Saturday, February 28, 2009

The Pain of a Small Business Owner (1)

Since I left my corporate job and started taking classes I began to understand the difficulties of being an entrepreneur. Being an entrepreneur during a boom time is easy, but trying to survive as one during a recession is very difficult. I began my venture with Quiznos, a sandwich franchise. I have to admit that I love Quiznos' sandwich (Notice the tenses, I still love them even now), but I hated Quiznos corporate management, especially the local "area director" where the Quiznos I owned was located. I initially thought that by being a business owner I could take control of my time fully, but that;s not the case with Quiznos.

My first bad experience with Quiznos' local area director began when I took off at 4pm to go to my class at Talbot School of Theology in La Mirada. I left two of my employees to take care and handle the shop while I went to school. Unfortunately, in a few minutes after I left, the local area director, Luann, came to visit my shop not for a routine check to to borrow some meat for another store from my store (This is actually one of the most commendable traits of Quiznos franchisees in the area). She noticed that I was not there at the store and she marked my store as "red" because I was not there. But, hey, am I not the owner? Do I have to stay at the shop every single minute? Haven't I stayed at my shop long enough? I was in my shop every single day from opening to closing except on the days when I had evening classes. I was left speechless when my employees told me the next day, I can only ask, "Why?"

After that, my relationship with the local area director went worse. She began to complain about many things about my store. She complained that I have older chairs and tables, and I have to replace them. What? Why? I bought the business from someone else, it was not a new construction. I saw many older stores which have the same chairs and tables like the ones I have in the store. Even the store where I went for training still have the old sets of chairs and tables. And I got another marks. I asked her about the reason why I was asked to replace my tables and chairs while others were not (even the guy whom I bought the business from was not told to do so), she only said that it was a new requirement for my store, because she had put those conditions before the transfer took place. She showed me the check sheet provided to me prior to the store transfer which provide the list of equipments in the store, and the chairs and tables were marked as older model. And I told her, wasn't that just a checklist for me as the new owner? And she said that it was the list of things to be fixed by new owner. What?

She then pointed out more things from the list, like the scratch and graffiti marks on the windows, the older soup station and many more. How can I avoid my windows from being scratched out, the marks were already there even before I took over the store, and the previous owner even told me that they were there even before his time. I began to feel that I was singled out because I was an Asian, and not Caucasian or Hispanic like the previous two owners, but I cannot have any conclusive evidence to proof it.

Getting red marks not only eroded my confidence and trust toward the Quiznos corporate management, but also my finances because Quiznos kept a portion of my purchases from McLane food supply as an award every quarter (And the amount was quite sizeable, about $1500-$2000 per quarter). I even called the corporate office regarding the issue, and the only thing the customer service rep told me was that the local area director has the final say in making any store to fix anything or not, and there's nothing they can do about it. Every time I asked Luann about the reason I was always asked to replace more and more stuff, the only thing she said was, "Well, didn't you make money?" Well, yes I made a little money still but I became a business owner to make money not to lose money.

I ended up replacing the chairs and tables, and I later had someone to polish my windows and put up protective films on them. I could not afford the money needed to replace them all because I was quoted over $20,000 at that time. After about a year, she began asking me to replace the channel letters on the store too. Well, the store was in downtown area and we closed at six, so I do not see the reason of having the new channel letters, especially because it costs between $5000-$7500 each set from Quiznos approved vendors (I checked around, and I found out that it costs less than $2000 from independent sign company or contractor at that time). My store would need two sets of them because we have two street frontage. That time I decided enough is enough. And that's when I decided to sell my store... and I did!

So, what's the moral of the story. First, being a small business owner is not as easy as it seems. Second, franchises have their own advantage, but they also have their own downsides. Franchisees do receive benefit from joint franchise marketing efforts and their name brand, but franchisees would also need to follow every single rule of the franchise. So, if you don't want to wag your tail at the order of the franchisor, do not buy a franchise, or buy franchises owned by Asians like Quickly or Lollicup because they gave their franchisees more freedom. Third, always do your homework first. Before you buy any business, due a thorough due diligence works. DO NOT trust the financial statement they provided unless it was audited by an auditor. Remember, many sellers inflated their books to sell their businesses at a much higher price. Beware buyer!