What Does it Take to Own a Franchise?
Amanda: But let’s talk a little bit more about what it takes or what does it take to own a franchise?
Mike Powers: Well, you know, the first thing as any business owner is considering is doing due diligence. And we talked about this in some of our previous podcast and laid the groundwork there. It takes a willingness to be part of the business and be fully engaged. And what do I mean by fully engaged?
Well, you know, you’re basically making a bet on yourself when you invest in a business. And you have to become part of that business. You have to invest the old saying, blood, sweat, and tears, besides the capital that’s required. And you have to have a strategy. And part of your strategy is doing your homework, doing your due diligence, understanding what a business owner, whatever industry that you’re getting into, like for example, the home care industry, you know, you need to have a deeper dive into what does the business hold for you? What can you anticipate? The tools that you will need to be successful in that industry? What type of resources do you need access to? Who can help you?
Every business owner needs to understand, and again, going back to our first podcast, we talked about how important it is to have a board of directors. Every owner, whether it’s, you know, you’re just starting out or you’ve been in business 10 years yourself, a board of directors. And that could be, beginning with your significant other or your spouse that’s part of your board of directors, your banker, your attorney, some other savvy business people that can help you through the process of looking not only at today but down the road strategically in the industry that you select out. It’s so important, again, not to use another adage, but “it takes a village.” You know, and you should use the resources.
So when you look at franchising, you get the village. You get the key aspects that you need to have as a business owner to help you move forward and face those challenges that the industry that everything is thrown at you.
When you’re prepared to beat those challenges and exceed those challenges, you’ll find that you’re gonna do better than your competitors because you’re better prepared not just for today, not just for tomorrow, but down the road. Right?
So, I mean, there are so many aspects of franchising that’s so important. You might mention capital. You save the amount of capital that you need to invest. For example, just take one aspect, technology. Today, if you had to create the programs and have someone invent those for you, the amount of capital that it would take to do that is taking you away from maybe other areas. The franchisor brings those key attributes. They’ve already done the research and development and said, “Hey, based on our experience, we believe that this program is excellent for you to not only build a business but also to manage a business. And as such through economies drive the cost down where it’s so reasonable you can’t afford not to do it.
And you probably have some additional comments as well.
You know me.
Amanda: Yeah, I just wanna add to that real quick because I hear a lot of, you know, “it takes a village,” right? And there’s all these other people who are involved in the process. But really when we’re making that transition from a lifelong career person to working for myself, the buck stops with me, right? I sink or swim on my own. So let’s turn the camera inward a little bit and talk about some of the traits that I need to, you know, be aware of. But then…
Mike Magid: You just stole my thunder because I was gonna say…
Mike Powers: I’m gonna jump in and…One of the big things… is ego. Right? As a business owner, okay, I’m the CEO of my company. No one is going to make me do that. I don’t wanna decide to do this. I think if you get to a level playing field and be open, you know, much like a whiteboard. If you paint the picture with your partners, your strategic partner in the franchise, I think you will move through the process quicker and you won’t expel any unnecessary capital because you know, you’ve made a commitment to this franchisor for a reason. You’ve done your due diligence and you’ve vetted them out to say, “Yes, their system has proven. Like for 37 years, it’s been proven that it’s worked. So why would I try not to follow the system?” That would be one thing I think, you know, as a business owner, that ego, if you find a happy medium and check that, as Mike said, I think is really probably the first pillar to building a solid foundation.
So I’m sorry to interrupt you, Mike.
Mike Magid: That’s okay.
Mike Powers: Absolutely.
Mike Magid: All right, good. So it’s exactly where I wanted to go because I say Amen to everything Michael said in the big picture. When I hear that question, like what does it take to own a franchise, I internalize that as a very personal journey, a very individualized journey, because it’s different for everybody. Everything that Mike said has to be there and all the research and you know, the study, due diligence, whatever you wanna call it, that goes into researching a franchise, making sure you’re in the right industry, making sure you have the right business model, making sure your eyes are open to what it takes to see, talking to franchise owners about their experiences, you know, in getting into this business, in ramping up the business. Like all those things are critical to, you know, what it takes to owning a franchise.
But for me, if I was going to look at it very personally, and you mentioned the word, I think it’s a transition for me to a very jobor mindset is what I call it, right? I’ve worked jobs my whole life. I’ve been successful in jobs my whole life. And whether or not there was ever true security in a job or not, because if you don’t own the business, you’re always at risk of the business owner or the person above you saying, “We don’t need your services anymore.” We all know that. But we can look past that and still believe that having a job is safe and secure. Right? Why? Because “I know where I’m going every day. I know what I do every day. I know what I make every day. I know what my hours are gonna be. I know what I don’t have to take home with me. And what I can do if I have my weekends off”. Like, it’s very predictable and it creates this veil of safety around you when I have a job.
