Starting a franchise?Better have a lot of capital backing.

All,

Working with franchisees can be very time consuming. I apologize for the long time between posts.

We all know the economy is tanking and it will probably be 5-10 years before it is completely back to where it was. Tough times brings both opportunity and risk. Warren Buffet says "Be greedy when others are fearful, and fearful when others are greedy." Are you in a position to be greedy? There are plenty that are fearful.

As far as franchising, I think that being under capitalized is one of the biggest mistakes I see and hear about. When someone is looking at buying a franchise, they are told that they need at least a year of income set aside because it will take time to see a profit. I would make them have two years of income put away. Two years plus enough money to market through both the first and second years.

If you tell the person that is trying to sell you a franchise that you do have a years worth of money to fall back on, is that sitting in an account ready or would you have to sell a house or cash in a 401K? What if you suddenly you are up-side-down on your house like 50% of the people in America? What if your 401K is suddenly worth 40% less? THIS JUST HAPPENED!!!!! To lots of people.

Please don't tell me that you borrowed on the equity of your 401K to buy your business or to live on, and now that is gone.

Be very careful if you are thinking about starting a business. I would definately look at buying a failing business that has been running for awhile, but has been mismanaged or the people have to leave for personal reasons. A brand new business or brand new location - no way. Everyone is hanging on to their money tight and buying few new things.

Fran Rep

Independently Owned and Operated

As I checked into a hotel today, I was thinking about the sign on the wall behind the clerk saying that old term we all have heard, "Independently owned and operated". How can this be independent when it is a Holiday Inn Express and they all have the same logos, cups, priority club, cinnamon roll breakfast, advertising, etc? At what point are they independent and at what point are they a rank and file franchisee?

If you are looking at buying a franchise, this is an important point. You need to find out what is an "in stone" franchise operating system issue and what freedom do you have to change anything. Every franchise is different so you will have to ask before you buy.

I know that with some fast food franchises you get to choose your location to build, have some choices about interior, etc, but it is just a choice between this version of Jack in the Box interiors or that version of Jack in the Box interiors.

Are franchises independently owned or do they just have a license to do business as the franchise? Are they independently operated? Not really. Why would someone like me be coming around making sure that everything is done according to the operating plan for the franchise?

If you already have a franchise, just remember that you do not "own" anything except whatever you would take home if the the franchisor decided to take away your license and close your doors. Independently operated? Just as long as it is by the book.

Franchise Visit Agendas

Greetings,

There was a comment/question on the last blog about agendas. Please read the question and answer.

Having an agenda is a great thing. Sticking to the agenda even loosly is an even better thing. I suggest both sides have a written agenda for a visit. Actually, it shouldn't be called a visit, it should be called a "business consultation". That helps make it more professional and have a great likelyhood for it to accomplish something. You relatives come to "visit".

First, either the representitive should call and ask you about coming for a business consultation and asking for an meeting day, time, agenda, and time period available.
It works the same way if you call as a franchisee and set up the appointment. Then the rep should type out the agenda with your issues and their issues with approximate times alocationed for each topic and send it to you. If you told the rep you have 2 hours to meet, but the agenda is full enough for 6 hours, then you should be able to select the critical issues that you wish to cover or change the time you will have to spend together before it is finalized.

I do this, and then I double check that everything is set before I make plane reservations. Then I send the franchisee a reminder email about the vist, then I call again a couple of days before I show up.

Unfortunately, about 1 in 20 visits, I arrive to find the franchisee gone or too busy to meet and I am redirected to a secretary. I am not happy when this happens. Aside from being rude, it is a tremendous waste of money and the franchisee will be put on my list of people I rarely visit, unless it was unavoidable.

Franchisees, please keep in mind that I am coming to help you and we only have so much time each year together. If I arrive and you want to ignore the agenda and spend your time telling me about your vacation, kids, going to the bank, and taking every call that comes in the office, I will still be sorry when you go out of business.

Fran

I'm Coming To Visit

Hello Franchise,

I'm going to be in your area in two weeks and I want to come by for a consultation.....

What are you thinking at that point? Let me guess.

I'm too busy. I don't need anything. I don't want to be inspected. I don't want her to see what I am doing. I don't want to hear the latest propaganda from the corporate office. She is just a spy for the corporate office. She is just looking for something to write me up for. I haven't done anything she asked me to do last time she came. She is going to hit me up for the paperwork I havne't turned in.

What am I thinking? You might be surprised.

I want to be kept in the loop of what you are doing so I can help you stay on the right path. I need to be able to tell the corporate office how you are doing. I want to make sure you know about all the new programs we are launching. I want to know if you need any special training so I can get it arranged. I want to find out what you are doing that is working well so I can pass it on to the other franchisees.
I want to make sure that the customer is getting a consistant experience so the brand is protected and everyone's business stays valuable.

I am comming to visit you in a couple of weeks and I hope you have your agenda of things to talk about ready so that we talk about what you want to talk about, not the list of things that just went through your mind when I said I was coming.

Fran

Franchise Consistancy Part 2

Hi from the road,

Last time we looked at the question of whether or not it would be OK to start selling diet ice cream if our franchise didn't offer diet ice cream.

