When it Comes to Franchising...Don't Buy the Ice Melt!

Posted by Jim Otto on Tue, Feb 14, 2017 @ 17:02 PM

dontbuyicemelt.jpgYou know, several weeks ago our local weatherman here in Kansas City started talking about a major ice storm. When the local news came on they would open up with the scary music and the big graphics that filled the screen, "ICE STORM 2017".  Of course, there were long lines at the grocery stores and bottled water supplies quickly dwindled. However, one report that really fascinated me was from a poor, exhausted individual at a local convenience store who had been to 7 stores, and still couldn't find any ice melt - everyone was sold out! 
 
Well, you probably know where I am gong with this. The big storm never came. If the people who had gone out in a panic had done a little homework, they would've noticed that it was a one day event where the weathermen expected it to be back in the fifties in a couple of days. In other words, if you could survive for 24 hours, you were probably going to be just fine!
 
Unfortunately, franchising is a lot like this. We are constantly  amazed by some of our competitors who claim things like, "We are growing at 500 percent! We have 16 markets that are sold out! We are the best children's salon franchise in America!" One recent competitor of ours making such claims just bought the concept from a previous Franchisor competitor only two years ago! Wow! If we would have known that we could have learned everything about our business in a couple of years, then you can bet that we would've franchised it along time ago (because we ran the concept for 12 years before we franchised it). You see, what they are really good at is selling franchises - not running the concept that they are selling. 
 
So let me give you some advice: do your homework! Ask how long a franchisor has been running the concept, ask if they are currently running the concept, ask how many franchise locations have closed and for goodness sake's call the franchisees and see if they are getting the training and support they need. The moral to the story here? A lot of franchisors sound just like our local weatherman, and a whole lot of people went out and spent money on ice melt when they really shouldn't have!
 
Shear Madness Franchising franchises Shear Madness Haircuts for Kids salons. We have worked with franchise stores in providing franchisee support (in order to encourage continual growth), and have sometimes seen the unexpected happen!  When it does, we help by identifying and helping with challenges that might arise for franchisees. Additionally, we work to present options that can help prevent these events as well. As many franchise owners may not have opened a business before, having someone who can advise them is a significant advantage of franchise ownership!

Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own successful small business? We are one of the fastest growing kids hair salon franchise systems in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, how to grow your small business, or how to become a successful owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD

Exploring a Children's Salon Franchise 

Topics: franchise buyers, buying a franchise, Shear Madness Haircuts for kids, how to buy into a franchise, how to franchise, franchising, franchise ownership, why buy a franchise, franchise success

Seven Things Every Franchisor Should be Doing

Posted by Janon Otto on Tue, Feb 14, 2017 @ 17:02 PM

7things.jpgMany business owners will often take a look at their business and ask, "how can I grow?". Friends will look at them and say "Hey!  You ought to franchise!".  Sounds good - franchise your business!  Easy, right?!  Just find some people who want to do what you do, teach them to do it, and then sit back and collect all that royalty! Wow - So Easy!

WRONG!  Running a franchise is work!  It is running a business that is totally different than the business that you are franchising. If you're someone who is thinking of starting a franchise, or buying into one, you'll want to remember the list of the seven important things that the franchisor had better be offering their franchisees. If they aren't, then the system is not worth doing or investing in!

1.  Putting franchisee profits first!  

2.  Staying current with all marketing methods, evaluating them as they relate to the franchise business, and teaching franchisees about them.

3.  Continuing to develop the concept so that it stays up to date with the times and trends.

4.  Developing standards to help all franchisees evaluate their success or areas that need improvement. As an example from a salon business standpoint, this would be such relevant information as how many haircuts should a stylist perform in a given time period, how to figure out what to pay your stylists, what products to offer in your store, etc.?

5.   Developing benchmarks  for success.  How is each franchise doing compared to others in the system?  Are all franchisees given access to the best information?

6.   Continually developing new content that potential customers see as fresh.  Website, social media platforms, in store materials, etc.

