Wednesday, October 31, 2012

Does Buying a Franchise Guarantee Success?

I was talking to someone recently who’s interested in purchasing a TGA franchise when he made a statement that encapsulated several thoughts I’ve been having:

“I get it – I’m not buying a business, I’m buying a system.”

I couldn’t agree more.

I believe that the purpose of buying a franchise is threefold:

Get a developed system in a proven market that operates like a well-oiled machine so you’re setup for success from the outset.

Get a recognizable brand that is growing exponentially due to HQ building it nationally/globally and franchisees building it locally.

Get access to the intellectual capital and support of a tight-knit family that includes HQ members and fellow franchisees.

In my opinion, it is rare that our “system” doesn’t work in a given area.  All territories have their niches that require slight modifications, but the system as a whole is highly transferable from one area to the next.  That’s the point of franchising.

When I look at TGA’s most successful franchises, they didn’t get there because of the system.  They got there because of themselves.  TGA provided a system that works, but that’s our job and that’s why we’re paid franchise fees and royalties.  It was the franchisee who took the system and made it a successful business.

At TGA, we have a concept called the “Recipe for Success” that asks three questions on a scale of 1-10:
  1.  How hard are you working?
  2. How closely are you following the model?
  3. How well are you engaging the network?

It’s almost universal that franchisees who score high on these questions are doing well and the folks who don’t are not.  This list translates well to non-franchised businesses as well … you’d just need to add questions about product and market.

People often mistake buying a franchise with buying success.  It’s a big mistake to make as it can lead to (among other things) complacency.  Building a business is hard, whether it’s a franchise or not, and success comes down to your ability to execute.  

Buying a franchise tilts the odds in your favor as it provides a proven market, developed product and successful system.  But, if you ever consider investing in a franchise, I encourage you to do so with the understanding that it is ultimately up to you to take these things and turn them into a successful business. 

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