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1 Expanding your Business August 15, 2012 YPK – Lunch & Learn

2 Basis of Interaction This is a discussion….. It your business – lets talk about it…. Statistics – Private Sector (Statistics Canada) –48% - of labour force – Small Enterprises (< 100 empl) (5.1m) –16% - Medium Enterprises (100 – 499 empl) (1.7m) –SME = 64% private labour force (6.8m) –Other 34% - government & big business? 2

3 Methods of expansion Internal Work harder Appoint more staff Get a partner/s Other? External Open another location/store License businesses to use your system Franchise your business Combination Other? USA - Franchising commands a staggering 43% of the nation’s total retail sales and service dollars - Jerry Wilkerson, Founder, Franchise Recruiters, Ltd. Further discussion based on franchising For purposes hereof: The word “Franchising” = Expansion 3

4 4 Do you have a franchiseable business? You own and operate a business You make a profit Your business is distinct, special or unique You want to expand You are financially able to invest in your expansion First things First

5 5 Franchising is the practice of using another company’s successful business model to your own benefit or A form of business organization in which a company (franchised business) which already has a successful product or service (the franchisor) enters into a continuing contractual relationship (franchise agreement) with other businesses (franchisees) operating under the franchisor's trade name (license) and usually with the franchisor's guidance (training) in exchange for a fee. (royalty) Examples: Subway, McDonalds, 7-Eleven What is franchising?

6 6 Easy to set up Best practices immediately – no learning curve Relatively low set-up costs Brand recognition – multiple locations Purchasing power Consumer confidence - no surprises Manager is the owner – own boss Combined marketing, branding, etc. Increased profit = lower than royalties Ongoing support & training Why is franchising popular? 95% of all franchises are still in business after 5 years

7 7 People prefer franchised businesses Most cost effective growth model Accelerated growth potential Supplements your existing distribution system Process increases your current systems, controls and management. Protect your business model Pre-empt competition People pay you to expand your business! Why franchise?

8 8 Businesses for which franchising work best have one or several of the following characteristics: A good track record of profitability Easily duplicated Detailed systems, processes and procedures Around a unique or unusual concept Broad geographic appeal Relatively easy to operate Relatively inexpensive to operate Best practices

9 9 Franchise feasibility and viability study Develop the concept, business and franchise model Enable the franchisor Prepare and finalise documentation Canadian Franchise Association Develop manuals (Usually consist of 3 sections) Recruitment & Selection of the prospective franchisee, Pre-opening manual, Daily operations manual (15 sections) Launch the franchise network Manage recruitment process Franchising process

10 10 Save you time & cost of developing the administration – allowing you to focus on your business Franchise coaching Evaluate your franchise system Franchise feasibility and viability study Develop the concept, business and franchise model Enable the franchisor Draft legal documentation Franchise Association Develop processes and manuals Manage recruitment process Chair franchise forum meetings Annual franchise system review On-going support Give you the benefit of previous experience What can we do for you?

11 11 Corporate identity and brand development Training models and implementation Websites and Intranet Franchisee financing IT solutions Increasing sales – techniques Alternative business solutions – problem solving Ongoing involvement What are the experience benefits?

12 12 Awareness of the opportunity Vetting process – Recruitment and Selection Disclose Sign a franchise agreement Pre-opening actions Training START BUSINESS Daily operations and franchise management How do franchises come aboard?

13 13 “Thank You” Look out for the last L&L opportunity: Aug 22 - Business planning Bookkeeping (Pat Smith - EPR) Risk Management (John Becker) Insurance (Desiree Perdue) Responsible person: Lisa Frey (John Becker) Assisted by: EPK and Don McClean –

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