What does it take to be successful in a franchise?
The goal of a successful franchise is to grow profits by scaling locations on the back of a turnkey business that can be run on its own.
Hosted by Kevin Dieny
NOW AVAILABLE EVERYWHERE YOU LISTEN TO PODCASTS
Links Mentioned in Episode
- Website for Diane Pleuss
- Diane Pleuss Linkedin
- The Educated Franchisee by Rick Bisio (Amazon Book)
- So You Want to Franchise Your Business by Harold Kestenbaum (Amazon)
[00:00:00] Kevin Dieny: Hello, welcome to the Close The Loop podcast. I’m Kevin Dieny your host. And today we’re going to be talking about how to create a successful franchise and to help me really dive into this topic. I’m joined by Diane Pleuss. Diane is a franchise business consultant. She has been since 2004. Diane has matched hundreds of entrepreneurs with their perfect fit franchise opportunity.
[00:00:25] Kevin Dieny: While successfully guiding them to avoid rookie mistakes at no cost to her client. So huge benefits going on there. As a result, they are creating wealth, making an impact in their marketplace, and enjoying the systems already in place, which I think is a key thing, to accelerate their path to success.
[00:00:43] Kevin Dieny: Diane is an avid runner who also enjoys listening to podcasts and taking photographs of flowers in bloom. She’s also a diehard Green Bay Packers fan. So welcome Diane.
[00:00:54] Diane Pleuss: Thank you, Kevin. Very nice to be here. Appreciate it.
[00:00:57] Kevin Dieny: We talked about this a little bit before we even jumped on here, Diane, but could you just give all our listeners a very, good overview of what is a franchise? What does franchising mean? What is it?
[00:01:10] Diane Pleuss: Well, a franchising is really a system that has been developed and a person purchases that, right to be able to replicate that and use that. And, sometimes we think of a franchise and as you might reference a football team, well, we’re not talking about that. And franchising is also certainly much more than fast food and french fries.
[00:01:37] Diane Pleuss: But it’s someone who has taken a business model and they’ve been successful with it. And they’ve replicated it so that someone can invest their money. And say, if I follow the system, I should have some predictable income and have a certain control, that I have. I appreciate that they have developed vendor relationships for buying discounts, that they have developed marketing and advertising strategies and training and all these things that I’m getting as part of that franchise fee.
[00:02:11] Diane Pleuss: But the person is still doing it in their own market and they’re contributing time, effort, and resources.
[00:02:18] Kevin Dieny: That really cements it for me is like what it, what you’re talking about. Cause like, like I mentioned, lots of things can be considered franchises, but for this we’re, we’re kind of talking about like, uh, from the brand side of business, that to me, wants to expand maybe its locations, maybe its footprint. It wants more stores, locations, its services to reach a greater audience.
[00:02:40] Kevin Dieny: But building up a store, developing a new location, creating a new office, whatever, whatever the service, whatever the business is. There’s a lot of costs. A lot of time. It may mean a lot to go into running it yourself. Whereas the franchise model offers the brand, right?
[00:02:56] Kevin Dieny: The franchisor, a unique opportunity. So from the franchisors perspective uh, Diane, why do you think a business should consider expanding with the franchise model?
[00:03:11] Diane Pleuss: Well, imagine that you started a business and you were very successful and you had a great employee that you have promoted that could manage a business. And you said, boy, I could open up another location. And in another city next door, and they could go there and run it. And you do that. They have the same results and you think this is pretty cool.
[00:03:39] Diane Pleuss: And then you have someone else that you know that is looking for additional responsibility and you say, well, let’s open up in another state. And you do, and you give them the same training and guidance. You buy from the same vendors. You do some of the same advertising and marketing, and you get some of the same or better results because each time you keep fine tuning and tweaking a little bit.
