Latest news with #franchisors
Entrepreneur
5 days ago
- Business
- Entrepreneur
3 Traits You Need to Succeed as a Franchisor
Have what it takes to lead and own a franchise? We asked top franchisors what they're doing to stay on top — and the traits they say helped them succeed. This story appears in the July 2025 issue of Entrepreneur. Subscribe » Franchise leaders know what it takes to build something that lasts. So we asked some of the top names in the industry to share the traits they believe separate good franchisors from great ones. Whether you already own a franchise or are thinking about getting involved, use this list to reflect on your own approach and find areas to grow. We also asked what they're doing to keep their brands ahead of the curve. Check out their answers below. Related: Why Do Some Franchisees Crush It and Others Fail? It Comes Down to This Formula. We Asked Franchisors What qualities do you think set the best franchisors apart? "They're visionaries, with a game plan. They know how to build a brand that's not just a business, but a movement, and are set apart by their dedication to transparency, consistency, and culture. They give their franchisees the tools, the playbook, and the freedom to win, without losing the essence of what makes the brand great." — Adam Sartin, vice president of franchise growth and development, Motto Mortgage "Good franchisors listen to their owners. Great franchisors create advisory councils and have a feedback loop that allows franchisees to share what is working and opportunities for improvement. The best of the best aggregate mistakes and create open channels for the sharing of best practices among franchisees." — Eric Martin, senior vice president of franchise development, Lawn Doctor "The best franchisors have an entrepreneurial mindset. They approach the business with a creative and innovative spirit, always looking for new opportunities and ways to grow and evolve. An entrepreneurial franchisor is willing to take calculated risks, adapt to changes in the market, and be proactive in driving the success of their franchise network." —Doug Dickison, founder and chairman, Destination Athlete Related: 4 Reasons Why Local Entrepreneurship Is the Secret Weapon of Great Franchises What is your company doing to stay at the top of your industry? "We've found the perfect sweet spot by cobranding Great American Cookies with our sister brand, Marble Slab Creamery. Since launching this concept in 2014, we've grown to over 170 cobranded locations worldwide, with franchisees seeing a 10% to 20% lift in incremental sales." — Allison Lauenstein, president, Great American Cookies "We stay ahead by continuously investing in technology, enhancing customer experience, and listening closely to our franchise owners. Our focus on operational excellence, brand consistency, and local community engagement helps drive both customer loyalty and raving fans." — Adam Biedenbender, vice president of franchise development, CertaPro Painters "We've focused on delivering a personalized, world-class customer service model that is resilient during uncertain times. And we continue to grow and outperform market conditions by relentlessly listening to our franchisees and customers and pursuing opportunities that earn our customers' loyalty." — Steve Chambers, vice president, retail and business development, The UPS Store Join top CEOs, founders and operators at the Level Up conference to unlock strategies for scaling your business, boosting revenue and building sustainable success.
Entrepreneur
04-08-2025
- Business
- Entrepreneur
Is Franchising Right for You? Here's How to Find Out.
