Who came up with that phrase? Anybody know?  I really like it. I was on the phone yesterday with Michael Haith, CEO of Maui Wowi International. I became a Maui Wowi Hawaiian franchisee seven years ago. Michael and I haven’t talked in over a year. A few days ago he left a comment on my blog and we got back in touch. We got to talking about how my franchise was going (the answer: great), and about the book I have just finished writing, called Franchise: Freedom or Fantasy, which will help people make better decisions about whether to buy a franchise. (The book comes out in June–if you want to be notified when it’s available on Amazon.com, send me an email.)

In early 2002 when I first was investigating Maui Wowi, Michael asked me whether I was running toward something by starting a business or whether I was running away from something. I thought that was a great question. Turns out I was running away from something, namely my being burned out on corporate life and my lack of will to keep at it. I didn’t care what I did, as long as it didn’t involve corporate structure, a boss, and airplanes. And voila, or perhaps a better word would be “Aloha!” I became part of Maui Wowi’s ‘Ohana (Hawaiian for “family”).

In our chat the other day about running away versus running toward, which, by the way, is the subject of a chapter of my book, Michael said, “Well, maybe you didn’t make the right decision, but you made the decision right.” Man, every seven years or so this guy gives me a line I can use for the next seven years! I’ve been thinking about that line since we talked on Friday. It really fits what happened to me in my franchise. I was running away from what wasn’t working for me. I landed in something that was completely different from what I thought it would be: I thought I’d be opening a retail store every six months or so until I had an empire of 10 or more stores generating sales of $500,000+ each. And I’d be directing my minions to do the work while I counted the cash.

Well, it turned out a little differently. There were no good locations at reasonable rents, so I launched the business with a portable kiosk at Yankee Stadium, and then more kiosks at other stadiums and similar facilities. The work was profitable but back-breaking. Despite the heavy lifting, I did enjoy, as one former franchise colleague put it, having my “man license” and driving a trailer around with 900 pounds of stainless steel inside–at least for a while. I realized I could not sustain this unexpected business model for very long (though some in our system do it and love it). I had to, as Michael said, make the decision right. Walking away–as some other franchisees have done–wasn’t an option for me. And do what? Go back to corporate America? Not a chance.

So I changed my business model from retail events to catered events with smaller, portable equipment, and focused on corporations, private parties and colleges. I am solidly on my way to a multimillion-dollar business and have no intention of stopping, and no desire to. I am having too much fun and too much success.  All because I didn’t make the right decision, but I made the decision right. If you know who said that first, let me know.

Tags: entrepreneurship, franchise, Maui Wowi

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I like to think I walk the entrepreneurial talk. In addition to writing about entrepreneurship, I do it. I’ve been doing it for over six years in a national franchise. It’s been a long, sometimes painful, but now increasingly rewarding experience.

The franchisee base of which I am a part is a bell-curve of success–some people are killing it, some are getting killed by it, and most are somewhere in the middle. In the past week there has been an email thread going around from some of the people who are on the left side of the curve. One asks if anyone is interested in initiating a class-action lawsuit against the franchisor for selling them “a bill of goods,” for “disclosure issues,” for lack of support.

Over the years, many prospective franchisees have called me and asked my opinion of the franchise. They want me to tell them whether it’s a good idea for them to become a franchisee. My answer is always the same. I try to discourage people from buying this or any franchise. Not because I don’t like the business–I love it and it’s a big success for me. But people who seek affirmation from strangers to make the biggest financial investment of their lives are getting themselves in too deep. So it’s easier for me to tell people who are interested in this franchise (or others), one or more of the following things:

• Why do you want to buy this franchise? Are you running away from something?
• You’re going to invest $300,000 or more (for those who decide to open a retail store). How long will it take you to make that back, and what percentage return on that investment do you expect? How does that compare to taking the same money and buying a no-risk Treasury bill? Are you just bored? How about getting a job you like better than the one you just took a buyout from?
• Have you ever in your life done anything entrepreneurial? If not, what makes you think you will be successful with a franchise? And if you fail, what happens then? Will you lose your house? Your 401(k)? Your marriage?

One franchisee, who has become a valued business partner of mine doing profitable projects together, saw the email exchange and asked me, “What the hell is going on!?” I told her this: “Ignore stuff like this. Negativity = Failure. Positive attitude + action = Success.”

It is incredibly easy to psych yourself into a tailspin when you own a business. Or to raise yourself up and keep going until you find the formula, the business model, the customer set that works.

I’m a collector of franchising stories, so if you have one, good or bad, feel free to share.

Tags: Entrepreneur, franchise, Maui Wowi, success

[4] Comments

If you are a newly minted entrepreneur, you will need to stop caring what your former work colleagues and your friends think about what you are doing. When I started my business in 2002, my friends and ex-work associates thought I had gone completely nuts. I began as a franchisee of a company with the unusual but catchy name Maui Wowi. To go from being a bigwig at the likes of Ziff Davis, LendingTree and other respectable employers and plunk down a big hunk of cash to wear a Hawaiian shirt and sell smoothies for $5 apiece at events is rather a change of professional pace. Hey, no wonder my friends thought I was nuts!

