If you’re looking for business opportunities, franchising can be a truly great idea. It costs money upfront, but many franchises are highly profitable businesses. Others, however, aren’t so good. Some, in fact, are terrible.
Defining a franchise
A franchise is a legal arrangement with a supplier to operate a sales outlet for either goods or services. A franchise agreement is in effect a contract. You need to be clear about your obligations, and need to check your responsibilities under your agreement thoroughly. Do not enter into a franchise agreement without a clear understanding of all aspects of the arrangement.
The good franchises are money mines. They’re excellent business propositions. The weaker franchises can be very difficult, and the truly lousy franchises can be unproductive, and just not worth it. You need business skills, the willingness to work for success, and good judgment to select the right franchise.
You and your franchise- A relationship inventory
Franchises do train franchisees, and they also provide support when you need it- That said; your core skills and knowledge need to be in the ballpark to successfully operate a franchise.
Matching your skills to franchises:
- Business management: A franchise owner is first and foremost a business manager. If you have basic business management skills and accounts experience, you’re likely to be ok managing any kind of franchise.
- Industry expertise: You don’t need a PhD in hamburgers to manage a McDonalds. You do, however, need to know the retail food business, including hygiene and customer service, etc. There are a range of skills and a pretty strong knowledge based which are required to run a fast food outlet. If you’re a former restaurant owner, or a current one, you’re in the market.
- Compatibility with the work: Not everyone is cut out to run a franchise, whether it’s selling fast food or mowing lawns. If you’re a natural hard worker, you’ll be fine. If you have preferences, allergies, or other issues, or the hours of work bother you, you need to be realistic about being able to do the work.
(Personal experience: I found a great franchise training scheme with a bakery franchise. It was by far the best business deal on the market, much better than the other franchise offers, well established brand, good business proposition from start to finish. The franchise also offered a “buy as you go” option for trainees. The problem wasn’t the business deal; it was having to get up at 1AM and work through till 8AM to bake the day’s stock. I like my 72 hours’ sleep a day, and that was never going to happen.)
Exploring franchise opportunities
The process of finding a good franchise is also a test of your business skills. If you research the opportunities, you’ll find a truly bewildering range of choices of franchises. You’ll also note that some franchise offers are much better than others.
You’ll also notice another thing- Some of the franchise offers cost a lot of money, some are free, and some are “sales” jobs. Some are fabulous, some are ridiculous. These franchises are all very different propositions. The “franchise” element may include being part of a franchise you’ve never heard of, selling products or services. The businesses may be in crowded shopping malls, struggling to compete.
Step 1: Select at least 3 franchises you’re interested in.
Step 2: Contact a company rep and talk about the franchise terms, conditions, cost and any other relevant matters. This will cross off a couple from your list in the process.
Step 3. Check out in particular:
- Franchise support
- Terms of business
- Any special skills requirements
- Any compliance issues regarding business laws
You now have a pretty good view of your options. The best franchises provide great backup, and are very easy to talk to about business issues. The worst give you nothing but “This is great!” sales pitches, and little or no substantive information.
(The good franchises really do deliver expertise on tap. That’s one of the reasons they’re so successful.)
Are you ready?
- Are you happy with the information you have, all clear and understood?
- No reservations about the type of work or skills required?
- No doubts about spending money upfront, sure you’ll do well?
- Happy with the franchise’s support and training services?
- Has your lawyer given the ok to the franchise agreement?
Welcome to your dream franchise! Expect to have a ball. If you have done everything right you will.