I am here to tell you there is a way to overcome that fear, franchise business ownership.
The franchise business model is a proven formula that you can easily follow. It is a great way to be in business for yourself and not by yourself. That is why there are 773,603 franchise establishments in 2019 and franchising a major driving factor in the US economy.
Trying to find the right franchise can be frustrating. After all, there are nearly 3500 franchises in the world today.
For most people, they have no idea how to determine if a franchise opportunity is right for them.
Finally, who do you trust?
All of this leads in two directions. You get stuck in what we call, “Paralysis by Analysis” or you just give up and look for a J-O-B (which is why you started looking in the first place). In either case, the major factor is fear or just lack of knowledge about the opportunity.
So what is a good shortcut to finding the right franchise?
Start by understanding your strengths and skills. This will save you time and frustration in the long run.
How bad do you want to be your own boss? Use our shortcut, it only takes about 10 minutes and you will learn your strengths, skills and more importantly what business culture is the best fit for you.
We have been providing ATM services since 1996, began offering ATM franchise opportunities in 2003, and we now have more than 240+ franchisees that own and operate 2,250+ ATMs in the United States and Canada. We’ll find qualified locations in your area, negotiate and obtain the contract for the placement of your ATMs.
You probably never consider what was an “essential” or “non-essential” business until the Coronavirus Pandemic. You probably never thought we would see a time when ONLY “essential business” would remain open. It has been left up to state and local governments to determine which businesses are essential or non-essential. But there have been many businesses that have been deemed essential by everyone.
I thought it might be interesting to start a list of franchise industries that are open and doing business. When you think about all the advantages of buying a franchise over starting from scratch, no one ever considered a national shutdown. Franchisors have been working hard to help their franchisees during this time. The type of support that a stand-alone business would not have access.
Here is a list of industries that are still open:
Disaster, Recovery, and Restoration
Packing and Shipping
Fast Food (that have Drive-Thru or can offer Curbside service)
Deciding to start a business is exciting and scary. There are many considerations but depending on your business plans and overall goals. Choosing to buy a franchise can help solve many of the problems when starting a new business, especially if it is an established brand with a loyal consumer base. It does not solve then need for financing. You may still need to find financing. Here are several options and we are here to help you find the one that works best for you.
A great option for financing is from the franchisor directly. Granted, this is not offered through every franchise, but a growing number of reputable businesses are offering this potential funding solution. In fact, several companies even help to guarantee the loan in case of franchisee default. If interested in franchisor funding, then look under item 10 of the FDD to see if it is offered.
The Small Business Administration offers partial guarantees to third-party lenders to help reduce the risk of lending to new ventures or franchise developments. Many franchisors are approved by the SBA, meaning that the loan process is streamlined, not guaranteed. The 7(a) loan program is the most beneficial program for franchisees and has a cap of $2 million.
Family and Friends
While it is a nice idea to partner with family or friends in a business venture, it is vital that the details of the partnership are laid out in a legally binding agreement. These agreements offer clarity and specify obligations, which help to avoid potential personal and professional conflict later.
Many online lenders may be happy to work with a new franchisee, but not everyone is aware of this potential marketplace. There are several websites available that act as intermediaries between lenders and borrowers. Essentially borrowers create a loan request, the intermediary site then posts the request to its pool of potential lenders to find a suitable loan match, which can be a line of credit, bank loan, SBA loan, etc.
Retirement and C Corporations
One of the last options available to a franchisee is to use their retirement accounts. Now, since there are penalties for removing these funds early, they can establish a C corporation, which would then be the owner and operator of the business. The franchisee can then roll their retirement accounts into the corporate account, investing it into the newly formed company.
A franchise can be a great opportunity and funding may be difficult, but we are here to help you navigate all the challenges of business ownership and financing.
Owning your own business can be life-changing. The difference between a good life change and a bad life change is having the right expectations from the beginning. Knowing the reality of owning a business is your first step toward success.
