Gregorio is both a happy and an unhappy franchisee.
He's not indecisive--he just has two franchises in the same
Evansville, Indiana, mall, providing two very different
experiences. One glaring dissimilarity: communication. Calls to his
coffee franchise president and marketing director are returned
promptly, while the franchisor of his custom embroidery hat
business rarely, if ever, returns his calls. Since Gregorio only
spoke to one hat franchisee before buying, he made sure not to
repeat that mistake when researching the coffee franchise. "I
asked the franchisees, 'Do you get the support that they
claim?'"
Seid: Find out if the field staff visits you and what they do
when they visit. What's the field-staff turnover rate, and can
they make decisions? Also, does the franchisor set up a regional
meeting of franchisees in the area? If they do, you've got a
great franchise.
The hat franchise offered a week-long training course that
taught Gregorio how to run the machines and computer, but not how
to restock and order. Before buying the coffee franchise, he worked
at a store for one day, then had additional classroom training;
after buying, he and a store manager received two weeks of training
and were offered an additional week. "You and your managers
must be comfortable learning how to run your store," says
Gregorio.
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Seid: Length of training does matter. But for some
franchises, quite frankly, three days is too long. It depends how
complex the franchise is. It's not so much a matter of time;
it's a matter of the curriculum. How much classroom time are
you getting? Do you have role playing? How do you train your staff
later? And do they have tools for you to do that?
When Gregorio became involved with the hat franchise, it was a
relatively new operation. Based on his experience with them vs. his
experience with the coffee franchise, which has been franchising
since the 1980s, he definitely recommends choosing an established
franchise. "When you buy into a new franchise, you're
paying for a name nobody's ever heard. They've still got
kinks to work out."
Seid: [Newer operations] don't have the same resources or
experience. Gregorio's not wrong, but that [new] franchisor is
probably going to work harder than the older guy does because of
those issues.
The Big Picture
If you take one thing away from all these experiences, let it be
this: There are great franchisors and, inevitably, bad ones. Zarco
recommends having an experienced franchise counselor review the
franchise agreement and the UFOC, and getting "a complete and
precise understanding of the respective rights and obligations of
the parties." While too many prospective franchisees don't
bother with legal counsel, Zarco estimates 70 percent of his
clients could have avoided lawsuits had they sought counsel from
the beginning. "Don't be pennywise and
dollar-foolish," says Zarco. Apply that adage to the time and
money you invest before buying a franchise, and happy days are sure
to come.
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