Episode 44
Episode 044: Mastering the World of Franchising with Expert Consultant Chris Wilson
In this episode Monique welcomes franchising expert and consultant Chris Wilson. Chris breaks down his journey from the corporate world to the exciting and challenging world of franchisee and operator of two pilates studios in Orlando, Florida.
In addition to being an experienced franchise operator, Chris is also a consultant and coach for individuals looking to take on a franchise in a host of business categories and services including food and beverage, fitness and exercise, retail, and more.
In this wide ranging conversation, Chris breaks down the pros and cons of franchising and offers listeners tips on everything from securing financing for your franchise endeavor to ensuring that the business venture you undertake fits the lifestyle, workload, and realistic financial return you are looking for!
Topics Include:
- Understanding The Basics Of Franchising
- The Pros And Cons Of Franchising A Business
- Financing Options For Franchises
- How Franchising Offers Flexibility
- The Importance Of Seeking Guidance When Franchising
Follow Chris:
LinkedIn: https://www.linkedin.com/in/chrisvwilson
Legacy Franchise Ventures Linkedin: https://www.linkedin.com/company/legacyfv?trk=public_profile_topcard-current-company
Follow Monique:
LinkedIn: https://www.linkedin.com/in/moniquemills/
Website: https://unpolishedmba.com/
Transcript
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::Monique: Coming up on Unpolished MBA.
2
::Chris: It's really interesting to run
a business where you can reach out to a
3
::couple hundred other people across the
country or the world for that matter,
4
::who are running the same exact business.
5
::That's a really unique opportunity
because, just think of the silo, the
6
::fact of being able to call on those
folks and say, how did this work for you?
7
::What can I do?
8
::You're able to avoid a bunch of
pitfalls and hurdles that otherwise
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::you would have been blindfolded to.
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::Monique: This show is sponsored
by TPM Focus the strategy and
11
::execution consulting firm focused
on generating revenue and finding
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::product market fit for new innovations.
13
::Head over to TPMFocus.com to learn more.
14
::Hello, everyone.
15
::Welcome back to The
Unpolished MBA podcast.
16
::Today I have Chris Wilson with me.
17
::Hi, Chris, how are you today?
18
::Chris: Hey, Monique.
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::Thanks so much for having me.
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::I'm great.
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::How are you?
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::Monique: I am well, I'm
going to ask you the same two
23
::questions I asked everyone else.
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::Are you an entrepreneur
or corporate employee?
25
::Chris: I am an entrepreneur.
26
::I used to be a corporate employee,
did both for a little while.
27
::Now I'm on this strictly
entrepreneur side.
28
::Monique: Oh, we got to talk about that.
29
::How about this MBA or no MBA?
30
::Chris: No MBA.
31
::I have what I call an out of school MBA.
32
::Monique: Oh, okay.
33
::Now that's, that's a new one.
34
::Tell me what this out
of school MBA is to you.
35
::So it sounds like it's entrepreneurship?
36
::Chris: I think that when you actually
run a business, you learn some
37
::things that you can't really learn
in school, so not knocking MBAs, but
38
::there's definitely some stuff that
you pick up outside of the classroom.
39
::Monique: I would say pretty much all
of it, unless you're doing an MBA to be
40
::in a corporate consultant environment.
41
::Most of them are not relevant to just
being a small business entrepreneur or
42
::whatever, a tech startup entrepreneur.
43
::Well tell me what your
entrepreneurial journey has been
44
::and what you're working on now.
45
::Chris: Sure.
46
::So my career started in tech and
transitioned into tech sales, got laid
47
::off a couple of times and figured that
I didn't like the way that felt and
48
::wanted to think about entrepreneurship
as a second stream of income.
49
::So I researched franchises and invested in
my first franchise about five years ago.
50
::Since then been laid off twice.
51
::After the third and final time, I
decided no more corporate for me.
52
::I was going to figure out
this entrepreneurial life.
53
::Monique: So wait a minute, you were
franchising and working corporate
54
::at the same time, you said?
55
::Chris: Correct.
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::Monique: For how long?
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::Chris: I did it for about two years.
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::Monique: Wow.
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::How did you manage your time,
were you working like 20 hours
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::a day or, how did that go?
