Should I or shouldn’t I buy a franchise?
If you’re wondering if you should buy a franchise, join the crowd.
At any given time there are literally hundreds of thousands thinking about being self-employed as a franchisee.
In the 1980’s and 90’s becoming a franchisee was a very common step away from corporate America. And that was especially true among executives who were handed golden parachutes but were also too young to retire altogether. In those days the parachute money might even be traded straight up for a new franchise. Tougher economic times now create some very different considerations for those who want to buy a franchise. Here’s why and how.
You don’t hear too much about golden parachutes today. Quite the opposite. Instead it is more common to hear stories of folks using up their savings just to stay afloat while searching for a job. Life is more difficult in recent years due to all the commonly know factors: economic uncertainty, world unrest, and you know the rest of the adjectives. So, bottom line on this issue is that there is not the same smattering of discretionary wealth among prospective buyers.
Our new economic facts of life make all of the traditional concerns about buying a franchise even more obvious and of greater concern. What are those issues and concerns?
First, should I or should I not work for myself? Well that’s quite a serious and important question to resolve. And if your gut is totally shaky, hold off. By the way, no one in business has a crystal ball, but a sense of confidence and feeling ready to move ahead should be present. Now, once again, add in economic uncertainty and there is another layer of negativity to defeat. Whether you buy a franchise or go on your own, it’s going to be a battle in the beginning – and maybe for the long haul.
Second, what type of business, if any, should I choose? Again, an age old and tough question, but it needs to be answered if we are to make a decision. Tradesmen have and always have had an easier time with this question because they had a marketable skill. The only decision was to be employed or self-employed. Those who many want to buy a franchise still have to decide on the type of skill in which they want to be trained. The Focus Program for Emerging Entrepreneurs helps greatly in the decision process, but it’s still a leap of faith.
Third is truth and trust. The internet has poured out information on franchising including the ugly side, and the ugly side does exist. People are more weary and with good reason. And of course, with fewer financial resources, franchise buyers are going to even more inquisitive. If one is going to buy a franchise due diligence is critical. Today’s economics seem to be forcing a greater percentage of buyers to perform better investigation and that’s good thing.
And of course we can’t forget the all important question of fitting within the franchise equation. Fortunately this issue is not too difficult to resolve, but it’s still critical. Here’s a simple way of looking at the question. If one’s personality is known to be people and community oriented with the ability to follow all the rules, then franchising might just work. But if a person is known as constantly independent or bucking the system, they should not buy a franchise.
Of course there are many other considerations but these are important ones in the buy or not to buy a franchise decision.