GUEST BLOG: Why franchising is not for you

By Paul Teahan, master franchisor, The Interface Financial Group

Franchising in Ireland is booming, as more and more people realise the multiple benefits it offers.

Chances are you’ve already engaged with a franchise at some stage today, whether it was stopping in for your morning coffee or hitting the gym to burn it off.

Investing in a reputable brand, with a proven model for success, that people trust is a sensible decision for most aspiring business owners. What’s more, with the variety of franchises available, across a plethora of industries, franchisees are spoilt for choice.

However, while franchising is an extremely attractive model, it is important to understand that it is not necessarily suited to everyone. Here are three main reasons why franchising may not work for an individual.

The world of franchising today is incredibly diverse. It wouldn’t be an overstatement to say virtually every type of business and business model is franchised in one form or another. Many individuals often see themselves as franchisees of a particular brand because they have, in a past or present life, been doing exactly what the franchise offers.

The biggest hurdle here is that the individuals in question have usually been doing ‘it’ as a hobby. They firmly believe that as a long-time hobbyist they know all the ins and outs of the process, require minimal training and are already well on their way to instant success under a brand name. The reality invariably proves that they are quite unsuitable for the franchise, regardless of the fact they have some knowledge of the service or product.

Running a business and having a hobby are two very distinct and separate situations. As a hobbyist, you have no structure, timelines or reporting responsibilities and certainly no bottom line requirements. A franchise, by definition, is a system that has to be followed in all areas on a day-to-day basis. Regular hours and work ethics are required components.

Hobbyists, on the other hand, can stop and start when they please and even walk away from a project for a week or two with no adverse effect. Franchisors expect more of their franchisees, as they have a brand to maintain and service standards to meet.

Rarely can a person who has been even a keen and devoted hobbyist convert to a franchise environment, with its guidelines and structure. If you are thinking of turning your hobby experience into a franchisee situation, think again and look carefully at all of the ramifications involved.

JEANS AND SWEATERS

Paul Teahan

The old adage of what makes a franchise successful – location, location, location – doesn’t apply anymore. Today a growing number of franchise offerings present a home-based offering. While this can be very attractive in terms of avoiding long commutes and late nights at the office, it may not be what one might expect.

while franchising is an extremely attractive model, it is important to understand that it is not necessarily suited to everyone

Many people making the transition into self-employment and entrepreneurship have had long and exceptional careers in large companies – many may have spent decades working for the same one.

To find themselves on the move and potentially becoming self-employed represents a serious leap of faith. For those who are looking at that option and thinking of perhaps a home-based, one-person enterprise, theirs becomes a quantum leap of faith.

In any corporate setting, employees of long-standing understand the structure of the business they work for. They report to someone and others report to them. There are specified times to do certain things, complete projects, plan and budget, all driven by the corporation. It is a well-planned and disciplined organisation.

It has a social side, with appropriate safety nets to deal with problems and issues, all well established. It also has a community aspect to the business, as one is working in a company with maybe hundreds of other employees.

Notwithstanding that a franchise is also a very organised and detailed business, in a one-person business many of the organisational aspects just do not apply. Likewise, there is no ‘coffee machine’ for social chit-chat and the like.

The lure of working in your jeans and a sweater may be a big enticement after years of commuting or being part of a high pressure team, but look beyond the immediate benefit to the bigger picture.

It takes a certain type of disciplined individual to be a successful one-person, home-based entrepreneur. If you are a social creature, then maybe you should think again about the lure of wearing jeans to the office every day.

SUCCESS

Franchising has a long and envious record of success. Over the years we have seen franchise brands grow and grow. That growth must surely translate into success for the franchisees and franchisors alike. Many individuals start their discovery journey into franchising with a preconceived notion that if it is a franchise, then that spells instant success.

The reality is that a brand, no matter how well known and prominent it is, can sustain failed locations. This usually happens when the franchisor does not apply its usual stringent review process to would-be franchisees.

With an established brand, if a failure occurs it is invariably nothing to do with the brand, but rather the franchisee in a specific location. Because this is a problem to be avoided at all costs, franchisors continue to be vigilant in ensuring their franchisees are under no illusion that being a franchisee is hard work or, at best, smart work.