Ready to Franchise? Consider This First

3:49 PM ET

By: BusinessNewsDaily Staff

 

 

Going from a one-unit business to a franchise can be a big leap. Pierre Panos, founder and CEO of the upscale fast-food chain, Fresh to Order, knows all about it. His company, which was founded in Atlanta in 2005, recently began franchising. It currently has two franchised units and has agreements to franchise several more in 2011.

Panos offered BusinessNewsDaily readers a few do's and don'ts to consider before franchising their own business idea. 

Do's:

• Ensure your unit economics work for you before franchising. You should feel comfortable opening your own stores when you've proven your financial model can work. After opening the first Fresh to Order in 2005, we spent the next five years perfecting the concept and opening additional locations before we began franchising.
• The concept must be fully developed before you start franchising. Once you start, you cannot make major changes, but minor tweaks are okay.
• Ensure you get a well-respected business attorney , familiar with franchising, to prepare your Franchise Disclosure Document (FDD) and related paperwork. If not, one unhappy franchisee could ruin the entire system.
• It is imperative to have all your training manuals and operations procedures perfected before you start franchising. Doing this on the run will negatively affect the cohesiveness of the brand.
• Start a franchise association early. All good leaders listen and collaborate with their teams. Franchisees are your partners, not your employees. Listen to and collaborate with them. Some of the best ideas in franchising were developed by franchisees.

Don't:

• Don’t grow too quickly from a small base of stores. Franchises that grow too quickly often lose control of their brand standards.
• Don't grow all over the country or world before you can support the stores effectively. Grow concentrically around your home base. A common complaint from franchisees who are geographically isolated from their franchisor is the lack of marketing and operational support.
• Be very selective when accepting franchisees into your system. Don't [just] take anyone who can fog a mirror. Just because someone has the money doesn't mean they will be a good operator for you.
• Don't outgrow your support structure. Bring seasoned professionals on board just before you think you need them.
• Don't run out of cash. You need to be fully capitalized when your business is in growth mode.

 

 

I Have A Great Business Idea. Can I Franchise It?
September 29, 2006 by Cris |


FreeAdvice:

If you are contemplating a franchising system you should 1st subject your concept to a careful feasibility study to see if the business you have in mind makes sense economically, and as a franchise concept. And, of course, the operation must be running and successful – no one is going to pay a franchise fee for an untested concept.

Then, if you are convinced it does make sense, you should arrange an attorney for the Intellectual Property protections you’ll need, in terms of trademarks, patents, trade secrets, etc, and also consider how you will comply with the FTC laws and the franchising laws of the key states in which the franchise would be offered or BEFORE you start to sell the franchises.

Training Franchise Employees: Essential ingredients for unit success

By Eddy Goldberg

 

 

One of the challenges new franchisees face begins soon after the franchise agreement is signed: hiring and training employees. The success of each franchised unit depends on the quality and behavior of its employees - and it's hard to find a franchise concept that doesn't need employees to function.

 

Turning that bored, part-time teen into a productive employee with a positive attitude is a key ingredient for success. In fact, many experienced franchisees follow the maxim: "Hire for attitude, train for skills." A good attitude goes a long way in a team-oriented environment; skills can be learned.

 

In practice, everything an employee does makes an impression on each client or customer - creating satisfaction and loyalty, or driving them to a competing brand. For franchisees, it's all about managing the "customer experience," and training employees in the ways to deliver it, in every transaction, every day. In other words, the success of your franchise business is directly related to the quality of your employees' behaviors and attitudes.

 

Training is a delicate art. Employers not only must be adept at judging character, they also must comply with a long list of laws and regulations if they want to stay out of court. A minefield of potential legal trap doors can trip up even the best-intentioned employer. If you don't know what to ask, say, or do - and what not to - hire someone who does or bone up on employment law and avoid a world of trouble.

 

 

 

How to Build a One-Person Franchise Business

by Melinda Emerson on November 29, 2011

As John Warrillow, the author of “Built to Sell,” writes;
“The number one mistake entrepreneurs make is to build a business that relies too heavily on them.”

The only way that you’ll be able to sell your one-person business is to take someone on as an employee, and teach them how to be The Owner.

The Model
For around $80,000, you can become the owner of a business coaching franchise. Your role as the franchisee is to call on small businesses in your geographical area that may be interested in your consulting services. Some of the services that you offer may include business planning, sales and marketing program implementation, inventory management…basically anything related to the operation of a small business.

If you can convince enough of the people that you’re calling on to sign on for your services, you can do pretty well. But, since most of your clients engage with you on a short-term basis, you must continue to keep your sales funnel full. That means that when you’re not doing your paid consulting gigs, you’re either calling on potential new clients, or attending business networking events in order to keep your name front and center with fellow small business professionals.

