By Nicholas A. Bibby and Matthew T. Bibby
Copyright, all rights
reserved
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.
“Franchising
is federally regulated, but there
is no licensing for franchise consultants” |
Franchise
consultants are not the enemy, and
I am not trying to belittle them,
vilify them, or suggest that their
services are not essential in the
franchising process. Indeed, to franchise
without enlisting a franchise consultant
or some other professional help is
even more insane than the |
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. |