[00:04:05] Diane Pleuss: And then you say, Hmm, I wonder if I could franchise this. I wonder if people would want to take their hard work and effort with something that has been tested, not a lot, but, but somewhat tested. And we could replicate this and give people this opportunity to use their skills and talent with something that we’ve developed.
[00:04:30] Diane Pleuss: So in a nutshell, a person could look at expanding, across country. But that would be very expensive. But if there were to do is use a franchise model, the person is also investing their money in combination with things that you’re doing to expand. So it’s really a growth strategy.
[00:04:52] Kevin Dieny: Yeah, that’s how I like to look at it. And you’re the person who’s taking on the, the franchisee taking on a new location, a new store. Taking on to the forefront of that growth, has some accountability, responsibility, but they also get like a little bit more the way I understand it, they get a little bit of the cut.
[00:05:13] Kevin Dieny: Because they are now managing, leading that, that location. That business, that forefront, they reaped the rewards of, they get some, some part of it, right? That’s sort of how it works?
[00:05:26] Diane Pleuss: Well, I would say it’s a lot more, it’s really their business. So they are developing their business. They’re hiring the employees themselves. They’re they’re running the business and yes, they are paying a royalty to the franchisees. For the infrastructure and a variety of things, but their hard work and effort is directly coming back to them.
[00:05:52] Diane Pleuss: So if they are running a stellar business, they should have stellar success. So, one of the key motivators of people, of why people go into a franchise is they want to be their own boss. They want to have that control. They’re tired of a standard raise. They’re tired of someone stealing their ideas.
[00:06:16] Diane Pleuss: They want their hard work and effort to benefit them and their families. Sometimes they get into a franchise because they want to build generational wealth, which is pretty hard to do in a job. There is no equity. So you have an asset that you’re building and growing and at the end you can either sell it or pass it to.
[00:06:40] Kevin Dieny: There’s a lot of benefits then to using this model, right? You’ve mentioned things like the supply chain benefits of discounts with vendors. You’ve mentioned things like the advertising, the branding, a proven system and process that’s worked for the main branch, the headquarters or the company. That is now going to apply to these other locations.
[00:07:00] Kevin Dieny: So as an entrepreneur, let’s say you’re an entrepreneurial. You’re thinking, do I want to start? I look at it like, do I want to start entirely from scratch and forge all my own processes? All my own vendor relations, all my own advertising. I get my brand out. Right. Or do I want to kind of skip some of those steps or skip those things?
[00:07:21] Kevin Dieny: Cause they’re done for me. I’m using someone else’s system, but it’s a system that’s proven to work. So I see a little bit of like that being part of the decision as well. Like what do, should I, or do I want to have more ownership, more equity and here’s some of the pros, right? Some of the benefits of it.
[00:07:39] Diane Pleuss: Yes, sometimes I’ve worked with existing business owners and really two things can happen. I’ve worked with people who’ve had a successful, independent business that they started, that they grew, they were very proud of. And then they’ve come to me for a franchise the next time around. And I asked them why.
[00:08:02] Diane Pleuss: And they say, well, I, I did it, but man, it was a lot of work. I had to create everything. I had to do everything. It was exhausting. And, and I, I did it, but now I would like it to be a little more streamlined and I would like to use my talents more and not have to research who can do my website and who can do my social media.
[00:08:29] Diane Pleuss: And who can come up with contracts for employees, all of those things, I would greatly appreciate it. And I see the benefit of having that all laid out for me. Now, I should mention that franchising isn’t right for everyone. So it’s not right for the person who, is very entrepreneurial and very good at many things.
[00:08:51] Diane Pleuss: They probably want to do everything themselves and they have the skills to do it, and they might feel confined in a franchise. Likewise on that other end of the spectrum, there is some risk and the person that needs that paycheck every two weeks guaranteed. They would be up at night. It would not be a good match for them.
