Franchise Owners Speak Out — Experts Weigh In

Owning a franchise is a completely different experience than owning your own, independent business. For this segment of “Experts Weigh In,” we asked our franchise experts what they’ve learned about the franchise experience and what they would tell potential franchise owners. Here were our 14 favorite answers:

1.“As a franchisee with Brightway Insurance, I learned about the incredible support available to me within the Brightway system vs. the support I would have had if I struck out as an independent insurance agent on my own. From technology to telephony to business analytics to marketing, it’s like working at a large corporation with a terrific infrastructure but still being my own boss and responsible for building my own business. 

If someone is interested in getting involved in a franchise, I’d tell them to ask a lot of questions about the support available to them and the track record of the model. In most cases you should find something that has been thought out, tried, tested, and proven so all that is left is to leverage it.” -Billy Wagner, Brightway Insurance, Inc.

2.“I have owned and operated two franchises. One was a fantastic success and one was a miserable failure. 

Being a franchise owner twice, I have learned that more than anything, the most important thing in choosing a franchise is to understand the day-in-the-life of being an owner of that company. What you’re selling and the ROI matters little if you hate what you’re doing every day.” -Tom Scarda, Author of Franchise Savvy 

3.“Set a budget. You have to advertise to attract good franchise prospects. You should put together a marketing budget with two components to it. First you should budget something up front for a brochure, printed materials, a good website and other program pieces that are necessary to attract buyers. Then on a monthly timeframe, start out with a budget for lead generation activities. This can run anywhere from hundreds of dollars a month to a few thousand dollars a month. We don’t recommend that you go into franchising without some kind of a budget for marketing the business. 

Have a compelling story or selling proposition for your business concept. What makes you different from every other business out there in the license/franchise/business opportunity world? If you can’t say something to yourself in the mirror that makes you smile, you’re probably going to have a hard time getting other people to find it interesting. Develop this value proposition in the form of an elevator pitch and nail it down before you start talking to people. If there is one thing that I know about franchise buyer leads, it is that they have a short attention span….you must articulate it quickly or you will get hung up on. 

If you don’t like making a lot of sales calls and “working the phones”, you will need to budget for a sales person to do this for you. Franchising is a sales business, don’t let anyone fool you. It is a contact sport and it takes hundreds and hundreds of phone calls to land franchise partners. A good franchise sales person will make anywhere from 75-150 phone calls per day. In many instances, I have personally called a good prospect over 40 times just to get a meeting with them regarding the franchise opportunity. It is easy to monitor and 99 out of 100 times, the sales people who create the most activity are the ones who close deals. You have to burn up the phone lines to see the revenue come in. 

It’s okay to be persistent and to put yourself out there. Remember that you are probably one of several franchise opportunities that a buyer is considering at any given time. If you do not leave an impression on that buyer, they will very likely forget about you. Be aggressive and tell them what you are good at and how it will benefit them!” -Christopher Conner, Franchise Marketing Systems

4.“With owning a franchise through Global Garage Flooring(r) and Design, franchisees have the chance to be their own boss, the ability to succeed, be in business for themselves (not by themselves), have access to proven systems, and a direct network and association with other franchisees. When you get frustrated with business, focus on the positive, such as no longer having to deal with the tedious commute to work, the strict dress code, shady office politics, or constantly worrying about job stability. With seeking Franchisees, always look for individuals who are ready to succeed on their own terms.” -Lance Jensen, Global Garage Flooring and Design(r)

5.“The first piece of advice I would tell potential franchise owners is that just because you might know how to perform the work that the franchise provides, it doesn’t mean that you know how to run a business. I was surprised to find out just how much time and energy I needed in order to generate leads. Unless you have run a business before, I would highly 

suggest making sure you have extra money beyond the franchise purchase price in order to hire people like a business coach, bookkeeper, accountant, etc. in order to start the business off right. Royalties usually have to be paid whether you make money or not so your business needs to bring in revenue quickly.” -Linda Waterhouse, WSI Web Systems

6.“When I speak to remodelers and they learn that I lead a remodeling franchise, one of the first questions they often ask me is this: Why would anyone give up some of what they earn? Why pay royalties on all the work I am doing? It’s a good question. 

The answer is that being part of a well-run franchise system carries advantages that can help owners grow their businesses, improve earnings and profit margins — helping you earn far more than what you pay in royalties. 

But franchising is not a silver bullet. Before you pick one, you should carefully examine the business, and you should also carefully examine whether you are a good fit and will be willing and able to do what you’ll need to do for success.” –Doug Dwyer, DreamMaker Bath & Kitchen™  

7.“When I decided to start my own business, even with a broad business background, I had to determine if I had the skills required to put out a shingle and open my doors for business. It didn’t take me long to decide to join an established franchise brand rather than go it alone.  From the start, I realized that in a competitive market like Chicago, I had to establish a presence pretty quickly if I was to stand out in a crowd. So joining with an organization with an established brand made all kinds of sense. I could concentrate on my business instead of investing money to create my own identity. 

The promise of being your own boss is very alluring, but in reality, without the training and insights from experienced business people, it’s hard to hit the ground running. Getting one-on-one guidance is invaluable. Franchisors want you to succeed as much as you do, so you work as a team. When owners are accountable, they have a vested interest in your success. That positive reinforcement is invaluable when you stare down the tunnel ahead. 

