The U.S. Census Bureau reports that franchises accounted for 10.5 percent of businesses with paid employees—a total of nearly 8 million workers—in 2007 (the most recent year for comprehensive data). For many aspiring small business owners, this can be a very effective way to get into business, as owning a franchise eliminates the need for a “big idea” and comes with the requisite market experience.
TJ Ajmeri was used to serving customers, as the son of parents who owned a convenience store in New York City. After finishing his MBA and acquiring experience in hotel management, he noticed a new franchise, Pollo Campero, gaining traction in markets with large Latin American populations. He spent three months analyzing traffic flow and talking to local vendors before he decided to open a Pollo Campero franchise in Trenton, New Jersey.
Not all franchise operations are created equal, according to TJ. He mentions three major variables:
1) Amount of money needed to launch (total $750,000 for TJ’s location)
2) Size of franchise fee required ($40,000 for Pollo Campero)
3) Degree of support provided by the franchisor (superb in the case of Pollo Campero)
Recommended for YouWebcast: Growth at a Scale Up: How to Grow When You're No Longer a Startup
All of these factors combined with your own due diligence can make or break the experience. Unhappyfranchisee.com was a very valuable resource for TJ when he was doing his homework on good and bad franchises.
Today, a year and a half since opening, he and his partners are supporting themselves from the business and he is hoping to open another store.