Is Franchising For You?

What is franchising you may ask? Well, franchising is a form of business by which the owner, or franchiser, of a product, service, or method obtains distribution through affiliated dealers, who are called franchisees. The franchiser provides a licensed privilege to the franchisee to do business through the same name as the original corporation. A major benefit of buying into a franchise is the fact that you are purchasing a system that has already been proven successful, which means less mistakes will be made in the long run. Not only is the franchise successful, it will also already have allotted a reputation, which means that there will already be a demand for the franchisers product. A final benefit of franchising is the benefit or strength in numbers. The franchisee will gain from the economics of scale in buying materials, supplies and services, as well as in negotiating for locations and lease terms, whereas independent entrepreneurs have to negotiate everything on their own, which could be more of a hassle for those just starting out.

The event started off with a brief introduction by Paul Mass, Associate Director for the Center for Entrepreneurship, where he talked about the Center for Entrepreneurship and their mission to build an entrepreneurial ecosystem here at Ohio University as well as help students learn what it takes to be a successful entrepreneur. Mass then introduced Dan Dahlen, Director of the Consumer Research Center, as the MC for the event. Before introducing the panelists, Dahlen talked about his background in franchising and how he had been introduced to this field of business.

Starting off the panelists was John Glazer, Director of TechGROWTH Ohio, who had previously owned Little Professor Book Center. Glazer explained that over his career in franchising he had two successes while running a franchise, a few failures, and also a few successes in helping other startups and non-profit organizations. He then wanted to stress how large the field of franchising actually is by providing the audience with a few facts.

“There are over 3000 franchisers in the United States as well as 868,000 franchise establishments. Franchising actually makes up a total of 9% of our economies GDP”, said Glazer.

Next up to speak was Danny Bates from Stanley Steemer. Bates started off by talking about his past experiences as a franchisee in a family run business. He then began to talk about the success of their franchise, as well as what makes Stanley Steemer different that other franchises.

“The reason we have been able to be so successful is because we invest in people, mostly college graduates”, said Bates. “At the end of the day, people are what make your business work.”

Our third panelist to introduce themselves was Beau Goodrich, current franchisee of the Donatos establishment in Athens, Ohio. Goodrich explained that he grew up in the industry of franchising, as his father was a franchisee of Wendy’s. Being younger than the rest of the panelist, Goodrich was able to relate to students on the hardships of just starting out as a franchisee. He explained that he learned a lot of things the hard way when it came to being a franchisee.

The fourth and final panelist to be introduced was Chad Bortle, Vice President of Operations for SJB Management Inc. Bortle started off by talking about the different hotel chains that SJB Hotels managed, which included; Marriott and Hampton Hotel Companies. He also explained that he had experience in being both a franchisee and a franchiser.

After the introductions, Dahlen proceeded to start off the Q&A part of the event by asking the audience for a few questions that the panelists could possibly answer. The first question asked focused around how the panelists received the capital to start a franchise.

“Our business plan involved taking money we had earned from previous establishments and then using that to fund our future projects. Sometimes our establishments were funded through a partnership between the franchiser and the franchisee, but it was still very difficult to actually get started with a franchise”, said Bortle.

“The problem with starting out is that you are young and have no track record for investors to see. The best way I found to raise small amounts of capital is to lay out a well-made business plan for the investors. This way they will see exactly what you plan to accomplish and can decide if it’s worth it or not to invest in you”, said Bates.

One member of the audience asked the panelists what their greatest challenge as a franchisee was.

“No one takes you seriously when you are young”, said Goodrich. “They will be polite to you but most of the time they won’t actually invest in you unless you have experience.”

John Glazer said, “You’re going to face a lot of different challenges when you start out as a franchisee. Some of them might be from the industry you are in, or some might come from a lack of capital. Therefore, it’s important to stay focused and carefully manage your business so that you can be prepared when challenges arise.”

Overall, the event was a huge success. Students were able to come and ask questions from professionals in the field of franchising, allowing them to take away valuable knowledge that may help them in their futures. Be sure to look out for anymore upcoming events hosted by the Center for Entrepreneurship, as they may be focused around something you find interesting.

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