As we’re back in full swing after a long holiday weekend, I’ll pick up where we left off last week on revisiting some previously shared information about what should be done when exploring franchise opportunities.
Actually, I’m going to take it a step further and share an article that includes information from two franchise professionals that I respect very much, Joel Libava and Rick Grossmann. In the following article, you’ll find links to some of their great advice. I highly suggest if you’re exploring franchise opportunities, or even have an inkling of interest in franchising, I suggest following both and heeding their very sound advice.
Do Your Homework BEFORE Buying a Franchise!
The dream of owning your own business is alive and well for most Americans. The only problem is that many people don’t know where to start on the journey to becoming self-sufficient. There are a million different options, but first and foremost each potential entrepreneur must decide if he or she wants to become a franchisee or start a business independently.
Each route has its benefits; therefore, it’s critical to take the time to consider both options before making a decision. What it initially comes down to is asking yourself the following questions:
1. Do you understand every aspect of the business, or do you thrive in one area?
When starting a business from scratch, entrepreneurs should be well versed in every single element of the enterprise. They need to create systems and procedures and test whether these work for that particular business. This process of ironing out the details deters some from choosing to own an independent business but excites and challenges others.
Conversely someone who buys a franchise knows that someone else has already done the “dirty work” and found the most effective systems for that particular business. A franchisee must simply thrive at correctly running the system while adding their own personal management touch.
2. Are you an expert at making a name for yourself or would you like to be associated with an already strong brand?
When purchasing a franchise, you are also inheriting the reputation of that brand. For example, if you open your own Dunkin’ Donuts shop, you will encounter customers who already recognize the pink and orange logo. Many people will know whether they like the brand and will expect speedy service providing them doughnuts and steaming hot coffee.
On the other hand, those starting a business from scratch have a chance to create a unique brand identity. But consumer trust and awareness don’t come easily; they need to be earned through time, consistency and excellence.
3. Are you the kind of person who likes to go it alone or do you appreciate a sense of community?
Owning a business — whether it’s a franchise or not — can be risky. Some people prefer to be self-reliant and want to manage potential problems using past experiences and premonitions as guides. An entrepreneur must solve the issues that arise.
Others prefer enlisting the support and help of others to ensure that their business runs smoothly. A franchisee has many built-in allies, including the franchisor and other franchisees within the system.
The most important factor for success is making sure that problems are identified, and steps are taken in the right direction.
Is Owning a Franchise in Your Future?
For many individuals that explore franchising as the next step in their career, as a way to control their own destiny or as a way to create a family business understanding the process can be quite overwhelming. Below are several articles by franchise experts I shared on my blog in 2018.
Still relevant today, I believe it will help interested parties diligently navigate the process to help create a playing field that is best for them as opposed to seeing themselves aimlessly tiptoe through a minefield consisting of franchising’s good, bad and ugly.
If you’re thinking of becoming a franchisee, how should you prepare yourself?
Buying a franchise can be a great move for a would-be entrepreneur who doesn’t want to create a new business from scratch. In theory, franchisees acquire a model that already works on every level, from branding to pricing to marketing. A ready clientele eagerly spends on Dunkin’ Donuts, McDonald’s and 7-11. The market has tested the best recipes for glazed crullers, Egg McMuffins and the right combo of energy drinks to stock next to the register.
But making a go as a successful franchisee can be a lot more complicated than simply finding an appealing brand and plunking down some cash. For a taste of what can go wrong, see Forbes’ piece about the past problems at sandwich franchise Quiznos, which paid $206 million to settle a suit brought by franchisees who claimed the chain had oversold its markets and excessively marked up supplies. Read more
How to Buy a Franchise
Contrary to popular belief, the process of buying a franchise isn’t really difficult-but it is a process. I’ve found, (through working one-on-one with thousands of potential franchise owners) that it’s really important to tackle a major life decision like the purchase of a franchise business-or any type of business, in a very methodical way. (Even if you’re not a methodical person!)
But you need to realize that buying a franchise is a big deal. It could potentially be life changing. That’s what you want, isn’t it?
After all, you probably wouldn’t be reading this if you wanted to just go out and find a new job -or keep the one you have.
With that in mind, kick off your shoes and grab your favorite beverage. In this article, Joel Libava, The Franchise King shows exactly how to buy a franchise. Read more
Owning a Franchise Business is Good for Your Family
Many entrepreneurs choose to become small-business owners with an exit strategy of turning over the business to their children one day — a strategy that takes on more importance in an era where young people are struggling to find gainful employment.
Children who begin working in the family business at a young age will typically start an ascension into management after college, with an eye on purchasing some or all of the family business as their parents head into retirement. Often, the parents will retain a percentage of the business as a revenue stream in retirement, adding an extra level of responsibility for the child as a steward of their parents’ nest egg.
Even if they don’t stay in the family business, studies show that parental entrepreneurship increases the probability of children’s entrepreneurship by about 60%. Children of entrepreneurial parents have already experienced many of the ebbs and flows of small-business ownership, which helps to mitigate their fears and raise their risk tolerance. Read more
Learning About Franchising
During research for Franchise Bible, 8th Edition, author, Rick Grossman found that the franchise industry had changed in many ways over the years. Technology has had the biggest impact by modifying buying behaviors. Not too many years ago, franchise buyers would find an opportunity in Entrepreneur magazine or by attending a franchise expo in-person.
They would then go through the franchisor’s respective step-by-step process to qualify, purchase and launch their franchises. But today, buyers can find a plethora of information online about nearly any franchise they want to learn about. This has leveled the playing field for new innovative companies to compete favorably with the “big boys” in the marketplace. Read more
Have a great day. Make it happen. Make it count!
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