Have you ever wondered why franchises make up a staggering 43% of our nation’s total retail sales and service dollars?


Franchise owners are able to work “ON” their business — rather than “IN” it.

In his book The E-Myth Revisited, Michael Gerber explains that most new businesses are started by people who make the fatal mistake of believing that, since they understand the technical work of a business (like being an accountant or auto mechanic), they know how to build a business in their particular field of expertise.

In reality, these are completely different issues. Building a successful business requires the right balance of three unique skills:


  • The Entrepreneur is a visionary, an innovator, an idea person.
  • The Manager is a pragmatist, able to create reality from vision, by motivating others.
  • The Technician is the one who gets things done.

Franchises are successful because they embody all three skills in balance at once. This fact, plus the advantage of building upon tried-and-true methods of delivering what customers want, makes it possible for ordinary people to achieve extraordinary results.

Ray Kroc, founder of McDonald’s, proved the premise that customers prefer the experience over the product. They like consistency and predictability. And, by being systems-dependent (rather than people-dependent), franchises are able to deliver a consistent, predictable experience for customers — as well as a more dynamic environment for employees.

Finally, remember, it’s important to build a business that’s not only profitable, but also marketable. The biggest payout doesn’t usually come from a salary or dividends, but from the day the business is sold. Investors will pay a healthy premium for a franchise, because a system-dependent business provides a predictable return on their investment.

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