Hosted by Jeff Walter, Founder and CEO of LatitudeLearning
Buying a franchise can provide an entrepreneur with an established brand, a proven business model, operating systems, training, technology, and the support of an existing network. Those advantages can make franchising an attractive alternative to building a business completely from scratch, but they do not eliminate the risks that come with business ownership. Choosing the wrong franchise can create years of financial pressure, operational frustration, and personal dissatisfaction, while choosing an opportunity that aligns with the owner’s goals can create a path toward financial independence and long-term business success.
That was the focus of this special edition of the Training Impact Podcast, recorded during a live presentation at The IFA World Franchise Show: Franchising Expo USA. Host Jeff Walter, Founder and CEO of LatitudeLearning, joined franchise veteran Barry Falcon for “The Ultimate Franchise Buying Guide: A to Z,” a practical conversation designed to help prospective franchise owners understand what they should consider before making one of the largest business and financial commitments of their lives.
Falcon brought approximately 25 years of franchising experience to the presentation, including experience on both sides of the franchise relationship. He has been a franchisee, became a franchisor after growing and selling his first franchise business, and has subsequently been involved as a franchisor four times. Walter approached the discussion from a complementary perspective, focusing on the processes, systems, technology, training, and organizational infrastructure that help franchise networks perform successfully. Together, they provided attendees with a perspective that went well beyond simply comparing franchise brands or reviewing financial projections. Episode Transcript
One of the strongest themes throughout the presentation was that the franchise buying process should begin with the buyer, not the franchise. With thousands of franchise concepts available across industries ranging from restaurants and fitness to home services, health care, retail, real estate, and professional services, prospective owners can quickly become overwhelmed by the number of opportunities available. Falcon’s recommendation is to narrow the field by first developing a much clearer understanding of the life and business you actually want to build. Episode Transcript
That means thinking seriously about the day-to-day realities of operating different types of businesses. Someone considering a restaurant needs to understand that the business may operate seven days a week from morning until night. Someone considering a service business needs to understand what happens when an employee does not show up and the owner becomes the person responsible for delivering the service. Other prospective owners may specifically want a business that can eventually operate under professional management because their goal is to own the enterprise rather than become its full-time operator. These are fundamentally different lifestyles, and they should influence the franchise selection process from the beginning.
Walter expanded on Falcon’s “know thyself” principle by emphasizing cultural fit. Buying a franchise does not simply mean licensing a brand and following an operating manual. The franchisee becomes part of a network and will spend years interacting with the franchisor, field support staff, other franchisees, vendors, employees, and customers. As a result, the values and culture of the organization need to align reasonably well with the franchisee’s own expectations and approach to business. Walter noted that strong performance within franchise networks is often connected not only to selecting capable franchisees, but also to creating a good fit between the individual and the culture of the brand. Episode Transcript
Falcon illustrated the importance of this personal alignment through the story of his first franchise, Velocity Sports Performance. When he purchased the business in 2003, his daughter was a competitive tennis player, and being able to travel with her while she competed was an important personal priority. He deliberately did not want a business that required him to be physically present every morning to open the doors and every evening to close them. By choosing a sports performance business that could operate under a general manager, he was able to build a business while still traveling with his daughter throughout her competitive tennis career. Episode Transcript
The lesson is important because prospective franchise owners can easily become attracted to a concept before considering whether the actual work fits their lives. A franchise may have attractive economics, strong branding, and impressive growth, but those advantages may mean very little if the owner dislikes the daily responsibilities required to operate it. Rather than selecting a franchise and then attempting to reshape your life around the business, Falcon and Walter encourage buyers to define the life they want first and evaluate franchise opportunities against those criteria.
Understanding yourself also means defining what success looks like financially. Falcon refers to this as knowing your “go-to-the-beach money,” which is the financial outcome that would allow you to eventually step away from the business on your own terms. Instead of thinking only about opening a location or generating an annual salary, he encourages prospective franchise owners to think much further ahead and consider what they ultimately want the business to accomplish for them.
Falcon shared that one of his franchise businesses was built with a specific exit objective in mind. His original expectation was that it would take approximately eight years to reach that goal, although the journey ultimately took 12. The company eventually grew to 165 locations and was sold to a private equity company, allowing Falcon to reach the financial objective he had established years earlier. The timeline changed, but the destination had been clear from the beginning. Episode Transcript
This creates a very different way of evaluating a franchise opportunity. Rather than asking only whether a franchise can generate income, prospective buyers can ask whether the economics and scalability of the concept can realistically support their long-term objectives. For some people, success may mean owning one location that provides a comfortable income and a desirable lifestyle. For someone else, the objective may be developing a multi-unit operation that can eventually be sold. Neither approach is inherently better, but the opportunity needs to match the objective.
Walter added another useful dimension to this discussion by encouraging prospective owners to think about where they get their energy. Some entrepreneurs thrive on managing large organizations, developing people, and overseeing dozens of locations, while others would find that type of responsibility exhausting. Some people gain energy from directly serving customers, while others are much more interested in building processes and systems. Financial goals are important, but Walter’s point was that the journey toward those goals still needs to involve work that the owner finds engaging enough to sustain over many years. Episode Transcript
Once prospective owners have defined their goals, Falcon recommends looking carefully at the relationship between risk and reward. Franchise investments vary enormously, and the amount listed as an initial franchise fee represents only one part of the financial commitment. Depending on the concept, a franchisee may also need substantial working capital, equipment, inventory, construction, employees, real estate, technology, marketing, and other resources before the business generates meaningful revenue.
Real estate can substantially increase that exposure because a brick-and-mortar franchisee may be required to personally guarantee a lease lasting five, seven, or ten years. If the business performs poorly or closes, the lease obligation may continue. Falcon explained that lease guarantees can sometimes be negotiated or structured so that the guaranteed amount declines over time, but prospective owners need to understand those obligations before they commit to the franchise. Episode Transcript
Falcon also cautioned buyers against assuming that a lower-cost franchise automatically represents a better or safer investment. He used the example of purchasing a relatively inexpensive food concept that generates approximately $300,000 in gross revenue. Once rent, cost of goods, insurance, labor, and other operating expenses are removed, the owner may discover that they have essentially purchased a job producing $40,000 or $50,000 a year. That could still be a reasonable strategy if the owner’s plan is to establish the first location and then expand into a larger multi-unit operation, but the buyer should understand the economics before making the investment rather than discovering them afterward. Episode Transcript
The broader lesson is that franchise buyers need to evaluate the complete economic picture. The appropriate question is not simply how much it costs to buy the franchise, but how much capital is truly at risk, what additional obligations are being assumed, what level of cash flow the business can reasonably generate, and whether the potential return justifies that exposure.
