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What Is It Like Owning a Franchise?

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What Is It Like Owning a Franchise?

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Are you hoping to be a business owner one day? Do you want to take charge of your financial future by becoming an entrepreneur, working for yourself and not for others?

There are many ways of making your entrepreneurial dreams come true. In the 21st century, starting a business is more accessible than at any other point in history.

But not all business paths are created equal. Many require long, difficult journeys to get from idea to startup to the first dollar in the bank. Owning a franchise, on the other hand, offers a very clear path forward. With a franchise, you are leveraging the assets of an existing business to take a lot of the guesswork out.

It’s the fast track to entrepreneurial success and should be a top consideration when you begin your own journey. Keep reading to learn what running a franchise is actually like.

Franchise Business Definition

A franchise is another branch of an existing business. It’s when you buy the right to use a particular business’s name, trademarks, branding, knowledge, and products.

Rather than having to build your own brand, developing your own product or service, you can use someone else’s. For example, you can become one of the 38,000 people who own a Mcdonald’s franchise worldwide.

When you do this, you pay for the right to sell McDonald’s products, using their systems and processes, their equipment, and their brand. This may be a much better option than starting a brand new burger joint with no reputation.

When you do this, you have zero customers. You have to build a brand reputation and a following from scratch. While it can work, it takes a long time.

With a franchise, on the other hand, you are leveraging the brand built by others, often over decades. When you start a franchise, you have customers from day one.

Owning a Franchise

Starting a franchise is a great option for first-time business owners. As a franchisee, you are going to get a ton of help. The franchisor won’t leave you on your own.

In fact, they’ve built out an entire program that will guide you to success as a franchise owner. The company wants you to be successful. The more successful you are, the more successful the franchisor is, too.

You get to use systems and processes developed by the original company. That means processes for hiring and managing staff. It also means processes and procedures for everything serving customers to cleaning, opening the shop to accounting, and pretty much anything else.

As a franchise owner, you have the freedom to manage the business as you see fit. However, you are in effect operating someone else’s business. You own it, but you have to play by their rules. You serve their products, wearing their uniforms.

A portion of your revenue goes back to the parent company. But it’s a small price to pay for the priceless education you receive and the quick profits you can expect to make.

Starting a Franchise

To start a franchise, you’re going to need some capital. Starting a new location can be quite expensive, though you may only need a portion of that yourself.

The parent company may cover half or more of the startup costs on your behalf. Generally, you can expect to need between 25% and 40% of the total startup cost as a down payment.

On top of that, you may need to take a franchisee course before you are approved to own and operate a franchise. This can take some time but is always worth the effort.

Is a Franchise Right for You?

Many people have dreams of owning their own company, under their own brand, serving customers in their own way. It’s an extremely rewarding path to take, but it’s one that is long and difficult.

Starting a business from scratch is much easier when you already have experience managing a business. As a result, it’s often best to start your entrepreneurial career by starting a franchise.

It’s kind of like business school, but instead of walking away with a degree at the end of it, you have a fully functional, cash-flowing business that you can keep or sell.

It’s an education that actually pays you, rather than the other way around. Plus, after successfully owning and operating a franchise, you will be in a much better position to start your own company one day.

You may have the cash needed to start your business without a loan. Or, since you have experience running a business, you’ll be more qualified to get a loan or investment in your new endeavors.

So whether you eventually sell your franchise to another aspiring entrepreneur, or keep it and pay a manager to handle the operations for you, owning a franchise is a good idea for most would-be business owners.

Best Franchises to Consider

The best thing about owning a franchise is that there are so many options available. When people hear about franchising, most people think about a restaurant franchise.

That’s just one example. If you like the idea of working in the restaurant business, franchises are a solid option. But there is so much more opportunity available.

There are retail stores like 7-11 or Ace Hardware. There are hotel franchise organizations like Marriott. There are real estate offices, accounting services, fitness centers, salons, carpet cleaning services, and many other franchise examples.

Many franchises will require a large number of startup funds, as you’ll need to buy or rent a building and outfit it with all of the equipment necessary to run a brick-and-mortar location. However, there are service-based franchises you could start for far less upfront.