It might not seem like a problem, but what happens to the customer who buys diet ice cream and likes it, but gets mad when she stops at another store in the same franchise just to get that diet ice cream and then finds out that they don't carry her favorite ice cream that she made a special stop for. The customer's expectations have been confused and let down.

What if the customer doesn't like the diet ice cream and it even makes her sick. She complains to the main corporate office. Then what? Not only does that make you look bad, it reflects on all the same franchisees.

What if you are out there doing things your own way not following the operation plan and then you decide to sell the business. What kind of value do you think it has? If it needs you to run it, and you have been making all your own decisions, and it isn't like the other franchises, then why would they buy it? The further away you are from what are you supposed to be, the less the value for both you and other franchisees associated with the brand.

Remember it isn't about you. It isn't about the franchisor. It is all about the customer and the organization as a whole. Think back to why you bought a franchise. You wanted to be part of a team and part of a whole.

Come on back to herd....or at least come back to the ranch.

Fran

Franchise Consistancy-Is It Important?

Greetings from the Arid Southwest,

Is franchise consistency important? If you go in McDonald's would you be surprised to see them serving BBQ sandwiches? Or course you would! Would it upset you? Probably not, as long as they had "added to" not "substituted for" whatever you came in for. That is the way many franchisees think.

It is important for all franchises to have a consistent operating system and for franchisees to know how important it is for them to follow it. When franchisees go down a different path, they devalue the brand for everyone. It is the responsibility of the franchisor to protect the brand for all the other franchisees.

What if the operating system doesn't work for everyone all over the country? What if you have an ice cream franchise in a city where people are very weight conscious but your franchise don't offer sugar-free ice cream? You know you would sell a lot of sugar-free ice cream.... Nobody would probably even find out.....What harm would it do? We'll talk about the harm next time.

Fran

Franchisees I Don't Like to Visit

Franchisees I don't like to visit are rare, but there are a few with traits I don't like to be around,

Franchisees who are "know it alls" and argue with everything I say. I don't mind if they will listen, then we can discuss different points of view, then we can agree to disagree, but outright arguing that they know better about everything, even if they don't have any experience yet in business.

Franchisees who think we are all call 24/7. I do work a lot of extra hours and will often answer the phone on vacation or nights. Having a franchisee outraged that I didn't get their call on Saturday or Sunday doesn't help my wanting to go out of my way for them in the future.

Franchisees who think they should receive "special attention" because they have my money or think "they have more potential" than someone else. You do not move to head of every list just because you think you should. Every franchise agreement says support will be given as the support person deems necessary.

Franchisees who think you should always buy their meal because you have an expense account and because they pay royalties. Royalty money is paid to use the brand, not to buy all future lunches and dinners when you are visited.

In general, franchisees are a joy to work with and I enjoy visiting them and being part of their business and helping them be successful.

Fran

Franchisees I Like To Visit

Hola from the deep South,

Other than a couple of personality clashes, I like all the franchisees I am around, but some I like better than others. Here are a few things I appreciate from the franchisees or like to be around.

• Coffee is ready when I get there in the morning and is offered to me right off the bat. The only thing worse than not having any coffee to drink for a morning meetings, is having smell coffee and eventually break down and ask for a cup.
• Franchisees who ask my opinion and then follow it.
• Franchisees who treat me like a friend and offer to make my stay in town better by offering to go to dinner or do something social.
• Franchisees who buy my lunch occasionally, even knowing that I have an expense account.
• Franchisees who thank me for coming there and even tell me how much they appreciate my help. Yes, it's my job, but I go above and beyond and they realize it.
• Franchisees who have done what I asked them to do since the last visit. I helps me feel like I am making a difference and it helps me not be judgemental about what I think they should have been doing with their time.

Next time, franchisees I don't like to visit,

Fran

SKYPE - Use It To Keep In Touch

Franchisees and fellow franchise field reps,

Are you using Skype? Never heard of it? You can put a small webcam-microphone combo in your pocket and look at your franchisees while you talk to them if they have one. They can at least see you, if they don't. If they do have one, they can walk the laptop around if they have wireless internet and show you thing they want you to see, like a broken machine or something on a computer screen.

Franchisees can see each other with Skype. This is important if franchisees are in remote areas and aren't close to other fellow franchisees. Sure they talk on the phone, but they feel like they are getting to know the other person better when they see them.

Use Skype to have meetings. Travel costs are going up. One of the best webcams is $100 or less. That is cheap compared to holding a meeting and getting people all together. Maybe your company would pay for part of the cost in exchange for you visiting as often. YOu can have one franchisee on the line, or as many as your want. Having a meeting, but somebody can't make it because they just broke their leg? Have them log in to Skype and you have your webcam hooked to your laptop and it will be the next best thing to being there.

Skype is free. Free. You can talk to your franchisees AND see them, AND it is free anytime of day.

Some company used to advertise "The next best thing to being there" I don't remember who it was, but it should have been Skype.

