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Self-employment is a widely held desire in Australia, although usually one that is often associated with not much knowledge of precisely what is involved. Great ideas abound of 'doing your own thing'. So, for franchising, the bait is strong enough to at least initially interest a great many people.
What most aspiring franchisees tend to overlook is that, assuming that a franchise system is based on a proven business concept with sound training and support systems, a massive 40% of a franchisee’s success will come through the application of their own hard work and talents. This is a significant amount and a franchisee who does not have the attributes for success is likely to fail, regardless of how good the franchise might be.
A franchisee’s level of success is going to be largely determined by what he or she brings to the business.
A model franchise company will recruit as franchisees people who are not only qualified financially, but also by ability, energy and enthusiasm to make the most of the opportunity available to them.
For the franchisor, setting up a franchise is much easier than managing it later on - you have to live with your earlier mistakes and a lot of those mistakes are people you pick in the early stages, when the urge for rapid growth is the major consideration.
It’s not just a matter of selling to anyone with the money in the bank. When a franchisee fails not only do they lose their own investment, the franchisor also faces significant financial loss. So you can’t rely on 'instinctive' or 'gut' feelings to signal good or bad franchises prospects.
Firstly consider the direct and indirect resources required to support a failing franchisee including additional staff, travel costs, management time and professional resources. Secondly, in Australia, you have duties of disclosure which include (in broad terms) failed franchises and litigation. That makes future franchises harder to sell.
We’ve been there before. We can do it. Ask us how.
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