A few things in franchising need to change.

I’ve offered my suggestions before.

I’ll continue to do so.

You’ll benefit from them.

So will the franchise industry.

Bold Letters

In bold letters-right on the top of one franchise website:

“Avg. Annual Revenue of Franchisees Open 3 Years = $231,497”

Looks good-I’d love to make $230,000 a year. Wouldn’t you?

Of course, I have no idea if I’m even a good fit for a franchise that specializes in making homes that are for sale look nice. But, who cares if I don’t have an eye for interior design? Look how much darn money I’ll make!

The middle portion of their website has some nice graphics including awards they have won, and a couple of videos. Giddy franchisees are also pictured.

Then, in microscopic font-on the bottom of their website:

“The ‘Avg. Annual Revenue of Franchisees Open 3 Years’ is the average annual revenue for the year ended December 31, 2012 for franchisees in continuous full-time operations for 3 full years as of December 31, 2012. There were 25 franchisees in operation for 3 years as of December 31, 2012 who operated in 39 territories. The average annual revenue is based on information received from 15 of those franchisees who operate in 25 territories because the remaining 10 franchisees were not in continuous full-time operations during the entire 3 year period. Of the 15 franchisees, 7 franchisees (41%) met or exceeded the average annual revenue. There is no assurance you’ll do as well.” 

Go ahead. Read it over. I’ll wait.

The Next Franchise

Chem-Dry, a carpet cleaning franchise, displays the following Item 19 information on their website:

$250,297- Average annual revenue per franchisee

$111,184- Average annual revenue per franchise

$20,858-   Average monthly revenue per franchisee

That information is also bolded and it’s front and center on the “How Much Money Can I Make” section of their website.

Underneath that section-in normal font:

“We surveyed all of our franchisees (1,082 franchise owners operating 2,039 franchises) and received responses from 211 franchise owners who operate 475 franchises.

 Average annual revenue per franchise owner: $250,297 (70 of 211 franchise owners, or 33 percent, exceeded this average)

 Average monthly revenue per franchise owner: $20,858 (70 of 211 franchise owners, or 33%, exceeded this average)

Average annual revenue per franchise: $111,184 (66 of 211 franchises, or 31%, exceeded this average)

For more information, see Item 19 of our Franchise Disclosure Document. Your results are likely to differ from the results described above and, for a number of reasons, these results should not be considered as the actual or probable results that your Chem-Dry business will realize.”

Once again, read their earnings claims over again if you’d like.

Go ahead: Read the Item 19 earnings claims from those two franchisors…their financial performance representations-again and again. Over and over until your eyes hurt…over and over again until the electrical activity going on in your brain reaches its peak.

Not that it matters.

It Doesn’t Matter

I don’t care if a franchisor provides earnings information.

And, you shouldn’t either.

You need to ignore the earnings claims and revenue figures that are being displayed online by more and more franchisors.

You don’t need to know how much you’ll make as a franchise owner.

Well, not yet.

That’s because owning a franchise can’t be just about the money.

Let me rephrase that; it shouldn’t be just about the money.

I’ll show you why.
 
 
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Making Big Money

It’s fine if you want to become a franchise owner-and make big money.

Joe Stokar, one of my early mentors, once told me that “profit isn’t a dirty word.”

Do you agree?

And if you’re willing to risk some of your own money in order to be your own boss, I’m assuming that you’re not looking at your new venture as a non-profit opportunity.

But, if you’re only doing it for the money, your potential 12-15 hour days are going to get real old real fast.

Really Joel?

Really.

Clicking Around

Let’s say that you’ve started searching online for a few franchise business opportunities to explore. You start clicking around, and end up locating 5 opportunities that seem interesting.

You read through a few pages on each the franchise websites, and like what you see. Three out of the 5 franchises that you’re interested in even display their franchisees average revenues-in bold font.

Average revenues- $345,230

Average revenues- $228,900

Average revenues- $550,125

Out of the three, which franchise opportunity will interest you the most?

That’s the problem.

