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You see franchises every day. You eat at them, you buy from them. Maybe even you've dreamed of owning one. And that's exactly why franchising is the most misunderstood business model in America, because everyone thinks they get it. It's just fast food restaurants. You gotta be rich to buy one. Corporate handles everything wrong, wrong, and wrong yin. And after 15 years of owning franchises and helping hundreds of people buy, operate, and scale them, I can tell you that these misconceptions could cost you everything or at least lead you to miss an opportunity that could change your life. Here's what's really happening behind those popular brands. It's just fast food. It is true that all the most popular fast food brands in America are franchises. McDonald's, Chick Fil A, Taco Bell, Wingstop, Domino's, Wendy's, Burger King, Papa John's, Little Caesars, Chili's, Panera's. Like, the list goes on. And it's true, because franchising works really, really well for fast food. Number one, they're really expensive. And a new brand or any brand, like, they don't have hundreds of millions of dollars to develop all these locations. So instead, you know, local franchisees put up that capital so it makes it way easier for brands to go faster into tons and tons of different neighborhoods. And because local franchisees put up the money, they've got skin in the game. They care about the success. And fast food is a very intensive, complex model. There's a lot of moving parts. There's health concerns. You have young kids. There's a lot of things. So you need somebody in those businesses who care about seeing succeed. And that's why franchising makes a lot of sense. Franchising is just one category in the franchise playbook. There are franchises in hundreds of industries. Auto repair home services is a ton, like painting, plumbing, roofing, flooring, cabinets. Almost anything inside a home can be done by a franchise. There's tons of B2B franchises in staffing, cleaning, cost reduction, medical billing, more. You can get to personal care like skin care salons and spray tans and haircuts. You can get to pet care, grooming, boarding, like scooping poop on a weekly basis. And get into senior care retailers. Like, the list goes on and on. There is a franchise for everyone. And the question is just like finding one that matches you and your goals and the things that you're good at. But it doesn't necessarily have to to be a fast food restaurant. Next up, corporate handles everything. This is a big one. They think that buying a Franchise means that you become this like corporate minion for a McDonald's and that franchisees just like run the machine. Like the thing just drives and if employee calls out, they just send somebody in. If something breaks, they just send a new one. And that is not how it works at all. There is a distinct, you know, franchisee, franchisor relationships and they both have responsibilities. The franchise or handle things that they can do on a global basis. They handle obviously the branding, the marketing, the digital assets. Like what are the ads going to run, what are the promotions that they're going to run? They're going to buy the ads in all the cities, do the digital marketing. They're going to figure out supply chain, like where are we buying our products from? Who are going to deliver, what kind of cost can we get, can we get rebates and can we pit each other against each other? They're going to figure out all the supply chain things. They're going to do R and D on new products and new services. Like their goal is to be thinking ahead down the line. Like what is coming that we can figure out, we can pilot before we spread to the franchisees. So I own 33 Midas Auto Repair Centers. EVs right are a big concern or big, you know, topic for a lot of people. You know, Midas at a corporate level is diligently working to develop the EV playbook to figure out what is coming down from the manufacturers, what are the things that we're going to service, what's the new technology, what are the new things that we aren't even doing today that could be a line of service in the future. So they're figuring all that stuff out and then they're going to bring it to us once it's ready to go. That is a huge, huge benefit of a franchise in any industry is this constant R and D there. Go help with stuff. Site selection for any retail concepts. They're going to fancy real estate software that is going to say is this a good location Based on demographics and traffic counts and co locators and all these fancy things to help you not make a bad decision. Because if you didn't have that and you were just put retail centers or looking at territories or kind of whatever, anywhere that was convenient or that maybe you thought was a good spot, it could turn out they could be a horrible, horrible choice. And then now you've lost like hundreds of thousands of dollars building the business in a spot that was a terrible selection that if you were a part of a franchise or if the franchise had software that they could help you avoid a huge, huge disaster. And then they provide an operational playbook. They tell you like, this is like how you're supposed to like cook the bread, make the pizza, fix the car, like whatever it is, they provide