June 10, 2014

Should I Join a Hiring Franchise or Start My Own Hiring Firm?

businessman compiling macro white puzzleWith the job market being as tough as it is, and with job seekers demanding more flexibility and autonomy in the way they work, it’s no surprise that many professionals are deciding to become self-employed and start their own businesses. You can kill two birds with one stone  in that you create your own job in a job scarce market and you get to be your own boss and can develop working patterns to suit your own lifestyle.

There are many questions you need to ask before starting your own recruiting agency or staffing firm, and one question which is often overlooked (but is definitely worth asking is), “Should I join a hiring franchise or start my own hiring firm?”

As you probably know, a franchise is effectively a ready-made, successful business model that you as the franchisee can buy into, enabling you to start your chapter of their franchise business, usually within a designated territory. Some of the most well-known franchises are Subway, Dunkin Donuts, Hilton Hotels, KFC and McDonalds. But, there are a growing number of players in the small business and staffing and recruiting sectors, making buying into a staffing/recruiting franchise a very viable option for recruiting entrepreneurs. Some all the more well-known staffing franchises are: Express Employment Professionals, Spherion, PrideStaff, TRC Staffing Services, Labor Force, and Evan Thomas. You can find a more extensive list of staffing franchises here at entrepreneur.com.

But, the question is, should I do it myself or join up with a staffing franchise? Of course, it’s a complicated question, which we can’t fully answer in such a short article, but we can give you some pointers:

What industry experience do you have?

If you are an experienced business professional, without specific staffing experience, a franchise may be the better option for you as it will give you a recognizable brand name and industry specific credibility, which you may be lacking. They can also provide training. Clearly, if you are an experienced industry-specific staffing professional, your credibility will be your resume and own professional history, and you may not be in such need of a franchise to boost credibility or to provide training; so, you might be more inclined to go it alone.

What’s your budget and net worth?

This is important; franchises are not cheap. They generally like to hire people who are already rich and successful, which is why they will generally require an investment of anything from about $15,000 up to $200,000. If you can’t get a hold of this kind of money, then a franchise may not be for you, although many of them will loan you the start-up money, but this is a higher risk.

Are you a manager and leader?

Most of the staffing agency franchises will require anything from two to four employees to run the franchise unit, which means you will need to be comfortable managing and leading teams. If management is not your strong point, you’ll need to rapidly develop your skills or it may be that a franchise is not right for you and you should take the self employed, one-man band route.

Do you like sales?

Staffing and recruiting agency roles should not be confused with in-house HR and staffing roles. There are some similarities, e.g. candidate search and interviewing, but there are fundamental differences in that jobs are not given to you; you have to go out and find your own job orders and clients and you have to make your own sales. Many franchises offer support and training in sales processes and some will even provide you with job orders, so if you are sales minded but perhaps lack industry contacts and sales know-how, then a franchise may be right for you. Alternately, if you know the industry and can make sales, you are more than ready to go it alone.

So, if you are an industry-experienced staffing professional, you may not need a franchise. You don’t need the brand credibility, industry knowledge, sales skills or contacts as you may have them already.

However, if you are lacking in any of these three areas you do stand to benefit from the features that a franchise can offer. If you do consider buying into a staffing franchise you might be interested in my follow-up piece, “6 Key Considerations Before Choosing a Staffing Franchise.”

Good luck with whatever path you choose.

Note: this article provides general information about recruiting and staffing franchises and should be read as general information only. Recruiter.com does not offer franchise based recruitment services – but may be able to refer you to a partner. Of course, please do your research before selecting any franchised recruitment provider. You may request more information with the link above, but also, as with any major business decision, please consult professional advisors before purchasing a franchise.

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Kazim Ladimeji is a Chartered Member of the Chartered Institute of Personnel and Development, and has been a practicing HR professional for 14 years. Kazim is the Director of The Career Cafe: a resource for start-ups, small business and job seekers.