Lance Hood:               Let's take some time and help people figure out if a franchise is right for them and what are the advantages and disadvantages of a franchise?

                                    Okay Richard, franchises get all this attention and I'm constantly seeing them popup everywhere. That leads me to think that it should be more of a risk free way to start a business because it seems like the franchisers have taken the time to figure everything out.

Richard Parker:           That's very interesting and I agree a lot of people think to go into a franchise that runs. We had a stat that a franchise opens up like every eight minutes in America. But it's also one of the business world's greatest misconceptions. There are far more failures than one would believe.

                                    There was a survey of - I think it was about 1000 franchisee that shows something like the effect of 40% don't feel the franchisor can be trusted, and another 40% would not have bought it if they had known then what they know now. The vast majority don't feel that they're getting adverting support that was promised. And I remember an alarming amount - I think it was like - pretty certain it was over 70% are experiencing lower than anticipated profits.

                                    And so that's not a pretty picture. A franchise in my mind is really a glorified startup and we all know that 96% of startups fail within the first five years.

                                    Having said all that, and painted this doom and gloom related to franchises, I don't want to be misleading. Franchises really do make sense for some people. But if you're cutout to operate a franchise then don't buy a new one. Buy a resale that's already successful. This way you can marry the best of what a franchise and an existing business with a proven track record have to offer.

                                    There are customers, employees, and suppliers already in place, customers who'll call from day one. You'll have immediate cash flow. So you have all the benefits of buying an existing business coupled with the pros of a franchise that'll already be in place, and all those pros are benefits that you alluded to earlier on. There is allegedly the recipe. And again, my pessimism related to a franchise is the fact that a new franchise, and I don't mean a new banner of a franchise, I mean putting up a new location, that's really again, a glorified startup only because they're giving you a recipe that has allegedly worked in certain locations at certain periods based upon certain demographics.

                                    There's a lot of what if's there. If a certain amount of people come by, if it's in the right location, if you do X, if you do Y, if you do Z.

                                    Well I like to people that if my grandparents were members of the Royal Family I wouldn't have to work for a living. Right? I mean a lot of if's involved. Franchises do make sense for some people. They're typically for people that are able to follow orders, but if you're interested in a franchise, and again, they can make sense for a lot of people, then buy a resale. One that's already successful.

Lance Hood:               That's brilliant. I never would have thought of that. That's probably one of the best strategies I've heard.

Richard Parker:           Thank you and the neat thing about it is that it works.

Lance Hood:               So how do you find resale's that aren't official for sale?

Richard Parker:           There's a couple ways. First of all the franchisors themselves will disclose this to you so you should contact them or speak to other franchisees in the system. If you're looking to buy a muffler shop or an automotive or a franchise that sells subs, or any host of different franchisers, they're smoothies or whatever the case may be, go to those particular locations and speak to the franchisees. Often they'll know of other franchisees that are looking to sell.

                                    You also have the websites that offer businesses for sale and franchises for sale. In our course we have tons of recommended resources and websites to use, but a couple of them of for example are BizBuySell, and BizQuest.com, BusinessesforSale.com, those will all have franchises. Plus you have the ones that are specifically catered to franchises like FranchiseOpportunities. There's Gator, Bison.com, they all will have categories of franchises that are related for sale, or available for sale. And even a simple Google search related to franchise will bring you up a wealth of resources.