Award Group Australia CEO Deb Shugg said she had always felt that one of the biggest challenges faced by franchisees was a lack of understanding on how to run a business.
“Franchisors have a responsibility to educate their franchisees in a more holistic manner, taking into account some of the more fundamental elements of business ownership and operation.
“Understandably, franchisors have been more focused on providing prospective franchisees with the technical skills required to run the franchise business to explore additional training programs in core business skills, like record keeping, financial management (such as cash flow and budgets) and negotiation.
Shugg said that perhaps it was time for franchisors to be required to accept the broader responsibility that comes with their role as business advisors, but admitted it wouldn’t be easy.
“In the past, trying to encourage franchisors to implement ‘business ownership training’ into their training programs has been challenging.
“I’ve been offering these types of training services to franchise systems for years, but franchisors really don’t want to know about it.
“The expectation is that the franchisee will have an accountant or advisor to help them with these day-to-day business management issues. Unfortunately, this is rarely the case,” she said.
Shugg said that business owners, by their very nature, often relied upon “gut” feelings to respond to these day-to-day issues and their lack of understanding of financial management further supported these tendencies.
“This also applies to making the big decisions too, like the decision to buy a franchise. In fact, in a franchise interview I once had, a prospective franchisee told me the reason she knew it was ‘right’ was because a commercial promoting our franchise system came on the radio at the exact time she was thinking about leaving her job.
“This demonstrated to me that this prospect hadn’t considered the implications of owning and operating a business. For her, it was a fantasy providing her the freedom to leave her job.
“That’s why training franchisees in matters of business accounting, reading financial reports and statutory requirements should be mandatory.
“It can only help each franchisee to become a better business manager and a more valuable asset to the franchise business,” she said.
Award Group Australia offers franchise opportunities for small business operators with extensive accounting experience and/or qualifications. Franchises are available nationally, and also with
Award Bookkeeping Company, a
home based business service and
accounting franchise.
16-May-2008