The Franchise Safety Net

By Steve Hockett

If you were trying an aerial trapeze stunt for the first time, would you do it without a net and safety harness? Probably not, because chances are very good that you would fall. The same holds true for business ownership. If you’ve never been your own boss, doing it alone could be difficult, scary, and full of the unknown.

Statistics from the Small Business Administration show that one third of all new businesses do not survive their first two years. What is often missing from those failed businesses is a safety net – which is the very thing provided by franchising.

Just how does a company become a franchise? Here are the steps most franchisors go through before you even hear of the company.

  • Franchising comes after a start-up business experiences success. They’ve learned what works and what doesn’t, made adjustments, tried a variety of strategies, tested and re-tested. Finally they have documented results and a system in place and want to grow. This is when they open a few franchises and retest every assumption.
  • More adjustments are made and a few more franchises are awarded and opened, usually in a small number of test areas.
  • With data coming from a variety of sources, the business can determine what type of marketing works and in what areas. Are customer expectations being met? Word of mouth will make or break any business concept.
  • Franchisees in this new system are also sharing information with each other. Are they happy? Is the corporate office supporting them? Franchisee input is an invaluable resource. They’ve invested their own money, time and talent into the business and want their share of the pie.
  • Once everything is working well, major expansion of the franchise concept begins. A good franchisor will offer continuing support and training to franchisees, putting as much time into keeping the business on track as they do into growing it. Due diligence – asking the existing franchisees about the company – is of premier importance to those considering investment.

This is the safety net a franchise provides: a tried and proven concept with operations, marking, distribution, accounting, technical support, brand, etc. all in place, tested, retested and ready for a sharp, hard working entrepreneur to join the team.

Growing a business through franchising obviously works. U.S. Department of Labor statistics show that franchising accounts for approximately one trillion dollars a year in sales and is increasing at a rate of about 8% per year.

There are other advantages of franchise ownership beyond having all the systems set up for you. Most franchise businesses will allow someone with little experience in a particular arena to learn new skills, and to build a thriving business using the system provided by the franchise company.

For example, say you’ve had 20 years of corporate life working in human resources. You see your future as a dead end and would like to spend the next 20 years building a business that would create wealth for you and your family, instead of someone else.

Maybe your real passions are raising Jack Russell terriers, auto racing and landscaping, but you haven’t much experience in these areas. There’s no need to delay your new career years while you learn new skills.

Everything you’d like to know – from dog training to auto detailing to planning sprinkler systems – can be learned from a franchisor. A good franchisor will have detailed training and ongoing support, including manuals, conferences, web info and a dedicated corporate staff to help you with every aspect of your business.