61
::Chris: Yeah, I would wake up
in the morning early, partly
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::because I was kind of scared of
this project that I undertook.
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::So I used that time to get some work
done before I had to be in the office.
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::Then after being in the office,
I'd come home and do some
65
::more work on my new project.
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::So it was not as glamorous as some
of the Instagram posts make it seem,
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::there was actually some work involved.
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::Monique: None of this
entrepreneurship thing is.
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::I say it's a calling, it's
certainly not for everyone.
70
::Do you mind sharing
what that franchise was?
71
::Chris: Sure.
72
::So it was a Club Pilates
which is a boutique fitness
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::studio in the Orlando area.
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::So I built out one of those and it went
really well and ended up investing in
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::another location, so I had two locations.
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::Monique: Wow.
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::That's really smart.
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::I love Pilates, but it is expensive.
79
::That seems like, especially in the Orlando
area, a really smart way to get started.
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::What were some of the things you
really learned from that experience
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::that you didn't know before though?
82
::Chris: Managing a team
and the type of team.
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::Coming from corporate full-time
is normally 40 to 60 hours.
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::I learned quickly that Pilates instructors
don't work those amount of hours.
85
::You have to be creative with where
you were hiring, how you were hiring
86
::and keeping good folks around.
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::I think that's something
that I learned pretty readily.
88
::I also had to run a business
during COVID, obviously, as a lot
89
::of your listeners I'm sure have.
90
::There were some challenges there.
91
::Every day is a new journey and
a new opportunity to learn.
92
::That's the way it ends up,
there's no getting around that.
93
::Monique: You know with COVID, that
was something that pretty much
94
::anyone who had a business where
someone had to touch another person,
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::it was just like, so what do I do?
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::Then the Pilates studio, for example,
the equipment, people's bodies
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::have to lay on them and sanitizing.
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::People just didn't feel
comfortable for a while.
99
::Chris: Sure.
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::Monique: Being new to the industry,
did you have someone who was already
101
::experienced with running a Pilates
studio or someone to help guide you?
102
::Because I would've been completely lost.
103
::Chris: Well, luckily that's one of the
benefits of franchising is that if you
104
::pick a good franchise, they figured out a
lot of those operational duties for you.
105
::They're able to pass on some information
that you can take and do what makes
106
::sense for you and your location.
107
::Then I did have some staff that had worked
in fitness before and together with the
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::guidance of the franchise company, we're
able to sit down and figure it out.
109
::Monique: Interesting.
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::So I mentioned how Pilates
studios are expensive.
111
::I don't know how much it costs
you to open one or to run one.
112
::I can tell you, as far as joining one,
I'm already a member of a gym and they
113
::told me to take Pilates once a week it
will cost me an additional $120 a month.
114
::Mind you already pay
$214 a month membership.
115
::So is that normal pricing
for a Pilates studio?
116
::Chris: It depends on where you are,
the type of Pilates, and the type
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::of program that you're looking for.
118
::We had a pretty unique offering that
was a little bit less than that.
119
::Maybe I can send you a
referral to your area.
120
::Monique: Good.
121
::What made you choose that franchise.
122
::We're going to talk about other things
when it comes to selecting a franchise,
123
::but what made you choose that?
124
::Chris: Yeah, for me, I was looking
for a business that allowed me
125
::to keep my corporate job, because
that was the plan at the time.
126
::There were a limited number of those.
127
::It checked a lot of the boxes.
128
::It was in my investment wheelhouse
it's important to stay inside that
129
::wheelhouse when I make an investment.
130
::Then I think it provided
a nice benefit to society.
131
::I didn't necessarily want to get
into a business where the product or
132
::service that I was offering wasn't
something that I would be proud of.
133
::Health I think is wealth, so
it checked that box nicely.
134
::Then lastly, just from a financial
standpoint, when you looked and
135
::did the research on the investment
and then the return on that
136
::investment, it started to make sense.
137
::My plan was to kindof build a
couple of them and be able to leave
138
::corporate, and so it worked out well.
139
::Monique: Yeah, it sure did.
140
::Did you have to do the research on finding
that opportunity on your own and were
141
::you already experienced in that if so?
