The DOS and DON’TS of Franchise Ownership
The Dos and Don’ts of Franchise Ownership
Here’s what to do – and what not to do – as you open a franchise business.
Find an industry that’s right for you
As you start looking for the right franchise opportunity for you, think about the work you want to do and that aligns with your skills and experience.
Once you have a general idea of what you want to do, think about the where. Research the competitive landscape of your desired markets and look for industries with enough consumer demand for your business to succeed.
Find a brand that’s right for you
After you determine which industry (or industries) are right for you, start looking at the brands in each of those industries. Look for brands with values and goals that align with yours. Then, make sure each brand has the tools and opportunities to help you succeed (e.g., start-up assistance, financing options, training programs, ongoing support, etc.).
Research your customers
For each brand you consider franchising with, take a look at the customers they serve. Get a firm understanding of your target audience’s needs, wants and problems. Make sure you choose a brand that can provide solutions to those problems for the long term.
Leverage the franchise brands support system
Most franchise brands offer extensive support to franchisees including initial training, financing assistance, marketing support, IT services and ongoing training. As you start and grow your business, make sure to leverage the support system of the brand.
Think long term
On that note, make sure the franchise brand you choose has plenty of staying power. Look for brands that are protected from technological disruption and that embrace innovation to stay ahead of the pack.
Once you’ve found a franchise brand with staying power, think about the growth potential of your own business. Find a brand that allows you to grow your business by branching out to additional locations or expanding your customer portfolio at a rate that you’re comfortable with.
Assume franchising is a sure thing
While franchising gives you access to an established brand’s name, reputation and business model, it doesn’t mean your success is guaranteed. It’s important to find a brand in a growing industry with plenty of potential for future success and a robust support system.
Bite off more than you can chew
Before you invest in a franchise, determine your startup budget and risk tolerance. Startup costs vary across franchise brands. With some brands, it can cost millions of dollars to open a franchise location. Make sure to find a brand with startup and operational costs in your budget and that has a business outlook to mitigate risks.
Leave any stone unturned
As you’re researching potential brands to franchise with, make sure you find out everything there is to know about your investment. This requires going beyond costs. You need to conduct exhaustive research to make sure the brand has the training and support systems in place to help you:
● Start your business on the right foot
● Run the day-to-day operations
● Grow your business
Skimp on marketing and advertising
When it comes to franchising, effectively promoting your business requires individual effort on your part and national campaigns from the corporate office. Make sure you choose a brand that offers extensive marketing and advertising support and provides you the tools you need to promote your business at the local level.
Choose a outdated industry
The last thing you want to do is invest in the next Blockbuster (or a brand in any of a number of industries that are prone to disruption). Instead, look for brands that embrace innovation and offer products and services that people will use for years to come.