The Educated Franchisee Insider Newsletter
The Educated Franchisee
The How-To Book for Choosing a Winning FranchiseSeptember 2010
Author ImageGreetings!

Recently I received an email from an international reader whom we will call 'Bob'.  Bob shared with me the fact that he is very upset with his franchisor.  In Bob's email he stated that the franchisors 'system is no good', 'the franchisees are unhappy' and 'the franchisor does not like him'.  As a result, Bob halted operation of the business after 6 months.  Now the franchisor is terminating the contract.  Bob's question - "Any ideas regarding how to fix the situation so I can get my money and time investment back?"

Wow, sad situation. Honestly, I don't think there is much I can do for Bob - and I told him that. 

On the other hand, it begs the question - How did Bob end up in this situation?  Let's look at the facts. First, 'the system is no good' - this is the #1 most important thing to evaluate BEFORE buying a franchise - the system must work or you should not by the franchise.  Second, 'the franchisees are not doing well' - this is why we call franchisees BEFORE joining a franchise system.  If the franchisees are not doing well, then you should not join the franchise.  Next, 'the franchisor does not like him' - If it was truly oil and water, this could have been discovered at discovery day and Bob should have declined to join the franchise system.   Finally, he closed after 6 months.  Most businesses take time to mature.  Six months tells us very little about the potential of any business.

The bad news is that there is nothing we can do for Bob.  The good news is that Bob's mistakes can be avoided.  As Abigail Adams said - "Learning is not attained by chance; it must be sought for with ardor and diligence."  Due diligence is not a cure-all but with 'ardor and diligence, you can absolutely stack the odds in your favor.

This week I was fortunate to reconnect with four former clients, all of whom are building successful franchised businesses.  What a wonderful feeling it is to hear Lynn say - "Rick, I could not be happier".  Or Sam say - "I am so busy I have not had time to slow down and catch my breath."  It just goes to prove that the future is what you make it.  Take the time to make good decisions and then stick by your decision.  Trust yourself and you will be your own biggest fan.

Enjoy this month's articles

Apple Image
Rick Bisio
Apple ImageHow to Land a Client on a Tight Budget.


It's a common conundrum for business owners when sales aren't pouring in.

To get more customers, you need to market and advertise. But when cash is sparse, it's tough to allocate dollars toward promotional efforts, especially when there's no guarantee of a return.

Amid the economic downturn, nearly half of business owners say they're straining to find efficient or innovative ways to market their products or services, according to a March survey of 734 entrepreneurs by American Express OPEN, the company's small-business division.

To minimize the potential drain on the budget, some business owners are trying creative or highly targeted means of reaching potential clients
Apple ImageSmall Business Owners Convert to Franchising.
 
CHICAGO (Reuters) - If you can't beat 'em join 'em. So said Corey Butcher, a health club entrepreneur who progressively purchased four gyms before deciding he needed some national muscle to stay healthy in the competitive Dallas market. Last year, Butcher brought all of his clubs under the umbrella of Gold's Gym, a national franchise with some 520 U.S. locations.

"The problem was you're fighting against the dollars of LA Fitness, 24 Hour Fitness and Bally's," said Butcher, 38, who prides himself on turning around underperforming clubs. "We needed some synergy in the corporation. Really the only way of doing that I felt was with a franchise."

Go to Reuters.com, Click Here
Apple ImageBack to School - Time for Entrepreneurs to 'Get Educated'
 
With the start of the new school year, many small business owners are about to become students.

Some are brand-new entrepreneurs who want to learn the basics, such as how to use accounting software. Others are veterans who want to learn new skills so they can expand their business.

Owners who want to learn have a wide variety of options. Traditional options like colleges and universities offer courses, but so do trade organizations and chambers of commerce. Some government agencies also have courses.
Apple ImageMost Popular Way to Fund Your New Business
 
Bank lending to small businesses is still in the dumpster, and venture capital investment remains way down. But even if times were flush, some entrepreneurs would rather get funding elsewhere. Business owners like Erica Duignan Minnihan and Susan Reiner wouldn't take out a bank loan if President Obama delivered it on a silver platter. They've turned to a capital source often better suited to slow-growing times: friends and family.

According to a University of Michigan study of entrepreneurs, the lion's share of initial start-up capital comes from individual savings, friends and family. Though numbers don't track it, under-the-radar financing may be gaining in this economic climate, according to William Dunkelberg, chief economist for the National Federation of Independent Business. Even among banks that want to fund start-ups, he says, "no one is exactly knocking down their door." If Mom, Dad and the neighbors are a more popular option, it's not because they're a soft touch; it's because they're less likely to demand terms that constrain the way the business develops.

Go to Wall Street Journal, Click Here
The Book
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There is a reality in life.  Greater knowledge drives better decisions and better decisions reduce business risk.  Franchising is all about risk reduction but not all franchises are low risk.  The Educated Franchisee is designed to empower you.  By following the advice and guidance presented in this book you will recognize high quality franchises and confidently pass over those that are not.

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Thanks for your interest in business ownership.  If there is anything we can do to improve this newsletter or any articles that you think would be valuable to our membership, please let us know.  Some of our best ideas come from our members.
 
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Author - Rick Bisio,  rbisio@educatedfranchisee.com