Business Advice, Financing Tips, and Small Business Trends from a Young Franchisee
FranchiseHelp interviewed Vishal Sharma, a young entrepreneur and small business owner who bought his first franchise business at 24 years old. In 2009, shortly after graduating from California State University-Long Beach, Sharma acquired the Irvine, CA location of Juice It Up!, a fruit smoothie and juice bar franchise specializing inblended-to-order real fruit smoothies. Due to the business' success, Sharma acquired another Juice It Up! in Tustin, CA in 2011. At 26, Sharma now owns two successful franchise businesses and talked to FranchiseHelp to give advice as a small business owner and young entrepreneur.
Today, Juice It Up has nearly 100 stores across California, Arizona, Texas, and New York. The California-style juice bar's smoothiesare consistently voted "best tasting" among the top smoothie and juice bar chains.
FranchiseHelp: Why did you choose to own a business versus join a company as an employee? And why a franchise versus an independentbusiness?
Vishal Sharma: I chose to own a business because I like to be my own boss. If I work hard, I can make a direct impact on my business.Working for another company, I would not be able to do things the way I would want to do them, as I would have tocheck with upper management. Franchises have a structure that is already set up and has proven to work, so in my eyespaying a small royalty to the franchise is worth it.
FH: What has been your biggest challenge thus far as a small business owner? Any 'everyday' challenges?
VS: My biggest challenge thus far as a small business owner has been to increase the ranking for the stores and to ensurethat customers receive the highest quality service possible. I have not had any 'everyday' challenges.
FH: What has been your biggest victory/rewarding experience as a franchise/small biz owner?
VS: My biggest victory as a small business owner has been to increase the ranking of the store from the 60s to the top 5 inthe company. My biggest rewarding experience as a small business owner has been giving back to the community, suchas fundraising for local schools and organizations.
FH: How did you get financing, any tips? It must have been more difficult as a young entrepreneur.
VS: I was fortunate to have my parents' financial help for the first location. For the second location, my wife and I saved andpurchased the location.
FH: What are your plans for the two businesses you own, and your own career path?
VS: My plans for the two businesses I own are to increase gross sales, catering, and community involvement. My plans formy own career path is to continue improving business for my current locations, as well as obtain more locations.
FH: Any trends or changes you see in small business ownership?
VS: A change I see in small business ownership is businesses with more health- driven products since consumers are morehealth conscious and are purchasing healthier products, such as fresh squeezed fruit and vegetable juices. For thatreason, I am introducing a raw juice bar in my two stores.
FH: Any advice for future young entrepreneurs? What are some of the most important things you've learned from yourexperience?
VS: My advice for future young entrepreneurs is to be involved with your business and act as an owner/operator, not as an absentee owner. Some of the most important things I have learned from my experience is proper time managementand management of employees, as well as excellent customer service.
FH: Any advice for franchise owners in particular?
VS: My advice for franchise owners in particular is to follow the established franchise structure since it has proven to beeffective.
Thanks, Vishal! Visit FranchiseHelp.com for more tips for young entrepreneursand the best franchise opportunities for recent college grads. To find your own franchise opportunities, search our franchise directory.
Know Before you Go – Non-Compete Provisions in Franchise Agreements
In general, non-compete provisions state that the franchisee will not, during the term of the franchise agreement and for a reasonable period thereafter (typically two or three years), own or be involved in any “competitive business.” What constitutes a “competitive business” will vary from franchise system to franchise system, but most franchisees can generally expect to be prohibited from taking part in any business that offers goods/services that are either identical to or competitive with the goods/services offered under the franchise system. Non-compete provisions must be limited in geographic scope, and generally cover a set radius (usually somewhere around 5 to 25 miles) around the former franchised outlet, and possibly also the outlets of other existing franchisees.
7 Options for Financing When Buying a Franchise
The primary difference between equity financing and debt financing is that with debt financing, you will have an obligation to pay back the borrowed sum at a stated interest rate, but you will retain control of the business; in equity financing you are giving up a part of the business to an investor or investors in exchange for their financing. The investors may claim some control of the business operations; they will also have some ownership in the assets and potentially will take a share in the earnings. You will not have a set debt obligation to repay as you would with a monthly loan payment to a bank. The investor will be taking a risk as to when and how much of the investment he or she will recoup, as well as whether there will be a return on the investment.
Advanced Franchise Accounting Terminology
Fair warning: If learning about things like GAAP, revenue recognition policies, and the intricacies of cost vs. expenses makes your eyelids droop, feel free to skip over to the next article.