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Franchise Players: I'm Both a Franchisee and Franchisor A look at how Mike Lohman spearheaded an effort for Go Mini's dealers to purchase the company.

By Kate Taylor

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Franchise Players is Entrepreneur's Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email ktaylor@entrepreneur.com.

When Mike Lohman joined Go Mini's in 2002, it was as a dealer at the self-storage franchise. However, since 2012, he's been a franchisee – and a franchisor. Lohman spearheaded an effort to have Go Mini's dealers purchase the company from its original owners, making the transition from a dealership model to a franchise model. Business under the franchise system has thrived, even as Lohman has had to juggle the roles of franchisee and franchisor. Here's what he's learned in both positions.

Name: Mike Lohman

Franchise owned (location):

Go Mini's of Ventura County, Calif.

Go Mini's of Santa Barbara County, Calif.

Go Mini's of Northern Los Angeles County, Calif.

How long have you owned a franchise?

The first location I purchased was Ventura County/ Santa Barbara County, Calif., in 2006 and then added Northern Los Angeles County, Calif., in 2007.

Related: Franchise Player: From Cyclist to House-Flipper to Franchisee

Why franchising?

Go Mini's was originally organized in 2002 as a dealership licensing organization. I bought my first dealership location in 2006 and the rest the following year. But it wasn't until 2012 that I decided to initiate a plan for the dealers all across the Go Mini's network to organize and purchase the company from its original founders with the ultimate goal of converting our dealership agreements into franchise agreements.

Today, the Go Mini's franchise system is made up of a majority of Go Mini's dealers who decided to take control over their own destiny by making the conversion and commitment to build the best portable moving & storage business in the industry.

Although I wear two different hats as the franchisee and franchisor, my local operations have increased dramatically over the last two-years due to the combined efforts of the newly created franchise system.

After operating as an independent dealer for the 6 years prior to franchising, I can tell you that without a doubt, the franchising model works much better.

As for the question of "why franchising," the best answer I can give here is that the system is already built. People have already figured out the economics of building a profitable business. As a franchisee there is no need to design a logo, build a website, figure out PPC or spend unnecessary resources on advertising.

Being a part of a larger organization that provides training, support and mass purchasing power can alleviate a major expense in the day-to-day business operations as well as provide a profitable exit strategy.

What were you doing before you became a franchise owner?

Prior to getting involved with Go Mini's, I spent most of my early days building a career in the grocery industry. I exited the business shortly after the United Food & Workers Union decided to call a strike against the top three grocer companies in Southern California. This was my ticket to get aggressive and find another industry that I could grow and be passionate about working in everyday.

Why did you choose this particular franchise?

Honestly, I chose Go Mini's because it was NOT a franchised company when I first started. I thought that was the right decision for me at the time, you didn't have to pay royalties fees! Ironically it would be a matter of time before I would eventually want to be part of a franchise system. I learned quickly that, in life you get what you pay for, and I saw an opportunity to enhance Go Mini's.

As for why I choose this particular franchise, I've always been interested in self-storage, so when this new concept of portable moving & storage came about, I knew immediately this was the industry I could definitely feel passionate about growing.

This is a business that doesn't require many employees to manage and allows you to be flexible and work from home. Although, I still spend many hours working the business, I still love it after so many years.

The best part about this particular franchise is that Go Mini's is the only national portable moving & storage company that has not required expensive delivery systems or industrial warehouses to store your assets and is now owned and operated by the franchisees.

It's exciting to know that the owners of the company you've invested your life savings in "get it" when it comes to operating a portable storage & moving company.

How much would you estimate you spent before you were officially open for business?

Because the business concept was fairly new when I started, the dealership license agreement was significantly different than what is available today.

While it might cost more to get up and running now than it did eight years ago, the franchising system that one would be signing on for today makes a significant impact in cost savings & ROI for the business at start up.

Below is a breakdown of cost I spent prior to opening for business as a dealer in 2006.

2006 Dealership Fee (non-franchise): $28,000

2006 Containers: $130,000

2006 Truck: $68,000 (leased)

2006 Marketing: $5,000

2006 Reserves: $20,000

Related: Franchise Players: How This Popcorn Franchisee Gets Business Popping

Where did you get most of your advice/do most of your research?

Preparing a securities offering memorandum, developing the initial franchise disclosure documents, and converting the dealers to join the new franchising organization has been my biggest challenge as far as seeking advice. And, although it was a difficult task, I've stayed diligent throughout the process in assembling the right team of people. It's turned out to be an incredibly successful endeavor and therefore has been my greatest reward.

In sum, I've surrounded myself with individuals that are knowledgeable in their fields of interest. Combining that with regular participation in networking events, as well as attending trade shows and International Franchise Association conventions, I feel as though I have sought out the best advice possible and conducted the necessary research. However, I am a perpetual student of business and always find myself eager to keep learning from reading, talking to others and attending industry events.

What were the most unexpected challenges of opening your franchise?

When I first started, we had very "limited" resources in training and ongoing support. In addition to that, the portable self-storage & moving industry was still in its infancy.

The biggest challenges I had starting out was building the Go Mini's brand as well as having to educate the public on the concept of portable self-storage. I spent an enormous amount of money on unnecessary advertising, marketing, warehouses, forklifts and websites trying to figure out how best to educate the public on our brand and how to operate with the most profit.

Although I was able to accumulate well over 100 containers in my first year of operations, I found it extremely challenging to operate without the assistance of a legitimate franchise system.

What advice do you have for individuals who want to own their own franchise?

First and foremost, choose a system with which you can be passionate and enthusiastic. Second, make sure you experience the culture and see if it's a good fit for you. If you plan on being an absentee operator, you might want to consider your options carefully. And, lastly, make sure you read the entire FDD (Franchise Disclosure Document) and understand the relationship you will have with the franchisor.

Keep in mind, whatever business you decide to invest in as a franchisee, you will spend an enormous amount of time in it. You must love what you do and do what you love in order to be successful.

What's next for you and your business?

I am extremely excited about our next level of growth for Go Mini's. As Chairman of Go Mini's Franchising, LLC, I have laid out our 2014 plan to increase our franchise base through divestures, conversions, and new sales in all of North America. We are also looking at opportunities overseas.

In addition to increasing our franchisee base, we also working on a plan to roll out an interstate program in the near future. We will have the capacity to move storage containers from state to state.

Our collective goal is to operate as a world-class franchisor by bringing exponential value to franchisees through relevant marketing, quality equipment, and support that translates into increased profits and expansion.

Related: Franchise Players: Serving Up Sweet Tea at a Southern Franchise With a 'Radical Fan Base'

Kate Taylor

Reporter

Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor. 

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