In a highly competitive market, this location opened for a brief period of time as an
eatery for quick and tasty pasta meals. Not a lot of seating, but a good menu for patrons
wanting to grab a bite before shopping, seeing a movie, or on their way home. Yet, most
of that market was probably absorbed by the popular restaurant across the way.
Above image not represented of actual business in this article
As in so many instances, I could have bet on how long they would last.
But, What on earth could have happened?
In his famous and highly acclaimed books on “The E – Myth,” Michael Gerber describes
something he called the entrepreneurial seizure, when suddenly someone who has
been in the corporate world decides that they are going to go out on their own and start
a business. Though they may have business experience from within the business world as an
employee, they have no practical experience of being an owner with employees.
It’s different.
In many cases, the attraction for buying into a franchise seems attractive because they
believe that they will be buying a business in the box — ready to run itself. All they need
is a location and the employees to do the work — easy!
Instead, they are soon greeted with some cold realities:
- They too need to be there to see to it that the business is truly running smoothly.
- There is concern that the employees are giving things away.
- Contrary to their assumptions, they are not truly independent as they are
required to adhere to the franchise guidelines. - This likely includes being open for either long hours or seven days a week.
- And though the franchise promised marketing support, the realization sinks in
that what is being offered is minimal by comparison to what is truly required. - Finally, between the unanticipated real overhead costs and assuming that
business will boom as soon as they open their doors, not much happens except the overhead costs, the monthly rent due at the beginning of the month, etc, will still be there.
Months later, buried beneath a burden of debt and broken dreams, they are forced to
close.
Over the years John has engaged in helping franchisees get out of their agreements. The common reasons are listed above.
Before making the plunge, we advise that detailed research be carried out on the pros and cons of this critical business (and lifestyle) decision.