The franchise marketing departments that are engaged in advertising those earnings claims-right on their franchise websites-are taking your brain hostage. They are trying to force you to buy their franchises their way. Their way is based on the average revenue-from a sampling of their franchisees.

But, that’s not how to buy a franchise.

You need to do it your way.

You need to take control of the process…in your head-and when you’re interacting with the franchise salesperson.

That’s because choosing one franchise concept over another one-just because you can “make more money” is going to end up biting you right in the…

You’re Not Really Making More Money

Don’t confuse revenue with profit.

They’re not the same.

Revenue is the amount of money that’s brought in by your franchises business activities.

Profit is the money that your business makes after accounting for its expenses.

Your expenses are going to different from every other franchisee in the system.

That’s because costs for things like real estate, taxes, equipment are going to be different in different parts of the country. In addition, your small business loan rate is going to be different-and that makes your expenses different that the other franchisees who may or may not have a loan to repay.

One more thing; you’re seeing “average” revenue figures. Some franchisees are killing it while others, aren’t.

So, when someone tells me that they’ve read that franchisees of the concept they’re interested in make $240,000 a year on average, they’re not. Some of them are bringing in average revenues of $240,000 a year. Not average profits.

Now that you know the difference, let’s get back to you wanting to make more money.

Of course you want to make more money. Most people do.

Miserable Money

If you had the opportunity to make a lot of money in a particular franchise, but you’d have to work 14 hours a day-7 days a week, would you do it?

I know what you’re going to say.

“Joel, I’m sure that I wouldn’t have to work those hours forever.”

Or…

“I’d be willing to work really long hours for a couple of years, as long as I’d be able to hire a manger to help out eventually.”

Or…

“If that’s what it would take to earn a lot of money, I’m all for it!”

Until you actually have to do it.

It’s kind of like going out and buying a car that you know you probably can’t afford, but doing it anyway.

You tell yourself that you deserve it, and that you’ll be able to afford it.

That’s until you receive your 1^st of many (figure 60 months’ worth) bills for your $550 monthly payment.

The point is that reality is going to quickly set in with a franchise that you’ll be working 14 hour days in. You could end up living a miserable existence. What if you’re never home? What if (because of the franchise you chose) you end up seeing even less of your family than you did when you were in corporate America travelling all over the country for your job.

And once you’re in-you’re in. You’ve signed a legal document that says so.

And, it can be hell to get out of.

Item 19

Franchisors are permitted to disclose franchisee revenues/earnings in Item #19 of their Franchise Disclosure Document. (FDD)

Almost half of all franchisors registered in the US do so now.

But, it doesn’t matter.

And remember, even if they do choose to disclose franchisee earnings, or revenues, they’re only averages. And, you’re a person-not an item on a spreadsheet. You’re not an average. You’re a living, breathing human being that just wants a fair shot at being a successful franchise owner.

Do you feel me?

And of course you never think that you’ll be on the bottom part of that average earnings/revenue scale.

Now, I know that it’s important for you to know how much you’ll make as a franchise owner.

But, there are better ways to find out how much you’ll make. You shouldn’t rely on what’s being advertised on a website or brochure. I’m not suggesting that the information shown on a franchise website or even in the FDD is fraudulent… not at all.  I just want you to verify them with 10-15 franchisees that are in the system you’re looking at.

Just ask the questions that are contained in my eBook-the one focused on franchise research.

And, please don’t listen to some of the more paranoid people in the franchise industry. They’re wrong.

A Discussion

A couple of weeks ago, I participated in a sometimes heated discussion on LinkedIn.

Are we connected yet? Let’s!

Eric Bell asked this question:

“What is the best piece of advice you would give to someone considering becoming a franchisee?”

Here are some of the answers…

Jim Coen, Franchise Channel Business Development Consultant  

“One of the most compelling reasons to invest in a franchise is because franchising offers a “proven business model”, if it’s a brand new concept is without an FPR (earnings claim), how can a prospective franchisee made a valid business decision? Blue sky? Drink the Kool-Aid? “

Dan Durney, Chief E-FRAN-gelist at FranMaster

“Just because a franchisor has an Item 19 doesn’t “guarantee” success any more than the lack thereof warrants a “STAY AWAY” for fear of failure approach. The opportunity to earn a living and get a reasonable ROI – in ANY business – is “elusive” when you are LAZY or don’t follow the franchise system.”

