What piece of advice would you give to someone considering purchasing their first franchise?
Company Added
Company Removed
Apply to Request List

What piece of advice would you give to someone considering purchasing their first franchise?

What piece of advice would you give to someone considering purchasing their first franchise?

“Making it on your own doesn't mean making it by yourself” is one of the guiding mantras of franchising: You are an independent business owner and the franchisor has your back from first contact to opening day and beyond. After all, why reinvent a wheel that's already rolling along, and profitably? The idea of  buying a “business in a box” and “following the system,” which has produced success for thousands before them is appealing. Look at all the franchise brands operating across the U.S. and around the globe! However attractive, though, the franchise model is definitely not for everybody. If you're thinking about investing in a franchise brand or converting your business into a franchised unit, take a few minutes here to benefit from—and take to heart—the encouraging and cautionary advice of those who've been there and done that.

Subscribe here.

DAVID OSTROWE

Company: Founder & CEO, O&M Restaurant Group 

Brands: Personalized Management Associates, O&A Consulting, 180 Business Solutions, Career Lead, Captain D's Seafood, Burger King, Taco Bueno, Taco Bell, Blaze Pizza

Years in franchising: 34 (24 on the franchisee side, 10 on the franchisor side)

Ostrowe is the Incoming Chair of Franchise Update's 2025 Multi-Unit Franchising Conference. In addition to his successful franchise operations and related businesses, he's served as Oklahoma's Secretary of Digital Transformation and Administration, and was Chairman of the Board of Trustees for Oklahoma's Lottery Commission.

When considering purchasing your first franchise, it's crucial to approach the decision with thorough research and caution. Here's my advice.

Read the Franchise Disclosure Document (FDD): Understand what you're committing to. This document is essential in outlining the obligations and expectations from both the franchisor and franchisee.

Run multiple budget pro formas: Assess the financial viability. Can you make money? Ensure you can capitalize the concept and have a clear path for growth, especially if things are not going according to plan.

Evaluate profit distribution: If the landlord, insurance company, and franchisor all make more money than you, reconsider your decision. Your profitability should be a priority.

Engage with other franchisees: Learn from their experiences. Ask them what they didn't know or understand before they started. This insight can be invaluable.

Assess the franchise concept: Not all great ideas make great franchises. Some concepts might be better executed independently. Competition thrives on innovation, so consider whether you could do it better on your own.

Look for proven systems: A strong franchise should offer well-established systems and processes, a robust supply chain, real estate and construction expertise, and effective national marketing strategies. If you're driving the entire brand recognition, why do you need them?

Consider long-term commitment: If you're signing a 10- or 20-year deal, think about what the brand will look like at expiration and what your renewal rights are.

Remember, if a franchisor makes a mistake, they may get fired. If a franchisee makes a mistake, they could lose their house. Always weigh the risks and benefits carefully before making your decision.

KEITH R. MILLER

Company: Principal, Franchisee Advocacy Consulting

Brands: 3 Subways

Years in franchising: 36

Miller, a Subway franchisee in Northern California, is a longtime advocate for franchisee rights. He currently serves as Special Advisor to the Asian American Hotel Owners Association (AAHOA), Director of Public Affairs and Engagement for the American Association of Franchisees and Dealers (AAFD), and Director of Legislative Affairs for the Fair Franchising Initiative.

  • First, understand that maybe 50% of franchises being sold are NOT proven business models, and have high failure rates. Don't let your excitement get in the way of understanding that it may fail and you need to approach this as if it may happen.

  • Understand that with personal guarantees, you are likely putting ALL your assets at risk. If you are older, I'd be very careful with using retirement funds to buy a franchise. If you fail, you have no time to recover.

  • Hire a good franchise attorney to review the FDD and Franchise Agreement. Do not use your local attorney or friend.

  • Don't purchase a franchise because you like the current CEO of the franchise. You have to understand that the CEO is not likely to last through your franchise term. You also have to understand that your franchise is likely to be sold during the term of your franchise agreement.

  • If you decide on a brick-and-mortar franchise, look for ones where you can own the real estate. Use the cash flow of the business to buy that asset, instead of paying rent. In the end, as a wise man once told me, your wealth is in your real estate, not your franchise.