Here are some of the misconceptions people may have:
Buying a business will solve my near-term
A business will quickly replace my lost
There will be immediate cash flow/profit
I can start a business without any money down
There will be no additional investment needed
after the initial purchase
The business will create wealthy on Day One
Here is the reality:
A new business will not solve any short-term
financial needs. In fact, it can do just the opposite. A new business may not
show profits for 6-month, 12-month, sometimes 24 months, or more.
You may need to put money into the business to
help it grow. Therefore, you may not see a salary for 6 to 12+ months.
Wealth creation may take longer than you think.
Many people do not understand revenue, cash flows and profits. Just because you
received $100 in sales does not mean you have $100 in your pocket.
Quality of Life misconceptions:
Once I open the doors, people will be coming in
I can take a lot of time off
Other people can run the business; I will manage
from a distance with minimal effort; or I will just hire people to run the business
I can just hire friends and family without
regard to whether they are the best fit for the job
I can buy personal luxuries to appear successful
i.e. going out and buying a BMW to show people I am a successful business owner
The reality of what your life may look like as a business owner:
When starting a business, you may need to put in
long hours or be “hands on.” You will need to understand the day-to-day workings
of the business. You may be working more hours than your current job. Nobody is
going to have the drive or incentive to start and grow the business the way you
will. Remember, you just invested thousands of dollars to start your business.
You should want to know how the business works.
All this work is not the long-term solutions.
Your long hours will pay off with the ability to hire the right management
staff and you will have gained an acute knowledge of expense management which
is critical to your business survival
Myth: Buying a franchise will Guarantee success
Reality: There is no guarantee of success when starting a
business. A franchise can provide you a better chance for success but it you
are not the right fit, don’t dedicate yourself to its success or don’t follow
the system, your business can fail.
Myth: The franchisor provides you solutions for all your
business and business owner is different. There
is no “cookie-cutter” business. A franchise provides a system that has been
proven to be successful many times over. If you follow their system, your
chances of success will increase but it may not solve all the problems you may encounter.
You must be able to solve problems and come up with creative solutions.
Myth: A franchise is a business that can run itself
Reality: A franchise
has a proven system, but it cannot run itself. It needs a strong owner to
ensure the system is being followed. That is why finding the right franchise
that fits your business style is important. You can launch a ship into the
ocean but without the right Captain, it will just float aimlessly.
Myth: The franchise will provide support to prevent failure
Reality: A good
franchise will provide you initial and on-going support to help you become
successful. That does not prevent a bad owner from performing poorly. The owner may ignore the system, they may not
put in the hours need to run the business or just may be a bad fit.
Myth: If my business fails, I am only out of my initial
financial losses could be more far-reaching than you think.
When starting your business, you may get a loan
or take out a second mortgage. If you take out a loan you will need to make a
personal guarantee for that loan. If your business fails, you still need to pay
off that personally guaranteed loan or you may lose your house.
If you leased any equipment, you will still need
to make payments
If you leased retail or office space, the
landlord will still expect you to make payments
The franchise will expect you to pay future
You may incur litigation costs
Owning a business is not for the faint of heart. There are
many risks that you must take into consideration. You must weigh the rewards
against the risks.
What are your long term goals? More time with family? Wealth
creation? Work for yourself and not others?
If you are willing to put in the time and effort, business
ownership can be a path to reaching those goals.
Once you understand the realities of owning a business, the next important step is finding the right fit.
If you would like to explore which franchises are a fit for you, start by completing our Business Profile Assessment: Click Here to Begin
Not everyone is suited to own their own Franchise. We have spoken to many people who are perfectly happy working for someone else. Here are some Facts and Stats you may find interesting.
Employee- Facts & Stats
Average American works >8.5 hours each day. This means more time spent working than:
Spending time with family and friends
A typical 40-year career which consists of working 50 weeks a year, 8.5 hour work days, will mean working 86,000 hours for the average Americans lifetime.
The average American will spend over $600K in interest throughout their working life.
Only 45% of Americans ARE satisfied with their jobs. This means that the majority (55%) of Americans are unsatisfied with their current job.
