Why does one person decide to purchase a franchise coffee shop versus opening their own independent shop? From my own experience as a franchise coffee shop owner (a.k.a. ‘franchisee’) and after having spoken with several other franchisees, the list looks something like this:
- It’s perceived to be safer (there’s no WAY fifty other owners could make a mistake!)
- It’s perceived to be easier (yay! I don’t have to think. I just just turn the key and it will run)
- the rest are all really just ‘etcs’ because it’s the first two points above where it all falls apart or comes together
Let me first start by debunking the idea that a coffee shop franchise is safer. It’s simply not true. Franchisor’s interests are not always the same as the individual franchisee’s. In order to keep a nice looking store at a prime downtown location open, for example, they may sign a bad deal on the franchisee’s behalf. Say what, Willis? Why would they do that? The benefit of having their brand (emphasis on ‘theirs’, not yours because you can’t take it with you) sitting there in the midst of heavy foot traffic may hinder their ability to notice that the sales in that shop don’t give the franchisee the ability to pay for the rent each month! I wish it were true that the franchisor truly looked out for the well being of all their franchisee’s but regrettably this is not the case. Anyone outside looking in could probably sympathize with both parties so for the purposes of this article, let’s just say that the goals of the franchisor can and do conflict oftentimes conflict with the goals of the franchisee (which is usually to make money).
On the topic of a coffee shop franchise being easier, allow me to completely shut that down. If it were so that the franchisee could bring a manager in and train them and let them run the business while he/she collects their paycheque while lying on the sunny beaches of Hawaii, that would indeed be attractive. In fact, that’s the mythical dream that is sold to the franchise buyer. The reality is, however, that some modern coffee shop franchisee agreements actually forbid the franchisee from leaving their business for set amounts of time! Did you read that correctly? If you did, this should finalize your decision about whether you proceed with a coffee shop franchise. Let me write it in a more simple way: Actually written in some franchisee agreements is a clause that states that you’re not allowed to leave your store in the hands of your manager, except in strict accordance with the franchisor’s rules. Ouch. Cancel the plain ticket to Hawaii, honey.
After having looked a little at these two franchising myths and hopefully debunking them, let me now state my position:
I believe that there is a way to create a win-win environment between a franchisor, franchisee, and the customers, as long as there is a healthy dialogue between them, and a lot of give and take, and the shared goal of seeing the franchisee make a lot of money.
Regrettably I am yet to encounter a franchise where all of those are present at the same time.
That said, there are articles published out there on the topic of the much needed FAC (Franchisee Advisory Council). The VCSFA is dedicated to helping member franchisees to set up their own FAC in complete privacy. Contact the VCSFA for more information.