Are you married? Do you enjoy being married? What does this has to do with owning and operating a franchise? Everything.
When you buy a franchise, you are committing yourself to cooperate, to be loyal, for richer or poorer, in sickness and in health, to obey, till death of the franchise you do part. That's your part as the franchisee. For the franchisor, the "obey" part isn't there.
If a mandate comes down from the corporate office that you must be audited, or inspected, etc, you better pencil it in on your calendar. If they decide that everyone will buy a new sign with a new logo, then you will be budgeting for a new sign. There is no "but I was going to use that money for a new boat" type backtalk. If the logo is new, the sign, the stationary, the yellow pages, everything will change, and you will pay for it.
When you sign a franchise agreement, you are pledging your love and promising to wear your branded ring so that everyone knows who you belong to. After several years and your business is built up, it is especially like a mature marriage. Even if things aren't great, you are used to each other and it would be more trouble to change it than its worth. Besides, what else are your going to do?
If you are not a good partner in a marriage or in a neighborhood association, or a country club, then be doubly sure about buying a franchise. It can be a wonderful thing to own your own business and have the name recognition a known brand brings. The operating systems have been proven, the company is there to help you so you aren't alone. But just like marriage, it isn't for everyone.
It is a commitment when you get in bed with a franchise. No one night stands or playing the field. If you have visions of keeping another job on the side, not being faithful to obey, being able to turn away when times are rough, then look at your franchise agreement again, whether you have signed it yet or not.
Wednesday, June 24, 2009
Saturday, February 21, 2009
Loose Your Job - Buy a Franchise?
In past posts, we discussed the reasons to buy a franchise and why not to buy a franchise.
I understand that franchise sales are down across the board, but of the people that are interested in buying a franchise right now, many are people that have lost their jobs.
That brings us back to whether or not you are buying a business or buying a job. The ideal situation is for you to be a business owner, not self-employed. A business owner owns a business and the business goes on day after day whether the owner is around or not. If you are self-employed you are the number one guy and if you didn't show up for a month, the business would be down the drain or close to it.
Visiting franchisees, I see both business owners and self-employed people while visiting within the same corporate franchise. My business owners meet me for lunch, go to training days, stay up on business trends, budgets, vendor prices, and just spot checks that things are being done the right way. They go on vacation and enjoy their families.
The self-employed franchisee rarely has time to meet with me. They are always behind, tired from working long hours, always broke, cutting back on marketing and quality when times are tight. The self-employed person goes out of business 90% of the time in the first 5 years because they are under capitalized. Then 90% of those that made it the first 5 years, go out of business in the 6-10th years. This is due to being tired and completely worn out from all the work.
If you are thinking "I have always wanted to own my own business, and now that I don't have a job I think I might buy a franchise", please think about all this first. Buy a business, but don't buy yourself a job.
I understand that franchise sales are down across the board, but of the people that are interested in buying a franchise right now, many are people that have lost their jobs.
That brings us back to whether or not you are buying a business or buying a job. The ideal situation is for you to be a business owner, not self-employed. A business owner owns a business and the business goes on day after day whether the owner is around or not. If you are self-employed you are the number one guy and if you didn't show up for a month, the business would be down the drain or close to it.
Visiting franchisees, I see both business owners and self-employed people while visiting within the same corporate franchise. My business owners meet me for lunch, go to training days, stay up on business trends, budgets, vendor prices, and just spot checks that things are being done the right way. They go on vacation and enjoy their families.
The self-employed franchisee rarely has time to meet with me. They are always behind, tired from working long hours, always broke, cutting back on marketing and quality when times are tight. The self-employed person goes out of business 90% of the time in the first 5 years because they are under capitalized. Then 90% of those that made it the first 5 years, go out of business in the 6-10th years. This is due to being tired and completely worn out from all the work.
If you are thinking "I have always wanted to own my own business, and now that I don't have a job I think I might buy a franchise", please think about all this first. Buy a business, but don't buy yourself a job.
Monday, February 16, 2009
Working at McDonalds In Your Underwear?
What has happened to McDonald's? I swear this story is true. It happened to me!
I know that I am more aware of franchises and how they are honoring their brand, but the Mc Donalds I was in the other day would have shocked anyone. I was so taken back, I wrote the company and I have never done that to any store in my life.
I went into a McDonald's in Louisiana at 7:30 am. The line was to the door, the cars were backed up out to the highway. People were coming in, waiting for a few minutes, then leaving. Cars were giving up.
Here's the best part. I could see the girl taking orders. She was very over weight and wearing a red T-shirt and crock type sandals. That's it. Was she in her underwear? Who knows. I know she had a dirty stained T-shirt on at 7:30 am, and looked like she just rolled out of bed. She could have had very short shorts on but her shirt only went mid-thigh, so they would have been shorter than that. I would like to think she had shorts on........I won't even consider that she didn't have anything on under the shirt.