16% drop in job-satisfaction in just over 20 years
Unsatisfactory rates spring from disappointment in benefits, job stability, and growth
26% of Employees were dissatisfied with the outlook on potential future promotions (up from 19% in 2008)
Less than 50% of employees were completely satisfied with their job security; with 30% of workers being worried about being laid off in the near future.
Roughly 34% of employees were dissatisfied with the amount of on-the-job stress.
There are currently more workers than jobs. This causes most workers to stay in these less-than-satisfactory conditions.
As an employee, you are capped at contributing $16,500 pre-taxed into retirement fund annually; a business owner can contribute up to $50,000, pre-taxed.
The average account balance in retirement plans according to an Employee Benefit Research Institute (or EBRI) study stated that participants in their 60’s had saved $144,004. Retirees should pull money from their 401k account at a withdrawal rate of 4%/year. When they allowing for an adjustment in inflation, this provides the average 401k holder in their 60’s an annual income of only $5,760, or $480 each month.
The poverty level for 2011 was set at $15,130 (total yearly income) for a family of two or $1,261 a month.
According to the 2010 Census Bureau, 79% of the population is a salary or private wage employee. Of that 79%, only 3.9% were earning more than $200K per year with the average working American sitting in the $50-$75K range.
Business Ownership and Franchise- Facts & Stats
Two-thirds of all American millionaires are business owners.
In a study by Scott Shane, a franchise scholar, the success rate of a franchise (62%) is nearly double that of an independent business (35%) after 4 years of operations.
In 2011, franchise establishments employed nearly 8 million people with 735K units.
“Active” Baby Boomers not quite ready or able to retire are turning to the $1.5 trillion segments of franchise businesses.
As a business owner, you could be making the same amount in your business as in your last employment. However, you can keep more of your earnings with smart & legal tax deductions.
As of 2009, entrepreneurial efforts in the U.S. were at a 14 year high, with 558,000 new businesses being started each month. It’s great for the economy and it’s an excellent opportunity for the business owner. Today, labor is abundant and less expensive, equipment and resources are discounted & real estate and rent is lower.
Based on a study of an entrepreneur followed by the FBA in 2010, the initial investment, such as time, money, commitment, and frustration were all drastically reduced when investing in a franchise versus starting an independent business. The franchise business offers support, provides the opportunity to become passive and also has a considerably shorter learning curve (on average 9 months vs. 2.5 years).
With a franchise, you often have sales assistance available.
Upon purchasing a franchise you are provided an FDD, or Franchise Disclosure Document. This document includes all the background information of the franchise.
How many years it has been in business
Lawsuits and litigation history of the franchise and its executives
Initial and ongoing costs
Outlines what the franchisor offers to a franchisee
A list of current and former franchisees
The franchise financial statement and earnings information when it is available
As a business owner purchasing a franchise you are provided with a complete system. You can be confident in your marketing plan, benchmarks, goals, and support that are required to make your business thrive.
Thousands of franchises are available; some are brand new (under 1 year) and some have decades of industry experience.
There are a plethora of options available with franchise systems. Some franchises allow you to operate out of your home; have or have no employees; have or have no inventory or be a passive owner.
Banks are more likely to loan money to a successful franchise. They are willing to do this for a franchise compared to a start-up business because of a lower risk of repayment default.
The purchase of a franchise is a major decision. You should only make that decision after retaining and consulting with competent legal and business professionals.
Employee Facts and Stats
Information can be found in The United States Department of Labor, The Bureau of Labor Statistics
A fact mathematically taken from the chart found on The United States Department of Labor, The
Bureau of Labor Statistics website above.
Sources are cited within the graphic from Credit Loan
This information can be found in the fifth paragraph on http://www.irs.gov/pub/irs-pdf/p560.pdf
Information about Retirement Savings and 401k’s http://www.mint.com/blog/planning/cheer-up-yourenot-as-far-behind-on-retirement-savings-as-you-think/
The figures are the 2012 HHS poverty guidelines as of January 26, 2012. (Source: http://aspe.hhs.gov/poverty/12poverty.shtml)Monthly percentage data calculated by FHCE and rounded to the nearest dollar.
