Emmanuel Ventouris Tests New Franchise Concept
New York, N.Y., July 13, 2017 (Newswire.com) - Starting a franchise is always a risky business, and the greatest risk is taken by the person who decides to be very first franchisee. In an ideal world, franchises develop because a business becomes so successful that other people want to copy it. Unfortunately, this is generally not how franchises are formed.
Emmanuel Ventouris, a resident of New York City, has recently decided to take the plunge. He wanted to start his own business but did not have any unique startup ideas. At the same time, he didn't want to work with a well-established franchise because of the significant financial investment required, and due to market saturation. So he agreed to be the first franchisee.
Naturally, he was significantly rewarded for agreeing to be the first. His initial fee was waived and he received credit for a significant part of his purchase fee. Furthermore, he was provided with a grace period on both the marketing and royalty fees. In so doing, the franchisor was able to increase the chances of Ventouris in becoming successful, and for him to grow as well. In effect, Ventouris had become the validator of the new franchise concept.
Franchises are complex legal and financial constructions. However, of particular importance is Item 19 of the FDD (Franchise Disclosure Document), which discusses financial performance representations. These cannot be provided to the first franchisee, because these representations simply don't exist yet.
What really made Emmanuel Ventouris's idea unique, however, was that he was able to test the concept on a small level before registering the offering and preparing a disclosure document. This is in accordance with the FTC (Federal Trade Commission)'s rule on franchising,
There are ways to start small and test the concept before the franchiser is ready to prepare a disclosure document and to register the offering. If there is only a single license, no disclosure document has to be presented. This is only true, however, if the outlet is found in a non-registration state. Should it be in Washington, New York, Minnesota, or Indiana, isolated franchise sales are exempted.
Unfortunately, Ventouris’s outlet is located in New York, which has the single sale exemption. Nevertheless, this applies only when:
No more than two people have been offered the franchise opportunity.
Franchisees do not have the right to take on sub-franchises.
Soliciting prospective franchisees do not incur remuneration, such as a commission.
The franchisor lives in New York and has filed a consent with the NY Department of Law.
All of the above were applicable to Emmanuel Ventouris. In addition, he used the FTC minimal payment exemption rule. This dictates that the FTC rule is not applicable if the franchisor is paid less than $570 before the business has been in operation for half a year. This was one of the conditions he asked for in return for being the first franchisee of the business.
The business is a new type of healthy sandwich store. It is the first of its kind in New York and interest has already started to grow. The sandwich store focuses on offering vegan and vegetarian recipes, and it also has a separate gluten free section. Gluten free sandwiches are incredibly hard to come by because of bread, by its very definition, contains gluten. This was what attracted Ventouris to the concept in the first place. He suffered from allergies as a child, although he has now outgrown them. However, his wife has celiac disease. Thus, he wanted to create something such that people with these types of difficulties will not feel like their needs are being ignored.
The franchisor, meanwhile, is happy to see that someone has picked up on the concept. Like Ventouris, the franchisor felt that people with allergies and lifestyle choices, such as veganism, should have the same opportunities as those who do not make these choices or have these requirements. The fast food industry is one of the most popular types of industries for franchise businesses, but the vast majority of them focus on quantity over quality, using cheap, low quality, processed ingredients. Ventouris's franchise opportunity changes all of that, and he believes that this unique concept will succeed.
New York City is a place where many people want to focus on being healthy, but they are impeded by the lack of time. Everyone is always in a rush and wants to be able to grab a quick bite to eat on the go. Ventouris is counting on this for his new business to grow and become a huge success.
Source: Emmanuel Ventouris