And I’ve done that for 25 years, but I’m 57 years old right now saying, “I don’t wanna do it for anybody anymore.” Right? I’m getting older and I don’t feel as secure because as you advance in your age and your tenure in the job force, let’s face it, you just become less attractive and maybe a little bit overpaid where they can replace you with somebody a little bit younger and maybe for less money.
And so, you know, depending on where you’re at in the generation spectrum, you know, those mindsets shift. And so, you know, when I think about what it takes to go on a business, I’ve got to be ready to say there isn’t the true safety and security, I think, here in the job. And the only way I can truly get that is if I own my own business and I can call the shots and I can work that business hard.
So what it takes to be successful. Like, I have to be determined, right? I have to be resilient. I’ve got to be a good leader and hopefully, a good servant leader, right? I’ve got to create, you know, a good culture. I’ve got to hire the right people. I’ve got to set the right plan and strategy and vision so that everybody is aligned with what my why is, you know, for my business. And I hire for people that will work for my why and not from my money. Right?
So, what does it take to own a franchise? There’s so many personal things that you have to do and have in order to truly create the success you want in a business. And I think I have to be okay knowing that in some situations I have to follow and in other situations, I have to leave. So what do I mean? Sometimes I have to follow the advice of the franchisor because I did my research and they were right when I bought. When I signed that franchise agreement, they had what I wanted, the systems were in place. I met the team, they seem to have the great support. Things aren’t going right. I got to follow their lead. If they tell me I’m not at 12:00, I’m at 4:00 and I should be at 12:00, then get back to 12:00, and here’s how we can get you back there. And then once we get you back there, here’s the plan to keep you going. Right?
Amanda: [inaudible 00:28:40] to grow and we heard you.
Mike Magid: Yeah. I’ve gotta be able to follow. And it flies in the face of ego, but we follow in jobs and yet we still accomplish in jobs. You know, I have an ego. I became a COO for this company. I still have a boss. And if I want something and the boss wants something different and he says, “Here’s what I want.” I got to say, “Okay, I’ll follow,” but doesn’t mean I have to sacrifice my ego. So I’ve gotta be strong enough to be a follower and be comfortable being a follower when it’s time, and then I’ve got to lead when it’s time to lead. And if I can figure those components out, then I can really be successful owning a franchise. I’ve got to be able to ask for help when I need help and not look at it as a sign of weakness. We do it every day in our jobs and we accept it in a job like it’s okay to ask for help. “I’m lost. I don’t know what to do. Can you help me?”
And in a job, it’s 100% acceptable. And it’s standard protocols if you have a job. If you don’t know what you’re doing, you got to get unstuck, you get unstuck. But I own a business and I can’t because I own a business now, I’m a business owner. I’m a leader. I shouldn’t be asking for help. I should be providing the help and the support.
So I got to be willing to ask for the help and I’ve got to be willing to follow. And I’ve got to just make sure that I am a great talent selector because if I wanna grow my business and I wanna get where I wanna go to follow the business plan I set out when I started the business, it’s not ultimately gonna be me that’s gonna create that success, is gonna be the people I hire into my business and how they represent my business and how they work for my why and not for my money. And if I can find people like that and create the culture, they will get me where I need to go. And then I got to follow as well, right? Because they will have good ideas and I’ve got to put my ego aside to say, “What can we do differently? What can we do better?”
All these things that are part of the personal journey in my mind are the things I think we need to consider when we think about owning a business. And if I can’t think through all that and get comfortable with all that, then I shouldn’t buy a business or a franchise in this matter.
Amanda: Mike, anything you wanna add?
Mike Powers: You know, I think there’s someone out there, whether you’re watching or you’re listening, you’re thinking, “Okay, I wanna start a business. I’ve looked at my 401(k) or wherever I’m going to use those assets and I’m really kind of betting on myself. And I hear the word ego.” I have an ego. We all have an ego. It’s the self intrinsic value of what we do.
And just to clarify a little bit what Mike is saying and what I’m interpreting him saying is, it’s okay to have an ego, but there’s a point where you know, he clearly articulated is that part of that ego as a leader is also knowing when it’s time to accept assistance or reach out and say, “Hey, I need your help or I need your viewpoint on that.” And so…
Amanda: Well, I mean, it’s really helpful, right? There’s a level of ego that drives you to be successful, but there’s also, especially when it comes to a franchise where if you’re striking out on this road that’s already been paved and has proven to be successful, that needs to be complimented with an element of being coachable and that combination, Mike, I like what you said about being a follower and a leader. Both of those dynamics come together in a successful franchise business.