You’re the business. For the most part, your clients aren’t buying your franchise’s brand. They’re buying you; you’re unique personality…your skills. They’re also buying what others are saying about you, and how well you perform. That’s a problem.

Fixing The Problem
In order to make your one-person franchise business one that can be sold someday, you’ll have to start to slowly remove yourself from the picture. That means that you’re going to have to start hiring others that can do what you do. One great thing about the franchise model is that it’s so system-oriented; it’s fairly easy to train new employees.

You can add new employees at any pace you want; just have enough of them to have the ability to start making some choices. The choices that you’ll be making have to do with finding a buyer. That’s right; as soon you start bringing employees on, try to figure out which one could potentially buy you out at some future date.

Using the example of a coaching franchise, if you do this right, which includes proper planning, you could have 3 coaches under you who are all building a client base, which includes a revenue stream…one that doesn’t only involve what you bring in.

A business with money coming in from several different sources is a heck of lot easier to sell.

ONE-MAN JOBS

Solo franchises combine support and simplicity

By Adam Stone - Special to the Times

Tuesday Jul 27, 2010 12:34:28 EDT

 

Even before Air Force medic Robert Anaya left the service in 2005, he had his next career all picked out. Tapping into his background in construction, the senior master sergeant decided to pursue income and independence as a home inspector.

But the financial picture was not encouraging. With business cards and brochures, administrative support and other infrastructure, starting up could be a costly affair. Then he found an alternative: For about $10,000, he bought into Pro-Sight Property Inspections, a national operation that would allow him to work independently while managing marketing and other business details for him.

“Everything was already developed, the website and marketing materials,” Anaya said. “So I thought, why reinvent the wheel?”

For many entrepreneurs setting up shop for the first time, the one-man franchise can be tempting for its combination of support and simplicity. Anaya has no employees and virtually no overhead. He works on his own and keeps what he earns, minus a small ongoing fee to Pro-Sight.

“Probably the best reason for [opening a one-person franchise] is that you just flat-out don’t want to manage other people and don’t want their headaches,” said Steve Richards, president of Lighthouse Franchise Consultants in Atlanta. “Either it’s a pain in the rear and it takes a lot of time, or else you’ve got to pay someone to do it for you, which reduces your profitability.”

There are any number of franchising models that let you fly solo, including pet care, tutoring, computer consulting and home health care.

One growing field is mobile drug-testing: entrepreneurs who travel between places of employment collecting blood samples for obligatory screening.

For many, the attraction of these businesses is the independence they offer.

“You can control your own schedule. The harder you work, the more you make,” Anaya said. “And then there is the customer service. When you hire someone, you hope you get a good employee, but you don’t really know. Nobody thinks just like you.”

Anaya has more independence than most franchisees because Pro-Sight is an “affiliation” arrangement rather than a strict franchise, which means he operates under his own business name, Cornerstone Property and Environmental Inspections.

Still, he enjoys the same basic benefit as any solo businessman: He doesn’t have to deal with the reams of paperwork that come with having employees. Not having employees also means avoiding reams of paperwork. Once you hire someone, “you’ve got payroll, you’re got taxes, now you need to figure out about health benefits. You have all these other things to worry about,” he said.

Challenges of working solo

While you may be able to dodge those hassles, solo franchises come with their own challenges. In particular, there’s no one to push you.

“There are some people who can’t work on their own, who get distracted by the refrigerator or the wash, who can go jog or play with the dog,” Richards said.

Veterans may be highly disciplined, Richards said, but they also are used to being held accountable. It takes a different kind of focus to stay on track without a commanding officer looking over your shoulder.

Expertise matters, too, whether you’re inspecting properties or executing blood tests. “It’s not like you necessarily come out of the service with that skill,” Richards said. “So for a one-person franchise, it’s especially important to see what the training is like with that franchise.”

Then there is the money. While prices may vary, a solo practice will always cost less than a quarter-million-dollar fast food opportunity. On the flip side, banks may be less willing to lend the startup costs when the operator has nothing to put up as collateral beyond his or her dog-walking skills.

And once you do start up, you’ll find that not having employees brings its own hassles.

For Anaya, the simple question of who would answer the phones became a problem. “If you try to talk to a client and your phone is ringing every five minutes, you just can’t do it. Either you don’t answer the phone and you lose that business, or else you turn your back on the client that’s right in front of you,” he said.

Like many one-person operators, Anaya hired an answering service. “That has made a huge difference,” he said.

