Management Franchise or independent business?
Before making a midlife career change and committing to going into business, you need to weigh up the advantages and disadvantages of franchising against investing in an independent business to decide which route is best for you.
Some people prefer to start an independent business simply because it can cost less to start up than a franchise, which involves both an initial licence fee and then ongoing, regular management service fees.
However, this must be considered against the uncertainty as to whether there will be a sustainable market for the product or service being offered. Buying into an established management franchise system will provide the peace of mind of a proven business model with the ability to trade under a recognised brand name.
Promoting your business as part of a well-recognised brand should help you to win more clients more quickly and get your business off to a strong start.
What level of control do you want?
Buying into a management franchise involves buying into an operating system and being expected to follow it in order to grow the business. To some people this is an appealing and comforting proposition, especially where the franchise brand is established and well recognised. However, if you are not happy working to set guidelines and parameters and prefer a greater degree of freedom / independence, then perhaps franchising isn’t the right choice for you.
Buying into a management franchise also involves buying into a partnership with the franchisor. For this to work well, you need to ensure that your own goals, values and expectations match those of the franchisor. If the prospect of working in such a partnership does not appeal, the independent business route is likely a better option for you.
What level of support do you need?
Ask yourself what level of support you would need. Do you have enough of an understanding of all the main areas of business – finance, IT, operations, marketing etc to be able to run a successful business on your own?
A good franchisor will provide initial and ongoing franchisee training and support across all key areas to help franchisees to avoid costly mistakes and to facilitate the day to day running and growth of their businesses. It’s a partnership after all, with the franchisor having a vested interest in the success of each and every franchisee. However, this specialist support comes at a price, typically in the form of an ongoing royalty fee.
In addition to franchisor support, the support of a network of like-minded fellow franchisees, some of who will be long established and experienced, should not be underestimated. Strong franchise networks readily encourage regular and open communication between franchisees, ideally facilitating regular face to face meeting opportunities via regional and national meetings.
If you do choose to start a new business independently, there are still opportunities to meet and engage with other business owners by joining local business networking organisations.