True cost of Franchising

5 Ways to Capitalize as a Franchisor

Culture of Execution: The Winning Franchise Formula

When it comes to creating the winning franchise formula most small business owners think they know the ingredients. If they didn’t, they most certainly wouldn’t venture out on their own. However, according to the Bureau of Labor Statistics’ Business Employment Dynamics, about 80% of businesses will survive their first year in business. About 66% will survive their second year. Only about 50% will survive their fifth year. And, about 30% will make it to their tenth anniversary. As you can see, if everyone had the winning formula more than 30% of businesses would still be around 10 years later.

 The Franchise Concept

Because of numbers like these, more and more entrepreneurs are turning to franchising. Franchising offers a template for success. The things that business owners didn’t think about when they were formulating their plan, such as: floor plan layout and its impact on operations, documentation of all systems and processes for consistent training and operations, and the impact of a well thought marketing plan on business and brand development are a handful of the things that make a franchise relationship so valuable. A strong franchise brand will have already tested and refined all aspects of the business model, saving the entrepreneur the headaches of doing it themselves. Not to forget saving the entrepreneur from making many potentially costly mistakes.

 The Issue

Ideally, all the entrepreneur must do after engaging in a franchise relationship is effectively implement the standards.  However, that is many times easier said than done. Success in franchising only goes as far as the franchisee’s willingness to adhere to the established systems and standards. There is a reason why some franchise owners in similar markets with similar demographics succeed and others fail. If we did an autopsy of failed franchise businesses I am quite confident that we’d find that the cause of death was rooted in executing the formula.

 The Failed Business Autopsy Report

  • Time: Typically, at the start of the relationship every new franchisee is all in with the franchisor’s systems and procedures. They begin their new endeavor with enthusiasm and great optimism. They implement their training like they were taught. However, as time passes many begin to loosely apply their learning and become relaxed with implementation of the brand standards. Then, shortcuts creep in, knowing a better way rears its ugly head and before you know it, the proven methods begin to be replaced by “a better way”. Unfortunately for many, the better way isn’t better at all. What lured them to franchising in the first place is replaced by loosely structured systems and poor execution. Inevitably, this leads to lost sales, never reaching full potential and lost earnings.
  • Consistency and Accountability: For any business to be successful everyone must be held accountable for results, including the franchisee. Failing to consistently hold everyone accountable to the standards of operation is the first step toward failure. When a franchisee starts to relax on the marketing routine, operational standards and financial fundamentals, the system begins to take on a new standard. That standard usually involves less than great service, average product, below average cost containment, and a less than stellar brand image. The typical result is a decline in sales, which directly effects revenue.
  • Execution: Business is about getting things done and doing them the way they were meant to be done. Failing to get things done leads to stagnation and stagnation leads to status quo. Status quo leads to becoming average at best. No one in today’s world, which is full of many great alternatives, is going to pay for average. Once you become average you become a memory. When there are many options to choose from you must stay top of mind. Those that are top of mind are the highest performers. The highest performers execute.

Commit to the System

Most entrepreneurs invest in a franchise because the franchise has a record of success, a strong brand, a refined training program, ongoing operational support, marketing assistance, real estate site selection assistance, purchasing power, and established systems in place that help lower risk. Therefore, it would appear to be in the best interest of the franchisee to implement the tried and true systems of the franchisor.

If you are considering a franchise as your business template, do yourself a favor and implement their systems, procedures and brand standards consistently and correctly. The franchisor made it to where they are because they’ve successfully done it over and over again. Therefore, their way is the proven way. You’re paying for their knowledge, expertise, and experience. Do yourself a favor and run the business the way they say it should be run. Develop a culture of execution and insist on consistently doing things the way they are supposed to be done. Do this and the odds of your business becoming one of the 30% that make it to the 10 year mark goes up significanlty. Then, you’ll be positioned to renew that franchise agreement so you can do it all over again.