For those who do strike out along the solo path with a little help from their franchisor friends, Richards advises keeping the big picture in mind. “When you are at the point where you don’t have any time either for the business side of the business, or any time for your life, then it’s time to think about hiring someone,” Richards said. “The object ultimately should be to build a business that has employees, that generates revenue, that can sustain itself without you. Then you are building value, then you have something you can sell one day.”

Finding Your Passion

Call it passion, enthusiasm or fire in the belly--it's what energizes successful entrepreneurs. Here's how to unlock yours.

BY Sean M. Lyden | March 1, 2001|

Marianne Szymanski discovered her passion as a young girl. "I've always loved children and believed in helping others," says Szymanski, the president of Toy Tips Inc., a consumer-focused international consulting firm in Milwaukee that tests toys based on appropriate age and skill development. "As a pre-teen, I enjoyed holding MDA [Muscular Dystrophy Association] carnivals in my backyard. I would donate my old toys as prizes and have games and go-cart rides set up to raise money for MDA. Sometimes I would raise [only] $32, but I was so proud to turn it in because that was the outcome of my little carnival."

Szymanski has since parlayed her passion into a thriving venture. The idea for Toy Tips came when she worked as a sales rep for LEGO, her first employer after graduating from college in 1989. Her job was to sell the LEGO line to toy store managers, but often when she would visit a store on a sales call, the customers would think she worked there and ask for advice in search of the best birthday or holiday gifts for their kids. "I'd usually try to sell them LEGOs or direct them to a store employee, but all those questions [from parents about what to look for in toys] piqued my interest," Szymanski recalls. "I was 23 and had a lot of determination and a Visa card, so I was willing to take the risk."

In 1991, she took the plunge, leaving LEGO to start Toy Tips Inc. and offer parents objective advice about toys. Started as a toy advice hotline, Szymanski's company today conducts extensive toy research and publishes the findings in Toy Tips Magazine (distributed at Toys "R" Us and Target stores). The magazine summarizes research findings for parents and has such sponsors as Jiffy Lube, Curad, Hilton Hotels, Northwest Airlines and Gerber. Szymanski is recognized across the country as a leading expert on toys, regularly appearing on such shows as Good Morning America, Oprah and Later Today as well as on the Lifetime cable TV network.

The Passion Principle
One of the marks of successful entrepreneurs is their enthusiasm about their businesses. "When you're passionate about what you do, [prospective clients] would rather give their business to you than to your competitor," explains Richard Nelson Bolles, author of the bestselling book What Color is Your Parachute? In other words, when you have fire in your belly, you naturally attract business, as Szymanski has found.

How do you discover what kind of business lights your fire and will keep it burning for the long haul? Here are five steps:

1. Identify what gets you excited. Barbara Sher, author of It's Only Too Late If You Don't Start Now: How to Create Your Second Life at Any Age suggests you allow yourself to dream. "Ask yourself: 'What's fun? What do I like to do? What would I get a kick out of doing?' " says Sher. "Most people think they don't know what they want to do, but that's because they move too fast. They say, 'Well, I like such-and-such, but it doesn't make any money.' But you don't know that! You've got to wake up to what it is you like before you slam down the criticisms."

Bolles puts it this way: "If you're at a party, and there are people talking in different corners of the room about different subjects, and you overhear somebody talking about a subject that fascinates you so much you want to hang around and listen, what would that subject be?"

2. Go back to your childhood. "One way to tell if something is your passion is if you had an affinity for it during childhood," says Denis E. Waitley, a world-renowned motivational speaker and author of Empires of the Mind: Lessons to Lead and Succeed in a Knowledge-Based World. "When I think back to all the people I've interviewed, for many of them, what they were good at as children eventually became their passion."

3. Take stock of your talents. "What you love is what you're gifted at," says Sher. "That's a genetic thing. That's why horses get a kick out of running and many people do not. You don't love what you're not built to love. And if you don't do what you're built to do, you may never know what's wrong, but something is always wrong."

How do you determine what your talents are? On a sheet of paper, brainstorm the things you do well, the things that come naturally to you. If you're having trouble listing your gifts on your own, consult people you trust and ask what they think your best skills are.

4. "Shop" on the job. If you're working for someone else right now, look at your job as an opportunity to test out different skills to discover what you might like to do on your own. For Szymanski, part of what spurred her idea was her experience working at LEGO.

"A corporation is a great place to discover activities you enjoy," says Sher. "Wherever you work, take as much time as you can to 'shop' around the various departments. Learn the ropes, and find out what you get a kick out of."

5. Look at the big picture. Steven Covey, co-chair of Franklin Covey Co. and author of the bestseller The 7 Habits of Highly Effective People: Restoring the Character Ethic, suggests asking yourself three questions: Do I like doing it? Am I good at it? Does the world need it?