Eric Meyer, VP, Franchise Development/Real Estate, American Driveline Systems

“Sometimes, people buy things they feel good about. They are not duped into it, they just feel right. I believe that most franchise development people want quality people in their system and are not trying to slam deals all the time. They have an obligation to the prospect to offer the most current, accurate information available at the time. With or without an Item 19 it truly does not matter. What matters is the person feels they are passionate about the concept, they can be successful, and their desire to do it. Also, the prospect needs to ask current franchisees what their experience has been. If they say great things, the person buys regardless of an item 19. If they say bad things the person most likely will not buy, regardless of the item 19.”

And, then Jim Coen and I had a little back and forth…

Jim Coen

“To say a FPR-an earnings claim doesn’t matter just doesn’t make sense to me, Joel.

Joel, you are on the buyer’s side and you are not making a broker’s fee for referring that client, correct? Then why would you stick out your neck for a franchise system that doesn’t provide a FPR when the buyer you are working for needs to earn a $100K a year. Your role is to help them find a franchise that has a reasonable chance of providing that income or ROI. If they don’t care how much money they make, they just want to fill their time, then you are right a FPR doesn’t really matter.”

Me

“Jim, respectfully-and you know I like you, I really don’t care if a franchisor provides earning information in their FDD or not. That’s because I’m focused on making sure that the people that choose to work with me (and, you’re right; I don’t receive any commissions from franchisors. I am not a broker…haven’t been for years) have the facts they need to make an intelligent decision of whether or not to buy the franchise that they’re focused on.

Earnings, shmernings. I want them to get to the heart of the matter, and they’re only going to be able to do that if they get their noses out of the FDD and start calling existing franchisees. That’s where the rubber hits the road. I want them to have human interaction. I want them to get a feel for things. The data is important.

But, if the franchisor that they’re interested in is showing (in their FDD) that average unit sales are $1.3 million in year two, but my client doesn’t want to be working 16 hour days…he didn’t think that he would have to until further investigation, well, that darn earnings claim really doesn’t matter much.

The whole picture needs to be pretty, Jim. Not just the data.”

Finally, this from Eric Meyer

“Sometimes, people buy things they feel good about. They are not duped into it, they just feel right. I believe that most franchise development people want quality people in their system and are not trying to slam deals all the time. They have an obligation to the prospect to offer the most current, accurate information available at the time. With or without an Item 19 it truly does not matter. What matters is the person feels they are passionate about the concept, they can be successful, and their desire to do it. Also, the prospect needs to ask current franchisees what their experience has been. If they say great things, the person buys regardless of an item 19. If they say bad things the person most likely will not buy, regardless of the item 19.”

As you can see, an industry debate on whether or not earnings claims are important or not-and should or shouldn’t be part of a franchisors sales/marketing process, rages on.

I vote on keeping the debate going…and front and center.

I don’t want to see earnings and revenue claims advertised. Doing so forces would-be franchise owners to only base their decisions on the numbers.

What Do You Think?

What do you think about franchisors disclosing their earnings claims as a marketing ploy on their websites and in their brochures? Should they be doing it?

Do you think that it would be possible to get sucked into an “opportunity” based on earnings claims and revenue claims alone?

What else needs to be changed in the world of franchising?

Comments are now open.

The day that you travel to franchise headquarters – for a visit, is a big one.

It’s when the rubber will meet the road.

It’s when you’ll experience a sense of excitement and at the same time, a sense of doom.

Are you ready to grab your luggage?

Read on.

Franchise Discovery Day

You feel that your search for the right franchise is over.

You’ve landed on an opportunity that feels like it’s the one.

You’ve done your research. You’ve visited a franchisee or two.

You’ve put together your franchise biz plan.

You’ve contacted a lender.

