Flooring and roofing franchises are not the only places you will come across the ceiling and the floor. In today’s article, we will be talking about the ceiling and the floor in terms of being a franchise owner and how much money you can make.
Let’s be honest: The all-powerful dollar is one of the biggest things people are worrying, wondering, and thinking about as they explore what it would look like to become a franchise owner. Franchise ownership can put the control of “king dollar” back into your own hands.
Finances in the Corporate World
Most people who come to us at FranCoach have spent either all or a good chunk of their work history in the corporate world, working from somebody else. At the end of the year, it’s pretty typical to do year-end reviews and performance reviews. There will often be someone looking over your shoulder and telling you how you did.
Did you get a big Christmas bonus? Will you get a raise? And will it be a big raise or a small 2.5% cost-of-living raise? What will your finances look like for the next year?
When you are in the corporate world, guess who is in control of your finances? It’s not really you. It’s the company you work for. All of those decisions are up to them.
Many of us end up sitting there trying to figure out how we can make more money. Whether that’s with a different job, a new promotion or position, an increase in salary or commission, or investing in stocks – we’re always trying to get more.
But every now and then, you might think “This was a good year. I made a comfortable amount of money. I worked a comfortable amount of time.” But then, your boss might just come over to you and say, “Next year, we need to increase our goals by 20%.”
If you were to say “No, I’m good right where I am,” that’s not really allowed. In the corporate world, as someone else’s employee, you have no control over the ceiling and you have no control over the floor.
The World of Franchise Ownership
Now, enter the world of franchise ownership. A big piece of the “why” for almost everyone is, in some way shape or form, the word “control.” Now, that does not mean that you’re a control freak if you want to own a franchise. It just means that, above all else, you’ll be able to regain control over your lifestyle: the hours you work, when you work, and so on…
Next comes the money. You will be able to control how much you make. What you are able to make as an employee (your salary) is simply not equal to how you will be able to compensate yourself as an owner.
The Floor
As a franchise owner, as long as you are following the plan, you can build your business into whatever you want. Let’s say that you are however many years into owning your franchise, you are ending the year, and you are happy with the amount of time you spent working, your lifestyle, and your earnings. Let’s say you want your next year to mirror your past one.
You do not have a boss coming over to you saying “No, no, we need to bump those earnings up by 20% – or else.” Instead, you can keep doing what you have been doing.
Would the franchisor like it if you kept growing? Well, of course, but at the end of the day, they want happy owners. And if you are happy at whatever level that is, you can stay right there and maintain the status quo for as long as you want.
People rarely get into the world of franchise ownership thinking “Man, one day, I want to be the 80th best franchise owner in terms of revenue.” But sometimes, the owner that is 70th or 80th out of 100 franchise owners in terms of revenue is the happiest because they are meeting their financial goals and they are living the lifestyle that they want.
Can you do that as an employee? Absolutely not. Can you do that as a franchise owner? Absolutely. But that is just the floor – that is the boring part. We don’t want to look at that.
We want to control the ceiling. We want to make more gains than just the 2.5% cost-of-living raise seen in corporate positions. We want to work hard to earn more and make those earnings feel commensurate with the effort we are putting in.
The Ceiling
So how do we control the ceiling? First off, the sequence goes a little bit like this: The harder you work, the better you will do and the more your business is going to grow. As your business grows, you will be able to take more money out for yourself – or you can keep it in your business to continue growing and elevating it.
You can have a franchise where, in one particular territory or location, you are knocking it out of the park. Maybe you are a top owner when it comes to revenue. That can certainly happen because of your hard work, talent, skill set, smarts – all of those things. We know you have the smarts to follow the steps laid out for you in the franchisor’s plan because you had the smarts to work with someone like FranCoach that can help you find the right franchise.
Now, let’s say you still want more. One of the greatest things about franchise ownership is the scalability potential. Don’t just have one location or one territory or one unit. Add a second one of that franchise. Add a third.
We have plenty of people who start with one franchise (and for those people, congratulations, that is already awesome). But there are also times when people start with multiple – maybe two locations or three units.
In that scenario, you would rarely open all of them at the same time. Normally there will be a development timeline for that – certainly if your franchise is a retail brand, and likely even if it is nonretail. Regardless, you will be strategic in how you plan your marketing.
Let’s use the example of somebody who lives in Phoenix, Arizona. There are 5 million people in Maricopa County, and you have a franchise that requires 250,000 people population-wise for a territory. You could cover the whole county with 20 territories.
That is a lot. Are you going to immediately pump marketing dollars into the whole county? Of course not. That will come down to the development timeline, which we and the franchisors will help you with.
But could you populate a whole county with franchises for one brand? Yes. And you could steadily grow into that such that when you hit your ceiling on one location, you start a second one, and so on – and your ceiling will just go up and up and up.
Do you eventually run out of space for a particular franchise in your area? Probably, yeah. But does that mean you’ve hit the ceiling? No. You can be a multi-brand owner. You could have multiple franchises, you can have multiple locations for each, and you can continue to grow a whole empire.
Regain Control of Your Life
For every person who will get excited about that empire-building model (in which you could blanket entire markets with one or more franchises), we will run across the person whose perfect fit is one location of one franchise. And for that person, one location is hitting their marks. They are meeting their goals being the 75th or 80th person in terms of revenue for a particular franchise. And that is okay.
When you become a franchise owner, you have control over your lifestyle and the time you are putting into your business. You have control over where your financial well-being is and where you want it to go. All of that is up to you.
That raise, that bonus (if it is there at all) in the corporate world – is it enough? Does it justify the hours and the time you spent working and away from your family and the things you want to do? If that is not where it should be, then maybe we need to talk. If your corporate salary is where you want it to be but you do not want the pressure of continuing to build, then again, we need to talk.
If you have the desire to have control over the money you are making and the time you are spending working, that is where we can come in to help. Franchise ownership can really give you complete control. In other words, how high do you want that ceiling? What’s important is what you need and what your family needs for now and for the future.
Who Is FranCoach?
FranCoach is a national search firm dedicated to working with individuals who are interested in owning a franchise. We've partnered with over 600 of the top franchisors in the country, spanning nearly 70 industries.
Our number one goal with our clients is to help them find the absolute best franchise for them to own. Our goal with our Franchising 101 podcast series and this series of informational articles is to help educate people on all aspects of franchise ownership.
Reach out to us to learn more about potentially becoming a franchise owner. There’s never any fee for our service, so why not take the first step today toward your better tomorrow?