[00:09:13] Diane Pleuss: So if we look at the person who needs that paycheck as a, as a 1 and the person, maybe like that Lady Gaga type as the 10, the people that would be from that 3 to 7 range would probably be very good from a risk assessment. And also when, when I work with business owners, they might be existing business owners and want to keep that business, but they want to diversify.
[00:09:41] Diane Pleuss: They want to layer on another business and it could be a complimentary business. And maybe it’s something that could be managed or run. So they might keep their existing business, but diversify and add on a franchise.
[00:09:55] Kevin Dieny: Wow, so, so there’s really a lot there. I just had to look this up because I was pretty sure that the stats on it were pretty bad. If you start your own business, what’s the rate of failure, right. And I got something about like, you know, 20% of businesses fail in the first year. It approaches half of them fail in the, in the next five years.
[00:10:14] Kevin Dieny: So, a lot of businesses are failing and that’s, that’s because running businesses, managing successful businesses, it’s hard and there’s competition. And until you’ve done it, you’re going to make a lot of mistakes. And so there’s a lot to learn. And so I think it is something really important to consider in this decision.
[00:10:33] Kevin Dieny: As the franchisee. Okay, do I, is can I make those mistakes? And then from the franchisor perspective, it’s like, is my business set up in a good, is the process and stuff for my business something that can be duplicated. In that vein, like, is there anything, a business owner should be thinking, what are some of the necessary steps it would take for my business to be able to, become a business that can franchise itself.
[00:11:02] Kevin Dieny: Are there some wisdom or acts or things tips you’d have for, for someone who’s considering it and maybe things they should look out for?
[00:11:11] Diane Pleuss: Well, we’re somewhat switching the conversation here to taking, how do you take an independent business or a good idea and turn it into a franchise. And first of all, you want to make sure that everything is working well and that there are good margins and you’ve got all your operations and everything fine tuned.
[00:11:29] Diane Pleuss: And because before someone is going to invest money, they want to make sure that everything is there. Also, there are legal requirements, so it would mean chatting with a franchise attorney and understand the costs and things that are involved. People look at it at successful franchises. And they say, man, I wish I was that franchise.
[00:11:50] Diane Pleuss: Or, and yet from the franchisor side, it’s a little different perspective. Sometimes it’s like having kids and you like having kids, but other times they can drive you nuts too. So we need to keep both sides in, in mind.
[00:12:06] Kevin Dieny: Yeah, so a business that may not be, may have done really well in their area may have done really well with their, you know, over an extended period of time with the way that they’ve grown. Some of those things may have to change a little bit, right? When you switch over to the different model. And I know you’ve mentioned, like your business is set up a little differently, you want to make sure your businesses is like, has got its things in order.
[00:12:31] Kevin Dieny: Right? It’s got its operations, its costs, its financials, like what it’s doing, how it’s doing them in order. And so if a business is thinking, okay, maybe I will go that route. Is that a long process for an independent business to make the switch over? Is that something that takes businesses a while or is that done fairly quickly?
[00:12:50] Diane Pleuss: There is certainly is time, effort and dollars that are involved. There is a book that I recommend is written by an attorney. I believe his name is Howard Koestenbaum, and I would certainly recommend that if anyone is looking at franchising, their business, that they pick up a copy of that it was written a while ago, but I think it’s still relevant.
[00:13:12] Kevin Dieny: We’ve covered, here’s what they are. Here’s the benefits of it. It offers the ability for a business to scale, to grow. So, what should the brand or the franchisor be thinking, what kind of training, what kind of benefits should it try to offer the new locations, the franchisees who are expanding it?
[00:13:32] Kevin Dieny: Are there things that they should be like, yeah, it would be helpful, you know, maybe we give them advertising, maybe we give them discounts. Maybe we give them training.
[00:13:39] Kevin Dieny: What kind of resources should it be considering it should set up for that?
[00:13:43] Diane Pleuss: Franchise company will probably offer a whole range of services. Again, they have developed and fine tuned this. So many franchise companies will have an advertising program and marketing strategy, including digital. It used to be that they would say, okay, franchisees, you should do this and you should do this.
