Need Opinion on the Franchise System

**InsomnicBrain** · 06-21-2008 04:02 PM

Hi,

I'm opening my first business and it's an automotive franchise. I'm scheduled to close my SBA loan next week. The franchise has a system in place on how much money I should apply for and how it should be spent in the first 3-4 months.

There system has it where I should fully staff my franchise. They also have it that the working capital I applied for should last me a good 3-4 months, which scares me.

My system I wanted to pursue before I got yelled at by one the V.P. of the franchise was to go understaffed and see how business picks up, then hire help as needed. With being understaffed also gave me projections for my working capital to last me close to 10 months versus 4.

THe V.P. asked me "Do you think your system is better than ours?" I replied "no" . He said "don't get cheap on me and don't f*** the system.

My main concerns and the reason why I wanted to go a different route was that I wasn't sure if the phones were going to ring off the hook right away and also, I was worried of running out of working capital. My main mechanic who has 30 years of experience also thought my system would be better and would minimize costs.

What do you guys think?

Thanks...Robert

**Gaulkin** · 06-21-2008 05:04 PM

Id rather be over prepared then under prepared. The system setup by a franchise is a system that has been proven many time and yours hasn't been proven once, id go with the proven.

**CIsaac** · 06-21-2008 05:10 PM

You know, I've only had the experience on associating with 3 franchise customers and currently have a friend who is a franchise consultant but...what I've seen is that usually their system is based on other good experiences. However, you ALWAYs have to find what works for you. I knew of someone who had to call in a franchise business developer to run his numbers through (he wanted to add an extra person) to see if it would work--maybe that could work for you. I know of another person who paid his person 60K when he should have paid them 30k--because he took the risk to hire talent and she's brought him tons of business. You just want to make sure the numbers can work or know how to make the #s work. Just a thought...

**pboychuk** · 06-21-2008 05:13 PM

Well, just think of the franchise system in general, the franchiser is trying to make their company more appealing, at your expense.. Why are their 15 people working at one time in a mcdonalds? Hell if I know.

This is a startup the goal is to reduce your expenses, and get things off the ground. Cut where you can and let things grow from there. Id rather work double-time to save the money that could be crucial to keeping the ball rolling

**InsomnicBrain** · 06-23-2008 01:11 PM

Thank you!

**JohnnyBudZ** · 06-23-2008 02:57 PM

Your already paying him a franchise fee, and a % a month. Don;t take his shit aswell. Tell him how you feel, imsure you did feel that your system was better then his at the time you just didnt wanna say anything that could fuck your chances of getting the franchise.

I think you shoudl have expressed your mind, the worst he can do is tell you its in the contract that you must follow his system, thats all. I wouldnt PUSH it though.

But long story short, express your mind and opinions....PROFESSIONALY. Isn't that what being an entrepreneurs all about?