The franchise industry is a $2.3 trillion industry, with one out of every six jobs relating to franchising. Statistically speaking, therefore, a franchise has a better chance of succeeding than most small business start-ups, due to the support and name recognition. If you are considering getting involved in a franchise, now is an excellent opportunity, but there are also things to consider before you take the leap.
What is a Franchise?
Before we take a look at whether a franchise might be right for you, let’s examine what one is and how common they are. Drive down any main street in America and you will see a Dunkin’ Donuts, Starbucks, McDonald’s, a UPS Store, and a CVS. See, you didn’t have to go far to find a franchise, did you? Franchises are an extremely common way of doing business.
A franchise is a type of license granted by an initial business owner (the franchiser) to other business hopefuls (the franchisee). The license is sold to others who will continue to use the name, logo, and business model.
Things to Consider:
Is a franchise the right fit for me?
Franchising is not for everyone. According to Entrepreneur Magazine, “Some see it as a way to venture out and become their own boss, but at the same time have the safety net a franchisor provides. While as a franchisee you will be the boss, you’ll still have the franchisor to deal with – so, you won’t be totally independent of oversight.” Most people who join a franchise do not want to change the system of work but rather believe in the business model that is already there and want to become a part of that system.
How hard do you want to work?
If you are choosing to work within a franchise, don’t go into it with the mental idea that the work will be easier because the company is already formed and a blueprint for success is already there. That would be a big mistake. Any new franchise still requires long hours and dedication. Don’t confuse a system that is already set with coasting into your own franchising success.
What is the risk?
Before you sign on the dotted line, do some research. What is the failure rate for this particular franchise? What do you know about the community you will be working in? What is that community’s turnover rate for this type of business? Do your homework before you jump at the opportunity to franchise.