hi I’m Evan Carmichael welcome to
another edition of ask Evan today I’m
answering the question from one of my
readers Bashir who wrote in with a
question about franchising so he said
your personal opinion regards to
franchising as a tool to grow as well as
franchise and advantages and risks so
thanks for the question Bashir
franchising can be a great way to grow
your business it really depends on the
company that you’re running franchising
is a great way to grow quickly because
you’re not using your own money to
expand you’re using your franchisees who
have to invest capital to buy your
franchise and it’s to be a quick way to
rapidly grow at your business some of
the things to think about with
franchising first you have to have a
really successful location yourself and
a lot of people try to franchise too
early they franchise with just an idea
and they haven’t really proven it
themselves too much and then if you
haven’t built a successful business
yourself with your first location it’s
gonna be really hard to have other
people be successful because they’re
gonna be copying your model and if your
model isn’t bulletproof and works
amazingly well then it’s not going to
work for somebody else and you have to
remember that the franchisees are
probably not going to be as successful
as you are so whatever your first
location is that’s gonna be probably the
most successful location in the system
until you maybe move into bigger markets
but it has to work and a lot of
entrepreneurs is franchise
too soon so make sure you have one
really successful location you can bring
people to you can show them how it works
and it’s an easy way to give an
incentive for somebody to want to look
at that one location say hey I can do
this and I can make a lot of money as
well so it has to be highly profitable
before you think about expansion the
next thing to think about is you have to
really have everything documented so
it’s a lot of work on your part you got
to figure out for each new location
here’s exactly what you have to do to be
successful and again remember that the
franchisees are not going to do
everything exactly as you say unless you
specifically lay it out so they’re not
going to think the same way as you think
so you have to really be specific as to
what they have to do and do that
every step and so it’s a lot of work
creating the paperwork to have all that
put together and then the final thing to
think about with franchising is a lot of
entrepreneurs who go that route you find
that most of your time is spent no
longer running the business but managing
the franchisees and you have to do a
good job at the beginning to qualify
your franchisees and make sure bringing
the right people on board so you’re not
just bringing somebody on because they
have the money to do it you want
somebody who you’ve done interviews with
and you feel they’re in the right stage
of life to do it they have the right
experience to do it they’re willing to
listen to your advice on how to keep
going and if you get the wrong person
you’re gonna spend too much of your time
just managing that person and they’re
not gonna see success and you’re not
going to see success you’re both just
gonna have a miserable time so you have
to think do you want to be in that
business of just managing franchisees
because that’s what you’re gonna end up
doing right so you have your one
location and you might even open a few
more yourself and most of your time is
gonna be spent managing your franchisees
and a lot of entrepreneur friends of
mine didn’t expect that and they ended
up either closing down a lot of the
franchisees or taking them over again so
they could just be the entrepreneur and
not have to worry about other people
owning operating it so the the biggest
Pro is that you are able to expand very
quickly using other people’s money you
don’t need to go out and raise capital
you don’t have the money yourself
necessarily yet because you’re you’re
trying to go through the your profits
originally so using other people’s money
to quickly expand the business you get
more branding that the cons are you know
the you have to manage all these
franchisees ongoing nobody’s gonna run
it as as good as you do and yeah you
basically are running this organization
that you don’t have full control of
anymore so a lot of people don’t like
the franchising model I think it’s a
tracted from the beginning but once they
get into it they thought they’re into
kind of completely different world I
would I would suggest if you’re still
interested in doing it going to talk to
people who have done the franchises and
I talk to franchisees and I try to talk
to the franchise owners as well don’t go
up and talk to somebody from McDonald’s
but find a smaller franchisee somebody
who might be in a
similar type of business to what you’re
trying to do and just get their
experiences and thoughts and see if
that’s something that you still want to
do or not so hopefully that helped
thanks for the question it’s it’s always
good to try to get as much knowledge as
you can about something before you jump
into it if you guys like the video who
are watching please give it a thumbs up
below
it makes gonna do more for you and if
you have a comment about this video or
you have a question for your own
business I’d love to hear from you if
you want to leave it in the comment
section below so thank you and I’ll see
you on the next episode
you
