To franchise or branch out


#1

Hello everyone im newer to this forum so excuse me if I I’m posting in the wrong place or not following a certain etiquette. I worked for a local power washing company for about a year and loved the work I did and learned how to power wash from A-Z. After leaving his company and purchasing all nessesary equipment to start my own business he found out I was starting my own and offered me a free franchise oppurtunity paying him 8-10 percent royalty per job. Should I join his flourishing company or take my risk. (His company is very well formed and is constantly being scaled up and always striving for more). He obviously has more experience then me but also don’t want to sell myself short to build another mans dream. Either way I Aim to be successful but don’t want to make a foolish decision. I read on here all day and value your opinions thank you


#2

So, you want to work for yourself for someone else? Am I reading that correctly?


#3

I’m set up to start by myself, and then my old boss texted me asking me if I wanted in. this oppurtunity fell into my Lap last minute. What would you do?


#4

If I were you I would offer to let him buy you out before you start cutting into his market. Take the money and start another unrelated business.


#5

i Honestly don’t think he would give the idea of buying me out the light of day. I have about 7k in equipment and just the knowledge of how to wash. I don’t see how much he could buy me out for?


#6

So, in return for 8-10% of your gross sales, what is he offering to supply or support?


#7

He would be offering full support also because he’s become a friend of mine. Usually there’s a initial 20k fee to starting a franchise but that is waived due to my work history and our relationship. I feel his company right now is as big as I could imagine myself getting if that makes sense, he’s a real hustler and has this intense internal drive to grow this thing.


#8

Ah well there is your answer. Never go into business with friends. Case closed.


#9

Even if we weren’t friendsprior to working with eachother? we never spent time outside the work environment with eachother becoming “friends”. Business related friends I guess you could call it. But if I were to say no the only phone call I would get is maybe him subbing out a job and that’s a big maybe.


#10

Please don’t take this the wrong way but it sounds like you are scared to do this on your own without a safety net. And that’s fine if that is the case. Running a business is not for everyone. It scares the hell out of me, too. But if you can’t will yourself to go it alone until all else fails then you are probably not cut out for this. In that case I would refer back to my original suggestion of selling out to him. Maybe he will buy another truck and just hook your trailer up to it and make you a crew leader or something similar.


#11

Somewhat interesting proposition.
I have years of experience with franchising in the restaurant business, but this feels quite a bit different. The questions that I haveL

  1. How big is the market you both are in?
  2. You referenced $20K franchise fee. How many other franchises are their? All in the same market or spread out over a much larger area?
  3. Do you have protected DMA? Just thinking if multiple operators of the same brand work in the same market who gets what?
  4. How are sales handled? Is everyone on their own to charge whatever rates?
  5. Advertising - who is in charge of that? What % of the 8-10% royalty is designated for marketing? 8-10% btw is a high stand alone royalty rate or at least in comparison to restaurants where it is 4-6% plus an additional fee designated strictly for marketing only. But with restaurants you are getting so much that I could not see happening in powerwashing.
  6. Keep in mind, you are still your own business. Being a franchise is still a lot of hard work. The franchisor is not going to run your business for you.

I can’t say you should or shouldn’t do this, just so many questions that i would be really interested if you shared more. I am curious how a franchise module in power washing would work. Just because Super Power Washers of Houston does very well, I would struggle to see how I could use their name to build a business say in Dallas. Who in Dallas would even know that name? How would it benefit me to be a franchise of them? Do they have some magical purchasing power based on volume that would be worth as much as 10% of my sales? Do they provide free marketing support with materials, purchasing buy-ins, etc as deeply discounted rates?


#12

The market we are In is booming in my opinion people around here just don’t think power washing is ever taken to the level that us guys are used to. Power washing is just gaining popularity in my area and there are only 2 established companies. I would be his first franchise for his company and my area would essentially be my “turf”. The 8-10 percent is from any job I do under his name hense the royalty. I know I can do this on my own and be completely fine (easier said then done). I would be under his umbrella for marketing and he would teach me marketing snow removal scaling up and a bunch of other marketing related things. He owns 3 other companies in addition to the power washing and has a lot more then just regular experience compared to me. Just wanna give you guys as much info as possible.


