Joel Libava on Looking for the Perfect Franchise Opportunity

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We can all title thriving franchises like McDonald’s and Dunkin’, but would it surprise you to understand these likely aren’t the alternatives potential franchise house owners should really be on the lookout at these times?

In this newest episode of Little Biz in :15, The Franchise King  Joel Libava tells us about the hottest franchise developments and offers suggestions about the finest techniques of assessing franchise chances.

Here’s an edited transcript from the clearly show. You can enjoy the whole job interview previously mentioned or verify out the SoundCloud participant beneath to have a listen.

Franchise vs. Company Prospects: Which Ought to You Pick out?

Shawn Hessinger: Joe, if you are an entrepreneur and you’re looking for a business possibility, why may you pick out a franchise fairly than beginning a organization from scratch, for case in point?

Joel Libava: Most individuals explain to me that they want to get into a franchise mainly because they want to get into a business that is virtually prepared to go.

Nevertheless, most people actually are not a fantastic match for franchising simply because quite a few of them never like guidelines. They do not like the thought of adhering to a 350-page operations guide, remaining not able to promote nearly anything in addition to what you’re supposed to be selling, and so forth. So, there’s not a whole lot of creativity concerned.

Shawn Hessinger: How do you choose basically when you are asking this query about irrespective of whether you must start off a organization or not? We talked about why people may possibly opt for, but how do you determine regardless of whether franchising is the right option for you? What concerns must you check with by yourself right before you even get to the level of saying, I want to obtain a franchise?

Joel Libava: Effectively, the initially one particular is the procedures problem. Are you likely to adhere to the procedures? And you require to seem at your earlier heritage. In your profession, ended up you a rule follower or did you like making the guidelines? And this is a little something that you have to have to be really black and white about. If you’re saying, “Well, I’ll be satisfied to comply with the regulations as extended as I like them,”…eh…not so fantastic.

You also want to devote some time mastering about the franchise organization product itself, what it involves, and the strengths, and shortcomings. And you ought to say to by yourself, “Self, there is some possibility concerned.” Just simply because it is a franchise does not mean it’s possibility-free of charge.

You also need to have to do your internet really worth statement. You want to determine out a finances. You will need to make guaranteed you have ample dollars. I like to see a $450K-$500K internet truly worth, with the means to compose a look at for about $75K of your individual income ahead of you get an SBA bank loan, or no matter what personal loan you want to get. So spending plan, make positive you are likely to adhere to the guidelines. Comprehend that there is possibility involved. It is not possibility-totally free. And ultimately, be ready to function tougher than you ever worked just before. In the starting, at least.

Shawn Hessinger: If you are likely to do this, why not go with franchises and brand names that have a seriously established historical past

Joel Libava: Properly, the to start with purpose would be that no territory is remaining in your region.

There may well be a Dunkin Donuts that’s fifty percent a mile down the highway and an additional just one that is a mile and a 50 percent and the place could be marketed out. So that would be a single explanation why you might want to be open up to additional than heading just for a manufacturer name.

The second reason is that numerous individuals like to be very first. You want to be they want to be floor floor initially in their community community.

Shawn Hessinger: Talking of new franchises, what are some you can factors off the prime of your head…some new franchise options that individuals may not even be aware of? Or even extra broadly, what are perhaps some of the best franchise trends suitable now?

Joel Libava: Very well, here’s a trend in a person phrase: supply. Whichever business enterprise you invest in, whatsoever franchise prospect you come to a decision you will obtain, make confident they provide for the reason that of the pandemic. I suggest, shipping and delivery was now hot due to the fact of Amazon. But now if you really don’t supply the item you sell, you are really considerably shed.

Manufacturer-smart, there are a couple of new possibilities that are very neat. A mate of mine, Greg George, who has introduced quite a few principles, is now concerned in a peach cobbler manufacturing unit. There had been like a hundred franchise agreements signed within just a couple of years. That’s big! It is a dessert franchise, about $100K-$120K total expense.  It started off in the South, but they’re starting off to grow. You know, that is a “hot” franchise.

There is a further a person known as Pure Eco-friendly, which is basically in the healthful, quickly-food stuff consuming period, and they’re setting up to increase a minimal little bit.

The query that I always check with folks when they’re searching at meals, you know, is, “Are you searching at anything that’s going to previous a lengthy time or are you looking at anything that is going to be two a long time in and out?” You don’t want that. So you have to make absolutely sure it’s not a trend. To make certain it is sustainable, there is current market investigate info you can do. You can go on the Compact Biz Trend’s site. There is things on food items that is more healthy, so seem at the tendencies.

What to Search for in a Franchise Prospect

Shawn Hessinger: How do you look at these trends and say that a single franchise may well be a flash in the pan and the many others bought keeping electrical power? What are some recommendations you’d use? 

Joel Libava: Say I was seeking at a franchise possibility that I’m excited about, I imply physically and psychologically fired up about, my initial thing is to choose a deep breath and get the emotion out of it. You concentrate on the company design alone.

A person great supply to gauge the franchise option is to go to the Compact Enterprise Development Middle near you. They have all types of stats and data on tendencies. Request them about the more recent principle you are seeking at. They can locate out things that you cannot due to the fact they’ve been accomplishing it for a long time.

You can also do it on your individual do an on the internet lookup working with your favourite research motor of the sort of notion it is, maybe the food it is, whatever, and tendencies. As basic as that, you are likely to uncover things that you under no circumstances even assumed of. At times franchises get truly hot and they improve as well rapid. So be very careful of that. Be very careful of that since that could be a flash in the pan–or it could be a home operate.

For anyone looking at a young franchise strategy, exactly where there aren’t quite a few franchisees, you want to shell out a handful of days at headquarters to see if you can seriously get the real vision the CEO has about the brand name and its foreseeable future and see if there is a guidance program in position. Issues to check with: Do they have technological know-how? Do they have a technological know-how office? How is their advertising and marketing? Commit a number of times at their headquarters and you could get the solution.

Shawn Hessinger: How do you select the franchises that have the most effective income opportunity?

Joel Libava: Let’s say you are seeking at a meals franchise and you have some food stuff industry history, which is preferable. You know what the margins are in foods and you could determine it out quickly.

Also, the CEO or the founder understands what the margins are. So there are means to come across out what the margins are. You just have to be definitely superior at inquiring concerns.

 

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