142
::Chris: Well, I have a mentor who is
a franchise consultant, so he sits
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::down with folks and figures out
what they're looking for and comes
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::back with essentially a shortlist
that checks all the boxes for them.
145
::Then he helps you walk you through
the process, vetting to make sure the
146
::opportunity is definitely for you.
147
::Finding you financing if you need it and
just putting you in touch with folks.
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::It's actually what I do now.
149
::Monique: Oh, so you are a
franchise consultant right
150
::now, as well as a franchisee.
151
::Chris: Correct.
152
::Monique: Okay.
153
::You you mentioned you had a mentor.
154
::How does one even get started
in the franchise world?
155
::Let's say you want to be a franchisee
and you don't have a cool mentor
156
::like you had, how does one even
get started on the process?
157
::Chris: A lot of it is,
you can do some research.
158
::I would suggest contacting me, a
franchise consultant or someone
159
::that you trust in that area.
160
::There's definitely
research you can do online.
161
::There are franchise shows in most
big cities where you can go and
162
::find out a bunch of information,
most of the entries are free.
163
::Those are great ways to start.
164
::I think a franchise consultant
helps because they have, most times,
165
::experience in the industry and can
really remove some of the emotion
166
::involved in making a decision like this.
167
::They can focus on the things that you
say you're looking for and present those
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::to you in a high, efficient manner.
169
::Monique: So as far as like your
work, for example, as a franchise
170
::consultant, are there specific
industries that you specialize in?
171
::Chris: No.
172
::All of my, I have about 500 different
franchises in my portfolio, we
173
::can go from mold mitigation, to
roof repair, to fitness, to food
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::and beverage, to insurance, to
anything you can really think of.
175
::There are a couple of
industries that are my favorite.
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::I love fitness.
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::I love beauty and wellness.
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::I love senior care and I love education.
179
::Those are just my favorites, but
that doesn't necessarily mean
180
::that I would suggest one of my
clients open up something there.
181
::Monique: Very good.
182
::That's smart.
183
::When choosing a business, some people
try to find things that they're
184
::interested in and all of that.
185
::It sounds like in your case, you
weren't the actual operator, right?
186
::You were the owner, but you didn't have
to work in there seven days a week.
187
::So how much of that plays
a part in the decision?
188
::Chris: Sure.
189
::So I think some of it
depends on the investor.
190
::Some people need to be in a space where
they feel like they have some industry
191
::expertise and that'll help drive them.
192
::Some people like myself say businesses
is business, the numbers are numbers.
193
::If I can figure out the people
portion of it, then the product
194
::or service really doesn't matter.
195
::So it just really depends
on what's driving you.
196
::I always try to find
the motivating factors.
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::What's your why?
198
::Then once we do that, we can decide
on if the business has to be something
199
::that's in your wheelhouse, or if it's
something that you can take a leap of
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::faith with, like I did with Pilates.
201
::Monique: We're going to take a quick time
out and pick back up in just a moment.
202
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landing pages done quickly so that
203
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ideas and see who's interested, and
204
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205
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automate all of that.
206
::You're an innovator and
you're certainly busy.
207
::Perhaps you don't have a CMO or Chief
Marketing Officer right now, or you
208
::have no plans to hire one anytime soon.
209
::You may be doing this type of work
yourself, or have a new career
210
::professional, or even intern helping you.
211
::You need Ontraport, you can build
a landing page or website in
212
::minutes, you can accept payments.
213
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and the list goes on and on.
214
::I have personally been using Ontraport
to build automate and grow my
215
::business for going on seven years now.
216
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haven't used and that I don't believe
217
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218
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test your innovative ideas in
219
::the market faster with this tool.
220
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too many complex tools.
221
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222
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and that's spelled O N T R A P
223
::O R T that's O N T R A P O R T.
224
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225
::Go there to start your
free trial and get started.
226
::You know, some things that
concern people, especially if
227
::they've never been an entrepreneur
before they can be risk adverse.
228
::I wouldn't say entrepreneurs
are necessarily risk takers.
229
::I don't think that's the case.
230
::We make calculated risks, right?
231
::We run numbers.
