A key question facing prospective franchisees is which is better for them: A job or a franchise. It’s a difficult decision because there are pros and cons to each option.
The pro job camp
The greatest advantage of a job is the perception of lower risk. The assumption is that a job guarantees a good income in exchange for a well-defined work effort, with little risk of losing the job unless the employee decides to quit. Most people are naturally attracted to the promise of economic safety.
But times have changed and these assumptions need to be re-evaluated.
If the compensation and benefits are lowered significantly, or if the continuation of the position is in doubt, the safety normally associated with choosing the job option is considerably lessened.
In this market, many people are coming to believe that what they once viewed as the safe option is in fact little more than an illusion.
The pro franchise camp
The advantages of a franchise, on the other hand, have always been threefold.
First, it is assumed that the business will produce a significant income, though the owner will typically have to work very hard building the business before this income becomes a reality.
Second, the business will create wealth through excess cash flow, and this wealth can be realised someday through the sale of the business. Third, there are significant tax advantages available to business owners that are not available to regular employees.
Once again, changing times mean these assumptions may no longer be so reliable. Many businesses are struggling and even failing in today’s market. Some franchises that were considered safe investments prior to the 2008 recession have now become high risk ventures.
Though the advantages of franchise ownership can still hold true in today’s market, a prospective franchisee needs to be far more careful in selecting the right opportunity.
The adage that an ounce of prevention is worth a pound of cure applies more than ever when it comes to investigating and choosing a franchise. Verify all your assumptions and make sure you determine exactly how the business has done during hard times. Taking the time to do this right can pay huge dividends to a new franchisee.
For a person who uses this level of care in the investigation process, the safer and more secure course may be a franchise business rather than a job. The reality of chronic under-employment has become the game changer for many who are evaluating their plans for the future – and encouraging more of them to take their own shot at a prosperous and secure future.