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The Franchise Opportunity, Make Honest Franchise Business Choices

By John Halderman

Republish: EasyPublish™ Published: 27Apr2009 Word count: 1354 Viewed: 112 time(s) Get Free Content For Your Site

Many people looking for a better way to earn a living are looking at becoming self employed with one of the franchise opportunities available. A franchise business can be a wise choice in that statistically they have a higher success to failure ratio that going to business totally on your own. Franchisers claim about 97 percent success after 3 years, almost the inverse is true for a regular small business.

As good as franchises sound on the surface, there can be things to watch out for. It is important before making such a large commitment of time and money that you look to all the factors and variables involved. The franchiser will make it all sound quite nice, but remember, they are selling something. You, on the other hand are investing money, time and a big chunk of your life - don't take it lightly.

Researching in depth the company you are considering getting involved with is key, which should also include contacting existing operators of the brand. The only way to get true first hand information is from those that are doing it, those that are experiencing the ups and downs. Don't let yourself allow the only source of information you use to make a decision be the sales rep for the franchise company.

After checking out the company and some of the actual operators some of the other important factors to consider are:

Investment required:
This includes your initial franchise buy in cost and your operating expenses for 2 to 3 years before your business is well established. And as pointed out above, you must be real careful in assessing these factors in order to get as close as possible to the reality of the real costs involved. In general, the more you pay up front, the more you will receive from the franchiser.

Time required:
This is a huge point to pay attention to. Depending on the size of your business when you open and the cash flow, you can be in for long hours. A larger business that can easily support high levels of management will allow you to not be present as often as a smaller business where you are the manager.

It is very common for the owner to end up spending 60 to 80 hours a week in the business in order to manage it as well as take care of the behind the scenes work. This factor is much the same with opening an independent non-franchise business. The weekly cash flow will determine your actual job position and the hours you must work.

Time to get into profit:
This can vary and also be misleading. If you have the funds to pay all the initial fees up front, it will seem that you can get into profit sooner than if you are making additional payments for some of the fees. Where in actuality, even if paid up front, you should look at the cost of those funds as part of your overall expense. You took that money from somewhere, how long does it take to pay it back. If you can't pay it back, then the business is truly not in profit. You must look at what else you could have been using that money for. If you could have been earning 8% in the stock market, you must earn that much as well, or that investment is loosing money.

Calculating when you will be in true profit is a tough question to answer. It must be well researched and analyzed. It's easy for your wishful thinking along with the rosy picture painted by the seller to underestimate the time to profit. Make sure you include all your upfront costs in this calculation.

Time to get investment back:
I covered this for the most part above as it directly relates to your true profitability. So easy is ti to just forget about your initial investment when you are looking for that point of finally being in profit. But, as I said above, you must look at the up front costs as an investment. And an investment should earn a return. Otherwise, maybe you are just buying yourself a job.

Employees:
Most franchise businesses will require that you have employees. The hiring and management of employees is an ongoing job. I'm sure you are aware, if you have worked anywhere, how tough it is to obtain and keep really good employees. Usually, business owners are hiring often to keep the staff at the required level. And when an employee does not show up for work, many time it means you must jump into action on the 'front lines' in order to keep things going properly.

Also, you will find yourself dealing with all sorts of people with reasons and excuses as to why they don't do a good job or show up regularly to work. You must become a firm but fair manager, establishing and maintaining the kind of work environment you want.

Work environment:
This is an area not normally considered by most. but I include it because I think it is important to consider your quality of life in all this. Getting into a business is a big decision which will have an effect on all aspects of your life. Certainly a higher stress level will effect all aspects of your life, with poor cash flow and employee problems being some of the causes. The other consideration is where you will be spending a large amount of your time. Yes, in your place of business. But is this going to be an environment you want to be in for this amount of time? Only you can answer his question.

Most people are accustomed to being away from home for long periods of time when working a job, so the time factor may be similar, but remember, in your own business you can't leave as long as something needs to be done - you are ultimately responsible. So, again, you may be away from home even longer with your own franchise business. Only you can answer as to the use of your time with the daily lifestyle you want to have. If you end up spending 16 hours a day in the business each day when you were really hoping that the business would allow you to change your lifestyle, and have more time for your family, you may be disappointed.


This is a big decision you are considering, It's important that you make an informed decision so you won't be slapped with any big surprises. It would not be good if you had invested a large sum of money into a franchise and then at some point realize the condition of the business is way off from what you thought, this can turn your attitude sour in a hurry. If you are in a business that you resent but are stuck with, life can become very difficult.

The decision boils down to two main factors, analyzing the numbers properly and analyzing why you want to go into business. You are looking to invest a lot of money and time into this business, know that it is right for you up front. How is it too serve and fit into the lifestyle you want to be living? Take your time to determine what you are actually looking for in making this change to your life, does a franchise business actually support these desires or not.

How you want to experience life day to day should be the greatest factor in considering what you will be doing with your time. Time is your most precious commodity, far more than money. Money can be acquired, time cannot. You will be committing your investment monies plus making a commitment to the future use of your time.

It's wise to consider the lifestyle you want when deciding what to do with the next several years of your life. For most, a business is a vehicle for getting what they want, which is more than the money that can be generated, it's usually about supporting a lifestyle. Perhaps other alternatives are worth looking into before making such a commitment.

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