You’ve located a franchise attorney to look over all of your franchise documents.

Next: Discovery Day.

In most cases, you’ll need to get “invited” to a Discovery Day. (A Discovery Day is the day that you’ll visit franchise headquarters. It happens towards the end of the franchise research process.) The franchise development representative will make an official invite if he or she feels that you’ve got what it takes to become a franchisee of their concept…and the financial wherewithal to do it. The representative also needs to feel that you’re in a position to make a yes or no decision, either while you’re there, or a week or two afterwards. 

In other words, you must be ready to buy…or pretty damn close. If you’re just kind of curious about the opportunity, you’re not going to be invited.

And, you shouldn’t be. Heck, I wouldn’t invite you to headquarters if you weren’t serious, either.

A Real Business?

That’s what you need to find out.

Is the franchise opportunity for real? Is there really an infrastructure in place to help franchisees succeed? To help you succeed?

You’ll get to see the operation in action. You’ll finally get to meet your franchise development representative and the rest of the executive team. You’ll also get a tour of the facility and spend some time in all the different departments. You may even visit one or two franchises that are located in the vicinity of headquarters.

The Discovery Day is one of well…discovery. It really should be called a “Meet the Franchisor Day.” But, it’s also a “meet the prospective franchisee day,” in the eyes of the executive team at franchise headquarters. And it’s also the “I’m Close to Getting Paid a Nice Commission Day” for your representative. (And if you’re working with a franchise broker-it’s their special day, too) That’s fine; they should get paid. And, believe me-they really want to!

This Is Serious

Now, assuming that you do receive an invite for a Discovery Day, you’re probably going to notice a difference in the way that your franchise development rep is communicating with you; things may start to feel a little more intense than they have been in the previous weeks or months. That’s because in his or her mind, things are starting to move in one direction; The Decision. Well, actually two decisions. And, both of them take place after your Discovery Day.

The first decision will come from them; they’ll need to decide if they feel that you’d be a good franchisee, and if so, formally approve you. If they do so, your franchise representative will call you a day or two after your Discovery Day visit, and formally tell you that you’ve been approved as a franchisee and that they’d love to have you as one. It’s a great phone call to receive.

The second decision will of course be yours; The Decision to accept their offer, and become a franchise owner.

That’s where that sense of doom comes in. The fear.

It’s normal.

Just make sure that you’ve left no stone unturned.

They certainly did in my day.

Everybody went there.

Okay-not everybody.

Denny’s After Midnight

 “After midnight, we’re gonna shake your tambourine.

After midnight, it’s all gonna be peaches and cream.

We’re gonna cause talk and suspicion;

We’re gonna give an exhibition.

We’re gonna find out what it is all about.

After midnight, we’re gonna let it all hang down.”

- Eric Clapton, After Midnight.

Lyrics written by John J. Cale. © Warner/Chappell Music, Inc., Sony/ATV Music Publishing LLC

 Coffee And Pancakes

All of us really did let it all hang down.

Then we went to Denny’s.

We drank coffee. We ate pancakes.

And, even though we didn’t know it at the time, we were making memories.

Hanging Out With A Celebrity

I remember it being really cold that night-Cleveland cold.

That night-that morning actually, was when Danny Thomas came over to our table at Denny’s and sat down with us. With Cliff, Rick, Ken and Scott…my high school buddies.

It was around 1:30 am. We had hit a few bars and such. We weren’t quite ready to go home. So we stopped at Denny’s-the one next to The Front Row Theater. (Where Danny Thomas had just performed.)

The Front Row

Cleveland’s Front Row Theater wasn’t just any old theater.

It was cutting-edge. It was a theater-in-the-round that featured a slowly-rotating stage. Every seat was good. The premium ones were the ones located on the aisle where the performers walked down to get onto the stage.

The sound system was top of the line. The acoustics were amazing.

Turns out that my wife’s late Uncle, John Faroni, built it. (You can see the name of his company, Faro Construction on the sign below.)

Sammy Davis Jr. was the opening act—he opened The Front Row Theater.

