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FRANCHISEDICTIONARYMAGAZINE.COM
The hottest new brands
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THE ABC’S OF FRANCHISING
Reach new heights with Dryer Vent Squad® THE ABC’S OF FRANCHISING
Making sense of the FDD
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Women: The next big thing in franchising
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A franchisee who’s making a difference
26
A franchisor raises the bar for chimney services
BE YOUR OWN BOSS! The World’s First VR Enabled Franchise Tradeshow
Franchise Expo
Unleash Your Inner Entrepreneur! The Great American Franchise Expo is the USA’s premier regional franchise expo series. Experience the power of virtual reality and tour the world’s top franchise brands from the expo floor. Educate yourself with the largest and most comprehensive series of seminars on franchising and business ownership. ______________________________________________________ • Choose from hundreds of concepts in dozens of industries. • Meet franchise law experts to guide you through the legal process. • Learn about financing options to fund your new business. • Interact with quality franchise company executives.
www.FranExpoUSA.com 2
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2018 EXPO SCHEDULE Coming To A City Near You
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Cobb Galleria April 7-8, 2018
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George R. Brown Convention Center May 12-13, 2018
Denver Mart October 20-21, 2018
Raleigh Convention Center November 10-11, 2018
All Shows - Saturday 11-5pm / Sunday 11-4pm For Exhibitor Info call 800-304-4271 Info@FranExpoUSA.com
Proud Member
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AFRICAN AMERICAN FRANCHISE COUNCIL
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TE E V E R ANS
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Endorsed By:
SUPPLIER FORUM
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LATINO
F r a nMay c h i 2018 s e E x3p o
Sweep
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Inspire the Next Generation!
T S O C W LO EM HO ED B AS
Inspire the next generation of STEM professionals and run your business with ease with Snapology. Snapology Features: • Robust, Comprehensive Curriculum • Over 60 Different Class & Camp Themes PLUS over 40 Birthday Themes • Unparalleled Support with Marketing, Sales, Social Media, Hiring & Daily Operations • Structured Teacher Training & Support • Ongoing Consultative Advice & Guidance • Collaborative Culture • Classes • Camps • Birthday Parties • Scouting Events • More
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LEGO is a registered trademark of The LEGO Company, which is not affiliated with these programs. â
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con·tents
kən�tents/ noun
1. Your May lineup of stories and features 2. An amazing resource for franchisees
BILL WEBER
The Patch Boys® DuPage County, IL
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16
DEPARTMENTS
9 10 16 18
20 52 56 58
Letter from the Editor Buzzword What’s trending in franchising.
Update
The latest headlines in the franchise industry.
Franchisee of the Month Good old-fashioned business practices bring success.
Entrepreneur
A dancer turned CEO on a mission to de-stress the world.
Interview
Nick Neonakis on franchising.
Spotlight
Trending businesses you want to know about.
Last Word
Why FASTSIGNS® blows the competition away.
May 2018 5
• • • • • • •
Proven Business Model Training & Support Quality Products Copyrighted Curriculum Trademarked, Protected Brand Diverse Income Streams Exclusive Territories
STEM Center & Toy Store
(Birthday Parties-Camps-After School Programs-Toys) FRANCHISE OPPORTUNITIES AVAILABLE www.iknowscience.com • Franchise@iknowscience.com
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con·tents
16 FEATURES 22 24
36 40 44 46 48 50
36
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Confessions of a woman who’s married to “Mr. Fix It” Having a handy husband isn’t all it’s cracked up to be.
Home-Service Heroes
Franchises that can improve—or even save—lives.
Hearth, Home and Hired Help
Who to call when you have a honey-do list.
Entrepreneurship Begins at Home
The more we need at home, the more opportunity there is for new businesses.
From Executive to Entrepreneur Why corporate skills transfer to franchising.
Countdown to Franchising
Four steps to launching into a franchise business.
Understanding the FDD
How the Franchise Disclosure Document works.
The Perfect Arrangement
There’s more than one way to be a franchise owner.
May 2018 7
FranchiseDictionary FranchiseDictionary on the cover FranchiseDictionary FranchiseDictionary HOME FranchiseDictionary SERVICES THE ABC’S OF FRANCHISING
THE ABC’S OF FRANCHISING
THE ABC’S OF FRANCHISING MAY 2018
FRANCHISEDICTIONARYMAGAZINE.COM
The hottest new brands
$5.95
THE ABC’S OF FRANCHISING
Reach new heights with Dryer Vent Squad® THE ABC’S OF FRANCHISING
Making sense of the FDD
BE YOUR OWN BOSS
FranchiseDictionary FranchiseDictionary FranchiseDictionary FranchiseDictionary FranchiseDictionary 12
18
Women: The next big thing in franchising
• Complete training, ongoing support, professional insights and advice • Thousands of potential customers with decks, fencing, wood siding, and more • Create cycle of repeat business • Manage your own hours and schedule • Very low risk, territory protected • Low initial investment
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THE ABC’S OF FRANCHISING
A franchisee who’s making a difference
A franchisor raises the bar for chimney services
Learn how franchising is THE ABC’S OF FRANCHISING changing the home services industry—for the better! THE ABC’S OF FRANCHISING
THE ABC’S OF FRANCHISING
President: Joseph D. Katz
info@franchisedictionarymagazine.com THE ABC’S OF FRANCHISING
Editor-in-Chief: Jill Abrahamsen editor@franchisedictionarymagazine.com
Senior Editor: Mary Lynn Mitcham Strom Contributors: Christopher Conner, Tom DuFore, Dr. John P. Hayes, Michelle Hummel, Faizun Kamal, Nick Neonakis, Eric Schechterman, Susan Scotts, Telanda Sidari, Lisa Welko Marketing/Sales: Ruby Valencia (888) 315-9549, ext. 503 sales@franchisedictionarymagazine.com
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FOR INQUIRIES, CONTACT www.mydeckmedic.com • 800-992-1202 jeff@mydeckmedic.com
Contact us: 197 State Route 18 East Brunswick, NJ 08816 info@franchisedictionarymagazine.com
franchisedictionarymagazine.com Entire contents copyright ©2018
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let·ter
\�le-tər \ noun
1. A welcome note from our editor 2. A brief overview of what’s in this issue
Here in the Northeast, we endured an exceptionally cold, long winter, so we are especially happy to see green back on the trees and flowers in bloom. Homeowners are finally able to trade in their snow shovels for gardening tools, and though many of us love attending to an occasional plant or shrub, most of us would rather enjoy our yards instead of spending all our free time working on them. Now we can. Thanks to home-service franchises, homeowners can enjoy a break from repairs, landscaping, cleaning, and overall upkeep. More and more brands are emerging and adding a new level of professionalism to the home-improvement industry. Franchises manage staff so that home-service employees arrive on time (imagine that!), are clean-shaven, and in uniform. And no matter what the job is—window washing, painting, home repair, chimney cleaning, dryer vent service, landscaping, the list goes on—employees remain focused on one thing: Customer satisfaction. What a welcome contrast to the contractors we’ve all experienced, who don’t return phone calls and keep you guessing if they will show up at all. As with customers, this industry also means good news for investors. Many home-service brands can be run from your home; and they have low overhead and quick startups. In “Home-Service Heroes,” page 24, leaders in the category will share more upsides of this booming industry. Could one of them be for you? No matter where you live, we wish you a spring full of colorful flowers, sunny skies, and a home that feels like an oasis—not a round-the-clock work zone. After all, as the old saying goes, there’s no place like home. All the best,
Jill Abrahamsen Editor-in-Chief editor@franchisedictionarymagazine.com
May 2018 9
buzz·word
\ 'bəz-'wərd \ noun
1. A compilation of franchising trends 2. What franchise experts are talking about
What’s Trending Now
»
ULTIMATELY, PEOPLE INVESTIGATING FRANCHISE OPPORTUNITIES HAVE A central question: “Will this last?” Selecting a business that is performing well and aligned with your skill set no doubt increases your chances for success. Knowing the direction of the market—and how potential customers behave—is also important, because it gauges how a franchise business will perform in the long run. Here are a few clues about today’s market trends. What impact could they have on you? TRENDING: DIVERSITY A recent study conducted for the International Franchise Association by Price Waterhouse finds the number of franchises owned by women and minorities is growing. Today, women own 30.6 percent of all franchises, while in 2007 they owned only 20 percent. Minority-owned businesses are on the rise, too. Asian, Hispanic, and African-American owners prefer franchise businesses to traditional independent businesses. Of these three minorities, Hispanic-owned franchise businesses are growing the fastest. From 2007
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to 2014, Hispanic franchise business ownership doubled from 5.2 percent to 10.4 percent. More diversity through minorityowned businesses can only strengthen brands that embrace it. These businesses are creating a culture where the franchise population better resembles and serves the population at large. TRENDING: THE COMFORTS OF HOME Today, at least 2.8 million people are self-employed and work from home in the U.S.—and that includes thousands of home-based franchise owners. While
home-based businesses may appear to lend themselves to only small operations or online ventures, the truth is the growth of home-based franchises is explosive. If you crave flexibility, an unbeatable commute, and the comforts of working from your living room couch, you’ll be happy to learn that there are many legitimate, scalable, sustainable, and reputable franchise concepts available that generate six- and even seven-figure sales volumes. Business services, residential services, and even fitness brands offer home-based opportunities. Without the expense of brickand-mortar storefronts, service businesses have low overhead costs and big profit margins. TRENDING: FAMILY TIES We hold our families so dear that we are willing to spend on our family members’ needs before ourselves. And we’re talking about the whole family— not just your kids. Today’s working class is often responsible for their children and for their parents as well. Game-changing demographic shifts and new spending habits are powering-up a great many offerings. There seem to be many recession-resistant businesses to explore thanks to family loyalty. For example, senior-related businesses are thriving, because Baby boomers are aging so
gracefully. Sure, senior-care services are in demand, but so are categories like home-improvement and handyman services, because this group is choosing to live independently for as long as possible. If you are compassionate, community-oriented and risk-adverse, these opportunities might appeal to you. Similarly, child-related products and services are huge and growing. Franchises here are offered in five main categories: Sports, Education, Entertainment, Retail, and Food. If you enjoy kids, are good with customers and want a consistent clientele, including repeat customers, explore options here.
