FROM EMPLOYMENT TO EMPOWERMENT 3 - Part 3
by Gerri Sefi
This is the final part of the article on questions to ask both the franchise and yourself before you begin the lengthy and often costly investigative process.
What makes a good franchise operation?
There are a number of factors that contribute to good operation, notwithstanding the obvious i.e. high ROI. Here are a few:
- Management tenure – this is often a good example of how solid the business culture is, and staff longevity indicate that management knows how to keep good employees. Their philosophy for franchisees will often be the same.
- Franchises are awarded – not bought – so it’s important to assess the quality and quantity of corporate data provided to you. A good coach can provide you with a list of questions to ask to ensure you cover all the bases. Many companies will hold a “Discovery Day”. This is your opportunity to meet the management team at their Head Office and kick the tyres.
- Training - Does the franchisor have initial and on-going training, and are they accessible to assist and guide you when required?
- Franchisee Input - Does the franchisor have an advisory group i.e. does management listen to those in the field, or are all decisions made unilaterally?
What is life like as a franchise owner?
Franchise owners experience much the same work life as any other small business i.e. you are responsible for everything from marketing to administration to technology. In my experience, very few small business owners ever completely leave the business behind when they leave for the day – business owners are never “off-duty”. However, the franchisee has an added dimension to his business in that he has support and assistance from the franchisor, as well as access to non-competitive associates, some of whom will have been in the business longer and are experienced with the business cycle. The anxiety of having all the responsibility is somewhat mitigated by being able to share with those in exactly the same position in the same industry.
What are some of the work life expectations?
Even if you choose a business that operates during business hours, owners rarely work 9-5, 5 days a week. Be prepared to work harder than you have ever done before but with the knowledge that all the rewards are yours, as well as pride and satisfaction.
What are the 5 biggest challenges about owning your own franchise?
- The larger investment up front instead of gradual capital injection as the business grows.
- On-going fees - most franchises will take either a percentage of revenue, or a fixed cost, as this is how the company itself makes a profit. This can be challenging in lean times.
- Exit strategy – contracts vary but 10 years is fairly common. You may not be able to quickly sell the business as, unlike a normal sale of a business, the franchise company will want to approve the new buyer. It’s not just a question of capital, fit is important.
- You may not agree with some of the decisions made by the management team. Rarely is a franchise company a democracy, so you have to be prepared to live with what works for the majority.
- Mis-conceptions from other professionals. You may hear that franchises are a “rip-off” and that only the franchisor will make money. This is patently untrue, as research proves, but it can be challenging to defend a franchised business rather than your own independent one.
What are the top skills needed to own a franchise? BELIEF Will you trust and use the system you purchased? TRUST
Can you follow someone else’s rules? Although you may have extensive business experience, you won’t yet know every facet of your new business. You will need an open heart and mind to listen and learn about a system that has already proved to be successful. ENTHUSIASM
Are you willing, able and eager to learn new skills? CHANGE Can you set aside old habits and beliefs and embrace your new environment? STRONG WORK ETHIC
You are no longer an employee who leaves it all behind at the end of the day knowing that someone else will ensure your pay cheque is processed correctly ... are you willing to put in the time and effort required to push and pull your business to success? Are you willing to take responsibility for every aspect of your business?
Self-employment is not for the faint-hearted! But if you truly want to control your financial and lifestyle, working for corporate is not going to get you there. A crucial advantage of your search for a franchise business is to work with a coach who will keep you focused, objective and accountable.
Gerri Sefi is a self-employment coach who is dedicated to helping aspiring entrepreneurs fulfil their dreams of owning a business. She can be contacted at www.theesource.com/gsefi
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