Over six years, franchised outlets among Children’s Franchises have grown by 35%, from 2010 to 2015, inclusive – demonstrating the rapid growth of this sector within the franchise industry.
Undoubtedly, much of this growth derives from consumer demand for increased care for children. Some of this growth, though, may be due to the specific offerings made by franchisors. While Children’s Services brands share many features with the franchise industry overall, they also have some unique features that distinguish them from the franchise industry.
One of the features that distinguishes Children’s Services brands from the franchise industry is the number of brands that offer territory rights for franchisees – as well as the quality of those rights. Only 13.1% of Children’s Services brands lack territory protection for franchisees, which compares to 22% for the franchise industry, indicating a stronger standard within this area in favor of franchisees.
In terms of the quality of territory rights that are offered, 29.5% of brands within Children’s Services offer franchisees an Exclusive Territory, which is much stronger than the 19% average for the franchise industry.
Another franchisee-friendly feature that is found in Children’s Services is a higher amount of financial disclosure provided in Financial Performance Representations (FPRs). In Children’s Services, 23.4% of franchise brands disclose expense data, which compares to 15.2% for the franchise industry.
Of course, not all Children’s Franchises are the same – among the ‘A grade’ brands (those we have assessed as an A or an A+), the 2015 Franchisee Turnover Rate is at only 4.4%, which compares to 11.9% for all Children’s Services brands as a group.
This indicates that while Children’s Services is, in general, a healthy and growing sector within the franchise industry, not all franchise brands are performing equally, if measuring franchisee-satisfaction, as measured through such indicators as turnover rates.
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60% of franchisors provide a financial performance representation (“FPR”) under Item 19 in their Franchise Disclosure Document.
As part of a franchise candidate’s due diligence process, it should be expected that certain questions will be directed to franchisor staff.
It was quickly apparent that some employees struggled working from home. They had never experienced the challenges associated with time management.
There have been various changes in average franchise investments during this time, some changes were more dramatic than others.
Before a prospective franchisee invests they must review the information disclosed in the Franchise Disclosure Documents.
A good consumer experience is not a reason to invest in a franchise. It skews the decision-making process of a prospective franchisee from start to finish.