Buy A Franchise To Learn What NOT To Do?

It probably shouldn’t be your #1 priority for buying a franchise, but buying one to learn what not to do in business isn’t a bad idea!

I had a favorite cousin who would have been better off buying a pizza franchise than starting her own pizza business. I said “had” because she’s now deceased, and part of her demise was due to the stress of trying to figure out how to operate her business successfully. Ultimately she lost her money, her marriage, and her life.

Do people want the best pizza?
The problem began when she baked a pizza and people told her how good it was. “This is the best pizza! You should be in the pizza business!” She heard that time after time after time. “This is better than any pizza on the market today.”

No doubt those statements were true, but what makes people think that consumers care about buying “the best” product? Do consumers really want “the best” pizza? “The best” cookies? “The best” hamburgers? “The best” food in general? Do consumers demand “the best” of any product or service? Consumers make buying decisions for many reasons, and “the best” isn’t usually one of them.

Even if consumers were to buy only “the best” there’s more to operating a business than providing a product or service. The most difficult task for most small business owners, including franchisees, is getting business — that is, creating buyers and customers, meeting their needs, and enticing them to return time and again.

A few questions to consider
My cousin discovered there was a lot she needed to know about operating her business. How many slices of pepperoni do you put on a large pizza and still keep it profitable and satisfying to the customer? How do you deliver pizza — or if you don’t deliver pizza, how many sales do you lose? What’s the cost to delivering pizza — do you need insurance for the drivers? And how do you figure out how many drivers you need and where to send them? How far can you travel to deliver a pizza and still earn a profit? Where do you advertise for customers? How often? What do you say in your ads to attract customers? . . . These are just a few of the questions that my cousin couldn’t answer. Neither could her friends who encouraged her to get into business.

When it came to making a great tasting pizza, no one could do that better than my cousin. When it came to making key decisions about the operation of her business, decisions that had nothing to do with pizza, no one could do that better than a pizza franchisor. With the right franchisor my cousin would have learned how to build a satisfying and profitable business, and she would have avoided everything not to do. Of course, she wouldn’t have been able to sell her pizza, and that’s probably what stopped her from considering a franchise, unfortunately.

Be careful if someone tells you that you make “the best” this or that and you should be in business . . . unless you know how to market it, sell it, and deliver it, you’re probably going to make too many costly mistakes simply because you don’t know what not to do. A good franchisor knows.

Watch these pages for updates about Buy “Hot” Franchises Without Getting Burned — soon to be an Amazon.com ebook.

Categorised in: business ideas, Business risks, Buy a Franchise, Case Study, franchise information

This post was written by Dr. John Hayes