Buying A Franchise

Buying a Franchise: An Inside Look
Advice from Some of Today’s Most Successful Franchise Owners

WELCOME
Franchising is a wonderful way to start a business and take control of your own future. Before deciding if it’s the right choice for you,
I recommend gathering as much insight as you can about the franchise experience.
In this eBook, we’ve compiled comments from a number of franchisees across various industry segments, addressing several common
questions and concerns among individuals interested in starting their own franchise business. As you’ll see, there are many great
benefits and rewarding experiences that come from franchise ownership, but also challenges along the way.
It is also worth noting that the franchisees we spoke to are a part of brands we’ve found to provide stronger than average opportunities.
Specifically, our franchisee satisfaction research revealed that their current owners rate their brands higher in areas such as Core
Values, Training & Support, and Financial Opportunity, to name a few. While the experience in a brand will vary from one owner to
the next, these companies have shown a greater ability to duplicate success consistently.
If you’re interested in seeing which brands were recognized this year as being Top Franchises, visit our website at
www.FranchiseBusinessReview.com.
Eric Stites
CEO, Franchise Business Review

TABLE OF CONTENTS
03
WHY FRANCHISING
BENEFITS TO CHOOSING A PROVEN MODEL OVER A NEW STARTUP
09
FUNDING YOUR FRANCHISE
LEARN ABOUT COMMON WAYS TO ACCESS CAPITAL FOR YOUR NEW BUSINESS
14
QUESTIONS TO ASK FRANCHISORS
WHAT TO ASK YOUR SALES REP AND BRAND LEADERSHIP BEFORE INVESTING
22
QUESTIONS TO ASK FRANCHISEES
WHAT TO ASK OTHER OWNERS IN THE SYSTEM TO HELP YOU KNOW WHAT TO EXPECT

Why Franchising?
Should you start a business from scratch or invest in a franchise?
According to the International Franchise Association, there are 780,000 franchise
establishments that produce $890 billion of economic output for the U.S. economy,
which makes one thing clear—franchising is a path many people take.
Let’s take a look at some of the reasons why:
Reduced Risk: When you buy a franchise, you’re not only buying an established brand name, you’re
buying into a proven concept and business model.
Pre-Opening and Ongoing Support: The franchisor provides you with pre-opening support including
training in how to set up and operate the business. You’ll continue to be supported by your franchisor
through ongoing training, marketing, R&D, purchasing, and more.
Franchise Network: One of the greatest assets of any franchise opportunity is the community of
franchisees.
Expedited Profitability: Franchising provides you with a roadmap to success. Follow it and you’ll realize
your best chances at reaching your financial goals!
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Q:
Why did you choose
franchising?

“After three jobs in five years, it was evident that stability, security, and loyalty were no
longer guaranteed in the workplace. I also didn’t feel that what I was doing was making
any material difference. These factors made me want to find a career that provided
stability, was satisfying, and would enable me to become luckier the harder I worked.”
-Craig Burton, Fibrenew
“I began my professional journey in retail and became a social worker. I felt good about
the positive impact I was able to make as a social worker, but also felt somewhat restless.
I realized I really needed something more fast paced, something that I could lead and
own and hopefully still find a way to make a difference in the lives of others.”
-Mary Worthington, Home Instead Senior Care
“I worked in the public sector for more than 14 years. I loved it because I was able to see
the direct and positive impact of my work. The major negative is that more often than
not you are not in control of your career path I wanted a stable future and not have to
worry about whether I was going to have a job come the next election.”
-Susan Maranhaos, Wild Birds Unlimited
“The biggest influencing factors were independence, flexibility, and job security. I
never again want to be in a position where someone else gets to decide if I go to work
tomorrow. A friend found the Office Pride opportunity and I helped him get started. Two
years later, I was able to get my own started and I’ve never looked back.”
-David Stein, Office Pride
Tip
If you’re seeking financial independence, flexibility, and the ability to determine your own success, franchising
may be right for you. It comes with a certain amount of risk, as any business venture does, but also provides
you with a proven business model and the support of a leadership team and other franchise owners.
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Q:
How did you fund your
franchise?

