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There is no fee to you for Joe’s franchise advisory services. If you purchase a participating franchise introduced to you by Joe, the franchisor pays Joe a referral or broker fee. Joe will explain this compensation arrangement openly
No. The franchise fee and required investment are established by the franchisor and disclosed in its Franchise Disclosure Document. Using Joe’s services does not increase those costs.
Joe has access to hundreds of participating franchise opportunities across numerous industries, but he does not represent every franchise in the marketplace.
The amount varies considerably depending on the industry, business model, location and franchise. Some home-based and service franchises may require a relatively modest investment, while retail, food and location-based concepts may require several hundred thousand dollars or more.
During your consultation, Joe will discuss your available liquid capital, total investment budget and financing needs before presenting potential opportunities.
Liquid capital is money that is readily available to invest, such as cash, savings or certain marketable investments.
Total investment is the estimated amount required to establish and begin operating the franchise. It may include the franchise fee, equipment, leasehold improvements, initial inventory, professional fees, training expenses, marketing and working capital.
A franchise may require only a portion of the total investment to be available as liquid capital if the remaining amount can be financed.
Possibly. Certain franchises are designed for semi-absentee or executive ownership and allow an owner to employ a manager to oversee daily operations. However, semi-absentee does not mean passive. You will still need to supervise the business, monitor performance and provide leadership.
Joe can help you investigate opportunities that fit your desired level of involvement, subject to the franchisor’s requirements.
The investigation and selection process generally takes a few weeks. After the introduction to the Franchisor, it can take a few months. The timeframe depends on your readiness, financing, territory availability, due diligence and the franchisor’s approval process.
Opening the business may take additional time, particularly when a location, lease, construction, licensing or specialized equipment is required. Joe encourages candidates to proceed carefully rather than rush an important investment decision.
The first consultation is a confidential, no-obligation conversation designed to understand:
Joe will also explain the franchise investigation process, his role and how he is compensated. You will not be pressured to select a franchise.
Yes. Joe can discuss general franchise-financing options and introduce you to qualified lenders and other financing professionals. The franchisor will also typically have some preferred lenders. Joe encourages you to shop interest rates.
As a licensed commercial real estate broker in New York, Joe can also provide general assistance with site-selection and commercial real estate considerations when appropriate. He can introduce candidates to independent franchise attorneys, accountants and other professionals. Legal, tax, accounting and lending advice should always come from the appropriate licensed professional.
Joe treats your personal, professional and financial information as confidential. Information is used to evaluate potential franchise opportunities.
Neither Joe nor a franchisor can guarantee that a franchise will be successful. Every business investment involves risk, and results can be affected by location, financing, competition, operating ability, market conditions and many other factors.
Joe’s role is to help you identify potential opportunities, ask better questions and navigate the investigation process. Before investing, you should carefully review the Franchise Disclosure Document, speak with current and former franchisees, investigate the territory, and consult an independent franchise attorney and accountant.
Speaking with current and former franchisees—often called validation—is an important part of evaluating a franchise opportunity. These conversations can provide firsthand insight into startup costs, training, franchisor support, marketing, staffing, daily responsibilities, financial performance and the overall franchisee experience.
After Joe introduces you to a franchisor, he will provide a suggested list of questions to help you prepare for these conversations. The questions will help you understand both the potential benefits and challenges of the opportunity, including whether franchisees would make the same investment again.
The Franchise Disclosure Document (FDD) is a legal disclosure document that provides detailed information about a franchise opportunity before you make a commitment. It contains 23 required sections, covering topics such as the franchisor’s history, initial investment and ongoing fees, training and support, franchisee obligations, litigation and bankruptcy history, financial statements, territory provisions, existing and former franchisees, and, when provided, financial performance information in Item 19.
The FDD is an important part of evaluating a franchise because it allows you to look beyond the sales presentation and better understand the costs, responsibilities, risks, and structure of the opportunity. Federal law generally requires the franchisor to provide the FDD at least 14 calendar days before you sign a binding agreement or make a payment to the franchisor or its affiliate.
Item 7 of the Franchise Disclosure Document (FDD) shows the estimated initial investment required to open and begin operating the franchise. It provides a more complete picture of the startup cost than simply looking at the franchise fee. The FTC requires Item 7 to include the expenses required by the franchise agreement and other costs necessary to begin operating the business.
Depending on the franchise, these costs may include the initial franchise fee, real estate or lease expenses, equipment, inventory, training expenses, licenses, travel, advertising, and other startup costs. Item 7 also includes an estimate for “additional funds” during the initial operating period, which is intended to account for certain expenses as the business gets started.
The numbers in Item 7 are generally presented as estimates or ranges, not guarantees. When I review franchises with a candidate, Item 7 is one of the first sections I look at because it helps determine whether the opportunity realistically fits the candidate's available capital and overall investment range.
It is also important not to confuse Item 7 with Item 19: Item 7 addresses what you may need to invest, while Item 19, when provided, addresses financial performance information such as sales or earnings.
Item 19 of the Franchise Disclosure Document (FDD) contains the franchisor’s Financial Performance Representation. This is where a franchisor may provide information about the financial performance of its franchise locations, such as average or median sales, gross revenue, unit performance, or in some cases earnings or profitability.
Not every franchisor provides financial performance information, and the information included varies considerably from one franchise to another. Some Item 19 disclosures provide detailed results from many franchise locations, while others may provide only limited sales information.
t is important to understand that Item 19 does not tell you exactly how much you will make. Gross sales are not the same as profit, and individual results can vary based on location, operating costs, management, local competition, and other factors. Item 19 should be used as one part of your financial analysis, along with Item 7, conversations with existing franchise owners, and your own projections.
When evaluating a franchise with a candidate, I review Item 19 carefully to help determine what the numbers actually represent, which franchise locations were included in the calculations, and how relevant those results may be to the candidate’s situation.
Stellar Rose Group Inc. / Franchise Broker Advisor
535 Broadhollow Road, Melville, NY, USA
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