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This business coaching lesson teaches about the cons of franchising.

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Featured Coaching Excerpt - Notes & Transcript, Part 1
  • Fun Factoid: Star Trek II: The Wrath of Khan - 1982 American science fiction film released by Paramount Pictures. It is the second film based on Star Trek, and is a sequel to Star Trek: The Motion Picture (1979). The plot features Admiral James T. Kirk (William Shatner) and the crew of the starship USS Enterprise facing off against the genetically-engineered tyrant Khan Noonien Singh (Ricardo Montalbán).
  • Franchise Con #1: Loss of Control
  • Notable Quotable: "There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else."
    -Sam Walton
    (American businessman and entrepreneur best known for founding the retailers Walmart and Sam's Club.)
  • Franchise Con #2: When You Sign, It’s Official
  • Title Here: The important point goes here...
  • Notable Quotable: I am the #1 most impactful artist of our generation. I'm Shakespeare in the flesh. Walt Disney! Nike! Google!" - Kanye West
    -Author's Name
  • Notable Quotable: "But they are who we thought they were and we let them off the hook!"
    -Dennis Green
    (Former NFL Head Coach)
  • Notable Quotable: "There is product here. And this is where you end up right here. If you can communicate this product you can make money off of the product." - Kanye West
    -Author's Name
  • Notable Quotable: "I can't believe we drove around all day and there is not a single job in this town. There is nothing, nada, zip." "Yeah! Unless you want to work 40 hours per week!"
    -Dumb and Dumber
  • Notable Quotable: "When you own a business your job is to serve the customers and the customers are the boss."
    -Clay Clark
    (Former U.S. SBA Entrepreneur of the Year)
  • Notable Quotable: "if you have more money than time I highly recommend that you consider buying a franchise."
    -Clay Clark
    (Founder of Thrive15.com)

[MUSIC PLAYING]

-If you haven't seen Star Trek, Star Trek 2 has the Wrath of Khan. And so we're trying to get into the negative reasons why you wouldn't buy a franchise. And I only have two, and I don't even really think those are cons, but I feel like that it would be appropriate for us to go ahead and deep dive into the cons here.

And so I'll go and start in the first con while Marshall's queueing up our music here, because we have an outstanding notable quotable for you. Because I really do-- I think these cons don't even make sense. OK. To have this mindset, in my mind, doesn't even make sense.

But one is loss of control. Basically, you lose control is the mindset a lot of entrepreneurs have. They say, man, if I buy a franchise, I can no longer decide on what my logo looks like. I can no longer decide on my business cards. I can no longer decide where I'm located. I can no longer decide how my menu looks.

I can no longer decide about a lot of things about my business. And therefore because I've lost control, I don't want to own a franchise. But to me, owning a business is just a vehicle to get from point A to point B. So if you can get from point A to point B faster as a result of starting your own business then do it. But if you can get there faster from buying a franchise, then do that too.

But I wouldn't worry about loss of control because-- I own my own businesses. I own many of them, but I don't really have control. Who has control? The customer has control. The customer's the boss.

And the customer, you know, to quote Sam Walton, "The customer can fire anybody from the top on down." So if I want to get crazy and produce products and services of the customers don't want, they're not going to pay us.

So, I mean, the customer is always the boss. I really don't get into that whole control thing. Once you have the money in your bank account you can kind of control what you spend it on. That's where, in my mind, the control is.

Now, the second one is when you sign, it's official. When you buy a franchise-- that's the second con-- when you buy a franchise, when you sign on the line and you buy that actual franchise, you're on the line. You can't get off the hook there. I mean you are on the line with-- you know, you can't get out of it.

I mean, you-- you've bought it. You have a small business loan, in most cases. You've agreed. You've put your name on the line. You're saying, I'm going pay back this loan.

And that's a lot different. A lot of people want to start a business-- I see a lot of people in the real estate industry, a lot of people in the insurance industry, who are kind of going, you know I'll get a license and I'll see if it works. And that's so different than when you start a franchise. When you buy a franchise, you're putting up some money. And so, you're pretty much all in, you're committed. Do you have-- do you have that notable quotable?

-I think I got it. I think I got it.

-I'm so excited.

-I think-- I think this is what you're talking about here.

-Yeah. Here we go. Are you ready? I'm ready.

-Oh man.

-Oh well. I tell you what. I tell you what I'm going to do. I'm going to write this in my Wookie journal, and I'm gonna move on. Nice. Here we go.

-Hold on, hold on, hold on. OK. Here we go.

-We have to make sure that we get this. We have to make sure. This is so good. It's so good This is-- aw man, this is so good. Here we go.

[MUSIC PLAYING]

-I am the number one most impactful artist of our generation. I am Shakespeare in the flesh. Walt Disney. Nike. Google.

-But they aren't who we thought they were. And we let them off the hook.

-There's product here, and this is where you end up, right here. If you can communicate this product, you can make money off the product.

-I can't believe we drove around all day and there's not a single job in this town. There's nothing, nada, zip.

-Yeah. Unless you want to work 40 hours a week.

-That is the kind of notable quotable that I feel sums up these cons, in my mind. It's that, there's people who just-- they don't-- you know, if you don't want-- if you're worried about losing control, you really shouldn't even own a business to begin with, because when you've owned a business, you're not in control of the business. You're-- you are subservient. Your job is to serve the customers. The customers are the boss.

And then when you sign on the line, it's official. And if you're worried about, oh my gosh what if it doesn't work? If you've done your research and it's an FDA-- if it's a business that's SBA compliant, if they have a-- if they have a FDD-- a franchise disclosure document-- if they sold 100's of franchises, and you're worried about if it doesn't work out, what you're worried about is you're worried about you. You're worried about, like, I don't have the self discipline needed to succeed, which is why I think you need a franchise.

Because they have a coach and they have accountability and they have systems. I mean, if you-- you almost can't screw up a Chick-fil-A when you buy one, because corporate micromanages you. They hold you accountable to their systems and standards. If you don't, you won't own a franchise too long. Trust me.

So I'm just telling you. In summary, Thrivers, if you have more money than time, and you're not sure what business to do, I highly recommend you buy a franchise. If you do not have a whole lot of money but you have a lot of time, I recommend you start a business with a low barrier to entry you can get into.

But on the cons, I don't see any real, reasonable cons at all. I just, I don't understand why you wouldn't do it. To me, it's a no-brainer. I love it. I love the franchise system. It just makes sense.

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