Category: Research Franchise

Using A Proven Method To Find The Right Franchise

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.

Click Here for Our Shortcut.

 

Dirty Words in Franchising

Secret

The Value in the Fees

Just about every time we speak to a person who inquiries about a franchise, they get turned off by the franchise fees, advertising fees, royalties and other fees a franchisor assesses their franchisees.  We get that.  As multi-unit franchisees with about $3,000,000 in revenue – we paid a lot in advertising fees and royalties.  There were a few months during the recession where we paid the franchisor more than we paid ourselves.  Were we angry – yes, if you want to be truthful?  Who wouldn’t be? 

So why not go it alone?  We get people who opt to do that.  We do not suggest that because you have to create a brand and trademark it, set up your operations platform by either finding something out of the box or paying a programmer to customize a system just for you, write your operations manual, write your HR manual, figure out who your ideal employee is (there is an art to finding a person who will fit into your culture), hire an accountant to set up your chart of accounts and figure out how to measure your key metrics, find the right retail or office space and figure out how much you really need, design your space to accommodate the needs of the business and you can see this is a very long run-on sentence that I could continue for at least 10 more lines.  Basically, I just scratched the surface of what your initial franchise fee pays for.  I also did not mention the time it saves.  We all agree time is money and many people run out of money just trying to get those doors to open.  We have seen many “mom and pops” with the coming soon only to see them go out of business in a few months because they spent too much money just trying to open.  To be fair, we have also seen franchises do the same.  Those people were also undercapitalized and did not get a realistic picture from a broker or a franchisor about what it will take to be successful. 

Does $25,000 to $50,000 sound a little bit more reasonable?  Here is another dirty little secret in franchising.  Franchisors lose money in selling the franchise.  They are looking long term in revenue from royalties. 

The next dirty word.

Like I had mentioned, we paid a lot of money in royalties.  To be perfectly honest, the support we received was sometimes very disappointing and we sought outside coaches and advisors.  You may have to do that too.  But what do royalties really get you?  I had mentioned support, but what is more important is the operational platform and backbone to automate and measure your business.  When we sit in on initial calls with our clients, we are always amazed at how much technology is woven into an operating system.  For example, you want to open a handyman business.  Seems simple enough, buy a van, wrap the van, buy tools, stock the van and start marketing.  Cha Ching.  If you bought a  Handyman Connection, for example, you would have their training, be coached through their quick start program, have a call center answer your incoming calls and schedule appointments, when the job is bigger than a simple quote – estimating software, and an Uber backed program that allows your customer to see who is coming and when.   Their software is so granular, you can see exactly where you are making money and where you need to improve your margins instantly.  Knowledge is power in your business.  I also forgot to mention they have national contracts with many retailers, real estate companies, and discounts. 

Still not convinced? 

Corporate Visit

Our First and Only Corporate Visit

At the time it seemed to be a waste of time. We understood the concept – non-medical in home care for seniors. We knew it was going to involve managing a lot of people. We knew they had a system in place and other franchisees were successful even though it was a new franchise. We jumped in our car and decided to take a road trip out to Dayton, Ohio to visit Comfort Keepers. Why not combine seeing America and have a little fun on the way (I fell in love with the city of Pittsburgh, it is really a neat city).

We drive up to the office building excited. We were not sure of what to expect and what type of dog and pony show we were about to see. Clustered together with some other couples we were herded into the conference / training room and the founders began to talk about how their company started and the need the fulfilled in their community. We began to relate their experiences with our own family members and saw how we can make a difference in the lives of others. SOLD.

More Research

Were we being too hasty? We had only visited 1 franchise and there was one more like it we knew about. Why not look at the competitor? What was their corporate culture like? We seemed to fit in with Comfort Keepers. Calls were made to some of the franchisees, we asked my Dad, who is a CPA to look at their Profit and Loss and Balance Sheet for us and to give us questions to ask about the soundness of their company.

We still had jobs. We were beginning to hate what we were doing and how we were being treated. The thoughts of taking control of our lives was dominating our conversations. The fear of doing something new would always bring us back to the fact that we still had jobs. One by one our colleagues began to disappear. Mike and I realized the clock was ticking faster and it was time to say yes.

More Research

Were we being too hasty? We had only visited 1 franchise and there was one more like it we knew about. Why not look at the competitor? What was their corporate culture like? We seemed to fit in with Comfort Keepers. Calls were made to some of the franchisees, we asked my Dad, who is a CPA to look at their Profit and Loss and Balance Sheet for us and to give us questions to ask about the soundness of their company.

We still had jobs. We were beginning to hate what we were doing and how we were being treated. The thoughts of taking control of our lives was dominating our conversations. The fear of doing something new would always bring us back to the fact that we still had jobs. One by one our colleagues began to disappear. Mike and I realized the clock was ticking faster and it was time to say yes.

In the beginning

Time for a change

We never looked back

We bought our first franchise (YTD we have owned 6) back in 2001 pre 911. The economy was about to go through a Tech Bubble and we lived in Northern Virginia – just about a perfect storm. There is never a perfect predictorIn th of how outside conditions can influence your outcomes.

I knew my job at US Office Products was going to disappear as we were purchased by Corporate Express and I did not fit their corporate mold and Mike knew his days were numbered as the Tech Startup he worked at was cutting fat in order to be sold (laying off employees with false stock promises). This was in May of 2001.

At that time we began to look at our resumes riddled with jobs that lasted 3 to 5 years and the thought of having to look for another job every few years was most unappealing. That was the beginning of the “new economy.” We needed to break the cycle.

We took inventory of our skills and experiences. We did a SWOT analysis. We searched the internet. We visited some franchise brick and mortars. We researched and researched and then we asked my Dad for advice. We bought a book about franchising and read that cover to cover. Then we began to trust our instincts.