Why is franchising popular?
It has been exploding for years and just won't stop.
Is it the business model? Is it the franchisees finding success?
There are several reasons and we know you need to hear them to understand why it's a great investment for you to consider.
Why is franchising popular?
It has been exploding for years and just won't stop.
Is it the business model? Is it the franchisees finding success?
There are several reasons and we know you need to hear them to understand why it's a great investment for you to consider.
Pete: [00:00:00] Good morning, Nat.
Nat: Good morning, Pete.
Pete: Whoo, I'm pumped up.
Nat: All right. What's going on today?
Pete: I am pumped up because it's holiday season. And I love the holiday season. I love buying gifts.
Nat: I can't tell if you're serious or you're joking.
Pete: Oh, no, no. I love giving gifts. But you know what I do? Is I love recycling.
I learned this from my good friend, recycling gifts. So the fun part of us opening presents is my kids never quite know what they're going to get if it's going to be a legit gift, or it's going to be a recycled gift for that some point. So it's always the talk of after we've opened all the presents.
What crazy things that I've recycled to my kids. But, but I do love the giving season. It is so much fun.
Nat: I feel like it's [00:01:00] You're speechless.
Yeah, I, I, I, I'm usually the guy that when people are like, Oh, did you get your Christmas shopping done? I'm like not yet.
Pete: Alright, so let's talk about the gift that keeps on giving. And that's franchising. Right. So we work with a lot of executives that are looking to invest in a business or invest in a franchise.
Right. And franchising is booming. So I thought we'd talk about some of the reasons why franchising is booming. So let's let's have some fun with this. So why? Why are we seeing? I mean, there's over 4000 franchise companies out there. They're coming in every industry. It's absolutely most amazing. The explosive growth we're in franchising.
So the question is, Why is franchising exploding?
Nat: I think people want to do their own thing, but they want kind of that safety net or like the, if you think about a bicycle, like the training wheels of a, like a proven business model.
Pete: You know, so I think that that's kind of the [00:02:00] marriage there, that of why franchising is going so, growing so fast.
It's a proven business model. Somebody's already figured out the systems, the processes, procedures, and they, they've kind of done that. So certainly it's a, it's a, it's a system, it's a process that makes it easier to become an entrepreneur. Right. And we all wanna become business owners. Okay. What would be a second reason?
I
Nat: think brand recognition is pretty huge. Like, you know, when you go to Jimmy John's and you're, you get that sandwich, you know, freaky fast, and you're like, wow, it'd be really cool to own a Jimmy John's. Or, you know, whatever franchise, fill in the blank. Right. It's, franchising, you know, it's, it's attractive.
You want to be a part of it because it's
Pete: a good experience. And many times it's the brand that it will become, right? Because sometimes when you become a franchisee, the brand is new. And so it has to be build a brand recognition. It's like the first person that invested in McDonald's, right? It wasn't a brand once it built now it's a great brand.
And so sometimes you want to get on the early side of it and bottom line to get [00:03:00] territories you want or locations you want, sometimes you have to be an early adopter where the brand is just starting to build, but you want to be part of that ride when it goes up exactly, all right. We'll be another one.
Nat: Training and support. Like you know, if you're good at kind of following a step by step, I think franchising is a really good option for people. You know, I mean, that's, franchising is all about systems and processes. Going back to McDonald's, like burgers, shakes, and fries,
Pete: right? Yeah. Yeah. And it's just it's you literally follow the system.
You can make the system better, but at a minimum, you follow the system. You know, I know another one is nice is that you got all the training and support, right? So you're not in it by yourself. You got the franchisor training you supporting you to help you be more successful. Totally. Yeah. Well, we'll be another reason why franchising is booming.
I,
Nat: I think once you get your, your first location up and running, you can always scale up so you can open up your second, third location or buy more territory. So essentially economies of [00:04:00] scale, like once you are through, once you're through the learning curve, then you can keep on going.
Pete: It's very repeatable and scalable.
Right. So, and you can kind of plug in people and move up or you can leverage your advertising instead of one location for three locations. Right. So there's certainly some economy of scale. I like about investing in franchises is that it's, it's, it's quick entry into the market, right? You don't have to figure it out.
And I know you've launched businesses from an idea to it, right. And with the, with the franchise, it's just a lot faster play. Because you've got the systems of process procedures and you can get in there and you can move faster to build a business faster.
Nat: Yeah, you can take a lot of the thinking out of it, frankly, it's more of an implementation game at that point.
