I was recently at an exclusive, invitation-only conference with executives, founders, and management teams from about one hundred of the top franchise companies in the country (none of which were fast-food franchises) and I wanted to share some of my takeaways with you along with some information on some brands that stood out.
Before I get into the brands, I want to share some observations around some of the frequent questions people ask about investing in a franchise.
Money
How to access the money you need to properly fund a franchise is one of the most common questions bouncing around people’s minds as they research investing in a franchise.
Well, good news…there are options.
For those people who are looking at high-quality manager-run franchises that enable them to keep their jobs while the business grows, most people are taking advantage of very friendly terms and options via loans guaranteed by the Small Business Administration (SBA). Qualified candidates are typically seeing down-payment options of 20% – 30% over a 10-year term with interest rates right around 8%.
For those folks looking at executive franchises they can jump into full time and scale, there are certain loan options that allow them to avoid having to collateralize the loan with personal assets. Yes, you read that right. The short version is you can access up to $150k with a 10% cash injection and NOT have to offer up personal assets as collateral.
Who knows how long these favorable loans options will be available so it’s not a surprise why there are lots of people taking advantage while the lending market is VERY friendly towards funding certain franchises.
There are certain funding companies that specialize in funding franchises, which I’m happy to refer to you to explore your funding options if you want to work together.
Leveraging The Digital World
If you know me, you’ve probably heard me preach about how important it is to understand how strong a franchise company is around customer acquisition. The reality is that any franchise you invest in will require you to invest in certain marketing campaigns to generate leads and customers. Customers are not just going to line up by themselves to give you their money.
Well, I can tell you the more progressive franchise companies have customer acquisition down to a science AND have figured out how to tap into the growing social media platforms to generate a bunch of customers. This is easier said than done, so you can imagine the level of testing, learning, and investment that goes into figuring out a social media campaign that can drive customers at an affordable investment. It’s almost like these franchise companies have discovered a new pond to fish in that their competitors haven’t discovered yet…
Fast Ramp Up
Presales, presales, presales. Presales are what certain franchise brands are doing to generate a customer base before the doors to the business officially open. It is a HUGE advantage to have as a part of your business model because, when done right, it can help ramp up cash flow very quickly.
Now, onto the fun stuff…
Below are a few franchises that stood out to me at the conference. Each one for a different reason.
If you want to learn more about any of them or want to find some other franchises to research, find a time on my calendar that is best for you which you can do by clicking here: https://calendly.com/dcarpenito/intro
If you want to build an exit strategy from the corporate world…
A publicly-traded company with a strong record of building other franchises it owns into national brand names (a few of which you’ve probably heard of) is expanding one of its young brands that operates in the fastest-growing segment of its industry. This franchise is a manager-run business model so as the owner, you are more behind-the-scenes working through your manager who oversees the day-to-day stuff. It offers a service with very strong and growing demand and is also resistant to recessions…a combination that is quite rare. Prime markets are available but I suspect with the parent company’s track record, they won’t last long.
If you’re looking for a recession-resistant business you can jump into full time and scale…
This franchise stood out because it has incorporated multiple revenues into an already scalable business model. It operates in a tried and true industry offering a professional option for homeowners and building owners looking for certain enhancements and repairs. The management team has operated in the industry for a very long time and has developed some powerful tools to help franchise owners scale efficiently (e.g. centralized call center for customers, internet-based operations software and more). Again, prime territories across the country are currently available. A great option if you want to tap into that loan I mentioned above that doesn’t require personal assets as collateral.
If you’re looking for one of the fastest-growing franchises in the country with a manager-run business model…
You haven’t missed the boat on this one yet, but it’s getting close. A private-equity backed parent company has created one of the fastest-growing organizations in the fitness world. Rivaling Orangetheory fitness even. If you have any interest in health/wellness/fitness or even just franchising for that matter, you should definitely check out what this company is doing. The business model is simple, manager-run, and it utilizes PRESALES! Oh, and there are multiple brands in the portfolio. Oh, and they’re all membership-based, recurring revenue stream business models.
If you’re an early adopter…
A company has figured out a way to take a fresh and contemporary spin on a proven business model and cater to the largest customer demographic in the world…MILLENIALS. It’s kind of like what Apple did with the iPod way back when. This franchise offers a simplified service though a much more appealing experience to its core customers which its competitors aren’t focusing on. Its business model is manager run and right now they are looking for those early adopters who are comfortable being at the forefront of a new spin on a proven category.
If you’re looking for a business that fits well into one of those empty K-Marts, Sears or big box shells…
And I’m not talking about a trampoline park. What I am talking about is a business that helps kids through a very unique service in a very fragmented market. What’s really exciting is the proprietary technology the company has developed that caters to the parents of the youngsters and delivers an amazon-like user experience that’s a cinch to use and keeps them coming back! Its founder also has an amazing story and has some relationships with high profile athletes that help generate buzz and interest. And finally, there are some very successful, experienced franchise entrepreneurs gobbling up licenses around the country. So, if you’re looking for a franchise where successful franchise operators are investing in, that data point exists here (along with a few of the other brands I’m mentioning).
And finally, if you’re looking to make a more moderate investment in a business that also helps kids and is manager-run…
In fact, this is one of the cheapest manager-run franchises I’ve ever seen. The economics are strong because, in addition to the low initial investment, it leverages a one-to-many labor model which reduces labor costs and adds more to the bottom line (not to mention reducing the number of employees required to operate this business). This franchise was founded by a 30-year industry veteran who has developed some of the strongest business systems in its entire industry which helps franchise owners compete extremely well with the less sophisticated, fragmented competition.
Here’s what to do next if you want to learn more…
Find a time on my calendar for us to have a quick chat and we’ll take it from there.
You can access my calendar here: https://calendly.com/dcarpenito/intro
I know about a lot of other high-quality franchises, so if none of these seem interesting to you and you are serious about starting your own business, I’m still happy to chat with you.
Just book a time to have a quick chat here: https://calendly.com/dcarpenito/intro
Cheers,
Dru