With a service-based franchise, you would only need a vehicle and some basic equipment. That means you have a much lower loan and can start meaning a profit much sooner than with brick and mortar franchises.

Check out this article for more information on affordable franchises to consider. After all, the lower your startup costs, the sooner you can actually get started and start building the life you dream of.

Leverage the Success of Others

Owning a franchise is a smart move. It makes business ownership much more attainable, and it makes success much more likely. It allows you to leverage the success of others while you build an asset that you own.

Looking for other articles like this? Visit our blog today to keep reading.

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Tips For Beefing Up Your Franchise Development Plan In 2021

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The franchising industry has often been resilient, and 2020 was the latest, and perhaps greatest, example. As COVID-19 caused hundreds of thousands of deaths and ravaged our economy, franchises from various sectors found ways to adapt, survive, and in some cases thrive.

So how do we do it again in terms of franchise development in 2021 – despite more economic uncertainty ahead? At some point later this year, hopefully, thanks to vaccines, we can put the pandemic behind us. But what can we learn from last year’s trying circumstances, how can we apply those lessons this year, and what should we consider adjusting or doing differently? Here are five tips to help your franchise development and keep it ahead of the curve as the economy tries to recover:

Extend your digital marketing and communications. This includes building out your social media, including YouTube, for immediate, consistent, and far-ranging reach. Accentuate your message with video and posts geared to solutions for your target audience. Join neighborhood Facebook groups to connect with your company’s demographics. The pandemic took digital technology to another level as companies saw upgrading it as a necessity, incorporating Zoom calls with employees, franchisees and clients. Stay on top of the ways technology can connect your franchise with customers and make operations run smoothly.

Open a career path for the unemployed. With unemployment still a big problem due to the recession caused by COVID-19, entrepreneurship has become a more attractive option for those seeking work. For franchisors, a larger pool of potential franchisees and people whom franchisees can hire is available. Franchisees can be drawn to the freedom, growth potential, company support, and other attributes that their former career didn’t have. Entrepreneurs of any age can turn to franchising to build their own legacy while still having the support of an established brand. Another selling point: with low interest rates, entrepreneurs are in a better position to receive the funding needed to start a franchise business.

Find different ways to expand your in-person grassroots efforts. Obviously, door knocking isn’t as easy in COVID times. But we find that partnering with HOAs is a good way to attract new customers. Also, you can host local events and organize giveaways, or set up a booth at such events to inform the community about your business. Combining this old-fashioned kind of networking and marketing with the digital approach can help fill your pipeline.

Give back, and create good will. In these challenging times, giving back to the community has taken on heightened importance. Get involved with your community, show that you can be used as a resource, and for more than just your service. For example, one of our Mosquito Authority franchisees is giving 100 free treatments per week to frontline COVID workers. And after the hurricanes in Louisiana this year, our franchisees treated work camps for utility workers who were helping to restore power. Good will goes a long way and leads to customer loyalty.

Be a dependable means of support for franchisees. Most people starting their own business don’t have the built-in benefit of company support. That reassurance and reinforcement in myriad ways certainly aided our franchisees during the challenges of 2020. Across the country, franchisors in our business and other sectors stepped up to help. Whether it was financial restructuring or providing infrastructure, supplies, or employees in a pinch, franchisors learned how doing these things strengthened franchisees and their commitment and the companies as a whole. Keeping this mindset of always being there for their franchisees is a crucial piece of the overall development plan.   

There is a lot of promise in general for franchising in 2021. Technology has provided the tools and new ways to do business. Many talented, enterprising people are eager to seize new opportunities and reach their potential. People are trying to help each other more in trying times, and franchisees not only fill needs, they are all about reaching out. Finding and maintaining business success is never easy, but a development plan geared to different times, and the discipline to stick to it, can make the journey fulfilling and rewarding.

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Chris Buitron is president and CEO of Mosquito Authority® (www.mosquito-authority.com), a nationwide leader in mosquito control with franchises serving communities across the U.S. and Canada. Buitron has an extensive background in franchise industries. He was chief marketing officer for Senior Helpers, vice president of marketing for Direct Energy (home services division), and director of marketing for Sunoco Inc., where he supported the company’s 4,700 franchised and company-owned rental facilities across 23 states (over $15B in annual revenues).

