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I'm The Franchise King®, Joel Libava. I wrote "Become A Franchise Owner!" Ask Me Anything! (About Buying A Profitable Franchise)

♛ The Franchise King®, Joel Libava
Oct 25, 2017

My hardcover book, "Become A Franchise Owner! (Wiley Publishing) has been read by thousands of would-be franchise owners. 

I've been involved in franchising since 2001, and have managed franchise businesses, owned a franchise, was a franchise broker, and I've even sold franchises. 

I provide real-life, straightforward information on how to choose, research, and buy a profitable franchise.

You can find my franchise articles on The New York Times.com, SBA.gov, Entrepreneur.com Small Business Trends, Fortune.com, The Franchise King Blog, and many other online and offline publications. 

In addition, I offer online courses, Ebooks, and Private 1-on-1 franchise ownership consultations

So, go ahead and Ask Me Anything! 

Get the answers to your most important questions about owning a franchise. Real answers. 

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Conversation (57)

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Hello, 

Is Smoothie King a good franchise to invest in for a first timer? 

Oct 26, 11:17AM EDT1

Hi. I'm not really sure. It depends on your skills, and how much money you can invest-and of course, the potential location.

Oct 26, 12:05PM EDT0

I'm thinking about looking into franchise ownership in Chick-Fil-A. What are my chances of getting one as Owner Operator? How soon will I make a priofit?

Oct 25, 11:34AM EDT1

Great question.

The good news: It's only $10,000 to become an operator. (You're not really a franchisee)

The bad news: The company gets 20,000 applications each year. 

Profit comes fairly fast, because of how the business is setup. 

But, you are not an owner. You're a glorified manager. Corporate owns everything-including you.

I hear the money you can make is real good!

Oct 25, 11:38AM EDT1

I am not sure if you can speak to specific franchise but I have been looking at a new contender in the tax prep industry that is proving to be a disrution to the industry based on their business model. Happy Tax is the new player  in the competition and is like H&R Block, Liberty Tax, Jackson Hewitt. They have been named one of the fastest growing franchises  for 2017 and they have a patent pending technology set up. How do I determine in this is the right franchise for me to buy into?

Oct 24, 7:43PM EDT1

Hi...yes, I am familiar with Happy Tax. I've talked with Mario, the founder. (Disclosure: I did a little bit of marketing for Happy Tax last year)

I think it's a good concept, and it seems to be taking off. 

As with any franchise, do good research.

Oct 25, 11:02AM EDT1

Hello Joel

That is kind of the inverse of what you do I guess but working in marketing I get a lot of people asking how to make a franchise of your business (latest was a food chain, the owner thought he can just go with a PDF 20ish page presentation and get someone to buy his "franchise"). So do you advice on that topic?

Oct 24, 1:34PM EDT1

I talk with 10-20 people each and every year about this. They reach out to me and ask if I can help them "franchise" their businesses. This is what I tell them:

1. You need to have around $100,000 at the ready-if you want to do this right. (Plus more for marketing expenses once you launch the franchise business.)

2. It's best to have a 2nd location already up and running, so you can see if it's easy to duplicate.

3. You're role will change from CEO, to franchise salesperson. Be ready for that change. (Yes, the CEO will still be the CEO. But he or she will be selling franchises.)

Oct 25, 11:05AM EDT0

Joel,

Thank you for taking the time to answer our questions.

Is a 6 figure profit (after ramp up) realistic for home based franchise opportunities (assuming good concept and good franchisee for that concept) or is that like looking for a unicorn?

How important is territorial protection?  Do many franchisors over allocate creating a situation where franchisees are eating each others' lunches?

What do you believe provides more value to a franchisee: strong personal support from the franchisor or strong marketing and brand recognition?

Thank you!

Oct 23, 11:40AM EDT1

1. A Six-figure income is definitely possible for a home-based franchise. But, it does need to be a high-level one, with services/products that bring in big numbers. Think sales and/or consulting type franchises. 

2.  A guaranteed protected territory is essential. Period. Otherwise, you run the risk of having a very aggressive franchisee next to you who may sneak in to your territory. 

3. Both-in a perfect world. And the best thing; all you have to do is talk to a lot of franchisees to find out how good the franchisor is...at both. 

