Owning a franchise seems like a dream come true; it’s the first step to owning your own business and it comes with an increased degree of security, a business model that works, and a recognised brand name. However, becoming a franchise owner is not a model that works for everyone. Here are seven things you should know before purchasing a franchise.
Know the Risk
Most importantly, you must know the risk you are taking when purchasing a franchise, be it financial or otherwise. You must know the gamble, be aware of the consequences should it be unsuccessful, and be prepared to handle the risk in tricky situations.
Know the Business Model
You must know and understand the pre-established business model of the company so that you can implement it in your franchise with great success. You must know the company rules, how they benefit the business, and what you need to do to ensure you run your franchise in accordance to them.
Consistency
You need to remember that owning a franchise is not the same as owning your own business. Owning a franchise means you have to follow the company’s rules, maintain consistency throughout the business, and operate as per the business model – not just your own vision. Work with professional shopfitters like TU Projects to get the space fitted and ready to serve the community, especially if that involves fitting the specific floor plan and installing tables, benchtops, and shelves that match other stores of the brand.
Wear Multiple Hats
Being the owner of the franchise means you need to wear multiple thinking hats, all day, every day. As the franchise owner, you are responsible for handling the books, managing finances, customer service, cleaning, store presentation and standards, sales, marketing, inventory maintenance, staffing, and more.
Profit Takes Time
Like any new business, a franchise takes time to make profit, so don’t expect an immediate return on your investment. If you work hard, follow the business plan, get support from the franchiser, and manage your personal and business financials, the franchise will be profitable in its own time.
Be Aware of Hidden Costs
Before purchasing a franchise, be aware of any hidden clauses and costs including, but not limited to, undisclosed commissions, legal fees, and term agreements. You also need to understand that your financial investment into purchasing the franchise may not cover simple things like internet connection, telephone systems, office supplies, and electricity, so be sure you know all of the costs involved with the business beforehand.
It’s Hard Work
Finally, owning a franchise is hard work and you need to devote a lot of time, effort, money, and energy into helping it flourish. In the first stage of owning a franchise, your life will revolve around fostering its success, so you may have to put in long hours on weekdays, weekends, and over holiday periods.
Are you a franchise owner? Share in the comments below what you wish you knew before you purchased a franchise or any advice you would give to others who are about to invest in a franchise.