 

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7 Proven Tips To Buying a Business Post-Pandemic

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When is the right time to buy a business? It’s an important question many people ask themselves for a variety of reasons, and it becomes even more interesting when they’re considering purchasing a business after the COVID-19 pandemic ends.

That leads to a series of related questions. Such as, what types of businesses and locations will represent the best opportunities post-COVID? Which ones will pose the highest risk? Should potential new owners expect to get a decent deal, or would it be worth putting a bunch of their savings toward?

What kinds of companies have these potential owners been dreaming of during their working days? Shouldn’t it be the kind of business they could enjoy, rather than one that would run them into the ground, perhaps causing regrets and a lot of lost money?

Chances are, a lot of people will be ready to sell after the draining pandemic, and here are some tips to help you decide about buying:

1. Decide how much money you want to make. This should be the first question you should ask yourself because of the amount of money you want to make determines what kind of business you are going to buy.

2. Pursue a business you would enjoy. It is always better to be involved in a business that reflects your interests and brings you enjoyment. Ideally, your vocation will be a vacation. We don’t want to acquire a business that requires us to be behind a desk all day long when our passion is to be outdoors.

3. Make a list of all your talents. From the obvious to the forgotten ones. Don’t leave any of them out. If you are proficient at MS Word, Excel, and other computer programs, write it down. If you know how to play a musical instrument, be sure to include it on your list of talents. Take a complete inventory of things you know how to do, which will be important in your search for the business you are going to acquire.

Once I was coaching an individual who wanted to earn additional income because their job wasn’t producing enough money. After we did an inventory of their talents, we discovered that in their younger years they had managed rental properties for their dad. I suggested they start a real estate management business. They did and eventually owned and managed multiple properties, ultimately netting a six-figure income.

4. Select where you want to work. Do you want to stay in the same area where you are residing now, or are you willing to relocate? If you are not interested in relocating, then there is a possibility your opportunities will be limited, unless you decide to work on a national basis by selling products on the internet.

The famous bank robber Willy Sutton was asked, why did he rob banks? To which he replied, “That is where the money is.” The best place to own a business is where there is growth. Cities, communities, and relationships are all either living or dying because nothing stays the same. Things are either going backward or forwards. Stack the odds in your favor; go where there is growth and give the business an edge.

5. Know who you are as a potential business owner. Are you a self-starter who is disciplined, and once you start a project you finish it? Or do you perform better with a partner? I have worked with many people who, even though they were provided with a step-by-step guide for what to do, were not able to implement and complete the program themselves. But if they partnered with another individual, they completed the job. When buying an operating business, you will get not only the playbook of how things are done but employees who know the business and a business that is producing a cash flow from the day you take over.

6. Know your comfort level – out front or behind the scenes? Do you like working with the general public and servicing the general public, or are you more comfortable behind the scenes helping people via emails or telephone? If you are an introvert who feels uncomfortable talking to people in person on a daily basis, then you should not own a retail or service business that requires a lot of personal interaction. I have seen people who enjoyed being a customer in a retail business, then purchased a retail business, only to discover they didn’t like the hours involved, working with individual shoppers, or the back-office duties. They ultimately sold the business at a loss.

7. Don’t get hung up on how and where you will get the money to get started. Once you have determined how much money you want to make, what you enjoy doing, what your talents are, and where you want to live, finding the right business gets a lot easier. Now you have the checklist of wants and needs, and all you need to do is to search out businesses that are for sale.www.bizbuysell.com,www.businessesforsale.com

I have bought businesses with no money down and have started businesses with no money down. Sometimes you may have to borrow money from credit cards or bring a partner on board to provide the money while you provide the work. This is called “bootstrapping” and it is how many people get started.

Or you may want to use what we call “Love Money,” which is from family and friends. Money is not as hard to get as people think, because if the opportunity is good enough you will find the money. Money is attracted to opportunity. Especially after a pandemic. Many owners are tired of operating their businesses and are more receptive to selling out now than before. And as the saying goes, “Luck is when preparedness meets opportunity. And opportunity is always there.”

