Perhaps the most important step in deciding whether or not to venture into a franchised business is knowing if your personality is suited to franchising. The good news is that many personality types can be successful in a franchise. I know successful franchisees that are headstrong and brash and those that are flexible and quiet. Yet, the hard truth is that certain personality traits do not mesh well with the franchise model.
Part of what I do for a living is sell and oversee franchise operations. If I just sold franchises, I might have a tendency to think that every person who had enough capital to invest was suited to franchising. But it is the second part of my job – overseeing and working with franchisees – that informs the first.
Working closely with the franchisees in my territories as well being exposed to a wide network of franchisees, it is clear that some people are more inclined to be both happy and successful in a franchise system than others.
So what type of person is a good fit for franchising?
To begin, answering this question is more art than science. Beware of quizzes on the Internet that ask a series of questions and then tell you things like… if you scored between 20-24, then you are born to franchise, if you scored between 16-19, then you may want to ask yourself… You get the point.
Franchising often requires a significant investment of capital and time; you don’t want to find out that you scored 23 points on the franchising scale but that the one point you missed represents your most dominant personality trait – and the one that will make you miserable.
Clear cut answers are rare in the evaluating the franchise personality. Believe it or not, sometimes the best answer to the questions below is “sort of,” which is another reason why these yes/no type quizzes can be very misleading.
So, let’s get down to it. Here are 7 questions to ask before buying a franchise:
1. Are you self motivated?
Franchising provides you with a system, but it is up to you to execute it. Like any business venture, it may require long hours, self-motivation, and the ability to keep working while others are sleeping. Can you handle that? Can you sustain that motivation for the long term, once the initial enthusiasm of a new venture has worn off?
2. Are You Highly Creative?
Creative people can be unhappy in a franchise system, because the operative word is system. In general, franchising is not the place for you to test innovative product ideas or try out new marketing strategies. In fact, if you desire to do so within the confines of a franchise, you are begging for frustration and disappointment. Sure, depending on the franchisor and its stage of growth, you may have some leeway to explore your inner Steve Jobs (remember, the Egg McMuffin was created by a franchisee). But the franchisor will always have control over the idea and may kill it or, worse, change it to something that goes against your original vision.
However, this does not mean that franchising is bad for creative people. It means that creative people have to have another outlet for their creativity and not to expect to explore their creativity in any real way within a franchised business. Creative personalities can be happy in franchise systems, as long as they go in with proper expectations.
3. Are you flexible?
To be a franchisee requires flexibility. The larger the franchise, the more your business will be dictated to you from above. Sometimes you will disagree strongly with the programs being pushed down from the top; sometimes these programs can have a negative impact on your profitability or quality of life (note: good franchisors do very little of that to their franchisees). Either way, flexibility is a key attribute to being at relative peace within a franchise system.
4. Can you handle not being the top dog?
Some people simply cannot stand anyone telling them what to do. They have extreme Alpha tendencies or outsized egos. If you are one of those people, franchising may not be a good fit for you. In the end, it is the franchisor’s business; the franchisor is just renting it to you for a time.
5. Can you handle being the top dog?
For many, franchising is their first experience owning a business. Many come from the corporate world, others from government. They may have managed people, but it was always on someone else’s dime. Can you handle the strains of leadership when every mistake an employee makes it harder for you to pay your rent? Are you able to delegate and expect accountability? Able to work in marketing one day and accounting the next?
6. Are You Risk Averse?
This question is probably the most nuanced of all, because risk comes in many forms. On a macro level, you need to be fairly comfortable with risk to be a small business owner of any type. You will be investing capital and time in an enterprise without any guarantee of the reward or return on investment. Small business has risks; of that, there is no doubt.
However, many people are attracted to franchising because they are risk averse and believe that it reduces their risk. While on the whole, the data does not support that franchised businesses are any more successful than non-franchised businesses, my opinion is that proven franchises with strong brands and a record of successful franchisees are significantly less risky than similar, privately branded businesses. A proven business model and a recognized brand are pretty powerful components to success, as long as the other key factors are present as well.
7. Can you work hard for delayed rewards?
Rarely do small businesses of any stripe, including franchises, make money on Day 1. If your business is successful, you will still likely lose money for many months before breaking even, then plug along for many more months before taking money out, and then go for years before recouping your investment. Can you handle this? Can you tell whether the level of loss is appropriate and not panic because it takes longer than you thought to be cash flow positive? Can you keep your eye on the long term goal?
So, Is Buying a Franchise Right for Me?
The above questions are important ones, and for anyone considering their first foray into franchising, deserving of serious reflection. While someone experienced in franchising can help you greatly with the evaluation process, truly, only you can say whether or not the nature of franchising suits your personality. In the end, knowing whether franchising is a good fit for you starts with knowing yourself – and if you read much in the area of behavioral psychology, you’ll understand: the first step is the hardest one of all.
Based on what you’ve asked, I should look into a franchise. The problem I have is fear- the fear of failure. You know? Because of the delayed rewards, sometimes it doesn’t feel like you would be going anywhere. Typically when you get into franchising, how long do you have to risk before you see reward?
Hi Ava,
I think fear is inherent in any small business; certainly, risk is. For me, franchising eliminates the biggest question facing any business, does the model work? If so, then it is generally about location and execution.
You asked: “Typically when you get into franchising, how long do you have to risk before you see reward?”
That’s a great question, and such a great question that it has no answer. (If anyone does tell you it has an answer, grab you wallet, and run very fast the other direction). The first variable is which franchise? The average time and reward for a Jimmy John’s is not the same as for a Dominoes. After that, there are a million other variables — how good is your location, what is the condition of the industry, what kind of operator are you?
The best advice for someone interested in franchising is to find a concept that you like and that has an investment level in your range and start doing your research. I will be adding more content here that will be helpful in that process over time; however, you can Like our Facebook page and get access to a Franchise Resource Guide that will provide you with a great starting point.