Co-written by Camren Williams, a 2015 Summer Intern at Kegler Brown and Ohio State University student-athlete (football).
Many people think buying into a franchise system is an easy way to own a business; after all, you aren’t starting a business from scratch, you’re just operating some else’s proven system. Unfortunately, finding success as a franchisee can be difficult since there are so many variables that contribute to success or failure. Especially in the case of busy high-net-worth individuals, including professional athletes, starting a new franchise venture can be exceptionally challenging simply because of their lack of time and industry expertise.
While the combination of time constraints, lack of industry expertise, and ever-changing variables can be daunting, there are three critical, foundational steps each prospective franchisee must first take to have a chance at becoming successful.
#1 Never Go It Alone
As with other aspects of professional life, establishing a qualified team is imperative. Many athletes believe that, because the franchised business is already a recognized brand, all they need to do is invest their money in order to launch and the rest will work itself out. In reality, launching a franchise requires a franchisee to play an active role in selecting a location, constructing the space, hiring staff and management, and negotiating an array of vendor services, among other necessary activities. Forging a team of experienced advisors can help protect athletes from getting taken advantage of at every turn.
One great example of this approach is Keyshawn Johnson. More than ten years ago, the former #1 overall pick in the 1996 NFL draft founded his company, First Picks Management, by teaming up with more than a dozen professional athletes as investors. A significant element of the group’s success, however, was partnering with Glenn and Clarence Mah, business executives and award-winning foodservice and hospitality experts, and Ingrid Roberts, a business development and marketing expert. This team has been very successful in the food industry where Johnson has opened numerous Panera Bread restaurants and Cold Stone Creamery ice cream parlors. This team of highly qualified individuals performs research and analysis within the food industry to ensure the overall team is protected and equipped with the proper advice and guidance, which then translates to operational success for each franchised business owned by First Picks Management.
#2 Investigate the Franchise
Prospective franchise owners must investigate not only the brand equity inherent in a franchise opportunity, but also the franchise’s potential for profit and the support the franchise system will provide. Every franchisee’s goal is to expand and capitalize on a pre-existing business system to generate greater profitability than an independent start-up business could likely achieve. Understanding how the franchisor supports the franchisee through training, marketing, leadership development, financial systems, and overall support is a critical component of success. It’s also very important to understand the experience of other franchisees in that franchise system. Are they successful? Do they enjoy being a franchisee? What are the challenges they’ve faced?
#3 Understand + Leverage Brand Equity
Before fully committing to a franchise, athletes must thoroughly understand the extent and reach of its brand equity. While leveraging a franchise with a highly recognizable brand can provide great opportunities for success, awareness only within in a certain geographic region, for example, may not translate to another market. And though it could provide a unique opportunity for a franchisee to introduce the brand to a new market, it might also be a concept that isn’t well received within that area for a variety of reasons. Without the ability to leverage geographical brand relevance, franchisees are essentially in the same position startup entrepreneurs.
Bottom line: franchising can be a much more challenging investment than many people think. Money alone does not lead to success in the franchise world and in order to have a chance at sustained success, franchisees need to build a qualified team, investigate the franchise and determine how best to leverage a brand’s identity.