Franchising is a big decision. And while I’ve said many times that I think it’s the best career move I’ve ever made, I don’t advise my clients to jump headlong into the franchise world. If you’re considering franchising, it’s good to do some self-assessment to help you decide whether you’re truly ready to be a franchise owner.
As part of my consulting process, I help my clients complete an in-depth self-assessment. It covers goals, financial resources, experience, and other key elements of a person’s readiness for the franchise life. The questions below are less detailed and cover less ground, but they’re a good start to help you figure out whether franchising might be right for you.
1. Do you feel uneasy about your job prospects?
When companies are looking for a way to cut losses or make room for up-and-comers, older workers are often the first to go. A long-term ProPublica study found that more than half of workers get laid off or forced out of a job at least once between the age of 50 and retirement. The Society for Human Resource Management has found that this vulnerability has only intensified during the pandemic.
If you’re not an older worker, you might be in an industry that’s been battered by the pandemic. Or maybe you’ve been passed over for a promotion you really wanted, or you just don’t see a path to the kind of advancement you want to achieve. These are all reasons to pursue franchising, which has no age limits on advancement and lets you create your own future.
2. Are you subject to an income cap at work?
Most companies have salary ceilings or other income caps for specific positions, even when it comes to the C-suite. This is true whether those limits are in writing or just part of company norms. If you’re chafing against a salary or commission cap, franchising may be a better choice for you. Franchisees have no income limits–if they want to make more money, they just grow their businesses. They can also keep 100% of the profits they create, instead of funneling them to a company’s bottom line.
3. Do you want control over your own schedule?
Every company has limits on scheduling flexibility. If you’ve been hired for a full-time position, no one is going to let you consistently work part-time hours. As you work your way up the ladder, demands on your time only increase: long hours, nights and weekends on call, heavy travel. And all to feed the company’s bottom line, not yours. Franchising lets you choose your level of involvement in the business and set your schedule to suit your goals–and if you choose to work longer hours, the resulting revenue is yours.
4. What are your financial resources?
Franchising requires a significant up-front financial investment, but the range is wide: anywhere from about $50,000 to more than $1 million. You’ll need to have that money in some combination of cash, gifts, or loans. The acceptable mix will depend on the franchisor. If you can’t commit to that kind of investment, you’re not ready to be a franchise owner yet.
5. Do you have a financial cushion?
In most cases, you won’t be able to pay yourself an income from your franchise right out of the gate. That means you need a personal financial cushion: an alternative way to pay your personal bills during the startup period. This can come in the form of a side hustle, savings, a spouse’s income, even a second full-time job. Keep in mind that the size of financial cushion you need will vary, depending on your financial horizon.
6. Are you self-motivated and self-disciplined?
Being a franchisee means being self-employed. Your only boss is you. That means you’ve got to be good at setting your own goals, staying on track, and achieving results without oversight. Or, as I put it in another blog post, you need to pass the “AAA test” for attitude, aptitude, and attention. If this sounds like you, you’ll likely thrive as a franchise owner.
7. Do you have leadership or entrepreneurial experience?
Successful franchisees come from all backgrounds, but franchising does require running a business. You may be able to hire a manager to deal with day-to-day operations, but you’ll still need to make business decisions, oversee finances, and lead your employees. Some kind of leadership or entrepreneurial experience will make this much easier, whether it comes from volunteer work or a corporate career.
8. Are you good at following systems?
As a franchisee, you’ll be your own boss, but you’ll have to follow the franchisor’s business system. This will determine branding, product or service design and delivery, possibly what software or equipment you can use, and at least part of your launch process and operational method. If you tend to chafe at systems, have trouble staying on track and following them, or dislike taking any kind of guidance or direction, this setup is probably not for you. However, I see the franchise business system as an advantage: by following a proven system, I reduce my risk, and I can focus on growth and strategy instead of operational trial-and-error. Like the sound of that? Then franchising may be your kind of entrepreneurship
9. Are you willing to be a resource?
Franchising comes with another great benefit: the owner network. Culture varies by franchisor, but in most cases, the owner network is highly supportive and a useful resource for advice and encouragement. Keep in mind, however, that it’s supposed to be a two-way street. You should go into franchising willing to return or pay forward the support you receive. If that sounds like an inconvenient burden, you should probably look for a different field. But if you love mentoring (like I do), it may actually become one of your favorite parts of your job.
10. Is your family on board?
I’ve listed this question last, but it’s possibly the most important of all. If you’re married and/or have children living at home, you’re not ready to be a franchise owner until they’re ready, too. Franchising creates incredible opportunity for families, but it also requires some sacrifices at first. You’ll likely have a lower income and have to work longer hours for a little while. Before you take the plunge, make sure your family understands these tradeoffs and is ready to move forward with you.
Now that you’ve completed my list of questions, are you feeling good about the idea of franchising? If so, why not connect with me so you can complete a more in-depth assessment of your goals and opportunities? We can get the process started with just a 15-minute phone call! Book some time on my calendar to learn more.
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