There’s a provocative post on one of StartupNation.com’s blogs. The title is, “Out of Work? Consider Buying a Franchise.” The writer cites the downfall of Wachovia Bank and addresses the 5,000+ workers in Charlotte, NC, who have already lost their jobs.
The author writes, “When the unemployment rate is high and large corporations are downsizing, buying a franchise is typically a good alternative for someone with the entrepreneurial itch.”
Nooooooooooooooooooooooooooooooooooo!
Buying a franchise isn’t good for an itch. In fact, franchising can make you want to scratch that itch until you have a huge rash. An infection. Gangrene. Amputation! You get the point.
When you get laid off (and I know whereof I speak, I was there once seven years ago courtesy of Ziff Davis Media), you may not be in the best psychological frame of mind. Your confidence is shaken, your routine disrupted. You’re disoriented. To distract yourself, you start Googling and clicking and, before you know it, you’re a franchisee. You’re still hurting from what happened in your job as you embark on something that will test your limits as nothing has before.
You are not running toward something as much as running away from something. And it’s just a matter of time before you can’t run fast enough or far enough to get away from yourself.
If you find yourself laid off from a financial services job or any corporate job amidst the economic chaos that is unfolding, and you are fortunate enough to have enough cash in the bank to even think of buying a franchise, my advice is to wait a while. Consider taking a few months to do some things completely unrelated to work. Travel, spend time with your family, read–whatever pleases you. Even if you’re a “Type A” with a short attention span, resist the urge to jump too fast into something else. You may not be the franchise or entrepreneur type, and if the itch goes away by itself, that’s a lot better than spending your nest egg on a dubious prescription.
Have experience with buying a franchise before you were ready? Or one that totally contradicts my point of view? Let me know.
October 8, 2008 at 6:56 pm
Mitch,
You are absolutely spot-on in this post (in fact, it sounds like you were describing me). The long and short of it is: it was much easier to get into (up until recently) than it is to get out of.
October 9, 2008 at 9:43 am
It happens to so many people Bob. I am actually a big believer in franchises, under the right conditions and for the right people. Unfortunately what happens a lot is that smaller, less experienced entrepreneurs buy in to a single unit of whatever franchise, then go through a long period of suffering, then get bought out for pennies on the dollar buy a larger multi-unit franchise from the same or another system.
October 9, 2008 at 8:05 pm
mitch:
going into the franchise marketplace without the advise of a good franchise consultant, franchise attorney and accountant is unwise. would you buy a house without an inspector, title insurance and the advise of an attorney?
October 10, 2008 at 6:05 pm
Mitch,
All good points. And then the current economic realities….
Step up, step right up. Buy a proven franchise and find financial security… Until a troubled economy washes up on the shores, cash dries up, the franchisor becomes unstale and you are left without support or supply line. Not a position you wish to find yourself in after investing in your future. While you take Mitch’s recommendation and wait it out, you will also find the time to evaluate how the franchisor fares in difficult times.