Is A Small Franchise Business Right For You Or Is It Just Another BIG Headache?
There is a thought out there in the business world that buying a franchise business is a the only way to fight off the threat of debt right now and over the next number of years. Let’s face it, franchise businesses tick the boxes in more than 75 different industries and the chance to find a franchise suit that fits you seems pretty good, doesn’t it? But that’s the surface of this complicated skin. We have to know what’s beneath the franchise business skin when you decide to scratch it.
Franchise businesses contribute a large amount of revenue to the US economy and with the growth and ongoing expansion of the franchise business model across the globe, it’s no surprise that more and more everyday people turn to the franchise option as an answer to growing debt and fear of unemployment. But to be successful in operating a franchise business takes more than just a bit of good fortune, the key to success is in finding that perfect fit between franchisee and franchisor.
The franchise business model can look like a sure fire option if you’ve not gone into business on your own before and if the thought of starting out in business sends shivers down your spine you have to ask, is it the answer you were looking for or a franchise horror story? Many will have you believe that a franchise business is guaranteed to bring you the success you desire but when it’s your hard earned money behind the investment the decision rests with one person. You.
Today there are literally thousands of alternative franchise businesses to look at for the would be entrepreneur and with no shortage of options it should be easy to find the right fit. But, a lot of fish in the sea doesn’t guarantee a good catch, so before you cast your net make sure you’re looked at all the options.
Franchisee survival rates are similar to independent start-up survival rates over a 5 year period and the truth is that less than 20% of people starting in business for the first time make any real money from it franchise or no franchise. Generally, the parent companies try to offer territories to their franchisees to try to protect them from competition and ensure that the market is not overly saturated but this isnt easy and you only have to look at your local High Street to see how many coffee shops have come and gone in the last five years due to the competition within this particular franchise area. Franchising has always boasted about its high success rate and its low failure rate, but the general figures have masked some terrible stories where franchisors and their banks have given franchisees a very rough time. So, if you are planning to start your own business and looking at a franchise as one of your business options do some research first before you get in too deep and find your franchise sinking in the economic mud.
Even though the franchise agreement is a legal document intended to protect both the franchisor and franchisee, the difficulty comes when the franchisor goes broke and the franchisee is left wondering if they can keep their franchise business intact or if it will sail down the river along with the franchisor. For some, the arrival of a new franchisor can bring a new set of arrangements and with your money at stake it is vital you do a heap of background checks and detailed research before throwing your savings or redundancy into the franchise business pot.
There are a lot of legal and financial obligations on you as a business owner and owning a franchise is no different, so do your background work and ensure you fully understand your liabilities when it comes to tax and other franchise business costs. Remember, nobody ever failed by asking too many questions and doing too much research, so visit other franchise businesses beyond those your franchisor recommends and ask as many questions as you can think of before committing to passing over the family fortune.
In the end it all comes down to profit like any business model. With so many business options to look at, from food chains to real estate, the franchise business model can be an alluring alternative to starting a traditional business for the first time but don’t be fooled into thinking it’s an easy ride. It isn’t.
Don’t forget, over 90% of people say they want to start their own business but less than 20% ever do. For some, it’s never the right time, for others it’s never the right business and for some it’s a long list of excuses. For you, starting a business is about one thing, so throw out any preconceived ideas and expectations, take your time to look around and see what other options are out there and commit to finding one thing; a business that is right for YOU.