Before This Gets Ugly, A Question
Are you excited about buying a franchise?
- Have you found a few franchise opportunities that interest you?
- Are you currently doing serious research on a franchise business or two?
Good for you.
- Are you in the process of writing your franchise business plan?
- Did you apply for your loan?
That’s how to stay ahead of the game.
- Are you about to sit down with a franchise attorney?
- Are you getting ready to write a check for the franchise fee?
You better hold off for a moment.
Because I’m about to knock the wind out of your sails.
“Don’t believe that acceptance of you by a franchiser means they have evaluated your ability to get the job done. Some franchisers would select a corpse if rigor mortis had not set in and if it clutched in its hand a certified check for the amount of the franchise fee. Do your own introspection and decide if you can handle the franchise.”
Find Out What Separates This One From All The Others
Let’s break it down.
Could It Be True?
“Don’t believe that acceptance of you by a franchiser means they have evaluated your ability to get the job done.”
Do you really believe that franchisors only award franchises to the absolute best candidates?
In my experience, a lot of franchisors do choose the candidates that (they feel) have the best chances of success. But, not always.
Fact: If someone* who’s part of the transaction has the potential to receive a generous commission check, their needs could trump yours.
*That someone could be the franchise development representative, and/or the franchise consultant/franchise broker/franchise coach.
My advice is to always tread carefully whenever there’s money involved…whenever a “Yes” decision on your part results in a big, fat, commission check for someone.
Get Franchise Ownership Advice From Someone Who Doesn’t Receive A Commission
The joke in the franchise industry used to be that a certain huge submarine sandwich franchisor would sell a franchise to anyone who could fog a mirror.
“Some franchisers would select a corpse if rigor mortis had not set in and if it clutched in its hand a certified check for the amount of the franchise fee.”
There’s no way that could that ever happen today. Not with the internet. Not with all of the review sites. Not with all of the aggressive bloggers and the like who are more than willing to disclose wrongdoings in franchising.
Wait. Scratch that. I…I…must have nodded out for a moment.
It can happen. It does happen.
Sometimes, it’s the reason some franchisees go out of business and lose everything.
Sometimes, franchise opportunities are sold to people who don’t really have enough money saved to get them through the always-challenging startup phase.
Sometimes franchises are sold to people who aren’t good at following rules.
The Best Franchisors Are The Ones That (Without Hesitation) Turn People Down If They’re Not The Right Fit
Can You Handle It?
Here is the last part of the paragraph I grabbed from Byron Lane’s book:
“Do your own introspection and decide if you can handle the franchise.”
What does that mean, Byron?
I get the “Do your own introspection” stuff. I always encourage all of my readers and clients to a serious self-reflection before jumping into a franchise business opportunity. But, what’s that “if you can handle the franchise,” thing mean?
Let me give it a shot.
- Can you handle the idea of partnering with a franchisor?
- Can you handle the idea of not making any money for at least the 1st year?
- Can you handle the fact that you’ll be paying thousands of dollars in royalties every year for the life of your contract?
- Can you handle having employees?
- Can you handle signing several pretty heavy-duty legal documents?
- Can you handle signing a multi-year commercial lease?
- Can you handle all of the opinions and unsolicited advice that will come your way?
I’m not trying to scare you. But, there is an ugly side of franchising. There are things that can and do happen to unsuspecting franchise seekers. Folks who just want to be their own bosses. People who never ever want to go through another corporate “restructuring.” You?
Can You Handle These Things?
There are several upsides to owning a franchise business. Good stuff can happen, too. Especially if you know how to buy a franchise.
You’ll have lots of freedom. It’s your business. Once you’re up and running, you may be able to put together a very creative work schedule for yourself. There’s the mental freedom, too. The freedom that comes with not having a boss. (It’s wonderful)
You may be able to include your family in the business. Wouldn’t it be nice if you could at least offer employment to your family members? And, if things worked out well, maybe you could set things up so they can take your business over someday.
If you want, you can become a very visible member of your local community. Maybe you can help promote small business. Maybe you can sponsor a Little League team. Heck, you can run for mayor!
If you’re up to it, you can take a shot at creating a substantial business. You can become a multi-unit franchisee. Or, you can expand the space your business is in.
The bottom line: Small business owners have a real chance to build wealth.
It’s Probably A Scam
If you talk to enough people about franchising or spend enough time online looking into franchise businesses, you’re bound to read some pretty negative stuff.
“The franchisors make all the money”
“Franchising is nothing but a huge scam”
“You’re totally locked-in when you buy a franchise”
“The franchisor can terminate you at anytime”
Are any of the 4 statements above true?
Of course not.
The franchise business model rocks. For the right person, who has enough money, and can follow the rules, franchise ownership isn’t a bad way to go. It’s perfectly okay to be excited about it. Just do your homework.
And follow the money.
Do you have any questions about buying a franchise?