Show Time MAY SHOWS Visiting tradeshows is a great way to meet face-to-face with franchisors and other industry pros like franchise attorneys, brokers, and consultants. The Franchise Dictionary magazine team will be exhibiting at IFE this month (see info below). This can’t-miss show offers hundreds of exhibitors plus informative seminars and workshops. If you are able to make it to this great event in New York City, please stop by and see us. We’ll be at booth #577. Register at www.ifeinfo.com and use promo code FRANDICT for free admission.
International Franchise Expo www.ifeinfo.com May 31-June 2, 2018 The Javits Center New York, NY
Your furry friends mean big business, too. Many families have pets, which fuels a demand for pet food, grooming, and care. Retail products, walking and sitting services, and doggie daycare are only a few of the successful concepts franchising nationally. Often, simple operations and a family-friendly culture make pet businesses a joy for clients. For you, this means loyal customers and a sustainable business. Mariel Miller is an award-winning franchise advisor with The Franchise Consulting Company. She has been helping individuals explore franchising since 2004. Contact her at: 877-220-4214.
Stop by our booth #577
The Franchise Show May 5-6, 2018 www.franchisingexpo.com Broward County Convention Center Ft. Lauderdale, FL The Great American Franchise Expo www.franexpousa.com May 12-13, 2018 George R. Brown Convention Center Houston, TX The Franchise Show May 19-20, 2018 www.franchisingexpo.com NRG Park Houston, TX
May 2018 11
buzz•word
4 WAYS TO GROW YOUR SOCIAL MEDIA CONNECTIONS Promoting an event?
Make sure to include your social media links at the bottom of your invitations and flyers.
Doing a TV interview? End the spot with a quick call to action encouraging people to connect and ask questions on your favorite social media channel.
Live training event?
Create a Twitter hashtag (#) that will be used for the event so you can connect with all the attendees and answer questions.
Just met someone new? After a phone call or meeting with a new client or prospect, find them on LinkedIn and connect—let them know you are going to send a request. —Michelle Hummel
Michelle Hummel is CEO of www.webstrategyplus.com
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The Next Big Thing in Franchising: Women With unfair pay gaps and an antiquated culture that penalizes parents for stepping away to raise families, the corporate world can be a minefield for women. So it’s no wonder that many have turned to careers in franchising. Finally, a career option that lets women use their business savvy, manage their own schedules, and work on their own terms. Many women like the level playing field: The cost of a franchise—and how much you can earn—doesn’t change based on your gender. The franchise owner—male or female—dictates the culture. And if you’ve taken time off, be it a year or 10 years, it has no impact on your future earnings. Over the past decade, the franchise industry has seen a boom in female ownership. FranNet, a franchising consulting group in Louisville, Kentucky, found that between 2011
and 2017, female franchise ownership jumped by 83 percent, while male ownership increased by only 13 percent. Women are emerging as leaders in the industry. Quick thinkers, multitaskers, and problem-solvers, women are ideal for business ownership, and many franchise brands are counting on them to be the next generation of business owners. Franchisors know that women want opportunities with better work-life balance, and many have tailored their approaches to semi-absentee or flexible-hours opportunities. Now, how can the corporate world compete with that? —Eric Schechterman As part of FranNet of Boston, Eric Schechterman works closely with clients to understand their goals, values, and lifestyles. For more information, contact Eric at eschechterman@frannet.com
May 2018 13
buzz•word
3 STEPS TO FRANCHISING A BUSINESS How do you know if your business can be franchised? Here we offer some key points to help you decide. Step 1: Look at the business. You need a viable model to franchise a business. Do your customers ask if your business is a franchise? That can be a indicator that you have the right model. Other signs: You’ve been operating at a profitable level for several years, or you have an innovative business model.
Learning Franchising in the Classroom
Step 3: Call in the experts. Turning your business into a franchise can be complicated, so why go it alone? Consider hiring franchise experts, consultants, attorneys, and other franchise professionals to work through the process with you. —Tom DuFore
A couple of years ago, franchisor Ray Titus, founder of United Franchise Group, decided that he would invest in franchise education for somewhat of a selfish reason: He needed to hire people who knew something about franchising at his West Palm Beach headquarters, and he was having difficulty finding them. He knew that PBA, a private, faith-based university, produced excellent graduates through the Rinker School of Business, but those graduates knew nothing about franchising. Titus gave the university $1.5 million to launch the Titus Center for Franchising. There are some 4,000 students at PBA, and now they can earn a certificate in franchising through the Titus Center for Franchising’s curriculum, which I created. Along with the undergraduate program, we are also developing seminars for franchise professionals. We also provide a variety of programs locally for people who want to buy a franchise, start a franchise, or work for a franchise company. Just recently we developed an advisory board of industry specialists to help guide our program. We intend to build the best opportunity for franchise education in the world. For more information, visit www.pba.edu/titus-center —Dr. John P. Hayes
Tom DuFore is CEO of Big Sky Franchise Team. Learn more at www.bigskyfranchiseteam.com
Dr. Hayes teaches franchising to college students, potential frnchisees, business owners and Certified Franchise Executives. For more information, visit www.howtobuyafranchise.com
Step 2: Want it. Once you know your business can be franchised, know if you want to franchise. Before you decide, do some research and make an informed decision.
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up·date
\�əp- dāt\ noun �
1. The latest headlines in the franchise industry 2. Quick news bites to inspire you
Franchising Falafel
» 16
NEW YORK’S ICONIC FALAFEL RESTAURANT OFFERING FRANCHISE OPPORTUNITIES Falafel lovers rejoice! Mamoun’s Falafel, the wildly popular Middle Eastern eatery which first opened in New York City in 1971, is now offering franchise opportunities. New locations are projected to open in Philadelphia, Long Island, and Fort Lee, NJ in late spring, and additional multiunit franchise deals are in development for Chicago, Northern California, and Staten Island. Founder Mamoun Chater established the business with the simple mission of delivering fresh, authentic Middle Eastern cuisine. The original menu, which Chater created using traditional Syrian recipes, ingredients, and spices, is the same menu offered at all Mamoun’s locations today. For more information, visit mamouns.com
FranchiseDictionaryMagazine.com
In brief GREEN GRILL
Spring Cleanup JUNK KING HITS THE ROAD TO TIDY UP CITIES COAST TO COAST Junk King’s shiny red truck—patriotically branded, “Cleaning Up America”— left San Francisco on Earth Day, April 22, 2018, to visit various homeowners, small businesses, and nonprofit groups across the United States. Throughout the six-week journey, Junk King’s team
will be lending its services to help these groups declutter, while raising awareness about recycling. As part of the brand’s year-round commitment to the environment, Junk King will take collected items to the nearest warehouse, where an eco-conscious team will sort the materials.
