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The Fear of Purchasing a Franchise
Written by: Ken HollowellArticle Overview: Ken Hollowell discusses how to overcome the fear factor when it comes to purchasing a franchise business.
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The Fear of Purchasing a Franchise
Over my forty plus years of professional business services of which 35 of it involves franchising, I am still amazed at how people struggle with the process of making a decision. Basically, a decision requires taking responsibility for that decision and the actions associated with it. Few people want that responsibility and would rather do nothing than for someone to say, “You made a bad decision”. The psychological fear of making a bad decision simply paralyzes most people.
How Fear Paralyzes People
President Franklin D. Roosevelt, in 1933 said it this way, “The only thing we have to fear is fear itself.” A lot of people allow “fear” to overcome their ability to even reason therefore they become immobilized and stagnant. If you realize that the thing you fear actually has no power whatsoever, but instead it’s the fear that has your power. The fear actually is an illusion in your mind and is not a reality and it’s you that are empowering the fear by giving it your energy.
Knowledge Can Help You Overcome Fear
Franchising has a solid history of success for over 60 years. Numerous government regulations, laws and guidelines are in place that requires all franchisors to follow and assures the potential franchisees that misrepresentation and fraud will not be tolerated. The extremely low failure rate of franchising, the 76 industries and 6,000 companies that have expanded through franchising along the undisputed $2 trillion in gross retail sales through franchising is testimony of the impact franchising has in our United States economy. There has never been a method of marketing as successful as franchising in the history of the United States. Over 40 other countries now have franchise laws and recognize the potentials of franchising within their business atmosphere and environment.
Take One Step at a Time
When you understand the Federal Trade Commission’s requirements that a franchisor must follow you can be more confident in the time spend researching and investigating the business opportunity being offered. If you are considered by the franchisor to be a qualified prospect you will be provided with the franchisor’s franchise disclosure document that gives an explanation of business being offered and a copy of the actual franchise agreement that all franchisees sign. Within this document will be the names and phone numbers of existing franchisees who have joined the network and you should contact them with your questions. A franchisor must allow fourteen days from the time you receive the franchise disclosure document to the time required to sign the franchise agreement and pay the initial franchise fee.
Allow your franchise marketing representative to help you through the process.
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Article Tags: franchise consultant, ken hollowell, our business, profran consultants
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Related Forum Posts
Re: Enticing Franchises - Top 9 List
- All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers...
- [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there.
To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1]
Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published.
I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee?
- Dear Colleague
There is no easy answer to this question. Things to consider:
[list=]
The sizeof the Franchise
Clent base
Expected Turnover
Intellectual Property costs (recoup)
Number of Franchises
Number of employees
Original Set up costs
Franchise admin costs
An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc
The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000.
Hope that this gives you some idea
Take care
Ian[/list]
Re: Franchise Surveys
- Another good tool to researching a franchise is to speak with their existing franchisees.
This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application.
The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc...
This information is required by Federal Law to be disclosed to your prior to making a purchase.
So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers...
- [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq]
That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!
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