When I got up to the cash register, the credit machine wasn't working so they only accepted cash, they only had very small coffee cups and didn't have any lids at all for that scalding cup of coffee. They had been to busy to fill forks, napkins, etc so they just had them laying out on the counter in a pile. The woman in front of me was watching her watch and announcing to the crowd that was staying that it had been 15....18...20 minutes since she walked in.
I had to make the decision to be late to my appointment or go without grabbing a sausage biscuit that I could eat on the way, knowing I wouldn't get to eat until late in the afternoon. I stayed because I was in shock over the girl working at McDonald's without pants!!! (Or socks, or regular shoes, or hat, etc)
In McDonald Inc's defense, I did get a call from someone at the state office apologizing, an email, and a letter from the owner thanking me for reporting this store.
I will be popping into this store in a couple of weeks just out of curiosity while I am in the area. I hope they have cleaned up their act.
This is a classic example of how one franchise location can give all the locations a bad name. McDonald's doesn't have the best burgers, but they have a great operating system and customers go there because it is dependable. This McDonald's in Louisiana was ruining the brand for hundreds or thousands of other McDonald's franchisees.
Fran-rep
I know that I am more aware of franchises and how they are honoring their brand, but the Mc Donalds I was in the other day would have shocked anyone. I was so taken back, I wrote the company and I have never done that to any store in my life.
I went into a McDonald's in Louisiana at 7:30 am. The line was to the door, the cars were backed up out to the highway. People were coming in, waiting for a few minutes, then leaving. Cars were giving up.
Here's the best part. I could see the girl taking orders. She was very over weight and wearing a red T-shirt and crock type sandals. That's it. Was she in her underwear? Who knows. I know she had a dirty stained T-shirt on at 7:30 am, and looked like she just rolled out of bed. She could have had very short shorts on but her shirt only went mid-thigh, so they would have been shorter than that. I would like to think she had shorts on........I won't even consider that she didn't have anything on under the shirt.
When I got up to the cash register, the credit machine wasn't working so they only accepted cash, they only had very small coffee cups and didn't have any lids at all for that scalding cup of coffee. They had been to busy to fill forks, napkins, etc so they just had them laying out on the counter in a pile. The woman in front of me was watching her watch and announcing to the crowd that was staying that it had been 15....18...20 minutes since she walked in.
I had to make the decision to be late to my appointment or go without grabbing a sausage biscuit that I could eat on the way, knowing I wouldn't get to eat until late in the afternoon. I stayed because I was in shock over the girl working at McDonald's without pants!!! (Or socks, or regular shoes, or hat, etc)
In McDonald Inc's defense, I did get a call from someone at the state office apologizing, an email, and a letter from the owner thanking me for reporting this store.
I will be popping into this store in a couple of weeks just out of curiosity while I am in the area. I hope they have cleaned up their act.
This is a classic example of how one franchise location can give all the locations a bad name. McDonald's doesn't have the best burgers, but they have a great operating system and customers go there because it is dependable. This McDonald's in Louisiana was ruining the brand for hundreds or thousands of other McDonald's franchisees.
Fran-rep
Sunday, February 1, 2009
Franchise Ownership in a Bad Economy
Do you already own a franchise and your seeing your sales go down? This is common whether you are selling goods or services. Consumers are cutting back on purchases, eating out, and taking a hard look at everything in the budget.
There are a few things you can do to help yourself in this economy. First, it has been proven that you have to keep marketing. This will at least replace customers you loose and keep you even.
Just like consumers, don't buy anything you don't absolutely need. If you can rent equipment, instead of purchasing, do it. Anything you can do to conserve your money to hold on another year, do it. Also if you have any extra equipment, sell it. You can use the extra cash if it is paid for or help the budget if it isn't.
Keep up the quality of whatever you do or sell so when things are better, the business will come back. I have been in several resturants lately that were so short handed the service was terrible. I have been told I would have to wait for weeks to get an estimate on services since staff had been cut. I will move on to another company and never look back at these businesses.
Fran rep
There are a few things you can do to help yourself in this economy. First, it has been proven that you have to keep marketing. This will at least replace customers you loose and keep you even.
Just like consumers, don't buy anything you don't absolutely need. If you can rent equipment, instead of purchasing, do it. Anything you can do to conserve your money to hold on another year, do it. Also if you have any extra equipment, sell it. You can use the extra cash if it is paid for or help the budget if it isn't.
Keep up the quality of whatever you do or sell so when things are better, the business will come back. I have been in several resturants lately that were so short handed the service was terrible. I have been told I would have to wait for weeks to get an estimate on services since staff had been cut. I will move on to another company and never look back at these businesses.
Fran rep
Monday, October 20, 2008
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
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
Thursday, April 10, 2008
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.
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.
Sunday, March 30, 2008
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
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
Sunday, March 23, 2008
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
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
Thursday, March 20, 2008
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
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
Friday, March 14, 2008
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
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
Saturday, March 8, 2008
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 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
Tuesday, March 4, 2008
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.
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
Wednesday, February 27, 2008
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
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 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
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