Randy Stepp is a business and franchise development professional who’s purpose is to help business owners realize their dreams of independence and freedom.

Follow or Connect with Randy on Linked In at

The Franchise Partnership Puzzle: Avoiding Disillusion

The modern franchising model can be traced back to Isaac Singer, founder of the I.M. Singer and Company, manufacturer of sewing machines.  Singer and his business partners sold rights to businesspeople who were interested in selling his sewing machines within specific geographical areas. This system served as a win-win for both the company and the businesspeople that chose to invest. The company generated revenue to fund its business endeavors and the businesspeople had a business of their own, selling a product much in demand.

Because of Singer’s modern day franchising model many business people have found a great opportunity to not only bring an idea to life through franchise and licensing agreements, but also give entrepreneurs like themselves an opportunity to own a piece of the pie. While franchising is a great opportunity for an entrepreneur to own their own business, not all franchise opportunities are the same. A potential franchisee would be wise to evaluate franchise opportunities against the following components that serve to makeup those things that will be key in determining whether a strong business relationship develops.

Key Components

  • Vetting – From inquiry to ownership a franchisee should experience a rigorous vetting process. It is through this process that a strong relationship begins to develop. It is also through this process that the franchisor and the franchisee should learn a lot about each other. While it may be the desire of the franchisee to fly through the process, a thorough process is better in the long run for everyone. After all, it is better to know up front if the fit is right then to find out after thousands of dollars and hundreds of hours have been invested. A weak vetting process can be an indication of the strength of other processes. A strong franchisor is after a strong long-term relationship. A weak franchisor is after the franchisee’s money.
  • Training – Many times a franchisee’s success can be attributed to their level of preparedness from the start. Part of that preparation takes place long before the doors open for business. Strong training on operational systems and processes is critical to the implementation of the franchisor’s business model. The same holds true for strong business practices. A franchisor worth its weight will make sure a franchisee has all the tools necessary for success. The franchisor’s primary goal should be setting up the franchisee for long-term growth and an even lengthier relationship.
  • Multi-Unit Offering – The ability to engage in multi-units is beneficial for both the franchisee and the franchisor. The franchisee has the option to compound wealth growth, while the franchisor can engage with fewer franchisees as they work to reach their unit goals. A franchisor who adds many one unit franchisors may be after the money more than the shared interest of exponential business growth.
  • Territorial Protection – A franchise agreement should clearly describe the territory covered by the agreement. Vague and uncertain language does not help the franchisee. A strong franchisor wants clarity and understanding in all business dealings. Vague language in a Franchise Disclosure Document (FDD) or Franchise Agreement (FA) should be considered intentional and a red flag.
  • Rebate Sharing – Almost every franchisor has some form of a rebate deal with distributors and suppliers. A strong franchisor will not only disclose these, but many will share a portion of those rebates as franchisees acquire multiple units. Again, a strong franchisor has a shared success and wealth building mindset.
  • Renewal Terms – Clear and fair renewal terms protect both the franchisor and the franchisee. 180-day notification of intent to renew is the ideal. Stated increases in royalty fees upon renewal of the agreement are not an ideal situation for the franchisee. While it sounds great to know what your increase will be, there is usually no value added with the increase. An increase in royalty fee at renewal typically puts more money in the franchisor’s pocket and less in the franchisees. In most cases the increase will not result in an increase in service. A strong franchisor will grow revenue through their support of the franchisee.
  • Franchise Agreement Renewal – The franchise agreement should state whether the franchisee has the option of rolling over the current agreement or state that the current agreement will be replaced by a new agreement. Either way, the franchisee needs to know which it is going to be.
  • Alternate Channels of Distribution – While territories may be mapped out and clearly stated, it is important to know whether the franchisor has the right to enter alternative channels of distribution within your territory. Alternative channels could be concert venues, amusement parks, shopping malls, air ports, etc. While these venues may not directly impact your target market, they could take away opportunities for expansion within your existing territory. A strong franchisor will make sure that this is clearly known up front.
  • Gift Cards – While gift cards don’t seem like a big deal, they can be a revenue boost or drain. Gift cards purchased in one location and redeemed in another can be a boon for one location and a drain for another. Clarifying the redemption system upfront may help to avoid future issues. Outside of the gross revenue they generate, a franchisor should not be taking a cut from the sale of gift cards.
  • Advertising Fund – Almost all franchisors require the franchisee to contribute to an advertising fund. This fund is different than the local advertising requirements placed upon the franchisee. The advertising fund is used by the franchisor to fund marketing related activities for the franchise group. This may mean that some markets see more advertising than others, as the marketing tends to follow market penetration. A strong franchisee will provide audited financials of the advertising fund for the franchisees to review.
  • Curable Versus Non-Curable Events – Every franchisee needs to understand what makes up a curable and non-curable franchise violations. Curable violations are usually minor and immediately fixable. Non-Curable offenses need to be clearly stated. A strong franchisor is not franchise agreement termination happy. Again, strong franchisors are interested in franchisee success. They will work to rectify situations and not allow situations to ruin the relationship. However, they will terminate franchise agreements for failures that jeopardize the brand and put the franchisor and other franchisees at risk. This level of leadership is important. Doing business with a franchisor that actively protects the brand is crucial to the long term success of the franchisor and their franchisee partners.
  • Accountability – Accountability is something many franchisees struggle with. A strong franchisor will hold franchisees accountable for operating their business within the established standards. A franchisor that does not hold franchisees accountable is not concerned about brand and product integrity. That is a major red flag. The best franchisors are sticklers for adherence to the systems and processes they have developed. They know what it takes to succeed. They also know that franchisee failure is usually connected to the franchisee’s failure to operate their business within the brand standards. While a franchisee may not like accountability, they need it. It is neither good nor acceptable to have failing franchisees. Bad and failing franchisees harm the brand and place all franchisees at risk.

