FDD Talk: Expense Reduction Analysts Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Expense Reduction Analysts franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for an Expense Reduction Analysts franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Expense Reduction Analysts franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Expense Reduction Analysts outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Expense Reduction Analysts’ financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 average, median, high, and low net cumulative receipts for the top 25%, medium top 25%, medium low 25%, low 25%, and all 101 Expense Reduction Analysts Regional Franchisees operating a total of 108 licenses for the period from January 1, 2019 to December 31, 2019

Section I – Background Information

12 Things You Need to Know About the Expense Reduction Analysts Franchise

Several Reasons to Join ERA

1.  Expense Reduction Analysts (ERA) is the number one franchise in overhead cost optimization and supply management, and has been franchising for more than 28 years. The ERA franchise opportunity offers the freedom, flexibility, job satisfaction, and control of being self-employed combined with the global brand, international network, proven business model, systems training, and backup support franchisees need to grow a profitable and successful business.

2.  ERA says that it is different because its franchise opportunity is not necessarily only for accountants and consultants. The value of ERA lies in the breadth of expertise and variety of professional experience within its global network. This allows franchisees to collectively service the needs of every client no matter the size or industry.

3.  All of ERA’s franchisees are self-employed business people who share the same entrepreneurial drive and desire to build a successful business of their own. ERA is therefore looking for motivated and enthusiastic professionals with relevant corporate experience in one or more of a variety of different areas including sales, project management, engineering, banking, finance, general management, purchasing, or with expertise in sectors such as facility management, logistics, packaging, telecommunications, energy, and office supplies.

4.  Some other reasons to become an ERA franchisee include:

• A proven business methodology;
• High earning potential;
• Low overhead costs;
• Bespoke software and IT support;
• A highly-experienced network of business professionals;
• Professional development and coaching;
• Work from home or an office;
• Choose your own hours;
• Achieve a work-life balance;
• Recognizable brand and international marketing presence;
• Awarded “Best White-Collar Franchise” at the Global Franchise Awards in 2018 and 2019;
• Expertise in more than 40 different areas of overhead expenditure;
• A global network of more than 650 consultants;
• “No Savings, No Fee” business proposal.

Offers Continued Training and Support to Franchisees

5.  Expense Reduction Analysts says that it invests heavily in its franchisees because when they succeed, the company exceeds. The ERA franchise opportunity is different from other opportunities in the procurement and supply chain industry. ERA supports its franchisees with knowledge, expertise, methodologies, and processes built from over 28 years of experience to help make a franchisee’s business as successful as possible.

6.  ERA franchisees can expect ongoing and extensive support from day one, provided by an international team of over 60 full-time staff members based in its European, American, and Australian support centers, and speaking over 18 different languages. In addition, almost 50 Area Directors provide local support to franchisees and help to develop the business in their respective territories.

7.  Some of the ways that ERA supports its franchisees include:

• Marketing – ERA’s international marketing team has developed global strategies and initiatives designed to help franchisees grow their businesses with improved levels of profitability. ERA wants to ensure a solid and well-matched strategy is implemented, giving the company the credibility of a global leader in cost and supply management while also providing the franchisees with a reactive, “agency” style support where they can call on ERA for urgent help, training, or simply advice.

• Information Technology – ERA’s Global IT Support Center assists its network of franchisees by providing round-the-clock support in areas crucial to the everyday running of their businesses. ERA’s “Infoflow” IT strategy is designed specifically to help provide added value to clients and additional efficiency for franchisees. The integrated IT ecosystem includes prospecting databases, integrated marketing system, business development system, Microsoft Dynamics, and access to all Microsoft 365 programs.

• ERA’s 18-Month Start-Up Program: ERA’s unique 18-month Start-Up Program is designed to equip its franchisees with all the knowledge and confidence they need to successfully launch and run their own business. Upon the completion of the initial Basic Training, new franchisees are ready to begin their journey with ERA and will work closely with the ERA Academy, their local regional representatives, their ERA Coordinator, and their Business Guides to achieve the quickest possible start in their businesses.

Serves a Wide Variety of Industries

8.  Expense Reduction Analysts is committed to finding the cost-savings solutions that work for a client’s organization. ERA consultants have assisted organizations across numerous industries including healthcare, manufacturing, professional services, as well as the non-profit sector, to find meaningful savings that can be put back into their businesses’ initiatives. The industries that ERA serves include:

• Automotive;
• Communications, Technology, and Utilities;
• Construction and Engineering;
• Educational Services;
• Financial Services;
• Health and Social Services;
• Hospitality and Catering;
• Manufacturing;
• Public Sector;
• Nonprofit;
• Professional Services;
• Retail and Wholesale Trade;
• Transport and Logistics.

Company History

9.  Expense Reduction Analysts was founded in 1992 by Fred Marfleet in London, England. Marfleet had always had an interest in finance and business, and spent several years working in the financial services industry before starting ERA. During the early 1990s, the global economy was experiencing extremely tough prospects as a result of recession, but Marfleet felt that it was the right time to start a small consultancy business.

10.  In the early days, ERA attracted people wanting to become consultants along with small professional firms wanting to add another service to their portfolio. This proved to be a hugely successful formula and by 1997, Marfleet began franchising the Expense Reduction Analysts concept across the United Kingdom and Australia. ERA later expanded to the United States as well as several other countries.

11.  Today, Expense Reduction Analysts has a strong global presence in more than 40 countries and Marfleet continues to serve as the company’s executive chairman.

Entrepreneur’s Franchise 500

12.  Expense Reduction Analysts did not rank on Entrepreneur’s 2021 Franchise 500 list. However, it did rank No. 106 on Entrepreneur’s Top Global Franchises list in 2020.

Section II – Estimated Costs

• Please click here for detailed estimates of Expense Reduction Analysts franchise costs, based on Item 7 of the company’s 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Expense Reduction Analysts’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  147
• Outlets at the End of the Year:  149
• Net Change:  +2

2018

• Outlets at the Start of the Year:  149
• Outlets at the End of the Year:  130
• Net Change:  -19

2019

• Outlets at the Start of the Year:  130
• Outlets at the End of the Year:  118
• Net Change:  -12

Company-Owned

2017

• Outlets at the Start of the Year:  6
• Outlets at the End of the Year:  4
• Net Change:  -2

2018

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  0
• Net Change:  -4

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• The following tables present unaudited information about the historical Net Cumulative Receipts generated by 101 of Expense Reduction Analysts’ Regional Franchisees operating a total of 108 licenses for the period from January 1, 2019 to December 31, 2019 (the “2019 Fiscal Year”).

• This is a historic financial performance representation of active Regional Franchisees that operate a franchise substantially similar to the type offered in the Disclosure Document.

• The franchise information contained herein does not include data for (i) area franchises; (ii) company-owned and company-affiliated outlets; (iii) the 6 terminated, 4 who ceased operating, 12 not renewed, and 1 mutually-suspended Regional Franchisees, where suspensions are typically agreed-to for medical, special circumstances, or other similar reasons; (iv) the 4 inactive Regional Franchisees; and (v) the 6 Regional Franchisees that began operating in 2019.

Part 1 – Net Cumulative Receipts of Regional Franchisees by Range for 2019 Fiscal Year

Top 25%