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Do You Have What It Takes To Be A Franchisee? By Cliff Ennico www.creators.com "I'm looking at a number of options for setting up my own business, including some franchises. I'm wondering, though, if a franchise would be a good fit for me. Is there any way of knowing if my personality would suit me for a franchise as opposed to my own startup business?" When you buy a franchise, you buy a pre-existing business plan that has been proven successful in other (hopefully, lots of other) locations around the country. You are assigned a franchise territory, you are trained in the operation of that business, you lease retail or office space (although there are some newer franchises you can operate from a home office) within the territory, and you start a local business using the franchise's trademarks. When you buy a franchise, you are "hedging your bets". Published data demonstrate that franchised retail and service businesses generally fail less often than their standalone counterparts. Note that it's not correct to say franchised business SUCCEED MORE OFTEN than standalone small businesses, merely that they FAIL LESS OFTEN #150; quite a different thing. This shouldn't be surprising. When you buy a franchise, you are joining a "street gang" of entrepreneurs. A solid franchise will train you in the business, help you pick the right location, furnish you will all necessary equipment and supplies, send their employees out to help you with your "grand opening", and make available a 24-hour, seven-day-a-week toll-free hotline to answer any questions you may have. If the franchise can't answer a question, you've got all of your neighboring franchisees to tap for advice, who will be happy to return your e-mails and telephone calls because (A) they have their own franchise territories and are not competing with you, and (B) they probably have some questions of their own you can help answer. In the words of the Broadway musical "West Side Story": "when you're a Jet, if the spit hits the fan, you've got brothers around, you're a family man . . . " (apologies to Messrs. Bernstein and Sondheim). But that security comes with a price . . . Unlike Burger King's customers, you cannot "have it your way" when you buy a franchise. You must follow the franchise model, often very closely, and seek the franchise's permission to deviate even slightly from that model. Franchises are all about uniformity and consistency #150; a Burger King restaurant in Bangor, Maine offers its customers exactly the same experience that a Burger King in San Diego, California does. If even one franchisee steps out of line and does something different, it affects the entire franchise system. Now, when you first buy a franchise, the franchise rules are no big deal. After all, you are new to the business, and you're very grateful for the detailed instructions and training the franchise is giving you. After a year or two, however, you will know the business fairly well #150; probably as well as the franchise itself does, and perhaps a little better because you know your local market better than it does. That's when the franchise restrictions start to chafe. You may have excellent ideas for improving the franchise, but you can't execute them unless you can persuade the franchise to adopt them for the entire nationwide system. You will start wondering why you are paying 8% to 12% of your gross sales each month to a faraway company that's no longer providing you with the intense support they did in the early months. An old college friend of mine now runs a successful home improvement franchise. I once asked him what he looks for when evaluating new franchisees, and I have never forgotten his answer: "We look for good second lieutenants, Cliff. We don't look for buck privates, because they need to be told every day how to tie their shoelaces. But we also don't look for generals who think they know more about the business than we do." If you are the type of person who needs some structure in your worklife, and are not afraid of selling, a franchise might be a good fit for you. If the thought of selling makes you gag, do not buy a franchise #150; unless you are buying an extremely well established and recognized franchise, the franchise name won#146;t sell itself. You have to go out and build the franchise brand within your assigned territory. On the other hand, it's possible to be too entrepreneurial for a franchise. If you are the type of person who can't follow orders and always think your judgment is better than your boss' (which, after all, may be one reason you are considering self-employment right now), you may find a franchise too restrictive and confining. Start your own business instead #150; that way, you're 100% in charge and can do whatever you want, whenever you want, without having to get anyone's permission or approval. Except, of course, for your customers . . . Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2008 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com.