If a Franchise Is Your Backup, Get a Job!

I’m afraid the remnants of the recession and sustained unemployment will lead people down a path similar to the one this subscriber told me that he may take. Without revealing his name, he wrote:

“I am between careers. I was laid off in January from a 27 year engineering career. I’m trying to juggle two possibilities at one time . . .” (1) interviewing for jobs “when they do come up” and (2) looking at franchise opportunities.

A franchise as a backup plan

“I am continuing to research franchises as, frankly, a backup plan. . . I’d definitely like to get your opinion . . . .” He went on to say that he’d like my opinion once he “identifies that franchising is the right path” for him and when he’s ready to look at specific opportunities.

He concluded, “I’m currently working with a local office of (a franchise brokerage).”

My take on this

The saving grace is that the subscriber acknowledged that he has to determine that a franchise is the right path for him. I trust he’ll do that before he invests in a franchise.

But if he doesn’t find a job in another 90 days, or more, it may be easy for him to make the decision to go with his “backup plan.” Suddenly, he’ll decide (perhaps with some outside pressure, i.e. a spouse, a broker, hungry children, friends, etc.) that a franchise is for him. Forget that it was once a “backup plan” — it’s now the plan because, seemingly, there’s no other option.

It’s probably a mistake

And I think that will be a mistake.

If your “backup plan” is a franchise, that’s probably not going to work. If it’s not your passion to own a business, it’s not going to work. It’s too difficult to own a business. There are so many decisions, challenges, transitions, pitfalls — if it’s not your passion to tackle these issues head on, don’t do it.

Bottom line: A franchise never makes a good “backup plan.”

Franchise misfits

Unfortunately, we’re likely to see a lot of misfits with franchises as a result of the current economic crisis. People have their backs to the wall financially. When their unemployment runs out and they’ve used up their savings — what are they to do?

Lots of folks who have a vested interest will tell them to “Buy a franchise!”

That spells disaster for them and for the franchise. It won’t help when these reluctant buyers, who never really wanted to own a franchise, fail and return to corporate America in a couple of years when jobs are again plentiful. The aftermath of failures and disappointments will further damage franchising’s reputation.

I could be wrong. Hope I’m wrong. But history tends to repeat itself!

About the author: John P. Hayes, Ph.D., is a 30-plus year franchise veteran, a former franchisor, former franchisee, and an author/speaker. This article was originally published in August of 2009. Dr. Hayes' columns are syndicated on Blue MauMau.

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Unfortunately this guy is SO RIGHT.  Not having a job has got to be one of THE WORST possible reasons to buy a franchise.  If it's not a good enough business that means enough to you that you would have quit a good job for it, it is not a good enough business to buy because you are unemployed.

dis guy

Dr. John P. Hayes, has written 19 books, including Franchising: The Inside Story, one of the first books to teach people how to buy a franchise; the Franchise Pre-Investment Checklist (ebook); and Help Your Banker Say Yes! (ebook). He is a faculty member at Gulf University for Science & Technology in Kuwait where he teaches in Business and Mass Communications. Formerly he was the CEO of a major US-based franchisor and he has served as Director of several franchise companies. He has been a franchisee of several concepts and for more than 30 years served as an advisor to franchisors and franchisees. His most popular seminars include The A To Zs of Buying A Franchise and How To Capture & Keep Customers. John teaches seminars at franchise expos and speaks to franchisor, supplier and franchisee groups worldwide. He coaches prospective franchisors and franchisees and publishes blogs at FranchiseMastermind.com and HowToBuyAFranchise.com.

a potentially useful tool

In this regard, the following link may prove useful: