Q&A with Carolyn
What are the current trends in franchising?
According to FranData, 141 new franchise systems were introduced in the first two quarters of 2005 and another 173 new systems in the third quarter alone! Of those 314 new franchise concepts that have been introduced this year - the top 3 sub-sectors were sub shops (9), children's educational programs (6) and commercial / residential cleaning (6).
What is the "hot" franchise?
Subway has been at the top of the Franchise 500 list for over ten years. That could be considered hot, right? Well, if you are seeking that sort of lifestyle, there's no guarantee that you'd get in on the action.
According to Subway's Director of Development, Subway had 148,000 franchise inquiries in 2003. They awarded 4,363 franchises (3% of inquiries). Of those franchises awarded, only 1,200 went to new franchisees (less than 1% of the inquiries).
What's hot for one person doesn't necessarily mean it's hot for the next person. So my advice is to start by defining your goals, needs and expectations and then investigate business models that suit those objectives.
Don't I need a lot of money to buy a franchise?
Franchises that require brick-and-mortar, specialized equipment or major assets such as a fleet of vehicles do run in the six-figure range. However, there are many franchise opportunities that can be purchased for $50,000 to $100,000.
It's also important to know that you might only need to come up with the cash for 20-30% of your total investment if you qualify for financing.
Why should I pay royalties?
As a franchisee myself, I view my franchisor as my R&D department in addition to serving as my support system. If I had to keep my website updated, stay on top of franchise developments, create marketing materials and handle all of the other things required to run my business - I'd never have time to sleep!
What if I don't want the overhead associated with a retail franchise?
Not all franchises are storefronts. Many franchisors are offering products and/or services that are not as sensitive to location, such as business-to-business, mobile and in-home service.
For some examples, visit http://carolyne-sourcecoach.blogspot.com and check out my client stories about Arends, Cooper, Woodard and Kohorst.
What franchises do you sell?
None! I simply provide options based on my client's goals and then guide them through the process of evaluating those options. It's up to the franchisor representatives to do the selling.
How are you different than a franchise broker?
Franchise and business brokers represent the sellers. I am an advocate for the buyer's interests.
According to FranData, 141 new franchise systems were introduced in the first two quarters of 2005 and another 173 new systems in the third quarter alone! Of those 314 new franchise concepts that have been introduced this year - the top 3 sub-sectors were sub shops (9), children's educational programs (6) and commercial / residential cleaning (6).
What is the "hot" franchise?
Subway has been at the top of the Franchise 500 list for over ten years. That could be considered hot, right? Well, if you are seeking that sort of lifestyle, there's no guarantee that you'd get in on the action.
According to Subway's Director of Development, Subway had 148,000 franchise inquiries in 2003. They awarded 4,363 franchises (3% of inquiries). Of those franchises awarded, only 1,200 went to new franchisees (less than 1% of the inquiries).
What's hot for one person doesn't necessarily mean it's hot for the next person. So my advice is to start by defining your goals, needs and expectations and then investigate business models that suit those objectives.
Don't I need a lot of money to buy a franchise?
Franchises that require brick-and-mortar, specialized equipment or major assets such as a fleet of vehicles do run in the six-figure range. However, there are many franchise opportunities that can be purchased for $50,000 to $100,000.
It's also important to know that you might only need to come up with the cash for 20-30% of your total investment if you qualify for financing.
Why should I pay royalties?
As a franchisee myself, I view my franchisor as my R&D department in addition to serving as my support system. If I had to keep my website updated, stay on top of franchise developments, create marketing materials and handle all of the other things required to run my business - I'd never have time to sleep!
What if I don't want the overhead associated with a retail franchise?
Not all franchises are storefronts. Many franchisors are offering products and/or services that are not as sensitive to location, such as business-to-business, mobile and in-home service.
For some examples, visit http://carolyne-sourcecoach.blogspot.com and check out my client stories about Arends, Cooper, Woodard and Kohorst.
What franchises do you sell?
None! I simply provide options based on my client's goals and then guide them through the process of evaluating those options. It's up to the franchisor representatives to do the selling.
How are you different than a franchise broker?
Franchise and business brokers represent the sellers. I am an advocate for the buyer's interests.
posted by Carolyn Herfurth, The Entrepreneur's Source at Monday, December 19, 2005