7.   Constantly improving franchisee support - both access, systems, & communication.

Shear Madness Franchising franchises Shear Madness Haircuts for Kids salons. We have worked with franchise stores in providing franchisee support (in order to encourage continual growth), and have sometimes seen the unexpected happen!  When it does, we help by identifying and helping with challenges that might arise for franchisees. Additionally, we work to present options that can help prevent these events as well. As many franchise owners may not have opened a business before, having someone who can advise them is a significant advantage of franchise ownership!

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Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own successful small business? We are one of the fastest growing kids hair salon franchise systems in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, how to grow a small business, or how to become a successful owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD

Exploring a Children's Salon Franchise

Topics: salon franchise, franchise buyers, buying a franchise, how to buy into a franchise, Small Business Franchise Information, how to franchise, small business how-tos, growing a small business, franchising, franchisee support, franchise research, franchise growth, franchise ownership, why buy a franchise, franchise success

Why Your Franchise Business Doesn't Make Money

Posted by Jim Otto on Mon, Jan 16, 2017 @ 12:01 PM

Notmakingmoney2.jpgAs the Director of Franchising here at Shear Madness Haircuts for Kids, one of the first questions I usually get asked is, “How much money can I make?” My response is always muted because the FTC doesn't allow us to answer that question. However, for those of you reading this who are new to franchising, you can find the answer to that question in the Disclosure Documents in Item 19 that you receive from a prospective franchise. Also, some franchises may choose to disclose those numbers but have the right not to, so that really depends on the franchise you are looking at. But at the end of the day, my typical response is to answer a question with a question, which is, “How hard are you willing to work?”

Most franchisors will tell you that the biggest variable in any franchise system is the owner operator. Take Shear Madness Haircuts for Kids as an example. The store was opened by Paula Thurman in 1997. Since then, Paula has run the concept in many different economic environments, all kinds of weather and all kinds of major events. Through it all, the store has made money! But the bottom line is it still took hard work and perseverance. From moving the location three times to, to staffing the store properly, to delivering the kind of customer service that all small businesses need to deliver. This brings me right back to the question I get asked in regards to how much money can be made at running a franchise. I'm not trying to over simplify this in any way or tell you that any one concept or system is perfect - including ours at Shear Madness. What I am trying to tell you is that regardless of the franchise you select, it's going to take a lot of hard work, a lot of perseverance, and maybe a little luck to succeed! So the answer to the question of “how much money can I make” always begins with the owner and operator of the business. Unfortunately, franchising is not a failsafe business model, and it will still rely on the concept, location, marketing and many other variables for the business to succeed and prosper. But the most important factor is the owner operator, and that could be why your franchise is not making money!

Shear Madness Franchising franchises Shear Madness Haircuts for Kids salons. We have worked with franchise stores in providing franchisee support (in order to encourage continual growth), and have sometimes seen the unexpected happen!  When it does, we help by identifying and helping with challenges that might arise for franchisees. Additionally, we work to present options that can help prevent these events as well. As many franchise owners may not have opened a business before, having someone who can advise them is a significant advantage of franchise ownership!

Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own successful small business that provides a positive experience in helping children and their families? We are one of the fastest growing kids hair salons in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, how to grow a small business, or how to become a successful owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD!

Item 7 Download

Topics: Shear Madness Haircuts for kids, how to franchise, Business Tips, small business how-tos, business growth, franchising, franchise ownership, business success, franchise success

The Big Red Flag of Franchising!

Posted by Jim Otto on Sun, Jul 17, 2016 @ 22:07 PM

Bigredflag.jpgPeople are requesting information about our franchise on a daily basis. The two most often asked questions I get are, “how much does it cost?” and “how much can I make?” These are questions that most interested franchise buyers have the right to know. If I may, I'd like to offer prospective buyers a question that would answer the other two and save everyone a lot of due diligence and research. You see, I think the most important question that franchise buyers should ask is, “How many of your locations have closed?”

Closing locations are the BIG RED FLAG of franchising. Why? Closing locations are a sign of several franchising problems.

Number one (and the one most people don’t ask enough) is that closings are caused because the franchise may not make enough money. This may not even be the fault of the franchisor, it’s just that it may not be a franchisable business model with enough demand from its customers. Remember: most franchising systems need several key components to be successful. The system must be easily taught to someone else, and that person in turn can teach it to someone else. Most successful franchising models create a recurring revenue model that continuous to expand and produce more and more revenue over time. That’s called scalability.

