Key Considerations to Consider When Embarking on Your Journey as a Franchisee
What does it mean to be a franchisee in 2022?
Having survived a global pandemic many individuals will be on the search for a more financially secure profession, purchasing a franchise can offer a happy medium between entrepreneurship and joining a well-established business and is sure to provide an exciting opportunity for a business-minded individual.
Below we outline some of the key considerations to consider when embarking on your journey as a franchisee.
What separates a successful franchisee from a mediocre one?
Communication is key! The well-known saying, “We have two ears and one mouth so that we can listen twice as much as we speak,” applies not only to life but to business too.
Understanding what challenges, you may face when embarking on your franchise journey will prove to be a vital part of your business success.
When partnering with a franchisor, you will gain industry insights from an established business, that has already gone through several trial-and-error business cycles. Being able to have open and honest conversations with all stakeholders in your business (franchisor, suppliers, employees, customers, etc.) will provide valuable insight from perspectives that you may not have taken into consideration before.
Businesses operating in different environments/industries will present different opportunities and challenges. Gaining an understanding of how and where your business will fit into the current market is the first step to ensuring your success.
You need to be fully aware of what you are signing up for.
When you have decided which franchise you would like to partner with, these are just some of the questions you should ask:
Do I understand the franchise agreement and exactly what it outlines?
Businesses will often use complex and confusing legal, financial, and business terms in the franchise agreement that you may not understand. You have a right and a responsibility to understand exactly what you are signing up for before agreeing to anything. There are no stupid questions, just the ones that you don’t ask. Don’t be intimidated by the franchisor, it is your money and your investment on the line.
What limitations are there on me as a franchisee?
How much flexibility will you have when it comes to things like marketing, store design promotions, employee incentives etc. Franchisees often have strict operating and operational requirements that you will need to follow. These will be outlined in the franchise agreement and operations manual that you, will have to understand and agree to before you sign up to become a franchisee. Understanding the restrictive nature of these agreements and policy documents and how you want to operate your business, is an important consideration to keep in mind before signing on the dotted line.
What growth and expansion opportunities may exist for me as a franchisee?
- It is important to start with the end in mind. Do you want to own a single franchise, or do you want to expand?
- Does the company offer franchisee development opportunities and how can you benefit from these programs?
- Showing that you are interested in personal growth as well as growing within the business as a franchisee will put you in good standing with your franchisor and may open doors to expansion as a franchisee.
What plans does the brand have?
- Partnering with a franchisor is one of the most exciting things you will do.
- Understanding that they too are running a business is an important thing to remember. As their business expands and grows, yours will too.
- What new products or services do they have in the pipeline?
- What marketing campaigns will they be running?
- These factors will have a direct impact on your business and are important questions to have answered before you start your franchise journey.
Becoming a Franchisee
The initial process of becoming a franchisee can appear to be a daunting one! It is important to remember that the franchisor has done their due diligence and has more than likely worked with countless franchisees before you.
The first step to take when becoming a franchisee is to determine if you can be a franchisee and to fully understand the business that you will be joining (the good, the bad and the ugly). Considering the financial, emotional, and personal impact this will have on your life is an important consideration to keep in mind when deciding which franchise is best suited for you.
There are various franchise opportunities available and finding one that best suits your personal needs is vital for your success as a franchisee. Your success is the success of the franchisor, they will be your biggest asset when you need guidance and assistance on your journey. The day-to-day operational requirements of your business will be constantly evolving, speaking to people who are in the same boat as you (other franchisees) will provide valuable insights and allow you to feel the support of a peer group that is on a similar journey to you.