Advice on How to Start and Own Your Own Franchise Business

Posted on December 05, 2007 by Ginger Watford

During my travels or when giving seminars or speaking at conferences, people have often asked questions about different franchises and about franchising in general. After I explain that I have been around franchising for nearly 30 years as an independent business owner, a franchisee and a franchisor, the top questions I get from people looking to buy a franchise or other business, include: what is the best franchise to buy? What is the hottest industry? Where can I get the best “deal”? , and some say that they have a concept that they feel is the next McDonald’s and how do they start a franchise?

Let me take a few minutes and hopefully give some insight, ideas, and suggestions and maybe even a bit of good advice to those looking to be part of the dream of owning their own business.

There are three things I always tell people who are looking to get into business that they need to address.

1st, do you really have the desire, passion and resources of time, talent and money that will be required?

What I mean by this is that everyone needs an event that motivates them to begin looking for a business opportunity. This could be a loss of a job, desire to change careers paths or unfulfilled goals. It could even be that you have built a degree of wealth or financial security or have received a buy out offer or golden parachute that gives you reason to think this is the time to go on your own.

It is important that the event that occurs motivates you in the right direction. If you have lost a job and say to yourself that maybe I should look for a business and a job at the same time, then I would ask you to consider if you really have the passion and desire to go into business, or are you being motivated by fear. If you want to change careers or control the quality and quantity of your lifestyle, then ask yourself if you have the passion, time, and financial resources to take the steps back that may be required in both quality and quantity of life to build a better and more successful future for yourself and the others in your life that are and will be affected by your decision. If you have achieved a certain degree of wealth or have gotten that buy out offer or golden parachute you need to ask yourself if you really have the passion and desire to go on your own, or should you look to stay employed and put that money or continue to build your wealth through other methods such as stocks or real estate.

2nd, I ask if you truly believe that franchising is the best way for you to get into business?

This is a very important question. To decide that franchising is the way to go for you, involves realizing several things. Most importantly the ability to give up a certain amount of independence and freedom and being willing to follow the systems and practices that make franchising successful, and to be able to do this for the 10, 15, 20 or more years that they franchise agreement is in force. For people who have a very difficult time following directions or always are trying to change things or feel they know a better way, franchising is more than likely not a good choice and going on your own, even though the risks can be much higher, may be a better alternative. Franchisors are looking for good people who have a desire to be in business for themselves yet not by themselves. They are looking for people who after doing there homework and due diligence are willing to join a system, follow that system and become part of the synergy that makes for successful franchise owners and systems. The do not want nor need people who are so independent in their thoughts and actions that they are constantly trying to change the model, methods and practices that are part of the core values and business strategies of the franchise.

3rd, I tell them that if they have the desire, passion and resources required and they believe in franchising as the best way to get into a business, then they must take the time and steps required to find the best franchise system for them and when they find it, to channel their passion, apply the belief in franchising and use their resources wisely to achieve the level of personal and financial success that they desire.

Well, now that those 3 items have been covered the next question is how do I find the “best” franchise to join and invest in?

With an estimated 1500+ different franchise offerings available, there is no simple or “easy button” answer to this question. There are however some guidelines to help the process go a bit smoother. First determine what you absolutely do not want to do. If dealing with a large number of employees or customers is not for you then most likely restaurant, labor intensive or walk in retail franchises are not for you. If you are sales adverse than franchises that require direct selling will probably not interest you.

Once you determine what does not interest you, then keep an open mind to other possibilities. In the franchise systems I have been with and worked with as many as 90% of the franchisees had no background in those industries or had any idea that they would ever had become franchisees of those systems when they began to look for a business. They said they had kept open minds and looked at various industries and offerings until they found the system they felt was the best match.

Next, determine your risk tolerance and look at franchises that you feel you may be able to afford. There is no point in getting excited about a franchisee that is way above your investment level. That being said, always check into what financing or other financial options are available that could make a particular system you like more attainable.

A good next step would be to think of the industries you might like and research what franchises have offerings in those segments and to do some basic homework on those opportunities. The easiest and often quickest way is to do your initial homework on the web through franchise directories and perform keyword searches. Next, visit a location if it is a bricks and mortar franchise and/or call existing owners if it is a home based system. You can learn much and make educated decisions on whether to pursue a particular franchise system by talking to people (I suggest speaking with several owners in different areas and of various lengths of time as franchisees) who are running these businesses on a daily basis.

When you have selected 2 or 3 industries and maybe 1 or 2 systems within those industries and segments then begin the real due diligence by contacting those franchisors directly, meeting with them, obtaining the UFOC, talking with more owners, determining if they are a fit for you and you for them. Doing these things will give you more confidence that when you have made your decision and take the leap you are on the best path for you to begin realizing the dream and obtaining the rewards that can come from owning your own business.

Finally, I would also like to address the issue of using franchise brokers or as they are often called consulting networks. Many people say they do not have the time to look at all the different opportunities out there and will sometimes look to the brokers and networks for help. Although this can be a effective method, please be cautioned that consultants are paid a commission only if they get someone to join a franchise network that is on their list and they will usually present you with 3 franchise opportunities, all of which they have formal agreements with. I would encourage you to also look at several other franchise opportunities within those segments so you have the information you need to make the best and well informed decision possible.

Getting into business for yourself is one of if not the most important personal and financial decisions you will make in a lifetime and you should never abdicate that to any one individual or group. The ultimate responsibility for your success or lack of it rests with you and only you can put in the time and effort needed to make the best and well informed decision you can.

I wish you much and continued success.

Christopher Simnick, CFE
President
Synergy Franchise Development, Inc.
www.synergyfranchisedevelopment.com
chris@synergyfranchisedevelopment.com

For more information on franchises or to search for a franchise to purchase please visit www.franchisegator.com.