Another important part of franchise due diligence is understanding the competitive environment. A franchise may have a recognizable brand and a compelling presentation, but it will still compete for customers against other businesses within the market. Falcon pointed to categories such as pizza, hamburgers, fitness, HVAC, electrical services, painting, landscaping, and other home services where multiple franchise systems and independent operators may be pursuing the same customers. Episode Transcript
Walter suggested taking the analysis one step further by identifying the franchise brand’s genuine competitive differentiation. Every franchisor can explain why its concept is different, but prospective franchisees need to determine whether those differences actually matter to customers. A catchy feature or marketing slogan may help tell the brand story, but it does not necessarily create a sustainable competitive advantage. Buyers should evaluate the concept from the customer’s perspective and determine whether the brand offers a meaningful reason for someone to choose it instead of the alternatives. Episode Transcript
This is particularly important when evaluating a franchise in a crowded category. A strong franchisor should be able to explain not only how the concept differs from competitors, but why that differentiation matters in the marketplace and how the franchisee can translate it into customer acquisition, retention, and ultimately profitability.
One of the more forward-looking portions of the live presentation addressed a factor that is rapidly becoming part of franchise due diligence: technological disruption. Falcon challenged attendees to consider whether the business they are evaluating is “Amazon proof” and “AI proof,” meaning whether emerging technologies, automation, digital platforms, or new distribution models could fundamentally change the value of the franchise during the life of the agreement.
Walter expanded on the artificial intelligence side of the discussion by suggesting that information-oriented businesses may face greater exposure to AI disruption than businesses that require significant physical work or human interaction. An HVAC technician physically diagnosing and repairing equipment in a customer’s home, for example, may be more insulated from direct AI replacement than a business built primarily around processing or providing information. At the same time, even businesses that cannot be replaced by AI can still be transformed by it through changes in marketing, scheduling, customer service, analytics, sales, and operational processes. Episode Transcript
For a prospective franchisee considering a long-term agreement, this is an increasingly important question. The goal is not to find a business that will somehow remain untouched by technology. Instead, buyers should consider whether technology is more likely to strengthen the underlying business model or erode the reason customers need the business in the first place.
The presentation then turned to one of the most important resources available to prospective franchise owners, the Franchise Disclosure Document, commonly known as the FDD. Falcon described it as a lengthy and often intimidating document containing 23 items that disclose important information about the franchise system. Among the areas he highlighted were Items 5 and 6, which address various fees associated with the franchise, and Item 7, which addresses the estimated investment required to open the business. Episode Transcript
Walter introduced a practical way that prospective franchisees can use artificial intelligence to help navigate such a large document. His suggestion was to create an AI project built around the buyer’s own criteria, including financial limitations, lifestyle objectives, brand values, and other factors identified during the “know thyself” process. The FDD could then be analyzed against those criteria to identify sections that deserve closer attention. If the prospective owner has established a maximum investment level and the FDD indicates that the concept could require significantly more capital, for example, the tool can help surface that discrepancy quickly. Episode Transcript
Walter was also careful to distinguish this type of analysis from legal advice. The purpose of using AI is not to replace a qualified franchise attorney, but to help a buyer understand a complicated document, identify important questions, and become better prepared for professional due diligence.
That distinction leads directly into another critical lesson from Falcon. The FDD provides disclosure about the franchise opportunity, but the franchise agreement defines the actual contractual relationship between the franchisor and franchisee. That agreement can govern the relationship for ten years or longer, which makes understanding its provisions considerably more important than simply becoming excited about the brand.
Once a prospective franchisee has worked through the Franchise Disclosure Document, Barry Falcon stresses the importance of understanding the distinction between disclosure and commitment. The FDD provides information about the franchise system, while the franchise agreement establishes what the franchisor and franchisee are contractually agreeing to do. Falcon compares the franchise agreement to a prenuptial agreement because it becomes especially important when the relationship is not going as planned. When the business is performing well, the document may sit untouched, but when a franchisee is losing money or believes the franchisor is not providing promised support, everyone begins paying much closer attention to exactly what was signed. Episode Transcript
That is why Falcon encourages prospective franchisees to understand the agreement before allowing their enthusiasm for the concept to take over. If necessary, that includes working with an experienced franchise attorney who represents the buyer’s interests. A franchise agreement may establish a relationship lasting ten years, potentially followed by renewal periods and post-agreement restrictions, so this is not the place to assume that everything will work itself out later. Episode Transcript
The broader lesson is consistent with the entire franchise buying guide: enthusiasm should never replace due diligence. Prospective franchisees should be excited about the opportunity they ultimately select, but that excitement should come after they understand what they are buying and what they are committing themselves to.
Another major milestone in the franchise buying process is commonly called Meet the Team Day or Discovery Day. Falcon describes it as a genuine interview, but importantly, the interview works in both directions. The franchisor is deciding whether the prospective franchisee belongs in the system, while the prospective franchisee should be deciding whether these are people they want to work with for the next decade. Episode Transcript
This is where the cultural fit Walter discussed earlier becomes much more tangible. Financial disclosures and franchise agreements can tell a buyer a great deal about the economics and contractual structure of the system, but they cannot completely capture what it feels like to work with the organization. Meeting the leadership team provides an opportunity to understand their values, communication style, expectations, priorities, and approach to franchisee relationships.
Falcon recommends using informal interaction as part of that evaluation. A dinner or conversation that is not centered entirely on business can reveal a great deal about the people behind the franchise. His advice is to pay attention to your instincts and avoid feeling pressured to make a decision immediately. After Meet the Team Day, he recommends walking away, thinking about the experience, and allowing yourself time to evaluate whether the relationship truly feels right. Episode Transcript
Walter then introduces another area where franchise buyers can develop unrealistic expectations. Many prospective franchisees believe they are buying a completely finished “business in a box,” where every process has already been designed and the owner simply needs to follow instructions. In reality, franchise systems vary significantly in how much operational structure and support they provide. Episode Transcript
For that reason, Walter recommends examining the processes behind the brand. What does the franchisor provide for marketing, sales, operations, finance, training, customer service, and other critical business functions? What technology supports those processes? Which procedures must be followed exactly, and where does the franchisee have discretion to innovate?
