Your Life As A Franchisee

Entrepreneur.com:

Maybe you’ve thought it would be fun to own a business where you’re building a household-name empire, running a restaurant or dealing with the latest developments in technology. But what is it really like to buy a big-name franchise, a restaurant franchise, even a tech franchise? We asked franchise consultant Jeff Elgin to reveal exactly what you need to know about buying…

A Big-Name Franchise
Most people equate franchising with ubiquitous mega-systems: the large fast-food franchises like McDonald’s or Subway, hotel operators like Hilton, or other business-format franchises like 7-Eleven or ServiceMaster. These systems are big–really big–and they have advantages and disadvantages as franchise opportunities.

When you buy a franchise, you hope to receive at least 2 things: a valuable brand and a proven operating system. The primary advantage of big franchise companies is that both of these are basically set in place. You can research consumer awareness and attitudes about the brand simply by asking around. And you can determine the franchise’s track record pretty easily by visiting its numerous franchisees who have been operating for a long time.

Another advantage is that large franchise systems can offer you safety and dependability. The risk of starting in a big franchise system is usually lower, because all the kinks in its system have long since been worked out. This doesn’t mean you are guaranteed to succeed, but there’s more certainty due to the wealth of information available about the current system and its operators.

Mega franchise systems can have disadvantages, too. Many large systems have already built so many units that getting approved to open a new unit as a new franchisee can be difficult. These systems tend to favor successful current operators for new unit expansion opportunities, because this approach is less risky than taking a chance on a new, unproven operator. Read more.