232
::Sometimes people are concerned, if
I buy into this franchise and let's
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::say I don't want to do it anymore.
234
::How do I escape?
235
::So, as far as listing it for sale, how
would someone get out of that situation?
236
::Chris: Well, I think it's funny that
you use the word escape, but I get it.
237
::Before you can buy a franchise
there's a big document called the
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::franchise disclosure document.
239
::This lists the price of the
franchise, what the investment is,
240
::what your expectations are, what
the franchise company will do,
241
::as opposed to what you will do.
242
::In there is also terms for getting out.
243
::Getting out means you could either
sell the business to another
244
::investor or back to the franchise.
245
::You can transfer it, you can
absolve yourself of stuff.
246
::Obviously there's a bunch of
legal things that go into that.
247
::So at least the document outlines, what
the possibilities are, at the time you'll
248
::have to decide which one is best for you.
249
::Monique: Every franchise
is different though, right?
250
::Chris: Absolutely.
251
::They're all different.
252
::There are some standard rules, like for
example, most franchise agreements are 10
253
::years, which is something that a lot of
people don't know, but that doesn't mean
254
::that you have to stay in it for 10 years.
255
::I'm a great example of that because the
two Pilates studios I owned, I ended up
256
::selling them in December of this year.
257
::So it was 5 years not 10 for me.
258
::Monique: Okay.
259
::All right, that brings some folks hope who
don't like long-term commitments per se.
260
::They know that there's options
before those 10 years are up.
261
::Chris: Correct.
262
::Monique: It's interesting that
I've met several franchisees and
263
::franchise consultants that were
mostly in the restaurant space.
264
::So I know a guy he owned 8 Burger
Kings, and I know a family too
265
::that has a few Subways, but they
actually work in the Subway.
266
::It's hard work and for each location,
they make about maybe $40,000.
267
::It's just, for me, I would
say just go get a job.
268
::I don't know if I could
do that for $40,000.
269
::Is there one that's really
kind of overlooked that
270
::most people don't consider.
271
::It may not be a sexy franchise, but
this is one that maybe folks should
272
::consider that they really don't?
273
::Chris: I think a lot of people, their
entry into franchising is normally
274
::in the food and beverage space.
275
::You know, McDonald's is probably the
world's most recognized brand, right?
276
::There are other business opportunities
that allow you to not necessarily work
277
::in them, which was attractive for me.
278
::We call those semi-absentee, which
means on average, you'll work up
279
::to 20 hours a week on the business.
280
::So it's not full time.
281
::That also means that you
have to hire some staff.
282
::So the investment levels a little
higher, but there are quite a few of
283
::these semi-absentee models that start
to make sense for people who are either
284
::considering staying with their job and
just adding that additional stream of
285
::income, or eventually want to come up with
a plan for leaving corporate altogether.
286
::Monique: Okay.
287
::So tell me some of the things that
people need to think about and
288
::consider when they're trying to decide
whether to invest or buy a franchise.
289
::Chris: So investment level is huge.
290
::I really ask people, what do you
want your day-to-day life to be like?
291
::We all would like to just be sitting
on a beach, sipping a cocktail,
292
::but you have to do something
to bring in some income, right?
293
::So what does that look like for you?
294
::I tell people if you'd like to
pick up your children every day at
295
::three o'clock, there are business
opportunities that will allow you
296
::to do that so let's focus on those.
297
::Ultimately, I asked my clients
to come up with a list of
298
::what I call non-negotiables.
299
::These are things that
just won't work for you.
300
::For example, if it's picking up your
daughter at three, or you never want to
301
::work nights and weekends, because you
did that enough, or being able to take
302
::an extended vacation whenever you feel
like it, come up with that list and let's
303
::find businesses that check those boxes.
304
::Monique: Are there a lot that check
those kinds of restrictive boxes?
305
::Chris: No, not a lot, but
there are some possibilities.
306
::Monique: How did I know
you were going to say that?
307
::I definitely want you to be honest
with the people, but just to know
308
::the real deal, I was green at that
time to the business world, I was
309
::heavily in my engineering career.
310
::So when we met this family that owned
these multiple Subways and they used to
311
::donate napkins and stuff to the private
school my kids went to, we thought, "Hey,
312
::they must be really doing big things."
