As this is my first Blog post, let me introduce myself. My name is Steve Cox. I am a franchise owner with i9 Sports where I am also in charge of developing new franchises. This Blog is intended to provide perspective on franchise ownership and what to look for and look out for when buying a franchise. If you are considering becoming a franchisee of any franchise system, I hope this Blog adds value to your search.
One of the challenges when buying an franchise is evaluating the on-going fees charged by franchisors versus the services the franchisor provides. All franchisors require a royalty payment, most require a Brand Fund contribution, and many will have fees for ancillary services. These fees will vary widely even between franchisors within the same industry. What value will you receive for these fees?
When buying a franchise, you are buying a system for doing business. Not all systems are created equal. The key is NOT to make a snap decision based on how high or low the fees are. Instead you need to dig and do some research to determine if you will get what you pay for.
Higher fees could mean that the franchisor is providing a level of service that allows its franchisees to succeed faster, succeed at a higher rate, and garner higher profit margins. Or it may mean it is simply over-charging its franchisees. As in anything, do your homework. In this first Blog, I will tackle marketing support and buying a franchise. In future posts I will help you think through other important areas you’ll want to consider when buying a franchise. So, when it comes to marketing support, here are some key questions for you:
Key Questions to Ask About Marketing Support and Buying a Franchise
- Local Marketing – What specific marketing tools are available for local marketing? What is the local marketing plan? Is that plan detailed and step by step? How has it evolved? What are the future plans? Who will support you? What initial and on-going training is offered? What is being done with Social Media? What about Search Engine Marketing? Are the people in charge in tune with marketing in a connected world?
- National Brand Fund – Where do National Brand Fund dollars go? Who controls the Brand Fund spend? What are the future plans? What is the breakdown on Brand Fund spending? Does the National Marketing tie in with the local marketing plan?
- Sales – If the concept involves telephone or in person sales, what is the selling process? What scripts are available for each phase of the sales cycle? What written follow up processes and systems are in place? What training is offered? Who is doing the training? Is she qualified? How? What CRM system is used? Why? Am I trained on it? How?
Without customers you have no business, so you should NEVER consider buying a franchise from a company without great answers to the questions above. The franchisor’s staff are the experts and you are not, so no matter what your own marketing/sales experience is, you need their training and guidance. If you don’t need it, then you don’t need to be buying a franchise.
What do you think?