Fran

Franchisees-Death, Taxes,Royalties, Part 3 Death

Franchisees or franchisees to be,

Death is inevitable. We all know that. Please set your franchise up with that in mind. The franchise company I work for has had several unexpected deaths of franchisees the last two years.

One franchisee was killed in a freak accident. His family didn't know much about the business, the franchise went into probate since he didn't have a will. The franchise business he had worked so hard to build went down to nothing and the doors were shut.

Another franchisee had cancer and had time to set things up properly, but didn't. He did have a will, but not a trust. It was a mess once again, the family wasn't prepared to take over the business and a buyer was hard to find.

Like not offering accounting advise, I will not give law advise, except to say, please consult both a lawyer and an account when setting up your franchise. The old saying "expect the best, but prepare for the worst" would be a good rule of thumb.

Don't let your family down after working so hard to build your business.

Fran

Death,Taxes, and Royalties Part 2 Taxes

Hola from New Mexico,


Franchisees have inevitable events to face. Among them are Death, Taxes, and Royalties. In part 1 we decided that Royalties are like taxes, the money isn't yours.

Taxes, it is that time again. It amazes me how the same business tax code can be interrupted so many different ways. I can visit the same same operation, with the same amount of employees, and in the same ballpark income wise, and the variation of expenses is amazing. I won't go into what I think you can and can't write off your taxes for a tax break, because I am not an accountant, but I do have some tax advise.

First of all pay what you owe. That shouldn't have to be said.

Second, send in your franchise income tax reports by April 15th. Unless it can't be avoided, do not get an extension until Oct. 15th. How can we figure out how you did last year if we wait until you get everything put together by April 15th. Let alone October 15th. I have people wanting me to help them plan a fall budget in September who haven't even put everything together from the year before. They won't have it together until October 15th!

Third, get a good tax accountant. Not just your brother-in-law that is a CPA. Get someone that knows all the ins and outs of the law. I have seen I and E statements for years and I can easily tell if they are using a good accountant. You may be leaving money on the table or your may be on the IRS hit list depending on your accountant.

Fourth, Use the information you generated for the IRS to make the next year business year better for your franchise. Take a hard look at expenses. Could some of those be cut back. Was it lack of business, or were you over spending?

Taxes and Royalties, it could be worse.....

Fran

Death, Taxes, and Royalties Part 1 Royalties

Franchisees,

Please pay your royalties to your franchisor. I don't know how strict other companies are about collecting their royalties and at what point they send your delinquent butt to collections, but the fact is that they shouldn't have to.

I shouldn't have to call you and talk you in to, or threaten you to pay your royalty fees. The fact is, it's not your money. You have just started thinking it is your money, and that you can use the money for other things. Once again, ITS NOT YOUR MONEY.

When you bought the franchise, actually you didn't buy anything. You were licensed to do business as....... Anyway, you signed a contract agreeing to pass along the % of sales royalty fees for the right to use the name, brand, operating procedures, etc.

Think of royalties as taxes. You never say, wow I took in $2,000 last month in taxes that I can spend on a new car, boat, marketing, or anything else. You don't get excited about tax money that was collected because you know you have to just pass it along to the state, county, and city.
You know it isn't yours to spend, and you know if you don't pass it on, a day of reckoning will come. You can't tell the IRS that you haven't sent your quarterly money in because your car broke down and you need to hire another employee. You can tell them, but it won't matter.

Start looking at whatever % you pay in royalty fees as taxes. This will help you when you are tempted to spend it instead of passing it on.

Fran

More Due Diligence - Do One More Time

Being a roadwarrior means being at the mercy of hotel internet about 200 days a year, unless I what to type this on my Blackberry, so I apologize for the break in blogs.

I was involved in a due diligence meeting today with 3 people contemplating buying a franchise. I am not in sales and don't get any money from them buying a franchise, so I am unbiased except for not wanting to spend what could be a great deal of time with someone that is doomed for failure from day one.

Some of my observations from the all day meeting were:

The potential buyers didn't realize that the corporate people talk to the franchisees that they have called and it is all one big circle. If the buyer-to-be sounds stupid or rude on the phone, then they tell may tell corporate about the experience. When I meet you, I already know a lot about what you have been told and who you have talked to. Remember, the rep may talk to their franchisees every week and it is a small world.

I have never been asked about the corporate hours or support hours of business. Guess that why my phone rings 24/7. I no longer answer 24/7. If the corporate office is in CA and you are buying a franchise in NY, how are those hours going to work for you when your computer system goes down, your equipment breaks, or you have some other emergency. If corporate is in NY and you are in CA and your computer crashes at 2:30 on a busy day, you may be out of luck until the next day. What about Saturday's?

The potential buyers did ask how much profit to expect. I answered truthfully between minus 15% and plus 50%. That is true. There are so many variables, that they should asking questions and keep calling until the have the whole puzzle put together with pieces from people that they most relate to. How much work are you going to do yourself, how much are you hiring done is one big variable.

One good question was, how much money do I need to have in the bank to live on after I have bought and paid for the franchise? Each franchise is different, but my advise is that you need at least two years of living expenses and the first two years on marketing money expenses. I visit a new franchisee with a wife and kids and a morgage and he needs to start paying himself a good salary 6 months from opening the door. The stress is horrible. For all of us. We all care. We don't want anyone to fail.

