Is franchising right for you? It’s the million dollar question¬ or half million, or three hundred thousand, depending on what you plan to invest! While you have no doubt investigated if running a small business is right for you, there is a difference between running a franchise and running a small business.

In a small business you can run things any way you want to but in a franchise system you don’t get to make all the decisions. 

Let me tell you about Bruce. Some years ago I was responsible for the induction program for new franchisees in a large retail food franchise system. From the first day of training, Bruce challenged everything he was taught – every process, recipe and marketing initiative. He was convinced he could do everything better He came from a corporate environment, had also run his own small business and was set in what he wanted to achieve. He had simply not considered the implications of having to work within somebody else’s system and failed to see his role was to execute the system and leave the strategy to the franchisor. 

Unfortunately, things ended badly for Bruce because he did not take into account the need to operate his business within the guidelines of the franchise system.

There are many benefits to buying a franchise: you are provided with a proven system, ongoing training and mentoring and access to a community of people you can tap into to share ideas. 

But if you have an entrepreneurial spirit like Bruce you will want to fiddle with the products, create your own customer offers, change the colour of the uniform… Your role as a franchisee is to stay within the bounds of the system and improve on it through better execution. 

As a franchisee you will be required to share information on your financial position and performance. Good franchisors use this information to provide benchmarks to help you improve your business performance. Some people are uncomfortable with that level of disclosure. 

QUESTIONS

So ask yourself:

• Will you be able to follow the direction set by the franchisor, even if you think there is a better way? 
• Can you embrace someone else’s vision or will you feel stifled by it? 
• Are you a marketing genius with ideas on better ways to market your business and the brand? 
• Will you expect the franchisor to change strategy to suit your market? 
• Do you prefer to work independently and not as part of a team? 

If you have answered yes to any of the questions above, you may want to investigate your decision more carefully. 

TRY THESE TIPS

Here are some tips to help you ensure franchising is right for you.

1. Talk to as many current and former franchisees as possible. What have they found most frustrating? And where have they had to put aside their own interests to support the wider needs of the group? Keep asking questions until you have an understanding of what it is to be part of the system.
2. Be clear on the boundaries. If possible have a look at the operations manual and see the specific policies and systems you will be expected to follow. 
3. Find out the processes the franchisor has for taking feedback. What committees and groups does the franchisor have in place to support continual development of the system? 
4. Shadow a franchisee. Invest a few days in really finding out what it means to be a franchisee in that system. 
5. Be honest with yourself. Will you be able to accept decisions that are for the good of the overall system, but might not always be in your immediate best interest?