One of the primary reasons why people consider franchise ownership is because they want to restore more freedom in their daily lives. Rather than going to work when their boss tells them to, they want to be the boss—and they want to decide how and when things should be done. But how much freedom can you really expect as a franchisee? New York franchise lawyer Jeffrey M. Goldstein explains.
The Fallacy of Freedom as a Franchisee
Owning a franchise is hard work. In fact, as a franchise owner, there is a good chance that you will work more (and perhaps much more) than you work as an employee. You will be personally responsible for your franchise’s success—and for recouping your substantial investment—and you will need to be prepared to play whatever role you need to play on a day-to-day basis. One day, you might be sitting down with your accountant to review your franchise’s books and records, and the next, you might be cleaning toilets because one of your employees called in sick.
In this way, being a franchisee doesn’t offer much freedom at all. As a franchisee, you are beholden to your franchise—not only because you need to be able to pay your bills, but also because failing to succeed could lead to termination of your franchise rights. So, rather than “freedom,” it might be better to think about franchise ownership in terms of “independence.” Although, as discussed below, your independence as a franchisee is limited as well.
What It’s Really Like Owning a Franchise
With this in mind, what is it really like to own a franchise? To be clear, as a franchisee you are your own boss, and you are responsible for your own success. You will own your own business, and you will be in charge of running your business on a day-to-day basis.
But, you will still need to comply with the terms of your franchise agreement.
While many franchisors promise prospective franchisees support without interference, more often than not, the opposite proves to be true. We regularly speak with franchisees who say they were taken aback by how little support they received once they signed their franchise agreement—and how much their franchisors are interfering with their ability to run a successful business
For franchisors, standardization is vital to their operations. It’s how they build recognizable brands, and it’s how they maintain control over their franchise systems.
As a result, while you will be a business owner who is responsible for your own success, you will need to be able to find a way to succeed within the confines of the franchise system. For many people, this is precisely why they are considering a franchise instead of starting a truly independent business—they want the structure and brand recognition that comes with owning a franchise, and they are willing to put up with all that this entails. But, if you are looking for true freedom and independence, then the reality is that owning a franchise might not be right for you.
When Should You Consider Franchise Ownership?
Taking all of this into account, when should you consider franchise ownership? There are lots of franchises out there, so clearly the model works for lots of people. In our experience, you may be a good candidate for franchise ownership if:
- You Have a Clear Understanding of the Franchisor-Franchisee Relationship – First and foremost, it is important to make sure you have a clear understanding of the franchisor-franchisee relationship. As a franchisee, you are there to support the franchisor’s growth (not the other way around), and your franchisor will have substantial leverage to enforce compliance with its system standards. Good franchisors will help their franchisees build system-compliant businesses, but this doesn’t necessarily mean that they will help their franchisees if they are struggling to achieve profitability.
- You Are Willing to Operate Within the Confines of a Franchise System – This point cannot be stressed enough. As a franchisee, you must be willing to operate within the confines of the franchisor’s system. Even if you think you have a better way of doing business, if your way conflicts with the franchisor’s system standards, doing what you think is best could put you in breach of your franchise agreement.
- You Are Prepared to Be Responsible for Your Business’s Success – Despite being beholden to the franchisor’s system standards, you will ultimately be responsible for your business’s success. As a franchisee, you must be prepared to do what it takes to maintain compliance—while working to build a profitable business in the process. This is true whether it means working on your franchise or working in it.
- You Have the Financial Resources to Give Your Franchise Time to Grow – No matter how much support you receive from your franchisor and no matter how much goodwill the franchisor’s brand has in your area, your franchise will need time to grow. As it grows, you will need to manage not only your franchise’s finances but your personal finances as well. With this in mind, it is important to make sure you have the financial resources you need to cover your expenses without relying on any personal income from your franchise for an extended period of time.
- You Value the Benefits of Franchise Ownership Over the Benefits of Starting an Independent Business – Finally, buying a franchise in New York might make sense if you value the benefits of franchise ownership over the benefits of starting an independent business. If you are willing to put up with the lack of freedom and independence in exchange for having access to the franchisor’s brand and system, then franchise ownership could be the right choice for you.
Questions? Contact Us for a Free Consultation with New York Franchise Lawyer Jeffrey M. Goldstein
Do you have questions about buying a franchise in New York? If so, we invite you to get in touch. To schedule a free initial consultation with New York franchise lawyer Jeffrey M. Goldstein, please call 202-293-3947 or request an appointment online today.
