Updated: February 28, 2020
One question that people often ask me is how do they know if buying a franchise business would be better for them instead of starting one on their own.
Some fear that they don’t have enough skills to start a business alone. Meanwhile, some don’t really want to spend time developing a business plan. They just want to jump right into entrepreneurship.
While both are valid reasons for choosing a franchise over a start-up, there are other things you do need to consider before you approach any business franchisor.
Here are some facts and pointers you need to remember when you buy a franchise business.
Acquiring a franchise limits your risk of failure. Because more often than not, a franchisor already has a successfully proven system that will attract profits to the business.
Indeed, for those who are not comfortable or just plain lazy to develop their own business plan, buying a franchise business would be a better alternative.
No Experience Needed
Another great thing about being a franchisee is that you don’t need to have experience in running a business to start. Your franchisor will almost always teach you everything you need to know on how to manage and operate the business.
Sounds convenient, isn’t it? It is but you have to prepare yourself to be trained. And then consequently, be ready to teach everything you learned to your employees.
Buying a franchise business will cost you more money than starting a similar business on your own. If you want to become a franchisee, you should be comfortable with paying not only a franchise fee but also, a possible monthly royalty fee to your franchisor.
Follow The Manual
All franchisees are expected to operate the business in exact accordance with the instructions of the franchisor.
You need to “follow the manual” of the business system. This includes doing all operational tasks to the letter, purchasing your inventory from the suppliers directed by the franchisor, accomplishing all forms given to you by your franchisor and many other tasks and responsibilities.
All branches, whether company owned or a franchise, are expected to serve the same products and offer the exact services. You will not be allowed to sell anything else other than what your franchisor provides.
This means foregoing on opportunities to offer your own items in your store. If you have an idea for a new product or offering, take it up first to your franchisor for approval and let them develop it for you.
Becoming a franchisee means you are willing to share your success not only with your franchisor, but also to the other franchisees as well.
The success we’re talking about here, more than anything, refers to the profits you will enjoy in the business. Expect a part of your income to go to a common fund that will be used for marketing, research, and business development.
Part of the Family
Buying a franchise is like becoming a child in a family. You are expected to do your chores and responsibilities while your parents – your franchisor – works for your development and success.
It is a long-term relationship. And you must be willing to do your part to help the organization continually grow and thrive as a business.
If you fully understand and accept all these facts about being a franchisee, then you may have found your path to business success. Consider consulting a franchisor and see if you can find a good opportunity for you.