I saw The Jackson 5, George Carlin, Bill Cosby, Rich Little, Aretha Franklin, and Jean Luc-Ponty perform there. It truly was an amazing place.

Why Did Danny Thomas Sit Down With Us?

Danny Thomas must have sensed the magic going on at our table…the intellect…and of course our extreme passion for what was going on in the world at the time.

Why else would he have pulled up a chair?

He shared some life tips with us for a few minutes.

“Go for your dreams.”

“You guys are young-now’s the time.”

“You look like winners to me.”

Did we believe him?

A little, I guess.

Was it cool to have a celebrity of his stature hang out with us that night?

You bet.

Were all of us a bit buzzed?

Yep.

Did it matter?

(Maybe a little.)

Denny’s Late Night Crowd

Although I haven’t been to a Denny’s restaurant late at night for a long time, it’s safe to assume that the people who do dine at Denny’s at 2:00 am are mostly from area clubs and bars…and aren’t a quiet bunch. (We certainly weren’t.)

Well, it seems that some New York City landlords aren’t in the partying mood.

They don’t want a new Denny’s restaurant franchise to open in their neighborhood.

From The New York Post:

“Fearing an invasion of drunken rowdies with the munchies, residents of a swanky downtown condo building have filed a lawsuit grand-slamming a plan to put a Denny’s restaurant in their building.”

Well, it’s true; most of the customers will have alcohol (at least) in their systems. But, will they be rowdy?

The suit also states that the new Denny’s would be “A haven for violence.”

That may be pushing it a bit.

I have an idea for these landlords; hire an off-duty cop or two to provide security.

Brilliant…I know. Please add that one to your list of reasons why I’m The Franchise King®.

Freaking Rowdies!

Did things get rowdy at the Denny’s we frequented?

Yes.

Violent?

Not that I remember.

There also weren’t cameras everywhere.

Nor were there as many guns around.

But, not having a brand new Denny’s franchise open up in “The city that never sleeps?”

It doesn’t seem right.

Think of all the jobs would be created.

And, think of all the memories that won’t be made if that Denny’s franchise doesn’t open.

Before you buy a franchise…that’s when you need to get advice.

But, not just any advice.

You need advice that’s second to none.

You need to get outstanding advice.

Top-of-the-line advice.

Sound advice.

Proven advice.

You Need To Have Confidence

Not having confidence in your ability to properly choose, correctly research, and buy the right franchise…will only lead to disaster.

You must find ways to reduce your risk. And, increase your chances of success.

One way to do that is to make sure that you’re armed with enough information.

Good information. Useful information. Valuable information.

And, consider getting advice from franchise industry professionals. People that are in the industry.

Not After

Information…good information and advice on buying a franchise is readily available.

But, find it and use it before you buy a franchise-not after.

And, please don’t ask for advice the night before you’re about to sign your franchise agreement like they did.

Okay?

Franchise Review

From their website:

“With 4,500 offices in 2013, Liberty is currently the third largest tax franchise company in the world.”

Liberty Tax Services  founder and CEO, John Hewitt, is a recognized name in the tax and accounting world. Hewitt is the founder of two top tax preparation firms, and was a former H&R Block regional director. Accounting Today magazine has yearly named him one of the accounting profession’s top 100 most influential people.

If you’re a franchisee of a company that has a CEO with huge name recognition, it’s definitely a plus.

(Disclosure: The franchisor I was with had a contract with Liberty Tax Services, so they were in our portfolio of companies that we were allowed to present to our franchise candidates.)

Meeting Hewitt

I met John Hewitt when I was a franchise broker. He spoke at one of my franchisors’ national meetings.

I wasn’t impressed with Hewitt at all…and the thing is-I was hoping to be…because I love hearing smart people speak. I love learning from people that have “made it.”

But, in Hewitt’s case, there was something about him that just didn’t “feel” right to me. Maybe it was how he came across…his persona. I really don’t remember him saying anything specific in his presentation that turned me off-nothing like that. I just didn’t get good vibes from the guy. And, I always trust my intuition. Always.