another edition of ask Evan today I’m
answering the question from one of my
readers Bashir who wrote in with a
question about franchising so he said
your personal opinion regards to
franchising as a tool to grow as well as
franchise and advantages and risks so
thanks for the question Bashir
franchising can be a great way to grow
your business it really depends on the
company that you’re running franchising
is a great way to grow quickly because
you’re not using your own money to
expand you’re using your franchisees who
have to invest capital to buy your
franchise and it’s to be a quick way to
rapidly grow at your business some of
the things to think about with
franchising first you have to have a
really successful location yourself and
a lot of people try to franchise too
early they franchise with just an idea
and they haven’t really proven it
themselves too much and then if you
haven’t built a successful business
yourself with your first location it’s
gonna be really hard to have other
people be successful because they’re
gonna be copying your model and if your
model isn’t bulletproof and works
amazingly well then it’s not going to
work for somebody else and you have to
remember that the franchisees are
probably not going to be as successful
as you are so whatever your first
location is that’s gonna be probably the
most successful location in the system
until you maybe move into bigger markets
but it has to work and a lot of
entrepreneurs is franchise
too soon so make sure you have one
really successful location you can bring
people to you can show them how it works
and it’s an easy way to give an
incentive for somebody to want to look
at that one location say hey I can do
this and I can make a lot of money as
well so it has to be highly profitable
before you think about expansion the
next thing to think about is you have to
really have everything documented so
it’s a lot of work on your part you got
to figure out for each new location
here’s exactly what you have to do to be
successful and again remember that the
franchisees are not going to do
everything exactly as you say unless you
specifically lay it out so they’re not
going to think the same way as you think
so you have to really be specific as to
what they have to do and do that
every step and so it’s a lot of work
creating the paperwork to have all that
put together and then the final thing to
think about with franchising is a lot of
entrepreneurs who go that route you find
that most of your time is spent no
longer running the business but managing
the franchisees and you have to do a
good job at the beginning to qualify
your franchisees and make sure bringing
the right people on board so you’re not
just bringing somebody on because they
have the money to do it you want
somebody who you’ve done interviews with
and you feel they’re in the right stage
of life to do it they have the right
experience to do it they’re willing to
listen to your advice on how to keep
going and if you get the wrong person
you’re gonna spend too much of your time
just managing that person and they’re
not gonna see success and you’re not
going to see success you’re both just
gonna have a miserable time so you have
to think do you want to be in that
business of just managing franchisees
because that’s what you’re gonna end up
doing right so you have your one
location and you might even open a few
more yourself and most of your time is
gonna be spent managing your franchisees
and a lot of entrepreneur friends of
mine didn’t expect that and they ended
up either closing down a lot of the
franchisees or taking them over again so
they could just be the entrepreneur and
not have to worry about other people
owning operating it so the the biggest
Pro is that you are able to expand very
quickly using other people’s money you
don’t need to go out and raise capital
you don’t have the money yourself
necessarily yet because you’re you’re
trying to go through the your profits
originally so using other people’s money
to quickly expand the business you get
more branding that the cons are you know
the you have to manage all these
franchisees ongoing nobody’s gonna run
it as as good as you do and yeah you
basically are running this organization
that you don’t have full control of
anymore so a lot of people don’t like
the franchising model I think it’s a
tracted from the beginning but once they
get into it they thought they’re into
kind of completely different world I
would I would suggest if you’re still
interested in doing it going to talk to
people who have done the franchises and
I talk to franchisees and I try to talk
to the franchise owners as well don’t go
up and talk to somebody from McDonald’s
but find a smaller franchisee somebody
who might be in a
similar type of business to what you’re
trying to do and just get their
experiences and thoughts and see if
that’s something that you still want to
do or not so hopefully that helped
thanks for the question it’s it’s always
good to try to get as much knowledge as
you can about something before you jump
into it if you guys like the video who
are watching please give it a thumbs up
below
it makes gonna do more for you and if
you have a comment about this video or
you have a question for your own
business I’d love to hear from you if
you want to leave it in the comment
section below so thank you and I’ll see
you on the next episode
you
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