Oct 25, 11:10AM EDT0

Obviously there are many franchise opportunities out there.  Some require millions in the bank to just be considered.  My three questions are:

1.  How do you personally evaluate and decide on what type of franchise is worth the return (not speaking about huge franchises such as Dunkin Donuts/7-11)?

2.  As a person who is new to this world but definitely interested in learning more, what are some good resources to use to learn the ins and outs from step A to step Z in regards to franchises?

3.  How do you personally feel about seasonal franchises?  Ones that may be open 7-9 months out of the year?  Obviously there are still bills to be paid during the times that the business is shut down.  I’m assuming that the hope is that the cash flow is enough during their season to offset the times that they are closed, but in your experience, do the franchisees generally own more than one franchise in different areas to supplement their income? 

Thank you for the time and I look forward to your replies!

Oct 22, 7:58AM EDT1

Jason, here ya go!

1. and 2. : I wrote a very-detailed article that will do the job in answering your #1 and #2 questions. Please read the entire article!

This: How To Buy A Franchise

2. I have to tell you; for someone that truly wants to own a "lifestyle" business, nothing beats a seasonal franchise.

For examle, look at a franchise like Spring-Green. (Disclosure, I helped them start their blog and I did some marketing for them several years ago.

This franchisor is in the lawn care business. They do fertilizing and pest control for lawms all over the country.

But, their franchisees have around 3 months off, every year. 

I'm told that they get to relax...go on vacation, until around the end of December. Then it's marketing time. It's time for them to do mailers etc. to existing customers-and to potenital new customers. 

In a perfect world, the 9 months they work every year brings in enough revenue to suport their lifestyle. Best way to find out? Do good research, which includes talking with the franchisees.

Most of the folks who own seasonal franchises only own that one franchise. 

Oct 25, 11:21AM EDT0

Do you not feel that having a franchise is not really like having your own business?

Oct 22, 12:12AM EDT1

Nicz...not at all. 

Owning a franchise is owning your own business. You're just using someone else's idea and system to help you reach your goals. 

Another way to look at it; who is the person unlocking the door to the business every day? 

Oct 25, 11:22AM EDT0

When and where is your book available?

Oct 21, 9:24PM EDT1

It is available in local bookstores, libraries and here:

https://www.thefranchiseking.com/franchise-books-become-franchise-owner

Oct 25, 11:23AM EDT0

How do you believe evolving technology will impact the way we do business over the next 10 years?

Oct 21, 12:32AM EDT1

I have to tell you...

Technology is developing so fast thee days, I don't even know what things and what tools will be out one year from now.

But in 10 years? 

Automation will rule our lives.

Great question!

Oct 21, 2:30PM EDT0

What are the benefits of a franchise over starting my own business?

Oct 20, 12:38PM EDT1

The most important benefit-the one that makes franchising what it is today is the business system. 

The actual business system of franchising is a game-changer. Especially if you don't want to experience the bottomless money-pit that a pure startup can become.

But, there are cons, too.

Read about the pros and cons of owning a franchise 

Oct 21, 2:33PM EDT0

What would you say was the single most influential factor in your business’ success?

Oct 20, 10:11AM EDT1

The fact that I was one of the first people to jump on the internet. And...

I created the first-ever blog solely focused on franchising. 

My internet footprint goes way back. It has changed everything...and my blog led to a book deal. 

Oct 21, 2:34PM EDT0

What kind of experiences have you had owning franchises?

Oct 20, 10:09AM EDT1

Hi Flora,

I learned a lot as a franchisee-that's for sure.

I learned about systems and marketing. And how to sell franchises.

But, I also leanred a lot about me. My makeup. 

That I wasn't a real good fit for franchising. Because rules. 

I found out that I don't and won't follow rules if they are lousy ones.

Oct 21, 2:36PM EDT0

How long did it take for you to publish your book?

Oct 19, 2:19PM EDT1

5 months to write it, and Wiley Publishing published it 3-4 months later.

Oct 19, 5:01PM EDT0

What do you think is one of the most profitable franchises to own?

Oct 19, 8:57AM EDT0

I'll share a profitable sector in franchising.

Disaster cleanup, including mold remediation, smoke damage cleanup, and flood cleanup services are very profitable these days.  

