Electronic Signature Licitness for Franchise Contract in United Kingdom

How to eSign a document: electronic signature licitness for Franchise Contract in United Kingdom

welcome so there are 750 000 franchises in the united states alone and those franchises employ over 8 million people if you're new here my name is tark johnson i built a multi-million dollar franchise business with locations in california and florida and in this video we're going to talk about how franchising works so we're going to talk about what is a franchise how does a franchise work and then we'll even go into how you could even make money owning a franchise so here are some brands that are franchises that you may or may not know so you got brands like mcdonald's baskin robbins taco bell kfc one of my personal favorites five guys burger king 711 subway and even marriott is a franchise now before we get started if you like learning about business or you're a small business owner yourself or want to be a business owner please make sure to hit the little like button below it helps the youtube algorithm show this video to more and more people also drop me a comment below and tell me what your favorite franchise brand is or any franchise questions that you have so make sure to hit the subscribe button as well so that way you make sure to not miss out any on any of the other videos that i post all right so what is a franchise very simply a franchise is a system in which to operate a business so for this video we're going to use a very easy example that everyone will have heard of no matter where you live which is mcdonald's so mcdonald's is a franchise company the first thing we need to know are two different terms number one is the term franchisor number two is franchisee so in this example mcdonald's is the franchisor they're the ones that issue the rights to own and operate a mcdonald's location a franchisee is that person that signs an agreement with mcdonald's and gets the rights to own and operate a mcdonald's franchise location so if let's say for example you and your your family and some of your buddies all pooled some money together and decided that you wanted to open up a mcdonald's you would be the franchisee and you would sign an agreement with mcdonald's who's the franchisor so when you sign an agreement with mcdonald's they're basically they give you a guide and a system to own and operate your own mcdonald's franchise now in that system you gotta follow their rules you got to use their system it's kind of like if you went to ikea and you bought a piece of furniture from ikea you're basically buying this box in that box you have all of the parts you have the manual you have the tools and they're saying here's the box now you have to do the work in order to put the furniture together so similar to mcdonald's they're going to give you the box they're going to give you the tools they're going to give you the blueprint all the parts and then it's your job to actually put it together with their support with their instruction manual and so the way that that works is that when you're opening a franchise you have to pay money in order to get those rights so as an example with mcdonald's you will first pay let's say your initial franchise fee so you might pay a 30 000 fee to mcdonald's and all that fee gets you is the rights to own and operate the system so in that case if we're going to ikea and we're planning on buying this piece of furniture you would pay this fee just for the right to have that piece of furniture that doesn't even actually buy you all of the tools and everything yet and then so secondly after you pay that initial franchise fee to sign the agreement and to get the right to operate a location now you got to pay all the money to get that location open so you got to sign a lease you got to put a deposit on that lease you got to find a place to own and operate the business you have to hire a contractor to build your location or if you already are have a location you got to go in and hire the contractor to make it look like the actual business so as an example when my wife and i bought our first franchise we leased the space and then we had to pay a couple hundred thousand dollars to have it all built out and make it look like the franchise brand so with the mcdonald's that can range from a million dollars all the way to two million dollars with other franchise locations you can own a franchise for as little as a few thousand dollars just depends on what kind of franchise it is so when someone hears hey wow a steak n shake you can get a steak and shake franchise for only ten thousand dollars well hold on a second that ten thousand dollars is just the fee to get the business open then you still have to get a loan or figure out a way to come up with the 300 400 500 000 a million dollars to get that business open depending upon what kind of business that is so the example of my wife and i my wife and i it took 300 000 to get our business open so first we paid our initial franchise fee which was 25 000 and then after paying an attorney to review the lease placing the deposit for the lease deposit with utility companies permitting all of the equipment paying for the general contractor our initial order for all of our food supplies and wind up coming out to about 300 000 is what it cost us to get our franchise open now what worked out great for us is that we went up doing over thirty thousand dollars in sales our second month in business until we were able to get that profitable our second month in business uh if you want to learn how we did that i created a whole 23-page blueprint and guide that you can use because i love helping people which is why i make these videos but i created that guide called my seven-step blueprint to business profits in 60 days so that you can use it as the blueprint to create your own successful business or your own successful franchise so leave a link to that below in the description of the comments or something like that or you can just go to my website johnson.com and get it for free but let's move on so then once you have the business open so let's say you have the mcdonald's open you will pay the franchise and mcdonald's a percentage of all of your sales so that you maintain the rights to own and operate that business so as an example if your mcdonald's is doing two million dollars a year in sales you