Number two is that closed locations can be a sign of poor support and training. Franchisors that don’t properly train and then support their franchisees usually suffer from lots of closed franchise locations. Running a business is hard and franchise systems that don’t help get their franchises “over the hump” and through the most difficult part of business, the startup, usually have closed locations.

So how do you know how many of a franchisor’s locations have closed?

The FTC requires that a franchise list all of their closings in the back of their Franchise Disclosure Document (also known as the FDD). If there are no closings listed, then make sure that you ask the franchisor to make sure. Under the FTC’s guide for buying a franchise, which you can find online, they'll say that if the numbers show that more than a few franchised outlets have closed, transferred to new owners, or transferred to the franchisor - then it could be due to problems with the franchsor’s support or because franchises aren’t profitable. 

This is not to say that there is a franchising system that exists with no closings. All franchising systems have locations that close. Running a business is hard and it takes lots of time, effort and perseverance to succeed, no matter how good the systems are. Plus, many people just lack the skill it takes to run a business. But if it were me, I'd always be sure to ask the question, “how many of your locations have closed?” Asking that one question will save you a lot of time and money!

Shear Madness Franchising franchises Shear Madness Haircuts for Kids salons. We have worked with franchise stores in providing franchisee support (in order to encourage continual growth), and have sometimes seen the unexpected happen!  When it does, we help by identifying and helping with challenges that might arise for franchisees. Additionally, we work to present options that can help prevent these events as well. As many franchise owners may not have opened a business before, having someone who can advise them is a significant advantages of franchise ownership!

Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own  small business? We are one of the fastest growing kids hair salons and franchise systems in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, business tips, how to grow your small business, or how to become a owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD!

Exploring a Children's Salon Franchise

Topics: franchise, salon franchise, franchise buyers, buying a franchise, franchise opportunity, how to buy into a franchise, Small Business Franchise Information, how to franchise, franchising, franchisee support, franchise research, haircare franchise, evaluating a franchise, franchise ownership, red flag, franchise success

What a Franchise Buyer Wants?  What do they Need? We Asked - The Top 8 Answers Below!

Posted by Janon Otto on Sun, Jul 17, 2016 @ 22:07 PM

franchisebuyersWhat are prospective franchise buyers looking for when it comes to buying into a franchise system? We opened this question up to some of our Shear Madness Haircuts for Kids franchisees, and this is some of the feedback we received. We hope it helps you as much as it did us!

1. Communication is Key: It may seem like a given, but it's true! Franchise communication is important through all aspects of franchising - from being able to effectively communicate with customers, to being able to have great communication channels between potential area developers, franchisors, franchisees, and everyone in between. As such, franchise buyers should be looking for a communication system that ensures consistency and timeliness of communication. Similarly, a means by which franchisees throughout the system can easily and effectively communicate with each other is also very helpful. Many franchisees join a franchise for the systems and support, so it's critical they get it!

2. Process Support and Education: Running your own franchise can be a challenging, yet rewarding experience. That's why when a Franchisee needs help, especially during the start-up phase, there's a tried-and-true system in place that gives them the support they need. This includes great communication channels with the franchisor and other franchisees, as well as franchise training provided through conferences and monthly meetings.

3. First Class Marketing: Franchisees want to know their marketing dollars are going toward creative, expressive messages that effectively reach their customers and help build their business. Some of these marketing efforts might include social media advertising, traditional advertising (newspapers, magazines, ads in sporting venues), posters for the store to use, banners for outdoor advertising, and much more!

4. Transparency: Franchisees want to clearly see evidence of the franchisor's support of the franchisee's efforts to attain and maintain success. There needs to be the feeling in the franchisee's heart that every day, everyone is working towards success.

5. Independence, Flexibility and Personal Challenge: Many franchisees are seeking to escape the politics, rigidity and frustration of working for others. But they also don't want the risk and harsh learning curve of trying to start a business entirely on their own. Franchisees are also highly motivated by achieving results directly linked to their own creativity and hard work. A successful franchise system allows for all these things!

