Getting real in the franchising world

If you aspire to a business where you financially benefit through little work or financial hardships then think again, because no such business exists. Business is hard work. Yes, it can be rewarding and can provide you and your family with an increased level of financial security. Yes, it can provide you with the autonomy to make your own decisions and create your own future.

But – and it is a significant ‘but’ – you could lose it all if you don’t conduct the right research prior to going in.

The success formula is well known, yet few people apply it due to their own bias, belligerence, and lack of due diligence. We rarely act without thinking, yet many people who begin a small business venture could threaten their family, their asset base and their health by not applying proper consideration, research and advice from experts, prior to entering a business.

To reduce risk, but without any guarantee of success, savvy small business investors are attracted to franchising. Yet, the key elements of success remain: sales through local area marketing and controlling expenses. Complying a successful franchise business model can also reduce risk, but this should not mitigate your due diligence to research before entering business.

Australia has a well-regulated small business sector via the Trade Practices Act.

Franchising is even more regulated through the mandatory Franchising Code of Conduct. Yet, we operate within a market economy, and thus, we remain at the whim of the consumer who is subjected to fierce competition for their consumer dollars.

Lose the confidence of the market (customers) and your business – no matter the brand – will suffer. It’s important to understand that you will need to be the Chief Operations Manager, the Marketing Manager, the Production Manager, the Accountant, the Compliance Officer, the HR Manager, and the Sales Manager. But you will also have to be a family member, a friend, a community participant, and still have time for yourself. It is hard work being a small business operator, and yet, the paradox remains that it can still be very rewarding.

Franchising is no panacea for success, but although you are in business for yourself, you are not in business by yourself. And that is the major benefit of the franchising model.

The franchise model can provide brand, and thus, market acceptance. Franchising provides the operations formula already developed within the market. It provides training, support and an operational track record. But, franchising isn’t a guarantee for success.

Franchising can provide you with the small business vehicle, but it requires effort and compliance to the franchising model to ensure risk is reduced.

If you aren’t prepared to be managed within the operational restrictions of a brand, then franchising may not be for you. Why be married if you want to be single?

The Franchise Council of Australia recommends that before embarking on your small business adventure, you apply massive amounts of due diligence within your research. Seek franchise expertise from proven franchise consultants with a track record in successful franchise development.

Seek education on the many competencies required to be a successful franchisee, and take the time to make your decision. It is strongly recommended that you do all of this before you commit yourself to a franchise agreement.

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The Franchise Council of Australia is a not for profit membership organisation that is the peak body representing the franchising sector in Australia.