Walter illustrates this point with the example of a carpet-cleaning franchisee he interviewed who had previously been a Disney executive. The franchisor had a specific process for how carpets needed to be cleaned, but many aspects of the customer experience were left to the individual franchisee. Drawing on his previous experience, the franchisee developed additional service practices around how employees approached the customer’s home and interacted with the customer. The example demonstrates that franchise systems can differ considerably in where standardization ends and franchisee discretion begins. Episode Transcript
This is particularly important because different buyers need different levels of structure. An experienced entrepreneur may value the freedom to improve processes locally, while a more investment-oriented buyer may want a highly standardized, repeatable operating model. Neither approach is necessarily superior, but buyers should understand which type of system they are joining before making the investment.
For brick-and-mortar franchise concepts, Falcon identifies real estate as one of the most important components of the entire investment. A strong brand and operating model cannot compensate indefinitely for a location with poor access, inadequate parking, unsuitable demographics, excessive rent, or unexpected construction and permitting problems.
Prospective franchisees therefore need to understand much more than the address. They should consider square footage requirements, building configuration, plumbing, ceiling height, neighboring businesses, parking, zoning, permitting, and whether the space is being leased or purchased. Falcon also cautions against choosing a location simply because it is convenient or attractive if the occupancy costs make the economics of the business unsustainable. Episode Transcript
The timing of the real estate decision can be equally important. Later in the audience discussion, Falcon explains that he personally would not want to sign a franchise agreement for a brick-and-mortar concept before understanding the location situation. Depending on the market and the requirements of the concept, finding appropriate real estate can take six months, 18 months, or potentially longer. Episode Transcript
The risk becomes particularly clear when zoning and permitting are involved. A restaurant moving into a second-generation restaurant space may inherit valuable infrastructure such as hoods, freezers, and other equipment, while a raw shell may require substantial additional investment. Another concept may identify an attractive building only to discover that local zoning will not permit the intended use. Falcon reminds the audience that once the franchise agreement is signed and the franchise fee has been paid, the fee is generally not something a buyer should assume will be returned simply because real estate or permitting becomes difficult. Episode Transcript
One of the most valuable messages in the presentation comes near the point where a prospective franchisee might be most tempted to stop questioning the opportunity. After weeks or months of research, meetings, financial analysis, legal review, and discussions with family members, the buyer may feel emotionally committed to completing the transaction.
Falcon argues that this is precisely when the buyer needs to remain disciplined.
Before signing, financing should be lined up, due diligence should be complete, the documents should be understood, and the opportunity should still satisfy the criteria established at the beginning of the process. If something important no longer fits, prospective franchisees should give themselves permission to stop. There is nothing wrong with waiting another month, another six months, or even longer if the alternative is committing a significant portion of your net worth to the wrong business. Episode Transcript
That advice brings the presentation full circle. “Know thyself” is not simply an exercise for narrowing the list of franchises at the beginning. It becomes the standard against which every new piece of information should be evaluated throughout the entire process.
One of the most practical recommendations from Falcon is to speak directly with existing franchisees rather than relying exclusively on information from the franchisor. He recommends asking three straightforward questions: whether they would buy the franchise again, whether the home office takes good care of them, and whether they are making money. Episode Transcript
The simplicity of those questions is part of their value. A prospective franchisee does not necessarily need to conduct a complicated research study to learn something meaningful from existing owners. The objective is to understand whether people who have already made the investment remain satisfied with the decision, feel supported by the organization, and believe the economics work.
Falcon’s own approach went even further when he purchased his first franchise. He visited a franchise location and spoke with customers to understand their experience with the business. That kind of firsthand validation can reveal information that financial projections and marketing presentations cannot. The franchise system can explain how the model is supposed to work, but existing franchisees and customers can help a prospective buyer understand how it actually works.
The live audience discussion also addresses franchise consultants and brokers, who can help prospective buyers identify brands that match their interests, lifestyle, and financial qualifications. Falcon explains that a consultant may evaluate the prospective buyer, narrow a much larger universe of brands into several possibilities, and facilitate introductions to the franchisors. The consultant is generally compensated by the franchisor when a transaction is completed. Episode Transcript
That compensation structure does not automatically make the consultant’s advice unreliable, but buyers should understand the incentives involved. Falcon acknowledges that consultants are ultimately involved in sales, while emphasizing that good consultants still take the time to understand what the buyer wants and which opportunities genuinely fit.
Walter offers a useful analogy by comparing franchise consultants to real estate agents. Some agents may primarily want to complete a transaction and collect the commission, while excellent agents are focused on helping a client find the right home. The same distinction can apply to franchise consultants, making the quality and motivations of the individual advisor important considerations. Episode Transcript
Taken as a whole, Walter and Falcon’s live presentation offers a useful counterweight to the excitement that naturally surrounds a franchise expo. An event filled with brands, concepts, entrepreneurs, advisors, and growth stories can inspire someone to imagine themselves as a business owner, but inspiration needs to be followed by disciplined evaluation.
The process begins by understanding yourself. Prospective franchise owners need to define the lifestyle they want, the type of work they enjoy, the culture in which they perform well, the amount of money they are prepared to risk, and the financial outcome they hope to achieve. Only then does it make sense to evaluate individual brands against those requirements.
From there, the due diligence becomes increasingly concrete. Buyers need to understand the competitive environment, determine whether the brand has meaningful differentiation, consider the potential impact of AI and technological disruption, study the FDD, understand the franchise agreement, evaluate the people behind the brand, determine exactly what operational and technological support is provided, validate the opportunity with existing franchisees, and thoroughly investigate real estate when a physical location is required.
Perhaps the most important takeaway, however, is that buying a franchise is not a race to reach the signature line. The objective is not to find a franchise as quickly as possible. The objective is to find a business that fits the buyer well enough to justify the financial commitment, personal effort, and years required to build it successfully.
That is ultimately what makes “The Ultimate Franchise Buying Guide: A to Z” valuable. Walter and Falcon do not present franchising as a shortcut to guaranteed success. Instead, they present it as a potentially powerful business model that becomes much more compelling when the buyer approaches the decision with self-awareness, realistic goals, disciplined due diligence, and a willingness to walk away when the fit is not right.
For more information about the event, visit The IFA World Franchise Show: Franchising Expo USA.
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Jeff Walter (00:00)
All right, everybody, welcome.
To the ultimate franchise buying guide, A to Z. I’m your host or and you’re our guest. I’m Jeff Walter, I’m founder and CEO of Latitude Learning. We’re a software platform. We help franchise ours and franchisees with all the processes and and the tech stack associated, so that’s where I kinda come from, is the the processes and how you automate them and all that kind of fun stuff. And my colleague up yours is Barry.
