For success-focused people, buying into a thriving franchise with brand recognition, a tried and tested playbook and established business systems is a no-brainer.
However, during my years as a franchise consultant and a franchisee, I’ve learned a few things about the kind of people who make good franchisees. If you identify with more than a few of the following, franchising may not be the best option for you unless you are willing to make some changes:
You don’t have enough capital
Although the cost of a franchise varies from several thousand to millions, the purchase price is just one of the things you need to consider. You also need working capital to pay rent and employees, purchase inventory and fund your sales and marketing.
I encourage all prospective franchise candidates to draw up a robust business plan to ensure they can fund the business.
You need a paycheck in 30 days
While revenue may begin to stream in on the day you open the doors to your business, don’t count on a salary from the get-go. Opening a business is an investment, and you will have start-up costs. Your breakeven point depends on how hungry you are for success.
You haven’t got well-rounded business skills
Successful franchisees understand how business works. They know how to lead a team, manage employees and operate within a budget.
You don’t need an MBA, but you do need to have an open mind and the T-shaped skills to get your head around a variety of business disciplines from HR to sales to finance and more.
People with T-shaped skills have subject matter expertise in their field and a working knowledge of several others. For example, a person may be a qualified CPA, but they also know how to run sales, customer service and HR. The ability to work across disciplines is a huge advantage for anyone who goes into business for themselves.
You want passive income
Many franchise brands empower owners to be semi-involved, but I don’t know of any that will run entirely on autopilot. At the very least, as the only executive officer, you’ll need to spend a few hours a week overseeing your business and keeping an eye on your emails. If problems occur, you may have to step in and take charge.
You’ve got an employee mindset
As an employee, you have to follow instructions, stick to your lane, protect your resources and fight to get your accomplishments recognized. After all, promotions, pay raises and visibility are finite. This kind of scarcity mindset will limit your chances of success as a business owner. Successful entrepreneurs are optimistic, see the glass as half full and have an unshakeable belief in the win-win.
Your spouse isn’t onboard
Keeping your spouse in the dark about your plans to buy a franchise is a big mistake. If your other half doesn’t understand why you want to be a business owner, isn’t bought into the risks and potential benefits or is resistant to change, they could call a halt to everything. Involving your spouse in your research, decision making and dreams at every step is the best way to ensure their support.
My best advice to anyone considering franchising is to work with a franchise consultant interested in your success. Someone who will help you explore your options. For example, I’ve helped my candidates find a business that won’t over-stress their available funds and resources, and I’ve advised others to take a job in a small business or invest in training to develop their T-shape skills. I’ve also helped candidates who weren’t a good fit for franchising find an alternative path to living the life they want.
David Busker is the Founder of FranchiseVision and a senior consultant with FranChoice, the premier national network of franchise consultants. David helps candidates exploring franchise ownership to set their criteria and matches them with the perfect franchise, then supports and guides them through due diligence and franchise signing. You can learn more about David at FranchiseVision.