How Will President Trump Impact the E2 Visa Program?

The election of President Trump sent shockwaves throughout the political world. And when it comes to immigration, there is a lot of uncertainty among foreign nationals about how friendly the new administration will be to newcomers, and particularly those who want to invest in a business through the E2 visa program.

In his inauguration speech on January 20, President Trump said this:

From this day forward, a new vision will govern our land.

From this moment on, it’s going to be America First.

Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families…

In the past, President Trump has expressed a desired to deport undocumented immigrants with criminal records and build a wall along the southern border with Mexico to keep illegals from coming into the country. And in his first few days in office, the president has taken actions toward enacting these policies.

The question is, what (if anything) will change with the E2 visa program under the new administration? The short answer to that is probably very little.

The president does have the authority to make some adjustments in the number of approvals, but he cannot do away with the program without an act of Congress. In 2015, there were over 40,000 E2 visas approved, and when the numbers are available on 2016, they will likely be similar. The good news about E2s is there is no yearly cap, so there is no point in the year when they stop accepting applications because they have reached a yearly limit. There are, however, some loosely defined terms in the current E2 visa law.

For example, the law states that you must make a “substantial” investment in a U.S.-based business. Until now, $100,000 USD has been used as a safe guideline to meet the definition of substantial. Under President Trump, this figure could be adjusted slightly to maybe $125,000 or $150,000. The law also states that you must invest in a business that is “non-marginal”. This has been taken to mean a real, bona-fide business, rather than some marginal money-making scheme.

So how does an immigration officer know if a business is real? Usually by reviewing a detailed multi-year business plan. Under the new president, these plans will likely be looked at more closely. This makes it more important than ever to choose a business model that will be considered real and with a strong likelihood of success. And this is why E2 visa franchises are among the best options for foreign investors who want to do business in the U.S.

By investing in an E2 visa franchise, you are purchasing a business with a name brand that is known to USCIS officers, and has a proven track record of success. Franchisors also provide the strongest training and support to their franchisees. Remember, it is in their best interests that you succeed, because their name and reputation is on the line. The USCIS knows this too, which is why they are far more likely to approve an E2 applicant if they are investing in a franchise.

So which franchise brand is right for you?

This is always a difficult question. There are literally thousands of franchises across a wide range of industries, and it can take countless hours to filter through all that information. At Franchise City, we offer a better solution. We work with over 600 of the top franchise brands in the U.S., and through a proven multi-step process, we match foreign nationals with the franchise that best suits their passion, skills and budget. In addition, we work with some of the top E2 visa lawyers in the country to help ensure a smooth and seamless application process. For a comprehensive overview of our E2 visa program and how we can help you realize your American dream, go to http://franchisecity.net/visit/e2-visa/.

E2 Visa from Canada to U.S. Canucks can Start U.S.-based Business and Live South of the Border

canadian-flagThe United States and Canada has a very close relationship, and of course we share a border that stretches for thousands of miles. But although the two countries are close, it has become more difficult in recent years for Canadians to immigrate to the U.S. One pathway many Canadians do not consider is the E2 visa, an investor visa that allows well-capitalized foreigners to invest in a viable U.S.-based business.

For Canucks who are thinking of following this route, it is important to understand that approval is far from automatic. Although the United States approves roughly 36,000 E2 visas a year, there are stringent requirements, and if you don’t meet them, you will be turned down. Here are the most important requirements to be approved for an E2 visa from Canada to the U.S.:

You Must be (at a minimum) 50% Owner of the Investment

Your new U.S.-based E2 business can have partners, but at the end of the day, the person applying for the visa must own at least 50% of the enterprise. So for example, if you live in Toronto and you have a brother who lives in Detroit, you and your brother can go 50/50 on a business you start in Detroit. Or, if you have two siblings in the U.S. who want to own 25% each, that’s fine too — as long as you retain at least 50% ownership.

You Must Make a “Substantial” Investment in your New Enterprise

The U.S. does not provide any clear guidelines on the exact amount that must be invested to quality for an E2 visa, but history has shown that those investing at least $100,000 USD have a much better chance of approval. Not to say that investing less than $100K is automatically grounds for denial; but that, just to be on the safe side, it is recommended that you have at least that much available.

