Hi, My Name is Mr. Pybb, and I’m Addicted to Brands

Have you ever bought the generic, store brand cola? You know the kind with the clever, all-too-close but not quite the same names such as Dr. Cola or 7-Right.

I have – once. We were a little tight on money that week and I figured that it couldn’t taste all that bad. For nearly half the price, the taste wasn’t as important that week as the money. When I got it home, it wasn’t that bad. It was actually pretty good. Sure, it tasted “different” than what I was used to, but if I drank it regularly it would bring the same amount of pleasure and cavities as the big guns in the industry.

The rub is I didn’t add it to my diet on a regular basis. Why, you ask? Simply put, it was embarrassing for me to buy the store brand. I hated standing in the check-out line with that in my cart. Every fiber of my middle-class upbringing was screaming that I had somehow failed at life and was one step away from the streets.

That, my friend, is the power of brand marketing. Years of advertising have inundated my psyche with the idea that only two brands of cola exist – and I must choose between only those two. I’m not proud of it, but that’s being an American.

And that, in a nutshell, is why you want to buy a franchise rather than start fresh. I, like most Americans, will go with the familiar rather than take a chance on something new. I’ll choose a chain restaurant rather than a smaller joint simply because my brain perceives it as being somehow “better.” It may be the furthest thing from the truth, but that’s just how my brain operates.

If you still aren’t convinced to stick with the brands, let me put it another way: Do you really want to be the Diet Dr. Cola of your industry?

I thought not.

Franchise "Creature Feature" Writer

Location of Shattered Dreams

The little chicken wing joint near my house (see here) had a U-Haul backed up to the door this weekend. It was a terribly gloomy day; overcast with not a lick of sunshine to be seen. Sullenly, they loaded up the truck with their tables, chairs and appliances. A woman was very carefully folding table cloths and placing them mournfully into boxes. The whole scene really wrenched my heart.

Every time I see a small business go out, especially after only a few months, I can’t help but think of the people whose dream it was to own their own business – and how that dream is being shattered. I imagine that it’s a couple who have worked diligently at back-breaking jobs, and for years plotted and planned the business that would be their savior from the daily grind. They waited until they had just enough money and jumped at the cheapest location they could afford so that they could jump-start that dream a little sooner. I can imagine it so clearly because I know I would be the same way.

What I really wish, is that I could hop back in time and give them a tip about starting a business – location, location, location. It’s a cliché, but obviously one that needs to be trotted out again and again. The primary reason this new venture failed is because they wanted to open a lunchtime restaurant far away from the business district. For such a place to succeed, it needs to be nestled near dozens of businesses so that hundreds of hungry workers can get in and out of it during their arbitrarily set lunch hours.

If the couple starting the business had explored the idea of a franchise rather than going it alone, they might have done a bit better with regard to location. One of the selling points for many franchises is that the franchisor – the company selling you the brand – will assist you in choosing a location. At first, this may seem like too much control on their part, but it’s really in your best self-interest.

Choosing a location can be far more difficult than you might first think. There’s more to analyzing traffic patterns then sitting in front of a location and counting the numbers of cars that pass by. You’ll want to know the quality of that traffic and the demographics. What you’re hoping to discern is if that traffic will actually stop and become patrons. This requires a degree of research that is beyond most people. The franchisor will have the resources to do it properly and you’ll welcome them in the long run.

I just wish that the little wing place had tried signing on with a franchise or at least done some simple research on the location they chose. Perhaps then their dreams wouldn’t be folded neatly into a cardboard box and stored away for the rest of their lives.

Franchise "Creature Feature" Writer

UFOC Negotiation

Humans are born negotiators. It’s natural. After all, before paper money the only way to acquire goods and services was to barter. Even in present day, it is possible to negotiate prices for things as small as a bushel of tomatoes at your local farmer’s market to the more significant haggle process of purchasing a new car. Why, just yesterday I negotiated the security deposit for my new apartment.

We try to alter situations so that we can feel as if we are getting the best possible deal. Saving money makes us feel good. And the bigger the purchase, the bigger the haggle, the better we feel.

So it is only natural that many potential franchisees would attempt to negotiate the UFOC for the particular franchise they are interested in purchasing. Why not? You have a lawyer (hopefully) and that is what lawyers do, alter contracts. But in a case such as this it is necessary to turn off your primal instincts and continue reading.