Hi, I’m Barry Falcon. been in franchising for about 25 years. been in your shoes if you’re looking to buy a franchise. So some of those anomalies. I’ve been a franchisee and I’ve been a franchiseor four times already. Three I’ve exited, one I’m still involved with. So we’ll talk about my journey and I want to be able to answer any of your questions. So don’t wait for the end.
hand up right away and let’s talk about those things immediately. So my experience is I bought my first franchise back in 2003. So I was a franchisee and then I grew that business, sold it, and became a franchisor. Okay. So I have some gray beard, real life experience. And so you win some, you lose some, hopefully you win more than you lose. Okay? So that’s a little about my background.
Well let’s talk let’s talk about the buying process. when I say know thyself, right? You have to look in the mirror and say what kind of business do I want to buy? And there’s a lot of things to look out there. There’s four thousand brands in the US, so there’s a lot of things to think about. Do I want something where there’s cash?
That means you have to trust a lot of people. Do I want a restaurant that’s open seven days a week from morning till night? Do I want a health franchise because people want to be younger like me? Do I look pretty good for like ninety-two years old? So because this lady over here takes care of me and I get special things put in my body. So when I say know thyself, what kind of lifestyle are you looking for?
Right? Do you want to be the business, meaning operator, solopreneur, or do you want to sit back and relax and have a business that makes money for you while you sleep? That’s a pretty good process. But what kind of working conditions do you want to work? Do you want to work five days a week? You want to work seven days a week? Do you want to work morning to night? All those things are very, very important to think about as you narrow down your buying.
What kind of lifestyle do you want? Do you have to be in the business every single day? Are you the owner or are you the owner operator? You want to expand on that, Jeff? Yeah, I and just expanding on it also, I would also look at culture and the cultural fit. Because you’re going to be joining a network and you’re going to be building relationships with other folks in the network.
And so is it a good cultural fit in terms of what’s important in that organization, how they’re treated? From our perspective, what we’ve seen, we support the franchise oars, we look at performance and how to get high performance out of the franchisees. And the best performance comes from the the very good not only fit and know thyself, but also a good cultural fit. Is it the right type of organization for you, the right type of brand, the right type of brand values? It all that is part of the know your thyself. So I would just add that.
So I bought my first franchise in 2003 called Velocity Sports Performance. and so it’s a sports training business for athletes, mostly kids with some adults. Not not sports specific, but speed, power and agility. And I bought that business because my daughter was a competitive tennis player and I wanted to travel around the country while she was playing in tournaments. So I didn’t want to be have to be there every day.
So I bought that business, my daughter trained there, I traveled around the country and I had a general manager that was running own operating it. I owned it, he managed it, right? But my goal was I don’t want to lose the years of my daughter playing tennis with with me not being there. So I got to be there for years and she went from age eight to eighteen playing tennis, so I paid for college in advance.
And then she got a full scholarship to UNC to play tennis. But while she traveled, I traveled with her. And so that was one of my criteria on buying a franchise. I did not want to be there every single day. No opening, no closing. The other thing is, we took no cash. And a lot of companies are going to cashless right now. My my little quote on cash is cash makes honest people dishonest.
Because a twenty dollar bill, a five dollar bill, a two dollar bill is very tempting, and I’m not gonna stereotype it, but very tempting for a teenager to just put in their pocket. Right? So if you have a cashless business, you don’t have to worry about that at night. What do I do with the cash at the end of the night? Where does it go? Does it go with the safe? Do I make a bank deposit? So my requirements were no cash. Right? I don’t wanna have to manage it. And so when you’re buying a franchise
Does the franchise allow you to have cash or is it a cashless business and just straight credit cards, debit cards, Apple Pay, et cetera, et cetera? So any questions about that? Anything? Yeah, so w when you were looking at what brands you wanted to select, what made you go like those were a couple criteria, but what made you go for the fitness brand? Well I went for the fitness brand because my daughter was a competitive tennis player.
So and I’m a s and I’m an athlete or a wannabe athlete and so I wanted something in sports. So and so I trained there and you know I’m an avid cyclist, I’ve done a bunch of half ironmans, I’ve run 17 marathons, and so I wanted something in the fitness space. and I’m currently the CEO of Conquer Padell, which probably you don’t know, but it’s another it’s another franchise that in the fitness space and it has a ball like this and a paddle.
So so in Know Thyself it’s also the your your interest and what do you want to spend your energy? If you want to buy a there’s ten thousand people a day turning sixty-five. So it’s called the silver tsunami is coming here in the US. And so if you want to do in-home health care, there’s a lot of brands to do it. But if your tech if your caregiver calls up sick, do you wanna bathe me? Right? Do you wanna bathe me because I’m the client today and
you want to go bathe a 75-year-old guy. And if you don’t, then maybe that business is not for you. Because there’s going to be a time where your caregiver calls in sick and you don’t have a replacement and you have to go give the care. And so if you don’t want to bathe a guy like me, then maybe that business is not for you.
as you figure out what you want, narrow it down.
Okay, goals. Big one. I call it go to the beach money. How much money do you want to exit for when you can go to the beach and call it a day? And does that opportunity that you’re looking at afford you to to get go to the beach money? So when I started one of my franchises, I had a go to the beach number in mind and we were gonna get there in eight years. It took us twelve.
We sold to a private equity company with 165 locations. I have my go-to-the-beach money. My three kids wanted no part of my business. But they said, Dad, what’s in it for us when you said you sold the business? So I took him to a fancy restaurant in Atlanta where I live. I gave him an an envelope with a check in it and said, have some fun. There’ll be more than more later on if mom and I don’t spend it all.
I’m very generous to my kids now because I’d rather give it to them while I’m alive than when I’m dead. But but I got my go to the beach number. I don’t really need to work. and that’s what franchising has done for many, many people, is you scale it and then you exit it. So I’ve exited two home service franchises already. but I had goals. Right? Not just to open and grand opening. I had financial goals and lifestyle goals. But
No anybody buying a franchise here that’s doing it as a nonprofit? You all want to make a return on your investment, right? So I did an investment and I built a franchise and I worked a lot and a lot of hours and I became the chairman and then I sold it. IRS loves you because they get capital gains and when you write a seven-figure check to the government and your wife says, why? And I said, Don’t worry, sweetheart, we could afford it. But when you exit
Somebody’s paying taxes. But I would tell everybody to know what your goals and see if the business that you’re looking to buy will help you achieve those. And you could have multi-units. So you could buy one location, then another location, another location. There’s people here that own 50 locations of a brand. That’s fine as long as you can get there and meet your goals. So think about that versus if you just want a job. Right? If you want a job.
