Buying A Franchise: Is it Right For You?

This post is the first in an occasional series, “What Are U Doing After Work?” that explores options for reinventing yourself and beginning second and third careers when your “legacy career” ends.

I was just reading about all of the professional athletes moving into franchising. Former NBA player, Jamal Mashburn along with a group of investors that includes Rick Pitino, his former UK coach, operates 37 Papa John’s, 34 Outback Steakhouses, 3 Dunkin’ Donuts and the largest Toyota dealership in Kentucky. Venus Williams and her business partners are opening five Jamba Juice stores in the D.C. area. NFL star, Reggie Bush and a group of athletes have franchised Panera Bread stores throughout Coastal California.

If it is right for all of the sport stars, could franchising be the answer for the former stars of corporate America? I decided to interview an expert. Jim Gleason, General Manager, FranNet of Mid-America, a franchise business consulting company. Jim shares his perspective on franchising.

Even though the economy remains uncertain, Jim says over the last several years interest in franchising has increased. In his role, Jim’s company acts as a matchmaker between the potential franchisee and the over 100 franchises his company represents. “We have a one-to-two hour interview with the person and try to understand their goals,” says Gleason. FranNet offers an assessment that includes the person’s psychological aspects, how much money they have to invest and their skills sets to help find the franchise each person will have the best chance of success in operating. The process is free to the potential franchisee because FranNet is paid by the franchisor that is happy to have a high quality candidate with a higher potential of success.

Jim says a common misconception people have is that “franchising is either food or retail.”  There are many types of franchises including lodging, home services, Business-to-Business, Children’s Related, “Green” Energy Related, Senior/Home Care and Health and Fitness among others. According to Entrepreneur Magazine there are over 3,000 franchise opportunities in the U.S. and Canada. Gleason says, “People can make a good income in a franchise that is outside of food or retail.”

A second misconception Gleason cautions prospective franchisees about is the hard work that comes with operating a franchise. He says, “You still have to realize this is a start-up business and just because there is a system in place, it is not plug and play.” He advises potential franchise business owners that there are long hours and ‘sweat equity’ that have to be invested to be successful.

What are some of the knowledge, skills and attributes of successful franchise owner/operators?  Gleason says, “You have to be willing to follow someone else’s system and you have to be self-motivated.” Other than that, Gleason advises that leadership skills, customer service skills and having the legal, moral and ethical mindset of becoming a business owner are important.

After you leave your corporate job will you become the next Junior Bridgewater? After his twelve-year career with the Milwaukee Bucks he now has annual revenues of more the $500 million owning 162 Wendy’s units and 121 Chili’s restaurants. Even if your goals are more modest—remember these three tips, (1) always read (and understand) the company’s legal documents; (2) consult with an attorney and an accountant; (3) talk with current and former franchisees. I also recommend reading, Become a Franchise Owner by Joel Libava (aka The Franchise King) 2012.

Jim Gleason also recommends this link:

http://jimamosblog.com/featured/frannet-survey-shows-why-franchises-outperform-other-small-business-owners/

What Are U Doing After Work?