The E2 Business You are Investing in Must Not Be “Marginal”

The underlying purpose of the E2 investor program is to create jobs for Americans. This is why the USCIS closely examines the business you are starting to ensure it is not “marginal”. And by marginal, they mean not a risky or sketchy business, such as a multi-level marketing scheme or something similar, and not a business whose sole purpose is to support you and your family living in America.

In general, what this means is they expect you to be able to create at least two American jobs with your new business. These jobs don’t have to be created immediately, but you should be able to show in your five-year business plan (which is required along with your E2 application) that you will be hiring at least two American employees before those five years are up.

How Franchises Increase the Chances of E2 Visa Approval

It can be challenging to come up with a legitimate business in the United States to invest in. But one way to greatly increase your odds is by starting a franchise. Today, there are countless franchise business opportunities in industries ranging from the traditional fast food to children’s services to automotive to pet care, and much more. The franchise brands are well-established and known to USCIS officers who will review your application. In addition, the franchisor provides you with a detailed, five-year business plan and all the support you need to get up and running. Remember, it is in the franchisor’s best interests for you to succeed, because their reputation is on the line.

So can you be successful going from Canada to the United States with an E2 visa business? Of course. Lots of startup businesses are successful, but we also know that a lot of them fail as well. To increase your chances of success not only with E2 approval but with the business itself, it is best to look at all your available options.

At Franchise City, our passion is to help aspiring entrepreneurs find the franchise opportunity that best fits your passion, skills and budget. We work with over 600 U.S.-based franchise brands across a wide range of industries, and through a unique, multi-step process, we put our experience to work to match you with your ideal business. Our services are completely free, and there are never any additional fees to purchase a franchise through a brokerage. If you are a Canadian looking to move to the U.S. through the E2 visa program, we invite you to check out http://franchisecity.net/visit/e2-visa/ for more information.

 

 

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Unique, Risk-Free Restoration and Disaster Recovery Franchise Opportunity Now Available

800-water-damage-truckFranchise ownership can be the fulfillment of a lifelong entrepreneurial dream. But if you invest in the wrong business, it can turn into a nightmare. What if there was a way to start a franchise business with all of the risk removed, so you are in the best possible position to succeed? Most would say, “sounds too good to be true”, or “that type of opportunity just doesn’t exist.” Well, thanks to the innovation of one of the largest restoration and disaster recovery companies in the world, now it does.

1-800 WATER DAMAGE is owned by the Belfor Group, a well-established restoration and disaster recovery company with 250 offices and over 6000 employees operating in 28 countries throughout the world. Because they are an established brand and place a high value on their reputation, they have come up with a creative franchise offer that eliminates the risk and gives the franchisee all the tools they need to be successful.

What Does 1-800 WATER DAMAGE Do Exactly?

Though their name implies water damage cleanup, 1-800 WATER DAMAGE is actually a full-service restoration and disaster recovery company serving a market that is in need of immediate help when they are called. Among the services they provide include:

  • Water Damage Restoration
  • Mold Damage Restoration
  • Smoke and Fire Damage Restoration
  • Sewage Cleanup
  • Carpet Cleaning
  • Additional Services

They provide fast, local service 24 hours a day, 7 days a week to both residential and commercial customers, and they work with all insurance providers, making it smooth and convenient for the customer.

So What is the Offer?

For a one-time franchise free of $79,000, the company will purchase all your equipment, trucks, office expenses, employees’ salaries, and even pay you a salary for the first year. You will also receive medical insurance and a 401K plan. In addition, the company handles the vast majority of your paperwork and administration functions, including fielding client calls, setting up appointments, etc. And on top of all that, Belfor is so confident you will be successful, they even offer a money back guarantee to new franchisees for up to their first full year in business. In exchange for fronting your business expenses and eliminating all the risk, you and Belfor split the profits from your new franchise 50/50.

What is my Role as a 1-800 WATER DAMAGE Franchise Owner?

As the owner of a 1-800 WATER DAMAGE franchise, your primary role is to manage your crews of disaster recovery and restoration specialists, whose job is to help customers recover quickly from a catastrophe. The service is in-demand and recession proof, because when flooding, fires or other disasters occur at a home or office (and this happens more frequently than you might imagine), the customer needs someone there ASAP to clean things up. And in the majority of cases, the insurance company pays the bill, so the cost is usually not the main thing on the minds of customers when they call.

