Hey everybody,

A couple months back, I did a Q&A webinar, and you brought great questions.

Specific brands, weird ideas, the kind of offbeat stuff that only comes up in real conversation. 

So I'm pulling the best questions and giving you the unfiltered answers.

Let's go.

No. Don’t. Please.

I mean that. We have too many franchises already.

If you're dead set on it, here's what you need: a team that's done it before, a board that's done it before, and more capital than you think. We're talking multiple seven figures to do it right.

And here’s the biggest thing: when you launch a franchise, your customers aren’t your customers anymore…your franchisees are your customers. 

And franchisees need the MOST support at the beginning…right when you're getting the LEAST revenue from them.

It's the difference between flying a plane with your private pilot's license and selling passenger tickets. You’re responsible for other people’s success now.

Franchisors have a fiduciary responsibility to franchisees. Your priorities have to shift. Most people don't take that seriously enough.

So yeah. Don't franchise your business.

Often the numbers are 6-9%. Sometimes it’s as high as 12%, but that's rare.

Here's the thing: don’t look at the percentage in isolation. You have to look at it in the context of the economics.

A high-revenue, low-margin business is going to feel a 7% royalty very differently than a low-revenue, high-margin business.

And sometimes, it’s worth it. 

So always ask: what's this doing to my bottom line?

→ Read more: Are franchises worth the fees you pay?

Look, I could say whatever I want about myself. But read my stuff and decide for yourself.

What I will say: I'm not a blind cheerleader of franchising. I've been a franchisee for seven years across two brands. The majority of my net worth is in franchises. I have no intention to leave the industry.

My entire day is spent on Zoom calls talking about franchises, either helping people buy theirs or working with my team on my own.

The question you should ask anyone: Are they trying to sell me, or educate me?

That's the filter.

→ Related read: What’s the point of a franchise consultant?

Three things:

1. Unit economics. What does it cost to start relative to how those units perform financially? That ratio has to be in check.

2. Growth trajectory. I look for systems that are 1) growing quickly and 2) have the leadership capability to sustain that growth (more on that in point #3). 

Why? Because that's an acquisition pipeline being filled up.

Now, rapidly growing systems can have operational growing pains. But for my situation and my priorities, I've determined that's a net benefit. Your mileage may vary.

3. Leadership. This is the one I missed on my first franchise. I didn't pay enough attention to how closely I was aligned with the leadership and their vision for where they wanted to take the organization.

Here's the thing about brand recognition: outside of McDonald's and Taco Bell, most franchises don't have meaningful national brand recognition anyway.

Even if you took the second or third brand in a category like mosquito control, most people outside the industry haven't heard of it.

So don't buy into anything just because of "ubiquitous name recognition." There should be other ways you're realizing ROI on that franchise fee.

What matters more: the stage of maturity and how it aligns with your personality.

If you like being part of something that's growing fast, where you can help innovate and become a thought leader in the organization, an emerging brand might be great for you.

If you want to show up and be told exactly what to do with zero variability, you probably want something more established.

There's a personality difference there.

→ Related read: 10-unit vs 10,000-unit franchises… which to buy?

I want you to be 75% confident that franchising is something you want to do.

You can't get to 100% until you have the right opportunity in front of you. But you also shouldn't work with me if it's the first time you're hearing about franchising.

From a timeline standpoint: you should be prepared to move forward in the next 90 days, provided you find the right opportunity.

I'm not going to rush you. But hold off on looking at franchises until you're ready to actually move. Because up until that point, your time is better spent getting your ducks in a row and gaining clarity on your situation.

Looking at franchises is the franchise equivalent of scrolling BizBuySell. It's candy. It's not getting you closer to your goals.

If you want a closer look at the journey, here’s my mini-series on what the process actually looks like (you can read the whole thing in 10 minutes).

Here's my take: there's a direct correlation between how much creative freedom a franchisor allows and how bad they are as a franchisor.

If they're like, "Yeah, try selling drinks! Add a bar!"... they probably don't have their stuff together.

The question is: does it move the brand forward? If you approached the franchisor with something that's consistent with their vision and could genuinely move the brand forward, maybe.

But if your first thought is "here are all the different things I could do," you need to ask yourself: Is a franchise right for me? Or is this one right for me?

There you go. The unfiltered Q&A that is probably not what you'd hear from most consultants.

If you've got more questions, hit reply. Or if you're ready to move forward, book a call.

Thanks for reading,
Connor

P.S. I don't go to franchise shows. That's not how I want to spend my weekend.