As the end of the year beckons, it's helpful to take stock of what went well in the past year
Thoughts on buying a franchise
So you might, for whatever reason, be seriously considering the life of a business owner. Perhaps there's a change coming up in your career, maybe your personal or financial needs have changed, or perhaps you've always wanted to try to truly be in charge of your own financial destiny. But you may not have an idea or a vehicle that readily comes to mind, and you may not have any previous business experience. In these cases, a franchise may be a very good idea for you.
A franchise offers a lot of great things that a startup from scratch cannot offer. It has a system in place. We've discussed this in a previous blog post, but businesses live and die by the systems they have in place. Those franchise systems have been literally "field tested" in different locations, sizes, and circumstances. If your franchise needs a physical location, you will probably have assistance in finding the right real estate and building out that location to suit. And most importantly, you'll have an established brand and reputation, something that can take years to cultivate and that some businesses, unfortunately, never get right.
Now, all this help doesn't come cheap. There's an initial franchise fee, and then an ongoing royalty, which may be paid weekly or monthly, depending on your franchise. But along with those ongoing royalties is ongoing support, which hopefully builds on an excellent and thorough initial training.
This may all sound good - but what next? Well you have to start asking yourself all the relevant questions any potential business owner might ask himself:
- How much money do I have to invest?
- What is it that I really want out of a franchise and this new business opportunity?
- How involved do I want to be?
- What kind of risk am I willing to assume?
- What am I good at?
- Is status important to me in the type of business I buy?
- Am I interested in multiple locations?
- What is my exit strategy?
Once you've taken the time to really answer these types of questions, you'll then be prepared to start looking into various franchises, and once you've settled on a category or particular franchise, you'll need to do the same sorts of things that anyone buying something does: due diligence. You'll need to visit the franchise - not just a flagship location but other ones. Talk with franchisors and ask them how the journey has been - and make sure they share their challenges, not just the victories, with you.
Buying a franchise is like any other risk in life: there are no guarantees. However the reality of business, as in life, is that you're more likely to succeed with a proven winner.
Did you know that The Gents Place recently started franchising? Emmitt Smith recently joined its ownership group and was interviewed by Fox Business.
About Ben Davis
A serial entrepreneur, Ben Davis is founder of The Gents Place and a leading investor in gentlemen's refinement and confidence.
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