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Business View Magazine
16 Business View – October
Francising
says a project manager is assigned to every franchise
owner that comes on board.
“We have had a lot of success since we implemented
this training model, and fran¬chisees are experiencing
a much faster return on their investment,” Yount said.
Many franchisees appreciate the “plug and play” nature of
franchising – franchisors provide the technology platforms
and materials operators need to handle tasks like invoicing,
scheduling, marketing, and customer service.
Another huge advantage to franchising is the franchisee
community. In franchise businesses with a strong and
active franchisee community, franchise owners reap
the benefits of learning from each other’s mistakes and
successes.
Because low-cost franchise opportunities have so
many positives, the sector attracts a lot of different
franchise companies. This can be a con for franchisees.
“For businesses that have a lower barrier of entry, it
doesn’t take long for local competitors to crop up,” said
WIN’s Wadlington.
“A low-cost franchise may not have as much brand
recognition in the community because often times,
they are not storefront locations,” added CruiseOne’s
Fiorino. “Everybody knows 7-11 and Dunkin Donuts
because they have physical locations everywhere.”
Franchisees may need to work extra hard to
differentiate their businesses from others like them
in their communities—often without a lot of local
marketing support from the national office.
“The drawback of a low-cost franchise is it limits the
amount of bells and whistles the franchisor can give to
each franchisee,” said Heaven’s Best Carpet Cleaning
CEO Howard.
It’s important for anyone considering a lower-cost
franchise opportunity to be realistic about what they’re
going to get out of it and what they need to put into it
to be successful.
“Just because it’s low cost doesn’t necessarily mean
you are going to earn profits sooner—you may earn no
profits,” said Paul Davis’s King.
“Franchise candidates need to look at the total cost of
entry, the real cash required to get in, and how much
they need to finance. They need to ask, ‘What is this
business model and how much capital is it going to take
to keep it operating?’”
Many owners of low-cost franchises are able to run
their businesses from their homes, work their own
hours, and keep their full-time jobs, which can be both
good and bad when it comes to the long-term success
of the business.
“The cons of a low-cost franchise can be that some
candidates forget they are truly starting their own
business, not just acquiring a job,” said Money Mailer’s
Mulloy. “Theymust see this as a long-termcommitment
with a need to work hard in the start-up period of the
franchise business to establish a solid financial base.”
With increased flexibility, sometimes comes
reduced revenue potential. Not all low-cost franchise
opportunities provide a full-time salary (especially
those concepts that don’t require a full-time time
commitment). Some are intended to be supplemental
income businesses—although some of the most
successful franchisees have made it their livelihood.
This isn’t necessarily a con if what you’re looking for
is supplemental income, but prospective franchisees
should make sure they have realistic financial
expectations.
Franchising is not for everyone. You need the skills
to run a successful business and the willingness to
follow a tried-and-true franchise system. Because they
are so often owner-operators with fewer resources,
franchisees at the lower investment level must be able
to multi-task and wear a lot of hats, at least initially, until
their new franchise business is well-established.
“We find that our owner-operator model is best
suited to people who have very strong inter-personal
skills—people who enjoy working with others of all
backgrounds and economic levels,” said Money Mailer’s
Mulloy.
“We can train anyone to run our system properly,
but it is a lot more difficult to teach them how to be
honest and to run their business with integrity if it has
not been their life-long pattern,” added Howard of
Heaven’s Best Carpet Cleaning.
Some franchise brands, like U.S. Lawns and Paul
Davis Emergency Services, use a personality profiling
tool to help identify which franchise candidates might
make a good franchisee or, once they are franchisees,
