As opportune as the current business environment may be for starting your own business, many young, aspiring entrepreneurs as well as veteran owners have started exploring the fruitful option of franchising. An old but gold method has regained its popularity in this current climate precisely because it combines the perks of running an established brand with the joy of starting your own business. Still, this excellent opportunity may become an issue more than a pleasure if you don’t prepare yourself for the many challenges that come with this business model.
Franchising is a unique system which takes a specific combination of ingenuity and persistence to succeed, while it also comes with a set of predefined brand expectations you need to respect as a new franchisee on the block. Without further ado, let’s take a closer look at what precisely you should know before you jump into the franchising market, and how to prepare for such a wonderful endeavor.
Infografic: What's Involved in Opening a Franchise?
Get to know your market
If you have ever considered a startup model, you know that innovation paired with passion are the two driving forces of success in this arena. There is no successful new company out there that hasn’t delivered an authentic edge to the market, and the initial troubles of running a company can only be fueled to persevere with the help of your passion. The very same drive is needed in order to succeed in the busy franchising world, and you cannot afford to enter without passion.
That said, how well do you know your franchising opportunities? If you’re not passionate about your future business, even if the brand is not your own brainchild, you should reconsider your engagement. On the other hand, if you’re a foodie at heart, then entering a chain of such stores would be a natural step forward, as long as you have the right means to support business growth and the right skills to manage the business.
Consider the necessary investments
The next key consideration is, of course, funding. Startups, comparatively, can cost significantly more than running a franchise, but then again, certain franchises may come with equally if not even higher price tags due to the complexity of the business or the reputation it comes with the brand. This is why you need to run a franchise cost estimate for the business you have your eye on, so that you check how much capital you would require to start and run the branch successfully.
This can be done by doing your own research, comparing and contrasting among existing franchise opportunities, talking to each franchisor, and of course, taking a closer look at the returns on your investment and how soon you can expect real turnover. For the most part, franchises come with a lower risk of failure and few excess costs, which is precisely what makes them a wise investment for those who are eager to join the business realm under the wing of a reputable brand.
Evaluate your strengths
Even with enough capital to fund your franchising endeavor and plenty of knowledge of your desired industry, you also need to evaluate your own aptitudes and preferences. What do you bring to the table as far as skills and expertise go? Are you an equally suitable manager as you are a marketer and a human resources expert? Many franchising businesses rely on their franchisees to fulfil many different roles until you can actually pay someone to take over a portion of the business.
While you will receive support and guidance from the overarching corporation, to which we’ll get in a few moments, you also need to be able to be independent and self-reliant when the time comes to tackle various issues. To that end, talk to others in the field to determine if you have what it takes not only to give it a go, but to actually succeed in the long-run.
Meet other franchisees
This is where a few genuine conversations may become the final key in your decision-making puzzle. If you have already made your choice when it comes to the right industry for you, established the necessary finances, and determined the best course of action, it’s time to have a chat with existing franchisees who’ve joined the ranks before you.
They will be able to point out some of their biggest issues, how to prevent or at least overcome them, and what to expect from the brand itself. They are a valuable source of help, support, and guidance, so it’s wise to build a relationship with them from the get-go.
Assess the offered support system
Ultimately, since franchising involves plenty of work on brand consistency, from how you conduct your marketing campaigns, how you position the brand on social channels, all the way to hiring the staff, you’ll need to see if the corporation indeed provides enough to see you through the first stage.
After all, running an established brand means embracing existing business models and everything that comes with them, and if you’re not provided with enough support as well as training, that may be a deal-breaker for the complete endeavor.
Starting your own business is a wonderful chapter in your life, and it should be done based on passion as well as proper research. Make sure to step up to the learning curve, get to know franchising as much as possible before you take the leap, and do your best to give yourself the best chance to succeed no matter the competition!