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Franchising Advice from Local Executives

August 2015

Franchising is an appealing business option for those who want to be their own boss, yet have a support system in place and have certain elements, such as marketing, logo creation, etc., handled at the corporate level. For those who are interested in buying a franchise or simply readers who are intrigued by how franchises impact the local economy, we enlisted three well-known, successful business leaders involved in the industry to offer their insight on this burgeoning industry.

David H. Mattson, III is Chief Executive Officer and President of Sandler Training, a global training organization with a local focus and over four decades of experience successfully partnering with Fortune 1000 companies in a variety of industries to help them improve the effectiveness and efficiency of their sales and management processes. Mattson is a best-selling author, sales and management thought leader, keynote speaker and leader for sales training seminars around the world. As CEO and President of Sandler Training, Mattson oversees the corporate direction and strategy for the company’s global operations including sales, marketing, consulting, alliances and support.

David H. Mattson, III is Chief Executive Officer and President of Sandler Training, a global training organization with a local focus and over four decades of experience successfully partnering with Fortune 1000 companies in a variety of industries to help them improve the effectiveness and efficiency of their sales and management processes. Mattson is a best-selling author, sales and management thought leader, keynote speaker and leader for sales training seminars around the world. As CEO and President of Sandler Training, Mattson oversees the corporate direction and strategy for the company’s global operations including sales, marketing, consulting, alliances and support.

How Do You Know If Franchising is Right for You?
David H. Mattson, III, CEO and President, Sandler Training

I95 BUSINESS: What advice do you have for those individuals considering buying a franchise? How do you know what type of business is right for you?

David Mattson: There are thousands of franchises available. I think you need to sit back and ask, “What would I like to do? Which industry? Do I want a retail or a B2B concept?” Some say that you can buy a franchise in any industry, but if you plan on working in the business, you should pick something that you love and something that you’re good at. And you don’t have to buy a franchise to learn the industry. It’s better to capitalize on your current strengths and talents through a franchise system.

I95: What can you expect by being your own boss?

Mattson: Well, entrepreneurship is, of course, the ultimate for those who want to control their own destiny, have the ability to spend more time with their family, and have no limits placed on your income capabilities. But just because you’re franchising, doesn’t necessarily mean that you’ll have instant success. You still need to work hard and always look over your shoulder, as if you need to do that one last thing each and every day that will help you become successful. You need personal discipline to be a business owner, so make sure you’re 100 percent committed. To identify resources for researching franchises, do an online search and look for a variety of companies, including brokers.

I95: How does one weigh the different opportunities – licensing versus franchising, franchising resale, multi-unit franchising?

Mattson: I think if you don’t have an existing business, franchising is the safest and easiest way to go, as it has a much higher rate of success than other options. Of course, you’ll be required to follow the business model and rules of that particular franchise. If, however, you own an existing business and you want to add an additional product line, licensing probably would make sense.

As far as franchise resales, you have to ask yourself: “Is the individual selling the franchise because it may not have been a fit or perhaps he/she wants to retire? Or does the franchise business as a whole have a systemic issue?” Many companies take up to 10 years to really master the franchising process. So be careful that you’re not “one of the test cases.” You’ll also have to decide whether you need multi-unit franchises. I would suggest that you buy a single franchise with the options to buy others and that way you can make the decision in a very safe, conservative manner as to whether additional franchises will make sense for you.

I95: What are the advantages of the franchise model, the support that you receive and maintaining control?

Mattson: There are a number of different franchise models. There is a true franchise, where you have to do exactly what they say and follow established rules. And then there are business concept franchises, which have more flexibility for the individual to add. At Sandler, we allow the franchisee a lot of flexibility, while at the same time using our materials.
With the franchising model, you’re basically using the success, the history and the brand of the franchise model. But you still need to invest sweat equity – the hard work, dedication and the ability to continually take that next step. While franchising, by no means, guarantees instant success, it still offers a higher probability of success than opening your own business.