Not So Secret FORMER AGENT FINDS A NEW WAY TO SERVE THROUGH FRANCHISING Former U.S. Secret Service Agent, Chad Yeilding, will continue to serve others, but this time as business owner of Restoration 1, Birmingham, AL. The company specializes in emergency mitigation, restoration, and reconstruction. “I wanted to do something where I was going out and serving others. We’re walking into a customer’s home or commercial property on their absolute worst day. I make sure we come with smiles on our faces, and let them know we’re there to help,” he says.
Chipotle Mexican Grill announced its commitment to divert half of its restaurant waste from landfills by 2020. Landfills often contain materials that could have been recycled or composted for environmental benefits, but instead emit greenhouse gases that may contribute to global climate change. “We remain dedicated to upholding Chipotle’s commitment to food made with respect for the environment,” says Caitlin Leibert, head of sustainability at Chipotle.
SMOOTH MOVE
Smoothie King has collaborated with the American Cancer Society to create the “Daily Warrior,” a high-calorie smoothie created to help people who face challenges meeting daily caloric and nutritional needs. Blended with fruits and vegetables as well as protein, fiber, calcium, iron, and potassium, the smoothie is designed to help those individuals power through their day.
May 2018 17
fran·chi·see \ fran-chī-zē, -chə-\noun
1. An outstanding franchise owner 2. Good old-fashioned business practices bring success
BILL WEBER
The Patch Boys® DuPage County, IL
W
By Jill Abrahamsen
hile email marketing can be annoying for many people, Bill Weber is grateful for it. If it weren’t for the marketing blasts that came through his inbox, he would have never known about The Patch Boys® drywall repair franchise. Weber was intrigued by the business model at first glance. “It was such a simple concept, but a brilliant one,” he says. He kept receiving promotional emails from The Patch Boys®, and instead of unsubscribing, he started to think about the possibilities. “In talking to my wife about the idea, she urged me to pursue it,” he says. “ ‘Why are you passing up an opportunity?’ she asked me. So I picked up the phone and talked to The Patch Boys® President and Founder, Leo Goldberger. We hit it off immediately. I was struck by his honesty and integrity,” Weber recalls. “It just all made sense. The more I heard, the more I liked.” As a home remodeling contractor, Weber had the perfect background to own The Patch Boys®. “I just took the business and ran with it,” Weber recalls. “There were jobs waiting for me before my territory was officially open. As part of training, Goldberger and his team came to my location and 18
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“I’m a firm believer in
boots on the ground.
It’s good, old-fashioned business.” worked the business with me. It was the ultimate on-the-job training,” Weber remembers. In the beginning, Weber was very active in daily operations. “It’s really important to learn the ins and outs of the business, especially early on. If you know what you’re talking about, your employees will respect you more. I’m a firm believer in boots on the ground. It’s good, old-fashioned business,” he says. Weber believes that the key to success is trust and mutual respect. “You have to honor the customer. If you screw up, you admit it,” he advises. “This is a ‘hearts’ business.’ I want to serve the homeowners, not get them.” Weber’s life has been devoted to serving others. During the Vietnam Era, he served as a submarine sailor and spent time off the coast of Vietnam on covert operations. Now an avid volunteer, Weber supports charitable organizations, including Wheels for the World and Project Home Children’s Foundation. “I’m so happy to have a flexible schedule that allows me to do
important work like this. You can really make this business fit your lifestyle.” The biggest challenge for Weber has been finding and maintaining good employees. “If you put in the time to train and develop people, it will pay off in the long run. You have to work with them and be willing to accept failures in the process,” he adds. Weber is so gifted at training people, he has now taken a role in training new franchisees for The Patch Boys®. “Corporate offers a ton of support. They are always willing to look at the systems. If something isn’t working, they fix it. That’s valuable stuff,” Weber says. Advice for potential investors? “Don’t come in with rose-colored glasses. In any business you have to put in the time. But if you have a good work ethic, you can succeed. This is an inexpensive franchise that can be up and running in no time—and show profits quickly. It’s actually pretty darn gone amazing,” he adds. For more information, visit www.patchboys.com or call 844-99-PATCH.
Weber supports Wheels for the World, an organization that donates wheelchairs to those affected by disabilities around the world. Photo provided courtesy of Joni and Friends.
May 2018 19
en·tre·pre·neur änn-trə-p(r)ə-'nər\noun
1. One who manages and assumes the risks of a business 2. A dancer turned CEO on a mission to de-stress the world
C
By Jill Abrahamsen reative types aren’t usually known for their business savvy.
Not long ago, neither was entrepreneur, Hakika Wise. At the start of her career, the Millennial was more tuned into her right-brain strengths. She earned a B.F.A. in dance, and in her early-20s, she danced and acted professionally, including performing at Harlem’s Apollo Theater. “Because I started dancing later than most—at the age of 13—I had to work extra hard on my flexibility,” Wise says. In search of the best stretching methods, Wise actually became more flexible than her fellow dancers. “People were amazed at how flexible I became and started asking me for advice.” Having mastered flexibility as a dancer, Wise, years later as a single mother, had to create flexibility in her own schedule. In 2011, she took a leap of faith and laid the foundation for Kika Stretch Studios. “I needed to do something that worked well for my schedule. I knew stretching and was passionate about it,” she says. “Since so many people came to me for stretching advice, I formalized my routine, took $500 dollars, rented a room, and started working with clients one-on-one.” The idea took off and before Wise knew it, she had a steady stream of clients. Without a business background, Wise pored through every business and market20
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ing book she could find. “I wasn’t trained to be an entrepreneur. All I had was a mat and a ball. It’s amazing what you can teach yourself just through reading books,” she says. She educated herself on running a business on a tight budget and navigated her way through the growth of three locations. Wise saw a real need in the market, and she set out to deliver a unique product. Her clients come from all backgrounds. She serves stressed-out executives, office workers who spend their days hunched over computers, retired folks seeking changes in their bodies, professional athletes who need more flexibility, people recovering from injuries, and school-aged athletes looking to avoid getting hurt. “We have clients who range in age from 8 to 85,” Wise says. Using what she now calls “The Kika Method,” trained coaches hold cutomized, one-on-one sessions with clients to release tensions and built-up anxiety from the body and the mind. “We leave people feeling relaxed and energized. Our
“Franchising seemed like a big monster I didn’t understand.” goal is help everyone live a better life,” Wise says. “We are the only stretch studio that offers a proprietary system and an accurate way to measure how old someone is flexibility-wise. It’s called ‘Kika Stretch Age.’ We give our clients measurable results.” With three booming locations, Wise knew she couldn’t keep growing without taking time away from her family. “Franchising my business made sense, but navigating the process seemed like a big monster I didn’t understand,” she says. “So I sought council and aligned myself with pros. The folks from Franchise Marketing Systems flew out to see my business and confirmed that franchising was the way to go. They simplified the process for me.” Fielding many inquiries and with multiple
discovery days on the calendar, Wise is very optimistic about the future of Kika Stretch Studios. There are 65 new franchise units projected over the next five years. “Franchisees should be owner/operators. They need to be involved in the day-to- day,” she says. Training is a two-week process in Montclair, New Jersey, and includes 40 hours of anatomy and hands-on training. Investors need a small store front, with about 800 to 1,200 square feet of space. Going from dancer to CEO is no easy task, but Wise figured it out. These days, her business motto seems to echo her own positive spirit, “Life is short, stretch it out.” For more information, please visit kikastretchstudios.com
May 2018 21
Hopefully, he won’t notice the hole little Johnny just put in the wall
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CONFESSIONS OF A WIFE WHO WANTS HER HUSBAND TO STOP “FIXING” THINGS
I
By Jill Abrahamsen am married to a self-proclaimed do-it-yourselfer, a man who re-
sists calling for help unless he absolutely needs it—and incidentally, a man who often can’t see when he “needs” it. Every time there is, say, a hole in the wall or an outlet that doesn’t work, my husband will try to fix it himself. “It’s amazing what you can learn on YouTube,” he’ll say. Granted, my husband isn’t lazy: The guy works upwards of 70 hours a week in the corporate world. But with little free time and often the wrong skill sets for certain fix-it jobs, he garners mixed results. Take the time when he found some loose tiles in our bathroom. “I can fix this in 10 minutes,” he said. Soon, I heard cursing from upstairs, followed by, “Honey, you better go pick up some new tiles, I have to re-do the entire floor.” That “10 minutes” turned into two long weeks. Once when he was installing insulation in the attic, he literally fell through the ceiling into our master bedroom. It rained sheetrock, but luckily our bed provided a soft landing. Then there’s the “gutter incident.” Let’s just say, after that, my husband gave up cleaning gutters by himself. He’s ambitious, I’ll give him that. But mostly what we’ve learned from his undertakings is that that some jobs are better left to the pros. Now when projects arise—even small ones—we let home-service professionals tackle them. No, I’m not talking about do-it-all general contractors (good luck
getting on their schedules!). Many home-repair companies focus on specific jobs, so you get an expert in whatever area you need, big or small. Take The Patch Boys, for instance. The company focuses solely on drywall repair. You call and a real live person answers the phone, a service person shows up and does the job on schedule. Franchisors are taking home-repair services to the next level, offering predictable, dependable service (when’s the last time you had that in a contractor?). With proven systems in place and scheduling handled by call centers, franchisees are free to focus on their businesses and the customer service they provide. Even better: The market offers many low-cost, home-based models, which makes it a great option for investors. They’re also terrific news for homeowners like me. I’m no longer at the mercy of over-extended contractors, who may or may not show up. My house gets repaired by skilled professionals, for reasonable prices. And best of all, I get my husband back on the weekends.
