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Should You Buy a Franchise?

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I really like the landscaping business, but somehow, no matter how I tried to make a go of it, I didnt succeed, says Joe Coppola of U.S. Lawns, Brevard and Daytona, Florida. But I wanted to be an entrepreneur, and heard about U.S. Lawns. I checked into it and found it fit my mode. Ive been a happy camper ever since. I opened two franchise territories in two years and theres no looking back now.There are many success stories in the landscape business. There are people who got into the business and, after a long learning curve, became quite successful. Some of the biggest names in the business, who took ten to twenty years to build their companies, then became overnight sensations. However, for every successful contractor, there are as many as twenty who never do succeed. There are a number of reasons for this, but what it really boils down to is the fact that you have an individual who has a strong desire to be in business for himself, likes working with plant material, but cant seem to make a go of it alone. What should he do? Where can he go to still be a profitable part of the landscaping industry? This is where franchising can play an important role. Buying a franchise, under the above circumstances, could be the best move that individual can make. It might be the key that opens the door to success. The key to success, in any business, is knowing what you want to do and how youre going to get there, remarked John Eggleston, general manager, Service First Irrigation. We give you a business plan that focuses on the service side of the business. The one common thread all these franchise companies repeat is, Follow the Plan. Franchising is not new to the green industry. It all started back in 1962, when a company called Lawn-A-Mat began franchising lawn care services. They built a group of more than one hundred franchisees. A former Lawn-A-Mat dealer started Lawn Doctor in Matawan, New Jersey; then came Lawn King, and on to the present day. New franchisors have risen to take the place of the old franchise companies that are gone. However, as each company grew, it spawned new entrepreneurs, some of whom are still in business. In fact, at least one company has passed the baton on to the next generation. So, franchising does play an important role in the green industry. It brings in people who might never have gotten into the industry otherwise. If youre lacking an original business concept or the finances to launch your own company, you just might want to consider becoming a franchisee. Franchises offer you the unique opportunity to simply set up shop by using someone elses tried and tested business concept. When you become a franchisee, you obtain the right to sell and perform services under a companys established trademark. Some of your potential clients might already be familiar with the companys name. That could be a major benefit for you. If you choose the right franchise, customers will associate quality, reliability, and customer service with the company name. On the other hand, when starting your own company, each of these favorable company attributes would have to be cultivated from scratch. Take Larry Brown, CLP, of Atlanta, Georgia. Brown bought a U.S. Lawns franchise, as well as a Christmas Dcor franchise, and somewhere along the way, he expanded to add landscape construction to his company. He recently sold his company, along with the two franchises. He claims, I received an offer I couldnt refuse. Brown has a background in business administration. He felt that buying a franchise enabled him to get the technical portion of the business immediately. I felt that I was a good implementer and not a good creator, laughed Brown. So I bought the element of success. When asked what that meant, he explained, I liked the idea of taking a proven program and following it. I knew that if we followed the program, we would be successful. Franchising is not for everyone, remarked Jennifer Lemcke, vice president of operations for Weed Man, Scarborough, Ontario, Canada. In order to ensure the success of our franchisees, we spend a lot of time in the interviewing process. We want to see if theyll fit into our model, and if our franchise is really what theyre looking for. Too many people buy a franchise that isnt a good fit, and that doesnt help anyone. Ken Hutchson, president of U.S. Lawns, commented, One of the things you gain from us is the knowledge concerning how to attract customers. The benefits you receive are the operational efficiencies you gain. We are unique in this industry. We are the only landscape maintenance franchisor in existence today in the commercial market, operating in 27 states with more than 125 offices. When you buy a franchise, youre buying a proven method of operating a business; equally as important, youre buying a track record. Unless youre one of the first franchisees, the company thats doing the franchising has proven that their business model works; otherwise, they wouldnt be successful in marketing it. There will always be some franchises that will be better suited to your needs than others. Companies that are offering franchises in the green industry today seem to spend a lot of time in the interview process with the prospective franchisee. They want the prospective buyer to fully understand what theyre buying. They also stress to them the importance of following the plan to the letter. Successful franchisees agree. Hillenmeyers is a landscape maintenance company that basically cuts lawns, and does about $8 million a year doing so. Hillenmeyers was looking for ways to increase its business by adding lawn care services, such as fertilizing, herbicide and insecticide controls. This seemed like an ideal add-on, so it purchased a Weed Man franchise for