might have to pay ten percent in what's called a royalty fee to mcdonald's and that royalty fee pays for the support that you get from mcdonald's it pays for different marketing that they do you might have to pay a separate percentage called a marketing fund fee specifically to contribute for all of the ads that mcdonald's does and so those are what's called the royalties and the royalties or what you pay to the franchisor that is mostly how the franchisor makes money the franchisor can also make money by making you purchase your food your equipment or any of your supplies from a specific supplier and so the franchisor may sell you those things directly and then they get a percentage of it so that's very common it's very normal some franchisees don't like it but at the end of the day the franchisor has to make money as long as they're not bending you over and you know really charging you a lot of money for it then it makes sense it's a win-win the franchisor makes money they continue to reinvest in the system and make things better and then you make money and you are able to profit and support your family and what your dreams are so here's a question that you might ask and thinking about okay now i'm starting to understand how a franchise works why wouldn't mcdonald's the franchisor why wouldn't they just open up locations themselves well one mcdonald's does so a lot of franchisors have corporate owned location and france franchise zone locations that are independently owned and operated most franchise companies start out first corporate and not necessarily corporate as in like big but a lot of franchises start with someone like you or myself having an idea to create a business we open a business and then we open four or five or six or ten and those businesses become successful and then we go wow i really want to grow this brand into a much larger concept and so what they'll do is because they don't have the money or the capital to go out and open a hundred more locations and instead of going and getting massive massive loans or giving someone ownership of their company to raise money they say you know what we're gonna package this into a franchise we're gonna go out and sell the right so that other people can own these franchises there's a couple of benefits in doing that one franchise owners have skin in the game have you ever been to a business where you go in let's say it's like a food business that maybe is a chain or corporate owned and the employees are just like on their phone they don't care they're not doing anything they're just like hi how can i help you today well a lot of times some of those businesses are corporate owned and so the benefit of a independently owned business is that you have the owner there helping to operate and run the business they have more skin in the game and so that increases the likelihood of that business succeeding as opposed to paying a manager that's just hired by corporate and you're paying them 40 or 60 000 a year to run that business that they don't necessarily care about and they'll kind of leave at any time now i know that's not fair to say for anyone who's an employee and who may be a manager who operates a business i'm generalizing here the point is not to try to disrespect you but generally speaking those independently owned and operated businesses the franchisors want people that have skin in the game number two is capital right so i i mentioned this before is that a lot of the time these franchisors they don't have the money to go out and open another 50 or 100 locations so they're going out there finding people that have the money to open up those locations and then they're going to support those owners by making the system as best as they can and so what the franchisor does is they focus on the overall brand going out there and marketing the brand getting the name out there they focus on making sure they get the best suppliers possible for the franchise owners negotiate the best pricing for those vendors as an example mcdonald's in 2019 the company bought another company for 300 million dollars and that was just for mcdonald's to have a stake in several companies that develop apps and mobile payment systems and utilize artificial intelligence so instead of mcdonald's spending 300 million dollars and opening up new locations what they do they spend the 300 million dollars in investing in the business to make the business be able to run profitably and efficiently and so at the end of the day there are hundreds of thousands of franchises there are over 700 000 franchise locations and when you open a franchise or when someone opens a franchise location you still have to hire the staff the hire the staff is employed by you not the franchisor you still have to find the location you still have to sign the lease you still have to run payroll so as a again as the ikea example although you're buying the box that has all the pieces of the furniture it has all the tools it has the wrenches it might have a screwdriver it's got all the nuts and bolts it's got the directions and instructions you still have to do the work and actually put the piece of furniture together so it's the same thing with the franchise you might be buying a box with all the tools and the resources and the kit but at the end of the day you still have to do all of the work and get that business open and then run and operate that business so drop me a comment below with any of the franchise questions that you have i do my best to respond to all the comments personally also make sure to hit the little like button for the youtube algorithm it shows this video to more and more people and if you're interested in franchise ownership or starting your own business or if you even have one already make sure to head to my website get my free 7-step blueprint to business profits in 60 days and again it's a great 23-page guide and blueprint that shows you exactly how to operate and run a successful business and guys i'll leave a playlist here about some other franchise videos or it's on one of these sides here but i have a lot of other videos on franchising how it works what questions you should ask how they make money basically everything you want to know about owning a franchise i really hope you got value out of this video my intention is to serve you and to help you and i look forward to seeing you on the next one