Franchise Information Blog

In five years: 97 % success rate or 62% Failure rate which is better?

My clients come to me for help and guidance.  Many of my clients have been downsized.  Several of them have been downsized several times.  That is what happens in “Corporate America”. I generally ask them, if it happens all over America, what are you going to do to prevent it from happening again?  How are you going to change?  What are you going to change?  Or as Albert Einstein said, “Insanity: doing the same thing over and over again and expecting different results.”

If you need to regain control over your life, as well as your finances and retirement, Franchising is an almost fool proof method.  You can research BEFORE you buy, asking as many questions to the Franchisor and franchisees that you want to. 

Why a Franchise:

 ·        Business you own and control

·        Business you can sell at a substantial profit

·        PROVEN business model

·        Many others have gone before you and can offer you help and support

·        Experience

·        Marketing

·        Training   When you buy a franchise, you minimize risks.  According to The United States Chamber of Commerce 86% of franchises opened within the last five years were still under the same ownership and 97% of them were still open for business, while 62% of non-franchised businesses closed within the first 6 years of their existence due to failure, bankruptcy 

Which figure do you like better? 

In five years: 

97 % success rate  

OR

62% Failure rate  

Let us at Fran Mart Connection help you become a success and have a 97% rate of achievement!  If you would like more information about better returns on your investments there are two great websites: www.masterfranchisingandareadeveloperopportunity.com     and    www.franmartconnection.com

Buy Into a System

 When Joe Grimand first opened a Precision Tune Auto Care franchise 25 years ago in Oklahoma City, he didn’t know whether the new venture would be successful.

He was a highflier but not as an experienced business owner or executive. He had just left the U.S. Air Force, where he was a combat pilot in Vietnam, among other assignments.

But Mr. Grimand was committed to his new business and worked long hours. His efforts paid off. He now runs eight Precision centers in Arkansas and Oklahoma, each generating $600,000 or more in annual sales.

“Looking back, I never thought it would grow to what it is now,” says Mr. Grimand.

Franchising can be a fulfilling and financially rewarding career for some. Franchises generate approximately $1 trillion in annual sales in the U.S. per year, according to the International Franchise Association (IFA), the industry’s primary trade group, based in Washington, D.C.

More than 320,000 U.S. small businesses are operated as franchises, in 75 different industries, employing approximately 8 million people. One of every 12 retail business establishments is a franchised business, and sales from franchisees account for 40% of all U.S. retail sales, the IFA reports.

Franchisees, who operate their businesses according to the original parent company’s established system and format, reportedly have a higher rate of success than owners who start from scratch. But franchises aren’t for everyone who dreams about leaving the corporate fold. The similarities between owning a franchise and owning an independent business are limited.

Katherine Fein of Fran Mart Connection, a consultant to potential franchisees based in Atlanta Georgia, notes the two main similarities: “You have to have the entrepreneurial spirit to quit your job. And you get a check only after you make money.”

However, she notes, “franchising is about being in a system, and, once you are in a system, you cannot change it.” For this reason, creative and independent types may chafe as franchisees.

Buying into a System

But not all of us wake up in the morning with a great idea and know how to make it into a business. Franchises know they need people who have motivation and a dream. Franchisees have time, talent, skills energy and desire. But they don’t want to spend years building an idea.

Some entrepreneurial personalities may bristle at rules about the hours franchisees must stay open, the color of paint they use in their units, or even the appearance of their delivery trucks. If you want to put a giant plastic bug on top of the truck as an advertising symbol, and the people at the franchise don’t agree to it, you have to deal with it. You can’t just go out and do it. The franchiser cannot be responsible for your success.  “They are there to support you, not do the work for you,” said Katherine Fein of Fran Mart Connection.

Do You Fit the Profile?

The typical prospect she advises is an experienced corporate manager or executive, age 35 to 65, who wants to escape the drudgery of working for someone else.  Most prospects want to spend about $150,000, with many financing the purchase through home-equity loans, says Katherine Fein of Fran Mart Connection.

Franchise coaches help their clients examine their interests, goals and personality types. Once clients define their business and career goals, coaches brief them about the franchise business.

Matchmaking

Franchise consultants can help prospective franchisees to sift through the thousands of opportunities available and to see whether they are a good fit. “We help them articulate what it is that they want to do,” says Katherine Fein. “We help them determine what their goals are, and use that to identify what franchises are a good fit for them. Our ultimate goal is to find a perfect match.

“Katherine Fein stresses the importance of researching a franchise thoroughly before making an investment. “You really have to do your ‘due diligence’ with a potential franchiser,” she says. “It’s like being a part of a football team in the end. The franchiser is like the team owner or coach, and you have to stay within the rules of the game, or go find another game to play.”These franchise coaches don’t charge would-be franchisees a fee. Rather, the franchise company the prospect signs with pays the consultants. “We’re like real-estate agents,” says Katherine Fein. “Our service is free to the candidate.”

By J.G. KOPROWSKI

Master Franchise

Some call it Master Franchising.  Others use the terms Multi-Unit, or Area Developer.  What ever term you use, it makes money.  Big money ………… quickly! 

You do not need a college degree, nor years of experience. 

What is Multi – Unit Master Franchising? 

It means you operate several locations at one time.  It is popular in several industries like food industry or hair care.  You must be good at managing people.  You, basically, manage the managers.  You hire managers who work at the locations and run them.  These managers are responsible for the day-to-day operations of the locations.   

Advantages of Multi – Unit Master Franchising 

You do not have all your eggs in one basket.  You grow at a much quicker rate, because of more locations.  Your cash flow is increased because you have more locations.  Your overhead costs are minimized because of economy of scale.Labor costs are reduced because the units can share employees.  You also save money in distribution costs, warehousing, and advertising. Most important is to determine if you have a managerial sprit.  Can you mange people well? Do you want to make big money quickly?   If so, this is a concept you should seriously consider.

Buy What You Want OR What You Could Afford?

The lazy days of summer can be a great time to contemplate.  When you are on vacation, think, “Did I go here because it was WHERE I really wanted to go, or because it was where I could afford to go?”  “Am I driving the car I love, or the one with the monthly payments that were in my budget?”   Sometimes, when you’re on vacation, people tend to re-evaluate their careers and futures. 

           For many workers, buying a business can seem like an unattainable goal, but franchising makes it easier than ever to make this dream a reality. Currently, franchising is in over 75 different industries, and generates an economic output of $1.53 trillion dollars!  

           There was a study by FranData who recently found that all industries, (with the exception of travel), are experiencing an increase in the number of franchise concepts ranging from four percent in personnel services to 67 percent in retail food. New concepts are being added with increasing frequency. Over the past three years, almost 900 concepts began franchising.

With thousands of possible businesses to choose from, how do you pick one? How do you know if the business you choose is a good investment?  How do you know if the concept is the right fit for you and your market? Essentially, where do you start?            

  Katherine Fein works with would-be entrepreneurs in the Atlanta Georgia area to help them find the franchise that meets their needs, goals and personality. Katherine has identified some of the hot franchising trends and concepts to help local entrepreneurs in their search for the perfect business.