Should I Open a Franchise? Advice from the Experts
Have you long wondered whether a franchise is for you? There are thousands of franchise opportunities, but figuring out which one is for you and if you've got what it takes to succeed as a franchise owner can be overwhelming.
Ray Barton and Rhoda Olsen, the brother and sister Chairman and CEO of Great Clips, the 3,000-unit hair salon franchise, offer BusinessNewsDaily readers some advice on who generally makes a successful franchisee and what you should consider before buying a franchise.
BusinessNewsDaily: What should people consider when choosing a franchise to buy?
Ray: There are several important factors to consider when you’re considering buying a franchise. One big decision you have to make is whether the investment required is comfortable for you. [A Great Clips franchise can cost between $108,000 and $203,000]. If you have to stretch too much, it could easily lead to bad decision-making down the road. This isn’t one of those lessons you want to learn the hard way. Avoid creating stress by getting in too deep financially.
Always be sure to consider whether the franchisor is strong and reputable. Do they have a solid system with helpful franchisee support? Is their marketing going to help you attract customers? Are they financially strong?
What you can learn by talking with a company’s franchisees is invaluable. Make sure you ask around and ask thorough questions. Most franchisees will be pretty frank with you and their insight can save you a lot of heartache down the road.
Rhoda: I think the primary consideration is the role that they want to have in the business. Many franchisors offer a hands-on opportunity; other franchisors offer more of a management opportunity. Do they really want to do a specific job every day? Do they want to lead an organization? Do they want to manage managers?
The key question they need to ask themselves is what they see themselves doing on a day-to-day basis, and find a franchise concept that fits the role that they want to have.
BusinessNewsDaily: What is the biggest misconception among franchise owners about what owning a franchise will be like?
Ray: Being a franchisee is a lot of work. I think a lot of people come into it thinking they won’t have to do much to be successful. A strong franchisor will give you absolutely all of the tools you could ever need, but you are ultimately responsible for building the house. The franchisee is the leader in their organization, and they will determine the success of their business.
Rhoda: It’s really hard to identify the biggest misconception, but I do think one of the issues that franchisees face is having a clear expectation of the role that both the franchisee and franchisor will play.
For instance, some franchisees may have a misconception that the franchisor is going to do a lot more for them than they actually do. But in other cases, the misconception may be that they will have a lot more autonomy than they really have in a franchise structure.
So, in order to prevent misconceptions, franchisees should get a clear sense of the expectations that they have and the role the franchisor will play in their business.
BusinessNewsDaiily: What advice would you give to a new franchisee who has never run their own business before?
Ray: Do your homework, and make sure you are excited about the daily activities – not just the thought of having your own business.
Don’t get distracted by all of the little aggravators that pop up along the way. Stay focused on the things you can control.
I know it sounds cliché, but the single best piece of advice I can give is to work hard. If you’re following the best practices of a solid franchise model and you’re willing to work hard, I’d say you’ve got a great shot at success.
Rhoda: If a franchisee has never run their own business before, they need to be willing to work hard, they need to be open, they need to listen and they need to be willing to learn.
They also need to understand that owning your own business is a roller coaster, and there are a lot of ups and downs. They need to be able to look down the road and see the business they will build and not get discouraged with the ups and downs of owning their own business.
They should also be very cautious about expectations and have a financial plan that covers a wide range of initial results.
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