Does Yellowknife need more franchises or more independent businesses?

I think how you view this question depends on your familiarity with both models. Having owned both types, I believe firmly that people should own a franchise before they even consider opening an independent business. That may sound backward, but hear me out…

I have a visceral reaction when I see entrepreneurs make choices that are likely to cost them not only financially, but to sap their entrepreneurial energy. The personal cost is huge and there is also a cost to our community. The classic example is the entrepreneur who opens an independent restaurant in a location that failed the previous owner and many others before them.

We’ve all seen this happen time and time again. To some, the allure of a perfectly good kitchen in a serviceable location, and a situation where they can rent the space and equipment rather than buy them, is irrestistible. All they have to do is come up with a few months’ rent and they are in business. But in most cases, this impulse should be resisted. It’s often more of a trap than an opportunity. They assume that a facelift and their own talent will make the difference this time. And because they don’t have to take out a loan, they don’t have to write a business plan to test out their assumptions. They don’t have to convince an objective expert, like a commercial banker or a franchise recruiter, they just have to persuade their well-meaning friends and family.

Food and beverage, retail and personal services franchises don’t succeed 100% of the time, but their success rate is vastly superior to independent operations. They are very careful at vetting franchisees and their business model, methods and marketing have be tested in the crucible of numerous economic ups and downs over decades.

Yellowknife needs both franchises and independent businesses, but we will have more successful independent businesses and a stronger small business community if entrepreneurs force themselves to understand the franchise approach first. Rather than trying to re-invent the wheel, entrepreneurs should first learn everything they can about the wheel and then try to give it their own personal touch.

I’m putting together a network of people who want to bring more franchises to the North. Whether you’re an aspiring entreprenuer or an investor, DM or e-mail me and I’ll add you to my confidential “franchise curious” e-mail list. And if you know someone who may be interested in joining this group, please share this post with them.