Before you invest your hard-earned money in buying a franchise, are you really ready to take on the responsibility?
There is more than meets the eye in franchising. While it may seem it is just a matter of stepping into a retail- or service-ready set-up, just like an independent business it requires hard work and some expertise.
Check off these five points to see if you are really ready to buy a franchise:
1. You are ready to take responsibility
You have a burning desire to prove yourself and are all fired up to run your own business, but also understand that as a franchisee you will be responsible for its success. The franchisor provides the basics for you to establish and run your business, but is not there to do it for you. That is the challenge, and why all your hard work will make success all the sweeter.
2. You can follow rules
Compliance to the franchise’s processes and procedures is fundamental to the success of the network, and every franchisee is expected to adhere to brand standards. The level of compliance will vary according to the franchise model – some foster independent thinking; others are stringent in their rule of law. Some franchises see their future in providing key elements of branding/supplies/procedures but leaving the personality of the franchise to the individual owner.
Whichever the system you choose, be prepared to accept the constraints and play by the rules.
3. You are willing to learn
You will benefit from industry and brand knowledge when you join a franchise, starting from your first training day. That can continue if you embrace all the opportunities available to you to soak up information from formal situations such as online training modules, regular franchisee meetings and annual conferences, and informally through the area manager and fellow franchisees.
An open mind and eagerness to discover more about managing business, and about yourself – don’t forget personal improvement – can pay dividends.
While franchise systems depend on structure, there is always something to learn and some way to contribute. Franchises are not static, but develop and improve over time. You can be part of that process.
4. You see the advantages of a franchise
Sometimes people are put off by the conditions of franchising: royalties and fees need to be paid on top of the initial investment of buying a franchise, and there may be other ongoing costs. But all this enables you to trade under a brand name, have access to successful working modes, and gain the advantages of marketing campaigns.
If you can easily answer the question “Why would I buy a franchise and pay royalties when I can set up in business myself?”, then you have the mindset to make the most of a franchise.
5. You have the funds
The most enthusiastic potential franchisee matched to the perfect franchise will be a successful combination only if financing is in place. That means access to funding for the purchase (whether that is cash, family savings, remortgaging the house or a loan) plus enough working capital to keep the business and family afloat in the early days.
Lack of cashflow is the undoing of many a promising business.
If you have been honest with yourself about your budget and have a realistic business plan based on your own research – not just the franchisor’s figures – then you are ready to approach a bank for funding if necessary, and get your franchise up and running.