Step 2: Franchise System Analysis

Your Franchise Disclosure Document is a roadmap with your franchisees: describing in detail the franchise system you have developed.

Entrepreneurial Stage Recovery stage Growth Stage
Stage 1
(0-8 Years)
Stage 2
(9-16 Years)
Stage 3
(17-24 Years)
Franchise Disclosure Document (FDD)
1. The Franchisor
2. Business Experience
3. Litigation
4. Bankruptcy
5. Initial Fees
6. Other Fees
7. Estimated Initial Investment
8. Restrictions on Sources of Products and Services
9. Franchisee's Obligations
10. Financing
11. Franchisor's Assistance
12. Territory
13. Trademarks
14. Patents, Copyrights
15. Obligation to Participate in the Actual Operation
16. Restrictions of What the Franchisee May Sell
17. Renewal, Termination, Transfer and Dispute Resolution
18. Public Figures
19. Financial Performance Representations
20. Outlets and Franchisee Information
21. Financial Statements
22. Contracts
23. Receipts
24. Franchise Agreement
25. Area Development Agreement
Wrong People
Right Processes
Right People
Wrong Processes
Right People
Right Processes
Efficiency and 30% Profit

Stage 1: Entrepreneurial Stage

(Early Stage: 1-100 Franchise Units)

  1. Customer-Centric. As the founder and CEO of your company, you have developed a vision, passion and expertise within your core business. Your focus is customer-centric and seeking continuous innovation and new ways to attract and keep customers to increase your year-over-year revenue. This customer-centric value system must remain your core business while you are shifting your day-to-day responsibilities managing your franchise company. This will remain the heartbeat of your success as a franchisor. Without your relentless passion to attract and keep new customers, your franchisee unit-level revenue will rapidly decline, affecting the momentum of your system-wide franchise unit growth.
  2. Consultation. FGP will consult with you, utilizing our 12 proprietary and comprehensive learning modules. During this early stage as a franchisor, we will enhance your franchise development system, which allows you to accelerate your learning curve and profitability. More importantly, you will side-step franchisor marketing, sales, training, support and financial processes, which simply do not work! As an existing franchisor, we will together as a team deeply analyze and discuss your “business arrangement” with your franchisees as you have outlined in your Franchise Disclosure Document. This analysis will assist FGP in discovering your thought processes, current experiences and biggest obstacles.
  3. Methodology. As your strategic partner, we will help you analyze, understand, and improve the entire operational and financial structure you have outlined for your franchisees within your Franchise Disclosure Document. While important as a disclosure document, it also happens to be the best source on each aspect of your internal operations. Using the FDD as an outline FGP can diagnose problem areas to immediately improve franchisor and franchisee profitability. A complete review will result in dozens of important operational questions or issues for mutual discussion. These discussions will result in improved strategies and operational procedures for each of the following processes:

Franchise Organization

Marketing/Sales General/Administration
  • Franchisor Marketing Strategy
  • Franchisee Recruitment and Sales Systems
  • Sales Department (Compensation, Training Certification, Performance Reporting)
  • Franchise Consultant Referral Fee Strategy
  • Resale System (Annual Turn-Over Rate)
  • Franchisee Funding System
  • Lease Negotiation System
  • Department Profitability
  • Legal and Compliance (Federal/State)
  • Research and Product Development Budget
  • Inventory Management
  • Management Information Systems (IT)
  • Leadership/Management
  • Corporate Team
  • Professional Fees
  • Outsourcing vs. In-house
  • Franchisee Relations
Operations Financial Management
  • Training and Support Systems (New and Existing Franchisees)
  • Marketing Department (Brand Management)
  • Regional Field Support Program (Centralized, Decentralized)
  • Seminar and Events
  • Operations Department (Compensation, Training Certification, Performance Reporting)
  • Franchisee System-Wide Revenue Growth
  • Franchisee Marketing Programs (Local, Regional, National)
  • Franchisee Satisfaction
  • Royalty (Fixed vs. Percentage)
  • Royalty Collection
  • Cost of Service
  • Distribution (Products or Services)
  • Preferred Vendor and Supplier Programs
  • Department Profitability
  • Financial Reporting Systems
  • Financial Budgeting
  • Managing Debt
  • Cash vs. Accrued Reporting
  • Cash flow Management
  • Financial Audit


CEO Leadership Development™

Franchising is a craft and attempting to master it requires meticulous attention to detail over a prolonged period. CEOs leading at the highest level try to improve their leadership, operation systems and profitability on a constant basis.

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