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Mar, 01 2008

Inexperience an obstacle?

I am a fresh MBA graduate. Is it possible for me to start a franchised business or will my inexperience be an obstacle in becoming a successful franchisee?

Your inexperience may not be as big a hurdle as you imagine because the core of a franchised business is that the franchisor gives you the brand name, training, systems and strategies and continuous support. On your part, you promise your dedication to the business at local level, time and money commitment.
Your enthusiasm to do business would certainly make up for your inexperience in many areas where your franchisor would shorten your learning curve. The bigger challenge you may face is in acquiring a franchise because good franchise companies do not sell franchisees, they select franchisees. However, if the franchisor feels you have entrepreneurial attributes and is convinced that you are a serious candidate, have done your research well, have money and good track record he may take you. On your part, do not get carried away by an over-friendly franchisor who may be trying to sell you his franchise system which may not be very promising. It would be better if you have a franchise sophisticate by your side who could either be a franchise consultant or lawyer.
And as a new entrant, try to maximise your knowledge on franchising by reading books on franchising or attending franchise fairs, conferences etc.

Taking a decision
I am keen on buying a franchise, but talking to existing franchisees I found that 80 per cent of them were satisfied and 20 per cent were not. How should I assess the views of the 20 per cent in taking my final decision?
Shamsher Mohammed, Bairely

While you should not take the view of this 20 per cent lightly, in every franchise system there are some franchisees who are bound to be unhappy. Even established companies like McDonalds or Subway would second it. If possible you should talk to people who have left the franchise business and try to figure out why. Again re-check at the franchisor`s end if the problem areas have been fixed. The key is not to accept or reject a franchise system outrightly but to dig out reasons for their success/failure. If franchisees are unhappy because the franchisor is high-handed and would not let them have their own way, then the franchisor is good because he is protecting the brand. However, if the franchisor does not provide field service or live up to the terms defined in the franchise agreement, then it is a cause of concern and would make sense to cross check.

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