Avoid Dissolution

Selecting the right franchisor is not an easy task for the potential franchisee. However, it’s also not an easy task for the franchisor. If it is easy for either party, then neither is doing their due diligence. A franchisee and franchisor relationship is a long-term commitment. It should be treated in much the same way as selecting a partner for life. There are some behaviors that can be tolerated and lived with. However, there are others that cannot. It is the responsibility of each party to identify behaviors and determine which are acceptable and which are not. Like a marriage, franchisees and franchisors that don’t go through the due diligence process usually end up divorced from one another. That situation is neither good nor healthy for anyone.

Navigating The Road To Franchise Success

There are many reasons an entrepreneur chooses to engage in business with a franchise as opposed to going out on their own. Just like personal relationships, most franchisees are drawn to a franchise because they like how the brand looks and feels. Maybe it was the brand marketing that caught their eye. Maybe it was an experience they had with the company. Maybe it was a product or service that blew them away. No matter what it was that attracted them to the franchise, it was something they believed others would find equally appealing.

In most cases, the attraction to a franchise comes through a product or service experience. Humans are fairly consistent when it comes to identifying differences in experiences. For example, most people can quickly describe the differences between K-Mart, Walmart and Target. There is no doubt that product pricing will come up in the conversation. However, if product pricing were the only deciding factor when it comes to business success Target wouldn’t exist today. There is much more to business than price. People are willing to pay more if a company can make a case for the added cost. For example, corporate culture, brand image, established systems and processes, customer experience and etc…all contribute to the overall experience and either draw the consumer in or pushes them away.

Those factors and many more are reasons an entrepreneur may be drawn to a franchise. The idea of owning a “turn key” operation with a proven business model is extremely attractive. Knowing that someone has not only figured out what makes for a sellable product, but they’ve also figured out the branding, marketing and systems that are necessary to support that product can be worth every bit of the royalty fee a franchisee will be asked to pay. After all, the percentage of sales a franchisor will demand for having done all that work to develop a successful business model may pale in comparison to the work, financial investment, and risk one might have to take on if they were to do the same on their own.

