Finding a business partner can be a way to start a new franchise by sharing risk, combining skills and pooling capital, suggests Magdalena Schoeman, new business manager, Belgravia Health & Fitness.
How should you approach a partnership if you want to go into business with your best mate, spouse, or cousin?
“Ensure you’re compatible and have similar expectations to prevent issues down the line,” she says.
Realising the dream
A partnership allows you to combine different business skills for maximum growth potential.
“It can make buying the franchise possible, when otherwise it may not be,” says Magdalena.
There are different types of partnerships. You may partner up and both work in the business day-to-day, while other arrangements involve ‘silent’ financial partners.
“Who you partner with is as big a decision as what franchise to buy,” she adds. “Just because a potential partner may be a friend or a family member, it doesn’t guarantee a good partnership.
“Selecting a partner that compliments your traits and skillsets will make for a stronger and more well-rounded business,” says Magdalena. “Are you able to get along with a partner? Are you sure that they will pull their weight? Ask yourself the hard questions before committing.”
Make sure both you and your partner/s are clear on goals and what you’re hoping to achieve, in what sort of timeframes.
“Where do you want to be in five years? What about 10? Do you have an exit strategy? Make sure you both feel there’s a balance and that you are on the same page to avoid disappointments and disagreements.”
While there is a lot of head office support for franchisees for various aspects of running the business – from marketing to operations – there is still plenty to be done to keep a franchise running optimally, points out Magdalena.
“Who will be working in the day-to-day business, if anyone? And how will the other ‘backend’ responsibilities be split? Map this out ahead of time as part of a business plan so it’s clear and everyone is happy with what’s expected of them.”
Buying a franchise with your best mate, cousin or spouse can help you share upfront costs that apply to some franchises.
And while you will be in business for yourself you’ll be sharing the effort, decision making and hard work required to get this up and running and on track for success.
“This is especially relevant if the franchise is one of many businesses owned by those investing,” says Magdalena.
“Working with a franchise partner can help you ramp up business growth and expansion more quickly and easily, but it pays to choose a partner with the same care and attention you would when selecting franchise opportunities. Due diligence from the start prevents problems down the line.”
Seek legal advice
“Nobody should ever go into any type of business assuming everything will go to plan. Get advice and have agreements drawn up that cover the most common hurdles you may encounter so that all parties involved have a level of protection,” suggests Magdalena.
“This should involve defining each person’s role in the business, figuring out what to do if one person wants to dissolve the partnership, determining how to share profits and brainstorming ways to handle disputes.”
No matter what happens or the nature of the arrangement, the best chance of success comes to those who openly communicate, she says.