Franchise Basics for Women

By Pamela Gold

Does it appeal to you to own your own business and be your own boss, but the thought of developing your own business model seems daunting? Does flexibility and time with your family sound appealing?

Franchising just might be the solution for you.

With recent decreases in economic growth and employment, franchises are becoming increasingly popular worldwide. Recent statistics also suggest that there is rapid growth in the area of women in the roles of franchisee and franchisor.

The Basics

Today, franchises no longer consist of fast food restaurants or specialty retailers alone. Included in the franchise sector are over 75 industries throughout the world. From home-based marketing to mobile computer education, the options are endless. It is now possible to take a personal interest and turn it into a business opportunity. Whether one wishes to start one's own network of franchises or buy and purchase a single franchise, more options than ever are being offered today.

It is estimated that the number of women buying franchises in the United States is close to the national average for women opening their own small businesses in this country. In the U.S., 38 percent of all businesses are owned by women. According to the National Foundation for Women Business Owners (NFWBO), there are 9.1 million women-owned firms in the U.S., employing 27.5 million people and generating more than $3.6 trillion in sales. Women are rapidly entering the business marketplace and franchises are no exception.

The franchise community is making a huge effort to invite women into the franchising world. There are awards for women in most franchise-related magazines, committees for women only, loans that make financing easier for women to obtain. The trend seen most recently is a rapid increase in women franchisees. For many women, becoming a franchisee has led to success and happiness in career and personal life.

Advantages of Becoming a Franchisee

According to an International Franchise Association (IFA) survey, 93 percent of the franchisees surveyed said that being associated with a franchise name gives them an advantage over being an independent business. 64 percent said they would be less successful if they had tried to open the same type of business on their own. 88 percent said they would recommend purchasing a franchise to someone rather than opening an original business of their own. There are many advantages to buying a franchise.

• Company Name and Game Plan: Franchises are pre-established businesses. Along with trademarked names and products, you are often buying a reputation and a formula for success. Your job is to find a new location that will also succeed, and oversee the day-to-day workings of the franchise, as prescribed by the franchisor. Depending on the franchisor, you may receive help in choosing a location and getting started. Many franchisors will supply you with marketing materials and guides for just about everything you will need to do.
• Be Your Own Boss: To a degree, you will be your own boss. Unlike an independent small business, you will have standards you will need to follow. You can often set your business' hours, hire the employees you'd like to hire, and manage your own business.
• Flexibility and Time For Family: Owning a franchise is not an easy feat. No one will tell you that it is. You will have to work hard at first. How much time you will have to put into your business, depends on what type of franchise you choose to buy. Obviously, some businesses, such as an "open 24 hours a day" convenience store might require more time and the possibility of being "on call" 24 hours a day, 7 days a week. Other businesses will make it easy for a franchisee to separate work from pleasure. In most cases, once a franchise is established, franchisees are able to enjoy a lucrative, flexible lifestyle. Time for family and recreation will be at your fingertips if you have the drive to create a successful business.
• Ease of Financing: Unlike a brand-new business with a unique and never-proven business plan, franchises are established and already proven. Franchises have a niche in their own industries and it is obvious to banks and other institutions that grant financial aid to franchisees that a franchise is likely to succeed and therefore they are often willing to grant a loan to the potential franchisee.

Disadvantages

Owning a franchise is not always easy. There are a few things to consider before purchasing a franchise.

