As a franchiser and a strong believer in the franchise business model, it might be surprising to hear me say that franchising is not for everyone, but it’s true. There are certain reasons that would (and should) deter even the best entrepreneur from becoming a franchisee:

1.       The opportunity you’re looking for doesn’t fit a franchise mold.

There are lots of franchising opportunities available and odds are you will probably be able to find an opportunity that fits your particular interest… unless you’re interested in an industry that really shouldn’t be franchised. Certain businesses simply do not fit a franchise model, such as a farm or a computer chip manufacturing plant. The process of franchising consists of fragmenting and spreading a business over a more widespread territory – in the case of a farm or computer manufacturing plant, taking business away from the epicenter in order to “expand” would only weaken the company. If you are set on franchising, make sure it’s for an industry that can support successful franchises.

2.       You are not well-financed

Do you have the money to franchise?By the nature of the beast, when you buy a franchise you are going to spend thousands of dollars at the beginning. You are paying for the years and years of research and experience that multiple owners, founders and partners have utilized to create a successful, well-supported system – think of it as your “tuition.” Keep in mind that this franchise fee costs much less than the costs of the mistakes you will make if you try to start a company on your own. It is worthwhile to avoid those mistakes that only experience can prevent by buying into a franchise. But if you don’t have capital for start-up, you won’t be able to buy into a franchise and you certainly won’t be able to finance a start-up business of your own. If this is the case, try being an employee for a while. Make money while gaining experience until you have the money and ability to run a successful business.

3.       You have a strong independent streak

Many subscribe to the idea, “If you want something done right, you have to do it yourself.” That mentality will destroy an organization. Successful franchises are based on a team effort, especially within a service industry like Five Star Painting or Five Star Holiday Décor. Running a business takes a lot of knowledge and experience in a number of different specialties. For a franchisee to be successful he needs to trust the corporate team’s expertise.  Five Star, for instance, provides personalized websites complete with a slew of search engine optimization and management

'Lone Ranger' types don't want to rely on others to get the job done.

'Lone Ranger' types don't want to rely on others to get the job done.

campaigns. We also provide a comprehensive 24-hour sales and support center complete with a first-contact lead system, marketing planning and management. Franchisees are also provided the Five Star branding as well as in0house software that produces accurate computerized estimates, reports and customer tracking.

There are some people who feel a strong need to be in control of everything, that it has to be done their way. They believe they’re “my customers” and no one else can talk to them. That’s the individual that wants to be in business all by himself – book keeping, finance, every single department run by himself.  These types of people make great consultants. They can be a successful one-man show, but they can’t run an operation. If you’re looking into starting a business but aren’t looking for help, franchising is not for you.

  1. Chad R. Jones » Blog Archive » Why Franchise? Said,

    […] a higher start up cost, and it’s not for everybody (as Scott Abbott discusses beautifully in this article). But why SHOULD you buy a franchise? What can you get from a franchise that’s not available […]

  2. Chad R. Jones » Blog Archive » Why You Should Franchise Your Business Said,

    […] to know if your business is suited for franchising? Check out Scott Abbott’s blog “When ShouldYou NOT Franchise?” and “Why Did You Franchise” at http://www.dscottabbott.com. « Getting Started […]

Add A Comment

Subscribe to D Scott Abbott
Copyright© 2009