World Franchising Network (WFN) has named Fiesta Insurance Franchise Corporation, the nation's only insurance and tax preparation franchisor, as one of its Top 26 Franchises for Hispanics for 2010. PODER Magazine, the successor to Hispanic Enterprise, published the results in its July 2010 issue.

"It is an honor to be included among an impressive list of franchise companies," said John Rost, founder and CEO of Fiesta Insurance Franchise Corporation. "This recognition is a testament to our talented franchisees and our commitment to growing with entrepreneurs who want to carry on the Fiesta Auto Insurance tradition of success in markets throughout the country. We look forward to continuing to achieve many more successful benchmarks for years to come."
 
The WFN developed the list based on a rigorous analysis of several factors, including historical performance, brand identification, franchisee satisfaction, training, on-going support and financial stability. Another important determinant is the percentage of existing franchises that are Hispanic-owned, as well as the number of Hispanics in the franchisor's top levels of management.
 
Fiesta Insurance Franchise Corporation is the nation's only franchise system to combine insurance and tax preparation under one roof, providing a one-stop shop for the budget-minded consumer. Beyond auto insurance, Fiesta offers insurance services for watercraft, motorcycles, homeowners, rentals, condos, apartments, tenant occupied property, commercial auto, commercial property, commercial general liability, Mexico insurance and special event coverage. On the tax side, they offer federal and state personal income tax filings, business tax returns, electronic filing and bank products. Fiesta also provides motor vehicle registration services, travel services, wireless services and instant wire money transfers as well as accounting and bookkeeping services.
 
Congratulations to John Rost and Fiesta Insurance Franchise Corporation!

 

 

 
Denny's declined to proceed, and Halloum sued, arguing among other things that Denny's pulled back because Halloum was a Palestinian Arab. California law prohibits discrimination in the awarding of franchises solely on the basis of the race, color, religion, national origin, or disability of a prospective franchisee.
In response, Denny's argued that its decision had nothing to do with Halloum's race, color, and so on. Instead, it pulled back because Halloum had never submitted a completed site submittal package, and it also presented evidence showing that it had many franchisees of Middle Eastern origin, among them a number who had signed up after the World Trade Center attacks.

 

The trial court issued a summary judgment in favor of Denny's, finding in essence that Halloum had no case. Halloum appealed only to lose again before the California Court of Appeal, which put an end to the fight with a no-nonsense ruling in Denny's favor last spring. By that time, however, six years had passed since Halloum filed his suit, and there is no telling how much money Denny's had spent fighting back.

For franchisors, the lesson here is clear: Anyone can sue you for practically any reason, sometimes even for no reason at all. Make sure you cross the t's and dot the i's in every communication you have with both existing and prospective franchisees - and get good legal advice the moment you have any reason to believe that trouble looms.

 

Thinking of becoming a franchisee? As noted here in April, franchising continues to grow despite the slowdown in the U.S. economy as a whole. But you need serious money to buy and launch a franchise - $10,000 at the low end, $500,000 or more at the high - and capital isn't easy to come by right now.

Banks, for example, aren't lending even to established businesses, much less to startups, and millions of Americans have seen their retirement savings and the value of their homes - good sources of capital in the past - shrink dramatically. The result: These days, the only real source of startup capital is government, chiefly in the form of the Small Business Administration, and a handful of franchisors willing to help finance their fledgling franchisees. [See our June Newsletter.]

Actually, the SBA doesn't lend money. Instead, it guarantees bank loans such that, if a borrower goes belly up, the bank gets its money back from the SBA, not from the borrower. To be sure, the guarantee makes banks willing to lend to startup franchisees, but that doesn't translate into low interest rates, and it certainly doesn't cut into the paperwork involved in getting an SBA-backed loan.

The paperwork can be daunting, and there's lots and lots of it, starting with a formal application, a schedule of collateral, a personal financial statement, a "statement of personal history," an executive summary of your plans, loan documents, and so on. (For details, check out this page on the SBA website: http://www.sba.gov/financialassistance/borrowers/application/apply/index.html).
Also, understand that you can't get 100 percent financing from an SBA-backed loan. You must put some of your own capital at risk, although how much you need to invest depends on factors including the franchise you want to buy, your background and credit rating, and so on.

If this makes it sound easy, it isn't. Indeed, the hard work involved in getting an SBA-backed loan has given rise to a cottage industry of consultants eager to help. The downside is that these consultants charge for their services. On the other hand, if you need help, the upside is that they can get you through the SBA maze, giving you access to one of the few sources of startup capital available in hard times.