Why
Should I Buy a Franchise?
I have been
around franchises and franchising for over 15 years and have
never liked the question above. You buy a car, a TV,
a new couch, or clothes for your children. You invest
in a franchise. Here are some examples of
the investments you will make:
- You invest
in a brand name.
- You invest
in a proven business model.
- You invest
in a network of support.
- You invest
your time, energy and money.
- You invest
in yourself.
You invest in a brand
name.
The advantages
of a brand name vary from franchise to franchise. If
you are getting involved in a franchise opportunity that is
still fairly new, the name will probably have less value than
that of a franchise that already has hundreds or thousands
of locations. A franchise with a well-known name offers
many benefits. Perhaps the most important is that you
will have a built-in customer base before you even open your
doors. Consumers feel much more comfortable dealing with
companies with which they are familiar.
You invest
in a proven business model.
In my opinion,
this is the most important reason to consider a franchise. If
you are reading this article, you should already have an entrepreneurial
mindset. Perhaps you have owned businesses in the past? Perhaps
you are looking to start a new business? Perhaps you
are weighing the benefits of investing in a franchise versus
going it alone? Having both owned a franchise and started
my own business, I can tell you that the former had many benefits
over the latter.
In addition
to having owned businesses, I also spent a few years working
for the largest computer training company in the world, which
was built on a franchise model. I can still recite the “five
rules”
and “eight absolutes” that were the basis for the
sales model. As a Sales Manager, I often referred back
to the rules and absolutes for guidance in resolving conflicts
and increasing revenues.
When it came
to sales, courseware and content, we received a tremendous
amount of training and support from the corporate headquarters. There
was a structure in place that allowed us to pursue national
business from our local office and we often delivered instruction
that was sold out of another franchised office. This
model benefited everyone involved in that we all shared in
the revenue.
The selling location, the delivery location and corporate headquarters
all received a piece of the pie. Because we had over 250
national and international locations, we had a huge advantage
over our competitors and eventually put most of them out of business. This
was the franchise model at its best.
You invest
in a network of support.
In addition
to those listed above, there are many other ways in which a
franchisor can help your business become a success. Even
before you are up and running, most franchise companies are
ready and willing to assist. They can provide you with
in house financing, or help you obtain third party financing. Many
will assist you in selecting the site for your store, should
you go the brick and mortar route. This is a great benefit
in that most of us have little to no experience in such matters. They
may conduct a traffic count to see how much exposure a location
may get and can also help you negotiate a lease.
Once you
are ready to open the doors, they will often be there for the “Grand
Opening,” providing guidance and support. They
may even spend a week or two at your location, continuing the
training process and improving your odds of success. Once
you are up and running, they will be there to provide continued
support, as your success is in both of your interest.
In addition
to the corporate headquarters, you should be able to rely on
other franchisees for guidance and assistance. Remember,
they have already been in your shoes and will be able to help
you based on their own experiences.
By taking
advantage of the support structure a franchise offers, you
can then focus your time, energy and money on where it will
do the most good.
You invest
your time, energy and money.
Starting
a business, any business, involves a significant amount of
risk.
You will invest a lot of your time and should expect to have
little spare time until your business is well established. I
was once asked by a colleague why I was earning three times that
of he and his friends, who had all attended top-ranked schools
and who were all highly paid professionals. I simply explained
that it was because I was working the equivalent of three full-time
jobs!
I am a firm believer that you will take out what you put in.
Invest your time, energy and money wisely to ensure your success.
You invest
in yourself.
While a certain
amount of anxiety is normal when starting a business, you should
be highly confident in yourself, your drive, and your abilities
before finalizing your decision.
You will
surely face many obstacles along the road to success and must
have the strength to overcome them. The computer training
franchisee that I had worked for had made a major investment
in the business, strictly followed the franchisor’s model
and still faced the possibility of failure in his first year. He
wound up moving out of his home and into an off-season beach
rental just to survive.
He once told me, “We are all just one step away from homeless.” I
keep this in mind everyday I wake up and it drives me to work
harder and smarter. The turmoil he faced simply motivated
him.
He spent 16 hours per day at the office, working to find opportunities
and to drive sales. His efforts have been rewarded in that
he now runs a multi-million dollar a year business and is financially
set for the rest of his life!
You should
spend a significant amount of time educating yourself about
the opportunity that you are about to pursue. Do research. Crunch
the numbers. Overestimate expenses and underestimate
sales.
Reach out to existing franchisees (don’t be afraid to ask
questions, as most are willing to share their experiences). Not
until you truly believe you will succeed, should you make that
jump. But once you do, go all out!
Josh
Prewitt is the President
of Your Own Franchise Inc. He owns and operates a
website, www.yourownfranchise.com,
which provides information about franchises and franchise opportunities. He
can be reached at Josh@yourownfranchise.com.
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