by Simon Lord

last updated 20/06/2024

Why I Wish I'd Bought A Franchise

by Simon Lord

last updated 20/06/2024

Simon Lord shares lessons learned from over 30 years of owning an independent small business

At the end of last year, my wife Lorraine and I sold Franchise New Zealand media – a business which we had founded, grown and loved for over 30 years. It was never a large enterprise, but it was successful and profitable, it won national business awards and built an international reputation, and we like to think that it has made a big contribution to the understanding and growth of franchising in this country.

And yet, as we step back, there’s a part of me that is reminded of the many times when I’ve said to myself, ‘I wish I’d bought a franchise!’

That might sound weird. After all, when we began, we were in the best possible place to start our own business. We both had a lot of franchising and management experience, and we had support from key players in the sector who wanted us to succeed. We weren’t even starting from scratch – I had edited the first few issues of the magazine before we bought it. To top it all, Lorraine had spent years developing systems, training and supporting other people to run franchised businesses.

And yet it was still hard. Very hard.

Making the decision

At the time the opportunity to buy Franchise New Zealand came up, we had a 20 month-old son and a new-born daughter. The original publisher was about to collapse and I was going to be made redundant. We had been in New Zealand less than three years. Starting a business was a risky decision and we had to take out a sizeable mortgage to fund it. Although some elements were in place, there was no-one to show us what to do. We had to work out for ourselves how to run a whole independent business.

How different it would have been if we had bought a franchise. We’d have had a franchisor to explain things to us; indicative figures from other franchisees to look at and help set expectations and make bank funding easier to obtain; and specialists and field managers who knew about precisely this business to advise us. Instead, we were going in blind – and we were acutely aware of the risks, having heard all about the high failure rates of independent small businesses. From our UK experience, we knew that good franchises had much higher survival rates.

Getting set up

Ours would be a home-based business, and we had to set it up from scratch. This was 1992, and we didn’t own a computer, or have a business line, let alone a mobile phone. Thanks to an incompetent British removal company, we didn’t even have a desk, although we did have legs for one. We compromised by attaching them to an old door. We had to work out, source and acquire everything from scratch – as cheaply as possible.

Compare that to buying a franchise. Not only will you get a list of the equipment you need, but you’ll often get specific makes and models and, in some cases, training from the supplier. If you need premises, there will be help with site selection, lease negotiation, signage and fit-out. The same applies to vehicles, lawnmowers, coffee machines … whatever you need, the franchisor will have worked out the right tool for the job, and usually have negotiated a discount, too.

Then there’s technology and a whole raft of software for everything from accounts to email to social media marketing. Setting all these up (and having to deal with the often uncontactable organisations behind them) takes an age. And if you need finance, equipment leases and working capital, that’s more complexity. Having a franchise team to help saves a lot of time and trouble during the inevitably stressful period when you’re setting up your business. They will help get you on the right track – and then keep you there.

Getting started

Having all the right equipment and software in place is one thing – learning to run your new business with it is another. I had been in marketing and franchising for years, but I had never sold advertising in my life and now that was going to be how I provided for my family. Whatever happened was going to be up to us and only us. It was exciting, but it was also terrifying.

Would it have been less terrifying if we’d bought a franchise? Possibly not, but we’d have had someone to hold our hand through the whole process and tell us that everyone went through this stage.

We’d have had someone training us in all the little everyday tasks and the big decisions that would make a difference. We would have had manuals to refer to every time we forgot how to do something, or needed to do something for the first time. There would have been systems in place, systems that had already been used by other franchisees who had gone through exactly what we were going through now. And other people – franchisees as well as the franchise team – to talk to, share our feelings with, and reassure us. As independent business owners, we were on our own.

The value of support

In the early days, excitement and adrenaline carried us through. We enjoyed tremendous goodwill from New Zealand’s young franchise sector, and gave back as we met others trying to grow. The feeling of running our business gave us huge energy and enabled us to survive the long days and the short nights. While Lorraine loved being a stay-at-home mum, she also enjoyed working a couple of days a week as we grew. But, after two years of this, I was exhausted and burned out.

The biggest mistake I made was not seeing that we needed help and not believing that we could afford to employ someone. If we had bought a franchise, I suspect that we would have taken someone on from day one – or, at least, after the first year. A franchise field manager would have seen our struggles and guided us. They would also have known which of the many tasks we were doing could most easily be handed over to someone new. There would have been documented systems, and help with employment processes, payroll systems and compliance procedures (even more complex today than it was back then).

As it was, we had to discover or work out all these things for ourselves ...

This article appears in full in Franchise New Zealand magazine (Year 33 Issue 2). You can read the whole article for free in the digital magazine here or request a free print copy here.

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