How do I Qualify?

You knew there had to be a catch, and here is it. Since Belfor is making an investment of over a quarter of a million dollars to get your business started, AND offering you a one-year money back guarantee on your franchise fee, they will screen potential franchisees very carefully to ensure they are working with the right candidate. Some things they will look for in a successful franchisee include strong business management and customer service skills, the willingness and ability to follow a proven business model, the motivation and desire to build a large business within your territory, and the financial capability to make a $79,000 investment in your own business.

If you believe you have the qualifications, and want to partner (risk-free) with one of the premiere restoration and disaster recovery companies in the world, fill out the form at the bottom of the page. We will work with you to help determine if 1-800 WATER DAMAGE is a good fit for you, or if there is another franchise opportunity you would rather invest in.

At Franchise City, we work with over 600 franchise brands across a wide range of industries, and we offer free, unlimited consulting to give clients an objective view of the best options to fit their specific skills, passion and budget. There is no fee for our services, and the franchise fee is always the same, whether you work with us, or directly with the company.

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E2 Visa from Philippines to U.S.? Franchises Increase the Chances of Approval

For many Filipinos, living and working in the United States is the fulfillment of a lifelong dream. The challenge is there are very few avenues for those who want to immigrate to America. Usually, you have to have a family connection – such as a spouse, parent, child or sibling – that is willing to sponsor your application. Another way is through a work visa, but in this case, you need an employer that will hire you and sponsor your application. If you are school age and have enough money, a student visa is also an option, but it is only valid for as long as you are studying in the U.S.

There is one option that Filipinos can use to come to America that does not require family connections or years of waiting for your number to come up – the E2 Investor Visa. An E2 visa can be used to immigrate from the Philippines to the U.S. if you meet all the qualifications for approval. If you are considering going this route, here are some of the criteria you will have to meet:

Your Investment in a U.S.-based Business Must Be Substantial

While the USCIS does not provide a clear definition of “substantial”, experience has shown that a successful E2 visa candidate should have at least $100,000 USD (roughly 4.5 million Philippine Pesos) to invest in their business. There have been exceptions to this rule in the past, but it is usually best to stick with these guidelines.

You Must Own at Least 50% of the Business you are Investing In

The person applying for the E2 visa has to become at least half owner in the business they are investing in – being a minority partner is not sufficient. The good news here is you can partner with a relative already living in the States, and many E2 investors do this, because it allows them to bring someone on board who has already settled in the U.S., knows the area you will live in, understands the culture, etc.

The E2 Business You Invest in must Create a Minimum of Two American Jobs

The whole point of the E2 Investor Visa program is to bring in foreign investors who can help bolster the U.S. economy. Toward that end, you will be expected to create at least two jobs for American workers. So your business, though it can be small, must be large enough to hire at least a couple of employees.

The Business You Invest in Must Be Legitimate and Not Marginal

The USCIS will not approve an E2 visa if it is for a business that is sketchy and/or not likely to be successful. Examples include multi-level marketing (MLM) businesses, upstart home-based businesses, and any other type of business of which the U.S. Embassy is likely to question its legitimacy.

Why Franchises are an Ideal Fit for the E2 Visa

Finding a legitimate business to start in the U.S. can be difficult. But there is one way to vastly increase your likelihood of approval – by investing in an E2 visa franchise. The approval rates for franchises are higher than non-franchise businesses, and it’s easy to see why. Franchise brands are already known the USCIS officers, so they already know the business is legitimate. Your franchisor also provides two other elements that the Embassy will want to see – a detailed business plan and comprehensive training. The reputation of the franchisor is on the line, after all, so they have a vested interest in ensuring you are successful.

Some Filipinos may not think they can afford an E2 visa franchise. If you are looking strictly at traditional industries such as fast food, financing may be a challenge, since the investment will likely be upwards of $500,000 USD. But there are other industries and business models that are highly profitable and don’t require this kind of upfront investment.

Two very lucrative industries are senior care and cleaning. In home senior care is an especially hot business model because of the aging population in the U.S., and it will continue to be this way for at least the next couple of decades. And many of these elder care franchises provide non-medical care (such as companionship, meals, light housekeeping, etc.), which means you don’t necessarily need a medical background to make the business work.

