MegaDoxBlog

Managing Change with Franchisees

2010-09-20T09:23:00.000-06:00

POINTS TO REMEMBER IN MANAGING CHANGE
    •    Change can be threatening to many people, including your Franchisees.
    •    Franchisees pay service fees partly to ensure change.
    •    Change is tolerated better when Franchisees have a say in formulating it.
    •    The bottom line in accepting change is "WIIFM" (What's in it for me?).

ACCEPTING AND IMPLEMENTING CHANGE
It is readily acknowledged in business circles that in a healthy organization, change is and will continue to be a constant. Effective Support Representatives realize this and have learned to harness the positive side of change as a powerful force to make things better. They successfully get their staff and colleagues involved in making change happen, and carefully lead them through all major changes.

But Support Representatives must also learn to deal with the Dark Side of change. For even the most necessary, logical and welcome changes can be threatening to people because they feel required to readjust their thinking and/or behaviour to the new situation. And if the negative feelings that Franchisees feel about the uncertainties associated with change are not dealt with effectively, the change itself may be thwarted.

One reason that many people feel so threatened by change in an organization is that, far too often, even though they may be the ones most affected by the decision, the have had no input in formulating it. Support Representatives themselves often may not have personally made or helped make a "change decision", yet they are required to implement it through the franchise network as successfully as possible. In such an event, you will have to be resourceful enough to build support for the required change, first within yourself, then within your Franchisees.

A SIX-STEP PROCESS FOR MANAGING CHANGE
    1.    Describe why the change is needed and be specific about what the actual changes will be.
    2.    Ask for your Franchisees' reactions.
    3.    Answer questions, clear up any misunderstandings, and acknowledge any objections.
    4.    Ask your Franchisees for suggestions on how to implement the changes smoothly.
    5.    Ask them for their support for the change.
    6.    Follow through by monitoring the changes and reinforcing the Franchisees' progress.

PLANNING QUESTIONS
Before discussing any change with a Franchisee, think through your "change strategy" by addressing the following questions:
    1.    What specific problem(s) has this change been designed to solve?
    2.    Exactly what is going to change?
    3.    How will Franchisees be affected by the change (both positively and negatively)?
    4.    What questions or objections are people likely to have regarding this change?
    5.    How can these questions and/or objections be countered?
    6.    What pitfalls might occur in the course of managing the implementation of this change?
    7.    How can these pitfalls be avoided or overcome?

In our next segment on the role of the Franchise Support Representative, we will discuss how to understand and counter resistance to change by Franchisees.

Confronting and Resolving Franchisee Issues - Rules 5 & 6

2010-09-07T11:22:00.001-06:00

In this final instalment of Confronting and Resolving Issues with Franchisees, we cover Rules 5 and 6 for reaching a solution:

5. Delegate tasks. Agree on what each person will do to improve the situation.
A positive outcome is far more certain if you and your Franchisee agree on the specific action each of you will take to improve the situation. Do this in a timely fashion, while the facts are still fresh in both of your minds. This creates "ownership" of the problem and of the solution, and enables you both to express your commitment to the issue. A clear action plan indicating how each of you will participate in the solution will avoid confusion later on.

The best policy here is to lead by example. In your own delegated task, for instance, immediately commit to specific action to improve the situation. Even if you are not responsible for the problem, you will make it easier for the Franchisee to act if you take the first step toward a solution.

6. Set a follow-up date.
Make sure you set a date by which both you and your Franchisee will have accomplished your respective responsibilities under the action plan, then meet to discuss how your solutions are working. A follow-up meeting will allow you to evaluate your progress and to readjust your plan together, wherever necessary.

CONCLUSION
In some cases, the proposed solution will not completely resolve the conflict or problem on the first try. You may decide that it's best to continue the actions until a result is achieved.

The process of bringing up and resolving issues takes both skill and patience. When the desired results are finally achieved, be sure to openly show your appreciation to the Franchisee for his/her contribution to your mutual success.

The next few instalments in the "Successful Franchising" series will cover managing change and dealing with resistance to change from Franchisees.

Rules 3 and 4 for Confronting & Resolving Issues with Franchisees

2010-08-23T08:36:00.000-06:00

Part 3 of our series on Confronting and Resolving Issues with Franchisees outlines the third and fourth rules for the Franchise Support Representative to follow:

3. Create an atmosphere in which the Franchisee feels free to share his/her view.

Acknowledge the possibility that your own information regarding a problem or issue may not be complete. A better appreciation of the complete picture will be achieved by asking the Franchisee for his/her views and input.

In addition to giving you an opportunity to get all of the information, this attitude makes the Franchisee feel that you respect his/her opinions and sincerely want to encourage their input. The result will be a solution based on complete information, which is to everyone's benefit.

Start by assuming that your own knowledge of the situation is incomplete. Invite the Franchisee to fill in the gaps, telling them that you need their perspective in order to mutually determine a solution.

Listen carefully, to gain a thorough understanding of what they have to contribute. Do not interrupt until they are finished, except to interject the occasional word of encouragement urging them to express their point of view openly and fully.

4. Discuss with the Franchisee various ways to improve the situation.

When you collectively generate a list of possible solutions before making a final decision, all parties involved have a chance to contribute their ideas. Your aim should be to create an atmosphere of trust and collaboration in which all options can be frankly discussed, and the pros and cons of each weighed.

Brainstorming can be used as a technique to generate ideas that may ultimately be combined in one comprehensive and creative solution. The processing of brainstorming is simple and can be a productive and often enjoyable experience shared with Franchisees, which helps to solidify the "team" spirit.

First, list all of the possible ways that each person can think of to improve the situation / solve the problem. Do not evaluate or criticize any of these ideas until you have completed the list. At that point, go back and review and assess all of the alternatives, eliminating some, perhaps combining others, until together you arrive at the most appropriate course of action.

Make sure the solution you develop works for everyone. It should be practical as well as fair – feasible, effective and acceptable by all staff.

Confronting and Resolving Franchisee Issues Part 2

2010-08-10T14:22:00.000-06:00

In Part 2 of our series on Confronting and Resolving Issues with Franchisees, we discuss the second rule for the Franchise Support Representative to follow:

2. Make sure the Franchisee sees the reasons why the issue needs attention, and why the situation needs to be changed or improved.

If the Franchisee does not actually feel the effects of the problem, he/she may not fully appreciate that it IS a problem, and he/she may then perceive you as overly critical and intent on stirring up trouble where none exists.

Your job as Franchise Support Representative is to make the connection between the problem and the business operations of the franchise. This will keep the issue from appearing to be a simple personality clash.

Inquire about performance and results. Instead of simply talking about activities, focus on results. Let the Franchisee in on your vision for a solution. And remember to always avoid blaming the individual and thereby alienating him or her.

Confronting and Resolving Franchisee Issues Part 1

2010-07-23T10:50:00.002-06:00

In this installment of Successful Franchising, we begin a series of detailed instructions for the Franchise Support Representative, to give the Support Representative a set of tools for confronting and resolving issues with franchisees. The first step is to define the problem and find a means to solve it.

1. Define the issue with the Franchisee, and establish what needs to be changed or improved.
Your discussion with the Franchisee should be framed from the outset by a clear definition of what the problem is. In addition to working through the immediate problem, you will be modeling a straightforward approach to dealing with conflicts for the Franchisee.

In order to define the issue at hand, describe in specific terms what you've observed and experienced. Or ask the Franchisee to begin the discussion by doing the same. He/she may need some prompting on your part through questions which elicit facts and feelings and serve to focus the discussion. A key point to remember is that the focus should remain on the issue, not on the person. Avoid sweeping statement such as "Our communication has not been very good." Explain your position tactfully, specifically, and non-aggressively.

Avoid attributing conflict to the other person's "bad attitude" or "personal style". To keep the focus off personality, track the conflict back to its roots, citing concrete and specific work activities. This approach should lead you toward a solution and away from further conflict.

The Franchise Support Representative

2010-06-30T10:45:00.000-06:00

The role of franchise support representative often includes having to deal with difficult issues with the franchisees. This installment of the Successful Franchising series explains how to confront those issues.

Working Through Difficult Issues with Franchisees
Successfully working through issues of potential conflict with Franchisees is vital. Doing so allows you to be a constructive member of the organization as well as an effective leader in your job.

The following action plan outlines some steps to take when a particularly difficult issue must be confronted with your Franchisees. This plan provides a means of tactfully handling thorny problems. It will aid you in your interactions with Franchisees and allow you to air your own concerns, as well as allowing you to listen to the concerns of the Franchisee.

Confronting Issues: The process

Define the issue with the Franchisee, establishing what needs to be improved or changed.
Make sure the Franchisee understands the reason the issue needs attention, why the situation must change or improve.
Create an atmosphere in which the Franchisee feels free to share his/her views.
Discuss ways to improve the situation.
Delegate tasks: Agree on what each person will do to improve the situation.
Set a target date for follow up of each person’s performance of the agreed tasks.

