Franchising could be your best decision yet
Franchising is a strong sector in its own right, but segues into the SME journey because each franchisee is in charge of their own small business.
And yet franchising has an advantage over the individually run and owned firms that dot the Australian landscape; it is considered a less risky adventure than independent business ownership (though there are failures in the sector) and franchisees are treading a worn, and in many cases, well-worn path in business with a brand that has some recall among the populace.
This places franchisees in an enviable position when it comes to setting up the business and then growing the business as demand increases, with the experience of others to show the way. It leads to a team of experts on hand to give franchisees the advantages of a bigger organisation rarely found in a single business operation. It may also give franchisees the benefits of strong negotiating power for leases and stock supplies, thanks to the strength of the brand.
If you want to run your own business and see that standing on the shoulders of others helps you reach the heights of your ambition more effectively then buying into franchising could be your best decision.
Tony Melhem has been involved in many different aspects of franchising: as a franchisee for Gloria Jeans, as the Franchise Council of Australia's deputy chairman, the chairman of its National Franchisee Forum, and founder of caf business Coco Cubano.
"If you're ready for the challenge, buying a franchise could be the best decision you make. You will be working for yourself and be in control of your own destiny. There is a great deal of fulfilment and satisfaction in being your own boss. Of course, you’ll be working hard but you can choose if you need to take time off and attend a kid’s carnival or concert, or stay home if someone is sick.
"Buying and running your own franchise business will challenge you and help you grow like nothing else. It's certainly been my biggest learning experience. As a franchisee you’ll learn about the operations of the business, training and motivating staff, being CEO. You have to learn to do everything if you want to do it well.
"But you're also building a nest egg and an asset you can sell. Some franchisees choose to work at building their business so down the track they can get a passive income.
"As a franchisee you get a turnkey business, operational support, help with marketing and branding, training, quality products — sometimes even proprietary products that are exclusive — and you get the benefits of buying power.
"When you invest in a franchise you’re joining a proven system and business format. To try and start up a business yourself, well, I know how hard it is. I’ve done both, and I've invested so much time and money in building a system. In a franchise someone has already done that for you."
Sergio Alderuccio is the general manager, franchising and distribution, at Franchise Careers and has more than 25 years' experience as a franchise advisor to companies in retail, service, manufacturing, government, automotive and hospitality. He has also been a franchisee.
"Going into business for yourself is one of, if not, the most important personal and financial decision you will make in your lifetime — for many, it’s a lifelong dream. It can also be one of the most rewarding decisions you ever make," he said.
The most important decision, however, occurs at the very beginning of the process when you determine your motivation for owning your own business. What is your motivation? What are your limitations? Emotionally, personally, professionally and financially, are you ready to be a small business owner? There is little point getting over-excited about an opportunity that does not satisfy all of these four key selection criteria.
The next question is whether you buy a small business or opt for the support of a system and brand and enter the world of franchising. There are almost 2000 different franchise systems available around the world and there is no simple formula for choosing the right path for your business journey. There are some guidelines though.
Firstly, determine what it is that you have no interest in doing. Once you determine what does not interest you, keep an open mind to other possibilities. In franchising, the large majority of business owners had no previous experience in those industries or had any idea they would ever become franchisees in those systems when they began their search for a franchise.
Secondly, you must be positive that franchising is the way for you to go. Franchising means realising a number of things, most importantly, you must be willing to follow systems and practices which make franchising successful.
For people who have a very difficult time following directions or are always trying to change things or feel they know a better way, franchising is most likely not a good choice. Franchising relies on compliance to the system, after all, that’s why you are buying a franchise in the first place. It’s about a desire to be in business for yourself, but with the company of others who have the experience and knowledge to support you.
Thirdly, if you have the desire, commitment, passion, resources and support required and you believe franchising is the best way to go into a business, you must take the time required to find the best franchise system for you. You must then channel your passion, focus and your belief in franchising and use your resources wisely to achieve the level of personal and financial success you desire. Having conducted your due diligence and started your new pathway, the satisfaction of being a franchisee can be exhilarating.
Like any business, it will be demanding; however, knowing you have the ongoing support of the franchisor, together with their internal knowledge and experience, as well as many supportive franchisees that are on the same life journey, franchising can be extremely satisfying.
Ultimately, franchising will assist you to enjoy gaining knowledge through your peers, to grow in confidence, develop skills, build teams, provide opportunities and flexibility and, ultimately, increase wealth, and help you reach your desired lifestyle.