Please do your due diligence diligently. For all of us, it is the best thing you can do.

Fran

Due Diligence - Do more

Greetings franchisees, or franchisees-to-be,

If you read the last blog and you have decided that you are going to listen when you call people for due diligence, then you need to have some questions written down to ask the experienced franchisees.

First, the franchisor can't tell you how much profit you will make. That varies a lot depending on many variables. It will be up to you to buy materials, pay employees, control general expenses etc, so corp doesn't know how much profit you will make. That will be up to you. So, ask the people that have been in business a few years about their profit. Does that number include paying themselves? What all are they including in their expenses?

Second, call EVERYONE in your region. Call the ones that have been in business a year, 10 years, EVERYONE. It is good to call people all over the US, but concentrate on the people who will be closest to you.

Three, ask to spend a day with a franchisee in your area. All day. If it isn't part of the buying process, then do it anyway. If it is a store or resturant, just hang out there observing. If it is a business where you can't go inside, like a Maid Service, then keep asking owners until you find someone who will let you.

I will write more on this, but due diligence is very important. I have had franchisees that wish they hadn't purchased a franchise and when I ask them what kind of due diligence they did, they always say that they called a few people that were on a list of franchisees that the company gave them. Do you think that list is going to have people that are struggling, or disenchanted, or going out of business?

If you were going out to buy a house and a car and other large purchases, wouldn't you make sure that you have checked out everything, asked other people, and done everything you can do to make sure that all that hard earned money is going into a good investment?

Why wouldn't you do at least as much when buying a business?

Fran

Franchise Due Diligence - Over Due

Greetings from the road less traveled,

Due Diligence. If you have already bought a franchise, there isn't much you can do now except give the straight story to the people who call.

If never ceases to amaze me how many people can be told during due diligence that the location, or type of business, or whatever wouldn't be right for them, but they buy anyway. They are told they may loose money for 3 years, then make $30K for another year or two and then $40K for a year or two and they buy anyway. Not only do they buy, they quit good paying jobs to start this franchise. Why?

Why, is because THEY are different. The city they are going to is different than any other city that other franchises are in. THEY are different so the fact that the same location has been turned over 8 times in 11 years doesn't matter.

During due diligence, potential buyers are often advised that there are good locations that are open to buy and that would be profitable, but do the callers listen? NO. Why? Because the location they want to buy will be different. They just know it will be the best franchise ever.

If your mind is already made up before you call to do due diligence, just save your time and go ahead and buy. Just don't blame anyone but yourself. If you are going to ask good questions and then listen to what people are trying to tell you, then read the next blog for suggestions.

Fran

Franchise Support- Do My Fees Pay For That?

Greetings form the road,

I am currently in Alabama providing support to franchisees who have been in business several years. What I offer hear is "I pay for you to help me when I send in my money to corporate each week". "The royalty I pay is for your salary so you need to do things for me" is common. Actually, that isn't true at all.

All franchise agreements have some common points. This is one of them. Yes, EVERY franchise agreement says that the royalty is for use of the name, the brand, the license to do business as this name, etc. Nothing physical. No equipment. No support.

It does say that inital training, and start-up help will be given, and other support AS DEEMED NECESSARY. We the reps decide what is necessary and how much help you will get, not you.

Most franchise organizations will help you all they can because they want you to be successful. BUT, don't think that the support person works for you or will drop everything to fit their help into your schedule.

My phone was just ringing. At 7:30 pm. It was ringing at 7:30 am also. I will let the franchisees calling me now leave a message and then listen to it. If it is an emergency, which it won't be because they haven't even opened for business and don't have any employees or customers, then I will call them back. Otherwise, I am off duty.

Those of you that already own a franchise-remember we have personal lives and personal time too.

Fran

Franchise Buying- New or Existing Business?

Potential franchise buyers,

I was reading some threads on a franchise forum site and found questions about buying exisiting franchises vs. opening up a brand new location. One question was whether or not there would be training and support if they bought an exisiting franchise.

I can tell you that where I work, there is just as much training and support for someone buying an existing as a new. If the franchise you are looking at buying doesn't provide the training or support, I suggest you buy something else. Just because it is an existing franchise doesn't mean it is following the business model, has all the equipment you need, doesn't have everything in perfect working order to the point you don't need to know how to fix it, etc. You don't know how any existing employees were trained and what they have been up to.

I have dealt with many transfers and many new franchises and while buying an exisiting franchise can be easier, it can also be harder. If you buy a business that has been around for 5 years, maybe they did things the right way the first couple of years, but now that you are buying it they have developed many bad habits. Maybe their equipment is in bad shape and after you buy the business someone like me will show up and tell you that it needs to be replaced.

What kind of reputation has this business built up? What do past customers tell their friends about this business? Are you buying a good or bad reputation?

Opening a franchise from scratch can be hard, but you learn as you go. Everyday you have to learn a few new things and before you know it, you have a thriving business. The new owner stepping in now needs to know everything at once. They don't have time to learn on the go like the owner that has 10 customers, then 50, then 100, then 200. You are buying 500+ customers and are responsible for employees that know much more about the business than you do.

