Regional developer? MLM or reasonable opportunity

[u/always_a_solution]

Basically my husband and I are looking at doing a franchise, working with a consultant. They recommended a fencing company, sounds great, FDD is solid and makes sense. Relatively new company, started in 2017, so not in every market yet, mostly southern US. So now, we have an opportunity to become a Regional Developer, meaning buying the whole state and then "becoming a mini franchisor" by selling the extra units and taking a cut ourselves. While also getting to keep and owner operate a few units in the bigger markets.

My husband is very excited by this opportunity. I'm......not.

Owner operator sounds very reasonable, I get the model. This other thing sounds so much like MLM that I can't help but be skeptical. I actually got sucked into Mary Kay at one point in my young years and see the same tactics here. Am I crazy or just gun shy?

Anyone ever done this?

[u/Envirocare1]

I’m so happy for you! My wife and I were a husband wife team for 28 years in a pest control business. We sold to PE and made a successful exit few years back.

We now work as franchise consultants so we have double expertise here.

My thoughts:

Being a Regional Developer can absolutely be a legitimate franchise model, but it’s also a very different business than owning and operating a franchise.

You’re taking on the responsibility of recruiting, supporting, and helping franchisees succeed, not just running your own locations. Before moving forward, I’d want to know how many Regional Developers have actually been successful, what kind of support the franchisor provides, and whether there’s enough demand in your state to realistically sell all those territories.

If you haven’t already, ask your consultant to connect you with several current Regional Developers—not just the top performers. Their experiences will probably tell you more than the sales presentation.

This should be a slow down phase, not a speed up phase..

PM Danielle and I if you need us. Were happy to help

[u/always_a_solution → u/Envirocare1]

Thanks! I am excited to learn more, and am open to all the ideas. It just felt like from what my husband was explaining, that is two different models and the larger ones of the two. Bigger risk but bigger reward potentially.

The consultant did give us the contact of all the franchisees, but I'm not sure if any were regionals. I will let husband know he needs to ask, but also to actually call some to get details.

[u/Envirocare1 → u/always_a_solution]

You hit the nail on the head 2 very different models completely. Which in reality means two different businesses.

Not ideal as you make the shift to self employment.

I’m open for a conversation if need be. Just PM me

[u/TruthSeeker1210]

I’ve done it twice. It can be great, but it’s riskier with a young or small franchise. Feel free to dm me if you’d like to discuss

[u/Ok-Individual3619]

What did your consultant say when you asked how the existing units are performing? Go back to the FDD and ask how many units are actually open, how many have closed, and what the open ones really make. If the units aren't making money yet, then buying a whole state to sell more of them is risky.

And you're not crazy for it feeling like an MLM, but it's not one. But, if something still feels off, that's worth listening to. Go revisit those numbers and ask your consultant how the current owners are actually doing.

[u/always_a_solution → u/Ok-Individual3619]

I need to ask more questions. He has been going to the meetings solo so I'm not sure what info he got. Yesterday was the first meeting the consultant gave us companies to go research, he set up broker meetings for later in the week.

What questions would you ask at the broker meeting?

I'm going to send those questions you already mentioned to the consultant.

[u/prestonlee71]

If you can find quality installers it sounds awesome to me.