In our next entry we will delve into each phase of the "Confronting the Issues Process" and detail how to get the issues resolved in a way that creates a win-win situation for both the Franchisor and the Franchisee.

The Role of the Franchisee Support Representative

2010-06-15T15:38:00.003-06:00

In this installment of the Successful Franchising series, we examine the role of the franchisee support representative (or team manager).

Confronting and Resolving Issues with Franchisees

Facing Difficult Issues
Confronting difficult issues with franchisees is inevitable for any Franchisee Support Representative. Here are some important guidelines to remember:

Any issue that has the potential to hurt or hinder sales and/or profits is one that MUST be addressed.
The Support Representative and the franchisee should face these issues together as a team.

Dealing with Problems of Compliance
When compliance problems surface, the Support Representative’s role is to:

Help the franchisee understand that the license agreement is written for the benefit of the entire franchise system.
Explain to the franchisee that the license agreement helps protect the franchisee's investment.
Ensure that the franchisee appreciates the importance of complying with the established operating system and procedures.

Strategies To Get Franchisees Back Into Compliance

Try to identify the real issue behind a violation. Is it a means of getting attention or of voicing dissatisfaction?
Through careful questioning, enable the franchisee to realize that he/she is the one responsible for being out of compliance.
Ensure that the Franchisee understands the motivation behind the programs. Help them see the “big picture” and the “why” behind the program.
Be sure that the franchisee's staff understand the benefits of franchising, particularly the fact that all franchisees and their employees are part of the marketing system.
Educate Franchisees’ staff about marketing, what it is and how it differs from advertising.
Cite other successful franchisees as testimony of how following the operating system and programs achieves results.
Focus on helping franchisees become ever more profitable.
Establish a process for handling violations, all the way from initial contact to license default. Clearly communicate this process to franchisees when they join the system.
Tie the possibility for expansion to compliance.
Offer alternatives for leaving the system that will constitute a “win/win” situation for both the franchisee and the system.
Take a leadership role in the franchise system. Declare your belief in the franchise vision and unequivocally state your confidence about where the system is going.
Be prepared to lose even highly successful operators if this would be a benefit to the system as a whole.
Reward and reinforce those franchisees who are in compliance.
Document everything.

Our next post will focus on working through difficult issues with your franchisees.

Franchise Advisory Councils

2010-06-02T14:14:00.000-06:00

In this installment of the MegaDox.com Successful Franchising series, we look at the importance of the Franchise Advisory Council.

The Franchise Advisory Council

A key support and communication vehicle for franchisors is the Franchise Advisory Council (FAC). The council is a strategic planning body that should be used to:

forward plan the company's growth,
review new product and service offerings,
vent franchisee / franchisor issues.

A properly designed and run FAC will provide strategic, operational and franchisee relations input to the franchisor and help reduce instances of franchisee default and non-compliance. A properly designed FAC is made up of:

The CEO of the company
One other member of the company’s management team – usually the COO
Franchisees chosen by the company from all regions in which the company operates. These franchisees are the best performers who have the respect of their peers and are in compliance with the franchise agreement. The number of franchisees on the council will be dependent on the number of franchisees in the system. If you are in the initial phase of developing your franchise system, then name your first franchisee to the Council. As the system expands go to one in five, ten, fifteen, etc.
Outside parties who have a stake in the continued success of the company. These could be major suppliers, major customers, or consultants. Limit these to one from each category, e.g.:

One key customer
One major supplier
One consultant who can be either a lawyer, franchise consultant, or anyone whom the company determines may be of use both for their outside thinking but also to carry the discussion forward on a non-biased basis.

The council should meet quarterly by videoconference and at least twice a year face to face. The company pays the costs for these meetings.

The Franchise Advertising Council

The Franchise Advertising Council's responsibilities include:

Assisting the company in developing national and regional advertising and promotional programs,
Setting national standards for all advertising and promotional programs,
Monitoring compliance with and involvement in the company's charitable works.

The Council is made up of:

The head of the advertising department
One key franchisee from each region of the country. If the company operates in more than one country, a separate Council should be set up in each country.

The Council should meet quarterly by videoconference or more frequently if required.

If you have questions about franchising or if you need franchising agreements and related forms, visit MegaDox.com.

Franchisee Support

2010-05-20T14:09:00.000-06:00

In this 6th installment of MegaDox.com's Successful Franchising series, we discuss the do's and don'ts of franchisee support.

How to Handle a Default by a Franchisee

In every franchise system there will always be instances when a franchisee is in default of an operating procedure or a section of the franchise agreement. How the resolution of these defaults is handled will mean the difference between a strong franchisor-franchisee relationship or one heading for divorce.

Following the process below will help defuse the situation and strengthen the relationship.

Focus on the default, not on the franchisee or the franchisee's staff.
Review with the franchisee why the default occurred.
Discuss with the franchisee how the default can be resolved.
Discuss with the franchisee the importance of maintaining the operating standards.
Set a date for additional training for the franchisee and staff to improve their knowledge base so that standards are maintained in the future.
Document the default and its resolution in writing.
Have well developed accounting guidelines and controls.
Ensure the reporting method is simple, frequent and allows for quick feedback.
Have well defined customer service parameters that are clear, concise and achievable.
Create electronic program request forms so franchisees can email requests for assistance or approval of items like promotions, advertising and charitable donations.
Set up Franchise System Advisory Groups such as:

Franchise Advisory Council
Franchise Advertising Council.

Don'ts of Franchisee Support

Don't dictate.
Don't carry a big stick.
Don't play good cop/bad cop.
Don't threaten legal action unless you plan to carry it out.
Don't be the one to collect royalties or other receivables.
Don't promise what you can't deliver. Always under-promise and over-deliver.

Supporting the Franchisee

2010-05-05T09:02:00.000-06:00

In this segment of MegaDox.com's Successful Franchising series, we discuss the areas in which the franchisor provides support, assistance and training to franchisees.

Operational Support
The objective of operational support is to assist the franchisees in managing their franchise business efficiently and effectively so as to achieve maximum sales and profits. Especially at the outset of the relationship, franchisees require functional support from the franchisor in the areas of:

financing,
business planning,
administration / accounting,
human resource management,
marketing,
operation / customer service,
technical expertise,
measurement, feedback, benchmarking.

To ensure that the parties can achieve their goals, the franchisor must be able to provide:

Experienced staff resources
Proper support tools
Guidelines and procedures.

Experienced Staff Resources
These include:

Field representatives
The company's management team
Other franchisees' resources, including staff
Franchise consultants
Other outside consultants.

The Field Representative
The field representative acts in an advisory capacity, as a mentor to new franchisees. He/she gets to know the franchisees and encourages and supports their efforts. The field representative:

Knows the franchise system,
Knows how a franchise location should operate,
Has received prior training on:

the operational aspects of the business
interpersonal communications
team dynamics
coaching in a leadership role.

The field representative's role encompasses the following responsibilities:

Provide encouragement and mentoring.
Analyze financial statements and offer suggestions on improving profitability.
Verify that the Franchise System Standards are being followed.
Help the franchisee develop locally targeted advertising and promotion programs.
Help the franchisee evaluate the competition.
Act as the company's face to the franchisee.
Provide company PR.
Be a problem solver.
Help the franchisee with the development of its business plan by providing resources and setting time lines. Business plans are reviewed and updated on an ongoing basis, and the field representative's involvement can help avert major problems.
Initiate weekly phone calls with franchisees.

The best time for the weekly phone call is on Fridays, to review the week and answer any questions or concerns so that the franchisee is ready for the following week. DON'T assume that if franchisees don't call with questions or concerns, they haven't got any.

The tone of the weekly call should be friendly and positive, and can encompass everything from family and staff to sales.

Support Tools
The company should also use Company branded support tools such as:

franchise operating system intranet
training programs
appraisal programs
monthly emails with Company news updates
operations meetings (at least twice a year)
conventions (for franchise networks with sufficient numbers of franchisees)

Field Representative's Tools
Your field representative requires proper tools to help him/her fulfill his/her role as well. These tools are:

Company's franchise system standards
Operation manuals
Pre-opening manual and checklist
Advertising and promotional information
Regular training
Controls outlined in the franchise agreement
Company policies

Guidelines and Procedures

Provide proper training.
Location visits:

Decide how often to visit/meet.
Scheduled visits vs. surprise visits.

Keep detailed notes.
Follow up a location visit with a written record of what was discussed and which action plans were agreed to, including time lines.
Put complaint procedures in place for franchisees to air concerns and for customers to complain to the Franchise Support Center.
Know how to handle defaults.
Don't compromise the Company's standards.

· ALWAYS BE PROACTIVE AND NOT REACTIVE.