The Opportunity

Liberty (like most tax preparation franchises) is a low-investment franchise business opportunity.

According to their franchise website, the investment for one franchise office ranges from $56,800-$69,900. (Add some working capital to that figure, as it’s not included in the start-up costs that are listed.)

In addition, there are a limited number of Area Development opportunities. If you’re looking to own and control an entire area, and you fancy the idea of receiving a portion of the both the up-front franchise fees and continuing royalties, it’s an option that you may want to explore.

Liberty Tax Services franchisees deliver tax preparation services-but supposedly don’t have to have tax experience themselves. But, they should be good managers of people. That’s because franchisees have a lot of employees during tax season.

Pros: 4500 offices in the US and Canada; Liberty Tax Services is a real player in the tax preparation franchise niche. This low-investment opportunity offers a truly seasonal business. When it’s not tax season, your office has very limited hours. The world is yours during these times.

Cons: This is a pretty crowded niche. In addition, the pool of employees may be limited…especially high-quality ones. If mistakes are made on a client’s tax form, you (as the franchisee) are liable.

Finally, just because I didn’t have a good feel for Hewitt, doesn’t mean that you will. It also doesn’t mean that he’s a bad guy. Remember; any franchise opportunity that you’re looking into requires serious research…good due diligence.

So do it.

What has your experience been with the Liberty Tax Services franchise?

It won’t be a question of if.

It will be a question of how hard.

A Franchise Ownership Tip

Don’t buy a franchise just because it’s a franchise.

Buy a franchise because you feel that you have a pretty good handle on what it’s going to take to make it a successful one for you.

Forget all the statistics.

Forget the fact that it’s the greatest business model ever invented.

But, don’t forget that success isn’t automatic.

Do You Fit?

It’s a fair question?

Are you a fit for a pretty rigid way of doing business?

If you hit the “Yes” button, it must mean that you have a lengthy history of following The Rules.

But, if you don’t, why did you hit it?

Did you hit it because you’re “okay” with rules?

Or did you hit that button because you will follow the rules, and you are used to doing so?

• Don’t hit the “Yes” button because you were downsized 10 months ago – and you’re job search has reached new lows.
• Don’t hit the “Yes” button because you have the ability to follow the rules…but only in certain cases.
• Don’t hit the “Yes” button because you feel that if you don’t do something, you’re going to lose it.

(If you hit the “No” button, we’re done.)

The Hit

If you buy a franchise-and you never should have, it will be hell to get out of it.

As a matter of fact, there’s really no getting out of a franchise.

Once you sign your franchise agreement-your contract, you’re committed.

It’s not like you can call one of the franchise executives at headquarters and tell them that you’d like a refund because “things just aren’t working out like you had planned.”

You can file that nutty idea in the “Never going to happen” folder located on top of your dresser.

And, feel free to ask your local neighborhood franchise attorney what his or her experience has been with clients who have wanted to make a clean exit from their franchise businesses.

Now, I don’t want you to get the impression that franchising is evil. It’s not.

The franchise industry rocks.

It’s just that you signed a legal document. And, that document clearly states, that you’re legally obligated to operate your business for 5-10 years.

Official Franchise Agreement Example

“Except as otherwise provided in the Agreement, and unless terminated sooner in accordance with the terms and conditions of this Agreement, the term of this Agreement is ten (10) years from the date the office first opens for business or such lesser month of time as may be provided for in the lease or sublease for the premises.”

That’s one hell of a sentence. (It looks like a paragraph to me, too.)

And, you would take one hell of a “hit” if you didn’t honor your franchise agreement. (Translation: If you walked away from your business.)

That’s because unless you were able to sell your franchise to someone, (which would have to be approved by your franchisor) you would still be obligated to pay for marketing, advertising, rent, your small business loan, royalties…everything.

So, make sure that you’re a fit for franchise ownership.

So, you won’t have to take a hit.

Invest a little money now, so you won’t have to later.

Sometimes, a news story can force franchise executives to hit the restart button.

