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The Art of Franchising

Blog originally published on March 2, 2017. Updated on December 2, 2022.

What Does "Franchise" Even Mean?

The word “franchise” is often met with immediate recognition followed by complete confusion about the details. Franchising is a contractual agreement that allows you to own your own business while operating under a recognizable name and brand's system that was previously established by a franchisor. Franchises run the gamut, from home care concepts to service industries. Below is a guide to help you understand exactly how a franchised business model works. We’ll cover everything about a typical franchise agreement, from who owns the business to where the royalty money goes, as well as explain how franchising works for estate sales with Blue Moon.

Think of the franchised business as a cookie. We’ll revisit this analogy as we go. 

Who Owns the Business?

There are essentially two owners of every franchise location. There is the franchisor who is the creator and/or owner of the brand and business model, and there is the franchisee who is the owner and operator of the specific franchise location/territory.

Imagine the franchisor as a baker who owns their own restaurant and has come up with a brand new cookie recipe. This baker then allows other people (franchisees) to join the restaurant, trains them how to replicate the recipe, and mentors them as they work. Those who buy into the franchise can then go out and sell their own cookies using the franchisor's name, recipe, packaging, and reputation. 

What Does the Franchisor Provide?

In exchange for franchise fees, the franchisor provides their franchise owners with a reliable business model, a built-in customer base, and extensive training on everything from forming an LLC to serving their first customer or client and everything in between. After formal training is complete, the franchisor provides ongoing support to help ensure that the prospective franchisees are able to run a successful business.

Those who have bought into the baker's restaurant are given comprehensive training, as well as all of the materials and support they need to create a successful product — a delicious cookie! The original baker (the franchisor) oversees the new bakers (franchisees) in the kitchen and assists with anything they may need. 

When I Buy Something From a Franchise, Who Gets the Money?

This answer depends on each individual franchise concept and varies based on their royalty fee. Generally speaking, after an initial franchise fee is paid to buy the business model, the franchisor will receive a small percentage of the gross monthly or yearly sales. This royalty ensures continued help from the franchisor to support the franchisee with all of their needs.

A novice baker (franchisee) begins selling the cookies they've made from the original recipe, and the original baker (franchisor) gets a small cut of each sale for providing the recipe, the training, the recognizable name, and the ongoing support that they have received. 

Who Buys a Franchise?

Anyone who wants to buy a franchise has the opportunity to do so. A franchise investment is a big commitment, and most franchisees are hardworking people who want to be their own boss, are looking for a new career path, or simply want to bring a great service to their local community. A franchisor will not grant their business model to just anyone, as they are looking for high-quality individuals who are ready to run the business and grow the reputation of the brand with widespread profitable franchises.

The baker's reputation is extremely important. It takes years of practice, effort, and skill to create a great dish. For quality assurance, the original baker (franchisor) must choose new bakers (franchisees) who will take direction well, are fast learners, and have a strong work ethic. There is a vetting process, and only the most qualified people will be admitted to join the restaurant and learn the secret recipe.

Why Is the Franchise Agreement System Successful?

This question can be broken down in several ways. Two of the biggest factors are brand recognition and consistency of product. The best example comes from one of the best franchises in the world, McDonald’s. The name, logo, menu, and general layout of each fast food location are readily recognized all over the world. A Big Mac from a McDonald’s in Miami will look and taste the same as a Big Mac from Portland, Oregon.

Consumers like to know what to expect. They want the comfort of a reliable and familiar product or process, and this consistency is the product of proper training. Franchisors have perfected their businesses: they have already made the mistakes, found the solutions, and implemented the best processes. The business model is solid, and it is the franchisee’s job to learn it and replicate it. 

In a franchise, the learning curve for new business owners is greatly reduced. They are given the blueprints, as well as a mentor, to help guide them through each phase of the business. The shortened learning curve and specialized training allow for a consistent product, which, in turn, creates brand loyalty.