May 2018 23
COVER STORY
Heroes home-service
Home-service franchises offer feel-good opportunities that can improve—or even save—lives.
W
By Jill Abrahamsen
ho wouldn’t want to run a business where customers are happy—or even grateful—to see you? With home-service businesses, homeowners get a higher level of service. They feel more confident putting their homes in the hands of trusted brands rather than the unknown. As with homeowners, these businesses make sense for investors, too. Home-service franchises have low overhead, lots of flexibility, and recession-proof opportunities. Will homeowners ever stop needing landscapers, handymen, sprinkler services, window washers, and so on? Here, we look at some up-and-coming home-service brands that are disrupting the industry. While the services they offer may seem status quo, the perfected systems and franchised business models puts them way ahead of the competition. Best of all, they offer services that help people—from improving air quality, preventing fires, or simply freeing up valuable time. So put your cape on and get ready to enter a feel-good business that could turn you into a homeowner’s hero.
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Lincoln Prins
DRYER VENT SQUAD
“AN OUNCE OF PREVENTION IS WORTH A POUND OF CURE,” BEN FRANKLIN once said. And that famous quote is the premise behind the Dryer Vent Squad. “Simple maintenance can prevent devastating loss. With almost 16,000 fires each year, we are committed to helping reduce those numbers,” says President and Founder Lincoln Prins. “Our mission is to educate people and keep them safe.” Now offering franchise opportunities, Prins expects steady growth. “This is a needs-business, not a wants-business. Most homes have dryers, and they need to be cleaned. It’s recession proof.” Dryer fires happen every day, and the most common reason is the dust and lint that builds up in a dryer’s vent. “Our service cleans the dryer’s vent system, and removes lint build-up and clogs,” Prins says. “With regular maintenance, dryers last longer and run more efficiently, saving customers time and money,” says Prins. After serving in the U.S. Army as a medic, Prins gravitated towards work that helps people. So in doing the research to start his own business, he narrowed in on the home-services industry and saw a real need for dryer-vent cleaning. “This is a rewarding business. We’re providing a valuable service to the community, keeping people safe and saving them money. At the same time, it’s lucrative. It can be run from your home, has a quick start up, high margins, and low overhead. It’s a win-win,” he adds. New franchisees fly out to Cedar Rapids, Iowa for a week-long training program. They get hands-on experience working live jobs and learn everything they need to know to operate the business. “Training doesn’t end when the week is done. We’re still there to help them. We support our franchise partners for the long haul.” For more information, visit www.dryerventsquad.com.
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COVER STORY
Byron Schramm
MIDTOWN CHIMNEY SWEEPS
IF YOU WANT TO KNOW IF YOUR BUSINESS CAN BE FRANCHISED, TRY this experiment: Replicate the model in another location. At least, this is the advice Midtown Chimney Sweeps President Byron Schramm found years ago in a book about franchising. “The book said to put a pin on a map in a random location about 1,000 miles away from your existing business,” Schramm recalls. “If you can succeed in the random location, then you have something.” Schramm’s father built Midtown Chimney Sweeps back in 1979 in Southern California as a fireplace-installation company. Eventually, the service changed to chimney maintenance, and with Schramm at the helm, it began to grow. Naturally, Schramm wondered if he could duplicate his success in other areas. Intrigued by this book’s advice, Schramm put his pin on Evergreen, Colorado, almost exactly 1,000 miles from Southern California, and temporarily relocated his family. “My wife was a real trooper,” Schramm says. “We had a six-month-old baby at the time.” It didn’t take long to see that Midtown Chimney Sweeps had huge franchise potential. “We hit the ground running and quickly surpassed our sales back home in California,” Schramm says. He couldn’t quite figure out why the Evergreen location did so well, so quickly. His wife, Verity, offered one theory: “Well, Byron, now you are fishing where there are fish!” At 7,000 feet, Evergreen is cooler than Southern California, with many homes that have 26
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“Our vision is to be the world’s favorite and most ethical chimney-care provider.”
chimneys. They’re used longer and need to be cleaned more frequently. Schramm realized that Midtown Chimney Sweeps could skyrocket elsewhere. He was right. In 2014, he started franchising. “I sold my first few franchises for $1 each,” says Schramm. “Today, some of them produce close to $400,000 in annual sales.” What sets Midtown Chimney Sweeps apart? “We present ourselves to customers as the best and brightest. We train our technicians to be clean shaven, respectful, and responsive,” says Schramm. With a professional website, branding, and a call center that does all the scheduling, the company offers a lot of support. “Franchisees can focus on growing the business and we take care of the branding and calls.” Franchisees do not need to be chimney experts, but it’s helpful to have a hands-on mechanical inclination. “Owners need to be able to manage men in motion,” Schramm says. And while the brand has expanded to 33 locations that’s not what it’s about for Schramm. “We are a
revenue-centric company. We don’t focus on how many locations we have, but how much revenue we generate. We don’t have to sell more franchises to stay in business.” To help investors understand the company, Schramm offers an extensive discovery process. Potential franchisees are invited to fly out to Denver, meet the management team and get an overview of the business. They also get to work alongside technicians in the field. The adventure is capped off with a team dinner and a fly-fishing trip with a backdrop of the idyllic Rockies. “We treat franchisees like family and want to make sure they’re a good fit. Our priority is to make sure franchisees are successful. If something’s not working, we fix it.” Existing operators are successful, in many cases, seeing a 33-percent, year-over-year growth. In fact, many are coming back to purchase more territories. “It’s the ultimate validation for me as a franchisor,” says Schramm. For more information, call 844-SWEEP-NOW or visit, www.midtownsweeps.com
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COVER STORY
Ken
Ken and Ryan Parsons
Ryan
BROTHERS THAT JUST DO GUTTERS® IT WAS NEVER INTENDED TO BE A FAMILY BUSINESS. IN FACT, KEN PARSONS got a lot of grief from his family for “throwing his teaching degree down the gutter” and launching Waterfall Seamless Gutters, back in 1999. Offering a broader list of services back then, the original model was very much a work in progress. “We spent 10 years perfecting our business model and franchisees benefit from that,” says Ken. Growing up, the brothers would occasionally help their father with his contracting business, but eventually pursued different paths. Ken became a teacher and Ryan, a graphic designer. Just as many teachers seek side part-time jobs, Ken freelanced for a local gutter contractor and really liked the work. He eventually launched his own business and later enlisted Ryan. “Our skills definitely work well together. Ken is more of the visionary, and I am more of the detail guy,” says Ryan. “I took the marketing and branding side and ran with it.” The decision to change the name to Brothers that Just Do Gutters® was pivotal. “With such a memorable name and logo, business really started picking up.” With more and more jobs on the schedule, the pair realized gutter cleaning and gutter guard installation would be more lucrative. So they changed the business model, perfected their system, and worked out every kink. As they grew, they came up with a training system for their employees and began building a franchise model without even realizing it. “We overbuilt our foundation, and once we decided to franchise in 2015, we were able to go full force. For franchisees, this means a strong launch,” Ken says. “Once a franchise partner is open for business, we turn on their website and the leads just start coming in. Our call center does all the scheduling, and franchisees can focus on the business.” “We offer a quick start-up and low overhead. Our goal is to design each location to be big enough out of the gate to eventually become a multi-million-dollar territory,” Ken says. For more information, visit www.brothersfranchise.com.
