Buying a franchise, like any business, is a big decision. Just because it’s already established doesn’t mean it’s a guaranteed ride to success that will leave you jumping with joy and having lots of money in the bank. Here, we will unpack this very important question to find out whether buying an established franchise is really the right answer for you.

Points that may attract you to the idea of buying an established franchise: -

• Proven profitable business model that has been tried, tested and measured.
• Convenience of having business systems, branding, product research & development, credibility and customer loyalty already established.
• No need to make the really big decisions as that is the franchisor’s job.
• Part of a team with training, support and feedback.
• Purchasing power of a group.
• Possibly lower establishment costs (depends on the franchise) compared to creating a similar business from the ground up.
• If you are new to business, it may give you comfort knowing that there is an existing business structure in place.

Now let’s look at some points that may deter you: -

• Less autonomy and control as you are restricted in the business decisions you can make.
• Conflict can occur if the franchisor makes decisions that negatively impact the stability, profitability or growth of your franchise.
• The business is someone else’s vision, not yours.
• If there are any unprofessional franchisees in the group, it could affect the brand’s reputation and profitability.
• Territory, hours of operation, advertising & purchasing restrictions could inhibit your particular franchise growth (depends on the franchise).
• Possible high establishment costs (depends on the franchise) because of the existing success of the brand (marketplace value).
• Having to pay an ongoing percentage of your turnover in franchise and marketing fees to the franchisor.

Were you mostly attracted or deterred after reading both?

If you were mostly attracted, then perhaps you are the type of person who…

• prefers to let others take control of the bigger decisions;
• is really not all that visionary and would rather other people come up with the ideas, and
• likes the thought of being part of a team with all the support, business structure and systems already implemented.

If this sounds like you, then buying into an existing franchise may just give you the personal satisfaction you desire.  You will probably feel more secure in this type of environment than having to create your own business from scratch. 

You will of course have to find the right franchise to suit you and do your research on the more detailed legal and financial aspects. If you do decide to buy into an established franchise, just because some of the work has already been done, does not mean you can take is easy. You will still have to put effort in, show leadership, commitment and a positive attitude; develop your communication, general business and financial literacy skills, as well as take responsibility for your own success or failure.

If you were mostly deterred, then perhaps you are thetype of person who…

• likes being in control and making all the decisions without restriction;
• wants to express your ideas, creativity and vision to the fullest, and
• prefers the thought of building something totally from the ground up.

If this sounds more like you, then buying into an existing franchise may not give you the satisfaction you desire. You would eventually just get very frustrated and stressed from the lack of stimulation, challenge and control, and this could in turn affect the success of your business. You may be better suited to actually being the franchisor and creating your own franchise business!!

After assessing all of the points above, you can see why it is so important for your business success to understand yourself first and foremost. There are many things to consider when looking at purchasing a franchise, and this is only one area but a very important place to start.

Whatever you decide to do, I wish you all the very best for your business success!!

Nicole Murray
Business Development Coach, Hot Chocolate Coaching 

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The information in this article, and all other articles provided by Hot Chocolate Coaching, is intended for general information purposes only and does not constitute, nor is it intended to constitute, professional advice. For advice specific to your business or life, you should always consult with the appropriate professional in order to determine the actions and laws that are applicable to your particular circumstances.