[00:14:06] Diane Pleuss: And most of the time now franchise companies do it on their behalf because they have people at home office that can do it more efficiently. And they’re just in tune with things more. When we look at digital advertising, that changes so quickly. So you might be a new franchisee, go to training, comeback, want to get things started and things got already changed because we’re in a very fast moving world.
[00:14:32] Diane Pleuss: So that’s one area that a franchise company, uh, certainly has taken over more and, and franchisees usually say, oh, thank you so much. I greatly appreciate it. You’re doing it much better than I could. And, keep doing it because you’re generating business and increase for me. So that’s what I want. The franchise company is also going to vet vendors and usually they’re going to work with their vendors.
[00:14:59] Diane Pleuss: Getting the best vendors at the best pricing. So you’ve got group buying power there, which can be a huge advantage. If we look at the past pandemic and if we take certain industries there were franchisors that just said we’re going to figure these things out for you. You keep running your business and take care of your employees and your, your customers, your clients.
[00:15:24] Diane Pleuss: So if we look at Senior Care, for example, many of the franchise companies said, we can see that you’re going to need, masks and gloves and you probably don’t know how to source them. You probably don’t know what’s a good price and not a good price. So we will figure that out of home office, we will aggregate, we’ll buy a bunch and we’ll send them out to you.
[00:15:48] Diane Pleuss: So for the first month, that’s what they did so that the franchisees could focus on their customers and their employees and their families. So that’s, that’s another example of streamlining and adding those efficiencies. It’s also not only the franchise. That provides info and insight. You have this whole network of other franchisees that are wonderful resources as well.
[00:16:21] Diane Pleuss: And many times we hear about a idea that started at the franchisee level. For example, with McDonald’s the granddaddy of them all. The person who started the Filet Of Fish sandwich was a franchisee because he was in a heavy heavily Catholic area and his sales were not very good on Fridays. So he came up with that product of boost sales.
[00:16:46] Diane Pleuss: So likewise in a franchise organization, you’ve got the franchisor that is developing things, but you also have franchisees that you can bounce ideas off of. And it’s a wonderful network as well.
[00:17:01] Kevin Dieny: It seems like the structure organizationally, that you should, you could consider a franchise that is successful to have, will be one where it gets feedback. Where feedback moves up and down and sideways. Meaning from the franchisor or the brand down to the locations, the franchisees between franchisees to other franchisees.
[00:17:20] Kevin Dieny: And that way information, ideas, concepts, are more open to helping each other, right. And struggles can be, be handled. And there’s lots of things that businesses may face in one area that a business in another area may not even have to face. So it seems like you want to create a network of good feedback. And it also seems like that’s hard to do.
[00:17:45] Diane Pleuss: Well, when it’s your business and you’re involved and you want it to succeed, you want it to be as successful as possible. And if you see little things that can be fine tuned, and you’re running a good business, you want to share it with the home office. And sometimes they will test market things. But again, everyone wants to find tune, grow, improve.
[00:18:11] Diane Pleuss: It’s it’s not a static organization. It’s very dynamic.
[00:18:15] Kevin Dieny: Another question I’d have to go along with this is, how, how are franchise success measured? How do you measure, its opportunity, its success. Are you looking at it like, wow, there’s thousands of major cities around, like that just represents opportunity.
[00:18:31] Kevin Dieny: Are you looking at it like the margins? I think that there’s a lot of ways to measure success, but I’m, I’m just curious for in the franchise world, how do they look at success?
[00:18:41] Diane Pleuss: If we’re talking from that franchisee, the person that has invested their hard earned money into the franchise, they could look at success in a couple of different ways. They could look at it financially, and certainly we’re used to that and they. Certainly get a certain return on their investment, but most of the time, they also are looking at success.
