Franchising

The phrase "a turnkey business" makes it sound as easy as jumping into your car, putting in the key and starting the engine. In fact, most franchises will deliver your franchise materials, give you some training and then you're largely on your own. There's a huge amount of work that you'll have to put in - early mornings, late nights and hard days to earn your way into successful business ownership.

But worse than this, if the franchise has not invested over a long period to develop great training, operational systems and marketing materials, you will find that it is more of a turkey than a turnkey. Imagine spending thousands for the right to trade under the name of the franchise, only to discover that there is no proven method of getting customers, or recruiting and training your staff?

It's fair to guess that probably only around 10-20% of franchises can honestly describe themselves with the phrase "turnkey business". The rest will live somewhere in the broad spectrum from good to terrible. In fact, some franchised businesses are so bad, they should be outlawed.

And just in case you think your professional advisors will help you avoid these bad outfits, be warned -- that's another myth. Most professional advisors including franchise associations, consultants, professional advisors like bank managers and so on, will all repeat the same old rubbish that a franchise is a turnkey business. They'll do this because they're making money from franchise sales.

To understand the truth behind this, let's just take a look at what a franchise really is, to take away some of the mystery so that you can understand it for yourself. Simply put, a franchisor simply writes what they do in their business every day as a set of procedures, normally called the Operational Manual. These procedures, when they're properly written by a decent franchise, are simple to follow instructions to build the business from nothing right up to a thriving enterprise. It should cover everything from selection of premises, how to lay out your business right through to getting customers and serving them effectively.

This sounds fantastic until you get a bad franchise where it just has not been worked out properly. Imagine how bad it would be to discover that the franchisor has an outgoing personality and a background in door to door sales if you're a reserved character yourself. Most people find it really tough to go selling door to door and so would crumble in this franchise. That's precisely when it becomes a turkey business for many of the franchisees.

This is exactly what is so demanding and challenging about the turnkey business idea -- you have to personally "turn the key" to make it work. And if turning that key for you is not possible because your personality is a mis-match, no matter how well the franchisor did, you will struggle to get a return on your investment and the whole franchising experience becomes a huge money pit that swallows your time, money and enthusiasm.

Don't dismay though -- there are great franchises available. You just need to make sure you ask the right questions to find one. The trick is to figure out what you are willing to do and look for franchises that fit that model and suit you properly. If you fail to do this, you could be in for a very rough ride indeed.

The Bottom Line...
Expect to work very hard to get your new business going, whether you buy a franchise or not, it's going to be tough! Look for a franchisor that will give you the kind of support you think you'll need, and be prepared to hammer out a personal support element to your agreement with the franchisor so you can get off to a flying start. Whatever you do -- don't rush into something that you will have many years, under contract, to regret.