That’s fine, you could have a job. But you’re never gonna get go to the beach money. Any comments on that, Jeff? Questions. yeah, any questions? Questions about what your number is. Do you know your number? Do you know your number?
Okay. So whatever, whether it’s five million, ten million, fifty million, know your number and then figure out how you can get there with the business that you’re gonna be in. Yeah, I and I would just add to that in the goals, it’s where do you get your energy from? Right? Obviously a financial goal, an exit goal, that’s a a a retirement goal, that’s a
Yeah, there’s I like your go to the beach. It’s much less vulgar than some of the other terms that have been used. So I’m gonna use that in the future. but also if if you look at align it’s all about alignment, right? And it’s aligning the brand and your what you want. And so th one of the questions is is where do you get your energy from? Because there are some people that if you go back to the home health care, yes I don’t mind doing that. I I love giving care Yeah, where’s your where’s your passion?
I’m the type of person and I get my energy from helping people that work. And there’s other and and there are people that are like, I do not want to manage fifty units because I don’t want to be that type of I don’t get my energy from that. It drains me of energy. So I would just add to the goals. Where do you get your energy from? And then from that, what kind of vision do you create and then get to the end end goal? I just had that. Yeah, whatever business you buy, you have to wake up Monday morning and be and be excited about it.
Right? You you want to get out of bed Monday morning and say, okay, this is great, I’m really excited to go do my week. Not like a job and I regret going to work. I got a boss that’s really terrible. And what am I doing here every day, right? My life’s just kind of going by me. And so you wanna have a business where you’re proud of. You know, a couple of franchises I know, they don’t want to wrap their vehicle. And I said, Why don’t you wanna wrap your vehicle?
And so in my routing, we have it as a in my other business we had as a requirement. They said, well, when I I don’t want to get stopped when I’m at Publix or the shopping market, supermarket. I don’t want to talk to all these people. I said, you’re buying a franchise and you don’t want to talk to people? Something’s wrong, right? Don’t buy a franchise unless you want to walk around with a sign that says, This is my business and I’m happy to talk to you. Right? You have to be excited about that. You have to wear it on your smile every single day.
So when you wake up in the morning, you have to be passionate about whatever whatever it might be. I see your your your batch has real estate. So there’s a lot of real estate franchises. But so you want to be happy helping first time homebuyers, if that if that’s what it is. I have friends that do that. And so whatever you pick, have a goal, but have a passion about that business, not just dread every single day. All right. Questions?
I can give out money if somebody had a question. Okay. Well, I’m back here. Okay, this is a big one. Yeah, that’s a big one. What’s the risk? What’s the reward? So in my in in my current business, Conquer Padell, it’s a million and a half to two million dollar investment to get started. That’s a lot of money. What’s the reward? So when you’re looking for franchises,
We’ll get to the FDD later on. We’ll talk about that. But the item nineteen is important. What’s an item nineteen? We’ll we’ll talk about that. But what’s the risk? Am I risking twenty thousand, fifty thousand? Or if you’re like me and I want to risk more, but I have to convince my darling wife that I want to do this because she’s conservative and I’m aggressive. And and I would say I’m ready to risk more and she says you’re out of your mind. And on Monday we’re married fifty-two years.
So we act we got that compromise of how much money we’re gonna risk, right? I’m 75 years old. I’m a lot less risky now than I was 20 years ago. Okay. So what’s the risk? Not always bigger risk, bigger reward, but a lot of times that goes to do it. If you need real estate and you’re gonna guarantee a lease for five or seven or ten years, that’s a big risk, right?
‘Cause if something doesn’t work, you’re on the hook for that lease. So if I’m only gonna pay twenty-five thousand dollars and and my dream job calls me up and says, hey, we’re ready to hire you, Barry. I know you’ve been interviewing for six months and I already bought a franchise and now somebody calls me up and they wanna and they wanna hire me, I might throw that twenty-five thousand away. I might I might throw that twenty-five thousand dollars away and go take my dream job.
Because I make it back in in one month, two months salary. So understand what the risks are of whatever you’re getting into. Are you signing a lease? Are you signing a lease? Are you not signing a lease? That is a big decision. Right? You’re personally guaranteeing that lease for the term of the of the agreement. So again, what’s the risk? What’s the reward with anything? Very, very important.
Questions about that. Big gamble, hopefully big upside. Small gamble, small upside. Let’s use a real life example. I’m not gonna name any names, but you buy a sandwich shop for a hundred grand, and you make in in revenue, gross revenue, you’re making three hundred thousand a year in business. Well, gross revenue, you take away the rent, you take away cost of goods sold, you take away insurance.
You have a $40,000 or $50,000 a year job at best. Okay, but maybe that’s how you get started, and then you go buy location number two, three, four, five. But at the beginning, you’re not making a six-figure salary to start. So you gotta understand what’s your risk, what are you willing to walk away from, and what’s the upside.
I just threw out some pizza places because there’s 50 of them and there’s 72 hamburger places. And so there’s probably at least three pizza concepts here that are saying my pizza is better than their pizza. Okay? My hamburger’s better than their hamburger. Okay? My fitness concept is better than their fitness concept. We run around, we burn calories, and we have the music at 110 decibels.
Okay? So are you entering a market where there’s a lot of franchise competition already? Right? What’s the no you you gotta know the competition. Because if you buy a pizza place that’s Barry’s Pizza, you’re gonna compete with Domino’s and Pizza Hut and Papa John’s and and they’re doing volume and they got dollars from marketing and coupons and their systems are really, really honed in. And now it’s Barry’s Pizza on the corner. Okay, but
Know who your competition is, right? Everybody has competition. They just do. Whatever brand it is, there might be a lot of competition or there might be a small amount of competition, but how big is the market size in your area and how far are people willing to drive to get there? If it’s that kind of business. If it’s a home service business, there’s a lot of HVAC guys, there’s electricians, there’s painters, there’s yard care.
is window washing. So if you enter the home care business, which I was in home services, three of my five franchise oars, I just competed with the other guys. I started a company called ShelfGenie. We manufacture pull-out shelves for kitchens, baths, and pantries. I sold that company with 165 locations, started it with zero. now there’s only one competitor, it’s my former partner.
