Is Franchising Right for You?
In 1978, Lawrence "Doc" Cohen was a bored pharmacist working for a retail drug store chain in Huntington Beach, California, and dreaming of becoming his own boss.
Intrigued by the idea of owning his own cookie store ("I liked the idea that customers who leave are happy because they have what they want"), he traveled to Atlanta to talk to a company that had just begun franchising its Great American Cookies stores. His initial skepticism melted away after researching what was involved in franchising, talking to the company, and becoming convinced that he and Great American Cookies were a good match.
But Cohen's dream to sell Double Doozies and Dinkie Doozies in Huntington Beach ran into a little problem: The franchisor had inadvertently failed to comply with California's registration laws and Cohen was locked out of opening up a California franchise.
To make up for the error, Great American Cookies let him have his choice of eight or nine locations then available. After some more research, he chose Lafayette, Louisiana, though he had never been there. Eighteen years later, he was the largest franchisee in the Great American system, with 27 stores, employing 280 people in four states.
Obviously, franchising worked for Cohen. But how does someone today in the same position as Cohen was back in 1978 know whether franchising is the right move? He offers this advice:
- Do your homework. Find out first whether a market exists for the product or service you want to sell. How many other franchisees are in your area? How successful are they?
- Know yourself. If you want complete control of every detail, franchising is probably not for you, he says. If you're the type who wants to tell the franchisor that the cookies should be square instead of round or that the lighting should be different, open your own unaffiliated store. "If you can't live within a system," he says, "you shouldn't be in franchising."
- Make sure you understand what ownership entails. Call franchisees and ask them to describe a typical day, Cohen says. Sometimes being an owner means spending the day elbow-deep in cookie dough. If that's not what you want from a franchise, you better find out ahead of time.
- Weigh the various factors realistically. Never forget, he says, that just because franchising succeeded for one person, it might not succeed for you. And don't forget that franchising is a partnership: After 18 years, he still talks to his franchisor almost every day. If you're not ready to work closely with a virtual partner, don't buy a franchise.
So that's some advice for deciding whether franchising is right for you. In the next article, we'll get advice from Cohen and others on the second step in the process: How a person who wants to get into franchising decides which franchise suits him or her best.