Entrepreneurship and Franchising: Perfect Together
For years I've been reading articles about franchisors' desire to select franchisees that are not too entrepreneurial. Recruiting business people, who are interdependent rather than independent. Of course, there is some truth to this notion, but overall, franchising requires that franchisors and franchisees work together as a team. In this context, the concepts of entrepreneurship and franchising complement each other nicely.
The franchisor is expected to provide the proven business model, trademark, marketing image, branding, and systems. The franchisees are expected to provide intimate knowledge of their specific region, strong marketing efforts, and a “follow the rules” mentality. But for most prospective franchisees to take the leap into business ownership, they also need to develop an entrepreneurial spirit.
Put on your "entrepreneur's hat"
Consider a prospect from my own experience in franchise sales. This prospect was well qualified in many ways to take on franchise ownership. There was only one problem—he had a really hard time making the decision about whether to buy into the opportunity.
Let me set the stage. He had done a thorough job of due diligence. He had reviewed the company's Franchise Disclosure Document, or FDD, with his attorney and his spouse. He had created a list of questions for franchisees of the system, asked his questions, and received responses.
He had even visited two or three of these franchisees, getting a real-life feel for the workings of the business and the pluses and minuses of the franchise system. Yet he felt unable to come to a decision.
As I guided him through this decision-making process, I finally said this: “Your due diligence has been superb. You’ve done everything you can possibly do to get clear on this opportunity. Even though you may feel there is still one more question that will make this perfectly clear, there is no such magic question. It is truly time to come to a decision.”
And then I told him: “May I help you put on your ‘entrepreneur’s hat’? You know, each of us has to have a good bit of entrepreneurial skill in order to move into our own business.
“Imagine that you do decide to move forward. As a franchisee, you will be required to make immediate and even long-lasting business decisions with as much confidence as possible. Maybe you’ll be faced with a decision on the type of loan to pursue and its terms—or a decision on whether to lease or buy your space. Or maybe you’ll be asked to make build-out decisions quickly so that you can open your unit in time for peak opportunity. You get the picture.”
More articles from AllBusiness.com:
- 10 Signs of a Great Franchise Opportunity
- Can Franchising and Innovation Go Hand in Hand?
- Understanding the Role of the Franchise Area Developer
- Buying a Franchise? The Importance of Item 19 in the Franchise Disclosure Document
- 3 Biggest Challenges Every Franchisee Faces—And How to Overcome Them
Buying a franchise? Think like an entrepreneur!
Owners of both independent and franchised businesses are called upon to make entrepreneurial decisions each and every day. Decision-making is part of the package called business ownership. So put on your entrepreneur’s hat, please, when pursuing the franchise purchase decision. It may be what convinces your franchisor that you are the right one for the system.
RELATED: Buying a Franchise vs. an Independent Business: What Are the Pros and Cons?
About the Author:
Flo Schell is former vice president of Franchise Development for Sylvan Learning Systems Inc. and founder of Franchise Coaching Systems.
