Nigel Mayne, MatchPoint Franchise Consulting Network

We have just released the agenda for the first Annual International Summit, this year taking place in Oxford, England. This is to be the first of many International Summits planned for our rapidly growing international network of franchise consultants. We expect the Summit will be a popular and important annual event offering the best of educational and networking opportunities for both franchisors/sponsors and the MatchPoint team of consultants. The Summit and attendee events have been organized by Victoria Conte, Senior Vice President of Operations of MatchPoint and her team.

The Summit is booked for May 8 through to May 11, at The Oxford Belfry Hotel, Milton Common, Thame, Oxfordshire.  Summit sponsor is Snap Fitness, and sponsors for other events during the three days of speakers, presentations and workshops are Platinum Property Partners, SOPRA Brands, DLA Piper, Tutor Doctor and WSI, Internet Consulting and Education.  Speakers include franchise expert Gary Findley, COO of Snap Fitness, and Phil Zeidman, Senior Partner, DLA Piper, who will be speaking about the legal landscape, both in the U.S. and International.  Day 2 includes a two-part workshop on the highly topical subject of Social Media. In addition to speakers addressing the specifics of building a franchise brand in the United Kingdom and Ireland, there will be special presentations of UK brands and time scheduled for one on one interaction with exhibitors and sponsors.

As well as some fun activities before dinner events, Summit attendees will relax with a range of extracurricular activities including Golf and a onsite Spa, and spouses have a program of a collection of activities to choose from including as the opportunity for sightseeing in and around the Oxford area.

Watch this space for timely reports during the Summit, giving more details on the Speakers and their presentations and the workshops.

MatchPoint Franchise Consulting Network  was born out of a vision shared by a group of leaders within the franchise industry, that there could be a better way of helping individuals find the franchise opportunity of their dreams and a better way of helping franchisors identify efficiently the best potential franchisees. Match Point`s goal is to build the world’s most successful international network of franchise consultants representing the industry’s premier franchise brands, delivering value as a trusted partner to the best franchise brands, and offering high-value services to  prospective franchisee clients.

For the new investor, not having to start a new business from scratch offers significant advantage, both in time taken to earn a return and in initial investment cost.  Marketing costs are expected to be reduced.  Of course it’s in the interest of the franchisor that quality franchisees succeed and the franchisor support offered is a quantifiable attraction.  How does that investor reduce their risks while in the due diligence process?

The relationship of the investor franchisee with the franchisor will and must be ongoing.  As with any contractual arrangements it should go without saying that both parties to the contract must honor it.  Disputes arise in the best of relationships and some may give rise to litigation  initiated by either party on the basis of fraud   Here are five key areas where possibilities for higher risk may exist to destroy the dreams of the franchisee from the commencement of contract.  Some will be familiar to the first time investor as a risk for any entrepreneur; but all warrant that second take.

  1. Make sure to look only at quality franchise offerings.  The new to franchising investor should forget the passion for a particular business and try to be more objective.  Just as too popular franchises will be more expensive, may be subject to passing fads, or have fierce competition alongside the sales territory defined in the proposed contract, there are the few franchisors that are known to someone as ”sharp operators.”   Every franchise offering could have a number of unhappy, unsuccessful franchisees who may claim to be subject to fraud.  Speak to Franchisees.  Is there a pattern to the complaints?  If the complaints make the investor uncomfortable this is an alert to move on to another option. The relationship with the franchisor must be built on trust and respect.
  2. There should be a check whether the franchise principals have any history of litigation.  Disputes over failure to perform can arise from either party’s perspective.  Franchising is a very litigious business and most franchise companies will have some history of legal actions but it’s important to separate fact from fiction (as the internet is filled with both).  Was the franchisor looking to enforce their agreement to protect the brand and the system, or were they taking advantage of the franchisees?  It is important to the franchisee to understand the competition.  The investor`s lawyer may alert the investor to signs of undue competition. But what if the competition represented in various initial discussions about marketing does not in fact exist?  Are there other flags of fraudulent practise of which the investor should be aware?
  3. Franchisees must go in with eyes wide open. Use of detached, competent and professional help to draft the franchisee`s own business plan and research on earnings forecasts is an essential step  as a protection against fraud on the part of the franchisor – especially internationally where FTC type protections are non-existent.  Breakeven analysis and less optimistic scenarios must be included and the investor should not place reliance solely on the information provided by the franchisor, no matter how well known that particular franchise may be.  In lower cost and lesser known franchise offerings, earnings performance may relate to the strengths and skills of the buyer; then again an optimistic earnings scenario provided to the potential investor may also be a flag of fraud.  The investor should prepare a detailed assessment of initial investment costs and compare that with the data which must be requested from the franchisor.
  4. There is a greater risk inherent in considering a start up franchise.  It is in the interest of the inexperienced would be franchisee to choose a business for due diligence with a track record over a minimum of 4 to 5 years, with a minimum number of currently operating franchise units.  Should the support and expert advice of a franchise consultant not be sought out at an early stage, there will be a need for basic legwork such as visiting the head office of the franchisor and viewing the training material for oneself.
  5. To quote an old adage, the devil is in the detail, even before a study of the draft contract is the next step.  Researching important detail early in the due diligence process will make the intended franchisee less concerned about the possibility of fraud.  They should be comfortable with the quality of training and support provided, where it will be provided and for how long.  A promise to send on the material later should be regarded as just that, a promise, and should be made good promptly.  Delays in the provision of any paperwork agreed to be provided should alert the would be investor and their advisors and the franchisor challenged at an early stage in the process.

