Why Shouldn't I Own a Franchise?
As a prospective franchise owner, the promise of capital gain from a business venture is undoubtedly exciting—but it’s equally important to weigh the potential drawbacks and remain conscious of the potential for disappointment.
So why shouldn’t you buy a franchise?
- While owning a franchise built on an existing, successful business model (such as our partners) may seem like an easy way to capitalize on an established brand that has spent decades building a reputation and consistent customer base through corporate advertising and reliable supply chains, there is still a lot of heavy lifting that goes into starting and running a successful franchise.
This is your investment—meaning that your success will be contingent on your business savvy, financial strategizing, knowing when and how to delegate tasks, outsource talent, content, or skills, and doing your own market research to ensure you are prepared for unexpected events such as recessions, labor shortages, strikes, and even (god forbid) reduced hours or closures due to a potential resurgence in Covid-19 or other widespread public health issues.
- The need for financial preparedness may extend into areas of unforeseen circumstances, such as changes in taxation rates, supply chain shortages, health care coverage rates for full time employees, building insurance, and potential damage to the building due to fire or water damage.
- Financing your franchise can be challenging, even with the aid of business loans, grants, fundraising, or financing from other sources. Are you prepared to invest considerable time and money into this business venture, and are you confident in the source and stability of your funding?
- It’s important to keep in mind that franchise ownership is no guarantee of immediate success or profit. It requires monetary investment up front, which can leave beginning franchise owners in a predicament if their current financial status doesn’t allow for significantly delayed returns on the investment. Some franchise owners wait years before seeing these returns, so it’s important to keep your expectations practical.
- While much of your work can be outsourced to General Managers, you are the ultimate authority over your business. A GM does not share your same degree of investment in the long-term operational success of the company—ultimately, you are solely responsible for maintaining your business and ensuring its stability and profitability. There will be times you need to step in and fully investigate the source of a problem, which requires working closely with your GM to ensure any problems are addressed swiftly and effectively. As captain of your ship, mindfulness of your company’s inner workings is central to success; it’s up to you to repair any proverbial leaks in the hull.
- Franchise owners—particularly those who are just beginning their journey—may find that the investment in time and bandwidth is more taxing than they anticipated. The operational success of a business comes from years of dedication, commitment, and hard work. A heavily weighted work/life balance can lead to strain on personal relationships. Are you confident that your family, friends, and/or partners will be understanding of these new demands on your time and energy?
More importantly, are you emotionally and mentally prepared for this endeavor? Franchise owners who struggle with mental health may find themselves particularly challenged by the demands of business ownership.
Regardless of your current mental health status, it is a good idea to check in with yourself and ask, “How am I managing my stress levels? Am I getting the support I need? How can I ensure my physical and mental health remain stable?” While compartmentalization of your personal and professional life is important, prioritizing your mental health and general well-being will ensure your ability to maintain a positive, productive, and sustainable workflow.
These challenges may seem daunting, but when considered collectively with the myriad benefits of business ownership, it’s clear to see why entrepreneurs take on considerable risk—and reap substantial reward for their ambition in doing so.
Now that you’ve considered the obstacles you may face as a business owner, you’re ready to enter the exciting exploratory phase!
So, which franchise is right for you?
Our in-house quiz takes your unique financial, practical, and professional needs into consideration and pairs you with the franchises best suited for your future business venture.
How Do You Pay for a Franchise?
Whether you’re purchasing a whopper from Burger King or joining the Burger King franchise system, the old mantra holds true: there’s no such thing as a free lunch. When you first get started running a franchise you need to pay a fee to allow you to enter into that franchise. These fees are the largest fees that you will normally pay a franchisor and typically range between $5,000 and $1,000,000 depending on the franchise. The franchisor charges this fee as a way to recoup the costs of expanding the franchise and to continue to grow. From a franchisee perspective, this is a major outlay and can take a long time to make back, but is a necessary step. Aspiring business owners must understand how much capital is available to them so they can ascertain how much they can afford. The cash you have at your disposal is known as liquidity, and there are numerous ways to increase your liquidity above the balance in your bank account. As a result, many people don’t realize how much capital they actually can use for investments, like launching a franchise branch. We’ll run through some of those methods below.
The Top Franchise Opportunities for Each Cast Member of The Simpsons
Considering just how enterprising and entrepreneurial Homer, Marge, Bart and Lisa are, entering into the franchise space isn’t out of the realm of possibility. Here are their options, based on work history and personality.
Franchises and Business Opportunities – Understanding the Difference
For entrepreneurs seeking to hit the ground running with a new business venture, there are two main categories of opportunities out there that allow them to benefit from the experience, assets and reputation of existing business concepts. These are: (i) the franchise, and (ii) the “business opportunity”.