I knew it would come, in fact, I was waiting for one of my news feeds to have brought me a story about it a long time ago. An American serial entrepreneur, Jim Piccolo, has not only jumped into the world of franchising (for what seems the first time), but he has also leaped into the ‘new’ fandango world of digital marketing. Digital marketing is a relatively new field which has grown off the back of the rise of social media and all the channels that it opens up for business owners in marketing their businesses online.
Piccolo reportedly expects to invest $45million in starting the BizziBiz Franchise business, with the franchisee paying $18,000 for a franchise with two employees and $25,000 for a franchise with unlimited employees. The franchisee will in essence be selling localised digital marketing – i.e. encompassing social media, search marketing, free and paid media, and blogging.
As ever, I am more than pleased to hear of new and innovative franchise models, but I do still hope that certain rock solution keystones are in place:
The Franchisor can recoop what he has invested in building the model
The franchise model is sustainable long term
The Franchisee can recoop his investment within a relatively GOOD period of time
The franchisee’s profitability is secured (i.e. the model isn’t based on a loose wing and a prayer)…obviously matched with a hardworking, amibitious franchisee!
The Franchisor makes money in the long term success of the franchisee (and not in the upfront fees and/or a wish for a quick exit at a high return)
So, I wish Piccolo the best – its great to see a digital marketing franchise take to the stage – I will be very interested to watch how it progresses and grows over the next year.
More and more the trend nowadays is for a family to come together to make a business work.
Through a survey I did towards the end of 2009 – I’ve found that the growing trend is that people are pushed out of employment and into self-employment for a variety of reasons. Some of these are:
1) Dissatisfaction with the quality of management within their current job
2) No incentive provided in the workplace for any initiative or true involvement in the business (in fact any ideas are squashed before they are even heard), and most of all…
3) No real financial reward (vs the time and effort put into the job) that matches expectation (this includes time in lieu of many hours of overtime above and beyond the call of duty).
So, what does this mean? Well, you will probably be so unhappy that your family around you may well say ‘Hey, why don’t we just do something for ourselves?’. This is why franchising then becomes an attractive idea – because:
There is a lower risk at start-up (especially with established franchise models with proven statistics and performance from current franchisees)
Any money invested upfront is going towards business support, set-up etc – and this has all been worked out for you
Working with people you know and trust (your family) helps to eliminate the worry of employing unreliable staff
Now, of course, we could have a whole discussion on the dangers of going into business with family – but there are more than enough families out there making a go of it than you think!
The top tips for making a family run franchise business work?
Everyone needs to have their own roles very clear from the outset
Someone is elected as the Boss (end of story)
Someone is elected as the Organised One (every business needs one of these) – to whom everyone needs to listen to in order to be efficient and cost effective
Someone is elected as the Finance Person (every business needs one of these – this maybe outside of the business)
Everyone needs to be earning a salary (or at least agree what that WILL be in the future…give a date…if there is a consensus to hold off for the first few months)
A Team meeting needs to happen at least every two weeks to have a talk around the table to clear any issues, or PAT anyone on the back for a job well done
Respect who you are working with and they will respect you – this goes DOUBLE for family run businesses. Mom, Dad, Daughter, Son, Aunty, Uncle….those titles are not relevant during the work day.
Have you had any experiences working in family-run business? Please do let me know about it in the comments box below! I want to hear good and bad stories!
I have just seen a conversation on Linkedin about the subject of being able to negotiate on Franchise Agreements.
I am of the strong opinion that in the UK, these agreements are not up for negotiation because if the model has been put together ethically and profitably for both parties in the first place there should be no need for negotiation. In my humble opinion it would indicate a weak system and/or franchisor if he/she did negotiate the terms – all franchisees should be on the same terms and be subject to the same compliance issues, advantages, etc. (Of course there are some models that have to have an exception to this – especially mixed models.)
Of course the law is different in other countries (and even in states in the USA) and sometimes the option is not even available. What I do like is that if an agreement is altered for one franchisee – it is made public and everyone will know about it. Unless I have misunderstood that point?
There is a little ‘legal’ restructuring mechanism that has become the toast of ‘good strategic advice’ to businesses of late. A relatively mysterious process called ‘Administration’.
I have to admit complete ignorance in the past about the full meaning of the term, as well as what it means in practice. Perhaps you may have too – but seeing that I have come across this ‘term’ at least 7 times in a period of 4 months – I have decided that I really do need to talk about it!
As an advocate of ethical business and ethical franchise modelling, I am in awe that this business strategy is one that many, many business owners have turned to as a way to ‘get out of hot water’. I realise that there are so many challenges today in running and operating a business, much less surviving tougher economic climes, but I am horrified in this new trend. I almost feel as depressed as when I hear about the increasing divorce rate in the world. My question of ‘why get married in the first place’ can be asked too of business owners who have failed to manage their businesses well and how they are being rewarded with this easy way out to clear their decks.
In layman terms: ‘Administration’ is a method whereby if you find your business in a tough place of not being profitable and not being able to pay your creditors (although not quite at the bankruptcy stage) – you can turn to professional ‘business recovery specialists’ who will guide you through a path of taking you neatly out of the hot water…and then ‘protecting you’ from your creditors and employees asking for money from you. And then, as a cherry on top, give you the opportunity to open your doors again the next day – doing the same business, but under a different name. (Can you feel the emotion behind my words here?)
A huge backlash on small business who lose clients and are lumbered with bad debt (i.e. they are the creditors who have been dedicated to providing the products and services to help the business owner do his business)
The employees who have worked hard to help the business owner keep his business going and thriving in the past – don’t get their salaries, get no real notice and get very little in compensation
The business owner actually has to ‘start all over again’ because no-one wants to touch him or his business because of how he let them down
So, I guess my message to the business owner who is considering this path of ‘recovery’ is to use a healthy balance of good business sense and being compassionate to the parties involved. I realise that sometimes business owners have to take drastic measures to save their businesses, but my only wish is that they engage their employees in the move and be more empathetic to the impact it has on them and the creditors too.
I may be naive, but I do think that great business leaders consider every one of their actions before they take them and step forwards in the best way to lead others carefully to the other side of troublesome situations.
I am awfully happy to report that there are some more positive stories coming out now – although I have to find them in round about ways. It seems that some people are really being creative about how they get through this period, and are looking at how they do business, as well as how they spend their money. Of course there are the few key drivers that will move the more entrepreneurial minded people towards franchising, and those are:
– not wanting to return to corporate employment (the view of ‘job security’ as changed)
– create something for themselves, with the umbrella of support that franchising provides
– having received the redundancy pay-outs,, this helps them to invest in the right franchise opportunity
Banks in the UK still not actively supporting business (especially small business)… in lending responsibly to those that have viable business plans and have shown steady and unwaivering growth over the last couple of years. My message on that score is – ‘Banks…you best be careful’. When the tide turns and business owners can afford to choose…they will choose those banks or personal bankers who listened, supported and guided as much as they could. They won’t choose those that handed them a multi-page loan application form with hoops and boxes to leap and tick just to get the £15000 they needed to keep their business going and growing.
Its scary how the economy is grinding to a halt – but I have every faith that with the combined entrepreneurial conscienciousness out there – the kickstart is coming soon!
Click here for a story of someone in the US who used his redundancy payout to get into business for himself with the Mr Handyman franchise.
Do note that getting into business for yourself is not the easy route – its even harder than you think it is, but there are payoffs in the longrun.