That said, not all franchises are created equal. Therefore, a prospective franchisee must be vigilant in their assessment of not only the franchising opportunities that are out there, but also with their understanding of what it will take to succeed. While much of a franchisee’s success lies with a quality franchisor, a franchisor can only do so much. Even the most successful franchisors have some dogs in their portfolio. In most cases, the dogs are not because the brand is weak or the product stinks. It’s usually because the franchisee failed to hold up their end of the bargain. Some franchisees just don’t do what needs to be done to succeed. I would venture to guess that had the dogs in many franchisor portfolios gone it on their own and not engaged with a franchise they would have died the same death, only quicker.

No franchisee that I know wants to fail. However, just like franchises, not every franchisee is created equal. Not every franchisee is built for business.  We’ve all seen examples of a business failing under one person, only to succeed under another. Some people are naturally built for business and some are not.  However, this does not mean that someone who is not a natural cannot learn to be a successful business owner. The difference is in behaviors. The great thing about behaviors is that they can be taught and learned. Therefore, there are certain behaviors that every franchisee can learn from those who are successful. Once learned they can greatly increase their odds for success. However, the identification of the behaviors alone will not lead to success. Its the execution of those behaviors that garners results. Anyone can create a plan, but not everyone can execute the plan.

Below are some behaviors that I have found to be present in successful franchisees. I consider them to be the differences between those franchisees who DO succeed and those who DON’T.

What Successful Franchisees DO:

  • They read and understand the Franchise Disclosure Document (FDD) and Franchise Agreement (FA), ask questions about both and seek legal opinion before contractually engaging with the franchisor. A good franchisee knows the rules of the game before playing. There should be no surprises after you’ve signed the agreement. A franchisee must know all the financial obligations, as well as all of the limitations and expectations being set forth by the franchisor before they sign on the dotted line.
  • They confirm in writing any oral representations that are made. A good franchisor will not make any claims that cannot be backed up in the FDD. If claims are being made that you have not read in the FDD or FA, hold the franchisor accountable for putting it in writing. If they won’t then that will tell you all you need to know about the character of the organization’s leadership.
  • They interview current franchisees. Don’t just rely on the list of franchisees that the franchisor may have given them as possible contacts. They look in the FDD and call a few that are not on the list. Then they ask some very pointed questions about the franchisor and their experiences. One very telling question to ask is this, “Knowing what you know today, would you engage in business with this franchisor again?”
  • They seek to understand how many multi-unit owners there are. Multi-unit owners telegraph satisfaction. If there are many one unit owners it could be for a reason, which may be dissatisfaction. After all, you don’t typically invest in more units unless you are a satisfied franchisee.
  • They seek to understand why franchises have failed. Every franchisor has some number of failed franchises. This is part of doing business. Some people who get into business had no reason for doing so in the first place. Many franchises fail because the franchisee did a poor job of running the business. That’s not totally the fault of the franchisor and in many cases shouldn’t be held against them. However, a franchisee should try to figure out the cause of the failure. Even if failures were the fault of the franchisor, it is worth understanding why they failed. I wouldn’t throw the baby out with the bath water because some franchises have failed. Maybe you’ll learn it wasn’t the franchisee. Maybe you’ll learn that early on the franchisor had some poorly designed systems that contributed to some of the failures. Maybe you’ll also discover that the franchisor learned from those early mistakes and rectified those errors. Almost every company makes execution mistakes. Companies like GM, Ford, Toyota, and Apple have all screwed up in their history. It doesn’t mean they are bad investments today.
  • They know how much capital it will truly take to succeed. Every business, franchise or not, must withstand the test of time. In my analysis, the most successful units are those that have been given time to become established. There are few overnight successes. Even some of the most iconic franchise brands needed time to establish themselves. Having enough capital on hand to carry the franchise through that growth stage is critical. Cash-flow is king in small business. However, it may take a few years to get to a point where enough cash is flowing for the business to support itself on its own.
  • They interview the corporate personnel before agreeing to become a business partner. A franchisee must get to know those who are making decisions about his/her future. If there is not a feeling of trust and confidence in the ability of those at the top to take the organization where it needs to go, then it is a marriage that is doomed to fail. You need to know and understand the strategic vision of the organization. You also need to know where their passion lies. If it’s not with the brand, then it will come through in their leadership. Passionate and smart people at the top should work as hard as you when it comes to making the business work.
  • They analyze their market in advance. A franchisor may help with site selection, demographic analysis, and real estate acquisition. However, it is the responsibility of the franchisee to decide whether or not a particular location is the right location. Know the competition, market receptiveness for your product or service, and how much advertising and marketing will be necessary to break through. Not all markets are the same and some will be easier than others to succeed in. Knowing this up front can be the difference between success and failure.

