Franchisees As Risk Takers? Think Again.

Years ago when I interviewed franchisees for Franchising: The Inside Story (published so long ago, I’m embarrassed to say, that it’s out of print!) I always asked them how they felt about taking risks. At the time, I thought franchisees were entrepreneurs and that entrepreneurs were risk takers.

But I got an education!

Franchisees may be (and they may think of themselves as) entrepreneurs, but they do not see themselves as risk takers.

That’s why they buy franchises!

The risk taker is the man or woman who puts everything on the line with little or no assurance of a safety net. It’s do or die!

“Isn’t that true for franchisees, too?” you may be asking.

To a degree, yes. But it doesn’t have to be, and for most it’s not the case. Most franchisees do not put it all on the line with little or no assurance of a safety net.

“I am a calculated risk taker,” one prominent franchisee told me. “You can’t be in business without taking some risk, it’s just the nature of business ownership. However, you don’t have to be stupid about it, either. Or throw caution to the wind. You’ve got to realize that there’s a downside to any business opportunity. So you invest cautiously. You do your homework, and franchising gives you that opportunity. You look around the corner, you think through the pros and cons, and you spend time talking to others who already own a franchise. You can’t always do that when you’re starting a business that isn’t franchised. . . . So, no, I’m not a risk taker. But I do take calculated risks as a franchisee.”

Makes sense to me and perhaps it does to you, too. Let me know what you think.

Meanwhile, here’s a different take on risk taking. The real risk takers today are the people with jobs! They never know when the boss will show up and say, “This is your last day as an employee” and show them the door. Happens every day, doesn’t it? And those folks, who are already out on a limb because they rely on that paycheck, feel the fall when it occurs.

In times like this, we’re thankful to be entrepreneurial and most grateful for franchising!

. . . Here’s something I just discovered. It may be out of print, but Franchising: The Inside Story is being sold among the used books on Amazon.com. You can get a copy for less than $2! However, you should be aware that while much of the info is as good today as it was in the early 80s when I wrote it, much of it is also out-of-date!

Categorised in: Buy a Franchise, Franchisee, Franchises

This post was written by Dr. John Hayes