Catherine Monson

things to consider before becoming a franchisee

Franchising gives people the opportunity to get into business for themselves: giving them the opportunity to control their own destiny, become their own boss, build wealth for their families, create economic growth, create jobs and make a difference in their local communities.

cAtHerIne Monson, cFe, Propelled Brands, ceo Immediate Past chair of the International Franchising Association, IFA Catherine Monson brings 30 years of franchising and management experience to her role as CEO of FASTSIGNS International, Inc., and Propelled Brands, the multi-unit franchisor that includes FASTSIGNS®; SIGNWAVE® in Australia where FASTSIGNS centers operate under the SIGNWAVE brand; NerdsToGo® and Suite Management Franchising, LLC, the parent company of MY SALON Suite® and Salon Plaza®.

The franchising model is quite different from a traditional small business model. With franchising, you are in business for yourself but not by yourself. When you buy a franchise, you should be getting a proven business model with brand identity and ongoing support. In the FASTSIGNS® network, for example, we have grown to over 760 locations. We have a proven business model with a well-recognized brand. We provide training and support in business and financial management, sales and marketing management, production management and employee management. In addition, the franchisees and teams at the 760 FASTSIGNS centers provide incredible peer support. As you search diligently for the best franchise fit for yourself, here are just a few of the things to consider:

Get the Brand’s Franchise disclosure document and read it!

Every franchise brand is required to give prospective franchisees their Franchise Disclosure Document (FDD). This is an important document to thoroughly read and understand. The FDD is designed to give the prospective franchisee transparent disclosure and information about the franchise opportunity. It lists your obligations as a franchisee, the franchisor’s obligations, all of the expected costs to get your franchise open, and the sales volumes, margins and costs of their U.S. franchise network. Look carefully at the Brand’s Item 19 Franchise Disclosure Document; this is the only information the franchisor can legally give you regarding potential earnings. A best practice in franchising is to give actual profitability results of the franchise network; we do this for all of our brands in Propelled Brands (FASTSIGNS® , NerdsToGo®, and MY SALON Suite®); if a franchisor does not disclose actual financial performance of their franchise network in their FDD, you would ask why; the best franchise brands do! If a franchisor gives you any information other than what is in their Item 19, they are violating franchise law and it should be a major red flag!

a strong Franchise Brand and model

Look for a franchise that has a recognized, respected brand that consumers like and use, that has proven operational practices, a strong business model, and solid marketing and advertising. With due diligence and time spent validating with existing franchisees, you will have a better feel for what your future can be with that

brand. It’s also important to find out the franchisee satisfaction ratings the franchise brand receives from its franchisees. Finally, make sure to talk to many of the brand’s existing franchisees and ask them about their profitability, satisfaction with their franchisor, and if their franchise agreement was up for renewal now, would they renew.

let’s talk about money

The range of financial investments varies from franchise brand to franchise brand. It’s imperative that you take time to read the entire franchise disclosure document before signing with any franchisor. If you do not understand certain components of the FDD and the Franchise Agreement, make note of those and ask detailed questions of the franchise sales team you are communicating with, as well as with the existing franchisees you are speaking with. Be sure to thoroughly review the Item 7 and Item 19.

consider Growth opportunities

When looking into franchising, it’s important to find an industry that has growth potential with a strong demand for the product or services. You will be well served to consider the demand for the particular industry, as it can give you an advantage if you tap into an industry with less saturation. At the same time, you also want to consider the positioning and competitive nature of the brand you are considering; a strong franchise brand could have an advantage in a crowded market.

variety in products and services

Does the franchise you’re interested in have a wide variety of products and services that they offer to their customers? Multiple product lines mean more opportunities for additional revenue through a range of options for customers. This diversity of selling options can separate a successful and resilient business from an average business. If the franchise you are considering doesn’t have a good product mix, it can be challenging to entice a returning customer base or reach new customers as well.

passion for the industry

One of the most important things to consider when becoming a franchisee is whether or not you have a passion for the industry you are entering. It is extremely important that as a franchisee, you are 100% buying into the brand and the industry. While you may be new to the industry, it’s valid to ask yourself whether this industry is interesting to you and something you are open to learning about daily.

Focus on leadership and Building a Great team

Do you enjoy helping others grow their skills and reach their goals? A truly great franchisee is someone who has the desire to build a great team that enjoys collaborating and coming to work every single day. Creating a positive work environment and a culture of support for your employees starts with you. If you cultivate an environment where creativity, hard work and innovation are valued and rewarded, the sky’s the limit on the success you can achieve with your team. At the end of the day, there is great reward in helping your employees grow into better, more successful people.

resilience

Franchisees, just like other business owners, must handle daily business challenges and overcome obstacles such as recessions and even a pandemic! The difference is that the right industry and franchise brand can play a role in determining success. To get the full picture of the franchise, request business data collected during turbulent economic times from the brand you’re considering. With metrics, you can assess how they did. Ask about the innovative ways they pivoted or overcame obstacles. For our FASTSIGNS franchisees throughout the pandemic, our corporate team rolled up their sleeves to support franchisees as they supported each other. The corporate team created new products and services and the marketing materials to sell them, from the production of COVID-related signs and PPE to pivoting to B2C products. Our FASTSIGNS franchisees embraced these new products and services. Our franchisees persevered and found ways to focus on the positive, practice courage, and relentlessly refused to give up.

Franchisor support

In an industry that’s experiencing unprecedented growth and rapid innovation, you want a leadership team that can provide strong strategic direction. At FASTSIGNS, we provide our franchisees with dedicated support in site selection, center design, build-out, and four weeks of initial training (including one week of training in a FASTSIGNS center, followed by two weeks at our Dallas Headquarters, and one week of onsite training in their new center). We also provide pre-opening marketing to drive sales. We have dedicated Business Consultants and Marketing Services Managers to assist with business/finances, training, marketing and sales, production and staff management. In addition to these, our Franchisee Mentor Program guides newer franchisees by pairing them with an experienced franchisee who can lend support in every aspect of their business. As we are aware that new franchisees have an incredibly busy schedule as they open a business, we offer a 24-hour web-based learning management system that keeps franchisees and their teams up-to-speed and in-the-know in this fast-paced market.

are you ready to take the next step into franchising?

When you factor everything from the strength of the franchise brand, competition in the market, your passion for the particular industry, and more, you are better positioned to make the correct decision of whether franchising is the right choice for you and what franchise brand is best for you. FASTSIGNS provides candidates with an attractive business model with business-to-business hours, low staffing requirements, professional business clientele and attractive profit margins. By taking a close look and weighing all of the options in front of you, I believe you can make the most informed decision in your journey to becoming a franchisee.