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Jeff Konopack
DECK MEDIC
THE CHOICE TO WORK NINE MONTHS OUT OF THE YEAR AND STILL MAKE A full-time income is a no-brainer. And that’s just one reason Jeff Konopack teamed with founder Mike Nastepniak to help run Deck Medic back in 2008. Deck Medic had been restoring decks and outdoor surfaces since 1990. The booming business and great reputation wasn’t the only draw for Konopack, though. Low overhead and a flexible schedule also won him over. As the company grew, the pair wanted to scale the business and keep the same top-quality service. They began franchising and awarding territories in 2016. Now Vice President of Franchise Development, Konopack runs Deck Medic’s day-to-day operations, and he also owns the Cook County, Illinois, location. He built his territory into a huge operation with eight vans and ten employees. He knows potential franchisees can do the same. “This is a great investment that can grow at the pace the franchisee wants,” says Konopack. “Some investors want to be owner/operators, while others may want to hire managers and expand. Either model works very well.” Flexibility is attractive to potential franchisees, and it’s one of the perks Konopack enjoys most. “Don’t get me wrong, I work very hard during the peak season, but it’s nice to have the holidays off and take some time to vacation in the winter,” he says. “Franchisees can create their work schedules around their lives instead of the other way around. Want to go to your kid’s soccer game? Not a problem. Business won’t suffer the way it can with other franchises.” Deck Medic has its own line of proprietary cleaners, strippers, and 100-percent oil-based stain that can only be purchased by franchise owners. Customer service and their trademark Five-Step Wood Restoration Process sets Deck Medic apart. “We have beautiful, lasting results and customers keep coming back. We have a 90-percent retention rate—better than anyone else in the industry.” Franchisee satisfaction also contributes to Deck Medic’s success. “Once a week, I personally check in with every franchisee. We have monthly conference calls with every owner to share ideas,” says Konopack. “We are very protective of our name and image and want to grow the brand, but at a reasonable pace. Our franchise partners’ success is our success. We’re very much a family.” For more information, visit www.mydeckmedic.com or call 800.992.1202.
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COVER STORY
Michael Wagner
POOL SCOUTS
OWNING A POOL IS FUN—EXCEPT FOR THE NOT-SO-FUN PARTS like keeping the chemicals balanced, cleaning it, and dealing with the upkeep. Then of course, there’s closing the pool. If you do it the wrong way, you could cost yourself thousands of dollars. These are all reasons pool owners seek reliable pool services and stick with one company once they get it. But with so many small operators going in and out of business, it’s hard to find one who’s in for the long haul. “The market is really fragmented and pool owners aren’t always getting the best service. Franchising changes all that,” says Michael Wagner, President of Pool Scouts. “Customers reap the benefits of a reliable, professional service, while investors get the benefit of our marketing, call center, and proven systems. It’s a tremendous business opportunity. We’re professionalizing the pool-services industry.” For franchisees, depending on the location, Pool Scouts offers a great seasonal or year-round, home-based business, with a flexible model and repeat revenue. “We make sure potential franchisees are a good fit before awarding territories,” says Wagner. “They don’t need pool experience, but need to follow our system for success. We offer tremendous support and training. Pool Scouts is in a perfect position to raise the bar in the pool-service industry.” For more information, visit www.poolscoutsfranchise.com.
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May 2018 31
COVER STORY
Russ Weldon
GREEN HOME SOLUTIONS
POOR AIR QUALITY IS OFTEN AN INVISIBLE ENEMY IN A PLACE WHERE people should feel safest—home. The truth is residential air pollutants can wreak havoc on your health, and many times victims feel ill and don’t know why. Draperies and carpets can contain mold, airborne allergens, and off-gasses, which cause symptoms like headaches, fatigue, skin infections, asthma, and even neurological issues. Russ Weldon saw an opportunity to solve this problem and to create a lucrative business in the process. In 2012, after selling Wireless Zone, the wireless franchise he founded back in 1988, Weldon could have retired. But instead, in 2013, he launched Green Home Solutions, which uses plant-based enzymes to get rid of mold and odors. It has a residual ability and helps prevent regrowth. “I saw that I could create a better mousetrap than what the competition was offering,” Weldon says. “We are safer, less expensive, and more effective than the competition. We offer clean, green ways to eliminate the problem. Why wouldn’t customers choose us?” Weldon says. Weldon loves the franchise model and built his business with franchising in mind. “This is a low-cost opportunity that doesn’t require brick and mortar. It can be run out of your home initially and grow to a facility as business expands. Franchisees can partner with realtors, home inspectors, and house-flippers. Now even doctors are referring patients to us when they suspect poor air is the culprit,” Weldon adds. Green Home Solutions has grown to 200 units with 75 franchisee owners. “There has been a lot of internal growth with franchisees taking on new territories—a sign of good health for a franchisor.” For Weldon, the best part is that he’s making a difference. “It’s nice to be in a business where you are solving someone’s problems.” For more information, contact www.greenhomesolutions.com.
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COVER STORY
Russ Jundt
CONSERVA IRRIGATION RUSS JUNDT ALWAYS FOUND IT MADDENING TO SEE LAWN SPRINKLER systems running at full force during rainstorms. “I come from the land of 10,000 lakes. We love our water,” says the Minnesota native and founder Conserva Irrigation. “I worked in the irrigation space in the early 2000s and the whole industry seemed wasteful to me.” In 2010, an irrigation show opened Jundt’s eyes. He saw that “smart irrigation” was coming on the scene, and he wanted to be part of it. The efficient nozzles and technology used to adjust sprinkler-running times made sense to him. Jundt studied EPA best-management practices, talked to local business contractors, and in 2011 he launched the first Conserva Irrigation in Minneapolis. “If we could succeed in the cooler climate of the Twin Cities, we could be successful anywhere,” Jundt recalls. A huge fan of the franchise model, Jundt had been a long-time owner of a local Mosquito Squad business. He thought franchising would be a great way to scale irrigation services and pitched the idea to Outdoor Living Brands, which runs Mosquito Squad. They worked with Jundt as advisors through the process. The Minneapolis location did so well, they took it to the next level with pilot locations moving east and south. In 2017, Jundt’s relationship with Outdoor Living Brands was formalized, and the company started offering franchise opportunities. The brand now has 35 territories. Not just a residential service, Conserva Irrigation has national accounts with large companies like Target, and franchisees get to step right into those established contracts. They also have partnerships with TORO® and SiteOne™ Landscape Supply, which helps lower the cost of goods for franchisees. More benefits for franchisees include low overhead, quick start-up, and tons of support. But as Jundt says, “The best part is we’re able to make money by saving the Earth’s water.” For more information, visit www.irrigationfranchise.com.
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Hearth, Home, and Hired Help H
ome may be where the heart is, but it’s also a place that generates a regular honey-do-list. But, what if your honey can’t do? Doesn’t have the time to do? What if he’s physically unable—or mentally unwilling—to do? (Let’s face it, the “nine-to-five” is plenty of work and rarely “nine-to-five” anyway.) Heck, what if there is no “Honey”? Enter home-service franchises. More and more Americans are looking for help to maintain their homes. Baby boomers want to live in their homes for as long as possible and seek maintenance help to ensure they do so comfortably. According to Franchisegator.com, women comprise almost half the U.S. labor force. With two adults working outside most households, there’s little time for do-it-yourself home improvement, which means the need for home-service franchises is greater than ever. Fortunately, the options are endless. Home-service franchises include home cleaning, moving, home repair and maintenance, landscaping, painting and decorating, plumbing, renovation and restoration, and much more. The billion-dollar industry is a great investment for anyone looking to start his own business. According to Franchise Direct’s “2017 Home Services Franchise Industry Report,” the estimated annual revenue of handyman services, for example, is $5 billion, with an 8.1-percent annual growth rate. Painting and decorating services have an estimated annual revenue of $1 billion, with projected growth at 4.4-percent. Thinking of investing in a home-service franchise? Here, we explore a few categories and tell you what they do, how they’re doing, and what you can expect in the future—that is, besides a “Honey-do list” that actually gets done.
by Lisa Welko, Certified Franchise Executive
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Hearth, Home, and Hired Help Trending Home Service Franchises
» Building Inspection WHAT THEY DO: These experts examine buildings to determine the structural soundness. They also make sure buildings are in compliance with specifications, building codes, and other regulations. After buildings are inspected, reports are written for buyers or others involved in real estate transactions. INDUSTRY FORECAST: According to the market researchers at IBISWorld, this category will continue to grow through 2021. Increased existing home sales and other real estate transactions are expected to drive demand for inspection services. Revenue is projected to rise at an annualized rate of 1.4 percent to $3.7 billion.
