When you buy into a franchise you are buying into a system, a level of business support, a brand but most of all you are buying into an opportunity.
However, what you are not buying into is guaranteed success.
You, the franchisee, have an obligation to follow the system, to work hard, to be persistent and to have ambition – if not then you may just as easily be heading for failure.
So, whilst there is a host of due diligence you should do on the franchisors, on their systems, on their level of support etc the most important due diligence will be on yourself.
Ask yourself whether you have the personality to follow a proven business system?
Do you have the capacity to work hard?
Have you got real ambition and passion to run your own business?
Will you work with the franchisor to grow your business or will you soon think you know better?
Are you well organised? Are you able to multi-task?
Do you have patience, resilience and most of all a sense of humour?
Most franchisors will tell you that they can train you in all the key aspects of running their business and for the most part I think that is true.
However, you still have to have some basic business acumen – even if you’ve had no real experience – particularly in the area of ‘getting businesses.
No matter whether you are running a business to business franchise like Recognition Express or a retail business like The ZipYard or even a children’s operation such as ComputerXplorers you need some aptitude for generating business or at least some aptitude for coping with the stress and rejection rampant in all selling situations.
The franchisor will provide training both in how to sell and most importantly how to promote their products and services and certainly where my brands are concerned (and I suggest the same applies for most franchise brands) the most important elements to selling are:
- Confidence (in yourself and in your brand)
- Personality (ability to speak to people at all levels and in any group size)
- Discipline (willingness to work to a process – selling is a process NOT an art!)
So if you think you have what it takes in the areas of selling, hard work and tenacity then the next thing you need to consider is ‘what is your job?’.
By buying a franchise you are not automatically an entrepreneur (in fact it is likely that by becoming a franchisee you are certainly NOT AN ENTREPRENEUR).
So what are you?
Well you are a managing director and the tea boy; sales director and rep; marketing manager and delivery driver; business development manager and receptionist!
You are whatever you need to be – and you love it because if you don’t think you will love it then don’t do it.
Do you have self-discipline? Can you work with other people? Are you capable of asking and taking advice?
If you have what it takes then your answers need to be yes, yes, yes!
You will have a relationship with the franchisor
We know what you get out of the deal but how does the franchisor benefit?
Well the franchisee
- Pays a licence fee for the territory
- Works his/her initiative in generating business
- Gives customers a highly motivated personal service
- Diligently cost manages the business
- Builds the value of the brand
- Pays a royalty on turnover the franchisee has generated!!
Sounds reasonable to me!!
But ‘them’s the rules’ and when you consider going into a franchise relationship you must be honest in your self-analysis and ask the question – ‘will you eventually come to resent the franchisor and the payments you are making?’
Frankly, if the franchisor is providing a solid and regularly updated business system, plus good business support in the key areas of sales, marketing, training, procurement (if relevant), finance, operations etc then you should be delighted with the arrangement.
Remember also that it is your job to implement the system NOT the franchisors to implement it on your behalf.
You may choose not to use the tools, not to implement the system, not to market your business – that is your right BUT it doesn’t give you the right not to pay your royalties!
So, the question is do you have what it takes to have a productive and long lasting relationship with the franchisor?
I mentioned ‘multi-tasking’ earlier in the piece but I think more relevant is the continuing nature that is running your own business.
Never make the mistake that this is a job – IT IS NOT!
You are not a manager – you will not be working 9-5 – you will be dealing with all the problems (you won’t be able to delegate up) – you won’t be able to switch off after ‘closing’ – there will still be paperwork to do, planning for tomorrow, maybe suppliers to be contacted.
The business is your responsibility – so do you have the mentality, stamina, resilience and desire to grasp this responsibility with both hands?
If so then YOU DO HAVE WHAT IT TAKES