Franchise Direct lists several of them.

Oct 21, 2:41PM EDT0

Are there any mistakes that are easily avoidable as a newbie to franchise & if so, what are they?

Oct 18, 9:52PM EDT1

Lynette,

For sure.

Don't forget aboutsetting aside living expenses for the early part of your franchise startup!

And get buy-in from spouse/significant other, so you are both on the same page. If you don't, it's a mistake.

Oct 20, 8:56AM EDT0

What 3 books would you recommend that every business owner should read?

Oct 18, 8:57PM EDT1

Killing Giants, by Stephen Denny

The Entrepreneur Equation, by Carol Roth 

Lean Business Planning, by Tim Berry

Oct 19, 5:01PM EDT0

What do you know today that you wish you would have known when you first got started as a franchise owner?

Oct 18, 8:29PM EDT1

I wish I would have known that franchises are best suited for rule-followers...not entrepreneurs like me. 

Oct 19, 2:36PM EDT0

What inspired you to write your book?

Oct 18, 7:42PM EDT1

Well, I had been writing articles for several major websites-along with my own blog, and I started thinking that it would be great to write a book. 

A year after that thought crossed my mind, a publisher contacted ME. 

That's how it happened. 

Oct 19, 2:35PM EDT0

Are there any good business resources you can recommend for franchise newbies?

Oct 18, 11:16AM EDT1

There sure are. 

Check out Franchise Business University (Disclosure-I own and operate it)

There's a 100% free online course on franchising there. 

 

Last edited @ Oct 18, 12:58PM EDT.
Oct 18, 12:58PM EDT1

How has building a franchise changed over the past 15 years?

Oct 18, 10:13AM EDT1

Good question!

Today, even smaller franchises-with 20 or so franchise units, can make a big-and fast impact, marketing-wise.

Because social media.  

Oct 18, 12:54PM EDT1

What are the benefits of a franchise VS a  pre packaged business system for you to run?

Oct 18, 9:53AM EDT1

Hi...what do you mean by a "pre-packed" business please?

Oct 18, 12:53PM EDT2
Show all 6 replies

Hello Joel! What do you think is one of the most profitable franchises to own?

Oct 17, 12:51PM EDT1

I'm going to share with you what I think is a real sleeper in the franchise industry-and it's a highly profitable type of business.

Drum Roll Please:

Restoration and Repair. 

Think Servpro and their competitors.

High-margins, and the business serves a "need" not a "want."

Also, if you can become the owner of multiple full-service restaurant franchises, you can make good great money.

   

 

Oct 17, 1:26PM EDT1

What kind of exit strategy do you advise for a franchise business?

Oct 17, 11:57AM EDT1

Great question, Shilpa!

1. You can try to get family members involved, and then "sell" them the business.

2. You can sell it yourself, when you're getting towards the end of your contract's term.

3. You can renew your franchise license, hire a manger to keep things going, and retire-all while keeping income from your franchise business coming in. Every. Month. 

Oct 17, 1:23PM EDT1

How can you make sure to be successful in your franchise BEFORE you buy in?

Oct 17, 3:48AM EDT1

Paulynna,

The best ways to increase your chances of success as a franchise owner are to:

Choose a franchise that really fits what you bring to the table. (Your talents)

Do amazing research.

Make sure you have your family's support.

Make sure you have enough money to start your business-and to keep your business going, early on. 

Oct 17, 10:23AM EDT1

What are the three most important variables to monitor within your business?

Oct 17, 3:22AM EDT1

Great quetion.

1. Expenses

2. marketing/advertising results

3. Employee productivity

Oct 17, 10:17AM EDT1

What exactly is a franchise and how would you go about starting one? Would it take awhile for it to become profitable or successful?

Oct 16, 10:36PM EDT1

Brandon,

A franchise is basically a license you purchase to own and operate a business using the franchisors name, brand, and business system. 

You pay a Franchise Fee upfront, and monthly royalties...usually a % of your sales.  Read the article I wrote for the SBA for more info on fees.

As to profitability as a franchisee...

Figure (in general) that you'll make no money-or very little money, in the first year of operation. Profits come after break-even is reached and revenue increases. 

Oct 17, 10:16AM EDT1
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