7 minute read
Fear and Loathing in Franchising
by Dave Cooley, Consultant, The Franchise Consulting Company
One of my favorite “Gonzo” authors, Hunter S. Thompson, wrote a book titled, Fear and Loathing in Las Vegas, and it was later made into a movie starring Johnny Dep.
It was a great book and an “ok” movie, but thinking about it got me to realize … there’s fear and loathing in franchising, too!
Huh? What do I mean?
Well, I’ve been in franchising for over twenty years and I can honestly say the number one reason why people don’t invest in their own businesses can be summed up in one word: fear. Plain and simple.
And, if you stop investigating owning your own business due to fear, it’s likely you’ll be loathing the people who didn’t let fear stop them and became successful business owners. Jealousy involves a great deal of loathing, huh?
It’s like this: If you stopped a hundred people at random on the Strip in Las Vegas, crowded them into a room and then asked, by a show of hands, “Who here would like to own your own lives by owning your own business?” Most likely every hand would go up.
If you then said, “Keep your hand up if you have done anything — regardless of how minor — to investigate actually owning your own business,” most likely every hand would go down.
You’d need about a thousand hands in the air before one hand would remain raised – and, since you’re reading this, that’s your hand!
So, congratulations for being motivated enough about owning your own business to have at least made it to reading this article … but, you can’t stop here. You need to keep moving forward.
But what, you may be wondering, are the next steps in moving your interest in franchise business ownership forward? Well … you most likely have already jumped the gun!
Jumped the gun? Why? How?
Most people who are highly motivated to investigate franchising simply do what they always do when they want to inquire about anything: they Google it.
Yes, you can say to your Google connected device, “Hey, Google. What are the best franchise opportunities?” and I’m sure Google … or Siri … or Alexa … will respond with something. In fact, I just asked Alexa about franchise opportunities and she yammered away for about five minutes about franchises for insurance sales, sandwiches and dry cleaning. Or, if you’d like to stare at your phone, tablet or computer screen for a couple of hours, you can search online (via Google, Bing, Firefox … whichever) for “franchise opportunities” or simply “franchises” or “buy a franchise” or the like, and your search engine will list dozens and dozens of websites advertising sometimes hundreds of franchises each.
Go ahead, enter your contact information into one of those sites and click on a dozen options at each site … you’ll be begging your cell phone provider for a new number within a day or two as you are bombarded by franchise sales people – each of whom will probably tell you that you’re a great fit for their opportunities.
But … are you really a great fit … or, have you, indeed, jumped the gun?
To not jump the gun so you can truly uncover a set of franchises to investigate that will actually be good fits for you, well … you have to do some homework first.
Steven Covey, you know him … he wrote The 7 Habits of Highly Effective People … gave some great advice when he wrote, “Start with the end in mind.”
What does that have to do with finding “right fit” franchises to investigate though?
Simple: you have to define what you are investigating franchising for … and, yes, I ended that sentence with a preposition on purpose (with apologies to Mrs. Light, my 7th grade English teacher).
You have to ask yourself, “Five years from now, what do I want to have achieved through franchise ownership?” That’s starting with the end in mind, right?
Start by asking yourself:
What work style do I want?
• Do you want to work full time yourself?
• Do you want to keep your job and have a manager run the day-to-day operations of your business? This is called “semi-absentee” in franchising parlance, by the way.
• Do you want to work from home … from an office … from a retail location … from a mobile location such as a truck or a van?
What life style do I want?
• Do you want a franchise for just “something to do” in your semi-retirement years?
• Do you want to build a business as a legacy for your children in hopes they may take over the business someday?
• Do you want a semi-absentee ownership/ manager-run business that will enable you to travel, golf, and volunteer or do other things with your time?
• Are you looking for a business to augment and enhance your retirement income or do you need a business to pay your mortgage and to put your kids through college?
What income do I need and want to have?
• Do you need to replace your current (or former, if you’ve been laid off) income?
• How much income do you need to cover your monthly expenses?
• What is your vision for a “successful business” and the income that business provides?
What are the characteristics of my market?
• Population?
• Median income?
• Age ranges?
What are my transferable skills?
• Education?
• Work experience?
• Life experience? Now, here’s where the “rubber meets the road,” so to speak:
What financial resources do you have available and feel confident enough to invest?
• Cash?
• Savings?
• Stocks and/or bonds?
• 401(k) or IRA?
• Property you can sell to help finance your business investment?
• Gifts or loans from relatives?
• Funds from investors who want to “go in” with you?
You need to tally all the resources you can muster.
Yep, that’s a lot of questions to answer but without doing so, you really won’t be able to determine if a franchise option is a good enough fit for you to warrant spending six to eight weeks investigating it. More though, getting all these questions answered up front, at the beginning of the process, before you start looking at franchises, will not only give you a good road map for uncovering franchise options but answering these questions will also help lessen the bugaboo of all bugaboos that block people from business ownership: fear!
So, take out a sheet of paper, pour a couple of cups of coffee and you and your significant other/ spouse sit down across from each other at the kitchen table and iron out all the answers to the questions listed above, then – and only then – are you ready to start looking at franchise options.
Sound a bit daunting? I know. But investing in a franchise is a huge deal. If you get it right, it’ll be the best thing that ever happened to you and your family … if you get it wrong it won’t be – I vote on doing the work required to get it right.
Need some help with all of this? You have some great people who can help you through this process and then guide you through the rest of the way. Who are these people?
Franchise Consultants.
Franchise consultants are much like residential real estate agents in that they work for you … but, they are paid by the sellers. You don’t pay them anything. More, thanks to the rules laid out for franchise companies by the Federal Trade Commission, you can’t pay more for a franchise because you have the benefit of a franchise consultant helping you and you can’t pay less for a franchise if you don’t have a consultant helping you.
Same cost either way … so, doesn’t it just make sense to let an experienced and ethical franchise consultant help you?
Working with a consultant, you’ll clearly answer all of the questions outlined above, and then some, and your consultant will then have the information needed to do a thorough search for franchise options that are actually worth your while to review.
More, a good franchise consultant will be at your side as you formally investigate franchise options making sure you understand everything and that you’re conducting a thorough and responsible investigation that will end with you knowing all you need to know to make a franchise investment decision.
The Franchise Consulting Company is one of the largest and most respected consulting groups in franchising. Their consultants are some of the most experienced in franchising. Learn more at www.thefranchiseconsultingcompany.com.
ABOUT THE AUTHOR
Dave Cooley is a Franchise Consultant with The Franchise Consulting Company. Dave has over 20 years of executive experience in franchising and consulting. Previously he was a Lt. Col in the USAF. dave@thefranchiseconsultingcompany.com
