The primary intention of the franchise business model, as it became popular in the 1960's and '70's, was to provide business knowledge and the systems that had been proven effective in a particular industry. Industry-specific business fundamentals can provide a "short-cut" toward success and save a person from committing devastating mistakes. Also remaining high on the list is providing the things that help build a more saleable company, looking ahead to retirement. Let's jump forward 10-25 years when it's time to sell your next business.
What is the buyer going to ask about? Your logo? No. Your sales? Sure. But the guaranteed line of questioning will include "where do your sales come from?" and "Why and how is your company achieving its profitability and organizational continuity?" You'll have to point out the highlights of your executiveship, efficiency systems, and management skills; all VERY important in building a restoration business.
Small business buyers look for a company they believe can continue to go and grow after they buy it. They will look at your franchise and expect to see REAL business systems, not just a nice logo, not just good sales or a really nice owner. They will expect you to point out the management, marketing and technical knowledge and support that came from your franchisor (whom they will soon rely on if they buy your company). Good systems and your developed industry will give you a HUGE advantage when it's time to sell. It won't hurt that you'll still be happy you chose the franchise you did (hint: STOP).
Don't let a franchise off the hook with something as hollow as "we have systems." Investigate. Get deeper. Expect details. Ask the franchisees. Be careful of brands that claim to be a "household word." This does not necessarily mean it's a good household word.
Your buyer understands that "Bill's Restoration" is driven by Bill. They know that Bill's leaving may take much of the company's momentum away. This is why a systematic, well-supported franchise will always be easier to sell for more money than its shallow, systems-weak counterpart; FRANCHISE OR NOT!
This brings us back to today, before you have chosen nor built your highly saleable company. Shop carefully. Listen for words such as industry knowledge, systems, organizational and management coaching. Brands that "bring the beef" are going to serve you better as a franchise owner than those that talk about shallow features like multiple locations and "brand." These won't serve your executive development in your new industry.
Let's face it, many brands in the franchise arena have monstrous machines of image and branding... all aimed to sell franchises. Many of these brands, quite frankly, aren't worth the ink that prints their logo.
As a franchise shopper, it is your job to choose wisely. Avoid hype. You should trust only your own research. Be as logical and simple in your thinking as you can be. Be careful to avoid any "givens" you may think you know about business or franchising. Focus away from fluff, smoke and mirrors.
In building a quality company for now (in preparation for a "someday" sale), please research Service Team of Professionals with diligence. You will love our transparency, and most of all, the "beef."
Service-based, locally owned franchises have competitive benefits that many other businesses simply do not have. As an owner, you’re able to be your own boss, ...Read More