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| Signing the contract - but how will you feel about the franchise in a year's time? |
Franchising works well for lots of people.
The chances of success are
much higher than among non-franchise start-ups. And you can see exactly
what you're getting into.
It's certainly popular - in the USA, half of all retail sales are from
franchises.
But we aren't sold on franchises. Here's why:
1. If it doesn't have your name on the door, it isn't your business. You want to set up your own business so you can be you own boss. But franchisees have to use pre-set methods and operate in pre-set geographical areas. In short, if you buy a franchise you'll be saddled with bosses again.
2. Twelve months down the line, you'll feel differently. You'll know how to run your own business. And self-employment won't be scary any more. But you won't be able to change or develop the business. Because, as we said, the franchise company won't let you. So, before you buy a franchise, think how you'll feel in a year's time.
3. It'll cost you. There are three areas of expense. First, there's the start-up fee. The franchisor will tell you that it pays for the training, the systems and the materials. That's true, up to a point. But if you didn't have to pay for it, that cash could see you through the first 6-12 months of your start-up, when you have few customers.
4. Then there's the monthly fees you pay the franchisor. Normally, this is a percentage of your income. The franchisor will tell you it pays for advertising and central support. That's true, to an extent. But it you were on your own, you could pocket those fees. And if you get to be successful, you may grow to resent the monthly fees.
5. You'll have to buy your materials from the franchisor. And when you see that you can buy it cheaper down the road, you'll get frustrated.
6. Is carpet cleaning that exciting? Do you want a lifetime of re-filling vending machines? Do you want to flip burgers all your life? Too many franchises are unexciting. And they probably don't align with your passion in life. So if you love travel, set up your own personally-guided tour business. If you love flowers, set up your own floral arrangements business. Don't buy a franchise unless you're in love with the concept.
| Franchise or course? You could say we're biased, because we provide courses that have the same aim as a franchise - they help you set up your own business. Our courses cost a lot less than a franchise. You get all the information that you'd get from a franchisor, but without the costs and controls. Plus you get one-to-one contact with your tutor and with advisors at the Institute. It's probably true that the controls offered by franchisors are what give franchising such a high success rate. But we aren't really trying to sell our courses here. We'd rather you made the right decision. To conclude, if you want security, and you don't like risk, franchising is a good solution for you. But if you're willing to trade some security for the chance to be genuinely your own boss, try doing it on your own. And it doesn't have to be an either/or decision. You could set up a clothing store without buying a franchise. And you can become an interior designer without buying a course. Remember, too, that you can take a course, and see if that works for you. If it doesn't, go down the franchise route (collecting a refund from us on the way). And here's another point. You don't have to leap into self-employment straightaway. In many cases, you can start on a part-time basis, and hold on to your day-job. The important thing is to make a considered choice, having reviewed all the available information, and based on your specific needs. Whatever solution you choose, we wish you the best of luck.
Kit Sadgrove |
