Want To Make Six Figures? She Has Suggestion

When her husband went to an expo, bought a franchise business and encountered trouble, Meg Schmitz jumped in, turned it around and soon had a mini-empire of five franchise stores.

Now the Morton Grove businesswoman plays matchmaker in a business called FranChoice, pairing up budding entrepreneurs with franchisers, using her knowledge of the individual and the company to create a partnership that works.

For someone who can follow a playbook--or recipe--well and has ambition, she says franchising can be financially rewarding.

Schmitz recently met up with Niles Patch with her dog, whom she calls her "road sister," riding in the back of her black BMW. When she's not working hard, she's playing hard, driving the vehicle in Windy City BMW Club high-performance driving events, such as road rallyes and autocrosses. 

"Where else do you legally get to drive 120 mph?" she says, half-jokingly.

In the following Q and A, she discusses how she became successful at a Great Clips franchise, what kind of a person does--and doesn't--do well in a franchise, and what kind of capital it takes to get into a franchise.

Q. How did you start your career?

Meg Schmitz: I graduated  from Northwestern University, and my degree was in counseling psychology. It was around 1990 when I first got into franchise ownership.

Q. What was it?

My husband at the time and I bought a single Great Clips. That was another  place for me to use my skills with the counseling degree.

It’s a high turnover industry with a bunch of women who are used to not staying in a job very long or being treated very well. In that industry, you have to treat your employees well; I had a jump on that. I’m good with people, and figuring out what their natural skills are.

So I had high retention in a high turnover industry.

Q. How did you come to buy the Great Clips?

He went to a franchise expo.

However, he was Mr. Monday through Friday, very metric-based, while this is a seven day a week business populated by women with scissors. It’s very creative.

We opened the first one, and he thought, 'this is harder than I thought.'

So I took over and it stopped the bleeding. Regular customers started to come back.

We bought a second and a third, we got divorced, I bought two more, so I had five of them for awhile.

Q. And then what?

In 2003 someone made me an offer I couldn’t refuse.

Q. What was owning a franchise like? 

I went from being married with one salon to being a divorced single parent with five salons.

With Great Clips, I  was president of the year with the Great Clips organization.

This is what formulated my consulting and why I do the franchise consulting. There are a lot of people who get into the franchise business, but got one that didn’t really fit them.

Using McDonald’s as an example--you go into one and you’re going to get a Big Mac the same way, from one end of the country to another. Some people are not cut out for that.

You can take a really good franchise system and still have a really bad fit for somebody.

So when I sold my salons, I started doing this matchmaking work, the FranChoice.

Q. Say more about that. 

On one side I’ve got individuals who want to own their own business but don’t want to start from scratch.

It was the wrong fit for my ex-husband but the right fit for me. I was wiling to let them train me. If you think about what a franchise is, you’re buying an operating model that’s already been figured out.

To be successful in a franchise, you have to buy one that utilizes your skills.

Q. Can franchises be creative or do you pretty much follow the book?

There are different models to allow someone who’s more entrepreneurial to kind of customize it to how they operate.

Then there are the other ones where you have to do it exactly the same way.

If we take a franchise like Molly Maid or Certa-Pro or Focal Point Coaching--you're working with small and medium sized businesses that have a problem, and you as franchisee are going to use your professional skill set to help fix the problems.

Some are run in a uniform fashion, and some give franchisees some opportunity to express themselves within the confines of a proven operating system.

Q. What kind of person typically comes to you?

Some are people with money who are looking for a diversification strategy or want an exit strategy from corporate America.

Another example is someone who is currently displaced and is trying to take control and wants to use their expertise in a way that rewards them more generously than going back to the job market.

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I tend to spent four, or six, or eight hours with a husband and wife or a partnership getting to know who they are and learn what’s the short term goal and what’s the long term goal.

The short term goal may be to make money, the long term goal may be to create a chain of 10, a business empire.

It's a six to eight week process; it’s sort of like a dating process. You’re not just going to run out and buy a Midas Muffler. I could tell you what’s hot, but if you don’t give a hoot about muffler repair, it won’t work.

I’ve got manuals and materials and webinars my candidates will utilize to evaluate, 'is this the right business opportunity?'

Q. What about the companies?

The franchise company is evaluating them (my clients) at the same time. They have a vested interest in bringing in the right type of owner.  

That’s exactly why people like me, consultants, exist.

I lived what it felt like to be failing, and then to feel the resounding rewards, financial and ego, of success.

Q. What does success look like for you?

In January I got three different companies saying 'your placement was rookie of the year.' That’s what makes my world go round. When I get that phone call from an individual saying, 'why didn’t I do this earlier? I’m calling the shots, I’m in control, I’m making money and this is the best thing I ever did.'

Q. How do you find clients?

Companies find FranChoice; we’d be considered a premier group, because we’ve walked the walk. I’ve got 11 years of franchise ownership experience.

Finding the candidates, that’s more like a needle in a haystack. What I’m looking for is someone who’s financially qualified and has the fire in the belly to run the business.

Q. Why shouldn't someone just start their own business?

It’s a proven strategy. Somebody who’s really entrepreneurial and will take the time and spend the money to create an operating plan and a website, they probably have a higher risk tolerance.

People who go into franchising want to shorten up their learning curve and minimize their investment. You can spend a lot of time and money on a bad website.

A huge asset to franchising is that if you buy an independent business from a broker, what are you going to do if something breaks? 

Q. What kinds of people do well in franchising? 

Women love franchising and do really well with franchising. Military people and sports people do well. If you think about it, they’re following a playbook.

The military-- their lives depend on following a plan out on the battlefield. The NBA championship depends on your ability to execute as a team and achieve the highest level of success.

Women do well because they can follow a recipe, for success. 

Q. OK, so who doesn't do well in franchising?

People who don’t do well in franchising are people who, to make some sweeping generalizations, the ones who say, 'the marketing plan that tells me to spend $10,0000 in the next 3 months, screw it, I think I can do better if I use my brother in law.'

So--people who are ego driven and like to be right. You have to subvert your ego in the learning months. Once you figure out how to do it, you’ve’ve got more room to play.

The people who do the worst are those who want to add a little, do something else, or just make it up. I tell those people this might not be the right fit.

Q. What happens if a franchisee fails?

In franchising there’a a big legal document the FTC requires every franchiser to write. It’s a playbook.

Every company in franchising has to report any failures or closures.  In franchising if Great Clips has a franchisee who fails, Great Clips has to report it. If they get enough, people will say, 'this company isn’t bringing in the right type of franchise owner.'

They didn’t take time to bring in the right people.

Q. How much money does it take to get into a franchise?

There are 3,500 franchisers--it takes a couple thousand up to a million dollars. Within our own inventory, we’re looking for people who have $50,000 in cash and $200,000 in the bank.

That provides an opportunity to provide a six figure lifestyle. 

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