In our next instalment, we will focus on handling default and the "don'ts" of franchisee support.

The Role of the Franchisee Support Representative

2010-04-20T14:48:00.001-06:00

In this segment of MegaDox.com's Successful Franchising series, we discuss the importance of the Franchisee Support Representative in the franchisee / franchisor relationship.

The Role of the Franchisee Support Representative

The Franchisee Support Representative’s job is to interface with your franchisees in the capacity of a management consultant and trainer. In order to effectively fill that role, he/she must encompass and perform within the requirements of the following areas.

Seven Areas of Responsibility

Credibility/Trust: Build and maintain a constantly high level of trust and credibility with franchisees.
Relationship: Develop and nurture a highly positive relationship with the franchisees.
Retention: Keep the goal of franchisee retention uppermost in mind at all times.
Service: Render the highest quality service possible to the franchisees.
Availability: Be available and accessible to the franchisees at all times.
Results: Create the results of increased revenue and profitability for the franchisees.
Legal: Be aware of the legalities involved in servicing franchisees and constantly monitor and observe those legal requirements.

Four Special Tasks

Consult: Consult with the franchisee on an ongoing basis - whether in person, over the phone or via email.
Train: Conduct training courses and workshops for the franchisees and their employees as needed.
Communicate: Maintain a high level of communication with the franchisees. Keep the company informed of the status of each franchisee by completing the necessary documentation.
Acquire: Acquire the knowledge and skills necessary to effectively accomplish all job responsibilities.

Five Key Results Areas

Revenue and profitability
Operational efficiency
Customer satisfaction
Employee productivity
Management Effectiveness

Basic Principles for Support Representatives

To build constructive relationships with Franchisees and others in the organization, certain basic principles need to be followed by the Support Representatives. These principles are the foundation on which all other consulting skills are built.

Help build the self-confidence and self-esteem of others.
Always focus on the situation or behavior, never the person.
Realize that to be effective, relationships with franchisees require ongoing attention.
Constantly seek to make things better.
Set a good example.

In our next post we will discuss the operational support you should provide to franchisees and how to do this effectively.

Developing the Franchise System

2010-04-06T11:36:00.001-06:00

This is the third segment in MegaDox.com's Successful Franchising series.

To Franchise or Not to Franchise
So you have a great business concept and an operating, profitable corporate location, and you want to expand. Should you expand by opening more corporate locations or open up your concept to partners by franchising? Both expansion methods have merit but if you want to expand quickly and gain disproportionate market share the best way to expand is by franchising.

Once you have decided to expand by franchising it is important to formalize an expansion strategy, which will enable you to expand within the limits of your financial and human resources. The strategy should consider whether the company would offer:

Single unit franchises,
Multi-unit franchises,
Sub-franchise an area to an entity that has the resources to act on your behalf as sub-franchisor,
Find an Area Developer.

Each of these approaches has its own benefits and challenges so it is important to determine this format first.

Concentric Circles
Once this is done, look at the expansion strategy in terms of the areas that will be opened and their proximity to your base of operations. Generally if you are going to use the single unit franchise or multi unit franchise model, it is better to open locations in concentric circles out from your base of operations. This will enable you to provide the necessary support to the franchisees without overly taxing your financial and human resources. As locations are opened further and further away, having numerous locations closer to your base of operations will ensure that the royalties paid by the existing franchisees will more than cover the support costs of newer, more distant franchisees.

Sub-Franchisors and Area Developers
If your decision is to expand by sub-franchising or using an Area Developer, then the need to use the concentric circle approach is reduced. With sub-franchising you will be looking for an individual or group who has the financial resources and the business acumen to act as if they were the franchisor (you) within a specified geographic area.

Generally the Sub-franchisor or Area Developer takes on some of the responsibilities of the franchisor, in return for a significant portion of the initial franchise fee and ongoing royalty stream. These responsibilities include franchisee recruitment, training, location opening assistance and franchisee support. The Sub-franchisor will be a party to the franchise agreement. An Area Developer is similar to the Sub-franchisor except for the fact that typically the Area Developer is not a party to the franchise agreement.

Analyzing the Market
Before you start on your expansion make sure that you complete a detailed analysis of the markets where you want to expand. In particular, be sure to review:

Customers
Consumer buying indices
Cost of real estate
Critical mass
Units needed to support critical mass
Competition
Employment statistics
Government regulations

Pick markets where you have the greatest opportunity for dominance. Decide how this dominance will be measured.

What Now?
You’ve decided on the expansions strategy, both in terms of type of partner you want and the areas you want to expand into, and you've completed your market analysis. Now how do you find the perfect franchisee, sub-franchisor or area developer?

Come back for our next post when we will provide the nuts and bolts of the franchise recruitment process.

MegaDox.com carries a wide range of affordable Franchising Forms, which are easy to customize to fit your business needs.

The Franchisee/Franchisor Relationship

2010-03-23T10:01:00.001-06:00

This is the second instalment in the MegaDox.com series on Successful Franchising.

The key to fostering a mutually profitable franchise relationship is understanding the key principals of franchising. Franchising is about:

Economic performance
Getting and keeping customers
Having satisfied customers
Dominating markets
Gaining disproportionate market share.

To accomplish this, the franchisor brings the following elements to the relationship:

Brand
Operating system
Administrative and field support
Market share.

In return, the franchisee provides time, money and motivation.

The franchisee pays an initial franchise fee, which covers:

Trademark registration and protection
Franchisee selection
Initial training
Opening assistance.

The franchisee also pays an ongoing royalty fee, which is a portion of the revenue generated during the prior reporting period. The rationale behind the ongoing royalty is that:

The franchisor's brand name brought in the customer.
The franchisor's operating system brought the customer back again.
The franchisor's support services helped the franchisee use the brand and operating system to get and keep customers.

The main point to understand, however, is that the franchisee pays the initial franchise fee and ongoing royalty for the right to use the brand, operating system and support. The franchisee does not "buy" anything.

For better clarity, let's compare the franchise license to a driver's license. In both cases:

The user pays a license fee
The license expires at the end of the term.
The license can be revoked.
The user must comply with certain conditions.
The user must follow the manual.
The user cannot sell or transfer the license.
The user doesn't own the license.
The user can be in default.

Like any license, a franchise license limits the use of the license to specific criteria outlined in the franchise agreement. Most problems associated with franchisee/franchisor disputes arise from both parties not understanding the nature of franchising. The franchisee does not buy the license but merely rents it for a period of time.

In our next instalment, we will look at the legal responsibilities of both the franchisor and the franchisee, and the efforts that the courts and governments have made in mediating and establishing rules to govern some aspects of the relationship.

The Power of Franchising

2010-03-09T08:01:00.001-07:00

MegaDox.com is pleased to present "The Power of Franchising", a series of blog posts on how to be a successful franchisor. During the course of these posts we will discuss what franchising is, the reasons you may want to consider franchising your business, and how to build a topnotch franchise system.

What is franchising? 
Franchising is the most popular business strategy in the world, but do you know what franchising is?

A strategic partnership focused on getting and keeping customers.
A business strategy.
A marketing and distribution system.
A method of distributing products and services.
A method of dominating markets.

Franchising is all of the above – franchising in its purest form is a partnership between a franchisor and franchisee.

What each party brings into the relationship
The franchisor provides:

The brand
The operating system
Administration and field support
Market share

The franchisee provides:

Time
Money
Motivation

How franchising works
Franchising has been used by companies to expand rapidly without having the benefit of an unlimited source of funds. With franchising, the franchisor has developed a recognizable brand name and operating system, which is delivering on its promise to the customer. The franchisor uses franchising to expand rapidly using the franchisee’s capital to build the location and operate the business. In return the franchisee gets to use a proven, successful operating system and brand along with the franchisor’s ongoing support and training to get into business for himself/herself without having to go it alone. It is a proven truth that franchisees who follow the franchisor’s operating system generally have profitable businesses.

The franchisee normally pays an initial franchise fee as an "entrance fee" to gain access to the franchisor’s system. The franchisee also pays an ongoing royalty for the continued use of the brand and operating system. For its part, the franchisor trains the franchisee on how to operate within its operating system. It also provides the franchisee with general business training. The franchisor also helps select the location and provides guidance on the location buildout. The franchisor’s personnel are fully engaged with the opening of the location and the training of the franchisee’s employees. Once the location is open, the franchisor normally provides ongoing support to help the franchisee with the operational, financial and human resource management of the business.

The franchisee/franchisor relationship
A franchisee enters into a license agreement with the franchisor to use the brand, operating system and on-going support, in a defined market, for a specific period of time. The franchisee is tasked with using the brand, operating system and ongoing support to build the business and increase the brand’s overall market share. The ultimate purpose for a company to franchise is to use its operating system to get and keep customers by providing quality, consistent products and services, which leads to satisfied and loyal customers. By doing this, a business can dominate the market and gain disproportionate market share.

