The top questions you should ask yourself before becoming a Franchisee

As a Franchisor, I try my best to be as open and honest with people as possible on all aspects of running their own Franchise. Our company, Pizza Hotline, has been franchising for decades and is extremely proud of the success we’ve had with our long-term Franchise Partners. We attribute that success to one thing above all else – transparency. Simply put, people need to understand what they’re signing up for, and actually want what their signing up for. While this might sound simple, you would be shocked if I told you how many people I speak to about Franchising who simply don’t understand the process and haven’t really figured out if it’s something that they want to do. When we meet people like this, our company always takes the same approach: we share the truth, we tell them what we think the pros and cons may be (based on what the person has shared with us), and we always advise them to go back to the drawing board and take some time to reflect. We do this because we want to bring people into our organization that we really believe we will be able to share in long-term success with. But different people do better in different environments. Workloads, industry, size and complexity of the concept, level of direct customer interaction, even daily drive time or noise level in the business’ offices and more can all have huge impacts on the quality of life and ultimate success of a Franchisee. In the end, it all comes back to the simple question: what do you want? The answer, however, might be harder to identify.

As a Franchisor I’ve spoken with thousands of prospective candidates over my career, and in this article I hope to shed light on some of the questions that I think everyone interested in franchising should ask themselves first. Consider this Step 1, before you start the Googling or the trade-show visits, a self check-in with the questions below will transform your process and help you to make sure that you’re going down the right path.

Question 1: What is your appetite for risk?

Many people think they want to ‘own’ a business, and why wouldn’t they? They get ‘passive income’, freedom to set their own schedules, and get to be their own boss. The catch to all of these privileges, however, is the total, 100% responsibility that comes with the title. Yes, the rewards are higher, and in the right model, substantially higher. But with more reward also comes more risk.

Now, the right Franchise can substantially alleviate that risk, but no franchise model eliminates it entirely. You need to ask yourself, are you comfortable being ultimately responsible for the success and failure of this business?

Question 2: Do I actually want to manage/operate a business?

Like the first question, it’s important to look at both sides of the business owner’s coin. At your job right now, what bugs you the most? Are these things that you will realistically leave behind, or things that will only become even more burdensome when they affect your bottom line in your own business?

Many people answer this question by saying something like, “well, at least when it’s my business I’ll get paid better for the headache so it won’t be that bad”. I can promise you, wholeheartedly, that this will not be the case. If you get easily annoyed by angry customers at your current job, you’re going to find your blood pressure ten times higher when they’re insulting your own business. Now, it’s important to put this into perspective. Everybody has parts of their jobs and lives that in a perfect world they would do without. But, these things should at least be tolerable because they help you accomplish your ultimate goals. If your ultimate goal is to run your own successful business, then the angry customers will be a nuisance, but ultimately won’t ruin your day. If, however, you want to be your own boss so that you ‘don’t have to deal with this anymore’, then I strongly encourage you to reconsider.

Question 3: Am I a rebel? Do I have to be in charge to be happy?

Most people think of a business owner as a type of renegade who sets their own terms, does what they want when they want, and gets paid handsomely for it. Businesses like that might (emphasis on ‘might’) exist, but they’re certainly not what Franchising is all about. If you can’t truly see yourself as being happy as part of a team, Franchising just isn’t for you. Similarly, if you aren’t ok with someone else making policies, procedures, and standards that you must follow without exception, then you will always find yourself frustrated. Remember also that some brands involve their Franchisees more than others in high-level decision making. Pizza Hotline, for example, has a host of programs and channels available for Franchisees to give feedback on new innovations, changes, and improvements. However, the ultimate control of the brand rests in the Franchisor’s hands. And remember, this is exactly what makes the brand so successful. McDonald’s would not be the brand it is today if a burger in Tokyo didn’t taste exactly like a burger in Omaha. It is precisely this considerate, purposeful surrender of control by Franchisees to their Franchisor that allows everyone to succeed in the long-run. If you are ok with not having the last word and working collectively to maintain brand excellence while growing your bottom line, then you can have a lot of fun in the right Franchise model.

Question 4: How do you build your furniture (where’s the instruction manual)?

Most people have gotten to experience the joy of assembling furniture at one point or another in their life. Some people dive right in, throwing the instructions aside, and revel in the thrill of figuring out how each nut and bolt fits into the pieces. At the end, these people’s IKEA chair might turn out to be a TV stand, but so what? It’s the joy of the process that mattered to them.

Others follow a more linear strategy, first taking out each piece one-by-one and placing them face up so that their associated number is clearly shown. The instruction manual never leaves their hands, and in a mere 8 hours that chair is constructed with clinical precision. And now they defer to the ‘creative’ on the room on figuring out where to put it.

Although comical, this analogy really is a revealing illustration of the mind of a Franchisee. Someone who does well in a Franchise Model needs to understand and value both of these approaches in a careful balance. A Franchisee is given, at least by a great Franchise, a very clear set of policies and procedures, and carefully trained on how to use them. However, that Franchisee also needs to possess in themselves the hunger, work ethic, and attitude to employ that training and make the concept work in their market. They need to be able to recognize new opportunities and bring them to the attention of their Franchise Team, and need to be able to adapt and learn always evolving systems. They need to be well-rounded and find the balance between a respect and deference for protocol and the less-defined elements of entrepreneurship. If you found yourself really identifying strongly with one of the above chair-building scenarios, think about why. It’s possible that a Franchise may pull you too far out of your comfort zone in the other direction.

Question 5: How private am I?

This question might seem odd, but it’s just as important as the first four. Franchise models require total transparency from their Franchisees on every and all element of their business. Franchise selection processes will include full credit and background checks, often going as far as auditing your social media footprint. Operations departments will ask for hourly, daily, or weekly reports on your sales, your waste, your voids/comps, your staffing levels, your delivery times, etc. Accounting will want to see your tax returns, have access to your bookkeeping software, know how much money you’re paying yourself from your own business, and more.

Companies like mine do this because in understanding the whole picture we can continue to work to make our model more advantageous for our Franchisees, but if reading the paragraph above made your hair stand on end or got you a little agitated, it’s very likely that you will simply find Franchising too invasive.

A proper introspection on what you are really looking for should always be the first step in Franchising. By asking yourself these 5 questions, you should be able to figure out with certainty if the Franchise Model is what you’re looking for or if you need to continue your search. If, after going through this exercise, you’re confident that Franchising is for you, then start reaching out to some of your favourite brands and learning more about how to get into business with them. As long as you know what you want, I can promise you that the world of Franchising can become the perfect opportunity you were looking for!