Following our previous blog on how to assess a franchise opportunity, we now move to another important question: should you buy a franchise at all? As an investor you will need to put in a lot more hard work owning a franchise than would be required by any other asset, but the returns could also be excellent. If you are considering buying a franchise, answer the questions below and decide whether this is a good investment for you.
Are you a hands-on person?
Unlike a policy that you can essentially buy and forget about, or a property that requires occasional maintenance and monthly rent collection that can be handled by an agent, a franchise is a business that needs to be managed. If you enjoy managing people and processes, and aren’t afraid of hard work you may be well suited to owning a franchise.
Do you have entrepreneurial flair and great people skills?
Your franchise will need to establish itself with the local market, and you will need to deliver great service (with a smile) to your new customers to make your franchise is a success. If you are more reserved, or don’t enjoy actively engaging with people you may find owning a franchise quite stressful and should consider investing elsewhere.
Are you willing to take advice, even when you are in charge?
Because the franchise is part of a chain, the business idea is not yours even though you own the business. While this is an advantage because you are buying into an established brand, you will not be able to run the business exactly as you wish. You will probably have to buy stock from the franchisor and may not be able to change the business to suit the market in your area without permission.