New to Franchising? Here’s Your Guide to the Must-Know Industry Acronyms.

In short

Rob Lancit writes a glossary for people who have just started looking at franchises and keep hearing letters instead of words. He notes that more than 3,500 franchise concepts are on the market, and that the vocabulary is one more thing a newcomer has to absorb on top of the choices themselves.

He sorts the terms by where a buyer runs into them. Industry and associations: the IFA, the CFE and CFSP credentials, and the FTC, which oversees the Franchise Disclosure Document. Sales and development: the LOI, the PSA, the FSO, the FBC, and the kinds of owners, from single-unit to MUFO to master franchisees and area developers. Operations and support: NDA, IP, LMS, CRM, SOPs, OJT, QA and KPIs. Legal and compliance: due diligence, the 23 Items of the FDD, with Item 7 for the estimated initial investment, Item 11 for support and training, and Item 19 for financial performance, where EBITDA, AUV and ROI tend to appear. He ends the list with ROFR and ROFO.

The piece admits it cannot cover every abbreviation and tells readers to go easy on themselves when a new one comes up. He closes with a paragraph written almost entirely in everyday text abbreviations, which makes the point that nobody learns a new language in a day.

Summary by the editors of this site. The original is Rob’s own writing; read the original at the source.