Five Levels of Franchising

     There is no question that franchising is an important part of our economy.  The concept of franchising dates back to 2000 BC, but in the last hundred years it has expanded and become more sophisticated, and regulated.  

       The first major franchises in this country were what I call Product Franchises.  They included franchises for automobiles, tires, and gasoline.  Franchising then expanded into Business System franchises. 

     Franchising success is phenomenal.  Franchises are involved with hundreds of industries and thousands of brands.  The International Franchise Association (IFA) says franchising had a great year in 2015, and 2016 looks even better.  The IFA also says franchise employment rose 2.9% in 2015 compared to 2.4% growth for the total non-farm private sector.  The IFA estimates that the Gross Domestic Product (GDP) for the franchise sector is forecast to increase 5.2% to $521 billion as compared the U.S. GDP of 3.3%.  Franchising is big business, but is a marketing system that allows an individual entrepreneur to be the owner.

    The first level of franchising is the Franchisor.  This is the person(s) who has a successful business model and chooses to franchise the concept.  Normally, two or three current operations must be showing strong success to prove the concept is franchisable. 

      Franchising a concept requires an investment of several hundred thousand dollars.  Manuals and training programs have to be developed, as well as completing and filing the Uniform Franchise Offering Circular, which is required by the Federal government and all Registration States.  The Franchisor then collects an initial franchise fee and a royalty fee from the franchisee.     

     The second level of franchising is the single-point franchise.  Some franchisors want the owner personally involved in the business and will not award more one franchise initially to an individual franchisee.  

       The third level of franchising is the franchisee that owns multiply locations.  This is becoming very common.  A successful franchisee may be awarded a second franchise.  Some franchisors require a prospect to commit to 2, 3, or even 6 locations initially.  The International Franchise association says 40,000 franchisees operate 200,000 franchises. 

       The fourth level of franchising is the Regional Franchisor.  This is an investor who buys the rights to sell and supervise franchises in a specific area.  The Regional Franchisor then shares the initial franchise fee and royalty fee with the Franchisor.  The Franchisor may require the Regional Franchisor to own and operate one location as a sales and training tool. 

      The fifth level of franchising is the Area Developer.  This is where one deep-pocket individual or cash-rich corporation buys the rights to an area and agrees to build-out all locations without selling any franchises. 

    Selling regions or areas for development might achieve faster growth for the Franchisor, but gives up some control and income. 

     The term Master Franchisor is sometimes used to refer to the Franchisor and sometimes it refers to a Regional Franchisor.  Clarify how the term is used.

     To learn more about franchising, read Business Fits by Terry Oliver Lee.  The book is available as an e-Book or a paperback on Amazon.  

        I also give talks on The Five Levels of Franchising.

                        http://BusinessFits.com

Rewrite History

       One of the primary premises in George Orwell’s book, 1984,  was that the government had to rewrite history in order to promote their political agenda.  We see more and more of this happening today.  I think it has always happened, but it is being exposed more today.

    The State Department intentionally deletes portions of press interview tapes in order to cover up lies.  When exposed, they try to keep it hidden by saying it was a technical glitch.  Even when they admit it was intentional, they refuse to say who gave to order to alter the tape.  Deleting tapes caused one President to leave office, but this cover-up will probably just blow over. 

       Editing tapes drastically changes history.  Katie Couric produced a so-called documentary on guns.  This anti-gun film gave a totally misleading conclusion of an interview by inserting a long pause where none existed.  Ms Couric has apologized for the action.  Is she sorry for her actions, or is she just sorry she got caught?  She may have been caught, but the film is still unaltered and will become a fraudulent part of history.

      Many so-called documentaries play loosely with the facts to reach conclusions supporting a political agenda.  Some other “documentaries” that have employed such tricks are Michael Moore’s Fahrenheit 9/11 and Al Gore’s An Inconvenient Truth.  These films are obviously scripted and rehearsed to reach a foregone conclusion.  The only thing resembling a  documentary is the poor quality production. 

