It sounds like you have a good business head on your shoulders. I would be very careful of any franchises. There are very few in our industry that have any real value. Most of the so-called franchise opportunities I have seen are actually companies attempting to make all of their money through selling franchises, but it’s all smoke and mirrors and they have nothing to provide you but promises of belonging to a national network with builder contacts etc. Most of these franchises rank up their with the get rich quick schemes you see on late-night TV where the guys telling you how to get rich selling real estate actually got rich selling people his scam video tapes telling other people how to get rich selling real estate! I predict a lot of these companies selling franchise opportunities will disappear as quickly as they appeared.
I have seen a few (actually ONLY one) well-established high-end dealers selling franchises. I can see value in it but can’t say whether it’s a good value without knowing how much they are charging. Keep in mind that virtually no custom installation companies have a well-established brand name on a national basis – so the name of the franchise will have virtually no value, unlike Starbucks etc. So any value will come from the franchise already having business processes, software and manufacturers line all in place.
Here are a few things to know: 1.It's not very difficult to fid any number of manufacturers willing to sell you good product, but there will be exceptions. Companies like Crestron and AMX might not be beating down your door to sell to a new establishment. Otherwise, you won't have too much trouble obtaining decent lines, assuming you make a good impression on the sales rep. 2.All types of outstanding product is now available through distribution (as opposed to buying factory direct), so again you don’t really have to worry about having a difficult time obtaining product. Of course when you buy through distribution you do pay a higher price (usually about 10%) than a direct dealer, but a lot of companies starting out find the tradeoff of not having to commit to annual purchases or inventory etc a good one. And quite a few products are available only through distribution now, in which case just about everyone is getting pretty close to the same prices.
Normally, I don’t like to answer questions from guys that post these types of questions because they usually live in a fantasy world and think because they like home theater they can make a living out of it and have little regard for their first customers that they intend to learn on. But I like the fact that you seem to be a person who feels you can sell large projects but also realize you should involve someone in your company with experience in the industry.
Good luck.
This message was edited by QQQ on 10/26/02 01:50.30.