What Franchisees DON’T Do:

  •  They don’t only work in the business, but work on the business (E-Myth Revisited)
  • They don’t operate without a strategic growth plan that also incorporates actionable items to be completed within a specified timeframe
  • They don’t let the established systems and processes to become bastardized
  • They don’t let things slide. They know that accountability and execution are critical to business success.
  • They don’t ignore the numbers. Due diligence in financial management is as critical to success as execution. Knowing that the product, employee and rent costs are within specified limits is key to keeping them there.
  • They don’t stop marketing. Marketing can be expensive and it can feel as if it is not worth the investment. However, they also know that when you are out of sight you are also out of mind. There is a reason McDonald’s, Taco Bell and Apple continually market the way they do.
  • They don’t ever forget who the customer is and that if it wasn’t for the customer they wouldn’t be in business.
  • They don’t underestimate the value of hiring the right people and training them accordingly. They know that the right people can be a differentiator.
  • They don’t ignore culture. They know that a culture exists in every organization. They also know that they must develop that culture or someone else will. The right culture can bring out the best in people and lead to a highly disciplined and motivated team.
  • They don’t shy away from the tough decisions. Successful franchisees do what needs to be done, whether they like doing it or not. Accountability, adherence to systems, and spending what needs to be spent to survive are not always fun or easy. However, the successful franchisee knows that success hinges on the “how” of business. Execution is key to operational excellence and operational excellence is key to success.

Owning a business isn’t easy. But then again, neither is working for someone else. If you have a desire to be your own boss then franchising may be your ticket to professional, personal and financial freedom. To achieve those goals, you need to be clear about the fact that it will require a lot of hard work. However, the rewards of business ownership can greatly outweigh the risks.  The question is most likely not whether you can do it or not. The question is most likely whether you truly want to do what it will take to succeed. That, my friend, is a question only you can answer.

Thinking About Owning A Franchise? Do Your Due Diligence Before Committing

Owning your own business is a dream many people have. The freedom to be your own boss and to control your own destiny is a strong lure, especially in an ever-changing business environment where loyalty and commitment seem to be a thing of the past.

There are many reasons people decide to step out on their own and leave the employ of others. Some are following a dream, while others may be frustrated with the direction their career has taken them. No matter what the reason, franchise ownership may be one of the considerations people make when deciding to go it alone. Interestingly, the draw of a franchise, as opposed to starting from scratch, is that you don’t have to go it alone. A good franchise opportunity should be as close as possible to a turn key operation. And, if you pick the right franchise success should be all but guaranteed. That is as long as you are disciplined, do your due diligence and fact finding, and properly implement the established systems.

To Fail or Not to Fail

When a franchise fails it usually because the franchisee failed. Franchisees either failed to do their due diligence up front (which includes a professional review of the Franchise Disclosure Document), failed to properly implement the systems and processes that the franchisor has established, or they fail to attend to the factors that contribute to success, like local store marketing, customer experience, operational excellence, and attention to quality. These failures are many times blamed on the franchisor when in fact they are more appropriately placed at the feet of the franchisee.

