I don't own a franchise, but I definitely see opportunities for making one work within any industry. I enjoyed your article, thanks.
Is Franchising Right for You?
A franchise opens every eight minutes in the United States and provides an excellent opportunity for someone to be in business for themselves but not by themselves. Is franchising the right fit for you?
As a franchise coach, it’s my job to answer that question for each and every one of my clients. How do I do it, you ask? Read on for a few tips, tricks and myths about this $1.53 trillion industry.
Planning and Investigation
- Consider your motivation. If you’re considering buying a franchise solely because you cannot find another job, you are not ready to take on this new venture; while franchising is a wonderful way to take control over your future, you need to be committed 110 percent in order to succeed.
- Evaluate your skill set. Think about your strengths, weaknesses, interests and overall goals. Most franchisors don’t require their franchisees to possess industry experience but managerial experience is extremely beneficial. For example, the owner of a home painting franchise is seldom the one holding a brush but is instead handling billing, marketing, staffing and sales.
- Do your due diligence. The Internet, franchise consultants and seminars are great ways to gather information but consider talking to an existing franchisee or two as well. Since they’ve literally been there and done that, they will be able to offer personal anecdotes and advice that won’t be found in any company brochure.
- Working within the system. Franchises have a proven system in place but many give franchisees a certain amount of flexibility to personalize their operations. Know, however, that the system is in place for a reason; those who follow the system succeed and those who do not struggle. If you are someone who likes to blaze their own path, make all decisions and have complete control, that’s great…but franchising is not for you.
- Organizing your finances. All franchises require an up-front investment but the monetary commitment doesn’t end there. There are a lot of factors – rent, equipment, transportation and staffing, to name a few – that are not included in your initial fee so be sure to account for these extras when planning your budget. Also, since businesses take time to ramp up, check that you have enough savings to live on for at least six months.
- Managing your expectations. No business – even a franchise – is without risks so understand what you’re getting yourself into before you sign the agreement. Unlike businesses started from scratch, a franchise has a built-in support network to help you through the rough patches but you are responsible for keeping your expectations in check. Franchises have a 90-percent success rate but each business is different; if you’re patient and work hard, however, success will ultimately follow.
- Franchising is all about restaurants. While many of the best-known are restaurants, there are actually 3,500 franchise concepts in 75 industries.
- The more you spend, the more you’ll make. There is no correlation between how much money a franchise costs and how much money it makes.
- You must have experience in the field. Experience isn’t necessary; in fact, many franchisors prefer their new franchisees to have backgrounds outside the industry.
- All franchises are created equal. Some franchisors will take on every franchisee that can sign a check, which makes for a weaker organization overall. The franchises that vet prospective franchisees just as much as the franchisees vet them get the best candidates and have the strongest system.
- A franchise will run itself. Just because you have the support of a larger organization and ongoing training programs, owning and operating a franchise is still a huge responsibility and takes a lot of work – especially at the beginning – to make it successful.
Learn more about the author, Phyllis Pieri, CFE.
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