[00:19:05] Diane Pleuss: As far as control and lifestyle. Are they able to go golfing on Tuesday mornings? Are they able to coach their little league soccer or. Are they able to go to concerts at school or be that parent that goes on field trips or are they able to care for an elderly parent while having a business as well? So success can be measured, a variety of different ways.
[00:19:33] Diane Pleuss: I’ve worked with people and success meant being involved in the community for some it networking with a spouse or partner for some success meant leaving a legacy for their kids. So it’s not one dimensional.
[00:19:50] Kevin Dieny: Yeah, so is this as the franchisee side, is that where you mentioned before is maybe not for everyone, it’s suitable for some types and very suitable for other types but maybe not for everyone kind of thing. And not that everything is for everyone, right? So…..
[00:20:05] Diane Pleuss: Right, well, I think of someone is going to become a business owner. They need to have a certain attitude and an aptitude. They have to be willing to learn. They have to be coachable. They have to have the fire in the belly that says I can do this and I can be successful. I was successful in the corporate world.
[00:20:27] Diane Pleuss: I can be successful in my own business. When I first got into franchising on the franchisor side. I had this perception that anyone who was a franchisee there are like Superman or Superwoman. And that I got to know the franchisees and I realized there are no different than you or me. They just had the confidence in themselves and said, we want to do this, but we want to have the control and we want to build it for ourselves.
[00:20:59] Diane Pleuss: So, if a person has that desire and willingness, they should be able to do that. I might’ve mentioned too, when a person goes through a franchise investigation, they will be talking with the franchise company and they’ll be learning all aspects of that franchise. And once they have the basis, then they will get the green light to talk to franchisees.
[00:21:28] Diane Pleuss: And that’s enormously helpful because you’re talking to the people who were in your shoes and they did it. They invested their money. They went through training, they got started. So you can ask them the hard questions you can ask them, you know, where were you in six months? And where are you in a year?
[00:21:45] Diane Pleuss: And how are you doing now? And all of those types of things. How has the training, how is the support give us the real skinny? So with the franchise, it’s pretty transparent if you will, but take the time and ask the questions to go through it.
[00:22:01] Kevin Dieny: As the franchisor on the other side, what type of franchisees, what type of owners or managers should you gravitate toward and look for. What traits maybe what things should you look for to find for those type of people who are going to find success at every location?
[00:22:17] Diane Pleuss: It’s many of the things that we’ve talked about, having an open mind, a willingness to learn a willingness to represent the brand well of give good customer service, develop a culture. When you’re hiring employees, you’re training them. You’re a launching them. And some people that’s very fulfilling and rewarding, uh, something to give back.
[00:22:42] Diane Pleuss: Uh, to the community. So that involvement it’s, I think a combination of, of attitude and a little bit of, of grit. One of the franchise companies we work with that you have to have some grit, some grit or grit-ology. I think they term it.
[00:23:00] Kevin Dieny: Oh, that’s great. Yeah, and when when it comes to, it sounds like not every franchise is the same either. Like there’s, there might be some dynamics to them that are very different than, than the, you mentioned restaurants being very different than let’s say a different kind of business franchise. So there’s some dynamics that are at play that make some services, some business, some industries that do franchise that make them stand out and that they are different.
[00:23:25] Diane Pleuss: There’s there’s a whole wonderful world of franchising and we tend to limit ourselves when we all, I think of businesses that have a drive-through, so there could be something related to automotive. It could be automotive, aftermarket, tires, transmissions, whatever. It could be tutoring. It could be education staffing.
[00:23:48] Diane Pleuss: It could be hair care, nail care, massage studios, fitness studios, um, mail and parcels centers are some that come to mind that are physical locations, which again, we tend to think of, but there’s another whole side that are service-based businesses and you might sometimes. Logo to cars driving around and they can be providing residential cleaning.
