Franchising - More Than Just Buying Yourself A Job

By Kevin Bugeja, Managing Director, Franchise Selection

This article appeared in Issue 3#3 (March/April 2009) of Business Franchise Australia & New Zealand

Many people buy a franchise because they want to work for themselves. The phrase, “I want to be my own boss” is often the first comment on the lips of budding franchisees. So, why would anyone buy a franchise?

One of the top reasons is because you get to own a business, but you’re not starting at the bottom of the barrel and they feel it is less risky than starting a business from scratch. They also recognise that their work experience has not prepared them with the knowledge or skills needed to begin and run a business of their own. In addition, many are unwilling to spend time, effort and money reinventing what is already available.

Here are three other reasons someone would buy a franchise:

  1. To stop working for someone else, and be your own boss!
  2. Invest your time and energy into your OWN business.
  3. Set your own hours for business.

Consider some of the advantages of purchasing a franchise…

Initial Start-up

When buying a franchise, although the franchise itself can be expensive, it is an all inclusive package. In the long run it will work out much cheaper, not only in finance, but time wise. You will be saved the effort of looking for a location for your business, and you will be provided with all the necessary start-up equipment at cost prices from the franchisor. You will also be provided with all the relevant resources to manage staff, marketing and finance.

Ongoing support

When you manage your own business independently, you will have to deal with everything on your own. When you are part of a franchise operation, however, there will always be someone to help you out and offer advice or assistance if you experience difficulty or have a problem. Head Office usually keeps an eye on you to see how you are going, some even offering on-site assistance if necessary - after all it is in the franchisor’s best interests to keep the franchisee going.

Cost effective

With a lot of the ‘nitty gritty’ taken care of, you can focus your energy and therefore save time and money by working on what is important. The cost of raw materials and supplies are also usually much cheaper, as franchisors have bulk buying abilities and therefore get goods at cost prices. Many franchise operations also offer advertising and marketing assistance at a national level, collecting a small fee from franchisees, which works out far cheaper and more effective than going it alone. A large franchise operation will be able to offer far more exposure than a one man band.

Networking opportunities

Being part of a franchise offers a great opportunity for networking. You will no doubt meet with fellow franchisees, and will be able to share your experiences and problems with them - having a useful platform from which to bounce things off. This networked support may also help you out should you be ill and unable to manage your franchise for a time, and it is also far easier to sell a well-known franchise brand to a fellow franchisee, or someone outside, as it will bring with it market awareness.

So, if you’re on the fence about buying a franchise, be sure to ask yourself the following questions first:

  • Do you want to be your own boss?
  • Do you have enough financial resources to invest in a franchise?
  • Are you a positive and motivated person?
  • Are you a “go-getter”?
  • Can you self manage yourself?

Do you think you can run your own business?

If you answered yes to the above questions, then perhaps you should truly consider purchasing a franchise. However before you rush out and buy a franchise you should also ask yourself some very fundamental questions:

  • How much of a team player are you?
  • Can you accept direction from others and play the role of follower to get your business rolling?
  • How do you feel about sharing your profits with someone who has not made a direct investment in your business?
  • Do you know what it takes to run your own business even under the protection of a franchise system?
  • How many hours are you willing to devote to the business, and are you willing to pay the price by sacrificing lifestyle for success?

The message is clear:  before you consider buying a franchise or starting any other business, you should first conduct a thorough self-analysis of your goals, aspirations, abilities (and weak points) and personality traits—good and bad.

Is the timing right?

Because of the protective nature of franchising with its intensive training programs, written standards, procedures and national name recognition, people who otherwise would not have risked entering the business world have taken the leap and opened their own businesses, and done well.  However, is it still a good time to buy or should you stay employed a little longer? 

For many this is the start of a gruelling decision that usually takes weeks if not months.  However, if you have been considering a business of your own, buying a franchise now can make a lot of sense. OK, perhaps if you were planning to buy into an expensive full-service restaurant worth millions and your budget is tight; it would definitely pay you to work through the numbers again.  Let’s assume you are looking at something a little more realistic and within your budget; a business that in a few years can support your family and give you the independence you want.

The biggest hurdle may well be funds, as banks have definitely tightened up their lending policies, but even here there is a silver lining. Firstly, nobody is going to trust their hard earned money to a fund manager for a while. Also fixed deposits are not going to be interesting for quite a while either, but there are plenty of people around who will be willing to invest in something as tangible as a business run by somebody with a gritty determination to succeed. Also, there are quite a few people walking around wondering what to do with their redundancy packages. So, just because the financial industry turns out to have been built upon a house of cards, doesn’t mean you won’t be able to get the money you need. 

The present economic climate does mean that you ought to be able to negotiate much better leasing arrangements, lower rents, lower payrolls, lower capital equipment costs and now fuel prices are crashing through the floor. Looking for talented people? There are more around now than there have been for many years and you can bet they are hungry for success. Also, try negotiating a better deal with your franchisor. Can they reduce the fees? Can they help with financing?

There have been many businesses which started up during tough economic times. It has been done many times before and it can be done again during this crisis. What about reduced business activity? Don’t worry... services will continue at about the same pace, fast food businesses may see an increase and the remainder may well have a quieter time than they would like, but this is a good time to settle into your new business, iron out the wrinkles and position yourself for when the good times return!

So, in the end, franchising is not like buying a job at all.  When you buy a franchise you are purchasing the rights for the use of a business model and brand name for the duration of the contract. That is nothing close to buying a job. It is more similar to leasing a business vehicle than anything else. You have the right to use the vehicle or business model for the term of the franchise agreement.


There are many good reasons for buying into a franchise operation; however like all businesses it will take motivation, hard work and perseverance! Nothing good comes easily, so be prepared to give it your all. The starting point for finding the right franchise is not in any book, nor is it a secret formula.  It is so obvious that many would-be franchisees overlook it entirely.  It is you. 

Just as with other aspects of your life, finding the right franchise starts with your interests, background, education and experience.  For example, many franchise systems require direct owner involvement in the operation of the business.  What kind of business appeals to you? 

Your chances of success are greater being part of a franchise; however make sure you do your homework first before you sign on the dotted line!

Kevin Bugeja, Managing Director
Franchise Selection
Suite 201, Level 2, 566 St Kilda Road
Melbourne, VIC 3004
PH: 1300 FRANCHISE (372 624)
Mobile: 0412 511 630