If you are thinking about opening a Franchise business there is a lot of information to review before you make your decision. You need to know how the business operates, how much does it cost, what are the benefits, what are your daily responsibilities as the owner and many more things to learn about. Read below to learn more about 3 Things every franchise company should have.
As you are performing your due diligence make sure to look at these 3 Things every franchise company should have specifically. Every Franchise should have these 3 things.
First, Proven systems & processes. As a new franchise owner the Franchisor should have everything worked out for you in advance. All of the kinks & mistakes should have already been made before you buy a Franchise.
The systems should be clear and work well. The processes should be easy to learn & easy to train. Both should be simple but may not be easy. There is a reason that opening a franchise has a higher success rate and a lower failure rate. The proven systems & processes are the “things” that make the business ramp faster, grow bigger, earn more and succeed at a higher rate.
If the Franchisor is asking you to test things out as a new franchise owner then what is it that you are actually buying into?
Second, Startup assistance, training & support.
The Franchisor should have a clear plan for helping you start a franchise. The startup assistance may include helping you find a location, training for employees, hiring assistance, inventory purchases, grand opening advertising, sign installation and everythng else you need to open a franchise.
Training should be comprehensive. Meaning, it should cover all aspects of the business, not just one or two main things. Training is generally one or two weeks long depending on the complexity of the business and industry. Training would include how to hire employees, how to sell the product or service, how to find clients and customers, how to provide service, basically how to do everthing you need to do to open a franchise.
Ongoing support is critical to the long term success of opening a Franchise. The Franchisor should have a multi faceted approach for support that might include: conference calls, additional training, weekly meetings, monthly discussions, quarterly reviews and more.
As a new franchise owner many franchisors will provide a dedicated support rep, operations manager, regional manager or something similar that will be your go to person. The title might be different but their duties are typically focused on helping you grow a Franchise.
Third, ability to scale.
Many franchise owners try to work on the business not in the business. The difference of ON vs IN is huge in this context.
Working ON the business means you are focused on growth, hiring, training, retention etc…
Working IN the business means you are the front line sales person or service person.
Typically a new franchise owner works ON and IN the business at the same time in the beginning and over time moves toward working ON the business while hiring employees to work IN the business day to day.
Often times working ON the business means investing money into hiring people to work IN the business. So you have to determine if the franchise is scalable. Can you hire people that can outpeform you?
For example, you may be a fantastic sales person. Top of your game. You can sell snow to eskimos.
However, if you were to hire 4 mediocre sales people they would probably be able to outperform you simply because they can sell 4 times as much as you can. Even if they are only 1/2 as good as you are, those 4 sales people would double your own personal sales.
Working ON the business usually means giving up some control of the day to day operations of the business, this is one of the hardest things that most new franchise owners have to overcome when they first open a franchise.
It is also one of the faster ways to scale & grow your new franchise business.
During your due diligence, try and talk with existing franchise owners that have hired other people to work in the business, this should help you see how scalable the franchise is.
I hope you were able to get a few pieces of information out of this article 3 Things every franchise company should have. Feel free to reach out to me. I love talking about opening franchises.
About the author:
John Henning has almost 20 years experience in the Franchise industry as a Franchise Developer, Franchise Owner & Franchise Sales Manager. He has personally helped over 500 entrepreneurs open a Franchise business. You can reach John at: john@openafranchise.com
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