Franchising isn't just true entrepreneurship; it offers a unique route to rapid, large-scale wealth creation. Over 1,000,000 potential entrepreneurs investigate franchising every year, but this enormous business opportunity remains hugely misunderstood. Now, a truly extraordinary authoring team delivers realistic, start-to-finish guidance for franchisees and franchisors alike.



This book brings together the insights of the entrepreneur who built the world's largest system of Jiffy Lube franchises, the CEO who grew Dunkin' Donuts from 300 units to over 3,000, and the franchising expert and former director of the world's #1 bank lender to franchisees.



Drawing on their immense personal experience, the authors provide detailed analytical tools for assessing any franchise opportunity, then illuminate every aspect of the business from both franchisor and franchisee perspectives.



They cover franchise relationship models and service/product delivery systems; financial and transaction analysis; legal issues; dynamics of the franchise relationship; going international; distributorships; licensing; and even cashing out.

* Why franchising offers immense wealth creation potential

* Assessing the possibilities--for both franchisors and franchisees

* Exploiting the franchising opportunity

* Proven analytical tools and a real plan for action

* Building and evaluating the service/product delivery system

* The real nuts and bolts: offerings, markets, real estate, control, marketing, and more

* Building better franchisor/franchisee relationships

* The dynamics of the franchise relationship

* Franchising and the law

* What both parties need to know

* Cashing out

* The "harvest" strategy--from insider's who've been there



Exploit franchising for maximum wealth creation

* The definitive insider's guide for franchisors, franchisees, and investors

* By experts who've made fortunes in franchising at Jiffy Lube and Dunkin' Donuts

* Demystifies franchising with detailed case studies and examples

* Covers the entire business lifecycle, from identifying opportunities to cashing out

* Crucial insights for building--and evaluating--product/service delivery systems



No other book brings together an author team with this much practical insider's expertise on using franchising to generate wealth. Sum Stephen Spinelli, Jr., who helped build the world's largest system of Jiffy Lube franchisesSum Robert M. Rosenberg, who grew Dunkin' Donuts from 300 units to over 3,000Sum Sue Birley, former director at the world's #1 franchisee bank lender



This is franchising from the inside. Franchising done right. Franchising as true entrepreneurship--for people ready to think big, work hard, and generate real wealth





Table of Contents



Introduction

Chapter 1 Franchising as Entrepreneurship

Franchising

What It Means to Be Entrepreneurial Franchising: Small and Big Business

Modeling Entrepreneurship

Opportunity Recognition: Market Structure and Competition

Opportunity Recognition: Market Size

Opportunity Recognition: Margin Analysis

Resource Marshaling: The Establishment of the Service

Delivery System (SDS)

The Entrepreneurial Team

Conclusion

Endnotes



Chapter 2 The Franchise Relationship Model

The Customer: How Does Opportunity Recognition

Work in Franchising?

Establishing the Service Delivery System (SDS):

How Does the FRM Provide a Framework

for Marshaling Resources?

Transaction Analysis: In the Franchise Relationship,

How Are Responsibilities of the Franchisor

and Franchisee Allocated?

Financial Structure: What Is the Financial Model

of the Franchise Concept?

Agency Issues: How to Find the Right Franchise Partner

Relational Dynamics: How Are Tasks Best Monitored?

Information Systems

The Dynamics of the Franchisee-Franchisor Relationship:

How Does the Franchise Entrepreneurial Alliance Adjust

for Changes in the Market?

Conclusion

Endnotes



Chapter 3 The Wealth-Creating Power of Franchising

Understanding the Motivations of an Entrepreneur to Become

a Franchisor

Franchise Risk Profile Template:An Introduction Agency Problems and

Administrative Efficiency

Buy a franchise, or launch a standalone?

How Do Franchisors Determine the Amount of Franchisee

Fees and Royalties?

Size and Risk Management

Balancing Company and Franchised Outlets

Resource Constraints

Franchise Disclosure: An Insight Individual Franchisor

License Agreement: How the Franchise Shares

Responsibilities and Wealth

Key Factors inthe Franchise Relationship

Public Capitalization: An Expanded View ofthe Franchise

Company

Conclusion

Endnotes



Chapter 4 Service Delivery System and Real Estate

The Basics of Estate

Platform for Se rice Delivery System and Influence of

Purchase Behavro Quick Screen

How to Select Real Estate. .

How to Value Real Estate

The X factors of Site Selection

Construction

Financing Alternatives

Leasing Issues and Potential Traps

Advantages of Real Estate Ownership

Lowering the Cost of Capital

Allocating Risk

Conclusion

Endnotes



Chapter 5 Selecting and Monitoring Franchisees

Selection and Monitoring: Franchising's Dual Challenge

The Tolerance Zone

Monitoring and Controlling Execution of the SDS

Monitoring Methods

Monitoring and Controlling Financial Reporting

Creating a Feedback Loop

Conclusion

Endnotes



Chapter 6 The Service Delivery System and Marketing

Why is Marketing Important in a Franchise?

What are the Forms of Marketing in Franchising?

Local Marketing

Regional Advertising National Advertising

Supplier Cooperative Advertising Production of Marketing Materials

An Overview of Marketing and the License Agreement

Potential Marketing Problems

Marketing and the Free Riding Risk

Conclusion

Endnotes



Chapter 7 Transaction Analysis

Using Transaction Analysis to Improve the Service Delivery

System

Support Systems and the Franchisor-Franchisee Relationship

Introduction to Case Study: Bagelz

Summation of Case Analysis: Bagelz and Transaction

Analysis



Chapter 8 Financial Analysis

Focusing on the Key Transactions

Return on Investment

PR Restaurants, LLC

Endnotes



Chapter 9 The Dynamics of the Franchisee- Franchisor

Relationship

Wealth Creation Communication

Value of Trademark or Brand

Exit Costs

Introduction to Case Study: Quick Lube Franchisee

Company (QLFC)



Chapter 10 Understanding the Basics of U.S. Franchise Laws

Recent Key Trends in U.S. Franchising



Chapter 11 International Franchising

Franchising in a Foreign Country from a U.S. Base

Conclusion



Chapter 12 Harvest

Harvest Options

The Initial Public Offering

A Trade Sale or Merger with Another Company:

A Franchisor's View

Increasing the Free Cash Flow

Management Buyout

Employee Stock Ownership Plan (ESOP)

Your Harvest Strategy and Valuation of the Franchise

Conclusion



About the Author



Stephen Spinelli, Jr. co-founded Jiffy Lube International, the franchise that revolutionized automotive quick service. He then purchased two Jiffy Lube franchises and grew to become Jiffy Lube's largest franchisee, with 47 stores that posted 39 consecutive profitable quarters. He later served as national leader, founder, chairman, and CEO of America Oil Change Corporation. At Babson College, he currently serves as Assistant Professor in Entrepreneurial Studies, Chairman of the Entrepreneurship Division, and Director of both the Arthur M. Blank Center for Entrepreneurship and the Franchise Institute.



Robert M. Rosenberg, CEO of Dunkin' Donuts for 35 years, led the firm's growth from 300 units to over 3,000. He currently serves on the Board of Directors of Sonic, America's Drive-In. He is a member of the International Franchise Association's Hall of Fame.



Sue Birley is an acclaimed scholar of entrepreneurship and a former director at National Westminster Bank, the world's largest franchise lender. With Stephen Spinelli, Jr., she co-authored Franchising Your Way to Riches: An Analysis of Value Creation in Public Franchisors.