That’s right, folks.
I could have made a lot more money when I was a franchise broker.
It’s not that I’m opposed to making money. It’s just that there were a couple of things that prevented my income from rising much more than it did. Let me explain…
The franchise that I was with, (a franchise brokerage) had a specific business model. Their model favored local territories. In other words, the 50 or so franchise brokers that were a part of this brokerage franchise…that were scattered across the US and Canada, had specific geographical areas in which they could operate. On the surface, it was pretty smart; who better to serve local residents that were interested in becoming franchise owners than a fellow local resident? Except for one little thing;
If you won the geographical lottery, and happened to be born in or moved to a highly populated area, your income instantly increased. For example, the person who operated the office in New Jersey, had around 8 million people to work with…practically in his backyard. New Jersey’s a very small state-land area wise, so only one office in existence. The offices in Los Angeles, Philly, etc. were all busy, busy, offices. I call them “the lottery winners.”
I lost the lottery.
My office was in Cleveland.
Now, without it sounding like I’m slamming my hometown, (I still operate my office in Cleveland) let’s face it; Cleveland is not exactly a booming area, population-wise. Generally, people aren’t moving here. In fact, the opposite has been happening for years; people are leaving. In droves. We were in a recession two years before the rest of country. (I guess that makes my city a trend-setting area.)
Some might argue that Cleveland and the surrounding area is the #18 DMA. Read The Plain Dealer DMA Report. So it is. I have to tell you though, it never really felt like there were over 3 million people in my area. (Not Cleveland, proper. Northeast Ohio.) I marketed pretty heavily during my time as a franchise broker. I had a decent amount of publicity. Lots of local referrals, too. I had a couple of good years. Never as good as the brokers who had The Big Offices, though.
Geography was one reason that I didn’t earn more when I was a franchise broker. There just weren’t a huge number of people locally that were interested in becoming franchise owners. Let me rephrase that; there weren’t that many qualified people that were interested in becoming franchise owners. Which leads me to the 2nd reason that I didn’t earn more as a franchise broker.
I turned away lots of people.
I could have met with a lot more people than I did. I would have made more money if I had. I didn’t choose to, though.
Lots of people talk about being their own boss someday.
“If the timing’s ever right, I’d love to own my own business, someday.”
“I’ve always wanted to own an ice cream franchise.”
“I’m sick of corporate America! I want my own business.”
Those sentences were very common. (And still are.) But, just because someone says that they’d like to own their own business doesn’t mean that they’re qualified to do so. Does that sound harsh? It’s not meant to. Hey, I’d really like to have a car like the one below for my summer ride. It doesn’t mean that I qualify to own one.
(A Ferrari 458 Italia. 0-60mph in under 4 seconds.)
I turned away tons of people. For lots of different reasons. Some of the reasons were financial; their net worth’s were a little light. Figure your net worth out before you look for a franchise to buy. I had people almost beg me to arrange a meeting with them, but I didn’t have the heart to do it. They had enough money…well, they were right on the cusp…but, I didn’t feel right about working with them, because I knew in my hear that they wouldn’t be able to make it through their 1st year in business. Their money situation was too tight, in my opinion. (But usually not in their opinion.) These people weren’t too pleased with me. (I knew that I was doing the right thing, so it didn’t really bother me too much when they hung up on me.)
Another common reason that I had for not working with a prospective franchise owner had to do with their personality. (No jokes, please.)
There were several other reasons for me to turn prospective franchise buyers away; some had to do with the fact that we didn’t bond very well. There were other instances in which I felt that the person on the other end of the phone was just kind of “fishing.” These types of folks were just curious, but never really had any intention on doing something as big as becoming the owner of a business.
I didn’t believe in making it easy for someone to meet with me, via phone, or in person. I guess that you could say that I made them “work for it.” Does that make sense? I figured that if they made it through my qualifying process, they must be pretty darn serious about becoming the owner of a business.
I still work with prospective franchise owners. But, not as a franchise broker. I work in an advisory capacity, helping people make sense of the franchise selection and research process. I can help you, too. Just contact me.
“We want to thank Joel Libava for helping us slow down, take a breather, and truly understand what is best for us. Joel was so right when he said ‘buying a franchise is not for everyone’. We thought it was a shoe-in for us until we learned more and decided to say ‘hold on bobalouie,’ this may not be for us after all. Our destination is yet to be determined, but I can say for sure we are much more informed today. Anyone thinking about buying a franchise needs to realize there is more to this than just wanting to own a franchise. Talk with Joel Libava-The Franchise King, way before you make ANY decisions, as he knows his stuff and helps you know yours, too. Joel truly is ‘The Franchise King’ and wears his crown well!!!” – George and Regina-Lexington, Kentucky