1. Buying a franchise doesn’t make you your own boss
Franchising is based on uniformity and doesn’t guarantee any personal freedom. You need to keep in mind that you are not necessarily the boss as you still need to abide by the rules of the home office.
2. See what others in the same franchise have to say
Signing a legally bound contract ensures your commitment to the franchise but make sure you know what you’re getting into first. See what critics of the company and other franchise owners have to say. Find discussion sites, websites, and online forums where other franchisees are offering up pros, cons, experiences, and advice.
3. Be wary of coaches or consultants that want to give you free advice
Do your research on a consultant that offers to help you. If they sound too good to be true chances are they are. That’s not to say that a paid and credible consultant with experience in the industry isn’t a good asset. Many have dealt with franchises and franchisees in the past and are a valuable asset to your venture.
4. Even if the franchisee fails the franchisor can still succeed
Though it’s obvious that the more successful each of the locations is the more successful the overall franchise is, that doesn’t mean that if one location doesn’t do well they all fail. For example, when an overall franchise is offering a promotion but forces each individual location to participate it guarantees the home office wins but not necessarily the specific location.
5. Consider going out on your own
Do a cost benefit analysis on joining a larger franchise versus doing it on your own. Do the monthly payments to the home office make sense? If the franchise doesn’t provide an ongoing, long-term ROI consider investing the money you would spend into an independent model and build your own brand. You may surprise yourself and find that you become your own franchise.
Franchise Your Business:
1. Educate yourself on all of the ins and outs
It is important to make sure that your business model and directions are extremely precise. Intuition is a great way to run the business if you’re the only one in charge but it may be difficult for others to itemize the small but important tasks of the day to day. Franchisees should not have the ability to improvise and need to know every single step including everything from accounting to supply orders to admin.
2. Learn about the legal side
It is advised that all business owners interested in franchising their business need to pay attention to their FDD filing, more specifically item 19. This is the section in which the franchisor outlines financial information based on performance. Moving forward searching for potential attorneys and legal representatives, this is the part they pay most attention to and want to know the most detail about. It may even be in your best interest to seek out an account to help you with this part of franchising.
3. Know that your goal is to continue growing.
The Growth may be appealing and the reason behind your interest in franchising but make sure to scale at a reasonable rate that works for you. Your business model may be statewide, coast to coast, or internationally but make sure whatever you choose to do works for you and seems realistic.
4. Check and double-check your franchisees.
Someone showing interest in your franchise doesn’t automatically make them a valuable asset and good fit for your business. Remember that this person is a representation of your company, brand, and overall business so you want to make sure they will take the responsibility seriously and move in the right direction. Just like with any potential job hire you would check references, do a background check, and complete multiple interviews to make sure they are the best choice to represent your company.
5. Support your franchisees.
It’s easy to get a new franchise up and running and forget to continue to invest in the franchisees especially once you are no longer a part of daily operations.
Your franchisee may be responsible for daily operation, local success and marketing, and other various franchise specific responsibilities but there is always the corporate structure above them calling the big decisions.
1. Do your homework
Do you know what it looks like to buy a business, own a business, and manage a business? Have you ever had to handle bookkeeping, operations, hiring, and supply ordering? If not it may be good to talk to other business owners and get an idea of what is involved. You may realize its not for you and choose another route.
2. Find an expert that knows the business and ask for advice
Whether you’re looking to buy a franchise, franchise your business, or just start a completely new business it’s always a good practice to ask someone who has experience in the field you are exploring. Find 2 or 3 people you think could be of assistance and reach out to set a meeting. Make sure to bring a list of questions so that you know you covered everything you wanted to ask.
3. If it works, use it
Some of the best business practices aren’t new and have existed for years and years. If you’re simply just looking for a way to better run your business do some research. Find the franchise practices that work and have lead to their success. Look into fortune 500 companies and find out what their practices are.
4. Passion is contagious
When you love what you do it shows which reflects in your business. Think of some of the things you enjoy doing and find ways to let those things make you money.
5. Before finalizing any serious business decision call The M David Katz Company
The M David Katz Organization has spent the past 30 years working with Owners, Managers and Teams assessing, launching and re-engineering businesses to achieve company goals of Stabilization, Innovation and Growth. Our approach is to provide resources at a Strategic level with Stakeholders, a Tactical level with Management Teams and, when the needs dictate, at an Operational level.
Our typical engagement begins with an initial meeting to understand and challenge your business objectives, an assessment of your current capabilities and a course of action to achieve these objectives.