Wondering if you should go into business for yourself? Undoubtedly, millions of reasons why you should--and perhaps shouldn't--are flitting through your mind. Just as personal control over your destiny and the opportunity for more financial gain beckons you to become an entrepreneur, the bills, mortgage and kids give you three reasons to stay at your 9-to-5 job.
We decided to add more fuel to the fire with 10 very good reasons to get into business . . . by purchasing a franchise. We went straight to the source: those who live, breathe and make money off franchises. Two experts, four franchisees and 10 reasons to buy a franchise--do the math and settle the question once and for all.
1.You gain automatic access to strategic and beneficial partnerships and agreements. Join a franchise system, and you immediately become part of a much larger, more powerful network than you could have on your own. Franchisor attorney Andrew A. Caffey calls it "the power of numbers." It comes into play in everything from negotiating the purchase of advertising to making supply arrangements. "One of the greatest values for franchisees is savings in their supply arrangements," says Caffey. "In good systems, these savings approach the value of royalties a franchisee pays to a franchisor."
2. You can easily arm yourself with knowledge. Never been in business for yourself? No worries. In a franchise system, you're automatically privy to special training designed to get you up to speed with the ins and outs of the franchise. According to Caffey, the best franchise systems will provide a thorough briefing on how to operate the business and conduct techniques particular to your franchise. They should also provide a good mix of classroom and on-the-job training. "A transfer of know-how in the training process is at the heart of a successful franchise system and is unavailable to someone in business for himself or herself," says Caffey. Take a look at the Uniform Franchise Offering Circular (soon to be called the Franchise Disclosure Document), a detailed report that must be supplied to prospective franchisees, to get an idea of the type of training provided and the range of topics that will be addressed.
3. You can instantly profit from intellectual property, trademarks and patents without hassle. Often, a franchise system will grant you access to sophisticated technology or software that makes the idea or concept difficult for competitors to imitate." More and more franchise systems have built successful networks around solid technology and software that is simply not available to independent businesses," says Caffey.
And franchisors have generally done the work to secure trademarks and patents. As an extra precaution to ensure you're receiving the full benefits of a franchise, take the time to make sure federal registration of the trademark is either underway or secured, advises Caffey. This will determine the staying power of the trademark. Developing intellectual property and securing a trademark and patents can be complicated, expensive and time consuming. Sidestep it altogether with the purchase of a franchise, and you can get off to a head start.
4. You can build a business and feel confident it will be around for generations. Many entrepreneurs start businesses hoping their children will carry on the torch. Within the structure of a franchise, where the routines are systematic and can be learned quickly, passing on operational control can be seamless. This isn't always the case with an independent business. "Most of the time, an independent business has to be sold if the person running it dies because nobody else knows what to do with it, or they get in and mess it up," says Jeff Elgin, founder of FranChoice Inc., a consulting company for consumers seeking to buy a franchise. "With a franchise, a lot of support could come into play from the franchisor, because it's in [the franchisor's] own best interest to stay successful, too."
5. You'll increase your chances of success. When Jane and Ty Branam, 55 and 50, respectively, opened their ServiceMaster Clean franchise in 2001, they didn't know much about starting a business and knew even less about starting one specializing in commercial cleaning. But that didn't stop Jane, a former college professor, and Ty, who was a midlevel manager at the Department of Social Services, from opening their Charlotte, North Carolina, franchise. And because the operational systems were in place and the training armed them with the necessary know-how, their business is flourishing and profitable, with 2008 sales projected to top $500,000. Says Jane, "My number-one reason for buying a franchise rather than starting my own business is that my chances of being in business five or 10 years later and making a profit are greatly increased by buying a franchise."
6. You have a team of people helping to protect the integrity of the brand. Being a part of a franchise system requires adhering to set rules and regulations. The upside is that quality control is a priority, and you can rest assured that you're working alongside fellow franchisees who are doing their part to maintain a set standard. In addition, a good franchise system will make sure all the franchises are pulling their weight and operating at optimum performance.
Sanjay Patel, 30, and Ron Ackerman, 31, opened their Firehouse Subs franchise in Lauderhill, Florida, in December 2005. They appreciate the franchise's monthly "Fire Report" that's conducted to ensure each store is passing the health codes and standards of the system. "This whole process is done mainly to make sure we keep the standards set by the first Firehouse ever opened," says Patel, "and so [the customers'] experience at each Firehouse Subs location is the same." Patel and Ackerman have two locations, with combined sales of about $25,000 per week.
7. You can get off to a head start with the backing of a name brand. Consumers are attracted to and have confidence in brands they know. By purchasing a franchise, you're often buying into a business with a brand that's already been developed, marketed and, most important, made familiar to the average consumer. Having a strong name attached to your products or services will help you get your business off the ground.
In 1990, Rick Dircks, 48, and his brother, Chip, 49, founded Dircks, a full-service moving, logistics and real estate company in Phoenix. But in 2005, they decided to strategically expand the real estate portion of their business by purchasing a RE/MAX franchise, thereby operating under a national name. "We were a little local name that no one had heard of, which is one of the reasons we wanted to brand it--so we could create awareness in the market," says Rick. "It creates a lot more business opportunities for us." Their decision garnered business immediately, and the brothers received about $200,000 in real estate commissions last year.
8. You can choose the franchise that accommodates your needs. Some people want to work only during certain parts of the year or they don't want to manage employees. That's a lot to ask if you're starting your own business, but consider a franchise, and it's a whole new ballpark. With a wide variety of franchises to choose from--including seasonals like Rita's Water Ice, an Italian ice, frozen custard and gelato franchise, and others that don't require employees or office space like College Assistance Plus, a college consulting services franchise--you can choose the franchise that's right for your skills and interests.
Or you can choose a franchise that provides you a means toward a personal goal. "For years I worked with Great Clips, where we had people getting into the haircutting business who had no interest in the haircutting business but saw it as freedom or money or a different lifestyle," says Elgin. "You see that a lot in franchising."
9. You can use a tried and tested formula. One of the most daunting challenges of starting your own business is the amount of time it takes to fully test the products and/or services you're trying to sell. Going out on your own requires a leap of faith, and many are comforted to know they're leaping into a system without all the kinks.
There's no franchise that needs more order and routine than one catering to children. Shelley Blackhurst, 34, and her husband, Jason, 37, make throwing themed children's parties look easy with their Oogles n Googles franchise in Pittsburgh. "It's amazing how [Oogles n Googles] has it down to a science," says Shelley, whose sales are $10,000 to $12,000 a month. "We can perform a two-hour party, [starting] exactly at 4 p.m. and finishing at exactly 6 p.m., and parents will say to me, 'This is amazing; I watched you do all these different activities and didn't know how you'd fit it in.' These parties are tried and tested, and for as many as we've done, I've really seen that to be true."
10. You don't have to go through it alone. Starting a business can be intimidating. It is a test of endurance as you find your way through unfamiliar territory. But you don't have to go solo. The best franchise systems are just a phone call away. You'll be surrounded by a support system that will not only be there as you set out, but will also continue down the path with you. "The franchisor is there to help," says Patel. "It's there for anything we need."
Franchisors will judge their success only in terms of your success. "ServiceMaster has ongoing training," says Jane Branam. "I just attended a daylong workshop on labor and employment laws, and I've attended many on financial aspects such as ratios, cash flow and receivables. ServiceMaster is actively interested in [our] success."
And franchisors will continue to do the background work to establish partnerships that will ultimately help you as a franchisee. Says Shelley of Oogles n Googles, "They're constantly trying to do things to make us bigger than life."