If you’ve ever thought about being a franchisee, you know that there are pros and cons. If you decide to pursue it, ask yourself the questions inherent in both. Learn all you can about the parent company, the franchise opportunity and what you can expect as a franchisee. By all means, talk to other franchisees!
The NFIB offers some insight into the advantages and disadvantages. Some say it’s the best of both worlds, because you’re essentially running a business, but you also have support of a bigger company and well-known brand around you. Others think these two cancel each other out, meaning you really don’t get the benefits of either.
But the truth is, the same aspects of a franchise can be both pluses and minuses. As a franchisee, you do have a certain degree of autonomy. But you’re also not going it totally alone. You don’t have to build your brand; it’s already recognizable and (hopefully) thriving. And you get the benefit of advertising support that keeps you visible and drives traffic. You have P& L responsibility but proven business strategies and practices for hitting your goals.
Here’s another positive: By the time you’re incorporating a product or service or practice into your operation, it’s been vetted and refined. You won’t have to spin your wheels or go through a trial-and-error process. On the other hand, this wasn’t “yours.”
As a franchisee, you’ll also have purchasing power in that you can leverage the muscle of the corporation. And you’ll have automatic access to expertise you wouldn’t otherwise, to expand your knowledge and hone your management and financial skills.
But this is just one side of the franchise coin. Which is why you’ll hear repeatedly: Proceed with caution. While a franchisee offers countless benefits, including career satisfaction and financial success, it’s also possible to turn positives over and see potential negatives.
For example, support is good. But it’s also seen as control. Strict brand and operational standards are enforced and can feel restrictive. What about that exciting new idea you want to try? Maybe, eventually, but not until it’s been analyzed and tested by the company.
Is franchising right for you? First and foremost, know yourself. Know why you want your own show. If you’re fiercely independent, a franchise may not be for you. But if you like having some structure and a safety net, a franchise could be a good move.
It helps, too, to know what you want to achieve and what kind of environment allows you to perform at your best. But still approach a franchise opportunity with an open mind and a critical eye. Read everything, talk to other franchisees, and consult with an attorney. Different organizations work differently, but there will always be fees, advertising and otherwise, that you’ll be paying into the corporation. Understand what’s guaranteed and what’s not; what is expected of you, what is required and what you can expect from the company. Make sure your expectations are realistic.
Small business owners get satisfaction from the personal and local aspects of their businesses, and from connecting with customers in ways big companies simply cannot. But interestingly, franchisees often say similar things. Maybe you can have the best of both worlds.
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