Why franchise? It’s a win-win situation – once you gamble on the right horse. Franchising is almost like buying your own personal license to print money. Seriously, if you have enough investment capital, and you buy a franchise that is already successful, put it in the right location to reach your target market, man, you could be making dough hand over fist.
If you hate the office grind, or feel you are just stuck in a dead-end job and are awaiting that opportunity to prove you can do more, then this is why you would franchise. It’s a chance to use the power of a well-known brand, with a proven profit margin and a tried and tested business model, while still calling the shots and being in charge of your own business.
One of the key elements to making a franchise work is buying into a brand that you believe in. The answer, as any oracle or guru will tell you, is right in front of you. What fast food or restaurant do you love? Which clothing brand do you absolutely adore? More often than not, your hobbies are the perfect clue to your business passions. If you can find a franchise that will make work seem like fun, you’re definitely on to something.
Jamie McGillivray is a perfect case study and answer to the question “Why franchise?” After working for 17 years at middle management level at McDonald’s, McGillivray decided to take a leap of faith in himself and quit his job selling Big Macs. “You reach the stage in life when you want all your hard work to show fruit for yourself and your family,” explained McGillivray.
He had watched hundreds of entrepreneurs make the leap into franchising – he had even helped them! – and figured he could use all of his experience to help himself, finally. “From my time with McDonalds I gained an understanding of how a successful franchise system should work and an idea of what to look for in a franchise,” he said.
First, he undertook a lot of painstaking research. Despite his extensive experience with McDonald’s, McGillivray still wanted to make an informed decision on where to invest his life’s savings and energy. He did research into different franchises, meeting with franchisees to learn about their growing pains.
After studying market trends and the potential demand for the product, he settled on Clark Rubber, an iconic Australian retailing brand, which has been in business for 65 years, with 75 stores across Australia. McGillivray had used Clark Rubber´s products and was confident about the brand.
Two years later, McGillivray and his wife have two Clark Rubber outlets in Western Australia. “A lot of people don’t realise what a franchise system is all about and whether a particular franchise is right for them before they take the plunge,” McGillivray said. “It’s like taking a car for a test drive; you need to ask, ‘Can I see myself driving this car on the road every day?’”
With his first store doing well and his second looking very promising, McGillivray said he had no regrets about taking the plunge into franchising. However, it’s not for the faint of heart. “Although you’ve got the stability of a known brand and franchising network behind you, you’re also opening the doors of a new store to a whole new customer base,” he warned. “It’s a steep learning curve and you only get out what you put in.”
There are other disadvantages to owning a franchise, unfortunately. The business must be run precisely according to the operating manual, as set out by the franchisor; you have to use their supplies; pay fees/royalties for the lifespan of the licence; compete with rival suppliers of the product/service; pay for the training and support services offered by the franchisor. If you are a true maverick, you may well chafe at the rules and regulations of the franchisor. In which case, you may well end up in a legal dispute.
So think long and hard about why you want to franchise, and choosing the right one for you. And if you like food a lot, maybe a fast food franchise is not such a great idea. You may love what you do; but you may end up spending more time at a weight loss clinic in the long run…