A license to operate
There are many misconceptions about the franchisee/franchisor relationship, not least of which is that the franchisee “buys” the franchise rights. This is not correct. In fact, the franchisee is granted a license to operate within a territory for a specific period of time, usually five years, after which the license may be renewed if the license agreement provides for renewal, and so long as the franchisee isn’t in default of any of the provisions of the license agreement. The license agreement specifies the rights and obligations of the franchisee and franchisor. The most important aspects of the license agreement spell out the obligations of the franchisee. It is important that the franchisee understands that he/she is joining a standardized operating system that has been proven to work at getting and keeping customers. The obligations which the franchisee must perform ensure that the standards of the franchise system are not compromised. The sections of the license agreement dealing with these obligations are not only important to ensure a solid working relationship between the franchisee and the franchisor, but also with all the other franchisees. When one franchisee operating under a brand decides not to maintain the standards of the system, then all other franchisees are negatively impacted. The obligation of the franchisor is to protect the system and the investment all other franchisees. Franchisees who do not maintain the system standards are dealt with fairly swiftly by high quality franchisors.

In our next instalment we will look further at the franchisee/franchisor relationship and review the efforts of the courts to mediate.

MegaDox.com carries a wide range of affordable Franchising Forms, which are easy to customize to fit your business needs.

Incorporating Under the Canada Business Corporations Act

2010-02-22T07:40:00.003-07:00

Before deciding whether or not to incorporate your company under the Canada Business Corporations Act, there are a number of important considerations which must be taken into account.

The Corporation's Legal Status
Under the Business Corporations Act, a corporation is recognized as a legal entity in its own right, distinct and separate from the shareholders or directors of the corporation. As a result, the corporation can own assets, incur liabilities, bring legal action in its own name and be sued as an individual party. Provincial and federal legislation enables the principals of a corporation to separate their assets from those of the corporation and if the corporation becomes insolvent or bankrupt, the liability of the shareholders is limited to the amount of their investment, unless they have personally guaranteed the debts or obligations of the corporation.

Tax Rates
In addition, the corporation is treated by Revenue Canada as a taxpayer, with a rate of tax being assessed depending on whether or not the corporation qualifies as a Small Business Corporation. The corporation would deduct expenses such as salaries as business expenses, and anything left over after expenses is retained by the corporation and is taxed as profit.

If you, as a principal of the corporation, are a salaried employee of the corporation, you would report that salary income and be taxed on it accordingly. If you take any other revenue out of the corporation, other than as a repayment of a shareholders’ loan, you may have to pay tax on it. While salaries are a business expense for the corporation, dividends to shareholders are not. Shareholders are entitled to receive a certain amount of share dividends annually without tax liability provided they have no other income. However, dividend income is not treated as earned income and is therefore ineligible to make RRSP contributions.

Income Splitting
Incorporating offers some important tax advantages to family members. For example, company income can be split among family members who may be in lower tax brackets by paying them a salary for their involvement in the business in administrative or part-time capacities. Shares can be issued to family members to allow for the payment of dividends. Keep in mind that shares can only be issued for fair market value. If your business is already operational, you may want to consider an “estate freeze” or “rollover”.

Capital Gains
If your company qualifies as a Small Business Corporation, it may be eligible for the $750,000 capital gains exemption when shares are sold, provided the shares have been owned by the shareholder for at least two years. This exemption enables small business owners to sell their shares on a tax free basis. There are other tax benefits available, such as retirement allowances and individual pension plans.

Directors’ Liabilities
The directors of a corporation can be found personally liable in a number of situations. Some of these matters include:

unpaid employee salaries
uncollected or unremitted GST
unremitted payroll deductions
entering into contractual obligations on behalf of the corporation without making it clear that they are acting as agent for the corporation
dealing with shares in the corporation for less than fair market value
benefiting from undisclosed information to the detriment of other shareholders
failing to act in the best interests, financially and otherwise, of the corporation
failing to deal in good faith on behalf of the corporation
committing any act of fraud, theft or misappropriation of funds.

The responsibility of the directors is to conduct the day-to-day affairs of the corporation and to act as its agents. Any contractual obligations entered into by the directors are entered into on behalf of the corporation, and not on their own behalf. Accordingly, they have a legal duty to the corporation and its shareholders, employees and creditors. As such, they are bound by certain obligations, such as:

maintaining a current and thorough knowledge of the operations and affairs of the corporation
familiarizing themselves with the corporation’s articles, by-laws and any shareholder agreements
voting against any course of action they feel is improper or not in the corporation’s best interests
making full and proper disclosure of any confidential or insider information • obtaining written advice and opinions of legal, financial and other professional advisors.

Shareholder Agreements
Because situations often arise among shareholders which can lead to disputes and sometimes to legal action, it is advisable to put a Shareholder Agreement in place. The Shareholder Agreement can deal with situations such as the death or incapacity of a shareholder, the terms of a buy-out by one partner of another, provisions for bringing on a new partner, and other similar situations. The Agreement can also address such things as:

confidentiality and non-competition, both during and after involvement in the corporation
ownership of future business opportunities restrictions on management where one party has a controlling interest
dispute resolution through arbitration.

Once you have determined that incorporating as a Canadian business corporation is the right avenue for your business, visit MegaDox.com to find the forms you need to set up and organize your company.

RENTAL PROPERTY CHECKLIST FOR TENANTS

2010-02-11T09:03:00.003-07:00

Tenants, before you rent a place, list all the the pros and cons of each rental property you look at. This free Rental Property Checklist lists all the things you should look for in a rental that is best for your budget and lifestyle, what to do once you have found a place you think is right for you, and tips to help get you through the move.

Getting Started
First, think about what kind of place you want to rent – a house, an apartment, a duplex, condo / townhouse? Will you be renting on your own or sharing a place with one or more roommates? Do you have a preferred location? How much can you afford to pay in rent? Do you want a periodic tenancy (such as month to month, week to week, etc), or a fixed term lease? These are all important considerations before you sign a lease or tenancy agreement.

Then go out and look at a number of rental properties to see what’s available that fits into your budget. Check out each property carefully, using the checklist to help you keep track of important information about each place. The checklist includes some suggestions to consider, but you need to decide what items are most important to you. For instance, if you own a pet, you need to find out if pets are allowed and whether you will have to pay a separate pet damage deposit, over and above the regular damage deposit.

You can add your own rental criteria to the checklist and remove any that don’t apply to you. For example, if you don't own a vehicle, then having a garage is not that important to you. If you're not into mowing the lawn, you probably won't want to rent a house with a big yard that will involve a lot of maintenance.

Once You’ve Found the Place That Fits You
Make sure that you and your new landlord:
• Complete a thorough property inspection and write down any damage or deficiency in the property.
• Sign the property inspection report together, taking careful notes regarding any existing damage or deficiencies.
• Read over the lease / tenancy agreement and write in any conditions that you both agree on before you sign. Be sure you each keep a copy.
• Agree on how you will pay the rent, e.g. direct debit, post-dated checks, etc.
• Pay the damage deposit to the landlord and receive a receipt as confirmation of the payment.

Before You Move In
• Obtain tenant insurance to cover all your furniture and personal goods, as the landlord’s insurance does not cover your stuff in the event of loss or damage.
• Find out which day is trash day.
• Arrange for connection of the utilities, telephone, cable TV, Internet, etc.
• Notify your doctor, dentist, workplace, bank, friends, family, etc. of your new address.
• File a change of address with the post office to redirect your mail.

Always that you know your rights and obligations as a tenant. Check the Government pages in the phone book for a toll-free line to the local landlord / tenant advisory board, and read a copy of the law that governs tenancies in your area. These can often be downloaded free of charge from government websites.

The Rental Property Checklist for Tenants is available free of charge from MegaDox.com, where you can also find a variety of other Tenant Forms, such as Notice of Termination forms to be served on your landlord. These forms are all easy to use and fully editable to meet your individual needs.

The Importance of Shareholder Agreements

2010-01-27T07:25:00.001-07:00

Every business partnership, no matter how good the relationship, has the potential to end in dispute. So long as the parties agree on significant matters, minor disagreements generally resolve themselves. The best and most proactive way to attempt to resolve or avoid potential conflicts and to minimize the costs involved in conflict resolution is to have a Shareholder Agreement in place to deal with significant business issues before they arise.

A Shareholder Agreement generally defines the terms of the business relationship between the shareholders, determines how the directors will be elected and how they will conduct themselves, how the business will be run, and how the relationship will end if a shareholder wants to get out of the business or wants to acquire the interest of the other shareholders.

It is important at the outset of any business relationship to consider all factors that may affect the ongoing operations of the business. This type of contingency planning can save a great deal of trouble down the road in the event that shareholders decide they want to pursue different opportunities, or if they disagree on operational issues, suffer financial or personal setbacks, or generally encounter some other circumstance which may alter their ability or willingness to continue the business relationship. A Shareholder Agreement should deal with all of these issues.

