5 Myths About Owning a Franchise

After 26 years of providing dining services to colleges, FDY Inc., a family-owned food service company, began to explore the world of franchising. In 2008, the Charlotte, North Carolina-based business purchased its first Bojangles’.

“We found the perfect opportunity to become a full-fledged franchisee with one of the fastest growing concepts in the business,” says Keith Haywood, vice president of sales and marketing for FDY. The company also provides staffing management services at Howard University and North Carolina A&T, and pursues other business ventures.

Led by Haywood’s father, Floyd D. Young, president and founder of FDY, the business spent about $500,000 to open the Bojangles’ venue at the Charlotte-Douglas International Airport. Haywood says his family members (his mother, Norma Young, is FDY’s vice president) ventured into franchising because they dealt with a lot of franchises in their work on university campuses.

“We saw that there was a demand for national, regional, and local quick-food concepts,” he says. They chose Bojangles’ because they liked the product and the level of support the franchisor offered. And since Bojangles’ headquarters is also in Charlotte, FDY spent three years studying the franchisor’s success, meeting with reps, and developing relationships.

Today, “We attract 1,500 customers per day and we are in the top percentile of all the food offerings in the airport in our food category,” Haywood says. The average Bojangles’ store does $1.7 million in sales a year, which is far ahead of fast-food brands “in our category,” notes Haywood. “Our Bojangles’ franchise at Charlotte-Douglas does almost twice that in sales volume.” FDY also opened a full-service Bojangles’ restaurant in Clemson, South Carolina, in 2008; and another Bojangles’ venue in Washington, D.C.’s Union Station last year.

Despite FDY’s years of running a food management company, it quickly became clear that running a franchise is different. Young and his management team called all the shots at FDY, but that wasn’t the case with Bojangles. If you’re used to doing your own thing, you might not be able to do what you want under a franchise agreement, Haywood says. Not only must franchise owners conform to certain rules and standards such as hours of operation and product preparation, but if they fail to do so, “You can breach the agreement with the franchisor.” However, certain decisions, such as pricing and hiring, can be left to a franchisee. “If you’re trading another entrepreneurial effort for a franchise, it can be a culture shock,” says Haywood.

Entrepreneurs often don’t know what franchise ownership entails, says Robert Purvin, chairman and founder of the American Association of Franchisees and Dealers and author of The Franchise Fraud: How to Protect Yourself Before and After You Invest (John Wiley & Sons; $18.99).

“The conventional wisdom about franchising and the reality in many ways do not line up,” he says. The best way to separate truth from fiction is to educate yourself. Begin by learning about these five common franchising myths.

Pages: 1 2
ACROSS THE WEB
  • http://www.skyemediagroup.com/ Skye Media Media Group

    Very insightful. Thanks for the info.