"If you have a passion that you're good at but the world doesn't need it, you've got a useless passion," says Covey. "If you're focusing on what the world needs and sell out your passion, you sell out what is uniquely you. But if you can make a living doing something that you're really good at and like-what a combination!"

Put It to the Test
How do you know if something is truly your passion and not just a whim? "Two weeks later, [the feeling] doesn't go away," says Hyrum W. Smith, vice chair of Franklin Covey Co. and author of What Matters Most: The Power of Living Your Values. "You get that fire in your belly; you're willing to sacrifice for it; you're willing to take risks for it. And even when people tell you you've lost your mind, you don't back down."

For Bolles, the test is this: "When someone says, 'I just feel I have to do this,' I know I'm talking to somebody who's found [their] passion."

What is it you just have to do? What's holding you back? "If you believe in yourself and know your passion, then do it!" says Szymanski. "Don't look for excuses not to. If you're offering society the best person you can be, you'll be rewarded with success-and the money will come. There will be ups and downs, but it will happen."

Resource Guide
Once you've discovered your passion, where can you go for help in converting it into a feasible business concept? Here are a few tips:

• At your local Small Business Development Center (SBDC), there are business consultants who can give you objective feedback concerning the feasibility of your business idea and help you design a step-by-step plan to get your venture off the ground. SBDCs are sponsored by the SBA, so most of their services are free. To find the SBDC nearest you, go to www.sba.gov/sbdc.

• Attend meetings sponsored by the local chapter of the trade associations related to your interests. You'll gain a greater understanding of an industry and, by meeting and talking with industry veterans, get a feel for whether your business concept has potential. Trade association meetings are also excellent places to find prospective mentors who can give you the emotional support and hands-on information you need to turn your passion into a profitable business.

Chinese Proverbs for Entrepreneurship

by Nicholas Tart on June 15, 2009


1. “In every crisis, there is opportunity.”
Most entrepreneurial ventures arise from a solving a problem. If you are faced with a problem, craft a solution and sell that solution to others. As an interesting side note, it’s a common misconception that the word crisis and opportunity mean the same thing in the ancient Chinese language. This misconception initially gained momentum when John F. Kennedy incorrectly cited it in a speech in 1959. (source: smallbusiness411.org)

2. “If you want one year of prosperity, grow grain. If you want ten years of prosperity, grow trees. If you want one hundred years of prosperity, grow people.”
The goal of every entrepreneur should be to start a business and find capable people to run the business so that they don’t have to. 

3. “A fall into a ditch makes you wiser.”
When bad things happen, a good entrepreneur learns from them.

4. “Customers are jade; merchandise is grass.”
What good is a business without customers? You should value your customers more than any other aspect of your business.

5. “Defeat isn’t bitter if you don’t swallow it.”
You will encounter setbacks, but don’t let those setbacks defeat you.

6. “Don’t count your chickens before they are hatched.”
Though a good entrepreneur isn’t afraid to take risks, never rely too heavily on projections of profitability, success in a certain market, etc. A good entrepreneur always considers, and has a plan for, the worst-case scenario.

7. “Don’t stand by the water and long for fish; go home and weave a net.”
Instead of complaining about how you aren’t making much money, find new ways to earn it.

8. “Failing to plan is planning to fail.”
This one is so clear, it requires no explanation.

9. “If a thing’s worth doing, it’s worth doing well.”
If you’re going to put effort into starting a business, then make sure you put 100% effort into every aspect of your business.

10. “If you get up one more time than you fall you will make it through.”
When you get knocked down, get back up. If you don’t get back up, your business will fail.

11. “Make happy those who are near, and those who are far will come.”
If you make your customers happy, they will talk and those they talk to may become new customers.

12. “The diamond cannot be polished without friction, nor the man perfected without trials.”
You will encounter trials and tribulations as a business owner, but these trials and tribulations will mold you into a better entrepreneur.

13. “The loftiest towers rise from the ground.”
Even the most successful businesses in the world started with the conception and implementation of an idea.

14. “There are two perfectly good men, one dead, and the other unborn.”
No one is perfect. Always be open to learning from other people.

15. “A smile will gain you ten more years of life.”
What’s the point in owning a business if you’re not having fun with it? If your business doesn’t make you smile, then it’s the wrong business for you.

 

My Favorite Quote

One notable Chinese proverb I left out of this list happens to be my favorite quote, ever; and it is especially applicable to my entrepreneurial journey. I only left it out so I could highlight it at the end.

“Find a job you love and you’ll never work a day in your life.” – Confucius