So can an E2 visa from the Philippines to the U.S. be successful? Absolutely. But you need to make sure you meet all the criteria – particularly the requirement that your business be legitimate. If you are considering an E2 Investor Visa but you’re not sure which business you want to invest in, we invite you to take advantage of Franchise City’s free unlimited consulting. Through a multi-step process, we work directly with you to find the E2 franchise business that best suits your passion, skills and budget. To learn more, fill out the contact form on the bottom of the page.

 

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Top Five Mistakes Made by Franchise Buyers

For many individuals, purchasing a franchise is the fulfillment of an entrepreneurial dream. But just buying into a particular franchise model does not guarantee success. In fact, buying into the wrong brand can turn your business ownership dream into a nightmare. To ensure you are getting into the right franchise, there are certain critical mistakes you should avoid.

Here are five of the top franchise buying mistakes made by aspiring owners:

Buying the Name, and Not the Business Model

A lot of entrepreneurs become franchisees after first being consumers of a particular product or service. For example, they love the food at a particular fast food restaurant, and they think “hey, we could open one of these in our town”. The challenge comes when they fail to examine the entire business model, and what type of work is involved with not only serving customers, but accounting, payroll, marketing, and all the other necessary tasks. They also fail to examine the time it is likely to take to turn a profit with this business model, and what type of profit they can reasonably expect.

Owning a Job, Rather than a Business

A critical part of understanding the business model is understanding how much income you can expect to make. There are some franchise businesses that have higher income potential; for example, in recent years, senior care and cleaning franchises have proven to be very lucrative. Others, such as fast food, tend to have smaller margins, and owning just one location might provide about the same income as your current job — along with the added stress of owning the business.

Not Having the Proper Financing in Place

Investing in a franchise involves more than just the franchise fee and cost to set up the location. You also need to have working capital for at least six months, and enough money to feed your family for six to nine months while you are waiting for the business to turn a profit. Another common challenge is the source of financing. For example, many opt for a home equity line of credit – this is particularly popular when home values are rising like they are now. But what happens if the business does not make it? With multiple loans on your house, you might find yourself over-leveraged and in danger of losing your home.

Looking for Immediate Passive Income

Setting up a franchise is hard work and there is no getting around that. Now over time, you may have a nice profit coming in and the ability to hire someone (that you can trust hopefully) to run your business on a day-to-day basis. But in the beginning, expect to put in long hours getting the business off the ground. Now, if this is a business you are passionate about, these can be long, enjoyable hours. But regardless, just know that there is no magic button that you can push to make your franchise successful. You need to put in the effort – especially in the beginning.

Honing in on One Particular Brand

It is great to partner with a franchise brand you like, but having an emotional attachment to a single brand can be a two-edged sword. Pursuing one brand can tend to cloud your judgment and cause you to only focus on the strengths without objectively examining the weaknesses. It is always a good idea to look at other options that are out there. There are, after all, literally thousands of available franchise brands across a wide range of industries. It never hurts to at least look at a few others that might be of interest to you. If, at the end of the day, you still end up settling on the brand you first looked at, you will at least do be making an informed decision with the knowledge of the other available options.

At Franchise City, we provide free, unlimited franchise consulting to help prospective entrepreneurs find the franchise business that best fits their passion, skills and budget. There is never a charge for our services, and franchisees never pay higher fees by going through a franchise broker. To learn more about how we can help you, fill out the contact form on the bottom of this page.

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What are the Best and Worst Franchises to Invest In?

These days, there are hundreds of franchise business models to choose from. And as franchise consultants, we strongly advocate choosing the franchise opportunity  that best fits your passion, skills, and budget. Becoming a franchise owner will require a major investment of time, talent, and treasure. You will be putting in long hours (especially during the startup phase) getting everything set up and guiding your new business to profitability. If you are not passionate about the business you start, it will be a difficult road to prosperity.

All that said, it is also important to find a franchise business model with a strong track record of success. If the company you work with does not have a successful track record, you are in for an uphill climb. No matter how enthusiastic you are, you must ensure you are part of a winning brand. Otherwise, you will have a very hard time making the business work.

