Franchising is deep water. Learn to swim first.
Part 1 of this article compared mythical Greek sailors to business owners who are tempted to franchise a business. The sailors and the entrepreneurs were drawn into dangerous waters by temptation.
Well-wishers are the catalysts that set events in motion, but when a business owner says ‘I’m going to franchise my business’, sirens and well wishers will show up. Watch out, it’s usually a mirage.
To understand the well wisher’s role is to understand they are usually a temptation and a distraction to the real work of analyzing whether or not franchising is a good idea. But, they can do a lot of damage. They motivate owners to take risks while taking none themselves. A casual comment from a customer like “you ought to franchise your restaurant” echos over and over again in the owner’s mind, but the customer has no real interest and should have no influence on such a decision.
Here’s an even more ludicrous scenario, one that does exist. The owner declares “I’m going to franchise my business’ and a friend or customer suggests they might be interested in being a franchisee. The hopelessly hooked owner begins a franchise site search on the way home that evening ‘just in case’. Don’t laugh, it’s true. Franchising can be addictive and if you’re caught up with a franchise mindset, then you know it’s a drug too.
Although temptation can numb an owner to the realities of franchising, real danger can finally appear in the form of franchise consultants. They’re the ones with the power to catapult the entrepreneur headlong into uncontrolled flight.
Encouragement from a franchise consultant plus an entrepreneur’s excitement is a force that must be halted and analyzed. Why are franchise consultants so powerful in this scenario? Because they provide what the entrepreneur sees as real expertise, real authority, and living proof that franchising can become a reality. ‘Certainly this consultant knows I’m on the right road.’ Yeah, right, the road to failure if real objective study of the project is the first order of business.
This onslaught of hype and salesmanship from so many franchise consultants is not only more powerful than the customer, friend, or banker, it is far more dangerous because the franchise consultant, really has the power to start the engine. The most interesting phenomenon concerning the appearance of the encouraging consultant is that the entrepreneur contacts the consultant, and guess what, the consultant will be happy to earn a fee. So, of course it’s a great thing – at least for one party.
“Franchise My Business” is a hypnotizing statement
The franchise consultant is not necessarily the enemy, but if encouragement is offered before a deep investigation is completed, then that consultant IS the enemy. The services of a good franchise consultant are essential to the process and to franchise without quality help is as insane as the decision to franchise prematurely, or the decision to franchise at all. Only YOU should make the decision based on facts not emotion.
There are disreputable and poorly qualified franchise consultants, just as there are bottom feeders in any field. The most difficult thing facing a prospective franchisor is choosing a consultant who: 1. knows what they are talking about, and 2. has the integrity to say, “don’t do it”. Franchising is federally regulated, but there are no regulations for franchise consultants.
Consultants earn their money by consulting, so if they are given an order to franchise, then franchising will happen. Unfortunately, business owners are not in the best place to look objectively at the whole picture. To make a good decision both the business AND the entrepreneur need careful, objective evaluation, and it is very hard to objectively evaluate ourselves.
If a person decides to franchise, the winds will howl and the sirens will sing until the deed is done. However, the savvy business owner will do what the smartest Greek ship’s master decided to do about sirens. He covered his ears so he couldn’t hear the siren’s song, and sailed past danger. A true feasibility study, not a sales pitch, is the surest course to peaceful waters if you are interested in franchising a business. And last, a successful business owner must trust their gut. That sixth sense had a lot do with with their business thriving.