Termination of the Business
There are many reasons why a business relationship might be terminated. Early retirement, sudden death or disability, differences of opinion regarding the operations of the business, personality conflicts, financial difficulties, bankruptcy, marital breakdown, etc. are all possibilities.

A Shareholder Agreement can establish how these issues will be dealt with if they arise. It can set out the process for a buyout of one partner by another, determine the purchase price of the shares, arrange for the sale and purchase of shares of a deceased or disabled shareholder, and determine how shares can be offered for sale to third parties. It is also extremely important to set out in the Shareholder Agreement how disputes will be dealt with, in particular the process for mediation or arbitration.

Corporate Finance
Since many small business shareholders finance their own businesses, it is crucial that the Shareholder Agreement set out the obligations that shareholders have regarding cash injections. The agreement should establish whether the shareholders must inject capital themselves or grant personal guarantees when required – and the consequences for any shareholder's failure to do so.

The Shareholder Agreement should also deal with the repayment of shareholder loans, set out the terms of payment, the interest rate (if any), and whether certain shareholders will be paid in priority to others.

Management and Restrictions
The Shareholder Agreement generally deals with issues of management. The voting percentage thresholds that must consent for the business to borrow money, issue shares, change share capital, grant security, hire and fire employees can all be dealt with in the Agreement. In the event that the partners have disproportionate interests in the company, the Shareholder Agreement could also allow for disproportionate representation in management, i.e. the number of directors appointed as nominees of each shareholder.

It is also advisable to clarify everyone’s understanding on the issues of confidentiality and non–competition, in order to restrict any shareholder leaving the business from disclosing confidential or proprietary business information or from participating in the business of a competitor for a specific period of time after they leave.

You may also wish to consider dealing with such matters as restrictions on shareholder investments, outside business interests and disclosure obligations to fellow shareholders.

Protection from Creditors and Others
You decided who your partners were going to be when you set up your business, Divorce, creditor collection issues, and death can all affect the status quo. The Shareholder Agreement can provide a mechanism to allow for the purchase of shares from a bankrupt or insolvent shareholder, and mitigate against the shares being seized, attached or claimed by any third party.

Writing a Shareholder Agreement
MegaDox.com offers a variety of Shareholder Agreement templates and checklists which can help you draft an agreement for your business. You can purchase country-specific templates and generic clauses and provisions, all of which are downloadable and fully editable to fit your circumstances. Visit us at www.MegaDox.com, or give us a call at 1 (866) 634-2369 (MEGADOX).

Creditor-Proofing Your Business

2010-01-06T09:18:00.002-07:00

The time to protect your assets and your investment in your business from creditors is before any financial problems arise.

If you attempt to protect your business assets after you borrow money or after a financial or creditor issue arises, you may allow your business creditors a better chance of accessing your assets and challenging any planning you have done.

Liability

As a shareholder of the business, your exposure is generally limited to the amount of your investment, both by way of shareholdings and through shareholder loans to the corporation. However, various situations may arise which impose liability upon you. If you have given a personal guarantee to guarantee the debts and obligations of the corporation, creditors may be able to sue you and attach your personal assets (by way of garnishment or seizure) to cover the amount guaranteed.

As a director or officer of the corporation, you may also have additional personal liability for such things as unpaid employee salaries, uncollected or unremitted sales or other taxes, unremitted payroll deductions, and breach of contract.

How to Protect Your Personal Assets

Prior to signing a personal guarantee, engaging in a new business opportunity or agreeing to be a director or officer of a corporation, you may want to consider the following strategies:

• Transferring your personal assets to your spouse or some other party (at fair market value).
• Investing your money in assets which are exempt from creditors’ claims.
• Setting up an asset protection trust in a foreign jurisdiction.

Protecting the Company’s Profits

There are similar steps you can take to protect the profits of the business:

Establish a holding company to hold the shares in the corporation. The profits of the business could then be paid on a tax-free basis to the holding company through dividends on the shares. Those profits could then be reinvested or loaned back to the business as a shareholder’s loan, which would ensure that the business’ cash flow remains unaffected. The business can grant security back to the holding company for repayment of the loan, making the holding company a secured creditor. In addition, the holding company can purchase equipment or land required by the business and then lease it back to the business, at a profit. These assets could then be out of reach from business creditors.
Establish a trust. Any shares in the holding company could be transferred to the trust, and any funds paid by the holding company to the trust by way of a dividend would belong to the trust for the benefit of the trust beneficiaries. These funds would not be available to creditors even if one or more of the beneficiaries signed personal guarantees, or have other personal obligations.

All creditor proofing strategies require careful consideration of taxation issues so as to avoid income attribution problems or the unexpected triggering of capital or income gains. The above opportunities and strategies represent only a sample of what ought to be considered. Each circumstance will offer its own opportunities and restrictions on planning.

At MegaDox.com you will find a number of template forms to help you in your creditor-proofing process, including Trust Agreements and Asset Protection & Tax Planning Forms. Visit our website or give us a call at (866) 634-2369.

Employee Performance Reviews

2009-12-22T10:06:00.002-07:00

Every business, no matter the size, should conduct employee performance reviews at least once a year. This process gives employers a chance to let employees know that they are valued and that their efforts are appreciated, and it also affords an opportunity to address any areas that may need improvement.

As an employer, it's not easy to have to tell an employee that there may be aspects of their performance that you are not happy with, but it is essential to overall productivity and job satisfaction, and will significantly impact the success of your business.

It is important to establish good honest two-way communication in your employee reviews. You can overcome the uncomfortable aspects of the review by sticking to a few simple rules.

Don't try to improvise during the interview. Be prepared. Write out an agenda and a script outline for the meeting, and practice it beforehand so you're familiar with it and so that you can carry on regardless of the employee's response to any negative comments.
Start the meeting with a bit of small talk to put you both at ease.
Summarize the employee's overall performance first of all, so that the employee will not spend the rest of the review trying to figure out where they stand. The employee may want to discuss his/her rating immediately, but try to put this off until after you thoroughly review the employee's overall performance.
Review the employee's strengths first. Reaffirm the importance of the employee's contributions to your business before dealing with any weaknesses.
Unless the employee's performance is truly exceptional, there are probably at least some areas that show room for improvement. When reviewing weaknesses, be as specific as possible, citing examples, particularly if discussing something like an employee's general attitude.
Do not be confrontational or argumentative. Do not offer general personal criticism. Your goal is to evaluate the person's job performance, and to improve employee morale.
Give the employee a chance to provide his/her thoughts and input, so that he/she knows that you value his/her opinions. This open atmosphere will encourage employees to discuss any real concerns they have and to address those concerns in a satisfactory manner.
The employee may take issue with your assessment. In that case, let him/her know that while you understand that he/she may not agree with you, this will not affect the review.
Be consistent in your reviews. All employees should be reviewed on the same criteria, relative to their job requirements. Exemplary efforts should be praised, and weak performers should be told that they need to improve.
Recap the employee's overall performance. If a raise or promotion is forthcoming, give the employee details of the raise / promotion and the date on which it will become effective.
The review offers an opportunity to discuss the employee's future career plans and to look at what opportunities for advancement may exist within the company.
Unless the employee's performance is very unsatisfactory, you should always end the review on a positive note, confirming how much the company values and appreciates the employee's efforts.
Conduct your employee evaluations on a regular basis, so that everyone knows when to expect them. This avoids conducting a review only when necessitated by an employee's poor performance.

Employee reviews should boost morale and help sustain a high level of performance and productivity. If your staff feels appreciated and adequately compensated for their efforts, their job satisfaction increases, turnover levels are minimal, and employees are motivated to do their best.

This Employee Evaluation Form for Performance Review is a valuable tool to help you record your thoughts, comments, questions and discussion points throughout the interview. You can purchase and download this form, and many more Personnel Forms, safely and hassle-free at MegaDox.com.

PROTECT YOUR HOME DURING YOUR WINTER VACATION

2009-12-04T07:45:00.001-07:00

Are you heading out for a ski trip over the holidays? Going home to visit the folks for Christmas? Or maybe you’re headed south to escape the cold for a couple of weeks. Lucky you!

But while you’re away, you want to make sure your home is safe and secure. Nothing can ruin your good time like a phone call from the police saying your house has been broken into. Or the neighbors calling you to tell you the water pipes have burst and the basement is flooded.

And if you have pets, putting them up in a kennel can cost as much as your holiday hotel!

Solve all of these problems by hiring a house sitter to look after your home and property during your absence.

With the services of a house sitter, home owners can rest assured that their home is in good hands. They can attend to your home’s care and maintenance while you're away and can make sure that the pets are fed, the mail is brought in and the plants are watered.

