Considering a Franchise? Examine Yourself First!

Considering a Franchise? Examine Yourself First!

 

As someone who works with a great number of potential franchise buyers, I can tell you that many – if not most – are really not prepared for the endeavor of becoming a franchisee. In fact, they are not unlike a person who visits a car dealership, casually looking for a new automobile to place in their garage. They are certainly filled with good intentions, spending a lot of their time – as well as the time of the franchise sales community – more or less just looking around with no real ‘action plan’ in place. They are simply browsing, not ready to find and commit to purchasing that specific franchise that will offer them the possibility of a successful career path.

 

Some of this lackadaisical feeling can be attributed to human nature, but most of it is a sure indication that the person is really not serious about getting into a  business of their own. Those that approach the prospect of business ownership with this attitude are really doing no one any favors…especially themselves.

 

Many people romanticize the idea of being a business owner. But while the “idea” of being your own boss sounds really good, in reality it’s a lot more work than most people are willing to take on. People think that when they’re self-employed they don’t have to answer to anyone else; but the truth is, they still must answer to the most important people of all – their customers.

 

At a normal ‘9-to-5,’ you may only have to deal with one or two jerks in order to bring that much-needed paycheck home. However, depending on the business, industry, or career path you choose when it comes to self-employment, there can be a never-ending ‘jerk’ supply – not only customers, but employees as well.

 

Then there’s the risk factor. If one combines reality with risk, it can quickly create a ‘stick’ of fear that  beats the idea of being a business owner out of many a prospective franchise buyer’s mind. What ends up happening is that these ‘types’ of people waste a great deal of time and energy – not only their own, but others who are engaged in trying to help them.

 

High quality franchisors have systems to weed out the “Tire Kickers” and the “Looky-Lous,” because they realize that these people are really not qualified to be good franchise owners, regardless of whether or not they have the financial resources behind them. We’ve seen people who really could be good, quality, successful franchisees, squash their chance of becoming part of a good franchise brand simply because they weren’t prepared to get serious. The ‘weeding’ is done quickly by the franchisor, and the people who are not really interested in being in business, or not a good fit for their franchise concept, are eliminated fairly early in the process saving everyone a lot of time and energy.

 

What should the person who’s sincerely interested in considering franchise ownership do to prepare themselves? There are three areas that need to be addressed: Financial; Skill-set/Personality; and Lifestyle. We’ll address each of these today.

 

How much money one has to invest does a lot to eliminate certain franchise ‘concepts’ from a potential franchise buyer’s consideration. The total investment to get involved in a business is not just the amount of money needed for the franchise fee; it is that amount plus all the extra dollars it takes to actually open and operate a business until it reaches the ‘break even’ point. This is one reason why quality franchise brands require a franchise prospect to construct and submit a business plan/proforma as part of their application process. This way the franchisor can see that the prospect does indeed have a very good idea of what they are getting themselves into in the way of financial expectations – from both the expense and revenue viewpoints. All quality franchise brands require a franchise prospect to do this.

 

However, things don’t stop there when it comes to opening and operating a business – franchise, or otherwise. There is still the facet of personal expenses that must be taken into consideration. Just because a person has enough money to pay the franchise fee, open the doors, and run the business until it begins to show a profit, does not mean that their personal expenses are covered. Keep in mind that the vast majority of people who wish to become a franchisee must also have to pay rent/mortgage, car, health insurance, food, etc. These expenses keep coming in every month – whether the business can pay for them, or not. One should take all these things into consideration before they even attempt to head in the franchise direction. In this way, they can eliminate the franchises they simply cannot afford.

 

The second consideration deals with a person’s skills, abilities, and/or personality. We all have specific strengths and weaknesses when it comes to business, yet no one is good at everything. As an example, most people who are naturally outgoing and unafraid of rejection are usually very comfortable in the world of sales and marketing. Conversely, most of these ‘types’ are not essentially strong in operational and/or administrative roles that require a lot of detail and repetitive work. On the flip side, most ‘accountant’ types do not make good salespeople.

 

When considering a franchise, one must do some true self-examination and have a realistic self-concept of what the best franchise industry would be to fit their specific skill-set or individual personality. One must either avoid franchise opportunities that require a skill-set they do not possess, or they must resign themselves to the fact that they’ll need to hire employees to perform those specific tasks.

 

The final thing to consider when choosing a franchise is, lifestyle. Owning and operating a business is a lot of work, and in almost all instances a great many hours must be given up in order to build the company into a profitable one. Those long hours can be spent a myriad of different ways. Retail concepts are probably the most time-intensive businesses when it comes to being tied to a location, with restaurants being at the top of the list. Larger restaurant concepts that generate significant revenue allow for the hiring of managers, but will still require the owner to spend a great deal of their lives operating the business in some capacity. Some of the smaller ‘footprint’ franchise food concepts require owners to purchase a minimum of two to three locations in order to even make it necessary to hire other managers. These companies want and expect their franchise owners to work hard, but also know from experience that owners are only happy and fulfilled when they have a life outside the office. Multi-unit ownership allows them to have one!

 

Some people do not want to work nights or weekends, regardless of how much money they can make, while some don’t mind in the slightest. With some franchise concepts, the franchisee is more or less “buying” a job. They perform almost all of the tasks that are required to run the business. An example of this would be dog training; an industry where the owner and trainer are the same person.

 

Dog trainers do enjoy a very flexible schedule; they do not travel overnight, or work weekends unless they choose to. This is one example of a true “lifestyle” business. There are a great many service franchises that allow the person to work normal business hours and hire employees to do much of the work. Examples of these would be: commercial and residential cleaning, in-home senior care, and any business which caters to performing work in and around the home. In these types of businesses one builds the franchise, as opposed to a business where they “are” the business.

 

No one can tell another what kind of lifestyle they would like to have, and there are trade-offs for each type. This is a purely personal decision which should be made after a great deal of thought and deliberation.

 

To summarize: The three areas that are specific to finding the ‘right’ franchise for you are: financial, skill-set/personality, and lifestyle. If a person takes time to really examine themselves – where they are in life, what they want to do, what they’re essentially good at, and take into account the lifestyle they’d like to have – they can then give themselves a much better shot at finding a franchise opportunity that works for them; without having to waste a lot of time, money and effort for everyone involved.

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Comments

  1. Former Franchisee says:

    I bought a franchise and it was the biggest mistake of my life. I was great at the business but the franchisor is a crook. The model was specifically designed to keep the franchisee broke. Never buy a franchise of your objective is to make money.