I want you to buy a franchise business. I’d like nothing more. Buying a franchise would give you a shot at being in more control of your life…your circumstances. Imagine how you would feel if you weren’t chained to your corporate desk anymore. You’d finally be able to call the shots. You would help the economy, too. (Small businesses actually do that, you know.) I just want you to do it for the the right reasons.
If you’ve been subscribed to my blog for awhile, you know that I can get a bit critical of the franchise industry as a whole. Sometimes I come down rather hard on the International Franchise Association, which is my industry’s most powerful voice. Unfortunately, the IFA has turned into nothing more than a lobbying organization.
My motives are good; my delivery is average. I just want to make sure that only the most qualified people (not just financially qualified), buy franchises that are really right for them, from high-quality franchisors.
In addition, I’m focused on making sure prospective franchise owners know that they have to have the right personality traits and styles to be successful franchise owners. Read, “Do You Have That Special Personality Needed To Be a Franchise Owner,” over at SBA.gov.
There are lots of very popular reasons that people buy franchises. But, where is it written that just because something’s popular, it means that it’s automatically good?
For instance, McDonald’s franchises are really popular. (At last count, there were over 31,000 locations.) Does that mean that McDonald’s franchises are good?
If you do happen to feel that McDonald’s franchises are in fact, good, just what do you mean by “good”?
- Do they have good food?
- Do they have good business systems?
- Do they have good employment options?
This “8 Stupid Reasons For Buying a Franchise Business“ post really isn’t about superior franchise operat0rs like McDonald’s, or the merits of their business model. (Which I happen to think is the best of the best.) It’s about you; the prospective franchise owner. I want you to look long and hard at your own reasons for wanting to buy a franchise.
In the last 13 years or so, I’ve had an opportunity to talk with thousands of people who’ve shown the desire to become their own bosses. I’ve been able to help them learn how to choose, research, and buy franchises. In some cases, I served as a franchise broker.
Now, I serve prospective franchise owners as an advisor. Go here to see what I do.
I’ve had lots of people tell me lots of different reasons for wanting to become franchise owners.
The list that follows includes some of them, plus I’ve added a few classics.
8 Stupid Reasons That People Buy Franchises
- You can’t get a job. There’s a reason that this one comes first. It’s hard enough to start a business without the added pressure of the “, I sure hope that I can make this thing work” chatter going through your head. Don’t buy a franchise, (or any type of business) because you have to. Buy a franchise because you want to.
- It’s hot! Really? How long has the franchise that you’re thinking of buying been “hot?” A month. A year? 2.3 years? Have you ever bought a “hot” car? Buying a car or truck that is really popular is quite a challenge. What usually ends up happening is that you get you’re 2nd or 3rd color choice, (because your 1st choice is totally unavailable) and you end up paying too much. (Add to that the possibility that the kinks haven’t been worked out, yet.) The same thing could happen with a “hot” franchise.” (You may not get your 1st choice in a location, and you may pay too much for your franchise. And then there’s those kinks.)
- There’s a prime location open right by your house. What are you picturing for this fine location? A restaurant? A Payday Loan store? A Dollar store? Wait a cotton-pickin minute. Did you really say a Payday Loan store? If you’re thinking about one of those, please don’t subscribe to my blog. Anyway, believe it or not, the location part of the franchise exploratory process usually happens towards the end of your fact-gathering mission. Forget about the location. Find out if you’re a fit for the franchise concept, and if the franchisees are happy and making money. The location part of the process usually works out just fine.
- You’re in love. That’s right; you’re in love with a product or service, and it just so happens that it’s a franchise operation. That fact alone probably won’t cloud your judgment too much. (Oh yes it will!) Before you go jumping into this Olympic-sized franchise pool head first, stop and think about this for a minute. Just because you love the food and the atmosphere at Ronnie’s Rib Jungle And Deli, it doesn’t mean that you should become a franchisee. (Duh!) Have you ever worked in a restaurant? I hope so. If not, I suggest getting a job in one, (for about a year) before you even think of tackling something that you may get in way over your head with. (By the way, I worked in the food and beverage industry for years. I had to wear a tacky burgundy tuxedo. I know what I’m talking about.)
(Ronnie’s Rib Jungle And Deli. OK, not really, but it’s cool picture.)
- Your Aunt Tillie and Uncle Mort, just back from their 28-day cruise, mention “this restaurant” they ate at in Barbados. They tell you a very descriptive story of their dining experience, and hand you the owner’s card, (who just happened to mention that he was “thinking about franchising it, soon.”) First of all, someone who’s “thinking about franchising” their concept, is probably not someone who you should spend a lot of time with. Even if they do end up franchising it, you’re at least a year away from having the opportunity to buy it. Spend your time on concepts that are already franchises. Please.
- You’ve always wanted to be an entrepreneur. First off, congratulations! We need more people like you. Now, please don’t confuse being an entrepreneur with being a franchisee. It’s not the same. (It’s a 1st cousin, once removed, but..) This is an industry-wide problem. For some bizzare reason, some franchisors insists on advertising their opportunities with attention grabbing slogans like, “Have you always wanted to be an entrepreneur?” Don’t fall for them. There are some entrepreneurial things you’ll be doing, but you’re not the true entrepreneur. The inventor of the franchise concept is. Now, there are some opposing views to my line of thinking. This one from former Entrepreneur magazine managing editor, Rieva Lesonsky, is pretty darn compelling. It’s too bad I like her so damn much.
- You read something either online, or in a magazine that said, “you should really take control of your life now.” The article went on to say that “if more people would have the courage to become their own bosses, more people would be able to build wealth.” Upon further investigation, you found out that the article pointed to what sounds like a wonderful vitamin peddling business, and better yet, it’s associated with Donald Trump. WOW! Take control of your life. Spend that $497 to join The Trump Network. (By the way, it’s not even remotely related to the business model of franchising.) It’s a Multi-Level Marketing business. Duh.Please read this short post about network marketing
- You’ve finally found a business partner. Congratulations. Crack out the Dom Perignon. Seriously now. You’re going to open a franchise business up because a “business partner” suddenly appeared on the scene? How well do you know this person? Is at least a relative of yours? Do you know about all of the fun legal stuff you’ll have to do? Read This BusinessWeek post. Basically, if you don’t need a partner, try to avoid one. If you do need a partner, make sure that he or she has some skills that you don’t. That way you can compliment each other.
I hope that the examples I just presented above gave you some food for thought.
For the right person, at the right stage of their life, with enough of a financial cushion, who’s not too entrepreneurial, and who isn’t buying into the latest hot thing, investing in a franchise may be a great thing.
“Joel was a great help in helping me determine the best franchise fit for. He walked me through the process, all the while understanding the variety of nerves and emotions one deals with when buying a franchise. He also offers continuous support in any way he can. It was pleasure working with him, and I am thrilled with my franchise selection.” Leslie Selig, Franchise Owner
There are lots of franchise business horror stories out there. I’ll bet that all of those ex-franchisees who’ve lost their homes, their savings, and more, didn’t use the techniques that I teach.
Please add your comments, below. I’m really interested in why you have bought a franchise. (Or are considering it.) Also, if you know someone who really needs to read this post, pass it on. That’s one of the reasons I wrote it.
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8 Stupid Reasons For Buying a Franchise Business by The Franchise King®