If I were ever to open a retail store or restaurant, I'd do well as a franchisee.
Most true Virgos would. We like order, predictability, and we work well within guidelines set by others.
When entrepreneurs consider going into business, the question of whether to purchase a franchise or begin an independent business from scratch is usually one of the first questions considered. The answer to this question can be found with a good deal of self-exploration. There are certain character and behavior traits which make for a better franchisee than others. Generally, the cost of purchasing a franchise is higher than the start up costs of beginning an independent business. But even the financial considerations pale in importance to the larger question of whether you're cut from the right cloth.
The pros and cons of owning a franchise are only reflected with consideration of an owner's personality. For example, a franchise offers a solidly tested business model with a clear set of operating rules which the franchisee is legally bound to follow. Everything from signage to products, advertising to hours of operation, are set out in advance without room for any deviation. If you're like me, and feel more comfortable living with clearly defined rules rather than having to make your own, this would be a pro for you. But alternatively, independent spirits who consistently need to find their own way in life and learn from their mistakes would feel stifled by the rules of franchise ownership.
Likewise, if you find the notion of marketing your own business loathsome and would rather receive a root canal than network or learn the intricacies of advertising, having a franchisor make the marketing decisions would work well for you. As a franchisee, you'd be bound to pay into an advertising stream that is turned over to the franchisor's marketing team to spend. Instant brand recognition would result from someone else selling your product for you.
This may feel somewhat constricting to entrepreneurs who don't see any great local value in national advertising buys. Someone with a creative streak would need to have greater control over their marketing budget and may also want to try innovative or non-traditional advertising. Giving up this control to a corporate head office would only frustrate an independent and creative entrepreneur.
Asking yourself some soul searching questions regarding your personality fit for a franchise is the first step when considering the right business model for you. Professional help from an attorney specializing in franchise contracts and a professional business plan consultant will also help you determine the best course of action.
Until next week, stay in the black and keep coming back.
