Our business, currently, is strictly landscape design / construction. A lot of hardscapes, water features, etc.
I am seriously considering opening a franshised lawn application business as an extension. Anyone else go this route? I am just thinking in this aspect of the industry there is more competition than in construction, so name brand recognition would be helpful.
Obviously it would probably be cheaper and easier to simply start offering it to existing customers, but I really think I like the notion of national name recognition. The trade off is the expense.
ive been researching these and they want a minimum of 8% of your gross revenues annually. none have produced proforma financials justifying their initial investment or royalties yet. I will be surprised if they do.
I think you need to do it on your on. Franchises want too much money and there are alot of strings attached. They want to see your books and want a piece of your revenue. Some of the larger franchised compaines have a bad reputation. You don't want that image surrounded your company.
Our business, currently, is strictly landscape design / construction. A lot of hardscapes, water features, etc.
I am seriously considering opening a franshised lawn application business as an extension. Anyone else go this route? I am just thinking in this aspect of the industry there is more competition than in construction, so name brand recognition would be helpful.
Obviously it would probably be cheaper and easier to simply start offering it to existing customers, but I really think I like the notion of national name recognition. The trade off is the expense.
It really depends on your long term goals and your current financial situation. The majority of owners in this industry start out on a shoestring budget and over time build a business that meets their needs. What their needs are however will vary from person to person. When I decided to go into business for myself, I already had a good job, a good income, and some money in the bank. My goal was to have a million dollar business in 10 years or less that provided me with a 25-30% net profit level. I had over 10 years of experience in lawn care, but I realized that to have a business of this magnitude would require expertise and experience that I didn't have. In a nutshell, I went the franchise route and am 75% of the way to my goal in 7 years.
The larger I get, the more benefit I feel I derive from being in a strong franchise system. I do pay more royalties as sales grow, but my bottom line continues to soar. If you want to be a small operation and have the time to spend researching equipment, products, software, marketing, and creating your forms, brochures, web site, logos, etc, etc, then you may do just as well on your own. But if you want something more and have the ability to generate the initial investment of a franchise, take a closer look.
I agree with Cemars, and it all depends on what you want and how much time you have. A franchise is great if you don't have a ton of background, and you can come out of the gate with advertising, promotional materials, technical knowldged, equipment and someone to ask questions to. Don't get me wrong, this is an ok place to ask technical questions, but a lot of the answers here are so so becuase they are only antecdotal evidence.
If you have the time to build it slowly and can answer questions and dedicate the time to growth, you can do it yourself. I did, but it has taken three and four seasons to get just a little of the level of name recognition that "Scotts" or "Lawn Doctor" or "Tru Green" have.
Besdies, sure you pay a % to someone of your gross, but you will be paying that same % or more probably learing the hard way like I am.
Just my thoughts, if I had it to do over, I might think harder about it.
I purchased a franchise a few years ago. Let me share my experience. As Cemars points out, the benefits of going with an extablished "system" has its merits. It is exactly why I choose to go the franchise route to begin with.
During 1 year of training before I opened my doors it was "Drilled" into my head to "DO EXACTLY WHAT" I was told to do by the franchisor. These training meetings were held by the owners and managers and they used exisiting franchise locations as examples citing instances when their instructions were not followed and the consequences that followed. I didn't want to be used as an example for future franchisees.
Franchisors have to list the "Expected" opening costs to you prior to making your comitment. My actual opening costs were 10x this amount after doing all the things I was instructed to do. Items were ordered by the franchise headquarters. This was to save me time as I did't have to worry about inventory, supplies, marketing materials...etc.
Example: Everyday a box of literature would show up. I had to use there marketing materials but instead of buying as I needed I had to purchase in 10,000 pc increments. Instead of $2000.00 in marketing materials as stated in the francise offering circular I spent nearly $17,000.00 my first year.
My initial inventory of fertlizer was to cost me $5000.00. Since no other franchise locations were nearby I had to purchase an entire tractor trailer load. I found this out the day the truck showed up with 20 Tons of fertilizer.
Instead of growing the business at a rate I felt comfortable with, I was told (after I paid my non refundable franchise fee) that I had to have a "respectable" office/warehouse with a minimum of 1000 sq.ft. and I had to have $100,000.00 in gross revenue by the end of my first year. This required I hired more employees than I had planned. The franchisor sent a representative to help with the hireing process. The Technitian they recommended I hire (keep in mind I had been drilled to follow their lead) ended up taking my company truck home everyday and making up quotes when he was supposed to be measuring lawns and doing analyisis.