Our friends over at FitSmallBusiness.com have compiled a list of the 50 best and 50 worst franchises over the past 16 years (from 2000 to 2016). The data is pulled from the Small Business Administration (SBA). SBA loans are a major source of financing for franchise startups, so it is useful to examine the SBA loan default rates of various franchise models to help determine which franchisees are making it, and which ones are going under.

Here are the top 10 from each list:

Top 10 Best Franchises Based on SBA Loan Default Rates

  • Straight Shot Express Delivery: 0% Loan Default Rate
  • Farmer Boys: 4.35% Loan Default Rate
  • InstyPrints: 6.25% Loan Default Rate
  • Comfort Keepers: 6.25% Loan Default Rate
  • Zeppe’s Pizzeria: 8.7% Loan Default Rate
  • Buffalo Wild Wings: 8.89% Loan Default Rate
  • Jet’s Pizza: 9.09% Loan Default Rate
  • Visiting Angels: 9.52% Loan Default Rate
  • Complete Nutrition: 9.68% Loan Default Rate
  • Great American Cookies: 10.53% Loan Default Rate

Of the top 50 performing franchises on the SBA default list, more than 75% had paid their loans in full between 2000 and 2016, indicating strong potential for revenue generation and profitability.

Top 10 Worst Franchises Based on SBA Loan Default Rates

  • Wings-N-Things: 88.89% Loan Default Rate
  • Noble Roman Pizza: 88% Loan Default Rate
  • Image Sun Tanning: 83.33% Loan Default Rate
  • 24Seven Vending: 81.08% Loan Default Rate
  • La Paletera: 76.47% Loan Default Rate
  • Orangetheory Fitness: 76.47% Loan Default Rate
  • Juice Zone: 75% Loan Default Rate
  • Wireless Toyz: 72.50% Loan Default Rate
  • Play N Trade: 72% Loan Default Rate
  • Executive Tans: 72% Loan Default Rate

All franchises on the 50 worst list had loan default rates exceeding 50%, and 7 of those on the top 10 list had failure rates that exceeded 75%. You can view the entire list and accompanying article here.

Some thoughts regarding this data:

The Franchise Brand is More Important than the Industry

On both the best and the worst lists, there are lots of food franchises. Of course, food covers a wide range of brands and models, and some will obviously perform better than others. But one thing about food franchises sticks out to me — there is a wings franchise in the top 10 on both lists. Buffalo Wild Wings comes in 6th on the top 10 list, and Wings-N-Things is #1 on the worst list.

Both companies serve wings, so what makes the difference? The difference is the franchise brand itself; the marketing methods, brand reputation, and support offered to franchisees. These factors all need to be taken into account before you invest your hard-earned money partnering with a franchise brand.

Senior Care is a Major Growth Industry

For several years, I have been very high on the senior care industry. With 10,000 Americans turning 65 each day and the Baby Boomers entering full retirement, senior care franchises are going to be a hot business for at least the next few decades. The SBA default data helps confirm this view. You will notice that in the top 10 alone, there are two senior care franchises: Comfort Keepers (#4) and Visiting Angels (#8). Overall, there are three in the top 50, with Home Instead Senior Care coming in at #32. By contrast, not one senior care company shows up on the top 50 worst list.

If we drill even deeper, we will find that all three of these franchises provide non-medical care to seniors; meaning they provide meals, companionship, grocery shopping, light housekeeping, etc. There are other senior care franchise models that provide health care administered by licensed nurses. This model is a bit more difficult because the owner needs some knowledge of medical care, and the in-home caregivers must be nursing professionals.

So from this data, we can conclude that in-home senior care is a strong business model for those who have a passion to serve the elderly population in their community and want to make a good living doing it. That said, you still need to be careful to choose a brand with a strong track record of success.

Cleaning Franchises are a Good Option

Though there were none in the top 10, Merry Maids (#17) and Molly Maids (#25) showed up in the top 50 best franchises. And like senior care, no cleaning franchise ended up in the 50 worst list. Cleaning has another thing in common with senior care; low overhead. Both franchises can be operated out of a small office (or even a virtual office) as the services are performed at the location of the client.

