NOTE: If you have never heard of these THEY DO EXIST.
Generally the way this works is that you pay the company an upfront fee and a going fee (or a percentage of your revenue) in order to use their business name and possibly have them execute the social media services that you are selling.
Here is why I think that Social Media Franchises are generally not a great investment:
- They have no established brand equity or recognition: When you buy a typical franchise like McDonalds or Subway you are buying their name recognition and marketing. Most of the social media business franchises have no name recognition, branding or marketing.
- They do everything for you and you are just a sales person (but you pay them to be a sales person): Many of these businesses sell you that they are a “franchise” but really they just get you to pay them to sell their services. Here is how they work. You “buy in as a franchise owner” and pay them money. When you get clients, you pay them to manage social media for the clients. You are really just a “middle man” or sales person making a small margin.
- They can charge a lot of money: Some of these social media business franchises charge thousands of dollars to get started, PLUS they get a cut of everything you make. AND YOU ARE STUCK WITH THEM FOREVER. You don’t have any real freedom because you are really a partner in their business instead of having your own business.
- They don’t actually know how to get you clients: I’ve worked with smart business owners who have bought into these things in the past. Most of them are sold on an idea that “It is so easy to sell this and you will instantly have many clients and become a millionaire”. You won’t. They don’t really know how to sell their own services. If they did, they would hire a sales team instead of giving you a cut.
Questions to Ask:
- What are they giving you?
- What do you deliver vs. them?
- Do they already have brand recognition?
- How much do you give up? Is it worth the cost?
- Do they have other franchisers?
- How much do they make?
- Do they have a proven sales model that is easy to implement?