Franchising has always been an attractive opportunity for entrepreneurs to test their skills and operate outside of the small business world. People are leaving corporate to pursue the adventure of business ownership, with all the opportunities provided to a bigger business brand.
Franchises come in various disciplines and fields, in a range of shapes and sizes. Franchise offers benefits that launching an independent business couldn’t. However, investors have to do their homework and not take the decision lightly. Due diligence and caution should be essential before investing into potential opportunities. Weighing the pros and cons of franchising is often the best way to start any potential franchising journey.
Weigh up the investment costs, marketing costs, royalty fees and personal satisfaction (work/life balance), understand the opportunities and threats associated with the move into franchising and make sure to understand everything involved with running your own franchise business. However, you should make sure to be aware of the misconceptions and myths around running your franchise as working with accurate and up-to-date advice is the best way to start your journey.
More Money Spent = More Money Earnt
Spending money to make money is a well stated concept in business and though this is still true the way you use the resources available to you could be a better investment of your time and effort.
There will be times where money will be required to ensure that the business keeps running at the less successful points, however, investing time into idea generation can be the real money maker. Simple ideas include creating opportunities for stories that the press will love and provide free coverage for your business like Nescafé’s‘Hello bench’, the advert has a feel good factor that the press loved.
Or using social media to promote your business in a way that engages with customers rather than just the traditional marketing communication model where products and services are the only things the company promotes online.
Hosting events and packaging up products - seasonal opportunities are there for the taking. Create packages customers will love by weighing up how guaranteed higher purchases will affect the income for the company.
Strict Requirements
Some larger franchises will require investors to have a higher amount of liquid assets but this usually applies more to hospitality franchises. There are more attainable opportunities available for those who aren’t rolling in free funds. A few franchise chains will even cover the initial start-up costs.
The idea that you need a serious amount of prior experience to be accepted onto a franchise program, obviously this would help you run a successful business but it is not a requirement for some franchise chains.
Identical Businesses
While it is true that some franchises insist that their franchisees run their businesses in a set format there are some that are a little more relaxed and ask on for internal operational structuring to be done in the same way. This may be due to set agreements in place with suppliers for health and safety and cleaning, to the way certain products and services are prepared. The customer experience that consumers have using a franchise are often the reflection of how the brand treats franchisees.
So make sure not to fall into the trap of believing that all franchise opportunities are equal because there are many brands that allow a lot more freedom to their franchisees.