In Taco Bell’s case, it’s a super-sized one.

I’ll explain.

Taco’s Are Popular

For awhile, hard taco’s were all the rage.

Customers who had a taste for Mexican food-and who needed it fast, could drive-up to their local Taco Bell franchise, and munch down massive quantities of taco’s-for around $5.

A great value.

Except…

Have you ever watched anyone eat a hard-shelled taco?

If you have-I’m sorry.

(Sloppy)

The Soft Taco

Soft taco’s can usually be munched down in a much less-sloppy way.

And, they’re not as dangerous.

That’s because soft shell taco’s don’t cause inner-cheek cuts, since there aren’t any loose shell fragments.

The Recall

There are going to be a lot of bummed-out Taco Bell customers.

The recall that I’m about to tell you about won’t make Taco Bell franchisees very happy, either.

Look 

Nice.

It’s The New Soft Taco. And, it’s been recalled for obvious reasons.

Now, it hasn’t been proven that any of the prototype soft shell taco’s pictured above were actually served to Taco Bell customers.

Of course it hasn’t been proven that they weren’t served, either.

Taco Bell management, in an official Facebook statement (whatever the heck that is) wrote the following:

“We have strict food handling procedures and zero tolerance for any violations. We believe this is a prank and the food was not served to customers. We are conducting an investigation and will be taking swift action against those involved. ”

I’m thinking that they may need to up their PR ante here.

Have you ever had a soft shell Taco Bell taco?

I haven’t.
 
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Two-part questions can get you to the heart of the matter, quickly.

Why ask only one question when you can squeeze in two?

Especially if it can help you lower your franchise risk.

Don’t Be Shy

You may be about to embark on one of life’s greatest adventures-business ownership.

This isn’t the time to be shy. You need to ask the questions that will help you make an intelligent, fact-based decision on the franchise (s) you’re investigating.

If you’ve been keeping up with my 40-part series…reading every post I’ve published on “The Top 40 Franchise Research Questions To Ask Current Franchise Owners,” you’re probably past the “dreaming of owning my own business someday” stage. Right?

Did you catch the last Top 40 post? (It’s Star Trek-themed)

Two Franchise Research Questions

Question #37

1. “What is your favorite part of the business?”

• Don’t you want to know what gets the current franchisees out of bed in the morning?
• Don’t you want to know what will possibly get you out of bed each morning-as the owner of a franchise business?

The answers you get from the franchisees that you’ll be calling may or may not be what you expected.

For example, what if one of the franchisees that you contact tells you that his or her favorite part of the business is all of the opportunities for community involvement that their franchise business affords?

Or, maybe you learn from one or two franchisees that they like the fact that they get to come and go as they please during their normal business hours-and that’s their favorite part of the business.

The answers you get when asking this question will probably be as different as the franchisees themselves.

So, call 10-15 current franchisees and ask them what their favorite parts of their businesses are.

Maybe one of their favorites will be yours, too. (If you become an Owner.)

Part Two

I promised you that Question #37 had two parts.

Here’s part two:

“What is your least favorite part of owning this franchise?”

Ask it-even if you’re afraid of their answers.

Most franchisees dislike parts of their day-to-day business activities. It doesn’t mean that they are unhappy franchisees.

It means that they’re human.

Think about it: How realistic is it for a business owner to like everything about their business?

This is your chance. This is really your only chance to find out the good, the bad, and the ugly about the franchise business opportunity that you may about to invest your money in.

Wouldn’t you rather find out what’s good and what’s not so good before you write a big check?

Great franchise research enables you do to just that.

Image courtesy of den99 on Flickr 

Franchise Review

Curves is “The World’s Largest Fitness Center Franchise.”

(According to The Guinness Book Of World Records.)

That’s quite an accomplishment.

Curves was The One. The one that set the stage for almost every circuit-training style fitness franchise that’s currently being offered in the US-and around the world.

