TFranssen

To evaluate a growing trend in the market of franchisors, can anyone list the advantages vs. disadvantages of the franchise persona?

What are the benefits of this growing trend?

Why would you choose to become a franchise owner or develop a franchise or license to market your own model?


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Terri Franssen[ This Message was edited by: TFranssen on 2005-07-23 13:59 ]

RDKJ

Terri,

1. The main reason to franchise would be to eliminate the learning curve of a particular industry. Hopefully, the franchisor would be a seasoned veteran who has previously faced every challenge you will face as a new salon owner.

2. I think the 2nd biggest reason, and in this industry maybe the most troublesome, is the fact that as a franchisee you hope to tap into the franchisor's growth and store count and enjoy greater savings on goods. This is the trouble, I had as much buying power with 5 salons as I do today with 16. This industry is so fragmented that anyone with more than a few stores and good negotiating skills can dictate pricing to most vendors and manufacturers.

3. I have been and still am a franchisee in several other businesses - I can say with complete confidence that a franchisor can not be a good franchisor if they are also out trying to grow their own corporate stores. I think a good franchisor must choose to be a good franchisor and focus on that - unless they have an extremely talented team of individuals working together.

4. I have spent much time speaking with franchise consultants and they all say the same thing - to be a successful franchisor you must have 3 things -- a concept that is easy to duplicate (construct 1000's of miles away), a concept that is easily taught and/or trained, and most importantly a concept that has a long record of profitability. They all agreed that the third (track record of profits) was THE most important. They all would caution anyone from investing in a concept that has no track record of long term profitability or is selling a franchise based on past experience of another company or on their own future projections of profitability.





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[ This Message was edited by: RDKJ on 2005-07-23 17:20 ]

DWhite6872

I think you also have to make sure your franchiser is going to support your market.
I know I would never sell one of our franchises to one salon owner with no plans of opening other salons in the market.
I think one of the many reasons someone buys into a franchise is to realize some of the "marketing advantages" that multiable salon owners enjoy. I would make sure the franchiser has plans for your market...

In our market we have a big franchise "name" that has opened and for two years it is the only one....so what benefit are they receiving outside of the proven system and build out, bed prices ect...now that they are open?
I can bury them as a multiable salon owner because I have all of those things plus a lot more stores, so we can advertise more and take market share....so the point of my story is, franchising can be wonderful but make sure the franchise company plans on building the market...so it make sense even after you open your doors!

Steve Underhill

Better yet, get all of those things from a Tanning Consultant without all of the associated cost. A properly structured tanning salon in the same market with a franchise store will always have a stronger bottom line. Your salon will be just effective as a franchise without giving your profits away in fees.

Sol Sister

... but then, you could just buy yourself and your employees uniforms; that will make you all qualified to address client concerns.

BigLeo

I will say this again. The tanning salon franchises are not the evil doers everybody thinks they are. They really bring a lot of experience and have their formula for success down. A good franchise really takes care of their franchisees. The good ones provide regular and high quality training in all areas of salon administration, operations, marketing and promotions. They also communicate regularly with their franchisees, offer problem fixing on-the-fly, 24/7, 365 days a year. A franchise will fail like any business if they lose touch of their market or do not support their franchisees. Just look at what happened to Sambo's. International House of Pancakes became IHOP. They repositioned themselves in the marketplace. Computerland re-inventged itself into Vanstar Corp. The truly good tanning salon franchises are growing twice as fast as the indoor tanning salon industry, and their franchisees are propering. It is the bad ones that will signup anybody and then leave them out to dry. Tanning salon franchisors will set strong standards for new franchisees. they don't want or need failures. That is the last thing that they want. I've been in franchising so I know a thing or two about this. A good franchisor will often buyout the poorly run or mismanged franchisee. They don't want the problems of having too many failures. I am not going to promote individual tanning franchisors. The best thing you can do for yourself is talk with the franchisees yourself. Find out everything you can about how the franchisor treatsw them, the quality of training, marketing support, etc. The whole enchilada. Visit as many of the franchisees as you can. Visit the franchisor and meet the management team and find out for yourself if they are the kind of people you think you can do business with. enough said. Just my two bits.