      Government and politicians often lie and we are too ready to accept it.  I am concerned that it is becoming more frequent and flagrant.  The media should do a better job of exposing political lies, but they seem more interested in promoting lies if the lies can create a headline.  At the same time, the media does not do the necessary work to expose actual crimes committed by politicians.  This requires time and investigative reporting. 

        The holocaust was one of the darkest times in the history or the world.  Nazi Germany killed six million Jews.  General Eisenhower ordered extensive photos and documentation because he knew someone would eventually try to rewrite this page in history.  We have already seen Islamic leaders claim the holocaust never happened. 

       Many people do try to rewrite history for political reasons.  Some of these lies actually become part of the curriculum in our education system.  Because the lies are taught in our schools, they are accepted as true. 

     Our schools teach that white hunters almost exterminated the American Bison when that is a statistical impossibility, but it fits the environmental agenda.  We teach that President Jefferson had a child with a black slave when that allegation has been totally disproven with DNA testing.  But, the lie fits a popular agenda of criticizing our Founding Fathers, and that fits the agenda of discrediting them in order to rewrite the constitution. 

     I see the same thing in business.  New ideas try to change history.  Technology changes, but sound business principals do not change.  Smart entrepreneurs do not try to reinvent the wheel.  All new and aspiring entrepreneurs should take a quick review of the basics.  That is one of the reasons I wrote Business Fits.

         

http://BusinessFits.com

Hope & Change

       President  Obama’s  campaign   slogan   was “Hope & Change.”  This was a great slogan.  It said nothing, but everyone could interpret it to mean whatever they wanted it to mean.    The Change portion of the  slogan  was  significant  because people  were  fed up  with  the Washington establishment. 

      Obama could have been considered a political outsider because, as a first term Senator he had never been part of the establishment.  He had never done anything except campaign for office.  The closest thing he ever had to a job was as a community organizer, if you can call that a job. 

    Obama was very charismatic and delivered a great speech, as long as he had a teleprompter.  People could imagine him to be whatever they wanted.  This hope for change, and the fact that he dominated the black, Muslim, and black sympathizer voters was enough to elect him twice. 

   The American working class is even more fed up with the Washington establishment and is still looking for change.  Donald Trump could bring real change.  He brings out voters and supporters that have never been involved in politics before. 

       Trump’s slogan is “Make America Great Again.”  He is promising change just as Obama did.  The big difference is that Trump actually has the necessary experience and skills to get it done.  He is a leader, negotiator, and a deal maker.  I hope that means he can make bipartisan deals for the good of the country and it’s people. 

     The republican establishment is concerned that Trump is not a True Conservative.”  I feel Trump is conservative, but he will not blindly follow the Republican agenda.  This is good because I have had enough partisan politics. 

    The argument that Trump is a dangerous unknown is a joke because he says what he thinks and is seldom “Politically Correct.”  Trump is an open book, and I love it.  I recently heard a political commentator say Trump should have called someone “lawless” instead of “criminal”.  This is ridiculous.  The two words are synonyms.  I am sick of reading political connotations and implications into every word.  Progressives and the media need to grow up.  Political correctness has gone too far.

       Some people do not like Trump because he is arrogant, which is true.  That trait probably comes with being smart, knowledgeable, and successful.  If you were hiring someone to work for you, isn’t that what you would want?  We are hiring someone for the greatest job in the country. 

      Trump will not let anyone push him around.  If someone pushes him, he will push back.  There is nothing wrong with that.  That is what we want in a President. 

      We don’t want someone like Mitt Romney who let a nobody like Candy Crowley make a fool of him.  In one of the Presidential debates between Obama and Romney, Crowley deviated from her role as a moderator and took on the role of Judge to support Obama in a lie.  Romney stood there like a muted moron and let her do it.  Can you imagine someone trying that B.S. with Donald Trump?  I would love to see it, but most people are smarter than that. 

