Learn how our team at Visa Franchise works on vetting our current portfolio offering your behalf!Apply to be a client
Our consulting service focuses on helping entrepreneurs identify and review the best franchise opportunities that may qualify them for an E2 investor visa that also best fits their investor profile. In doing so, we facilitate a smooth transition process to the U.S. with the goal of achieving personal and business success.
However, finding the correct business is not an easy task. There are currently over 5,000 franchise brands and 795,000 locations, which can be quite overwhelming for a prospective investor. In addition to this, the fact that not all franchises allow foreigners to invest in their franchise system poses an additional obstacle to the majority of our client base.
As a first step of our initial franchise reach out process, our team conducts what is called a ‘Preliminary Analysis’ which entails ensuring that our opportunities of interest fulfill certain necessary requirements from our end.
Among the multiple criteria our team considers during this initial stage, some of it would be the following:
Assuming the franchise passes this initial stage, our team then moves on to reaching out to the business for further details regarding the client’s visa and business support requisites.
This second stage of our onboarding process, entails holding an initial introduction call with the franchisor in order to obtain a better understanding of the business as well as to address any critical questions that might arise throughout the client’s investment process. These questions allow us to filter what businesses match not only our client’s visa requirements but that also qualify them as a strong business with significant potential and capacity for growth.
Once this initial call is complete, the franchisor then moves forward with sharing with our team additional documentation, such as their Franchise Disclosure Document (FDD), that might assist us in stage 3 of our onboarding process – our due diligence review.
The Due Diligence stage of our process is considered the most important step when vetting a potential franchise opportunity. During the due diligence process, our team conducts a detailed review and examination of the FDD, where we address several sections, we deem important to potential franchisees.
We go through these items for any litigation and bankruptcy which have been disclosed by the franchisor. In the case that any have been disclosed, we then review the nature of it, and whether it was related to the franchisor’s practice, amongst other factors. In the case that no litigation or bankruptcy is disclosed, we may conduct a separate, external search to see if there are any undisclosed court and/or bankruptcy cases.
At this stage we review the ongoing fees and ensure there are no abnormal costs or fees being charged by the franchisor. These might entail fees that are not generally charged by industry competitors or fees that charge an amount higher than the industry average. If any abnormalities are found, we then contact the franchisor for further context.
We confirm through this step that the investment is within our threshold of $250,00. In the case that it is, we then double check the costs associated with the franchisee’s initial investment for any abnormal costs that must be clarified. Additionally, for franchises where the investment amount surpasses our stipulated $250,000 however, we may also conduct a further analysis to better understand the reasoning behind such prior to making a final decision(i.e. Food and Beverage franchises often surpass this initial investment threshold.)
This item refers to existing franchisees past financial performances and the business may or may not disclose this item on their FDD. In the case of the former, we review the metrics shared by them especially when it comes to the total revenue amount, cost-expense projections, among others. In case that they do not disclose an Item 19, we then have a follow-up call with the franchisor to review any additional information they might be willing to disclose with us at this time.
Yearly, the franchisor discloses their total unit count for company-owned and franchise outlets. By reviewing the latter, we can identify whether the company is growing or shrinking in size. In the case that there are a significant number of closures and transfers our team reviews the reasons behind such by jumping on a call with the franchisor.
We also review the franchisor’s or parent company’s Balance Sheet, Statement of Operations & Cash Flow from the past three years. In doing so, our team can compare how the franchisor has performed with what they shared with us during our initial conversations. In addition to this, we also consider other items such as whether the franchisor has any long-term debt and, what the ratio of royalty to franchise fees currently is for their revenue, amongst others.
Based on the expected profit margin per unit and the franchise’s initial investment midpoint, we are able calculate an estimate of a franchisee’s return on investment. We simulate these numbers based on different scenarios that will generate margins between 10% and 30% and will further assist us when profiling the best opportunity for our clients.
Our team runs a simulation on the revenue and cost projections that a single unit franchisee owner may face during a year. This is done considering base and high projections as well as how these numbers should look after three years. Once the simulation is complete, we can then better estimate the owner’s benefit (profit) and which expenses will be the most significant for our clients.
Once all these steps have been completed, our due diligence document then goes through a two-step review by senior members of our Product Development team. In case further questions are raised during this stage, our team schedules additional calls with the franchisor so as address and clarify such matters. Otherwise, our initial vetting process is complete, and we now move on to finalizing our franchise onboarding process.
As evidenced in the sections above, our franchise vetting process is extensive and particular to ensure we work with only the strongest franchise opportunities for our clients that will also meet their franchise and visa requirements. Should you be interested in learning more about the work we do and the investor profiles we cater to, please browse through our other web pages outlining our multiple investor profiles as well as the requisites for an E2 visa.Visa Franchise Services