Franchise acronyms can feel like a foreign language when you're just starting your journey toward business ownership. With more than 3,500 franchise concepts in today's marketplace, new candidates are often overwhelmed by the sheer volume of industry jargon tossed around in meetings, documents and everyday conversations. But don't worry, because help has arrived.
In a new article for Entrepreneur, Stratus VP of Franchise Development Rob Lancit delivers a fun and practical guide to the most common abbreviations you'll encounter during the franchise investigative process. With more than 3,500 franchise concepts in today's marketplace, new candidates are often overwhelmed by the sheer volume of industry jargon tossed around in meetings, documents and everyday conversations.
Understanding Franchise Acronyms Before You Invest
Rob breaks things down into clear categories, starting with industry associations like the IFA (International Franchise Association) and certifications such as CFE (Certified Franchise Executive). From there, he moves into franchise sales and development terms, including LOI (Letter of Intent), PSA (Purchase and Sale Agreement) and MUFO (Multi-Unit Franchise Owner).
On the operations side, candidates will encounter acronyms like NDA (Non-Disclosure Agreement), CRM (Customer Relationship Management), SOPs (Standard Operating Procedures) and KPIs (Key Performance Indicators). Rob also covers the legal essentials, spotlighting the all-important FDD (Franchise Disclosure Document) and its 23 individual Items, particularly Item 19, which discloses financial performance data including EBITDA and AUV.
"Give yourself a little grace in learning the meaning behind it," Rob encourages, reminding readers that no one needs to master everything overnight. The article wraps up with a clever and entertaining sign-off packed with everyday acronyms, reinforcing the message that learning at your own pace is not just OK, it's the smart move.
Whether you're just beginning your research or deep in the due diligence process, this guide is a must-read for decoding the language of franchising.
Read the full article on Entrepreneur.