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How To Start A Franchise And Make Money In Your First Year

How To Start A Franchise And Make Money In Your First Year

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One of the great benefits of going into business for yourself with a franchise is that the franchise is ready to roll on a well-traveled road to profitability. But how many franchise companies actually pay you through your ramp-up phase?

Related: Want To Start A Business? Learn How To Assess Profitability

All franchisors tell you upfront exactly what their system will cost, from the franchise fee to the costs to set-up shop, royalties, advertising, and so on, which is part of the attraction of a franchise. You know exactly how much money you need to get going. No surprises to throw you off course down the line.

You also need enough money to cover your living expenses for up to a year or more until your business starts to earn a profit.

The executives of Money Mailer, a direct marketing franchise company, believe so strongly that their concept is a winner, they have started a new program that actually offers financial rewards for coming on board their system.

Under Money Mailer’s seven-month-old GPS program — Goals + Processes + Systems — new franchisees pay no royalties for the first two years plus the company pays them a $2,500 bonus for completing their expense-paid field training and pays a performance fee of $2,500 each month for the first year, which means new franchisees take in $32,500 at a minimum just for meeting their goals in year one, said Dennis Jenkins, vice president of licensing for Money Mailer, which has 175 franchisees plus 51 company units, now available for licensing, in 38 states.

“We make our money on the production side of the business after the ads are sold,” he said. As a result, Money Mailer has “every financial incentive to help the new franchisees become successful as quickly as possible.”

“GPS allows franchisees to focus exclusively on building repeat monthly business,” he explained.

To make this program work, selecting quality franchisees is paramount. What’s most important is a good work ethic, he said, noting one-third of their franchisees have no sales experience.

“Our challenge is not finding candidates that can write a check for the $75,000 franchise fee – that would be easy – but to find top quality talent that merit the six-figure investment we make in each new GPS franchisee,” Jenkins said.

Money Mailer’s intensive training includes:

  • Money Mailer University (MMU) – five days at corporate headquarters in Orange County, Calif.
  • Three-week training camp, beginning the Monday following MMU, at a company operation, working with a team of trainers. The schedule permits the new franchisee to go home on the weekends, and the cost is covered by Money Mailer.
  • Field training: When they return to their sales territory, they work “hand in glove” for two weeks with their regional sales manager, a full-time employee of the company.

In addition to their field support, Money Mailer has a dedicated customer care “concierge,” handling advertising creation, production, distribution and all digital placements, including smart phone applications and social media.

Since the company instituted GPS, not only has lead flow dramatically increased, but the company also attracted the interest of a large venture capital firm.

Chicago-based venture capital firm, PSP Capital Partners, founded by Penny Pritzker, currently U.S. Secretary of Commerce, purchased a majority interest in Money Mailer last April.

“We are very excited about the future,” Jenkins said. “PSP has asked us for a very aggressive growth plan that takes the company to the next level, including the addition of 150 new franchisees over the next two years.”


Disclosure: This post is sponsored by a Work It Daily-approved expert. You can learn more about expert posts here.

Photo Credit: Bigstock


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Dan Citrenbaum Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-5489.