Archive for the ‘Franchise’ Category

Look Ma, No Hands

Posted by admin under Business, Franchise

As a kid, have you ever watched Yogi Bear or maybe even seen it on YouTube? How many times have you watched Yogi Bear running away from Mr. Ranger Sir on his bike with his picnic basket, and that huge grin on his face. At that moment Yogi Bear is the happiest bear on earth. He has outsmarted the local authorities and is off with the goodies, then the tree branch comes into view. I think if we could talk to Yogi Bear and warn him of the impending danger, none of us would. Why? Because we want Yogi Bear to get close lined and return the basket to the rightful owner.

What does this have to do with business or franchising? Too much.

Business can be difficult, but sometimes, every so often it can be easy. Just ask America from 2005-2007. Everyone seemed to be making loads of money without much effort, and then we got close lined. My experience has been that when the going gets easy, it’s time to get tough. Keep your eye on the horizon for those tree branches and work harder towards creating the kind of business that you can be proud of.

Show Me The Money!

Posted by admin under Franchise

I love the movie Jerry Maguire. I actually had the opportunity to meet Leigh Steinberg, the inspiration to the movie years ago in some business dealings while in Winnipeg, Manitoba Canada. When together he offered me one of his books, Winning with Integrity that has in it “may all your hopes and dreams come true.” I hope that in each of our businesses we hold on to the “dream”. Whatever that may be, and begin business opportunities with that end in mind. One of the big reasons I got into franchising, is I am a firm believer the franchising model helps people do just that, brings their dreams into reality. There is a lot of satisfaction that comes from being your own boss, owning your own business, and having the freedom that comes with entrepreneurial endeavors. It definitely isn’t all roses, but anything worth having comes with a lot of sacrifice.

This week, I have had two cool experiences with this that really highlighted to me why people buy franchises. One was at Bajio, a Mexican style restaurant franchise. They were bought by Subway a few years back. The owner had been in the system for 5 years, was one of their first franchisees, and has put 80-hour work weeks into the business for the first few years. Five years later, he has a little money tree, that is well established, with deep roots that produces a profit in all but one month in the past several years. Harvest time is here and he is looking at selling the money tree for $750,000.

$ tree

The other experience was one of those ‘A-ha’ moments that occurred during discovery day with a potential franchisee. He was a big reader, and believer in the book Emyth by Michael Gerber. It is a great read and really nails why we started franchising. We got to talking about the technician trap, getting sucked into being the painter in a painting business, instead of being a business owner in a painting business. Our franchises are setup to avoid this trap and stay focused on the franchise as a business opportunity not a painting opportunity. As we talked about the business we discussed all the areas of expertise that it takes to make a successful business in today’s business environment. Let me just hit on a few. Social Media, Search Engine Optimization, Search Engine Management, Sales, Operations Management, Technology, Finance, Advertising, and the list continues.

What would it cost you to have an expert working for you in all of these areas? One expert alone would cost at least $6k a month. What if you could have 7 experts working on your business full time for $2k a month? This is the SHOW ME THE MONEY moment. That is what a franchisee who just starts out gets. A whole bunch of experts working day in and day out on how to make your business more money. I love the franchising model because it creates the economies of scale very quickly for that small business owner so that he or she can reach their dreams.

Scott

You’re ambitious, you’re innovative, and you’re ready to enterprise your way into the business world. With such a gung-ho attitude, it’s hard to see the positives of buying a franchise instead of starting your own business. After all, why would you pay someone $30,000 or 5 percent of your sales when you could reap all of your own benefits? First and foremost, starting your own business is risky; 70-80 percent of independent businesses fail within the first few critical years. Buy a franchise, though, and your risk of failure drops to a mere 20percent. If those stats aren’t enough, here are five reasons I bought into franchising and why we continue to expand using this model:

  1. We are on the same team. Royalties increase as your sales increase. What that means is that when you need the most support,you get it while you have the lowest sales. A franchisor in this way bets on your success by giving you the most value early on in hopes of a long-term mutually beneficial relationship.
  2. Technology. In today’s market almost every small business needs a techie, but what small business can afford one? In my business experience, we have spent hundreds of thousands of dollars developing cutting edge software to run our company. When you are a small business that is not something you can typically afford. You shouldn’t have to focus on outsourcing, tinkering, and trying to get it right when your focus needs to be on sales and service the first few months.
  3. Buying power. When you are part of a larger organization you are able to participate in the savings that only large franchise networks enjoy. In some cases the savings may go beyond your royalty.
  4. Network. There are lots of ways to increase your network and thereby benefit by the knowledge of those around you, but when you are part of a franchise network you have access to the knowledge of every other franchisee in the company. This means that you have the chance to learn from all of their mistakes and successes.
  5. Branding. Check out this article on the value of the world’s top brands. This year the Coca Cola brand was estimated to be worth a whopping $68 Billion dollars. That’s Billion with a “B!” McDonalds, America’s golden arches, hit $32 Billion. Brands are worth something huge, and that brand power is made by a franchisor and franchisee working together to build that brand. When you buy a franchise, you get a piece of that the day you join.