the operational playbook and best practices. As a franchisee, your job is to execute. Your job is to take that playbook and run with it. The best franchisees in the system and the worst franchisees in the system all have the same tools, they all have the same resources, they all were trained on the same exact process and the different columns down to the individual owners. Operational skills, execution, commitment to the business, the quality of people to hire, the quality that they can train and hold them accountable, and everything else. Which leads me to the next one, which is that you are not a real entrepreneur if you own a franchise. I mean, this can't be further than the truth. Because buying franchise means you are buying a business that happens to play by some rules. And that instead of starting on home base and you gotta like figure out everything on your own, you're starting on first base, maybe even second base. Because you have a brand, you have the playbook, you have the systems. Like, you have everything ready to go at your service. And your job is to go out there and just drive it forward. As I mentioned, I am 33, auto repair franchise. We do $45 million in revenue every day. My team is focused on improving our business. We try to figure out how do we get more customers through the door, how do we service them better, how do we increase our sales, how do we increase our margins, how do we hire better people, how do we retain them? By creating culture and recognition and a path forward. And we sometimes worry about cash flow and lawsuits and insurance claims and building out a virtual back office. In a leadership team, we spend very, very little time thinking about, like, what is the franchisor want us to do, what are the franchise? Or like, I don't care what their goals are, I care what my goals are and how we are going to go about executing them. And then the franchise or job is to support me and my business in executing those goals and whatever resources, training things that they can help me, that is their job. So how is that different than any other business owner who's out there, who's working up every day to do the same? Next one. Success is guaranteed when you buy a franchise. Man, this is probably the most dangerous one because there are people out there who think that buying a franchise is like buying some apartment building where they're going to put money in, they're hire a manager and then they're going to get a distribution on the 15th of every month. The truth is there are no predetermined returns. There is no hard and fast roi, IRR or any other like fancy finance terms. Because success highly comes down to your ability to execute the model. For example, I have bought an existing franchise that I put $50,000 down in cash and I financed the rest. And that location made me $400,000 in the next 12 months. I got 800% return on that location. I had. I've put more than fifty thousand dollars down and lost a hundred thousand dollars three years in a row. And before they started to break even, sometimes it's all over the place. The best franchises out there have more consistency in their performance of locations. So for example, the worst location might be 600,000. The best location might be 3 million and the average is like 1.2. You've got some sort of like it doubles at each time, but it's not too bad. There are other concepts out there where the best concept might be 10 times, 20 times better performer than the worst individual performing unit. If you see that big of a variance, 10x or more between like the top and the bottom, what that means is that the business is more correlated to the individual and less reliant on the process. It really depends on the type of business that you want to buy. There are ones where hey, if you're really good at sales and you're really good at driving things forward, you may succeed in a business that is very sales driven, like that one with this huge variant. On the other hand, like you may want something that is more process driven and maybe you can't make as much money on high end, but you're not going to lose as much money on the low end because you're going to have more locations within kind of this brackets. Next, you have no freedom as a franchisee. There are definitely some rules that you need to play by when you're a franchisee. You have basically guardrails and you have to drive your car down the road and stay within the guardrails. Some of them include a non compete. I have a non compete for Midas, which is auto repair that says that I cannot own or operate or have anything involved with a business that also provides the same services as Midas, which is like tires and brakes and general car repair and everything to do with like mechanical repairs. However, that does not limit me to if I wanted to own an Auto body shop because it's body damage, which we don't do at Midas. If I wanted to own a glass replacement or a tinting or radios, there's others like things I could do in automotive if I really wanted to, they're outside of it. But I can't own an oil change shop, I can't own a tire shop, I can't own Brian's Automotive. And this is to protect the brand because what if I bought into a franchise, I learned everything, all the secret sauce and then I went out and I opened up a competing