Often, when you’re considering a business coaching franchise, the franchisor will tell you that their “brand recognition,” in and of itself, is a valuable asset that will bring you business. But is brand recognition for a business coaching franchise really valuable?
True national brand recognition is generally only achieved by massive corporations, the result of billions of dollars being spent constantly on print, broadcast, and internet advertising. (Think McDonald’s or Dunkin’ Donuts). Even the largest business coaching franchisors in the world simply don’t have the kind of cash and traction necessary to make themselves a household name.
This means that the “brand” you’re buying probably isn’t worth as much as they claim. In most cases, the money you would have spent on a brand name that nobody recognizes would be much better invested in building your OWN brand, one that you can control and make a powerful force in your local market or niche–where it matters most.
In most cases, the money you would have spent on a brand-name that nobody recognizes would be much better invested in building your OWN brand, one that you can control and make a powerful force in your local market or niche--where it matters most.
How to Check Claims of Brand Recognition for a Business Coaching Franchise
First, look critically at the level of brand recognition the franchisor can legitimately claim. Make a list of the brands you know off the top of your head. Are ANY of them professional services companies, such as business coaching firms? If so, what size are these businesses? If you’re like 99% of the people who complete this exercise, you’ll realize fairly quickly that national brand recognition is usually NOT achieved by smaller organizations like business coaching franchises.
Then call five of the most influential accounting firms in your region and ask them if they’ve ever heard of the franchise system you’re considering buying. If they have, ask them about the reputation of the system. If they’ve never heard of them before, then most likely their clients (your prospects!) haven’t heard of the franchise either—guaranteed! If they HAVE heard of the franchise you’re exploring, what’s their reputation like? Will it help you or harm you?
The reality is, in most (if not all!) instances, there is very little benefit to the coach in terms of brand recognition for a business coaching franchise. You’re better off using the money you would have spent on a franchise to start up and market your brand to your target niche.
Build your own brand equity. That’s the way forward!
If you’re in the business coaching franchise “discovery” process, head’s up: it’s not so much an educational journey of discovery as it is a carefully planned and executed sales process.
After several years working in the business coaching franchise industry, I have a clear “behind-the-scenes” picture of what exactly they’re doing.
Now don’t get me wrong. There’s nothing inherently problematic about having detailed and specific sales processes. All business coaches should consider themselves salespeople. As the old adage goes, “Nothing good happens until something gets sold.”
But as a prospective business coaching franchisee, it’s important for you to understand exactly what they’re doing and why, so that you can remain level-headed as you make what is, for many, the most significant financial decision of your life.
So if you’re in the discovery (or sales) process with a business coaching franchise, here’s what you can expect:
Step 1: Qualify the Prospect
First, understand that the business coaching franchisors are carefully monitoring you against historical conversion rates that are measured to the tenth of a percent. Whether or not you INDIVIDUALLY can and will buy their franchise is discussed in countless meetings between franchise sales consultants (often posing as a career coach of some kind), franchise development directors, and the owners of the franchises themselves. I’ve been in the war-rooms and they’re all focused on one question: “What can we do to get this person to buy?!” Franchise sales representatives learn to size up a prospect in a matter of minutes based on their responses to certain questions.
Once the franchisor gets your contact information, he hands this information over to his sales staff (or what they term the “franchise development team”). A salesperson is assigned to your case and follows up with you to invite you to a meeting where you have the opportunity to get to know each other.
The intent of these first few meetings is not to pressure you into buying their franchise, but to learn as much about you as possible. This way, the franchisor can better anticipate and overcome your objections later as you move through the sales funnel.
Early in the process, you will fill out and submit a personal statement of net worth. This is important to the Franchisor, of course, because they don’t want to waste their time with you if you’re broke. Remember, this is a science to the franchisor.
Step 2: Deflect Questions about Earnings
As you learn more about the model, you will naturally begin asking questions about how much you can expect to make as a business coach. The franchise sales rep will decline to answer this question, citing their inability to make “earnings claims.”