MatchPoint Franchise Consulting Network was founded in 2006 with a mission of building the world’s most successful international network of franchise consultants representing the industry’s premier franchise brands.  We achieve this through delivering value as a trusted partner to the best franchise brands, and offering high-value services to our prospective franchisee clients.

The advice offered freely to franchise buyers by MatchPoint consultants is vital to the buyer in making a better, prudent, buying decision.  The advice offered by our consultants does not make us lawyers; it is there to help the investor with a high quality due diligence process.  It is an effective hedge against misrepresentation and fraud sometimes propagated by less than reputable business opportunity marketers.

Starting up in your own business or expanding a home based activity into a reliable and satisfactory income stream is a challenge made tougher by the wide range of opportunities you will find.  Maybe you have already searched the internet for small business opportunities?  Of the many which grab your attention. which ones match your skill set and which are the ones to walk away from for a number of reasons not overlooking the risk of fraud?

Franchises attract many new investors because the business is established and proven, the learning curve for the entrepreneur is minimised and the franchisor resources that come with the package get you off the ground faster.

In your initial search on the Internet you will encounter many leads for a franchise investment, an overwhelming number depending on which country you are focussing your effort.  In the Annual Franchise Development Report produced by a US  media group, the internet is the top sales producer, with an increasing amount being spent on advertising franchises using social networking sites.

The franchise business model is now well established in North America (the USA and Canada), growing fast in the UK, Ireland and Australia in more recent years and now known in many European and South American countries, all with various forms and levels of legislative and administrative controls to protect the buyer/investor from the various possible risks encountered in all business models, including commercial fraud.

Determining what you can afford to lose, some cynics say, will provide you with the short list of potential franchise opportunities.  The well meant advice relates to the hard fact that in the US nearly 90% of all new businesses fail within 3 to 5 years.  The US Dept of Commerce studies show that, on the contrary, over 90% of new franchised businesses are in operation after more than 5 years.

Counter the risks of  newbie small business investment with the protections against fraud offered by the franchise model

I founded MatchPoint Franchise Consulting Network in 2006 with a mission of helping companies expand their franchise networks and improve their system profitability.  Its mission included improving the quality of new Franchisees coming into a system.

Advice is offered freely to franchise buyers on the web site and by MatchPoint consultants in the field and is vital to you for a better, prudent, buying decision.  The advice offered by our consultants does not make us lawyers; it is there to help you, with a high quality due diligence process.  It is an effective hedge against misrepresentation and fraud sometimes propagated by less than reputable business opportunity marketers.

MatchPoint consultants trained by Nigel Mayne know the red flags of fraud in the investment field.  It takes the very few promoters that practice business fraud to taint the dream of an individual and their family.

That`s where seeking the independent advice of an expert franchising consultant is wise and invaluable from the start of your due diligence process.

For a number of reasons, you are looking for an investment opportunity to add to your income as opposed to relying on one income stream from a salaried job.   You know you will likely have to borrow to finance not only start up and initial fees costs, but also to cover working capital requirements for some time.  You know you want a proven business. Friends have encouraged you to look at network marketing options, and the very strong brand  of a successful franchise system is attractive to you.  How do you steer clear of the unethical practises, moral traps, get rich quick scams and other fraud practised by a few bad apples in any business?