Pete: Yeah, and I think one of the other reasons why franchising is booming or why more executives are investing in franchises is it mitigates your risk. Right. So from the standpoint is that when you own a business, there's always risk when we have a franchise, it reduces that risk because somebody's [00:05:00] already figured out the business model, the systems, the process of procedures.
And so you just have to follow system. And if you make less mistakes following the system, it saves you capital, right? You have a better chance of success. Totally.
Nat: Yeah, you usually in franchising, you don't have anyone to blame but yourself.
Pete: Yeah, yeah, absolutely. And what else won't be another reason why franchising is booming.
Nat: One of my favorites is you can always there's pretty good access to financing, so you can always lever up so you can build your business with other people's money. So that's always kind of nice.
Pete: Yeah, the financial institutions feel a little bit more comfortable when you have a franchise because they know that you've got that support, right?
I mean, it's Pete's Car Wash or something. Yeah, Pete's, well,
don't, don't make, that's, you, you're knocking down one of my dreams here. I love car washes, right? You know, I spent a lot of time looking to try to buy a car wash. I
Nat: did not know that
Pete: actually. Oh yeah, yeah, when I was looking to lead the corporate world one of the first businesses that I looked at investing in was a car wash.
And car washes are so cool [00:06:00] but they're very, very capital intensive for sure. All right, what would be another reason why franchising is booming? I think just all the data, like, franchising is actually pretty famous for, you know, all their data collection. And, you know, as consumers preferences are changing, franchises are able to adapt, so you don't really have to worry about that.
Nat: On the, on the street level, like you can let corporate kind of worry
Pete: about that. Well, I like, you know, is that when you have a franchise, they're always changing the model, modifying and stuff like that. And you see that where even new franchises are coming in and they're modifying the, the, the, the, the business.
Right. There was just a window washing franchise that, that I saw. Right. And it's a window washing franchise. And one thing about window washing is a lot of times your employees have to get up on ladders. Yeah, so a franchise company decided, Hey, listen, let's allow the employees to stand on the ground and let them wash windows up [00:07:00] to six stories high from the ground.
Wow. Right. That's absolutely that. That's absolutely amazing to me in a way in which it's pretty easy for the window cleaner to do it. Right. So things are changing and franchises can help with that, that change or
Nat: not just Consumers, but even for like attracting employees, right? Like employee preferences kind of factor into that too.
Pete: Absolutely. Okay. What would be another reason why franchising is booming? Globalization, like everybody, like everyone, all the countries, like, you know, fran franchises, you go, you travel around and you're going to see McDonald's everywhere. Yeah, a
lot of them start in the United States or Canada, and they then they move stuff like that.
Yeah, absolutely. And I think it's easier now with globalization to do that to take that business model and translate it to Australia or to Europe or whatever it may be. Okay, what would be another one?
Nat: The other. Big thing for why franchises are [00:08:00] expanding, I think it's just like technology. So franchising has always been known for systems and processes.
And today, you know, with software, you, I mean, you can really be up and running and have a pretty elegant solution, you know, using technology and, and innovating with technology. So the franchisors are able to basically, you know, it's It's becoming more turnkey, I guess is where I'm trying to go with that.
Pete: For the franchisor, or as well as the franchisees, you see a lot of franchise companies now doing the digital marketing for all the franchisees, right? They charge them, but they do it. Or a call center, right? They use technology where they can answer the phone for the franchisees and schedule estimates, schedule jobs.
And so, I think that's just going to get easier, right? And they can take these platforms and use them. And we're seeing more and more of that. Even with, like, hiring. A lot of franchisers now are helping the franchisees hire their employees, or you're seeing a trend now where franchisers are actually doing the back end of [00:09:00] the business for you.
They're doing your QuickBooks, they're doing your payroll, all that kind of stuff. So pretty, pretty cool stuff and all leveraged with technology, which I think is one of the reasons why franchising is booming. So I think
Nat: there's a, I still think there's a car wash in your future, Pete.
Pete: Well, I, I do love my car washes well, speaking of that, you
Nat: go, you go through the car wash and it says, you know because they're using technology, right?
They're saving all this water and everything. So. Again, it's like technology and marketing and, you know, all that is all kind of rolled into Car Wash, which
Pete: is awesome. The one Car Wash I looked at, right, it had a system that recycled the water through a process of four different tanks, and one of the tanks actually had leeches in it and all that kind of stuff.
Literally, the Car Wash used 35 a month in water. That's crazy. Right. Is that not cool? That's a cool car wash. All right. Nat, I got to [00:10:00] get going. I got to go start repurposing some holiday gifts. I got to get wrapping. So thanks for your time. Have an awesome day.
Nat: All right. Happy holidays.