At the end of my first year I had met the $100,000.00 sales goal, was recognized as the "Leading" New location and was in the top 10 nationwide in sales, and I was deeply in debt.
I sent a very "non hostile" letter to the owner explaining my disappointment in my 1st year revenue and debt situration and expressed concern that my marketing costs for the next year would exceed my financial abilities. I closed the letter by asking for advice/assistance. A few weeks passed and I got a certified letter from the SOB saying that I needed to acquire another $100,000.00 line of credit and if I didn't, I should consider closing my doors.
Now, not all franchises are alike and many people succeed like Cemars. You just have to keep in mind that these people are not "IN Business" with you. Their #1 concern is to make their money off of your success.
it seems like that story is contrary to what I thought the basic premise of a franchise was. It seemed to me that the franchise succeeds when you as the franchiser succeed. That is, afterall, why they charge a royalty to collect that long term money from your success.
That story sounds like they were after the quick buck.
I recommend that you not spend the large fee's on a franchise and instead use some of that money to market yourself heavily in your County or metro area. If all of your trucks and trailers are branded the same way, vehicle wraps/graphics and begin your marketing campaign for your target customers. You build your brand where you need it. Begin to get written testimonials from satisfied customers. Make it a habit to ask for these and send a thank you card.
People are drawn to the big name brands because they think there is little risk in using them. You can also develop that same reputation. Most people want to go with a winner. If your trucks and trailers look good and are in good shape they feel you must be doing a good job or you wouldnt have that stuff and they go with you.
I actually own a franchise that does marketing,printing and promo.
I started my lawn business a few years before that to see what it was like to work for myself. Needless to say I now work for myself full time.
I'll gladly give you some suggestions on how to do effective targeted marketing.
I would go the franchise route. I would have bought a Scotts franchise if my area had not been already taken. Building a business on your own is a major pain in the butt.
While there may be a whole list of reasons to go the franchise route the bottom line is try to resist the temptation. You have been in business for seven years. That in itself is a milestone as most new companies fail within the first 5 years. Your established and you appear to know how to run a business. Do you really want a partner? Do you really need somebody telling you what to do? Is getting into lawn treatments really all that scary? You already market your existing business . You have been successful . Don't pay somebody for knowledge you can readily acquire. Do your own due diligence and training. You already have on this forum. Trust your own ability. Use your own ideas. You will get more satisfaction in creating your own empire than having somebody planing your next move. You went into business to be your own boss and to lead your company. Put your name on any new venture. Success or failure all depends on you anyway. Confidence can go a long way.
While there may be a whole list of reasons to go the franchise route the bottom line is try to resist the temptation. You have been in business for seven years. That in itself is a milestone as most new companies fail within the first 5 years. Your established and you appear to know how to run a business. Do you really want a partner? Do you really need somebody telling you what to do? Is getting into lawn treatments really all that scary? You already market your existing business . You have been successful . Don't pay somebody for knowledge you can readily acquire. Do your own due diligence and training. You already have on this forum. Trust your own ability. Use your own ideas. You will get more satisfaction in creating your own empire than having somebody planing your next move. You went into business to be your own boss and to lead your company. Put your name on any new venture. Success or failure all depends on you anyway. Confidence can go a long way.
As with many things, it depends on which side you view this from. These are the exact arguments for buying a franchise - most people don't know how to run a business, it takes a lot of time and work to acquire the knowledge you need, you don't have all the ideas you need, and confidence is the result of preparation and training. Franchises aren't for everyone but the average person who buys a franchise is buying an established business model - a lot of the prep work has been done and the franchisee can set about the real work. Think of it as a ready to assemble kit - sure, you could cut all the pieces out yourself but it's a lot easier if someone else does that crap work and you just concentrate on putting it all together. The most important benefit to a franchise is that if you follow the system, you'll substantially increase your odds for success.