“It was a combination of using money saved and a small loan. The investment level is relativity low
so I had everything paid off quickly.”
-Al Crnjac, Fibrenew
“I was able to fund my franchise through a home equity line of credit. They were extremely
considerate and fair to work with as my territory grew and I opened up an additional office.”
-Kathryn Boyce, MaidPro
“We funded the initial purchase and all the start up costs of our first territory out of our personal
savings. As our business has grown, and we have acquired additional units, we have taken out an
SBA loan and a line of credit, which helps with cash flow.”
-Tracy Panases, Just Between Friends
“I was awarded the franchise through CruiseOne/Dream Vacations’ annual Operation Vetrepreneur.
I had to submit a business plan, go through interviews, and was blessed to be one of the five
military veterans in 2015 to receive a free franchise.”
-Larkin Frazier, CruiseOne/Dream Vacations
Tip
For more information about funding your franchise, visit FranchiseBusinessReview.com/Funding.
Many franchise systems offer discounts and incentives to military veterans like Larkin. To learn more about
the brands that have helped vets find success, see our Top Franchises for Veterans.
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Funding Your Franchise
Options for Acquiring the Capital You Need
A major barrier when it comes to opening a franchise is access to capital.
Fortunately, there are a variety of ways to fund a franchise investment.
Some of the most common options include:
SBA Loans:
One of the most common forms of financing, these
loans—up to $5 million—are guaranteed by the Small
Business Administration (SBA) and lent by banks.
Low-doc SBA Loans:
An alternative for those searching for lower amounts
of capital, $150,000 or less, these loans offer you the
same benefits as SBA Loans with a shorter turn-time.
Rollovers for Business Start-Ups (ROBS): Rollovers for
Business Start-ups allow you to utilize your retirement funds
without taking a taxable distribution to start a franchise.
Portfolio Loans:
If you own bonds, mutual funds, stocks, or other
securities, you may be able to leverage those funds to
open your business—without liquidation.
Unsecured Loans: You won’t need collateral to
qualify for these loans, which can happen in just three
weeks. They are a great option if you need a fast funding
solution.
Tip
There are many lenders that provide funding for new businesses and many other resources
that provide direction and advice on accessing capital. Some franchisors even provide
in-house financing for new franchisees. If you decide to seek outside funding, contact
Franchise Business Review’s finance partner at FranchiseBusinessReview.com.
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What is the most
Q:
rewarding part of
operating your business?

“In every town where we have a Hungry Howie’s franchise, we are a valued part of the community.
Everyone who works in our system takes great pride in not only serving the best pizza and giving
great service, but also in being a part of the community itself.”
-Kevin Hershock, Hungry Howie’s
“We’re one of the smallest markets in our franchise organization, yet producing among the highest
revenues. As we’ve created a growing organization, we’ve helped people grow individually. Providing
a situation for others to earn income and provide jobs is an honorable endeavor.”
-David Stein, Office Pride
“I love the interaction and relationships I have with my customers and employees as well as Family
Fare’s management and support staff. As a member of the Franchisee Advisory Board, I also enjoy
providing input from my perspective and that of other franchisees to Family Fare.”
-David Lasater, Family Fare
“I just have to say it, I like being the boss. I get great personal reward from charting a course and
then watching our team reach the goal. Second, I love serving people, which is why I loved the
military.”
-Jud Cook, Christian Brothers Automotive
Tip
Every franchise system has a different set of core values and a different culture. Before choosing which
brand you want to join, consider your own values, passions, and personality. Finding a system that aligns
well with you (and you with it) will give you a much greater chance of success.
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What advice do you have
Q:
for prospective franchise
buyers?

