Reasons Why You Should NOT Buy a Franchise - From a Franchise Coach

You read the headline right, I’m going to tell you why under what circumstances you should not buy into a franchised business concept. Why am I telling you this? For some people, owning a business (franchise or otherwise) is probably not the right life choice. For those born to be entrepreneurs, owning a franchise business is probably not the right choice. But for some, franchising can be the perfect choice for a new career, a different investment, or both. Here are some good reasons NOT to buy a franchise (or maybe any business):

• YOU NEED AN IMMEDIATE PAYCHECK
  Rarely does a new business start cash flowing on Day One. You need to be realistic in terms of projecting when you’ll be able to draw a paycheck, and make sure you have adequate reserves, or another source of household income to sustain you and your family for at least 6-12 months. 
• YOU’LL BE RISKING EVERY PENNY YOU HAVE TO LAUNCH THE BUSINESS 
  The pressure and sleepless nights will not only be detrimental to your health, but can also lead to poor judgement and decision-making which will detract from your likelihood of being successful. 
• YOU THRIVE ON 100% CONTROL 
  The key to success in franchising is consistency and adherence to a proven system. Your customers know what they are getting before they walk into the door, whether it’s a product or service. It doesn’t matter who owns the McDonald’s, you know what the Big Mac tastes looks and tastes like. You are buying a name brand and an operating model. You cannot change that brand. “Oh, the Big Mac isn’t selling well, but let me call it the Mega Mac – that will change things!” There may be certain vendors, supplies and programs that you have to stick with as part of the franchising agreement. If you think you have invented a superior product and/or business system, then perhaps you should consider starting a business from scratch, as opposed to joining a franchise system. 
• YOU ARE LOOKING FOR A LIQUID INVESTMENT 
  You are making a commitment and a significant investment when buying into a franchised business concept. This cannot be liquidated on the spot, should the need arise. Remember, just like most businesses, it may take you time to make back your initial investment or cash out if you decide to sell. 
• YOU DON’T HAVE A COMPELLING REASON FOR BEING IN BUSINESS FOR YOURSELF 
  It’s not enough that you’d think it’d be fun to “Be the Boss” or you have a passion for a particular product or service. Business ownership is a huge commitment, and should only by attempted by those that have the transferable skills necessary to be successful, and have sound reasoning for taking the risk, such as a resolve to never working for someone else again, or not wanting to have your money subject to the roller coaster stock market. 

At FranNet, we believe that business ownership, whether through franchising or otherwise, only makes sense for the select few. That being said, we’ve seen lots of folks that have what it takes, including a compelling reason for being in business, achieve freedom, independence and fulfillment by selecting and managing a franchise that FITS their goals, transferable skills, preferences and lifestyle requirements.

If you’re wondering if you could be one of the “select few”, take a look at our upcoming FREE events and webinars listed on the right. You can also contact me at 616-891-1374 or bbetser@frannet.com to discuss your unique situation. We’re here to help you decide whether franchising and/or business ownership might be for you, and if so, how to go about finding the RIGHT fit. Don’t forget to also visit frannet.com/bbetser.

The First Franchise

Franchises have become a staple of the American economy. Just think of how many franchises you come across on a daily basis. Even if you don’t leave your house for a day, you will see advertisements for dozens of franchises on your television.

So, where did the first franchise begin? What was it?

Have you heard of the Singer Sewing Machine?

Isaac Singer didn’t invent the sewing machine. But he developed a simplistic sewing machine that could be adapted to home use – getting a patent for his invention in 1851. He even sold his machines using an installment payment basis that allowed more people to purchase his machines.

The Singer Sewing Machine sales skyrocketed over 500% during a four-year period. Isaac was able to start mass-producing his product with interchangeable parts. But, how could Singer’s company repair these machines across the United States?

The solution to this problem gave rise to the first franchise system. Singer started by licensing out servicing and repairs to local merchants around the country. Later, those merchants were allowed to become regional salespeople for the machines as well. These rights were all conveyed via contracts.

Franchises are Proven Business Systems

Singer’s franchising system was a success because his sewing machine was a quality, differentiated product AND he developed an efficient, effective system for selling and servicing it. This is the biggest benefit of franchising; you are using a business system that has a track record of producing successful results. There are no guarantees in business ownership and entrepreneurship, but with research, due diligence, and working a proven system, you can give yourself a distinct advantage.

Another way to give yourself an advantage? FranNet. Our exclusive franchise matchmaking system and research plan helps to pair you with a business concept that best fits your transferable skills, personality, budget and lifestyle requirements. We offer choices in many different categories, to help you discover options you may not even be aware of, yet may provide a great fit for your unique profile!

Franchising as a Career, an Investment, or Both

Join me for my upcoming FREE seminar, "Business Ownership Options." This event takes place on Wednesday, November 19 in Grand Rapids, MI. Learn franchising basics, including the array of categories and investment levels available (starting at around $50k), and how to go about defining your own personal vision, matching that up with viable choices, and conducting proper due diligence to make sure you are selecting the RIGHT fit for YOU!

For more information and to RSVP, please visit frannet.com/bbetser.

And, as always, all of my services and consultations are FREE! Please contact me at 616-891-1374 or bbetser@frannet.com.