Start Your Own Franchise With The Help Of A Proper Support Network

Franchises allow you to build your own business with proven systems already in place.

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So you’re thinking it’s time to strike out on your own – build a business that helps you chart your own destiny in life.

But where to start?

You could build from the ground up, but unless you’ve got enormous resources and are very, very sure of what you’re doing, that can be a daunting prospect.

Franchising can be a strong alternative. With the right company you can get both the benefits of owning your own business and the support of a larger business entity that can help you along the way.

There is a wide, wide range of companies built on the franchise model. They include fast-food giants and grocery store and retail chains, but also business services, home improvement businesses and service contractors, including plumbing. And there are some in industries you’ve never even heard of.

Both sides now

Kurt Kittleson knows franchising from both sides. Kittleson, 62, started a bathroom remodeling business, American Bathtub Liners, in 1978. He and his business partner built it into a successful nationwide operation by selling franchises. They sold the company, now called Re-Bath, in 2001.

Re-Bath subsequently has become part of Home Brands Group, based in Arizona. Home Brands Group started a kitchen remodeling franchisor, 5-Day Kitchens, in 2008, and launched a new service plumbing franchisor, BlueFrog Plumbing and Drain LLC, in early 2014. BlueFrog offers franchises under the name bluefrog Plumbing + Drain.

Kittleson got back into the business he founded from the other side, buying a Re-Bath franchise after his children were grown and out of the home. Now he also has a bluefrog franchise in the Phoenix market.

For the person with the basic intelligence and drive to go into business, but who might lack detailed business knowledge, buying a franchise offers a support network that the go-it-alone entrepreneur probably lacks.

“Most people who go into franchising don’t have very extensive business experience,” Kittleson points out. “They’ve worked for someone else, they’re tired of relying on a company for a paycheck and they want to control their own destiny.”

Joining a franchise provides systems – from accounting and operations procedures to employment relations, sales, advertising and marketing guidance – along with a network of experienced business operators who can provide support and advice.

“A lot of things you can spend a couple of years learning – and probably making some very expensive mistakes – they’ve already done for you,” Kittleson says.

That doesn’t mean it’s easy. “There are learning curves involved and I’ve experienced them all,” Kittleson says with a rueful chuckle.

Know your cash needs

Whether starting your own business or buying a franchise, you’ll need to have some cash on hand, but just how much can depend a great deal on who the franchisor is. Big name brands (think McDonald’s) will be pricey. “If you’re doing a smaller franchise, the capital requirements aren’t nearly as high,” Kittleson says.

Getting in on the ground floor will typically require you to pay the franchisor for the rights to a particular geographic territory. You’ll also need to purchase or lease a building or buildings for the operation as well as supplies and equipment (including vehicles if they’re required for the business you’re entering). There are hiring costs, payroll costs and costs for business services you require: accounting, attorneys, advertising and so on.

“You can finance some of that,” Kittleson says. “But you’re still going to need cash for opening costs and training and inventory.”

In short, you can’t do it on a shoestring. Many businesses – solo or franchise – start out undercapitalized to start with, he warns.  “It’s important to understand what your cash needs are going to be.”

Get expert help

Kittleson advises retaining an accountant to help you carefully analyze the business opportunity a franchisor offers. A good franchisor will also be able to help you understand the total startup costs, along with giving you realistic projections on whether the business is likely to turn a profit immediately or whether you can expect to lose money until it builds to a sustainable and profitable level.

Part of that analysis is also getting a clear-eyed understanding of your prospective competition in the territory. When people taking the plunge into buying a franchise call for advice, Kittleson says, “I ask, ‘Who’s your competition?’ A lot of them don’t know the answer.”

While being undercapitalized can be fatal to the fledgling business, the opposite can have its own pitfalls. Having more cash on hand sometimes gives people the false confidence that leads them to grow too fast – and therefore burn through that cash a lot faster than they thought. Or as Kittleson puts it: “If you have a lot of money, you are going to make a lot of expensive mistakes.”

Don’t grow too fast

Which brings us to another important rule: Even as a franchisee, you want to grow the business with care. “Growing slowly to a level that you can manage effectively is much more important than how big you try to get or how fast you try to get there.”

Just going into business is plenty risky enough. “If you’re risk-averse, don’t be an entrepreneur,” he says. “But if you’re starting out, try to minimize the risk until you’re comfortable knowing exactly what to do and how to do it.”

Especially for a newcomer, it’s likely to be much safer to start up a new territory for a franchisor than to buy an existing one, he points out. If the existing operation is successful, it won’t be cheap; if it has problems, you may be in for a lot more than you bargained.

Hard work – and big rewards

If you’re seriously considering joining a particular franchise company, Kittleson advises talking to as many of its franchisees as you can – and not just the ones that the franchisor points you to as part of its appeals to you. “The ones that aren’t doing well aren’t going to say it’s their fault but at least you can get a little insight about what’s trending.”

Finally, Kittleson warns that franchising isn’t for the unmotivated or unenergetic. To prospective franchisees, he offers this advice: “Be ready to work harder than you ever worked in your previous job – longer hours, more sleepless nights.” It doesn’t last forever, but it does come with the territory.

“That’s the price you pay to create the equity long-term in your life,” he says – building wealth that you can realize as the business and you mature.



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