[00:24:15] Diane Pleuss: They could be providing lawn care, pool care, pet care. There are franchises for roofing for installation, irrigation, gutters painting. Um, window coverings, flooring, just a whole range of businesses. And some of those service-based businesses, you can start out of a home office or an office suite. You don’t have to have that major expense or that bright flashing sign.
[00:24:46] Diane Pleuss: Uh, sometimes the hours are much more reasonable Monday through Friday. Nice margins. So a whole nother realm of opportunity exists.
[00:24:58] Kevin Dieny: Yeah, wow. It might be surprising and be like, wow, there are, when you start thinking about it, you might be starting to notice. Oh, wow, look at all these franchises all around me. There’s a ton of them. Something that you said a while ago, I did want to go back on and it was a little while ago. You mentioned royalties.
[00:25:18] Kevin Dieny: So could you explain what that is and how that applies to franchising?
[00:25:22] Diane Pleuss: Sure, a franchise is a for-profit company and they will charge a royalty. And it’s usually a percentage. Occasionally it will be a flat fee and. A few times a company will have the royalty as far as product that you have to buy product from them. And that becomes a royalty. The royalty can vary from, let’s say 5% to not quite 20%, depending upon the industry.
[00:25:53] Diane Pleuss: Again, a good franchise company should take that royalty and invested back in the company so that they are refreshing the websites. They’re doing more SEO. They are doing things to develop and further the franchise that the individual franchisee doesn’t have to worry about. And maybe. With licensing or requirement’s there.
[00:26:21] Diane Pleuss: And it allows a franchisee to focus on what they’re doing. There has to be value for what they are paying for. Sometimes it includes a call center. For example, sometimes the call center is additional. Um, so it varies by franchise, but when you’re doing the investigation, you’re going to be looking at that and saying, you know what?
[00:26:45] Diane Pleuss: If I had to do all of this myself, it would cost me so much more. Nobody likes paying fees, but when the fee is modest and you’re getting a lot for it, then it becomes a good value.
[00:26:59] Kevin Dieny: Yeah, yeah. Our company, works with quite a few franchises. And one of the benefits we’ve seen is they’ll say, look, we want to be able to offer our locations are business owners, franchisees your services, but we’d like to offer them, in a way that they can still choose whether they want it or not.
[00:27:17] Kevin Dieny: They’re not, we’re not necessarily forcing it on them, but we want to give them a choice. You may say, okay, you have the choice of these, vendors to choose from. And some, one of them may suit you better. And another one may suit, you know, another person, business better, you know, like there’s they think about that?
[00:27:34] Kevin Dieny: We still want to have them do well and give them a choice. And so sometimes our, one of our services will be available for a very good price that, you know, if they were just alone business, they probably wouldn’t get. And because it’s like a bulk rate, right. And because it’s like a, through the franchise rate, so sometimes the benefits.
[00:27:55] Kevin Dieny: Are there sort of like being in a member’s club, it’s like, yeah, you’re paying for this. You may not need, you may not need all the services that we have relations with, but if you do, some of them are going to be fairly lucrative.
[00:28:06] Diane Pleuss: Right, and it’s not only price, but it’s also time. How much time would that business owner have to invest to vet companies and find the best price? Again, the example that I gave with the PPE equipment, if I independent were to source gloves and, and open up a box and find that, oh, their children’s gloves, they’re not the extra large gloves.
[00:28:32] Diane Pleuss: Well, what do we do? And, or what happens if it’s a box of rocks, it got taken. So again, we, we laugh about some of those things, but when you’re a business owner, you can probably share, oh yeah, that happened to me. I learned a lesson there. I see value. I understand.
[00:28:54] Kevin Dieny: So you, the other cool thing that you mentioned, which again is still stuck with me was you talked about the exit strategies. So business owners, when they get to that point where they’re like, okay, I’ve made my business, I’m ready to retire. It can be very difficult to sell a business.
