Franchise Disclosure Documents (FDD) (previously called UFOCs) are crucial legal documents that franchisors in the United States must provide to prospective franchisees as required by the Federal Trade Commission (FTC). The FDD contains vital information about the franchisor, the franchise system, and the franchise agreement. As such, it serves several essential purposes, including due diligence, […]
By Steve Mize of GCF Valuation Last year we wrote an article on how to value a “personal service” franchise. In the original article we discussed some of the concerns being a continued decline in revenue trends for this industry due to competition and overall saturation in the market, but more importantly the reliance on […]
Pet Supplies Plus (PSP) was recently sold by Sentinel Capital Partners, a private equity firm that invests in promising lower mid-market companies, to Franchise Group, Inc. The deal is valued at $700 million. Read more here. Was it a smart investment? The answer is a resounding YES. Here are a few insights that inform this answer. High Historical and […]
Franchisees are the faceless owners and power behind franchise brands. Traditionally, this has been important because consumers don’t care who owns the business. They just care about product consistency and the brand experience. So why is this important? As investors, knowing more about franchisees is crucial because: You may be interested in identifying franchisee acquisition […]
Franchisors incur a slew of costs related to the initial franchise fee supporting their franchisee before the business opens for operation. The costs franchisors incur in providing advice and services necessary for the franchisee to begin operations can be broadly characterized into 3 buckets – franchisee prospect acquisition costs, training costs, and pre-opening support costs. […]