CEO of Frenchaward-winning franchise consultant and author of “Profits Are Better Than Pay.”
Owning a business can be risky, so you need to think carefully about the type of business you want to run and the decisions you make in doing so. For example, branding, structure and overall business strategies should be explored and considered.
New businesses require a lot of trial and error, requiring the luxury of time and resources, which not everyone has. That is why franchising is so attractive to many who want to start a business. When you buy a franchise, the hard work of business model planning, branding, and strategy is laid out like a playbook.
Of course, the key to success for any entrepreneur lies in the choices you make and the paths you take. When you buy a franchise, you can avoid many of the hurdles and pitfalls that can lead to failure. So in this article, I’ll look at four of the common benefits that franchising offers, as well as the common challenges that come with those benefits.
Have your own business
The main advantage of owning a franchise is the ownership of a business. Opening a location provides a satellite of a company that already has a successful strategy. It’s like being given the keys to a car; you just have to follow the rules of the road. As a franchisee, you can still build your dream team like other businesses, but you’ll be given the tools to succeed from the start instead of many years down the road.
However, owning a franchise in itself does not guarantee financial freedom. As anyone who has ever owned a business can attest, there are always challenges to overcome. Whether you’re starting a startup or buying a franchise, be prepared to put in the hard work it takes to open your doors. Like a startup, a franchise requires your full attention and the ability to think creatively to solve problems. You also see other challenges in the field of personnel.
Entrepreneurs choose franchises over startups because they have a roadmap for success. A script that is not followed and well planned will never win. Before you open, make the most of the close working relationship with the franchisor and reap all the knowledge, support, and on-the-job training you can get. Giving up fundamental control can be difficult for some, but success is most likely if you follow the company’s lead.
For many businesses, branding can take years to decades — and there are many different attempts to make it stick — but the branding is already done for you with a franchise. Here are a few considerations when choosing a brand to work with.
1. Remember that owning a franchise is a significant investment, not only financially, but it will take up your time. Choose a franchise you feel personally invested in, in a field you find intriguing.
2. Franchises that have been around for a long time are likely to give you the biggest returns at the fastest pace because the foundations have already been laid.
3. Trendy but proven innovators, on the other hand, can empower you to enter the market that is becoming saturated. Be forward-thinking to find a franchise that impresses while being able to sustain it as long as you believe in their mission and values.
Meeting a need locally
One of the most important benefits an entrepreneur can have is meeting a community need. If you notice that something is missing in your environment, finding a way to fill it will make your life easier and increase the likelihood that the community will rally behind your business. But filling a niche isn’t all about profit; sometimes it means making everyone’s lives easier and finding a fulfilling and rewarding new venture.
It is important to look for concrete facts by analyzing your target market based on demographics and sustainability. Most locations have business leaders and networks, such as a Chamber of Commerce, that you can join. It is always best to use all available resources to investigate. The most important thing about research and due diligence is not overestimating your opinion of what people want, but looking for quantifiable and relatable statistics and numbers to support your intuition.
Build on business resources
Most franchises go beyond the franchise model to offer other services in the industry as needed. For example, opening a franchise that solves foundation problems gives you the equipment to look beyond just one service. Value-added services such as new home foundation digging and waterproofing that go hand-in-hand with the original franchise offering can increase your profit margin.
In other words, find other revenue streams to maximize your assets. Franchises give you the benefit of resources in the form of support, training, expert advice, coaching, promotional materials and sometimes even office help. However, if you don’t ask for help, you won’t receive it. Also, make sure to look at your business model in all directions and find the “sweet spot” to maximize your niche in the industry and market.
Step on the right foot when running a franchise
Franchises differ from original startups in the amount of support, training, and planning that is done from the start. But before embarking on any new venture, due diligence is a must, and franchise ownership is no different. There’s little room for error, so do your homework, benefit from the experiences of others, and understand that it takes a huge commitment to make sure the reward is worth the risk.