The decision to buy a franchise is not one to be taken lightly. Justin Livingston makes the case for a business model that’s becoming increasingly popular
The choice to go into business for yourself is one that is often discussed, frequently thought about but rarely taken up. Deciding to take the leap and leave the comfort and stability of a corporate job is flat out terrifying. Many who ride the fence of working in a job vs starting a business grapple with the desire for freedom, time, financial success and control weighed against the comfort and “safety” of a 9 to 5. The reality is simple: most will work our whole careers making someone else money.
Beginning a business is daunting. Navigating where to begin. How to avoid becoming a scary failure statistic. There are so many options and so many ways to approach it.
Franchising: A tried and true road map to successful business ownership
Successful franchise opportunities are based on years of operational experience chalked full of mistakes and successes. Processes and “the recipe” are built from the execution of ideas and learning from the strategies or tactics that didn’t work. Mistakes in business can be costly and some might cost you everything. When you join a franchise system, you are buying the processes that have been perfected by those who have already made the mistakes and came out on the other side – helping prevent you from making them.
Due diligence
The key to finding success with a franchise is joining the franchise system that is right for you. Many factors should go into this decision. As a potential buyer, you want to find a concept that has the expertise and support to give you the best possible recipe, meanwhile is also a good cultural fit and brand you believe in. The due diligence process can be overwhelming. Take the time to find something you are passionate about – that you’re going to enjoy doing and can bring you not only financial but personal success and satisfaction.
Self-reflection
Self-reflection and an honest look at your level of preparedness are key before searching for a franchise business. Consider the following: Do you have the capital to make the investment and maintain a healthy nest egg for emergencies? Do you have the time and energy to fully commit to the success of your business by following the proven process of a franchise? What’s your passion? What does your future like look like? What work-life balance do you seek? What are your short- and long-term goals?
Proof of concept
There is a wide choice of franchises spanning several different industries and types of business. Though each potential buyer’s criteria differs, the basis that makes a franchise system successful is consistent. No matter the industry, the success of a franchise concept can most easily be seen in the proof of concept or history. As previously discussed, proven processes are earned by trial & error and years of perfecting what works and, more importantly, what works best. Does the franchisor have a clear understanding of the industry as evidenced by its own operation? Does the concept have enough faith in its programs and processes to operate the business themselves? What does the franchisor do that sets it apart from the competition? Strong systems started as strong concepts where the evolution of the brand has allowed the franchisor to live through the costly mistakes of a start-up business so you, the franchisee, do not have to. This is the core difference of buying into a franchise opposed to starting from scratch. Like any decision, setting proper expectations is key.
Make no mistake, starting a business is not for the faint of heart. Even with the best map, the journey is full of obstacles that you and your franchisor will overcome together.
Existing franchisee insight
Another distinct advantage of partnering with a franchise is the ability to receive feedback from those who have gone before you. Assuming you are not franchisee number one, one of the best ways to gain deeper insight into a day in the life as a franchisee is talking to people who are already living that journey; a luxury you wouldn’t have had you gone into entrepreneurship alone.
There is much to be gained from conversations with existing franchisees, including a relationship with the franchisor, support and training from the corporate team, and more importantly: would they do it again? In this phase of the due diligence process, be sure to keep in mind that no franchise system is perfect for everyone. You do not want to make a snap judgement from talking to one franchisee, so be sure to connect with a variety of existing owners. Other key questions to ask are: What are your likes, dislikes? Do you feel you have adequate resources and support from the franchisor? What are day-to-day operations like?
Franchisor resources and support
What support is offered beyond the initial training? The answer to this question is at the heart of the big, overarching question, to franchise or not to franchise? The franchisor-franchisee relationship is much like a marriage – it’s a commitment from both parties to be there for one another throughout the journey. The relationship begins at the signing of the franchise agreement and the support continues through the life of the relationship. As a franchisee, you can rely on advice on how to overcome hurdles as they arise – from simple problems to more complex adjustments based on economic peaks and valleys. Beyond the brand marks and initial set-up of the business, it’s the ongoing support that will make the most impact on your long-term success.
Pre-opening visibility
The final topic to consider when weighing options is the history and know-how of a franchise relationship regarding the start-up of your business. There will always be ranges in the cost to start your business. For your planning purposes as well as securing funding, a franchise will be able to show you history of the costs for all their offerings, so you are armed with a budget that more accurately reflects reality. This allows for a much more reliable financial model and less stressful start by removing many of the unknowns.
Regardless of what you may choose, starting a business is an exciting adventure. No matter your goals, business ownership is something special and takes courage, planning, hard work, and a little luck. Starting with a franchise can mitigate much of the risk and will also plug you into a system and network of support by the franchisor and other franchisees walking the same path. Find the right recipe, follow with care, and enjoy the results.
ABOUT THE AUTHOR
Justin Livingston has worked in franchising for more than a decade. As owner and founder of Franchise Transformations, Justin leads a team that brings a strong history of successful franchise development and experience to those trying to expand and take their business to the next level with franchising.
