The Educated Franchisee Insider Newsletter

The Educated Franchisee
The How-To Book for Choosing a Winning FranchiseMarch 2011
Author ImageGreetings!

Last week a lady considering franchise ownership asked an interesting question.  'What makes a great franchise and how will I know it when I see one?'


Wow, what a question.  That is the type of question that doctoral thesis are written on.  One hundred pages later, the thesis still has not properly answered the question.


At the risk of over simplification, I shared the following -


The natural starting place is with the following questions.  'Why join a franchise?'  'What is the value of a franchise?'  The simple answer is risk reduction.  A franchise system must reduce your business risk.  How the franchisor does this is a detail.  The fact that it is done in a reliable, predictable fashion is critical.  When you purchase a franchise you buy the right to use 'the system'.  The system you join must systematically reduce your business risk.


Second, a great franchise is always growing and evolving.  A great franchisor proactively works to foster an interactive, franchisee community that not only manages risk today; it seeks to improve the opportunity tomorrow.  A great franchisor has franchisees that are 'raving fans'.  They enjoy helping each other genuinely feel good about their relationship with the franchisor.


Finally, a great franchise system supports it's franchisee from cradle to grave.  Every franchisor has training and support.  Not every franchisor will help you when you chose to sell your franchise and exit the system.  Great franchise systems also support you as you exit.  It is part of the natural life cycle. 


Obviously there are other items that could be mentioned but if a franchisor gets these three items right, you have a pretty good start.


Hope you have a great March.


Apple Image
Rick Bisio
Apple ImageFranchising's Movers and Shakers Feeling Optimistic.

Allow me to channel Ronald Reagan for a moment: It's "morning in America." Now. Today. We're finally seeing evidence of that.

According to the 2011 Franchise Business Economic Outlook, nearly everything is heading in the right direction:
  • Franchising is creating jobs, 194,000 of them to be precise. Slightly more than 7.8 million Americans will be directly employed by the franchise industry, up 2.5 percent from last year. Only the business services industry is expected to see a slight decline in employment.
  • The number of franchise establishments is also expected to grow by 2.5 percent to a total of 784,802, a jump of 19,079 new franchises. Business service franchises are the only category expected to lose units this year.
  • The big growth looks like it will come from "economic output" (essentially, revenues) which is projected to grow 4.7 percent to $739.9 billion. Setting the pace in economic output will be auto sales, commercial and residential services, and personal services.
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Apple ImageFranchisees Learn From Each Other.  


Franchisers across the country are trying to get their franchisees to tap into a valuable resource: each other.

Owning a franchise brings challenges that other businesses don't face-but it also comes with a support network other entrepreneurs don't have. Franchisees can lean on peers who sell the same goods and services, deal with the same cost structure, customer base and vendors, and face the same rivals. It's a chance to learn which strategies work and avoid costly mistakes.


For franchisers, building links between owners is a chance to strengthen their brands and foster a "we're all family" attitude. So, companies of all sizes are urging their franchisees to help each other out. They're holding conference calls and conventions, setting up mentoring programs and sending in veteran owners to help newcomers or struggling outlets.

Go to the Wall Street Journal, Click Here
Apple Image Is Your Business Franchise Worthy?  

"We decided to pursue the franchise model because it was an excellent way for us to expand the brand and company faster, without a significant capital investment," said Landau.


While a concept like blowouts may lend itself to franchising, not every business is franchise worthy. "Entrepreneurs need to determine whether or not they have something that can be duplicated and easily taught to people," advised Harold Kestenbaum, attorney and co-author of "So You Want to Franchise Your Business."


"You have to have a good product or service, a high reputation, broad geographic appeal, growth potential and you have to be well capitalized to develop the system," added Jim Amos, chairman and CEO of Tasti D-Lite and author of "The Complete Idiot's Guide to Franchising." 

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Apple ImageSix Lessons From Subway's Success  

Everybody knows Subway is a successful franchise chain. But did you know last year it cracked 33,000 units and should shortly hit 34,000? The fresh-sandwich chain passed McDonald's to take the top fast-food franchise crown -- the Golden Arches have just 32,000 restaurants. This may seem like a big-business story at first, but Subway and McDonald's have made their brand one locally owned franchisee at a time. The chains are essentially huge conglomerations of mom-and-pop restaurants.

The tale of how Subway overtook the longstanding leader in their sector has many lessons for small business owners everywhere. Here are some of the factors that let Subway move ahead:

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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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Author - Rick Bisio