Considering a franchise? Not so fast! Remember to ask yourself these ten important questions before signing any paperwork or investing any money:
- Do you want to run your day care / kennel or follow someone else rules? With a franchise you must operate your facility under the corporate office's rules.
- Do you mind paying a percentage of your monthly income to the corporate office? Most franchises take their percentage from your gross income not net.
- Does the franchise have a nationally recognizable name and good reputation? If not, it won’t help you bring in business which is what you’re paying for. Also, remember to research the company, and see what its current customers are saying about the chain.
- Do you believe in their philosophy on how the day care / kennel should be run? You will have to run your facility exactly how they want or they may pull the franchise from you. That means that someone else is in charge, not you, and you might not always agree with their decisions.
- Do you want input on how your day care will look? When you own a franchise you have to follow all branding guidelines and keep up the image that the corporate office wants to project.
- How large is your budget? Franchises tend to have a much higher setup cost since you have to buy their products and use their format exclusively. This cost increase means a longer time for your return on investment.
- Are you comfortable with the size facility and lease they want you to start off with? Most franchises want you to start with a facility 7,500 plus in square feet so they can maximize the amount of money they make off of your business. This means higher monthly bills and greater liability (especially considering some larger facilities will cover up to 200 dogs at a time), not to mention a much more expensive lease. There’s no point in renting at a price that could have bought the building!
- Do you want to offer other services? Franchise corporations want to keep all of their locations consistent, meaning you will have little, if any say in what other services or items you can sell at your location.
- Has the company been offering franchises very long? Find out how long they have been offering franchises, and make sure they’ve been in business long enough to have name recognition and a customer base worth paying for.
- Will joining a franchise will guarantee your success? Not necessarily! Statistically speaking, more franchises fail than individually-owned businesses, and that’s even after franchisers buying their franchisees out to inflate their track records of success.
The American landscape is dotted with successful franchises - from McDonald's to 7/Eleven to Midas Muffler - franchising has been around for many years. Those most successful have three common traits: a well-known brand-name; a nationwide network of locations; and national advertising support.
The dog care business is one of the fastest growing categories in the US for Pet Services. As you might expect, franchises are starting to sprout in different parts of the country, with initial investments of $30K to $50K or more for a franchise fee, plus monthly fees up to 10% of gross sales. To the best of our knowledge, none have brand-name recognition, a nationwide network of locations or national advertising support.
With our Affiliate Program, you can own your own business, pay no monthly fees, get the startup and ongoing support you need to be successful - all for a fraction of what the franchise fee alone might cost. Find out how to get started - visit our Affiliate Program page now.
For more information on the risks of franchising, we recommend you obtain a back-issue copy of Fortune Small Business magazine's December 2005/January 2006 edition, which includes a cover article on the Risks/Rewards of franchising. Back issues are available by calling Fortune Small Business at 1-800-777-1444.