Many of the world’s workforce daydream about running their own business and no longer reporting in to someone else from 9-5 each day under someone else’s roof and working to someone else’s rules. For a brave few, this becomes a reality as they look to open their own franchised business and go it alone. Entrepreneurs know that even the survival of a small business is a 24/7 job and requires investment in emotion, money, time and effort – but how do franchises differ? Here’s the things no one tells you about becoming a franchisee… but you’ll wish you knew them before you took the plunge yourself.
Successful franchising takes a particular type of person.
Entrepreneurs working with their own franchised business need to have the drive and determination of any businessperson, but also the political agility to work along with the guidelines and rules made by the overarching franchisor. The ideal franchisee will be both experienced and astute, hard-working and passionate; but able to take direction and work creatively within set boundaries.
While franchisors do offer a high degree of ongoing support with business development, it is a common misconception that running a franchise is an easy option and a ‘gentle’ way in to business. This is rarely actually the case: franchisees must be particularly skilled at business management in order to operate their company successfully.
Just because a franchised business is popular doesn’t mean it will definitely do well.
Many people consider that a big name business being franchised will be popular because the brand is well known. However, this is not necessarily the case. It is imperative that franchisees must carry out extensive market research before embarking on their franchise journey in order to ensure that the business being launched has the best possible chance of survival.
Demand for a brand may not be in place just because there isn’t already of a branch of the chain in the local area. Instead, research must be carried out to ascertain real demand for a business alongside the nature of competition in the area. No matter how fantastic a business’ product/s or service/s may be, not everything will work out everywhere, and so the geographic location and local demographic must be taken into account.
Your time may no longer be your time.
Becoming a successful franchisee is hard work and takes a lot of time. Long hours are the norm, holidays are a rarity and time off is frequently hampered by staff shortages or unexpected occurrences. Just because a franchise is an already established brand does not make it an already established business in the case of every branch, and so the same level of heavy resource investment must be made into it as with any start-up firm.
For at least the first year, franchisees should be aware that they may have little to no time off, and in the run-up to launch (and immediately thereafter), hours will be long and effort levels will be high.
Some franchises can be run from home.
The first type of business that springs to mind for many when they think of franchises are fast food restaurants but there are franchises that can be run from home. However, this does not necessarily mean that franchisees should work from home or that this will be a healthy business set-up.
If franchisees live with others, their new venture is likely to have an impact on others in the home. A separate, usually private, workspace will be required and it may be that the entrepreneur is on the phone or on video calls at all hours of the day and night organising and operating the business. Even if the franchisee lives alone, working in the house full time will affect their home life and leisure time, and so it may not be appropriate to set up in the home.
Money needs to be a primary consideration.
Most people work for others to ensure that they receive a guaranteed pay packet every month – to pay their rent or mortgage, put food on the table and pay the bills on time. This certainty is lost when running a business, as the salary received each month is entirely dependent on the success of the franchise. Any entrepreneur launching a franchise needs to be prepared for the eventuality of no monthly salary at all initially, and often for at least a year.
A franchisor will usually expect around 30% of initial capital to be invested personally, excluding the need for any personal loans. While there are lenders and firms who specialise in the financing of franchises, both start-up and working capital will be required to cover everything – and none of this includes the money to pay the bills of the person running the show every month. All of this must be considered and the franchised journey begun with the highest possible investment made, even if just set aside as a buffer fund for unexpected costs.
Franchising is stressful… but hugely empowering.
Running a franchise instils a vast amount of pressure on the individual doing so, with multiple responsibilities and draws on time. The support of the franchisor is key in nurturing the business and the entrepreneur along to success, but this comes only with complete dedication and very hard work. While the back-up that running a franchise from a proven brand gives is unrivalled, this does not negate the smart and shrewd management and operations that are required from the business owner.
This said any successful franchisee will tell you that no matter how hard the work or long the hours, it is all worth it in the end. The empowerment that navigating a business to success can bring is life-changing and can inspire further development and change within a person’s life through both personal and professional aspects. What does the future hold for franchising entrepreneurs? Only they know… and only they will make it happen.
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