Prospective Franchisors: Beware the Sirens
Part 2

Part 1 of this article compared mythical Greek sailors to entrepreneurs seeking franchising as a new channel of distribution. Both are drawn into dangerous waters by tempting sirens.

Well-wishing sirens are the catalysts that set a series of events in motion, but they do not contribute to the actual effort of franchising a business. Certainly when faced with trying to resurrect a disastrous franchising project, or worse yet, when trying to dissect the remnant corpse of a bad franchise start-up well-wishers are of little significance.

The key to understanding the well-wisher's role is to know that they are only an enticement to franchising a business.

The well-wisher generally has no real power or skill to franchise a business, and usually no real interest in franchising. They simply motivate others to take the leap into franchising, and that leap includes all the risk for the franchisor, and none for themselves. A whimsical "you ought to franchise" comment while paying one's lunch tab is echoed over and over again in the proprietor's mind, but whether or not the eatery ever franchises is of zero importance to the customer who makes the comment. (Note: A more ludicrous scenario exists when a well-wisher suggests that they might become a franchisee. The hopelessly hooked entrepreneur begins a franchise site search on the way home that very evening "just in case" the well-wisher is really ready to buy! Don't laugh, it's true, and every franchisor knows it.)

Although the siren's song numbs a prospective franchisor to the realities of the industry, real danger finally appears in the form of unqualified franchise consultants. They are the ones who can catapult the entrepreneur headlong into uncontrolled flight.

Franchise consultants, developers, and attorneys, acting in concert with the entrepreneur's excitement, are the real forces that move the project forward. Why are these people so powerful? Because they provide, through their expertise, real "insider" authority, the know-how, and certainly living proof that franchising can become a reality. Of course, that reality can be for better or worse.

This second onslaught of enchanting music is not only more powerful than the first, it is eminently more dangerous because the second siren, the franchise consultant, really has the power to chart a course to the coast and fuel the journey with strong encouragement and coaching to "go forward." Perhaps the most interesting phenomenon concerning the appearance of this second siren is that the aroused entrepreneur, with dreams of franchising, is the one who normally woos this siren, not the other way around.

decision to franchise prematurely, or the decision to franchise at all. (Just don’t let a franchise consultant pull you, or more likely, push you into the water.)

The purpose of the article is to help prospective franchisors better understand themselves and point out one of the greatest hazards, that in their enthusiasm, and through their lack of franchise experience, they generally overlook.

Although charts and sextants are the sailor’s navigation tools, they can be used to reach any destination, be it safe or unsafe. Emerging franchisors rely on franchise consultants and attorneys (and many times just themselves) as tools to choose a course, but strategic planning is the key to finding a safe destination.

There are disreputable and ill-informed franchise consultants, but low skill level and lack of integrity can be found in any industry. Actually, among the most difficult chores facing a would-be franchisor is choosing a consultant who 1. Knows what they are talking about, and 2. Has enough integrity to say, "don't do it" if it’s not a good idea. Franchising is federally regulated, but there is no licensing for franchise consultants. However, for the sake of wrapping up this thought, let's just assume that all consultants are created equal.

Franchise consultants make their money by consulting, and if marching orders are given to franchise, then franchising will happen. Unfortunately, the entrepreneur, who is the ship's captain in our analogy, is simply not capable (in most cases) of making a good decision about the logic and practicality of franchising their business. I find that carefully analyzing the possible outcomes of franchising while exploring the specific concept and the entrepreneur as a person, lead to the best decisions.

If a person decides to franchise, the winds will howl and the sirens will sing until the deed is done. However, the best captains do what the smartest Greek ship's master decided. He will cover his ears so as not to hear the siren's call, and sail past danger. A true feasibility study, not a sales pitch, is the surest course to peaceful waters - in franchising, or any other endeavor.

Copyright Nicholas A. Bibby and Matthew T. Bibby, all rights reserved.