#13

In all fairness I skimmed this entire post but still felt the need to give an opinion so if it’s been adressed already my apologies. If hes not offering you work, that you recive string free minus that 10 percent, and hes not covering at least some of your expenses, I would tell him no thankyou. Just a snap judgment here but it sounds like hes worried your going to take away business from him and hes trying to hedge his bets.


#14

OI will for sure be getting work. I’m even inclined to think that he would sub work out to me aswell even if I did continue on my own. He has the habit of booking too much commercial and residential which could benefit me greatly. When you guys get subbed work or sub work what are the percentages usually discussed? Should insurance be included in working for him or that’s my responsibility.


#15

I would have an attorney and a business coach look at the franchise agreement and advise you on the specifics. I would ordinarily stay away from a franchise for several reasons. One would be that there is no nationwide pressure washing company that people know and trust (think Stanley Steamer) and two, if it’s a startup, you have no idea if his franchise model will be successful.


#16

The only way I would do what you’re suggesting is if your former boss guaranteed to keep you at least 2/3s time busy. Then it would potentially be worth it. Otherwise just subcontract from him when it makes sense. Give him a discount that makes sense to both of you. :+1:


#17

Thanks for the input all seems like you guys agree that franchise isn’t the right way to go unless he’s dishing out work. I don’t believe even if he did give me work it would be the jobs we normally do which go upwards of 2k for some large residential that’s what I’m thinking. Do you guys like subbed work? Or have a guy that you work with from a different field that helps bid jobs for you?


#18

When i think of franchise i think of brand, that’s what your essentially buying, because if it’s marketing strategies, business operation software, insurance and product recommendations, you can get that anywhere.
Is his brand worth tying yourself to?

If not, then get yourself everything and hustle just like you would under his brand, but instead under yours

You may be worried about getting work but that’s fine, gotta start somewhere

Now if you don’t care about the company name as long as you’re getting jobs, and the brand is spreading across multiple zip codes and you’re part of that success and you enjoy scaling it, then franchising may be for you.
Just make sure you’re getting 10% worth of value out of the deal


#19

You haven’t answered the questions presented.

I would say based on that, you should not be a franchise.

If you are going to be in business, then you need to think about business and the devil is in the details whenever you choose to get into bed with someone else in any form or shape.

I think you are looking for an easy way here. There isn’t one. Be ready to do whatever it takes to make your business successful. If you want to ride the coattails of someone else, then in reality, you are still an employee with your own rig nothing more than a sub-contractor.


#20

Not to sound dorky, but i’m pretty familiar with the ins and outs of franchises (from a legal perspective). For lack of better words, the conditions and limitations that are inherently placed upon the franchisee (i.e. you) are such that you don’t get to make any real business decisions. Sure, you’ll get to make day to day decisions, up to a point, but real business decisions are always made by the franchisor (your old boss). Things like “Assigned Territory” (i.e. where you can work), “required advertising” (i.e. your commitment to pay certain advertising fees), are just a few of the many conditions/limitations you’ll have no say over. For alot of us business owners on here, being told what to do, and how to do it, generally doesn’t mesh well with our personalities.

I’m one of the attorneys who is of the opinion that being a franchisee and being a business owner are mutually exclusive. That is, in my mind, they’re 2 totally different things and can never co exist. People disagree with me, but operating your own business lends itself to making every single decision that touches upon the business - Being a franchisee does not.

I think if you trust you old boss, from a business sense, and truly don’t want to operate your own business then have him draw up a Franchise Agreement for you to review (no harm in that). However, if you have a real passion to own and operate your own business, you wont be happy as a franchisee. Just my 2 cents.