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5 mistakes franchisees make

Sarah Stowe

We all mistakes, franchisors and franchisees included. So what are the common errors made by franchisees and how can you avoid them?

Many mistakes I’ve seen franchisees make come from bad advice. While there are many sources for bad advice the majority comes from non-professionals such as friends and family, well-meaning and not so well-meaning associates. The second is more overlooked but is the source of the worst problems and that is one’s own ideas from the past.

The first is easier to fix — get more and more advice from professionals and people who are successful and do your own research. You’ll know when it’s truth because it clearly leads to success and makes sense without blowing its own trumpet as being the best advice.

A franchisee has to look at what is happening now and apply what works from the past but also has to adapt the knowledge from the past to the current situation.

It’s obvious to say, “Don’t drive your car like you’re riding a horse.” It is less obvious for a person to see that they really should follow the advice to “Look at your financial management regularly.” Particularly if that person’s idea from the past is to say “I always let the accountants take care of that stuff.”

We’re not talking about having to use the latest technology or the newest marketing strategy or the fashion of the day but about seeing things in the here-and-now freshly and newly and dropping out all the “we’ve always done things that way,” “in the last business I had…. ”

Common mistakes franchisees make can be avoided if you can drop any advice from the past that says not to do it or to change it or to do the opposite.

Following a proven workable formula provided by franchisors allows you to avoid common mistakes and gives you the power to be the best franchisee you can be.

Mistake 1:  Franchising is easy

Sorry, you have to work hard.  Franchising doesn’t mean that you don’t have to work; it is like any business – the more you put in, the more you will get out.

Mistake 2:  I know what is best for my business, the franchisor doesn’t

You have to apply what you have learnt. Reflect back on your training – what were the tips given to you to succeed? Follow them. The more compliant you are as a franchisee, the more chance you have of succeeding. What are the one percenters that make a difference?  Do them!  Use the systems and manuals given to you during training. 

Think in solutions and become a professional problem solver – if you are having difficulty with a part of the business or have a problem you can’t solve – ask your franchisor or fellow franchisees. It is, after all, your business and your responsibility to find a solution. Blaming others will never solve a problem.

Mistake 3:  I didn’t want to talk about my problems

If you have a disagreement, communicate to the person you have a disagreement with. Bottling things up doesn’t help anyone and talking about someone to another person doesn’t help either.  If you have a dispute with your franchisor – communicate, communicate, communicate!  Your franchisor will not want to have an unhappy franchisee and will most likely welcome your communication.

Mistake 4:  Someone else will look after the financial management

No, they won’t. You have to keep a close eye on your finances. There are some very sensible financial rules that will help you, such as:

  • Keep your personal expenses separate from your business expenses. This will help you understand exactly what is the profitability of your business. It will also make it easier to sell your business down the track.
  • Look at your finances every single week, with no exceptions. At the end of the week, you should be able to work out the profitability of your business so you know if it was worth getting out of bed for.
  • Understand that the turnover of the business is not nearly as relevant as net profit. Net profit is your wage as the franchisee. ALL bills for the business have to be paid before you can get paid. Know this figure every week.

Mistake 5:  I haven’t got time to plan what needs to be done, I’m too busy fixing the problems I have today

If you concentrate only on today, you will only progress as far as today. Do your planning regularly, don’t just work on what needs to be done right now.

Earlier I mentioned the here-and-now. It may come as surprise to many people to find that they aren’t looking at their business as it is now but rather are doing all the things they think would be the right things to do if they were that successful franchisee on the other side of town. 

The best way to work on your business in the here-and-now is to LOOK! Look at what is actually going on right now, not what others tell you is going on, and not what you think is happening.