Finding Financial Freedom Through Franchising w/Giuseppe Grammatico
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Episode Description
Welcome to the Freedom Point Real Estate podcast! Today, Jeremy Dyer asks franchising expert Giuseppe Grammatico why he pivoted from franchise owner to franchise consultant, what he talks through with prospective franchise owners, what the risks involved in investing in an emerging brand vs legacy brand are, and more.
Giuseppe Grammatico is a franchise veteran, coach, author, speaker, & consultant who simplifies the process of franchising and excels at guiding his candidates to the business model that best suits their desired lifestyle. His greatest joy is helping people realize the American dream and sharing the freedom that comes from franchising. Giuseppe is the author of "Franchise Freedom: A New Manifesto For Your Financial And Time Freedom" as well as the host of his podcast "Franchise Freedom." Franchising is a powerful vehicle for success, but the franchising world can be overwhelming, to say the least. Giuseppe takes the guesswork out of the process, listens and teaches along the way, and finds the very best fit for his candidates. “Freedom favors the bold,” Giuseppe says. Those bold enough to take action on their goals are the ones that realize the freedom boldness can deliver.
CONNECT WITH GIUSEPPE GRAMMATICO!
Website: https://ggthefranchiseguide.com/
LinkedIn: https://www.linkedin.com/in/giuseppe-grammatico/
Youtube: https://www.youtube.com/@UCxWsxLRngbxJEH2m8w-ptYw
Facebook: https://www.facebook.com/GGTheFranchiseGuide/
Twitter: https://x.com/ggfranchguide
TikTok: https://www.tiktok.com/@ggthefranchiseguide
CONNECT WITH JEREMY DYER!
Website: https://startingpointcapital.com/
Instagram: https://www.instagram.com/startingpointcapital/
LinkedIn: https://www.linkedin.com/in/jeremydyer
Facebook: https://www.facebook.com/startingpointcapital
Book a Call! https://calendly.com/startingpointcapital/discuss-investing-with-jeremy-dyer?month=2023-12
Summary
Tip #1: Understand the Difference Between Emerging and Established Franchise Brands
“The established brands are great... The disadvantage in many cases is the markets are sold out."
Emerging franchises provide opportunities for growth, but also come with risks due to their limited track record. On the other hand, established brands offer reliability but might have limited market availability. It's crucial to evaluate your personal risk tolerance and business goals when deciding between the two. Understanding the pros and cons of each will help you align with the right franchise opportunity.
Tip #2: Validate the Franchise System Through Due Diligence
“You want to minimize your risk by talking with not just the corporate office but franchise owners to get their feedback.”
When evaluating a franchise, it’s critical to conduct thorough due diligence by speaking with current franchisees. This allows potential investors to gain a realistic perspective on the operational and financial support provided by the franchisor. Attending a discovery day is also an essential step to understanding the corporate culture and future vision of the brand.
Tip #3: Invest Time in Building the Right Team of Advisors
“It dives deep into one of the most important lessons... the idea of talking to the right people and building a team.”
Gigi emphasizes the importance of creating a team that includes financial advisors, attorneys, and accountants. Each professional brings expertise that helps manage risks and ensure your business is structured correctly. Building a support network before committing to a franchise can be the key to long-term success.
Tip #4: Don’t Rush the Franchise Decision-Making Process
“Don’t rush through this process, you know, go through, spend as much time as needed.”
Potential franchisees often rush the due diligence phase, leading to uninformed decisions. Gigi advises taking the time to fully understand the franchise agreement, the brand’s future vision, and the support system available. Rushing through this process could result in entering a business that doesn’t align with your goals or expectations.
Tip #5: Leverage Retirement Accounts for Franchise Funding
“You’re able to open up a C corporation, essentially buy shares in that corporation and fund that business.”
One often overlooked method of funding a franchise is utilizing retirement accounts through a Rollover Business Startup (ROBS). This strategy allows you to invest in your own business without traditional financing or loans. For those who prefer not to rely solely on Wall Street, this is a great way to diversify investments into a Main Street business.
Tip #6: Consider a Franchise for Proven Systems, Not Innovation
“If you’re looking to change the product or service offering, probably not a good fit for a franchise.”
Franchises work best for individuals looking to implement a proven business model, rather than those aiming to innovate or completely change the system. Gigi advises prospective franchisees to be realistic about their expectations for creative freedom. Franchising is about following a successful formula, not reinventing the wheel.
Tip #7: Smaller Franchise Brands Can Be More Nimble
“What I’ve noticed with some of the emerging brands is they’re nimble, they’re able to make changes much faster.”
Emerging franchise brands may lack the long track record of established brands, but they have the advantage of agility. With fewer franchisees, changes to the business model or strategy can be implemented more quickly. This flexibility can be particularly valuable in rapidly changing markets.
Tip #8: Consider the Availability of Territories in Established Franchises
“The markets are sold out, so you may be in a market... but have to look two hours south to find the closest available territory.”
Established franchises often have limited territorial availability due to their success and saturation in many regions. Prospective franchisees may need to consider relocating or investing in less desirable areas. This is a major factor to consider, as being stuck in a saturated market can limit your growth potential.
Tip #9: Build Relationships with Franchise Owners
“Talking with the owners... finding out what’s the direction—where is this ship going?”
Building relationships with other franchise owners gives you direct insights into the day-to-day operations and future direction of the brand. It’s an essential step in assessing whether the franchise’s values and trajectory align with your goals. The franchise community provides a unique support system that isn't available in standalone businesses.
Tip #10: Time Your Franchise Search Wisely
“No reason to really look at a specific brand and dive into due diligence if your time frame is... over six months.”
Timing is critical when it comes to franchise investing. Gigi advises that those who are not ready to commit within six months should avoid starting the due diligence process, as franchise opportunities can change rapidly. Instead, focus on high-level research until you're ready to dive into specific opportunities.
