As a business owner, I can’t stress the importance of following a tried and true system when starting one. If you want to walk safely through a land mine hazard, you stop in the same footsteps of those who passed there before you.
Let’s talk about franchise businesses and the benefits and drawbacks of owning one.
The first major benefit of owning a franchise and the reason why most people go through the trouble in the first place is that they believe that success is guaranteed somehow. By investing into an established concept that has been successful in the past and has shown historically that it doesn’t fail to their knowledge. Statistics show that franchises have a much better chance of success than independent startup businesses because there is no trial and error; the franchise owner follows the specific and exact guidelines established by the franchising company or corporation. Franchise owners sometimes receive valuable assistance throughout the life of their business. Many franchises are turnkey operations. When you buy a franchise, you receive all of the equipment, supplies, and instruction needed to start the business as a part of the startup costs, and there is no need to research and find vendors to get them going. What I think is the most significant benefit is receiving training, information, process instructions, and help with management and sometimes even mentoring. However, not all franchisors offer the same degree of assistance throughout the life of the business. Some are just about getting the startup operations, and everything after that is up to the franchise owner to figure out. Other franchises make promises of ongoing training and support that never get realized.
Did you know that Mcdonald’s is NOT a fast food restaurant? Sure, if you’re a franchise owner and went to Hamburger University, you are operating a fast-food restaurant, but McDonald’s Corporate is not. 85% of all McDonald’s buildings are franchises. That means the restaurant franchise corporation owns the land and rents it back to the franchise owner. That means with almost 39,000 restaurants worldwide, McDonald’s brings in a reported $4.5 billion annually as landlords. That makes McDonald’s a massive real estate empire.
There is a reason why McDonald’s charges what they do if you want to run a successful McDonald’s franchise. According to McDonald’s website, here is what you can expect to pay to open one. “The total investment necessary to begin operation of a traditional McDonald’s franchise ranges from $1,008,000 to $2,214,080. This includes an initial franchise fee of $45,000 that must be paid to the franchisor.” According to mashed.com, “Some McDonald’s franchise owners are naturally going to make more than others, but most franchise owners still pull in an estimated yearly profit of roughly $150,000 (Fox Business source). A profit of $150,000 after $2.7 million in sales isn’t even 6 percent, but after food cost, supplies, crew payroll, and about a dozen other costs handed down by corporate, that’s what franchisees are left with” (quote from Bloomberg).
They also say on the website, “McDonald’s requires each applicant to have a minimum of $500,000 of unencumbered liquid assets available to invest in a McDonald’s restaurant prior to entering into the applicant program. While this is a minimum requirement, McDonald’s may require that an applicant have a significantly higher amount of unencumbered liquid assets available to inject into a multiple restaurant purchase. The applicant will need to meet an equity requirement established by McDonald’s for the purchase.” And, “McDonald’s does not develop new restaurant locations with the intent of issuing the franchise to a specific individual. McDonalds development teams select and build the sites and the new site is franchised separately by the regional officers. If you own property and are interested in selling it or leasing it to McDonald’s, please visit the Real Estate section of our website for more information.”
Just because a business is offering a franchise, there is no guarantee that the franchise will be successful. While some franchise operations may perform reasonably well, they may never achieve the owner’s desired level of profitability. Also, in some cases, selling franchises is the franchisor’s business, regardless of whether they are successful.
Many people have dreamed of starting a business, and let’s face it, a franchise model does sound like the way to go, but after hearing the cons, I can’t imagine why anyone would if they were educated first about these details?
I remember back in the day starting my own Amway business. Back then, they were rebranding to Quickstar and went back to Amway. And hearing about Network Marketing and then realizing what all these companies are good at is motivating people to get excited about the potential. Still, the reality is that most people will fail, even with a lot of hard work and dedication. I’m all about hard work and commitment, but not to make someone else rich; I’m trying to secure my future and the future of my family!
I recently shared with family and friends a motivational speech from Steve Harvey titled “Jump” and you can look it up on YouTube. He said, and I’m paraphrasing, that if you’re willing to follow your dream and do something that accentuates your God-given talents, if you’re willing to just jump like from an airplane, then God will make sure your parachute will open. Yes, you may fall for a while, and you may take some scrapes and bruises, but just, JUMP. One thing is for sure, if you don’t jump, that parachute will never open.
What if there was a franchise-like business with no overhead? What if the company had systems that you can follow, provides ongoing mentorship and training, and can promise the business owner the six-figure income if they put in the work and follow the systems? What if it provided all the tools and materials needed to get started? What if it also allowed the business owner the ability to leverage others to do the work, and you still get paid a profit share while you are still learning? What if I also told you the startup costs are so low, it’s silly? And along with all the super low startup costs, you get services that the corporate headquarters pays for what would cost a thousand dollars on an annual basis to maintain, and it’s all included for free after that initial startup cost? And what If I told you that you never have to worry about payroll, management, employees, overhead, or setting up a human resources department as it’s all handled for you?
Now nothing is free or easy, but it’s easier than starting any of these franchise businesses, and it pays way better as well. If this has piqued your interest, reach out, and I’m happy to share the opportunity. There is no such thing as a get rich quick scheme, anyone who does get rich quick was just super lucky, and I’m sorry, but luck isn’t a plan for the future or a business strategy.
Again, this isn’t for everyone, yes the company will provide the training and materials to pass the required licenses, and this would be your own business to run and schedule as you please. You can even run it part-time until it completely supplements your income, then choose to do it full-time working from home; we do it all over zoom. I would never ask anyone to be irresponsible and dump a full-time paying job to jump into a business with no backup plan or completed training and mastering the words of our business.
So what is the success rate in our company? 100%! Yes, you heard me right. If you are coachable, can follow directions, pass a state quiz of about 70 questions that are multiple-choice with a 60% grade to pass. If you can keep after it and never quit, those champions who did what I just said have a 100% success rate.
I have people in my business that come from all walks of life, all ages between 18 and 90, all religions, all ethnicities like black, white, and all the skin tones in between, all levels of education from doctors, lawyers, and other franchise business owners to folks with no more than a 6th-grade education. The only thing that matters isn’t anything having to do with the demographics I just shared; all that matters is the desire to work hard for a goal, learn and take action, and the willingness to follow instructions. If you can do those things, you will succeed, and as my mentor said, if you stick with this business and fail but keep trying, you still would succeed eventually after many years. We turn people’s annual income into their monthly income.