In a SCORE Small Business Success Podcast “Franchising”, SCORE mentor Bob Melberth, a three times franchisee, discusses the popular topic for many people who are interested in starting a business.
During the podcast, Bob gave insight into the franchising business and answered five key questions, many people ask in regards to the benefits, pros and cons and financing options for a franchise
Below are five commonly asked questions about franchises.
What are the biggest benefits for getting into a franchise?
You have a proven business concept that you can explore and validate to be sure that it's going to work for you, fits your skills and talents and delivers what the individual wants in terms of their success. If you're an independent business person, you're by yourself and an independent business person doesn't have a franchisor and a community of franchisees rooting for them to be successful. The value of that community is really priceless.
How do you find the right franchise for you?
There are well over 3,500 franchises in the United States. I think it’s really driven by an individual’s need. You can use your transferable skills in this business. People don’t realize they have developed (transferable skills) over their career that they can apply. Income, lifestyle and resources also dictate what you can offer. Taking advantage of discovery day (a day where perspective franchisees can meet leadership) is important. At discovery day, as a perspective franchisee, you will want to meet the leadership responsible for keeping the brand vital, moving forward and relevant so you can go ahead and execute. Find an environment that’s safe for discovery.
What are financing options?
Financing is becoming more available. There are alternative means of financing that a lot of people are able to take advantage of. The SBA has vehicles that are being utilize as well as creative things like several low or no interest credits cards that you can draw against.
How safe are franchises?
There are no guarantees to anything in life, particularly being in business. However, the success of a franchise oppose to an independent business is remarkable. Why is that? For independent businesses, it's the lack of resources. Money tends to run out quicker. As an independent business, you don’t know how much it costs; with a franchise, you can absolutely know how much it costs (to run the business).
People feel they have to be an expert in everything to run a business; that's more true as independent. In a franchise, there is a community to help you find things. As a franchise, you are working on the business; as an independent, you are working in the business.
What are franchisors looking for?
Franchisors are generally looking for a good broad spectrum of business skills. They are looking for business owners, not technicians. They are not necessarily looking for experts because they will train you, they looking for good solid business people who have a drive to succeed, can follow a system and have the ability to execute the system.
Interested in learning more about franchising? Listen to the complete SCORE Success Podcast “Franchising.”