From Mike Colwell of Biz I learned about Franchise Interviews which is another resource for those interesting in franchising. The site has several interviews with successful franchisees, franchisors and franchise experts (including lawyers).
I listened to the interview with leading franchise lawyer Kevin Hein of the Denver office of Snell & Wilmer. ( An interesting interview but the actual interview does not begin until 24 minutes into the 1 hour program). Hein shared insight on what is necessary for a successful franchise concept. His four points:
- Unit economics – How much can individual franchisees make? Will it generate revenue to cover expenses, pay a reasonable salary and give a return on investment?
- Reasonable Demand for the Product – sometimes franchises may have unique niche, yet no significant demand. A franchise must have real interest.
- An easily replicated system – The more detailed the system the harder it will be to replicate. Are you able to give the same customer experience no matter the market or region.
- Unique marketing proposition – How do you stand out?
Later in the program Hein struck a chord with me when he warned about franchisees "buying themselves a job". I have noticed that many franchisees do not carefully consider whether they will receive a return on investment when purchasing a franchise. Obtaining a return on your investment may be difficult with many franchise concepts – so be sure to analyze potential revenue and conduct your due diligence.
P.S. Another resource to check out is Seeds of Growth which is where Mike spotted the link to Franchise Interviews. It features some great posts to help your business grow.