Buying a franchise may seem like an easier path to business ownership, but it has its own pros and cons, which Carol covers in “7 Things To Do Before Becoming a Franchise Owner,” her recent post on the Bank of America Small Business Community. Carol begins:
One of the universal truths about entrepreneurship is that it is difficult. Creating a business involves a lot of time, capital, connections, pivoting and a bit of luck. For some people who want to do something on their own but don’t necessarily want to start from “Square One,” franchising can be a great option.
While it is less creative, the benefits of franchise ownership include a proven market concept, assistance on site locations, marketing, purchasing, build-out (if a physical unit) and much more. Getting to start at “Square Three” can improve the odds of success, although it does curtail part of the upside. That tradeoff can be well worth it, depending on your objectives.
But, as with any entrepreneurial endeavor, you must research and evaluate before rushing into starting a franchise. To help you know what you need to know, I reached out to “The Franchise King,” Joel Libava, who teaches individuals how to make smart, fact-based decisions on buying a franchise and is the author of Become A Franchise Owner. Here are his top recommendations of what you need to know and do before going into the franchise evaluation process.
1. Know Yourself. Not everyone was cut out for entrepreneurship and the same can be said for franchising. Libava says that you need to make sure you are the right type of person to own a franchise.
For example,” says Libava, “ask yourself, ‘Am I a rule follower?’ If so, franchise business ownership is worth a look. But, if you’d rather be the person who makes the rules, and/or likes to break them, owning a franchise will turn out to be a miserable experience for you, as the franchise business model is very rigid. If you become a franchisee, you’ll be expected to follow everything to the letter. Remember, when you buy a franchise you’re buying a business system. One that needs to be followed for it to work.”
Libava also created a free quiz to help you assess if you are a good fit for franchise ownership, which you can take here.
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