Franchising can be an incredible journey, but you must look closely at these three areas before you buy. This story appears in the July 2025 issue of Entrepreneur. Subscribe » People often ask me the same question: "How do I know if franchising is the right decision for me?" As the leader of the International Franchise Association (IFA), I know some things to be true: Franchising is an incredibly powerful business model. It has opened the door for hundreds of thousands of entrepreneurs as well as millions of employees. And according to IFA members, despite recent macroeconomic challenges, franchisors are seeing more interest from potential franchisees than last year. But that doesn't mean franchising is right for everyone, or that every brand is right for you. So here's what I (and the IFA) always tell people, whenever they ask if they should buy a franchise. Related: The Pros and Cons of Franchising Your Business Your north star must be conducting due diligence in the presale process. Gather as many data points as you can to make the most informed decision before investing — and once you're looking at a brand, focus on these three areas: 1. Understand the brand. Compare offerings across multiple franchise brands to ensure that the brand is the right fit for your values and interests. This should involve a thorough review of the Franchise Disclosure Document (FDD), as well as a complete understanding of the financial obligations on franchisees — not just initial costs, but ongoing cost requirements and fees, such as marketing, technology, and remodels, and how they may change over time. When franchisees are dissatisfied with their investment, it is often because they did not fully understand the amount and timing of these costs. Any prospective franchisees should also consult with a franchise attorney — a professional who focuses on franchise agreements (which is different from your franchise broker, personal accountant, or attorney). While the FDD contains 23 pieces of critical information, it is an unwieldy and dense document not readily digestible to newcomers. 2. Talk to franchisees. It's important to talk with franchisors, but remember: They're incentivized to present their brand in the best light. A brand's franchisees might speak differently. They'll often give you unfiltered, real-world insights into factors like day-to-day operations, training, how long it took to become profitable, system changes implemented, and whether they would make the same decision again. That's why you should speak to as many franchisees as possible. Also, ask to speak to the leadership of the brand's franchise advisory council and independent franchisee association. Related: 5 Must-Do Steps to Evaluate Franchise Opportunities Like a Pro 3. Embrace the risk. Franchising is an established pathway to business ownership, but success in business is never guaranteed. More importantly, not all franchise brands are created equal. For example, many franchise brands are very new. It might be exciting to join them, but they can also be riskier, particularly if they're undercapitalized or have inexperienced leadership. Industry research by FranConnect suggests that many early-stage franchise brands will never make it past 27 locations. That's why it's critical to understand the many factors that impact whether franchise brands continue to grow — including consumer demand, market conditions, competition, unit economics of the franchised businesses, brand leadership's experience in franchising, access to capital, and regulatory changes, among others. Related: The Basics of Making Money in Franchising Ask yourself if your lifestyle and personality are compatible with handling the ups and downs of small business ownership. Are you prepared to run your own business, build a team of employees, and navigate relationships with suppliers, landlords, and lenders? Are you committed to serving your customers to the fullest — in accordance with the standards established by the franchisor — to protect the equity in your own franchised business, and also that of other franchisees, your employees, and your customers? To make a franchise succeed, everyone involved must work together. That's why, ultimately, the question is yours to answer: Once you know all this, is franchising right for you? Join top CEOs, founders and operators at the Level Up conference to unlock strategies for scaling your business, boosting revenue and building sustainable success.
Entrepreneur
28-05-2025
- Business
- Entrepreneur
These SBA Franchise Rules Are Changing in 2025
The Small Business Administration (SBA), which provides approximately $5.6 billion per year in franchise loans, has reinstated key oversight mechanisms — including the Franchise Directory — and made updates to its standard operating procedures (SOP) for franchise lending. These changes aim to reduce risk, clarify eligibility and tighten credit standards, but franchisors must act quickly to avoid serious consequences for their businesses. Here's what you need to know. Related: Considering franchise ownership? Get started now to find your personalized list of franchises that match your lifestyle, interests and budget. The Franchise Directory is back after a 2023 phase-out Franchisors, take note: Beginning on August 1, 2025, your brand must be listed in the SBA Franchise Directory for your franchisees to qualify for SBA-backed loans. The Franchise Directory is the official list the SBA uses to determine if a franchise brand meets the agency's eligibility criteria. Sound familiar? That's because this used to be the rule until the SBA phased out the directory in 2023 as part of a short-lived policy shift that gave lenders more discretion in assessing eligibility. However, after a rise in defaults and documentation issues, the SBA has reversed course. There's no cost for franchisors to be listed in the directory, but there is a clear process: Brands must submit their franchise disclosure document (FDD), franchise agreement and a signed SBA franchisor certification. Those who don't meet the deadline will be removed from the directory and will have to reapply before their franchisees can move forward with SBA financing. Bottom line: If your brand is not listed in the directory, your franchisees can't get SBA funding. Related: How a Police Officer Started a Pet Care Business Making $3 Million a Year There will be stricter lender oversight A significant shift in the SBA's new standard operating procedures (SOPs) is who holds the responsibility for verifying franchise eligibility for SBA loans. In the past, preferred lenders (PLPs) — banks and institutions authorized to approve SBA loans on the government's behalf — could rely on the SBA to validate if a franchise met eligibility standards. But that's not the case anymore. Under the new SOPs, the lenders need to independently verify if the brand is listed