Chapter 14
Selecting the Right Franchise
In business for yourself, not by yourself.
—Ray Kroc, founder of the first McDonald's franchise
Starting a business from scratch is akin to baking bread from scratch. It takes trial and error, as well as several bad batches, before you figure out what works. On the other hand, starting out by buying a franchise is like getting a good recipe right from the start. Because the franchisor has already baked some bad loaves and has learned how to avoid repeating those mistakes, because the trial-and-error stage has already been handled by someone else, and because you will be buying, among other things, that expertise and wisdom, purchasing a franchise reduces the risk inherent in entrepreneurship. There is less chance that you will burn your bread and a greater chance to make some dough when you buy a franchise.
Franchise Basics
There are both pros and cons to buying a franchise. Let's consider each.
Franchise Terminology
The franchisor is the company offering its name and business system to the buyer, or franchisee. The business that the franchisee buys is called the franchise.
Pros
Maybe the best part of buying a franchise is that you are buying into a proven system. Here is how it is supposed to work: Say that somewhere, some business owners created a successful business that they believed could be duplicated—that is, the reasons and methods for their success could be systematized and taught. So the business owners reduced their success ...
