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Becoming a franchisee

Retail Food Group – Why People Buy A Franchise: Becoming A Franchisee

Franchising not all freedom and autonomy, expert warns

By Michelle Hammond
Friday, 03 August 2012

Prospective franchisees are drawn into the industry for greater work freedom and autonomy, according to a new survey, but an industry expert warns these freedoms can often be limited.

 

The survey, of 180 new franchisees, was conducted by Retail Food Group, owner of Donut King, Michel’s Patisserie, Pizza Capers, Brumby’s Bakeries, bb’s café and Esquires Coffee Houses.

 

According to the survey, “greater financial potential” and greater work freedom/autonomy” are the top two reasons for franchisees wanting to purchase their own business.

 

According to Faith Manning, RFG national sales and leasing coordination manager, inquiries from potential franchisees have been strong in recent months.

 

“As global economic woes continue and uncertainty grows about their current employment arrangements, people are looking to take matters into their own hands,” Manning says.

 

“Owning your own business is a way to seek greater financial reward for your efforts, while at the same time taking greater control of your working arrangements as you are the one in charge.”

 

But Greg Nathan, founder of the Franchise Relationships Institute, warns not all franchises can offer franchisees the level of freedom and autonomy they want.

 

Nathan says the best thing to do is to talk to other franchisees in the network.

 

“The best data you can get is to go to the source. Those people don’t have a reason to lie or distort the data, and they’re often quite excited about talking about their business.”

 

“Talk to as many franchisees as possible in the system and ask them how many hours a week do they work,” Nathan says.”

 

“Ask them about their typical week. Ask them specific questions like when was their last day off, how many days off they have, etc.”

 

“Also, ask them what the pattern has been [with regard to work hours] since they bought the store.”

 

Nathan says it’s also important to remember that while franchisees do have a certain level of autonomy, they are ultimately bound by the requests of their franchisor.

 

“The assumption is because I run my own business, I will have autonomy and that is true to a large extent. On a daily basis, they’re not reporting to anyone,” he says.

 

“The only area where they do give up autonomy is with regard to the actual business concept.”

 

“Not everyone is creative and not everyone wants to come up with new products, so [being controlled by a franchisor] is not a big deal for 70% of franchisees.”

 

“However, they do have quite a bit of autonomy around how they market in their local community…and the culture they create in their stores.”

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