A little over a month ago, I was asked to hold an #AMA event. (AMA = Ask Me Anything.)
I enthusiastically agreed, and decided to go with a topic I’m well-versed in: “Buying A Profitable Franchise.”
In this post, I’m going to share my answers to some of the franchise questions I was asked during my #AMA event.
I really think you’ll find them useful-especially if you feel owning a franchise is in your future.
The Top 3 Franchise Questions Asked
Out of the dozens of franchise questions I answered during my #AMA, I chose the 3 I felt would be the most helpful to you.
Here they are…
Franchise Question #1
Thank you for taking the time to answer our questions.
Is a 6 figure profit (after ramp up) realistic for home based franchise opportunities (assuming good concept and good franchisee for that concept) or is that like looking for a unicorn?
How important is territorial protection? Do many franchisors over allocate creating a situation where franchisees are eating each others’ lunches?
What do you believe provides more value to a franchisee: strong personal support from the franchisor or strong marketing and brand recognition?
Oct 23, 11:40 AM EDT
1. A Six-figure income is definitely possible for a home-based franchise. But, it does need to be a high-level one, with services/products that bring in big numbers. Think sales and/or consulting type franchises.
2. A guaranteed protected territory is essential. Period. Otherwise, you run the risk of having a very aggressive franchisee next to you who may sneak in to your territory.
3. Both-in a perfect world. And the best thing; all you have to do is talk to a lot of franchisees to find out how good the franchisor is…at both.
Oct 25, 11:10 AM EDT
Franchise Question #2
Obviously there are many franchise opportunities out there. Some require millions in the bank to just be considered. My three questions are:
1. How do you personally evaluate and decide on what type of franchise is worth the return (not speaking about huge franchises such as Dunkin Donuts/7-11)?
2. As a person who is new to this world but definitely interested in learning more, what are some good resources to use to learn the ins and outs from step A to step Z in regards to franchises?
3. How do you personally feel about seasonal franchises? Ones that may be open 7-9 months out of the year? Obviously there are still bills to be paid during the times that the business is shut down. I’m assuming that the hope is that the cash flow is enough during their season to offset the times that they are closed, but in your experience, do the franchisees generally own more than one franchise in different areas to supplement their income?
Thank you for the time and I look forward to your replies!
Oct 22, 7:58 AM EDT
Jason, here ya go!
1. and 2. : I wrote a very-detailed article that will do the job in answering your #1 and #2 questions. Please read the entire article!
This: How To Buy A Franchise
2. I have to tell you; for someone that truly wants to own a “lifestyle” business, nothing beats a seasonal franchise.
For example, look at a franchise like Spring-Green. (Disclosure, I helped them start their blog and I did some marketing for them several years ago.)
This franchisor is in the lawn care business. They do fertilizing and pest control for lawms all over the country.
But, their franchisees have around 3 months off, every year.
I’m told that they get to relax…go on vacation, until around the end of December. Then it’s marketing time. It’s time for them to do mailers etc. to existing customers-and to potenital new customers.
In a perfect world, the 9 months they work every year brings in enough revenue to suport their lifestyle. Best way to find out? Do good research, which includes talking with the franchisees.
Most of the folks who own seasonal franchises only own that one franchise.
Oct 25, 11:21 AM EDT
Franchise Question #3
Hello Joel! What do you think is one of the most profitable franchises to own?
I’m going to share with you what I think is a real sleeper in the franchise industry-and it’s a highly profitable type of business.
Drum Roll Please:
Restoration and Repair.
Think Servpro and their competitors.
High-margins, and the business serves a “need” not a “want.”
Also, if you can become the owner of multiple full-service restaurant franchises, you can make
good great money.
OCT 17, 1:26 PM
Do You Want More?
I have a feeling you’d like to see what other questions were asked about buying a profitable franchise.
If that’s the case, go to this webpage.
All the franchise questions, along with all of my answers-have been archived there.
And feel free to ask me any questions you have below-in the comment section of this post.