So, you've invested in a franchise, now what? Are you ready for the fun, the money, the freedom and living on easy street? Ok, not so fast. Buying a franchise does not guarantee success, just as joining a gym does not guarantee that you’re going to get in shape. In a franchise business, just like the gym, you have to show up, follow the program and do the work.
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Taco Bell is executing a large expansion across the United States and is looking for Franchise Owners. Whether you like Taco Bell's food or not, it's a good food franchise to own, if you're interested in food concepts.
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I was the area developer for Maui Wowi Smoothies in the greater New York market several years ago. I was responsible for helping new franchises in my jurisdiction find their locations and help with getting set up and execute a grand opening. My support would continue after they opened offering best practices. People looking to buy into the franchise would call me and say, “If I can get Yankee Stadium as a location, I’ll buy the franchise.” I would share that I know the people who run the food concessions at Yankee Stadium and once you’re a franchisee, I will introduce you. Many would go around my back and call Yankee Stadium to talk with the food and beverage manager, Jamie, at the time. Jaime, who had been working at the stadium for 40 years, would chew them up and spit them out. I would never hear from the prospect again. One day in 2002, a prospective buyer of Maui Wowi, named of Mitch, heeded my advice and bought the franchise first. The week after he signed his agreement we got a meeting with Jamie and Mitch got a location near gate 4 at Yankee Stadium and killed it! My point is, the franchise has the resources, the clout and the know-how regarding real estate. They don’t want you to open in a sub-par location and fail. That is not good for anyone. There has to be a level of trust between the new prospective franchisee and the franchise company.
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When I was in high school, more than three decades ago, music was my thing, especially heavy metal. Living in Brooklyn, NY, going to Lamour’s nightclub, was a weekly ritual for my friends and me. By 1981, the club was transitioning from a 70’s discotheque to a rock and roll concert hall. Many tribute bands played Lamour’s but every few months the band Twisted Sister would play at the venue and it was always an iconic night. My friends and I would don our Twisted Sister tee shirts and have our SMF (Sick Mother F..ker) fan club membership cards in hand and off to the show we’d go.
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I get the question all the time; is it better to franchise - Buying a franchise seems to be more expensive than starting something from scratch? Yes, on the surface, franchising does seem more expensive. That’s until you understand the real costs of starting a business on your own.
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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:
850,000 – the approximate number of franchised units in the United States.
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.
$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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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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