I also recognized that I could get technical assistance to build a website, get advertising advice and use social media. Even the best company can’t make money if nobody knows you are in business. It takes some solid training and marketing support. 

Franchises are not for everybody. If you go into the franchise business solely to make money, you may be disappointed if it doesn’t meet your sales expectations. Talk to other franchisees and see if they like what they are doing. Remember you have to do this every day, so every day should be one that complements your abilities and desires.” -Richard Ueberfluss, Assisting Hands Home Care franchises

8.“A large number of franchises will never have a business value that exceeds what you paid for the franchise. Each franchise tends to have a star operation that they use for selling franchises. If you understand the business value of that star operation, you will find that it often is not as much as the franchise cost. 

Most franchises are limited on the upper end of their value because large business buyers will not subject themselves to a franchise agreement. If your franchise is successful, once it goes from main street size to merger/acquisition size, you become very difficult to sell and cannot get full value. You are too big for individual buyers to afford a FMV purchase and your natural corporate buyers are not willing. (Keep in mind that most franchise agreements have clauses in them such as: right of first refusal, buyer approval, large transfer fees to sell to a new buyer and all these can affect salability.) 

You should ask this question: Does the Franchisor make the bulk of their money selling franchises or do they make the bulk of their money from the royalties of successful franchisees? If the Franchisor does not make the money off the success of the franchisees, you are headed for real problems. 

No matter how successful you can be with a franchise, your success is affected by the success and reputation of your franchisor. If they suffer, you will suffer due to no fault of your own.” -Bill Watson, Advanced Business Group 

9.“Is the franchise right for you? Don’t just follow the money, follow your heart. Look to do something you love – or that you have an interest in first. Ask yourself, Is this what I want to be doing all day every day? There is no use being a dog washing franchise if you don’t like dogs, or a fast food franchise if hate cooking or preparing food. Love what you do and your customers will love you. The money is a bi-product of your passion for the business. If you are in it just for the money you are already in a bad space because as soon as the money is not there (and there could well be times that you’ll hit a lean patch) then you will become the franchisee from hell and cause both your business and that of your franchisors a lot of financial heartache as you focus on the negatives and not the positives. 

Franchising is for people who want to be in business for themselves, but not by themselves. While you have a proven system and platform behind you, the work is still there. It’s like launching any small business. Its hard in the early days. The franchise system just takes some of the bumps out of the road, but it’s still a long road. 

Research proves that a small business working under the umbrella of a franchise system has more chance of survival than a small business working on its own. Franchising works, no doubt about that. Just take your time to work out which of them will work best for YOU!”-Troy Hazard, Author of Future-Proofing Your Business

10.“Over the last year we have grown, hired people, made more money, and opened more home restoration franchise branches than ever before. We’ve found ways to increase our leads per advertising dollar, and most importantly we haven’t just saved people’s homes and businesses from destruction – we’ve saved their dreams!

Advice for potential franchise owners – Like all things in life, the more you put in, the more you get back out. If you are in the market for a single franchise and not just as an investment opportunity for multiple locations, then you should pick a business that is as inspiring to you as it is profitable. We are all in business to make a living, but the best living is one where you feel good about what you’ve done with your day when you reach the end of it.” -Idan Shpizear, 911 Restoration

11.“What have I learned as a franchiser? My company merged into a franchise and it was a great business decision. But at first I was skeptical of giving up my business especially since I put my sweat and tears into it. But I realized my ego is not my amigo and I made a great business decision (emotion aside).

What would I tell someone interested in getting involved in a franchise? Follow the systems. You are BUYING the systems, don’t try to recreate policies and procedures. Your franchiser has spent their time and effort perfecting them so they are scale-able, don’t mess with that by redoing them.” -Jaime Kulaga, PhD, Two Maids & A Mop

12.“What have I learned as a franchisee or franchiser?

Ed: Embrace technology, especially social media. Understand how your target consumer uses technology and develop strategies to take advantage of it. If don’t you are setting your business up for failure. 

Karim: Engaging your team’s/staff’s sense of purpose in addition to focusing on their development. People need to know leaders care about what’s important to them, before they’re willing to genuinely and consistently embrace the objectives of leadership. 

What would I tell someone interested in getting involved in a franchise? Do your research, into the type of franchise you are interested in and the area in which you intend to put it. A few things Karim wishes he had known: 

a) More about commercial real estate site selection and negotiation 
b) More about construction management and the entitlement process 
c) The value of Political and municipal relationships 
d) The value of connecting to movers and shakers in the communities I do 
business in.” – Karim Webb and Edward Barnett- co-owners, PCF Restaurant Management and Buffalo Wild Wings Grill & Bar franchisees

13.“Franchising is getting into business for yourself but not by yourself. This statement says it all. The franchise industry is one big family and if you find the right franchise you can be very successful. It is a team effort, so if you find yourself researching buying a franchise and you are thinking about what can I change? or I wouldn’t do it this way franchising is not for you. Find the franchise that is right for you and eat, sleep and breathe the brand and the system and you will be successful.” -Don Daszkowski, International Franchise Professionals Group 

14.“Our experience as franchisees has been invaluable. Over the past 4+ years we have learned all aspects of running a successful business, from sales to accounting to management. Our advice to someone getting involved in a new franchise is to embrace the chaos. Enjoy that every day is different holding new opportunities or possibilities. Remember to stay motivated and work hard to achieve success; you get out what you put in!” -Erik Bouvin and Eric Rauterkus, BlueGrace San Diego Central