WHAT THEY DO: If you don’t have time to power-wash the deck this spring, don’t sweat it. Exterior-cleaning franchises specialize in helping with outdoor home improvements. These experts will come in and tackle all kinds of jobs: window washing, power-washing, drain, duct, and gutter cleaning, pool maintenance, even parking lot and driveway washing. They work on residential and commercial buildings. INDUSTRY FORECAST: IBISWorld says that in the next five years, per capita disposable income is projected to grow gradually, especially among households earning more than $100,000 annually. This will boost demand for industry services.
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»
Exterior Cleaning
» Landscaping
WHAT THEY DO: Every homeowner needs someone to care for the yard, and that’s where these experts come in. Landscapers maintain yards by mowing lawns and keeping the grass green, but they also help with big outdoor projects like planting trees, shrubs, and creating gardens. INDUSTRY FORECAST: According to IBISWorld, industry revenue grew to $82.2 billion from 2012 to 2017. Similar trends are expected until 2022, as residential and non-residential construction begin to stabilize.
» Moving and Storage WHAT THEY DO: Moving and storage companies are extremely helpful with moving families and corporate relocations, and they are lifesavers in stressful times as well. INDUSTRY FORECAST: The moving and storage business includes approximately 8,000 companies and generates about $12 billion in combined revenue each year. IBISWorld says that rising disposable income, a more favorable housing market, and a drop in oil prices have benefited the industry, which is expected to grow in the next four years.
Listen to Lisa •
You don’t need to be “handy” to own or run a Handyman franchise. If you do want to be the technician and you want to hire someone to grow and market the business, though, make sure you speak to who you’re working with, so your goals align.
•
Research your market. You will find “mom and pops” in this space, but in my opinion, if you don’t see a large national presence, let’s talk about a franchise. Do those mom and pops have an optimized website? Someone to support their marketing efforts in social media, etc?
•
If you’re someone that is risk adverse and doesn’t want to drop 6 figures into a brick and mortar location, then home service businesses should be explored. If you trust yourself to manage operations and run a tight ship, these businesses are generally less expensive and resistant to market trends and fads, too. Lisa Welko helps aspiring business owners determine which specific franchise opportunities align with their strengths, goals, and values. For more information, visit www.integrityfranchisegroup.com
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Entrepreneurship
HOME Begins at
E
by Christopher Connor
ver feel like you start every day with a game plan on how to divide and conquer the long list of duties that comes with owning your home? You’re not alone. These days our lives are so busy that many people wake up to a staff: a nanny, maid,
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“The growth in home services franchises has opened doors to business ownership.” OWNING IT The growth in home services and home-service franchises has opened doors to business ownership. Technicians, who may have felt that working for someone else was as good as it’s going to get, finally have the opportunity to take control of their futures and build assets. Home-service franchise models vary in terms of value propositions, and it’s always important to know exactly what is being offered and with whom you’re getting into business. Don’t be afraid to think outside the box—these days, anything is possible. Home-service franchises that team with technology can be especially creative. No-H2O, for instance, is an Irish-based brand that has waterless car-washing—who would have thought!—brought to your home, business, or anywhere. Customers order the service HOME WORK through an Uber-like app: Request a car wash There are a wide range of home-service franchises out there, many of which offer a specialty and the app tells you who will be coming to handle the dirty work. service. Andy’s Sprinklers, for example, comes No-H2O franchisees benefit from the electo your house and provides sprinkler repair tronic platform, which handles accounting work or installation services. The first few and other functions, and makes the business franchisees who invested in Andy’s were techscalable and easy to manage. As a franchise nicians who knew the market and how to do owner, you get to stay focused on important the sprinkler work, but they had never owned a business. They were skilled at the actual service, things, like attracting new customers and growing the bottom line. Let the franchisor but previously lacked either the business acumen or the confidence to step out on their own. worry about the rest. No matter which home-service franchise Fortunately, Andy’s Sprinkler franchise system, much like Hambleton and Bloomin Blinds, you choose, one thing’s for sure: The categooffers franchisees tools, infrastructure, and sup- ry is seeing lots of growth and there are no signs of slowing down. After all, if your house port, so that green business owners are able to take the leap into entrepreneurship. Andy’s pro- is anything like mine, you’ll need help for just vides accounting support, appointment setting, about everything. insurance, administrative help, and other office functions that a new business owner might find For more information, contact Christopher Conner at Chris.Conner@FMSFranchise.com intimidating to manage and launch. landscaper, and contractor. It’s like home has turned into its own eco-system that requires constant attendants to keep up with a coming-and-going, dual-income family. The good news is that the more we need help at home, the more opportunity there is for new industry and businesses. And many businesses that provide services to homeowners are in the franchise market. Franchises like Bloomin Blinds, eMaids, Hambleton Handyman, Kitchens Redefined, and Andy’s Sprinklers provide professional, predictable, and accountable service to customers. They solve problems for franchisees, too. Most home-service businesses require a low initial investment, which makes business ownership a reality for a great number of entrepreneurs.
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FROM EXECUTIVE TO ENTREPRENEUR Why corporate skills transfer to franchising
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By Faizun Kamal
ears ago, careers were more of a straight-line path. Corporate America executives used to enjoy 30-year runs with the same company. They retired with pensions and gold watches. Well, those days are long gone. Career paths have turned into winding roads with unexpected twists and turns. In every industry, mid- to senior-level executives get laid off every couple
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“Compared to a corporate position, franchise ownership lets you call the shots.” years. Many are ready for a change but not sure what to do next. Franchise consultants work with many corporate executives to help determine if franchising is a viable option. Moving from executive to entrepreneur can seem foreign and scary, but believe it or not, there is a lot of overlap. Here we highlight a few initial hurdles and explain why they might not be as daunting as you think. SYSTEMS Every company has systems and processes and all employees—even high-ranked corporate executives—are expected to follow them. There is a chain of command and processes for submitting reports and expenses, as well as running meetings and completing projects. Business owners have the opposite experience—they are responsible for creating systems and processes for every aspect of their businesses. It’s exhilarating for some—not so much for others. A franchise can be the perfect compromise. You enjoy the independence, freedom, and profitability of entrepreneurship, but you get to take advantage of operating systems that have already been proven to work. RISKS Being an employee always seems like a safer option than being a business owner. But the truth is, there are risks on any job front. As an employee, the biggest risk is job security. Economic changes, industry disruptions, a dif-
ficult manager can all lead to job loss. Often, these factors are out of your control. Compared to a corporate position, franchise ownership lets you call the shots. It’s much less risky than a start-up business because a franchise already has a proven business model, significantly reducing your risk of failure. True, your risk in any business will never be zero, but is anything in life totally risk-free? SALES In corporate America, you don’t have to be in sales to sell. In fact, you have to sell your skills over and over again—at job interviews, as positions evolve, as companies merge, as new managers come in. Selling yourself is never-ending. Turns out, this skill transitions naturally to franchising because every franchise owner is ultimately a salesperson. You are responsible for marketing and generating new clients for your business—not merely focusing your time on what your business offers. As a franchise owner, you have to become comfortable with a variety of sales and business-generation techniques, including cold calling, referral marketing, and networking. But you’re not in it alone. Robust franchises provide helpful training before you open the doors to your business. Franchising may be very different than corporate America, but they do have a lot in common. Either can lead you to financial freedom, it just depends on how you want to get there.
Faizun Kamal is a nationally renowned public speaker and career strategist. As a franchise coach with The Franchise Consulting Company, Faizun helps people make the transition from employee to entrepreneur. Contact her at (443) 604-6276 or email Faizun@thefranchiseconsultingcompany.com
May 2018 45
Countdown to
Franchising
Four steps to launching into a franchise business By Nick Neonakis
B
uying a franchise is a significant undertaking. One fraught with emotion. It’s not always the thought of failure that makes it so—it’s the fear of the unknown. That pit in your stomach you get when you do something you’ve never done before. While no one can guarantee success, there are some ways to increase your chances of owning a franchise business you’ll be proud of. Here are a few common steps that successful franchisees have followed.
