June 2019 | Page 4 of 4 | Franchise Dictionary Magazine

2 06, 2019

Is Every Business Franchise-able?

Audra2019-07-08T13:31:40-04:00June 2nd, 2019|Tags: franchisable business, franchise operation, profitable business, system of products and services|

Is every business franchise-able?

There’s a lot to consider before franchising a business

by Geoff Batchelder
Certified Franchise Consultant

Today more than 3,000 franchise systems cover 300 different business types and account for over 745,000 franchise establishments. Franchise sectors include automotive, business services, child services, cleaning services, financial services, food and beverage, health services, home improvement and maintenance, personal care services, pet services, repair and restoration, retail, senior services, sports and recreation, technology services, vending… and I could keep going.

It would be hard to find a business type that could not be franchised. But the real question is looking at a particular business and determining whether it should be franchised.

What to consider

When a business owner approaches me about franchising, I consider these factors:

First and foremost, are the company-owned locations (or location) profitable? I can’t tell you how many owners have approached me
with the idea of franchising as a way to make money, even though the business they run is struggling financially. Imagine trying to
convince a potential franchise buyer that the company-owned location isn’t making money, but if they open a franchise location, it will.
That’s not going to work.
What are the major reasons that the business is successful? Is it purely a great location? Is the success entirely attributable to an
incredible owner? Or has the potential franchisor developed a documented system of products, services, and repeatable processes that can be replicated in multiple locations?
Does the owner have the capital to cover all aspects of franchise development: consulting work, legal work, documentation,
presentation materials, website development, and lead generation?
Is the owner committed to franchising or simply looking for a way to get rich quick? He will need to realize that running his business
will take a backseat to helping franchisees make their businesses successful. Many new franchisors struggle with this very necessary part of the transition.
Will he have the human resources in place to operate a growing franchise operation and also maintain his current business?
Is there “room” for this new offering in franchising? How many similar offerings already exist? Is there anything unique to make it
stand out from the competition?
Is the branding professional? Are there multiple marketing and advertising strategies in place?

Sometimes the most important advice I can give a business owner is to not invest in franchising. Not all businesses are ready and
some may never be ready. Many times my advice is to focus on growing the business and revisit franchising later, after the important
issues are addressed.

Geoff Batchelder has been a franchise consultant and franchise development expert for the last 10 years after spending 25 years focusing on business development in the high-tech industry. Contact him at 1-877-222-3722 or geoff@compassfranchisegroup.com. Visit www.compassfranchisegroup.com.

2 06, 2019

Multiple Choice

Audra2019-07-08T13:34:30-04:00June 2nd, 2019|Tags: Multiunit franchising, scaling your business|

Multiple Choice

Should you make the leap into multiunit ownership?

by Brian LaCour
Certified Franchise Consultant

Multiunit franchising happens when someone signs an agreement with a franchisor that allows the franchisee to open a certain number of units within the protected territories or areas the franchisee selects from available locations. This a great option for people who have franchise operation experience and/or already own a single franchise unit and are interested in rapidly expanding their business and income potential.

If multiunit ownership is your endgame, look for franchisors who will help you. All franchisors charge a franchise fee that averages from $25,000 to $50,000, but franchisors won’t necessarily make you pay $75,000 to $150,000 for three locations. This means opening multiple locations could be more affordable than you expect. You also can talk to franchisors about discounts on royalties and other fees.

The more locations you have, the more valuable your business becomes. And here’s another benefit: larger franchisees who diversify through a variety of locations are better positioned to withstand an economic downturn.

Owning a single location often means being there every day and essentially being the manager. But if you want to own multiple locations, being the site manager isn’t practical. You will still be involved in the business on a full-time basis, but your focus will shift to growing your network of locations. Rarely will there be situations in which you are working in an actual location each day—a manager is in charge of the daily operations. As a multiunit owner, you concentrate on the big picture of the entire system and scaling your business with additional locations.

Several economic and efficiency benefits come into play when you own multiple locations, particularly within the same market. In some cases, several franchises can share a single expense. For example, if you own several sites in one market, you can run one marketing program to benefit all locations. You can bundle human resources and staffing for multiple sites, perhaps sending a staff member from one location to another if someone doesn’t show up for work. The same goes if a site runs short on products or equipment; inventory can be shifted from one location to another until a new shipment arrives.

Many franchisees go multiunit immediately to take advantage of the frugalities of scale. Many want to do all the labor and make all the acquisitions up-front.

Occasionally that can come back to bite you. Having five or six subpar units may be less desirable than having two or three outstanding units.

