The Key to Franchise Profitability

Written by Jim Otto

Can the consumer do it themselves? If they can't or just don't want to, well, you just might have the potential to start up a business in your community then! People are willing to pay to forget the hassle and seek help from a business who specializes in that specific service to simply make their life easier, and why not?! Today, we are here to talk to you about the KEY to making your franchise profitable!

Many of you may have seen a show on TV called Shark Tank. If you haven't, entrepreneurs attempt to convince 6 highly successful business people as to why they should invest their money in the next great business idea. Most businesses start this way and unfortunately it's probably one of the biggest reasons for business failure! 

Many people start their search for a franchise without measuring the most important thing: are there customers for the franchise? More importantly - and don't miss this - is doing what you are doing so PAINFUL (so-to-speak) for the customer to do themselves, that they have to come to you?  In business we call this the Shark Bite (no correlation to the Shark Tank). If your customer can do it themselves or go to you, well that may be like a mosquito bite - and it may be a nuisance that they are willing to live with. However if the customer's pain feels something like a shark bite, then customers will be eager to pay you to ease their pain!  

Great businesses and franchises begin by solving a customer problem. This is why it's so important to try and figure out if the franchise that you are buying solves the pain your customers are feeling. For example, take our Shear Madness Haircuts for Kids salon franchise. I know that many of you reading this may be parents, and let's be honest...have you ever tried to cut your two year old's hair? Trust me, it's a shark bite, and our customers are more then happy to have one of our award winning stylist ease their pain vs. trying to do it on their own. And with our TVs and Xbox games at every station to help provide a positive distraction for their children, they end up coming back for years!

So before you select a franchise, focus on the BIG pain point. Remember that any big problem is a big opportunity, and customers will be more then happy to pay you to ease their pain.

 

Award Winning Care!

Shear Madness Franchising franchises our award-winning Shear Madness Haircuts for Kids salons. We have worked with franchise stores in providing franchisee support (in order to encourage continual growth and business success), 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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The 7 Most Important Questions to Ask!

Written by Jim Otto

Honestly, this process of finding a Franchise that is PERFECT for you is daunting, hard, and takes a long time. But there are some things to help you know that you are researching the best fits for you. We are here today to give you 7 questions to ask when you call the franchisees so you get a better feel for the company you are looking to invest in. 

Potential franchise candidates frequently ask me for the phone numbers of our franchise partners so they can validate our concept. If you have never seen or requested a Franchise Disclosure Document, commonly referred to as an FDD, the numbers of all current franchisees should be listed in the back of the document. I recommend that you ask the following questions as a starting point, because without the right answers to these questions you may want to look elsewhere!   

1) Tell me about your journey to find this franchise? - Everyone starts his or her search for a franchise with a journey. Remember your asking someone who was right where you are at some point! Why did they move forward? It will tell you a lot why you may or may not want to.  

2) Could you have done this alone, without being part of a franchise? If the franchisee feels like they could have done this without the franchisor, well, that defeats the purpose of buying a franchise. The franchisee should have no doubt that without the guidance of the franchisor they would have not been able to succeed to the extent that they have.

3) What does your franchisor provide you that benefits you the most? If franchisees can't tell you what benefits them the most about being part of the franchise system, then the franchisor may not be supporting the franchisees to the extent that you may need.

4) Is the Franchisor accessible when you need them the most? Every business will run into those times when you not only need an answer BUT you need it right now! Making sure that the franchisor is available during those times and responsive to the franchisees needs is critical. 

5) What is the impact been on running your business on your social life initially, and now? The most overused word in franchising is: absentee; business is hard and can cause a disruption in your personal life. You can imagine what your day-to-day life will look like, but talking to someone who is living it will give you the real picture.

6) How do you run your business, do you work in the business or do you use a manager? Some franchises you can run with a manager doing the day-to-day operations and some you can't. If you have a full time job that your planning on keeping you better find a franchise that can be run and run well with a manger.

7) What is the most challenging and what is the most rewarding part of owning your franchise? As I mentioned earlier, owning a business is not easy and you should try to find out what challenges the franchisees are facing. At the same time if there is no reward in what you are doing then what good is that? I always like to end with this question; it can go along way to fulfilling your dream or avoiding a nightmare!

These questions are a good starting point in your due diligence process. They will give you a clearer picture of the franchisors support and what your day-to-day life may look like if you buy into a particular franchise system. At Shear Madness Haircuts for Kids your success is important to us, our systems and process have been tested over a long period of time. But don't take my word on that, listen to one of our franchisees answer these questions on the attached recording, and good luck on your search!

 

The Road to YOUR SUCCESS!

Shear Madness Franchising franchises our award-winning Shear Madness Haircuts for Kids salons. We have worked with franchise stores in providing franchisee support (in order to encourage continual growth and business success), 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!

💌 Sign up for our customer newsletter for all the coupons, updates, and fun updates!

 

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The Quickest Way to Start YOUR Successful Business!

Written by Jim Otto

Of all the reasons to choose a franchise versus going it alone, ramp-up time is one of the most import. I get called from time to time and the conversation typically goes something like this, "Hey, I found you guys online. I have a GREAT children's salon and I really think you guys might be interested in buying it!" I will tell you from experience the two phrases, "great business" and "I want to sell it" don't really go together. Typically when I am presented with the numbers, there's one thing that stands out: the business took a long time to ramp-up, which caused the business owner to burn through a lot of his working capital. In a well run franchise system your ramp-up time should be greatly accelerated for the following reasons:
 
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Franchising Your Retirement

Written by Jim Otto

Many of you may never have seen this before, but the Social Security Administration used to send you in the mail what your monthly Social Security benefit would be at retirement (this info can now be accessed online on their website). What always stuck out to me was a statement on the front page, " Social security should not be your only source of retirement income, you will need to have other sources of income at retirement".   
 
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5 Questions to Ask before Opening a Second Location

Written by Jim Otto

The idea of owning multiple stores when you buy into a franchise is appealing. So why do so many people fail at it? Here are some guidelines for economy of scale that we use in our children's salons:

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