April 14, 2021
9 minutes of reading
Comments expressed by Businessmen the contributors are their own.
Think about one Franchising only one business-in-a-box. Franchisees provide franchisee with all the supplies and equipment needed to start a business – branding, marketing ideas, sales and marketing training, and field consulting. That said, franchisees must research and ask the right questions before making a long and legally binding commitment to becoming a franchise owner.
The Federal Trade Commission require all prospective franchise owners to wait 14 days before any funds can be transferred. This gives you time to review and review franchise documents in consultation with a legal expert. After working in the franchise industry for 13 years as franchisee and franchisee, I find that taking the time to evaluate your ability to handle the franchise will result in success for both first-time franchisors and franchisors.
1. Rate your own skill set
First and foremost, you need to evaluate your skill set and be honest about it. Sit down and list all of your past jobs, positions and responsibilities. List your strengths and weaknesses, likes and dislikes, relevant points from past and transferable reviews skill.
You are about to be the boss – at least initially. You will manage, advise and evaluate people and will be asked to make managerial decisions. Have you had any experience firing someone else? Is that something you can do with professionalism and compassion? If your soft skill set is lacking, can you get out of your comfort zone to keep up with the speed of your training and development?
2. Arouse your passion
Many people’s first question about any business opportunities is, “How much money will I make?” That’s a sensible question, but it isn’t it’s correct question. Instead, ask yourself, “Do I like the business and get along with the staff?” You will be able to determine what makes you personally and professionally happy, and your business should match your personal beliefs and values. I already own Franchising make good money, but I don’t like them because I don’t see it with my own eyes management team. Your philosophy should resonate with that of your parent company.
Related: Passion, People, Process
3. Calculate your investment
How much do you want to invest? You need to be comfortable making an investment that requires a substantial amount of working capital. If you are uncomfortably thin, you will make the worst decisions for your business. If you’re thinking with your wallet and how much money you have, you’re not thinking with the creative and passionate part of your mind, which should be the heart of your business. Understand all the fees associated with establishing your first franchise and have enough capital to cover them.
When purchasing a franchise, be aware that you will need to pay a franchise fee, which gives you the license and the key to open the door to all of your business’s operating systems, Wise and brand acquired. A brand is an entity known for the following elements built in, and paying the franchise fee automatically gives your business credibility. Also, take into account franchise-specific fees, such as royalties, when creating business plan and convention.
4. Evaluate your personal long-term plan
If you don’t have a long-term personal plan, it is imperative to make one before thinking about entering into a franchise commitment. Signing a franchise contract is a marriage, complete with all the fun, rewards, headaches and heartache. Franchise deals last from 5-25 years, an average of 10 years.
You should have an idea of when you want to retire, if you want. If you have a family, will you scale down? When? Do you feel like you are living now? Do you want to travel? What is your 5-10 year plan and does owning a franchise give you the flexibility to meet your personal goals?
5. Define your role: owner-operator, semi-absent owner or owner absent
There are some businesses that say you’ll have to be owner-operator. Other businesses may require you to simply buy a franchise and it will run on its own. This is also not entirely true: Your role in the business is a process and you have the choice of how it plays out. Personally, I don’t believe there is any such thing as a passive business unless you have an executive partner.
Running a business is not like buying stocks – you don’t buy it and wait for it to make money. When I bought my first franchise, I was an executive owner, but I wanted to spend more time with my family, so I became an out of office sale owner. In the end, I hired the right people, assigned them daily operations and became an absent owner. I was so helpless at the time, but I could never start that way. You have to spend a little time getting to know the business, understanding it and gaining the acumen to make the right hiring decisions with people you trust.
6. Identify the brand that best suits your passions and wallet
According to 2019 Statista Report, has 773,000 franchises in USA, and franchise consultant Mark Siebert guess that The year 2021 will be a typical year for the development of the franchise. There are so many things to choose from, and startup fees vary widely. Budget Blinds LLC can be priced from $ 125K to $ 245K, while Wyndham The Gardens brand starts at $ 447K and can go up to $ 14.4 Millions.
If you can’t see yourself working in a window curtain or a hotel, there are thousands of other businesses in dozens of other industries to choose from – from restaurants to real estate agencies to fitness centers, Beauty salon to hardware store. It all depends on what you love and what you can afford.
7. Consult your inner circle
Be it a family member, another important person, a confidant, a business consultant or a lawyer, someone in your internal circle will make a point you haven’t considered. before and that is worth talking about. You will spend a large amount of time and capital, and your personal life will change as much as your professional life.
For people with a partner or family, this could be a problem. For everyone’s mental health, let’s talk about how those changes could impact your relationships. Even people without partners or families will have additional responsibilities as they become a franchisee, and work life balance will need adjustments.
8. Talk to current and previous franchise owners
This may seem like common sense, but not everyone is looking for current and former franchise owners who have worked with the business through good times and bad times. You should talk to the people you’re interested in, and the easiest way to do that is to simply visit the business and ask to speak with the owner. They can tell you about the management team, training, franchise fees and other things you might not even have thought of.
On the other hand, talking to people who are dissatisfied in their experience can give you pitfalls to avoid. But be careful in your listening and bring overly optimistic and overly pessimistic owners with just a grain of salt. No business is without problems, just as no business is completely rotten.
9. Meet the management team
After you’ve found a business you’re passionate about, that fits your budget, and one you’ve researched carefully, it’s time to talk to everyone in the company, see what their process is. , how they’re organized, and how they’ll support you and get your business going – because that’s why you’re paying for a franchise in the first place.
Make sure you have ongoing support. If you click with someone on the management side and with a team there, you’re ready to have a successful business. You will be in trouble, no matter what anyone says. I have never met anyone who says they have had a smooth trip with the business they own. So when you get over those bumps, make sure everyone on both sides has the same goal. You want the right team to share the right business concepts.
10. Develop your exit strategy
While planning to leave before you start may seem contradictory, developing an exit strategy is both part of a long-term personal plan and an important component of the overall business strategy. your body. Even starting out, you should know your ultimate goal for the franchise. You may want to grow your business and customer base to a certain point and then sell or pass on your business to your children, grandchildren, or other family members.
How easy is it to get out? This is a question you should ask the management team when you meet them. You want to ensure that your exit, whether you are choosing to sell or transfer the franchise, is the same as entering the franchise world.
I find franchising the ideal working environment for me. Although I have encountered difficulties myself, using this route has kept me on track and eventually growing.
Related: Ignore the franchise myths