For many individuals that explore franchising as the next step in their career, as a way to control their own destiny or as a way to create a family business understanding the process can be quite overwhelming. Below are several articles by franchise experts that will help interested parties diligently navigate the process to help create a playing field that is best for them as opposed to seeing them aimlessly tiptoe through a minefield consisting of franchising’s good, bad and ugly.
If you’re thinking of becoming a franchisee, how should you prepare yourself?
Buying a franchise can be a great move for a would-be entrepreneur who doesn’t want to create a new business from scratch. In theory, franchisees acquire a model that already works on every level, from branding to pricing to marketing. A ready clientele eagerly spends on Dunkin’ Donuts, McDonald’s and 7-11. The market has tested the best recipes for glazed crullers, Egg McMuffins and the right combo of energy drinks to stock next to the register. But making a go as a successful franchisee can be a lot more complicated than simply finding an appealing brand and plunking down some cash. For a taste of what can go wrong, see Forbes’ piece about the problems at sandwich franchise Quiznos, which paid $206 million to settle a suit brought by franchisees who claimed the chain had oversold its markets and excessively marked up supplies.
How to Buy A Franchise
Contrary to popular belief, the process of buying a franchise isn’t really difficult-but it is a process. I’ve found, (through working one-on-one with thousands of potential franchise owners) that it’s really important to tackle a major life decision like the purchase of a franchise business-or any type of business, in a very methodical way. (Even if you’re not a methodical person!)
But you need to realize that buying a franchise is a big deal. It could potentially be life-changing. That’s what you want, isn’t it?
After all, you probably wouldn’t be reading this if you wanted to just go out and find a new job -or keep the one you have.
With that in mind, kick off your shoes and grab your favorite beverage. In this article, Joel Libava, The Franchise King shows exactly how to buy a franchise.
Why Owning A Franchise Business Is Good For Your Family
Many entrepreneurs choose to become small-business owners with an exit strategy of turning over the business to their children one day — a strategy that takes on more importance in an era where young people are struggling to find gainful employment. Children who begin working in the family business at a young age will typically start an ascension into management after college, with an eye on purchasing some or all of the family business as their parents head into retirement. Often, the parents will retain a percentage of the business as a revenue stream in retirement, adding an extra level of responsibility for the child as a steward of their parents’ nest egg.
Even if they don’t stay in the family business, studies show that parental entrepreneurship increases the probability of children’s entrepreneurship by about 60%. Children of entrepreneurial parents have already experienced many of the ebbs and flows of small-business ownership, which helps to mitigate their fears and raise their risk tolerance.
Learning About Franchising
During research for Franchise Bible, 8th Edition, author, Rick Grossman found that the franchise industry had changed in many ways over the years. Technology has had the biggest impact by modifying buying behaviors. Not too many years ago, franchise buyers would find an opportunity in Entrepreneur magazine or by attending a franchise expo in-person. They would then go through the franchisor’s respective step-by-step process to qualify, purchase and launch their franchises. But today, buyers can find a plethora of information online about nearly any franchise they want to learn about. This has leveled the playing field for new innovative companies to compete favorably with the “big boys” in the marketplace.