• Sarah Barker

UNDERSTANDING FEAR AND ANXIETY





Welcome to the world of “fear and anxiety.” The # 1 reason why people don’t purchase franchises -- despite their admittance that they “really want to own their own business.”


We see this occur every day. And, we have asked ourselves, time and time again, what we might offer to our clients to help them gain a better perspective of their fears – so that these fears don’t get in the way of their dreams of business ownership. And here is what we came up with…


It all starts with YOU better understanding YOU … Most people, at some time in their lives, invest in stocks or mutual funds – and then the stock market drops, and they lose some part -- or all -- of their investment.


If they are extremely risk-averse, they never do this twice. They then put their savings into savings accounts or into money-market funds, and watch slow but ultra-conservative growth occur instead. They are simply unable to again accept even the idea of loss in any potential investment. Unfortunately, and let’s face it – as you don’t reach retirement quickly at 1-2% annual growth on your investments -- this person is unlikely to meet their long-term financial goals anytime soon.


Or, they realize, that in order to make money, they have to take some risks. So they hope to make “calculated” risks, meaning “they have thought through all of the angles and decided they can live with whatever outcome occurs.”


If you think you are in the first group of highly risk-averse, then perhaps franchising isn’t for you. You have to be able to swallow at least some level of risk if you are to be successful. Or, just as with the stock market analogy, you can learn to view your franchise purchase as a “calculated risk.” Our goal here is to help you understand all of your options, so that this understanding can occur.


What Makes People Have “Fear and Anxiety?”

From our experience, “fear and anxiety” tends to come from two areas:


1. LACK OF INFORMATION about something new to you – causing you to jump to conclusions prematurely, or simply feel anxiety over not “being in control.”

2. SELF-DOUBT – that you are moving out of your comfort zone and can’t do the work required and that, as a result, YOU WILL FAIL (and thus fail your family or other responsibilities)

Let’s look at these one at a time. Here’s an example of what we’re talking about with regard to “lack of information” …and let’s see if this reminds you of YOU.

Mary Smith, 46, was investigating a business in Southern California. A single woman, she wants to be sure she is “crossing every t” and “dotting every i” in her investigation of franchises. In other words, she is taking her “due diligence” quite seriously. There is certainly nothing wrong with that! We encourage potential buyers to do this. So, as Mary begins validation calls with other owners in a particular franchise she is considering, she decides to call the owner adjacent to the territory she is considering, and pretend she’s a customer. She asks this owner if he would service HER zip code (which happens to be in the territory she is considering.) The owner replies, “why yes!” And Mary hits the ceiling – out of fear and anxiety.


She calls her consultant, all upset, and says “I haven’t even purchased this franchise yet – and the guy in the territory next to mine is already infringing on my business! Why, there is NO WAY I can consider this franchise!” Her consultant calmly explains that with that particular franchise, as it states in their FDD document, they allow their owners to sell beyond their territories ONLY UNTIL SUCH ADJACENT TERRITORY IS SOLD. As soon as the territory is sold, the owner must cease in any marketing in that territory – and hand over any customers they have in that area to the new owner. So – Mary Smith not only does NOT have a problem with this franchisor, but she is considering a territory that may already have customers!


What a different outcome from what Mary thought! She just needed more information! And, a reminder that true due diligence is about learning the good – not just trying to find the potential faults!


Here is another story

Jim Brown, 55, was investigating a franchise company’s FDD. He noticed that the document stated that the franchise lost a small amount of money that year. He told his consultant he couldn’t invest in a company that was losing money – that it was too “high risk” for him, or perhaps reflected a declining market for this particular franchise.


In this instance, his consultant explained that the franchising world “wasn’t necessarily like the corporate world from which Jim came.” That in the franchising world, highest growth in a franchise comes from the sales of new franchises. And that many franchise companies, may choose to enlist a “controlled growth” strategy of slower growth of units, in order to provide the best possible support to their existing owners. Or they may choose to reinvest in software (or similar capital investment) for their owners, so as to increase their owners’ productivity, thus resulting in a short term loss for the company. What Jim needed to understand is that only a year-to-year comparison of royalties received from owners could truly give him a read on the company performance. This comparison demonstrated 10% growth for the current owners – a formidable increase in a market demonstrating average growth of 4%. Again – what a different story the right information will provide!


The point of this exercise is to tell you to NOT ASSUME. Franchising is a slightly different world from the current world you likely operate within. Your consultant will generally advise you, while investigating your franchises, to keep a tablet, and to write down every question as it occurs to you. Then, when they have their weekly meeting with you, such questions can be addressed. If through this methodology you still can’t find a satisfactory answer to your question or concern, then that particular franchise probably isn’t for you.


OK – the other contributor to fear and anxiety. What about this self-doubt? How do you get past THIS hurdle? Are there times when your consultant or your franchisor have answered all of your questions -- but something is still nagging at you, making you feel uncomfortable – and you can’t put your finger on it?

So many clients are often seeking guarantees when they seek a franchise. Unfortunately, there is no such thing. No franchisor can promise performance to a buyer – as that buyer must contribute to their success as well. Just remember, your risks have been reduced significantly because the franchisor provides so many benefits that would have taken you years to develop on your own. But you still have to take a leap of faith that YOU can do it.

Here are 4 exercises that just might help you understand what it is that’s making you uncomfortable. Put yourself in all 4 situations – and it’s likely that when you are done, you’ll have a better idea of not only what’s making you feel unnerved, but what you can do about it. Then, you can either act on reversing your fear – or choose to abandon your dream for franchise ownership. Either route is okay – as long as you know WHY you made your decision the way you did. Then you’ll never feel regret that you didn’t properly see through your opportunity. And that, in and of itself, can help you sleep better at night!


