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!

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Franchising

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

 

Franchises

  • 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

Supporting Franchisees

  • 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)

Thank you for listening! If you enjoyed this podcast, please subscribe and leave a 5 star rating and review in iTunes!

Links to Resources Mentioned

Tom Scarda
Franchise Savvy
International Franchise Association
The Magic of Choosing Uncertainty
The Newsletter Guru
Stop Waiting For It To Get Easier

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Ever thought of buying a franchise? Expert @tomscarda talks investment, FAQs & what to consider when choosing www.getjimpalmer.com
 

"A franchise is a business with training wheels." Franchise expert @tomscarda explains how to get started www.getjimpalmer.com



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