It struck me the other day when I was speaking with someone considering investing in multiple units of a Papa John’s Franchise how much of success in entrepreneurship depends on taking a calculated risk. In interviewing this person, he was considering multiple unit investments in the Papa John’s franchise system the easy answer would always be “no” because it’s safer to do what you’ve always done and avoid the unknown.
So with that in mind, I began researching Papa John’s and John Schnatter, the company’s founder came up. Mr. Schnatter has had his fair share of bad PR and rough patches over the last year, so plenty of news came to the forefront. He has since stepped down as CEO of the company and is transitioning to other things, but his net worth popped up front on the searches. As of the date of this article, Papa John’s founder is worth an estimated $1.1 Billion.
That was when it hit me. Here is this guy who started a business in 1984 selling pizzas with $1,600 to his name and by 2019, was able to become a billionaire. How many other pizza entrepreneurs are there out there who make a better pizza than John does and never were willing to take the risk and grow their brand. They were in effect bound to the inside of their four walls and maybe never would have achieved the levels of success that Mr. Schnatter has, but could have been something much bigger than they were. So much of doing big things can be tied to someone just being bold and taking a risk.
With the success of the Papa John’s franchise, I began looking into other franchise success stories and brands that took a risk to scale their model and do something big. Jimmy John’s Founder, James Liautaud came up next in my search. Here again was an entrepreneur who started a business in 1982 with $25,000 and in 1994, franchised the sandwich brand to grow faster and more efficiently. The brand had obvious success and provided Mr. Liautaud with incredible wealth – an estimated $1.8 billion by 2019. Again, a case where how many other sandwich shop operators are out there who have something great, but were never willing to take the risk, but Jimmy did and won big.
Next on the list were several in industries outside of food service that franchised their brand and scaled their business model. Mr. James DeVoe, the founder of JD Byrider, a used car sales brand started his business in 1989 and franchised the model to 125 locations and in 2011, was able to sell the company for $115 million to a private equity group, again I start thinking about how many used car entrepreneurs who just never pushed outside of their single lot or operation and possibly missed an opportunity. Then there is the GNC franchise in the supplement industry, a business that was started a long time ago in 1935 by David Shakarian, as a single store in Pittsburgh and grew to 8,400 stores at its peak and in 1999, sold to a private equity group for $2.5 Billion. Yet another example of an entrepreneur who took a risk, scaled their brand and was able to take an entire market segment through franchised expansion.
Ultimately, the risk associated with doing something different is always scary and when you are considering “Change”, it can be paralyzing for many business owners. I’m not saying that franchising or conquering the world is for everyone, but that it’s worth considering that you might have something bigger than a single operation and with the right vehicle, there could be a lot of opportunities. As the saying goes, “Fortune Favors the Bold”, it couldn’t be more relevant in entrepreneurship and when considering where to take your business.
FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.