have you ever owned any kind of franchise?

[Rocco]

I looked into one a few years back. What they brought to the table for my area was technical knowledge that I may have been missing. Some larger areas where they were real known may have been more beneficial for the name brand and split marketing, but that's it. I decided against it for a variety of reasons.

1) capital up front. I no longer have the resources to pay cash into it I once had.

2) again, regional. The closest store to my area is Denver, 90 miles away. So I wouldn't be able to benefit from a regional marketing plan.

3) The best business practices became moot when I decided to take a few years to learn on my own/through classes. It took me a couple extra years to play catch up, but it was worth it.

Basically, if you want to hit the ground running, you have the resources to pay into it, and you are in an area where it makes sense, then try it. I decided it wasn't for me. I decided the technical knowledge they brought to the table (400+ techs on the board to help out) wasn't worth the money, and since that was the only benefit they really brought to the table, I would strike out on my own. My success has proved me correct.

 

[Cybjun]

I have looked into several franchise for the IT field here in SoCal one of which was Nerds on Site. I also looked at buying another business and running it myself, being an independent and actually working for a small shop. I settled on being an independent that was then hired full time for a small shop before I sold out for a big corporation while doing select independent work on the side.

I liked the Idea of a franchise but none of the models offered support in the areas I thought you would need for an IT service business but instead focused on the retail & marketing sides of the business. I would have loved to not have to worry about my company name, website, fielding IT fix phishing calls from people that had no intention of paying. I would also have loved to not have to find or negotiate/haggle prices with my primary vendors. But not at the cost of being able to select additional vendors. Having been at this for a few years in a variety of capacity I will say the underlining reason that franchise don't work for IT-type businesses is you cannot package technical skill and customer service which is really what you are selling.

 

[16k_zx81]

Some very interesting food for thought here. Thanks to everyone who has contributed.

Its not actually an IT franchise, necessarily; we are looking at several businesses. Some of them are in different fields.

The concerns and issues raised here have given me some things to consider when we approach the vendors in terms of questions to ask and things to get assurances on before we take any further steps.

Much appreciated

Jim

 

[mr m]

A couple more caveats for you. The franchisor, by law, is not allowed to predict, estimate or tell you what your potential income will be or what other owners earn. The only way to know is to call the franchisees listed in the prospectus and ask. The franchisor will tell you what the average sales are per store, per square foot etc.

All current and previous owners will be listed in the prospectus. Call them both. Some people would not talk to me at all. Others were surprisingly candid about their incomes and experiences.

The synergy of a franchise makes perfect sense but beware. I have a UPS shipping store as a client. It's on its third owner in 7 years. Another client, a franchised print shop kicked out the franchisor and went independent after a few years.

 

[Rocco]

Well, if we are not talking IT industry franchises, then it becomes more of a what works for you kind of thing. We had a Hooters open up here about 6 years ago. However, the old people in the city council would never approve them having a license to sell beer because they thought of it as a glorified strip joint. Wouldn't even try out the chicken wings.

So without being able to serve beer, they closed down within 6 months.

I would love to see a Popeye's open up here. We have 1 KFC and 1 Chick-Fil-A. So a definite lack of places that serve chicken. However, we support 2 Wendy's, 6 McDonalds, 2 BK, 4 Taco Johns, 2 Taco Bells. So I certainly see a place for another chicken place with a drive thru here, since the only one with a drive thru is KFC.

So look at your area. Does a brand name matter where you are?