The information provided is for convenience only. It is not investment advice or a recommendation, it does not constitute a solicitation to buy or sell securities, and it may not be relied upon in considering an investment in a Cardone fund. Past performance is no guarantee of future results. Any historical returns expected returns or probability projections may not reflect actual future performance. All securities involve risk and may result in partial or total loss. Investment in Cardone funds is available only to independently verified “accredited investors” through an offering made in accordance with Rule 506(c) under Regulation D of the Securities Act of 1933. Before investing in any Cardone fund, prospective investors should consider carefully the investment objective(s), risks, arches, and expenses. While the data we use from third parties is believed to be reliable, we cannot ensure the accuracy or completeness of the data provided. Cardone Capital does not provide legal or tax advice. Prospective investors should consult with a tax or legal adviser before making any investment decision.

FranFinders – Numbers Speak Louder Than Words

Today I am going to talk to you about how the numbers tell the true story about the franchisor’s profitability. When you receive a copy of the Franchise Disclosure Document, you can get overwhelmed by this lengthy document. However, I will identify a few simple tactics to analyze the franchisor’s corporate financials. When you receive the FDD, instead of starting with Item 1, I recommend that you begin reviewing the Audited Corporate Financials first, which is in a separate exhibit of this document. In this first step, you will want to start with a review of the Balance Statement. You will need to analyze the total assets to total liabilities and determine the owner’s equity. Is it improving, staying the same or declining in value? The next step is to review the Income Statements for the last 3 years. We analyze all revenues, which include royalty payments and all other income, and then compare these figures to the total expenses.

We determine how the gross and net margins are trending over the last years? Have they improved, stayed the same or declined? Finally, we evaluate the cash equivalents for the last 3 years. What are the cash reserves at the beginning of year compared to the end of the year? Are they stronger than last year and the year before or are the numbers deteriorating. If the numbers are declining, we will need to ask the franchisor to explain “why” and then determine how to proceed with the document review. If you start with analyzing the financial statements first, you can confirm very early in the process, how you want to proceed, which will save you a lot of time. Don’t overlook this important information. These numbers are very important to analyze the viability of the franchise system. So take your time and ask questions.

Thank you for watching this video—Please Share it. Also, I like to read your comments, so please leave a comment and I will be sure to respond.

Subscribe to My Channel: https://www.youtube.com/user/FranFinders

++++++++++++++

Where to stay connected with Sue Bennett & FranFinders:

Website: http://www.FranFinders.com

YouTube: https://www.youtube.com/user/FranFinders

Facebook: https://www.facebook.com/FranFinders/

Twitter: https://twitter.com/FranFinders

Pinterest: https://www.pinterest.com/franfinders/

LinkedIn: https://www.linkedin.com/company/franfinders-llc

Google +: https://plus.google.com/+FranFinders

Instagram: https://www.instagram.com/franfinders/

++++++++++++++

Sue Bennett is the CEO/Co-Founder of FranFinders, a franchise consultancy and funding group. At FranFinders, we are more than franchise consultants. We are “Your Partners.” Throughout your franchise search, from the Initial Call to your Grand Opening, we are with you “Every Step of the Way.” By partnering with us, you get our Experience, Knowledge and proven 10 Step Franchise-Buying Process that will bring Clarity and Direction to your franchise search. Gain Confidence, knowing that you are partnering with professionals.

(Visited 17 times, 1 visits today)