How to Buy a Franchise with an Entrepreneurial Mindset
One of the main reasons people pursue entrepreneurship is to be their own boss. The question is, how can they make that happen? Most aspiring entrepreneurs decide to start their own business. Eventually, they come to a fork in the road.
Are they an “entrepreneur” or just a business owner?
Everyone has their own definitions, but most agree that an entrepreneur has a big idea. They may not end up running the business. Often, they build it up and sell it.
A business owner may inherit or purchase the company from someone else. They approach the enterprise as something to grow or improve rather than build from scratch.
This difference is especially noticeable when you end up working in your business rather than on it.
Your entrepreneurial path is unique. However, you don’t always need to start from scratch to wear that entrepreneur badge. And you can be a business owner without sacrificing all your waking hours to it.
Franchising is a great middle ground. It’s how I got my start, and it shaped the way I pursue my enterprises today.
The good news is that you can still enjoy that entrepreneurial freedom with franchise ownership.
Here’s how you can pursue entrepreneurship as a franchise owner — and enjoy that freedom.
Create Your Freedom
“Being your own boss” can lead you straight to burnout if you’re not careful. Business ownership seems like freedom until you end up working long hours to keep it afloat. As the joke goes, “I quit my 9-5 to start my own business. Now I work 24/7.”
Whether you’re starting from scratch or buying a franchise, the same core principles apply. You need the 5 Ps of entrepreneurial freedom:
Promise: your core values and what you promise your customers/clients
Profit: the difference between your revenue and your expenses
People: the employees, contractors, stakeholders, investors, and of course, the customers/clients
Process: your operating procedures, sales pipeline, etc.
Product: what you sell, whether a physical product, services, or both
The main difference between classic entrepreneurship and franchise ownership is that in the latter, the last two Ps have (usually) been ironed out for you.
When evaluating a franchise opportunity, decide whether it suits the Promise you want to make. Consider what you’ll need for your People: how many to hire and manage, who you want to work with, etc.
To Know Your Promise, Know Your Why
When you’re developing a brand from scratch, you’ll often answer the question “Why?”
But you should ask yourself those questions when considering any enterprise, including a franchise opportunity. Consider how franchising would support your values and goals.
Entrepreneurship in the classic sense is not for everyone. That’s just a fact. Perhaps you’d rather not go through the (honestly stressful) ideation process. Or you’d like to build upon an existing idea in a proven market.
Franchising could be a great way to “be your own boss” in those situations.
However, franchising comes with its own challenges. Depending on the brand and industry, you could be in for long hours. You may need a strong financial or accounting background.
The key is to know your “why.” Decide what’s most important to you in business ownership. How could you apply your unique skills to a franchise opportunity? What values do you want to carry into your enterprise?
Choose the Right People
No matter which type of business you own, your people are critical to your success. You can buy a franchise with a plug-and-play brand kit, product, etc. But you will always need to build a team that aligns with your vision. After all, your products or services won’t sell themselves!
Running a franchise often requires more people than a typical startup. Depending on your industry, you could start a business with your “Big Idea,” then do it all yourself until it’s time to sell or expand.
In franchises, that’s usually not an option. You need employees to keep things chugging along. You may even inherit a team that you must learn to manage and optimize.
Because their business stems from their Big Idea, entrepreneurs often struggle to let go of the DIY mindset. Eventually, they bring the right people on board so they can delegate tasks and share responsibility. This works best when they keep their Promise in mind.
As a franchise owner, you may be a step ahead if you already have people. Or, you simply don’t have a chance to put off hiring. Franchises typically aren’t “DIY.”
Even so, you should align your people with your Promise, which reflects your “Why” for purchasing the franchise.
The 5 Ps work in harmony. Your Promise shapes your Process, which creates your Product, which leads to Profit. The right people make all of that possible.
To be an entrepreneur, franchise owner, or both, you must be a leader. Great leaders know how to form a team — and keep them motivated. They understand what makes their people tick and how to manage them without “bossing” them around.
So, when considering a franchise or hiring for one, let your core Promise guide you.
Just because your franchise didn’t come from your “Big Idea” doesn’t mean creativity is off the table. There’s plenty of room for innovation, and that’s vital to your overall satisfaction as a business owner.
No matter how you came by your enterprise, overworking leaves you feeling resentful toward it. You end up working in your business rather than on it. That’s likely not what you wanted from “being your own boss.”
A creative approach takes you from “running your business” to “loving your business.”
Ask yourself these questions:
Even a “plug and play” franchise has opportunities to think outside the box. Get those creative juices flowing!
You can have an entrepreneurial mindset even without classic entrepreneurship. That creative spirit and passion for innovation help you turn a franchise opportunity into a meaningful investment. If you’re considering a franchise, keep the 5 Ps in mind — and enjoy the freedom of business ownership.
This article is inspired by an episode of the Simplifying Entrepreneurship podcast in which I interview franchise consultant Diane Pleuss.