There are several states which require franchisors to register their franchise agreements with them. And if the UFOC on file varies at all from the one you are trying to sign chances are the state won’t allow it and the franchisor won’t jeopardize their relationship with the state just to satisfy you.

In some cases, the fact that a franchisor is willing to budge at all with their agreement terms might be a sign of a failing franchise, one that is desperate for money. And the last place you want your investment is in a franchise standing on shaky ground.

Of course there are exceptions to every rule. Younger franchises might be more willing to negotiate. And with any franchise, site location should be primarily up to the franchisee. If it isn’t that is one clause that should be altered.

Will your business be your primary source of income?

I love people who throw out statistics in a conversation. You know, the type of person that can miraculously spout off the percentage of how many Yaks migrate from the African Serengeti to Iceland each year. If challenged on the validity of said statistic, they invariably say that they read it in a magazine.

Since I’m not one of those people, I won’t bore you with some vague memory of an outdated statistic on the failure rate of new businesses. Instead, I’ll talk from personal experience.

During college I worked at this great little video store that had very few customers. This made it very easy to study and/or write papers. Very seldom would I be interrupted to do any actual work. Great for me, but I’m sure you’re wondering how the place stayed in business without customers.

The owners did not rely on the store as their primary source of income. In fact, they kept their jobs for the first five years the business was open. It took that long for the store to build up a reliable customer base and start becoming profitable. Even then, only one of the owners could quit her job to run the business full-time.

This was a business they started from the ground up, so obviously buying the brand associated with a franchise will have a better start. However, careful consideration should be made as to whether your new business will be your primary source of income or not.

It can take several years for a new business to start reliably turning a profit. Will you be able to survive that time financially with just what the business brings in? What are your financial goals for your business? Would it make sense for your spouse to keep his/her job until the business can support your entire family?

There are many benefits to keeping one steady earner in your household. Health insurance for a small business can be cost prohibitive. You might be able to have a better, cheaper plan through your spouse’s job. A steady paycheck can make it easier to plan your household budget rather than the erratic nature of your small business.

Before taking the plunge on a new franchise, be certain that the franchise you are buying will be consistent with your goals of being a small business owner. Be ready to endure the painful teething years all new businesses require to become an eventual success!

Franchise "Creature Feature" Writer

Who Sets the Hours?

When I was growing up, I would hear with clockwork regularity my Dad complain about the local lawnmower parts store. It wasn’t that they were under-stocked on the parts he needed. His biggest issue with the store was its hours; it was open Monday through Friday, nine to five.

As my Dad loved to argue, people don’t mow their lawns during banker’s hours. They tend to perform that chore in the evenings or on weekends. For a store that deals in lawnmower parts to be closed during those prime hours, when people would be most likely to need their services, was ludicrous in his opinion. The store eventually went out of business, although not soon enough for my Dad, and a chain hardware store opened in its place where he now obtains the parts he needs for his mower.

I was relating this story to my wife right after I noticed the brand new Wing Joint that had opened near our house was closed on Sunday. Apparently, the new restaurant was only open for lunch during the week, and dinner on Saturday. I used past tense in the previous sentence because the place had already gone under after little more than a month. It’s not located in the business district, but rather near dozens of residential communities; which means they chose their hours poorly. To be successful in that location, they needed to cater to the suburbanites which encircled them and be open for dinner and weekend lunches.

One of the primary reasons employees cite for wanting to be their own boss is the ability to set their own hours. But, does the small business owner really set his or her own hours, or does the business set it for them?

Before you start your first small business or purchase a franchise, you need to carefully consider the hours your business will be running you – because it will, especially if you will be the person staffing it. If your budget doesn’t allow you to hire enough employees to run your business, then you’ll be the owner/operator. If you want to be successful, you’ll have to work your schedule around the business’s needs, not those of your private or family life.

If your primary concern about becoming your own boss is to spend more time with the kids, then be sure the business you are starting will allow you to do that and still run smoothly. It’s the first thing you should consider when deciding which business to own.

