Franchising pairs an entrepreneurial investor with a business that’s proven it can succeed. But it can be as hard to find a good match as it is to find the right spouse.
Enter FranNet, a sort of e-Harmony for business, that opened in Connecticut in 2008.
FranNet is a free matching service that connects people interested in owning franchises with the right franchise opportunities.
The owner of FranNet’s Connecticut operation, Luc Deslauriers, explained that he wanted to be his own boss after many years of traveling extensively in sales positions, including a top position at Canada Nike. That realization became a turning point for him. He found that by buying into a franchise he could have the best of both worlds — a hybrid of business ownership and support from a bigger entity or parent. In 2008, he decided to open up FranNet.
On July 28, Deslauriers gave a free informational franchising presentation at the University of Hartford’s Entrepreneurial Center, explaining what the concept is all about and providing important tips for anyone looking to own a franchise.
Deslauriers said owning a franchise is a much easier way to start a business in terms of finding capital, but the negatives include the fact that a percentage of the money a person earns always goes back to the franchise itself. So, as he explained, it would be difficult to earn millions of dollars in a franchise, if that were an entrepreneur’s goal. He said franchises are a sort of cross between owning a business and still reporting back to a bigger entity, which does appeal to many people.
He also explained that his selection process at FranNet is very important. A person interested in owning a franchise must complete an extensive form highlighting their interests and reasons for wanting to own one before it’s possible to set up a series of confidential meetings to determine if there is a good fit. Assuming there is a fit, Deslauriers makes a match.
“I don’t have concrete numbers on how many people started franchises in Connecticut last year, but since franchising is counter cyclical with the economy, there have been many new franchisees in the last couple of years. In two and a half years of operations, I have personally placed 16 clients and anticipate another four to six by the end of the year,” he noted. “FranNet has relationships with over 100 different franchise companies, spanning a wide cross section of industries and price points. Most of them have representation in Connecticut, while others are hoping to open soon.”
Deslauriers says growth areas in franchising lie in the needs categories such as education, senior services, home services and b-to-b services such as IT support and Internet marketing. High priced, brick and mortar concepts — such as food, automotive and retail businesses — have been much slower, he pointed out. He noted that 75 percent of his franchise inventory availability involves businesses that a person can “get in on” for under $150,000.
The franchise, 1-800-JUNK, is one that Deslauriers said sold out in the U.S. He said Dunkin Donuts franchises are among the most expensive to purchase and typically ask for $1.5 million cash.
As a must-do tip, Deslauriers suggests shadowing a franchise for a day before making a decision on ownership. He notes it’s always a good idea to interview at least five franchises and ask as many questions as possible. He believes it’s important to be thorough in the process and take a lot of time, if necessary, to make a decision. It’s also critical to understand the Franchise Disclosure Document and to know all the terms of the agreement before signing anything, he said.
Currently, Deslauriers is not offering any franchise matches in categories such as solar energy, but would consider it when their installation and production costs become cheaper. For anyone interested in a green franchise, he noted, it’s better to first look at an industry that a person wants to be in and then determine what the green angle could be.
Joanna Smiley writes the weekly Local Insight column. Reach her at jsmiley@HartfordBusiness.com.