6. Respect: Each franchisee is going to have different motivations, but ultimately they need to be treated like business owners, and not employees. Franchisees desire the respect of friends, family and peers, and are often a helpful force in the development of new initiatives and programs. Their experience and desire to succeed can also identify emerging trends in their respective industries.

7. Making a Difference: Franchisees often treat their staff as extended members of their own family, and take pride in helping them grow personally and professionally. They also get great satisfaction in helping customers and making a contribution to their local communities!

8. Utilizing Expertise: A franchisee wants to leverage upon the expertise of a franchisor, as well as using the name of an established brand that a franchisor has acquired. A franchisee also expects the franchisor to provide assistance in helping with staffing, training, business planning, operational and business related troubleshooting. This is so the franchisee can accomplish their business goals through an organized business mechanism in the minimum possible time!

There you have it!  If you are evaluating several franchise opportunities this will give you an idea of what to ask about!

Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own successful small business? We are one of the fastest growing kids hair salon franchise systems in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, how to grow a small business, or how to become a successful owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD!

Exploring a Children's Salon Franchise

Topics: franchise, kids salon franchise, franchise buyers, buying a franchise, franchise opportunity, Shear Madness Haircuts for kids, how to franchise, franchising, franchisee support

Three "Must Have" Business Skills for Franchise Owners

Posted by Jim Otto on Fri, Jul 15, 2016 @ 11:07 AM

businessskills.jpgMany people that contact me are “romantically” attracted to our concept. They love the idea of a cute, fun and brightly colored place to take kids for a great haircut. Or I hear, “I love children, so I was really attracted to this." Now I am not saying that having an interest in our franchise concept because of your interest in working with kids is a bad thing. As a matter of fact, I would highly recommend that you invest your money, time and efforts into something that you feel passionate about. But our franchise, like most, is still a business, and will require a certain set of business skills to increase the probability of success. Whether you invest in a yogurt, burger, or salon business, it’s still going to come down to possessing certain business skills to succeed.  Here is our list of the top 3 skills needed to own and run a business:

1.  Communication Skills 
Your ability to communicate with others and “get the message across” about what your business is about to both employees and customers is critical. Everything in life begins with communication, and the ability that someone has to communicate is a big plus. Because time management and organizational skills can’t be taught in an operating manual, someone's ability to effectively execute a business plan becomes crucial. If a potential franchisee is unable to do this, then they may not be able to handle all the moving parts of running a business. Also, it's important to be flexible and adaptable. Rigidity has never worked in business! Now, of course I'm not saying to up and dump a system in favor of your own ideas. You have to follow the system. What I am talking about is the ability to handle a crisis when it arises, to shift gears and go a different direction on a moment’s notice, and to know when to be tough or to know when compassion is needed. Time management and organizational skills allows you to set a goal and reach it.

2.  Understanding the Need for Marketing 

Another great business skill to work at possessing a mastery over is in the area of marketing. Unfortunately, many new businesses fail because of a lack or understanding of effective marketing. Getting your name out in the community, building a loyal customer base and differentiating yourself from the competition can take a new business on average 3 to 5 years. Therefore whatever you anticipate spending on marketing you can pretty much double that amount. The busier your location becomes, the less you can spend on marketing. But getting that initial foot traffic can be costly. If you understand that this is a need and are willing to do the "work" - you should be successful.  A franchise system should provide lots of guidance in your marketing - they have seen it done numerous times and know what you get the most bang for your buck with.

In the initial stages of your business you must market to the masses. Once you have a client base you can save money by target marketing to your existing customers - or to new customers only.  You will have gathered customer information (i.e. email addresses, etc.) that will allow your to touch your client base more economically.

3.  Desire to Learn

Lastly, a desire to learn is also a really important mindset for a franchisee. Of course, everyone would like to learn about something - but great franchisees have the desire to learn. It’s not a chore; it’s something that brings satisfaction when the learned skill produces a favorable business outcome. Great business owners are made and not born, but having some of these basic skills are going to go a long way in determining your success or failure in a franchise!

Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own successful small business? We are one of the fastest growing kids hair salon franchise systems in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, how to grow your small business, or how to become a successful owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD!

The Top 4 Considerations

Topics: franchise opportunity, Small Business Franchise Information, how to franchise, Business Tips, small business how-tos, communication, franchising, franchise growth

Scalability & Franchising: Like Peanut Butter & Jelly!