business like right now next to that one. Like that would suck, wouldn't it? For the other franchisees you definitely have a non compete. The brand is going to have what are called brand guidelines. So there are certain like image standards that they're going to have that you have to follow. If you're building like looks like shit or if you aren't able to operate it to the standards they want, like they're going to make you do it or they're going to kick you out of the system. Ultimately it's to protect the brand. Like I'm a good performing franchisee and if there are Midas shops out there that look like absolute garbage that are embarrassment, like that is going to hurt my brand. When people are up here, they also have to approve expansion and acquisition. So say I want to buy another franchisee, the franchisor has to approve of that transaction and they may not approve of it if they don't think that I would do a good job handling it. Maybe it's one location off in the middle of nowhere and they're like, nah, we don't want you to operate that thing from 300 miles away. We really want a local owner, like they have the right to deny those acquisitions. At the end of the day there's some truth to this, right? You do lose some freedom. But on the flip side with those guardrails, you have a car that you can drive really, really fast down that highway. You're safe as long as you stay within it. Because I want to stay focused on the things that we're good at. I want to focused on execution. Because if I know if I can do that, then my business will be profitable. I'll make a lot of money. And then we can continue to duplicate and just buy more locations. We can prove the ones we got. And that is my goal. My goal is not to invent anything new. My goal is to not go off and try to diversify into all these other things. My Goal is just to go out there and win every single day. That's all I'm caring about. Next, you need to be rich to own a franchise. Now it is true for fast food. I mean some of these things called a million dollars, two million dollars. Also true for fitness, for hotels, other like very large cap X intensive businesses. However, 50% of franchises cost less than $350,000 and many service based franchises cost like 100 to 200 grand, like all in to get them up and going. And the SBA will end up to 80% of the startup costs which reduce your cash investment significantly. $200,000 for a territory you might only have $40,000 in as your, as your down payment. You want to have more working capital than you think you need because you never know what it's going to be. There's no crystal ball and all that stuff. Finally, you can't be creative, you can't be innovative. This is 100% false. Big Mac, filet o fish, both invented by franchisees. Those little munchkin balls at Dunkin Donuts that was invented by a franchisee. I have personally helped implement and create multiple processes in our business that have eventually spread nationwide. And this is one of the best parts about owning a franchise, to be honest, is the community of franchisees who are around the country operating the same exact business as you, living it day after day, working to improve the business. If they come up with a better way of doing it, they are more than happy to share that with the rest of the system. Because if it improves the system, the average revenue goes up, the profitability goes up, that starts to attract higher quality operators and investors into the brand. That increases the value of the brand. That means that now they have more marketing dollars, they can get into national promotions and national relationships and brand recognition. And like the rising tide lifts all the boat. That is a very common belief among franchisees. You go to conferences, everybody's friendly, they're sharing ideas, they're getting on stage and talking about best pract and things that they're doing to improve the business. So if you want to be part of a community of people who want to grow, they want to share, they all want to help each other and like, franchising's a really great opportunity. If you think that's a terrible idea and you just want to like have all the ideas, you want to keep them to yourself, you don't want to share anything with anybody, then probably not a great fit. Franchising has changed my life and it's changed many of my friends life like I live an amazing life thanks to being part of a franchising. My business is way bigger than it today, than it ever could be. As a non franchise business franchising, you know, it's great. It provides people an opportunity to get started in business and then they can scale through great execution. On the downside, there's 3,000 brands. Many of them are absolute crap. They charge you a lot of money, their systems suck, they don't give you all the resources, they actually hold you back and really you feel like you're on your own. So like there's a ton of vetting that you need to do in franchises to make sure you buy the right one. I've done a ton of videos on that and if you're really serious and want to learn more, I have a team. We can help you. There's a link below in the description. We can work with you one on one to help you find a great franchise. There's anything I can do, reach out. If not, I'll see you on the next video. Cheers.