Making the decision to franchise is exciting, but without an understanding of the process it can be tough to move forward with your plan. Here are five smart tips that can help you franchise and make the most of your opportunity.
1. Know Your Tolerance for Risk
Most people who even entertain the idea of owning a business have a high tolerance for risk, but it is important to understand just how high your tolerance is. There are many risks involved in franchising, so you should know how to manage that risk and improve the odds of success. It is no secret many new businesses fail, which is why the security of a franchise is so appealing.
2. Be Prepared to Focus on Business
You do not need to be an expert in a particular field to own a franchise because running the business is your most important task. If you think you will be tempted to jump into the day-to-day operations, it might not be the right franchise opportunity for you.
3. Disregard the Hype
Do not be sold on opportunities that seem too good to be true. Instead, take time to research the opportunities that are available and make the best choice for you. There is no need to choose the hottest or trendiest franchise opportunity when something slow and steady that works for you.
4. Due Diligence
Do everything you can to learn about a franchise opportunity before moving forward. For instance:
Research complaints with the BBB and State Attorney General’s office about the franchise
Speak with a current or former franchisor
Request a Franchise Disclosure Document (FDD)
Spend a day shadowing a current franchisor
5. Follow Your Heart
Finally, it is important to only invest in a franchise opportunity if it speaks to you and you love it. Even if you are not an expert in the industry, it is important to choose something that is enjoyable and will bring you long-term satisfaction.
Making a Franchise Work
As much as the rewards of owning and operating a franchise are emotional, the bottom line is the franchise must be financially solvent to work. It might be appealing to think you are investing in something for the greater good or to feed an emotional need, but for those loftier goals to occur, the business must also allow you to make ends meet.
What are some of the best things you can do to harness to full potential of your franchise?
Respect the Manual
Every franchise has a manual and it is the responsibility of the franchisee to understand the manual and the responsibility of the franchisor to make sure the manual is updated and able to address the most important concerns of franchise owners.
Both franchisee and franchisor must keep the lines of communication open for a franchise to succeed. Franchisors should put into place a communication system that makes it possible to honestly and openly share information about the business. It is also important to have a system for documenting and for ensuring that any policy decisions are easily accessible and easy to understand.
Understand the Brand and Protect the Trademark
These are valuable tools both franchisees and franchisors have and they should be treated as such. A brand helps a franchise build a consistent reputation. Everyone involved in the franchise must understand the importance of consistency and respect for both the brand and trademark, and franchisors should take the time to lay out a clear set of guidelines for using trademarks and anything else associated with the brand.
Finally, it is important to keep tabs on the condition of the franchise. Is it still relevant to the market? Do changes need to be made to bring the franchise model up-to-date with current standards? The economy is an ever-changing thing and unless a franchise evolves it will eventually fail.