Why Buy a Franchise
Looking back at my posts, I see that a lot of them are negative. So I'm going to try to initiate something positve: WHY buy a franchise?
To ME, the top three reasons are: Established Brand Name, Established Brand Name, Established Brand Name. That's what's worth paying the royalty off the top for. That being a part of that franchise brand will bring in the customers, instant recognition from Day 1.
Proven business systems follow behind. If following the Zor's procedures can save you from reinventing the wheel and repeating a lot of mistakes that have already been discovered and solved, then that is worth something. If there is truly proprietary software or other systems that you will get access to, that is a part of business systems.
And here are things that are NOT good reasons to buy. "Protected territory"? NO, it is NOT important, because no "protection" from YOUR Zor prevents the competition from opening across the street. Around here, two new health clubs opened up almost at once. Right across the street from each other. Which leads us to what IMHO is the WORST reason to buy:
NOPE. There is no really new business idea out there. If there was, if it was any good, as soon as you did it, people would just copy it. Business success is in EXECUTION (operations) and NOT "concept".
People dream up "concepts" every day. But a recognized brand name takes years to establish. So to me, getting a chance to make use of that established brand, is the number one reason to pay the fees to become a part of of that particular "system".
Established Name Brand
Alright, then what would you suggest in looking for an established name brand, say for a regionally based franchise system?
Michael Webster, a franchisee attorney in Toronto, Ontario, publishes a website on business opportunities and franchises called "The BizOp News"
Hmmm, Brand Name...
Well I bet there are 'consultants' out there who would sell you market research studies to measure brand recognition (for more money than the franchise fee) and due dilience you to death so much so that you'd never be able to do anything from not knowing enough.
But here's an idea. If you the prospective Zee are a part of the target customer demographic, have you, your friends, relatives, co-workers heard of the brand? And what do they think of it? Would people be glad a store of that brand was coming to town, and eager to go there?
And if the brand sells to "them" instead of "you", best hope you know some of "them" and can get some feedback.
At some point you gotta pay yer money and take yer chances. But cripes don't pay a boatload of money for an unknown name; if you want to learn the business it would be cheaper to get a job in the industry and work it for 6 mos. or a year to see from the inside if you want to be in that industry.
Otherwise we hear all the time about people who mortgaged their home and/or cashed out their retirement savings and/or personally guaranteed long term lease, all for a business that they knew nothing about. And they say "oh if only I knew...". They lose everything and then they come here to BMM and gripe about how franchising sucks.
People buy crap. It is okay of it is a side hobby business with a low low price. But not if it is something that you expeft to support you and your family and that you are putting your life savings into.
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