Instead, they’ll point you to some of the current franchisees. As you might expect, this is a controlled process. You will meet a carefully selected group of franchisees on group conference calls, panel calls, question and answer calls, and the like. If all goes well, the franchisor hopes you won’t feel the need to begin making phone calls to franchisees individually, which can be very risky, from the franchisor’s perspective.
Step 3: Send the Franchise Agreement
Once it is determined that you have the desire and the cash (or can get financing against your 401k or other investments), the franchisor will send you the Franchise Agreement. It is your responsibility to ensure that the agreement matches your understanding of the relationship. Don’t let your enthusiasm or excitement get in the way of prudent decision-making.
It is far better to halt or delay a decision until you understand its ramifications than it is to go ahead and jump blindly in without knowing all the facts.
It is far better to halt or delay a decision until you understand its ramifications than it is to go ahead
and jump blindly in without knowing all the facts.
Step 4: “Award” the Franchise
When you’ve finally completed your due diligence and are exhibiting all the usual buying signals, the franchisor will offer to “award” you a franchise. The term “award” has been used for decades to remove the stigma of buying something so expensive. It creates the impression that you should be proud to be accepted into the club.
If you accept the “award,” the next step is the actual business transaction where you sign the Franchise Agreement and hand over your money. Most franchisors set up “signing meetings” face-to-face or over the phone. These are a big deal in the franchisor’s head office. Whenever there’s a signing, a reverential hush descends on the troops and they wait with baited breath for the money to change hands.
When it does, the office goes wild–because they’ve just landed themselves a huge sale.
Remember: the business coaching franchise discovery process isn’t what it’s billed to be–it’s a sales process. Go into it with eyes wide open so that you can get the information you really need to make an informed decision.
For everything you need to launch and grow a business coaching practice WITHOUT the massive risk, explore our Rock Star Coaching Program.
Here’s an important truth: when you buy a business coaching franchise, you’re in business for yourself. You’ve bought a system, not support.
That means you’re expected to adhere strictly to the franchisor’s operating system…but generally with little or no actual support from the franchisor!
It costs the business coaching franchise offices a lot of money to pay for field support for franchisees, so most of them cut costs wherever they can, leaving you on your own. UNLESS you start breaking the rules. Then they’re all over you.
Most franchise agreements are written to protect the franchisor, not you. They typically contain language that restricts what you can and cannot do with your business. Many frustrated business coaching franchisees have discovered that they actually have less control over their own operation and destiny than most employees do…with fewer avenues for recourse in the event that things get ugly with the business coaching franchise relationship.
Many frustrated business coaching franchisees have discovered that they actually have less control over their own operation and destiny than most employees do...with fewer avenues for recourse in the event that things get ugly with the business coaching franchise relationship.
And yet, during the sales process, many business coaching franchise companies will try to sell you on the idea that you’re buying into a “protective relationship” through the franchisor. Watch out: if you end up in court, they’ll probably argue the exact opposite–that they are merely sellers of a service and owe you no special duties of care or support, appealing to their franchise agreements as evidence of this.
Protect yourself before you enter into a business coaching franchise agreement by reading the fine print carefully! As a business coach, you don’t want to wind up in a bad situation where you’re expected to perform in the market without any help or support while paying a massive franchise fee each month. Instead, check out a way to transition into business coaching without re-inventing the wheel or risking your life savings.
Many people who look into buying a business coaching franchise do so because they love working with people. They enjoy entrepreneurship, counseling, coaching, and leadership. Business coaching is an excellent career for people with these gifts and interests. If you’re just beginning to decide whether or not business coaching is right for you, here are some important considerations.
First, understand what business coaching is.
Business coaches help entrepreneurs and business owners improve their businesses. You teach them solid principles in sales, marketing, systematization, and hiring. You also identify and solve problems that are preventing your clients from being as successful as they can be. As you help them improve, you’ll be handsomely rewarded for your efforts.
Business coaching is a fast-growing industry with annual projected growth rates around 25%. And realistic earnings potential is as high as $100,000-$300,000 a year.
Is Coaching Right for My Personality?
In my 15 years of experience helping business coaches succeed, I’ve discovered that there are specific personality traits that lead to success in coaching. It’s not enough to love people (although that’s critical). You also need to answer yes to each of the following questions:
- Do I dream of changing people, organizations, and systems?
- Do I thrive on making decisions for myself and others?
- Can I live with decisions I make?
- Am I a good teacher, leader, and motivator?
If you can’t honestly say YES to each of these questions, business coaching might not be the right opportunity for you. I’ve seen would-be coaches with amazing resumes and tons of corporate experience fall flat because they weren’t gifted teachers or passionate about inspiring change. On the other hand, I’ve seen would-be coaches with very little experience find tremendous success in business coaching because it’s such a good match for their skillset. (In fact, I’m one of those folks: when I started out I had NO business/entrepreneurial knowledge, but I had passion for each of the questions listed above–and in four years’ time I’d built my firm to over $1 Million.)
Should I Buy a Business Coaching Franchise?
The question of whether or not you’re a good personality fit for business coaching is something that most sales reps for business coaching franchises will never raise with you–and yet in my experience, it’s the number one predictor of success. Please be sure to carefully consider whether or not business coaching is right for you before you drop tens of thousands of dollars into a business coaching franchise that might not pay off.
The question of whether or not you're a good personality fit for business coaching is something that most sales reps for business coaching franchises will never raise with you--and yet in my experience, it's the number one predictor of success.
And if it does seem that business coaching is a great fit for your personality, know that there are many ways to break into the business. Buying a franchise isn’t your only option: you could take independent training courses, hire your own coach, join a business coaching membership program like the Coaches’ Coach, or any combination of the above.
I recommend downloading our FREE ebook, The Business Coaching Franchise Buyers Guide. It takes you through all the questions (like personality!) that your sales reps won’t raise with you, but that are critical to consider as you decide whether or not buying a business coaching franchise is right for you.
When you buy a business coaching franchise, do you really own it?
This idea that your business coaching franchise is yours is, perhaps, one of the most common myths in franchising.
The truth is, as Robert Purvin notes in his book on franchises, a franchisee who has PAID for the right to own a business usually has fewer rights than most employees!
There are a couple of reasons for that:
First, as a franchisee, you can be restrained from competing with the former franchisor–while a terminated employee retains the right to work in his or her chosen profession.
Second, franchise manuals often dictate EXACTLY how you have to run your business, even if your local circumstances or business instincts would lead you to make another choice. That means you are bound to comply with your franchisor’s directives, no matter what.
As a business coach, this often means you are restricted from generating new business and leads in ways that you would otherwise pursue (such as certain online marketing strategies)–and can restrict your ability to run an independent business coaching practice after you terminate your agreement or allow your business coaching franchise license to expire.
Bottom line for you? It’s vitally important that you do your due diligence, and ensure the franchise you’re examining provides you plenty of autonomy and independence to run your business the way you see fit.
It's vitally important that you do your due diligence, and ensure the franchise you're examining provides you plenty of autonomy and independence to run your business the way you see fit.
Will you be hamstrung in this way? Check out your franchisor’s reputation online. Go to ripoffreport.com and type in the names of the business coaching franchises you are considering, as well as the names of the founder(s)/owner(s). This should help you get a sense for whether or not you’ll get the flexibility you need to run a business that can be successful. Next, Google the phrase “business coaches who have left” and get a sense of what people are saying about their franchise experience on the way out.
And when you’re done with that, check out our FREE ebook, The Business Coaching Franchise Buyer’s Guide. It’ll walk you step-by-step through the due diligence process as you determine whether or not buying a business coaching franchise is right for you.