Franchising involves a parent company that allows entrepreneurs to use its name and advertising in their own business to make money. The parent company benefits through charging the entrepreneur a fee or set rate. But in return the franchisee gets a recognized brand, and usually support for materials, advertising, and things like bookkeeping and taxes.
Anywhere you go in America, you’ll most likely find franchised businesses. Part of the reason franchising is so successful is the business relationship; ambitious people from all over the country working under one brand accomplish far more than a single company could growing on its own. Buying power, marketing, and sharing ideas help to form an efficient structure for producing revenue.
There are many franchises available today in a wide number of industries and across a broad price range. Before you join a franchise, you need to decide whether being a franchise business owner is right for you.
A little self-analysis should be done before laying down the money for a franchise. Franchise ownership is not a guarantee of success and certainly isn’t an easy way to get by. The parent company will generally offer training and support, and even provide clients, but you still have to do all the actual work, especially at first when you’re still mastering the trade. Even if you reach a point where you can hire employees, you’ve still got plenty of concerns with paperwork, supervision, and angry customers.
You also have to be sure you like the work. You won’t last long at a trade you don’t like. Some people might start a business like carpet cleaning because it sounds simple, only to find a few months in that they don’t really care for it. If you buy a franchise, you can expect to work several years before you make a real success of it. Look at all the available opportunities and try to pick something that fits your tastes and experience so that you’ll be comfortable doing the work.
Stick to the plan
Franchises come with a business plan behind them which the parent company expects you to follow. They may dictate how you dress, what you drive, the tools and materials you use, and how you advertise. This is to ensure that their franchisees live up to the company brand and provide a certain level of service. Their procedures have been developed over years of experience into something that works. If you have trouble following direction or consider yourself a “maverick”, franchising might be a bad fit.
Dealing with people
Even if you’re a hard worker, you still have to be able to communicate, with the franchise company and especially with clients. A positive attitude and friendly tone and smile are essential to providing a good customer experience. Interpersonal skills and the ability to listen and empathize are important factors in getting the job done to the satisfaction of all concerned.
Be sure you can afford the franchise. If you spend your life’s savings, or have to finance it, you’ll be in big trouble if it turns out you can’t make money at it. While the parent company can provide a good idea of the costs and payment options involved, there are likely to be setbacks or out-of-pocket expenses. It may take some time before you’re able to run your business profitably, so be sure it’s not an all-or-nothing risk.
Before you commit with a signature, be certain you’re familiar with and understand both the agreement and the company. Even companies that seem like a great opportunity may not have sufficient experience or adequate resources to weather a down-turn in the economy. Be sure you understand everything about the terms, costs, and obligations under the franchise model, as well as the consequences if you don’t live up to them.
Before buying a franchise, ask yourself how the franchiser will benefit you in return for your investment. Will you make enough money? Will they provide adequate training and support? Do you like the people at the parent company you’ll be dealing with?
If you can answer all of these questions positively, than owning a franchise could be a great move for you.