Is This The Marriage For You?

Franchising, by its successful nature, requires certain controls to protect the investment of all franchisees, the franchisor, and the image of the product. One of the most important considerations is how you will react to, and operate within, these guidelines. Consider all of the elements as a whole before you make your decision. There are three career strategies you should consider. You can continue being an employee, or you can be self-employed. If you choose self-employment, there are two options: an independent business person, or a franchisee. As an employee, you are dependent on your employer, but as an independent business person, the responsibility for the success or failure of the business rests totally on your shoulders. You are truly on your own. However, as a franchisee, you are entering an interdependent relationship where you are in business “for yourself but not by yourself”. The strategy you choose depends largely on your personal type.

FRANCHISING IS NOT FOR EVERYONE

For one reason or another, you are out of a job and your personal and financial obligations probably require that you change that situation quickly. What now?

DO YOU READILY ACCEPT

THE PREMISE OF THE

FRANCHISOR

THAT ITS CONTROLS

AND

SPECIFICATIONS

ARE REQUIRED TO

ASSURE THE

PRODUCT

QUALITY,

STANDARDIZATION

AND UNIFORMITY

NECESSARY TO PROTECT

ALL FRANCHISEES

AND THE

SYSTEM INTEGRITY

IMAGE AND GOODWILL?

Take a long, hard, and honest look at yourself and evaluate who you really are. Consider your strengths and weaknesses, your abilities and needs.

Would you really prefer another job, if you could find one? Is self-employment something that you have never even remotely been interested in? Or is this downsizing really a blessing in disguise, an opportunity to get out of the corporate rat race? You were always on the edge anyway, a maverick, weren’t you? This downsizing finally gives you the opportunity to start your own business, where you can really do your own thing. If you fit into either of the above groups, then franchising is probably not for you. In the case of the person who prefers employment to independence (and there is nothing wrong with this type; after all, bank presidents and prime ministers are employees), there is too much independence in this relationship for you to be happy. Take this opportunity to go back to school, upgrade your skills or dust off your resume and hit the “looking for work” trail. However, for the maverick, there is altogether not enough independence, and “doing your own thing” is frowned upon by franchisors. The best thing for you to do is become an independent business person.

Investigate, before investing, THE CONTRACT.
Generally, contract terms are not negotiable. Most contract stipulations represent essential points of the franchise system
and are included for well-tested reasons.

BUT IS IT FOR YOU?

So now that we know franchising is not for everyone -- is it for you? To be successful in franchising you need to be positive, enthusiastic, upbeat, hard working, self-motivated and have good people skills. You must be adaptable and flexible enough to fit within the framework of an established system, conform to it, follow instructions, accept supervision, welcome direction, and work as a team player. At the same time, you must be independent, self-reliant and resourceful. Is this you? Be honest -- your future depends on it!

Does the franchise area truly interest you? Do you have education or experience in this field? Can you manage others? What has your personal history been in this regard? Would you enjoy and are you capable of meeting additional training requirements? Are there physical limitations? How involved will you be in the operation of the business? Do you have the required funds or financing options? Will the franchisor accept these conditions of agreement? Are you committed to following the franchisor’s formula for success?

When you have answered these questions, you will know yourself better, and what type of business is right for you.

Statistics popularly estimate that 80 per cent of new independent businesses fail within the first five years, compared with just 20 per cent of new franchise operations. However, that doesn’t mean franchising is the perfect solution for everyone, or that it is without risk, particularly in new franchise systems.

DISADVANTAGES

Here are a few of the disadvantages you should consider:

The obligation to strictly adhere to all aspects of the system may become frustrating for certain individuals.
Few franchisors will award franchises to investors who do not intend on being actively involved in operating the business -- so non-participation is not really an option.
You are a part of the whole. The franchisor/franchisee relationship is interdependent and the difficulties experienced by another outlet or the franchisor could have a negative impact on the franchisee’s business.

Conversely, for individuals com-fortable with the structured system, franchising can provide financial security and a sense of personal achievement.

Pause to re-examine your personal suitability to operate a franchise by answering the following question with a “Yes”. Do you readily accept the premise of the franchisor that its controls and specifications are required to assure the product quality, standardization and uniformity necessary to protect all franchisees and the system integrity, image and goodwill?

As a franchisee, you will be expected to read, under-stand, and comply with the terms and conditions of your contract. Submit the contract to an experienced franchise lawyer. Be sure to convey your objectives to your lawyer and your discussions can then clarify any areas of confusion and misunderstanding as they relate to your objectives.

Generally, contract terms are not negotiable. Most contract stipu-lations represent essential points of the franchise system and are included for well-tested reasons. The quality and operating control sections should be structured to preserve product uniformity and quality, thus protecting the business image, all franchisees, the system, the franchisor and the public. If bargaining of these elements were common, eventually the image and goodwill of the franchise system would erode -- along with your investment.

If a franchisor appears willing to bargain away the quality and standardization controls in order to get your initial cash, you should look elsewhere for a franchise opportunity.

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