But so not a lot of competition in the in the United States. So when you’re buying a franchise, understand who your competition is.
you mentioned the risk of the guarantee when it takes to the real estate fees. Have you seen franchisees get to that point and be shocked by the fact that they have to sign a guarantee and walk away from the entire idea franchising? Yeah, so if his question is does the franchisee get shocked knowing that they have to sign a lease? I would say the franchise or needs to educate you on the real estate portion. We’re gonna talk about that it’s one of the slides.
but you should know that up front that you have to sign a lease. If you’re signing a ten year franchise agreement and you’re a brick and mortar, you should be signing a ten year lease to go with it. ‘Cause you’re all in. Right. Specifically on the guarantee piece. Yeah, the guarantee piece is shocking sometimes, especially if you have a spouse, significant other that has to sign off on it also. It’s a challenge. Also could be negotiable. But
I’ve seen a lot of deals right now recently with leases that they’re only franchisees are guaranteeing only three to four years of a ten year agreement. Because they get they they get it to buy down over time. Okay, so understand your competition. Are you in a market with a lot of competition? Are you just another sandwich shop, pizza place, whatever it might be here? who who are you competing with when you open the doors and you go to the Chamber of Commerce?
And there’s six of you doing the same thing under a different name. So just do your research. Make sure you know who you what you’re dealing with. And I I would just I would just add to the competition, every business has competition. Right. Right? The real question is the brand that you select, what’s their unique selling position? And do you really believe in it? Or is it just lip service? Right? Is it something kitschy like we play music at 110 decibels in our place?
Or is it something real of value to the customer that’s a differentiator? And a lot of brands, there’s really not a lot of differentiation. So it’s it goes back to so in in the competition, not only trying to get to the less competition the better, but also you gotta look at the market size, but also within that brand, how is it differentiating itself? And do you really believe that as a customer of the brand?
Is it really a differentiator for the customer or is it just window dressing? So that
Okay, big one. Is the business I’m buying Amazon proof or AI proof? Very, very important because you don’t want a business and two weeks later Amazon is in that business. Because you don’t have a chance. And I’m not an AI guy, so to speak, I’m learning about it. But is your business that you’re about to spend your life savings or a good amount of money AI proof?
Right? The guy fixing my air conditioner at home, that those services, blue collar, somewhat AI proof. Right? Because a robot’s not gonna do that right now. They’re not gonna go in there, diagnose, and do it. But other things, a surgeon, not that you’re buying a medical franchise, but a surgeon, he’s using robotics, but you still need somebody. So is he AI proof? My son is a pilot.
Will you fly in a plane if it’s autonomous like Waymo on a cart?
No, not right. So I go in Muemo because it’s kind of fun and and I’m an early adopter type guy. But my son’s a pilot for United Airlines and flies 737s. There’s no way I’m getting in that plane in my lifetime with nobody up in the cockpit. It’s just not proven out enough. Muomo, it’s safer than driving in a regular car because all you guys are texting and driving and I’m worried about it, right? So but Amazon, they’re
I they’re third party drop shipping everything, right? So they make their own products, they distribute your products. Is whatever you’re doing Amazon proof? Just think about it. Is it AI proof? Are you writing books and somebody else is gonna write a book in fifteen minutes that just took you six months to write? Right? So people are using AI on on things and so and so robotics. I’ve a I’ve
A friend that has a sushi restaurant in New York. He has a robot that makes the sushi rolls so he gets tremendous throughput at lunchtime. So he has a very, very successful restaurant and he has robots making sushi rolls. So he just could get out more with less people. Okay. But what if if your whole business goes away? Right? So think about it. There’s
Whatever you’re buying, could Amazon do it or could AI do it? AI cannot bathe me and Amazon cannot bathe me. So if you guys want to bathe me, it’s a good business.
I now just add on the AI proof. So so so being a technologist, the way to think of that is anything any kind of business that’s information oriented is subject to AI. So like I personally would not buy a tax preparation franchise at this point, even if I love taxes, right? That’s the type of thing that can be AI. Any type of advisory service. we’re building agents in our business.
That are doing things that are just blow me away. Yeah, we we have a we have an agent that can scan Twitter, all of Twitter, and find all the franchise orders that are growing and have just open it just announced and open. Like and feed that to our sales team. Like so when we talk about AI proof, if the business is very information oriented, I’d I’d and not very human touch, and that’s what you’re saying with the HVAC.
It’s what’s AI proof is high human touch, high human contact. Anything that’s high human contact is a it would be accurate. So just to just to clarify that a lot. So important and again and if if anybody wants these slides when we’re all done, just give you my card, send me a note and I’ll be more than happy to send you.
Okay, franchise disclosure document. This is a 120-page document that’s baffling. And people read it, people don’t read it, they don’t even know what it means. There’s 23 items. You could throw out item 23, that’s just a receipt that says you you received it. Item one gives a little background. So which are the most important? That’s all it’s all about how you’re looking at it. So let’s just talk about a couple of them. Item five and six talk about the fees.
How much is this costing me? How much royalty am I paying? What’s my transfer fee? What’s my renewal fee? What’s my initial franchise fee? What’s my marketing fee? Right? All those things are absolutely critical. Item seven. How much money does it cost me to open this business? Not ongoing just to get open. So if I’m a restaurant, how much food inventory do I need?
Jeff Walter (23:33)
So speaking of AI, if I was buying a franchise today, these are big legal documents, right? It’s a hundred plus page, make sure eyes glaze over. What I would recommend is have any people have a chat account? Chat GBT, or a brock, or Gemini or any those?
You set up a project, you have it, you tell it, I’m looking for a franchise, you’re an expert at FTDs, and I want you to evaluate this FTD based on my criteria, that know thyself, that criteria, and you set up a project for that. Then when you get the FDD or whatever brand you’re looking at, you send it through that and go, What do you think of this relative to my criteria? And to dumb it down, and you’ll go,
well the maximum investment is a million dollars and you said you only were willing to put a hundred thousand in and and this yeah.
So I would really recommend when you get to this stage to just create a project in chat or anything else. Give it a prompt to give you the instructions. And in that when you’re giving it that prompt, you what your criteria are, what brand values you have, what kind of financial limitations, other things, and then have it analyze this because a hundred and twenty page legal document is something that will just numb your brain if you’re not
used to doing that for a living. And and then it it it will show you, in section, you know, in item number seven it says this that is not in line with what you want. Then you can go to item seven and read it in detail. So that’s what I would suggest. Also not a lawyer. This is not legal advice. just something I would personally do. So understand the franchise the disclosure document is just a disclosure document. What you’re signing is the franchise agreement.
are all the terms of what you’re gonna do as a franchisee and what the franchise or is gonna do so those are the commitments what’s in the franchise agreement when things go south for whatever reason right and what I mean by things going south means the franchisee’s losing money when everything’s good and it’s come by y’all and we’re having a good time that document’s in the safe deposit box we’re never even looking at it it’s all good
But as soon as the franchisee’s not making money in their negative cash flow every month, then the document seems to come out and instead of going to marriage counseling, the lawyers get involved. Right? Because the franchisee wants out, and the franchise lawyer says, well let me help you, you’re not doing this, you’re not doing that. So the only people that win are the attorneys.