Mike Magid: Yeah. If I could just add one more component to that.
Amanda: [inaudible 00:32:47]
Mike Magid: Like, at some point in time when you’re in business, you know, and you’re creating your success and you’ve got your team and things are going and you’re where you need to be, a lot of people lose sight of what they had to do to get there. A lot of people lose sight of how they ended up even making a decision to buy a business. They lose sight on why they chose that particular franchise in which to invest in and what was attractive to them when they were buying. And that was in the stage of uninformed optimism where they didn’t know what they didn’t know and they were just excited. And you know, you get in the business and you grow and then you go through all those stages.
And I just think it’s worthy if you wanna know what it takes to run a successful franchise is never forget what drove you to the point of why you wanted to gain control over your income and lifestyle and wealth building and equity and debt reduction. Don’t lose sight of that and don’t lose sight of what attracted you to the franchise company in the first place and all the things that you said you wanted from them, which is why you signed on the dotted line and paid your money. If you can keep that memory alive, the franchisor, franchisee paradox, which is always an interesting one because each side has its own interest. Franchisors have their interests in what they want for their franchise system and franchisees have their own interests in what they want for their own business.
And sometimes that paradox doesn’t work if you don’t have two sides that are willing to work at it. And if you wanna know what it takes to own a successful franchise, really understand the people and the mindset of the franchisor because you’re married to them. You know, in some cases for 5 years, 10 years or longer, and then there’s renewal periods. And just makes sure, just like you would in any marriage, you remember the great things that attracted you to each other, you know, when you’ve gone on to have success and think, “I don’t need them anymore.” Right? You really do. You really do. You always will.
Amanda: All right. Mr. Powers, any parting remarks, when we talk about what’s coming next, what our listeners can expect from our next episode and wrap things up?
Mike Powers: You know, just excited at the opportunity that we can share this information with everyone. You know, we talk about a village. We have a whole team of people that support us behind the scenes and that really help us help our franchise owners. And that’s our culture here and I think by us having this podcast, it’s just to try to help and keep everybody informed because we know what it takes to invest. We know what it takes to run and operate a business and navigate through the challenges that are thrown at you. So it’s important for us to try to share what knowledge that we have and that we gained and knowledge that we’re still trying to acquire because we haven’t hit that plateau, we’re always learning as well.
So I’m excited about the opportunity from our previous podcast and this one and I appreciate you keeping us on track and guiding us because as we have already demonstrated, we probably can filibuster and talk for a while.
Amanda: Well, I’m up for the challenge. So next time we get together, we’re actually gonna talk about what type of support does the franchisor provide. And we’re gonna continue our journey and you know, this episode has been very introspective and what are traits that I need to really look closely at myself before I make that transition. And now we’re gonna start talking about what types of support does the franchisor provide and how does that marry with my dream? Mike, because you mentioned, right, when you buy a franchise you’re marrying your franchisor. So we’re gonna talk a little bit about that.
So thanks for being here. A couple of announcements I wanna share with all of our listeners. Mike and Mike are gonna be appearing on the Pillars of Franchising next month, April 2019, so stay tuned for that. Feel free to publicize on…
Mike Magid: A quick update on that.
Mike Magid: I think that’s gonna move to May.
Amanda: Okay. May of 2019.
Mike Magid: Yes.
Amanda: Follow us on Twitter. Mike Powers is @mfpowers2. Mike Magid, @MikeMagidGHC. And I felt really left out of the Twitter club so I just recently joined Twitter so I’d appreciate all the followers I can get GHC_Amanda. Social channels you can find, and not only our podcasts but Mike Powers you referenced all of the educational support and we wanna make sure that we’re doing our best to educate folks who are you know, looking at buying a potential franchise, whatever that looks like. So lots of opportunities for education on possible franchise opportunity on Facebook, @Griswold brand [SP] on Twitter, @griswoldhomecare franchise on Instagram, as well as griswoldhomecare.com/franchising. Lots of great resources available for all of our listening audience.
Again, a reminder, you can find our podcast on iTunes, Spotify, YouTube, Stitcher, Google Play Music, RadioPublic, in griswoldhomecare.com/franchising. If you listen on another platform that I didn’t mention, feel free to just tweet that over to us and we’ll make sure that your favorite “Franchising with Purpose” podcast is there as well.
Thanks for being here today. Lots of great information, as usual, to share with our audience and look forward to doing it again.
Mike Magid: As always. Thank you, Amanda. I appreciate it.
Mike Powers: I appreciate it.
Mike Magid: Take care, everyone.