Are you ready to invest but stuck between a rock and a hard place trying to decide if franchising is right for you? It’s an exciting and life-changing decision but what have you heard about the industry? We resolve the five most common myths lingering around the franchising world and find solutions to help you take action!
There is a franchise for every budget. New franchise businesses are generally priced at the cost of setting up a business as well as an initial franchise fee. The franchise fee is paid to join in the success of a proven and profitable business. You pay for the support in launching your business and the use of intellectual property and systems.
A franchise business that involves a storefront or business front will generally cost more than a service-based business due to the establishment costs including bricks and mortar. In addition, if you invest in a well-known and respected franchise, your franchise business will already have a solid marketing plan and customers will already be aware of the brand. As a franchisee, you will soak in the rewards of any national marketing and advertisement by the franchisor.
The franchisor and franchisee relationship when done correctly should benefit both parties. A franchisor shares the success of the franchisee and quality franchise networks focus strongly on helping their franchise partners succeed. Franchise royalties and marketing fees are generally based on
a percentage of turnover so there is motivation to assist a franchisee in excelling.
Franchising is a proven and highly successful business model and it is the hard work of both parties working closely together and diligently following the systems provided that make franchising so successful. A franchisee controls their own businesses level of success and they are in control of their business with the support of a network.
Furthermore, a great franchisor never forgets that it is their franchisee’s success that determines their longevity and overall growth.
A lot of franchisors are adamant that you don’t necessarily need experience in a particular industry to become a franchisee. Whilst a background in the industry is always useful, the most important quality franchisors are looking for are franchisees with passion and the right attitude for the job. The franchisor is also there to provide training and ongoing support throughout the business. Of course, franchisees need to understand what the “day to day” of running the particular franchise you are looking into is all about to ensure it meets your expectations and goals. We’d always recommend doing a work trial in the franchise place to get a taste of what everyday life would be like. In addition, we’d encourage you to have conversations with existing franchisees to get a good insight into franchisee life. All of this is essential to choosing the right franchise business for you.
Financial success cannot be guaranteed with any franchise, however, it is more likely that you will see a return on investment as you use a proven business model which has already been tried and tested throughout the franchise network.
It may also be worth researching the industry you are about to join to analyse key statistics such as revenue, profit and annual growth. You should be able to seek out historical performance and returns from the franchise network too.
Depending on the investment you make and whether the business is new or existing, all factors to the returns you may be able to achieve.
You will base your franchise business on an existing business model however, the franchisee will have a certain degree of freedom. Whilst the franchisor wants to see your business succeed and will advise you on how to operate your franchise business, ultimately you are the owner of your franchise location and will take responsibility for making decisions such as marketing and sales, networking and fun ways to promote the brand.
In addition, accounting and record-keeping is generally the role of the franchisee. Hiring staff and training staff is critical to success and this is also part of a franchisee’s role. There is usually support in understanding the job descriptions and expectations of staff but you will need to drive this side of the business.
It is your business and you control your destiny but with the support and backing of a network.