Is Buying a Franchise Business Really For You?
by Christine Matsinger
Anyone going into business should spend some time engaging in a little navel gazing and examine (honestly) your attitudes, capabilities and goals.
There are no guarantees of success just because you are buying a franchise business. A significant percentage of franchise failures are the responsibility of the Franchisee’s themselves. Reasons for failure can include:
- The franchisee not following the franchisors system because the franchisee knows best;
- Inability to live with and sustain early losses before the franchisee becomes established;
- A franchisee that has been in business before with entrenched ideas who cannot accept the rigidity of the franchisors systems;
- Lack of family support;
- Lack of sales skills;
- Not having the right aptitude and attitude for the role.
Before you launch into acquiring a franchise business, ask yourself some questions.
- Is franchising for me – do I understand what it really means – a franchisee is not an employee – a franchisee independently owns and operates their own business.
- If the role is a physical one, am I physically fit enough?
- Is my age and state of health suitable for the rigours of what may be long hours and significant stress?
- Do I have sufficient capital to make it happen without living on the financial edge all the time?
- What am I naturally good at – does the prospective Franchise business suit my strengths?
- Do I have family support?
- If the business involves dealing a lot with the public – am I well suited to that?
- Can you handle having staff?
Get good advice before you buy the franchise business.
That means legal, accounting and business advice – and that also means listening to it.
Don’t ignore the advice because it is not what you want to hear and because you have already made an emotional decision and made up your mind that you want that business.
In a start-up franchise – “first in” does not necessarily mean “best dressed”.
Sometimes it is better to have expended money on your due diligence and advice and then walk away if it doesn’t stack up – rather than making a poor business decision to go ahead and then later suffering the financial losses of having to sell early or walk away with nothing.
Buying a franchise business does mean taking a risk. At some point you will need to make a commercial decision to go ahead or not.
If the proposed acquisition of the franchise business ticks all or enough of the boxes to encourage you to go ahead, then, having made the commitment – give it your all and make it work.
If you need advice or help to review a franchise opportunity then call Christine Matsinger at McColm Matsinger Lawyers on 5443 1800.