The baker (franchisor) is driven to serve delicious treats. The goal is for each and every cookie to match up to the master's original recipe. Since this franchisor is allowing others to operate and sell cookies under their name, they must protect their reputation and make sure everyone they've trained does a good job. This holds them all accountable, and this is why it is important for the franchisor to provide adequate training and continued support to those working in and out of the restaurant. It is important to push the brand forward. The same is true for all franchise businesses.

Is Franchising Right for You?

Owning a business is no walk in the park. It takes time, energy, dedication, and hard work. Just because you have been given the keys to the car does not mean it will drive itself. The same goes for a franchise. 

As a franchisee, you are the boss of your own franchise location, but you are not in charge of the brand. The best franchisees are quick learners, take direction well, and execute the business plan to a T. Problems arise when franchisees think that they have a better understanding of the business than the franchisor and deviate from their training. Chances are, the franchisor has already tested the franchisee’s method and has found that it does not work. This is the nature of experience. 

The best franchisors not only support their franchisees but continue to improve upon the business and grow the brand. This can be through new technology, marketing strategies, or operational procedures. If an idea fails, the franchisor will be at a loss, not the franchisees. The best franchisors are working to improve the business for you.

The original baker (franchisor) is established in the baking community. Their cookies feature a very specific, unique flavor that has been perfected with years of practice. However, that is not to say that the master shouldn’t be open to suggestions and input from those working in the kitchen, who have excellent perspective and experience all their own. At the end of the day, it is the master artist who has the final say in regards to what is going to be prepared and how. As they drive the direction of the restaurant, they also work to improve its recognition, product, and processes. This ensures that both the restaurant and its bakers will continue to thrive.

Estate Sale Franchising: The Estate Sales Business Model

Now that you have a better grasp of the broad concept of franchising, how does it work for estate sales? Here are a few more details.

Who should own an estate sale franchise?

If you want to start a business of your own and you're great at working with homeowners and members of the general public, an estate sales franchise might be of interest to you!

In essence, owning an estate sale business is a great fit for people who have an interest or background in:

  1. Marketing and sales
  2. Working with people
  3. Planning and organizing
  4. Flexible work hours

What are the job responsibilities?

Estate sale liquidators take inventory, price items, organize and stage the home, oversee estate sales (which typically occur on weekends), and work to keep both personal items and shoppers safe. The goal is to empty a home within one week, all while minimizing stress, and maximizing profit.

Furthermore, franchising also allows you to build your own team, your own way. You're in charge of hiring as many or as few employees as you like. (At Blue Moon, our owners start with five employees and scale up from there as needed.) We also offer marketing strategy support such as ad templates, website development, email marketing, social media accounts, and SEO to help generate estate sale leads for you.

Who are your clients?

Estate sale companies are important because they help families through major life transitions. It is our job to help people feel good about letting go and giving their hidden treasures a new home. You will meet with locals in your community who need help clearing out a house. The reason behind this could be a death in the family, selling a home, or another change in living arrangements.

Estate sales are popular with people of all ages. In addition to vintage lovers and avid antique collectors, you’ll also draw in interior designers and home staging professionals on the hunt for unique furniture pieces in your community.

Blue Moon Estate Sales has a massive shopper following, so your prospective clients are built right in. Our weekly newsletter and shopper rewards program make it easy for shoppers to find your sales.

Thousands of families have already chosen Blue Moon Estate Sales for residential and commercial estate sale services. With millions more in need of estate liquidators, there has never been a more opportune time to start a career in this industry.

Interested in Owning Your Own Business? Contact Us Now to Explore How Franchising Works for Estate Sales

Hopefully, we have cleared up a few of your questions regarding the franchise business model. Being a part of a successful franchise is an incredibly rewarding experience.

As a member of the International Franchise Association since 2014, Blue Moon Estate Sales is here to teach you the ins and outs of the franchise system. We provide in-depth training on all the fundamentals of estate sale management. With a low start-up cost, low business expenses, and brand recognition in large, protected territories, Blue Moon’s highly scalable, home-based business model provides significant advantages.

If you are interested in joining the Blue Moon Estate Sales franchise family, reach out today — no painting skills required!