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Jason Moore
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Barry Katz
Vice President, SBA Lending Community Bank


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Tafa Jefferson
CEO Amada Senior Care


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Kitty Meyers
Owner, Synergy HomeCare Inland Empire


“If there are Buyers out there, the CrossRoads process will find them. They did for my business.”

Dan Goodman
CEO, Eilatan, Inc.


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Jack Winn
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“If you are looking to sell your business, Vasilis Georgiou is the choice: The right knowledge and temperament that get results”

Nayda Poblete
President, Home Instead Costa Mesa


“Very efficient and detail oriented approach. CrossRoads made the transaction smooth and handled every step.”

Lolita L. Cruz
Owner, Comfort Keepers Laguna Niguel


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“Smooth sales process and transition. CrossRoads’ extensive knowledge and experience was a great help!”

Jim and Yuko Fletcher
Owners, Home Helpers Senior Care, Laguna Hills, CA


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Kelly Dunn & Nancy Bever
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President, Carpet Club

Articles

Seniors Find Entrepreneurship in Franchising

Author: Vasilis Georgiou CBI, M&AMI, CBB, MBA, CIRM

President of CrossRoads Business Brokers, Inc./Franchise Consultant at FranChoice

The usual motivators for owning a franchise also apply to the older population. Desire for independence, running your own show, and financial freedom entices millions of seniors and retirees to seek franchise ownership. According to Franchise Business Review, older Americans are becoming a fast-growing segment of those buying franchises. The percentage of people 55 and over who are franchise owners has risen from 20 percent in 2007 to 28 percent recentlya 40 percent increase. Franchise operations not only satisfies the desire to run a business, but it also provides a means for doing it easier than starting from scratch.

Older Americans feel more of a need to find a safer path for controlling their own destiny, a path that doesn’t feel that they are doing it alone, but that has an established infrastructure and support mechanism backing them up. Franchise expos seem to attract higher and higher percentages of attendees 51 and older. Why such an interest from this growing aging population? The changing economic environment drives the fear of loosing ones job and not being able to replace it, whereas the ones who already lost their lucrative positions can’t seem to be able to replace them. Outplaced or soon-to-be outplaced executives with significant savings looking to replace a six-figure income are an increasing percentage of franchise candidates.

Franchise opportunities often represent more of the traditional types of businesses, a far cry from the next technology/social media whiz job, and easier for older Americans to relate to. This aging demographic group typically has the following profile characteristics:

  • Managerial or executive experience, managing operations and employees
  • Substantial assets in the form of retirement savings, 401Ks, and home equity
  • More interested in reasonable working hours and a balanced approach to work or business ownership
  • Making a difference in their communities or in people’s lives

While comparing the various franchise business models out there, it seems that retail food would be the first choice for seniors or retirees. It offers a more reactive type of sales involvement, relies more on how well employees are managed, and offers a path to multi-unit expansion. It also allows more of a community feeling where clients visit and have the opportunity to interact.

Interestingly though, this age group also seem to be moving beyond traditional fast-food franchises to service-based businesses. The reason for this is that those service-based models require less up-front investment, but also offer more opportunity to affect people’s lives, even though they demand a more proactive sales involvement and tend to take longer to reach profitability. As an example, the Home Care franchise model appears to be one of the more attractive ones to the older generation demographic. It falls in the business to business and business to consumer service quadrant, with less money up front compared to retail, scalability, and an ability to have a positive social impact.

Another interesting behavior our senior and retiree demographic seem to demonstrate is their overall approach to how they view the business. They seem to have more of a build-and-keep attitude, looking at their investment as something that can maintain them through their later years. This is perhaps because they view it as something that will last until they really want to exit the workforce, or something they will pass on to their kids and grandkids. Either way, Franchisors of all persuasions are just thrilled to have this demographic knocking at their door.

