Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
Franchising: Is It for You?
A franchised business is not right for everyone, and not everyone is right to be a franchisee. Why? Let me share two stories that I believe will help you determine the difference. The first story is about a guy named Joe Committed. (OK, that's not his real name.) Joe purchased a franchise that provides remodeling services.
A franchised business is not right for everyone, and not everyone is right to be a franchisee. Why? Let me share two stories that I believe will help you
determine the difference.
The first story is about a guy named Joe Committed. (OK, that's not his real name.) Joe purchased a franchise that provides remodeling services. Before awarding Joe the franchise, his franchisor identified Joe as a high-integrity individual with the desire to take his business to a new level of success and to focus on a niche versus being everything to everyone. The franchisor made sure Joe had the financial ability to set the business up for success. Joe agreed to follow the proven system, was willing to get out of his comfort zone to grow personally and professionally, and promised to attend their ongoing training programs to master the systems and skills needed for the next level of success.
After two years, Joe doubled his salary, maxed out his 401(k) benefits and recouped his initial investments out of company profits. Joe was better than average, but he still had not implemented all the systems and programs. With such strong results, he still had room for even greater success.
Franchising is not about perfection. It is about focusing on the right things that produce the desired tangible results. It must be mutually beneficial or it is not worth it for either party.
The second story is about "Stan Status Quo." Stan was awarded a franchise under similar terms with a couple of differences. Stan was a little tight on his investment capital and didn't seem to be as motivated to take his business to the next level. He resisted following the system, did not often venture out of his comfort zone and only occasionally attended ongoing training needed for success. Needless to say, franchising did not work for Stan, nor did he become a good franchisee.
Joe and Stan had the same brand, system, coaching and training available. One excelled, the other failed. The benefit of a good franchise company is you typically can produce greater results in a shorter period of time and have a better exit strategy for retirement. The two main reasons we see someone invest in a franchise is they say, "There has got to be a better way," or they feel they already have a great business but want to open a new division and don't have the time to reinvent the wheel. The question for anyone considering a franchise is, are you willing to make an investment and commitment as Joe did or would you resist following someone else's system and coaching as Stan did?
Whether you expand by reinventing your own business, by opening a new division on your own or by leveraging a proven franchise system, you must work smart to produce great results. The best of the best in any field, from sports to business, hire consultants and coaching and invest in systems to go to the next level. On a scale of 1 to 10, 10 representing peak performance, it is harder to go from a 9 to a 9.5 than it is from a 4 to a 6.
My recommendation is based on more than 20 years of experience in the franchise business. Don't do it unless you are 100 percent committed. To learn more, go to the International Franchise Association Web site, and type in a search for "ABCs of Franchising."
Companies like Paul David Restoration and Four Season Sunrooms are exceeding $200 million in annual revenues, along with kitchen, bath, handyman, siding and basement franchises. We live in a brand-name driven society. Think about the clothes you buy and the store you buy them from. Or the tools you buy and where you buy them. It is almost always a national brand product sold in a national brand store. As a friend once said with me, "We didn't invent it, but we better take it into consideration in our strategic planning."
|Doug Dwyer is president and chief stewarding officer of DreamMaker Bath & Kitchen by Worldwide, one of the nation's largest remodeling franchises. He can be reached at email@example.com.|