Owning Your Own Franchise

Owning a Franchise - Having a franchised business is an experience that is a cross between being an employee and being an entrepreneur. You get to call some of the shots, but not all of them. If you are operating a business owned by another under a franchise license, it’s good to pay attention to the exact terms of the contract, so that you know exactly where your responsibilities lie.

You have a number of issues that would never have come up if you were running your own business which you founded. Who supplies the uniforms, who maintains the equipment, who does the hiring, and so on. Frequently, if the licensing business is anything close to conscientious, the contract of the franchise spells these particulars out clearly.

One definite area that most franchise agreements cover is training. This is a marvelous opportunity if you have never run your own business before, because you get to see how the whole business is set up from end to end. Not only will you receive guidance, but your franchising agent will also attend to training the employees. Not having to do your own training practically saves you 50% of the time you’d normally invest in running a business. Should you decide to found your own company later on, this experience will be to your benefit.

You also have other perks over owning your own business, such as having a supplier of equipment, and a source of advertising. If you become a franchisee of an established business which already has a widely recognized brand name, very little can go wrong beyond mismanaging the franchise. If you’ve taken the entrepreneur route before and tried to run your own business, you can appreciate what a massive relief it is to not have to do your own marketing.

There are some points where running a franchise is sharply different from the experience of owning your own business. You can’t control things like pricing and policy. You have a CEO, a board of directors, or other superiors to answer to. Finally, a percentage of your profits are going to have to go back to the parent company - after all, they aren’t doing this for their health!

What is the worst thing that can go wrong? Probably the case of the out-of-touch business. The same communications factors that make traveling for a company frustrating can be even more of a bottleneck when running a franchise.

Before you get too comfortable with a franchising company, try calling up your company contact or representative a few times and pose small “test” questions or problems to them. Do they offer immediate support, or do they leave you hanging? You don’t want to be in a position where you’re trying to do your best to run a business and are failing because the parent company turns a deaf ear to your concerns. Remember, you’re the one who has to deal with the customers face to face. If you have a problem that you can’t solve yourself because of the contract, and your franchising corporation won’t solve, you’re stuck.

To protect yourself, remember that there is a reason why the Federal Trade Commission regulates the Uniform Franchise Offering Circular - because you’re supposed to read it! You should know every requirement for the parties on either side of the contact, and the exact steps you will have available to take should the other side fail to live up to their end of the bargain.