Everyone would be a franchise owner! The majority of potential franchise buyers I consult with do not end up purchasing a franchise. The reasons include:
- They received a great job offer
- Have a fear of losing money
- Fear not producing income rapidly enough
- Can’t get excited about any of the opportunities presented
- Their spouse or significant other is not “on board”
- They feel that there are too many restrictions in the franchise
All of the reasons above are valid, and I discuss these with my candidates before we even meet face to face.
Let’s discuss these one by one….
Some of my candidates are on what I call a “dual track”. They are interested in exploring franchise/business opportunities, but are also sending out resumes, and interviewing. In general, most of my candidates are not really putting too much time and effort into pursuing a traditional job, but occasionally, a candidate of mine does land a nice job, that is a nice fit for them. Interestingly enough, I have found that a percentage of these candidates contact me a year or two later, after being downsized form their jobs, and restart the franchise/business opportunity search process again, with some investing in a franchise this time.
Yes, you can lose money in a franchise/business opportunity venture, just like any other investment, whether it is a stock, a rental property, or anything else that has no guarantee stamped on it, like a bank savings account. With proper guidance, you can lower your risk, but still it is a real risk to get into your own business.
When you invest in a franchise start-up, do not expect to draw a paycheck at the beginning. This is the most difficult part of a career transition from employee to business owner. (And sometimes from employee to employer) I recommend that before you invest in a franchise/business start-up of your own, you have 6-9 months of living expenses set aside. Living expenses should include your monthly household expenses, plus some emergency money. if you do not have living expense money stashed, the next best thing is to have a working spouse of partner that can cover the monthly household expenses, or a major portion of them.
No Cosmic Experience Will Happen
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I tell my candidates not to expect the lights to flicker on and off in my office, and music to start playing unexpectedly, when I offer specific franchise concepts as a possible match. Generally, the excitement builds as you learn more and more about the concepts, and start talking to and meeting with the franchisees..who have already invested their money and time into the business. If you want excitement, go to a concert or live sporting event.
If you are married, or have a “significant other”, and don’t involve them in your research and decision, and are then surprised when they don’t support your enthusiasm and interest in some interesting franchise concepts, then shame on you for not involving them from the beginning. This paragraph is officially over now.
Franchising is restrictive. That is why it is a franchise. Definition
You are purchasing a license to use and profit from their system. The key word here is system.
A franchise system needs to be restrictive. Would you really feel comfortable walking into a McDonald’s in let’s say, Independence, Iowa, and ordering a Big Mac, if you didn’t think you would be getting a burger that looked and tasted just like the one in your hometown?
I’ve found that the older the franchise system, the stricter the controls are.
Some younger franchise systems do give you a little room to improvise, but not much. If you really like to do things your own way, I recommend a non-franchise business. Why invest in someone else’s system, if you’ll try to change it?
In summation, work with experts, do your homework, and collect data. If you do that, you will lower your risk, and increase your chances of success.