Multi-level marketing, or MLM, is a system of retailing by independent distributors, often in consumers’ homes, and your compensation is a percentage of the sales made by your sales force.  There is often less required for the start up investment, but you have to learn to manage a large network of wholesalers from scratch and develop your own strategy.

MLM carries the taint of being a front for pyramid schemes, illegal scams, and other fraud.  MLM is a legitimate business in the US   but there are a few illegitimate, fraudulent schemes and variations that collapse and leave all suffering, such as a Ponzi scheme- remember Bernie Madoff?   Beware if your first meetings focus more on requirements to purchase high cost inventories and  on recruiting other investors than on the product or service to be sold.

What should you know before taking the decision to look for a franchise that is the best fit for you?

  • Be very comfortable that the model suits you.
  • Successful franchises are run rigorously.  You run your business with the support of the franchisor.  Your franchisor wants your success. They have the map, the tried and true plan, the “how to” manuals, the expert trainers, the savvy and focussed marketing teams.  You concentrate on operations.  Your focus is clear, so well defined.
  • The MLM company will encourage you to find, manage and motivate and pay your own sales force.
  • With a franchise model you abide by the contract with your business partner, the franchisor.

The network marketing model allows you to be more entrepreneurial, more creative which isn’t always a good thing – especially if a proven business plan is the better alternative.

You know enough to understand either of these options won`t get you rich quickly, and there is going to be up to 5 years real and at times scary commitment of capital, energy, time and focus before you can pause and say you have successfully built your business.

There is less risk with the small business franchise model and the rigorously defined focus of the proven franchise success

Whichever you choose, you are going to focus, focus, and focus on the product or service you are marketing.  Your success in business will depend on how much product or service you sell, and how efficiently.  Decide on the business option that best suits you and avoid wasting your time on offers that carry even the faintest taint of con schemes and fraud.

I founded MatchPoint Franchise Consulting Network in 2006 with a mission of helping companies expand their franchise networks and improve their system profitability.  Its mission included improving the quality of new Franchisees coming into a system.

Advice is offered freely to franchise buyers on the web site and by MatchPoint consultants in the field and is vital to you for a better, prudent, buying decision.  The advice offered by our consultants does not make us lawyers; it is there to help you, with a high quality due diligence process.  It is an effective hedge against misrepresentation and fraud sometimes propagated by less than reputable business opportunity marketers.

MatchPoint consultants trained by Nigel Mayne know the red flags in the investment field.  It takes the very few promoters that practice business fraud to taint the dream of an individual and their family.

That`s where seeking the independent advice of an expert franchising consultant is wise and invaluable from the start of your due diligence process.

In recent trips to Europe, the Middle East, Asia and Mexico during 2010 as part of our international initiative to expand our consulting services into these “future-growth” markets, we confirmed the growing acceptance of the franchise model in many countries as an exciting opportunity for small business investors.  Yes, there is perceived risk, but it is a well controlled risk.

There are several European countries,  such as Spain, France, Belgium and Italy, with strong franchise disclosure laws, as well as several in the expected high-growth international markets with a mix of franchise laws and ”good faith”  laws to enforce fair dealing , including in the pre-contractual due diligence and negotiating period.

The areas of concern for you, the intended franchisee, over and above those of any proposed business investment, may range from issues relating to the termination of the franchise to intellectual property matters, general contract disputes, misrepresentation and fraud.  The franchise documents themselves can be intimidating in size, as the franchisor would not want to be penalized for perceived inaccuracies resulting from abbreviation.

Currently, there are over 3,500 franchising opportunities in the U.S., an estimated 1,000 each in  the UK, Mexican and Brazilian markets, and twice that in the Euro Zone – that`s an enormous pool of opportunities for you to sift through to narrow down leads.

This may be the one of the largest financial investments of your life.  Which is why it makes good sense to call on the expertise of a franchise consultant or franchise broker, who’s services are paid for by the franchisor, to help weed out the more problematic leads and match you and your goals with the best fit franchise. .

I founded MatchPoint Franchise Consulting Network in 2006 with a mission of helping companies expand their franchise networks and improve their system profitability.  That mission also included improving the quality of new Franchisees coming into the system.

Advice is offered freely to franchise buyers on our website and by MatchPoint consultants in the field and is vital to you in making a better, prudent, buying decision.  The advice offered by our consultants does not make us lawyers; it is there to help you with a high quality due diligence process.  It is an effective hedge against the misrepresentation and fraud sometimes propagated by less than reputable business opportunity marketers in all business models.

MatchPoint consultants trained by Nigel Mayne know the red flags in the investment field.  It takes the very few promoters that practice business fraud to taint the dream of an individual and their family.

