June 1, 2003
Q: I am interested in opening a janitorial company part time while working full time. Would you recommend opening a franchise or starting on my own? I thought about the franchise but was scared I would owe them forever.
C. Yerby, Via the Internet
A: For entrepreneurs, starting a franchise means making compromises. You benefit from an infrastructure that’s already in place (such as a distribution network and suppliers), as well as brand recognition, training programs, advertising, and marketing. Sometimes a franchisor will even help with your financing.
But as clearly mapped out as the franchise route may be, keep in mind that there are some concessions you would have to make if taking this route to entrepreneurship. Depending on your personality, you might not like giving up control of how you run the business, which the franchisor determines. You will also pay royalties to the franchisor. And depending on the franchise agreement, selling the franchise, if you so choose, can be difficult since the franchisor has to approve the buyer. So while being part of a franchising network can increase your odds of having a successful business, it’s not without trade-offs.
Don’t forget to obtain a copy of the franchisor’s disclosure document (also called a Uniform Franchise Offering Circular) and get a copy of the Federal Trade Commission’s Consumer Guide to Buying a Franchise. The guide, which offers lots of advice on how to choose the right franchise, is available at the FTC’s Website: www .ftc.gov/bcp/conline/pubs/invest/buyfran.htm. You can also find some franchising resources at blackenterprise.com.