Why Franchising Is not a Good Match for Aspiring Entrepreneurs


Opinions expressed by Entrepreneur contributors are their very own.

The franchise mannequin leverages a system and method to assist entrepreneurs begin and run their very own companies. However a franchisee is actually extra of a systempreneur than an entrepreneur. True entrepreneurs invent a enterprise from scratch and develop the whole lot from the bottom up. Systempreneurs use leverage of every type — debt, an present working system, finest practices and knowledge — to construct their enterprise.

Sunwoo Jung | Getty Photographs

There’s much more certainty of end result and fewer , as a result of you possibly can consider the mannequin forward of time to find out the power of the mannequin and whether or not it is a good match for you. is an extremely profitable growth technique for one easy cause: There are various individuals who need to run companies and who’re succesful buyers and managers. However there are fewer true inventors on this world.

Associated: Why Franchising Is determined by Programs

Do you need to begin a enterprise or personal a enterprise?

The excellence is necessary. In case you dream of beginning a enterprise from scratch and inventing each single system and product, franchising most likely is not a match for you. Except, after all, you are planning to invent a recent new franchise idea and produce that enterprise to market inside a franchise . You then’re making a enterprise from floor zero and constructing out all of these supporting techniques and merchandise for different individuals to comply with. If as a substitute, you dream of operating and proudly owning a enterprise, the place your every day focus is driving profitability, progress, scale and influence, then being a franchisee may probably be a superb match.

The franchise mannequin was designed with precisely any such operations- and sales-focused entrepreneur in thoughts: the systempreneur. Robust franchisees are additionally sometimes good at managing individuals, listening, sharing, studying and collaborating. They’ve an open mindset. They see alternative and have a can-do method. You can be following another person’s system, so it is critically necessary to be sure to are ready to just do that.

Associated: 3 Causes Shopping for a Franchise May Be Higher Than Beginning Your Personal Enterprise

Are you ready to comply with a system?

It is typically stated that franchisees are in enterprise for themselves, however they don’t seem to be alone. The flip facet of this truism is that the franchise company group can and can monitor your progress. Most franchise agreements require that franchisees share their monetary statements and even their tax returns. That is to assist the group monitor unit-level efficiency and be certain that assistance is reaching any struggling franchisees. It’s also required in order that the system can report unit-level efficiency within the Franchise Disclosure Doc, ought to they select to report monetary efficiency (monetary efficiency representations should not required). Many systempreneurs are ready to comply with a system however could cringe at the concept that company shall be monitoring their actions and reviewing their tax returns. That is a part of the franchise mannequin. Sustaining the well being of your entire system can be necessary to you as a franchisee.

Franchises even have guidelines and working requirements that have to be adopted. You’ll comply with uphold system requirements whenever you signal the Franchise Settlement. Many are core to the viability of the enterprise, resembling well being and security requirements. However some are associated to model requirements, together with fixtures and colours it’s possible you’ll use in your enterprise location and promoting.

As a franchisee, I as soon as needed to spend $10,000 to maneuver an enormous wall in considered one of my franchise areas, as a result of the company approval supervisor needed the location to have a selected look. The placement of that wall by no means generated a penny of revenue for me, however it nonetheless price me $10,000 to maneuver that wall. This kind of factor is a part of franchising, however it will possibly grate on franchisees’ nerves. Are you ready to reside beneath another person’s guidelines, and might you progress ahead even when selections do not go your means?

The working mannequin may even evolve and alter to maintain up with altering buyer necessities and competitors. You can be anticipated to maintain up. Generally that can imply extra spending or rolling out new techniques or merchandise that weren’t contemplated again whenever you initially signed your franchise settlement. The flexibility of a franchise system to evolve with the occasions is necessary and is barely as sturdy as franchisees’ collective willingness to comply with the brand new system.

Associated: Franchising Offers Homeowners With a Confirmed Mannequin and Alternatives to Evolve the System


The next questions and thought workouts are all about you and what you are making an attempt to perform by beginning a enterprise. Figuring this out is a particularly necessary step in your franchising journey. With out this introspection, you are prone to lose sight of your goals later. Take the time to spend money on your self by actually working by these questions first. Speak by your accomplished solutions along with your help system and those that know you finest, professionally and personally. Are there any blind spots in your self-assessment?

  • Do I dream extra about beginning a enterprise or operating a enterprise?

  • Can I comply with a system and playbook, or do I choose to attempt to change issues?

  • Can I ask for assist and settle for recommendation from others?

  • Am I comfy reporting on my outcomes and being clear about my efficiency?

  • Am I comfy with the truth that the company group could have the ultimate say to implement model requirements, and that I’ll need to go together with selections I do not agree with?

  • Am I ready for the required working mannequin to alter in the course of the interval of my franchise settlement?

As you full this thought train, ensure that your loved ones is on board along with your want to run a franchise enterprise as nicely. In the event that they perceive your goals, it is extra seemingly they’ll help you, so you have no last-minute surprises.

Get on the root of what you are making an attempt to perform. If you do not know the place you need to go, how will you construct a plan to get there? Franchising is a terrific enterprise mannequin, however it wants to suit your targets and your required working type. Are you an entrepreneur or a systempreneur?

Supply hyperlink


Please enter your comment!
Please enter your name here