As a franchise buyer we have a sense that the franchisor is a big company that we can rely upon. Sadly there are a great many small franchisors who just don't work this way. They may have run their own successful business and then tried to systematize it the best they can, but unfortunately only they can really run it profitably.
A proven system is something that you can follow, step by step, to hire staff, train them, run the day to day operations, manage stock levels, manage your finances, market your business to find new customers, and so on.
The trouble is, it's easy to recognise that many franchises are small outfits (for example, if they've only got a few outlets, or have only been in your country for a couple of years), but it's a lot tougher to figure out how well their systems work. How on earth can you check the quality of the system, to make sure it really works? And who was the system designed to work for and will you be able to get it to work effectively for you?
Let's take one example. Two brothers invested in a printing franchise and after a good start, wanted to win more customers. He owned a very popular franchise business that has franchisees internationally. Yet it turns out that the proven franchise system is to go knocking on business doors every day until Steve has the chance to quote on 10 pieces of print. That's it � the whole marketing depends on this old-fashioned hard-sales technique!
So there they were in 2006, with a an apparently "proven system" that didn't give any ideas, help or support to use direct mail, email, internet, Google, fax, leaflets, exhibitions, networking or any of the myriad other marketing methods to get business. And get the irony here � an established and respected printing franchise that didn't have printed marketing materials in its "proven system"!
Knocking on doors is how brushes got sold in the Great Depression. It's tough, takes a lot of time and does not scale if you want to get more business � employing good people to do this for you is expensive and difficult to manage.
This is a terrific example of a franchise system that's out of date and very highly labour intensive. Yes, it works. But it's not a smart long term way of doing business for the majority of people.
The Bottom Line
If the proven system works for just a small number of people, or with a very limited range of approaches, make sure that you are personally suited to doing that kind of work or you will be in for an expensive and uncomfortable shock.
The
Franchise Opportunity Guru is a website run by former franchisees to help people who want to buy a good franchise. You will find unbiased information about all kinds of franchise opportunities there, and some great information about choosing a good
franchise business consultant to help you negotiate the tricky selection, research and buying decisions involved in franchise ownership.
