When you own a franchise, in many ways you get the best of both worlds. You’re an independent business owner, and you have access to an established business model with a proven track record. It’s a winning combination for many, said Scott Warfel, who owns four Jersey Mike’s stores in the Oklahoma City Metro area. He is a former area director for the sandwich store chain.
Scott opened his first store in 2004, and now has expanded to four stores with 45 employees, thanks in part to three separate loans guaranteed by the U.S. Small Business Administration.
“The SBA loan process was very easy,” said Scott, who works with BancFirst, a SBA preferred lender. “They shepherded me through the entire loan process. It’s been a dream.”
Scott says he enjoys being a franchise owner. “There are times when I’m working 70 to 80 hours a week, and there are times when I have more free time,” he said. “I do what I have to do to stay in business. I’m able to balance being behind the counter with working behind the desk.”
Above all, you should have a true passion for the business you’re purchasing.
“If you can’t find a way to connect to it emotionally and passionately, it’s hard to make it work,” Warfel said. “Particularly since as a franchise owner you’re expected to be involved in day-to-day operations.”
Warfel uses the term “operator,” rather than “entrepreneur,” when describing franchise owners, since they are operating within highly structured parameters.
“You do not have autonomy with a franchise; they tell you everything, down to the slightest little details,” he said. “Some owners get frustrated because they don’t have more autonomy, but again what you get is a proven track record. I think that gives you a slightly better chance of being profitable.”
Financing for a franchise often is easier than for a stand-alone business.
“The franchise fee is only the right to utilize the brand,” Warfel said. “But you also bring a proven business model to the table, which most banks want, and many of the corporations have their own lending sources.”
Another bonus – the company will provide advisory teams who help with real estate purchases, building refinishes, marketing and employee training. If the business is struggling down the road, they can also offer assistance at that point.
It’s not just anyone who can buy a franchise.
“Some companies will sell to anyone who walks in the door and has the money,” Warfel said. “Others screen more carefully to make sure the owner/operator is a good fit before making the sale.”
A franchise also can be revoked at any time. “Selling non-approved products, products that are of inferior quality or different from the established guidelines can cause a franchise to be revoked,” Warfel said. “This is done because they have a responsibility to all the other franchises out there to protect the brand.
“Customers are very sensitive with a franchise; they expect consistency,” he added. “Ideally you should not be able to tell the difference between the same products purchased in any different franchise in the country.”