[00:29:11] Kevin Dieny: How does it work with franchises is like an extra, and you mentioned like maybe wanting to leave a legacy for their kids, but sometimes they just want to sell what their equity is, sell stuff, get, you know, get what they can out of it and leave.
[00:29:25] Kevin Dieny: So what are some of the different exit strategies and how do they work with franchising?
[00:29:29] Diane Pleuss: Sure, well, one of the benefits with a franchise is that when you look at the revenue of what the business owner generated, usually it’s pretty accurate because they’re paying royalty on that. So it’s not overstated. And I have worked with people that have told me that they’ve searched and looked at businesses to buy, and sometimes they found two sets of box and one time, even three sets of books.
[00:29:57] Diane Pleuss: So certainly one advantage there. You can also talk with the franchise company. Learn what businesses have sold for you can look at that potential. If you’re buying a business and saying, well, they were an autopilot and I’m young and aggressive, I should really be able to take this business and really grow it.
[00:30:19] Diane Pleuss: So yes, I would like to buy it and I see a lot of potential here, but it’s an, it’s an asset. Usually people like me. When I work with someone, I will do a territory checks all. I’ll look. At the zip codes where that person is, or we’ll talk about territory that they would like, and then I’ll ask the franchise company or several that I think would be a good fit.
[00:30:45] Diane Pleuss: I’ll ask them if they have new territory available or if there are any resales so I can present both options. And when you have. You should really have that exit strategy in mind and say, well, I’m buying this business now and I’d liked it to take me to retirement. Or whatever time it is. And so you kind of think, and you plan according to that, and let’s say that you’re planning on having the business for 10 years.
[00:31:15] Diane Pleuss: Well, the year before, then you probably want to contact the people at franchise development and say within this next year, I would like to sell my business. So if you get any inquiries from Diane and please say, yes, my business will be for sale. So that’s certainly one option.
[00:31:34] Kevin Dieny: Wow, okay. That’s really cool. And you mentioned about the locations and territory, so, and that was, that was going to be a question. I just wasn’t sure exactly where it fit in, but not since you’ve mentioned it. So how important is location, territory region area? I know it’s so different for different industries and different franchises.
[00:31:54] Kevin Dieny: I’m sure. It seems like it’s a big part of it, but if I pose that to you, how big of a deal is location, Diane?
[00:32:03] Diane Pleuss: Certainly in fast food and restaurants, location is critical and that’s been drilled into our heads, right. And, and yet, if we look at some of the other industries, It isn’t nearly as critical. So most franchise companies will award an exclusive territory and it could be based on raw population. It could be based on the number of cars, the number of pets, the number of swimming pools, the number of seniors.
[00:32:34] Diane Pleuss: So it can vary from franchise to franchise, but usually you’ll have a protected territory that you will market with. And that is your territory. So sometimes people are the empire builders and they want to buy two or three territories. And other times people say one territory will just serve me. Fine.
[00:32:55] Diane Pleuss: Well, we’ll be perfect. So, um, again, the difference between a location-based franchise and one that does not require brick and mortar.
[00:33:09] Kevin Dieny: Hmm, okay. Yeah, that’s really interesting. And I’m also guessing that every franchise may have, let’s say different rates of return, different market, different profit margins may take, how do I say this? Right. The parts of the business may take more of their efforts. Some of the processes may be built there, but in this industry we’re going to have to hire like 10 people and this one only have to hire 2 people.
[00:33:36] Kevin Dieny: And this one I have to hire like some specialist. Aspects of it that may require more or less either of their time of their expertise, more some something. And so should the franchisors want to make it so that everyone who considers, hmm, should I run this location?
[00:33:53] Diane Pleuss: Well again, if we look at it from the candidates viewpoint the person looking at a franchise. Usually that’s the reason that I have a business is because what you described is pretty overwhelming. You know, do I want a business with a few employees or a lot of employees? So I want to business with white collar employees or blue collar employees who doesn’t have make a difference.