“It’s important to have a passion for the business. There will definitely some long days and nights.
Without the real desire to make the business successful, it could become difficult.”
-Terry & Kathy Siebert, Dale Carnegie Training
“Follow the system! Don’t try to recreate the wheel. Being part of a franchise family that is
transparent and works closely with you is such an amazing benefit to business ownership and is
worth its weight in gold.”
-Tracey Codd, Expedia CruiseShipCenters
“First, be involved in your business. Never let yourself believe that the business will function just as
well whether you are involved in day to day operations or not. Second, believe in your franchisor
and follow the guidelines that were set by them to succeed.”
-Kevin Hershock, Hungry Howie’s
“I highly recommend conducting validation calls with current franchisees within the organization
you are considering. Discuss their experiences, return on investment, how your background meshes
with the rigors of the business, support given from corporate, earning potential, sustainability of
service or product, and the balance of time.”
-Chris Beer, Our Town America
Tip
There is a ton of great advice out there (and some not so great) about finding the right franchise. Our website
contains a ton of material that can point you in the right direction. We also recommend making sure the brand
you choose has a history of success. FBR’s Top Franchises list is a great place to start!
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Questions to Ask
Franchisors
To help determine if the franchise you are considering is a good investment,
ask the franchisor the following questions:
• How long has the franchisor been franchising?
• What is the expertise/experience of the executive team?
• Is this business financially sound? Ask if they can provide three years’ of audited
accounts and current management accounts and have your accountant look at
them.
• How many existing franchise owners are there? How many franchise owners
have failed? Why did they fail?
• What data is there to prove the viability of the marketplace? Is there a long-term
market for the products or services?
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Questions to Ask
Franchisors (continued)
• Who are the main competitors and how do they compare to the franchise in
terms of price, quality, delivery, and service?
• How much is the start-up investment and what does it include?
• How much will you have to pay the franchisor on an ongoing basis?
• What are the financial projections for your business?
• Is there a set territory? How does the franchisor prevent its franchisees
cannibalizing business from each other?
• How long is the term of the franchise agreement? Can you renew it?
• How long does it take to be up and running once the agreement is signed?
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Q:
Has franchising met your
personal and financial
goals?

“Personally, it has made me a more confident person when it comes to business decisions, my
relationships, and being able to help others, which I find very rewarding. I have trained and
worked with many great home inspectors and other franchisees, which has been a pleasure.
Financially, I have been able to support my family and plan my future. I am grateful to this
business and everyone in the HouseMaster family.”
-Butch Upton, HouseMaster
“Our business has given me and my team great personal satisfaction as a result of helping
and supporting clients and their families through difficult times. When families say, ‘I was so
overwhelmed, we could never have done the placement without you,’ or when social workers say
CarePatrol has helped them meet the needs of their patients ... it makes you smile and you continue
to put in the long hours. If you continue to help individuals and go the extra mile, your financial
goals will be achieved.”
-Ryan Knowles, Two Men And A Truck
“I’ve had some good jobs in the past within the office equipment and medical device fields. My
corporate career was in sales, sales management, and executive management. I’m earning more than
I ever did in any of those fields. It’s really what I call a “Rich Dad, Poor Dad” type of industry.
Commercial Cleaning flies under many people’s radar, but I can tell you that in tough economic
times, companies will cut back on training, advertising, and marketing, but will not take out their
own trash.”
-David Stein, Office Pride
Tip
One the most common issues we see in franchising is franchise owners feeling that their financial
expectations have not been met. Often, this is not the result of a weak opportunity, but a failure by the
franchisor to help set appropriate expections at the start. As you get deeper into the process, be sure to ask
both the franchisor and current franchisees what to expect financially in your first few years of business.
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Q:
How would you describe
your work/life balance?