 

http://BusinessFits.com

An Inconvenient Truth

        An Inconvenient Truth is Al Gore’s 2006 “documentary” film about global warning.  I just watched it again.  If you have not watched it recently, it is worth a couple hours.  I questioned much of the movie in 2006, but with what I know as facts today, it is pure propaganda.

        I watched this time with a pen and paper.  I took two pages of notes.  One time, I made the notation that I might have to “Pause to go puke.”

        I do not question that we have climate change.  The area where I live in Wisconsin was once covered by a glacier and it melted.  We have always had climate change and that will continue until our Sun burns out and we have a real ice age.  My problem is thinking mere mortals can control it, and are blaming it on carbon emissions. 

        The movie is very well done and plays on people’s emotions.  It played an important role in persuading people that the world was in danger due to carbon dioxide emissions. 

        Gore showed a polar bear swimming in the ocean and stated they were drowning due to melting ice.  Polar bears like to swim in the ocean and some probably do drown on occasion just as humans drown on occasion, but the facts show that the polar bear population has increased dramatically since 2006.

        The film states that melting ice will raise the oceans by twenty feet and flood Florida, San Francisco, and Manhattan.  Gore is not specific about when this will happen, but implies it will happen within the decade.  We are already past that time line with little or no change in ocean levels. 

        Gore blames all severe weather on climate change.  It does not matter if it is drought, floods, heat, cold, tornadoes, or hurricanes; he claims they all happen because of our carbon emissions.  Sometimes the convoluted logic is amazing.

        Most of the facts and data used in the film were either totally manufactured or taken from the climate change studies funded by the United Nations.  After Climatgate, these studies are considered questionable or at the very least were manipulated after the Climategate scandal.

        Gore advocates joining the United Nation’s Kyoto Protocol to control global warming.  In my opinion, Kyoto is just a scam for world-wide wealth redistribution. 

        Gore considers his conclusions to be absolute and unquestioned.  He uses cartoons to ridicule any rational thought that might disagree with his opinion.  He even misquotes people like Winston Churchill to make his point.

        I totally agree that we should all be good stewards of the natural resources God has given us, but the proposed carbon emission legislation and the recent actions of the Environmental Protection Agency will do nothing to control climate change. 

        It is impossible to calculate how many millions of dollars Al Gore has made with his anti-carbon campaign.  The good news is that he has not been able to establish the Carbon Exchange which would have put him, and others, in a position of world power and world-wide income redistribution.  I am ashamed to admit that I voted for this man, but we all make mistakes. 

 

http://BusinessFits.com

Privacy vs. Security & Apple

        Privacy vs. security is a political debate that will probably never be resolved as long as the United States remains a democratic republic, and that is good.   

        Theoretically, I would have no problem with a responsible Federal Government invading my privacy if I am not doing anything wrong and that information was kept confidential, but that is a totally naive idea because the government is made up of people, and people are not always honest.  As the saying does; “Power corrupts and absolute power corrupts absolutely.”

        History shows that some people in government will use this information for political, personal, dishonest, and illegal purposes.  Recent events with the Internal Revenue Service and the National Security Agency have shown that people in government cannot be trusted with all this information. 

        The solution is quit simple.  The Constitution and the Bill of Rights clearly spell out how to deal with this controversy.  The Founding Fathers were very aware of personal privacy rights and the obligation of the Federal Government to provide security for the country.  We just need a common sense interpretation of the Constitution and not try to rewrite it for political purposes.

        In the private sector of our great country the question of security vs. privacy can be handled much easier with a little common sense.  After the San Bernardino terrorist attack, one of dead terrorist’s cell phone was recovered.    There was a very real possibility that this phone could contain information critical to protect us from future terrorist attacks. 

        One of the clear responsibilities of our federal government is to protect us from terrorist attacks.  The government needed this information, but Apple refused.  The government clearly worked within the Constitution and obtained the necessary search warrants.  Apple still refused. 

        Apple’s decision to not work with the government was based on projecting an image of absolute security for their users.  This was a stupid lose-lose decision.  By refusing to work with the government, Apple alienated customers concerned about a terrorist threat. 

