If you can’t handle stress on the job then owning a franchise may not be for you. It can be intimidating when thinking about the costs and obligations involved. But for those of us who can handle the stress on a regular basis, becoming your own boss is a great idea.
Even if you have the confidence to go in business for yourself, you should still be well aware of these 3 hard truths:
- Losing Your Money – It takes courage to write a large check for the upfront franchise fee and sign on the dotted line for a small business loan. And, if your franchise requires a physical location, such as a retail or office space, there’s also that matter of signing a lease.
- Not Having Customers – Often, when you open your franchise, you’ll have a grand opening celebration, an event designed to showcase your new franchise business. Local civic and business leaders are usually in attendance, and there may even be a ribbon-cutting ceremony. People (a.k.a potential customers) are milling about inside your shiny, new location. There’s a feeling of excitement in the air: You just know this is going to work. Until the novelty wears off and slow days ensue. Or slow weeks — with few, if any, customers. Talk about being scared. What if you can’t pay your rent? What if you can’t meet payroll?
- The Franchisor Goes Belly Up – While it’s rare to see a franchisor go out of business, it does happen occasionally. But should you really be scared it could happen to you? The answer: It depends. For example, if you are interested in becoming a franchisee of a young franchise concept (anything less than two years old), I would suggest having a serious conversation about franchisor bankruptcy with a franchise attorney before you sign your agreement.
What advice can you offer to new franchise owners on how to run a successful franchise?