Thursday, September 30, 2010

To Franchise or NOT to franchise...


That is the QUESTION!

Or is that the question? As an astute observer of the promotional products industry I am very much involved in watching what companies do when it comes to attracting people to their team.

Much time has been spent within our own organization to make sure that we craft a message that is first and foremost an honest message and not misleading while at the same time making sure that it taps into what we feel are our strong points. We definitely have our strengths! On the other side of the coin, we have weaknesses as well, or points that are less strong as I like to say putting on my best spin. I think it is fair to say that every significant distributor in the industry has probably done their own SWOT analysis to determine what they are good at and what needs work.

Our sales force is constantly barraged by recruiting messages from one of these giants and this provides me an opportunity to analyze their messages and what they are saying and promoting. Don't get me wrong as I want to receive these messages to see what folks are saying but I will say that many of my reps do not and it has become very apparent that hitting the unsubscribe button does nothing. Emailing the contact person on the emails will not get you removed. calling that person will not get you removed from the list and sending correspondence to the CEO will not get it done either. I may be opening myself up here as we send out recruiting messages as well but our unsubscribe button actually works. Taking it one step further if I get a call or a note about these messages I will respond to it because it is the correct thing to do and I will personally see that the individual and his or her domain is taken off of any lists that we might have. This is the professional way of handling this!

What does a franchise offer that a large industry distributor does not? This seems to be a loaded question at first glance but maybe not....

A franchise offers -
  • a better profit split usually (this is the main attraction in my opinion)
  • the opportunity to run your own business
OK I am out of ideas! Oh, wait here are a few others that just popped into my head. Franchises offer -
  • a long term contract
  • Non-compete contracts...I think that they are now called early termination fees. This sounds better but the impact is the same
  • lots of additional fees such as late payment fees, insurance, technology, association dues
  • the ability and need for you to hire your own staff and support personnel (there goes that profit split advantage)
  • restricted territories
  • restrictions regarding advertising, logo use, self-promotion, etc.

  • potential lawsuits...If considering a franchise or any distributor to align with we recommend that you ask for a D & B credit report. There is a view that shows pending lawsuits brought by or against an organization. I don't think this is a good thing in either case!
I know that I am biased here however I really struggle to find out why an individual who has decided that they need to make a change opts for a franchise, especially if they are asking for an upfront investment of cash before you have sold dollar one. WOW! (I know that they will sometimes waive these fees for companies that can show solid documentation of sales in this business)

A good distributor partner pays the commissions up front, backs up the order and offers supplier pricing discounts. They also offer a variety of marketing and technology tools. You do not need to be a member of ASI or PPAI as you are covered under the corporate umbrella. You have all the flexibility of owning your own business. You come and go as you please. Work when you want and where you want. You can sleep at night!

All this and more without requiring a business to become a franchisee.

And the list goes on and on and on....

But I must be missing something because I still do not see the franchisee appeal. What is it?

I welcome any enlightenment and conversation on this subject because we want to engage in this discussion with people!

I encourage people to drop me an email TODAY at daver@vernoncompany.com

Or pick up the phone and give me a call at 1-800-743-7545 ext 8256

Think about my points. Are they valid? Am I close minded and missing the big picture?

H-m-m-m-m!