Read Published Article at: http://www.bizquest.com/resource/seniors_find_entrepreneurship_in_franchising-318.html


Options for Retirees to Finance the Purchase of a Franchise

Author: Vasilis Georgiou CBI, M&AMI, CBB, MBA, CIRM

President of CrossRoads Business Brokers, Inc./Franchise Consultant at FranChoice

There is an interesting trend in the franchising world where more and more retirees are showing increasing activity in buying franchises. The economic and work environment realities after the economic crisis, have forced many folks of the baby boomer generation to take matters into their own hands, so to speak. They are looking for ways to be masters of their own destiny through business ownership, but they want to do it in a measured, deliberate way that minimizes the risk as much as possible.

Starting a business is inherently risky, and there isn’t such a thing as complete certainty of success. For a retiree or a baby boomer, that gives even more reasons for a pause for thought because time is not a luxury they can afford. That is why many are turning to the franchising model of business ownership where not only they can have access to well-publicized and regulated information about the performance of the system as a whole, but also have the opportunity to validate first-hand through interactions with existing franchisees.

Once a decision is made to buy a franchise that best fits individual aspirations, skills, and talents the question comes up as to the best financing approach that leverages existing assets, and does not deplete all capital, just in case it will be needed to sustain a longer launch effort. Many options exist, and the purpose of this article is to highlight them:

1. Retirement Funds and/or Savings
One inherent advantage retirees typically have is that after many years in various careers in industry, they have been able to accumulate some amount of retirement funds. There is a way for retirees to use these retirement funds to finance a franchise (or any business), tax free. Whereas in traditional borrowing you have to go through a rigorous and lengthy application process, leveraging retirement funds is typically faster and more straightforward. There are some benefits in this approach compared to other available options (Always consult with an accountant and a lawyer to ensure that your financial transaction is in complete compliance with law provisions):

  • Limits debt and enhances cash flow in the critical start-up phase of the business. Thus, resulting in a better chance your business will break even faster, and generate profits sooner
  • Low fees
  • As your business gains momentum and grows, your IRA will grow as well. Best part about it, it will grow tax free
  • More flexibility in case traditional borrowing needs to be in the mix for a larger investment. Funds may be used as the personal equity injection for SBA or conventional loans
  • Utilizing these funds to capitalize your business allows you to invest in yourself
  • Allows for tax-deferred retirement savings options in the future
  • Begin paying yourself a salary during the start-up phase

This is how it works: One specific law, The Employee Retirement Income Security Act(ERISA), allows a variety of retirement savings accounts to be utilized as a vehicle for investing in various options, including buying a franchise. The chosen corporate vehicle is a “C corporation which you have to form, which then can be eligible to create its own 401k program. You can roll over (tax free) existing retirement funds into your new corporation’s 401(k) program. The new corporation’s 401(k) program can invest in the stock of the new “C” corporation which can then use the proceeds to buy the franchise. You can only use the funds in your 401(k) account after you leave the company where it originated.

2. *Small Business Administration (SBA)
There are several types of loans available through the SBA. The most commonly used for the purchase of a franchise is as follows:

  • General Small Business Loans: 7(a)
  • Real Estate and Equipment Loans: CDC/504

As described on the SBA website (www.SBA.gov), the 7(a) Loan Program, which is the SBA’s most common loan program, provides loans to businesses with requirements of eligibility based on specific aspects of the business and its principals. In other words, the key factors of eligibility are based on what the business does to receive its income, the qualifications and backgrounds of its owners, as well as where the business operates.

