and making sacrifices, so make sure you pick something that wins the support of your friends and family too.”
Seid also advises franchisees to select a concept that meets their financial needs and abilities. Too many people relate the word “franchise” to “lots of money,” he says, but that’s not always the case. “If you need to make $100,000 to support your lifestyle and family, don’t pick a franchise that at best can bring in $30,000 a year, because you won’t be happy doing it.”
Wendy Ford, a former systems analyst who left corporate America to start a family five years ago, was already making plaques for local churches when she realized her hobby could be a viable, full-time business.
Two years of in-depth research into both franchising and traditional business options later, Ford and her husband, Glenn, bought a Crown Trophy franchise. They set up shop in Forest Hills, New York, in January 2001 and expect $115,000 in sales this year.
For Ford, the benefits of franchising were clear: in exchange for the $25,000 franchise fee (raised from savings and credit cards) and 5% royalty arrangement, they would represent a brand name with buying power, which translates into a 5% to 10% savings off the goods the four-employee company uses to make its $2 to $250 awards for schools, churches, and sports leagues.
Ford says Crown Trophy also helped with site selection, equipment purchases, and provided a two-week training course. She expects sales to double by July of 2002, and says doing her homework early has played a critical role in the company’s success.
“We looked at various opportunities before choosing Crown Trophy,” says Ford. “By the time we got to them, we were well prepared. We knew enough about franchising in general to make the right decision.”
An important consideration for new franchisees is financing. According to DeBolt, many of the nation’s banks have good track records in working with certain franchise systems, so the best first move may be to discuss your financing needs with the franchisors themselves. Some franchisors already have track records that you can take advantage of and possibly apply for a bank loan through the system itself.
Banks certainly are an important first contact in terms of financing, but if a bank turns you down, look at the Small Business Administration loan programs,” says DeBolt. “There’s a lot of activity in there in terms of franchise lending.”
To steer your franchising efforts in the right direction, consider this additional advice from experts in the field:
Evaluate your goals, skills, and finances. Before you start reviewing UFOCs (which contain information about companies, theirs systems, and copies of their agreements), sit down and evaluate your skill sets, business goals and experience, and financial situation. Be honest with yourself about your own strengths and weaknesses in each of these three areas, then put that information to work in finding the right franchising match.
Be realistic in your expectations. DeBolt says too many new franchisees start out with unrealistic expectations about everything from how much money