We get asked all of the time, “Is a franchise right for me?” We’ve tried to answer this question in our short 6 minute video below.

Here is the Video Transcript

Hi everybody this is Brett Payne. I get asked the question all the time, “Is buying a franchise the right thing for me to do?” Well, there are a couple other indicators to let you know if it’s something that’s going to fit you or maybe it’s something that you should avoid.
Let me give you a couple of those indicators.

First of all, its is probably not a good idea for you to get a franchise if you’re the kind of person that really wants a guarantee. I mean, there’s only a couple real guarantees in life, aren’t there? But buying a franchise is not one of those. Its not like getting a guarantee on something like a CD or maybe a bond Sometimes even a mutual fund. When buying a franchise “a+b” seems like it will “= c”, but not always.

Well, what about ROI? People ask me about that all the time. “What’s the ROI on getting a franchise?” Well, you want to make sure that it’s a conservative business that shows a solid cost of goods percentage. That cost of goods percentage is really, really important. So you want to look at the business make sure that it’s got a good number there and if it’s low
then you have a really good chance at a high ROI. But it’s still up to you! I mean business is about taking a viable plan adding your skills to it to make it work for as much of a return as you can get out of it.

Well, there’s another reason why it might not be a good idea for you. If you’re the kind of person is looking for an investment where you don’t have to work, franchising is not the area that you want to get into. I mean even somebody like Michael Jordan … everybody looks at him and says, “Wow! That’s just a natural skill .. he got a great return .. anybody got a great return on getting Michael Jordan on your team. But did you know that Michael Jordan practice an average of six hours per day after he got cut from his high school basketball team. It still takes effort. You could give instructions for a lemonade stand to multiple people but they’re all gonna have different experiences. Your success is going to depend on a couple things: on the resources, on how you use those resources … your success is going to depend on training getting as much as you can get in terms of training and how you implement it. Its also going to be determined by how you manage … how you coach your staff to success. And also, if you’re getting a franchise that requires a physical location … a building … then your success is gonna depend on choosing the right place for your business.

So again, there are some variables here that you need to consider when looking at a franchise. Well what else could kind of send you the signal that maybe this is not something that would be good for you?

Well, one of those is that you’re looking to get rich off just one location. Again, I’m really talking about a physical building for a franchise. A single location store … everybody should know that a single store should generate a reasonable income over a long period of time but it’s certainly not something that’s going to make you rich by purchasing a franchise for a single location. People that really want to make serious income … they know that it’s going to take many stores to bring about a lot of income. Now again, managing many stores is not a requirement but we always tell people when they come to us about franchises and they’re looking to get rich off of one location … the likelihood of that is not really that great. But having a single location that you follow all of the plans, that you have a good location, you do the training, you’re a good manager … you’re still going to have a very very reasonable income.

The other thing that’s kind of an indicator that’s not a good idea if you do a franchise is if following the lead of others is really not your strength. In Entrepreneur Magazine you can see an article here that lists the top traits of successful franchise owners and one other quotes that you can get from that is from Mr. Libava who said, “So who shouldn’t buy into franchising?” He said, “People who are stubborn or independent-minded and those who don’t like to play by the rules. Also people who think they will be able to change the system from within.”

If any those indicators I just shared with you apply to you then I would recommend that you look at other options for business as opposed to a franchise.

But there are some people at a franchise fits perfectly for them.

Franchising is for you if you want the tools handed to you. That means that all the resources, the procedures, the operations, the equipment lists … all those kinds of things that have to be worked out in a business … you’re the kind of person that wants those handed to you. You don’t have to go to research all those things … because obviously time equals money. Buying a franchise often means having a franchise fee. And that franchise fee really is for is a fee that you pay for all the experience that comes with that particular business so that you don’t have to go to the pains of learning that yourself.

So it’s going to be for you if you want the powerful brand. Obviously it doesn’t matter whether there’s a few locations are many locations. As that brand spreads it enhances your own particular store or your franchise location.

Also you want to know that there’s a team with you and that you’re not on your own. Starting a business can be a very, very scary thing. When you buy into a franchise you’ve got a team the people. They may not be in the same city with you (in terms of the the training and the corporate structure). You’re going to have your own team for your location, but if you need to know that you’ve got people that can top that you can talk with, that can give you really clear serious answers that are there to help you (even sometimes it can travel to where you are located at to really give you a hand) then franchising really is for you.

The final thing I would share with you is that you want your staff to have the highest training possible in the best practices of your business. Franchising … because you got this team the people behind you … one other things in running a business is you need to know best practices. It’s not just that you need a POS. You need to know which POS is best and why. You don’t need to go through the difficulty of knowing how to make certain products or how to serve certain customers and try to figure out if “it works” or “does it not work?” It’s better when you are entering into a franchise relationship … if you look at that franchisor and say, “Okay, you tell me what the best way of doing that is?” That’s what you’re paying for and if those kinds of things fit you, then franchising is something you definitely should look at.