Losing your job when you have a family to support can make you feel down, dejected, and downright depressed. But for 45-year-old Maurice Geyen, the setback was the motivation he needed to muster his courage to try franchising. â€śI knew I still wanted to be in business,â€ť recalls Geyen, who was a business manager before he was laid off in 2008. â€śBut I wasnâ€™t prepared to start all over in corporate America.â€ť
Today, after setting up a corporation with some of his retirement account and investing nearly $200,000 of those funds in a franchise endeavor, Geyen and his wife, Kiesha, 39, are entering their third year as owners of a BrightStar franchise (one of black enterpriseâ€™s 40 Best Franchises for African Americans). Their Inglewood, California-based homecare, childcare, and medical staffing services franchise generated about $500,000 in revenues in 2010, and the couple expects revenues to double in 2011.
Now may be a good time to venture into franchising. According to a report PricewaterhouseCoopers prepared for the International Franchise Association, the industry expects growth in 2011 of 2.5%, or about 19,000 new establishments. This is compared to only 0.3% growth seen between 2009 and 2010. Business lines such as lodging, automotive, retail products and services, as well as personal services, which include healthcare, appear to be the sources of the growth, the report notes. Also, the Minority Business Development Agency reports minority firms are more likely to operate franchises than non-minority business enterprises.
While the Geyens are doing well in the franchise business, success is never guaranteed. Money is at stake and risks are involved, but careful calculation, research, and preparedness can help ensure a positive outcome. Here are a few things you want to keep in mind before making a commitment to a franchisor.
Entrepreneurs need not apply?
If youâ€™re going into franchising because you want to be an entrepreneur, you might want to think again. â€śSome true entrepreneurs make lousy franchisees,â€ť says Burton D. Cohen, founder of Delray Beach, Florida-based franchise consulting firm Burton D. Cohen and Associates L.L.C., and professor of strategic franchising at Northwestern Universityâ€™s Kellogg School of Management. The concept of franchising is based on consistency, notes Cohen, and franchises