If you buy an existing franchise, you better have just as much training and support as the franchise owners. Believe me, you will need the encouragement, advise, wisdom, experience as much as anyone.

Fran

Franchise-From the words Freedom and Liberty

Even Franchise Field Reps need to rest now and then. For the week-end, I wanted to post this comment a former franchise corporate employee left me. It is so well written, and had so much insight, I didn't want it burried in the comments. Keep those great comments comming. Fran

Dear Fran:

I’m glad you liked my comments. I’m betting that a smart chic like you already knows that the word “franchise” originates from the Anglo-French, meaning freedom and liberty. Alas, what so few prospective franchisees don’t know is that in today’s world, freedom (as we know it) has nothing do with owning a franchise.

Owning a business will always seem like a slam dunk to the drones longing to escape from Cubicle Ville. But running a business is the tricky, three-point shot reserved for those in the big leagues. Let’s abandon logic for the moment and suppose someone is already business-savvy. What are the prerequisite skills needed to make it in Franchise Land?

Here is one that you will hear ad nauseam: “You should have a strong desire to succeed while being your own boss.” More importantly, you should understand that you are NOT going to reinvent the wheel when you purchase a Wonder-Rama franchise. Billions were served because “people love consistency.” Do not go boldly forth into Franchise Land thinking you can change the formula with a bright new idea. Uniformity rules.

Do not dream of owning a McRoyalbucks franchise only to be appalled by the idea that a steady diet of fat-laden junk food will have your customers on the fast track to a triple bypass. The corporate office will not take kindly to your adding tofu to the menu unless they think of it first.

Running a franchise is NOT for the free-spirited, independent-minded, innovative entrepreneur. It is however, ideal for people who want to bust their butt following a proven method for making a tidy profit, who will agree to follow the corporate party line and who will cheerfully pay a royalty for the privilege of riding on the coattails of a nationally-recognized brand.

So what do you need to do before deciding to buy a one-way ticket to Franchise Land? (That’s right, one way. Beware the non-compete clause).

Step Number 1. You need to look at the whole idea with a jaundiced eye. Don’t behave as if you are on a first date with someone from Baywatch. Remind yourself that the buxom models probably have implants and the hunky lifeguard may be on steroids.

Start by reading the October 10th, 2006 issue of Forbes “Ten Reasons Not to Buy a Franchise.” If you cannot find this article online, forgetaboutit.

If the salient points of this article do make you run for the exits, you can proceed to the next step.

Step Number 2. Caveat Emptor! I didn’t take Latin, but even I know what this means. Unfortunately, too few franchisees do their homework. I took part in presentations to prospective franchisees and was amazed at how little they bothered to ask while they had the chance. Most of the prospects seemed as if they were in a hypnotic trance while being shown around the corporate HQ. Maybe it was the non-stop whirl of canned presentations, the plastic-smile- razzle-dazzle or the Ambien-laced coffee. Something got to them.

Do some detective work before you plunk down grandma’s Mutual of Omaha money. If the company is publicly owned, ask for an annual report. It might a good idea to know how to read that annual report. Do you know what to look for? Do you know what you are looking at? If, like me, you can’t make heads or tails out of a spreadsheet, make sure you have a business partner who can. Or, if you flunked out of the London School of Economics, go to Google and type in “How to Read an Annual Report.” Otherwise, go back to your cubicle where you belong. You have no business running a business.

Franchise Dreaming

Greetings from California,

If you own a franchise of some kind, you have dealt with a franchise represenative at some point. Do you think you are a field reps dream or a field reps nightmare?

I dream about the people I visit. I dream about things I need to tell them or teach them. I dream about things I wish I could say to them. I think that I dream about their businesses more than they do. I think I worry about their businesses more than some of them do.

In California, there are a lot of new franchises going in on every corner. When you think about buying a franchise you have to think about name recognition. If you put in a Dunkin Donuts or Starbucks, you already have the name recognition. If you put in an Islands (hamburgers mostly) in NY, you might have a long row to hoe to create enough name recognition for people to even know what you are selling or doing. Someone has to be first, but are you the right one to be first?

There are several new franchises that involve cleaning up dog poop in peoples yard. They charge by the dog and by the week of month. Good idea, but it may be hard to get your message out there to people who didn't even know there was such a franchise. Did you know there were franchises that put up Christmas lights, or put in dog fence, or even baby proof your house? Did you know you could buy a franchise where you bring giant blow-up toys to peoples houses and parties. How about a business driving over to peoples houses and cleaning their cars in their garages or driveways?

A field reps dream, is someone that cares as much about their own business as they do. Someone that puts out as much effort on their won behalf as the rep does for them. If you are a trail blazer and are trying to build up name recognition, then go the extra mile, work the extra hours, and be a dream to yourself and all the other franchises that will come after you and ride on what you have built. A franchise can be a dream or a nightmare. Dream a little dream of a successful franchise.

Fran

Are you buying a job or investing in a career?