4 Exercises for Identifying Issues of Self-Doubt

1. The Scariest Thing You Have Ever Done

Start with making a list of any decisions you have had to make in your life that really tested your fear. Marriage? A move to another city? Buying a house? Accepting a new job? Sometimes, these decisions can be downright immobilizing.


Then, look at your list and identify which of these decisions had the best outcome for you.


Looking at these “best outcome choices,” ask yourself, “what did you do to give yourself the confidence to make a decision in all of these instances?” Did you do research, did you talk to other people, did you ask a mentor, did you “go with your gut,” or some combination of all of these? Or did you do something altogether different?


The point is, the decision to buy a franchise is no different. Yet for some reason, many intelligent people will say things like, “I just know it’s going to pop out at me as being the right choice.” Don’t let yourself be one of these people. Many people don’t have any idea what their own personal “success formula” has been up to this point, and they find this process to be “eyeopening” in identifying not only their self-doubts – but how they have gotten past them before.


2. Projecting Yourself Into the Role of an Owner

Usually, after the first overview call you have with a franchise company, your consultant will ask you “what would you be doing each day, in working within this particular franchise?” Many individuals are dumbfounded by this question – as they haven’t even thought about it.


We ask this question purposely – because it’s important to get clients thinking not just about the franchise concept – and about what it would require of them, as an individual owner. This is where a client needs to “drill down” in their investigation process. When the franchisor says “you’d be doing some marketing” – what EXACTLY does this mean? Cold-calling? Sending out flyers? Networking to a list of businesses? Buying local media? And if they tell you “all of the above” and you have never done any of these before – what do you do next? Bolt? Of course not. If you can’t envision the role, ask the franchisor or your consultant to help you experience the role. In many instances they can put you in touch with other owners who had the same lack of experience you had when they got started -- to help you past these kinds of hurdles. Or they can have you visit a location and witness how an owner is carrying out their day-to-day tasks. All of these can help you gain perspective on the potential difficulty and scope of tasks that are new to you – so that you can then decide if you might be comfortable doing them. And, remember, you are also provided training in all areas of the business.


3. Developing an Exit Strategy

Without a doubt, the most common self-doubt is “I will fail and I will lose my shirt.” The irony of this fear is that this is a FAR less common outcome than buyers think.


First of all, we prescreen our brands and only select portfolio of franchise companies only for those companies that validate well with owners – and that understand that their success is dependent upon the success of their owners. Most companies in this portfolio have less than a 4% failure rate. And, remember, the franchise owner can simply show an owner how to follow their system – they can’t do the work for them. If the owner chooses not to follow the system, the franchisor cannot help this person succeed.


Nevertheless, it is both healthy and appropriate to think through an exit strategy – in other words, what options do you have available if you decide you don’t want to see through your 10-year contract with a franchise, or if your franchise fails and you’re left with a unit without corporate support?

a. You can sell – and your resale potential is subject to market demand in your area, just as if you were selling any other asset, such as your house. Ask your franchisor what their resale history has been – and it will help you gain perspective on your potential loss, if you had to pull away.

b. You can walk away from your investment – but you will still owe the balance on your note to the bank or finance company. Some people take this option, cut their losses, and move on.

c. If your company fails, you can continue to operate – generally under an agreed-to name, coming out of legal proceedings. Don’t assume YOU lose if your parent franchisor fails – there are many franchise businesses that are still in operation today LONG after their franchisors closed up shop.


When you understand that you are not painted into a corner – your REAL options open up for you.


4. My Place in the World

When clients are asking themselves “can I do this?,” a consultant will often ask them to make an inventory of everything they have considered an accomplishment in their lives. And then to “rate” each of those accomplishments. Was it in the top 50%, performance-wise? Top 25%? Top 10%? Top 5%?


OK. What was the average rating of ALL accomplishments? 25%? Another way of saying this, perhaps, is “have they always pretty much been a B-student?” Always in the top quartile of performance among others? If this is the case – then what makes them think they are going to be any different at this challenge? When they talked to other owners, did they compare themselves? Did they feel “at par” with these owners – or more experienced? Or less experienced?


Done honestly, this should be a real confidence-building exercise. And when you compare yourself to others -- and don’t feel up to par – then you probably need to consider another franchise.


The Leap of Faith

So many clients are often seeking guarantees when they seek a franchise. Unfortunately, there is no such thing. No franchisor can promise performance to a buyer – as that buyer must contribute to their success as well. Just remember, your risks have been reduced significantly because the franchisor provides so many benefits that would have taken you years to develop on your own. But you still have to take a leap of faith that YOU can do it.


You and your consultant have done a thorough analysis of your skills, interests, needs, financial requirements, etc., -- and then match you to a franchise that has been pre-screened to meet our strict criteria (i.e., the company provides strong support, validates well). Only through this comprehensive approach do you truly make a “calculated” decision regarding your risk.



Interested in learning more about franchise opportunities? Contact us below.

SSB Franchise Consulting offers one-stop shopping when you are searching for a business to call your own. We help you save time by working with you to learn your likes and dislikes and style of doing business then matching you with prospective Franchisors at no cost to you. To read more on if we're a good fit go to https://www.ssbconsulting.us/faq 208.724.1731


Ready to get started? Schedule your free consultation today!

Sarah@ssbconsulting.usSSBConsulting.us

 

 

 

 

 

Sarah Barker | SSB Consulting

Franchise Consultant  & Recruiting Specialist

Located in Boise, ID, but I work with clients in all states.

            208.724.1731

           Sarah@SSBconsulting.us

 

 

 

 

 

36869_DnnDeveloper_ContactUs.png
  • Facebook
  • LinkedIn Social Icon
  • Twitter
  • YouTube Social  Icon
  • Google+
  • Instagram
  • Pinterest Social Icon
Contact us