I know, this online magazine is a key resource for anyone seriously interested in buying a franchise and we all know that franchise magazines are stocked with stories and columns that motivate interested parties and help them learn how to become an owner. I have written many of them myself!
Well, believe it or not the franchise professionals I know and respect tend to be more interested in telling you why you should not own a franchise (or what you need to do to be ready to eventually be an owner) than in trying to talk you into buying one.
Here are some of the reasons franchise investigations files should get closed.
Reason Number 1 – You are TOO entrepreneurial
Success in franchising with a proven brand, almost without fail, depends on the new franchisee following the proven system they just bought into. Franchisors often spend a substantial putting their systems together, building technology, testing training and marketing programs. I can think of nothing more senseless than buying into a system you won’t feel comfortable following.
Do you see yourself as a “team” player, someone that will look to get and give input or support? Are you willing and able to follow a system created by someone else, holding back suggesting ways to change the system until you understand the one you started with?
If you are unable to follow someone else’s proven system for success, then you may not be a good match for franchising.
Reason Number 2 – You can’t identify what you are really passionate about
The topic of turning your passion into your business is an interesting one. All too often people focus on a product they like, not the activities that will require their focus for the next 10+ years. When we begin working with a new candidate this conversation about their passions can be short, if they can express what makes them happy with work, or long if we need to go map out real work based passions.
Keep in mind that the product you work with may get to be pretty routine, the tasks you do and the people you talk to will be ever changing in nature. Don’t put yourself in the position of selling a product you like if you hate the activity of selling, or managing a big team if you don’t like managing people.
Reason Number 3 – You are under funded
Your total start-up costs will be whatever the business expenses to get your business spun up plus your personal household expenses. When we work with our franchise candidates we walk them through this thought process and have them add their personal expenses to the startup costs provided by the franchisor. Better to overestimate than to come up short.
Put together a complete picture of all projected costs and how you will fund them. Cash is great but most candidates use some sort of funding solution to conserve cash and make sure they have a reserve.
Reason Number 4 – You prefer that someone else makes all the important decisions
While the system in the franchise you are looking at may be pretty developed there are still a very identifiable set of skills that a franchisor will look for. They want to see some level of management and sales acumen, but along with that they will be looking to see if you are going to be comfortable making the level of business decision that will be required of any owner in their business.
Think about how you operate in business. Are you comfortable making key decision on how money is spent, hiring, firing and other important areas of business operations? As a franchise owner you will be making key decisions on a daily basis.
Reason Number 5 – You don’t have management or sales skills
Nearly all franchises will require some level of management skill, some also require that the franchisee can sell. If you have been in a professional role where you have not developed either of these skill sets then you may want to consider finding a role as an employee where you can develop them and transition to business ownership when you feel you are ready to put those newly developed skills to work.
Corporate America has a great place in franchise and business ownership, jobs can be apprenticeship programs of sorts for becoming an owner. As an employee you do the work and get a paycheck, but the employer keeps the valuable business you just built in trade for taking the risk. Once you have the skill set you need there is inherently less risk than before you built it.
There are 5 key areas any candidate should give some thought to before buying a franchise. The process of finding and evaluating franchises is not a race you should take enough time to make sure the match is good. If territory is limited and you may lose the area or location you want don’t get in a rush and skip verifying things that you need to make sure are in place. There is always more territory elsewhere, and if not there is always another brand.
The franchise search performed by any candidate is unique to them, we customize searches for our candidates just as you should for yourself. Pay close attention to what the franchisor says is required to be successful in their business, write it down so you don’t forget. When you talk to their most successful franchisees compare that list to the people you talk to and see if it holds true. Then, make sure you match the list too.
Are there reasons to forego or delay your dream of owning a franchise? Sure, but many of the candidates we get calls from have all the pieces already. We just show them how to arrange what they bring to the table and get them in front of companies that are a perfect match for their skills, strengths, likes, goals and how they prefer to work.
What will your success story be?
George Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both start-up and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution. Contact the Franchising USA Expert George’s Hotline 703-424-2980.