Greetings,

Road Warriors- Don't you hate it when you are handed a hotel key and go to the room and open the door and start to walk in, and realize that there is already someone in the room? Welcome to my world again today. When I went back downstairs and told the young guy at the desk he just said that was twice he did that today. I just hope somebody doesn't get hurt with all this walking in on strangers. This was at a newer very large Holiday Inn Express in the DFW area.

Now to the topic,are you thinking about buying a job or investing in a career? If you already have a franchise, which is it for you? I visited two new franchisees the last two days in the DFW area. One bought a job, one invested in a career. They are about the same age.

Franchisee1, lost his job. He had been a morgage counselor and lost his job due to the economy. He has had a couple of other jobs in the last 10 years. He was fed up with working for someone else. He wanted to control his own future. He has money in his 401K to spend, so he bought a franchise. The only problem is that he isn't interested in doing any of the work. He bought himself a job and he wants to be the President, CEO, and boss everyone else around. The only problem is that there are no customers, no employees, and until he gets out the door and starts creating business, he is a one man show. Let's say it is a Merry Maids type franchise. He is the boss, the house cleaner, the salesman, everything. He doesn't want to do any of the physical work, he just wants to be the boss. He rarely calls me, he just makes all the decisions and hopes they are right. He is finally busy being the Dad he could never be working for someone else. He goes to everything his kids do. He spends several hours a day being with the kids.

Franchisee2. He had a successful business career going as a Therapist. He made lot of money, but it tired of doing the same thing for 25 years. He wants to learn a new career. He is reading everything he can about cleaning equipment, he is planning his marketing, calling on friends and neighbors to get the business going and is doing all the work himself even though he he had never done it before in his life. He calls me 3 times a day to check on what direction to head. He spends about the same amount of time with his kids, but more quality time since he can now schedule around them and do some of the work while they are asleep.

Which one do I think will be successful? I think they both could be, but Franchisee2 has taken it to heart to completely change his life and so I think he will be around for a long time. Even if he changes his mind down the road, he will have built up a good business and have something to sell.

If you are thinking about buying a franchise, ask yourself what your motives are, and don't lie to yourself. One of my favorite franchisees tells me that he is lazy and won't be over extending himself and that's just the way he is. I can accept that. Be honest with yourself. Are you buying a job, or investing in a new career and a new future?

Franchising and Women

Good day,

As I pack up to hit the road again tomorrow morning, I was thinking about the difference in visiting men and women franchisees. Both can be successful franchisees, but women do tend to be more organized and keep their employees longer.

Depending on the type of franchise, there is no reason a woman can't be successful. I really can't think of a franchise that a women couldn't own and run, but just as I don't think men would be a right fit for a Curves (women only exercising) there are probably a few things best left to the men.

In general, the women seem to be able to put themselves in the shoes of a customer better and therefore have better customer service. They tend to communicate better so are better at running a business where you have to talk to customers directly.

When a franchise is run by a couple, the woman is usually the one who is on the phone with customers, doing the bookkeeping, and keeping things organized. In the franchises I visit, he is out selling and doing the out-of-office work. He comes in and hands her a pile of papers and she gives him another list to work on. She usually acts as the planet the husband revolves around and the arrangement works well.

I have heard it said that two women can not work together well. I don't believe that and think that two women can work very well together especial if one is a type A and the other a B. Just like two men, or a man-woman couple, it is all about the personalities, work ethic, and focus on success.

Unfortunately, there are not that many women that own their own franchise business. Once they buy one, they are committed to it like a marriage and they make it work. I have had male franchisees quit their business after 8 weeks. I have had several men just shut their doors and get another job within a few months of paying the price to buy the franchise. writting it off as changing their minds about wanting to make that kind of committment.

All in all, both sexes can be equally successful owning a franchise. I think that anyone that buys a franchise should do all the research possible to make sure that it is what they want to do and that they believe in their hearts they can be successful. It is more than just believing that the franchise can be successful, and believing that other people have bought the same franchise and were successful. You must believe that YOU can be successful. That's all that really matters.

Fran

What will tomorrow be like a year from now?

If you have a franchise or are thinking about buying one, or if you have any kind of business, you need to have a plan and a map.

What will tomorrow be like a year from now? If you don't have a picture in your head of what you want your future day to be like in 365 days, you can't expect things to be any different than they are now. Is it easier to put a puzzle together if you can look at the picture of what it is supposed to look like or easier to just pick up pieces and start putting together a picture? Of course it is easier to have a picture to look at! You have 365 pieces, or say 730 half day pieces to put together to make your picture look like what you want it to by this time next year.

Let's stop and make a mental picture. What is your business like? How many customers do you have, or how much revenue are you bringing in each day? What are you doing on a typical day?

OK, now let's think about where you are at now it relation to the picture of next year and let's set some goals. Let's divide the difference in customers or revenue in half and set that as a goal for 6 months from now. Let's divide it again. If you want you can map it out monthly.

We have our goals, now let's look at the time and/or money it will take to reach each of those goals and commit to expending the resources. Do you need to hire more help, or buy new equipment? Put that in the plan. Continue to fill in the variables you have in your circumstances until you see the whole picture. When will you have time off? Put that in. You have to have the details of the picture for it all to fit.