Within weeks of completing franchise training in June 2002, I convinced the New York Yankees to allow me to run a concession in the Stadium. By early August, I was at Gate 4, right at the entrance, dressed in my wacky shirt, selling smoothies (with rum, lots and lots of rum) from my tiki hut to the well-heeled season ticket holders who sit in the good seats. I was so busy getting my business up and running that I hadn’t gotten around to telling a lot of my friends what I was up to. I will never forget the day my buddy Scott showed up at the stadium. The astonished look on his face when he saw his former publishing industry colleague slinging smoothies to hordes of rowdy Yankee fans was, well, astonishing!  Not only that, but I had also recently memorialized my break from the corporate world by getting a tattoo on my left forearm. When he saw that on top of the tiki hut, blenders, and me in my shirt, well, I don’t think his eyes could have widened any further. I was immensely entertained by the look on his face as my one employee and I frantically made drinks, hundreds and hundreds of them, for $8 apiece ($3 extra for rum). For me, this business was the perfect rejection of corporate life. Rather than selling advertising programs for $100,000 or $1 million, here I was selling instant gratification in a cup. I felt not the least embarrassment for trading in my suit for jeans and an Aloha shirt.

The business has morphed almost entirely since then. I have shifted it from a high labor content/moderate margin to much lower labor and very high margin by dealing only with catered events and getting out of retail completely. I have hundreds of customers, including over 50 colleges, dozens of event planning firms and corporate clients, and countless individuals who book our services for parties.

It’s a perfect business for me. It offers nothing in the way of status, though. For many corporate executives looking to do something else, status is still important. In many businesses you might get into, after corporate life, you can count on your friends not “getting it” and wondering what’s up with you. If you care even slightly what other people think, my advice is not to go down the entrepreneurial road.

Tags: Entrepreneur, franchise, Maui Wowi, smoothies, yankees

[3] Comments

Many people look at franchises when they are cut loose from the corporate world or contemplate a life apart from the mothership. I have been a franchise owner for six years and have learned a lot about how to be successful in a franchised business. I coach many of my fellow franchisees on critical success factors. I receive frequent phone calls from people considering buying into the franchise. They always ask the same question: If you could go back, would you choose it again? The answer is yes, I would, but many franchisees in my system would not. Most people are ill-prepared to succeed in a business of their own. Even though the pitch of virtually every franchisor is that you will be in business “for yourself but not by yourself,” the truth is: success is all up to the franchise owner. Even though the statistics say franchised businesses are less likely to fail, if the franchisee doesn’t execute a well-conceived plan to make the franchise work for her, she still has a high risk of failure.

If you are thinking of buying a franchise, get some advice (but not from the franchisor) on evaluating and increasing your probability of success. There are lots of franchise “consultants” out there, like FranChoice, Entrepreneur’s Source and others. They are perfectly good firms with a great base of knowledge–but they are paid by the franchisor when you buy one of the franchises they represent. So they are not exactly objective. You may be better off finding a consultant or coach who is fee-based and not on any franchisor’s payroll.

A few things I think are important to consider when you are thinking about a franchise are:

• Have you really reached the end of the line with regular employment? It’s so much easier to have a job than a business. Regular paycheck, health coverage, vacation…not so bad! Unless you absolutely, positively can’t tolerate the idea of working for anyone but yourself from now on. If you don’t pass that test, you probably should go get another job.
• Are you falling in love with a franchise concept? Are you thinking that this pig looks really nice with that shade of lipstick? Love clouds your judgment when buying a franchise. The process is a lot like buying a house (and it could cost you as much). There’s a big emotional component to it–and franchisors know this. They will play on your psychological investment in learning about the franchise and yearning for a different life. It may not be possible, or even desirable, to make a decision like this without emotion. But recognize that you are not being totally objective, either. You are being sold, you are selling yourself, and buying into a dream. Dreaming is good, if you can live the dream.
• Do you have the skills to be in business? I’ve seen a lot of IT managers, engineers and other non-sales professionals start businesses and struggle. Not a knock against those folks, but I know of no franchise in which you do not have to be competent at sales and marketing to be successful. A transmission franchise doesn’t require you to know how to fix cars–you just need to know how to get people into your store. That requires outreach, community participation, guerrilla marketing, networking, referral business, and a heavy dose of operating excellence (which the non-sales types often excel at). If you don’t have the skills yourself, do you have a partner or someone who can fill in your gaps? Don’t think the franchisor is going to drive people into your store and all you will have to do is serve them well. Remember, it’s your business, not theirs.

Tags: Enterpreneur's Source, Entrepreneur, franchise, FranChoice, IFA, Maui Wowi, small business

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Many years ago I took at class at Wharton taught by a very old gentleman who owned hundreds of small companies, each under $1 million in sales a year. He was interested in all kinds of businesses, as long as there was no competition, no SIC code (because if it has a business category, there must be other people doing it already), and demand from customers that can’t be easily satisfied. Some examples that have stayed with me over the 20+ years since the class: A business that removed dead animals from farms. “When a horse dies, you don’t go out for bid to see who’s going to remove it!” In another case, he bought a warehouse full of old mainframe punch-card readers and then leased them out for a nominal amount each month to companies that had mainframe programs still running. He would lease them on an open-ended basis. “Just return them when you’re done” was his policy. He’d collect checks for $100 a month for each one…and none ever came back. Once he was in the accounts payable systems of his clients, it cost them more to return the device and take him off the list than it did to just keep paying him! The professor said his businesses existed “in the space between the elephant’s toes,” meaning a niche where no one was likely to find him and he could make good money under the radar of competitors. I never forgot that phrase. I own a business today that’s in that snug space. Not everyone needs what I do, but I’m more or less the only one who does it for hundreds of miles. So customers find me, pay me well, and refer me. One of the keys to success in a small business is finding that space for yourself where customers find you but competitors don’t.

Tags: Entrepreneur, Maui Wowi, small business, Wharton

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