McCadden: Is Joining a Franchise Right For You?
authors Shawn McCadden | May 10, 2017
Becoming a franchisee might be the best thing you can do to jump-start a business and a career. It might also become a monkey on your back if you make a bad decision or want out and you have already signed and paid for a 10-year commitment. In my experience working for a remodeling industry franchisor, I saw both happen to franchisees. Although both the franchisor and the franchisee share responsibility for the ultimate success of the franchise—and can mutually benefit from working together—this article is dedicated to helping you decide if you should become a franchisee and, if so, how to choose a franchisor and franchise system.
A Job Vs. a Business
Do you want to be an active business owner, an investor business owner or are you really interested in creating a job for yourself so you can practice your craft? All are possible options when purchasing a franchise; however, this is an important decision to consider before you commit. First, some franchisors may not offer a business system and/or adequate system support to help you create and grow a large business. If it’s not large and efficient enough, your new franchise won’t generate the revenue and gross profit needed to pay someone else to operate it. That means you will be required to be there to manage it every day. Second, because some franchisors can offer such an opportunity and may contractually require you to grow to a certain minimum size, you probably won’t have time to be a craftsman unless you successfully hire someone else to work with the franchise and manage your business. If that is what you want to do, make sure the franchise you are considering knows it and will help you find that right person.
Envision Your Future Role
Before you buy a franchise, consider what you want as your future role in the business. Then, check to make sure the franchisor can help you achieve that role as well as how long they say it will take. Do you envision yourself becoming a working manager, involved hands-on in the day-to-day with both customers and employees? Or is that your role now and you’re hoping a franchise can help you evolve out of that role so you can increase your profits, replace yourself and move on to other interests? Whichever is your preference, be sure to speak with the franchisor about your goals. If they say they can help you, don’t just take their word for it. I recommend you also seek out current franchisees on your own. Call them to see if they are happy with their decision and can answer your questions about the franchise as well as the franchisor. A great question to ask is, if they had their choice, would they do it again?
Are You Willing To Follow a System?
Many research studies have shown that if you have the right personality to do a particular job, your chances of success are five-times higher than if you have the wrong personality. In his book, “The Entrepreneur Next Door,” author Bill Wagner discusses this research. He also shares the difference between entrepreneurs and what he refers to as “wantapreneurs.” I read his book while I was working as the director of education for a franchisor. With that experience under my belt, I found Wagner and his book to be spot on. Depending on which of the four entrepreneur types you might be, joining a franchise might not be right for you. In particular, if you are strong minded, strong willed, value freedom of action and are very independent, you will probably constantly test and buck that system, wanting to do many things your own way. If that is your personality, don’t join a franchise. On the other hand, Wagner says those with a wantapreneur personality likely would make good franchisees. Some of the traits Wagner assigns to wantapreneurs include highly compliant, conscientious and thorough, prefer a well-defined structure and are typically risk averse. If that describes you, think how much you might benefit from a franchise and franchisor that can offer you a defined and proven system to follow, as well as the support and coaching to help you comply and succeed. If you’re curious which entrepreneur personality type you are, Wagner’s book offers a self-assessment.
During my years working at a franchise and supporting franchisees, I saw some franchisees fail and many others succeed. The ones who did the best were those who came into the franchise willing to adopt, not adapt, the franchise’s way of doing business. I also saw that the success of the franchisee can be highly dependent on not only the franchise’s business system concept but also the support staff assigned to train, coach and mentor the individual franchisees. Before you join a franchise, be sure to take the time to see and experience the culture of the franchisor and its staff. Make sure it will be a good fit for you because divorcing a franchise can be expensive. On the other hand, becoming part of the right franchise can help jettison you and your business into profitability and long-term success. If you embrace what the franchise has to offer, and you do it well, the value of the whole franchise can increase. This makes your franchise worth more to you, and maybe even more for a future buyer when you are ready to move on. |QR