Operating a franchise business is often underestimated in its difficulty and commitment, and frequently overlooked as an entrepreneurial opportunity by those who simply don’t understand the ins and outs. Online, you’ll find lots of resources and materials supporting and guiding you through the process of buying in to a franchise and taking the business to the launch phase, but many of these sites simply say the same thing and give the same advice repeatedly. But what do real life franchisees wish they knew before they got started? We asked some and checked in with what they weren’t told but should have been. The results may surprise you…
You Need To Consider An Income Replacement
Lots of new franchise owners come from full-time employment – as many as 65% in the UK, according to a 2018 survey held by Natwest! This means for many that there are serious concerns to be had about replacing the usual standard monthly income with something else.
Most franchisors will demonstrate in the franchise agreement and accompanying materials how franchisees will be able to replace their salary, and sometimes exceed it. However, it must be noted that the reality for most franchisees is that the business will not operate with a profit for at least the first year… and often much longer.
This isn’t to say that no income can ever be drawn from a new business, and those who create a comprehensive business plan ahead of launch will be able to demonstrate exactly how. However, lending options should be considered should they be required later on as well as more realistic plans for cashflow. For at least the first year, a franchisee should be able to bankroll their own daily life without having to ‘dip in’ to the business’ finances.
Peer Pressure Can Be Daunting
One of the most commonly cited reasons for not signing a franchise agreement and pursuing running a franchise business is peer pressure felt from those around them – be it a spouse, parents, siblings or friends. Taking on a franchise is a big commitment and with it being a somewhat non-traditional method into business, it is not always favourably thought upon by all; not least those people who are used to spending plenty of time with a potential business owner and may find it infringed upon.
Anyone seriously considering becoming a franchisee should ensure that those around them are ‘bought in’ (not in financial terms!) to the idea of the business and understand the time and resource investment that will be required. While loved ones should by no means be included in every part of the process, including them to some extent will help encourage positive involvement.
Third parties can also help raise questions and concerns that franchisees may not have considered before and so contribute positively in business as well as morale terms.
Marketing Is Not A Skill Everyone Possesses
3% of the UK’s workforce have a job role that involves marketing – yet it seems to often be thought of as a somewhat ‘fluffy’ skill that many can pick up and work with, no matter their experience or professional gravitas in such an industry.
Marketing is a fundamental part of being a successful franchisee and so anyone doing so will need to have a decent understanding of it as well as enough knowhow to manage campaigns and promotion on an ongoing basis. Those who do not have professional experience or relevant qualifications in sales and marketing disciplines will need either train and learn how to manage campaigns successfully or hire others to take on this role for them. Marketing should never be taken on by anyone (franchisee or otherwise) who does not understand or possess the skills to manage it successfully – there is too much at risk to do so.
There Is Help Available – From Multiple Sources
While a franchise parent company will provide support and guidance end-to-end through the process of the franchise agreement being signed, business launch and continued maintenance and operation of the business, there is support available on most aspects of franchising from elsewhere also.
The British Franchise Association (bfa) offer free unbiased advice and information to anyone who needs it, and a business’ banking provider will usually be on hand to do the same for financial matters.
Advice can also be sought from existing franchisees and franchisors who work on existing businesses, even if they’re not of the same brand as the franchisee is intending to work with. The key question to ask any of these people is “would you buy in to the franchise today?” and to identify what they would change about their journey so far if they could do it all again with hindsight. Online sources on advice for franchisees are plentiful but are not always unbiased or perhaps as independent as they may seem and so caution should be taking when taking onboard information from such sites.
Franchising Can Be Hugely Empowering
There is even today a real misconception around becoming a franchisee that suggests somehow it isn’t a proper entrepreneurial move into business. Actually, the opposite is true. Buying into a franchise does indeed provide a solid brand and foundation for business success, but this is by no means guaranteed. A franchisee must work hard in order for the business to survive, thrive and succeed.
Running a business can be hugely empowering and constitutes a huge life event for anyone who rises to the challenge and takes it on. Only those with total dedication, commitment, ingenuity and creativity have the ability to run a business and it can truly make or break a person’s spirit. Franchisees are entrepreneurs and are shrewd businesspeople, and should be respected and applauded for their management and ownership of such reputed businesses.
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