The next time you roll your eyes at the construction of a new dry cleaners or a frozen yogurt chain, stop yourself. You might think a new 7-Eleven, Quiznos or AAMCO is just another example of corporate America replacing the “little guy” that is small business– but you’re wrong.
Franchises are small businesses, too. Most franchisees live local, buy local and hire local; they participate in American Express’ Small Business Saturday, too. Though their small business is part of a larger network that makes up their franchise, franchisees face most of the same obstacles as the mom-and-pop establishment down the street. They worry about hiring the right employees, payroll taxes, attracting more customers and being successful.
There’s an unfortunate disconnect between the public’s perception of franchising and what franchises really are and do. On the outside, franchises seem like just another corporation: they’re big and important with lots of clout in Washington and they’re replacing your favorite small town coffee shop with Starbucks.
While there’s some truth in that– Starbucks does seem to be everywhere these days– it’s missing some key grains of salt.
First of all, franchising is more Main Street than Wall Street. Behind the big marketing budgets (that only a handful of franchise opportunities possess) and corporate executives is an expansive network of hard-working franchisees. Many of these men and women have invested a significant chunk of their life savings in their franchise business; this isn’t a second stream of revenue or just a second career. For some, franchising is a chance to start over or, for others, a last chance at success.
The biggest difference between franchising and conventional small businesses is the level of support extended to both entities. Franchising comes with a promise of support; franchises don’t want their brand names tarnished. Then again, franchisees aren’t coddled. They’re expected to meet the expectations of their parent franchise, which includes royalties and other fees in some cases. Hand holding is not part of the franchising agreement and neither is a guarantee of success.
The IFA would do well to raise awareness about the similarities between traditional small businesses and franchises. Wall Street and corporate America has been repeatedly vilified in the media, though franchise and IFA public relations teams are definitely populating the newswires with positive stories. However, consumers made more aware of franchising’s Main Street attributes would be a smart move. It’s significantly easier to relate to a person in your community than a brand without a face.