Co-Founder of The Franchising Company, Matt Lucas was recently interviewed by Chris Irby in an article for StacheCow. "Is Franchising the Right Fit for You."
We're excited to be able to share important information about finding the perfect franchise with even more aspiring entrepreneurs!
Here's the recap.
StacheCow: What are the most common misconceptions about franchise investing?
Matt highlights the two misconceptions about franchising he encounters the most.
1) People think the investment requires too high of a cash investment. It's far less cash than you think.
2) People think buying a franchise is just "buying a job." It's simply not. It's a way to build wealth with far more opportunity than traditional employment.
StacheCow: What key factors should someone consider when deciding whether franchise investing is right for them?
Matt highlights the importance of your own goals. He says to consider:
1) How much liquid capital am I comfortable investing in this new venture?
2) How much time do I have available to commit to growing the business?
3) Am I able to leave my current job or do I need to find something that I can work on semi passively?
4) Do I want to stay where I am or relocate to a new area?
StacheCow: How does someone determine the right franchise to invest in, especially with so many options available?
Matt talks about the thousands of franchise options to explore and provides advice if you want to start the process alone vs. using a Franchise Consultant.
1) What dollar amount am I comfortable with investing?
2) Do I want to be an active franchise owner or semi-active?
3) Do I want to focus on B2B or B2C customers?
4) Do I want to have a physical Brick & Mortar location or be more Home Based/Mobile?
StacheCow: What personal traits or skills do you think are essential for a successful franchisee?
Matt says the number one trait is grit and determination. (We actually wrote an entire article on the topic of grit and determination for franchisee success!)
StacheCow: What kind of support can franchisees typically expect from franchisors?
Matt discusses that franchisor support can vary greatly between brands. He highlights the importance of validating any support claims.
StacheCow: How can someone assess if they’re financially ready to invest in a franchise? What advice would you give regarding financing options?
Matt covers the typical minimum investment requirements for most any reputable franchise brand. He covers what you need to have in net worth, and what you may need out of pocket to invest. He also discusses way to prepare your financial situation to invest in a franchise.
Most importantly, he covers some of the top financing options. (Spoiler alert)
401(k)/IRA rollover
Unsecured line of credit (not credit card financing)
HELOC (Home Equity Line of Credit)
Portfolio loan
Raise money from family/friends/colleagues
StacheCow: How much autonomy do franchisees usually have, and how can they navigate the balance between following the system and exercising creativity?
Matt advises how to uncover if you'd be better with a brand that provides more or less autonomy as a franchise owner. He highlights the advantages of either option. If you want the most autonomy, newer brands in more of a start-up phase may be best for you. If you want a franchise that's ready to succeed with minimal creative juices from you, look for a tried and true franchise brand.
StacheCow: What are the biggest challenges that new franchisees face, and how can they prepare for them?
Matt addresses the common challenges franchisees face and highlights how to prepare for each. He covers how to handle the learning curve of the business, how to manage cash flow, and what to do about lead generation.
StacheCow: How do economic conditions, such as inflation or a recession, typically impact the franchise industry, and what should investors keep in mind?
We, and Matt love this question. Matt discusses that no matter what the current economic conditions of the market are, if you're in business for the long haul you'll have to work within all the economic conditions. It's important to prepare - and the best franchise brands can weather most any economic environment.
StacheCow: Can you share examples of individuals who thrived or struggled in franchise investing, and what lessons can be learned from their experiences?
Matt talks about the importance of validating the information a franchise system provides before you invest in the franchise.
If you're seriously considering investing in a franchise, you must read the full article - it's full of great advice! Also, when you're ready to start learning more about franchising - we're here. You can contact us up there, over there, and down below. We can't wait to help you start your franchise journey!