        Apple forced the government to crack their security by other means proving the security was not as good as Apple claimed.  This alienated customers concerned about security. 

        Apple’s decision cost them with both customer groups.  It’s no wonder their stock is down.  If Apple would have quietly coopered with government they could have maintained the perception of absolute security for their customers and shown that they had an important role in fighting terror.  Sometimes I am amazed how top management of major corporations can be so short-sighted.  Unfortunately, this problem is not confined to the private sector.  Federal Government bureaucrats are even worse.

http://BusinessFits.com

What's Happening?

       Hillary R. Clinton was the “presumptive” Democratic Presidential candidate before her campaign started.  She was an ultimate insider with intimate connections to big money.  She assumed she would be the first woman President. 

     No one even dared to challenge Hillary.  There were only two other individuals in the first Democratic debate;  one of those individuals was Bernie Sanders.  Sanders is a 74 year old socialist who only joined the Democratic Party in 2015.  He has been an independent from 1979 to 2015 and was elected as a U.S. Senator from Vermont as an independent. 

      The amazing thing is that Hillary can’t get him to go away.  She is still trying to clinch the Democratic nomination for President.  How can this be happening?

      The Republican Presidential nomination has been just a strange.  We started with 17 candidates.  We had candidates with insider name recognition, senators, and governors.  We had black, white, and Hispanic candidates.  Both sexes were represented, and most of the candidates had big money backing and establishment support. 

      Donald Trump was one candidate who was somewhat of a joke.  No one took him seriously.  He was almost like comedian Pat Paulsen running for President.  He is now the presumptive Republican candidate. 

      The Republican Party establishment says Trump is not a true conservative or Republican.  They are right to the extent that Trump is the choice of the populace and not the establishment.  He rejects some of the Republican platform that has been a failure, such as trade and immigration policies. 

      Some Republicans are now endorsing him and the establishment will follow.  They have no choice, because if they don’t, the Republican Party will go the way of the Whig Party. 

      How did this happen?  Trump self-funded his campaign.  He had no organization or ground game.  There is no way he should have won.  

      Trump does some very unconventional things.  He says what he thinks and is seldom politically correct.  He says what he believes and does not care about polls.  He addresses issues like immigration and trade in a common sense way that no responsible politician would ever consider.  Trump is not a politician.  He is a businessman and a patriot.  He does not need to be President.  He believes the country needs Real Change, and feels it is his civic duty to run for President.  Do the people of this great country agree?

     In my book Business Fits, I say the basics of business never change.  The same is true for government.  It’s time we get back to the basics that made this country great. 

http://BusinessFits.com

Starting a Business is Too Risky

      “Starting a business is too risky.  A good job is the only real security.”  This is one of myths about starting a business that I address in my book, Business Fits. 

      This may have been true at one time, but is not true today.  Many of us have a hard time accepting the new reality.  I think it might be harder for women than men.  It is natural for women to want security for their families, even it is based on old truths rather than current realities. 

       There is a movie called A Great American Tragedy about a man who had it made until he lost his job in the aerospace industry.  The movie stars George Kennedy and Vera Miles.  The time period is about 1970, but is timeless in many ways and well worth watching. 

     Kennedy was highly educated with a very specialized job, and lived the good life.  When he got laid off, he thought he would quickly get another job.  He found there were no jobs for him.  It took him a long time to realize this fact and recognize that his life had changed for good.  Even after he understood the reality, he went through a long period of adjustment. 

       Kennedy luckily had a wife and family that were very supportive.  Unfortunately, this is not always the case. 

      We don’t know how things work out for Kennedy, but he  is finally adjusting to his situation at the end o f the movie.  Unfortunately, he may be making another common mistake for people in this situation. 

  Avoiding these mistakes is why I wrote Business Fits.  http://BusinessFits.com. 

      For the last sixty years government jobs offered the best security, but this could be changing.  I hope our bloated, inefficient, and corrupt federal government is due to change.