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A Dangerous Post for Potential Entrepreneurs
Posted by Mitchell York under Franchising
Browsing through my Google Reader this morning I came upon The Franchise King blog, which is written by a franchise broker (someone who is paid by a franchisor when a prospect he brings in buys a franchise). The post starts with a photo of a family (above). The headline:
“Microsoft is getting into the downsizing game, and in a huge way. When Microsoft fires 5,000 of it’s [sic] workers, all of us need to take notice….”
It goes on,
“Do you realize that 5,000 families have been impacted? This is the real story. I remember the 3-4 times when it happened to my dad. I remember the look on his face, each and every time it happened. It was a mixture of anger, sadness, and worry. As kids, (3 of us little munchkins) it was quite scary. Now, there are 5,000 families feeling what our little nuclear family felt. They are feeling it today. The question one needs to ask themselves [sic] is this: “How many more times will I have to feel this way before I get the courage to start owning what I do?”
Can you hear me over the movie soundtrack of the King’s melodrama? I’m hearing a John Williams-y score reminiscent of gathering storms: timpani drums, brooding cellos, a French horn perhaps. I give him credit for going after the laid-off ‘Softies – if anyone has money to spend on a franchise, it’s probably those folks.
The King’s line of reasoning plays on the emotions of potential readers. It is very appealing to say to oneself, “This time I’m gonna stick it to the man and be my own boss!”
The King will probably make some good money this year selling franchises to families on the rebound. I am a franchisee myself, in addition to being a coach to entrepreneurs. I bought my franchise when I was rebounding from a lay-off and a bunch of other things that had me very low. I have been in my franchise for seven years and have been highly successful—I would guess I am the most profitable franchisee in my system—but my decision-making process was all wrong. I was running away from something, not running toward a vision of my future. And I was highly susceptible to the sales pitch of a franchise broker who was a little more subtle than the King, but just as effective.
If you have been laid off, there is a process you can go through to get to a place where you can make good decisions about what to do next, and to evaluate whether getting another job or starting a business is the best solution. The first step is to ignore the pleas of people trying to make money off your hardship. If you want to know other steps in the process, get in touch with me. If you have advice of your own on this issue, please comment here.
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January 29th, 2009 at 7:05 am
Hi Mitchell,
Thank you reading my blog post. You are certainly right about a couple of things;
1. I am a franchise broker
2. I get paid fees by franchise companies
3. There is a certain process that one must go through, when investigating a franchise opportunity
I think you owe it to yourself, and your readers to learn a little bit more about Joel Libava. His philosophy on the franchise industry doesn’t please a lot of franchise industry executives, sometimes.
He was trained by one of the 1st franchise consultant/brokers in the country, his late father, Jerry Libava. Jerry’s philosophy was passed down to Joel. It was this:
“Only do what is best for the folks that you meet up with.”
Profit is not a dirty word, Mitchell. It is only a dirty word when you take advantage of people.
Ask around. I don’t meet with most people who say that they are interested in owning a franchise. I tell them to get a job, if I do not feel that they can be successful as a franchise owner.
There are way too many brokers who have been sold a bill of goods, and are trying to recoup their own investment, and will meet with anybody, if they feel that they can make a commission on them. Most of them are phone-jockeys, who don’t even work with residents in their own communities. You had a negative experience with your broker. I am truly sorry.
Do a search of “Joel Libava” on Google. Or not.
Oh yeah. Buy my book. Just go to http://www.FranchiseResearchSteps.com
More huge profits being made on that.
The Franchise King
Joel Libava
Cleveland
January 29th, 2009 at 8:05 am
Excellent post, many thanks Joel. For the record, my franchise broker, Karol Mercurio from FranChoice, did a fine job and I had a great experience with her. It’s not her job, or any broker’s job, to be a judge of where a potential franchisee’s head is at when they click on the ad or pick up the phone. In retrospect, I have no regrets at all because I have been successful in my franchise. My caveat is for people to know what “consultants” do and how they are compensated–transparency is what’s important. Many thanks again for the thoughtful post.
January 29th, 2009 at 9:06 am
Which is why in all that I do, I AM transparent.
She is not with Franchoice anymore, BTW. Carol and I have talked in the past.
You did slam me, and it was totally unjustified. I gently suggest that you do your homework before you assume things about others, and why they write the things they do..
JL
January 29th, 2009 at 1:33 pm
Joel, my homework was reading your column and commenting on it. It speaks for itself. But I appreciate your suggestion and appreciate the debate.
March 11th, 2009 at 8:21 am
Well guys, I didn’t work with or through a broker when I acquired my franchise, but I did enjoy your discussion, and, knowing Mitch, I know that his comments are meant to inspire us to look closely at our particular reasons and comfort zones when considering a franchise business. Both Mitch and I have witnessed personally many failures of franchisees due to inadequate or incomplete self understanding of the challenges facing the independent business owner. Many of my acquaintances are very surprised when they hear of me working full time on my business - they just see it as a weekend thing. I have pointed out to many potential franchisees that they will spend more time at work for themselves than they did working at a job before if they are to be successful. I have had many people ask me when will they “break even” on their business, and they are somewhat frustrated when I tell them that there is no pat answer to that question. It depends on the person themself. I like the flexibilty of time and place that I have now, but I do miss the people that I worked with for many years. It has required me to be more disciplined in my approach to work than I used to be. If I don’t do it it won’t get done.