The Power of Networking

Posted by admin under Networking

I have been in “business” since I was 15. The second job I landed (my first being Harvey’s, where I won employee of the month) was at McDonalds. Some would say that was an upgrade over Harvey’s. I can say that it was my first exposure to a well run franchise system complete with uniforms, state of the art video training and how to smile. While working at McDonalds, my father, who has been a great example of entrepreneurship suggested that I start a business. Having absolutely know idea what I was getting into I said sure.

Well four years later I grew under my Father’s mentorship a Canadian wide distribution business in the fishing arena. Walking into fishing shops across Canada I quickly learned the art of the sale and the power of networking. My Father had made many friends in the fishing business have spent far too much money at many of the same retailers I would soon sell my wares to. Without knowing it, I was using the power of networking to build my business from the 1st day I opened doors. During this time period I did not spend 1 dollar on any advertising or marketing. Everything was done through seminars, direct sales and the odd fishing article I would write for several publishers.

Today I run Five Star Painting, America’s 2nd largest painting franchise system with franchisees in Canada, the USA and Mexico. If it sounds like I am boasting somewhat, I can’t help it. I am very proud of what our team has accomplished. With this as a backdrop you may be able to guess what is the one of the most effective marketing tactics employed by our franchisees. Networking. It represents nearly 30% of each franchisee’s business, and has among the highest close ratios on estimates. The cost of networking is time and a few dollars, but the power of networking pays dividends for years. It is the foundation of success for many of America’s small businesses.

If you are just starting out and would like some shortcut tips here are a few of best groups to hit up for a good network.

BNI – networking group that comes with a small membership fee and regular breakfast meetings. The group is focused on lead generation through the network

LeTip –  similar to BNI

Chamber of commerce – honestly I can say that the success of your chamber membership depends largely on how the chamber is run. I have seen great success to nothing.

Twitter

Linkedin – this one is a must for any business professional.

If you have other networking groups you think should be added feel free to leave a comment.

Financing Your Franchise

Posted by admin under Franchise

I have been in the business of selling franchises for some time now and one of the most common questions I get is “do you offer financing?”. The answer to this question is yes, but which one of five ways would you like to go about obtaining financing your business?

In this market, we have seen a decline in banks stepping up offering the capital to get into business, although this is starting to change. What I have seen more and more of, is using a 401k to approach the franchise purchase. In this market with volatile returns, that thankfully have come back somewhat, what better person to bet your money on then yourself?

Back in 1999-2001 I spent some time trading, and did fairly well, but when the market started to tank I decided to get out of stocks and invest in a myself. I haven’t looked back since then and I would encourage you to look for ways to put a few dollars down on yourself.

If you are interested in looking into using your 401k to finance your franchise there are a few groups out there that can help you. Benetrends, and Franfund are both well known. I have come to know Randy Staples, an upstanding lawyer who really has pioneered this approach. Feel free to look him up and let him know I sent you.

Check out the Finance Purchase Plan.

Why Did You Franchise?

Posted by admin under Franchise

I had a call today from someone in the painting industry wondering what made us franchise our business. For about 20 minutes we reviewed his business, and how he has gone about growing it. As I thought back with full 20/20 vision I came to conclusion that franchising is not for everybody.

Here is why:

  1. Investment. Be prepared to invest a lot of money in your Franchise system. This is critical, because if you hope to one day collect a franchise fee you had better have something worth paying for.
  2. Experience. If you don’t know someone that has done franchising you need to find someone fast. Franchising is not just about royalties, and franchise fees, it is about creating value, creating a brand, and being a good partner. This is critical, and I can’t express enough how important this piece of the puzzle is. Unfortunately there are some systems out there who are only interested in the fees they collect. If you are in business for the long haul, and I would recommend that you should be, you need to have someone who understands the relationship between franchisee and franchisor and can help you execute on making that relationship come off the way it should.
  3. Not everything should be franchised. I have often used, and heard the expression “you can’t franchise mediocracy” and it is true. Before you start franchising your business be sure you have something worth franchising.
  4. I hope you don’t need sleep. Like anything worth having, a franchise company is going to take a lot of work, mind time, dedication and difficult moments. Nothing was more exciting than adding our first franchisee to our system, and nothing was more difficult than losing our first franchisee.

All this being said, Five Star Painting has been the most exciting, rewarding, fun business I have ever been a part of. If you hope to one day franchise your business, make sure you surround yourself with people ready to go on a journey and brace yourself for some exciting times.

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