Millions take the franchising path, but it's not for everyone

In the United States, franchisors are getting about one-fourth the potential franchisees they did in the early 90s, because laid-off workers can find jobs in the booming U.S. economy.

The London Free Press
August 18, 1999

Millions take the franchising path, but it's not for everyone
Jan Norman

After more than 20 years in the computer industry, Fran Ratcliffe no longer enjoyed her work.

Although the Orange County, Calif., resident planned on getting a new job, she figured it wouldn’t hurt to sit down with Rick Eggleton, president of FranNet of Southern California, to assess if she was suited to owning a franchise.

“FranNet doesn’t sell franchises,” Eggleton said.

“We help people construct their ideal business model (based on) their goals. Then we figure out what makes sense for them. Sometimes that’s franchising; sometimes not.”

The re-evaluation led Ratcliffe to buy a Speedpro Signs Plus franchise in Mission Viejo, Calif., this year.

More than nine million people own at least one franchise in dozens of different industries, ranging from auto repair to accounting to restaurants.

Franchising long has been touted as a way to go into business for yourself, not by yourself.

But for some, it is an expensive path to a glorified, low-paying job.

Business ownership, in general, and franchising in particular, isn’t for everyone, said Eggleton, who has owned several businesses and franchises.

“Some people just ought to have jobs,” he said. “I’m up-front about that.”

“The way franchises are sold has changed materially in the past three years,” Eggleton said.

In the United States, franchisors are getting about one-fourth the potential franchisees they did in the early 90s, because laid-off workers can find jobs in the booming U.S. economy.

And franchisors no longer try to sell to everyone who has the initial fees, he adds. “Good franchisors want to replicate their top 20 per cent of franchisees.

An individual’s net worth is not the sole concern of many franchisors these days.

After selling franchises since 1991, Speedpro Signs Plus in Irvine, Calif., about two years ago evaluated the skills and traits of its existing franchisees and developed a profile of an ideal franchisee, said founder and president Blair Gran.

“We’re more concerned with franchisees’ skill sets than we were eight years ago,” Gran said.

“This is a relationship-building business, so we look for people who are more extroverted.”

Ray Barton, chairperson of Minneapolis-based Great Clips for Hair, which has 1,300 franchisee hair salons, said, “You have to be able to follow a system. You have to be a mild risk-taker, but not a real entrepreneur” compelled to change the system that is the foundation of the franchise success.

Before shopping for a franchise, look at yourself, Eggleton advises. Do you want a Monday-through-Friday business? If so, you don’t want a restaurant.

Do you want to build wealth?

Then you want a company that will allow you to expand to multiple locations.

Former Irvine residents Michael and Gillian Campbell looked at sign and computer-repair franchises before buying the Copy Club West prototype shop in San Diego.

“We realized we needed an existing business with positive cash flow. Some franchises take more than a year before they make money,” Michael Campbell said.

Why not buy an existing independent business?

The Campbells wanted a franchise “because we’ve never owned a business before,” explained Gillian Campbell.

Ratcliffe chose Signs Plus.

“I want to work Monday through Friday. I need to be creative. I love being on a peer level with my customers; I’m a small-business owner selling to other small-business owners.”

Finding the right solution to individual needs doesn’t happen without research, Eggleton said.

“I believe in informed decisions, so I really load clients with homework, a four-step research process and a list of 500 possible questions to ask,” he said.**
Jan Norman

After more than 20 years in the computer industry, Fran Ratcliffe no longer enjoyed her work.

Although the Orange County, Calif., resident planned on getting a new job, she figured it wouldn’t hurt to sit down with Rick Eggleton, president of FranNet of Southern California, to assess if she was suited to owning a franchise.

“FranNet doesn’t sell franchises,” Eggleton said.

“We help people construct their ideal business model (based on) their goals. Then we figure out what makes sense for them. Sometimes that’s franchising; sometimes not.”

The re-evaluation led Ratcliffe to buy a Speedpro Signs Plus franchise in Mission Viejo, Calif., this year.

More than nine million people own at least one franchise in dozens of different industries, ranging from auto repair to accounting to restaurants.

Franchising long has been touted as a way to go into business for yourself, not by yourself.

But for some, it is an expensive path to a glorified, low-paying job.

Business ownership, in general, and franchising in particular, isn’t for everyone, said Eggleton, who has owned several businesses and franchises.

“Some people just ought to have jobs,” he said. “I’m up-front about that.”

“The way franchises are sold has changed materially in the past three years,” Eggleton said.

In the United States, franchisors are getting about one-fourth the potential franchisees they did in the early 90s, because laid-off workers can find jobs in the booming U.S. economy.

And franchisors no longer try to sell to everyone who has the initial fees, he adds. “Good franchisors want to replicate their top 20 per cent of franchisees.

An individual’s net worth is not the sole concern of many franchisors these days.

After selling franchises since 1991, Speedpro Signs Plus in Irvine, Calif., about two years ago evaluated the skills and traits of its existing franchisees and developed a profile of an ideal franchisee, said founder and president Blair Gran.

“We’re more concerned with franchisees’ skill sets than we were eight years ago,” Gran said.

“This is a relationship-building business, so we look for people who are more extroverted.”

Ray Barton, chairperson of Minneapolis-based Great Clips for Hair, which has 1,300 franchisee hair salons, said, “You have to be able to follow a system. You have to be a mild risk-taker, but not a real entrepreneur” compelled to change the system that is the foundation of the franchise success.

Before shopping for a franchise, look at yourself, Eggleton advises. Do you want a Monday-through-Friday business? If so, you don’t want a restaurant.

Do you want to build wealth?

Then you want a company that will allow you to expand to multiple locations.

Former Irvine residents Michael and Gillian Campbell looked at sign and computer-repair franchises before buying the Copy Club West prototype shop in San Diego.

“We realized we needed an existing business with positive cash flow. Some franchises take more than a year before they make money,” Michael Campbell said.

Why not buy an existing independent business?

The Campbells wanted a franchise “because we’ve never owned a business before,” explained Gillian Campbell.

Ratcliffe chose Signs Plus.

“I want to work Monday through Friday. I need to be creative. I love being on a peer level with my customers; I’m a small-business owner selling to other small-business owners.”

Finding the right solution to individual needs doesn’t happen without research, Eggleton said.

“I believe in informed decisions, so I really load clients with homework, a four-step research process and a list of 500 possible questions to ask,” he said.


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