Table Of Content01_045817 ffirs.qxp 8/28/06 4:02 PM Page iii
Franchising
FOR
‰
DUMmIES
2ND EDITION
by Michael Seid and Dave Thomas
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Praise for Franchising For
Dummies, 2nd Edition
“It is increasingly important that prospective investors know how to prop-
erly investigate franchising before taking the big step. Franchising for
Dummies, 2nd Edition, is a crucial guide for anyone who is seriously con-
sidering the path to small-business ownership. Michael and Dave’s long
experience and expertise in franchising makes them exceptional guides.”
— Matthew Shay
President, International Franchise Association
“Dave Thomas, the legendary founder of Wendy’s, and Michael Seid, one of
the nation’s leading franchise consultants, have written the ultimate fran-
chise primer. Whether you are planning to become a franchisee or looking
to start your own franchise system, don’t go into franchising without it.”
— Lawrence “Doc” Cohen, CFE
Franchisee; Great American Cookies, Pretzel Time,
and Coffee Beanery
Chairman, International Franchise Association
“I have had the privilege of knowing Michael Seid for many, many years
and there is no human being on the planet with more knowledge about fran-
chising than Michael. I have read his publications over and over again — and
each time I learn something new that helps me grow my business. Anyone
who makes his or her living in the “franchising world” is doing himself or her-
self a gross injustice by not making the time or effort to read this book.”
— Sidney Feltenstein, CFE
Chairman, Sagittarius Brands
Captain D’s Seafood and Del Taco
Past Chairman, International Franchise Association
“Franchising For Dummies, 2nd Edition, is the most important book
prospective franchisees and those interested in becoming franchisors
should read. We routinely turn to Michael Seid & Associaties (MSA) to per-
form critical assignments for our clients — including such industry lead-
ers as Pizza Hut, 7-Eleven, Arby’s, and The Miss Universe Organization —
and in this book you get what you need to know straight from the nation’s
leading consulting expert.”
— David Kaufmann
Senior Partner
Kaufmann, Feiner, Yamin, Gildin & Robbins LLP
New York
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“At every Wing Zone Discovery Day, our prospective franchisees receive
two disclosure documents. The first is the Uniform Franchise Offering
Circular, as prescribed by law and the second is Franchising For
Dummies, 2nd Edition. There is no easier way to translate legalese into
layman’s English, than placing these two documents side by side.”
— Stan Friedman, CFE
Executive Vice President, Wing Zone
“Michael brings insight and a wealth of practical experience to Franchising
For Dummies, 2nd Edition. I have worked for many years with Michael,
and his expertise has made him the leading consultant in franchising and
invariably our clients’ first choice as an advisor.”
— Arthur L. Pressman
Co-Chair, Franchise and Distribution Practice Team
Nixon Peabody LLP, Boston, MA
“I have had the privilege of working with Michael Seid for many years in
support of franchising at the International Franchise Association. Michael
Seid and Dave Thomas have penned a must-read for anyone interested
in creating a successful franchise system or becoming a franchisee.
Franchisees and franchisors alike owe a debt of gratitude to Michael and
Dave for this fine work.”
— James H. “Jim” Amos Jr., CFE
Chairman Emeritus, MBE/UPS
Chairman of SONA MED Spa
Past Chairman, International Franchise Association
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Franchising
FOR
‰
DUMmIES
2ND EDITION
by Michael Seid and Dave Thomas
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®
Franchising For Dummies , 2nd Edition
Published by
Wiley Publishing, Inc.
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www.wiley.com
Copyright © 2006 by Wiley Publishing, Inc., Indianapolis, Indiana
Published simultaneously in Canada
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About the Authors
Michael H. Seid,
Founder and Managing Director, Michael H. Seid & Associates
Michael Seid (West Hartford, CT) is founder and Managing Director of
Michael H. Seid & Associates (MSA), the nation’s leading consulting firm spe-
cializing in franchising and other methods of distribution. At the age of six,
Michael began to work in his family’s business, Ruth and Dave’s in Brooklyn,
NY, and traces his success as a businessperson to the lessons taught to him
by his parents. From working with his parents, his brother (Mark), and his
sister (Carol), he learned the lifelong meaning of quality, consistency, entre-
preneurship, ethics, fair play, and respect for the customer.
During his 25+ years in franchising, Michael has been a Senior Operations and
Financial Executive or Consultant for companies within the franchise, retail,
hospitality, restaurant, and service industries. He has also been a franchisee.
Michael is the past Chairman of the International Franchise Association (IFA)
Supplier Forum, a former member of the IFA’s Executive Committee, and the
first supplier ever directly elected to the IFA’s Board of Directors. Michael is a
CFE (Certified Franchise Executive) and a very nonpracticing CPA.
