Not everyone is cut out for business ownership, and that includes franchises. Although franchises offer several advantages over independent start-ups, there are many reasons why you may want to postpone or steer clear of opening a franchise. Below are four reasons to rethink your plan of becoming a franchise owner, at least for now:
1. You are not financially ready (yet). While some franchises do not require huge investments to start, there are many other things you need to consider, including your plan after opening the business. Delays can occur during buildouts. And if you don’t plan well, you may be surprised by the difference between the actual costs of the materials and your own estimations.
Don’t forget that you will have to cover your living expenses while your start-up is still at the initial stage. When planning to open a franchise, it is good to have at least 6 to 12 months of running costs available until the business begins to make profits consistently. If you are concerned that you may not have money to operate the business (undercapitalized), postpone the plan to own a franchise until you have enough funds. Think about your financial security carefully to ensure your franchise and personal finances are in good standing for the long term. Only proceed with your franchise purchase when the time and money are right.
2. You are a nonconformist. If you are a nonconformist or maverick, you may want to shelf your plan of buying a franchise. Mavericks don’t conform to other people’s ideas. They are their own beliefs and motivations that often enable them to succeed in their endeavors because they are independent, bold, and different. This is a nice trait to have for business-minded people. You recognize good business opportunities when you see one and go all in for it. However, if you are a maverick, a franchise may not fit your style.
Franchises succeed because they are well-recognized brands with logos, products, services, and marketing already in place. If you are looking to revolutionize an industry, you may not be suited for franchising, as the franchisor’s guidelines may feel restrictive to you. However, this does not necessarily mean that you cannot succeed in the franchising world. Who knows, you might develop a product or service that will eventually become its own franchise.
3. You cannot focus. No, we are not talking about attention issues here. Can you be passionate and disciplined enough to go ahead with operating a franchise? Like most businesses, franchises require that you invest your time and focus on best practices that are known to lead to success. Even if your plan is to limit the operating hours in the end, it will be difficult to succeed with a new franchise if you only open in your free time, especially when you’re just starting out.
Also, it is important to focus on all the different aspects of the franchise. For example, let’s say you discover an excellent way to advertise a particular part of your business, but you may have to shelf the idea, as it might not be that valuable to you since you are still new. If you focus on a particular idea instead of the overall success of your franchise, you will be wasting precious time on a project that’s not worth it.
4. You are unable to sleep at night. It’s normal to be excited and nervous when starting a new business venture, but if that’s making it difficult for you to sleep at night, it could indicate that something is wrong. Perhaps you don’t have a good understanding of the legal agreements, or you are not asking for enough information from your franchisor. Find out what is giving you sleepless nights so that you can (i) fix the issue or (ii) determine whether the issue has anything to do with your sleep. If the latter is the case, you may not be comfortable starting a franchise that’s keeping you up at night.
The fact is some people are more suited to working for another person than starting their own business. Franchise businesses are not suitable for everyone. However, a franchise provides great opportunities for people who are financially ready and have assessed their personal styles to know when something suits or does not suit them. Be clear about your expectations and preferences so that you can identify a franchise that’s ideal for you!