Pizza is Still a Favorite, but be Careful

Two pizza franchises are in the top 10 best franchises; Zeppe’s at #5 and Jet’s Pizza at #7. Some better known names such as Little Caesar’s and Papa Murphy’s also make the top 50 list. On the flip side, there are some pizza franchises on the bottom 50 list as well. Most notably, Noble Roman Pizza is rated the second worst franchise with a default rate of 88%. What is clear from this data is pizza is still a favorite food among American consumers. However, the startup costs are high (in the low to mid six figures at least), and competition is heavy. For this reason, choosing the right brand and location is extremely important.

Think Twice about Tanning and Golf

Two industries that had plenty of representation in the bottom 50 were tanning and golf. Two tanning franchises showed up in the top 10 worst (Image Sun Tanning at #3 and Executive Tans at #10). There were also three golf franchises in the bottom 50 (now defunct Pro Golf of America #19, Golf Etc. at #36, and Golf U.S.A. at #40). No golf companies show up in the 50 best, and only one tanning franchise makes the list (Tanworld at #22).

Tanning and golf are two industries that are often mentioned when people talk about “following their passions.” The challenge with these industries, however, is their seasonal natures — at least in many regions of the country. For example, golf season in the northern U.S. lasts only 4-6 months. Tanning, on the other hand, is hardly in demand at all in the southern U.S., and only popular in the north during the winter months. These factors must be looked at carefully before getting into this industry.

What’s Your Next Move?

We hope you found our thoughts on the 50 best and 50 worst franchises helpful. While it is always important to choose a franchise model in an industry that best suits your passion, skills and budget, this data shows that you must also pick a franchise that is in a viable industry and one that has demonstrated the ability to succeed in that industry.

At Franchise City, we work with over 600 of the top franchise brands across a wide range of industries. Through a proven multi-step process, we help match aspiring entrepreneurs to the right franchise brand. Our services are unlimited and completely free, and there are never any additional fees if you end up purchasing a franchise through our services. For more information, please contact us by filling out the form at the bottom of this page.

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What Does It Take to Open a Boston Market Franchise?

Boston Market is one of those brands that has been around forever (well, since 1985) and has had its share of ups and downs. In the early 90s, they expanded far too quickly and filed for bankruptcy. McDonalds purchased them, but then sold them off (along with Chipotle and a few other brands they had purchased) when their long and unstoppable collapse began in the late 00s. Since 2007, Boston Market has been quietly run by Sun Capital Partners, a massive equity firm that also owns a number of other famous brands including ShopKo, Bonmarché, and Lexington.

Their recent story? In 2010, they made a subtle but important change from “Kinda like KFC” to “Sorta like Red Robin.” Plastic silverware, disposable plates, and buffet-style service went out (in most stores; some retain the buffet style), and real dishes, metal forks and knives, and a revised menu with a focus on more sides and sauces came into play. (This didn’t keep The Onion from skewering those branches that retained the buffet style of services, however.)

Then, in 2014, the first new Boston Market in four years opened its doors, followed by two more that year, then 10 in 2015. The next target in line? Military bases — the perfect venue for their quick-but-home-y style of meal.

What About The Financials?

Sun Capital Partners is notorious for not releasing financial information about its companies, and Boston Market is no exception. We do know that the company is focused on increasing its Average Unit Volumes — meaning, it’s deliberately trying to drive up the profitability of the stores it currently owns. Since 2010, the AVU of a Boston Market branch has gone from $1 million to $1.3 million, driving it into the top 15 quick-service restaurants in terms of APU. That’s about on par with White Castle, Burger King, Taco Bell, and Jack in the Box.

The CEO (George Michel) claims the target is $1.5m per branch. That would nudge it into the top 10, keeping company with Wendy’s, Zaxby’s, Bojangles’, and Steak N Shake.

That is all the information we have, however, because Sun Capital Partners did not file the necessary financial paperwork for franchises last year — or any year since McDonalds first purchased them. They are growing slowly according to an internal plan developed by their CEO in conjunction with Sun Capital.

Should You Wait?

Michel did hint (and the company’s website does currently say) that the company “may” be developing a franchise program “in the future.” But if you’re looking for a franchise, the chances are excellent that  you’re square in the middle of a window of opportunity that — just because of random changing life circumstances — won’t be open for long. Don’t miss your chance to become a successful franchisee because you were waiting for the One True Franchise to become available — talk to a franchise broker (like us!) about what realistic options could get you started today. Before your window closes and the opportunity is gone for good.

