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Franchising 101 - Finding Your Right-Fit Franchise Model

Our team at Evergreen Franchise Advisors, LLC helps our clients achieve their dreams of business ownership through franchising. Our professional certified franchise consultants work with prospects every day that are in the market for a career change and who desire business ownership opportunities. We assist our clients in identifying and exploring ideal franchise opportunities that meet each candidate’s professional and personal goals as well as helping them access the capital to own and operate that franchise. We will guide you throughout the entire franchise acquisition process. Not all franchises are created equal. But whether you are a first-time business owner who is passionate about seizing a franchise opportunity or an experienced business owner wanting to diversify, there is a learning curve ahead which your advisor can assist you in navigating. Before you do anything else, you should identify which of the different types of franchise structures will best suit your strengths, skill-set and needs. Start by looking at the different franchise business models and arrangements in the market to help you pick the right one for you:

Owner/Operator: Being an owner/operator is ideal if you are looking for an immediate career change. With this type of model, you are responsible for the day-to-day operations of the business. This is a good choice if you want to maintain total control over your investment and become immersed in the chosen business. Owner/Operators make all operating decisions, resulting in a greater time commitment overall. The drawback of this is there can be long hours and you are tied to that geographic location. For most this means, giving up your current day job and the financial security net that provides. Startup period may result in no personal income being generated. However, staffing costs would be lower compared to other models because you are the one overseeing the operation management. Knowledge of that particular industry’s workings is necessary, as you would be involved in the daily management. Because of the extensive time commitment one unit takes, the number of units you can own is less than other franchise ownership models, limiting your investment’s growth potential. This is a good fit for you if you are detail oriented and like to have control over every aspect of the business and if you are looking for an immediate career change.

Executive: An executive franchise is primarily business to business in nature. Depending on the business model this will mean that your role as a franchisee will see you interacting with senior business decision makers, looking to get them to sign up to your services. The franchisor will equip you with the training and tools to market and sell successfully, after all, it is a proven business system that you are looking to replicate, but in the majority of franchises you are still going to need to sell yourself to a potential client, as well as the business offering. An executive franchise itself can cover many different industry sectors such as consultancy, coaching, financial services, legal services, recruitment, IT and more - but the nature of the business model can vary a lot too. Some are home-based sole-operator franchises; however, you may partner with other franchisees in the system. You may not need to employ staff. Some may require an office space, and staff that you manage. Your Consultant can help you explore different executive franchises to discover the range of opportunities that exist.

Absentee: This business model is suited for you if you are looking solely for an investment opportunity. The time commitment is minimal as you hire out all functions to operate the unit. You would have little to no involvement in the day-to-day operation. No industry knowledge is needed, as you hire out management. This leads to higher staffing and operation costs. Because the business is operated autonomously, you are able to potentially maintain your current job and commitments. This reduces the risk of a startup period where there can be no personal income generated. You also are not tied to a location geographically, giving you more personal freedom. This model allows for larger scalability because the option for multiple locations is greater. However, you are placing the success of your investment in the hands of people who do not have the same level of investment as you do. You may also have to put up more capital upfront to hire the necessary people to run the daily operations.

Semi-Absentee: This model blends aspects of both owner/operator and executive/absentee model. This model is ideal if you are looking for an additional income to diversify your current income and build equity while keeping your day job. The time commitment is low, requiring only around 10-15 hours per week, meaning you can keep your day job and the security that comes with a steady income. You hire managing staff for the day-to-day operations, and you focus on leading the business strategy and managing the managers. This type of franchise is a good fit for those who are good people managers. No industry knowledge is necessary because you hire managers with the necessary knowledge. Owning multiple locations is a possibility, increasing your investment’s scalability. This franchise model combines the control of an owner/operator model with the time commitment of the executive/absentee model.

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