I recently asked a major multi-unit franchisee, who also happens to be a single brand franchisor, why he decided to add yet another brand to his portfolio as a franchisee as opposed to starting another franchise as the franchisor. His answer? It was simply simpler.
Being a franchisor is not easy – and to build a business from scratch takes a significant amount of capital, patience, and foundation. For start-up entrepreneurs with no baggage, this may seem like the easiest path, however, if I had a dollar for every start-up franchisor begging for leads and prospects to award units to – I would be rich.
The reality is – franchising is tough. To get someone, like you, to buy into the vision of the brand, follow through, stay emotionally bonded and ultimately become successful is like winning the lottery. And, you have to win that lottery over and over again to build a legendary brand.
To buy a franchise or to not buy a franchise, that is the question.
The answer comes in yourself and your foundation. What have you done in your past to solidify the potential success of your future? Have you prepared your plan? Do you know what success looks like?
When buying a franchise, you erase some of the unknown. Certainly, not all unknowns are unlocked when taking the leap into business ownership, but franchisors, if they have done their job properly, have done their homework and tried and tested the brand. They have a good glimpse at challenges you will face as an entrepreneur and they will face as a franchisor. They have the process down. They know how to market. They understand the value of support. They know what it will take for you to be successful – and it is up to them to say yes or no to you, the prospect. If they think you will succeed, then they should put you through and let you into their protected system. If they think you will fail, it is under their integrity to say not now.
Becoming a franchisee is not as simple as you saying you want to buy brand X and brand X taking your franchise fee and collecting a royalty from you. However, because the playbook is already written, you have a better shot at succeeding. This is why a higher percentage of franchises are still operating at the 5-year-point versus start-up businesses.
Success is never guaranteed. You cannot open your doors and magically make money. You have to be willing to work hard and work right to be successful. But, the blueprint for success is outlined for you. If you follow it, you will have less headaches than starting up something from scratch. A few less headaches isn’t a bad thing, nor is the fact that they, as a franchisor, have created a strong product, have the territory available that you want, know how to guide you to profits and have the leadership to support all of the above.
Starting a business is not easy. Many people have succeeded at it. But perhaps the path created is the easiest path to ultimate business success.