What's holding Kuwaitis back from buying more franchises?
It’s no secret that Kuwait loves franchises, but most people probably don’t know that thousands of Kuwaitis would like to own a franchise. In a recent survey of 500 Kuwaitis, the majority said they would like to buy a franchise. What’s holding them back? One business leader told me that Kuwaitis are not risk-takers. Well then, I’ve got some good news. Risk-takers don’t buy franchises! When I interviewed franchisees for the book, “Franchising: The Inside Story”, I asked them how they felt about taking risks. At the time, I thought franchisees were entrepreneurs and that entrepreneurs were risk-takers. And then I got an education! Franchisees may be (and they may think of themselves as) entrepreneurs, but they do not see themselves as risk-takers. That explains why they buy franchises. Risk-takers put everything on the line with little or no assurance of a safety net. When they buy or develop a business they invest their life savings and more (money borrowed from banks, family and friends). For the risk-taker, it’s do or die. “Isn’t that what franchisees do, too?” you may be asking. Not really. First of all, if the franchisee selected a franchise company with a good track record, one in which most of the franchisees have succeeded historically, the franchisee’s safety net is the franchisor, or the corporate office. The franchisor is responsible for providing the franchisee with a plan for operating the business, plus training and ongoing support. If a franchisee has a problem, he contacts the franchisor for help, and a good franchisor is responsive and effective. Franchisees also serve as a safety net for challenged franchisees. A franchisee who can’t figure out how to solve a business issue can always contact other franchisees within the network. “What did you do when you were faced with this problem?” Since franchisees of the same brand, i.e. McDonald’s or Kwik Kopy, or Signarama, etc.) do not compete with each other, they willingly help each other. Risk-takers do not get the advantage of a safety net. It may be that they don’t want one – the thrill is not in buying or building the business, but in the risk. When risk-takers encounter problems, they don’t think about calling a friend in the same business because they are competitors. Instead, risk-takers try to figure it out on their own, and that often leads to failure. Of course, there’s still some risk in franchising. “I am a calculated risk-taker,” one prominent franchisee told me. “You can’t be in business without taking some risks, it’s the nature of business ownership. However, you don’t have to be stupid about it. Or throw caution to the wind. You’ve got to realize that there’s a downside to any business opportunity. So you invest cautiously. You do your homework, and franchising gives you that opportunity. You look around the corner, you think through the pros and cons, and you spend time talking to others who already own a franchise. So, no, I’m not a risk-taker. But I take calculated risks as a franchisee.” Makes sense to me, and if it makes sense to you, you might think about purchasing a franchise. While we already seem to have plenty of franchises in Kuwait, there are plenty more that make sense for this market.
By: Dr. John P Hayes