Consider taking a new path for your future. Statistics show that franchises have a much lower failure rate than new business start-ups. This helps explain why franchising is becoming an increasingly popular path for people wanting or needing to go into business for themselves. However, it’s a mistake to think that all franchises are a good bet. Like all businesses, there are no guarantees of success and some franchises have not delivered what they promised or the financial returns. As with any other kind of business opportunity, you should do your homework thoroughly before you buy a franchise.
Are you right for franchise ownership?
Franchises are not suitable for strongly entrepreneurial business types who enjoy the act of creating a business from scratch. If you have lots of initiative and ideas and enjoy ‘doing your own thing’ rather than being told what to do, then you will likely chafe under the typical restrictions of a franchise agreement. Franchisers (the person or company selling the franchise) have developed a system that works and they will want franchisees (the people buying a franchise) to work within the system. They have developed a plan that works and they want you to work on that plan. “Don’t fiddle with the knobs” and “Follow our guidelines because we know what works” are the underlying instructions. The whole aim of franchising is to duplicate the original so that customers get the same standard and quality of product or service from any outlet. The same goes for the franchisee who wants to see the same financial return and performance as in the FDD. There are therefore fewer opportunities for initiatives, or for departing from the established model. This will suit some, but not all.
Qualities you must have
It’s a mistake to think that owning a franchise is a soft option. It’s not, nor is it quite like working for a business or in a corporate office. You may start with the advantage of knowing that your franchise is based on a proven business idea, but you still have to make your particular franchise work in your area. You will receive some training, but not all your problems will be solved for you, so there is plenty of opportunities to take initiative and be creative. If you’re not prepared to put in the hard work, particularly in the first years, your business could fail or the franchise could be taken away from you by the franchiser. You, therefore, need the same drive and persistence, and a willingness to overcome challenges that anyone starting a small business requires. In addition, some basic business skills will greatly increase your chances of success. If you don’t have such skills, think seriously about acquiring them before you purchase a franchise.
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Irving Chung is a Franchise Consultant with FranChoice, the premier national network of franchise consultants. Irving helps candidates explore franchise ownership to determine their criteria and helps them find the “best” franchise. Learn more about Irving at BigConsideration.com.