I recommend being patient, setting everything up decorously, and bringing in the right people from the beginning. This will save you from having to go back and fix things later. You also would want to stay lean with your organizational structure.

You must be an expert in your franchise’s units so at the end of the day, you can always step in and properly support your operations team.

Brian LaCour has more than 20 years of business leadership experience in driving fiscal results, strategic planning, saving costs, increasing revenue, streamlining processes, and developing top performing teams. LaCour’s passion for helping people led him to the role as president of the International Franchise Group. Call LaCour at 561-502-7283 or email him at blacour@internationalfranchisegroup.com. Visit https://www.internationalfranchisegroup.com/.

2 06, 2019

Franchise Precheck

Audra2019-07-08T13:38:09-04:00June 2nd, 2019|Tags: comfortable investment level, inner motivation, owning a business|

Franchise Precheck

Here’s how you can simplify the process

by Diana Capirano

When contemplating my exit from corporate life several years ago, I began by investigating franchises online. I clicked various links in hopes of finding clear, succinct information. And OMG, I created a cyber frenzy! My phone and email were blowing up, and I couldn’t even remember what buttons I’d pushed. I had started my search indiscriminately, without taking the following crucial first steps.

Gut Check

Make sure your motives are legitimate and defined. How seriously have you thought about owning a business, or are you reacting to a bad day at work? This doesn’t mean you know exactly what you want, just that you don’t want to work for anyone else. ASK: If I found a business that met my needs, would I commit?

Speak with your spouse or partner even if he or she won’t be involved. Will your significant other support your goals? ASK: How important is that approval to my decision?

Stay open-minded to various categories of businesses even if you’re leaning toward a particular one. Few franchises
require that you have experience in a specific field and 98 percent of franchise owners invest in something outside their wheelhouse. ASK: Can I leave my comfort zone?

Face reality and fear of the unknown. This mainly has to do with your confidence level and inner motivation. ASK: What’s the worst that could happen? Weigh it against the best-case scenario. This requires a second gut check. ASK: Do I take ownership and accountability by relying on yourself, or do you tend to rely on others?

Financial Check

Determine your comfortable investment level. Spending money without a guarantee means risk, but franchising is the lowest-risk option statistically. There are many budget-friendly possibilities, or if your resources allow, you can adopt the go-big-or-go-home approach. Start-ups go from $10,000 to $4 million. ASK: What amount can I comfortably assume? What is feasible?

Figure out your net worth and know your liquidity. Some franchisors have stringent requirements; lower-investment franchises may have none. ASK: What are the best options with my financial profile? If you need funding, a credit score of 685 or higher is preferred, but there are options even with poor credit. ASK: What is my credit score? (Then pull a free credit report.)

Know your WHY

Focus on what’s driving you to business ownership. Be objective and remove emotion. ASK: What’s my present need and what’s my end goal? If you’re just burned out, your present need may be a vacation. If being an owner represents the best route to the end goal—better quality of life—take the vacation and then start your search.

Know your WHEN

Have you been thinking of business ownership but failed to make a solid plan? If you’ve vetted opportunities before, ASK: Why did I not move forward?

Timing is everything. Maybe you did not complete the checks above. Maybe you weren’t serious enough before or were just exploring. ASK: What’s different now? Am I ready now?

Know your HOW (and your WHO)

In doing research, brand websites, online articles, social media, other business owners, and books can help. But too much information can create confusion. ASK: Would I benefit from objective expert advice? Franchise consultants have access to many brands but are trained to assist you beyond the search. A skilled adviser will educate, research, present, coach, and provide resources.

Your consultant and franchisors will lay out a process. Be engaged and be honest. This is the first step to understanding whether you’ll make a good franchisee. Speak to any successful franchise owner and you’ll hear, “just follow the process.” From your initial encounters, franchisors will determine whether you can follow the system and whether this opportunity is right for you.

Diana Capirano, CFC, has an expansive career that includes corporate and franchise sales and development, marketing and operations, mergers and acquisitions, structuring and negotiations, and business ownership. As a highly respected consultant and mentor, Diana espouses a profound commitment to helping prospective business owners and investors understand and navigate the process of deciding on a franchise business. Contact Diana at 941-999-0095, email diana@focusfranchise.com, or visit http://www.focusfranchise.com.

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Monthly Archives: June 2019

Is Every Business Franchise-able?

Is every business franchise-able?

There’s a lot to consider before franchising a business

What to consider

Multiple Choice

Multiple Choice

Should you make the leap into multiunit ownership?

Franchise Precheck

Franchise Precheck

Here’s how you can simplify the process

Gut Check

Financial Check

Know your WHY

Know your WHEN

Know your HOW (and your WHO)