I95: For existing business owners, how do you know if your business is right to become a franchise?

Mattson: The first thing to decide is do you really want to become a franchise? Although franchising seems like an easy way to increase your channel or your exposure, you’ll need at least $500,000 to start a franchise organization. You will then be leaving the business that you love. Instead of the managing the day-to-day operations of the business you grew, you will instead be in the business of supporting those who have become franchisees. If you decide that you think your company fits the franchise model, there are plenty of franchise consultants and franchise attorneys that will help you on that path. If you decide to become a franchise organization, you will have a legal obligation to the states to ensure that you’re doing the right thing as well as shouldering the ethical responsibility for those who invest their life savings into your franchise. Again, I would suggest that you research all the steps you will need to take to become a franchise before considering that transition.

I95: For existing franchisees, any advice on how to become more successful?

Mattson: I would say rely on your franchisor for the business model, and on yourself to sell. The bottom line is, though, that you have to go out and sell. Regardless of the franchise that you own, the name of the game is to drive traffic. Whether it’s a retail outlet and/or a business franchise – you need clients. Accept the responsibility and the accountability for taking the actions necessary to drive revenue to your existing franchise. This is solely your responsibility, as you cannot rely on franchisor to do that.

Ray Palmer became president of the Alliance Franchise Brands Sign & Graphics Division in June 2012, which consists of Image360, Signs Now and Signs By Tomorrow franchise members. Palmer provides executive oversight for all three brands, which share very similar business models, though they remain separate companies with separate support staffs and programs. As president, CEO and co-founder of Palmer Vohrer Enterprises, Palmer has been involved with Signs By Tomorrow for 10 years as a multi-unit franchisee in addition to his executive leadership role.

Ray Palmer became president of the Alliance Franchise Brands Sign & Graphics Division in June 2012, which consists of Image360, Signs Now and Signs By Tomorrow franchise members. Palmer provides executive oversight for all three brands, which share very similar business models, though they remain separate companies with separate support staffs and programs. As president, CEO and co-founder of Palmer Vohrer Enterprises, Palmer has been involved with Signs By Tomorrow for 10 years as a multi-unit franchisee in addition to his executive leadership role.

What Advantages Do Franchises Provide?
Ramon L. Palmer, President, Alliance Franchise Brands Sign & Graphics Division

I95 BUSINESS: What advice do you have for those individuals considering buying a franchise? How do you know what type of business is right for you?

Ray Palmer: With over 3,000 different franchise concepts, you really must do your homework. Perform due diligence and be sure to match a concept to your true strengths and talents. Importantly, find things you can be authentically passionate about. Purchasing a franchise, or any business, is not about buying a job; it’s about building something of value, a business that in turn can be sold. Make sure you have plenty of working capital to get through the initial start-up period. There are numerous online resources and directories to help match your distinct personal talent with franchise concepts. Franchise brokers can also be a resource to help people look for a match but be careful as they all have preferred franchise groups to which they guide clients.

I95: How does one weigh the different opportunities – licensing versus franchising, franchising resale, multi-unit franchising?

Palmer: You must look at the concept and do your research – some concepts are perfect for multi-unit ownership while others are not. Each independent franchise provides unique benefits for ownership, and not just purely financial benefits. Quality of life is a key component to a match. When entering a new business, always be thinking about an exit strategy, as business valuation varies greatly depending upon the industry and concept. I always advise our franchises members to treat their franchise business as an asset of which to drive an increase in value.

I95: What are the advantages of the franchise model, the support that you receive and maintaining control?

Palmer: Most start-up businesses face an extremely high failure rate, so franchising only makes sense. Franchise concepts are proven models that increase the rate of success for new entrepreneurs. You will have a support network from other franchise members, in tandem with support from the home office franchisor. The level of control varies from concept to concept, but in most cases your franchise is ultimately your business to run. Typical support areas include product sourcing, marketing, raw good provisioning, business support, lease negotiations, site selections, vendor negotiations, and operation processes.