So
the franchise agreement is your pre-nuptial agreement. You both signed it for ten years, you’re gonna be in the family for ten, and you don’t have a long dating cycle, right? Very short, thirty, sixty, ninety day dating cycle, then you get married for ten years. You don’t know that person.
So I married I dated my wife for about a year and a half and then we got married and so I’m fifty-two years into it on Monday, I mentioned, and so we had a good due diligence process, right? And but peaks and valleys of relationships, right? And so then you pull out the the franchise agreement when you have to, and you sit down and say, This is what I signed, this is what you’re not providing. It goes both ways.
to that franchise agreement is very, very important. The disclosure document is telling you about the business. The legal document you sign is the franchise agreement. Usually ten years, depending on the CapEx, to get started, a couple of five year renewals. And usually a two-year non-compete at the end. But
Understand what you’re signing and if you’re not sure, go hire a franchise attorney. That’s not your, that’s not the franchise or attorney, call the franchise consultant, but at least go through it and understand what you’re signing. Don’t be so enamored. When people buy homes, they’re enamored with the kitchen and the family room. And they get emotionally tied and they’re ready to buy the house.
And then the husband says, well, what about upstairs and the bedrooms are too small and there’s no backyard and she just loves the kitchen, right? And she’s ready to buy. Understand that’s why you have 14 days minimum before you can sign. No in the bar, get drunk, sign. Can’t happen.
Meet the team day. At some part of the process, whether it’s meet the team or discovery day, you’re gonna meet the principles or the execs of that franchise. The bigger the franchise, the lower level person you’re gonna deal with. My business, I’m the CEO, you’ll deal with me. But you’re gonna meet the team day. So that’s interview, real life in-person interview. The franchise ours interviewing you.
you’re interviewing the franchiser, the franchisee. Right? What’s the culture as as Jeff mentioned? you have similar beliefs. I try to keep religion and politics out of franchise discussions. It’s a no-win situation.
franchise or is very very very very political and your views are not aligned politically that might not be the business for you and you’re not you might not find that out until Meet the Team Day. So Meet the Team Day is interview process, but the night before it’s go out for dinner and get to know each other. See what the values are. Don’t talk business at all. Talk about life.
kids,
talk about goals, talk about health, anything you want but not business. And get to learn in your gut, are you letting this person in your family? Because they’re ready to write a check for 40 or 50 grand.
Don’t worry if you have to make payroll next week, because that’s desperate. Worry about am I getting the right franchisee in the business? And you as the franchisee, am I getting the right culture? Do they give back to the community? Are the emplo what’s their turnover rate on is it a good place to work? These are all the questions about the business that you don’t see in the legal documents. Find out who the owners are.
Google that at least. I mean Google me and you’ll find out a lot of stuff about me. All good. Never never wore an orange jumpsuit, but I’m very philanthropic and you’ll see the things I do. so my name’s Barry Falcon, so BarryFalcon.com talks all about me. but so when you do a Meet the Team Day, is there a cultural feel? What’s your gut saying? This is like the big date.
And then afterwards you’ll leave there. You won’t sign there. Some franchise lawyers try to get you to sign there. I say walk away and digest that meeting. Questions?
Yeah, right, exactly. Good good question, yeah. Uh-huh.
So as I said when I introduced myself, I I’m more on the process side and that. Culture, complete, you know, it has to be a good fit culturally, it has to be feel right, it has to be the type of business. Now now you get into where most the biggest disappointment to franchisees after they buy. They think they’re buying a business in a box. They think everything has been thought through and all the processes, they just have to turn the key and it’s gonna run.
So the the other thing with the Meet the Team and other is what exact processes are they recommending on marketing, sales, operations, finance? How is that going to work? What tech stack are they providing to support those processes? And you’ll see different brands have different some are, you know, 100% and you can’t color outside the lines.
Some are we’re really just focused on this. I I will I I host a podcast. I interviewed a franchisee who had a carpet cleaning franchise. All that franchise or cared about was that you clean the carpets their way. Now, this particular franchisee happened to be a former Disney World executive, and so he disnified the entire process.
complete
with you always park the truck in the street because we never want to driboil on your driveway. You walk up, you put a mat down, you wipe your feet, you knock on the door, you step back, you give them a gift. That was not part of the franchise. So in the meet the meet the team day or as you’re evaluating this, one of the other things you have to think you have to evaluate once you get that good fit is for a process and procedure and and tech stack support, what are they providing? What do you have to provide?
Where do you have to follow the letter of the law from a process and procedure standpoint? In my example, that’s you will clean the carpets this way. The way you greet the customer at their door, franchise owner had nothing to say about. So just depending on what, you know, getting back to the risk reward, depending on your own background.
What support do you think you need? What support, where do you want to be able to color outside the lines? So I would add that to as you’re evaluating. And it and it really depends on you. And especially if you’re going more investor oriented, you want it more cookie cutter turnkey.
It’s definitely the interview process. So use that time together. When you meet the team day, you’ll meet probably the team, whoever else is involved in the business. But use that to ask questions, use that to see how they answer the questions and you’re gonna get married. So see if you can live with this person for the next ten years.
Real estate’s huge.
If you’re a brick and mortar franchisee, understand the real estate. Understand that you’ve got to sign the lease. Understand is what’s going on around you after you get excited about that location because all of a sudden they’re gonna have construction for the next 18 months across the street from you. So the any brick and mortar the real estate, absolutely key. Is it is it a business where you’re in a strip center? Is it standalone? What’s the parking requirements? The franchise or should give you all those
Of what it needs to be. This many square feet. The plummies in the back. Do you have restrooms? How high are the ceilings? Who’s the neighbors? Can you hear them? Et cetera, et cetera. But really, really hone in on the real estate. Just don’t pick something. Are you leasing the real estate? Are you buying the real estate? Two different things to do. But understand on breaking water, very, very big factor. Your rent is a significant.
on the PL, your rent is a significant percentage of revenue. Don’t get it too high because you found a great location, it’s five minutes from home, and the and the rent is gonna be 18% of revenue. You’ll never make it. 10% or less, you gotta be careful on the rent.
