For this article, I am assuming you have already done your own research and know about the industry, the history of the franchisor, your own personal financial situation and your family commitment to you becoming a franchisee.
There are four questions you must ask, and have an acceptable answer for, before becoming a franchisee. The first question will surprise you, and the following three are almost as important.
The first question to ask is a question you need to ask yourself. Before you go any further, think to yourself, “Are you ready to be self-employed?”
Over 70% of the working population would like to be self-employed. It makes sense. Personal freedom, time freedom, being a master of your destiny and financial growth are all reasons people consider owning a business. There are other contributing factors including wanting to “be the boss”, eliminating having to deal with office politics and starting an interesting experience that they can’t enjoy from the existing office job.
So why then are only 7% of the population self-employed? Why do 70% want this and only 7% do this? There are many factors that play a role in this including available capital, not knowing where to start or market conditions that have them questioning the decision. The fact is that fear of failure and lack of confidence in being able to make the business profitable are the major factors that get in their way. These two along with a lack of family support for the idea are what cause many to talk themselves out of it.
So, the first question you should ask is, are you ready to be self-employed? Once you know this then deciding on the industry, the franchise chain, the location and the timing becomes easy.
What is the role of the franchisee?
This may sound odd, as if all franchise ownership roles are similar. They are far from it. The franchisor, the franchisee and the franchisee’s team members all have very different roles. When we design and architect a franchise system (taking a profitable business and preparing it for franchising and scaling), we identify with great clarity what the roles and responsibilities are.
In all cases, the franchisee is responsible for store or site operations, the staffing of their site including hiring, leading and managing them, and payroll. They are also responsible for customer service / the customer experience at their location.
In many cases the franchisee is responsible for local marketing or a portion of that marketing. In some cases, the franchisee has either influence or final say on pricing, particularly where custom prices are part of the design.
Understanding what the role truly involves matters. As a franchisee, will you be satisfied only dealing with staffing and operations and not having any input into marketing or business development? This is your life and the decision on the next chapter of it is important. Select something you will enjoy and that adds to the experience of business ownership.
What is the franchisor’s plan for growth?
You will have a better performing business, and your business will be worth more in resale when the chain is larger than it is today. The best franchisors are investing in the business for growth, with franchise development marketing for new locations, plans growth of your revenue line and a plan that often details 3-year and 5-year targets. You want to partner with a franchisor that has big growth plans that are prepared showing a level of responsibility and investment.
Why would you choose to partner with this particular franchise?
In the consumer world, we speak about having a USP (Unique Selling Proposition). In considering franchises, you should look at what they are offering from a leadership, support and business model perspective. Not all franchise systems are the same. In fact, they are all different from one another. When we design and architect a franchise growth plan for a business, we work with the founder(s) and leadership team to build a support, leadership and communication plan that is second to none. We are specific and strategic about the KPIs, how we teach franchisees about the business and just as importantly, what we can automate or build with software to ensure the franchise experience is second to none.
Save your time and the time of business leaders by ensuring you are ready, then proceeding with these questions. They will ensure you are prepared mentally and emotionally for this next exciting stage of your work life.