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Terry Monroe (www.terrymonroe.com), is founder and president of American Business Brokers & Advisors (ABBA) and author of Hidden Wealth: The Secret to Getting Top Dollar for Your Business with ForbesBooks. Monroe has owned and operated more than 40 different businesses and sold in excess of 800 businesses. As president of ABBA, which he founded in 1999, he serves as an advisor to business buyers and sellers throughout the nation. As an expert source he has been written about and featured in The Wall Street Journal, Entrepreneur magazine, CNN Money, USA Today, CEOWORLD, and Forbes.

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How to Have a Profitable Business in Any Economy

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People start and buy businesses for many different reasons. Some people do it as an extension of their passion for a certain thing such as flowers, woodworking, machinery or serving people. Some people do it for the thrill of winning, but ultimately everyone who goes into business does it to make money.

There are thousands of books that have been written about business telling you what to do and what not to do, but ultimately making money in business is not that difficult. Listed below are five fundamentals of what it takes to have a profitable business.

Income – expenses = profit. Income is determined by how much money is generated by the business. Expenses are what is needed to operate the business. Profit is what is left over after deducting the expenses from the income. You can always increase your income, but you can only reduce your expenses so far before you don’t have enough of the basics to keep the business operating.

Sales. A lot of people don’t like to hear the word sales, because they don’t want to be in sales or affiliated with sales, but without sales there is no business. Sales is the business. The major goal of every business is to increase sales, because without sales there is no income.

Sales combined with income and expenses applies to all industries. It doesn’t matter if you are operating an exercise/yoga clinic or a computer chip manufacturer, the formula is the same. Even churches have a sales department to entice their congregation to give more. Sales is what makes the world go around.

The formula shapes your business model. Over time, with the practicing and perfecting of the sales aspect along with the income – expenses = profit formula, you will develop a business model that works. This is called a profitable business.

Make the model scalable. To add more profits, hopefully the business model you have created is scalable and you can duplicate the business model either through franchising, dealers representing your business, or the opening of additional facilities using the same model you created and perfected.

What I have explained in five steps is very simplistic on how to have a profitable business anywhere. This formula is applicable in any geographic area and to any business. Anything else beyond the sales and income – expenses = profit model is called an excuse. I was taught early on in my business career that “You can make money or you can make excuses, but you can’t make both.”

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Terry Monroe (www.terrymonroe.com) is the president and founder of American Business Brokers & Advisors. The author of four books, he most recently published Hidden Wealth: The Secret to Getting Top Dollar for Your Business, with ForbesBooks. Monroe is a professional intermediary, consultant, and market maker for privately-held companies and has been involved in the sale of more than 800 businesses. In his 35-plus years of service, he has owned and operated more than 40 different businesses. At American Business Brokers & Advisors, he serves as a consultant for business buyers and sellers throughout the nation. As an expert source he has been written about and featured in The Wall Street Journal, Entrepreneur magazine, CNN Money, USA Today, CEOWORLD, and Forbes.

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Dunkin’ Donuts Unveils Ambitious China ‘Roll-Out’

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Canton, MA – Global donut giant Dunkin’ Donuts has signed the largest joint venture agreement in the company’s history with the goal of expanding its presence in China from the current 16 donut shops to a network of 1,400 franchises over the next 20 years.

The joint venture has exclusive rights to expand Dunkin’ Donuts in new Chinese locales including Beijing, Chongqing, Fujian, Guangdong, Guangxi, Hainan,  Hong Kong, Hunan, Jiangxi, Macau, Shanxi, Sichuan, Tianjin, and Yunan.

The opening of the first restaurant is expected by the end of this year.

Dunkin’ Donuts restaurants in China feature the brand’s standard fare including regional items catering to local taste  including such favorites as “Dry Pork and Seaweed” donuts and “Mochi Rings.”

In 2013, Dunkin’ Donuts signed a master franchise agreement with Fast Gourmet Group to develop the brand in Eastern China to open more than 100 restaurants in the Shanghai, Jiangsu and Zhejiang regions.