• Financial Issues: As with all small businesses, you will have to front lots of money. From franchising fees to location leasing (unless your business is home-based), you should find out how much money you will have to pay the first year that your business is open. The first year is the hardest for all business owners. Income may be low until you are well established and there are many fees, both obvious and unobvious to consider. It is important that you consider the financial side of franchising. Also, some franchisors offer insurance packages that you can buy, but you will lose the benefits package you might be used to. Your family should be supportive of your decision, and remember things do get better! The average income for female franchisees in 1998 was $68,140. Success typically follows the months or year of hard work and struggles.
• Franchise Procedures: Are you willing to listen to and follow the standards prescribed by your franchisor? You must be the type of person who is willing to follow procedures. Often, you will have exacting standards that you must follow. This varies from franchise to franchise. Some franchises, such as an ice cream franchise, may have a standard procedure for cleaning equipment and serving their products. Other franchises may only have standards for inventory sold. Research the franchises you are interested in. For some, standards can be a limiting factor. For many first-time business owners, standards are a helpful and even a business-saving factor, and the reason why franchises are popular.

Special Services for Women Franchisees

With a boom in woman-owned small businesses, there is a support system being established for potential female franchisees. This support system will help you as you begin and while you travel on your franchisee journey.

Committees and Organizations for Women: As a woman in today's business-owner's community, you will have lots of support and guidance from a network of organizations and committees devoted to helping women entrepreneurs succeed in the business world.

IFA's Women's Franchise Committee has a mission statement, which reads, "To promote women's participation in franchising by providing opportunities for the exchange of ideas, resources and experiences." The committee meets regularly to discuss the state of women in the franchise industry, and is chaired by American Leak Detection's Executive Vice President, Lorrie Rennick.

There are many women's small business associations and organizations for women in business. Try using a search engine, such as Yahoo.com, to find organizations specific to your region of the country, franchisee or franchisor support networks, or organizations devoted to helping women of specific races, such as AWIB.org (Asian Women in Business).

Financing for Women-Owned Businesses

Special interest banks and financial institutions are rapidly looking to assist women in starting their own businesses. In fact, the Small Business Association (SBA), who grants SBA loans to men and women who want to become entrepreneurs, has formed a partnership with a variety of women's business groups. The SBA has signed partnership agreements with 15 leading professional women's organizations so that they can more effectively reach women entrepreneurs and share with them information about SBA programs. Organizations include, The National Association of Women Business Owners, The National Federation of Black Women Business Owners, Business and Professional Women/USA, National Association of Female Executives, and many others. Additionally, the SBA has more than tripled the number and dollar value of approved loans to women entrepreneurs since 1992.

If you're having problems getting a loan, there are SBA loans that are easier to receive, if you meet the SBA's special criteria. For example, there is a program available which is designed to assist minority and women borrowers in developing viable loan application packages (7(a) Minority and Women Prequal). Find out more by searching for information on the Internet, and by contacting a financial expert.

Angel investors are another option for those trying to finance their new business. There are angel investment clubs with women in mind. WomenAngels.com is a new angel investment club designed to help women investors in the Mid-Atlantic region capitalize on the explosive growth in entrepreneurial activity and venture financing. The club is the first women's angel investment club in the country and wishes to act as a catalyst for the female angel community.

Businesses Owned By Women

As growth of the population of women entrepreneurs increases, statistics prove that many women prefer small, friendly, easy to manage businesses, while more men prefer large, profitable organizations. Thus, the trend in more women choosing to be franchisees than franchisors emerges. Women choose to start their own business for many reasons, including freedom from corporate limitations, flexibility, ability to take risks, and independence. By maintaining freedom and flexibility, women business owners find that they become more confident and more creative.

Women think differently than men think. Studies indicate that women tend to use both sides of their brains when they make decisions, unlike men, who are more left-brain influenced. Furthermore, 53 percent of women business owners emphasize intuition, which is "right brained". Intuition allows us to see opportunities and situations that might not be apparent and gives us the ability to know if they are right without the use of reason or analysis. From this very different way of thinking and making decisions, women tend to run their businesses differently. Women entrepreneurs often describe their businesses in family terms and they often see their business relationships as a network. Thus, employee motivation and productivity is often very high at businesses owned by women.

If you're ready to purchase a franchise  of your own, today is a better time than ever before for women to become entrepreneurs. Seize the day, do your homework, and you will be on your way to success as a businesswoman!