Franchisee success depends on some simple basics, whether you are lining up to invest in a brand new site, or take over from an established business. If you want to be a top franchisee, there are a few simple steps you can take.
Let’s preface these tips with the acknowledgement that there are no guarantees in business – franchised or otherwise. Going into business is a risky activity, but it can be packed full of rewards and deliver a bright new future.
So if you are prepping to buy a franchise, there are some ground rules to follow that will help you to be a top franchisee and steer the business towards your ultimate goals.
1. Know yourself
What do you like to do? How do you manage paperwork? Could you work all hours, evenings and weekends? Understanding how you will best perform in a business where the buck stops with you is an important step in choosing the right franchise.
It’s important to align your skills to the appropriate opportunity. That doesn’t mean you can’t change career, or learn new skills. But if you really aren’t a people person, don’t take on a franchise that requires constant client and staff engagement.
If you love being out and about, don’t choose a business that will keep you office bound.
If you are terrified of marketing, ensure the franchise you invest in provides plenty of practical support.
Find a franchise that gets you excited about what you can bring to the business, and that you can see yourself operating day after day, for a few years.
2. Do your research
This is not exciting; to do your due diligence effectively requires commitment of energy, time, and probably some costs. But this is the most important step in setting yourself up with the right franchise and a sure-fire way to be a top franchisee.
Obviously the first stop is the franchisor who will readily give you information about the brand, its purpose and vision, and wins. But it’s crucial to dig deeper and find out what you can about the owners, the leadership team, the support team. Turn to franchisees (current and former) to discover the reality of how the franchisor team communicates with its franchisee network, whether there are any consistent pain points that upset franchisees, and most importantly whether the franchises are profitable.
Use a wide variety of resources, including the internet, and friends and family, to assess the brand’s viability in the marketplace.
3. Know your numbers
How much can you afford to spend on your franchise purchase? It’s really worth taking a hard look at your income and expenses and assess what you need to be bringing in from the business to sustain your lifestyle. If you’re prepared to make cuts, you’ll need to know how you will achieve these. Either way a budget is a fundamental tool to setting out financial boundaries.
Don’t forget there will be extra upfront costs as well as the capital investment that you’ll need to pay when you purchase your business – do some research to find out what other franchisees have paid. And add in ongoing fees, lease, taxes, superannuation, insurance that will need to be paid, whether or not you are hitting your financial target.
Every franchisee will also need working capital to manage the early days and weeks of trading
4. Use your head
It’s so easy to be passionate about a brand and be so committed that you’ll go ahead and purchase a business because you just love it. That can play havoc with sensible business decisions so try and park your emotions.
Buying a franchise is like any other commercial agreement, it’s a binding legal contract. So you want to be confident that all the important elements (business support, profit potential, excellent training, market viability) are all in place before you sign up to a new business.
Some franchisors can put pressure on franchise buyers to commit; if this happens it’s time to take a hard look at the offer. Don’t be rushed into a poor decision. There’s always another location or another franchise.
5. Seek professional advice
Franchise buyers can be wary of outlaying more costs to get professional advice at a time when they are counting every cent. Franchising though has some rules and regulations that need to be observed and the best way to ensure what you are signing is a fair agreement is to get expert legal advice from franchise experienced lawyers.
Accountants who understand the ins and outs of franchising are also invaluable advisors who can steer you away from a dud deal that will see you lose money.
How to be a top franchisee
Whether you want to be a gym owner, pool cleaner or run a burger business, the fundamentals are the same. If you want to be a top franchisee, you must be prepared to do your research and ask yourself the hard questions.
The key to ensuring you have a successful operation is understanding your own strengths and weaknesses, and adjusting your expectations accordingly.