Franchising Your Business: If They Say It is Easy Don’t Believe Them

This past Thursday‚ Friday and Saturday I enjoyed and had the great experience of attending the International Franchise Expo at the Javits Center in New York City. Exhibiting at the show were hundreds of franchisors who were presenting their concepts to the many prospective franchisees that attended. It really is a great site to see and experience and if you think franchising is all about “big business” – it is not. Many of the franchisors were small business owners who achieved success and are working toward expanding their business to the next level through franchising. These franchisors get what it means to work hard and build a business.

As I Walked Through The Show I Was Solicited by a Certain Franchise Consultant…

Not only am I a franchise lawyer but I am also the managing member of a national franchise company – ECOMAIDS. As I walked through the show an exhibiting franchise consultant had approached me about franchising my business. He saw the name of my company and didn’t realize that ECOMAIDS was already a franchise. Also he didn’t realize that I am a franchise lawyer. What follows next were some of the outrageous claims that he made to me:

1. They can franchise my business and I wouldn’t have to do anything – they took care of it all;
2. I don’t need a lawyer because that just adds expense and they have their lawyers review the “stuff”;
3. The only thing I should be thinking about is what fees I should be charging;
4. I don’t necessarily need a registered trademark;
5. Once I franchised I would be making big profits..

[Disclosure: Please keep in mind that the “consultant” is just one company and that there are many hard working franchise professionals and consulting companies that do the right thing. So what I am talking about here is just about one alleged consultant (with some fancy displays and brochures) that I found to be so off base and harmful that I had to write about it]

This Consultant Couldn’t Give a Dam About My Business and the Advice was Bad

So the consultant just kept going on and on about the riches that wait ahead. He couldn’t care a damn about my business and the information that he offered was so off base‚ it was harmful and quite offensive. You see‚ in complete contrast to this preying consultant‚ I found many‚ many start-up franchisors were working hard to expand their business and brand through franchising and doing right by their future franchisees.

These start-up franchisors have gone through the franchising process and while almost all were really glad they are following a franchising business model‚ they can all tell you that franchising requires persistence‚ hard work and active engagement in the franchise development process. I was glad to meet with and share experiences with these people.

For those considering franchising beware of those who may just be selling you some packaged service that puts form over substance and‚ in the end‚ couldn’t care about whether your franchise business is a success. If you are not prepared to work hard and actively engage in the franchise development process then stay away from this business model.

But…if you are ready‚ with the right plan and execution‚ a worthwhile goal may be just ahead. Remember though nothing comes easy and if someone promises you otherwise‚ I suggest that you walk away.

Answer Key to Questions 1-5

1. They can franchise my business and I wouldn’t have to do anything – they took care of it all.
   This makes no sense. When you franchise your business you must be actively involved in the process. Your franchise systems must reflect your business model‚ your business goals and what will work best for your new system.
2. I don’t need a lawyer because that just adds expense and they have their lawyers review the “stuff”.
   Franchising is very much a legal process. So an experienced franchise lawyer is required. In fact the biggest problems that start-up franchisors run into in their first few years as a franchise system are usually legal‚ i.e.‚ when their FDD disclosures and registrations are deficient. So make sure you work with a trusted and experienced franchise lawyer who is accountable to “you” and not someone else.
3. The only thing I should be thinking about is what fees I should be charging.
   This is silly. You need to be think about everything that will relate to your new franchise system including how to set it up‚ the right systems to follow‚ who to work with‚ how to launch and what is involved in the franchising process.
4. I don’t necessarily need a registered trademark.
   This is wrong and a big mistake that many start-up franchisors make. That is they launch with a mark that may not be capable of legal protection. This franchise consultant didn’t seem to even care about this.
5. Once I franchised I would be making big profits.
   This is absolutely the wrong mindset. The goal is not to “franchise your business” but rather to develop a thriving “franchise system” that creates value for you and your franchisees. If you execute well and focus on the real task at hand the profits should come…but not right away.

By Charles Internicola June 23, 2014