On the other hand, a 504 loan could be suitable for franchises that involve retail locations, or investment in equipment and machinery. Specifically, a 504 program can be used for:

  • The purchase of land, including existing buildings
  • The purchase of improvements, including grading, street improvements, utilities, parking lots and landscaping
  • The construction of new facilities or modernizing, renovating or converting existing facilities
  • The purchase of long-term machinery and equipment

A 504 loan cannot be used for:

  • Working capital or inventory
  • Consolidating, repaying or refinancing debt
  • Speculation or investment in rental real estate

The SBA generally does not specify what businesses are eligible. Rather, the agency outlines what businesses are not eligible. However, there are some universally applicable requirements. To be eligible for assistance, businesses must:

  • Operate for profit
  • Be small, as defined by the SBA
  • Be engaged in, or propose to do business in, the United States or its possessions
  • Have reasonable invested equity
  • Use alternative financial resources, including personal assets, before seeking financial assistance
  • Be able to demonstrate a need for the loan proceeds
  • Use the funds for a sound business purpose
  • Not be delinquent on any existing debt obligations to the U.S. government

*Source: www.SBA.gov

3. Securities-Backed Financing
Another inherent advantage retirees typically have in funding a new franchise is that after many years in active investing, they have been able to accumulate some amount of stocks and bonds. They are then able to utilize qualified securities (i.e. stocks, bonds, mutual funds, U.S. Treasuries) to obtain a low interest line of credit.

There are advantages to using securities instead of traditional borrowing:

  • Pay interest only on the amount used
  • Loan-to-Value of Approved Assets from 70%-90%
  • Get working capital to start or expand your business
  • Supplement other capitalization plans
  • Not credit or income based

4. Home Equity
The housing market has recovered well recently from the worst downturn in recent years. A home equity line of credit (HELOC) can be used to fund a new business venture. You should carefully check interest rates and repayment terms.

5. Family and Friends
That is always a tricky approach. There is natural hesitation to mix family and friends with business. What if the whole franchise thing doesn’t go well? Where is that going to do to the relationship? Those concerns are well justified. However, transparency and well written Agreements that spell out the financial and operational responsibilities of each investor, together with a clear disclaimer of the risks associated with new ventures, can mitigate some of the downside to leveraging this kind of resource.

6. Franchisor
Franchisors want to enable new franchisees to start a location. Especially if the franchisee candidate is qualified and shows promise of success. After all, franchisors have a long term royalty incentive in placing good franchisees in the system even if they take less cash up front, and have to finance some of the cost. They look at it as a win-win. The royalty annuity can be substantially more in the long term. That is why some franchisors offer programs that partially finance the upfront fees, especially if equipment assets are involved.

Read Published Article at: http://www.bizquest.com/resource/options_for_retirees_to_finance_the_purchase_of_a_-317.html


The Unspoken Selection Criteria for a Franchise System

The not-so-often considered question: What can I count on when it’s time to exit?

Author: Vasilis Georgiou CBI, M&AMI, CBB, MBA, CIRM

President of CrossRoads Business Brokers, Inc./Franchise Consultant at FranChoice

As in any other type of business ownership, you have to look at franchise ownership in its full cycle. At the end of the day, you are not only getting in it for the freedom and control you can gain, but also to build an asset that will continue appreciating with time. Of course, appreciation means nothing without the ability to monetize it in the open market.

The exercise of putting any business up for sale it’s an emotionally draining exercise, often accompanied with lots of frustration. Buyers, serious or not, demand attention that will often take you away from your day to day activities and can be disruptive to the business. Of course, a qualified Business Broker can mitigate a lot of that. However, a Broker is only as good in producing results as the market dictates. That’s where the Franchise System you are part of can make a big difference.

Not all Franchisors are created equal. The most important criteria to look for in a Franchisor when it comes to your exit strategy, after you determine that there is a good fit to begin with, has to do with the simple answers to the following questions: (a) What is the Franchisor System’s track record for resales? (b) What is the typical Multiple of Discretionary Earnings or EBITDA for the business? (c) Does the Franchisor have the people and mechanisms in place to help the Franchisee effectively exit the system when he/she chooses to do so?

