Last month I participated in a business forum where one of the panelists stated that owning a franchise is one of, if not the worst way to open a business.? He further added that if someone wanted to start their own business they are simply
is franchising bad business?
better off creating their own idea, creating their own brand and starting on their own?
Considering the panel included entrepreneurs, bankers, a business and franchise broker (not me), an attorney and business coach, I?ll let you guess which member made that statement 
.
But questions remain??
Was this person right??
Is owning a franchise a bad way to enter a business??
Considering I have my own franchise consulting and brokerage firm you might think I am biased in one way or another.? Be that as it may, let me take a stab at these questions.
Regarding the first question, was the person right?? The answer to the question is NO.? Franchise is NOT the worst way to get into a business.? Well I guess I answered both questions right off the bat, but before you start thinking that since I do ?franchise consulting and brokerage? and thus of course I am going to think this way? here me out.
There are a lot of horror stories regarding franchising.? If you google the web, you will run across countless stories regarding people who lost A LOT of money and failed miserably with a franchise.?? If you?re curious you can do some research and you?re bound to run across many examples? In fact, I have been brutally attacked by critics and former franchisees when I provide any sort of debate regarding the viability of the industry? and while I hate to see people fail, and I know there are many poorly run franchise models, it doesn?t mean owning a franchise is the wrong way to own a business.
So does that mean franchising is a bad business option?
The answer is certainly not, and while I am not going to perform a statistical analysis (much to the chagrin of my critics I would add that for every negative story you can find a positive one.? My point here is, just because people failed, doesn?t mean franchise ownerships is a bad way to enter a business? and while you still may want to consider the source, there are many franchises, franchise consulting firms, brokers, attorneys, lenders, and franchise owners who would agree, argue and provide examples of many people who have been VERY successful with a franchise investment.
So how do I know if a franchise is right for me?
Well, that?s the $64,000 question.? In my experience and after having discussions with a few franchise consulting firms, brokers and franchisors, it depends upon a number of different factors including the quality of the franchise, a willingness to learn and follow the system, having enough start up and working capital and also making sure it?s a business the person actually enjoys.? That?s really the hidden element? enjoying what you do.? I would further add that franchising is NOT for everyone.? Too often I run across people who want to buy a franchise because they think in GUARANTEES success, which could not be further from the truth.? I have been doing both franchise consulting and brokerage for years and nothing bothers me more when a concept uses the phrase ?recession proof? to describe their model.? The reality is, owning a franchise has risk? just like any other investment.
The bottom line here is a general statement? ?franchising is the worst way to open a business? is just plain wrong.? Saying that is just as bad as someone saying owning a franchise guarantees success.? If you?re serious about the concept? I highly recommend doing your research.? Educate yourself about the industry and speak with people (particulary franchise owners) about their experience.?? In addition there are many local and national franchise consulting and brokerage firms and franchise attorneys you can speak with. This can help teach you about what to look for and make the best possible decision for you.
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