Franchising - What's The Catch? Your 13 Step Checklist

Franchising - What’s The Catch?

www.conspicuous-cbm.com

13 reality checks that will help you assess objectively if buying a franchise is the right

choice for you!


What You Will See


•Introduction•The 13 Reality Checks•Final Thoughts

Introduction


• Thinking of a franchise? What you want more than anything is the balanced view of its potential for you.• If all franchises were as good as the brochure, then everyone would have one. In short, what’s the catch?Some franchises are better businesses. But there is another piece to this jigsaw puzzle…YOUFranchising does work. As long as you find the right business sector that you enjoy working in and that resonates with your personal values, it CAN be a successful business venture.The key word here is CAN. The thing is that enjoying and caring about the franchise you own is not enough. There is a catch with franchising, and it applies to every single franchise system out there. Many people who come from being an employee attracted to franchising because it offers greater security than setting up their own business. Franchises have a proven record that makes success more likely than other start-ups. Banks feel more confident in lending to potential franchisees & there is a whole network of professionals who can advise franchisees.But this is still a business. Running your own business will always carry an element of risk. Risk is something that you won’t hear or read in any sales pitches, but it’s absolutely vital to grasp.• Can’t accept the risk – however small – of setting up your own business, then don’t start one, even a franchised one.

The rest of this presentation has one aim: Saving you time and money. If you really want to own a franchise, YOU need to ask yourself some fundamental questions about your attitude to risk. We have created 13 reality checks that will help you assess objectively if this is the right choice for you. Great being ready for a big change on a wet Monday morning when you’ve just been passed over for promotion, but that energy and optimism needs to carry you through the inevitable tough times of owning your own business.

At the Conclusion you’ll be clearer on the downsides of owning a franchise.

Still want to go ahead afterwards, your probable chances of success will be higher. But answer each question with 100% honesty. Play devil’s advocate with yourself to end up with a firm foundation on which to build your business.



Reality Check # 01

Do You Want A Regular Salary?


•No business can ever provide this.•A stable monthly income is the major stumbling

block for many on the road from employment to self – employment.

•Ever wondered how entrepreneurs manage to pay their mortgages? Find out by arming yourself with as much information as possible. Talk to successful business owners.

• Is this business viable? Do you have enough income from another source (e.g. your partner’s salary, rental income) that can cover your outgoings if need be?

Reality Check # 01The Truth?


Reality Check # 02

Do You Want Success In A Box?


• Owning a franchise is not like having a winning lottery ticket. You won’t make a profit straight away.

• Seems like an obvious statement, but sometimes it’s easy to believe what you want, especially if you’re really excited by the idea of running your own business.

• Ask yourself if you’re prepared to put in long hours for little or no ROI (return on investment) in the first years.

• Do you have the perseverance to carry on when things look hopeless and other people around you are urging you to “stop wasting your time.”

• Any business takes time to build up, franchising is no different.



Reality Check # 03

Do You Want Someone To Hold Your Hand?


• Of course you don’t. But do you?• This check is designed to make you aware of your need to avoid

making all the difficult decisions. • Every franchise should offer some form of guidance to its

franchises.• The important thing is not to mistake guidance for hand holding. • Eg finding it tough to get your first client? What help might you

expect from head office? This varies in every organisation, but it is reasonable to expect that you could talk to someone about this.

• This would then leave you with some ideas about winning new business. Question is, are you happy to go out there and try all the suggestions out? Willing to do things that seem counterintuitive and take you outside your comfort zone?



Reality Check # 04

Can’t Sell, Won’t Sell?


• Read the following sentence, and then notice your immediate reaction: Sales is a noble profession. Does this seem a ridiculous statement to make?

• Selling as a skill has been hijacked. Hijacked by those people who want to push an inferior product or service onto naïve and trusting consumers.

• Many of us have grown up with the preconception that selling is really all about being domineering, misleading and money grabbing.

• In truth, the reverse is true. As long as you are providing something that you genuinely feel is of value to people, selling is all about demonstrating that value to them. If the product you sell makes your clients four times their own investment back, then you are helping them. It’s a no brainer!

• Done right, sales is a noble profession. Integral to any successful business. There is no place for the ‘can’t sell, won’t sell’ mentality in owning your own franchise.

• Still worried your deeply ingrained mistrust of sales people threatens your new venture, don’t worry. You can learn some ethical sales techniques that allow you to demonstrate the core values of your product or service.



Reality Check # 05

Are You Disorganised?


•Owning your own business generally requires more organisation than being an employee.

•Because you have so many decisions to make and nobody else to take up the slack when you’re busy, you really do need some systems in place.

•Just as for selling, there are ways to learn skills that you don’t already have.



Reality Check # 06

Do You Still Want Annual Leave?


• Owning a business and going on holiday are not mutually exclusive: you can do both. There is, however, an important distinction between holidays and annual leave.

• The annual leave mindset is a way of thinking when you can set aside blocks of time off work. This time is your own. Doesn’t matter what is going on with your employer’s company, your annual leave is guaranteed.

• When you are self employed, any number of things can happen to upset this state of affairs. No-one expects you to cancel your holiday to sort out problems in your business, but you should expect to work evenings and weekends. As the boss, time off is a much more flexible concept. You work 80 hour weeks as required, then take time off when it suits.

