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Have an entrepreneurial spirit and are looking for a career change, franchising might be for you. Buy before you go down the path of buying your own, there are a number of things you should know and consider since it’s such a big personal and financial commitment. To help you decide if it’s a right fit for you, we got an insider scoop from the founder of one of America’s “red hot” franchise concepts, Jennifer Beall Saxton. She’s currently the CEO of Tot Squad, a mobile baby gear service that helps busy parents by providing mobile cleaning, repair and installation of strollers and car seats at retail locations daily or at customer’s homes. Tot Squad sold its first franchise in the Washington DC area in 2015 and plans to sell more by the end of 2016, with the goal to expand globally. But how has it been so successful and what types of things does TotSquad look for in a potential owner?
Here are some tips from Saxton, who is somewhat new, but already well accomplished in the field of franchising. She has won several awards and been featured on podcasts, in publications, and on national TV for this topic. So, let’s get some background info on the pros and cons of franchises from Saxton.
What is a Franchise?
Saxton’s Answer: Franchising is a business model that appeals to individuals interested in building their own turnkey businesses. It is an effective and efficient means to scaling a business nationally. Whereas it takes most franchises years and hundreds of thousands of dollars to build a successful business, the beauty of franchising is that you benefit from all that hard work and trial and error. Essentially, you are buying a business in a box and the ongoing support you receive from the franchise is your toolkit. You have the benefit of hitting the ground running and potentially making money from day one.
With all the focus on high-tech start-ups, many people overlook franchising—one of the most successful business formulas that exist. Many millennials aren’t even aware of the potential of a franchise, and yet 1 of every 6 jobs is related to franchising. Franchising will contribute some $554 billion to U.S. gross domestic product (GDP) in 2016. Also, franchising is an excellent alternative to starting a tech company, and a means to retain more of your equity.
What Does it Take to Own a Franchise?
Saxton’s Answer: It is important for franchisees to have strong communication skills and to be interested in a leadership role, but also understand the value of being a team player. A successful franchisee has excellent customer service skills, is approachable and knows how to build partnerships and a network. Some management experience is helpful, as is the ability to multi-task and problem solve. Also, passion never hurts—the key to most successful businesses!
What Type of Franchise Should You Own?
Saxton’s Answer: Before you begin looking into the specific franchise options, ask yourself the following questions.
- What type of investment is required, both upfront and as an ongoing royalty?
- How much overhead would you expect to pay annually?
- Is it a cash business? (meaning you don’t accept credit cards as a method of payment)
- Is it a mobile business or bricks and mortar?
- Who is the customer base you want to deal with and how well do you know and understand this them?
- What is the size of the potential customer base where you live?
- Who is the competition in your market?
- What are the corporate requirements of the franchise?
- What sort of assets and ongoing support does the franchise offer?
- Is it a nationally recognized brand?
Thanks, Jennifer Saxton for your insider tips and for taking the time to share your experience with our readers! Be sure to check out TotSquad’s website to learn more about franchising opportunities in your area and read more about the best franchises to own.
Why are you considering buying a franchise?