Being the kind of person I am, I love looking at franchise opportunities. They always seem so attractive, a ready made business with a guaranteed income. This promise, just so long as I follow the plan, is almost irresistible in those moments when my confidence is low and I feel as if my own business is going nowhere and failing to deliver the returns I hope for.
Almost irresistible, because at the same time there’s something off-putting about them. It’s a bit like the way I feel about cyclists with a granny-gear on their bike. It’s too easy. A franchise isn’t a proper business because it’s executing someone else’s creativity whereas for me being a business owner is about turning my own “genius” into an income. Being a franchise owner is hardly different from being an employee, and being an employee is not running my own business. Being a franchise owner is running someone else’s business.
Of course this is largely nonsense but I can’t help my prejudice. I just don’t like following rules. A franchise is an excellent business proposition for people who can take responsibility for their own performance and want support with stuff like marketing and back office processes.
I first became aware of franchises as a teenager when my best friend’s dad bought a Kall Kwik shop in central London. Previously he’d been in the rag trade and his business went the way of all other small ladies-wear manufacturers in 1970’s UK. South.
I worked in Malcolm’s busy shop during the summer holidays and enjoyed it. There was great energy and I remember learning an important aspect of what it really means to run a business. You have to go out and sell. Malcolm spent most of his time building relationships with local businesses, not afraid to ask for an opportunity to supply their printing needs, and it was exciting to see those local businesses come in with orders that would be fulfilled, wrapped and then delivered. And at the same time I was aware that behind all this he was working for someone else as well as himself.
In spite of the number of franchise opportunities across just about every area of work, nearly all of them are wrong for you. There are many questions to ask and there are plenty of franchise advisors that will tell you what to look for, so I’ll limit my comments here to things that relate to the career decision involved because many people buy into the wrong franchise for the wrong reasons.
If you want to run your own business but don’t like selling, a franchise is probably not for you because when it comes down to it that’s the one thing the franchisor wants you to do. You bring the money in and give them a cut. Yes, there are some franchises that provide you with a head-start with one or two national accounts, and even a stream of leads, but it is not guaranteed work. You have to establish your own relationship with the local branches and convert those leads, and you still need to go out and find most of the work yourself. You are a sales rep for the brand. You’re also the ops and finance director.
That doesn’t mean it’s only for former business owners. Plenty of people choose a franchise having been employed for their entire career, because they have a desire to run their own business and want the safety net that an established model can provide.
If comfortable with selling then a franchise has much to offer a person who is unemployed and struggling to maintain an income towards the end of their career. An older person can often find an opportunity that is complementary to their background, contacts and knowledge. If they’ve been made redundant they may well have a pay-off that will cover at least some of the initial franchise fee, and, given the restricted employment opportunities for older people, I’d say it’s potentially a quicker way to be earning again than waiting for a job offer. If you do well you can often pay off the initial fee within the first 12 months.
What are your capabilities? Will the business be able to utilise those skills? My friend Mitchell runs a successful franchise because one of his key capabilities is attention to detail and that is central to doing this job well. It’s a tidy and attractive model that would suit me in terms of how I would like to work, but I wouldn’t be good at it, so it’s wrong for me. Another franchise I recently learned about is a chimney sweep business. I’m sure I’d enjoy the freedom of driving around and meeting people. I can do friendly, patient, customer-is-always-right stuff. I can charm the birds out of the trees, at least my mother’s friends always thought so anyway. One problem ‘though: I’m about as handy as a club-foot and the franchisor makes it clear that you need to be a competent DIYer for this business.
Which leads me to another of the big risks of buying a franchise. Franchises are often persuasively packaged. They want to attract as many enquiries as possible and while a good franchise will claim to assess your suitability before letting you buy in, they all want to sell to you in the end and only a few will refuse you if you put on a convincing show. There are plenty of examples out there of people failing with a perfectly sound franchise because they are not suited to it.
Find a franchise that allows you to perform tasks that you enjoy doing. If you like dealing with adults in a business setting then don’t buy a franchise for a children’s nursery. Seriously, so many people overlook this kind of consideration. Having said that, there are franchise opportunities that allow you to do sales and to run the business from an office while employing people to do the delivery work. If you’re going to follow this path make sure your drawings are justified because unless you are making a contribution you are going to be a cost centre, not a profit centre.
Find a franchise that meets your lifestyle needs and values. You need to be 100% committed to it and that means following the plan for success that they set out. One of the good things about a franchise is that it will usually give you a realistic expectation for income over 12, 24 and 36 months, and it will tell you if it’s a full or part-time prospect.
If you want to tempt yourself just spend an afternoon at one of the regular franchise shows that are held. If you’re anything like me you’ll be like a kid in a toyshop, imagining yourself making money hand over fist for doing something that looks so easy. Then do a rigorous and honest reality check because most of them will not be for you…but maybe one or two will.
Meanwhile, I’ll keep looking. Who knows, maybe one day I’ll find the ideal franchise? If you see it let me know. It costs next to nothing, requires no skill or effort, is highly stimulating and the returns are astronomical.
My next low cost half day Interview Preparation workshop is on August 9th. It will help you to get a job offer quicker. Details here