By David Blue

Franchising: A Business that is just like painting by numbers

What does Franchise even mean?

When the word “Franchise” comes up, it is often met with immediate recognition of what it is, and complete confusion of exactly how it works. Franchises are in every facet of life from food concepts to service industries. Below is a guide to help you understand exactly how a franchised business model works from who owns the business to where royalty money goes.

Let’s describes the franchise system as a paint by numbers for business and will hopefully provide another example to better understand the franchise business model.

Who Owns the Business?

There are essentially two owners of every franchise location. There is the franchisor; who is the creator/owner of the brand and business model, and there is the franchisee; who is the owner and operator of a specific franchise location/territory.

Think of a franchisor like a famous painter who owns a studio. The franchisor allows people to join the studio and provides a paint by numbers for people to paint. The franchisee buys into the studio and will sell the paint by number paintings using the franchisors name.

What does the Franchisor provide?

The franchisor provides the business model to follow and provides everything from forming an LLC to serving their first customer or client and everything in between. After formal training is complete the franchisor continues to give ongoing support to help ensure the franchisee is running a successful business.

Once the franchisee is part of the art studio, they are given training as well as all the materials they need to create a masterpiece. The franchisor is overseeing franchisee and will assist with anything they might need from what type of paint to by, to selling their first painting.

When I buy something from a franchise, who gets the money?

This depends as  each individual franchise concept varies on their royalty fee. After an initial franchise fee to buy the business model, the franchisor will receive a small percentage of the gross monthly or yearly sales. This royalty ensures continued help from the franchisor to support the franchisee with all of their needs.

The franchisee begins selling their paintings, and the franchisor gets a piece of each sale for providing the canvas template, to sell the painting using a recognizable name, and for the guidance and support they have received.

Who buys a franchise?

Anyone who wants to buy a franchise has the opportunity to. Most people who own franchises are hardworking people who want to be their own boss, looking for a secondary career, or want to bring a great business to their local community. A franchisor will not just give away his or her business model to anyone and as they are looking for high quality people to not only run a business but help grow the brand as well.

The artist’s reputation is extremely important and it still takes great effort and care to create a masterpiece with paint by numbers. To ensure quality the artist must bring in people who will take direction well, are fast learners, and have a strong work ethic since the canvas cannot paint itself. There is a vetting process and only the most qualified people will be able to join the studio.

Why is the franchise system successful?

This question can be broken down several ways but the biggest reason franchises work is due to brand recognition and consistent product. The best example comes from the most famous franchise in the world McDonald’s. The name, logo, menu, and general layout of each location is recognized all over the world. Getting a Big Mac in Miami, Florida will be the exact same as getting one in Portland, Oregon having a consistent product.

The reason for the consistency is proper training. Franchisors have perfected their business (flagship) by already making all the mistakes. The business model is from a successful business and it is the franchisee’s job to learn it and replicate it. The learning curve for new business owners is cut in half because they are given the mold as well as a mentor to help guide them through each phase of the business. A shorter learning curve, and proper training allows for a consistent product, which in turn creates loyalty to a brand.

The franchisor has a goal to create exceptional artwork for everyone to enjoy. The goal is to have every canvas look exactly like the original painting. Since the franchisor is allowing others to operate and sell paintings under their name (business paint by numbers), he or she must protect their reputation as an artist and make sure that those invited into the studio will do a great job. It also holds the franchisor accountable to provide adequate training and continued support to the franchisees to help push the brand forward.

Is franchising right for you?

Owning a business is no walk in the park and it takes time, energy, execution and hard work. Just because you have been given the keys to the car does not mean it will drive itself, and the same goes for a franchise. You are the boss of your own franchise location but you are not the boss of the brand. The best franchisee’s are quick learners, take directions well, and execute the business plan to a T. Problems arise when franchisees think they have a better understanding than the franchisor and deviate from their training. Chances are the franchisor has already tried the idea and found out the hard way that it does not work. This is called experience and the franchisor has the most business experience within the business, since they started it.
The best franchisor’s not only support their franchisee’s but they are constantly looking to improve the business and help grow the brand. This can be through new technology, marketing strategies, or operational procedures. If the idea fails, the franchisor/flagship will be at a loss not the franchisees. This is why it is so important to be able to take direction well as a franchisee as the best franchisors are constantly looking for ways to improve the business for you.

The franchisor is the big name in the art community. The paintings have a very specific style and there is no way a franchisee can do a better job of painting the franchisors style than them. Now the franchisor should be open for suggestions and can take advice from the franchisee’s but the artist has final say in what is going to be painted and how. It is the franchisor’s job to continue to evolve the paintings to ensure the studio will continue to thrive and people will still want to buy the art.

Hopefully this cleared up a few questions you had about how a franchised business model works. If you believe joining the Blue Moon Estate Sales franchise is something for you put in your application today.