Finding Your Perfect Franchise - Week 1 of 3

In this episode of the Franchise Freedom Podcast, Giuseppe Grammatico, known as your franchise guide, delves into the essential factors to consider when contemplating franchise ownership. The episode marks the beginning of a three-part series titled "Three Weeks: Finding Your Perfect Franchise." This episode focuses on the crucial question: Are You a Good Fit for a Franchise?

The process of finding your perfect franchise includes three key components: following a system, financial readiness, and time frame. It is crucial to adhere to a proven franchise system, discussing the significance of having the ability to follow processes and procedures meticulously.

Factor 1: Ability to Follow a System. The importance of being able to follow a system in franchising and the value of established processes.

Factor 2: Financial Readiness. The financial requirements of franchising, including franchise fees, liquid cash, and net worth considerations.

Factor 3: Timeframe for Decision-Making. The significance of having a clear timeframe for making decisions about franchising and highlights the implications of territory availability.

By addressing these aspects upfront, you can navigate the franchise exploration process with clarity and confidence, ultimately working towards achieving their goals of time and financial freedom through business ownership.

Tune in to the Franchise Freedom Podcast to learn more about the essential elements of franchise ownership and embark on the path to defining your perfect franchise.

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Transcript

welcome to the Franchise Freedom Podcast
I'm your host
Giuseppe Grammatico
your franchise guide
the show where we help corporate executives experience
time and financial freedom via franchising
thanks for joining us today
uh today's show uh
actually came as a request
and that request was
can you create a
a brief series kind of figuring out
you know am
am I good fit for a franchise
and what does that process look like to
to finding that franchise
so what I decided to do was
to really kind of simplify things and um
put together a three part series
and that series is called Three Weeks
defining your perfect franchise
this is week 1 of 3
and you know
wanted to kind of simplify things
and put things in perspective
kind of you know
a simple way of viewing this
uh to make the um
the due diligence and the research uh
less overwhelming
because a comment I receive is that I'm
I'm really overwhelmed
I'm I'm looking at brands and I
I can't decide
and I'll just take
kind of take a step back and say
let's figure out if a franchise is even a good fit
to begin with
and let's go back to the basic
so what does three weeks defining your
your perfect franchise meaning
we're not saying you're buying a franchise
or investing in a franchise in three weeks
we're talking about you know
in three weeks
really getting clear on the ideal business
and some and starting the due diligence process
and then know
me saying uh
to invest or buy a franchise in three weeks
just just to clarify so
um where do we start
and really you know
this is a process
just like investing in a franchise is a process
which will talk about on the next call
the researching of a franchise
there's definitely a process
and in that process is figuring out if a franchise
is a good fit
uh for you you know
is the is that the appropriate vehicle
and you know
we're making the Assumption that
a business ownership is
is a vehicle and an appropriate fit
uh so in in this uh
in this episode
we're trying to figure out you know
the answer the question
am I a good fit for a franchise
so let let's dive right in
so in figuring out
am I a good fit for a franchise
number one thing to consider is
can you follow a process
and can you follow a system
extremely important
you know what is a franchise
it's a proven process
a proven system
yeah this business has been uh
put together
has been tested
and the franchise has figured out the ideal way
of running this particular business so
um if you have trouble following a process um
or you have ton of experience in a particular industry
and you wanna run the business in a certain way
I would uh you know
venture to say that it's probably
franchising probably is not a good fit uh
and that process starts with our process
if you're unable just to follow the
the basic process of the due diligence process
and the order of kind of how to do things
a franchise may not be a good fit so uh
I challenge everyone you know
that you know
what is a franchise and
and what's the value proposition
and it's really being able to empower people with
a system that can get up and running
relatively quickly
with a lot of the processes and
you know policies and procedures and things like that
best practices all put in place for you
so the importance of are you able to follow a system
are you able to follow a process No.
1 extremely important
so something to think about
No.2 is money
a franchise
is gonna you know
there's gonna be an investment
so once you're awarded a franchise
the first thing you do is
you're gonna pay franchise fee
and what I tell everyone is that these are
you know there's no
no money down types of scenarios
you need to cover
usually the franchise fee
so what does that mean
or franchise fees will vary
and there are gonna be
obviously a
numerous funding options
but you're gonna need at least 50,000 liquid
and about 100,000 net worth
and that's you know
combining your
your vehicles
your your cars
your assets
your investments
all that in the net worth number
but you're gonna need to cover a franchise fee
you know you
you you get an
an SBA loan
you're gonna put down
whatever percentage they require and
and get the proceeds
but typically
the franchise fee is covered upfront uh
some people say
well I don't