[00:34:18] Diane Pleuss: Do I want a single territory? Do I want multiple territories? What’s the investment level. There are many things to consider. So that’s where I come into play with the matching that I do. And normally with the franchise company, they have developed their product or their service, and it could have multiple streams of income and lay some of those streams of income.
[00:34:45] Diane Pleuss: Some could have different margins and that’s, again, going to all vary by the franchise that the person goes with. So again, another point of discussion, does a person want a business with high traffic and maybe low margins or not a lot of traffic and higher margins. It’s all part of the discussion.
[00:35:08] Kevin Dieny: So not every franchise is going to be high margin. Not every business, not every franchise is going to be low margin. Not all the models are the same, so, right. So when you look when considering it, or looking at this, uh, business, a franchisor might decide that if they want their business to be a certain way, and that may not look like any others.
[00:35:26] Kevin Dieny: So there’s a lot of variability
[00:35:28] Diane Pleuss: there.
[00:35:29] Diane Pleuss: There there is. Yes. Uh, again, there was a myriad of businesses and they all have their own little secret sauce to them.
[00:35:40] Kevin Dieny: So before we close out, is there anything else that I haven’t mentioned that we haven’t asked? Anything else that stands out to you that you think, uh, let’s say a business owner who’s listening to this episode may, may get value from or anything like that, that we haven’t covered yet?
[00:35:59] Diane Pleuss: Well, many times existing business owners want to diversify. They want to make another sound investment and they look at a franchise as a way to do that. And they might look at what we call a manager, run business, where they can keep their existing business, or if they’re an employee, keep their job, but hire a manager to run the business.
[00:36:22] Diane Pleuss: And many times have the manager reviews. They’ll open up one location or unit the first year, a second, the second year, a third, the third year. And then that’s a nice transition strategy. They may say this business has better margins, better revenue is easier to ride, whatever they may want to sell their other business.
[00:36:42] Diane Pleuss: They may want to leave the job. They may want to continue to grow, but it’s another strategy for them. And right now I think people are, are looking at that. I would like to diversify and I’d like to have more control.
[00:36:58] Kevin Dieny: So if someone, if a business wants to, let’s say, get started, learn more, get things rolling. What would be one of the first steps that they would take?
[00:37:08] Diane Pleuss: They are certainly welcome to give me a call. It’s easiest, if they just go to quickchatwithdiane.com and they can schedule a call with me. I try to be a resource. I can certainly recommend books or articles. If someone is interested in franchising, we’ve a process. We take them through and works very well because franchising is process oriented.
[00:37:31] Diane Pleuss: My services are free. We are paid by the franchise companies for the pre-screening, the matching and the education that we provide. So it’s usually a, a, a no brainer.
[00:37:45] Kevin Dieny: So, if someone wants to reach out to you, you’ve mentioned the website. How else could someone connect with you or find out more about anything that you do?
[00:37:53] Diane Pleuss: sure. Thank you for asking. I post regularly on LinkedIn they can go to Diane Pleuss the Franchise Fitter. My last name Pleuss is a little challenging. It’s P as in Peter, L E U S S as in Sam Sam. That’s why I added the Franchise Fitter. So if you can’t get the first or last name, right, you can put in the Franchise Fitter and you should be able to find me or go to quickchatwithdiane.com.
[00:38:25] Kevin Dieny: Thank you so much, Diane. I think this has been incredibly valuable, especially for me. I mean, I’m not so exposed to how franchises work. How will this whole industry is. It’s been eyeopening for me to get a glimpse into wow. There’s a lot going on here. And there’s a lot of benefits. There’s a lot to consider.
[00:38:40] Kevin Dieny: There’s a lot of opportunities for this specific model that I hadn’t considered before. So I really appreciate you coming on and sharing all this with our listeners.
[00:38:49] Diane Pleuss: Thank you very much for having me and I’m always available, uh, to continue the conversation.