MegaDox.com’s House Sitting Agreement is a legal contract that lets you determine how much responsibility and authority you assign to your house sitter. You can even require the house sitter to pay a bond to ensure that he / she performs all of his/her obligations under the Agreement.

We also have a House Sitting Checklist that lists all of the duties to be performed and lists all the important contacts and other information the house sitter may need.

The House Sitting Checklist for Pet Owners lets the sitter know just what to do in case a pet requires medical attention.

Buy these easy-to-use House Sitting Forms and enjoy your winter getaway without worrying about the safety of your home, pets and property!

Business and Personal Planning for the Entrepreneur

2008-09-05T09:39:00.002-06:00

Background
In planning for business and economic challenges, succession, retirement, sale of a business, or the withdrawal of equity from a business, the entrepreneur should properly consider the question of how to extract or protect his/her equity in the business. This planning process begins by a careful examination of the issues faced by the entrepreneur, then consideration of the options available, and then the formulating of a step by step process of preparing legal documents, making any required changes in corporate or financial structure of the business, and a review and revision of your approach to the business.

Your Business is You
A lot of what makes your business successful is you. You remain a key component of what is described as the “value” of your business. Clients, customers and staff consider “you” and “the business” the same thing.

The Scenarios

Your business is successful, or your business is finally turning around, or your business is going through a temporary tough time but you have confidence that things will change if you are creative, effective and apply yourself. There’s no time to think about planning for the future.
You’ve been in business for awhile but you have not yet pursued any significant long term planning, although you know you should. You have been busy and circumstances are changing, so you feel the time might not yet be right.
You have considered some long term planning, but most of it is still being worked out in your own thoughts and it has not been reduced to writing. No one but you knows the full picture.

Why You Need to Consider Succession Planning Now

You know you are not going to be leading the business charge forever. You may want to slow down or retire - you have paid your dues.
If you do not give key employees some equity in the business, they may either start their own business or go to work for a competitor who is prepared to give them equity and more opportunity.
Your children are taking a greater role in management and are wanting more responsibility and authority.
Or maybe your children are not involved with your business at all (except to the extent they share in the revenues generated by the business), and you need to consider who will take over the business when you retire.
You are healthy and you want to enjoy the money for which you have worked so hard while you still have your health and while your spouse still has his/her health.
You and your spouse are getting older and may have to deal with issues of failing health.
You would like to sell your business but are not sure how to “package” it and make it attractive enough for someone to buy at the price you believe is fair.

Family Considerations
Your spouse or children may not be familiar with the workings of your business or its inherent value (hidden or future) and they would be at the mercy of your partners, your employees or your competition if something happened to you.

In a family business, those family members who are actively involved in the business may want to continue to build it, while other family members who are not involved in the business may want to sell it in order to realize on its present value.

And if you have a child with special needs or a spouse or parent who needs care, their interests may not be best served by those surviving you or by leaving your estate in the hands of others without proper instructions.

Planning for the Unexpected
The bubble has burst in our economy - stocks are down, real estate prices have plummeted, interest rates are going up and creditors are nervous. Does your business plan consider these kinds of contingencies?

Do you know what the tax costs would be to your business or to your estate if you died tomorrow?

Your business may be healthy so long as you are healthy, but if you have no plan in place for sudden accident, illness or death, how would business decisions be made in such an event?

Liability Risks

Your core business is doing just fine, but some side investments you made in the past are not doing so well and now have the potential to threaten you with personal liability.
Your core business is starting to suffer and is threatening the nest egg you have patiently and carefully saved for your retirement.
You are insolvent, maybe bankrupt or on the eve of bankruptcy. Unexpectedly, a wealthy relative died and left you an inheritance. The inheritance was timely since it will now serve to pay off your bills and your creditors will be satisfied. It might have been better, however, to use the inheritance as a fresh start for your post bankruptcy/insolvency life.
Your child or your spouse is an entrepreneur, but things are not going so well. Your child/spouse is insolvent or in bankruptcy, and suddenly you die. Now your child’s/spouse’s creditors are satisfied. Unfortunately, your child’s/spouse’s bankruptcy had the effect of depleting their assets and ultimately your estate. Your child/spouse would have benefited more had your estate been structured in a way to offer them a head start or a fresh start.

Time to Consider a Plan
Take a moment to evaluate what might happen to your business, your estate and your family if either you or your business suffer a sudden set-back. Now is a good time to begin the process of addressing estate planning, asset protection and tax planning, risk management, and business succession planning.

MegaDox.com offers a variety of documents and guidelines to help you with your business and personal planning.

Renting Your Vacation Property When You're Not Using It

2008-06-25T14:10:00.002-06:00

For many people, a vacation home is the ultimate luxury. Especially if you have a favorite vacation destination, whether it's the beach or the mountains or somewhere in between, a vacation property makes it easy to get away without giving up the creature comforts of home. However, many people are unable to justify purchasing a vacation home if they will only be using it for a few weeks out of the year.

There are options, however, that can make a vacation property not only affordable, but profitable as well. This is especially true if your vacation property is in a popular tourist destination, and even more so if you intend to use your vacation home during low or off-peak seasons. By renting out your vacation property when you're not using it, you could recoup some of your costs, and possibly even make a little extra as well. And renting your vacation home is preferable to leaving it empty and vulnerable throughout the year, because it reduces the risk of break-ins and ensures that leaks, clogged drains and other potentially serious issues are dealt with quickly.

Making the choice to rent out your vacation property is not always an easy one. Chances are, the property is located a fair distance away from your year-round home, making it difficult to maintain the property, get it ready for renters, or handle the administrative tasks associated with renting. However, if you know someone in the area that you can trust, you can ask for their assistance in managing the property in your absence. Many real estate companies provide general property management services that are well suited to owners who wish to rent out their vacation homes.

If you're thinking about renting your vacation property, there are a few things you should take into consideration. As with any rental situation, there is a degree of risk involved. Renters may cause damage, injure themselves on the property, or fail to pay rent as agreed. For this reason, it is important to ensure that you have all the necessary paperwork taken care of any time you decide to rent your property. Some of the important documents that you should consider are:

• Rental Application
• Vacation Property Rental Agreement
• Property Management Agreement

The rental application is what prospective tenants will fill out if they are interested in renting your property. This document commonly includes information such as the desired rental period, how many people will be staying in the property, and a preliminary rental agreement. In the event that you approve the application, a more formal vacation property rental agreement can be filled out that more clearly details the rights and responsibilities of the renter and the property owner.

A formal vacation property rental agreement contains provisions such as:
• How and when the security deposit will be returned to the renter
• Description of the property and items supplied, such as appliances, linens, etc.
• Restrictions on the use of the property, such as smoking, pets, noise, guests
• Fees payable for no-shows and cancellations
• Limitation of the owner’s liability for injury, loss or damage to occupants and property.

A written rental agreement is important not only to prevent misunderstandings, but also to provide a legally binding method of protecting your property, and to reduce the risk of liability and damage claims.

A property management agreement comes into play if you decide to hire an agent to manage your property on your behalf. Property managers typically provide services such as:
• Opening the property and providing keys for renters, and picking up keys and locking up at the end of the rental.
• Cleaning, laundry services, restocking of supplies (toilet paper, soap, etc).
• Regular maintenance and repairs, as required.
• Regular security checks of the property when unoccupied.
• Collecting the rentals and any other fees and charges (long distance phone calls, pay-per-view TV, etc).
• 24/7 phone support for emergencies.
• Arranging for removal of occupants who are not complying with the terms of the rental contract.

Whether or not you decide to use a property management service, it makes sense to have somebody that you can trust available to assist renters with checking in and out and to address any issues that may arise in your absence such as repairs, property damage, and so forth. You may also want to consider a landscaping / groundskeeping service to keep the property in good condition at all times.

With the rising cost of transportation, people are looking for more affordable ways to enjoy a vacation. Rental properties such as cabins, cottages, and other vacation homes are becoming increasingly popular as they are generally more cost-effective than staying in a hotel and more comfortable for extended stays. This gives vacation property owners an excellent chance to get the most out of their vacation properties all year round.

If you're considering renting out your vacation property while you're not using it, visit MegaDox.com for all the forms, agreements and other documents that you may need. You only have to pay once, and you can use the document as many times as you need to. Easy to understand, and simple to complete, these documents can save you significantly over hiring a legal professional. Visit MegaDox.com or call toll-free 866-634-2369 (MEGADOX) to find out more about these documents and other legal, business, and lifestyle forms.

2008-05-28T10:55:00.001-06:00

Independent Contractor or Employee?

How do you determine whether your workers are employees or independent contractors? This is important to know because if the worker is an employee, the employer is responsible for withholding and remitting income tax, unemployment tax, and other amounts required by law. An independent contractor is self-employed and would make these remittances him/herself.

