I donít like franchises After 20 years in business, I donít like franchises. Donít get me wrong. I often like the food, and occasionally I will buy a car from a franchise, or a house. But, as an entrepreneur, I donít like the concept. Allow me to explain.

As a business owner, I want total control over every aspect of my business. And especially, I want control over the brand that I create, and the sale of that business as part of my exit strategy. [Your exit strategy is the plan you have for when you want to retire, emigrate, change direction, get married, have kids, die, etcÖ]

I understand all the benefits of a ëtrueí franchise, but looking through one of the many business success magazines recently, I noticed that a whole bunch of the

ëfranchisesí offered are not franchises at all. In fact, you  are being encouraged to invest up to R200,000 to buy the rights to sell web advertising for your region.

Let us work with this for a moment. Imagine that you have 15 people lined up to purchase new cars. [You have, for example, just bought a funky yellow Citroen

C2, and you have persuaded all the members of your rugby team that this is the ideal way to find girls. The other 14 guys like the idea ñ and the car is big enough to accommodate any one of them ñ and even the aged coach thinks he might get lucky, so he is also game.]

You approach your local dealer with these 15 sales prospects. And he says ìWe donít want these prospects unless you give us R100,000 to buy a ëfranchiseí to allow you to bring us these prospects.î Honestly, if I brought you 15 guaranteed sales ñ would you tell me to go elsewhere? I think not!

In my experience in sales ñ spanning the past 20 years ñ I have never seen that happen. The one thing that every business cannot get enough of is sales ñ and 99.999% of us would jump at this opportunity. And we would be really comfortable paying you for this opportunity.

So what are you paying such a ëfranchisorí for? If you are one of the 500 readers of this weekly email who have already invested in Cory Rudlís excellent course ñ Insider Secrets to Marketing your Business on the Internet, or his great DVD series ñ click here ñ then you will understand all about ëaffiliateí fees. In essence, what these magnificent franchise opportunities are ñ is nothing more than a scam to get you to pay in advance to join an affiliate scheme. Most legit businesses will happily let you join for free, because they know that they only have to pay you for actual sales.

They will talk up a storm about the exceptional training you will receive. Frankly, if you want solid sales training, aim for a store that sells something you want to be involved in. [Find one far enough away that they wonít be threatened by your plans to open up next door sometime soon.] Then ask if you can work for free ñ and get a small commission on sales you bring in. The training will be hard but free, and real life. Contrast that with spending R200,000 for a week of training.

As a business owner I want a completely unrestricted right to sell my business. Most franchise arrangements do not allow that. I also want the right to be able to destroy my brand myself ñ not to have the shoddy operator down the road destroy ëmyí brand.

This copy of Petes Weekly is courtesy of a wonderful community of small business owners - all Business Warriors. Their support of me allows  me to write and distribute this article. Please support them at www.businesswarriors.co.za

In the past 5 years I have met very, very few happy franchisees. And both of them were Wimpy franchisees. And I have met dozens of unhappy franchisees, and guided many of those through the desperate pain of business closure and the loss of everything they owned. A franchise, like any other business opportunity, needs deep, critical analysis before you leap in where angels donít want to go.

Just because you think you know nothing about business, ask as many questions as you can. And if any of the answers donít completely make you happy, run away. And if you ëfeelí that something is not right ñ no matter how small ñ run away. Do not ignore the feelings. I have lost count of the folk who did not say NO ñ because they didnít feel they had a good reason to say NO. You do not have to explain why you want out ñ you simply need to say ëI am not comfortable.í We donít say that enough.

In closing, I remain stunned at the number of folk who will not pay for a rudimentary education in business matters, but will blithely trust a ëfranchiseí salesperson as being an expert in the field. There arenít any experts. Weíre all flying by the seat of our pants, and making it up as we go along. But at least some of us carry parachutes...

September 15th, 2004

- Umhlanga Rocks.