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Claiming Your Own In-N-Out Burger Franchise

How cool would it be to be the master of your own Secret Menu? Owning an In-N-Out Burger is a red-blooded American’s dream come true. Can you imagine owning your own slice of the dream created by the youngest female billionaire in the U.S., 30-year-old owner Lynsi Torres? Thousands of people can taste it — inquiries into In-N-Out Franchises rain down on Google at the rate of over a hundred per day. In-N-Out is so popular that there’s even been a man arrested for selling fake In-N-Out franchise licenses!

What’s So Awesome About In-N-Out Burger?

Just about everything — they’re basically the Trader Joe’s of burger joints.

  • In-N-Out believes in sharing their success with their employees, having set a corporate standard minimum wage of $10.50 and a standard manager’s salary just reaching the six-figure mark. In a market that generally considers labor a cost to be cut rather than an asset to be nurtured, this has proven an advantage: they have the lowest turnover in the industry and their dramatically lower training and managerial costs reflect that.
  • They also believe that quality control starts at the most fundamental level, which is why In-N-Out has its own stable of butchers that carve and then grind the beef that goes into every one of their patties.
  • The infamous “secret menu” is a reflection of In-N-Out’s commitment to listening to their customer: every single item on that secret menu started as a customer favorite that became popular enough to go nationwide…shh!
  • Slow but unstoppable growth is the business plan: In-N-Out Burger refuses to open a burger joint unless it’s in a community that can definitely support it and is within 500 miles of one of their commissaries (the places where their buns and patties are expertly crafted) AND it already has a proven management team ready to break away from their current locations and go start the new location. In a world driven by next quarter’s profits at all costs, In-N-Out has maintained the same growth philosophy that they had back in the 60’s — which may be why you haven’t heard of them until fairly recently!

But That Doesn’t Sound Like a Business Plan for Franchisees

…sorry. It’s not — In-N-Out Burger has never and purportedly will never franchise out their brand. They believe too firmly in quality control and in sticking to their growth plan. But don’t let that get you down — In-N-Out may be out of bounds, but there are still dozens of similar, incredibly strong burger brands out there that would love to have you.

How do we know? That’s our job! We’re brokers — professionals in the art of matching an erstwhile franchisee with the franchise that can make their ambitions a reality. If you love In-N-Out Burger but you need something more than a job as a branch manager, fill out our contact form at the bottom of this page. We’ll give you a number of businesses that match the core philosophies, product line, and ambiance of In-N-Out, but will give you the opportunity to be the owner.

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Want to Become a Chipotle Franchisee?

Who wouldn’t want to be the owner of a branch of one of the most wildly successful new everyman eateries in decades? Chipotle has almost everything going for it — huge growth rate, great media coverage, and an excellent reputation as a restaurant that combines healthy food, ‘green’ business, and good prices. Even the downsides of owning a Chipotle aren’t really all that down. But what are they?

Chipotle By The Numbers

Unfortunately, Chipotle’s didn’t release any financial information regarding franchise costs for 2014 (keep reading to learn why). But they did release some pretty startling and impressive numbers in general. Let’s take a look at some highlights from their 2014 Annual Report:

  • 1,755 Chipotle restaurants are currently operational in the US, with another 17 operating in Canada and Europe.
  • The average startup cost for all Chipotles that have opened in the U.S. to date (as of the report) was $843,000.
  • The money made by a typical Chipotle goes toward:
    • 30% Food, Beverage, and Packaging Costs
    • 20% Labor Costs
    • 7% Administrative Costs
    • 5% Occupancy Costs
    • 2% Depreciation and Amortization
    • 1% Losses
    • 10% Other Costs
    • 25% Gross Profit

What Were Those Downsides Again?

25% profits is a pretty huge attraction in an industry where margins are often in the single digits. So what are the downsides? According to Chipotle itself, the challenges that is faces in the near future — at least, the ones relevant to the scope of an individual store — are as follows:

  • The time-to-profitability is meaningfully longer for a typical Chipotle branch than it is for many of their competitors — 24 months or longer (industry standard hovers around 8 months).
  • The market is starting to get saturated; it’s becoming difficult to find a truly attractive place to put a new Chipotle.
  • Profitability is largely dependent on Corporate’s ability to predict and preemptively respond to changes in the food supply. It’s difficult to maintain the high degree of “food integrity” that Chipotle does!
  • Secondarily, profitability is somewhat dependent on keeping labor costs low. This means that the growing minimum-wage movement, should it be realized, may significantly cut into profits (though this is unproven.)

