4 Things I Wish I Knew Before Starting My Franchise Journey

As a erstwhile franchise proprietor and existent franchise consultant, I americium often asked astir lessons learned some from individual acquisition and from moving pinch much than 800 franchise candidates complete nan years.

Below I've included a fewer applicable insights that connection actionable ways to thief you connected your franchise journey.

1. Key successful connected basal wide head skills

Traditionally, arsenic a wide head — aliases arsenic I for illustration to telephone it, nan OEO (Only Executive Officer) — you are a jack of each trades. You'll request to cognize upfront whether you (the franchise owner) scheme to return connected nan domiciled of wide head aliases if you are going to prosecute personification to tally day-to-day operations.

Note: The basal skills for a wide head alteration depending connected what type (location-based marque aliases service-based brand) of franchise you own.

Location-based brands:

When I was moving a boutique fittingness franchise, I discovered immoderate important indicators that looked awesome connected paper, but didn't construe to sales.

As a fittingness business, we attracted group who were awesome instructors and passionate astir fitness. However, we soon discovered that this passion didn't construe to sales. Additionally, aft moving pinch 1 wide head who had a awesome characteristic and worked hard, we discovered that he did not person a awesome woody of foresight. If thing was wrong, he didn't cognize really to scheme aliases look up to create early opportunities for success.

In turn, we had to specify that nan perfect wide head was personification who lived and breathed income and had fantabulous trading savvy, positive a passion for fitness. Defining these captious skills for occurrence allowed america to prosecute much effectively. Generally, nan operations for location-based brands are very checklisted, leaving nan captious accomplishment for your wide head arsenic trading and sales.

Service brands:

In general, service-based brands are much hands-on and are much apt to travel an owner-operator model. (As opposed to my location-based boutique fittingness brand, see a home-service marque for illustration painting.)

In years past, these franchise owners would not only execute skilled labour and negociate customer requests/ticketing, but besides negociate trading and income projects. Fortunately, astir 5-10 years ago, advancements successful exertion streamlined service-based income needs. Now, these owners person robust operations package that is system for marketing, ticketing and sales. In turn, those brands person go much semi-absentee and managers don't person to beryllium income and trading geniuses.

Thus, for service-based brands, alternatively than worrying astir getting customers, their basal skills must halfway connected nan delivery/execution of services and managing employees.

Related: Which Franchise Model is Right For You? Here's How to Choose.

2. Prioritize nan correct location

It seems obvious: Choose a location successful a populated area. However, it's not rather that simple. When I first started out, I grounded to admit nan value of density for location.

The goal: You request a precocious density of your floor plan customers.

As a wide norm of thumb: The much predominant nan customer, nan much convenient it needs to beryllium to their location (the much density you request wrong a 10-minute driving radius.) If group are coming to you erstwhile a period aliases erstwhile each 2 months, they are going to beryllium a small little delicate to location.

As a franchisee, you person a awesome limb up successful site selection because of nan narration pinch your franchisor. For example, your franchisor should person entree to a demographic floor plan of their customer which includes family income, property ranges, etc. Beyond accepted demographics, galore besides usage psychographics that bespeak really group walk their money (lifestyle characteristics), what their elasticity whitethorn beryllium (traveling quiet nesters, for example) and immoderate of their economical capabilities (Dual Income No Kids aliases "DINKS").

Note: While immoderate of these devices tin beryllium very sophisticated, it isn't nan only point to consider. You request section existent property expertise and your ain gut check. Don't blindly trust connected nan franchisor — they should green-light it, but you request to triangulate.

Related: Thinking of Franchising Your Business? This Franchise Consultant Shares His Most Essential Advice After 20 Years successful nan Industry

3. Invest successful effective tools

It's important to put successful devices that will springiness you nan champion bang for your buck. For example, successful my fittingness franchise, we invested successful an inexpensive scheduling package that was highly effective.

First, we defined 3 basal occupation roles: manager, displacement leader and staff.

By cross-training, we ensured that a head could execute their duties and nan duties for a displacement leader aliases a unit worker, a displacement leader could execute their duties and those of a unit worker, and a unit worker could only execute wrong their defined role. Anyone supra could activity immoderate role. If anyone had to miss a shift, they could connection their displacement to anyone trained successful their domiciled and it automatically made it disposable for different personification to take.

This instrumentality saved america clip and managerial headaches while empowering our labor to find their schedules. Take nan clip to investigation effective devices for your marque — you'll convey yourself later.

4. Ensure you person capable moving capital

At nan extremity of nan day, you are moving a business and must person capable startup capital.

One awesome origin of nonaccomplishment successful young franchises isn't that franchise owners don't person a bully business, but that they whitethorn beryllium undercapitalized and don't let for capable separator for error. Maybe a pandemic hits, possibly their wide head quits, etc. People thin to underestimate nan worth of having "extra" capital.

Item 7 of FDD (Franchise Disclosure Document) outlines nan "Estimated Initial Investment" that a caller franchisee will beryllium required to person earlier getting started. This archive will person a breakdown showing a debased file and a precocious file (ex: vehicles, equipment, etc). The rule requires a minimum of 90 days liquid capital.

Related: Is Franchise Ownership Your Next Wealth Move? Here's How It Compares to Four Other Income Streams

The reality is that fewer caller businesses will beryllium cash-flowing (earning money) successful 90 days — moreover though that's nan requirement, it's not realistic. Make judge that you are giving yourself a small much wiggle room than you deliberation you'll really need.

There is nary measurement to side-step each nan obstacles that travel pinch franchise ownership, but it's important to study from group who person acquisition successful franchising earlier diving in.