Before you buy a business coaching franchise, ask yourself this question: do clients really buy business coaching franchise brands? Or are they buying something else?
To answer this question, you first need to understand that most business coaching franchise brands are trying to sell more franchises to prospective coaches, NOT business coaching itself.
After more than eight years in this business, experience with 7 different franchise systems, and over 1500 business coaching franchisees, I can count on just two hands the number of franchisees I know who have actually banked revenue as a direct result of the franchisor’s brand, marketing efforts, national strategic partnerships, or preferred vendor relationships.
In fact, not only do most franchisees receive next to nothing in the way of revenue from the franchisor’s marketing efforts, most of them are frustrated by their inability to market their business because of onerous franchise restrictions!
For example, most franchisors are so concerned about guarding the purity of their brand, that they won’t even allow you to have your own website or develop email marketing campaigns without going through an approval process. In some systems you won’t even be able to set up your own social networking sites. Talk about frustration!
Here’s one thing I can promise you. If you find a business coaching organization that has discovered how to generate more business than it can consume, they will not be making this available to use as a franchise opportunity! Remember, the whole point of the franchise model is to use YOUR money, YOUR time, and YOUR effort to build their brand! If they had that much business coming in, they wouldn’t be giving you 85% of the revenue, and keeping only 15% of it for themselves.
They would be hiring employees or opening company-owned locations to do the work for a fraction of the gross revenue.
Here’s how to know quickly and definitively if a franchisor is focused on selling a franchise or if they actually make their franchisees successful by giving them revenue. Look at the franchisor’s marketing campaigns. Are there any focused on making sales to the end users — or are they all focused on making franchise sales?
If the franchisor is concentrating on selling more franchises, this is a good indication that you will be left to your own devices to make sales. On the other hand, if the franchisor markets coaching services and refers inquiries back to the franchisee best equipped to make the sale, this is a good indication that the franchisor has your best interest in mind.
What Business Coaching Clients Are Really Buying When They Sign Up for Coaching
The sad truth is that most of the prominent business coaching franchise brands have nothing systematized whatsoever except how to sell franchises. Oh sure, they have a whole raft of books and training materials you can use, but nothing that approaches a real, step-by-step, paint-by-numbers system that a newbie could follow in a linear, rational fashion.
The fact is, your clients won’t be buying a particular business coaching franchise brand. They’ll buy you.
The fact is, your clients won’t be buying a particular business coaching franchise brand. They’ll buy you.
Franchisors don’t want to admit this, but it’s true.
Unlike products sold by Coca-Cola, McDonalds, or Apple, business coaching is a VERY personalized process. That means it’s up to you to make the sale. In most cases, any hope you have that you’ll get anything from the franchisor will be sorely disappointed.
Word to the wise, when crafting your financials for your due-diligence phase I would assume “ZERO” revenue will come from franchisor generated sources…all the onus of building your business will fall squarely on your shoulders.
For more in-depth due diligence insights, download our FREE ebook, The Business Coaching Franchise Buyer’s Guide.
