Starting a business from scratch isn’t always the right option for everyone. When starting a business from the ground up, there are several obstacles one must overcome before generating large profits is a reasonable goal. From finding a foundation to discovering the dos and don’ts of running a business, building a well-known, trusted company can take years. For an entrepreneur looking for a quick turnaround, that may not be the route to take.
Over the years, franchising has become a popular option for those looking for a career change or to simply invest in themselves. For these individuals, owning a franchise cuts out many of the questions that the owner would have to answer on their own when starting from the bottom. Franchising provides a proven business model, brand awareness, purchasing power, training and more.
If you partner with the right franchise system, you also reduce an enormous amount of risk. For decades, franchise models have shown greater success than non-franchised businesses. In addition, the ability for a franchise owner to network with existing franchise owners is powerful. A franchisee is in business for themselves but not by themselves.
With a franchised business, you are building wealth and providing for an exit strategy down the road. Many franchise owners also seek to build something to pass along to their children. When it comes to a franchise, you are developing a sellable asset as opposed to just getting a paycheck. In addition, franchise owners “control” their destiny, which many lists as a major benefit on making the leap into entrepreneurship.
While the benefits of owning a franchise have been documented, many may still struggle with the question, is a franchise for me? Here are some ways to make that determination.
Can You Follow a Proven Business Model?
One thing that makes franchising a popular option for entrepreneurs is the established business model. Many franchises have been around for years and have created a model that works for their company. For new franchisees, this system can prove to be beneficial. No longer does the franchisee have to worry about what products or services will be successful because the franchisor already developed a system that has been proven. The business model helps guide franchise owners in their journey while still offering the flexibility to tweak a few things to better fit their goals and community. If you are an entrepreneur who can follow a proven business model, you may want to consider franchising as an option.
Are You Willing to Engage with the Franchisor and Franchisees?
A major part of joining a franchise is the relationships that are built with both the franchisor and other franchisees. Forming a family-type unit, the franchise owners support each other by trading ideas and answering questions for new franchisees. The franchisor-franchisee relationship offers a mutual partnership that can help generate growth for both parties. A perfect example of this for PostNet came during the height of the pandemic. Utilizing information about demands from our franchisees, our marketing team was able to aggressively pivot to new growing verticals while also getting our franchisees the proper tools they needed to succeed. It’s that relationship that makes franchising an optimal choice for those who are willing to engage with the franchise’s internal community.
Are You Passionate About the Business Model, Product or Service?
Not all franchises are built equally, nor is every franchise for entrepreneurs looking to buy. It is important for franchisees to fit the culture of the franchise for the mutually beneficial relationship to work. Culture is an important aspect of any business partnership. At PostNet, we emphasize culture fit over many things. For us, it doesn’t matter how much money is involved, if the culture fit is off, you won’t be awarded a franchise. Being passionate about the overall franchise and its products or services is a must if you want to consider franchising as an option. Do your homework and make sure you feel there is a “partnership” culture between the franchisees and the franchisor. Speak to several franchise owners during your due diligence. Follow these tips, work hard and follow the franchise model and you’re likely to build a successful business for yourself and your family!
Resources for Potential Franchisees
If you determine that franchising is right for you, there are some resources that can be utilized to gain more knowledge and support in your search for the right franchise.
- International Franchise Association: The IFA is the world’s largest membership organization of franchisors, franchisees and franchise suppliers. They provide industry events, advocacy, education and growth opportunities to the franchise community.
- Street Smart Franchising: This book helps those interested in purchasing a franchise learn what they need to know before buying a franchise and what to expect using real-life stories from franchise owners.
- Small Business Administration: In many cases, new franchisees will be operating a small business in the community. The small business association website provides useful tools and information to small business owners.
Written by Ryan Farris.Track Latest News Live on CEOWORLD magazine and get news updates from the United States and around the world. The views expressed are those of the author and are not necessarily those of the CEOWORLD magazine.
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