If you want to maximise the money you make from your photography and videography, don’t join a franchise that demands a percentage of your turnover.
As a creative person, every photo and video you take has value. The real estate industry offers an excellent opportunity to get maximum value for your skills, but sadly, this value can erode if you become a franchisee. There are several reasons for this.
The most obvious is written into the franchise agreement you sign, which stipulates that you must pay a significant portion of your turnover to the franchisor. Is there value in this? Maybe on day one, but what about after a month or a year?
Using your skills in the real estate industry can be lucrative, which draws people to purchase a franchise. However, when you give up a percentage of your turnover, the value equation swings out of your favour the more sales you make. You might feel successful, but I would argue otherwise if you are struggling to make a profit.
The sales pitch of a recognised brand, the support of a large company, and the promise of guaranteed income initially make the decision to buy into a franchise seem sensible. However, once you put pen to paper, what seemed an appealing carrot can be a hard stick when you find out your business is not profitable.
It might not be immediate, but over time, it becomes apparent to many franchisees that they are not getting fair value for their work. Considering that most small businesses put a margin on their goods and services and that a 30% net profit is considered normal, the franchise you’ve paid to join has probably consigned you to a significant loss you will have to work hard to make up - if that is even possible.
As you use your skills, enthusiasm and work ethic to bridge the gap and turn a profit in your new business, you realise you’re on a treadmill that spins faster and faster in a negative-sum game. Every job you do loses a substantial percentage, and when your margins are pinched from the start, no amount of increased turnover will improve that metric. Low margins are low margins, and they lead to low profit.
Many photographers who have signed franchise agreements can feel trapped by their contracts. In some cases, this is by design. Handing your life savings to a franchisor to “buy in" compounds your headaches. If you have worked tirelessly to make a business work, running on the smell of an oily rag and barely making a profit, the threat of legal action might just be enough to make you walk away… quietly.
Any average person would feel defeated when they study the details of the “non-compete” clauses. I have seen some that are so draconian that they seek to prevent you from working in the industry in any capacity (you couldn’t even clean the toilets in a real estate agency). But, contracts are about providing fair value for both parties. The franchise agreement you have signed will ensure that each party has obligations under that contract. If either party is not meeting those obligations, you may have grounds to leave and not be bound by the conditions of the agreement in doing so.
If you don’t feel you’re getting fair value for your work, seek legal advice. Your legal team will split the facts from the fiction and explain your options. As someone who has been down that road, I can tell you that while engaging a lawyer may seem frightening at first, it is money well spent.
If you’re thinking about starting a new career and wondering how to get the most out of your photography by starting a business and making good money using your creative skills, the answer is black and white: don’t join a franchise that takes a percentage of your turnover. And before you sign anything, seek independent legal and financial advice.