To Tell the Truth When Frisco, Texas–based franchise consultant John Hayes teaches a seminar, he asks the audience to list the negatives of franchising. He hears many things, including high initial investment, royalty payments, territorial issues, and loss of control. “You have to be a follower in some ways,” Hayes says. “If you break the system, you lower the value of the franchise overall.”

The drawbacks are surmountable — if you find the right fit. Hayes strongly recommends remodelers interview existing franchisees who have a long-term relationship with the company. “Ask them, ‘Knowing what you know today, would you buy this franchise all over again?’” he says. Also ask if the company has a history and record of delivering on its promises, and if the training prepared the franchisee to make money.

Maile admits he did not enter the franchise world with an open mind. He thought franchisors were greedy and did not care about quality. When he thought about the idea of giving someone money to teach him how to remodel, “I thought, this is crazy. I’m sending them money to buy a territory — I already have a territory,” he recalls. But when he finally took the plunge, he was relieved. “Overnight I was paying less for cabinets, plumbing, vanities, electrical, etc. I was buying some products at 50% less,” he says. “Right away, you chip away at that initial investment.

“Good franchisors know better than most of us that to build a good system, the product had better be valuable,” Maile says.

Stoltz heard franchisors would take anyone who had the initial investment fee. But during Kitchen Tune-Up’s “Discovery Day,” representatives mentioned recently turning down a potential buyer. “They make substantial money on selling a franchise. If they were willing to forego that for concerns regarding quality — I was impressed,” Stoltz says.

Brooks says with the Owens Corning franchise, buyers should set up a plan and structure the fees into their pricing. “If you start with a sound business plan, the royalty issue is not a problem,” he says.

Pete Wiggins, vice president of development of deck franchisor Archadeck, says in return for the initial purchase fee of $33,500, a buyer leaves the four-week training period with over $500,000 in systems including pricing and estimating software, marketing materials, and personnel management.