Becoming a Company's First Non-Corporate Franchise Owner
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 firstname.lastname@example.org.
Jeffrey Schwartz decided to become a franchisee at the perfect moment: soon after he signed his franchise contract, his employer laid him off. Schwartz had wanted to escape the corporate world for a while, and uBreakiFix presented itself to him at just the right time. He became the first franchisee for the smartphone repair franchise almost two years ago. Here's what he has learned.
Franchisee: Jeffrey Schwartz
Franchise owned: uBreakiFix, in Geneva and Wheaton, Ill.
How long have you owned a franchise?
I have owned my first franchised location since October of 2013. I was the first franchise owner from outside of the company. uBreakiFix had a few more than 50 stores when I opened my first. Now, there are more than 128 locations across the U.S. and Canada.
I chose to franchise because I had never actually owned or managed a business. I was smart enough to know I could not do it all on my own if I wanted to succeed. I have seen many small business owners put their life savings along with their heart and soul into a new business, just for it to fail.
Failure was not an option for me, and I knew I did not want to go back into the corporate world. It was tough enough to open a storefront and get customers to share through word of mouth, let alone worry about all of the behind the scenes tasks. Because you are investing your hard-earned money and your precious time, every task needs to be done to the fullest extent. If not, you will just waste your resources. Franchising made sense to me because the model helps you with the necessary, foundational responsibilities that can be daunting and risky if done on your own.
When I started looking at franchises, there were so many categories to choose from and it was extremely overwhelming. uBreakiFix was unique as they were just beginning to franchise. In addition, what really impressed me was that they were truly customer-focused and very professional. After some serious research and talking to some of the other store managers, I continued to like what I saw. I decided to take the plunge and sign on with uBreakiFix. After 22 months, I can say it was the best decision I've ever made!
What were you doing before you became a franchise owner?
I worked in the corporate world as a Technical Account Manager in the data storage industry. I watched this company continue to lay off its employees to the tune of 30,000 worldwide at one time.
In big business, the sad reality is that when top officers make wrong decisions, workers become collateral damage. Sadder yet—those leaders get to keep their jobs. This made no sense to me. They made millions in bonuses when they had no idea how to successfully run and grow the company. Many publicly owned companies do this, and I had enough.
I decided that I wouldn’t be caught one day awakening to the scary thought that my next step was unknown. I had the means to take a shot at franchising with uBreakiFix, and it was the best decision I ever made. Ironically, I actually was laid off by my former employer just after I signed the franchising agreement.
Why did you choose this particular franchise?
I knew what I wanted to do, but the upfront money was not attainable. I had been looking to venture out on my own for more than 10 years, but I could never find the right fit. Then one day a child in our neighborhood broke my son’s new smartphone. I performed some research and found a place in Naperville called uBreakiFix. Because I worked from my house at the time, I brought my work with me and waited for the phone to be repaired. While working in the lobby I watched people go in and out, and I could see they each had a great customer experience.
Most franchise opportunities are food related, and I wasn’t interested in going that direction. I am mechanically inclined and had plenty of customer service experience on both retail and corporate levels. That is when I knew uBreakiFix was for me and started to do some serious research. I found that uBreakiFix was different. Yes, it aligned with my skills and experience, but more so, it was clear that leadership wanted to equip me well. They didn’t do this through a list of rules and regulations, rather, I had hands-on training at the headquarters. This caliber of care and instruction set me up for success.
How much would you estimate you spent before you were officially open for business?
I estimate approximately $93,000
- Franchise and training fee: $50,000
- Travel for my store manager and myself to spend two weeks in Orlando for training: $2,000
- Build out with permits, furnishings including tools, etc.: $25,000
- Inventory: $10,000
- One month lease deposit: $2,600
- Attorney fees: $2,000
- Manager pay to perform buildout: $1,800
Where did you get most of your advice/do most of your research?
I used the internet and any other publications I deemed helpful. I also spoke to local business owners, some who ran franchises and some who did not. I sought out a neighbor who is a successful business consultant. He helped me run through numbers using a model he created. The numbers seemed to pan out, and I had a gut feeling a uBreakiFix franchise was going to work, so I went for it.
What were the most unexpected challenges of opening your franchise?
I’d say the one thing that stands out are the taxes the state takes. I had finally taken the bank account out of the red, and just when I thought I was starting to do well, sales tax and unemployment taxes wiped me clean and back into the red. To this day, the amount of taxes I pay as a business owner are some of my biggest hurdles. I would advise anyone who is interested in becoming a business owner to factor in taxes when considering cost. While having my own business is worth the cost, it is something important to plan around to truly set yourself up for financial success.
What advice do you have for individuals who want to own their own franchise?
Do your homework. Talk to the other franchise owners and find a business consultant to help you run financial models. If the salesperson for the franchise pressures you to move quickly, run away as quickly as you can. Everything was very easy for me. I NEVER felt any pressure.
What’s next for you and your business?
I have just opened up my second store in Wheaton, Ill., in partnership with my previous store manager from my Geneva, Ill., location. We plan on opening at least two more locations in the near future!
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.