At first, opening a franchise business may seem like a simple way to run your own business. But beware, rarely is business simple and in the franchise world, the business is never really yours. Read on to know more about the things you should avoid in order to be successful in your franchise business venture.
Buying a franchise may seem an easy option compared to a business from scratch, but sometimes it’s not that simple. The franchising world is full of adventure and challenges. It tests your patience and skills every now and then. Like every other business, the franchise sector contains both brighter and darker sides. Deep and proper research is required always whenever you decide to go with a franchise business, it decides a happy future for your business.
Read on to know more about the mistakes which you should avoid;
1. Begin with something Tried and Tested:
Most of the future entrepreneurs show their interest in getting on the cart with some trendy new franchise business idea. But the thing they should do is exactly the opposite. If you have just stepped into entrepreneurship and lack experience, it’s better to start with a well-proven franchise business model, that assures a loyal customer base and business. It requires less research, motivating you to learn key factors of the franchisor’s success.
2. Avoid Being your Own Boss every time:
Uniformity and conformity are known as the synonyms for franchising system. A franchisee who holds the reins will lead to becoming an unhappy franchisee. You must follow the order from the main office. Sometimes joining the franchise business feels like joining a military, where you need to follow orders from higher authorities. You need to guide and carry everyone together, in order to make your business a happy and successful one.
3. Remember that Franchise also Fail:
As the myth goes that franchises are less prone to failure than independent and small businesses, although it’s not quite true. The reality is that they also experience failures. You should consider being a part of that chain, which has a very less failure rate. Thorough research on the specific franchise sector could count as a solution to all your future problems.
4. Look for the Franchise Complaints Online/offline:
Before signing a legal document with any franchise business, consider going through the company’s critics to locate the loopholes in the services and products they offer, before moving forward. Every franchise brand has its own websites on which they have message boards and news/discussion columns where franchisees can air their grievances and give advice. Therefore, feedbacks are necessary in order to become a successful and happy franchisee.
5. The Franchisor Holds all the Cards:
Franchisees have essentially taken on a master and that controlling force has the upper hand at all times. Most franchise agreements give franchisors the power to change required procedures, radically alter the product line, or require franchisees to make unexpected expenditures. With the loads of legal procedures that are franchise contracts, franchisors can even sneak in language absolving them of any number of lies and misdirection while taking away the franchisees’ right to raise a grievance.
6. Franchisors can Succeed even if Franchisees are Not Performing Well:
The home office can make more money if its various outlets do well or not. Most franchisors receive a percentage of a franchisee’s gross sales, regardless of whether the franchisee is profitable or not. Others mark-up equipment, products, and supplies they require franchisees to purchase. Still others ‘churn’ franchise locations, reselling them over and over for a profit.
7. Connect with other franchisees in the franchise businesses you are considering:
If you want to make an organization your life, at least for a few years, consider spending time working for it before you buy-in. Getting experience and knowledge is key in making your decision for your business. It will help you in both the short and long term.