Table of Contents
The Wealthy Franchisee

So You Decided to Become a Franchisee. Here's What Happens Next. The author of "The Wealthy Franchisee" gives an uncensored account of the highs and lows experienced during those initial days of doing business.

By Scott Greenberg Edited by Dan Bova

Key Takeaways

  • Like any business, franchisees need to expect the unexpected each and every day.
  • Building a team you can trust when you're not there is critical to your financial and emotional stability.

Opinions expressed by Entrepreneur contributors are their own.

This is part 5 / 6 of The Wealthy Franchisee: Section 1: Getting Wealthy Through Franchising series.

Two days after I made the decision to become an Edible Arrangement franchisee, the papers arrived via FedEx. I read through every page, pretending to understand what I was agreeing to. Every signature further committed me. And boy, there were a lot of signatures. There was a franchise agreement, a loan agreement, a lease, a construction contract, and, of course, an endless supply of checks to write. All this before I could make a single sale.

Selecting my location was especially scary. Los Angeles is filled with overpriced strip malls and glamorous retail spaces that make turning a profit seem incomprehensible. Can that Chipotle really be selling enough burritos to pay that much rent? Everyone kept telling me a good location would yield higher sales. But at these rates, I'd have to sell a boatload of fruit to keep rent at the standard benchmark of 10 percent of revenue. That's the reality of doing business in a high-end territory. In the highest-profile markets, some of the big brands actually run retail outlets at a loss just to keep a presence there. This practice jacks up rents into the stratosphere.

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After weeks of scouring the streets in my territory, I saw a "For Lease" sign go up in a closed Cingular Wireless store on the first floor of an office building on Beverly Boulevard. An hour later, as I waited outside for a walkthrough, I contemplated the pros and cons. There was tons of vehicular traffic, but not a lot of foot traffic. There was great street exposure, but limited parking. There was a lot of square footage, but the layout was awkward. It was available, but it wasn't ideal.

In the end, corporate approved the location and I made an offer. The longer I negotiated, the more invested in the location I felt. I wanted the search to be over. My eagerness didn't serve me well—I probably could have gotten some better terms and additional free rent—but ultimately I got a lease, and that felt good.

The buildout was hell. I brought out a contractor from Boston who'd built many Edible Arrangements stores but was new to Los Angeles. We needed inspections and permits for plumbing, electrical, building and safety, and health. Multiple times one inspector would contradict the directives laid out by the previous inspector. Subcontractors wouldn't show up. The IT company had DSL-related issues I couldn't solve with the phone company. I'd already found employees who were eager to start work, but continuous construction delays pushed back our opening farther and farther, so half the people I'd hired moved on to other jobs. My contractor made promises and then made excuses. When the Edible Arrangements field trainer flew in from Connecticut for our grand opening, he arrived at a store that was weeks away from being ready.

Meanwhile, my sparkling new delivery van parked safely in the building's garage was hit by a car during the night. It had yet to make one delivery and it already had a dent in the side, right below our logo. After many extra weeks and thousands of extra dollars, we finally completed construction. The health inspector signed off and the lights came on. We were open! The phone started to ring. Curious passersby (see, there was some foot traffic!) came in for samples and took brochures. Some even placed orders. I had income!

The reality of being a business owner

On day two, three employees didn't show up. The only one who bothered to call in said the job just wasn't for her. Later that day I bought the remaining staff pizza and pretended I knew what I was doing. Thank heavens for the corporate trainer. The scariest time was the next week after the trainer had left. We were on our own, stumbling our way through taking, making, and delivering orders. I panicked every time the phone rang, wondering if I'd be able to answer questions and input the order into our sophisticated point-of-sale system.

My father came to visit during this week and invited me to lunch. It was the first time I had left the store during business hours, and my investment was now in the hands of my 19-year-old employees. We had sandwiches at a diner just across the street. I sat facing the front window and kept looking over my dad's shoulder to make sure the store wasn't on fire. It reminded me of the first time we left our son with a babysitter. But I knew I would have to get used to this feeling—I had to leave soon for some out-of-town speeches.

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Each day we got better. We made our mistakes, figured stuff out, and learned what we were doing. Soon we had answers to most of the questions customers asked us. More employees left and new ones came. Before too long, we settled into a routine. Orders continued to roll in. During the first month, I paid every bill on time. Two months in, the bills were paid again, and sales were up over the first month. I'd done it. I'd built a growing business. And it was exhilarating.

