Last updated on May 13th, 2019 at 02:35 pm
Chip Baranowski helps entrepreneurs interested in becoming franchise owners connect to the right franchise business. Serving as part business coach, part psychoanalyst and part matchmaker, Baranowski probes his clients with a series of questions to best match the right entrepreneur with the right business opportunity.
Baranowski is a strategic advisor with FranNet, a franchise itself that helps connect potential franchisees with 65 to 75 other franchises.
He has almost 20 years of experience in the franchise world, both as an employee and franchise owner. Before opening his own FranNet franchise in Brookfield, Baranowski worked for franchised businesses in the truck rental, floor covering and window and uniform businesses.
FranNet is "like an executive recruiter for the franchise industry," Baranowski said. Many clients are in their 40s, 50s or 60s and have been downsized from the corporate world. Others are in the same age range and have decided that working in the corporate world isn’t for them any more.
Regardless of their background, Baranowski says he uses two guidelines to quickly determine if someone is serious about going into business for themselves by becoming a franchise owner.
The first of those guidelines is to determine whether or not the person is ready to commit to being a franchisee in the next 60 to 90 days.
"Too often, people look a year ahead into the future," Baranowski said. "But with a franchise, you’ve got to be serious, and you’ve got to be ready to go."
The second guideline involves financial questions. Baranowski said he needs to ensure that clients will be able to qualify for business loans, have the necessary equity to put into their business and have 12 to 18 months of living expenses arranged for. That amount of living expenses is needed because most businesses don’t make money during their first 12 to 18 months, he said.
If people pass the first two general questions, Baranowski schedules a two-hour meeting with the client and their spouse, if they are married.
"I always emphasize the spouse," he said. "They need to be part of the decision process, even if they’re not involved in the business."
Before the meeting, clients fill out a three-page application, which asks them about their personal finances, goals and why they are interested in business ownership.
"I’ll sit with them and ask a lot of probing questions, to try to get to the passion of what is driving them to own a business," he said. "I need to find out what goals, skills and strategies they are bringing to the table, as well as their budget and how much they feel comfortable investing."
One of the most difficult questions is finding out what the client’s pain threshold is – or how much the client is willing to lose before the business turns a profit, he said.
"If you don’t find out what that is, you can have a problem," Baranowski said.
After completing a profile of the client based on several meetings and forms filled out for FranNet, Baranowski said he is able to match clients with franchises. FranNet performs due diligence on the franchise companies before it agrees to provide them with potential franchisees.
The companies that FranNet connects with interested business owners pay finder fees to Baranowski and other FranNet franchises.
"We cover every avenue and every spectrum of franchising," Baranowski said. "We tend to focus on the top one or two producers in their industries. There’s not a lot of repetition."
Baranowski will generally charge his clients a $100 consulting fee, which he usually refunds if they decide to become a franchise owner.
When meeting with clients, Baranowski discourages them from thinking too much about one specific brand or type of franchise. Instead, he wants to find people that are interested more in working for themselves and not re-entering the corporate work world.
If clients keep focusing on one type of business, such as a Dunkin’ Donuts store, Baranowski said he suspects that they might not be serious about franchising and may seriously consider taking a job in the corporate world if one is offered.
For every 10 clients he sits down with, only one or two will be ready to start their own franchise business after they go through the consultation process, Baranowski said.
"The other people (who don’t pursue a franchise) will find a job, or they don’t have enough money or their spouse is not on board, or they go another route in business ownership," he said.
Becoming one of "those people" is one of Baranowski’s largest fears.
"My biggest fear is going back to work in corporate America," he said.
Baranowski said he has brokered deals for 26 franchise owners since he opened his business three years ago. Of those, only two or three have gone out of business, he said.
"The job market is better, and the urgency isn’t there," he said. "I’m working with a lot more people that are employed now who are looking for other options."
Aside from traditional advertising and word-of-mouth referral, Baranowski puts on free self-employment seminars at the Marriott Hotel in Brookfield to tell people about self-employment through franchise ownership possibilities. He also offers similar services with outplacement agencies.
Baranowski hopes to open a Madison office, which will be staffed with at least one full time employee. Baranowski said he’s working with an attorney now to create a plan for satellite offices.
Eventually, he wants to own the FranNet franchise for the entire state. Within two to three years, he wants to open another office in the northern Fox Valley or Green Bay markets.
"Eventually, I want to be out of the self-employment track," he said. "I want to be able to go away for a week and not have to worry about it."
August 5, 2005, Small Business Times, Milwaukee, WI