Demand for product or service
Relative initial investment Segreto, who also hosts a weekly Internet radio show called Franchise Today, notes strong management is crucial to any company's success. "You don't want it to be centered on one or two people," he says, and this type of structure tends to be more characteristic of young companies. Experts agree that potential franchisees should also talk to existing franchisees to find out things like: Are they happy with the company? Are they buying additional franchises or territories? Would they would make the same investment again? Bankers who make loans to franchisees are also a good resource to consult. Potential franchisees should ask them if they have had good experiences with the franchisees and franchisors? In today's economy, more and more banks are looking at the franchisor's strength, Segreto says. Making sure the franchisor is creditworthy is just as important as the determining the franchisee's financial capabilities, he says. Steve Olson, president of Franchise Update Media Group goes one step further. He says before looking at franchises, use an assessment tool to find your own strengths and weaknesses. "What type of characteristics and strengths does the individual have? Are they going to match the business they're going to be in? It's a huge problem if you have somebody that really didn't have the skill sets or characteristics to succeed in that business," Olson says. With an eye on the bottom line, an increasing amount of franchisors are using these tests as another influence in their recruiting tactics, Olson says. "More and more are using them, especially in today's environment, where you don't want to
Probably known best for her recent appearance on the TV show Undercover Boss, Dina Dwyer can't take credit for the original vision of The Dwyer Group. When her father started Rainbow International, originally a carpet dying and cleaning company, in 1981, he wanted to have "a collection of franchised companies serving the same customer base," she says. But she can take credit for bringing his vision to life and expanding it. Between 1989 and 1996, The Dwyer Group launched or acquired other service-related brands -- Aire Serv, Glass Doctor, Mr. Appliance, Mr. Electric and Mr. Rooter -- and has expanded to become a fire and flood restoration company for residential and commercial properties. In 2010, The Dwyer Group partnered with Canadian landscaping company The Grounds Guys to build out its U.S. operations. The group has more than 1,300 franchises in the U.S. and Canada and runs several hundred more through master licensees internationally. The secret to The Dwyer Group's success, Dina Dwyer says, is in its ability to centralize each company's infrastructure, such as accounting, IT, marketing and legal, to support multiple brands without adding a lot of overhead or personnel. Segreto likes that there are many opportunities for a franchisee to expand, both within geographic markets and with other services under The Dwyer Group umbrella. "It gives people a lot of different opportunities," he says. He also points out that the company's code of ethics is strong. "You have a lot of two-income families. They need something local in the market. They want one source they can turn to," he says. "The wrapping of the brands, their processes and values of cleanliness and communication with customers ... consumers are clamoring for that type of customer experience."