September 26, 2008
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Business Forecasting 2012
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As I was about to do a presentation on franchise ownership late last year, a lady came up to me and asks:
"I know it's probably too late, but my husband and I invested in an advertising and marketing related franchise earlier this year, and we really don't like it. It is just not right for us. I know that I probably should have contacted you about investing in a franchise before we purchased this one, but can you help us get out of it?"
I rolled my eyes (invisibly, of course she did not see me roll them!), and asked her what franchise she had invested in, and why it was not all of a sudden, "right" for them. (I thought that would be a good place to start.)
She said that "it is a franchise in which we produce a nice little local print publication and sell advertising space to small businesses in our area for our revenue. It is really a nice publication. We just don't like to sell the ads. The businesses we are calling on don't seem too interested in purchasing ads in our publication."
HUH?
I then started my quiz:
1. Are you and your husband salespeople?
2. Did you know that the franchise opportunity was a sales and marketing type of business?
3. Did you talk to current franchisees before you invested your money?
4. Did you think it would be easy?
Here are her answers to my little quiz:
1. We both come from a sales background.
2. We knew that sales would be the major component of this franchise.
3. We talked to a couple of them.
4. We didn't think that it would be this hard.
Folks, this was one of the most bizarre conversations about franchise ownership I have ever had. Here we have a husband/wife team, who came from a sales and marketing background, invested in a franchise concept that from outside appearances matches their professional skills, who don't like the fact that small business owners are not lining up with $1500 checks in hand to advertise in their local community publication, and who want me to try to find a buyer for their 3-month old business.
Was I was energized about the prospect of working with these nice folks? No. Not even a little.
I strongly suggested to them that they continue to work their business, and get it to the point where it would be attractive to someone in the future that may want to buy it. (I am not the gentle, political type when it comes to stuff like this. But that may actually be ok, considering the current presidential election shenanigans going on 24 hours a day on cable with folks that are political) I don't think she liked my answer, but did she actually think that they would be able to not take a huge loss on this business if they were to sell it after 3 months? Or that the franchisor would cancel the franchise agreement? (She did ask if that ever happens.)
A lot of prospective franchise owners make the mistake of not digging in enough during the research phase. If you are serious about franchise ownership, make sure you know which questions to ask, and to whom you should be asking them to. Try to meet face to face with some current franchisees. Finally, make sure your professional skills are in alignment with what your daily activities will be as a franchise owner. I suggest doing this research before you invest in a franchise. It will lower your risk!
About The Author: Joel Libava is a Cleveland, Ohio franchise consultant and marketer. He blogs at The Franchise King blog. His website is The Franchise King.
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