Reflection: Questions to Ask Yourself

  • When do you feel in over your head?
  • How do you respond when things don't go as planned?
  • Can you set aside enough money to manage unexpected expenses?
  • How prepared are you to trust others to run your business?

Enjoying the Ride

My best customers were my in-laws. They ordered fruit baskets for every possible occasion. I told my employees to give them discounts and eventually to refuse payment from them altogether. That's when they stopped ordering—they wanted to support me, not mooch off me. Friends ordered, too; some wanted to support me, while many others wanted to get discounts. It's amazing how many dinner parties you get invited to when you own a fruit arrangement business. That's OK. It felt great to be a big-shot business owner, what my grandmother would have called in Yiddish, a "big macher." A speaking colleague came in to meet me for lunch. I was wearing a long-sleeve Edible Arrangements polo and matching baseball cap, and she said, "Oh, you look so cute in your uniform!" She was just condescending enough to embarrass me.

Every day was a new experience. We turned new customers into repeat customers. We signed up corporate accounts. We made many arrangements to be used as props in TV shows. I personally delivered five arrangements backstage to The Price Is Right to be used in the "Showcase Showdown." We played a role in countless dinner parties, thank-yous, and marriage proposals. We joined the Chamber of Commerce and our local chapter of Business Network International. We ranked second out of almost 100 Edible Arrangements locations in California. Then we got to number one. We also won the "Best Customer Service" award out of 1,000 Edible Arrangements franchises worldwide. I wasn't in it for recognition, but I admit it felt great.

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I would leave town to speak. When I got back, there was more money in the checking account than when I'd left. That was awesome. The highs were high, but the lows were low. We had problems. Twice there were break-ins during the night. Several times our delivery drivers got into fender benders. Our insurance company settled with a lady who "fell" in our lobby. A home delivery grocer contracted with us to provide them with fruit salads and then stopped paying us. I took them to small claims court but lost because my manager had accidentally disposed of the pickup receipts, leaving me with insufficient proof of delivery.

For a while, managing employees was particularly tough. I'm not one of those people who complains about "kids these days" or how entitled Millennials are. Every generation has all-stars and flakes. But it seemed like we always had issues with staff. My phone would ring at all hours with questions, problems, and requests. Employees would show up late or stop showing up altogether. Some would work, but not as fast as we needed them to. One male employee offered a female coworker a heart-shaped piece of pineapple from an arrangement, and she complained it was a sexual advance. I fired our first delivery driver for racking up $150 worth of personal calls on the company cell phone. I let another employee go for calling ahead when running late and asking coworkers to punch in for her. Twice I gave second chances to employees who succumbed to drug addiction, and both relapsed. I put a lot into figuring out how to build a great team, and over time my staff went from being my greatest headache to my greatest asset. By the time I sold the business, most of them had been with me for years. Leaving them was the hardest part of my exit.

Reflection: Questions to Ask Yourself

  • How do you see your role in the community?
  • What accomplishments are you chasing?
  • How will you react when problems arise?
  • How prepared are you to manage employee issues?

Exit Strategy

Getting into Edible Arrangements had been a great choice, but after ten years, I'd had enough. My speaking business was doing really well. Thanks to my firsthand franchising experience, I started booking a lot of keynotes for other franchise systems. Splitting my time wasn't good for either business. It had been a good ride, but it was time to get out. But exiting wasn't easy.

First, I had to find a way to put the word out without alarming my employees. I hated being secretive, but I needed the operation to remain stable. Then I had to find interested buyers. It helps when the business is turning a profit, but buyers and sellers don't typically see things eye to eye. I took lunches, kicked numbers around, and tried not to feel insulted by the lowballers. At one point I had five different interested parties. Then it was four, then three. By the time I sat down with the only buyer left, I was much more eager to get out than I could let on. The negotiation dragged on for a few months. Both of us moved at a deliberately slow pace, each trying to keep the other interested while making him sweat. Don't get me wrong—our conversations stayed pleasant and respectful. But we were only human. Finally, we reached an agreement. Papers were signed, hands were shaken, and tears were shed. My ten-year odyssey as a franchisee was a wild, stressful, and character-building journey. And now it was over. I had built, operated, and sold a successful franchise operation and lived to tell the tale. Last week a friend of mine had surgery. I ordered an Edible Arrangement for her from her local store and paid full price.

Reflection: Questions to Ask Yourself

  • What's your exit plan?
  • Do you know what your business is actually worth?
  • Can you be patient enough to make a good deal?
  • How will it feel to leave?

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