in the Franchise Directory and ensure all required documentation meets SBA expectations. This change intends to reduce the risk of improper loan guarantees, but it also introduces more complexity for lenders and franchisors alike. For franchisors, the takeaway is simple: Encourage franchisees to work with lenders that have experience in franchise lending, and ensure all documentation is airtight. A knowledgeable lender can help streamline the process, but even the best will still be navigating a stricter lending environment moving forward. Related: I'm CEO of an International Commercial Cleaning Franchise. Here's How I've Turned My Failures Into Fuel for Success. Brands must submit a new document If your franchise was previously listed in the SBA Franchise Directory, you're not automatically in the clear. To stay on the directory past July 31, 2025, franchisors must sign and submit a new document called the Franchisor Certification. The form includes seven key compliance conditions that the franchisor must agree to uphold across all franchise agreements, regardless of whether those provisions are explicitly included in the agreement itself. In other words, signing the certification is a legal commitment that your brand will operate in line with SBA lending requirements. That includes demonstrating active ownership, clear operational oversight and other elements designed to reduce risk and clarify responsibility. Franchisors that fail to submit the signed certification by the July 31 deadline will be removed from the SBA Franchise Directory. Once removed, the brand becomes ineligible for SBA-backed loans until it reapplies and is reinstated. To avoid bottlenecks, franchisors should send the completed certification and all supporting documents directly to the SBA as soon as possible. Related: This College Student Pitched His Parents a Business Idea. Now, He Runs a $7 Million Ice Cream Brand. Higher standards for business loans The SBA has tightened its standards on which business models qualify for loans. For example, ghost kitchens, salon suites and shared office spaces are now ineligible unless they meet narrow criteria around revenue sources, customer access and operational control. Brands that generate income primarily from rent or don't maintain meaningful oversight of daily operations are at higher risk of being rejected for funding. Meanwhile, personal service franchises — like barber shops, salons and nail studios — remain eligible, even if they use independent contractors. On the financing side, startups and full ownership transfers now require a 10% cash investment, and lenders must now document why a borrower can't qualify for a conventional loan — often due to limited collateral, a new business model or the need for extended repayment terms. These changes intend to reduce defaults and strengthen the loan process, but they also raise the bar for compliance. What franchisors should do now With SBA-backed financing playing such a critical role in launching and expanding franchise businesses, franchisors need to get ahead of these regulatory changes. That means submitting the required documentation on time, maintaining compliance with the new lending standards and working closely with lenders that understand the nuances of franchise financing. With these changes, the SBA's message is clear: It supports franchising, but it's raising expectations to ensure a stronger, more resilient lending environment. Franchisors that act now will be positioned to help their franchisees access the capital they need to grow. Related: How the IFA Plans to Strengthen the $800 Billion Franchise Industry in 2025
Forbes
21-05-2025
- Business
- Forbes
The Strength Of Small Business In A Shifting Economy
Welcome Sign Small businesses are the engine of the American economy. They are often the first to innovate, the fastest to adapt, and the most determined to persevere through change. In moments of uncertainty, they continue to move forward not because conditions are perfect, but because resilience is embedded in their DNA. According to BoeFly's April 2025 Franchise Growth Confidence Index,72.7 percent of franchisors remain confident in achieving their 2025 growth goals. That level of confidence in nearly three out of four leaders is significant considering the broader economic narrative around inflation, tariffs and ongoing interest rate uncertainty. Additionally, 65.2 percent expect the volume of new franchisees to increase or remain steady and nearly 57 percent of brands expect to exceed their 2024 expansion plans. This is more than optimism. It reflects an evolving business environment where capital is readily available, demand remains strong, and entrepreneurs are actively looking for smart, strategic ways to enter or grow in the market. Franchising stands out as a clear path for many of them. We are also seeing this energy play out across our markets. From new storefronts opening in downtown corridors to longtime clients expanding into new territories, the appetite for growth remains real. Entrepreneurs are not shying away from opportunity; they're actively pursuing it with strategic focus and urgency. And in many cases, they're doing so with support from trusted partners who understand their goals and their challenges. Entrepreneurs Move While Others Pause Entrepreneurs often thrive not because they predict the future but because they refuse to pause. If you wait for the perfect moment, you'll never act. Many of the best businesses are started when others are standing still. When we announced the merger with First National Bank of Long Island last fall there were those who questioned the timing. We picked a spot on the map and kept moving toward it. That's what entrepreneurs do. They adapt. They problem solve. They build anyway. __ I am often asked questions such as, "Is now a good time to start a business, buy a house or expand operations.' My answer was simple, if you have a vision, capital and a sound plan then yes, it is the right time. Waiting for the most perfect conditions often means missing your moment altogether. The truth is that entrepreneurs do not move with the markets they move with intention and purpose. And in an economy as dynamic and resilient as ours those who act now will likely be the ones shaping what comes next. At times like these, having the right financial partner is critical. Banks that serve as advisors and not just lenders can make a significant difference in helping entrepreneurs move forward with clarity and confidence. Whether it's navigating lending, evaluating business plans, or identifying funding strategies, having a collaborative banking relationship is essential. So, whether you are expanding a current venture, exploring a franchise opportunity or launching something new remember that there is strength in continuing to build, especially when others are standing still.
