Facing bankruptcy can be a terrifying experience for a franchisee or small business owner. But it’s not uncommon – and it’s not hopeless either. Not everyone comes back from the brink, but Jeff McKeown is one entrepreneur who did. After four years in the staffing industry, he decided to open his own Express Personnel franchise in Racine, Wis. in 2000 at the age of 26.

In order to put the required $28,000 down, McKeown and his wife borrowed $15,000 and cashed out their 401(k)s and combined savings accounts to come up with the difference. Eager to get his business off the ground, McKeown said he accepted any and all clients, even those with bad credit and iffy documentation. He also felt that to compete, he needed to have the lowest price in town so he kept very small margins.

“Many clients did not pay their bills and several declared bankruptcy with huge payments to me outstanding,” McKeown explained.

By 2003 he owed the franchisor $120,000 and had maxed out all of his credit cards. Express Personnel’s corporate office even sent McKeown a 10-day letter that said the company planned take back the franchise.

That’s when he realized he was in trouble, McKeown said. So with the help of a consultant, he fired 30 percent of his customers, raised prices, and established minimum gross margins and strict credit terms. The business began to grow and by July 2006 he had paid off the majority of his debt. Last year, McKeown says he earned about $160,000 to $170,000 and is expecting to net $400,000 to $500,000 in 2007.

Climbing out of debt

If a franchisee or small business owner is nearing bankruptcy then “either their revenue is short or their expenses are too darn high, but usually it’s both,” according to Jeff Elgin, CEO of Minn.-based FranChoice, a franchise consulting firm.

Elgin suggests taking a good hard look at the expenses for starters, and making sure that all of them are absolutely necessary. “Take away the credit cards,” he said.

For franchisees, “usually, the fundamental issue is that they’re not executing the system,” Elgin said. And if it’s a good franchise company, then it has a proven and reliable system. “If you execute it, you will succeed,” he says. People just need to get “back to the basics of blocking and tackling.”

Indeed, many franchisors have consultants on staff tasked with helping franchisees grow their businesses.

“I thought I knew it all,” McKeown said. He now advises other young entrepreneurs to find a mentor or expert who can offer support and business advice.

By Jessica Dickler, CNNMoney.com staff writer

How to beat bankruptcy is a post from: Top Business Opportunities

Here are three tips for those seeking loans to fund a franchise purchase.

1. Get to know your banker.
2. Find out if an expedited approval process is possible.
3. Don’t give up after one rejection.

Read complete article on startupjournal.com

Three Tips for Financing Your Franchise Purchase is a post from: Top Business Opportunities

The items that they should review include:

1. That the Uniform Franchise Offering Circular (UFOC) provides the required disclosure including format and content and complies with FTC regulations.
2. If the Franchisor is selling from or into a franchise registration state that it is registered or has filed in order to offer franchises.
3. That key commitments or promises made by the franchisor are reflected in the franchise agreement. Specific sections, to include Franchisor Obligations, should include these items.
4. That the franchise agreement does not contain any onerous provisions for the franchisee. An example would be a non-compete provision that exceeds franchisee obligations that have been struck down by the courts.
5. The financial statements of the franchisor demonstrate the ability to service and support its franchisees.
6. Any negotiated items between the franchisee and Franchisor are properly documented.

In today’s world of virtually unlimited information prospective franchisees need to access competent franchise advice. Performing a complete and thorough due diligence on the franchise opportunity and franchisor is the most effective way to protect your investment and minimize your risks.

franchisetrade.com

Franchisees Proceed with Caution is a post from: Top Business Opportunities

They run a pooper scooper business. Let’s be real clear about this: Their company sends employees out into yards across communities to pick up dog poop.

“When we first started, ‘disbelief’ would be the way to put it,” says Jacob, “disbelief bordering on pity.” When he told his employer he was quitting his job to run his pooper scooper business full time, she told him, “If you need to come back, just let me know.” Susan’s mother was at first in denial that her daughter was planning on marrying a man whose future lay in dog poop.

The D’Aniellos have been so successful, they now have seven employees and five franchises. Their franchise fee is $20,000, and in case you’re wondering what you get for that, DoodyCalls provides computer software and call-center services as well as marketing and PR help, and everything else you’d expect to get with a franchise. Besides actually finding five people to sign on as franchisees, what’s odder still is, they aren’t alone. Poop scooping is a growing business trend, from Pet Butler and its 42 U.S. franchises to a teenager in the Seattle area who runs a part-time service called TurdsbytheYard.com.

Nature Calls–And They Clean It Up is a post from: Top Business Opportunities