC-
are andMarco’s Pizza have added staff specif-
ically to help franchise candidates navigate
the lending waters.
“I have one person on the staff whose sole
job is helping franchisees obtain financing.
In a fast-growth environment like we’re in,
we need to do everything we can to help that
process along,” said Ken Switzer, vice presi-
dent and CFO of Marco’s.
It’s worth noting that brands with higher
satisfaction and a strong history of perfor-
mance have a much easier time getting fi-
nancing for prospective franchisees.
Numerous brands say 2013 was their best
year ever – for franchise development, prof-
itability and franchisee performance. Brands
like Men in Kilts and Our Town America
have aggressively focused on franchise sales
in the past year, and franchisees, more than
ever, are looking to grow their existing busi-
nesses or expand into other territories.
This renewed focus on growth by the
franchisor can impact the franchisee both
positively and negatively, depending on
the brand, and it’s something prospective
franchisees should consider in their due
diligence. Is the franchise focused on smart
growth or just fast growth? How will the
brand’s growth aspirations affect its culture,
franchisee community, fees, and royalties?
Is the parent company reinvesting some of
its profits back into the business e.g., ramp-
ing up operations and field support as they
grow?
Along with the increased focus on
growth, franchisors have increased their
emphasis on marketing and advertising to
consumers. Some brands that slowed down
their advertising to reduce their franchisees’
EXECUTIVE
SUMMARY
