Healthy Fast Food Announces SBA Franchise Registry Listing Approval for U-SWIRL Yogurt Franchise

Healthy Fast Food recently announced that their franchise U-SWIRL Frozen Yogurt was approved by the SBA for franchise registry listing. Being approved by the franchise registry list means that they have been added to a compilation of franchise systems who have had their franchise agreements reviewed by the SBA. This means that those interested in buying a U-SWIRL Yogurt franchise will have the loan process expedited while also ensuring a consistent eligibility decision.

Examine Franchise System Value When Purchasing a Franchise

Franchise Lawyer Charles Internicola in a recent blog post "Buying an Existing Franchise: Is there Value in the Franchise System?" explains the importance of conducting due diligence when purchasing a franchise or an existing business. 

When purchasing a franchise or an existing business most of the steps of due diligence are the same.  One exception to the due diligence process that prospective franchisees will encounter is figuring out if there is value in the franchise system. 

Value in a franchise system is important to you as a franchisee because, unlike an independently operated business, franchises require franchise fees and royalty payments so ensuring that the franchise system you decide to become a part of is a valuable franchise and is run by a supportive franchisor is key. 

When deciding the value of a franchise here are some things you may want to consider:

• Higher sales do not necessarily mean that you will be making higher profits - Unlike an independently operated business a franchise requires that royalty fees be paid to the franchisor.  Royalty payments are usually based on a percentage of your gross sales at your franchise location. 
  
• Make sure the franchise you are considering is properly run - Some franchises offer an adequate amount of help from the franchisor while other franchisors poorly run their franchise and offer the franchisees little to no help. 
  

Investing time into finding out if it will be profitable for you to purchase a franchise based on the value of the franchise will save you time and money in the long run.  When searching for the right franchise you will want to ask questions to the franchisor and will also want to speak with other franchisees in the franchise and ask them questions you may have regarding the value of the franchise and the way it is run. 

Refranchised Locations: Should You Consider Buying a Company Owned Franchise Location

In a recent article “Refranchising: Should you Buy In?” Jeff Elgin, CEO of FranChoice Inc., discusses a trend that has recently become more popular among franchise companies recently called refranchising or retro-franchising.   The process of refranchising is when a franchise company converts a company owned unit or location into a unit that is available to be sold to a franchisee.  Refranchising has been becoming more popular in recent years and there have been many franchise companies that have been converting not just one but a significant number of units to a franchise location for franchisees to purchase. 

Franchisees considering the purchase of a refranchised location should consider doing thorough research before making a decision to buy into the refranchised unit.  Your main concern as a potential franchisee of the company you are looking into and as potential buyer of a refranchised unit should be “why does the franchise want to sell the unit?”  According to Jeff Algin there are multiple reasons that can trigger a franchise company to refranchise their units:

• Earnings – Franchise companies invest excess capital often to open new franchise locations on their own or buy our other franchisees and then may eventually decide to sell those units to new franchisees.
• Operational Experience – Some franchisors feel the need to operate franchise units of their own in their franchise company so that do not lose their operational experience and helps them stay in touch with the issues and details of owning a franchise location. 
• Training facilities – Sometimes franchisors may buy units for the franchise company but they are not used as franchise store locations but instead for training facilities that can offer hands on training as opposed to classroom training.
• First right of refusal purchases – Franchisors may acquire units from an existing franchisee in order to re-sell them to a new franchisee that is more effective for their specific franchise system. 

When deciding to purchase a franchise location that is re-opening or a unit that is being refranchised for any other reason always make sure you perform due diligence.  To avoid making a bad franchising decision and for more information on how to perform adequate due diligence read Franchise lawyer Charles Internicola's article "Why Due Diligence is Critical when Buying a Business or Franchise". 

Purchasing a Closed Franchise Location: What you Should Consider to Make Sure your Franchise Location is Successful

Franchise lawyer Charles N. Internicola at the New York Franchise Law Blog discusses franchise opportunities involving the “potential re-opening of a previously failed franchise location”.  In the article Charles recommends that when considering these types of franchises that prospective franchisees:

• Understand Why the "Closed Location" Originally Failed - When considering the purchase of a franchise location that previously failed you will want to do your research and figure out why the location failed.  Do research and find out who was at fault and why.  Did the franchise location you are considering not succeed because of its location, the franchisor, the cost of rent, the cost of food/supplies or was it the franchisee who was to blame for the franchise locations closure.  All of these questions should be answered before you decide to move forward with considering the purchase of a closed franchise location.
• Your Investment Goes Far Beyond your Original Out of Pocket Expense - Often franchisors who are trying to offer a closed franchise location to a new prospective franchisee advertise the franchise location as being offered at a discounted start up cost.  Make sure that you fully evaluate the full situation and not just what the initial fee is.  Find out how much debt you will be incurring by purchasing the franchise that is being re-sold and how much your monthly charges will be.  If your monthly expenses are higher than the amount you will be generating in profits it is probably not worth buying the franchise location and you may want to consider continuing your search for the "right franchise" to purchase.
• Don't Just Jump In - Make sure you perform due diligence when considering the purchase of any franchise or business.  You never want to jump into a situation that you are not fully aware of.  Contact other franchisees from the franchise system you are considering purchasing and ask them any questions you may have.  Then, once you have based your decision to purchase the franchise on your due diligence, contact a franchise attorney to review your Franchise Disclosure Document (FDD) and your Franchise Agreement. 

Following the steps listed Charles Internicola's article will allow you to make an informed decision when you are considering the purchase of a franchise that previously closed and can be the difference between your franchise location succeeding or failing.