No matter what your past background and experience, everyone faces some type of obstacle when first starting a franchise. Knowing what to expect can help you deal with these challenges effectively. Here, meet three women who dealt with hurdles in getting their franchises off the ground — and learn from their success.
Computer Explorers franchisee
Baton Rouge, Louisiana
Obstacle: Starting a business as a single mother
After an unexpected divorce in 2000, Kelly Coreil needed a way to support her boys — ages 2 and 4 — without compromising their care. “I was looking for something that would give me the flexibility to take care of my children because they were very young,” she says. Coreil chose Computer Explorers, a home-based technology education franchise.
What she learned:
- Get help. Even with a home-based opportunity, you can’t watch your kids at the same time you work and expect your franchise to grow. Coreil got lots of help from friends and her mom, who lived nearby. She also hired college kids to babysit and run errands for her so she could focus on her business.
- Know what you’re getting into. Getting her franchise off the ground meant a lot of late nights and early mornings, but Coreil knew she could handle it because success would give her the flexibility and income she wanted for her family: “It was worth the sacrifice of all the hard work and all the crazy hours . . . because I wanted to be there for my kids.”
- Realize your franchise will take some time to get off the ground. Your franchise’s income will likely ramp up slowly, so you need an alternative source of income for the first six months to a year—whether that’s your savings or some other option. When Coreil started her business, she held five part-time jobs, which she slowly phased out over the course of her first year in business. But as long as she was paying the bills, Coreil was happy. Nearly a decade later, she’s number three in systemwide sales for Computer Explorers.
- Make it easy on yourself. Buying a franchise gives you the advantage of a proven system and brand name. But Coreil took that one step further by buying an existing franchise location. Coreil says that although this option may have cost more upfront, she benefited from the previous franchisee’s track record and good reputation. If you do buy an existing franchise, make sure you thoroughly investigate the owner’s reasons for wanting to sell, so you can identify any red flags.
Cherry Hill, New Jersey and Somers Point, New Jersey
Obstacle: Introducing a West Coast concept on the East Coast
LouAnn Evans was the vice president of marketing for a $40 million company, but she’d wanted to start her own business since she was 17. Evans had spent four years searching for a concept with a competitive advantage, but everything looked the same until she came across LA Boxing, a boxing, kickboxing, and mixed martial arts gym that offers a different kind of workout. The West Coast concept confused customers in New Jersey, who were used to standard gyms and boxing facilities, so she had to find a way to turn them on to the idea. Evans succeeded and is gearing up to open her third LA Boxing gym.
What she learned:
- Surround yourself with knowledgeable people. Your franchisor most likely offers some type of marketing assistance, but this can vary depending on the system’s size. Back when Evans first launched her franchise, LA Boxing didn’t offer a lot of marketing assistance, so she had to rely on her own expertise. (Today, the company has a much bigger national presence and marketing program.) Evans also surrounds herself with employees who are knowledgeable in the areas she isn’t.
- Know your customer. To figure out how to market her concept, Evans had get to know her local market herself. For example, most of Evans’ Somers Point members are there to get in shape, while at the Cherry Hill location, they’re there to fight. Knowing how many advertising dollars should go to average Joes and soccer moms and how many to fighters is tough, but knowing what type of customer exists in what area informs her advertising budget.
- Use customer testimonials. Evans had enthusiastic members talk about the results they got at her gym, which drew potential members to the concept.
- Get your message heard. A lot. Evans advertises in local newspapers, on the radio, and on cable TV; uses direct mail and places coupons in Clipper Magazine; and participates in school functions. She says the more people hear about LA Boxing, the more likely they are to come in.
Raleigh, North Carolina
Obstacle: Financing a franchise during the credit crunch
Tami Land spent 26 years at IBM before she left to buy a Dogtopia franchise with fellow IBM alum Janet Wahlmeier. They applied for a bank loan in 2007 and were approved, but when they went back for more money to build out their location the following year, the bank demanded collateral. This was after they’d already signed an agreement with the franchisor. Between the two of them, they put up three houses as collateral. Their franchise opened in October last year, and despite the recession, business has been great.
What they learned:
- Start looking for financing early in the process. “I’m thankful that we started as early as we did and got the preapproval,” says Land. At a time when lots of banks are closing their doors to small-business owners, it’s important to know upfront whether you’ll be able to finance your franchise. It’s also more important than ever to find out what type of financing assistance the franchisor provides.
- Be aware that banks change their minds. Land was frustrated because the bank seemed to change its rules every time they called. For instance, the bank asked for collateral on the loan because market conditions had changed. It’s essential to be flexible and have some backup plans in place in case your first financing option falls through.
- Know how far you’re willing to go. For Land and Wahlmeier, it was either put up their houses or scrap their dream and pay the penalties. Land explains that she and Wahlmeier didn’t have anything else they could offer to meet to the amount of collateral the bank requested. “It was a risk, and it paid off for us,” says Land. “We have no regrets.”
Carrie Brenner is a writer and editor based in Southern California.