Dunkin’ Donuts currently has more than 11,000 restaurants in 36 countries around the world, including 16 in China and more than 2,200 across the Asia Pacific region.

The company has entered into a long-term master franchise agreement in which Golden Cup Pte. Ltd., a joint venture between Jollibee Worldwide Pte. Ltd. and Jasmine Asset Holding Ltd., a wholly owned subsidiary of RRJ Capital Master Fund II, L.P.

Jollibee Worldwide Pte Ltd., a wholly owned subsidiary of Jollibee Foods Corporation, which operates the largest food service network in the Philippines.

Jasmine Asset Holding Ltd is a wholly owned subsidiary of RRJ Capital Master Fund II, L.P., which was established by RRJ Capital, an Asian-based investment firm with offices in Hong Kong and Singapore.

The master China franchise agreement is the latest step in Dunkin’ Donuts’ plan to accelerate its international growth.

Last year, the Massachusetts-based company signed franchise joint venture agreements to expand operations in key global markets including Brazil, Sweden, and Austria.

01/08/2015

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Johnny Rocket’s Open’s New Singapore Restaurant

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Alsio Viejo, CA – After successful development in Southeast Asian markets, including the Philippines, Malaysia and Indonesia, Johnny Rockets is now partnering with new partners to open a new restaurant in Singapore.

“With 13 restaurants currently operating in Southeast Asia, Singapore is a natural next step in furthering our expansion in the region,” said Scott Chorna, SVP of International Development for Johnny Rockets.  “With the demand for better burger concepts booming, now is the ideal time for Singapore residents and visitors to experience our signature American dishes.”

A destination for both residents and travelers, Johnny Rockets’ entry into Singapore paves the way for future growth in Asia, particularly Vietnam, Thailand and China, markets “that historically have embraced Americana cuisine and culture,” the company said.

Johnny Rockets’ franchise partners currently operate more than 100 restaurants outside the US, with plans to double that number by 2017 as part of its global strategy.

Purchased by Sun Capital Partners in June 2013, Johnny Rockets operates more than 320 franchise and corporate locations in 26 countries around the world.

 

10/10/2014

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BLT Steak to Open Restaurant in Tokyo

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New York, NY – Global restaurant and hospitality group ESquared Hospitality is partnering with Tokyo-based Jinterji Co. Ltd. to bring BLT Steak to Japan.

The first BLT Steak Tokyo will open at Roppongi-Itchome Izumi Garden later this month.

BLT Steak and ESquared Hospitality opened their first restaurant in New York City in 2004 and have grown their network to more than 10 brands and 28 restaurants worldwide, including 14 BLT Steak and BLT Prime locations.

The new Tokyo restaurant will be ESquared Hospitality’s sixth outpost in Asia, joining BLT Steak restaurants in Hong Kong and Seoul, and BLT Burger locations in Hong Kong and Taiwan.

ESquared Hospitality will also open BLT Steak in Bahrain later this year, marking the company’s first entrance into the Middle East.

The new BLT Steak Tokyo is a bi-level restaurant featuring high ceilings on the main floor with a spacious bar and dining room, which can accommodate 111 guests.

At the back are four private dining rooms that can seat six to eight guests in each, or be combined to host up to 20 guests.

Guests may smoke on the mezzanine level, which boasts a unique design and seating for 40, while an outdoor terrace “is adorned with greenery and colorful artwork to create an elegant resort atmosphere,” the company said.

09/09/2014

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Cold Stone Creamery to Open First Store in Central America

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Scottsdale, AZ – Cold Stone Creamery will enter the Central American market with the opening of its first store in El Salvador later this year.

Kahala Brands, the parent company of Cold Stone Creamery has signed a master franchise agreement with CMR Global S.A., a subsidiary of GP Restaurants, to open the new store in the capital city of San Salvador’s Multiplaza Mall.

GP Restaurants is well known as a leader in the food and beverage industry in Central America, representing over 15 brands with over 160 restaurants across El Salvador, Panama, Guatemala and Costa Rica.

Cold Stone Creamery has made strong moves into the international market in recent years.

