Twelve years ago, I made the best career decision of my life. I bought into an area developer contract with a franchisor, and I began the work of launching six franchise locations over a period of about 4 1/2 years. It was not easy, but especially coming from the intensity of a Fortune 50 corporation, it was very doable. More than that: it was exciting, educational, and freeing. But the success wasn’t just about my skills. Looking back over the experience, I can identify three specific factors that made the franchisor not just a good fit for me, but a winning choice in the marketplace.
Success Factor #1: Territory with Room to Run
Too many franchise candidates doubt themselves and the business. They sign a single-unit contract, trying to reduce risk, and don’t ask themselves “What happens if this works?”
I’ll tell you what happens if it works: you’ll want to expand. But to expand, you need open territory – and if the territory is locked, so is your ceiling. You need to buy a growth plan, not a job.
The franchise I chose had room to grow. And more importantly, it had room to grow in the region where I lived. I had been relocating my family every few years for the last two decades – I wasn’t interested in doing that anymore (and neither was my wife Lauri!). Instead, I was able to create the wealth-building executive franchise business I wanted, all within a few hours of home.
Success Factor #2: Unit Economics That Built Wealth
And speaking of wealth-building… After running six franchise units, I’ll tell you a secret: a big-time brand name is not one of the factors that made my franchises successful.
The brand was a salon suite franchise. It was not a household name – but it didn’t need to be. The brand had good recognition where it counted, with the stylists, manicurists, and others who were the revenue generators for the business.
Rather than focusing on the brand name, look for a franchisor with solid unit economics, one with a foundation built for growth. I was looking for math that could eventually replace my corporate salary, and then some. Ultimately, I wanted to earn a full-time income with part-time work, not just pull in a side income.
You can find a franchisor’s unit economics in the Franchise Disclosure Document. A close reading of this document is the cornerstone of franchise due diligence, but it’s also important to validate your impressions with existing franchisees. Talk to other owners to see how the economics play out in the real world, and look at numbers for both the top and bottom quartiles to make an informed decision.
Success Factor #3: Support That Scaled with Me
The right franchisor won’t just sell you a franchise, they’ll give you systems that make growth easier. In my case, that meant training, a solid operational model, and marketing support. My franchisor provided all the infrastructure to help me go from one location to six without reinventing everything myself.
Unfortunately, I’ve seen former corporate executives pick well-known brands with terrible support systems. They end up having to not only learn the business but also build every system from scratch. And if they want to launch additional locations? Back to square one, because there’s no scalable system in place.
That’s not franchising. That’s a you’re-on-your-own startup with royalty fees.
Especially if you’re looking to build an executive franchise business, you don’t want to spend a lot of time figuring out operational processes, choosing software, and creating marketing materials. You want to deploy your hard-earned strategic and leadership skills to launch something big.
What I’d Do Differently
So what would I do differently? You probably thought I was going to say I might pick a different brand, or maybe industry. Nope. I would be more than happy to choose the same business all over again.
The difference would be with me: I’d focus on the same three factors, but faster.
Twelve years ago, I knew these three factors would make a franchise business successful – but I didn’t trust them soon enough. I spent too much time early in the process comparing brands and industries. Instead, I should have been focusing on which companies had open territories, the economics that signaled a strong executive model, and which franchisors were the best partners to their owners.
Thankfully, I got there eventually – and when I did, I knew I’d hit the target. But it wasn’t because I was smarter than the next candidate. I just figured out how to ask better questions before I signed the papers.
Are you spinning your wheels comparing logos and industries? Feeling overwhelmed and like you’re not finding the information you need? Let me put my experience to work for you – my services are completely free. Book a 20-minute call with me today, and we’ll get started on your journey to professional and financial freedom.
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