That`s why seeking the independent advice of an expert franchising consultant is wise and invaluable from the start of your due diligence process.

Taking on a small business franchise as the recession eases may be less of a risk than you think.  It is certainly easier in a recession to find the better performers and the strong brands, as well as a product or service with a demand that is still growing and will outlast your long-term exit strategy.

The franchise business model can get you established and profitable in a shorter time than other small business ownership options and industry experience is not a requirement. Other benefits of the franchise business model are that the franchisee has the proven marketing and support systems of the franchisor and the contractual process allows for a level of transparency that minimizes the risk of business failure for many of the same reasons that other small business ventures may fail.

There are many traps for the unwary new investor—insufficient startup capital, a lack of general business acumen, not understanding the level of commitment required and its effect on family life, and a failure to be alert to promoters practicing various forms of commercial fraud.

Is a franchise business opportunity right for you?  If you can share the passion for the brand with the franchisor, understand the need to build a team following the proven system and procedures and focus on building sales in your territory, then success is likely to be mutual.  An honest self-evaluation of your potential business skills should come hand in hand with your evaluation of franchise leads.  Most franchise companies now have systems to assess the potential, qualified franchisee.  They are looking for the best fit just as you are. The franchisor wants to ensure that you are financially sound and highly motivated, with both leadership and management skills. Also, your background, work ethic and personality are all attributes important to the franchisor.  This initial period of mutual assessment is vital to both parties.

MatchPoint Franchise Consulting Network was founded in 2006 with a mission of helping companies expand their franchise networks and improve their systems.  The advice offered freely to franchise buyers by MatchPoint consultants is vital to the buyer in making a better, more prudent, buying decision.  The advice offered by our consultants does not make us lawyers; it is there to help the investor with a high quality due diligence process.  It is an effective hedge against the misrepresentation and fraud sometimes propagated by less than reputable business opportunity marketers.

MatchPoint consultants trained by Nigel Mayne know the red flags of fraud in the investment field.  It takes the very few promoters that practice business fraud to taint the dream of an investor and their family.

That`s where seeking the independent advice of an expert franchising consultant is prudent and invaluable.

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It’s never a bad time to launch your own business.  While a start-up venture in a booming economy seems destined for success, the smart selection of the right franchise opportunity can lead to success whether times are good or bad!

The franchise business model comes with a level of transparency and offers standards and support for franchisors that increase the chances of success when compared with other small business opportunities or multi level marketing schemes, which are often fraught with potential misrepresentations and fraud.  Whether you are targeting strong international or local franchise brands, your initial research should be broad, leaving the narrowing down to the industry and location for your business for later

Effective franchisors promote their franchises to qualified investors in a number of ways, including trade shows, franchise shows, trade missions, the internet, targeted public relations, print advertising and the use of franchise consultants or brokers.  The draw back to the do-it-yourself approach to narrowing down your best fit is the amount of time you’ll need.  And even choosing a well-known brand franchise does not guarantee business success.

Location is key in establishing a small business. Never skimp on a prime location as even the most viable franchise may still fail if it is off the path of the buying public.

In a country such as Mexico where the franchise business model is new and the number of franchises as a percentage of other small business is in strong growth stage yet well supported at government level, the level of competition must still be researched.  It is always important to take into consideration the proximity of competing business in the surrounding area.  If the market is already saturated with like business, then either consider locating to another area or choose a franchise in another industry entirely.

Also, never underestimate the importance of promoting your business locally. Don`t assume that the brand recognition coming with the franchise is enough.  Even though your franchisor may offer you the chance to buy into a marketing campaign, you should always ensure there are funds to promote to your local buyers.  The most effective way for new investors to ensure they find the perfect fit franchise is by using a broker who specializes in franchise matchmaking in your region.  Brokers’ fees and commissions are paid by the franchisor, who relies upon the consultant to bring forward the qualified or serious franchisee buyer with financing ability.

MatchPoint Franchise Consulting Network was founded in 2006 with a mission of helping companies expand their franchise networks and improve their system   The advice offered freely to franchise buyers by MatchPoint consultants is vital to the buyer in making a better, prudent, buying decision.  The advice offered by our consultants does not make us lawyers; it is there to help the investor with a high quality due diligence process.

MatchPoint consultants trained by Nigel Mayne know the red flags in the investment field.  A fraudulent business deal can taint the dream of the investor and their family, making the independent advice of an expert franchising consultant invaluable

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