If you’re trying to understand what a franchise really is, look no further than the most popular international fast food restaurant you can think of. It doesn’t get any easier than that! It would be a dream come true for many people around the world to own and run a fast food franchise like that which serves food to people every hour of the day, all around the globe. However, dreaming is not the best way to make business decisions. You have to really think and think hard about whether opening a franchise business is really worth the trouble for you. Would you really be happy and fulfilled?
So is owning a franchising business, also known as a store front business, something that really lives up to its hype? Or will it be the worst thing that happens to your career?
The earliest problem you’re likely to face is getting the necessary funds. Money is most definitely a difficulty for many.
Say you’d like to become well versed in the business of running a universally recognizable fast food restaurant. For you and people like you to attend Hamburger University, located in Chicago, you’d have to have a net worth of at least one million dollars just to be considered for attendance! Imagine that before you even step foot into the fickle world of the franchising business, you’d already have to be relatively richer than many others. Of course, a traditional business set up isn’t that much cheaper, since you’ll need around a quarter of a million dollars to initiate that. If there’s no way you can come up with this sort of money, best that you not finish reading this article.
Then comes another problem, which is the high risk of failure. Roughly 70 to 80% of all store front operations end in failure after a very short life of no more than 2 to 5 years. Not surprising, if you really think about it , since the average small business entrepreneur doesn’t really start pulling in profits at a regular enough rate as quickly as you’d like to believe.
Next comes the issue of all the hard work and effort required. Since you’re planning on making this business your baby and trying to make it as successful as possible, no ounce of your energy should be spared in doing so. An average work day will normally range between 15-18 hours. Maybe the rewards early on won’t make all that work seem fruitful. So in addition to all this hard work, you’ll have to be patient enough so that you won’t simply throw in the towel a few years down the road and convince yourself that you’re way out of your league in this line of business.
Last but not least are franchise fees. These fees may be the ultimate bane of your existence, since they can significantly cut into your earnings. Consider this in addition to your normal business related expenditure and you’ll realize that maybe you won’t be filling your pockets with as much dough as you had initially imagined.
In the end, you have to understand that thinking a franchising business is the magical solution to all your financial worries is an extremely naive idea, indeed. However, not all hope is lost. Using the necessary tools, training and good sense can help you avoid falling into the disadvantages of franchising and hopefully you’ll be one of those who succeed.
The Top 4 Problems With Going Into Franchising - To learn more about this author, visit Sebastien Page's Website.
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Dianne Crampton
Dianne Crampton is an Executive Leadership Coach and Team Building Consultant and creator of the TIGERS team development model. For the past twenty years she has helped leaders and teams achieve goals with high levels of collaboration and teamwork.
Crampton is a published author. Her contribution to Working Together: Diversity As Opportunity was endorsed by Stephen Covey. She has written for trade magazines. Merrill Lynch nominated her business for Inc. Magazine’s regional small business and entrepreneurial awards. Her work with Native Americans was recognized at a United Nations sponsored conference in 1994.
The TIGERS model passed two rigorous validation studies in 1992 and 1994. The TIGERS Survey is able to measure and track team development over time.
Dianne is also the creator and distributor of the TIGERS Team Wheel game. This game helps groups identify behaviors that build collaborative groups and behaviors that cause conflict, morale problems, production failures, and misunderstandings.
For more information, or to subscribe to TigerTracks, a free monthly leadership and team newsletter go to http://www.corevalues.com - Visit Dianne Crampton's Website |
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Sebastien Page
(Visit Sebastien's Website)
Sebas
tien Page is Director of Marketing for
Wo
rldFranchising.com, the most
comprehensive information resource for
potential franchise buyers. The company
also publishes franchise best sellers such
as Bond's Franchise Guide, and Top 100
Franchises Guide. Before joining
WorldFranchising.com, Page was Marketing
Manager for Franchise.com where he
successfully led the Marketing Department.
Sebastien Page is very active in the
franchise community and he often writes
about franchising, sales and marketing.
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