OK, here comes the hard part. Make your goals known to others. This will help you stay on track and be more committed. Tell the people you work with, your spouse, your mentor, and anyone else that will ask you how you are doing. If you have a franchise, tell your field representative your goal. Post your goals around the office, in your home office, on the refrigerator, anywhere you will be faced with them everyday.

Lastly, build in rewards along the way. Besides hating to tell people that you aren't doing what you said you would do, you need more incentive. Reward yourself with time off doing fun things, buying yourself something you have been wanting, whatever it is that motivates you.

The old saying "You don' t plan to fail, you fail to plan" has been around a long time because it is so true.

Paint a picture of your future, then make it come true.

Fran

Learn and Practice Time Management

Greetings from the frigid North,

Thanks first of all for posting another great comment!!

I have been listening to some tapes that discuss what it takes to be successful. It was taped in a room full of millionaires. They all agree on several things and one of them is that to be successful, you have to manage your time.

Yes, there are things that throw you off track, even if you have a plan. I wrote this blog two times already. I wrote it in an airport terminal in one part of the country, but it didn't save and I had to turn my Blackberry off on the plane. Then I tried again last night and it wouldn't post. I wasted time and it wasn't my fault. But I had it prioritized and came back to it when I could. I had a plan.

How many of you plan tomorrow the day before? How many of you have daily things that you do every single day before you go to bed that will help your business? Most franchisees I talk to don't have a plan. They know more or less what they will probably do. Never have I had one say that they will do "this at 7, then this at 10, then this at 11, etc" . Even the ones that are semi-structured during the main part of the day are not structured in the mornings and evenings. And then they wonder why they don't get things done.

I talked to a franchisee yesterday that said "I hardly have any customers right now, so I have lots of free time to slack off and do whatever I want to do until I get busy". What about getting busy getting customers? If you don't have enough customers to keep busy, then you need to be working on your marketing.

What takes up your time during the day and can someone else do it? That is what you need to ask yourself. If you don't have enough customers and you spent yesterday putting gas in your car, mowing the yard, going to the PO, checking E-mail, picking up the kids, etc, you are not using your resources wisely. Pay a high school person or someone to run your errands, and get some customers. Go to a business networking group or business social group and meet some new people to buy whatever it is you are selling instead of watching TV or playing fantasy football. If you have all the money you need and want and all the customers you need and want, then never mind. If you need money, you need customers, and they aren't going to come to your house and stop you while you wash your car and ask you if they can buy something.

If you own a business, you make a decision several times a day whether or not to use your time to grow your business or just cruise along. If you are thinking about buying a franchise, you have to be able to look in the mirror and truthful decide if you can focus on a business and make good choices with your time everyday.

Fran

Three Types of Franchisees

I loved the comment I received on the post so much, that I want to write about that today.
First, thanks for the hilarious comment. You are right. Franchisees more or less fit in one of 3 categories and then several sub-categories.

For those of you reading this because you are contemplating buying a franchise, this is good information because you will fit in one of these categories and also interact with people in the other categories.

If you are buying a franchise to be your own boss.......

you are not alone. I think that is the biggest group of franchisees. If you are a go-getter and feel like you can sell anything to anyone and are good with money, and have a good business head, you will probably be very successful. Owning this business will give you a chance to spend more time with your family and your income will not be limited by others. However, if you are buying the franchise so you can spend half of your time with your kids, or because you didn't get along with people where you have worked in the past, or because your wife or husband thinks you should be making more money and this is your best hope of a better income, you might want to rethink the idea.

You know those "Your probably a redneck if........" sayings of Jeff Foxworthy?

You probably shouldn't buy a franchise if............

You haven't kept a job more than 3 years even if "it wasn't your fault".
You are buying it because somebody died and you are buying it to put the money to good use.
You are buying it because nobody will hire you because of your driving or police record.
You need the exercise outside because you have been working inside your whole life.
You need to work inside in an office because you have been working outside your whole life.
You want to learn something new and don't know the first thing about the business you are buying.
You can't balance your checkbook.
You have gone through personal bankruptcy.
Your husband/wife/partner has always taken care of all the financial decisions.
You don't know how to drive.
You are going to be a bad example of whatever you are selling i.e. a car wash franchisee that always has a filthy car, a maid service fran. with a dirty house, a hamburger chain fran. that is always eating at the Mexican restaurant.

There are good franchisees that make a ton of money and are very successful. If you are on the computer reading a blog about franchisees, you are probably a good candidate.

Fran

If I Buy A Franchise, Do I Need To Know How To Use A Computer

Greetings from Nebraska,

Today I visited a new franchise with new franchisees. They were struggling with the business part of their business, due to lack of computer skills. ANY computer skills!!!!!

Unfortunately knowing at least basic computer skills is necessary. This franchisee in Nebraska has a big hill to climb. When he asked how to save a file, I knew he was in trouble. Then when I told him to check his Internet connection, he of course didn't know how, so he wrote everything down........"Start" "Control Panel".........

