18 Apr What’s the deal with franchises?
In this post, I wanted to share an article that I came across on entrepeneur.com. Basically, it interviews a man named Peter Cogan about his experience going from being a company employee to the owner of a franchise. I thought it was interesting to hear some of the realistic challenges and upfront costs that he had to deal with.
Have a look at a few highlights from the article:
How much would you estimate you spent before you were officially open for business?
I am a little different than most of our franchisees because I purchased an existing franchise. This obviously changes the dynamics of things. My business came with the equipment, van, and supplies.
I really would not want to disclose the cost of the franchise, but I can say that to get started and buying the equipment, a vehicle, advertising, gas, etc. it probably takes about $20,000-$30,000. Advertising-5,000-6,000, Auto (monthly payment)-$450, Ladders, Pressure Washer, Concrete Cleaning machine-$8,000-$10,000, Window Cleaning Supplies/Tools- $3,000, Window Film stock/Tools- $2,000-$3,000, Insurance/Workers Comp- $2,000-$4,000. There is probably more but those are the big ones. I would say that anyone wanting to get into this business or any business should have at least $100,000 of capital so they don’t stretch themselves and they can do the best job once they start.
What were the most unexpected challenges of opening your franchise?
I have to say there were not too may unexpected challenges and again this goes back to being prepared by David, Rik, and the previous owner of the territory I bought. They really had me ready to go from day one.
If I had challenges it was working with employees. I used to work by myself and did not have to worry about employees. So making sure those relationships stayed strong was key and took time to adjust. My techs are crucial to this business and my success and you have to find the line between boss and friend, and that can be challenging at times.
Also, since I am dealing with residential customers now, the customer service aspect can be tricky. I am huge on customer service and want all of my customers to be completely satisfied and want to have us back in the future so we work extra hard to make sure that happens.
What advice do you have for individuals who want to own their own franchise?
I would say talking to a franchise coach and looking into purchasing an existing business if possible. It does help when getting started. I would also go to any franchise expos– that helped me to start looking and getting ideas. Making sure you really do your homework and do all of the due diligence needed to gather info. Do not settle for just anything, make sure you can see yourself doing this and being successful at it. Ask, ask, and ask questions, do not hold any questions back. Make sure you ask everything and anything that comes up and ask different sources.
I had a ton of info to use and I also just felt in my gut I could do this and going with your gut is sometimes the best move when making a huge decision such as this. But the biggest thing is due diligence. Talk to existing franchisees like I did and the franchisor, which in my case is Rik, is he/she someone you would like to be in business with for 20 years? For me that was absolutely yes.
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