You don’t need a million dollars in the bank to buy into a franchise business. That’s the first thing Boynton Weekes wants you to know. There are 3,500 franchise businesses to buy in the United States, give or take a few, and about 1,000 of those require investment below $100,000.
The second thing to know is even if the investment is $100,000, nobody needs to save all that money on their own. Franchisees are typically expected to pony up around 25 or 30 percent for deals of that size. Bankers, it turns out, are perfectly happy to front the rest when prospective franchisees walk in with a business plan.
Weekes is a Metuchen-based consultant with FranNet, which advises potential franchise buyers on the process (and often harsh realities) of getting into a franchise business. He will present “Exploring Business Ownership” at PSG of Mercer County on Friday, March 17, at 9:45 a.m. at the Princeton Public Library. This is a free event. Visit www.PSGofMercerCounty.org.
Weekes grew up watching his father’s struggles and joys running a cab company. Though Weekes grew up in Camden, he was born in Atlantic City, where his father and uncle operated the first black-owned taxi service in the city. His father’s life as an entrepreneur guided him as he grew up. “I always knew I wanted to be in business for myself,” he says.
He started in the corporate world nevertheless. Weekes earned his bachelor’s in business management from Fairleigh Dickinson and went straight into management at Chubb Insurance in 1997. He spent 13 years at Chubb, most on the underwriting side, but only a few years in corporate America before realizing he wanted something else.
In 2001 he founded Global Franchising Group and served as director of regional operations, franchise sales, and real estate development. The main company in the franchise for Weekes was Fantastic Sams Hair Salons. He worked both places as a step towards his exit strategy from the corporate world.
Weekes helped open 23 units over a decade. He left that franchise in 2013 and looked for a new opportunity. He had been involved with Fantastic Sams through FranNet. The latter’s senior franchise consultant, Jack Armstrong, helped Weekes recognize that what he would be ideal for was helping people understand what they were getting into, proverbial warts and all, with a franchise. Weekes became a FranNet consultant for the northern New Jersey and New York City area in 2015.
What you’re getting into. Franchises scare a lot of people. Most franchises have contracts that put franchise buyers on the hook for longer than it would take a high school graduate to complete medical school. Seven to ten years is the normal length of a franchise contract, and the terms for buying involve an absolute adherence to sticking to the brand message.
Franchisors looking for investors want people who are going to stick rigidly to the rules of that business, Weekes says. “They want customers to know what they’re getting when they walk in.”
Think about it. Are you ever surprised by what a Subway looks like or what one offers? Or a McDonald’s? That’s because solid franchisors spell out extremely specific rules to follow, and they want buyers who will be compliant with those rules.
Then, of course, there are little things like money. Some franchises can be expensive. Some, not so much. But, Weekes says, the first myth about franchising is that everyone thinks only of the major players.
“When most people think of franchises, they think McDonald’s or Dunkin’ Donuts,” he says. “The reality is, food is a small part of the franchise world. There’s so much in the way of home-based franchises that have high rates of return with low investment.”
Service business are common franchise outlets. For example: Mold abatement, residential or commercial cleaning, and damage restoration. Weekes calls these “essential service businesses,” and they are exactly the type of franchise opportunities people don’t realize they can buy and operate.
Large investment or small, Weekes says that one key advantage of buying a franchise is that lenders see a much greater likelihood of getting their money back from franchise owners. The contract between franchiser and franchisee helps weed out serious entrepreneurs from those who may be trying on a business to see what fits. More importantly, Weekes says, banks see an established business with a record of making money.
“Most people who start a business have never run a business before,” he says. “They go to the bank and say, ‘I want to start a manufacturing business.’ The bank asks, ‘What experience do you have running a manufacturing business?’ The person says, ‘None,’ and the bank says, ‘Come see us in five years.’”
With a franchise, there’s a track record that lenders can use to assess risk. Usually, Weekes, says, lenders are considerably friendlier to franchise buyers who have that liquid 25 percent equity to inject into their business.
Looking before leaping. Weekes’ business these days is making sure other people get in business for themselves. That, of course, means making sure people do it right. When clients come in, he says, he talks to them about their wants and interests, and then those people do an online assessment that really makes them answer some serious questions about who they are, what they want, and what their finances look like. After that is a further assessment of measurable strengths and weaknesses and a sober look at what a client could or could not do.
“Seven out of ten people who come into my office don’t buy a business that day,” Weekes says. Yes, many come back, sometimes in six months, sometimes in a few years, but most, he says, go away thinking deeply about what they could be able to do. And that’s Weekes’ aim.
“The process is designed to weed out people who aren’t ready,” he says. “We want to slow people down.”
Those three in ten who do come in and buy a business typically are more certain about what they’re getting into, Weekes says. But even they are often surprised by the business they find themselves buying. So often, he says, people come in thinking they want one thing, but find that their “transferable skills” make them ideal for something else.
Take, for example, someone who has worked in IT at a pharma company for 10 years, Weekes says. Through the weed-out process, it turns out that person excels at sales and HR-style management. So the computer guy suddenly realizes he is ideal for running a staffing company. And that’s actually a pretty common example, as staffing is one of the fastest-growing segments of the franchise universe.
Part-time exit strategy. Remember how Weekes worked for Chubb but was part of a franchise at the same time? He did what is called the “semi-absentee” model of franchising, an option most people don’t know exists. Not all franchises require the owner operator be on site all day every day. Some offer the managerial, part-time option of semi-absentee, a.k.a. “executive model,” franchising, which allows an owner to be around part-time and hire a manager to handle day-to-day operations.
Personal care businesses like hair salons are most common in this realm, Weekes says. These businesses offer nights and weekends off, which is important to know because many people see owning a business as a way out of the corporate world. Semi-absentee franchises allow that kind of flexibility.
But that also has to do with the emotional nature of the person buying a franchise, Weekes says. He, in fact, wanted to have more flexibility because of two very compelling reasons to be home more, and those two reasons are why he opted for the semi-absentee model.
“I missed the first three years of my son’s life and the first year of my daughter’s,” he says. “I didn’t want to miss any more.”
If the first thing Weekes wants people to know is that you don’t already have to be rich enough to not need to go into business in order to buy a franchise, the final thing he wants them to know is, be honest with yourself and know that emotions are not to be dismissed in your decision. Know what’s most important to you, and that includes time off to spend with your kids.