The company’s international growth began in November 2005 when the company opened its first international store in Tokyo, Japan.

Today, Cold Stone Creamery stores are operating in nearly 300 international locations and over 25 different countries, including the Philippines, Cyprus, Kuwait, Qatar, Trinidad, Nigeria, Egypt, and Indonesia.

Headquartered in Scottsdale, Arizona, Cold Stone Creamery is a subsidiary of Kahala Brands, which maintains a portfolio of 15 quick-service restaurant brands.

09/05/2014

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Moscow Says ‘Nyet!’ to McDonalds; Cites ‘Food Safety’

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Los Angeles, CA – Russia has ordered the closure of four McDonalds fast-food restaurants in Moscow because of what the government says are possible “breaches of sanitary rules.”

The four restaurants include the first ever McDonald’s in Russia, which the Oak Brook, Illinois-headquartered global mega-giant says is the busiest in its entire 35,000 outlet global network.

Raising an eyebrow at the move by Russia’s food safety watchdog, many in the business community dismiss Moscow’s assertion saying the move is a another reaction to the sanctions imposed by the US and the European Union over the country’s seizure of the Crimea and its incursion into Ukraine.

“Obviously, it’s driven by the political issues surrounding Ukraine,” said Alexis Rodzianko, president and CEO of the American Chamber of Commerce in Russia at a press conference held after the move was made public. “The question on my mind is: Is this going to be a knock on the door, or is this going to be the beginning of a campaign?”

The day after the decision, a sign on the door of the largest McDonalds that was shuttered said the restaurant had been closed “for technical reasons.”

A statement released by the government stated that “documents” had been presented to McDonalds’ management and that the shops had been closed for “numerous sanitary violations dealing with product quality,” without giving any details.

McDonald’s head office released a statement to the press saying that the company “is closely studying the subject of the documents to define what should be done to re-open the restaurants as soon as possible.”

Russia’s first McDonald’s opened on Moscow’s Pushkin Square in 1990.

The company currently operates 438 restaurants in Russia and considers the country, which currently generates about 10 percent of the company’s European operating profit,  as one of its top seven major markets outside the US and Canada.

Other US companies with operations in Russia are closely monitoring the situation, curious as to whether Moscow will expand the regulatory scope of its sudden, intense concern over “product quality” issues.

That list of vulnerables includes such icons as Coca Cola, Starbucks, KFC, Pizza Hut, Jack Daniels, and McDonalds’ arch-rival Burger King.

08/22/2014

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Wendy’s: ‘Aye’ to Canada, ‘Nyet’ to Russia

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Dublin, OH – Fast food giant Wendy’s has announced a major overhaul of its international operations with almost simultaneous moves to increase its Canadian footprint and reduce its presence in Russia.

On the Canadian front, Wendy’s currently operates 367 restaurants across the country, 230 of which are franchises. By early next year, the company said, the remaining stores that are company owned will also be franchise operations.

According to sources, the company is betting on Canadian franchisors having a better understanding of the Canadian fast food market with the goal of opening at least 100 additional franchises in Canada over the next six years.

Wendy’s is the third-largest burger chain in Canada, behind global mega-giant McDonald’s and A&W. The company has a joint real estate venture with Canadian donut king Tim Hortons called ‘TimWen’, that has Wendy’s leasing 42 facilities across the country for Wendy’s/Tim Hortons combo restaurants.

At the same time it announced its expansion in Canada, Wendy’s said it will close the eight burger restaurants it’s opened in Russia since 2010.

Wendy’s, which had originally planned to open 180 locations in Russia, has cited disagreements with its local partner, Wenrus, for the decision.

The Russian franchiser, the Ohio-based company said, “has not expressed interest in growing Wendy’s business in Russia, nor have they shown the resources to successfully operate the existing restaurants on a long-term basis.”

Currently, Wendy’s operates more than 6,500 Wendy’s restaurants in the US and 27 countries including Singapore, Azerbaijan, Georgia, Costa Rica, the Bahamas, Singapore, Guatemala, Japan, Argentina, Venezuela, the United Arab Emirates, the Dominican Republic, New Zealand, Malaysia, and the Philippines.

08/08/2014