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Involving your family members in your franchise business can be a win-win, especially on the employee front. However, it's important for you to carefully consider family involvement. Because things could get complicated.
In this post, I’m going to help you figure out if owning a franchise business that includes family members could make sense for you.
Franchise Businesses as Family Businesses
Franchise businesses can be a good option for family businesses.
Why? Because they offer the opportunity for families to own and operate their own business, while also benefiting from the proven systems, support, and resources franchise companies provide.
However, it's important for you and your family to carefully consider the pros and cons of owning and operating a franchise as a family business.
Pros of a Family Franchise Business
One of the main advantages of starting a family business through franchising is it supplies a built-in business model. Having a model to follow can be especially helpful for families with little or no business experience.
The second advantage is the always included thorough training that franchisors provide to their franchisees. And great training helps you set yourself up for success.
The third advantage of owning and operating a franchise business with your family is branding. Opening a business in your local area that already has name brand recognition can help ensure a strong grand opening, and with it momentum. Having good momentum early on generates revenue, quickly.
Another advantage is you’ll be provided with specific local marketing techniques that have been proven to work. That means you won’t have to waste a lot of money experimenting with marketing and advertising that doesn’t.
Finally, with employees difficult to find these days, having one or two family members involved in the business can come in handy when employees call off. Additionally, in a perfect world, the chances of employee theft decreases.
Disadvantages of Owning a Family Franchise Business
Starting and growing a business can be a demanding and time-consuming process. That’s why it's important for families to be prepared for the dedication and hard work that is required for success. Especially at the beginning.
That’s why, as you investigate franchise opportunities you can involve your family with, it’s important to learn about some of the potential downsides. Here are a few.
For one, if you end up buying a franchise your family will be a part of, one of the things you’ll need to keep top of mind is family dynamics. For example, if you designate one family member as the manager, another family member may feel slighted. “I’m better qualified to run a business. I should’ve been named manager!” Or, “Wait! You said I wouldn’t have to close every night.”
I can share more examples of what you may hear as the owner, but you get the gist. And it doesn’t just happen in “family” businesses.
Hence, when word gets around to you that someone in your family is angry about not being picked, or is asked to take on extra work, it will be up to you to diffuse the situation.
Related to the examples above are situations where one family member isn’t pulling his or her weight, and others in the family notice it and get increasingly annoyed. When that happens, infighting ensues. If not corrected, things can spillover to where your customers...who are the bread and butter of your business, start feeling it. That’s never good for business.
In addition to family dynamics being at play, you’ll need to think through the financial risks associated with starting a business.
For instance, what if your franchise isn’t bringing in enough revenue to support every family member you’ve employed? Are you going to have to fire your nephew?
The good news is if you create a comprehensive business plan that includes projections based on several possible scenarios, you’ll get a handle on exactly how many employees you’ll need upfront and as your business grows. It’s headache avoidance at its best.
Should You Involve Your Family in Your Franchise?
Overall, a franchise can be a good option for families looking to start a business together, but it's important to carefully consider the pros and cons before deciding.
In addition, you’ll need to do good due diligence on the franchise opportunities you’re interested in. And since you’ll be involving family members, you need to ask for their input too.
Finally, if you do enough things right up front, you’ll have a much better chance of setting yourself and your family up for success as a family owned and operated franchise business.
The Franchise King®, Joel Libava, is a top franchise expert. He’s written over 2,000 different articles on franchise ownership and personally consults with people who are looking to buy a profitable franchise. Go here to find out how The Franchise King® can help you become your own boss.