(FS3) Franchise Series 3 – The Franchisee’s Checklist

Not everyone is cut out to run a franchise. Those with more passive business aspirations are some of the few that would not do so well running their own business, but there is more to it than that. It’s always important to make a self-assessment before you make any large purchases, investments, or changes in your life, but what exactly should you look for if you’re considering adopting the job as a business franchisee?

Where to Start

So we’ve established that working as a business franchisee is something of a cross-breed job where you are your own boss and sort of not at the same time. We’ve established that the basic idea for franchisees is that you pay for and run your own business, but you are given a specific system, style, and brand for your store. There are certain independent properties that you surrender when you purchase a business franchise. Those properties are traded in for support and advertising that most small business owners couldn’t even imagine having at startup. There’s universal method to find out what franchise is best for you or who to franchise with. It will depend on your personality and how well it works with the franchisor. It depends on your dreams and likes and whether you’d like to turn those into a reality. It will depend on the funds you have and the cost of the franchisor. As much as one may hope that it’s simple picking and starting a franchise, even with the tools prepared by franchisors, it still comes down to resources available and you.

Advantages of Franchise Ownership

Like any job, franchise ownership offers its benefits and its disadvantages that will appeal or repel the right people. When you consider business franchise ownership, consider the following benefits:

Competitive Benefits:

Branding and company franchise places your business up against well-known franchises and businesses, providing them with a measurable scale of greatness of service quality through well-known brands.
Branding recognition often extends to national and sometimes worldwide customer base and recognition.
Brand recognition gives you consumers who may have never shopped with you before simply by identifying your name and the service experience they had before.
A tested operating system and business model that is proven to succeed not only once, but dozens of times.
Initial and advance training for you and your employees that has been prepared ahead of time.
Training in business ownership and management to help all franchisees succeed, even those who have never managed before.
Operating manuals, marketing and advertising programs, site-selection tools, store design, and deduced cost of equipment can often come as a perk from the experienced and well-known franchisor.
A peer counselor direct communication with the franchisor to question with decisions, advice, or to voice concerns over franchise-specific needs.
As the franchisee opens their store, they are often equipped with home-office and field-consulting assistance from sister stores or the franchisor.
Reduced price for purchasing goods from franchisor’s partnered distributors.
Professional designed point-of-sales marketing equipment, advertising, and other materials.
Modernized franchise systems through ongoing research and development done by the franchisor.
Spending and marketing power of nearby sister stores for grand events on a larger scale for a smaller cost.

Disadvantages of Franchise Ownership

It’s never fair to just look at the advantages a large decision can come with. Business franchising does a lot of good, but there are plenty of things to consider as the downside or risk as none of the following have to happen, but they can.

Disadvantages:

Whether you’re considering franchising or small business ownership, there is always going to be a pretty hefty startup cost. Some might consider the franchising fees too much. There will also be the continuing royalty fee that franchisees pay regularly in order to keep using the franchisor’s brand.
Many consider there to be a loss of independence associated with franchising. You do not have the independence to design what you want, call what you want, or run the store however you want. You will have to submit to whatever rules for design and operation the franchise may have.
Overdependence on the franchisor can be a result from the loss of independence. You will have to follow their rules, their online systems, and their protocol which can sometimes lead to dependence or loss of self.
With franchising, you will be representing a brand that may be state-known or may be national. That means other people are also representing the brand. You will benefit from the established reputation… if it’s good. You will also pay for the mistakes of others who had a less fortunate run-in with a store you may have never even been to — let alone heard of.
Elevated income expectations can set you up for failure and disappointment if your income isn’t as high as you want it to be. You may see the success of the brand and think that it is a fast moving money train, set your expectations on the top shelf, then face the reality. While business franchising is a great way to find financial security, it doesn’t happen overnight and it is not a ‘get rich quick’ scheme.
Franchising isn’t as flexible as self-started stores. You will be bound by a contract to your franchisor to do what he wants. You are always free to submit requests to your franchisor about changing things, but ultimately, your franchisor will be the one making the final decisions on anything.
This inflexibility can put a limit on the products or the services that your location offers. You will have to submit any requests for new products, vendors, or services to your franchisor and hope for the best because everything offered to franchisees is usually uniform to be picked from.