Yeah,
sure. Yeah. How do you guys feel about lease versus le the question is how do we feel about lease versus own? Owning is better, kind of like McDonald’s and Chick-fil-A. So if you could afford to own and then pay yourself rent to a separate company, much better in the long run. So owning is good from a tax standpoint as well. Okay, if you’ve gone through all this stuff and you’re ready to go, decision time.
You’re all excited? It’s past the 14 days. You did your due diligence. You’ve read the documents. You got your significant other to agree. You got your finances lined up. Don’t don’t sign until the finances are lined up. If you need to get a loan, get that loan approved and going before you sign. Unless you could have a contingency. Because if you don’t you don’t get the loan, you’re still well, you just signed the agreement. Okay. So
go because you come home and you’re ready to go. You say stop, this is not for me. It didn’t meet one of my criteria. And you say that to yourself on the first slide on getting to know you. And you tell the franchise or I’m sorry that this doesn’t meet my requirements. The franchisor might say, hey, I know you’re excited about joining our team, but we don’t want you. And they’ll tell you nicely that you don’t fit our culture. They’ll say no. Especially if it’s an established brand.
‘Cause you don’t want jerk franchisees. If they’re an emerging brand, one or two locations, they might take that check anyway. I don’t agree with that, but they might take it. Right? And then you have a high maintenance franchisee versus a low maintenance franchisee. Right. So the challenge. So you can always wait. I’m not sure yet. I gotta do more homework. I gotta s go to some more shows.
It might take another month, it might take six months, it might take a year. The only risk if it takes a year is the territory where you live in and you want might be sold. But wait until your gut says and the numbers say this is good to go. There’s nothing wrong with stopping. Nothing wrong with moving on.
big decision and a lot of people, it’s a big part of their net worth.
Questions. Who’s looking to to buy a franchise like in the next thirty, sixty days? Anyone have that close to buying a franchise? Six months out?
Mark Siebert has a booth over there, i Franchise Group, and he’s written three books and one of is How to Buy a Franchise. So it’s a very, very good book and and they’ll probably set you up with it if you go to that booth. But I mean questions. Help you, or does it just come for the money?
Yeah.
question is if people come to meet us on meet the team they have me
And seats, meaning get them to Discovery Day or be creep day. You should have a very high close ratio once you get the people to visit you. They’ve already been.
locations they’ve talked to they validated they talked to franchisees so you should have an ADA
Should be very
Shout out to Alan.
Has to give you a list of all the franchisees. Your contact information, the ones that are open and the ones that are closed. And you need to call them. You should call them. And ask. What, how’s it going? Three questions to ask. If you had to buy this franchise again, would you? That’s one first question. Is the home office taking good care of you and servicing you? Third question: like making money.
Those are the only three questions I’ve got to see. And you gotta ask that. When I bought my first franchise, I went to the franchisee and I sat in this lobby and I talked to parents to see how they liked their kids. So you gotta do your due diligence. You’re gonna spend hundreds of thousands of dollars. Don’t take their word for it. Go talk to franchisees.
for you Barry. You used or involved with franchise consultants because I think a lot of folks look to franchise consultants as as as helping them find the right brand and what are your opinions on that? Yeah so franchise consultants are great and there’s a lot of them out there. And so what they do is do an analysis on you you know what’s your financial what’s your look in the mirror what what do you want and they represent 40 or 50 brands they’ll narrow it down to three or four brands and
set up Discovery Day for you. They will qualify you basically saying you can’t buy a Concord Padell because you don’t have enough capital, right? Your net worth isn’t high enough. So don’t can’t can’t you can’t do that one, right? Even though you might want to. so brokers will help you narrow it down, set it up to the franchise ore. They get paid by the franchise ore. So you don’t have to pay any extra.
Just
you they close the deal, the franchise or pays the broker or the consultant.
Yes and no. Yes, they’re gonna feed you the ones that are easy. Yes. but but a good a good a good franchise consultant or broker is gonna really go through the process. What’s your lifestyle? What’s your economics? that’s very, very important. What do you like, what do you don’t like? It’s the same thing we talked about at the beginning of know thyself. They’re gonna go through all those brands. They’re gonna do a financial analysis and say these are the brands you could afford based on what you’re willing to spend.
And they’re gonna go through that. And so, yeah, they’re sales guys and yes, they might try to push you to one that’s easy, but not they’re not all like that. They they want to help you. and there’s some some gear But I get my card, I can even refer you to people. I I think the personally I think the right way to think of the consultants are they’re like real estate agents. That’s what I’m saying. And so you’ve got real estate agents
that just want to get you in a house and collect a commission. Right. And you got people that want to get you in your forever home. And so it’s this very similar type of
So any any other questions about anything franchise related?
So so some franchise oars have a whole real estate team that help you, and some franchisors you’re on the own, but the franchise oar must approve your location. They must approve the lease.
So they should be helping you and they should have connections on local brokers if it’s a national company. It’s absolutely paramount. I would not I would not sign personally, I wouldn’t sign the franchise agreement myself until I found the location. Could take six months, could take eighteen months, depending. What size building, what’s the rent, strip center, not strip center.
They do. But that that’s only you know established brands. If you’re looking to buy an emerging brand, they don’t have those national agreements in place, but they normally will have somebody they can refer you to. So normally the franchisee’s looking and a broker is looking for them at the same time. But it’s key. Real estate is absolutely key if it’s a brick and mortar business.
If you’re buying a restaurant and it’s a second generation, meaning the hood’s in there, the freezers are in the back, that’s great. If it’s just a white empty shell and you gotta do grease traps and hoods because that’s your business, right? What about the permitting process? You go bought this franchise, but you’re gonna open up a ten thousand square foot pet business, but you can’t get zoning.
Gotta get all that stuff worked out, the franchise has to help.
Some
They should. That’s true. They should. I mean once you sign, the franchise fee is non refundable. So you write a check for forty thousand, fifty thousand, twenty thousand, whatever it might be, and then a year goes by and you can’t find a location. Or you can’t get the zoning, you can’t get the permitting. They don’t give you your money back. They just extend the opening date. But they do not give you your money back ever.
Once that check clears and they give themselves a high five, you’re a franchisee. Like it or not, you’re a franchisee. There’s no going back. You could sell it somewhere in your 10-year term, but there’s no going back at the beginning.
Other questions?
Thank you for attending. I’ll stick around for a little while. People wanna come out and ask questions. go see Mark if you wanna get a book and come play Padell.