JUN. 07, 2010 08:00:00 AM | BY DARRELL JOHNSON
Each year franchising needs debt capital in excess of $10 billion to fund more than 30,000 new units and transfers of existing units. That's a lot of money, and the lending community doesn't seem that likely to meet the demand--even though collectively there's ample lending capital available. It's clear that access to capital will be an issue for the franchise community for the next few years at the very least.
MAR. 08, 2010 08:00:00 AM | BY DARRELL JOHNSON
Access to capital is the number-one issue facing franchising in 2010. This isn't just an issue for new unit development--it is every bit as much of an issue for transfers. In both situations, franchisors have a large vested interest in ensuring that capital is there when a franchisee needs it.
NOV. 16, 2009 10:00:00 AM | BY DARRELL JOHNSON
When the economy turns downward it's harder for most franchisors and franchisees to increase revenues. The cost to achieve an incremental dollar of revenue is higher in a down economy, which means that less of each new dollar reaches the bottom line. Not surprisingly in this environment, companies turn to the expense side of their income statement, where every dollar of expense reduction falls almost fully to the bottom line. It's a simple business strategy: if you can't increase revenues, reduce expenses.
SEP. 21, 2009 08:00:00 AM | BY DARRELL JOHNSON
Occasionally, it's good to confirm the obvious. What attracts prospective franchisees to a particular brand is a combination of expectations and emotions. While this is generally understood, we were able to use personal interviews at the March 2009 International Franchise Expo to delve into this topic further. We are grateful to the Expo sponsor, MFV, for allowing us to do this work.
AUG. 10, 2009 08:00:00 AM | BY DARRELL JOHNSON
I made a presentation to a national law firm's franchise practice group a few years ago with the title, "You Won't Believe What You Can Learn From a UFOC." The presentation was made to people who were responsible for putting UFOCs (now FDDs) together. They were surprised to learn all the things that could be analyzed and extracted from the documents they prepared.
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