Is buying a franchise the right choice for you?
You look at yourself in the mirror, and you know you see an entrepreneur. You see yourself running your own shop, hiring a dream team who will stand behind your vision, and deliver on it. You want to be in the business of making people smile, providing them with a product that you know that they will love, because you are passionate about it.
What you might be unsure of is whether to start your very own business, or if you should buy a franchise. Of all the hurdles you need to leap over, this is one of the first and biggest ones. You need to be sure that it’s right, and you need to love the franchise you are going to invest your time, money, and life into.
When you make the right decision, it’s a win-win.
As a franchisor, we have spoken to many people who are working through this decision. Also as a franchisor, we aren’t in the business of convincing people to purchase a franchise when there are clues telling us that might not be what you want. We like to help people figure out the right decision for them, because that is truly in everyone’s best interest. When you begin your research, start with yourself. Think about these questions:
- What am I passionate about?
- Are there franchises that share this passion?
- Do I believe in proven systems?
- … or do I want to be a trailblazer and start from scratch?
- What is my vision for my business?
- Make a checklist. Do you want to be seen as cutting-edge? Philanthropic?
- When reviewing franchisees, see if their vision aligns with yours.
Let’s assume you are very close to deciding whether starting a business or buying a franchise is right for you, but there are a few big boulders getting in the way of helping you make your decision. Based on the discussions we have with prospective franchisees, below are some of the most common points of discussion.
I want the money I work hard to earn through my business to be invested back into my business.
There are a few ways of thinking about the royalties and marketing fund fees that your franchisor may collect. One way is, “This is money that I wish I could take home, or re-invest in my own business.” That may be true, but consider your level of expertise and the support you receive from the franchisor network. When you select the right franchise, you know that although you are paying royalties, these funds are an investment in the support you receive from the franchise network. In many cases, you will have a regional manager who is your go-to for all questions, related to policies, procedures, marketing, operations, HR, and more.
Having access to this information readily available is an investment in time, which allows you to concentrate on your business. Compare this to running an independent small business where you are solely responsible for all of these things. You may be comfortable taking on every single hat, but maybe you just want to focus on the core business.
COBS Bread develops annual strategies to help guide bakeries and the organization to success. We hold strategy sessions twice per year to develop strategy and check-in on progress against our goals to ensure we are providing the right direction and support to our franchise network.
On an ongoing basis, the advice of Area Managers (AM) and head office team are working in the background to address individual franchise issues. Problem with your baking equipment? Let our Supply Chain team help. Concerns about the bakery’s profitability? Your AM, Regional Director and Finance team can take a closer look. Something weird happening to your Danishes and croissants during the baking process? Our Product Specialist can help diagnose. Having problems with the landlord? There’s a reason we have a real estate team.
Building a Brand
I want everyone to know about my brand and what I offer.
After much discussion, brainstorming, thought-mapping, storm-clouding… you’ve come up with an awesome business name. Now, you need to tell everyone about it, cause only you, your dog, your family and friends know who you are and what you stand for.
While this can be a fun exercise and might be something you have to do if you’ve bought into a lesser-known franchise, it takes time. A lot of time. And often (if not always) a significant investment.
When you hear the name of a business that you know, you instantly make associations with it based on your experience with that brand. Those brand experiences are made up of the advertising you have seen, how many of your friends have told you about it, your interactions on social or in person, and more. Beyond awareness, strong brands have an identity that has been established through consistency and staying true to their voice.
At COBS, in addition to ongoing evergreen marketing, we work to develop the brand through our ongoing marketing campaigns (10, to be exact). These campaigns promote specific products throughout the year. They are conceived, built and delivered to franchisees by the marketing experts at the support office. Each campaign includes a significant spend on digital and traditional advertising to draw people into your bakery. Bakeries receive in-store campaign materials, merchandising plans, and suggestions on how each bakery can take their campaign further in their local communities. Think of the resources you would have to use to make this happen 10 times a year for your small business. Trust us; it’s a lot.
I want to make sure I can get what I need, when I need it, and for a good price.
It’s time to sort out your supply chain. Where will you purchase the items you need to make your product, or sell in your business? A lot of research is required, and you will be doing a lot of negotiating. If you are a part of a franchise network, this will already be determined for you, and the negotiating is completed on your behalf. Because you are a part of a larger network, you can be confident that your franchisor is working to drive the costs down. When the costs are low for the franchisees, the profit margins are higher, which is a benefit to both the franchisee and the franchisor.
At COBS Bread, for example, our Operations, Product and Supply Chain teams work together to identify any pain points regarding to pricing of ingredients and investigates alternative suppliers to ensure we are able to provide our network with the most competitive prices. We have teams dedicated to just this, which is something not all small business owners can do. In addition, if there is an issue with an ingredient in the supply chain (such as a shortage), there is a team there ready to quickly source an alternative to cause as little disruption to your business as possible.
Your gut feeling- what will make you happy?
Never underestimate the importance and impact your happiness has on your business.
There will always be facts and figures. Webinars and expos (which we encourage attending as part of your research). You’ve done a lot of research, collected all the information, and are fully educated. Take some time off to let all the information settle in your subconscious.
There are a lot of benefits to buying into a franchise with a proven system. At the end of the day, however, you need to be happy. It doesn’t get simpler than that. If you are deciding between opening your own business or a franchise, take the time to research different franchises. Don’t do it hastily. You will learn a lot about small businesses. You will want to track the benefits offered by each franchisor. The amount you are willing to invest will heavily factor in which direction you take, as will this soul-searching stage.
If you’ve stumbled across this article, it may be because you are about to start an exciting adventure in your life. Our team is happy to help you find the right path for yourself. Reach out to one of our experts to chat about franchising and get answers to the questions you have.
Inquire today to take the first step.