By the way, if there are any bankers reading this blog, I suggest you reconsider the whole notion of Banker’s Hours, at least for your tellers. Like the lawn mower store, I’m more available to do banking at nights and on weekends and am typically met with a locked door. There’s no pressure, I’m just throwing that out there.

Franchise "Creature Feature" Writer

Franchise Trade Shows

The hard part is over. You’ve assessed your finances, determined what industry you are interested in, and now you’re ready to narrow it down to the chosen one. The best way to examine your options is to attend a trade show.

First things first -- more research. If possible, obtain a list of participating franchises and narrow them down to the ones in your interest and price range. Then do a little investigating. Google the franchisors and see what you can find. Start a list of any possible questions or comments you might have. A good short list would be the initial investment required, a typical day in the franchise, and product supply information.

The day of the show it is important to keep a few things in mind. The franchises that are at the trade show only make up a very small percentage of those that are available for you. It is also essential to remember that you are selling yourself to these companies as well. You want to be taken seriously as a prospect so wear a suit and bring extra business cards.

Be sure to collect any handouts supplied by the franchises that interest you the most. Leave your contact information and get theirs. After the show organize any materials and set up meetings with representatives from those you feel most serious about.

Franchise trade shows are a great way for shoppers to examine the market and get a lot of information up front. And the best part of trade shows? They happen often and in most major cities.

-- Lady McFranchise

Franchise Basics

So you’ve decided to buy a franchise – congratulations! Now on to the daunting task of deciding which one is right for you.

The first step in the franchise purchasing process is to assess your equity. How much are you worth? It is a hard question to ask yourself, but it needs to be done in order for you to find out where you fall in terms of franchise options. Write down your investment resources: liquid, equity in a home or boat that can be borrowed against, savings, piggy banks, etc. Maybe you have an uncle or cousin who struck it big and promised to help you out if you ever wanted to start your own business. If so, call them. You will use all of the above to invest.

Now that you know where you stand financially you need to figure out what type of franchise you are interested in. Answer some basic questions about yourself such as what types of businesses excite you? What types of products can you see yourself being surrounded by on a daily basis for the next ten years (at least)? What types of businesses is your community lacking? Are you looking for a niche franchise or one with more broad appeal? Will you continue to work during the first year or so of your franchise? List all of your business related strengths and weaknesses.

Once you have completed the personal and financial assessment you will have a better idea of where you stand in the franchise world.

Now it is time to do your research. Start by investigating various industries that spark an interest then narrow them down to the few that will have major growth potential within your community. Contact those companies directly for franchising information. But don’t stop there. Search the internet for any news articles pertaining to those franchises and the particular industry you are getting involved in.

It is also helpful to find out specific franchise related law within your state and to search the Federal Trade Commission’s website as well (www.ftc.gov).

-- Franchise "Info Creature"

What is a Franchise?

Before any meaningful discussion of franchises can begin, it’s important to first define “franchise.” A franchise is a business or set of business practices, usually associated to a brand name, which is sold to an individual to operate in a geographic territory.

The main advantage for the buyer (the franchisee) is brand recognition. From the outset of their business venture they know customers will be familiar with the product. The franchisee will not have to spend considerable advertising and marketing dollars to promote and familiarize consumers with the name of the business.

The extent to which the franchisor will assist the franchisee in operating and/or promoting the business depends on the type of franchise that is purchased, and the stipulations of the franchise agreement.

Essentially there are two types of franchises sold. The first is referred to as a “product and trade-name franchise.” These are businesses established to sell a particular brand name product. A car dealership is the most common variety. When the franchise owner purchases the rights to sell the product, he/she is not purchasing any operational procedures. This gives the franchisee the freedom to run the business as he/she deems best. The franchise owner can choose everything from the design of the building to the style of operation.

The second type is a “business format franchise” which entails the sale of not only the brand, but operating procedures, management support, training and facility design. First time business owners are attracted to the business format franchise precisely because it takes so much guessing and experimentation out of the mix. The owner can be confident that he/she is purchasing a proven business model that has a greater possibility of succeeding.

Franchise "Creature Feature" Writer

Welcome to Franchise Monster

Hate your boss? Hate your hours? Are you driven by that unmistakable feeling that if you ran things at your company then it would be more profitable and efficient? Then perhaps it's time to take charge of your own destiny and become the boss!

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