MSA’s clients are diverse, and Michael routinely works with large multina-
tional Fortune 10 companies as well as small emerging businesses. MSA
assists emerging franchisors in the design and development of their franchise
systems and with established franchisors and other companies in the devel-
opment of their tactical planning for domestic and international expansion
and support. MSA also provides headquarters and field support systems,
manuals and training programs, marketing and expansion strategies, fran-
chise relations, crisis management, expert witnesses, litigation support, and
the strategic restructuring of established franchise systems. Michael has
been the backup servicer for several of the nation’s largest transactions
related to royalty securitization for franchisors.
Michael is a noted author of numerous articles on franchising, an oft-quoted
expert in the field, and a frequent lecturer on the subject of franchising.
Michael is married to his wife of 30 years, Susan, and has two children,
Rachel and Andrew. For more information on the services offered by MSA,
including speaking or consulting services, call 860-523-4257. Michael’s e-mail
address is
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Dave Thomas,
Late Founder of Wendy’s International
Dave Thomas began his lifelong career in the restaurant industry at the age
of 12, working the counter at the Regas Restaurant in Knoxville, TN. There, he
fell in love with the restaurant business and learned that he could be any-
thing he wanted to be if he worked hard and had a burning desire to succeed.
Dave passed away in 2002.
Dave was a franchisee of Kentucky Fried Chicken (KFC) until 1968, when at
the age of 35 the restaurants were sold back to KFC and Dave became a mil-
lionaire. In 1969, Dave opened the first Wendy’s Old Fashioned Hamburgers
restaurant in downtown Columbus, Ohio. By 1973, Dave began franchising
Wendy’s, and today, more than 6,700 Wendy’s restaurants dot the globe.
In 1989, Dave agreed to appear in a few Wendy’s commercials. He appeared in
more than 800 commercials during the campaign’s 13-year run, and (admit-
tedly) rarely said his lines correctly in one take. He was one of the nation’s
most recognizable television spokesmen. If dropping out of high school was
Dave’s biggest mistake, it led to one of his greatest accomplishments. In 1993,
45 years after leaving school, Dave earned his GED certificate and received his
high school diploma from Coconut Creek High School in Ft. Lauderdale. He
was voted Most Likely to Succeed by the graduating class, and attended the
prom with his wife Lorraine, where they were named Prom King and Queen.
Dave always believed in giving back to the community. He was a long-time
supporter of a variety of children’s charities, but the cause closest to his heart
was adoption. As an adopted child, Dave knew the importance of a permanent
home and family. Dave spoke before Congress and participated in several
adoption celebrations at the White House. In 1992, Dave established the Dave
Thomas Foundation for Adoption, donating speakers’ fees and profits from
sales of his books to adoption causes. He accomplished a great deal, but he
considered his family — Lorraine, five children, and 15 grandchildren — his
greatest accomplishment. For more information about Dave Thomas and
Wendy’s, visit the Web site at www.wendys.com.
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Dedication
From Lorraine Thomas and the Thomas Family,
in Memory of Dave:
When Dave Thomas passed away in 2002, he left behind several important
legacies: his family, his adoption foundation, and Wendy’s Old Fashioned
Hamburgers, the company he founded and nurtured into the world-class fran-
chise organization it is today.
Dave was the patriarch of the Wendy’s family, and we are committed to con-
tinuing Dave’s vision and upholding his standards for quality, service, and
cleanliness. The values Dave used to build the company are deeply rooted in
our culture. Simply said, Dave’s values are Wendy’s values, and we are dedi-
cated to maintaining these values in all we do.
From Michael:
This book is dedicated to my parents — Ruth and David Seid. It is from them
that I began my business education at the age of 6 and from where I learned
the lessons of hard work, integrity, and compassion. Their wisdom has been
part of every aspect of my life, and I am forever in their debt for their contin-
ued guidance, support, and love.
This book is also dedicated to my wife, Susan, and our children, Rachel and
Andrew. They are what make life perfect. Rachel and Andrew, you are my
inspiration, and you have exceeded every expectation we as parents have
had for you. It is through you that I know that God has blessed me beyond
imagination.
To my three cousins — Alan and Debbie Klein, franchisees for Maaco, and
Gloria Halpern, the mother of a franchise player. I miss you every day since
the accident and know that you rest with the angels.
To the franchisors and franchisees who drive this innovative engine of small
business growth and from whom I have learned my craft — I wish you contin-
ued prosperity. And finally, to the members and leadership of the International
Franchise Association. It is largely because of the IFA that franchising has
become the preeminent method for people to achieve their goal of economic
independence in an environment that is safe and well respected worldwide.
Editor’s Note:
Michael Seid will donate all the proceeds from the sale of this book to the
Dave Thomas Foundation for Adoption, which generates awareness for the
thousands of children waiting for a permanent home and loving family of
their own.
