Franchised industries represent a large portion of the modern economy. Franchises are the dominant form of business organization in several major sectors of the US economy, and global brands and business practices now extend some franchises across North America, South America, Europe, and Asia.

The franchise form of business involves a handful of key elements, which appear in various forms depending on the industry and business. These key elements include the use of a trademark or brand, payment of a fee for the use of the trademark, and some control over the franchisee’s business operations by the franchisor.

Services for Franchised Industries

• Valuation of Franchises
  
  The value of a business in a franchised industry is not determined solely by its income, or its assets. The franchise, market, and other characteristics can often be more important than the past accounting income. AEG has provided assistance to business persons that are interested in buying or selling a franchise.  We understand the industry structure and the underlying economic market, our valuations are much more realistic than those based primarily on accounting statements or simple rules-of-thumb.
• Acquisition Strategy
  
  AEG can assist franchisees and franchisors in selecting the best markets in which to seek an acquisition, as well as analyze the benefits of acquiring specific firms. The structure of the industry, and the strength of the franchise, are elements that are often as important for strategic acquisitions as the revenue of the acquisition target.
• Expert Testimony and Reports
  
  Obligations between franchisors and franchisees are created by franchise agreements, state and federal laws, or both. Termination of these agreements, or breaches of them, can cause damages to one or both parties. AEG has estimated commercial damages in such cases, and provided expert testimony on damages in both federal and state courts, as well as the international court of claims. (See our expert testimony page for more information on retaining us as experts.)
• Location Analysis and Site Selection
  
  These analyses involve a close study of market and land attributes, including visibility, accessibility, transportation networks, demographics and socio-economics, supply and demand, and franchise requirements. We carefully evaluate these factors, along with a client’s site requirements, and identify potential sites for the location or relocation of your franchised business.
• Labor Market Analyses and Compensation Surveys
  
  Our labor market and compensation assessments analyze and identify employment and compensation trends for any occupation and industry, in any geographic market. These analyses provide franchised businesses with real market data, helping you make informed hiring and compensation decisions.
• Retail and Distribution Network Analysis 
  
  We help franchisees and franchisors maximize their potential based on our expertise in retail economics and distribution networks.  We analyze sales performance, sales distance relationships, and market competition to help franchised businesses achieve optimal sales performance within their current network of stores, and to identify opportunities to restructure their network of stores to better fit the market.
• Market and Trade Area Analysis 
  
  We apply our extensive experience and a Geographic Information System (GIS) to provide in-depth analyses of your market area. We start with a careful understanding of your business and customer base, and provide current and forecasted demographic and socio-economic data, competitor analyses, demand forecasts, target market identification, sales performance assessments, and market strategies to help you identify market opportunities. For a more basic and low cost option, we also offer Market Snapshots Reports.

Thorough Understanding of Franchised Industries

A thorough understanding of the franchise structure is essential to providing consulting services to businesses in industries where franchising is common. Anderson Economic Group has extensive experience in franchised industries, including alcoholic beverages (beer, wine, and spirits); hospitality and travel (including rental car, hotels, and restaurant); automobile dealerships; motorcycle dealerships; and medical testing.

The quality and credibility of our work is reflected in the diversity of clients, as well as in published works authored by leaders of our consulting practice. We have been retained by both franchisors and franchisees in multiple industries. For example, in the alcoholic beverage industry, we have done valuation and damages work for all three tiers, multiple states, involving beer, wine, and spirits.  In the automotive industry, our past clients include all the domestic OEM’s, a number of tier I suppliers, and auto dealers and their associations representing both import and domestic brands.

 Expertise Reflected in Published Work

A number of Anderson Economic Group experts have authored or co-authored published works on the topic of valuation and damages for franchised industries. These works include the chapter in the book Developments in Litigation Economics (Elsevier), multiple sections in the book Business Economics & Finance (CRC Press), and the monograph “Valuation and Damages for Franchised Industries.”(Please see the Publications section on our website for information on purchasing these books.)