A Franchise Brokers Association Independent Study
Business and Franchise Facts and Stats
Information can be found in The Entrepreneur Café, LLC website
Quite simply, your net worth is your assets minus your liabilities. This is probably the most the most important factor for obtaining a franchise. So, why is this so important to a franchisor? The franchisor is putting their name on the line and they need to know whether you are the right person to move their brand forward. The relationship between you and the franchisor is one of mutual benefit. The more successful you are the more successful the franchisor. Your financial condition will become a factor but it is not the only factor.
The Franchise Disclosure Document (FDD) and other documents will tell you the net worth the franchisor requires. They expect you to have that money in hand before dealing with them. But rest assured that they will look at other factors, such as management experience, “people-skills”, and various additional relevant background. If you can show adequate access to capital, a franchisor will overlook your “less-than-adequate” net worth. Other capital may include an SBA-approved loan or money from family and friends.
A good franchisor will not make a decision based solely on your net worth. If they do, they can turn out to be an unreliable franchisor that is just looking to sell a franchise and not begin a mutually beneficial relationship. A good franchisor will make sure you are a good overall fit for their organization. The net worth is an easy starting point for the franchisor because they know, from experience, what it will take to start a new franchise on solid financial ground. The number one reason businesses fail is because they are undercapitalized.
How do I calculate my Net Worth?
Net Worth is the value of what you own minus what you owe. A positive net worth would mean the value of everything that you own is greater than the amount that you owe. A good thing. If your net worth is negative, then you owe more than the value of what you own. A bad thing.
Your first step is to gather and organize all your information regarding your assets (what you own) and liabilities (what you owe). This can be a big task if this is your first time. But, once you do this, it will be easier to keep the information organized.
Assets are everything you own. They can be broken down into a few difference categories: tangible, equity, fixed-income, and cash/cash equivalents. For all your assets, list and assign a dollar value.
Tangible assets are items that have a physical form, such as; your home, vacation home, rental properties, furniture, cars, recreational equipment, art, and jewelry.
Equity Assets are your ownership interests in businesses, such as; stocks, variable annuities, limited partnerships, and retirement accounts.
Fixed-income assets are long-term investments that pay you interest on a fixed schedule, such as; US government bonds, municipal bonds, mutual funds.
Cash and cash equivalent assets are short-term accounts and investment that can be cashed in immediately, sometimes referred to as “liquid capital.” This typically includes: checking and savings account balances, money market funds, certificates of deposit, other cash on hand.
Once you have these items listed and a dollar amount associated with them, you will add up everything for your Total Assets.
A liability is any money that you owe to a person or business in exchange for an asset. For each liability, you need to write down the dollar value that is still owed. Liabilities include; home mortgage, other mortgages (vacation or rental properties), home equity line of credit, home equity loan, car loan, bank loan, student loan, personal credit line balances, credit card balances, personal loans, and any other money that you owe. Once you add up the dollar amount for each liability, you will have your Total Liabilities.
Apply the formula
The final step is to apply the simple formula:
Total Assets – Total Liabilities = Net Worth
Who said high school Algebra was a waste of time?
There are many tools on the Internet to help you calculate your net worth. Yahoo offers a simple calculator:Click Here
If you are considering the purchase of a franchise, knowing your net worth is a good start. Another good step is to Pre-Qualify for a loan in the same way you would pre-qualify for a home purchase. This lets the franchisor know that you are a serious prospect. In many cases, a franchisor receives hundreds of inquiries every month and you want to stand out. To see how much you qualify for, visit our pre-qualification portal:Pre-Qualify for you new franchise by clicking here
Would you feel comfortable attending an annual conference where one of the activities is careening down a mountain with a crash helmet trying to beat someone’s time or attend a meeting where one of the activities is attending a professional baseball game? Both franchises are fitness franchises – which do you fit in? Maybe somewhere in the middle?