From their franchise website:

“Gary and Diane Heavin opened the first Curves in 1992 as a fitness and weight-loss facility designed especially for women. In a relatively short amount of time, Curves grew to become the largest fitness franchise in the world, helping women in over 90 countries lead healthier lives. The reason for Curves’ success is the practical approach to women’s diet and exercise combined with a supportive club environment. We invite women of all shapes, sizes, and ages to lose weight, become stronger, and reach their health goals at Curves.”

It’s all good.

But, is it good enough for you to buy?

Well, it was good enough for North Castle Partners to add to their portfolio.

Curves Closings

Maybe it’s not all good.

From the Wall Street Journal:

“Over the past three years its U.S. franchisees have been closing outlets at a rapid rate, shrinking the chain by about a third: to 5,208 U.S. sites at the end of last year from 7,748 at the beginning of 2007, according to a recent franchise disclosure document the company filed with state regulators. More than 1,000 Curves vanished across the country in 2009, while just 35 new locations opened.”

My Take

Fitness franchises that are focused on women still have legs. (Nothing even remotely sexual intended.)

But, if franchisors in this sector-like Curves For Women, don’t adapt to the changing needs of the market, they will quickly find themselves in one heck of a bind.

Pros: Curves is a powerful brand. Heavin has done a remarkable job with the branding aspect of the business. Most people instantly know what Curves is-and what Curves does. The only way for you to make the purchase of a Curves franchise payoff is to take multi-unit risk. Choose a great geographic area, and buy the rights to 5 Curves franchises. That way, you have a chance to make some money-if things go your way.

Another good thing about Curves; the low investment. You can start a Curves franchise for well under $100,000. Well. Under.

Cons: If Curves wasn’t having some issues, they probably wouldn’t have been purchased by a private equity group.

Numerous franchisee complaints have turned into lawsuits-that’s never good.

Some markets may not have territory availability.

The bottom line: If you’re looking to get into the fitness franchise segment-one that’s 100% focused on women, Curves is still in the game. Choose your locations carefully, and talk to at least 20 current franchisees from different area of the country.

In other words, do great franchise research.

What has your experience been with Curves?
 

(Image and definition from Dictionary.com)

No-spin reviews of franchise business opportunities are genuinely needed in the marketplace.

I’m more than happy to provide them.

(In my usual, gentle way.)

How I Do Business

I’m often asked my opinion on certain franchises.

Sometimes I give them; sometimes I don’t.

It depends on the situation.

For example, if I’m working with a client-in which I’m trying to protect their interests, I’ll share what I know of the franchise (s) in question-whether it’s positive or negative.. With $100,000 or more on the line, I sleep better at night knowing that I’ve followed through on my commitment to them.

My commitment:

I make sure that my clients have access to every bit of information they need in order to make a confident, fact-based decision on the franchise they’re thinking of purchasing.

Now, if a reporter contacts me for a story, and asks me what I think about a specific franchise opportunity, I handle their inquiries a bit differently. Instead of giving my opinion of the franchise they’re asking me about, I shift things over to the sector of franchising that the concept they’re asking me about is in. I’ve found that it’s more useful for their readers-and it encourages them to compare opportunities instead of just focusing on one.

My Reviews Of Franchise Opportunities

My franchise reviews will be short and to the point.

And, you’ll always know where my head is at when I provide them.

That’s because if applicable, I’ll be disclosing any and all business and/or personal relationships I have with the franchise companies that I’ll be reviewing.

You’ll know if:

• I’ve helped facilitate a sale (when I was a franchise broker) in which I received a commission from the franchisor
• I’ve ever received money from the franchisor for marketing or advertising
• I am friends (or sworn enemies-LOL) with any of the employees at franchise headquarters

The bottom line: anything that would be a possible conflict of interest will be disclosed.

A Good Starting Point

The franchise reviews that I’ll be providing are only a snapshot of the franchise opportunity. They’ll be a good starting point for you.

But, you still have to do your own research.

Do you know how?

Grab my eBook! 

My Franchise List

I have a list of franchises that I’m going to be reviewing.

Do you?

Are there any franchises that you’d like to see a review of?

Let me know in the comment section below, and I’ll do those first.

Don’t be shy!