Consider This…

If you are contemplating stepping out on your own and investing in a franchise, consider the following before you go all in. Remember, it’s better to go slow before you go fast and furious into franchise ownership. If you do slow it down, you may thank yourself later. If you don’t, you may hate yourself in the morning. Either way, going slowly through the process is almost never a bad idea.

10 Things You Need to Understand Before Signing on The Dotted Line

  1. Product Offering and the target customer: ask the franchisor to describe their products in detail, who they view as their target market, and what, if any, product offerings are in development.
  2. The “ideal” demographic: ask the franchisor to share the ideal demographics for a successful location. If they can’t give that to you then you should be concerned. If you still like the franchise, then do your own research and visit franchise locations in the region you are considering. Conduct interviews of owners and general managers so that you might uncover what the ideal demographic may be. If the franchisor does have the data, and they should, ask how they arrived at the data and what the regression analysis indicate.
  3. Development area demographics: Ask the franchisor if they will help you determine the demographics of the geographic area you are interested in and determine the size and density of the target population.
  4. Operating costs: ask the franchisor if they can help you determine the cost of rent, employees, and supplies/materials for the area you are considering and compare that with anticipated pricing for your product. Then, ask them if they have a pro forma so that you can try to determine margins using data for your area. No two areas are the same, even if they are only 30 minutes apart. Excessively high rent and employee costs can destroy a franchise. Then, go interview other franchisees and find out how they are performing. You need to confirm what you think the possibilities are. DO NOT let your emotions make this decision.
  5. Support: ask about all the services and support you will receive from the corporate office. Much of this information is contained in the Franchise Disclosure Document.  However, asking the right questions will provide greater detail and a better understanding. This will better prepare you for opening and prevent misunderstandings in the future.
  6. The best of the best: ask for a detailed description of the characteristics and behaviors of the most successful franchises. There are things that the best franchises religiously do that the less successful franchises do not. Find out what they are and then map a plan for making those characteristics a part of your franchise.
  7. 5-7 things: ask the franchisor what 5-7 things have been determined to be those things that result in increased revenue and customer satisfaction.  You may hear things like “engaging the customer when they walk through the door”, “offering to enroll customers in our rewards program”, or “addressing customers by name at checkout, which is gained from their credit card or through our rewards system”. Knowing what those 5-7 things are says a lot about the franchisor and how well they know their operations and customer.
  8. Marketing (yours and theirs) – ask them to explain what makes up corporate marketing and what makes up local marketing and what costs might be hidden. The two are not the same. Know where the money is spent and where you need to spend money locally. A satellite franchise may realize little to no corporate marketing until other locations are developed nearby. You need to know this up front.
  9. Their opinion: ask their opinion about where they would like to locate a franchise and why. Maybe you’ll find that their location is better than yours. It also tells you how much work they’ve done preparing for growth. It also says a lot about the direction they are heading.
  10. Strategic vision: find out the strategic vision of the corporation. Ask about their vision, corporate values, goals, growth plans, product development plans, and mission statement. Quality organizations will have a well thought and detailed strategy that maps out the direction of the organization. A vibrant corporate brand will only help make your local brand more attractive.

Know It All

You can’t learn everything you need to know in a few meetings. However, by asking the right questions you can learn a lot about the organization and what you can expect in the future. Remember, the benefit of owning a franchise is that someone else has figured out the success formula. While franchise ownership does not guarantee success, if you do your due diligence and implement their systems you should be better positioned than trying to go it alone. Never forget that your success or failure is directly tied to your willingness do what needs to be done to make it happen. Due diligence is the first step in that process.

Randy Stepp is a business and franchise development consultant who’s purpose is to help business owners realize their dreams of independence and freedom.