“The great thing about our business is you can do it from anywhere. When my family took a
vacation, I carried my laptop and cellphone and set up a remote office at the beach. Candidates and
clients did not know a difference.”
-Weslee Washington, Sanford Rose Associates
“I am able to take a Friday and Monday off for a long weekend or take a week off during the
slower times. I am somewhat flexible. For my first year and a half I worked a lot of 12 hour plus
days and took very few days off. On weekends I would work most of the day on Saturdays and half
a day on Sundays.”
-Milton Chancellor, FASTSIGNS
“ When we first opened, we were at our location or out networking. We did not take vacations for
the first few years, but take about three vacations per year now. You want to know you have staff
who can run the business well if you’re not the shop.”
-Connie Chandler, Minuteman Press
“When I first opened ... a seven day work week was the norm. There wasn’t any staff and I did it all.
As time went on .... I was able to hire staff. This allowed me not only time off, but the opportunity
to really start working on my business and not just in my business. I went from working seven days
a week to having one to two days off a week. Today, I still work six days a week, but this is because I
want to and not because I have to.”
-Susan Maranhaos, Our Town America
Tip
As these comments above convey, there are two sides to the work/life balance coin. Your first two years
(maybe more) may involve a lot of long days and weekends to get your business off the ground. The payoff
comes once you’ve hired enough staff to free up your time, so you can spend it however you prefer. Make
sure you’re ready to commit to the ramp-up stage or you’ll have a hard time achieving the balance you want!
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What is the most
Q:
challenging aspect of
owning your business?

“It’s great to have my own business, but in all cases, the buck stops with me. It is nice to know,
however, that I have a tremendous amount of support from the team in my office, my fellow
franchise owners, and the home office.”
-Mary Worthington, Home Instead Senior Care
“Walking away from bad business. I have literally turned away clients who are indecisive or price
hagglers because I value the time and effort I place into booking a vacation for people. When I place
a premium on my time and expertise, it separates me from a commodity driven shopper that wants
maximum value without paying the premium for my time.”
-Larkin Frazier, CruiseOne/Dream Vacations
“You are ultimately responsible for the success or failure of the business. There is a tremendous
amount of accountability, which can be exciting but can cause a level of fear at times. It is
important to continually develop short-term goals that point you in the direction of attaining your
long-term goals.”
-Chris Beer, Our Town America
“Matching customer service demands with the right number of well-trained, motivated employees
who mirror the vision I have for our company. It is all about hiring and leading people!”
-Jud Cook, Christian Brothers Automotive
Tip
As a small business owner, you’ll undoubtedly face numerous challenges along the way. With a strong
franchise system, you have built-in support from your franchisor, sharing an interest in your success. During
your search, ask many questions about the support provided if you struggle. And once part of the brand,
follow the system closely and don’t be afraid to seek support from the franchisor and other franchisees.
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Questions to Ask
Franchisees
Before you invest, talk to as many franchisees as possible in the brand you’re considering.
There are many questions you may have. Here are some we find particularly useful:
• Did the opening of your business go according to plan?
• How effective and useful was your initial training and is the ongoing training?
• How much support does the franchisor give you on a day-to-day basis?
• If you run into problems, does the franchisor help you solve them?
• Does the franchisor visit you regularly?
• How helpful are the operations and training manuals?
• If the franchisor supplies products, do they arrive on time and is their quality consistent?
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Questions to Ask
Franchisees (continued)
• How long did it take to break even?
• When did you make a profit?
• What was your first year gross revenue? What is it now?
• Has turnover and profitability been in line with what the
franchisor told you it would be?
• Does the franchisor facilitate franchisees interacting with each other?
• How helpful are the other franchisees?
• What do you wish you had known going into business that you did not?
• Is there anything you would have done differently?
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About FBR
Franchise Business Review is the only independent market research firm that specializes in
benchmarking franchisee satisfaction based exclusively on ratings and reviews from franchise owners.
Every year, FBR publishes a series of Franchise Buyer’s Guides, designed to help aspiring entrepreneurs
understand the nuances of franchising and identify the brands that provide the strongest opportunities
to their franchise owners.
Learn more at FranchiseBusinessReview.com or contact us at: info@franchisebusinessreview.com
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