Entrepreneur
12-05-2025
- Business
- Entrepreneur
The Costly Mistake Franchise Recruiters Need to Avoid
Opinions expressed by Entrepreneur contributors are their own. While it's widely accepted that there are as many as 4,000 different franchise concepts in the U.S. today. That means the quest to find quality candidates is becoming an ever-increasing, hyper-competitive fight. And let's be honest, while almost every franchisor in every industry claims to focus on finding quality candidates, the majority of them are more than content to chase volume in the relentless effort to promote brand growth at the unit level. The reality is, chasing high volume over ideal candidates almost always leads to wasted effort that could have been directed elsewhere. Then there's the vaunted evaluation process to consider. Franchisors never seem to tire of promoting their strong vetting process, but privately, many would agree their effort could use some improvement. In reality, franchisors in the trenches today could greatly benefit by ditching the idea of focusing on volume over substance. Let's investigate the many ways brands can improve lead generation by focusing on quality over quantity. Related: Considering franchise ownership? Get started now to find your personalized list of franchises that match your lifestyle, interests and budget. The downside of chasing volume Wasting time and effort aren't the only downsides of chasing quality over quantity. Franchisors also risk losing capital, energy and burning out their teams by sending them on wild goose chases that don't consistently produce real, bottom-line results. This puts undue pressure on sales and development teams, be they internal or external. Then there's the fallout from high volume candidates who somehow manage to make it through the process and are awarded a franchise. When some of these less than ideal franchisees inevitably fail because they weren't the right fit to begin with, this can dilute your brand integrity and subject you to long-term operational — and reputational — damage. Related: Why Your Franchise Leads Are Ghosting You — And How to Win Them Back Finding the perfect fit If franchisors truly want to redefine their effort to find quality candidates that match up well with their core values, mission and brand profile, it may be time to return to the proverbial drawing board. This is especially true if the brand has recently onboarded several inadequate franchisees in succession. While some brands have the means to spend significant capital to determine their ideal persona, you can refine your own candidate profile by retooling your messaging and outreach strategies. Other worthwhile ideas include: Investing in new content that's designed to educate, as well as persuade Go big picture - think beyond the next sale and consider the next dozen sales Use data to your advantage to track lead sources – where are the quality candidates coming from? candidates coming from? Implement tighter qualification tools capable of separating ideal candidates from tire-kickers Explore and invest in how AI can do a lot of this groundwork for you Related: The Franchise Candidate You Should Think Twice About — And Why Can you strike a balance? The conventional thinking here is yes, but only if quality outranks quantity in your efforts. If you're the director of franchise development for an emerging brand, what would you rather have on your radar at the moment — 100 leads to chase, or 10 truly qualified candidates? Yes, it will take time to reevaluate your targeting, filtering mechanisms and procedures. But by doing so, you can eventually scale your screening efforts without sacrificing lead integrity. Here's a caveat to consider – does having more leads always result in closing more deals? If the answer is no, it's time for your brand to redefine the type of candidate you don't want with as much fervor as you put into finding your preferred franchisee. And whatever your sales and development program looks like, it's always advisable to build strong partnerships with platforms and brokers who fully understand your brand's value proposition and key differentiators. If you can put the same effort and focus in building your credibility as you do searching for quality prospects, you'll be surprised how often the right candidates will eventually find you. Because the ideal franchisees you hope to bring into your system will always arrive from a place of trust and credibility, not volume. Related: Choosing Quality Over Quantity Helped Our Company Grow During the Pandemic