Follow or Connect with Randy on LinkedIn at

I want to own a business; What are my options?

Three different roads to business ownership are possible each with challenges and opportunities.

1. Startup

Attempting to start a business from zero is the riskiest of the three but in certain scenarios it offers the highest upside. Having an idea is just the start. The business will need to consider corporate and production processes, accounting standards, business advisors, marketing, and REVENUE generation. How about the fact that a staggering 95 percent of small business will close their doors before they hit their fifth year of operation? If you are contemplating a startup seek out advisors who have been there and done it. If you are considering a startup, know that you must be agile and willing to embrace the ability to adapt.

Keys to success for a startup

  • Find a mentor
  • Have a strong personal network
  • Raise sufficient capital
  • Solve a problem, fill a need
  • Be the expert
  • Can you save someone money, can you make someone money, can your product or service make their life easier?
  • Identify your customer needs and wants and the value they associate with them
  • Value Proposition – Differentiate your offering based on unmet needs within the market place
  • Establish go to market strategy
  • Build processes
  • Be consistent
  • Sell absolutely everyday
  • Communicate any and all directions in writing
  • Surround yourself with people smarter than you
  • Track gross and net profits monthly


2. Buy an existing business

Generically a business acquisition is a greater financial cost in the short term than a startup. Because of the increased cost; risk is in theory mitigated. Depending on the sector, business valuations range. Due diligence is key. Mindset of the takeover must be larger than one person. The new owner has to communicate with each and every person in the company. A great majority of your time should be spent conducting a human capital audit by mentoring and coaching current employees. The major challenges in buying an existing business are getting the staff to buy in, shifting the company culture, improving communication gaps, and dealing with the resistance to change.

Keys to success

  • Due Diligence – Hire a professional if you are not an expert in valuing a business opportunity
  • Release control to capable supervisors and lead them
  • Create an advanced financial reporting and projection system
  • Instill a team-based mindset
  • Overhaul the business model
  • Strengthen all communication
  • Identify the strength and value of the existing brand/name
  • Speak to current clients/customers to gain an understanding of why they choose to do business with your target. Ask them, what needs to be improved and why? What are they best at and Why? What is that important to them?
  • Speak to current employees. Ask them why they choose to work there? Ask employees what can be improved and what impact would that have on their performance and for the customers of the business?
  • Develop an actionable strategic plan that incorporates all you learned while exercising your due diligence to acquire the business


3. Buy a franchise

Owning a franchise allows you to go into business for yourself, but not by yourself. A franchisor provides franchisees with a certain level of independence where they can operate their business. A franchise provides an established product or service which may already enjoy widespread brand-name recognition. This gives the franchisee the benefits of a pre-sold customer base which would ordinarily takes years to establish. A franchise increases your chances of business success because you are plugging into proven products, processes, and methods. Franchisees are required to operate their businesses according to the procedures and restrictions set forth by the franchisor in the franchise agreement. In exchange for the turn key opportunity most franchise systems require an initial franchise fee and ongoing royalty. Since the royalty is directly correlated to sales, franchisors have skin in the game to help the business run at optimal levels.

Keys to success

  • Follow the process and systems set forth
  • Believe in proven blueprint that others are successfully utilizing to achieve their dreams
  • Understand levels of support from franchisor
  • Interview successful franchises
  • Have clear expectations for the financial performance of the franchise
  • Community involvement
  • Be passionate about the service or product you will be offering to the marketplace
  • Embrace the franchise model


All of the above offer the freedoms of being your own boss. Which avenue do you want to pursue?

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Ryan Rao is a Principal of Apex Franchise Development Group and is a franchise development expert who has grown multiple franchise based businesses into national and international brands. Franchising has allowed him to help individuals realize their dreams of business ownership, while permitting them to experience the independence, flexibility, and freedom that comes with being a business owner. He also serves as a franchise consultant, and is a personal growth advocate.

Follow or Connect with Ryan on LinkedIn at