MSNBC:
As a franchise consultant, I’m often surprised by the decisions made by demonstrably intelligent businesspeople. These are often businesspeople who’ve successfully grown businesses based on nothing more than their own ingenuity, talent and sweat–and yet some of their decisions almost defy explanation when it comes to franchising.
In analyzing some of those poor decisions over the years, I’ve come to the conclusion they’re often a result of a lack of understanding of a very simple principle: the present value of a franchise.
Hardly a week goes by when I do not witness it: The business owner who pulls the plug on a successful broker program or advertising source because “it just isn’t profitable” to sell franchises after paying broker fees. The franchise sales director who refuses to commission a franchise salesperson because “there is not enough margin in it after paying broker fees”–even though that strategy may result in lower broker closing rates. The hiring of less qualified staff or the failure to use a recruiter in order to save some salary–knowing that diminished sales production may be the result. Pulling the plug on advertising or a trade show because it didn’t work the first time. Saving 20 cents a copy on a franchise marketing brochure by using a substandard paper stock, despite the less impressive message it may send to prospects. Story continues here.
