Stick Like Glue Radio #122 On this episode of Stick Like Glue Radio I interview entrepreneur and franchise expert Tom Scarda. Franchising is often a viable option for business growth and Tom sheds light on this strategy – do not miss this call!
On this episode of Stick Like Glue Radio I interview entrepreneur and franchise expert Tom Scarda. Franchising is often a viable option for business growth and Tom sheds light on this strategy – do not miss this call!
Main Questions Asked
Tell us about your book The Magic of Choosing Uncertainty
What are the best franchises?
Are the best franchises service or home based?
What are some of the ways you can judge a good franchise from a bad one?
What is the investment level one can expect to make for a franchise?
What are some good questions to ask a franchise company?
Is 50 years old too old to get started as a franchisee?
How many franchise concepts are there?
Is there any business that is not a good fit for franchising?
Key Lessons Learned
Choosing uncertainty is the scary area when you are choosing to jump
The real decision is between unhappiness and uncertainty
There are more than 3,000 franchise concepts spanning 90 industries
A franchise offers a proven concept and blueprint that helps with uncertainty
A franchise is a business with training wheels
Anybody can franchise anything as long you get a franchise disclosure document printed and distributed to your prospective franchisees and follow up with the Federal Trade Commission
A business doesn’t have to be profitable to franchise it, rather it’s a matter of if someone will buy it then good for you
Whether it’s a service or product based business, franchising is a relationship business
Franchising is an extremely transparent business model
When you have a franchise its like having stockholders as you have to answer to other people
A bad franchise is something that relies on the personality of the founder
Its not a question of what you are legally obligated to do but what you have to do to make them successful
If you don’t help franchisees be successful you will not sell more franchises and the word of mouth will be that franchisees are unsupported
Choosing a Franchise
Take an inventory of your skills and personality
Ask yourself “how do I want to spend my day?”
Have a business that people ‘need’ but not ‘want.’ You don’t want to be the first thing people cancel when they lose their job or a recession hits
Unsexy businesses like ‘water restoration’ is a great way to go but most people start with a food category in mind
The best way to figure out if a franchise is really good is to talk to the franchisees
The Franchise Disclosure Document (FDD) is a 23 items that every franchise company has to comment on. One of those items is how many franchises left or were added to the system in that year
The FDD has a list of every franchise owner in the country and you are allowed to call and ask questions
Franchise Investment Figures
Service Businesses: $50K – $150K
Small Stores: E.g Subway $200K-$500K
Quick Service Restaurants: E.g McDonald’s, Wendy’s, TGI Fridays, Taco Bell $1-2M
Questions to Ask a Franchise Owner
Now you’ve been in it would you do it again?
What is your vision for the next 5-10 years?
What are the pitfalls I should be aware of being a franchisee through your company?
What are the personality traits of the top performers in your company?
Franchisee Age Range
Owning a franchise is usually someone on their second career
The average age of a franchise buyer used to be 42 yo
Post recession is the average age is now 56 yo (too young to retire but aged out of their job)
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