Just got a letter from AWA, asking me if I was interested in joining them as a franchisee.
Hmmm, let me see:
I need to pay them a minimum of $60,000 (of which $30,000 is training costs)
I’ll be locked in to being a franchisee for 5 years (of which the first 3 will probably be spent paying off the initial $60K).
I’ll probably get paid less than what I’m currently getting (but look on the bright side: I’ll probably be busier!).
If they operate anything like Jims Computer Services, or one of the many other computer franchise companies, then they will probably expect you to pay a fee for each potential customer, regardless of whether the customer actually books you.
So from the word go, you are under financial pressure, sales pressure (sound like you must be a good salesman to convert (pressure) each potential customer into a paying one), and must also be good with people and computers.
Its a well known fact that a competent computer technician, who is also good with people, is as common as an honest politician. I’d like to think I’m the exception to this rule, but I know I can improve my people skills (slightly 🙂 )
My understanding of this field is that its probably not capable of supporting a traditional franchise structure, and it will become less-so in the future (with the cost of PCs dropping all the time). It will probably be like having a TV-repair franchise (how many of those do you know of?)
I’m finding even my own way of “expanding” is barely viable (I pay a contractor to fix a computer, I give him the majority of the customers fee, and from what I get, I pay GST and advertising costs, and I usually break even, or lose money). I don’t ask for upfront fees (but I also don’t provide much training). Any money I get is directly related to how busy the contractor is. Its a win-win situation, in that we are both motivated to do our best.
I have spoken to some ex-jims computer people, and it seems that after they sign up, they realise that the agreement is mostly in favour of the franchisor, so they struggle through the “lock-in” period, then they go it alone, by taking all their customers with them.
A lock-in period of 5 years seems very high. And I’m sure that if you try to sell the franchise before the 5 years, you will only get a small fraction of your $60,000 back.
Seems like a lose – win situation to me (franchisee loses, franchisor wins).
Whats sad, is that people will get into this, work their butts off, and at the end, will have very little to show for it.
Sure, by working for yourself, you have the freedom to work as much or as little as you like, but the financial reality is that you will work like crazy, since its not real freedom: you become a slave to “money”.
Anyway, thats enough ranting for now 🙂