Posted by Jim Otto on Mon, May 9, 2016 @ 14:05 PM

PBJ.jpgYou hear people talk all the time about scalability, but what exactly does that mean? I would recommend that you find out exactly what that means as it relates to the Franchise you are thinking about buying! If you are not buying into a “scalable” system, then what you might be saying is that you're content with NOT growing your business. For example, have you ever watched the TV series Shark Tank? In this show, one of the first question they ask is, "What are your revenues?" Another good question that they ask is, "What were your revenues last year?" They ask this, because what they really want to find out is if the model growing, if it's creating more revenue than it did last year, and if it's scalable. Scalability, the ability to grow revenues and expand on an ever increasing workload, is one of the main characteristics of a franchise system. This is where the link can be found between the systems that the franchise has in place, and how those systems function under the ever increasing revenue that is produced. There are lots of ways to measure scalability for lots of different business models, but here are some of the most important when it comes to franchising;
  • Is there a market for the service? Without demand for the product, how will you grow?
  • Can you teach someone else to do it? Scalability relies on the fact that whatever you are doing can be taught to some else who can then teach it to others.
  • Standardization: Can it be repeated successfully over and over, the same way, and continue to produce more and more revenue as it grows?
  • Recurring revenue: I would venture to say that very few franchise models can survive without services or products that meet a need and require customers to come back again and again to get them.

It's a fact that running a business can be hard work and encompasses many challenges that most people have never encountered. But it's arguable that when you invest into a salon franchise system, you have a greater chance of success. Plus, most salon franchises (like Shear Madness Haircuts for Kids) do offer the advantage of a successful business history and scalability. However, as implementing a salon franchise system does take effort, you'll want to make sure all your questions are answered through doing a little research. Contact salon franchises, reach out to the franchisors, and compare business models!  You'll also want to take a look at the Franchise Disclosure document, the Franchise Agreement, and talk to current franchisees. Seek out a franchise business that currently has a long track record of success. Keep in mind that the franchise system itself may be younger than the actual concept itself.  Find out how long the franchisor has had a history with the concept itself.  Have they really figured it out before offering the franchise?

Shear Madness Franchising franchises Shear Madness Haircuts for Kids salons, and we have worked with our franchisees in growing their business and making sure they are on a path to success. Why? Because having someone who can offer expert advice on growth and scalability is one of the significant advantages of franchise ownership! And simply put, scalability as it relates to franchising allows you to consistently grow your revenue in the future, just like the Sharks on Shark Tank like it to!

Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own successful small business? We are one of the fastest growing kids hair salon franchise systems in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, how to grow a small business, or how to become a successful owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD!

Exploring a Children's Salon Franchise

Topics: salon franchise, buying a franchise, how to buy into a franchise, how to begin a business, how to franchise, franchising, franchise research, franchise growth, evaluating a franchise, scalability

The Importance of Customer Feedback

Posted by Matthew S on Fri, May 6, 2016 @ 13:05 PM

customerfeedbackCollecting customer feedback is an important way to gauge whether the efforts you are putting into growing your small business are really meeting the needs and expectations of your customers. Following are some different ways that customer feedback might be gained, as well as some helpful tips and useful questions you might want to ask.

Direct Communication with a Customer: One way to collect great feedback from a customer is to speak with them directly either through a phone call, or face-to-face dialogue. However, be sensitive as to when might be the best time to talk with a customer about their experience. For example, at Shear Madness Haircuts for Kids, we will often call parents after hosting one of our birthday party experiences in order to hear their thoughts and suggestions in regards to the event. We'll also seek to communicate with customers directly who might have a complaint, as we want to assure them that their concern is not only heard - but extremely important in helping us become better!  

EMail: Do you email your customers?  If you have a newsletter or other email campaign you will get people who unsubscribe.  Use this as an opportunity to get feedback.  Your email system may allow you to customize your unsubscribe email response - use that to ask questions, or if you have phone information on that customer give them a call.  Never mention the unsubscribe in the phone call, you don't want to make them feel singled out.  But, if you are always calling customers for feedback anyway just include these people in the list of those to reach out to.  You may find that those who unsubscribe still love your business, they are just moving, or clearing out email as they get too much!  Or you may find that something has happened that you need to deal with as an owner.

