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
Wednesday, February 27, 2008
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 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
Tuesday, February 26, 2008
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
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
Friday, February 22, 2008
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
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
Wednesday, February 20, 2008
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
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
Thursday, February 14, 2008
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
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
Wednesday, February 13, 2008
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
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
Tuesday, February 12, 2008
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
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
Monday, February 11, 2008
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
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
Sunday, February 10, 2008
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.
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.
Monday, February 4, 2008
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
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
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