Success or Failure Via a Franchise The Good Oil

From the outset of this article let me put this clear and simple -You and you alone are the driving force behind your success whatever the venture or event. You chart your own destiny or downfall position or disposition. Think about this, you have just been told youre plane is not on time or your vehicle wont be ready for another 30 minutes. Your direct and applied reaction to these negative situations will affect your well being now, and in the future.

Having said that let me come down off my soap box and talk about my factual experiences with Franchising. Theres a saying Walk in the other persons shoes before you comment. I have walked in these shoes and there are pluses and like life, aspects which are not so positive.

The Franchise name will remain a blur although I will and can say my involvement was in the fields of Australian commercial mowing and commercial cleaning. Two separate businesses run by my wife and I with help from casual staff.

I believe Franchises in these business areas are for first time business owners who want to work either by themselves or may be with another family member. Your must look at what the costs are to you as a franchisee both for entry and exit.

I say on exit because the franchisee name gives you valuable commercial advantage during the time you operate your business and in return, you will pay for this on exit. A Master franchisor who wants a cut of your gross is very limiting and takes a ride on your success for little or no input.

Look for a franchise that has a low to medium entry price for the Franchise, Equipment and Vehicle. Of course you can validate the value be shopping the market and if the Master franchisor lets you do this, take the opportunity. Evaluate what the other established franchises are using, how they started and developed their business. If you cant get straight line access to the existing operators find out why. Ill go a step further, if you cant get this access, dont go further until you get it.

Build the picture of the franchise from this perspective and not from what you are told or advertising you have read.

Ok the business oil painting base point matures like this, what is the monthly payment for the franchise. What is the advertising levy, as most franchises have an amount paid monthly and you can see an audit of this spending. What do you pay for the leads you receive from the call centre? More on this area later. Who will get what money when your business is sold, yes we are looking at the exit policy even before you start. The Master franchisor will want a piece of the action at the end because he has helped you get there, where ever that point is. In my experience generally this is calculated on the good will in relation to the clients and the franchise but not the equipment or assets of the business. Keep in mind this is probably your first time but the Franchisor has done this plenty of times with refinements along the way for his/her benefit.

The new work calls you receive from the call centre is an interesting aspect of the operation. The price per lead can vary depending on the style and nature of the lead. By way of example a lead for a mowing job valued at $50 AUS would be different to a lead for Book keeping services which may have a value of $1,000 AUS. The amount you pay in lead fees will vary and be relative to the mode you are in for business growth.

My tip on this is dont ever think you are paying too much for the leads. The background to this is, think of the time effort and money you would have to spend to generate these yourself. Its far and above the once off lead fee. Furthermore because no one can predict where and for what value your next call will be, the lead fee is a small price to pay. I can say founded on fact, that generally the amount you pay in leads for a month is less than a tenth of the dollar value they generate. Taking advantage of the leads through quoting and client relations do have a feature roll as part of approach to your business but thats for another article. There is plenty of room for Thinking People in business.

Hope this short passage gives you an understanding of franchising from our Australian perspective. We own and operate our own franchise and have made excellent income from our efforts. The past franchise exercises have helped us hone our skills when evaluating business opportunities and I trust this piece will help you.

Glen Rogerson- rro37208@bigpond.net.au

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