Are semi-absentee run franchises actually possible?
Semi-absentee is a popular buzzword with franchise concepts. But how can you determine if it’s actually possible with the concept you’re considering? Read on.
Franchise explorers face an interesting predicament when considering whether or not to become a franchise owner. These people are successful in their professional careers, have amassed a certain net worth, and are now seeking to transition either from, or alongside, a career into business ownership. If everything goes to plan, this should allow them to augment or surpass their current income and realize certain quality-of-life goals.
The challenge is limiting the impact, in this transition, on their current lifestyle.
A New ‘Big Question’.
In our FD&D guide we introduced four ‘Big Questions’ franchise explorers are really trying to answer through the vetting process.
- Can I make money while limiting the disruption to the life I’ve built up to this point?”
- Can I make money in sufficient enough quantities to sustain, and grow, the life I’ve created?”
- If that’s possible, how long will it take before I reach profitability?”
- What will actually be required on my part to reach profitability?”
The NEW big question is:
“Can I keep my current income source while I build a business, so I don’t take a wrecking ball to the life I’ve built?”
The short answer is: “it is possible.” But it will depend on which concept you are considering and if it is setup to allow this to happen. Some systems actually strongly suggest you do just that, maintain your current income source until you have built your new operation to the point where it can sustain you. This is especially true in the case of a retail-based business during the real estate selection, build-out and initial hiring and training process. With other systems, however, you are all-in from day one.
It starts to get trickier when the business is actually open, operating and engaging customers, especially during the critical ramp-up period discussed earlier. The demands of an operating business are different than that of the ‘setting-up’ phase.
Strong Operational Systems are the Key.
What is in question here are mostly internal factors: the franchisee’s role and the nature of the franchisor’s operational systems. With well-defined operational systems, it is clear who is doing what, how what they are doing relates to what others are doing, what the objective is, when the output meets or does not meet these objectives, how the customers are handled, and how to maintain consistent quality in products and services. Simply put, if it is possible for you to open, ramp up and operate your franchise business to profitability while maintaining your current income, it will be because of the sophistication of the operational systems in place. This will include everything that goes into employee training, the system’s operational efficiency, and the strength and approach of the franchise’s leadership team.
A franchisor with sound systems should be able to talk you through exactly how the system works, why it is critical to the business, what the output should be, how it is evaluated, how output is measured, and who manages everything. A key area to investigate is the marketing and customer acquisition demands on the franchisee. Many franchise concepts require far more of your involvement for a longer period of time than you might anticipate. You should be able to find and talk to current franchisees who opened and ramped up their own franchise while holding down a full-time position, and you must rely on their experience for guidance. If you cannot readily find current franchisees who built profitability while keeping their day job, it may not be a realistic expectation with that franchise concept. No matter what is on the web site or discussed in the sales process.
Semi-Absentee Does Not Mean Semi-Committed!
There is a huge “but” here. We are talking semi-absentee with respect to your time, not your personal commitment to business success. No matter what time commitment you make, your personal commitment to business success must be 100%. There are many systems wherein semi-absentee or part-time ownership simply is not possible or not allowed, and there are also many systems claiming it is possible, yet it simply is not possible from a practical, real world standpoint. You must deeply probe a franchisor’s systems and all related functions to understand whether or not it is possible to open and ramp up around a full-time job, and consider what your own personal commitment will be to make this arrangement work.
Want to have a concept evaluated for semi-absentee operation?
Contact the CFT for a FREE concept evaluation!