Midas Muffler Franchisee
My name is Mike Coyne. I own three Midas Muffler and Brake Shops in the Southern California area. I'd like to give you a glimpse of what I've learned in acquiring a franchise.
Franchising is a great way to get in business for yourself, especially when you're going into either a new business venture or a new industry. The franchiser acts as a partner and gives you that experience you don't have and some procedures and support.
But it is important that you research your franchiser very carefully. In my own research of franchising, I found out there were three types of franchises. Two of them were bad and one of them was good.
The first kind was just interested in selling me a franchise, an idea, a concept, nothing else. Once they sold that franchise, I would be on my own. Virtually 100% of their revenue stream would come from selling franchises. That's not what I'd call a good partner.
The second type of franchiser was one who sold the franchise and then required the purchase of supplies and equipment from them. You find out that you have to buy printing presses or office supplies or whatever. You will probably be paying probably high, high retail for those services. And in some cases, once you've bought the franchise you may never hear from the franchiser again.
The third type of franchiser is one who sells you a good name and a good concept. It also can provide you inventory and equipment. You don't have to buy the supplies, equipment or inventory from that provider, but you may and thereby take advantage of its purchasing power.
With Midas, for example, the company had a reasonable franchise fee, which represents a very small part of its annual revenue stream. Royalties represent a significant part of its revenue stream. The more you make, the more they make as a franchiser. And since I have the opportunity to purchase from them or from a competitive vendor, they're always giving me the best value. That's a partnership; that's whom you want to get into bed with.