In this transcript, Clay Clark (US SBA Entrepreneur of the Year) discusses with Terry Powell ("the father of franchising" and founder of Entrepreneur's Source) dealing with the 7 myths of franchising on Thrive15.com, one of the most affordable business schools in Michigan!
Clay: Terry, thank you for being here my friend.
Terry: Clay, good to be here. Thank you.
Clay: Hey, we are talking about dealing with the 7 myths of franchising. We are going to get a little mythological here and now Terry, you've traveled all around the world, you've given many talks about the midst of franchising and this is sort of your bread and butter here and today we are going to talk specifically about the 7 myths of franchising and this include myth number one, I'll only be successful if I find the right business. Myth number two, I can only be successful doing something I love, business, franchise, doing something you love. Myth number three, I'll instantly know the right opportunity when I see it. Myth number four, I can't be in a business I know nothing about. Myth number five, there is no freedom in a franchise - corporate dictates everything. Myth number six, franchises stifle creativity and myth number seven, I can't afford a franchise and we are going to get into these myths here and Terry myth number one, okay, here we go. I'll only be successful if I find the right business. In your mind and from your experience what is, why is this a myth that someone can in fact find the right franchise. What does that mean?
Terry: It kinds of come from the, stems from the idea that it is sort of a needle in a haystack process, that there is really only maybe one or two ideal business's that are right for me and I'm that unique that the business needs to match up to all of these elements when in fact, the opposite is true in franchising. There are literally hundreds, if not thousands of business models in franchising that will actually exceed the expectations of the individual looking to be in that business.
Clay: You are saying to me if I'm saying, "I'm looking for that 1 out of 3,000 franchises, the perfect one, the one you are saying calm down, there is several of them out there that could work for you, right?
Clay: Okay. Now if I can't, if I feel like I can't find the right business for me, what kind of franchise business should I be looking for. If I'm like, I have looked at all of them and I just can't find the right one. What would you say to me? How would you, I guess correct my thinking there?
Terry: From experience most people will go about it from a standpoint as I'll know it when I see it. The reason they haven't found and they have been looking in a lot of things is they are really looking for something that happened to them that signals that it's the right franchise without having much of a plan or thought out about what it is I'm looking to accomplish with that business. They don't look at the business as something that is going to drive for specific results. They look at it from making a connection, almost like falling in love.
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Clay: What are some of the unrealistic expectations that franchise owners may or potential franchise owners may set when it comes to finding the right business? Is it just they are going to find that true love when they see it. Is that the biggest one?
Terry: I'll know it when I see it is the most common one and then it drills down into all kinds of things. Can I go to the country club and play golf and feel good telling my buddies I'm in that business. There is an ego aspect. There is a pride associated and that's not uncommon and most franchise business's will overcome that. Although I understand the guy that invented the little umbrellas that go in the tropical drinks and patented that is been making, has made over a billion dollars in selling those little umbrellas. Sometimes it doesn't matter what the business is. Those are the types of things that people get caught up on because they feel it's that big of a jump or a leap that they have to be precise than anything outside of that accuracy will mean failure which is really what they are fearing.
Clay: Now, myth number two is I can only be successful doing something I love or doing a business or franchising that involve doing something I love. Terry, how could it possibly be wrong to exclusively focus on finding a business or franchise doing something that I love?
Terry: It's not necessarily wrong, it's just, it's a myth, it's not necessarily the case because if you go and look in the bookstore or go online and read articles, they are going to be thousands of articles and books written about go do what you know, love and enjoy and success will follow. Now if you look at that in results of what people do who launch those businesses outside of franchising following that advice, it is they have the highest failure rate and they have the most experienced background and knowledge. In franchising, 97% of the people own franchises never had any background experience or knowledge of it. Don't even necessarily love the product or service before and have the highest success rate. It's a myth from a standpoint of the way people approach it.