Franchising grows exponentially every year. This is maybe the reason people are getting more interested to invest in franchise instead of setting up a new business. There could be a lot of advantages that people would be more willing to take risks in franchising; but what others do not know about is that, misconceptions may trap them that could ruin their entrepreneurial undertakings. Therefore, it’s important to arm entrepreneurs with the knowledge will lead to the point where one can decide to franchise or not. This article will help you pinpoint some obstacles in franchising and how you can handle them. Hopefully, you’ll be wiser before you engage into franchising.
- Franchising is easy as 123. People would think about franchising easy, because after paying the fees they’ll go to training and seminar then viola! An instant business! Yes, it’s true that you’ll get a crown to start because you got into franchiser’s systems, but this doesn’t mean you’re walking in the park. Franchising needs commitment and so as the brand. It means you have to work hard on it. Your business will be now your concern 24/7. You’re going to put longer hours in it. You can’t just open the business, sit, then shut down anytime and come back on the next day. You’ll give your business its paid attention. It’s not like a normal employee would go to work Monday-Friday, 9 till 5, keeping himself in weekends or taking absent when not in the mood. The good thing for an employee is that, he’s still getting a salary in pay day, guaranteed. But when you’re starting in franchise, you have to be pro-active and hands-on. You may not be sure if you’re getting anything when you’re just starting a franchise. There are more fees to take care: monthly bills, royalty fees, monthly advertising fees, and so on.
- Franchising is an instant success. This will take you nothing from the truth. Just because you see a lot of outlets, it doesn’t mean when you operate you’ll get loads of money. You must be thinking that more branches mean huge sales and definitely, the business is doing well. Why not try to visit any outlets especially during peak hours? You might end up thinking how awful they were performing the whole day. In this way, you’ll go beyond initial impression. If possible, have a business talk with the existing franchisees. That way, you’ll get a vibrant picture to see how well they sell. You might realize that peak hours don’t last in the day’s entire operation. It will be your advantage if you clear this misconception from the start. As explained above, franchising will take lots of work. So, it’s never be an instant success if it will take time for a concept to work. Be mindful of the entire operation, put more hours in it, be hands-on all the time, and know what works well and not. That’s guaranteed your success!
- Franchising is easy to operate anywhere. We are seeing restaurants left and right in the entire city, we’ve seen the same in the provinces. So, you must be thinking that this concept will do the same to retail and service. But, you might change your mind if we’ll discuss an example. Ever heard of food and drinks in small carts or booths? It is the concept that you cannot open it everywhere. For example, you’re interested in serving cold mixed drinks in a small cart or booth. You’ve found one franchise business that expands very fast because of its high demand, since it’s summer. So, you open a franchise ahead of your house. This will be easy for you as you have your family members will operate while on summer break; on top of that, you won’t be paying for rent. The problem is, you failed to do a feasibility study. Sure, you save more on operating expenses, but are there more people in the area who will be interested to buy your product? Is your location a densely populated area? Therefore, you have to check the demographics: check the number of people, the busiest times, and verify if there are more people who can afford the products. Make sure you do those first before opening a brand.
- There’s a good deal, so sign up right away. Franchiser has creative ideas for franchise sales. Of course, they’ll offer you enormous discounts especially on franchise fee when you sign up the deal right away. You must be thinking now to start the business after getting a good amount in savings. You might have overlooked that you are in the end of the twig. Why? Because, you lost the opportunity to review the business carefully. You might have signed an agreement without checking all of the provisions. For starters, this could be a bad investment. An upfront discount doesn’t mean of a good deal. You might have failed to observe that the products have little expiry periods, or could be the rental fee is unreasonable. The result would be? Owning a business that has high costs with lean margins. Moreover, signing right away may get you unconsciously agreed to the provisions that you are completely opposed to. And this may result future conflicts. It is therefore concluded that rushing a franchise is never be a good idea. Being cautious while in searching the best franchise is a good way to get your dream business. Consult a lawyer should there be a need to. You’ll end up happy and guarantee success knowing you made the right choice.
There are more to discuss about, but the points above are the mere reality which issues are relevant in franchise searching before anyone decides to do franchising. One should be encourage to shop around with what good franchise investments are. Always do the review, not just twice, especially in franchise agreements. Get consultants if possible. The saying goes “slowly but surely” is always reliable.