AMY WILKINSON: Entrepreneurs often think buying into a franchise will be an entrepreneurial experience. Whether buying into sandwich company Quiznos or pizza delivery business Domino’s, however, running a franchise requires a high degree of conformity. A franchisee must follow direction from the home office on pricing, marketing and product specificity. Most franchise agreements give the franchiser power to change the product line or procedures at any time.
Often franchisees seek to be their own boss. They aim to control their own destiny by running their own company. Yet, by definition, these businesses replicate a proven model. Franchisees commit to the same mission as the parent company and agree to comply with the same rules. Not only do they wear the same uniform, they operate with the same processes. The ability to be inventive in many ways parallels the ability to be entrepreneurial inside a larger company. There are certain degrees of freedom, but franchisees take on a master.
The biggest mistake that an entrepreneur can make when considering a franchise is not doing enough homework beforehand. Misaligned expectations can create consternation. To decide if buying into a franchise might be right for you, ask yourself if you are comfortable striking out on your own to build a new brand, or if you would prefer to report to a home office in return for instrumental assets and a clear model.
One of the best ways to test if owning a franchise might be right for you is to work at one before buying in. Nothing beats firsthand experience. Before committing to years of monthly payments to the home office, take a job at Quiznos or Domino’s or a franchised gym or apparel shop to gather information and make a more informed decision.
Amy Wilkinson is a strategic adviser, entrepreneur and lecturer at the Stanford Graduate School of Business and a former White House fellow and special assistant to the U.S. Trade Representative.