People fall in love with the idea of becoming a franchisee and running their own business. It’s an empowering thing to think you control your own destiny and business ownership could be the secret to that power. However, one of our guiding principles is to understand your market – and lets face it, the “in your face brands” that often come from franchising are not always the ones consumers flock towards!
Throughout my life as an entrepreneur, I have always been keen to business opportunities and taking chances on big ideas. There’s nothing wrong with that whatsoever, as a matter of fact, some might consider that part of the American Dream. Another part of that dream is the ability to have the freedom to spend our money how we see fit – and we do find that certain communities see franchisees as “sellouts” who are hitched to the franchise by way of a franchise fee and royalties. In other words, they think that the dollars they spend don’t go back into the community and therefore buying through a big brand is not really helping their local economy at all.
So we won’t name those communities or the demographics of people specifically, but we do see these behaviors in less populated areas, such as small towns and some core communities on larger cities.
Let’s take a much brighter approach to this: Where are the franchise-friendly cities?
There are plenty of areas and demographics in the country that have that “franchise hunger” we referred to. In actuality, most cities have varying degrees of hunger, but it goes a bit deeper than that. In general, our most “franchise friendly” communities are where the “urban sprawl” exists. Consider major suburbs around large cities and metroplexes. Dallas-Fort Worth is a prime example. Minneapolis-St. Paul is another. Consider all the humongous suburbs in Oklahoma, Nebraska, and Iowa. These are all classic hungry territories! Now that you have been made aware of this, you may notice the next time you drive to work and pass two or three strip malls, that most of the retail businesses that lease there are likely franchises (sandwich shops, restaurants, coffee, dry cleaning, tanning, massage, etc.).
The key to the whole discussion about franchise hunger is: What is YOUR community hungry for?
Even the most conservative communities need franchises. It may not be an in-your-face retail franchise like a coffee shop or restaurant – it could be somethine as obscure as a private security company used to patrol the neighborhoods. Taking a good, hard look at what is missing in a community is the key to being a successful franchisee. Once you determine what “hunger” your area needs, you are then more acutely aware and can solve that need. Don’t fall in love with every concept, fall in love with the ones your city needs. Trust me, there’s at least one for everyone.
Decide which industry category makes the most sense for you. Then be open to one more. Why? The main reason is because your personal biases may be clouding your point of view. Most people’s goal of starting a business is to be their own boss, be happy and fulfilled, control their own future, and to make money. Your preferred category might be the best option at the beginning of your discovery process, but as you dig in – you’ll clearly find that similar investment levels may lead you to other franchise concepts that has nothing to do with your original idea. For example, one of the top calls we get for a sandwich shop. While a sandwich shop is a fast-paced, exciting, and rewarding business – it still takes a hefty sum of money to start one. But most people don’t realize that you are dealing with a 7-days-a-week business with extended hours and a relatively complicated supply chain and tons of employees. Bottom line is a lot of work and effort for a relatively marginal profit. Take that same investment level and put it into a mobile drycleaning business and you’ll find that you set regular hours, build a customer base then maintain the business (often as an absentee owner). The net result is as much or more net profit, but you work about one third the total amount.
This is the world’s first crime scene cleaning franchise. They are well-known in the industry and are sought after by clients. This is a huge advantage over other franchises (especially cleaning and restoration) who have lots of competition for contracts. The biggest issue for most new start-ups is early sales success and building a portfolio of customers. I suspect that with Bio-One, the customers are calling because of the brand reputation (they are well-known in their field). That is not to say that typical business growth factors (like business networking and marketing) are not important; it’s the attraction of clients and ability to close deals that may make Bio-One special.
The concept is straightforward – you own a mobile drycleaning service. However, instead of investing $500,000 in a retail location and being restricted to people who live/work within 5 miles of your store, you can market to a range of 25 or even 50 miles away utilizing a 3rd party dry cleaner facility (wholesale to you). You can work from home and never buy a piece of dry cleaning equipment. You provide an essential service to your customers who will be glad to not have to climb in the car, go to the cleaners, wait a few days then drive back to pick up their suits. We are not permitted to provide earnings claims, but you can run out the numbers fairly conservatively to get a sense of what a business like this could do for you:
Their concept is also straightforward: A quick-serve restaurant (QSR) that provides a variety of healthy choices – all fresh ingredients. The bulk of their menu is pita sandwiches – outside the box of the normal sandwich wars (Quizno’s, Subway, Potbelly, Schlotsky’s, Jimmy John’s) but with a higher ticket price. They have done the work for you with regards to setting up shop, finding suppliers, accounting, recipes, etc. The main thing you need to do is comply with their financial requirements ($70,000 liquid, $150,000 net worth, total investment around $100,000+) and ensure you are a good match to successfully run this business. Extreme Pita is comparable to opening a Subway, but is a much simpler business to run with better overall margins.