This article was featured in the September 2023 issue of Franchise Dictionary Magazine.
How Much Money Can I Make?
At some point, everyone involved in franchise development is going to be asked this question by a prospect. It is not unreasonable for a prospective franchisee to want to know the answer. This is most likely a life-changing investment for them, especially for someone who is used to the perceived security of a regular paycheck. That said, even if there were no legal impediments to answering the question, the fact is you don’t really know the answer. How much money they will make depends on many variables, the biggest of which, is how well they will do, not only as franchisees, but as a business owners.
The answer is not: “Franchise regulations don’t allow me to answer that…” That would imply you know the answer and if not for FDD and disclosure laws you’d be all too happy to share it. The more honest and accurate answer is you don’t know and no one does. Get the prospect in the right mindset that buying a business is stepping into a world of many unknowns. It’s a good opportunity to educate them on what it means to buy a franchise and that they have the greatest control over the outcome. They are essentially “renting” your business model in their local area to try and duplicate your success and the success of your high-performing franchisees. The more they can emulate the traits and habits of those high performers, the better the chance they will be among them.
You can guarantee you will give them the model, the training, the support and encouragement; beyond that, they need to take ownership of their success or failure. A best practice in franchise sales is to challenge the prospect’s inner entrepreneur. Tell them to talk to other franchisees in the system, so they know what it is like to own their own business. When they win, they will be able to look themselves in the mirror with pride, knowing they took your model and built a solid business in their territory. If they ultimately struggle, and you’ve set the proper expectations, they will hopefully first look to what they can do better and not be clamoring back to you thinking you told them it would be easy.
Franchising makes owing a business infinitely easier, by giving the franchisee a solid model, best practices and an eco-system of similarly situated business owners; however, it doesn’t eliminate all risk of business ownership. If a franchisee is looking for a steady paycheck or a guaranteed ROI, then perhaps business ownership is not for them and, more importantly perhaps, they are not for you. Remember always, the quality of your system is driven by the quality of your franchisees.
To see all of Tom’s featured articles in The Franchise Dictionary Magazine, visit this page.