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Average Unit Volume

AUV

Designated Marketing Area

DMA

Co-Op

Group of Franchisees in a given DMA meet to make marketing decisions.

SBA

Small Business Administration

7A Loan

Loan from the SBA to finance a Franchise Buildout.

504 Loan

Loan from the SBA to Finance a Real Estate Building with businesses included.

Commercial Building Permits

Need the cities to approve your plans, before you can build

South Korea

4-story Dunkin' Donuts is in?

LOI

Letter of Intent for a Lease.

TI Allowances

Tenant Improvement Allowance, dollars given by Landlord to help you build your franchise.

Leonisio

started amazing lash and wrote the foreword for our book

Rate per Square Foot

What a commercial lease will cost you in Monthly Rent.

Triple Net Lease

you must pay you share of Insurance, Taxes and Utilities for the Shopping Center.

$100,000-200,000

How much does it cost to start a franchise

CAM

Common Area Maintenance

Option Years

Years that you might pick up in your lease after the initial period.

Non-Compete Clause in a contract or FA

Cannot own another competitor business in the same business.

Buffalo Wild Wings and Weck

What did buffalo wild wings used to be called

Exclusivity Clause in a lease

You are the only one that can sell that produce or service in your leased strip mall or building.

Radius Clause in a Lease

The Landlord restricts another Franchise Location of yours closer than the radius clause in the lease.

FMV

Fair Market Value in a lease.

Validation Process

Checking out a Franchise by talking to existing Franchisees.

Loan Broker

can work for a client to attempt to get a business loan from many different banks

Elements of Franchise

1. Trademark or name

2. Control

3. 1,000 per year (Illinois is only $500 registration state)

Illinois

$500 registration state

single unit franchisee, multi unit franchisee, and area developer

Types of franchising

item 7

initial investment

Item 1

The Franchisor, and any Parents,Predecessors and Affiliates

item 2

Business experience

Item 3

litigation

Item 4

bankrupcy

item 12

territory of location and where you deliver (Ex. 3 mile radius)

Area Developer

someone who buys multiple locations within an area or an entire county, and then sells them to franchisees

- has their own FDD

- splits commissions and shares in revenue with franchisor

PVF

present value factor

if you sell a franchise, you should get it for a multiple of 10

Ex. if you sell one location for $150,000, the PVF is $1,500,000

spouse, family members, or friends

who is the best person to consult with when buying a franchise

California, Wisconsin and Minnesota

where are the best three places to get free FDDs

royalty

4-8% cost

agency relationship

an independent salesperson sells a service on your behalf

success does not happen by accident

most important rule of franchising

subfranchising/master franchising

involves a grant of the right to sell individual franchises in a specified territory along with the obligation to provide some level of support and service to those individual franchises in return for a shared fee arrangement with the franchisor

inadvertent franchising

most common mistakes in franchising involves the sale of inadvertent franchises due to creating relationships accidentally

franchise advisory council

FAC

Unique Selling Point

USP

14

How many registration states are there

5.9%

How many franchises get up to 100 locations?

4000

how many franchises in the country

23

how many items are in an FDD

Franchise Disclosure Document

FDD

Federal Trade Commission

Who controls the FDD?

26%

How many franchisors get sued by their franchisees

International Franchise Association (IFA)

if you are a franchisor, you need to belong to this

Item 19

earnings claim, FPR

Singer Sewing Machines

First Franchise Ever

Entrepreneur

What is the best franchising magazine?

Allessandro Nolfo

Litigation-bachelors and masters from university of fribourg

Stephen A Colley

Formation-bachelor from UCLA

David Greeley

Litigation- went to university of arizona school of law

to be a franchise, you must

1. use a trademark
2. $500 in revenue, on top of paying the fee to use the franchise
3. medium of control or common marketing plan

Larry Destro

professor at UCSD, franchised Taco Bell, executive/franchisor, Dunkin' Donuts, Taco Bell, Baskin-Robbins