Panelists gave audience members advice on franchising and answered questions at “The Ins and Outs of Franchising: What You Need to Know” as part of Entrepreneurship Week Thursday.

Some told stories, such as Jim Severson, franchise owner of Hilton, Holiday Inn, and Marriott hotels.

Before Severson became a franchise owner of hotels, he decided to buy a restaurant with his business partner.

Severson and his partner had to come up with $30,000 each, so he went to his father for a loan.

His dad was hesitant at first, because Severson had gone to college for engineering.

“He asked, why did we put you through school?” Severson said. “He tried to do everything to dissuade me.”

Severson was at first heartbroken, thinking his father would not loan him the money. But the next morning, his father told Severson he had always wanted to open his own business but could not because he had a family to support.

Severson’s father ended up loaning Severson the money he needed that morning.

Steven Michael, professor of entrepreneurship and strategy, moderated the panel, which consisted of Severson, Darrell Fisher, Vice President of Franchise Operations at Midas International in Chicago, Cassandra Halm, Franchise Bureau Chief in the Office of the Attorney General in Illinois, and Moni Sheehan, franchise owner of the Mattoon Dairy Queen.

Michael said franchising is a method of business that has been fabulously successful throughout the world.

Franchises are established by a legal contract. The franchisee is not an employee, but instead creates a contract with the franchisor.

“It’s a relationship of legal independence, but economic and strategic interdependence,” Michael said. “That’s important to remember.”

Halm stressed the importance of franchisees hiring a lawyer or accountant to look over documents.

“Make sure that the franchisees understand what they’re getting into,” Halm said.

Audience members were given cards they could write questions down on to ask the panelists.

Michael read from a card that said, “Why should I invest in such a leap of faith, draw a line in the sand operation as a franchise, rather than punching a clock for a big company? Why should I do this? Money or something else?”

Fisher said money and drive had something to do with it, as well as the fact that in a job where you “punch the clock” for a big company, there can be a limit to the upside.

“Owning a business and driving your passion to run a business, and executing that business plan flawlessly, your upside is not limited,” Fisher said.

Sheehan said a perk was being able to be your own boss.

“You absolutely have to have a stellar work ethic,” Sheehan said. “You have to get in there and bust your butt.”

Severson he would rather work 100 hours a week for himself than work 10 hours for someone else.

The panel also discussed identifying good labor and identifying good customers for their franchises.

“As a business owner, your biggest battle is getting employees that will clean up and show up and do the job as the job description entails and as they were trained to do,” Sheehan said.

Michael ended the panel by saying everyone wants to make a difference.

“As your own boss, you will be able to see the difference you make in the lives of your customers,” Michael said.

He said he was sure each of the panelists could tell stories of smiles that they have brought to their customers, directly or indirectly.

“A person whose stranded and his vehicle isn’t moving, a person whose desperate for a good night’s sleep before the big sales call the next morning, or watching the state champion baseball team coming in for a round of blizzards,” Michael said.

He said it is not always possible to see these interactions in bigger enterprises.

Zaira Navarrete, a freshman pre-med major, said the panel gave her a new perspective on franchising.

“I learned that it’s more dedication if you really want to get something out of it,” Navarrete said.

Cassie Buchman can be reached at 581-2812 or [email protected]