"People get caught up in paying a royalty, thinking of it as an expense. It's really an investment. You're able to leapfrog years of trial and error. I'll give you an example. The typical non-franchised home service business has an average revenue of $100,000to $200,000 the first year, whereas in a system like ours, the first year is a half million average. So yes, you're paying a royalty, but think about how many trials and tribulations and mistakes you're avoiding and that you're able to get to better unit economics quicker. I always try to encourage our franchise owners to remember that, especially if it's their first business. A lot of times, they're actually doing fantastic, and they just don't realize it because they don't have anything to compare it to. But when you're part of a network like Voda or another franchise, you're able to benchmark against other people.
You're able to tap into the support of the franchise system. You're able to tap into economies of scale and purchasing power. The royalty is an investment into a lot of infrastructure that you'd have to pay for anyway, except with your own teammates, versus having a marketing department, having a COO that you can call, having a success coach that you can work with, and having a network of people that you can bounce ideas off of or vent to. Business is hard. It's not ever going to be easy, especially in the first few years. In a franchise, you have this tribe of people going through the same thing as you and people further along than you that you can tap into. That's really the power of being part of a franchise system. Could you do it on your own? Sure. Most of our franchise owners are successful people. Do I discount that they could do it on their own? Perhaps they could. It would just be harder, longer, and more tiresome than plugging into all the benefits that a franchise can provide."
Don’t just chase the lowest royalty.
What matters isn’t what you pay, it’s what you get. Stronger systems, better support, and higher margins often come with a slightly higher fee.
In the end, the real question is: How much do you take home?
We cover many current and relevant topics. A few include:
◈ Why franchising shortens your ramp up time
◈ All franchises are not created equal
◈ Focusing on your return, not the royalty
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