April 2003
What about a Franchise?
I recently had an opportunity to chat with Michael Harrington, owner of The Entrepreneur's Source in Beverly. He is in the business of helping people to identify and research franchise business opportunities that match their goals and needs.
In recent past issues of this newsletter I've been exploring ways to start a business, places to find funding and ways to market your business. While talking to Michael it occurred to me that I had never discussed franchising and it is in fact an alternate way to get into business for yourself.
Michael's story is interesting and pretty typical of the people he sees. He was in the restaurant business for many years and was very successful at it. He knew however that it was not what he wanted to be doing for the rest of his life-it was not his passion. Because of that he began to explore the opportunities that were available to him.
At some point during his exploration he decided he wanted to own a franchise. With a franchise you buy the right to sell a product or service according to guidelines given to you by the franchisor. This usually involves investing in a proven business system, and then receiving training and ongoing support by the franchise company. You could almost think of franchising as half way between working totally independently and working for someone else.
Michael decided to seek help and information from The Entrepreneur's Source, the franchise he ultimately bought. They helped him to determine if he had the right temperament, work habits, behavioral style, and risk tolerance to be in business for himself. They then worked with him to evaluate the various franchises until Michael found the one that was right for him. Michael enjoyed the education and guidance The Entrepreneur's Source provided him and decided he would like to do the same for others.
The total investment cost for a franchise is usually from $25,000 and up. Most franchise fees range from $20,000 to $45,000. This initial fee is to acquire a franchise, be granted a territory, be trained, and then have ongoing access to the name, systems, and trademarks of the company. Franchises can be as simple as businesses that can be run out of your home, or can also involve additional investments in equipment, supplies, inventory, vehicles and buildings.
Michael says that a franchise gives a person the opportunity to invest and participate in a proven business system and to "be in business for himself, but not by himself." Another benefit is that the franchisee does not have to have experience in the industry represented by the franchise. The franchiser provides the training and ongoing support to help the franchisee achieve success. There are over 5000 franchises across the world, involving hundreds of different businesses and concepts.
Since there are hundreds of franchises available and lots of information to gather, The Entrepreneurs Source helps the client to explore the opportunities in a systematic way and get all their questions answered. The franchisors pay the majority of Michael's fees. Initially Michael will schedule several no-cost meetings to get to know the client and to determine if they might be a good fit for business ownership. Once he and the client agree to work together, his clients pay a modest fee to cover the expense of the some of the customized assessment tools that The Entrepreneur's Source uses to develop client profiles. Even though Harrington works with many franchisors, his primary concern is to identify options that best fit the profile of his client.
Michael pointed out that it is more important that the business owner have a passion for business than for the products or service of that business. It is the job of the business owner to run the business and that may or may not mean actually working in the business. In his book The E-Myth Revisited Michael Gerber talks about business owners working on the business as well as in the business. It is a lesson all business owners need to understand.
Take Action
- Read the book Free Agent Nation and take the online Free Agent Aptitude test. The book gives you a code to use for the test.
- What kind of business interests you? Do some exploring of businesses in existence that excites you? Talk to the owners.
- Read the E-myth Revisited. Would your business benefit by your spending more time working on it? If your answer is yes, make a list of the steps you need to take to make the adjustment. What will the impact be?
- Interested in franchising? Contact Michael Harrington The Entrepreneur's Source 866-834-0003 or <mailto:mjhesource@attbi.com> . Mike works with clients over the telephone and also at his office in the Cummings Center in Beverly, Massachusetts.