Could You Get Rich as a Franchise Owner? Answer These Questions and Find Out.
Buying a franchise seems like an attractive way to make money, but it’s not for everyone. 1-800-GOT-JUNK? Founder Brian Scudamore shares who can make it and why.
PHOTO CREDIT: Getty Images
Franchising often gets a bad rap among entrepreneurs. Many assume it's a top-down, cookie-cutter business model that restricts creativity and freedom. To many, entrepreneurship is about going your own way and forging a unique path, so it feels counterintuitive to join a system of turnkey businesses. But franchising does not have to be about conforming your business to be just like everyone else's. In fact, certain companies are inspiring the next generation of business owners to embrace franchising as a happy medium between corporate and the solo worlds.
Brian Scudamore has seen many franchise owners succeed and more than enough fail. He has four home-service companies to his name, and 30 years of success as a franchisor. He is best known as founder and CEO of O2E Brands, the banner company for 1-800-GOT-JUNK?, WOW 1 DAY PAINTING, You Move Me, and Shack Shine.
Scudamore has 8 questions for would-be entrepreneurs to help them decide if franchising is the right path to their preferred future.
1. Can you create a scalable and streamlined system?
Scudamore says, "We believe strongly in the mantra, 'People don't fail, systems do.' This boils down to the idea that most glitches can be solved by refining your processes." In building 1-800-GOT-JUNK?, Scudamore and his people prioritized developing, testing, and perfecting the right systems. When they got it down, they were able to apply the same systems to three more industries -- painting, moving, and house detailing -- because they were simple, understandable, and replicable across a large system.
2. Do you have a crystal-clear vision?
"To inspire a team, I write a Painted Picture," shares Scudamore, "A snapshot of long-term goals, and share it with staff." He uses this as a benchmark to keep everyone aligned and rowing together. Their 2016 Painted Picture promised that if the company doubled revenue goals, they would take everyone (employees, franchise partners, and their families) to Hawaii. "We did it, so we all headed to the islands in March!" he smiles.
3. Can you embrace innovation?
"Just because you're in a franchise system doesn't mean you don't have a say," Scudamore insists. He recommends that franchise owners share great ideas among themselves, and indicates that some of his brands' best ideas have come from that source. He explains: "Out in the field, they often find ways to improve our systems even more, or come up with innovative ideas. For example, one of our 1-800-GOT-JUNK? franchise partners suggested we stay open until midnight to better serve our customers at a time that suits them. We've now adopted this policy system wide." If you don't speak up, you'll never see action (or improvement).
4. Are you willing to put in the effort up front?
Scudamore is firm: "It comes down to a simple truth: if you're looking for instant gratification, you shouldn't start a business." Overnight successes sound romantic, but they don't happen often in the real world, where it takes time to build up flywheel momentum.
5. Can you take care of employees?
"Happy people = happy customers. In other words, if you take care of your employees, your employees will take care of your customers." For Scudamore, finding the right people and treating them well is the number one priority. He learned this the hard way: "In the early days, we didn't have the right people on board. Personalities clashed, our culture became unhealthy, and our business suffered as a result." Now, he takes special care to hire people who are aligned with company values and to treat them the right way.
6. Are you brave enough to let your occasional ignorance show?
"Don't be afraid to be the dumbest person in a room," he advises. "Ask questions and seek knowledge from experts and fellow franchisees who have experience you lack." Scudamore had no idea where to start when he first bought 1-800-GOT-JUNK?. So he took a risk and asked experts, including Fred DeLuca of Subway. By being humble and acknowledging that he couldn't do it alone, he gained invaluable insider knowledge.
7. Can you delegate?
"Every day, our leadership team meets for a morning call ... that is, everyone except me. Our COO Erik has full control because details and execution are not my area of expertise. When it comes to day-to-day operations, I stand back and trust my team to do what they do best, so that I can focus on the vision and goal-setting." You can't be everywhere at once (and it will turn out badly if you try), so focus on what you love and what you're good at. Let go of what you don't like, and give those tasks to someone who will execute them properly.
8. Can you develop other leaders?
Scudamore believes it is best to develop leaders from within. "Our A-Player Development Program is just one of the many ways that we invest in our employees' ongoing development. We could never have become the company we are today without our people. That's why we encourage their personal and professional growth, whether they ultimately stay with the company or not." Make your first hires the best hires, then help these people grow within your organization. This will not only keep them motivated and inspired, it will save money and time by limiting recruiting costs.