ROB BRANCA

Company: President, Branded Management Group and Branded Realty Group

Brands: Dunkin (200+), RimTyme, Interstate Battery

Years in franchising: 20

Branca is the elected leader in the Dunkin Brand Advisory Council, Chair of Northeast US Region, Member of the IFA Board of Directors, Chair of Inspire Brands' Government Affairs Committee, IFA Franchisee of the Year, and Past Chair of the Multi-Unit Franchising Conference.

Get a job working at one and spend as much time learning operations as it takes to understand how to manage at least a single unit.

DAVID BLACKBURN

Company: CEO, Southern Rock Restaurants

Brands: McAlister's Deli, 155 in 13 states

Years in franchising: 12

David Blackburn was named the 2022 Single-Brand Leadership MVP (Most Valuable Performer) for achieving brand leadership with one brand. He is McAlister's largest franchisee, was GoTo's (formerly Focus Brands') 2023 Developer of the Year, and has signed development deals for 69 more McAlister's.

Make sure your skills and experience are a good fit for the brand and its deliverables. Too often I see the complexities of a brand prove too difficult for the owner/operator.

FRANCHISEE BYTES

What is your best business decision?

Hiring my current chief of operations, Jason Gorman. I have learned a great deal from him about the pizza business and operations. When I was looking for a general manager in 2019, I knew I had to find the right person with the experience to help improve my business. I interviewed several candidates, but Jason stood out because he asked the right questions and was passionate about improving the store's sales. He is irreplaceable and one of the reasons I have been so successful.

—Stephanie Moseley, President, Pisa Pie Enterprises, 6 Marco's Pizza

Investing in the people on my team. This gave me the space to continually move the needle forward in other areas of the business.

—Phillip Scotton, COO, Primo Partners, 23 Ben & Jerry's, 2 Starbucks

Becoming a Papa John's franchisee. It has been a blessing, especially as an immigrant. The Papa John's family is so welcoming and provides tremendous support for their franchisees. I never expected to own more than 12 stores, and I currently operate more than 200.

—Nadeem Saleem Bajwa, CEO, Bajco Group, 207 Papa John's

Partnering with Zach McKinley. Nothing is as valuable as having a great business partner who works as hard as you and approaches business with the same fundamental philosophy. Conversely, few things are as destructive as having the wrong partner.

—Milo Leakehe, Managing Partner, Imbue Capital, 3 Crumbl Cookies, 1 PayMore Stores, 1 Tropical Smoothie Cafe, 1 Rolling Suds, 1 Solve Pest Pros

Diversifying into Taco Bell and Popeyes and focusing on established brands instead of emerging.

—Harsh Ghai, CEO, Ghai Management Services, 140 Burger King, 36 Taco Bell, 28 Popeyes

Moving from Minneapolis to the Brainerd Lakes Area to open our first Subway.

—Bill Mathis, Multi-Unit Franchisee, 3 Subway, 1 Caribou with 4 more in construction

Going into business with my best friend since kindergarten, Mike Ash.

—Bill Aseere, CEO, Space Cowboys Restaurant Group, 17 Donatos Pizza, 3 Guthrie's Chicken, 2 Whit's Frozen Custard

Franchising. It isn't what I thought it was going to be as a young graduate, but it turned out to be better than I could have ever expected. There are endless opportunities and incredible people.

—Alex Carney, Vice President/Franchisee, TR Hospitality Group, 10 Freddy's Frozen Custard & Steakburgers (11 in August), 7 High Plains Brew (7 Brew Drive Thru Coffee)

Published: July 8th, 2024

Share this Feature

Wienerschnitzel
SPONSORED CONTENT
Wienerschnitzel
SPONSORED CONTENT
Wienerschnitzel
SPONSORED CONTENT

Recommended Reading:

Movita Juice Bar
ADVERTISE SPONSORED CONTENT

FRANCHISE TOPICS

Hot Dish Advertising
ADVERTISE SPONSORED CONTENT
Conferences
Caesar's Forum, Las Vegas
MAR 25-28TH, 2025

Blend opportunity with success and join the nation’s #1 health and fitness smoothie brand today!
Cash Required:
$100,000
One of the fastest growing franchises in the U.S., Jimmy John’s has been making fresh, fast, tasty sandwiches since 1983 - and seeking...
Cash Required:
$200,000

Share This Page

Subscribe to our Newsletters