“Observe all men, thyself most”- Benjamin Franklin
Going into business and becoming a franchisee is a major step. The level of your success is dependant on many factors some within your control and some outside of your control.
By approaching the process of finding the right franchise systematically and honestly, you will better understand the pros and cons of the business.
The Franchise MindTM 8-step process helps you choose the right franchise:
Step 1: Answer the “why”
Step 2: Know thyself
Step 3: Build your profile
Step 4: Select franchise companies to evaluate
Step 5: Evaluation process
Step 6: Qualification process
Step 7: Commitment
Step 8: Operate for success
In this column we will address Step 1 and Step 2 of the 8-step process. Other steps will be addressed in future columns.
Some basic understandings
The basis of the relationship is a legal contract known as the franchise agreement. In the franchise agreement both the franchisor and the franchisee bring value to the relationship. Both sides also have risks and rewards in the arrangement as well as freedom and responsibilities. It is without doubt a relationship that requires balancing skills.
The relationship is illustrated in a simple diagram:
Buying or acquiring
What does it mean to “buy a franchise”?
In essence the franchisee is acquiring the rights to operate a franchise. In other words, the franchisee operates a business system that ensures the delivery of a consistent product, service and experience for the customer in a particular territory.
The better the franchisee is at implementing the system, the greater the chance of achieving the intended results for the franchise unit.
Becoming a franchisee
Step 1: Answer the WHY
Common reasons people have offered in the past for joining a franchise include:
✓✓ Great brand
✓✓ Great product
✓✓ Great industry
✓✓ Build fund for retirement
✓✓ Someone will teach business
✓✓ You are not alone
Reasons that should not be acceptable include:
✓✓ Everyone is doing this business
✓✓ The business is ‘easy money’
✓✓ People have made so much money in that business
Whatever your reasons, be clear that they are your reasons for joining a franchise and not because of how well others are doing or their objectives for joining a particular franchise.
Step 2: Know thyself
In preparation for going into a franchise business it is valuable to become selfaware of your strengths and weaknesses. The evaluation below will help with that goal.
Mark how you perceive yourself in the following:
Making sense of your business suitability score
This assessment is merely a tool to help you conduct a self-evaluation.
Criteria offered in this assessment are considered important in the opinion of the author and in no way suggests that your evaluation should be limited to the criteria offered. No guarantee of business success is made or implied by this selfevaluation.
Number of items with a score of 3, 4, or 5
40-48 ‘Born to be in business’
31-39 ‘Likely to do very well in business’
21-30 ‘Likely to do well in business’
20 and below ‘Need to improve before going into business’
In this column, we have addressed the first two steps to becoming a franchisee:
Clearly knowing WHY you want to join a franchise and through a self-evaluation getting to know yourself. In the next column we will address step 3, criteria necessary for you to build your profile for selecting a franchise business.
Until next time, stay focused.
Harish Babla is the Managing Director of Franchise Mind Corporation based in the United States, supporting franchisors through knowledge and mentoring.
He is a 4th generation successful entrepreneur, a business visionary, an inspiring leader, a growth strategist and an advocate for family owned and especially franchise owned businesses. He believes that business must be conducted with the highest standards of excellence and with an unwavering passion to serve the customer.
Harish can be reached at Knowledge@FranchiseMind.com