Do Business Well

No franchisee can hope to succeed in a franchised business unless the underlying franchise opportunity is inherently sound. And although this is a prerequisite, it is not enough. No franchise offer should be seen as a passport to business success that comes complete with built-in guarantees. The best a franchise can ever be is a blueprint that has been tried and tested by the franchisor and has been proven to work.

Whilst the blueprint must be followed by the franchisee, it will be his investment, his hard work and his dedication to the business that will ultimately determine the success of his business. Prospective franchisees should also ask themselves the following questions:

• Am I suited to self-employment? It is important to remember that a franchisee is not a glorified manager. He has to take control and accept responsibility for every facet of operations. The proverbial buck will stop with him and mistakes will generally be for his account.
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  Will I be able to cope with the demands of operating a small business? Requirements range from long hours of hard work, necessitating robust health, to a willingness to put one’s family and social life on the backburner, at least for a few years.

• Do I have the necessary qualifications and / or aptitude to succeed in this specific business? Although extensive initial and ongoing training is a hallmark of franchising, and the franchisor will be there to help, operational responsibility rests with the franchisee and, as the saying goes, “you cannot delegate what you cannot do yourself”.
• Will I be happy in the type of business the franchise is engaged in? Research has shown that while prospective franchisees tend to dismiss this question as being irrelevant, claiming that they do not really care what type of business they will be in as long as it enables them to earn lots of money, established franchisees disagree. Experience has taught them that lack of enjoyment of the work they are forced to do on a daily basis will impact negatively on their chances for business success.
• Can I afford the business? If the franchise you are considering to acquire costs more than you can really afford, take a step back and think again. The franchisor’s financial projections are merely an estimate of what is likely to happen. His experience and his proven bona fides notwithstanding, and no matter how promising the research into the potential of your business may look on paper, performance can never be guaranteed. On the other hand, loans will have to be serviced and all expenses paid by due date.
• Shortage of cash, even if it is perceived to be only temporary, can cause serious problems for a new business. There are few things more tragic than a situation where a promising new business is forced to close its doors because of under-capitalisation. It will be much better to face reality up front and accept that it could take a little longer than expected to achieve a positive cash flow. This way, you can prepare for this eventuality in advance or, should this prove to be impossible, walk away from the deal. Eventually you will come across an opportunity that is within your price range.
• Am I prepared to comply with the terms of the franchise? Although you are the boss and own the infrastructure of the business, operational restrictions will apply. The nature and extent of these restrictions will vary from network to network, but the principle remains the same: as a franchisee, you will be expected to operate the business in accordance with the guidelines that are contained in the Operations and Procedures Manual. Unless you can see this as an advantage that protects you from making costly mistakes, a franchise is not for you.

If you want to become a franchisee, do your homework first. Learn all you can about franchising and shop around for a while before honing in on one specific opportunity. Investigate it thoroughly, including the financial implications of this step. Make sure you like what you find out and do not make the mistake of thinking that if you ignore something long enough it will simply go away. It generally will not and if you have to accept this unpalatable fact after you have made a series of firm commitments, changing your mind would be an expensive option at best.

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