The funds described herein are open to “accredited investors” only, through an offering made in accordance with Regulation D, Rule 506(c) of the Securities Act of 1933, as amended. In purchasing securities through a 506(c) offering, we are obligated to verify any participating investor’s status as an “accredited investor” in accordance with Rule 501 of Regulation D. Investors should consider the investment objectives, risks, charges, and expenses of the fund carefully before investing. We do not make any representations as to the accuracy or completeness of the information contained on this website and undertake no obligation to update the information. Past performance is not an indicator of any future results. All investments contain risk and may lose value. This does not constitute an offer to sell or a solicitation of interest to purchase any securities or investment advisory services in any country or jurisdiction in which such offer or solicitation is not permitted by law.

What Numbers Say About Franchising – Fran Finders

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

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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/

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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.

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