Intro to Franchising IG - International Franchise Association

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Things you want to see on a franchisor’s balance sheet: ◆ increasing assets ◆ increasing stockholders’ equity ◆ more cash than debt ◆ amount of current debt < (less than) 1/2 of the total assets ◆ amount of current debt < 1/3 of the stockholders’ equity The Income Statement An income statement reports a company’s profit or loss. It shows a company’s income, expense and net income—also known as the “bottom line” or earnings. Other names for an income statement include: ◆ Profit and Loss Statement ◆ Statement of Income ◆ Statement of Operation ◆ Statement of Earnings ◆ Results of Operations ◆ Statement of Consolidated Income Income statement categories include: ◆ revenues ◆ costs and expenses: cost of sales, selling, general administrative, interest expenses ◆ income before taxes ◆ provision for income taxes ◆ net income (earnings) ◆ net income (earnings) per share 28 An Introduction To Franchising THE IFA EDUCATIONAL FOUNDATION
SAMPLE INCOME STATEMENT ABC SLEEPWEAR Income Statement January, 2000 SALES/REVENUES $2,670 COST OF GOODS 1,776 Merchandise 1,155 Purchases 610 Freight 11 GROSS PROFIT 894 OPERATING COSTS & EXPENSES 544 Fixed Insurance 26 Rent 100 Salaries 310 Utilities 42 Variable Advertising 24 Dues 4 Telephone 24 Office Supplies 14 PROFIT (INCOME) Before Taxes 350 TAXES (30%) 105 NET PROFIT (NET INCOME) $245 (“The Bottom Line”) THE IFA EDUCATIONAL FOUNDATION An Introduction To Franchising 29
Page 1 and 2: An Introduction to Franchising IFA
Page 3 and 4: An Introduction to Franchising IFA
Page 5 and 6: Chapter 1: An Introduction To Franc
Page 7 and 8: Restaurants KFC McDonald’s Pizza
Page 9 and 10: WHAT ARE THE ALTERNATIVES TO FRANCH
Page 11 and 12: Disadvantages: ✔ The franchisee i
Page 13 and 14: UNIT 1: AN INTRODUCTION TO FRANCHIS
Page 15 and 16: Chapter 2: Beginning Your Search Wh
Page 17 and 18: What Business Should You Start? “
Page 19 and 20: Determine If You Can Make Enough Mo
Page 21 and 22: ✔ Carefully study and obtain prof
Page 23 and 24: UNIT 2: BEGINNING YOUR SEARCH WORKS
Page 25 and 26: Chapter 3: Navigating the Paper Tra
Page 27 and 28: ✔ Item 2: Business experience. Th
Page 29 and 30: ✔ Be sure you know what services
Page 31: THE IFA EDUCATIONAL FOUNDATION SAMP
Page 35 and 36: UNIT 3: NAVIGATING THE PAPER TRAIL
Page 37 and 38: Chapter 4: Evaluating a Franchise--
Page 39 and 40: About training: ✔ What are the lo
Page 41 and 42: ✔ Are the manuals updated on a re
Page 43 and 44: Entrepreneurial self-assessment: St
Page 45 and 46: Do I Have What It Takes To Be A Fra
Page 47 and 48: ■ Does the franchisor staff atten
Page 49 and 50: ✔ Watch the details. ■ Success
Page 51 and 52: Chapter 5: Writing A Business Plan
Page 53 and 54: III. WHAT DOES A BUSINESS PLAN LOOK
Page 55 and 56: ✔ Summarize the entire Plan ✔ B
Page 57 and 58: 5. Establish a marketing budget. If
Page 59 and 60: REVIEW QUIZ Match term on left with

Intro to Franchising IG - International Franchise Association

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