1. Know yourself. This is perhaps the most important key to success, and for some, the trickiest. It’s time to get introspective. Take stock of who you are, your strengths, and your goals. What are you trying to achieve in your business? Think about it, narrow your goals, then write them down. Put it into a business plan, and refer to it throughout the buying process.
2. See which franchises fit your plan. Now that you have a business plan, use it. Put your plan up against all the franchise companies you’re considering and see what fits your criteria. What are the closest matches? Verify your answers by talking to franchisees and learning from their experiences. Do your homework and find out about opportunities that you didn’t know existed. Mystery shop competitive businesses to see where they stack up against what you are looking at. Talk to the Chamber of Commerce and learn about the business climate in your area. Speak with the operations staff of potential franchise companies and continually revisit your business plan. Eventually, one or two ideas will stand above the rest.
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3. Go to work. That’s right, go work in a potential business. Follow an owner around for a day or two, and make sure that your perception of the business is borne out by reality. Try before you buy! Go live a day in the life of an operator before you actually make it your life.
4. Make an action plan. Similar to buying a house, there’s a legal and financial process when it comes to buying a franchise. You’ll need an attorney who specializes in franchise law to review the documents and clarify anything that you don’t understand. (Don’t know where to find one? The International Franchise Association can help.) You’re going to want to work with a qualified franchise attorney, someone who specializes in franchise law. Review all the documents with your attorney and learn about options to finance the business. Get several quotes for financing—remember, when banks compete, you win. When you are ready to go forward, do so with conviction! Remember, the life of your dreams is within your reach!
Nick Neonakis has spent almost 20 years in every aspect of franchising. He is the CEO of The Franchise Consulting Company, and is also the CEO of The Great American Franchise Expo. He has written several books on the topic of franchising including the bestseller, The Franchise MBA. Contact Neonakis at (800) 321-6072 or Nick@TheFranchiseConsultingCompany.com
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UNDERSTANDING THE FDD How the Franchise Disclosure Document Works
O
By Telanda Sidari
ne of the most important documents you will run into during a potential franchise purchase is the Franchise Disclosure Document, or as it’s commonly called, the FDD. Granted, the document can be daunting with a lot of legal jargon, but it’s also full of information that lets you know exactly what you’re buying into. In fact, the FDD is the best way to understand the full scope
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“The FDD is essentially
an open book on the business.”
of your business—and the key players involved with it. What exactly does this document contain? How can you use it to your benefit? Here’s an overview.
Speaking of finances, a key component of the FDD is Financial Performance. About 70 percent of franchisors will show financial performance representations, but how they show the information varies. Franchisors can’t provide more than HOW IT WORKS what’s already in the FDD, but they can speak to As you may know, the Federal Trade Commisyou about anything listed in the FDD. sion (FTC) oversees franchising guidelines. Back If you have questions, go beyond the franin 1978, the FTC instituted a rule that franchisors chisor. Franchisees can speak to you about how had to fully inform potential franchisees about much they make, and will let you know about the business they were buying into. The purpose, how the franchise system performs and also of course, was to protect potential franchise buy- what support is like. ers from sordid franchisor systems. The FDD is essentially an open book on the ALWAYS ENLIST AN ATTORNEY business. And though the documents vary in While the FDD may seem overwhelming, readquality, there are 23 points that every document ing and understanding it is an important step in must cover—from the background of the franchi- the franchise-purchasing process. If you undersor to hidden fees to bankruptcy to restrictions stand the document, you can make an informed and financial statements. decision about your franchise purchase. To enThe document is usually released at the sure that you and the franchisor are on the same start of a potential buyer’s research. This way page, hire a franchise attorney to help translate you have plenty of time to review, re-read, and the document. gather questions. If franchisors don’t release the The purpose of a franchise attorney is to help document at the start of your research, they are explain the document and let you know the ins required to provide the FDD at least 14 calendar and outs of the franchise business. However, days before a contract is signed or any payments the attorney isn’t there to change the document. are made. The document can arrive in print or Compare the FDD to a bank mortgage convia email. tract—the contract never changes, but you still Every year, franchise systems registered with have to understand what it says. the FTC are required to renew the document The FDD might not have all the answers with updated information and figures. A 2018 you’re looking for, but it’s an important part of FDD will show you how much it costs to invest your research. Take it seriously, understand it, into the system this year, and you’ll get financial always ask questions, and you’re off to a successreturns of locations from 2017. ful start in your franchise purchase. Telanda Sidari has 20 years of business experience with almost a decade in the franchising industry— from business ownership to sales. Ms. Sidari has first-hand experience in the emotional steps involved in buying a business. She helps clients navigate the process. For more information, email her at Telanda@TheFranchiseConsultingCompany.com
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Arrangement The Perfect
S
By Susan Scotts, Alternative Career Coach
ELECTING THE RIGHT FRANCHISE IS IMPORTANT. BUT IT’S JUST AS
important to select the best franchise ownership arrangement. You can start by understanding your options—and the responsibilities that come with each one. We’ve outlined the basics here. Once you align your background with a franchise—and an ownership arrangement—you’re well on your way to success.
Single-Unit Franchises What it Means: Single-unit franchising is the simplest ownership arrangement. Here, a franchisee gets a single franchise license that enables her to operate one business location. It’s a great way to learn the system before making more purchases. Your Territory: A franchisee may be granted a small radius of exclusive territory —a retail store, for example, may have a radius of two to three miles around its location. In other cases, licenses are non-exclusive but the sky’s the limit on where you can set up shop. Your Role: This kind of ownership is great if you’re a hands-on manager, because single-unit franchisees are usually very involved with their franchises. Even semiabsentee owners participate in the day-to-day operations. How Much? Plan on $25,000-$60,000 initial out-of-pocket investment with a total investment of $50,000 and up.
Multi-Unit Franchises What it Means: Multi-unit franchises are comparable to single-unit franchises, but instead the franchisee acquires more than one unit, sometimes at reduced franchise fees. If you’re a franchisee who wants to expand quickly, this could be for you. Your Territory: Generally, the territory varies depending on the franchise. A franchisee might choose to have one unit in one section of town with another unit in another section of town a few miles away. Or, she may have an additional franchise in another county or state.
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Multi-Unit Franchises Your Role: Though you have more units, typically you’d be less involved in the day-to-day operations. But you will have to hire managers for each unit to provide structure and supervision. If many units are open, you may need to add additional administrative staff and training. How Much? Figure $50,000 to $70,000 or more initial out-of-pocket capital to take care of the initial franchise fees. The rest of the investment is usually financed when each unit opens.
Area Development Franchises What it Means: If you plan to open a bunch of franchises in a particular area you might sign on for an area development franchise contract. As a franchisee, you’d get the rights to open and operate a number of individual franchises in a designated territory or area. Your Territory: You get an exclusive geographic territory as long as you adhere to the opening schedule. Territories can range from a small city to parts of—or all of—a larger city or designated area. Your Role: You’ll be involved in the initial stages of the first location to make sure it’s successful. Once several locations are open, you’ll need to hire managers to oversee those units. How Much? Plan at least $60,000-$120,000 initially to secure the area and pay all franchise fees. Then plan on additional start-up capital. You will need to be able to finance the rest of the start-up costs for each location as it opens.
Master Franchises What it Means: Sometimes dubbed regional developers, master franchisees pay a franchisor a significant initial fee for the rights to develop a whole territory. Franchisees who buy into the territory pay the master franchisee initial fees and royalty fees. In fact, this is the only franchisee who earns royalties instead of paying them. Your Territory: Usually a large metropolitan area, a state, or even several states or a country. It is generally an exclusive area and will remain exclusive as long as the master franchisee meets the development schedule. Your Role: Masters are responsible for recruiting individual franchisees and providing all the training and support they need, both initially and on-going. The master franchisee will sometimes set up and operate at least one unit, enlisting a manager to manage it while working on selling other “sub-franchises.” How Much? The initial costs are more, but so is the earning potential. Figure $100,000 to $250,000 or more to acquire the territory and for the initial liquid capital to start the area. Susan Scotts has more than 25 years of experience in the franchising industry. She helps her clients realize their goals of self-sufficiency through business ownership. For more information, visit www.sscotts.esourcecoach.com
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in·ter·view
\�in-tər- vyü \ � noun
1. A Q&A session with an industry expert 2. Nick Neonakis on franchising
Nick Neonakis has spent almost 20 years in every aspect of franchising. He is the CEO of The Franchise Consulting Company, with almost 100 consultants across the U.S. He is also the CEO of The Great American Franchise Expo, the only VR-enabled franchise trade show in the world. He has written several books on the topic of franchising including the bestseller, The Franchise MBA. His goal is to educate others to see if franchise ownership is right for them. Contact Neonakis at (800) 321-6072 or Nick@TheFranchiseConsultingCompany.com
Q
What’s the best piece of advice you can give a potential franchisee?