Here are some questions you need to answer in order to make the determination of whether the worker is an employee or an independent contractor.

1. Does the business control or have the right to control what the worker does and how the work is to be performed?
Generally speaking, the more control management exerts over the worker's activities, the more likely it is that he/she is an employee. An employee is generally subject to the employer's instructions about when and where to work, and how the work is to be done. The more detailed the instructions, the more control the business exercises over the worker (such as what tools and equipment to use, what work must be performed during a shift, what order or sequence to perform tasks, where to order supplies, etc). More detailed instructions indicate that the worker is an employee. Less detailed instructions reflects less control, indicating that the worker is more likely an independent contractor.

2. Does the business train the worker?
If the business provides the worker with training on how to do the job, this demonstrates that the business wants the job done in a particular way, and again indicates a degree of control. This is strong evidence that the worker is an employee. Periodic or on-going training about procedures and methods is even stronger evidence of an employer-employee relationship. Independent contractors ordinarily use their own methods.

4. Do you require the worker to perform the work personally?
If you insist that the worker perform the work personally, this implies a measure of control over how the work is performed; thus, the worker is an employee. A true independent contractor could assign the work to someone else.

5. Do you hire assistants for the worker?
Hiring assistants for your worker implies control over such assistants and an employment status. An independent contractor would be more likely to hire their own assistants.

6. Do you have an ongoing relationship with the worker?
Even if the work is performed at irregular intervals, the fact that you use the worker's services over a long period of time would tend to indicate employment status. If you hire a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that the intent of both parties was to create an employer-employee relationship.

7. Do you require that the worker work exclusively for your business?
A worker who is engaged only by your company is probably an employee. By contrast, a worker who performs work for many clients is more likely an independent contractor.

If the worker is required to devote his/her full time to your business, this indicates a high degree of control. This situation keeps the worker from doing other gainful work. An independent contractor is generally free to seek out business opportunities. Independent contractors often advertise, maintain a visible business location, and are available to work for other companies in the relevant market.

8. How is the worker paid?
An employee is generally guaranteed a regular wage – hourly, weekly, monthly, or otherwise. This usually indicates that a worker is an employee, even when the wage or salary is supplemented by a commission.

An independent contractor is usually paid a flat fee for the job. This fee may be paid in regular installments over the life of the project, a typical arrangement in an independent contractor relationship. However, it is common in some professions, such as law, to pay independent contractors hourly.

9. Do you pay the worker’s business or travel expenses?
Reimbursement of business or travel expenses implies a degree of control, and indicates employee status. Independent contractors are more likely to pay their own expenses than employees are. Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. However, employees may also incur un-reimbursed expenses in connection with the services that they perform for their business.

10. Has the worker made a significant investment in tools, equipment or facilities?
If the worker uses your tools, equipment and facilities, this implies an employer-employee relationship. An independent contractor often has a significant investment in equipment, tools and materials he/she uses in working for someone else. And if the worker has his/her own facility (such as an office) from which he/she performs the work, that is a strong indicator that he/she is an independent contractor.

However, in many occupations, such as construction, workers have significant investment in the tools and equipment they use and are still considered to be employees. And a significant investment is not a required factor for independent contractor status, as some types of work do not require large expenditures.

11. Does the worker incur a risk of loss from the results of the services rendered?
The opportunity for profit or risk of loss is an important factor in determining independent contractor status. If a worker does not incur the risk of loss normally associated with running a business, this implies that he/she is an employee. If a worker has a significant investment in the tools and equipment used and if the worker has unreimbursed expenses, the worker is at greater risk to lose money, which would indicate that the worker is an independent contractor.

12. Do you have a written contract with the worker?
Although a contract may state that the worker is an employee or an independent contractor, this is not sufficient in and of itself to determine the worker’s status. Rather, it is how the parties work together that determines whether the worker is an employee or an independent contractor.

13. Do you have the right to fire the worker?
An employee can be fired. An independent contractor cannot be terminated as long as he/she is meeting his/her performance obligations under the contract he/she has with your business.

14. Can the worker quit at any time without liability?
If the worker has the right to give notice and quit working for you without assuming any liability for doing so, this indicates that he/she is an employee. By contrast, an independent contractor would incur liability and risk a possible lawsuit for breach of contract, unless the reasons for termination are in accordance with the terms of the contract.
15. Is the worker's performance evaluated?
If the worker's performance is evaluated by management, then this would point to employee status. If the evaluation system measures just the end result of the work, then this can point to either an independent contractor or an employee.
16. Are employee benefits available to the worker?
Employee benefits include pension plans, paid vacation, sick days, disability insurance, stock options, medical and dental insurance. Businesses generally do not grant these benefits to independent contractors. However, the non-availability of employee benefits does not automatically mean that the worker is an independent contractor.

17. Are the worker's services considered a key aspect of the business?
If a worker provides services that are a key aspect of the business, it is more likely that the business will have the right to direct and control his or her activities, which would indicate an employer-employee relationship. If the worker performs services that anyone could perform, independent contractor status is more likely.

Conclusion

There is no magic formula for establishing an employment relationship. All factors must be considered and taken together. Remember, too, that factors which may be relevant in one situation may not apply in another. Review the entire relationship, consider the degree or extent of the company's right to direct and control the worker, and document each of the factors used in making your determination.

For a variety of Independent Contractor Forms, including agreements, checklists, service contracts, proposals, and invoices, visit MegaDox.com or call us toll-free at 1 (866) 634-2369 (MEGADOX).

Business Plan Templates – A Critical Resource for Any Business

2008-05-05T14:59:00.001-06:00

A business plan is one of the most important tools of doing business. Not only does it lay out your vision for your company and its future direction and growth, it’s also a key component in obtaining financing and attracting investors. A business plan explains what your company does, how it plans to succeed and why lenders or investors should have confidence in its potential.

The main purpose of a business plan is to raise money. Without a good business plan, no bank, investor or venture capital firm will consider providing you with the money you need to start up a new business, to expand an existing business, or capitalize on an opportunity.

But it's more than just a way of impressing lenders and investors. An effective business plan also ensures that everyone in your company understands the mission and is committed to the same goals and objectives. The business plan clarifies the business targets and develops a strategy for meeting those targets.

Different Business Plan Templates for Different Needs
The best format and structure for your business plan depends on the industry it operates as in, as well as factors such as size. MegaDox.com offers a comprehensive range of business plan templates tailored to the specific needs of different companies, such as accounting firms, bed-and-breakfast establishments, feature film productions, and hair salons.

The templates come with instructions to help you complete each section, sample pro forma financials and a confidentiality agreement. You can also find step-by-step guides to help you research and write a powerful and effective business plan on your own.

Contents of a Business Plan
All good business plans should include:

* Background, history and current structure of the business
* Details of your products and services, including future plans
* Breakdown of the market potential for your business (industry overview, target markets, competitors, market share)
* A marketing plan setting out the strategies you will use to reach your target markets
* The business' resource requirements
* A financial plan, including cash flow projections
* Information about the management team.

The business plan will also need an executive summary and appendices, which will include any relevant documents that are too bulky to go into the plan itself (such as leases, contracts, architectural plans, press releases, CV's of the company's principals, financial statements).

Reviewing and Updating Your Business Plan
Once you have written your business plan, it's advisable to have it reviewed by your lawyer and accountant. When you feel comfortable with the content and structure, make an appointment to review and discuss it with your banker. But it doesn't end there. The business plan is a flexible document that should change as your business grows. Be sure to review and update it every few years, or whenever your business model changes.

MegaDox' inventory of Business Plan Forms is regularly updated with new templates and new tools to help guide you through researching, writing and updating your business plan. Visit our website or give us a call at 1(866) 634-2369 (MEGADOX). We'll help you choose the business plan that's right for you.

Make Money with a Landscaping Business

2008-02-12T07:56:00.001-07:00

What a wild winter this has been! Snow, cold, more snow - but don't let it get you down. It will soon be over. And when the snow is gone, everyone starts thinking about planting, landscaping and beautifying their lawns and gardens. Landscapers, you need to start signing up customers now.

Get a head start on your competitors with this ready-made Landscaping Contract from MegaDox.com. Downloadable and easy to use, you can edit and customize the contract template to fit your exact needs. The contract covers a wide variety of landscaping and groundskeeping services. Buy the form once, use it as often as you require.

Don't wait for spring, visit MegaDox.com and buy your Landscaping Contract form today.

How to Start Up Your Own Cleaning Business

2008-01-16T10:38:00.001-07:00

Thinking of starting your own cleaning business? It's a great opportunity for anyone who is hard working and responsible, and you can start working from your own home with only a minimal investment for start-up expenses (such as business cards, Yellow Pages ads, advertising brochures, etc.) You can expand the business at your own pace and hire extra staff on an "as needed" basis.