Surveys: Utilizing a survey to collect customer feedback is a great way to reach out to a much larger base of customers than you might be able to do through direct communication. Some of the ways surveys might be done is through a short questionaire that a customer can fill out at your business and drop into a box, or through an online survey sent to your customer mailing list. Some of the advantages of utilizing surveys is that some of your customers might prefer giving feedback in this manner. However, it can also be a challenge to actually convince customers that filling out a survey is worth their time. As such, offering a small incentive for their help can be a great way to encourage this customer feedback.

Survey Questions: Following are some sample questions that a business owner might want to ask their customers. As with any customer interaction, make sure that you do everything you can to help them feel great about their experience with your business. Thank them for their time in talking with you or filling out the survey, and possibly offer them a coupon for their helpful assistance.

  • What was your primary goal in visiting my business today?
  • Did my business meet your objectives?
  • What could my business have done differently in regards to your experience?
  • Compared to similar services you may have received elsewhere, how does my business compare?

Responding to Feedback: Of course we all love when we receive positive feedback. But what about when we get negative feedback? As a business owner, it's inevitable that you'll receive negative feedback and criticisms leveraged against your business. And while it might be easy to become offended and disheartened by such feedback, consider looking at criticisms as a way to help make your business even better. Most customers just want to be heard!  So when you reach out to someone with negative feedback make sure and really LISTEN to what they have to say!  Thank them for sharing with you!  If they didn't share, you wouldn't know - many times your system may need some tweaking and this can be jump started by this negative feedback.  There will be some negative feedback that may be totally unjustified, but if you evaluate the entire situation there WILL be something there that you can learn from to make improvements in your system.  Whatever the case, be sure to treat customers who provide negative feedback with as much care as you would a positive customer. Assure those customers who are critical that their thoughts matter and that you want to do what you can (within your power) to help make it right. 

The Best Feedback is a Referral:  If you can track your referrals this is a very nice thing to do!  Kindly reward those who refer you.  Most refer you with no expectation of any kind of reward.  But if they get one - a thank you note, a phone call, or an email - they will love you even more!

Are you looking for a franchising opportunity with someone who has your back and works hard to encourage your success? If so, why not check out Shear Madness Haircuts for Kids Franchising? Not only do we love to have FUN, but we also love sharing our many great business tips, free business tools and resources for small businesses so that our franchisees will have the tools to succeed! If you're interested in learning how to become a successful owner of your own franchise business, please click below!

Item 7 Download

Topics: how to franchise, Business Tips, successful franchisees, small business how-tos, growing a small business, business growth, nourishing success, business relationships, franchising, customer feedback

Hot or Not? Finding a Reliable Franchise System

Posted by Jim Otto on Tue, Apr 12, 2016 @ 13:04 PM

HotorNot.jpgEver heard the saying, slow and steady wins the race? It applies a lot to franchising. When I was a stockbroker, guys in the office were always coming up with a “hot” stock pick. Most of the hot stock picks my clients and I invested in never worked out. Sure, they may have gone like gangbusters for a while, but they usually flamed out after a while and plummeted back to earth - and took my money with them! Meanwhile, the older guys in my office were always buying Blue Chip stocks, which means that these were stocks with steady companies in steady industries that did well in any environment. This is why I think there's an interesting comparison here between franchising and buying stocks.

Because when you're out there researching franchises  - it's a good idea to start with the following question: What do people consider a necessity rather than a luxury? Or put another way, if the economy slows down or even goes into a recession, will my franchise business survive? One example of this is how haircuts are something that most people consider a necessity and not an option, and no matter what the economy is doing hair is always growing - and it always needs to be cut! Child care is another one. People will always have a strong desire to have a family. If people spend money on anything in good times or bad, they will ALWAYS spend money on their kids. We can probably all think of companies whose products have either gone out of style or are no longer relevant. The most recent example is Blockbuster entertainment. The video rental store has been replaced by Netflix and other on demand movie services. Another example is Borders. Borders book stores unfortunately didn't keep up with Amazon's on line book stores, and recently closed most of its locations as well.  Again, it's hard to imagine a time when hair care is no longer a need - no matter what happens with technology.