As with many things, it depends on which side you view this from. These are the exact arguments for buying a franchise - most people don't know how to run a business, it takes a lot of time and work to acquire the knowledge you need, you don't have all the ideas you need, and confidence is the result of preparation and training. Franchises aren't for everyone but the average person who buys a franchise is buying an established business model - a lot of the prep work has been done and the franchisee can set about the real work. Think of it as a ready to assemble kit - sure, you could cut all the pieces out yourself but it's a lot easier if someone else does that crap work and you just concentrate on putting it all together. The most important benefit to a franchise is that if you follow the system, you'll substantially increase your odds for success.
My point was that this guy has been in business for seven years. It appears he " does know how to run a business " and is still in business when many fail very early on. The time and work to acquire the knowledge is available without paying big dollars for a franchise. Ideas can also be acquired for free if you do you own " crap work". I'm not saying a franchise is bad. I'm saying that there are alternatives to shelling out big bucks for a "business model'. A local landscape company in our area recently added lawn fertilizing to his business. He hired the right experienced people. He did his homework. He's been going for three years now. Was it easy? No. Has he had success? Looks like it so far. His success is dependent on him as is the same on any franchisee. When a franchise fails was it the operator or the franchise that caused the demise? I'm sure there are many successful franchises. There are also a whole lot of companies that were started by just blood, sweat and tears that have success. As an business owner you weigh all your options. If a franchise fits your needs then do it. If you can create your own brand it can be done. A franchise started out as somebody's business idea. Whose to say it can't be yours.
I built my business from the ground up. This this year i picked up 55 new accounts. HOW. Web site SEO. I'm on first page of Google (the phone rings every day) had to turn away customers. When the Grounds Guys called me and wanted to offer me a franchise I told them if they wanted to put their name on my truck they would have to PAY ME.
I had a friend who had a US Lawns franshise. He said all they did was send money to Orlando and they did very little to get them new business. He sold out to someone else and come up with his own name and moved own.
Franchise to me implies low cost and low quality. The sweet taste of low cost disappears quickly and the taste of low quality remains for a long time.
I do not eat at franchise restaurants because their quality disappoints me.
Franchises cost about $100,000. For that money I can get the equipment, pay the salary for a solo crew for a year, and advertise so much that I would get more work then I could handle. Then not have to give the franchiser a cut of my sales.
I do not need a parasite with their hands in my wallet.
Franchise to me implies low cost and low quality. The sweet taste of low cost disappears quickly and the taste of low quality remains for a long time.
I do not eat at franchise restaurants because their quality disappoints me.
Franchises cost about $100,000. For that money I can get the equipment, pay the salary for a solo crew for a year, and advertise so much that I would get more work then I could handle. Then not have to give the franchiser a cut of my sales.
I do not need a parasite with their hands in my wallet.
I honestly wish you would quit giving out false information, just because you don't like or believe in franchising doesn't mean it wouldn't be a good fit for someone else, and all franchises don't cost $100,000 some are much cheaper than that, and all franchises don't equate to low cost and low quality, that's just your opinion.
Here's a bottom line on this one, franchises make money, period. If they didn't, then no one would do them. I agree that if you build your own company from the ground up, it may be slow going at first, but eventually you will get where you want to be to be happy and your profit margins are better and you net income at the end of the year are better. It all comes down to a few simple things, how much work you want to put into it, how much money you want to initially invest, and how much money you want to make on the backside. Once you've answered those things, then make the decision that is best fit for you. When I started my landscape business I had every other franchise company call me offering me a "once in a lifetime" deal with their franchise. I told them all to pack sand b/c I could make more on one of my medium sized accounts than I could with three of their small ones and haven't heard from them since. I won't franchise, but that's because I don't care to go that route. I started my own business so that I could work for myself, but franchising would take that away from me.
Franchise to me implies low cost and low quality. The sweet taste of low cost disappears quickly and the taste of low quality remains for a long time.
I do not eat at franchise restaurants because their quality disappoints me.
Franchises cost about $100,000. For that money I can get the equipment, pay the salary for a solo crew for a year, and advertise so much that I would get more work then I could handle. Then not have to give the franchiser a cut of my sales.
I do not need a parasite with their hands in my wallet.
yea franchises suck, I would much rather own no name hamburger store than a mcdonalds...
I would love to see some of the people who bad mouth franchises gross and net revenue compared to a franchise owner. I bet the franchisee would win out in the majority of the cases... while I don't own a franchise I know of two different people who own lawn application franchises and I can tell you they live largeeeee... can they do it without the franchisor behind them? maybe but they don't seem to mind giving up there percentage every month!
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