All things considered, most big chains suffers from the second and last issues — those are essentially to be expected no matter what franchise you open unless you pick an unproven up-and-comer rather than an established name. The third item is practically Chipotle’s main selling point (besides the guacamole), so it’s not so much a ‘downside’ as ‘the reason you’d want to do this in the first place.’

But You Can’t.

Sorry — Chipotle isn’t, and has absolutely no plans to, develop a franchise model. They want to maintain complete control over their company (and with numbers like that, who can blame them?) Fortunately, while Chipotle isn’t available to franchise, there are hundreds of other food-industry franchises — many of which have the same commitment to high-quality, healthy food at decent prices — that you can get into.

Wondering what those other franchises might be? At Franchise City, we work with over 600 franchise brands across a wide range of industries, including many in the fast food space. Through a proven multi-step process, we are able to match prospects with the franchise business that best suits your passion, skills and budget. Our service is completely free, and there are never any additional charges or hidden fees to acquire a franchise through us. For additional information, fill out the form at the bottom of this page.

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Opening a Panda Express Franchise

Panda_Express_logo.svgPanda Express is a wildly successful chain of restaurants, easily the most dominant chain of Chinese-food restaurants in the U.S. The brand is so big, they were in serious discussions about purchasing P.F. Changs. They’ve been around longer than you remember, too — they were actually one of the first major chains to use the computer-based POS system (that is now ubiquitous in quick-service restaurants worldwide) way back in 1983.

Startup Costs

According to their 2014 financial disclosures, the average Panda Express startup costs break down as follows:

  • License Fee: Unknown (see below.)
  • Lease (first 3 months): Varies widely; as little as $12k for a small food court location or as much as $425k for a larger walk-in branch.
  • Leasehold Improvements: Varies widely again; as little as $80k for a small space that requires no locally-regulated improvements or a much as $500k for a massive (2,500 sqft.) space that requires complex or elaborate improvements such as a specialized exhaust system.
  • Furniture/Fixtures/Equipment/Supplies: $90k to $210k, based on expected daily volume, but even moreso on the financing terms you’re able to negotiate.
  • Initial Inventory: $2,200 to $3,600 based on expected daily volume.
  • Computers: $14,000 to $18,000 depending on financing terms.
  • Insurance (annually): $21,000 to $65,000 depending on local regulations and the likelihood of specific natural disasters.
  • Initial Training Expenses: $13k to $30k, depending on how far you and your management have to travel to get to the initial training program.
  • Architecture and Construction Costs: $32k to $85k depending on size of structure and local price variations.
  • Taxes: $4.5k to 10k for sales tax deposits, depending on expected daily volume.
  • Licenses and Permits: $1.5k to $30k depending on local ordinances.
  • Telephone/Internet/Fax and Related Expenses: $.5k to $1k.
  • Necessary Capital: Used to support the business until it starts to turn a profit — $60k to $120k depending on expected daily volume and recurring costs.

TOTAL: $380k – $1.6 million

Profitability

According to the owners — Peggy and Andrew Cherng — the profit margin of a typical Panda Express is a little lower than industry leaders, clocking in around 10%. (Compare to 25% at Chipotle for example). This is, according to the Cherngs, because Panda focuses so much on creating great food and offering its employees strong opportunities for personal growth. The owners are satisfied with their profit margin, and don’t plan on doing anything to meaningfully move it anytime soon.

Qualifications Required of a Franchisee

There’s only one qualification Panda Express asks of a franchisee — that you become an employee. Yep, Panda Express doesn’t offer franchises. They almost went public in the’90s, but are glad they decided against it and intend to continue with no franchises for the foreseeable future.

Alternatives

If you’re interested in running a Panda Express franchise, don’t let that news get you down — there are dozens of Chinese food franchises and several hundreds of food franchises out there for you to choose from. Get in touch with a skilled franchise broker who can help match you with the franchisor that best fits your passion, skills and budget.

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