Of those who are motivated to run their own business, many elect to start a franchise. This specific sector of small business is popular for good reason. According to the US Small Business Administration, 30 percent of all independent businesses fail in their first year, compared to fewer than 1 percent of all franchises. Clearly, the help and expertise of an already-established enterprise makes a big difference.

But operating a business requires more than your need for a change or the desire to be your own boss. Purchasing a franchise, like any other business, requires a total commitment of your time, energy and financial resources. Whether it’s a sandwich shop, a cleaning service, a sign outlet, or a music school for kids, getting started and becoming profitable requires initiative, dedication, money and expertise.

While the franchise can provide the business structure, know-how and more, some people just aren’t cut out for the work and risk involved.

In fact, according to entrepreneur and business counselor Greg Roquet, only one in four of the prospective franchise operators he meets with decides to invest the time and capital necessary to launch such a business.

Roquet has the credentials to know what he’s talking about. He has been a franchisee with Big-O Tires for 29 years, he runs his own business brokerage and, in his spare time, Roquet conducts classes and does counseling through the Sacramento-Area Small Business Administration. The man is a walking encyclopedia of business facts and figures.

He emphasizes that he’s not interested in selling everyone who walks through his door on the franchise concept.

Sure, buying a franchise outlet can be as close as you’ll get to a sure thing. The franchise provides much of the training, marketing and savvy to get started and be successful.

But Roquet knows that such businesses are not for everyone. He also keeps in mind that his client is the franchisor, who is only interested in recruiting prospective entrepreneurs with a high chance of success. "If we don’t create a win-win, we blow our credibility," he explains. That means Roquet talks more people out of going into a franchise business than he convinces to take the leap.

The Bottom Line

So what does it take to start a franchise? Roquet has a list of minimum requirements (shown below). To him, the last requirement of due diligence is the most vital. You need to spend at least one day a week for eight weeks to adequately research your prospective business.

Franchising, he points out, is heavily regulated, which means much of the information you will need to help make your franchise decision is probably included in public records required by the government. The Franchise Disclosure Document, for example, is a 23-item narrative chock full of information about each franchisor, such as whether there has been any legal action against the company. The disclosure document also outlines investment costs, transfer fees, etc, all of which is required reading according to Roquet.

After they’ve studied the documentation, he directs prospects to contact at least eight to ten current franchisees. "This would include the superstars and those who have not made it." Roquet urges prospective owners to find out about a business operator’s day-to-day activities, what they like and don’t like, and what kind of relationship they have with the franchisor.

After you’ve done all that, Roquet is confident "you’ll be pretty smart about the business."

Finding a Good Fit

Extensive research will only take you so far if you don’t absolutely love what the franchise stands for, how it operates, and what your role will be.

Roquet recalls one guy who opted for a water softener company. The individual had the right attributes and had done his due diligence, but at the end of the day, the would-be entrepreneur wasn’t cut out for the task at hand. In this case, he hated making outside sales calls.

So Roquet tries to emphasize with prospects that they have to like the work they will be doing for a good part of the day. "If you want to open a Cold Stone ice cream shop, are you really going to be happy standing around cleaning counters and greeting customers all day?"

That routine would "drive some people crazy," Roquet concedes. Which doesn’t mean you can’t handle all franchise operations, it simply means "different strokes for different folks."

To that end, there is a tremendous assortment of franchise opportunities that offer variety along with financial potential. About 30 percent are food outlets, followed by automotive (repair, quick lube), retail (haircutting, postal stores, art framing, clothing stores), business-to-business (sales coaching, computer training, personnel agencies, printing), and residential services (carpet cleaning, handyman, pest control, etc). Among the more unique opportunities are fitness franchises, outbound sales, boutique wine shops, tutoring and business coaching.

For the very ambitious, there are opportunities as area development reps or even beyond – master franchise operators, who purchase the rights to a region and make the commitment to open 30 to 50 outlets in a set time period. Of course, these require much greater amounts of investment capital.

Regardless of the type of business, first-time owners are rarely conservative enough in estimating their start-up costs. Many franchises fail due to overly optimistic expectations of how fast the business will reach profitability. Not planning ahead in the money department has caused many fledgling ventures to fold or struggle to survive after it turned out to cost two or even three times more than originally expected to get them off the ground. Putting as much money aside as possible, far in advance, is a smart strategy for those looking for quicker success.

Free Counseling

What won’t cost you is to enlist the services of someone like Roquet, whose counsel to the general public is paid for by the franchisors seeking new franchise buyers. He typically gets right to the point in his counseling session: Is the prospect doing the hard work that is necessary to make an informed decision?

The answer is typically no, until he prods his charges to do their homework. "I use a modeling and focusing process to identify their business preferences and their skill set," Roquet explains.

"Buying a business (franchise) is an emotional decision," he adds. "We just help them find ways to back up that emotional decision so there are fewer surprises."

If you are seriously considering purchasing a franchise, you may call Greg Roquet at (530) 753-1919 or email g.roquet@murphybusiness.com.

Should you become one of the people that Roquet recommends proceed with buying a franchise, the statistics are reassuring. After five years, 80 percent of all businesses fail, while 80 percent of all franchise operations are still in business.

Roquet has an even better success rate – 90 percent of all the franchises he has helped launch have become successful. "I try to make it as safe a journey as possible," he promises.

AAFD.org – The American Association of Franchisees and Dealers is a national nonprofit trade association dedicated to defining and promoting total-quality franchising practices. Site includes sections on fairness initiatives and tips on buying a franchise, including legal resources. 800-733-9858

Franchise.com – Directory of franchise opportunities allows you to sort by required investment and hours/lifestyle, as well as by company and industry. Database of articles and resources about franchising and small business ownership. 877-808-5295

Franchise.org – Online home of the International Franchise Association provides basics of franchising and details on 1250 franchising opportunities. Take a free course on franchise basics through their Franchise University program. (202) 628-8000

FranchiseWire.com – Search by country to find news articles about US franchises, or search the directory for a list of franchises and link to the latest news about each.

SBA.gov – US Small Business Administration website. Click on "Small Business Planner" for info on startup basics, finance, employment, marketing, taxes and legal aspects. 800-827-5722

SmartBiz.com – Internet technology resources for start-ups and small businesses includes business calculators, sales & marketing tools, and information on creating an online presence.

Next week – Entrepreneurial Ventures: Finding a profitable niche and creating your own independent business.

Rich Heintz is a former Job Journal writer & editor.