Pathfinder International were recently media partners for the International Franchise Show held at Excel in London on the weekend of April 5/6. To continue our focus on this sector, Krystena Griffin shares her wisdom on how to overcome the most common problems in this industry.
You should be fully aware of the unique challenges that franchisees can face, before deciding to buy a franchise, some entrepreneurs are simply not suited to becoming a franchisee; whereas some can accept the challenges and overcome them successfully.
Here are some of the most common hurdles that franchisees will need to overcome:
Financing start-up and on-going costs
One of the first hurdles many aspiring franchisees face is financing the costly initial investment.
Even if you have the initial capital in place, you will need to be aware of the ongoing fees that you’ll be paying to your franchisor, which will either be a fixed rate or a percentage of your sales.
This can be a big issue for entrepreneurs who are keen reap all the profits for their hard work and long hours.
So, make sure that you iron out these details before signing on the dotted line, and that you’re happy with the franchise agreement offered.
And to overcome the initial challenge of paying a hefty start-up fee, there are low-cost franchise opportunities that offer entrepreneurs a quicker way onto the franchise ladder.
Many of these prospects are either mobile businesses or home-based franchises which can suit a flexible lifestyle.
Sticking to the model and systems
To enjoy running a franchise, you must be the type of person who finds comfort in sticking to the guidelines and procedures that are already set out for you.
You still need to be highly motivated and ambitious to succeed, and passion will go a long way too. You won’t be able to make changes to suit your local clientele, however, unless your suggestions are approved by head office first.
Franchisors will usually implement changes to ensure the franchise system stays ahead of the competition. They have the right to implement these changes without franchisee consent, which can cause a lot of friction between both parties.
It’s important to choose a sector and franchise structure that you’re inspired by and passionate about, as this will make you feel less restricted when it comes to the general franchise operations.
A franchise should always have open lines of communication with their franchisees, this will ensure that if there are any territory-specific changes or adaptations that need to be made, they can be addressed and resolved in a timely manner.
The franchise relationship
Most franchise opportunities state ‘initial and on-going support’ as one of the main benefits of owning a franchise.
This is common benefit and one of the main appeals to being part of a franchise. However, many franchisees can report that support and communication can be sparse, or, in some cases, non-existent.
On the other end of the spectrum, some franchisors will require their franchisees to attend regular meetings, which can add a sense of pressure for some.
Many franchisors will ensure there will be support, but before you commit to joining a network, talk to other franchisees to find out how much support the franchisor truly offers and how they collaborate to implement changes; you may find that the reality is far different from the pitch.
Achieving a work-life balance
Although you are given support and a proven business model, setting up and running a successful franchise is a large commitment.
Just because the brand may be successful worldwide, you are still fully responsible for making it profitable within your territory.
As a franchisee, you will have less control over the structure of your day compared to independent business owners.
For example, an independent coffee shop owner may choose to close early on a particularly quiet day, so they can be at their child’s school-play; as a franchisee you will have to stick to the opening hours set out by the franchise.
This can be a real challenge for entrepreneurs who crave a more flexible work-life balance.
If flexibility is something you crave, there are still options within the franchise industry.
Many home-based, van-based or remote franchise models allow you to fit work into your own schedule, therefore if this is something you are after, you may want to avoid a franchise which requires you to be the face of a bricks and mortar location.
Investing in a franchise can seem like a whirlwind, however your preparation and due diligence on what you want and what the franchisor expects will help you make the best decision for your future in franchising.
By Krystena Griffin, Writer for all Dynamis brands including BusinessesforSale.com, FranchiseSales.com and PropertySales.com