Issue 9 - July2004

Should a franchise be in your future?
By Michael Gelmon

Although the chiropractic profession in the United States is stronger than ever, it still suffers from a lack of unity that prevents it from achieving its full potential in making America well. With the dawn of the 21st century, a new opportunity has appeared in the world of chiropractic — franchising.

The growth of a national franchise can be a big step toward unifying chiropractic, a step that could bring the profession added public awareness and respect. Franchises offer chiropractors an attractive business opportunity, a strong brand identity and a unified voice for chiropractic care.

Starting any new business incurs a certain amount of risk, but a franchise drastically reduces these risks. A study published in Entrepreneur in January of this year revealed that only 20 percent of businesses are still active after the first five years compared to 65 percent of franchises that are still active after the same amount of time. This means that some 80 percent of stand-alone businesses shut down during their first five years.

The growing perception today is that a franchise is an attractive method of expansion for a business and a safe investment. It is important, however, to consider several things before joining a franchise.

ADVANTAGES
Joining a franchise may mean sacrificing an individual identity, but the benefits gained from this far exceed the loss. Franchises bring legal and real-estate aid, financing, insurance benefits and perhaps the most enticing of all benefits, branding. Benefits of belonging to a franchise include:

• Legal and real estate aid. Often times when joining a franchise, help is available when selecting a site, negotiating the lease and constructing and marketing the new business. All of these things make it possible for the franchisee to concentrate on running their business while someone else takes care of the technicalities.

• Financing. Financing is often available from the franchisor. The franchisee usually pays an upfront fee and then an ongoing royalty. Ongoing royalties paid are based on the gross sales from the individual business.

• Insurance benefits. It can be difficult for an individual small business to get competitively priced insurance. The multi-unit structure of a franchise gives it a much more powerful bargaining position. Favorable rates for insurance are often offered to the franchisee and their staff.

• Branding. A brand quickly tells a customer what to expect from a company. It tells the mission of the company, provides instant credibility to a new business and communicates the highest quality service available throughout the nation.

• Training. In order to maintain the brand, franchises generally offer some type of training program. These programs foster relationships between franchisees and other seasoned professionals, making the transition into business ownership successful.

• Marketing support. Marketing support helps the franchisee maximize success when opening the new business. Most franchises provide ready-to-use internal and external marketing materials.

DISADVANTAGES
Franchising is not for everyone:

• Independence. If being completely independent and making every decision alone is a preference, then franchising may not be the right option. When you enter a franchise, you agree to certain decision-making guidelines.

• Individual identity. Belonging to a franchise means that you will give up a certain amount of individual identity. Your name will not be associated with the franchise.

The potential franchisee should adequately research the prospective franchise and know how to evaluate it. The proven business systems that come with a franchise can give a new business owner a roadmap to success.

Michael Gelmon is a franchise attorney who is the CEO and co-founder of Chiropractic USA, is the nation’s first chiropractic franchise. Gelmon also co-founded Dominos Pizza of Canada, Ltd. and was largely responsible for growing the chain to 200 stores located in every region of Canada. He can be contacted at 800-808-8099 or through his company’s Web site www.chiropracticusa.net.