Read Full Article at: http://www.bizquest.com/franchise-for-sale/articles/The-Unspoken-Selection-Criteria-For-A-Franchise-System/


The Semi-Absentee Franchise Owner: Myth or Reality

When owning a franchise doesn’t need to come at the cost of your current job

Author: Vasilis Georgiou CBI, M&AMI, CBB, MBA, CIRM

President of CrossRoads Business Brokers, Inc./Franchise Consultant at FranChoice

Leaving behind the relative certainty of a corporate job that offers income security, health benefits, and 401K matching contributions is a very hard decision. There is real risk in putting your livelihood on the line. But what if there is a way to do both? What if there was a way to pursue your entrepreneurial dream of building a business as an asset that you control, while maintaining your current cash flow via a job.

The answer lies in the franchise business model. In the article “Buying a Franchise: It’s all about you” I wrote on 1/17/14 on Bizquest.com, I identified various business categories and their characteristics. More so than the other business categories, two particular business categories lend themselves to a semi-absentee approach: Retail and Sophisticated Retail.

Read Full Article at: https://www.findafranchise.com/articles/The-Semi-Absentee-Franchise-Owner-Myth-Or-Reality/

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Investing in a Franchise: It’s all about you

Author: Vasilis Georgiou CBI, M&AMI, CBB, MBA, CIRM

President of CrossRoads Business Brokers, Inc./Franchise Consultant at FranChoice

I have been fortunate enough in my career to be exposed to business and franchise ownership from many different angles. Even though success in owning a franchise is influenced by many factors, there are some fundamental ingredients that matter.

Buying the right franchise is not about how much you like its product or service and is not about being first to market in your geography. It is also not about following the hottest trend based on the latest statistic, choosing the franchise with the best track record, or even about following someone else’s lead who was successful doing it. It’s about finding a business that fits your skills, lifestyle, and goals & objectives. It’s about reducing business risk by matching your skills and abilities to the optimum franchise opportunity for YOU, which would result in the best long term success.

Read Full Article at:
http://www.bizquest.com/franchise-for-sale/articles/Buying-A-Franchise-Its-All-About-You/

Articles About Owning, Buying or Running a Business or Franchise

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Calculated Risk: Becoming a Franchise Entrepreneur

Author: Vasilis Georgiou CBI, M&AMI, CBB, MBA, CIRM

President of CrossRoads Business Brokers, Inc./Franchise Consultant at FranChoice

Becoming an entrepreneur is probably one of the most nerve-wracking endeavors any of us can undertake. Especially if it means leaving behind the relative certainty of a Corporate job that offers a regular paycheck, health benefits, and even that wonderful 401K matching contribution.

The fear of taking the leap into entrepreneurship is natural. There is real risk in putting your livelihood on the line, especially when you have family members depended on you to provide for their future. It is that step into the unknown that causes that fear, and it is the aversion to failure that fuels it. Yet, most of the wealth in America is not inherited wealth. It’s wealth built by folks who have taken that leap, who have believed that they can be their own boss, and in the process, have reinvented themselves by taking control of their destiny and going places they never imagined possible.

There is a countermeasure to that fear, and it has to do with 4 key elements: Self-awareness, Fact-finding, Preparation, Validation.
Read full article at: http://www.findafranchise.com/articles/Calculated-Risk-Becoming-A-Franchise-Entrepreneur

Calculated Risk: Becoming a Franchise Entrepreneur

Search franchises and find franchise information and business opportunities for sale. Learn how to buy a franchise, find franchise costs & franchise fees, and other franchise info. Find franchise business opportunities at…

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Job Seekers and Franchise Options

When buying a Franchise can be a career choice

Author: Vasilis Georgiou, CBI, M&AMI, CBB, MBA, CIRM

President, CrossRoads Business Brokers, Inc./ Franchise Consultant with FranChoice

In our professional life, we really have 3 choices when it comes to making a living. Each option has its advantages and challenges:

Staying the course with a job
Staying in a job may provide the security of a paycheck, benefits, and that 401K matching contribution. But there is never real security, and at the end of the day you are building wealth for the company, not yourself.

Go it alone as an entrepreneur
Becoming an entrepreneur is liberating. You get to come up with your own idea and act on it. Be your own boss. Have control. Biggest challenge: coming up with that original idea and then finding the capital, the systems/processes, and the people to execute. While you are embedded day to day in making it grow, you also have to worry about the big picture strategy, and staying a step ahead of the competition.

