Walk a mile in a franchisee's shoes, and you'll find
that it could be a walk in the park--or over crushed glass. We
figured the best way to know exactly what the franchisee experience
is like is to hear it straight from the source. So we asked seven
franchisees, ranging from happy to disgruntled, to anonymously
share their unadulterated thoughts, opinions and advice.
And just in case you're not convinced by the franchisees, we
also got two experts to speak out: Michael Seid, founder of
franchise advisory firm MSA Worldwide and co-author of Franchising
for Dummies, and Robert Zarco, founding senior partner of Zarco
Einhorn & Salkowski P.A. in Miami, a law firm that represents
unhappy franchisees and has been involved with over 350 franchise
systems worldwide. (Seid's and Zarco's advice appears in
italics; all franchisees names, which are in bold, have been
changed.)
Happy Days!
One aspect that David liked about the moving-service
franchise he purchased in Alpharetta, Georgia, was its size:
"If it's not a big franchise, it's easier to feel
you're not just a number in the system, and the market's
not saturated."
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Seid: Smaller franchisors can't afford to let the first
couple of franchisees fail, so they tend to get very personalized
and over-serviced. That's good and bad--more good for the
franchisee. A [smaller] franchisor may be struggling with
critical-mass issues and be unable to [offer] TV advertising or
proper brand advertising, so it really depends.
In his first year, David set the national record for first-year
revenue--largely due to the time he invested. "I worked my
tail off that first year or two--seven days a week, 12 hours a
day," recalls David. As a new franchisee, don't expect
easy hours.
Seid: We say in the Dummies book that if your family does not
buy in, you're going to fail. The pressure of not seeing the
family during the early days is deadly. We strongly recommend
people self-assess before buying.
Phillip is a particularly happy inkjet and laser-toner
cartridge recycling franchisee in Santa Rosa, California, because
his franchise "gives [him] an opportunity to give back to the
community and planet." Before buying, Phillip had to know that
the franchisor's key employees were committed to these ideals.
While researching a franchise, he says, you should ask who's on
the board of directors, running the day-to-day operations and
providing support.
Seid: You have to look at whether management is
entrepreneurial enough to stay ahead of the curve, especially when
dealing with a technology-related product.
Sometimes a franchisor allows franchisees to purchase supplies
only from approved vendors. The franchisor then receives a
percentage of those sales. Phillip's franchise doesn't
require this; instead, it suggests several vendors and even
negotiates discounted prices. "The only way the franchisor
makes money is if we make money," reasons Phillip. "Find
out if there's an approved vendor list, and how expansive it
is. Ask the franchisor, 'Is this a discount?' and, 'Do
you negotiate?'" Franchisors do have to let you know if
they restrict you to approved vendors--it's in Item 8 of the
Uniform Franchise Offering Circular.
Seid: If I, as the franchisee, am buying something for $1 and
the franchisor can buy it for 50 cents and sell it to me for 75
cents, I'm thrilled--as long as they're not losing the
ability to get me the lowest price by having fewer vendors.
A former entrepreneur, Sean is now a happy ramp-rental
and sales franchisee in North Olmsted, Ohio, but he warns others
not to equate being a franchisee with entrepreneurship: "A
true entrepreneur wants to build from the ground up, but the
franchise has already been built by the franchisor. You have to
work within their system, even though you do, in a sense, run your
own business."
Seid: Franchisees are not entrepreneurs. They're
entrepreneurlites at best. An entrepreneur wants to chart his own
course. Franchisees have to follow a set of rules, and they cannot
violate a franchisor's brand. If you have to have things your
way or think the franchisor's product needs to be improved or
changed, you should start your own business.
While Sean's franchise was marketed as homebased, the
franchisor made the logistical considerations clear, and Sean ended
up renting storage space for the ramps. Make sure you find out
exactly what a homebased franchise entails.
Seid: Ask, "Are there any zoning requirements? Do I need
a van? What kinds of deliveries are coming in? Are customers coming
to my house?"
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