Culture is the backbone of the organization. It is the sum of beliefs, attitudes, work style, and standards that create a unique brand. It is their WHY. It is what UNIFIES them. It is how the organization STANDS OUT amongst their competitors. It gives the system DIRECTION as to how they conduct their daily business. A unified culture allows the people within to work better together, learn from one another and be the best they can be. Every company has a culture. Culture has a dramatic impact on bottom-line, thus getting in sync important.
The research our profile uses is based on Robert Quinn and John Campbell’s cultural indications. They studied how culture motivates behaviors and saw key indicators bet
ween cultural compatibility and performance. Take a moment to think about your career and where you felt comfortable within an organization or when you saw someone that just did not seem to belong. Where is your mojo? Working in a collaborative, creative, controlling or competitive environment? Those are the basic types of culture simplified.
A controlling environment is one of unity, stability, integration and an internal focus. There are rules for accountability along with incremental and long-term goals. The system controls how to deliver the product or service – what is the next step or when to do it. People appreciate and accept the system, like working within the box and follow a chain of command. Work is undertaken with a sense of collective purpose and direction. This type of system is the hierarchical structure – policy is dictated from the top down.
Why Company Culture Matters!
Imagine working within a system that makes you feel that your opinion or insight is not important? This is how we have done things around here for 30 years is your standard reply. How long would you last here? How would you feel working in a large organization? Are power and status important to you? Are you more comfortable inside the box? Are you looking to be a multi-unit owner? This type of culture may work best for you.
A collaborative environment fundamentally different from the vertical, hierarchical structure of the controlling environment. Flexibility, dynamism, internal focus, integration is dominating features of this culture. Here is a system where best practices are shared and there is more of a give and take between franchisors and franchisees. This system will be early adaptors of franchise councils and will look to their franchisees for input and feedback. There is more of a family feel to the organization. Everyone works collectively with a shared vision. All talents are respected.
Are you the type of person that works well with others? Are you able to set aside your ego for the collective? Do you like working in a mentoring system or would you be more independent? Do you have patience to collectively turn a ship around when it comes to change? Can you work diplomatically?
A creative environment is the most flexible and dynamic type of culture. It is the most innovative, fast moving, and most adaptive to quick changes in the marketplace. Their external focus is what allows the organization to stay ahead. To foster a creative environment, there is a high level of trust amongst all participants. This is an organization that is not afraid to make a mistake.
Are you able to easily adapt and find a team of diverse employees that are adaptable? Are you a high-risk taker? Are you yourself innovative and flexible? Can you work within a less structured environment? To foster creativity, you must show your employees that you have a high level of trust in them – are you comfortable if they mess up? Do you need stability? Can you herd cats?
The last type of culture is the compete culture. This system has an external focus like the creative culture but there is a need for systems to fit the innovations. There is a pulse on the market with a constant need and desire to do things better, cheaper and faster. This is a hard driving, goal orientated winning system. They form strategic alliances and partnerships to get better market share and penetration. While not being averse to risk, this system is not as innovative, warm or friendly. Their goal is to produce the best financial results.
Do you have a dominate personality that can get their point across clearly and concisely in a meeting? Do you constantly think about how you can do things better? Are your feelings easily hurt? Can you work in a demanding, goal orientated environment? Are you comfortable with some risk – or are you comfortable going “all in”?
Most people are a combination of cultures. There have been as many as 39 different company cultures identified by people in lab coats. What we try to do is the best match you with a type of cultural that will allow your talents to thrive. There are about 30 different fitness franchises out there. Each with a different culture and way they go to market. Knowing where you would best fit in with help you be happier and more engaged.
Per Dr. Stuart Brown:
Happy employees perform 20% better.
They are 12% more productive.
Take 10% less sick days.
They have 37% higher sales.
Are considering buying a franchise?
We have a scientific tool that combines both topological and dimensional scoring to achieve greater accuracy in predicting business success. So, if you are thinking about buying a franchise, take our test for FREE. Click on this link: FREE Business Profile Assessment
We want you to be happy – we just won’t sell you a franchise based on a commission.