Having a great idea is one thing. Knowing how to bring that idea to fruition, and ultimately scale it, is entirely another.
Many entrepreneurs underestimate franchising from both perspectives of the business. First, instead of inheriting all the natural risks associated with starting your own company from scratch, there is always the option of shortening that learning curve by first executing a proven system. And second, when it comes time to scale, many forget the option of allowing others to use the system you have perfected to open their own businesses under the larger umbrella.
A great example of what success in the franchising business looks like is Danny Nieves, founder of Local Door Coupons, a territory-focused marketing company that has grossed over $1M in franchise sales.
"Our goal was to streamline a very traditional advertising concept. We design, print, and distribute print advertising to thousands of houses in localized communities--about 15,000 high-quality material pieces per territory, as door hangers."
A simple concept with plenty of upside, Nieves' primary scaling method is now helping entrepreneurs looking to start their own businesses (while avoiding some of the larger barriers to entry) under the Local Door Coupons brand.
The primary benefits of being a franchisee, as Nieves explained, is being able to build off an already established network, brand name, and system.
"We now work with national brands to execute their door-to-door advertising, such as Subway, GNC, Edible Arrangements, Denny's, etc. So giving other aspiring business owners the ability to capitalize on that brand equity and help us continue to expand by opening franchises is invaluable--and a huge incentive for them. Earning the trust of the market is one of the hardest parts."
Trust and leveraging brand equity is extremely important. In fact, to initially get the trust of well-known brands, Jason Stone also known as The Millionaire Mentor got involved. Stone has over 2 million business related Instagram followers on @millionaire_mentor which massively helped boost the company into the spotlight.
So, as an aspiring or first-time entrepreneur, what are the benefits of being part of a franchise system?
1. Seeing (and using) proven systems.
There is a huge learning curve to owning and operating your own business, and many of the biggest challenges entrepreneurs face are operations related. They struggle to systematize all the different elements of what they do, and how those tasks get executed the same way over and over again. And even if you can get by haphazardly for a while, when it comes time to really scale (or sell the company), the first issue you will have to confront is the lack of systems.
By working with an established and process-driven franchise, you will be able to see and learn from something that is scalable and working effectively.
2. Low investment, potentially high return.
One of the primary benefits of being a franchisee is the buy-in cost. Starting (and funding) your own business is expensive, but opening under a franchise is much more affordable--and again, it comes with inherent risk mitigation.
"It's a win-win model," said Nieves. "We already have a few franchisees who, within 2-3 months of being open, are already profiting $5,000 - $6,500+ a month."
Especially when you are a first-time entrepreneur, having the opportunity to learn with a profitable upside is a massive benefit.
3. The ability to use established market equity.
When you start something individually, know that in addition to all the different challenges you'll face operationally, and financially, you will ultimately face the test of the market. Earning the market's trust is not easy--and proving that your brand is worth doing business with is a whole beast of a challenge in itself.
By being a franchisee, much of those challenges have already been handled--and that's a benefit not to be discounted by aspiring entrepreneurs. Especially those who may not have 40+ hours a week to devote to an entirely new business, but still want to get their "entrepreneurial fix," franchising is a much more realistic and beneficial road.
When a new franchisee comes on board, Local Door Coupons provides them with a comprehensive training course, including hours of classroom-setting training and hands-on training at a number of established offices. Staff then travels out to your new territory and acts as a guide in introducing and obtaining your first few clients. Support and assistance is then provided on an ongoing basis, as needed.
"We want to empower people to run their own businesses, and give them the tools to succeed," said Nieves.