Additionally, be sure to take a little time to determine if the business model you are looking at makes money. Seek out a reliable franchise system that currently has a long track record of success. Keep in mind that the franchise system itself may be younger than the actual concept itself.  Find out how long the franchisor has had a history with the concept itself.  Have they really figured it out before offering the franchise? As we live in an ever changing and fast paced world, consumers demands change by the minute and are greatly influenced by technology! Look for businesses that are being done the same way today as yesterday, and will be done the same way tomorrow. Luckily haircuts (and hair care in general) is a pretty hard industry to imagine being completely taken over by technology!  This is why over the last decade more and more salon concepts have begun to franchise.

The bottom line is, just like those Blue Chip stocks, when it comes to franchising, those long established businesses that have stood the test of time are usually the best place to start looking for a business. That's why when it comes to searching out a reliable and successful franchise system, sometimes the steady concepts that do well in any environment are a more reliable investment over those that claim to be smoking hot!

Interested in learning more about how you can become an owner of your own exciting Shear Madness location? As one of the best kids salon franchise systems out there, we're also one of the fastest growing kids hair salons in the industry today! And we're always working hard to share our many great resources, small business marketing strategies and business tips so that our franchisees will have the tools to succeed! If you're interested in learning how to become a successful owner of your own childrens salon franchise business, please click below or call 1-888-98 GONE MAD!

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Topics: franchise buyers, buying a franchise, how to franchise, franchising, franchise research, franchise growth, haircare franchise, evaluating a franchise

Franchise Fee - What does this pay for?

Posted by Janon Otto on Wed, Mar 9, 2016 @ 10:03 AM

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"What is the Franchise Fee?" This is perhaps one of the most common questions asked by a potential franchise buyer. And while this is certainly one of the considerations when researching a franchise system, it's definitely not the most important figure to look at. Why is this?

As the franchise fee is the initial fee charged by the franchisor, it allows a franchisee the rights to use the logo and systems, and start a business with those items. But, what you get for that fee with each franchisor does differ. The most important thing that you are paying for is the learning curve that the franchisor paid for with years of previous experience. This is what you need to find out about. For example, there are franchised companies out there with huge differences in the amount of experience they have in operating the concept that you are buying. There are also companies out there seeking out new businesses to franchise. These are usually companies that market franchises. They charge the franchisor the fees to do the legal and set up work to make them franchisable, and then also charge them to do the marketing. If the franchisor does not have many years of operating history, then they will still be learning as they are also franchising - this is can be a dangerous combination!

The learning curve is the MOST valuable asset that you aquire when investing in a small business franchise! At Shear Madness Haircuts for Kids, the operating history was 13 years before franchising. Most successful "new" franchises have suprisingly long operating histories. Five Guys Burgers and Fries may seem newer, however they have been in business since 1986, and began franchising in 2001! Starbucks began opening coffee shops in 1985, and Papa Murphy's Pizza opened in 1981 and started franchising in 1995!

As companies grow, they have successes and failures. This is normal. When you invest in a franchise most of the franchise fee is for the avoidance of those failures! Those failures may have cost the franchisor hundreds of thousands of dollars. This alone can make the franchise fee a real bargain!

Besides the operating history of the original concept, 0ther questions to ask about the franchise fee are:
  • How much training is included with this fee? Every system has different training, some may be at the franchisor's office, some may be online, and some may be at your place. A detailed outline of the training you should receive is included in the Franchise Disclosure Document in Item 11.
  • What items are provided? Do you get manuals? Most often you should get a Pre-Opening Manual and then also an Operations Manual. There may be other items that are neccesary to your business - which of those are provided and what must you pay for going forward?
  • What kind of access will there be to other franchisees or management?
  • What kind of ongoing support is offered with the system?
  • Will the system be improved as it grows?
  • What is the vision of the Franchisor?

Investing in a small business franchise system can be a great opportunity! Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own successful small business? We are one of the fastest growing kids hair salon franchise systems in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, how to grow a small business, or how to become a successful owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD!

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Topics: what is a franchise, Small Business Franchise Information, how to begin a business, how to franchise, what is a franchise fee