Ask an Expert: Want to start a franchise? Try this quiz
— -- Q: One thing I am thinking about for the new year is starting a franchise. There is one out there I like a lot and which I think would be successful — both in this economy and in my area. But how do I know if I would make a successful franchisee? I have always worked for someone else. — Sam
A: The Franchise Times once conducted a survey of the "average franchisee." What they found was that the standard franchisee is male, in his mid-40s, owns a few franchises, works more than 50 hours a week, and went to college.
But don't worry if this does not describe you. Franchisees come in all varieties.
Potential franchisees are people looking for a change, maybe someone in mid-career, maybe even someone who was recently laid-off. They like the idea of owning a business but want some help. They appreciate that with a franchise they are buying a brand as well as getting someone who can and will help them.
By the same token, franchisors want and need good franchisees, for several reasons. First, a successful franchisee builds the brand, while an unsuccessful one hurts the brand. While unsuccessful franchisees can be litigious, successful franchisees become valued business partners. From the franchisor's point of view then, a good franchisee should be:
• A person who is highly motivated and enthusiastic
• A hard worker
• Someone who is coachable, that is, someone willing to take direction
• Someone also willing to try new ideas and ways of doing business
• Someone with relevant experience
One of the great things about starting a franchise, especially in a tough economy, is that it should reduce the inherent risk of the start-up. Whereas a new business start-up, sans franchise, is a bit of a crapshoot, with a franchise you are getting a system that should have been properly vetted, thereby making the entrepreneurial venture less risky.
But the question remains: Would you make a good franchisee? To help you decide, take the following quiz. As you answer, please be totally honest with yourself. Some answers may seem like the right one, but it really does you no good to answer the question correctly if it does not really help you understand your franchisee aptitude. Buying a franchise is also a major commitment of time and money, so there's that reason too.
Answer yes or no:
1. I do not need to be the only boss; I am willing to listen and even follow the directions of the franchisor2. I am willing to work very long hours3. I personally have the financial wherewithal to get the business off the ground, and if I don't, I am willing to borrow the necessary funds4. I am very organized5. I have at least five years of relevant experience, preferably management experience6. I have managed people previously and have hired and fired employees7. I am good at sales and marketing8. I am willing to take a risk with money to make money9. My family supports my decision to buy a franchise10. I am very motivated and willing to do whatever it takes to succeed in the business11. I am willing to follow the system, even when I disagree with it12. I am creative, committed, and hardworking13. I am willing to participate in company-wide events and advertising promotions14. I like to lead15. I can live without the certainty of a regular paycheck and benefits
If you answered yes to at least 10 of the questions, then it is likely that you have what it takes to be a franchisee. Also, note that while all of the characteristics above are important, it is especially vital that you be willing to be part of a team, are sales oriented, and are hard-working and motivated.
Even in a challenging economy, people are starting businesses and franchises and making them work. If they did it, so can you.
Today's tip:"The success of additions such as the Filet-o-Fish, the Big Mac, Hot Apple Pie, and the Egg McMuffin each evolved from an idea of one of our operators. So the company has benefited from the ingenuity of its small businessmen" — Ray Kroc, founder of McDonald's.
Special note:Next week I begin my annual look at the biggest trends in small business for the new year. Tune in!
Ask an Expert normally appears Mondays. You can e-mail Steve Strauss at: sstrauss@mrallbiz.com.And you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —www.mrallbiz.com.