Franchising is a great way to start a business without having to start from scratch. An established and reputable franchisor will help you with everything from operations, legal, and finance to marketing, sales, and human resources. Since many aspects of running a business might be outside of your expertise, franchising makes it a lot easier to become a business owner.
Franchising is a proven business model, but not all franchisors are equal. When you buy a franchise and become part of a well-established brand, you’ll immediately benefit from many processes and systems of the franchise that have been tested and optimized. You’ll also benefit from instant brand recognition among consumers.
With that said, franchising isn’t for everyone. There are many great benefits to becoming a franchise owner, but there are also some aspects of the franchise business model that you won’t like. Ask yourself the following questions to decide if franchising is the right business choice for you.
1. Do You Want Ongoing Help and Support?
When you buy a franchise, you get help from the first day – whether you want it or not. That’s because it’s in the franchisor’s best interests to ensure you succeed. They’ve built processes and systems that they know work, and you’ll be expected to use them.
You should work with a franchise that offers extensive training starting from before your business opens its doors to customers and through the number of years indicated in your franchise agreement. In addition, make sure you can get support when you need it by phone or email.
2. Would You Rather Rely on Someone Else to Make Many of Your Business Decisions?
As a franchise owner, you don’t have to make a lot of decisions related to your business. In fact, all of the strategic decisions are made by the franchisor, which includes everything from marketing to finance and everything in between.
Knowing you don’t have to make every decision can take a lot of stress off of you. Yes, you’ll make daily decisions to run your franchise, but the big decisions are made by the franchisor. However, if you like to do things your way, franchising is probably not the right choice for you.
3. Do You Like the Idea of Having Access to a Support Network?
When you start a new business, you’ll have a lot of questions and challenges, and you’ll need help. Many business owners join a network of other entrepreneurs and business experts to find that help. When you buy a franchise, you’re immediately a member of the franchisee community for that franchisor.
If you thrive on networking, franchising could be a good fit for you. If so, pick a franchise that gives you easy ways to communicate with other franchisees on an ongoing basis.
4. Do You Want Help Getting Customer Leads into Your Sales Pipeline?
One of the biggest challenges for any business owner is getting new customers. As a franchisee, you’ll pay an amount each month (identified in your franchise agreement) that will be used toward marketing expenses. You might also be required to purchase certain signage and marketing materials.
In other words, a lot of the work is done for you when you own a franchise. You just have to implement what the franchisor already created. It’s also likely that the franchisor will train you on how to advertise and sell your products or services. In fact, the advertising messages and sales process you use might be completely dictated by the franchisor.
5. Would You Like Help Securing Financing for Your New Business?
Banks, financial companies, and investors are more likely to loan money to a person who is purchasing a well-known, proven franchise than someone who is starting a brand new business with no help and an inadequate business plan. If you want help securing financing in order to open your business, choose a franchise that offers finance training and support.
Is Franchising Right for You?
Think about your answers to the five questions discussed above. If you answered yes to one or more of the questions, then you should consider becoming a franchisee where you can own a business and get the support you need to be successful all while operating under a brand that people already know and trust. The key to success is doing your research in advance and choosing a reputable franchise with a track record of franchisee success.
On the other hand, if you answered no to one of more of the questions above, then think long and hard about whether or not franchising is for you. If you don’t like people telling you want to do, then franchising isn’t for you, and if you don’t need help to get your business up and running, there may not be a valid reason to hand over a percentage of your earnings every month to the franchisor.