Partner with success through a franchise
The biggest advantage in going with a franchise is that the Franchisor has teams of people that already developed the system and processes necessary for execution, as well as the high level strategy and direction that needs to be continuously refined. You also have a verifiable model that has been put in use successfully before. Biggest challenge: Thinking that a Franchisor will do everything for you. You still have to make it happen at the local level.

Read the full article at: http://www.bizquest.com/franchise-for-sale/articles/Job-Seekers-And-Franchise-Options/

Articles About Owning, Buying or Running a Franchises: Job Seekers and Franchise…


Looking for the Thrill Factor in a Franchise

The role of excitement when choosing a franchise that is right for you

Author: Vasilis Georgiou CBI, M&AMI, CBB, MBA, CIRM President, CrossRoads Business Brokers, Inc./ Franchise Consultant with FranChoice

One common objection that I come across when I consult with Candidates who are looking for a franchise to get into, has to do with the thrill factor as a selection criteria. In other words, Candidates often want their top choice for a franchise to be the one that “jumps out”, the one that gets them “excited”.

That is often a very misleading way to go about finding the franchise that is just right for you, the Candidate. A franchise opportunity can be very exciting, with products or services that feel “right” to your temperament and personality. It can even present extremely well when you go through the normal discovery cycle. Even if that is true, it can still be the wrong choice for you when you factor in the geographical area you will operate in, the demographic composition of that area, the competition and saturation factors, and the sustainability of the product or service offering in the long term.

As I covered in another recent article, “Buying a Franchise: It’s all about you“, buying the right franchise is not about how much you like its product or service and is not about being first to market in your geography. It is also not about following the hottest trend based on the latest statistic, choosing the franchise with the best track record, or even about following someone else’s lead who was successful doing it. It’s about finding a business that fits your skills, lifestyle, and goals & objectives. It’s about reducing business risk by matching your skills and abilities to the optimum franchise opportunity for YOU, which would result in the best long term success.

Read the full article at: http://www.bizquest.com/franchise-for-sale/articles/Looking-For-The-Thrill-Factor-In-A-Franchise/


Why Pay For A Franchise When I Can Start My Own

The continuing saga of royalty payments and why it makes sense

Author: Vasilis Georgiou CBI, M&AMI, CBB, MBA, CIRM President, CrossRoads Business Brokers, Inc./ Franchise Consultant with FranChoice

One common objection that I come across when I consult with Candidates who are looking for a franchise to get into, has to do with paying ongoing royalties even after the business is up and running successfully. A lot of folks have a psychological barrier to the idea of continuing to pay royalties even after they feel the Franchisors usefulness is no more.

Not all Franchisors are created equal. As I covered in another recent article, “Calculated Risk: Becoming a Franchise Entrepreneur”, when looking for the right franchise to buy you have the ability to do a deliberate, fact-finding investigation and validation that can lead you to a Franchisor that does it right. A Franchisor that does it right is a Franchisor that continuously and proactively earns his royalties for as long as you own the franchise.

When my wife and I got into owning a Home Care franchise in 2007, we had no prior experience in the industry. The Franchisor we chose provided initial comprehensive training and a turnkey package to launch the business, including all back office systems and an intranet with all needed documents and procedures. Even more important was what we were able to rely on an ongoing basis: Marketing/sales and national branding support.

The most important criteria to look for in a Franchisor after you determine that there is a good fit to begin with, has to do with the simple answer to the following question: Is my ongoing association with the Franchisor adding up to a better outcome compared to doing the same business by myself.

Read the full article at: http://www.findafranchise.com/articles/Why-Pay-For-A-Franchise-When-I-Can-Start-My-Own/

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7700 Irvine Center Drive, Suite 800
Irvine, CA 92618

Phone: 949-753-2825
Fax: 949-266-8495

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