313
::Then we're like, oh wait,
this is this and this is that.
314
::So I'm always wondering which
ones are the ones that are most
315
::lucrative, even if you have to be
a part of the day-to-day business.
316
::That's a question that comes up
even in my world, cause there's
317
::a lot of entrepreneurship through
acquisition, but I would also say
318
::entrepreneurship through franchising.
319
::Chris: So, let me break it down this way.
320
::I'll use this example because
you started like...Subway, right?
321
::One person could make $40,000 and
the other one could make 2 million.
322
::So we have to look at what's
reasonable and what's possible.
323
::No franchise is going to guarantee
you a certain return on that
324
::investment, because if you don't make
it, then you're going to sue them.
325
::So no, one's going to tell you
what that is, but there are ways to
326
::research these concepts, there are
ways to find out what the average is.
327
::What is the mean, decide if we want
to be above average or below average.
328
::How much work does it take to
go from being a middle performer
329
::to being a top performer?
330
::When you start looking at it from that
perspective, you can look at some of the
331
::numbers and like you said, make a business
decision, a calculated risk if you will.
332
::Monique: When someone is trying
to get involved in this, financing,
333
::getting financing is a big part
of what they'll need to do.
334
::What are the types of financing available
for these types of business ventures?
335
::Chris: So I have quite a few
franchise or financing partners that
336
::only deal with franchise lending.
337
::So these are not traditional
banks that you probably bank
338
::with for your personal finance.
339
::These are people who lend only to people
who are operating in the franchise space.
340
::The reason for that is, with
franchising, again, you can look at that
341
::network and see what people are doing.
342
::You can see who's paying
their bills and who's not.
343
::The bank wants to remove risks, just
like we do, and the bank understands if
344
::they picked a good franchise company,
who's going to support the franchisees,
345
::their chances of the bank getting paid
back their loan increases a little bit.
346
::So certainly some space in there,
some SBA lenders, there's some non
347
::SBA lenders, but there are quite a few
lenders who will take a chance on folks
348
::if they're investing in a franchise.
349
::Monique: Yeah.
350
::Is there any, what I say in
my world seller financing, as
351
::far as like the franchisors?
352
::You know, offering some type of financing?
353
::I always say, if you give people
a way to pay for something
354
::they're more likely to buy.
355
::Chris: Yeah.
356
::There are a few franchises that will
have a lending arm associated with them.
357
::Most of them will outsource it and have
partners that will do it, but they will
358
::absolutely help you get some financing.
359
::Because, if you can get some
financing, you can close a deal
360
::and that's exactly what they want.
361
::You mentioned seller financing for
example, if you're buying a business
362
::that already exists, sometimes the
seller will finance part of the deal for
363
::you, or sometimes even all of the deal.
364
::And so you don't even actually
have to go to a bank or one of
365
::these financial institutions.
366
::Monique: Pretty cool.
367
::Let me ask you, with your Pilates
studios, for example, were those
368
::already existing businesses or did
you have to start them from scratch?
369
::Chris: Started those from
the ground up from scratch.
370
::Monique: So wait, well you had a great
mentor, so see that doesn't count.
371
::It's for the audience out there.
372
::That's why it's important
to know the right people.
373
::I'm sorry.
374
::You can read books all day and get
MBAs and all that, but it does not
375
::equate to the relationships that
really take us to the next level.
376
::You've never opened a Pilates studio
before, so how in the world did you pull
377
::that one off while working full-time?
378
::Chris: A lot of research.
379
::I leaned a lot on the franchise
company and they understand
380
::that this is a new opportunity.
381
::They know that the support that
they have to dish out in the
382
::beginning will be significantly more.
383
::For example, when I went to open my second
location, I had done it before so I called
384
::them a lot less than I did the first time.
385
::Monique: Yeah, but they're
not in town there with you.
386
::They can't run over and meet the guy to
do the electric wiring because you're
387
::at work, you know what I'm saying?
388
::Chris: Right.
389
::Surprisingly, that's not really
where I needed a lot of help,
390
::that was time management.
391
::Eventually I hired some staff that could
take some of that burden off of me.
