You know how important the 3 P’s of franchising are, right?
Wait: you don’t?
Let me show you.
Everything You Need To Know About The 3 P’s Of Franchising
First things first. These are the 3 P’s of franchising:
Let’s dig in.
The Partnership In Franchising
It’s important to know that when you buy a franchise, not only are you buying a proven business system-and all that goes with it…
You’re buying into a partnership. But not in the legal sense.
In other words, when you become the owner of a franchise, you’re “partnering” with the franchisor.
You’re partnering to increase revenue, expand the footprint, boost the brand-and more.
Basically, as long as the franchisor you picked is a good one (with a great product and/or service) and you’re provided with all the tools necessary to be successful, it’s a win-win.
As you probably know, the franchisor receives royalties every month from their franchisees. And they’re usually based on revenue. The higher the revenue, the higher the royalty. Royalty calculation example
The bottom line: before you buy a franchise, make sure you’re buying into a good partnership.
A Power of the Franchise Business System
Tip: before you sign on the dotted line, make sure the franchisor you’re partnering with has a powerful business system. In total.
Specifically, today’s franchisors should have:
- A powerful brand
- A powerful marketing system
- Powerful technology
- Powerful support
- Powerful headquarters staff
But, how will you know if the franchise opportunity you’re investigating has a powerful system?
By doing your research the way I suggest, which will enable you to quickly and easily find out how powerful their system is.
The bottom line: if you play your cards right, you’ll be able to leverage the power of franchising and the power of the franchisor you partner with.
Profitability In Franchising
“Joel, if I buy this franchise, how much do you think I’ll be able to make?”
I’m asked that question a lot, and rightly so. Here’s my answer.
“Ask the franchisees.”
“You mean they’ll tell me?”
“Yes. If you ask them the right way.”
Here’s the right way.
(The video below-from 2013, is one of my most-watched franchise videos. In it, I show you how to find out how much money you’ll make as a franchisee. Click play!)
Now that you know how to ask the “money” question, I need to tell you a few other things about owning a franchise. Things that don’t have to do with profitability.
The Added Bonuses You Get As A Franchisee
First of all, if you become a franchise owner, you quickly find out that profitability isn’t everything. It’s important, sure, but so is:
- Future growth opportunities
Eventually, after you make it through the first (tough) couple years as a new business owner, you’re going to want to have a certain type of lifestyle. For instance, it may be a lifestyle you’ve always wanted to have, but couldn’t, because you worked for someone else.
In addition to having the type of lifestyle you’ve always wanted to have, you may want to take advantage of the growth opportunities that are available as a franchisee. In other words, you may want to invest in a bigger space, or more franchise units.
Then there’s the freedom you’ll have.
- The freedom (eventually) to come and go as you please.
- The freedom you’ll have to hire your nephew-because he really needs a break.
- The freedom to take a much-deserved long-weekend with your honey.
Because you can. Because you’re the Owner.
And let’s not forget control. The control you have over just about everything.
(Use your imagination.)
Finally, it’s important for you to know that when you open a franchise business, you impact your local community.
Specifically, you add commerce. Jobs. Tax revenue that will be used for schools, roads, emergency services and more.
Additionally, if you wish, you can give back to your community by doing some charity work.
To summarize, when you own a franchise business, a lot of things are possible.