Potential Markets
The cleaning industry has two primary client bases: residential (private homes) and commercial (businesses). If you are just starting out, you should concentrate on one market, and decide which services you will provide (maid services, janitorial, window cleaning, carpet cleaning, etc.). By focusing on a single niche and building your business to service that niche, you can grow your business at a sustainable rate and expand into other parts of the market over time.

Employees
Due to the nature of the work, cleaning businesses generally employ unskilled laborers, often those who have recently emigrated from another country. It's important to find people who are trustworthy and bondable, particularly if your client base is primarily residential homeowners. This can sometimes be difficult if language is an issue.

Be sure to run background checks on all job applicants, and check references thoroughly. Whenever possible, hire people that are known to you or are recommended by friends or colleagues.

Contracts and Business Forms
MegaDox.com carries a range of easy-to-use Cleaning and Janitorial Services Forms, including template contracts, quotes, work orders and other forms to help you keep your costs down. Visit our website or give us a call at 1 (866) 634-2369 (MEGADOX). We'll help you choose the forms that are right for you.

Reducing Your Environmental Footprint

2008-01-08T12:00:00.003-07:00

With the New Year upon us, many people are making their New Year's resolutions. From loosing weight, to reading more, most people like to focus on self-improvement. But why not try to be a little bit more environmentally altruistic this year and make your new year's resolution to start living a greener life?

Changing Lifestyles
Going green doesn't have to be a hard and painful process. We can all make a positive impact on the environment by making eco-friendly choices, by using products that conserve energy and pollute less, by recycling and re-using more, by limiting the use of toxic household chemicals, and by promoting greener ideas in our households and our communities.

Reducing Energy Consumption
35 Ways to Cut Home Energy Costs is a great article that shows you how to save energy, pollute less, and reduce your monthly bills. Written by industry expert Art Thompson, this seven-page article contains useful tips for cutting down on electricity, water and gas usage while making your home a more comfortable place to live.

Vehicles
A properly maintained vehicle not only runs more efficiently, it also burns less fuel and produces fewer emissions. Car Care and the Environment will help put you on the road to having a more environmentally friendly vehicle.

Household Cleaners
There's no need to use harsh chemicals to handle your household cleaning. Download Super Stain Removers, and discover a whole world of alternative ways to get those nasty stains out of your carpet, upholstery and wood furniture.

Soaps and Beauty Products
Learn how to make your own healthy, natural and eco-friendly soaps, cosmetics, shampoos, and other beauty products with The Soap Cookbook.

Check out our Eco-Friendly Living section, which contains only digital forms (no paper!) - save a tree, only print these forms if absolutely necessary. Visit our website or give us a call toll-free at 1 (866) 634-2369 (MEGADOX).

LEGAL FORMS FOR ARTISTS

2007-12-13T22:50:00.001-07:00

Artists often ignore the legalities involved in exhibiting or publishing their original works, to their detriment. It is essential to protect your rights to the work you have created, and to ensure that you are paid a fair price for your labours.

If you wish to retain your ownership interest and copyright in the work, you need to establish those rights and then protect and preserve them. For instance, if you are submitting an original work for publication, have the publisher sign an Acknowledgement of Copyright prior to publication.

You can find information about registering your copyright at the following websites:

If you are creating a commission work for a client, then you want to make sure that you will be fairly compensated, that payments will be made on time, and that you have a legal means to pursue the client for any amounts that have not been paid. A good agreement template, like this Contract to Commission an Artwork form, contains provisions to deal with those matters and with other aspects of the artist-client relationship.

MegaDox.com offers a variety of Artists Forms, including business plans and resume templates. Visit our website or give us a call toll-free at 1 (866) 634-2369 (MEGADOX).

Extreme Winter Sports - Protecting Against Injury and Claims

2007-12-06T15:34:00.001-07:00

The stunning vistas, the crisp alpine air, the pristine slopes dusted with immaculate fresh powder - is there anything more beautiful or invigorating?

From skiing to snowboarding, there are few experiences in life that can match the exhilaration of strapping on the boards and hitting the slopes on a sunny winter day.

But extreme snow sports aren’t all just fun and games. There can be some real risks involved as well. Proper training and equipment are of the utmost importance when hitting the slopes this season. Along with the regular gear, such as a well fitting boots, gloves, pants and jackets, a good helmet can be the best investment amateur athletes can make.

The National Ski Patrol recommends that skiers and snowboarders should always be prepared for everything from frostbite to avalanches. Carrying such items like avalanche transceivers, probes and shovels can make the difference between life and death. Skiers and boarders should always dress for foul weather, meaning that they should dress in layers with breathable materials. And don't forget the sunscreen. This may not be the beach on a hot summer day, but you can still get a serious burn from the sunlight reflecting off the snow.

Accidents can still happen to the best prepared people. If your business provides facilities or books tours for extreme sports such as heli-skiing and snowboarding, protect your company and employees against legal claims with this High Risk Sport Release and Waiver form. In order to take part, participants must sign the form to waive their rights to claims, both now and in the future, against the company providing access to the activity.

MegaDox.com offers a variety of Release and Waiver Forms for different activities and businesses. Visit our website or give us a call toll-free at 1 (866) 634-2369 (MEGADOX).

WHY YOU NEED A LEGAL WILL

2007-10-04T09:06:00.002-06:00

There are few things in life that are a complete certainty; death and taxes most likely being the first that come to mind. While almost everyone files their taxes every year and makes sure that everything is in order, over half of North Americans do not have a legal will!

Why would you go through all the effort to make sure that the government gets their fair share of your money and not do the same to make sure that your loved ones are taken care of once you pass on?

Some people don't want to write a will, thinking that things will just sort themselves out once they're out of the picture, but the sad fact of the matter is that settling financial matters after your time have come can be a very complicated and drawn out process.

If you don't have a legal will written before you die, any number of things can occur, the courts will decide who gets what and if you don't have any children, all of your possessions will be come property of the sate, in some jurisdictions.

Preparing such and important document doesn't have to be a harrowing experience. Writing a will is simple and you don't even need to hire an expensive lawyer.

The Will Kits for Canada, the United States, Australia, New Zealand and the United Kingdom available online are straight forward, easy to use and can be downloaded right onto your home computer.

TOP 4 REASONS TO MAKE A POWER OF ATTORNEY

2007-09-28T07:57:00.001-06:00

There are a few very important legal documents that everyone should prepare to ensure that their wishes are followed and that their loved ones are taken care during dire straights and less comfortable times. One of these is a Legal Will. A Will ensures that your property goes to the people you choose after you die. The other document is a Power of Attorney. This makes sure that your wishes are followed in the here and now, while you’re still alive, but can’t, for some reason, execute them yourself.

Reason 1. Serious injury can happen to anyone at any time.

If you are incapacitated and are unable to direct your affairs who will run your business? Who will pay make the mortgage payments? Who will make crucial decisions for you?

A power of attorney can ensure that someone of your choosing, who knows your wishes, can make all of your important decisions with your best interests in mind. The bills get paid, your kids’ college tuition is looked after, and all legal loose ends are tied up. When you are on your feet again, you can look forward to being back in charge without the worry of coming back to a big mess.

Reason 2. You’ve come down with an illness or affliction that impairs your judgment and ability to make sound decision on your own.

Some people are lucky and live their entire lives out in complete comfort without ever worrying about the loss of control of their faculties. But for many people, a loss of capacity is a real worry. Someday, be it through disease or natural progression, we may come to a point where we won’t be able to make our own decisions.

When this day arrives, it usually falls upon loved ones to sort out the issues and make sure things are taken care of. But for those who have made a Power of Attorney, a family member or close friend that you trust with knowledge of your plans and wishes will be able to carry out those wishes on your behalf.

Reason 3. You need someone to take care of business while you’re away.

Your bags are packed, the plane tickets are purchased and you have an ample amount of SPF 45 in your carry-on. You’re all set. Except for one thing; that’s piece of property you’ve been trying to sell has just about sold, only it the sale will be finalized while you’re in the Caribbean. Will you postpone your cruise just to make sure the transaction goes through? You won’t have to, because you’ve granted a Power of Attorney to an agent who will take care of the sale while you’re away.

By giving an agent a specific Power of Attorney to act for you in your absence, there will be no need to worry that your affairs won’t be taken care of. You can stipulate when the Power of Attorney ends, and you can limit the agent’s power only to certain matters and for specific purposes.

Reason 4. You find it difficult to get around due to age or infirmity.

If you have limited mobility or otherwise find it hard to get around, you can give an adult child, a close friend or someone else you trust the authority to handle your financial and legal affairs, such as doing your banking, signing important documents, and paying bills for you.

Making a Power of Attorney can be one of the most important things you do. You don’t have to pay an expensive lawyer when you’re ready to make a power of attorney. You can purchase affordable easy-to-use Power of Attorney forms from Megadox.com.