Buying a franchise is the largest business investment I’ve ever made (if you don’t count the time I’ve put into my career). It was scary and exhilarating all at the same time, and it took hours of research. Luckily, I had an inside track with the company I purchased my franchise from. Since 2008 I’ve worked for 1-800-GOT-JUNK?, the world’s largest junk removal company, founded by Canadian entrepreneur, Brian Scudamore. The valuable insights I’ve gained into the world of franchising played a huge role in my decision to become a Franchise Partner of Brian’s new moving franchise. In 2013, Brian launched a unique moving company called You Move Me with the mission to move people, not just their boxes. I was heavily involved in the start-up of the new brand and was impressed with Brian’s dedication to transform the moving industry by bringing the same high standard of professionalism and exceptional customer service that made 1-800-GOT-JUNK? a success. I believed in his vision and wanted to get in on the ground-floor so I started looking into the Victoria and Nanaimo markets. That was the beginning of a long process and I learned a great deal along the way. Here are a few lessons I have to share from my journey to becoming a You Move Me Franchise Partner.
Talk to existing Franchise Partners
Your best resource when making the decision to buy a franchise are existing franchise owners in the system you’re interested in. Talk to as many as you can and don’t be afraid to ask them anything because buying a franchise is a massive commitment and you want to be as prepared as possible for life as a business owner. Here are a few of the questions I asked that provided me with valuable information from the front lines of franchise ownership:
What conditions in your market do you see as a threat to your business?
What is the biggest challenge you face daily?
How much support do you get from the franchisor and how often?
What did you find out after you started that you wish you’d known before?
Know your partners
Joining me in this adventure are three partners who I’ve come to know very well throughout this process. It’s so important to understand from the start just who it is that you are getting into business with. We spent a lot of time discussing the various challenges and pitfalls that could potentially cause a breakdown in the partnership and we created detailed provisions to resolve issues as they might arise. The most important part for me though was figuring out if we could work together. We wrote our business plan in a highly collaborative manner, splitting the workload evenly and making all decisions unanimously. We weren’t scared to argue with each other or voice our opinions, but as with any partnership, the ability to compromise is essential and we found that we were able to do so during the process.
Research the market you want
It might seem obvious but I found it really valuable to undertake a comprehensive analysis of the moving industry in Victoria and Nanaimo. I looked at the competitive landscape, demographics, large employers, transience rate, home sales and the employment market. One of the best research tactics was to call moving companies operating in our market. It’s amazing how much you can learn by making a couple of phone calls.
Understand the numbers
Owning a business can be rewarding in many ways but at the end of the day, it is an investment and you do want to see a return from it. As the saying goes, numbers don’t lie and so putting together an operational budget and revenue projections allowed me to see my vision for my franchise on paper. Ask your franchisor for guidance on the important numbers such as COGS (cost of goods sold), royalties, revenue of similar sized franchises and advertising spends. This will allow you to get a handle on when you can expect to break even, how much money you will need for the first year, and then how much you will need to carry you through to profitability.
Research your support systems
I was at an advantage when it came to understanding the support systems that my franchisor would be providing me, as a result of my association with the brand in its launch phase and my working relationship with the sister company. I knew the support systems available to me and the amazing results they have yielded so far. This may not be the case for you so you’ll have to conduct your research through different means. Ask your potential franchisor what functions they provide support for and who you will be working with. Then get on LinkedIn and check those people out. If you have connections in common, reach out and ask for their opinion. When you buy a franchise you instantly hire a large supporting staff. Do as much research as you can into their background and ask yourself, would I hire this person? Don’t be afraid to ask for one on one time with the people you’ll be interacting with the most. You’re entering into a major commitment with this support team and you’ll want to make sure that your investment of time will pay off.
There are thousands of franchise opportunities available to you in all kinds of industries but it’s up to you to make sure you’re buying into a franchise system that is a good fit for you. Take your time, ask lots of questions and don’t forget to read every word of your franchise agreement!