When you decide to take the plunge and franchise your business you are presented with many options for who to use to take you through this process. There are all kinds of franchising companies out there that claim they will franchise your business and “do it all” from development to marketing and even sales. While a “do it all” approach may sound enticing, this true story below is a prime example of why, in franchise development, the “do it all” approach that includes sales is a recipe for disaster.
On occasion we receive calls from franchisors. We recently received one of these calls from a very frustrated franchisor who we will call “Charles”. Charles was in the midst of his own horror story that stemmed from using one of these “do it all” franchise companies. Charles had found us online and after reading our President’s warning message when talking with someone how to franchise your business, called us hoping we could help. Unfortunately we were unable to help him. However we want to share his story in an effort to bring about awareness and prevent other people from going down the same path.
A Horror Story of Working with a Company that Does it All
This is a true story (we could not make this up if we wanted). Charles had already finished the process to franchise his business with some “do it all” company who promised to handle his franchise sales. When he signed on with this company it was for a predetermined period of time… so he was “married” to them. Part of his arrangement was that this “do it all” company would market and sell franchises for him. He even agreed that he would give this company a percentage for each franchise sold. At the time he thought it was a no-brainer to work with a company that could “do it all” that includes managing his franchise sales (see our article on, “Do I Really Need Someone to Manage My Franchise Sales?”). He figured paying a percentage for each franchise sold was worth it if this company could bring him franchise sales. It was not long before his franchise horror story started to unfold.
His problems stem from them managing his franchise sales and the marketing services this company was contracted to do for him. At first, he said their efforts brought him a few qualified candidates who eventually became franchisees. However, according to Charles, soon the flow of franchise candidates slowed down and then stopped all together. He went online and was pissed that he could no longer find his franchise on any of the franchise directories he was previously listed on or any other place for that matter.
In fact, Charles discovered that the company he was married to no longer even listed him as a client on their website (whereas previously he was listed). He feels as if they simply gave up on him and moved onto new clients leaving him in the dust. The real kicker is even though they are not performing to his expectations, Charles is still stuck in this agreement and he wanted out.
Charles admitted he is embarrassed to have wasted all this time and money to get nowhere. He feels trapped and that he can’t do anything except wait for his agreement with this company to end OR hire someone to help him out of his predicament. So he went online hoping for an answer and found us.
Conflict of Interest
We told Charles he was forced to seek the assistance of an attorney. Had he found us before signing on with this other company a couple of years ago, he would have avoided all these unnecessary problems and we would have taught him how to be self-sufficient when it comes to franchise sales (learn more about how we teach you to be a franchisor, manage your own franchise sales and more about our franchise qualification program). We do not know if Charles was ever able to escape this company’s agreement but suspect he has a long court battle in front of him.
The truth of the matter is that for a true franchise development company, it is a conflict of interest to develop a franchise program for someone and also market and sell them later. We know about this company (one of many that have cropped up in last few years) that Charles used. They are no more than franchise brokers who have slopped on franchise development as a service because they are not doing well with franchise brokerage and unfortunately Charles’s situation is proof (see our article on “Franchise Brokers vs Franchise Developers: Everything to Know”). It gets worse. These companies use templates (which is not good for many reasons) and often tie in HUGE commissions for themselves when putting together a franchise program. In other words they do what is in their best interest, not the interest of the all-trusting business owner.
Save Yourself the Grief
The Franchise Maker is a true franchise development company. We are a flat fee for service business and we do not market or sell any of our clients’ franchises. This means that you can be sure that we do not have any hidden agendas when working with you. And we NEVER ask for any percentage of your future franchise sales or take any equity in your business (to learn more about this topic see our article, “Setting Up a Franchise Can Be Hard. Beware of Gimmicks!”). We specialize only in franchise development. Call us directly at 1-877-615-5177 and we will be happy to answer any questions you may have about franchising and about our franchise development program.
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