• That’s the difference – Time off is to suit your business, not your calendar. Better you run your franchise, the more time off you can have.



Reality Check # 07

Where Does The Buck Stop?


• “Times are hard. It’s the economy. People just aren’t buying these days. It’s no wonder start ups struggle.”

• When things get tough for your business, are you going to come up with any of these reasons for your sales being less than you hoped for?

• If so, it’s best to stop reading now and start looking for a different career. • All the excuses above are exactly that – excuses. They all translate into

the same mindset – “not my responsibility.” Probably the biggest reason for failure.

• Consumers are more cautious than they were a few years ago. If things were as dire as the media would have us believe, why are there >7 million millionaires in the USA? If people “just aren’t buying these days” everyone would be driving cheap cars and wearing cheap clothes. Apple would have gone into receivership.

• No doubt you have some big challenges ahead of you as a business owner. Taking complete responsibility for your franchise is the only way to make it a success.



Reality Check # 08

Are You Risk Averse?


• Ever watched Dragon’s Den? The investors number one priority is to reduce the risks of losing any money they invest.

• They talk a lot about taking calculated risks. This should be your approach to business – all the time and money you invest balance against the possible risk.

• You can see that being an entrepreneur is about taking risk & minimising these risks.

• You need to ask yourself honestly how risk averse you are. You can still enjoy all the fringe benefits that you did as an employee (sickness cover, pension, etc) – but these do rely on your continued monthly payments.

• Business always involves risk. You can minimise, but never eliminate. • The upside of that if you are determined to get good at what you do,

you are in a stronger position than an employee. No one can ever sack you.



Reality Check # 09

Do You Hate Networking?


• It is very, very hard to get most businesses started without networking.

• It is something you really need to embrace. • If your image of networking is schmoozing with the

local Chamber of Commerce, champagne receptions at the Mayor’s office and endless rounds of golf-to-impress, then prepare to be pleasantly surprised.

•Networking today is much more down to earth. You may not meet a potential customer at one of these events, but you will almost certainly meet someone who knows someone who needs what you have to offer.



Reality Check # 10

Are You A Team Player?


• The interview question that makes everyone cringe inside, whilst they smile brightly and concoct some anecdote about how they rallied their colleagues when times were tough.

• One reason people go into business for themselves is to escape office politics. They want to work without having to deal with idiots, bullies, and people who continually let them down.

• It’s true that owning any business means there is no boss that you have to kowtow towards.

• However, if you want to make a living, then you need to be able to work with other people.

• Specifically how will vary from industry to industry. Difference is that you learn to tolerate people to build your business, not lining your boss’ pockets.



Reality Check # 11

I’m Just Not Sure…


• Read the brochure about the franchise. Spoken to the salesperson and to an existing franchisee. But you just can’t decide.

• No-one can know the outcome at the time they make that decision. If you are still unsure over whether to take on a franchise, no point in taking the plunge.

• So what do you do? It’s a paradox – you aren’t sure how it will work out, but you need to be 100% on board to give it a real chance of succeeding.

• Absolutely right. It’s a contradiction to accept if you are going to succeed. This really gets to the heart of the risk that is inherent in all business ventures.

• Stuck at this point, best thing to do is find out how successful entrepreneurs handled things. One thing Richard Branson etc had in common was they could never be sure any venture would succeed, but gave it 100% anyway.

• Goods news is you don’t need to be as innovative as them. Provided your franchise model works, the level of risk you are dealing with is lower.



Reality Check # 12

Do You Want An Easy Life?


• It’s easy to buy into the perks of a franchise.• The glossy sales brochures are full of the fringe

benefits, the inspirational success stories and the joys of being master of your own destiny.

• Do not make the mistake of translating all this into “it’s an easy life”.

• Launching any successful business can never be described as easy.

• For many, the rewards far outweigh the difficulties, but rewards are what they are, not freebies for the lazy.

• To get a reward, you have to earn it.



Reality Check # 13

Do You Want To Buy A Job?


• Do you want to buy a job? Bizarre question. Buying a job is a mindset in which:★ You assume others have been successful, therefore you automatically will too.★ Higher the set up costs, the higher your chances of success are (“I’ve

invested all this money. It mush be worth it”)★ You have no boss - therefore no problems★ You think: “Someone at head office is there to sort out my problems if I mess

up”• Taking on a franchise is instead the idea of making the most of an opportunity.

This is the mindset where:★ You take responsibility for your business★ You are willing to make sacrifices in terms of time and money to succeed ★ You accept the risks★ You are 100% committed, in spite of those risks★ You have a vision of where you want to take the business, and where it can

take you


Final Thoughts


• Now you should have a great view of the downsides of taking on a franchise.• If any of these set off alarm bells for you, then it’s time to seriously consider if it’s the right path for you. If you are willing to accept the potential risks, then you are a lot further down the road to owning a successful franchise. Being an entrepreneur is not for everyone. However, if it still appeals to you after everything you’ve read, some fantastic benefits are yours for the taking:The freedom to make your own decisions to work in an industry you are passionate aboutPotentially doubling or tripling your income and net worth over timeTaking control of your lifeOnly you can decide if a franchise is the right decision for you. We hope this helps clear up some myths and preconceptions surrounding the issue.

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Franchising - What's The Catch? Your 13 Step Checklist

Business

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key success

risk averse

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annual leave

head office

big projects

fringe benefits