392
::But I really needed to understand how
to operate and how to run the business.
393
::What's the pricing?
394
::How do I handle a customer acquisition?
395
::Monique: That's my kind of stuff.
396
::Chris: Those are the things that
the franchise was able to help with.
397
::They're able to give me a run
book to say we have, at the time,
398
::130 locations across the country,
here's what works well, do this.
399
::And set up weekly calls and
make sure that you're hitting
400
::targets and things like that.
401
::That was the benefit.
402
::That's why you pay royalties, people,
we don't want to pay royalties,
403
::but if you're getting something
for it, then it becomes beneficial.
404
::Monique: Absolutely.
405
::The royalties is what people
complain about, only with
406
::bad franchise opportunities.
407
::Chris: Great point.
408
::I tell people all the time,
if you pick the right company,
409
::you can't pay them enough.
410
::If you pick the wrong company, any
penny that you pay them is too much.
411
::Monique: You're just paying
them to carry the brand name.
412
::Chris: Exactly.
413
::Monique: Right.
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::Wow.
415
::So you know what, that's a good point
you brought up it's about basically,
416
::what are these royalty fees paying for?
417
::I don't want you to share all that
information right now for the audience.
418
::You all will need to email us at
unpolishedmba.com and I'm going to
419
::have Chris share more about what
those royalties actually go to
420
::and how it can be helpful to you.
421
::It's not just money going out.
422
::So I'm going to tell you, I spend most
of my time in a tech startup world, but
423
::the way you described these franchise
opportunities, I think some of the
424
::tech startup people may reconsider the
route they're going and consider this.
425
::I mean, you've kind of given more
of a roadmap per se, from a large
426
::peer network it sounds like.
427
::Chris: Yeah, absolutely.
428
::It's really interesting to run a
business where you can reach out to a
429
::couple hundred other people across the
country or the world to that matter who
430
::are running the same exact business.
431
::That's a really unique opportunity because
just think of being able to call on those
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::folks and say, how did this work for you?
433
::What can I do?
434
::You're able to avoid a bunch of
pitfalls and hurdles that otherwise
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::you would have been blindfolded to.
436
::Monique: That's one of the other things
too, I want to ask you is what is like one
437
::of the most surprising things that people
don't know about owning a franchise.
438
::We're going to talk about
that in just a moment, because
439
::we're going to wrap up here.
440
::For our audience, they can email us if
they want to hear those answers to those
441
::two questions that we just talked about.
442
::I know that you got something juicy
for us there because people aren't
443
::really that privy to information
about franchising unless you have
444
::someone close to you that's involved.
445
::So it would be very interesting to know
what's the part about it that, most people
446
::are surprised by when they get into it.
447
::Chris, I want to ask
you one last question.
448
::Before we log off here, something is
often overlooked, but is an absolute
449
::must when buying a franchise...
450
::Chris: A lot of times we get caught
up with the product or service.
451
::I want to know what the day to day
operations are going to be, how much work
452
::do I have to do for this to be profitable.
453
::I mean, we love, let's say Chick-fil-A,
people say, I went there for lunch, line
454
::was around the corner, and they got to
me so fast and the food is always great.
455
::That doesn't mean that's the right
business opportunity for you.
456
::Right?
457
::I always want to talk about the
operations and what goes into that.
458
::And that's the stuff that you
really can't tell just by being
459
::a consumer of the product.
460
::Monique: Oh, wow.
461
::That's good.
462
::That's really good.
463
::Chris, I want to thank you for joining
us today on Unpolished MBA and sharing
464
::your knowledge with our audience.
465
::Where can they find you and
reach out to you if they are
466
::interested in learning more?
467
::Chris: My website www.LegacyFV.com
468
::Monique: Legacy Franchise Ventures.
469
::Is that the name of your company?
470
::Chris: It is.
471
::Monique: All right,
well, thank you, Chris.
472
::Thank you for joining us.
473
::It was a pleasure to have you.
474
::Chris: Thank you so much
Monique, the pleasure was mine.
475
::Monique: Thank you for listening
to the Unpolished MBA podcast.
476
::To hear more episodes or to
request to become a guest,
477
::please visit UnpolishedMBA.com