A
Educate yourself. Franchising isn’t for everybody so you need to figure out what’s in it for you. Write a business plan. Articulate your goals. See if franchisees in potential businesses are achieving goals that are important to you. Look at other franchises in the system as case studies; see what’s working and what’s not.
QA
What makes a good franchise brand viable? I think a good brand solves a problem for consumers on a local level. Believe it or not, you can’t do everything online. There are a lot of food franchises, for instance, because if you’re hungry you’re going to eat in town. There are a lot of hotel franchises because when you need a place to stay, you need a place to stay. If your hair needs a trim, you’ll get it cut. If your car needs fixing, you’ll fix it. There are many businesses that have to be conducted locally, and franchising works well when it provides a necessary product or service to a local market. Still, a business needs to win over customers. If the business isn’t performing to a certain standard, then competition will replace it. Look at what happened to Toys R Us recently. Would you want to be a retail business selling a commodity product that Amazon can sell more efficiently than you?
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Thinking about buying a franchise? Call us rst. “Just like a realtor can help you nd a home, the experts at The Franchise Consulting Company can help you nd and understand your franchise options.”
WHAT WE DO We help you identify, investigate and get educated about franchise businesses. Like a realtor, our services are free of charge to you as our fees are paid by the seller. MARKET LEADER The Franchise Consulting Company is the market leader for entrepreneurs structuring a comprehensive investigation to analyze the franchise options available to them. EXPERIENCE With over 2000 years of collective experience helping individuals purchase, operate and exit franchise businesses, we invite you to leverage our knowledge of franchising. FREE OF CHARGE If you are thinking about owning a franchise, reach out to us and we will connect you with one of our 100+ local consultants across the USA. Free of charge. SPECIAL OFFER Reference this ad to your consultant and receive a FREE copy of The Franchise MBA - the #1 Bestseller Refe and Amazon’s highest reviewed book on franchising.
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with Nick Neonakis (continued)
Q
What common pitfalls do people face when buying franchises?
QA
A
They let the financial returns of some franchisees dictate their future. Just because somebody is doing well with a franchise doesn’t mean that you will, too. (And vice versa.) Do your homework. Learn about the competition in your market. Mystery shop at competitors. Spend time with multiple franchisees and see what they do on a daily basis to drive results. Consider your strengths. Will you be able to deploy your talents and achieve your goals? If you don’t like the business concept, you probably want to move on. If you’re going to own a business, you need to love it or it will just be another job.
Why is it important to attend trade shows? It’s a good opportunity to meet with a number of people in an efficient manner. Ask franchisors tough questions and watch their body language. How many franchisees do they have? What makes them successful? What is a person’s background? You know why you want to own a business and what it needs to do for you. Talk to as many people as you can.
Q
How do you view the future of franchising?
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A
Franchising is in the early innings. With the right people involved, franchising can be a win-win proposition: Somebody has figured out a way to make money, and he will sell you that system. Franchising gives you the chance to be part of a large buying group that is jointly investing in the tools you need to run your business. The efficiencies should be more than if you were doing it on your own. The downside is that you have to follow someone else’s rules and that’s not always palatable to entrepreneurs. The most successful franchisees have a very clear vision of their goals and what tools they need from the franchisor to accomplish them.
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THE #1 BEST SELLER
HIGHEST REVIEWED FRANCHISE BOOK ON AMAZON
“Smart, definitive and fun to read.” - Tucker Carlson “Consume this book!” - Richard Boyatzis “A powerful book.” - Richard Belzer Thinking about buying a franchise? This should be your first stop. Get educated.
This comprehensively researched and deftly written franchise guide brings together experience and fact to give you the tools you need to understand which franchise is right for you. With insights from respected franchise leaders and a thorough knowledge of franchising, this book will help you understand and master the 4 Critical Steps to finding the Ideal Franchise.
www.TheFranchiseMBA.com
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spot·light
\�spät-�līt \ noun
1. Trending franchise businesses you want to know about 2. A great place to show off your franchise
Snapology® WE GET THE LINT OUT
Deck Medic® Since 1990, Deck Medic has established itself as the number one outdoor wood restoration company in the Chicagoland area. Deck Medic® has its own line of proprietary cleaners, strippers, and 100-percent oil-based stain that can only be purchased by franchise owners. Excellent customer service and the trademark Five-Step Wood Restoration Process sets Deck Medic apart. For more information, visit www.mydeckmedic.com
Looking for a homebased franchise with a low investment and high return? Snapology® provides the tools to operate and manage a thriving business. Based on collaborative principles, Snapology® has a flexible model that allows business to grow while incorporating your goals. Snapology® is a partner for STEAM programs, offering fun, hands-on learning classes in schools, community centers, and homes. For more information, visit www.snapology.com.
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Dryer Vent Squad®
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®
Dryer Vent Squad® provides a valuable, inexpensive service to homeowners that saves time, money—and could potentially save homes and lives. Since approximately 80 percent of all U.S. households have a clothes dryer, there is a huge base of potential customers. Dryer vents need to be cleaned and maintained on a regular basis. Dryer Vent Squad® takes away the worry and lets families reclaim time and money. For more information, visit www.dryerventsquad.com
I Know Science® The Patch Boys®
Midtown Chimney Sweeps® The hearth industry is one of the fastest growing franchise opportunities in the United States. By investing in Midtown Chimney Sweeps®, you are not only purchasing a proven business model and marketing system, you are ensuring that you get and keep customers. The hearth industry is currently worth more than $2 billion, with 52 percent of all U.S. households having at least one fireplace. Midtown Chimney Sweeps® is the first chimney sweeping franchise in the U.S. to meet that demand. For more information, please call 844-SWEEP-NOW or visit our website, www.midtownsweeps.com
®
Want to run a homebased business with low overhead and high profit margins? Check out The Patch Boys®. America’s most trusted drywall-repair company, The Patch Boys® takes care of damaged drywall caused by clumsy accidents or water damage. These jobs are usually too small for contractors, and most homeowners don’t have the time or skill to take care of drywall repairs themselves. When you join The Patch Boys® family, you become a part of an entrepreneurial community that works together to advance the brand. For more information, call 844-99-PATCH, or visit www.thepatchboys.com
Exploring Today… Innovating Tomorrow! I Know Science® STEM Center and Toy Store is indispensable for families looking for top-notch experiences, offering year-round, quality STEM programs, cutting-edge toys and entertainment. From birthday parties to camps, after school programs to purchasing kids’ favorite toys, customers love a business they trust. The IKS business model is innovative and leading-edge, unique in its delivery, and profitable. As an IKS franchisee, you are connected to a network of resources including ongoing training, marketing support, toy inventory, proven curriculums, exclusive territories, and more. For more information, visit www.iknowscience.com
®
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last word
\ last \ \ wərd \ noun
1. Great advice for any new business 2. How FASTSIGNS® blows the competition away
Signs of a stellar business How to stay on top of a $29 billion industry 1. Focus on the customer: Exceptional customer service and high-quality products have earned FASTSIGNS® a loyal base of business clients and an excellent reputation. It’s no surprise there are more than 675 locations worldwide. The company has been ranked #1 Franchise in its category in 2017 and 2018 by Entrepreneur Magazine. 2. Stay ahead of technology: By offering custom applications for end users and new, sophisticated products such as digital signage, ceiling tiles, and imaged glass, franchisees are in the perfect position to achieve long-term success. 3. Be committed to franchisee success: With more than 120 staffers dedicated to supporting the approximately 650 franchise owners, franchisees always know where to go for help. The company also offers a mentoring program and continuous training. 4. Invest in advertising: With a $10 million dollar national ad campaign, FASTSIGNS® can be seen on CNN, HGTV, and Fox News, driving leads to local franchisees. 5. Take care of veterans: FASTSIGNS® attracts veterans by offering 50 percent off the franchise fee and reduced royalties for the first year. 6. Serve the community: FASTSIGNS® franchisees participate in philanthropic efforts, including providing free or discounted signs and graphics, volunteering time, and hosting events. The company recognizes these efforts through the FASTSIGNS® CARES program. For more information, visit www.fastsigns.com 58
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