I95: For existing business owners, how do you know if your business is ripe to become a franchise?

Palmer: If you have created a business process that is easily replicated and communicated, you may be ready to consider franchising. Make sure that your business model provides the financial returns that will generate interest in a heavily saturated market. Also, successfully running multiple locations is a key component to consider before heading in this direction. Launching a franchise is capital intensive and one that should not be entered into light-heartedly.

I95: For existing franchisees: any advice on how to be more successful?

Palmer: Franchising is a unique business partnership in the effect that the success of the franchisor is directly related to the success of its franchisees. Work with your franchisor and follow the processes that have been proven. Please be cognizant of your financial performance. Compare your performance to others in the network, enabling yourself to make informed business decisions.

Victor Brick is the co-founder of “Brick Bodies Fitness Services, Inc.,” which owns and operates a chain of Brick Bodies co-ed and “Lynne Brick’s” women-only health clubs in the Greater Baltimore area. He is also the CEO of Planet Fitness Growth Partners, a budget health club chain in Maryland, Tennessee and Florida. With 45 locations and over 300,000 members between the three brands, Victor owns the largest health club chain in Maryland.

Victor Brick is the co-founder of “Brick Bodies Fitness Services, Inc.,” which owns and operates a chain of Brick Bodies co-ed and “Lynne Brick’s” women-only health clubs in the Greater Baltimore area. He is also the CEO of Planet Fitness Growth Partners, a budget health club chain in Maryland, Tennessee and Florida. With 45 locations and over 300,000 members between the three brands, Victor owns the largest health club chain in Maryland.

Hard Work Pays Off for Franchisors
Victor Brick, Co-Founder, Brick Bodies Fitness Services

I95 BUSINESS: How do you know what type of business is right for you?

Victor Brick: Determine where your interests lie. What do you like doing? What would you enjoy doing if you had to do it the rest of your life? What did you gravitate to as a kid? Source franchises yourself. The best advice I can give is talk to as many franchisees as possible. Only get involved with a franchise where ALL the franchisees are happy AND making money.

I95: What can you expect by being your own boss?

Brick: You will work harder for yourself than for anyone else. There will be more pressure than you can ever imagine. There
will never be enough time. But, if you are a true entrepreneur, you will get a lot of satisfaction from it and you will look forward to every day.

I95: Any financial considerations to consider?

Brick: Income will always be half what you expect. Expenses double. Have financial reserves, line up capital in advance and have access to twice what you think you need. Franchises are no different than any business; lack of capital usually is the cause of failure.

I95: How does one weigh the different opportunities – licensing versus franchising; franchise resale, multi-unit franchise?

Brick: Never get into a business you wouldn’t enjoy running for a long time and that you can’t make money with over the long haul. Make sure there is plenty of upside growth potential and that you are not limited in the number of units you can acquire if you so desire.

I95: What are the advantages of the franchise model?

Brick: It’s only an advantage if the franchise has its act together and is world-class. There should be marketing support, a proven business model, volume buying discounts, financial budget projections/requirements and even a possible buyer in the master franchisor. You will give up some control, so you must be sure the franchisor’s business philosophy, principles and values matches yours.

I95: For existing business owners, how do you know if your business is ripe to become a franchise?

Brick: Have you proven your business model over multiple locations? Is it so easy that a caveman can do it? Basically, is it scalable? And can a franchisee pay you your franchise fee and still make good money?

I95: For existing franchisees: any advice on how to be more successful?

Brick: If you are in the right franchise, I would encourage you to follow the model. Don’t try to re-invent the wheel. Be true to the brand. Then, I would give the same advice I would give any business owner, and that would be “be the best.” Quality always wins. How can you be the best? Hire the best people. It takes a team to launch a dream. Train well and learn from others. Acquire best practices from other franchisees and be WHIM: World Class. Humorous. Inspirational. Memorable. I95

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