I don't have 50,000 like well
there are other avenues
which we've covered in our
in our funding
um podcast how to fund a franchise
your complete guide
and a part of that is
you know being able to use
equity in your home
SBA loans and also being able to use Rob's plan
a retirement
or I should say
a retirement rollover business startup
and as part of that
it's usually coming from old
traditional IRAs or
um retirement plans that you
had with the previous employer so
uh visit that
I'm gonna put that here in the
in the show notes
your complete guide to
to funding your franchise
excellent episode with Terry Thomas
a friend fund
uh so money is gonna be a factor as well
we wanna make sure we have
the money to invest in
the business
uh to get us through
the first three to
six months um
we also if we're
running this
full time and leaving our job
that we have
funds available living
to cover our
living expenses
and we cover that on the
on the funding podcast
and then um No.
3 is time frame
and this is
one that gets overlooked
over and over again
and time frame is big
because when you
are looking
at a franchise
you know it's
it's similar to kind of
buying a home right
it's it's not
when the timing is right uh
you'll place an offer
when you find something you like
you place the offer
and hopefully that offer is accepted
with franchising
your territory
availability
uh whether be a
territory location
is also gonna be a factor
right so if
the territory is
available today
um and you wanna revisit
6 months later
odds are that
territory may or may
not be available
so once you have a time frame of just say
of not opening
but making a decision
I would say
in six months or less uh
that's probably a good time to start
the due diligence process
start talking with
the brands uh
figuring out
you know what territory
there's gonna be an
entire call
on territory mapping
and what that looks like uh
so that's gonna be
extremely important
because you wanna
get that territory
ideal territory location
um set up and
and selected
and then and then
you know if there's
any type of
additions as
zip codes or
additional territory
that's all figured out
so that the franchise
or at some point will
as you move along
the process
and show interest
and commit to a
Discovery Day
where you're actually visiting
the franchise or
they're able to lock
in those territories
so for um X amount of time
assuming the
the franchise
you are awarded
the franchise
you'll be locked into that location of the
or to those
territories
so let's recap
need to be able to follow a
process or system
critical money
uh at least
I would say an average
and this is the
this is averages
and franchise fees will vary of 50,000
liquid cash
uh money markets
cash and things like that uh
and about 100,000
that worth would be a good starting point
and then time frame of six
months or less to make a
decision uh
not to be open in six months
to make that
decision in order
to have that franchise
or being able to
really lock in that territory
and in those locations
so uh funding
you know check that out in
the show notes
uh our new website
uh also has a uh
an option up
top called how
it works uh
if you click on that
it's gonna go through the
uh the this
process as well
and it's also gonna have a
selection on goals
because everyone's goals
are gonna be different
uh so another
another thing we talk about is
what are your goals
are you looking
you know have you lost
your job and
looking to replace
uh are you thinking of leaving
your job and uh
maybe wanna
run wanna run
the business part time
somebody absentee
or are you uh
just looking
for an investment
are you a current business owner
looking to build a diversified portfolio
and it talks a little
bit more about each
I'm not gonna
get into detail today
but if you check
out our brand
new website
uh it's still
the same uh
you know website GG
the Franchise
guide.com.com
and click on
how it works
we go into a lot more detail there so
uh hopefully
found this awful uh
week 2 we're gonna
talk about the consultation
where we talk about
the ideal business
characteristics
kind of your why in
in doing this
in the first place uh
but hopefully
you found this awful
so yeah again
if if you are
not able to
kind of fulfill all three
requirements
a franchise
I may not be a good fit
today you know
maybe maybe
the process
you're okay with in
the time frame
but you're light on cash
and that means
putting together plan of
cutting back on expenses
or you know
saving a little bit more
and revisiting it in
the next six
months great
and you know
we always follow up and
and provide guidance
and feedback
with everyone
we work with um
if you're just
not okay with following a process
then obviously
probably not
not a great fit
but you know
the the time frame could change
uh the money
depending on
you know what
you have access to
you know sometimes
you come across
an investor or partner
silent partner
active partner
whatever that looks like
even maybe the general manager
uh maybe uh
someone that's invested in
the business
where they're given some
equity or uh
they are investing uh
you know some
some capital into
the business
to be a partner
whatever percentage
so three things to consider um
figure this part
out before doing
anything else
and starting to look at brands
and all that
and I think
that'll help with
um making the
process a lot easier
less overwhelming
you know reduce that anxiety
just make it
fun you know
you know being
very clear on there
and then we'll
get into what
the business looks like
and then we'll get into
the specific brand
so hopefully
you found this
helpful again
thank you for
your feedback
thank you for
the recommendations
on this and next
it's gonna be
week 2 or 3
we'll go through
the consultation
what the ideal business looks like
and we'll spend a
lot of time there
thanks for joining us today
and talk to
you guys soon bye