September 13, is National Franchise Day. It’s not nearly as significant as President’s Day, Martin Luther King Day or national pancake day - when everyone gets free pancakes at IHOP, but it’s important, nonetheless.
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Franchise Definition
fran·chise noun \ˈfran-CHīz\
1 : freedom or immunity from some burden or restriction vested in a person or group
2a : a special privilege granted to an individual or group; especially the right to be and exercise the powers of a corporation
b : a constitutional or statutory right or privilege; especially the right to vote
c (1) : the right or license granted to an individual or group to market a company’s goods or services in a particular territory; also a business granted such a right or license (2) : the territory involved in such a right
3a : the right of membership in a professional sports league
b : a team and its operating organization having such membership1
Word Origin and History
Franchise: n.
late 13c., from Anglo-French, from franchir to free, from franc free,
“franchise” freedom, exemption; right, privilege (12c.), from variant stem of franc “free.” Usage narrowed in 18c. to “particular legal privilege,” then “right to vote” (1790). The meaning “authorization by a company to sell its products or services” was established in 1959.1
Trivia:
The first franchise business was the Singer Sewing machine in 1851.
Some people claim that the franchising model doesn’t work. Some people almost equate the industry to a pyramid scheme. Before you think that, consider the following facts reported by the International Franchise Association, www.Franchise.org:
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850,000 – the approximate number of franchised units in the United States.
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18,000,000 – the number of people employed by a franchise operation
nationwide. The franchise industry is the second largest employer by
industry, second only to the United States Armed Forces.
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$2,100,000,000,000 ($2.1 Trillion) – the economic output of the franchise
industry annually.
Do not misunderstand the facts. Plenty of people fail in franchises. Blame can be placed on a number of factors—undercapitalization, bad location, poor support from the franchisor, a bad franchise agreement that doesn’t allow the franchisee to make money, bad unit management. The list goes on. However, if you consider each of these issues, almost all of them relate to a poor franchise company. Even if a franchisee is undercapitalized, that falls on the franchise company. The company should have not awarded the person a franchise license.
Have you ever heard the saying, "If you love your work, you'll never work a day in your life?" That may be true if you work a job and build someone else's dream. However, if you want to control your destiny through business ownership you do not need to have a passion for the product or service that you provide. I know that sounds counter intuitive but it's true.
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If you’re thinking about buying a franchise, chances are you’ve considered one or any number of food franchises, and for good reason. Fast food franchises have changed the way America eats and are among the oldest and biggest franchises in the U.S.
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As you investigate franchising and read articles and books, you will run across a bunch of phrases that are said by many various individuals. Are the phrases just clichés without merit, or are the clichés actually true? Here’s my take on franchising clichés:
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According to The Washington Post's article by Rachel Siegel on June 7 2018, yup, it's easier to get into Harvard than get into a Chick-Fil-A franchise. Is this a commentary on our education system or is it about the fact that the American, capitalistic dream is still alive and well in the United States?
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In 1999, my heart was set on buying a new, up and coming ice cream franchise. The location near my brother’s house in San Diego, had lines every evening. To my novice business mind, that spelled success and meant it was a great concept, too. By the grace of God, before plunging into buying that franchise, I found a reputable franchise consultant who schooled me on how to perform a proper due diligence on a franchise. I did not know my consultant or her background beforehand, but thank goodness, she was proficient in franchising and had 20 years of franchise operations experience before becoming a consultant.
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