Thinking about purchasing a franchise

[nrygiel]

I'm considering purchasing a franchise in the Greater Philadelphia area and the franchise I'm interested in sounds like their business model will make sense for that area. However, this is such a major decision that I want to make sure that I'm not imagining an ideal scenario vice what its really like starting a franchise and what I should be completely aware of and so I am seeking advice on not only risks but also anyone's feedback, lessons learned, or suggestions.

Some background: The owner of the franchise recommended based on my background that I look into partnering with one or two other people (strong sales and management/operations backgrounds). The franchise is a B2B service (janitorial) with start-up/first year costs within my financial range (especially if I partner with 1 or 2 others).

This is also an ideal time for me for transitioning as I am relocating to the philadelphia area (my Fiance's family is from the area), do not have any dependants, and know of alumni connections in PA that I could possibly partner with.

I am a prior Naval Officer with consulting experience, both positions require adherence to guidlines yet encourage autonomy at the same time. This I feel is a good trait for a franchise owner (ability to follow the rules of the franchise while taking responsbility and making decisions for the business). I understand that the learning curve will be steep and will require hard-work, dedication, sacrifice and time to build the relationships and reputation for this opportunity to be successful.

Again, any advice would be greatly appreciated as I want to ensure I do my homework so I know exactly what I would be getting myself (and future family) into.

[Joeb50]

I would be very careful of this type of franchise. Just a few questions, does the franchisor guarantee any clients or do you have to acquire by yourself. If they do is the client base large enough to generate income for you or would you have to fast track getting new clients? Also if he does, do they guarantee a minimum length of time and replace the ones you lose?What is the competition in the area ( other franchises)? Have you talked to any of the other franchisees? On this point talk to other franchisees that you find not the ones the franchisor gives you. Keep in mind that in todays economy a lot of companies are cutting back non essential services (most small businesses can clean their own offices) Just some things to think about. Google the franchise name and ad lawsuits this can give you some good info.

[Steve B]

You do sound like a good fit to operate a franchise. I'm the opposite, so it would be hard for me to give much advice on the topic because I always end up thinking it would be silly to pay someone an on-going royalty when I could just develop the business myself and keep all the money. For you, it might be a perfect fit. Just do your research, crunch the numbers, and move forward (or not).

[Spider]

I think the advantage of a non-proprietory franchise is in the name-recogniition. By non-proprietory, I mean somethiing anyone can create - like a janitorial service - as opposed to a proprietory service - like Snap-On Tools. "The System" seems to me to be too nebulous a thing to purchase - for thousands of dollars up front plus a sizeable royalty. I mean, how complicated would it be to sytemize a janitorial service?

However, a Molly Maid franchise or Serv-Pro franchise are wellknown names that would be worth buying into. If you were looking for help, would Mary's Housecleaning Service or Jim's Water Extraction Service win you over, or a recognizable brand like Molly Maids or Serv-Pro?

People buy McDonalds hamburgers over all others not because McD makes better hamburgers but because of name recognition. If I were buying a janitorial franchise, I'd want to own a brandname that is already a clear winner, not an up and coming company no-one has heard of.

[nrygiel]

These are all very good points, after looking at their disclosure document I'm now looking at other alternatives. Steve, very good point about the royalty and there are so many other additional costs that this has been a definite wake up call. I'm still open to a franchise but now taking Joe's and Spider's advice on client base and franchise brand. I appreciate the feedback! I'm definitely now open to alternatives to franchising as well.

[Spider]

Entrepreneur.com used to have specific manuals for starting up specific businesses - I don't know if they still do. Truthfully, though, I wasn't particularly impressed with them - they were too simplistic, but as a starter they might serve. There are plenty of Business Plan providers of generic but business-specific business plans on the Web that would give you a good introduction. Plus which, many types of business have trade associations that may have Business Start-up Manuals on offer. I had a very thorough 3-ring manual from an airconditioning contractors association once that went into that business in great depth. So, there is a great deal of information out there from authoratative sources.

Also, check with your city council. Houston has an office called Houston One-Stop, that prepares a package for anyone enquiring of all the rules, regulations and city laws from all government departments for any specific type of business you may wish to start. I don't know if that is just a Houston thing or whether One-Stop offices exist all over. Ask at your local library, reference section, for details of this and many other things you will need to know. Make a friend of your local librarian - they know everything and what they don't know they know someone who does!

[Steve B]

Other than buying instant name recognition (i.e. McDonald's), the only other reason I can see for buying a franchise is if you would otherwise be clueless on how to run a business. The good ones give you very specific procedures and systems to follow. They also might give you great training in a skill you wouldn't otherwise have. In the janatorial world, I don't think the skills are so hard to come by and the procedures so hard to develop that you could justify paying someone else a cut of the proceeeds forever and ever and ever.

I would never consider a franchise because it would defeat the whole purpose of "being on your own" for me. But, I know a guy who bought one and is very happy. They tell him exactly what to do (he's not allowed to think on his own) and he does it. He's got a more profitable business than I do - so it was a good fit for him.