Just as network marketing or multi-level marketing is the “new” business model, so franchising took the world by storm in the fifties and sixties. In fact it was even outlawed in some countries, would you believe.
It is, of course, a traditional business simply backed and sometimes even controlled by a parent company that in most cases offers advertising support (not always, be careful) and a business plan that should include a daily schedule or process of operation that works successfully elsewhere. This is perhaps the only advantage. If you’re store number 120, you want to know that of the other 119, even if 5 have failed, the other 114 are successful, and why. You should have the parent company not only show you why, but more importantly how.
But, here, the advantages stop. Like any traditional business, you will still have all the disadvantages. The parent company might train your staff, but there is still the risk of them stealing and giving you daily hassles, as staff do in any business. Your parent company might have a good system for stock control, but stock will be stock and it will go missing. And then there is the issue of rent. Before the parent company will sign you on and take the bulk of your money, they want to know that you have a lease signed and ready, preferably for a number of years. They don’t want to blow the trumpets about your new store only to have you close down or kicked out after a few months. A lease means being tied to someone legally for that period. Let’s say you pull out, or become, sadly number 6. You owe the letting agent rent for the full period.
Franchises can range from as little as a few thousand dollars, but a good store will probably cost you $150 000, sometimes with stock. Let’s say you have this money and believe in the product, you still have the difficulty deciding whether you want to be involved 14 hours a day, or whether you want to appoint someone else as a manager. Each option has a serious disadvantage. If you’re opting out of your present employment and want something to keep you busy, and 12 hours a day is no problem, you will probably succeed. If not, then the manager option will bring its own problems, as you can imagine. Why would anyone else work as hard as you? Do you know that you can trust them? Can you walk away from the business for three months, go on vacation and find it doing better when you come back? If not, you’re still in for at least a few hours a day, and then the money you dreamed of earning is now diluted by the manager’s salary. If he or she is bad at their job, they’ll cost you; if they’re really good why should they stick around? They probably have their own plans, and your business is free university for them, while they’re being paid!
Even a really cheap, small franchise costs money ‘ let’s say around $15 000. Why put up with all the disadvantages when you can start something from home for far less and build it up over time. There are thousands of good affiliate or network marketing businesses that can be started for far less than even $2000, and with a few hours a week, you can build it up a momentum that allows you to resign for your full-time job.
Try to choose one with little or no stock, as few employees as possible; preferably just you and a family member, perhaps. Make sure the product has an international flavour, that it is reasonably priced and that it is based in an industry that is growing: travel, health for instance. A few hours research on the internet will unearth many. Make sure the company has been around for some time, that the claims of the other affiliates are not too wild: watch out for pictures of sports cars, mansion and pictures of bank statements. Rather side with those that say it is going to be hard work and will cost you a little in the beginning, at least for advertising.
I’d rather invest $1000 in something I can build slowly without any of the disadvantages of franchising mentioned above, than part with $150 000, and on top of that a 3 year lease agreement up front, only to find these disadvantages simply overwhelm me.
A viable home business does work. And added to this is the usual affiliate marketing pay plan that allows for residual income. This simply means that you can get paid over and over again for work done in the past. For example when you assist someone else to join the business and they make sales, or find prospects, you earn from their efforts, for as long as they are alive and working the business. Now that’s exciting. And with this, it is possible to go on vacation for three months (after building the business, of course) and come back to find your team having grown as much as your bank balance.
Franchising? There are some advantages. But why pay someone else for an idea when in almost all networking marketing business models, they will give it to you free? Go find one now.