We did some basic "Cut and Paste", how to check E-Mail, how to back up the files, and how to print. This is someone that just bought a new business and needs to be spending time getting customers. Instead he will be fumbling around on the computer half the time. I encouraged him to get "Video Professor" or take a basic class or something, but he didn't think it would be necessary. I visit one other franchise that has someone that also doesn't know computer basics. They have only a few customers because they spend half their time writing out their work, their customer information, their checks, their invoices, etc.

Yes, you need to know how to use a computer if you buy a franchise. Even if you have someone that is going to be your office person, you still need to know the basics. You will need to know some Windows basics. Better still, some Microsoft Office basics. Starting up a new business is not the time to spend hours trying to figure out how to attach a file to E-mail.

Fran

Hotels- A Franchise Reps Home

Greetings from the road,

I wanted to comment about some of my favorite and least favorite hotels.
First, let me say that I stay in mid-priced hotels usually in the Intercontinental Hotels chain for work. For personal trips I have stayed at great hotels, but I will keep this to business.

My favorite two are a tie. First is the Holiday Inn Express in Hot Springs, AR and second place goes to Holiday Inn Express in Grand Prairie, TX. Both of these hotels go the extra mile. They are very hospitable, they have sacks of snacks and water waiting in the rooms for Priority members and they automatically upgrade you to a better room. Both have above average breakfasts, with additional hot food. Hot Springs has ham, (real ham), eggs, breakfast sandwiches, and much more. Of the 50 different hotels I have stayed at this year, they have the best free breakfast. They are also the only ones with free postcards and old towels that you can take and keep.

Some of my least favorite hotels are an old La Quinta in Irving, TX , Holiday Inn in Nashville, TN, and Holiday Inn of the Westbank in New Orleans. These hotels had outside doors, were old, dirty, and scary and I would never stay there again.

In Birmingham, AL I was given the wrong room number and was trying to get into the wrong room with my key. A man in the shower came to the door and told me he already had that room. In North Carolina, I was in a room and they gave a key to my room to someone that just checked in and the man came into the room. I don't know who scared who more.

I have several that are in between, but I will be commenting on these along with the franchise visits.

The idea of a franchise is more or less to give licenses to people who want to follow your business model and take advantage of the established processes to grow a business. If you go into Subway, you know what you are going to see on the menu. They aren't offering BBQ and steaks and offering to deliver it to your house. Same with any franchise, you go to the hotel, store, restaurant, etc, you know what you should expect. The problems is......human nature. The problem is........a franchisee thinks they are Donald Trump and they can change the business into what they think it should be. That's where the problems starts. It is kind of like finding the person of your dreams to marry. Your perfect, lets get married, now you need to change.

That's where I come in.

The Personality of a Franchise Rep

Greetings from a hotel near you,

If you don't have patience, sense of humor, and the ability to hold your tongue, you don't have what it takes to travel around the country visiting franchisees.

I visited two franchisees the other day that each had half of a large Southern city as their territories. The first franchisee I met with didn't have a clue. When I asked him how many new customers he wanted to add next year and what his plans were for marketing next year he said that he wanted to gain 50 customers next year. He only had 150 customers and needed 400 customers to break even. He was so under motivated that he was giving himself 14 months to get 50 customers! When I asked him what he was going to do for marketing, he said he had 1,000 postcards to send out and thought that was enough, which it wasn't. The fact that he had previously not been able to kept a job so his father gave him the money to buy the franchise was shinning through. He had no idea how much revenue he was bringing in per customer. We figured it out together and came up with around $200. He wasn't computer savy, so he was doing several things by hand that he should have been doing on the computer.
Then I went across town to visit the other franchisee. He had several marketing and business books on his desk. He was working on a new web site and blog to help market his business. Without looking he told me he was bringing in around $500 per customer. He had doubled his number of customers each of the last two years and planned to do it again. He had goals posted on the walls and progress charts. He did all of that with the same 24 hours a day that the other man had.
In one day, I saw two completely different pictures. One of someone that will be going out of business at some point in the not so distant future, and one who will be buying out the other franchisee at some point in the future. Both were comfortable in their present state and didn't want any help from me.
The next day I went to visit someone that had 14 customers and had just hired an employee to take care of these 14 customers, and was planning to cut a hole in the top of a van for ventilation......

Fran

The Beginning of the Craziness

Have you ever thought about buying a franchise, but you were afraid you just weren't smart enough to succeed? Well, you will enjoy reading about some of the crazy things franchisees do and thinking to yourself that if someone like that can run a business, I certainly can.
If you own a franchise and would like to hear the good, the bad, and the ugly about things that other franchisees are doing, this blog will be for you.
If you visit franchises and see the kind of things that I do day in and day out, this blog will be for you. I hope you will comment and add your own stories as we go along.
If you are a road warrior, you will enjoy the hotel, rental car, airplane experiences. If you have dreamed of being a road warrior, you will change your mind.
I won't be able to tell you exactly which franchise I represent, due to wanting to keep my job and not wanting to embarrass the franchisees that I visit and help, but I can tell you I travel all over the US and it is a service type franchise.
Please come with me on the "Alice in Wonderland" journey that is the life of a franchise representive.