Lexington, Kentucky. Weed Man was fantastic, exclaimed Mike Shannon, vice president of operations for Hillenmeyers. The training they offered was sensational. They beat it into your head to just follow the plan. It must have worked, because Hillenmeyers was named Rookie of the Year for Weed Man. We went from $80,000 to $350,000 in our first year, said Shannon. This year well be at $600,000 and our goal for next year is to hit the one-million-dollar mark. Hillenmeyers was so pleased with the results that the company bought another franchise in northern Kentucky, and is looking at other locations for franchising opportunities. With the holidays just around the corner, another possibility to consider is Christmas Dcor, which has blossomed into a powerful franchise. It specializes in providing holiday event decorating services for homes and businesses. After nearly eight years, it has close to 400 franchisees in 48 states and Canada. When youre on your own, you might make a lot of mistakes and lose the customers permanently, explains Blake Smith, CEO of Christmas Dcor. In a franchise, youre provided with the training, so you wont make as many mistakes. Smith thinks a good franchise system should provide comprehensive and continuing training so franchisees can keep up-to-date on the latest and greatest concepts and techniques. He believes a franchise can grow if your franchisee knows how to plan a business and market a company. It takes buying power, training, knowledge, and continued support. Also, I cant stress enough the value of shared information between the dealers themselves, because the most important ongoing value of a franchise system is a non-competitive environment. Everything that you do, and your willingness to contribute to the group is so much higher than in a non-franchise environment, and provides a huge competitive advantage. Unlike other industries, the green industry offers the opportunity to operate more than one franchise and still do it well. Some franchisees buy a lawn care, a lawn maintenance, a holiday lighting and an irrigation franchise. It certainly rounds out the package of services they can offer their clients. For example, now Hillenmeyers Landscape does lawn maintenance, and operates Weed Man, a franchise for the application of lawn chemicals and fertilizers. In addition, Hillenmeyers, owns the franchise for Christmas Dcor. Christmas Dcor helps us keep some of our key people during the slow time of the year, remarked Shannon. It helps pay the overhead and gives us some profit for our bottom line. Follow the road map
Every franchisee we spoke to told us the same thing. We were given a road map; all we had to do was follow it. We bought a proven method to be successful dont try to change it. Still, human nature being what it is, people do try to modify or refine things. Thats where they get into trouble. A little fine tuning here, some tweaking there, and before you know it, its a different business model. Usually youre not as successful as the franchisee playing by the rules. We hired a sales manager and a sales person to help us, said Shannon. Before we knew it, they had modified what we were trained to do. Consequently, we did not hit the profit numbers or the volume numbers we projected. Needless to say, they were gone shortly thereafter, and now were profitable again. If there was ever one statement that everyone keeps repeating, it is, Follow the road map. I cant emphasize that fact enough, said Hutchson. We have a great business plan that has proven successful, we have 120 locations that prove it works, yet some people try to make changes. The old adage, Dont fix it, if it aint broken probably holds truer here. Do the research
Entering into a franchise agreement doesnt have to be a burdensome and problematic undertaking. As a matter of fact, you dont even have to be experienced in the particular industry in question. If you do your research properly, you can make your new business venture a lucrative one. Bill Keeble, a co-founder and managing director of Franchise Insights, a franchise-consulting firm, believes that franchising is one of the most under-utilized forms of business. For someone starting out in franchising, Keeble says, it is imperative for the prospective franchisee to ask detailed questions about the franchisors. If you are not comfortable with how the franchisors handle your difficult questions, why would you expect the dynamic to improve later on? Ask the hard questions, and then listen not just to the answers, but to the way the answers are communicated and the reasons behind them. Keeble says the beauty of franchising is that its a business and not a complex industry. All franchises have one thing in common: They are a service business, and their job is to service franchisees. Keeble also suggests that you bear in mind a few simple points before engaging in franchise talks. First, get the names of the five franchisees closest to where you reside, and schedule appointments with them to learn more about how the business is actually run. Second, obtain the names of the last five franchisees who terminated the franchise agreement and contact them to learn why they exited the arrangement. Third, find out as many details as possible about the experience and background of the franchisors management, as well as how many franchisees the company has. Finally, obtain all of the necessary contact information about the franchisors representative responsible for furnishing you with what you need to run the operation. Franchising is appealing to entrepreneurs who want better odds of success for their hard-learned investment. Franchising provides the valuable resources of training, support, and marketplace identity that go a long way in the process of building a successful new business as long as you Follow the Plan!

December 2003

 
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